Allianz Australia Insurance Limited ACN 000 122 850 v Moo Ok Park

1. [1]

   HER HONOUR: This is an application for judicial review of a Claims Assessor in the Workers Compensation Commission. By summons filed 28 September 2014, Allianz Australia Insurance Ltd seeks an order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the decision of the second defendant, made pursuant to s 94 of the Motor Accidents Compensation Act 1999 (NSW) (“the Act”); and an order (in the nature of mandamus) remitting the matter to the third defendant for determination of the application according to law to be heard by a different claims assessor.

2. [2]

   The plaintiff is Allianz Australia Insurance Ltd (“Allianz”). The first defendant is Moo Ok Park (“Ms Park”). The second defendant is Thomas Goudkamp in his capacity as a Claims Assessor (“the CARS Assessor”) appointed by the Motor Accidents Authority of New South Wales. The third defendant is the Motor Accidents Authority of New South Wales. The second and third defendants have filed submitting appearances.

3. [3]

   Allianz relied on three affidavits of Elizabeth Ann Medland affirmed 13 October 2014, 24 November 2014 and 8 January 2015. Ms Park relied only on a few documents contained in the affidavit of her solicitor Wendy Deborah Hunt affirmed 23 December 2014.

Factual Background

1. [4]

   On 20 October 2005, Ms Park was injured in a motor vehicle accident. At the time of the accident she was a self-employed contract cleaner. Allianz was the compulsory third party insurer for the driver at fault. Liability was not in issue.

2. [5]

   On 25 July 2014, the AMS issued a certificate awarding Ms Park the sum of $496,457.45, which included the amount of $454,656.00 for past economic loss. The sum awarded for past economic loss makes up the bulk of the assessment. That sum is the subject of this judicial review.

The CARS Assessor’s reasons dated 25 July 2014

1. [6]

   The CARS Assessor detailed Ms Park’s account of her pre and post-accident history as follows:

2. [7]

   When assessing the reliability of the evidence of Ms Park, the CARS Assessor said that:

3. [8]

   In particular, the CARS Assessor stated:

4. [9]

   When assessing Ms Park’s most likely future circumstances but for the accident, the CARS Assessor said:

5. [10]

   It is necessary for me to briefly set out all of the CARS Assessor’s reasoning in relation to loss of income. The CARS Assessor stated:

6. [11]

   Allianz contended that the above reasoning of the CARS Assessor for awarding past economic loss to Ms Park contains four significant errors and is accordingly erroneous in law and should be set aside. I will dealt with each error below but it is convenient that I deal with ground 4 first then with the other overlapping grounds.

(1) Failure to provide adequate reasons – Ground 4

1. [12]

   According to Allianz, the CARS Assessor erred in failing to state reasons as to why he awarded the said amount of damages to Ms Park for past economic loss as required by s 94(5) of the Act and clause 18.4 of the Claims Assessment Guidelines (“the Guidelines”). The Guidelines are made pursuant to ss 69(1) and 106 of the Act. As a result of not doing so, Allianz submitted that the decision is invalid and should be set aside.

2. [13]

   Section 94(5) of the Act reads:

3. [14]

   Allianz’s main complaint was that the CARS Assessor failed to spell out, if only in brief, his real reasons for his determination on past economic loss, in order to comply with s 94. It was submitted that he also failed to provide reasons that adequately and demonstrably comply with the law and referred to Allianz Australia Insurance Ltd v Ward (2010) 57 MVR 327; [2010] NSWSC 720 where Hidden J at [40] stated:

4. [15]

   Allianz also contended that the CARS Assessor failed to set out the reasoning processes that led him to his conclusions on past economic loss, as expressly required by clause 18.4 of the Guidelines. Clause 18.4 provides:

5. [16]

   Allianz also referred to Insurance Australia Limited Ltd trading as NRMA Insurance v Hutton-Potts (2010) 57 MVR 194; [2010] NSWSC 1446 at [43] where Schmidt J held that clause 18.4.3:

6. [17]

   Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 was cited by Allianz to highlight the importance of fully stated reasons as an essential legal requirement for a quasi-judicial tribunal. In Vegan, the reasons were held to be inadequate and the decision was set aside. As Basten JA explained at [130]:

7. [18]

   In Vegan, Basten JA (with McColl JA agreeing) also set out the proper standard for reasons (when speaking of statutory medical assessments made under the NSW workers compensation legislation) at [121]-[122]:

8. [19]

   Basten JA in Vegan at [128] continued:

9. [20]

   While Allianz conceded that sometimes it may be obvious from the way a case is run what the real reasons were, it argued that this was not one of those cases. According to Allianz, the findings referred to are not only manifestly illogical, but are wholly unexplained and due to this lack of any plausible justification, the decision is invalid by any standard.

10. [21]

    Allianz argued that by reference to which reasons or adequate reasons might be reasonably assessed by a Court, the CARS Assessor’s reasons are entirely bereft of support and are, in effect, no reasons at all.

11. [22]

    In particular, Allianz argued that the CARS Assessor failed to explain:

12. [23]

    Ms Park’s overall response is that when understood correctly, the reasoning behind the findings of the CARS Assessor concerning past economic loss was obvious and met the above statutory and delegated obligations, particularly in light of decisions such as Allianz Australia Insurance Ltd v Sprod (2012) 81 NSWLR 626; [2012] NSWCA 281.

13. [24]

    Senior Counsel for Ms Park attempted to explain the reasoning behind the findings of the CARS Assessor, by saying at [8] to [20]:

14. [25]

    According to Ms Park, the statements above provide the explanation as to why the CARS Assessor could have expected a return by Ms Park to her full workload with weekly earnings of approximately $1,200. Senior Counsel for Ms Park interpolated that if one were to take the monthly amount of $7,288, reduce it to a weekly sum and then apply the appropriate tax rate in place the result would roughly equate to the $1,200 figure. He argued that as the CARS Assessor was only obligated to provide brief reasons, he was not required to go into such detail about the reasoning processes behind such figures. Ms Park conceded that while it was inconvenient that certain connections were not spelled out, it is not unlawful in the relevant sense.

15. [26]

    Ms Park referred to several authorities in support of her proposition. They are Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1 at 35-36 (and cited with approval in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6 at [31]) and Allianz Australia Insurance Ltd v Cervantes (2012) 61 MVR 443; [2012] NSWCA 244. In Cervantes, Basten JA said at [22]:

16. [27]

    Allianz’s response was that Ms Park’s submissions seek to provide her own explanation for the CARS Assessor’s calculation of past economic loss, which is wholly unhelpful and inappropriate and involves “reverse engineering”.

Conclusion

1. [28]

   The starting point for this Court in determining whether the CARS Assessor had failed to state reasons in his assessment of Ms Park’s past economic loss is that set out in Wu Shan Liang at 271-272. The CARS Assessor reasons should not be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. This Court should not be concerned with “looseness in the language … nor with unhappy phrasing”: Collector of Customs v Pozzolanic (1993) 43 FCR 280 at 287.

2. [29]

   It must also be borne in mind what was said by Basten JA in Allianz Australia Insurance Ltd v Kerr (2012) 60 MVR 194; (2012) 83 NSWLR 302 at 316:

3. [30]

   A number of the CARS Assessor’s findings in relation to past economic loss are clear. They are firstly, that had Ms Park not been injured her most likely future circumstances were that she would have continued to work as a contract cleaner, either in her own business or as an employee; secondly, that there was no physical reason, prior to the accident, why Ms Park could not have continued to work the hours which she had been working with Jani-King (NSW) Pty Ltd; thirdly, that Ms Park’s decision to work fewer hours was a lifestyle choice at the time; and fourthly, that Ms Park had the retained capacity to increase her working hours, if she wished. The CARS Assessor also made a finding that Ms Park’s most likely future circumstances were that she would, in time, have increased her working hours to meet her ongoing financial commitments.

4. [31]

   In relation to the amounts Ms Park actually earned, her retained earning capacity and loss of earnings during her periods of incapacity, the CARS Assessor made further findings. They are that firstly, at the time of the accident Ms Park was earning approximately $600 net per week, in her part time cleaning job, and that she had a retained earning capacity of $1,200 net per week. As to the periods of incapacity, the CARS Assessor made a finding that Ms Park was unfit for work because of her injuries from the date of the accident, namely, 20 October 2005, for a period of three years until 20 October 2008, and then made a further finding that Ms Park was partially unfit from 21 October 2008 until 31 December 2013, and that during this latter period she had a retained residual earning capacity of $300 net per week.

5. [32]

   In his assessment of past economic loss, the CARS Assessor took into account both parties forensic accountant’s reports but did not fully accept the opinions of either author. Ms Park relied upon the Dolman Bateman reports and Allianz relied upon the Vincents’ report. The opinion expressed in the Dolman Bateman report was not accepted by the CARS Assessor on the basis that its author, Ms Fiona Bateman, had wrongly assumed that Ms Park was working full-time in the franchise business at the time of the accident, and had also wrongly assumed that her injuries continued to render her unfit for work. In light of these incorrect assumptions, the CARS Assessor considered Ms Bateman’s opinion to be unreliable. So far as the Vincents’ report is concerned, the CARS Assessor stated that he had also carefully considered the author’s opinions and calculations in relation to past and future economic loss but he did not fully accept them because he considered they had not taken into account the severity of Ms Park’s injuries, her reasonably impressive pre-accident work history and, also because for the most part he accepted Ms Park as a witness of truth and Vincents’ opinions did not reflect the conclusions he made in relation to the medical evidence.

6. [33]

   So far as the calculation for past economic loss is concerned, the CARS Assessor split it into three staggered periods of loss. No amount was assessed for future economic loss because he made a finding that the back pain Ms Park suffered as a result of the accident had resolved by 31 December 2013. The CARS Assessor made two findings that at the time of the accident Ms Park was earning approximately $600 net per week in her part-time cleaning job and that she had a retained earning capacity of $1,200 net per week and that she was totally unfit for any form of work because of her injuries for a period of three years, namely 20 October 2005 to 20 October 2008. This period of total incapacity was split into two periods. The first was from 20 October 2005 until 20 April 2006 and her past economic loss was calculated at $600 net per week. The next period was from 21 April 2006 until 20 October 2008, a period of 126 weeks at $1,200 net per week, presumably because she would have increased her working hours from 24. The last period, where she was partially unfit, was from 21 October 2008 until 31 December 2013, when she had a retained residual earning capacity of $300 net per week. The CARS Assessor then made the arithmetic calculations and assessed Ms Park’s past economic loss at $454,656.

7. [34]

   The subject of judicial review is in relation to the actual amounts the CARS Assessor assessed for actual earnings at the time of the accident and the retained earning capacity. In short, the issue is how did the CARS Assessor arrive at the figures of $1,200 net per week, $600 net per week and $300 net per week, and did he sufficiently set out the reasoning process that led him to make those conclusions (Guideline 18.4.3).

8. [35]

   The Dolman Bateman report dated 28 January 2010 annexed some source documents. They are Ms Park’s individual income tax returns for the financial years 2002 to 2006; partnership income tax returns for financial years 2002 to 2008 and the profit and loss statements for financial years 2005 to 2006; remittance advices in relation to the Balmain and Chatswood Monkey Bars in the name of Soung Jin Park (Ms Park’s husband); Cleaning and Building Services Contractors (State) Award wages and the Australian Bureau of Statistics average weekly earnings of female cleaners. The CARS Assessor made no specific reference to any of those documents in his reasons.

9. [36]

   The premise upon which, Senior Counsel for Ms Park explained, the CARS Assessor made the calculations of the past economic loss is, he said, set out in the Doleman Bateman report dated 11 June 2014 at (3) where it states:

10. [37]

    From that premise, Senior Counsel for Ms Park then explained how the CARS Assessor arrived at the amounts of $1200, $600 and $300 net per week (the more expanded explanation has been set out in paragraphs [11] to [20] of his submissions reproduced at [24] of this judgment).

11. [38]

    The CARS Assessor recorded that Ms Park’s evidence is that at the time the franchise [Jani-King] was terminated she was earning approximately $1,800 net per week. I have perused the forensic accountant’s reports and documentation attached to the Dolman Bateman reports to ascertain whether there was an implicit reference in them that must be accepted to support the figures of $600, $1,200 and $300 net per week (Cervantes at [22]). There was no such material or clear evidence to support those conclusions. It is clear from the CARS Assessor’s reasons that after the accident Ms Park’s back condition continued to improve and that meant that she was able to increase her actual earning capacity. However, it is not satisfactory that one should be required to undertake the exercise that Senior Counsel for Ms Park asked this Court to do. That is, to make a best guess as to why those figures were relied upon by the CARS Assessor.

12. [39]

    It is not clear how the CARS Assessor arrived at the figures $600 net per week, $300 net per week or the retained earning capacity of $1,200 net per week. The reasoning process that led the CARS Assessor to make these conclusions have not been set out as required by Guideline 18.4.3. In my view, the CARS Assessor failed to provide proper reasons and the decision is invalid and should be quashed. It is not necessary to deal with the other overlapping grounds of judicial review.

13. [40]

    Costs are discretionary. Costs usually follow the event. The first defendant is to pay the plaintiff’s costs as agreed or assessed.