Insurance Australia Limited trading as NRMA Insurance v Mayer

1. [1]

   This judgment involves judicial review of a decision of a Member of the Personal Injury Commission of NSW in relation to the meaning of the word “incurred” pursuant to s 3.28 of the Motor Accident Injuries Act 2017 (NSW) as it then was.

2. [2]

   The plaintiff is Insurance Australia Limited trading as NRMA Insurance (the insurer). The plaintiff is represented by M Robinson SC with J Gumbert. The first defendant is Alexander Mayer (Mr Mayer) who appeared and was self-represented. While he made some submissions, this judicial review largely proceeded without any real contradictor. The second defendant is Elizabeth Medland (the Commission Member) in her capacity as a Member of the Personal Injury Commission of New South Wales (PIC). The third defendant is the President of the Personal Injury Commission of New South Wales. The second and third defendants have filed submitting appearances.

Background

1. [3]

   On 12 January 2023, Mr Mayer was injured in a motor vehicle accident in NSW (the accident).

2. [4]

   The insurer is the Compulsory Third Party insurer of the vehicle that Mr Mayer considered to be at fault for the accident.

3. [5]

   Mr Mayer applied to the insurer for statutory benefits under Pt 3 of the Motor Accident Injuries Act 2017 (NSW) (the Act), on the basis of the injuries he sustained in the accident.

4. [6]

   A dispute arose because the insurer denied payment of treatment expenses on the basis that the treatment occurred after the liability period ended, being 26 weeks from the date of the motor vehicle accident. Mr Mayer claimed that the treatment was related to surgery, funded by the insurer, that he underwent during the 26 weeks. The insurer paid $42,032.06 for surgery-related expenses that were received prior to 13 July 2023.

5. [7]

   The total cost of the treatments initially denied by the insurer was $3,023.12. This sum of $3,023.12 relates to expenses incurred after the 26-week period stipulated by s 3.28 of the Motor Accident Injuries Act 2017 (NSW) (the Act). Mr Mayer claimed expenses for post-operation consultations, medication, travel to appointments and a gym membership for rehabilitation purposes.

6. [8]

   At this judicial review, senior counsel for the insurer informed the Court that, with the exception of the gym membership, “the post cut-off date expenses” have now been paid by the insurer (T10 [33]-[36]). Thus, the only payment that remains outstanding is the sum of $150.00 claimed for gym expenses. The insurer says that although it has paid the expenses referred to above, it was not actually obliged to pay them.

7. [9]

   The dispute came before the Commission Member for determination pursuant to s 7.41 and/or Sch 2, cl 3(n) of the Act on 5 October 2023. The Commission Member determined that the accident was “wholly (mostly)” caused by the fault of Mr Mayer. This fault determination is not subject to challenge.

8. [10]

   On 24 July 2024, the Commission Member determined that under s 3.28 of the Act, the insurer was liable for the treatment and care expenses of Mr Mayer regardless of whether the treatment was provided after the 26-week period from the date of the motor vehicle accident (the decision).

9. [11]

   The insurer seeks a judicial review on the basis that the meaning of the word “incurred” in s 3.28 of the Act is one that needs to be determined by the Court.

The amended summons (judicial review)

1. [12]

   By the summons filed 27 September 2024, the insurer seeks the following relief:

   1. (1)

      An order in the nature of certiorari or alternatively, a declaration setting aside or declaring invalid, the decision of the second defendant that was made on 24 July 2024 purportedly pursuant to s 3.28 of the Motor Accident Injuries Act 2017 (NSW) that the plaintiff is liable for treatment and care expenses, whether or not the treatment was provided after the 26-week period from the date of the motor vehicle accident.

   2. (2)

      An order that the matter be remitted to the third defendant for determination by a different Member according to law.

Grounds of judicial review

1. [13]

   In essence, the only issue to be determined is the meaning of “incurred” in the context of s 3.28 of the Act.

The statutory framework – Motor Accident Injuries Act 2017 (NSW)

1. [14]

   I shall briefly set out the relevant provisions of the Act at the time of the decision under review.

2. [15]

   At the time of the accident, s 3.11 of the Act read:

3. [16]

   Section 3.28 of the Act read:

4. [17]

   The Act was amended by the Motor Accident Injuries Amendment Act 2022 (NSW), commencing on 1 April 2023, extending the period in ss 3.11 and 3.28 to 52 weeks. As per Sch 4 of the amending legislation, this period does not apply to motor accidents occurring prior to the commencement of the amendments. Therefore, the applicable time period for the payment of statutory benefits in this case is 26 weeks.

The relevant guidelines

1. [18]

   At the time of the accident, the relevant guidelines were the State Insurance Regulatory Authority Motor Accident Guidelines Version 9.1 (the guidelines) which commenced on 1 April 2023 (T11 [37]-[38]).

2. [19]

   There is no specific guideline in relation to s 3.28 of the Act.

3. [20]

   The process for dealing with claims for treatment and care expenses is strictly set out in the guidelines (T11 [39]-[41]). An insurer must determine a claim within ten days; and must conduct an internal review (if requested and the insurer accepts that it can do so), within seven days of receiving an application from a claimant (at pars 4.105 and 7.12 of the guidelines respectively).

4. [21]

   Compliance with the guidelines is a condition of an insurer’s licence (as per s 10.7 of the Act) and that breaches put “their licence to operate in this industry at risk” (T11 [44]-[47]).

5. [22]

   The relevance of the timeframes in the guidelines, beyond the fact that compliance is a condition of an insurer’s licence, was that given the limitation on a claimant’s entitlement to statutory benefits, the process for determining entitlement must be done fairly expeditiously.

6. [23]

   In relation to the Commission Member’s concerns regarding delay, counsel for the insurer submitted that they were not relevant given that the whole process is regulated by the guidelines and non-compliance has consequences (T22 [46]-[49]).

The decision of the Commission Member dated 24 July 2024

1. [24]

   The relevant sections of the Commission Member’s decision are extracted below:

Review ground – misconstruction of law

1. [25]

   The insurer submitted that the Commission Member fell into legal error in making the decision, such that there was jurisdictional error of construction and/or an error of law on the face of the record. In the alternative, the insurer submitted that there was a constructive failure to exercise jurisdiction such that the decision is invalid.

2. [26]

   Although Mr Mayer was entitled to receive statutory benefits from the insurer on a no-fault basis under Pt 3 of the Act, that entitlement is limited by factors including, whether the accident was caused wholly or mostly by the claimant. At the time of the accident, s 3.11 of the Act provided that a claimant was not entitled to weekly payment of statutory benefits for loss of earnings beyond 26 weeks after the motor accident if it was caused wholly or mostly by the fault of the claimant.

3. [27]

   The Commission Member impermissibly focused on whether the insurer incurred liability for expenses, rather than focusing on the correct meaning and use of the word “incurred” in the context of s 3.28(1) of the Act. Rather, when read in the context of the section, the relevant question is whether the expenses were incurred 26 weeks after the motor accident, not whether the insurer incurred a liability for expenses before that time.

4. [28]

   While the expenses that were in dispute before the Commission Member might have been related to a liability that was incurred prior to 26 weeks (being the liability for surgery), the expenses themselves were incurred more than 26 weeks after the motor accident, given that all of the expenses are for treatment after that date.

5. [29]

   The treatment may have been reasonably necessary in connection with the earlier surgery (for which the insurer was liable and for which the insurer paid). However, that is not the determinative question. The expenses here were expenses in fact incurred after the statutory liability period ended.

6. [30]

   Contrary to the Commission Member’s findings, it is not necessary to read words into s 3.28(1) to arrive at the construction contended for by the insurer. Rather, the insurer says that a plain reading of the section, and reading the word “incurred” in context, leads inexorably to that construction.

7. [31]

   The ordinary meaning of the word “incur” may be relevant (per SkyCity Adelaide Pty Ltd v Treasurer of South Australia [2024] HCA 37 at [32]).

8. [32]

   The Macquarie Dictionary defines “incur” as follows:

   1. (1)

      To run or fall into (some consequence, usually undesirable or injurious).

   2. (2)

      To become liable or subject to through one’s own action; bring upon oneself: to incur her displeasure.

9. [33]

   However, this dictionary definition is of limited assistance when considering the word “incurred” in the statutory context of having incurred an expense.

10. [34]

    For one to incur an expense as a concept is readily understood. An expense “incurred” is even more straightforward as it is rooted in the event having already occurred. It does not relate to the future. It is an expense incurred solely in the past.

11. [35]

    Of more assistance to the statutory interpretation is consideration of the word “incurred” in the context of taxation laws, as considered by the High Court in Federal Commissioner of Taxation v James Flood Pty Ltd (1953) 88 CLR 492 at 506-507; [1953] HCA 65 (‘James Flood’):

12. [36]

    Although the word “incurred” in s 3.28 is not used in the Act in a taxation context, the principles of “definitively committed”, “actually incurred” and “more than impending, threatened, or expected” are apt and identify the contentions the insurer seeks here.

13. [37]

    To put it in factual context, the expense of Mr Mayer’s surgery itself was “incurred” before 13 July 2023, given that the obligation to pay for the surgery arose at the time the surgery was performed. If the bill for surgery had been rendered after 13 July 2023, the insurer would still have been liable for the cost of the surgery, as the expense was incurred prior to the termination of the period of liability.

14. [38]

    However, to the contrary, the expenses for follow up treatment and travel were expenses that were nothing more than (at best) expected as at the time the liability period ended, and perhaps not even expected but merely foreseeable as possible future expenses (somehow related to the surgery that had already occurred). While they might have been related to the surgery, they were not in fact incurred prior to 13 July 2023 (the statutory cut off period).

15. [39]

    Mr Mayer’s argument before the Commission Member that “surgery costs are surgery costs”, which was accepted by the Commission Member as holding considerable merit, is incorrect. The expenses that the claimant was claiming were not “surgery costs” but rather were costs that could be considered as being related to, and which were subsequent to, surgery. The timing of the costs (even if they could be construed as surgery costs, which the insurer says they cannot) is such that they were distinguishable from the costs that were in fact incurred within the liability period.

16. [40]

    Were the construction to be otherwise than as advanced by the insurer, the insurer is exposed to an indefinite and potentially never-ending liability to pay for all future expense that may be deemed to be related to treatment that was incurred during the liability period. This is a construction that is clearly at odds with the plain text of the section, and the context in which “incurred” is used.

17. [41]

    Further, the construction adopted by the Commission Member would frustrate the purpose of s 3.28 as a provision plainly designed to cease entitlement to statutory benefits after the defined period. If “the Courts can identify the target of Parliamentary legislation their proper function is to see that it is hit: not merely to record that it has been missed” (Wass v Director of Public Prosecution (NSW); Wass v Constable Wilcock [2023] NSWCA 71 at [4] citing Lord Diplock, “The Courts as Legislators” in Brian W Harvey, The Lawyer and Justice (Sweet & Maxwell, 1978) 263 at 274).

18. [42]

    The Commission Member relied on s 1.3 of the Act, specifically s 1.3(2)(a). Here, the objects of the Act are listed in s 1.3; and they are competing objects.

19. [43]

    It does not assist in the statutory construction required here to select only one of them when others tend against it, as in Allianz Australia Insurance Limited v Estate of the Late Summer Abawi [2025] NSWCA 85 at [59].

20. [44]

    In construing s 3.28(1) in the way that she did, the Commissioner Member constructively failed to exercise her jurisdiction and also made an error of law.

21. [45]

    At the hearing on 25 July 2025, the AVL connection did not work. Mr Mayer briefly made submissions over the telephone on loudspeaker (that was because Mr Mayer was driving in Melbourne (T2 [17]-[21]; T3 [7])).

22. [46]

    Mr Mayer began by asserting that he had a legal right to file a cross claim in this judicial review but that the Court rejected the filing as it was not the usual practice.

23. [47]

    This submission is wrong. There is no provision to file a cross claim in a judicial review in the Supreme Court Act 1970 (NSW) nor the Civil Procedure Act 2005 (NSW).

24. [48]

    Mr Mayer then went on to identify that his submissions were contained in his affidavit dated 2 April 2025 that he filed and served on the insurer.

25. [49]

    Essentially, Mr Mayer’s argument is that the Commission Member’s interpretation of the word “incurred” was correct because otherwise, insurance companies would be empowered to delay payment for treatment until the end of the liability period. By reference to his affidavit dated 2 April 2025, Mr Mayer said:

Resolution

1. [50]

   The Commission Member accepted Mr Mayer’s argument that “surgery costs are surgery costs” as having considerable merit. The insurer submitted that this interpretation of the word “incurred” is incorrect.

2. [51]

   The expenses that Mr Mayer claimed were not “surgery costs”. Rather, they were costs related to surgery.

3. [52]

   If the Commission Member’s interpretation were accepted, the insurer could be exposed to an indefinite liability to pay for any future expenses that could be said to be related to treatment incurred during the liability period. Such an interpretation conflicts with the plain text of s 3.28 of the Act and the context in which the word “incurred” is used.

4. [53]

   Mr Mayer satisfied both sub-sections (1) and (2) of s 3.28 of the Act. It is s 3.28(3) of the Act that comes into play in this judicial review, where the word “incurred” appears. As discussed earlier, the applicable Motor Accident Guidelines are silent in respect of s 3.28 of the Act.

5. [54]

   However, s 3.28(3) relevantly read:

6. [55]

   To my mind, s 3.28(3) of the Act does not require the authorisation of the guidelines but rather, the words "or in other appropriate circumstances" contained in s 3.28(3) provide a discretion to the insurer to pay the treatment and care expenses.

7. [56]

   Contrary to Mr Mayer’s submission, if the insurer delayed approval for treatment and care in circumstances where that treatment and care would improve the recovery of the injured person, the insurer can be obliged to make those payments. Section 3.28(3) also provided that the insurer may otherwise authorise payment of treatment expenses in other appropriate circumstances. That is precisely what it did. In these circumstances, it is not appropriate to decide what the meaning of “incurred” is as it appeared in the former s 3.28(3) of the Act. As was stated in James Flood, “[i]t is unsafe to attempt exhaustive definitions of a conception intended to have such a various or multifarious application”.

8. [57]

   Pursuant to s 3.28(3) of the Act, the insurer has already exercised its discretion to pay these treatment expenses, so there is no utility in remitting the matter for a further determination.

The result

1. [58]

   As the insurer has already paid the invoices to Mr Mayer, with the exception of the gym fees, there is no utility in referring the Commission Member’s decision back to the PIC. The application for judicial review is dismissed.

Costs

1. [59]

   Costs are discretionary. The plaintiff was unsuccessful, but the first defendant’s submissions were largely unhelpful.

2. [60]

   It is my view that the appropriate order for costs is that each party pay its/his own costs.

Orders

1. [61]

   The Court orders that:

   1. (1)

      The summons filed 27 September 2024 is dismissed.

   2. (2)

      Each party pay its/his own costs.