IAG Limited t/as NRMA Insurance v Zahed

The First Defendant, Asmahen Zahed (the Claimant), was involved in a motor vehicle accident on 27 October 2010 when another vehicle collided with the rear of her vehicle. She experienced shock and two hours later some abdominal pain. The Claimant was 36 weeks pregnant at the time however the baby was unharmed. She experienced low back pain, neck pain and other symptoms which continued. The Claimant made an application for compensation to the insurer of the vehicle at fault for the accident, IAG Limited t/as NRMA Insurance.

On 14 October 2014 Mr Terence Stern, a Claims Assessor appointed under the Motor Accidents Compensation Act 1999 (NSW) (the Act) assessed the Claimant’s entitlement to damages in an amount of $114,979.45 made up as follows:

​By summons filed on 28 November 2014 IAG Limited, the Plaintiff in these proceedings, seeks by way of judicial review to challenge the findings as to past and future care.

The figure of $36,280.38 was arrived at in consequence of the Assessor concluding that the Claimant had required 6.76 hours per week of gratuitous care during the period from the date of the accident to the date of assessment. The sum of $50,000 was assessed as a buffer.

Prior to Assessor Stern’s consideration of the matter, there had been other assessments. One, by Assessor Kossoff, was that the Claimant did suffer an Adjustment Disorder with Depressed Mood in the context of chronic pain. Mr Stern accepted this was a consequence of the accident. A second, by Assessor Marsh, was that the Plaintiff had also suffered a chronic musculo-ligamentous condition of the low back and of the neck in consequence of the accident.

No doubt influenced by these prior views Assessor Stern took the view that as a result of the accident the Claimant sustained a whiplash injury to her low back resulting in a chronic musculo-ligamentous condition and an Adjustment Disorder with Depressed Mood in the context of chronic pain.

A third assessment, by Assessor Davidson, dealt with a number of questions to the effect of whether a variety of specified numbers of hours, varying by one hourly increments between 0 and 14 were reasonable and necessary in relation the injury sustained in the subject accident for “domestic assistance arising from injuries caused by the motor vehicle accident and relating to assistance for tasks including cooking, meal preparation, washing, hanging up washing, ironing, vacuuming, sweeping and mopping floors, cleaning kitchen, bathroom and laundry, taking out rubbish and shopping”. There were further questions relating to the future.

Ms Davidson answered all of these questions in the negative but went on to conclude that the care which she considered reasonable and necessary was:

The 6.76 hours figure was derived by Ms Davidson as follows:

​Before me the parties were agreed that Assessor Stern was bound by the answers Ms Davidson had given to the specific questions posed for her but not by her further conclusions.

The reasons of Assessor Stern extend to some 14 pages. In the course of these he provided, inter alia, a brief summary of the earlier assessments and a number of medical reports. He refers to evidence from the Claimant and a Ms Tan and quotes from a “Domestic Assistance” section of a report of Dr Maniam and a report from an Occupational Therapist Jenny Greenfield who observed that the Claimant had essentially achieved a goal of becoming independent in all aspects of her domestic care. Apart from some reference to findings as to the Claimant’s symptoms and that these impacted on her ability to carry out some household activities – which findings said nothing about time – Assessor Stern’s reasoning that led him to the figure of 6.76 hours per week was as follows:

The “summary recommendation…at p 35” is that set out above indicating how Assessor Davidson arrived at the figure of 6.76 hours per week.

So far as the future was concerned Assessor Stern remarked:

On behalf of the Plaintiff it was submitted that Assessor Stern made five errors. The first was that the reference to “current rate” in paragraph 48 quoted above demonstrates that Assessor Stern erred by failing to have regard or give genuine consideration to the limitation in Ms Davidson’s view that $6.76 per hour was only appropriate to 8 November 2011. It was submitted that his remarks display an absence of “active intellectual engagement” with that limitation and a constructive failure to exercise jurisdiction.

The second error suggested is that Assessor Stern failed in similar respects when considering Dr Maniam’s evidence. Insofar as Dr Maniam’s estimate of 8 hours included time spent in child care, an appropriate deduction had to be made because it had been conceded that the Claimant had no entitlement in respect of child care. Attention was directed to other evidence, including some by Ms Greenfield and some by the Claimant indicating that appreciably more than 1.24 hours per week was needed for such care. The Assessor had referred to this other evidence earlier but then seems to have had no regard to it in arriving at his decision.

The third error alleged was that the Assessor failed to have regard or give genuine consideration to some other matters that were in evidence, viz:

During the course of the hearing before me that Plaintiff’s counsel conceded that this ground was relatively insignificant compared with the other errors she had identified.

The fourth error alleged was that the Assessor had failed to give adequate reasons for his decision. Reference was made to the requirement for brief reasons contained in s 94(5) of the Act and clause 18.4 of the Guidelines issued under that Act. A number of cases to which it is unnecessary to refer at this stage were also relied upon.

The fifth error alleged was of legal unreasonableness, it being contended that the Assessor’s decision contains inconsistencies and lacks an evident and intelligible justification.

The limits on a court asked to review a decision of a claims assessor have been considered on a number of occasions and there is no need for me to say more on the topic than that to succeed in setting aside an assessor’s decision a party must establish jurisdictional error, a constructive failure to exercise jurisdiction or legal unreasonableness – Craig v State of New South Wales (1995) 184 CLR 163, 179; Minister for immigration and Citizenship v SZMDS (2010) 240 CLR 611, 645; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, 363. Particularly given the requirement in s 94(5) of the Act and clause 18.4 of the Motor Accidents Authority Claims Assessment Guidelines that an assessor provide reasons, albeit reasons which are brief, a failure to provide reasons constitutes an error within the group to which I have referred – Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372 at [31], [33], [130].

The decision of the majority in Minister for Immigration and Citizenship v Li makes it clear that legal unreasonableness encompasses circumstances where:

For his part, counsel for the First Defendant drew attention to a number of cases dealing with the assessment of damages for past gratuitous care, submitting:

Issue was taken with the Plaintiff’s characterisation of much the Assessor had done, it being contended that the Plaintiff was in effect seeking a merits review of the decision. Attention was drawn to many aspects of the evidence before the Assessor.

Section 94 of the Act provides for the making of an assessment by a Claims Assessor and requires the issuing of a certificate to the parties as to the assessment. Subsection 5 provides:

Clause 18(4) of the Guidelines issued under the Act provide:

It is not a compliance with these provisions merely to refer to some or all of the relevant evidence, assert that it had been taken into account and then state a conclusion. To do so does not amount to “reasons” within s 94(5) or a “reasoning process” or, possibly unless the evidence is only one way, “a manner of determining” an amount.

As the High Court said in Wingfoot Australia Partners Pty Ltd v Kocak (2013) 303 ALR 64; 88 ALJR 52, [2013] HCA 43 at [55]:

That case was a decision on a Victorian statute that required a medical panel to give reasons. There is no reason to think that the obligation on assessors in the position of Mr Stern is any different.

It may be accepted that the reasons of an assessor should not be scrutinised over-zealously Allianz Australia Insurance Limited v Moo Ok Park [2015] NSWSC 122 at [28] and the reasons required are not those which may be expected of a judge – Allianz Australia Insurance Limited v Kerr [2012] NSWCA 13; 83 NSWLR 302 at [53]. Nevertheless, the fact remains that Assessor Stern revealed no reasoning process, and provided no reason why he selected the figure of 6.76 hours per week and, although it might be possible to infer he simply adopted Ms Davidson’s figure, he provided no reasons why he did so, or why he adopted that figure for the whole of the period of past care, or why he rejected Ms Davidson’s view that the figure should be 3 hours per week for some of that time.

Counsel for the Claimant relied on the decision in Allianz Australia Insurance Limited v Ward [2010] NSWSC 720 at [39]. This is of no assistance to the Claimant once regard is had to the reference to the Assessor’s reasons identifying “how he has arrived at the numbers” attributed to the various heads of damage.

Attention was also drawn to statements in Allianz Australia Insurance Limited v Sprod [2012] NSWCA 281; (2012) 81 NSWLR 626 at [42] and Werner v Krahe [2002] NSWCA 168 to the effect that in the assessment of damages there is a place for informed intuition and speculation and the question is largely one of impression. I am content to accept that the law is as stated. However, that provides no reason in cases where intuition, speculation or impression found the basis for a conclusion, for the fact that the conclusion was so reached being so indicated.

In this case the Assessor did not comply with the requirements of s 94(5) or Guideline 18 and accordingly, there is an error of law on the face of the record and the assessment must be set aside. It follows also that I need not embark upon consideration of the other errors which the Plaintiff’s counsel ascribes to the Assessor.

The form of orders appropriate in the circumstances was not the subject of discussion during the hearing. Those which seem to me appropriate are as follows: