IAG Limited t/as NRMA Insurance v Alaskari

1. [1]

   HER HONOUR: By summons filed 25 October 2019, the plaintiff seeks, firstly, an order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the decision of the third defendant in his capacity as a claims assessor of the State Insurance Regulatory Authority of New South Wales (“SIRA”), dated 29 July 2019, to refuse the plaintiff’s application for exemption, made purportedly pursuant to s 92(1)(b) of the Motor Accidents Compensation Act 1999 (NSW) (“the MAC Act”); secondly, an order in the nature of prohibition or, alternatively, an injunction preventing the defendants or any of their officers, servants or agents from acting on or taking any further steps in reliance on the decision; and thirdly, an order in the nature of mandamus remitting the matter to the second defendant for allocation to a different claims assessor to re-determine the plaintiff’s exemption application according to law.

2. [2]

   The plaintiff is IAG Limited t/as NRMA Insurance (“the insurer”). The first defendant is Answar Kareem Alaskari. The second defendant is SIRA. The third defendant is Gary Victor Patterson in his capacity as a claims assessor of SIRA (“the claims assessor”). As the second and third defendants have all filed submitting appearances, there is no active contradictor. The insurer relied upon the affidavit of its solicitor, Diana Germanoski, dated 19 December 2019.

3. [3]

   The insurer engaged in a non-curial personal injury dispute assessment process in SIRA. The process involves an assessment of a quantum of damages by a claims assessor, who is a person—usually a lawyer—who SIRA has determined to be “suitably qualified” and appointed to be a claims assessor pursuant to s 99 of the MAC Act. A claims assessor is empowered to assess claims and make decisions under ss 88-121 (Part 4.4) of the MAC Act, and also in accordance with ss 122-156 (Chapter 5).

Background

1. [4]

   The first defendant was allegedly injured in a motor vehicle accident on 26 November 2015 in New South Wales (“the accident”). She lodged a claim for personal injury damages with SIRA against the insurer pursuant to Part 4.4 of the MAC Act.

2. [5]

   In the course of the proceedings, when lodging its reply to the application for assessment of damages using Claims Assessment Resolution Service (“CARS”) Form 2R on 15 November 2018, the insurer made a formal application seeking an exemption of the first defendant’s personal injury damages claims from being assessed by SIRA pursuant to Part 4.4 and Chapter 5 of the MAC Act.

3. [6]

   The insurer’s application was made pursuant to s 92(1)(b) of the MAC Act, and was opposed by the first defendant.

4. [7]

   The application was brought on the basis that the insurer had made a formal and particularised allegation that the first defendant had made multiple false or misleading statements in relation to the injuries, loss or damage she alleged she sustained in the accident. The insurer relied upon cl 14.16.11 of the Claims Assessment Guidelines of SIRA (“the Guidelines”).

5. [8]

   A first preliminary conference in respect of the insurer’s application was held on 17 December 2018 before the claims assessor. At that preliminary conference, the claims assessor noted that the insurer made “an application for discretionary exemption based upon an allegedly false and misleading claim.” He directed the first defendant to serve further expert reports and to provide submissions in reply to the insurer’s discretionary exemption application by 31 January 2019.

6. [9]

   On 30 January 2019, the first defendant served brief submissions of three paragraphs on the discretionary exemption application and a supplementary statement in which she sought to explain the apparent discrepancies between her claims and the surveillance footage. She also served two further expert reports.

7. [10]

   On 18 February 2019, the claims assessor conducted a second preliminary conference. He noted that the insurer did “not wish to make any further submissions” and also noted the parties’ agreement that the discretionary exemption application should be dealt with on the papers. He expressed the view that the claim was suitable for assessment.

8. [11]

   On 29 July 2019, the claims assessor refused the insurer’s discretionary exemption application and provided reasons for his decision.

The law

1. [12]

   Section 92 of the MAC Act reads:

The Guidelines

1. [13]

   The Guidelines, issued under s 69(1) of the MAC Act and effective from 1 October 2018, outline the procedures to be followed by claims assessors in the assessment of claims under Part 4.4 of the Act.

2. [14]

   Under the heading “Unsuitable for Assessment under section 92(1)(b)”, cls 14.11 and 14.16.11 of the Guidelines state:

3. [15]

   The insurer relied on its submissions that were before the claims assessor. It is not in dispute that these submissions were before the claims assessor.

4. [16]

   Paragraph [4] of those submissions summarise the surveillance showing the claimant’s activities which the insurer claimed were inconsistent with her injuries. The insurer then contrasted those activities with what the first defendant has told doctors about and her injuries and disabilities.

5. [17]

   At paragraph [5], the insurer submitted the following:

The decision of the claims assessor

1. [18]

   On the first page of his decision, the claims assessor stated:

2. [19]

   Later in his decision, under the heading “Determination”, the claims assessor stated (CB 37):

Judicial review generally

1. [20]

   This Court has jurisdiction to grant any relief or remedy in the nature of a writ of certiorari, which includes jurisdiction to quash the ultimate determination of a court or tribunal, including both a medical assessor and proper officer, if that determination has been made on the basis of an error of law on the face of the record. The face of the record includes the reasons expressed by the court or tribunal for its ultimate determination: s 69 of the Supreme Court Act 1970 (NSW).

Grounds of judicial review

1. [21]

   There are two grounds of judicial review. The first is that the claims assessor failed to respond to a substantial, clearly articulated argument. The second is that the claims assessor provided inadequate reasons for his decision. In considering these grounds, I acknowledge that I have largely adopted the insurer’s submissions.

2. [22]

   The first alleged error is that the claims assessor failed to respond to the insurer’s substantial, clearly-articulated submissions in support of its discretionary exemption application.

3. [23]

   I have set out the insurer’s submissions to the claims assessor earlier in this judgment. The submissions to which the claims assessor failed to respond included the insurer’s submissions that the claim was not suitable for assessment because:

4. [24]

   The failure to respond to a substantial, clearly articulated argument put forward by a party is a breach of the rules of procedural fairness. The failure to consider the substance of a party’s case also constitutes a constructive failure to exercise jurisdiction.

5. [25]

   A number of aspects of the claims assessor’s reasons indicate that, at the time he made his decision, he was unaware of the insurer’s submissions.

6. [26]

   Firstly, it is apparent from the opening paragraphs of his decision that the claims assessor considered the application for a discretionary exemption to have been made orally at the first preliminary conference on 17 December 2018. The application was in fact made in the written submissions which formed part of the insurer’s reply to an application for assessment of damages, lodged on 15 November 2018. The claims assessor’s statements that the insurer made “no written submissions” and indicating that it “did not wish to make any written submissions” at the second preliminary conference are incorrect. As the record of the second preliminary conference held on 18 February 2019 indicates, Ms Germanoski confirmed then that “the insurer [did] not wish to make any further submissions”, not that it did not wish to make any submissions, as it had already done so.

7. [27]

   Secondly, the claims assessor’s statement that he arrived at his decision “in the absence of written submissions by the insurer” makes plain that he determined the discretionary exemption application without considering the insurer’s submissions which were filed with its reply on 15 November 2018. In addition, his expressed difficulty in identifying the claimant’s statements which are alleged to be false and misleading indicates that the claims assessor did not have regard to the submissions. Over five pages of the insurer’s submissions are dedicated to setting out the large number of statements which it said were false or misleading under the heading, “4. False and misleading statements.”

8. [28]

   Finally, the claims assessor commented in the record of the third preliminary conference, which was held after he had provided his reasons, that he had inadvertently omitted to add the word “further” before the word “written” in the second paragraph of his reasons. This explanation, and especially the use of the word “inadvertently,” is inconsistent with the inference from the fourth paragraph of the decision, and its final page, that the claims assessor was unaware of the insurer’s written submissions when making his decision.

9. [29]

   I acknowledge that the claims assessor did not have an obligation to consider every piece of evidence presented. However, he also did not refer to submissions of substance made by the insurer which, if accepted, were capable of affecting the outcome of its application. The aspects of the claims assessor’s reasons discussed above lead to the conclusion that he overlooked the insurers submissions when making his decision on the insurer’s exemption application. This is a breach of procedural fairness.

10. [30]

    Moreover, even if he did not overlook the insurer’s submissions, he erred in law by failing to respond to the insurer’s substantial, clearly-articulated arguments. The failure to consider the substance of the insurer’s case constituted a constructive failure to exercise jurisdiction. For these reasons, the decision is invalid.

11. [31]

    The second alleged error of law is that the claims assessor failed to provide adequate or lawful reasons for his decision.

12. [32]

    In Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; 303 ALR 64 (“Wingfoot”), the High Court considered a similar statutory regime which provided for medical panels to assess Victorian workers compensation claims. In relation to the duty of a medical panel to give reasons for its decision, the High Court stated at [55]:

13. [33]

    Wingfoot has been applied repeatedly in New South Wales in relation to both medical assessors and claims assessors under the New South Wales scheme in the MAC Act: see Frost v Kourouche (2014) 86 NSWLR 214 at [2], [40]; Zahed v JAG Limited t/as NRMA Insurance (2016) 75 MVR 1 at [34].

14. [34]

    In making its decision, the claims assessor in these proceedings was bound to set out his actual path of reasoning and to do so in terms sufficiently clear so as to enable a reader to determine whether or not he fell into legal error.

15. [35]

    The claims assessor’s duty to give reasons for his decision was further heightened because the insurer had raised those specific areas of contention in its submissions.

16. [36]

    In Allianz Australia Insurance Limited v Francica (2012) 63 MVR 1, Hall J stated at [17]-[18]:

17. [37]

    In his determination, the claims assessor stated that “in the absence of written reasons by the insurer”, he was left to “infer” that the insurer’s claim was that the claimant had exaggerated her injuries, loss or damage. He stated that “there does not appear to be any express requirement that reasons be given [by a claims assessor] where an application for a discretionary exemption is refused”. He then concluded, “Having considered all of the material before me, I am satisfied that a fair and just hearing could be had at an assessment conference.”

18. [38]

    For the reasons given in relation to the first ground, it is my view that the claims assessor’s reasoning leads to the inference that he made his determination in absence of the insurer’s submissions. However, even if the claims assessor had considered the insurer’s submissions, his reasons read exactly as they would if he had not. In other words, his reasons do not enable this Court to see whether his opinion involved an error of law, as required: see Wingfoot at [55]. As such, it is my view that the claims assessor failed to provide adequate or lawful reasons for his decision. For this reason, the decision is also invalid.

Appropriate remedy

1. [39]

   The insurer submitted that the matter should be remitted to SIRA for allocation to a different claims assessor for re-determination. That is the order which is sought in the (unopposed) summons.

2. [40]

   I do not ordinarily accede to requests to make an order that a matter be remitted to SIRA for determination by a different claims assessor, as appointing claims assessors is usually a matter for SIRA to decide. However, it is my view for several reasons that an order remitting the matter to be determined by a different claims assessor is particularly appropriate in this case.

3. [41]

   Firstly, the claims assessor sought to informally amend his decision at the third preliminary conference, in a manner which might suggest he was trying to conceal or deny his mistake in overlooking the insurer’s submissions. More importantly, the claims assessor signed the exemption application decision as “Special Counsel & Associate Director” of Chamberlains Law Firm, indicating that he was an Accredited Specialist in Advocacy, Dispute Resolution and Personal Injury. This is comparable to the claims assessor in Insurance Australia Ltd (t/as NRMA Insurance) v Banos (2013) 65 MVR 312 (“Banos”) publishing her reasons on the letterhead of the legal practice of which she was a partner. In Banos, Campbell J commented that he considered this practice to be “very undesirable” (at [94]). His Honour was of the view that publishing the decision on the letterhead of the legal practice “may detract from the essential appearance of independence and impartiality” (at [94]) required of a claims assessor.

4. [42]

   For all of these reasons, I accede to the insurer’s request that the matter be remitted to SIRA for re-determination by a different claims assessor.

The result

1. [43]

   The result is that the claims assessor has failed to afford the insurer procedural fairness and constructively failed to exercise jurisdiction. I make an order that the claims assessor’s decision to refuse the insurer’s application for exemption, made purportedly pursuant to s 92(1)(b) of the MAC Act, be quashed and that the proceedings should be remitted to SIRA to be determined in according to law.

Costs

1. [44]

   The insurer does not seek costs from the submitting defendants.

   1. (1)

      The decision of the third defendant dated 29 July 2019 in CARS matter number 2018/12/3355 is vitiated by jurisdictional error.

   2. (1)

      In the nature of certiorari removing into the Court the decision of the claims assessor in CARS matter number 2018/12/3355 and quashing that decision.

   3. (1)

      CARS matter number 2018/12/3355 is remitted to the second defendant to be allocated to a different claims assessor for re-determination according to law.

   4. (2)

      There is no order as to costs.