NRMA Insurance Limited v Mulcahy

By summons filed on 19 July 2017 the plaintiff, NRMA Insurance Limited (the insurer), seeks relief under s 69 of the Supreme Court Act 1970 (NSW) against the first defendant, Keiran Mulcahy (the claimant); the second defendant, Gary Patterson, in his capacity as a Claims Assessor of the State Insurance Regulatory Authority of New South Wales (the Assessor); and the third defendant, State Insurance Regulatory Authority of New South Wales (SIRA). The Assessor and SIRA have filed submitting appearances.

The orders sought in the summons seek, in effect, that the Assessor’s certificate dated 15 May 2017 in which he assessed the amount of damages in respect of the claimant’s claim for damages as a result of the motor vehicle accident in which he was injured on 1 July 2012 as $1,504,870.37 be set aside as invalid. The insurer argued that the assessment ought be set aside on the basis that the assessments of damages for past and future economic loss involved an error of law on the face of the record, a jurisdictional error or was legally unreasonable.

The Assessor purported to make the assessment pursuant to s 94(1)(b) of the Motor Accidents Compensation Act 1999 (NSW) (the Act) and issued a certificate of assessment to which his reasons were attached. All references in these reasons are, unless otherwise indicated, to this legislation.

Where error of law on the face of the record is alleged, only the record can be used to determine whether there has been error which, for the reasons given below, includes the reasons attached to the certificate of assessment.

However, as the insurer also relied on jurisdictional error, its submissions require an analysis of the evidence relevant to the claimant’s claims for damages for past and future economic loss in order to determine whether any alleged error is of that character.

The facts as set out in the Assessor’s reasons and, where relevant, the evidence, can be briefly stated. On 1 July 2012 the claimant, who was then 59 years old, was driving along the Princes Highway near Rose Valley Road, Gerringong at about 70 kms/hour. The insured vehicle was driving at high speed towards him and crossed the middle line of the road and struck the claimant’s vehicle head-on. The claimant’s vehicle was later found in a ditch beside the road. The claimant was conscious when he was discovered. His feet were stuck under the brake pedal. He was aware that a fire had started in the rear of his vehicle. He feared for his life. It took some time for him to be extricated from the vehicle. The insurer is the compulsory third party insurer of the vehicle at fault and has admitted liability.

The claimant had qualifications as a civil engineer, and also in valuations. He completed a Diploma in Building Science at Sydney University. At the time of the accident he was working as a self-employed property consultant. As a result of injuries suffered in the accident, the claimant was unable to work for a period. He resumed work but his income was reduced. The Assessor found that the claimant’s capacity for work was “restricted by his physical and psychological impairments” as a result of the accident. The Assessor concluded that the heart attack which the claimant suffered in 2016 had not affected his earning capacity. The Assessor found that the claimant continued to suffer from “significant physical and psychological disabilities which may remain with him for the remainder of his life”.

The claimant relied on two expert reports from Chris Katehos and Cecilia Tang of Furzer Crestani in support of his claim for damages for loss of earning capacity. These reports were dated 29 August 2016 (the first report) and 14 February 2017 (the second report) respectively. In substance, the first report compared the claimant’s pre-accident income with his post-accident income and attributed the difference to the accident. The claim for past economic loss was predicated on a projection of the pre-accident earnings from 1 July 2012 to the date of the assessment from which the claimant’s actual earnings were deducted. The claimant, who was 63 years old at the date of assessment, said that, but for the accident, he would have continued to work as a self-employed property consultant until he was 70 years old. The claim for future economic loss assumed minimal residual earning capacity.

In the first report the authors calculated the difference between what the claimant would have earned but for the accident and what he in fact earned on the basis of two scenarios, referred to as Scenario 1 and 2. Scenario 1, which produced a lower figure, was based on their calculation of the claimant’s Annual Net Business Income (ANBI) for the four financial years from 2009 to 2012. From this figure they derived an “Average Annual Indexed ANBI” of $237,515, which was used for the two years following the accident.

From the total figure calculated for the hypothetical past earnings but for the accident, the claimant’s actual earnings since the accident were deducted, which produced a total figure for past loss of $410,938 for the period from 1 July 2012 to 31 August 2016. The claim for loss of future earning capacity, was based on a weekly loss of $2,496.08 as set out in Schedule M to the first report.

The insurer contended before the Assessor that the amounts for past and future earning capacity ought be assessed by way of a buffer rather than a mathematical calculation such as those relied on by the claimant in the first report. It relied on its expert Mr Gaudion, who provided a critique of the first report.

In his reasons the Assessor largely adopted Scenario 1 in the first report for both past and future loss of earning capacity. The Assessor accepted two of Mr Gaudion’s criticisms of the first report and rounded down the figure for past economic loss on that basis. He applied the same percentage deduction to the claim for future economic loss.

Because the insurer’s challenge to the assessment was, in essence, a challenge to the Assessor’s reasons for the assessment of damages for past and future economic loss, it is necessary to set out the passages from the reasons in which the assessment was made. The Assessor said in his reasons, of present relevance:

The insurer argued that it was not possible to tell how the Assessor had calculated past or future economic loss and, accordingly, the certificate was invalid. Further, it submitted that the certificate was unreasonable in the sense in which the term was used by the High Court in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18. The specific bases for the challenge are extracted from the summons below.

In [5], [6] and [7] of the summons, the insurer relevantly identified the following matters with respect to the assessment for past and future economic loss:

The Assessor’s reasons reveal that he made his assessment based on the conference with the parties on 18 April 2017 as well as his consideration of the documents before him. He did so in the context of the task he was required to perform, which was relevantly to assess damages for past and future economic loss.

Before addressing the bases for the insurer’s challenges I propose to outline the relevant statutory provisions and summarise the general principles germane to this Court’s jurisdiction under s 69 of the Supreme Court Act as they have been applied in challenges to assessments under s 94, or like provisions.

This Court’s jurisdiction derives from s 69 of the Supreme Court Act, which relevantly provides:

This Court’s jurisdiction to set aside a decision under s 69 for error arises where there is an error of law on the face of the record (s 69(1) of the Supreme Court Act) or jurisdictional error: Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1.

The “record” for the purposes of establishing error of law on the face of the record includes the reasons attached by an assessor to a certificate issued under s 94. The authorities reveal two bases for the reasons being included as part of the record. The first basis is that the assessor is relevantly a “tribunal” within the meaning of s 69(3) of the Supreme Court Act and s 69(4) applies (as was assumed by the parties in Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13, as noted by Basten JA at [17]). The second basis is that the effect of the requirement in s 94 that the reasons be given and attached to the certificate is to make the reasons part of the record: Pham v NRMA Insurance Ltd [2014] NSWCA 22 at [27] (Leeming JA, Tobias AJA agreeing).

Chapter 4 of the Act makes provision for motor accident claims. Part 4.4 of the Act, which is contained in Ch 4, entitled “Claims Assessment and Resolution”, provides for medical assessments, claims assessments and also for the regulation of compulsory third party insurers. Section 94, which is contained in Part 4.4 relevantly provides:

As is evident from the highlighted portions of s 94, various statutory obligations are imposed on a claims assessor, including to make an assessment of damages being the amount of damages that a court would be likely to award, and to provide a statement of reasons for the assessment which is to be attached to the certificate.

Section 95 provides that, if a claimant accepts the assessment, the insurer is obliged to pay in accordance with the assessment. This obligation is subject to the insurer’s right to challenge the assessment by invoking this Court’s jurisdiction under s 69 of the Supreme Court Act. It is common ground that the claimant accepted the assessment in the present case.

Chapter 5 of the Act provides for awards of damages. Section 122(3), which is contained in Pt 5.1, provides that Ch 5 applies to assessments by claims assessors under Pt 4.4 in the same way as it applies to, and in respect of, an award of damages by a court.

Section 126 of the Act requires a court or assessor, if making an award of damages for future economic loss, to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.

Section 69(1) of the Act provides that SIRA may issue guidelines for or with respect to procedures for the assessment of claims under Part 4.4 and associated matters. SIRA has issued claims assessment guidelines effective 1 May 2014 (the Guidelines). Chapter 18 of the Guidelines provide as follows:

The distinction between error of law (whether or not on the face of the record) and jurisdictional error is not necessarily easy to draw: see the discussion in Kirk v Industrial Court of NSW at [66]-[70] and [78] to [90].

It is, however, well established that a determination of whether error on the face of the record has been shown is confined to an examination of the record itself: Craig v State of South Australia (1995) 184 CLR 163; [1995] HCA 58 at 180-181. However, evidence may be given of what was before the decision-maker if it is germane to the establishment of jurisdictional error: Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 at [15] (Basten JA, McColl and Macfarlan JJA agreeing).

Decision-makers who are not judges are entitled to some latitude in an evaluation of whether their reasons are sufficient and their reasons are not to be construed with an eye attuned to the detection of error: Minister for Immigration and Ethnic Affairs v Liang (1996) 185 CLR 259; [1996] HCA 6 at 271-272.

The authorities in this area are replete with formulations as to what is required of claims assessors when discharging their statutory obligation to give reasons for their assessments. For example, in Allianz Australia Insurance Ltd v Kerr, when addressing the reasons required when awarding a buffer for future economic loss, Basten JA said at [59]:

The High Court in Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 considered the obligation of a medical panel to give reasons as required by the Accident Compensation Act 1985 (Vic). The Court (French CJ, Crennan, Bell, Gageler and Keane JJ) said, of present relevance, at [55]:

This statement of principle has been found to be applicable to the reasons required to be given by a claims assessor by s 94(5) of the Act: Zahed v IAG Ltd (t/as NRMA Insurance) [2016] NSWCA 55 at [34] (Emmett AJA, Meagher and Leeming JJA agreeing). Apparent gaps in the reasons required by s 94(5) may be filled by necessary inference: Zahed v IAG Ltd (t/as NRMA Insurance) at [6] (Leeming JA)

The purpose of the requirement for reasons for assessments made under s 94 of the Act (specifically in the context of s 126) is to produce a reasonable level of transparency so that those interested in the assessment can see how it was performed: Allianz Australia Insurance Ltd v Sprod (2012) 81 NSWLR 626; [2012] NSWCA 281 at [42] (Barrett JA, Campbell JA and Sackville AJA agreeing).

In oral argument the plaintiff’s submissions were, largely, reduced to a complaint about the Assessor’s reasons. Mr Robinson SC, who appeared with Ms Gumbert for the insurer, submitted that the Assessor had failed to set out his path of reasoning for either past or future economic loss. He identified three alleged errors (which encompassed the matters from the summons set out above) as follows:

It is convenient to address the challenges to the assessment of past economic loss separately from those made to the assessment of future economic loss.

Mr Robinson submitted that, although the Assessor accepted the criticisms made by Mr Gaudion of the first report ([23] of the Assessor’s reasons), he nonetheless adopted the figure from Sch K of that report of $410,938 for past economic loss (to 31 August 2016) without explanation ([23] of the Assessor’s reasons). Mr Robinson submitted further that the Assessor used the figure of $1,893.72 for an additional net weekly calculation for the 36 weeks from 31 August 2016 for past economic loss without setting out the provenance of that figure or how it related to the claimant's actual past earnings. The insurer contended that it was denied procedural fairness by reason of the Assessor’s failure to give reasons (as required by s 94(5) of the Act and, in particular, by cl 18.4.3 of the Guidelines), which also constituted an error of law on the face of the record and a jurisdictional error. The insurer also argued that the decision was legally unreasonable.

Mr Deakin QC, who appeared with Mr Maxwell for the claimant, relied on the following passage, for the purposes of protecting the claimant’s position on appeal. In Repatriation Commission v O’Brien (1985) 155 CLR 422; [1985] HCA 10, Brennan J said at 445-446:

Mr Deakin submitted that this dictum had been cited with approval in Sherlock v Lloyd (2010) 27 VR 434; [2010] VSCA 122 in the context of a decision which concerned the reasons of a medical panel under the Accident Compensation Act 1985 (Vic) and should be applied in the present case to protect the reasons of the Assessor from judicial review.

The claimant also contended that the reasons were sufficient to comply with s 94(5) of the Act. Mr Deakin argued that the Assessor’s statement, “Having considered the contending forensic accountant's reports, I think that I should adopt the Furzer Crestani scenario 1 as my base line for calculation,” was sufficient to incorporate the reasoning of the experts into the Assessor’s reasons and that no more was required.

Mr Deakin submitted that it was open to the Assessor to accept the base figure of $410,938 on the basis of Scenario 1 in the first report since it was derived from a calculation of past economic loss which projected the claimant’s earnings and deducted his actual earnings during the period from the date of the accident on 1 July 2012 to the date specified in the first report of 31 August 2016. Mr Deakin submitted that it was plain from the Assessor’s reasons that he had divided the figure of $410,938 by 217, being the number of weeks between the date of the accident and 31 August 2016 to arrive at the figure of $1,893.72. This figure was then multiplied by 36 weeks, being the number of weeks between 31 August 2016 and the date of the assessment on 15 May 2017. Mr Deakin argued that it was sufficient that the Assessor rounded down the figure of $479,111.92 to $440,000. He submitted that it was necessarily implied by the preceding paragraphs that the rounding down was intended to give effect to the Assessor’s reservations about the two criticisms made by Mr Gaudion (referred to as (d) and (e)), which he considered to have some substance (see [23] of the Assessor’s reasons).

Section 94(2) of the Act obliged the Assessor to make an assessment of the amount of damages “having regard to such information as is conveniently available”. The Assessor noted (at [20] of his reasons) that the claimant claimed, for the interim period of 16 weeks, an amount of $2,135 per week (which I understand to be the average of Scenarios 1 and 2 divided by the number of weeks). I accept that it is apparent from the Assessor’s reasons that the discount from $479,111.92 to $440,000 was to take into account the criticisms of Mr Gaudion in (d) and (e). The mathematical calculation of the figure of $1,893.72 was also sufficiently clear to expose its provenance and the reasons for its adoption.

The reasons were, expressly and by necessary implication, sufficient to expose the Assessor’s path of reasoning for the award of past economic loss according to the standard expected of claims assessors. Although some degree of deduction (by necessary inference) was required, I consider that the reasons given for the calculation of past economic loss were sufficient to comply with the obligation in s 94(5) and cl 18.4.3 of the Guidelines and that neither error of law on the face of the record nor jurisdictional error has been established.

Mr Robinson submitted that there were three areas in respect of which the Assessor’s reasons were inadequate with respect to the assessment of future economic loss: the application of the discount of 91.84%; the choice of the weekly figure of $2,496.08; and the failure to explain how the award based on a weekly figure that was higher than for past economic loss could be reconciled with the finding in [25] that the claimant’s work (and therefore his income) would reduce in the years between 63 and 70.

Mr Deakin submitted that the reasons were sufficient because it was plain where the figures came from and how the calculations were performed. He contended that the figure of $2,496.08 was the figure calculated by Furzer Crestani in schedule M as being the actual loss of income per week projected into the future for the balance of the claimant’s expected working life based on Scenario 1. He submitted that the path of reasoning was clearly set out in the first report and that the Assessor made it clear that he was adopting that path of reasoning.

Mr Deakin explained the basis of the figures by reference to the first report. A summary of his explanation is set out below.

Mr Deakin accepted that the apparent disparity between the net weekly figure of $1,893.72 (which applied to past economic loss up to 15 May 2017) and the substantially higher net weekly figure of $2,496.08 (which applied to future loss from that date) was potentially anomalous and, indeed, erroneous, but it was readily explicable. He submitted that the figures for the past were averaged and took into account that the claimant’s actual income before tax. The claimant’s income for the financial year ended 30 June 2014 (as depicted in Sch K) was $234,803 and his net (after-tax) income for that year (as depicted in Sch K) was $152,073 was more in line with his pre-accident earnings than other post-accident years.

Mr Deakin contended that it was open to the Assessor to use average figures for the past to bring the calculations which ended on 31 August 2016 up to the date of the assessment (hence the figure of $1,893.72 to 15 May 2017). Mr Deakin submitted that it was also open to the Assessor to accept that the claimant had, in effect, minimal residual earning capacity from the date of the assessment and therefore use a higher weekly figure for the future (on the basis that there would be no, or few, actual earnings). Accordingly the weekly loss for the past was necessarily less than the weekly loss for the future (in which the claimant’s residual earning capacity was likely to be minimal). Mr Deakin submitted that it was open to the Assessor to conclude that the whole loss (of $2,496.08 per week) should be awarded for the future subject to the same discount which was applied to the figure for the past (see below), as well as the conventional discount of 15% for vicissitudes.

Mr Deakin argued that it was plain that the Assessor calculated the difference between $440,000 (the rounded down figure) and $479,111.92 (the figure in the table set out in [23] of the reasons) to arrive at a ratio of 91.84% and that this was the ratio applied to the amount for future loss in [27] of the Assessor’s reasons.

Mr Deakin submitted that the Act did not intend that an assessor’s reasons be subjected to the critical analysis contended for by Mr Robinson. He contended that even if I were satisfied that the disparity in the weekly figures revealed error (which he, in substance, conceded), the error was not one of law and therefore could not be corrected by this Court in the exercise of its jurisdiction under s 69 of the Supreme Court Act. He submitted that the insurer’s arguments were an attempt to seek merits review of an assessment which it regarded as too high.

Mr Deakin also submitted that the insurer’s remedy, if there be one, lay in s 95(6) of the Act. He argued that the insurer ought not to have invoked this Court’s jurisdiction under s 69 of the Supreme Court Act in circumstances where it had not approached the Principal Claims Assessor to correct the error.

The difficulty with the claimant’s principal argument is that, while one can follow it when one is directed to the details of the first report, the path of reasoning is not sufficiently apparent from the Assessor’s reasons. While I accept that it is possible to discern the provenance of the ratio of 91.84% applied in [27] of the reasons (by dividing the discounted figure for the past with the undiscounted figure for the past), the other matters raised by Mr Robinson have not been explained by the Assessor’s reasons.

The dividing line between past and future economic loss is determined by the date on which damages are assessed. This date is necessarily arbitrary. Assessments of past and future economic loss are not independent: see the discussion in The Nominal Defendant v Aychahawchar [2015] NSWCA 58 at [3]-[4] (Basten JA) and [18] (Adamson J, Gleeson JA agreeing). A claimant’s position at the date of assessment necessarily conditions the assessment of past and future economic loss. Although there is no provision equivalent to s 126 of the Act which requires assumptions as to the past hypothetical (what the claimant would have earned but for the accident) to be specified, the principle of coherence requires such assumptions to be made and, where there is a requirement for reasons to be given, that they be set out with sufficient clarity to expose the path of reasoning.

Thus, although it need not be the case that, if a mathematical approach is taken (by multiplying a weekly amount of net earnings by a multiplier), as opposed to the award of a buffer, the weekly amount up to the date of assessment will correspond with the weekly amount from the date of assessment, it will commonly transpire that they are. In the present case, the net weekly economic loss to 15 May 2017 was $1,893.72, whereas the net weekly economic loss from that date was $2,496.08, a difference in the order of $600 net. Had the Assessor given the explanation that Mr Deakin gave (which I have endeavoured to summarise above) this might, depending on how it was done, have exposed the actual path of reasoning sufficiently to comply with the statutory requirement for reasons. However, the Assessor did not give that, or any such explanation. Although resort can be had to the evidence beyond the record for the purposes of establishing jurisdictional error, reasons which are insufficient cannot be made sufficient by attempting to divine the Assessor’s reasoning process from working out how the result in the reasons could have been arrived at from the evidence.

The apparent disparity of $600 between the figure for the past and the figure for the future is aggravated by the finding in [25] on which Mr Robinson relied, that the claimant would have worked less in the remaining years of his working life until he reached the age of 70. It is difficult to reconcile the finding with the disparity. The reasons do not indicate either the basis for the disparity or how the finding as to the claimant’s likely future work patterns is to be reconciled with it. The discount of 15% for vicissitudes is standard, and therefore could not, without reasons to explain it, give rise to any necessary implication that it reflected the claimant’s assumed diminishing work between his age at assessment and his retirement at the age of 70. Mr Deakin’s suggestion that the assessor accepted the expert’s figure, which was higher for the future because it was predicated on minimal residual earning capacity, notwithstanding the likely diminution in the claimant’s working hours, is one possibility. However, the assessor was obliged to explain his reasons for making the assessment of future economic loss and was not entitled to leave the parties to guess what his reasoning process was.

I note that the insurer did not press the ground set out in [6](h) of the summons which is extracted and ruled through above. It was suggested by Mr Deakin that the insurer had, in effect, abandoned reliance on error as a result of non-compliance with s 126 of the Act. I consider that the submissions put by Mr Robinson fall within the ambit of the grounds in the summons that were maintained (which are extracted above). As I understood the insurer’s submission on this point, it was that the finding as to likely future earnings (that the claimant would work less and spend more time with his grandchildren) could not be reconciled with the figures used in the calculation, not that the finding was not made. I have noted by square brackets in [25] of the Assessor’s reasons that I consider the reference to s 136 to be a typographical error since I am persuaded by the context that the Assessor intended to refer to s 126, which in part requires the assumptions on which the award of future economic loss to be set out.

I reject Mr Deakin’s argument that the insurer was obliged to seek to correct the error in the Assessor’s reasons by approaching the Principal Claims Assessor as provided for in s 94(6). The “error” cannot reasonably be described as an “obvious error”. Indeed the error is, as I have found, in the deficiency in the reasons and cannot be corrected through s 94(6).

I note for completeness that I was referred to several authorities in which the sufficiency of reasons pursuant to s 94(5) was considered. It is neither necessary nor helpful to recite the facts of these cases or the basis for the decisions since each decision turns on its facts. However, the decision of the Court of Appeal in Zahed v IAG Ltd provides an example of a case where an assessor made a finding which, on proper analysis, was neither derived from the evidence nor adequately explained, which required the assessment to be set aside. The assessor in that case applied a figure of 6.76 hours a week of domestic assistance into the future when none of the medical practitioners provided support for that figure, although one had opined that 6.76 hours had been required for a limited past period but that assistance at that level was no longer required. Leeming JA posed the following question and answer at [7]-[8]:

The present case is not on all fours with Zahed v IAG Ltd because, as Mr Deakin’s explanation set out above shows, there was a basis in the evidence for the Assessor’s approach. However, as in Zahed v IAG Ltd, there was no explanation of matters that required explanation. In the present case, the Assessor’s reasons did not reveal the answer to the following question: What was the reasoning process which led the Assessor to calculate past economic loss on the basis of $1,893.72 per week and future earning capacity on the basis of $2,496.08 per week in circumstances where the Assessor found that the claimant would probably be gradually winding back his business and professional activities, as he grew older, and his financial need to work reduced, as the number of his grandchildren increased? The Assessor failed to disclose his reasoning process on the critical integer of $2,496.08 at all. It was not enough for the claimant merely to say in this Court that it was the figure put forward by the claimant’s expert in the first report: see also Allianz Australia Insurance Ltd v Habib [2015] NSWSC 1719 at [38]-[39] (Beech-Jones J). I do not accept that, by saying that he was adopting the baseline approach in the first report as the basis for the award of future economic loss, the Assessor ought be taken to have adopted the expert’s “path of reasoning” or that this was sufficient to discharge the Assessor’s obligation to give reasons for his assessment. The first report revealed how the amount was calculated on the assumptions on which it was based. However, its authors did not engage in a reasoning process such as was required of the Assessor. I reject Mr Deakin’s submission that the Assessor incorporated the first report by referring to it in his reasons or that, if he did so, it revealed any path of reasoning, as opposed to calculations based on assumptions.

It may be, as Mr Deakin submitted, that Parliament did not envisage, when it made provision in the Act for claims assessments to be undertaken by claims assessors rather than judges, that s 69 of the Supreme Court Act would be used with such apparent frequency to challenge such assessments. However, the requirement in s 94(5) that an assessor give reasons which are to be attached to the certificate makes the reasons (and therefore the reasoning process) amenable to judicial review. When its jurisdiction under s 69 of the Supreme Court Act is invoked in a case such as the present, this Court is obliged to determine whether a particular statutory authority (in this case, the Assessor) has failed to carry out his statutory function (in this case to give reasons which reveal his reasoning process): Insurance Australia Ltd (t/as NRMA Insurance) v Milton [2016] NSWCA 156 at [7] (Basten JA).

The distinction between a successful challenge to an assessment on the basis of the Assessor’s reasons on the one hand and merits review of an assessment of damages (such as may be undertaken by the Court of Appeal under s 75A of the Supreme Court Act on appeal from the assessment of damages under the Act by a judge) on the other, is fundamental. In the former case, the Court’s obligation is merely to determine whether an error of law on the face of the record, or jurisdictional error, has been established and, if so, to grant relief, if appropriate. Such relief will be confined to setting aside the certificate and remitting the assessment to be determined in accordance with law. In the latter case, the role of the Court of Appeal is, where error (whether of law, fact or discretion) is shown, to conduct the assessment itself.

I can deal briefly with Mr Deakin’s argument that this Court ought not intervene because what Brennan J said in Repatriation Commission v O’Brien had been cited with approval in Sherlock v Lloyd. As the argument was raised without notice to the insurer, it is not appropriate that I deal with it comprehensively, particularly as Mr Deakin accepted that the authorities by which I am bound in New South Wales required me not to accept it. However, I note that the Victorian Court of Appeal in Sherlock v Lloyd held, at [74], that, as there was no statutory obligation on the medical panel to provide reasons for its opinion, the medical panel’s failure to provide adequate reasons was not an error of law. The present case is plainly distinguishable from Sherlock v Lloyd as the Assessor was obliged, by s 94(5) of the Act and cl 18.4 of the Guidelines, to give reasons. In addition, the High Court in Wingfoot Australia Partners Pty Ltd v Kocak decided, by reference to wording that is similar to s 94 of the Act, that a medical panel appointed under the Accident Compensation Act 1985 (Vic) was obliged to give reasons and that, if they were inadequate, this would constitute an error of law. I note that Sherlock v Lloyd was considered in Wingfoot Australia Partners Pty Ltd v Kocak. The relevant provision in the Accident Compensation Act 1985 (Vic) had been amended after Sherlock v Lloyd and before Wingfoot Australia Partners Pty Ltd v Kocak to require the medical panel to give reasons (which makes it relevantly indistinguishable from s 94 of the Act): see the discussion of the amendment and the reasons for it in Wingfoot Australia Partners Pty Ltd v Kocak at [52]. The High Court held in [53] that:

I reject Mr Deakin’s argument that the Assessor’s failure to provide sufficient reasons was not an error of law as it is inconsistent with what the High Court said in Wingfoot Australia Partners Pty Ltd v Kocak at [53] and [55] in the passages highlighted in the extracts above.

The insurer has established error of law on the face of the record. In these circumstances it is not necessary to address the questions whether jurisdictional error has been established or the assessment was legally unreasonable in the sense considered in Minister for Immigration and Citizenship v Li. Neither party has raised any matter germane to the discretion whether to grant relief. Accordingly, I regard it as appropriate to grant relief, error on the face of the record having been established.

For the reasons set out above, I make the following orders: