IAG Limited t/as NRMA Insurance v McBlane

1. [1]

   The plaintiff is a compulsory third party liability insurer under the Motor Accidents Compensation Act 1999 (NSW) (“the Act”). It seeks judicial review of a decision of a claims assessor of the State Insurance Regulatory Authority of NSW (“SIRA”) dated 23 April 2019.

2. [2]

   The decision in question is titled “Reasons for Decision – General Assessment” (“the Reasons”) and is stated to be issued in accordance with s 94(5) of the Act. It assesses damages under specific heads of damage said to have arisen from injuries said to have been sustained by the first defendant, Ms McBlane (“the claimant”), in a motor accident on 21 October 2015.

3. [3]

   Liability for damages was admitted but, as stated in paragraph [2] of the Reasons, “the insurer disputes the damages sought by the claimant”.

4. [4]

   Ultimately an award of damages was assessed in the sum of $160,326.65. One component of that award was a “buffer” of $85,000 for loss of future earning capacity inclusive of loss of superannuation.

5. [5]

   In the Summons filed on 22 July 2019 the plaintiff seeks:

   1. (1)

      An order in the nature of certiorari, or a declaration, setting aside or declaring invalid the decision of the claims assessor;

   2. (2)

      An order in the nature of prohibition or an injunction preventing the defendants or any of their agents or officers from taking any active step in reliance on the decision; and

   3. (3)

      An order in the nature of mandamus remitting the matter to the second defendant for determination by a different claims assessor according to law.

6. [6]

   There is also a supplementary order sought by way of interim order or stay, preventing the defendants from taking any step or further step in reliance upon the assessor’s decision, however in oral submissions this order was not pressed given the negotiated understanding between the parties pending determination of these proceedings. In the circumstances there is no need to make interim orders, and I will simply proceed to final judgment and orders.

7. [7]

   The plaintiff asserts three distinct errors, said to be jurisdictional errors, and/or errors of law on the face of the record, or constructive failure to exercise statutory power or jurisdiction. The errors asserted are:

   1. (1)

      The assessor failed to make findings and/or to give reasons as to what injuries he found were caused by the accident, that were then said to give rise to the losses that were assessed by the claims assessor. The making of findings and the giving of reasons was part of the claims assessor’s duty and statutory function as a claims assessor. Giving reasons as to findings on material questions of fact are also specifically required by clause 18.4 of the SIRA Claims Assessment Guidelines (“the Guidelines”), guidelines which were made pursuant to ss 69(1) and 106 of the Act;

   2. (2)

      In making his decision about future economic loss, the claims assessor erred in law in that he:

   3. (3)

      The decision was vitiated by legal unreasonableness – Minister for Immigration v Li (2013) 249 CLR 332; [2013] HCA 18 – in that:

8. [8]

   The claimant, was almost 32 years old at the time of the accident and is now almost 36 years old. She opposes the relief sought.

Evidence and background matters

1. [9]

   An affidavit of Matthew Robert Barter, sworn 30 August 2019, was tendered. That document annexed the Assessor’s Certificate and Reasons for Decision, a report and assessment of Dr Maniam, orthopaedic surgeon, dated 1 September 2016, a statement of the claimant signed 27 September 2018, and the claimant’s written submissions to the assessor contending for a total of $493,950 under the following specific heads of damage:

2. [10]

   Annexed also to Mr Barter’s affidavit was a report of Dr Tim Anderson, Occupational and Environmental Medicine Physician dated 29 October 2018, and the insurer’s submissions which contended for damages limited to a total sum of $871.90 comprising $200 for past economic loss and $671.90 for past medical expenses and that there should be no award at all for future economic loss, lost superannuation, future out of pockets or past or future domestic care and assistance.

3. [11]

   I accept the submissions of senior counsel for the plaintiff Mr Robinson SC, that there is no conclusion that can be reached from this material other than that there was significant issue joined between the claimant and the plaintiff insurer as to her entitlement to any awards of damages other than the specified very small amounts for past out-of-pocket expenses and past economic loss.

4. [12]

   This provides critical context to my evaluation of the summons for judicial review.

5. [13]

   It was the position of the plaintiff that against a background of obvious controversy between the parties as to whether there was any entitlement at all to damages for loss of future earning capacity and the other contested heads, the Assessor’s Reasons were bereft of necessary findings and the s 126 duties were not fulfilled. Section 94(5), whilst requiring a “brief statement” setting out the assessor’s reasons for the assessment, still requires reasoning and key findings to be articulated, but they were not.

6. [14]

   The defendant’s position was that the reasons were imperfect, but the necessary findings could be “sticky-taped” together to qualify as sufficient.

Statutory context

1. [15]

   Consideration of the operation and interrelationship of the provisions of the Act and the Guidelines as outlined by senior counsel for the plaintiff, is illustrative of what was required of the Assessor.

2. [16]

   The most relevant provisions to the controversy here are s 94 “Assessment of claims” and s 126, “Future economic loss - claimant’s prospects and adjustments”.

3. [17]

   Section 94 provides:

4. [18]

   Section 126 provides:

5. [19]

   Much focus was placed in oral submissions on what was required by s 94(5), and how the cases that have addressed it assist in setting the relevant standard for comparison.

6. [20]

   Section 95(2) provides that the assessment is binding on the insurer. Section 99 provides that the authority may appoint a claims assessor who is, in the opinion of the authority, suitably qualified to be a claim assessor. Section 106(1) headed “Motor Accidents Monitoring and Oversight” provides that claims assessments under this Part are subject to relevant provisions of the Motor Accidents Claims Assessment Guidelines which apply pursuant to s 69(1) of the Act.

7. [21]

   Section 122(1) provides that Chapter 5 applies to and in respect of an award of damages which relates to the death of or injury to a person, caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle and ss (3) provides that the Chapter applies to and in respect of the assessment of damages by a claims assessor under Part 4.4 in the same way as it applies to and in respect of an award of damages by a court.

8. [22]

   Section 123(1) provides that a court cannot award damages to a person in respect of a motor accident contrary to this Chapter. Part 5.2 headed “Damages for Economic Loss” makes specific provision for the way in which that head of damage must be approached in assessments.

9. [23]

   Clause 1.14 of the Guidelines sets out the Objects of CARS. Clause 1.13 provides that the objects should be used as an aid to the interpretation of the guidelines:

10. [24]

    The objects of the Act are set out as follows:

11. [25]

    Clause 18 headed “Certificate and Statement of Reasons” provides:

12. [26]

    There was some debate as to whether Guideline 18.4 modifies the requirements set out in s 94(5) of the Act.

13. [27]

    It seems to me to be self-evident that findings on material questions of fact, mention of the applicable law and an articulation of the reasoning processes that led to the conclusions reached would clearly be essential matters to comprise a brief statement of reasons as required by 94(5). The description does not entail any element that would cause the reasons to be anything other than brief. As observed by Leeming JA in Zahed v IAG Limited trading as NRMA Insurance and Ors (2016) 75 MVR 1:

Principles

1. [28]

   It is instructive to extract the salient parts of the judgment of Leeming JA in Zahed as it articulates with clarity the area for debate between counsel in the circumstances that have arisen in this case:

2. [29]

   Turning to the issue of s 126 and the inadequacy of reasons I note that in Allianz Australia Limited v Kerr (2012) 83 NSWLR 302 at [31] per Basten JA, in a case where the requirements of s 126 were addressed specifically, his Honour made reference to Nominal Defendant v Livaja [2011] NSWCA 121, where the court said at [41]:

3. [30]

   A distinction should be made in cases that deal with detailed calculation of future economic loss as opposed to “buffer” cases: Allianz Australia Insurance Limited v Sprod [2012] NSWCA 281 at [30] to [33] per Barrett JA:

4. [31]

   Of guidance also is the decision of Fagan J in IAG Limited v Priestly [2019] NSWSC 1185 where his Honour was critical of the failure of the assessor to make necessary determinations to understand the “buffer” awarded for future loss of earnings:

Consideration - fundamental inadequacy of the Reasons

1. [32]

   Against that background, the Assessor has noted in paragraph 2 of his introduction that the insurer “disputes the damages sought by the claimant”. Clearly he appreciated the ambit of the dispute.

2. [33]

   Under the heading “additional material provided at the assessment conference”, focus is placed on the effect of the questioning of the claimant conducted at that conference.

3. [34]

   Paragraphs 5 to 17 of the Reasons provide background clarification regarding entries in medical records that refer to pre-existing neck and back symptoms. There was also reference to evidence regarding the claimant’s sitting capacity associated with her loss of earning capacity claim, symptoms that were recorded by treaters as present prior to the motor accident and the effect of those on her capacity to do overtime, as well as questioning regarding a knee injury she suffered in 2017, and why she ceased seeing her physiotherapist.

4. [35]

   Paragraphs 18 to 27 of the Reasons cover the effect of the cross-examination and indicate that a significant challenge was made to the complainant’s veracity and her failure to tell various assessing doctors about previous neck and low back pain, as well is issues regarding work and overtime, wage loss and the true nature and extent of asserted domestic assistance needs.

5. [36]

   In paragraph 31 of the Reasons, the assessor makes positive credibility findings regarding the claimant’s “determined nature”, finding that she is an “impressive and honest” person. He accepts that her failure to recall certain things was “due to a lapse of memory, rather than any attempt to promote her claim.”

6. [37]

   Nowhere in any of this material is there anything that resembles a finding by the assessor as to what parts of the body of the complainant the assessor has accepted are impaired, let alone the nature and extent of the impairment.

7. [38]

   The assessor then goes on to carry out the task of assessment of damages, still having not made any finding about impairment or identifying what parts of the claimant’s body are impaired. The assessment of damages includes vague references that are insufficient to overcome this problem such as: “there is no doubt that the claimant’s attempt at house work and her current employment at Wests continue to aggravate her neck and back and shoulder problems from the accident” [47] and, when dealing with the issue of past domestic assistance, “given the nature of the claimant’s injuries…”, again without any specification of what the assessor has concluded those injuries are.

8. [39]

   The Reasons are fatally inadequate. Senior counsel for the defendant’s valiant attempts to “sticky-tape” together sufficient findings, only served to highlight the inadequacy of the Reasons.

9. [40]

   There are additional failures in the way the claim for future loss of earning capacity was dealt with, however on the basis I have already identified, I am satisfied that the orders sought by the plaintiff should be made on the basis of the first ground of the summons. The assessor’s decision must be set aside, and the matter returned to the second defendant for determination by a different claims assessor, according to law.

   1. (1)

      The decision of Assessor Robert Foggo dated 23 April 2019 is set aside.

   2. (2)

      The matter is remitted to the second defendant for determination by a different claims assessor according to law.

   3. (3)

      The first defendant is to pay the plaintiff’s costs.