AAI Limited t/as AAMI v Allianz Australia Insurance Limited

[2024] NSWPIC 1

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	AAI Limited t/as AAMI v Allianz Australia Insurance Limited [2024] NSWPIC 1
APPLICANT INSURER	AAI Limited t/as AAMI
RESPONDENT INSURER:	Allianz Australia Insurance Limited
SENIOR MEMBER:	Brett Williams
DATE OF DECISION:	8 January 2024
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; the applicant insurer sought a determination by the Commission that the respondent insurer is the relevant insurer for the purposes of section 3.2; where applicant insurer has accepted the claim for statutory benefits and has not denied the claim; whether the Commission has power to determine the dispute; AMN v Allianz Australia Insurance Limited and AAI Limited trading as GIO considered; Allianz Australia Insurance Limited v Insurance Australia Limited t/as NRMA Insurance followed; Held – section 3.3(2) is concerned with a dispute about which insurer will accept a claim; as the applicant insurer has accepted the claim there is no dispute about which insurer will accept the claim; the pre-condition to the exercise of the power does not exist; the power vested in the Commission by section 3.3(2) does not extend to determining which insurer is the relevant insurer for all purposes; there is no power to determine the dispute; proceedings dismissed; costs; section 8.3(4) gives the Commission the power to permit an Australian legal practitioner to be paid legal costs by their client; it does not empower the Commission to permit one party to a dispute to recover costs from another; recovery of costs by solicitors from insurer client permitted.

STATEMENT OF REASONS

BACKGROUND

1. These proceedings relate to a dispute between two insurers, AAI Limited t/as AAMI (AAMI) and Allianz Australia Insurance Limited (Allianz), about which of them should be paying statutory benefits to a claimant in accordance with the Motor Accident Injuries Act 2017 (MAI Act).

2. The claim for statutory benefits in question (claim) was made by Mr Habib (claimant), who suffered injury in a motor accident that occurred on 11 October 2022 (accident). AAMI is the insurer of the motor vehicle driven by the claimant. Allianz is the insurer of the other vehicle involved in the accident.

3. AAMI commenced these proceedings, by which it sought a determination by the Commission that Allianz is the relevant insurer for the purposes of s 3.2 of the MAI Act. The claimant is not a party to the proceedings. Simply put, AAMI’s case is that the accident was caused by the driver of the vehicle insured by Allianz, and that Allianz is the “relevant insurer” for the purposes of Part 3 of the MAI Act.

4. AAMI’s position is that the Commission’s power to determine the dispute is found in s 3.3(2) of the MAI Act, and that Sch 2 cl 3(c) of the MAI Act declares that a dispute about “which insurer is the insurer of the at-fault motor vehicle for the purposes of section 3.3” is a miscellaneous claims assessment matter for the purposes of Part 7 of the MAI Act.

5. In circumstances where AAMI has accepted liability for the claim, a preliminary issue arose as to whether the Commission has the power to determine the dispute that is the subject of the application made by AAMI (preliminary issue). The parties agreed that I should determine the preliminary issue before (if necessary) addressing the substantive dispute. At a preliminary conference held on 21 November 2023 I made directions for the provision of material in relation to the preliminary issue. I have subsequently been provided with, and considered:

   (a)    a statement of agreed facts relevant to the preliminary issue dated 6 December 2023;

   (b)    a joint bundle containing all documents relied on by the parties in relation to the preliminary issue;

   (c)    AAMI’s updated and consolidated submissions addressing the preliminary issue dated 6 December 2023, and

   (d)    Allianz’s updated and consolidated submissions addressing the preliminary issue dated 18 December 2023.

ON THE PAPERS

1. The parties agree that the preliminary issue can be determined on the papers. Having considered both s 52 of the Personal Injury Commission Act 2020 (PIC Act) and Procedural Direction PIC2, I have concluded that the preliminary issue can be determined on the papers. I am satisfied that sufficient information is available in connection with the preliminary issue to allow me to determine it without holding a formal hearing.

AGREED FACTS

1. The following facts have been agreed between the parties[1], and I find:

   [1] Statement of agreed facts dated 6 December 2023.

   (a)    The accident occurred at approximately 9.50am on 11 July 2022.

   (b)    The claimant completed an Application for Personal Injury Benefits dated 24 July 2022[2] and served it on Allianz.

   [2] The statement of agreed facts record that the Application for Personal Injury Benefits was completed on 27 July 2022. However, as the Application is dated 24 July 2022 I have assumed that this is a typographical error, and adopted 27 July 2022 in my findings.

   (c)    Allianz accepted liability to pay statutory benefits for up to 26 weeks on 29 August 2022.

   (d)    On 28 October 2022, Allianz denied liability to pay statutory benefits beyond 26 weeks but agreed to pay statutory benefits up to 9 January 2023.

   (e)    On 4 November 2022, Allianz requested a transfer of the claim to AAMI.

   (f)    On 14 December 2022, AAMI accepted transfer of the claim.

   (g)    On 19 February 2023, the claimant requested a review of Allianz’ “fault” decision.

   (h)    On 3 March 2023, AAMI conducted an internal review of the Allianz’ “fault” decision.

   (i)    On 13 March 2023, AAMI issued a notice identified as a “Liability notice – benefits after 26 weeks” accepting liability to pay statutory benefits after 26 weeks.

   (j)    On 4 June 2023, the claimant lodged a claim for common law damages.

   (k)    On 7 June 2023, AAMI denied liability for the claimant’s claim for common law damages.

   (l)    AAMI requested a transfer of the statutory benefits claim to Allianz on 23 June 2023.

2. The material in the joint bundle supports the findings I have made at [7].

SUBMISSIONS

AAMI’s submissions

1. In written submissions dated 6 December 2023, AAMI argued that:

   (a)    the Commission is empowered under Sch 2(3)(c) of the MAI Act to determine “which insurer is the insurer of the at-fault motor vehicle for the purposes of section3.3 (Determination of relevant insurer)”;

   (b)    on a proper application of the MAI Act, and having regard to its obligations under the Motor Accident Guidelines (MAGs), there was no legal basis for AAMI to not accept that a liability to pay statutory benefits to the claimant existed;

   (c)    having accepted that the claimant was not wholly or mostly at fault and suffered a non-threshold injury, AAMI in effect accepted that the vehicle insured by Allianz was “the motor vehicle the use or operation of which contributed most to causing the death or injury for which the statutory benefits are payable”;

   (d)    the Member in Allianz Australia Insurance Limited v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPIC 73 (Dogias[3]) did not address whether the Commission’s power exists to determine a relevant insurer dispute where an insurer changes its liability determination;

   [3]The parties have used the name of the claimant in those proceedings when referring to the decision. For consistency, and to avoid confusion, I have adopted the same approach.

   (e)    the Member in Dogias did not consider a construction of s 6.19(5) that would permit an insurer to make a lawful decision on the claimant’s entitlement to statutory benefits that also gave effect to the obligation imposed on insurers by cl 4.26 of the MAGs in circumstances where the issue of relevant insurer may be unresolved;

   (f)    the present claim may be distinguished from the claim in Dogias because the claimant continues to seek treatment and claims damages;

   (g)    AAMI’s position is not unlike the position in AMN v Allianz Australia Insurance Limited and AAI Limited trading as GIO (Claims Assessment) [2020] NSWSIRADRS 123 (AMN);

   (h)    The power to determine the relevant insurer exists because:

   ·the claimant continues to claim statutory benefits;

   ·the effect of a liability notice is not to bind an insurer to manage the claim but to promote the claimant’s recovery and access to statutory benefits;

   ·the effect of AAMI’s acceptance of a liability to the claimant to pay statutory benefits is consistent with AAMI’s position that Allianz is the relevant insurer, and

   ·s 6.19(5) permits an acceptance of liability that is subsequently denied in relation to the issue of relevant insurer, and

   (i)    if the Commission is not persuaded that the power to determine a relevant insurer dispute exists once an insurer has accepted a liability to pay statutory benefits, the Commission ought determine that Allianz is the relevant insurer based on its acceptance of a liability to pay statutory benefits up to 9 January 2023.

2. As to the submission recorded at 9(i), AAMI did not identify a source of power for the Commission to make the determination it seeks. I have not been able to identify such a power, and decline to make the determination sought.

3. It is also convenient to record at this juncture that in AMN the question of whether the Claims Assessor had the power to determine the dispute before him does not appear to have been raised by either party, in terms, and was not addressed by the Claims Assessor in his reasons; the power to do so appears, incorrectly in my view, to have been assumed. I do not consider that the decision in AMN assists AAMI’s position in these proceedings.

Allianz’s submissions

1. In written submissions dated 18 December 2023, Allianz argued that:

   (a)    the Commission’s power to determine a “relevant insurer dispute” is limited to circumstances where an insurer has not “accepted” the claim for statutory benefits;

   (b)    because AAMI has accepted the claim, and continues to admit liability for the claim, there is no dispute to be determined;

   (c)    the reasoning in Dogias is relevant to the issues that arise in these proceedings, and supports its submission that the Commission does not have power to determine AAMI’s application, and

   (d)    so long as AAMI maintains its acceptance of liability for the claim, there is no dispute and no power to determine the issue being agitated by AAMI in these proceedings.

2. Allianz submits that the proceedings ought to be dismissed because there is no dispute about which insurer will accept the claimant’s application for statutory benefits. There is, it is argued, no power to determine which insurer is the relevant insurer for any other purpose under Part 3 of the MAI Act.

3. Allianz also argues that, in circumstances where the Commission accepts it has jurisdiction to determine the dispute, AAMI are estopped by their conduct from seeking a determination that Allianz is the relevant insurer. Allianz’s submissions in this regard do not refer to any authorities. As will be seen, Allianz’s estoppel submission is not triggered. However, if it were still in play, in the absence of submissions that addressed both relevant authorities, and the application of those authorities to the facts and circumstances that arise in these proceedings, I would have rejected the submission.

DETERMINATION

1. The question to be addressed as a preliminary issue is whether the Commission has power to determine a “relevant insurer issue” where one insurer has accepted liability to pay a claim for statutory benefits. The issue primarily turns on the scope of the power found in s 3.3(2) of the MAI Act.

2. Part 3 of the MAI Act deals with statutory benefits. Division 3.1, in which s 3.3 is found, contains the gateway provision with respect to an entitlement to statutory benefits (s 3.1). Section 3.2(1) states that statutory benefits payable under Part 3 are payable by the relevant insurer. The relevant insurer is determined in accordance with s 3.2(2). Under s 3.2(8) the Nominal Defendant or other insurer who pays statutory benefits under Part 3 of the MAI Act is entitled to recover the amount of statutory benefits properly paid from the relevant insurer liable to make those payments, along with the costs associated with handling the statutory benefits claim.

3. Section 3.3 of the MAI Act is relied on by AAMI to found its application. That provision is in the following terms:

   “3.3   Determination of relevant insurer

   (1)     Insurers may enter into arrangements approved by the Authority for the determination of which insurer will accept a claim for statutory benefits and be the relevant insurer in respect of the claim.

   (2)     If there is a dispute about which insurer will accept a claim for statutory benefits or any delay in determining the insurer who will accept a claim, the Commission may determine which insurer is the relevant insurer in respect of the claim and its determination is binding on the insurers for the purposes of this Part.

   Note—

   See also section 3.44 (Statutory benefits determinations relating to fault etc not binding in relation to common law claims).”

4. In Dogias, Member Cassidy considered the scope of the Commission’s power under s 3.3(2), and determined as follows at [54]-[55]:

   “[54]  While s 3.2(8) permits an insurer ‘to recover the amount of statutory benefits properly paid [by it] from the relevant insurer liable to make those payments’, there is no power given to the Commission to determine a dispute about recovery in that section, Schedule 2 or elsewhere in the MAI Act. The power of the Commission in s 3.3(2) does not, in my view, extend to determining which insurer is the relevant insurer for all purposes under the Act, including for the purpose of determining whether one insurer can recover benefits paid by it from another insurer.

   [55]   The power of the Commission in s 3.3(2) is, in my view, limited to determining a dispute between insurers for the limited purpose of deciding which insurer will accept a claim for statutory benefits.”

5. While the decision in Dogias does not bind me, I agree with Member Cassidy’s reasons, as recorded at [18]. Section 3.3(2) is concerned with a dispute about which insurer will accept a claim. In this case, AAMI has accepted the claim. In this regard, I have found (and the parties have agreed) that on 13 March 2023 AAMI issued a notice identified as a “Liability notice – benefits after 26 weeks” accepting liability to pay statutory benefits after 26 weeks. Liability for the claim has not subsequently been denied by AAMI. I do not consider that any of the other facts I have found alter this position. That being the case, there is no dispute about which insurer will accept the claim, and the pre-condition to the exercise of the power in       s 3.3(2) does not exist.

6. I reject AAMI’s submission that the present claim may be distinguished from that in Dogias because the claimant continues to seek treatment and has claimed damages. It is not apparent to me how those matters are relevant to the scope of the Commission’s power found in s 3.3(2).

7. In my view, s 3.3(2) is not couched in terms that support AAMI’s submission that the Commission can determine a dispute between insurers about which is the “relevant insurer” after the claim has been accepted. Further, Sch 2 cl3(c) does not expand the powers of the Commission beyond the power explicitly found in s 3.3(2); it simply declares a dispute that falls within the terms of s 3.3(2) to be a miscellaneous claims assessment matter for the purposes of Part 7 of the MAI Act.

8. As the Commission does not have jurisdiction to determine the dispute with respect to which the application relates the proceedings are dismissed under s 54 of the PIC Act.

COSTS

1. Allianz’s submissions record that it “seek[s] costs of the application pursuant to s 8.3(4) of the Act”.

2. On the basis that the Motor Accident Regulation 2017 does not declare a s 3.3(2) dispute to be a regulated miscellaneous claims assessment matter, AAMI submits that no costs can be awarded to either insurer.

3. Section 8.3(4) states that an Australian legal practitioner is not entitled to be paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits (whether the claimant or the insurer) in connection with the claim unless payment of those legal costs is permitted by the regulations or the Commission. The provision gives the Commission the power to permit an Australian legal practitioner to be paid legal costs by their client; it does not empower the Commission to permit one party to a dispute to recover costs from another. That being the case, there is no power to make an order that AAMI pay Allianz’s legal costs of the application.

4. However, given the nature of the matters that arose in the proceedings, including the preliminary issue, I am satisfied that it is appropriate to permit Allianz’s solicitors to recover from Allianz their reasonable and necessary costs in connection with the proceedings.