Allianz Australia Insurance Limited v Smith

Case •

[2023] NSWPIC 293

•

16 May 2023
CERTIFICATE OF DETERMINATION OF MEMBER 
CITATION: Allianz Australia Insurance Limited v Smith [2023] NSWPIC 293
CLAIMANT: Ricky Smith
INSURER: Allianz Australia Insurance Limited
MEMBER: Terence O'Riain
DATE OF RECOMMENDATION: 16 May 2023
CATCHWORDS: MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); section 128 of the Evidence Act; insurer’s application for discretionary exemption from assessment under section 7.34(1)(b) of the MAI Act; preliminary assessment of claim; material witness outside New South Wales; Personal Injury Commission cannot compel witnesses to attend; court can compel witnesses to attend; Held – a court hearing is more likely to result in the just, quick, and cost-effective resolution of the real issues in dispute between the parties; the claim is not suitable for assessment; recommendation to exempt the claim.

RECOMMENDATIONS – CLAIM NOT SUITABLE FOR ASSESSMENT

Motor Accidents Injuries Act 2017 (MAI Act)

INTRODUCTION

  1. Mr Ricky Smith (the claimant) was involved in a motor accident on 7 July 2018.

  2. The circumstances of the accident can be briefly stated as follows:

    ·     The rear-end collision occurred at approximately 1.30pm on Saturday, 7 July 2018 at 306 Pacific Highway, Lindfield in the state of New South Wales, 2070.

    ·     The accident involves at least three vehicles, driven by the claimant, Gabrielle Gould (Allianz insured) and Payman Tajalli (NRMA insured). These were a motorcycle and two cars respectively.

    ·     Two independent bystanders, Vincent Watt and Vincent Zangari witnessed the accident.

  3. Application M10431912/21 against IAG Ltd t/as NRMA Insurance was lodged with the Personal Injury Commission on 6 July 2021. 

  4. That insurer’s reply to the claimant’s application was lodged on 27 July 2021.

  5. That insurer initially submitted the matter was not ready for assessment on the basis whole person impairment had not yet been determined and the insurer sought outstanding material. Permanent impairment is now resolved.

  6. Before 23 July 2021, NRMA’s position was that the Claimant was not mostly at fault in the accident.  On 23 July 2021, NRMA issued a liability decision in which it denied liability for the claim for damages and alleged for the first time that the claimant was wholly at fault.

  7. Furthermore, in light of NRMA’s denial of liability, a claim for damages was lodged with Allianz Australia Insurance Limited (Allianz), the insurer of the third vehicle and applicant in this matter, on 25 May 2022.  Allianz has also denied liability for breach of duty of care.

  8. The claimant commenced application M10537076/22 to assess damages against Allianz.

  9. Both damages assessment must be heard together as both claims arise out of the same accident and there are common issues as to liability and damages. 

  10. The claimant sought a report from a road traffic engineer, which both insurers object to. 

  11. Both insurers seek exemption from assessment. NRMA's application seeking exemption was made as submissions in proceedings M10431912/21, while Allianz filed this separate application in respect of M10537076/22.

  12. A teleconference was held on 16 May 2023 before me. Eva Magyar of Masselos & Co appeared for the claimant. Tanya Smart of Hall & Wilcox appeared for NRMA and Katherine Toshack of McInnes Wilson appeared for Allianz.

  13. This decision will deal with both applications for exemption seeking discretionary exemptions from assessment under s 7.34 of the MAI Act and refer to rule 99(3)(a) (b) and (c) of the Personal Injury Commission Rules 2021 (the Rules), which the claimant opposes.

  14. It is a matter for me to make a preliminary assessment of the claim to make a recommendation to the President whether the claim is not suitable for assessment under this Division.

  15. I am required in the exercise of my discretion, in the light of the insurers’ allegations, to decide whether these matters are not suitable for assessment and should be exempt, subject to the approval of the Motor Accident Division head. [1]

    [1] Insurance Australia Limited t/as NRMA Insurance v Banos [2013] NSWSC 1519

  16. Rule 99 provides that in determining whether a claim is not suitable for assessment, the Commission must consider the objects of the Personal Injury Commission Act 2020 (PIC Act) and the circumstances of the claim. The Commission is to consider:

    (a)    whether the claim involves complex legal or factual issues, or complex issues in the assessment of the amount of the claim;

    (b)    whether the claim involves issues of liability, including contributory negligence, fault or causation;

    (c)    whether a claimant or witness, considered by the Commission to be a material witness, resides outside the State;

    (d)    whether a claimant or Insurer seeks to proceed against one or more non-CTP parties, and

    (e)    whether the insurer alleges that a person has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident giving rise to the claim.

Submissions

NRMA's submissions

  1. NRMA submits that the matter ought to be exempt from assessment for the following reasons:

Rule 99(a) and Rule 99(b)

  1. NRMA submits this is a claim which involves complex factual issues, as well as issues of liability, including contributory negligence, fault or causation.

  2. The accident involves at least three vehicles.  

  3. On 24 October 2022, the Commission directed that both Commission proceedings be listed and assessed together.  The claimant relies upon the report of Mr Grant Johnston dated 5 July 2022 (A7) in support of its allegations of liability against Mr Tajalli.  

  4. In order to determine liability in this matter, it will be necessary to hear evidence from the claimant, Mr Tajalli, Ms Gould, Mr Watt and Mr Zangari. 

  5. As non-parties to the proceedings, Mr Tajalli, Ms Gould, Mr Watt and Mr Zangari cannot be compelled to attend to give evidence.  Both NRMA and Allianz are therefore reliant upon the continued cooperation and agreement of those individuals to attend to give evidence. 

  6. Although Mr Tajalli and Ms Gould are the relevant insured drivers, they are not deemed parties and hence cannot be summoned to appear at Commission proceedings.[2]

    [2] Condon v Bartley; Hayes v RACQ Insurance Limited; Smith v Allianz Australia Insurance Ltd; Ward v QBE Insurance (Australia) Ltd; Hackett v Allianz Australia Insurance Ltd [2022] NSWDC 282 [61-63] regarding Personal Injury Commission Act 2017: s51 Summons to appear at conference or hearing

  7. Thus far, Mr Tajalli, Ms Gould, Mr Watt and Mr Zangari have all provided written statements (A9, A10, A11 and A12). 

  8. You will see from the AHC Factual Investigation Report of 17 September 2021 (A13) that Mr Tajalli informed them that he was not willing to cooperate further with the investigation. He must therefore be compelled to give evidence which cannot occur if proceedings remain before the Commission. 

  9. As detailed in the AHC Factual Investigation Reports of 21 May 2021 and 17 September 2021 (A9 and A13), Ms Gould was unwilling to cooperate with AHC’s enquiries (made on behalf of NRMA) and was not prepared to participate in their investigation in any way, and was implicitly therefore, not prepared to assist NRMA in its investigations.  

  10. NRMA acknowledges that both AHC reports mentioned above pre-dated the lodgement of the claim against Allianz and subsequent instruction of their legal representatives.  Even though Ms Gould has since provided a statement to Allianz's legal representatives in relation to this matter, that does not change the fact that the insurers cannot compel Ms Gould to give evidence if proceedings remain before the Commission.

  11. The Insurer submits that liability cannot fairly be determined without the evidence (and cross-examination) of non-parties and it will need to compel at least two of those non-parties to attend, which it cannot do while proceedings are before the Commission.  

Rule 99(c) PIC Rules

  1. The Claimant resides outside of the State of NSW. 

  2. In correspondence dated 14 February 2023 (A14 and A15), the Claimant’s solicitor confirmed his current address as 103 Drouin Crescent, BURRUM RIVER QLD 4659.

Allianz’s submissions

  1. The insurer submits the matter is not suitable for assessment and a certificate of exemption should be issued on the basis:

    (a)    The matter is sufficiently complex to warrant an exemption in accordance with 99(3)(1) of the Rules;

    (b)    In order to adequately defend this claim it is necessary to hear evidence from the insured drivers and independent witnesses, noting the Commission only has the power to compel parties to the proceedings;

    (c)    An assessment conference at the Commission is not an appropriate forum for the questioning or cross examination of experts or lay witnesses under oath, particularly where there are inconsistent statements that need to be reconciled;

    (d)    The claimant’s expert report is inadmissible; and

    (e)    The claimant resides outside the state of New South Wales. In particular the insurer seeks exemption because the case is complex due to issues, which the insurer attributes to the claimant’s conduct after accident.

  2. Allianz and NRMA each deny liability on the basis the claimant was at fault for the subject accident (A3 and A6).

  3. Both insured drivers and witnesses have provided written statements, however there are numerous inconsistencies as to how the accident occurred and who is at fault (A8, A9, A10, A11 and A12).

  4. Therefore, in order to determine the issues relating to the facts and liability, it will be necessary to hear evidence from the claimant, insured drivers, and independent witnesses. However, as non–parties to the proceedings, Ms Gould, Mr Tajalli, Mr Watt and Mr Zangari are unable to be compelled to give evidence if the matter remains before PIC.

  5. Additionally, the claimant relies upon expert liability report of Grant Johnston.  Allianz objects to the admission of that evidence in PIC proceedings and will object to it in any future Court proceedings.  Allianz submits Grant Johnston does not apply any scientific expertise to preferring one witness’ version over another.

  6. Allianz submits the question of liability can only be determined by resolving the inconsistencies between the accounts and that exercise should be undertaken at a trial by a judge who has the opportunity to assess their reliability on oral presentation [Nominal Defendant v Ismail [2014] NSWCA 432], rather than Commission, where there is no transcript (although recorded, this does not provide Member or the parties with a typed version); where witnesses cannot be compelled to give evidence; and where ultimately, both insurers have denied liability, so the exercise may proceed to Court in any event.

  7. Allianz submits the likely length of hearing will be days, with an outcome not binding on the parties.

Claimant’s submissions

  1. These submissions respond to the Allianz submissions. The claimant opposes both insurer’s applications for exemption.

  2. The claimant hereby requests for the matters to remain in the Commission to be determined by the allocated Member, Member O’Riain and proceed to an assessment hearing at the Commission.

  3. Division 4 Clause 14 sets out the kind of claims, which are exempt from assessment (section 7.34 (1) (a)).

  4. The present claims do not involve any circumstances, which give rise to mandatory exemption present pursuant to the Motor Accident Compensation Regulation 2017 (the Regulation). The claims are not of a kind specified in the regulations as a claim that is exempt from assessment pursuant to section 7.34 (1) (a) of the MAI Act 2017.

  5. Accordingly, there is no reason to exempt the present claim pursuant to section 7.34(1)(a) of the MAI Act or Division 4 of the Regulation.

  6. The insurers submit that the matter is unsuitable for assessment should be exempt pursuant to section 7.34(1)(b) MAI Act.

  7. The insurers also rely on rule 99(3) PIC Rules setting out the circumstances in which a claim may be found unsuitable for assessment at the Personal Injury Commission.

  8. The circumstances set out in Rule 99(3) are not met.

Issues of Complexity and Liability

  1. There is no sufficient complexity to warrant granting of a discretionary exemption.

  2. While the subject motor vehicle accident relates to the collision of three vehicles, it is not unusual for such assessment to be before the Commission. Members assess relevant facts, liability and contributory negligence, fault and causation as required in their role and in actual fact, the Commission is the forum where such issues should be determined.

Evidence at the Commission: issue of compellability

  1. The Commission is able to compel Mr Tajali and Ms Gould to give evidence at the assessment hearing as they are defendants and can hear their evidence. While the insurer submits that there are significant complexities, based on the written statements of the Claimant and Ms Gould and the two independent witnesses, it is clear that Mr Tajali pulled out into the flow of traffic. Therefore, liability, causation and contributory negligence issues quite narrow, rather than sufficiently complex, as indicated by the insurer and the matters are therefore suitable to be determined by the PIC.

Claimant’s Liability Evidence

  1. Whether the Claimant’s liability report is admissible, is a matter for the Commission. This is not a circumstance, which would give rise to discretionary exemption.

Residence of Material Witness Outside New South Wales

  1. The claimant is able to and will travel to Sydney for a hearing at the Commission. Recent caselaw, such as Ward v QBE Insurance (Australia) Ltd NSWDC 2022[3] indicates that matters where the claimant resides in another state should be dealt with by the Commission.

    [3] above

  2. The claims are suitable for assessment in light of the matters referred to above and the matters should not be exempted under section 7.34 (1) (b) of the MAI Act.

  3. Section 7.34(1)(b) of the MAI Act provides that a claim is exempt from assessment if a Member has made a preliminary determination of the claim and has determined, with the approval of the President, that the claim is not suitable for assessment. Rule 99(3) sets out circumstances in which a claim may be found unsuitable for assessment. There has been no indication by the Member that the matter should be exempt.

  4. Any further application to exempt the matters should be dismissed as there are no circumstances present which would give rise to either mandatory or discretionary exemption pursuant to the MAI Act or the PIC Rules, and in the claimant’s submission the Commission should determine the matter at an assessment hearing.

  5. The NRMA in matter number M104311912/21 made a similar application, which was not accepted by the Commission, accordingly, in our submission, given the similarities of the present application and the determination of the PIC in relation to the application for exemption of NRMA Insurance, this application should be rejected and the matter is to proceed to an assessment hearing at the Commission.

REASONS

LEGISLATIVE CONTEXT

  1. The following important differences should be noted between an assessment in the Commission and a court hearing particularly when evidence as to credit or the reliability of a witnesses evidence is concerned:

    ·        The Commission’s Assessment Conferences, unlike court hearings, are not open to the public.

    ·        Assessments are informal whereas court hearings are more formal.

    ·        A judge has certain authority and the power to enforce any orders. Commission Member are members of a dispute resolution tribunal. Members are legal practitioners who are appointed for their expertise in motor accident legislation.

    ·        A court can issue subpoenas to third parties to attend court or produced documents. The Commission’s Motor Accident Division cannot compel third parties to attend assessments.

    ·        A judge can require answers to be given under oath or affirmation and can compel answers to questions against the wishes of witnesses. judges can punish by making findings of contempt of court or abuse of process. Commission Members can draw inferences and can dismiss applications to assess damages for failure to provide requested documentation or information.

    ·        Witnesses in court can be cross-examined at length and as of right whereas cross examination in the Commission is permitted at the Member’s discretion, although this is rarely withheld.

    ·        Court proceedings are binding, whereas s 7.38 of the MAI Act confirms that Commission assessments are not binding on the parties.

  2. When making a preliminary assessment, I am required to take into account all of the circumstances of the claim at the time of my consideration of the matter and, in particular, all the matters listed at sub-clauses rule 99 (a), (b) and (c) PIC Rules are the relevant clauses. As both parties have submitted the test is whether the claim is not suitable for assessment.[4]

    [4] AAI Ltd v Feng [2019] NSWSC 535 at [59].

  3. As well as the rules I need to take into account the objects of the MAI Act set out in s 1.3, relevant case law and my own experience.

  4. In this case sub-ss 1.3 (2)(g) and s1.3(3)(a) are particularly relevant to my consideration.

    “s1.3….

    (2)     For that purpose, the objects of this Act are as follows--….

    (g) to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes….

    (3)     It must be acknowledged in the application and administration of this Act--

    (a) that participants in the third-party insurance scheme have shared and integrated roles with the overall aim of benefiting all members of the motoring public by keeping the overall costs of the scheme within reasonable bounds so as to keep premiums affordable and of promoting the recovery and return to work or other activities of those injured in motor accidents…”

  5. In Insurance Australia Limited t/as NRMA Insurance v MAA, McCosker & Ors [2016] NSWSC 1439, Justice Hulme summarised the task for a Claims Assessor as follows:

    “The question for the assessor was a relative straightforward one. Was the claim not suitable for assessment under the MAC Act. The question had to be considered in the context of all matters relevant to the claim, particularly the issues between the parties and the appropriateness and efficacy of assessment as opposed to court determination. The exercise of the Assessor’s discretionary judgment was confined by the subject matter considered in conjunction with the scope and purpose of the Act. The Assessor was specifically required by s 6(2) to exercise the discretion in a manner that best promoted the objects of the Act (set out in s 5) and the object of s 92. The discretion was also confined by the requirement to have regard to certain facts and matters as set out in the Guidelines.”

  6. This applies equally to the Commission’s Members in respect of the MAI Act.

  7. There will be complexity in the legal sense as to how evidence is presented, given that the Evidence Act 1995 does not apply to the Commission. There could be significant argument seeking rulings to ensure procedural fairness in a contest where the Commission will be required to assess the credit and credibility of the claimant and lay witnesses.

  8. The Commission while not required to follow the Evidence Act1995 is still required to maintain procedural fairness by ensuring that the guiding principles in rule 73 of the Rules are met, which are:

    “The appropriate decision-maker for applicable proceedings must, when informing itself or themselves on any matter in the proceedings, have regard to the following principles—

    (a) evidence should be logical and probative,

    (b) evidence should be relevant to the facts in issue and the issues in dispute,

    (c) evidence based on speculation or unsubstantiated assumptions is unacceptable,

    (d) unqualified opinions are unacceptable.”

  9. The Commission’s guiding principle, which seeks to resolve the real issues in proceedings justly, quickly, cost effectively and with as little formality as possible, may be stretched on this point, particularly as directions on evidence will require weighty consideration.

  1. Commission Members are experts in the field of motor accidents including contests on breach of duty of care, non-identified vehicles and medical causation. They can bring their expertise to bear to assess evidence. 

  2. The responses to the NRMA’s investigation indicates the insurers may have trouble getting witnesses to attend the Commission. The insurers’ submission that it wants to be able to compel lay witnesses to attend any eventual hearing has weight.

  3. My own experience with witnesses who do not have a stake in an outcome is that they are often unwilling to spend time away from work or other interests to be available for a day at court unless they have a subpoena to satisfy an employer or another relevant entity they have to be there.

  4. Although it is possible to attend court via electronic means there is an element of unreliability and a danger that the disinterested witness will not be available, which could be for various reasons, including being too busy doing something else when they are called.

  5. The remaining points regarding hearing the case taking up to four days and the claimant living interstate are not persuasive.

  6. The Commission can provide transcripts and has a court room that can be utilised for longer hearings.

  7. The claimant has a stake in the proceedings and the point is moot, because if he does not attend his case can be dismissed, or he can attend via Teams.

  8. However, the insurer have consistently declared they intend to call lay witnesses and the insured drivers. Both drivers have displayed behaviour that indicate that the tribunal hearing these claims could need to compel them to attend to give evidence.

  9. Accordingly the preliminary assessment of the claim to make a recommendation to the President whether the claim is not suitable for assessment under this Division.

CONCLUSION

  1. Having made a preliminary assessment of these claims, I determine for the reasons set out above that these claims are not suitable for assessment section 7.34(1)(b) of the MAI Act because the insurer intends to call witnesses who may not attend unless compelled. An assessment is not suitable if that is the case and I recommend to the President that they be exempt from assessment.

  2. This decision is to be attached to Commission proceedings M10431912/21 and M10537076/22.

  3. In accordance with s 7.34(1)(b) of the Motor Accident Injuries Act 2017, the Division Head (Motor Accident Division) as Delegate of the President, on 20 June 2023, approved Member Terence O’Riain’s recommendation that the claim is not suitable for assessment.



….(2)  If the proceedings are allocated to the Motor Accidents Division, a summons may be issued only to a party to the proceedings…
See also Stanton v Winning [2022] NSWDC 104

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