Allianz Australia Insurance Ltd v Anderson
[2013] NSWSC 1186
•28 August 2013
Supreme Court
New South Wales
Medium Neutral Citation: Allianz Australia Insurance Ltd v Anderson [2013] NSWSC 1186 Hearing dates: 26 April 2013 Decision date: 28 August 2013 Before: Rothman J Decision: (1)A declaration that, pursuant to s 94 of the Motor Accidents Compensation Act 1999, Allianz is bound by the assessment and certificate of the Claims Assessor, Geraldine Daley, made on 12 December 2012, and is required to pay to Ms Zoe Karen Anderson the amount of damages specified in the said certificate by reason of s 95 of the Act.
(2)The plaintiff shall pay the first defendant's costs of and incidental to the proceedings, as agreed or assessed.
(3)Otherwise the proceedings are dismissed.
Catchwords: ADMINISTRATIVE LAW - Motor Accidents Compensation Act 1999 - application of s 94 of the Act - whether there are formal requirements for admission of liability - admission of breach of duty of care - separate admission of some damage but dispute as to the extent of any injury, the extent of any loss and the extent of any damage - liability admitted - insurer bound by assessment of damage Legislation Cited: Motor Accidents Compensation Act 1999 Cases Cited: Immer (No. 145) Pty Ltd v The Uniting Church in Australia Property Trust (N.S.W.) (1993) 182 CLR 26
Lee v Yang [2006] NSWCA 214
State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291
The Nominal Defendant v Gabriel & Anor [2007] NSWCA 52; (2007) 71 NSWLR 150Category: Principal judgment Parties: Allianz Australia Insurance Ltd (Plaintiff)
Zoe Karen Anderson (First Defendant)
Geraldine Daley in her capacity as a Claims Assessor of the Motor Accidents Authority of New South Wales (Second Defendant)
Motor Accidents Authority of New South Wales (Third Defendant)Representation: Counsel:
M Robinson SC / W Fitzsimmons (Plaintiff)
J Simpkins SC / A Cooley (First Defendant)
Crown Solicitor's Office - Submitting appearance (Second and Third Defendants)
Solicitors:
Moray & Agnew (Plaintiff)
Slater & Gordon (First Defendant)
Crown Solicitor's Office - Submitting appearance (Second and Third Defendants)
File Number(s): 2013/34899 Publication restriction: None
Judgment
Allianz Australia Insurance Ltd (hereinafter, "Allianz") seeks orders (including declarations) that an assessment and certificate issued by the second defendant on 12 December 2012, relating to a motor vehicle accident in which Zoe Karen Anderson (the first defendant) was involved, is not binding on Allianz and that Allianz is not required to pay the damages assessed.
The details of the accident are almost irrelevant and the issue between the parties depends on a proper interpretation of ss 94 and 95 of the Motor Accidents Compensation Act 1999 (hereinafter, "the Act"), the meaning of the term "liability", and a proper construction of the statements and conduct of Allianz.
Background facts
Ms Anderson was involved in a motor accident on 20 September 2004. On 11 January 2005 she submitted a claim form (sworn 10 January 2005 and received by Allianz on 14 January 2005) under the Act in respect of her alleged injuries.
As described in the reasons for decision of 12 December 2012, Ms Anderson was driving her car in an easterly direction along the Great Western Highway at Prospect on Monday, 20 September 2004, at approximately 3.00pm. She stopped at the intersection of the Great Western Highway and the Prospect Highway, in order to turn into the Prospect Highway. Whilst stationary, she was hit from behind by a large refrigerator truck.
More importantly from the perspective of the issues to be decided in these proceedings, as stated, Ms Anderson filed a claim on 11 January 2005. On 16 June 2005, Allianz filed a s 81 Notice admitting "a breach of duty of care". The relevant terms of the s 81 Notice were:
"We refer to previous correspondence in respect of the above matter and wish to advise we are now in a position to admit a breach of duty of care in relation to the circumstances of the above accident.
This admission is made after considering all the relevant information available at this time. However, we reserve our right to withdraw our admission and reassess our position if, at a later date, further information is received that would cause us to alter our view."
Further correspondence ensued. It is however instructive to examine the "pleadings" filed prior to the correspondence recited above. The claim by Ms Anderson (in answer to question 4 on the Claim Form) indicated that the insurer had neither denied liability or breach of duty of care for the accident, nor failed to issue a s 81 Notice within three months by which liability would be deemed to be wholly denied.
Ms Anderson did not complete (because neither option was correct) question 5 on the Claim Form.
Thirdly, Ms Anderson answered question 6 on the Claim Form describing the dispute as about "Permanent Impairment and Stabilisation [that is whether the claimant's injuries caused by the motor accident have stabilised and whether the permanent impairment of the claimant as a result of the injuries caused by the motor accident is greater than 10%]".
Lastly, of relevance, the Claim Form filed by Ms Anderson lists a number of injuries, the details of which it is unnecessary to repeat.
The response, dated 28 June 2007, and filed by Allianz, signified that the claimant's (Ms Anderson's) answers to questions 4, 5 and 6 were correct and in response to the answers to question 7 on the Claim Form listed a smaller number (and less severe) injuries "caused by the accident that [Allianz] considers currently give rise to an assessable degree of permanent impairment in accordance with ... [the Guidelines]".
Further, by annexure to the response by Allianz, it made the following statement:
"The insurer acknowledges that the claimant sustained soft tissue injuries to the cervical and lumbar spine."
The affidavit of Philip Bussoletti of 27 February 2013, which evidence I accept, recites, at [15], that Ms Anderson had returned to the United Kingdom indefinitely and was receiving medical treatment there. As a consequence of the filing of the response to which reference has been made and the s 81 Notice, an extract of which has been recited, Mr Bussoletti, who was the solicitor acting for Ms Anderson, formed the view that the first defendant (Allianz) had no entitlement to claim an exemption and completed a CARS Form 2A on 20 July 2007 on the basis that there was no dispute about liability.
The CARS Form 2A was an application for general assessment by the Claims Assessment Resolution Service (CARS). An insurance company/respondent to a claim is required to reply to such an application. Such a reply is a CARS Form 2R.
Such a reply was filed by Allianz on or about 10 September 2007. The response by Allianz accepts that the details about liability provided by or on behalf of Ms Anderson were correct (see question 6 of the CARS Form 2R). Question 6 on the CARS Form 2A, filed by Ms Anderson, is in the following terms:
"6. Details about liability
CARS Assessors can assess liability or fault in relation to an accident, however if contributory negligence is alleged at greater than 25% or if liability is denied the claim must be exempted under s 92(1)(a) of the Act.
Is there a dispute about liability?"
To the foregoing question, Ms Anderson answered "No", as a consequence of which the CARS Form 2R response by Allianz, which accepted the correctness of the statement by Ms Anderson at Question 6, accepted that liability was not in issue.
On 12 September 2011, there was a conference before CARS, being a preliminary conference held by teleconference between the parties. It was agreed that the matter was not ready to proceed to assessment because, inter alia, the alleged injuries had not stabilised. The report of the CARS Assessor of 12 September 2011, following the aforesaid conference, recited that liability is not in dispute. No issue seems to have been taken with that report.
On 30 November 2011, a further report of the Claims Assessor issued, being a report of the Second Preliminary Conference. It recites that:
"There is a causation issue which will be canvassed by the Insurer in its submissions."
The foregoing statement was repeated in the Third Preliminary Conference report of 28 February 2012.
There was undoubtedly a significant issue between the parties as to the extent of the injury caused by the accident. Allianz claimed, as earlier recited, that the injury was confined to soft tissue injury. Ms Anderson claimed significant back injury that required a spinal fusion (performed in the United Kingdom) and consequential psychiatric affect.
Leaving aside minor failures to abide by the agreed and ordered timetable, the matter was readied for hearing and heard by the Claims Assessor, resulting in the issue of the reasons for decision and certificate of 12 December 2012.
The certificate assessed damages at $3,441,221; credit was allowed for a sum pursuant to s 130 of the Act; and Ms Anderson was awarded costs.
The scheme of the Act and the provisions of s 94 thereof
The scheme of the Act and its purposes have been described on a number of occasions at the highest levels in this State. The Act was promulgated in 1999 to achieve a less formal means of resolving claims for compensation (or aspects of such claims) resulting from motor vehicle accidents.
The stated purposes of the Act are, relevantly, to encourage early and appropriate treatment and rehabilitation, to provide compensation for compensable injuries, to encourage the early resolution of compensation claims and to keep premiums affordable, inter alia, by limiting the amount of compensation payable for non-economic loss. There are other objects.
As has been made clear in a number of curial statements, common law rights to damages for non-economic loss were significantly altered by the promulgation of the Act, for example, particularly by s 131 thereof.
The Act requires medical disputes (i.e. a dispute about the extent and cause of injury and whether the threshold for non-economic loss has been reached) to be resolved by medical assessors: see Part 3.4 of the Act. A certificate from a medical assessor is conclusive evidence in court proceedings as to the matters certified. Even in circumstances where a court is entitled to reject the certificate for certain confined reasons (a denial of procedural fairness), the court is required to refer the matter to a medical assessor for a certificate upon which the Court can then rely: see s 61 of the Act, particularly s 61(4) and s 61(5).
In order to further the objects, some of which are summarised above, the Act promulgates a procedure for the resolution of claims. That procedure involves alternatives.
In certain circumstances (see s 92(1)(a) of the Act), a claim may only be dealt with by or through proceedings in a court. Otherwise, the claim for compensation for a motor vehicle accident may be dealt with by the claims assessment process or by proceedings in a court. Initially, if a party applies for exemption from the claims assessment process, in relation to a claim not described by s 92(1)(a) of the Act, a claims assessor determines whether the claim is not suitable for assessment under Part 4.4 of the Act: see s 92(1)(b) of the Act.
If, as is the situation in the present proceedings, a claim proceeds to assessment under Part 4.4 of the Act, then s 94 of the Act requires the claims assessor to make an assessment of the issue of liability for the claim (unless the insurer has accepted liability) and the amount of damages for that liability.
In the latter circumstances, the assessment specifies the amount of damages and the claims assessor issues a certificate as to the assessment.
The status of an assessment made under s 94 of the Act is described in s 95 of the Act. The opening subsection describes an assessment as "not binding on any party to the assessment".
Nevertheless, once liability is accepted by the insurer, if the claimant were to accept the amount of damages assessed by a claims assessor, the assessment of damages is binding on the insurer and the insurer is required to pay the amount together with any order that has been made for costs and interest payable pursuant to the provisions of the Act.
Thus, the Act establishes two distinct aspects of an assessment process: the first being an assessment on liability (to the extent that liability is an issue in dispute); and, secondly, the specification of an amount of damages.
Whether an issue falls within the determination of liability or the determination of the amount of damages has great significance. For example, an insurer that alleges contributory negligence is alleging an issue that goes to liability, the assessment of which is then not binding on the insurer (except to the extent that the insurer accepts it).
However, an insurer that only disputes the quantum of damage (leaving aside for present purposes a claim that no damage arose from the relevant accident) is disputing an issue going to the specification of the amount of damage. Once the amount of damage is assessed, if assessed at a level that is accepted by the claimant, the insurer is bound by that assessment.
In these proceedings, as already stated, Allianz issued a notice admitting "a breach of duty of care" and submits that there has been no acceptance of liability, as a consequence of which the assessment decision is not binding on it.
On the other hand, Ms Anderson submits that there has been an admission of liability and, the amount of damages having been accepted by Ms Anderson, that assessment of damage is binding on Allianz.
The foregoing obligations are part of a scheme by which the parties are obliged to endeavour to resolve claims under the Act, by settlement or otherwise, justly and expeditiously. It also provides the context for the requirement imposed upon an insurer to give written notice of its attitude to liability, no later than three months from the making of a claim.
Further, it is an insurer's duty to make a reasonable offer of settlement (either by specifying an amount for damages or a method of calculating damages) within a specified time from the stabilisation of the injury or two months from the provision of particulars.
From the time that an insurer admits liability (or, in the case where liability has not been admitted, from the time liability is assessed in favour of a claimant) the insurer is required to cover hospital, medical and other expenses and to take reasonable steps for medical rehabilitation of the claimant.
As earlier stated, some claims are the subject of court proceedings, but the vast majority of claims are dealt with by Claims Assessors in accordance with the Guidelines promulgated by the Motor Accident Authority.
Liability and Damages
In dealing with the bifurcation of the claims process between assessing liability and the amount of damages, on one hand, and medical disputes, on the other, it is necessary to examine other provisions of the Act. Section 3, Definitions, defines a "claim" to mean "a claim for damages in respect of 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."
Apart from the directly relevant terms of the Act, to which reference has already been made and some of which have been recited, it is necessary to examine the impact of s 58 on the matters now being considered.
Section 58 deals with applications for medical assessments. I reiterate that medical assessments are dealt with by medical assessors, each of whom is a medical practitioner, usually specialised in the discipline to which an injury relates, who issue certificates as to whole person injuries, which certificates are binding on Claims Assessors and courts (see s 61 of the Act).
Section 58 of the Act deals with the application for resolution of medical disputes. It is in the following terms:
"58 Application
(1) This Part applies to a disagreement between a claimant and an insurer about any of the following matters (referred to in this Part as 'medical assessment matters'):
(a) whether the treatment provided or to be provided to the injured person was or is reasonable and necessary in the circumstances,
(b) whether any such treatment relates to the injury caused by the motor accident,
(d) whether the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%.
(2) This Part also applies to any issue arising about such a matter in proceedings before a court or in connection with the assessment of a claim by a claims assessor."
Once more, medical assessments are an informal process that deals, inter alia, with satisfaction of the jurisdictional precondition to the awarding of non-economic damage. Relevantly, for present purposes, it is the medical assessor that determines, conclusively, the degree of permanent impairment of the injured person.
Where, as here, there is a dispute as to whether a particular injury was caused by the motor vehicle accident (or is suffered at all), that is a matter conclusively certified by the medical assessors.
Notwithstanding the unfortunate use of the definite article in the words "the injury" in s 58(1)(b) and s 58(1)(d), a proper construction of the Act makes clear that any and all injuries suffered as a result of a motor vehicle accident are certified by the medical assessors. Therefore, the extent and nature of the injuries suffered as a result of a motor vehicle accident is a medical dispute resolved by medical assessors. This is confirmed by the provisions of s 83 and in particular by s 83(2) of the Act.
Consideration
The submissions of Allianz rely upon the proposition that the s 81 Notice, to which reference has been made, did not admit "liability". Rather, the Notice, it is submitted, admitted "breach of duty of care in relation to the circumstances of the above accident". Allianz's submissions draw the distinction between liability, on the one hand, and breach of duty of care, on the other.
Allianz submits that the admission as to "breach of duty of care" is an admission under s 81(2) of the Act and liability, for the purposes of s 95 of the Act, was never admitted and the assessment of liability by the Claims Assessor is not accepted. As a consequence, the assessment and certificate are not binding on Allianz.
It is necessary to set out the provisions of s 81 of the Act. It is in the following terms:
"81 Duty of insurer with respect to admission or denial of liability
(1) It is the duty of an insurer to give written notice to the claimant as expeditiously as possible whether the insurer admits or denies liability for the claim, but in any event within 3 months after the claimant gave notice of the claim under section 72.
(2) If the insurer admits liability for only part of the claim, the notice is to include details sufficient to ascertain the extent to which liability is admitted.
(3) If the insurer fails to comply with this section, the insurer is taken to have given notice to the claimant wholly denying liability for the claim.
(4) Nothing in this section prevents an insurer from admitting liability after having given notice denying liability or after having failed to comply with this section.
(5) It is a condition of an insurer's licence under Part 7.1 that the insurer must comply with this section."
The provisions of s 81(1) of the Act require an insurer, in this case Allianz, to give written notice (expeditiously) as to whether it admits or denies liability. There is no third choice. There is an election: liability is either denied or admitted, each of which is mutually exclusive: State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291 at [40] per Gaudron, Gummow and Hayne JJ; Immer (No. 145) Pty Ltd v The Uniting Church in Australia Property Trust (N.S.W.) (1993) 182 CLR 26 at 41-2.
The provisions of s 81(2) of the Act allow the insurer, and allowed Allianz, to admit liability "for only part of the claim". It does not allow Allianz, or an insurer in any other claim, to admit part of the liability for the entire claim.
In other words, liability must be admitted or denied. The provisions of s 81 do not allow some, but not all, criteria giving rise to liability to be admitted. Such an "admission" would be a statement denying liability, if the remaining criteria, essential to the establishment of liability, were denied.
For example, s 81 does not permit an insurance company to admit a duty of care, but deny a breach of the duty of care. Of course an admission as to duty of care may be made, but it is not being made under s 81 of the Act. A statement by an insurance company that it admitted a duty of care but denied a breach of the duty of care would be a denial of liability. It would not be an admission of liability for only part of the claim.
Allianz submits that the "admission" in its s 81 Notice was an admission of partial liability. It is not. It is an admission of one aspect of liability. Further, the submission of Allianz is that the "admission" did not admit: whether there was injury; what was the extent of any injury; whether there was loss; what was the extent of any loss; whether there was damage; and what was the extent of any damage. Moreover, at the hearing before the Claims Assessor, the plaintiff contested issues of injury, loss and damage.
There are a number of difficulties with the foregoing submission. Firstly, the question of whether an insurer has admitted liability is not confined to its notice under s 81 of the Act. In this case, the admission of liability derives from a number of documents.
First, as earlier stated, there is the s 81 Notice, to the extent that it is an admission. Secondly, the MAS Form 2R, filed by Allianz, was to the effect that the MAS Form 2A, filed by Ms Anderson, was correct when it stated that there was no dispute about liability.
Over and above the foregoing, Allianz at no stage raised any issue with the Claims Assessor that the comment, by the Claims Assessor on each of its conference reports, that "Liability is not in dispute", was otherwise than correct. In my view, by its comments, statements and conduct, Allianz admitted liability.
Moreover, if the s 81 Notice is construed as neither admitting nor denying liability, then, pursuant to the terms of s 81(3) of the Act, there was a deemed denial of liability. Pursuant to the provisions of s 81(4), thereafter, Allianz was permitted to admit liability, where a denial had earlier been made, but not to deny it, where an admission had been made.
The subsequent conduct of Allianz admitted liability. That subsequent conduct included the admission on the MAS Form 2R, filed on 29 June 2007, that there was no dispute as to liability; failing to retract that answer (if that were legally possible); and conducting itself on the basis of the correctness of the comments by the Claims Assessor, in each report, that liability was not in issue.
Moreover, the submission that the s 81 Notice was a "partial admission of liability" raises fundamental issues. It is accurate to submit, as Allianz has done in these proceedings, that it contested issues of injury, loss and damage.
Liability in tort depends upon the occasioning of damage. Central to the tort of negligence, on which liability a claim in a motor accident relies, is the occasioning of damage. However, it is not the level of damage which occasions the tort, only the occasioning of some damage.
At all times, Allianz has admitted the occasioning of some damage. It has denied that the injury caused damage of the significance claimed by Ms Anderson.
In other words, Allianz, at all stages, had conceded that damage had been suffered as a result of the breach of duty, which it had admitted. That which was denied was the quantum of damage.
The difficulty with the foregoing construction is whether it leaves any work for the provisions of s 81(2) of the Act. It seems, however, properly construed, that it does.
A s 81 Notice that admitted liability to the extent of 75 per cent, because of contributory negligence, would be an admission of liability for part only of the claim. Further, if part of the claim to which s 81(2) refers were to include a confinement of the claim by the nature of the injury that arose or by the extent of the injury that arose, it would seem to create a tension with the provisions of s 94 of the Act.
Section 94 of the Act divides the function of a Claims Assessor into the issue of liability "for the claim" and "the amount of damages for that liability". If liability were to be determined in accordance with each injury or the significance of each injury, there would be a requirement for s 94 to require the Claims Assessor to determine the issue of liability "for each aspect of the claim" or "each injury arising from the claim".
Ordinarily, liability depends upon damage occasioned to a person by another in breach of a duty of care owed by that other to the person who suffered damage. The significance of the damage and the amount of the damage or loss are matters for the assessment of damages, not for the assessment of liability.
Lastly, Allianz relies upon the requirement, it submits, that an admission of liability can only be effected by a s 81 Notice. Allianz relies, for that submission, on the fact that the Claims Assessor is an administrative decision-maker and not a court of law and the jurisdiction to issue a certificate depends upon the statutory requirements of the Act. Further, it is said the requirements of s 81 must be "strictly complied with".
Further to the foregoing, the process adopted by the Claims Assessor involved participation in a settlement conference pursuant to the provisions of Division 1A of the Act. As is prescribed by s 89E of the Act, that Division does not apply to a claim in which the insurer wholly denies liability. If the s 81 Notice filed by Allianz did not amount to an admission of liability, in whole or in part, as is the alternative proposition, the provisions of Division 1A of the Act could not have applied.
Allianz relies upon the judgment of the Court of Appeal in Lee v Yang [2006] NSWCA 214. The judgment of the Court of Appeal involved an appeal from the District Court.
The District Court had dismissed an appeal from the Judicial Registrar in which the Judicial Registrar had operated on the basis that the amount of damages assessed was binding on the insurance company that was party to the dispute before the Court. The Court of Appeal determined that the insurance company did not accept the liability assessed and was therefore, pursuant to the terms of s 94 and s 95 of the Act, not bound by the assessment and entitled, in later proceedings, to contest the assessment of damages.
The circumstances before the Court of Appeal in Lee v Yang, were significantly different from those that are before the Court in these proceedings.
The s 81 Notice issued by the insurer in Lee v Yang, accepted that the insured was at fault, but alleged contributory negligence on the part of the claimant. Unarguably, contributory negligence is an issue going to "liability".
As a consequence, in Lee v Yang, the s 81 Notice (and the subsequent conduct of the insurer) made clear that there was a dispute as to liability. Indeed, before the Court of Appeal it was common ground that an assessment of "the issue of liability for the claim" as described in s 94 of the Act encompassed contributory negligence: see Lee v Yang, at [21].
The Court of Appeal (Giles JA, with whom Hodgson and Ipp JJA agreed), dealing with the structure of s 95, said at [23]:
"[23] ... The structure is readily understandable. Section 95(1) is in the terms of an assessment being not binding. Section 95(2) follows it in the terms of an assessment being binding, and adds an obligation to pay the claimant. It is necessary to impose the obligation, because s 95(2) will commonly operate in the absence of legal proceedings. But both conditions must be satisfied.
[24] In my opinion, the double consequence construction is correct.
[25] What may be binding is 'the amount of damages for liability under a claim'. This picks up the liability found on the issue of liability for the claim, and is 'the amount of damages for that liability' in s 94(1)(b) and so the damages payable to the claimant after any reduction for contributory negligence. The claimant may accept 'that amount of damages' in settlement of the claim, and correspondingly the insurer may accept 'that liability under the claim', being the liability assessed 'on the issue of liability for the claim'.
[26] Section 95(2) provides a mechanism by which the non-binding assessment of the issue of liability for a claim and the assessment of the amount of damages for that liability become binding as a package. ... But there must be the conjunction of the two conditions in paras (a) and (b), and each of the claimant and the insurer may decline to accept and thereby make the other go to court. The subsection refers to the assessment of the amount of damages for liability under the claim being binding on the insurer, rather than on both the claimant and the insurer, because the claimant's acceptance necessarily involves the assessment being binding on the claimant in the event of the insurer's acceptance; and because it is open to the insurer to contest the assessment of damages only if the insurer contests the liability as found by the assessor."
Given the circumstances that liability was unarguably in issue in the proceedings that gave rise to the appeal in Lee v Yang, the comments of the Court of Appeal do not support the submission of Allianz, which depends upon a construction as to whether, in truth, liability was put in issue or admitted.
Allianz also relies upon the judgment of the Court of Appeal in The Nominal Defendant v Gabriel & Anor [2007] NSWCA 52; (2007) 71 NSWLR 150. In those proceedings the Court of Appeal (Hodgson JA and Campbell JA, Basten JA dissenting) held that an admission of breach of duty of care by an insurer under the Act did not preclude the insurer from pleading a defence in subsequent proceedings denying liability. The circumstances in Gabriel require summary.
The reasons for judgment diverge, even within the majority. Hodgson JA, at [2], considers that the insurer's letter of 3 June was an admission of liability within s 81, subject to 25 per cent contributory negligence. Further, Hodgson JA takes the view that an admission of breach of duty of care was an admission of liability. His Honour said:
"[2] In my opinion, AAMI's letter of 3 June was an admission of liability within s.81, subject to a reduction of 25% for contributory negligence. The admission was expressed to be an admission of breach of duty of care, but the reference to a deduction of 25% from any final settlement, and to payment in full of medical expenses, amounted to an implied admission of at least some consequential suffering of damage."
The "admission of breach of duty of care" that was taken by Hodgson JA to be an admission as to liability was qualified by a claim that there was 25 per cent contributory negligence. As a consequence, like Lee v Yang, there was unarguably a contest or dispute as to liability.
In the course of reasons for judgment, Campbell JA remarked:
"[85] The admission made by AAMI's letter of 3 June 2003 was of breach of duty of care. As the claim made by the plaintiff was that the driver of the unidentified vehicle had committed the tort of negligence, and as someone is liable for the tort of negligence only if that person owes a duty of care to the plaintiff, has breached that duty of care, and the plaintiff has thereby suffered damage, the admission made by AAMI was not, strictly, an admission of liability for the claim. The admission of breach of duty of care necessarily contained within it an admission of the existence of a duty of care, but no admission was made of any consequential suffering of damage. Thus it counts as an admission of liability for only part of the claim. An admission of liability for part of a claim, in this way, can fairly be described as a notice that includes 'details sufficient to ascertain the extent to which liability is admitted', and thus is expressly contemplated by section 81(2) MAC Act."
Again, in the instant proceedings, there was not only an admission of a breach of duty of care, but an admission that damage arose as a consequence of that breach. The dispute between the parties was the nature of the injury and the extent of the loss.
Utilising the reasoning of Campbell JA in the passage recited above, the s 81 Notice admitted one element of liability, but did not admit damage, which was a necessary element on the question of liability. However, the later response by Allianz admitting soft tissue injury completed the admission of liability for the tort.
In those circumstances, it is unnecessary to deal with what seems to be a tension between the reasoning of Hodgson JA and Campbell JA in relation to whether the admission of a breach of duty was an admission of liability. For my own part, it seems to me that the Act treats liability somewhat differently than does the common law.
Given that the Act splits the process of determining liability from the process of determining the nature and extent of injuries arising from an accident, it would seem preferable, and more in keeping with the attainment of harmonious goals, to treat "liability" under the Act as confined to the existence of and breach of a duty of care. As earlier stated, it is unnecessary to deal finally with such an issue.
On the foregoing analysis, each of Hodgson JA and Basten JA determined that the insurer had made an admission of liability. Only Campbell JA took the view that an admission as to "a breach of duty of care" was not an admission of liability. In that respect, the reasons of Basten JA at [41], are instructive:
"[41] This gives rise to a minor subsidiary question as to the terms on which it sought to admit liability. The admission, contained in the notice of 3 June 2003, admitted 'breach of duty of care' and asserted contributory negligence estimated at 25% (apparently based on the failure of the claimant passenger to wear a seat belt). There is no liability in negligence without damage. Further, the purpose of the statutory scheme is demonstrated by the preceding section, which requires an insurer 'to endeavour to resolve a claim, by settlement or otherwise, as justly and expeditiously as possible': s 80. It is also demonstrated by the terms of the subsequent section, which requires an insurer to make 'a reasonable offer of settlement to the claimant (unless the insurer wholly denies liability for the claim)': s 82(1). The offer of settlement 'is to specify an amount of damages or a manner of determining an amount of damages': s 82(2). Thus, although s 81(2) permits the insurer to admit liability 'for only part of the claim', read in context an admission of liability involves a concession that damage has been suffered as a result of a breach of duty. Accordingly, I would read the notice as an admission of liability limited in extent by the claim of contributory negligence and, possibly, by the reservation of rights of contribution, though it is doubtful that Part 4.3 of the MAC Act is concerned with questions of contribution."
If, as is submitted by Allianz, the s 81 Notice that it issued was a "partial admission of liability", and there can be no liability without damage, a partial admission of liability must admit damage. As earlier stated, it is unnecessary to determine that issue finally.
On the facts in these proceedings, Allianz by the issue of the s 81 Notice and its subsequent documentation has admitted breach of the duty of care and damage, thereby admitting liability, and has also admitted liability by acknowledging that liability was not in issue.
Section 81 requires an insurer either to admit or to deny liability. It does not require such an admission or denial to be in any particular form. Further, s 81 allows an insurer, after initially denying a claim, in whole or in part, later to admit liability. That later admission, also, requires no form.
The Act is permissive, in that, it makes clear that the section does not prevent an insurer from later admitting liability. Nothing in the provisions of s 81 requires formality. Nothing in the Guidelines requires formality.
For obvious reasons, mainly associated with the statutory imposition of compliance with s 81 as a condition of the insurer's licence, insurers are keen to ensure that a Notice under s 81 is headed a s 81 Notice and there is a clear indication that compliance with the section has occurred. The Act, however, does not require any particular form. The section does not require any particular heading. An admission as to liability may be made in precisely the same way as it is under the general law.
For the foregoing reasons, Allianz has admitted liability. Given that Ms Anderson accepts the amount of damages assessed, Allianz is bound by the assessment and, pursuant to the terms of s 95 of the Act, must pay to Ms Anderson the amount of damage specified in the certificate, together with the amount specified for costs and for interest.
The Court makes the following orders:
(1) A declaration that, pursuant to s 94 of the Motor Accidents Compensation Act 1999, Allianz is bound by the assessment and certificate of the Claims Assessor, Geraldine Daley, made on 12 December 2012, and is required to pay to Ms Zoe Karen Anderson the amount of damages specified in the said certificate by reason of s 95 of the Act.
(2) The plaintiff shall pay the first defendant's costs of and incidental to the proceedings, as agreed or assessed.
(3) Otherwise the proceedings are dismissed.
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Decision last updated: 28 August 2013
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