Cic Allianz Insurance Ltd v Erturk - [2010] NSWSC 302

No judgment structure available for this case.

CITATION: CIC Allianz Insurance Ltd v Erturk & Ors [2010] NSWSC 302

HEARING DATE(S): 8 March 2010

JUDGMENT DATE :
21 April 2010

JURISDICTION: Common Law

JUDGMENT OF: Simpson J

DECISION: Amended summons dismissed with costs.

CATCHWORDS: ADMINISTRATIVE LAW – judicial review – Motor Accidents Compensation Act 1999 – claims resolution procedure – claims exempt from assessment procedure – admission of liability – admission based on mistake of fact – medical assessment – purported withdrawal of admission – no statutory provision for withdrawal of admission – amended notice issued – application for exemption – jurisdictional error – error of law on the face of the record – Supreme Court Act 1970 s 69 – no error of law established

LEGISLATION CITED: Motor Accidents Compensation Act 1999
Supreme Court Act 1970

CATEGORY: Principal judgment

CASES CITED: Checchia v Insurance Australia Ltd trading as NRMA Insurance [2009] NSWSC 1005
Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of NSW [2010] HCA 1
QBE Insurance v Motor Accidents Authority [2008] NSWSC 434
The Nominal Defendant v Gabriel [2007] NSWCA 52; 71 NSWLR 150

PARTIES: CIC Allianz Insurance Ltd (Plaintiff)
Baha Erturk (First Defendant)
Motor Accidents Authority of New South Wales (Second Defendant)
Principal Claims Assessor of the Motor Accidents Authority of New South Wales (Third Defendant)
Mr Paul Curtis, in his capacity as a Claims Assessor of the Motor Accidents Authority of New South Wales (Fourth Defendant)

FILE NUMBER(S): SC 2009/298139

COUNSEL: M A Robinson (Plaintiff)
B Dooley SC/F Curran (First Defendant)
Submitting Appearance (Second, Third and Fourth Defendants)

SOLICITORS: Moray & Agnew (Plaintiff)
Carters Law Firm (First Defendant)
I V Knight, Crown Solicitor (Second, Third and Fourth Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Simpson J

21 April 2010

2009/298139 CIC Allianz Insurance Ltd v Baha Erturk & Ors
JUDGMENT

1 HER HONOUR: By amended summons filed on 14 December 2009 the plaintiff, CIC Allianz Insurance Ltd, seeks judicial review, and consequential declarations and orders, of three decisions made pursuant to the Motor Accidents Compensation Act 1999 (“the Act”). Various provisions of the Act lie at the heart of resolution of the plaintiff’s claims.

2 The first defendant is Mr Baha Erturk, who has actively resisted the plaintiff’s claim. The second, third and fourth defendants are, respectively, the Motor Accidents Authority of New South Wales, the Principal Claims Assessor of that Authority (Ms Belinda Cassidy – “the PCA”), and Mr Paul Curtis, a Claims Assessor of that Authority. Each of the second, third and fourth defendants has filed a submitting appearance.

The statutory framework

3 The objects of the Act are stated at some length in s 5 thereof. For present purposes, it is necessary only to note some of sub-s (1). The relevant objects are:

4 To facilitate the achievement of these and other objects, the Act provides for what might be called a diversionary (that is, diverted from the courts) scheme or system for the management and resolution of claims of persons injured in motor accidents to which the Act applies. A useful overview of the Act is to be found in the judgment of Rothman J in Checchia v Insurance Australia Ltd trading as NRMA Insurance [2009] NSWSC 1005, in the following terms:

“8 The purpose of the legislation was the establishment of a new scheme for motor accident compensation that, generally, did not involve curial proceedings. Medical assessors resolve differences between injured persons and the relevant insurer as to the extent of the injury and whether the alleged accident was the cause of the injury. There exists a right of appeal to a Review Panel (which also consists of medical assessors).

9 The insurer is obliged by the Act to endeavour to resolve the claim, by settlement or otherwise, justly and expeditiously. It is, in that context, required to give written notice of its attitude to liability no later than three months from the making of the claim. It is also an insurer’s duty to make a reasonable offer of settlement (either a money amount for damages or a method of calculating same) within the later of one month from the stabilisation of the injury or two months from the provision of particulars by the claimant. It is required to cover hospital, medical and other expenses from the time of admitting liability (or having it determined) and also to take reasonable steps for the medical rehabilitation of the claimant.

10 …

5 By s 198 a new corporation, the Motor Accidents Authority of New South Wales (“the Authority”), was created. The functions of the Authority are set out in s 206 and include (sub-s (1)) such functions as are conferred or imposed by or under the Act or any other Act.

6 By s 8 motor vehicles driven on public roads in NSW are required to be covered by a policy of third party insurance issued by a licensed insurer, which indemnifies the owner and/or driver of the vehicle against liability in respect of the death of or injury to a person caused by the fault of the owner or driver (s 10). Part 7.1 makes provision for the licensing of insurers for this purpose.

7 Chapter 4 of the Act, entitled “Motor accident claims” is central to the present proceedings. By s 72(2)(a), a person (the claimant) claiming to have been injured by the fault of the owner or driver of an insured vehicle in the use and operation of that vehicle may make a claim by giving notice thereof to the licensed insurer. By s 80, a duty is imposed upon the insurer to endeavour to resolve such a claim, by settlement or otherwise, as justly and expeditiously as possible.

8 By s 81(1), it is the duty of the insurer to give written notice as expeditiously as possible, and in any event within three months, to the claimant as to whether it admits or denies liability for a claim made under s 72.

9 Since it will be necessary to return to s 81, it is convenient here to set out its terms in full:

Duty of insurer with respect to admission or denial of liability

10 It will be observed that, in sub-s (4), express provision is made for an admission of liability after an earlier denial. No corresponding provision is made for a denial of liability after an earlier admission.

11 By s 82, unless the insurer wholly denies liability for the claim, it is under a duty to make a reasonable offer of settlement within one month after the injury is sufficiently recovered to enable the claim to be quantified, or within two months after the claimant has provided all relevant particulars.

12 Part 4.4 deals with “Claims assessment and resolution”. Section 89A obliges the parties to participate in a settlement conference as soon as practicable after the insurer has made an offer of settlement under s 82. By s 90, a claim may be referred to the Authority, either by the claimant or by the insurer, or both, for assessment under Pt 4.4. For the purposes of the assessment of claims, claims assessors are, pursuant to s 99, appointed. Section 99A provides for the appointment of an Australian lawyer as the PCA.

13 By s 69(1) the Authority is empowered to issue guidelines called “MAA Claims Assessment Guidelines”, for or with respect to the assessment of claims under Pt 4.4 and associated matters. The Authority has done so (“the Guidelines”). It appears that the Guidelines are intended to have the force and effect of statutory rules (sub-ss (5) and (6)) or to operate as a form of delegated legislation.

14 Section 92 provides that certain claims are exempt from assessment under Pt 4.4. A claim is exempt from assessment, inter alia, if the fault of the owner or driver of the motor vehicle in its use or operation is denied by the insurer in its notice under s 81 (s 92(1)(a)). A claim is also exempt from assessment under Pt 4.4 if a claims assessor, having made a preliminary assessment of the claim, has determined (with the approval of the PCA) that it is not suitable for assessment under Pt 4.4 (s 92(1)(b)). Where a claim is exempt, for either of the specified reasons, the PCA is, as soon as practicable, to issue a certificate to that effect (s 92(2)). The consequence of exemption is that the diversionary, non-curial, process of assessment is brought to an end, and the claim is litigated through the courts.

15 Since s 92 is also of critical importance in these proceedings, it is as well to set it out in full:

Claims exempt from assessment

16 With respect to s 92(1)(a), ch 8 of the Guidelines relevantly provides as follows:

8.11.1 the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle is denied by the insurer of that vehicle in its written notice issued in accordance with section 81;

17 By cl 8.11.2, a claim is also exempt where the insurer alleges against the claimant contributory negligence in excess of 25 percent. Other circumstances may also render a claim exempt from assessment under s 92(1)(a), but they have no present relevance.

18 With respect to s 92(1)(b), detailed provision is made in ch 14, especially clauses 14.11-14.16, relevant to the preliminary determination that a claim is not suitable for assessment under Pt 4.4 required by s 92(1)(b).

19 Clause 14.16 sets out, non-exhaustively, relevant circumstances required to be considered. They include:

“14.16.1 Whether the claim is exempt under section 92(1)(a) …”,

20 (I find it difficult to understand the rationale for cl 14.16.1. If a claim is exempt under s 92(1)(a), then it is exempt, and a certificate under s 92(2) must be issued; that, it seems to me, leaves no room for a further determination by a claims assessor that, for that reason, it is not suitable for assessment and therefore exempt. It seems to me that cl 14.16.1 adds nothing and is redundant.)

21 In short, it may be concluded that the intent of the drafters of the legislation and of the Guidelines was to enable the speedy and non-adversarial resolution of non-complex claims, but to maintain the applicability of the judicial process for those claims deserving of that degree of scrutiny.

22 By s 94, the claims assessor is, in any claim referred for assessment, to make an assessment of the issue of liability (unless the insurer has accepted liability), and the amount of damages for that liability (being an estimate of what a court, if the claim were to be determined curially, would be likely to award). The assessment is to specify an amount of damages, and to include a brief statement of reasons for the assessment. The claims assessor is to issue to the claimant and the insurer a certificate as to the assessment.

23 Section 95 is headed “Status of assessments”. By s 95(1) an assessment on the issue of liability is not binding on any party. Section 95(2) provides:

24 I now turn to an outline of the background facts.

Background history

25 The plaintiff is an insurer licensed under the Act.

26 On 22 October 2006 a Suzuki hatchback motor vehicle then being driven by Mr Baha Erturk (the first defendant), on Parramatta Road, Flemington, collided with a truck owned by Lantrans Holdings and being driven by Mr Jeffrey Ridley in the opposite direction. Mr Erturk claimed that he was proceeding through an intersection, with a green traffic light in his favour, when the truck turned in front of him, causing the collision. In respect of the truck, Lantrans Holdings held a policy of insurance under the Act issued by the plaintiff. Mr Erturk suffered injuries.

27 Accordingly, by notice under s 72(2)(a) of the Act dated 21 November 2006, he made a claim to the plaintiff. The notice bears a stamp (in two places) of the plaintiff’s “CTP Claims Department” signifying that it was received on 14 December 2006. It also bears a number, identified as a “claim number”: 37N013957. In his s 72(2)(a) notice, Mr Erturk gave an account of the 22 October collision along the lines set out above.

28 On 17 November 2006, an unrelated collision occurred on the M7 motorway. One of the vehicles in that collision was another truck owned by Lantrans Holdings, and also subject to an insurance policy under the Act issued by the plaintiff. That truck was being driven by Mr Michael Tuck.

29 Two documents entitled “Accident Report – CTP Insurance” are in evidence. Each is on a form apparently issued by the plaintiff and, I infer, was substantially completed by an employee of Lantrans Holdings. They appear to be in the same handwriting. One bears the signature of Mr Ridley, dated 27 February 2007, and a signature of somebody representing the insured owner, dated 19 February 2007. This report shows the date of accident as 22 October 2006. That is plainly the accident in which Mr Erturk was injured. The second bears the signature of Mr Tuck, dated 15 January 2007, and a signature of the same date representing the insured owner. This form shows the date of accident as 17 November 2006.

30 Each has been allocated the same claim number: 37N013957 – the same number allocated to Mr Erturk’s s 72 claim.

31 Each form makes provision for an account of how the accident happened. That referable to the 17 November accident merely refers to “attached statement”. No such statement is attached to the copy of the form in evidence. There is otherwise in evidence a statement which I am prepared to infer is the statement intended to have been attached.

32 The accident report form referable to the 22 October accident (Mr Erturk’s accident) contains an account – presumably, Mr Ridley’s account – of how the accident happened in the following terms:

“Making R/H turn from Parramatta Road into Homebush Bay Drive with turning arrow, other vehicle was coming fast – our vehicle stopped but other vehicle went thru red light”

33 The statement which I take to have been the statement referred to in the report of the November accident, apparently signed by Michael Tuck on 18 November 2006, is in the following terms:

“MVA. M7 MOTORWAY. CECIL HILLS. 17.11.06 10.25AM.

Lexus

34 Mr Erturk’s s 72(2)(a) notice came before Mr Roy Rajapakse, a senior claims consultant employed by the plaintiff. Mr Rajapakse has had the management of Mr Erturk’s claim. On 28 March 2007 he made inquiries, he thought, about Mr Erturk’s claim. I infer that he had in front of him the accident report concerning the 17 November accident. I make no inference about his having available to him, then, the “attached statement”. It seems most likely that he did not.

35 On 28 March 2007 Mr Rajapakse telephoned Mr Tuck. He made a file note of the conversation. The file note is in the following terms:

“28.3.07 Rang Michael Tuck (O/I [? our insured] driver – ph [number given]) and asked him to describe circumstances of the accident.

- DOA: 22.10.06

- only two vehs involved

- he was driving his truck on M7 (going sth) and wanting to turn into Elizabeth St,

- he thought he had enough room + he had checked to see if other veh’s but when he turned © veh collided into his veh.

- he said it was his fault as he should’ve been more careful

- he got ‘neg driving’ fine and paid for it

- he was in 100km road

- there was only 1 occupant in other vehicle

RR”

36 It is impossible to reconcile this account with the account in the written statement.

37 It is plain that when Mr Rajapakse telephoned Mr Tuck he had before him the wrong accident form. He has given uncontested evidence that he did not see the 22 October accident report form until 24 November 2008, when it was sent to him by the plaintiff’s solicitors.

38 On 29 March 2007 Mr Rajapakse sent to the solicitors representing Mr Erturk a document headed “Section 81 Notice”. It contained, as “Our reference” the number 37N013957. Relevantly, the notice contained the following:

“… we are now in a position to admit a breach of duty of care in relation to the circumstance 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 necessary that would cause us to alter our view.

Please note we are still awaiting a Police report and once received a copy will be forwarded to you.

39 The terminology used is not entirely in accordance with s 81 – s 81 requires notice whether the insurer “admits or denies liability for the claim” but permits an insurer to admit liability for only part of the claim (sub-s (2)). To admit, as did the plaintiff, “breach of duty of care”, was something less than a full admission of liability – it encompassed duty of care, and breach of duty of care, but not injury, loss and damage. It was a partial admission of liability.

40 It was on the basis of Mr Tuck’s admission of responsibility (to use a neutral term) that Mr Rajapakse sent the s 81 notice on 29 March 2007. How Mr Rajapakse reconciled the information given to him by Mr Tuck with the detail of the 22 October accident given by Mr Erturk is a mystery. In any event, he accepted Mr Tuck’s acknowledgment of fault.

41 On 3 July 2007 the plaintiff received a police report in relation to the October 22 accident. Under the heading “Crash summary details” the following appears:

“Vehicle 1 [the Lantrans Holding truck] travelled east upon Parramatta Road Flemington in lane 3. Driver states that he observed a green arrow to the right at the intersection of Parramatta Rd and Centenary Dr. Vehicle 1 travelled through the intersection a short distance before vehicle 2 [Mr Erturk’s vehicle], travelling westbound upon Parramatta Rd collided with vehicle 1. Driver 2 [Mr Erturk] states he also had a green signal.”

42 On 18 September 2008 Mr Erturk lodged, on the form provided, an application for assessment of his claim under s 94 of the Act. This set out details of his claim and attached medical reports and other documents.

43 The form contained a question “Is this is a claim where liability is wholly denied?”. Acting, no doubt, on the s 81 notice admitting “breach of duty of care”, Mr Erturk (or his solicitor) ticked the “No” box.

44 On 5 November 2008 the plaintiff lodged its reply to Mr Erturk’s application. A section of the form, headed “Details about liability” makes provision for ticking “Yes” or “No” boxes to a question “Is there a dispute about liability?”; the plaintiff ticked neither box, but inserted, under another heading, “Nature of dispute”:

“There may be a dispute about liability. The section 81 notice was issued in error and liability is presently being reviewed.”

45 Officers of the plaintiff then began making inquiries, initially by attempting to locate Mr Ridley. The plaintiff engaged solicitors. It was then (on 19 November) that the accident report form signed by Mr Ridley came to light. How it did so, and where it had been in the interim, is not disclosed in the evidence. However, I am satisfied that it had been, at some stage, in the possession of the plaintiff. That is an inescapable conclusion from the insertion of the claim number which matched the number given to the claim made by Mr Erturk.

46 On 11 December 2008 the plaintiff’s solicitors wrote to Mr Erturk’s solicitors. They stated that the s 81 notice of 29 March had been issued by mistake. They said that investigations had indicated that Mr Ridley was not at fault in the collision, because he was turning right in accordance with a green traffic arrow, and that Mr Erturk had driven through the intersection contrary to a red light. They invited Mr Erturk’s solicitors to agree that (in accordance with s 92(1)(a) and the Guidelines) the claim ought to be exempted from the assessment process.

47 There is no evidence of any direct reply to this communication. However, it would be unsurprising if Mr Erturk’s solicitors advised him not to yield willingly the advantage he had by the admission of liability, and the course of events thereafter shows that he did not do so.

48 The assessment process commenced and at least two preliminary conferences took place, before claims assessor Mr Paul Curtis (the fourth defendant), on 12 and 16 December 2008.

49 At the latter of these the plaintiff indicated that it wished to make an application for exemption pursuant to s 92(1)(a) or, alternatively, s 92(1)(b).

50 On 13 January 2009 the plaintiff purported to issue a (further) notice under s 81, this time denying liability. On the same date the plaintiff lodged an application, under s 92(1)(a), for exemption from the claims assessment process. On 3 February 2009 Mr Erturk’s solicitors lodged a reply to that application.

51 Although, as will be seen, the legislation does not make any provision for, or recognise, a second s 81 notice where liability has been admitted, I will, for convenience and clarity, refer to the 29 March notice as “the first s 81 notice” and to the 13 January notice as “the second s 81 notice”.

52 In oral submissions counsel for the plaintiff expressly disclaimed reliance on the second s 81 notice as valid. His contention was that the first notice, because founded upon a mistaken understanding of the description of the accident given by the insured’s driver, was ineffective – a nullity. If that were so, then there is no s 81 notice, and the denial of liability deemed, by s 81(3) to operate, comes into effect, thus opening the way for exemption under s 92(1)(a).

53 On 13 February 2009 the PCA wrote to the parties, setting out something of the history, and requiring submissions on three matters. These were:

“(i) Is a notice issued by mistake an invalid notice and of no effect?

(ii) Can an insurer that has issued a section 81 notice by mistake issue a second notice?

54 The parties responded on 6 and 13 March respectively.

55 On 3 April 2009 the PCA dismissed the plaintiff’s application for exemption under s 92(1)(a), giving reasons. This is the first decision subject to challenge in these proceedings. It will be necessary to consider the reasons given by the PCA.

56 The PCA ruled that exemption under s 92(1)(b) was a matter for the claims assessor, Mr Curtis.

57 Accordingly, on 17 April 2009 the plaintiff applied to Assessor Curtis for exemption under s 92(1)(b). To be exempt from the assessment process pursuant to that subparagraph, it was necessary that a claims assessor make a preliminary assessment of the claim and determine, with the approval of the PCA, that it was not suitable for assessment under Pt 4.4.

58 On 13 May 2009, having received written submissions from the plaintiff and Mr Erturk’s solicitors, Assessor Curtis determined that he was not satisfied that the claim was not suitable for assessment under Pt 4.4. He therefore dismissed the application, giving reasons. This is the second decision the subject of challenge. Again, it will be necessary to return to consider the reasons given.

59 Mr Erturk’s claim then proceeded to assessment. On 11 September 2009 Assessor Curtis issued a certificate, in accordance with s 94 of the Act. He did this on the basis that the plaintiff had admitted liability, and that the only matter in issue was quantum of damages. He assessed damages in a specified sum. That was entirely in accord with the two previous decisions. It is the third decision subject to challenge. As I understand it, the challenge is not to any error said to be identifiable in the approach to the quantification, but that the process rested upon the two earlier – assertedly flawed – decisions.

Relief claimed

60 The plaintiff seeks nine substantive orders. They are:

(a) the plaintiff insurer has not accepted ‘ liability under the claim’ within the meaning of and for the purposes of section 95(2)(a) of the Motor Accidents Compensation Act 1999 …; and that,

2 A declaration that the letter from the plaintiff dated 29 March 2007 to the solicitors for the first defendant did not constitute a valid or lawful notice within the meaning of section 81 of the MAC Act.

3 A declaration that the first defendant’s claim for assessment of damages lodged before the second defendant is ‘exempt from assessment’ within the meaning of that expression in section 92(1)(a) of the MAC Act.

4 An order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the determination of the Principal Claims Assessor (‘PCA’), the third defendant, made on 3 April 2009 purportedly pursuant to section 92(1)(a) of the MAC Act to refuse the plaintiff’s application for exemption from assessment under Part 4.4 of the Act (‘Claims Assessment and Resolution’) (‘ the PCA exemption decision ’).

5 An order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the determination of the Claims Assessor, the fourth defendant, made on 13 May 2009 purportedly pursuant to section 92(1)(b) of the MAC Act to refuse the plaintiff’s application for exemption from assessment under Part 4.4 of the Act (‘ the Claims Assessor’s exemption decision ’).

6 An order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the certificate and determination of the Claims Assessor, the fourth defendant, made on 11 September 2009 purported pursuant to section 94(1)(b) of the MAC Act to assess the issue of liability for the first defendant’s claim before the Authority below (‘ the Claims Assessor’s assessment decision ’).

7 An order in the nature of prohibition or, alternatively, an injunction preventing the defendants or any of their officers, servants or agents from acting on or taking any further step in relation to the plaintiff in reliance on the PCA exemption decision, the claims assessor’s exemption decision and/or the claims assessor’s assessment decision.

8 An order in the nature of mandamus or an injunction requiring the third defendant to issue the plaintiff with a certificate pursuant to section 92(2) of the MAC Act (enabling court proceedings to be commenced in respect of the claim concerned).

Grounds of the application

61 The amended summons specifies a number of grounds of the application. One (in a paragraph numbered 7) was not pressed.

62 I shall attempt to summarise the grounds as set out in the amended summons. It will be necessary to deal, also, with the submissions that were put, both in writing and orally, on behalf of the plaintiff.

63 The grounds pleaded are, in essence:

(i) that the plaintiff had not accepted liability under Mr Erturk’s claim within the meaning of and for the purposes of s 95(2)(a) of the Act; that the plaintiff’s letter dated 29 March 2007 [the first s 81 notice] did not constitute a valid or lawful notice within the meaning of s 81 because a fundamental mistake or error had occurred in issuing the letter such that it was not a notice pursuant to s 81; accordingly, the assessment certificate of Assessor Curtis [the third decision challenged] is not binding upon the plaintiff;

“(a) Wrongly asserted that she did not have the ‘power’ to determine whether or not the letter from the plaintiff dated 29 March 2007 to the solicitors for the first defendant constituted a valid or lawful notice within the meaning of section 81 of [the Act] and in the premises where the plaintiff asserted and provided evidence that a fundamental mistake or error had occurred in issuing the said letter and that a ‘breach of duty of care’ should not have been so admitted …; and/or

(a) wrongly held that the plaintiff’s application was in the nature of an appeal from the PCA’s earlier determination;

(b) wrongly characterised the “liability status” of Mr Erturk’s claim;

64 Finally, paragraphs 10 and 11 of the specified grounds are in the following terms:

“10 The Court should determine that in circumstances where a letter is sent by an insurer to a claimant purportedly pursuant to section 81 of the MAC Act in circumstances where the said letter was afflicted or affected by a fundamental mistake or error in its creation and/or its sending, such a letter constituted no notice at all pursuant to section 81.

65 The orders and declarations sought on behalf of the plaintiff may be characterised as follows (I have paraphrased the prayers in the amended summons):

Declarations:

(ii) that the assessment certificate of Assessor Curtis on the quantum of damages is not binding on the plaintiff;

(iii) that the first s 81 notice did not constitute a valid or lawful notice within the meaning of s 81;

Orders:

4 “An order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the determination of the PCA” of 3 April 2009 refusing the plaintiff’s claim for exemption under s 92(1)(a);

5 “An order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the determination of” Assessor Curtis of 13 May 2009 refusing the plaintiff’s application for exemption from assessment under s 92(1)(b);

6 “An order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the certificate and determination of” Assessor Curtis of 11 September 2009 under s 94(1)(b) to assess the liability of the plaintiff for Mr Erturk’s claim;

7 An order in the nature of prohibition or, alternatively, an injunction restraining the defendants from acting on or taking any further step in reliance on the PCA’s exemption decision, on Assessor Curtis’ exemption decision and/or Assessor Curtis’ assessment decision;

8 An order in the nature of mandamus or an injunction requiring the PCA to issue the plaintiff with a certificate under s 92(2) (enabling court proceedings to be commenced in respect of the claim);

66 The plaintiff relied upon the powers conferred on this Court by s 69 of the Supreme Court Act 1970. That section relevantly provides as follows:

67 On behalf of the plaintiff it was contended that an alternative route to achieving the same end was the declaratory process. Either way, it is necessary that the plaintiff establish error of law in the decision making process.

68 The plaintiff’s principal contention was that jurisdictional error infected either or both of the first and second challenged decisions, and that, as the third challenged decision relied upon each of those, it also was affected by the same error.

69 What constitutes jurisdictional error has very recently been clarified by the High Court in Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of NSW [2010] HCA 1. Counsel argued that this decision is of no, or limited relevance, because it concerns an inferior court, and not, as here, an administrative tribunal. It is not necessary to embark upon a consideration of whether that distinction continues to operate (but see Kirk, [68]-[70]). The first inquiry is whether any error of law is to be found in either of the first or second decisions. If there were such an error, it may then be necessary to consider whether it ought to be characterised as jurisdictional or on the face of the record, providing the basis for an order in the nature of certiorari.

70 As will be seen, I am satisfied that no such error is identifiable. Accordingly, it is unnecessary to complicate this judgment with the niceties of administrative law that might otherwise arise.

71 The most convenient course is to deal with the challenges made to each decision in turn.

The first decision: the PCA’s refusal to exempt the claim

72 The first decision challenged is that of the PCA made on 3 April 2009, declining to exempt Mr Erturk’s claim, either under s 92(1)(a) or s 92(1)(b), from the assessment process. It is, however, only the refusal to exempt under s 92(1)(a) that attracted argument; the plaintiff appears to accept that a s 92(1)(b) decision lies within the jurisdiction of a claims assessor, in this instance Assessor Curtis.

73 In her reasons for decision, the PCA set out the history of Mr Erturk’s claim. She said that the plaintiff had issued two “notices” under s 81. She identified six issues that had arisen for determination, as follows:

“a. What does section 81 allow [the plaintiff] to do?

b. What has [the plaintiff] done – the first notice?

c. What has [the plaintiff] done – the second notice?

d. Do I have power to consider whether a mistake was made?

e. Can [the plaintiff] issue a second notice?

74 She proceeded to deal carefully with each of those issues. I will set out the salient points of her reasoning.

The first issue: s 81

75 The PCA set out and then paraphrased s 81. She noted that s 81 did not make provision for a number of alternative courses that could be adopted by the insurer; specifically, s 81 makes no provision for an insurer to deny liability after first having made an admission (it does permit the reversal of a denial of liability).

The second issue: the first s 81 notice

76 By reason of s 81(1), the plaintiff had three months from 14 December 2007 to give its s 81 notice. By reason of s 81(3), if it failed to do so, it was deemed to have denied liability.

77 The time for filing the s 81 notice expired on 15 March 2008, by which time the plaintiff had not filed any notice. Accordingly, by sub-s (3), it was deemed to have denied liability. However, by reason of s 81(4), the plaintiff was able to admit liability after the deemed denial, as it did by the first s 81 notice on 29 March.

78 The PCA accordingly held that the first s 81 notice “undid the deemed denial”. She noted that, for Mr Erturk’s claim to succeed, he would need to establish three things – (i) duty of care; (ii) breach of duty of care; (iii) injury, loss and damage.

79 The PCA held that the s 81 notice amounted to a partial admission of liability within the meaning of s 81(2) (that is, of the existence of a duty of care, and breach of that duty); Mr Erturk was put to proof on issues of loss and damage.

80 The PCA determined that the first s 81 notice sufficiently complied with s 81 to be valid.

The third issue: the second s 81 notice

81 The PCA noted that both accident reports (that is, the accident report referable to the Ridley accident, and that referable to the Tuck accident) bore the same claim number. She said:

“Whilst I have no evidence on the point it appears logical to assume they were both on the insurer’s file at the time Mr Rajapaske (sic) made a decision on liability.”

82 [Counsel for the plaintiff challenges this factual assumption. However, in my opinion, it was correct, at least to the extent that both reports were, or at least had been, in the possession of the plaintiff. That inference is inescapable, having regard to the claim number – a number assigned by the plaintiff – on each.]

The fourth issue: power of PCA to consider mistake

83 The PCA considered that her power to decide whether a mistake was made in issuing the notice was limited to “what appears on the face of the notice”; her power did not extend to considering whether the notice was issued by mistake.

84 She drew on her (considerable) experience of dealing with applications for exemption, to create some kind of analogy with cases in which claimants contended that a decision on the part of an insurer not to admit liability was unreasonable.

85 She noted that the plaintiff did not contend that what was contained in the notice was a mistake: it was that the decision to admit liability was wrong and based on a mistake by the claims officer. She said:

“The Notice issued by [the plaintiff] on 29 March 2007 nominates the Claimant as Baha Ertuk (sic) and specifies the correct claim number, the correct date and the correct location. It does not identify the insured’s negligent driver. On its face that notice is a valid section 81 notice issued by the insurer in respect of Mr Ertuk’s (sic) claim. I am satisfied that this notice is the written notice issued by [the plaintiff] to Mr Erturk communicating its decision on whether liability is admitted or denied for Mr Erturk’s claim.

31. I might have a different view if for example the notice that was issued nominated the date of accident as 17 November 2006 (the wrong date), the M7 motorway (the wrong location) and Mr Tuck’s negligent driving (the wrong driver). But there is nothing on the face of the 29 March 2007 notice to suggest anything other than it is the insurer’s notice in respect of Mr Erturk’s accident and claim.”

The fifth issue: a second s 81 notice?

86 The PCA considered that an insurer cannot issue an amended s 81 notice. She cited The Nominal Defendant v Gabriel [2007] NSWCA 52; 71 NSWLR 150, per Campbell JA and QBE Insurance v Motor Accidents Authority [2008] NSWSC 434, per Harrison AsJ as authority for that proposition. She recognised that the plaintiff was not seeking to issue an amended s 81 notice: its case was that the first notice was “invalid and is in fact no notice at all”. Since she had already found, in her consideration of the second issue, that the first s 81 notice was valid, the reality was that the plaintiff was seeking to issue an amended notice – something it was not permitted to do.

The sixth issue: exemptible claim?

87 The PCA ruled that the first s 81 notice was valid and the second had no effect. Mr Erturk’s claim was therefore not one that must be exempted under s 92(1)(a) and ch 8.11.1 of the Guidelines. She therefore dismissed the plaintiff’s application for exemption under s 94(1)(a).

88 She then considered the claim for exemption under s 92(1)(b). She held that that was a matter for Claims Assessor Curtis.

89 She noted that the plaintiff argued that the question of validity of the first s 81 notice “is a complex one” and therefore not suitable for assessment. She said that, should the claim be exempted under s 92(1)(b), that issue would never be before the court. She referred again to Gabriel as authority for the proposition that a s 81 notice has “no added significance” for the court further than as an out of court admission which may be departed from in an insurer’s defence to court proceedings, should such proceedings take place.

Error of law

90 The plaintiff’s position was put succinctly in written submissions as follows:

“30. The proper construction of section 81 must be that any notice issued by an insurer must be one issued addressing or having regard to ‘ the claim ’ the subject of the dispute before [the Authority]. In other words, the section requires that for a proper or valid or lawful section 81 notice to issue it must have been one where the insurer had turned its mind to ‘ the claim ’ made by the claimant in the relevant case (and not a claim made by someone else in some other vehicle accident).

31. In this circumstance, the section 81 notice was no notice at all and when the insurer did turn its mind to the correct claim, and a proper section 81 notice was issued, the latter notice is the only formal notice under the Act.

…

91 I note that paragraph 31 was contradicted by the oral submission made on behalf of the plaintiff. That submission was:

“I’m not suggesting for a moment that section 81 notice [ie the second] is effective. What I’m suggesting to your Honour is that the first 81 notice is ineffective and therefore the deemed [by s 81(3)] denial can rise and can operate.” (T p 7)

92 The argument cannot be sustained. I am prepared to accept, and I have no doubt, that the first s 81 notice was founded upon a mistaken apprehension by Mr Rajapakse about the circumstances of the accident. But that cannot affect the validity of the notice.

93 As has been noted more than once, s 81 makes no provision for the withdrawal of an admission of liability (by contrast with a denial of liability, which can, effectively, be withdrawn or superseded – see sub-s (4)). Except as provided by sub-s (4), the section makes no provision for a second, substitute or replacement certificate to be issued. A certificate admitting liability, once issued, is final for the purposes of the statutory scheme.

94 The PCA is given no express statutory power to go behind a certificate. Nor do I read into the legislation any implied power to do so. A certificate that on its face admits liability for the claim that it identifies is binding on the PCA. So much is, in my opinion, clear from ch 8.11.1 of the Guidelines, which, I repeat, is in the following relevant terms:

shall

in its written notice

95 The balance of cl 8 of the Guidelines sets out, in my opinion exhaustively, the circumstances in which the PCA is obliged to issue a certificate of exemption. None is here applicable.

96 Nowhere in the Act or Guidelines is the PCA given any power to consider the circumstances in which an insurer issues an apparently binding and valid certificate, or to relieve the insurer of the effects of issuing, by mistake, a certificate admitting liability; nowhere is the PCA given any discretion to allow an insurer to depart from the terms of any admission.

97 It may be that the omission to include such a provision was the result of an oversight; having regard to the scheme of the Act, I would not draw that inference.

98 In Gabriel, the Court of Appeal held that an admission contained in a s 81 notice is not necessarily binding in subsequent court proceedings. The Court did not have before it the precise circumstances of this case. But Campbell JA did allude to (without answering) the question that has here arisen. In a passage cited by the PCA, and by the plaintiff in these proceedings, he said (at [167]):

99 However, that passage was preceded by these observations:

“The ‘amended section 81 notice’ served in the present case does not have any effect pursuant to the [Act], for the simple reason that the [Act] has no provision for any amended section 81 notice that retracts an admission of liability previously made in a section 81 notice … it is not open to an insurer to ‘withdraw’ a section 81 notice in the sense that it ceases to be an admission for the purposes of the law of evidence.”

100 Similarly, the Act makes no provision for the PCA (or any other officer, or, indeed a court) to set aside an apparently regular s 81 notice on the grounds that it has been issued in error.

101 There is no error, jurisdictional or otherwise, of law in the first challenged decision. There is therefore no occasion to make any order quashing that decision – or any of the orders or declarations sought in the amended summons.

The second decision

102 The second challenged decision is that of Assessor Curtis made under s 92(1)(b). Section 92(1)(b) permits a certificate of exemption to be issued where a claims assessor has made a preliminary assessment of the claim, and has determined (with the approval of the PCA) that it is not suitable for assessment under Pt 4.4. This may occur even where liability has been wholly admitted.

103 Chapter 14 of the Guidelines makes provision with respect to the determination whether a claim is unsuitable for assessment. Clause 14.16 sets out (non-exhaustively) the circumstances to be taken into account. The first of these is whether the claim is exempt by reason of any of the circumstances set out in cl 8.11 – ie where the insurer denies liability. Others include the extent of conflict between the claim and the response by the insurer; the existence of complex legal or factual issues; the existence of complex issues of quantum or of assessment including, but not limited to, major or catastrophic, spinal or brain injury claims; the existence of other complex issues, for example of non-economic loss claims; the existence of complex issues of causation of injuries and disabilities; whether the claimant or a witness (considered to be material) resides outside NSW; whether the claimant or insurer seeks to proceed against one or more “non CTP” parties; and whether the insurer makes an allegation that a person has made a false or misleading statement in a material particular in relation to injury loss or damage.

104 The general tenor of ch 14 is that relatively straightforward claims are to be dealt with by the assessment process. Those involving levels of complexity (of a variety of kinds) ought to be dealt with judicially. A claims assessor (under the supervision of the PCA) is given the discretion to make a judgment about the suitability (or unsuitability) of a claim for assessment under the non-curial process.

105 After the PCA’s decision with respect to s 92(1)(a), the claim was returned to Assessor Curtis for assessment. Again, the plaintiff vigorously sought exemption.

106 Assessor Curtis also gave detailed reasons. He, like the PCA, set out a short history of Mr Erturk’s claim, making specific reference to the plaintiff’s application to the PCA and its fate. He noted the written submissions provided by both parties, which he said he had carefully considered.

107 He also made express reference to cl 14.16 of the Guidelines, noting that he was not limited by the matters there listed.

108 I now set out paras 12, 13, 14, 15 and 16 of his reasons. Each is alleged, by the plaintiff, to bespeak error:

“12. The arguments put forward by the Insurer here seem to me to amount to an appeal from the PCA’s decision in the guise of a section 92(1)(b) Application and clearly I am not the appropriate ‘forum’ for such a process.

13. As it stands I have before me a relatively straightforward claim for damages with typical areas of dispute as to causation, need and quantum, the liability status of which is that of ‘ an admission of fault with no allegation of contributory negligence ’.

‘

The insurer argues that this claim is therefore not suitable for Assessment because it contains a complex legal issue. Of course should the claim be exempted under Section 92(1)(b) that issue will never face the courts. ‘

Gabriele

’ is authority for the point that a Section 81 Notice has no added significance for the courts and what is relevant to the courts is the admission contained in the notice and such an admission can be/is simply an out of court admission which can be departed from in the insurer’s defence to court proceedings … without leave of the court

.’

15. The insurer’s submissions that the question as to whether the insurer can be held ‘ to the mistake of admission in circumstances where the mistake has been clearly and forthrightly explained gives rise to some complex legal issues, which are appropriate for determination by the court ’ brings with it the implication that it is permissible to ‘ look beyond or behind the Section 81 Notice to examine the merits or motives of the decision that is the subject of the notice ’ which is not a matter I can be concerned with as the PCA has already determined that issue. Insofar as the [assessment process] is concerned the liability status of the claim is one of ‘ admission of fault with no allegation of contributory negligence ’.

109 In written (and oral) submissions it was contended on behalf of the plaintiff that Assessor Curtis was wrong in holding that the plaintiff’s application before him was in the nature of an appeal from the PCA’s earlier determination; that he wrongly characterised the “liability status” of Mr Erturk’s claim; and that he wrongly considered himself bound by the earlier determination of the PCA and therefore failed to consider the validity or effectiveness of the first s 81 notice and failed to look behind that notice, and that in this he failed to take into account relevant considerations.

110 Recourse to the written submissions put on behalf of the plaintiff to Assessor Curtis demonstrates that his characterisation of the plaintiff’s application as a disguised appeal from the decision of the PCA was entirely justified. Repeatedly, throughout those submissions, reference was made to the exemption sought under s 92(1)(a) and to the plaintiff’s belated attempt to deny liability. Repeatedly, throughout the written submissions, it was asserted that liability is denied, that negligence on the part of the insured driver is denied, and that the insured driver was not at fault. Assessor Curtis was correct to perceive this as an attempt to re-agitate the issues that had been agitated in the application to the PCA. It is of some significance that cl 8.11 requires the PCA to issue a certificate of exemption under s 92(1)(a) when satisfied that, at the time of consideration, the claim involves one or more of the specified circumstances. It does not, on my reading of it, permit a claims assessor to engage in the same process.

111 A proper reading of the submissions put to Assessor Curtis shows that, taken as a whole, they challenged the decision made by the PCA, and sought to have it reviewed by Assessor Curtis.

112 The plaintiff also put to Assessor Curtis that the claim involved complex legal issues. In paragraph 15, Assessor Curtis rejected that. In rejecting it, he was correct. The “complex legal issues” put to the assessor involved the claim on the part of the plaintiff that either the PCA or Assessor Curtis could excuse it from the consequences of its error in issuing the s 81 notice. It was not Mr Erturk’s claim that involved complex legal issues; it was the plaintiff’s attempt to escape the consequences of its error.

113 I have set out above a paraphrase of the matters which could warrant the issue of an exemption certificate under s 92(1)(b). These are all concerned with the nature of a claimant’s claim.

114 In single-mindedly, even intransigently, focussing its attention upon the s 92(1)(a) application, the plaintiff failed to address any submissions to the issues relevant to s 92(1)(b) and cl 14.16. This may be because it correctly recognised that the claim was otherwise “relatively straightforward” and therefore not one which was not suitable for assessment other than as a contest on liability. Or it may be that it simply concentrated its attention on the wrong issue. In either case, it has not now demonstrated any error on the part of Assessor Curtis.

The third decision

115 The third decision is that of Assessor Curtis quantifying Mr Erturk’s claim. As I have mentioned above, it is not suggested that there was any identifiable error in the approach taken by him to this decision. The challenge to that decision rested wholly upon the outcome of the challenges to the two earlier decisions. Those challenges having failed, the third must meet a similar fate.

116 The consequence is that the amended summons must be dismissed with costs.

**********

Actions

Download as PDF Download as Word Document

Citations

CIC Allianz Insurance Ltd v Erturk [2010] NSWSC 302

Most Recent Citation

Allianz Australia Insurance Limited v Harrison [2013] NSWSC 1211

Cases Citing This Decision

2

QBE Insurance (Australia) Ltd v Mordue [2015] NSWCA 380

Allianz Australia Insurance Limited v Harrison [2013] NSWSC 1211

Cases Cited

4

Statutory Material Cited

2

Checchia v Insurance Australia Ltd trading as NRMA Insurance [2009] NSWSC 1005

Kirk v Industrial Court of New South Wales [2010] HCA 1

The Nominal Defendant v Gabriel [2007] NSWCA 52

CITATION:	CIC Allianz Insurance Ltd v Erturk & Ors [2010] NSWSC 302
HEARING DATE(S):	8 March 2010
JUDGMENT DATE :	21 April 2010
JURISDICTION:	Common Law
JUDGMENT OF:	Simpson J
DECISION:	Amended summons dismissed with costs.
CATCHWORDS:	ADMINISTRATIVE LAW – judicial review – Motor Accidents Compensation Act 1999 – claims resolution procedure – claims exempt from assessment procedure – admission of liability – admission based on mistake of fact – medical assessment – purported withdrawal of admission – no statutory provision for withdrawal of admission – amended notice issued – application for exemption – jurisdictional error – error of law on the face of the record – Supreme Court Act 1970 s 69 – no error of law established
LEGISLATION CITED:	Motor Accidents Compensation Act 1999 Supreme Court Act 1970
CATEGORY:	Principal judgment
CASES CITED:	Checchia v Insurance Australia Ltd trading as NRMA Insurance [2009] NSWSC 1005 Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of NSW [2010] HCA 1 QBE Insurance v Motor Accidents Authority [2008] NSWSC 434 The Nominal Defendant v Gabriel [2007] NSWCA 52; 71 NSWLR 150
PARTIES:	CIC Allianz Insurance Ltd (Plaintiff) Baha Erturk (First Defendant) Motor Accidents Authority of New South Wales (Second Defendant) Principal Claims Assessor of the Motor Accidents Authority of New South Wales (Third Defendant) Mr Paul Curtis, in his capacity as a Claims Assessor of the Motor Accidents Authority of New South Wales (Fourth Defendant)
FILE NUMBER(S):	SC 2009/298139
COUNSEL:	M A Robinson (Plaintiff) B Dooley SC/F Curran (First Defendant) Submitting Appearance (Second, Third and Fourth Defendants)
SOLICITORS:	Moray & Agnew (Plaintiff) Carters Law Firm (First Defendant) I V Knight, Crown Solicitor (Second, Third and Fourth Defendants)