IAG Limited v Priestly

In this matter, IAG Limited sought judicial review of an assessment of damages awarded to the respondent, Mr Priestly, under section 94(4) of the Motor Accidents Compensation Act 1999 (NSW). Mr Priestly had suffered personal injuries in a motor accident and claimed compensation for economic loss. The Administrative Decisions (Judicial Review) Act 1977 (NSW) was invoked to challenge the legality of the assessment, with IAG arguing that the assessment was flawed due to an error of law on the face of the record. Specifically, IAG contended that the assessor had erred by applying a buffer to the assessment of economic loss without providing reasons for this approach, when an evidence-based calculation was available.

The court was required to determine whether the assessment was legally flawed due to the failure to provide reasons for the use of a buffer when an evidence-based calculation was available. The court considered whether the lack of reasons amounted to an error of law that rendered the assessment invalid. In assessing this, the court referred to relevant principles of administrative law, particularly focusing on the need for reasons to be provided where a significant departure from established methods of calculation occurs.

The court found that the failure to provide reasons for adopting a buffer approach, when an evidence-based calculation was available, constituted an error of law on the face of the record. The court noted that the reasons for adopting a particular method of assessment are critical, especially when the chosen method deviates from established practices. As such, the court concluded that the assessment was flawed and set aside the decision. The matter was then remitted to the original decision-maker, or a different assessor, for redetermination in accordance with the law.