Ibrahim v Insurance Australia Limited t/as NRMA Insurance
[2023] NSWPIC 173
•20 April 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Ibrahim v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPIC 173 |
| Claimant: | Maryam Ibrahim |
| insurer: | Insurance Australia Limited t/as NRMA Insurance |
| SENIOR Member: | Brett Williams |
| DATE OF DECISION: | 20 April 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Whether the claimant had complied with section 7.32(3) of the Motor Accident Injuries Act 2017 (2017 Act); if not, whether the proceedings should be dismissed under section 54 of the Personal Injury Commission Act 2020; where it was evident for some time that there was a dispute about the claimant’s degree of permanent impairment and her entitlement to non-economic loss; claimant referred permanent impairment dispute to the Personal Injury Commission (Commission) after she had referred her claim for damages to the Commission for assessment; Held – in order to fulfill her obligations under section 7.32(3) of the 2017 Act, the claimant should have referred the medical dispute to the Commission with due dispatch; the stood over list is not intended to be a parking lot for claims with respect to which mandatory provisions have not been complied with or basic preparatory steps undertaken; the claimant did not use her best endeavours to settle her claim before referring it for assessment; proceedings dismissed. |
| determinations made: | 1. For the purposes of s 7.32(3) the claimant failed to use her best endeavours to settle the claim before referring it for assessment under Division 7.6 of the MAI Act. 2. The proceedings are dismissed in accordance with s 54 of the PIC Act. |
BACKGROUND
Maryam Ibrahim (claimant) was injured in a motor accident on 31 December 2019 (accident). She subsequently made a claim for damages under the Motor Accident Injuries Act 2017 (MAI Act) on Insurance Australia Limited t/as NRMA Insurance (insurer).
These proceedings, by which the claimant referred her damages claim to the Commission for assessment, were commenced on 19 December 2022.
In submissions contained in its reply, the insurer argued that the proceedings should be dismissed because the claimant had failed to comply with s 7.32(3) of the MAI Act (insurer’s application). That provision states that the parties to a claim must use their best endeavours to settle the claim before referring it for assessment.
On 1 February 2023 I conducted a preliminary conference with the parties’ representatives. The insurer confirmed that its application was pressed. Its position was that, because of the claimant’s failure to comply with s 7.32(3), the proceedings should be dismissed under s 54 of the Personal Injury Commission Act 2020 (PIC Act). The claimant sought an opportunity to respond to the insurer’s application. I made directions for the provision by the parties of submissions and evidence relied on in relation to the application. The parties agreed that the insurer’s application should be determined on the papers. They also agreed that if the proceedings were not dismissed they should be referred to the stood over list.
The claimant subsequently lodged a joint bundle[1] containing all documents the parties rely on in relation to the insurer’s application. She also lodged written submissions dated 16 February 2023 addressing the application. On 6 April 2023 the insurer informed the Commission that it would not be lodging any submissions in reply to the claimant’s submissions.
[1] AD2.
ON THE PAPERS
Having considered both s 52 of the PIC Act and Procedural Direction PIC2, I have concluded that the insurer’s application can be determined on the papers. I am satisfied that sufficient information is available in connection with the application to allow me to determine it without holding a formal hearing.
RELEVANT STATUTORY PROVISIONS
The insurer argues that s 7.32(3) has not been complied with. That provision is in the following terms:
“7.32 Reference of claim
(1) A claim for damages may be referred to the Commission by the claimant or the insurer, or both, for assessment under the Division.
(2) (Repealed)
(3) Parties to a claim must use their best endeavours to settle the claim before referring it for assessment under the Division.”
In terms of the power to dismiss proceedings, s 54 of the PIC Act states as follows:
“54 Dismissal of proceedings
The Commission may at any stage dismiss proceedings before it—
(a) if it is satisfied that the proceedings have been abandoned, or
(b) if it is satisfied that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance, or
(c) for any other ground of dismissal specified in the Commission rules.”
EVIDENCE
I have considered the material contained in the joint bundle. The following is a chronology drawn from that material. The matters recorded in the chronology represent my findings with respect to the material:
· 31 December 2019 – date of accident
· 6 January 2020 – claimant’s application for personal injury benefits
· 5 February 2020 – insurer’s notice accepting liability for statutory benefits up to 26 weeks
· 27 July 2021 – reports of Dr Dias including assessment of whole person impairment (14%)[2]
· 30 July 2021 – insurer’s notice declining liability to pay statutory benefits after 26 weeks on the basis that the claimant had been assessed as having a ‘minor injury’
· 16 September 2021 – letter from claimant’s solicitor seeking concession from the insurer that the claimant was entitled to non-economic loss because her whole person impairment exceeds 10% and serving reports of Dr Dias dated 27 July 2021
· 24 September 2021 – insurer advises claimant by email that it does not concede that she is entitled to non-economic loss or that her injuries relating to the accident exceed 10% whole person impairment
· 24 September 2021 – claimant seeks internal review of insurer’s decision about non-economic loss and whole person impairment
· 14 October 2021 – internal review decision in relation to non-economic loss and whole person impairment – original decision affirmed
· 14 October 2022 – claimant’s application for damages under common law
· 19 December 2022 – damages claim referred to the Commission for assessment
· 2 February 2023 – medical assessment application lodged with the Commission by the claimant with respect to a medical dispute about the degree of permanent impairment that has resulted from the injury caused by the accident.
SUBMISSIONS
[2] Cervical spine 5%, lumbosacral spine 5%, right shoulder 3%, left shoulder 1%.
INSURER’S SUBMISSIONS
The insurer’s written submissions dated 17 January 2023 record that the claim for damages was made on 14 October 2022, and a decision with respect to liability had not been made. It is argued that the only injuries the claimant suffered as a result of the accident were minor injuries and, accordingly, no damages may be awarded to her: s 4.4 MAI Act.
The submissions state that the insurer had determined that the degree of impairment of the claimant as a result of injuries caused by the accident does not exceed 10%, and that no medical assessment has been undertaken. The submissions record that the claimant had not made any offers of settlement. The insurer argues that the application does not comply with s 7.32(3) of the MAI Act and should be dismissed.
CLAIMANT’S SUBMISSIONS
The claimant’s submissions include a narrative of relevant events that have occurred since the accident. The submissions record that the application for assessment of damages was lodged with the Commission to preserve the claimant’s rights to pursue a claim for damages within the three year period prescribed by s 6.14(2) of the MAI Act.[3]
[3] It may be that this reference is wrong, at that the claimant intended to refer to s 6.32 of the MAI Act.
Reference is made in the submissions to Procedural Direction MA1, which relates to the stood over list. It is noted that there are medical disputes pending about ‘minor injury’[4] and permanent impairment. The submissions record that s 1.3(2)(g) of the MAI Act confirms that one of the objectives of the Act is to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes. The claimant argues that it would be contrary to those objectives to dismiss the proceedings.
[4] Now ‘threshold injury’.
It is also argued that dismissing the proceedings would be contrary to the objectives of the PIC Act, that include to enable the Commission to resolve the real issues in proceedings justly, quickly, cost effectively and with as little formality as possible.
It is argued that, if the proceedings are dismissed, they will need to be recommenced and the claimant will need to provide a full and satisfactory explanation for the delay having regard to s 6.14(2) and (3) of the MAI Act. Thus, it is argued, dismissing the proceedings will delay the claim and increase the costs incurred by the claimant and insurer. I note that s 6.14(2) and (3) relate to time limits for making claims for damages, not commencing proceedings in the Commission or a court.
The claimant says that whilst the medical dispute is yet to be determined it would be unreasonable to expect the claimant to attempt to resolve her claim for damages. The claimant relies on the decision of Paget v AAI Ltd t/as Suncorp [2022] NSWPIC 650 in this regard. While it may not have been reasonable for the claimant to make an offer of settlement, in circumstances where there was a medical dispute about permanent impairment that had not been determined, there are other endeavours she could have undertaken to progress settlement before she referred her claim to the Commission for assessment so as to satisfy her obligations under s 7.32(3).
The claimant submits that it is consistent with the objectives of the MAI Act and PIC Act that the proceedings be placed into the “stood over” list, pending the finalisation of the medical dispute.
In my view, the existence of the stood over list does not excuse a party from complying with a mandatory provision in the Act. Further, the stood over list is not intended to be a parking lot for claims with respect to which mandatory provisions have not been complied with or basic preparatory steps undertaken.
DETERMINATION
BEST ENDEAVOURS
Because there was a dispute about whether or not injuries she suffered in the accident had resulted in a degree of permanent impairment that is greater than 10%, the claimant could not make a claim for damages in relation to the accident before the expiration of 20 months after the accident: s 6.14(1) MAI Act. Although the provision has been repealed (Motor Accident Injuries Amendment Act 2022 s 2(a)), it was in force when the accident occurred and until 28 November 2022, when the repeal took effect. As a consequence, the claimant was not able to make a claim for damages until 31 August 2021.
Nonetheless, it is evident that since 24 September 2021, when the insurer confirmed in writing it did not concede that the claimant was entitled to damages for non-economic loss or that her injuries relating to the accident exceeded 10% whole person impairment, there was a dispute about the degree of the claimant’s permanent impairment as a result of her accident caused injuries.
That the degree of the claimant’s permanent impairment as a result of her accident caused injuries was disputed was put beyond doubt when the internal review decision was issued by the insurer on 14 October 2021. That decision was sent by email to the claimant and her solicitors. There is no suggestion in the material before me that the claimant was not aware of the decision.
In Mammone v Insurance Australia Limited t/as NRMA [2021] NSWPIC 501 (Mammone) I canvassed authorities that address the meaning of the term ‘best endeavours’ in other legal contexts. I found at [44] that notions of reasonableness and context are the critical considerations that emerge from these authorities, and that these considerations should be applied when determining what the term ‘best endeavours’ means for the purposes of s 7.32(3). I concluded at [49] that what constituted ‘best endeavours’, for the purposes of s 7.32(3), must depend on the circumstances of each claim. I found that the provision may not require an offer of settlement to be made in every case, and that, in some circumstances, the provision of particulars and evidence in support of a claim for damages may be found to satisfy the ‘best endeavours’ requirement.
What was required of the claimant was that she do all she reasonably could in the circumstances to attempt to achieve a settlement of her claim, or to take steps that a prudent, determined and reasonable person acting in her own interests and desiring to achieve a settlement would take: Golding v NRMA [2021] NSWPIC 98 at [37].
Section 7.32(3) states that parties to a claim must use their best endeavours to settle the claim before referring it for assessment under Division 7.6. The requirement is mandatory.
The circumstances of the claim include the matters referred to earlier in these reasons at [9]. The circumstances of the claim also include that the proceedings have been commenced to stop time running: s 6.32(2) MAI Act.
I find that, in the circumstances of her claim, using her best endeavours to settle the claim before referring it to the Commission for assessment under Division 7.6 required the claimant to refer the medical dispute about her permanent impairment to the Commission with due dispatch. She was entitled to do so from the time she and her solicitors received the insurer’s internal review decision of 14 October 2021, some 14 months before the claim for damages was referred to the Commission for assessment.
I consider that a reasonable time for referring the medical dispute for assessment was within six months, and certainly within 12 months, of receiving the internal review decision. As she failed to do so within either period, and did not refer the medical dispute to the Commission for assessment until after she referred her claim for damages to the Commission for assessment, I find that for the purposes of s 7.32(3) the claimant did not use her best endeavours to settle her claim before referring it for assessment.
SHOULD THE PROCEEDINGS BE DISMISSED?
I have found that the claimant did not use her best endeavours to settle her claim before referring it for assessment. In these circumstances, the insurer submits that the proceedings should be dismissed.
The claimant argues that dismissing the proceedings would be contrary to the objects of the MAI Act and the PIC Act.
Section 54 of the PIC Act gives the Commission the power to, at any stage, dismiss proceedings before it.
Given the use of the mandatory term ‘must’ in s 7.32(3), the legislature clearly considered the requirement to use best endeavours to resolve a claim before referring it for assessment to be integral to the overall operation of the damages provisions in the MAI Act, and particularly the operation of Division 7.6. The requirement sits comfortably with the stated object of encouraging the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes.[5] Contrary to the claimant’s submission, I do not consider that applying that object to these proceedings should militate against the proceedings being dismissed. I consider that object supports my finding that the claimant should have taken reasonable steps to refer the permanent impairment dispute to the Commission before she referred her claim to the Commission for assessment.
[5] See Mammone at [57].
The claimant submits that, if the proceedings are dismissed, they will need to be recommenced and she will need to provide a full and satisfactory explanation for the delay if court proceedings are commenced. She argues that this in turn will delay the claim and increase the costs incurred by her and the insurer. This may be correct, however, dismissing the proceedings will provide the claimant (and the insurer) with an opportunity to comply with their mandatory obligations under s 7.32(3). This in turn may result in the claim being resolved, or the matters in dispute narrowed.
I find that, for the purposes of s 54(b) of the PIC Act, because they have been commenced in circumstances where there has been substantive non-compliance with s 7.32(3) of the MAI Act, the proceedings are misconceived and lacking in substance. I am satisfied that the proceedings should be dismissed, and that the dismissal of the proceedings is consistent with the guiding principle found in s 42 of the PIC Act.
Compliance with s 7.32(3) of the MAI Act is an important plank in the overall dispute resolution framework in the MAI Act. The claimant’s failure to comply with the provision, in my view, runs contrary to the just, quick and cost effective resolution of the real issues in the proceedings. This is because critical preparatory steps to narrow the issues were not taken; specifically, steps to bring about the resolution of the medical dispute about permanent impairment.
CONCLUSION
For the purposes of s 7.32(3) the claimant failed to use her best endeavours to settle the claim before referring it for assessment under Division 7.6 of the MAI Act.
The proceedings are dismissed in accordance with s 54 of the PIC Act.
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