Insurance Australia Limited trading as NRMA Insurance v Duran

[2019] NSWSC 489

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Insurance Australia Limited trading as NRMA Insurance v Duran [2019] NSWSC 489
Hearing dates:	22 May 2018
Decision date:	01 May 2019
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Summons dismissed with costs
Catchwords:	ADMINISTRATIVE LAW – judicial review – assessment of damages under Motor Accidents Compensation Act 1999 (NSW) – whether assessor failed to respond to substantial clearly articulated argument put by insurer – requirement to establish alleged failure amounted to constructive failure to exercise jurisdiction – whether assessor failed to comply with s 126 of the Act – adequacy of reasons
Legislation Cited:	Motor Accidents Compensation Act 1999 (NSW), ss 62(1)(b), 94, 95(2), 122(3), 126 Supreme Court Act 1970 (NSW), s 69
Cases Cited:	AAI Ltd trading as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229; 77 MVR 348 AAMI Ltd v Ali [2012] NSWSC 969 Ali v AAI Limited [2016] NSWCA 110; 75 MVR 502 Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; 61 MVR 443 Allianz Australia Insurance Ltd v Habib [2015] NSWSC 1719; 73 MVR 412 Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 Allianz Australia Insurance Ltd v Sprod (2012) 81 NSWLR 626; [2012] NSWCA 281 Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 IAG Limited v Sleiman [2017] NSWSC 1346; 82 MVR 1 Insurance Australia Limited v O’Shannessy [2015] NSWSC 1047; 72 MVR 1 NRMA Insurance Limited v Mulcahy [2017] NSWSC 1499; 82 MVR 285 Penrith City Council v Parks [2004] NSWCA 201 Rodger v De Gelder [2015] NSWCA 211; 71 MVR 514 Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 Zahed v IAG Limited t/as NRMA Insurance [2016] NSWCA 55; 75 MVR 1
Category:	Principal judgment
Parties:	Insurance Australia Limited trading as NRMA Insurance (plaintiff) Ruth Duran (first defendant) Gary Victor Patterson, in his capacity as a claims assessor of State Insurance Regulatory Authority of NSW (second defendant) State Insurance Regulatory Authority (third defendant)
Representation:	Counsel: J Gumbert (plaintiff) M Robinson SC, C Thompson (defendants)   Solicitors: Gillis Delaney Lawyers (plaintiff) Carroll & O’Dea Lawyers (first defendant) Crown Solicitor’s Office (second and third defendants)
File Number(s):	2018/55140
Publication restriction:	None

Judgment

1. HER HONOUR: Ruth Duran was injured in a motor vehicle accident while she was driving home from work on 14 February 2012. The accident occurred when Ms Duran was making a right hand turn while facing a green light. A four-wheel drive travelling on the road to her left failed to stop at a red light and collided with the passenger side of Ms Duran’s car as she was making the turn. Ms Duran’s car was hit with enough force to push it into the adjacent lane. She was able to get out of the car on her own but developed pain in her neck, shoulders and back the following day.

2. Ms Duran brought a claim for damages which was governed by the Motor Accidents Compensation Act 1999 (NSW). A helpful summary of the scheme created by that Act for the resolution of disputes between claimants and insurers is contained in the decision of Beech-Jones J in AAMI Ltd v Ali [2012] NSWSC 969 at [3]-[15] which I gratefully adopt. Ms Duran’s claim was insured by NRMA Insurance Australia Ltd. The insurer admitted liability but disputed the extent of the injuries and disabilities Ms Duran claimed to have suffered. The claim was accordingly assessed by the Claims Assessment and Resolution Service (CARS) in accordance with s 94 of the Act.

3. The assessor issued a certificate as required by s 94(4) assessing damages in the sum of $422,907.59 made up as follows:

Non-Economic Loss   

$Nil

Economic losses

   Past loss of earnings

$192,700.00

   Future loss of earnings

$110,841.09

   Past treatment   

$ 32,558.50

   Future treatment

$ 25,000.00

   Past gratuitous care

$ 31,808.00

   Future gratuitous care

$ 30,000.00

   Past commercial care   

$Nil

   Future commercial care

$Nil

   Interest

$Nil

   Other   

$Nil

Total of economic losses and non-economic losses   

$422,907.59

Reduction for contributory negligence

$Nil

TOTAL DAMAGES ASSESSED

$422,907.59

4. The insurer seeks judicial review of that decision invoking this Court’s supervisory jurisdiction under s 69 of the Supreme Court Act 1970 (NSW). It is trite that the Court has no authority to review the merits of the assessor’s decision; the discretion to intervene is enlivened only where material error of law on the face of the “record” of the proceedings before the assessor is established or where a decision is infected by jurisdictional error. Such error aside, the assessment is binding on the insurer: s 95(2) of the Motor Accidents Compensation Act. In oral submissions, the insurer noted that there is no right of appeal against such an assessment and that “the only relief that the insurer can seek is in this Court”. That of course is not to be seen as an encouragement to strain the notion of jurisdictional error beyond its proper bounds. The scheme contemplates that the insurer will be bound by factual findings made within the assessor’s jurisdiction.

5. The summons specifies four grounds of review as follows:

1. The claims assessor failed to respond to substantial, clearly articulated arguments made by the plaintiff (ground 3(a) in the summons).

2. The claims assessor failed to perform his statutory duty pursuant to s 126 of the Act (ground 3(b) in the summons).

3. The claims assessor failed to provide adequate or lawful reasons for his decision (ground 3(c) in the summons).

4. The decision is affected by legal unreasonableness (ground 3(d) in the summons).

Failure to respond to substantial and clearly articulated arguments

6. Ground 3(a) in the summons asserts that the claims assessor failed to respond to substantial, clearly articulated arguments made by the insurer. It is important to recognise that the Court’s authority to intervene on a ground stated in those terms is enlivened only where the failure alleged amounts to jurisdictional error. It has been recognised that a failure to respond to a substantial argument may amount to jurisdictional error because it entails a failure to accord procedural fairness, or a constructive failure to exercise jurisdiction, or both: AAI Ltd trading as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229; 77 MVR 348 at [52] (Meagher, Simpson and Payne JJA). In the present case, ground 3(a) was framed as jurisdictional error consisting in a constructive failure to exercise jurisdiction.

7. The insurer’s argument was founded on the decision of the Court of Appeal in Rodger v De Gelder [2015] NSWCA 211; 71 MVR 514. In that case, a ground framed as failure “to respond to a substantial argument based on evidence” was upheld at [109] per Gleeson JA; Macfarlan and Leeming JJA agreeing at [1] and [119] respectively. As revealed by the careful analysis of the nature of that ground at [88]-[96] of the judgment of Gleeson JA (particularly at [95]), that was because the Court was satisfied that the Panel’s failure to engage with the evidence and the argument based on that evidence revealed a constructive failure to exercise jurisdiction. Rodger v De Gelder is not authority for the proposition that every failure on the part of an administrative decision-maker to respond to a “substantial and clearly articulated argument” will vitiate the decision.

8. In order to determine whether there has been a constructive failure to exercise jurisdiction, the identification of an argument that was not explicitly addressed in the reasons for decision may be a first step. But there is more to the task for this Court. The nature of that task was analysed in the remarks of Basten JA in Allianz Australia Insurance Limited v Cervantes [2012] NSWCA 244; 61 MVR 443 at [19 ]-[22]. Those remarks may have been obiter but were approved by the Court in Rodger v De Gelder at [89]. The relevant passage is lengthy but bears consideration in full:

“19   Although this ground must be dismissed for the reasons given above, it is desirable to return to the first step in the reasoning, namely identifying the legal obligation to take particular evidence into account. No case was referred to which supported a proposition expressed in these terms. In Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088, at [24], Gummow and Callinan JJ stated:

‘To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice.’

20   A similar point was made by Kirby J at [86] referring to a passage in the judgment of Gaudron J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22; 206 CLR 57 at [81] where, after noting that it was not always easy to distinguish an error of law which is jurisdictional from one that is not, her Honour continued:

‘However, the present case is, in my view, a clear case of constructive failure to exercise jurisdiction. That is because the delegate failed to consider the substance of Mr Miah's application and could only have failed to do so because he misunderstood what is involved in the Convention definition of “refugee”.’

21 Two propositions may be drawn from these statements. First, although not articulated in these terms, a constructive failure to exercise jurisdiction may arise because the statutory conferral of power has not been exercised according to its terms. Thus, in the present case, s 94 of the Compensation Act requires that a claims assessor ‘is, in respect of a claim referred to the assessor for assessment, to make an assessment of ... the amount of damages’: s 94(1)(b). It is, therefore, mandatory that the assessor address the claim and carry out the statutory function.

22   The second point is that neither Dranichnikov nor Miah went so far as to imply an obligation to consider every piece of evidence presented. Further, to refer to a report, but not to a particular passage in the report, may indicate an implicit preference for some other material which (in the absence of any no evidence ground) must be accepted as existing to support a particular conclusion. Such a course cannot constitute a failure to take into account a relevant consideration nor a failure to respond to a substantial argument: Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; 243 CLR 164 at [35].”

9. The mischaracterisation of the facts in the decision in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088 referred to in those remarks was significant. It was described by Kirby J at [88] as a mistake which was “essentially definitional”. Mr Dranichnikov had claimed to be a member of a particular Russian social group of “entrepreneurs”. The decision-maker overlooked the fact that the case had been put in that way and rejected the contention that Mr Dranichnikov met the convention definition of a refugee on the basis that there was no evidence to suggest “that there is general persecution of businessmen in Russia”. There was, however, evidence to establish that there was persecution of members of the particular group to which Mr Dranichnikov claimed to belong.

10. A consideration of those authorities reveals that care must be taken not to misconstrue the principle applied in Rodger v De Gelder as a discrete kind of jurisdictional error consisting in the bare failure to respond to a substantial argument. The task is to identify the issues the assessor was required to determine in order to discharge his or her statutory function. A failure to respond, in the reasons for decision, to a substantial argument based on the evidence may inform that task but the ultimate question must be whether, in the result, there has been a failure to exercise the jurisdiction the assessor was charged with exercising. Here, the task was to make an assessment of the amount of damages for the insurer’s admitted liability for the claim in accordance with the provisions of the Motor Accidents Compensation Act. It may be accepted that, in doing so, the assessor was required to have regard to the substance of the cases presented: Ali v AAI Limited [2016] NSWCA 110; 75 MVR 502 at [66] per Basten JA; Leeming and Simpson JJA agreeing at [74] and [100]; approved in McGiffen at [52]. However, as explained by Basten JA in Cervantes at [22], that is not to be understood as a requirement to address every piece of evidence and every argument.

11. Ms Duran made a claim for damages for injuries to her neck, thoracic spine, lumbar spine (lower back) and both shoulders. The insurer disputed that the motor vehicle accident caused injury to the left and right shoulders and the lower back. The assessor accepted the insurer’s position concerning causation of the injury to the lower back (reasons for decision at [20]) but otherwise assessed the claim on the basis contended for by Ms Duran.

12. Under ground 3(a), the summons specifies four arguments concerning those issues to which the insurer contends the assessor failed to respond, as follows:

“(i)    the alleged shoulder injuries claimed by the first defendant were not causally related to the accident;

(ii)   the opinion of MAS Assessor Meakin in respect of the causation of the injuries to the shoulders should not be relied upon by the claims assessor due to Assessor Meakin having an incorrect history regarding the first defendant’s shoulders;

(iii)   that the alleged shoulder problems (which the plaintiff submitted were unrelated to the accident) and the alleged lower back injury (which the plaintiff submitted and the claims assessor found were not causally related to the accident) should be taken into account when assessing damages;

(iv)   that the first defendant’s most likely future circumstances were it not for the accident have not been impacted by any injuries sustained in the subject accident.”

13. As to the contention that the assessor failed to respond to the insurer’s argument that the alleged shoulder injuries were not causally related to the accident (particular 3(a)(i)), the insurer submitted (written submissions, par 70):

“not only has the assessor failed to respond to the insurer's argument regarding causation of the shoulders (that the alleged shoulder injuries were not causally related to the accident), he has specifically relied on the evidence that the insurer submitted was unreliable due to incorrect history (Dr Meakin), so his decision was based on the very evidence that the insurer had argued should not be accepted.”

14. With great respect to counsel for the insurer, whose argument was thorough and articulate, the submission sought to constrain the assessor’s jurisdiction in terms I would take to have been disapproved in the decisions in Dranichnikov and Cervantes.

15. The insurer provided four sets of written submissions to the assessor. The first (dated 13 March 2015) provided the original response to the claimant’s schedule of damages. The second (dated 22 March 2016) responded to an application by Ms Duran under s 62(1)(b) for referral for a further MAS assessment. The third (dated 23 February 2017) responded to Dr Meakin’s certificate obtained following that referral and included the insurer’s response to the claimant’s schedule of damages. Finally, there was a further set of submissions (dated 27 October 2017) updating that response.

16. The insurer’s submissions in this Court listed the individual arguments made in those written submissions concerning the claim of injury to the shoulders, as follows:

“41   In the first submissions dated 13 March 2015 the insurer relied on evidence to the effect that there the claimant did not sustain a back injury or injuries to the shoulders.

42   In the submissions dated 23 February 2017 the insurer made submissions that included the following:

a)   The insurer noted that Assessor Meakin had determined that the claimant’s left and right shoulder injuries were causally related to the accident. However, the insurer noted that Dr Meakin had been given an incorrect history by the claimant (noting that the claimant specifically denied any prior history of injury to her axial spine or her right or left upper extremity, and that the claimant’s statement had been silent on that issue).

b)   The insurer noted that the claimant had relied on a typed translation of clinical records of Dr Nighjoy, in the assessment before Dr Meakin, but that the notes covered the post-accident period only.

c)   The insurer noted that a review of the claimant’s pre-accident clinical records showed complaints of pain in the left shoulder and left upper chest, as well as other physical complaints including low back pain.

d)   The insurer submitted that the accident had, at worst, temporarily aggravated a pre-existing condition in the left shoulder and caused minor injury to the right shoulder.

e)   The insurer noted that Dr Meakin appeared to have overlooked the pre-accident record of left shoulder symptoms and accepted an inaccurate verbal history from the claimant.

f)   The insurer submitted that the evidence supports a finding that prior to the accident the claimant already had underlying conditions in both shoulders with the left shoulder being already symptomatic.

g)   The insurer noted that the claimant had complained of lower back problems since 2010.

h)   The insurer submitted that the claimant’s lower back injury is not accident related.

i)   The insurer submitted that the claimant’s pre-existing conditions/symptoms in the left shoulder and lower back should be taken into account when assessing the claimant’s entitlement with respect to her claim.

43   In its further submissions dated 27 October 2017, the insurer referred again to the submissions made on 23 February 2017 (as set out above).”

17. In addition, the insurer tendered the handwritten notes made by the insurer’s solicitor of the oral submissions put at the hearing before CARS. The written submissions reproduced some 27 quotes from those notes. Senior Counsel for Ms Duran initially objected to the admission of that material on the basis that the notes are, of their nature, an incomplete record and therefore an unreliable basis for consideration of this ground. The objection was not pressed at the hearing but it was submitted that the notes are unhelpful because they are not a complete transcript of the hearing before CARS. There is much force in that submission. Shorn of their context, it is impossible to judge whether the individual notes relied upon record “substantial and clearly articulated arguments” and inappropriate to attempt to do so.

18. At the hearing in this Court, it was accepted on behalf of the insurer that the points raised in the notes do not go beyond the points itemised from the written submissions set out above. As explained below, it is possible that counsel intended to confine the concession to the issue of the shoulder injury. In any event it would, with respect, have been enough for the purpose of this ground to distil in brief synopsis the essence of the insurer’s case allegedly not addressed by the assessor, provided it was established that was the case put.

19. The insurer’s submissions analysed the assessor’s reasons for decision section by section, noting passages in which there was an absence of any reference to particular submissions put by the insurer concerning the shoulder injuries and lower back injuries. It was submitted by reference to the excerpts from the written and oral submissions put to CARS referred to above that the insurer made articulate and significant submissions regarding the causation of those injuries and the effect this should have on the determination of damages. The burden of the complaint was that the assessor did not address those arguments and so constructively failed to exercise his jurisdiction.

17. I do not accept those submissions. As submitted on behalf of Ms Duran, the decision-maker does not have to refer to each submission seriatim and expressly reject it. The task is to engage with the issues raised by the claim for damages and the case put by the insurer in response to that claim. What is required to be established in order to show jurisdictional error is a basic misunderstanding of or failure to address the case made by an applicant which results in a flaw “so serious as to undermine the lawfulness of the decision in question in a fundamental way”: Dranichnikov at [88] per Kirby J; see also Cervantes at [22]. A less rigorous approach invites merits review.

18. The assessor identified that the first issue for his determination was the medical consequences of the motor accident. He noted that Ms Duran had been “assessed and reassessed at MAS [the Medical Assessment Service] on numerous occasions” both on her own application and at the direction of the assessor. He stated (correctly) that it was not necessary for him to refer to each piece of medical evidence and that the medical evidence had been considered in detail at MAS. The insurer makes something of the next sentence of the reasons for decision, where the assessor said “I do not review” certain reports. The insurer has read those remarks to indicate that the assessor was stating he would not have regard to that material. In my view, however, all he was saying was that he would not set out the contents of those reports in the reasons for decision. There was no need to do so.

19. The assessor identified the essential dispute by reference to the history of assessments. He noted that Ms Duran was originally assessed by an MAS assessor for soft tissue injuries to the neck, both shoulders, the thoracic spine and the lumbar spine. That assessor found that soft tissue injury to the neck was caused by the motor accident but that the other listed injuries were not. Ms Duran made an application for review of that assessment which was granted. Upon review of the assessment by the Medical Review Panel, it was again found (relevantly) that the injuries to her thoracic and lumbar spine and right and left shoulder were not caused by the motor accident.

20. Ms Duran then made an application for further assessment based on the translation of her general practitioner’s notes. That application was refused by the proper officer. However, the assessor evidently took a different view as to the importance of that material and made a referral for further assessment pursuant to s 62(1)(b) of the Act. In the further assessment under taken by MAS assessor Dr Meakin, it was found that soft tissue injuries to the cervical spine, thoracic spine, and right and left shoulders were caused by the motor accident. Dr Meakin agreed with the earlier assessments that the lumbar spine injury was not caused by the motor accident.

21. Weighing against Dr Meakin’s assessment was a report dated 12 September 2016 from Dr Robert Breit, orthopaedic surgeon, to the insurer’s lawyers. The assessor noted that Dr Breit queried Dr Meakin’s finding concerning restricted shoulder movement. The assessor addressed that conflict, saying at [13]:

“Dr Breit overlooks Dr Nighjoy’s clinical notes and the restrictions of terminal range of motion recorded by MAS Assessor Meakin, or if he does not, there is an implicit assumption that Ms Duran was not making a genuine effort in her physical examination and/or is not to be believed. The insurer did not challenge Ms Duran’s credit. Dr Breit opines that there is no evidence of organic pathology. As Dr Breit largely is on his own, I reject his opinions.”

25. The assessor then addressed applications for further medical assessment of other conditions, ultimately noting that an assessor had found that Ms Duran had a combined whole person impairment of 10% which neither party had challenged and which the assessor accepted.

26. As submitted on behalf of Ms Duran it is clear from those reasons that the assessor accepted the assessment of Dr Meakin and rejected the conflicting opinion of Dr Breit on the issue of causation of the shoulder injuries. The reasons for decision record a clearly articulated path of reasoning in respect of an unexceptional assessment of competing evidence and its resolution. The second point specified in the summons in respect of ground 3(a) was that the assessor failed to respond to the argument that Dr Meakin’s opinion ought not to be relied upon because he had accepted an incorrect history given by Ms Duran (particular 3(a)(ii)).

27. To a degree, the submission begs the question (in the traditional, correct sense of that phrase; the argument assumed the correctness of the proposition contended for). Dr Meakin’s certificate (at page 939 of the affidavit of Naomi Tancred dated 2 May 2018) recorded:

“Prior to the current motor vehicle accident she reported no history of injury or painful disorder to her axial spine nor indeed her right or left upper extremity.”

28. The insurer relied on the fact that, in a hand-written note dated 15 August 2011, Ms Duran’s general practitioner had recorded that she had complained of pain in the left shoulder and the left upper chest which hurt only when she moved. The insurer’s reliance on that note to establish that Dr Meakin accepted an “incorrect history” assumed the pain recorded in the notes reflected prior “injury or painful disorder”, the very issue required to be determined. The fact that the assessor did not refer to that particular submission does not, in my view, indicate a failure to engage with a substantial aspect of the case such as to disclose constructive failure to exercise jurisdiction. It simply means the insurer lost that point.

29. In oral submissions, this point was developed as a complaint that the assessor failed to grapple with an argument that he should reject Dr Meakin’s isolated opinion that the shoulder injury was causally related to the accident and accept the multiple opinions of Dr Maxwell, the Review Panel and Dr Breit to the contrary. For that purpose, counsel for the insurer addressed the relevant reports in some detail while emphasising that the Court was not being asked to accept what the doctors said but only to understand the argument that was put. The distinction was a fine one indeed; the appropriateness of scrutinising the underlying medical reports to determine this ground may be doubted: cf Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 at [18] per Basten JA. An asserted failure to grapple with an argument as to which piece of evidence on a particular issue should be preferred has the ring of factual error dressed in the guise of a matter going to jurisdiction.

30. In any event, having regard to the manner in which the argument was (allowed by me to be) developed at the hearing, it is appropriate to address the matters raised. The assessor referred to the two reports of Dr Maxwell, describing them as “mainly of historical value”. That made sense in circumstances where Dr Maxwell had recorded that the shoulder pain “appeared to have come on at some stage after the motor vehicle accident” (his second report included a similar comment) whereas the later reliance on the general practitioner’s notes considered by Dr Meakin suggested otherwise.

31. The assessor similarly referred to the decision of the Review Panel in the context of that chronology, noting that he (the assessor) had subsequently made the referral for a further assessment because he regarded the translation of the clinical notes “as possibly providing evidence of direct injury to either or both shoulders caused by the motor accident”. As to Dr Briet, the assessor’s reasons for preferring the opinion of Dr Meakin are set out above. I am not persuaded that the assessor failed to grapple with the insurer’s case or to respond to a substantial argument on this issue.

32. The third complaint (particular 3(a)(iii)) was that, having found that the lower back injury was not causally related to the accident, the assessor then did not respond to the insurer’s submissions regarding the effect this should have on damages (particular 3(a)(iii)). Counsel for Ms Duran submitted that, having found that there was no injury to Ms Duran’s lumbar spine, the claims assessor was not required to take that alleged injury into account when assessing damages, including the claim for damages for future economic loss and past and future care. However, the insurer’s point was, rather, that the impact of the unrelated lower back injury had to be taken into account in the assessment of damages, particularly in the assumptions as to most likely future circumstances.

33. The difficulty with this aspect of ground 3(a) is that it is not established that a substantial and clear point was put on this issue that was not responded to by the assessor. The written submissions before the assessor referred to above did not raise any particular argument as to how the condition of Ms Duran’s lower back should have been factored into the assessment.

34. The notes of the oral submissions before CARS did refer to the issue of injuries unrelated to the accident in the context of the assessment of damages. I have already indicated my view as to the difficulties in resting on that material to support the present ground. For abundance of caution (and notwithstanding the concession to which I have referred at [18] above) I have considered the notes in full. That task has confirmed my apprehension that the notes provide an unsatisfactory basis for determination of this ground. For example, the written submissions rely on the following quotes (pars (w), (x) and (y)):

“No evidence knocked back b/c of her injuries and was not taken on b/c of her injuries.

When found work able to do it but they were limited w period.

Apply s 126.”

35. However, an important exchange appears to have been omitted from that extract. The full extract from the notes (as best I can read them) is as follows:

“No evidence knocked back b/c of her injuries and [had?] not taken her on b/c of her injuries.

When found work able to do it but they were limited c period.

Ass:

If agree redundant b/c of accident then prevented making award.

No    b/c could still be some loss

apply s 126”

36. The remark apparently attributed to the assessor is obscure. Assuming it is even appropriate to embark upon this task on the basis of the solicitor’s notes (which I doubt), that material has not persuaded me that any substantial, clearly articulated argument put by the insurer was not responded to by the assessor in his assessment certificate and reasons. It is simply impossible to discern, from the notes alone, how the hearing unfolded.

37. The final complaint under this ground (particular 3(a)(iv)) must fail for the same reason. Upon analysis this is a factual complaint. The insurer submitted the injuries sustained in the accident had no impact on Ms Duran’s most likely future circumstances; the assessor was satisfied that they did.

38. A separate aspect of the complaint under ground 3(a) was the failure to state assumptions for the purpose of the assessment of future economic loss. That issue is addressed in the discussion of grounds 3(b) and (c) addressed below. I am not persuaded that there was any failure to respond to a substantial argument put by the insurer such as to indicate a constructive failure by the assessor to exercise his jurisdiction.

39. Ground 3(a) must be rejected.

Grounds 3(b) and (c): failure to comply with s 126 and/or failure to give adequate reasons

40. The parties addressed grounds 3(b) and (c) together. It is convenient to adopt the same approach. As already noted, the submissions concerning the assessment of future economic loss also included a complaint of failure to address a substantial argument (under the rubric of ground 3(a)). It is important in that context to pay attention to the kind of error alleged in each case: see Kerr at [13]-[20] per Basten JA.

41. In addressing ground 3(b), the insurer submitted that “a failure to comply with s 126 constitutes legal error”. The authority cited was Kerr but no point reference was provided. As explained in Kerr at [23]-[24], s 126 requires compliance with a variety of kinds of obligations, failure to comply with which might amount to a variety of kinds of error. Section 126(1) requires that the assessor to be satisfied in the terms specified. In Insurance Australia Limited v O’Shannessy [2015] NSWSC 1047; 72 MVR 1 at [71], Beech-Jones J expressed the view that satisfaction in those terms is a “jurisdictional fact” (while noting the remarks of Basten JA in Kerr at [62] where that construction of the section is questioned). However, that is not the kind of error alleged here.

42. It is clear enough from the particulars provided in the summons that, whereas ground 3(a) asserts jurisdictional error (permitting consideration of material outside the “record”, being the argument put by the insurer to the assessor), grounds 3(b) and (c) were characterised as “legal errors” based on the content of the reasons for decision. The particulars were as follows:

“(b) The claims assessor failed to perform his statutory duty pursuant to Section 126 of the Act in that:

(i)   the claims assessor failed to set out, as he was required to do, his assumptions about the first defendant’s future earning capacity, or other events on which the damages awarded was based;

(ii)   the claims assessor failed to set out his assumptions as to the first defendant’s most likely future circumstances, were it not for the accident;

(iii)   the claims assessor failed to set out any assumptions as to the likelihood that the events might have occurred anyway, were it not for the injury.

(c) Contrary to Section 94(5) of the Act and Clause 18.4 of the SIRA claims Assessment Guidelines effective 1 May 2014 the claims assessor failed to provide adequate or lawful reasons for his decision in that his Statement of Reasons does not reveal his actual path of reasoning and does not reveal how the claims assessor in fact formed or arrived at his conclusions. In particular:

(i) the claims assessor failed to give lawful reasons for the award of future economic loss, having regard to the requirements of Section 126 of the Act;

(ii)   the decision contains internally inconsistent reasoning in that at [8] the claims assessor stated:

‘I do not review the reports of the Insurer’s first qualified Orthopaedic Surgeon, Dr David Maxwell, who examined Ms Duran a number of occasions [sic] between 2013 and February 2015.  His reports mainly are of historical value.  For the same reason, I do not review the reports of Ms Duran’s qualified Orthopaedic Specialist, Dr James Bodel, who examines Ms Duran in October 2014 but not subsequently.’

However, the claims assessor subsequently gave reasons at [25] and [42] of the decision that show apparent reliance on Dr Bodel’s report.”

43. Accordingly, it is appropriate here to confine attention to what is revealed on the face of the record (the certificate and the attached reasons).

44. The duty of an assessor to provide reasons is stated in s 94(5) of the Motor Accidents Compensation Act, which provides:

“The claims assessor is to attach a brief statement to the certificate setting out the assessor’s reasons for the assessment.”

45. The content of that requirement is addressed in the guidelines, cl 18.4 of which provides:

“The requirement to give reasons is further expanded upon in clause 18.4 of the guidelines, which provides:

18.4 A certificate under section 94 or 96 is to have attached to it a statement of the reasons for the assessment. The statement of reasons is to set out as briefly as the circumstances of the assessment permit:

18.4.1   the findings on material questions of fact;

18.4.2   the Assessor’s understanding of the applicable law if relevant;

18.4.3   the reasoning process that lead the Assessor to the conclusions made; and

18.4.4 in the case of an assessment certificate pursuant to section 94, the Assessor must specify an amount of damages and the manner of determining the amount.”

46. As explained by Leeming JA in Zahed v IAG Limited t/as NRMA Insurance [2016] NSWCA 55; 75 MVR 1 at [4], those requirements impose competing obligations to explain and to be concise, the resolution of which ought not result in an unduly demanding burden of providing reasons.

47. It is uncontroversial that, pursuant to s 122(3), the assessment was governed by the provisions of Chapter 5 of the Act, which includes s 126. Section 126 provides:

(1)     A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.

(2)     When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury.

(3)    If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.

48. The content of the requirement to give reasons in respect of such an assessment is well trodden territory. The insurer relied on Kerr at [31] where Basten JA stated that combination of sub-ss 126(1) and 126(3) “required the assessor to identify and state the assumptions about future earning capacity and other events on which the award was based”. In that context, his Honour repeated the guiding propositions stated in Livaja at [41]:

“The assumptions or events upon which a baseline may commonly be calculated include:

(a)    identification of the skills, training and experience of the plaintiff, as at the date of the accident;

(b)    the work he or she was undertaking immediately prior to the accident;

(c)    the likelihood that he or she would have continued in such employment, but for the accident;

(d)    the possibility that he or she might have obtained promotion or other benefits, but for the accident;

(e)    the age to which he or she was likely to have worked in that employment, and

(f)   the possibility that the employment would not have been continuous.”

49. The insurer also relied on the decision of the High Court in Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [55] which holds that the statement of reasons must explain the actual path of reasoning in sufficient detail to enable a court to see whether the opinion of a medical panel involves any error of law.

50. While such statements are helpful in providing an understanding of the content of the obligation to specify assumptions and provide reasons for any calculation of future economic loss, that question will always necessarily also be informed by the circumstances of the individual assessment under scrutiny. To borrow the language of Giles JA in a different context, guiding principles or propositions are “subservient” to the fact-specific objective analysis of the reasons stated: Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 at [66].

51. On behalf of Ms Duran, it was noted that the requirement for reasons of an assessor is not to the same standard as, for example, a judge. It was further noted (and is trite) that the reasons must be read as a whole and fairly.

52. It may be accepted that the assessor’s reasons set out under the heading “future economic loss” were brief. Further, he did not (as many assessors do) dedicate a separate discussion to the requirements of s 126 and it would perhaps have been preferable to adopt that course. It is convenient to set that section of the reasons out in full:

“33.   Ms Duran claims that her most likely future course, but for the motor accident, is that she would have worked 40 hours per week at $30.00 per hour until age 67 years. That is said to be $949.00 net per week. Ms Duran concedes a residual earning capacity of $450.00 net per week which I accept. That is based upon 15 hours per week. She is able to type, write and use a keyboard. The net loss of $500.00 is claimed until age 67 years. The calculation is as follows:

$500.00 x 380.1 x 85% = $161,542.00.

Future loss of superannuation is claimed at 12.63% which equates to $20,402.00. The insurer allows $15,000.00, as a buffer, inclusive of superannuation.

34.   I am mindful of what has been said in the Court of Appeal about the desirability of Claims Assessors adopting an arithmetic approach instead of a buffer, in the calculation of future economic loss. See Allianz v Cervantes (2012) NSWCA 224, Allianz v Sprod (2012) NSWCA 281 and Allianz v Shamoun (2013) NSWCA 579. Ms Duran supports a mathematical calculation or a buffer. As there is sufficient evidentiary material for me to calculate future economic loss mathematically, I will adopt that course, as the preferred method.

35.   The insurer notes that future economic loss is claimed at 40 hours per week whereas Ms Duran was working 30 hours per week prior to the motor accident. That observation is correct. Allowing 30 hours per week at $30.00 per hour equates to $900.00 gross per week or $46,800.00 gross per year. At current tax rates, that is $39,242.14 per year, after tax and Medicare Levy. That equates to $754.66 per week. Deducting the conceded residual earning capacity of $450.00 net per week leaves a continuing net loss of $304.60 net per week. The calculation of future economic loss is then made as follows:

$304.60 x 380.1 x 85% = $98,411.69

Additionally, I allow $12,429.40 for superannuation at the rate of 12.63% for which Ms Duran contends.”

53. However, that passage of the reasons must be read in the context of the whole, particularly including the opening recitation of the facts and the consideration of past economic loss.

54. As the assessment was undertaken by reference to a calculation rather than a buffer the duty to identify the assumptions underlying that calculation was enlivened: Allianz Australia Insurance Ltd v Sprod (2012) 81 NSWLR 626; [2012] NSWCA 281 at [37] (per Barrett JA; Campbell JA and Sackville AJA agreeing).

55. The insurer submitted that the assessor failed to set out the assumptions underlying the calculation (specifically, whether he accepted the assumptions contended for by Ms Duran or made his own assumptions) and any assumptions as to the likelihood that the event of Ms Duran being made redundant by her employer might have occurred in any event, or the impact of unrelated and pre-existing injuries.

56. The insurer relied on other decisions in which it has been held that there was a failure to identify and state the necessary assumptions in circumstances where the assessor accepted what was put forward by the claimant. The helpfulness of such comparisons is necessarily limited. As already explained, the evaluation of the adequacy of the reasons in any particular case will be informed by the matters in issue (and not in issue) in that case. And, as also already explained, the question is to be determined here on the face of the record (leaving aside ground 3(a)). Certainly, the authorities do not support a general proposition that an assessor can never accept the assumptions put forward by a claimant without providing an explicit reason for doing so.

57. The insurer relied on the decision of Beech-Jones J in Allianz Australia Insurance Ltd vHabib [2015] NSWSC 1719; 73 MVR 412 at [37]-[38]. In that case, his Honour noted that the assessor’s award made an assumption as to the age at which Mr Habib would have ceased work and also adopted a deduction for vicissitudes “being the percentage possibility that Mr Habib might have suffered an affectation of his earning but for the injuries in any event (s 126(2); cf Penrith City Council [v Parks [2004] NSWCA 201] at [5])”.

58. The claimant submitted that, although those assumptions were not expressly stated in the award, they could be deduced from examining the “claimant’s calculations” which had been provided to the opposing party and that that was sufficient to constitute compliance with s 126(3). Justice Beech-Jones rejected that submission, holding that it would not provide the transparency referred to by Barrett JA in Sprod at [27].

59. In the present case, the claimant did not need to resort to the contention that the assumptions could be identified from extraneous material. A number of relevant assumptions (including vicissitudes and the age at which Ms Duran would retire) were agreed and were set out in the reasons for decision.

60. The insurer also relied on the decision of Adamson J in NRMA Insurance Limited v Mulcahy [2017] NSWSC 1499; 82 MVR 285 at [58] where, referring to Habib, her Honour held that it was not enough in order to identify the reasoning process underlying a calculation of future earning capacity of some $2,500 a week to say that it was the figure put forward by the claimant’s expert. However, it is clear from a reading of the full decision that that was because acceptance of that figure required explanation in the circumstances of that case; it was higher than the weekly figure assumed for the purpose of calculating past economic loss and no explanation was provided for assuming a higher earning capacity in the future.

61. In short, the acceptance of an assumption put forward by a claimant will require greater explanation in some circumstances than others. Sometimes, the reasons for accepting an assumption underlying a calculation may be inferred from the reasons as a whole or will be obvious.

62. In my view, the assumptions made are adequately identified and the reasoning path adequately transparent in the present case. At the outset of the reasons for decision, the assessor set out the facts. Contrary to the submission put by the insurer, I am satisfied that he intended there to record facts as to which he was satisfied rather than merely recording Ms Duran’s claim. That included adequate identification of Ms Duran’s skills, training and experience as at the date of the accident and the work she was undertaking immediately before the accident. The assessor noted that she was employed on a part-time basis for 30 hours a week as an accounts manager for a company that operated beauty salons (reasons at [3]).

63. At [4] of the reasons, the assessor set out matters that had been agreed in the assessment conference which included age of retirement (67 years), length of time from assessment to retirement (9 years), the multiplier for years to date of retirement (380.1) and 15% for vicissitudes. The insurer noted at the outset of the hearing before me that the agreement as to vicissitudes did not mean that it resiled from its submissions as to likely future circumstances. So much may be accepted.

64. In identifying the assumptions made by the assessor as to the future, it is necessary to go beyond the section of the reasons appearing under the heading “future economic loss”. Some of the relevant assumptions are identified in the discussion of past economic loss. In that section of the reasons the assessor noted that Ms Duran commenced employment with Catwalk Pty Ltd in 2009 as an accounts manager and that she worked fulltime 40 hours per week at $30 per hour for the first six months and thereafter permanent part-time at 30 hours per week at $20 per hour. He then said “she hoped to return to fulltime work and intended working until age 67 years” (at [27]).

65. It is clear from the sequence of the reasons that the assessor was accepting that, uninjured, the most likely future course but for the motor vehicle accident was that she would have worked 30 hours per week at $30 per hour until the age of 67 years. He accepted that she had a residual earning capacity of $450 net per week (reasons at [33]). He also made an assessment of the likely future hours which was less than the number of hours contended for by Ms Duran.

66. The insurer submitted that the reasons disclose no findings or assumptions as to the future. In my assessment it is clear that the assessor accepted that the most likely future course was that she would have continued in the same employment or the same kind of employment. There was no real contest about that. The only specific issue to suggest otherwise was the question of redundancy. Ms Duran had been made redundant in October 2013. The assessor recorded that that occurred after the workers’ compensation insurer wanted her to increase her hours against medical advice and she found that she could not cope with working 22 hours a week. The assessor said “she thinks [the redundancy] was due to her accident-related injuries but can’t prove it”.

67. The insurer submitted, noting that the redundancy was a known fact, that it needed to be addressed in the context of the finding as to the most likely future circumstances. It was submitted that that was a matter put in issue by the insurer.

68. I do not accept that the reasons for decision are insufficient on that account. It is clear from the sequence of the reasons for decision that the assessor knew Ms Duran had been made redundant but that he was satisfied that, but for the accident, she would have continued in future work for 30 hours a week until the (agreed) age of retirement.

69. The assessor’s discussion of the most likely future course at [33] of the reasons, while brief, adequately identifies the assumptions made based on the findings as to injuries that precede that discussion. The reason for assuming 30 hours per week instead of the amount claimed is spelled out. Clearly, the assessor was otherwise satisfied that this was a case where, but for the accident, the status quo would have continued. Grounds 3(b) and (c) are not made out.

Ground 3(d): inconsistent reasoning (legal unreasonableness)

70. This ground raises a narrow point; it is a recast of particular 3(c)(ii) characterised as a different kind of error. The insurer relies on the assessor’s statement referred to above where he said “I do not review [certain reports]” coupled with the fact that he then gave reasons which showed reliance on one of those reports. The insurer submitted that the alleged inconsistency resulted in a decision that lacked evident and intelligible justification and that should accordingly be set aside for legal unreasonableness, relying on the decision in IAG Ltd t/as NRMA Insurance v Sleiman [2017] NSWSC 1346; 82 MVR 1 at [28]-[29].

71. As already indicated, in my view the argument is based on a misreading of the assessor’s decision. In saying “I do not review” the reports in question, it is clear that the assessor meant no more than that he did not propose to set out the detail of those reports in the reasons for decision. The alleged unreasonableness or lack of intelligibility is not established.

72. For those reasons, the summons is dismissed with costs.

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Amendments

02 May 2019 - incorrect date on coversheet

Decision last updated: 02 May 2019