Alam v Allianz Australia Insurance Limited

The facts

1. The background to the present application is as follows. The claimant was involved in a motor vehicle accident on 3 February 2016. He made a claim against the insurer for damages as a result of injuries sustained in the accident. Dr Takyar, a medical assessor appointed under s 59 assessed his whole person impairment at 24% and issued a certificate to that effect. The insurer instructed its solicitor to lodge an application for review pursuant to s 63 of the Act.
2. Because of the insurer's solicitor's oversight, the application was not lodged within 30 days of receipt, being the time specified in the Medical Assessment Guidelines 2008 (the Guidelines). By letter dated 5 October 2017, the insurer's solicitor applied to the Proper Officer for an extension of time. The Proper Officer sent the insurer's solicitor's letter to the claimant's solicitor by email. The claimant's solicitor was away and had neither set up an "out of office" response to emails received in his absence nor arranged for them to be monitored while he was away. As a result the claimant's solicitor did not see the Proper Officer's email until his return and the Proper Officer was not made aware of his absence.
3. In the mistaken belief that the reason the claimant's solicitor had not responded was because he did not oppose the extension of time, the Proper Officer wrote to the parties by email dated 16 October 2017 as follows: "I refer to my email below. I have not had a response from Danawe Lawyers. Given the circumstances as described by [the insurer's solicitor], I am prepared to accept on this occasion that exceptional circumstances exist in that their oversight should not preclude the insurer from lodging a review application. Any such review application must be received by MAS by 23 October 2017."
4. On 18 October 2017, following receipt of the letter from the Proper Officer, the defendant's solicitor filed the insurer's application for review pursuant to s 63(1). By letter dated 20 October 2017 the Proper Officer informed the parties that the insurer's application for review had been received and directed the claimant to file a reply by 17 November 2017.
5. When the claimant's solicitor returned from leave, he saw the email of 16 October 2017. On 24 October 2017, he wrote to the Proper Officer in response to the insurer's solicitor's letter of 5 October 2017. The substance of this letter was that the matters set out in the letter of 5 October 2017 did not warrant an extension of time since a solicitor's oversight could not amount to "exceptional circumstances" within the meaning of the Guidelines (set out below). The claimant's solicitor described it as "an excuse, and an exceptionally weak one, akin to 'the dog ate my homework.'" He also took exception to the Authority's sending him correspondence by email, having indicated in a standard form used by the Authority that it was not his preferred form of communication.
6. The Proper Officer responded to this letter on 16 November 2017 (as she had been away in the intervening period) as follows: "Initially, my apologies for the lengthy delay in responding to your request. Secondly, I again apologise for responding by email (which I understand is not your preferred method of communication) however, in the interests of expedition, I hope this is acceptable. The reason I accepted the insurer representative's request for an extension of time to lodge a review application on the assessment of Assessor Takyar was, essentially, so that the insurer was not disadvantaged due to an oversight on behalf of their representative. While I acknowledge that you were not contacted by your preferred method when requesting submissions on this request, as there was no response by the due date, I approved the request. While you may not agree with my reasoning for the extension of time, I have often given extensions to claimant's representatives who have missed review application deadlines, so as to not disadvantage the claimant. The same consideration has here been given to the insurer. As such, I do not consider my decision of 16 October 2017 to extend the deadline to be unreasonable and I do not intend to quash it in accordance with the Bhardwaj principle. I note that the insurer's representative has since lodged a MAS 5A on 18 October 2017 and the MAS 5R is currently due to be received on 17 November 2017. Since there has been a delay on my behalf in advising you of my decision regarding the Bhardwaj request, I will extend the time for you to provide the MAS 5R in response by 20 days from today to 14 December 2017. The Proper Officer's decision on whether to refer the matter to a Medical Review Panel will now be due on 11 January 2018. Again, my apologies for the delay in advising you of this."

Relevant statutory provisions

1. Section 63 relevantly provides: "63 Review of medical assessment by review panel (1) A party to a medical dispute may apply to the proper officer of the Authority to refer a medical assessment under this Part by a single medical assessor to a review panel of medical assessors for review. (2) An application for the referral of a medical assessment to a review panel may only be made on the grounds that the assessment was incorrect in a material respect. . . . (3) The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least 3 medical assessors, but only if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application. (3A) The review of a medical assessment is not limited to a review only of that aspect of the assessment that is alleged to be incorrect and is to be by way of a new assessment of all the matters with which the medical assessment is concerned. (4) The review panel may confirm the certificate of assessment of the single medical assessor, or revoke that certificate and issue a new certificate as to the matters concerned. . . . (7) The Motor Accidents Medical Guidelines may limit the time within which an application under this section may be made."
2. The Guidelines, which were issued pursuant to s 44, provide that the Proper Officer may dispense with the formal requirements in the Guidelines after advising the parties to the dispute and considering any submissions by the parties: cl 1.5. "Reasons" are defined to mean reasons under s 61(9) for any finding by an Assessor in a certificate: cl 1.6.31. "Review" is defined to mean a review of a medical assessment by a panel of medical assessors under s 63. The Guidelines provide that the objects of the Medical Assessment Service (MAS) set out in cl 1.14 should be used as an aid to the interpretation of the Guidelines. Clause 1.14.2 identifies as an object: "to assess medical disputes fairly and according to the substantial merits of the application with as little formality and technicality as is practicable and minimising cost to the parties."
3. Clause 1.16 of the Guidelines relevantly provides that the Proper Officer must have regard to the objects of MAS, in addition to the objects of the Act, in exercising functions and interpreting the provisions of the Guidelines.
4. Chapter 16 of the Guidelines provides that either party to a dispute may apply for review of an assessment of a single medical assessor once a certificate has been issued as to the degree of permanent impairment. Clause 16.3.2 provides that an application for review must be lodged within 30 days after the certificate was sent by MAS to the parties. Clause 16.4 provides that an application for review lodged out of time will not be considered except as provided for by 16.5. Clause 16.5.3 provides that the Proper Officer may extend time to lodge an application for review only if he or she "is satisfied that exceptional circumstances exist that justify the lodgement of a late application, having regard to the submissions of the parties."
5. Clause 16.15 requires the Proper Officer to "advise the parties as to whether the application is accepted and will be referred to a Review Panel or is dismissed, supported by a brief statement of reasons, within 5 days of considering the application." It was common ground that cl 16.15 applies to a decision under s 63(3) to refer the matter if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application.

The grounds of review

1. The grounds of review as alleged in the summons are: "(a) The Proper Officer misdirected herself as to the meaning of 'exceptional circumstances' in clause 16.5.3 and misconstrued and misapplied 'exceptional circumstances' in her purported application of, and determination under, clause 16.5.3. As a result, the Proper Officer's finding that "exceptional circumstances" existed erred; (b) The Proper Officer failed to state reasons as to the test being applied by her in the determination of whether "exceptional circumstances" existed; (c) The Proper Officer failed to accord the Plaintiff procedural fairness because the Proper Officer did not take into account the Plaintiff's submissions in the application for an extension of time under clause 16.5.3. The Proper Officer communicated by email to the Plaintiff's Solicitor who was on leave and the Proper Officer treated the absence of a response from the Plaintiff's Solicitor as evidence of no opposition to the application for an extension of time under clause 16.5.3. The Proper Officer communicated by email to the Plaintiff's Solicitor in circumstances where the Plaintiff's Solicitor had earlier duly informed the Second Defendant and the Proper Officer that it would not accept communication by email; (d) The Proper Officer took into account an irrelevant consideration in that the Proper Officer took into account the Proper Officer's treatment of the absence of a response from the Plaintiff's Solicitor as evidence of no opposition to the application for an extension of time under clause 16.5.3; (e) The Proper Officer made the decision on 16 October 2017 to extend time under clause 16.5.3 only on the basis of the Proper Officer treating the absence of a response from the Plaintiff's Solicitor as evidence of no opposition to the application for an extension of time under clause 16.5.3, and the Proper Officer did not consider whether 'exceptional circumstances' existed. The Proper Officer only considered the question of whether 'exceptional circumstances' existed after 16 October 2017 and when providing the reasons dated 16 November 2017; and (f) The Proper Officer's finding that 'exceptional circumstances' existed was legally unreasonable."
2. The insurer opposed the relief sought on three bases. First, it contended that the decision to extend time was not amenable to judicial review because it did not have a discernible effect on legal rights. Secondly, it submitted that, while the decision of 16 October 2017 was affected by failure to accord procedural fairness, the Proper Officer had rectified the deficiency by according procedural fairness and had made a valid decision on 16 November 2017 after considering the claimant's submissions. Thirdly, it submitted that it was open to the Proper Officer to consider that there were "exceptional circumstances" which warranted the extension of time.

Alleged lack of procedural fairness: grounds (c) and (d)

1. I propose first to consider the question whether the decisions made on 16 October 2017 and 16 November 2017 involved jurisdictional error on the grounds of lack of procedural fairness.
2. It was common ground that the Proper Officer had failed to accord procedural fairness to the claimant when she made the decision on 16 October 2017 without having heard from the claimant's solicitor. The effect of this concession is that the power under cl 16.5.3 of the Guidelines was not fully exercised when the Proper Officer made the decision on 16 October 2017. The Proper Officer was entitled to correct the error by considering the matter afresh once she had received the claimant's solicitor's response: Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597; [2002] HCA 11 (Bhardwaj) at [13]-[14] (Gleeson CJ); [52]-[53] (Gummow and Gaudron JJ); [153]-[155] (Hayne J); [163]-[165] (Callinan J). The question is whether the Proper Officer did correct the error on 16 November 2017.
3. The claimant submitted that the Proper Officer was obliged to "quash" her own decision and re-make the decision on 16 November 2017. This analysis is not consistent with Bhardwaj. What occurred on 16 October 2017 was that the Proper Officer did not fully perform the task she was required to perform under cl 16.5.3 because (as was common ground) she had not accorded procedural fairness to the claimant. Thus there was no valid exercise of jurisdiction and therefore nothing to set aside. In any event, the Proper Officer, as an administrative decision maker, had no power to set aside or quash her own decisions.
4. It was common ground that when she wrote to the parties on 16 November 2017, the Proper Officer had considered the claimant's solicitor's letter of 24 October 2017 and the arguments he had put, including that a solicitor's oversight could not amount to exceptional circumstances. It is plain from the wording of her letter, that the Proper Officer, after hearing from both parties, did consider there to be exceptional circumstances and decided to grant the extension of time. I am satisfied that procedural fairness was accorded before the extension was granted on 16 November 2017 and that the decision cannot be impugned on that basis.
5. Further, I reject the contention that the Proper Officer took into account an irrelevant consideration on 16 November 2017: namely that the claimant's solicitor had not provided a response by 16 October 2017. This circumstance was the reason why the Proper Officer was considering the matter again. By the time the Proper Officer considered whether to grant an extension of time on 16 November 2017, she was well aware that the explanation for the earlier lack of response from the claimant's solicitor was that he had not read the email seeking his response, and not because he did not oppose the extension of time.

Alleged legal unreasonableness of the decision: grounds (a) and (f)

1. The next question is whether it was open to the Proper Officer to be satisfied that there were "exceptional circumstances" which warranted an extension of time. Mr Romaniuk SC, who appeared with Ms Holz for the claimant, contended that a legal representative's oversight could not amount to exceptional circumstances and that the decision was, accordingly, legally unreasonable in the sense used in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 and ought be set aside. He submitted that, by focussing on oversight resulting in disadvantage to the insurer, the Proper Officer imposed an "incredibly low threshold". He also contended that the Proper Officer was obliged, and failed, to consider the disadvantage that would be suffered by the claimant if the extension were granted: namely, that the 24% whole person impairment would be subject to review if the Proper Officer reached the state of satisfaction specified in s 63(3).
2. It is plain from the wording of the Guidelines that the question whether circumstances are exceptional is one for the Proper Officer. I note that cl 16.5.3 does not envisage a balancing exercise. Whether an oversight of a time limit is, or could be in any given case, exceptional is, accordingly, a matter for the Proper Officer, who was obliged, having regard to cl 1.14.2 of the Guidelines, to construe the Guidelines "fairly and according to the substantial merits of the application with as little formality and technicality as practicable and minimising cost to the parties". The focus on the "substantial merits of the application" indicates that "exceptional circumstances" ought not be construed too narrowly. Too narrow a view of what is "exceptional" would tend to shut out a party from being entitled to have its application considered by the Proper Officer, as gate-keeper, under s 63(3). I am not persuaded that there was any legal unreasonableness. It was, in my view, open to the Proper Officer to be satisfied, in accordance with cl 16.5.3 of the Guidelines, that exceptional circumstances existed that justified the lodgement of a late application.
3. Further, the only "test" to be applied is whether the Proper Officer "is satisfied that exceptional circumstances exist that justify the lodgement of a late application, having regard to the submissions of the parties." Clause 16.5.3 of the Guidelines requires the Proper Officer to make an evaluative judgment on this matter. No test as to what amounts to "exceptional circumstances" needs to be formulated since this is peculiarly a matter for the Proper Officer's judgment in the circumstances of the particular application.

Alleged failure to consider whether "exceptional circumstances" existed at the relevant time: ground (e)

1. Ground (e) seems to allege that the Proper Officer considered the question of exceptional circumstances only on 16 November 2017. However, the letter of 16 October 2017 indicated that she considered the insurer's solicitor's oversight to be an exceptional circumstance. What occurred on 16 November 2017 was that the Proper Officer, after considering the submissions made by the claimant's solicitor, maintained her view that exceptional circumstances existed which justified the late lodgement of the insurer's application for review.

Alleged failure to give reasons as to the test to be applied concerning "exceptional circumstances": ground (b)

1. Mr Romaniuk contended that the Proper Officer was obliged to give reasons to the parties for granting the extension of time to the insurer. He submitted that, although cl 16.5 applied only to the Proper Officer's state of satisfaction under s 63(3) that there was reasonable cause to suspect that the medical assessment was incorrect in a material respect, I should infer an obligation to give reasons from the wording of cl 16.5. Mr Romaniuk did not identify any other Guideline or statutory provision which would impose such an obligation on the Proper Officer.
2. There is no general rule of common law or principle of natural justice that requires reasons to be given for administrative decisions: Public Service Board of New South Wales v Osmond (1986) 159 CLR 656; [1987] HCA 7. I do not consider that cl 16.5 can be construed as applying beyond its terms. In some cases an obligation to give reasons can be implied from the statutory context and the nature of the functions imposed on a decision-maker: see the discussion in Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284.
3. However, even if the Proper Officer were obliged to give reasons for her decision to extend time on 16 November 2017, I consider the reasons she has given to be sufficient to explain her decision. It is therefore not necessary to decide whether the statutory context requires the Proper Officer to give reasons. It is plain that she considered the explanation for the delay given by the insurer's solicitor and the response of the claimant's solicitor. The Proper Officer granted the extension of time "so that the insurer was not disadvantaged by due to oversight on behalf of their representative". I am not persuaded that the Proper Officer did other than consider the application lawfully. She did not imply in her decision that any oversight would give rise to an extension, merely, that it did in the present case.

Further matters

1. As none of the grounds has been made out it is not necessary to decide whether the Proper Officer's decision to extend time would be amenable to judicial review in accordance with the principles articulated by the High Court in Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 at 159-160; [1996] HCA 44 and considered in such cases as Dominice v Allianz Australia Insurance Ltd [2017] NSWCA 171; (2017) 81 MVR 249 at [7] (Basten JA). Nor is it necessary to resolve the question of the juridical status of the Guidelines which Leeming JA raised, obiter, in Ali v AAI Ltd [2016] NSWCA 110; (2016) 75 MVR 502 at [85]-[87].

Costs

1. Mr Rewell SC, who appeared for the insurer, and Mr Romaniuk accepted that there was no reason to depart from the general rule that costs follow the event: Uniform Civil Procedure Rules 2005 (NSW), r 42.1. Accordingly, I propose to order the claimant/plaintiff to pay the insurer/first defendant's costs of the proceedings.

Orders

1. For the reasons given above, I make the following orders: 1. Summons dismissed. 2. Order the plaintiff to pay the first defendant's costs of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 August 2018