Allianz Australia Insurance Limited v Kerr

8The plaintiff was dissatisfied with the assessment. As there is no appeal against the assessment, the plaintiff has sought to invoke this court's jurisdiction under s 69 of the Supreme Court Act 1970.

Grounds for review 9The plaintiff relies upon four grounds. These are identified in the summons. Each ground asserts, in the alternative, that there was a failure to state reasons. It is appropriate to consider the obligation to state reasons before considering each of the grounds.

The obligation to state reasons 10A claims assessor has an obligation to state reasons for his assessment. That obligation is imposed by s 94(5) of the Act [see para 6 above]. The content of that obligation is stated in cl 18.4 of the Claims Assessment Guidelines ("the guidelines") as follows: "A certificate under ss 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 processes that lead the Assessor to the conclusions made; and 18.4.4 In the case of an assessment certificate pursuant to s 94, the assessor must specify an amount of damages and the manner of determining that amount." 11In Minister for Immigration and Ethnic Affairs v Wu (1996) 185 CLR 259 at 272, the High Court, in referring to Collector of Customs v Pozzolanic (1993) 43 FCR 280, said: "It was said that a court should not be 'concerned with looseness in the language ... nor with unhappy phrasing' of the reasons of an administrative decision maker. The Court continued: 'The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error'. These propositions are well settled. They recognise the reality that the reasons of an administrative decision maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed...[The court] must beware of turning a review of the reasons of the decision maker upon proper principles into a reconsideration of the merits of the decision." 12A claims assessor is to act with as little formality as the circumstances of the matter permit and according to equity, good conscience and the substantial merits of the matter without regard to technicalities and legal forms (Guidelines cl 16.3). He is to take into account the objects of the Act and the objects of CARS at all times (Guidelines cl 16.4). These objects stress the minimisation of formality and technicality and the desirability of early resolution (s 5, Guidelines cl 14.1, 14.2). 13As Campbell JA observed in Insurance Australia Limited v Helou [2008] NSWCA 240 "[61] The obligations of an assessor to give reasons is qualified by the requirement, in s 94(5) MAC Act, that it be a' brief statement' and by the requirements of cl 16.3 of the Claims Assessment Guidelines ... [62] When, for the reasons I have already given, the assessor has performed the task required of him to "assess the damages", and when his reasons identify the various heads of damage that he has awarded, and how he has arrived at the numbers attributed to each of those heads of damage, his statutory obligation to give reasons has been performed."

Ground 1:- The second defendant erred in that he rejected a finding of the medical assessor that had been issued pursuant to s 61 of the Act that a fracture of the claimant's lower spine at the S4-5 segment of the sacrum was not caused by the motor vehicle accident. Instead, the claims assessor found implicitly that the injury was so caused - Alternatively, the second defendant failed to state reasons for his decision as to whether or not the lower back complaint was caused by the motor vehicle accident. 14It was common ground Dr Barnsley had found the sacral fracture was not caused by the motor vehicle accident. The first defendant accepted that that finding was binding on the claims assessor. This accords with dicta in Motor Accidents Authority of New South Wales v Mills [2010] NSWCA 82 [57]-[69] which, though not binding [57], is highly persuasive. 15The issue was whether the second defendant implicitly found the sacral fracture was caused by the motor vehicle accident. 16The claims assessor, having noted that: "[2] ... A sacral fracture was certified by MAS' assessor Barnsley to not have been caused by the accident ..." dealt with the first defendant's claim in respect of her back as follows: "[13] Her other main physical complaint is that of back pain. There were pre-existing complaints of back pain prior to the subject accident. Subsequent to the accident she was found to have an undisplaced fracture of the S4-5 segment of the sacrum. There was a distinct difference of medical opinion as to whether this sacral fracture could have been caused by the accident. Assessor Barnsley was of the view that such a fracture would typically occur through a direct trauma such as falling onto hard ground and would not normally be associated with a rear end motor vehicle accident such as that experienced by Ms Kerr. It was urged upon me that since MAA v Mills that findings of causation by a MAS assessor are binding on me. I disagree but clearly it is persuasive. In any event although the claimant's back injuries continue to cause her ongoing problems particularly when running, lifting weights and carrying out activities such as vacuuming and cleaning, nonetheless I believe that her chronic neck injuries overwhelm her lower back injury as does her psychiatric impairment. In any event, Ms Kerr herself admits that her back has improved since the accident and it does follow that such a fracture would eventually mend by fusing though it may continue to cause some back pain. In any event there is no doubt as found by MAS Assessor Barnsley that she did suffer lower back strain in the accident and that may well have been an exacerbation of a previous back injury. Pre-accident she complained of premenstrual backache as well as constipation causing her backache. That seems to continue." 17In my opinion, a fair reading of the reasons leads to the conclusion that the claims assessor accepted Dr Barnsley's finding that the sacral fracture was not caused by the accident. He did this because either Mills or Dr Barnsley's finding or both were persuasive. This conclusion is, in my opinion, confirmed by the absence of any analysis of the competing medical opinions as to the cause of the sacral fracture. The claims assessor found in any event the first defendant's back condition did not relevantly impact on the assessment of damages (there being no available claim for non-economic loss) because her chronic neck injuries and psychiatric impairment "overwhelmed her lower back injury". 18In my opinion the claims assessor did not implicitly find that the sacral fracture was caused in the accident. The reasons given by him were adequate. If the alleged error was made, any impact on the assessment of damages was overwhelmed by reason of her other conditions such that I would refuse the relief sought on discretionary grounds.

Ground 2 - As to the award for future economic loss, the second defendant awarded a "buffer" sum of $200,000 for this head of damage without setting out any explanation or any reasoning and, more importantly, without any attempt to comply with the requirements of awarding damages for this head of damage pursuant to s 126 of the Act - Alternatively, he failed to state reasons as to why he awarded $200,000 under this head of damages. 19Section 126 of the Act 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." 20The plaintiff submitted the claims assessor was required by s 126 "to disclose certain assumptions about the claimant's most likely future circumstances but for the injury and is required to make adjustments to any amount of damages for future economic loss by reference to a 'percentage possibility' that future events might occur. All these assumptions must be quantified and stated in the assessor's reasons for decision. None of these things occurred here. It is, accordingly, a failure to comply with important legislative requirements and acting without power or ultra vires." 21In Penrith City Council v Parks [2004] NSWCA 201, Giles JA was concerned with s 13 of the Civil Liability Act which is replicated by s 126. Having stated that the meaning and effect of s 13 was "most obscure" his Honour held: "[3] A claimant's entitlement to damages for future economic loss, in concept for loss of earning capacity ... involves a comparison between the economic benefit to the claimant from exercising earning capacity before injury and the economic benefit from exercising earning capacity after injury. I agree that s 13(1) appears to address the former. ... [5] I consider that it is still open to assess damages by way of a so-called 'buffer'. The occasion for a buffer is when the impact of the injury upon the economic benefit from exercising earning capacity after injury is difficult to determine. There is still a comparison between the economic benefits, although the difference cannot be determined otherwise than by the broad approach of a buffer. Section 13(1) can be fulfilled and the assumptions as to exercising earning capacity before injury can be stated. Having determined damages for future economic loss by way of a buffer, because of the broad approach there is no question of percentage adjustment, and so in the application of s 13(2) the percentage adjustment is nil." 22The claims assessor found that by the time of the accident the first defendant had educated herself very well and had been working for years, apparently successfully, as a community nurse. She appeared to have succeeded in becoming qualified as an assistant in nursing working full-time. There was no evidence to suggest that she was having time off work prior to the accident. The assessor noted that she did want to move to a higher level of nursing assistant by taking a 12 month TAFE course but this was not completed prior to the accident. The assessor concluded "In my view she has satisfied me that but for the accident she would have had continual work, albeit that from time to time she would have needed to change jobs and have time off work. Thus she has satisfied s 126 of the Act". 23The claims assessor found that the first defendant's neck injuries obviously compromised her ability to work and to deal with the other issues in her life particularly depression; she was currently employed in a job in which she no longer finds satisfaction or enjoyment and there seemed to be a real possibility that this job will soon be lost to her. 24The first defendant's counsel submitted to the claims assessor that he should allow a weekly loss of $900.00 until the first defendant was 70 years of age and then make a discount of 30% for vicissitudes rather than the usual 15% because of pre-existing psychological factors. This would give rise to a claim of over $600,000.00. 25The claims assessor concluded, in respect of the claim for future economic loss: '...I accept the insurer's submission that it should be by way of a buffer rather than a concise calculation, given the claimant's concession of pre-existing psychological issues, her pre-existing work history and her current capacity for work. An amount of $20,000.00 as submitted by the insurer is clearly inappropriate. I believe the sum of $200,000.00 is the appropriate sum. Again I have allowed a further $22,000.00 on the basis of future superannuation loss." 26In my opinion, the claims assessor has adequately complied with the requirements of s 126. As Giles JA observed in Parks : "The occasion for a buffer is when the impact of the injury upon the economic benefit from exercising earning capacity after injury is difficult to determine." 27This is such a case. Indeed it was the plaintiff who submitted to the claims assessor that a buffer, albeit in a lesser sum, was appropriate. 28In my opinion no error has been demonstrated

Ground 3 - The second defendant erred when he dealt with past domestic assistance. He made a finding of past care for the amount of $11,000 in respect of two uncertain periods of time and in the context of a statutory test which a claims assessor must address but which has not been addressed. The second defendant was not empowered to award such damages unless this test was complied with - Alternatively, the second defendant failed to state reasons as to why he awarded $11,000 to the claimant under this head of damages. 29The "statutory test" referred to is that contained in s 128 which provides, relevantly: "(1) Compensation, included in an award of damages, for the value of attendant care services: (a) which have been or are to be provided by another person to the person in whose favour the award is made, and (b) for which the person in whose favour the award is made has not paid and is not liable to pay, must not exceed the amount determined in accordance with this section. (2) No compensation is to be awarded if the services would have been provided to the person even if the person had not been injured by the motor accident. (3) Further, no compensation is to be awarded unless the services are provided (or to be provided): (a) for at least 6 hours per week, and (b) for a period of at least 6 consecutive months. ... (7) Except as provided by this section, nothing in this section affects any other law relating to the value of attendant care services." 30The plaintiff submitted that gratuitous attendant care services cannot be awarded unless the statutory threshold test is complied with. This was conceded. In Hill v Forrester [2010] NSWCA 170 the Court of Appeal held that in respect of the similar provision in s 15 of the Civil Liability Act a party "is not entitled to recover damages in respect of any period in which the gratuitous services were not provided (or are not to be provided) to him for at least 6 hours per week". 31The claims assessor awarded $11,000.00 for past gratuitous assistance . $5,544.00 of that sum was attributed to the period of 42 weeks from 6 March 2007 to 12 December 2007 and was based on six hours care per week. 32The balance of that sum was awarded in respect for the period of two and a half years from 1 January 2008 to 17 June 2010. 33There was ample evidence of the occupational therapist, Ms Davidson, and the carer, Mr Hilliard, to support the claims assessor's conclusion that the statutory test was met as to the first period. 34As to the second period the first defendant relied upon the evidence of Ms Davidson, who assessed the average need at five and a half hours per week, and the evidence of Mr Hilliard. 35The claims assessor said in his reasons: "[26] ... Counsel for the claimant stated that with respect to past care he relied on Ms Davidson's report but as the period from 1 January 2008 even on Ms Davidson's report is below the statutory threshold then it seems from that time the claim is not supported ... [27] The claimant was supported by the evidence of her current flat-mate, a Mr Mark Hilliard, a friend who has known her before and since the accident. He now shares house with her at Dundas. I found Mr Hilliard credible. Although he has been assisting Ms Kerr from the time of the accident from November 2007 to April 2008 he said he assisted her some 12 to 15 hours per week. That then dropped to 2 hours per week until May/June 2009 when he again started providing greater assistance. He now says that he provides about 2 to 3 hours per day assistance. In all of those circumstances it is obviously hard to be precise about what sort of assistance Ms Kerr has received and whether it exceeded the threshold or not. The claimant's counsel invited me to allow a global sum of $20,000.00 for the past. Given the calculations of Ms Davidson and the evidence of Mr Hilliard I am prepared to allow the sum of $11,000.00 as my assessment for the two broken periods." 36In my opinion the claims assessor concluded that the claim from 1 January 2008 was not supported by the report of Ms Davidson standing alone. However the claims assessor also relied upon the evidence of Mr Hilliard in respect of this period. He found Mr Hilliard to be a credible witness. Mr Hilliard's evidence established the care needs of the first defendant varied from time to time and that the care provided by him was on some occasions above and on some occasions below the statutory threshold. 37As is apparent from the reasons quoted above [35] the claims assessor was mindful of the applicable threshold and the need to meet it. He was required to make his assessment having regard to such information as was conveniently available to him (s 94(2)) and to act according to the substantial merits of the matter (see [12] above). 38In my opinion there was evidence to found the claims assessor's award under this head and the implicit finding that the statutory test had been relevantly complied with. His stated reasons are sufficient. No error has been demonstrated.

Ground 4 - The second defendant set out his reasoning for allowing $78,078 for future commercial care but failed to record reasons setting out why he believed two hours of commercial care was required in the future in circumstances where Mr Hilliard might well have been able to provide that commercial care. In these circumstances reasons were required to be set out so as to explain this aspect of his determination. This is particularly so given that the second defendant failed to identify or apply the general law principles as stated in Miller v Galderisi [2009] NSWCA 353 - Alternatively, the second defendant failed to understand the nature of the task he was to perform and he therefore failed to perform it or he constructively failed to perform it. 39In Miller v Galderisi [2009] NSWCA 353 the Court of Appeal held: "[15] The evidence indicated that such domestic assistance as the respondent needed was being provided at the date of trial by his wife, and to a limited extent by his adult son who lived with him. The appellant pointed out, correctly, that there was no evidence that this gratuitous assistance would cease at some time in the future. [16] In our view, the award made by his Honour cannot be justified. It was made upon the assumption that the respondent required commercial domestic assistance immediately and would continue to do so for the rest of his life. However, it is clear that he did not require it immediately because it was being provided gratuitously, though to the extent that it could be attributed to the accident, not at a level of intensity that permitted recovery from the appellant. 40In my opinion, the comments in Galderisi do not establish any principle of law. The decision was one on its own facts and is readily distinguishable from the present case where Mr Hilliard was not a relative of the plaintiff and the plaintiff had given evidence that if awarded damages she proposed to engage commercial care. No error is apparent.

Conclusion 41In the circumstances the summons should be dismissed. The costs should follow the event.

Orders 42I make the following orders:

1. Summons dismissed.
2. The plaintiff to pay the defendants' costs.

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: 29 April 2011