Allianz Australia Insurance Ltd v Anderson [2013] NSWSC 1186 | Case summary

Background facts 3Ms Anderson was involved in a motor accident on 20 September 2004. On 11 January 2005 she submitted a claim form (sworn 10 January 2005 and received by Allianz on 14 January 2005) under the Act in respect of her alleged injuries. 4As described in the reasons for decision of 12 December 2012, Ms Anderson was driving her car in an easterly direction along the Great Western Highway at Prospect on Monday, 20 September 2004, at approximately 3.00pm. She stopped at the intersection of the Great Western Highway and the Prospect Highway, in order to turn into the Prospect Highway. Whilst stationary, she was hit from behind by a large refrigerator truck. 5More importantly from the perspective of the issues to be decided in these proceedings, as stated, Ms Anderson filed a claim on 11 January 2005. On 16 June 2005, Allianz filed a s 81 Notice admitting "a breach of duty of care". The relevant terms of the s 81 Notice were: "We refer to previous correspondence in respect of the above matter and wish to advise we are now in a position to admit a breach of duty of care in relation to the circumstances of the above accident. This admission is made after considering all the relevant information available at this time. However, we reserve our right to withdraw our admission and reassess our position if, at a later date, further information is received that would cause us to alter our view." 6Further correspondence ensued. It is however instructive to examine the "pleadings" filed prior to the correspondence recited above. The claim by Ms Anderson (in answer to question 4 on the Claim Form) indicated that the insurer had neither denied liability or breach of duty of care for the accident, nor failed to issue a s 81 Notice within three months by which liability would be deemed to be wholly denied. 7Ms Anderson did not complete (because neither option was correct) question 5 on the Claim Form. 8Thirdly, Ms Anderson answered question 6 on the Claim Form describing the dispute as about "Permanent Impairment and Stabilisation [that is whether the claimant's injuries caused by the motor accident have stabilised and whether the permanent impairment of the claimant as a result of the injuries caused by the motor accident is greater than 10%]". 9Lastly, of relevance, the Claim Form filed by Ms Anderson lists a number of injuries, the details of which it is unnecessary to repeat. 10The response, dated 28 June 2007, and filed by Allianz, signified that the claimant's (Ms Anderson's) answers to questions 4, 5 and 6 were correct and in response to the answers to question 7 on the Claim Form listed a smaller number (and less severe) injuries "caused by the accident that [Allianz] considers currently give rise to an assessable degree of permanent impairment in accordance with ... [the Guidelines]". 11Further, by annexure to the response by Allianz, it made the following statement: "The insurer acknowledges that the claimant sustained soft tissue injuries to the cervical and lumbar spine." 12The affidavit of Philip Bussoletti of 27 February 2013, which evidence I accept, recites, at [15], that Ms Anderson had returned to the United Kingdom indefinitely and was receiving medical treatment there. As a consequence of the filing of the response to which reference has been made and the s 81 Notice, an extract of which has been recited, Mr Bussoletti, who was the solicitor acting for Ms Anderson, formed the view that the first defendant (Allianz) had no entitlement to claim an exemption and completed a CARS Form 2A on 20 July 2007 on the basis that there was no dispute about liability. 13The CARS Form 2A was an application for general assessment by the Claims Assessment Resolution Service (CARS). An insurance company/respondent to a claim is required to reply to such an application. Such a reply is a CARS Form 2R. 14Such a reply was filed by Allianz on or about 10 September 2007. The response by Allianz accepts that the details about liability provided by or on behalf of Ms Anderson were correct (see question 6 of the CARS Form 2R). Question 6 on the CARS Form 2A, filed by Ms Anderson, is in the following terms: "6. Details about liability CARS Assessors can assess liability or fault in relation to an accident, however if contributory negligence is alleged at greater than 25% or if liability is denied the claim must be exempted under s 92(1)(a) of the Act. Is there a dispute about liability?" 15To the foregoing question, Ms Anderson answered "No", as a consequence of which the CARS Form 2R response by Allianz, which accepted the correctness of the statement by Ms Anderson at Question 6, accepted that liability was not in issue. 16On 12 September 2011, there was a conference before CARS, being a preliminary conference held by teleconference between the parties. It was agreed that the matter was not ready to proceed to assessment because, inter alia, the alleged injuries had not stabilised. The report of the CARS Assessor of 12 September 2011, following the aforesaid conference, recited that liability is not in dispute. No issue seems to have been taken with that report. 17On 30 November 2011, a further report of the Claims Assessor issued, being a report of the Second Preliminary Conference. It recites that: "There is a causation issue which will be canvassed by the Insurer in its submissions." 18The foregoing statement was repeated in the Third Preliminary Conference report of 28 February 2012. 19There was undoubtedly a significant issue between the parties as to the extent of the injury caused by the accident. Allianz claimed, as earlier recited, that the injury was confined to soft tissue injury. Ms Anderson claimed significant back injury that required a spinal fusion (performed in the United Kingdom) and consequential psychiatric affect. 20Leaving aside minor failures to abide by the agreed and ordered timetable, the matter was readied for hearing and heard by the Claims Assessor, resulting in the issue of the reasons for decision and certificate of 12 December 2012. 21The certificate assessed damages at $3,441,221; credit was allowed for a sum pursuant to s 130 of the Act; and Ms Anderson was awarded costs.

Consideration 48The submissions of Allianz rely upon the proposition that the s 81 Notice, to which reference has been made, did not admit "liability". Rather, the Notice, it is submitted, admitted "breach of duty of care in relation to the circumstances of the above accident". Allianz's submissions draw the distinction between liability, on the one hand, and breach of duty of care, on the other. 49Allianz submits that the admission as to "breach of duty of care" is an admission under s 81(2) of the Act and liability, for the purposes of s 95 of the Act, was never admitted and the assessment of liability by the Claims Assessor is not accepted. As a consequence, the assessment and certificate are not binding on Allianz. 50It is necessary to set out the provisions of s 81 of the Act. It is in the following terms: "81 Duty of insurer with respect to admission or denial of liability (1) It is the duty of an insurer to give written notice to the claimant as expeditiously as possible whether the insurer admits or denies liability for the claim, but in any event within 3 months after the claimant gave notice of the claim under section 72. (2) If the insurer admits liability for only part of the claim, the notice is to include details sufficient to ascertain the extent to which liability is admitted. (3) If the insurer fails to comply with this section, the insurer is taken to have given notice to the claimant wholly denying liability for the claim. (4) Nothing in this section prevents an insurer from admitting liability after having given notice denying liability or after having failed to comply with this section. (5) It is a condition of an insurer's licence under Part 7.1 that the insurer must comply with this section." 51The provisions of s 81(1) of the Act require an insurer, in this case Allianz, to give written notice (expeditiously) as to whether it admits or denies liability. There is no third choice. There is an election: liability is either denied or admitted, each of which is mutually exclusive: State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291 at [40] per Gaudron, Gummow and Hayne JJ; Immer (No. 145) Pty Ltd v The Uniting Church in Australia Property Trust (N.S.W.) (1993) 182 CLR 26 at 41-2. 52The provisions of s 81(2) of the Act allow the insurer, and allowed Allianz, to admit liability "for only part of the claim". It does not allow Allianz, or an insurer in any other claim, to admit part of the liability for the entire claim. 53In other words, liability must be admitted or denied. The provisions of s 81 do not allow some, but not all, criteria giving rise to liability to be admitted. Such an "admission" would be a statement denying liability, if the remaining criteria, essential to the establishment of liability, were denied. 54For example, s 81 does not permit an insurance company to admit a duty of care, but deny a breach of the duty of care. Of course an admission as to duty of care may be made, but it is not being made under s 81 of the Act. A statement by an insurance company that it admitted a duty of care but denied a breach of the duty of care would be a denial of liability. It would not be an admission of liability for only part of the claim. 55Allianz submits that the "admission" in its s 81 Notice was an admission of partial liability. It is not. It is an admission of one aspect of liability. Further, the submission of Allianz is that the "admission" did not admit: whether there was injury; what was the extent of any injury; whether there was loss; what was the extent of any loss; whether there was damage; and what was the extent of any damage. Moreover, at the hearing before the Claims Assessor, the plaintiff contested issues of injury, loss and damage. 56There are a number of difficulties with the foregoing submission. Firstly, the question of whether an insurer has admitted liability is not confined to its notice under s 81 of the Act. In this case, the admission of liability derives from a number of documents. 57First, as earlier stated, there is the s 81 Notice, to the extent that it is an admission. Secondly, the MAS Form 2R, filed by Allianz, was to the effect that the MAS Form 2A, filed by Ms Anderson, was correct when it stated that there was no dispute about liability. 58Over and above the foregoing, Allianz at no stage raised any issue with the Claims Assessor that the comment, by the Claims Assessor on each of its conference reports, that "Liability is not in dispute", was otherwise than correct. In my view, by its comments, statements and conduct, Allianz admitted liability. 59Moreover, if the s 81 Notice is construed as neither admitting nor denying liability, then, pursuant to the terms of s 81(3) of the Act, there was a deemed denial of liability. Pursuant to the provisions of s 81(4), thereafter, Allianz was permitted to admit liability, where a denial had earlier been made, but not to deny it, where an admission had been made. 60The subsequent conduct of Allianz admitted liability. That subsequent conduct included the admission on the MAS Form 2R, filed on 29 June 2007, that there was no dispute as to liability; failing to retract that answer (if that were legally possible); and conducting itself on the basis of the correctness of the comments by the Claims Assessor, in each report, that liability was not in issue. 61Moreover, the submission that the s 81 Notice was a "partial admission of liability" raises fundamental issues. It is accurate to submit, as Allianz has done in these proceedings, that it contested issues of injury, loss and damage. 62Liability in tort depends upon the occasioning of damage. Central to the tort of negligence, on which liability a claim in a motor accident relies, is the occasioning of damage. However, it is not the level of damage which occasions the tort, only the occasioning of some damage. 63At all times, Allianz has admitted the occasioning of some damage. It has denied that the injury caused damage of the significance claimed by Ms Anderson. 64In other words, Allianz, at all stages, had conceded that damage had been suffered as a result of the breach of duty, which it had admitted. That which was denied was the quantum of damage. 65The difficulty with the foregoing construction is whether it leaves any work for the provisions of s 81(2) of the Act. It seems, however, properly construed, that it does. 66A s 81 Notice that admitted liability to the extent of 75 per cent, because of contributory negligence, would be an admission of liability for part only of the claim. Further, if part of the claim to which s 81(2) refers were to include a confinement of the claim by the nature of the injury that arose or by the extent of the injury that arose, it would seem to create a tension with the provisions of s 94 of the Act. 67Section 94 of the Act divides the function of a Claims Assessor into the issue of liability "for the claim" and "the amount of damages for that liability". If liability were to be determined in accordance with each injury or the significance of each injury, there would be a requirement for s 94 to require the Claims Assessor to determine the issue of liability "for each aspect of the claim" or "each injury arising from the claim". 68Ordinarily, liability depends upon damage occasioned to a person by another in breach of a duty of care owed by that other to the person who suffered damage. The significance of the damage and the amount of the damage or loss are matters for the assessment of damages, not for the assessment of liability. 69Lastly, Allianz relies upon the requirement, it submits, that an admission of liability can only be effected by a s 81 Notice. Allianz relies, for that submission, on the fact that the Claims Assessor is an administrative decision-maker and not a court of law and the jurisdiction to issue a certificate depends upon the statutory requirements of the Act. Further, it is said the requirements of s 81 must be "strictly complied with". 70Further to the foregoing, the process adopted by the Claims Assessor involved participation in a settlement conference pursuant to the provisions of Division 1A of the Act. As is prescribed by s 89E of the Act, that Division does not apply to a claim in which the insurer wholly denies liability. If the s 81 Notice filed by Allianz did not amount to an admission of liability, in whole or in part, as is the alternative proposition, the provisions of Division 1A of the Act could not have applied. 71Allianz relies upon the judgment of the Court of Appeal in Lee v Yang [2006] NSWCA 214. The judgment of the Court of Appeal involved an appeal from the District Court. 72The District Court had dismissed an appeal from the Judicial Registrar in which the Judicial Registrar had operated on the basis that the amount of damages assessed was binding on the insurance company that was party to the dispute before the Court. The Court of Appeal determined that the insurance company did not accept the liability assessed and was therefore, pursuant to the terms of s 94 and s 95 of the Act, not bound by the assessment and entitled, in later proceedings, to contest the assessment of damages. 73The circumstances before the Court of Appeal in Lee v Yang, were significantly different from those that are before the Court in these proceedings. 74The s 81 Notice issued by the insurer in Lee v Yang, accepted that the insured was at fault, but alleged contributory negligence on the part of the claimant. Unarguably, contributory negligence is an issue going to "liability". 75As a consequence, in Lee v Yang, the s 81 Notice (and the subsequent conduct of the insurer) made clear that there was a dispute as to liability. Indeed, before the Court of Appeal it was common ground that an assessment of "the issue of liability for the claim" as described in s 94 of the Act encompassed contributory negligence: see Lee v Yang, at [21]. 76The Court of Appeal (Giles JA, with whom Hodgson and Ipp JJA agreed), dealing with the structure of s 95, said at [23]: "[23] ... The structure is readily understandable. Section 95(1) is in the terms of an assessment being not binding. Section 95(2) follows it in the terms of an assessment being binding, and adds an obligation to pay the claimant. It is necessary to impose the obligation, because s 95(2) will commonly operate in the absence of legal proceedings. But both conditions must be satisfied. [24] In my opinion, the double consequence construction is correct. [25] What may be binding is 'the amount of damages for liability under a claim'. This picks up the liability found on the issue of liability for the claim, and is 'the amount of damages for that liability' in s 94(1)(b) and so the damages payable to the claimant after any reduction for contributory negligence. The claimant may accept 'that amount of damages' in settlement of the claim, and correspondingly the insurer may accept 'that liability under the claim', being the liability assessed 'on the issue of liability for the claim'. [26] Section 95(2) provides a mechanism by which the non-binding assessment of the issue of liability for a claim and the assessment of the amount of damages for that liability become binding as a package. ... But there must be the conjunction of the two conditions in paras (a) and (b), and each of the claimant and the insurer may decline to accept and thereby make the other go to court. The subsection refers to the assessment of the amount of damages for liability under the claim being binding on the insurer, rather than on both the claimant and the insurer, because the claimant's acceptance necessarily involves the assessment being binding on the claimant in the event of the insurer's acceptance; and because it is open to the insurer to contest the assessment of damages only if the insurer contests the liability as found by the assessor." 77Given the circumstances that liability was unarguably in issue in the proceedings that gave rise to the appeal in Lee v Yang, the comments of the Court of Appeal do not support the submission of Allianz, which depends upon a construction as to whether, in truth, liability was put in issue or admitted. 78Allianz also relies upon the judgment of the Court of Appeal in The Nominal Defendant v Gabriel & Anor [2007] NSWCA 52; (2007) 71 NSWLR 150. In those proceedings the Court of Appeal (Hodgson JA and Campbell JA, Basten JA dissenting) held that an admission of breach of duty of care by an insurer under the Act did not preclude the insurer from pleading a defence in subsequent proceedings denying liability. The circumstances in Gabriel require summary. 79The reasons for judgment diverge, even within the majority. Hodgson JA, at [2], considers that the insurer's letter of 3 June was an admission of liability within s 81, subject to 25 per cent contributory negligence. Further, Hodgson JA takes the view that an admission of breach of duty of care was an admission of liability. His Honour said: "[2] In my opinion, AAMI's letter of 3 June was an admission of liability within s.81, subject to a reduction of 25% for contributory negligence. The admission was expressed to be an admission of breach of duty of care, but the reference to a deduction of 25% from any final settlement, and to payment in full of medical expenses, amounted to an implied admission of at least some consequential suffering of damage." 80The "admission of breach of duty of care" that was taken by Hodgson JA to be an admission as to liability was qualified by a claim that there was 25 per cent contributory negligence. As a consequence, like Lee v Yang, there was unarguably a contest or dispute as to liability. 81In the course of reasons for judgment, Campbell JA remarked: "[85] The admission made by AAMI's letter of 3 June 2003 was of breach of duty of care. As the claim made by the plaintiff was that the driver of the unidentified vehicle had committed the tort of negligence, and as someone is liable for the tort of negligence only if that person owes a duty of care to the plaintiff, has breached that duty of care, and the plaintiff has thereby suffered damage, the admission made by AAMI was not, strictly, an admission of liability for the claim. The admission of breach of duty of care necessarily contained within it an admission of the existence of a duty of care, but no admission was made of any consequential suffering of damage. Thus it counts as an admission of liability for only part of the claim. An admission of liability for part of a claim, in this way, can fairly be described as a notice that includes 'details sufficient to ascertain the extent to which liability is admitted', and thus is expressly contemplated by section 81(2) MAC Act." 82Again, in the instant proceedings, there was not only an admission of a breach of duty of care, but an admission that damage arose as a consequence of that breach. The dispute between the parties was the nature of the injury and the extent of the loss. 83Utilising the reasoning of Campbell JA in the passage recited above, the s 81 Notice admitted one element of liability, but did not admit damage, which was a necessary element on the question of liability. However, the later response by Allianz admitting soft tissue injury completed the admission of liability for the tort. 84In those circumstances, it is unnecessary to deal with what seems to be a tension between the reasoning of Hodgson JA and Campbell JA in relation to whether the admission of a breach of duty was an admission of liability. For my own part, it seems to me that the Act treats liability somewhat differently than does the common law. 85Given that the Act splits the process of determining liability from the process of determining the nature and extent of injuries arising from an accident, it would seem preferable, and more in keeping with the attainment of harmonious goals, to treat "liability" under the Act as confined to the existence of and breach of a duty of care. As earlier stated, it is unnecessary to deal finally with such an issue. 86On the foregoing analysis, each of Hodgson JA and Basten JA determined that the insurer had made an admission of liability. Only Campbell JA took the view that an admission as to "a breach of duty of care" was not an admission of liability. In that respect, the reasons of Basten JA at [41], are instructive: "[41] This gives rise to a minor subsidiary question as to the terms on which it sought to admit liability. The admission, contained in the notice of 3 June 2003, admitted 'breach of duty of care' and asserted contributory negligence estimated at 25% (apparently based on the failure of the claimant passenger to wear a seat belt). There is no liability in negligence without damage. Further, the purpose of the statutory scheme is demonstrated by the preceding section, which requires an insurer 'to endeavour to resolve a claim, by settlement or otherwise, as justly and expeditiously as possible': s 80. It is also demonstrated by the terms of the subsequent section, which requires an insurer to make 'a reasonable offer of settlement to the claimant (unless the insurer wholly denies liability for the claim)': s 82(1). The offer of settlement 'is to specify an amount of damages or a manner of determining an amount of damages': s 82(2). Thus, although s 81(2) permits the insurer to admit liability 'for only part of the claim', read in context an admission of liability involves a concession that damage has been suffered as a result of a breach of duty. Accordingly, I would read the notice as an admission of liability limited in extent by the claim of contributory negligence and, possibly, by the reservation of rights of contribution, though it is doubtful that Part 4.3 of the MAC Act is concerned with questions of contribution." 87If, as is submitted by Allianz, the s 81 Notice that it issued was a "partial admission of liability", and there can be no liability without damage, a partial admission of liability must admit damage. As earlier stated, it is unnecessary to determine that issue finally. 88On the facts in these proceedings, Allianz by the issue of the s 81 Notice and its subsequent documentation has admitted breach of the duty of care and damage, thereby admitting liability, and has also admitted liability by acknowledging that liability was not in issue. 89Section 81 requires an insurer either to admit or to deny liability. It does not require such an admission or denial to be in any particular form. Further, s 81 allows an insurer, after initially denying a claim, in whole or in part, later to admit liability. That later admission, also, requires no form. 90The Act is permissive, in that, it makes clear that the section does not prevent an insurer from later admitting liability. Nothing in the provisions of s 81 requires formality. Nothing in the Guidelines requires formality. 91For obvious reasons, mainly associated with the statutory imposition of compliance with s 81 as a condition of the insurer's licence, insurers are keen to ensure that a Notice under s 81 is headed a s 81 Notice and there is a clear indication that compliance with the section has occurred. The Act, however, does not require any particular form. The section does not require any particular heading. An admission as to liability may be made in precisely the same way as it is under the general law. 92For the foregoing reasons, Allianz has admitted liability. Given that Ms Anderson accepts the amount of damages assessed, Allianz is bound by the assessment and, pursuant to the terms of s 95 of the Act, must pay to Ms Anderson the amount of damage specified in the certificate, together with the amount specified for costs and for interest. 93The Court makes the following orders: (1)A declaration that, pursuant to s 94 of the Motor Accidents Compensation Act 1999, Allianz is bound by the assessment and certificate of the Claims Assessor, Geraldine Daley, made on 12 December 2012, and is required to pay to Ms Zoe Karen Anderson the amount of damages specified in the said certificate by reason of s 95 of the Act. (2)The plaintiff shall pay the first defendant's costs of and incidental to the proceedings, as agreed or assessed. (3)Otherwise the proceedings are dismissed.

Allianz Australia Insurance Ltd v Anderson

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (6 paragraphs)

Parties

Cases Cited (6)

Cited By (3)