CIC Allianz Insurance Ltd v Erturk & Ors - [2010] NSWSC 302 - NSWSC 2010 case summary — Zoe

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CIC Allianz Insurance Ltd v Erturk & Ors

[2010] NSWSC 302

Supreme Court of NSW|2010-03-08|Before: Simpson J, Rothman J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2010-03-08

Before

Simpson J, Rothman J

Source

Original judgment source is linked above.

Judgment (62 paragraphs)

[1]

Background history 25 The plaintiff is an insurer licensed under the Act. 26 On 22 October 2006 a Suzuki hatchback motor vehicle then being driven by Mr Baha Erturk (the first defendant), on Parramatta Road, Flemington, collided with a truck owned by Lantrans Holdings and being driven by Mr Jeffrey Ridley in the opposite direction. Mr Erturk claimed that he was proceeding through an intersection, with a green traffic light in his favour, when the truck turned in front of him, causing the collision. In respect of the truck, Lantrans Holdings held a policy of insurance under the Act issued by the plaintiff. Mr Erturk suffered injuries. 27 Accordingly, by notice under s 72(2)(a) of the Act dated 21 November 2006, he made a claim to the plaintiff. The notice bears a stamp (in two places) of the plaintiff's "CTP Claims Department" signifying that it was received on 14 December 2006. It also bears a number, identified as a "claim number": 37N013957. In his s 72(2)(a) notice, Mr Erturk gave an account of the 22 October collision along the lines set out above. 28 On 17 November 2006, an unrelated collision occurred on the M7 motorway. One of the vehicles in that collision was another truck owned by Lantrans Holdings, and also subject to an insurance policy under the Act issued by the plaintiff. That truck was being driven by Mr Michael Tuck. 29 Two documents entitled "Accident Report - CTP Insurance" are in evidence. Each is on a form apparently issued by the plaintiff and, I infer, was substantially completed by an employee of Lantrans Holdings. They appear to be in the same handwriting. One bears the signature of Mr Ridley, dated 27 February 2007, and a signature of somebody representing the insured owner, dated 19 February 2007. This report shows the date of accident as 22 October 2006. That is plainly the accident in which Mr Erturk was injured. The second bears the signature of Mr Tuck, dated 15 January 2007, and a signature of the same date representing the insured owner. This form shows the date of accident as 17 November 2006. 30 Each has been allocated the same claim number: 37N013957 - the same number allocated to Mr Erturk's s 72 claim. 31 Each form makes provision for an account of how the accident happened. That referable to the 17 November accident merely refers to "attached statement". No such statement is attached to the copy of the form in evidence. There is otherwise in evidence a statement which I am prepared to infer is the statement intended to have been attached. 32 The accident report form referable to the 22 October accident (Mr Erturk's accident) contains an account - presumably, Mr Ridley's account - of how the accident happened in the following terms: "Making R/H turn from Parramatta Road into Homebush Bay Drive with turning arrow, other vehicle was coming fast - our vehicle stopped but other vehicle went thru red light" 33 The statement which I take to have been the statement referred to in the report of the November accident, apparently signed by Michael Tuck on 18 November 2006, is in the following terms: "MVA. M7 MOTORWAY. CECIL HILLS. 17.11.06 10.25AM.

[9]

We will now consider payment of all reasonable and necessary medical and rehabilitation expenses …" 39 The terminology used is not entirely in accordance with s 81 - s 81 requires notice whether the insurer "admits or denies liability for the claim" but permits an insurer to admit liability for only part of the claim (sub-s (2)). To admit, as did the plaintiff, "breach of duty of care", was something less than a full admission of liability - it encompassed duty of care, and breach of duty of care, but not injury, loss and damage. It was a partial admission of liability. 40 It was on the basis of Mr Tuck's admission of responsibility (to use a neutral term) that Mr Rajapakse sent the s 81 notice on 29 March 2007. How Mr Rajapakse reconciled the information given to him by Mr Tuck with the detail of the 22 October accident given by Mr Erturk is a mystery. In any event, he accepted Mr Tuck's acknowledgment of fault. 41 On 3 July 2007 the plaintiff received a police report in relation to the October 22 accident. Under the heading "Crash summary details" the following appears: "Vehicle 1 [the Lantrans Holding truck] travelled east upon Parramatta Road Flemington in lane 3. Driver states that he observed a green arrow to the right at the intersection of Parramatta Rd and Centenary Dr. Vehicle 1 travelled through the intersection a short distance before vehicle 2 [Mr Erturk's vehicle], travelling westbound upon Parramatta Rd collided with vehicle 1. Driver 2 [Mr Erturk] states he also had a green signal." 42 On 18 September 2008 Mr Erturk lodged, on the form provided, an application for assessment of his claim under s 94 of the Act. This set out details of his claim and attached medical reports and other documents. 43 The form contained a question "Is this is a claim where liability is wholly denied?". Acting, no doubt, on the s 81 notice admitting "breach of duty of care", Mr Erturk (or his solicitor) ticked the "No" box. 44 On 5 November 2008 the plaintiff lodged its reply to Mr Erturk's application. A section of the form, headed "Details about liability" makes provision for ticking "Yes" or "No" boxes to a question "Is there a dispute about liability?"; the plaintiff ticked neither box, but inserted, under another heading, "Nature of dispute": "There may be a dispute about liability. The section 81 notice was issued in error and liability is presently being reviewed." 45 Officers of the plaintiff then began making inquiries, initially by attempting to locate Mr Ridley. The plaintiff engaged solicitors. It was then (on 19 November) that the accident report form signed by Mr Ridley came to light. How it did so, and where it had been in the interim, is not disclosed in the evidence. However, I am satisfied that it had been, at some stage, in the possession of the plaintiff. That is an inescapable conclusion from the insertion of the claim number which matched the number given to the claim made by Mr Erturk. 46 On 11 December 2008 the plaintiff's solicitors wrote to Mr Erturk's solicitors. They stated that the s 81 notice of 29 March had been issued by mistake. They said that investigations had indicated that Mr Ridley was not at fault in the collision, because he was turning right in accordance with a green traffic arrow, and that Mr Erturk had driven through the intersection contrary to a red light. They invited Mr Erturk's solicitors to agree that (in accordance with s 92(1)(a) and the Guidelines) the claim ought to be exempted from the assessment process. 47 There is no evidence of any direct reply to this communication. However, it would be unsurprising if Mr Erturk's solicitors advised him not to yield willingly the advantage he had by the admission of liability, and the course of events thereafter shows that he did not do so. 48 The assessment process commenced and at least two preliminary conferences took place, before claims assessor Mr Paul Curtis (the fourth defendant), on 12 and 16 December 2008. 49 At the latter of these the plaintiff indicated that it wished to make an application for exemption pursuant to s 92(1)(a) or, alternatively, s 92(1)(b). 50 On 13 January 2009 the plaintiff purported to issue a (further) notice under s 81, this time denying liability. On the same date the plaintiff lodged an application, under s 92(1)(a), for exemption from the claims assessment process. On 3 February 2009 Mr Erturk's solicitors lodged a reply to that application. 51 Although, as will be seen, the legislation does not make any provision for, or recognise, a second s 81 notice where liability has been admitted, I will, for convenience and clarity, refer to the 29 March notice as "the first s 81 notice" and to the 13 January notice as "the second s 81 notice". 52 In oral submissions counsel for the plaintiff expressly disclaimed reliance on the second s 81 notice as valid. His contention was that the first notice, because founded upon a mistaken understanding of the description of the accident given by the insured's driver, was ineffective - a nullity. If that were so, then there is no s 81 notice, and the denial of liability deemed, by s 81(3) to operate, comes into effect, thus opening the way for exemption under s 92(1)(a). 53 On 13 February 2009 the PCA wrote to the parties, setting out something of the history, and requiring submissions on three matters. These were: "(i) Is a notice issued by mistake an invalid notice and of no effect?

[39]

9 Alternatively, an order in the nature of mandamus remitting the plaintiff's exemption application(s) to the PCA and/or Assessor Curtis for determination according to law. 66 The plaintiff relied upon the powers conferred on this Court by s 69 of the Supreme Court Act 1970. That section relevantly provides as follows: "(1) Where formerly: (a) the Court had jurisdiction to grant any relief or remedy or do any other thing by way of writ, whether of prohibition, mandamus, certiorari or of any other description, or (b) in any proceedings in the Court for any relief or remedy any writ might have issued out of the Court for the purpose of the commencement or conduct of the proceedings, or otherwise in relation to the proceedings, whether the writ might have issued pursuant to any rule or order of the Court or of course, then, after the commencement of this Act: (c) the Court shall continue to have jurisdiction to grant that relief or remedy or to do that thing; but (d) shall not issue any such writ, and (e) shall grant that relief or remedy or do that thing by way of judgment or order under this Act and the rules, and (f) proceedings for that relief or remedy or for the doing of that thing shall be in accordance with this Act and the rules. (2) … (3) It is declared that the jurisdiction of the Court to grant any relief or remedy in the nature of a writ of certiorari includes jurisdiction to quash the ultimate determination of a court or tribunal in any proceedings if that determination has been made on the basis of an error of law that appears on the face of the record of the proceedings. (4) For the purposes of subsection (3), the face of the record includes the reasons expressed by the court or tribunal for its ultimate determination. (5) …" 67 On behalf of the plaintiff it was contended that an alternative route to achieving the same end was the declaratory process. Either way, it is necessary that the plaintiff establish error of law in the decision making process. 68 The plaintiff's principal contention was that jurisdictional error infected either or both of the first and second challenged decisions, and that, as the third challenged decision relied upon each of those, it also was affected by the same error. 69 What constitutes jurisdictional error has very recently been clarified by the High Court in Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of NSW [2010] HCA 1. Counsel argued that this decision is of no, or limited relevance, because it concerns an inferior court, and not, as here, an administrative tribunal. It is not necessary to embark upon a consideration of whether that distinction continues to operate (but see Kirk, [68]-[70]). The first inquiry is whether any error of law is to be found in either of the first or second decisions. If there were such an error, it may then be necessary to consider whether it ought to be characterised as jurisdictional or on the face of the record, providing the basis for an order in the nature of certiorari. 70 As will be seen, I am satisfied that no such error is identifiable. Accordingly, it is unnecessary to complicate this judgment with the niceties of administrative law that might otherwise arise. 71 The most convenient course is to deal with the challenges made to each decision in turn.

[53]

By the PCA failing to accept the insurer's evidence and explanation and by her reasons for decision ... the PCA misconstrued or misunderstood the proper scope of her powers under [the Act]. In doing so, she fell into error … Alternatively, she failed to perform her statutory task (constructive failure of jurisdiction)." 91 I note that paragraph 31 was contradicted by the oral submission made on behalf of the plaintiff. That submission was: "I'm not suggesting for a moment that section 81 notice [ie the second] is effective. What I'm suggesting to your Honour is that the first 81 notice is ineffective and therefore the deemed [by s 81(3)] denial can rise and can operate." (T p 7) 92 The argument cannot be sustained. I am prepared to accept, and I have no doubt, that the first s 81 notice was founded upon a mistaken apprehension by Mr Rajapakse about the circumstances of the accident. But that cannot affect the validity of the notice. 93 As has been noted more than once, s 81 makes no provision for the withdrawal of an admission of liability (by contrast with a denial of liability, which can, effectively, be withdrawn or superseded - see sub-s (4)). Except as provided by sub-s (4), the section makes no provision for a second, substitute or replacement certificate to be issued. A certificate admitting liability, once issued, is final for the purposes of the statutory scheme. 94 The PCA is given no express statutory power to go behind a certificate. Nor do I read into the legislation any implied power to do so. A certificate that on its face admits liability for the claim that it identifies is binding on the PCA. So much is, in my opinion, clear from ch 8.11.1 of the Guidelines, which, I repeat, is in the following relevant terms: "8.11 For the purpose of section 92(1)(a), the PCA shall issue a certificate of exemption when satisfied that … 1 the fault of the owner or driver of a motor vehicle … is denied by the insurer … in its written notice …" (bold added)

[56]

The second decision 102 The second challenged decision is that of Assessor Curtis made under s 92(1)(b). Section 92(1)(b) permits a certificate of exemption to be issued where a claims assessor has made a preliminary assessment of the claim, and has determined (with the approval of the PCA) that it is not suitable for assessment under Pt 4.4. This may occur even where liability has been wholly admitted. 103 Chapter 14 of the Guidelines makes provision with respect to the determination whether a claim is unsuitable for assessment. Clause 14.16 sets out (non-exhaustively) the circumstances to be taken into account. The first of these is whether the claim is exempt by reason of any of the circumstances set out in cl 8.11 - ie where the insurer denies liability. Others include the extent of conflict between the claim and the response by the insurer; the existence of complex legal or factual issues; the existence of complex issues of quantum or of assessment including, but not limited to, major or catastrophic, spinal or brain injury claims; the existence of other complex issues, for example of non-economic loss claims; the existence of complex issues of causation of injuries and disabilities; whether the claimant or a witness (considered to be material) resides outside NSW; whether the claimant or insurer seeks to proceed against one or more "non CTP" parties; and whether the insurer makes an allegation that a person has made a false or misleading statement in a material particular in relation to injury loss or damage. 104 The general tenor of ch 14 is that relatively straightforward claims are to be dealt with by the assessment process. Those involving levels of complexity (of a variety of kinds) ought to be dealt with judicially. A claims assessor (under the supervision of the PCA) is given the discretion to make a judgment about the suitability (or unsuitability) of a claim for assessment under the non-curial process. 105 After the PCA's decision with respect to s 92(1)(a), the claim was returned to Assessor Curtis for assessment. Again, the plaintiff vigorously sought exemption. 106 Assessor Curtis also gave detailed reasons. He, like the PCA, set out a short history of Mr Erturk's claim, making specific reference to the plaintiff's application to the PCA and its fate. He noted the written submissions provided by both parties, which he said he had carefully considered. 107 He also made express reference to cl 14.16 of the Guidelines, noting that he was not limited by the matters there listed. 108 I now set out paras 12, 13, 14, 15 and 16 of his reasons. Each is alleged, by the plaintiff, to bespeak error: "12. The arguments put forward by the Insurer here seem to me to amount to an appeal from the PCA's decision in the guise of a section 92(1)(b) Application and clearly I am not the appropriate 'forum' for such a process.

[60]

16 As to Ground 3 'legal entitlement to an exemption' it seems to me that the insurer's submissions again amount in effect to an 'appeal' from the PCA's decision and I am not the appropriate 'forum' in that regard." (bold and italics in original) 109 In written (and oral) submissions it was contended on behalf of the plaintiff that Assessor Curtis was wrong in holding that the plaintiff's application before him was in the nature of an appeal from the PCA's earlier determination; that he wrongly characterised the "liability status" of Mr Erturk's claim; and that he wrongly considered himself bound by the earlier determination of the PCA and therefore failed to consider the validity or effectiveness of the first s 81 notice and failed to look behind that notice, and that in this he failed to take into account relevant considerations. 110 Recourse to the written submissions put on behalf of the plaintiff to Assessor Curtis demonstrates that his characterisation of the plaintiff's application as a disguised appeal from the decision of the PCA was entirely justified. Repeatedly, throughout those submissions, reference was made to the exemption sought under s 92(1)(a) and to the plaintiff's belated attempt to deny liability. Repeatedly, throughout the written submissions, it was asserted that liability is denied, that negligence on the part of the insured driver is denied, and that the insured driver was not at fault. Assessor Curtis was correct to perceive this as an attempt to re-agitate the issues that had been agitated in the application to the PCA. It is of some significance that cl 8.11 requires the PCA to issue a certificate of exemption under s 92(1)(a) when satisfied that, at the time of consideration, the claim involves one or more of the specified circumstances. It does not, on my reading of it, permit a claims assessor to engage in the same process. 111 A proper reading of the submissions put to Assessor Curtis shows that, taken as a whole, they challenged the decision made by the PCA, and sought to have it reviewed by Assessor Curtis. 112 The plaintiff also put to Assessor Curtis that the claim involved complex legal issues. In paragraph 15, Assessor Curtis rejected that. In rejecting it, he was correct. The "complex legal issues" put to the assessor involved the claim on the part of the plaintiff that either the PCA or Assessor Curtis could excuse it from the consequences of its error in issuing the s 81 notice. It was not Mr Erturk's claim that involved complex legal issues; it was the plaintiff's attempt to escape the consequences of its error. 113 I have set out above a paraphrase of the matters which could warrant the issue of an exemption certificate under s 92(1)(b). These are all concerned with the nature of a claimant's claim. 114 In single-mindedly, even intransigently, focussing its attention upon the s 92(1)(a) application, the plaintiff failed to address any submissions to the issues relevant to s 92(1)(b) and cl 14.16. This may be because it correctly recognised that the claim was otherwise "relatively straightforward" and therefore not one which was not suitable for assessment other than as a contest on liability. Or it may be that it simply concentrated its attention on the wrong issue. In either case, it has not now demonstrated any error on the part of Assessor Curtis.