Graham Kelly v Motor Accidents Authority of New South Wales & Anor

Supreme Court of NSW|2006-12-22|Before: Rothman J, Mr J, Mr P

CITATION : Graham Kelly v Motor Accidents Authority of New South Wales & Anor [2006] NSWSC 1444 This decision has been amended. Please see the end of the judgment for a list of the amendments.

DECISION : (i) proceedings are dismissed; (ii) the plaintiff shall pay the defendants' costs of and incidental to the proceedings as agreed or assessed.

CATCHWORDS : ADMINISTRATIVE LAW - Claims Assessment under Motor Accidents Compensation Act 1999 (NSW) - decision not to exempt claim from assessment process - whether guidelines complied with - meaning of complex matter - merits review - non-binding arbitration process

International Arbitration Act 1974 (Cth) LEGISLATION CITED : Motor Accidents Compensation Act 1999 (NSW) Supreme Court Act 1970 (NSW)

Allianz Australia Insurance Limited v MAA [2006] NSWSC 1096 Annetts v McCann (1990) 170 CLR 596 Attorney General (NSW) v Quin [1990] HCA 21 Ex Parte Shaun Investments (1979) 180 CLR 322 Francis Travel Marketing Pty Ltd v Virgin Atlantics Airways Ltd (1996) 39 NSWLR 160 CASES CITED : Lee v Yang [2006] NSWCA 214 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Podrebersek v AI&S (1985) 59 ALJR 492 R v Toohey; Ex parte Meneling Station Pty Limited (1982) 158 CLR 327 T.A. Miller v Minister of Housing [1968] 1 WLR 992 Zurich Australian Insurance Limited v MAA & Anor [2006] NSWCS 845

P: Graham Kelly PARTIES : D1: Motor Accidents Authority of New South Wales D2: Ulrique Hoerning

P: Mr J Griffiths SC, Mr GJ Bellew SC COUNSEL : D1: Mr MA Robinson D2: Mr K Rewell SC, Mr C Jackson

P: Mr S Morgan, Sparke Helmore Solicitors SOLICITORS : D1: Mr B Yeng, Motor Accidents Authority D2: Mr P Clarke, Keddies Solicitors

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Graham Kelly v Motor Accidents Authority of New South Wales & Anor

JUDGMENT 1 HIS HONOUR: The plaintiff seeks orders in the nature of prerogative relief against the Motor Accidents Authority of New South Wales the effect of which orders would be that the Motor Accidents Authority of New South Wales (hereinafter "the Authority") would be restrained from proceeding with a Claims Assessment Resolution Service Assessment Hearing relating to a claim brought by the second defendant arising from a motor vehicle accident on 11 May 2003. 2 The plaintiff originally sought an order also, the basis of which is unclear, that this Court should exercise the power conferred by the Motor Accidents Compensation Act 1999 (NSW) ("the Act") to exempt the claim from assessment by a Claims Assessor and/or the Motor Accidents Authority. In an Amended Summons, that second claim was abandoned and instead orders were sought setting aside the Claims Assessor's decision dated 4 May 2006 rejecting the plaintiff's application for exemption and a further order of the Court remitting the application for exemption to the Principal Claims Assessor for allocation to another Claims Assessor for determination of the application according to law.

3 It was made clear through the course of oral submissions, notwithstanding that the section is not referred to in the Summons or Amended Summons, that the basis for relief was the provisions of s69 of the Supreme Court Act 1970 (NSW) and this Court was being asked to issue prerogative relief.

Facts 4 On 11 May 2003 the second defendant (Ulrique Hoerning) was involved in a motor vehicle accident. He subsequently lodged a claim form seeking damages pursuant to the provisions of the Act. It is accepted that the second defendant's claim for damages was a claim which, if granted, would be for significantly more than $1 million. 5 An application for General Assessment under the Act was then lodged by the second defendant and the matter referred to Assessor Broomfield who has been allocated the claim, presumably under s93 of the Act, and who, by operation of s99(1) is an officer of the Authority. 6 Preliminary conferences were held before the Assessor and directions were made for the service of material by the parties for the purpose of an assessment conference being held. 7 By letter dated 13 April 2006, the plaintiff indicated an intention to make application to the Assessor that the matter be exempt from the assessment process described by Division 2 of Part 4.4 of the Act. I will deal with the statutory provisions shortly. 8 After some initial directions in relation to that particular application, the Assessor listed the matter for a preliminary conference on 3 May 2006. During the course of that conference submissions were made on behalf of the plaintiff and the second defendant (written submissions had previously been filed) and on 4 May 2006 the Assessor refused the plaintiff's application and published "reasons", to which I will also return later in this judgment.

The Legislation 9 The legislation under which the Claims Assessor operates is the Motor Accidents Compensation Act 1999 (NSW), which, while it has undergone already some substantial amendments, was first promulgated, as its title suggests, in 1999 and had effect in respect of motor accidents that occurred after 4 October 1999. The legislation, when first promulgated, was not without controversy. 10 It implemented a special scheme for the resolution of damages arising out of motor vehicle accidents and, in so doing, modified or eliminated common law rights, particular rights to damages for non-economic loss. It is necessary to have an appreciation of the overall operation of the Act. 11 The objects of the Act are set out in s5, which, by virtue of s6, has an effect on the construction of the Act as a whole. Section 5 is in the following terms: "5 Objects of Act (1) The objects of this Act are as follows: (a) to encourage early and appropriate treatment and rehabilitation to achieve optimum recovery from injuries sustained in motor accidents, and to provide appropriately for the future needs of those with ongoing disabilities, (b) to provide compensation for compensable injuries sustained in motor accidents, and to encourage the early resolution of compensation claims, (c) to promote competition in the setting of premiums for third-party policies, and to provide the Authority with a prudential role to ensure against market failure, (d) to keep premiums affordable, recognising that third-party bodily insurance is compulsory for all owners of motor vehicles registered in New South Wales, (e) to keep premiums affordable, in particular, by limiting the amount of compensation payable for non-economic loss in cases of relatively minor injuries, while preserving principles of full compensation for those with severe injuries involving ongoing impairment and disabilities, (f) to ensure that insurers charge premiums that fully fund their anticipated liability, (g) to deter fraud in connection with compulsory third-party insurance. (2) It must be acknowledged in the application and administration of this Act: (a) that participants in the scheme under this Act have shared and integrated roles with the overall aim of benefiting all members of the motoring public by keeping the overall costs of the scheme within reasonable bounds so as to keep premiums affordable, and (b) that the law (both the enacted law and the common law) relating to the assessment of damages in claims made under this Act should be interpreted and applied in a way that acknowledges the clear legislative intention to restrict the level of non-economic loss compensation in cases of minor injuries, and (c) that: (i) the premium pool from which each insurer pays claims consists at any given time of a finite amount of money, and (ii) insurers are obliged under this Act to charge premiums that will fully fund their anticipated liability, and (iii) the preparation of fully funded premiums requires a large measure of stability and predictability regarding the likely future number and cost of claims arising under policies sold once the premium is in place, and (iv) the stability and predictability referred to in subparagraph (iii) require consistent and stable application of the law, and (d) that insurers, as receivers of public money that is compulsorily levied, should account for their profit margins, and their records should be available to the Authority to ensure that accountability." 12 Section 6 requires an interpretation in accordance with the objects and does so in the following terms: "6 Interpretation and application of Act by reference to objects (1) In the interpretation of a provision of this Act or the regulations, a construction that would promote the objects of this Act or the provision is to be preferred to a construction that would not promote those objects. (2) In the exercise of a discretion conferred by a provision of this Act or the regulations, the person exercising the discretion must do so in the way that would best promote the objects of this Act or of the provision concerned." 13 As earlier stated, common law rights to damages for non-economic loss were significantly modified by the operation of the Act: see s131, which prohibits the awarding of damages for non-economic loss unless there is greater than 10% permanent impairment of the injured person as a result of the injury caused by the motor accident. 14 The Act also requires any dispute about whether the 10% threshold has been reached to be resolved by an assessment by a Medical Assessor under Part 3.4 of the Act, the certificate from the Medical Assessor being conclusive evidence in any court proceedings or in any assessment by a Claims Assessor (to which I will return) as to the degree of permanent impairment. It should be noted, that the certificate of the Medical Assessor is evidence (but not conclusive evidence) as to other matters certified. 15 It is perhaps important, in the context of the proceedings now before this Court, to note that the Medical Certificate may be rejected by a court on the basis of the grounds of denial of natural justice or, as the Act refers to it "procedural fairness": see s61(4) of the Act. 16 I have earlier referred to court proceedings or an assessment by a Claims Assessor and reference has already been made to the role of a Claims Assessor. Nevertheless it is important to understand, for the context of these proceedings, that Chapter 4 of the Act deals with motor accident claims. Part 4.1 deals with preliminary matters such as particular definitions, the application of the Chapter and the making, promulgation and effect of Claims Handling Guidelines of the Authority and the Authority's Claims Assessment Guidelines: see ss68 and 69 of the Act. The Claims Assessment Guidelines issued pursuant to the terms of s69 of the Act are of particular importance in the proceedings now before this Court. 17 Part 4.2 deals with the reporting of motor accidents to police and ancillary matters. It deals (see ss 72 and 73) with the making of claims and the timing of them. It also purports to deal with the form of a Notice of Claim and the change to such form. It provides that a person is not entitled to make any admission of liability in respect of a claim without the consent in writing of the person's insurer and it also provides that the insurer is entitled to conduct and control negotiations and to conduct legal proceedings; see particularly s78 of the Act. 18 Part 4.3 of the Act deals with the duties, particularly of an insurer, in relation to the claims. It requires the insurer to resolve a claim "by settlement or otherwise, as justly and expeditiously as possible" and the insurer's licence (under Part 7.1) is made conditional on compliance with that injunction. It is the insurer's duty to give notice "as expeditiously as possible" as to its position on liability and, in the case of denial of the liability or any part of it, particulars as to the extent of any admission. It is also the duty of an insurer "to make a reasonable offer of settlement" within a particular time frame, unless the insurer wholly denies liability for the claim. The insurer is not entitled to delay the making of an offer of settlement under the provisions of s82 of the Act on the ground that particulars have not been provided, or the particulars that are provided are insufficient, unless, on a very strict timetable, the insurer has requested further relevant particulars. Disputes about particulars are referred to a Claims Assessor under s96 of the Act. 19 Further, an insurer must make hospital, medical and other payments prior to a claim being resolved, so long as liability has been admitted either in whole or in part: see s83 of the Act. There are also concomitant duties relating to rehabilitation of the injured person: see s84 of the Act. 20 It can be seen from the above that very specific provisions have been enacted which purport to implement the objects of the Act as described in s5. Certainly the provisions of Part 4.2 and 4.3 of the Act purport to encourage earlier and appropriate treatment and rehabilitation and to resolve compensation for compensable injuries expeditiously. 21 Integral to that system is the operation of Claims Assessors pursuant to the terms of Part 4.4 of the Act. 22 As earlier stated s93 of the Act requires the Principal Claims Assessor ("PCA") to be responsible for making the arrangements allocating any particular claim to a particular Claims Assessor and, by operation of s94, the Claims Assessor makes an assessment of the issue of liability for the claim (absent an admission of liability) and the amount of damages for that liability. 23 Section 94(2) of the Act provides that such an assessment is to be made "having regard to such information as is conveniently available to the Claims Assessor, even if one or more of the parties to the assessment does not cooperate or ceases to cooperate." 24 The Assessor specifies the amount of damages and issues a certificate in relation to the assessment: see s94 of the Act. 25 Section 95 of the Act provides (by operation of s95(1)) that an assessment under Part 4.4 on the question of liability "is not binding on any party to the assessment". 26 Sub-section 95(2) is in interesting terms: "[95] Status of assessments (2) An assessment under this Part of the amount of damages for liability under a claim is binding on the insurer, and the insurer must pay to the claimant the amount of damages specified in the certificate as to the assessment if: (a) the insurer accepts that liability under the claim, and (b) the claimant accepts that amount of damages in settlement of the claim within 21 days after the certificate of assessment is issued." 27 By operation of the provisions of s95(3) it is, once more, a condition of the obtaining or retaining of an insurer's licence that the insurer comply with the provisions of s95. It should also be pointed out that the terms of s151 of the Act provide, that: if the claimant does not accept the damages certified by the Claims Assessor and the matter proceeds to Court, the insurer is liable to pay costs, if the amount of damages awarded by the Court exceeds by certain specified levels (defined by either amounts or percentages) the amount certified under the assessment; and the claimant is liable to pay costs, if the amount awarded by the Court does not exceed that which has been certified (with a limit of $25,000 or as otherwise gazetted for the liability for costs). In any other circumstance the parties would bear their own costs. 28 I return then to the provisions of s95 of the Act. I do so because, in some respects, it holds the key to an understanding of the role of the Claims Assessor which understanding is necessary before the particular issue before the Court can be determined. 29 As earlier stated the Claims Assessor assesses liability (to the extent that liability is in issue). Such an assessment includes the assessment of contributory negligence, if any, and the apportionment of damage based upon the usual principles: see Podrebersek v AI&S (1985) 59 ALJR 492. It requires an examination of the whole conduct of each allegedly negligent party in relation to the circumstances of the accident and the comparative examination of the relative importance of that conduct in causing the damage. It involves making an apportionment between plaintiff and defendant of their respective shares in the responsibility for the damage by a comparison of their respective culpability. 30 Assuming, as is usually the case in a disputed claim, that there is an issue as to liability and the contributory negligence of the claimant, the Claims Assessor will make a non-binding assessment of the relative liability (i.e. the degree, if any, to which damages would be reduced on account of contributory negligence) and would assess damages. If the claimant accepts the level of damage assessed (being the level of damage after reduction for any contributory negligence) and the insurer accepts the apportionment of culpability associated with the assessment on contributory negligence, then the assessment of damage is binding on the insurer and the insurer must pay the claimant the amount of damages specified: see Lee v Yang [2006] NSWCA 214 at [25] and [26]. 31 If, on the other hand, the claimant does not accept the amount of damage, the certified amount of damage is not binding on the claimant. Further, if the insurer does not accept the liability assessed under s94 (including apportionment in any case in which contributory negligence is alleged) the matter must proceed to a court for determination. 32 In those circumstances the only time that a Claims Assessor's determination is binding on a party against that party's will is in circumstances where the insurer does not accept the amount of damages assessed by the Claims Assessor but accepts liability assessed under s94 and the claimant accepts the amount of damages in settlement of the claim. In those circumstances the insurer is, notwithstanding their non-acceptance of the assessment of damage, required to pay the amount of damage: see Lee v Yang, supra. It is unnecessary, for the purposes of these proceedings, to embark upon a discussion (which does not seem to be dealt with fully by the Court of Appeal in Lee v Yang) as to whether, if the matter goes to court in circumstances where the claimant has accepted the amount of damages pursuant to the provisions of s95(2)(b) but the insurer has not accepted liability (either wholly or in that proportion) under s95(2)(a), the insurer is able to challenge the level of damage. It may be that Lee v Yang suggests that they are able to challenge the level of damage in those circumstances. For my own part, I do not see that being permitted, but it is unnecessary to decide it. 33 The difficulty, for my part, is that one must read paragraphs (a) and (b) in s95(2) as qualifying the words "binding on the insurer" and not just "must pay". It would be easier to arrive at such a construction either if there were no comma after the word "insurer", or if there were a comma after the word "assessment" and before the word "if". It is unnecessary to resolve this issue and it does not affect the role of the Assessor. 34 I have taken longer than would otherwise be the case to deal with the provisions of the Act and the status of assessments. The reason that I have done so is that, in order to deal with the issues before the Court in the current proceedings, it is necessary to understand the place of assessments in the scheme of the Act. 35 It is clear from the provisions of the Act that, absent agreement between the parties either before or after the process embarked upon by the Claims Assessor, the parties are not precluded from having the claims assessed in court. If, at the end of the assessment, the insurer does not accept liability, either in whole or that part of the liability assessed, the insurer is entitled to have the matter assessed through proceedings conducted in a court of competent jurisdiction. Similarly, if the claimant (the injured person) does not accept the amount of damage (including any reduction on account of contributory negligence) the claimant is entitled to have the matter assessed in a court of competent jurisdiction. 36 A proper analysis of the scheme of the Act shows that the Claims Assessors' role is the determination of a form of compulsory non-binding (or partially binding) arbitration. The parties are free to accept the arbitration of the Claims Assessor, or they are free to reject it. If they reject it, the matter proceeds to court and is dealt with, subject to the Act, in the ordinary way. There are consequences to the rejection of the assessment process. Those consequences tell in costs and in other ways. The claims assessment process, however, does not preclude a hearing in court. 37 I turn then to the provisions of s92 of the Act which are the focus of the proceedings now before this Court. 38 As earlier stated, the plaintiff in these proceedings applied to the Claims Assessor that the matter be exempt from the assessment process. That exemption may be granted pursuant to the terms of s92 of the Act. Section 92 is in the following terms: "92 Claims exempt from assessment (1) A claim is exempt from assessment under this Part if: (a) the claim is of a kind that is exempt under MAA Claims Assessment Guidelines or the regulations, or (b) a claims assessor has made a preliminary assessment of the claim and has determined (with the approval of the Principal Claims Assessor) that it is not suitable for assessment under this Part. (2) If a claim is exempt from assessment under this Part, the Principal Claims Assessor must, as soon as practicable, issue the insurer and claimant with a certificate to that effect (enabling court proceedings to be commenced in respect of the claim concerned)." 39 It is necessary, because of the terms of s92, to examine the Claims Assessment Guidelines (at least so far as is relevant).

The Guidelines 40 Pursuant to the terms of s106 of the Act claims assessments are subject to the relevant provisions of the Guidelines which are promulgated under s69 of the Act and the Guidelines are subject to the same disallowance provisions as are regulations and other statutory rules. Before issuing Guidelines the Authority is required to consult with the Insurance Council of Australia, the Council of the Bar Association and the Council of the Law Society. 41 The provisions of s92(1)(a) and s92(1)(b) are dealt with in chapter 7 of the Guidelines, the relevant provisions of which are in the following terms: "Section 92(1)(b) 7.6 For the purpose of section 92(1)(b), an assessor may, in dealing with an application for general assessment and following a preliminary assessment of the claim, determine that the claim is not suitable for assessment. 7.7 An assessor may make a preliminary determination that a claim is not suitable for assessment on their own motion or upon application by the claimant, the insurer or both at any time during the course of an assessment. 7.8 If the assessor determines that the claim is not suitable for assessment, the file must be returned forthwith to the PCA for approval with a brief statement of reasons. 7.9 If the PCA approves the preliminary determination under section 92(1)(b) the PCA shall issue a certificate of exemption and notification to the parties within five days of the return of the file from the assessor. 7.10 If the PCA does not approve the preliminary determination, an officer of CARS is to forward the claim to a different assessor for assessment within 10 days of the return of the file from the original assessor. 7.11 In determining whether a claim is not suitable for assessment an assessor and the PCA shall have regard to the circumstances of the claim as at the time of the preliminary determination including: 7.11.1 the heads of damage claimed by the claimant and the extent of any agreement by the insurer as to the entitlement to those heads of damage. 7.11.2 whether the claim involves complex legal issues. 7.11.3 whether the claim involves complex factual issues. 7.11.4 whether the claim involves complex issues of quantum or complex issues in the assessment of the amount of the claim including but not limited to major or catastrophic, spinal or brain injury claims. 7.11.5 whether the claimant has been medically assessed and is entitled to non-economic loss pursuant to section 131 and the claim involves other issues of complexity. 7.11.6 whether the claim involves complex issues of causation in respect of the relationship between the accident, the injuries sustained and disabilities arising from it including but not limited to multiple accidents or pre-existing injuries or medical conditions. 7.11.7 whether the insurer is deemed to have denied liability under section 81(3). 7.11.8 whether the claimant or a witness, considered by the assessor to be a material witness, resides outside the jurisdiction. 7.11.9 whether the claimant seeks to proceed against one or more non-CTP parties. 7.11.10 whether the insurer makes an allegation that a person has made a false or misleading statement within the meaning of section 117."

The Assessor's Function 42 The combined effect of the provisions of s92 of the Act and the provisions, particularly of clause 7.11, of the Guidelines is that the assessor must, for the purpose of s92(1)(b) determine whether a claim that has been made and come before the Claims Assessor is "not suitable for assessment". In determining that question the Assessor (and the PCA) is required to have regard to the criteria adumbrated in clause 7.11. Those issues include whether the claim involves "complex legal issues", "complex factual issues", "complex issues of quantum" or "complex issues in the assessment of the amount of the claim". I do not here repeat each of the criteria listed. 43 In the current proceedings the plaintiff made application, the fundamental basis of which was that the matter involved complex legal and factual issues. These complex legal and factual issues were: "(a) the time which should necessarily be taken in cross-examining the second defendant in respect of both her injuries and disabilities, as well as her claim for economic loss; (b) the necessity to cross-examine medical practitioners in relation to the second defendant's injuries and disabilities and, in particular, the impact of those injuries and disabilities upon the second defendant's ability to undertake employment; and (c) the magnitude and complexity of the claim for past and future economic loss and the resultant necessity to cross-examine inter alia the expert accountants retained by the second defendant in support of that part of her claim." 44 It was the intention of the plaintiff to convince the Claims Assessor that the matter involved a level of complexity which would bring the Costs Assessor to the conclusion that the claim was not suitable for assessment by the Authority. If a matter is unsuitable for assessment by the Authority, it is determined in a court of competent jurisdiction. 45 The word "complex" is, in this context, an ordinary English word and should be given its ordinary meaning. While it may have, once, strictly referred to something which consists of or comprehends various interconnected parts (and is used in a technical sense in psychology and chemistry with meanings derived from that origin) it is now more often used to mean "complicated, involved, intricate, not easily analysed or disentangled". That is one of the definitions given to it by the Oxford Dictionary and is a meaning consistent with that given to it by the Macquarie Dictionary. The Macquarie Dictionary defines "complex" as "1. Composed of interconnected parts; compound; composite. 2. Characterised by an involved combination of parts. 3. Complicated; intricate."

The same dictionary defines "complicated" as "1. Composed of interconnected parts; not simple; complex. 2. Consisting of many parts not easily separable; difficult to analyse, understand, explain etc."

In the context of clause 7.11 of the Guidelines it is used in the sense of "complicated", "not simple", "difficult to analyse, understand, explain". 46 The determination by a Claims Assessor that a claim involves complex legal or factual issues is an evaluative determination, which must necessarily involve a determination of the relative complexity of the legal or factual issues (or any other issue to which the term complex is related) as compared with the norm. As the Claims Assessor arrives at each such evaluation, bearing in mind the ultimate purpose of determining whether the claim is not suitable for assessment, the Claims Assessor is entitled to take into account that, ultimately, any assessment by the Authority need not be accepted by the parties. 47 I have referred to the Claims Assessor's reasons. As is clear from s92 of the Act, the determination of the Claims Assessor that a claim is not suitable has effect only with the approval of the PCA. Reasons are required if the Claims Assessor grants the exemption (Guidelines clause 7.8). I have not, in these reasons for judgment, determined whether the "reasons" of the Claims Assessor are "reasons expressed by the court or tribunal" within s69(4) of the Supreme Court Act 1970 (NSW).

The "Reasons" of the Assessor and the Plaintiff's Case 48 The matters raised by the plaintiff in this Court do not suggest that the Assessor failed to have regard to the criteria in clause 7.11 but rather that the "reasons" of the Claims Assessor indicate that the Claims Assessor did not give some of the criteria "the appropriate degree of weight and to regard such matters as fundamental and focal elements in his decision making process". 49 In that regard it is necessary to set out those parts of the Assessor's comments that the plaintiff describes as "the essence of the reasons" adopted by the Assessor. They are: "It appears to me that the significant issues relate to the extent to which the Claimant has suffered and continues to suffer psychological injury and the impact such has upon her earning capacity. I accept that any calculation of loss of earning capacity will not be straightforward , however I do have the benefit of two competing Forensic Accountant Reports which clearly set out the material upon which such calculations have been made and the assumptions that have been made in making those calculations. From my observation of the medical reports this does not appear to be a case that is outside the realms of cases regularly undertaken by Assessors in this jurisdiction. It has also been asserted that this is a case that is likely to involve extensive cross examination of the Claimant and other witnesses over a period of two days. The proceedings at the Claims Advisory and Resolution Service are inquisitorial by nature and not adversarial as I disclosed to the parties at the Preliminary Conference. Chapter 13 of the Guidelines provides an Assessor with a discretion to determine the manner in which evidence is presented. Having made a preliminary assessment of the medical and Forensic Accounting evidence and being mindful of those matters contained within Chapter 7 of the Claims Assessment Guidelines, I am of the view that this matter remains suitable for assessment and ought be progressed to an Assessment Conference Hearing next week." 50 One of the issues raised by the plaintiff is that the finding of the Claims Assessor referred to above that "any calculation of loss of earning capacity will not be straight forward" is inconsistent, as I understand the plaintiff's Submission, with a finding that the matter is not complex. Moreover, the plaintiff submits that in light of such a finding it is evident that the Assessor failed to give that finding, or the assessment of complexity which was required after such a finding, the fundamental weight which was required by the terms of clause 7.11 and that lack of fundamental weight was a reviewable error going to jurisdiction or an error of law. 51 Further the plaintiff submits that the reference in the above reasons to the matter not being one which is "outside the realms of cases regularly undertaken by assessors in this jurisdiction" shows that the Assessor asked the wrong question and applied the wrong test. Part of the reasoning which is attacked by the plaintiff is that the Assessor misunderstood as a matter of fact the length of the cross-examination and the nature of the issues to be determined. Further, it is said, the Assessor paid insufficient regard to the "inquisitorial" approach of the assessment procedure and the need to obtain material by subpoena and cross-examination. 52 The plaintiff submits, although it is an issue I do not need to decide, that cross-examination is not part of the process of assessment. While there is reference to questioning, the Claims Assessor has the capacity to prevent cross-examination or to prevent some questions. 53 The plaintiff also submits that natural justice does not apply to the assessment because of the inability to cross-examine. This does not necessarily follow. I am not certain that it is necessary to decide this question. On the one hand, the procedure during Claims Assessment is not the subject of challenge, because the claim is not yet at that stage. However, it is said to be a relevant issue because it informs the question of suitability or unsuitability. 54 The Claims Assessment may adversely affect a party's rights. In those circumstances, procedural fairness can only be rendered inappropriate by plain words of necessary intendment: Annetts v McCann (1990) 170 CLR 596 at 598, per Mason CJ, Deane and McHugh JJ. 55 But the content of the rules of natural justice will depend on the task being performed. While it is usually a right of a party to cross-examine; it is not always so: T.A. Miller v Minister of Housing [1968] 1 WLR 992 at 995. It may be sufficient to be informed of the evidence and have the opportunity to controvert. But that may depend on a number of factors including the nature of the decision-maker and the consequence (including whether the party is bound by the decision) and the nature of the evidence and adequacy of other means of controverting. 56 The plaintiff raises the Assessor's reference to chapter 13, the procedures for the adducing of evidence which an Assessor may adopt, as showing a legally erroneous approach which is indicative of an assumption that all matters were prima facie suitable for assessment having regard to the discretion that may be exercised to adopt and implement appropriate procedures. In that regard, the plaintiff relies particularly on the inability of the Claims Assessor to issue subpoenas to third parties and thereby allow the plaintiff to be armed with the material necessary to present its case fairly. 57 Lastly, the plaintiff relies upon the statement by the Assessor that the case "is likely to involve extensive cross-examination of the claimant and other witnesses over a period of two days" and emphasises the reference to "other witnesses" as a passing reference which understates the indication from the plaintiff to the Claims Assessor that there was a need to cross-examine medical practitioners and accounting experts in respect of particular identified issues in the case. As I understand this submission it is not (nor could it be) suggested that medical practitioners and accounting experts cannot properly be described as "other witnesses" but that such a description is indicative of a failure to understand the importance of that cross-examination in the case sought to be put by the plaintiff. 58 The plaintiff also raises the reference by the Claims Assessor to the matter remaining "suitable for assessment", being the wrong question. The plaintiff says, correctly, that the question is whether the claim was "not suitable for assessment", but whether there is a distinction between those two questions is a matter with which I will deal later.

Judicial Review 59 As the Summons makes clear, the plaintiff here seeks judicial review of the determination by the Claims Assessor and, in particular, the failure of the Claims Assessor to find that the claim is "not suitable" for assessment. The plaintiff, however, blurs the distinction between a merits review and judicial review. 60 The High Court in Attorney General (NSW) v Quin [1990] HCA 21 said: "The duty and jurisdiction of the courts to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power, and, subject to legal control for the repository alone. The consequence is that the scope of judicial review must be defined not in terms of the protection of individual interests but in terms of the extent of power and the legality of its exercise. In Australia, the modern development and extension of the law of judicial review of administrative action have been achieved by an increasingly sophisticated exposition of implied limitations on the extent or the exercise of statutory power, but those limitations are not calculated to secure judicial scrutiny of the merits of a particular case. There is one limitation, ' Wednesbury unreasonableness' (the nomenclature comes from Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223), which may appear to open the gate to judicial review of the merits of a decision or action taken within power. Properly applied, Wednesbury unreasonableness leaves the merits of a decision or action unaffected unless the decision or action is such as to amount to an abuse of power: Nottingham Shire County Council v Secretary of State for the Environment [1986] AC 240 at 249. Acting on the implied intention of the legislature that a power be exercised reasonably, the Court holds invalid a purported exercise of the power which is so unreasonable that no reasonable repository of the power could have taken the impugned decision or action. The limitation is extremely confined." 61 The plaintiff's reliance upon alleged error by the Claims Assessor in the determination of that which is complex by a reference to the fundamental nature of the criteria in clause 7.11, is misplaced. It relies upon the passage, inter alia, in the judgment of Gibbs CJ in R v Toohey; Ex parte Meneling Station Pty Limited (1982) 158 CLR 327 at 333. There Gibbs CJ said: "When the section directs the Commissioner to 'have regard to' the strength or otherwise of the traditional attachment by the claimants to the land claimed and to the principles set out in sub-section 4 it requires him to take those matters into account and to give weight to them as a fundamental element in making his recommendations: compare R v Hunt; Ex parte Shaun Investments Pty Limited . When the section directs him to comment on the matters mentioned in pars (a)-(d) of sub-section 3, it requires him to remark upon those matters and to express his views upon them." 62 A passage in the judgment of His Honour Justice Mason (as he then was) is in or to the same effect. His Honour said: "By requiring the Commissioner to have regard to the strength or otherwise of the traditional attachment sub-section 3 ensures that this factor will become a central element in the Commissioner's report." 63 However, it must be emphasised that Mason J went on to say this: "But I do not see that it provides a sound basis for going further so as to impliedly exclude regard for other factors. In this setting the additional requirement that the Commissioner shall comment on the four matters mentioned in pars (a)-(d) inclusive gives emphasis for the need for him to cover them specifically in his report. The object of the requirement, it may be conceded, is to ensure that the Minister is better informed, but this in itself is entirely consistent with the comments forming part of the Commissioner's exercise of his statutory discretion." 64 It cannot be said in the instant proceedings that the Claims Assessor did not have regard to the argument that the matters involved complex legal and factual issues, complex issues of quantum etc. What is complained of is essentially that the Claims Assessor arrived at the determination of the complexity of the matters, which was otherwise in accord with the argument of the plaintiff. It is better illustrated in the passage to which Gibbs CJ refers in Ex Parte Shaun Investments (1979) 180 CLR 322 at 329. There, Mason J said: "When sub-section 7 directs the Permanent Head to 'have regard to' the costs, it requires him to take those costs into account and to give weight to them as a fundamental element in making his determination. There are two reasons for saying that the costs are a fundamental element in the making of the determination. First, they are the only matter explicitly mentioned as a matter to be taken into account. Secondly, the scheme of the provisions is that, once the premises of the proprietor are approved as a nursing home, he is bound by the conditions of approval not to exceed the scale of fees fixed by the Permanent Head in relation to the nursing home. In many cases it is to be expected that the scale of fees will be fixed by ascertaining the costs necessarily incurred and adding to them a profit factor. In the very nature of things, the costs necessarily incurred by the proprietor in providing nursing home care in the nursing home are a fundamental matter for consideration. However, the sub-section does not direct the Permanent Head to fix the scale of fees exclusively by reference to costs necessarily incurred and profit. The sub-section is so generally expressed that it is not possible to say that he is confined to these two considerations. The Permanent Head is entitled to have regard to other considerations which show or tend to show that a scale of fees arrived at by reference to costs necessarily incurred, with or without a profit factor, is excessive or unreasonable. It may be that the rent paid by the proprietor of a nursing home, though a cost necessarily incurred, exceeds the prevailing rental which is paid for comparable premises … The Permanent Head would be entitled to take this factor into account in making his determination. It has to be kept steadily in mind that the function is that of determining the scale of fees in relation to the particular nursing home. It is not a matter of determining a scale of fees for all nursing homes …" 65 Similarly, it has to be borne in mind that which was to be determined by the Claims Assessor was the complexity of the current claim before him (not every claim) and whether that complexity convinces the Claims Assessor that the matter is not suitable for assessment by that process. 66 As a matter of fact, it cannot be suggested that the complexity of the matters to which reference has been made was not a factor considered, even fundamentally considered, by the Claims Assessor. I will turn, however, to the meaning of the criteria in question and how it was a Claims Assessor dealt with those issues. 67 The plaintiff submits that it cannot be the case that the intention of the parliament was that there will never be a matter not suitable for assessment. I do not agree. It may be a consequence of the scheme enacted by the legislation that there never will be a matter not suitable for assessment. Each matter will be determined on its own merits. The legislative scheme envisages a situation where the Claims Assessor has the capacity to determine (and the flexibility that accompanies that capacity) that a matter is not suitable for assessment and to refer it to a court. However there is no requirement embodied in the legislation that any particular matter must be referred, save for those matters that are described by the provisions in s92(1)(a) of the Act. 68 I refer in particular to the judgment of Hoeben J of this Court in Zurich Australian Insurance Limited v MAA & Anor [2006] NSWCS 845. As to the "exceptional nature" of references not otherwise mandated his Honour said: "53 Against that background the scheme of the Act in relation to exemptions from assessment seems to be tolerably clear. Most claims will be assessed in accordance with Part 4.4 of the Act. There will be some claims which are exempt from assessment, but they will be in the minority and be the exception. Lest such exemptions be granted too freely (and thereby defeat the objects and purpose of the Act) strict requirements are imposed before a claim is exempt from assessment. In the case of an exercise of a discretion by an assessor, that requires the approval of the PCA before a certificate of exemption can issue. It follows that if a party to a claim wished to challenge a certificate of exemption, or a determination that a matter was not suitable for assessment under Part 4.4, it could do so for failure to follow the procedure set in place for the granting of such exemptions from assessment. What is less clear (as has arisen here) is what can be done by a party which is aggrieved because either a certificate of exemption from assessment has not been granted or a determination as to non suitability has not been made. 54 The scope for intervention by this Court with regard to administrative decision making is limited. For Zurich to be successful in establishing jurisdictional error it has to bring itself within the principles in Craig v South Australia (1985) 184 CLR 163 at 179: 'If ... an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and a tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.'" 69 This in turn has been cited and adopted by Sully J in Allianz Australia Insurance Limited v MAA [2006] NSWSC 1096. His Honour went on to express the view, derived by Sully J from the Court of Criminal Appeal, as to the approach one should take to the reasoning of a Claims Assessor and the prohibition on subjecting such a reasoning process to a minute and detailed textual 'analysis' in the hope of finding something on which to base an argument. 70 As the second defendant points out in its Submissions in this case, that approach of the Court of Criminal Appeal, as referred to by Sully J, finds its exposition in administrative law in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272: "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 ( McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 at 616). In the present context, any court reviewing a decision upon refugee status must beware of turning a view of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision." (Per Brennan CJ, Toohey, McHugh and Gummow JJ) 71 The High Court went on to cite part of the passage from Attorney General v Quin, to which I have already referred. 72 The distinction drawn by the plaintiff between finding that the matter was one "suitable for assessment" as distinct from finding that the matter was one not "not suitable for assessment" is a distinction without difference. The class of claims that come before the Claims Assessors will consist of two groups, those that are not suitable for assessment (and must be referred) and all other claims. All other claims can properly be described as ones "suitable for assessment". 73 The words "suitable for assessment" when the assessment is a form of compulsory non-binding arbitration may be little different to the term "capable of settlement by arbitration", which has been given a very broad interpretation: see International Arbitration Act 1974 (Cth), s7(2) and, inter alia, Francis Travel Marketing Pty Ltd v Virgin Atlantics Airways Ltd (1996) 39 NSWLR 160.

74 Lastly, I deal with the issue of the merit finding of complexity, even though I am disentitled from so doing. It seems, that the plaintiff's real complaint is that the Claims Assessor determined that the matter was not complex. The Claims Assessor did so on the basis that it was a matter not outside the realms of cases regularly undertaken. As early stated, the determination of a matter as being complex is an evaluative determination. Absent Wednesbury unreasonableness, a comparison between the case that is before the Assessor and cases that otherwise come before Assessors is an assessment of the range of cases usually dealt with and a not unreasonable basis upon which to determine whether a matter is complex and the complexity is such that it requires a reference to a court. 75 As Hoeben J points out, the vast majority of cases will be determined by Claims Assessors. This is the scheme envisaged by the legislature. Further, the parties' rights are reserved because, unless they accept the assessment, the matter must ultimately be dealt with by the courts. 76 The plaintiff's Summons is misconceived. It seeks to portray the Claims Assessor's "reasons" as containing jurisdictional or legal error when in truth the plaintiff is attempting to have this Court embark upon a merit review of whether the matter is not suitable for assessment under Part 4.4 of the Act. 77 The plaintiff's attempt is rejected and the Court makes orders dismissing the proceedings. The plaintiff shall pay the defendants' costs of and incidental to the proceedings. **********

02/02/2007 - style preference - Paragraph(s) 8, 9, 10, 11, 16, 18, 25, 30, 32, 35, 64, 71 and 72

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