IAG Limited t/as NRMA Insurance v Abdelrazek

Supreme Court of NSW|2020-06-17|Before: Adamson J

Solicitors: Hall & Wilcox (Plaintiff) Paul A Curtis & Co (First Defendant) Crown Solicitor's Office (Second and Third Defendants) File Number(s): 2019/375115

Introduction

By summons filed on 28 November 2019, the plaintiff, IAG Limited trading as NRMA Insurance (the Insurer), seeks relief against the decision made by the third defendant, Robert Quickenden (the Assessor), on 24 September 2019 to refuse the Insurer's claim for exemption under s 92(1)(b) of the Motor Accidents Compensation Act 1999 (NSW) (the Act). Had the exemption been granted, the claim made by Sabah Abdelrazek (the Claimant) would have been determined by a court. The effect of the refusal of the exemption, if valid, is that the Claimant's damages will be assessed by the Claims Assessment and Resolution Service (CARS).

The relevant facts

On 29 January 2015, the Claimant, who was then 36 years old, was injured in a motor vehicle accident. On about 11 April 2016, she lodged a claim with SIRA for damages for personal injury against the Insurer. The Insurer accepted liability within the meaning of s 94(1)(a) of the Act by issuing a notice under s 81 on 29 May 2018.
An application for assessment was filed on behalf of the Claimant on 8 May 2019.
The Assessor was appointed by SIRA pursuant to s 99 of the Act.
In its reply dated 13 June 2019 to the Claimant's application for general assessment of damages, the Insurer included an application to the Assessor, pursuant to s 92(1)(b) of the Act for an exemption under Part 4.4 and Chapter 5 of the Act. The sole ground relied on by the Insurer for the submission that the claim was not suitable for assessment was that the Claimant had made various statements that were false or misleading in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident giving rise to the claim (cl 14.16.11 of the "Motor Accidents Claims Assessment Guidelines" (the Guidelines)).
The Insurer alleged that the Claimant had made false or misleading statements as follows: first, she had denied prior accidents despite having been involved in a prior motor vehicle accident and having made a claim arising from injuries sustained in it; secondly, she had falsely stated that she had no pre-existing physical or psychiatric health issues; thirdly, that she had made false or misleading statements to Dr George about her husband's business; fourthly, that she had said she had shut down her own business, contrary to the fact; and, fifthly, she had been employed by a family day care centre that was shut down for alleged criminal activity and fraud. The Insurer's submission made detailed reference to the circumstances in which it alleged that the Claimant had made a particular statement and the circumstances in which the Claimant had made a statement which was inconsistent. It was common ground that these constituted particulars within the meaning of cl 17.13 of the Guidelines (set out below).
On 13 September 2019 the Claimant lodged submissions in reply in which she denied that she had made false or misleading statements and contended that the claim should be assessed by CARS.
On 24 September 2019, the Assessor refused the Insurer's application and provided written reasons.

The reasons of the assessor

The Assessor set out the background to the claim for exemption before summarising the Insurer's submissions in favour of, and the Claimant's submissions in opposition to, the exemption. The Assessor said at [6]: "The application for exemption must consider whether CARS is the appropriate forum for assessment of the claim for compensation with respect to all material factors and circumstances raised in the parties' submissions and in light of allegations of false or misleading statements made by the claimant. In IAG Limited t/as NRMA Insurance v Khaled [2009] NSWSC 20 at (28) Bellew J stated, inter alia: "There is an obvious, and indeed material, common difference between whether or not a matter can be dealt with in the CARS process (in a sense of being capable of being dealt with that way), and whether it is not suitable to be dealt with in that way." His Honour concluded that the CARS assessor in that matter posed the wrong question by asking whether the claim could be dealt with in CARS as opposed to asking whether the claim was not suitable for the assessment in CARS."
The Assessor, at [9] of the reasons, identified cl 14.16.11 of the Guidelines as the primary basis of the Insurer's application for exemption.
The Assessor summarised the Insurer's submissions (with interpolations, which I have italicised in the extract below) at [7] of the reasons as follows: "A summary of the insurers submissions on the grounds for discretionary exemption are as follows: • The claimant has made false or misleading statements in material particulars in relation to injuries loss and damage sustained by the claimant in the accident giving rise to the claim. • The claimant made false and misleading statements about the existence of prior motor vehicle claims, in particular, asserting that she has made no prior claims when she had a motor vehicle accident in 2001, in which she was involved. The claimant suggests whilst involved in the motor vehicle accident in 2001 she made no actual claim. Documents should enable that issue to be tested in CARS or an [sic] in a curial forum. • The claimant made false and misleading statements by maintaining that she had no relevant injury pre-existing the motor vehicle accident. There is a medical history of reported symptoms of anxiety and depression by the claimant as well as medical history detailing complaints of pain arising from injuries caused by the motor vehicle accident in 2001. • Records of the claimant's husband's (Mr Yehia-Sadik Abdelrazek) employment contained in medical records by Dr Graham George may be inconsistent with the claimant's statement that her husband ceased employment to care for her. Again, documents should enable the assessment issue to be determined one way or the other. • The claimant has made false or misleading statements in terms of her business activities. Despite claiming she has lost her "dream job" and is unable to work due to injuries caused by the subject accident, she continued to actively run her business throughout late 2015. The claimant is presently running a separate business by the name of Bridal Dior. She has failed to disclose that she continues to run a business, work and earn an income following the accident. Mr Curtis makes the point that these facts have been disclosed by the claimant and can be sorted out by the usual questioning in the CARS process. • The claimant's place of employment at the time of the subject accident, 'Candy Kids Family Day Care', has recently been shut down and there has [sic] been allegations of fraud against the day care centre. The claimant's evidence, in relation to her work at the centre, is best examined under oath given the allegations against the centre. The claimant has not been charged with any form of fraud or misrepresentation. • There cannot be a fair hearing at CARS on account of the claimant's false or misleading statements as: • The claimant's evidence is not sworn. The credibility of the claimant is in issue. • The insurer does not have the benefit of a Court transcript for cross examination and submissions (the availability of a transcript cannot be assured in the District Court of NSW in my experience). • Reluctant witnesses can be compelled and offered appropriate warnings by subpoena." [Italics added to indicate interpolations by the Assessor.]
In [10]-[21] of his reasons, the Assessor purported to set out the relevant legal principles which apply to an application for exemption under s 92(1)(b) of the Act. The Assessor cited decisions of this Court, including IAG Limited trading as NRMA Insurance v Abiad [2018] NSWSC 1422 (Harrison J); IAG Limited trading as NRMA Insurance v Qianxia Lou [2019] NSWSC 382 (Wilson J); IAG Limited trading as NRMA Insurance v Banos [2013] NSWSC 1519 (Campbell J); Zurich Australia Insurance Limited v MAA NSW & Young [2006] NSWSC 845 (Hoeben J); IAG Limited trading as NRMA Insurance v Milton [2016] NSWSC 1521 (Beech-Jones J); IAG Limited trading as NRMA Insurance v Taylor [2017] NSWSC 507 (Davies J) (Taylor); Allianz Australia Insurance Limited v Tarabay [2013] NSWSC 141 (Rothman J). The Assessor expressly acknowledged that he was bound by those decisions.
He said, at [21]: "In my assessment the focus must be on the claim an Assessor is considering, especially the reasons being advanced (and the contrary reasons), for a recommendation for exemption. Bearing in mind, however, this is not a decision that can be reached by an agreement between the parties. If a recommendation for exemption is made to the Principal Claims Assessor, the legislature has provided that the Principal Claims Assessor has the final say."
Under the heading "Consideration", the Assessor said: "22. The importance of credit, especially the claimant's credit, cannot be underestimated in the CARS or curial process. Often, it is the critical issue. What a claimant states (or misstates) to a medical practitioner (or related practitioner) or in another context as well as what the claimant states to a Tribunal/Court is of fundamental importance in the fair assessment of a motor vehicle accident personal injury claim. It would be surprising if the legislature was not aware of the importance of credit in assessing motor vehicle accident compensation claims in New South Wales. There is no legislative provision which quarantines a credit determination in motor vehicle claims in New South Wales for curial determination. 23. Nevertheless, there are circumstances where a curial determination on credit issues is to be preferred to the CARS process. For example, the CARS process cannot direct (or subpoena) witnesses (other than the parties), to attend an assessment conference. Sometimes there are non-cooperative witnesses who are essential to present the parties' case for the purpose of a fair and just determination of the claim. There can be cases where the CARS process does not enable important documents on credit issues to be available. The curial process can often remedy that problem. The solemnity and consequences in giving evidence on oath or affirmation can be a material factor. In many instances it does not matter what the forum (CARS or curial). The credibility issues can be resolved on a tolerably clear basis having regard to traditional credibility tests of consistency and plausibility. 24. A determination of the appropriate and preferable forum (CARS or curial) is not a simple exercise. The fact most motor vehicle accident claims for compensation in New South Wales have been determined in the CARS process for the last 20 years is of no assistance. Notwithstanding, it may have been the intent of the legislature. Each claim and application is different and must have a considered and specific determination (see Wilson J's remarks in IAG Limited t/as NRMA Insurance v Qianxia Lou [2019] NSWSC 382 at 10-11). 25. The insurer has not articulated how cross-examination under oath or affirmation will better present its case or demonstrate how a court hearing will demonstrate a fairer outcome. At this stage I cannot discern any meaningful distinction in the circumstances this case with evidence being given under oath or affirmation and not being given under oath or affirmation. The inconsistency and/or implausibility in the circumstances here should be patent. The insurer has not suggested there is material that it does not want to disclose that I should take into account in this respect. 26. This assessment was determined with consideration of the following factors: • The claim otherwise does not involve complex legal or factual issues; • The claim is not one involving catastrophic injury; • Apart from the claimant and her husband being required to give evidence under oath (or affirmation), there is no specification of witnesses who will be required to give their evidence on oath (or affirmation). 27. I am not satisfied, on the material available, any of the following would be advanced by a curial hearing: • Evidence under oath (or affirmation). According to the insurer the material relied on by the insurer discloses patent falsity and misrepresentations. I cannot see any advantage to the insurer in a curial setting as distinct from CARS. The CARS process accommodates vigorous questioning and enquiry. Giving evidence on oath or affirmation has dignity not experienced in the CARS process. There are also other consequences for a witness giving evidence in Court as distinct from the CARS process. However, the method and questioning in this instance is tolerably clear and will not disadvantage the insurer based on the material available. • The possibility of subpoena being addressed to third parties. There has been no particularisation or specification to make this a significant factor to consider. Ms Sinclair telegraphed the possibility doctors may need to be questioned. If this cannot take place by the CARS process (by telephone) this would be a significant factor in finding the CARS process was not suitable. However, this is not the case at the present time. There is no specification in relation to what doctors or their records or their unwillingness to cooperate. 28. I am not persuaded the claim needs curial attention. I am not persuaded, at this juncture, the claim is not suitable for CARS Assessment for the same reasons. There is the possibility of other material becoming available which would change my determination. However, based on the material available, I am not satisfied a fair and just hearing requires anything other than a CARS hearing. There is nothing in the material which makes me consider CARS is not the satisfactory forum. 29. The motor accident in question occurred more than four years ago. The claim that is made is significant but it is not a catastrophic injury."
The Assessor concluded: "30. I decline to recommend to the Principal Claims Assessor that the claim be exempted."

Motor Accidents Compensation Act 1999 (NSW)

Section 3 defines "fault" as meaning "negligence or any other tort".
Section 3A provides: "3A General restrictions on application of Act (1) This Act (including any third-party policy under this Act) applies only in respect of the death of or injury to a person that is caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle and only if the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during: (a) the driving of the vehicle, or (b) a collision, or action taken to avoid a collision, with the vehicle, or (c) the vehicle's running out of control, or (d) a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle's running out of control."
Section 5(1)(g) provides that the objects of the Act include "to deter fraud in connection with compulsory third-party insurance".
Section 69(1) provides that SIRA "may issue guidelines for or with respect to procedures for the assessment of claims under Part 4.4 and associated matters". Section 106(1) provides that claims assessments under Part 4.4 "are subject to relevant provisions of [the Guidelines] relating to those assessments".
Section 72 provides for the making of claims within a specified time. Section 81 requires an insurer to inform the claimant in writing "as expeditiously as possible" whether it admits or denies liability for the claim, but in any event within 3 months after the claimant has given notice of the claim under s 72. If an insurer admits liability for only part of the claim, the notice is to include sufficient details to indicate the extent to which liability is admitted: s 81(2).
Part 4.4 is entitled "Claims Assessment and Resolution". Division 2 of Part 4.4 contains provisions relating to assessment of claims and includes s 92, which exempts certain claims from CARS assessment as follows: "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 Motor Accidents 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)."
An application for an exemption under s 92(1)(a) is known as a mandatory exemption application because the exemption is required to be granted. An application for exemption under s 92(1)(b) is known as a discretionary exemption application because the assessor has a discretion whether to exempt the claim.
Section 94 relevantly provides: "94 Assessment of claims (1) The claims assessor is, in respect of a claim referred to the assessor for assessment, to make an assessment of: (a) the issue of liability for the claim (unless the insurer has accepted liability), and (b) the amount of damages for that liability (being the amount of damages that a court would be likely to award). ..."
Part 4.5 provides for claims which are exempted from CARS assessment to be determined in court proceedings.
Section 116 provides that a licensed insurer must take all such steps as may be reasonable to deter and prevent the making of fraudulent claims. Section 117 makes it an offence for a person to make a statement knowing that it is false or misleading in connection with certain matters arising under the Act, including in a claim form. Section 118 provides that a claimant or an insurer has a right of recovery where money has been paid as a consequence of a fraudulent claim.
Section 122 provides: "122 Damages in respect of motor accidents (1) This Chapter [5] applies to and in respect of an award of damages which relates to the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle."

The Guidelines

It was common ground that the Guidelines comprise those which came into effect on 1 May 2014.
Clauses 1.13 and 1.14 of the Guidelines relevantly provide: "Objects of CARS 1.13 The objects of CARS set out in clause 1.14 should be used as an aid to the interpretation of these Guidelines. 1.14 The objects of CARS in dealing with claims and disputes in connection with claims referred are: 1.14.1 to provide a timely, fair and cost effective system for the assessment of claims under the Motor Accidents Compensation Act 1999 that is accessible, transparent, independent and professional; 1.14.2 to assess claims and disputes fairly and according to the substantial merits of the application with as little formality and technicality as is practicable and minimising the cost to the parties; 1.14.3 to ensure the quality and consistency of CARS decision making; …"
Clauses 8.11 and 8.12 of the Guidelines provide in part: "8.11 For the purpose of section 92(1)(a), the PCA shall issue a certificate of exemption when, as at the time of the consideration of the application, and after a preliminary assessment of the claim, the PCA is satisfied that the claim involves one or more of the following circumstances: 8.11.1 liability is expressly denied by the insurer, in writing, but only in circumstances where liability is denied because the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle is denied; (Note: Only denials of liability where fault is denied will satisfy this requirement. Denials of liability for any other reasons, but where the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle is not denied, will not satisfy this requirement.) … 8.11.6 the insurer alleges that the claim is a fraudulent claim in terms of the circumstances of the accident giving rise to the claim. (Note: For example where it is alleged that the accident may have been staged or where a person claiming to have been a passenger in the vehicle is alleged to have been the driver of the vehicle.) Dismissal of exemption application 8.12 The PCA may dismiss an application for exemption made under section 92(1)(a) and clause 8.1 if the PCA is satisfied that: 8.12.1 that the claim may not be exempted in accordance with section 92(1)(a) and clause 8.11 of these Guidelines; …" [Emphasis added.]
Chapter 14 of the Guidelines provides, of present relevance: "Unsuitable for assessment under section 92(1)(b) 14.11 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. … 14.13 If the Assessor determines that the claim is not suitable for assessment, the matter must be returned within 5 days of making such a determination to the PCA for approval with a brief statement of reasons. … 14.16 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 consideration of the claim. This may include, but is not limited to: 14.16.1 whether the claim is exempt under section 92(1)(a) because the claim involves one or more of the circumstances set out in clause 8.11; 14.16.2 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; 14.16.3 whether the claim involves complex legal issues; 14.16.4 whether the claim involves complex factual issues; 14.16.5 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; 14.16.6 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; 14.16.7 whether the claim involves issues of liability including issues of contributory negligence, fault and/or causation; … 14.16.9 whether the claimant or a witness, considered by the Assessor to be a material witness, resides outside New South Wales; 14.16.10 whether the claimant or insurer seeks to proceed against one or more non-CTP parties; and/or 14.16.11 whether the insurer makes an allegation that a person has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident giving rise to the claim. (Note: If an insurer makes an allegation of 'fraud' in terms of the circumstances of the accident, the matter will be exempt under section 92(1)(a) and clause 8.11.6. If an insurer makes an allegation that a person has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident, the insurer may be required to provide particulars in writing of the general nature of any such allegation under clause 17.13, and an Assessor may then consider whether a matter is not suitable for assessment under clause 14.11 to 14.16, particularly in light of clause 14.16.11.)"
Clause 17.13 of the Guidelines provides: "If during the course of an assessment by an Assessor, or the determination by the PCA of an application for exemption, a party makes an allegation that a person has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident giving rise to the claim, the Assessor may require that party to give to the other party and the Assessor particulars in writing of the general nature of any such allegation (but not necessarily the evidence or proof of same), sufficient to enable the Assessor to determine whether or not the claim is suitable for assessment in accordance with the provisions in clauses 14.11 to 14.16."

The grounds

The Insurer contended that the Assessor "misunderstood or misconstrued the scope and nature of his power pursuant to section 92(1)(b) of the Act, asked himself the wrong question and incorrectly applied that power to the [Claimant's] application". It relied on the following alleged particulars of the allegation and contended that each warranted the setting aside of the decision: "i. he approached the question to be determined by asking whether or not certain issues 'can' or 'could' be dealt with at CARS (reasons at [23], and [27]) instead of asking (except in a formulaic fashion) whether the matter was not suitable for assessment; ii. he did not exercise his power consistently with the applicable legislative provisions (when section 92(1) is read with sections 106 of the Act and clauses 8.11.6 and 14.16.11 of the Guidelines) that, in an appropriate case, an insurer's claims ought to be tested in a courtroom and be exposed to the type of forensic examination that the assessment process cannot necessarily provide. His reasons did not acknowledge (and they implicitly denied) the advantages of the curial process, contrary to the legislative intention that a claims assessor is to decide whether a claim should be heard in a forum where a witness's credit may be tested more effectively; iii. he had regard to matters which were not relevant (and which he was not permitted to take into account) to the question of suitability for assessment, including that the subject injury was not a catastrophic injury (reasons at [26] and [29]). Taking into account these matters indicated that he was asking himself the wrong question; iv. By taking into account that that the subject injury was not a catastrophic injury (reasons at [26] and [29]) and it thereby should not be exempted from assessment at CARS, the claims assessor put an impermissible gloss on the legislative intent, wrongly inferring that only or primarily matters involving catastrophic injuries were worthy of exemption under section 92(1)(b) of the Act. v. While accepting that credibility issues were of 'fundamental importance' and they were 'critical issues' in personal injury cases (reasons at [22]) he wrongly found that the credibility issues on the exemption application 'can' be resolved on a 'tolerably clear basis' having regard to 'traditional credibility tests of consistency and plausibility'. In making this determination: i. the claims assessor wrongly made a finding that the matter was suitable for CARS because CARS 'could' hear it. ii. Also, the assessor failed to appreciate the important difference between curial and non-curial hearings of personal injury matters when credit is in issue. Accordingly, he asked himself the wrong legal question. iii. Further, the claims assessor was bound to set out his reasons under the common law and he failed to set out lawful reasons as to what he meant by his determination at [22]. vi.[sic] The claims assessor wrongly determined (at [25] and [27]) that there was no 'meaningful distinction' between given evidence under oath or affirmation (in a court) and not being given evidence under oath or affirmation. This finding undermined the very purpose of section 92(1)(b) and his discretion miscarried in a fundamental way that goes to power. He also wrongly failed to set out lawful reasons as to why there was no such meaningful distinction. vii.[sic] The claims assessor wrongly determined (at [25]) the alleged inconsistency or implausibility as contended in the exemption application 'should be patent'. That is a wrong legal test that is too high. It forms an impermissible gloss on section 92(1)(b)."

The effect of the legislation

Before turning to the grounds set out in the summons (extracted above), I propose to summarise the effect of the legislation.
The determination the Assessor was required to make was whether the claim was "not suitable for assessment under this Part [4.4]". Because the Assessor was bound by the Guidelines (s 106), he was bound by Chapter 14, including cl 14.16. The Assessor was required by cl 14.16 to consider "the circumstances of the claim as at the time of consideration of the claim" and entitled (but not required) to consider any or all of the matters listed in the sub-clauses to cl 14.16.
The effect of the wording of s 92(1)(b) and cl 14.16 of the Guidelines is that, apart from the circumstances of the claim at the time of its consideration, it is a matter for the Assessor to decide what ought to be taken into account and what weight to give particular factors in determining whether the claim is suitable for assessment. As long as the legislation does not, by necessary implication, make any of the matters taken into account by the Assessor irrelevant, the Assessor will not be in error in taking them into account: Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 38-41 (Mason J); [1986] HCA 40 (Peko-Wallsend).

General principles relating to the Assessor's obligation to give reasons

The Assessor's reasons are not to be construed minutely or finely with an eye attuned to the perception of error: see the summary of authorities in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272 (Brennan CJ, Toohey, McHugh and Gummow JJ); [1996] HCA 6 (Liang).
Since the Assessor refused the exemption, he had no statutory duty to give reasons: cf. cl 14.13 of the Guidelines (which provides that if an assessor determines that the claim is not suitable for assessment and grants an exemption accordingly, a "brief statement of reasons" is required). However, an assessor who refuses an exemption has a duty implied by the common law to give reasons: Insurance Australia Ltd t/as NRMA Insurance v Wannous [2020] NSWSC 694 at [31]-[33] (Beech-Jones J) (Wannous). Beech-Jones J described the content of the duty at [36] as follows: "There remains to consider the content of the implied duty of reasons in this case. Given that s 92(1)(b) only requires a 'preliminary assessment' of the claim, it is unlikely that there will be factual disputes that arise when an exemption is sought (see Milton at [25] to [26] and cases cited; cf Vegan at [121]). Further, given that ultimately a determination under s 92(1)(b) is a procedural step (albeit important) leading to the determination of a claim either under s 94(1) or by a court, then in many cases 'to fulfil a minimum legal standard, the reasons need not be extensive or provide detailed explanation of the criteria applied' (Vegan at [122]). However, given that the Guidelines have been promulgated and, in this case were relied on by the Insurer, then to conform with the implied obligation in this case the Claims Assessor was obliged to state, at least briefly, whether the preliminary assessment of the claim meant that it fell within the type of cases listed in clauses 14.6.1 to 14.6.11 of the Guidelines and, if so, what regard was had to that circumstance in denying the request for exemption. Overall, a claims assessor is obliged to state what it was about the preliminary assessment of the claim that warranted a non-acceptance of the contention that it was not suitable for assessment. Otherwise, if it were the case that a claims assessor considered that the claim was not suitable for assessment, but the Principal Claims Assessor did not agree, then that should be stated."
While reasons are to be read fairly as a whole and a beneficial construction given, there is no principle which requires ambiguity to be resolved in the decision-maker's favour: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Abigroup Contractors Pty Ltd [2013] FCAFC 148 at [190] (Katzmann and Rangiah JJ).

Ground i: alleged posing of the wrong question

The Insurer contended that the Assessor had asked the wrong question: namely, whether certain issues "can" or "could" be dealt with in a CARS assessment, rather than asking, as required by s 92(1)(b) of the Act, whether the matter was not suitable for CARS assessment. Mr Robinson SC, who appeared with Ms Gumbert for the Insurer, accepted that the Assessor posed the correct test at the outset and the conclusion of his reasons. He submitted, orally, that the sandwich was all right but the filling was not because the Assessor, having stated the correct test and cited the applicable authorities, applied neither the correct test nor the principles from the authorities. He described the Assessor's statement of the correct test as "formulaic": see Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245; (2018) 233 LGERA 170 at [32]-[33] (Basten JA). Although he did not go so far as to say that the Assessor had abused his power by cloaking his decision with the "appearance of conformity" (citing Liang at 266), he contended that the Assessor had resorted to incantation of the statutory language and had not given reasons which were sufficient to demonstrate that he had applied it. I do not accept this submission.
I accept the submissions made by Mr Ryan, who appeared on behalf of the Claimant, that it is plain from the Assessor's reasons (and, in particular [6]) that he appreciated that the overriding question was one of suitability, not capacity, and understood the distinction between the two concepts. Indeed, it was common ground that the claim was one which fell within the discretionary exemption in s 92(1)(b) and not within the mandatory exemption in s 92(1)(a). In these circumstances, it must have been accepted that the claim could have been dealt with by a CARS assessment and would only not be dealt with in that way if it were exempted by the Assessor on discretionary grounds. In determining whether the matter was "not suitable" for CARS assessment, the Assessor was entitled to compare the relative advantages and disadvantages of a CARS assessment and a court hearing.
Not only did the Assessor cite the relevant sections of the Act and the Guidelines, but he also expressed the test in terms in his reasons in the introduction at [6] and in his conclusion at [28]. His reasons demonstrate his appreciation of the task which was required to be performed and that he gave proper, genuine and realistic consideration to the correct question. I am not persuaded that the Assessor did other than apply the correct statutory test.

Ground ii: alleged exercise of power inconsistent with legislation

The Insurer submitted that the Assessor implicitly denied the advantages of the curial process, notwithstanding that the legislation acknowledged them. The Insurer contended that the Assessor had not exercised his power consistently with the legislation and cited ss 92(1) and 106 of the Act and cll 8.11.6 and 14.16.11 of the Guidelines.
The relevant distinction drawn by the Act and the Guidelines is between the circumstances of the accident relevant to the Insurer's liability on the one hand and matters relating to damages on the other. So much is plain from s 92(1) of the Act and cll 8.11 and 8.12 of the Guidelines. Relevantly, the only matters which are required to be exempted are those where the Principal Claims Assessor (PCA) is satisfied that liability is denied by the Insurer on various bases which include where fault of the owner or driver in the operation of the vehicle is denied (cl 8.11.1), or where it is alleged that the accident may have been staged or the person claiming to be a passenger is alleged to have been the driver (cl 8.11.6).
It may be that the underlying policy behind Chapter 8 of the Guidelines is the assumption that such matters concerning liability are better determined in courtrooms than by CARS. However, this policy is expressed neither in the legislation or the Guidelines. Nor, even if this policy can be discerned, can it be extrapolated into assessments of damages to give rise to a general proposition that all matters which relate to the credibility of a claimant or a witness are better determined in a courtroom than in a CARS assessment.
Indeed, it will be few cases where the credibility (in the sense of reliability) of a claimant is not sought to be tested, at least to some extent, by an Insurer, whether in the course of a CARS assessment or a court hearing. As Lord Pearce said in Onassis v Vergottis [1968] 2 Lloyd's Rep 403 at 431: "It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active."
It is a matter of common experience in courts that claimants may, whether knowingly or otherwise, attribute symptoms disproportionately to a single compensable accident and forget, or omit to appreciate the relevance of, pre-existing health problems or their magnitude, particularly where the symptoms of such problems have been aggravated by the subject accident. These tendencies may be exhibited by otherwise honest claimants whose recollection is affected by the course of events, the passage of time or the consequence of the claims or curial process which may tend to accentuate the effects of a particular event.
Mr Robinson contended that although the Assessor had correctly identified decisions of this Court which were binding on him he had failed to act in accordance with them. Both parties had recourse to decisions, including those of single judges who have been required to determine whether a plaintiff is entitled to relief under s 69 of the Supreme Court Act in respect of decisions such as a decision to refuse an application for exemption under s 92(1)(b) of the Act. Although it is beneficial for this Court to be assisted by other decisions in the area, sight ought not be lost either of the statutory language or of the circumstance that relief under s 69 requires demonstration of an error of law on the face of the record or jurisdictional error. This latter consideration has the effect that judgments in respect of decisions by assessors who necessarily gave reasons in different fact situations rarely stand for matters of general principle. There is a risk that, in extracting apparently helpful dicta, a proposition will become a gloss on the statutory language. This is to be avoided. The Court is bound, first and foremost, by the language of the Act and the Guidelines, as is the Assessor.
Mr Robinson argued that the Assessor's decision was inconsistent with the following passage from the judgment of Davies J in Taylor at [34]-[36]: "[34] First, it is of significance that all that is necessary for the Assessor's discretion to be triggered with regard to an exemption on this ground is an allegation by the insurer. Subject to the requirement by an assessor to provide particulars pursuant to cl 17.13 of the Guidelines that is all that the insurer needs to do for the Assessor to be required to determine whether the claim is not suitable for assessment. Indeed, cl 17.13 when dealing with a requirement that a party give particulars in writing of the general nature of any such allegation, the clause adds "but not necessarily the evidence or proof of same". [35] Secondly, it is significant that there is a corresponding provision for an allegation by the insurer in cl 8.11.6 in relation to a fraudulent claim. Such an allegation results in a mandatory exemption of the matter from an assessment. The matter referred to in cl 14.16.11 can on one level be seen as the corresponding provision to cl 8.11.6 in respect of damages, although without the mandatory exclusion when such an allegation is made. Although the use of the phrase 'tantamount to fraud' by the insurer in the present case might be thought to deflect the proper enquiry, what might be being alleged in any given case under cl 14.16.11 could be as serious as a fraudulent claim: eg Tarabay at [57] and [66]. [36] It can be reasonably inferred from the mandatory exemption in relation to a fraudulent claim that the absence of sworn compellable evidence with a right of cross-examination in the CARS process meant that neither truth nor fairness to the parties was likely to be achieved other than in a court hearing where, additionally, the rules of evidence apply. That is a relevant consideration where it is alleged a false or misleading statement has been made."
I do not discern any inconsistency between what Davies J said in the passage extracted above and the Assessor's decision to refuse an exemption or his reasons for the refusal. Davies J accepted (as is evident from the distinction between s 92(1)(a) and s 92(1)(b)) that, while an allegation of fraud relating to the circumstances of the accident itself will lead to a mandatory exemption, an allegation that a false or misleading statement has been made will not necessarily lead to an exemption, although it will provide a ground for an exemption. Matters of credibility, though relevant under s 92(1)(b), are not determinative.
The Insurer further contended in its submissions in respect of ground ii that the Assessor failed to address the following considerations raised by the Insurer: that the questioning of the Claimant was at the discretion of the Assessor, and that there was no transcript available and no right of appeal. Since the alleged error is not one on the face of the record, the Insurer must establish that it is a jurisdictional error for the purpose of this Court's jurisdiction under s 69 of the Supreme Court Act.
I do not accept that these matters were mandatory relevant considerations in the Peko-Wallsend sense. The Assessor was required to consider them as part of his duty to accord procedural fairness to the Insurer, not because they were per se mandatory relevant considerations. In so far as the Insurer alleged that the Assessor's reasons were inadequate, I do not accept that it was necessary for the Assessor to address in his reasons each argument raised by the Insurer, although he was obliged to consider such arguments.
However, I consider that the Assessor did address the question of the availability of transcript by inserting in parentheses "the availability of a transcript cannot be assured in the District Court of NSW in my experience" in his extract of the Insurer's submissions at [7] of the reasons.
As to the argument that the questioning of the Claimant was at the discretion of the Assessor, the claim had been allocated to the Assessor. Thus, unless it was exempted it would be assessed by him. I read the Assessor's observation that the "CARS process accommodates vigorous questioning and enquiry" as an acknowledgment that he would, in the circumstances of the present case, be required to allow the Insurer to cross-examine the Claimant about the various matters raised, if no exemption was granted. I am not persuaded that the Assessor committed an error of law, much less a jurisdictional error.
The Insurer also submitted that the Assessor was in error in conducting a prospective assessment when he was confined to the circumstances at the time the claim was being considered. I reject this submission. The Assessor was entitled to envisage the way in which the assessment would be conducted, on the basis of present information, when deciding whether to grant an exemption under s 92(1)(b) of the Act. At [28] of the reasons, he expressly indicated that his decision was made on the information available to him at the time of the decision.
I am not persuaded that ground ii has been made out.

Grounds iii and iv: alleged taking into account of irrelevant considerations (that the injuries were not catastrophic)

The Insurer alleged that the mention by the Assessor of the circumstance that the injuries were not catastrophic (in [26] and [29] of the reasons) indicated that he took into account irrelevant considerations. As referred to above, a consideration will only be irrelevant as a matter of law if the Assessor is bound, by express words or necessary implication, not to take it into account.
That the Insurer put its application for an exemption on the basis of cl 14.16.11 of the Guidelines does not make the other matters in cl 14.16 irrelevant as a matter of law to his decision or otherwise (subject to the requirements of procedural fairness) give rise to an error of law if the Assessor takes them into account. Clause 14.16.5 includes a reference to catastrophic injury claims. It appears to have been common ground that the Claimant did not suffer a catastrophic injury in the accident. In these circumstances, the Assessor's reference to the injuries not being catastrophic is not legally erroneous: see Insurance Australia Limited t/as NRMA v Howard [2019] NSWSC 224 (Howard) at [40].
I reject the Insurer's submission that the Assessor's reasons, fairly read as a whole, give rise to the implication that he considered that only, or primarily, matters in which a claimant suffered catastrophic injuries warranted exemption under s 92(1)(b) of the Act. The references in [26] and [29] of the reasons to the Claimant's injuries not being catastrophic are, in my view, descriptive and uncontroversial. I discern no implication from the reasons that the Assessor considered that only claims which involved catastrophic injuries warranted an exemption under s 92(1)(b) of the Act.

Ground v: alleged error in relation to credibility

The wording of ground v (set out above) is consistent with the allegation that it was not open to the Assessor not to grant an exemption. I note that Mr Robinson confirmed that no allegation of legal unreasonableness in the sense referred to in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 at [76] (Hayne, Kiefel and Bell JJ) was made.
It is necessary to address the five sub-grounds to ground v.

Sub-ground i: alleged non sequitur

The Insurer submitted that the Assessor found that the matter was suitable for CARS because CARS "could" hear it. This would appear to be a restatement of ground i, which has been addressed above.

Sub-ground ii: alleged failure to appreciate the important difference between curial and non-curial hearings

The Insurer alleged that the Assessor had asked himself the wrong legal question by failing to appreciate the important difference between court hearings and CARS assessments.
It is plain from his reasons that the Assessor was aware of the differences between court hearings and CARS assessments. Indeed, he specifically addressed the differences. The Assessor referred to the circumstance that witnesses in CARS assessments are not required to give evidence by oath or affirmation ([26] and [27]) and acknowledged that "[g]iving evidence on oath or affirmation has dignity not experienced in the CARS process". He also referred to the consequences for a witness giving evidence in court as compared with CARS (which I take to be a reference to susceptibility to a charge of perjury contrary to s 327 of the Crimes Act 1900 (NSW), which is limited to judicial proceedings or making a false statement on oath contrary to s 330 which is limited to statements on oath). However, the Assessor concluded that the Insurer would not be disadvantaged "on the material available" by the CARS process, in which the Claimant and her husband would be questioned. The Assessor also noted that a party can subpoena witnesses to attend court but not a CARS assessment but, in substance, discounted this factor by noting that no particular witness who was unwilling to co-operate had been identified.

Sub-ground iii: alleged failure to give reasons

The Insurer alleged that the Assessor was bound to give reasons at common law (a proposition established by Wannous (extracted above)) and failed to set out the reasons for the determination he made in [22].
Paragraph [22] of the Assessor's reasons is set out above. In substance, the Assessor said that credibility of a claimant may be relevant and important to the assessment of damages where liability is admitted. The Assessor concluded that the legislature, which can be taken to have appreciated the potential importance of credit to an assessment of damages, has not seen fit to mandate exemption from the assessment of damages by CARS where credit is in issue. I regard the Assessor's reasons as being sufficient to explain what is a matter of incontrovertible and compelling inference from s 92(1) of the Act and the Guidelines.
Mr Robinson took exception to some of the language used by the Assessor, including the expression "tolerably clear" (which was used on at least three occasions in the reasons). It is significant that an assessor is not required by the Act to be a legal practitioner. In any event it is not appropriate that an assessor's reasons be held to a judicial standard: see, in the context of s 126 of the Act: Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 at [53] (Basten JA, McColl and Macfarlan JJA agreeing), which I applied in the present statutory context in Howard at [58]. I consider the meaning of the phrase "tolerably clear" to be apparent from its context.

Sub-ground vi: alleged failure to appreciate 'meaningful distinction' between giving evidence on oath or affirmation and not being required to do so

The Insurer contended that the Assessor, in [25] and [27] of the reasons, wrongly determined that there was no "meaningful distinction" between giving evidence on oath or affirmation and not being required to do so.
The Assessor expressly acknowledged that there was a distinction between giving evidence on oath or affirmation and not being required to do so. At [23], the Assessor referred to the "solemnity and consequences" of the former as being potentially material. At [27], a similar point was made with the word "dignity" being selected to describe the giving of evidence on oath or affirmation as well as there being a reference to the consequences of giving evidence in that way.
However, the Assessor plainly concluded that these differences would not materially disadvantage the Insurer. He found, at [25], that the Insurer had not articulated how this would make a difference to the Insurer. In these circumstances, it was open to the Assessor to conclude that he could not discern any "meaningful distinction". His reasons were adequate to explain his conclusion.

Sub-ground vii: alleged erroneous requirement that the inconsistency be patent

The Insurer alleged that the Assessor's reasons at [25] showed that he applied the wrong legal test in requiring that any inconsistency or implausibility be "patent". The Insurer submitted that the Assessor had placed a gloss on s 92(1)(b) which led to legal error. As is apparent from [25] extracted above, the Assessor's view was that the "inconsistency and/or implausibility in the circumstances here should be patent". I understand the word "should" in this context to be synonymous with "is likely to be" as distinct from "must be".
When the Assessor's reasons are read as a whole, it can readily be seen that the Assessor said no more than that there was an apparent inconsistency between what the Claimant has said, in her claim or in statements in support of her claim, and other incontrovertible or documentary evidence relied on by the Insurer. For example, the Insurer contended in its submissions to the Assessor (which contained detailed particulars of what the Claimant had said in various situations and identified the provenance of statements alleged to be inconsistent) that the Claimant's statement that she had not made a prior claim was "false and misleading". The Assessor appreciated from the Insurer's submissions that it had documentary evidence of a claim made by the Claimant arising from a motor vehicle accident in 2001. It was in this context that the Assessor used the word "patent" since the inconsistency can be proved by the contrast between the Claimant's written statement and the existence of a claim by her. The other matters listed in the dot points in [25] would appear to fall into a similar category. I understand the Assessor to have said that cross-examination of the Claimant could proceed in CARS by reference to documents which established the inconsistency just as it could proceed in a court room because the inconsistency was patent. I do not regard the Assessor as concluding that the patency or otherwise of the inconsistency was determinative. Rather, I understand him to have considered this to be a factor which militates against the grant of an exemption. This view was open to him. I am not persuaded that there was any error of law on the face of the record or jurisdictional error.

Conclusion

The Insurer has neither established an error of law on the face of the record nor jurisdictional error. The Assessor's reasons were sufficient to explain his path of reasoning and his conclusion. There is, accordingly, no warrant for this Court to intervene.

Costs

It was common ground that costs ought follow the event in accordance with the usual rule: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

Orders

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

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 June 2020

(2018) 233 LGERA 170

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