Insurance Australia Limited t/as NRMA v Howard

Introduction

1. By summons filed on 21 September 2018, the plaintiff, Insurance Australia Limited, trading as NRMA Insurance (the Insurer), seeks to have the decision of the third defendant, Robert Quickenden (the Claims Assessor), made on 25 June 2018 to refuse the insurer's application for exemption from the Claims Assessment and Resolution Service (CARS) (the Exemption Decision), set aside.
2. The effect of the Exemption Decision was that the amount of damages payable by the Insurer to the Claimant was determined by the Claims Assessor. Had the exemption been granted, the damages would have been assessed by a court.
3. The assessor was appointed by the second defendant, State Insurance Regulatory Authority (SIRA). The first defendant, Brendan Howard (the Claimant), claims damages suffered as a result of injuries sustained in a motor vehicle accident for which the insurer has accepted liability. The Claimant is the only active defendant, SIRA and the Claims Assessor having filed submitting appearances.
4. All references to legislation in these reasons are to the Motor Accidents Compensation Act 1999 (NSW), unless otherwise indicated.

Guidelines

1. 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". These guidelines are known as "Motor Accidents Claims Assessment Guidelines" (the Guidelines). Section 106(1) provides that claims assessments under Part 4.4 "are subject to relevant provisions of [the Guidelines] relating to those assessments".

Claims assessment and resolution

1. Part 4.4 is entitled "Claims Assessment and Resolution". Division 1A of Part 4.4 contains provisions relating to document exchange and settlement conferences before claims assessment. Division 2 of Part 4.4 contains provisions relating to assessment of claims and includes s 92, which exempts certain claims from CARS assessment 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 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).
2. 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.
3. Division 3 of Part 4.4 contains provisions relating to claims assessors and includes s 100, which empowers claims assessors to require the production of documents from third parties. There are also provisions which empower claims assessors to summons parties (but not witnesses) to an assessment (s 102). Section 104 makes provision for proceedings before claims assessors and provides, by s 104(6), that in certain circumstances the assessor may assess the claim without holding any assessment conference or final hearing.
4. Part 4.5 provides for claims which are exempted from CARS assessment to be determined in court proceedings.
5. 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.

The Guidelines

1. It was common ground that the Guidelines comprise those which came into effect on 1 May 2014.
2. 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; …
3. 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.) … 8.11.3 the claimant, or in a claim for an award of damages brought under the Compensation to Relatives Act 1897 one of the dependents, is a 'person under a legal incapacity'; 8.11.4 the person against whom the claim is made is not a licensed or other CTP insurer; 8.11.5 the insurer has notified the claimant, and the owner or driver of the motor vehicle against which the claim has been made under the third-party policy provided for in section 10 of the Act, in writing, that it declines to indemnify that owner or driver; and/or 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; …
4. 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.)
5. Chapter 17 of the Guidelines provides, relevantly: 17.13 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.

Court proceedings on claims as compared with CARS assessments

1. It is common ground that a party to court proceedings is entitled to a hearing, may obtain documents on subpoena issued at the party's request and is entitled to cross-examine the other side's witnesses. As court proceedings are run in accordance with the adversary system, the judge generally allows the parties to conduct the proceedings themselves in accordance with forensic decisions made by their legal representatives. Typically, the parties are allocated time in court in accordance with their estimates of the length of the hearing. If the estimate proves to be insufficient, the judge will generally allocate more time for the parties to conclude the hearing.
2. This process is to be compared with that which applies for CARS Assessments. Mr Robinson SC, who appeared with Ms Lucy for the Insurer, informed me that such assessments are conducted in barristers' chambers or solicitors' offices and generally take in the order of half a day. The parties may only obtain documents from third parties by requesting that the claims assessor direct production under s 100. An insurer's opportunity to cross-examine a claimant may be curtailed by the claims assessor. There is no right to have medical experts or third party witnesses attend to give evidence.

The factual background

1. On 26 February 2014 the Claimant suffered injuries in a motor vehicle accident for which the Insurer accepted liability under s 94(1)(a).
2. On 20 December 2017 the Claimant lodged a CARS 2A General Assessment Application. On 21 February 2018 the Insurer lodged an application for assessment of a treatment dispute in respect of future treatment and care. The Insurer applied for an adjournment of the assessment conference (listed for 8 May 2018) pending resolution of the treatment dispute. On 11 April 2018 the Claims Assessor refused the Insurer's application for an adjournment. On 2 May 2018 the Insurer applied for a discretionary exemption pursuant to s 92(1)(b) on the basis of cl 14.16.11 of the Guidelines (see above). It also made a further application for an adjournment based on its discretionary exemption application. On 7 May 2018 the Claims Assessor vacated the assessment conference and allocated 8 May 2018 for the hearing of the Insurer's discretionary exemption application.
3. On 25 June 2018 the Claims Assessor refused the Insurer's discretionary exemption application and made the Exemption Decision. The reasons for the Exemption Decision will be addressed in detail below.
4. The assessment hearing took place on 3 July 2018. Both parties have adduced affidavit evidence as to what occurred. As neither deponent has been required for cross-examination, I accept the evidence of both Ms Daunt (the Insurer's solicitor) and Mr Dous (the Claimant's solicitor). According to Ms Daunt, who instructed Mr O'Dowd, who appeared on behalf of the Insurer at the assessment hearing: "The Assessor was asked to advise on the question of whether this matter should remain in CARS. The Assessor refused to recommend that the claim be exempted. [Mr O'Dowd said:] As such, this matter may find itself the subject of administrative review. This matter should be in a curial environment. However, we will proceed in the ordinary way for today's purposes."
5. According to Mr Dous, the Claims Assessor responded by saying: "Mr O'Dowd do you wish to make a further application for exemption?"
6. Mr O'Dowd, after speaking with Ms Daunt, said: "No, we are here to participate in the CARS Assessment."
7. Thereafter the Claims Assessor proceeded with the claims assessment. On 7 August 2018 the Claims Assessor issued a certificate certifying the Claimant's damages in the amount of $324,874.49 and costs and disbursements of $47,771.06 (the Assessment Decision).

The grounds on which the decisions are challenged

1. The Insurer sought to set aside the Exemption Decision. It was common ground that setting aside the Exemption Decision would require the Assessment Decision also to be set aside, subject to the court's discretion to refuse relief on discretionary grounds.
2. The grounds, as set out in the summons, are: 1. "The claims assessor misunderstood or misconstrued the scope and nature of his power pursuant to s 92(1)(b) of the Act and he incorrectly applied that power to the applications. He wrongly approached the question to be determined on the basis that the exemption sought would or should only be available in cases of 'catastrophic injury'. As the subject injury of the first defendant was not catastrophic, the exemption would not be granted. This approach was wrong in law. It was not the correct legal approach. Accordingly, the decision is invalid." (Catastrophic injury ground) 2. "Aspects of the claims assessor's reasoning were not rational or logical and the exemption decision is thereby invalid for legal unreasonableness. For example, in his list of matters (reasons at [28]) that he determined would not be advanced by a curial hearing is simply not logical or rational, especially the second bullet point. The last paragraph of his decision (at [29]) merely contains a list of conclusions that are made without any reasoning at all. The decisions are thereby invalid." (Legal unreasonableness ground) 3. "The claims assessor wrongly based his determination (reasons at [29]) on the evidence or material that was then before him instead of him considering and relying on the allegations made by the plaintiff of the first defendant's false and [sic, or] misleading statements that were made pursuant to cl 14.16.11 of the guidelines. He wrongly held that other 'material' might change his mind to refuse the exemption. This observation establishes that he was asking himself the wrong question. He was wrongly looking for evidence which substantiated or disproved the plaintiff's allegations." (Allegations ground)
3. As each of these grounds turns on the reasons given by the Claims Assessor for the Exemption Decision, I propose to summarise the reasons and, where necessary, include extracts from them.

The reasons for the Exemption Decision

1. After setting out the nature of the application for exemption, the Claims Assessor summarised the Insurer's submissions as follows: "10. The Insurer's submissions disclose the following: The insurer alleges the claimant has made false or misleading statements in a material particular in relation to the injuries, loss or damage sustained by the claimant giving rise to the claim. The clinical records from Glenmoore Park Medical Centre indicate that the claimant has experienced longstanding back pain prior to the accident. This back pain necessitated a CT scan of the lumbar spine and referral to an orthopaedic specialist in 2006. It was also reported the claimant was-already attending a chiropractor and naturopath. The CT scan showed spondylolisthesis of L5/S1. The claimant gave a history to his treating orthopaedic specialist on 14 August 2006, that he had a history of intermittent lumbar spinal pain, dating back to 1997. The claimant reported he had been previously treated by a chiropractor and osteopath. The claimant reported he had aggravated his back injury during weight training with his father. The orthopaedic surgeon noted that the CT scan showed a grade 1 spondylolisthesis at L5/S1. There was mild impingement of the left L5 nerve root at the exit foreman [sic]. The claimant's treating specialist determined that his lumbar spinal pain was related to his tight hamstrings causing forward pelvic tight [sic, tilt] and hyperlordosis at his lumbar spine, aggravating his underlying lumbar spondylolisthesis. The claimant was subsequently referred for physiotherapy. In December 2010 the claimant reported acute chronic lower back pain to his general practitioner. The claimant was advised to rest and was referred for x-ray. The x-ray of the lumbar spine demonstrated slight curvature, convexed to the left, centred at the thoracolumbar junction. At page 14 of the personal injury claim form dated 27 February 2014 the claimant declared that he did not have any other injuries, disabilities or illness, before or since the accident, to the same part(s) of his body. The claimant was assessed by Dr N Assem on 29 September 2014. Dr Assem recorded at page 2 of his report that the claimant denied previous accidents, injuries or complaints involving his neck, shoulders or lower back. There were no other relevant medical or surgical conditions reported. On 6 December 2016 the claimant was assessed by Dr R Muratore, qualified by the insurer. The claimant reported having no previous injuries, Illnesses or surgical procedures. Further, that the claimant was a sickly child until the age of about 10 years and was then fit and healthy, not needing to see a doctor until after the subject motor vehicle accident. At paragraph 6 of the claimant's signed statement dated 13 November 2017 the claimant reported that he was physically very fit and healthy. Further, he had no previous significant injuries."
2. The Claims Assessor noted the Insurer's submissions as to why the claim was not suitable for CARS Assessment as follows at paragraph [11] of the reasons: "The claimant's evidence needs to be tested under oath; In curial proceedings a transcript is available; Any necessary witness can be called and compelled to give evidence; Subpoenas can be issued; Evidence can be given by qualified medical experts who can be compelled to attend."
3. The Claims Assessor summarised the claimant's submissions in response as follows at [12] of the reasons: "The gross delay of the insurer in bringing the application; The lack of any factual or legal complexity in the claim; It has always been the claimant's case that he had previously experienced some aches and pains (in paragraph 7 of his statement dated 13 November 2017 and confirmed in the statement of 7 May 2018). The exemption application, is a delaying tactic, to ensure the treatment dispute is determined before the claim is assessed."
4. The following section of the reasons, entitled "Legal Principles" appears in paragraphs [13]-[26]. It was common ground that the Claims Assessor correctly summarised the relevant principles and referred to the relevant authorities and portions of the Guidelines. The Claims Assessor's identification of the relevant task at [18]-[19] of the reasons has not been the subject of challenge. He said: "18. A significant issue to take into account in assessing suitability is whether the parties can be afforded a fair hearing, having regard to the nature of all issues that arise in the claim and in particular having regard to what has been stated by a number of justices in the Supreme Court of NSW on this issue. In doing this an Assessor should consider which mode of hearing (CARS or Court) will resolve the dispute more efficiently and effectively bearing in mind comparative limitations and advantages of an Assessment on the one hand and a Court hearing on the other. 19. The ultimate question, taking all those matters into account, is therefore to determine whether the claim is not suitable for Assessment at CARS in the context of all matters relevant to the claim (Zurich Australia Insurance Limited v MAA NSW & Young [2006] NSWSC 845)."
5. At [20] of the reasons, the Claims Assessor set out [43] from Insurance Australia Limited t/as NRMA Insurance v Banos [2013] NSWSC 1519 where Campbell J referred to applications for exemption based, as in the present case, on the insurer's allegation that a claimant has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained in the accident giving rise to the claim. Campbell J's non-exhaustive list of relevant considerations included the following at (d): "[A] related question will be which mode of hearing will resolve the dispute more efficiently and effectively, bearing in mind the comparative limitations and advantages of an assessment conference on the one hand and a court hearing on the other. Advantages of the latter may include a better opportunity for proper and fair cross-examination of witnesses whose credit is to be impugned and the greater availability of cross-examination of medical experts on the material which may call the Claimant's reliability into question"
6. The Claims Assessor referred to Insurance Australia Limited trading as NRMA Insurance v Milton [2016] NSWSC 1521 where Beech-Jones J said that s 92(1) does not preclude any evaluation of an insurer's allegations in the determination whether the claim is unsuitable for CARS Assessment. The Claims Assessor also referred, at [23] of his reasons, to Insurance Australia Limited trading as NRMA Insurance v Taylor [2017] NSWSC 507 and summarised the following observations by Davies J: "It is difficult to see how an Assessor would be in error in forming some sort of preliminary view, and it is difficult to see how the Assessor would not have to form such a preliminary view, about the allegation to determine whether the claim is not suitable for Assessment. It is not sufficient that an allegation alone has been made for the discretion to be exercised, something more will be needed. The seriousness of what has been alleged must be a consideration. The Assessment process has limitations. The parties' rights of questioning can be limited by the Assessor. The Assessor cannot compel any party or witness to answer questions. Although the Assessor can have regard to the failure to answer questions, in the determination of the Assessment. [sic] Unless the party has a reasonable excuse for that failure. [sic] The Assessor has no power to subpoena or require the attendance of any persons."
7. At [26] of his reasons, the Claims Assessor said: "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."
8. The next section of the reasons is entitled "Consideration". Because of the emphasis placed by the parties on the paragraphs within this section, it is reproduced in full as follows: "27. This is a problematic determination because there are legitimate considerations on both sides of the issue: There is material on which a Court, or CARS Assessor, could conclude the claimant has not disclosed a pre-existing lumbar spine condition. There are circumstances surrounding the alleged false or misleading statement that are relevant to issues such as credit and incapacity. Apart from the claimant 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). Apart from the issues arising pursuant to clause 14.16.11 of the Guidelines the claim does not involve complex legal or factual issues. Nor does it involve any other consideration set out in clause 14.16 of the Guidelines. It is a claim of substance. However, it is not a claim involving catastrophic injury. 28. I am not satisfied, on the material available, any of the following would be advanced by a curial hearing: Evidence under oath (or affirmation); The same questions are likely to be asked in both forums. The CARS process does not have the symbolism or dignity of the Court room. However, a decision maker in either case is likely to be confronted with the same evidence in this instance; Curial cross examination as distinct from CARS' questioning; The possibility of subpoena being addressed to third parties. There has been no particularisation or specification to make this a significant factor to consider; The possibility of medical oral expert evidence. There has been no particularisation or specification to make this a significant factor to consider. 29. I am not persuaded the claim needs curial attention. 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. Credit is frequently in issue in the CARS process. Traditionaltests of credibility involving consistency and plausibility criteria are applied in both forums. In my assessment this can be adequately determined, in this instance, by the CARS process."
9. In paragraph [30] of his reasons, headed "Conclusion", the Claims Assessor declined to grant the exemption.

The status of the reasons given by the Claims Assessor

1. As is apparent from the summary of relevant provisions above, claims assessors are required to give reasons if an exemption pursuant to s 92(1)(b) is granted (cl 14.13 of the Guidelines). They are also required to give reasons for assessment (Chapter 18 of the Guidelines). However there does not appear to be any express requirement that reasons be given where an application for a discretionary exemption is declined. Nonetheless, in the present case, the Claims Assessor gave reasons for the Exemption Decision which form part of the record because of s 69(4) of the Supreme Court Act 1970 (NSW).
2. I will address the grounds in the summons which are set out above.

The catastrophic injury ground

1. As appears from the wording of ground (1) in the summons, the Insurer submitted that the Claims Assessor considered that, because the injuries sustained by the Claimant were not "catastrophic", the exemption could not be granted.
2. I reject this submission. It is plain from the reasons that the Claims Assessor was considering various factors in deciding whether to grant an exemption. He included the circumstance that the injuries were not catastrophic as a relevant, but not determinative, factor. The Claims Assessor was not bound to disregard all matters under cl 14.16 of the Guidelines except those raised by the applicant for an exemption. Whether the claim was a catastrophic claim was, at least potentially, a relevant factor by reason of the wording of cl 14.16 and, in particular, cl 14.16.5. Subject to the requirements of procedural fairness, it was open to the Claims Assessor to take it into account. Indeed, Mr Robinson accepted that whether the claim was catastrophic was not a matter which the Claims Assessor was bound not to take into account in the sense referred to in Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24 at 40 (Mason J); [1986] HCA 40. As such, it was for the Claims Assessor to determine how (if at all) he would take that into account and what weight he would give to it: Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [5]-[7] (Gleeson CJ). This ground has not been made out.

The parties' submissions

1. It was argued on behalf of the Insurer that aspects of the Claims Assessor's reasons were neither rational nor logical which made the Exemption Decision legally unreasonable. Mr Robinson relied on what the High Court said in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 (Li) at [76] when applying principles applicable to appellate review of a judicial discretion with judicial review of a statutory discretion: "As to the inferences that may be drawn by an appellate court, it was said in House v The King that an appellate court may infer that in some way there has been a failure properly to exercise the discretion 'if upon the facts [the result] is unreasonable or plainly unjust'. The same reasoning might apply to the review of the exercise of a statutory discretion, where unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power. Even where some reasons have been provided, as is the case here, it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification."
2. In Li the Migration Review Tribunal's refusal to adjourn the proceedings in circumstances where a further skills assessment was forthcoming was held to be so lacking in evident or intelligible justification that it was held to constitute jurisdictional error. It is to be distinguished from the present case because Mr Robinson accepted that it was open to the Claims Assessor to refuse the exemption. Nonetheless, Mr Robinson contended that the Exemption Decision ought be set aside for legal unreasonableness because the reasons were, in effect, unintelligible and provided neither an explanation nor a justification for the decision.
3. Mr Robinson contended that the reasons for the Exemption Decision were confined to what was set out in [27] and [28] under the heading "Consideration" (reproduced above). He submitted that the first two dot points in [27] indicated that the Claims Assessor accepted what the Insurer said about the basis for an exemption (non-disclosure of pre-existing lumbar spine capacity giving rise to issues of credit and alleged false or misleading statements). As to the third dot point in [27] (whether (unspecified) witnesses other than the claimant will be called and the fact that they will not be required to give evidence on oath or affirmation in a CARS assessment), Mr Robinson submitted that this matter was irrelevant at that stage since the Insurer had not yet been granted an exemption. As to the fourth dot point (that the claim did not enliven any matter under cl 14.16 of the Guidelines other than the one in 14.16.11 which had been raised by the Insurer), Mr Robinson contended that it was irrelevant that only one matter in cl 14.16 was raised and that the absence of other relevant matters ought not to have been weighed in the balance against the exemption.
4. There was an issue as to the correct interpretation of the fifth dot point in [27] of the reasons. Mr Robinson contended that the reference to there being a "claim of substance" could be an acknowledgement that the Insurer's application for exemption was a substantial one. He accepted that the use of the word "claim" in the second sentence was a reference to the Claimant's claim and the fact that it did not involve a catastrophic injury.
5. As to paragraph [28] of the reasons, Mr Robinson submitted that the opening words ("I am not satisfied that any of the following would be advanced by a curial hearing") were "nonsensical". He contended that the first dot point and the passage underneath it (which referred to the "symbolism or dignity of the Court room") were "utterly and entirely irrelevant" and "incomprehensible". He described the second dot point (which referred to "curial cross-examination" and "CARS questioning") as "bereft of meaning". As to the third dot point (the possibility of subpoenas issued to third parties), Mr Robinson said that it was not necessary for the Insurer to specify which, if any, witnesses it would call if the exemption were granted because cl 14.16 required the Claims Assessor to "have regard to the circumstances of the claim as at the time of consideration of the claim", that is, at the time of the hearing of the exemption application. As to the fourth dot point (the possibility of medical oral expert evidence), Mr Robinson made a similar submission: that the Insurer was not obliged to foreshadow all, or any, of the experts it proposed to call or require for cross-examination if the exemption were granted.
6. Mr Robinson also challenged the reasons in [29] as disclosing error. He submitted that the express words of cl 14.16 required the Claims Assessor to confine his attention to "the circumstances of the claim as at the time of consideration of the claim" and that it was an error for the Claims Assessor to undertake a speculative prospective inquiry as to how the court proceedings would be conducted if the exemption were granted. Mr Robinson also submitted that no reasoning was exposed in [29], which comprised no more than a list of conclusions. He submitted that claims assessors were frequently barristers or solicitors and that their reasons ought to be held to a standard which reflected their presumed expertise as legal practitioners.
7. Mr Johnson SC, who appeared with Mr McSpedden for the Claimant, submitted that it was necessary to read the reasons of the Claims Assessor fairly and as a whole. He also submitted that, once the result was accepted as being within the range of legally available decisions open to the Claims Assessor, the Exemption Decision could not be impugned on the grounds of legal unreasonableness. He contended that, in so far as the legal unreasonableness ground incorporated a claim of inadequate reasons, the reasons ought be judged in accordance with the principles in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272; [1996] HCA 6 (Brennan CJ, Toohey, McHugh and Gummow JJ) (Wu Shan Liang).

Consideration of the legal unreasonableness ground

1. The concept of legal unreasonableness is largely concerned with whether the decision-maker is acting within the authority conferred by the statute. As Mr Robinson accepted that the result fell within the range of lawful results, it is necessary to examine the process whereby the decision-maker came to the Exemption Decision. This requires an examination of the reasons to ascertain whether they demonstrate a justification for the exercise of power. The reasons of an administrative decision-maker are to be read with what has been termed a "beneficial construction".
2. In Wu Shan Liang, the Minister's delegates rejected the respondents' applications for refugee status on the ground that the respondents' fears of persecution were not well-founded. The respondents applied for judicial review of the delegates' decision under the Administrative Decisions (Judicial Review) Act 1977 (Cth). Wilcox J dismissed the applications. The Full Court of the Federal Court allowed the respondents' appeal. The Minister appealed to the High Court following a grant of special leave. The High Court allowed the appeal and reinstated the original decision of the delegates. In the joint judgment of the High Court, their Honours considered the proper role of the reviewing court as follows at 271-272: "The Full Court recognised, on the face of the delegate's assessment of the first respondent's claim, 'that the delegate correctly directed herself as to the test which she had to apply'. … In other words, the delegate starts and finishes with the correct test; it is only some phraseology in between which provides the basis for a conclusion that she had slipped from an assessment of real chance to an assessment of balance of probabilities. When the Full Court referred to 'beneficial construction', it sought to adopt an approach mandated by a long series of cases, the best exemplar of which is Collector of Customs v Pozzolanic [(1993) 43 FCR 280]. In that case, a Full Court of the Federal Court (Neaves, French and Cooper JJ) collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be 'concerned with looseness in the language … nor with unhappy phrasing' of the reasons of an administrative decision-maker. The Court continued: 'The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error.' These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision." [Footnotes omitted.]
3. The High Court addressed the Full Court's conclusion that the use by the delegates of the phrase, "I consider it speculative … to suggest that [the respondents] would be treated more harshly than in the known relevant cases" indicated that the delegates had applied the incorrect legal test. The High Court said at 277-278: "The use by the delegates of the phrase 'I consider it speculative … to suggest that [the respondents] would be treated more harshly than in the known relevant cases' was taken by the Full Court to indicate that the Chan test [Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379] miscarried. This conclusion was reached by, first, characterising the phrase in a particular way and, then, demonstrating that the phrase so characterised indicated an approach inconsistent with the Chan test. The Full Court found that the phrase 'seems to suggest that speculation ought not be engaged in'. It interpreted 'speculation' as used by the delegates to encompass prediction of the future. From this it followed that the Chan test must have miscarried because it is clear that the test in Chan necessitates speculation in the sense of prediction, in other words, an assessment of the future. That is implicit in the formulation 'real chance'. If the Full Court was right in its characterisation of the delegates' reasons, then that would certainly demonstrate an incorrect approach. However, with respect, the Full Court was in error when it so characterised the delegates' reasons. The word 'speculative' in the context in which it appears need not amount to a denial of the delegates' function of assessment of future chances of persecution. Rather, the word might equally have been used to refer to the probative force of the material before the delegate. … This sense of the word is consistent with the context in which it appears in the delegates' reasons. … There is nothing here to suggest that the delegates abandoned the process of looking to the future which is the essence of the Chan test. There is certainly nothing which would suggest such a conclusion in sufficiently strong terms to overcome a properly 'beneficial construction' of the delegates' reasons."
4. As in Wu Shan Liang, the decision-maker, in this case the Claims Assessor, has not expressed his reasons in an unambiguous way. There is force in Mr Robinson's criticism of the language of the Claims Assessor which, when "construed minutely and finely with an eye keenly attuned to the perception of error" (to borrow the language of the Full Federal Court in Collector of Customs v Pozzolanic (1993) 43 FCR 280 at 287, citing Lockhart in Politis v Commissioner of Taxation (Cth) (1988) 16 ALD 707 at 708), does not, at certain points, make sense.
5. However, when one adopts a "beneficial construction" of the reasons, the substance of the Claims Assessor's reasons is relatively clear. The Claims Assessor was obliged to consider matters put forward by both parties to determine whether the claim was unsuitable for assessment. The Claims Assessor was also, subject to the requirements of procedural fairness (about which there is no complaint), entitled to take into account any matter which he considered to be relevant to the exercise of the discretion, including those matters which were common ground (such as that the Claimant's injuries were not catastrophic). Even if the Claims Assessor could be said to have undertaken a weighing process when considering all relevant factors, this does not indicate error since it is often a feature of discretionary decisions (including when sentencing offenders) that relevant factors might tend towards one decision or the other. Further, it does not do justice to the Claims Assessor's reasons to regard the paragraphs headed "Consideration", [27]-[29], as comprising the whole of his reasoning. Decision-makers commonly consider all of the material before they write a word: Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 77 ALJR 1165 at [14] (Gleeson CJ). A beneficial construction requires a court to refrain from pedantry or overmuch reliance on headings and discern the reasoning from the whole of the reasons, not the portion which bears a particular label.
6. As referred to above, it was accepted by the Insurer that the Claims Assessor articulated the correct test and referred to the relevant authorities germane to the exercise of his discretion.
7. In [27] of his reasons, the Claims Assessor identified matters raised by the parties and concluded that the only relevant matter in the list in cl 14.16 was the one in cl 14.16.11. The Claims Assessor specifically excluded the factor that the claim was one for catastrophic injury as it was common ground that it did not fall into that category.
8. In [28] the Claims Assessor had regard to the "comparative limitations and advantages of an assessment conference on the one hand and a court hearing on the other". At [29]-[30], he concluded that he was not satisfied that the claim was unsuitable for assessment and recorded his view that a fair and just hearing could still be had at an assessment conference. He also noted that credit is often an issue in a CARS hearing and that credibility could still be determined in that context.
9. The Claims Assessor's reasons are to be read fairly as a whole and given a beneficial construction. They contain an evident justification for the exercise of power: that he was not satisfied that the claim was unsuitable for assessment because a fair and just hearing could still be had at an assessment conference.
10. In Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 92 ALJR 713, Nettle and Gordon JJ said at [84]: "[L]egal unreasonableness is invariably fact dependent and requires a careful evaluation of the evidence. That is, assessment of whether a decision was beyond power because it was legally unreasonable depends on the application of the relevant principles to the particular factual circumstances of the case, rather than by way of an analysis of factual similarities or differences between individual cases. Where reasons are provided, they will be a focal point for that assessment. It would be a rare case to find that the exercise of a discretionary power was unreasonable where the reasons demonstrated a justification for that exercise of power."
11. In substance, Mr Robinson's challenge to the Exemption Decision rests on the premise that the reasons are "unintelligible". I accept that there are several infelicities of expression in the reasons. For example, in the fifth dot point of [27], I consider that the word "claim" is used in the same sense in both sentences and is a reference, in both cases, to the Claimant's claim. In effect, the Claims Assessor was saying that the Claimant's claim was substantial but not catastrophic. The opening words of [28] do not particularly fit with what follows in the dot points under that paragraph. The "symbolism and dignity of the Court room" is irrelevant since what was at stake was the fact that evidence in court has to be given on oath or affirmation and the opponent has a right to cross-examine. While claims assessors may be barristers, there is no requirement in the Act that they be legal practitioners. In any event it is not appropriate that their 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).
12. Although there was no statutory obligation to give reasons, the Claims Assessor chose to give them. He cannot be held to a higher standard than that which applies where there is such an obligation. In Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 the High Court (French CJ, Crennan, Bell, Gageler and Keane JJ) said, at [55], in circumstances where there was a statutory obligation to give reasons that the assessor was, in substance, required to "explain the actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law". Notwithstanding the evident deficiencies in expression, I consider the import of the Claims Assessor's reasons to be sufficiently clear.
13. Applying a beneficial construction to the reasons, I regard the Claims Assessor as having said, in effect, the following: 1. The real issue is whether the parties can have a fair hearing in an assessment conference or whether this case requires curial determination ([6], [18] and [29]). 2. The advantages of a court over an assessment conference include the following: 1. witnesses are required to give their evidence on oath and may be cross-examined; 2. subpoenas can be issued to require documents to be produced and witnesses to attend; 3. medical experts can be called to give evidence; and 4. there is a transcript of proceedings. 5. ([11], [20], [23] (second and fourth dot points) and [25]); 1. Of the factors listed in cl 14.16 of the Guidelines, only 14.16.11 applied in the present case ([9]-[11]; [14]-[16] and [27] (first two and last two dot points)). 2. The Claims Assessor was not satisfied that, in the present case: 1. questioning of the Claimant during an assessment hearing would be materially different from cross-examination in a court since the content of the questions would be likely to be similar ([28] (first and second dot points)); 2. the credibility of the Claimant (which was an issue having regard to the allegations made of false or misleading non-disclosure of his pre-existing lumbar spine condition) could not be adequately explored in an assessment hearing ([28] (first and second dot points)) ; 3. there was any disadvantage to the Insurer in not being able to have subpoenas issued when it had not identified which subpoenas it would issue if the exemption were granted ([28] (third dot point)); 4. there was any disadvantage to the Insurer in not being able to call witnesses when it had not identified which witnesses it would call if the exemption were granted ([27] (third dot point)); and 5. there was any disadvantage to the Insurer in not being able to call medical experts in an assessment conference since it had not indicated which, if any, medical experts it proposed to call or require for cross-examination if the exemption were granted ([28] (fourth dot point)). 1. On this basis, the Claims Assessor was not satisfied that the claim was not suitable for CARS assessment and declined the exemption ([29]). 2. [The paragraph references are references to the Claims Assessor's reasons.]
14. I reject Mr Robinson's submission that the wording of cl 14.16, which relevantly requires the assessor to "have regard to the circumstances of the claim at the time of consideration of the claim", prevents the assessor from considering the relevant counterfactual: namely, if an exemption were granted, the use which the applicant for exemption would be likely to make of the forensic avenues which are available in court proceedings but unavailable on CARS assessment.
15. In the present case, the Insurer did not, for example, say, "if the exemption were granted, we would want Dr X for cross-examination to ask Dr X to reconsider his or her an opinion in light of the true history instead of the false history given by the Claimant"; or "we would subpoena witness Y who was the Claimant's neighbour to give evidence about his pre-accident condition or post-accident capacity". In those circumstances, the Claims Assessor was entitled to note the absence of any such indication.

The allegations ground

1. I do not understand the Claims Assessor's reasons at [29] to indicate that he did not take account of the allegations made by the Insurer. It is plain from the first two dot points in [28] that the Claims Assessor accepted that there was substance to the Insurer's allegations that the Claimant had not disclosed his prior back conditions in circumstances which would be relevant to his credit and his capacity. The reference to further material ought, applying a beneficial construction, be understood as a reference to further material which might indicate that the forensic avenues available in a court and unavailable in an assessment conference, would make a material difference to the Insurer's right to a fair hearing.
2. I am not persuaded that there was anything inappropriate, much less unlawful, in the Claims Assessor's indication to the Insurer in [29] of his reasons that "[t]here is the possibility of other material becoming available which would change my determination". It was common ground that further applications could be made if there were a change in circumstances. The Claims Assessor was open to this possibility, as indicated by the question he asked Mr O'Dowd before the assessment hearing began on 3 July 2018. Although the assessment hearing took place only 8 days after the Exemption Decision had been made it was at least possible that there would have been a change in circumstances.
3. For example, the Insurer had identified, in its written submissions dated 2 May 2018 in support of the exemption application, that it had not received the records it had requested from Healthsmart Medical Centre and the Family Practice at the Gap. However, I understood it to be common ground that documents from these sources were made available in time for the assessment conference on 3 July 2018.
4. Ground 3 has not been made out.

Additional remarks relating to the discretion

1. As none of the grounds has been made out, it is not necessary to decide whether, had any of the grounds been made out, it would have been appropriate to decline relief because of the Insurer's conduct in waiting until the Assessment Decision had been made before filing the summons in this Court to challenge the Exemption Decision.

Costs

1. The parties accepted that there was no reason why the usual rule that costs follow the event ought not apply: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

Orders

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

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