Insurance Australia Limited v O'Shannessy

First ground: Alleged agreement over lost earning capacity

1. IA's first ground of review contends that, in determining both Mr O'Shannessy's past and future economic loss, the Assessor wrongly assumed, or found, that IA had agreed that Mr O'Shannessy's lost earning capacity was $1,100 net per week. IA submitted that, as a consequence, the Assessor committed a jurisdictional error in that she failed to discharge the statutory task of assessing the "amount of damages" for the purposes of s 94(1)(b) of the MAC Act (see Allianz Australia Insurance Ltd v Crazzi [2006] NSWSC 1090; 68 NSWLR 266 at [183] per Johnson J). IA also contended that, by incorrectly acting on the basis that the parties had agreed "that the calculation of past and future economic loss was $1,100 net income per week", the Assessor denied IA procedural fairness because it was proceeding on a basis that was "not obviously … open on the known material" (Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; 241 CLR 594 at [9] per French CJ and Kiefel J).
2. Mr O'Shannessy resisted this contention on a number of bases, the principal one being that a proper reading of the Assessor's reasons reveals that she did not agree that Mr O'Shannessy's lost past and future earning capacity was $1,100 net per week. Instead he contended that it proceeded on what was agreed, namely that he was earning $1,100 net per week up until he ceased work on 7 February 2011.
3. To address this it is necessary to outline what was in fact agreed by the parties, what the respective cases of the parties were and the approach taken by the Assessor. Submissions before the Assessor
4. I have already noted that there was no transcript or recording of what was said to the Assessor at the assessment conference. IA's solicitor who was present swore an affidavit. She stated: "5. During the course of the assessment conference on 10 December 2014, it was acknowledged on behalf of [IA] that the earnings of [Mr O'Shannessy] prior to the motor vehicle accident on 14 May 2011 reflected an average of $1,100.00 nett per week up until 7 February 2011, when [Mr O'Shannessy] ceased work and began receiving workers compensation benefits. 6. I understand and verily believe that at no time on 10 December 2014, or prior to that, was a concession made on behalf of [IA] that [Mr O'Shannessy] was capable of earning $1,100.00 nett per week at the time of the motor vehicle accident on 14 May 2011 or that he would be capable of earning that amount in the future."
5. This evidence was not challenged and I accept it.
6. A perusal of the written submissions before the Assessor reveals that the difference between the concession about Mr O'Shannessy's average net earnings up until 7 February 2011 and his earning capacity after the date of the accident concerned the impact of his back injuries noted above.
7. The material placed before the Assessor included particulars provided on behalf of Mr O'Shannessy under s 85A of the MAC Act. In relation to past economic loss, those particulars recorded that Mr O'Shannessy earned approximately $1,160 net per week on average between 20 October 2009 and when he ceased work in February 2011. They noted the fact that he was off work with a back injury at the time of the accident and continued: "The Claimant had suffered aggravations of an old back injury from time to time over the years but had always managed to continue in his employment or return to his employment after a period of convalescence and treatment. At the time of the accident, he was hoping to return within 2-3 months (ie by July/August 2011). … Had it not been for the accident, it is reasonable to expect that the claimant would have been back at pre-accident employment with Brims Transport by at least August 2011. As such, the claimant has incurred an ongoing loss of at least $1,160 net/ week since August 2011 while he has been unsuited to return to work in any capacity due to his accident related injuries."
8. The particulars then made a claim based upon a calculation of $1,160 per week from August 2011 to the date of the particulars. They also claimed future economic loss calculated at a continuing rate of $1,160 net per week for the remaining period of his working life to age 70, although this was to be "discounted by 20% for contingencies and to account for the possibility that he may have aggravated his back condition again and required some time off work at some point in the future".
9. The written submissions lodged on behalf of Mr O'Shannessy prior to the assessment conference reiterated these claims.
10. The submissions lodged on behalf of IA made extensive reference to Mr O'Shannessy's back condition. IA ultimately submitted that he "effectively had no earning capacity at the time the subject accident occurred due to his lumbar spine condition and that the injuries sustained in the subject accident … therefore, caused no past economic loss or impairment of future earning capacity". The Assessor's Reasons
11. In the reasons that accompanied her certificate, the Assessor set out certain background facts and then recorded the following: "12. A number of issues are not in dispute. … It is agreed that past loss of earning capacity is to be calculated on a net weekly wage of $1,100 It is agreed that future loss of earning capacity is to be calculated on a net weekly wage of $1,100 … 13. A number of matters are conceded by the insurer: … The insurer concedes a residual earning capacity of $500 net per week … The insurer concedes a 'cushion' for past loss of earning capacity of $50,000 … The insurer concedes a 'cushion' for future loss of earning capacity of $100,000." (emphasis added)
12. The "concession" that Mr O'Shannessy had a residual earning capacity of $500 per week noted in [13] of the Assessor's Reason was not in substance a concession, but was instead an alternative submission made by IA. Its primary contention was that Mr O'Shannessy had no earning capacity at the time of the accident.
13. The debate between the parties on this ground concerns the references in [12] of the Assessor's Reasons to the past and future loss of earning capacity being calculated "on" a weekly wage of $1,100. Read literally, that statement is at least capable of meaning that Mr O'Shannessy's economic loss was to be calculated by reference to an agreed loss of earning capacity of $1,100 net. However, if that is what the Assessor meant, then at the outset it is difficult to reconcile with the concessions and submissions noted in [13] of the Assessor's Reasons.
14. The next part of the Assessor's reasons is entitled "Pre-MVA lower back symptoms and their impact on Mr O'Shannessy". In this portion of the reasons the Assessor addressed in detail some of the evidence concerning the cause and the effect of the various injuries to Mr O'Shannessy's back. The Assessor found that, as at the date of his motor vehicle accident, Mr O'Shannessy's "intention [was] to undergo back surgery when funds become available", that he was likely to do so, and that, had the accident not intervened, it was his intention to return to interstate truck driving once his back symptoms had settled down (Reasons at [44]). The Assessor also found: "53. I am satisfied on the evidence that as at 14 May 2011, Mr O'Shannessy's lower back symptoms were abating as they had done in the past but had not resolved completely. 54. I am not persuaded by Mr O'Shannessy's testimony that he has had no back pain since about March 2012. … 55. I am satisfied that Mr O'Shannessy's lower back symptoms remain present, but 'wax and wane'."
15. Next the Assessor addressed the reliability or otherwise of Mr O'Shannessy's evidence. The Assessor concluded that "in the main Mr O'Shannessy's evidence is reliable but it must be discounted somewhat to accommodate his admission that at times he may have exaggerated his complaints of back pain and his capacity to work in order to secure Centrelink payments" (Reasons at [67]).
16. The Assessor then addressed various heads of damage claimed by Mr O'Shannessy. In relation to past economic loss, the Assessor made the following factual findings, one of which is the subject of complaint by ground 2: "101. I find that as at the date of the MVA, Mr O'Shannessy's lower back symptoms were resolving but had not resolved. … 103. I find on the evidence that Mr O'Shannessy most likely would have been sufficiently recovered from his lower back symptoms by about August 2011 to allow him to return to truck driving with Brims Transport which was his intention but for the MVA. His employment in the long haul truck driving industry although somewhat chequered over the years does indicate his desire to return to truck driving, after each aggravation of his back symptoms. 104. I am satisfied that had it not been for the MVA, it was reasonable to have expected that Mr O'Shannessy would have returned to his pre MVA employment with Brims Transport by about August 2011. I am reassured by the telephone conversation he had with Jenny Bateman, CA of WorkCover Queensland on 9 May 2011 a matter of 5 days prior to the MVA. He indicated to Jenny Bateman, inter alia, that he was finding it a lot easier moving around and he wanted to become more active. 105. I find that because of the nature of his degenerative spinal condition, Mr O'Shannessy was likely to suffer aggravations of his back condition from time to time, depending on the success of spinal surgery." (emphasis added)
17. The Assessor then recorded the position of the parties and her assessment of Mr O'Shannessy's past economic loss as follows: "106. Mr O'Shannessy's counsel urges me to calculate past loss of earning capacity based on a net weekly loss of $1,100 (agreed weekly income, refer [12] above) from August 2011 (refer section 85A Statement of Particulars dated 27 August 2013 at [6.3]) to date but discount the amount by 20% to accommodate the possibility that Mr O'Shannessy may not have returned to work with Brims Transport (or some other employer) as a long haul truck driver in August 2011 but at a later date, and/or he may have suffered a further aggravation(s) of his back injury. … 110. The Insurer submits in its written submissions dated 3 December 2014 that I should not allow any amount for past loss of earning capacity as Mr O'Shannessy was not working as at the date of the MVA because of his unrelated back injury. Accordingly he had no earning capacity as at the date of the MVA because of his pre-existing lumbar spine condition. 111. In the alternative, the Insurer submits that if I am satisfied Mr O'Shannessy did indeed have a capacity for employment prior to the MVA, 'it is submitted that the claimant's employments prospects were significantly limited by the effects of the pre-accident lumbar spine condition and that he would not have had the capacity to continue to work as a truck driver. It is submitted that the lengthy absences from work as a result of the flare ups in the claimant's lumbar condition indicate that he was working beyond the limits of his physical capacity in that role. It is submitted that, at best for the claimant, he may have been able to find sedentary work but that his lumbar spine condition would have continued to cause him to need to take time off work'. 112. At the assessment conference, the Insurer's counsel conceded a residual earning capacity of $500 net per week. She submitted that the 'real figure' referable to loss of earning capacity was $93,000 based on a residual earning capacity of $500 net per week. She urged 'a 'cushion' of $50,000 to account for another 18 months to 2 years before being able to earn $500 net per week'. As I understand the Insurer's submission, the Insurer is submitting that it is reasonable for me to allow a further closed period of 18 months to 2 years interference with Mr O'Shannessy MVA related loss of earning capacity, and thereafter his residual earning capacity of $500 will 'kick in'. The Insurer says that Mr O'Shannessy's residual earning capacity of $500 is referable to restrictions on his earning capacity flowing from his pre-existing spinal condition, and not from his left leg permanent impairment problems. 113. I am satisfied on the evidence that as from about August 2011, Mr O'Shannessy was suffering a loss of earning capacity as a result of the MVA on 14 May 2011. I am not satisfied that it is appropriate to calculate Mr O'Shannessy's past loss of earning capacity based on a mathematical calculation of $1,100 net per week for 174 weeks as his most likely circumstances but for the MVA may have involved further aggravation(s) of his back condition which would result in MVA unrelated time off work. 114. In all the circumstances, I find that it is appropriate to allow a 'cushion' for past loss of earning capacity. I allow a 'cushion' of $100,000 for past loss of earning capacity, including loss of superannuation, to accommodate the effects of Mr O'Shannessy's pre-existing back condition, the possible delay of his return to interstate truck driving beyond August 2011 and the likelihood of further aggravations to his back condition." (emphasis added)
18. This part of the Assessor's reasons is inconsistent with IA's contention that the Assessor wrongly assumed that it had agreed that Mr O'Shannessy's lost earning capacity was $1,100 per week. If that had been so, the Assessor would have simply determined a figure achieved by multiplying $1,100 per week by the number of weeks since the date of the accident. Instead, the Assessor identified the date of Mr O'Shannessy's likely return to work from his back injury as being August 2011. Further, the Assessor did not adopt a straight line calculation from that time up to the time of the assessment, but instead only allowed a "cushion" which accommodated uncertainty about the timing of any return and the likelihood of further aggravation to Mr O'Shannessy's back condition once he returned to work.
19. Although this approach involved a rejection of IA's submission as recorded by the Assessor that Mr O'Shannessy either had no residual earning capacity or a significantly reduced one, it is nevertheless completely consistent with the position recorded by IA's solicitor in [5] of her affidavit as set out above (at [22]). The approach of the Assessor was to treat the figure of $1,100 net per week as suggested as "agreed weekly income" (see Reasons at [106]), that is, income which would have been earned by Mr O'Shannessy, but for the motor vehicle accident and but for the effect of his back injuries, and then to add back various contingencies associated with the effect of his back injuries and their likely reoccurrence.
20. Next, the Assessor dealt with Mr O'Shannessy's future economic loss. She identified the necessity to conform with s 126 of the MAC Act. In the course of doing so the Assessor stated: "124. The parties agree that Mr O'Shannessy's baseline earning capacity which might have been achieved but for the MVA was $1,100 net per week. … 129. I am satisfied that Mr O'Shannessy's back pain was improving prior to the MVA. I am satisfied that he had a strong desire to return to truck driving but for the MVA. I am satisfied that he was taking active steps pre MVA to get fit in preparation for back surgery and/or return to the workforce. … 133. I am satisfied that Mr O'Shannessy is no longer suited to return to work as a truck driver or in other delivery/driving jobs as a result of his MVA related injuries."
21. Further, in the following extract the Assessor noted the submissions of the parties and expressed her ultimate conclusion in respect of future economic loss: "138. At [18] of Mr O'Shannessy's updated submissions at A6.1, he makes a claim for future loss of earning capacity of $599,673.60 ($1,160 x 646.2 x .80 = $599,673.60) calculated on a weekly loss of $1,160 and discounted by 20% for contingencies and to account for the possibility that he may have aggravated his back condition again and required some time off work at some point in the future. The parties have agreed that any future loss of earning capacity should be calculated on $1,100 net per week. 139. At the assessment conference, Mr O'Shannessy's counsel submitted that he has no residual earning capacity as a result of his MVA related injuries and disabilities. He is presently in receipt of a Disability Support Pension. 140. The Insurer's primary submission is that Mr O'Shannessy is not suffering from MVA related incapacity to work and urges me not to allow any amount for future loss of earning capacity. The Insurer at [35] of its submissions dated 3 December 2014 that 'the claimant effectively had no earning capacity at the time the subject accident occurred due to his spine condition and that the injuries sustained in the subject accident have, therefore, caused no past economic loss or impairment of future earning capacity'. I am not persuaded by this submission. 141. At the assessment conference the Insurer's counsel submitted that if I was against the Insurer's primary submission (which I am), the Insurer concedes that it would be appropriate to allow a 'cushion' of $100,000 to reflect the impact of the MVA injuries and disabilities may have on his earning capacity. 142. I find that it is appropriate in the circumstances of this claim to allow Mr O'Shannessy an amount for future loss of earning capacity. I propose to calculate future loss of earning capacity based on a net weekly loss of $1,100 (as agreed), for the remainder of his working life to age 65 (multiplier) and then apply a discount of 25% (instead of the usual 15% for contingencies) to accommodate the possibility that Mr O'Shannessy may have aggravated his back condition again and require time [off] work and that he is likely to have spinal surgery and require rehabilitation and time [off] work in any event. The diminution in earning capacity caused by the MVA might have occurred, in part or in whole, in any event, within the working life of Mr O'Shannessy and section 126(2) provides that some allowance must be made for that circumstance. 143. Mr O'Shannessy is presently aged 53 (DOB 4 June 1961). He will turn 65 on 4 June 2026. Years until retirement at age 65 are 12. The 5% multiplier is 473.9. I find that the appropriate discount for contingencies in all the circumstances of this claim is 25% instead of 20% as suggested by [Mr O'Shannessy] or the customary 15%. The agreed net weekly loss is $1,100." (emphasis added)
22. Senior Counsel for IA, Mr Robinson SC, pointed to the references in the above passages to the parties having "agreed" on various matters, and in particular having agreed that "any future loss of earning capacity should be calculated on $1,100 net per week". He contended that this revealed that the Assessor had proceeded on the incorrect assumption that the parties had agreed on the matter noted in [6] of the solicitor's affidavit rather than the matter noted at [5] (see [23] above).
23. The extracts pointed to by Mr Robinson SC are clearly ambiguous, but they only beg the question as to what the Assessor was referring to in stating that future loss of earning capacity should be "calculated on" the figure of $1,100 net per week. Does it mean that the parties agreed that the future loss of earning capacity was $1,100 per week? Or does it mean that the parties agreed that it should be calculated "on" the basis that, but for the motor vehicle accident and but for his ongoing back injuries, his earning capacity would have been $1,100 net per week? This ambiguity is resolved by considering the balance of the Assessor's reasons. If the Assessor had been truly attributing to IA an agreement to a proposition that Mr O'Shannessy's loss of earning capacity was $1,100 net per week, then it was pointless to address IA's vigorous submission that his pre-existing back condition had destroyed or at least impaired his earning capacity. Yet the Assessor did address that contention and, to an extent, accepted it by making a deduction for contingencies of 25% ("to accommodate the possibility that Mr O'Shannessy may have aggravated the back condition again").
24. In my view, a proper reading of the Assessor's reasons reveals that she did not depart from the agreed position noted in IA's solicitor's affidavit. Instead, the Assessor used the figure of $1,100 net per week as Mr O'Shannessy's "base line earning capacity" but for the motor vehicle accident and but for his back injuries and then addressed the impact of each of those matters on that earning capacity.
25. There is no doubt that in making an assessment under s 94(1)(b) an Assessor can act upon the agreed positions of the parties. In my view, on a proper construction of her reasons, the Assessor in this case did exactly that. It follows that the Assessor did not fail to afford IA procedural fairness or otherwise fail to complete the function that was required of her by s 94 of the MAC Act in this respect.
26. I reject ground 1.

Ground 2: Finding that the applicant would return to work

1. Ground 2 of the application attacks the finding of the Assessor in [103] of her reasons (see [35] above) that, but for his motor vehicle accident, "Mr O'Shannessy most likely would have been sufficiently recovered from his lower back symptoms by about August 2011 to allow him to return to truck driving with BrimsTransport" (the "challenged finding").
2. IA attacks the challenged finding on two bases. First it contends that there was "no evidence before the claims assessor that could reasonably be said to have supported … the said finding".
3. Second, IA submitted that it was denied procedural fairness by reason of the Assessor having made this finding "without first indicating to the parties that such a finding might be made and giving the parties an opportunity to make submissions on it and to adduce evidence on it". The Challenged Finding
4. At the outset it is necessary to place the challenged finding in context. As already stated, the Assessor noted that Mr O'Shannessy had a history of back injuries commencing with the injury to his three vertebrae in 1985. The Assessor accepted that Mr O'Shannessy's evidence was "in the main" reliable. His evidence included the statement that "leading up to the accident my condition was such that I was able to do most activities" and "I could ride my motorcycle, play pool, go up or down stairs, go offshore fishing and do all required household duties".
5. Further, in [104] of her Reasons the Assessor noted and placed particular emphasis on a file note of the discussion between Mr O'Shannessy and a representative of WorkCover Queensland made five days prior to the accident in which he stated, inter alia, that he was "finding it a lot easier moving around" (see [35]).
6. As noted, the Assessor found that "as at 14 May 2011 Mr O'Shannessy's lower back symptoms were abating as they had done in the past, but had not resolved completely" (see [33]). IA did not challenge that finding. Further, although the Assessor found that it was likely that, but for the accident, Mr O'Shannessy would have returned to work in August 2011, the Assessor also found that "because of the nature of his degenerative spinal condition, Mr O'Shannessy was likely to suffer aggravation of his back condition from time to time, depending on the success of spinal surgery" (see [35]).
7. As noted, in relation to past economic loss, the Assessor did not award Mr O'Shannessy an amount representing a simple calculation of $1,100 net per week since August 2011. Instead, the Assessor awarded him a cushion of $100,000 which reflected the "possible delay of his return to interstate truck driving beyond August 2011" and "the likelihood of further aggravations to his back condition" (see [36]). Similarly, in relation to the calculation of his future economic loss a discount was applied to "accommodate the possibility that Mr O'Shannessy may have aggravated his back condition again and [will] require time [off] work" (as well the likelihood of his having spinal surgery) (see [40]).
8. When considered in context, the challenged finding was not a finding that Mr O'Shannessy would have, but for the motor vehicle accident, returned to work either symptom-free or without any further time off work. Instead it was only a finding by the Assessor that it is most likely that Mr O'Shannessy would, absent the motor vehicle accident, have sufficiently recovered from his most recent aggravation of his back injury by around August 2011 to allow him to return to work. Further, this "finding" involved an acceptance of the possibility that his return to work may have been delayed beyond that point and an acceptance of the potential that, but for the motor vehicle accident, there were likely to be further periods off work due to his back condition after that time. Hence the awarding of a cushion for past economic loss and a deduction of 25% from the award for future economic loss. Procedural Fairness
9. IA's complaint that it was denied procedural fairness can be briefly disposed of. The submissions that were made on behalf of Mr O'Shannessy to the Assessor expressly sought a finding that "it is reasonable to expect that the claimant would have been back at pre-accident employment with Brims Transport by at least August 2011" while also acknowledging the possibility that there would be subsequent time off work as a result of future aggravation of his back injury (see [26] above). The findings made by the Assessor were entirely consistent with this submission, although the Assessor assessed the likelihood of him having further time off work due to his back injuries absent the motor vehicle accident as higher than was submitted on behalf of Mr O'Shannessy.
10. It is not necessary to explore in any detail the nature of the function exercised by the Assessor under s 94 of the MAC Act. The Assessor appears to have had essentially an adjudicative role, although there was scope for the Assessor to go beyond the issues and material presented by the parties (see s 100, 101, 104 and 105 of the MAC Act). In any event, the submissions that were made on behalf of Mr O'Shannessy were more than sufficient to place IA on notice of the potential for the Assessor to make the finding in the form that was ultimately made. The finding that was made was one that could have been "reasonably perceived" as having been "in the ring" (Victims Compensation Fund Corporation v Nguyen [2001] NSWCA 264; 52 NSWLR 213 at [44]). Judicial Review of fact finding under s 69 of the Supreme Court Act
11. There remains to be considered the complaint that there was no evidence to support the challenged finding.
12. A review of the authorities reveals that supervisory courts apply one of three standards of review to facts found by inferior courts and tribunals depending on the jurisdiction exercised by both.
13. The first is applicable to facts the objective determination of which was a matter upon which the inferior court or tribunal's jurisdiction depended (Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; 46 NSWLR 55 at [36] to [38] per Spigelman CJ). If the facts are of that character then this Court can determine them (Timbarra id). With inferior courts there is a strong presumption against construing legislation as making "the jurisdiction of a court contingent upon the actual existence of a state of facts, as distinguished from the court's opinion or determination that the facts do exist" because of the inconvenience that the former would occasion (Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; 59 CLR 369 at p 391 per Dixon J). A similar approach has been adopted with administrative decisions (QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442 at [27] to [29] per Basten JA).
14. The second standard is applicable where the facts being challenged form part of the determination of a state of satisfaction or an opinion upon which the exercise of power or jurisdiction of the inferior court or tribunal depended. The state of satisfaction or opinion is a "jurisdictional fact" (Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; 244 CLR 144 at [57] per French CJ). If the power is so conditioned then facts found in the course of forming that opinion or satisfaction can be reviewed on a wider basis than merely enquiring as to whether there was some evidence to support them (Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; 197 CLR 611 ("Eshetu") at [138]ff per Gummow J). I discuss the scope of review further below, but it suffices to state that the opinion or state of satisfaction can be reviewed if "the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds": Minister for Immigration, Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; 78 ALJR 992 at [38] (per Gummow and Hayne JJ; "SGLB"); Eshetu at [145] per Gummow J; Minister for Immigration and Multicultural Affairs, Re; Ex parte Applicant S20/2002 [2003] HCA 30; 198 ALR 59 at [34] and [37] per McHugh and Gummow JJ; "S20"). If this is demonstrated then relief under s 69 for jurisdictional error can be granted.
15. The third standard is applicable if the challenged facts do not constitute part of the formation of such an opinion or satisfaction. Depending on the basis for judicial review such findings can only be challenged if there was no evidence to support them (Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 at p 355-356 per Mason CJ ("Bond"); Eshetu at [138] per Gummow J; Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; 199 CLR 135 at [59] per Gaudron J; "Enfield"). In Bond Mason CJ stated (at p 356): "Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place."
16. Similarly in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Glass JA explained that a finding of fact for which there was some evidence to support it revealed no error of law even though it was made by "ignor[ing] the probative force of the evidence which is all one way" or could be described as "perverse" or one which "no reasonable person could have made" (at pp 155 to 156). In L & B Linings Pty Ltd v WorkCover Authority of New South Wales [2012] NSWCA 15 at [34] Basten JA noted that one consequence of this approach was that "where an evaluative judgment is to be formed on the basis of conflicting indicators, it will be difficult if not impossible to establish a 'no evidence' ground of review".
17. The parties' initial submissions assumed that the challenged finding could be reviewed on the basis that there was no evidence to support it without identifying why that was so. In particular, they did not address whether the challenged finding was a matter wholly within jurisdiction and, if so, how it could be reviewed under s 69 of the Supreme Court Act? If the challenged fact does not have any jurisdictional quality then the only basis for intervening under s 69 is for error of law on the face of the record. However a no evidence ground can only be established by considering all the material before the decision maker even though that material does not form part of the record (Craig supra). In Bond and Azzopardi the reviewing Court exercised a judicial review function that enabled review on the basis of an "error of law" that was not confined to the face of the record. In Kostas v HIA Insurance Services Pty Limited [2010] HCA 32 the High Court held that no evidence was available as a ground on an appeal restricted to a question of law (Kostas at [91] per Hayne, Heydon, Crennan and Kiefel JJ). In L & B Linings the appeal proceeded on an agreed basis that, inter alia, the no evidence ground raised a complaint of jurisdictional error (L & B Linings at [7]).
18. I addressed this issue in McCarthy v NSW Racing Appeals Tribunal [2014] NSWSC 798 at [96]: "If this Court was not constrained to only considering whether there was a jurisdictional error or error of law on the face of the record but was instead simply considering whether the Tribunal erred in law, an attack on a finding of a non-jurisdictional fact could be mounted (and only be mounted) by demonstrating that there was no evidence to support it (Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 at 355-356 per Mason CJ; Eshetu at [138] per Gummow J; Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; 199 CLR 135 at [59] per Gaudron J). However, this Court is so constrained. As none of the facts challenged under this ground has a jurisdictional quality, no challenge can be made to them by conducting an inquiry that involves travelling beyond the 'record'. Thus the attempt to deploy material beyond the costs judgment to attack the facts found by the Tribunal falls foul of the ruling noted in [8]. The challenge does not raise a complaint of jurisdictional error."
19. After the hearing the parties' attention was directed to the above passage from McCarthy and they were invited to make submissions on the topic.
20. IA's further written submissions referred to a number of decisions to the effect that the making of a finding in respect of which there is no evidence or logically probative evidence amounts to an error of law, namely Minister for Immigration and Ethnic Affairs v Pochi (1980) 4 ALD 139; 44 FLR 1; Bond; South Western Sydney Area Health Services v Edmunds [2007] NSWCA 16 and Kostas. However none of those decisions are of present relevance because in each of those cases the reviewing Court could scrutinise the impugned decision on the basis that it was affected by an error of law or wrongly decided question of law simpliciter. The error of law did not have to appear on the face of the record. Ultimately however, IA submitted that the challenged finding "underpinned" the damages assessment, was "very significant" and therefore was "jurisdictional".
21. The supplementary written submissions lodged on behalf of Mr O'Shannessy submitted that the above passage from McCarthy represented the correct position in respect of challenges under s 69 of the Supreme Court Act to findings by inferior tribunals concerning facts wholly within jurisdiction. They contended that the challenged finding was such a fact.
22. Further, although it submitted to the orders of the Court, the Authority sought to make submissions on this topic. The Authority's submissions did not specifically address the point made in McCarthy although they appeared to implicitly accept it in that they specifically addressed the scope of the review under the second standard noted in [59] above and contended that the challenged finding was irrelevant to any matter affecting the Assessor's jurisdiction or power. As its submissions appear to only be directed to the jurisdictional limits on Assessors they are generally consistent with R v Australian Broadcasting Tribunal, ex parte Hardiman [1980] HCA 13; 144 CLR 13 at 33-35 (see Myoung v Northern Land Council [2006] FCA 1130 at [14] per Mansfield J).
23. I adhere to the view I expressed in the above passage from McCarthy. However, in light of the supplementary submissions, a further issue arises as to the jurisdictional status of the challenged finding. Basis for Review of the Challenged Finding
24. The basis upon which IA contends that the challenged finding has a jurisdictional quality has already been noted. The supplementary submissions lodged on behalf of Mr O'Shannessy contended that whether or not the challenged finding has a jurisdictional quality turns on a construction of the legislation. At one level of generality that contention should be accepted (see QBE Insurance (Australia) Ltd v Miller at [29]). Hence whether a particular fact is "important" is not to be assessed in isolation but by having regard to its significance to the statutory scheme.
25. I have already outlined the relevant legislative provisions governing the exercise of the Assessor's functions. Section 94 vests an assessor with the power to assess liability and an amount of damages "in respect of a claim referred to the assessor". The Authority contended that there were only two preconditions to the exercise of power by an Assessor to make an assessment in a case such as this, namely the existence of such a claim referred for assessment and an acceptance of "liability" for that claim. As there was no challenge to either of those matters, the Authority submitted, then there was no basis for any complaint of jurisdictional error in respect of the facts found by the Assessor.
26. However this overlooks the effect of s 122(3), s 123(1) and s 126(1) which impose a constraint on the discharge of the function vested in an Assessor by s 94 (see [12]). In particular, their effect is to prohibit an Assessor from making an award for future economic loss unless the Assessor is satisfied that the assumptions or events on which the award is based accord with the claimant's "most likely future circumstances but for the injury". The Assessor is not a court. There is no warrant for construing these matters as imposing a constraint that is wholly within jurisdiction. To the contrary the formation of an opinion referred to in s 126(1) is itself a "jurisdictional fact" as without it s 126(1) and s 123(1) precluded the Assessor from making an award of future economic loss. This conclusion is consistent with that of Schmidt J in Insurance Australia Ltd (t/as NRMA Insurance v Hutton-Potts and Ors [2010] NSWSC 1446 at [41] (although note Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13 at [62] per Basten JA).
27. The balance of the Authority's submissions on this point refer to what it contends are conflicting decisions within the Federal Court as to what findings of fact made in the course of reaching a state of satisfaction necessary for the exercise of a power can be challenged. I am not convinced that conflict is as pronounced as the Authority contends. In any event, the approach that is binding on this Court is one which enables review of a state of satisfaction or opinion that is "based on" a challenged finding (see Eshetu at [145] per Gummow J; SGLB at [38] per Gummow and Hayne JJ with whom Gleeson CJ agreed at [1]).
28. In this context, the Authority also pointed to the conclusion of Gummow and Hayne JJ in SGLB at [39] in respect of a finding by the Refugee Review Tribunal that an applicant for a protection visa suffered post-traumatic stress disorder ("PTSD"), namely that "nothing in the [Migration] Act made the question of whether or not the respondent suffered from PTSD a precondition to the exercise of jurisdiction". That conclusion simply involved a rejection of the bald proposition that a finding of PTSD was of itself a precondition to the exercise of power. It did not involve a rejection of the possibility in another case that a finding that an applicant for a protection visa suffered from such a condition could provide the basis for the review of a decision to refuse their application. However that possibility was excluded in SGLB because their Honours concluded that the finding of PTSD "was in fact beneficial" to the protection visa applicant (SGLB at [40]). Thus in SGLB the decision to refuse the application was not "based on" any such finding.
29. The challenged finding is to the effect that Mr O'Shannessy would have returned to work in August 2011. It was a finding that was directly relevant to the assessment of his past economic loss. However that finding informed the assessment of his most likely future circumstances in that those circumstances assumed that Mr O'Shannessy had returned to work but was subject to further periods off work due to his back condition. It follows that the challenged finding formed part of the Assessor's satisfaction of the matters referred to in s 126(1) of the MAC Act. That state of satisfaction was "based on" the finding about the return to work. The formation of that opinion was a jurisdictional fact in the sense discussed in [59] above. Accordingly, at least so far as the challenged finding was concerned, the assessment can be reviewed by this Court under s 69 of the Supreme Court Act in accordance with the principles noted in [59].
30. It is necessary to say something further at this point about the difference between those principles compared with the third standard of fact review described in Bond. The discussion of so called reasonableness review in recent times commences with Gummow J's judgment in Eshetu. His Honour found that it would permit review "in cases where the satisfaction of the decision-maker was based on findings or inferences of fact which were not supported by some probative material or logical grounds" (Eshetu at [145]). The reference to "some probative material" can be equated to the no evidence basis discussed in Bond. Although some subsequent restatements of this principle omit the absence of "probative material" limb (S20 at [34] and [37]; SGLB at [38]) there is no reason to believe that omission was of any significance. The reference to the finding not being supported by "logical grounds" was clearly meant to be a departure from the passage from Bond set out in [60] above. In Eshetu at [138] to [139] his Honour confined the above passage from Bond to facts found within jurisdiction. This was reiterated by Gaudron J in Enfield at [39]. In S20 at [53] to [60] McHugh and Gummow JJ specifically rejected a submission that sought to exclude primary fact finding from the scope of reasonableness review and to establish that a want of logic in making such a finding was not a basis for review.
31. However there is still considerable uncertainty about the scope of this form of review so far as findings of fact are concerned. In particular it is not clear whether a basis for review is made out where the actual reasoning deployed to find the relevant fact was illogical or irrational or whether the finding must be incapable of logical or rational explanation. The various formulations given by Gummow J from Eshetu onwards suggest the former is sufficient. Thus in Minister for Immigration & Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 ("SZMDS") at [43] to [54] Gummow ACJ and Kiefel J upheld this ground of review by considering the Refugee Review Tribunal's reasons for its findings. However Crennan and Bell JJ appeared to take the latter approach (SZMDS at [131]): "The complaint of illogicality or irrationality was said to lie in the process of reasoning. But, the test for illogicality or irrationality must be to ask whether logical or rational or reasonable minds might adopt different reasoning or might differ in any decision or finding to be made on evidence upon which the decision is based. If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion."
32. In SZMDS Crennan and Bell JJ did not find the allegation of illogicality or irrationality was made out. Heydon J also rejected the ground but on the basis that the decision maker's reasoning was "not illogical" (at [87]). His Honour did not advert to the above distinction.
33. Professors Aronson and Groves are doubtful whether there is truly a difference between the approach of Crennan and Bell JJ and that of Gummow and Kiefel JJ in SZMDS (Aronson & Groves, Judicial Review of Administrative Action, Thomson Reuters, 5th Ed, 2013 at [4.730]). If Crennan and Bell JJ did intend to suggest that demonstrating that the actual reasons for a finding were illogical is insufficient then it undermines the basis for the revival of this ground in Eshetu and following which appears to have been to limit the scope of Bond.
34. In determining this matter I will adopt the position most favourable to IA, namely that the satisfaction of the Assessor as to Mr O'Shannessy's most likely future circumstances can be reviewed on the basis that the finding of fact as to his return to work was not supported by some probative material or by logical grounds stated by the Assessor. Evidence and Reasons supporting the Challenged Finding
35. At the hearing of these proceedings Mr Robinson SC read an affidavit that tendered the nine volumes of material that were placed before the Assessor. It follows from what I have stated that this material is only to be considered in so far as IA makes a complaint of jurisdictional error.
36. The approach adopted by IA was to identify certain material that was said to be contrary to the challenged finding. It also contended that the nature of the finding was such that it was a matter "exclusively relegated" to the medical experts such that if it was not expressly supported by a medical opinion then it could not be sustained (Rodriguez v Telstra Corporation Ltd [2002] FCA 30; 66 ALD 579 at [26] per Kiefel J; "Rodriguez"). I will refer to this material referred to by Mr Robinson SC before returning to the fundamental question raised by IA's complaint, which is said to be the absence of supportive material (or logical grounds) for the challenged finding.
37. Mr Robinson SC referred to a report of an orthopaedic surgeon, Dr Morgan, dated 2 August 2013 in which he stated, inter alia: "Mr O'Shannessy's future remunerative prospects have been very severely compromised. Part of that compromise relates to his long-standing antecedent tri-level discal disease in the lumbar spine. He had already suffered from repeated absences from the workplace. Whilst he was encouraged by his ability to return on many occasions, he was destined to suffer with increasing problems and his remunerative prospects were therefore similarly limited. … His lumbar spinal condition, in isolation, was destined to give rise to repeated absences from the workplace and further compromise his remunerative prospects. The superimposition of the aftermath of this accident has made his employment prospects even more bleak."
38. Another report from Dr Morgan dated 28 August 2014 included the following: "(h) With regards to our client's pre-existing lumbar condition, is it likely he would have been able to return to his previous place of employment but for the subject accident? If so, when do you think he could have been able to do so? I am not able to confidently provide an answer to this question. It is probable that the severity of his lumbar disease was such that he was destined to suffer with intermittent and possibly even frequent absences from the workplace given his prior work experience and his intention to return to work as a truck driver."
39. These passages are consistent with the challenged finding when it is placed in context. Dr Morgan contemplated Mr O'Shannessy returning to work although he also contemplated "intermittent and possibly even frequent absences". The Assessor contemplated periodic absences. It was for that reason that the Assessor applied a discount to the assessment of future economic loss and used a cushion in assessing past economic loss.
40. Mr Robinson SC also pointed to a number of reports from an orthopaedic surgeon based on the Gold Coast, Dr Neil Cleaver, who saw Mr O'Shannessy prior to the motor vehicle accident. In his report dated 13 April 2011 Dr Cleaver described Mr O'Shannessy as recording his symptoms during a consultation on 30 March 2011 as follows: "When you question Mr O'Shannessy about his back pain, he has a constant level of pain with daily exacerbations. Mornings are the worst, and as the day progresses he tends to improve. He may get worse during the day, but takes so many painkillers, he is not sure. He cannot find a sweet spot where his symptoms disappear and he needs medications to sleep. His legs are painful in a distribution not typical of that seen with radicular pain."
41. Dr Cleaver did not see Mr O'Shannessy after his motor vehicle accident. Another report from Dr Cleaver dated 22 February 2013 was placed before the Assessor. He recounted the symptoms conveyed by Mr O'Shannessy during the consultation in terms similar to that just noted and added: "At the time of consultation on 30 March 2011 the prognosis regarding Mr O'Shannessy's spine [was] extremely poor and I would have at that time deemed him very unlikely to have returned to any form of useful employment in anything other than a purely sedentary role."
42. Dr Cleaver's opinion was strongly supportive of IA's position before the Assessor. He had the advantage of having examined Mr O'Shannessy prior to the motor vehicle accident. However there was one significant difference between his assessment and the position facing the Assessor. Dr Cleaver's assessment appears to have been in part predicated on Mr O'Shannessy experiencing the symptoms noted in [85] above. However the Assessor accepted Mr O'Shannessy's evidence that by May 2011 his back had considerably improved. That assessment was supported by the filenote dated 9 May 2011 (see [35] above) and the self-evident fact that he was able to ride a motorcycle by that time.
43. Mr Robinson SC also referred to a report of Dr Chris Oates, a consultant occupational physician, dated 27 May 2013. Dr Oates examined Mr O'Shannessy in July 2012 and May 2013. Dr Oates stated that Mr O'Shannessy "was unfit for his normal duties on account of a pre-existing back condition prior to the subject motorbike accident". He also stated that "a loss of income as a result of the pre-existing back injury is likely to continue indefinitely until such time as he is able to undergo recommended back surgery successfully". Dr Oates agreed with Dr Cleaver that the "prognosis for the (untreated) lumbar spine condition is poor and at present he would only be able to perform a sedentary or semi-sedentary occupational role".
44. Mr Robinson SC also referred to a report of Dr Wilding, an orthopaedic surgeon, dated 25 November 2014 which stated: "Prior to the subject motor accident Mr O'Shannessy went off work in February 2011 with acute low back pain after stepping from a vehicle whilst holding onto an oil bottle in his hand. Because of this, he would have had difficulty sitting for prolonged periods of time. He would not have been suited to work as a truck driver. … However, prior to the accident on 14/5/2011 he had already gone off work with acute low back pain in February 2011 and he would have had difficulty working as a truck driver as a consequence of the prior injury as well."
45. A report from Dr Wagner from the Lismore Base Hospital Multidisciplinary Pain Management Clinic dated 30 January 2012 describes his back conditions in the following terms: "In [relation] to his lower back pain, he states that this is a constant pain averaging around 5/10 most of the time, sometimes up to 7-10/10 with activities and certainly the pain is interfering with his life. He has an approximate 30 minute sitting tolerance and can only walk a short distance as the leg problem is aggravating his lower back problem. He finds some relief if he lies flat with his legs elevated. The facet joint injections have helped him the most in the past. He is currently using Oxycontin CR 80mg of a morning and 60mg at night, in conjunction with sometimes 10mg Endone a day."
46. This passage is of little assistance to IA in respect of the challenged finding. It suggests that, after the motor vehicle accident, there was an interaction between the back condition and leg condition. The present issue concerns the prognosis for Mr O'Shannessy's back condition absent any injury to his leg.
47. Mr Romaniuk SC referred to a number of reports, of which perhaps the most favourable was a report by Dr Carlyle, an independent medical examiner for WorkCover Queensland. Dr Carlyle stated inter alia that: "[Mr O'Shannessy's] 'back condition is obviously stable and stationary in respect of his injury in February however his major problems now relate to the motorbike accident in May."
48. As noted one of Mr Robinson SC's submissions was that the challenged finding was a matter that had been "relegated to the experts". The source of that phrase was the following passage from the judgment of Kiefel J in Rodriguez at [26]: "It may be said that expert evidence is sometimes over-utilised and is called in situations where an arbiter of fact is in a position to determine the matter for itself. Sometimes all that is necessary is for a method or process to be explained, so that the Court or Tribunal can then apply it to the facts it finds. On the other hand, there are cases where a whole question is, in effect, relegated to experts to give evidence upon it. This was such a case. The Tribunal was not put in a position where it could simply draw its own inferences. In an area which required an understanding of a disorder it could only receive the opinions, have the bases for them explained if they differed and apply logic to determine which were to be accepted. Given my view as to the need for expert medical opinion on the topic, it is not necessary for me to consider the balance of the Tribunal's reasoning. … In my view the Tribunal's decision to limit the period of compensation was not supported by probative evidence." (emphasis added)
49. In Rodriguez Kiefel J overturned a finding by the Administrative Appeals Tribunal which substituted its own assessment for the cause of the applicant's post traumatic disorder for the unanimous opinion of the medical practitioners before it.
50. The challenged finding addressed the time at which, but for the motor vehicle accident, Mr O'Shannessy was likely to have returned to work from his back injuries. As I stated, the Assessor did not find that he would return symptom free with his back recovered. Instead the Assessor found that it was likely he would have required further time off work due to his back condition. This assessment was not a matter that was "relegated to the experts". Instead it was an evaluative assessment that was informed by a number of matters including the expert medical opinions. The other matters informing that assessment were his past history of intermittent work due to his back condition and his level of functioning and pain immediately prior to the motor vehicle accident. Further, as the above review demonstrates, it was not the unanimous opinion of the medical experts that Mr O'Shannessy could not have returned to work. Dr Morgan contemplated that he would return. Dr Cleaver did not but that was based on an assessment of his symptoms as at 31 March 2011. There was material suggesting he experienced a substantial improvement in those symptoms after that time and before the motor vehicle accident. The Assessor's finding to that effect was not challenged. It is true that Dr Oates seemed to rule out a return to work and Dr Wilding was pessimistic. However, the mere existence of contrary evidence does not establish a basis for intervention.
51. There is no doubt that the discounts that were applied to Mr O'Shannessy's past and future economic loss assessments were very modest given the medical evidence concerning his pre-existing back complaint. Nevertheless I do not consider that there was an absence of probative material to support the challenged finding. When the challenged finding is considered in context and given the evidence as to the state of his back symptoms just prior to the motor vehicle accident, it was open to the Assessor to make the challenged finding.
52. Further I do not consider that the reasons of the Assessor reveal a lack of logic or rationality in making the challenged finding. The Assessor considered that Mr O'Shannessy was destined to have periods off work due to his back condition. He was in the course of one such period when the motor vehicle accident occurred. Given the improvements in his back symptoms the Assessor determined that period was likely to have ceased in August 2011. The likelihood of further periods off work after that was recognised by the approach of adopting a cushion for past economic loss and applying a 25% discount for future economic loss. Generous as the challenged finding was, the reasoning supporting it was not illogical or irrational.
53. I reject ground 2.

Conclusion

1. It follows that IA's summons will be dismissed. I will order it to pay Mr O'Shannessy's costs. There will be no order as to the Assessor's costs. If any party seeks to vary the costs orders they can apply to vary it within the time provided for in Uniform Civil Procedure Rule ("UCPR") 36.16(3A).
2. Accordingly the Court orders that: 1. The Summons be dismissed; 2. The Plaintiff pay the First Defendant's costs of the proceedings; and 3. There be no order as to the Second and Third Defendants' 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: 31 July 2015