Insurance Australia Ltd t/as NRMA Insurance v Gurbuz Aslan

Background

1. The first defendant claims that he suffered physical and psychiatric injuries as the result of a motor accident on 2 January 2015. The insurer is the compulsory third party insurer of the vehicle at fault. Liability is not in issue.
2. The first defendant lodged a claim in respect of his injuries with the Claims Assessment and Resolution Service ("CARS") under the authority of SIRA. The first defendant claims substantial damages, particularly for past and future loss of earnings.
3. At the time of the accident on 2 January 2015, the first defendant was employed by Westpac Bank ("Westpac") as a "Local Business Banker". He was on Christmas leave at the time of the accident. He returned to work as scheduled in mid-January 2015.
4. The first defendant alleges that upon his return to work, he had "significant physical difficulties" that caused his work performance to suffer. He asserts that Westpac placed him under additional stress and increased his performance measures to unreasonable levels. He also alleges that he was "unfairly treated" by his managers who, he claims, were unsympathetic to his accident-related physical difficulties.
5. The first defendant says that because of his physical difficulties, he was unable to meet Westpac's expectations, leading to his dismissal in May 2016. He claims that Westpac "victimised and bullied" him in circumstances where his employer knew of his physical impairment
6. He alleges that since his dismissal by Westpac, he has had little regular employment. He alleges that his injuries significantly limit his capacity for work in the future. He has made a substantial claim for economic loss.
7. The insurer says that the first defendant made false or misleading statements in relation to both his pre-accident employment at Westpac and the reasons for his dismissal in May 2016.
8. The insurer further asserts that the first defendant has made false or misleading statements as to his pre-accident history of psychological symptoms. In particular, the first defendant failed to disclose that he saw a psychologist only seven weeks before the accident on 2 January 2015 "for ongoing management of [his] anxiety and depressive symptoms".
9. The insurer asserts that the first defendant made false or misleading statements as to the cause of the psychological symptoms he had prior to the accident on 2 January 2015. In particular, Mr Aslan failed to disclose that he suffered anxiety and depression as a result of work performance and disciplinary issues at Westpac before the accident.
10. The insurer asserts that the same or similar workplace issues occurring before the accident ultimately led to the first defendant's dismissal from Westpac, and that it was unrelated to the motor accident.
11. On 20 November 2016, the insurer applied to the claims assessor for exemption of the claim from CARS pursuant to s 92(1)(b) of the MAC Act. The application was on the basis that this matter is not suitable for assessment at CARS because the first defendant has made false or misleading statements in relation to his claim, which is a ground for discretionary exemption of the claim under cl 14.16.11 of the Claims Assessment Guidelines issued by SIRA.

The submissions made by the insurer to the claims assessor

1. The insurer submitted that the following statements (or omissions) made by the first defendant in support of his claim are false or misleading: 1. In a statement lodged with his application for assessment at CARS dated 8 August 2018, the first defendant only once mentioned suffering any psychological symptoms prior to the accident on 2 January 2015, in that he "felt down" during a brief separation from his wife in 2014 and received counselling. The first defendant failed to disclose that he saw a psychologist Mr Aysun Goktepe only seven weeks before the accident "for ongoing management of anxiety and depressive symptoms". In his report dated 12 November 2014, Mr Goktepe recorded that the first defendant told him that those symptoms were a result of workplace issues with his manager at Westpac. 2. In his statement, the first defendant asserted that his injuries caused him to be unable to meet Westpac's expectations after his return to work following the accident, eventually leading to his dismissal from Westpac in May 2016. However, the first defendant told medical assessor Dr Enrico Parmegiani on 8 September 2017 that he was dismissed by Westpac for malpractice because he was submitting finance applications without appropriate documentation. Documents subsequently produced by the Fair Work Commission reveal that there were a range of performance and disciplinary issues that led to the first defendant's dismissal, none of which he disclosed.
2. The first defendant brought proceedings against Westpac in the Fair Work Commission alleging unfair dismissal. The relevant employment file held by Westpac, and the Fair Work Commission file in relation to the unfair dismissal proceedings against Westpac, are relevant to the first defendant's claim for past and future loss of earnings.
3. On the insurer's application, the claims assessor, after she made the decision subject to judicial review, issued directions to the Fair Work Commission and to Westpac bank, requiring each to produce all documents held in relation to the first defendant. The Fair Work Commission has produced documents. To date, Westpac bank has not.
4. The "Employer Response to Unfair Dismissal Application" filed by Westpac in the Fair Work Commission sets out its reasons for terminating the first defendant's employment. The reasons included: (1) Westpac terminated the first defendant's employment because his performance was not at the required level, despite repeated attempts to improve his performance and behaviour from December 2015. (2) The first defendant also hade number of compliance breaches that required resolution. (3) The first defendant had failed to resolve a compliance breach from January 2016, and failed to meet minimum requirements. (4) The first defendant was untruthful in updates on applications and other customer processes, caused excessive turnaround times for customers, and was inaccessible and non-responsive to customers. (5) The first defendant was late or failed to attend team teleconferences, and failed to respond to emails and phone calls to the manager in a timely manner. (6) On 23 May 2016, the first defendant reported three applications for the week when in fact only two were genuine. Additionally, of the 30 proactive claims he reported, 10 were not genuine. (7) The first defendant reported specific performance targets that were untruthful or falsified. It became apparent to Westpac that he falsified his performance data in order to meet performance standards which he had been unable to achieve honestly.
5. For these reasons, Westpac denied that the first defendant's dismissal was unfair.
6. The insurer submitted that the reasons Westpac bank provided for his dismissal in its response in the Fair Work Commission are irreconcilable with the first defendant's statement dated 8 August 2018. They are also irreconcilable with the first defendant's claim that his accident-related injuries led to the termination of his employment with Westpac.
7. Documents produced by the Fair Work Commission, and in particular Westpac's response, underline the necessity for the insurer to have access to the first defendant's employment file at Westpac. Those documents may defeat the first defendant's claim for loss of earnings altogether.
8. It is also relevant that in his "Unfair Dismissal Application" in the Fair Work Commission, the first defendant sets out his allegations as to the reasons for his dismissal, and his assertions as to why the dismissal was "unfair". He makes no mention of the accident on 2 January 2015, or any injuries he allegedly suffered, nor does he assert that his work performance was affected by those injuries. Instead, the first defendant asserted that his dismissal by Westpac was unfair because: 1. He had worked for [Westpac] for over nine years with an "unblemished employment record". 2. His performance issues could have been cured with further training and support, and or the provision of a warning. 3. His termination was too harsh a penalty for the (mis)conduct alleged by Westpac.
9. In its response, Westpac denied each of these three assertions.

The law

1. Section 92 of the MAC Act reads: "92 Claims exempt from assessment (1) A claim is exempt from assessment under this Part if: … (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)." (My emphasis)

The Guidelines

1. Claims assessments guidelines issued under s 69(1) of the MAC Act, and effective from 1 October 2018 ("the Guidelines"), outline the procedures to be followed by claims assessors in the assessment of claims under Part 4.4 of the MAC Act.
2. Under the heading "Unsuitable for Assessment under section 92(1)(b)", cls 14.11 and 14.16.11 of the Guidelines state: "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. … 14.16 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 the preliminary determination including, but not limited to: … 14.16.7 whether the claim involves complex issues of causation in respect of the relationship between the accident, the injuries sustained and disabilities arising from it including but not limited to multiple accidents or pre-existing injuries or medical conditions; 14.16.8 whether the insurer is deemed to have denied liability under section 81(3); 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.)" (My emphasis)

The reasons for the decision of the claims assessor dated 20 March 2019

1. As previously stated, on 20 November 2018, the insurer lodged an application for discretionary exemption pursuant to s 92(1)(b) of the MAC Act. The basis of the insurer's application was that the first defendant made false or misleading statements pursuant to 14.16.11 of the Guidelines. The insurer provided particulars in writing of the general nature of its allegations that the first defendant had made false or misleading statements.
2. The first defendant opposed the insurer's application on the basis that he had given a history to Dr Parmegiani that because of the accident, his performance at work had been impacted, resulting in his termination at Westpac.
3. Furthermore, the first defendant said he made an unfair dismissal claim against his former employer which was successfully resolved in his favour. In submissions, the first defendant said the real issue to be assessed is whether his injuries were sufficient to affect his work capacity. In summary, he argued there is no basis to submit that his claim is not suitable to be assessed at CARS.
4. Under the heading "Decision", the claims assessor stated at [9]-[14]: "9. The primary submission made by the Insurer to support their application is based on a statement made to Assessor Parmegiani regarding a work place situation. In addition, they submit he failed to disclose pre-existing psychological symptoms due to stressors at his work place. 10. This issue can be fairly assessed at CARS. All work place records can be requested and if there is non-compliance, I have the power to issue s 100 Directions. This request can also be made for the unfair dismissal case file. It is my experience the issue of s 100 Direction is very effective resulting in the production of records without impediment. It is open to me to follow up businesses or persons by telephone which generally elicits an immediate response. S 100 Directions can be as effective as a subpoena. 11. There must be special circumstances for me to limit the Insurer asking questions of the Claimant, lay persons, and if necessary medical experts and or psychologists during an Assessment Conference. The CARS process generally gives all parties the opportunity to take detailed notes. 12. I also have the power to make adjustments in relation to costs where reasonable and necessary. 13. The CARS process gives the Insurer every opportunity to test the Claimant's credit and provide to the Assessor detailed written submissions as well as the opportunity to address oral submissions at the conclusion of the Assessment Conference. On application by either party further written submissions following the Assessment Conference may be considered necessary. 14. Having reviewed the material submitted by the Insurer and after carefully considering their written submissions contained in the application for Discretionary Exemption, I am satisfied this claim is suitable to be assessed at CARS."
5. For these reasons, the claims assessor made a determination that she was satisfied that this claim was suitable to be assessed by CARS.
6. In these judicial proceedings, senior counsel for the insurer referred to IAG Limited t/as NRMA v Khaled [2019] NSWSC 320 ("Khaled"). In Khaled, the issue before Bellew J was the proper interpretation of s 92(1)(b) of the MAC Act. At [27]-[31], his Honour stated: "[27] Bearing in mind the terms of section 92(1)(b) of the [MAC] Act, the question that the Assessor was required to ask herself was whether the claim was not suitable for assessment in CARS. In accordance with general principles of statutory interpretation, the word 'suitable' is to be given its natural and ordinary meaning. The Macquarie Dictionary defines the word 'suitable' as meaning: 'Such as to suit; appropriate, fitting, becoming.' [28] In my view, it is evident from the Assessor's reasons that she did not turn her mind to the question whether the matter was not suitable for assessment in CARS. There is an obvious, and indeed material, difference between whether or not a matter can be dealt with in the CARS process (in the sense of being capable of being dealt with in that way), and whether it is not suitable to be dealt with in that way. In that sense, capability is not the same as suitability. The terms of section 92(1)(b) required the Assessor to consider and focus upon the latter question. It is evident from the passages of her reasons to which I have referred that the Assessor failed in that regard and, in fact, concentrated on the former. In doing so, I am satisfied that the Assessor failed to ask herself the correct question and thus erred. [29] I am fortified in that view by the terms in which the Assessor referred to the judgment of Campbell J in Banos. In that case, his Honour made reference to a number of considerations which he considered may be material in a matter of this nature: '[43] When deciding the statutory question in a case that turns upon whether a person has made a false and misleading statement, the following considerations are likely to be relevant. I do not mean to be exhaustive: (a) the Act contemplates that the great majority of disputes will be resolved by the assessment process, and not in court; (b) however, the consideration that s 92 provides for both mandatory exemptions and discretionary exemptions provides a clear legislative guidepost that appropriate cases should be "redirected" to the court system at an early time by way of preliminary determination; (c) a primary question will be, having regard to the nature of the issue raised, whether both parties can be afforded a hearing (assessment conference) which is in a practical sense fair having regard to the nature of the allegation raised; (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 a claimant's reliability into question; (e) as it is clear the claimant's credit will be called into question, a consideration of whether it is in the public interest that such an examination occur in open court; (f) finally, but by no means least, the consideration that it is not mandatory, whenever a credit issue is raised, to decide that the claim is not suitable for assessment under Part 4.4.' [30] The Assessor made passing reference to (in the sense of noting) some, but not all, of the matters to which his Honour referred. The Assessor did not, in my view, engage with any of those considerations. In particular, she did not consider how and, if so, to what extent, any of them impacted on the circumstances of the case which was before her. I accept the submission of senior counsel for the plaintiff that this failure on the part of the Assessor reflects the fact that she asked herself the wrong question. [31] For these reasons the first of the errors relied upon by the plaintiff has been made out."
7. I acknowledge that when the claims assessor made her determination, she was not aware of the decision of Khaled because it was handed down the day after her decision.

Ground 1 - the claims assessor applied the "wrong test"

1. The insurer submitted that the claims assessor purported to dismiss the insurer's application for discretionary exemption of the first defendant's claim on the basis that the matter is capable of assessment at CARS. The insurer submitted that in so doing, the claims assessor applied the wrong test.
2. The insurer argued that the claims assessor was required to determine whether, in light of the allegations of false or misleading statements made by the insurer, the claim was "suitable" for assessment at CARS. The insurer submitted that by determining the insurer's application on the basis that, in her view, the first defendant's claim was "capable" of being assessed at CARS, the assessor fell into legal error, and her decision is invalid: see Khaled at [28]; IAG Ltd t/as NRMA Insurance v Qianxia Lou [2019] NSWSC 382 ("Qianxia Lou") per Wilson J.

Consideration

1. This Court has jurisdiction to grant any relief or remedy in the nature of a writ of certiorari, which includes jurisdiction to quash the determination of a claims assessor of SIRA if that determination has been made on the basis of an error of law on the face of the record. The face of the record includes the reasons expressed by the claims assessor for his/her ultimate determination: s 69 of the Supreme Court Act 1970 (NSW).
2. In Craig v State of South Australia (1995) 131 ALR 595, the High Court outlined what will constitute a jurisdictional error at 602 as follows: "…If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it."
3. Although Craig concerned a decision made by a tribunal, its comments apply equally to the claims assessor in this case.
4. The Court of Appeal in Rodger v De Gelder (2015) 71 MVR 514 said at [95] per Gleeson JA, MacFarlan and Leeming JJA agreeing): "Jurisdictional error includes a constructive failure to exercise jurisdiction. A constructive failure to exercise jurisdiction arises when a decision-maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided, or misunderstands the nature of the opinion it is to form: Yusuf at [41] per Gaudron J"
5. This ground of review raises the identical issue dealt with in Kahlad. Bearing in mind the terms of s 92(1)(b) of the MAC Act, the question that the claims assessor was required to ask herself was "whether the claim was not suitable for assessment in CARS". However, she misdirected herself and asked the wrong question, which was whether she was satisfied this claim was capable of assessment in CARS. The claims assessor applied the wrong test. By so doing, she misunderstood or misconstrued the scope and nature of her power pursuant to s 92(1)(b) of the MAC Act, and incorrectly exercised that power in determining the insurer's application. This constitutes a constructive failure to exercise jurisdiction and it is an error on the face of the record.

Ground 2 - The claims assessor failed to carry out her statutory task

1. The insurer submitted that it was the claims assessor's statutory task to determine whether, having regard to the insurer's allegations of false or misleading statements, the first defendant's claim is not suitable for assessment at CARS.

Consideration

1. Although expressed on slightly different terms, this ground is in substance the same as ground 1.
2. The claims assessor was obliged to determine whether the claim was not suitable for assessment. Instead the claims assessor considered whether the claim was capable of assessment at CARS. The claims assessor failed to perform her statutory task. By doing so, she fell into jurisdictional error. It is also constitutes an error on the face of the record.

Ground 3 - the claims assessor made an error as to a fact critical to her decision

1. In its application for discretionary exemption of the first defendant's claim, the insurer asserted that the claim cannot be assessed at CARS unless the insurer has access to the first defendant's employment records at Westpac, and to documents in connection with unfair dismissal proceedings brought by the first defendant against Westpac in the Fair Work Commission.
2. The claims assessor dealt with that contention in her reasons at [10]: "This issue can be fairly assessed at CARS. As workplace records can be requested and if there is non-compliance, I have the power to issue s 100 Directions. This request can also be made for the unfair dismissal case file. It is my experience the issue of s 100 Direction is very effective, resulting in the production of records without impediment. It is open to me to follow up businesses or persons by telephone, which generally elicits an immediate response. S 100 Directions can be as effective as a subpoena."
3. The claims assessor did issue a s 100 direction to Westpac and to the Fair Work Commission requiring production of documents relating to the first defendant. The Fair Work Commission has produced documents. However, Westpac has not produced the first defendant's employment records. The claims assessor has no power to enforce compliance with the s 100 direction to Westpac.
4. The claims assessor refused the insurer's application for exemption upon an assumption of fact, which was that Westpac would comply with her s 100 direction and produce the relevant documents. Westpac has not produced the documents. As such, the insurer submitted that the claims assessor's assumption of fact was wrong.
5. In refusing the insurer's application on the basis of a wrong assumption as to a critical fact, the insurer argued that the claims assessor fell into error of law: see Qianxia Lou. As a result, the insurer submitted that the claims assessor's decision is affected by legal error and is invalid.

Consideration

1. The s 100 direction was issued to Westpac after the claims assessor made her determination, and to date Westpac has not produced any records. As such, it is my view that submissions should be made to the claims assessor at SIRA as to the failure of Westpac to produce documents and compliance with the s 100 direction is not enforceable.

Result

1. The claims assessor made two jurisdictional errors. As such, her decision is invalid and should be quashed. The decision dated 20 March 2019 refusing the insurer's application for exemption made pursuant to s 92(1)(b) of the MAC Act is quashed. The matter is remitted to SIRA to be dealt with according to law.

Costs

1. The remaining question is the determination of costs. All defendants filed submitting appearances, save as to costs. The appropriate order is that costs are reserved in order to give the parties an opportunity to be heard, if the insurer seeks its costs.

The Court orders that: (1) The decision of the claims assessor dated 20 March 2019 refusing the insurer's application for exemption, made pursuant to s 92(1)(b) of the Motor Accidents Compensation Act 1999 (NSW), is quashed. (2) The matter is remitted to SIRA to be dealt with according to law. (3) Costs are reserved.

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: 14 November 2019