Insurance Australia Ltd t/as NRMA Insurance v Pate

Supreme Court of NSW|2015-12-04|Before: Schmidt J

Issues

NRMA contends that the assessor made two errors of law in the assessment of Mrs Pate's past and future economic losses. The first, by wrongly taking into consideration irrelevant matters. The second, by failing to deal with an issue it had advanced, in relation to Mrs Pate's claimed loss of earnings from the rabbit farming business.
In issue between the parties on this appeal were: 1. The admissibility of certain evidence. 2. Whether the assessor had erred in failing: 1. to take into account a relevant consideration, namely the need to obtain Council consent for the rabbit farming business; 2. to give NRMA procedural fairness; and 3. to give adequate reasons for his findings on damages. 1. Whether the assessor had attached inappropriate significance to Mrs Pate's permanent impairment in the assessment of her economic damages.
Mrs Pate contends that the assessor made no material error and that the summons should be dismissed with costs.

The requirements of the Statutory Scheme

Mrs Pate's injuries had been assessed at 5% whole person impairment for her physical injuries and 8% whole person impairment for her psychiatric injuries. They were not compensable because they fell below the 10% whole person impairment limit specified by s 131 of the Motor Accidents Compensation Act.
Under s 94(1)(b) of the Motor Accidents Compensation Act the assessor was required to assess the amount of Mrs Pate's economic damages, that "being the amount of damages that a court would be likely to award" her. Under s 94(2) the assessor had to determine Mrs Pate's damages, having regard to such information as was conveniently available. The parties provided the information they respectively relied on at a hearing at which both oral and documentary evidence, including expert evidence, as well as written submissions were advanced. Rules of evidence did not apply at this hearing and no transcript of the proceedings was kept.
The obligations imposed by s 94 on the assessor included providing the insurer and claimant with a certificate and attaching "a brief statement to the certificate, setting out the assessor's reasons for the assessment" (s 94(5)). Under the Motor Claims Assessment Guidelines, Guideline 18.4 required that the assessor provide with the certificate of assessment: "18.4 .. a statement of the reasons for the assessment. The statement of reasons is to set out as briefly as the circumstances of the assessment permit: 18.4.1 the findings on material questions of fact; 18.4.2 the Assessor's understanding of the applicable law if relevant; 18.4.3 the reasoning processes that lead the Assessor to the conclusions made; and 18.4.4 in the case of an assessment certificate pursuant to section 94, the Assessor must specify an amount of damages and the manner of determining that amount."
Section 122(3) of the Motor Accidents Compensation Act provides that the provisions of Chapter 5 of the Act, which deals with various heads of damages, apply to assessors acting under s 94.
Chapter 5 includes s 126, which provides: "126 Future economic loss - claimant's prospects and adjustments (cf s 70A MAA) (1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury. (2) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury. (3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted."
This provision thus imposes an onus on a claimant such as Mrs Pate, not on the insurer.

How the resolution of the issues lying between the parties must be approached

In proceedings such as this, reasons for a decision given by an administrative decision maker such as the assessor are not to be scrutinised by "over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reason are expressed" (see Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at [31]).
Further, s 69 of the Supreme Court Act does not empower the Court to review an assessor's decision for error of fact. Such a review is confined, in the case of an error of law that appears on the face of the record of the proceedings, to the reasons expressed by the assessor for the certificate issued and the certificate itself (see s 69(4)). The Court may also review the decision for jurisdictional error (see Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163).
In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Mason CJ explained at [42] - [43] that ordinarily, a finding of fact, including an inference drawn from primary facts, will not constitute a reviewable decision. If, however, a statute requires or authorizes the decision-maker to determine an issue of fact as an essential preliminary to the taking of ultimate action or the making of an ultimate order, then the determination of that issue of fact is reviewable. An ultimate determination which depends upon a finding of fact which is vitiated by error of law, or made without evidence, is also reviewable.
Further, while there is no error of law simply in making a wrong finding of fact, whether there is any evidence of a particular fact is a question of law, as is the question of whether a particular inference can be drawn from facts found or agreed (see at [87] - [89]). Making findings and drawing inferences in the absence of evidence, also involves an error of law.
As discussed in QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442 at [36], review proceedings are thus: "... limited to determining whether the proper officer's opinion has been properly formed according to law: Buck v Bavone [1976] HCA 24; 135 CLR 110 at 118-119 (Gibbs J); D'Amore at [220]. The critical question is thus "whether the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds": Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; 78 ALJR 992 at [38] (Gummow and Hayne JJ). Further, as explained by Latham CJ in The Queen v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; 69 CLR 407 at 432: "If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide."
Failing to take into account a "relevant consideration", that is, a factor which, by law the decision-maker is bound to take into account, also involves jurisdictional error (see Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39; Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; 61 MVR 443). A constructive failure to exercise jurisdiction may also arise because the statutory conferral of power has not been exercised, according to its terms (see Cervantes at [21]).
The reasons given for an assessment under the Motor Accidents Compensation Act have to be directed to what is in issue between the parties. As explained in Insurance Australia Limited trading as NRMA Insurance v Helou [2008] NSWCA 240 at [62], such reasons must identify the various heads of damage awarded and explain how the numbers attributed to each of those heads of damage have been arrived at.
Further, to fail to respond to a substantial, clearly articulated argument relying upon established facts, can involve a denial of natural justice (see Dranichnikov v Minister for Immigration and Multicultural Affairs ; [2003] HCA 26; (2003) 77 ALJR 1088 at [24].) A failure to accord procedural fairness can also involve jurisdictional error (see Kirk v Industrial Court of New South Wales [2010] HCA 1; (2010) 239 CLR 531 at [60] and Re Refugee Review Tribunal; Ex parte HB [2001] HCA 34; (2001) 179 ALR 513 at [10].)
What the law is concerned with, both in the case of questions of procedural fairness and natural justice, is to avoid practical injustice (see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [37] per Gleeson CJ).
It follows that in order to resolve the various issues lying between the parties on this application, it is necessary to consider not only the assessor's reasons for the disputed conclusions which he reached, but also to consider the cases which the parties had advanced at the hearing and the evidence which they then led.

The assessor's reasons

Mrs Pate was employed by a real estate agency as a property manager at the time of the accident. She and Mr Pate gave affidavit evidence in support of her claim. She was cross-examined. Mr Pate was not called. The parties also led expert evidence as to the claims relating to the rabbit farming business.
The assessor identified at [7] the issues lying between the parties to be: "a. What is the nature and extent of the Claimant's injuries? b. In relation to future economic loss what are the Claimant's losses if any arising out of her partnership in the Rabbitry? If there is a loss arising from the Rabbitry would the partnership have increased the breeding does from 200 to 400 after the outbreak of myxomatosis killed the majority of stock. The Insurer agrees that the Claimants current net wage per week would be $670 if she continued to be employed as a property manager with a real estate agency. They do not concede that she would have continued to earn that sum, as claimed, for the balance of her working life. Nor do they concede that the Claimant would have incurred any future economic loss with respect to continuing to work the Rabbitry. Was the Claimants employment at the real estate agency terminated on or about 6 April 2015? …"
During the course of the hearing it became necessary to ask the parties to address me on what the assessor had decided, given certain somewhat cryptic aspects of his decision. The result of that request was submissions made by both parties, which confirmed that there was some difficulty in following what had been decided. As a result, the parties sought and were granted the opportunity to discuss the reasons and to provide a note, in hopefully agreed terms. Some days later an agreed note was provided, to which I will return.
The assessor examined the nature and extent of Mrs Pate's physical and psychiatric injuries, noting at [17]: "17. It is claimed that the Rabbitry closed in January 2012, some 14 months after the accident, due to the Claimant's medical condition and she could not carry out her share of the duties in the Rabbitry and her husband could not carry on alone."
The assessor concluded as to Mrs Pate's medical conditions at [35]: "35. Having read all of the medical reports in my assessment the opinion of Dr Jones and his optimism is expressed more as a wish than an opinion. The pain expressed by the Claimant with respect to her neck together with the chronic headaches must be very debilitating. No one would undergo the numerous neurotomies that the Claimant has undergone at the Pain Clinic, unless her pain is real. The secondary effect of formication, loss of appetite, inability to sleep, loss of weight, gastrointestinal insults and constipation are to her very real and so far without apparent remedy. Despite the opinions of Assessor Truskett made I note two years ago, the Claimant has attempted both before, then and since to vary her treatment and medications to rid herself of these chronic ailments. A finding of 5% WPI in any event is significant with respect to her physical injuries. A finding of 8% WPI for her psychiatric injuries falls into the same category, individually and combined they would have an impact upon her loss of earning capacity, need for treatment and care."
On NRMA's case these observations revealed the first error into which the assessor fell, namely, wrongly taking into account the percentages of Mrs Pate's permanent impairment as having an impact on her loss of earning capacity, contrary to the observations in Brown v Lewis [2006] NSWCA 87; (2006) 65 NSWLR 587 at [23].
The assessor then turned to Mrs Pate's past economic loss. He concluded that the whole $60,073.46 Mrs Pate had claimed had been established, in circumstances where for some four years after the accident, she had worked part-time as a receptionist, performing sedentary work for her employer. NRMA's case that only $35,000, should be allowed, given the nature of her injuries, was rejected.
In the parties' note it was agreed that the amount the assessor had awarded was the sum repayable to the workers' compensation insurer, for Mrs Pate's wages, including top up, tax and superannuation. NRMA did not claim that any error had been made in this aspect of the award. The parties also agreed that logically, there may have been some overlap between the past economic loss awarded for Mrs Pate's real estate property management work and the past economic loss otherwise awarded for the rabbitry, but no issue was taken by NRMA about what might have been a minor overlap.
As to the rabbitry, the assessor outlined the affidavit evidence given by Mrs Pate and her husband and that given in Mrs Pate's oral evidence. After referring to Mrs Pate's background and past work in a business she and her husband had pursued, he noted that: "42. In or about 2008 her husband, Ricky Pate developed heart problems such that they decided to close down the painting and decorating business. They then purchased a caravan and went on an extended driving holiday for some 12 months around Australia. While doing this they apparently investigated the feasibility of operating a rabbitry which included eventually selecting the 125 acres at Coutts Crossing near Grafton which they purchased for cash after selling their Cairns property in or about April 2010. At that time the property only had one house and one garage on it They cleared paddocks, started a garden, built sheds, fences and roads. The Claimant commenced fulltime work with the real estate agency while Mr Pate picked up work as a commercial painter working on average 40 hours per week. They purchased and built the cages, equipment and materials and built up to a total of about 200 breeding does and 20 bucks at the time of the accident in October 2010."
The assessor also noted at [47] that: "47. The Rabbitry in fact only operated at full capacity for a short period of time and therefore Vincents do not have available to them, and nor do I, evidence of a longstanding successful business. It is for that reason that assumptions have to be made which the parties do not agree upon and therefore for me to assess."
At [54] - [57] the assessor noted: "54. At the time of the accident the Pates were both fully employed as a property manager and as a painter/decorator. Prior to going to their respective jobs however Mr and Mrs Pate both had respective duties which took up to about 3 hours per day divided before and after work and between them. They also both worked the whole of the weekend on the Rabbitry. Mrs Pate was in charge of the breeding program which included keeping extensive and careful records to eliminate inbreeding. She was also responsible for the handling and moving of the rabbits themselves and general husbandry. Mr Pate looked after cleaning the Rabbitry, which judging by the photographs supplied included extensive cleaning from under the cages in which the rabbits were kept. Both Mr and Mrs Pate shared the feeding and watering duties. 55. Prior to the accident it is said that the Pates intention was to grow the Rabbitry such that they were able to maintain a breeding stock and sell 2,000 rabbits pet-month. In order to sustain this level of production the Pates planned to build a second Rabbitry. I am satisfied having regard to the evidence of invoices provided and photographs and the evidence of the Pates that in fact at the time of the accident it was the Pates intention to establish the second shed of rabbits. Again these were to contain a further 200 breeding does and 20 bucks. However fate took a further hand in that 3 months after the accident the Rabbitry suffered an outbreak of myxomatosis which killed the majority of the stock in the Rabbitry and many of those that survived were rendered infertile by the disease. 56. It has not been suggested by the Claimant that but for the accident the outbreak of myxomatosis would not have happened. 57. Assuming that Mrs Pate would soon recover from her injuries sustained in the accident and regain her ability to undertake physical labour in the Rabbitry, Mr Pate began to restock the Rabbitry. This took some 4 months. However he soon discovered that establishing and growing the Rabbitry was a two person job. Accordingly the second shed was never built and after 6 months of attempting to run the Rabbitry on his own Mr Pate decided he could not continue and in January 2012 the Rabbitry was destocked and ceased trading."
The assessor then referred to the reports of the forensic accountants who the parties had each engaged. For past economic loss the assessor concluded at [89] - [91]: "89. Having considered all of the above and with the benefit of the report of both Forensic Accountants, I do not believe that past economic loss of the Rabbitry is capable of precise calculation. 90. I do accept that it was the partnerships intention to proceed to enlarge the Rabbitry by a further 200 does. Just as I believe there may have been economies of scale that may support the Claimant, I also accept that the extra load of an addition 30 hours work, on top of their normal employment of 40 hours per week would have placed strains on the partnership and on Mr and Mrs Pates relationship. Something would have to give and l believe a reduction in paid employment from one or the other was going to happen. It seemed to me that in the evidence that was being provided, it was more likely that Mr Pate would take on less and less work as a painter and concentrate on the Rabbitry. On the other hand if the submission from Vincent's is correct and that the Claimant's contribution to the partnership was 60-65% then the Claimant's contribution would have been about 40 hours per week. This I believe would be unsustainable on top of her other employment. Ultimately I believe she would have reduced her employment as a property manager to 3 days a week. 91. However for the purpose of calculating past economic loss I prefer to make an allowance of $60,000 only, having considered ail of the issues. This sum is in addition to the wage loss as a property manager assessed at paragraph 40 above. "
NRMA claims that the $60,000 allowed for past economic loss was infected by error, the assessor having taken the view, explained at [88] of his reasons, that the NRMA had conceded that lack of Council approval for the rabbitry was no longer in issue. NRMA's case was that it had made no such concession.
The assessor then turned to consider future economic loss, finding at [92] - [94]: "92. Consistent with my conclusions above, l believe the Claimant and her husband would have continued in the Rabbitry with 400 does, but for the accident. 93. However to maintain a Rabbitry of that size the Claimant would have had to reduce her employment as a property manager to 3 days per week. Given that the agreed loss as a property manager by the parties is $670 net per week, I calculate her loss to be $402 per week. I understand the appropriate multiplier for a retirement age of 67 is 542 (not 670 as submitted by the Claimant) and therefore her loss is $217,884. I would then allow the usual 15% for vicissitudes giving a loss from work as a property manager of $185,200. 93. I note that the Insurer has submitted that up until now the Claimant has been working in a sedentary or semi-sedentary position and therefore is capable of continuing to work in such a position for the balance of her life. That is to say she could continue to work say 3 days per week in a sedentary position, for the balance of her life notwithstanding the accident. 94. In coming to that conclusion one has to assume that either the Claimant would have continued to work for her present employer, Bailey and Gough Real Estate Agents, of their successor, for the balance of her working life."
The assessor took the view that Mrs Pate's employment at the real estate agency had come to an end on 16 April 2015 (at [101]). He concluded that: "101. In my assessment I have no doubt that the events of 16 April 2015 took place and the Claimant was correct in her view that her position at Bailey and Gough had been terminated for all time and she was not to return. I base that assessment on two factors; Firstly the fact that the Worker's Compensation Lawyer had now terminated their weekly payments of "top-up" to the Claimant and that therefore her employer was likely to be requested to make those payments themselves. Secondly that Mr Ford fully intended to terminate the Claimant's services on 16 April 2015, and it was only once the Claimant started sending emails and requesting a letter of termination did he realise, or he was advised, that he should be applying "procedural fairness" before writing a letter of termination. Otherwise he would be exposing his business to considerable risk for a claim of unfair dismissal. I therefore proceed on the basis that she was terminated on 16 April 2015. 102. I also proceed on the basis that she would be at a considerable disadvantage in the open labour market to gaining re-employment because of her injuries, her age, and the fact that suitable employment for the Claimant would be difficult in the Grafton region. Therefore my calculation of her future economic loss with respect to her employment as a property manager stands, as calculated at paragraphs 92 and 93. I further allow superannuation on that sum at 11% only, as claimed, thus $20,372.00."
NRMA does not assert that the assessment of future loss by reference to Mrs Pate's loss of employment was infected by error.
As to the rabbitry, the assessor concluded at [106] - [107]: "106. Like all farming enterprises a Rabbitry is at substantial risk. Although given the intensive nature of the farming involved, drought is not an issue (although this may increase some variable expenses) but it is still very vulnerable to disease such as myxomatosis. There is also the issue of the Claimant and her husband being able to sustain such an intense effort of labour for the balance of their working lives. On top of that there should be the usual allowance for vicissitudes. A greater allowance should perhaps be made for vicissitudes given Mr Pate's previous health issues, of which there was little evidence. 107. Doing the best I can I assess $200,000 as being an appropriate amount as the loss of future earnings arising out of the Rabbitry. I do not allow anything for future superannuation arising out of the Rabbitry business, as they were sole traders, and in any event it is a global assessment."
NRMA's case is that the buffer of $200,000 was also infected by error, given that the assessor had misunderstood its case in relation to the rabbitry.

The assessor erred as to NRMA's case

Part of Mrs Pate's case rested on claimed loss of earnings from the rabbitry which she conducted with her husband. Mrs Pate gave affidavit evidence and was cross-examined, other evidence was received and the parties' legal representatives each advanced written and oral submissions, including as to the rabbitry claim.
There was an objection to the admissibility of evidence, as to the case NRMA had advanced before the assessor, given s 69(4) of the Supreme Court Act. I have already discussed the consequences of a failure to deal with a clearly articulated aspect of a party's case.
Over objection I thus received the evidence as to the case which NRMA had pressed at the assessment conference, that clearly being relevant to what lay in issue between the parties and therefore admissible under s 55 of the Evidence Act 1995 (NSW).
The disputed evidence was given by way of affidavit. Mr Wilson of counsel deposing: "4. At the beginning of my oral closing submissions, I specifically relied on written submissions dated 3 May 2015 which had been prepared by me. I had provided a copy of these written submission to the Assessor and Mrs Pate's Counsel earlier during the day. Exhibited and Marked "A" is a copy of the Insurer's Further Submissions dated 3 May 2015. 6. At no stage during the Hearing or my oral submissions, did I concede that the lack of development consent was no longer in issue."
It was also argued that this evidence amounted to a conclusion as to what had happened at the conference. That objection was resolved on the basis that it was accepted that Mr Wilson was saying "At no time did I make a statement to the assessor that I withdrew or abandoned or conceded that any part of the written submissions, but particularly this part, was no longer pressed by the insurer".
Mr Wilson was not required for cross examination. His evidence was corroborated by the unchallenged evidence given by Ms James, the solicitor with carriage of the matter, who deposed that Mr Wilson had said in his oral submissions at the conference that he relied on his written submissions.
In the written submissions, NRMA's case was explained to be that Mrs Pate's claim for loss of earning capacity from the rabbitry was speculative; that there was an issue as to whether it was intended to be an income producing operation, rather than a hobby, which was not compensable (at [44]); and that its viability and the associated business planning were dubious (at [42]).
Reliance was placed on aspects of the reports of the experts, Dr Gliksman and Ms Berger, as well as on the fact that Mr and Mrs Pate had other employment. It was argued that if the rabbitry was actually intended to be a serious income producing entity, that basic matters such as council consents, licences and business plans and the like would have been attended to (at para 43(c)). It was also submitted to be relevant that development consent to operate the rabbitry had not been sought from the Clarence Valley Council, (at 45). Other reasons why the business was not viable were developed at para 44, to support the submission that there should be no allowance for past or future loss of earning capacity from the rabbitry.
The evidence led on this application establishes that what lay in issue between the parties as to the assessment of Mrs Pate's claimed damages, included whether Mr and Mrs Pate truly intended to operate the rabbitry as a commercial business and whether it was viable. NRMA relied on Mr and Mrs Pate not having obtained development approval for the rabbitry from the Clarence Valley Council. Both parties had led evidence and made submissions about this.
The assessor, however, observed at [88] that: "88. On 21 April 2015 the Insurer served multiple documents obtained from the relevant local government authority namely Clarence Valley Council concerning the issue of whether or not the partnership had council approval to carry out the business of rabbit farming. Some questions were asked of the Claimant concerning this approval but her response under cross examination was to the effect that no such approval was needed for a rural property. The Claimant's husband was not called although he was available. No further submissions were made on this point by the insurer and given that it was for the Insurer to prove the lack of approval, I took the view that the Insurer had conceded that this was no longer an issue."
The evidence established that the assessor's observation that this aspect of NRMA's case had not been pressed was incorrect. That involves material error on the face of the record. Unlike the situation considered in Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13, in this case the face of the record demonstrates that a matter was raised which the assessor was required to consider. The evidence established that he erred in concluding that NRMA had made any concessions about that issue.
This was not conceded in these proceedings by Mrs Pate, whose case was that what was advanced on this application was different to what had been argued before the assessor. In any event, she submitted, the material on which NRMA had advanced its case did not establish that Council consent was required for the rabbitry, or that it could not have been obtained, if her understanding that it was not required was incorrect. It was also contended for Mrs Pate that an evidentiary onus fell on NRMA, to establish this aspect of its case. It had not proved what it needed to prove and so its complaint must fail.
In the result, it was also contended, even if the assessor had erred as NRMA has established, there had been no practical injustice for NRMA. The assessment of damages had been properly approached on the basis of a buffer, by which account was taken of uncertainties and vicissitudes the assessor had identified. It followed that even if error had been established, the Court's discretion to refrain from granting the relief sought would be exercised.
Contrary to these submissions, it has been established on the evidence that the assessor's error had the result that in resolving what lay in issue between the parties, the assessor failed to take a relevant consideration into account. The result was that the assessor fell into both legal and jurisdictional error (see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2011) 206 CLR 323 at [82]), having denied NRMA procedural fairness in not taking into account that aspect of its case, a denial of natural justice of the kind discussed in Dranichnikov.
Nevertheless, given Mrs Pate's case, that there was no practical injustice, it is necessary to consider what transpired at the hearing.

The hearing before the assessor

On the evidence led in this case, there is no doubt as to the submissions which NRMA advanced before the assessor. There is some difficulty in determining what all the evidence received at the hearing was, given that no transcript was kept of the proceedings and that the assessor wrongly understood that an aspect of NRMA's case was not being pressed.
There is no issue that Mrs Pate's case rested on her and her husband's claimed intention to operate the rabbitry for commercial purposes, at a significantly increased scale, so that they could sell 2000 rabbits per month. That this was their intention, was in issue.
The evidence before the assessor included a request from NRMA's solicitor for advice from the Council, as to whether its approval was required for the conduct of such a rabbitry business and the advice provided by the Council. This evidence was not considered by the assessor in arriving at the conclusions which he reached.
In December 2014 the advice from Council provided by its compliance officer was: "Council note that there is no known address of XX XXXXXXXXX Road, Coutts Crossing on our records, However, assuming the land you require information on is zoned RU2 Rural Landscape or RU1 Primary Production, it is likely that this scale of farming rabbits would require consent as "Intensive Livestock Agriculture" under the Clarence Valley Local Environmental Plan 2011. intensive livestock agriculture means the keeping or breeding, for commercial purposes, of cattle, poultry, pigs, goats, horses or other livestock that are fed wholly or substantially on externally-sourced feed, and includes any of the following: (a) dairies (restricted), (b) feedlots, (c) piggeries, (d) poultry farms, but does not include extensive agriculture, aquaculture or the operation of facilities for drought or similar emergency relief. The Department of Primary industries (DPI) has a comprehensive guide for rabbit farming. This document 'Rabbit farming: link planning and development control guidelines' can be found at: http://www.dpi.nsw.qov.au/agriculture/livestock/rabbits/rabbit-farminq-planning When assessing a Development Application for rabbit farming, Council would use these guidelines to determine whether the scale of breeding is considered "intensive livestock agriculture.""
There is no issue that the Pate's land was zoned RU2.
The proper inference to be drawn from the advice given by Council's compliance officer and that part of Mrs Pate's evidence referred to by the assessor in his reasons, is that no Council consent for the rabbitry had been sought. The evidence given by Mrs Pate, referred to by the assessor at [88], was that her understanding was that 'no such approval was needed for a rural property". That understanding was plainly not consistent with the compliance officer's December 2014 advice, given the zoning of the property.
The evidence received at the hearing did not establish that Council approval for the rabbitry was not required.
The compliance officer's advice was that the scale of farming on which Mrs Pate's damages claim rested, was likely to require consent, given the zoning of the property. The guidelines to which the compliance officer referred in the December letter were not, however, in evidence.
That it was necessary for NRMA to tender those guidelines, given the compliance officer's advice and Mrs Pate's own evidence, is not apparent. The advice was that the guidelines would have been used by Council to assess whether what was proposed amounted to "intensive livestock agriculture" as defined. That definition referred to farming pursued for commercial purposes and feeding wholly or substantially on externally-sourced feed. The details of the evidence given by Mrs Pate about the rabbitry operation were not addressed by the assessor, but it cannot be overlooked that her entire claim was advanced on the basis that the rabbitry was being pursued for commercial purposes, not as a hobby.
That was challenged by NRMA, but if accepted, it followed from the case which it had advanced, that the need for Council consent was necessary for the assessor to consider, given that s 126 imposed an onus on Mrs Pate to satisfy the assessor that the assumptions about her future earning capacity, or other events on which the award was to be based, accorded with her "most likely future circumstances but for the injury".
The basis of Mrs Pate's understanding that Council approval was not required for the proposed significantly increased commercial rabbitry operation was not referred to in the assessor's decision, understandably, given that he did not appreciate that there was an issue between the parties about this and its consequences for what the Pate's intended at the time of the accident.
Mr and Mrs Pate had just begun selling rabbits at the time of her accident. The operation was then adversely affected by the outbreak of disease. Work then had to be undertaken to restock. Other work was necessary to be undertaken, if the scale of the business was to be increased. Seemingly the operation ceased before that work was undertaken, on Mrs Pate's case because Mr Pate could not manage the rabbitry on his own.
Whether Council consent would have been sought by Mr and Mrs Pate and obtained from Council, if they pursued the rabbitry for the commercial purposes on which Mrs Pate's claims rested, could not be known. Such approval was never sought. NRMA relied on its absence to challenge Mr and Mrs Pate's evidence as to what they intended to do with the rabbitry.
The assessor was, accordingly, required to consider this aspect of NRMA's case, in arriving at a conclusion as to the assumptions on which Mrs Pate's damages in respect of the rabbitry was calculated. The assessor also had an obligation to explain the reasoning process which led him to a conclusion about those assumptions. Because of the assessor's error as to NRMA's case, those obligations were not met.

Inadequacy of reasons

The assessor concluded that past loss for the rabbitry was not capable of precise calculation, but that increasing the rabbitry operation by a further 200 does would have required an additional 30 hours work per week. He concluded that this would have required Mrs Pate to have reduced her employment as a property manager to three days per week. Seemingly, despite this conclusion, the award for her past employment loss was calculated on the assumption that she would have performed her property manager work for a five day week.
The reasoning process which led to this result was not revealed by the assessor.
The result was that in addition to the damages of some $60,073.46 for the loss which flowed in respect of her employment, a further allowance for the rabbitry of $60,000 was made, the assessor said, he "having considered all of the issues". That conclusion is difficult to understand, notwithstanding what the parties said in their note.
The assessor's conclusion appears to have paid no attention to the time at which the reduction in Mrs Pate's working hours as a property manager would have occurred, had she not been injured and the rabbitry operation increased as he accepted had been planned. It was undoubtedly a relevant consideration, particularly given the evidence referred to at [55], that soon after the accident steps had to be taken to restock the rabbitry, after the majority of the rabbits had been killed during an outbreak of disease.
How the assessor complied with the requirement in guideline 18.4.3, to expose the reasoning processes that lead him to the conclusions reached as to the calculation of past damages, is difficult to see. A bare statement that all of the issues had been considered, is incapable of satisfying that obligation, especially given the assessor's error as to one of the matters which NRMA had put in issue.

Failure to take into account a relevant consideration

As I have explained, the evidence established that because of the assessor's error as to NRMA's case, no consideration was given to the question of the need to obtain Council approval to conduct the commercial rabbit farming proposed. NRMA's case was that this shed light on the Pate's claimed intention to conduct the rabbitry as a commercial venture, rather than as a hobby, as well as on the viability of the rabbitry and what income it might generate, if the operation was increased as was claimed to have been planned.
Contrary to the assessor's understanding of the parties' cases, the question of the need for Council consent was in issue. That was a relevant consideration, raised both on the evidence and NRMA's written submissions, both as to Mrs Pate's case that the rabbitry would have been pursued for the commercial purposes but for her accident, and if that was accepted, in calculating Mrs Pate's damages.
In the result, it is not open to conclude that the assessor's failure to consider the case NRMA had advanced and the conclusions which the assessor may have reached, had this aspect of NRMA's case been considered, had no impact on the assumptions on which Mrs Pate's damages were assessed. Nor can it be safely concluded that this error resulted in no practical injustice for NRMA, in the assessment of Mrs Pate's damages for past economic loss.
This is not a case like that considered in Frost v Kourouche [2014] NSWCA 39, where it was concluded that there had been no practical injustice in not giving an applicant a warning, or allowing an adjournment, in order to consult her solicitor and address a review panel further. That was because on the parties' respective cases, the possibility that her evidence would be disbelieved was apparent, given what lay in issue between them.
Here, too, the case which NRMA advanced was apparent, but it was misunderstood. That had the result that a matter relevant to a determination of Mrs Pate's damages claims was not considered, as it had to be under this statutory scheme.
It follows that the discretion not to interfere in the assessor's decision, notwithstanding the error established, does not arise to be exercised in this case.

Future economic loss

The same conclusion must be reached in relation to the claim for future economic loss.
Mrs Pate's claim for future economic loss was calculated on the basis that she would have worked as a property manager for only three days a week, when the increased rabbitry operation was pursued. Despite not considering the question of Council consent, the assessor concluded that the rabbitry was a farming enterprise at substantial risk, with the result that only a "modest amount" as a cushion or global assessment should be awarded for the rabbitry. Even though the claim finally pressed was for only $400,000, what was awarded was $200,000, by way of a buffer. That conclusion was arrived at without regard to NRMA's case in relation to Council approval.
Under s 126 the onus fell on Mrs Pate to establish the assumptions on which the damages she was awarded for future economic loss rested. Those assumptions were put in issue in ways that the assessor did not resolve, as he was obliged to do, in assessing Mrs Pate's future economic losses.
It also follows that it cannot be safely concluded that the result of the assessor's error was no practical injustice for NRMA, in relation to the calculation of Mrs Pate's damages for future economic loss.

Taking into account an irrelevant consideration

NRMA's case was that given the nature of the injuries Mrs Pate had suffered, she was entitled only to a relatively modest damages award. Contrary to its case, the past damages Mrs Pate was awarded were calculated by reference to the difference between what she had earned in her past employment working five days a week as a property manager and what she had earned since the accident, working three days a week performing modified duties, together with the allowance of $60,000 for what she would have earned from the rabbitry.
The assessor also concluded that Mrs Pate would not return to her pre injury work in the foreseeable future. The calculation of her future damages rested on the assessor's conclusion that she would have reduced her work as a property manager to three days a week, to work in the increased rabbitry operation. Her employment had, however come to an end and the assessor concluded that Mrs Pate would be at a disadvantage in obtaining similar sedentary employment in the open labour market. The figure arrived at for employment damages was $185,200 plus $20,372 for superannuation. There was also a $200,000 buffer for the rabbitry.
Under the heading "What is the nature and extent of the claimant's injuries?", the assessor outlined what had occurred in the accident and its consequences for Mrs Pate, including on her ability to work as a property manager and in the rabbitry, which on her case closed some 14 months after the accident, because she could not carry out her share of the duties she was required to perform in the business.
The assessor outlined what had happened to Mrs Pate in the 2010 accident, when she was trapped in her vehicle after being t-boned at an intersection and pushed some 30 metres before colliding with a give way sign and being trapped in her car, after being hit by the airbag. She returned to work after several days, before seeking further medical advice for severe pain some weeks later. In July 2010, her working hours were reduced and she sought further treatment, which the assessor described. In October 2011 she had a month off work and in July 2012 and February 2013 her working hours were again reduced. He then turned to the assessment of her injuries, observing: "18. The Claimant was assessed for her physical injuries by her treating Neurologist Dr Boyce as having a 5% whole person impairment to the neck region, as did Dr Champion qualified on behalf of the Claimant. MAS Assessor Truskett agreed with this assessment. 19. In addition to her physical injuries the Claimant was suffering from psychiatric injuries and was assessed by a number of Psychiatrists. The Claimant qualified Dr Stephen Huntsman who diagnosed depression and post-traumatic stress disorder. MAS Assessor Dr Enrico Parmegiani also assessed the Claimant as having an 8% WPI but otherwise agreeing with the diagnosis."
At [20] - [28], the assessor discussed Mrs Pate's evidence as to the consequences of her injuries. The assessor then noted the insurer's concession that she had suffered an injury to her neck (at [29]). He then discussed the various medical reports in evidence as to Mrs Pate's conditions, before turning to the medical assessor's findings. The assessor concluded at [35]: "35. Having read all of the medical reports in my assessment the opinion of Dr Jones and his optimism is expressed more as a wish than an opinion. The pain expressed by the Claimant with respect to her neck together with the chronic headaches must be very debilitating. No one would undergo the numerous neurotomies that the Claimant has undergone at the Pain Clinic, unless her pain is real. The secondary effect of formication, loss of appetite, inability to sleep, loss of weight, gastrointestinal insults and constipation are to her very real and so far without apparent remedy. Despite the opinions of Assessor Truskett made I note two years ago, the Claimant has attempted both before, then and since to vary her treatment and medications to rid herself of these chronic ailments. A finding of 5% WPI in any event is significant with respect to her physical injuries. A finding of 8% WPI for her psychiatric injuries falls into the same category, individually and combined they would have an impact upon her loss of earning capacity, need for treatment and care."
This, NRMA submitted, revealed an error which had infected the entirety of the assessor's approach to the questions which he had to determine, because he had taken an irrelevant consideration into account.
For Mrs Pate it was submitted that this aspect of the assessor's reasons, read fairly in context, was but a reference to "the nature and character" of the injuries and disabilities which she had suffered and had not involved an error of the kind discussed in Brown v Lewis.
In Brown v Lewis, it was observed at [22] - [24]: "22 It is conceivable that matters certified in accordance with s61(2)(b) (whether any treatment already provided to the injured person was reasonable and necessary in the circumstances) or (c) (whether an injury has stabilised) may afford (conclusive) evidence relevant to a particular aspect of damages assessment, including the assessment of economic loss. The terms of any certificate "as to any other matter" (cf s61(3)) or the medical assessor's reasons for his or her finding (cf s61)(9)) may also assist (non-conclusively) in resolving some issue referable to economic loss. But the court must never lose sight of the principle that "damages for both past and future [economic] loss are allowed to an injured plaintiff 'because the diminution of his earning capacity is or may be productive of financial loss'. … It is necessary to identify both what capacity has been lost and what economic consequences will probably flow from that loss. Only then will it be possible to assess what sum will put the plaintiff in the same position as he or she would have been in if injury had not been sustained" (Husher v Husher (1999) 197 CLR 138 at 143[7], per Gleeson CJ, Gummow, Kirby and Hayne JJ, citations omitted). Sections 124-130 of the MACA provide additional restrictions upon the award of damages for economic loss in respect of a motor accident. 23 Extreme caution is required before anything relevant or useful could be extrapolated from a certificate under s61(2) for the purpose of calculating economic loss. Section 61(2)(a) only deals with the threshold issue whether the degree of permanent impairment is greater than 10%. Section 133 points to information (MAA Medical Guidelines and the American Medical Association's Guides to the Evaluation of Permanent Impairment, Fourth Edition) that does not concern itself with the economic consequences of injury, and excludes information (derivative psychiatric or psychological injury, impairment or symptoms: see s133(2)) that may be critically important to assessing economic loss. In short, the statutory concept of (permanent) "impairment" is not to be equated to the notion of incapacity (permanent or temporary) that may be a stepping-stone in a case involving a claim of damages for economic loss. It is Part 5.2 of the Act (ss124-130) that contains the legislative qualifications upon the common law principles governing assessment of damages for economic loss. Those provisions do not engage the statutory concept of "permanent impairment". 24 It is conceivable that matters certified or reported in the reasons of the medical assessor may have a bearing on factual issues touching damages for economic loss. But everything would depend on the nature of the particular injury. Some injuries that would not produce a greater than 10 per cent degree of permanent impairment would have catastrophic economic impact on some plaintiffs (eg the violinist who lost the tip of a finger). Conversely, some injuries that produced a greater than 10 per cent degree of permanent impairment would have minimal economic impact on most plaintiffs."
These observations were discussed in Pham v Shui [2006] NSWCA 373 , it being observed that the reference to what could be extrapolated from a certificate under s 61(2) for the purpose of calculating economic loss was a reference to: "91 … the degree to which such a certificate can constitute evidence which is not conclusive bearing upon economic loss. I do not take that reference to mean that the certificate has any extended conclusively beyond the matters specifically referred to in s61(2). 92 Moreover, as Mason P points out in the same paragraph, the way in which s133 requires the calculation of "greater than 10%" to be made, based on MAA Medical Guidelines and the American Medical Association's "Guides to the Evaluation of Permanent Impairment", means that it "does not concern itself with the economic consequences of injury, and excludes information (derivative psychiatric or psychological injury, impairment or symptoms; see s133(2)) that may be critically important to assessing economic loss". 93 That very methodology of s133 therefore points to the inappositeness of extrapolating from the matters certified under s61(2) for purposes not related to the s131 non-economic loss threshold; in particular for purposes of determining economic loss to which Pt 5.2 rather Pt 5.3 applies. The structure of MACA reinforces that conclusion. The regime in Pt 5.2 is clearly a separate and distinct regime concerned with economic loss. It operates as a parallel universe to Pt 5.3 dealing with damages for non-economic loss. 94 What I have said earlier concerning s61(2) applies a fortiori to what s61(3) refers to as "any other matter". The latter is expressed to be "evidence" but "not conclusive evidence" as to the matters certified in any court proceedings. While it is true that s61(9) requires the certificate to set out the reasons for any finding by the medical assessor or assessors, this is only "as to any matter certified in the certificate in respect of which the certificate is conclusive evidence"."
What was here in issue before the assessor was the nature and extent of the impact which Mrs Pate's injuries had on her earning capacity. The fact that her physical injuries had been assessed under the Motor Accidents Compensation Act at 5% whole person impairment and her psychiatric injures at 8%, could not, of itself, provide a foundation for the assessor's conclusion that "such a level of injuries would result in a loss of earning capacity".
As discussed in Brown v Lewis such a finding could only rest on the evidence as to the actual impact of the particular injuries which Mrs Pate had suffered. It could not rest on the assessment of the whole person impairments which had resulted from those injuries, under this legislative scheme. It follows that the assessor erred in taking the view that those percentages could provide a basis for the conclusion that she had suffered a loss of earning capacity.
It was contended, nevertheless, for Mrs Pate, that the assessor's reference to those percentages did not have an impact on the assessor's assessment of damages, of the kind about which NRMA complained. It was also submitted that: "The references to 5 per cent and 8 per cent do not have the factual work in the reasons NRMA say. It is merely a reference to those assessments which were on any view part of the evidence and it records simply a finding that a 5 per cent whole person impairment is significant with respect to physical injuries which is correct. And it says the same for psychiatric injuries. Then all that is being said is that those physical injuries and psychiatric injuries, individually or combined, would impact on loss of earning capacity, need for treatment or care."
Further, it was argued, it was not illegitimate for the assessor to have referred to these assessments as he did, given the case which NRMA had advanced in its submissions. In its written submissions, there is certainly reference made to one of the objective matters NRMA relied on, being that the statutory assessment was below the threshold, which had resulted in Mrs Pate having no entitlement to non-economic loss.
It was also submitted that when what the assessor discussed at [8]-[35] was read together, it would be accepted that there had been a permissible reference to the assessment under the Motor Accident Compensation Act, Brown v Lewis not having barred any reference at all being made to such percentages, as part "of the overall medical dialogue".
What was identified at [22] of Brown v Lewis to be necessary for an assessor to focus on, was both what capacity Mrs Pate had lost and what economic consequences had flowed from that loss.
It seems to me that on a fair reading of the assessor's reasons, while there are problems which I have discussed, it must be accepted that the assessor did also consider the economic impact of the physical and psychiatric injuries which Mrs Pate had actually suffered. He arrived at particular conclusions by reference to her altered duties, reduced hours of work and inability to perform her former work in connection with the rabbitry. He also came to the conclusion that she was unlikely to improve in the foreseeable future, with the result that in future she would only be able to work three days a week. He also concluded that given her ongoing impairments, she was unlikely to find other employment in the marketplace.
In the assessor's conclusions reference was also made to the significance of Mrs Pate's by then chronic ailments, which he considered were reflected in the WPI findings which he considered individually and combined, "would have an impact upon her loss of earning capacity, need for treatment and care". That was, it must be accepted, an irrelevant consideration. Nevertheless I consider that despite this error and the difficulty with aspects of the assessor's explanation of the conclusions which he reached, earlier discussed, that necessary consideration was given to the nature of her particular injuries and what economic impact they had had on Mrs Pate in the past and were likely to have on her in the future.
The assessor's reasons, when fairly read in the way discussed in Minister for Immigration & Ethnic Affairs v Wu Shan Liang, thus do not leave open the conclusion that in arriving at the damages awarded, the assessor failed to determine what injuries Mrs Pate had suffered and what economic consequences had flowed from that loss. The assessor's decision must, nevertheless, be quashed because in arriving at his conclusions, he misunderstood NRMA's case and failed to determine what it had put in issue, as I have explained.

Orders

In the result the summons cannot be dismissed, as was urged for Mrs Pate.
Given the nature of the assessor's errors, NRMA is entitled to have the assessor's decision set aside. The usual order as to costs is that they follow the event. In this case that is an order for costs as agreed or assessed, in NRMA's favour. Unless the parties approach within 14 days, that will be the Court's order as to costs.
For the reasons given, I otherwise order that: 1. The assessor's decision be set aside. 2. Mrs Pate's application for damages under the Motor Accidents Compensation Act be assessed according to law. 3. Unless the parties approach within 14 days, the Court's order as to costs is that the first defendant must bear the plaintiff's costs, as agreed or assessed. 4. All exhibits and subpoenaed material may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

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: 18 March 2016

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