Insurance Australia Ltd v Motor Accidents Authority of New South Wales

Exemption of claims from assessment under the Motor Accidents Compensation Act 8Part 4.4 of the Act makes provisions for the assessment and resolution of claims. Within that Part there is s 92 which provides: 92 Claims exempt from assessment (1) A claim is exempt from assessment under this Part if: (a) the claim is of a kind that is exempt under MAA Claims Assessment Guidelines or the regulations, or (b) a claims assessor has made a preliminary assessment of the claim and has determined (with the approval of the Principal Claims Assessor) that it is not suitable for assessment under this Part. (2) If a claim is exempt from assessment under this Part, the Principal Claims Assessor must, as soon as practicable, issue the insurer and claimant with a certificate to that effect (enabling court proceedings to be commenced in respect of the claim concerned). 9It is s 92(1)(b) that is relevant in the present case. 10Claims Assessment Guidelines ("the Guidelines") have been issued pursuant to s 69(1) of the Act for the assessment of claims under Part 4.4. They operate by force of law as if they were delegated legislation: Paice v Hill [2009] NSWCA 156; (2009) 75 NSWLR 468 per Ipp JA at [59]. They make the following provisions concerning the consideration of exemption: 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. 14.12 An Assessor may make a preliminary determination that a claim is not suitable for assessment on their own initiative or upon application by the claimant, the insurer, or both, at any time during the course of an assessment, after providing the parties with the opportunity to make submissions on that issue and considering any such submissions. 14.13 If the Assessor determines that the claim is not suitable for assessment, the matter must be returned within 5 days of making such a determination to the PCA [i.e. the Principal Claims Assessor] for approval with a brief statement of reasons. 14.14 If the PCA approves the preliminary determination under section 92(1)(b), the PCA shall issue a certificate of exemption and notification to the parties within 5 days of the return of the matter from the Assessor. 14.15 If the PCA does not approve the preliminary determination, an officer of CARS is to advise the parties within 5 days of the return of the matter from the Assessor, and forward the matter to a different Assessor for assessment within 10 days of the return of the matter from the original Assessor. 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: 14.16.1 whether the claim is exempt under section 92(1)(a) because the claim involves one or more of the circumstances set out in clause 8.11; 14.16.2 the heads of damage claimed by the claimant and the extent of any agreement by the insurer as to the entitlement to those heads of damage; 14.16.3 whether the claim involves complex legal issues; 14.16.4 whether the claim involves complex factual issues; 14.16.5 whether the claim involves complex issues of quantum or complex issues in the assessment of the amount of the claim including but not limited to major or catastrophic, spinal or brain injury claims; 14.16.6 whether the claimant has been medically assessed and is entitled to non-economic loss pursuant to section 131 and the claim involves other issues of complexity; 14.16.7 whether the claim involves 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. 11It is clear that a decision of a claims assessor (and the approval of the Principal Claims Assessor) that a claim is not suitable for assessment involves the exercise of evaluative judgment. But it is necessary for that judgment to be made following a consideration of the matters in cl 14.16 of the Guidelines.

The first application for exemption 12NRMA's first application for exemption was made in May 2010. It specified selected items from the various matters in cl 14.16 and made submissions about them. The essence of the argument was: 14.16.2: there was a dispute about the amount claimed under each head of damage, and the total amount of the claim was in excess of $1.05 million. 14.16.4: complex factual issues arose from the fact of the claimant's pre and post-accident medical circumstances and other incidents leading to injury. 14.16.5: there were complex issues as to the amount of the claim in that the insurer should have the opportunity to investigate the claimant's medical condition and its effects. 14.16.7: complex issues of causation arose because of the history of pre and post-accident incidents. 14.16.10: the insurer may wish to proceed against one or more non-CTP parties in relation to post-accident incidents. 13Submissions were made to the effect that court proceedings would facilitate a better investigation and resolution of most of these matters than would be possible in assessment proceedings under the Act. 14NRMA filed further submissions in support of its application: a case then pending in the High Court of Australia was thought to have potential relevance to a possible exemption of the claim under s 92(1)(a); and there was a further aspect supporting the submission of there being complex legal issues involved in the claim (cl 14.16.3). 15Ms McCosker's lawyers filed submissions with the claims assessor in which exemption was opposed. 16On 16 June 2010, the claims assessor rejected the application by NRMA. Written reasons were provided in an email. The bases for NRMA's application were summarised. There was a statement to the effect that all of the submissions had been considered. Some of the grounds were more specifically addressed. Ultimately the claims assessor indicated a preference for the submissions made on Ms McCosker's behalf. The reasons of the claims assessor concluded: For all of these reasons, I am NOT satisfied that the claim is NOT suitable for assessment.

The second application for exemption 17NRMA made its second application for exemption on 26 September 2012. Specific reference was made to the matters in cl 14.16 in similar terms to the first application. Further submissions were made about the question of complex legal issues (cl 14.16.3). And an additional matter was raised; an assertion that Ms McCosker had been responsible for having made false and misleading statements about her medical history (cl 14.16.11). 18Reference was made to statements of Ms McCosker to various doctors to the effect that she had no back or neck problems prior to the motor accident. But it was contended that the true position was that she had "frequent episodes of low back pain and neck pain over many years". To support this contention, the submission stated: The records produced by the chiropractor, Mr Schwager, show there were many visits to him over a period of nearly 15 years, at which visits Mr Schwager recorded low back pain and neck pain. 19It was submitted that Ms McCosker's credit "is very important as she bears the onus of proof" and that "the circumstances of this case dictate that the matter be removed from the CARS process to a court where her evidence is sworn and which is subject to cross-examination". 20Further submissions were also made about the general contention that the matter was not suitable for assessment under Part 4.4. Reference was made to the age of the matter and it was submitted, in effect, that the factual and legal matrices were becoming more and more convoluted. 21Ms McCosker's lawyers made submissions in which there was a detailed refutation of the contention that she had made false and misleading statements about her pre-accident medical condition. Concern was also expressed about NRMA making another application for exemption; it was described as an abuse of process and it was noted that costs were being incurred by Ms McCosker against a background of recoverable costs being capped by the regulations. 22NRMA made detailed submissions in reply. On 20 February 2013, the claims assessor again rejected the application for exemption and provided written reasons in an email. The various bases of NRMA's application were referred to; both those that had been raised in the first application and those that were added in the second. Reference was also made to the submissions made on Ms McCosker's behalf. The reasons concluded: The Insurer's Further Exemption Application is not based upon any fresh evidence other than a report dated 8 July 2011 by Dr Mark Davies and a Centrelink Medical Certificate by Dr Gorringe dated 14 April 2012 to which brief mention is made in the Insurer's further submissions. Generally, whilst there is no limit on the number of Exemption Applications that can be made, I think that any fresh application mainly should be based upon fresh evidence. Otherwise the Assessor essentially is being asked to reconsider a previous decision. It seems to me to be contrary to good policy to allow further discretionary Exemption Applications which are not based upon fresh evidence. That being said, I have considered the parties' further detailed submissions carefully and at length. I particularly have considered the parties' submissions in relation to the fresh grounds raised by the Insurer for the first time. Without dealing with each of those grounds individually, I think it is sufficient for me to say that I accept and prefer the Claimant's submissions, in each instance. For these reasons, I am NOT satisfied that the claim is NOT suitable for assessment.

The third application for exemption 23Undeterred, NRMA made a third application by way of letter dated 25 March 2013. In its entirety, the letter stated: We enclose the report of Mr Schwager dated 15 March 2013. It is clear from the report of Mr Schwager that the claimant has made false and misleading statements. The insurer renews its application for exemption, and asks that it be reconsidered taking into account the prior submissions made, the material which is before you already, and also the enclosed new evidence. We have now received instructions that should the matter not be exempted, we are to apply to the Supreme Court for judicial review. 24The final paragraph indicates that NRMA was intent on bringing the present proceedings without first considering the prospects of a successful challenge to the reasons of the claims assessor. This is an astounding proposition to be advanced by lawyers on behalf of one of the largest CTP insurers in this state. 25The NRMA lawyers sent a further letter to the claims assessor on 9 April 2013. It referred to a timetable set by the assessor at the last preliminary conference and drew his attention to a number of matters, generally complaining about compliance by Ms McCosker's lawyers with the provision of certain medical records and reports. The letter concluded: We would ask that the above be taken into account when considering whether this matter is suitable for assessment. 26The solicitors for Ms McCosker responded by complaining about the making of yet another application for exemption and noting that it was simply a repetition of a claim made by NRMA in the second application. It asserted that NRMA had been in possession of the clinical notes of Mr Schwager for "a lengthy period of time". Despite this, the solicitors also made detailed submissions refuting the claim that Ms McCosker had made false and misleading statements about her pre-accident medical history. 27Given that it is the rejection of this third application for exemption, it is appropriate to set out the reasons of the claims assessor in full. They were set out in an email to the parties' solicitors as follows: The insurer wrote to me on 25 March last renewing its application for discretionary exemption of this claim from assessment. That application was made pursuant to section 92(1)(b) of the Act and clause 14.16.11 of the Claims Assessment Guidelines. It is the third such application made by the insurer in this matter. The insurer bases its application upon fresh evidence in the form of an unsigned letter from the Claimant's former chiropractor. The insurer says that "it is clear from the report ... that the claimant has made a false and misleading statement". The insurer also asks me to reconsider the prior exemption applications, the evidence and submissions made in support of those prior applications, as well as the fresh evidence now before me. The Insurer's solicitor wrote to me on 9 April last asking that I take into account various evidentiary and procedural matters addressed in that letter. The insurer does not say why any of those subsidiary matters would make the claim unsuitable for assessment. The claimant opposes the application. I received the Claimant's submissions on 17 April 2013. The Claimant's submissions address in detail the Statements which are alleged by the Insurer to be false or misleading. Further evidence is provided in support of the proposition that the claimant has been open and candid about her chiropractic treatment prior to the motor accident. Those are matters that can be tested by the Insurer at the Assessment Conference. However, that is not a matter presently in issue. The only question for me to consider is whether or not I should recommend to the PCA that this matter be exempted. In making that determination, I have to consider whether or not I am satisfied that this matter is not suitable for assessment. Having considered the fresh evidence and the parties' submissions, there is nothing that causes me to think that this matter is not suitable for assessment. Specifically, there is nothing in the chiropractor's letter that clearly establishes the proposition for which the Insurer contends. I have not reconsidered the submissions and evidence relied upon by the Insurer in support of its previous exemption applications. I repeat the comments I made on 20 February last when refusing the Insurer's second exemption application. The matter is scheduled for an Assessment Conference on 22 April 2013. This matter was allocated for assessment almost four years ago. There have been twelve Preliminary Conferences. I will assess this claim next Monday, unless restrained by Judicial intervention, or the parties otherwise agree.

Submissions for NRMA 28A lengthy written outline of argument was provided by counsel for NRMA (contrary to the stipulation as to length in r 59.8 of the Uniform Civil Procedure Rules 2005 (NSW); but I note that counsel for Ms McCosker transgressed as well). 29The submissions supporting the grant of relief are encapsulated in the following: 34. The Assessor failed to comply with the statutory requirements contained in the Guidelines in that he: a. failed to consider the submissions made by the Plaintiff; and b. failed to have regard to each of the matters set out in paragraph 14.16 of the Guidelines. 35. In doing so, the Assessor failed to have regard to relevant considerations. 36. Further, the Assessor: a. Identified the wrong issue; and b. Asked himself the wrong question. 37. Further, or in the alternative, the Decision was manifestly unreasonable. The Decision was not reasonable in that: a. No reasonable decision-maker could ever have come to it, or, to put it another way, it was not directed towards and related intelligibly to the purposes of the power; b. The Assessor failed to take into account the central importance and significance of court procedures to the just resolution of the Claim, the very matters with which the mandatory considerations are self-evidently concerned, and which, together with the underlying purpose of the provisions, clearly inform the nature of the mandatory considerations.

Consideration 30The assertion that the claims assessor did not have regard to the submissions of the plaintiff before arriving at his decision must be rejected. The submission made in support of the application was that Ms McCosker had made false and misleading statements. The assessor specifically had regard to that. 31NRMA also invited the assessor to take into account the prior submissions. I am not prepared to accept that the assessor determined this application in a vacuum, ignoring the previous applications and the issues posed and submissions made in relation to them. The assessor simply felt it unnecessary to give those submissions any reconsideration. Such an approach was well open for the assessor to adopt. 32The correctness of the assessor's determination of the first and second applications was called into question. It was submitted for this reason it was not open for him to take the view that reconsideration of those applications was unnecessary (T15). I do not believe that the correctness of the previous determinations is open to be considered in these proceedings. But, in any event, the manner in which those determinations were erroneous was never explained beyond a claim that the assessor had "not dealt with the matters that he was required to deal with under the statute" (T3; similarly at T18). If the contention was that the assessor failed to have regard to the submissions made on behalf of NRMA when determining those applications, it must be rejected because it is contrary to the express statement of the assessor on both occasions that the submissions had been considered. 33The assertion that the assessor failed to have regard to each of the matters set out in cl 14.16 must also be rejected. The submission for NRMA in this Court is not to be taken literally. It was conceded that there was no requirement for the assessor to have regard to matters that were self-evidently irrelevant (for example, 14.16.9 - whether some relevant person lived outside the State). The assessor had already had regard to those matters that were suggested to be relevant and to the submissions made in support of the claim for exemption. There was no requirement for the assessor to do what he had already done. The only requirement was for him to consider whether the asserted "fresh evidence" was such as to warrant a reconsideration of a conclusion he had twice before reached, whether the claim was not suitable for assessment under the Act. He decided that it was not. No more was required. 34The false and misleading statements issue went to the accuracy of the medical assessment of Ms McCosker's condition insofar as it was a result of the motor accident. One thing that cannot escape observation is that the Act provides a remedy if a party has a concern about a medical assessment. If additional relevant information becomes available about an injury, a further medical assessment can be carried out: s 62. Here, NRMA would have it that there is such additional relevant information, being that the history provided by Ms McCosker was incorrect or incomplete so that the extent of injury and the level of impairment as a result of the motor accident have been overestimated. However, there is a constraint upon referral for further medical assessment - the additional information must be such as to be capable of having a material effect on the outcome of the previous assessment. NRMA has not sought a further medical assessment. 35Another observation that should be made is that the report of the chiropractor, Mr Schwager, which accompanied the third application, added very little to what NRMA had invited the claims assessor to consider in the second application. The second application included that "the records produced by the chiropractor, Mr Schwager, show there were many visits to him over a period of nearly 15 years, at which visits Mr Schwager recorded low back pain and neck pain". The report of 15 March 2013 recounted in summary form Mr Schwager's treatment of Ms McCosker since she first consulted him in 1988. It included reference to her complaining, amongst other things, of pain to the neck and/or lower back on some occasions. 36The submissions for NRMA, both written and oral, were to the effect that even if no submissions were made about particular matters, an assessor was required nonetheless to consider and discuss in his or her reasons each and every guideline and issue pertaining to a claim. It was submitted that the assessor "has to consider the totality of the evidence and apply the guidelines" (T19). It was submitted that the letter from the chiropractor that accompanied the third application was "a vital piece of information ... [that] goes to the very core of the case". But it was not submitted to the assessor that the effect of the report was that dramatic. 37I do not accept NRMA's contention that there is no responsibility on a party who is seeking exemption to point out and explain with some particularity the basis for it. In this respect I adopt the reasons given by Hoeben J (as his Honour then was) in Zurich Australian Insurance Ltd v MAA [2006] NSWSC 845 at [57]-[63]. 38I accept the submission that a decision-maker exercising a statutory power that requires regard to particular facts and matters must not only take those facts and matters into account but must also give them weight as fundamental and focal elements in the decision-making process. Spigelman CJ referred to a line of authority supporting this proposition in Insurance Australia Ltd t/a NRMA Insurance v Motor Accidents Authority of New South Wales at [40]. But there is no authority to which I was referred for a proposition that a decision-maker must repeat this exercise every time the same question is posed. 39The "wrong issue" and "wrong question" submission relates to the assessor having said that "he expressly considered the issue of whether there was anything in the chiropractor's letter that clearly establishes the proposition for which the Insurer contended". It was submitted that the correct question for determination was whether the claim was not suitable for assessment. 40This submission must be rejected. It relies upon a single sentence taken out of context in reasons that are expressed somewhat informally in an email. The assessor was obviously aware that there was an issue between the parties on the false and misleading statements issue. He said that it was a matter that could be "tested by the Insurer at the Assessment Conference". But he also indicated awareness of the correct issue for determination by his statement: However, that is not a matter presently in issue. The only question for me to consider is whether or not I should recommend to the PCA that this matter be exempted. In making that determination, I have to consider whether or not I am satisfied that this matter is not suitable for assessment. 41This case is factually distinguishable from a case to which counsel for NRMA referred: Allianz Australia Insurance Ltd v Tarabay [2013] NSWSC 141. There the assessor purported to determine for herself an issue of alleged fraud on the part of a claimant. That is not what happened here. 42The submissions in support of the second, or alternative, error asserted (unreasonableness) bordered upon an invitation to this Court to engage in a review of the merits of the claim by NRMA for exemption. That, of course, is impermissible. The correct approach, as suggested in submissions which I accept, was set out in the judgment of Hayne, Kiefel and Bell JJ in Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 297 ALR 225 at [64]-[76]. 43The question for the assessor was a relatively straightforward one. Was the claim not suitable for assessment under the Act? The question had to be considered in the context of all matters relevant to the claim, particularly the issues between the parties and the appropriateness and efficacy of assessment as opposed to court determination. The exercise of the assessor's discretionary judgment was confined by the subject matter considered in conjunction with the scope and purpose of the Act. The assessor was specifically required by s 6(2) to exercise the discretion in a manner that best promoted the objects of the Act (set out in s 5) and the object of s 92. The discretion was also confined by the requirement to have regard to certain facts and matters as set out in the Guidelines. 44It is clear that there are aspects of the claim by Ms McCosker which complicate its resolution. These were set out at some length in the written outline of the argument for NRMA and developed further in oral submissions. I accept the force of the contention that court determination offers a number of advantages for resolution of these matters. But that does not mean that no reasonable assessor could decide that the matter was not suitable for assessment under the Act. Simply because a claim has some complexity does not mean that exemption follows: Insurance Australia Ltd t/a NRMA Insurance v Motor Accidents Authority of New South Wales at [39]. 45In my view the decision of the assessor was not attended by patent error. Nor was it one that could be characterised as lacking an evident and intelligible justification, or is manifestly unreasonable, plainly unjust or any of the other descriptions used in authorities concerned with unreasonableness in a judicial review context.

Orders 46I make the following orders:

1. The plaintiff's summons is dismissed.
2. The plaintiff is to pay the costs of the third defendant.

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: 27 September 2013