QBE Insurance (Australia) Limited v Lay

Guiding Principles

1. In these proceedings, the insurer contends that each of the errors identified in the grounds section of the summons constitute: 1. errors of law on the face of the record; and/or 2. jurisdictional errors; and/or 3. constructive failure to exercise statutory power.
2. All that is required for the insurer to establish its case and so to enliven the Court's power to issue remedies is for the Court to find an error of law on the face of the record (the "record" is the written reasons - see, section 69(3) & (4) of the Supreme Court Act 1970 (NSW)). Errors of law on the face of the record need not be errors going to jurisdiction. [1]
3. In Pham v NRMA Insurance Ltd [2] [3] it was held (per Leeming JA, with Tobias AJA agreeing) that under the Motor Accidents Compensation Act 1999 (NSW) ('MAC Act'), both a claims assessor's certificate and reasons form part of the record, by reason of the statute requiring reasons to be given. Here, the Member had an obligation to provide reasons, pursuant to section 7.13(4) of the Motor Accident Injuries Act 2017 (NSW) ('MAI Act'). The reasons therefore form part of the record.
4. As to the issue of jurisdictional error, the insurer has pleaded that the errors include a constructive failure to exercise jurisdiction. The Court of Appeal in Rodger v De Gelder [4] held: "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. The real question is whether there is an established relevant error of law on the face of the record or jurisdictional error that warrants quashing the decision, should that step be determined to be taken in the Court's discretion. That is the nature of judicial review proceedings as distinct from an appeal or review on questions of law, fact or discretion.

Extension of time

1. The insurer seeks an extension of time in lodging judicial review proceedings in respect of the medical assessor's decision. The reason for the delay is that the insurer was seeking a review of the decision within the Commission, thereby exhausting its remedies below. In Rodger v De Gelder [5] the Court of Appeal held that it may not be necessary to immediately challenge each administrative decision by way of judicial review and that it would be better for an applicant to first exhaust its existing remedies in the tribunal below before then troubling the Supreme Court in its supervisory jurisdiction.
2. It is appropriate that the insurer exhausted the existing remedies before approaching this Court. Therefore, I grant an extension of time to file this summons up to and including 13 September 2023.

Framework of the MAI Act, and "no fault" accidents

1. Section 1.4 of the MAI Act defines "motor accident" as follows: motor accident means an incident or accident involving the use or operation of a motor vehicle that causes the death of or injury to a person where the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during - (a) the driving of the vehicle, or (b) a collision, or action taken to avoid a collision, with the vehicle, or (c) the vehicle's running out of control, or (d) a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle's running out of control.
2. Section 1.4 also defines "claim" as "a claim for statutory benefits or a claim for damages." This definition removes the element of "fault" that was found in section 3 of the MAC Act.
3. Section 1.9 of the MAI Act limits the application of the Act to "… death of or injury to a person that results from the use or operation of a motor vehicle only if the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during…" the circumstances listed in that section. This is in contrast to section 3A of the MAC Act which incorporated a requirement of fault [6] . The removal of the requirement of "fault" in the general definitions and scope of the Act facilitate the introduction of a no-fault statutory benefits scheme found in Part 3 of the MAI Act.
4. However, the entitlement to claim damages under the MAI Act retains the need to establish fault in the causative use or operation of the vehicle by the owner or driver of the vehicle. Section 4.1 (in the Part of the Act dealing with claims for damages) provides: (1) This Part applies to and in respect of an award of damages that relates to the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle. (Emphasis added)
5. There is no further definition in the Act of what constitutes a "claim", other than the definition in section 1.4. However, when regard is had to the authority that has considered the limits of a claim for damages under NSW Compulsory Third Party ('CTP') legislation (discussed below), it is apparent that a claim for damages must mean a common law claim for damages.
6. This interpretation is supported by the Second Reading Speech of The Hon. Victor Dominello dated 9 March 2017. Throughout that speech, he refers to a claim for damages as a "common law claim for damages", emphasising that it is only those people who have a common law entitlement to claim damage that will have a claim for damages. With apparent reference to section 3.12 of the Act, the Minister said: "Income benefits will be paid for up to two years for injured people not mostly at fault. However, if an injured person has continuing needs beyond two years, and has made a common law claim, income benefits will be paid for up to three years."
7. As in the MAC Act, there is the statutory provision to bring a claim for damages in certain circumstances where the accident is a "blameless" or "no-fault" accident, within the scope of Part 5 of the MAI Act.
8. Section 5.1 of the MAI Act, which is relevantly the same as section 7A of the MAC Act, [7] provides: "no-fault motor accident" means a motor accident in the State not caused by the fault of the owner or driver of any motor vehicle involved in the accident in the use or operation of the vehicle and not caused by the fault of any other person.
9. Section 5.2 of the MAI Act, which is relevantly the same as section 7B of the MAC Act, deals with deeming of fault in the case of no-fault accidents, and provides: (1) The death of or injury to a person that results from a no-fault motor accident involving a motor vehicle that has motor accident insurance cover for the accident (within the meaning of section 1.10) is, for the purposes of and in connection with any claim for damages or statutory benefits in respect of the death or injury, deemed to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle. (2) If the no-fault motor accident involved more than one motor vehicle that has motor accident insurance cover for the accident (within the meaning of section 1.10), the death or injury is deemed to have been caused by the fault of the owner or driver of each of those motor vehicles in the use or operation of the vehicle.

Background

1. On 6 September 2019, the first defendant ('the owner and driver of a motor vehicle ('the driver')') was injured in a single vehicle motor accident on 6 September 2019 ('the accident'), when the claimant was driving his own motor vehicle along the Hume Highway, and a tree fell on his car. No other vehicle was involved.
2. The insurer is the CTP insurer of the driver's vehicle.
3. The insurer has had a number of prior decisions relating to the accident in the Personal Injury Commission prior to the decision the subject of this judicial review.
4. The insurer brought a claim for statutory benefits against the insurer, on the basis of the injuries sustained in the accident, pursuant to Part 3 of the MAI Act. Section 3.12 of the MAI Act relevantly reads: 3.12 Cessation of weekly payments to other injured persons after maximum weekly payments period (1) An injured person is not entitled to weekly payments of statutory benefits under this Division for any period of loss of earnings or earning capacity that occurs more than the maximum weekly payment period after the motor accident concerned. (2) The maximum weekly payment period is as follows - (a) 104 weeks, unless the person's injury is the subject of a pending claim for damages (whether or not the insurer has accepted liability)
5. On 9 August 2021, the insurer sent a letter to the plaintiff, indicating that his weekly payments would be terminated on 6 September 2021, being 104 weeks from the date of the accident, on the basis that he was precluded from making a damages claim given that his claim was a single vehicle no-fault accident claim for which there was no legally available common law claim for damages (CB-34).
6. On 17 January 2022, the driver sought internal review of the decision of 9 August 2021 (CB-36).
7. On 24 January 2022, the insurer issued a Certificate of Determination - Internal Review - with reasons, confirming its decision of 9 August 2021 (CB-39, CB-40).
8. On 21 February 2022, the driver lodged with the Commission an application for assessment of a dispute regarding a "merit review matter" under Schedule 2(1)(b) of the MAI Act (CB-44).
9. Schedule 2, clause (1)(b) provides that the relevant merit review matter is: "whether for the purposes of section 3.12 (Cessation of weekly payments to other injured persons after maximum weekly payments period) an injured person's injury is the subject of a pending claim for damages,"
10. The driver submitted that the relevant accident was a "no-fault accident" within the meaning of section 5.1 of the MAI Act (CB-51) and that the driver intended to make a claim for damages (CB-53).
11. On 14 March 2022, the insurer lodged a reply to the driver's application for assessment of the merit review matter (CB-59) submitting that a claim for common law damages could not be made and could not succeed because the driver could not bring a claim against himself or his own insurer (CB-62).
12. On 12 April 2022, Member Castagnet (the second defendant) issued a certificate pursuant to section 7.13 of the MAI Act, affirming the insurer's liability decision, on the basis that the driver had not in fact made an application for damages and therefore did not have a "pending claim for damages" (CB-63).
13. The driver purported to lodge an application for common law damages with the insurer on 31 May 2022, on the basis that he had a "no-fault" claim pursuant to Part 5 of the MAI Act (CB-70).
14. On 4 July 2022, the insurer issued a liability notice rejecting the claim for damages on the basis that the driver had no entitlement to recover damages due to an act or omission of the driver/claimant (CB-73).
15. On 29 September 2022, the insurer issued a further notice denying liability for the driver's claim for further weekly payments (CB-75).
16. On 3 November 2022, the driver sought internal review of the insurer's decision of 29 September 2022 (CB-78).
17. On 15 November 2022, the insurer issued a further notice to the driver to the effect that his claim for weekly payments was denied on the basis that weekly payments should, and did, cease at 104 weeks from the date of the accident, given that the driver has no cause of action for common law damages, in accordance with Whitfield v Melenewycz [2016] NSWCA 235 ('Melenewycz'). (CB-82).
18. On 1 December 2022, the insurer issued a Certificate of Determination - Internal Review - with reasons, in response to the driver's application of 3 November 2022, confirming the previous liability decisions (CB-87, CB-88).
19. On 28 December 2022, the driver lodged with the Commission a further application for assessment of a dispute regarding a merit review matter under Schedule 2(1)(b) of the MAI Act: whether for the purposes of section 3.12 (Cessation of weekly payments to other injured persons after maximum weekly payments period) an injured person's injury is the subject of a pending claim for damages ('the merit review matter') (CB-95).
20. In the driver's submissions that accompanied that application for assessment asserted that the driver did have a pending claim for damages because there was a lawful basis for lodging the application for damages. Those submissions argued, at page 6 (CB-106): "It is submitted on behalf of the [driver] that there is a lawful basis for lodging the Application for Damages under common law with the Insurer and, in doing so, the [driver's] injury became the subject of a pending claim for damages, entitling the [driver] to recover weekly payments of statutory benefits for any period of loss of earnings or earning capacity beyond 104 weeks (whether or not the insurer has accepted liability) pursuant to section 3.12 of the MAI Act."
21. Therefore, the driver's argument regarding his entitlement to make a claim rested on the assumption that there was a lawful basis for lodging the application for damages.
22. On 23 January 2023, the insurer lodged a reply to the driver's further application for assessment of the merit review matter, disputing that the driver had a lawful basis for making his claim (CB-108).

The first decision under judicial review

1. On 29 March 2023, a statutory decision was made purportedly pursuant to section 7.13 of the MAI Act, by merit reviewer Maurice Castagnet in his capacity as a Member of the Commission (the second defendant), setting aside the insurer's liability determination and certifying that the driver's injury is the subject of a pending claim for damages and that the insurer is not entitled to cease payment of weekly payments of statutory benefits under 104 weeks (the first decision under review - "the Member's decision") (CB-119).
2. The Member summarised the insurer's submissions at [24] to [32]: CLAIMANT'S SUBMISSIONS 24. The claimant says that there is a lawful basis for making a claim for damages under common law. In making the claim, the claimant's injury became the subject of a pending claim for damages, entitling the claimant to recover weekly payments of statutory benefits for any period of loss of earnings or earning capacity beyond 104 weeks (whether or not the insurer has accepted liability for common law damages) pursuant to s 3.12 of the MAI Act. THE INSURER'S SUBMISSIONS 25. The insurer accepts that the circumstances of the claim for damages have changed since my determination on 12 April 2022. 26. A claim for damages has since been made by the claimant which has been denied by the insurer. 27. However, the insurer contends that the claimant is not entitled to receive statutory benefits beyond 104 weeks pursuant to sub-s 3.12(2)(a) of the MAI Act, because his claim for damages cannot be sustained. As owner and driver in a single vehicle accident, the claimant cannot sue himself. A claim cannot, and should not, be construed as pending, merely because a claim is on foot when that claim has no prospect of success. 28. The insurer argues that whilst s 3.12 provides that weekly payments will cease if a pending claim for damages is withdrawn, settled or finally determined, any claim for damages must be founded on a legal cause of action or be legally valid. Since the claim for damages has no prospects of success, it would be inconsistent to accept that it is pending for the purpose of making weekly payments of statutory benefits. 29. The insurer submits that the interpretation of the MAI Act should have regard to a construction that is in keeping with the purpose and intention of the Act. Indeed, the enactment of the MAI Act was to assist in the efficient determination of compensation claims arising from motor accidents. 30. The insurer relies upon the observations of McHugh J at paragraph 43 in Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568: "Although the Act establishes a compulsory third party insurance scheme for motor vehicle injuries, the Act does not and was never intended to provide a universal, comprehensive scheme to award damages to every person who sustains an injury that was in some way connected to a motor vehicle." 31. The insurer submits that whilst the above case related to the construction of the Motor Accidents Compensation Act 1999 it retains relevance to the MAI Act. To construe that the claimant has a pending claim for damages merely because he has lodged a claim form in circumstances where that claim cannot succeed, is contrary to the object of the MAI Act. 32. The insurer seeks its internal review decision be upheld.
3. In the Member's decision, he stated (CB-128): 40. On 4 July 2022, the insurer denied liability for the claim. The insurer argues that the claimant's claim for damages cannot be sustained. As owner and driver in a single vehicle accident, the [driver] cannot sue himself. On that basis, a claim cannot, and should not, be construed as pending, merely because a claim is on foot when that claim has no prospect of success. 41. I do not accept that argument for the following reasons. 42. First, there is nothing in the terms of s 3.12 to suggest that a claim for damages is no longer pending if the insurer does not accept liability. This is made apparent by the words "whether or not the insurer has accepted liability". 43. Secondly, it cannot be said that a claim for damages is no longer pending on the mere assertion by the insurer that the claim is doomed to fail. Liability for the claim will be determined by others. As indicated by s 3.12(3) the maximum weekly payment period ends if the pending claim finally determined, or otherwise withdrawn or settled.
4. On 26 April 2023, the insurer applied to the Commission for the Member's decision to be referred to a review panel of merit reviewers, pursuant to section 7.15 of the MAI Act. The basis for review was that the claim for damages has no basis in common law and that any claim for damages must be founded on a legal cause of action (CB-130).
5. On 10 May 2023, the driver lodged a reply to the insurer's application for review of the Member's decision (CB-153).
6. Section 7.15 relevantly provides: (3) The President is to refer the application to a panel of at least 2 merit reviewers, but only if the President is satisfied that there is reasonable cause to suspect that the decision determining the review was incorrect in a material respect having regard to the particulars set out in the application.
7. On 13 June 2023, the President's Delegate dismissed the insurer's application for review of the Member's decision, purportedly pursuant to section 7.15 of the MAI Act (the second decision under review - "the President's Delegate's decision") (CB-169).
8. The insurer seeks relief from the whole of the Member's decision and the President's Delegate's decision.
9. The insurer observes that the only right being determined by the decisions under review is the right to receive extended statutory benefits. The "merit review matter" does not have any impact on any right to attempt to bring a claim for damages in Court (the insurer says the driver would be unable to do so by operation of law in any event).
10. The operation of the relevantly identical MAC Act "blameless accident" provisions was considered by the Court of Appeal in Melenewycz. The Court there said, at [30] - [31] (per Meagher JA, Simpson JA and Sackville AJA agreeing): 30. "The respondent driver claims damages for his injuries from the owner on the basis that they were caused by the owner's fault in the use or operation of the vehicle. In doing so he does not rely on the deeming of fault on his part as driver and the presumption of agency in s 112(1) as making the owner liable for his (deemed) fault as driver in the use or operation of the vehicle. Nor could he because the presumption in that subsection only operates where the injured person and driver are different persons. That is the effect of s 112(1)(a) which limits the application of the presumption to proceedings "against the owner of a motor vehicle, whether severally or jointly with the driver of the vehicle, for the recovery of damages for liability in respect of the death of or injury to a person caused by the fault of the driver of the vehicle in the use or operation of the vehicle". 31. Had the respondent owned the motorcycle he could not have had a claim for damages against himself as owner: cf Syed v Crumpton [2016] NSWSC 500 which decides otherwise. I respectfully disagree with the conclusion in that judgment. Section 7B deems fault for the purposes of a claim which depends on the [driver] establishing liability under the common law. It does not deem liability. Under the common law a driver cannot have a claim in negligence against him or herself: see in the context of an asserted subrogated claim, Simpson & Co v Thomson (1877) 3 App Cas 279." (Emphasis added)
11. This distinction is critical as it explains that the no-fault provisions do not operate to create a new tort. Rather, the provisions deem one element of negligence (fault) on the part of the owner or driver, so as to bring the claim within the existing elements of a claim in negligence against the owner or driver (ie, existence of a duty of care being owed, breach of duty of care (ie, "fault"), and causation of damage).
12. Therefore, in a no-fault accident claim, the driver still must prove the other elements of negligence, against that same owner or driver, in order to complete the elements of the tort, and must still have a claim that could be brought under the common law, once the element of fault is deemed. That means, being able to prove (relevantly) the existence of a duty of care being owed to the driver by the proposed defendant.
13. Melenewycz concerned a single-vehicle motorcycle accident where the driver of the motorcycle came to grief when a kangaroo jumped on the road in front of him. The issue was whether or not he was able to bring a claim under the blameless accident provisions of the MAC Act. The Court of Appeal held in that case at [35] - [40]: 35. Returning to the present case, the accident involved use or operation of the motorcycle by the driver, but not of the owner, and the driver's use or operation did not involve fault. Accordingly there was no fault of the owner or driver in the use or operation of the vehicle so that the first part of the definition of a "blameless" motor accident was satisfied. In different circumstances, that requirement might equally have been satisfied if there was use or operation of the owner, as well as the driver, provided that there was no fault on the part of either of them in that use or operation (and there was no fault of any other person). 36. The deeming worked by s 7B(1) is expressed to apply "for the purposes of and in connection with any claim for damages in respect of the death or injury". Such a "claim" (s 3) might be made against the owner or driver or both, depending on whether it can be established against one or the other or both of them, that there was fault in their use or operation of the vehicle and that fault caused the death or injury. 37. The deemed fault is in respect of death or injury that results from a "blameless" motor accident. A "motor accident" is one involving use or operation of a vehicle that causes death or injury. Although not expressly stated, that causative use or operation must be by the owner or driver (or both of them). A "blameless" motor accident is one in which there was causative use or operation by the owner or driver (or both) but no fault in that use or operation. It is in relation to such an accident that the deeming applies. 38. Section 7B(1) deems death or injury caused by the use or operation of the vehicle by the owner or driver "to have been caused by the fault of the owner or driver ... in the use or operation of the vehicle". The use or operation is, in each case, the causative use or operation of the owner or driver (or of both). So understood the deeming is of fault on the part of the owner or driver (or of both) whose use or operation caused the death or injury. 39. This construction of ss 7A and 7B gives effect to the purpose for the inclusion of the blameless accident provisions which, as described in the Second Reading Speech (see [27] above), was to deem fault on the part of the person or persons whose use or operation of the vehicle caused the death or injury. By the deeming of "fault" s 7B extends the application of the Act to a "blameless" motor accident, which is one caused by use or operation that does not involve fault. 40. As there was no causally related use or operation of the motorcycle by the first appellant owner, s 7B did not deem him to have been at fault. Ground 2 should be upheld and the appeal allowed. (Emphasis added)
14. Member Cassidy in ACV v The Nominal Defendant (No 2) [2022] NSWPIC 634 on 17 November 2022 applied Melenewycz at [58]: "As the Court said in Melenewycz, the blameless accident and no-fault provisions deem fault where there is no fault, but they do not deem liability. Liability for damages in a motor accident requires three elements to be proven only one of which is fault."
15. The MAI Act is structured differently to the MAC Act, in that there is a new entitlement to statutory benefits that did not exist in the former scheme. However, per section 4.1, the entitlement to claim damages under the MAI Act retains the need to establish fault in the causative use or operation of the vehicle by the owner or driver of the vehicle. The deeming provision in section 5.2 refers to such a claim for damages. Accordingly, the requirement for causative use or operation of the vehicle is relevantly the same as in the MAC Act and as discussed in Melenewycz.

The application to the claimant's claim

1. The subject vehicle involved in the accident was owned and driven by the driver. It was a single vehicle accident. There is no other vehicle to bring a claim against. The only claim that the driver could hypothetically have would be a claim against himself.
2. Recognising this, the driver attempted to bring a claim for damages against himself utilising the "no fault" accident provisions in Part 5 of the MAI Act.
3. It was accepted by the insurer that the accident fell within the definition of no-fault accident. However, this in itself does not create any entitlement to claim damages, as section 5.1 is definitional and does not create or deem any liability.
4. Given that the driver was both the owner and driver of the vehicle, his situation is the same as the situation that was described by the Court in Melenewycz at [31] above, where it was said that a driver cannot have a claim against himself.
5. Therefore, the driver does not have the necessary foundations for a common law claim in negligence, that can be assisted by the deeming of fault that occurs by operation of statute.
6. Even if fault could be deemed, and even if there was no bar on the claim by reason of the inability to sue oneself, the driver would still have to prove causative use or operation of the vehicle by the owner or driver (in the way the insurer was unable to do in Melenewycz).
7. This causative use or operation requirement was considered further by Cavanagh J in QBE Insurance (Australia) Limited v Abberton [2021] NSWSC 588, the claimant in the Tribunal was referred to as AQQ, with his Honour finding, at [68] - [69]: 68. "Motor accident" is defined to mean an incident or accident involving the use or operation of a motor vehicle that caused the death or injury to a person in the circumstances as set out in the definition in s1.4 of the MAI Act. The definition of motor accident thus necessarily requires that there be the use or operation of a motor vehicle that causes the injury. If there is no accident involving the use or operation of a motor vehicle that causes the injury, then there is no motor accident as that term is defined. 69. In this matter there was only one motor vehicle. It was the motor vehicle being driven by the claimant. Irrespective of whether the [driver] veered off the side of the road because of the presence of a kangaroo or for some other reason, the motor accident was a single vehicle motor accident. The only motor vehicle which was involved which could satisfy the definition of motor vehicle was the claimant's motor vehicle. It was that motor vehicle which the [driver] was driving to which the offence relates. It was that motor vehicle which was involved in the motor accident that caused the claimant's injury.
8. If the driver cannot establish that there was use or operation of the vehicle that caused the injury, not only does he have no common law claim in negligence under the Act, there would be no "motor accident" within the definition of the Act, and therefore the Act would not apply and any claim would fall outside the CTP policy of insurance (section 2.3 of the MAI Act).
9. Having regard to the circumstances of the driver's accident, there is a significant issue as to whether or not there was any causative use or operation of the motor vehicle. However, given that there must have been causative use or operation of the vehicle, in order for the accident to be a "motor accident" at all, the only person who could have been using or operating the vehicle in such a way as to cause the accident is the driver.
10. Furthermore, as set out above, in order to bring the claim within the damages provisions of the Act, there needed to be causative use or operation of the vehicle by the owner or driver (ie, the driver).
11. There is no suggestion that there were any causative acts or omissions by the driver as owner of the vehicle that contributed to the occurrence of the accident.
12. If there were any acts or omissions by the driver that contributed to the occurrence of the accident, it must have been as driver of the vehicle (albeit, without fault). The only way the driver can bring any hypothetical claim within the scope of the Act is to argue that he was operating the vehicle in such a way that it led to the occurrence of the accident. Therefore, on this hypothetical basis, the driving must have been a cause of the accident.
13. Therefore, the entity against whom the claim would need to be made is the driver himself, as driver of the vehicle. There is then the fundamental problem that he has no legal right to claim in negligence against himself.
14. There is no available common law claim for damages under the MAI Act available to the driver in the circumstances of this case. The driver's submission below that he had a lawful basis for making a claim should be rejected. The asserted claim made by the driver is a legal nullity.

Grounds of Review - Member's Decision

1. For the reasons set out above, the insurer argues that the Member erred in the following ways: Ground 1
2. The Member made an error of law on the face of the record in failing to apply Melenewycz, and in finding that the driver had had a "pending claim for damages" when at law there was not and could not be any such claim. Ground 2
3. The Member asked himself the wrong question when he determined that it could not be said that the claim for damages was no longer pending just because liability had been denied or the insurer had asserted that it was doomed to fail, and that "Liability for the claim will be determined by others" (at [42] - [43]).
4. The relevant question was not whether liability had been denied but whether there was a lawful basis for the claim in the first instance.
5. In asking himself the wrong question, the Member fell into jurisdictional error. [8] Ground 3
6. The Member failed to respond to the substance of the substantial and clearly articulated argument advanced by the insurer (in its submissions before the Member - CB-112), based on established facts, that there was no pending claim for damages because there was no lawful basis for the claim at all.
7. In Allianz Australia Insurance Ltd v Cervantes, [9] Basten JA said at [19]-[20]: 19. … In Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 73 ALD 321; 197 ALR 389; 77 ALJR 1088; [2003] HCA 26 at [24] (Dranichnikov), Gummow and Callinan JJ stated: [24] To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice. 20. A similar point was made by Kirby J at [86] referring to a passage in the judgment of Gaudron J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; 179 ALR 238; [2001] HCA 22 at [81] (Miah) where, after noting that it was not always easy to distinguish an error of law which is jurisdictional from one that is not, her Honour continued: [81] However, the present case is, in my view, a clear case of constructive failure to exercise jurisdiction. That is because the delegate failed to consider the substance of Mr Miah's application and could only have failed to do so because he misunderstood what is involved in the Convention definition of "refugee".
8. In Rodger v De Gelder, [10] the Court of Appeal held that the review panel in that case had failed to respond to a substantial argument raised by the driver, stating at [109]: "Here the Panel failed to respond to a substantial argument based on evidence relied upon by Mr De Gelder as to the causation of his thoracic spine injury by the motor accident. It may also be inferred that the Panel failed to apply itself to the real question to be decided in carrying out its statutory function under s 58(1)(d), because it misunderstood a significant body of evidence relevant to its non-medical determination. What the Panel did amounted to a jurisdictional error. The Panel's decision recorded in its certificate is to be regarded as a purported and not real exercise of its statutory function in s 58(1)(d), leaving that statutory function unexercised, and the Authority and the Panel liable to the relief granted by the primary judge by way of judicial review: Ex parte Hebburn Ltd; Re Kearsley Shire Council [1947] NSWStRp 24; (1947) 47 SR (NSW) 416 at 420 (Jordan CJ)."
9. The insurer's submissions were not responded to in substance by the Member. This was a constructive failure to exercise jurisdiction and denial of procedural fairness.

The President's Delegate's Decision

1. The President's Delegate's decision is invalid because it relies for its validity on the existence of an initial decision of the merit reviewer. On the basis that the decision of the Member is void due to legal error, the decision of the President's Delegate is also void.
2. Further and in the alternative, the insurer submits that the decision of the President's Delegate should be set aside on the following grounds.
3. Review proceedings in respect to the determination of the Delegate "are limited to determining whether the delegate's opinion has been properly formed according to law". [11] Critically the issue is "whether the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds". [12] The "state of satisfaction" that the Delegate must reach need not rise above a "state of unease" about the decision of the Assessor. [13]
4. The test in section 7.15(3) is relevantly the same as the test in section 63 of the Motor Accidents Compensation Act 1999 (NSW). Section 63 was considered by the Court of Appeal in Meeuwissen v Boden (2010) 78 NSWLR 143; 56 MVR 453; [2010] NSWCA 253. In that case, Basten JA (Beazley JA and Sackville AJA agreeing) observed at [19]: "First, what must be incorrect in a material respect is the "medical assessment" and not the certificate which results from the assessment. The subject matter of a medical assessment is a "medical dispute": s 63(1). A "medical dispute" is defined to mean "a disagreement about one of the matters (referred to as 'medical assessment matters') set out in s 58(1). These include whether the degree of permanent impairment is greater than 10%: s 58(1)(d). The end result of a medical assessment is a certificate as to a medical assessment matter: s 61(1). In this context, to describe a medical assessment as incorrect in a material respect does not necessarily require that the certificate would, or might, have been different, absent the error."
5. An error of law is sufficient to satisfy the test in section 7.15(4).
6. The President's Delegate erred in failing to be satisfied of reasonable cause to suspect that the Member's decision was incorrect in a material respect, on the basis of the submissions that were made to the Delegate by the insurer. Such decision was illogical and irrational. This was a jurisdictional error.
7. Further, the President's Delegate erred in determining the substance of the merit review matter for himself, including questions of statutory interpretation, rather than performing the statutory task set out at section 7.15(3) of the MAI Act, which was to consider whether there was reasonable cause to suspect that the decision of the Member was incorrect in a material respect. This is particularly evident at [10]-[11] of the Delegate's decision, where he said: 10. "The Merit Reviewer noted that the [driver] made a claim for damages on 31 May 2022. That claim for damages is pending because the claim, including liability for the claim, was found by the Merit Reviewer to be "determined by others". There is nothing in schedule 2(1)(b) or section 3.12 of the Act that requires the Merit Reviewer to go further and make such a determination. 11. As the Merit Reviewer states at paragraph 43 of the Certificate reasons, section 3.12(3) of the Act provides that the maximum weekly payment period ends if the pending claim for damages is withdrawn, settled or finally determined after the period of 104 weeks after the motor accident concerned (my emphasis). This supports the Merit Reviewer's above finding in my view." [Emphasis added]
8. The determination made by the Delegate required the application of legal expertise which he did not possess and which did not fall within the scope of his statutory power.
9. In Oeding-Erdel v Allianz Australia Insurance Limited, [14] McCallum JA held at [37]: "At [9]-[10] of her reasons, the proper officer stated that Dr Dixon had complied with cl 1.31 of the Motor Accident Permanent Impairment Guidelines by correctly calculating the whole person impairment of the plaintiff before the time of the accident. That finding was based upon the proper officer's purported application of medical judgment in the conclusion that the Assessor's reasons in relation to the plaintiff's pre-existing impairment aligned with certain indicia in Table 72 of the AMA Guides to the Evaluation of Permanent Impairment (4th Ed). Such an analysis called for the application of medical expertise which was beyond the qualifications of the proper officer and, more importantly, beyond the scope of her statutory function."
10. In purporting to determine the substance of the merit review matter rather than determine the statutory question in section 7.15(3), the Delegate committed jurisdictional error.

Conclusion

1. I am satisfied that the insurer's submissions are correct. I agree that the second and third defendants have committed error of law or fallen into jurisdictional error or have constructively failed to exercise their jurisdiction in respect of each of or any of or a combination of the above grounds of judicial review and the decisions under review are accordingly invalid and should be set aside.
2. There is no utility in remitting the proceedings back to the Personal Injury Commission as no other conclusion can be reached.
3. THE COURT ORDERS THAT: 1. The decision of the second defendant, Member Maurice Castagnet dated 29 March 2023 be set aside. 2. The decision of the President's delegate, the third defendant dated 13 June 2023 be set aside. 3. The decisions are not to be remitted to the Personal Injury Commission for determination according to law. 4. There be no order for costs.

Endnotes

1. Garcia v MAA (2009) 54 MVR 102 at [21]-[24]; see also the discussion in Kirk and Industrial Court of NSW (2010) 239 CLR 531at [78] to [90] and also [66] to [70].
2. (2014) 66 MVR 152 at [27].
3. (2014) 66 MVR 152 at [27].
4. (2015) 71 MVR 514 said, (at [95] per Gleeson JA, Macfarlan and Leeming JJA agreeing).
5. (2011) 80 NSWLR 594 (at 614 [91]-[92] (per Beazley JA with McColl and Macfarlan JJA agreeing) - followed in IAG Ltd t/as NRMA Insurance v Chahoud [2019] NSWSC 767, Stanizzo v AAI Limited trading as GIO [2021] NSWSC 1077, Lederer v Insurance Australia Limited trading as NRMA Insurance [2022] NSWSC 322, Insurance Australia Group Ltd v Keen [2021] NSWCA 287; 399 ALR 765.
6. Section 3A of the MAC Act limits the application of the Act to "the death of or injury to a person that is caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle and only if the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during…" the circumstances listed in that section.
7. Section 5.1 of the MAI Act is identical to section 7A of the MAC Act with the exception that "no-fault accident" replaces the words "blameless motor accident", and the words "in the State" are inserted after the words "motor accident".
8. Craig v South Australia [1995] HCA 58; 184 CLR 163, Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323.
9. [2012] NSWCA 244 at [19] - [22].
10. (2015) 71 MVR 514; [2015] NSWCA 211 at [109] per Gleeson JA (with Macfarlan and Gleeson JJA agreeing)
11. QBE v Miller (2013) 67 MVR 322 per Basten JA at [36]; Buck v Bavone (1976) 135 CLR 110 at 118 - 119 (Gibbs J) - applied to applications for review of medical assessment proceedings under the MAC Act in Dominice v Allianz Australia Insurance Ltd (2017) 81 MVR 249 at [7].
12. Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 at [38]
13. Elliott v Insurance Australia t/as NRMA Insurance [2014] NSWSC 1848.
14. [2021] NSWSC 1264; 97 MVR 442 at [37]. 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: 24 November 2023