Rafiqul Islam v Transport Accident Commission of Victoria and Heather Worldon v Transport Accident Commission of Victoria

District Court of NSW|2022-11-09|Before: Mr J

Solicitors: Plaintiffs in proceedings 2022/112245: Drexler Litigation Lawyers Plaintiffs in proceedings 2022/140539: Gerard Malouf and Partners Defendant: Carroll & O'Dea Lawyers File Number(s): 2022/112245 2022/140539 Publication restriction: None

JUDGMENT

These proceedings concern two summons which I have ordered to be heard together, with evidence in one being evidence in the other.
Both summons sought by way of their ultimate relief, leave to bring proceedings in this Court pursuant to the provisions of section 26 (3) of the Personal Injuries Commission Act 2020 ("PIC Act"). This relief was sought on the basis that the matters involved in the compensation claims, the subject of the proceedings, involved the exercise of Federal jurisdiction for the purposes of section 26 (3)(b) of the PIC Act.
The possibility of the potential exercise of Federal jurisdiction by the PIC arose from the fact that the plaintiff in each case was involved in a motor vehicle accident in New South Wales, where the other driver was driving a vehicle registered in Victoria. The defendant, the Transport Accident Commission of Victoria ("TAC") is the sole compulsory third-party motor vehicle insurer for the State of Victoria.
When the summons came on for mention before Phillips DCJ on 24 June 2022, His Honour made the following directions for written submissions on three preliminary questions ("The Three Questions") being: 1. Is the Personal Injury Commission of New South Wales a Court of the state? 2. Is the personal Injury Commission decision-maker in this case exercising judicial or administrative power? 3. What is the proper characterisation of the Frist Defendant and is it a part of the State of Victoria?

The Necessity Principle

The Attorney drew my attention to the principle of necessity which applies to constitutional questions. This principle was explained in the following manner. It is a "well-settled principle that constitutional questions should not be determined 'unless there exists a state of facts which makes it necessary to decide such a question in order to do justice in the given case and to determine the rights of the parties" (See Doyle's Farm Produce Pty Ltd v Murray Darling Basin Authority (No 2) (2021) 106 NSWLR 41, [20] (Leeming JA, Bathurst CJ and Bell P agreeing) quoting Lambert v Weichelt (1954) 28 ALJ 282, 283. See Knight v Victoria (2017) 261 CLR 306, [32]-[33] (Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ)).
By application of this principle, it would not be necessary for the Court to determine whether the PIC is a "court of a State" if, in hearing and determining the proceedings, the PIC was not exercising judicial power. It would be similarly unnecessary to determine whether the TAC was for relevant purposes an emanation of the Crown to the right of Victoria.
Accordingly, the Attorney, asserted that in the circumstances of this case, the only question which is necessary to be determined is the second, namely, "whether the PIC's decision in this case was exercising judicial or administrative power?". I agree with this contention.
I will thus confine these reasons to the answer of that question alone, both for the reasons articulated by the Attorney, and also because in my view the answers to the Three Questions in substance have the nature of a declaration as of right. As such, in circumstances where there is no dispute between the parties as to the correct answers to the other questions, I believe that it is inappropriate for the court to unnecessarily answer these questions, there being no controversy as to them (Metzger v Department of Health and Social Security [1977] 3 All ER 444 at [45] per Megarry VC).

The Second Question - General Principles

I will turn then to the second question, namely, whether the PIC's decision-maker in each proceeding was exercising judicial or administrative power?
In Rizeq v Western Australia (2017) 262 CLR 1 at [52], Bell, Gageler, Keane, Nettle and Gordon JJ explained that the "essential character" of judicial power "stems from the unique and essential function that judicial power performs by quelling controversies about legal rights and legal obligations through ascertainment of facts, application of law and exercise, where appropriate, of judicial discretion".
That said, it should also be noted that the High Court has stated that, "Judicial power has proved to be insusceptible of comprehensive definition" (See Love v Attorney General (NSW) (1990) 169 CLR 307, 319), with "many positive features which are essential to the exercise of the power are not by themselves conclusive of it" (see also Precision Data Holdings Ltd v Wills (1991) 173 CLR 167, 188-189). The court also explained that "there is a 'borderland in which judicial and administrative functions overlap'" (See R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361, 373).
The authorities have identified various indicia of judicial power. These are as follows.
First, judicial power is binding and authoritative. In Huddart, Parker & Co Limited v Moorehead (1909) 8 CLR 330, 357, Griffith CJ described judicial power as: "… the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action."
Implicit in this description is the "fundamental character" of judicial power, namely "as a sovereign or governmental power exercisable, on application, independently of the consent of those whose legal rights or legal obligations are determined by its exercise" (See TCL Air Conditioner (Zhongshan) Co Ltd, Judges of the Federal Court of Australia (2013) 251 CLR 533 at [28]).
In Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645 at [31], the High Court said that "of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force".
It should be noted however, that as Deane, Dawson, Gaudron and McHugh JJ observed in Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245, 267-8, not every binding and authoritative decision, made in the determination of a dispute, constitutes the exercise of judicial power. Legislative or administrative decisions may also answer that description.
Secondly, an exercise of judicial power determines existing rights and obligations according to law. In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361, 374-375 Kitto J explained: "… a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist. …"
As to the determination aspect of this description of the judicial power, in Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [20], the High Court set out the general rule identified in Tasmanian Breweries. French CJ, Bell, Gageler and Keane JJ explained that: "The rendering of a final judgment in that way 'quells' the controversy between those persons. The rights and obligations in controversy, as between those persons, cease to have an independent existence: they 'merge' in that final judgment."
The majority in Brandy explained that determination according to law was a reference to "the application of a pre-existing standard rather than by the formulation of policy or the exercise of an administrative discretion". That said, once again, their Honour's cautioned that "the exercise of non-judicial functions, for example, arbitral powers, may also involve the determination of existing rights and obligations".
Thirdly, as the High Court stated in Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd (2015) 255 CLR 352 at [26], although some functions, such as the determination and punishment of criminal guilt, are necessarily judicial, other functions are "neither purely executive nor purely judicial" (see Paphos Providores Pty Ltd v Ladha (2015) 91 NSWLR 400 at [41]). As the Court pointed out in Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542, the adjudication of a dispute is "neither conclusive, nor even a strong indicator, of a judicial function. It is commonplace in administrative law". Indeed, the formation of an opinion as to the legal rights and obligations of parties may be an element in the exercise of an administrative power (see Precision Data, 189 and Today FM at [33]).
Finally, a function may be judicial or administrative in nature depending upon the manner of its exercise (see Today FM at [59]). As was stated by French CJ and Gageler J in TCL at [27], judicial power must be exercised judicially: including, for example, through an "open and public enquiry (unless the subject matter necessitates an exception)" and "observance of the rules of procedural fairness".
Conversely, the fact that a body is not bound by the rules of evidence, and whose procedures are informal, can indicate that the exercise of a function is administrative (see K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at [82]). As the majority in Brandy, explained, "there are functions which, when performed by a court, constitute the exercise of judicial power but, when performed by some other body, do not" (see Brandy, at [267]).
I shall now turn to apply the general principles set out above to the issues in the two summons.

Does the Commission Exercise Judicial Power in Assessing a Claim for Damages under sub-division 2 of Division 7.6 of the Motor Accidents Injuries Act 2017 ("MAI Act")?

This question is of direct relevance to the summons in the Islam matter.
As the Attorney General correctly submitted, the Commission does not exercise judicial power in assessing a claim for damages under sub-division 2 of Division 7.6 of the MAI Act. This is so for the following reasons.
First, the claims assessment is not binding and authoritative. The Commission's assessment of the issue of liability for the claim or the amount of damages for that liability does not result in a "binding and authoritative decision" (See s 7.36(1)(a) and (b) of the MAI Act). This conclusion arises from at least the following.
Section 7.38(1) of the MAI Act expressly states that the Commission's assessment of liability for a claim "is not binding on any party to the assessment".
With respect to the assessment of the amount of damages, s 7.38(2) of the MAI Act describes the assessment as "binding" but only: "on the insurer"; where the insurer has admitted liability; and where the claimant accepts the amount of damages within 21 days of the issue of the certificate of assessment. The PIC Act provides that an amount ordered to be paid by the Commission can be certified and filed in a court of competent jurisdiction and that such a certificate operates as a judgment of that court. However, the fact is that the "binding" nature of the damages assessment rests on the consent, and subsequent election, of the claimant, denies the process of the essential character of judicial power.
Secondly, and for substantially the same reasons, the claims assessment does not "determine" or "quell" the controversy in the manner identified above. This is expressly acknowledged by s 6.31(1)(b) of the MAI Act, which relevantly makes claims assessment a pre-condition to a claimant's entitlement to commence court proceedings against another person in respect of a claim. Even then once proceedings have been commenced in respect of a claim for which the Commission has issued a certificate under s 7.36 of the MAI Act, s 6.34 of the MAI Act requires the Court to adjourn proceedings until first the matter has been referred for further assessment under Division 7.6 and secondly the Commission has issued a further certificate in respect of the claim.
Thirdly, the claims assessment function is not transformed into a judicial function by virtue of the fact that the Commission is applying the law, both statute and common law (see s 4.1(2)(b) of the MAI Act), when making an assessment, in assessing an amount of damages, of what "a court would be likely award" (see s 7.36(1)(b) of the MAI Act).
I have earlier indicated that the exercise of administrative powers may involve adjudication and the application of pre-existing standards and the formation of an opinion as to legal rights and obligations. Moreover, the award of damages is not an exclusively judicial function as stated by Deane, Dawson, Gaudron and McHugh JJ in Brandy at 269.
Finally, the nature of the Commission, and the manner in which it can exercise its claim assessment powers support the conclusion that administrative power is being exercised under Division 7.6 of the MAI Act. ss 8 and 31(1) of the PIC Act. The Commission consists of the President, Deputy Presidents, principal members, senior members and general members. Pursuant to s 10(1) and (2) of the PIC Act the Presidential members must be legally qualified, while other members can be appointed without such qualifications. This may occur if the person "has, in the opinion of the Minister, special knowledge, skill or expertise in relation to any class of matter in respect of which the Commission has jurisdiction" (see ss 10(3)(b) and 4(b) of the PIC Act).
As to the manner in which the Commission's powers may be exercised, s 43 of the PIC Act provides that the proceedings before the Commission are to be conducted with as little formality and technicality, as the proper consideration of the matter permit. The Act also makes clear that the Commission is not bound by the rules of evidence, and may inform itself on any matter in the manner the Commission thinks appropriate, and as the proper consideration of the matter permits. Finally, the PIC Act provides the Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
In addition, s 52(4) of the PIC Act contemplates that the Commission is not required to exercise its power through open and public enquiry. This is so as the Act provides that proceedings need not be conducted by formal hearing. The Act also provides the Commission may hold conferences with all parties or a "separate conference in private with any of them". It also provides that it may exercise its functions without holding any conference or formal hearing, where satisfied that sufficient information has been supplied to it, and that an assessment is to be made even if one or more of the parties to the assessment do not co-operate or cease to co-operate, (see also s 7.36(2) of the PIC Act).
For these reasons in my view, in making decisions in respect of damage assessments, the PIC is exercising administrative, and not judicial power.

Does a Medical Assessor Exercise Judicial Power in Dealing with a Medical Dispute under Division 7.5 of the MAI Act?

This question is relevant to the summons in the Worldon matter.
A number of authorities have touched on the nature of the power being exercised by medical assessors in similar or predecessor statutory regimes.
In Orellana-Fuentes v Standard Knitting Mills (2003) 57 NSWLR 282 at [51], Ipp JA, with whom Spigelman CJ and Handley JA agreed, referred to medical specialists (who fulfilled a similar role under the Workplace Injury Management and Workers Compensation Act 1998) as being "given far-reaching decision-making powers of a fundamentally judicial nature". The Attorney General however, submitted that, his Honour should not be read as concluding that the specialists exercised judicial power. This was so as His Honour also stated that he considered the relevant provisions were "significantly inconsistent with the Commission being a court". I agree with this contention.
In Campbelltown City Council v Vegan (2006) 67 NSWLR 372, in the context of identifying an implied statutory obligation for an Appeal Panel, in hearing an appeal against a medical assessment, to give reasons, Basten JA, with whom McColl JA agreed, referred to the assessment of permanent impairment as "an exercise in the nature of a judicial function" because it involved "the application of a statutory test, by which legal rights … are determined" (at [109] and [117]).
The Attorney General submitted that it is not clear whether Basten JA concluded that there was an exercise of judicial power. The Attorney went on to submit that it may be doubted that his Honour so concluded that in circumstances where his Honour's conclusion as to the implied duty relied on matters other than the nature of the function/power being exercised. This was so it was submitted, especially where Basten JA expressly acknowledged that the "functions might not constitute an exercise of judicial power for the purposes of the federal Constitution" ([115-117]). I agree with this submission.
In Singh v Motor Accidents Authority of NSW (No 2) [2010] NSWSC 1443 at [33], Rothman J described medical assessors under the Motor Accidents Compensation Act 1999 assessing permanent impairment as "resolving a dispute as to the rights under a statute of an individual as against another individual and/or her or his insurer". The Attorney submitted that His Honour's language echoed descriptions of judicial power, and that his Honour did not conclude that the assessors exercised judicial power. In that regard it should be noted that Rothman J referred to assessor's exercising a jurisdiction "even if it not be judicial power" ([36]).
I thus agree with the Attorney General's contention that the better view of Orellana- Fuentes, Vegan and Singh is that these cases did not definitively conclude that the decision makers in each case were exercising judicial power.
In my view, having regard to the provisions of the MAI Act and the PIC Act, a medical assessor does not exercise judicial power in dealing with a medical dispute concerning either the degree of permanent impairment or the existence of a minor injury under the MAI Act (see Schedule 2, cl 2(a) and (e)).
I take this view for a number of reasons, first, as to the status of medical assessments, s 7.23 of the MAI Act provides that the medical assessor to whom a medical dispute is referred, is to give a certificate as to the matters referred for assessment and provides that: "The certificate is, in any court proceedings or in any proceedings in connection with a merit review under Division 7.4 or a claims assessment under Division 7.6 - (a) prima facie evidence of any matter certified as to the degree of impairment of earning capacity of the injured person as a result of the injury concerned, and (b) conclusive evidence of any other matter certified."
Thus, while the decisions of medical assessors (other than as to the degree of impairment of earning capacity) are "conclusive evidence" (s 7.23 (2)(b)), and a court "may not substitute its own determination as to any medical assessment matter" (s 7.23(5)), the existence of judicial power is not established by the existence of a conclusive evidence provision. See Deputy Commissioner of Taxation v Buzadzic (2019) 348 FLR 213 at [10], [98]-[100].
The Attorney General's submitted that, the medical assessment is not binding and authoritative in the relevant sense in circumstances where: 1. Pursuant to s 7.24(1) and s 7.23(6) of the MAI Act, the medical dispute referred for assessment may be referred again for assessment at any time by a court, a merit reviewer or the Commission. 2. The medical dispute referred for assessment may be referred again for assessment by the claimant or the insurer, albeit only on prescribed grounds and only once, as outlined in s 7.24 (2) and (3) of the MAI Act. Regulation 13 of the Motor Accident Injuries Regulation 2017 provides that a medical dispute may be referred again for assessment on the grounds of deterioration of the injury or additional relevant information about the injury, such as to be capable of having a material effect on the outcome of the previous assessment.
In addition, in any court proceedings the Court may reject a certificate as to all or any of the matters certified in it, pursuant to s 7.23(3) of the MAI Act, on the grounds of denial of procedural fairness to a party if satisfied that the admission of the certificate would cause substantial injustice to that party. If the certificate is rejected, the Court is to refer the matter again for assessment.
I agree with the Attorney's submission that the "conclusive evidence" provision does not lead to a conclusion that judicial power is being exercised by medical assessors.
Secondly, and relatedly, in my view the capacity for a medical dispute to be referred again for assessment demonstrates that the medical assessor is not quelling the controversy between the parties.
I thus accept the Attorney General's submission that a medical assessor is not determining the existing rights and obligations of the parties according to law in the manner described in the authorities.
The Attorney submitted that the medical assessor is not determining the controversy between the parties. He went on to submit that this is evident from the definition of "medical dispute" under s 1.4(1) of the MAI Act. A medical dispute arises in the context of "claim" by a claimant, meaning a claim for statutory benefits or a claim for damages. That claim is not determined by the medical assessor, and the medical assessor's certificate only has effect within the confines of such proceedings.
Rather the Attorney General submitted that, the assessment of the degree of permanent impairment or the existence of a minor injury are factum upon which the MAI Act operate, with ss 4.4 and 4.12 of the MAI Act respectively precluding the award of damages if the injuries were "minor injuries", and the award of non-economic loss unless the degree of permanent impairment is greater than 10%.
As noted above, the formation of an opinion as to legal rights and obligations may be an element in the exercise of administrative power. In Attorney-General (Cth) v Breckler (1999) 197 CLR 83, Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ observed that "a determination which 'constitutes the factum by reference to which' legislation operates to confer crucially enforceable rights and liabilities does not necessarily involve the exercise of judicial power".
While medical assessors might be said to be applying pre-existing standards in making medical assessments, those standards are principally medical, not legal, standards. "Minor injury" is defined as a "soft tissue injury" or a "minor psychological or psychiatric injury", requiring clinical assessment (see s 1.6). Pursuant to s 7.21(1) of the MAI Act, the degree of permanent impairment is to be assessed in accordance with the Guidelines. This reference to guidelines is a reference to guidelines issued by the State Insurance Regulatory Authority (see s 10.2 of the MAI Act). The guidelines in Pt 6 of the Guideline for permanent impairment are based on the American Medical Association's Guides to the Evaluation of Permanent Impairment (see [6.2] of the Guidelines].
In my view, the Attorney was correct in submitting that a conclusion that medical assessors are not exercising judicial power is further supported by the nature of medical assessors themselves. A "medical assessor" is defined by s 1.4(1) of the MAI Act, as being a person appointed under the PIC Act as a medical assessor for the purposes of the Act. Under s 33 (1)(b) of the PIC Act the President of the Commission may appoint persons to be medical assessors for the purpose of the MAI Act in accordance with the regulations. These regulations relevantly provide that a person is eligible for appointment as a medical assessor if the person is: "(a) a registered health practitioner or a medical practitioner within the meaning of the Health Practitioner Regulation National Law (NSW), but only if the practitioner does not have a condition imposed against the practitioner's registration as a result of disciplinary proceedings under that Law, and (b) a member of an Australian or Australasian medical college, faculty or other Australian or Australasian health profession body, and (c) in the opinion of the President, suitably qualified and has the necessary skills and expertise to exercise the functions of a medical assessor in relation to the Act or the enabling legislation."
The manner in which the power to assess possessed by medical assessors is exercised, in my opinion also strongly suggests that medical assessors are not required to exercise their power judicially. In my view to the contrary, although the PIC Act does contain some protections of decisional independence as set out in s 36(2) and (3); s 36(1) of the PIC Act provides that the medical assessors are, "in the exercise of their functions, subject to the general control and direction of the President".
For these reasons I agree with the Attorney-General's submissions that a medical assessor does not exercise judicial power when dealing with a medical dispute under Division 7.5 of the MAI Act.

Conclusion

For these reasons I consider that the PIC was in error when it considered that it was lacking in jurisdiction to determine the questions before it in both matters, on account of the intrusion of matters of Federal jurisdiction. In my view the PIC was in fact exercising administrative power not judicial power.
It also follows, as all parties agreed, that leave should not be granted to the plaintiffs to bring their respective matters before this Court, and that the summons must be dismissed.
I thus answer question two as "Administrative Power"

Costs

The parties have provided helpful written submissions on costs. The defendant contends that as the summons in each case are to be dismissed, that costs should follow the event.
The plaintiffs contend that in the circumstances of this case, notwithstanding the dismissal of their summons, they should enjoy a costs order in their favour.
I do not consider that either approach is the appropriate one. The parties came before the court in most unusual circumstances, such circumstances being in my view sufficient reason in and of themselves to depart from the usual rule that costs follow the event (UCPR 42(1)).
The parties are before the court as result of what I have determined as an erroneous view taken by the PIC of its own functions. The plaintiffs initially accepted this view which led to the proceedings been commenced in this Court.
The defendant says the proceeding should have been commenced in the Supreme Court by way of an application for judicial review of the PIC's decision. I tend to the view that this would have been the better course. That said. it is not in my view unreasonable for the plaintiffs to have proceeded in the manner in which they did.
At the end of the day, the costs discretion must be exercised in a manner designed to further the dictates of justice. I do not see how those dictates are being achieved by visiting an adverse costs order on any of the parties in the unusual circumstances of this case.
Accordingly, there should be no order as to costs.

Orders

In each case: 1. That the summons in hearing be dismissed. 2. No order as to costs.

Amendments 28 November 2022 - Typographical error 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: 28 November 2022

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