Zahed v IAG Limited t/as NRMA Insurance

Court of Appeal (NSW)|2016-02-05|Before: Meagher JA, Leeming JA, Hulme AJ

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

The Assessment

On 27 October 2010, the Claimant was involved in a motor vehicle accident when a vehicle insured by the Insurer collided with the rear of a vehicle being driven by the Claimant. The Claimant experienced shock and abdominal pains. Thereafter, she experienced lower back pain, neck pain and other symptoms, which continued. She made an application to the Insurer for compensation. The Insurer admitted liability.
The Assessor concluded that, as a result of the accident in question, the Claimant sustained a whiplash injury affecting her lower back, resulting in a chronic muscular-ligamentous condition. The Assessor found that the Claimant suffers from persistent neck pain with associated headaches that, on the balance of probabilities, were caused by the accident. The Assessor also considered that the Claimant developed an adjustment disorder as a result of the accident [Black 395].
Relevantly for present purposes, the Assessor had before him certificates under Part 3.4 of the Compensation Act from two medical practitioners, being a certificate dated 7 May 2013 from Dr Nigel Marsh and another dated 16 July 2013 from Dr Judith Davidson. In addition, the Assessor had reports from Dr Vijay Maniam, who treated the Claimant.
Dr Marsh considered that the injuries suffered by the Claimant, particularly the injury to his lower back, gave rise to a need for domestic assistance from 27 October 2010 to the date of his assessment. He also considered that they may give rise to a need for domestic assistance from that date and for the balance of the Claimant's life expectancy, of approximately 57 years.
Dr Davidson, on the other hand, certified that only a limited number of hours per week of domestic assistance from 27 October 2010 to the date of assessment, and from the date of the assessment for the balance of the Claimant's life expectancy, were reasonable and necessary in relation to the injuries sustained. Dr Davidson stated that the specific details of the care that was considered reasonable and necessary were as follows:

6.76 hours per week from 27 October 2010 to 8 November 2011,
Three hours per week from 8 November 2011 to the date of assessment,
Three hours per week from the date of assessment for two years,
One hour per week from two years following the date of assessment for a maximum of a further three years.

Dr Davidson gave detailed reasons for those opinions and included a summary of the care that she determined was reasonable and necessary covering the three periods from the date of injury to 8 November 2011, from 8 November 2011 to the date of Assessment and from the date of Assessment into the future (the Davidson Summary). The Davidson Summary apportioned the hours specified above to various kinds of assistance.
The Assessor assessed the Claimant's entitlement to damages in the sum of $114,979.45, made up as follows:

Past treatment $16,699.97
Future treatment $12,000.00
Past gratuitous care $36,280.38
Future commercial care $50,000.00

The complaint by the Insurer was that the Assessor failed to give adequate reasons for his determination in relation to past gratuitous care and future commercial care. In the reasons for the decision appended to the Assessment, the questions of past care and future care were relevantly dealt with as follows: Past Care 32 The Claimant's evidence is as set out on her statement as supplemented by the information provided in the Assessment Conference and the statement of Sue Tan who was not required for questioning. The Insurer's primary position is that the medical evidence does not establish for gratuitous care and, in any event, that the claim does not meet the statutory threshold. Further, the Insurer submits that the Claimant is bound by the determination of Assessor Davidson to which I refer below. 33 … Dr Vijay Maniam … says Assistance for children minding, cleaning, scrubbing: 4 hours, 2 days per week He says the services will be required for the next few years. He does not provide for any breakdown. 34 Assessor Kossoff assessed the need for carers distance on psychological grounds and determined that the Adjustment Disorder she be diagnosed did not give rise to any need for domestic assistance. 35 Jenny Greenfield, occupational therapist … estimated that the Claimant required 9 hours 25 minutes per week. This, however included 2 hours and 20 mins for care for her baby. … Ms Greenfield reported that: Essentially achieved the rehabilitation goals developed on the previous occasion, that is, to become independent in all respects of her domestic care within a 3 months period. 36 Dr Ian Harris reported that … the Claimant was receiving assistance at home with cooking and cleaning by Sue Tan, that the Claimant was attempting to become more self-sufficient and that she should be able to perform those activities but they would be associated with pain "as is currently the case". He did not consider her need for assistance would increase in the future. 37 Assessor Nigel Marsh certified … that the claimant required domestic assistance for [certain specified tasks] to the date of assessment. Further, she would require assistance in respect of those tasks for the balance of her life expectancy, approximately 57 years and that those needs related to the injuries caused by the motor vehicle accident. 38 Assessor Judy Davis certified … that [certain treatments identified] were not reasonable and necessary. These questions are whether a specific number of hours starting with zero and increasing to 14 were reasonable and necessary. She then set out at the end of her reasons the specific number of hours which she did consider were reasonable and necessary … namely: from the date of injury to 8 November 2011 - 6.76 hours from 8 November 2011 to the date of assessment - 3 hours future - 3 hours 39 This summary of care determined as reasonable and necessary is strictly part of her reasons for her certificate 40 I have been assisted by submissions from each of the parties: The submissions of the Insurer; The Insurer submits that the effect of the assessment of Assessor Davidson is that in accordance with the legislation concerning a treatment dispute it is conclusive evidence as to the matters certified … c. The Claimant submits in reply that … A Claims Assessor … is bound by the answers given to the list of questions but is not bound by the determination of the MAS Assessor as to what level of assistance was reasonable and necessary … as those recommendations were not part of the certificate but rather part of the reasons. 41 I consider that law is directly stated in the submission on behalf of the Claimant and that I am only constrained by the conclusiveness of the answers to specific questions put to Assessor Davidson. 42 The Claimant submitted that I should allow an amount of 28 hours per week for the period from the accident to 31 December 2012 with the care provided by Sue Tan. Following this and until 20 June 2012 (in effect until the assessment conference) it was submitted that I should provide an amount of 14 hours per week similarly for care provided by Sue Tan. 43 … The question … is not how many hours gratuitous care that Sue Tan provided but what the Claimant's medical need for care was. Dr Maniam, who was well aware of the Claimant's needs having treated her over the years on a number of occasions, considered that her requirement for domestic assistance (including child minding which is now not claimed) was 4 hours 2 days per week including, however, an unapportioned time for childcare). Assessor Davidson summarised the care that she considered as reasonable and necessary for the initial period between 6 and 7 hours and from 9 November 2011 at 3 hours per week. 44 Taking into account all the expert opinions as well as the opinions of both Assessor Davidson and Dr Maniam (who considered that the need for care 4 hours a day, 2 days a week was continuing at the time when he saw her) and making some allowance for the deduction of time spent on child care and with the assistance of the summary recommendations of Assessor Davidson … I allow an amount 6.76 hours per week for past gratuitous care from the date of the accident to date of assessment as reasonable and necessary. 45 … I assess 6.76 hours per week, i.e. $175.76 per week from the date of the accident to date giving $36,280.38 for 206.4 weeks. Future Care 46 Assessor Marsh has certified that the Claimant will require domestic assistance for her life expectancy of approximately 57 years. I accept that determination. The Assessor, however, did not determine the number of hours as that was the province of Assessor Davidson who was of the opinion that the future need was more limited. This recommendation is not binding on me. The specific answers to the 30 questions are binding on me but I would not, for example, be prevented from determining that 3.5 hours a week or some other figure not covered by Assessor Davidson was reasonable and necessary if the evidence supported it. Similarly, I would be entirely, if the evidence supported it, to assess for the future on the basis of say 1.5 hours per week or 5.5 hours per week subject to threshold issues in each case insofar as gratuitous care is concerned. In the initial submissions for the Claimant future attendant care was claimed at 3 years, at 10 hours per week at the Assessment Conference the claim was put at 7 hours per week for 20 years i.e. not for the life expectancy of the Claimant. 47 There is uncertainty about the Claimants with respect to future care for a number of reasons … 48 I cannot determine the Claimant's future care needs with precision but I am satisfied that, on the balance of probabilities, there is a need which will result in damages, initially in respect of gratuitous care, at the current rate 6.76 hours per week and, at some stage in the future, on the balance of probabilities, for commercial care at the rate of $35 per hour. The authorities permit me to assess a buffer which I do in the amount of $50,000.

The Reasons of the Primary Judge

In its amended summons filed on 19 December 2014, the Insurer sought to impugn the Assessment on several grounds. One of the grounds was that, in dealing with the issues of past and future care, the Assessor failed to provide adequate reasons for his decisions and conclusions concerning past and future care.
Section 94 of the Compensation Act relevantly provides for the making of an assessment by a claims assessor of claims under Part 4.4, and requires a claims assessor to issue to the parties relevant certification. More specifically, s 94(5) requires the claims assessor to attach a brief statement to the certificate, setting out the reasons for the assessment. In addition, under s 106 such assessments are subject to the relevant provisions of guidelines relating to those assessments.
Section 69 of the Compensation Act authorises the Authority to issue guidelines for motor accident claims assessments with respect to Part 4.4. The Interpretation Act 1987 (NSW) applies to such guidelines in the same way as its provisions apply to statutory rules. Motor Accidents Claims Assessment Guidelines have been issued by the Authority under s 69 (the Guidelines). Clause 18.4 of the Guidelines relevantly provides that a certificate under s 94 must have attached to it a statement of the reasons for the assessment that sets out, as briefly as the circumstances of the assessment permit:

material findings of facts,
the claims assessor's understanding of applicable law if relevant,
the reasoning process that led the claims assessor to the conclusions made, and
an amount of damages and the manner of determining that amount.

In his reasons, the Primary Judge observed that to succeed in setting aside a claims assessor's decision, a party must establish jurisdictional error, a constructive failure to exercise jurisdiction or legal unreasonableness. In particular, his Honour said that, given the requirements of s 94(5) of the Compensation Act and clause 18.4 of the Guidelines, an assessor's failure to provide reasons could constitute such an error: see Campbelltown City Council v Vegan [2006] NSWSC 284; 67 NSWLR 372. His Honour observed that legal unreasonableness encompasses circumstances where a decision maker has failed to give adequate weight to a relevant factor of great importance, or has reasoned illogically or irrationally, where a decision lacks evidence and intellectual justification and where it is not apparent how a conclusion was reached, but the decision itself bespeaks error: see Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [363].
The Primary Judge considered that it was not a compliance with s 94(5) or clause 18.4 of the Guidelines merely to refer to some or all of the relevant evidence, assert that it had been taken into account and then state a conclusion. His Honour considered that to do so did not amount to reasons within s 94(5) or a reasoning process or a manner of determining an amount. His Honour observed that a statement of reasons must explain the actual path of reasoning by which a decision maker in fact arrived at the opinion formed on the question referred to the decision maker. A statement of reasons must explain the actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the medical panel formed its opinion, the legal effect of the opinion can be removed by an appropriate order. If a statement of reasons fails to meet that standard, the failure is itself an error of law on the face of the record of opinion, on the basis of which an appropriate order can be made removing the legal effect of the opinion: see Wingfoot Australia Partners Pty Limited v Kocak [2013] HCA 43; 252 CLR 480 at [55].
Having observed that the reasons of a claims assessor should not be scrutinised over zealously, the Primary Judge concluded that the Assessor had not revealed his reasoning process and provided no reason why he selected the figure of 6.76 hours per week. His Honour said that, although it might be possible to infer that the Assessor simply adopted Dr Davidson's figure, he provided no reasons as to why he did so for the whole of past care, or why he rejected Dr Davidson's view that the figure should be at 3 hours per week for some of that time.
The Primary Judge accepted that in the assessment of damages, there is a place for informed intuition and speculation, and that the question is largely one of impression. Nevertheless, his Honour said that in cases where intuition, speculation or impression founded the basis for a conclusion, that of itself did not provide reason for the conclusion reached. His Honour concluded that the Assessor did not comply with the requirements of s 94(5) or the Guidelines and that there was an error of law on the face of the record such that the Assessor's decision in issuing the Assessment should be set aside. In the light of that conclusion, his Honour did not give any consideration to the other errors relied upon by the Insurer.

The Appeal

While the grounds stated in the Claimant's notice of appeal are somewhat discursive, they appear to amount to a complaint that the Primary Judge erred in holding that the Assessor did not comply with the requirements of s 94(5) of the Compensation Act or the Guidelines. In particular, it is contended that the Assessor is not obliged to provide a statement of reasons as to why he may have accepted or rejected some of the evidence touching upon the claims for past and future care and was not obliged to provide reasons as to why he rejected Dr Davidson's view that the Claimant's need for domestic care after 8 November 2011 was reduced to 3 hours per week.

Relevant Principles

Since the Insurer had accepted liability, the function of the Assessor was to make an assessment of the amount of damages for which the Insurer was liable in respect of the claim by the Claimant. The assessment was to be of the amount of damages that a court would be likely to award. Such an assessment is to be made having regard to such information as is conveniently available.
An assessment is to specify an amount of damages and the claims assessor must, as soon as practicable after an assessment, provide the parties with a copy of a certificate as to the assessment. Critically, under s 94(5), a claims assessor is to attach a brief assessment to the certificate, setting out the claims assessor's reasons for the assessment.
In making an assessment of the future need for domestic services, precision is almost impossible. Such a question is largely one of impression: see Wener v Krahe [2002] NSWCA 168 at [27]. Nevertheless, at least in relation to assessing past needs, the reasons given by a claims assessor must explain the actual path of reasoning by which the claims assessor in fact arrives at the opinion that the claims assessor in fact forms on the question. The statement of reasons must explain the actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law: see Wingfoot Australia Partners Pty Limited v Kocak [2013] HCA 43; 252 CLR 480 at [55].

Consideration of the Grounds of Appeal

In paragraph 38, the Assessor observed that, in the Davidson Summary, Dr Davidson had set out the specific number of hours that she considered were reasonable and necessary. The Assessor said that the Davidson Summary was "strictly part of her reasons for her certificate" and was therefore not binding. That observation is curious in light of the form of the document produced by Dr Davidson. The document contains the heading "Certificate" and is followed by a statement as to various hours of treatments that were not reasonable and necessary in the circumstances. The Assessor appears to have accepted that that part of the document was binding, as I indicated above. Immediately following that part of the document, still under the heading "Certificate", is a statement by Dr Davidson of the specific details of the care that she considered reasonable and necessary. That part of the document ends with the following statement: Details of the assessment are set out in the reasons below, which form part of this Certificate.
That is followed by a heading "Reasons". The "Reasons" contain several headings as follows: 1. Dispute Details 2. Introduction 3. Histories Given by the Injured Person 4. Findings on Clinical Examination 5. Review of Documentation 6. Determinations Under the heading "Determinations", Dr Davidson repeats, verbatim, the material contained in the "Certificate" component of the document and then continues with the narrative reasons for the determination, finishing with the Davidson Summary.
The Assessor concluded that he was not bound by that part of Dr Davidson's certificate that stated that the care that was considered reasonable and necessary was limited to 6.76 hours per week from 27 October 2010 to 8 November 2011, to 3 hours per week from 8 November 2011 until the date of assessment, to 3 hours per week from the date of assessment for 2 years and to 1 hour per week from 2 years following the assessment for a maximum of 3 years. The Insurer did not dispute the correctness of that conclusion although it is not clear why the parties accepted that Dr Davidson's statement of the specific details of the care that were considered reasonable and necessary were not part of her certificate. Nevertheless, the appeal has proceeded on the basis that the Assessor's conclusion was correct.
Clearly, the Assessor rejected the opinion of Dr Davidson as to the period during which care was considered reasonable and necessary. Rather, the Assessor appears to have accepted the opinion expressed in the certificate of Dr Marsh that domestic assistance from the date of the accident and continuing for the balance of Claimant's life expectancy related to the injuries caused by the motor accident. However, Dr Marsh did not specify the extent of domestic assistance required.
In his reasons, the Assessor appears to have adopted some aspects of the opinion expressed by Dr Davidson, namely that for a limited period, 6.76 hours per week was reasonable and necessary. However, the Assessor concluded that such a degree of domestic assistance was reasonable and necessary for a period extending well beyond that specified by Dr Davidson. The Insurer's complaint was that the Assessor simply gave no reasons for that conclusion.
On the hearing of the Appeal, counsel for the Claimant sought to support the Assessor's determination on the basis that his reasoning could be inferred in some way from the conclusion. Thus, it was suggested that the Assessor accepted the assessment made by Dr Davidson in respect of the period up to 8 November 2011 but rejected her opinion in respect of any period after that date. Dr Maniam expressed the opinion that the claimant would require assistance for child minding, cleaning and scrubbing for a few years but did not provide a breakdown.
In his reasons, the Assessor said that he took into account all the expert opinions, including those of Dr Davidson and Dr Maniam, and made some allowance for the deduction of time spent on childcare. It is not clear to what the Assessor was referring when making an allowance for the deduction of time spent on childcare or what allowance was necessary in relation to Dr Davidson's assessment. The Assessor also said that his determination was made with the assistance of the summary of Dr Davidson to which I have referred above. That, at least, makes clear that the figure of 6.76 adopted by the Assessor was derived from Dr Davidson's reasons, if not her certificate.
It may be that the Assessor adopted Dr Davidson's assessment of hours and then projected that number by reference to the opinion of Dr Marsh (that domestic assistance from 27 October 2010 and continuing for the balance of Claimant's life expectancy related to the injuries she suffered in the accident). However, Dr Marsh simply makes no assessment of the extent of the domestic assistance that was reasonable and necessary. It is not possible to discern from the Assessor's reasons the actual path of reasoning by which he arrived at the result stated in the Assessment. It does not explain the actual path of reasoning in sufficient detail to enable a court to determine whether his decision does or does not involve an error of law. The Assessor did not comply with the requirement of s 94(5) that he set out his reasons for the Assessment. He did not comply with s 106 in so far as the Assessment was subject to the provisions of clause 18.4 of the Guidelines in requiring that his statement of reasons attached to his certificate set out, albeit as briefly as the circumstances of the assessment permit, the reasoning process that led the Assessor to the conclusions made.
A fine line is sometimes to be drawn between the grant of relief under s 69 of the Supreme Court Act by reason of inadequate reasons (as in this case), and what is ultimately, in substance, merits review. The grant of relief in a case such as this should not be taken as an encouragement to challenge administrative decisions of the nature of that made by the Assessor in this case. As the Primary Judge observed, quite correctly, the reasons of a claims assessor should not be scrutinised over zealously. While the reasons required are not necessarily those which may be expected of a judge, the reasons must demonstrate the path of reasoning that leads the claims assessor to a conclusion as to the amount of damages that a court would be likely to award. In order to make an assessment of the amount of damages that a court would be likely to award, a claims assessor must have regard to the reasoning process that the court would be required to adopt in awarding damages. Again, a fine line is to be drawn between the reasons that might be given by a court for making an award and the reasons of a claims assessor for making an assessment for the amount of damages that a court might be likely to award. The former is a more burdensome task than the latter. However, the Assessor did not in this case, satisfy the latter burden. That is the conclusion reached by the Primary Judge.

Conclusion

There was no error on the part of the primary judge in reaching his conclusion and granting relief by way of setting aside the Assessment. The Appeal should be dismissed with costs.

Amendments 19 June 2017 - Coversheet - Reported citation of Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13 corrected 21 June 2017 - [4] - Citation of Allianz Australia Ltd v Kerr corrected 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: 21 June 2017

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