Zurich Australian Insurance Limited v Elizabeth Pellegrino; Elizabeth Pellegrino v NRMA Insurance Australia Ltd

Supreme Court of NSW|2010-09-20

Background 10 Mrs Pellegrino was injured in motor vehicle accidents in 1987, 2002 and 2005. The first accident before the CARS Assessor occurred on 16 August 2002 and Zurich was the CTP insurer. It was a relatively minor rear end collision. The second accident occurred on 18 April 2005 and NRMA was the CTP insurer. In the second accident Mrs Pellegrino suffered a number of fractures and was trapped in her vehicle for some time. 11 The Claims Assessment and Resolution Service Assessor ("the Assessor") exercised jurisdiction under s 94 of the Motor Accidents Compensation Act 1999 ("MAC Act") by making an assessment of the amount of damages for the liability of Zurich to Mrs Pellegrino for the motor accident on 16 August 2002. At the same time he made an assessment of the amount of damages for the liability of the NRMA to Mrs Pellegrino for the motor accident on 18 April 2005. The Assessor was required to and did issue certificates as to those assessments.

Apportionment 12 Zurich submitted that the error of the Assessor was in determining that the assessment of damages should be done as a whole for both of the Zurich accident and the NRMA accident, after which responsibility was to be apportioned between Mrs Pellegrino's pre-existing state of health and then between the Zurich accident and the NRMA accident. 13 Zurich submitted that the correct approach to the assessment of damages in this case was the first approach identified in paragraph 115 of the Assessor's decision dated 24 February 2010, namely an independent award in relation to each accident. Zurich further submitted that the error is demonstrated by the fact that the Assessor failed to take into account the concessions made by both Zurich and the NRMA in relation to past out of pocket expenses and in his assessment of both past economic loss and past care. Further, according to Zurich, because of the error, the Assessor has not properly directed his mind to the assessment of future economic loss, future care and future treatment. 14 Finally, Zurich submitted that the Assessor asked himself the wrong question by stating that he was required to make one assessment of damages and then apportion between the two accidents and Mrs Pellegrino's pre-existing health condition and assessing damages in that way he made an error of law and therefore failed to exercise his authority under the MAC Act. 15 NRMA submitted that the task of the Assessor was to make an assessment of damages and apportioned it between tortfeasors. Where there are different methods of approach, it is not an error of law if the Assessor adopts one of those methods. The Assessor's determination 16 As previously stated, Mrs Pellegrino has been involved in three motor vehicle accidents the first in 1987, the second on 16 August 2002 and the third on 18 April 2005. Her medical history of injuries and disabilities over the span of the three accidents to date is complex. The task of the Assessor was not an easy one. 17 So far as the 1987 accident is concerned, the Assessor made a finding that Mrs Pellegrino had intermittent, but nevertheless, persisting, neck and lower back pain which necessitated radiological investigations and treatment at various stages over a 15 year period. The 15 year period takes Mrs Pellegrino's condition up to the time of the second accident (the Zurich accident) that occurred on 16 August 2002. The Assessor made an allowance for the injuries and damages arising from the 1987 accident by taking 15% off the overall amount of damages. The Assessor's approach in relation to making an allowance for the 1987 accident is not the subject of challenge in these proceedings. The Assessor apportioned the NRMA and Zurich accident as being 85 percent of Mrs Pellegrino's total medical picture [J 126]. 18 The Assessor also made a finding that while the cause of Mrs Pellegrino's cardiac condition was caused by the NRMA accident, any ongoing complaints probably related to gastric impairment, is unrelated to either accident. Mrs Pellegrino's cardiac complaints were excluded and she has no complaint in relation to this finding. 19 Not surprisingly, in both NRMA's and Zurich's submissions to the Assessor they sought to blame each other and the 1987 accident for Mrs Pellegrino's ongoing injuries and disabilities (see determination at [J 101 to 102]). 20 After the accident Mrs Pellegrino rested over the weekend and did not attend her weekend work at Fairfield Nursing Home. After some improvement in her condition, she returned to work on the Monday to her weekday job at the Scalabrini Village and she was able to do her normal duties although her neck and upper back were sore by the end of the her shift. She continued to manage her normal duties at the Village and the nursing home, she felt tired at the end of each shift because of neck/right shoulder and back pain. Mrs Pellegrino had trouble doing her housework. Initially her husband helped with the housework but they separated in early 2003 and all housework duties returned to her. She was able to continue doing all the housework, albeit with more breaks doing the heavier work such as vacuuming, mopping and cleaning the bathrooms. In 2005 she still suffered some neck and upper back pain occasionally. She continued to cope with her normal work duties, although she used the lifting hoist as much as possible and received some assistance from other nurses;' assistants for heavy lifting 21 I shall now refer to the reasons contained in the Assessor's determination dated 24 February 2010 where he deals with the NRMA accident and his approach to apportionment.

"103. In my view, the best sources in teasing out the relationship of each of these scenarios to Mrs Pellegrino's present medical picture are the MAS assessments conducted by Drs Gibson, Johnson, Payten and Parmegiani, and Mrs Pellegrino's treating cardiologists, Drs Taylor and Nashed, and Professor Usher. … 105. In my view, the Zurich accident, whilst relatively minor, aggravated that condition, to the extent that Mrs Pellegrino was seeking treatment and had radiological investigations of the cervical spine and thoracic spine about 1 month before the subsequent NRMA accident.

Nevertheless, Mrs Pellegrino was coping relatively well with most of her everyday personal, domestic and work activities up until the NRMA accident.

In my view, the NRMA accident took Mrs Pellegrino's physical injuries and ongoing problems to a new level of intensity, with the development of a psychological/psychiatric condition and an inability to return to her pre-NRMA accident work. … 112. All in all, I accept that Mrs Pellegrino has ongoing physical problems from the Zurich and NRMA accidents relating to intermittent pain with respect to the neck, right shoulder, low back and right knee, together with a loss of smell and deviated sternum. 113. I accept that Mrs Pellegrino has ongoing symptoms of depression relating to the NRMA accident which, in part, at least, relate to her symptoms of pain, and fluctuate over time and respond to intervention with cognitive behaviour therapy and antidepressant medication. 114. I accept that Mrs Pellegrino ceased work as a result of her NRMA accident injuries and sequelae and I have formed the view that it is now unlikely if she will ever return to gainful employment. 115. I need to decide what the most just and equitable method is to assess damages for Mrs Pellegrino's two claims to ensure no compromise to her proper entitlement - should it be by way of independent awards for each accident or should damages be assessed as a whole for both accidents, after which responsibility is apportioned between the two accidents whether it be by way of all, or some, heads of damage? … 116. In my view, the latter approach is preferable on the basis that, whilst some of Mrs Pellegrino's injuries and complaints from each accident are separate and distinct, there is a sufficient degree of overlap between both accident physical injuries and sequelae for one assessment of damages to be then apportioned between the two accidents. …

Whilst I accept that Mrs Pellegrino has some ongoing disability with respect to her physical injuries from both accidents, I believe there is a significant causal relationship between her physical complaints and her mental state. …

It seems to me that, in light of all the evidence, there is overlap in injuries and sequelae between the Zurich and NRMA accidents, albeit superimposed upon some pre-existing sequelae flowing from largely Mrs Pellegrino's 1987 accident injuries.

In my view, with respect to this overlap and the relevant heads of damage, an appropriate apportionment as to the responsibility between the Zurich and NRMA accidents is that the Zurich accident should bear 15% responsibility and the NRMA accident, 85%.

It seems to me that there is also overlap between Mrs Pellegrino's medical condition at the time of the Zurich accident, fundamentally flowing from her 1987 accident, and the Zurich and NRMA accidents.

In my view, with respect to this overlap, and the extent to which this overlap is representative of Mrs Pellegrino's present medical picture, insofar as it relates to the Zurich and NRMA accidents, an appropriate apportionment as to responsibility between her pre-Zurich accident medical state and the effects of the Zurich and NRMA accidents, is 15% and 85%, respectively, on the basis that her pre-Zurich accident problems were far from insignificant and have played a real role in completing her present medical picture." 22 From these reasons Zurich submitted that the Assessor made an error in determining that the assessment of damages should be done as a whole for both of the Zurich accident and the NRMA accident, after which responsibility was to be apportioned between the claimant's pre-existing state of health and then between the Zurich accident and the NRMA accident. The correct approach, according to Zurich is that there should have been an independent award in relation to each accident. In oral submissions counsel for Zurich submitted that Mrs Pellegrino's psychiatric condition and right knee, loss of smell and deviated sternum were not caused by the 2002 accident. Nor should it be responsible for any economic loss because she did not take any time of work after the accident. Hence it should not be responsible to pay for these damages.

The assessment of damages 23 Both parties referred to State Government Insurance Commission v Oakley (1990) Aust Torts Reports 81-003 at 67,577-67,578 per Malcolm CJ; Barbaro v Gambacorta 6 MVR 99; and Insurance Australia Limited trading as NRMA Insurance v Helou [2008] NSWCA 240. Zurich also referred to DNM Mining Pty Ltd v Barwick [2004] NSWCA 137 and Government Insurance Office of NSW v Aboushadi [1999] NSWCA 396. 24 The assessment of damages is not an exact science. The object of damages awarded for tortious injury is to put the plaintiff, so far as money can do, as he or she would have been if he or she had not been injured. 25 In Oakley the trial judge awarded damages in relation to a motor vehicle accident that had occurred in 1981. The plaintiff was subsequently involved in a further accident at work in 1984. In the accident Mrs Oakley suffered injury to her cervical spine, neck, pain and headaches and continuing radiating pain in her right shoulder and down her right arm. Three years after, at work as a nurse, she was supporting a geriatric patient who slipped and pulled the plaintiff's left arm aggravating the symptoms of the initial injury. 26 The trial judge in Oakley found that the plaintiff's disability at time of trial was due "in approximately equal proportions to the motor vehicle accident and to the work related accident". The defendant appealed on the basis that the findings of the trial judge were against the evidence and the weight of the evidence and that the trial judge should have found that the various heads of damage were substantially if not entirely due to the work related accident on 7 August 1984. The relevant issue for the trial judge to decide was whether and, if so, to what extent Ms Oakley's disability and damages following the second accident could be said to be caused or contributed to by the disability caused by the first accident and, therefore, caused by the negligence of the insured. 27 Malcolm CJ in Oakley identified three alternative approaches to the assessment of damages at [67,677] where the negligence of a defendant causes an injury, and the plaintiff subsequently suffers a further injury. These propositions were first stated in Fishlock v Plumber [1950] SASR 176. As stated in Oakley, the position is as follows: "(1) where the further injury results from a subsequent accident which would not have occurred had the plaintiff not been in the physical condition caused by the defendant's negligence, the added damage should be treated as caused by that negligence;

(2) where the further injury results from a subsequent accident, which would have occurred had the plaintiff been in normal health, but the damage sustained is greater because of aggravation of the earlier injury, the additional damage resulting from the aggravated injury should be treated as caused by the defendant's negligence; and (3) where the further injury results from a subsequent accident which would have occurred had the plaintiff been in normal health and the damage sustained include no element of aggravation of the earlier injury, the subsequent accident and further injury should be regarded as causally independent of the first." 28 The appeal was dismissed, the Court of Appeal being of the opinion that the case fell within the second category entitled the trial judge to assess damages on the evidence by way of a 50/50 split between the two accidents and that the approach of the trial judge to assess damages by way of a percentage apportionment between the two accidents was entirely appropriate. The New South Wales Court of Appeal referred to this passage with approval in Jefferies v Roads & Traffic Authority of New South Wales [1997] NSWCA 167; and Bridge Printery v Mestre [1999] NSWCA 342 at [16]. 29 In Barbaro v Gambacorta the facts are that Mr Gambacorta was involved in two motor vehicle accidents, one on 21 November 1980 and the other on 16 November 1981. Prior to the accidents, Mr Gambacorta was a hardworking and experienced cane cutter. As a result of the first accident, he suffered from low back pain, neck pain and restriction of movement in the back, neck and the restriction of movement in the neck. After the first accident he could not do any heavy farming work and had not been able to hold jobs of light work. After the second accident he suffered from headaches and sleeplessness and was no longer fit for heavy work and no light work was available to him. 30 The trial judge in Barbaro v Gambacorta found that as a result of the two accidents Mr Gambacorta had suffered damage which he assessed at $134,318. The trial judge thought that if he had not suffered the second accident, Mr Gambacorta his damages would have been 20 percent less. Thus, he apportioned 80 percent of the verdict amount to the first accident and 20 percent apportioned to the second accident. 31 So far as this approach to assessing damages is concerned the Court of Appeal in Barbaro v Gambacorta (per Priestely JA with whom McHugh and Clark JJA agreed) stated: "In an area where fact finding and estimation are so hard to separate and where a court is reaching conclusions about what would have happened in the future if something which has happened had not happened, I do not think it can be said that Enderby J was wrong, nor, if this is an issue on which the court should make up its own mind, would I arrive at a significantly different finding, taking into account the same factual background as that found by the trial judge. The second issue does not seem to me to arise either. The premise necessary to be made out before this issue could require consideration is that the second accident would have produced the same damage as that caused by the first accident; but the evidence rises no higher at best than that such a result might have come about, and further, the fact is that it did not. The question which counsel sought to raise would truly call for debate if for example in the first accident the plaintiff had lost his right hand at the wrist and then in the second accident lost his right arm at the elbow. The situation in the appeal was not one of that kind. There was no challenge to his Honour's basic finding of fact that the plaintiff's back symptoms were caused by the first accident and that the second accident caused an aggravation of them, which subsided after some months but still contributed to the plaintiff's ongoing loss of capacity and his ongoing symptoms. The contention advanced by counsel was that the expert medical evidence required the conclusion that if the plaintiff had not suffered the first accident, then the second accident would have produced the same back symptoms which had been caused by the first accident. I do not think the medical evidence established this inherently improbable position. On my reading of the various statements made by the medical practitioners in the evidence concerning this matter they cannot be construed as saying that in the absence of the first accident the second accident would necessarily have produced either exactly or substantially the same symptoms brought about by the first accident; the evidence amounts in my opinion to no more than a recognition of the possibility of such a result. … A final point relied upon by counsel for Mr Barbaro was that it was wrong for the trial judge to approach the question of damages by first asking what was the overall result in money terms of the consequences to the plaintiff of the two accidents and then to divide that total figure in the way that he did. Clearly, no criticism could be made of an approach which looked separately at all times at the consequences of the two accidents to the plaintiff. It does not follow that that is the only acceptable method of dealing with a situation such as arose in the present cases. The method used by his Honour may well be more likely to lead to error, if incautiously used, than the obviously unimpeachable method that I have mentioned. On the other hand, carefully used his Honour's method may be appropriate in particular cases. However that may be, I do not think that his Honour's use of the method he adopted in the present case led to any result requiring intervention by this court. First, on my reading of the appeal papers it seems to have been implicit in the way the trial was conducted that the method eventually used by his Honour would be one acceptable to the parties. Judged by what I have read in the appeal papers the case does not appear to me to have been conducted by any of the three parties with a view to asking that the judge deal with the ultimate questions of damages by the strictly separate approach. Even if that be wrong, and the position is not completely clear from the appeal papers, I see no sign in my reading of his Honour's reasons of the result that he reached being any different from that which would have been reached had he followed the method of the strictly separate approach." 32 In Government Insurance Office of NSW v Aboushadi, the facts are that on 31 July 2005, Mr Aboushadi suffered post traumatic stress disorder as a result of witnessing a level crossing collision and its aftermath. In April 1988, there was another level crossing accident involving a train on which he was working. The trial judge concluded that the 1985 accident caused significant psychiatric damages which rendered him prone to suffer symptoms and that the 1988 incident was simply or largely an incident of that kind. In December 1999, there was a third level crossing accident. Dr Ali made a firm diagnosis of post traumatic stress disorder stemming from the 1985 accident. The 1991 accident where Mr Aboushadi sued for post traumatic stress disorder was settled. The insurer GIO argued at trial that the settlement amount should be set off entirely against the damages otherwise payable in consequence of the 1985 accident. The trial judge rejected that argument. The Court of Appeal stated at [18] - [21]: "18 … that any damage caused by the incident at Tarago in 1988 occurred only because of the predisposition stemming from the effect of the 1985 accident; whereas the incident at Parkes in 1991 would have been likely to have caused damage had the respondent been in his normal condition at the time, although the damage sustained by him was greater because of his prior injured state. 19 On this basis, the appellant was held liable only for the extra damage stemming from the 1991 incident that was due to the respondent's previously injured condition. 20 Applying these principles to the medical and other evidence, the judge concluded that slightly less than two-thirds of the damage occurring and manifesting itself after 1991 was attributable to the 1985 accident. He held that the 1985 accident had had a significant impact on the respondent and that, despite the Parkes incident of 1991, the respondent's condition since that date had been largely as a result of the traumatic effects of the 1985 incident. 21 I detect no error in this approach to the difficult task of disentangling the traumatic impact of the two major accidents. It was clearly open to his Honour to find that the earlier accident had itself caused the psychiatric condition which would have and did in fact continue after 1991, notwithstanding that the 1991 accident both re-enlivened and exacerbated the earlier condition." 33 The Court of Appeal (per Mason P with whom Meagher JA and Barr AJA agreed) held that the trial judge correctly applied Fishlock v Plumber [1950] SASR 176, a case which applied the propositions referred to by Malcolm CJ in Oakley. 34 In Government Insurance Office of NSW v Aboushadi, Mason P concluded at [23]: "23 The appellant submitted that these principles do not apply to a situation (like the present) where the second incident (here, the 1991 accident) was itself tortious. It was submitted that, in those circumstances, the second tortfeasor takes the victim as he or she is found. So be it. But the question at issue is the extent of liability of the first tortfeasor in a situation where the continuing adverse impact of the first tort is discernible. It is not the law that the commission of a second tort, affecting an already vulnerable plaintiff, by itself puts an end to the liability of the defendant responsible for the first tort. In Faulkner , Windeyer J said (at 85): There is I think a critical distinction between a supervening happening that prevents a particular damage occurring as a result of the tort and a supervening happening that causes the harm caused by the tort to have added gravity. In the first class of case the supervening event diminishes the damages which flow from the tort: in the second class it merely adds to them, so that the tortfeasor responsible for the first accident remains liable for the harm he caused, which is not merged in the combined result of his wrongdoing and the later event. The distinction is not always either easily made or preserved.

See also Jobling v Associated Dairies Ltd [1982] AC 794 at 815." 35 The Court of Appeal decided that the trial judge correctly applied the task of determining the extent of the GIO's legal responsibility which its insured inflicted upon Mr Aboushadi. The appeal was dismissed. 36 Support for the method of assessment of damages arising from two claims was expressly approved as one method of assessment in Luntz, Assessment of Damages for Personal Injury and Death (4th ed, paragraphs [2.6.8] and [2.6.9]): "[2.6.8] Overwhelming events. Where, however, a subsequent overtaking cause that is also wrongful overwhelms the effects of the earlier, so that the plaintiff continues to suffer the consequences of the first cause, but those particular consequences would also have occurred if the second event had occurred alone (even if there are also additional consequences), it is possible to attribute those consequences to both causes, just as in the case of simultaneous, wrongful sufficient causes… [2.6.9] Method of assessment. Whatever the merits of the above arguments, the Court must take care to avoid the situation where the Plaintiff is worse off as a result of being injured by two torts than if there had been no injury at all… A third way is to accept the argument advanced in the previous paragraph and hold both tortfeasors responsible for the loss that is common to both. If both tortfeasors are before the Court, it is probably best to assess the total damages as though there was only a single tort and then to apportion the loss to the respective tortfeasors according to one or the other of these methods." 37 In DNM Mining Pty Ltd v Barwick the brief facts are that Mr Barwick had a number of accidents that resulted in injury. In March 1995 Mr Barwick commenced employment with DNM Mining as a miner. He had a neck condition but it did not impede his work. On 4 September 1995, a piece of rock fell from the roof of the mine tunnel onto his back. He had suffered a facture of the first lumbar vertebra and he was certified unfit for work. He returned to work on light duties in late 1995, but no as light duties were offered his employment ceased. The trial judge made a finding that he would have continued to work as a miner but for the back injury. His Honour also made a finding that this neck injury was neither a fresh injury nor an aggravation of the pre-existing condition. 38 In February 1996 Mr Barwick commenced employment with Kidman & Co driving tractors and other machinery. He still suffered from back pain, but was able to operate the machinery and only had difficulty with work such as fencing. 39 On 22 February 1997 Mr Barwick was assaulted in a hotel. He was struck on the head and for about six months suffered from headaches and some dizziness and pain in his neck and shoulders but he was able to continue working for Kidman & Co. On 8 September 1999 Mr Barwick was involved in a motor vehicle accident when his car struck a cow and went off the road. He suffered injury to his neck and a fractured right clavicle. He returned to Kidman & Co on light duties. His light duties performing stock work which required him to drive a four wheel motorcycle. This caused significant jarring to his neck and shoulder. In December 1999 Mr Barwick suffered aggravation of his neck injuries while riding a four wheel motorcycle and that was "the straw that broke the camel's back". He was not able to perform the work available with Kidman & Co and ceased employment. The trial judge made a finding that if Mr Barwick had not been involved in the motor vehicle cow accident he would have most likely continued in his employment as a plant operator with Kidman & Co. The real reasons why he could not continue with Kidman & Co were his neck injury. By now his injuries to his back, neck and shoulders had become permanent. 40 The issue in Barwick was how the damages should have been assessed when the respondent's earning capacity was diminished by the injury for which the appellant was liable and was then diminished by an injury for which the appellant bore no responsibility. DMN Mining Pty Limited bore no responsibility for Mr Barwick's injury to his neck as the trial made a finding that to injury to his neck was unrelated to his employment there. DMN Mining Pty Limited was responsible for his back injury.

41 The Court of Appeal at [47] stated: 47 It may be that the respondent's loss of earning capacity from the mining accident was not wholly overtaken by the loss of earning capacity from the car accident. But that is not an answer to the appellant's submissions. Even if there were some ongoing effect of the back injury on earning capacity, it was necessary to consider whether the neck and shoulder injuries would have incapacitated the respondent from working as a miner. If they would have, continuing economic loss assessed on the basis that he could work as a miner should not have been awarded. The contingency of the car accident was known as a fact at the time of the hearing, and account had to be taken of it. In not doing so the judge was in error, and his award of damages for economic loss can not stand." 42 The Court of Appeal reassessed the loss of earning capacity caused by the by the mining accident which would not have been lost in the car accident. 43 From these cases, it can be seen that where a further injury results from a subsequent accident which would have occurred had the plaintiff been in normal health but the damage is greater because of the aggravation of the earlier injury the damage resulting from the injury should be treated as the defendant's negligence. The overall damages can then be calculated and apportioned between the tortfeasors. This was the approach taken in Oakley, Barbaro and Aboushadi. 44 DNM Mining required a different approach because while Mr Barwick suffered a back injury during that employment his neck injury was not related to his employment. It was Mr Barwick's further neck injury that ultimately took him out of the workforce. The statutory scheme 45 Under the MAC Act common law rights to damages were significantly modified under the common law. The powers of a CARS Assessor to make assessments of damage concerning motor vehicle accidents arises under the MAC Act. Any decision about whether the Assessor made a jurisdictional error or error on the face of the record must depend on the scope and conditions of the decision making power conferred upon him or her by the MAC Act.

Section 94 of the MAC Act reads: "94 Assessment of claims

(1) The claims assessor is, in respect of a claim referred to the assessor for assessment, to make an assessment of: (a) the issue of liability for the claim (unless the insurer has accepted liability), and (b) the amount of damages for that liability (being the amount of damages that a court would be likely to award). (2) Such an assessment is to be made having regard to such information as is conveniently available to the claims assessor, even if one or more of the parties to the assessment does not co-operate or ceases to co-operate. (3) The assessment is to specify an amount of damages. (4) The claims assessor must, as soon as practicable, after an assessment issue the insurer and claimant with a certificate as to the assessment. (5) The claims assessor is to attach a brief statement to the certificate, setting out the assessor's reasons for the assessment. (6) If the Principal Claims Assessor is satisfied that a certificate as to an assessment or a statement attached to the certificate contains an obvious error, the Principal Claims Assessor may issue, or approve of the claims assessor issuing, a replacement certificate or statement to correct the error. …" 46 The Claims Assessments Guidelines have been made pursuant to s 69 of the MAC Act. They have the force of delegated legislation. Those Guidelines include clause 18.4. It reads: "18.4 A certificate under section 94 or 96 is to have attached to it a statement of the reasons for the assessment. The statement of reasons is to set out as briefly as the circumstances of the assessment permit: 18.4.1 the findings on material questions of fact;

18.4.2 the Assessor's understanding of the applicable law if relevant;

18.4.3 the reasoning processes that lead the Assessor to the conclusions made; and

18.4.4 in the case of an assessment certificate pursuant to section 94, the Assessor must specify an amount of damages and the manner of determining that amount." 47 NRMA Insurance v Helou concerned an appeal from a party seeking judicial review of a determination of a decision of a CARS Assessor. There was no dispute about the principles that should be applied in the assessment of damage; rather the dispute was about what the proper application of the principles required. At [57] - [58] Campbell JA (with whom Allsop P and Bell JA agreed) stated (emphasis added): "57 NRMA submits that, in the circumstance where it was shown that both the cervical spine and lumbar spine condition of the Respondent was contributed to by the accident, but the Respondent already had a pre-existing tendency to disability in the lumbar spine, the assessor was failing to perform his task of assessing damages when he declined to "determine the proportion of the Claimant's disability referable to the cervical and lumbar spine" .

58 I do not accept that the assessor has failed to perform the statutory task given to him of assessing the "amount of damages" sustained by the Respondent in consequence of the accident. As I understand it, Ms Adamson SC, for NRMA, submits that the way in which the assessor ought to have proceeded was to assess the damages that arose from the cervical spine condition, and bring the full quantum of the damages as so assessed to NRMA's account. He should then have assessed the damages attributable to the lumbar spine condition, and divided those damages into that part which was attributable to the accident, and that part that was attributable to the pre-existing lumbar spine condition, and brought to NRMA's account only that proportion of the lumbar spine damages that was found to be attributable to the accident. Alternatively, he should have assessed the extent to which the pre-existing lumbar spine condition has been causative of past loss and likely to be causative of future loss, and deduct the amount so assessed from the total loss that the Respondent has sustained in the past, and is likely to sustain in the future, through being disabled. I do not accept that assessment of damages is required by law to proceed in either of those ways. Indeed, proceeding in those ways seems to me to be a highly artificial way of proceeding. The assessor has recognised that the predictable future disability of the Respondent will partly result from the motor vehicle accident, and will partly result from his pre-existing lumbar spine condition. The assessor has recognised that, in particular, his past economic loss, his future economic loss, the award for past voluntary services, and the award for future care all need to be discounted, by a reason of the pre-existing lumbar spine condition, from the figure at which they would have been assessed had there been no pre-existing lumbar spine condition. Hence, for each of those heads of damage, he has arrived at a figure that takes into account the causal contribution of the pre-existing condition. Proceeding in that way is exactly what is required to perform the task of assessing damages." 48 The appeal in NRMA Insurance v Helou was dismissed. 49 Turning back to the determination of the Assessor, the Assessor stated that he accepted that Mrs Pellegrino had ongoing problems relating to the NRMA accident, which, in part at least, related to her symptoms of pain. However, the Assessor made a finding that Mrs Pellegrino had some ongoing disability with respect to her physical injuries from both accidents and found a significant causal relationship between her physical complaints and her mental state. The Assessor also stated that there was an overlap of injuries and sequelae and also an overlap between the Zurich and NRMA accidents. The Assessor adopted the second proposition as set out in Oakley and then apportioned the damages (leaving aside allowance made for prior injuries not caused by either Zurich and NRMA) 85 percent to NRMA and 15 percent to Zurich. It is my view that the Assessor has performed the statutory task given to him in assessing the amount of damages for the liability of Zurich and of NRMA. There is no error of law nor jurisdictional error in the Assessor's approach.

Calculation of damages - the error in calculation 50 Zurich submitted that the Assessor has also made a mathematical mistake, which he has refused to correct (paragraphs 182 to 185 of the Assessor's reasons). Zurich says that the damages of $331,797.88 do not "relate to 85% of Mrs Pellegrino's medical picture". According to Zurich, the figures in paragraph 171 of the Assessor's reasons relate to 100% of his assessment of damages.

51 Paragraphs 171, 182 to 185 of the Assessor's determination stated: "171. I assess the damages for both claims as follows, on the bases set out above, that is:

15% of Mrs Pellegrino's medical picture pre-dates both Zurich and NRMA accidents;

85% of Mrs Pellegrino's medical picture relates to Zurich and NRMA accidents, of which Zurich is to bear 15% and NRMA, 85% (15:85) and I assess this 85% as follows: A. Non Economic Loss $NIL B. Economic losses

Past loss of earnings ( 15:85 ) $147,058.00 Past Superannuation ( 15:85 ) $ 16,176.00 Fox v Wood ( 15:85 ) $ 20,000.00 Future loss of earnings ( 15:85 ) $ 67,760.00 Future Superannuation ( 15:85 ) $ 34,799.76 Past treatment ( 15:85 ) $ 15,000.00 Past gratuitous and commercial care ( 15:85 ) $ 13,353.12 Future gratuitous and commercial care ( 15:85 ) $ 10,186.00 TOTAL DAMAGES ASSESSED $331,797.88

NRMA has provided submissions that I have made a mathematical error in the figures expressed in paragraphs 171, 172 and 174 with respect to the issue of contribution. NRMA says that the mathematical error occurs because the figures detailed in paragraph 171 represent "100% of Mrs Pellegrino's medical picture".

I have taken NRMA's submission to be that my figures detailed in paragraph 171 should be reduced by 15% before apportionment between the NRMA and Zurich accidents.

In dealing with NRMA's initial submission with respect to apportionment of contribution, my assessment of damages in paragraph 171 of $331,797.88 relates to 85% of Mrs Pellegrino's medical picture.

In other words, my apportionment of damages between Zurich and NRMA is made on the basis that the damages of $331,797.88 relate to 85% of Mrs Pellegrino's medical picture." 52 The parties were given a prior draft of the Assessor's reasons on which they could comment. As a result of reading the draft, NRMA made precisely the submission that Zurich is making to this Court directly to the Assessor. The Assessor considered and rejected the proposition that the calculations made in paragraph [171] represented 100 percent of Mrs Pellegrino's damages. He specifically stated that the sum of $331,797.88 represented only 85 percent of Mrs Pellegrino's medical picture. In so far as the calculations of past treatment expenses were concerned, the Assessor's assessment of $15000 does not reflect 15 percent/85 percent apportionment and it was less than the $34799.76 claimed by Mrs Pellegrino. But these expenses can be calculated with accuracy as the Assessor was able to examine at the dates and the nature of those claims and made an allowance accordingly. This does not, in my view, amount to an error in law nor a jurisdictional error. 53 Overall, in my view, there is no error of law. The Assessor did not ask himself the wrong question and there is no jurisdictional error. The appeals are dismissed. The applications for judicial review fail. The summonses in both proceedings are dismissed. 54 Costs are discretionary. Costs usually follow the event. In proceedings No 2010/72302 the plaintiff, Zurich Australian Insurance Limited is to pay the defendant's costs. There is no order as to costs in proceedings No 2010/106155. The Court orders:

(1) The appeals in proceedings No 2010/72302 and proceedings No 2010/106155 are dismissed.

(3) The summonses filed 22 March 2010 and 29 April 2010 are dismissed.

(4) In proceedings No 2010/72302, the plaintiff, Zurich Australian Insurance Limited is to pay the defendant's costs.

(5) There is no order as to costs in proceedings No 2010/106155. **********

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.

CITATION : Zurich Australian Insurance Limited v Elizabeth Pellegrino; Elizabeth Pellegrino v NRMA Insurance Australia Ltd [2010] NSWSC 1114

Abebe v Commonwealth of Australia [1999] HCA 14; (1999) 197 CLR 510 Attorney-General for New South Wales v Quin [1990] HCA 21; (1990) 170 CLR 1 Barbaro v Gambacorta 6 MVR 99 Bridge Printery v Mestre [1999] NSWCA 342 Bruce v Cole (1998) 45 NSWLR 163 Buck v Bavone (1976) 135 CLR 110 Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163 Cross v McHugh [1974] 1 NSWLR 500 DNM Mining Pty Ltd v Barwick [2004] NSWCA 137 Fishlock v Plumber [1950] SASR 176 Government Insurance Office of NSW v Aboushadi [1999] NSWCA 396 CASES CITED : Insurance Australia Limited trading as NRMA Insurance v Helou [2008] NSWCA 240 Jefferies v Roads & Traffic Authority of New South Wales [1997] NSWCA 167 Jobling v Associated Dairies Ltd [1982] AC 794 Kirk v Industrial Relations Commission (NSW); Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales [2010] HCA 1; (2010) 239 CLR 531 Martin v Kelly [2008] NSWSC 577 Martin v Kelly [2009] NSWCA 105 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 State Government Insurance Commission v Oakley (1990) Aust Torts Reports 81-003 SZBYR v Minister for Immigration and Citizenship [2007] HCA 26; (2007) 235 ALR 609 Weal v Bathurst City Council [2000] NSWCA 88; (2000) 111 LGERA 181 Wyong Shire Council v MCC Energy Pty Ltd [2005] NSWCA 86; (2005) 139 LGERA 296

Judicial review generally 4 This Court has jurisdiction to grant any relief or remedy in the nature of a writ of certiorari which includes jurisdiction to quash the ultimate determination of a court or tribunal in any proceedings if that determination has been made on the basis of an error of law that appears on the face of the record of the proceedings. The face of the record includes the reasons expressed by the court or tribunal for its ultimate determination: s 69 of the Supreme Court Act 1970. 5 In Martin v Kelly [2008] NSWSC 577, Johnson J at [13]-[23], made some helpful remarks on the confines of judicial review (the result of which, it should be noted, was reversed by the Court of Appeal in Martin v Kelly [2009] NSWCA 105 but the part to which I refer was not the subject of dispute). They read as follows: "13 The present hearing involves judicial review of administrative action by way of a claim for prerogative relief. In Attorney-General for New South Wales v Quin (1989-1990) 170 CLR 1 at 35-36, Brennan J described the duty and jurisdiction of the Court on such an application in the following way: 'The duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone.'

16 The reasons for an administrative decision are not to be minutely and finely construed with an eye keenly attuned to the perception of error. The reasons of an administrative decision maker are meant to inform, and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed: Minister for Immigration and Ethnic Affairs v Wu Shan Liang at 271-2; SZBYR v Minister for Immigration and Citizenship [2007] HCA 26 at [25]. The reasons under challenge must be read as a whole and must be fairly read: Cross v McHugh [1974] 1 NSWLR 500 at 503; Minister for Immigration and Ethnic Affairs v Wu Shan Liang at 291.

20 In Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, McHugh, Gummow and Hayne JJ referred to the non-exhaustive list of kinds of error in Craig v South Australia , and continued at 351 [82]: 'Those different kinds of error may well overlap. The circumstances of a particular case may permit more than one characterisation of the error identified, for example, as the decision-maker both asking the wrong question and ignoring relevant material. What is important, however, is that identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision-maker did not have authority to make the decision that was made; he or she did not have jurisdiction to make it.' 21 Where a decision is challenged upon the basis that it was manifestly unreasonable (in the Wednesbury sense), the test to be applied is stringent. The decision must amount to an abuse of power or be so devoid of plausible justification that no reasonable person could have taken that course: Attorney-General for NSW v Quin at 36-37; Weal v Bathurst City Council (2000) 111 LGERA 181 at 188; [2000] NSWCA 88 at [27]; Wyong Shire Council v MCC Energy Pty Ltd (2005) 139 LGERA 296 at 312; [2005] NSWCA 86 at [79].

23 Where a challenge is one that relates to the formation of an opinion by an administrative tribunal, then the ground of legal error is somewhat confined by reference to the principles in Buck v Bavone (1976) 135 CLR 110 at 118-119; Bruce v Cole (1998) 45 NSWLR 163 at 183-184. …" 6 I respectfully adopt these comments of Johnson J. 7 In Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) [2010] HCA 1; (2010) 239 CLR 531 the High Court discussed jurisdictional error in Australia and considered Craig v South Australia (1995) 184 CLR 163 at [66] - [68]. The proceedings 8 Zurich seeks judicial review on two grounds. The first relates to the application of legal principle to the apportionment of damages between the two motor accidents. Zurich submitted that essentially this involves an argument between Zurich and NRMA Insurance as to their legal liability to pay damages for the condition of Mrs Pellegrino. Zurich submitted that if it succeeds in establishing error of law in this regard, the same error must apply to the award of damages against NRMA Insurance. 9 If Zurich does not succeed on its apportionment issue, it alleges that the Assessor erred in law [at paragraphs 171, 182 to 185 of his reasons for decision] in that he did not calculate the damages correctly. I shall refer to each ground of appeal in turn.

(2000) 111 LGERA 181

(2005) 139 LGERA 296

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