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NSW Crest

Court of Appeal
Supreme Court
New South Wales

Medium Neutral Citation:
Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13
Hearing dates:
31 January 2012
Decision date:
16 February 2012
Before:
McColl JA at 1;
Basten JA at 10;
Macfarlan JA at 66
Decision:

(1) Grant leave to appeal in respect of grounds 1, 3 and 4, subject to the applicant filing a notice of appeal in the form of the draft notice in the application book.

(2) Refuse leave to appeal in respect of ground 2.

(3) Dismiss the appeal.

(4) The applicant shall pay the respondent's costs of the proceedings in this Court.

[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.]

Catchwords:
ADMINISTRATIVE LAW - error of law on the face of the record - inadequacy of reasons - application of Motor Accidents Compensation Act 1999 (NSW) s 126 to obligation to provide reasons

DAMAGES - torts - negligence - motor vehicle accident - future economic loss - damages for future domestic assistance on a commercial basis - whether finding that future domestic assistance will be obtained on a commercial basis is required

DAMAGES - torts - negligence - motor vehicle accident - future economic loss - use of buffer - whether precluded by Motor Accidents Compensation Act 1999 (NSW) s 126
Legislation Cited:
Civil Liability Act 2002 (NSW), s 13
Migration Act 1958 (Cth), s 430
Motor Accidents Compensation Act 1999 (NSW), ss 69, 94, 106, 122, 123, 126, 128; Ch 5
Supreme Court Act 1970 (NSW), ss 69, 75A, 101
Uniform Civil Procedure Rules 2005 (NSW), r 51.40
Cases Cited:
Allianz Australia Insurance Ltd v Sprod [2011] NSWSC 1157
Allianz Australia Insurance Ltd v Ward [2010] NSWSC 720
Amoud v Al Batat [2009] NSWCA 333
Brear v James Hardie & Co Pty Ltd [2000] NSWCA 352; 50 NSWLR 388
Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372
Commissioner for Motor Transport v Kirkpatrick (1988) 13 NSWLR 368
Commissioner of Police v District Court of New South Wales (1993) 31 NSWLR 606
Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; 237 CLR 146
Craig v State of South Australia [1995] HCA 58; 184 CLR 163
De Sales v Ingrilli [2002] HCA 52; 212 CLR 338
Dinsdale v The Queen [2000] HCA 54; 202 CLR 321
Easwaralingam v Director of Public Prosecutions (Vic) [2010] VSCA 353; 208 A Crim R 122
Graham v Baker [1961] HCA 48; 106 CLR 340 at 347
Gulic v O'Neill [2011] NSWCA 361
Ilic v O'Connor [2004] 2 DCLR (NSW) 249
Insurance Australia Ltd trading as NRMA Insurance v Helou [2008] NSWCA 240
Insurance Australia Ltd (t/as NRMA Insurance) v Hutton-Potts [2010] NSWSC 1446; 57 MVR 194
Leichhardt Municipal Council v Montgomery [2005] NSWCA 432
Malec v J C Hutton Pty Ltd [1990] HCA 20; 169 CLR 638
Miller v Galderisi [2009] NSWCA 353
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323
Nominal Defendant v Livaja [2011] NSWCA 121
Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; 59 CLR 369
Penrith City Council v Parks [2004] NSWCA 201
Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99; 172 IR 453; Aust Torts Rep 81-949
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56; 216 CLR 212
Saville v Health Care Complaints Commission [2006] NSWCA 298
Solution 6 Holdings Ltd v Industrial Relations Commission of NSW [2004] NSWCA 200; 60 NSWLR 558
Sretenovic v Reed [2009] NSWCA 280
State of New South Wales v Moss [2000] NSWCA 133; 54 NSWLR 536
State of New South Wales (NSW Police) v Nominal Defendant [2009] NSWCA 225
The Nominal Defendant v Lane [2004] NSWCA 405
Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816
Werner v Krahe [2002] NSWCA 168
Zreika v State of NSW [2009] NSWCA 99
Texts Cited:
Professor Luntz, Assessment of Damages for Personal Injury and Death, 4th ed (2002) LexisNexis Butterworth ([11.2.8])
Category:
Principal judgment
Parties:
Allianz Australia Insurance Ltd - Applicant
Sarah Jane Kerr - First Respondent
Allan Cowley, Claims Assessor - Second Respondent
Motor Accidents Authority of New South Wales - Third Respondent
Representation:
Counsel:

Mr K P Rewell SC/Mr M A Robinson SC - Applicant
Mr G R Kennett SC/Ms F N Ramsay - First Respondent
Submitting appearance - Second Respondent
Submitting appearance - Third Respondent
Solicitors:

Moray & Agnew - Applicant
Steve Masselos & Co Pty Ltd - First Respondent
I V Knight, Crown Solicitor - Second Respondent
I V Knight, Crown Solicitor - Third Respondent
File Number(s):
CA 2010/296908
Decision under appeal
Jurisdiction:
9111
Citation:
Allianz Australia Insurance Limited v Kerr [2011] NSWSC 347
Date of Decision:
2011-04-29 00:00:00
Before:
Hislop J
File Number(s):
SC 2010/296908

HEADNOTE

[This headnote is not to be read as part of the judgment]

The respondent was injured in a motor vehicle accident on 6 March 2007. The insurer for the other driver accepted liability. The matter was referred for assessment of damages under the Motor Accidents Compensation Act 1999 (NSW) ("the Compensation Act "). On 23 June 2010 the assessor certified the quantum of damages payable and provided a statement of reasons for his assessment. The assessor certified awards for future economic loss, past gratuitous domestic assistance and future domestic assistance. The assessor assessed the award for future domestic assistance on a commercial basis on the assumption that gratuitous care would not be available in the future and that commercial assistance would be required.

On 6 September 2010 the insurer sought judicial review of the decision of the assessor by way of summons in the Common Law Division, alleging a number of errors. Hislop J dismissed the summons, finding that none of the alleged errors were made out.

The insurer sought leave to appeal to this Court from the decision of Hislop J.

The issues for determination on appeal were whether the assessor erred in:

(i) failing to comply with s 126 of the Compensation Act ;

(ii) assessing future domestic care on a commercial basis; and

(iii) failing to provide sufficient reasons for his assessment.

The Court held, granting leave to appeal in part and dismissing the appeal:

In relation to (i)

(per Basten JA, McColl and Macfarlan JA agreeing)

1. Section 126 of the Compensation Act does not preclude the award of a "buffer" for future economic loss in appropriate cases: [3], [22].

Penrith City Council v Parks [2004] NSWCA 201; Leichhardt Municipal Council v Montgomery [2005] NSWCA 432; Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99; 172 IR 453; [2008] Aust Torts Rep 81-949; Zreika v State of NSW [2009] NSWCA 99; Gulic v O'Neill [2011] NSWCA 361; The Nominal Defendant v Lane [2004] NSWCA 405 referred to, Insurance Australia Ltd (t/as NRMA Insurance) v Hutton-Potts [2010] NSWSC 1446; 57 MVR 194 disapproved.

(per McColl JA)

2. Once the minimum factual assumptions required by Compensation Act s 126 are stated, a decision-maker assessing damages for a future hypothetical scenario may bring an element of impression to bear on the assessment: [8]

3. Damages for future economic loss should not normally be awarded by way of buffer in circumstances where the evidence enables a more certain determination of the difference between the plaintiff's position before and after the injury: [9]

In relation to (ii)

(per Basten JA, McColl and Macfarlan JA agreeing)

4. In circumstances where the main provider of gratuitous assistance is not a family member it was not necessary for the assessor to make a finding that domestic assistance would be provided on a commercial basis in the future before making an award for future domestic assistance on a commercial basis: [37]-[38]

Miller v Galderisi [2009] NSWCA 353 distinguished.

In relation to (iii)

(per Basten JA, McColl and Macfarlan JA agreeing)

5. The obligation of an assessor to provide reasons is lesser than the corresponding obligation of a court. However, the assumptions relied upon for the purposes of s 126 of the Compensation Act are a necessary element of any statement of reasons. Nevertheless, the statutory obligation did not require the assessor to explain why some particular amount was chosen as opposed to another: [45], [51]

Insurance Australia Ltd (t/as NRMA Insurance) v Hutton-Potts [2010] NSWSC 1446; 57 MVR 194; Allianz Australia Insurance Ltd v Sprod [2011] NSWSC 1157; Werner v Krahe [2002] NSWCA 168; Stretenovic v Reed [2009] NSWCA 280; Leichhardt Municipal Council v Montgomery [2005] NSWCA 432; Ilic v O'Connor [2004] 2 DCLR (NSW) 249 referred to.

6. If reasons do not refer to a particular matter the inference may be drawn, absent evidence to the contrary, that the issue had not been raised for determination: [53]

Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 applied.

7. Inadequacy of reasons may constitute an error of law on the face of the record: [53]

Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372 applied.

(per Macfarlan JA)

8. In circumstances where the assessor made an intuitive assessment of the claimant's possible future loss there was no obligation for the assessor to refer to a detailed process of reasoning: [4]

Judgment

1McCOLL JA : I have read Basten JA's reasons in draft. I agree with his Honour's reasons as to the issues of past gratuitous domestic assistance, future domestic care and (subject to the following) inadequacy of reasons. I also agree with the orders Basten JA proposes. I express my reasons as to the s 126 issue as follows.

2The appellant's principal complaint was that the claims assessor committed a jurisdictional error and/or erred in law in that he did not comply with s 126 of the Motor Accidents Compensation Act 1999 (the "Act") and did not give adequate reasons for reaching his decision under that head of damages (future economic loss) in determining the quantum of the buffer he awarded the respondent. The appellant complained that Hislop J erred in relevant respects in failing to identify the s 126 error for which it contended on the part of the claims assessor.

3The appellant did not challenge the proposition that damages by way of a buffer may be awarded in determining future economic loss for the purposes of s 126 of the Act. The proposition that an award of that nature is permissible under s 126 was recognised in The Nominal Defendant v Lane [2004] NSWCA 405 (at [53] ff). As Giles JA (Ipp and Tobias JJA agreeing) said in that case (at [61]), "s 126 ... 'enshrines in legislation the method for assessing an uncertain career path that was adopted in Norris v Blake (No 2) '", referring to Professor Luntz, Assessment of Damages for Personal Injury and Death , 4 th ed (2002) LexisNexis Butterworth ([11.2.8]).

4I agree with Basten JA (at [31] - [35]) that the claims assessor set out the assumptions to the extent necessary when awarding a buffer in the s 126 context.

5The appellant's principal complaint about the $200,000 buffer was, as its counsel frequently stated, what it contended was the increasing number of awards of substantial sums by way of buffer in cases involving s 126. It also contended that even if a buffer were to be awarded, the reasons for its quantification should be expressed.

6The circumstances in which damages by way of a buffer are appropriate was summarised in Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99; (2008) 172 IR 453 (at [84]) per McColl JA (Mason P and Beazley JA agreeing), a case in which a challenge to a buffer of $120,000 failed, as follows:

"84 As to the future economic loss, it is appropriate to award damages by way of a buffer, including in a case such as this where damages are to be determined pursuant to the Civil Liability Act , when the impact of the injury upon the economic benefit from exercising earning capacity after injury is difficult to determine. In such a case, the Court still undertakes a comparison between the economic benefits the plaintiff derived from exercising earning capacity before injury and the economic benefit derived from exercising earning capacity after injury, although the difference cannot be determined otherwise than by the broad approach of a buffer: Penrith City Council v Parks [2004] NSWCA 201 (at [3] - [5]) per Giles JA; applied K'mart Australia Ltd v McCann [2004] NSWCA 283 (at [62]) per Pearlman AJA (Handley and Ipp JJA agreeing); see also Hornsby Shire Council v King [2005] NSWCA 67 (at [23]) per Ipp JA (Mason P and Brownie AJA agreeing); Leichhardt Municipal Council v Montgomery [2005] NSWCA 432 (at [33]) per Hodgson JA (McColl JA agreeing). In the latter case Mason P (at [2]) opined that 'a buffer or cushion award is usually reserved to the situation where there is a smallish risk that otherwise secure employment prospects may come to an end, in consequence of the tort-related injury, at some distant time in the future', but, with respect, the accepted wisdom appears to be that a buffer can be deployed in circumstances such as the present."

7The award of a buffer for future economic loss in circumstances "where earning capacity has unquestionably been reduced but its extent is difficult to assess" reflects the proposition that, to paraphrase, the want of precise evidence "does not necessarily result in non-recovery of damages": State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 (at [87]) per Heydon JA. It must also be taken into account, when considering the appellant's complaint about the adequacy of the claims assessor's reasons for quantifying the buffer, that the task of assessing damages for lost earning capacity is "necessarily impressionistic"; Brear v James Hardie & Co Pty Ltd [2000] NSWCA 352; (2000) 50 NSWLR 388 (at [49]) per Mason P (Spigelman CJ and Priestley JA agreeing).

8While, as Giles JA said in the Nominal Defendant v Lane (at [67]), "s 126 is presumably intended to promote intellectual rigour", the authorities recognise that, whether in the s 126 context or when applying common law principles of assessment of damages as to future hypothetical scenarios, there is a point at which, even with the application of the requisite degree of intellectual rigour, an element of impression must be involved. The claims assessor properly arrived at this point once he had made the minimum factual assumptions necessary for the s 126 exercise. The appellant has not identified any legal error in the award of the buffer.

9The foregoing should not be seen as a licence to award buffers indiscriminately. Where the evidence enables a more certain determination of the difference between the economic benefits the plaintiff derived from exercising earning capacity before injury and the economic benefit derived from exercising that capacity after injury, recourse should not ordinarily be had to the award of damages for future economic loss by way of a buffer. Each case must turn on its own facts.

10BASTEN JA : The respondent, Ms Sarah Jane Kerr, was injured in a motor vehicle accident on 6 March 2007. The insurer for the other driver accepted liability and the matter was referred for assessment of damages under the Motor Accidents Compensation Act 1999 (NSW) ("the Compensation Act ").

11On 23 June 2010 a claims assessor, Mr Alan Cowley, provided a certificate quantifying the damages payable, together with a statement of reasons for his assessment. There is no right of appeal against such an assessment under the Compensation Act , but on 6 September 2010 the insurer (the applicant in this Court) sought judicial review of the decision by summons filed in the Common Law Division. The summons claimed there were "a number of jurisdictional errors and/or errors of law on the face of the record", which it then listed without discriminating between these categories. As will be explained, such discrimination is essential under Australian law. However, the trial judge, Hislop J, found that none of the alleged errors were made out, without needing to consider the nature of the listed errors.

12The insurer has sought leave to appeal from the judgment of Hislop J. As it is desirable to clarify some aspects of the procedure adopted below, there should be a limited grant of leave. The conclusions of the primary judge were not, however, erroneous and the appeal should be dismissed.

Nature of errors alleged

13As the applicant correctly submitted, the proceedings in this Court, if leave be granted, are by way of rehearing of the proceedings in the Common Law Division: Supreme Court Act 1970 (NSW), ss 101 and 75A. That requires this Court to proceed in accordance with the powers conferred by s 69 of the Supreme Court Act , in the exercise of its judicial review jurisdiction.

14There have been suggestions in the past that the abolition of the prerogative writs and the conferral of jurisdiction to grant such relief by way of judgment or order may have removed the procedural limitations which conditioned prerogative relief: see, eg, Commissioner of Police v District Court of New South Wales (1993) 31 NSWLR 606 at 615 (Kirby P); Solution 6 Holdings Ltd v Industrial Relations Commission of NSW [2004] NSWCA 200 ; 60 NSWLR 558 at [134]-[135] (Spigelman CJ; Mason P and Handley JA expressing no view on the matter). It was not contended in this case that the traditional grounds for relief by way of certiorari did not operate; in other words, the applicant accepted it had to demonstrate at least one material error of law on the face of the "record" of the proceedings before the claims assessor, or that his assessment was infected by jurisdictional error. There was no discussion as to whether success in relation to a particular head of loss would require the whole assessment to be set aside, or only part thereof.

15Two principles of restraint are relevant for present purposes. The first is the "clear distinction" still drawn under the general law between "want of jurisdiction and the manner of its exercise": Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; 59 CLR 369 at 389 (Dixon J), recently cited with approval in Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; 237 CLR 146 at [5]. The second principle is that, whilst jurisdictional error may be established by any admissible evidence relevant for that purpose, a quashing order based on the broader concept of error of law must identify the relevant error as appearing "on the face of the record".

16Attempts to abandon the distinction between jurisdictional error and other errors of law, together with attempts to broaden the concept of "the record" were rejected by the High Court in Craig v State of South Australia [1995] HCA 58; 184 CLR 163. (Although Craig was an appeal in respect of an interlocutory judgment in the District Court of South Australia, the judicial review jurisdiction of the South Australian Supreme Court, there under consideration, shared with NSW the abolition of the writs and the conferral of power to grant remedies and relief which would otherwise have been available in the supervisory jurisdiction of the Court.) In the course of discussing the scope of the "record" in respect of an inferior court, the "expansive approach" adopted by this Court, particularly in Commissioner for Motor Transport v Kirkpatrick (1988) 13 NSWLR 368 at 389-390 (Priestley JA) was rejected. After noting the absence of authority directly in point in the High Court, Craig, at 181, stated:

"More importantly, the approach that the transcript of proceedings and the reasons for decision constitute part of 'the record' would, if accepted, go a long way towards transforming certiorari into a discretionary general appeal for error of law upon which the transcript of proceedings and the reasons for decision could be scoured and analysed in a search for some internal error."

17Following that decision, s 69 of the Supreme Court Act was amended to provide that "the face of the record includes the reasons expressed by the court or tribunal for its ultimate determination": s 69(4). Given the procedural history outlined above, it is significant that the amendment did not refer to written evidence (such as affidavits and documentary material), nor did it refer to the transcript, whether of evidence or submissions. It was assumed in this case that the reference to the reasons of a "court or tribunal" in s 69(4) applied to the reasons of a claims assessor.

18It follows that, in the present proceedings, it was appropriate for the reviewing court to consider not only the certificate given by the claims assessor, but also his statement of reasons. It was less clear, however, whether the court might properly accept as evidence and scrutinise the reports of medical and other experts and the submissions made by the parties before the assessor. In the present case, such material was admitted by the primary judge, apparently without objection. Nevertheless, if the limits of this Court's jurisdiction preclude it taking such material into account for a particular purpose, it should not do so.

19These considerations require the applicant to identify with a degree of precision which grounds are said to involve jurisdictional error and which errors of law on the face of the record. As explained by Tate JA in Easwaralingam v Director of Public Prosecutions (Vic) [2010] VSCA 353; 208 A Crim R 122 at [25], a case apparently not involving an allegation of jurisdictional error:

"[A]n application for certiorari is not the same as a general appeal for error of law, most importantly, because it falls to be determined on the basis of different material. An application for certiorari does not invite a scouring of all the evidence before the inferior court to determine whether the proper inferences were drawn from it or whether an item of evidence was overlooked."

20These principles should be applied in the analysis which follows. In the Court below, the argument and analysis appears to have ranged more widely.

(1) Assessment of future economic loss

21The first challenge raised in this Court concerned the assessment of future economic loss in an amount of $200,000, plus $22,000 for superannuation. There was no particular challenge to the superannuation component; the primary complaint was that the assessor had not complied with the statutory requirements in determining the principal amount. The assessment of this head of damages is governed by s 126 of the Compensation Act, which provides:

" 126 Future economic loss-claimant's prospects and adjustments

(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury.

(2) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury.

(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted."

22Section 126 is directed to assessments by a "court". However, as part of Ch 5 of the Compensation Act , it applies "to and in respect of the assessment of damages by a claims assessor": s 122(3). In addition to provisions in Ch 5, the claims assessor is required to make an assessment of the amount of damages "that a court would be likely to award": s 94(1)(b). Accordingly, and subject to statutory variation, the assessor is required to apply general law principles regarding quantification of damages.

23The gravamen of this aspect of the appeal (set out in grounds 1-3) was that the claims assessor erred in failing to comply with s 126 and the primary judge erred in failing to identify that error. The element of non-compliance was not identified with clarity either in the notice of appeal, or in the submissions. Sub-section (1) requires a claimant to satisfy the assessor as to certain matters. By implication, it would be erroneous for an assessor to make an "award" in respect of future economic loss without being satisfied as to relevant factors on which the award is to be based. Secondly, those factors referred to as "assumptions" must be stated: s 126(3). That means they must be identified in the reasons given by the assessor for the award.

24The applicant's submissions focused on the language of s 126, but identification of the specific non-conformity relied upon would have illustrated the insufficiency of that approach. Section 126 does not purport to codify legal principles relevant to assessment of loss of earning capacity. It does not identify factors to be taken into account in making an assessment. Nor does it appear to depart from or vary the general law principle that the compensable loss is not a loss of income but the loss of capacity to earn income which "is or may be productive of financial loss": Graham v Baker [1961] HCA 48; 106 CLR 340 at 347; State of New South Wales v Moss [2000] NSWCA 133; 54 NSWLR 536 at [71] (Heydon JA); State of New South Wales (NSW Police) v Nominal Defendant [2009] NSWCA 225 at [86] (Beazley JA; Allsop P and Macfarlan JA agreeing). Income earned prior to the accident may well be the best evidential basis to assess the earning capacity of the claimant, but for the injury, subject to adjustment for the passage of time since that income was last earned. Income earned between the accident and the trial may be (but often is not) a good indicator of current capacity. The latter may be capable of extrapolation into the future, but it will usually be necessary to consider whether, and to what extent, both pre-accident capacity and post-accident capacity might have been and might be expected to vary in the future.

25Although a claimant must establish a diminution in earning capacity resulting from the injury to obtain an award under this head, he or she is not required to identify with precision the value of that loss. In Moss , Heydon JA stated:

"[70] First, damages to compensate for that part of reduced economic capacity which will be reflected in the future are sometimes analysed as being one type of 'general damages'. Like other types of 'general damages', as Fullagar J said in Paff v Speed [[1961] HCA 14; 105 CLR 549] at 559, they are 'of their very nature, incapable of mathematical calculation and (although the expression is apt to be misleading) commonly very much 'at large'.' ...

[71] ... Evaluation of the worth of a loss of capacity to earn - of a lost chance to earn - is of its nature a more imprecise inquiry than calculation of a lost income. It rests on the hypothesis - that the plaintiff will have undiminished capacity - which has been rendered false by events. It does not depend on calculating the income from a particular career which is no longer possible, but in calculating the damage to a capacity to carry on various careers. It is an exercise in estimation of possibilities, not proof of probabilities."

26In Malec v J C Hutton Pty Ltd [1990] HCA 20; 169 CLR 638, three members of the Court (Deane, Gaudron and McHugh JJ) referred to the exercise in respect of hypothetical events, stating that "the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability": at 643. It has been submitted (though not determined) that s 126 replicates that approach: State of New South Wales (NSW Police) at [88]. If so, it appears to disregard the remarks of Brennan and Dawson JJ at 640:

"Although we agree with the general thrust of the reasoning on this point in the judgment of Deane, Gaudron and McHugh JJ, we think it undesirable for damages to be assessed on the footing of an evaluation expressed as a percentage. Damages need not be assessed by first determining an award on the footing that the hypothetical situation would have occurred and then discounting the award by a selected percentage. Damages founded on hypothetical evaluations defy precise calculation."

27In summarising a comprehensive review of the principles to be applied in this area, Heydon JA stated in Moss at [87]:

"The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters. Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility."

To the extent that this Court suggested in Nominal Defendant v Livaja [2011] NSWCA 121 at [39] that hypothetical elements should be established on the balance of probabilities, those statements were wrong and should be disregarded.

28Structural difficulties with the form of s 126 (and the more generally applicable equivalent provision, namely s 13 of the Civil Liability Act 2002 (NSW)) have been the subject of comment in numerous cases. It has been pointed out that the calculation of future economic loss depends not only upon assumptions about unimpaired future earning capacity, but also upon the extent to which earning capacity is, or is likely to be, diminished as a result of the injury. Section 126 makes no direct reference to the latter limb of the calculation, unless sub-s (3) is addressed to the broader set of assumptions and not limited to those referred to in sub-s (1).

29Further, sub-s (2) has been understood as referring, at least primarily, to the reduction commonly allowed for "vicissitudes" which, absent particular features warranting some other approach, is usually fixed at 15%. In circumstances where, for example, the employment situation of the claimant is inherently unstable, a greater percentage is allowed. In Amoud v Al Batat [2009] NSWCA 333 I explained my understanding of s 126(2) in the following terms at [25]:

"Subsection (2) requires an adjustment to an otherwise appropriate amount to take account of the possibility that "the events concerned might have occurred but for the injury". There is clearly a step between the exercise addressed in sub-s (1) and that required by sub-s (2). That step must be to identify the departure from the baseline earning capacity (calculated in accordance with sub-s (1)) caused by the injury. The third step is to calculate, as a monetary amount, the present value of the difference between the baseline and the assessment of post-injury earning capacity. The diminution caused by the tortious injury will provide a figure for assessing the appropriate award of damages. It may not be the final figure, because the diminution caused by the accident might have occurred, in part or in whole, in any event, within the working life of the claimant. Some allowance must be made for that circumstance: it is that allowance which constitutes the adjustment required by sub-s (2)."

30The lacuna in s 126 may have occurred because the drafter was following the reasoning in Malec . The adjustment which was required in that case was to take account of the possibility that factors unconnected with the injury might have resulted in the same disability in any event: at 645. That problem aside, there is a point (which may be differently assessed by different courts) beyond which the selection of a figure for economic loss is so fraught with uncertainty that the preferred course is to award a lump sum as a "buffer", without engaging in an artificial exercise of commencing with a precise figure, and reducing it by a precise percentage. The suggestion that such a commonsense approach was precluded by legislation in the form of s 126 was rejected, as noted by the trial judge, in Penrith City Council v Parks [2004] NSWCA 201, by Giles JA at [3]-[5]. Since then, a similar approach has been adopted in at least 20 cases in this Court: see, eg, Leichhardt Municipal Council v Montgomery [2005] NSWCA 432 at [33] (Hodgson JA; Mason P and McColl JA agreeing); Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99; 172 IR 453; [2008] Aust Torts Rep 81-949, at [84] (McColl JA; Mason P and Beazley JA agreeing); Zreika v State of NSW [2009] NSWCA 99 at [29] (Ipp JA; Beazley and Macfarlan JJA agreeing); Gulic v O'Neill [2011] NSWCA 361 at [67]-[69] (Whealy JA; Campbell JA and James J agreeing). It was not submitted that in principle such a course was not open to the assessor, acting in conformity with s 126. Nor was it contended that s 126 varies general law principles in any material respect. Such a contention would involve a challenge to the reasoning in Penrith City Council at, for example, [58] (McClellan AJA).

31As the applicant correctly stated, a combination of sub-ss (1) and (3) required the assessor to identify and state the assumptions about future earning capacity and other events on which the award was based. In Livaja , the Court noted at [41]:

"The assumptions or events upon which a baseline may commonly be calculated include:

(a) identification of the skills, training and experience of the plaintiff, as at the date of the accident;
(b) the work he or she was undertaking immediately prior to the accident;
(c) the likelihood that he or she would have continued in such employment, but for the accident;
(d) the possibility that he or she might have obtained promotion or other benefits, but for the accident;
(e) the age to which he or she was likely to have worked in that employment, and
(f) the possibility that the employment would not have been continuous."

32However, the somewhat glib statement in the written submissions that there was "no evidence s 126 ... has been complied with" was without substance. Most of these factors were discussed by the assessor. At the outset of his reasons, the assessor identified, relevantly with respect to future economic loss, two issues which arose:

"7. ...

a. But for the accident would the claimant be able to continue in her career as a nursing assistant notwithstanding her pre-existing psychiatric vulnerability and if so for how long and what is her loss?

b. Does the claimant have a residual capacity? Given that she is currently working the answer must be 'yes' but what is the likelihood of her continuing in that job, or jobs for the balance of her working life, and even if she did is there still a loss?"

33In the course of setting out the claimant's "background" the assessor noted psychiatric disabilities which she had suffered since a young age, her training, her work experience and the injuries suffered in the accident. After reviewing the various reports on her psychiatric disability, he expressed the opinion that "despite her pre-existing vulnerability the claimant's psychiatric impairment has been noticeably exacerbated by the subject accident": par 14. He noted that she was continuing in employment, although in a job she no longer found satisfying and which there was "a real possibility" of losing. Under the heading "Future Economic Loss" the assessor stated:

"In my view she has satisfied me that but for the accident she would have had continual work, albeit that from time to time she would have needed to change jobs and have had time off work. Thus she has satisfied s 126 of the Act. She is entitled to some amount for future economic loss but I accept the Insurer's submission that it should be by way of a buffer rather than a concise [precise?] calculation, given the claimant's concession of pre-existing psychological issues, her pre-existing work history and her current capacity to work."

34The assessor then referred to the calculations of each party and accepted the figure of $200,000 as the appropriate sum, being $180,000 more than the insurer suggested was appropriate and $400,000 less than the claimant sought.

35The only factor which was not stated, in conformity with s 126(3), was "the percentage possibility" that the events concerned might have occurred but for the injury: s 126(2). However, as explained by Giles JA in Penrith City Council at [5], adopting "the broad approach of a buffer" means that there is no question of a percentage adjustment, so that for the purposes of s 126(2), the adjustment is nil: he further held that the failure to state that fact did not constitute a material error: at [6]. There was, accordingly, no material error in the approach adopted by the assessor in the present case.

36The applicant also contended, almost in passing, that the assessor's statement that the claimant "has satisfied s 126 of the Act" was inappropriate and suggested a misunderstanding of the statutory scheme. However, that is not so; part of the purpose of s 126(1) is to impose an onus on the claimant to satisfy the court of certain matters (or, to reflect a general law principle to the same effect). The statement by the assessor indicated that she (the claimant) had, to the extent identified, satisfied him as to the assumptions upon which he needed to rely. There might have been an issue raised as to whether there were other factors which should have been found for there to be a proper assessment under s 126 as to future economic loss. However, that would have raised a different kind of challenge and not one reflected in the grounds of appeal or otherwise relied on in the present case.

(2) Past gratuitous domestic assistance

37Secondly, a challenge was raised to the assessment of compensation for gratuitous domestic assistance provided in the past. The assessor allowed an amount of $11,000 in this respect for what were described as "two broken periods", by which he may have meant two separate periods. The sum for the first period was identified as $5,544, as to which there is no challenge. It follows that the sum allowed for the second period was $5,456. Again, the ground of challenge was a failure to comply with the requirements of the Compensation Act . In particular, the Compensation Act precluded an award of compensation for gratuitous domestic assistance unless the services have been provided "for at least 6 hours per week, and ... for a period of at least 6 consecutive months": s 128(3).

38The assessor accepted the evidence of an occupational therapist as supporting a calculation based on six hours per week at $22 per hour for the period from the date of the accident (6 March 2007) to 1 January 2008, a period of some 42 weeks. Although the assessor expressed himself hypothetically in his reasons saying that "if I allowed" the period described, "that comes to a sum of $5,544", it should be inferred that he did accept that calculation: at [27]. That understanding appears to have been accepted by the applicant in not challenging that amount.

39The second period ran from 1 January 2008 until the date the matter was heard by the assessor, namely 17 June 2010. The evidence supporting the claim was that of an occupational therapist and that of a friend who provided services during parts of the relevant periods. The evidence of the occupational therapist did not support an entitlement at any time during the second period. The friend did not provide assistance at the rate of six hours per week until May/June 2009. Thereafter he claimed to provide about two-three hours of assistance per day. The assessor noted this material and then stated:

"In all of these circumstances it is obviously hard to be precise about what sort of assistance Ms Kerr has received and whether it exceeded the threshold or not."

40The applicant says, with some justification, that this language was inconsistent with a satisfaction on the balance of probabilities that assistance had been provided at the requisite threshold level in the second period. However, after reviewing the whole of the reasons of the assessor in respect of this aspect of the claim, the primary judge was satisfied that the assessor "was mindful of the applicable threshold and the need to meet it", that there was material available to support such a finding and that there was an "implicit finding that the statutory test had been relevantly complied with": at [37]-[38]. He therefore rejected the challenge.

41While the reasoning of the assessor in this respect left something to be desired in terms of clarity, the reasoning of the primary judge was by no means clearly wrong. Further, the amount in issue is of the order of $5,500 in an overall award of $477,000. Finally, the challenge raises no issue of general principle and may not even raise an error of law. In the circumstances, the appropriate course is to refuse leave to appeal in respect of this ground.

(3) Future domestic assistance

42The third issue raised on the appeal related to the manner in which the assessor dealt with a claim for future domestic assistance, assessed on a commercial basis, in an amount of $78,078.

43The assessor accepted that the claimant required two hours of cleaning per week inside her home and two hours for external work, making a total of four hours per week. Making allowance for her pre-existing disabilities, the assessor allowed two hours per week at the commercial rate of $38.50, applying the appropriate multiplier to give a current value.

44The complaint raised by the applicant is not concerned with the hours allowed, but with the assumption that, for the future, gratuitous care would not be available and commercial assistance would be required.

45Before the primary judge, the applicant submitted that the reasoning in Miller v Galderisi [2009] NSWCA 353 required the assessor to be satisfied that domestic assistance would, on the balance of probabilities, be obtained on a commercial basis in the future and not make an award "because there is a remote, though not entirely fanciful, chance of the need for commercial domestic assistance in the future": at [24]. No such finding was made, nor was the issue addressed by the assessor.

46As the respondent correctly pointed out, the principle derived from Miller must be seen in its factual context. In that case the claim for commercial assistance was allowed at trial in circumstances where the claimant was obtaining assistance from her spouse and members of her family. It is possible to envisage circumstances in which family members (through age or departure from the family home) may no longer be able or available to provide such assistance. That would provide a sound basis for an award of compensation for commercial assistance, if those circumstances were properly established, but they were not established in Miller . In the present case, no such presumption of continuity arose: the main provider of gratuitous assistance, Mr Hillard, was a long-term friend, but not a family member. There was no relevant legal error affecting this aspect of the assessment.

(4) Inadequacy of reasons

47It is not unfair to say that the applicant vacillated as to the extent to which it sought to challenge the reasons provided by the assessor for his certificate. There is no doubt that, in the summons commencing proceedings in the Common Law Division, the applicant complained of the inadequacy of the reasons of the assessor in a number of respects. The primary judge dealt with the obligation to state reasons at [10]-[13].

48In the draft notice of appeal in this Court the grounds in respect of the award for past domestic assistance included a complaint in relation to the finding of the primary judge that the assessor's reasons were sufficient: ground 7. The additional ground of challenge does not warrant a grant of leave to appeal in this respect, given the conclusion noted above as to why leave should be refused in respect of the substantive challenge. Nor did the grounds of appeal raise a complaint in respect of inadequate reasons in relation to the third matter, dealing with the provision of future domestic assistance on a commercial basis.

49By way of contrast, the written submissions for the applicant identified as an issue in the proposed appeal that "no lawful reasons were provided" by the assessor in respect of any of the matters raised in the draft notice of appeal. That gave rise to a notice of contention on behalf of the claimant asserting that a failure to give adequate reasons would not invalidate the assessment. However, in seeking leave to rely upon the notice (which was not served in compliance with the Uniform Civil Procedure Rules 2005 (NSW), r 51.40) counsel said that the matter was relied upon by way of a formal submission, on the understanding that such a ground could not succeed on the current state of authority in this Court.

50In respect of future economic loss, the reasoning was said to be inadequate because it was impossible to know why the assessor chose an amount of $200,000, rather than $50,000, $100,000 or $300,000. This challenge having been raised, it should be addressed and determined.

51The inquiry must commence with identification of the obligation on the assessor to provide reasons. The obligation may be found in two provisions of the Compensation Act . First, the Act says that the assessor "is to attach a brief statement to the certificate, setting out the assessor's reasons for the assessment": s 94(5). Further, the Compensation Act provides that assessments are "subject to relevant provisions of MAA Claims Assessment Guidelines relating to those assessments": s 106(1). Those Guidelines, issued pursuant to s 69(1), must be "for or with respect to procedures for the assessment of claims under Part 4.4 and associated matters". The Court was provided with a copy of the Guidelines which, it may be assumed, were in force at the time of the assessment. Relevantly, cl 18.4 provides:

"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 led 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."

52There is some degree of ambiguity in this guideline. The last sub-clause appears to apply to the certificate and not to the reasons. Further, it is unclear as to whether the requirements of the first three sub-clauses are additional obligations, potentially going beyond those imposed by s 94(5). If that were so, there might be an issue as to their validity. The possibility that such an inference should be drawn may be derived from cl 18.6 which states:

"The Assessor may with the consent of both parties provide reasons orally at the Assessment Conference provided that, in accordance with section 94(4) and (5), a certificate is issued with a brief written statement summarising those reasons."

53The issue need not be pursued because the respondent accepted that, subject to the formal reservation noted above, the assessor was obliged to give reasons which accorded with cl 18.4 of the Guidelines. In Insurance Australia Ltd trading as NRMA Insurance v Helou [2008] NSWCA 240; 51 MVR 414, the Court made some comments on the scope of the obligation of an assessor to give reasons, but its attention may not have been drawn to the requirements of cl 18.4 of the Guidelines: see [60]-[62]. Although Helou did not state that the obligation was a lesser one than that imposed on courts, that conclusion should be accepted: cf Insurance Australia Ltd (t/as NRMA Insurance) v Hutton-Potts [2010] NSWSC 1446; 57 MVR 194 at [32] (Schmidt J); Allianz Australia Insurance Ltd v Sprod [2011] NSWSC 1157 at [20] (Hoeben J). It may also be accepted that the obligation to state the assumptions relied upon for the purposes of s 126 creates a necessary element of any statement of reasons: Hutton-Potts at [33]. The limitations of the obligation to give reasons must be kept firmly in mind by a judicial officer accustomed to a higher obligation.

54In dealing with the obligation to give reasons imposed on the Refugee Review Tribunal by s 430 of the Migration Act 1958 (Cth) (which, in so far as it required the Tribunal to refer to the evidence or other material on which findings of fact were based, went further than the regime for assessors), Gleeson CJ stated in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323:

[5] When the Tribunal prepares a written statement of its reasons for decision in a given case, that statement will have been prepared by the Tribunal, and will be understood by a reader, including a judge reviewing the Tribunal's decision, in the light of the statutory requirements contained in s 430. The Tribunal is required, in setting out its reasons for decision, to set out 'the findings on any material questions of fact'. If it does not set out a finding on some question of fact, that will indicate that it made no finding on that matter; and that, in turn, may indicate that the Tribunal did not consider the matter to be material. ...

...
[9] The major difficulty for the respondents, however, lies in the language of s 430. There is nothing in that language which imposes a requirement to make a finding on every question of fact which is regarded by the Federal Court, on judicial review of the Tribunal's decision, as being material."

55A similar point was made by McHugh, Gummow and Hayne JJ in Yusuf at [73]-[75]; see also Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816 at [129] (Hayne J).

56The issue in the present case was whether, the assessor having concluded (appropriately in the circumstances) that an amount should be awarded by way of a "buffer", it was necessary for him to provide some further explanation as to how he reached the precise sum adopted in the award. No complaint was made that the sum was outside an appropriate range, so as to demonstrate error of law for that reason. The question was thus whether, the sum being within the appropriate range, the assessor was required to explain why he selected one figure rather than another. Nor was there any attempt to identify the appropriate range. Before the assessor, the applicant asserted that a sum of $20,000 would have been appropriate although, in the circumstances, such a figure might have been seen as dismissive. On the other hand, the claimant sought an amount of $600,000. Perhaps, if the range had been narrower, the applicant would not have raised the present issue: although the matter was not addressed in these terms, it may perhaps be assumed in favour of the respondent that the available range was itself broad.

57Nevertheless, it does not follow that some explanation is required in adopting a particular point in the range. On a criminal appeal, a complaint that a sentencing judge has not explained the precise basis upon which a specific sentence has been selected is unavailable. The appropriate ground is manifest inadequacy or manifest excess. As explained by Gleeson CJ and Hayne J in Dinsdale v The Queen [2000] HCA 54; 202 CLR 321 at [9], manifest inadequacy "was a ground which did not require, or even admit of, expansive elaboration of a process of reasoning which leads to its acceptance or rejection". There is a passage to similar effect, in relation to judicial review of an administrative decision, in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56; 216 CLR 212 at [40]. Palme involved a determination by the Minister that he "reasonably suspected the prosecutor did not pass the character test and that the prosecutor had not satisfied him that he passed that test". Three members of the High Court, referring to the complaint that the material supplied to the prosecutor did not set out the reasons for the decision, noted:

"There are some issues for decision which are of such a nature that, as Kitto J put it [in In Re Wolanski's Registered Design (1953) 88 CLR 278 at 281], with reference to the statements by Lord Herschell and Eve J:

'[I]t is not to be expected that [the judge] will be able, at any rate satisfactorily to the litigants or to one of the litigants, to indicate in detail the grounds which have led him to the conclusion.'"

58The inherent imprecision in assessing the value of future economic loss suffered by relatives in a fatal accident case was discussed in De Sales v Ingrilli [2002] HCA 52; 212 CLR 338, especially at [68] and [79] by Gaudron, Gummow and HayneJJ. In Saville v Health Care Complaints Commission [2006] NSWCA 298 I suggested at [52] (Handley and Tobias JJA agreeing), that "matters of evaluation and judgment are not readily explained in rational terms" and that "[v]arious imprecise and amorphous, but relevant, considerations may need to be weighed in the balance in determining where, across a range of possibilities, the appropriate result should be found". After reference to the passage from Palme set out above, the reasoning continued:

"The purpose underlying the obligation to give reasons is in part the discipline of rationality, being the antithesis of arbitrariness, which follows from the exercise of justifying a conclusion, together with the transparency of decision-making, which permits the parties and the public to understand the result reached. However, this purpose must be given practical effect in particular circumstances."

59While is it sometimes, but not always, true that lengthy reasons will give greater assistance and understanding than brief reasons, the obligation on the assessor was not to give lengthy reasons. The explanation provided was sufficient to warrant the award of a significant sum of money for future economic loss. The obligation imposed by statute did not require him to explain why some particular amount was chosen as opposed to another. Even in circumstances where this Court has intervened on an appeal by way of rehearing, the amount chosen has been identified with little explanation as to how the figure was selected: see, eg, Werner v Krahe [2002] NSWCA 168 at [29] (Foster AJA, Hodgson JA agreeing); Sretenovic v Reed [2009] NSWCA 280 at [86] (McColl JA, Beazley JA agreeing); see also, in rejecting a challenge, Leichhardt Municipal Council at [34] and, in assessing a buffer, Ilic v O'Connor [2004] 2 DCLR (NSW) 249 at 264-265 (Patten DCJ).

60The applicant has not demonstrated error of law in this respect.

61With respect to the separate challenge based on inadequacy of reasons in awarding an amount for future domestic assistance, at commercial rates, a somewhat different analysis applies. Reasons are designed to dispose of issues before the Tribunal. Adapting the analysis of Gleeson CJ in respect of fact-finding in Yusuf , if the reasons do not refer to a particular matter the inference may readily be drawn, absent evidence to the contrary, that the issue had not been raised for determination. In Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372 at [130], I suggested that because the record included the reasons of the tribunal, inadequacy will inevitably be an error of law on the face of the record. In other words, if the reasons have failed to deal with some matter which should have been dealt with, a different kind of error may be revealed. Just as the assessor was not required to give reasons for findings he did not make, so he was not required to give reasons for issues he did not determine.

62As explained above, the range of challenges on a judicial review application is limited to errors of law on the face of the record and jurisdictional error. In the case of the latter, the kind of error is more limited, but the scope of inquiry is broader. In principle, in order to go beyond the face of the record, it would be necessary to identify a jurisdictional error. That was not an exercise which the applicant undertook. It is not a task which this Court should undertake in that circumstance. In Hutton-Potts , at [41], Schmidt J thought that a failure to comply with s 126, at least in some respects, might result in jurisdictional error: in support of that proposition she referred to the judgment of Hidden J in Allianz Australia Insurance Ltd v Ward [2010] NSWSC 720 at [53]. A reading of that passage does not indicate clearly that Hidden J was identifying a jurisdictional error, or, if he had done so, which error he had in mind. Such conclusions are contestable: if correct they turn on questions of statutory construction: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [93]. As the respondent correctly submitted, that requires attention to provisions such as s 123(1) and (3) of the Compensation Act .

63There is nothing on the face of the record which demonstrated that an issue was raised requiring the assessor to make a finding in respect of the likelihood of assistance being provided on a commercial basis. (It is common ground that he did not make such a finding.) For that to be required, he would have had to identify a claim in those terms (which he did) and a challenge to that aspect of the claim (to which he made no reference). Therefore, there cannot be a complaint of failure to give reasons; the only theoretically available ground was that he failed to deal with an issue which had been presented for resolution by the parties.

64Despite these difficulties, the applicant did seek to suggest that there was such an issue which had not been determined. The Court was taken to the written submissions for the applicant before the assessor. They demonstrate the contrary: the objection taken, and the only objection taken, was that there was no material supporting any need for future domestic assistance. Nothing was said in those submissions as to the basis on which it should be assessed if a need were accepted.

Conclusions

65There should be a grant of leave to appeal to raise the first, third and fourth grounds dealt with above, subject to the applicant filing a notice of appeal in the form of the draft notice in the application book. Leave should be refused in respect of the second ground. In respect of grounds 1, 3 and 4 the appeal should be dismissed. The applicant must pay the respondent's costs of the proceedings in this Court.

66MACFARLAN JA : I agree with the judgment of Basten JA but add the following observations in relation to the buffer that the assessor awarded in respect of future economic loss.

67It has been accepted since Penrith City Council v Parks [2004] NSWCA 201 that it is not inconsistent with s 13 of the Civil Liability Act 2002 or the similarly worded s 126 of the Motor Accidents Compensation Act 1999 for a buffer to be awarded to compensate an injured person for the possibility that he or she may suffer economic loss in the future as a result of a loss of capacity to earn income. In Leichhardt Municipal Council v Montgomery [2005] NSWCA 432, Mason P spoke of such an award being usually reserved for "the situation where there is a smallish risk that otherwise secure employment prospects may come to an end, in consequence of the tort-related injury, at some distant time in the future" (at [2]).

68In the present case the buffer was of a significant size ($200,000). The applicant did not contend that the amount lay outside the permissible range or that the present case was not an appropriate one for the award of a buffer. Whilst the factors that led the assessor to award a buffer are apparent from his Reasons for Decision, he did not state why the buffer should be $200,000, rather than some other figure. The applicant however submitted that the assessor was required to do so to fulfil his obligations to give reasons for his decision under s 126 of the Motor Accidents Compensation Act 1999 and clause 18.4 of the Motor Accidents Authority (MAA) Claims Assessment Guidelines.

69I do not consider that it can be inferred that the assessor undertook a process of calculation in order to arrive at $200,000. More likely the figure represented his intuitive assessment of the claimant's possible future loss. In those circumstances there was nothing more that the assessor was required to say in his Reasons for Decision.

70If however he had arrived at the figure by, for example, allowing a notional sum for each year of the remainder of the claimant's working life, he should have referred to that reasoning process in his Reasons. As there is no basis for knowing, or inferring, that the assessor determined the buffer in such a manner, the applicant's argument that the assessor's reasons on this topic were deficient must fail. It cannot be concluded that there were any additional reasons to disclose.

71In other cases it may be able to be inferred (from the size of the award or other factors) that a process of reasoning, rather than simple intuition, led to the determination of the size of a buffer. If that reasoning is not identified, the outcome of such cases is likely to be different from that of the present.

72This is not to discourage adoption of such a process of reasoning. On the contrary, awards in respect of future economic loss should wherever possible result from evidence-based calculations or estimates that are exposed in the decision-maker's reasons. The award of a buffer that is not supported by an explanation of how and why the amount was arrived at should remain a last resort where no alternative is available.

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Amendments

18 October 2012 - Correcting typographical errors
Amended paragraphs: 57

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Decision last updated: 18 October 2012