Listen
NSW Crest

Court of Appeal
Supreme Court
New South Wales

Medium Neutral Citation:
Allianz Australia Insurance Ltd v Sprod [2012] NSWCA 281
Hearing dates:
14 August 2012
Decision date:
12 September 2012
Before:
Campbell JA (at [1]; Barrett JA (at [2]); Sackville AJA (at [44 ])
Decision:

1. Appeal allowed.

2. Judgment of 29 September 2011 below set aside.

3. In lieu thereof, make orders as follows:

(1) Order that the assessment of claims assessor John Tancred the subject of his certificate of assessment dated 11 January 2011 be quashed and the certificate be set aside.

(2) Order that the respondents be restrained from acting on or taking any further step in reliance on the said assessment or certificate.

(3) Remit the claims assessment in respect of Michael Sprod to the Motor Accidents Authority of New South Wales for allocation to a claims assessor for determination according to law.

4. Order that Michael Sprod pay the costs of Allianz Australia Insurance Ltd of the proceedings below and of the appeal.

5. Grant to Michael Sprod an indemnity certificate under the Suitors Fund Act 1951 in respect of the appeal.

[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 - claim for prerogative relief - motor accidents compensation scheme - assessment by claims assessor of the amount that a court would be likely to award as damages - statutory obligation of assessor to be satisfied as to assumptions as to future earning capacity on which award is based - statutory obligation of assessor to state the assumptions - insurer alleges non-compliancce by assessor with these obligations - challenge to primary judge's decision that there had been compliance - where assessor embarker on process of calculation as distinct from awarding "buffer" - where award based on lost future earnings of $250 per week for 18.3 years - no statement of basis for assumption of either 18.3 years or $250 - where $250 apparently based on earnings for one year of abnormally high earnings - error of law on part of assessor established.
Legislation Cited:
Civil Liability Act 2002, s 13
Motor Accidents Compensation Act 1999, Part 4.4, ss 94, 106(1), 122,126,
Supreme Court Act 1970, s 69
Cases Cited:
Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13
Burton v Brooks [2011] NSWCA 175
Leichhardt Municipal Council v Montgomery [2005] NSWCA 432
Nominal Defendant v Livaja [2011] NSWCA 121
Penrith City Council v Parks [2004] NSWCA 201
Category:
Principal judgment
Parties:
Allianz Australia Insurance Limited - Appellant
Michael Sprod - First Respondent
John Tancred, Claims Assessor - Second Respondent
Motor Accidents Authority of New South Wales - Third Respondent
Representation:
M A Robinson SC - Appellant
M A J Daley - First Respondent
TL Lawyers - Appellant
Brydens Law Office - First Respondent
File Number(s):
2011/90668
Decision under appeal
Citation:
Alliance Australia Insurance Ltd v Sprod [2011] NSWSC 1157
Date of Decision:
2011-09-29 00:00:00
Before:
Hoeben J
File Number(s):
2011/90688

Judgment

1CAMPBELL JA: I agree with Barrett JA.

2BARRETT JA: This is an appeal from a decision of a judge of the Common Law Division dismissing an application under s 69 of the Supreme Court Act 1970 for relief in the nature of certiorari in respect of a decision of a claims assessor under the Motor Accidents Compensation Act 1999.

3The plaintiff below was Allianz Australia Insurance Ltd ("Allianz"). It is the present appellant. The assessment challenged in the proceedings before the primary judge was an assessment under Part 4.4 of the Motor Accidents Compensation Act of damages relating to injury to Mr Sprod caused by the fault of the driver of a motor vehicle. Mr Sprod is the first respondent. The other respondents (the claims assessor and the Motor Accidents Authority of New South Wales) filed submitting appearances and took no part in the proceedings, either at first instance or on appeal.

4The challenge to the assessor's decision relates to the assessment of future economic loss. The relevant part of the assessor's decision was set out in full in the judgment of the primary judge, as follows:

" The extent of the Claimant's shoulder disability
30. The Claimant says in his statement: "My current treatment involves avoiding activities that I know cause me increasing problems in my left shoulder. I take painkillers such as Nurofen when the pain is more severe. Being on light duties I'm largely able to avoid aggravating my injuries too much"
31. As indicated in paragraph 24, the Claimant has permanent lifting restrictions.
32. The Claimant says he cannot do the heavier handyman tasks in and around the home. He says he can mow but it hurts. "I pay for it. It wears me down". He has difficulty painting and is paying his sister to do some painting at present.
Assessment of Damages:
...
34. Past economic loss. The claim is based on lost over time of $165 per week. To date that amounts to approximately $23,000. The claimant, because of a benevolent employer and his own work ethic, had no time off work as a result of the motor accident. In his statement he says that until February 2010 he was unable to resume any Saturday over time. He also says that from February 2010 up until he made his statement in May 2010, he worked only two Saturdays.
35. The Insurer concedes that there may have been a loss of overtime, but says that any such loss was as a result of the November 2007 accident.
36. In his submissions, Mr Delfendahl summarises the earnings of the Claimant. His earnings went up by approximately $4,500 net in the year prior to his motor accident and then down by $1,500 in the year of the accident. They went up slightly the next year. In the most recent financial year the Claimant's net income has jumped by about $16,000 to approximately $1,000 net per week.
37. The Claimant explains this by saying that he has been given overtime lately, because they are very short staffed at work. If the Claimant worked only two Saturdays overtime until May 2010, it is hard to see how he could have earned $16,000 of overtime by June 2010. I believe there is some other innocent explanation for the large increase.
38. I take account of s124 and of the fact that the Claimant is a very impressive person. Bearing in mind the reduced income in the year after the accident, when, absent the accident, one might have expected an increase and the Claimant's insistence that he did suffer a loss of overtime, I allow a buffer for past loss of earning of $10,000 including superannuation.
...
40. Future economic loss . The Claimant is concerned about the possibility of losing his job. He explained that he is the only light duties worker in the area of the factory where he works. He is concerned that a pallet system will be introduced at work. This will leave very little for him to do and, I infer, increase his chances of losing his job. The Claimant explained to me in answer to Ms Allan's questions that forklift driving is not a fulltime job. Workers driving forklifts have to do physical tasks as well.
41. I am satisfied that there is a chance of the Claimant losing his present job, despite his benevolent employer and that he will then be at a disadvantage on the open labour market. His lifting restriction will make it difficult to obtain a manual job, which is all he has ever done.
42. Bearing in mind the Claimant's present high earnings I am satisfied that it is appropriate to allow $250 net per week for future economic loss. The calculation is $250 x 632 (18.3 years) x .85 = $134,300."

5The principal submission of Allianz before the primary judge was that the assessor fell into jurisdictional error or error of law on the face of the record because of failure to comply with certain statutory requirements associated with assessment of damages for economic loss, being requirements imposed by s 126 of the Motor Accidents Compensation Act.

6That submission will be better understood against the background of a brief description of the statutory regime.

7The scheme created by the Motor Accidents Compensation Act is a scheme for the provision, through insurance, of compensation for compensable injury suffered in motor accidents. There is an emphasis on the early and efficient resolution of claims. To that end, provision is made for claims assessment and resolution by claims assessors appointed under the Act.

8Where, as in the present case, liability is admitted by an insurer, the task of the claims assessor is, under s 94(1)(b) (a provision within Part 4.4):

"to make an assessment of ... the amount of damages for that liability (being the amount of damages that a court would be likely to award)".

9Such an assessment is to be made "having regard to such information as is conveniently available to the claims assessor" (s 94(2)) and must "specify an amount of damages" (s 94(3)). Sections 94(4) and (5) are in these terms:

"(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."

10Because s 94(1)(b) requires an assessor to assess "the amount of damages that a court would be likely to award", it is necessary to have regard to Chapter 5 of the Act which applies to the award of damages by a court for death or injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle (s 122(1)). By virtue of s 122(3), Chapter 5 applies to and in respect of an assessment by a claims assessor "in the same way as it applies to and in respect of an award of damages by a court". This reinforces the s 94(1)(b) requirement.

11Among the provisions in Chapter 5 is s 126, as follows:

"(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."

12Section 106(1) of the Motor Accidents Compensation Act provides:

"Claims assessments under this Part are subject to relevant provisions of MAA Claims Assessment Guidelines relating to those assessments."

13Section 106(1) is within Part 4.4, as is s 94(1)(b). An assessment of the kind referred to in the latter provision is accordingly "subject to" relevant provisions of the "MAA Claims Assessment Guidelines", which are guidelines issued by the Motor Accident Authority of New South Wales in exercise of a power created by s 69(1) of the Act. Pertinent provisions of those guidelines are as follows:

"Assessor's role
...
16.3 The Assessor is to act with as little formality as the circumstances of the matter permit and according to equity, good conscience and the substantial merits of the matter without regard to technicalities and legal forms.
16.4 The Assessor is to take into account the objects of the Act and the objects of CARS at all times.
16.5 The Assessor is to ensure that relevant material is available so as to enable all of the relevant facts in issue to be determined.
...
16.12 When undertaking an assessment and making an assessment of the amount of damages for the claim under s94(1), the Assessor is to assess damages in accordance with Chapter 5 of the Act in the same way in which a Court is required to assess damages.
...
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 s94, the Assessor must specify an amount of damages and the manner of determining that amount."

14Allianz submitted before the primary judge that, in relation to the assessment of Mr Sprod's injury, the claims assessor failed to comply with s 126 of the Motor Accidents Compensation Act in the following ways:

"(a) There was no reference to s126 or to its terms or to its tests.
(b) When he made an award for future economic loss, the assessor failed in accordance with s126(3) to state the assumptions on which the award was in fact based.
(c) There was no statement by the assessor that he had been "satisfied" as to any assumptions.
(d) There was no logical probative evidence before the assessor to justify the result which he reached.
(e) There was no statement by the assessor in respect of the following matters:
(i) What chance was there of the claimant losing his current job.
(ii) When would the claimant likely lose his current job.
(iii) When the claimant did lose his current job, what kind of job would he be able to obtain in the manual labour market and also in the forklift driving market for which he was suitably qualified and experienced.
(f) No reason was provided by the assessor for his choice of a figure of $250 net per week for the future economic loss calculations over 18.3 years."

15Allianz accepted before the primary judge that implicit in its submissions was the proposition that the reasons of an assessor should be tested in the same way as those of a judge deciding the same issue.

16The primary judge (at [29] to [31]) stated and commented upon the central submission of counsel for Allianz concerning non-compliance by the claims assessor with s 126:

29. The plaintiff submitted, without explaining why, that the approach of the claims assessor to future economic loss was not to be treated as an award in the nature of a buffer, but as a calculation based on precise figures. On that approach, the plaintiff submitted, there was no basis for those figures in the evidence and no compliance with the requirements of s126 of the Act.
30. I do not see why the approach of the claims assessor to the award of future economic loss should not be treated as the award of a buffer. It is true that he did not specifically refer to a buffer (although he did so in relation to past economic loss). Nevertheless, his methodology and approach is the same as that used in the buffer cases. The only difference is that instead of specifying a lump sum, he specified a percentage of the claimant's earnings, by reference to which he calculated a lump sum.
31. The failure of the claims assessor to specifically mention the word "buffer" when dealing with future economic loss is not decisive. This is particularly so if the effect of what he did was to award a buffer. This is clearly what the claims assessor did. I can see no difference between a claims assessor saying "I award a lump sum of $134,300 by way of a buffer" and the way in which the claims assessor expressed himself in this case by using as his starting point a weekly loss of $250 which he then converted to a lump sum.
32. If this is a correct characterisation of what the claims assessor did, then there has been compliance with s126 of the Act which allows for a buffer to be awarded for future economic loss."

17Then, after noting that s 126 was relevantly similar to s 13 of the Civil Liability Act 2002, the primary judge gave attention to a number of cases under that provision dealing with the award of a "buffer". He referred, in particular, to the decision of this Court in Penrith City Council v Parks [2004] NSWCA 201 and to observations of Giles JA as follows (at [3], [5] and [6]):

"3. A claimant's entitlement to damages for future economic loss, in concept for loss of earning capacity ( Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 4; Husher v Husher (1999) 197 CLR 138 at 143), involves a comparison between the economic benefit to the claimant from exercising earning capacity before injury and the economic benefit from exercising earning capacity after injury. I agree that s 13(1) appears to address the former.
...
5. I consider that it is still open to assess damages by way of a so-called "buffer". The occasion for a buffer is when the impact of the injury upon the economic benefit from exercising earning capacity after injury is difficult to determine. There is still a comparison between the economic benefits, although the difference cannot be determined otherwise than by the broad approach of a buffer. Section 13(1) can be fulfilled, and the assumptions as to exercising earning capacity before injury can be stated. Having determined damages for future economic loss by way of a buffer, because of the broad approach there is no question of percentage adjustment, and so in the application of s 13(2) the percentage adjustment is nil.

6. The trial judge's error was that he did not state that he made a nil adjustment. It is of no significance. The damages at which he arrived were well within the range available to him."

18The judge also quoted from the judgment of McClellan CJ at CL in the same case (at [58]):

"58. With respect to an award for future economic loss in the nature of a buffer, I doubt whether the section has any relevant impact. Although the section must be complied with, it will not lead to a conclusion which has any relevance to such an award. The court must determine the claimant's "likely future circumstances" and identify the pre-injury percentage possibility of those events occurring, but the compensation awarded is not otherwise confined. A modest award as compensation for the chance that a claimant may be disadvantaged in the future because of the injury is not precluded by the section. All that the section is attempting to do is identify the pre-injury circumstances upon which any award of damages may be based, but it does not dictate the outcome in the event that only part of a claimant's earning capacity has been affected by the injury."

19Reference was then made in the judgment to other cases in which a "buffer" had been awarded for future economic loss and the question of compliance with s 13 of the Civil Liability Act had been discussed, specifically Leichhardt Municipal Council v Montgomery [2005] NSWCA 432 and Burton v Brooks [2011] NSWCA 175.

20At [42], the primary judge stated a conclusion with respect to the statement of reasons of the assessor, compared with like statements of judges in the cases discussed:

"Even though he was not obliged to do so, the claims assessor in this case provided as much detail of the reasoning leading up to his award of future economic loss as did the judges in the decisions to which I have referred."

21His Honour continued at [43] to [45]):

"43 The claims assessor found the claimant to be a very impressive person ([38]). He clearly accepted the claimant's evidence concerning his work circumstances and the possibility of him losing his job. Although the claims assessor did not expressly say so, it is implicit and obvious from his reasons that uninjured the claimant would have continued in his pre-injury employment earning $1000 per week. The claims assessor found a real chance that he might lose that job, despite his benevolent employer. The claims assessor then made the same evaluative decision that the judges made and determined that a loss of $250 per week represented the value of that chance.
44 Nothing turns on the fact that the claims assessor started with a figure of $250 per week and then calculated the buffer of $134,300, rather than simply nominating the buffer. As the decisions to which reference has been made make clear, in assessing the reasonableness of a buffer, the Court of Appeal often deconstructs the lump sum to work out how much per week the lump sum represents.
45 It follows that the error in respect of s126 of the Act which the plaintiff asserts has not been made out. Had the same standard been applied to the reasons of the claims assessor as were applied to the reasons of the judges in the cases to which I have referred, the claims assessor would have met that standard. For the reasons already indicated, I am of the opinion that an assessor under the Act is not required to meet such a standard. It is sufficient that it is clear from the reasoning of the claims assessor what he or she has done and by what methodology and reasoning he or she has arrived at the damages component under consideration. That is clearly the case here."

22The primary judge held that it was "implicit and obvious" from the assessor's reasons that he proceeded on the basis that Mr Sprod, if uninjured, would have continued to earn at the rate of $1,000 net per week and that there was a finding of a "real chance" that he might lose his job. The judge then said that the assessor had, by way of "evaluative decision", decided that a loss of $250 net per week represented the value of that chance.

23Allianz challenges the primary judge's decision on the basis of erroneous approach to the s 126 obligations of an assessor. It is said that the judge erred in holding that the test of the lawfulness of an assessor's reasons is one of clarity, with no need to enunciate steps in reasoning if the process is otherwise clear and no need for specific and detailed findings; also that it was an error to treat the assessor's approach as if it were a "buffer" determination when not so expressed and to approach the compliance question as if the case were like or akin to a "buffer" case.

24Allianz maintains that the case under review was not in truth one of "buffer" award. Having regard to [42] of the assessor's decision set out at [4] above, it is said that it was in truth a case of articulated calculation and that, once the process of calculation had been undertaken, it was incumbent upon the assessor to state, in a manner apposite to the calculation, the assumptions regarding future earning capacity on which the award was based.

25There is clear merit in the submission that this was not a "buffer" case - that is, as described by Basten JA in Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13 at [30], a case in 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". There was, in this case, resort to a precise figure of $250 net per week and a calculation by reference to that figure, based on a stated number of years of expected working life.

26The underlying principle is that the plaintiff should have a sum by way of damages for the difference between earning capacity as it would have been in the absence of the injury and the earning capacity as it is following the injury. Both elements involve uncertainty and conjecture and, therefore, require that assumptions be made, albeit assumptions shaped by the available evidence. The assumptions cover, among other things, remaining expectancy of working life, the impact of the injury on that expectation, the extent to which the ability to function will be curtailed and the earnings that work according to the reduced ability will produce, together with assumptions regarding discounted present value and investment returns and as to vicissitudes or adverse contingencies. Because of s 126(1), an assessor has a duty to form an opinion that the assumptions to be applied in relation to such matters going to future earning capacity "accord with the claimant's most likely future circumstances but for the injury".

27The duty under s 126(1) to be satisfied that the adopted assumptions accord with the most likely future circumstances but for the injury is supplemented by the s 126(3) duty to articulate the assumption on which the award is based. This, as has been said in this Court more than once, is to ensure transparency and, at the same time, to inject an element of rigor or method that may be overlooked or simply abandoned if the statutory system did not insist on the identification and articulation of the assumptions employed.

28The purpose of s 126 was explained by Basten JA in Nominal Defendant v Livaja [2011] NSWCA 121. His Honour said at [39]:

"One purpose of s 126 is to require a structured approach to such a calculation. Subsection (1) is expressed in terms which emphasise the need for the plaintiff to satisfy the Court as to certain 'assumptions' in respect of future earning capacity. . . . Those assumptions must accord with the plaintiff's 'most likely future circumstances' on the basis that the injury for which he or she seeks compensation had not occurred. There is nothing obscure about the nature of the findings so required: they must be sufficient to establish a baseline of earning capacity, extending into the future, from which diminution caused by the injury may be calculated: see New South Wales (NSW Police) v Nominal Defendant [2009] NSWCA 225 at [83]-[84] (Beazley JA, Allsop P and Macfarlan JA agreeing). Further, the assumptions must be stated and there is authority for the proposition that failure to do so would render the judgment invalid: subs (3); Zahra v Brown [2006] NSWCA 162 at [71] (Beazley JA, Santow JA agreeing)."

29Basten JA continued at [40]:

"40 The purpose of subs (2) is less clear. There is a missing step between subss (1) and (2). An essential part of the calculation is the assessment of the consequences for the claimant's earning capacity as a result of the injury. Subsection (2) requires adjustment of the amount of damages "by reference to the percentage possibility" that "the events concerned might have occurred but for the injury". Reference in subs (2) to "those assumptions" must be a reference to the assumptions about future earning capacity, absent the injury, referred to in subs (1). Subsection (1) refers to both assumptions and "other events": it might appear that the reference in subs (2) to "the events concerned" was intended to mirror the reference in subs (1) to "other events", although the language is somewhat obscure.
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."

30In a true "buffer" case, the obligations imposed by s 126 upon the assessor may be discharged by much more generalised statements: see Allianz Australia Insurance Ltd v Kerr (above) at [69] per Macfarlan JA. But there will still be, of necessity, some assumptions. Assumptions as to life expectancy and likely remainder of working life are examples, even if circumstances mean that the assumptions are necessarily somewhat impressionistic. But if that is the quality of the relevant assumption, it is still possible for it to be stated, if only in very general terms, for example, that remaining working life has been assumed to be a minimum of five years and a maximum of twenty years. That, while it would do little to elucidate any basis of calculation, would serve to accentuate one aspect of the uncertainty that formed the very basis for resort to the evaluative approach of "buffer".

31In the present case, the assessor made and articulated a calculation. He referred to the following matters under the "Future economic loss" heading:

1.Mr Sprod was concerned about losing his job because he is the only light duties worker in his section and is worried that a pallet system may be introduced, leaving very little for him to do and increasing his chances of losing his job.

2.As a forklift driver, Mr Sprod will be expected to do physical work during times when he is not operating a forklift. His impaired capacity for lifting may therefore be taken to emphasise the precariousness of the employment.

3.Mr Sprod will, for these reasons, be at a disadvantage in the labour market, particularly in light of the fact that he has only ever done manual work.

4.Bearing in mind the "present high earnings", it was "appropriate" to allow $250 net per week for future economic loss.

32The calculation was then set out at [42] of the assessor's reasons. It showed clearly enough that the assessor had adopted an expected residue of working life of 18.3 years and a discount for vicissitudes of 15% (hence the 0.85 multiplier).

33There is no explicit explanation of why a residual working life of 18.3 years was chosen or, more precisely, what assumption was made in that respect (this is an aspect of Allianz's complaint that there was no articulated assumption as to when Mr Sprod was likely to lose his job or as to the degree of likelihood). Nor is there any reference to the assumption that gave rise to the allowance of 15% for vicissitudes. These are matters that may not call for particular elaboration or explanation. A brief statement of what might seem to be reasonably obvious may well suffice.

34More significantly, there was no statement by the assessor of the assumption or assumptions underlying the figure of $250 net per week as lost earnings for the balance of the working life. All that was said on that is that the $250 figure had been struck "bearing in mind the Claimant's present high earnings". This was apparently a reference back to the amount of approximately $1,000 net per week referred to at [36] of the assessor's reasons.

35The problem here is that, as [36] of the assessor's reasons shows, the figure of approximately $1,000 net per week represented a level to which earnings had "jumped" in "the most recent financial year". The reference to the "jump" in that year is preceded by references to earnings at lower levels in both the year of the accident and the year immediately before the accident.

36If, as seems likely, the reference at [42] to the "present high earnings" is a reference to $1,000 net per week, two questions arise: first, whether and, if so, why the assessor assumed that earnings at the higher level would be likely to be maintained for the balance of the working life (particularly when, at [37], there was an expressed inability to understand how the increase had come about); and, second, what assumption was made in allowing $250 (presumably 25% of $1,000).

37There was, in my opinion, a failure of the assessor in these respects to engage with and perform the tasks prescribed by s 126. Once the assessor embarked on a process of calculation, the duties imposed by s 126 were enlivened (they would also have been enlivened, but required potentially very much less by way of explanation of assumptions, had the circumstances exhibited such uncertainties and imponderables as to justify the broad evaluative "buffer" approach).

38Mr Sprod submitted that Allianz had not raised s 126 of the Motor Accidents Compensation Act before the assessor and had not relied on s 126 before the primary judge. Neither submission is correct. Section 126 was drawn to the assessor's attention. The submissions to the primary judge sufficiently identified Allianz's complaint that the assessor had failed to comply with the requirements of s 126.

39The assessor's statement of reasons is shown not to conform to the statutory requirements, so that error of law on the face of the record is established. The appeal should therefore be allowed and prerogative relief should be granted.

40Two things should be said in conclusion. The first concerns Allianz's challenge to comments made by the primary judge about what he saw as an increasing number of applications for prerogative relief in respect of decisions of assessors under the Motor Accidents Compensation Act. The judge expressed a view, in relation to the case before him and the earlier case of Kerr (the appeal in which is referred to at [25] and [30] above), that they "appear to be thinly veiled attempts at a merits appeal where no such appeal is provided for under the Act".

41All that needs to be said about this aspect of the judge's reasons is that the comments do not appear to have been central to the decision and that, in any event, a court obviously cannot approach any application before it otherwise than according to the merits of the particular case.

42Second, it is important to emphasise that nothing I have said is intended to suggest that assessors must prepare elaborate statements of reasons and explanations of assumptions. They must, of course, work on the basis of facts but an important element of the statutory scheme is the deployment of the expertise and experience of assessors as specialists. They are not meant to act as if they were judges. Their task is only to assess the amount that "a court would be likely to award" as damages. The function is no more than to estimate and to predict likelihood. There is a clear place for informed intuition and speculation. The purpose of s 126, a provision directed at judges and applied in a derivative way to assessors, is to produce a reasonable degree of transparency as to assumptions and the reasons for them so that those interested in the assessment may have an insight into the way in which the task of assessment was performed. The section recognises that assumptions are necessary and appropriate. It does not seek to define aspects that may or may not properly be made the subject of assumptions about future earning capacity. Its aim is merely to ensure that an insight can be obtained into the content of the assumptions and the reasons for their adoption.

43I propose the following orders:

1.Appeal allowed

2.Judgment of 29 September 2011 below set aside.

3.In lieu thereof, make orders as follows:

(1)Order that the assessment of claims assessor John Tancred the subject of his certificate of assessment dated 11 January 2011 be quashed and the certificate be set aside.

(2)Order that the respondents be restrained from acting on or taking any further step in reliance on the said assessment or certificate.

(3)Remit the claims assessment in respect of Michael Sprod to the Motor Accidents Authority of New South Wales for allocation to a claims assessor for determination according to law.

4.Order that Michael Sprod pay the costs of Allianz Australia Insurance Ltd of the proceedings below and of the appeal.

5.Grant to Michael Sprod an indemnity certificate under the Suitors Fund Act 1951 in respect of the appeal.

44SACKVILLE AJA: I agree with Barrett JA.

**********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Decision last updated: 12 September 2012