Supreme Court New South Wales

• Medium Neutral Citation: Insurance Australia Limited t/as NRMA Insurance v Banos [2013] NSWSC 1519
• Hearing dates: 11/10/13
• Decision date: 17 October 2013
• Jurisdiction: Common Law
• Before: Campbell J

Decision

(1) Subject to any objection being taken by the Principal Claims Assessor within 14 days, join the Principal Claims Assessor, Motor Accidents Claims Assessment and Resolution Service, as the fourth defendant to these proceedings;

(2) Set aside the preliminary assessment under s. 92(1)(b) Motor Accidents Compensation Act 1999 (NSW) of the claims assessor that the claim is suitable for assessment under Part 4.4 of the Act made on 16th May 2013; and

(3) Remit the matter to the Principal Claims Assessor to make arrangements for a different assessor to determine whether the claim is not suitable for assessment under Part 4.4 according to law, and subject to the outcome of that determination, if appropriate, to assess the claim in accordance with s.94 of the Act;

(4) The first defendant to pay the plaintiff's costs of and incidental to the proceedings on the ordinary basis after they have been agreed or assessed;

(5) Direct the plaintiff within two business days to provide the Principal Claims Assessor with a copy of these orders and reasons for judgment.

• Catchwords: ADMINISTRATIVE LAW - judicial review - certiorari - jurisdictional error - plaintiff insurer challenges validity of two decisions of claims assessor of Motor Accidents Claims Assessment and Resolution Service - whether claims assessor identified a wrong issue or asked herself a wrong question in refusing discretionary exemption of the claim from the provisions of Part 4.4 Motor Accidents Compensation Act 1999 (NSW) - whether refusal of claims assessor to disqualify herself on the basis of reasonable apprehension of bias constituted jurisdictional error
• Legislation Cited: Motor Accidents Compensation Act 1999 (NSW)
• Cases Cited: -Abraham As Tutor for Abraham v St Marks Orthodox Coptic College (No 4) [2008] NSWSC 1031; -Allianz Australia Insurance Ltd v Girgis [2011] NSWSC 1424; 59 MVR 548; -Allianz Australia Insurance Ltd v Tarabay [2013] NSWSC 141; 62 MVR 537; -Attorney General (NSW) v Quin [1990] HCA 21; 170 CLR 1; -Australian National Industries Ltd v Spedley Securities Ltd (1992) 26 NSWLR 411; -Brown v Lewis [2006] NSWCA 87, 65 NSWLR 587; -Browne v Dunn (1893) 6 R 67; -Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372; -Livesey v NSW Bar Association [1983] HCA 17, 151 CLR 288; -Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323; -Motor Accidents Authority (NSW) v Mills [2010] NSWCA 82, 78 NSWLR 125; 55 MVR 243; -Owen v Motor Accidents Authority (NSW) [2012] NSWSC 650; 61 MVR 245; -Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S154/2002 [2003] HCA 60; 77 ALJR 1909; -Re Refugee Tribunal and Anor; Ex parte H and Anor [2001] HCA 28; 179 ALR 425; -Rodger v De Gelder [2012] NSWCA 167; 61 MVR 140; -Smits v Roach [2006] HCA 36, 227 CLR 423; -Zurich Australian Insurance Ltd v Motor Accidents Authority of NSW [2006] NSWSC 845
• Category: Principal judgment
• Parties: Insurance Australia Limited t/as NRMA Insurance (plaintiff); Constantina Banos (first defendant); Elyse White (second defendant); Motor Accidents Authority of New South Wales (third defendant)
• Representation: Counsel: MA Robinson SC, with OJ Dinkha (plaintiff); MA Campbell (first defendant); Submitting appearance (second and third defendants); Solicitors: Sparke Helmore Lawyers (plaintiff); Brydens (first defendant); Crown Solicitor's Office (NSW) (second and third defendants)
• File Number(s): 2013/207773

Judgment

1 The plaintiff (the insurer) challenges the validity of two decisions of a claims assessor of the Motor Accidents Claims Assessment and Resolution Service (CARS) established by the Motor Accidents Authority pursuant to s.98 Motor Accidents Compensation Act 1999 (NSW) (the Act). The claimant for compensation under the Act is the first defendant to the proceedings. She contests the insurer's entitlement to the relief sought. I will refer to her as the claimant. The second defendant is the claims assessor and the third defendant is the Motor Accidents Authority. Conventionally, the Crown Solicitors Office has filed a submitting appearance on behalf of each of them.

2 The challenged decisions are as follows:

(a) On 9th April 2013, in what was described as an additional preliminary conference report, the claims assessor rejected an application made by the insurer on 27th March 2013 that she recuse herself from further dealing with the matter. The basis of the insurer's objection was that the claims assessor had assessed an earlier claim by the claimant in respect of a previous motor accident; and

(b) the refusal by the claims assessor on 16th May 2013 of the insurer's application for a discretionary exemption of the claim from the provisions of Part 4.4 of the Act advanced on the basis that the claim is not suitable for such an assessment.

3 The principal relief sought is an order in the nature of certiorari setting aside each of the decisions, and the remitter of the matter to the Principal Claims Assessor to make arrangements for the reallocation of the claim to a different claims assessor for the determination, after a further preliminary assessment under s.92(1)(b) of the Act, of the question of whether the claim is not suitable for assessment under Part 4.4 of the Act.

4 The Principal Claims Assessor is not a party to the proceedings: see Campbelltown City Council v. Vegan [2006] NSWCA 284; 67 NSWLR 372 at 382 [55]; and 401 [140]. If the insurer succeeds, it will be necessary to make orders like those made in Vegan.

Background facts

5 The claimant claimed motor accident compensation in respect of injuries received in an accident which occurred on 22nd May 2010 at 10:20am when the stationary vehicle in which she was the driver was struck by another vehicle from behind.

6 In her claim form the claimant described her injuries from the accident in the following terms:

Fingers, hands and wrist, arm, elbow, shoulder pain.

Fingers and hand exceptionally painful.

Right hand and wrist pain weakness, pins and needles sensation.

7 She applied for general assessment of her claim by CARS. In a statement attached to her application dated 16th May 2012 (page 1 [3]) she said:

As a result of the accident I injured my right hand quite badly and I've been told that I have carpal tunnel and that I need an operation. I get very strong pins and needles in my hand and in my fingers. The pain travels up through my arm and into my shoulder and neck. I am naturally a right handed person and it is very difficult to use that hand for anything now.

8 The original claim form was verified by a statutory declaration by which the claimant solemnly and sincerely declared that to the best of her knowledge the information given was true and correct in every respect. She made this declaration before a Justice of the Peace on 3rd August 2010. The printed material immediately preceding the declaration in the claim form drew particular attention to the necessity for the information in the claim form to be true and correct in every respect, and to the penalties imposed by s.117 of the Act "for knowingly furnishing false and misleading particulars in this form".

9 Question 34 of the claim form was in the following terms:

Have you had any other injuries, disability or illness, before or since the accident, to the same part(s) of your body?

The claimant answered "no".

Question 35 was in the following terms:

Have you ever made a claim for personal injury compensation, workers compensation or other damages? (e.g. slip and fall, assault, medical negligence, or another motor accident).

Again, the claimant answered "no".

10 There is no mention of any previous injury or relevant medical condition, nor any claim for damages for any other accident, in the claimant's statement attached to the application for assessment.

11 The insurer subsequently came into possession of material suggesting the following:

(1) That the plaintiff had suffered injury in a previous motor vehicle accident occurring on 17th July 2005. This claim was referred to the same claims assessor for assessment and resulted in an award of damages in the sum of $78,993.95. The assessor accepted that the claimant had suffered injuries to her neck and back resulting in chronic spinal pain. The assessor accepted that the claimant was "forthright and honest" in the answers she gave in the course of the assessment. The assessor accepted the nature and extent of ongoing injuries and disabilities described by the claimant. The assessor did not accept that a fall in 2006 was causally related to the previous motor accident because she accepted medical evidence that "there was no accident related injury to the right knee which caused the fall leading to the right shoulder injury";

(2) It followed from the aforegoing that the claimant had suffered a fall on stairs at home in 2006 resulting in right shoulder pain. She was still complaining of pain to her right shoulder blade to a general practitioner on 29th September 2009;

(3) About two weeks before the subject motor accident on 7th May 2010, the plaintiff consulted her general practitioner complaining of an inability to cope with the demands made on her by her family for which the doctor wrote a prescription for Zoloft. She also described symptoms in her right hand including "tingly hand", which the doctor considered may be carpal tunnel syndrome;

(4) The insurer obtained video surveillance showing the claimant "freely using her right hand and arm".

This material raised a question in the mind of the insurer's representatives about the accuracy and reliability of the claimant's answers in the claim form.

Procedures under the Motor Accidents Compensation Act

12 By s.90 of the Act, a claim for damages under the Act may be referred to the authority by the claimant or the insurer for assessment under Part 4.4. The overall effect or scheme of the Act is that in the event of a dispute about entitlement to, or the amount of, damages, the claim must be referred for assessment unless exempt: ss.92 and 108 of the Act. Court proceedings may only be commenced without assessment under Part 4.4 if the claim in respect of which they are proposed is exempt.

13 Section 92 of the Act is in the following terms:

92 Claims exempt from assessment

(1) A claim is exempt from assessment under this Part if:

(a) the claim is of a kind that is exempt under MAA Claims Assessment Guidelines or the regulations, or

(b) a claims assessor has made a preliminary assessment of the claim and has determined (with the approval of the Principal Claims Assessor) that it is not suitable for assessment under this Part.

(2) If a claim is exempt from assessment under this Part, the Principal Claims Assessor must, as soon as practicable, issue the insurer and claimant with a certificate to that effect (enabling court proceedings to be commenced in respect of the claim concerned).

The present case is concerned with s.92(1)(b), colloquially referred to as a "discretionary exemption". The claims guidelines made under s.69 of the Act make provision in relation to discretionary exemptions in Chapter 14 in the following terms:

Unsuitable for assessment under section 92(1)(b)

14.11 For the purpose of section 92(1)(b), an Assessor may, in dealing with an application for general assessment and following a preliminary assessment of the claim, determine that the claim is not suitable for assessment.

14.12 An Assessor may make a preliminary determination that a claim is not suitable for assessment on their own initiative or upon application by the claimant, the insurer, or both, at any time during the course of an assessment, after providing the parties with the opportunity to make submissions on that issue and considering any such submissions.

14.13 If the Assessor determines that the claim is not suitable for assessment, the matter must be returned within 5 days of making such a determination to the PCA for approval with a brief statement of reasons.

14.14 If the PCA approves the preliminary determination under section 92(1)(b), the PCA shall issue a certificate of exemption and notification to the parties within 5 days of the return of the matter from the Assessor.

14.15 If the PCA does not approve the preliminary determination, an officer of CARS is to advise the parties within 5 days of the return of the matter from the Assessor, and forward the matter to a different Assessor for assessment within 10 days of the return of the matter from the original Assessor.

14.16 In determining whether a claim is not suitable for assessment, an Assessor and the PCA shall have regard to the circumstances of the claim as at the time of the preliminary determination including, but not limited to:

14.16.1 whether the claim is exempt under section 92(1)(a) because the claim involves one or more of the circumstances set out in clause 8.11;

14.16.2 the heads of damage claimed by the claimant and the extent of any agreement by the insurer as to the entitlement to those heads of damage;

14.16.3 whether the claim involves complex legal issues;

14.16.4 whether the claim involves complex factual issues;

14.16.5 whether the claim involves complex issues of quantum or complex issues in the assessment of the amount of the claim including but not limited to major or catastrophic, spinal or brain injury claims;

14.16.6 whether the claimant has been medically assessed and is entitled to non-economic loss pursuant to section 131 and the claim involves other issues of complexity;

14.17.7 whether the claim involves complex issues of causation in respect of the relationship between the accident, the injuries sustained and disabilities arising from it including but not limited to multiple accidents or pre-existing injuries or medical conditions;

14.16.8 whether the insurer is deemed to have denied liability under section 81(3);

14.16.9 whether the claimant or a witness, considered by the Assessor to be a material witness, resides outside New South Wales;

14.16.10 whether the claimant or insurer seeks to proceed against one or more non-CTP parties; and/or

14.16.11 whether the insurer makes an allegation that a person has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident giving rise to the claim.

(Note: If an insurer makes an allegation of 'fraud' in terms of the circumstances of the accident, the matter will be exempt under section 92(1)(a) and clause 8.11.6. If an insurer makes an allegation that a person has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident, the insurer may be required to provide particulars in writing of the general nature of any such allegation under clause 17.13, and an Assessor may then consider whether a matter is not suitable for assessment under clause 14.11 to 14.16, particularly in light of clause 14.16.11.)

14 The present case also concerns the circumstances in which an assessor may be required to decline to exercise his or her powers under the Act, given that s.94(1) imposes a duty on a claims assessor, who has not assessed the claim as one not suitable for assessment, to make the required assessment. The language of s.94 is:

The claims assessor is ... to make an assessment of [the matters described in paragraphs (a) and (b)] [emphasis added].

The guidelines make the following provision in relation to these things:

14.1 The preliminary assessment arranged in accordance with clause 12.10.2 is to be conducted within 15 days of the date of the letter advising the parties of the allocation (or re-allocation in accordance with clause 12.12 or 12.13) of a matter to an Assessor.

14.2 On the preliminary assessment, the Assessor is to review the matter to:

14.2.1 determine, pursuant to section 92(1)(b) whether the claim is suitable for assessment (see clause 14.11);

14.2.2 determine whether other documentation or information is required as set out in clauses 14.8.2 and 17.8;

14.2.3 determine the way in which an assessment is to proceed as set out in clauses 14.8.1 and 16.8; and

14.2.4 conduct the Preliminary Conference.

14.3 The Assessor may conduct one or more further Preliminary Conferences.

14.4 If at any stage after being allocated a matter to assess, the Assessor considers that they are no longer suitable to assess the claim, the Assessor may disqualify themselves from assessing the claim by writing to the PCA and the parties setting out the facts and/or reasons why the Assessor considers they might be unable to assess the claim. The PCA shall within 5 days of receiving such advice from an Assessor re-allocate the matter to another Assessor.

15 The question posed by clause 14.4 of the guidelines is whether "the Assessor considers that they are no longer suitable to assess the claim". If answered in the affirmative, "the Assessor may disqualify themselves from assessing the claim". Clearly, the plural personal pronoun in the third person is used to achieve gender neutrality.

The present case

16 As I have said, the insurer made two applications. The first in time was an application that the assessor disqualify herself. The second was an application for discretionary exemption on the basis that the insurer believed that the claimant had made false and misleading statements in relation to the claim.

17 The recusal application was based upon the consideration that the claims assessor had assessed the claimant's previous claim under s.94 of the Act. The application was supported by written submissions which were placed before me as exhibit TFS 5 to the affidavit of the insurer's solicitor, Tanya Felicity Smart, affirmed on 8th August 2013, and filed on the 9th. So far as material, the written submissions of 27th March 2013 put the insurer's case as follows:

We note that your reasons for decision in relation to the claimant's earlier CARS application are silent as to whether you formed any positive or negative opinion of the claimant in the Assessment Conference related to that Application, and our submission does not rest on the suggestion or belief that your formed an opinion of the claimant either positive or negative.

Rather, our client believes that it would be disadvantaged by not being in a position to address evidence given, or statements, submissions or observations made, during the running of the last CARS Assessment Conference. It would only be natural for you to recall such things (or come to recall in the course of the evidence on this occasion) and they could not help but form part of the basis of your decision on this occasion.

This could not be remedied by your drawing these recollections to our attention for submissions, as we will not have had the benefit of being there to hear or see the earlier matter first hand and therefore could not offer and opinion to the contrary. [Emphasis added].

I interpolate that the emphasised portion of the submissions seems to be incorrect. As I have recounted, the claims assessor seemed to have formed a positive impression of the claimant's reliability.

18 As the note at the foot of clause 14.16.11 makes clear, where an insurer makes an allegation that the claimant has made a false or misleading statement in a material particular relating to the claim, the assessor is empowered by clause 17.13 of the Guidelines to require the provision of particulars "(but not necessarily the evidence of proof of same), sufficient to enable the assessor to determine whether or not the claim is suitable for assessment in accordance with the provisions in clauses 14.11 to 14.16".

19 It was not in dispute before the assessor that relevant particulars were provided as required.

20 The insurer provided written submissions in support of its application for discretionary exemption, which are exhibit TFS 4 to Ms. Smart's affidavit. The submissions run to five pages and rely upon the matters I have set out above at [11]. Further instances of apparent omissions on the part of the claimant to provide doctors seen after the car accident with a full history extending to pre-existing symptoms and an apparent discrepancy between the presentation to doctors and that detected on surveillance were also relied upon. The following submission was made:

The insurer submits that the matter is not suitable to be dealt with at CARS as making a false and misleading statement constitutes an offence under s.117 [of the Act], and it is appropriate in such circumstances that the matter be heard in Court where a transcript is available, the claimant can be required to take an oath and, if appropriate, a warning and certificate from prosecution can be given to her by the presiding Judge.

Further, where the case for medical causation will be strongly in issue, it is appropriate to be able to have medical expert witnesses give evidence concurrently and with the benefit of a transcript as to the claimant's evidence after testing in cross-examination.

21 The claimant, through her legal representatives, opposed both applications and submitted it was appropriate for the matter to proceed to general assessment before the claims assessor.

The decision of the claims assessor

22 In her decision of 9th April 2013 (exhibit TFS 7 to Ms. Smart's affidavit) the claims assessor rejected the submission that the insurer would be denied procedural fairness because of the previous decision by the claims assessor. The assessor characterised the present claim as "an unrelated subsequent motor vehicle accident". She decided that if the previous claim was relevant "the insurer should be able to access records from QBE recording the 2005 accident". She was not persuaded that there was any denial of procedural fairness.

23 The claims assessor's reasons for the second determination were given on 16th May 2013 and are exhibit TFS 12 to Ms. Smart's affidavit. The reasons, with respect, are more extensive running to fifteen closely reasoned paragraphs over three pages. The claims assessor, with respect, accurately summarised the insurer's position as follows:

3.1 The claimant has failed to disclose the existence of pre and post injuries to several parts of her body.

3.2 The claimant has failed to disclose relevant pre-accident medical history to doctors including the Medical Assessor.

3.3 The claimant has misstated her symptoms and capacity for domestic tasks when assessed by doctors and occupational therapists.

24 Concerning the prior injuries, the assessor concluded as follows:

7. Clearly answers in the personal injury claim form are incorrect. She had made a prior claim for compensation. In the 2005 accident she injured her neck and back. From the list of injuries recorded in the 2010 accident there is no mention of the neck or the back. Although [the claimant] failed to properly answer question 35 I do not regard this as a deliberate false or misleading statement.

25 In relation to the second issue, which the claims assessor characterised as being about prior medical histories, she said:

8. Ongoing reference in the claimant's general practitioner's notes to carpal tunnel syndrome and injuries to her shoulder after a fall in 2009 (sic) set out ongoing symptoms associated with [the claimant's] hands and wrists.

9. The claim form at question 33 asks a question about treatment or rehabilitation ... the answer appears to have been completed by another person. There is reference to possible carpal tunnel release, possible physiotherapy after surgery. It is unclear whether this answer relates to the injuries or a general answer about the pre-existing carpal tunnel symptoms.

The claims assessor observed that notwithstanding the more extensive complaints to the medical assessor, that assessor "found that the only injury caused by this accident was soft tissue injury [to the] right wrist". She concluded:

Notwithstanding the Claimant's complaints, the only injury accepted by the Medical Assessor was soft tissue right wrist. He also had the benefit of... [the clinical notes of the local medical officer] from 9 January 2009. Accordingly I do not accept that relevant medical records and the entries in the claim form were not available to the Insurer or doctors when assessing the Claimant.

The assessor characterised the third issue as "misstatements". She found that reported injuries can only be assessed by a medical assessor who may accept or reject the symptoms described by the patient. She reiterated that the medical assessor accepted only a right wrist injury as caused by the 2010 accident. She concluded:

13. I accept that [the claimant] may have embellished her symptoms to doctors, however I have not been persuaded that she has made deliberate false and misleading statements.

14. Video surveillance shows [the claimant] freely using her right hand and arm which again the Medical Assessor had the advantage of viewing. This evidence is relevant when assessing damages and again confirms that [the claimant] may be exaggerating her symptoms. It is not in my opinion the basis of an allegation of false and misleading statements.

26 The application for discretionary exemption was declined.

Submissions of the parties

27 Mr MA Robinson SC, who appeared with Ms OJ Dinkha for the insurer, mounted his main attack on the second decision concerning the refusal of the discretionary exemption. Senior counsel argued that the present case was "on all fours" with Allianz Australia Insurance Ltd v Tarabay [2013] NSWSC 141; 62 MVR 537 at 549 [62] - 550 [67]. He argued that the claims assessor misdirected herself by asking whether the clear misstatements were deliberately false or misleading (see reasons [7], [9] and [13]) rather than whether in the exercise of her discretion, in the light of the insurer's allegations, the matter was not suitable for assessment and should be exempt, subject to the approval of the Principal Claims Assessor (see the words in parentheses in s.92(1)(b)).

28 In relation to her refusal to recuse herself, learned senior counsel relied upon reasonable apprehension of bias and placed reliance upon the proposed reformulation of the test in that regard for non-curial proceedings arising out of the decision of a three-judge bench of the High Court of Australia in Re Refugee Tribunal and Anor; Ex parte H and Anor [2001] HCA 28; 179 ALR 425 at 434 - 5[28].

29 Ms MA Campbell of counsel, who appeared for the claimant, accepted that Tarabay provided relevant guidance. Counsel drew attention to the passage at page 549 [56] - [58] and argued that as not every apparent inconsistency in documents and statements necessitates exemption, it was appropriate for the claims assessor to weigh and assess the material put forward by the insurer in determining whether the matter was not suitable for assessment under Part 4.4. Counsel argued that questions of the reliability of a claimant as a medical historian arise very frequently in motor accident claims. Given the restraint inherent in the supervisory jurisdiction as explained in particular by Hoeben J (as his Honour then was) in Zurich Australian Insurance Ltd v Motor Accidents Authority of NSW [2006] NSWSC 845 at [53] - [54], it was submitted that the Court should be slow to conclude that the claims assessor had identified a wrong issue or asked herself a wrong question.

30 In relation to the apprehended bias ground, Ms Campbell argued that bias, actual or apprehended, had not been articulated as a ground of objection before the claim's assessor; rather the insurer seems to have complained of an infringement of the "hearing rule" aspect of procedural fairness by saying it could not have a fair hearing because it would not have access to all information available to the assessor by dint of previous consideration of a different claim brought by the same claimant. Indeed, apprehended bias in the sense of the appearance prior determination of an issue that may be relevant to the present claim was specifically disavowed as a basis for the insurer's objection.

31 Ms. Campbell also argued, by reference to Abraham As Tutor for Abraham v St Marks Orthodox Coptic College (No 4) [2008] NSWSC 1031 at [30] per Rothman J, that "there is a significant difference between adverse and positive findings of credit" because as a general rule a court or a tribunal will assume witnesses are honest until reasons for doubting them are shown.

Disposition

32 I have decided that the claims assessor's decision refusing discretionary exemption is tainted by jurisdictional error, but that her refusal to disqualify herself is not.

33 I accept the argument of the claimant that the supervisory jurisdiction should be attended by an appropriate, legal restraint. Quite obviously its exercise does not provide the occasion for anything in the nature of merits review: Attorney General (NSW) v Quin [1990] HCA 21; 170 CLR 1 at 35-6 per Brennan J.

34 In the present case it is sufficient that I remind myself of the following exposition of principle by McHugh, Gummow and Hayne JJ in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at 531[82]:

It is necessary, however, to understand what is meant by "jurisdictional error" under the general law and the consequences that follow from a decision-maker making such an error. As was said in Craig v South Australia [(1995) 184 CLR 163 at 179], if an administrative tribunal (like the Tribunal)

"falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it."

"Jurisdictional error" can thus be seen to embrace a number of different kinds of error, the list of which, in the passage cited from Craig, is not exhaustive. Those different kinds of error may well overlap. The circumstances of a particular case may permit more than one characterisation of the error identified, for example, as the decision-maker both asking the wrong question and ignoring relevant material. What is important, however, is that identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision-maker did not have authority to make the decision that was made; he or she did not have jurisdiction to make it. Nothing in the Act suggests that the Tribunal is given authority to authoritatively determine questions of law or to make a decision otherwise than in accordance with the law.

35 As explained by Rothman J in Tarabay at 550 [65] - [67], the claims assessor fell into jurisdictional error when she determined as a concluded fact that the claimant had not deliberately, or knowingly, made false or misleading statements as particularised by the insurer. As Rothman J explained in Tarabay at [65], "that was not an issue before the assessor. Far more fundamentally, it is not an issue that could be decided before a full hearing on the question of the 'fraud'". Rothman J continued:

[66] The only proceeding heard by the Assessor was an interlocutory proceeding in which the task of Allianz was not to prove the fraud alleged but to satisfy the Assessor, on the basis of an allegation, reasonably put, of fraud so that the matter was not one that should be heard in a CARS assessment.

[67] The Assessor asked herself the wrong question and answered it. In doing so she has reached a concluded view as to the substance of the matter alleged, without having heard the parties in full on the issue. In so doing, the Assessor has issued a decision vitiated by jurisdictional error and error of law on the face of the record: Craig v South Australia; Minister for Immigration and Multicultural Affairs v Yusuf (references to Craig and Yusuf omitted).

36 This determination vitiates the conclusions expressed at [7], [9] and [13] of the claims assessor's reasons and in my judgment invalidates her whole decision. The same conclusion probably demonstrates that what was said at [14] was affected by jurisdictional error when the claims assessor found that the inconsistency in presentation demonstrated by the video surveillance "is not in my opinion the basis of an allegation of false and misleading statements".

37 The matters relied upon by the insurer to found its application for discretionary exemption are the very type of thing inherently capable of founding a successful cross-examination as to the credit of a claimant. By credit I am referring to the claimant's reliability and honesty as an accurate medical historian. In personal injuries litigation this question will often be fundamental to the determination by the court or tribunal of the nature and extent of the injuries and disabilities caused by the negligence of the defendant.

38 As Rothman J pointed out in Tarabay it is erroneous for a claims assessor, called upon to determine the question raised by s.92(1)(b) - that is whether the claim "is not suitable for assessment under" Part 4.4 - to decide for himself or herself in the context of that preliminary assessment whether the impugned statements are in fact false or misleading; whether the histories proffered are accurate; whether the claimant's presentation to doctors, and on other occasions, is consistent with the alleged injuries; whether apparent discrepancies are likely to have an innocent explanation; and whether or not the claimant's account of her injuries and disabilities should be believed.

39 There may be cases, difficult to conjure in the abstract, where a claims assessor making a preliminary assessment to determine, inter alia, whether the claim is not suitable for assessment could find as a matter of law that a proffered statement or alleged inconsistency was not capable of calling into question the reliability of the claimant's account. But such cases must necessarily be very rare. The present case, in my judgment, certainly did not fall into that category. As I have said, the matters raised by the insurer were the very type of matters which are commonly afforded significant weight in the process of assessing the nature and extent of a claimant's injuries and disabilities, particularly when, as they appear to be here, they are soft tissue in nature and not wholly susceptible to entirely independent and objective evaluation.

40 I would also observe in passing that the claims assessors' statement (at [12] of her decision) that "it is a matter for the medical assessor to accept or reject symptoms described by patients" is contrary to a series of decisions of this Court, and more significantly the Court of Appeal. A medical certificate is conclusive only of the matters certified (s.61(2)), which are limited to the "medical assessment matters" specified in s.58 of the Act: Allianz Australia Insurance Ltd v Girgis [2011] NSWSC 1424; 59 MVR 548; Rodger v De Gelder [2012] NSWCA 167; 61 MVR 140 at [9]; Brown v Lewis [2006] NSWCA 87, 65 NSWLR 587 at [23]; Motor Accidents Authority (NSW) v Mills [2010] NSWCA 82, 78 NSWLR 125; 55 MVR 243 at [57] - [69], [91] and [102]; Owen v Motor Accidents Authority (NSW) [2012] NSWSC 650; 61 MVR 245 [32] - [36]. As the claims assessors' decision was not impugned on this basis, I leave that consideration to one side.

41 As clause 14.16 of the claims assessment guidelines suggest, a claim may not be suitable for assessment for a variety of reasons. Clause 14.16 provides eleven examples of considerations that may be taken to be relevant to the claims assessor's decision. Clearly it is not incumbent upon the claims assessor to consider each one of those matters in every case in which s.92(1)(b) is invoked. Rather, the function of the claims assessor requires him or her to bear firmly in mind at all times the statutory question, which, I reiterate, is whether the claim is not suitable for assessment under Part 4.4 of the Act. Naturally, in deciding the matter he or she is required to weigh and assess such of the clause 14.6 grounds, if any (and the question is not limited to those considerations), as the parties may invoke.

42 In a case like the present, where only clause 14.16.11 is invoked, the claims assessor will fall into jurisdictional error if he or she purports to decide whether the claimant, or some other person, has in fact made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant; at least except in the rarest of cases where it is so clear that a person has not made such a false or misleading statement as to be beyond argument. As Rothman J pointed out, a determination that a person has in fact made a false or misleading statement may only properly be made after what I will refer to as a full hearing on the merits during which the person whose statements are impugned has been given a fair opportunity to meet the allegations in accordance with the requirements of the rule in Browne v Dunn (1893) 6 R 67, or its administrative law equivalent where applicable cf Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S154/2002 [2003] HCA 60; 77 ALJR 1909 at [56] - [57].

43 When deciding the statutory question in a case that turns upon whether a person has made a false and misleading statement, the following considerations are likely to be relevant. I do not mean to be exhaustive:

(a) the Act contemplates that the great majority of disputes will be resolved by the assessment process, and not in court;

(b) however, the consideration that s.92 provides for both mandatory exemptions and discretionary exemptions provides a clear legislative guidepost that appropriate cases should be "redirected" to the court system at an early time by way of preliminary determination;

(c) a primary question will be, having regard to the nature of the issue raised, whether both parties can be afforded a hearing (assessment conference) which is in a practical sense fair having regard to the nature of the allegation raised;

(d) a related question will be which mode of hearing will resolve the dispute more efficiently and effectively, bearing in mind the comparative limitations and advantages of an assessment conference on the one hand, and a court hearing on the other. Advantages of the latter may include a better opportunity for proper and fair cross-examination of witnesses whose credit is to be impugned and the greater availability of cross-examination of medical experts on the material which may call a claimant's reliability into question;

(e) as it is clear the claimant's credit will be called into question, a consideration of whether it is in the public interest that such an examination occur in open court;

(f) Finally, but by no means least, the consideration that it is not mandatory, whenever a credit issue is raised, to decide that the claim is not suitable for assessment under Part 4.4.

44 I would wish to add that one should not overlook that the Principal Claims Assessor is required to approve a claims assessor's decision to exempt a claim as not suitable. One would not envisage that approval would be too readily withheld. It is not necessary to consider the scope of this power or factors relevant to its exercise here but principle suggests that mere difference of opinion would be an insufficient basis for the refusal of approval. But the requirement of approval may be an important check on discretionary exemptions themselves being too readily granted. As I have said claims assessors have a duty to assess claims allocated to them.

45 For these reasons I am of the view that the insurer is entitled to the relief sought.

46 It is not strictly necessary for me to consider the bias argument to resolve the case. But as the point has been argued and I have formed a view, adverse to the insurer as it happens, it is appropriate that I express my reasons for this conclusion, albeit briefly.

47 The only ground of objection advanced in this Court was the ground of apprehended bias. But as I have said, that objection was not taken before the assessor. As it was put by Gleeson CJ, Heydon and Crennan JJ in Smits v Roach [2006] HCA 36, 227 CLR 423 at 439 [43]:

It has been held in this Court, on a number of occasions, that an objection to the constitution of a court or tribunal on the ground of apprehended bias may be waived, and that, if a litigant who is aware of the circumstances constituting a ground for such objection fails to object, then waiver will result. [Emphasis added].

48 In the present case, the insurer's solicitors knew that the claims assessor had assessed the prior claim and were in possession of a copy of the decision in which, on any fair reading of it, the claims assessor made a finding favourable to the claimant of her reliability as a witness in relation to the nature and extent of her injuries and disabilities. Notwithstanding these considerations, the solicitors expressly disavowed any reliance upon any aspect of prejudgment. Rather, because there is typically no recording or transcript of assessment conferences, the insurer, through its solicitors, said it would be at a disadvantage because the assessor might have acquired relevant knowledge unavailable to the insurer, which may come to the assessor's mind because of a previous familiarity with the case during the assessment conference for the current claim. In my judgment, the insurer waived any objection which may have been available on the ground of bias.

49 If I am wrong about waiver, there are two matters which tell against the insurer's argument. First, as Rothman J observed in Abraham, the consideration that the assessor may have been favourably impressed with a claimant in the prior assessment conference falls into a category different from a previous adverse finding as to credit: Australian National Industries Ltd v Spedley Securities Ltd (1992) 26 NSWLR 411 and Livesey v NSW Bar Association [1983] HCA 17, 151 CLR 288. An adverse impression, once formed, may be difficult to shake; a favourable impression may always be shifted by the production of compelling, contrary proofs.

50 Secondly, because no assessment conference has yet been undertaken, I would on discretionary grounds not make an order in the nature of prohibition in respect of a point not expressly raised before the tribunal.

51 It is not appropriate in the circumstances for me to consider whether the reformulation of the apprehended bias test for inquisitorial tribunals suggested in Ex parte H applies to CARS.

52 An argument based upon an infringement of the "hearing rule" aspect of the rules of natural justice was not maintained in this Court. Nor do I think it could have been. It was always the practice of the former Workers' Compensation Commission of New South Wales and its successor, the Compensation Court, when an existing award fell to be reviewed, reconsidered or terminated to assign the matter to the judicial officer who made the original award if he or she remained available. This practice obviously involved certain efficiencies, but considerations of efficiency cannot trump fundamental principle. But so far as I recall, it was never suggested that the procedure involved an infringement of the rules of natural justice. I accept that the present case is somewhat different in that the insurer was not a party to the prior assessment. But there is no rule per se disentitling a judge or tribunal member from considering a second case involving the same litigant.

Final considerations

53 As I indicated at the outset, having regard to the provisions of s.93 of the Act, it will be necessary to make orders like those that were made in Vegan, joining the Principal Claims Assessor as a party to the proceedings and directing that officer to arrange for the claim to be subject to a fresh preliminary assessment for the purpose of s.92(1)(b). The Court would generally refrain from interfering in the internal management of the Claims Assessment and Resolution Service by directing that the claim be assigned to a different assessor. But in this case, as the assessor has, by asking the wrong question and deciding the wrong issue, decided the credit issue favourably to the claimant, when that issue had not arisen for determination, I am of the view that the matter should be reassigned, simply because it is likely to be impossible for the claims assessor to unpack her previous decision and reason afresh. Counsel for both parties agreed that this was the appropriate course.

54 There is one final point. Doubtless through inadvertence, the claims assessor published the reasons supporting her preliminary assessment of 16th May 2013 on the letterhead of the legal practice of which she is a partner. Nothing of substance turns on this in the present case. However, I wish to record (with the concurrence of counsel) that I consider it very undesirable that this should occur. Notwithstanding the provisions of s.99(3), the purpose of s.105(2) and (3) is that a claims assessor should be entirely independent in making "any of the decisions of the assessor that affect the interests of the parties to an assessment". The rules of natural justice, which underlie the assessment process, also require that he or she should be entirely impartial. Just as with courts of ordinary jurisdiction justice must be seen to be done, so too with CARS the assessors must be seen to be both independent and impartial. I fully understand that most claims assessors are appointed on a part-time or sessional basis. That they are selected from the ranks of barristers and solicitors who have lengthy experience practicing in the personal injuries area, no doubt, may be considered a strength of the system. Further, much work is required to be done in the chambers or office of the assessor rather than at the premises of the Motor Accidents Authority. Publishing a decision on professional letterhead, is of course, only a small slip. But assessors should take great care to avoid such infelicities because they may detract from the essential appearance of independence and impartiality.

55 My orders are:

(1) Subject to any objection being taken by the Principal Claims Assessor within 14 days, join the Principal Claims Assessor, Motor Accidents Claims Assessment and Resolution Service, as the fourth defendant to these proceedings;

(2) Set aside the preliminary assessment under s. 92(1)(b) Motor Accidents Compensation Act 1999 (NSW) of the claims assessor that the claim is suitable for assessment under Part 4.4 of the Act made on 16th May 2013; and

(3) Remit the matter to the Principal Claims Assessor to make arrangements for a different assessor to determine whether the claim is not suitable for assessment under Part 4.4 according to law, and subject to the outcome of that determination, if appropriate, to assess the claim in accordance with s.94 of the Act;

(4) The first defendant to pay the plaintiff's costs of and incidental to the proceedings on the ordinary basis after they have been agreed or assessed;

(5) Direct the plaintiff within two business days to provide the Principal Claims Assessor with a copy of these orders and reasons for judgment.

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Decision last updated: 18 October 2013