Robinson, Mark; Gumbert, Jnana --- "Judicial review of motor accident cases in NSW" [2020] PrecedentAULA 35; (2020) 158 Precedent 47

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JUDICIAL REVIEW OF MOTOR ACCIDENT CASES IN NSW

By Mark Robinson SC and Jnana Gumbert

Within the NSW motor accidents scheme, an increasing number of decisions are being made by administrative decision-makers. The scheme is administered by the State Insurance Regulatory Authority (SIRA) and the decision-makers are either officers of SIRA or appointed by SIRA under the relevant legislation.

Under the Motor Accidents Compensation Act 1999 (MACA) there were three main groups of decision makers: medical assessors (MAS assessors), proper officers of SIRA, and claims assessors (CARS assessors).

Under the Motor Accidents Injuries Act 2017 (MAIA), MAS and CARS assessors are part of a unit called the Dispute Resolution Service (DRS), established under s7.2 of the Act. There is a further category of administrative decision-makers that form part of the DRS: merit reviewers.

This article discusses:

• the role of judicial review in motor accident compensation in NSW;

• recent challenges to decisions made by DRS, CARS, MAS and proper officers; and

• key lessons from the recent cases.

Neither Act provides a right of ‘appeal’ from these important statutory decisions, with the exception of the claimant’s right to a re-hearing in court following a CARS decision. Furthermore, there is no provision in these Acts for any external merits review to an independent tribunal such as the NSW Civil and Administrative Tribunal (NCAT).

The only way to set aside or have these decisions reviewed (after exhausting the internal review processes – in the case of MAS and DRS decisions) is to commence proceedings in the Supreme Court of NSW, invoking the Court's judicial review (or supervisory) jurisdiction under s69 of the Supreme Court Act 1970 (NSW). The section provides for the making of orders ‘in the nature of’ the former prerogative writs, such as the former writ of certiorari. This jurisdiction is important as it enables the judicial supervision of executive and administrative decision-making in NSW. The Court’s jurisdiction is constitutionally recognised and protected by s73 of the Constitution.^[1]

MEDICAL ASSESSORS

Medical practitioners – general practitioners and specialist doctors – are appointed as ‘medical assessors’ (s59 of MACA; s7.4 of MAIA) and should possess a degree of independence, and bring professional judgment and skill to bear in making their decisions (Wingfoot Australia Partners Pty Ltd v Kocak^[2]).

In addition, medical assessors are expected to comply with statutory provisions and guidelines. Under MACA, the primary guidelines are:

• SIRA’s Medical Assessment Guidelines, 1 October 2008; and

• SIRA’s Guidelines for the Assessment of Permanent Impairment, 1 October 2007 (the PI guidelines) and the fourth edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment (AMA4) as modified by the PI guidelines.

Under MAIA there is only one set of guidelines, the Motor Accident Guidelines, effective from 20 December 2019. These guidelines also incorporate the AMA4 as modified by the PI guidelines.

The Court of Appeal has held that the guidelines have statutory force, at least in the case of the PI guidelines,^[3] and a failure to comply with the SIRA guidelines can constitute a constructive failure to exercise jurisdiction.^[4]

The independence of medical assessors has been accepted by the Supreme Court – see, for example, Goodman v The Motor Accidents Authority of NSW^[5] and Ackling v QBE Insurance (Australia) Ltd.^[6]

Section 63 of MACA and s7.26 of MAIA govern review of medical assessments by a review panel. The nature of the review is described as a de novo review of all matters with which the medical assessment is concerned.^[7]

CLAIMS ASSESSORS

A ‘claims assessor’ is a person who:

• in the opinion of SIRA is ‘suitably qualified’;

• may be a member of the SIRA staff; and

• is ‘appointed’ as a claims assessor by SIRA pursuant to s99 of MACA or s7.4 of MAIA.

A claims assessor is empowered to assess claims under the respective Acts.

The Principal Claims Assessor (PCA) is appointed by the minister and must be an Australian lawyer. Section 105 of MACA and s7.6 of MAIA provide that a claims assessor is, in the exercise of his or her functions, ‘subject to the general control and direction’ of the PCA. However, the PCA is not empowered to overrule, or interfere with, any decision of a claims assessor ‘that affects the interests of the parties to an assessment in respect of any such assessment’ (s105(3) of MACA, s7.6(2) of MAIA).

Judicial review of decisions made by claims assessors is generally in respect of:

• the assessment of damages under ss94 and 95 of MACA or s7.36 of MAIA; and

• decisions to grant parties exemption from having to go to a claims assessment at all (and to thereby be permitted to go straight to a court).

Exemption can be ‘mandatory’ (s92(1)(a) of MACA, s7.34(1)(a) of MAIA) or ‘discretionary’ (s92(1)(b) of MACA, s7.34(1)(b) of MAIA). Extensive guidelines are set out in the Claims Assessment Guidelines (MACA) and the Motor Accident Guidelines (MAIA).

PROPER OFFICERS

Review proceedings in respect to the determination of a proper officer ‘are limited to determining whether the proper officer’s opinion has been properly formed according to law’.^[8]

Critically, the issue is ‘whether the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds’.^[9]

In QBE v Miller,^[10] Basten JA cited Latham CJ in The Queen v Connell; Ex parte Hetton Bellbird Collieries Ltd:^[11]

‘If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide.’^[12]

GROUNDS FOR JUDICIAL REVIEW

Judicial review proceedings can be brought on the basis of jurisdictional error and/or error of law on the face of the record. There is often crossover between the two grounds. As Adamson J has observed in NRMA Insurance Limited v Mulcahy:^[13]

‘The distinction between error of law (whether or not on the face of the record) and jurisdictional error is not necessarily easy to draw: see the discussion in Kirk v Industrial Court of NSW at [66]–[70] and [78] to [90].

It is, however, well established that a determination of whether error on the face of the record has been shown is confined to an examination of the record itself: Craig v State of South Australia (1995) 184 CLR 163; [1995] HCA 58 at 180–181. However, evidence may be given of what was before the decision-maker if it is germane to the establishment of jurisdictional error: Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 at [15] (Basten JA, McColl and Macfarlan JJA agreeing).’^[14]

In Craig v South Australia,^[15] the High Court, in a unanimous joint judgment, provided the following broad statement of principle in relation to what constitutes jurisdictional error in relation to administrative decision-making:

‘If such an administrative 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.’^[16]

The types of errors, set out in the above passage from Craig, were held to be non-exhaustive and were further expanded on in Minister for Immigration and Multicultural Affairs v Yusuf:^[17]

‘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’.^[18]

Citing Yusuf, the Court of Appeal in Rodger v De Gelder:^[19] said

‘Jurisdictional error includes a constructive failure to exercise jurisdiction. A constructive failure to exercise jurisdiction arises when a decision-maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided, or misunderstands the nature of the opinion it is to form ...’^[20]

In Pham v NRMA Insurance Ltd,^[21] it was held that both a claims assessor’s certificate and the reasons form part of the record, given that the statute requires reasons to be given. A MAS assessor’s reasons would also form part of the record for the same reason.

Under the two broad headings of jurisdictional error and error of law on the face of the record, there are many sub-grounds of error that are regularly pleaded in cases arising from decisions in the motor accidents scheme/s. It is not possible to address them all in this article.

A common ground that is pleaded in judicial review proceedings is a failure to give adequate reasons. In Wingfoot Australia Partners Pty Ltd v Kocak,^[22] which involved a similar statutory regime concerning a medical panel of assessors in a Victorian workers’ compensation context, the High Court stated:

‘The statement of reasons must explain the actual path of reasoning by which the medical panel in fact arrived at the opinion the medical panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the medical panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion.’^[23]

This case has been repeatedly applied in NSW in relation to both medical assessors and claims assessors under the NSW scheme in MACA,^[24] and would apply to MAIA in the same way.

Another common argument presented in judicial review proceedings is a failure to respond to a substantial and clearly articulated argument. In Allianz Australia Insurance Ltd v Cervantes,^[25] Basten JA addressed the legal obligation of administrative decision-makers to take particular evidence into account, stating:

‘In Dranichnikov v Minister for Immigration and Multicultural Affairs ... [2003] HCA 26 ... Gummow and Callinan JJ stated ...To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice.

A similar point was made by Kirby J ... referring to a passage in the judgment of Gaudron J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah ... [2001] HCA 22 ... However, the present case is, in my view, a clear case of constructive failure to exercise jurisdiction. That is because the delegate failed to consider the substance of Mr Miah's application and could only have failed to do so because he misunderstood what is involved in the Convention definition of “refugee”.’^[26]

In Rodger v De Gelder,^[27] Gleeson JA (with MacFarlan and Gleeson JJA agreeing) held that the review panel in that case had failed to respond to a substantial argument raised by the claimant, holding:

‘Here the Panel failed to respond to a substantial argument based on evidence relied upon by Mr De Gelder as to the causation of his thoracic spine injury by the motor accident. It may also be inferred that the Panel failed to apply itself to the real question to be decided in carrying out its statutory function under s58(1)(d), because it misunderstood a significant body of evidence relevant to its non-medical determination. What the Panel did amounted to a jurisdictional error. The Panel’s decision recorded in its certificate is to be regarded as a purported and not real exercise of its statutory function in s58(1)(d), leaving that statutory function unexercised ...’^[28]

In cases where a specific error may not be capable of being readily identified, it may be possible to rely on the doctrine of legal unreasonableness. In Minister for Immigration and Citizenship v Li,^[29] the High Court observed:

‘The legal standard of unreasonableness should not be considered as limited to what is in effect an irrational, if not bizarre, decision – which is to say one that is so unreasonable that no reasonable person could have arrived at it – nor should Lord Greene MR be taken to have limited unreasonableness in this way in his judgment in Wednesbury. This aspect of his Lordship’s judgment may more sensibly be taken to recognise that an inference of unreasonableness may in some cases be objectively drawn even where a particular error in reasoning cannot be identified.’^[30]

It further observed:

‘it was said in House v The King that an appellate court may infer that in some way there has been a failure properly to exercise the discretion “if upon the facts [the result] is unreasonable or plainly unjust”. The same reasoning might apply to the review of the exercise of a statutory discretion, where unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power. Even where some reasons have been provided ... it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.’^[31] [footnotes omitted.]

The unreasonableness doctrine has been successfully argued in motor accidents cases. For example, in IAG Limited v Sleiman^[32] it was held that an unexplained leap in the reasoning process and internally inconsistent reasoning in a claims assessor’s decision led to the decision being set aside for unreasonableness.

CONCLUSION

The doctrine of judicial review has been applied in countless cases under MACA and it is warming up for use in MAIA decisions. The remedies exist for insurers and for claimants alike. It is important to bear in mind that the Court’s special supervisory jurisdiction is discretionary^[33] and therefore even if there are grounds for judicial review, the Court may, in the exercise of its discretion, decline to quash the decision. Reasons why the Court may choose not to grant relief include where it would be useless or futile;^[34] where the plaintiff has acquiesced in the making of the decision below in a respect that was relevant to the error made;^[35] or where the error is ‘de minimis’.^[36]

Mark Robinson SC practises from Maurice Byers Chambers, Sydney. PHONE [phone] EMAIL [e-mail]. Jnana Gumbert is a barrister at Jack Shand Chambers in Sydney. PHONE [phone] EMAIL [e-mail].

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^[1] See Kirk v Industrial Court of NSW (2010) 239 CLR 531 and Hon JJ Spigelman AC, ‘The centrality of jurisdictional error’, Public Law Review, Vol. 21, 2010, 77.

^[2] [2013] HCA 43; (2013) 252 CLR 480 (Wingfoot), [47].

^[3] Boyce v Allianz Australia Insurance Ltd [2018] NSWCA 22; (2018) 96 NSWLR 356, [44] per Basten JA (Macfarlan JA agreeing).

^[4] Ibid, [9], [14]–[22], [41], [44], [49]–[51], [66] per Basten JA, Macfarlan JA agreeing, see also [108] per Sackville AJA; Allianz Australia Insurance Ltd v Rutland [2015] NSWCA 328, [10] per McColl and Meagher JJA, Macfarlan JA agreeing.

^[5] [2009] NSWSC 875; (2009) 53 MVR 420, [80]–[82] per Hoeben J.

^[6] [2009] NSWSC 881; (2009) 53 MVR 377, [77] and [85] per Johnson J.

^[7] Motor Accidents Injuries Act 2017 (MAIA), s63(3A); McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163; (2008) 71 NSWLR 609 per Allsop P, Giles and Basten JJA; Frost v Kourouche (2014) 86 NSWLR 214, [9].

^[8] QBE v Miller [2013] NSWCA 442; (2013) 67 MVR 322, [36] per Basten JA (Miller); Buck v Bavone [1976] HCA 24; (1976) 135 CLR 110, 118–119 per Gibbs J.

^[9] Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; (2004) 78 ALJR 992, [38] per Gummow and Hayne JJ; and applied in Miller, above note 8, [36].

^[10] Miller, above note 8.

^[11] [1944] HCA 42; (1944) 69 CLR 407, 432.

^[12] Miller, above note 8, [36].

^[13] NRMA Insurance Limited v Mulcahy [2017] NSWSC 1499.

^[14] Ibid, [27]–[28].

^[15] [1995] HCA 58; (1995) 184 CLR 163.

^[16] Ibid, [14].

^[17] [2001] HCA 30; (2001) 206 CLR 323.

^[18] Ibid, [82].

^[19] [2015] NSWCA 211; (2015) 71 MVR 514.

^[20] Ibid, [95] per Gleeson JA, Macfarlan and Leeming JJA agreeing.

^[21] [2014] NSWCA 22; (2014) 66 MVR 152, [27] per Leeming JA, Tobias AJA agreeing.

^[22] Wingfoot, above note 2.

^[23] Ibid, [55].

1 ^[24] See, for example, Frost v Kourouche (2014) 86 NSWLR 214, [2] and [40]; and Zahed v IAG Limited t/as NRMA Insurance [2016] NSWCA 55; (2016) 75 MVR 1, [34].

1

^[25] (2012) 61 MVR 443.

^[26] Ibid, [19]–[22].

^[27] [2015] NSWCA 211; (2015) 71 MVR 514.

^[28] Ibid, [109].

^[29] (2013) 249 CLR 332; [2013] HCA 18.

^[30] Ibid, [68].

^[31] Ibid, [76].

^[32] [2017] NSWSC 1346; (2017) 82 MVR 1, per Fagan J.

^[33] Commissioner of Taxation v Futuris Corporation Limited (2008) 237 CLR 146; [2008] HCA 32, [88]–[92].

^[34] Brimelow v Sharpe [2012] NSWCA 345, [33] per MacFarlan JA.

^[35] AAI Ltd trading as GIO v Cooley [2016] NSWSC 434; (2016) 75 MVR 212.

^[36] IAG v Priestly [2019] NSWSC 1185, [21].