CIC Allianz Australia Limited v Daniel Luke McDonald & Ors [2012] NSWSC
Supreme Court of New South Wales1
In Brief
- An Assessor is obligated to provide adequate reasons regarding future economic loss.
- Non-compliance of s 126 of the Motor Accidents Compensation Act (the Act) may result in the certificate being set aside and reassessment with a different assessor.
Background
The matter arises out of an administrative law review of an assessment of damages by CARS Assessor Goudkamp.
The claimant alleges he sustained a cervical injury causing persistent headaches and pain and stiffness in his neck as a result of a motor vehicle accident. At the time of the accident, the claimant was employed as a carpenter.
On 1 December 2010, Assessor Goudkamp handed down his assessment of damages in the amount of $535,000.
The insurer took issue with the assessment of damages and sought judicial review, alleging that the Assessor:
- erred in failing to provide adequate reasons after disregarding the insurer's accountants' report;
- failed to provide adequate reasons when assessing future economic loss;
- erred in failing to provide adequate reasons after disregarding medical evidence; and
- erred in the assessment of future commercial care.
The Judgment
The matter was heard by his Honour Justice Hidden on 8 April 2011. His Honour handed down his judgment on 13 June 2012.
The judgment as a whole provides a useful summary of the relevant case law in respect of providing reasons in assessing damages under the common law and in conjunction with the Act.
His Honour found for the insurer and dealt with each alleged error in turn. The Assessor's certificate was set aside and the matter was remitted for assessment by a different assessor.
First alleged error – accountants' report
The insurer alleged that the Assessor had failed to provide reasons for his assessment of future economic loss as required by s 94(5) of the Act and cl 18.4 of the Motor Accident Authority Guidelines.
His Honour noted that the Assessor's findings for future economic loss were based upon medical and lay evidence, and that the Assessor had not provided adequate reasons in giving the accountants' report "little weight".
The insurer's report was disregarded by the Assessor as he believed the authors relied too heavily on the claimant's tax returns and business records, made erroneous assumptions, and did not fully appreciate the claimant's symptoms.
His Honour found that the Assessor in fact gave the accountants' report no weight at all and simply put it aside without providing adequate reasons for doing so. The report's analysis based upon the financial records was not even mentioned, let alone addressed.
His Honour found that there was an error of law as alleged by the insurer.
Second alleged error – assessment of future economic loss
The insurer alleged that the Assessor had failed to correctly calculate future economic loss and provide reasons for his assessment as required by s 126 of the Act.
The Assessor allowed a figure of a little under $352,000 for future economic loss. He appeared to formulate this figure based upon a comparison of the number of hours the claimant worked before and after the accident at a given rate per hour.
His Honour noted that the Assessor based his assessment upon a postulated weekly wage loss, rather than an hourly rate. This was also based upon the assumption that, but for the accident, the claimant would have continued to work as an employed carpenter rather than starting his own carpentry business.
His Honour found that there was an internal inconsistency in the figures upon which the Assessor relied and failed to expose the assumptions upon which the award was based. As such, his Honour found a fresh assessment was required.
Third alleged error – medical evidence
The insurer submitted that the Assessor simply accepted the claimant's medical evidence where it was in conflict with the opinions of the insurer's medico-legal doctors, which fell well short of his statutory duty to provide reasons.
His Honour carefully considered whether the Assessor had met his obligations pursuant to s 126 of the Act.
His Honour found that there was no error of law as alleged by the insurer. His Honour noted that the Assessor's findings were based upon medical and lay evidence and that the Assessor's reasons, although sparse, were adequate to justify the conclusions reached.
Fourth alleged error – assessment of future commercial care
The Assessor awarded one hour per week of commercial care for the period of the claimant's life expectancy, equating to a little over $32,000.
The insurer submitted that the assessor failed to identify or apply any of the principles found in Miller v Galderisi 2 and gave no reason for selecting the figure of one hour per week.
His Honour opined that the reasons given by the Assessor were barely adequate but was not a matter which he needed to determine.
Implications
This case illustrates the insurer successfully seeking administrative relief, particularly when alleging failure to provide adequate reasons. It is accepted that claims assessors are not required to give elaborate reasons, as found in Allianz Australia Insurance Ltd v Kerr 3 . However, this does not relieve an assessor of the obligation of conveying reasons, which s 69 requires.
Without having evidence that addresses all injuries sustained by a claimant and their impact upon the claimant's capacity, a defendant/insurer is at risk of not establishing a residual earning capacity. 4 In this instance, the insurer obtained a vital accountants' report that discharged the evidentiary onus upon it that the claimant has a greater residual earning capacity. His Honour noted that the fact remained that the Assessor's reasons failed to deal with important evidence.
Footnotes
1 Hidden J
2 [2009] NSWCA 353 at [18]–[24]
3 [2012] NSWCA 13
4 QBE Insurance (Australia) Limited v Durkin and
Ors [2012] NSWSC 72
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