Insurance Australia trading as NRMA v Ural [2015] NSWSC 620

Supreme Court New South Wales

Medium Neutral Citation: Insurance Australia trading as NRMA v Ural [2015] NSWSC 620 Hearing dates: 19 May 2015 Date of orders: 29 May 2015 Decision date: 29 May 2015 Before: Young AJA Decision: See [32] Catchwords: ADMINISTRATIVE LAW – review of Principal Claims Assessor's decision to decline to exempt case from assessment process

DECISION IN CONFLICT WITH COURT OF APPEAL – decision set aside Legislation Cited: Motor Accidents Compensation Act 1999 Cases Cited: Haynes v Hirst (1927) 27 SR 480 Nominal Defendant v Gabriel [2007] NSWCA 52; 71 NSWLR 150 Smalley v Motor Accidents Authority of New South Wales [2013] NSWCA 318; 85 NSWLR 580 Category: Principal judgment Parties: Insurance Australia Limited trading as NRMA Insurance - plaintiff Birol Ural – first defendant Belinda Cassidy in her capacity as Principal Claims Assessor of the Motor Accidents Authority of New South Wales – second defendant The Motor Accidents Authority of New South Wales – third defendant Representation: Counsel: M A Robinson SC with J Gumbert – for the plaintiff Defendants – submitting appearances filed

Solicitors: Sparke Helmore Lawyers – for the plaintiff Richard Kelly, Acting Crown Solicitor – for the defendants File Number(s): 2015/00089167

Judgment 1. This is an application for certiorari against the second defendant the Principal Claims Assessor of the Motor Accidents Authority of New South Wales. 2. There are two other defendants, Mr Ural, the claimant against the plaintiff (first defendant) and the Motor Accidents Authority (third defendant). All the defendants have filed submitting appearances. 3. The plaintiff is the insurer of a party to a motor vehicle accident at Smithfield on 9 April 2013. The first defendant made a claim pursuant to the Motor Accidents Compensation Act 1999 (the MAC Act). Under Section 81 of the MAC Act it is the duty of an insurer such as the plaintiff to give a written notice to the complainant as expeditiously as possible whether it admit or deny liability for the claim but in any event within three months after the claimant gave notice of the claim. 4. Under Section 81(3): If the insurer fails to comply with the section, the insurer is taken to have given notice to the claimant wholly denying liability for the claim. 1. The scheme of the MAC Act is that unless the claim is exempt, the claim is processed administratively under the Act and the adjudication of the claim is binding on the insurer. If the claim is exempted from the Act then it may proceed in the District Court in the traditional way. 2. There have been previous proceedings in this court in respect of this claim, but it is not necessary to refer to them. 3. The plaintiff made application to have the claim treated as exempt. 4. Section 92 of the MAC Act provides as follows: 1 A claim is exempt from assessment under this Part if: the claim is of a kind that is exempt under the MAA Claims Assessment Guidelines or the regulations … 2 If a claim is exempt from a claim under this Part, the Principal Claims Assessor must issue the insurer and claimant with a certificate to that effect … 1. The basal facts are not in dispute. 2. The plaintiffs failed to give the notice required under Section 81 of the MAC Act within the required three months. The consequence was that Section 81(3) came into play deeming there to be a notice to the claimant wholly denying liability for the claim. 3. After that deemed notice, the plaintiff made some payments for medical services rendered to the claimant. These payments totaling $8,170.15 were made both before and after the letter of 3 March 2014 referred to in the next paragraph. At least some of the payments were noted as 'without prejudice' in the plaintiff's records, though there is nothing to suggest that this fact was communicated to the claimant. 4. On 3 March 2014 some eight months after it received the claim, the plaintiff wrote a letter to the claimant's solicitor entitled 'SECTION 81 NOTICE' denying liability. 5. Those guidelines provide that the Principal Claims Assessor shall issue a certificate of exemption where inter alia: 8.11.1 Liability is expressly denied by the insurer, in writing, but only in circumstances where liability is denied because the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle is denied. 1. The Principal Claims Assessor in the instant case, for reasons given on 22 January 2015, declined to issue the certificate. Her basal reasoning was that after the deemed denial of the insurer the insurer paid monies on behalf of the claimant and that amounted to an admission of liability. 2. The claimant disputes that reasoning. It says that monies paid by the insurer were for rehabilitation and the Act specifically excludes such payments as constituting an admission of liability, vide MAC Act Section 84(3). There was debate both in the Primary Claims Assessor's reasons and before me as to whether the payments made could be classed rehabilitation or not. One complicating factor was that the first defendant went to Turkey after the accident and incurred some medical expenses in Turkey which the insurer reimbursed. 3. Another complication was the fact that the insurer marked the payments in its own books 'without prejudice'. There was some debate before me as to what that meant. The words 'without prejudice' have a particular meaning in law when used in connection with litigation namely that what was said 'without prejudice' cannot be used in evidence. Outside that sphere it is doubtful whether one can do an act and yet claim that that act is not to alter its legal rights. See Haynes v Hirst (1927) 27 SR 480. 4. However, in commerce, sometimes the words 'without prejudice' are used in a different sense. For instance when one had an American visa and one renewed one's passport the Americans would purport to revoke one's visa 'without prejudice' and then issue a new visa in one's new passport. 5. In any event, the fact that the plaintiff marked its file 'WOP' means little when there is no evidence that that notation was communicated. 6. As to the payments themselves, it seems to me that, in the light of the provisions of the MAC Act requiring insurers to be sympathetic towards the payment of the claimant's apparent lawful consequential expenses, it is assuming too much to make a finding, especially in the fact of clear denials, that there has been an admission of liability. 7. There is however no sense in exploring these matters further because the decision of the Court of Appeal in Smalley v Motor Accidents Authority of New South Wales [2013] NSWCA 318; 85 NSWLR 580 makes the whole argument otiose. Smalley was decided by a court consisting of Meagher, Barrett and Leeming JJA. Leeming JA gave the lead judgment in which the other judges concurred. 8. At [70] on page 599 Leeming JA said: Clause 8.11.1 requires attention to be drawn to a particular document: the S81 notice. Whereas here there is no actual S81 notice, but a deemed S81(3) notice, Cl 8.11.1 will always be satisfied. That is not altered by the fact that the insurer chooses, outside the time constraints imposed by S81, subsequently to admit the fault of its insured. Nor is it altered by the fact that the insurer chooses to describe the letter evidencing that submission as a 'SECTION 81 NOTICE'. 1. Accordingly, anything that happened after the denial in the deemed S81 notice is apart from Section 81(4), quite irrelevant because, 'there is nothing in the Act to alter the effect of a S81 notice or deemed notice' once it has been given, see Nominal Defendant v Gabriel [2007] NSWCA 52; 71 NSWLR 150,180 [143]. 2. Section 81(4) says 'nothing in this section prevents an insurer from admitting liability after having given notice denying liability or after having failed to comply with this section.' 3. In Smalley at [66] – [67] 1598, the Court of Appeal said that apart from Section 81(4), the deeming effect of Section 81(3) could not be displaced. Further Section 81(4) is not an empowering section and 'does not purport to detract from the deeming provision in Section 81(3)'. 4. Accordingly, there was no alternative course open to the Principal Claims Assessor but to issue a certificate of exemption. 5. Accordingly, the plaintiff is entitled to have the decision of the principal claims assessor quashed by way of certiorari. 6. I am bound by decisions of the Court of Appeal and thus I can reach my decision in this case quite easily. 7. However, it must be noted that in Smalley it was assumed that a deemed notice under Section 81(3) must be taken to be a deemed notice in writing. 8. Further, the construction of the MAC Act in Smalley means that as long as the insurer fails to give a Section 81 Notice within three months, it is entitled to an exemption certificate for the asking. If the third defendant wishes to avoid this consequence, it will need to amend its guidelines. 9. Traditionally, once certiorari was granted it was necessary for the claimant to apply for and obtain a mandamus if it wanted to have the question re-examined by the administrative authority. However, for some years now courts have taken a short cut and merely ordered that the administrative authority re-examine the matter and decide it according to law. 10. As to costs, the plaintiff has succeeded and thus, prima facie, is entitled to costs. However the basic point on which it has succeeded was not to the fore of its argument either here or below. I do not consider that this is sufficient to deprive the plaintiff of costs. The second defendant should have known what the Court of Appeal said in Smalley and applied it. The first defendant submitted and should not have to pay costs. The third defendant is responsible for the second defendant and is the appropriate entity to pay costs. 11. Accordingly, I order: 1. That the decision of the Principal Claims Assessor of the 27 January 2015 to refuse an application to exempt the first defendant's motor accident claim from the operation of the Claims Assessment and Resolution Service of the third defendant be quashed. 2. I remit the said question to the Principal Claims Assessor to decide according to law.