CIC Allianz Insurance Limited v Erturk & Ors [2010] NSWSC 302
Introduction
The questions posed by Campbell JA in Nominal Defendant v Gabriel as to whether a s81 admission can ever be altered by an insurer at CARS and whether a s81 admission made in error can later permit an exemption were the precise questions considered in Erturk.
Facts
A trucking company held a number of policies with CIC Allianz. Two of its trucks were involved in separate and unrelated accidents. The first accident occurred on 22 October 2006 and the second accident occurred on 17 November 2006. A personal injury claim was made as a result of the October 2006 accident by Erturk. For reasons that remain unclear, the trucking company returned to the insurer an accident report form relating to the accident of the November 2006, which was investigated under the mistaken belief the notice concerned the October 2006 accident. Based upon that investigation, a decision was made to issue a s81 notice admitting breach of duty of care.
Discrepancies were identified following the claimant's application for s94 assessment of his claim at CARS and further investigations revealed that the insured driver involved in the subject accident denied he was at fault. A second s81 notice was issued denying liability and an exemption was sought pursuant to s92(1)(a), being a mandatory basis and, alternately under s92(1)(b), a discretionary basis.
The PCA considered the s92(1)(a) application and, while she recognised that the insurer contended it had not amended its s81 notice but issued a fresh notice in relation to the accident giving rise to the claim, she found the first s81 notice was valid on its face.
As there was no obvious error on the notice itself, despite clear evidence if one looked beyond the notice, the PCA felt she had no power to further consider the matter.
The s92(1)(b) fell to the claims assessor for consideration. The precise grounds upon which the insurer sought this exemption are not disclosed in the judgment, although it is clear the insurer argued that liability for the claim was denied. The claims assessor characterised the application as an 'appeal' from the decision of the PCA. As the original s81 notice had been found valid by the PCA, the claim was considered otherwise 'straightforward' because fault had been admitted. This application for exemption was also denied.
Decision
The plaintiff insurer argued that the first s81 notice had not been issued in relation to 'the claim' but in relation to another accident. Justice Simpson accepted that the first s81 notice was issued under a misapprehension but found no administrative error on the part of the PCA because she had correctly found she did not have power to look beyond the first s81 notice itself. The fact that the PCA did not have a practical power to make such enquiries could have been a legislative oversight, but the judge did not draw that inference. Her Honour placed reliance upon comments made by Campbell JA in Gabriel to the effect that a s81 notice cannot be amended and there was no power under the Motor Accidents Compensation Act 1999 ("the Act") to set aside a notice issued in error. As such, the PCA's decision to dismiss the application for exemption under s 92(1)(a) was correct.
The grounds relied upon in challenging the s92(1)(b) decision by the claims assessor were also dismissed.
Her Honour found the claims assessor's characterisation of the application as a disguised 'appeal' was correct, despite an acknowledgment that an exemption may be made upon grounds beyond those listed in clause 14.16 of the Claims Assessment Guidelines. Arguments that the claims assessor incorrectly considered himself bound by the s92(1)(a) determination by the PCA and incorrectly considered the s92(1)(b) application an appeal were rejected.
Comment
Careful attention is required when issuing a s81 notice as the consequences of a mistaken notice can be significant. Claimants who may otherwise fail to prove negligence in court can succeed fully at CARS without the issue of liability being considered at all, if they benefit from a mistaken s81 notice. Reconciling this situation with the Act's objective to only compensate compensable injuries is difficult.
Both the Court and the Principal Claims Assessor stressed the importance of the s81 certificate and the absence of statutory power to look beyond that document. It is a simple fact that mistakes do occur from time to time. This case raises the possibility that the time has come to review the form of the s81 certificate. Traditionally, that certificate refers to the date of accident and the allocated claim number before advising the decision on fault. Perhaps a new format is required that includes not only that information but also the place of accident, registration number of the vehicles involved, the name of the insured as well as a brief description of how the accident occurred. It would seem from this decision that a s81 certificate that referred to parties and circumstances that were inconsistent may not amount to an admission for 'the claim'.
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