Judgment date: 6 July 2010. Allianz Australia Insurance Limited v Roger Ward. Supreme Court of New South Wales1
- Claims under s 128 of the Motor Accidents Compensation Act 1999 and s 15B of the Civil Liability Act 2002 must be assessed separately rather than on a global basis.
- The six hour per week threshold in both s 128 of the MAC Act and s 15B of the CL Act is a continuous threshold which continues to apply beyond the first six months and into the future.
- The legal retirement age in Australia remains 65.
The Supreme Court of New South Wales delivered judgment in the matter of Allianz Australia Insurance Limited v Roger Ward on 6 July 2010.
The decision dealt with a challenge by an insurer from an assessment of damages made by a claims assessor. The insurer sought administrative law relief based upon jurisdictional errors committed by the claims assessor in the assessment of damages.
Broadly, the insurer argued that the assessor fell into error in three respects:
- Failing to properly apply the thresholds in s 128 of the Motor Accidents Compensation Act 1999 (MACA) and s 15B of the Civil Liability Act 2002 (CLA) when assessing future gratuitous assistance.
- In awarding damages for economic loss for the first five days contrary to s 124 of the Motor Accidents Compensation Act 1999 (since repealed).
- In allowing damages for future loss of earning capacity until age 67.
Ultimately, the insurer was successful in establishing error on all three of the above grounds. Justice Hidden called for submissions on what orders should be made and, in particular, whether the claims assessor's certificate of assessment should be set aside and the case remitted to a different assessor for a reassessment of damages.
Supreme Court Judgment
At first instance, the claims assessor assessed the claimant's entitlement to past care at 9 hours per week from the date of the accident until date of assessment. There was no challenge to this aspect of the assessment of damages.
However, the claims assessor awarded future gratuitous assistance at an average of four hours per week for the remaining 43 years in the claimant's life expectancy, without differentiating between gratuitous care provided to the claimant and gratuitous child care replacing those services the claimant could no longer perform.
At paragraph 17 of his judgment, Hidden J made it clear that the claims under s 128 of the MACA and s 15B of the CLA must be dealt with separately given that they are distinct provisions relating to different heads of damage. His Honour stated as follows:
At paragraph 20 of his judgment, Hidden J held that the claims assessor erred by failing to differentiate between the claims under s 128 of the MACA and s 15B of the CLA, as follows:
Justice Hidden then turned to the question of the construction of the thresholds in s 128 of the MACA and s 15B of the CLA respectively.
His Honour concluded that the six hour per week threshold in each provision is a continuous threshold which continues to apply beyond the initial six month period and into the future. His Honour specifically held that the 2008 amendments were designed to overcome the Court of Appeal's decision in Harrison v Melhem  NSWCA 67. At paragraph 32, his Honour stated:
His Honour summarised the current state of the law, succinctly, in paragraph 35 of his reasons, as follows:
The parties accepted that the claims assessor had also erred in allowing past economic loss for the first five days in contravention of s 124 of the MACA.
The error which the claims assessor made was in believing that s 124 had been repealed retrospectively.
However, the accident occurred before the commencement of the amendment and the effect of a transitional provision was that the repeal of the section did not apply to the case.
The assessment conference occurred one day prior to the Federal Government presenting its 2008/2009 Budget in Parliament which included an announcement that the pension age would be increased to 67, phased in from 2017 to 2023.
Given that the parties had proceeded on the assumption that the legal retirement age in Australia was 65, the claims assessor called for further submissions following the delivery of the Federal Budget. The assessor ultimately assessed future loss of earning capacity until age 67, noting that both the Government and the Opposition appeared to support an increase in the retirement age. At paragraph 49 of his reasons, Hidden J held that the claims assessor fell into further error in finding a likely retirement age of 67. His Honour stated:
The decision of Patten AJ relied upon by Hidden J was in a matter of Goodman v Impact Hire Australia Pty Limited  NSWSC 941. At paragraph 11 of his supplementary reasons, Patten AJ held as follows:
Having found that the claims assessor erred on three bases, Hidden J called for further submissions from each party with regard to the relief to be granted. The issue appeared to be whether the entire certificate of assessment should be set aside and remitted to CARS for further assessment or whether the assessor's assessment of damages should be modified to correct the errors which had been identified.
The Supreme Court decision in Allianz Australia Insurance Limited v Ward is an important one given that it provides binding authority to claims assessors and judges with regard to the interpretation of s 128 of the Motor Accidents Compensation Act 1999 and s 15B of the Civil Liability Act 2002.
Firstly, where there are claims both gratuitous services provided to the claimant and for replacement child care services which the claimant can no longer perform himself or herself, each provision must be dealt with separately.
A claims assessor or a court would fall into error if the two claims were addressed on a global basis and, in effect, a single threshold applied.
Interpreted correctly, there is a separate six hour per week threshold under s 128 of the MACA in respect of gratuitous services provided to the claimant and a separate six hour per week threshold in respect of replacement child care services under s 15B of the CLA.
Secondly, the decision in Allianz Australia Insurance Limited v Ward makes it clear that the six hour per week threshold is a continuous threshold which continues to apply beyond the initial six month period referred to in both provisions and continues to apply into the future.
That is, even after the first six months passes, the claimant is only entitled to compensation for gratuitous services for as long as those services exceed six hours per week. No compensation is available to the claimant for any period during which the need for gratuitous services drops below six hours per week. The same principle applies separately to replacement services under s 15B of the CLA.
The decision in Allianz Australia Insurance Limited v Ward is also important because it places the potential increase in the retirement age to age 67 in perspective. The court made it clear that that government policy is only one factor which should be taken into account in assessing a particular claimant's likely retirement age. Regard must also be had to whether there is any evidence that a particular claimant may retire earlier than expected or later than expected. In any event, pending legislation, the current legal retirement age remains at 65.
1. Hidden J
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.