Allianz Australia Insurance Ltd v Tarabay  NSWSC 141
|Judgment date:||1 March 2013|
|Jurisdiction:||Supreme Court of NSW1|
- In determining whether a claim should be granted a discretionary exemption from the Claims Assessment and Resolution Service (CARS) under s 92(1)(b) of the Motor Accidents Compensation Act 1999 (MACA) for a "false or misleading statement in a material particular", the Claims Assessor (Assessor) must answer the right question, being, whether an exemption should be granted, rather than whether the insurer has proved fraud on behalf of the claimant.
- In the event that the wrong question is asked and answered by an Assessor, this may be a jurisdictional error and error of law on the face of the record due to the Assessor reaching a concluded view as to the substance of the matter alleged, without having heard the parties in full on the issue.
The claimant was involved in a motor vehicle accident on 6 November 2007. The insurer admitted liability for the accident and sought a discretionary exemption from CARS under s 92(1)(b) MACA, on the basis that the claim was "not suitable for assessment" before CARS.
The insurer sought the exemption on the basis that the claimant had made a statement knowing that it was "false and misleading in a material particular", pursuant to s 117 of the MACA and in accordance with cl 14.16.11 of the Claims Assessment Guidelines. In this regard, the insurer noted the claimant's reliance upon the following documents, which formed the basis for the exemption being sought:
- A PAYG Payment Summary for the year ending 30 June 2006 following which a letter from the subject employer confirmed that the claimant was employed after that taxation year and that he had earned significantly less than that reflected in the PAYG Payment Summary;
- A letter from a subsequent employer stating that the claimant had been employed for 8 months from 16 April 2007, however, the claimant's 2007 Taxation Return did not reveal any earnings from this employer;
- Further, the claimant alleged on his résumé that he had been working with this employer between 10 and 22 months before they had commenced trading;
- With regard to a third employer, there was a discrepancy as the claimant indicated that he had never worked for this employer despite the fact that this employer wrote a letter confirming that the claimant had been a fulltime employee for 4 years earning $1,150 per week. It was later discovered that the claimant's brother was the sole secretary/director and shareholder of this business.
The Assessor accepted the evidence of the claimant that he did not know how the PAYG Payment Summary for the year ending 30 June 2006 came into existence. Further, she noted that inconsistencies were a common occurrence at CARS and that these issues could be resolved upon cross-examination in CARS.
Of significance, in conclusion the Assessor stated:
"I am not satisfied that the claimant or any other person has made a statement knowing that it is false and misleading in a material particular in relation to all of the headings pursuant to s 117 of the Act."
The insurer sought a judicial review of the Assessor's decision in the Supreme Court.
Rothman J, commenting on the Assessor's Determination, noted that there was a significant difference between inconsistent evidence of earnings and evidence of potential forgery. Further, he noted at  that:
"The only conclusive means of determining the forgery, and its source, is by compelling production, compelling answers under oath, and cross examination of Mr Tarabay (the claimant) and third parties. That course is impossible in an assessment."
Whilst Rothman J considered that it would be difficult to come to the conclusion reached by the Assessor, the court would not review her exercise of discretion as that would be dealing with the merits of the claim.
Indeed, as the insurer sought a judicial review of the decision, which it was entitled to do, Rothman J noted at  that the issue before the Assessor was whether an exemption should be granted, not whether the insurer had proved fraud, which was the question that was asked and answered by the Assessor.
Rothman J was of the view that, as the decision related to an interlocutory proceeding, the insurer was not required to "prove the fraud alleged but to satisfy the Assessor, on the basis of an allegation, reasonably put, of fraud so that the matter was not one that should be heard in a CARS Assessment" 2 . However, the Assessor reached a concluded view as to the substance of the matter alleged, without allowing the parties an opportunity for a full hearing on the issue and this constituted jurisdictional error and error of law on the face of the record as a result.
Whilst Rothman J was of the view that the Assessor did not satisfy the criteria for a determination of bias, he nevertheless determined that an Order should be made that the Assessor was no longer to be involved in the matter.
At  Rothman J considered that the Assessor incorrectly determined whether fraud was proved instead of determining whether, given the nature of the allegations and their reasonableness, the matter ought be granted a Certificate of Exemption. Accordingly, he made an Order of Certiorari quashing the previous CARS Certificate.
When determining whether a matter should be exempted on a discretionary basis, Assessors are not required to determine the issues in dispute, but, rather, determine whether CARS is the correct forum for assessment of the claim considering the limitations of the CARS jurisdiction.
In this regard, an Assessor should consider whether or not the issues alleged by an insurer, or claimant, will be able to be sufficiently explored in the CARS jurisdiction, including whether subpoenas should be issued and whether the formality of a court for cross-examination purposes is required.
Whilst it is clear that cl 14.16.11 of the Claims Assessment Guidelines does not require an insurer to prove that the claimant has made a "false or misleading statement in a material particular to the claim", there nevertheless must be a reasonable assertion upon which an Assessor can make their decision to exempt a claim.
Accordingly, the party seeking to exempt the claim from CARS should explain the procedural reasons why the claim should proceed to court, in addition to focusing on the circumstances of the claim which make it unsuitable for assessment.
1 Rothman J
2 at 
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