The Queensland Supreme Court has recently ruled that once an
insurer agrees to fund a claimant's reasonable and appropriate
rehabilitation pursuant to section 51 of the Motor Accident
Insurance Act 1994 (Qld) ('MAIA'), that decision
cannot be rescinded, even in circumstances where strong later
acquired evidence indicates probable fraud on behalf of the
The applicant was 16 years old when he sustained catastrophic
injuries in a motor vehicle accident on 25 September 2013. The
vehicle in which the applicant was travelling contained his two
parents and two siblings. Police attending the accident scene were
suspicious as to who was driving the vehicle. The applicant's
version of events was always that his father was driving.
The respondent insurer, mindful of the applicant's youth and
disabilities, was prepared to meet the reasonable and appropriate
cost of the applicant's rehabilitation pursuant to section
39(1)(a)(iv) of the MAIA without admitting liability. Minimal
police documentation was available at the time of this
Police investigations were subsequently further advanced, and it
was revealed that an extensive amount of blood all over the
driver's side airbag belonged to the applicant, not his father.
This was consistent with evidence that it was the applicant who
suffered facial injuries and abrasions whereas the applicant's
father did not have injuries that would readily account for his
bleeding to such an extent as was shown in the photographs. Police
photographs also depicted the driver's side seat in a position
consistent with the person driving having been removed through the
rear of the vehicle.
As a result of these investigations, the respondent insurer
decided to cease rehabilitation services. The applicant brought an
application for injunction to stop the cessation of
The respondent insurer relied on section 24AA of the Acts
Interpretation Act 1954 ('AIA'), which states that if
an Act authorises or requires the making of a decision, the power
included the power to amend or repeal the decision. Her Honour
noted section 39(1)(a) MAIA does not require the insurer to make a
decision to grant rehabilitation, and if an insurer could change
its decision to provide rehabilitation when it wished pursuant to
section 24AA AIA, there would seem little room for the application
of section 51(7)(b) MAIA.
Justice Dalton noted that the physical circumstances of the
crash site and DNA evidence made a strong case that it was the
applicant rather than his father who was driving. However, Her
Honour also noted there would be no definitive finding as to
whether or not there had been fraud until a trial.
The applicant had no assets and did not offer any security to
the respondent insurer, should it incur loss due to the injunction.
The respondent insurer had already expended a significant sum on
rehabilitation and any further amount spent would likely be
However, Her Honour took account of medical opinions that stated
there was some hope of improvement and it was important for the
applicant to receive rehabilitation care up to the second
anniversary of the subject accident. She thought it would be tragic
if the applicant lost some chance of medical improvement because he
could not afford therapy, and this could not be measured in
Justice Dalton found the balancing of convenience very
difficult, but found the latter factor weighed most heavily in her
discretion. She ordered the respondent insurer was enjoined from
ceasing any rehabilitation services pursuant to section 51(3) MAIA
until the second anniversary of the accident.
This decision has illustrated a defect in the drafting of the
rehabilitation provisions in the MAIA. The legislation does not
allow for circumstances where an insurer has been induced by fraud.
As a result, insurers will no doubt err on the side of caution when
making rehabilitation decisions in the early stages of claims. The
practical effect will mean in some cases seriously injured
claimants will be refused rehabilitation by an insurer in any
matters where there is evidence that suggests the claimant may not
be successful on liability.
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.
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