Facts

The Personal Injury Commission (PIC) cannot exercise federal jurisdiction, which includes the power to determine disputes between States, or residents of different States, or a State and a resident of another State.

Initially the PIC refused to hear anything involving a resident of another State and a NSW Insurer, where the NSW Insurer was a private company (and legally could never be considered to the ‘the State’). The District Court determined that concern was erroneous in law, in Stanton v Winning (a decision of Priestley SC DCJ involving NRMA, from 11 April 2022) and Condon v Bartley; Hayes v RACQ Insurance; Smith v Allianz Australia Insurance Ltd; Ward v QBE Insurance (Australia) Ltd; Hackett v Allianz Australia Insurance Ltd (a decision of Wilson SC DCJ of 22 July 2022).

Two claimants (Islam and Worldon) were injured in accidents in NSW, in each case caused by a driver in a Victoria registered vehicle. TAC (Transport Accident Commission) is the sole CTP insurer for the state of Victoria. The PIC application in Islam involved a dispute about whole person impairment and minor/non minor injury, and the PIC application in Worldon involved an assessment of damages.

The PIC decided that it could not determine disputes in the cases, because they involved the exercise of Federal Jurisdiction, and compelled the parties to seek leave of the District Court to hear the matter instead of the PIC (section 26(1) of the PIC Act), or for the District Court to remit the matter to the PIC for determination if satisfied the PIC had jurisdiction to do so.

Initially proceedings were before Judge Phillips – in his capacity as a District Court Judge, not as President of the PIC. He asked the parties for written submissions on 3 questions, namely:

1. Is the PIC a Court?
2. Is the PIC decision maker exercising judicial or administrative power?
3. Is the TAC an emanation of the Crown in right of the State of Victoria?

At the suggestion of senior counsel for one of the applicants, as constitutional matters were raised (namely whether or not the PIC was a court), the NSW Attorney General (AG) intervened in the proceedings to assist the Court. Ultimately, the AG’s submissions on all 3 questions were adopted by all parties.

Is the PIC a Court of State? Does TAC = State of Victoria?

The AG submitted, and the Judge agreed, it was not necessary to decide those 2 questions. There is a well established principle of necessity which applies to constitutional questions. That principle is that unless a state of facts exists which makes it necessary to decide a constitutional question to do justice to a case and determine the rights of the parties, then such issues should not be determined.

Because the parties agreed, and the Court found, that a PIC decision maker wasn’t exercising judicial power in the two circumstances involved in these cases, then it was unnecessary to consider whether the PIC was a Court of a State, or whether the TAC was an emanation of the Crown in right of the State of Victoria.

Judicial or Administrative Power?

The fundamental character of judicial power is ‘as a sovereign or governmental power exercisable … independent of the consent of those whose legal rights or legal obligations are determined by its exercise’[1]. Judicial power is binding and authoritative.

In addition, a Court rendering a final judgment

‘quells the controversy between those parties. The rights and obligations in controversy, as between those persons, cease to have an independent existence: they ‘merge’ in that final judgment’[2]

The Court noted the PIC’s decision regarding an assessment of damages is ‘binding’ on the insurer only where the insurer has admitted liability, and only if the claimant accepts the amount of damages within 21 days of the issue of the PIC certificate of assessment (MAIA s7.38(2)). Even though the PIC Acct provides that an amount ordered to be paid by the Commission can be certified and filed in a court of competent jurisdiction, and that such a certificate operates as a judgment of that court (PICA s59), the amount awarded is only able to be certified if the parties accept it. Claimants who don’t accept an award can commence proceedings (eg s6.31(1)(b)) and ask a Court to ‘quell their controversy’.

Therefore the Court held that the power exercised by a PIC Member in a damages assessment isn’t judicial power.

In a medical assessment of the degree of WPI, or existence of a non-minor injury, the assessor issues a certificate, and his Honour noted that s7.23 MAIA provides that:

'The certificate is, in any court proceedings or in any proceedings in connection with a merit review under Division 7.4 or a claims assessment under Division 7.6—

(a)   prima facie evidence of any matter certified as to the degree of impairment of earning capacity of the injured person as a result of the injury concerned, and

(b)   conclusive evidence of any other matter certified.'

There is Federal Court authority that the existence of judicial power is not established by the existence of a conclusive evidence provision.[3]

The formation of an opinion as to legal rights and obligations may be an element in the exercise of administrative power. The Court noted that in  Attorney-General (Cth) v Breckler the High Court[4] observed that a determination which ‘constitutes the factum by reference to which’ legislation operates to confer crucially enforceable rights and liabilities does not necessarily involve the exercise of judicial power.

The AG submitted that a medical assessor’s decision isn’t binding or authoritative in the sense that the parties can refer the medical dispute for assessment again (albeit only once, and on prescribed grounds), but a court, a merit review or the PIC can refer a matter for further assessment at any time (eg s7.23 and s7.24 MAIA). The standards applied by Medical Assessors in making decision are principally medical standards, and not legal ones. In determining whether a claimant has suffered a non minor or minor injury, an Assessor has to determine if an injury conforms to a definition of injury by evaluating medical evidence and by the exercise of clinical judgment. The Court noted that Medical Assessors aren’t lawyers, and they aren’t free from influence in the exercise of their functions, because under the legislation, they are subject to the general control and direction of the President (s36(1) PICA). 

Not Judicial Power – no jurisdictional problem

Weber SC DCJ held that the PIC erred when it considered it may lack jurisdiction to determine either a damages assessment, or a medical assessment involving WPI/threshold injury questions. Therefore the parties didn’t require leave to bring their proceedings before the District Court as there was no intrusion of federal jurisdiction, and so the summons were dismissed.

As a bit of a sting in the tail for the applications on the summons, despite being forced into Court by the PIC, they didn’t get an order for costs (the Court determining there should be no order as to costs).

Implications

Hopefully this decision will ‘quell the controversy’ about the PICs ability to hear and determine claims involving residents of different states, or disputes involving corporations which may stand in right of a State other than NSW and residents of NSW.

The decision sits well with the decision of the NSW Court of Appeal in Searle v McGregor [2022] NSWCA 213, which was decided on 26 October 2022, but which wasn’t referred to in Weber’s judgment (presumably the AG wasn’t aware of it). See our previous case note.

[1] TCL Air Conditioner (Zhongshan) Co Ltd , Judges of the Federal Court of Australia (2003) 251 CLR 533

[2] Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507.

[3] Deputy Commissioner of Taxation v Buzadziz (2019) 348 FLR 213

[4] (1999) 197 CLR 83, per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ