Allianz Insurance Australia Limited (Allianz) has been
successful in the recovery of compensation money paid to a claimant
for false and misleading representations made by the claimant for
the purpose of his motor vehicle claim.
Background
Mr Yu, the defendant, was injured in a motor vehicle accident on
31 July 2013.
As a result of the motor vehicle accident, he alleged that he
suffered a severe psychological injury. Allianz’s own medical
experts assessed Mr Yu’s whole person impairment above the
non-economic loss threshold and in March 2015, the claim settled
for $750,000 inclusive of costs.
Following the settlement of his claim, Mr Yu’s wife, Ms
Chung, commenced her own claim for damages for an alleged
psychological injury arising from the motor vehicle accident.
Ms Chung, when assessed on 11 October 2017 by a PIC Assessor for
the purpose of her claim, reported a history that significantly
contradicted Mr Yu’s evidence in his own claim. This caused
Allianz to undertake further investigations revealing the following
evidence:
i. That between February 2014 to April 2014, Mr Yu worked as a
teacher at a Korean school which he did not disclose;
ii. That in April 2014, Mr Yu completed an application form with
the Department of Family and Community Services for public housing
requiring him to confirm his understanding of the questions
asked;
iii. That in January 2015, Mr Yu approached an architect to
design a house for him and dealt with him directly on a number of
occasions which included discussions about money;
iv. That in early 2015, Mr Yu was listed as a primary borrower
on a mortgage for a property in Terrigal;
v. That in March 2015, following settlement of his claim, Mr Yu
applied for a loan from a bank to purchase a property in Thornleigh
which as part of his loan application, listed him as having been
employed as a Marketing Director in a full time capacity since
January 2012;
vi. That on 15 May 2015, Mr Yu completed a rent subsidy
application form and did not disclose any assets even though he had
received his settlement money;
vii. That in August 2015, five months following the settlement
of his claim, Mr Yu engaged a contractor to build a new home and
was actively involved in all aspects of the construction
process.
Allianz subsequently alleged that Mr Yu made false and
misleading representations with respect to his psychological
condition for the purpose of achieving a financial gain. Allianz
commenced proceedings against Mr Yu in the tort of deceit and
pursuant to section 118 of the Motor Accidents Compensation Act 1999
(NSW) (MACA).
Judgment
Justice Weinstein accepted that Mr Yu breached section 118 of
MACA for the following reasons:
i. That for approximately one year, from April 2014 until the
settlement on 9 March 2015, Mr Yu, assisted by Ms Chung, knowingly
and falsely misrepresented his psychiatric condition to Allianz and
medical practitioners pursing a claim for damages to which he knew
he was not entitled.
ii. That the totality of the documentary and oral evidence
adduced by Allianz, which dated back to 2014, demonstrated that Mr
Yu was able to conduct himself in largely a normal fashion, without
cognitive impairment or assistance, throughout 2014 and up to
settlement in 2015. On this basis, Weinstein J made adverse
credibility findings against Mr Yu and Ms Chung given their own
oral evidence contradicted the documentary evidence and therefore
could not be accepted.
His Honour highlighted his findings relating to credibility were
not based solely on Mr Yu’s conduct in the Courtroom, but
rather, based on the documentary evidence which could not be
satisfactorily explained by either Mr Yu or Ms Chung. It was
further noted that several witnesses gave evidence that Allianz
relied heavily on the medical assessments made by doctors, which
were based on Mr Yu’s misrepresentations.
Dr McClure, psychiatrist, prepared a report dated 26 August 2021
and concluded that with the new information obtained by Allianz he
would not have regarded Mr Yu a credible historian and would not
have accepted that Mr Yu had a diminished cognitive ability or that
his depression was dysfunctional. He would have assessed whole
person impairment (WPI) at 5%. This is in comparison to Assessor
Cassidy who assessed Mr Yu at 28% WPI during Mr Yu’s initial
proceedings. The result being that Mr Yu would not be entitled to
damages for non-economic loss.
Justice Weinstein ordered Mr Yu to pay Allianz $670,000 with
interest plus costs.
This decision confirms that section 118 of MACA requires
consideration of not only a claimant’s own credibility based on
their oral evidence but the totality of the evidence as a
whole.
It furthermore confirms that in circumstances where section 118
of MACA is satisfied, an insurer is entitled to recover the
difference between the damages a claimant received and the true
value of the claim had they not engaged in false and misleading
conduct.
It is important to note that this decision analyses the
requirements for fraudulent claims under section 118 of MACA,
however the principles apply equally to claims under the Motor Accident Injuries Act 2017 (NSW)
(MAIA) with an identical provision namely section 6.42. You can
read the full Judgment here.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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