Zurich Australian Insurance Ltd v Lewis

HER HONOUR: Roger Lewis was sitting in a car parked on the side of the road when an out-of-control four-wheel-drive collided with it from the rear. The force of the collision pushed Mr Lewis’s car forward approximately 30 metres. The car was “crushed” and was written off. Mr Lewis claimed damages for personal injuries incurred as a result of the collision. The compulsory third party insurer of the driver of the other vehicle, Zurich Australian Insurance Ltd, admitted liability but disputes the extent of the injuries claimed.

The claim is governed by the Motor Accidents Compensation Act 1999 (NSW). Section 131 of that Act provides that no damages may be awarded for non-economic loss unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%. Section 132 provides that, if there is a dispute about that issue, the court cannot award damages for non-economic loss unless the degree of permanent impairment has been assessed by a medical assessor under part 3.4 of the Act.

Mr Lewis was assessed by a medical assessor, Dr Oates, who is an occupational physician. Dr Oates determined that the degree of permanent impairment exceeded 10%. He gave a certificate as to the matters referred for his assessment, assessing Mr Lewis’s degree of permanent impairment at 17% with no contribution from pre-existing or subsequent causes. The component attributed by Dr Oates to injuries to Mr Lewis’s right upper extremity (including elbow, hand and arm) was 8%.

A certificate issued by a medical assessor is conclusive evidence as to the matters certified: s 61(2) of the Act.

Zurich sought review of Dr Oates’s decision, as allowed under s 63 of the Act. That section allows for the referral of a medical assessment to a review panel only on the grounds that the assessment was incorrect in a material respect: s 63(2). Where the Review Panel issues a new certificate, s 61(2) applies to the new certificate with the result that it becomes conclusive evidence as to the matters certified: s 63(6).

The Review Panel determined that Mr Lewis’s degree of permanent impairment was greater than 10%, as had Dr Oates. However, the Review Panel’s findings as to individual injuries were different from those reached by him. Accordingly, the Review Panel revoked Dr Oates’s certificate and issued a new certificate. The Review Panel’s certificate, dated 9 July 2018, assessed Mr Lewis’s permanent impairment at 20% with no contribution from pre-existing or subsequent causes. Contrary to the position adopted by Dr Oates, the Review Panel did not accept that an injury to the left shoulder was caused by the motor vehicle accident.

There is no statutory right of appeal to this Court from a decision of the Review Panel. The only path for challenging such a decision is to seek judicial review on the grounds of jurisdictional error or error on the face of the record, invoking this Court’s jurisdiction under s 69 of the Supreme Court Act 1970 (NSW). Zurich seeks various orders of the kind authorised by that section.

All of the defendants to the summons, including Mr Lewis, have filed submitting appearances (the other defendants are the State Insurance Regulatory Authority and each of the members of the Review Panel). Accordingly, the hearing proceeded without a contradictor. Unusually, the matter was referred to be heard by me on a day when I was sitting as the duty judge.

I have concluded that the summons should be dismissed, for the following reasons.

Mr Lewis initially sought an assessment of permanent impairment in relation to injuries to the neck, right elbow, left shoulder, right hand, right arm, lower back, left leg and an epigastric hernia as well as for scarring. The Review Panel’s assessment of 20% permanent impairment due to the motor accident was based on the injury to the right elbow (19%) and the right ulnar nerve (1%). Zurich seeks review only of that part of the decision relating to the right elbow. In the absence of a contradictor, the authority of this Court to set aside part only of a decision allegedly infected by jurisdictional error was not explored.

As appears to have become commonplace in such matters, the summons set out the insurer’s contentions in a discursive style more in the nature of a pleading than a summons: cf r 59.4 of the Uniform Civil Procedure Rules 2005 (NSW). To a degree, the clarity of the grounds suffered as a result. The Court of Appeal has recently emphasised the importance of a clear formulation of a legal ground on which to grant review: Li v Attorney General for New South Wales [2019] NSWCA 95 at [7]-[9] per Basten JA; White JA agreeing at [69].

Paragraph 12 of the summons sets out the steps Zurich contends the Review Panel was required to undertake in order to satisfy its statutory obligations and “not fall into reviewable error”.

Paragraph 13 of the summons contends that, in breach of its statutory obligations, the Review Panel fell into error by failing or “failing properly and adequately” to undertake its tasks as set out in paragraph 12 as they relate to the right elbow injury. Specifically, it is contended that the Review Panel failed to:

Paragraph 14 of the summons contends:

The written submissions provided greater clarity and focus. There, it was stated that the assessment is challenged for jurisdictional error and error on the face of the record consisting in “failure by the Review Panel to undertake its statutory duties by applying the guidelines, failing to consider relevant material and failing to provide adequate reasons for its decision”. Zurich’s written and oral submissions were primarily directed to errors described in those terms. There was otherwise significant overlap between the grounds set out above, many being different ways of expressing substantively the same complaint. As the grounds for review were addressed as a single topic in Zurich’s written submissions, I propose to proceed on the same basis.

The method of assessing the degree of permanent impairment of an injured person as a result of an injury caused by a motor accident is addressed in s 133 of the Motor Accidents Compensation Act. Section 133(1) provides that the assessment is to be expressed as a percentage in accordance with part 5.3 of the Act. Section 133(2) provides that the assessment is to be made in accordance with motor accidents medical guidelines issued for that purpose (or, if there are no such guidelines in force, the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th Ed).

Zurich relies on two guidelines in particular, guidelines 1.7 and 1.34. Those guidelines provide:

The burden of Zurich’s complaint is that there was objective evidence of subsequent and unrelated injuries resulting in permanent impairment in the right elbow but that, contrary to the requirements of guideline 1.34, the Review Panel failed to calculate the value of those later injuries. Zurich relied in that context on the decision of Hall J in Nguyen v Motor Accidents Authority of New South Wales [2011] NSWSC 351. Zurich’s written submissions stated that the decision in Nguyen was followed by the Court of Appeal in Dominice v Allianz Australia Insurance Ltd [2017] NSWCA 171 at [56]. That misconceives the import of the Court’s decision in Dominice. Far from “following” the decision in Nguyen, the Court made a point of noting that the remark in question was not a statement of principle but only an observation of fact.

In Nguyen, Hall J had said at [99]:

In the passage of Dominice relied upon by Zurich in the present case, Simpson JA expressed the view (at [56]) that it was an overstatement to characterise those remarks as a statement of principle. Her Honour noted, however, that “it remains necessary, in any individual case, to determine whether, in the circumstances of the individual case under consideration, the secondary injury is caused by or related to the primary injury”. That was said in the context that the injured person was seeking to attribute a secondary impairment to an injury caused by the accident. Justice Basten agreed with the reasons of Simpson JA at [4]. Justice Emmett specifically agreed with her Honour’s remark that Nguyen does not establish a new principle at [94]. His Honour said:

Zurich noted in the present case that the Review Panel referred to Nguyen with respect to the left shoulder disability and the left thigh but not when discussing the right arm injury. I see no error in that approach. Leaving aside the clear statements of the Court of Appeal in Dominice that the remarks of Hall J in Nguyen amount to a statement of fact rather than legal principle, it made sense for the Review Panel to refer to that case in its discussion of the left shoulder disability and the aching in the buttocks and thighs described by Mr Lewis because those complaints reflected pain referred from the injury to the cervical spine. The matters relied upon by Zurich in respect of the right elbow raised no such issue. The observation in Nguyen had no application to the right elbow injury.

More pertinent is the provision of guideline 1.34 that, if there is objective evidence of a subsequent and unrelated injury or condition resulting in permanent impairment in the same region, its value should be calculated.

Zurich identified three post-accident injuries which it submitted had to be assessed in accordance with that guideline. The first occurred when Mr Lewis ventured back to the gym for the first time after the motor vehicle accident. The motor vehicle accident occurred on 1 January 2015. Before then, Mr Lewis used to lift weights as part of his regular exercise regime and had evidently developed considerable strength, bench-pressing 160 kilograms.

In around March 2015 (three months after the accident), Mr Lewis went back to the gym to see whether he could resume weightlifting. He attempted to lift a bar with no weights on it. The bar alone weighs 20 kilograms. That action caused an exacerbation of his elbow pain and the sensation of a tendon or ligament “letting go”. Mr Lewis’s second orthopaedic surgeon, Dr Hughes, later recorded that Mr Lewis had “avulsed the triceps tendon”.

Separately, Mr Lewis had told his treating orthopaedic surgeons, Dr Cass and Dr Hughes, of two occasions in September and December 2015 when he had evidently lost his balance on some stairs. There was a factual issue before the Review Panel as to whether on those occasions Mr Lewis “fell” completely, as Zurich contends is suggested by the wording of a number of medical notes, or merely stumbled but regained his footing, as he contended when examined by the Review Panel. To the extent that Zurich’s submissions take issue with the merits of the Review Panel’s resolution of that factual issue, they are beyond the scope of the present application. In any event, Mr Lewis accepted that each incident resulted in his putting weight on his right elbow, resulting in his experiencing an exacerbation of his elbow pain and feeling “something tear” or “something give”. Zurich’s submissions treat that concession as an acknowledgment of separate, permanent impairment but that was a question for the medically-qualified Review Panel.

Dr Hughes recorded that, following an open triceps repair undertaken by Dr Cass after the gym incident, Mr Lewis “tripped and felt something tear within the back of the elbow” following which “a re-tear of his triceps was identified”. Mr Lewis then underwent a “revision repair”. In December, he “jolted the elbow and felt something give” after which further imaging showed “a triceps which has not healed”.

Concerning the episode at the gym, the Review Panel recorded the following:

As to the alleged falls, the Review Panel recorded:

The material before me included Zurich’s written submissions to the Review Panel (if there were submissions in response from Mr Lewis, they were not provided to me). In those submissions, Zurich highlighted the timing of the falls and the repair procedures, submitting that the surgeries were required “as a result of those incidents, as opposed to the accident”. That submission posed a false dichotomy; the surgery could have been required as a result of both the motor vehicle accident and the relevant subsequent incident.

Further, it was submitted that, between the accident and the incident at the gym, there were no documented complaints of right elbow pain. It was submitted that the “lack of right elbow complaints” between the accident and the gym incident suggested that any accident-related elbow injury was minor or non-existent. At the same time, however, Zurich noted that, on 11 March 2015, a consultation note recorded “recurrent swelling and pain, recent exacerbation after car accident”. It was perfectly open to the Review Panel to accept that note as a record of a complaint that was consistent with Mr Lewis’s account (as recorded by the Review Panel) that the motor accident had rendered the elbow “persistently symptomatic” and that there had already been “severe damage to the triceps tendon” by the time of the later incidents with the result that “minimal trauma” was required to avulse the tendon completely from the bone. Further, as explained below, it is clear that the Review Panel did accept that to be the case.

The Review Panel clearly understood Zurich to be submitting that any permanent impairment at the right elbow did not result from the accident but rather from the three subsequent incidents and that, in accordance with guideline 1.34, a 100% deduction ought to be made for the impact of the subsequent injuries. In my assessment of the evidence discussed in the Review Panel’s reasons, that was an ambitious submission. The Panel rejected it, saying at page 16 of the reasons:

The burden of Zurich’s complaint is that the Review Panel did not explicitly calculate the value of the three post-accident incidents or else give reasons for not reducing the assessment on account of those incidents. However, that assumes those incidents fell within the terms of guideline 1.34, which only applies if there is objective evidence of “a subsequent and unrelated injury or condition resulting in permanent impairment in the same region”. Although the Review Panel did not explicitly address the issue in these terms, it is clear that it was not satisfied that the injury caused by each subsequent incident was “unrelated” to the impairment caused by the motor accident. On the contrary, it may readily be inferred that the Review Panel accepted Mr Lewis’s case that the later incidents came on top of what was already severe damage to the triceps tendon which was accordingly vulnerable to avulsion.

It may be noted that the form of the reasons required the Panel expressly to address the issue raised by guideline 1.34. The Panel’s conclusions were recorded in a table, as follows:

The second-last column confirms that the Panel rejected Zurich’s argument concerning the three subsequent events.

Zurich’s written submissions acknowledged the authorities which address the limit of the court’s jurisdiction to intervene in such cases. The question to be determined by this Court was neatly described by Beech-Jones J in AAMI Limited v Ali [2012] NSWSC 969; 62 MVR 12 where, after setting out the explanation of what is meant by “jurisdictional error” in the decision of the High Court in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30, his Honour continued at [47]:

Zurich’s submissions in the present case have not persuaded me that the Review Panel failed to engage with its statutory task or failed to have regard to relevant material concerning the three post-accident incidents in a way that affects the exercise of its power. That is because, first, it is clear that, contrary to Zurich’s submissions, the Review Panel accepted that the motor vehicle accident caused significant injury to the right elbow and that it was “persistently symptomatic” from that time and, secondly, it is clear that the Review Panel did not regard the later injuries as being separate or unrelated to the injury caused by the motor vehicle accident. The permanent impairment as assessed by Dr Hughes was a severely damaged triceps tendon which subsequently avulsed and proved difficult to repair.

Further, contrary to Zurich’s submissions, in my view the Panel gave adequate reasons for reaching that conclusion and its reasons were not illogical or irrational. Zurich’s submissions on this question tended to assume the correctness of its position; on that assumption, the suggestion was that the reasons were inadequate to explain how Zurich could have failed on this point. This Court must be careful, when considering such a submission, to pay due deference to the expertise of a specialised panel. It is clear, in my assessment, that the Review Panel understood Zurich’s submission and rejected it. In my view, the Panel discharged its statutory obligation to give reasons for that conclusion (ss 61(2) and (9) and 63(6)).

For those reasons, I am not persuaded that any of the grounds relied upon by Zurich is made out. Accordingly, the summons is dismissed.