Smith v Insurance Australia Ltd

1. [1]

   The plaintiff seeks prerogative relief in respect of a decision of the Medical Review Panel of the Motor Accidents Medical Assessment Service. The first defendant is the compulsory third party insurer. The second defendant is the Authority which administers the scheme under the Motor Accidents Compensation Act 1999 (NSW). The third defendant is the Medical Review Panel. The second and third defendants filed submitting appearances.

2. [2]

   The plaintiff had been injured in a motor vehicle accident on 27 April 2012 and had sustained both physical and psychiatric injuries. The challenged decision of the Medical Review Panel concerns his psychiatric injuries.

3. [3]

   On 21 April 2017 the plaintiff was assessed by Dr Prior, who found that the plaintiff suffered from Post-Traumatic Stress Disorder and an exacerbation of Major Depressive Disorder. He determined a whole person impairment of 7%.

4. [4]

   The plaintiff sought a review of the Dr Prior’s assessment. The Medical Review Panel assessed the plaintiff’s whole person impairment in respect of psychiatric injuries at 8%. It determined that an exacerbation of his psychiatric injuries by reason of his brother-in-law’s death at Christmas 2016 was an unrelated event. The Panel assessed the plaintiff’s whole person impairment taking into account the injuries sustained after his brother-in-law’s death at 17%, but deducted the 9% whole person impairment percentage attributed to those subsequent injuries on the basis that the death was an unrelated event.

5. [5]

   The plaintiff claims both jurisdictional error and/or error on the face of the record on the following grounds:

6. [6]

   Although, as can be seen, the grounds for review do not make reference to procedural fairness, the plaintiff’s written submissions in paragraph 19 said this:

The Panel’s decision

1. [7]

   The plaintiff was examined by the three members of the Panel on 10 November 2017. In its report the Panel detailed the plaintiff’s pre-accident medical and psychiatric history, his pre-accident functioning prior to 27 April 2012, the history of the motor accident together with the subsequent symptoms and treatment, and the plaintiff’s functioning after the motor accident in 2012 and prior to Christmas 2016. The Panel then detailed relevant injuries or conditions sustained since the brother-in-law’s death and the plaintiff’s functioning at the time of the assessment.

2. [8]

   The report under the heading “Diagnosis and Causation” then said:

3. [9]

   In its determination, the Review Panel said this:

Submissions

1. [10]

   The plaintiff submitted that cl 1.36 of the Guidelines concerned a causally unrelated subsequent injury. The plaintiff submitted that because the Review Panel had found that the Christmas 2016 events “worsened” and made “more severe” the plaintiff’s post-2012 motor vehicle accident condition, cl 1.36 was not engaged.

2. [11]

   The plaintiff drew attention to s 58 of the Motor Accidents Compensation Act and clauses 1.7 to 1.9 of the Guidelines dealing with causation. The plaintiff submitted that under s 58, the causation test to be applied is legal causation both as determined by s 5D of the Civil Liability Act 2002 (NSW) and by applying common law. The plaintiff submitted that, in finding that the plaintiff’s condition was “worsened” and “more severe, the Review Panel did not apply the legal causation test arising under s 5D or at common law.

3. [12]

   The plaintiff submitted that for a relevant legal and factual causal pathway to be established, the post-Christmas 2016 condition following from the events of the brother-in-law’s death need only materially contribute to the plaintiff’s psychiatric injury and consequent impairment. The plaintiff submitted that, although the Panel did not direct itself to apply the correct test of causation, the findings of “worsened” and “more severe” establish a causal pathway by material contribution.

4. [13]

   The plaintiff submitted that, to identify a causally independent subsequent condition resulting from the events of the 2016 Christmas period, the evidence would have to satisfy a causal enquiry along the lines of the following:

5. [14]

   The plaintiff submitted that applying the incorrect causation test amounted to an error of law on the face of the record and amounted to the Panel misdirecting themselves as to the correct legal and factual causation test to be applied. The plaintiff submitted that the finding of a causally unrelated condition giving rise to apportionment was legally unreasonable.

6. [15]

   The plaintiff submitted that relying on cl 1.36 was a denial of procedural fairness because the Panel proceeded on the basis of that clause without calling for submissions from the parties about it. There were no medico-legal reports dealing with the brother-in-law’s death and its effect on the plaintiff. It had not had any focus in the assessment by Dr Prior.

7. [16]

   The first defendant submitted that the Panel’s determination, that the death of the plaintiff’s brother-in-law caused a distinct, identifiable and measurable increase in overall impairment resulting from the plaintiff’s psychiatric condition, was a matter for the medical judgment of the Panel and was not a matter subject to judicial review. The first defendant submitted that the Panel correctly applied cl 1.36 of the Guidelines in dealing with the effects of the subsequent event. The first defendant submitted that the Panel’s approach in apportioning current impairment of 17% between impairment arising from the motor accident in April 2012 (8%) and impairment arising from the brother-in-law’s death in December 2016 (9%) was legally correct.

8. [17]

   The first defendant submitted that the reasoning underlying the plaintiff’s assertion appeared to be that unless a subsequent event causes a “new” and “different” psychiatric condition than that which preceded the event, the aggravation and any resulting increase in impairment must be causally related to the initial motor accident. The first defendant submitted that, whether a subsequent event and any impairment it causes is “related” or “unrelated” in a causal sense to the initial motor accident is a matter of fact, and cannot depend upon the happenchance of whether the psychiatric effect of the subsequent event is to create a new and different psychiatric condition, or to aggravate an existing condition. If, as in this case, the subsequent event has nothing to do with the initial motor accident, then its effects cannot be taken into account in assessing impairment arising from the motor accident.

9. [18]

   The first defendant submitted that clause 1.36 only applies where a subsequent event causes additional impairment of the same species, in this case being additional psychiatric impairment. Reliance was placed on GIO General Limited v Smith; Insurance Australia Ltd t/as NRMA Insurance v Smith & Ors [2011] NSWSC 802 where Hoeben J (as his Honour then was) held at [49] that the words “unrelated injury or condition” refer to the event causing the subsequent injury.

10. [19]

    The first defendant submitted that the Review Panel was correct in treating the subsequent event that increased the plaintiff’s psychiatric impairment in this case as an “unrelated injury or condition” requiring separate assessment, and therefore requiring apportionment of the total impairment at the time of its assessment in December 2017.

Consideration

1. [20]

   Clause 1.36 of the Guidelines concerns subsequent injuries. The clause provides:

2. [21]

   This clause should be seen in conjunction with cl 1.33 which deals with pre-existing impairment. That clause provides:

3. [22]

   It should be noted that the words in italics in cl 1.33 do not appear in cl 1.36. I shall return to that matter later in this judgment.

4. [23]

   Two cases are relevant to the issue to be determined in the present case. The first is Allianz Australia Insurance Ltd v Motor Accidents Authority of NSW [2011] NSWSC 102. In that matter, the plaintiff suffered physical and psychiatric injuries in two motor vehicle accidents. NRMA was the insurer for the first and Allianz for the second.

5. [24]

   The dispute as to the degree of permanent impairment was referred to the Assessor, Dr Samuels. He diagnosed a major depression arising from both accidents and found a whole person impairment of 19%. He did not apportion that impairment between the two accidents. Allianz sought a review. The Review Panel determined that the plaintiff suffered from major depression with melancholia leading to a whole person impairment of 26% arising from the second accident. The basis for that decision was explained by Hidden J as follows:

6. [25]

   In determining what was meant by “unrelated injury” in cl 1.36, Hidden J said:

7. [26]

   The second case, relied upon by the first defendant, was GIO General v Smith. In that case the plaintiff had been involved in two motor accidents. He suffered psychiatric injuries. The plaintiff lodged an Application for Assessment of a Permanent Impairment Dispute in accordance with the provisions of the Motor Accidents Compensation Act in respect of each of the accidents. GIO was the insurer for the first accident and NRMA was the insurer for the second.

8. [27]

   The Assessor issued a Certificate under s 61 of the Act in respect of each accident. He assessed the extent of whole person impairment having been caused by each accident at 15%. Each of the insurers sought a review. The Review Panel also issued two certificates in relevantly identical terms finding that the degree of permanent impairment of the injured person as a result of the injury caused by each motor accident was greater than 10%. In that way the plaintiff was able to claim damages for non-economic loss for his psychiatric condition in respect of each motor accident.

9. [28]

   Justice Hoeben said:

10. [29]

    His Honour found support for that approach in the judgment of Hidden J in Allianz, and his Honour set out the portions of the judgment in Allianz which I have set out at [25] above.

11. [30]

    The plaintiff’s principal point in the present matter derives from what Hoeben J said in Smith at [49], namely, that the words “unrelated injury or condition” refer to the event causing the subsequent injury. The plaintiff says that an event causing a subsequent injury constitutes the gateway to cl 1.36 applying. For that gateway to operate, the plaintiff says, it must be shown that the subsequent event caused injury in a manner determined in the same way as s 5D and the common law determines causation. The plaintiff says that in the present case the Panel did not determine that the brother-in-law’s death caused psychiatric injury. All that they found was that the psychiatric injury already suffered in the motor accident was worsened or made more severe by the brother-in-law’s death. In that way there was no unrelated injury.

12. [31]

    In my opinion, this argument was put and lost in Allianz. In that case Hidden J said at [23]:

13. [32]

    In the present case the Panel found that the plaintiff’s condition was exacerbated (“worsened” or made “more severe”) by the brother-in-law’s death which was a wholly unrelated event, so that that exacerbation was relevantly unrelated.

14. [33]

    Further, what Hoeben J was doing in Smith at [49] was distinguishing between the event and the injury. His Honour was not making a statement about causation in the way that the plaintiff contends. The focus of cl 1.36 is not on causation but on whether there is permanent impairment in the same region from what now must be understood as an unrelated event.

15. [34]

    In any event, the Panel’s findings in the present case at least indicate that the brother-in-law’s death materially contributed to the impairment found by the Panel. That is a finding of causation. Ordinarily, causation is a question of fact and not of law: March v Stramare (E. & M.H.) Pty Ltd (1991) 171 CLR 506 at 515, 524; Garcia v Motor Accidents Authority of New South Wales [2009] NSWSC 1056 at [24]. In that way, the Panel’s finding that the brother-in-law’s death was an unrelated event was a finding of fact.

16. [35]

    There can be no doubt that the Panel thought that the brother-in-law’s death resulted in permanent impairment because, having set out the details relating to each of the PIRS categories, the Panel found that the brother-in-law’s death caused a permanent impairment amounting to a whole person impairment of 9%. As senior counsel for the first defendant said, the Review Panel is not concerned with diagnosing a particular injury but in determining the impairment from any such injury.

17. [36]

    In the light of what was decided in Allianz at [23] and followed in Smith at [51], I do not consider that the Panel used the wrong test of causation. Nor was it obliged to set out in its reasons what test it was applying. The reasons make clear why it was that they found an unrelated injury within the meaning of cl 1.36, namely, the worsening and making more severe of the plaintiff’s condition after and as a result of the brother-in-law’s death. That finding was not irrational, illogical or unreasonable. The findings were findings of fact, and no error of law is shown.

18. [37]

    Where the Panel found that the plaintiff’s condition “worsened” and was made “more severe” by the brother-in-law’s death and that this amounted to an impairment of 9%, it would be absurd if cl 1.36 did not apply with the result that the insurer became liable for the impairment that resulted from that event. Unlike the position where further impairment occurs from treatment after an accident, the motor vehicle insurer cannot be responsible for the brother-in-law’s death or the plaintiff’s response to that death. The fact that the Panel, by applying the changed position of the plaintiff after the death to the PIRS categories, could determine a permanent impairment of 9% from that event, means that there was objective evidence of the subsequent impairment.

19. [38]

    The only result in the present case that accords with what was determined in Allianz and Smith, in circumstances where the plaintiff’s condition “worsened” and was made “more severe” by the brother-in-law’s death, is that the permanent impairment resulting from that event should be calculated in accordance with cl 1.36.

20. [39]

    As noted earlier, cl 1.36 says nothing about deducting the subsequent impairment, unlike cl 1.33. The point was indirectly raised in Smith where the position was explained by Hoeben J as follows:

21. [40]

    In that way, the approach of the Panel in deducting the subsequent impairment of 9% was entirely correct.

22. [41]

    In relation to the claim of a denial of procedural fairness, it should first be noted that the plaintiff was examined by Dr Prior on 21 April 2017, some four months after the brother-in-law’s death. A reading of both the reports of Dr Prior and the Review Panel suggests that the impact of the brother-in-law’s death did not fully materialise until after the time the plaintiff was examined by Dr Prior. Nevertheless, it is not correct to say that the first time that the brother-in-law’s death became the focus of a cl 1.36 enquiry was when the Review Panel’s decision was published.

23. [42]

    When Dr Prior dealt with subsequent injuries and medical conditions sustained since the motor accident he said this:

24. [43]

    Dr Prior also said under the heading “Subsequent psychiatric conditions”:

25. [44]

    When Dr Prior was dealing with the PIRS categories he made reference to the close relationship he had to his brother-in-law. However, and this is no doubt why cl 1.36 is not expressly referred to, under the heading “(ii) Subsequent/Independent Psychiatric Impairment” Dr Prior said:

26. [45]

    In the submissions lodged with the Review Panel, the solicitors for the first defendant made reference to the plaintiff listing social activities and regular contact with people including his brother-in-law who had passed away in December 2016.

27. [46]

    The Panel examined and assessed the plaintiff on 10 November 2017. The plaintiff informed the Panel of matters concerning his condition and its relationship to his deceased brother-in-law. The Panel reported:

28. [47]

    In Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 the High Court said at [47]:

29. [48]

    In Bhusal v Catholic Health Care Ltd [2018] NSWCA 56 the Court of Appeal (Meagher and Simpson JJA and Sackville AJA) said at [57]:

30. [49]

    I do not consider that there was any denial of procedural fairness by the Panel. The Panel’s task was not adjudicative. Its task was to provide a medical opinion on the medical question referred to it which concerned permanent impairment. It was obliged to take account of clauses 1.33 and 1.36 to determine if there were pre-existing or post-accident impairments so that it could properly evaluate the permanent impairment resulting from the motor accident concerned. The information about the brother-in-law’s death and its effect on the plaintiff was provided to the Panel by the plaintiff himself. In the light of what the Panel was told, it was a particularly relevant matter for the Panel to consider.

31. [50]

    As noted, the solicitors for the first defendant had made specific reference to the brother-in-law’s death in their submissions to the Panel, and it does not appear that there was any response to that by those acting for the plaintiff. It was always open to the plaintiff and his lawyers to submit further material, including medico-legal reports, to the Panel to argue that the plaintiff’s post-Christmas 2016 condition was not caused by his brother-in-law’s death but related to the motor accident. It was neither the role nor the responsibility of the Panel to call for further submissions on behalf of the parties because the Panel was obliged to apply its own medical experience and expertise to its task of determining permanent impairment, and any effect on pre-existing or post-accident events.

32. [51]

    There was no practical injustice to the plaintiff in the Panel not interrupting its task to seek submissions from the parties based, presumably, on what the Panel would report the plaintiff told them. All that the plaintiff suggested would have occurred, if that had happened, is that the plaintiff’s solicitors would have made submissions to the Panel along the lines of what has been put to me, and which I have rejected. The matter to be determined by the Panel was a medical one, not a legal one.

33. [52]

    When considering the obligation of a review panel appointed under the Motor Accidents Compensation Act, Leeming JA said in Frost v Kourouche [2014] NSWCA 39 at [40] (Beazley P and Basten JA agreeing):

Conclusion

1. [53]

   In my opinion the plaintiff’s challenges to the Assessment of the Review Panel fail.

2. [54]

   I make the following orders:

   1. (1)

      Summons dismissed.

   2. (2)

      The plaintiff is to pay the first defendant’s costs.