Zilic v QBE Insurance (Australia) Ltd

1. [1]

   Shortly prior to 8:15am on 25 October 2016, the plaintiff, Elmedina Zilic, was injured when her Vespa motor scooter collided with a motor bike whilst she was on her way into the Sydney CBD. At the time of the incident, Ms Zilic had been working at a major bank, and was completing a Master of Laws at the University of Sydney.

2. [2]

   Ms Zilic commenced proceedings in the District Court of New South Wales on 4 December 2019 against the compulsory third party (“CTP”) insurer of the vehicle at fault, the first defendant (“the insurer”), pursuant to the Motor Accidents Compensation Act 1999 (NSW) (“MAC Act”). During the course of the proceedings, a dispute arose between Ms Zilic and the insurer as to whether the injuries she sustained in the accident give rise to a permanent impairment greater than 10%. This is a significant issue because s 131 of the MAC 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%.

3. [3]

   The original assessor, Medical Assessor Wayne Mason (“Assessor Mason”), had issued a certificate pursuant to s 61 of the MAC Act, certifying that the psychological injuries caused by the motor accident, including an adjustment disorder with mixed anxiety and depressed mood, chronic and severe, gave rise to a permanent impairment greater than 10%, that is 19%. The insurer sought from the President of the Personal Injury Commission of NSW, the second defendant, a review of this decision by a Review Panel, the third defendant, as provided for under s 63 of the MAC Act. On 22 August 2023, the Review Panel delivered a certificate which disagreed with the original assessor’s decision and found that the total permanent impairment was 0%. By way of Amended Summons, filed 16 February 2024, Ms Zilic seeks judicial review of that decision.

Further background

1. [4]

   Shortly after the accident on 25 October 2016, at around 8:30am, Ms Zilic was transported by ambulance to the Royal Prince Alfred Hospital. On 31 October 2016, a discharge referral letter was issued by the Royal Prince Alfred Hospital. Under the admission summary of that document, the principal diagnosis in relation to Ms Zilic’s injuries is listed as a “[l]eft foot degloving injury”.

2. [5]

   In a letter of plastic surgeon Dr Shagun Aggarwal, dated 25 November 2016, it is recorded that “[t]he graft has almost fully healed but [Ms Zilic] now has ongoing swelling and neuropathic pain in the foot”. A further letter, dated 1 December 2016, records:

3. [6]

   Dr Aggarwal noted in a final letter, dated 6 February 2017: “Unfortunately, as you may be aware, [Ms Zilic] developed complex regional pain syndrome (CRPS) requiring treatment from the pain clinic at [the Royal Prince Alfred Hospital].”

4. [7]

   On 10 May 2018, Ms Zilic instituted a CTP claim by submitting a “Motor Accident Personal Injury Claim Form” provided by the New South Wales State Insurance Regulatory Authority.

5. [8]

   On 31 March 2020 and 22 July 2020, Ms Zilic’s solicitors sought but failed to receive concessions from the insurer that the s 131 threshold was crossed. The plaintiff then applied to the State Insurance Regulatory Authority for an assessment of permanent impairment pursuant to ss 58(1)(d) and 60(1) of the MAC Act. Included in that application form, amongst other claimed injuries was “Psychiatric” injury, described as “Chronic adjustment disorder with anxiety and depressed mood”. Medical records between the dates of 25 October 2016 and 20 November 2020 were attached to the application. From these records it is apparent that:

   1. (1)

      In June 2019, Ms Zilic was admitted as a patient at the Northern Beaches Hospital Mental Health Unit. In a letter, dated 24 June 2019, Dr Stephen Gibson, a doctor of the Royal Prince Alfred Pain Management Centre (“Pain Management Centre”) recorded that “[Ms Zilic] had become overwhelmed with multiple stressors, including the CRPS left leg, but also financial issues and social stressors […]”. This view was confirmed in a letter of Dr Matthew Holton, a psychiatrist at the Pain Management Centre, who then opined: “I think that [Ms Zilic] would benefit from being referred to a psychologist […]”.

   2. (2)

      Two letters addressing Ms Zilic’s psychological state were produced on 27 April 2018 and 17 April 2019 by a clinical psychologist at the Dee Why Psychological Health Centre. In the later letter, the clinical psychologist relevantly stated:

   3. (3)

      On 30 March 2020, Dr Anthony Dinnen, a consultant psychiatrist, examined Ms Zilic following the institution of her claim in the District Court. Dr Dinnen set out, under the assessment of impairment, his opinion that Ms Zilic was suffering from a “[c]hronic adjustment disorder with anxiety and depressed mood, consequent to physical disability and chronic pain, as described and recorded”. He added that “[h]er condition is likely to persist and the prognosis is guarded. She requires ongoing psychological and psychiatric treatment, with the use of long-term antidepressant and antianxiety medication”.

   4. (4)

      On 21 October 2020, Dr Graham Vickery, psychiatrist, assessed Ms Zilic. In the course of his report, he noted:

6. [9]

   The plaintiff was medically assessed by Assessor Mason pursuant to s 61 of the MAC Act. Assessor Mason conducted the assessment on 12 April 2024 via video link and issued a certificate of assessment, including reasons, dated 14 April 2022.

7. [10]

   In the course of his reasons, he noted the submissions made by Ms Zilic that her chronic adjustment disorder with mixed anxiety and depressed mood gave rise to WPI of 25%. He also noted the insurer’s submissions that there was evidence of a pre-existing psychiatric condition consisting of depression in 2013 and anxiety in 2015. There was reference to multiple personal stressors and pre-existing vulnerability.

8. [11]

   In the section recounting her history, Assessor Mason relevantly noted:

9. [12]

   As to her current functioning, after setting out his assessment in relation to Ms Zilic’s self-care and personal hygiene, social and recreational activities, travel, social functioning, concentration, persistence and pace, he stated the following in relation to “adaptation”:

10. [13]

    Assessor Mason made the following comments about Ms Zilic’s consistency:

11. [14]

    After providing a summary of his review of the relevant documentation, Assessor Mason stated:

12. [15]

    Under the heading “Causation and reasons”, Assessor Mason stated:

13. [16]

    Assessor Mason certified that Ms Zilic’s psychological injuries caused by the accident, including an adjustment disorder with mixed anxiety and depressed mood, chronic and severe, gave rise to a permanent impairment greater than 10%, that is 19%.

14. [17]

    On 20 May 2022, the insurer lodged an application for review of Assessor Mason’s decision pursuant to s 63 of the MAC Act on the ground that the assessment was incorrect in a material respect, in that the Medical Assessor failed to comply with the Motor Accident Permanent Impairment Guidelines (“MAPIG”); improperly, incorrectly and erroneously considered the evidentiary position; overlooked the evidence; and failed to give proper consideration to the objective evidence.

15. [18]

    Ms Zilic lodged a reply to the application dated 16 June 2022.

16. [19]

    On 25 July 2022, a delegate of the President of the Commission determined that there was a reasonable cause to suspect that the medical assessment was incorrect in a material respect and referred the matter to a review panel.

17. [20]

    The Review Panel was appointed under s 63 of the MAC Act (comprising two medical assessors appointed under s 33 of the Personal Injury Commission Act 2020 (NSW), and a member of the Commission appointed under s 9 of that Act).

18. [21]

    The Review Panel was convened, and Ms Zilic was re-examined via Microsoft Teams on 4 August 2023 by Medical Assessors Newlyn and Chew on behalf of the Review Panel. The Panel met again on 17 August 2023 to deliberate on the findings.

19. [22]

    Submissions were received on behalf of the insurer and Ms Zilic. Relevantly, the insurer’s submissions highlighted that Assessor Mason determined that Ms Zilic’s chronic and severe adjustment disorder with mixed anxiety and depressed mood “arose secondary to her ongoing Somatic Symptom Disorder (pain)” (Emphasis in original). Ms Zilic’s submissions also highlighted that the psychiatric diagnosis had arisen secondary to an ongoing somatic symptom disorder, that Assessor Mason’s conclusion was formulated on this basis, and that this did not preclude him utilising the Psychiatric Impairment Rating Scale (“PIRS”) to measure a disorder which is known under the Diagnostic and Statistical Manual of Mental Disorders (“DSM”).

20. [23]

    On 22 August 2023, the Review Panel issued a certificate of assessment, including reasons purportedly pursuant to ss 61 and 63 of the MAC Act. It stated:

21. [24]

    The panel’s reasons included the relevant law and guidelines, then a summary of both parties’ submissions. The reasons then summarised the psychosocial history and pre-accident history of Ms Zilic.

22. [25]

    In the course of summarising Ms Zilic’s submissions, the Review Panel stated at [54]–[56]:

23. [26]

    Further arguments of Ms Zilic were summarised. The documentation purportedly considered by the Review Panel was then listed.

24. [27]

    The last main heading in the reasons was “Review Panel Findings”. A series of sub-headings under this heading followed, including “Who attended the assessment”, “Psychosocial history and pre-accident history” followed by a number of paragraphs; then “History of the motor accident” under which was one paragraph summarising the accident. This was followed by a sub-heading “History of symptoms and treatment following the motor accident” which, in four paragraphs, summarised the account given by Ms Zilic at the re-examination. Under the next sub-heading, “Details of any relevant injuries or conditions sustained since the motor accident”, the following paragraph was set out:

25. [28]

    Under the next sub-headings “Current status”, “Mental state examination” and “Comments of consistency” there were single paragraphs again apparently referring only to the re-examination. Under the latter heading it was noted “There were no gross inconsistencies”.

26. [29]

    The next sub-heading was “Diagnosis and Reasons”, under which the Panel stated:

27. [30]

    The last sub-heading was “Panel deliberations”. Under this heading the following was set out:

28. [31]

    By way of Amended Summons, Ms Zilic seeks relief from the whole of the decision pursuant to s 69 of the Supreme Court Act 1970 (NSW).

29. [32]

    On 12 March 2024, the Commission and the Review Panel filed submitting appearances, save as to costs, in accordance with r 6.11 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). On 25 June 2024, the insurer, having changed its original position of support of the Review Panel’s decision, also filed a submitting appearance, save as to costs, following receipt of Ms Zilic’s amended outline of submissions.

30. [33]

    Although the matter was originally set down for hearing on 30 July 2024, the parties agreed that the matter could be dealt with on the papers, and accordingly the hearing was vacated. Accordingly, there was no contradictor.

The Amended Summons

1. [34]

   The Amended Summons seeks an order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the certificate and medicate assessment dated 22 August 2023 of the Review Panel purportedly made pursuant to ss 61 and 63 of the MAC Act; an order in the nature of mandamus remitting the medical assessment of Ms Zilic to a differently constituted review panel for determination of the matter according to law; and costs.

2. [35]

   By email correspondence with my chambers on 25 July 2024, it was confirmed that no relief in the nature of prohibition or injunction was sought should I make the primary orders set out in the Amended Summons, and that the order now sought as to costs is that costs are reserved.

3. [36]

   The grounds of review listed in the Amended Summons are that the Review Panel erred in the following respects:

4. [37]

   Ms Zilic relies on the affidavit of Richard Dababneh sworn on 29 April 2024 which contains the decision under review and the documents that were before the Review Panel at the time of the decision.

The Motor Accidents Compensation Act 1999 (NSW) (the MAC Act)

1. [38]

   As set out by Simpson AJA (Leeming JA and Macfarlan JA agreeing) in D’Ament v Allianz Australia Insurance Ltd [2019] NSWCA 201 at [8] – [13] in relation to the MAC Act:

Consideration

1. [39]

   As stated by McCallum J in Zurich Australian Insurance Ltd v Lewis [2019] NSWSC 1232, there is no statutory right of appeal to this Court from a decision of the Review Panel. The only avenue available for challenging the decision is to seek judicial review on grounds of jurisdictional error or error on the face of the record through s 69 of the Supreme Court Act. The exercise of this Court’s supervisory jurisdiction as provided for under s 69 of the Supreme Court Act is always discretionary and cannot be resolved by consent: Lou v IAG Ltd (2019) 101 NSWLR 606; [2019] NSWCA 319 at [44] (per Payne JA, Gleeson JA agreeing).

2. [40]

   Ms Zilic contends that five grounds (Grounds (a)-(d) and (g) of the Amended Summons) demonstrate jurisdictional error and represent a constructive failure to exercise jurisdiction, and two grounds (Grounds (e) and (f) of the Amended Summons) constitute errors of law on the face of the record. Section 69(4) of the Supreme Court Act provides that “the record” includes the reasons for the decision in question. The reasons of the Review Panel form part of the record for this purpose. An error in the reasons of the Review Panel is therefore susceptible to judicial review.

3. [41]

   These grounds of review can be dealt with together. Collectively, the grounds combine to form the submission that the Review Panel erroneously limited itself to determining only Ms Zilic’s primary diagnosis and did not consider whether the accident resulted in a secondary diagnosis which could amount to relevant permanent impairment. It is contended this amounts to a constructive failure to exercise jurisdiction.

4. [42]

   Ms Zilic points to the decision of the Review Panel and, in particular, the diagnosis the Review Panel provided after re-examining her. The Review Panel stated:

5. [43]

   In her submissions, Ms Zilic referred to the MAPIG effective from 1 June 2018. This version is applicable as it applies to motor accidents occurring between 5 October 1999 and 30 November 2017 (the instant accident having occurred between those dates on 25 October 2016). Clause 1.5 of those guidelines provides:

6. [44]

   Ms Zilic says the Review Panel did not assess the “degree of impairment” because it limited itself to only diagnosing the primary psychiatric condition caused by the accident when no such limitation is found in the statute or any delegated legislation or guidelines. It is further said that the Review Panel’s description of the diagnosis as a “primary diagnosis” suggests there may be at least a secondary diagnosis that was not dealt with or considered.

7. [45]

   In my view, there is substance to this submission.

8. [46]

   As to what constitutes jurisdictional error, Kirk JA in Ming v Director of Public Prosecutions (NSW) (2022) 109 NSWLR 604; [2022] NSWCA 209 helpfully stated:

9. [47]

   Payne JA (Ward ACJ and Basten AJA agreeing) in Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225; [2023] NSWCA 215 at [38]–[69] also provides another helpful exposition on jurisdictional error.

10. [48]

    The first sentence of the Review Panel under the heading “Diagnosis and Reasons” referred in terms to Ms Zilic’s “primary” psychiatric diagnosis of “persistent somatic symptom disorder with predominant pain”. It is stated that this was based upon Ms Zilic’s account, her presentation and a “review of provided documentation”. It stated that the “diagnosed condition … was the most appropriate fit” for the symptoms Ms Zilic displayed during the re-examination, and it “also fit the symptoms the Panel had seen in the clinical notes and reports the claimant and insurer provided”.

11. [49]

    The Review Panel concluded this section of its reasons by stating “[t]he examination caused the Panel to disagree with Medical Assessor Mason’s assessment that the accident caused Ms Zilic to have an adjustment disorder with mixed anxiety and depressed mood, which was chronic and severe”. (Emphasis added.)

12. [50]

    Although there is a reference to Assessor Mason’s assessment of the secondary nature of the psychiatric condition in an early part of the Panel’s reasons — in the section which purports to set out the competing submissions of the parties — there is simply no consideration of the “substantial, clearly articulated argument” centred around this issue in the portion of the reasons in which the findings and reasons of the panel are apparently explained.

13. [51]

    The reasons made no reference to Dr Dinnen’s diagnosis, why it was not accepted, nor why it was not appropriate to have regard to a consequential or secondary diagnosis. This issue was clearly raised in the expert material, in the course of the written submissions, and was clearly articulated in the reasons of Assessor Mason. Further, the Panel failed to analyse or determine the question, clearly raised by Ms Zilic in written submissions, of whether the presence of a somatic symptom disorder leading to an adjustment disorder with mixed anxiety and depressed mood precluded the use of the PIRS pursuant to clause 1.213 to assess WPI resulting from the secondary adjustment disorder with mixed anxiety and depressed mood. The presence of a secondary disorder was clearly articulated by Ms Zilic and required the Review Panel to deal with it. By limiting itself to the primary diagnosis and entirely failing to consider the critical issue of the secondary diagnosis when coming to its conclusion, the Review Panel constructively failed to exercise jurisdiction.

14. [52]

    The fourth ground is, in substance, similar to the grounds dealt with above. It is whether the Review Panel limited itself to only determining whether the primary injury was caused by the accident, rather than considering whether the accident contributed to the occurrence of a subsequent medical condition or conditions.

15. [53]

    Ms Zilic again calls in aid the MAPIG, and in particular, cll 1.6-1.7:

16. [54]

    Clause 1.213 of the MAPIG is also relied upon, which states:

17. [55]

    Ms Zilic contends that the Review Panel, in limiting itself as outlined above, failed to grapple with whether its finding of “persistent somatic symptom disorder with predominant pain” in turn contributed to the occurrence of another recognised psychiatric condition. There was a complete absence of any analysis of the issue of the primary versus secondary diagnosis in the context of these apparently highly relevant clauses of the MAPIG; in my view, this constitutes jurisdictional error.

18. [56]

    Grounds (e) and (f) are that the Review Panel failed to set out lawful reasons such that it erred in law on the face of the record.

19. [57]

    Ground (e) refers specifically to s 61(9) of the MAC Act.

20. [58]

    Section 61(9) reads:

21. [59]

    By failing entirely to set out its reasons for discounting the issue of the secondary psychiatric diagnosis, the Review Panel made an error of law on the face of the record.

22. [60]

    Further, in failing to provide reasons for disagreeing with Assessor Mason’s assessment that Ms Zilic’s psychiatric condition had arisen secondarily to the primary condition, it failed to set out its actual path of reasoning.

23. [61]

    The Review Panel is required to set out its “actual path of reasoning” that would enable a court to determine whether the reasons contain an error of law: Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [55]. That case states:

24. [62]

    Further, in accordance with Hall J’s analysis in Allianz Australia Insurance Limited v Francica [2012] NSWSC 1577 at [17]–[18] (which also refers to Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284) in determining the adequacy of reasons it is important to determine “what was the issue; in other words, what was the precise battle ground between the parties before the determining tribunal” (Emphasis added). Ms Zilic submits, and I accept, that the “battle ground” here was whether or not Ms Zilic had sustained a recognised psychiatric disorder, and in particular an adjustment disorder as a result of the motor vehicle accident.

25. [63]

    In support of this contention, Ms Zilic points to:

    1. (1)

       the fact that such a disorder was found by Assessor Mason;

    2. (2)

       Ms Zilic’s submission before the Review Panel which addressed the insurer’s contention that Assessor Mason had incorrectly found such a disorder; and

    3. (3)

       the diagnosis made by Dr Dinnen in the medico-legal report which was before the Panel (referred to above at [8(3)]) that Ms Zilic was suffering from a “chronic adjustment disorder with anxiety and depressed mood, consequent to physical disability and chronic pain”.

26. [64]

    The Review Panel did not explain why it came to the conclusion that Ms Zilic had sustained simply a somatic symptom disorder beyond stating that it had come to the conclusion based on the material before it and the re-examination of Ms Zilic, and that it was “the most appropriate fit” for Ms Zilic’s symptoms. Given the clear issue in contention, this was wholly inadequate and failed to expose the reasoning of the Panel.

27. [65]

    In recording:

28. [66]

    I have examined the Review Panel’s reasons carefully and can see no explanation or reasoning underpinning its conclusory statement that the examination caused the Panel to disagree with Assessor Mason’s assessment.

Conclusion

1. [67]

   In my view each of the grounds of review set out in the Amended Summons are made out.

2. [68]

   As to the question of costs, as noted above, despite claiming an order for costs in the Amended Summons, by email dated 25 July 2024, Ms Zilic now submits that an order should be made that costs are reserved. Given the nature of this matter, I am of the view that such an order is appropriate.

Orders

1. [69]

   The Court makes the following orders:

   1. (1)

      An order in the nature of certiorari setting aside the certificate dated 22 August 2023 of the third defendant, Terence O’Riain, Thomas Newlyn and Gerald Chew, in their capacity as a Review Panel constituted under section 63 of the Motor Accidents Compensation Act 1999 (NSW).

   2. (2)

      An order in the nature of mandamus remitting the medical assessment of Ms Zilic to a differently constituted review panel for determination of the matter according to law.

   3. (3)

      Costs are reserved.