NRMA Insurance v State Insurance Regulatory Authority (Kun Fen Chen)

1. [1]

   On 24 August 2016, the plaintiff, Insurance Australia Ltd t/a NRMA Insurance (“NRMA Insurance”), brought proceedings by way of Summons against the first defendant, the State Insurance Regulatory Authority (“the Authority”), and the second defendant, Mr Kun Fen Chen.

2. [2]

   The first defendant has filed a submitting appearance and has taken no active part in the proceedings.

3. [3]

   The plaintiff’s Summons seeks judicial review pursuant to s 69 of the Supreme Court Act 1970 (the “Supreme Court Act”) of a decision of the Proper Officer of the first defendant dated 27 May 2016, in which the Proper Officer dismissed the plaintiff’s application for review of a Medical Assessment Certificate (“MA Certificate”) and Statement of Reasons dated 21 February 2016.

Background

1. [4]

   On 11 March 2012, Mr Bai Zhou Chen (21 years old at the time) was killed in a motor vehicle accident in Braidwood, New South Wales.

2. [5]

   Following the accident, Mr Chen’s father, the second defendant (“the claimant”), his mother, Mrs Ruo Shan Wu, and his daughter, Ms Yan Fei Chen, commenced proceedings in the NSW District Court against NRMA Insurance, claiming damages for non-economic loss. In those proceedings, a dispute arose as to whether the claimants had suffered a degree of permanent impairment greater than 10%, being a precondition for an award of damages for non-economic loss under s 131 of the Motor Accidents Compensation Act 1999 (“the MACA”).

3. [6]

   On 19 August 2014, pursuant to s 132 of the MACA, the permanent impairment dispute was referred to a medical assessor. On 21 February 2016, the medical assessor, Dr Matthew Jones, issued an MA Certificate for the claimant certifying the following:

4. [7]

   An MA Certificate in similar terms was issued for the claimant’s wife and daughter.

5. [8]

   On 8 April 2016, pursuant to s 63 of the MACA, NRMA Insurance applied to the Proper Officer of the State Insurance Regulatory Authority to refer Dr Jones’ medical assessments to a review panel. On 27 May 2016, the Proper Officer, Ms Sarah Kallipolitis, rejected the referral applications and issued reasons for her decision.

Proceedings in this Court

1. [9]

   On 24 August 2016, NRMA Insurance filed three Summonses in this Court, one Summons relating to the claimant and each family member. The Summonses sought an order pursuant to s 69 of the Supreme Court Act quashing the decision of the Proper Officer to refuse a review of Dr Jones’ medical assessments for each of the claimants. The Summonses also sought an order that the medical assessments be referred to a review panel pursuant to s 63(3) of the MACA.

2. [10]

   Each of the Summonses alleges the same error in the Proper Officer’s reasons. Accordingly, although this judgment deals with the Summons filed in relation to the Proper Officer’s decision on Mr Kun Fen Chen’s medical assessment, the orders I make will apply equally to the other two Summonses which have been filed.

The Medical Assessment

1. [11]

   It is convenient to summarise the MA Certificate and Statement of Reasons of the medical assessor, Dr Jones.

2. [12]

   Dr Jones began by noting several difficulties in assessing the three claimants. He explained:

3. [13]

   Dr Jones went on to note that, in light of the difficulties with undertaking an audio visual assessment, he had been asked to undertake an assessment by reference to the documents with which he was provided, including the report of Dr Westmore dated 26 May 2014. Dr Jones continued:

4. [14]

   Dr Jones also noted that over 18 months had elapsed since Dr Westmore’s reports, and therefore the claimant’s present level of impairment was uncertain. Dr Jones stated that his MA Certificate related only to the claimant’s level of impairment as at the date of Dr Westmore’s assessment, being 16 May 2014.

5. [15]

   Dr Jones recounted the claimant’s history as contained in Dr Westmore’s report. He noted that he had no history of psychiatric or psychological problems and that, prior to the death of his son, he was working full-time in stable employment as a sales consultant with a real estate company and did not have any impairment in functioning.

6. [16]

   Dr Jones set out in detail a history of the claimant’s symptoms and treatment following his son’s death in the motor vehicle accident. The claimant had been seen by a psychiatrist and treated with medication.

7. [17]

   As to the claimant’s current functioning, Dr Jones noted that the claimant had told Dr Westmore that his contact with friends had significantly reduced since the accident and that he no longer had interests or hobbies.

8. [18]

   A review of documentation was undertaken, including the report of Dr Westmore and documents from the Fourth People’s Hospital in Shantou, China. Dr Jones noted:

9. [19]

   Dr Jones also noted the following report from the Shantou Hospital dated 13 June 2012:

10. [20]

    He further noted on 18 June 2012:

11. [21]

    Dr Jones was also provided with a medical certificate, to which he had regard, dated 31 June 2012, which confirmed a diagnosis of a depressive illness.

12. [22]

    Dr Jones recorded various details from statements made by Mr Chen dated 6 December 2013 and from a statement by his wife which was also dated 6 December 2013.

13. [23]

    Dr Jones recorded the submissions of NRMA Insurance dated 8 September 2014, which suggested that due to the inadequacy of information and documents in support of the claim, that he, as a medical assessor, would not be in a position “… to conduct a proper assessment of the claimant’s whole person impairment under the PIRS rating”.

14. [24]

    Dr Jones came to these conclusions about the claimant:

15. [25]

    Dr Jones went on to make the findings which I have recorded at [6] above. He assessed the claimant’s whole person impairment at 19%. There was no evidence of any pre-existing or subsequent impairments to warrant any adjustment to this finding.

16. [26]

    In so doing, Dr Jones, as required by the Guidelines, completed the relevant PIRS table, allocated the appropriate score and by the required method came to the percentage of whole person impairment which I have set out above.

Decision of the Proper Officer

1. [27]

   On 8 April 2016, NRMA Insurance applied to the Proper Officer for a review of Dr Jones’ assessment. In support of the application, NRMA Insurance made the following submissions:

   1. (1)

      The reliance by Dr Jones on the out-dated report of Dr Westmore and foreign clinical records gave rise to unfairness, which Dr Jones himself recognised in his Statement of Reasons;

   2. (2)

      The medical assessment did not proceed in accordance with the Guidelines for the Assessment of the Degree of Permanent Impairment (“the Guidelines”). In particular, Dr Jones was not provided with all relevant medical and hospital records, and did not have the opportunity to conduct a clinical examination of the second defendant; and

   3. (3)

      The lack of up to date information available to Dr Jones meant that it was impossible for him to form an opinion as to the second defendant’s current state of permanent impairment by applying his medical experience and expertise.

2. [28]

   On 12 May 2016, the claimant lodged a response to the application. The claimant submitted that it was reasonable and necessary for the medical assessment to take place “on the papers”, as he could not travel to Australia for a medical assessment and continued to reside in a rural location in China. The claimant further submitted that Dr Jones had considered all the available material.

3. [29]

   On 27 May 2016, the Proper Officer dismissed the application for review. She determined that she was not satisfied that there is cause to suspect that the medical assessment is incorrect in a material respect.

4. [30]

   In her Statement of Reasons for Decision, the Proper Officer said:

5. [31]

   The Proper Officer concluded that she was not satisfied that there was reasonable cause to suspect that the original medical assessment was incorrect in a material respect. Accordingly, the Proper Officer dismissed the application for a review.

Amended Summons

1. [32]

   On 6 December 2016, when NRMA Insurance’s Summons came on for hearing in this Court, leave was granted to file in Court an Amended Summons dated 5 December 2016.

2. [33]

   It is convenient to set out the grounds of the Amended Summons. They are as follows:

The Application for Review

1. [34]

   Having regard to the submissions in this Court of an error on the part of the Proper Officer, the detail of which will be referred to later, it is appropriate to record a summary of the plaintiff’s submissions to the Proper Officer.

2. [35]

   At the commencement of that application, the plaintiff set out a précis of the grounds for contending that the MA Certificate should be set aside. The plaintiff said:

3. [36]

   All of these grounds were directed towards the procedure followed by the medical assessor in coming to the conclusions expressed on the MA Certificate of Assessment. NRMA Insurance claimed that such were the deficiencies that the assessment was incorrect in a material respect.

4. [37]

   In aid of these submissions, NRMA Insurance cited the Medical Assessment Guidelines (“the Guidelines”), and the importance placed in them on a clinical examination as a tool for a thorough and accurate assessment of permanent impairment. NRMA Insurance emphasised to the Proper Officer, that no clinical assessment had been undertaken personally by the assessor before issuing the MA Certificate.

5. [38]

   In these proceedings, the plaintiff, NRMA Insurance, complains that the Proper Officer did not properly address the question posed by the legislation, because, in effect, the Proper Officer did not grapple with the real issue before her, namely whether the underlying assessment procedure was fair and adequate to enable a proper assessment to occur.

6. [39]

   NRMA Insurance criticises the statement and acceptance of the claimant’s position that a Review Panel “… cannot consider the underlying procedures”. The Proper Officer’s conclusion in this respect was:

Method of Assessment

1. [40]

   The facts underlying the method of assessment are uncontroversial. Largely they are derived from the report and reasons of the assessor. Relevantly, they are these:

2. [41]

   It is of significance that the medical assessor was able, proceeding in the way in which he had been directed, to reach a conclusion about the level of whole person impairment, notwithstanding the expressed reservations.

NRMA Insurance’s Argument in the Proceedings

1. [42]

   NRMA Insurance submitted that the provisions of s 63 of the MACA do not preclude an examination by a review panel of the nature and methodology of the underlying procedure followed by the medical assessor. NRMA Insurance submitted that the term “medical assessment” as it is used in s 63 is properly to be regarded as including the assessment process, the result of which is the publication of an MA Certificate containing an assessment of whole person impairment. NRMA Insurance pointed to clause 16.21.1 of the Guidelines which, it submitted, permits full re-examination of all aspects of the assessment made by the medical assessor, which it further submitted must include the methodology used by the medical assessor.

2. [43]

   Clause 16.21 of the Guidelines is in the following form:

3. [44]

   As well, NRMA Insurance pointed to the contents of subsection 63(3A) of the MACA, which is in the following terms:

4. [45]

   NRMA Insurance points to, and calls in aid, the judgment of Basten JA in Meeuwissen v Boden [2010] NSWCA 253; (2010) 78 NSWLR 143 at [18] where his Honour said:

NRMA Insurance’s Oral Submissions

1. [46]

   Between the time of the filing of the written submissions and the oral submissions, NRMA Insurance came into possession of a document entitled “Venue Policy” of the Medical Assessment Service of the Authority. Whether or not that policy was previously available was debated, but it is not necessary to determine that question.

2. [47]

   Relevantly, the Venue Policy included the following statement:

3. [48]

   In the course of oral submission, counsel for NRMA Insurance informed the Court that it would not be open for a panel of medical assessors to undertake an assessment of the claimant whilst in the People’s Republic of China as part of a statutory function. Senior counsel for the claimant did not demur from this proposition.

4. [49]

   Counsel for the plaintiff submitted however that the appropriate arrangement which ought to have been made would be to have sent two medical assessors to Hong Kong where they would be entitled to carry out their statutory function, of assessing the claimant and his family members.

5. [50]

   Counsel acknowledged that the Authority could not require or compel the individual claimants to attend an assessment in Hong Kong, but submitted that any failure so to do may form a proper basis for a different form of proceedings, and relief, the details of which were not specified.

6. [51]

   Counsel went on to draw attention, in light of the contents of paragraph 2.1 in the Venue Policy, to the proposition that the Proper Officer, when determining the application for a further assessment, applied that policy in a non-flexible way, without adequately expressing any reasons for such approach.

7. [52]

   The submission continued:

8. [53]

   Counsel also pressed the submission that the reasons of the Proper Officer were inadequate, thereby constituting an error of law on the face of the record.

Statutory Scheme

1. [54]

   It is necessary when considering the submissions of the plaintiff with respect to the nature of the assessment, to consider the statutory scheme. The Medical Assessment Service is an operational unit of the Motor Accidents Authority (now the first defendant Authority) pursuant to s 57A of the MACA.

2. [55]

   When a disagreement exists between a claimant under the Scheme and an insurer about, inter alia, the degree of permanent impairment of a person whose injury was caused by a motor vehicle accident, and whether that permanent impairment exceeds 10%, such disagreement is dealt with under Pt 3.4 of the MACA.

3. [56]

   Section 59 requires the Authority to appoint a medical assessor, or medical assessors, for the purposes of the Part.

4. [57]

   Section 60 of the MACA enables a medical dispute to be referred for assessment by the Authority to one or more medical assessors.

5. [58]

   Section 61 provides that a medical assessor is to give a Certificate as to the matters referred to him or her for assessment. In context, this means the medical assessment matters of the kind defined in s 58. Relevant here was whether the whole person impairment exceeded 10%. Section 61(9) of the MACA provides that a Certificate issued by a medical assessor is to set out the reasons for any finding as to any matter certified in the Certificate.

6. [59]

   Section 65 of the MACA is also relevant. It provides:

7. [60]

   A number of the Guidelines are also relevant here.

8. [61]

   At the time of the assessment in question, the Guidelines which were in effect were those gazetted on 11 July 2008 with effect from 1 October 2008.

9. [62]

   The Guidelines are made pursuant to s 44(1)(d) of the MACA and, as is clear from s 65(1) of the MACA, the Guidelines operate by force of law, in effect as if they were delegated legislation.

10. [63]

    Although, in general terms, disputes are allocated to medical assessors promptly, Guideline 9.7 provides that an officer of the Authority may defer the allocation of a dispute to a medical assessor for a period not exceeding six months at a time.

11. [64]

    Guideline 9.10 includes the following:

12. [65]

    The officer of Authority responsible for the allocation of a dispute is entitled, according to the Guidelines, to make the determination set out in cl 9.10.2 above. Any such determination has to accord with cl 9.12 which is in the following terms:

13. [66]

    Clause 9.18 permits a proper officer to reallocate a matter to a different assessor if the assessor is unable to deal with the matter.

14. [67]

    Chapter 11 of the Guidelines provides that an assessor may determine their own procedure for the conduct of an assessment and may enquire into any issue in such manner as they think fit. The assessor is also to inform him or herself on any issue “… as they see fit”.

15. [68]

    It is to be observed from the contents of the medical assessor’s reasons set out in [12] above that the term “unfeasible” was recorded by the medical assessor as being the basis for the rejection of his proposal that two medical assessors travel to China to do a panel-style Assessment.

16. [69]

    There is no direct evidence as to the steps taken within the Authority with respect to the determination of the method by which the assessment was to be undertaken in respect of these three claims.

17. [70]

    It is clear however, having regard to the terms of the Guidelines, and what the medical assessor says, that an officer of the Authority determined that the assessment should take place on the documents in accordance with cl 9.10.2 of the Guidelines and, further, that the officer of the Authority who made that determination must have been satisfied that a medical examination of the claimant was not feasible or appropriate, or else was impractical within the meaning of those terms in cl 9.12.

18. [71]

    Given the circumstances, that the claimant was located in Shantou, and that a medical assessment by audio-visual link was unsuccessful, a determination that the assessment should take place on the papers as was made by the relevant officer of the Authority, was on its face unexceptional. It was certainly a determination that was open to the relevant officer.

19. [72]

    That determination necessarily pre-existed and was entirely separate from the assessment. It was the determination by which the methodology of the assessment was to take place.

20. [73]

    Consequent upon that determination, notwithstanding his reservations, the medical assessor undertook the very task that he was directed so to do. In so saying, I am not suggesting, nor did the medical assessor say, that he had been directed as to what the result of his assessment should be. Such a direction, if ever given, would be contrary to the Guidelines and the appropriate procedure.

Discernment

1. [74]

   In all of those circumstances, I reject the submission that the Proper Officer, in undertaking her function in accordance with the legislation, applied the wrong legal test. On the contrary, I am satisfied that the Proper Officer’s approach to the issue of whether it was open to the Review Panel to engage in questioning whether the assessment should take place on the papers, by determining that it was not a function which it was entitled as a matter of law to perform, was correct.

2. [75]

   Consequently, that determination did not provide a basis for a referral by the Proper Officer to a Review Panel, on the basis that the assessment was incorrect in a material respect.

3. [76]

   There are a number of reasons for this conclusion.

4. [77]

   First, whilst the assessment undertaken by the medical assessor was done in a constrained manner – on the papers – such a form of assessment is contemplated as a permissible one for a medical assessor acting in accordance with the Guidelines.

5. [78]

   Secondly, NRMA Insurance did not point to any reason why the constraint assessment did not arrive at the correct result. Rather, it chose to concentrate on disputing the correctness of the constraint placed upon the process. It must be taken to have accepted that there was no error of a material kind in the substantive assessment.

6. [79]

   Thirdly, in substance and effect, NRMA Insurance sought to attack the earlier decision of the relevant officer of the authority to direct an assessment on the papers by contending that the medical assessor was in error in a material respect by conducting the medical assessment in that way. But, the medical assessor had, in the particular circumstances, no choice. He either conducted the assessment in that way, or declined so to do. NRMA Insurance did not contend that the medical assessor made a material error by failing to decline to conduct the assessment. That is unsurprising. The logical consequence of such an approach would have resulted in the Review Panel declining to conduct an assessment.

7. [80]

   Fourthly, on the material before this Court, and before the Proper Officer, the decision made by the relevant officer of the Authority to direct an assessment on the papers, assuming it to have been open to challenge, was an obviously correct one. The claimant was living in the People’s Republic of China. A medical assessment under the statute by one or more appointed medical assessors could not take place in China. The relevant officer was confronted by the inadequacy of an attempted assessment via AVL, and it was not apparent that the claimant, or his family members, were intending on travelling to Australia, or anywhere else outside China. On that view, the only available course, and certainly a rational one, was to direct that the assessment take place on the papers.

8. [81]

   It is necessary to note that this conclusion is not inconsistent with the decision of Meeuwissen, set out earlier. That decision was not directed to, and not authority supporting, the proposition that the Proper Officer must consider the mode of assessment which another officer of the Authority has directed to take place. On the contrary, the decision is directed to whether the Proper Officer considered both the context of the assessment as revealed by the Statement of Reasons of the medical assessor, as well as the final percentage of whole person impairment set out in the MA Certificate.

9. [82]

   It is for these reasons that NRMA Insurance has not persuaded me that the Proper Officer’s refusal to refer to the medical assessment and the MA Certificate to the Review Panel for its consideration was attended by any error at all.

10. [83]

    The remaining issue is whether the Proper Officer gave adequate reasons. The Guidelines address this question.

11. [84]

    Guideline 16.11 requires that the Proper Officer is to consider the application for review within 10 days of the final compliance date for the interested parties to lodge their documents. Clauses 16.12 and 16.13 of the Guidelines deal with a decision to refer an assessment to a Review Panel. Clause 16.14 deals with a decision to dismiss the application. Clause 16.15 of the Guidelines is in the following form:

12. [85]

    It is clear from the existence of a reasonably short timetable within which the Proper Officer is required by the Guidelines to make a decision, and to provide reasons, when considered with the requirement for the Proper Officer only to support their decision “by a brief statement of reasons” that the Guidelines do not call for any extensive record of the decision, and the reasons underlying it.

13. [86]

    Here, the Proper Officer set out the material which was taken into account, the issues in dispute, and noted the submissions which had been made.. This was provided together with the Proper Officer’s conclusion that the decision to conduct an assessment on the papers was correct and that there is nothing in the material relied upon by the applicant for the review which demonstrated the requisite error. Brief reasons for that are recorded, namely, that the argument about error, in effect, did not refer to the correctness of the assessment made by the medical assessor but, rather, sought to attack the assessment process which was used by the medical assessor, which the Proper Officer concluded was not open for attack.

14. [87]

    Nothing more, in this case, was required by the Proper Officer for the expression of her decision.

15. [88]

    I am satisfied that although the reasons were brief, they were adequate and fell within the Act and Guidelines. No error of law has been demonstrated.

16. [89]

    It follows that the applicant’s Summons must be dismissed with costs.

Orders

1. [90]

   I make the following orders:

   1. (1)

      Summons dated 24 August 2016 dismissed.

   2. (2)

      Plaintiff to pay defendants’ costs.