Allianz Australia Insurance Ltd v Rutland

1. [1]

   McCOLL and MEAGHER JJA: This is an appeal from a decision of the primary judge (Garling J) in proceedings brought under s 69 of the Supreme Court Act 1970 (NSW), setting aside a medical assessment of a review panel of medical assessors undertaken under s 63 of the Motor Accidents Compensation Act 1999 (NSW) (the MAC Act): Rutland v Allianz Australia Insurance Ltd [2014] NSWSC 1583; 68 MVR 533.

Overview

1. [2]

   On 24 April 2009, the younger sister of Kelly Rutland (the respondent) was killed in a motorcycle accident. The respondent attended the scene of the accident and also the hospital, for the purpose of identifying her sister’s body. These experiences traumatised the respondent. In September 2010 she served a personal injury claim on the appellant motor vehicle insurer (Allianz). In September 2012 the respondent brought proceedings against Allianz in the District Court, claiming damages for psychiatric injury arising from nervous shock.

2. [3]

   Allianz disputed that the degree of permanent impairment suffered by the respondent as a result of her psychological injury was greater than 10%: MAC Act, s 58(1)(d). That dispute was referred by the respondent to the Motor Accidents Authority of New South Wales for assessment. The appointed medical assessor, Dr Jager, assessed her impairment at 14%. Allianz applied for a review of that assessment and a panel of three assessors (the Review Panel) concluded the respondent’s permanent impairment was less than the 10% threshold required for the recovery of damages in respect of non-economic loss: MAC Act, s 131. The primary judge set the Review Panel’s assessment aside. Allianz appeals from that order.

3. [4]

   His Honour’s decision was made on two bases. The first was that the Review Panel erred in not undertaking a fresh assessment of the extent of the respondent’s permanent impairment: [77]-[83]. The second was that the Review Panel had failed to accord the respondent procedural fairness in arriving at its conclusion as to the extent of her impairment in one of the six relevant areas of function: [84]-[89]. Allianz challenges, by grounds 1 and 3, the first of those bases and, by ground 2 it challenges the other.

Preliminary question as to competency of appeal

1. [5]

   The respondent raised a preliminary question as to the competency of the appeal. She submitted that a grant of leave was required because the appeal was from an interlocutory decision and involved a monetary value of less than $100,000: Supreme Court Act, ss 101(2)(e), 101(2)(r). The submission as to the interlocutory nature of the proceedings is rejected. The “proceedings in the Court”, meaning the Supreme Court, were for judicial review under s 69. The primary judge’s decision was of final legal effect in relation to those proceedings, notwithstanding that the personal injury proceedings in the District Court remain ongoing. Judicial review proceedings concern the monetary value in the underlying dispute in a way that satisfies the connection between proceedings and value referred to in s 101(2)(r): NRMA Insurance Ltd v Ainsworth [2011] NSWCA 292; 59 MVR 195 at [16]. Here, it is apparent that the respondent’s underlying claim exceeds $100,000. Allianz did not therefore require leave to bring its appeal.

2. [6]

   To enable an understanding of the grounds of appeal, it is necessary first to refer to the relevant statutory guidelines, summarise Dr Jager’s assessment, refer to the statutory provisions governing the review and then to summarise the Review Panel’s reasoning.

Statutory guidelines

1. [7]

   By s 65 of the MAC Act medical assessments under Ch 3, Pt 3.4 are subject to the provisions of the Motor Accident Authority’s Medical Guidelines issued under s 44. In the present context the relevant guidelines were the Medical Assessment Guidelines (MA Guidelines) issued under s 44(1)(d) and effective on 1 October 2008, and the Permanent Impairment Guidelines (PI Guidelines) issued under s 44(1)(c) and which commenced on 1 October 2007. The provisions of the former relevant to assessments performed by the Review Panel are as follows.

2. [8]

   The PI Guidelines direct that an assessment of permanent impairment should consider impairment as it is at the time of the assessment: cl 1.23. Clause 1.20 outlines the three stages of such an assessment:

3. [9]

   Assessment of permanent impairment due to psychiatric injury is dealt with in Ch 7 of the PI Guidelines. Such an assessment must be undertaken in accordance with a Psychiatric Impairment Rating Scale which addresses impairment in six specific areas of function. Impairment in each area is then rated using class descriptors ranging from one to five according to severity. Clauses 7.17 and 7.20 provided:

4. [10]

   As the primary judge noted at [53], the assessment undertaken by Dr Jager and the assessment of the Review Panel had to be conducted having regard to these guidelines and requirements.

Dr Jager’s assessment

1. [11]

   Dr Jager was asked to certify the degree of permanent impairment suffered by the respondent in respect of the following injuries:

2. [12]

   The Certificate provided by Dr Jager to the Medical Assessment Service of the Authority was dated 29 October 2013 and recorded the following conclusions:

3. [13]

   On 11 December 2013 Allianz applied for a review of Dr Jager’s assessment. Both parties provided submissions to the Motor Accident Authority in relation to that application, but no additional factual material was provided. On 6 February 2014, the proper officer of that Authority referred the matter to a panel of three medical assessors.

Relevant statutory provisions

1. [14]

   Review of a medical assessment by a panel of medical assessors is provided for by s 63 of the MAC Act. That section relevantly provided:

2. [15]

   On 13 February 2014 the Motor Accident Authority wrote to the respondent’s solicitors notifying of the convening of the Review Panel. That letter continued:

Review Panel’s assessment

1. [16]

   Before setting out its conclusions, the Review Panel described the assessment that it had undertaken:

2. [17]

   The Review Panel’s conclusions which follow are set out under three headings, which correspond to the three errors said by Allianz to exist in Dr Jager’s assessment.

Did the Review Panel fail to exercise its statutory task by limiting its assessment to the matters said to be “under review”? (grounds 1 and 3)

1. [18]

   The task of a Review Panel under s 63(3A) of the MAC Act is to assess the “medical assessment” referred to it, which here involved assessing the respondent’s degree of permanent impairment: Frost v Kourouche [2014] NSWCA 39; 86 NSWLR 214 at [9]. That assessment is “not limited to a review only of that aspect of the assessment that is alleged to be incorrect and is to be by way of a new assessment of all the matters with which the medical assessment is concerned” [Emphasis added]. While the Review Panel can consider the errors said to exist in the assessment that gave rise to the application for review, the language of s 63(3A) makes clear that it must approach that task “by way of a new assessment of all the matters” and not by way of correcting asserted errors in the first assessment.

2. [19]

   Section 63(3A) confirmed the position to be as stated by Giles JA (Allsop P agreeing) in McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163; 71 NSWLR 609 at [38]. (That decision was delivered on 14 July 2008 which was after that sub-section had been enacted but before it commenced on 1 October 2008: Motor Accidents Compensation Amendment (Claims and Dispute Resolution) Act 2007 (NSW).)

3. [20]

   Whether the Review Panel did give consideration to the whole of the question as to the respondent’s degree of permanent impairment turns on the nature of its assessment as revealed by its reasons, taking into account the material it had before it.

4. [21]

   The primary judge held that the Review Panel did not properly consider that question, concluding at [82]:

5. [22]

   His reasoning for so concluding included (at [77]) that the Review Panel had not examined the respondent in the circumstances of this case:

6. [23]

   Allianz submits that the primary judge erred in finding that the Review Panel had to interview and examine the respondent in order to perform a de novo assessment of her impairment. Furthermore, it suggested in argument that his Honour’s finding in this respect amounted to a mandatory requirement that ‘almost every review panel’ undertake such an examination (tcpt 10/06/15, p 28).

7. [24]

   That submission overstates the effect of the primary judge’s reasoning in at least two respects. First, his Honour expressly declined to determine whether examinations are usually or practically essential to assessments undertaken by review panels: [76]. Secondly, he did not find that an examination of the respondent was a prerequisite to performance of the Review Panel’s statutory task because the failure to examine her was not considered to be a freestanding reason for setting aside the assessment: [78]. The question before the primary judge, as on appeal, was whether the Review Panel approached its task too narrowly so as not to conduct a new assessment of all the relevant matters, with its determination that it was unnecessary to examine the respondent being a possible reflection of that overall approach.

8. [25]

   Allianz submits that the course adopted by the Review Panel was in accordance with the brief reasoning approach outlined by Giles JA in the passage from McKee extracted at [19] above. Whilst it may be accepted that there are different ways in which the Review Panel might in various circumstances go about successfully discharging its task, it must nevertheless be evident that the Review Panel has undertaken its “one task” of assessing the matter, not the errors, referred to it as a whole and afresh: McKee at [38]; Frost at [9]. In our view, taking account of the medical reports and other material before it, the Review Panel’s reasoning shows its overall approach to have been that of addressing asserted error rather than of undertaking its own comprehensive assessment.

9. [26]

   At the outset, the Review Panel states that it has “considered afresh all aspects of the assessment under review” [Emphasis added]. This language is at odds with the statutory language in s 63(3A), which requires a consideration of all the matters with which the medical assessment is concerned as a whole. It is no doubt the case that infelicitous or loose language on the part of a tribunal or expert panel should not be over-emphasised or over-scrutinised: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259 at 272. However, it does not follow that any ambiguity in approach or reasoning has to be resolved in the decision-maker’s favour: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Abigroup Contractors Pty Ltd [2013] FCAFC 148 at [190].

10. [27]

    The Review Panel’s reasons go on to state that it has “considered all of the available evidence” and that it did not “identify any other issues which needed to be addressed”, beyond those raised by Allianz. On matters not in dispute, the Review Panel’s approach was to agree with the first assessment “largely for the reasons given by Assessor Jager and for the reasons given in the tables in section 4.” Those additional reasons in each case take as their starting point a comment or statement of Dr Jager in relation to the same area of function.

11. [28]

    The structure of the Review Panel’s reasons, in providing its analysis under three headings that correspond to the errors asserted by Allianz, also indicates an approach directed to correcting for errors, rather than one involving the undertaking of a new assessment. This is further reflected in the scarce reference to material other than that described in Dr Jager’s assessment, or in Allianz’ submissions.

12. [29]

    An example of this can be seen in the Review Panel’s consideration of the respondent’s area of function – “Concentration, persistence and pace”. The Review Panel concludes that Dr Jager’s assessment of the respondent as “forgetful” is irrelevant. It does not, however, then go on to engage with or re-examine the reports of Dr Gertler, Professor McFarlane and Dr Lewin. Professor McFarlane in the latest of those reports dated 3 May 2013 concluded that the respondent was “barely coping” at work and that her capacity to be employed was “highly fragile”. This material is neither referred to nor considered in the Review Panel’s reasons. The Review Panel appears to have proceeded on the basis that if the finding of “forgetfulness” on which Dr Jager relied for his assessment was discounted, the respondent’s capacity to perform her work duties could be assumed.

13. [30]

    The Review Panel’s assessment was to be made with the benefit of Dr Jager’s report, as well as all the material that was before him: MA Guidelines, cl 16.19. As Giles JA explained in McKee at [23], the “plain purpose of s 63” of the MAC Act is to empower the Review Panel to apply its “collegiate professional expertise” to an assessment in the same way that the single assessor had done before them. This cannot occur where the Review Panel gives primacy to the assessment under review in the sense of assuming that, where error is shown in the reasons of the original assessor, there is no need for further consideration of or resort to the underlying factual material beyond that identified in the original assessor’s reasons. There may be other material, not expressly identified by that assessor, which nonetheless supports his or her conclusions. Alternatively, having examined all the same material as the original assessor, the Review Panel may reach a different clinical opinion.

14. [31]

    Finally, although the Review Panel could determine that it was unnecessary to examine the respondent, its discretion to do so (MA Guidelines, cl 16.21.2) is limited by the requirement that it assess all of the matters with which the permanent impairment assessment is concerned (s 63(3A)). Additional matters to be taken into account include (1) the requirement that the Review Panel assess the impairment at the time the matter comes before it (PI Guidelines, cl 1.23); (2) that an assessment of permanent impairment is said to involve a clinical examination “wherever possible” to obtain the required information (PI Guidelines, cl 1.20(ii)); (3) that clinical judgment is considered the “most important tool” in assessing a mental impairment in accordance with the Psychiatric Impairment Rating Scale (PI Guidelines, cl 7.17); and (4) that the Review Panel was required to determine whether additional information was needed (MA Guidelines, cl 16.21.3).

15. [32]

    Allianz submitted that it was not necessary in this case for the Review Panel to examine and interview the respondent. Two matters were said to support that being so. The first was that it was unlikely that her impairment had changed in the months between Dr Jager’s assessment and that of the Review Panel, as her condition was said to have stabilised. The second was that the respondent had not objected to the Review Panel conducting its assessment without the benefit of a clinical examination when she had been notified of that possibility by the Motor Accident Authority’s letter dated 13 February 2014 (see [15] above).

16. [33]

    The task before the Review Panel required that it exercise its collective clinical judgment as to the respondent’s impairment at the time of its deliberation on 7 March 2014. The Review Panel had before it Dr Jager’s reasons for his certificate, based on his examination of the respondent on 8 October 2013, and the other medical reports which pre-dated that assessment. Notably, the Review Panel did not have the benefit of any transcript or clinical notes associated with Dr Jager’s examination. In the circumstances, and recognising that clinical judgment between medical practitioners may vary on the issue which had to be assessed, it would, in our view, be surprising and unusual that a panel of medical assessors seeking to assess a person’s degree of impairment due to a particular psychological injury would not interview the relevant individual so as to be satisfied that they have an accurate and complete history of his or her pre-accident lifestyle, activities and habits and the extent to which those may have changed as a result of that injury (PI Guidelines, cl 7.20). That an examination of the respondent did not occur in this case, when considered with the other matters to which we have referred, confirms our view that the Review Panel undertook its task by reviewing the asserted errors in the assessment already undertaken, rather than exercising an independent and contemporaneous clinical judgment on the question of permanent impairment.

17. [34]

    It follows that we do not consider the primary judge erred in concluding that the Review Panel failed to exercise its statutory function. Grounds 1 and 3 should be dismissed.

Was there a denial of procedural fairness in relation to the Review Panel’s conclusion that the respondent was satisfactorily performing her work tasks? (ground 2)

1. [35]

   The dictates of procedural fairness here, as in other circumstances, are concerned with avoiding practical injustice: Frost at [41]. As Leeming JA explained in Frost, this may require the panel of assessors reviewing a medical assessment under the MAC Act to draw to the attention of the claimant critical facts upon which they propose to base a decision to reject or depart from the underlying assessment and allow him or her an opportunity to respond: [32], [35].

2. [36]

   The primary judge considered (especially at [86] and [89]) that the Review Panel failed to accord the respondent procedural fairness in respect of its consideration of her functional impairment in the area, “Concentration, persistence and pace”:

3. [37]

   In its reasons extracted at [17] above, the Review Panel referred to the respondent’s job title, “Technical Teacher Armament Technician”, and because it was “not disputed” that she held that position, concluded that the respondent maintained the ability to perform that role and could not therefore suffer from a Class 3 (that is, a moderate) impairment. There are difficulties with the Review Panel’s conclusion in this respect. While it was not disputed that the respondent was employed in that position, there was a real issue, as is clear from the evidence extracted below, as to whether she was substantially performing her duties, in the sense of coping with them in a sustainable way.

4. [38]

   The evidence before the Review Panel as to the respondent’s work duties was that contained in Dr Jager’s reasons and in the reports of Dr Gertler, Professor McFarlane and Dr Lewin, each of which had been attached to the respondent’s personal injury claim.

5. [39]

   Dr Gertler’s report dated 22 November 2010 noted that the respondent worked as a teacher at a TAFE college attached to the RAAF and that her “capacity for work … is affected by the symptoms of the chronic adjustment disorder”. In his report, dated 1 June 2011, Professor McFarlane recorded that the respondent was currently working “as a trade teacher in aircraft maintenance”. As to her capacity to perform that role, he observed:

6. [40]

   Professor McFarlane made further comments as to the nature of the respondent’s work and her capacity to perform it in his later report dated 3 May 2013.

7. [41]

   In the report of Dr Lewin dated 22 March 2012, the respondent’s “current” duties are described as “teaching junior, military personnel a variety of courses concerned with fixing aircraft”. He concluded that the respondent’s psychological injury did not impair her capacity to work. In relation to the respondent’s “Concentration, persistence and pace”, it was said that:

8. [42]

   As the primary judge noted at [87], there may be a significant difference between a job description and the duties a person is actually engaged in. The respondent’s job description does not reveal the duties she was actually performing. The Review Panel’s reasons address only the respondent’s inferred capacity to “prepare for and teach such a course”. There was evidence that in April 2013 the respondent was involved in composing new curricula and experiencing difficulties in doing so. There was also evidence that in October 2010 she was experiencing difficulties with some occupational health and safety requirements related to the position she then held. There is no evidence that the Review Panel understood or attempted to understand the actual or various demands of the respondent’s employment at the time it undertook its assessment.

9. [43]

   Dr Jager’s assessment of the respondent as moderately impaired in respect of “Concentration, persistence and pace” was reached following a clinical examination in which he had an opportunity to develop an understanding of the respondent’s employment. He noted in his report that the respondent recalled she had “broke[n] down at work when she could not cope with a faulty course programme”. Such recollections may have formed part of the basis for his conclusion that her impairment, in this respect, was moderate. That recollection was consistent with the respondent finding it “difficult to follow complex instructions, e.g. operating manuals …”: PI Guidelines, Table 7.5. The Review Panel was at a significant information disadvantage. It did not have a record of all that the respondent had told Dr Jager, and chose not to examine the respondent for itself.

10. [44]

    In the way the Review Panel apprehended this aspect of its assessment, a critical fact was whether the respondent was having any difficulties with her current work duties. Depending on the nature of those duties and the extent of any such difficulties, a conclusion might be drawn as to whether the respondent’s functional impairment in that area was mild or moderate. The evidence before the Review Panel was conflicting and directed to the respondent’s work position at different points in time. What was not clear from the material before the Review Panel was what the respondent’s current position was, both as to the duties she was performing and as to whether she was coping with them. In those circumstances, the respondent should have been confronted with the conflicting position revealed by the evidence and given an opportunity to explain the current position, as she asserted it to be.

11. [45]

    It is true both that Allianz’ application for review put in issue the level of concentration required by the respondent’s employment and that the respondent did not object to the Review Panel proceeding without a clinical examination. However, the respondent was entitled to assume that the Review Panel would undertake its task of assessing the degree of her permanent impairment afresh, on the basis of all the material, and that it would request further information if relevant to that enquiry.

12. [46]

    This was not a case where the failure to afford procedural fairness served no practical disservice to the cause of the claimant because there was no further argument to be made or information given: cf Frost at [43]. As the primary judge noted, the obligation of procedural fairness did not necessarily require the Review Panel to examine the respondent: [89]. It did, however, require the Panel to give her the opportunity to address it on whether the inference it proposed to draw concerning an aspect of her functional impairment was available on the facts as they were at that time.

13. [47]

    The primary judge did not err in concluding that the respondent was denied procedural fairness in relation to the Review Panel’s assessment of the extent of her impairment. Ground 2 also is rejected.

Conclusion

1. [48]

   Allianz has not established that the primary judge erred in ordering that the Review Panel’s certificate of assessment dated 13 March 2014 be set aside. The appeal should be dismissed with costs.

2. [49]

   MACFARLAN JA: I agree with the judgment of McColl and Meagher JJA.