Mackenzie v Allianz Australia Insurance Ltd (No. 2)

The plaintiff, Geoffrey Mackenzie, was involved in a motor vehicle accident on 27 October 2005. On 15 September 2014 the third defendant, a review panel, constituted by Drs Burns, Chan and Crane (the Review Panel), issued a certificate in which it determined that the plaintiff’s Whole Person Impairment (WPI) from the right shoulder and back injuries sustained in the motor vehicle accident was 0%.

By summons filed on 10 December 2014, the plaintiff, sought judicial review of a certificate and statement of reasons issued by the second defendant, the Motor Accidents Authority of New South Wales (the Authority), constituted by the Review Panel. The Review Panel was appointed under the Motor Accidents Compensation Act 1999 (NSW) (the Act). The plaintiff sought relief pursuant to s 69 of the Supreme Court Act 1970 (NSW) and on the basis of jurisdictional error. As these proceedings were commenced within three months of the date of the decision, they were commenced within time: Uniform Civil Procedure Rules 2005 (NSW), r 59.10.

All references in these reasons to legislation are, unless otherwise stated, references to the Act.

The first defendant, Allianz Australia Insurance Ltd (the insurer), for whom Mr Robinson SC appeared with Ms Poljak, was the only active defendant. The second and the third defendants have filed submitting appearances.

At the hearing of the summons, Mr Romaniuk SC, who appeared with Ms Grotte on behalf of the plaintiff, sought leave (which was not opposed) to amend the summons orally by substituting the following grounds for those that were contained in paragraph 6(b) of the summons. The plaintiff used the expression “negative causation finding” as shorthand for the Review Panel’s finding that the injuries sustained by the plaintiff in the motor vehicle accident had resolved and that any impairment was no longer caused by the accident. The new grounds are:

I note that I have paraphrased these grounds from the transcript (rather than the amended summons I directed be filed the day after the hearing) since they represented the basis on which the hearing was ultimately conducted.

In addition to the amended grounds, Mr Romaniuk relied on the further ground (the constitution ground), which was alleged in the summons as filed, that the certificate and reasons were invalid as the Review Panel had impermissibly delegated its function of examining the plaintiff to two members and, accordingly, the Review Panel, as constituted, had failed to perform its statutory task.

Ultimately, during Mr Robinson’s address, Mr Romaniuk clarified that he abandoned all previous written submissions (notwithstanding his earlier confirmation that he relied on them) and relied solely on the oral submissions he had made at the hearing. No oral submissions were made with respect to the assessment of the right shoulder injury. Accordingly, I do not propose to address it further. As the constitutional ground as originally alleged was still pressed, I took Mr Romaniuk’s abandonment of his written submissions not to extend to that ground.

A court book was filed and marked as an exhibit. It relevantly contained:

The plaintiff initially sought to tender five-lever arch folders of documents which comprised the material which had been before the Review Panel. The defendant objected on the basis of Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13; 83 NSWLR 302 at [15] – [19] per Basten JA, Macfarlan JA agreeing. Ultimately, the plaintiff confined its tender to the following documents which comprised a small portion of the material before the Review Panel:

None of the additional documents sought to be tendered formed part of the record for the purposes of s 69 of the Supreme Court Act: Craig v State of South Australia (1995) 184 CLR 163, as qualified by s 69(4) of the Supreme Court Act. Mr Romaniuk did not accept that the documents were admissible only with respect to the challenge based on jurisdictional error, but not with respect to error on the face of the record. This, however, is the distinction which I am required to draw when determining whether, and how, to take such material into account: Allianz Australia Insurance Ltd v Kerr at [15] – [19] per Basten JA, Macfarlan JA agreeing. Mr Romaniuk contended that these documents were admissible because they indicated the case that the plaintiff had put and which had not been addressed by the Review Panel and also that the Review Panel had misapprehended the true situation as to the plaintiff’s pre- and post-accident work history. I understood both complaints to belong to the genus of denial of procedural fairness, which is arguably a basis for jurisdictional error. I admitted them as evidence on those limited bases.

A person, who is otherwise entitled to damages under the Act, is not entitled to damages for non-economic loss unless the degree of permanent impairment is greater than 10%: s 131. Where there is a disagreement about the degree of permanent impairment suffered, the Court may not award damages for non-economic loss unless the degree of permanent impairment has been determined by an assessor, who conducts an assessment in accordance with s 133: s 132. The persons qualified to conduct such assessments are medical practitioners who have the relevant specialty for the task and are appointed by the Authority under s 59.

Following such an assessment, the assessor issues a certificate, which is conclusive evidence as to the matters certified in any court proceedings: s 61(1) and (2). Where there is more than one certificate assessing permanent impairment (because different parts of the body or different impairments are assessed), these figures are added (by reference to a combined table) to arrive at a figure for total permanent impairment.

Section 61(9) provides that a certificate is to set out the reasons for any finding by the medical assessor as to any matter certified in the certificate in respect of which the certificate is conclusive evidence.

A party may apply for a referral of a medical assessment to a review panel on the sole ground that the assessment was "incorrect in a material respect": s 63. If so satisfied, the proper officer of the Authority is to refer the application to a panel of at least three medical assessors: s 63(3). A review panel conducts a new assessment: s 63(3A). Following the review, the panel may confirm or revoke the certificate of assessment issued by the single assessor: s 63(4).

The matters to be assessed by an assessor or a review panel include determinations of causation: for example, whether treatment relates to the injury “caused” by the motor accident (s58(1)(b)) and whether the degree of permanent impairment as a result of the injury “caused” by the motor accident is greater than 10%.

The Authority may issue guidelines under s 44 of the Act. Section 65(1) of the Act provides that medical assessments under Part 3.4 (ss 57 – 65) are subject to relevant provisions of MAA Medical Guidelines (issued under s 44(1)(d) of the Act) relating to the procedures for the referral of disputes for assessment or review of assessments and the procedure for assessment. It is common ground that the applicable guidelines are the MAA Medical Assessment Guidelines (effective 1 October 2008) (the Medical Assessment Guidelines).

The Authority has power to issue guidelines with respect to the assessment of the degree of impairment of an injured person as a result of an injury caused by a motor vehicle accident: s 44(1)(c). It is common ground that the applicable guidelines are the MAA Permanent Impairment Guidelines (1 October 2007) (the Permanent Impairment Guidelines).

The Permanent Impairment Guidelines provide, so far as is material, with respect to causation as follows:

Clause 1.20 of the Permanent Impairment Guidelines provides:

The Permanent Impairment Guidelines provide that if the text is in bold, it is a directive as to how the assessment should be performed (cl 1.3). Clause 1.23, which is in bold text, provides that the evaluation should only consider the impairment as it is at the time of the assessment.

The Medical Assessment Guidelines relevantly provide as follows:

This Court has supervisory jurisdiction in respect of decisions by review panels under the Act under s 69 of the Supreme Court Act as well as in the exercise of its inherent jurisdiction in respect of jurisdictional error. The review under s 69 is limited to error on the face of the record, which, by reason of s 69(4), includes the reasons of the decision-maker.

The lengthy period between the plaintiff’s motor vehicle accident on 27 October 2005 and the filing of the summons in the present proceedings on 10 December 2014 can be explained by the following procedural history which is largely taken from the plaintiff’s chronology.

The insurer issued a notice under s 81 admitting breach of duty of care. As the plaintiff and the insurer were unable to agree on the degree of WPI, the plaintiff filed an application for assessment of a permanent impairment dispute on 4 April 2008. He was assessed and a certificate of determination issued on 21 July 2008. His application for review of the certificate was dismissed. On 22 April 2009 he filed an application for further assessment of a permanent impairment dispute. He was assessed and a certificate of determination issued on 25 August 2010. His application for review was dismissed on 6 December 2010. On 16 March 2011, the plaintiff filed another application for further assessment of a permanent impairment dispute. On 12 May 2011, his application was granted and he was referred for further assessment. On 2 June 2011 the insurer filed a summons in this Court seeking judicial review of the decision made on 12 May 2011. Its summons was dismissed on 30 November 2012: Allianz Australia Insurance Ltd v Mackenzie [2012] NSWSC 1458 (Johnson J).

The plaintiff was referred for further assessment to Assessor Thomson who issued reasons and a certificate on 14 February 2013. The insurer applied for review of this assessment, which led to the matter being referred to a review panel constituted by Assessors Rosenthal, Marsh and Eriksen. A further combined certificate and reasons issued on 22 July 2013. The insurer sought judicial review of the review panel’s decision by filing a summons in this Court on 27 August 2013. This Court quashed the review panel’s certificate of 22 July 2013 and referred the matter to be reallocated to a new review panel: Allianz Australia Insurance Ltd v Mackenzie [2014] NSWSC 67 (Hoeben CJ at CL).

On 15 September 2014 the Review Panel, constituted by Drs Burns, Chan and Crane, issued a certificate in which it determined that the plaintiff’s WPI from the right shoulder and back injuries sustained in the motor vehicle accident was 0%. On 10 December 2014, the plaintiff filed a summons in this Court in the present proceedings seeking judicial review of the certificate.

The material before the Review Panel was substantial and comprised all of the material which had been before the previous decision-makers referred to above. That material amounted to over 2,500 pages, which was said to include several multiple copies of documents.

The Review Panel met by teleconference on 17 April 2014 and determined that a medical examination of the plaintiff was necessary for it to reach a decision. The Authority wrote on that date to inform the plaintiff that he would be examined by Assessors Chan and Crane on Monday 12 May 2014. No objection was taken at the time to the examination being conducted by two of the three members of the Review Panel. The examination of the plaintiff took place on the appointed day and was conducted by Assessors Chan and Crane.

The Review Panel conducted its medical assessment, gave reasons and issued a certificate on 15 September 2014.

The Review Panel issued a certificate under Part 3.4 of the Act and determined that:

The reasons of the Review Panel record that all panel members had received and considered all the documentation described, including: the reasons of Assessor Thomson and all the documentation which had been provided to him; and the Diagnostic Radiology Report dated 11 August 2014 obtained from Dr Korber. The panel confirmed in its reasons that it had “considered afresh all aspects of the assessment under review”.

The Review Panel’s reasons record the following:

The Review Panel then addressed what it referred to as the “Panel clinical examination” and set out in its reasons what had occurred in the examination, including the history the plaintiff had given. The reasons included the following:

The Review Panel noted that the plaintiff underwent a lumbar spinal fusion operation performed by Dr Fielding on 21 December 2009.

The Review Panel’s reasons relevantly included the following:

The three matters that constituted the causation grounds pressed by the plaintiff are set out above in the paraphrased passage from Mr Romaniuk’s oral amendment. The expression of those grounds includes the submission made in respect of them. To the extent to which he expanded those submissions, the further submissions are summarised below.

The plaintiff contended that the Review Panel’s reasons should be understood as meaning that he recovered from the injuries within the two-week period following which he returned to work. Mr Romaniuk said that, fairly read, the reasons indicated that the Review Panel had failed to appreciate that there was a substantial difference between the pre-accident work undertaken by the plaintiff and the work he was able to do for the short period of his return. He argued that, as a matter of logic, it could not be inferred that the condition had resolved. Moreover he submitted that there was no evidence that permitted a finding that the plaintiff had recovered within two weeks, since the only available material to support such a conclusion comprised the West Wyalong hospital notes and the fact of his having returned to work, although not of the same intensity or difficulty.

Mr Romaniuk further submitted that, although the Review Panel had referred to the evidence of the plaintiff’s work history, it had misapprehended its significance. In this regard, he relied on what Gleeson JA said in Rodger v De Gelder at [111] (Macfarlan and Leeming JJA agreeing) as relevantly comparable to the present case:

Mr Romaniuk submitted that the negative causation finding amounted to a failure to address the plaintiff’s case, as indicated by the material before the Review Panel. He relied on the lack of any mention of Dr Yeo’s report in the reasons of the Review Panel as a reflection of its failure to either appreciate, or address, the causal hypothesis that supported the plaintiff’s claim for WPI in respect of his back injury.

The defendant accused the plaintiff of dressing up a merits review in the guise of an application for judicial review. Mr Robinson submitted that the Review Panel’s reasons indicated that it regarded the DVD surveillance footage as highly significant and at odds with the plaintiff’s hypothesis that linked his continuing back difficulties and the fusion operation on the one hand with the injuries sustained in the motor vehicle accident on the other.

Moreover, Mr Robinson submitted that the Review Panel was entitled to perform its assessment as it saw fit and was, thus, entitled (as it chose to do) to examine the plaintiff for the purposes of obtaining information and to obtain a report from Dr Korber which compared and analysed the radiological findings with respect, relevantly, to the plaintiff’s lumbar spine over time, including pre-accident. Mr Robinson contended that the Review Panel’s findings and assessment were open to it and that, accordingly, this Court had no jurisdiction to disturb the certificate, no denial of procedural fairness, error of law on the face of the record or jurisdictional error having been established.

The Review Panel’s obligation to give reasons required it to set out "the actual path of reasoning" by which it arrived at the assessment: Wingfoot Australia Partners Pty Limited v Kocak [2013] HCA 43 at [48] (Kocak); Frost v Kourouche [2014] NSWCA 39. The reasons actually stated are to be understood as recording the steps that were in fact taken at arriving at that result: Waterways Authority v Fitzgibbon [2005] HCA 57 at [130] per Hayne J.

In Kocak, the High Court considered a scheme analogous to the one that applies in the present case. At [47] the High Court (French CJ, Crennan, Bell, Gageler and Keane JJ) said (omitting footnotes):

Although there is a requirement for procedural fairness, there is no right to a hearing as such. The Review Panel may decide to examine the claimant, or not, as the case may be. In the present case it decided to do so, in part to obtain information from him relevant to the issue of causation and, it appears, to put to the plaintiff various matters, including what the assessors considered the DVD surveillance footage taken in April 2007 showed. The reasons reveal that the two Assessors who examined the plaintiff on behalf of the Review Panel put to the plaintiff in the course of the examination their concerns about the apparent inconsistency between his history and the footage. I regard the Review Panel’s approach as appropriate and consistent with procedural fairness.

I do not consider that the reasons reveal any misapprehension about the plaintiff’s work history. The reasons show that the Review Panel appreciated that: the plaintiff was doing heavy farm work prior to the accident; he had two weeks off work after the accident; he returned to lighter work (confined to driving) and found, after a short period, that he was unable to cope; and thereafter he did not return to manual work. I do not detect any proper basis for Mr Romaniuk’s submission that the Review Panel must have decided that he had recovered shortly after the accident before he returned to the harvesting work, which involved driving. The submission does not, in my view, do justice to the reasons of the Review Panel. Mr Romaniuk was unable to make good the submission that there was any error arising from any disparity between the plaintiff’s statements or histories given and the findings of the Review Panel as expressed in its reasons, much less an error of law. I do not regard the present case as in any way analogous to the situation referred to by Gleeson JA in Rodger v De Gelder at [111].

The Review Panel’s ultimate finding was that the soft tissue lumbar spine injury the plaintiff sustained in the accident had resolved and accordingly gave rise to no permanent impairment. It was directed by cl 1.23 to evaluate the impairment only as it was at the time of the assessment. The non-medical causation determination (pursuant to cl 1.8 (b) of the Permanent Impairment Guidelines) obliged it to consider the relevant chronology, including the report of Dr Korber and the DVD surveillance footage, as well as the other evidence including that of Associate Professor Yeo. There is nothing to indicate that the Review Panel did not perform the task it was required to do, or that it failed to have regard to any aspect of the evidence it was obliged to consider.

The Review Panel considered and referred in its reasons to the following significant pieces of evidence in reaching its conclusion on causation:

The Review Panel was not required to state why it did not accept certain matters. Its duty was to set out its findings and give reasons for the decision it actually made: Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at [10] (per Gleeson CJ) and [68] (per McHugh, Gummow and Hayne JJ). In my view, the plaintiff has failed to show any respect in which the Review Panel failed to fulfil its obligation.

Moreover, even if it could reasonably be said (and I am not persuaded that it can) that the Review Panel failed to give sufficient weight to Associate Professor Yeo’s report (a difficult submission to advance since Associate Professor Yeo was unaware of the DVD surveillance footage, on which the Review Panel placed considerable significance), or gave too much weight to the contemporaneous hospital note from West Wyalong Hospital (in which the treating doctor noted that the injury was not a significant one), this would not entitle this Court to intervene: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41 per Mason J.

I discern nothing in the Review Panel’s approach to causation that reveals error, much less legal error of a kind that would give rise to relief under s 69 of the Supreme Court Act, or jurisdictional error. The importance of respecting Parliament’s intention to confer on the Review Panel the obligation of making an assessment is not to be underestimated: Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35 – 36 per Brennan J.

The first ground has not been made out.

The constitutional ground arose from the circumstance that the re-examination of the plaintiff that was conducted as part of the Review Panel’s assessment was conducted by two out of three of the assessors.

In reliance on the constitution ground, Mr Romaniuk submitted that the certificate was vitiated by the circumstance that only two of the three members who comprised the Review Panel had participated in the examination of the plaintiff. He contended that Bradley v Insurance Australia Ltd t/as NRMA Insurance [2015] NSWSC 950 (Bradley) (in which I rejected the same argument) was wrongly decided and that I should reconsider its correctness in light of the plaintiff’s further submissions in the present case. The plaintiff submitted that there was no power, whether express or implied, in s 63 or any other provision of the Act that would permit the Review Panel to conduct a valid examination of a claimant unless all members of the panel were present throughout. He also relied on cl 16.21.7 of the Medical Assessment Guidelines in support of his submission that a specific power to delegate an aspect of the Review Panel’s task was required (in that case signing the certificate) and that, as no such provision had been made for conducting the examination, it had to be conducted by all constituent members of the Review Panel.

Mr Romaniuk relied on the following passage in McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163; 71 NSWLR 609 at [23] per Giles JA:

Mr Robinson submitted that the principles of stare decisis obliged me to follow my own decision in Bradley unless I was persuaded, contrary to his submission, that I was “clearly wrong”. He submitted that, as I found in Bradley, there was nothing in the Act or the Guidelines that required all the members of the Review Panel to be present at any such re-examination. Mr Robinson contended that the statutory intention was plain in that the legislature (through the Act and the Guidelines, which are to be treated as delegated legislation) intended the Review Panel, and its individual members, to determine their own procedure as they saw fit. He contended that it was open to the Review Panel to determine that a re-examination ought take place (pursuant to cl 16.21.2 of the Medical Assessment Guidelines) but decide that it be conducted, as occurred in the present case, by two out of the three assessors. Mr Robinson relied on cl 11.1 of the Medical Assessment Guidelines in support of the submission that the fact that legislature specifically contemplated that a single Assessor who was also a member of a Review Panel could determine his or her own procedure indicated that the legislature contemplated that different aspects of the investigations leading to the assessment could be conducted by different members of the Review Panel as long as the actual assessment was made by all three of them.

Further, the defendant submitted that the plaintiff had been informed, by letter to his solicitors dated 23 April 2014, that he would be re-examined by two of the assessors. The defendant argued that as the plaintiff, who was legally represented at the time, had taken no objection to this course, the plaintiff had acquiesced in being examined by fewer than the full complement of members that comprised the Review Panel and, accordingly, relief under s 69 of the Supreme Court Act ought be refused on discretionary grounds.

I understood the plaintiff (as in Bradley) to confine his challenge on the constitutional ground to the fact that one of the assessors on the Review Panel had not participated in the examination of the plaintiff, which was conducted by the other two. The plaintiff did not contend that I ought infer that the decision to have the examination conducted by Drs Chan and Crane was made other than by all three members of the Review Panel: see Carpenter v Carpenter Grazing Co Pty Limited (1987) 5 ACLC 506 at 514 (Hope JA, Samuels and Priestley JJA agreeing).

For the reasons I gave in Bradley at [68] – [74], I do not consider this ground to have been made out. In summary, in my view, although it is only the panel, comprised of all its members, which can conduct a “new assessment” and make the relevant determination, there is no requirement that all three participate in each of the tasks that leads to the assessment.

In my view, when cl 1.20 of the Permanent Impairment Guidelines is read with cl 11.1 and cl 16.21.2 of the Medical Assessment Guidelines and the Act, it becomes apparent that, although the Review Panel is to determine the procedure to be taken (including whether the claimant is to be examined), it can determine who is to conduct any task involved, apart from the assessment itself, which must be arrived at by the three collectively.

Although Mr Romaniuk contended that he ought to have placed more emphasis on cl 16.21.7 in Bradley, I do not discern any material difference between the arguments put or the question to be determined between the present case and Bradley. Accordingly, the doctrine of stare decisis applies: Favelle Mort Ltd v Murray (1976) 133 CLR 580 at 591 per Barwick CJ. In any event, I am not persuaded that I was in error in Bradley. Moreover, the appropriate forum for the correction of a primary judge’s errors (if they be found to be so) is the Court of Appeal: see Tiverton Estates Ltd v Wearwell Ltd [1975] Ch. 146 per Scarman LJ at 172.

Accordingly, I consider that the Act and the Medical Assessment Guidelines permitted the Review Panel to determine that the examination of the plaintiff was to be conducted by Assessors Crane and Chan.

In these circumstances it is not necessary for me to consider the submission made by the defendant that the plaintiff had, in any event, waived compliance with any requirement that all three constituent members of the Review Panel be present throughout the examination.

For the foregoing reasons, I am not persuaded that any of the challenges to the Review Panel’s assessment which the plaintiff ultimately pressed have been made out. The making of the assessment was open to the Review Panel. Neither error of law on the face of the record nor jurisdictional error has been established.

There are aspects of the conduct of the proceedings by the plaintiff which may affect the appropriate costs order. However, as I have not heard from the parties as to costs, I propose to make an order reflecting the conventional position that costs follow the event, subject to any party making an application for a different costs order.

I make the following orders: