Findlater v Insurance Australia Limited t/as NRMA Insurance

1. [1]

   HER HONOUR: This judgment concerns a judicial review from a decision of an approved medical officer of the State Insurance Regulatory Authority of NSW (“SIRA”) as to causation.

2. [2]

   By amended summons filed 23 September 2020, the plaintiff seeks:

   1. (1)

      an order pursuant to r 59.10(2) of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) extending the time for the plaintiff to bring judicial review proceedings with respect to the decision of the third defendant made on 31 December 2019 in Medical Assessment Service (“MAS”) matter no 2019/04/2463 (“the Medical Assessor’s decision”);

   2. (2)

      an order in the nature of certiorari, or alternatively, an order setting aside or declaring invalid the decision, and a consequential order in the nature of certiorari, or alternatively, an order setting aside or declaring invalid the decision of the Proper Officer of the second defendant purportedly made on 21 April 2020 in MAS matter no 2019/04/2463 (“the Proper Officer’s decision”);

   3. (3)

      an order that the plaintiff’s application for assessment of a permanent impairment dispute in MAS matter no 2019/04/2463 be remitted to the second defendant to be dealt with according to law;

   4. (4)

      in the alternative to the claims in paras [1], [2] and [3] above, a declaration that the Proper Officer’s decision is affected by error of law on the face of the record and/or by jurisdictional error, and an order in the nature of certiorari, or alternatively, an order setting it aside or declaring it invalid; and

   5. (5)

      further to para [4] above, an order that the plaintiff’s application for assessment of a permanent impairment dispute in MAS matter no 2019/04/2463 be remitted to the second defendant to be dealt with according to law.

3. [3]

   The plaintiff is John Peter Michael Findlater. The first defendant is Insurance Australia Ltd t/as NRMA Insurance (“the insurer”). The second defendant is SIRA. The third defendant is Dr Clive Kenna, consultant in musculoskeletal pain management, in his capacity as a medical assessor of SIRA (“the Medical Assessor”). All the defendants have filed submitting appearances. Hence, as the application was not opposed, so there is no real contradictor. I have read the submissions and the affidavit of the plaintiff’s solicitor, Mark Capolupo, dated 28 August 2020. I have reached my own conclusion informed by the documentation annexed to his affidavit.

Extension of time

1. [4]

   The first issue that needs to be addressed is whether the plaintiff should be granted an extension of time in relation to the filing of the summons.

2. [5]

   The plaintiff requires an order under UCPR 59.10(2) extending the time for him to bring these proceedings with respect to the Medical Assessor’s decision. The basis for the extension is that it was appropriate for the plaintiff to first exhaust his review rights under the Motor Accidents Compensation Act 1999 (NSW) (“the MAC Act”) before commencing proceedings in this Court. The approach taken by the plaintiff is an approach recently endorsed by this Court: see Slade v Insurance Australia Limited t/as NRMA [2020] NSWSC 1031 at [22] per Wright J, citing Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 at [91] to [92].

3. [6]

   The plaintiff adopted the correct approach by exhausting his statutory appeal rights before seeking judicial review in this Court. The insurer does not challenge the application for an extension of time. In my view, it is appropriate that I grant an extension of time up to and including 14 July 2020.

Background

1. [7]

   On 22 January 2014, the plaintiff was riding his motorcycle along the bus lane on Victoria Road near Drummoyne when he collided with the back of a truck which had cut across the middle lane into his path while pulling into a service station (“the accident”). The collision caused the plaintiff to fall from his bike.

2. [8]

   The plaintiff’s claim for damages is governed by the MAC Act.

3. [9]

   The insurer is the compulsory third party insurer of the truck at fault. It has admitted liability for the accident. The plaintiff’s damages remain to be assessed by a claims assessor attached to the Claims Assessment and Resolution Service (“CARS”) of SIRA.

The statutory regime

1. [10]

   Under s 131 of the MAC Act, no damages may be awarded to the plaintiff for non-economic loss unless his degree of permanent impairment as a result of the injury caused by the accident is greater than 10%.

2. [11]

   There is a dispute between the plaintiff and the insurer as to whether the plaintiff’s total degree of permanent impairment resulting from his cervical spine injury caused by the accident is greater than 10%.

3. [12]

   Part 3.4 of the MAC Act governs how disputes between a claimant and an insurer concerning medical assessment matters are determined.

4. [13]

   Section 57 of the MAC Act defines a “medical dispute” as meaning a disagreement or issue to which Part 3.4 applies. In turn, s 58(1)(d) provides that Part 3.4 applies to a disagreement between a claimant and an insurer about whether the degree of permanent impairment as a result of the injury caused by the motor accident is greater than 10%. Section 60(1) provides that a medical dispute may be referred to the Authority for assessment under Part 3.4 by either party to the dispute or by a court or claims assessor.

5. [14]

   The dispute as to the degree of the plaintiff’s permanent impairment was initially referred to the Medical Assessor, who certified that the plaintiff’s cervical spine injury did not give rise to a degree of permanent impairment greater than 10%. The Medical Assessor issued his certificate in September 2015.

6. [15]

   In August 2019, the plaintiff lodged an application for a further assessment of the permanent impairment dispute. The application for a further medical assessment was accepted by SIRA. The application was made under s 62(1)(a) of the MAC Act, which provides that a matter referred for assessment under Part 3.4 may be referred again by any party to the medical dispute, but only on the grounds of the deterioration of the injury or additional relevant information about the injury.

7. [16]

   The power to refer a matter for further medical assessment under s 62(1)(a) of the MAC Act is qualified by s 62(1A), which provides that a matter may not be referred again for assessment by a party to the medical dispute on the grounds of deterioration of the injury or additional relevant information about the injury unless the deterioration or additional information is such as to be capable of having a material effect on the outcome of the previous assessment.

The Motor Accidents Permanent Impairment Guidelines

1. [17]

   The assessment of permanent impairment is governed by the Motor Accidents Permanent Impairment Guidelines (“the Guidelines”). In summary, it is the medical assessor’s task to place the spinal injury into the appropriate Diagnosis Related Estimates (“DRE”) category. The DRE categories are listed in Table 7 of the Guidelines. In Table 7, “multi-level structural compromise” qualifies for a DRE categorisation of IV or V.

2. [18]

   Clause 1.144 of the Guidelines defines “multi-level structural compromise” as being fractures of more than one vertebra. However, cl 1.145 of the Guidelines provides that multi-level structural compromise also includes a spinal fusion and an intervertebral disc replacement.

3. [19]

   There is no issue that on 15 August 2018, the plaintiff had an intervertebral disc replacement at C4-5, described by the plaintiff’s treating neurosurgeon, Dr Paul D’Urso, as a “disc arthroplasty”. Accordingly, the plaintiff had suffered a multi-level structural compromise in accordance with the expanded definition in cl 1.145 of the Guidelines. In these circumstances, the plaintiff submitted that he qualified for a permanent impairment rating based on DRE category IV or V, either of which category yields a greater than 10% permanent impairment, provided that the surgery in August 2018 related to the cervical spine injury caused by the accident.

4. [20]

   As to how the issue of causation of injury is determined by a medical assessor, the Guidelines provide:

5. [21]

   Given the plaintiff’s disc replacement surgery, there was a subsidiary issue to determine, which was whether the disc replacement surgery was related to the plaintiff’s cervical spine injury caused by the motor accident.

6. [22]

   Treatment is related to an injury caused by a motor accident if the accident makes a material contribution to the need for treatment. In determining causation, a medical assessor must consider whether the treatment would not have arisen but for the occurrence of the accident: AAI Limited I/as AAMI v Phillips [2018] NSWSC 1710 at [29] per Davies J.

7. [23]

   Finally, cll 1.31 and 1.34 of the Guidelines provide:

The application for further assessment

1. [24]

   The application for further assessment was supported by reports from Dr D’Urso dated 26 June 2019 and Dr Gerard Barold, specialist in occupational medicine, dated 24 June 2019. The plaintiff submitted that the reports of Drs D’Urso and Barold constituted additional relevant information about the injury which was capable of having a material effect on the outcome of the previous assessment, in the sense that the plaintiff’s degree of permanent impairment would be assessed as being greater than 10%. The crux of the plaintiff’s argument was that Dr D’Urso had opined in his report that the accident precipitated a worsening of the plaintiff’s pre-existing cervical spine injury which caused the need for surgery. Dr D’Urso stated:

The certificate and reasons of the Medical Assessor dated 31 December 2019

1. [25]

   On 31 December 2019, the Medical Assessor certified that the plaintiff’s rib fractures and cervical spine injury gave rise to a degree of permanent impairment which was not greater than 10%. In his reasons for his decision, the Medical Assessor referred to previous assessment on 29 September 2015. The plaintiff had stated his belief that the accident had re-aggravated a previous injury to his neck. It was the plaintiff’s opinion that the accident had worsened his pre-existing condition, although he acknowledged that he was symptomatic prior to the accident and had never made a full recovery (p 5).

2. [26]

   The Medical Assessor then made a number of comments in relation to his September 2015 assessment. He said that there was a well-documented prior history of cervical spine complaints relating to the plaintiff’s employment in the Australian Navy. He went on to say that there was no doubt that the plaintiff had a significant prior history of neck problems, and although there was no quantifiable assessment previously with regards to the impairment, the Medical Assessor considered it plausible that the accident aggravated a pre-existing condition.

3. [27]

   The Medical Assessor concluded that the plaintiff had suffered a soft tissue injury to the cervical spine and aggravation of degenerative changes as a result of the accident. According to the Medical Assessor, it was important to note that after the accident, the plaintiff' complained of localised neck pain with no referral into either upper limb.

4. [28]

   Next, the Medical Assessor dealt with the plaintiff’s current symptoms and status since his assessment in September 2015. The Medical Assessor noted that the plaintiff had undergone a C4/5 disc replacement procedure and that it was Dr D’Urso’s opinion that the surgery resulted from the accident and therefore sounded in a degree of permanent impairment greater than 10%. Dr D’Urso had attributed a degree of permanent impairment of 25% for the cervical spine injury and 1% for the surgical scar.

5. [29]

   The Medical Assessor also noted with interest that in late 2016, the plaintiff had experienced a significant deterioration of his cervical spine injury after a heavy lifting incident at work. In the opinion of the Medical Assessor, it was ultimately the heavy lifting incident which resulted in the need for surgery.

6. [30]

   The Medical Assessor then summarised the contents of D’Urso’s report as follows:

7. [31]

   In his reasons, the Medical Assessor then referred to documentation he considered to be important. One document was a letter from Dr D’Urso dated 26 June 2017 to the plaintiff’s treating general practitioner, which referred to the accident and the heavy lifting incident in January 2016 that produced severe cervical pain with radiation into the right arm, including some paraesthesia and mild weakness. The Medical Assessor also noted that there was no history of radicular arm pain for three years after the accident. It was only after the heavy lifting incident that there was an acute flare-up of the plaintiff's right-sided neck pain involving his right upper extremity. At pp 15 to 18 of his reasons, the Medical Assessor made findings on his clinical examination of the plaintiff.

8. [32]

   The Medical Assessor in his written reasons set out his conclusions on causation at pp 20-24. The Medical Assessor relevantly stated:

9. [33]

   The Medical Assessor then considered cl 1.6 of the Guidelines and concluded:

Grounds of judicial review

1. [34]

   While the plaintiff’s grounds of judicial review are expressed in different ways, they all centre upon the Medical Assessor’s approach to causation. I have set them out as follows.

2. [35]

   The first ground of judicial review is that in determining whether the plaintiff's cervical spine surgery on 15 August 2018 related to his cervical spine injury caused by the motor accident, the Medical Assessor took into account an irrelevant consideration, namely that in paying for the cervical spine surgery, the plaintiff’s previous employer had clearly acknowledged that the plaintiff’s employment had been a “very substantial contributing factor to the need for surgery”.

3. [36]

   The second ground of judicial review is that there was no evidence that the plaintiff’s previous employer had clearly acknowledged that his employment had been a “very substantial contributing factor to the need for surgery”. A finding of fact for which there is no evidence is an error of law which appears on the face of the record.

4. [37]

   The third ground of judicial review is that the Medical Assessor did not employ the proper test to determine whether the plaintiff’s cervical spine surgery related to his cervical spine injury caused by the motor accident. The proper test involved asking whether or not the subject motor accident made at least a material contribution to the need for surgery. Further, the plaintiff submitted that the Medical Assessor should have considered whether the surgery would not have arisen but for the accident.

5. [38]

   The fourth ground of judicial review is that the plaintiff was denied natural justice or procedural fairness. He was not given the opportunity to respond to the argument that the surgery did not relate to the cervical spine injury caused by the motor accident on the basis that his employer had paid for the surgery.

6. [39]

   The fifth ground of judicial review is that the Medical Assessor failed to apply the relevant Guidelines. Clause 1.7 of the Guidelines, set out earlier in this judgment, outlines the accepted approach to determining causation. The Guidelines recommend considering the question, “Would this injury (or impairment) have occurred if not for the accident?” The plaintiff submitted that the Medical Assessor instead posed the question, “Would this (surgery) have occurred if not for the accident?” It is the plaintiff’s position that the Medical Assessor asked himself the wrong question, and as a consequence, took into account the payment of the surgery, which was an irrelevant matter.

7. [40]

   The final ground of judicial review is that the Medical Assessor failed to observe cll 1.31 and 1.34 of the Guidelines by failing to calculate pre-existing and subsequent and unrelated impairment.

8. [41]

   The plaintiff submitted that the Medical Assessor took into account an irrelevant consideration in his determination, which was that by paying for the plaintiff’s cervical spine surgery, the plaintiff’s employer had clearly acknowledged that his employment had been a “very substantial contributing factor to the need for surgery”. It was on this basis that the Medical Assessor determined that liability to pay for the cost of surgery had been accepted and causation of the need for surgery thereby established.

9. [42]

   The plaintiff submitted that the identification of relevant and irrelevant considerations is to be drawn from the statute empowering the decision-maker to act, rather than from the particular facts of the case that the decision-maker is called on to consider: Rodger v De Gelder [2015] NSWCA 211 at [85]; (2015) 71 MVR 514 (Gleeson JA; Macfarlan JJA and Leeming agreeing) citing Abebe v Commonwealth of Australia [1999] HCA 14; 197 CLR 510 at [195] (per Gummow and Hayne JJ) and Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; (2012) 61 MVR 443 at [15] (Basten JA; McColl and Macfarlan JJA agreeing).

10. [43]

    It is the plaintiff’s case that identification of relevant and irrelevant considerations can be drawn from cl 1.6 of the Guidelines. As the Medical Assessor acknowledged, he was to consider physical, chemical or biological factors which may have contributed to the occurrence of the plaintiff’s medical condition. However, this meant that the Medical Assessor needed to only concern himself with the evidence, in the form of clinical records, expert reports, reports from treating medical practitioners and the evidence from the plaintiff concerning the circumstances of the accident and the symptoms he experienced thereafter. The plaintiff submitted that the fact that his employer might have paid for the surgery was irrelevant on the issue of causation of injury, and involved ex post facto reasoning on the Medical Assessor’s part.

11. [44]

    Further, the fact that the plaintiff’s employer might have paid for the surgery was irrelevant to the question as to whether the plaintiff’s cervical spine injury caused by the motor accident had made a material contribution to the need for surgery. It was also irrelevant to the question as to whether or not the surgery would have been performed but for the plaintiff’s cervical spine injury caused by the accident. These questions required a consideration of the evidence mentioned in the above paragraph.

12. [45]

    From the reasons of the Medical Assessor, that the fact that the plaintiffs employer had paid for the surgery was decisive on the issue as to whether the surgery related to the plaintiff’s cervical spine injury caused by the accident.

13. [46]

    Critically, the Medical Assessor referred to this line of reasoning in his conclusion at p 22 of his reasons, where he stated, “In that respect, I consider liability has been accepted and causation has been identified”. This was an error of law on the face of the record and a constructive failure to exercise jurisdiction.

14. [47]

    As the plaintiff identified in his submissions, the identification of relevant and irrelevant considerations is to be drawn from the statute which empowers the decision maker to act. Here, it is the provisions of the MAC Act.

15. [48]

    Causation of injury is set out at cll 1.5 to 1.7 of the Guidelines, as reproduced earlier in this decision. The considerations which were relevant to the Medical Assessor’s determination can be drawn from cl 1.6 of the Guidelines. The Medical Assessor correctly stated that he must look at physical, chemical or biological factors which may have contributed to the occurrence of a medical condition.

16. [49]

    However, the Guidelines on causation make no reference to considering who paid for the surgery as a relevant factor in the determination of causation. The Medical Assessor is obliged to adhere to the Guidelines. It may be that both the Navy and motor vehicle accident contributed to the worsening of the plaintiff’s injury to his cervical spine. However, the fact that the Navy paid for the surgery does not, according to the Guidelines, have any role to play in determining causation of the injury. As such, the Medical Assessor took into an account of an irrelevant consideration that was decisive in his decision as to causation. By so doing the Medical Assessor misunderstood the Guidelines and applied the wrong test, which was a constructive failure to exercise jurisdiction: see Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416; (1947) 64 WN (NSW) 107 at 420. In my view, the Medical Assessor’s decision is vitiated by error of law and should be set aside. As this is the central ground of judicial review, it is now not necessary to consider the other grounds of judicial review.

The Proper Officer’s decision

1. [50]

   The plaintiff submitted that if the Court concludes that the Medical Assessor’s certificate should be set aside, it will not be necessary for the Court to review the proper officer’s decision to refuse the plaintiff’s application for review. As I have concluded that the Medical Assessor’s certificate should be set aside, it is not necessary to deal with the Proper Officer’s decision.

Costs

1. [51]

   Costs are reserved.