AAI Limited t/as AAMI Limited v Jacobs

1. [1]

   The plaintiff is an insurance company. The first defendant has brought a claim for compensation arising out of a motor vehicle accident on 18 June 2017. The claim was made under the Motor Accident Compensation Act 1999 (NSW) (the MACA).

2. [2]

   There is a dispute between the plaintiff and the first defendant about the extent of the first defendant’s whole person impairment (WPI). A WPI is important because it plays a significant part in the assessment of the quantum of damages to which an injured person might be entitled. Without an WPI in excess of 10% a clamant is not entitled to non-economic loss: s 131 of the MACA.

3. [3]

   The WPI dispute was referred to the third defendant for an assessment of the first defendant’s WPI. The third defendant concluded that the first defendant’s WPI was 17%. A certificate to this effect was issued on 8 September 2023.

4. [4]

   The plaintiff disagreed with this assessment and, pursuant to s 63 of the MACA, requested a review of the assessment. On 1 November 2023 the second defendant refused the request.

5. [5]

   The plaintiff then asked the second defendant to effectively review the decision that he had made on 1 November 2023. The second defendant, on 6 December 2023, again said ‘No’.

6. [6]

   The fourth defendant is the president of the Personal Injury Commission of New South Wales. Each of the second, third and fourth defendants have filed submitting appearances.

7. [7]

   On 1 February 2024, the plaintiff filed a summons in this court seeking judicial review of the decisions that had been made by the second and third defendants. An amended summons was filed on 21 March 2024.

8. [8]

   Judicial review proceedings are governed by Pt 59 of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR). Rule 59.10 says proceedings for a judicial review must be commenced within three months of the date of the decision. The rule allows for an extension of time. Sub-rule (3) sets out some considerations that a court should take into account in deciding if an extension should be granted.

9. [9]

   The amended summons seeks judicial review of the decisions made on 4 September 2023, 1 November 2023, and 6 December 2023. The filing of the summons on 1 February 2024 is obviously more than three months beyond the decision made on 4 September 2023. Accordingly, the plaintiff seeks an order extending time for the commencement of the proceedings against the third defendant.

10. [10]

    The extension of time was opposed.

Objection to the plaintiff’s affidavit of Ms Frances Allen dated 2 April 2024

1. [11]

   The plaintiff initially relied only on the affidavit of Ms Johanna Ellem dated 29 February 24

2. [12]

   The first defendant relied on the affidavit of Ms Sareeya Misiano dated 14 March 2024

3. [13]

   On 15 February 2024, a direction was made that the plaintiff was to file and serve any affidavits on which it intended to rely by 29 February 2024. The plaintiff’s affidavit did not deal with the extension of time.

4. [14]

   The plaintiff’s opening written submissions also did not consider the extension.

5. [15]

   The first defendant’s opening written submissions make it very clear that the extension of time is opposed, and it is a very real issue.

6. [16]

   No doubt prompted by the first defendant’s submissions the plaintiff now wishes to rely on an affidavit of Ms Frances Allen which addresses the time issue.

7. [17]

   The first defendant opposed reliance on this affidavit, but if admitted, challenged various paragraphs in the affidavit. I indicated during the hearing that I would give leave to the plaintiff to rely on the affidavit. The first defendant’s submissions were to the effect that the affidavit did not make any real difference. As to the paragraphs that were objected to, the basis was that they contained hearsay material and, in particular, did not reveal the source of the instructions.

8. [18]

   There is an overwhelming inference that the source of the instructions is the plaintiff, namely the insurer giving the solicitor instructions on how to proceed. Once again, senior counsel for the first defendant said that the contents of the paragraphs were of little significance. I formally allowed them to remain in the affidavit.

Should time be extended in respect of the 4 September 2023 assessment?

1. [19]

   As I have said, the amended summons attacks three decisions. The review of the second decision is just in time (the last day). The review of the third decision is in time.

2. [20]

   Theoretically therefore, if I did not extend time in respect of the 4 September 2023 decision, the summons could proceed in respect of the other two decisions.

3. [21]

   In opposing the extension of time, the first defendant relied heavily upon the decision of the NSW Court of Appeal in Insurance Australia Group Limited t/as NRMA Insurance v Keen (2021) 399 ALR 765; [2021] NSWCA 287. Leeming JA said, at [64]:

4. [22]

   The position here is perhaps more ‘difficult’ for the plaintiff than in Keen. The primary attack, from a judicial review aspect, made in the present matter is against the decision of the medical assessor which was made on 4 September 2023. The intervening period is almost 5 months. It is also notable that the plaintiff waited to the very limit of the r 59.10 time period following the dismissal of the review application on 1 November 2023. This action brings into play the observations made in Keen at [65] and [66]:

5. [23]

   It is clear from Ms Allen’s affidavit that the first defendant did not ‘suddenly’ find out about the rulings, but instead was giving instructions and gathering advice through the process. The type of explanation called for on the part of an insurer in Keen, at [66], is absent. There is no explanation of “how the course it has taken complies with the duties to which it is subject.” The explanation given is essentially no more than a timetable of events that occurred.

6. [24]

   The first defendant pointed out that the accident occurred in 2017 and that a significant time has passed which should have prompted more speedy action on the part of the insurer. Although the date of the accident is not irrelevant, I accept the plaintiff’s submission that the more relevant starting date is 14 March 2023 when the first defendant submitted a dispute concerning her WPI.

7. [25]

   Notwithstanding the chronological point just made, it nevertheless remains the case that an insurer has a statutory obligation to act expeditiously. The considerations listed in r 59.10(3), to the extent they are relevant, also do not assist the plaintiff:

   1. (1)

      the plaintiff has a distinct interest in challenging the decision. This consideration would normally operate in favour of the plaintiff. However, in this matter the consideration operates against the plaintiff because, being aware of its interest, it should have acted promptly. As pointed out by the first defendant, the plaintiff “is a sophisticated party that regularly brings judicial review applications in relation to motor accident decisions”;

   2. (2)

      although, as I have said above, the application in respect of the WPI dispute commenced in 2023, the history of the matter does go back to 2017;

   3. (3)

      the plaintiff would have become aware of the decisions very soon after they were made, if not on the day they were made; and

   4. (4)

      although there is a general public interest in claims being resolved expeditiously, I do not regard public interest as relevant to this matter.

8. [26]

   Primarily therefore, because of the plaintiff’s inadequately explained delay, and the delay itself, I am of the view that there should not be an extension of time.

9. [27]

   This conclusion theoretically obviates the need to deal with the complaints in respect of the first decision. However, in case I am wrong on the extension, and to the extent that a judicial review of the second decision is still viable, I make the following comments about the first decision.

The decision of the medical assessor made on 4 September 2023

1. [28]

   The principles for judicial review were set out by the High Court in Plaintiff M64-2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173; [2015] HCA 50 at [23]-[25]:

2. [29]

   The plaintiff’s complaints substantially emanated from two distinct areas of the assessment; the assessors treatment of causation and the assessors asserted failure to properly assess the first defendant’s pre-existing mental health status, including the application of that status in reduction of the assessed WPI.

Causation

1. [30]

   The plaintiff submitted that the words: “There is a plausible mechanism of injury from the circumstances of the physical injuries (pain) from the subject accident and the development of her psychiatric injuries …” were not, at least as required by the Motor Accident Permanent Impairment Guidelines (2018), a compliant expression of causation.

2. [31]

   For example, cll 1.5 and 1.6 of the guidelines state:

3. [32]

   The plaintiff complained that a “plausible mechanism” was not a verification that the accident “did cause or contribute to worsening of the impairment” (emphasis added). The argument ignores the words “or contribute” which, in my view, do fit within the scope of a plausible mechanism.

4. [33]

   I was next taken to cl 1.18.1 of the guidelines which calls upon the assessor to assess WPI in three stages: firstly, a review and evaluation of the available evidence, secondly an interview and a clinical examination and thirdly the preparation of a certificate applying the guidelines.

5. [34]

   Then I was referred to cl 1.203 of the guidelines, which states:

6. [35]

   Emphasis was placed by the plaintiff on the word “must”.

7. [36]

   Bringing all these clauses together, the plaintiff asked:

   1. (1)

      why had the plaintiff’s submissions made to the assessor concerning causation effectively been ignored? This included reliance upon the report of a biomedical engineer, Mr Griffiths, who gave an opinion that because of “the minor nature of the accident … it was not possible for the claimant to have sustained the injuries alleged in the subject accident.” I will have more to say about Mr Griffith’s report when dealing with the 1 November 2023 decision;

   2. (2)

      why had the opinion of Dr Vickery, a psychiatrist, been misinterpreted? The WPI assessment did refer to a diagnosis of a Somataform Chronic Pain Disorder found by Dr Vickery, but ignored the fact that Dr Vickery did not attribute the disorder to the accident; and

   3. (3)

      why had the opinion of Dr Keller been ignored? Dr Keller, an occupational physician, pointed out that the first defendant had “an extensive prior history of neck, shoulder and back complaints … .” Further, in a later report he said: “Any possible minor soft tissue strains attributable to the accident would have been expected to recover within days or weeks following the accident.”

8. [37]

   The plaintiff submitted that the answers to all of the above questions pointed to the assessor having disregarded all of the contrary views so that the causation issues had not been properly dealt with.

9. [38]

   The first defendant responded with this concession:

10. [39]

    In short, submitted the first defendant, the third defendant found there had been physical injuries which in turn caused psychiatric injuries.

11. [40]

    Both parties referred me to a number of authorities, and both drew my attention to the decision of the High Court in Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43. The following paragraphs [47] and [56] are most relevant:

12. [41]

    The first defendant, relying on Wingfoot, and submitting that the assessor did not have to resolve every controversy, pointed out that not only did the assessor have material before him from the plaintiff, but also a good deal of material to the opposite effect. For example:

    1. (1)

       Dr Verma, an occupational physician like Dr Keller, concluded that the first defendant’s injuries “were caused/exacerbated by the incident on 18/6/2017”;

    2. (2)

       Dr Sun, a rehabilitation, and pain physician found the accident had resulted in a number of soft tissue injuries including to the first defendant’s neck, mid back, lower back, and right shoulder;

    3. (3)

       Dr Bodel, an orthopaedic surgeon, diagnosed “a musculoligamentous aggravation of underlying degenerative changes in the cervical spine and lumbar spines caused by the motor vehicle accident and a rotator cuff injury to the region of the shoulders on both sides.” He said, in terms: “The injuries were caused by the motor vehicle accident on 18 June 2017”; and

    4. (4)

       perhaps most significantly, Dr Fukui, in an unchallenged psychological medical assessment for the Personal Injury Commission, found in an “Assessment of Treatment – Causation” that the use of antipsychotic medication (Seroquel) and psychiatric and psychological treatment all “RELATES TO THE INJURY caused by the motor accident”.

13. [42]

    The plaintiff submitted that this case was akin to Rodger v De Gelder [2015] NSWCA 211. Gleeson JA said of the assessment in that case, at [109]:

14. [43]

    However, the first defendant said that the third defendant had considered “the documents provided in the application and reply” and any “additional/late documents” and reached a conclusion that was open on the whole of the material. The first defendant said this was consistent with this passage from Lederer v Insurance Australia Limited Trading as NRMA Insurance [2022] NSWSC 322, at 34:

15. [44]

    The plaintiff placed emphasis on [35] in Lederer:

16. [45]

    The first defendant in turn pointed out that Wingfoot had been decided after Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 and that the important element was that the third defendant had considered the whole of the material before him (the battleground) and had subsequently reached a conclusion that was available to him.

17. [46]

    In other words, it is obviously not enough to simply consider one side’s material, but that does not mean that every dispute in the material needs to be described and particularly resolved. This, albeit imperfect, assessment did look at both sides and did reach a conclusion, including specifically on causation.

Pre-existing condition

1. [47]

   Turning now to the complaints about errors in assessing, or even ignoring, pre-existing conditions, I was particularly referred to the following:

   1. (1)

      the notes of the general practitioner referred to counselling and CBT, the latter presumably being cognitive behaviour therapy, on 21 February 2005, 2 March 2017 and 28 March 2017;

   2. (2)

      Dr Teoh, a psychiatrist, in his report of 30 March 2018 took a history that “She has not had any counselling”;

   3. (3)

      Dr Vickery, also a psychiatrist, in respect of the psychological/psychiatric history noted “Nil reported”;

   4. (4)

      the third defendant was given the following history: “She denied any pre-existing psychiatric conditions, and denied any previous treatment”; and

   5. (5)

      the third defendant was provided with a history that the first defendant had long-standing anxiety problems.

2. [48]

   There are a number of questions and matters arising from the general practitioners’ notes:

   1. (1)

      Dr Vickery, in his report dated 4 April 2023 does not seem to regard the CBT treatment as indicative of a previous psychiatric condition. In addition, he attributes the CBT treatment in 2005 to “pain management” which seems inconsistent with the note which says the first defendant attended for “Bacterial Vaginosis”;

   2. (2)

      the two CBT treatments in 2017 are probably related to domestic issues. The first note refers to “stressed few issues with family” and the second says “Had a confrontation with the psychologist as her husband was assessed with the psych”; and

   3. (3)

      there is no clue as to whether the CBT was of a formal nature or even amounted to little more than a ‘chat’ with the GP.

3. [49]

   The plaintiff submitted that the failure to properly assess a pre-existing condition is reflected in the third defendant’s completion of the table at [25] of the assessment. Firstly, the table says there is “Nil” pre-existing psychiatric evidence and secondly, the table attributes a category number without giving any reason for the decision.

4. [50]

   The plaintiff submitted that the guidelines, at cl 1.218, require an estimate of any pre-existing impairment and then the subtraction of the value of that impairment from the overall WPI. Table 11 however attributes a Class I assessment, as has been attributed here, to: “No deficit, or minor deficit attributable to normal variation in the general population. …” A finding of no pre-existing psychiatric condition is in itself a reason for a Class I rating. It follows that no reason need be given if the rating is Class I.

5. [51]

   Accordingly, I see no substance in the plaintiff’s complaint about the completion of the table.

6. [52]

   The result of the above is that, if I had extended the time for the judicial review of the first decision, that review would not have succeeded.

The review decision on 1 November 2023

1. [53]

   I think the review decision can be dealt with shortly. The plaintiff submitted:

2. [54]

   My finding that the assessment by the third defendant was not susceptible to judicial review means that there would have been no basis for a reference to the review panel.

3. [55]

   The plaintiff submitted that the second defendant had “acted irrationally and answered the wrong question” in his decision at [19]:

4. [56]

   It is important to make the following two observations about Mr Griffiths’ report:

   1. (1)

      He seems to have reached his conclusions on the slightest of evidence. As he states:

   2. (2)

      Mr Griffiths concluded:

5. [57]

   The conclusion reached by Mr Griffiths, as quoted in the previous paragraph, is not a conclusion that the first defendant was not injured at all. It is only a conclusion that she did not receive the injuries that are described in the claim form and in answer to requests for particulars. While there would obviously be overlap, the alleged injuries are not necessarily the physical injuries that form part of the causation train found by the third defendant. Notably the third defendant refers only to the physical injuries as “pain”.

6. [58]

   I do not think the second defendant was irrational and I do not think he answered the wrong question.

7. [59]

   Accordingly, the attack on the second review also fails.

The decision on 6 December 2023

1. [60]

   On 28 November 2023, the plaintiff wrote to the second defendant asking him to reconsider his decision. He refused on 6 December 2023.

2. [61]

   The refusal was referred to as the Bhardwaj decision (derived from Minister for Immigration and Multicultural Affairs v Bhardwaj 209 CLR 597; [2002] HCA 11.

3. [62]

   It may be that a Bhardwaj decision is not amenable to judicial review. Whatever the case, on the findings I have made about the extension of time and the reviews of the two earlier decisions, there would be no basis for any judicial review of the decision on 6 December 2023.

Orders

1. [63]

   The following orders flow from the above reasons:

   1. (1)

      The amended summons is dismissed.

   2. (2)

      The plaintiff is to pay the first defendant’s costs of the proceedings.

   3. (3)

      No other order is made as to costs.

   4. (4)

      I will hear the parties if any amendments to the costs orders are requested within 14 days.