QBE Insurance (Australia) Ltd v Jovanovic

1. [1]

   QBE Insurance (Australia) Ltd (“QBE”), in a Summons filed on 14 August 2014, claims relief by way of declarations and orders with respect to the conduct of the Motor Accidents Authority of NSW, and various officers of it.

2. [2]

   The first defendant in the proceedings is Ms Vera Jovanovic, who alleges that she suffered multiple injuries as a result of a motor vehicle accident on 23 January 2010. Ms Jovanovic made a claim with respect to those injuries pursuant to the provisions of the Motor Accidents Compensation Act 1999 (“the MACA”).

3. [3]

   In these proceedings, the second defendant is the Motor Accidents Authority of NSW (“the MAA”).

4. [4]

   The third defendant is Ms Probert, the Proper Officer of the MAA. The fourth defendant, Mr Terrence Broomfield, is a Claims Assessor of the MAA. The fifth defendant, Dr James Bodel, is a Medical Assessor of the MAA.

5. [5]

   Each of the defendants has filed submitting appearances in which they submit to any order of the Court except an order for costs. This is unsurprising in respect of the second to fifth defendants inclusive, because of their statutory function.

6. [6]

   However, the fact that the first defendant, who is the claimant for damages for personal injuries has also filed a submitting appearance, has meant that there has been no contradictor in these proceedings.

7. [7]

   Shortly, prior to the day fixed for hearing, the Court was informed that each of the defendants, including the first defendant, consented to the orders in the nature of those claimed in the Summons. Notwithstanding this, it is necessary for the Court to consider whether it has jurisdiction to make the orders sought, and to indicate what the law requires of the administrative decision-maker: Inghams Enterprises Pty Limited v Vojnikovich [2014] NSWSC 1519.

Background

1. [8]

   As indicated earlier, Ms Jovanovic claimed that she was injured in a motor vehicle accident that occurred on 23 January 2010. She claimed injuries, including injury to her lower back, as a result of the accident.

2. [9]

   QBE disputed that Ms Jovanovic’s lower back symptoms were caused by the motor vehicle accident. There was no doubt that Ms Jovanovic had chronic degenerative disease in her lumbar spine prior to the accident. QBE argued that her back symptoms were solely related to the degenerative condition suffered by her before the accident.

3. [10]

   With respect to her pre-existing condition, Ms Jovanovic had consulted Dr Saeed Kohan, a neurosurgeon. Following the motor vehicle accident, she again consulted Dr Kohan on 1 February 2010. He ordered an MRI scan, which was undertaken on 3 February 2010.

4. [11]

   In a report of 22 February 2010, Dr Kohan reported this of the MRI scan:

5. [12]

   Throughout 2010, Dr Kohan treated Ms Jovanovic with an epidural injection into her lower back and recommended that she undertake physiotherapy. In December 2010 Dr Kohan recommended that the first defendant undergo surgery to her lower back, namely L4/5 fusion and discectomy.

6. [13]

   QBE had Ms Jovanovic assessed by Professor Michael Ryan, an orthopaedic surgeon. He expressed the opinion that surgery was not an appropriate treatment option for Ms Jovanovic. QBE declined to fund the surgery.

7. [14]

   In May 2011, QBE received a further request for funding with respect to a lumbar spinal fusion and discectomy. QBE again declined to fund the proposed treatment.

8. [15]

   On 25 August 2011, Ms Jovanovic applied to the Medical Assessment Service (“the MAS”) of the MAA for an assessment of the reasonableness of the treatment proposed by Dr Kohan about which she and QBE were in dispute (“the treatment dispute”). Ms Jovanovic also applied to the MAS for an assessment of whole person impairment. Such an assessment was necessary as a step towards the assessment of damages claimed. The parties could not agree whether Ms Jovanovic had reached the threshold of 10 per cent whole person impairment (“WPI”). I will refer to this dispute as “the impairment dispute”.

9. [16]

   On 7 February 2012, a certificate under Pt 3.4 of the MACA was issued by the Medical Assessor, Dr James Wong. The certificate was entitled as to:

10. [17]

    The certificate declared that:

11. [18]

    On 19 March 2012, an application by Ms Jovanovic for a review of the assessment of Dr Wong with respect to the proposed treatment was rejected by the Proper Officer of the MAA.

12. [19]

    The impairment dispute was referred to a Medical Assessor, Dr Michael Long. On 14 July 2012, a certificate was issued by Dr Long in which it was determined that the soft tissue injury in the cervical spine, the soft tissue injury of the lumbar spine and the referred pain in the left leg from the back injury, in combination did not give rise to a permanent impairment which was greater than 10 per cent whole person impairment. That certificate was accompanied by 13 pages of reasons. It resolved the impairment dispute.

13. [20]

    Dr Long’s certificate was not the subject of any application for review.

14. [21]

    On 30 July 2013, Ms Jovanovic underwent surgery at the hands of Dr Kohan. She underwent a discectomy and a fusion at L4/5. The surgery was not funded by QBE.

15. [22]

    In December 2013, Ms Jovanovic lodged an MAS application for further assessment of both the treatment and impairment disputes. In that respect, she relied upon a report of Dr Kohan dated 18 November 2013.

16. [23]

    The report of Dr Kohan of 18 November 2013 was succinct. It was addressed to Ms Jovanovic’s solicitors. It said:

17. [24]

    That report was accompanied by some notes from the South Eastern Sydney Local Health District with respect to her admission to St George Hospital. Those notes do not provide any relevant additional information. They confirm that the operation took place.

18. [25]

    In February 2014, the third defendant, Ms Probert, who was the Proper Officer of the MAA (the second defendant), dealt with Ms Jovanovic’s application for further assessment of both the treatment and the impairment disputes.

19. [26]

    On 27 March 2014, after having received further submissions, Ms Probert rejected the application for further assessment of both disputes.

20. [27]

    The decision of a Proper Officer with respect to an application for further assessment is governed by s 62 of the MACA. Where a party seeks a further assessment, the grounds upon which the Proper Officer may order the reassessment are limited to whether there has been a deterioration of the injury, or whether there is any additional relevant information about the injury. The section provides that:

21. [28]

    Thus, where a party seeks a re-assessment, the Proper Officer needs to be satisfied that “additional material” has been provided, and also that such “additional material” is capable of having a material effect on the outcome of the previous assessment.

22. [29]

    In her decision of 27 March 2014, the third defendant determined the following:

23. [30]

    Based upon this reasoning, the third defendant determined that neither of the disputes, that is, the treatment dispute or the impairment dispute, would be referred for further assessment. On its face, this rejection of the reassessment application was rational and appropriately based on the material provided.

24. [31]

    Regrettably, in the reasons of the third defendant, there were two obvious errors. The first, seemingly a typographical one, was where the third defendant incorrectly recorded that the certificate of Dr Long, who undertook the impairment assessment, was dated 14 July 2014, rather than the correct date of 14 July 2012.

25. [32]

    The second obvious error was that the third defendant recorded that the post‑operative report of Dr Kohan dated 18 November 2013, was before both of the assessors, Dr Long and Dr Wong in 2012. Self-evidently it could not have been. It was a post-operative report. The assessments of the treatment dispute and the impairment dispute were both carried out prior to the surgery undertaken by Dr Kohan. The certificates setting out the determinations of these two assessors were also issued before the surgery was undertaken, and the report of Dr Kohan was written.

26. [33]

    On 6 May 2014, QBE drew the attention of the third defendant to these two errors and properly invited her to reconsider her decision.

27. [34]

    On 14 May 2014, the third defendant wrote to the parties acknowledging her error. She said:

28. [35]

    On 17 June 2014, the third defendant determined the application for further assessment with respect to the impairment dispute. The third defendant decided that the impairment dispute would be referred for further assessment.

29. [36]

    On 18 June 2014, the third defendant determined the application for further assessment of the treatment dispute. She rejected Ms Jovanovic’s application for further assessment of that dispute.

30. [37]

    It is necessary to note the bases upon which the Proper Officer acted with respect to these two more recent decisions.

31. [38]

    With respect to the decision on the impairment dispute, on 17 June 2014, the third defendant said this:

32. [39]

    In dismissing the application for reassessment of the treatment dispute, the Proper Officer on the next day, 18 June 2014, said this:

33. [40]

    In the meantime, an application had been made to the Claims Assessment and Resolution Service (“CARS”) for assessment of Ms Jovanovic’s damages. The matter was allocated to a Claims Assessor, Mr Broomfield who is the fourth defendant. He is not a medically qualified person.

34. [41]

    It is convenient to record, here, that in addition to the CARS application, the impairment dispute had, on 17 June 2014, been referred by the Proper Officer of the MAA for further assessment. The treatment dispute had not been referred for further assessment.

35. [42]

    The MAS made arrangements for the impairment dispute to be further assessed by Dr Bodel on 22 August 2014. Dr Bodel is the fifth defendant in the proceedings. An appointment was made for Dr Bodel to carry out that assessment on 22 August 2014.

36. [43]

    Whilst this was happening, the CARS application was listed for a preliminary conference, by telephone, on 1 July 2014. On 2 July 2014, the fourth defendant recorded in a report of that preliminary conference, the following:

37. [44]

    The fourth defendant then called for further submissions and adjourned the preliminary conference to 9 July 2014.

38. [45]

    Further submissions were made by QBE opposing such a course. The report of the next preliminary conference by the fourth defendant, dated 9 July 2014, included the following:

39. [46]

    On 14 July 2014, the fourth defendant wrote to the third defendant, saying:

40. [47]

    On 31 July 2014, the third defendant wrote to the parties with respect to that request. That letter said:

41. [48]

    The second defendant, MAA, has agreed to defer allocating the dispute to a medical assessor pending this Court’s determination of these proceedings. Accordingly, the date fixed for assessment with the fifth defendant, Dr Bodel, did not go ahead.

42. [49]

    Shortly afterwards, on 14 August 2014, QBE commenced these proceedings.

QBE’s Submissions

1. [50]

   QBE submits that the decision of 17 June 2014, of the third defendant as the Proper Officer, to refer the impairment dispute for further assessment is affected by legal and jurisdictional error.

2. [51]

   QBE further submits that the decision of the fourth defendant, Mr Broomfield, to refer the treatment dispute to an MAS assessor is similarly flawed because the essence of it was the acceptance of the flawed decision of the third defendant to refer the impairment dispute for further assessment.

Did the Third Defendant Fall into Error?

1. [52]

   The commencement point for consideration here is that the original two certificates which were issued in 2012 were either not challenged, or not successfully challenged. Certainly, proceedings had not been commenced in this Court to challenge the validity of either of the certificates.

2. [53]

   So that, as at December 2013, when Ms Jovanovic first lodged an application for further assessment of both the treatment and impairment disputes, there was in place the two 2012 certificates which were accepted by the parties as legally valid and correct.

3. [54]

   The treatment certificate held that the proposed spinal surgery was neither reasonable nor necessary in the circumstances and, further, that the surgery did not relate to the injuries caused by the motor accident. It necessarily follows that whilst ever that certificate remained valid, the surgery and any consequences of it, were not compensable under the MACA.

4. [55]

   The certificate with respect to impairment which found a soft tissue injury of the lumbar spine, concluded that whilst there was such an injury caused by the motor accident, it gave rise to a five per cent impairment, and together with other injuries (about which there is no present dispute), this meant that a whole person impairment of more than 10 per cent was not established. The only rational view which could be taken of the state of Ms Jovanovic’s health, in light of these two valid certificates, was that she suffered from a soft tissue injury in the lumbar spine area, which injury did not affect, or involve, any injury to the lumbar spine itself.

5. [56]

   The additional material which the third defendant had upon which to consider whether or not to refer the matter for reassessment was relevantly the report of Dr Kohan dated 18 November 2013.

6. [57]

   Before that material could be used as a basis for the referral of the matter for further medical assessment, the MACA required that the third defendant be satisfied that:

7. [58]

   Dr Kohan’s report of 18 November 2013, specifically eschews providing any information about whether the treatment related to any identifiable or specific injury caused in the motor vehicle accident on the one hand, or was the consequence of chronic degenerative changes on the other hand. Dr Kohan simply reported the following on this issue:

8. [59]

   Dr Kohan had earlier drawn attention, as I have noted above, to the fact that the best evidence was Ms Jovanovic’s history and radiological findings. However at the time that the two certificates for treatment and impairment were issued in 2012, Ms Jovanovic’s history and radiological findings were available to both assessors. That material could not constitute additional relevant material.

9. [60]

   Therefore, in her decision-making, the third defendant needed to consider in respect of the application for reassessment, whether the paragraph of Dr Kohan’s report which I have just extracted, represented additional relevant information which was capable of having a material effect on the outcome. It was the only material in that report which was capable of coming within that statutory concept.

10. [61]

    To come within the definition of “additional relevant information”, such information must be additional to that which is already known. The mere re‑statement of existing information, or the mere expression of similar information in different words, is not capable of constituting additional relevant information: Alavanja v NRMA Insurance Ltd [2010] NSWSC 1182 at [43] per Davies J; Garcia v Motor Accidents Authority of New South Wales [2009] NSWSC 1056 at [38] per Rothman J.

11. [62]

    The question which this Court needs to determine is not whether it would itself characterise the material as relevant additional information, but rather whether the Proper Officer’s opinion that it was relevant additional information was properly formed according to law.

12. [63]

    In QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442 at [17] Basten JA (with whom Ward JA and Young AJA agreed) said:

13. [64]

    Further, in the judgment at [36], Basten JA said:

14. [65]

    QBE submits that it was completely illogical for the third defendant to refer the impairment dispute for further assessment, while declining to refer the treatment for the same further assessment. It submits that logically and rationally, neither or both had to be referred for further assessment.

15. [66]

    QBE goes on to submit that the only rational decision which could have been made by the third defendant was to refer neither of the disputes because the additional material, being the report of Dr Kohan, was not capable of constituting additional information about the injury and, in particular, the causation of the injury.

16. [67]

    Importantly, QBE says, once the third defendant accepted that the contents of the report of Dr Kohan did not constitute additional information of the kind necessary, as a threshold matter, to permit her to refer the treatment dispute for reassessment, such a conclusion could only be reached upon a basis which included as a fundamental proposition that the injury to the lumbar spine was not causally related to the accident.

17. [68]

    In those circumstances, QBE submits that it was erroneous and irrational to refer the impairment dispute for further assessment.

Discernment

1. [69]

   In my view the arguments of QBE are correct.

2. [70]

   Ms Jovanovic claimed an injury to her lumbar spine, and a soft tissue injury to her back. Dr Wong’s certificate determined as an essential fact, that there was no spinal injury caused by or associated with the motor vehicle accident.

3. [71]

   Dr Kohan’s statement in his report of November 2013 did not contain any additional information which was capable of fulfilling the threshold requirements to justify a rational decision to refer the treatment dispute for reassessment. The decision of the third defendant to decline to require reassessment of the treatment dispute was therefore legally correct. The treatment dispute having been determined, and reassessment lawfully refused, it was not then open for the fourth defendant to refer the treatment dispute for reassessment.

4. [72]

   The issue for the third defendant was then, in light of the legally valid certificate which concluded that there was no causal relationship between the motor vehicle accident and the lumbar spine injury, whether she could lawfully refer the impairment dispute for reassessment, based on Dr Kohan’s report. But if, as is apparent from the report of Dr Kohan, the only additional material reported on by him related to the fact of the conduct of his surgery, which was correctly identified as not being causally related to the motor vehicle accident, then such information was not capable of constituting any additional information of the kind required to enable a referral of the impairment dispute to a further medical assessment.

5. [73]

   It was thus an error of law for the third defendant, based on the report of Dr Kohan, to refer the impairment dispute for reassessment.

6. [74]

   In addition, I am satisfied that the decision to refer the assessment of the impairment dispute for a further assessment by a medical assessor was irrational and illogical. That is because, as QBE correctly submits, it was completely illogical to refer only one of the disputes for reassessment. The circumstances were such that the third defendant, acting rationally, could only refer both or neither of the disputes for reassessment.

7. [75]

   Since there is no challenge to the original non-referral of the treatment dispute, and I am satisfied that that was a legally correct decision, then it follows that the decision of the Proper Officer, the third defendant, to refer the impairment dispute for a further medical assessment is wholly irrational.

8. [76]

   What then should be made of the decision of the fourth defendant, the Claims Assessor, Mr Broomfield, to refer the matter for further medical assessment?

9. [77]

   In my view, that decision ought also be set aside because at its heart, it was brought about by, and depended upon, the decision which I have found was wholly irrational, to refer the impairment dispute for a further assessment to a Medical Assessor. It follows that the decision of the fourth defendant also ought be set aside. He should proceed to conduct his assessment based upon the Certificate issued in 2012, and any other relevant information, subject to any lawful decision which may be made in the future about a referral for reassessment.

Orders

1. [78]

   I make the following orders:

   1. (1)

      Order in the nature of certiorari setting aside the decision of the third defendant made 17 June 2014 to refer the impairment dispute in this matter for further medical assessment under s 62(1)(a) Motor Accidents Compensation Act 1999.

   2. (2)

      Order in the nature of certiorari setting aside the consequential decision of the second and third defendants to refer the impairment dispute to the fifth defendant for further assessment.

   3. (3)

      Order in the nature of certiorari setting aside the decision of the fourth defendant to refer the treatment dispute in this matter to the fifth defendant for further medical assessment under s 62(1)(b) Motor Accidents Compensation Act 1999

   4. (4)

      Order that the application for further assessment of the impairment dispute be remitted to the second defendant to be dealt with according to law.

   5. (5)

      The plaintiff’s Summons otherwise dismissed.

   6. (6)

      Each party is to pay his, her or its own costs of these proceedings.