Dominice v Allianz Insurance

In these proceedings the plaintiff seeks judicial review of a decision made by the proper officer of the State Insurance Regulatory Authority ("the Authority") under s 63 of the Motor Accidents Compensation Act 1999 (NSW) (“the Act”). That is, a decision to refer a medical assessment of the plaintiff to a panel of assessors for review.

On 25 July 2013 the plaintiff was the driver of a motor vehicle which sustained a rear end collision. She claims to have suffered injury to her neck, to her thoracic and lumbar spine and to both shoulders. She also claims that pain and restriction of movement, consequent upon spinal injury, has affected her arms, hips and legs.

In early July 2014 the plaintiff was medically examined in connection with her claim for compensation by Dr Kenna. He was engaged by the first defendant which is the compulsory third party insurer of the motor vehicle which was at fault in the accident. Dr Kenna is a consultant in musculoskeletal pain management. He reported on 16 July 2014 that the plaintiff's main complaints at that time were:

On clinical examination Dr Kenna found diminished range of movement in the cervical spine but no diminishment of reflexes or of normal sensation or of muscle power. He found no reduction in movement of either shoulder and no impairment of those joints. No neurological deficit was evident in either arm. Both arms had full range of movement. The thoracic spine, lumbar spine and legs were normal in range of movement, reflexes and muscle power.

Dr Kenna gave the following summations:

A medical dispute within the meaning of s 57 of the Act arose in either 2014 or 2015 because the first defendant did not accept the plaintiff's claim that she had suffered more than 10% whole person impairment as a result of the accident. Section 131 of the Act fixes 10% as the threshold for recovery of damages for non-economic loss.

This medical dispute constituted a "medical assessment matter" within the definition in s 58(1)(d). The dispute was referred to the Authority under s 60 of the Act and the Authority arranged in turn for it to be referred to a medical assessor.

Dr Ashwell of Goonellabah near Lismore was the assessor appointed. He examined the plaintiff on 13 May 2015 and issued a certificate on 18 May 2015. He certified 5% whole person impairment attributable to the cervical spine, 7% to the right upper extremity (shoulder, elbow, wrist and hand), 4% to the left upper extremity and 2% to the right knee and hip. That is, 18% whole person impairment in total. Dr Ashwell’s certificate sets out the history given by the plaintiff, her description of symptoms and the doctor's own findings on examination. The assessor had before him the plaintiff's original claim for compensation dated 26 September 2013. At pars 25 and 26 of that document the plaintiff answered proforma questions as follows:

The certificate issued 18 May 2015 records a number of findings which the assessor expressly stated were "inconsistent" and which he was unable to reconcile with the plaintiff's history (including the results of the examination by Dr Kenna 10 months earlier) and which he could not accommodate to principles of anatomy and medical science. Three examples of inconsistent findings are as follows:

The doctor also recorded that he did not have full cooperation of the plaintiff in attempting to ascertain the range of movement of her limbs and in other respects. At p 10 he recorded this:

Further on the same page the doctor noted:

The assessor did not bring to the attention of the plaintiff during the examination the findings which he found inconsistent, nor did he obtain from her any purported explanation. Permanent Impairment Guidelines 2007 (NSW) published by the Authority have the force of law by the operation of s 44 of the Act and were applicable to Dr Ashwell’s assessment. Clauses 1.42 and 1.43 of the Guidelines are in the following terms:

The plaintiff submits that the "fundamental purpose" of the requirement in cl 1.43 (that inconsistencies be brought to the attention of the claimant who is being assessed) is "to accord procedural fairness to a claimant in a case where the medical evidence appears not to verify that an impairment of a certain magnitude exists such that the assessor should modify the impairment estimate pursuant to clause 1.42. This was not the case in the present matter and accordingly cl 1.43 did not apply."

I reject that submission. I consider that cl 1.43 has at least the purposes of affording procedural fairness to both parties, the claimant and the insurer, and of achieving accuracy in assessment. I make this construction directly from the language used in the paragraph. It contains no restriction of purpose to the protection of the complainant only. The language is wide enough to permit that it might be invoked in the interests of either party.

It is true that cl 1.43 has been invoked on behalf of the complainant only in all of the cases which were brought to my attention during the course of argument. For example Frost v Kourouche [2014] NSWCA 39 where the matter was considered at [31] to [33] and Jaksic v Insurance Australia Ltd, trading as NRMA [2013] NSWSC 1141 where cl 1.43 was considered at [81]. It is in the nature of the subject matter to which cl 1.43 is addressed that it would usually be the claimant who would benefit from its application and have cause for complaint if it was disregarded. Inconsistent medical findings would usually result in a reduced assessment of impairment and the claimant would be aggrieved if he or she had not been given the opportunity to address and perhaps resolve the perceived inconsistency. But there may also be cases, and I consider this to be one of them, where the assessor's certificate may possibly overstate the measure of impairment if inconsistent findings have not been resolved by the assessor's own analysis of them, yet he or she proceeds to certify a significant level of impairment without the complainant having been asked to explain. In such a case there could be, on that account, "reasonable cause to suspect that the medical assessment was incorrect in a material respect" – in the words of s 63(3).

Given that the language of cll 1.42 and 1.43 is wide enough to allow that the latter may operate for the benefit of the insurer, in the absence of clear words excluding its application to that end I would not construe it as being restricted to the benefit of the complainant, as the plaintiff here contends.

In this case the plaintiff claimed, as at 13 May 2015 when she was examined by Dr Ashwell, restrictions on movement which the assessor found to be inconsistent with other aspects of her presentation, contradictory of clinical signs otherwise observed and inexplicable by reference to principles of anatomy and results of an earlier examination. An explanation offered by the plaintiff might have resolved and eliminated the contradiction or it might have identified some cause of her claimed restrictions on movement independent of the cervical injury sustained in the motor accident. She might have offered no explanation, which would leave the inconsistency standing and operative and requiring to be heeded, for the purpose of bringing it to account in the ultimate evaluation of whole person impairment attributable to the collision.

The assessor's certificate contains no explanation of how, if at all, the inconsistencies he identified were resolved to his satisfaction. The certificate does not state how, in spite of the inconsistencies identified, he felt able to attribute the measures of whole person impairment which he found with respect to the shoulders, or how he found those to be related to the motor vehicle accident, assuming the restrictions of shoulder movement were bona fide. The purported shoulder restrictions had emerged more than 12 months after the accident; that is, post Dr Kenna's examination in July 2014.

On the doctor's findings they had no anatomical connection to the cervical spinal injury which was the principal trauma noted on the plaintiff’s claim form dated two months after the accident. The restrictions on movement are quite distinct from the referred pain which was mentioned in that claim form and which was noted by Dr Kenna.

Dr Ashwell's certificate contains these passages towards its conclusion:

These conclusions are notable for the phrases which they contain identifying lack of scientific or rational connection between apparent symptoms in the shoulders on the one hand and the motor vehicle accident on the other hand. For example, the expression "I am at a loss to explain"; the statement that restriction of shoulder movement "appeared to be associated with the neck symptoms" (emphasis added) and the statement that this apparent connection "was difficult to accurately determine given her display of symptoms".

These explicit uncertainties culminated in the statement “I therefore believe…”, incorporated in quotation (1) at [20]. Why the doctor should "therefore believe" that the right and left shoulder restrictions were part of her impairment attributable to the motor vehicle accident, in view of the doubts and disconnections in the material he had just recited, is quite unexplained and unsatisfactory.

In quotation (2) set out at [20] Dr Ashwell refers to the restriction of shoulder movement as being "associated with her neck pain". In view of the rest of the content of his report, particularly the passages I have quoted at [9], [10] and [11], the nature of this association is not elaborated. Indeed, the rest of his report suggests that there is simply no association. The doctor fails to substantiate his conclusion of a connection.

Also in quotation (2) at [20] Dr Ashwell’s finding of "no evidence of ongoing true radiculopathy” is significant. That is, he finds no evidence of referred pain sensed in the arms or shoulders as a result of interference with or impingement upon the nerve roots where they exit the spaces between vertebra in the cervical spine.

In quotation (3) at [20] Dr Ashwell’s statement that the restriction of movement of both shoulders was "assessed on range of movement" provides no explanation of what the assessor did about the plaintiff’s lack of cooperation in exhibiting potential ranges of movement or how he took into account her claims of restriction on movement, for example, in the right arm, given that they were not borne out when she was left to sit in a chair as opposed to having a test or measurement undertaken.

On 25 June 2015 the first defendant applied in writing to the proper officer of the Authority under s 63 of the Act for a referral of Dr Ashwell's assessment to a panel of assessors for review. Section 63(3) provides as follows:

The first defendant's application to the proper officer under this section cited, inter alia, the inconsistent findings of the assessor to which I have referred and the failure of the assessor to bring the inconsistencies to the plaintiff's attention contrary to cl 1.43 of the Guidelines.

The plaintiff replied to this application in a document dated 23 July 2015. The proper officer gave a reasoned decision on 17 August 2015 which concluded with acceptance of the application and a determination to refer the matter to a medical review panel.

Paragraphs 8 to 12 of the proper officer's reasons contain the operative basis of her decision, as follows:

Paragraph 11 contains two reasons for the proper officer's satisfaction that there was "reasonable cause to suspect that the medical assessment was incorrect in a material respect". First, the assessor's "comment that he is unable to explain why the complainant's range of movement may have changed since the report of Dr Kenna" and, secondly, "his failure to bring this inconsistency to the claimant's attention.”

The first of the plaintiff's grounds for now seeking a declaration that the decision of the proper officer is affected by error of law and an order that it be set aside is that the proper officer "fell into jurisdictional error and committed an error of law on the face of the record” by not considering whether the assessment "would have been, or might have been, different" if Dr Ashwell had brought the inconsistent clinical findings to the plaintiff's attention under cl 1.43 of the Guidelines.

In elaboration of this ground it is argued that the proper officer misdirected herself as to the law because she incorrectly understood the applicability of cl 1.43. That is the argument which I have referred to and rejected at [13] – [17]. I find no error of law in the proper officer's application of cl 1.43. It was open to the proper officer reasonably to suspect material error in the certificate on the ground of non-compliance with cl 1.43 without express or detached consideration of whether the assessor might have reached a different result if the clause had been adhered to. In the nature of the case, not having confronted the plaintiff would provide a reasonable cause to suspect that the result would be incorrect. The statutory threshold is a low one.

The fourth ground raised in the summons is related to the first. It is, again, the contention that cl 1.43 was inapplicable to the assessment because it is in place only for the benefit of the plaintiff as claimant. Upon this contention, it is asserted that the proper officer "committed a jurisdictional error by taking into account the failure to apply clause 1.43". Clause 1.43 is said to have been an irrelevant consideration. I find, on the construction of cl 1.43 which I consider to be correct, that it was not irrelevant for the proper officer to have taken this into account. The legal requirement under cl 1.43 for the assessor to have put the inconsistencies to the plaintiff during the examination is not to be read down as something that may only operate for the benefit of and be invoked by a claimant in the position of the plaintiff. The assessor’s failure to follow this procedure was something which was well open to the proper officer to treat as reasonable cause for suspecting that the assessment may be materially incorrect.

The second ground in the summons is that the proper officer’s satisfaction as to “reasonable cause to suspect that the medical assessment was incorrect in a material respect” is said to be a jurisdictional fact. It is contended that the proper officer did not have power to refer the matter to the review panel because, in fact, there was no such reasonable cause.

I do not consider that this is an available ground of review. Effectively, the plaintiff asks this Court itself to apply the test in s 63(3), to determine that issue on its merits and, if it disagrees with the proper officer's conclusion, then to conclude that the proper officer was not empowered to make the referral. If such a ground were available it would mean that this Court would, on an application such as the present, always be a court of appeal with respect to the merits of a proper officer's decision and would in each case be able and required to determine for itself whether the test in s 63(3) was satisfied and to overturn the referral to a panel if it disagreed with the proper officer.

Under s 62(1A) any “deterioration of the injury or additional relevant information” must be “capable of having a material effect on the outcome of the previous assessment” if a matter is to be referred for a further assessment. It is well established that the question whether the deterioration of the injury or the additional information has the relevant capacity is one to be answered by the proper officer. His or her state of satisfaction is the precondition for further referral, not the actual capacity of the deterioration or additional information to have a material effect on the assessment, as an objective fact. See QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442 at [17], [27] – [36]. Consequently, a proper officer’s decision under s 62(1A) as to his or her satisfaction or otherwise of the threshold matter is reviewable only for legal error, not on its merits. This flows from construction of the statute.

The position is even clearer with respect to s 63(3) where the precondition for referral to a review panel is prefaced by the words “only if the proper officer is satisfied … ”. That statutory language does not indicate an objective fact which must be present in order for the proper officer to make a referral, such that this Court, upon review of the administrative decision, will be required to make its own finding as to whether there is reasonable cause to suspect error in the assessment and to set aside the proper officer’s decision for referral if it should not find such cause. The distinction between an objective jurisdictional fact and a precondition which is within the province of the administrative decision maker to find was clearly drawn by Spigelman CJ in Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8 at 64 and by four of the High Court justices in Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144; [2011] HCA 32 at [107] – [109].

As the precondition of referral pursuant to s 63(3) is, expressly, a state of satisfaction of the proper officer, the decision to refer to the review panel in this case could only be disturbed upon the present application if the proper officer could be shown to have made a legal error in forming her view: Buck v Bavone (1976) 135 CLR 110; [1976] HCA 24 at 118 – 119; Elliott v Insurance Australia t/as NRMA Insurance [2014] NSWSC 1848. No legal error has been identified.

In any event, if it were for this Court to make a determination on the merits of the question, I would have no hesitation in finding that there is reasonable cause to suspect the assessment was materially incorrect. I have pointed out that there is a complete lack of science and logic in the ultimate conclusion that 7% and 4% respectively of impairment to the shoulders is to be attributed to the accident, despite inconsistency between symptoms complained of and the observable condition of the patient, and despite inconsistency between the reported emergence of the shoulder restriction and the earlier findings of Dr Kenna.

The third ground in the summons is the contention that the proper officer's satisfaction of reasonable cause to suspect material error in the assessment was "so unreasonable that no reasonable decision maker could have reached the same decision". On the authority of the High Court in Minister for Immigration v Li (2013) 249 CLR 332; [2013] HCA 18 this ground is to be approached on the following basis, taken from [76] in the judgment of Hayne, Kiefel and Bell JJ:

It could not be said that the decision of the proper officer in this case lacked an evident and intelligible justification. The proper officer’s reasons make clear reference to the absence of reconciliation of the inconsistencies in findings to the putative causation by the accident in July 2013. The proper officer’s decision is also reasoned on the basis of the assessor’s failure to seek the plaintiff's explanation, if she was able to proffer one, for the inconsistencies. The proper officer's reasons expose on the face of them, how she came to her decision to refer the assessment to a review panel. This is an intelligible and supportable determination.

For these reasons the grounds raised by the plaintiff fail. The orders of the Court are: