Insurance Australia Ltd trading as NRMA Insurance v Cahill

By amended summons filed on 10 April 2025, the plaintiff, Insurance Australia Limited trading as NRMA Insurance (the insurer), seeks judicial review under s 69 of the Supreme Court Act 1970 (NSW) and this Court’s inherent jurisdiction of the decision of the second defendant (the review panel) made on 19 December 2024. The aspect of the decision which is alleged to warrant its setting aside is the determination that the injury to the lumbar spine of the first defendant, James Cahill (the claimant) is a non-threshold injury.

At the conclusion of the hearing on 24 July 2025, I made the orders set out at the end of these reasons, including an order setting aside the decision of the review panel. What follows are my reasons for making these orders.

The insurer challenges the determination on the following grounds:

The claimant, the review panel and the third defendant, the President of the Personal Injury Commission of New South Wales (PIC) have each filed submitting appearances. There is, accordingly, no active defendant to the proceedings.

As the proceedings were commenced by summons filed on 18 March 2025, the insurer was within the time specified in Uniform Civil Procedure Rules 2005 (NSW), r 59.10(1), being 3 months from the date of the decision.

Before setting out the background to the current proceedings, I propose to outline the statutory scheme established by the Motor Accident Injuries Act 2017 (NSW) (the Act), which applies to motor accidents which occurred after 1 December 2017: s 1.8. Unless otherwise indicated, all references to legislation in these reasons are to the Act.

The claimant has no entitlement to damages if the only injuries he sustained in the accident were “threshold injuries”: s 4.4.

Section 1.6 relevantly defines “threshold injury” as follows:

The only damages that may be awarded are damages for economic loss as permitted by Division 4.2 and damages for non-economic loss as permitted by Division 4.3: s 4.3. Damages for non-economic loss are only payable if the degree of whole person impairment (WPI) as a result of injuries caused by the accident is greater than 10%: s 4.11.

If there is a dispute between the claimant and the insurer, damages may not be awarded for non-economic loss until a medical assessor appointed by PIC has carried out an assessment of permanent impairment under Division 7.5: s 4.12. Under Sch 2, cl 2(a), the degree of permanent impairment of the injured person that has resulted from the injury caused by the motor accident (including whether the degree of permanent impairment exceeds 10%) is declared to be a “medical assessment matter” for the purposes of Part 7 (entitled “Dispute Resolution”). In Part 7, a medical dispute means, relevantly, a dispute between a claimant and an insurer about a medical assessment matter: s 7.17(a).

Either party to the dispute may refer a medical dispute about a claim to the President for assessment: s 7.20(1)(a). The President is to arrange for the dispute to be dealt with by one or more assessors: s 7.20(2). The President is empowered to appoint medical assessors for the purposes of the Act: s 33(1)(b) of the Personal Injury Commission Act 2020 (NSW) (the PIC Act).

Section 7.21 provides in part:

Section 7.23(1) requires a medical assessor to whom a medical dispute is referred to give a certificate which sets 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: s 7.23(7).

A medical assessment may only be reviewed by a review panel if the President is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application: s 7.26(5). The President may delegate this function: s 18(1) of the PIC Act.

Pursuant to s 7.26(5A), the President may constitute a review panel. The review of a medical assessment is not limited to the particular aspect that is alleged to be incorrect and is to be by way of a new assessment of all the matters with which the medical assessment is concerned: s 7.26(6). The review panel may confirm the certificate of the medical assessor or revoke it and issue a new certificate: s 7.26(7).

Clause 4(1) of the Motor Accident Injuries Regulation 2017 (NSW) (the Regulation) provides:

The claimant relied on the words in parentheses to establish that the injury to his lumbar spine was not a threshold injury.

The Motor Accident Guidelines (the Guidelines) in force at the time of the review panel’s assessment were version 9.2 which commenced on 10 November 2023.

The Guidelines relevantly provide:

The claimant was involved in a motor accident on 9 July 2020 (the accident). He claims that, as a result of the accident, he suffered injuries to his cervical spine, lumbar spine, right leg, right arm and right shoulder.

On 23 December 2022, the claimant lodged an application for assessment of permanent impairment with PIC. On 31 August 2023, the insurer lodged an application for assessment of a threshold injury dispute with PIC.

Thus, there were two medical disputes between the claimant and the insurer:

These disputes were referred for medical assessment to the President under s 7.20, who referred them to Medical Assessor Assem (the medical assessor). On 22 April 2024, the medical assessor issued a certificate certifying that none of the injuries was caused by the accident and therefore he did not need to address the two medical disputes which had been referred to him (the Assem Certificate). He considered that the claimant’s symptoms “align[ed] more closely with a pre-existing condition of elapsing-remitting multiple sclerosis”.

The claimant sought review of the medical assessor’s assessment pursuant to s 7.26(1). The President referred the review to the review panel.

The claimant submitted to the review panel that the accident caused an injury to his lumbar spine which resulted in radiculopathy. The insurer submitted to the review panel that the accident was minor and incapable of causing any injury, much less a non-threshold injury.

Medical Assessor Rosenthal, who was a member of the review panel, examined the claimant on 30 October 2024. On examination, he detected only one of the clinical signs of radiculopathy specified in cl 5.8 of the Guidelines (paragraph 40 of the review panel’s reasons). This was insufficient to fulfil the requirements of “two or more” clinical signs of radiculopathy to render the injury a non-threshold injury.

On 19 December 2024, the review panel issued a certificate revoking the Assem Certificate and substituting its determination that:

The reasons of the review panel for their determination at (2) were as follows:

The effect of the review panel’s determination is that the claimant is entitled to claim damages (because he has suffered a non-threshold injury) but is not entitled to damages for non-economic loss (because his WPI is not greater than 10%).

As referred to above, the insurer challenges the determination that the lumbar spine injury was a non-threshold injury.

The effect of s 7.23(7) is that the review panel’s reasons form part of the record since they are part of the certificate and the certificate is the record: Pham v NRMA Insurance Ltd [2014] NSWCA 22; (2014) 66 MVR 152 at [27] (Leeming JA, Tobias AJA agreeing). In these circumstances, the insurer did not need to rely on the extended definition of record in s 69(4) of the Supreme Court Act (which has not been held to apply in present circumstances as the review panel has not been held to be a “tribunal”) in its challenge to the review panel’s decision on the basis of inadequacy of reasons.

The review panel reasons were required to meet the standard outlined in Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 (Wingfoot) at [55] (French CJ, Crennan, Bell, Gageler and Keane JJ) (in that case the medical panel was constituted under the Accident Compensation Act 1983 (Vic)) as follows:

In the present case, the claimant submitted to the review panel, in reliance on s 1.6(4) and the words in parenthesis, “(other than radiculopathy)” in cl 4(1) of the Regulations, that the injury to his lumbar spine was a non-threshold injury because of the presence of radiculopathy. This submission required the claimant to establish at least two clinical signs of radiculopathy within cl 5.8 of the Guidelines. The insurer submitted that it was no more than a soft tissue injury.

As Ms Allan, who appeared for the insurer, confirmed:

I infer, (although the review panel did not indicate this to be the case or explain its reasoning), that the review panel relied on the negative aspect of the definition of soft tissue injury in s 1.6(2): “but not an injury to …. cartilage”. But there was nothing in the review panel’s reasons to indicate where this finding had come from or the basis on which it was made. Nor did the review panel explain why it felt at liberty to go beyond the parameters of the medical dispute between the parties, which had been the subject of voluminous evidence and detailed submissions.

The review panel’s reasons fell short of the standard set out in Wingfoot. It failed to set out the actual path of reasoning which led it to find that the claimant had suffered a non-threshold injury to his lumbar spine in circumstances where the only basis on which the claimant relied on was the presence of radiculopathy of which the review panel had found only one clinical sign (which was not sufficient, having regard to cl 5.8 of the Guidelines, which required at least two).

For these reasons, ground 1 has been made out.

The review panel was required to accord procedural fairness to the claimant and the insurer in determining the medical dispute which had been referred to it for review. In Wingfoot at [47], the content of procedural fairness in this context was expressed as follows:

Procedural fairness requires that where the review panel proposes to determine a crucial matter on a basis on which neither party has adduced evidence or made submissions, the review panel is obliged, as a matter of “practical justice” to draw that matter to the parties’ attention in order to give them the opportunity to provide material and make submissions about it: McKee v Allianz Australia Insurance Ltd (2008) 71 NSWLR 609; [2008] NSWCA 163 at [8] (Allsop P); Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39 at [32]-[37] and [41] (Leeming JA, Beazley P and Basten JA agreeing); applied in AAI Limited trading as GIO v Amos [2024] NSWCA 65 at [55] (myself, Kirk JA and Basten AJA agreeing).

In the present case, the review panel decided a key matter – that the injury to the claimant’s lumbar spine was a non-threshold injury – on a basis which had not been put to it and, accordingly, which the parties could not, without prior notice, have contemplated would be the basis for the decision. In these circumstances, the determination that the injury to the claimant’s lumbar spine is a non-threshold injury involves a denial of procedural fairness. This is both an error of law on the face of the record and a jurisdictional error: Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531; [2010] HCA 1 at [60]; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57 at [41] (Gleeson CJ), [142] (Kirby J) and [170] (Hayne J).

For these reasons, ground 2 has also been made out.

As all defendants have filed submitting appearances, Ms Allan, accepted that it is appropriate that there be no order as to costs.

The insurer seeks that the decision of the review panel be set aside.

The insurer also seeks an order that the matter be remitted to a differently constituted review panel. This course would avoid any suggestion of apprehension of bias which might arise if the matter were referred back to the review panel: see, for a similar case, Stanizzo v AAI Limited trading as GIO [2021] NSWSC 1077; (2021) 97 MVR 229 at [17]. I am persuaded that it is the appropriate course.

For the reasons given above, I made the following orders: