QBE Insurance (Australia) Limited v Davies

By summons filed on 30 November 2015 QBE Insurance (Australia) Ltd (QBE), the plaintiff, seeks an order setting aside the referral on 20 May 2015 by the proper officer of the State Insurance Regulatory Authority (the Authority), the third defendant, of the medical dispute concerning QBE and Phillip Davies (the claimant), the first defendant, (the Referral Decision). The plaintiff also seeks an order setting aside the decision made by the medical assessors review panel (the Panel), the second defendant, following the referral (the Panel’s Assessment). The second and third defendants have filed submitting appearances.

All references to legislation in these reasons are to the Motor Accidents Compensation Act 1999 (NSW) (the Act), unless otherwise stated.

The claimant was injured in a motor vehicle accident on 5 June 2012. QBE was the relevant compulsory third party insurer. His degree of permanent impairment was assessed by Dr Murray Hyde Page, a medical assessor appointed by the Authority under the Act. On 4 September 2014 Dr Hyde Page issued a certificate and found that the injury to the claimant’s cervical spine was causally related to the accident and assessed the degree of permanent impairment at 5%, being, relevantly, below 10%.

Dr Hyde Page relevantly found:

The claimant applied to the proper officer of the Authority under s 63 for referral to a review panel. In support of his application for referral, the claimant argued that the medical assessment was incorrect in the following material respects: the finding of causation regarding the claimant’s shoulder and leg injuries was incorrect; the reasoning was inadequate; the assessment of pre-existing impairment was incorrect; and that there had been a denial of procedural fairness.

The proper officer was satisfied that there was reasonable cause to suspect a material error in the assessment (being the statutory threshold set out in s 63(3) (set out below)) and, accordingly, made the Referral Decision on 20 May 2015. The proper officer’s reasons were relevantly as follows:

Following the referral both parties participated in the assessment by the Panel, by making submissions and, in the claimant’s case, by attending an examination.

I note that the claimant argued neither that QBE had acquiesced in the assessment by the Review Panel, elected not to challenge the Referral Decision before the Appeal Panel’s assessment took place, nor waived its right to challenge the Referral Decision, so as to deprive it of the right to challenge the Referral Decision in these proceedings: cf. the consideration of these matters in Rodger v De Gelder [2011] NSWCA 97; 80 NSWLR 594 at [72]-[96] per Beazley JA, McColl and Macfarlan JJA agreeing.

The Panel was constituted by three assessors: Drs Nigel Marsh, Wing Chan and Margaret Gibson. The Panel conducted its medical assessment of the claimant on 18 August 2015. It issued a certificate and reasons on 31 August 2015 in which it assessed the degree of permanent impairment as being 13%, or, relevantly, greater than 10%.

In the Panel’s reasons it listed the following injuries which it found to have been caused by the motor vehicle accident:

The Panel’s reasons record as follows. It considered the evidence that was before the original assessor. It also conducted an examination of the claimant on 18 August 2015, which was performed by Drs Marsh and Gibson.

On examination the claimant described a rear-end collision which had occurred after he had stopped to assist the driver of a vehicle ahead of him which had hit a kangaroo. As a result of the impact he was aware of pain in the shoulders and across his low back. He had pain radiating into the right buttock and thigh. On clinical examination there was restricted abduction and flexion of both shoulders associated with pain from the neck into the shoulder girdle region on each side. There was no indication of pain associated with the glenohumeral joints.

The assessment of permanent impairment is commonly referred to as whole person impairment (WPI) and is expressed in terms of a percentage. The Panel considered that there was 0% WPI to the cervical spine. It considered that the WPI to the lumbar spine was 5%. Of the right and left shoulders, the Panel said (in part) in its reasons:

The Panel summarised its findings on permanent impairment in the following passage:

A person, who is otherwise entitled to damages under the Act, is not entitled to damages for non-economic loss unless the degree of permanent impairment is greater than 10%: s 131. Where there is a disagreement about the degree of permanent impairment suffered, the Court may not award damages for non-economic loss unless the degree of permanent impairment has been assessed by an assessor, who conducts an assessment in accordance with s 133: s 132.

Section 133 relevantly provides:

Where there is a disagreement between the claimant and the insurer as to “whether the degree of permanent impairment of the injured person as a result of the injury caused by the motor vehicle accident is greater than 10%”, Part 3.4 of the Act applies: s 58(1)(d).

The persons qualified to conduct such assessments are medical practitioners who have the relevant specialty for the task and are appointed by the Authority under s 59 of the Act. Following such an assessment, the assessor issues a certificate, which is conclusive evidence as to the matters certified in any court proceedings: s 61(1) and (2). Where there is more than one certificate assessing permanent impairment (because different parts of the body or different impairments are assessed), these figures are added (by reference to a combined table) to arrive at a figure for total permanent impairment.

Section 61(9) provides that a certificate is to set 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.

A party may apply for a referral of a medical assessment to a review panel but only on the ground that the assessment was "incorrect in a material respect": s 63 of the Act, which relevantly provides:

The matters to be assessed by an assessor or a review panel include determinations of causation: for example, whether treatment relates to the injury “caused” by the motor accident (s58(1)(b)); and whether the degree of permanent impairment as a result of the injury “caused” by the motor accident is greater than 10%.

The Authority may issue guidelines with respect to the assessment of the degree of impairment of an injured person as a result of an injury caused by a motor vehicle accident: s 44(1)(c). The guidelines may adopt the provisions of other publications, with or without modifications: s 44(3). It is common ground that the applicable guidelines are the MAA Permanent Impairment Guidelines (1 October 2007) (the Guidelines). The Guidelines incorporate, in part, the "Guides to the Evaluation of Permanent Impairment" (4th Ed) published by the American Medical Association (the AMA 4 Guides).

The Guidelines relevantly provide:

This Court has supervisory jurisdiction over those acting under legislation, including delegated legislation, under s 69 of the Supreme Court Act with respect to errors of law on the face of the record. It also has inherent jurisdiction with respect to jurisdictional errors. QBE relies on both in the present case.

Because of the reliance placed by QBE on Nguyen v Motor Accident Authority of NSW [2011] NSWSC 351; 58 MVR 296 (Nguyen v MAA), it is necessary to address the decision in some detail. Ms Nguyen was injured in a motor vehicle accident. Dr Menogue, a medical assessor appointed by the Authority, certified that she had suffered a soft tissue injury to the cervical spine which gave rise to a permanent impairment which, in total, was not greater than 10%. She had also complained of symptoms in her shoulders in respect of which the assessor found:

Ms Nguyen applied to the proper officer of the authority for review of the original assessment. The proper officer was not satisfied that there was reasonable cause to suspect that the medical assessment was incorrect in a material respect. Ms Nguyen sought a review of the original assessment and the proper officer’s refusal to refer the matter to a panel. She submitted, relevantly, that the exclusion by the medical assessor, of the shoulder impairments from his calculations was based upon an error of law, namely, an assumption that he could not include those impairments as being the product of the motor accident unless such impairments resulted from primary or specific injury to the shoulders themselves. This Court (Hall J) set aside the certificate and remitted the matter to the Authority to be decided according to law.

Justice Hall summarised the assessor’s opinion as follows:

Justice Hall addressed the question whether the assessment was intended to be made by reference to common law principles of causation or whether these had been altered by the Act or the Guidelines. His Honour said, of present relevance:

In my view, in Nguyen v MAA, Hall J was saying no more than that, in the circumstances of that case, restrictions in the claimant’s shoulders could be taken into account in assessing WPI because the restrictions were a result of an injury to the neck sustained in the motor vehicle accident. Justice Hall emphasised the importance of the statutory wording, and the purpose of the assessment, namely to assess “the degree of permanent impairment of an injured person as a result of the injury caused by a motor accident”. As the final sentence of [102] (set out above) indicates, there is no basis for importing a gloss on the statutory wording; his Honour ought not be taken to have done so.

It follows that Nguyen v MAA does not establish a new principle at all. Its facts merely provide an illustration of the operation and effect of the statutory wording, which was found to incorporate common law principles of causation. It exemplified that an injury caused by a motor vehicle accident may result in an impairment to another part of the body that has not been injured in the accident, but which nonetheless is to be taken into account in an assessment under the Act.

Although the assessor in Nguyen v MAA found that the restriction in Ms Nguyen’s range of movement of the right shoulder was “directly related to her cervical injury”, no particular significance ought be given to the word “directly” in this context. The question was whether the impairment to Ms Nguyen’s shoulder was a result of the injury (to her neck) caused by the motor vehicle accident.

The Referral Decision was made on 20 May 2015. The Panel’s Assessment was made on 31 August 2015. The summons was filed within three months of the Panel’s Assessment, being the time allowed for the commencement of proceedings for judicial review: Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 59.10. An extension of time is required to challenge the Referral Decision. This Court may extend the time: UCPR, r 59.10(2). Mr Cranitch SC, who appeared with Mr Inglis on behalf of the claimant, did not oppose an extension of time.

In my view it is appropriate that time be extended. To require a party to challenge the decision of a proper officer to refer a matter to an appeal panel before the appeal panel’s assessment would lead to an undesirable fragmentation of the process. The Court of Appeal has said, in the context of a challenge to a referral for further assessment pursuant to s 62 of the Act, that it is appropriate for a party to a medical dispute to await the outcome of a review assessment before challenging the referral: Rodger v De Gelder [2011] NSWCA 97; 80 NSWLR 594 at [91]-[92] per Beazley JA, McColl and Macfarlan JJA agreeing.

QBE contended that the Referral Decision was “not lawful as it was based on or founded on (at [8] and [9] of the decision) a wrong or erroneous understanding of and/ or application of the principles in Nguyen v MAA (2011) 58 MVR 296 (Hall J), which was, in any event, distinguishable from the present application”.

Mr Robinson SC, who appeared with Ms Poljak on behalf of QBE, argued that Nguyen v MAA established a new principle, namely, that: a restriction in an uninjured part of the body could be taken into account in the assessment of WPI, but only if the restriction was “directly” related to the area of the body that was injured in the accident. He submitted that there was no material error in Dr Hyde Page’s assessment because no finding of a “direct” relationship between the restriction in the claimant’s shoulders and the injury to his neck had been made. In these circumstances, QBE argued, on the basis of the so-called “principle” in Nguyen v MAA, the restriction in the shoulders could not be taken into account.

Accordingly, Mr Robinson submitted that the proper officer could have had no reasonable cause to suspect that the medical assessment was incorrect in a material respect, and that, if she did have such suspicion, it was based on a misapprehension of the effect of Nguyen v MAA. He contended that the Referral Decision ought therefore be set aside.

The relevant statutory threshold in s 63(3) is that the proper officer must be 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”. It follows that what is required is that the proper officer have reasonable cause to suspect that the assessment is incorrect in a material respect; the proper officer is not required to be satisfied that the assessment is incorrect in a material respect.

The meaning of “suspect” was considered by the High Court in George v Rockett [1990] HCA 26; 170 CLR 104. The Court (Mason CJ, Brennan, Deane, Dawson, Toohey and Gaudron JJ) said, at [14]:

It can thus be seen that “reasonable cause to suspect”, particularly in the context of s 63, is a relatively undemanding threshold. I note that the proper officer is a member of staff of the Authority designated for that purpose (s 62(1B)), whose role does not include making assessments, but merely involves deciding whether to review a matter for further medical assessment under s 62 or for medical assessment by a review panel under s 63.

The nature of the power under s 63 was considered by the Court of Appeal in Meeuwissen v Boden [2010] NSWCA 253; 78 NSWLR 143. Of present relevance, Basten JA (Beazley JA and Sackville AJA agreeing) said at [23]:

Further guidance as to what is required to challenge the Referral Decision, on the grounds of judicial review, can be obtained from the decisions relating to a different, but associated decision by the proper officer: the decision under s 62 of the Act to refer a medical dispute for further medical assessment. Because the statutory wording of s 62 is different from s 63, it is necessary to set it out before considering the authorities.

Section 62 of the Act relevantly provides:

The Court of Appeal has held, with respect to the “relevant information” in s 62(1A), that the initial evaluation of the information is to be undertaken by the proper officer and that the proper officer’s decision to refer the matter for further medical assessment can only be challenged on the ground that it is “irrational, illogical and not based on findings or inferences of fact supported by logical grounds”: Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; 78 ALJR 992 at [38], found to be applicable in the context of a s 62 referral in QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442; 67 MVR 322 at [25]-[36] per Basten JA (Ward JA and Young AJA agreeing), approving Rodger v De Gelder at [99] per Beazley JA and [113]-[114] per Macfarlan JA (McColl JA agreeing with both).

In the present case, the question for the proper officer was whether there was reasonable cause to suspect that the assessment was incorrect in a material respect, in circumstances where the assessor did not include the impairment to the shoulders in the assessment, although he found that the restricted range of movement in the claimant’s shoulders was a consequence of aggravation to his chronic neck symptoms and that the claimant had injured his neck in the motor vehicle accident.

In my view, QBE has not demonstrated the relevant irrationality or illogicality. It has not shown that it was not open to the proper officer to be satisfied that there was reasonable cause to suspect that the assessment was incorrect in a material respect. The issue of causation is plainly a material respect. A principal matter arising from the assessment of permanent impairment was whether the restriction of movement in the claimant’s shoulders ought be taken into account in the assessment of WPI, notwithstanding that there was no injury to the shoulders occasioned by the impact. In light of Dr Hyde Page’s finding that the restricted range of shoulder movement was a consequence of aggravation to chronic neck symptoms (which were the result of the accident), it was open to the proper officer to have reasonable cause to suspect that the assessor’s rejection of the impairment arising from the restrictions of movement of the claimant’s shoulders was incorrect in a material respect.

Accordingly QBE’s challenge to the Referral Decision fails.

QBE challenged the Panel’s Assessment on the following grounds, which are distilled from the grounds set out in the summons:

QBE contended that these errors constituted either errors of law on the face of the record (and thus susceptible to remedy under s 69 of the Supreme Court Act) or jurisdictional errors. It submitted that, on either basis, the Panel’s Assessment ought be set aside.

For the reasons given above, I reject the submission that it was necessary for a claimant to establish that the impairment to the claimant’s shoulder was “directly related” to the neck injury before such impairment could be taken into account in the assessment of WPI. The Act does not impose such a requirement. Nor, for the reasons given above, does Nguyen v MAA, which does not, in my view, establish any separate “principle”. The Panel’s finding that the restriction in the range of movement of the shoulders resulted from referred pain from the neck was sufficient to entitle the Panel to take into account the restriction in its assessment of WPI.

The Panel’s obligation to give reasons required it to set out "the actual path of reasoning" by which he arrived at the assessment of 13% WPI: Wingfoot Australia Partners Pty Limited v Kocak [2013] HCA 43; 252 CLR 480 at [48]; Frost v Kourouche [2014] NSWCA 39; 86 NSWLR 214. The reasons are to be understood as recording the steps that were in fact taken at arriving at that result: Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816 at [130] per Hayne J. Some latitude is to be given to the reasons of an administrative decision-maker, which are not to be construed "minutely and finely with an eye keenly attuned to the perception of error" (Collector of Customs v Pozzolanic [1993] FCA 322; 43 FCR 280) and are to be given what has been referred to as a "beneficial construction": Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259 at 271-272.

The duty imposed on medical assessors to give reasons was considered in Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372 at [121]-[122] per Basten JA (McColl JA agreeing) relevantly in the following terms:

In the present case, there was no particular dispute about the facts and no apparent controversy about the medical science. The Panel found that the claimant had suffered a neck injury as a result of the motor vehicle accident and that the referred pain from his neck had resulted in a restriction of movement of both shoulders (the possibility that the shoulders had been injured in the accident having been excluded). The Panel found the relevant connection, which was adequate for the purposes of the Act and sufficient to fulfil the minimum legal standard. Although the Panel did not descend into detail to explain how referred pain from the neck could (and did in the instant case) cause a restriction in the movement of both shoulders, it was not necessary for the Panel to do so, since this was a matter of professional judgment in respect of which the Panel was entitled, and expected, to use its collective expertise.

Indeed, there was no substantial difference between the findings of the original assessor and the Panel: the key difference was that the Panel took into account the restriction in shoulder movement whereas the original assessor did not (although both found that the restriction in shoulder movement was a result of referred pain from the neck which had been injured in the motor vehicle accident).

I do not consider that the complaint about the Panel’s reasons has been made out.

For the reasons set out above, I make the following orders: