Brown v Insurance Australia Group Ltd t/as NRMA Insurance Ltd

By amended summons filed in Court on 11 November 2020 (but served in September 2020), Christie Brown, the plaintiff (the claimant), seeks orders pursuant to s 69 of the Supreme Court Act 1970 (NSW), including an order setting aside the decision of the third defendant (the Review Panel) made on 4 April 2020.

The Review Panel assessed the percentage whole person impairment (WPI) arising from an injury to the claimant’s right shoulder as 2% WPI. The effect of this decision was that the claimant’s total WPI was 7% (when taken with an assessment of 5% WPI for her cervical spine), which is below the threshold for an award of damages for non-economic loss under s 131 of the Motor Accidents Compensation Act 1999 (NSW) (the Act).

The only active defendant in the proceedings is the first defendant, Insurance Australia Group Ltd trading as NRMA Insurance Limited (the insurer). The State Insurance Regulatory Authority (SIRA), the second defendant, and the Review Panel, the third defendant, have filed submitting appearances.

All references to legislation in these reasons are, unless otherwise stated, references to the Act.

The summons, which was filed on 1 June 2020 was filed within the time provided for by Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 59.10(1), being three months from the date of the decision.

Before turning to the grounds raised in the amended summons, it is convenient to set out the relevant legislative provisions and the background facts.

Section 44 of the Act relevantly provides:

Part 3.4 of the Act provides for medical assessments. The term “medical assessment matters” is defined by s 57 as being any of the matters referred to in s 58. Of present relevance, s 58(1) provides in part:

Section 61, which provides for medical assessments, requires a medical assessor or panel to give a certificate as to the matters referred for assessment and the reasons, which is to be conclusive.

Section 63, which provides for review of medical assessments, relevantly provides:

Section 65(1) provides:

Section 65(2) provides that SIRA may arrange for the provision of training and information to medical assessors to promote accurate and consistent medical assessments under this Part (Part 3.4).

Section 81 imposes a duty on an insurer to inform the claimant in writing as expeditiously as possible whether it admits or denies liability for the claim.

Section 131 provides that no damages may be awarded for non-economic loss unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%.

Section 133 relevantly provides:

There are two relevant Guidelines in the present case, each of which was issued pursuant to s 44(1)(d) of the Act:

Clause 1.5 of the PI Guidelines provides:

Clause 1.17 of the PI Guidelines relevantly provides:

Clause 1.21 of the PI Guidelines provides:

Clause 1.24 of the PI Guidelines provides:

Clause 1.40, entitled “Consistency”, provides:

Clause 1.50, which appears under the heading “Assessment of the upper extremity”, provides:

Clause 11.1 of the Medical Guidelines provides that Assessors and Review Panels, when conducting assessments, are to determine their own procedure, are not bound by the rules of evidence and “may inquire into any issue in such manner as they think fit”. If a claimant refuses to attend a medical assessment examination conducted by an assessor or a Review Panel, it is open to the Proper Officer of SIRA to refer the dispute to the assessor or Review Panel to be assessed without an examination under cll 9.10.2 and 9.12 on the papers.

Clause 16.21 relevantly provides:

Mr Hart placed significant reliance in support of grounds 5 and 6 on the Motor Accidents Authority Medical Assessment Service Review Panel Practice Note 3/2005 which was issued by the Motor Accidents Authority in 2005 and last updated on 1 October 2008 (the Practice Note). The cover page of the Practice Note said:

Mr Hart particularly relied on clause 8 of the Practice Note which said:

The claimant, who was born in 1994, was injured in a motor vehicle accident on 11 August 2016. The insurer admitted liability under s 81 of the Act for the negligence of the owner or driver of the vehicle at fault.

The claimant claimed damages from the insurer and, to that end, lodged an application for an assessment of permanent impairment on 7 March 2019. She claimed that she had suffered permanent impairment to her neck, back and both shoulders. She identified the degree of permanent impairment of each of those body parts in her application. In its reply dated 27 March 2019, the insurer identified that there were issues as to causation with respect to each of the body parts listed by the claimant and also an issue as to apportionment with respect to the right shoulder.

On 14 August 2019, the claimant was medically assessed by Dr Christopher Harrington, a medical assessor appointed by SIRA. Dr Harrington examined the claimant and conducted tests to ascertain the range of movement of the claimant’s right shoulder, the findings for which were recorded in the reasons attached to the certificate. In his reasons for concluding that there was a permanent impairment of the claimant’s right shoulder, the assessor said:

On 20 August 2019 SIRA issued a certificate, based on the assessor’s assessment, which certified that the claimant had been assessed as having 12% WPI, which comprised 5% for her cervical spine and 7% for her right shoulder. As the %WPI was in excess of 10%, the claimant became entitled to damages for non-economic loss: s 131.

On 26 September 2019, the insurer applied to SIRA, pursuant to s 63, for a review of the assessment by Dr Harrington. The ground relied on was expressed in the insurer’s submissions in support of its application as follows:

The claimant opposed the referral for review on the basis that there was no material error in the certificate issued by SIRA following Dr Harrington’s assessment.

On 14 November 2019, James Lowe, the Proper Officer of SIRA’s Medical Assessment Service, accepted the review application and determined that it would be referred to a review panel. In his reasons, he said, at paragraph 20:

In an email sent on 15 November 2019, SIRA informed the parties that the Proper Officer had considered the application for review and was satisfied that there was reasonable cause to suspect that the assessment was incorrect in a material particular. On this basis it was referred to the Review Panel, which was constituted by Drs Fitzsimons, Cameron and Stubbs, each of whom was an assessor. The email included the following:

By email from SIRA sent on 27 November 2019, the parties were informed that an examination of the claimant was required and that it would be conducted by two out of three of the assessors on 25 February 2020.

According to its reasons, the Panel formed the preliminary view, on the basis of the written material and prior to the examination, that causation had not been established for the right shoulder injury. Two of the assessors, Drs Fitzsimons and Cameron, conducted an examination of the claimant.

In the course of the examination, the claimant gave a history which was referred to in the reasons as follows:

According to the reasons, the assessors made the following findings on examination with respect to the claimant’s right shoulder:

Mr Hart, who appeared for the claimant, tendered a statutory declaration made by the claimant on 23 June 2020 in which she described what had occurred in the course of the examination as follows:

Ms Gumbert, who appeared with Mr Jones for the insurer, objected to the statutory declaration on the grounds of relevance. The relevance of the statutory declaration and therefore its admissibility will be addressed below.

In its reasons the Review Panel confirmed that it had received and considered all the material which was before Dr Harrington, his certificate, the application for review and attached documents, the reply and attached documents and the determination by the Proper Officer. The Review Panel described the dispute identified by the parties as “assessment of the right shoulder impairment”.

The Review Panel’s reasons for its assessment of WPI for the right shoulder were as follows:

The claimant raised seven grounds of review in her amended summons, to which an eighth was added by Mr Hart after he had concluded his oral submissions in chief. It is convenient to deal with the grounds in the categories by reference to which Mr Hart made submissions.

In substance, grounds 1, 3 and 4 allege that the Review Panel was in error in that it failed to conduct the review in accordance with the Guidelines. Mr Hart contended that the Review Panel was obliged by cl 1.50 of the PI Guidelines to measure a claimant’s active range of motion with at least three consistent repetitions. He relied on the claimant’s statutory declaration in support of the submission that the Review Panel had only measured her active range of motion twice. He argued that as the Review Panel had not conducted three measurements, it had failed to comply with the PI Guidelines and that its assessment was erroneous at law and ought be set aside. Mr Hart also relied on the circumstances that the doctors whose reports had been forwarded to Dr Harrington and the Review Panel had used the range of motion method to assess permanent impairment and that Dr Harrington had also used that method.

The number of times which the Review Panel measured the claimant’s active range of motion of her right arm is not evident from its reasons. However, the Review Panel was not obliged to use the range of motion method for evaluating any permanent impairment to the claimant’s right shoulder. Indeed, cl 1.50.4 provides that if there is inconsistency in range of motion, the range of motion method ought not be used as a valid parameter to evaluate impairment. In the present case, the Review Panel, having conducted some testing of the claimant’s range of motion, decided that it was not an appropriate method for evaluating permanent impairment because of the inconsistency in her presentation: cf. Wellman v CIC Allianz Australia Insurance Ltd [2019] NSWSC 1353 at [63]-[74] (Harrison AsJ), where the range of motion method was used. It is apparent from the reasons, that the Review Panel accepted that the inconsistency was the result of pain. Accordingly, the Panel’s rejection of that method as inappropriate did not imply any criticism of the claimant. It was pre-eminently a matter for the Review Panel to decide on the appropriate method for assessing permanent impairment. Having found inconsistency in range of motion due to pain, the Panel was prohibited by cl 1.50.4 from using it to assess permanent impairment.

The determination of inconsistency, too, was a matter for the Review Panel. Clause 1.40 of the PI Guidelines required the Panel to “use the entire gamut of clinical skill and judgment” to assess whether the results of measurements or tests are “plausible”. The Review Panel can be taken to have applied cl 1.40, having extracted it in its reasons.

The word “plausible” has several related meanings. It is often used as a synonym for “credible” because it has the connotation of believability. However, the context in which the word is used in cl 1.40 of the PI Guidelines is sufficient to indicate that the determination of the plausibility of the measurements is not to be measured by the credibility of the claimant. Thus Mr Hart’s submission that there was any illogicality in the Review Panel believing the claimant and finding inconsistency in the range of motion must be rejected. It was open to the Review Panel to find both that the claimant was a reliable historian and that the range of motion of her right shoulder was variable due to pain, as she herself reported to the two assessors who conducted the examination on behalf of the Review Panel.

In cl 1.40 “plausibility” is used as a synonym for consistency, apparent reasonableness, scientific explicability or replicability. Once the Review Panel appreciated that there was an inconsistency in the range of motion of the claimant’s right upper limb, it was entitled to reject the range of motion method as appropriate for determining the claimant’s permanent impairment. This was so irrespective of whether the inconsistency became evident to the Review Panel from the material provided to it which recorded various measurements of range of movement made by clinicians; from the claimant’s history that pain “caused variable limitation of movement”; or emerged for the first time on examination. No error has been shown in the Review Panel’s rejection of the range of motion method.

When cl 1.50 is read as a whole, it becomes apparent that cl 1.50.3 is intended to ensure that an accurate range of motion is used if and only if range of motion is to be the method used for assessment of permanent impairment. I reject Mr Hart’s submission that what is required for consistency is the method, not the result. This construction would be at odds with the purpose of the provision. It would also be inconsistent with cl 1.50.4 which makes it clear that the range of motion method is inapposite where there is inconsistency in range of motion. Clause 1.40 is also an important indicator of the meaning of cl 1.50 since it makes it clear that there are difficulties in testing consistency and clinical judgment is required in such an assessment.

The wording of cl 1.50 does not support the interpretation for which Mr Hart contended. The PI Guidelines do not give primacy to the range of motion method. Nor did cl 1.50 require the Review Panel to test the claimant’s range of motion three times before deciding that the ranges exhibited were inconsistent.

Accordingly, none of grounds 1, 3 and 4 has been made out.

The Review Panel accepted that the variability of movements in the claimant’s right shoulder was due to pain and, on this basis, decided not to use the range of movement method to assess WPI of the claimant’s right shoulder. On this basis, the claimant’s statutory declaration to the effect that her range of motion was measured only twice is irrelevant and, thus, inadmissible on an application for judicial review: s 55 of the Evidence Act 1995 (NSW). It is not necessary to address the limited circumstances in which evidence of what occurred in an examination would be admissible in an application for judicial review. It is sufficient to observe that such a statutory declaration does not form part of the record within the meaning of s 69 of the Supreme Court Act. Although it is possible that what has occurred in an examination could constitute jurisdictional error, this is not such a case.

As is evident from its reasons, the Review Panel rejected the range of motion method for assessment of permanent impairment because of the reported and evident inconsistency in the range of motion of the claimant’s right shoulder.

The Review Panel was entitled, in these circumstances, to reason by analogy. It chose to use mild crepitation as an analogy on the basis that there was “no other available method of analogy applicable in this situation”.

Mr Hart submitted that the Review Panel’s use of crepitus was legally unreasonable because there was no crepitus. This submission mistakes the purpose of an analogy, which is to draw on a manifestation or symptom which was not present and use it to assess a %WPI for an impairment that was present. Clause 1.24 of the PI Guidelines expressly authorises assessment by analogy in the present circumstances. The Review Panel adequately set out “the actual process of reasoning” to expose how it had come to the assessment: see Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 (Wingfoot) at [65] (French CJ, Crennan, Bell, Gageler and Keane JJ). Ground 2 has not been made out.

Mr Hart submitted that the Review Panel should not have re-examined the plaintiff and that, by re-examining the plaintiff, the Review Panel had denied her procedural fairness. He contended that as the issue for determination was confined to causation, no examination could have rationally assisted the Review Panel to resolve it. He relied on Siddik v WorkCover Authority of New South Wales [2008] NSWCA 116 (Siddik) in which the Court of Appeal (McColl JA, Mason P agreeing) held at [101] that prima facie, an Appeal Panel under s 328 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) was confined to the grounds of appeal the Registrar permitted to proceed, although it could consider other grounds which fall within one of the s 327(3) grounds of appeal if it complied with the requirements of procedural fairness.

He also contended that it was a denial of procedural fairness for two members of the Review Panel to examine the claimant without the third being present. Mr Hart argued that it would be unreasonable to expect the claimant to make submissions on why an examination would not be appropriate and why all three members of the Review Panel should be present at any such examination before the claimant was even aware that the Review Panel was considering such an examination. I understand him to rely on the part of the Review Panel’s reasons where they said, in the context of the examination of the claimant:

Further, he submitted that no warning had been given by the Review Panel of what it proposed to do (conduct a re-examination of the claimant with only two out of the three assessors present) in sufficient time to allow for a response from the claimant’s solicitors. Mr Hart also relied on cl 8 of the Practice Note which he contended was “mandatory”.

The status of the Practice Note, and whether it is still current, was not established. However, on the assumption that it is still current, it has no legal effect since it was made pursuant to s 65(2) and does not constitute a Guideline. As Basten JA said in Boyce v Allianz Australia Insurance Ltd (2018) 96 NSWLR 356; [2018] NSWCA 22 at [26], “such documents are not likely to give rise to controls which are legally enforceable by way of judicial review”. His Honour however accepted that “such provisions may provide a basis for demonstrating unfairness resulting from breach of a procedural requirement”: [26]. Accordingly, it is necessary to address what procedural fairness requires, as a matter of “practical justice” in the context of the statutory regime: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [37] (Gleeson CJ), which was cited in an analogous context to the present in Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39 at [41] (Leeming JA, Beazley P and Basten JA agreeing).

The wording of s 63(3A) provides the starting point for an assessment by a Review Panel. First, it expressly provides that the review is not limited to a review of that aspect of the assessment that is alleged to be incorrect. Secondly, it also provides that the assessment is to be by way of a new assessment of all of the matters with which the medical assessment is concerned. Thus the applicable statutory regime is to be distinguished from that which applied in Siddik, where the Appeal Panel was limited to the grounds on the basis of which the matter was referred to it. Accordingly, Siddik is of no assistance in the present case, except by way of contrast. If Siddik were relevant, it would be necessary to consider whether it remains good law in light of Wingfoot which was decided subsequently.

Section 65(1) provides that medical assessments are to be conducted in accordance with the Medical Guidelines. The Medical Guidelines include Chapter 16, which makes provision for assessments by a Review Panel.

It follows from the statutory regime, which includes the Guidelines, that once the Proper Officer referred the matter to the Review Panel for review of an assessment, the parties (the claimant and the insurer) can be taken to have been on notice that:

The matter to be assessed by the Review Panel was, as it correctly stated, the matter referred to in s 58(1)(d) of the Act: namely, whether the degree of permanent impairment of the claimant as a result of the injury caused by the motor accident is greater than 10%. It follows from the statutory regime outlined above that it was not open to the Review Panel to quarantine a particular issue, such as causation, and decide that issue without complying with its mandate of determining whether the degree of permanent impairment as a result of the injury caused by the motor accident was greater than 10%: Motor Accidents Authority of New South Wales v Mills (2010) 78 NSWLR 125; [2010] NSWCA 82 at [72] (Giles JA, Tobias JA and Handley AJA agreeing); Meeuwissen v Boden (2010) 78 NSWLR 143; [2010] NSWCA 253 at [24] (Basten JA, Beazley JA and Sackville AJA agreeing); Boyce v Allianz Australia Insurance Ltd (2018) 96 NSWLR 356; [2018] NSWCA 22, at [57] (Basten JA, Macfarlan JA agreeing) and Allianz Australia Insurance Ltd v Rutland [2015] NSWCA 328 at [30], [31] and [33] (McColl and Meagher JJA; Macfarlan JA agreeing).

This conclusion is consistent with what the High Court said in Wingfoot at [47] about the nature of the function of a panel such as the Review Panel:

The parties were informed by the email sent by SIRA on 15 November 2019 that the Review Panel would have a teleconference on 26 November 2019 at which time it might reach a decision on the assessment of WPI or it might decide to examine the claimant, to obtain further information or to meet again to make a decision. The parties were told that if they objected to the Review Panel’s assessment being conducted without an examination they should inform SIRA immediately and that if no objection was made by 26 November 2019, the Review Panel would assume that there was no objection to the assessment being conducted on the papers. The parties were also expressly informed that, if there was to be another examination, the Panel might decide that only part of the Panel would conduct it. They were given an opportunity to object within 14 days (that is, by 29 November), although, somewhat inconsistently, they were told that if they had not told SIRA by 26 November 2019, it would be assumed that the parties consent to only part of the Review Panel conducting the re-examination.

Further, the claimant was advised by email sent on 27 November 2019 that she would be examined by two out of three of the assessors on 25 February 2020. The claimant took no objection whatsoever to this course in the intervening three months. It would have been open to the claimant to refuse to attend the assessment and have the review determined on the papers: cll 9.10.2, 9.12 and 11.15 of the Medical Guidelines.

In the face of these invitations, the claimant did nothing to object to anything proposed by SIRA. The Review Panel was entitled to conduct an examination of her with two out of its three members. I am not persuaded that the Review Panel, in referring to the reason for the review and the delay in recording of symptoms related to the right shoulder, ought be taken to have misled the claimant into thinking that causation was the only issue which they were addressing. The reasons of the Review Panel are entitled to be given a fair and beneficial reading: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 (Brennan CJ, Toohey, McHugh and Gummow JJ); [1996] HCA 6.

I am not persuaded that there was any denial of procedural fairness.

Further, the claimant has failed to identify anything she could have said which would have made a difference to the Review Panel’s deliberations. The Review Panel accepted the claimant as a reliable historian. It also accepted the history she gave that her range of movement was variable because of pain. This accorded with the Review Panel’s own findings. Mr Hart submitted that, had the claimant been aware that the Review Panel was going to go beyond the issue of causation, her solicitors could have put to the Review Panel that that was the only issue between the parties. However, in light of the authorities referred to above, the Review Panel would have been led into error had it been influenced by such a submission since it was not entitled to carve up the medical assessment matter which had been referred to it. Therefore the allegation of denial of procedural fairness has not been made out: see, for a similar case, Frost v Kourouche at [41]-[43].

It is also of significance that it was plainly to the claimant’s benefit that she was re-examined. As the Review Panel’s reasons indicate, it was of the preliminary view, before examining the claimant, that causation had not been established for the right shoulder injury. The Review Panel appears to have been influenced in coming to its preliminary view by the absence of reference to complaints of right shoulder pain in the contemporaneous clinical records following the accident. However, when the two assessors took a history from the claimant, they were plainly impressed by her demeanour and accepted her version, which established causation, notwithstanding the absence of any reference in the contemporaneous documents. The claimant not only acquiesced in the examination taking place (by failing to object or put forward any submissions as to why she ought not be re-examined) but she benefited from it by being accorded a further opportunity to establish causation by giving an apparently reliable history. Thus, even had the grounds been made out, the relief ought to have been refused on discretionary grounds: see, in a similar context, AAI Ltd trading as GIO v Cooley [2016] NSWSC 434 at [85] (Fullerton J).

Further, I reject the submission that there was a denial of procedural fairness in having two out of three members of the Review Panel conduct the examination. Several decisions of this Court establish that it is not legally erroneous for fewer than all assessors who together constitute a Review Panel to examine the claimant: Bradley v Insurance Australia Ltd t/as NRMA Insurance [2015] NSWSC 950; Mackenzie v Allianz Australia Insurance Ltd (No. 2) [2015] NSWSC 1320; Gwyther v Insurance Australia t/as NRMA Insurance & Ors [2018] NSWSC 1441; IAG Ltd t/as NRMA Insurance v Tarabay [2018] NSWSC 1836; Lu v AAI Ltd t/as AAMI [2019] NSWSC 368 at [59]-[89], [84]-[89].

For these reasons, neither ground 5 nor ground 6 has been made out.

Mr Hart added the following ground (which becomes ground 8 in the further amended summons) at the conclusion of his oral submissions in chief:

Mr Hart contended that the Review Panel could be taken to have failed to consider the report of Dr Home of 10 August 2018 and the application of the range of motion method by Dr Harrington because the reasons of the Review Panel failed to address this material expressly.

The ground must be rejected. First, the Review Panel set out in its reasons the material which it had considered, which included the matters referred to in ground 8. Secondly, it will only be an error of law to fail to take into account a consideration when a decision-maker is bound to take that matter into account either by reason of an express statutory provision or by necessary implication: Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 39-40 (Mason J); [1986] HCA 40, which was applied in a similar context to the present in Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244 at [15] (Basten JA, McColl and Macfarlan JJA agreeing) and Rodger v De Gelder [2015] NSWCA 211 at [84]-[86] (Gleeson JA, Macfarlan and Leeming JJA agreeing).

The parties accepted that there was no reason why costs ought not follow the event. Accordingly, the general rule applies: UCPR, r 42.1.

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