Peet v NRMA Insurance Ltd

The plaintiff, Melissa Peet, claims damages under the Motor Accidents Compensation Act 1999 (“MAC Act”) for psychological injury said to have been suffered in a car accident near Deniliquin in the evening of 4 December 2007. It is her case that she veered off the road to avoid a collision with an oncoming truck, which was occupying most of the roadway. As a result, her car struck a number of guide posts, narrowly missing a tree. She was driving home from work at the time. The truck has not been identified and her claim is brought against the Nominal Defendant. Liability is disputed.`

These are proceedings for judicial review following her assessment by the Medical Assessment Service (“MAS”), pursuant to Pt 3.4 of the MAC Act. Importantly, that assessment was required to determine whether the plaintiff suffered a whole person impairment (“WPI”) as a result of a psychological injury caused by the accident greater than 10%: s 58(1)(d) of the MAC Act, the threshold which must be crossed for her to recover damages for economic loss: s 131. This was a long process, which need not be recounted in detail. It is sufficient to say that in April 2012, Assessor Moore certified that the plaintiff suffered from a chronic Adjustment Disorder with Mixed Anxiety and Depressed Mood as a result of the accident, giving rise to a whole person impairment (“WPI”) not greater than 10%.

Pursuant to s 63 of the MAC Act, a proper officer of the Motor Accidents Authority of New South Wales (“MAA”) referred the assessment to a Medical Review Panel. By s 63(3A), the Panel’s task was not limited to reviewing the aspect of the assessment by Assessor Moore alleged to be incorrect, but was to undertake “a new assessment of all the matters with which the medical assessment is concerned.” Having done so, the Panel also certified that the plaintiff’s WPI was not greater than 10%. It is this decision which is the subject of these proceedings.

The plaintiff claims a declaration that the Review Panel’s certificate and statement of reasons are void and of no effect, together with such other order as the court may see necessary to give effect to her claim. The first defendant, Insurance Australia Ltd t/as NRMA Insurance, is the insurer appointed by the MAA as agent for the Nominal Defendant. The second, third and fourth defendants are the medical practitioners who constituted the Review Panel. The fifth defendant is the MAA, as the body which referred the assessment for review. The sixth defendant is the Review Panel. The active parties in the proceedings have been the plaintiff and the first defendant, NRMA Insurance.

The Review Panel found that the plaintiff suffered a Specific Driving Phobia as a result of the accident, leading to a WPI of 1%. The Panel also diagnosed a recurrence of a pre-existing Anxiety Disorder with Mixed Anxiety and Depressed Mood, but found that it was not caused by the accident. Rather, it was attributable to her treatment at her workplace after the accident.

The Review Panel considered a large volume of documentation, including the material provided to Assessor Moore, and two members of the Panel examined the plaintiff. From this material it appears that the plaintiff had had a number of difficulties in her life over the years, including an assault some years prior to the accident, a past abusive relationship, and previous workplace problems. In 2004 she was diagnosed with Adjustment Disorder with Anxious and Depressed Mood. At the time of the accident she was employed by the Department of Community Services, working for a disability service in Deniliquin.

In its reasons the Review Panel recorded her history of the accident and its aftermath. After setting out briefly her account of the accident, which left her “shaking and crying”, the summary of this material continued:

The plaintiff told the Panel doctors examining her that immediately after the accident she was not driving, but at the time of the examination she was driving locally but tended to have her husband with her. Her history provided further details about her treatment at work after the accident, as follows:

The Review Panel expressed its reasons for its conclusion as follows:

The plaintiff’s complaint in these proceedings is that, in finding that her Adjustment Disorder with Mixed Anxiety and Depressed Mood was not attributable to the accident, the Panel had fallen into error in its approach to the issue of causation. Accordingly, she claims relief in this court on the basis that the Panel’s reasons demonstrate jurisdictional error and/or error on the face of the record.

The Panel had regard to the Permanent Impairment Guidelines issued, pursuant to s 44(1)(c) of the MAC Act, on 1 October 2007. The issue of causation is addressed in those Guidelines at cll 1.7 – 1.9, as follows:

In Ackling v QBE Insurance (Australia) Ltd [2009] NSWSC 881, 75 NSWLR 482, Johnson J noted at [83] that the Guidelines “may be characterised as delegated legislation under s 44(1)(c).” At [86], his Honour described the task for medical practitioners undertaking medical assessment functions as “a practical one”, noting that it was “important that the process is not rendered unduly complex by legal terminology.” His Honour observed that the Permanent Impairment Guidelines dealing with causation “provide practical assistance in this area.” In Owen v Motor Accidents Authority of NSW [2012] NSWSC 560, Campbell J referred at [27] to that observation of Johnson J, but added that it is “well to emphasise that the question to be assessed is one of legal causation involving mixed questions of fact and law arising principally from the law of negligence as modified by the Civil Liability Act 2002, s 5D.”

Section 5D of the Civil Liability Act (“CLA”) provides:

Put shortly, the plaintiff contends that, in finding that her Adjustment Disorder was not attributable to the accident, the Review Panel failed to consider whether the accident had “materially contributed” to that condition: cl 1.9 of the Guidelines. In so doing, the Panel had failed to determine causation in accordance with CLA s 5D(1). As Harrison J observed in Nelkovska v Motor Accidents Authority of New South Wales [2012] NSWSC 819, also a case involving judicial review of a medical assessment, the test of causation “found in the general law, the guidelines and the Civil Liability Act, is whether the injury was caused or materially contributed to by the motor accident”: [47].

In this court the plaintiff was represented by Mr Romaniuk SC with Ms Grotte, and NRMA Insurance by Mr Rewell SC. Between them, counsel supplied me with a large volume of authority, including part of the Ipp Report (“Review of the Law of Negligence – Final Report”) and academic writings. I am grateful for their assistance but, given the focus of the written submissions and their refinement in oral argument, much of this material need not be referred to.

Section 5D was examined by the High Court in Strong v Woolworths Ltd [2012] HCA 5, 246 CLR 182, in the plurality judgment at [17] (190) ff. However, for present purposes, it is sufficient to refer to passages in the judgment of the court when it revisited the issue in Wallace v Kam [2013] HCA 19, 250 CLR 375. In a joint judgment the court said at [11]-[16] (381-3) and [22]-[24] (385):

Mr Romaniuk’s submissions were derived particularly from the following passage (quoted above) in the Review Panel’s reasons for deciding that the plaintiff’s Adjustment Disorder was not attributable to the accident:

In written submissions Mr Romaniuk argued that the Panel’s reasons demonstrate three, closely related, errors. Firstly, the Panel failed to consider any causal link between the accident, the consequent workplace issues, and the recurrence of the Adjustment Disorder. In failing to do so, it applied too narrow a test of causation. Secondly, the Panel failed to consider whether the Adjustment Disorder was caused or “materially contributed to” by the accident, as required by the Guidelines and CLA s 5D. The Panel failed to determine whether the accident was a “necessary condition” for the occurrence of the disorder. Thirdly, the Panel failed to have regard to the stipulation in cl 1.9 of the Guidelines that the accident need not be the sole cause of the condition, provided that it was a “contributing cause” which was “more than negligible.”

Mr Romaniuk argued that, plainly, the plaintiff’s alleged treatment at her workplace, accepted by the Panel to be the source of the recurrence of her Adjustment Disorder, would not have occurred “but for” the accident. In the circumstances, he submitted, the Panel had fallen into error in considering the issue of factual causation, for the purpose of CLA s 5D(1)(a) and the Guidelines. Accordingly, there was an error of law amounting to jurisdictional error and warranting relief in this court.

In response, Mr Rewell acknowledged that the Panel’s reference to the “but for” test, in this context, was “poorly expressed”. He accepted that the “but for” test might be made out in the present case, but argued that that did not conclude the question of causation. There remained the question of the scope of liability: s 5D(1)(b). That question involves a normative judgment which, Mr Rewell argued, is effectively what the Panel undertook.

He argued that even if the test of factual causation had been satisfied, causation would be excluded under s 5D(1)(b) because the conduct of the plaintiff’s employer and others in her workplace would amount to a novus actus interveniens, or because her psychiatric condition resulting from that conduct was not foreseeable or was too remote from the perspective of the tortfeasor in the accident.

He noted that in Zanner v Zanner [2010] NSWCA 343, 79 NSWLR 702, Allsop P (as he then was) observed at [5] (704) that “though s 5D is entitled causation, it appears to encompass all limits on scope of liability, including remoteness … .” Similarly, in the passage from Wallace v Kam quoted above, the court said at [22] that “the normative question posed by s 5D(1)(b) is properly answered by a court through the application of precedent,” and that s 5D “guides but does not displace common law methodology.”

Mr Rewell referred to a passage in Fleming’s The Law of Torts, 10th Edition, at [9.220] dealing an intervening cause by way of deliberate harm by third parties. The effect of what the learned author wrote is sufficiently expressed by the following passages:

Mr Rewell summarised his position in oral argument as follows:

He argued that it could not be expected, and would not be necessary, that the Panel express its reasons in the legal terminology engendered by this area of the law. He noted the observation of Johnson J in Ackling v QBE Insurance at [86], quoted above, that the task of medical practitioners conducting medical assessments is “a practical one”, and that it is “important that the process is not rendered unduly complex by legal terminology.”

In Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43, 88 ALJR 52, the High Court was considering the process of medical assessment by a Medical Panel under Victorian legislation (Accident Compensation Act 1985). It is unnecessary to recite the facts of the case. What is of assistance here is what the court had to say about the functions of the Panel and, in particular, its responsibility in giving reasons for its opinion.

The court observed at [47] (61) that the function of a Medical Panel was “to form and give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise.” Dealing with the obligation to give reasons, the court said at [48], [54]-[55] (62-3):

Mr Rewell submitted that the reasons of the Review Panel in the present case meet the standard enunciated by the High Court. While the Panel did not refer in terms to the Guidelines, he said, the members of the Panel should be taken to have been aware of them and to have applied them. He argued that this was not a case, like Owen or Nelkovska, where the reasons of the Assessor or the Review Panel disclosed explicit error. He contended that the reasons of the Panel, viewed in the way in which he sought to explain them, demonstrated no error.

The analysis of the issue of causation which Mr Rewell attributed to the Review Panel may well be available, but I do not accept that it is how the Panel approached the matter. Indeed, one might question whether it would ever be appropriate for the normative judgment required by CLA s 5 D(1)(b) to be made in the medical assessment process. I am satisfied that in the present case the Panel was addressing the issue of factual causation when it found that the plaintiff’s Adjustment Disorder was not attributable to the accident. That being so, I am persuaded by the submissions of Mr Romaniuk that its assertion that this was not a “but for” situation discloses explicit error in its reasons. The plaintiff is entitled to the relief she seeks.

I would make the declaration sought in par 1 of the amended summons to the effect that the Review Panel’s certificate and statement of reasons are void and of no effect. I shall consult the parties about any consequential order which should be made and, if necessary, hear argument on costs.