Cowcher v Allianz Australia Insurance Limited

By an amended summons filed on 9 May 2019 Sharon Cowcher (“the plaintiff”) seeks (inter alia) an order which has been pleaded in the following terms:

It should be noted that an original prayer for relief which was pleaded in the originating Summons in respect of a decision made by the second defendant was abandoned at the commencement of the hearing.

A joint court book containing all evidence and pleadings was admitted by consent and marked Exh A.

The first defendant, who is the only active defendant in the proceedings, has opposed the relief sought.

The plaintiff is 83 years of age. She was involved in a fall in 2009 when she sustained a cerebella haemorrhage and a right sided hemiplegia. She was admitted to an aged care facility in 2013. She is either bed-bound or wheelchair-bound, and is not able to stand or walk independently.

Prior to her fall in 2009 the plaintiff had also suffered from generalised osteoarthritis involving multiple joints, including both hips and both knees. She eventually had total hip replacements and total knee replacements. The left total hip replacement required revision, and post-operatively a complication ensued, whereby the left hip dislocated. This led to a significant shortening in the plaintiff’s left leg.

On 26 May 2016, the plaintiff attended a dental appointment and a disabled taxi was arranged to bring her back to her aged care facility. She was travelling in the taxi in her own chair during the return trip when the taxi was forced to stop quickly. As a result, she slipped forward under the seat belt which was holding her in the chair, and fell heavily onto her right knee. She was taken to hospital where it was noted that she had significant pain in the region of the right femur. No other injuries were noted. Examination of her right leg revealed tenderness over the mid-shaft of the right femur.

The plaintiff came under the care of Dr Dewar, an orthopaedic surgeon, who carried out a revision of her right total hip replacement on 27 May 2016. The plaintiff was subsequently transferred back to her aged care facility. She was re-admitted to hospital on 9 June 2016 complaining of increasing pain in the region of her right thigh, and swelling around her right knee. X-rays of her right hip on 9 June 2016 revealed that the right total hip replacement remained in good position. The peri-prosthetic fracture involving the mid femoral shaft was now shown to have moderate medial and posterior displacement with slight shortening.

Further surgery was carried out on 10 June 2016 by way of open reduction and internal fixation of the peri-prosthetic fracture of the mid-femoral shaft fracture. The plaintiff was subsequently discharged back to the aged care facility on 16 June 2016. She was followed up in the Outpatient Orthopaedic Clinic at John Hunter Hospital until 14 November 2016. Her post-operative progress was good and no further follow up was done after that date.

The plaintiff made a claim for damages pursuant to the provisions of the Motor Accidents Compensation Act 1999 (“the Act”) in respect of her injuries arising out of the incident on 26 May 2016. She was referred to a medical assessor, Assessor Mark Burns, for a determination of whether her degree of permanent impairment as a consequence of any injury caused by the accident was greater than 10%.

Assessor Burns carried out an assessment of the plaintiff on 19 July 2018. On 20 July 2018 he issued a certificate stating that the plaintiff’s whole person impairment in respect of injury caused by the accident was not greater than 10%.

Under the heading “Degree of Permanent Impairment” [1] Assessor Burns said the following:

On 8 August 2018 the plaintiff made an application to the Proper Officer for review of Assessor Burns’ determination. That application was made pursuant to s 63 of the Act which is in the following terms:

The Proper Officer commenced [2] by setting out the background to the dispute before identifying the issues as follows:

In respect of the first of those issues, having set out the submissions of the plaintiff, [3] the Proper Officer [4] cited Clauses 1.31 and 1.32 of the Guidelines, which set out the methodology to be undertaken when making apportionments between pre-existing impairments and those resulting from (in this case) a motor vehicle accident.

The Proper Officer then went on to say [5]

As to the second issue raised by the plaintiff, the Proper Officer commenced by noting the plaintiff’s submissions before going on to say: [6]

The Proper Officer concluded: [7]

The Motor Accident Permanent Impairment Guidelines (“the Guidelines”) are issued pursuant to s 133(2)(a) of the Act. Clause 1.2 of the Guidelines is in the following terms:

Clause 1.31 of the Guidelines is in the following terms:

Table 64 of the AMA 4 Guides includes the following:

Table 65 of the AMA 4 Guides is in the following terms:

There was a degree of confusion in ascertaining the precise bases upon which the plaintiff sought judicial review of the Proper Officer’s decision. I have already noted [8] the terms in which the relief sought was pleaded in the Summons. When asked to articulate the precise error(s) which were relied upon, counsel for the plaintiff initially said: [9]

A second error was then articulated in the following terms: [10]

It will be apparent that the terms in which these asserted errors were activated were somewhat repetitive. However, counsel confirmed [11] that his submission was that the Proper Officer had reached a decision which was legally unreasonable. Although counsel also made reference to the decision being ultra vires, that assertion was not pressed. It will also be noted that counsel for the plaintiff made an oblique reference to the Proper Officer having failed to give proper reasons. When this was drawn to counsel’s attention, he confirmed [12] that he did not make any submission that the Proper Officer’s reasons were inadequate.

In developing his submissions, counsel for the plaintiff took me firstly to the determination of Assessor Burns. He submitted that Assessor Burns had erroneously concluded that despite the fact that the plaintiff’s need for the removal of a hip replacement had arisen as a consequence of the accident, the plaintiff had the same level of whole person impairment as she had prior to the injury. It was submitted that the reasoning of Assessor Burns fell into ‘demonstrable error’ on account of his failure to assess the category of whole person impairment as prescribed by Table 64 of the AMA 4 Guides. It was submitted that the Proper Officer had, in effect, replicated the error of Assessor Burns and reached a conclusion which was legally unreasonable.

Counsel submitted that as a matter of ‘simple logic’, the application of Table 64 of the AMA 4 Guides ‘must score the plaintiff…at least 15% whole person impairment’. The essence of the submission advanced on behalf of the plaintiff was that Table 64 operated in a way which mandated a conclusion that because the plaintiff’s previous hip replacement was required to be removed and replaced with another as a consequence of the accident, the plaintiff had suffered a whole person impairment of 15%.

Counsel submitted that in these circumstances, in reaching the decision that he was not satisfied that there was a reasonable cause to suspect that Assessor Burns’ assessment was incorrect in a material respect, the Proper Officer had reached a conclusion which was legally unreasonable.

Counsel for the first defendant submitted that the fundamental premise of the plaintiff’s argument was that because the plaintiff had undergone a right hip replacement after the subject accident, there should be a mandatory assessment of 15% whole person impairment based on the AMA 4 Guides, and that it was unreasonable to come to any contrary conclusion. It was submitted that this submission was misconceived, and that the Proper Officer had properly understood, referred to, and taken into account, both the Guidelines and the AMA 4 Guides.

Counsel for the first defendant submitted that in order to make out a complaint that the decision of the Proper Officer was legally unreasonable, it was necessary for the plaintiff to establish that the decision was one at which no reasonable person or authority could properly have arrived. It was submitted that it could not be said that the Proper Officer’s decision was unreasonable in any sense because it an appropriate (or at least an available) outcome based on the material which was available.

In Meeuwissen v Boden [13] Basten JA made a number of observations in relation to the operation of s 63 of the Act. Those observations may be summarised as follows:

In the course of argument I was taken to the decision of Campbell J in Elliott v Insurance Australia trading as NRMA Insurance [19] in which his Honour concluded that for the purposes of determining an application under s 63 of the Act, it was likely that a state of satisfaction that there is reasonable cause to suspect that the assessment was incorrect “need not rise above anything other than a state of unease on the part of the proper officer about the correctness of the assessment reading the assessor’s reasons and considering the applicant’s criticisms of them”. [20] Campbell J’s determination in that case is limited to its own facts. Moreover, in Dominice v Allianz Australia Insurance Limited [21] Basten JA cautioned against the abandonment of the relevant statutory wording in favour of a paraphrase [22] .

Finally, in Minister for Immigration and Citizenship v Li [23] Hayne, Kiefel and Bell JJ observed [24] that legal unreasonableness encompasses error in reasoning, ascribing disproportionate weight to a particular factor or factors, or applying reason which is illogical or irrational. In my view, the decision of the Proper Officer does not fall into any of those categories.

Properly understood, the plaintiff’s complaint is that it is illogical and unreasonable to conclude that a person who is injured in a motor vehicle accident, and who has undergone a total hip replacement as a result, suffers no permanent impairment as a consequence. Such an approach overlooks, and misunderstands, both the Guidelines and the AMA 4 Guides.

In terms of the Guidelines, cl 1.2 provides that they are “definitive with regard to the matters they address”. One of the matters that they address (in cl 1.31) is the methodology of evaluating pre-existing impairment. That clause directs that the value of any pre-existing symptomatic impairment must be calculated, and then subtracted from the current WPI value.

That was precisely what Assessor Burns did. It was a matter with respect to which the Proper Officer correctly found no error. The Proper Officer’s observations, particularly at paragraphs [10] to [19] of his decision, are thorough, disclose no error in approach, and disclose no basis upon which to reach a conclusion that his decision is in any way unreasonable. The conclusion that was reached by the Proper Officer was clearly available to him on the evidence.

The approach adopted by the plaintiff also misunderstands the operation of the Guides. The Guides are just that – a guide. Contrary to the general tenor of the submissions advanced on behalf of the plaintiff, they do not operate in a mandatory way, so as to effectively dictate the level of permanent impairment which must be found in a given case.

For the forgoing reasons I make the following orders: