CIC Allianz Insurance Limited v Pillay

By a further amended summons filed on 6 November 2017, CIC Allianz Insurance Limited (“the plaintiff”) seeks orders in the following terms:

The further amended summons is supported by an affidavit of Katherine Elizabeth Toshack dated 23 May 2017 which was read without objection.

The first defendant tendered three documents which were admitted without objection, namely:

The factual background is essentially not in dispute and may be summarised as follows.

The first defendant was injured in a motor vehicle accident on 7 October 2014 (“the accident”). The plaintiff is the Compulsory Third Party insurer of the vehicle at fault. Following the accident, the first defendant lodged a claim for compensation with the plaintiff, pursuant to the provisions of the Motor Accidents Compensation Act 1999 (NSW) (“the MACA”). An application was then made to the State Insurance Regulatory Authority of NSW (“the Authority”) for a medical assessment of the first defendant’s injuries, pursuant to Part 3.4 of the MACA. That medical assessment was necessary in order to determine what, if any, entitlement the first defendant may have to damages for non-economic loss under the MACA.

By virtue of the operation of s. 133(2) of the MACA, the medical assessment was required to be made in accordance with the Guidelines for the Assessment of the Degree of Permanent Impairment (“the Guidelines”). The Guidelines are dated 1 October 2007 and have been published pursuant to s. 44(1)(c) of the MACA. They have the status of delegated legislation.

The first defendant was subsequently referred by the Authority to a medical assessor, Dr Geoffrey Boyce, for assessment of the following injuries:

On 10 November 2015, Assessor Boyce issued a certificate and reasons in which he determined that the following injuries were caused by the accident:

Assessor Boyce concluded (inter alia) that:

In reaching these conclusions, Assessor Boyce said:

Importantly, Assessor Boyce also said:

The first defendant underwent a further assessment by Assessor Boyce on 20 September 2016. On that occasion, Assessor Boyce issued a further certificate and reasons in which he found that the first defendant had an injury to the left shoulder which was caused by the accident. He assessed the whole person impairment in respect of that injury at 5%. In reaching that conclusion, Assessor Boyce said (inter alia):

On 29 September 2016 medical assessor Alison Fitzgerald issued a combined certificate, certifying that the first defendant’s total whole person impairment was 10%. This was constituted by a 5% impairment in respect of the injury to the cervical spine and a 5% impairment in respect of the injury to the left shoulder.

Following the determination of Assessor Boyce, the first defendant sought, and was granted, a review pursuant to s. 63 of the MACA. Following this, the matter was referred to a Medical Assessment Review Panel comprising Assessors Christopher Oates, Geoffrey Stubbs and Clive Kenna (“the Panel”). It was common ground between the parties that Exhs. 1, 2 and 3 before me formed part of the evidence before the Panel.

In Exh. 1 Mr Baziotis reported to the first defendant’s general practitioner, Dr Wassif, in (inter alia) the following terms:

On 21 November 2014 Mr Baziotis further reported to Dr Wassif (Exh 2) in (inter alia) the following terms:

The submissions made to the Panel on behalf of the first defendant (Exh 3) included the following (at para 1):

The Panel issued a certificate and reasons on 25 February 2017 under the hand of Dr Christopher Oates, one of the Panel members. Under the heading “Panel Deliberations” the following was stated:

Under the heading “Permanent Impairment” the following was stated:

Under the heading “Panel Decision” the Panel stated the following:

The effect of the Panel’s determination was that when combined with the earlier assessment of the first defendant’s whole impairment of 5% in respect of the cervical spine injury, his total whole person impairment was 11%. Pursuant to s. 131 of the Act, that assessment entitled the first defendant to damages for non-economic loss because his level of whole impairment exceeded 10%.

The certificate issued by the Panel incorporated its reasons. In this regard s. 61(9) of the MACA is in the following terms:

The proceedings now brought by the plaintiff seek judicial review of the Panel’s determination on the grounds more fully set out below. The plaintiff invokes the court’s supervisory jurisdiction which is derived principally from s. 69 of the Supreme Court Act 1970 (NSW). The proceedings do not involve a review of the merits of the Panel’s decision. The court’s jurisdiction arises where there is an error of law on the face of the record, or jurisdictional error: NRMA Insurance Limited v Mulcahy [2017] NSWSC 1499 at [19] per Adamson J.

Whether error on the face of the record has been shown is confined to an examination of the record itself: Craig v State of South Australia (1995) 184 CLR 163; [1995] HCA 58 at 180-181. However, evidence may be given of what was before the decision-maker if it is germane to establishing jurisdictional error: Allianz Australia Insurance Limited v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 at [15].

The plaintiff takes no issue with the Panel’s determination that the first defendant’s left shoulder injury gives rise to a whole person impairment of 6% (as opposed to the 5% calculated by Assessor Boyce). The plaintiff accepted that in this respect there appeared to have been a mathematical error in Assessor Boyce’s calculations. However, it was the plaintiff’s position that in the event that error was found, the matter should nevertheless be remitted to a differently constituted Panel. I have addressed this submission further below.

Two particular provisions of the Guidelines are relevant in light of the grounds relied upon by the plaintiff.

Clause 1.3 of the Guidelines is in the following terms:

Clause 2.5 of the Guidelines (which I note is printed in bold and is therefore to be regarded as a directive) is in the following terms:

The plaintiff submitted that in making its decision, the Panel in erred in reaching one or more findings in the absence of evidence. Specifically in this respect, the plaintiff challenged the Panel’s findings that:

As to the first of those matters, it was submitted that the Panel’s determination in the first part of the italicised passage of that part of its reasons set out at [19] above was incorrect, for the simple reason that on a proper construction of what he had said, Assessor Boyce had not found that any right shoulder injury had resolved. It was submitted that on this basis alone, error was established.

It was further submitted that there was no history of complaints of right shoulder symptoms recorded in Assessor Boyce’s decision of 10 November 2015, that he had found no evidence of any injury to the left arm or the right arm, and that although he had stated that the first defendant may have had soft injuries to the right or left arm, he did not list any right shoulder injury amongst those injuries that had resulted from the accident. It was submitted that the only reference to a right shoulder injury in the Certificate of Assessor Boyce was the fact that a right shoulder injury had been listed in the injuries to be assessed by him.

It was further submitted that the panel’s conclusion that the right shoulder was not an “uninjured” joint was factually erroneous, and unsupported by any evidence. In advancing that submission, counsel for the plaintiff accepted that the Panel’s conclusion was not couched in those precise terms. However, it was submitted that the Panel’s conclusion that it “could not use the Assessor’s recorded right shoulder ROM as a baseline to subtract from the left shoulder impairment because it was not a single uninjured joint” (in the second part of the italicised passage in [19] above) was tantamount to reaching a conclusion that the right shoulder was not an “uninjured” joint. That, it was submitted, was effectively another way of the Panel expressing a conclusion that the first defendant had, in fact, suffered a right shoulder injury, in circumstances where there was no evidence to support such conclusion.

The plaintiff submitted that at its highest, Assessor Boyce had found that the first defendant had no symptoms “in his right or left arms”. It was submitted that for that purpose, the “arm” was not to be equated with the “shoulder”. However, counsel submitted that even if an extended interpretation were adopted so as to include “shoulder” in the description of “arm”, it remained the case that the certificates of Assessor Boyce provided no basis for any such conclusion.

Finally, it was submitted that the reports of Mr Baziotis provided no support for a conclusion that the first defendant had suffered any injury to his right shoulder, either before or after the accident. Counsel submitted that a complaint of pain in the right shoulder (which was what Mr Baziotis had recorded) did not equate to an “injury” to the right shoulder for the purposes of assessment. In this regard, counsel cited the definition of injury as:

Senior counsel for the first defendant submitted that there was no doubt that the first defendant had suffered an injury to his right shoulder prior to the accident because “so much is noted by Assessor Boyce …. when he refers to Mr Baziotis’ recording as much and also recording the fact that the (first defendant) had had osteopathic treatment for both shoulders”. Senior counsel further submitted that it was clear that Assessor Boyce was aware that the first defendant “had problems” with his right shoulder prior to the motor vehicle accident.

Senior counsel accepted, as I understood it, that the certificates and reasons of Assessor Boyce did not include any express finding in respect of an injury to the first defendant’s right shoulder. In these circumstances, he accepted, as I understood it, that that part of the Panel’s conclusion which was the focus of this ground “might be incorrect”. However, senior counsel submitted that whether or not the first defendant’s right shoulder was injured in the motor vehicle accident was irrelevant because Mr Baziotis had found (as evident from Exhs 1 and 2) that the right shoulder had previously been injured. It was submitted that, as a consequence, the Panel had correctly concluded that the first defendant’s right shoulder was not an uninjured joint. It was submitted that in circumstances where the reports of Mr Baziotis were before the Panel, the Panel was cognisant of the fact that the right shoulder could not be used as a baseline because it was not uninjured.

As set out at [19] above, in the third paragraph of its reasons under the heading “Permanent Impairment”, the Panel concluded (inter alia) that the first defendant’s right shoulder was a referred injury related to the accident which Assessor Boyce “found had resolved in his previous certificate of 10 November 2015”. That conclusion was demonstrably incorrect. Nowhere in Assessor Boyce’s certificates did he express any such finding, or any finding to that general effect. That conclusion was reached by the Panel in circumstances where there was no evidence to support it.

I am unable to accept the proposition advanced on behalf of the first defendant that Assessor Boyce had effectively noted that the first defendant had suffered an injury to the right shoulder. Read carefully, Assessor Boyce noted no such thing. In fact, what he did was make reference to parts of the reports of Mr Baziotis which disclosed that the first defendant had consulted Mr Baziotis for (inter alia) episodic shoulder pain. Obviously, pain may result from an injury. However, as the definition of the word “injury” (at [34] above) demonstrates, the two terms are not interchangeable.

I am similarly unable to accept the submission that what was effectively conceded to be an incorrect statement made by the Panel was, in effect, “saved” by the reports of Mr Baziotis. As I have set out, Mr Baziotis recorded complaints of pain. Pain may well be a consequence of injury, but the two are not the same.

I am also unable to accept the submission that the conclusion reached by the Panel which is the subject of this ground was irrelevant. The task of the Panel was to conduct an assessment of injury. The Panel reached a demonstrably incorrect conclusion which was germane to its task.

The Panel’s error constitutes an error of law. Error having been found, it is strictly speaking unnecessary for the remaining grounds to be considered. However, as they were fully argued, it is appropriate that I express my views in relation to them.

Counsel for the plaintiff submitted that the Panel was under an obligation to apply the Guidelines. It was submitted that having reached an incorrect conclusion as to the findings made by Assessor Boyce, the Panel then found that it could not use Assessor Boyce’s recorded range of movement in the right shoulder as a baseline on which to assess the level of impairment in the left shoulder because the right shoulder was not an uninjured joint. It followed, in counsel’s submission, that the Panel had made no attempt to apply, or properly apply, Clause 2.5 of the Guidelines.

It was submitted that such failure was an error of law, or a constructive failure of the Panel to perform its duty, brought about by the Panel’s erroneous conclusion which is the subject of ground 1. It was submitted that had the Panel lawfully undertaken its task, it may have been open to it not to deduct the right shoulder impairment but that in failing to even consider whether the impairment ought be deducted, the Panel had fallen into error.

To a large extent, senior counsel for the first defendant relied upon his submissions in respect of ground 1 in support of his position on this ground.

In particular, he submitted that the panel’s finding that the right shoulder joint was not an uninjured joint was, for the reasons previously advanced, the correct one.

Ground 2 is inextricably linked to ground 1. For the reasons that I have already expressed, the Panel’s conclusion that Assessor Boyce had found that a previous right shoulder injury had resolved was incorrect.

It is apparent from the Panel’s reasons that this erroneous finding was used as the basis for the conclusion that the recorded right shoulder range of movement could not be used as a baseline because the right shoulder was not a “single uninjured joint”. That conclusion was based on a false premise and led to the panel failing to apply cl. 2.5 of the Guidelines.

It follows that this ground is made out.

Counsel for the plaintiff submitted that in making its decision, the Panel was required to provide adequate reasons for its determination. It was submitted that the Panel’s failure to state its path of reasoning was a further error.

It was submitted that the Panel failed to explain the conclusions it reached, particularly its conclusion that the first defendant had suffered a right shoulder injury. It was further submitted that the Panel had failed to provide reasons for its conclusion that the first defendant’s right shoulder was not an “uninjured” joint for the purposes of clause 2.5 of the Guidelines. It was submitted that in this respect, the reasons of the Panel amounted to little more than a bald conclusory statement, which was made without explanation, and which fell substantially short of exposing the reasoning process which it had adopted.

Senior counsel for the first defendant submitted that the Panel’s path of reasoning was exposed by its statement that:

I have previously set out the provisions of s. 61(9) of the MACA which impose obligations upon Assessors to provide reasons. Clause 16.24 of the Guidelines further provides:

In Wingfoot Australia Partners Pty Limited v Kocak (2013) 252 CLR 480; [2013] HCA 43 the High Court made the following relevant observations in relation to the duty to give reasons (at [55]):

The statutory scheme under consideration in Wingfoot was substantially similar to that prescribed by the MACA: Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39; (2014) 66 MVR 140 at [2]; [40]. As a result, the observations in Wingfoot have been applied to reasons given by medical assessors when performing their functions under the MACA: see for example Zahed v IAG Limited t/as NRMA Insurance (2016) 75 MVR 1 at [34]. Moreover, the provision of reasons is a requirement imposed upon a medical assessor by virtue of the Guidelines, which have the status of delegated legislation: AAI Limited v Fitzpatrick (2015) 72 MVR 97; [2015] NSWSC 1108 at 13]; Sadsad v NRMA Insurance Limited (2014) 67 MVR 601; Allianz Insurance Limited v Francica [2013] NSWSC 1577; (2012) 63 MVR 1; Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284.

It is important to bear in mind that in determining this ground, it is not appropriate to parse the language of the Panel in the way that an appellate court might review the judgment of a single judge, nor is it appropriate to examine the reasons with a critical eye attuned to error: Sadsad at [16] and the authorities cited therein. The ultimate question is whether the reasons given disclose the pathway of reasoning by which the Panel arrived at its conclusions: Wingfoot at [55].

Bearing in mind these principles, I am of the view that this ground is made out. In my view, the Panel’s certificate discloses no path of reasoning at all. Even accepting the two propositions advanced by senior counsel for the first defendant, the precise basis upon which the panel found that the right shoulder was “not uninjured” is not explained. If it is the case that such a finding was based upon the Panel’s interpretation of the conclusions reached by Assessor Boyce, such interpretation was erroneous for the reasons that I have already expressed.

It follows that this ground has been made out.

The plaintiff submitted that in making its decision the Panel failed in its obligation to undertake its own assessment, and had done nothing more than (erroneously) make reference to, and adopt, a finding which was said to have been made by Assessor Boyce, but which was not in fact made. It was submitted that this fact alone demonstrated a failure on the part of the Panel to conduct its own assessment.

Senior counsel accepted that it was the task of the Panel to carry out an assessment. However, it was submitted that properly understood, the Panel had regard to the findings of Assessor Boyce and concluded that those findings were sufficiently detailed to allow it to make an assessment of permanent impairment. It was submitted that it was open to the Panel to adopt the findings of other assessors, and at the same time still be undertaking its own assessment.

Senior counsel also emphasised that it was not necessary in every case that an injured person be re-examined by a Review Panel, and that it remained open to the Panel to assess the material before it, review it, and come to a conclusion. It was submitted that this did not involve anything more than the Panel’s use of its collective medical knowledge in order to make an assessment of the level of whole person impairment.

Section 63(3A) of the MACA is in the following terms:

Medical assessors are obviously entitled to rely upon their own expertise in making their assessments. That extends to relying upon such expertise to determine whether re-examining an injured party is necessary for the purposes of carrying out their task: Boyce v Allianz Australia Insurance Limited [2017] NSWSC 780; (2017) 80 MVR 366 at [53]. The fact that the Panel chose not to re-examine the first defendant does not disclose error.

At the same time, the Panel was under an obligation to carry out an assessment of the nature and extent of the first defendant’s injuries sustained in the accident. In other words, the Panel was required to determine afresh the medical assessment issues which were referred to it: Frost at [39] per Leeming JA. That required the Panel to engage in a process of clinical judgment having regard to the material which was before it. In Rutland v Allianz Australia Insurance Limited [2014] NSWSC 1583; (2014) 68 MVR 533 Garling J explained the nature of the Panel’s task, in terms which I respectfully adopt (at [74]):

In my view, the Panel failed to perform that task, and thus failed to properly engage in the process of assessment. That failure is evident from the Panel’s blanket adoption of an asserted conclusion reached by Assessor Boyce. For the reasons outlined, no such conclusion was ever actually reached.

That is not to say that it is not open to one medical assessor to consider and adopt the findings of a previous medical assessor. However in doing so, it remained incumbent upon the Panel to engage in its own exercise of clinical judgment. I accept the submission of counsel for the plaintiff that the Panel’s adoption of the asserted conclusion of Assessor Boyce is, of itself, indicative of a failure on the part of the Panel to engage in that exercise.

It follows that this ground is made out.

It was submitted on behalf of the first defendant that even if error was made out, I should exercise my discretion to refuse the relief which was sought, in light of the concession made by the plaintiff (at [25] above) regarding the relevant mathematical calculations. It was submitted that in light of that concession, the result of any further medical assessment would inevitably be the same, such that remitting the matter for such an assessment would be futile.

I am not persuaded that this is the case for two principal reasons. Firstly, for the reasons set out at [63], if the matter were remitted to a differently constituted Review Panel, that Review Panel would be required to make a fresh determination of the issues referred to it. Secondly, one of the complaints made by the plaintiff, which I have found has been made out, is that the Panel erroneously adopted what was said to have been a conclusion reached by Assessor Boyce which was never in fact reached. Another complaint, which has also been made out, is that there was a failure on the part of the Panel to properly engage in an exercise of clinical judgment in making an assessment of the first defendant’s injuries. What conclusions might be reached when the matter is considered afresh, purported conclusions are not incorrectly taken into account, and clinical judgment is properly exercised, will be a matter for those who are appropriately qualified to reach those conclusions. In my view, it could not be said that those conclusions will inevitably be the same as those which were reached in the course of the adoption of a process which was infected by error.

For those reasons, this is not an appropriate case for the exercise of the court’s discretion not to grant the relief which has been sought.

I make the following orders: