AAI Limited v Motor Accidents Authority of New South Wales [2015] NSWSC 912 | Case summary

This is an application for judicial review by the plaintiff, AAI Limited trading as AAMI (the insurer), of the decision of a proper officer of the Motor Accidents Authority (the Authority) to dismiss an application for review by a review panel of a medical assessment. That application was made by the insurer pursuant to s 63 of the Motor Accidents Compensation Act 1999 (NSW) (the Act).
The fundamental question requiring determination by me is as follows. Did the proper officer commit an error of law in refusing to order a review of a medical assessment, when that medical assessment did not attempt to "disentangle" the degree to which the various components of an alleged single violent incident (some of which were said to be motor accidents as defined in the Act, and some of which were said not to be) caused psychiatric injury to Ms Vanessa Sproule?
The Authority and the proper officer entered submitting appearances before me. Ms Sproule is the third defendant in the proceedings before me, and the claimant in the substantive proceedings; for ease of comprehension I shall refer to her as the claimant. Concise chronological background
A concise background of the matter is as follows (I shall not refer to sundry procedural steps undertaken by the parties that are not germane to this dispute).
On 7 May 2006, the claimant was involved in a motor vehicle accident. An insurance claim with respect to that accident was settled on 17 September 2009.
On 5 July 2009, the claimant asserts that she sustained injuries, including psychiatric injuries, as a result of an ongoing incident involving her then-boyfriend, Mr Judd Ball. The insurer before me is the insurer of Mr Ball.
Although there is a lack of clarity about precisely what occurred, the claimant asserts that Mr Ball became violent and physically assaulted her whilst he was a passenger in her vehicle. She claims that he repeatedly punched her face and head, before pushing her out of the vehicle into oncoming traffic.
After taking control of the vehicle and driving a short distance, Mr Ball reversed the vehicle towards the claimant, causing her to jump over a small brick fence. Mr Ball then exited the vehicle and began to assault the claimant, before forcing her back into the vehicle and driving off at high speed. Fearing for her life, she claims that she jumped out of the moving vehicle and hid from Mr Ball until emergency services arrived.
On 1 July 2011, the claimant made a claim with the insurer in respect of the events of 5 July 2009.
On 5 April 2012, the claimant lodged an application for assessment of a permanent impairment dispute by the Medical Assessment Service (MAS) of the Authority.
By way of a written submission of 22 May 2012, the insurer (through its solicitor) submitted in response that the assessment of the permanent impairment of the claimant was complicated by the fact that she had been involved in a prior motor vehicle accident on 7 May 2006. As well as that, the insurer submitted that it would be difficult to discern whether the claimant was injured as a result of a motor vehicle accident on the evening of 5 July 2009, or as a result of the assaults committed by Mr Ball.
On 15 August 2012, Dr Sharon Reutens (the medical assessor) provided a written certificate of the injuries of the claimant. The assessment differentiated between the pre-existing injuries that arose from the accident in 2006, and the injuries that were found to have arisen from the incident of 5 July 2009 (a process to which I shall refer for convenience as "external apportionment"). However, the certificate made no effort to differentiate between those injuries that may have arisen because of a motor accident or motor accidents that occurred on 5 July 2009, and those injuries that may have arisen because of other acts of Mr Ball on that occasion that were not motor accidents (a process to which I shall refer for convenience as "internal apportionment").
The medical assessor found that the degree of current permanent impairment of the claimant was 17%. The assessor also found that pre-existing permanent impairment constituted 5% of that total. Adjustments were made in the amount of 2% for the effects of treatment. A final certificate was given that there was permanent impairment of 14%. It can be seen that, mathematically, a process of external apportionment is reflected in those figures, but no process of internal apportionment. Nor is there any such analysis in the reasons of the medical assessor.
The determination that the claimant had suffered 14% permanent impairment is important, of course, because the effect of s 131 of the Act is that no damages may be recovered for non-economic loss unless the degree of permanent impairment of the claimant as a result of the injury caused by a motor vehicle accident is greater than 10%.
On 4 July 2012, the claimant lodged an application for general assessment by the Claims Assessment and Resolution Service (CARS). The insurer lodged a reply to that application on 3 August 2012.
On 18 September 2012, the insurer made an application for a review of the assessment by the medical assessor, pursuant to s 63 of the Act. In written submissions that formed part of that application, the insurer submitted that: The assessor has failed to distinguish and apportion between the various assaults alleged by the claimant against Mr Ball and the effect of what she describes as 'the motor vehicle accident (the car reversing into her)…'
The insurer also submitted that: Having identified more than one cause for the claimant's current problems, some arguably motor accidents but clearly many not, AAMI contends that Assessor Reutens has failed to apportion her permanent impairment assessment between what is compensable under the Act and what is not. That failure is a material error and taken alone or in combination with her incorrect classification of the PIRS categories referred to above will surely see the assessment fall below 10%.
On 22 November 2012, the proper officer dismissed the application for review of the assessment of the medical assessor, and gave reasons for doing so. That dismissal is the decision that was impugned before me.
In December 2012, the claimant made an application for exemption from general assessment by the CARS, pursuant to s 92(1)(a) of the Act. On 31 January 2013, the principal claims assessor issued a certificate certifying that the claim was exempt from assessment on the ground that the insurer had declined to indemnify Mr Ball, being the driver against which the claim was made.
As a result, on 2 April 2013 the claimant filed a statement of claim in the District Court of New South Wales. That originating process was subsequently superseded by a further amended statement of claim of 27 November 2013. The impugned decision of the proper officer, and the reasons given for it
It is convenient to set out the entirety of the portion of reasons for the decision of the proper officer rejecting the application for review that the insurer submitted demonstrates an error of law: [8] Whether or not the alleged "incidents" which took place in July 2009 constitute a "motor accident" is not, in my view, a matter for the MAS Assessor to determine. It is a matter that the CARS Assessor or a Court will determine in due course as indicated in the CARS Preliminary Conference report of CARS Assessor Harvey dated 10 October 2012. [9] Even if I am wrong here, there is no suggestion in the applicant's submissions on how the Assessor could have apportioned the alleged incidents which all occurred on the same day within minutes of each other. The apportionment provisions in the MAA Guidelines (clause 1.33-1.35 and 7.18) are clear. They require objective evidence of a pre-existing symptomatic permanent impairment or a pre-existing psychiatric diagnosis or condition. As indicated by the Assessor, she was able to apportion between the 2006 accident and the 2009 accident but there is nothing to suggest the psychiatric impairment within the 2009 accidents/incidents could be apportioned. Relevant legislation
In order to understand the submissions of the parties and my determination, it is necessary to set out a number of sections of the Act.
Section 3 defines a motor accident as follows: motor accident means an incident or accident involving the use or operation of a motor vehicle that causes the death of or injury to a person where the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during: (a) the driving of the vehicle, or (b) a collision, or action taken to avoid a collision, with the vehicle, or (c) the vehicle's running out of control, or (d) a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle's running out of control.
Section 3A is as follows: 3A General restrictions on application of Act (1) This Act (including any third-party policy under this Act) applies only in respect of the death of or injury to a person that is caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle and only if the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during: (a) the driving of the vehicle, or (b) a collision, or action taken to avoid a collision, with the vehicle, or (c) the vehicle's running out of control, or (d) a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle's running out of control. …
Chapter 3 of the Act, which is entitled "Motor accident injuries", includes the following section: 44 Medical Guidelines of Authority (1) The Authority may issue guidelines (MAA Medical Guidelines) with respect to the following: … (c) the assessment of the degree of permanent impairment of an injured person as a result of an injury caused by a motor accident, (d) the procedures for the referral of disputes for assessment or review of assessments, and the procedure for assessment and review of assessments, under Part 3.4.
Part 3.4 is contained within Chapter 3, and is entitled "Medical assessment". It includes the following sections: 58 Application (1) This Part applies to a disagreement between a claimant and an insurer about any of the following matters (referred to in this Part as medical assessment matters): … (d) whether the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%. … [emphasis added] 60 Medical assessment procedures (1) A medical dispute may be referred to the Authority for assessment under this Part by either party to the dispute or by a court or claims assessor. (2) The Authority is to arrange for the dispute to be referred to one or more medical assessors. … 61 Status of medical assessments (1) The medical assessor or assessors to whom a medical dispute is referred is or are to give a certificate as to the matters referred for assessment. (2) Any such certificate as to a medical assessment matter is conclusive evidence as to the matters certified in any court proceedings or in any assessment by a claims assessor in respect of the claim concerned. … (8) This section: (a) does not prevent a court from referring a matter again for assessment under this Part (as provided for by section 62), and (b) does not require a court to refer a matter again for assessment under this Part if the matter is not a medical assessment matter. (9) A certificate is to set out the reasons for any finding by the medical assessor or assessors as to any matter certified in the certificate in respect of which the certificate is conclusive evidence. … 62 Referral of matter for further medical assessment (1) A matter referred for assessment under this Part may be referred again on one or more further occasions in accordance with this Part: (a) by any party to the medical dispute, but only on the grounds of the deterioration of the injury or additional relevant information about the injury, or (b) by a court or claims assessor. … 63 Review of medical assessment by review panel (1) A party to a medical dispute may apply to the proper officer of the Authority to refer a medical assessment under this Part by a single medical assessor to a review panel of medical assessors for review. (2) An application for the referral of a medical assessment to a review panel may only be made on the grounds that the assessment was incorrect in a material respect. … (3) The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least 3 medical assessors, but only if the proper officer is 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. … [emphasis added]
During the hearing before me, reliance was also placed on cll 1.7-1.9 of the Guidelines for the Assessment of Degree of Permanent Impairment (the guidelines), which are given statutory force in relation to medical assessments by s 65 of the Act. They are as follows: Causation of injury 1.7 An assessment of permanent impairment is as prescribed under section 58(1)(d) of the Motor Accidents Compensation Act 1999. The assessment should determine the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident. A determination as to whether the claimant's symptoms and impairment are related to the accident in question is therefore implied in all such assessments. Assessors should be aware of the relevant provisions of the AMA 4 Guides, as well as the common law principles that would be applied by a court (or claims assessor) in considering such issues. 1.8 Causation is defined in the Glossary at page 316 of the AMA 4 Guides as follows: "Causation means that a physical, chemical, or biologic factor contributed to the occurrence of a medical condition. To decide that a factor alleged to have caused or contributed to the occurrence or worsening of a medical condition has, in fact, done so, it is necessary to verify both of the following. (a) The alleged factor could have caused or contributed to worsening of the impairment, which is a medical determination. (b) The alleged factor did cause or contribute to worsening of the impairment, which is a nonmedical determination". This therefore involves a medical decision and a non-medical informed judgement. 1.9 There is no simple common test of causation that is applicable to all cases, but the accepted approach involves determining whether the injury (and the associated impairment) was caused or materially contributed to by the motor accident. The motor accident does not have to be a sole cause as long as it is a contributing cause, which is more than negligible. Considering the question "Would this injury (or impairment) have occurred if not for the accident?" may be useful in some cases, although this is not a definitive test and may be inapplicable in circumstances where there are multiple contributing causes.
It can be seen that, pursuant to s 63(3) of the Act, the central question for the proper officer was whether he was satisfied that there was reasonable cause to suspect that the medical assessment was incorrect in a material respect, having regard to the particulars set out in the application of the insurer. It was with regard to the negative answer to that question that it was said on behalf of the insurer that a legal error had been committed. I turn to detail the submissions in support of that proposition. Submissions of the insurer
The insurer submitted that the proper officer committed legal errors amenable to judicial review. Whether they be characterised as jurisdictional errors or non-jurisdictional errors of law on the face of the record (namely, the reasons for the decision), it was said that I should quash the determination.
The nub of the submission was as follows. The proper officer failed to see that it was incumbent upon the medical assessor to disentangle those injuries that were caused by a motor accident from those injuries that were not. In other words, the proper officer failed to appreciate that it was an error for the medical assessor to have characterised the combination of incidents on the evening of 5 July 2009 as a motor accident causing injury, without excluding those incidents that were alleged assaults committed by Mr Ball that did not involve the use of a motor vehicle, and that led to injuries that were not, as a result, compensable pursuant to the Act.
It was said that, in undertaking his or her task, a medical assessor must have regard to: the words of s 58(1)(d) of the Act; the guidelines; and, as a result, the concept of causation at common law, as explained in various decisions of the High Court of Australia and the New South Wales Court of Appeal.
As for the first of these, it was said that, reading s 58(1)(d) in light of the definition of "motor accident" in s 3 and what is said about the application of the Act in s 3A, the medical assessor was required to undertake a close analysis of which injuries were caused by which sub-incidents (in other words, to undertake internal apportionment). And it was said that that discernment needed to be applied to the psychiatric injuries inflicted upon the claimant, as well as the physical ones.
Had the task of internal apportionment been properly performed by the medical assessor, and injuries arising from acts that were not motor accidents put to one side, the insurer submitted that the degree of permanent impairment of the claimant would in all likelihood not have exceeded 10%, thereby (almost conclusively) foreclosing damages for non-economic loss, by way of the operation of the Act.
Secondly, as for the reference to the guidelines by the proper officer, it was submitted that simply because they refer only to external apportionment, and say nothing of internal apportionment, does not mean that the latter did not need to be undertaken by the medical assessor.
Thirdly, it was said that decisions about the Act and its predecessor (the Motor Accidents Act 1988 (NSW)) demonstrate that the medical assessor was in error in not undertaking internal apportionment, and the proper officer was in error in not appreciating that that error on the part of the medical assessor necessitated a referral to a review panel. In particular, it was said that the definition of an injury that arises from a motor accident and that is compensable under the Act is (pursuant to the combined operation of ss 3 and 3A) a precise one that the courts have interpreted strictly.
Reference was made to decisions interpreting the definition contained in the statutory predecessor of the Act that adopted that approach, such as Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; (2005) 221 CLR 568 ("GSF") and Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; (2006) 228 CLR 529 ("GLG"). It was also said that cases such as Seltsam Pty Limited v Ghaleb [2005] NSWCA 208 and State of New South Wales v Burton [2006] NSWCA 12 to do with disentanglement of causative factors at common law, could inform the proper role of a medical assessor.
Furthermore, it was said that, in the broadly similar case of Allianz Australia Insurance Ltd v Gonzalez [2013] NSWSC 362 ("Gonzalez"), Adams J quashed the decision of a proper officer not to refer a matter to a review panel on the ground of jurisdictional error.
Fourthly, it was said that decisions about causation at common law could be relied upon to demonstrate that it was erroneous for the medical assessor not to undertake internal apportionment, and for the proper officer not to appreciate that error: see, for instance, Purkess v Crittenden [1965] HCA 34; (1965) 114 CLR 164. Determination
Much of what has been said on behalf of the insurer I accept.
I accept that the proper officer plays the role of gatekeeper, not ultimate decision maker, and that in that sense the test for review of a medical assessment should not be construed as being a strict one. I also accept that the test for the proper officer is not whether he or she is affirmatively satisfied that the medical assessment was incorrect in a material respect, having regard to the particulars set out in the application of the insurer, but rather whether the proper officer has reasonable cause to suspect that state of affairs: see generally Meeuwissen v Boden [2010] NSWCA 253.
I also accept that the clear words of s 58(1)(d) confer upon a medical assessor an obligation to make an assessment of causation: see generally Ackling v QBE Insurance (Australia) Limited and Anor [2009] NSWSC 881; and Allianz Australia Insurance Ltd v Girgis & Ors [2011] NSWSC 1424.
I do not accept, however, that the determination of the proper officer in this case demonstrates an error of law, whether jurisdictional or non-jurisdictional. That is so for the following reasons.
First, I do not accept that it is incumbent upon a medical assessor, in undertaking his or her functions pursuant to s 58(1)(d) of the Act, to attempt to engage in an intricate legal analysis of the meaning of causation. In particular, I do not consider that it was the intention of Parliament that a medically qualified assessor must refer to numerous decisions of the High Court of Australia and the New South Wales Court of Appeal about the concept of causation in order to understand his or her function when undertaking a medical assessment.
To explain my opinion by way of reverse analogy, nor would I lightly interpret a provision of an Act to do with the functions of a legally qualified person (for example, a costs assessor), as calling upon such a person to undertake a detailed analysis of medical matters, unless the statute were perfectly clearly to that effect.
Secondly, I also do not consider that it was the intention of Parliament that a medical assessor would be expected to engage in an analysis of the combined effect of ss 3 and 3A, each of which has its own complexities. To give but one example from the cases to which I was invited, it can be seen that in GSF (a decision of the High Court of Australia construing the question of causation in light of the provisions of a statutory predecessor of the Act) three judgments were delivered: that of McHugh J; that of the plurality; and that of Callinan J. I do not regard the proposition that a medical assessor is expected to read and understand such judgments, and to discern a ratio decidendi from them, as consonant with the purposes of the Act. Nor do I consider that it is consonant with the structure of the Act as a whole.
Such a task is the work of lawyers and judges, not medical assessors. Indeed, a five judge bench undertook that task in Zotti v Australian Associated Motor Insurers Ltd [2009] NSWCA 323 with regard to s 3 of the Act, without coming to a unanimous position.
Thirdly, it is to be remembered that a medical assessor is not determining the quantum of damages that will be paid to a claimant who has been the subject of a medical assessment that found that whole person impairment is greater than 10%. All that a medical assessment to that effect does is provide an essential pre-condition for compensation by way of damages for non-economic loss. The determination pursuant to s 58(1)(d) does not mean that there must inevitably be substantial damages for non-economic loss.
Fourthly, the decisions to which I was invited by the insurer demonstrate that the concept of causation at common law in the setting of the law of negligence can be very broadly understood as being founded upon material contribution. The certificate of the medical assessor is (almost) conclusive evidence that a motor accident or accidents materially contributed to whole person impairment greater than 10%. But to my mind that (almost) conclusive determination does not prohibit a trial judge from determining that other precipitants (such as acts that were not motor accidents causing psychiatric injury) were not only additional material contributors, but also were by far the more important material contributors. Again, the practical result could be that damages for non-economic loss could be very small, if not negligible.
Fifthly, the facts in Gonzalez may be readily distinguished. In that case there were two easily severable events: the motor accident and its aftermath. Here, the sub-events said to be motor accidents as defined and the sub-events said not to be motor accidents were thoroughly intertwined. I do not consider that the judgment in Gonzalez mandates the result for which the insurer contended, in light of the very different circumstances of this case.
Sixthly, turning to analyse the precise words used by the proper officer in the reasons given for the decision, I do not discern error in para [8]. To the contrary, I agree that it is not a matter for the medical assessor to determine whether an overarching incident, or particular sub-incidents within it, constitutes a "motor accident" as defined in the Act. As I have said, I do not interpret the Act as imposing a complicated legal function upon a person who is qualified within an entirely different area of learning.
As for para [9], its first sentence is objectively correct: the submission of the insurer before the proper officer did not indicate how an internal apportionment was to be undertaken with regard to psychiatric injuries said to have arisen from the trauma of one alleged overarching event that contained many sub-events.
I do not consider that there is error in the latter section of para [9]. As for the reference to the guidelines at [9], the statement of the proper officer is objectively true: the guidelines speak explicitly of what I have called external apportionment, but say nothing of internal apportionment. To my mind, whilst not determinative of the application for review, that was not an irrelevant factor for the proper officer to take into account in determining, pursuant to s 63(2) of the Act, whether there was reasonable cause to suspect that the medical assessment provided by the assessor was incorrect in a material respect, having regard to the particulars set out in the application.
The proper officer concluded by asserting that there was nothing to suggest how one could divide up the aetiology of a psychiatric injury that arises from one incident that contains many sub-events very closely connected in time, space, and by way of alleged wrongdoer. That statement is not erroneous: there was indeed no material to suggest how a medical assessor could undertake that function.
Seventhly and finally, I do not consider that the determination of the proper officer demonstrates that he took into account any irrelevant consideration in the way that term is understood in administrative law. Nor do I consider that the determination is inherently so grossly unreasonable as to be amenable to judicial review.
In short, neither an analysis of the Act; nor a broad analysis of the decision of the proper officer; nor a detailed analysis of the reasons given for that decision by the proper officer, establishes an error of law that should lead to judicial review. For those reasons, the summons must be dismissed. Ancillary determination
As against the possibility that I am wrong in the entirety of the foregoing analysis, and the proper officer did commit an error of law because the medical assessment was deficient or defective in not attempting to undertake internal apportionment, I indicate that I would have exercised my discretion to refuse judicial review. That is because there are, pursuant to the Act, a number of ways in which the insurer was and is able to impugn the medical assessment and protect its interests. In particular, it remains open to the insurer to persuade the trial judge that he or she should refer the matter for further medical assessment, pursuant to s 62(1)(b) of the Act. That seems to me a far more convenient and appropriate way for the insurer to impugn an allegedly deficient medical assessment than by seeking judicial review from this Court. Costs
Neither party submitted that costs should not follow the event. Orders
I make the following orders: 1. The summons of the plaintiff of 13 March 2014 is dismissed. 2. The plaintiff must pay the costs of the third defendant.

AAI Limited v Motor Accidents Authority of New South Wales [2015] NSWSC 912 | Case summary | Zoe

AAI Limited v Motor Accidents Authority of New South Wales

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