Allianz Australia Insurance Limited v The Estate of the Late Summer Abawi

Allianz Australia Insurance Limited v The Estate of the Late Summer Abawi - [2024] NSWSC 1245 - NSWSC 2024 case summary — Zoe

[3]

JUDGMENT

The issue in this judicial review proceeding is whether a decision of a review panel of the Personal Injury Commission (Review Panel) is tainted by an error of law on the face of the record or by a constructive failure to exercise jurisdiction, so as to warrant the setting aside of a certificate of determination dated 15 March 2024. The certificate was accompanied by a detailed statement of reasons for the Review Panel's decision.
The proceeding arises from a claim under the Motor Accident Injuries Act 2017 (NSW) (Act). The central issue in dispute, which is one of statutory construction, is whether particular injuries sustained by the first defendant in a motor vehicle accident are "threshold injuries" within the meaning of s 1.6 of the Act. Those injuries were lacerations to the first defendant's skin on her left and right wrists, which are believed to have been caused by the deployment of airbags in the first defendant's car. "Threshold injury" is defined in s 1.6(1)(a) of the Act as including "a soft tissue injury", an expression which itself is defined in s 1.6(2) of the Act.
The plaintiff insurer accepts that the lacerations were caused by the motor vehicle accident but challenges the Review Panel's conclusion and certification that the injuries are not "threshold injuries". In brief, the plaintiff contends that any injury to the skin which does not involve an injury to nerves is a "soft tissue injury" and therefore a "threshold injury" for the purposes of s 1.6.
The active parties agree (the second and third defendants filed submitting appearances) that the question for determination in this case is one involving the proper construction of s 1.6 of the Act "and whether or not an injury to the skin (or, at least such an injury which does not also involve injury to nerves) constitutes a "soft tissue injury" within the definition of the Act".
As will emerge, the issue of statutory construction is far from straightforward. This may explain why there are conflicting review panel decisions on the matter. Like some other complex cases of statutory construction, reasonable arguments can be advanced in favour of the competing constructions. Ultimately, however, I consider that the Review Panel's construction should be upheld, although not for all the same reasons as those relied upon by the Review Panel.

[4]

Summary of background facts

The first defendant (who is now deceased, for reasons unrelated to the accident, but whose claim is pursued by her Estate) was injured in a motor accident on 8 December 2017.
On 5 October 2022, following an assessment on the papers, Medical Assessor Dr Alan Home issued a certificate certifying that the first defendant's injuries caused by the motor accident were all "minor injuries" within the meaning of that expression as then defined in s 1.6 of the Act. (From 1 April 2023, that expression was replaced by the expression "threshold injury"; however, the definition itself was unchanged). Relevantly, Dr Home was not satisfied on the evidence before him that the first defendant suffered lacerations to her left wrist which were caused by the accident.
Dr Home's assessment was referred to the Review Panel under s 7.26 of the Act in respect of the assessment of the left wrist lacerations. No review was sought of the Medical Assessor's determination that the injuries to the first defendant's neck, back, right shoulder, left shoulder, right wrist and left wrist (save in respect of the lacerations) were each a minor (or threshold) injury. In the course of the review, the insurer accepted that the first defendant's left wrist laceration was caused by the accident but submitted that it was a "minor injury", noting that the first defendant refused treatment from NSW Ambulance personnel and declined to be taken to hospital.
The Review Panel was constituted by a Member, Ms Nolan, and two Medical Assessors, Drs Moloney and Couch. The Review Panel revoked the certificate issued by Medical Assessor Home and certified as follows: 1. The following injuries caused by the motor accident: • lacerations to the left wrist, and • lacerations to right wrist; are not THRESHOLD INJURIES for the purposes of the Act.
The plaintiff raises no objection to the fact that the certificate as issued appears to go beyond the terms of the referral to the extent that it relates to lacerations to both the left and right wrists.

[5]

Legislative framework summarised

In 2017, the Act introduced a new scheme for compensation and damages for injuries arising from motor accidents. No-fault statutory benefits were introduced for all such injuries which cover, to some extent, loss of earnings, as well as treatment and care expenses. Separately, and only where an injured person meets certain threshold requirements, there is a right to common law damages for non-economic loss and economic loss where fault is established. Notwithstanding that the legislation was very much an exercise in major law reform, it may be noted that it was not preceded by any detailed report recommending reform, such as a report by the Law Reform Commission or any extensive published review. This limits what otherwise might potentially be relevant extrinsic aids to construction.
As the then Minister for Transport said in the second reading speech concerning the Motor Accident Injuries Bill 2017 (NSW) (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 9 March 2017 at 1-2): The bill establishes a hybrid scheme. It delivers statutory benefits for injured road users with injuries other than soft tissue or minor psychological injuries, regardless of fault, while retaining the right to claim modified common law damages for those able to establish fault. … When the only injury is soft tissue or minor psychological injury, statutory benefits for loss of income and treatment and care will be available for up to six months. All other injured people who are not mostly at fault will be entitled to additional income support and treatment and care. Under division 3.3, people with moderate level injuries, up to and including 10 per cent whole person impairment [WPI] will receive regular income benefits of up to 95 per cent of pre-injury weekly earnings for the first three months after an accident and up to 80 or 85 per cent of pre-injury weekly earnings after that. The maximum weekly payment will be indexed and capped at 2½ times average weekly earnings, or $3,853.
A determination of whether an injury is a "threshold injury" has two primary functions in the Act. If a claimant's only injuries resulting from the motor vehicle accident are assessed as "threshold injuries" this means that the claimant is disentitled from: 1. receiving statutory benefits for loss of earnings and for treatment and care expenses incurred after 52 weeks (see ss 3.11 and 3.28 of the Act); and 2. obtaining damages (see ss 4.1 and 4.4 of the Act).
In 2022, the Act was amended to change the expression "minor injury" to "threshold injury", consistent with a recommendation by a statutory review of the Act (see further at [52] below). In his second reading speech concerning the Motor Accident Injuries Amendment Bill 2022 (NSW) (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 19 October 2022 at 8788), the Hon. Victor Dominello said: The bill will amend the Act to change the term "minor injury" to "threshold injury". Recommendation 38 of the statutory review proposed the Government consider an alternative term for "minor injury". The statutory review received feedback that the term trivialises an injury and the impact on an injured person and that using this term may cause unnecessary distress. The change in terminology does not change the substantive definition and operation of the relevant provisions…
Turning now to some relevant provisions in the Act as in force at the relevant time, it is well to refer at the outset to the objects of the Act, which are the subject of s 1.3. After noting that the purpose of the Act is to establish a new scheme of compulsory third-party insurance and provision of benefits and support relating to the death of, or injury to, persons as a consequence of motor accidents, several objects of the Act are set out in s 1.3(2). Relevantly, they include (emphasis added): 1. encouraging early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities; 2. providing early and ongoing financial support for persons injured in motor accidents; 3. keeping premiums for third-party policies affordable by ensuring that profits achieved by insurers do not exceed the amount that is sufficient to underwrite the relevant risk and by limiting benefits payable for soft tissue injuries and psychological or psychiatric injuries that are not recognised psychiatric illnesses; and 4. deterring fraud in connection with compulsory third-party insurance.
The plaintiff insurer places particular emphasis on the third of those objects. That particular object is unquestionably relevant, but given that all the stated objects reflect a range of conflicting or competing purposes, it is important to avoid permitting a purposive approach to dominate and drive the task of statutory construction, at the expense of considerations of text and context.
There is an express acknowledgement in s 1.3(3) that, in the application and administration of the Act: 1. participants in the third-party insurance scheme have shared and integrated roles with the overall aim of benefitting all members of the motoring public by keeping the overall costs of the scheme within reasonable bounds so as to keep premiums affordable and of promoting the recovery and return to work or other activities of persons injured in motor accidents; and 2. that both statute and the common law relating to the assessment of damages in claims made under the Act should be interpreted and applied in a way that acknowledges the clear legislative intention to restrict access to non-economic loss compensation for serious injuries.
Moreover, it may be noted that the Act contains its own "purposive interpretation provision" in s 1.3(4), which provides: In the interpretation of a provision of this Act or the regulations, a construction that would promote the objects of this Act or the provision is to be preferred to a construction that would not promote those objects.
Against the background of those general matters, it is desirable to note the definition of "injury" in s 1.4: injury means personal or bodily injury and includes - (a) pre-natal injury, and (b) psychological or psychiatric injury, and (c) damage to artificial members, eyes or teeth, crutches or other aids or spectacle glasses.
Section 3.1 provides that, if the death of or injury to a person results from a motor accident in New South Wales, statutory benefits are payable as provided for in the relevant Part of the Act, being Pt 3. This entitlement to statutory benefits does not depend on fault being established.
In brief, the relevant statutory benefits are twofold. First, an injured person has a statutory right to receive weekly payments as compensation for loss of earnings, the amount of those payments depending upon various "entitlement periods" starting from the date of the accident (it is unnecessary to descend into the complexities of the various "entitlement periods").
The second type of statutory benefits which an injured person is entitled to receive (without needing to establish fault) are benefits for treatment and care, as provided for in s 3.24. However, statutory benefits for the cost of treatment and care are not available where the treatment and care concerned "was not reasonable and necessary in the circumstances or did not relate to the injury resulting from the motor accident concerned" (s 3.24(2)).
As mentioned, however, the entitlement of an injured person to receive statutory benefits in the form of weekly payments or treatment and care expenses ceases after 52 weeks from the motor accident if the person's only injuries resulting from the motor accident are threshold injuries within the meaning of s 1.6 (see ss 3.11 and 3.28).
As noted above, the concept of a "threshold injury" is also relevant in restricting an injured person's right to seek damages. Part 4 of the Act applies to damages, whether awarded by a Court or assessed by the Personal Injury Commission (s 4.1). Damages cannot be awarded to a person in respect of a motor accident contrary to Pt 4 (s 4.2). The only damages that may be awarded are damages for economic loss as permitted by Div 4.2 and damages for non-economic loss as permitted by Div 4.3 (apart from an award of damages in an action under the Compensation to Relatives Act 1897 (NSW)). Significantly, no damages may be awarded to an injured person if the person's only injuries resulting from the accident are "threshold injuries" (s 4.4).
For those reasons, the issue of what constitutes a "threshold injury" assumes central significance. Section 1.6 of the Act provides: 1.6 Meaning of "threshold injury" (1) For the purposes of this Act, a threshold injury is, subject to this section, one or more of the following - (a) a soft tissue injury, (b) a psychological or psychiatric injury that is not a recognised psychiatric illness. (2) A soft tissue injury is (subject to this section) an injury to tissue that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes), but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage. (3) (Repealed) (4) The regulations may - (a) exclude a specified injury from being a threshold injury for the purposes of this Act, or (b) include a specified injury as a threshold injury for the purposes of this Act. (5) The Motor Accident Guidelines may make provision for or with respect to the assessment of whether an injury is a threshold injury for the purposes of this Act. (6) Subsection (5) does not enable the Motor Accident Guidelines to make provision for or with respect to the resolution of disputes by the Commission or medical assessor. Note - The rules of the Commission make provision for these matters.
It is notable that, subject to s 1.6 as a whole, only two types of injuries are threshold injuries, namely soft tissue injuries and a psychological or psychiatric injury that is not a recognised psychiatric illness. That proposition may need qualification depending on whether regulations have been made under s 1.6(4) either to include or exclude a specified injury from being a threshold injury for the purposes of the Act.

[6]

Review Panel's reasons summarised

After outlining some procedural matters, the evidence for the purposes of the review and the parties' submissions, the Review Panel noted at [28] that its review was conducted on the papers and without a medical examination because the first defendant was then deceased. The Review Panel then set out the relevant provisions in the Act, including the provisions relating to the making of regulations and guidelines.
At [37] the Review Panel acknowledged that the expression "threshold injury" has a dual disentitling effect, as summarised at [13] above.
The Review Panel discussed some previous review panel decisions which addressed the question whether an injury to the skin is a "minor injury", namely Nazari v AAI Limited t/as GIO (No 2) [2023] NSWPICMP 62 and Dhupar v AAI Limited t/as GIO [2023] NSWPICMP 99. I will return to discuss those decisions in due course.
The Review Panel then commenced its substantive analysis with reference to well-known authorities concerning the task of statutory construction, including Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69] and SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [37]-[38] and [47]. The Review Panel correctly stated that the starting point for ascertaining the meaning of a statutory provision "is the text of the statute having regard to its context and purpose".
The insurer submitted that a construction of the Act which resulted in a skin laceration being a "threshold injury" was consistent with both the objects of the Act and the Minister's statement in the second reading speech referred to at [12] above. In response to this submission, the Review Panel noted at [44] that there are numerous objects of the Act and that it was "a distraction" simply to focus upon whether or not a particular construction served the purpose of keeping premiums for third-party policies affordable by limiting benefits payable for soft tissue injuries, as referred to in s 1.3(2)(d) or the related provision in s 1.3(3)(c)(iii) (which acknowledges that in the application and administration of the Act "stability and predictability require consistent and stable application of the law"). The Review Panel added that there were "competing legislative purposes", which was relevant to the task of statutory construction having regard to what Gleeson CJ said in Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [5]-[6]. The Review Panel concluded that a "pre-occupation" with legislative purpose carried with it the danger that the text does not receive the attention it deserves. I respectfully agree with those observations.
At [47], the Review Panel described two further matters as being "important" in construing s 1.6(2), namely: 1. the "constructional choice" in ascribing meaning to the text in s 1.6(2) is "more exacting than liberal" because the Act is beneficial legislation; and 2. the change in statutory language from "minor injury" to "threshold injury" is presumed to reflect a change in legislative purpose and an "intent to have a real and substantial effect". The Review Panel added that the change in language "was intended to calibrate the interpretive focus from the severity of the injury to its function as a statutory precondition".
There is force in the plaintiff's challenge to the significance of these two matters but, for reasons which I will later explain, there are other sound reasons to uphold the Review Panel's construction.
The Review Panel found at [48] that s 1.6(2), while not exhaustive, is clearly intended to be limited in its scope to "injuries to the connective tissues of the musculoskeletal system". It reasoned at [49] that the "examples" contained in the brackets within s 1.6(2) qualify the words that appear before the brackets, namely "an injury to tissue that connects, supports or surrounds other structures or organs of the body". Those examples were described by the Review Panel as all being "connective tissue" which connect, support and help bind structures together by forming a framework and support for organs and the body as a whole. It added at [50] that the "common trait of each of these connective tissues is the role they uniquely play in orthopaedic injuries". The plaintiff contends that this construction of s 1.6(2) is erroneous.
The Review Panel stated at [51] that the regulations and guidelines supported the view that the focus of the definition was on injury to these "qualifying connective tissues typical of musculoskeletal injury". The Review Panel considered that this construction was also supported by the phrase "other structures" in s 1.6(2). At [52], in reasoning which is strongly criticised by the plaintiff, the Review Panel said: The phrase "other structure" in s 1.6(2) of the Act is important. The human body is a single organism, but it is made up of billions of smaller structures of four major kinds: cells, tissues, organs, and systems. A tissue is a group of many similar cells (though sometimes composed of a few related types) that work together to perform a specific function. An organ is an anatomically distinct structure of the body composed of two or more tissue types so arranged that together they can perform a special function. A system is an organisation of varying numbers and kinds of organs so arranged that together they can perform complex functions for the body. Major systems include the skeletal, muscular, nervous, endocrine, cardiovascular, lymphatic, respiratory, digestive, urinary, and the reproductive system. The relevant type of injury constituting the subject of s 1.6(2) is to a tissue that connects, supports, or surrounds other structures or organs of the body. The use of the word "other" suggests that "structure" in this statutory threshold definition is of the type earlier referred to in the definitional phrase, being its subject, "a tissue". Otherwise, the adjective "other" would be redundant. Hence, "organs", meriting separate mention in the statutory threshold definition, is to be understood as distinct from the "other structures" (viz., tissues), being the subject of the statutory threshold definition. Thereby, an organ is not "a tissue" for the purposes of the statutory threshold definitional phrase in s 1.6(2) of the Act.
The Review Panel concluded that no organ, including skin, is "a tissue" for the purposes of the definition in s 1.6(2). The plaintiff claims that this conclusion was based on an erroneous construction of s 1.6(2).
The Review Panel described a muscle as a "notable anomaly" because it consists of skeletal muscle tissue, connective tissue, nerve tissue, and blood or vascular tissue and is considered as an organ/structure of the muscular system. The Review Panel added at [53], however, that muscle "is explicitly included among the structural tissue exemplars to which [the] statutory threshold definition is directed". This led the Review Panel to reason as follows at [55], which reasoning is also challenged by the plaintiff: In this context, the phrase "an injury to tissue that connects, supports or surrounds other structures or organs of the body" is not amenable to the disjunctive reading of "or" employed by the Review Panel in Dhupar. There the Review Panel construed "or'', in our view, incorrectly, as creating alternative elements or functionally separate categories of tissue, that is, (a) tissue that connects, supports, or surrounds other structures, or (b) tissue that connects, supports or surrounds organs. The use of the co-ordinating conjunction "or" does not connote alternative categories of tissue. The relevant element of the tissue to which s 1.6(2) of the Act is directed is the function it fulfils: the connection, support or surrounding of other structures or organs of the body. The use of "or" in this context, works to connect one or more possible types of this tissue, rather than creating disparate ways of fulfilling the elements of the "tissue". In this way, "or" is used to connect the subjects of the definitional clause, "other structures or organs of the body", which are supported, connected, or surrounded by the same type of connective tissues qualified by the exemplars.
The Review Panel was critical of the decision in Dhupar. It said at [57] that the Panel there did not pay sufficient attention to the examples and exceptions in the definition, which had the effect of impermissibly expanding the type of tissue injury beyond the statutory warrant and produced the ultimate consequence that the definition included organs. To illustrate the point, the Review Panel referred to two organs, namely the heart and the gastrointestinal tract. It said that an injury to the heart bears no obvious relationship to the exceptions in the final clause of s 1.6(2), nor is an injury to the gastrointestinal tract occasioned by non-steroidal anti-inflammatory drugs readily compatible with the statutory threshold definitional exceptions.
While acknowledging that skin is comprised of fat, fibrous tissue and blood vessels (as stated in Dhupar), the Review Panel said that, like the heart and the gastrointestinal tract, "skin is not readily capable of meeting statutory threshold definitional exceptions". The Review Panel's ultimate conclusion concerning the proper construction of s 1.6(2) is expressed at [58] (emphasis added): The need for the application of the exceptions to befit the nature of the injury is an integral feature of the constructional choice necessary to promote and achieve the harmonious and coherent construction of the statutory provision. A threshold injury, formerly a minor injury, is a less severe musculoskeletal injury to that which is more serious. A serious musculoskeletal injury is one which occasions injury to nerves, or ruptured tendons, ligaments, menisci, or cartilage. The clear legislative intention of the statutory definitional provision was to limit access to ongoing statutory benefits and claims for common law damages for musculoskeletal injuries, which did not occasion this class of injury. A musculoskeletal injury is capable of meeting the statutory threshold exceptions so as to preserve an entitlement to ongoing benefits and damages. But an injury to an organ which invariably will be a soft tissue injury will not always be capable of satisfying this exception, such that several types of injury, most, serious, will be excluded. As the Minister's second reading speech reveals, that is not the intention of the scheme.
At [62], after affirming that the skin is the largest organ in the body and that "it connects, supports or surrounds other structures" by separating the body's internal and external environments, the Review Panel found that it was not "a connective tissue, per se". It noted that, in addition to connecting, supporting or surrounding other structures, the skin had other functions, including protecting the body from water loss and ultraviolet radiation.
It is well to set out [64] of the Review Panel's reasons, which encapsulates its core reasoning: To exclude an injury to the skin because it "connects, supports or surrounds other structures" is inconsistent with the meaning intended to be ascribed to this threshold's provision's phraseology when read in the statutory context, which is evidently concerned with the exclusion of soft tissue injuries sustained to the connective tissues of the musculoskeletal system, which do not involve injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage.

[7]

Consideration and determination

To avoid adding unduly to the length of these reasons, I shall address the parties' primary submissions in this section of the judgment.
Unsurprisingly, there was general agreement concerning the relevant principles of statutory construction. The parties placed different emphasis, however, on different elements of those principles. The plaintiff tended to emphasise (indeed, in my respectful view, over-emphasise) the need for a purposive approach, whereas the first defendant (correctly to my mind) placed greater emphasis on textual considerations, while not denying the importance of purpose and context in the task of statutory construction.
As the plurality (Kiefel CJ, Nettle and Gordon JJ) observed in SZTAL at [14] (footnotes omitted): The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.
The significance of the text in the task of statutory construction was given perhaps even more emphasis by the plurality (Hayne, Heydon, Crennan and Kiefel JJ) in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47] (footnotes omitted): This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.
More recently, in ENT19 v Minister for Home Affairs [2023] HCA 18; 97 ALJR 509 at [86]-[87], the majority (Gordon, Edelman, Steward and Gleeson JJ) reiterated the relevant principles as follows (footnotes omitted): [86]… The starting point for the ascertainment of the meaning of a provision is its text, while at the same time regard is to be had to its context and purpose. Of course, the statutory context of regulations includes the Act under which the regulations were made and are sustained. Context should be regarded at the first stage and not at some later stage and it should be regarded in its widest sense, including by reference to legislative history and extrinsic material. As Kiefel CJ, Nettle and Gordon JJ explained in SZTAL v Minister for Immigration and Border Protection: "This is not to deny the importance of the natural and ordinary meaning of a word ... Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected." [87] The context of the words, consideration of the consequences of adopting a provision's literal meaning, the purpose of the statute and principles of construction may lead a court to adopt a construction that departs from the literal meaning of the words of a provision. One such principle is that legislation must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. As expressed by Gageler J in SAS Trustee Corporation v Miles, "statutory text must be considered from the outset in context and attribution of meaning to the text in context must be guided so far as possible by statutory purpose on the understanding that a legislature ordinarily intends to pursue its purposes by coherent means". Where conflict appears to arise in construing an Act, "the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions", and this "will often require the court 'to determine which is the leading provision and which the subordinate provision, and which must give way to the other'". Ultimately, the task in applying the accepted principles of statutory construction is to discern what Parliament is to be taken to have intended.
The plaintiff did not deny the relevance of text in the task of statutory construction. But the thrust of its arguments on statutory construction focused predominately on purpose, with some reference also to context and text. This is reflected in the following parts of the plaintiff's written reply submissions:

"…context and purpose is the starting point for ascertaining the meaning of a provision";
"The plaintiff in these proceedings does not seek to advance what it would consider a desirable policy outcome … but rather submits that the construction adopted by the review panel does not accord with the context and purpose of the relevant provision and is inconsistent with the objects of the Act";
"…skin is not unambiguously excluded from being a soft tissue injury, and questions of context and purpose of the Act do, therefore, arise for consideration"; and
after stating that the plaintiff did not ask the Court to cure all potential unfairness or absurdity in the scheme, the plaintiff submitted that the Court "must, rather, consider the subject provision having regard to the purpose of the provision in the context of the Act".

I consider that the plaintiff's approach places undue emphasis on considerations of object or purpose. Of course, considerations of context and purpose are relevant, but not at the expense of paying close attention to the text.
I will now explain why there are several good reasons relating to the text of s 1.6(2) which support the Review Panel's construction.
First (and perhaps foremost), there is the significant fact that the Parliament saw fit to include in the definition of "soft tissue injury" a long list of examples of things which are tissue that connect, support or surround other structures or organs of the body. Skin is conspicuously omitted from that list. This notable omission is telling.
The parties were agreed that, as the Review Panel itself found, skin is both a tissue and an organ. Given the frequency with which skin injuries figure in motor accident claims, it might be thought that it would have been a simple matter to add "skin" to the list of parenthesised examples if it was intended to include such injuries in the definition. This is particularly so where the clear purpose of providing a detailed list of examples is to give greater certainty to what constitutes tissue for the purposes of the definition "soft tissue injury".
The frequency of skin injuries in motor accident claims is recorded in some of the material which the plaintiff provided in its post-hearing submissions. In a document titled "Review of Minor Injury Definition in the NSW CTP Scheme", published by the State Insurance Regulatory Authority (SIRA) in 2020 (SIRA Report), reference is made at page 31 to a separate report by the John Walsh Centre for Rehabilitation Research (John Walsh Report). The date of the John Walsh Report is unknown but it obviously pre-dates the SIRA Report. The earlier report found that 19% of the claims it had reviewed included a skin-type injury. That is a substantial figure. It identified those skin injuries as being both major and minor. Skin injuries involving bruising, abrasion, haematoma and superficial injury represented 16% of the reviewed claims. Of those 16% of claims, 37 were described as "minor injury" and 22 as "non-minor injury". Skin injuries involving a laceration, cut and open wound represented 3% of the reviewed claims. Of those 3% of claims, three were described as a "minor injury" and seven as "non-minor". Those figures led to the following conclusion in the SIRA Report: This indicates that the minor injury provisions do not prevent differentiating between minor and non-minor injury claims involving skin injuries. Also, the minor injury definition adequately deals with skin and scarring injuries. The number of disputes involving skin and scarring as an issue is low (less than 10). In practice, skin and scarring issues are not presenting a significant issue for the scheme at this stage. Nonetheless, SIRA will continue monitoring claims with skin injuries, disputes that relate to skin injuries and whether additional guidance is required at a later stage.
I will return later to address how the plaintiff contends that this and other parts of the SIRA Report support its construction. The present point being made is that this material indicates that, perhaps not unexpectedly, skin injuries are a common form of injury in motor accidents. The figures set out in the SIRA Report relating to the numerical magnitude of skin injury claims appear to refer to a period during or before 2020 (ie, whatever is the date of the John Walsh Report), but I see no reason not to rely upon those figures as being a general guide to the position in 2017 when the definition of "soft tissue injury" was first inserted in the Act.

[8]

The parties' post-hearing submissions

During the course of the hearing, the Court raised with the parties whether there were any extrinsic materials additional to the second reading speeches referred to by the plaintiff which were potentially relevant to the task of statutory construction. The plaintiff said that it had only pointed to the second reading speeches. Indeed, in its written submissions, the plaintiff contended that "external sources provide no clear answer to whether or not skin is in fact 'soft tissue'…" (at [49]).
The parties were given leave to provide a brief note if there were any additional relevant extrinsic materials. The plaintiff provided post-hearing submissions on 6 September 2024. It drew the Court's attention to the following additional material: 1. A report entitled "Statutory Review of the Motor Accident Injuries Act 2017", dated 22 September 2021 and prepared by Clayton Utz and Deloitte Touche Tohmatsu Pty Ltd, which contains several references to the "minor injuries" framework having two clear purposes, namely, to keep premiums affordable by limiting benefits payable for minor injuries and to deter fraud and exaggerated claims. That review also referred extensively to the SIRA Report, which is referred to at [52] above. 2. As mentioned, the plaintiff contends that the SIRA Report is of "substantial assistance" in the task of statutory construction, with particular reference to the following extracts from page 30 of that Report (emphasis added by plaintiff): Scarring and skin injuries Some stakeholders had concerns regarding skin and scarring injuries including the confusion around the anatomical definition of "skin", the medical definition of skin as an organ and whether a skin injury is a soft tissue injury according to the minor injury provisions. There were also concerns regarding consistent application of the minor injury provisions to skin and scarring related injuries. SIRA analysed skin and scarring injuries as part of the review. SIRA considered the most important issue to be that those who have a skin or scarring type injury are correctly identified as minor or non-minor and are provided appropriate treatment to recover. Section 1.6(2) of the Act provides that A soft tissue injury is (subject to this section) an injury to tissue that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes), but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage. The Act provides that Dispute Resolution Service medical assessors determine disputes about whether an injury caused by a motor accident is a minor injury. Dispute Resolution Service medical assessors are independent medical experts who conduct a thorough clinical examination of an injured person before making an assessment. While the Dispute Resolution Service medical assessors that were consulted generally agree that skin is an organ, they also agreed that in medical terms it is also soft tissue. These medical assessors generally considered that there are some skin injuries which should be minor and some which should be non-minor e.g. extensive burns SIRA considers: • It is incorrect to approach the minor injury definition of "soft tissue injury" by simply asking if there is an injury to an organ. • The correct approach is to determine if there is an injury to tissue "that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissue, fat, blood vessels and synovial membranes)" • If there is an injury to such tissue then it is a "soft tissue injury" unless it is an injury to "nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage" • This is subject to any specific inclusions or exclusions provided by the regulations. SIRA will continue to monitor skin and scarring injuries and promote application of the minor injury provisions consistent with the above. SIRA will consider further guidance where appropriate to address concerns or confusion around skin and scarring injuries. In its report, the John Walsh Centre for Rehabilitation Research ('JWCRR') found that 19% of the claims it reviewed included a skin type injury. There were both minor and non-minor skin injuries among this sample: Bruising, abrasion, haematoma, superficial injury (16%) • Minor Injury: 37 • Non-Minor Injury: 22 • Laceration, cut, open wound (3%) • Minor Injury: 3 • Non-Minor Injury: 7 This indicates that the minor injury provisions do not prevent differentiating between minor and non-minor injury claims involving skin injuries. Also, the minor injury definition adequately deals with skin and scarring injuries. The number of disputes involving skin and scarring as an issue is low (less than 10). In practice, skin and scarring issues are not presenting a significant issue for the scheme at this stage. Nonetheless, SIRA will continue monitoring claims with skin injuries, disputes that relate to skin injuries and whether additional guidance is required at a later stage.
With reference to the figure of 19% of claims having an element of skin injury, the plaintiff submitted that it was unlikely that very minor skin injuries (such as a small bruise, cut or graze) would be included in that figure, when such injuries would not affect entitlement to statutory benefits or damages. The Court was urged to infer the percentage of reported skin injuries would likely increase, perhaps dramatically so, if the presence of the most minor skin injury was to become a gateway to extended statutory benefits and entitlements and a right to bring a claim for damages.
The plaintiff also submitted that the SIRA Report assisted its construction on the basis that, although the terminology was changed in 2022 from "minor" to "threshold" injury, the balance of s 1.6 was left untouched. The plaintiff submitted as follows: The Court would infer that having regard to the SIRA Minor Injury Review, parliament considered it unnecessary to make further amendment to deal with skin injuries in the context of "soft tissue injuries", given that SIRA had already made it clear that both SIRA and its medical assessors were in agreement that skin did fall within the definition of soft tissue injury unless it fell into one of the exceptions, and that the scheme was working as intended with that construction of the legislation.
I do not accept those contentions. First, I do not accept that the percentage of reported skin injuries would likely increase, perhaps dramatically, if skin injuries are not included in the statutory definition. The plaintiff's case (which might fairly be described as a floodgates claim) overlooks other relevant statutory provisions which constrain the statutory entitlements and benefits which will apply where a claim is made for a minor skin injury alone or in conjunction with soft tissue injuries. Thus, such a claimant who clears the "threshold injury" hurdle will only be entitled to receive statutory benefits for treatment and care if the treatment and care falls within one or more of the twelve treatment and care services set out in the definition of "treatment and care" (s 1.4 of the Act).
Secondly, an injured person's entitlement to statutory benefits for treatment and care is limited by s 3.24(1)(a) to "the reasonable cost" of such treatment and care. Moreover, no statutory benefits are payable for the costs of treatment and care to the extent that the treatment and care concerned was not reasonable and necessary in the circumstances, or did not relate to the injury resulting from the motor accident concerned (see s 3.24(2)).
Thirdly, insofar as statutory entitlement to weekly payments under s 3.6 is concerned, it is necessary that the claimant has suffered "a total or partial loss of earnings as a result of the injury", at least during the first entitlement period (see ss 3.6(1) and 3.7(1)). Moreover, the claimant's entitlement to weekly payments is subject to the requirement that the claimant provide to the insurer certificates of fitness for work in accordance with s 3.15 of the Act. Further protection is provided to an insurer by s 3.14, which empowers an insurer who has commenced weekly payments of statutory benefits to require the injured person to provide to the insurer a medical certificate certifying the person's unfitness for work and information regarding the treatment or other services being provided to the injured person relevant to the injury (see s 3.14).
In the case of an injured person's right to claim damages (see Div 4.1 of Pt 4), it is necessary for the injured person not only to establish fault liability but also: 1. in the case of economic loss, past or future economic loss or deprivation or impairment of earning capacity (s 4.5); and 2. in the case of damages for non-economic loss, that injuries caused by the accident exceed the 10% whole person impairment threshold (s 4.11).
As to the plaintiff's reliance on the SIRA Report as an aid to construction, SIRA's view regarding the correct construction of s 1.6 has no particular relevance to the Court's task of statutory construction. As the majority noted in Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1; [2012] HCA 3 at [33], there is no basis at common law or otherwise for resorting to a ministerial statement about the effect of a law in force at the time of the statement in interpreting that law. In A2 v R; Magennis v R; Vaziri v R [2018] NSWCCA 174 at [500], the Court said that the same was true of "views expressed in a document published by a government department".
As the first defendant correctly pointed out, it is also notable that the extrinsic material referred to in the plaintiff's post-hearing submissions all post-dated the enactment of the Act in 2017, when the definition in s 1.6 commenced.
Finally, I consider that no particular significance attaches to the fact that, when the expression "minor injury" was replaced in 2022 by the expression "threshold injury", the Parliament did not otherwise amend the substance of the definition of "soft tissue injury". I would not infer from that omission that the Parliament was content to accept the correctness of SIRA's view, as expressed in the SIRA Report, that an injury to skin is included in the expression. It is also notable that the inconsistent constructions adopted by different review panels post-date the passing of the 2022 amendments (ie, Al-Khafaji v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMP 519 (19 December 2022), Nazari (19 January 2023) and Dhupar (20 March 2023)). Those decisions have highlighted the fact that, in the case of skin injuries, the definition of "soft tissue injury" has proved to be problematic and has produced contradictory outcomes.

This reasoning in Dhupar concerning skin and "other structures" was criticised at some length by the Review Panel in the present proceeding at [52] to [58]. In brief, those criticisms were as follows: 1. The human body has four major kinds of structures, namely cells, tissues, organs and systems. After defining what is "a tissue", "an organ" and "a system" (at [52]), the Review Panel stated that the use of the word "other" before "structures" suggests that "structure" as used in this definition refers back to the subject of the definition, namely "a tissue". 2. The separate mention of the term "organs" differentiates organs from "other structures" (being "tissues"). Thus an organ is not "a tissue" for the purposes of the definition (at [52]). 3. Muscles are a "notable anomaly" because they are "an organ/structure of the muscular system", but are explicitly included in the parenthesised examples in s 1.6(2) (at [53]). 4. This anomaly is an important indication of the Parliament's intention to create "a bespoke class or type of soft tissue injury", being "a soft tissue injury to the connective tissue of the musculoskeletal system", and not "a working definition against which each soft tissue comprising the human anatomy is to be assessed" (at [54]). 5. It was wrong for the Dhupar Panel to give a disjunctive meaning to the word "or" in the phrase "other structures or organs of the body". The "co-ordinating conjunction 'or'" does not connote alternative categories of tissue. Rather, the use of "or" works to connect one or more possible types of tissue as opposed to creating disparate ways of fulfilling the elements of the "tissue". Accordingly, the term "or" connects the subjects of the definitional clause, being "other structures or organs of the body" which are supported, connected or surrounded by the same type of connective tissues qualified by the parenthesised examples (at [55]). 6. The construction adopted in Dhupar impermissibly expands the type of tissue injury so as to include organs, such as the heart. In addition to being an organ, the heart is also a muscle which contains blood vessels, fat and fibrous tissues and supports other structures and organs in the body (in the sense of providing life support); but an injury to the heart bears no obvious relationship to the exceptions at the end of the definition (ie, it could not be an injury to nerves or involve a complete or partial rupture of tendons etc). The same may be said of the gastrointestinal tract (at [57]). 7. Similarly, although skin is comprised of fat, fibrous tissue and blood vessels, it is not readily capable of meeting the statutory threshold definition exceptions, even though an injury to skin "invariably" involves an injury to nerves unless the injury does not cause pain (at [57]). 8. A harmonious and coherent construction of the definitional provision involves a threshold injury being a less severe musculoskeletal injury to one which is more serious. A more serious musculoskeletal injury is one involving injury to nerves or ruptured tendons etc. The clear legislative intention was to limit access to ongoing statutory benefits and claims for damages for musculoskeletal injuries not involving injury to nerves or ruptured tendons etc (at [58]). 9. It was not the legislative intention to exclude serious injuries to an organ which invariably will be a soft tissue injury but will not always be capable of satisfying the exception (because there is no injury to nerves or ruptured tendons etc) (at [58]).

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (10 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (14)

Cited By (2)