Allianz Australia Insurance Ltd v Gonzalez

Supreme Court of NSW|2015-06-01|Before: Campbell J

Background to this dispute

The most unfortunate circumstances giving rise to Mrs Gonzalez's claim for damages are not really in dispute. Before recounting them, it is important to point out that the largest part of Mrs Gonzalez's claim is for mental harm. Fortunately, the physical injuries received in the collision were relatively minor.
Mrs Gonzalez was 44 years of age at the date of the motor accident. She was married to a self-employed electronic technician and the mother of 4 adult children. She had a past history of depression. She had undergone spinal surgery for a disc lesion in December 2006 and was still cautious about the condition of her back in September 2008.
On the evening of 23rd September 2008, she drove to Warwick Farm Railway Station to pick up her son from a train. He had let her know he would be running late and she parked in the parking space in the station car park. Dr Virgona of the Medical Assessment Service (Annexure H; affidavit R.J. McCourt affirmed 6 November 2014; CB 62), recorded the circumstances as follows: She stated that a car then reversed and crashed into the back of her car. She didn't hear it coming. She stated that when it happened she "went into shock, was shaking, couldn't undo my seatbelt I didn't know what to do, started thinking about my back, I didn't know if I was in pain or nervous. I wanted to call the police but couldn't remember my number or how to unlock the phone. I don't remember how I got out of the car." She stated that she didn't know when she got out of the car, but she was shaking. The other driver came over to her car. She then stated that she called the police, was asked if she was hurt and told them "I don't know how I feel". She was concerned because she'd recently had back surgery. The woman told her she would send an ambulance. She stated that while this was happening, the other driver was swearing at her, didn't want her to call the police. He was a p-plater. She didn't know what to say to him. She stated °I wasn't so concerned with the car, but concerned about my back. It took a long time to recover from that operation." She stated that he continued yelling at her, and, soon after, 5 or 6 other men arrived. She stated "I was in shock, never been in a situation like that before. They all started swearing at me, saying I had to say it wasn't him but someone else driving. They were swearing, and talking in their language (Asian)". The men were standing in a circle around her, again telling her to say someone else was driving otherwise he'd lose his licence. She told them she was concerned about her back, that she'd had surgery, but he told her she looked all right She stated "One was really agitated, swearing and one kept going to his car, like he was looking for something. I feared he was looking for something to kill me". She stated that her son then arrived, hugged her and asked if her back was all right. The ambulance arrived and she was put inside and checked. They were asking her lots of questions but she felt "numb, didn't know what I was feeling". She then started to think about her son, being outside "'[with] all those men. My son is not a violent man". The police then arrived and took a statement from her and the others. She then stated "I couldn't stop thinking about when he crashed into my car. I'm going to be sick again, not be able to get better." Then, in tears, she stated "At the same time I was fearing, so scared, didn't want to be there". When asked why she was so upset now, she stated "I'm not passed the whole thing, I'm reliving it. I go out thinking I'm going to see their faces again". She then said "When I'm in the car, reversing, my stomach gets so tight. I want it to be over, not be like this anymore". She stated that her husband came, picked her up and she went home.

Assessment of a medical dispute

As Mrs Gonzalez is a person who has been fully employed as a mother and homemaker, the most significant part of her claim, if any, is likely to be damages for non-economic loss. There is no dispute that following (I am being deliberately neutral) the events of 23rd September 2008, Mrs Gonzalez suffers from Post-Traumatic Stress Disorder and Major Depression. The real subject matter of the dispute between the parties is the cause of Mrs Gonzalez's undoubted psychiatric injury. Allianz's position is, and has always been, that the subsequent harassment and intimidation caused Mrs Gonzalez's mental injury, and the Act does not apply to that injury by dint of s 3A.
Accordingly, it disputed that Mrs Gonzalez's degree of permanent impairment was the result of an injury caused by the motor accident, i.e. the collision, per se. If it was right about this, Mrs Gonzalez had no entitlement to damages for non-economic loss and I interpolate, probably, no substantial claim in respect of any other head of damage.
As the parties were not in agreement about the degree of permanent impairment resulting from injuries caused by the accident, it was necessary to refer their dispute about that matter for assessment by the Motor Accidents Medical Assessment Service: ss 58, 60, 61 and 132 of the Act.
This "medical dispute" was referred to Dr Leslie Lim, medical assessor, for assessment. In his certificate of 21st November 2001, Dr Lim certified that Mrs Gonzalez's psychiatric injury "caused by the motor accident give rise to a permanent impairment which is greater than 10%", in fact, 17%. (McCourt affidavit, Annexure J; CB 70, ff). In making that assessment, Dr Lim received a history very substantially the same as that later received by Dr Virgona ([8] above). He concluded as follows: This assessment has found the claimant to be suffering a Posttraumatic Stress Disorder (DSM - IV 309.81) and a co-morbid Major Depressive Disorder, Single Episode, Chronic (DSM - IV 296.2) from the subject motor accident. Although the accident was a low-speed accident, the psychiatric damage was done by the behaviours of the driver and his friends. Through their behaviours at the accident and the day after the claimant felt fearful for her life.
Allianz's application for a review of Dr Lim's assessment by a review panel under s 63 of the Act was refused by the proper officer, and Allianz sought judicial review of the medical assessment certificate in this Court.

Allianz Australia Insurance Limited v Gonzalez [2013] NSWSC 362

Allianz's application for judicial review was successful before Adams J, from whose decision there was no appeal. Allianz argued before Adams J that the subsequent intimidation and harassment by the driver and his associates, which was continued over the following day by telephone, constituted a novus actus interveniens, and the conditions of application of the Act to Mrs Gonzalez's injury imposed by s 3A of the Act could not be satisfied (Adams J [13]). Mrs Gonzalez argued that, on Dr Lim's assessment, her psychiatric injures were brought about by the collision, as evidenced by the feeling of shock she then felt. The subsequent conduct exacerbated the original injury. Moreover, the subsequent intimidation and harassment may be viewed as a dangerous situation caused by the collision, within the meaning of s 3A(1)(d).
After referring to Allianz Australia Insurance Limited v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568, and analysing the various judgments, Adams J said (at [20] - [21]): [20] Applying this approach in the present case would, as I think, lead to the rejection of the case advanced by Ms Gonzalez. [21] The question is not so much whether the conduct of Mr Dang and his friends, outrageous and disgraceful as it was, caused Ms Gonzalez's psychiatric injuries, but whether they were caused in the use or operation of the vehicle and, temporally, during the events specified in paras (a), (b), (c) and (d). As to the last of these, the driving of the vehicle did not, as it seems to me, cause the "dangerous situation". Rather, that was caused by the decision of the driver to collect his friends and intimidate Ms Gonzalez. The "but for" test in this context does not identify more than a necessary as distinct from a sufficient link in the causal chain. In March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 Mason CJ pointed out (at 517) that, for its usefulness, "the 'but for' test does not provide a satisfactory answer in those cases in which a superseding cause, described as a novus actus interveniens, is said to break the chain of causation which would otherwise have resulted from an earlier wrongful act". See also Adeels Palace Pty Ltd v Moubarak [2009] HCA 48 ; (2009) 239 CLR 420 and Strong v Woolworths [2012] HCA 5 ; (2012) 246 CLR 182. His Honour went on to review subsequent authorities including the judgment of Hodgson JA (with whom the other members of the Court agreed) in Nominal Defendant v Hawkins [2011] NSWCA 93; 58 MVR 362. Adams J concluded (at [24]) that although "the closeness of the link between the incident and the driving is very much a matter of fact and degree … it must be "very substantial" in order to satisfy the requirements of predominance, immediacy and proximity" integral to the operation of s 3A. His Honour decided (at [26]) "that the conclusion is inevitable that Mrs Gonzalez's psychiatric injuries do not satisfy the requirements' of [the Act]." His Honour pronounced orders in the nature of certiorari and mandamus and made the following declaration: Declare that the injuries which were the subject of the Certificate of Dr Lim are not within the operation of the Motor Accidents Compensation Act 1999.
This declaration binds the parties and me. However, it is not said by the parties, in particular Allianz, that the order finally determines Mrs Gonzalez's claim or renders the claims proceedings before the Medical Assessment Service and the Motor Accidents Claims Assessment and Resolution Service nugatory.

The assessment of Dr Virgona

Adams J made an order remitting the matter to the Motor Accidents Authority for redetermination and the medical dispute was referred to Dr Virgona for re-assessment. He was, of course, provided with a copy of the reasons of Adams J and a further, and more detailed, account provided by Mrs Gonzalez in an affidavit sworn on 6th August 2012 in the proceedings before Adams J. However, the history I have recorded above (at [8]) was obtained by Dr Virgona directly from Mrs Gonzalez. Dr Virgona recorded that he regarded the history recounted in the affidavit as more or less consistent with the history he received; likewise the history recorded by Dr Lim. Dr Virgona expressed the following opinion as to diagnosis and causation: The claimant was in a minor motor vehicle accident in which she suffered soft tissue injuries. These have led to some minor impairments of functioning. She developed a serious psychiatric reaction to the perceived threat to her and her son by the driver and his friends, resulting in the well-documented Post Traumatic Stress Disorder (PTSD). She also developed a depressive reaction to the impact of the PTSD on her life. She was vulnerable to the development of the depressive condition due to her significant past history. … In summary the claimant is suffering Chronic PTSD and Major Depression, both of which developed independently of the motor accident. … The following injuries WERE caused by the motor accident: Nil psychiatric disorder related to the motor accident; …. Of the injuries referred to me for assessment, none were related to the motor accident. An assessment to the degree of permanent impairment is, therefore, not required. Dr Virgona issued a certificate in the terms of the last paragraph quoted.
There has been no application for review under s 63 of the Act, or judicial review of Dr Virgona's certificate.

Proceedings before the Motor Accident Claims Assessment and Resolution Service

Mrs Gonzalez's claim was referred for assessment by the Motor Accident Claims Assessment and Resolution Service: s 90 of the Act. The Principal Claims Assessor arranged for her claim to be assessed by Claims Assessor Margaret Holz, a member of the Bar (s 93 of the Act).
In accordance with what I was informed by counsel is the usual practice, on 30th June 2014, the claims assessor held a preliminary assessment conference, essentially a directions hearing, to check the readiness of the parties to proceed to a final assessment conference. Each party was represented by counsel, instructed by their solicitor. At the conference, counsel for Mrs Gonzalez applied for the claims assessor to refer the medical dispute for assessment again under s 62(1)(b). The claims assessor recorded what happened in her assessment conference report (CB p 107) in the following terms: c. The Claimant served on Friday last a report from treating psychiatrist Dr Sringeri of August 2012, obtained from amongst the GP's notes that came into possession of her solicitors on 30 April 2014. The notes themselves had not been served. They were handed over at the assessment conference, but it is noted that they refer to attendances only up to May 2013. There are no other notes from Dr Sringeri. d. On the basis of Dr Sringeri's opinion, Mr Jones asked me to exercise my discretion to refer the claim to MAS for a further assessment pursuant to s 62(1 )(b). That application was opposed by the Insurer, although no grounds were given for opposing the referral. Having considered the matter, I have determined that this is an appropriate matter to exercise my discretion to refer. I will provide a letter to the Proper Officer of the Medical Assessment Service setting out my concerns.
I should record that in my view, nothing for present purposes, turns on the claims assessor saying that no grounds were given for Allianz's opposition. It is sufficient that the application for referral again was opposed by Allianz. Perhaps the claims assessor did not find the submissions advanced on behalf of Allianz very helpful. The claims assessor adjourned the assessment conference to permit the further medical assessment to be undertaken.
On 4th July 2014, the claims assessor promptly provided the foreshadowed draft letter to the proper officer to the parties for comment.
Much complaint is made about this letter by Allianz, however, I do not propose to set it out in full. I set out relevant portions below (at [32]-[35]).
Chapter 15 of the Medical Assessment Guidelines applies to referrals for assessment again by a claims assessor under s 60. Clause 15.4 permits the claims assessor to direct a party to make the application. Here the claims assessor directed Mrs Gonzalez's solicitors to make the application. Such an application must attach, in the circumstances of the present case, "a copy of a signed request or direction by a [claims] assessor if available". And it is abundantly clear that the claims assessor intended her draft letter to stand as her "signed request".
The letter, in draft form, is at CB 109 ff. The claims assessor sets out the history of the matter in considerable and careful detail. Some of the criticism directed to its content was that the claims assessor had "descended … into advocacy". It was said that she was "trying to point out what she sees as being those parts of the histories that favour a conclusion of giving greater consideration to the shock experienced by the claimant immediately after the collision". Insufficient attention was said to have been paid to emphasising Dr Virgona's conclusion "that there was no significant psychological effect of the collision itself, but the only the significant causative element in the development of the first defendant's psychiatric conditions was the conduct of the driver and his friends later and separately" (14.15 - .20T).
In response to the claims assessor's requests for "comments", (CB 21), Allianz, by its solicitor, respectfully submitted the letter was outside the scope of the claims assessors jurisdiction; that the claims assessor had put herself in the position of an advocate; and that she was seeking to direct the medical assessor "in relation to the matters which were entirely within the province of the medical assessor" (CB 27).
So far as the submission that the claims assessor had adopted the role of an advocate goes, there is no bias ground, apprehended or otherwise, advanced in the summons and Mr Rewell SC expressly disavowed that matter as a basis for judicial review: 16.45T. Rather he said: "[the claims assessor has] descended into the arena because she thinks that there's questions to be answered that she wants answered". It was submitted that the questions "appear to be suggestive of an outcome".
As apprehended bias is not advanced as a ground of jurisdictional error, I will ignore the advocacy about "advocacy".
To deal with Allianz's opposition to the form of her request, the claims assessor made a procedural decision on 12th August 2014. The claims assessor said in part (at CB 32-33): 10. I have not been directed to any case law and indeed, the insurer concedes that it has not been able to source any authority referring particularly to Section 62(1) (b) and how procedurally such an application can proceed. 11. I reject the insurer's submission that my role is restricted to a simple referral for assessment, I have the discretion to refer the matter for further assessment. Although my discretion is not circumscribed by the matters set out in s 62(1)(a), there must be a purpose for me to exercise my power to refer. It is appropriate that I state what the purpose is and the issues that have given rise to the referral when sending the matter back to MAS. To do otherwise risks the matter being the subject of further reviews or administrative challenges. 12. The issues in this matter are complex, the Claimant claiming to have suffered an impact and, subsequently, an assault, separated by only minutes. The first event, the impact, falls within the ambit of the Motor Accidents Compensation Act. The second, the assault, does not, according to the decision of Justice Adams in Allianz Australia Insurance Ltd v Gonzalez [2013] NSWSC 362. 13. There is an issue between the parties as to the Claimant's whole person impairment arising from the accident, that is, from the impact. In my view, the questions that I have proposed delineate what that issue is and direct the attention of the MAS assessor to the issue that has given rise to the referral. CONCLUSION 14. As indicated, I reject the Insurer's submission that I should not send a letter to the Proper Officer. I also reject its submission that I ought not pose questions for the assessor to consider. There being no alternative formulation suggested by the insurer for the questions that should be posed, I propose to forward the letter to MAS as drafted.
Allianz argues that this is effectively the decision of the claims assessor which it impugns. And I note that its summons was filed on 6th November 2014. If it is correct, the proceedings have been commenced within the time fixed by the rules. I record that Mrs Gonzalez took no point about delay.

The content of the "signed request"

The claims assessor's letter was directed to the proper officer. This accords with s 62(1B), which provides that referral again "is to be by referral to … the proper officer of the Authority". Presumably, this facilitates efficient management within the Motor Accidents Authority.
I repeat, the claims assessor set out in careful detail the history of the medical assessment process. She referred to the accident of 23rd September 2008, saying "it does appear that this incident has caused some physical injury, and, potentially, a psychiatric injury to the claimant" (my emphasis) (CB 109). The claims assessor summarised the subsequent harassment and intimidation saying, "[t]here seems to be little issue that she has developed a psychiatric condition, which Assessor Lim assessed to be equivalent to a 17% whole person impairment" (my emphasis). Reading the "request" fairly and as a whole, there is no doubt the "little issue" observation relates to the subsequent harassment. She noted that Assessor Lim "did not differentiate between the stress caused to the claimant by the impact and that caused" by the subsequent events. The claims assessor pointed out that Assessor Lim found that the psychiatric damage "was done" by the subsequent events. She then went on to carefully set out the history recorded by Dr Virgona and the account given by the claimant in the affidavit sworn on 6th August 2012.
The assessor recorded the opinion of the treating psychiatrist, Dr Sujaya Sringeri as follows (CB 111): "Mrs. Carmen Gonzales [sic] presented with a history of Post Traumatic Stress Disorder and Major Depressive Disorder of severe nature. The episode was precipitated by the traumatic incident involving her car was hit (sic) by another car and she was also threatened by the driver and his passengers. In my opinion, the trauma she experienced is the precipitating and well as perpetrating factor for his (sic) PTSD and Major Depression." It should be recalled that the receipt of this report was trigger for the decision under s 62(1)(b).
The claims assessor made the following observations and posed the following questions: This report was not available to the parties until recently and was not provided to either MAS assessor. The information contained in the report of Assessor Virgona and in the affidavit of the claimant, together with the opinion expressed by the treating doctor, Dr Sringeri, does provide more information concerning the claimant's psychological response during and immediately following the incident and prior to the arrival of the group of young males. Any psychological response to the accident itself is within the scope of the CTP policy. Having regard to the foregoing, I would be assisted in the determination of the matter if the MAS assessor were to respond to the following questions: Questions for the Assessor (i) Did the impact itself (as opposed to the actions of the group of young males) give rise to any psychiatric injury? If so, what was the injury and was it permanent? (ii) If the answer to (i) above is yes, was that psychiatric injury aggravated by the actions of the group of young males? (iii) Would the claimant have experienced the same psychiatric reaction to the group of young males had she not have just been involved in the motor vehicle accident, with whatever (if any) psychiatric symptoms it caused? (iv) Having regard to Chapter 1.9 of the Permanent Impairment Guidelines, is factual causation made out in relation to any psychiatric impairment arising from the actual impact? (v) Having regard to Chapter 1.9 of the Permanent Impairment Guidelines, is medical causation made out in relation to any psychiatric impairment arising from the actual impact? (vi) If the answer to (iii) above is yes, (i.e. the harassment is a separate and psychologically unrelated stressor), then what (if any) is the WPl under the PIRS for any permanent psychiatric injury caused by the impact? (vii) If the answer to (iii) above is no, (i.e. the psychological reaction to the harassment was wholly or partially caused or contributed to by any psychological vulnerability arising from the accident) then what (if any) is the WPl under the PIRS for any permanent psychological injury arising from the totality of events.
I wish to record that on my reading there was no lack of balance either in the claims assessor's summary of the previous medical assessment process or in her identification of the issues. It may be said, as Allianz does, that she has omitted to say that Dr Virgona related the whole of Mrs Gonzalez's psychiatric condition to the subsequent events of harassment and intimidation and expressed the opinion that no part of the psychiatric condition was due to the collision. However, I would regard this as a mere oversight. Any medical assessor reviewing the matter could not but be aware of that, and doubtless in the usual course that matter would be pointed out to him or her by Allianz; Cl 15.6 of the Guidelines expressly preserves Allianz's right to lodge a reply in accordance with Cl 3.15

Relevant statutory provisions

Section 58 of the Act is in the following terms: (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): (a) whether the treatment provided or to be provided to the injured person was or is reasonable and necessary in the circumstances, (b) whether any such treatment relates to the injury caused by the motor accident, …. (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%. (2) This Part also applies to any issue arising about such a matter in proceedings before a court or in connection with the assessment of a claim by a claims assessor.
Section 60, inter alia, provides: (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.
"Medical dispute" is defined by s 57 of the Act as meaning "a disagreement or issue to which this Part applies" (my emphasis). By s 61(2) a medical assessment certificate "is conclusive evidence as to the matters certified" in any assessment of the claim by a claims assessor.
Section 62 provides as follows: (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) …. (b) by a court or claims assessor. (1A) … (1B) Referral of a matter under this section is to be by referral to the member of staff of the Authority who is designated by the Authority for the purpose (in this Part referred to as the proper officer of the Authority). (2) A certificate as to a matter referred again for assessment prevails over any previous certificate as to the matter to the extent of any inconsistency.

Consideration of the legality of the claims assessor's decisions-applicable principles

The provisions central to the resolution of the issues in the present case are ss 58 and 62. Section 62, as it applies to referrals for assessment again by courts or claims assessors was considered by the Court of Appeal in Motor Accidents Authority of New South Wales v Mills [2010] NSWCA 82; 78 NSWLR 125. That decision may be taken as authority for the proposition that when a "medical assessment matter" (as defined by s 58) is referred again for assessment, the whole matter is required to be referred. In particular, the s 58(1)(d) matter, the subject of the present dispute, expresses a composite idea which may not be unpacked: at 138[74] Giles JA (with whom Tobias JA and Handley AJA agreed) said: The original matter referred had both the elements of causation and of degree of permanent impairment. The section should be understood in accordance with its terms, that is, referral of that matter again. In accordance with the scheme both elements were for the medical assessor, and the court could not decide them. (My emphasis) Handley AJA at 141 [98] said: Thus when s 62(1) provides that the medical assessor "is … to give a certificate as to the matters referred for assessment under this Part" (ie Pt 3.4), that certificate must deal with the degree of permanent impairment caused by the motor accident. The degree of any other permanent impairment is not a matter referred for assessment, although it may have to be identified in order to be excluded from the assessment. (My emphasis) From the sentence I have emphasised from Handley AJA's judgment, it is apparent that in some cases, it may be necessary, doubtless where that is medically possible, for the permanent impairment caused by the motor accident to be separated from permanent impairment caused by something else, or from permanent impairment caused by the motor accident and something else. That may be relevant here.
Giles JA spoke of the purpose of Part 3.4 of the Act which deals with medical assessment, and in particular of s 62 in the following terms: (at 137 [70] - [71]): There was strong emphasis in the Act on leaving for assessment under Pt 3.4 whether there was the degree of permanent impairment necessary for an award of damages for non-economic loss, meaning permanent impairment as a result of the injury caused by the motor accident. Reference to the legislative history, described in Murdoch v Davis [2005] NSWCA 466 ; (2005) 55 MVR 415, confirms this. Save where a certificate was vitiated by procedural unfairness, the court was excluded from the assessment, and the medical assessor's certificate was conclusive. There was a safety valve, in the power to refer again for assessment under s 62(1). For the purpose of deciding whether to refer again, the court could enter into the degree of permanent impairment, including its causation by the motor accident. But the court could not itself determine the matter of whether the degree of permanent impairment as a result of the injury caused by the motor accident was greater than 10%. On one view, all the court could do was find sufficient doubt in the medical assessor's assessment to warrant referral again; if the court could make a positive finding, it could do so only as a basis for deciding that there should be referral again. (My emphasis). From the emphasised portion I deduce that a degree of doubt about the correctness of the assessment is sufficient to engage the discretion to refer again. Obviously this is far from a complete statement of all the circumstances which would justify an exercise of this discretion.
In Trazivuk v Motor Accidents Authority of New South Wales [2010] NSWCA 287; 57 MVR 9 Giles JA (in dissent, but with respect, the principle is not in doubt) said "the discretion conferred by s 62(1)(b) has no constraints and is thus limited only by "the scope and purpose of the instrument conferring it": Swan Hill Corporation v Bradbury (1937) 56 CLR 746 per Dixon J; Trazivuk at [77]. I think it worth setting out the whole of the passage from Swan Hill Corporation at 757 - 8: The reason for leaving the ambit of the discretion undefined may be that legislative foresight cannot trust itself to formulate in advance standards that will prove apt and sufficient in all the infinite variety of facts which may present themselves. On the other hand, it may be because no general principles or policy for governing the particular matter it is desired to control are discoverable, or, if discovered, command general agreement. Whatever may be the cause, the not infrequent result has been a general embargo or fetter upon the exercise of the individual's private or proprietary rights, unless he obtains the sanction of the public authority. When a provision of this kind is made, it is incumbent upon the public authority in whom the discretion is vested, not only to enter upon the consideration of applications for its exercise, but to decide them boná fide, and not with a view of achieving ends or objects outside the purposes for which the discretion is conferred. The duty may be enforced by mandamus. But Courts of law have no source whence they may ascertain what is the purpose of the discretion, except the terms and subject-matter of the statutory instrument. They must, therefore, concede to the authority a discretion unlimited by anything but the scope and object of the instrument conferring it. This means that only a negative definition of the grounds governing the discretion may be given. It may be possible to say that this or that consideration is extraneous to the power, but it must always be impracticable in such cases to make more than the most general positive statement of the permissible limits within which the discretion is exercisable and is beyond legal control. (My emphasis.)
Given the nature of the arguments advanced on behalf of Mrs Gonzalez, it is important to bear in mind that not every administrative act or decision is reviewable in the sense of being amenable to an order in the nature of certiorari. As it was put in the joint judgment of the majority in Hot Holdings at 159 "for certiorari to issue, it must be possible to identify a decision which has a discernible or apparent legal effect upon rights. It is that legal effect which may be removed for quashing". Such decisions fall into two broad "typical situations". The relevant "situation" here is "where the ultimate decision to be made undoubtedly affects rights but the question is where a decision made at a preliminary or recommendatory stage of the decision-making process sufficiently "determines" or is connected with that decision." (My emphasis.)
I do not doubt that the decision, or decisions, if the latter be the correct way of putting it, of the claims assessor in this case fall into that category. It goes without saying that the decision of a medical assessor resolving a medical dispute of the type in question here affects legal rights because it determines the right to an award of non-economic loss damages. Ultimately, the assessment of the claims assessor under s 94 of the Act affects the legal rights and obligations of the parties because it determines liability for, and the amount of, damages payable by the insurer to the claimant. In making that decision, the claims assessor is bound by the decision of the medical assessor in the sense that the medical assessment certificate is conclusive evidence of the matter certified, here "whether the degree of permanent impairment of the injured person as a result of the injury cause by the motor accident is greater than 10 per cent".
As things presently stand, Allianz has the benefit of a favourable decision: it cannot be liable to pay Mrs Gonzalez non-economic loss damages. That "protection" is put at risk by the matter being referred again. The decision to refer again at this preliminary stage of the claims assessment process, therefore, is sufficiently connected with the ultimate assessment to be reviewable.
I must also always bear in mind that the question is not whether I would have formed the opinion that the matter should be referred again, but rather whether the claims assessor "could have formed the opinion reasonably": Foley v Padley (1983) 154 CLR 349 at 370. See also Buck v Bavone [1976] HCA 24; 135 CLR 110 at 118 - 19.

Application of principles

Allianz argued that the claims assessor's decision to refer the matter for assessment again was based on "a critical error of fact, which may be characterised as taking into account an irrelevant consideration, or as failing to take into account a relevant consideration". Moreover, it argued that the decision was "grossly illogical". I took the latter submission to be an argument that the decision was "manifestly unreasonable": Minister for Aboriginal Affairs & Anor v Peko-Wallsend Ltd & Ors [1986] HCA 40; 162 CLR 24 at 41; Minister for Immigration & Citizenship v Li [2013] HCA 18; 249 CLR 332 at 366 [75] - 367 [76].
The matter relied upon by Allianz is the claims assessor's statement which follows (CB 24): The information contained in the report of Assessor Virgona and in the affidavit of the claimant, together with the opinion expressed by the treating doctor, Dr Sringeri, does provide more information concerning the claimant's psychological response during and immediately following the incident and prior to the arrival of the group of young males. Any psychological response to the accident itself is within the scope of the CTP policy.
The emphasis in Allianz's argument was on the concept of "more information". As can be seen from the histories set out above, as Allianz argue, the idea that Mrs Gonzalez was shocked by the collision before the commencement of the harassment and intimidation was a constant and consistent part of the history given to both Dr Lim and Dr Virgona. It could not be said that this was "more information" in the sense of being additional, or something that had not been considered before, given what was apparent on the face of the reasons of each medical assessor. That and the consideration that Dr Virgona had available, and considered, Mrs Gonzalez's affidavit leads inevitably to the conclusion that that critical finding of fact was wholly unreasonable.
Mrs Gonzalez argued the matters relied upon by Allianz fell a long way short of manifest unreasonableness. But more to the point it was wrong to say, taken in conjunction with the other matters already available, it was not "more information". Dr Sringeri was the treating psychiatrist who had seen Mrs Gonzalez on a number of occasions. Weight might therefore be given to his views. And the point was that Dr Sringeri was of the view that Mrs Gonzalez's psychiatric injury was caused by both the collision (the traumatic incident) and the subsequent intimidation (she was … threatened). Dr Sringeri should be understood as expressing the opinion that the whole episode and all of its incidents constituted "the trauma" which precipitated and perpetuated the PTSD and Major Depression.
I prefer the arguments advanced on behalf of Mrs Gonzalez. It is difficult for Allianz to succeed on a "relevance" ground when the discretion conferred by s 62(1)(b) is so much at large constrained only by "the terms and subject matter of the statutory instrument": Swan Hill Corporation at 758. In such circumstances, when the statute is silent, it may be a difficult task to persuade a court by a process of interpretation or construction that the decision-maker is bound to take certain matters into account and bound to disregard others: Peko-Wallsend at 39-40. With respect, Allianz did not attempt such a task.
Nor am I satisfied that the claims assessor's decision to refer again was manifestly unreasonable by dint of a misapprehension of a material fact i.e. there was "more information" available. The question is whether the decision to refer again is manifestly unreasonable. There is, of course, a "close analogy" between this ground of review and the principles discussed in a different context in House v The King (1936) 55 CLR 499 at 504 - 505: Peko-Wallsend at 41 - 42; Li at 366 [75]. In Li the plurality (367 [76]) said: Even where some reasons have been provided, as is the case here, it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.
I do not think this can be said of the claims assessor's decision. The finding of "more information" was not the only justification proffered for the decision to refer again. The claims assessor pointed out that Dr Lim did not differentiate between the stress caused by the impact and that caused by the subsequent events. Neither did Dr Virgona for that matter. And the claims assessor was "concerned", as the questions she formulated amply demonstrate, to ascertain whether one could be separated from the other or otherwise apportioned: Mills at 141 [98]. Moreover, as I have said, the potential significance of Dr Sringeri's report for medical assessment purposes, according to the claims assessor's appreciation of it, was that he considered both salient features of the overall episode to be necessary conditions of the psychiatric injury. This was different from previous views. And the assessor was entitled to doubt (Mills at 137[71]) whether that had been considered by the assessors previously. Additionally, the claims assessor was entitled to decide that the cumulative effect of known facts and new facts itself constituted "more information".
When one considers the subject matter, scope and purpose of the Act, as explained by Giles JA in Mills at 137 [70] - [71], and in particular the consideration that s 62(1)(b) operates as a "safety valve" for the protection of both parties, lest the bifurcated procedures for dispute resolution prescribed by the Act operate unjustly, I conclude that there was nothing unreasonable or plainly unjust in a claims assessor deciding to refer the matter again.
Allianz's second line of attack was at the form of questions proposed by the claims assessor, which I have set out above at [35]. Relying upon Mills Allianz argued that "the matter" to be "referred again" was only the "medical assessment matter" identified in s 58(1)(d). On this interpretation it was impermissible for the claims assessor to formulate 7 questions for the medical assessor's consideration, and certainly not in the form adopted by the claims assessor.
Mrs Gonzalez argued that the decision to refer again was made at the assessment conference on 30th June 2004, as recorded in the claims assessor's report of that date. All of the steps taken thereafter were purely administrative measures to implement the decision already made which did not of themselves affect legal rights in the sense discussed in Hot Holdings (see [44] above).
I do not agree that the formulation of the questions was non-reviewable administrative conduct of a merely ministerial kind. Mills demonstrates that this is not so. The formulation of the questions for the consideration of the medical assessors is the very pith of the exercise of the s 62(1)(b) power. That is not to say that the court is required, or indeed entitled, to "correct" the questions in the exercise of its supervisory powers: the questions are either good or bad, in terms of their legality. But nor do I agree that the phrase, "a matter referred for assessment under this Part" introducing s 62(1) should be taken as a reference to s 58(1) matters only. The power is to refer again. What is referred in the first instance under s 60 of the Act is "a medical dispute". In my view, the word "matter" in s 62 is a reference to this, rather than merely a reference to a medical assessment matter. As I have pointed out, medical dispute is defined as "a disagreement or issue to which" Part 3.4 of the Act applies. Section 58(2) makes clear that Part 3.4 also applies to "any issue arising about" a medical assessment matter "in connection with the assessment of a claim by a claims assessor". The very thing that the claims assessor was seeking to elucidate "in connection" with her assessment of Mrs Gonzalez's claim was an issue about the assessment of the degree of permanent impairment resulting from any psychiatric injury that may have been caused by the motor accident itself. Such a matter is a legitimate s 58(2) issue; it was capable of being "referred again" under s 62(1)(b).
Mills stands as authority for the proposition that where the only matter referred again is a "medical assessment matter" it will be impermissible to fragment the relevant composite question. At the same time, other "issues" may arise that may be referred for consideration to enable the s 58(1) matter to be properly assessed: Mills at 141 [98]. Section 58(2) permits this, within the discretion of the claims assessor, limited only by the scope and objects of the Act.
Reading the 7 questions individually, and as a whole, they appear to me to be capable of standing as "issues" arising about the s 58(1) matter in connection with the assessment of Mrs Gonzalez's claim. There is no impermissible fragmentation; questions (vi) and (vii) more than adequately preserve the integrity of the composite concept. In my judgment the formulation of the questions as proposed by the claims assessor did not exceed the lawful limits of her s 62(1)(b) power. To put it another way, as an exercise of that power, her formulation of the questions was lawful.
I accept the argument of Allianz that the exercise of the s 62(1)(b) power in reality was not complete until the claims assessor made her ruling of 12th August 2014, rejecting Allianz's arguments in relation to what she had proposed. Looked at in this way, the relevant exercise of power embraced the initial decision of 30th June 2014, circulating the draft referral on 4th July 2014 and ruling on Allianz's objections on 12th August 2014. Not every case will follow this format. In many, if not most cases, the decision to refer again may be made and completed at the preliminary conference. It is not mandatory for the procedure adopted by the claims assessor in this case to be followed in every case. At the same time, given the contest, the procedure adopted did not offend the legality principle. Moreover, I should say, it is difficult to conceive of a case appropriate to be referred again for medical assessment where it will be sufficient for the claims assessor to merely, as it were, re-submit a question formulated strictly in accordance with the words of s 58(1).
As the statute vests the power to refer again in the decision-maker having the responsibility to assess damages, and not in this Court in its supervisory jurisdiction, it would be wrong of me to attempt to identify other circumstances which would lawfully justify a further referral. Doubtless they will be worked out on a case by case basis. However, second or subsequent referrals will almost always involve a significant element of reconsideration. This being so, it will almost always be necessary for the court or claims assessor exercising the power to explain the circumstances that have arisen enlivening the power and identifying the issues arising about the particular medical assessment matter in the proceedings, or in connection with the assessment. To my mind, this is what s 58(2) contemplates. This is what Claim Assessor Holz did with some considerable care in the present case. I do not think it can be properly said that she in some way sought to fetter the exercise by the medical assessor of his or her statutory powers. Clearly, unless some care is taken in identifying the issues arising about a previous medical assessment matter, the medical assessor to whom the medical dispute is referred "again" may be at a loss to understand, and address, what issue arising about the s 58(1) matter the court or claims assessor was concerned about.

Challenge to administrative action of the proper officer of the authority

Under s 62(1B) of the Act referral again is to the proper officer, doubtless so that the appropriate arrangements can be made. In contradistinction to s 62(1)(a) referrals, it is unnecessary for the proper officer to make any decision of any kind about whether any statutory condition for lawful referral is satisfied: compare Rodger v De Gelder [2011] NSWCA 97; 80 NSWLR 594. There may be question of course about compliance with the merely procedural aspects of the Guidelines to be addressed. The administrative action of the proper officer in implementing a s 62(1)(b) referral is non-reviewable for certiorari purposes: Hot Holdings at 159; it cannot affect legal rights in the relevant sense. An order in the nature of mandamus, of course, may lie if the proper officer neglected her or his statutory duty to make the necessary arrangements for the further medical assessment to be carried out.
In oral argument, Mr Rewell SC said "if [the claims assessors] decision falls over, so does the proper officer's decision fall over" (24.15T). With respect, this is not quite right. The point is that the administrative action of the proper officer does not involve any decision as such. This is not to say, as occurred here by consent, that it may not be appropriate for the Court to restrain the proper officer from arranging the further assessment pending disposition of a challenge by way of judicial review to the claims assessor's decision.

Two final points

I raised with counsel whether the claims assessor and proper officer, as occurred, should have been named as parties, albeit in their official capacity only. Counsel assured me this was the current practice. In Ryder v Sundance Bakehouse [2015] NSWSC 526 at [11] I made the following observation: The next procedural issue is the correct method of designating the parties. This was briefly discussed, but not resolved, in argument. The issue here is whether the correct practice is to name the members of the Panel individually, or to simply identify the panel in its "official designation". Basten JA referred to this question in Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372. He said at [55]: It will usually be preferable to identify the tribunal by its official designation, so that persons who may constitute the tribunal if it is reconstituted will be bound. However, where the tribunal is an ad hoc body, appointed by an official as occasion arises, a different course may be appropriate. Whether the particular Panel still exists is not known. It would not be appropriate to order them to take particular steps: c.f., in a case of prohibition, Clifford and Sullivan [1921] 2 AC 570 at 584. The registrar was not joined in this Court, but should have been because, if the appeal is allowed, an order should be made directing the Registrar to take appropriate steps.
Applying the reasoning in Vegan, in my view, the correct approach is to identify both the claims assessor and the proper officer by their "official designation". So far as the claims assessor is concerned, I would have thought the appropriate party was the Motor Accidents Claims Assessment and Resolution Service, established under s 98 of the Act. Indeed, the authority itself was at best a redundant party. And rather than naming her, the proper officer should have been joined simply by her designated title: the Proper Officer of the Motor Accidents Authority: s 62(1B). There may be any number of circumstances of life which may lead to the claims assessor, to whom the claim has been allocated, being unavailable to complete the allocation when this Court's supervisory jurisdiction, and any appeal, is finalised. The same may be said of the proper officer. Indeed, the evidence before me indicates that the person named as the proper officer was "acting" in that position. It may well be that by now, someone else has been appointed. I think it appropriate that I make an order amending the record to reflect these reasons.
I should say, that I do not understand Adams J's decision to mean that the expression "as a result of the injury caused by the motor accident" in s 58(1)(d) requires a medical assessor to make a decision about the application of s 3A (or 3B) of the Act. The concepts of causation with which ss 58(1)(d) and 131 of the Act are concerned relate to matters of factual, or medical, causation: s 5D(1)(a) Civil Liability Act 2002 (NSW); compare Peet v NRMA Insurance Ltd [2015] NSWSC 558 at [28] - [29]. I would expect s 3A questions, where they arise, would be decided by an assessor, or after exemption under s 92 of the Act, by a court. Perhaps in unusual and unfortunate circumstances like those of this case they may arise for determination in the course of judicial review as occurred before Adams J.

Orders

Allianz has not succeeded in its challenge to the legality of the orders made by the claims assessor. I make the following orders: 1. Dissolve the interim order made on 20th November 2014 restraining the then second and third defendants from proceeding with a further medical assessment; 2. Amend the record so the only defendants are described as, Carmen Ruth Gonzalez as first defendant; the Motor Accidents Claims Assessment and Resolution Service as second defendant; and the Proper Officer of the Motor Accidents Authority of New South Wales as third defendant; 3. The proceedings are dismissed; 4. The plaintiff to pay the first defendant's costs of and incidental to the proceedings, on the ordinary basis forthwith after they have been agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 June 2015

Issues and arguments

Allianz acknowledges that s 62(1)(b) conferred a broad discretion on the claims assessor to refer a matter for assessment again. But it argued, broad as the discretion is, it miscarried on this occasion. The basis of the miscarriage was put in various ways, which included the submission that that the key factual decision which triggered the further referral was "grossly illogical". Moreover, it was argued, the letter the claims assessor drafted to be put before the medical assessor was a clearly impermissible means of carrying the decision into effect.
It was also said, "the Proper Officer did not have power to accept a purported referral by a claims assessor for further medical assessment, where that purported referral was made otherwise than in accordance with s.62(1)(b)": Allianz written submissions, page 9[60] (CB p 99). As it was put in oral argument, I understood the contention to be that the challenge to the action of the proper officer was merely consequential to the challenge to the decision of the claims assessor. If the latter decision was quashed, all that followed likewise fell.
Mrs Gonzalez answered that the claims assessor clearly had a broad power to refer a matter for assessment again; in review proceedings the Court's power is limited to determining whether the discretion has been properly exercised according to law; which itself will turn on the question whether the decision was clearly irrational, illogical and not based on findings supported by logical grounds.
Mrs Gonzalez also said that the steps taken by the claims assessor to implement her decision and, for that matter, the actions of the proper officer were not "decisions" "which [had] a discernible or apparent legal effect upon [the] rights" of the parties to the claim for motor accident damages: Hot Holdings Pty Ltd v Creasy [1986] HCA 44; 185 CLR 149 at 158 - 159; Miles v Motor Accidents Authority of New South Wales [2013] NSWSC 927; 84 NSWLR 632. It follows from this, so the argument runs, that certiorari, or an order of the same nature, does not lie.

At a glance

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Judgment (13 paragraphs)

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Legislation Cited (2)

Cases Cited (24)

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