Claps v Insurance Australia Limited t/as NRMA Insurance

Supreme Court of NSW|2015-12-01|Before: Harrison J

Grounds of review

By his further amended summons filed in Court on 1 December 2015 Mr Claps seeks a declaration that the Review Panel's certificate and statement of reasons is void and of no force or effect and an order that it be set aside. Mr Claps seeks an order remitting the matter to the Motor Accidents Authority (or what is now the State Insurance Regulatory Authority) for determination according to law.
Four grounds are relied upon in support of those claims for relief. They purport to identify four errors as follows: 1. The Review Panel did not consider or deal with Mr Claps' substantial case and argument on causation presented in the evidence, or his materials and submissions as to the cause of his psychiatric injury and in this way fell into error concerning a denial of procedural fairness of the type described in Rodger v De Gelder [2015] NSWCA 211. 2. The Review Panel did not provide reasons explaining why Mr Claps' substantial case and argument on causation was rejected. 3. The Review Panel did not apply the correct test as to causation by failing to consider the notion of material contribution or otherwise apply the principles of s 5D of the Civil Liability Act 2002 or clauses 1.8 and 1.9 of the Motor Accidents Authority Guidelines for the Assessment of the Degree of Permanent Impairment. 4. The Review Panel did not determine what injury Mr Claps suffered and accordingly did not perform the statutory task under s 58(1)(d) of the Motor Accidents Compensation Act 1999.
These grounds are considered in detail later in these reasons.

Legal principles

It is convenient immediately to record the particular passages from Rodger v De Gelder to which my attention has been directed and which are said to support Mr Claps' principal contentions. They are as follows: "[17] It is well established that the degree of permanent impairment as a result of the injury caused by the motor accident (s 58(1)(d); s 131) is unequivocally for the medical assessor, or review panel, as the case may be, including the element of causation: Motor Accidents Authority of NSW v Mills [2010] NSWCA 82; 78 NSWLR 125 at [79] … Ackling v QBE Insurance (Australia) Ltd [2009] NSWCA 881; 75 NSWLR 482 at [77] - [79]. [18] Before the primary judge little attention was given by the parties, at least in their written submissions, to the status of the Permanent Impairment Guidelines for the purpose of Mr De Gelder's application for judicial review. Mr Rodger contended that the Panel did apply each section of cl 1.8 of the Permanent Impairment Guidelines 'as required by law'. The reference to 'each section of cl 1.8' may be taken to be a reference to the medical determination and the non-medical determination with respect to causation. Counsel for Mr Rodger accepted that the non-medical determination referred to in cl 1.8(b) is essentially a non-medical factual question. … Did the Panel fail to take into account a relevant consideration? [84] It is well established that reference to a 'relevant consideration' in judicial review is a reference to a factor which, by law, the decision-maker is bound to take into account: Peko-Wallsend at 39; Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244. … [85] As Basten JA explained in Cervantes at [15], this ground required the respondent, Mr De Gelder, to identify the legal obligation on which he relied to identify what were mandatory factors to be taken into account for the purposes of the Panel's decision. The identification of relevant and irrelevant considerations is to be drawn from the statute empowering the decision-maker to act rather than from the particular facts of the case that the decision-maker is called on to consider: Abebe v Commonwealth of Australia [1999] HCA 14; 197 CLR 510 at [195]. … Obligation to respond to a substantial argument [88] The contention relied upon by Mr De Gelder in oral argument, was that the Panel incorrectly described the evidentiary position and thereby impliedly overlooked the evidence relied upon by Mr De Gelder in support of causation of his injury. No complaint was made by counsel for Mr Rodger that it was not open to Mr De Gelder to raise this point on appeal either because it had not been raised below, or had not been raised in a notice of contention. It is appropriate for this Court to deal with the real issues which the parties were content to debate on appeal. This reflected the substance of Mr De Gelder's complaint before the primary judge, albeit not its legal characterisation. [89] In Cervantes at [19]-[22], Basten JA addressed the legal obligation of administrative decision-makers to take particular evidence into account. The context in that case was the obligation of a claims assessor exercising power under the MAC Act, s 94. His Honour said: '[19] Although this ground must be dismissed for the reasons given above, it is desirable to return to the first step in the reasoning, namely identifying the legal obligation to take particular evidence into account. No case was referred to which supported a proposition expressed in these terms. In Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 73 ALD 321; 197 ALR 389; 77 ALJR 1088; [2003] HCA 26 at [24] … Gummow and Callinan JJ stated: "[24] To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice." [20] A similar point was made by Kirby J at [86] referring to a passage in the judgment of Gaudron J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; 179 ALR 238; [2001] HCA 22 at [81] … where, after noting that it was not always easy to distinguish an error of law which is jurisdictional from one that is not, her Honour continued: "[81] However, the present case is, in my view, a clear case of constructive failure to exercise jurisdiction. That is because the delegate failed to consider the substance of Mr Miah's application and could only have failed to do so because he misunderstood what is involved in the Convention definition of 'refugee'." [21] Two propositions may be drawn from these statements. First, although not articulated in these terms, a constructive failure to exercise jurisdiction may arise because the statutory conferral of power has not been exercised according to its terms. Thus, in the present case, s 94 of the [MAC] Act requires that a claims assessor 'is, in respect of a claim referred to the assessor for assessment, to make an assessment of ... the amount of damages': s 94(1)(b). It is, therefore, mandatory that the assessor address the claim and carry out the statutory function. [22] The second point is that neither Dranichnikov nor Miah went so far as to imply an obligation to consider every piece of evidence presented. Further, to refer to a report, but not to a particular passage in the report, may indicate an implicit preference for some other material which (in the absence of any no evidence ground) must be accepted as existing to support a particular conclusion. Such a course cannot constitute a failure to take into account a relevant consideration nor a failure to respond to a substantial argument: Minister for Immigration and Citizenship v SZJSS (2001) 243 CLR 164; 273 ALR 122; 119 ALD 446; [2010] HCA 48 at [35]. … [90] These observations have equal relevance to the obligation of a review panel to consider the evidentiary material placed before the panel when exercising power under the MAC Act, s 63. As already mentioned, s 63(3A) expressly requires a review panel to undertake a new assessment of all the matters with which the medical assessment is concerned. Here the medical assessment matter which a review panel was dealing with is whether the degree of permanent impairment of the injured person caused by the motor accident is greater than 10%: s 58(1)(d) MAC Act. It is, therefore, mandatory that the review panel address the medical assessment matter and carry out the statutory function. [91] As cl 1.8 of the Permanent Impairment Guidelines makes clear, the causation issue involves both a medical determination and a non-medical determination. Here, what is in issue is the non-medical determination by the Panel that Mr De Gelder's thoracic spine injury was not caused by the motor accident. [92] The primary judge found in effect that there were five significant deficiencies in that determination, all revealed by comparing the Panel's reasons with the evidence of Mr De Gelder having made complaint of the onset of thoracic pain at the time or and continuing after the motor accident. As the primary judge also found, taken together the five items relate to a matter of importance to the Panel's determination. This is not to suggest that the Panel had an obligation to consider every piece of evidence presented. But the Panel was required to respond to a substantial argument that Mr De Gelder did make a relevant and contemporaneous complaint of pain in the region of his thoracic spine. [93] Where a decision-maker has failed to respond to a substantial argument it has been said that there has been a failure to accord natural justice, that is, procedural fairness: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088. In such a case the concern of the law is to avoid practical injustice: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [37] (Gleeson CJ). It is well accepted that with respect to the MAC Act, procedural fairness applies to a review panel exercising powers under s 63: McKee v Allianz Australia Insurance Ltd [2008] NSWCA 163; 71 NSWLR 609 at [8] (Allsop P). The particular content of this requirement will depend upon the facts and circumstances of the particular case: Trazivuk v Motor Accidents Authority (NSW) at [28]; Frost v Kourouche at [2] and [41]. [94] A failure to accord procedural fairness is a recognised form of jurisdictional error: Kirk v Industrial Court of New South Wales [2010] HCA 1; 239 CLR 531 at [60]. It is susceptible to correction as jurisdictional error: Re Refugee Review Tribunal; Ex parte HB [2001] HCA 34; 179 ALR 513 at [10]. [95] It has also been said where the relevant facts have been clearly established and the reasons show the decision-maker acted on the wrong basis in important respects, the decision-maker has failed properly to exercise their jurisdiction: Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No 2) [2011] FCA 757; 282 ALR 24 at [102]-[103]. Jurisdictional error includes a constructive failure to exercise jurisdiction. A constructive failure to exercise jurisdiction arises when a decision-maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided, or misunderstands the nature of the opinion it is to form: Minister for Immigration v Yusuf at [41]. ... [96] The question is whether this is what the Panel did here. As will be seen immediately below, it will not be necessary to decide whether a failure to respond to a substantial argument amounts to a failure to accord procedural fairness, or a constructive failure to exercise jurisdiction, or both. Did the Panel fail to respond to a substantial argument? [97] The Panel's reasons with respect to causation of the thoracic spine injury are set out above at [35]. As to the medical determination referred to in cl 1.8(a) of the Permanent Impairment Guidelines, the Panel accepted that the rear end collision could have caused compression fractures in the thoracic spine, especially for an individual with pre-existing osteoporosis, even though any such injury was considered extremely rare. [98] As to the non-medical determination referred to in cl 1.8(b) of the Permanent Impairment Guidelines, the Panel considered that the only evidence supporting a thoracic spine injury at the time of the motor accident was the 'history' given by Mr De Gelder. This may be taken to be a reference to the history which he gave to the Panel on 4 February 2014. Counsel for Mr Rodger did not suggest otherwise. … [108] The Panel's reasons disclose that it did not engage with the evidence of a complaint of the onset of thoracic pain at the time of and continuing after the motor accident. This was a matter of importance which related to its determination of a non-medical factual question. It is not to the point that the function of the Panel is to form and give its own opinion on the medical dispute referred to it by applying its own medical experience and its own medical expertise: Wingfoot Australia Pty Ltd v Kocak at [47]. Nor is it to the point that s 61(9), which is made applicable by s 63(6), only obliged the Panel to set out in its certificate the reasons for any finding of any matter certified in the certificate. [109] Here the Panel failed to respond to a substantial argument based on evidence relied upon by Mr De Gelder as to the causation of his thoracic spine injury by the motor accident. It may also be inferred that the Panel failed to apply itself to the real question to be decided in carrying out its statutory function under s 58(1)(d), because it misunderstood a significant body of evidence relevant to its non-medical determination. What the Panel did amounted to a jurisdictional error. The Panel's decision recorded in its certificate is to be regarded as a purported and not real exercise of its statutory function in s 58(1)(d), leaving that statutory function unexercised, and the Authority and the Panel liable to the relief granted by the primary judge by way of judicial review: Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420. … [111] One further matter should be mentioned. Although not articulated in this way, the criticism of the Panel's misreading of Dr Goodman's report is a matter that appears on the face of the Panel's reasons. This is evident in the Panel's finding that Dr Goodman had not recorded Mr De Gelder's complaint of pain between the shoulder blades, when the portion of Dr Goodman's report excerpted in the Panel's reasons addressing of the cervical spine injury does record pain in the relevant areas. Accordingly, the Panel's reasons also disclose an error of law on the face of the record."
Mr Claps' arguments draw heavily upon these passages in the circumstances that follow.

Evidentiary background

Despite the indifferent history of Mr Claps' various applications, the starting point for present purposes, or what Mr Robinson SC for the State Insurance Regulatory Authority metaphorically and variously described as the flag ship, the lynch pin or the spring board, is Mr Claps' 10 February 2014 Application for Further Assessment of a Permanent Impairment Dispute. Mr Claps contends that from no later than that application, and the events and circumstances that it generated, he was making and articulating an argument that his psychological or psychiatric disorder was directly referable to or caused by a pathological reaction to his physical injuries. This notion achieves recognition from as early as 23 March 2009, when Dr Lok recorded that Mr Clap was "not coping with pain" and it remained in play on 9 April 2010 when Dr Lewington, a consultant physician and musculoskeletal specialist, reported that Mr Claps was "very disgruntled and obviously not coping with his pain." Dr Lewington referred Mr Claps for pain management counselling.
Mr Claps' 10 February 2014 application is in evidence. It is comprehensive. It attached several medical reports and included the following submission: "It is submitted, that on the balance of probabilities, [Mr Claps'] current mental condition is most likely to be caused by a reaction and response to his injuries sustained in the motor vehicle accident on 22 December 2007, therefore being one of a psychological and/or psychiatric nature."
One of the attached reports was from Dr Sharpe, who conferred with Mr Gilbert of junior counsel for Mr Claps on 27 June 2013. He subsequently provided a report dated 14 August 2013 that included the following: "The more recent scan from May 2013, two and a half years from the first does not show any clear atrophy making it unlikely that the earlier scan showed any atrophy as this is not something that would recover spontaneously. Furthermore the most recent scan does not show the development of any atrophic process involving the frontal and or the temporal lobes as one might expect with a diagnosis of fronto-temporal dementia. My understanding of the fronto-temporal dementia is that one would see the development of atrophy in one or other of the frontal or temporal lobes and this would be slowly progressive with time. As you know I did examine the two scans together and could not convince myself of any significant changes. I did obtain some unofficial views from radiological colleagues and they also felt there was no interval change between the two sets of MR imaging. I would also confirm that assuming the details in your letter are correct and that having regard to the information set out in my earlier report of the 13 June 2012, then it is improbable that he suffered a significant head injury. The subsequent development of a personality change and cognitive problems I feel on the balance of probabilities is more likely to be due to underlying psychological or psychiatric illness."
Another of the attached reports was from Dr Keshava, who also reported on Mr Claps on 24 September 2013. That report included the following opinion: "As there is no evidence of organic brain injury, I agree that Mr Claps' presentation of impaired cognitive state is psychiatrically based as a reaction to his injuries during his accident on the balance of probabilities."
In addition to these medical opinions, Mr Claps provided the Motor Accidents Authority with statements from lay witnesses attesting to his condition. One of those statements was from Ahmet Shevket who said the following relevant things: "14. In very early 2008 I first noticed changes in Michael's behaviour. In particular I saw that he would become quite agitated for the smallest of reasons. I know that this increased over the rest of 2008 because when I went to visit Michael I saw how he would raise his voice yell at Lynden or the children for no apparent reason. It seemed that his own family were getting on his nerves for the smallest of things. He had never been like this in all the years that I have known him. 15. He is rarely happy and is physically inactive, particularly as compared to the way he was before the accident. He doesn't laugh like he used to nor does he participate in conversations with others around him. He shows little interest in his children whereas he used to be playing with them all the time when they were all together. … 18. The changes in Michael's behaviour have become much more evident and much more frequent over the years since the accident. It is now almost 6 years since the accident and I have seen major changes in Michael's conduct from before the accident until the present time. I have never seen a person change so much - Michael is now an entirely different person to the one I knew before December 2007."
Another statement was provided by Saadi Habbouchi. Part of that statement is in these terms: "10. I first started noting some changes in Michael's behaviour about four months after the accident. In particular, I noted the following things about Michael: (a) His personality had gradually begun to change. (b) He was always sleepy and would often close his eyes and doze off when talking to me. (c) He started to become verbally abusive to his children and Lynden. (d) He would become suddenly and really agitated for no apparent reason. (e) He would act as if something was really annoying or frustrating him but, when questioned about it he didn't seem to be able to tell me what it was that was upsetting him. 11. A few months after the accident, I also saw that he would become really 'on edge' for no apparent reason. This was the first time that I had noticed evidence of real changes in Michael's personality. 12. Before the accident Michael used to be very confident and outgoing by nature. However, since the accident, he has become much more withdrawn and quiet. He keeps very much to himself, and engaging him in conversation is very hard. In addition to this he has become very impatient and he loses patience quite easily. 13. I recall him exhibiting this behaviour after he returned to work at the STA. I personally ran a social club at the STA and part of this was to organise presents for under privileged children. On one occasion, I had organised that each child would receive a lolly bag. 14. I remember speaking to Michael about this and to my surprise, his reaction was very hostile. He got very angry with me and began to tell me that lolly bags weren't enough and that the children should receive much more expensive presents. He knew how the social club operated and the restricted nature of our budget and that we simply didn't have the funds to get more expensive presents."
On 27 March 2014 the Motor Accidents Authority wrote to Mr Claps' solicitor. The letter was written in reference to Mr Claps' application for further assessment. Part of that letter was in the following terms: "The Proper Officer has considered the application for further assessment, the reply, submissions and all supporting documentation submitted in this matter, and has determined this matter should be deferred in accordance with clause 14.3 and 9.7 of the Medical Assessment Guidelines to allow additional submissions and/or material to be provided. … Whilst [Mr Claps' lawyers] contend that the additional relevant information would have substantially altered the outcome, had it been available to Assessor Roberts at the time of his assessment, given that Assessor Roberts determined that psychiatric injury was not related to the subject MVA, it is necessary for [Mr Claps'] solicitors to establish a causal connection between [his] psychological/psychiatric condition and the subject MVA, and also to address how a further assessment is such to be capable [sic] of materially altering the outcome of the MAS assessment such that it might be assessed at greater than 10% WPI. … The Proper Officer has therefore determined that the application shall at this time be deferred. … The matter will then be reviewed by the Proper Officer in light of the additional material provided by the parties. … In such circumstances, in accordance with the MAA's ABI protocols, the following injuries would be assessed in the further assessment: ● Injury to the head - traumatic brain injury involving frontal lobe damage ● Psychiatric injury."
That letter specifically called for additional submissions from the parties. Mr Claps' solicitor provided his submissions by letter dated 9 May 2014. The submissions were very comprehensive and referred to all of the relevant evidence. It effectively concluded as follows: "16. [Mr Claps] submits that his current psychological and/or psychiatric condition has been, on the balance of probabilities, caused as a result of the motor vehicle accident and [his] difficulty in dealing and coping with his injuries and the effects of those injuries. 17. There is no evidence of any traumatic event in [Mr Claps'] life which could cause his current condition nor is there any other plausible explanation which could be offered to explain the onset of his current condition. … 20. It is submitted that the causation test has been answered to the extent necessary to have the ... case referred back to MAS for further assessment."
The Proper Officer considered the matter and thereafter on 11 June 2014 wrote to Mr Claps in these relevant terms: "I have therefore determined that the application shall be referred for further assessment by Medical Assessors. In accordance with the MAA's ABI protocol, the following injuries will be assessed in the further assessment: ● Injury to the head - traumatic brain injury involving frontal lobe damage ● Psychiatric injury. It would then be a matter for the MAS Assessors to consider: ● the conclusions reached by Dr Keshava and Dr Sharpe; ● issues regarding diagnosis of frontotemporal dementia or the presence of atrophy in [Mr Claps'] frontal region of the brain and the relevance of this to [his] psychological/psychiatric condition; ● issues of causation of psychological/psychiatric injury; and/or ● the degree to which reports are relied upon by the different parties."
Relevantly for present purposes, Dr Synnott conducted a review and issued a certificate on 1 October 2014. He determined that: "Of the injuries referred to me for assessment, none were [sic, was] related to the motor accident. An assessment of the degree of permanent impairment is, therefore, not required."
That conclusion prompted Mr Claps' Application for a Review of the Medical Assessment on 13 November 2014. It was accompanied by an undated letter that referred to the following complaints: "2. The Application for Review is made pursuant to s 63 of the Motor Accidents Compensation Act 1999 … Particularly, it is submitted that the assessment by Assessor Synnott is incorrect in a material respect. … 9. The significance of the above documents supports the totality of [Mr Claps'] submissions…that the psychological injuries were caused as a direct result of the subject motor vehicle accident. … 12. [Mr Claps'] reliance on the above assertions is based on the fact that [Dr Synnott's] Further Certificate makes no mention of any of the above documents nor explain why they were not considered or relevant, therefore, leading to the conclusion that they have not been reviewed or considered at all. … 16. It is noted that the Assessor concludes with confidence that the cause of [Mr Claps'] condition is certainly not related to the motor vehicle accident. However, it is at this point that the further assessment becomes more unclear and ambiguous as the Assessor provides no other explanation as to [Mr Claps'] condition or as to the 'cause' of [his] condition, and does not comment on the recent medical evidence. He neither rejects nor accepts that evidence - he just doesn't deal with it."
The Motor Accidents Authority agreed that the matter should be referred to a Review Panel. In coming to that conclusion it noted the following in its Statement of Reasons for Decision issued on 22 January 2015: "10. In the reasons for his decision, Assessor Synnott has not specifically referred to any of the additional information lodged with the application for further assessment. Furthermore, he has not explained why [Mr Claps'] 'factitious disorder' is not caused by the subject accident. While the Assessor is not required to refer to all of the evidence before him, as causation of [Mr Claps'] psychiatric injury is a central issue between the parties, I agree with [Mr Claps] that, given the lack of referral [sic, reference] to any of the additional information, it would have assisted the parties if more detailed reasoning addressing causation, was provided."
The ultimate deliberations and conclusions of the Review Panel are the particular subject of these proceedings. The Review Panel Certificate is dated 20 April 2015. It is very lengthy. Some of what it contains needs to be recorded here: "C. Panel Deliberations The Panel accepted that Mr Claps had suffered a significant decline in his functioning since the motor accident. The Panel found it difficult to reach a diagnosis but considered whether he had developed a psychotic illness such as schizophrenia, whether he had suffered a head injury in the motor accident or whether he now had a degenerative brain condition such as the frontotemporal dementia diagnosed by Assessor Roberts or a subcortical dementia. The Panel took particular note of Mr Claps own statement which was dated 8 February 2010 and apparently signed on 29 June 2010. It states on page 2, paragraph 9 that in 1999 he commenced employment with State Transit Authority as a bus operator working on a fulltime basis on a rotating shift 50 hours each week. It states on page 3, paragraph 18 that in October 2007 he changed his employment status to working on a permanent part-time basis driving Monday to Friday starting at 4.25 am and finishing at 9.15 am. He commenced working permanent part-time as his youngest son, Christian was born in October 2006 and he was going to help look after him. It states that he was driving for Sydney Shuttle Service a business that he and his wife commenced in February 2006 driving people to and from Sydney Airport. He also, as part of the business would do short trips to places such as the Hunter Valley, Jenolan Caves and Blue Mountains carrying tourists, about once or twice each month. It states in paragraph 41 on page 7 that he did not return to work for State Transit Authority until March 2008 and he returned at his previous level of permanent part-time five hours each day, five days each week driving new buses and had no difficulty driving the buses. In August or September 2009 a second bus was purchased and he continued to drive with State Transit Authority until taking leave in September 2009. On page 8, paragraph 46 it states that he returned to work in November 2009 working his five-hour shifts but was allocated an older bus which had a different seating position requiring him to lean forward and required a lot more physical effort. He developed pain in his neck and lower back but continued to drive for a period of about seven days. He would have to get out of the bus every 20 minutes and have a break. It states in paragraph 50 that driving a bus 'just aggravated my neck and back pain'. It states in paragraph 52, that after about a week 'my neck, my left shoulder, my lower back and my legs would become extremely painful and I was getting severe muscle seizures in the back'. It states in paragraph 53 'I attended Dr Lok and he put me off work'. It states in paragraph 55 'due to the severity of my back pain I did not drive a shuttle bus for Sydney Shuttle Service and as such Lynden was doing these duties'. The Panel noted that the first report suggesting psychiatric symptoms was in the general practice notes in an entry dated 26 March 2009, in which he stated that he was feeling depressed, that he could not help his wife because he was tired but he was not suicidal and did not want to kill himself. It also states that the neck pain was not improving since the accident. The next reference to psychiatric symptoms was 3 June 2010 when there was a telephone call from a psychologist, Julia who reported that Mr Claps had auditory and visual hallucinations and grandiose ideas since the accident and recommended that he have a psychiatric consultation. He first attended Dr Keshava on 23 March 2010. He was assessed by Dr Sophie Kavanagh, staff specialist at Croydon Community Health Centre in 2011. He was assessed at the Royal Rehabilitation Centre at Ryde by Dr Adel Aldajani, rehabilitation registrar on 10 February 2011. The Panel particularly noted that Mr Claps had returned to work as a bus driver in March 2009. He continued to work at his pre-accident level of five hours each day, five days each week until either late November or early December 2009 almost two years after the motor accident. He stopped work because of the pain in his neck and back which had been aggravated by needing to drive old buses which had a different driving position and required more physical effort. The first reported psychiatric symptoms were recorded by his general practitioner on 26 March 2009 and these were of feeling depressed. It was not until 3 June 2009 that it was reported that he had auditory and visual hallucinations. The Panel determined that following the motor accident, Mr Claps appeared to have developed either a psychiatric illness such as schizophrenia or a degenerative condition but there was no evidence of this occurring until March 2009. The Panel considered whether Mr Claps had suffered a head injury at the time of the motor accident as has been suggested in various reports. The only information available from Royal Prince Alfred Hospital where he was treated was the report of Dr Les Schmaltzbach in the emergency department discharge referral dated 22 December 2007 in which it states that he was lucid and cooperative with a Glasgow Coma Scale Score of 15 and that his injuries were a laceration of his left knee, multiple abrasions to both legs and chin, tender right lateral malleolus and no other abnormalities. X-rays of the chest, pelvis, left and right knees, left shoulder and a CT scan of the cervical spine showed no fractures. The laceration of the left knee was explored under local anaesthetic and was closed with sutures. There was no evidence that Mr Claps had suffered a head injury. The Panel also noted that if Mr Claps had suffered a traumatic brain injury, it would generally be expected that there would be some improvement over the next two years and not a deterioration after two years. The Panel concluded that Mr Claps did not develop a psychiatric disorder arising from the injuries sustained in the motor accident. There was no evidence of psychiatric disorder until over a year after the motor accident and he functioned well during that time, continuing to work as bus driver. He became unwell in 2009 and although his diagnosis is not clear his illness and subsequent decline, commencing over a year after the motor accident cannot be attributed to the motor accident on 22 December 2007."

Mr Claps' submissions

In the light of this background, Mr Claps made the following submissions.
Mr Claps' fundamental argument was that his psychiatric or psychological condition or disorder was a consequence of the pain suffered or experienced by him as a result of his physical injuries that were sustained in the motor vehicle accident. That included the development of his condition over time. Dr Jungfer provided an opinion to that effect. Mr Claps does not assert or continue to maintain that he sustained or suffers from any form of organic brain injury. On the contrary, Mr Claps' symptoms and behaviour are related to a psychiatric condition secondary to physical injuries. This became clear when the additional information requested by and supplied to the Motor Accidents Authority was assembled. Mr Claps maintains that the Review Panel failed in various respects to come to terms with or to consider this fundamental characterisation of his claim.

Ground 1

By particular reference to the Review Panel's difficulty reaching a diagnosis, as earlier quoted, Mr Claps argued that the Review Panel had not correctly apprehended his case on causation. It was not even referred to by the Review Panel. There is no suggestion that the Review Panel appreciated that Mr Claps was contending that his psychiatric condition was a function of his reaction to his physical injuries. It was a necessary aspect of that case that it did not become apparent contemporaneously with the motor vehicle accident but developed over some years when it became manifest in about March 2009. In posing the questions to be answered, the Review Panel mentions three alternatives, being a psychotic illness such as schizophrenia, a possible head injury suffered in the motor accident or a degenerative brain condition such as frontotemporal dementia. It did not refer to or consider the fourth alternative of a pathological psychiatric response to pain caused by physical injury. This amounted to error.
Mr Claps submitted that the Review Panel made an error of the type identified in Rodger v De Gelder at [88]-[96] and also at [84]-[87], referred to in the conclusions at [109] and [111]. This amounts to jurisdictional error. In Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372 at [121]-[122], a similar matter is approached as an aspect of the obligation to give reasons.
The statutory task to be performed under s 58(1)(d) of the Motor Accidents Compensation Act 1999 includes a medical determination and a non-medical determination: Rodger v De Gelder at [17] and [18]. However, for the reasons identified in that case at [91], a causation conclusion of the type in question is a non-medical determination. The distinction is discussed in Rodger v De Gelder at [97] and the process of reasoning error that is of particular significance in the present case is discussed at [108]-[109].

Ground 2

This ground is related to the first: the Review Panel did not provide reasons why it rejected Mr Claps' case on causation. Mr Claps argued that even though the Review Panel reasoning process relates to setting out its own conclusion, as discussed in Rodger v De Gelder at [108], there remains an additional obligation to deal with substantial arguments put forward by a party. In this case there are no reasons furnished in respect of this matter at all.
Mr Claps contended that a fair reading of the Review Panel's deliberations indicates that it did not consider his case on causation. Alternatively, if it did, it furnished no reasons to demonstrate that it did. Reasons cannot be inferred or imputed. The proper approach has been discussed in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 271-2 as follows: "In other words, the delegate starts and finishes with the correct test; it is only some phraseology in between which provides the basis for a conclusion that she had slipped from an assessment of real chance to an assessment of balance of probabilities. When the Full Court referred to 'beneficial construction', it sought to adopt an approach mandated by a long series of cases, the best exemplar of which is Collector of Customs v Pozzolanic. In that case, a Full Court of the Federal Court … collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be 'concerned with looseness in the language ... nor with unhappy phrasing' of the reasons of an administrative decision-maker. The Court continued: 'The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error'. These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision. This has been made clear many times in this Court. For example, it was said by Brennan J in Attorney-General (NSW) v Quin: 'The duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone'."
In Sadsad v NRMA Insurance Ltd [2014] NSWSC 1219 at [47], Hamill J referred to these principles in the following terms: "[47] It is one thing to give a 'beneficial construction' to the reasons of an administrative decision maker. It is another to fill in the gaps in the path of reasoning by reference to an assumption that the decision was made according to the relevant law (in this case cl 2.5). This accords with the approach taken by Stone J in SZCBT v Minister for Immigration and Multicultural Affairs [2007] FCA 9 at [26]: 'The Minister urged a "beneficial" construction of the Tribunal's reasons and referred to comments made in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259, in particular at 271-272. The phrase "beneficial construction", as used in Wu Shan Liang has a specific meaning, and was certainly not intended to mean that any ambiguity in the Tribunal's reasons be resolved in the Tribunal's favour. Rather, the construction of the Tribunal's reasons should be beneficial in the sense that the Tribunal's reasons would not be over-zealously scrutinised, with an eye attuned to error. In this sense a "beneficial" approach to the Tribunal's reasons does not require this Court to assume that a vital issue was addressed when there is no evidence of this and, indeed, the general thrust of the Tribunal's comments suggest that the issue was overlooked'."

Ground 3

Mr Claps contended further that his causation argument also raised or involved questions of material contribution: even if Mr Claps had some pre-existing vulnerability, if his physical injuries sustained in the motor vehicle accident contributed to his psychiatric condition which became evident around March 2009, legal and factual causation are established.
As discussed in Rodger v De Gelder at [18] and elsewhere, causation for the Review Panel involved both medical and non-medical questions. Mr Claps contended that the medical question in this case was, as exemplified in Rodger v De Gelder, whether medically it was possible for the causal connection to be established, whereas the non-medical causation question was whether it has been established in fact.
Mr Claps complained that in this case the Review Panel failed to consider causation principles at all, and gave no consideration to the two stage process in the causation inquiry called for in clause 1.8 of the relevant guidelines. Material contribution received no attention from the Review Panel at all.

Ground 4

Properly understood according to Mr Claps, the Review Panel did not actually reach a conclusion on diagnosing his condition. In accordance with the guidelines and under s 58(1)(d), questions of causation cannot be decided unless there is a diagnosis. Mr Claps submitted that the question of diagnosis is important because, in a conventional retrospective inquiry about cause and effect, the condition suffered will speak to whether the non-medical determination of causation has been satisfied.
The error contended for is that the Review Panel should have reached a conclusion on a diagnosis but failed to do so.

The NRMA Insurance submissions

The NRMA submitted that none of these grounds of review was made out.
The first ground complains that the Review Panel did not correctly apprehend Mr Claps' case on causation and did not deal or engage with a substantial argument based on the evidence. The NRMA submitted that the argument in question, that Mr Claps' psychological or psychiatric presentation was a function of his response to his physical injuries, was never actually put before the Review Panel as an argument. By way of contrast, the NRMA contends that Mr Claps, with the benefit of hindsight, complains that the Review Panel should somehow have been able to divine his argument from a great quantity of material extending to hundreds of pages in all. The NRMA says that it is not clear even now what evidence Mr Claps suggests the Review Panel should have had regard to in order to piece together the argument in question.
The NRMA contended that, in contrast to cases such as Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244 and Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088, Mr Claps never clearly articulated any argument of the type he now seeks to advance. The obligation referred to in Rodger v De Gelder and Dranichnikov does not therefore arise. In any event, as Basten JA discussed in Cervantes at [22]: "[22] The second point is that neither Dranichnikov nor Miah went so far as to imply an obligation to consider every piece of evidence presented. Further, to refer to a report, but not to a particular passage in the report, may indicate an implicit preference for some other material which (in the absence of any no evidence ground) must be accepted as existing to support a particular conclusion. Such a course cannot constitute a failure to take into account a relevant consideration nor a failure to respond to a substantial argument: Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; 243 CLR 164 at [35]."
Alternatively, even if Mr Claps did propound the argument in question, the NRMA submitted that the Review Panel gave explicit attention to it and to "most of the evidence that [Mr Claps] relies upon as supporting [his] 'substantial case and argument on causation'."
Mr Claps' second ground alleges a failure by the Review Panel to give reasons why his "substantial case and argument on causation" was rejected. The NRMA maintained that the reasons given by the Review Panel accorded with the duty imposed by law to give reasons. Moreover, even if the Review Panel's decision could be considered to be erroneous for want of adequate reasons, it does not automatically follow as a matter of statutory construction that such error means that the decision is invalid or should be set aside. The NRMA argued that I would need to be satisfied that a proper construction of s 61 and s 63 of the Motor Accidents Compensation Act compelled such a conclusion: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [92]-[93]; VAW (Kurri Kurri) Pty Ltd v Scientific Committee [2003] NSWCA 297; (2003) 58 NSWLR 631 at [91]-[116]; Kennedy v Australian Fisheries Management Authority [2009] FCA 1485; (2009) 182 FCR 411 at [55] - [75].
In any event, it remains open on these authorities for Mr Claps to seek to compel the Review Panel to provide further reasons for its decision. That could have been done in the further amended summons filed by Mr Claps but was not: see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56; (2003) 216 CLR 212 at [57] and [141]; Sanhueza v AAMI Ltd [2010] NSWSC 774; (2010) 56 MVR 34.
The NRMA submitted with respect to the third ground that there were no elaborate findings on causation to be made. In basic terms the Review Panel determined, whether it be styled a medical question or a non-medical question, that it could not reach a medical diagnosis and that the first report that even suggested psychiatric symptoms was from a general practitioner in a diary note about depression in March 2009. The Review Panel determined that Mr Claps' illness could not have been caused by the motor vehicle accident given the time that had elapsed between it and the first presentation of relevant complaints or symptoms.
The NRMA submitted that that was a finding open to the Review Panel. It was similar to the finding made in Frost v Kourouche [2014] NSWCA 39; (2014) 86 NSWLR 214. In that case the Court of Appeal did not have difficulty with the inability of a panel to determine a diagnosis on a particular matter.
The NRMA apprehends in this case that Mr Claps' real complaint is that the Review Panel did not cite in terms the causation provisions of the Permanent Impairment Guidelines, the "but for" test or s 5D of the Civil Liability Act 2002. However, the NRMA submitted that the Review Panel was not obliged or required to do so. The Review Panel read the material that was placed before it. It medically examined Mr Claps. It wrote a lengthy determination setting out what it had done together with reasons for its conclusions.
The NRMA submitted that the position is as discussed in Pham v NRMA Insurance Ltd [2015] NSWSC 1205; (2015) 72 MVR 272 at [47]: "Hence, the Review Panel did not err in limiting causation to the actual accident itself. Nor did the Review Panel err by not reaching the conclusion that there was a very substantial link between the motor vehicle accident and Ms Pham's major depressive episode. Utilising common law principles (Gonzales) the Review Panel determined that the major depressive episode was not materially contributed to by the motor vehicle accident. Although the Review Panel did not refer specifically to s 5D and the "but for" test, its reasons demonstrate a detailed and practical assessment of whether the motor accident itself could have given rise to such a severe psychiatric illness. If on a strict legal analysis, the Review Panel's reasons do not accord with the test set out in s 5D, they satisfy the test of material contribution set out in clauses 1.7 to 1.9 of the Permanent Impairment Guidelines."
Finally, in answer to the proposition that the Review Panel erred in failing to determine what injury Mr Claps had suffered, the NRMA submitted that it was under no statutory obligation to do so. There is no provision in the Act that requires it. The ultimate finding in this case was that the Review Panel was unsure of what it was that Mr Claps may have been suffering from. It accepted that his complaints were genuine. It found that the motor vehicle accident did not cause the condition. That was all that the Review Panel was required to do under the statutory scheme in question: Frost v Kourouche.
The NRMA disputed the proposition that "questions of causation cannot be decided unless there is a diagnosis." The scheme of the Act does not require a diagnosis to be made when the expert medical practitioners cannot commit to a diagnosis based on the available medical evidence and its own medical examination of Mr Claps.

Consideration

The question for determination is whether Mr Claps can establish a relevant error on the face of the record or jurisdictional error of sufficient severity to warrant quashing the decision of the Review Panel. These proceedings are therefore in the nature of judicial review, as distinct from an appeal: see Allianz Australia Insurance Ltd v Sprod [2011] NSWSC 1157; (2011) 59 MVR 250 at [57] - [59]; Allianz Australia Insurance Ltd v Sprod [2012] NSWCA 281; (2012) 81 NSWLR 626 at [14].
The correct approach in Review Panel matters, as well as Medical Assessor matters who exercise the same powers in s 61 of the Motor Accidents Compensation Act, was discussed in Frost v Kourouche at [2] and [40] in the following terms: "[2] I agree with the orders proposed by Leeming JA and with his reasons. The content of the obligation of a review panel carrying out a medical assessment under the Motor Accidents Compensation Act 1999 (NSW), to accord procedural fairness to the claimant, will depend on the nature of the function being exercised. That function is aptly identified by the High Court (in relation to an analogous scheme under Victorian legislation) in Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; 88 ALJR 52 at [47]: 'The function of a Medical Panel is to form and to give its own opinion on the medical question referred for its opinion. In performing that function, the Medical Panel is doubtless obliged to observe procedural fairness.... It goes too far, however, to conceive of the function of the Panel as being either to decide a dispute or to make up its mind by reference to competing contentions or competing medical opinions. The function of a Medical Panel is neither arbitral nor adjudicative: it is neither to choose between competing arguments, nor to opine on the correctness of other opinions on that medical question. The function is in every case to form and to give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise.' … [40] There is nothing in the Act to support any such heightened obligation. To the contrary, the self-evident purpose of non-curial assessment of disputes as to permanent impairment was to reduce the role of courts in respect of claims to which assessment applied. There is no reason for any greater content to the obligation to accord procedural fairness to be discerned in a non-curial procedure. That conclusion is wholly consistent with what was said, of the obligation to afford procedural fairness in a substantially similar regime, in Wingfoot at [47]."
In my opinion, Mr Claps has not four discrete bases upon which to complain about the Review Panel's conclusions, but only one. The structure of the latest version of his summons, with its somewhat prolix collocation of enumerated grounds for review, is perhaps an understandable function of the difficulties that flow from the Review Panel's failure to respond to Mr Claps' substantial argument, and the manner in which that particular failure suggests the existence of others.
It is plain enough, from at least the 10 February 2014 application, and the material accompanying it, that Mr Claps was arguing that his significant psychiatric presentation was related to his response to pain. It is not in issue that Mr Claps sustained physical injuries that cause him pain. It does not appear to be controversial that he has some form of psychological or psychiatric pathology. It is also equally clear that his presentation could not be explained by the development of a psychotic illness such as schizophrenia, degenerative brain injury secondary to trauma or subcortical dementia. Mr Claps' presentation is, on one view of the Review Panel's opinion, an unexplained condition that is also unrelated to the motor vehicle accident.
The Review Panel does not in my view at any stage come to terms or engage with what Mr Clap was propounding. The touchstone to that conclusion is to be found in the fact that the Review Panel embraced the late onset of the presenting symptoms as evidence of the absence of a causal connection. It was, on the contrary, the very essence of Mr Claps' submission that his psychiatric or psychological pathology was reactive to the development and deterioration of his pain over time. In other words, the development of that pathology was inversely proportional to Mr Claps' ability to cope with his pain.
The NRMA has contended that this argument was neither clearly articulated in the first place nor substantial in the second place. I disagree. The submission in support of the 10 February 2014 application that "on the balance of probabilities, [Mr Claps'] current mental condition is most likely to be caused by a reaction and response to his injuries sustained in the motor vehicle accident" and that it was therefore a psychological or psychiatric injury is clear and unambiguous. It remained prominent from that time on. So much is clear from the terms of the submission contained in the 9 May 2014 letter that Mr Claps' "current psychological and/or psychiatric condition has been, on the balance of probabilities, caused as a result of the motor vehicle accident and [his] difficulty in dealing and coping with his injuries and the effects of those injuries."
I appreciate and accept that the deliberations, reasoning processes and conclusions of a Review Panel are not to be examined in an overly technical or niggardly fashion in search of error where none exists. I am of the view in this case, however, that the Review Panel failed to consider the substance of Mr Claps' application and probably failed to do so because it misunderstood or misapprehended what was involved. To adopt the terminology used in Rodger v De Gelder, the Review Panel's reasons disclose that it did not engage with the evidence or submissions that the onset of the psychological or psychiatric symptoms corresponded to a time when Mr Claps was struggling to cope with his pain. As in that case, "this was a matter of importance which related to its determination of a non-medical factual question." In so doing the Review Panel failed to respond to Mr Claps' substantial argument based on evidence relied upon by him as to causation of his psychological or psychiatric condition.
A consequence of this conclusion is that the Review Panel cannot be criticised for failing to give reasons. The document produced by the Review Panel is arguably replete with reasons explaining the determination at which it arrived. It does not contain reasons dealing with Mr Claps' substantial argument because it is apparent that it did not apprehend the argument or engage with it in any sense at all. While it may be literally correct to say that the Review Panel did not furnish reasons of the type that Mr Claps was expecting, that is no more and no less than a function of its failure to respond to his substantial argument, rather than a separate and distinct error on its own.
The same can be said of Mr Claps' third ground for review. In one sense the Review Panel's determination amounts to a conclusion that Mr Claps' psychological or psychiatric condition was not caused by the motor vehicle accident. However, in presently relevant terms, that is not a conclusion or determination that flowed from a considered assessment of whether or not Mr Claps was unable to cope with the consequences of his pain. Even though the result for him is the same, the Review Panel did not embark upon any reasoned consideration of his argument, so that its causation findings and conclusions are effectively beside the point. It is not in these circumstances correct to say, as Mr Claps says, that the Review Panel failed to apply the correct test as to causation, because it never adverted to the proper context in which its causation deliberations should have been undertaken. That context was one in which the Review Panel should have dealt with Mr Claps' substantial argument.
The fourth ground of review is in my view also not made out. I consider that the NRMA's submissions in this respect are correct. Section 58(1) of the Motor Accidents Compensation Act is in these terms: "58 Application (1) This Part applies to a disagreement between a claimant and an insurer about any of the following matters (referred to in this Part as 'medical assessment matters'): (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%."
Mr Claps' contention, that the Review Panel was obliged by s 58(1)(d) of the Act to determine what injury Mr Claps had suffered, is neither in terms nor by any obviously available method of reasoning supported by the words of the section.

Conclusions and orders

It follows in my view that the Review Panel has failed to accord Mr Claps natural justice in the sense of procedural fairness, which is a recognised form of jurisdictional error. I therefore propose the following orders: 1. Substitute the State Insurance Regulatory Authority for the Motor Accidents Authority of New South Wales as the second defendant. 2. Declare that the Review Panel Certificate dated 20 April 2015 is void and of no force or effect. 3. Order that the Review Panel Certificate dated 20 April 2015 be set aside. 4. Remit the matter to a differently constituted Review Panel of the State Insurance Regulatory Authority for determination according to law. 5. Order Insurance Australia Ltd trading as NRMA Insurance to pay Mr Claps' costs of and incidental to the summons. 6. Otherwise make no order as to costs.

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: 11 December 2015

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