Coventry v Insurance Australia Ltd T/as NRMA Insurance

Supreme Court of NSW|2018-09-06|Before: Campbell J, Ms J

Judgment

Mr Coventry ("the claimant") was injured in a motor accident on 26 March 2015. He made a claim for motor accident damages under the Motor Accidents Compensation Act 1999 (NSW) from the first defendant, Insurance Australia Limited t/as NRMA Insurance ("the insurer"). His injury was a psychiatric injury diagnosed as a Post-Traumatic Stress Disorder and Major Depressive Disorder. There is a dispute about whether the degree of Mr Coventry's permanent impairment as a result of that injury is greater than 10 percent for the purpose of s 131 the Act entitling him to an award of damages for non-economic loss. The substantial basis of the dispute is that Mr Coventry's symptoms were significantly worsened after his return to work following a dispute with his supervisor on 18 January 2016 about overtime.
Upon the claimant's application the medical dispute was referred for medical assessment under 60 of the Act by the second defendant, State Insurance Regulatory Authority, which has conventionally filed a submitting appearance. Dr Peter Anderson, was the medical assessor to whom the dispute was referred. Under s 61 of the Act he certified that the degree of the claimant's permanent impairment as a result of the injury caused by the motor accident was not greater than the statutory threshold of 10 percent. (Court Book pp 35 - 46).
The claimant applied to the second defendant's proper officer for a referral of Dr Anderson's assessment to a review panel of medical assessors under s 63(1) of the Act. Section 63(3) is in the following terms: The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least 3 medical assessors, but only if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application.
In written reasons dated 24 January 2018 (CB 47 - 49) the proper officer expressed his determination as follows (CB 47): I am not satisfied that there is reasonable cause to suspect that the medical assessment is incorrect in a material respect. According, the review application is dismissed and will be referred to a Medical Review Panel.
By summons filed on 24 April 2018, the claimant applies for judicial review of that determination involving in substance orders in the nature of certiorari and mandamus setting aside the review officer's determination and remitting the matter to the authority for determination according to law by "a different proper officer" (CB 3).

Background facts

This brief statement of background facts is derived from Dr Anderson's statement of reasons which are before me, but are not the subject of the application for judicial review. There has been no "challenge" to the facts as stated by Dr Anderson.
The claimant was born on 23 August 1958. He is married with three adult daughters. He has three grandchildren. As at 26 March 2015 he was employed as a tow-truck driver. He had a past history of previous workplace orthopaedic injury over 35 years ago, but as at the date of the motor accident he was well and had no previous psychiatric history. He provided Dr Anderson with a history of "earlier bullying from a supervisor" which he had put up without psychological consequence. No action was taken on his complaint to management.
As I have said, the motor accident occurred on 26 March 2015. The claimant was at work in his tow-truck which was then stationary on the M4 freeway at Orchard Hill when another vehicle drove into the rear of the tow truck. He had seen the vehicle approach in his rear view mirror "and there was no way to avoid the impact" (CB 37). The collision involved a loud impact and the other vehicle was rendered undriveable. He was tearful when recounting these details to Dr Anderson. The claimant's offsider drove the tow truck back to the depot. When talking to a supervisor and filling out necessary paperwork at the depot, "he broke down". He was sent home and his wife took him to a GP. He did not attend his usual practice as it was not open. He became distressed when the doctor recommended he return to work and an unfitness certificate was provided together with a referral to a psychologist and he underwent counselling. Antidepressant medication was also prescribed by the GP.
There is no issue that the appropriate diagnoses are Post-Traumatic Stress Disorder and Major Depressive Disorder. The claimant's symptoms improved gradually and he returned to work. Sometime before 18 January 2016 the claimant's doctor cleared him for unrestricted work, but he remained unable to work on the freeway and continued to suffer symptoms referable to his psychiatric condition despite the improvement. He was much improved but still suffered symptoms of being: "jumpy"; easily startled; hypervigilant, avoidant of travelling on freeways; unable to sleep and depressed. On his own assessment he was "back to about 80 percent" (CB 38).
On 18 January 2016 before starting work, he had an argument with the supervisor whom he felt had previously bullied him. The subject matter of the argument was not his refusal to work on the freeway, but about overtime. I infer he felt unable to continue, left work and consulted his usual doctor who provided him with a certificate of unfitness and a referral to a psychiatrist. As at the date of Dr Wallace's assessment on 20 October 2017, the claimant had remained unfit for work, continued under psychiatric care and complied with the psychotropic medication the psychiatrist had prescribed. His symptoms worsened involving poor sleep, a continuation of previous nightmares including about the accident, anxiety, depression, alcohol abuse and poor self-care. He continues to avoid freeway travel. He is easily tearful and gained weight against a background of previously stable weight. His alcohol consumption had increased.

Dr Anderson's assessment

As part of the assessment process, Dr Anderson reviewed the reports of treating and medico-legal psychiatrists with which he had been provided. The near unanimous opinion expressed by these medical practitioners was the claimant suffered from post-traumatic stress disorder and major depression. One consultant psychiatrist made the diagnosis of chronic adjustment disorder with mixed anxiety and depressed mood. The greater body of medical opinion was that the claimant's psychiatric condition was caused by the motor accident and aggravated by the workplace incident. Dr McClure regarded the claimant's symptoms as stabilised by 18 January 2016. He expressed the view that additional symptoms and impairments after that date were "related to the workplace incident … and unrelated to the subject accident" (CB 41).
Dr Wallace identified as a significant issue whether apportionment was required with respect to the effects of the incident of 18 January 2016. His impression was that "there was a low symptomatic load…prior to the workplace incident" and that the claimant "was functioning with only mild impairments at that stage". Since the workplace incident, Dr Anderson considered (CB 42): The history suggests very significant impairments in all areas of functioning and a greatly increased symptom load. He considered that the workplace incident had "aggravated a condition of Post-Traumatic Stress Disorder and Major Depressive Disorder".
Dr Anderson identified the statutory task he was required to perform in the following terms (CB 43): The following table addresses current whole person impairment. According to the [Impairment] Guidelines I am required to determine the degree of whole person impairment caused by the subsequent events of 18 January 2016. I am also required to determine the degree of whole person impairment caused by the subject accident. I will first determine the impairment caused by the events of January 2016 by tabulating current impairment and then deducting from that pre-existing impairment, that is impairment as it was prior to 18 January 2016. (My emphasis.)
Adopting this methodology, Dr Anderson assessed "the degree of whole person impairment caused by the subsequent events of 18 January 2016" and "the whole person impairment caused by the subject accident" in accordance with the Psychiatric Impairment Rating Scale prescribed by Chapter 7 of the Guidelines for the Assessment of the Degree of Permanent Impairment. It may be important to point out, however, that Dr Anderson seems to have regarded the degree of whole person impairment caused by the motor accident as synonymous with a "pre-existing impairment, that is impairment as it was prior to 18 January 2016".
Adopting this approach Dr Anderson assessed the degree of whole person impairment caused by the workplace incident as 22 percent. He assessed the whole person impairment as it was immediately prior to 18 January 2016 as 5 percent. He then went on determine the degree of whole person impairment caused by the events of 18 January 2016 by deducting the whole person impairment as at 18 January 2016 of 5 percent from the current whole person impairment of 22 percent and attributed the difference of 17 percent to the subsequent event. He carried out an inverse calculation by deducting the difference of 17 percent from "the current whole person impairment of 22 percent, "thus the degree of whole person impairment caused by the subject accident is 5 percent". This is clearly circular reasoning.

The decision of the proper officer

In his determination of 24 January 2018, the proper officer recorded that the claimant argued that Dr Anderson's assessment was incorrect with regard to apportionment. The proper officer recorded that the claimant accepted that he had suffered a subsequent injury or condition but argued "that subsequent injury or condition is not unrelated to the injury or condition arising out of the first event" (CB 48[6]) (my emphasis). The proper officer recorded the argument made on behalf of the claimant in the following terms (CB 48[7]): … The claimant's diagnosis of PTSD and associated disabilities arising from the first event caused an inability to properly cope and respond to the second event, resulting in an exacerbation of the original condition. The second event was not an intervening event which broke the chain of causation, rather the exacerbation caused by the second event directly flowed from the injury caused by the first event. The claimant also relied upon the reports of other psychiatrists supporting that submission.
The proper office referred to the portion of Dr Anderson's reasons summarised at [13]-[14] above observing that Dr Anderson found "a work argument involving overtime [was] completely distinct from the subject accident" (CB 48 [9]). I interpolate it is not clear that Dr Anderson made such a finding.
The proper officer concluded that the assessor had "considered the issue of causation and apportionment", weighed up competing evidence, and used his own clinical judgment to make an assessment. The proper officer was not satisfied Dr Anderson "has misinterpreted" Clause 1.36 of the guidelines "as the assessor has found objective evidence of a subsequent and unrelated injury or condition to the same region". The proper officer regarded that finding as "consistent with Clauses 7.8 and 7.10 of the permanent impairment guidelines".
The proper officer recorded the insurer's argument to the effect that the consideration that other doctors had expressed different opinions on apportionment and causation based on the same evidence was not indicative of an error in the assessment. The proper officer concluded (CB 48 [11]): … Assessor Anderson has clearly considered all of the evidence in his certificate and used his clinical expertise in reach (sic) a conclusion based on that evidence. The fact that alternate conclusions are possible, and may have been expressed, does not satisfy me that there is reasonable cause to suspect a material error.

Submissions of the plaintiff

In summary, Mr Robinson SC, who appeared with Mr Brown for the plaintiff, argued that the proper officer's decision was affected by jurisdictional error in that he misinterpreted and failed to correctly apply guideline 1.36 of the permanent impairment guidelines; failed to apply guideline 1.23 of the guidelines and misapplied the legal principles of causation. Counsel accepted that the decision of Hoeben J (as the Chief Judge then was) in GIO General Limited v Smith [2011] NSWSC 802; 59 MVR 69 authoritatively stated the legal interpretation of guideline 1.36. However, the workplace incident of 18 January 2016 was not "an unrelated injury or condition" as explained by Hoeben J.
It was also argued, comparing guideline 1.36 with guideline 1.33, that there was no legal requirement to make the subtraction Dr Anderson employed "unless there is identified a novus actus" (CB 21 [35]).
As guideline 1.23 requires the assessor to "only consider the impairment as it is at the time of assessment" there was "reason to suspect" that by assessing the impairment at an earlier date, Dr Anderson fell into error by failing to apply a mandatory consideration. Reference was made to Allianz Australia Insurance Limited v Motor Accidents Authority of New South Wales [2011] NSWSC 102; 57 MVR 319.
It was also argued that the assessment required of Dr Anderson was informed by common law principles of legal causation. Reference was made in particular to Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 at 528: … a negligent tortfeasor does not always avoid liability for the consequences of a plaintiff's subsequent injury, even if the subsequent injury is tortiously inflicted. It depends on whether or not the subsequent tort and its consequences are themselves properly to be regarded as foreseeable consequences of the first tortfeasors negligence. It is apparent from guidelines 1.7 to 1.9 that common law principles of causation are intended to inform the question of the determination of the degree of permanent impairment of an injured person as a result of the injury caused by the motor accident.
Mr Rewell SC, who appeared with Ms Gumbert for the insurer, submitted that the claimant's grounds for review point "to a number of asserted errors to Dr Anderson's approach to assessing impairment caused by the motor accident on 26 March 2015" (original emphasis). Counsel acknowledged that (CB 29 [24]): If the plaintiff does not establish that there was error in Dr Anderson's approach to his assessment, the challenge to the decision of the proper officer … must fail. (Original emphasis)
Counsel argued that Dr Anderson correctly applied guideline 1.36 "when dealing with the consequences of the workplace incident" and in accordance with Hoeben J's decision in GIO General Limited v Smith. They emphasised that Hoeben J interpreted the phrase "unrelated injury or condition" in guideline 1.36 as referring to the event causing the subsequent injury, and not the medical description of the injury: GIO General Limited v Smith at 81 [49]. From this they argued that any "additional impairment arising from the workplace incident" had to be disregarded when assessing "impairment arising from psychiatric injury caused by the motor accident".
The insurer argued that the methodology I have described above when dealing with Dr Anderson's assessment was the approach required by application of the PIRS scale prescribed by Chapter 7 of the guidelines.
It was submitted it was wrong to argue that guideline 1.23 prevented Dr Anderson from making an assessment of the plaintiff's impairment as it was immediately prior to the workplace incident. This argument was inconsistent with GIO General v Smith and was based upon a complete misunderstanding of Allianz Australia Limited v Motor Accidents Authority.
After my judgment was reserved, Mr Rewell and Ms Gumbert drew my attention to the decision of Davies J in Smith v Insurance Australia Limited [2018] NSWSC 1606 and I received further written submissions from both parties concerning that decision. The insurer argued that the issues, the subject of that decision, were virtually identical to those with which I am concerned and that it confirmed the approach adopted in GIO General v Smith and Allianz Australia v Motor Accidents Authority supporting the insurer's argument.
The claimant argued that on the question of the application of legal principles of causation, Davies J decision is incorrect or it is plainly wrong (further submissions [14]). It was pointed out that Davies J was judicially reviewing a decision of an appeal panel conducting a review under s 63, a different legal context and that his Honour held that the review panel's finding as to causation was a non-reviewable finding of fact. It was argued that Davies J's decision did not cast any further light on the issues that I have to determine.

Applicable principles

It is essential to bear in mind that the decision under review is that of the proper officer and not of Dr Anderson. Having said that, both parties agreed that the logically anterior question, by way of an intermediate governing consideration, is whether Dr Anderson's assessment was shown to have been affected by error. In considering this argument, it is fundamental to bear in mind that s 63(3) of the Act leaves to the proper officer, and not the Court, satisfaction about whether there are reasonable grounds to suspect that a medical assessment is incorrect in a material respect.
Authority binding on me establishes that a decision of a proper officer under the Act may be amenable to orders in the nature of the prerogative writs under s 69 Supreme Court Act, at least for jurisdictional error: Rodger v De Gelder (2011) 80 NSWLR 594; QBE Insurance (Australia) Limited v Miller [2013] NSWCA 442; (2013) 67 MVR 322; Henderson v QBE Insurance (Australia) Limited [2013] NSWCA 480; 66 MVR 69; De Gelder v Rodger [2014] NSWSC 872. These cases refer to the implied power of the proper officer to refer an application to resolve a medical dispute for a further assessment under s 62 of the Act. As Basten JA made clear in QBE v Miller at [35], in that context, the proper officer's power depends "on the satisfaction of the proper officer as to the requirements set out in [s 62(1A)]". Accordingly, it is not permissible for the Court to seek to decide as matter of objective fact whether the statutory conditions about which the proper officer must be satisfied were established by the evidence led in court. A fortiori, the Court's power must be similarly limited when reviewing a decision under s 63(3) which in express terms turns upon the satisfaction of the proper officer "that there is reasonable cause to suspect that the medical assessment was incorrect in the material respect".
The legal standard to be applied by the court in these situations was expressed by Basten JA in QBE and Miller at [36] - [37] in the following terms: Once it is accepted that the characterisation of the information is a matter to be considered in the first instance by the proper officer and not one to be determined by this court afresh on a judicial review application, the review proceedings are limited to determining whether the proper officer's opinion has been properly formed according to law: Buck v Bavone [1976] HCA 24; 135 CLR 110 at 118-119 (Gibbs J); D'Amore at [220]. The critical question is thus "whether the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds": Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32 ; 78 ALJR 992 at [38] (Gummow and Hayne JJ). Further, as explained by Latham CJ in R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42 ; 69 CLR 407 at 432: If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide. Such standards set the jurisdictional parameters of the power conferred on the officer. (Emphasis added.)
It is notable that the explanation given by Latham CJ in R v Connell equates an opinion formed by an administrative decision maker by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation with an opinion shown to be "arbitrary, capricious, irrational or not bona fide".
It is also worth setting out the passage from Buck v Bavoni (1976) 135 CLR 110; [1976] HCA 24 cited by Basten J. There Gibbs J (as the Chief Justice then was) said (at pp 118 - 9): It is not uncommon for statutes to provide that a board or other authority shall or may take certain action if it is satisfied of the existence of certain matters specified in the statute. Whether the decision of the authority under such a statute can be effectively reviewed by the courts will often largely depend on the nature of the matters of which the authority is required to be satisfied. In all such cases the authority must act in good faith; they cannot act merely arbitrarily or capriciously. Moreover, a person affected will obtain relief from courts if he can show that the authority has misdirected itself in law or that it has failed to consider matters that it was required to consider or has taken irrelevant matters into account. Even if none of these things can be established, the courts will interfere if the decision reached by the authority appears so unreasonable that no reasonable authority could properly have arrived at it. However, where the matter of which the authority is required to be satisfied is a matter of opinion or policy or taste it may be very difficult to show that it has erred in one of these ways, or that its decision could not reasonably have been reached. In such cases, the authority will be left with a very wide discretion which cannot be effectively reviewed by the courts. (citations omitted).
It is well to point out at the outset that the claimant does not argue that the opinion of the proper officer in the present case is vitiated because it was arbitrary, capricious, irrational, not bona fide or affected by legal unreasonableness. At the same time the requirement specified in s 63(3) by the expression "only if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect" is not "a matter of opinion or policy or taste": it is a question of fact, or rather mixed fact and law, involving an evaluative judgment.
Basten JA addressed directly the legal requirements of a valid exercise of the s 63(3) power in Meeuwissen v Boden (2010) 78 NSWLR 143; [2010] NSWCA 253 at [18] - [24]. While one is naturally reluctant to "cut and paste" large, apparently undigested, tracts of even leading authorities into a judgment, the guidance provided by Basten JA needs to be considered fully and in context. [18] The phrase "in a material respect" is imprecise. It undoubtedly can mean that "the error is material to the decision in the sense that it contributes to it so that, but for the error, the decision would have been, or might have been, different": Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353(2010) (Mason CJ). On the other hand, it can refer to the process by which the outcome was achieved. The latter approach may be more likely, if the body determining the nature of the error is not itself required or permitted to vary the outcome. There are various considerations in s 63 which suggest that the latter view is to be preferred. [19] First, what must be incorrect in a material respect is "the medicalassessment" and not the certificate which results from the assessment. Thesubject matter of a medical assessment is a "medical dispute": s 63(1). A"medical dispute" is defined to mean "a disagreement or issue to which thisPart applies": s 57. The Part applies to a disagreement about one of the matters (referred to as "medical assessment matters") set out in s 58(1). These include whether the degree of permanent impairment is greater than 10%: s 58(1)(d). The end result of a medical assessment is a certificate as to a medical assessment matter: s 61(1). In this context, to describe a medical assessment as incorrect in a material respect does not necessarily require that the certificate would, or might, have been different, absent the error. [20] Secondly, and consistently with the first reason, the phrase "in a materialrespect" is less precise than "capable of having a material effect on theoutcome of the previous assessment", being the language of s 62(1A). While it is true that this subsection was added with effect from 1 October 2008, it issignificant that the legislature declined to adopt the same language as existedin s 63(3). Further, although the same amending Act varied s 63, it did not vary s 63(3): see Motor Accidents Compensation Amendment (Claims and Dispute Resolution) Act 2007. [21] Thirdly, the power conferred on the proper authority is not discretionary,once the requisite state of satisfaction is achieved. Thus, once satisfied as tothe relevant matter, the proper officer "is to" arrange for the application to bereferred: s 63(3). [22] Fourthly, the matter as to which the proper officer is to be satisfied, is notthat the medical assessment was incorrect in a material respect, but only that"there is reasonable cause to suspect" that it was. This language is inconsistent with the proper officer being expected (let alone required) to carry out an assessment or calculation, as opposed to identifying possible error. [23] Fifthly, and following from the last point, where there is doubt as to theextent of the power of an administrative officer, the nature of the power itselfmust be taken into account. The power under s 63 is that of a gatekeeper, not a decision-maker. Where there is reasonable cause to suspect that a significant error has been made, fairness suggests that the review should be allowed to proceed. In other words, the injured party is entitled to a decision reached in accordance with a proper understanding of statutory scheme and the facts: where an important fact has been ignored, the assessment has not been properly undertaken and the statutory right subverted. Where a construction available which would allow a full and proper assessment to occur, in place of a flawed assessment, that construction should be preferred. [24] Finally, the role of the review panel is not limited to a review of "that aspect of the assessment" affected by possible error. Rather, the panel is to reconsider all of the matters in dispute: s 63(3A). This approach no doubt reflects the difficulty in some cases of dividing an assessment of permanent impairment into aliquot parts. More importantly, it may be seen to reflect an intention that a flawed process is to be cured, so that a proper assessment has been made of the whole of the matters in dispute.
For present purposes, the third, fourth, fifth and final factors identified by his Honour are of particular relevance. They are that the power conferred on the proper officer is not discretionary, but must be exercised if the state of statutory satisfaction is actually achieved. It is not necessary for the proper officer to be satisfied that the medical assessment was actually incorrect, but only that "there is reasonable cause to suspect" that it was. From this flows the consideration that the proper officer is a gatekeeper and not a decision maker. If there is reasonable cause to suspect, as Basten JA put it, that a significant error has been made, fairness suggests the review should be allowed to proceed.
I interpolate that in accordance with the unanimous decision of the High Court of Australia in George v Rockett (1990) 170 CLR 104; [1990] HCA 26 at 112 it is not necessary for the proper officer to actually entertain that suspicion himself. The question for the proper officer is whether he or she is satisfied that there are reasonable grounds for the requisite suspicion; an objective standard, not "a matter of opinion, or policy, or taste". Moreover, the High Court approved the statement of Lord Devlin in Hussien v Chong Fook Kam [1970] AC 942 at p 948, that suspicion "in its ordinary meaning is a state of conjecture or surmise where proof is lacking". The High Court observed, "the facts that can reasonably ground a suspicion may be quite insufficient, reasonably, to ground a belief" (at 115). However, a suspicion is "more than mere idle wondering … it is a positive feeling of actual apprehension or mistrust", amounting to "a slight opinion but without sufficient evidence": Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266; [1966] HCA 21 at page 303 per Kitto J. His Honour also said: … a reason to suspect that a fact exists is more than a reason to consider or look into the possibility of its existence. From this it can be said that the proper officer's power, indeed duty to refer for review, is enlivened if there is any conjecture, surmise, apprehension or slight opinion that the state of affairs described by s 63(3) i.e. that the medical assessment was incorrect in the material respect, exists.
Continuing with Basten JA's analysis in Meeuwissen, the "gatekeeper" power conferred on the proper officer favours allowing a review to proceed to enable "a full and proper assessment to occur in place of a flawed assessment" where the proper officer identifies reasonable grounds for the suspicion and I add, whether or not the proper officer himself or herself actually holds that suspicion. And finally Basten JA pointed out the review panel of three medical assessors upon referral is to reconsider all of the matters in dispute. This requirement reflects a statutory intention that a flawed process is to be cured.
With Basten JA's analysis firmly in mind, it is perhaps difficult to understand why a proper officer would undertake for himself or herself the task of deciding conclusively whether or not the impugned assessment is incorrect in a material respect. Even a subjective conviction that the medical assessment is correct does not necessarily negative a real possibility that it may be incorrect for the reasons advanced by an applicant for review. This, of course, does not mean that the proper officer must always accede to the application for review. To do so would be a denial of jurisdiction and a negation of the gatekeeper role. But the personal view of the proper officer is not definitive of the question of whether reasonable grounds exist to suspect the assessment may be incorrect in a material respect. The proper officer's evaluation is to occur at the level of fairly arguable possibility. If there are reasonable grounds to impugn the previous assessment, the final decision about whether it is incorrect or not should be made by the review panel and not by the proper officer. However, I acknowledge that these observations do not found a ground of review advanced by the claimant and I therefore put them to one side.

Decision

It is necessary to set out some additional legal considerations. Among the "medical assessment matters" referred to in s 58 is the following (s 58(1)(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 percent. As I have said, the significance of this matter is that s 131 of the Act provides that no damages may be awarded for non-economic loss unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10 percent. This is a statutory construct for the purpose of rationing the limited funds available from compulsory insurance for the payment of compensation to the victims of motor accidents, especially "in cases of relatively minor injuries": s 5(1)(e) of the Act. However, it is clear that in the determination of the statutory degree of permanent impairment ordinary principles of legal causation are in play. This follows from the expression "as a result of the injury caused by the motor accident". The substantive law of legal causation applicable to motor accident cases is found in the ordinary common law of negligence as modified by the Civil Liability Act 2002 (NSW): s 5D and s 3B(2)(a). Naturally primacy must be given to the words actually used in a governing or applicable statute in their statutory context.
The phrase, "as a result of" may sometimes, depending upon context, connote a closer or more proximate connection between event and consequence than the phrase, "caused by": see Pickersgill v Freight Bases Pty Ltd [1983] 3 NSWLR 117 at [119]. However, in Sutherland Shire Council v Baltica General Insurance Co Limited (1996) 39 NSWLR 87 at [94] it was held the phrase "results from" in the apportionment provisions of the Workers Compensation Act 1987 (NSW) "gives rise to questions of fact which, like all questions of causation are almost universally resolved by applying ordinary common sense" and experience (per Clarke JA). His Honour having referred to other then recent authorities expressed the conclusion (at [97] - [98]): I do not think there is any impediment to my acceptance of the view that the common law test applies and that the relevant enquiry directs attention to whether the injury caused or materially contributed to the incapacity. Accordingly, the approach evident [in earlier cases] which reflected the restrictions imposed by the search for a proximate or direct cause, should, in my view no longer be regarded as sound. As I have said the common law test is now modified by s 5D Civil Liability Act.
It should be borne in mind that in Allianz Australia Insurance Limited v GSF Australia Pty Ltd (2005) 221 CLR 568; [2005] HCA 26 the High Court of Australia was called upon to construe the definition of "injury" inserted into s 3 of the Motor Accidents Act 1988 (NSW) by amendment made by the Motor Accidents Amendment Act 1995 (NSW). Those amendments are substantially reflected in the current s 3A of the Act. The amended definition of injury includes the expression, "if, and only if, the injury is a result of and is caused during" one or other of four stated conditions (my emphasis). Gummow, Hayne and Heydon JJ said (at [93] - [94]): [93] In argument, some suggestion was conveyed that the terms "result" and "cause" have different meanings and, in particular, that "cause" narrows "result". That is not so. The drafting in this second part of para (a) of the definition seeks to accommodate two cumulative criteria and does so by telescoping them into a grammatical contortion. [94] One criterion is that the injury be sustained during certain events, including the driving of the vehicle or a collision with the vehicle or its running out of control. The other criterion is that the injury be sustained as a consequence of those events. The phrase "a result of" is linked to the first or temporal criterion; the phrase "is caused" is linked to the second criterion. For subpara (iv), the temporal criterion is that the injury be a result of the use or operation of the vehicle because it was sustained during that activity. The other criterion is that the injury be caused by a defect in the vehicle. Their Honours went on to say (at [102]): The use in the definition of the emphatic and intensive phrase "if, and only if" directs attention to notions of predominance and immediacy rather than to more removed circumstances. The definition of "injury" looks, for the CTP insurance system, to notions of proximate cause found in insurance law. That construction is consistent with the subject, scope and purpose of the 1995 [Amendment] Act.
In s 58(1)(d) of the Act, the juxtaposition of each expression connoting a causal link, "as a result of" and "caused by", appear in a somewhat different context and do different work from the similar expressions which remain in s 3A of the Act. Nor is there anything emphatic or intensive about the language, or its context, suggesting the importation of "notions of predominance and immediacy" underpinning the "notions of proximate cause" found in insurance law". Clearly the impairment must have a causal connection with the injury which must in turn have been caused by the motor accident. But in my judgment the statute requires no more than the impairment be a consequence of the injury caused by the motor accident. And in this regard the general considerations of causation in the law of negligence have a part to play; bearing in mind that s 5D Civil Liability Act is concerned with the necessary legal connection between a defendant's negligence and the harm suffered by the plaintiff, a broader question. Strictly s 58(1)(d) has a more limited purpose solely connected with the question of whether the s 131 threshold has been crossed: Brown v Lewis (2006) 65 NSWLR 587; [2006] NSWCA 87 at [20] - [24].
Under s 133 of the Act the assessment of the degree of permanent impairment is to be made in accordance with motor accident guidelines issued for that purpose. The applicable guidelines commenced on 1 October 2007. Guidelines 1.7 and 1.9, under the heading "causation of injury", make clear that the common law principles to which I have referred are applicable. Clause 1.9 is in the following terms: There is no simple common test of causation that is applicable to all cases, but the accepted approach involves determining whether the injury (and the associated impairment) was caused or materially contributed to by the motor accident. The motor accident does not have to be a sole cause as long as it is a contributing cause, which is more than negligible. Considering the question "would this injury (or impairment) have occurred if not for the accident?" may be useful in some cases, although this is not a definitive test and may be inapplicable in circumstances where there are multiple contributing causes.(My emphasis.)
Emphasis was placed upon guideline 1.2(3) which is in the following terms: The evaluation should only consider the impairment as it is at the time of the assessment. (Original bold) By guideline 1.3, "if the text is in bold, it is a directive as to how the assessment should be performed."
Much of the argument of counsel centred upon guideline 1.36 which I will set out in full: The evaluation of permanent impairment may be complicated by the presence of an impairment in the same region that has occurred subsequent to the relevant motor accident. If there is objective evidence of a subsequent and unrelated injury or condition resulting in permanent impairment in the same region its value should be calculated. The permanent impairment resulting from the relevant motor accident should also be calculated if there is no objective evidence of the subsequent impairment, its possible presence should be ignored. (My emphasis). In the arguments of counsel this provision was compared and contrasted with, in particular, guideline 1.33 applying in cases where there is objective evidence of a pre-existing symptomatic permanent impairment in the same region. In its express terms that clause requires an assessment to be made of the pre-existing impairment and the subtraction of its value "from the current whole person impairment value". As can be seen, guideline 1.36 does not in express terms require any subtraction, deduction or apportionment. All that is required is the calculation of the value of the subsequent and unrelated permanent impairment. And a calculation of the permanent impairment resulting from the relevant motor accident.
This provision was central to Hoeben J's decision in GIO General v Smith (at [48] - [49)]: I have concluded that apportionment was possible under the Guidelines, as they presently exist, and based on the factual findings properly made by the Review Panel, ie that the two motor accidents contributed to the Major Depressive Disorder and as such, to the total value of the Whole Person Impairment, ie 17 percent. I have reached that conclusion by adopting the interpretation of Guideline 1.36 submitted by GIO and NRMA. I have concluded that the correct interpretation of the second sentence in Guideline 1.36 is that the words "unrelated injury or condition" refer to the event causing the subsequent injury, not the medical description of the subsequent injury. Unless such an interpretation is given to those words, Guideline 1.36 has little work to do since most injuries resulting in permanent impairment in the same region [as a previous injury] would on the Review Panel's interpretation not be an unrelated injury.
His Honour then dealt with an argument that the value of the subsequent permanent impairment "has to be deducted" in the following terms (at [53] - [55]): The first and most obvious difficulty with that argument is that the Guideline does not in terms refer to any deduction. It says no more than that two calculations should be made. I have concluded that Guideline 1.36 does not require a deduction in every case as is implicit in Mr Smith's submission. A deduction may well be required if the subsequent "unrelated injury" is an injury which is not brought about by a motor accident. That is not so in circumstances such as we have here where the subsequent permanent impairment is caused by another motor accident. In that case the Guideline requires that the value of each permanent impairment should be calculated. Not only is no deduction required, but it may be inappropriate. Another difficulty with this submission by Mr Smith, which was not articulated but which was implicit in it, is that it assumes that the value of the permanent impairment arising from "the relevant motor accident" was to be calculated at or about the time of the occurrence of the second motor accident. As Guideline 1.23 requires, however, the impairment is to evaluated at the time of the assessment. In the circumstances of this case, this is important because the permanent impairment caused by both motor accidents did not develop and become "permanent" until a year or more after the second motor accident.
Hoeben J considered his approach was supported by the decision of Hidden J in Allianz Australia v Motor Accidents Authority. That case, however, concerned guideline 1.33 dealing with pre-existing symptomatic impairments rather than guideline 1.36, although his Honour referred to both provisions in the course of his judgment. His Honour's conclusions were expressed at paragraphs [31] and [32] of his judgment in the following terms: Clearly, the first accident contributed to Mr Cha's impairment as it was assessed at the time of the review. The panel found that that accident had caused his depressive condition and that the second accident had exacerbated it. If the panel had assessed the permanent impairment caused by the first accident it would have been in a position to apportion the whole person impairment it found between the two accidents. Clause 1.33 (and, if applicable, cl 1.36) required it to do so. If the interpretation of cl 1.33 urged by the defendants were correct, the panel would assess the permanent impairment arising from the first accident but be bound to disregard it when determining the impairment arising from the second. Such a result would be absurd, and it lends force to Mr Rewell's position concerning what he described as the dominant clause, cl 1.23. That clause requires the evaluation of impairment as at the time of assessment, whether that impairment arises directly from the accident in question or is a pre-existing or subsequent impairment within the meaning of cll 1.33 and 1.36. (My emphasis.)
It is not insignificant that each of these decisions, and the decision of Davies J in Smith v Insurance Australia, were concerned with the exercise of the Court's powers of judicial review of decisions by a medical review panel after the matter had been referred by the proper officer under s 63(3). This is significant because the Appeal panel, in Basten JA's language from Meeuwissen was empowered to make a proper assessment of the whole of the matters in dispute "as opposed to identifying possible error". In each of GIO General v Smith and Allianz Australia v Motor Accidents Authority the legality of the determination was reviewed in circumstances where in each case for different reasons, the review panel could not, or did not, make an apportionment of whole person impairment where the injured person was the victim of consecutive motor accidents, each informing to an unspecified degree according to the certificate of the review panel, the degree of whole person impairment certified. Smith v Insurance Australia dealt with a psychiatric impairment resulting from a motor accident aggravated by the effects of the subsequent death of the injured person's brother-in-law. For present purposes, Davies J's conclusions are set out at [29] to [32] and in the following terms: [Hoeben J] found support for [his] approach in the judgment of Hidden J in Allianz, and his Honour set out the portions of the judgment in Allianz which I have set out at [25] above. The plaintiff's principal point in the present matter derives from what Hoeben J said in Smith at [49], namely, that the words "unrelated injury or condition" refer to the event causing the subsequent injury. The plaintiff says that an event causing a subsequent injury constitutes the gateway to cl 1.36 applying. For that gateway to operate, the plaintiff says, it must be shown that the subsequent event caused injury in a manner determined in the same way as s 5D and the common law determines causation. The plaintiff says that in the present case the Panel did not determine that the brother-in-law's death caused psychiatric injury. All that they found was that the psychiatric injury already suffered in the motor accident was worsened or made more severe by the brother-in-law's death. In that way there was no unrelated injury. In my opinion, this argument was put and lost in Allianz. In that case Hidden J said at [23]: … In the present case [Mr Romaniuk] argued, the condition caused by the second accident was not unrelated because the panel found it to be an exacerbation of the condition arising from the first. … In the present case Mr Cha's condition was exacerbated by a wholly unrelated event, a second accident, so that that exacerbation was relevantly unrelated. In the present case the Panel found that the plaintiff's condition was exacerbated ("worsened" or made "more severe") by the brother-in-law's death which was a wholly unrelated event, so that that exacerbation was relevantly unrelated.
As I have already pointed out in any event, his Honour found that the Panel's conclusions as to causation were questions of fact not amenable to judicial review. As I have indicated, the same cannot be said of the decision of the proper officer who was not empowered to make any assessment or final determination.
As I have said more than once, the claimant does not challenge the correctness of the interpretation of guideline 1.36 struck by Hoeben J. I observe however, with great respect, uninstructed by Hoeben J's approach I would not have arrived at the same conclusion. The construction of the phrase "unrelated injury or condition" as an unrelated event causing the subsequent injury, not the medical description of the subsequent injury, does not seem to be the ordinary meaning of the phrase in the guideline. The expression "subsequent and unrelated injury", for instance implies that there may be a subsequent and related injury occurring, and if so the guideline would not apply. The real emphasis is upon matters which are unrelated. The word "event" may accommodate the idea of injury if understood as "injurious event". But it is difficult for "event" to accommodate the idea conveyed by "condition", which must be taken to mean "medical condition". Clearly, a subsequent and unrelated medical condition may arise as an autogenous entity without the occurrence of a precipitating injurious event. Such an autogenous condition, naturally, is capable of giving rise to an impairment in the same region as an impairment as a result of an injury caused by a motor accident. On the other hand, if "event" is merely a reference to the objective circumstances, external to the person, in which an injury is received, and separate from the physiological change itself, then the word, "event" could not connote the ordinary meaning of either "injury" or "condition".
However, I will put those considerations to one side. The real question is whether the relevant subsequent injury or condition is "unrelated". Treating the relevant event as no more than an occurrence giving rise to an injury or condition it is easy to see how the subsequent motor accident in GIO General v Smith; the prior motor accident in Allianz Australia; and the death of the brother-in-law in Smith v Insurance Australia could all be treated as unrelated to the occurrence of the "relevant motor accident". However, all of these guidelines are concerned with the assessment or evaluation of permanent impairment as a result of injury caused by a motor accident. That is to say, the guidelines in question are concerned with the measurement of the impairment, and impairment is itself a consequence of an event.
I should add that what guideline 1.36 addresses is not whether a subsequent event is related to the relevant motor accident, but whether a subsequent impairment in the same region is related to the permanent impairment as a result of injury caused by the relevant motor accident.
It is quite clear under s 58(1)(d) of the Act that neither the motor accident, nor the injury caused by it, legally need be the sole cause of the impairment. So much is recognised by the guidelines to which I have referred. By application of ordinary legal principle, a single impairment within s 58(1)(d), or perhaps more correctly s 131 of the Act, may have more than one cause. And it will be sufficient if the motor accident has made a material contribution, provided it is a necessary condition of the occurrence of the impairment. A subsequent event may also be a separate cause of the same impairment which is a result of an injury caused by the motor accident without severing the chain of causation. The clearest example, of course, is where medical treatment rendered for the injury unintentionally worsens its consequences. No one would seriously suggest that such medical treatment was unrelated or that the impairment assessed following it needs to be reduced or apportioned.
As Professor Luntz pointed out (Assessment of Damages for Personal Injury and Death, 2 Ed, Butterworths 1983, page 138 [2.5.01] aggravation by medical treatment is not the only category of applicable case. The learned author said: In the cases mentioned in the present Section the fact that the handicap created by the first accident contributed either to the happening or the severity of the subsequent accident means that the events may be regarded as causally related. In the next Section there will be included cases in which, even though the subsequent accident might not have happened but for the first, the plaintiff was at the time of the subsequent accident not handicapped by the effects of the first, nor were the consequences of the subsequent accident aggravated by the effects of the first. In such circumstances the two sets of consequences are causally independent.
The learned author referred to Fishlock v Plummer [1950] SASR 176 where Mayo J (at 181) "suggested two propositions" (Luntz at 139 (2.5.02)): [i] Where further injury [to the plaintiff] results from a subsequent mishap … which would not have been sustained had he not been in the physical condition caused by the defendant's neglect, the added damage is directly linked with the original catastrophe. [ii] If the injury would have resulted from the subsequent mishap had the plaintiff been in normal condition of bodily health, but the damage sustained is greater because of his injured state, the extra damage, but only the extra damage, is sufficiently connected.
In Bennett v Minister of Community Welfare (1992) 176 CLR 409 at 429 - 430, McHugh JA explained the jurisdictional basis upon which separate and independent acts may be concurrent causes of the same loss. His Honour did so with reference to Grant v Sun Shipping Co. Limited [1948] AC 549 at p. 563: It is a "well settled principle that when separate and independent acts of negligence on the part of two or more persons have directly contributed to cause injury and damage to another, the person injured may recover damages from any one of the wrongdoers, or from all of them". If a doctor has negligently omitted to diagnose a condition which leads to a patient's death, it is no answer to a claim of actionable negligence that subsequently another doctor negligently failed to diagnose the condition at a time when its ultimate consequence could have been avoided. Each negligent omission was a separate and independent cause of the patient's death. Nor does it make any difference to that conclusion, if the second doctor has stated positively that the patient was not suffering from that condition. The causal connection between the defendant's negligence and the plaintiff's damage is negatived by the subsequent conduct of another person only when that conduct is "the free, deliberate and informed act or omission of a human being intended to exploit the situation created by the defendant" [footnote omitted]. When the subsequent conduct is a cause of the damage, but is unrelated to the situation created by the earlier negligence, the subsequent conduct and the earlier negligence are treated as separate and independent causes of the same damage. The omission of the [respondent] to obtain independent and competent legal advice as to whether the appellant had a right of action was, therefore, as much a cause of the appellant's loss as the subsequent advice of the barrister that he had no cause of action. Each was a separate and independent cause of the appellant not instituting proceedings for damages before [the expiration of the limitation period]. To these references, of course may be added the reference the claimant's counsel made to Mahony v J Kruschich at [23] above.
Guideline 1.36 is concerned with accommodating in the evaluation of permanent impairment as a result of injury caused by a motor accident the presence of impairment in the same region that has occurred subsequent to the relevant motor accident. Not all such subsequently occurring impairments are to be excluded from the evaluation of the permanent impairment as a result of injury caused by the motor accident. Guideline 1.36 itself carves out the area for possible exclusion. The area for possible exclusion is where there is objective evidence of a subsequent and unrelated injury or condition resulting in permanent impairment in the same region. In deciding whether there is objective evidence of a subsequent and unrelated injury or condition resulting in permanent impairment in the same region, the medical assessor must have regard to the principles of the law of causation I have referred to above, the language of s 58(1)(d) and Guidelines 1.7 to 1.9.
Turning then to the plaintiff's argument in the present case. The principles of law I have discussed above, demonstrate that it is not the occurrence of every subsequent injurious event or condition which should be taken as disrupting the causal connection between impairment, injury and motor accident. It is only those which are unrelated which may have this effect. It is notable, as has been remarked in earlier cases, that guideline 1.36 does not in its terms call for a reduction or apportionment, but as Hoeben J pointed out in General Insurance v Smith, its language is such that a reduction or apportionment may be called for in appropriate cases. But it will only be appropriate to make such a reduction or apportionment by reference to Guideline 1.36 where the subsequent degree of impairment, or a portion of it, on objective evidence is unrelated. I repeat not every subsequent injury or condition is unrelated to the relevant motor accident. I am satisfied that in determining whether he was satisfied that there were reasonable grounds to suspect that the medical assessment of Dr Anderson was incorrect in a material respect having regard to the particulars set out in the application, the proper officer misdirected himself as to the principles of causation established by the general law, s 58(1)(d) of the Act and guideline 1.36.
The consideration that the work incident of 18 January 2016 worsened, even markedly, the claimant's condition caused by the motor accident, did not of itself mean that the subsequent impairment was not a result of the injury caused by the motor accident. It did not mean that the additional symptomatic load increasing the degree of permanent impairment due to the post-traumatic stress disorder and major depression were unrelated to the impairment due to the relevant motor accident. The question of whether they were related could only be decided lawfully if Dr Anderson properly directed himself as to the relevant principles of causation which legally informed his decision. It is no answer to the claimant's argument that the assessor had considered "the issue of causation and apportionment, and had weighed up the competing evidence before him" (CB 48 [10]); nor can it be said that his conclusion that the work incident of 18 January 2016 was a subsequent and unrelated injury or condition to the same region was not possibly incorrect, unless it was demonstrable that Dr Anderson had addressed the correct question. In reaching these conclusions I am satisfied that the proper officer misdirected himself as to the legal content of "the issue of causation and apportionment" , the requirements of s 58(1)(d) and the legal meaning of guideline 1.36. In particular I am satisfied that the proper officer misdirected himself as to the legal requirements of "objective evidence of a subsequent and unrelated injury or condition to the same region". For these reasons I am satisfied that the claimant has made good his claim for relief.
I am also inclined to the view that guideline 1.23 may not have been observed, in as much as Dr Anderson, clearly evaluated the permanent impairment as a result of the injuries caused by the motor accident retrospectively at the time immediately before the occurrence of the workplace incident rather than at the time of his assessment. This impression is not dispelled by his subsequent arithmetic which provides wholly circular reasoning in any event. The approach adopted by Dr Anderson, with respect, is redolent of the post hoc ergo propter hoc fallacy. That is to say, the medical assessor seems to have proceeded on the basis that since an additional worsened symptom load followed the workplace incident, it must have been (solely) caused by it. Looked at this way, the apparent non-compliance with Guideline 1.23 feeds into the central and essential causation issue.
As there is no challenge to the correctness of GIO General v Smith I am not satisfied that Smith v Insurance Australia which follows it was wrongly decided. The cases are, however, as I have sought to demonstrate distinguishable as they concern the powers of the review panel itself. The latter case also treats the review panel's decision on causation as a non-reviewable decision of fact.
Although I am satisfied that the claimant is entitled to orders in the nature of prerogative relief, I am not satisfied that its necessary for the Court to interfere with the Authority's internal management arrangements by directing that the matter be referred to a different proper officer for determination according to law. It seems to me there is no suggestion whatsoever of any bias, actual or apprehended, on the part of the proper officer and no reason to suppose that any subsequent determination will not conform to the law as stated in these reasons.
My orders are: 1. Order in the nature certiorari setting aside the decision of the proper officer of 24 January 2018 in MAS Matter No. 2017/02/1933; 2. Remit the matter to the second defendant for allocation to a proper officer for determination in accordance with these reasons; 3. The first defendant to pay the plaintiff's costs of the proceedings.

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: 30 August 2019

Motor Accidents Amendment Act 1995(NSW)

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