IAG Limited t/as NRMA Insurance v Gilshenen

The two motor accidents

1. The Claimant has made two claims for damages. The motor accidents out of which these claims arise occurred on 29 November 2006 and 6 June 2007. In accordance with s 72(2) of the Act her claims have been made upon the Second Defendant as the CTP insurer of the vehicle allegedly at fault in the accident of 29 November 2006 and upon the Plaintiff as CTP insurer of the vehicle involved on 6 June 2007.
2. The Claimant alleges that she suffered physical injuries to her neck, back, both shoulders, head and face. Each CTP insurer has disputed that any of the alleged injuries were caused by the motor accident in which the vehicle insured by it was involved. By force of s 131 of the Act, 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%".
3. The Claimant has asserted to each insurer that she has suffered greater than 10% permanent impairment. There is a disagreement between the Claimant and each insurer about that. Accordingly, by force of s 58(1)(d) of the Act, Part 3.4 Medical Assessment applies. Each insurer has referred this "medical dispute" (that is, a dispute to which Part 3.4 applies: see s 57) to the Motor Accidents Authority for assessment pursuant to s 60(1).

First medical assessment - s 61 certificates of 11 September 2011

1. In 2011, in accordance with its obligations under s 60(2), the Authority arranged for both of the disputes, between the Claimant and two insurers respectively, to be referred to Dr Fitzsimons. Dr Fitzsimons is a suitably qualified person who has been appointed by the Authority as an assessor under s 59(1).
2. The Claimant was initially examined by Dr Fitzsimons on 19 August 2011. The doctor found that the Claimant suffered from restricted movement of her neck. She exhibited dystonia - muscle dysfunction characterised by spasms or abnormal muscle contraction. This was associated with movement of both her neck and shoulders. Her symptoms were being relieved with Botox injections once every twelve weeks, the effect of which was to relax the muscles and relieve the spasms in her neck. These injections were effective for approximately nine weeks, after which symptoms of muscle contraction, spasm and headache would return before the next injection.
3. On 11 September 2011 the doctor issued a certificate in respect of each dispute, pursuant to s 61. She concluded that the accident of 29 November 2006 had caused soft tissue injury to the Claimant's cervical and lumbar spine and possibly to the upper thoracic region, as well as right shoulder injury and headache. However the doctor concluded that these injuries gave rise to a permanent impairment which was not greater than 10%. The same injuries, with the exception of the right shoulder, were found to have been caused by the accident of 6 June 2007. Again, Dr Fitzsimons certified that these injuries from the 6 June 2007 incident gave rise to a permanent impairment not greater than 10%.

Second medical assessment - s 62 certificates of 21 July 2014

1. Pursuant to s 62(1) a matter of medical dispute which has been referred to the Authority under s 60 may be referred again, on one or more further occasions, by any party to the dispute "but only on the grounds of the deterioration of the injury or additional relevant information about the injury": s 62(1)(a).
2. Further relevant subsections of s 62 are as follows: "(1A) A matter may not be referred again for assessment by a party to the medical dispute on the grounds of deterioration of the injury or additional relevant information about the injury unless the deterioration or additional information is such as to be capable of having a material effect on the outcome of the previous assessment. (1B) Referral of a matter under this section is to be by referral to the member of staff of the Authority who is designated by the Authority for the purpose (in this Part referred to as the proper officer of the Authority). (2) A certificate as to a matter referred again for assessment prevails over any previous certificate as to the matter to the extent of any inconsistency."
3. In about October 2013 the dispute regarding whether the Claimant's degree of permanent impairment was greater than 10% was referred a second time to the Authority, I assume by the Claimant. As a result the Claimant attended upon Dr Fitzsimons for further assessment on 14 January 2014.
4. At that date the Claimant had not had a Botox injection for approximately five months. The delay was said to have occurred in part due to "a changeover of insurance case managers and in part due to a change in her specialists". Dr Fitzsimons found that "all neck movements were markedly restricted" and that there was an "obvious tautening of the left sterno mastoid muscle" that lasted for up to several minutes and "waxed and waned dramatically during the consultation".
5. Dr Fitzsimons subsequently reported (on 21 July 2014) in the following terms: "Because of the length of time that had elapsed between [the Claimant's] August 2013 Botox injection and her subsequent assessment in January 2014, and her description of how the Botox injections would cause amelioration of her symptoms for 2-3 months after an injection, it was decided to undertake a further examination on 6 March 2014, following a Botox injection, given by Dr Simon Kim on 7 February 2014."
6. Upon further examination of the Claimant on 6 March 2014 Dr Fitzsimons found "no cervical movement asymmetry and no muscle guarding" with respect to the cervical spine. Zero percent "WPI" - whole person impairment - was attributed to the cervical spine. The same conclusion was reached with respect to each of the lumbar spine and thoracic spine. Dr Fitzsimons found a degree of impaired movement of each shoulder which she considered "likely to be probably the residual dystonia-related impaired movement after the Botox has had maximal effect". She attributed 4% WPI to each shoulder, a total of 8%.
7. In her report of 21 July 2014 Dr Fitzsimons added a further 3% on the following basis: "… I note that her presentation in January 2014 is likely to be very atypical, given the unusual length of time (five months) which had elapsed after her previous injection. Nevertheless, there will be a 3% WPI added to any assessable WPI pursuant to paragraph 1.28, MAA Guidelines, which states that where the effective long term treatment of the effects of an injury result in apparent substantial or total elimination of a physical impairment, that the Claimant is likely to revert to the fully impaired state if treatment is withdrawn, the assessor may increase the percentage impairment by 1%, 2% or 3%. The percentage should be combined with any other impairment. The available clinical evidence, taken both from the two consultations underpinning the present assessment and the documentation indicates that without Botox she would revert to a 'fully impaired state'. Given the seriousness of this impaired state, it is appropriate to designate the full 3% permitted."
8. This brought the Claimant's WPI up to 11%, sufficient for her to be entitled to damages for non-economic loss, in accordance with s 131. Dr Fitzsimons issued two certificates dated 21 July 2014. The first, in relation to the dispute between the Second Defendant and the Claimant concerning the accident of 29 November 2006, certified that injuries described as "cervical/shoulders dystonia" caused by that accident "give rise to a permanent impairment which is greater than 10%". The certificate in the dispute between the Plaintiff and the Claimant concerning the second accident, of 26 June 2007, stated that none of the injuries referred for assessment were related to the motor accident. In accordance with s 62(2), these replacement certificates prevailed over the previous certificates of 11 September 2011 for both accidents.

Second Defendant's application for referral to panel, 1 September 2014

1. On about 1 September 2014 the Second Defendant lodged an application with the proper officer of the Authority to refer Dr Fitzsimons' further certificate of 21 July 2014, in relation to the accident of 29 November 2006, to a Review Panel (s 63(1)). Subs (2) of s 63 provides that such an application "may only be made on the grounds that the assessment was incorrect in a material respect". Subsection 3 provides as follows: "(3) The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least 3 medical assessors, but only if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application."
2. With a view to persuading the proper officer to refer the assessment to a review panel, the Second Defendant attached to its application an eighteen page submission. Twelve grounds of error in Dr Fitzsimons' assessment were formulated. Ground 6 was "improper allowance for adjustment effects of treatment", referring to the extra 3% added under Clause 1.28, as per the passage of the doctor's report quoted at [16].
3. The following is the full text of both the clause in the Motor Accidents Authority Permanent Impairment Guidelines to which Dr Fitzsimons referred and the preceding clause. Clause 1.28 is printed in bold lettering in the Guidelines, signifying that it is mandatory for a medical assessor to apply it (Clause 1.3). "1.27 The results of past treatment (e.g. operations) must be considered since the Claimant is being evaluated as they present at the time of assessment. 1.28 Where the effective long-term treatment of the effects of an injury result (sic) in apparent, substantial or total elimination of a physical impairment, but the Claimant is likely to revert to the fully impaired state if treatment is withdrawn, the assessor may increase the percentage of the whole person impairment by 1, 2 or 3% whole person impairment. This percentage should be combined with any other impairment percentage using the combined values chart (pp 322-324, AMA 4 Guides). An example might be long-term drug treatment for epilepsy. This paragraph does not apply to the use of analgesics or anti-inflammatory drugs for pain relief."
4. In support of its Ground 6 the Second Defendant submitted that "given there remains some impairment and not a total elimination of physical impairment with Botox injections, … at best the assessor ought to have allowed …. a 2% WPI, which correlates with the percentage applicable for a substantial elimination of physical permanent impairment". This submission invited a reading of Clause 1.28 by which the range of "1, 2 or 3%" would be applied distributively and respectively to cases of "apparent, substantial or total" elimination of impairment through effective treatment.
5. On about 7 October 2014 the Plaintiff lodged with the proper officer of the Authority a reply document, opposing referral to a review panel. Detailed submissions were attached, answering those of the Second Defendant. The Plaintiff submitted that the assessor's finding of 3% under Clause 1.28 was "within the boundaries imposed by Guidelines" and was supported by "adequate reasons for the assessment".
6. On about 15 October 2014 the Claimant also lodged a reply, contesting all of the Second Defendant's grounds for reference to a review panel, including that which related to Dr Fitzsimons' application of Clause 1.28.

The proper officer's determination, 5 November 2014

1. On 5 November 2014 the proper officer issued a determination as follows: "I am satisfied there is reasonable cause to suspect a material error in the assessment. Accordingly the review application is accepted and will be referred to a medical review panel".
2. In the accompanying reasons he identified the Second Defendant's Ground 6, relating to the application of Clause 1.28, as the ground which gave rise to "reasonable cause to suspect that the medical assessment was incorrect". He therefore did not address the numerous other grounds raised by the Second Defendant. The relevant paragraphs of his reasons are as follows: "8. The crux of the Applicant's argument appears to be that the three terms "apparent", "substantial" and "total elimination" equate to 1, 2 and 3% respectively. 9. While this interpretation is possible based on the wording of Clause 1.28, it is not obvious on reading this clause alone that this is the correct interpretation. 10. I note Clause 7.21 provides the adjustment to be made in relation to psychological impairment based on the effects of treatment. It provides: "The Assessor may increase the percentage of whole person impairment by 0% whole person impairment (no or negligible treatment effect), 1% whole person impairment (a mild treatment effect), 2% whole person impairment (a moderate treatment effect) or 3% whole person impairment (a full remission)". 11. Clause 7.21 makes it apparent that, at least in respect of psychological injuries, a 3% increase is only applicable when the treatment has resulted in a "full remission". While the wording in Clause 7.21 is different to that of Clause 1.28, it would appear likely that this wording was simply chosen because it is more fitting to a discussion of psychological impairment. 12. I can see no reason to assume that the Guidelines in relation to an adjustment for treatment would be different in application for physical and psychological injuries. Accordingly, I am satisfied there is reasonable cause to suspect that the Applicant's submissions in relation to Clause 1.28 are correct and that as such the assessment could be incorrect in a material respect. 13. Having accepted that the first alleged error gives rise to a reasonable suspicion that the assessment may be incorrect in a material respect, there is no need for me to address the further submissions of the parties. However, these submissions will be before the Review Panel who will determine the matter afresh or 'de novo'."

Interpretation of Clause 1.28

1. The correct interpretation of Clause 1.28 very much depends upon the meaning to be attributed to the word "apparent" where it appears (highlighted) in the following extract from the clause: "1.28 Where the effective long-term treatment of the effects of an injury result in apparent, substantial or total elimination of a physical impairment, but the Claimant is likely to revert to the fully impaired state if treatment is withdrawn …" (bold emphasis added, underlining in original).
2. The Macquarie Dictionary defines "apparent" in a number of alternative senses, of which only the first two need be considered in relation to Clause 1.28: "1. capable of being clearly perceived or understood; plain or clear. 2. seeming; ostensible: the apparent motion of the sun".
3. "Apparent" is employed in Clause 1.28 to qualify the whole of the expression "substantial or total elimination of a physical impairment". The concept described in the entire extract quoted at [26] is a physical impairment which appears to have been substantially or totally eliminated under the influence of treatment but which in fact remains latent so that full impairment will resume if treatment ceases. "Apparent" is used in the second of the senses given in the Macquarie Dictionary. It contributes to the meaning conveyed by the opening lines of Clause 1.28 quoted at [26], as a whole. Namely, that the pre-condition for engagement of the clause is that elimination of the impairment, either substantial or total, under the effects of treatment, is no more than ostensible - a seeming elimination.
4. The word "apparent" is not strictly necessary in order for the words extracted at [26] to convey the meaning of the pre-condition. However, "apparent" adds some degree of emphasis. It marks out the words which follow it ("substantial or total elimination of a physical impairment") as describing the ostensible position, to be contrasted with the real position which is then described by the words which follow "but" (namely, continuing latent impairment, likely to resume if treatment is withdrawn).
5. Under the alternative interpretation which the proper officer thought possible, as summarised in par 8 of his reasons (see [25]) the word "apparent" would be taken to qualify only the expression "elimination of a physical impairment". On that view, the clause would be read as containing three alternative adjectives, each qualifying "elimination of a physical impairment": "apparent", "substantial" and "total". Neither of the two possibly relevant dictionary meanings of "apparent" would permit any sense to be made of this putative sequence of alternative adjectives.
6. "Substantial" and "total" are words connoting different degrees of "elimination of a physical impairment". "Apparent", on either of its dictionary meanings as quoted in [27], does not connote degree at all. It is an adjective conveying a different type of qualification altogether and one which is cumulative upon the adjectives of degree ("substantial" or "total"), not alternative to them.
7. Where Clause 1.28 permits an increase in percentage of whole person impairment "by 1, 2 or 3%", this merely describes a range of 1% to 3% inclusive. The Guidelines only permit the percentages to be assessed in whole integers: Clause 1.41. Accordingly it is appropriate and explicable that the range of 1% to 3% inclusive should be written as "1, 2 or 3%". It does not follow from the expression of the range in this way that it is intended that the three integers of percentage should apply respectively or distributively to three different categories of "elimination of a physical impairment" - that is, 1% for "apparent", 2% for "substantial" and 3% for "total".
8. There would be no logic to the suggested distributive reading of this part of Clause 1.28. The figures 1, 2 and 3 obviously constitute an ascending progression. "Substantial" and "total" are also in ascending sequence, albeit less precise. However "apparent" is not on a quantitative sequence at all.
9. In par 10 of his reasons the proper officer quoted from Clause 7.21 of the Guidelines, a clause which is to be found in Chapter 7 headed "Mental and Behavioural Disorders Impairment". The proper officer drew from the wording of this clause some support for the distributive reading of Clause 1.28 which he considered may be open. No such support is afforded by Clause 7.21. It is worded in a manner appropriate to make clear that in relation to psychiatric disorders the additional percentage of WPI which may be allowed as an adjustment for the effects of prescribed treatment will vary between 0 and 3, with each integer respectively ascribed to a particular degree of treatment effect. Thus, by Clause 7.21 it is expressly provided that there will be 0% whole person impairment where "no or negligible treatment effect" is operative, 1% where "a mild treatment effect" is achieved and so on.
10. Rather than supporting a distributive reading of Clause 1.28 this clause illustrates the very different manner of drafting that would have been necessary to achieve respective allocations of 1, 2 or 3% to different degrees of beneficial effect from prescribed treatment. The fact that this manner of drafting has been adopted in Clause 7.21 for psychiatric orders and not in Clause 1.28 tends to confirm the view, which in any event flows from analysis of the drafting, that Clause 1.28 was not intended to operate in the manner of Clause 7.21. That is, it was not intended that the percentages 1, 2 and 3 should be applied respectively to "apparent, substantial or total" elimination of impairment.
11. I conclude that on its correct interpretation Clause 1.28 permits the medical assessor to allow any percentage in the range 1, 2 or 3% to any "apparent … elimination of a physical impairment" where "the claimant is likely to revert to the fully impaired state if treatment is withdrawn". It is a matter for the assessor to choose and apply 1, 2 or 3% taking into account, amongst other things, whether the "apparent … elimination of a physical impairment" is "substantial" or "total" and, if the former, how substantial. The manner in which Dr Fitzsimons applied the clause, as explained in the passage quoted from her report of 21 July 2014 at [16] above is entirely consistent with what I hold to be the correct interpretation. Accordingly, I find that the proper officer erred in law in concluding that that there was "reasonable cause to suspect" that Dr Fitzsimons' assessment was incorrect by reason of her having applied this interpretation and having refrained from the distributive approach formulated in Clause 8 of the proper officer's reasons.

Failure to adopt a definitive interpretation of Clause 1.28

1. Upon a party applying to the proper officer under s 63(1) to have a medical assessment referred to a review panel of medical assessors, if the grounds of the application put in issue the correct legal interpretation of the Permanent Impairment Guidelines then the proper officer is bound to ascertain the correct interpretation. It is by reference to the Guidelines correctly interpreted that he or she must determine whether there is "reasonable cause to suspect that the medical assessment was incorrect in a material respect".
2. Here, the proper officer purported to treat a perceived uncertainty about the correct interpretation of Clause 1.28, which he did not resolve, as itself the basis of a "reasonable cause to suspect that the medical assessment was incorrect in a material respect". This was not a discharge of the proper officer's function in accordance with s 63, as expounded in Meeuwissen v Boden [2010] NSWCA 253; (2010) 78 NSWLR 143 at [19]-[23]. The effect of the proper officer's approach was to pass along to the review panel, for resolution by it, the statutory interpretation issue in relation to Clause 1.28 which had been posed in the Second Defendant's grounds of application.
3. The proper officer could not make his decision under s 63(3) according to law unless and until he had himself determined the interpretation of Clause 1.28 in a manner which was both definitive and correct. Having done that he was required to consider whether there was reasonable cause to suspect material error in relation to Dr Fitzsimons' assessment, taking into account the true legal meaning of Clause 1.28 and its proper application to the Claimant's circumstances.

Discretion with respect to quashing the decision

1. Counsel for the Second Defendant argued that if legal error should be found, the Court should nevertheless, in the exercise of its discretion, refrain from setting aside the proper officer's decision. The Second Defendant drew attention to the following grounds of its application under s 63(1), with which the proper officer had not dealt: "Failure [of Dr Fitzsimons] to allow the parties to make submissions on the relevance of the additional research material [which she] relied upon which constitutes a denial of natural justice. Failure to provide the parties with the additional research material relied upon amounting to a further denial of natural justice."
2. At pp 27 to 31 of her report of 21 July 2014 Dr Fitzsimons referred to a large volume of medical literature which she had consulted, on the subject of whether there exists "a causal association between peripheral trauma and dystonia". The essence of the Second Defendant's complaint in the two grounds quoted at [40] above is that Dr Fitzsimons reversed the conclusion she had expressed in the certificates of 11 September 2011 and decided that trauma in the accident of 29 November 2006 was causative of the Claimant's dystonia, after having conducted additional research upon which the parties had not had a reasonable opportunity to make submissions. The Second Defendant says that a list of the additional research material was provided to it by Dr Fitzsimons only about two weeks prior to the issue of her 21 July 2014 certificates. Although given references to the research papers, the parties were not given the articles themselves.
3. The Plaintiff, in its submissions to the proper officer, disputed that he could act upon this ground, even if a denial of procedural fairness should be demonstrated. The Plaintiff submitted that the Second Defendant could raise any complaint of procedural fairness in relation to Dr Fitzsimons' certificates only by taking objection in Court proceedings, as envisaged by s 61(4). In any event, the Plaintiff argued that there had been no denial of procedural fairness.
4. The Second Defendant is in effect asking the Court to refuse the Plaintiff the relief to which it is otherwise entitled - that is, an order that the proper officer's referral decision set aside for error of law - upon the ground that the proper officer might justifiably have referred the assessment to a review panel upon this procedural fairness ground instead of on the ground which has now been shown to have been erroneous.
5. The Court could not exercise its discretion on the suggested basis without first undertaking a review of Dr Fitzsimons' certificates of 21 July 2014 to determine the merits of the procedural fairness point. But no proceeding has been commenced to invoke the Court's supervisory jurisdiction in respect of Dr Fitzsimons' administrative decision. The only decision which has been brought before this Court, by appropriate process, for review pursuant to s 69, Supreme Court Act is the decision of the proper officer under s 63, Motor Accidents Compensation Act. The Plaintiff is not to be refused relief on the discretionary basis submitted by the Second Defendant.

Disposition

1. Because of the view which the proper officer took of Ground 6 he felt able to refer the assessment to a review panel without considering or determining the numerous other grounds which had been raised by the Second Defendant in support of the referral. It follows from the reasons given above that the proper officer's decision must be set aside and that he will be required to re-determine the application for referral according to law. The orders of the Court are as follows: 1. The decision of Mr Laidley in his capacity as acting proper officer of the Motor Accidents Assessment Authority made 15 November 2014 pursuant to s 63, Motor Accidents Compensation Act 1999, namely, that the medical assessment of the First Defendant be referred to a review panel of medical assessors, is set aside. 2. The proper officer of the Third Defendant is ordered to determine the application for a review of the medical assessment of the First Defendant as lodged by the Second Defendant on or about 1 September 2014, according to law. 3. The Second Defendant is 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: 20 August 2015