Insurance Australia Limited t/a NRMA Limited v Michael

Judgment

1. Michael Kresan was involved in a motor vehicle accident on 5 January 2011 when the car he was driving was, while stationery, run into from behind. Mr Kresan made application for compensation.
2. On 10 May 2013 Dr David Johnson issued a certificate under Part 3.4 of the Motor Accidents Compensation Act 1999 (NSW) certifying that in the accident Mr Kresan suffered the following injuries: Left shoulder - soft tissue injury, frozen shoulder Lumbar spine - aggravation of pre-existing degenerative disease and injury
3. Dr Johnson certified that the degree of whole person impairment due to the accident was: 9% in consequence of the shoulder injury 5% in consequence of the lumbar spine injury
4. In his Certificate, Dr Johnson recorded information apparently received from Dr Tham of the North West General Practice, a doctor whom Mr Kresan consulted following the accident. The latest document from or by Dr Tham which was referred to seems to be one of 1 June 2011.
5. On 10 June 2014 the Plaintiff lodged with the Motor Accidents Authority an application for further assessment. As the reason for the application, it was asserted: There is additional relevant information about the injury or injuries sustained in the motor vehicle accident and this additional information is capable, if the matter was to proceed to further assessment, of altering the outcome of the dispute from that certified in the previous assessment.
6. These reasons follow the terms of s 62 of the Motor Accidents Compensation Act which, so far as is relevant, provides: (1) A matter referred for assessment under this Part may be referred again on one or more further occasions in accordance with this Part: (a) by any party to the medical dispute, but only on the grounds of the deterioration of the injury or additional relevant information about the injury, or (b) by a court or claims assessor. (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.
7. Notwithstanding the somewhat elliptical way in which the section is expressed, it envisages that, if the additional information is so capable, the proper officer will refer the matter for further assessment - QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442 at [3]-[4]. The Medical Assessment Guidelines, clause 14.8, envisage that the Proper Officer will provide "brief written reasons for the decisions".
8. In its Application the Plaintiff identified the additional documentation on which it relied as: GP response Dr Tham 12/03/2014 GP clinical records received 07/04/2014 26/06/2012 GP clinical records received 15/05/2014 06/05/2014 GP clinical records received 28/05/2014 06/05/2014 NRMA submissions 06/06/2014
9. On 24 July 2014 the Second Defendant, a "Proper Officer" of the Medical Assessment Service, rejected the application for a further assessment. The Proper Officer's reasons included the following: The report [of Dr Tham dated 12 March 2014] states that in the opinion of Dr Tham the conditions were "considered resolved". Dr Tham has not provided any evidence as to how this conclusion was made or how it may have a material effect on the outcome of the previous assessment. The report also comments on the complainant's condition in relation to the left shoulder and that the injuries are not consistent with the injury from the motor vehicle accident of 15 January 2011. I refer to the certificate of Assessor Johnson dated 10 May 2013... Dr Johnson states that there is clear evidence in the documents provided to him that there was a direct injury to the left shoulder in the subject motor accident. Furthermore, Dr Meakin assessed the injury as being causally related to the accident and as having a restricted range of motion in the left shoulder and causally related to the motor vehicle accident. I refer to the GP Clinical notes of Norwest General Practice received on 7 April 2014, 6 May 2014 and additional GP clinical records also received 6 May 2014 as they are clearly additional relevant information and related to the accident. These records do not appear to contain any new additional relevant information that was not previously considered by Assessor Johnson. As stated by Assessor Johnson in relation to the left shoulder in his summary of documentation provided prior to the assessment he notes there being an injury to the left shoulder which is consistent with medical records and an ultrasound from 6 days post-accident which shows evidence of a frozen shoulder and mild subacromial bursitis and tendonopathy… The Insurer further submits that there are inconsistencies with the range of motion in relation to the claimant's left shoulder. Assessor Johnson notes that there was a difference in range of motion compared to the assessment of Dr Meakin 8 months prior to the examination of 6 May 2013 as outline in his certificate on page 9. It has not been evidenced how these inconsistencies may be such as to be capable of changing the outcome of the previous assessment. I am not satisfied the additional relevant information about the injury is such as to be capable as to have a material effect on the outcome of the previous assessment as required by s 62(1A) of the Motor Accidents Compensation Act 1999. I have therefore determined that the application shall not be referred for further assessment.
10. By summons filed in this Court on 22 October 2014 the Plaintiff claims, inter alia, prerogative or declaratory relief setting aside the determination of the Second Defendant. In summary, the grounds urged in support of that relief are: 1. the Proper Officer made her determination without substantive consideration of the clinical records; 2. the Proper Officer failed to consider and determine a significant part of the Plaintiff's application and thus her statutory duty is unperformed and she fell into jurisdictional error; 3. the Proper Officer's dismissal of the application and failure to deal with the clinical records and the Plaintiff's submissions constitutes a denial of procedural fairness and amounts to jurisdictional error; 4. the Proper Officer failed to take the clinical records into account and this is jurisdictional error; 5. in rejecting the Plaintiff's application the Proper Officer's decision is afflicted by legal unreasonableness in that: 1. no sensible Proper Officer acting with due appreciation of her responsibilities would have so decided; 2. the Proper Officer failed to give adequate weight to relevant factors of great importance; 1. the Proper Office gave excessive weight to irrelevant factors of no importance; 2. the Proper Officer reasoned illogically or irrationally in determining whether or not the clinical records were additional information pursuant to s 62 of the Act; 3. the decision is a disproportionate response by reference to the scope of her power; and/or 4. the decision lacks evident and intelligible justification; 5. The Proper Officer effected jurisdictional error by: 1. applying the wrong test in that she imposed on Dr Tham the onus of showing the additional information would have a material effect on the outcome of the previous medical assessment; 2. denying the Plaintiff procedural fairness by not warning the Plaintiff she would determine the matter based on the explanation from Dr Tham and failing to afford the Plaintiff an opportunity to respond.
11. In these grounds the "clinical records" are those I have listed above.
12. Each of the Defendants, respectively, Mr Kresan, the Proper Officer Ms Jane Probert, and the Motor Accident Authority has filed an Appearance submitting to making of all orders sought, save as to costs.
13. In the additional documentation on which the Plaintiff relied in its application for a further assessment there are many references to each of Mr Kresan's lumbar spine and left shoulder. In these proceedings the Plaintiff concedes that it is only material relating to the left shoulder which is relevant to the relief it seeks so in quoting below from the 12 March response and other clinical records, I shall largely limit myself to that area.
14. Dr Tham's response of 12 March 2014 included the following: At the time of injury Mr Kresan experienced restricted range of movement in his left shoulder. … Was pain free with complete resolution of low back pain after lumbar faraminal cortisone injection on 4/5/2011. At consultation on 19/9/2011 Mr Kresan reported shoulder was almost pain free for the last four months following cortisone injection. At this stage it was considered conditions resolved. … Mr Kresan shows a history of low grade injuries resulting in high grade disability + litigation. The symptoms currently claimed do not appear consistent with the mechanism of injury from MVA 2011.
15. The clinical records received in April and May 2014 consist of what appear to be more or less contemporaneous doctors' notes made by Dr Tham and other doctors within the same practice together with the contents of reports received from others such as pathologists, radiologists and specialists. Within the three groups of documents there is much repetition but arguably relevant entries in the doctors' notes include the following: 9/1/2007 - 5/1/2011 No reference to Plaintiff's left shoulder but some problems with right shoulder. 18/1/2011 Imaging request left shoulder. 24/1/2011 Shows signs of left frozen shoulder - ref to have glenohumeral joint cortisone injection. 21/2/2011 Ref to physio for left frozen shoulder - shoulder improved considerably with cortisone injection. 7/3/2011 Seeing Luke for back and shoulder. 27/4/2011 Requests ref for repeat shoulder cortisone injection - imaging request: left glenohumeral cortisone injection. 5/5/2011 Mild improvement with left shoulder injection. 19/9/2011 Requests ref to hydrotherapy for shoulder pain - after having cortisone injection into shoulder in May had four months almost pain-free - will repeat this if conservative treatment doesn't improve symptoms. 30/9/2011 Would like repeat cortisone injections to shoulder - sore ++ - frozen shoulder - imaging request: left glenohumeral joint cortisone injection. 10/1/2012 Has sore left thumb which he claims occurred after MVA 12 months ago - first he has mentioned it today - will ref for XR and US. 1/3/2012 Referral for shoulder cortisone injection. 8/3/2012 Completed NRMA Insurance request for medical information. 20/3/2012 Had good response from glenohumeral joint cortisone injection. 20/4/2012 States his left shoulder and thumb is almost normal, but also states he is worse than an injury he had 13 years ago - settled last year with another legal claim against someone who had a dog that jumped on him - sued for $12,000 plus costs - highly litigious. 13/7/2012 Insurer has stopped paying for physio and hydrotherapy (and rightly so). 5/9/2012 Reprinted shoulder specialist referral. 22/3/2013 States his left shoulder is still painful and is requesting cortisone injection - referral given - left shoulder glenohumeral joint US guided cortisone injection. 15/1/2014 Requesting authority script for panadeine forte - I advised him that I will not prescribe him authorities for drugs of addiction - pt very angry so I advised him that this is not a therapeutic patient doctor relationship anymore and he needs to visit another GP.
16. Entries in the clinical records representing parts of reports from others and later than 5 January 2011 include the following (The dates stated are those when the images or reports were collected, there commonly being no date stated as to when the relevant examination was carried out. However the pattern of the documents suggests that there is unlikely to be any significant time lapse between the event and the date of collection.): 21/1/2011 Clinical and ultrasound evidence of frozen shoulder. 24/1/2011 Left shoulder injection - the patient experienced partial relief of symptoms immediately post-procedure from 10/10-5/10 in severity. 2/5/2011 Imaging-guided left glenohumeral joint injection - pre-injection pain level of 7/10 reduced to a level of 5/10 post-procedure. 6/3/2012 Imaging-guided left glenohumeral joint injection - Mr Kresan…reporting pain reduction from 9/10 to 0/10 immediately after the procedure. 16/5/2013 CT guided left glenohumeral joint injection - following injection there was complete resolution of pain symptoms decreasing from 7/10 to 0/10.
17. The nature of the task imposed by s 62 of the Motor Accidents Compensation Act and the limits on a Court asked to review a decision of a Proper Officer have been considered on a number of occasions and there is no need for me to say more on the topic than that the capacity of the additional information to affect the outcome of the previous assessment is a matter for "the subjective satisfaction of the proper officer" - Rodger v De Gelder [2011] NSWLR 594 at [113], QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442 at [33] and that to succeed in setting aside a proper officers' decision a party must establish jurisdictional error, a constructive failure to exercise jurisdiction or legal unreasonableness - Craig v State of New South Wales (1995) 184 CLR 163, 179; Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611, 645; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, 363.
18. Accepting those constraints, it is nevertheless clear that in this case the decision of the Proper Officer must be set aside.
19. The most obvious basis for this conclusion lies in the Proper Officer's statements that the clinical notes "are clearly additional relevant information and relate to the accident" and "these records do not appear to contain any new additional relevant information…". The inconsistency between these statements leads to the conclusion that the Proper Officer did not apply her mind rationally to the information contained in the clinical notes or to the making of her decision considering them. One should recognise the possibility that one of these statements but reflects a change of mind and the presence of the other merely a failure to correct a previous draft of her reasons but the juxtaposition of the two irreconcilable statements makes that conclusion difficult, if not impossible to reconcile with any sensible consideration of the issues.
20. Support for this view is afforded by El-Kazzi v Allianz Australia Insurance Ltd [2014] NSWSC 927. That also was a case where there was a challenge to a decision of a Proper Officer on an application for a further assessment. In reasons forming part of the decision statements were made, albeit in different paragraphs, that a 'report, along with the injury to the right shoulder constitutes new additional relevant information" and the report "cannot be considered as additional relevant information". Justice Hamill held, at [41], that the "irreconcilable statements of opinion as to whether there was (or was not) 'additional relevant information' - which is the touchstone of the decision that the proper officer was called upon to make - easily fits" the descriptions of "illogical" and "irrational" and amounted to error justifying the setting aside of the decision.
21. I should perhaps add that the similarity between the inconsistency of language in this case and the language employed which was the subject of consideration by Hamill J is troubling. Clearly any consideration of an application for a further assessment is likely to inspire reference to terms contained within s 62 of the Motor Accidents Compensation Act and there is no evidence before me that the Proper Officer whose decision made on 20 November 2013 was the subject of consideration in El-Khazzi v Allianz Australia Insurance Ltd was the same person whose decision I am reviewing. However if it was, it suggests most regrettable failings in one tasked with an important role in the workings of the compensation assessment system.
22. But there is another aspect of the Proper Officer's decision which would lead me to the conclusion that it should be set aside. The following passage in her reasons contains two fundamental errors: The report [of Dr Tham dated 12 March 2014] states that in the opinion of Dr Tham the conditions were "considered resolved". Dr Tham has not provided any evidence as to how this conclusion was made or how it may have a material effect on the outcome of the previous assessment.
23. The statement to the effect that "Dr Tham has not provided any evidence as to how the conclusion that the condition of the shoulder had been resolved" flies in the teeth of the immediately preceding sentence wherein Dr Tham had remarked that Mr Kresan reported "shoulder was almost pain free for the last 4 months following cortisone injection". It may well be of course that the matter so reported did not justify Dr Tham's conclusion but to say that he provided no evidence as to how his conclusion was made is to ignore what the doctor had said and so irrational as to demonstrate that no proper decision was made.
24. The second error in the passage quoted lies in the statement that Dr Tham had provided no evidence as to how his conclusion may have a material effect on the outcome of the previous assessment. Given that the previous assessment concerned the extent of Mr Kresan's permanent incapacity, Dr Tham's statement that the condition had resolved had, or was capable of having, so obvious an effect on the outcome of the previous assessment as to make the Proper Officer's statement about no evidence impossible to understand.
25. It was also argued that in her reasons the Proper Officer seems to be imposing on Dr Tham some obligation to show that his conclusion would have such a material effect on the outcome of the previous assessment whereas the terms of s 62(3) make it clear that it is to the Proper Officer that that task, or more accurately, the task of deciding whether Dr Tham's conclusion was capable of having a material effect on the previous assessment fell. Certainly the way in which the passage is expressed provides some support for the contention but an alternate view is that the Proper Officer was merely commenting on what she perceived to be an inadequacy in the evidence, rather than suggesting that there was some onus on Dr Tham to demonstrate the capacity for a material effect. In the last paragraph of her remarks the Proper Officer returns to the capacity of the additional information and records her view on that topic. When the reasons the Proper Officer has given are considered in totality, I am not persuaded that the Proper Officer was imposing on Dr Tham any obligation she bore.
26. The errors to which I have adverted mean that the Plaintiff has not had its application properly considered and the illogicality or irrationality involved in the errors mean that there has either a constructive failure to exercise her jurisdiction so as to require her decision to be quashed - Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; (2004) 207 ALR 12; (2004) 78 ALJR 992 at [38]. Furthermore, given the nature of the errors made by the Second Defendant, the Plaintiff is entitled to have its application determined by a different Proper Officer.
27. In its summons the Plaintiff sought costs. In each of the submitting appearances the Defendant opposed the making of a costs order against him or it. During the hearing no attention was given to the question of costs and, in these circumstances, I do not think I should make any decision on that topic at this stage. Accordingly, I propose to reserve it and give liberty to the Plaintiff to apply in that regard on further notice to any of the Defendants against whom the order is sought. The topic should not, however, be allowed to drag on and I will limit the time for giving notice to 14 days.
28. I make the following orders: 1. An order in the nature of Certiorari quashing the decision of the Second Defendant made on 24 July 2014 in proceedings in respect of which the First Defendant was the Claimant. 2. Remit to the Third Defendant the Plaintiff's application under s 62 of the Motor Accidents Compensation Act in proceedings in respect of which the First Defendant was the Claimant, such application to be dealt with by a Proper Officer other than the Second Defendant and according to law. 3. Reserve the question of costs. 4. Grant liberty to the Plaintiff to apply for an order for costs on 14 days' written notice to any Defendant against whom such an order is sought providing such notice is given within 14 days of this decision.

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