Insurance Australia Limited t/as NRMA Insurance v Falco

Supreme Court of NSW|2011-10-28|Before: Hislop J

Introduction 1The first defendant was injured in a motor vehicle accident ("the accident") on 1 March 2004. She sought damages in respect of injuries including psychiatric injury sustained in the accident. Liability was admitted by the plaintiff as the insurer of the driver at fault. The first defendant had previously sustained injury in a motor vehicle accident on 1 December 2003. 2The first defendant was medically examined under Pt 3.4 Motor Accidents Compensation Act 1999 ('the Act") by a medical assessor (Dr McClure) on 27 March 2007 and 11 December 2009. 3At the 2007 assessment Dr McClure concluded the accident had caused the first defendant to suffer an adjustment disorder with mixed anxiety and depressed mood. He assessed whole person impairment due to that condition at five percent, of which he attributed 60 percent to the accident and 40 percent to the 2003 injury. 4Dr Parmegiani, a psychiatrist qualified for the first defendant, had reported (report 18 July 2006) that due to the accident the first defendant had suffered a post traumatic stress disorder. He assessed whole person impairment at eight percent. Subsequently, in a report dated 16 February 2009, Dr Parmegiani concluded the first defendant had developed a major depressive disorder and assessed whole person impairment for that condition at 47 percent. 5At the 2009 assessment Dr McClure concluded the first defendant's mental status had changed in significant ways. He diagnosed major depression with melancholia. This condition was generally a constitutional disorder. He considered the condition was unrelated to either motor vehicle accident and superseded the previous diagnosis of an adjustment disorder. The condition, in his opinion, had not stabilised, and appropriate treatment could be expected to resolve or substantially improve it. Dr McClure made no assessment of whole person impairment as the condition was not related to either motor vehicle accident. 6Since the 2009 assessment a detailed report has been obtained from Dr Law, the first defendant's treating psychiatrist, in which he attributed the condition, which he diagnosed as post traumatic stress disorder, to both accidents. Further reports of Dr Parmegiani were obtained. The doctor diagnosed a major depressive disorder which, in his opinion, was a frequent complication of post traumatic stress disorder. He assessed the first defendant's whole person impairment due to the accident at 47 percent. He said "Her symptoms and associated impairment have not changed since February 2009" (see reports 16/2/2009, 27/1/2010, 11/3/2010 and 21/10/2010). 7On 2 February 2011 the first defendant lodged an application to the "Proper Officer" for further assessment pursuant to s 62(1)(a) of the Act, relying upon alleged additional evidence of causation and deterioration of the psychiatric injury. 8In support of her application, the first defendant submitted "The Claimant was previously assessed by Dr Andrew McClure on 14 December 2009. At the time of the consultation Dr Andrew McClure did not have the benefit of a comprehensive medical report of the Claimant's treating psychiatrist, Dr S. Law. At the time only clinical notes of Dr Law were available. Dr Andrew McClure stated he found it difficult to follow Dr Law's clinical notes. The Assessor found no causal link between the Claimant's psychiatric condition and the motor vehicle accident. Dr Andrew McClure did not have the benefit of a comprehensive report from the treating psychiatrist which clearly sets out a history of treatment with the Claimant since 13 August 2004, linking the condition to the Motor Vehicle Accident and the decline in her condition. It is submitted that the medical report of Dr Law could materially change the outcome of the Medical Assessor's opinion. Further, there is clear evidence, as stated in Dr Parmegiani's report, there has been a significant deterioration in the first defendant's injuries now causing her to self harm." 9In opposing the application, the plaintiff submitted, in essence, there was a report of Dr Law to Dr Sarfraz which clearly set out the history of the accidents together with the record of subsequent consultations. It is clear that Dr McClure had reviewed the notes of Dr Law, although noting that they were in part illegible. The report of Dr Law dated 19 February 2010 setting out a history of consultations does not add anything further to the issue of causation. 10The plaintiff further submitted that there was no evidence that the first defendant's condition had deteriorated. On 16 February 2009 Dr Parmegiani assessed the first defendant at 47 percent whole person impairment. On 21 October 2010 Dr Parmegiani again assessed the first defendant at 47 percent whole person impairment. This assessment had previously been dealt with by Dr McClure and there is therefore no evidence of a deterioration which is capable of having a material effect on the outcome. There is no evidence of any deterioration of the first defendant's condition since the last assessment by Dr McClure on 14 December 2009 and the pre-conditions of s 62(1)(a) have not been met. The first defendant's application should be dismissed. 11The first defendant's application was successful. 12The plaintiff seeks administrative law relief in respect of the determination of the application. In its amended summons filed on 6 September 2011 it claimed: "1. An order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid two decisions of the 'proper officer' of the third defendant (within the meaning of that expression in section 62(1B) of the Act)), namely: (a) the decision dated 21 March 2011 on the application of the first defendant to refer the first defendant for further medical assessment purportedly pursuant to section 62 of the Act; (b) ... 2. An order in the nature of prohibition or, alternatively, an injunction preventing the defendants or any of their officers, servants or agents from acting on or taking any further step in reliance on the decisions or either of them. 3. An order in the nature of mandamus remitting the first and second defendant's section 62 application to the third defendant for reallocation of the matter to a different proper officer for determination of the matter according to law." 13The second decision referred to was a claim for similar relief by the second defendant. That claim has been resolved. It is unnecessary to consider it further. 14The first defendant opposed the plaintiff's application. 15The third defendant filed an appearance submitting "to the making of all orders sought, and the giving or entry of judgment in respect of all claims made, save as to costs." A consent order was made pursuant to r 6.11 UCPR that "the third defendant is granted leave to file and serve evidence and submissions relating to the procedures adopted in the making of the Proper Officer's decisions". Pursuant to that order the third defendant was permitted to file and serve written submissions and to speak to them at the hearing notwithstanding objection by the plaintiff.

The statutory provisions 16Section 62 of the Act presently 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. (1B) Referral of a matter under this section is to be by referral to the member of staff 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." 17Section 62 was amended to its present form in October 2008. Prior to its amendment in October 2008 s 62 comprised only ss1 and 2. The amendment added sub-sections 1A and 1B. 18Prior to the amendment there was no express requirement that the Proper Officer determine whether the deterioration or additional information was capable of having a material effect on the outcome of the previous assessment. 19Section 65(1) of the Act provides: "(1) Medical assessments under this Part are subject to relevant provisions of MAA Medical Guidelines relating to the procedures for the referral of disputes for assessment or review of assessments and the procedure for assessment." 20The MAA Medical Guidelines provide: " DIVISION 4 - Further assessment and review applications Chapter 14 - Application by a party for further medical assessment (section 62(1)(a)) Proper Officer determination . 14.3 The Allocation Review of an application for further assessment is to be conducted in accordance with Chapter 9. 14.4 When conducting an Allocation review of an application for further assessment pursuant to Chapter 9, the Proper Officer is to determine whether the application is suitable for referral for further assessment. 14.5When determining whether a matter should be referred for further assessment under section 62(1)(a) whilst conducting an Allocation Review, the Proper Officer shall have regard to: 14.5.1the application and any reply; 14.5.2 any other applications and replies and/or MAS certificates on this medical dispute or any other medical disputes at MAS in relation to the same claimant, not limited to the same matter, after the parties have been provided with a copy of these documents; and 14.5.3 the object of the Act and the objects of MAS. 14.6For the purposes of section 62(1A) the word 'material' includes that it is relevant and capable of altering the outcome of a dispute about: 14.6.1 reasonable and necessary treatment, from 'not reasonable and necessary' to ' reasonable and necessary' or vice versa; 14.6.2related treatment, from 'not related' to 'related' or vice versa; or 14.6.3 permanent impairment, from 'not greater than 10% whole person impairment' to 'greater than 10% whole person impairment' or vice versa. 14.7 If the Proper Officer is not satisfied that the deterioration of the injury or the additional relevant information about the injury would have a material effect on the outcome of the application, the Proper Officer may dismiss the application. 14.8 The Proper Officer is to provide the parties with brief written reasons for the decision at the same time as, or as part of the notification to the parties, of the outcome of the Allocation Review as required by clause 9.2. Assessment of further applications 14.9 When the Proper Officer decides to refer a matter for further assessment, the Proper Officer shall determine how the application is to proceed in accordance with the provisions of Chapter 9 ..." 21Thus , the Proper Officer was required inter alia to (a) determine whether the application was made on the grounds of deterioration of the injury or "additional relevant information about the injury" (s 62(1)(a) - Glover-Chambers v Motor Accidents Authority (NSW) [2010] NSWSC 17 per McCallum J at [25]; (b) if so, determine whether the deterioration or additional relevant information was capable of having a material effect on the outcome of the assessment previously carried out - s 62(1A) - Rodger v De Gelder [2011] NSWCA 97 at [39]; (c) determine whether the application was suitable for referral for further assessment ( Medical Guideline 14.4); (d) provide the parties with brief written reasons for the decision ( Medical Guideline 14.8); (e) determine (when the Proper Officer decides to refer a matter for further assessment) how the application is to proceed in accordance with the provisions of Chapter 9 ( Medical Guideline 14.9).

Determination 22The first defendant was notified of the Proper Officer's determination of the s 62 application by letter dated 21 March 2011. The letter was addressed to the solicitor for the plaintiff and was in the following terms: "The Proper Officer has considered the application for further assessment, the reply and all supporting documentation submitted in this matter. The application is based on deterioration of the injury and additional relevant information about the injury. The Proper Officer is satisfied that the additional relevant information about the injury is such as to be capable of having a material effect on the outcome of the previous assessment as required by section 62(1A) of the Motor Accidents Compensation Act 1999. The claimant's submission relies on numerous reports from D J Parmegiani and treating specialist Dr S K Law as additional relevant information to attest the claimant's psychiatric/ psychological injuries have deteriorated since the last assessment. The respondent opines that Assessor McClure indicated in his determination on 14 December 2009 that there had been a significant change in the claimant's condition since the previous assessment. However, Assessor McClure determined the claimant's psychiatric injuries were unrelated to the motor vehicle accidents. Notwithstanding the claimant has submitted additional relevant information that has not been viewed by a MAS assessor. The additional information indicates a deterioration of the psychiatric injuries, as required by Section 62(1) and 62(1A) of the MAC Act. I refer to Glover-Chambers v Rey & MAA [2010] NSWSC 17 where McCallum J stated: 'Provided that the relevance threshold is met, the final assessment of the additional information is a matter for a medical assessor.' The matter will now be referred for further medical assessment of the dispute relating to permanent impairment. In accordance with clause 14.12 of the Medical Assessment Guidelines the further assessment will involve consideration of all aspects of the original Assessor's assessment afresh and will include all injuries assessed by the original Assessor and any additional injuries listed on the application or reply. Injuries considered by other Assessors will not be reassessed if there is no additional relevant information about them or if deterioration is not addressed in the application. The following injuries will be assessed in the further assessment:

Depression The claimant has previously been assessed by MAS in relation to claims arising out of an accident on 1 December 2003. This claim is against AAMI Limited. The matter number for this dispute was 2011/04/0435. In accordance with clause 14.9.5 of the Guidelines all information on the previous assessment will be provided to the Assessor. An officer of MAS will be in contact with you shortly to advise of the details of any medical appointment organised. Yours faithfully Kay Montague Case Manager For Proper Officer Medical Assessment Service" 23The plaintiff submits the decision concerning the first defendant should be set aside for the reasons advanced by it in its summary submissions namely:

Ground 1 The letter did not comply with the requirements of Medical Guideline 14.8 in that it was not provided to the parties by the Proper Officer. 24Medical Guideline 14.8 implicitly requires the Proper Officer to determine his reasons for his decision, reduce those reasons to writing and provide the written reasons to the parties. 25The Macquarie Dictionary defines "provide" as to furnish or supply, to afford or yield. 26In my opinion, provided it is clear that the reasons for decision are those of the Proper Officer (perhaps best achieved by the Proper Officer signing the statement of reasons), the agent of the Proper Officer may perform the non-discretionary clerical tasks of reducing the reasons to writing and furnishing or supplying those reasons to the parties. There is ample authority that use of an agent to perform non-discretionary clerical tasks is unobjectionable - see O'Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1 per Mason J.

Ground 2 The case manager had no actual or apparent authority to write to the parties or to make any relevant decision on the s 62 application. 27A letter dated 15 June 2011 from Jane Probert the Proper Officer assigned to this matter recorded: "In relation to the issues raised by Moray & Agnew I advise as follows:

[The proper officer personally makes the decision to refer the matter for further assessment under s 62 (A) of the Act, not case managers]. This decision was personally made by me on 18 March 2011. 2.[The proper construction of cl 14.8 of the Medical Assessment Guidelines does not require the proper officer to personally draw the written reasons for the decision but permits a case manager to do so at the direction of the proper officer, in accordance with the proper officer's reasons for decision]. I gave the direction as to the content of the reasons for acceptance, which were then approved by me. [In view of the above, the decision in this matter to refer the matter to further assessment in accordance with s 62 of the Act stands.]" 28The tender of the above letter was objected to by the plaintiff on the grounds of relevance and that it came into existence after the event when the Proper Officer had been appraised of the issues raised by the solicitors for the plaintiff. 29The letter comprises two statements of relevant fact and the balance, which I have placed in square brackets, is in the nature of submissions. 30In my opinion the factual content of the letter is relevant. No objection was taken to its form and no request was made that the Proper Officer be available for cross-examination. In my opinion the letter should be admitted as to the matters of fact identified by me and the balance may be treated as submissions. 31I accept the plaintiff's submission that the case manager has no delegated authority to decide the application. This was not in contest. 32It was submitted that "the case manager whose name appears...would on the face of these documents appear to have prepared a letter on behalf of the Proper Officer and which, just having regard to the terms of these documents and nothing else, appears to be written on behalf of the Proper Officer and reflects the decision and reasons of the Proper Officer". 33An apparent difficulty with this submission is that the letter includes the statement " I refer to Glover-Chambers v Rey and MAA [2010] NSWSC 17, where McCallum J stated: 'Provided that the relevant threshold is met, the final assessment of the additional information is a matter for a medical assessor.'" Prima facie, this comment is to be attributed to the case manager. It involves part of the determinative process related to the application. As such, it exceeds the power of the case manager and evidences an error of law.

Ground 3 The reasons attributed in the letter from the Proper Officer were inadequate, as they comprised only statements of conclusions and not the reasons for the decision. 34Medical guideline 14.8 requires the provision of brief written reasons for the decision to refer the matter for assessment pursuant to s 62 of the Act. 35The medical assessor at the last review determined that the first defendant's psychiatric condition was not related to the accident. The medical assessor did not assess whole person impairment. The application seeks a review in respect of causation and, if successful, assessment of the resultant whole person impairment. 36The Proper Officer referred to the medical evidence relied upon by the first defendant which she concluded indicated the first defendant's psychological injuries had deteriorated since the last assessment. She noted the assessor had determined the psychiatric injuries were unrelated to the accident. 37The plaintiff submits that whilst various conclusions have been stated by the Proper Officer the reasons for those conclusions have not. Counsel for the first defendant submitted, inter alia: "...There is another report of Dr Parmegiani updating the report since February 2009. Your Honour sees at page 5 the conclusion. It is the same as his report of 16 February 2009. It is 47%. What my client wants to know is what is the deterioration. How does that show deterioration or evidence of deterioration." There are also no reasons given for the conclusion that the evidence would have a material effect on the question of causation. 38I accept the plaintiff's submission that adequate reasons as required by the medical guideline 14.8 have not been provided and that this is an error of law.

Ground 4 The passage from Glover-Chambers v Motor Accidents Authority of New South Wales [2010] NSWSC 17 [25]-]26] in the letter related to an earlier scheme which was subsequently radically amended. The wrong legal test was applied as a result of relying upon that quotation. 39The statement quoted from Glover-Chambers was correct as the law stood prior to the amendment of s 62 in 2008. However after that amendment it became necessary to have regard to the additional requirement made by s 62(1A). It is not possible to conclude from the use of the quotation that the ultimate decision did not depend to some extent on a false understanding of s 62 despite the reference in the second paragraph of the letter under consideration to s 62(1A). I accept the plaintiff's submission that the wrong legal test may have been applied as a result of relying upon that quotation. In any event it appears to be the reliance of the case manager rather than the Proper Officer which, in itself, is an error of law.

Conclusion 40In my opinion the matter should be remitted to the Motor Accidents Authority (NSW) for re-determination. The plaintiff has requested that the matter be remitted to a Proper Officer other than the Proper Officer whose determination is under consideration. I do not consider it necessary or appropriate to direct that further determination of the matter be by a different Proper Officer and I decline to give such a direction.

Orders 41I make the following orders:

Declare that the decision of the Proper Officer of the Motor Accidents Authority (NSW) made on 21 March 2011 in the matter of Julianna Falco is vitiated by error of law.
The decision be quashed and remitted to the Motor Accidents Authority (NSW) to be determined in accordance with law.
The first defendant to pay the plaintiff's costs. Third defendant to bear its own costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 February 2012

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