Insurance Australia Limited t/as NRMA Insurance v Koic

Background

1. On 17 March 2012, the first defendant was injured in a motor vehicle accident. The plaintiff is the CTP insurer of the vehicle at fault in the accident.
2. Because the first defendant's entitlement to monetary damages for non-economic loss was in dispute, a medical assessment of her degree of permanent impairment was required to ascertain whether her whole person impairment ("WPI") exceeded 10%: see s 131 of the MAC Act.
3. The first defendant made an application to the Medical Assessment Service ("MAS") of the second defendant for assessment of her WPI pursuant to s 58(1)(d) of the MAC Act. The insurer lodged a reply to her application.
4. The first defendant was assessed by medical assessor Ian Cameron. Assessor Cameron issued a certificate and reasons dated 15 March 2015 certifying that the first defendant sustained injuries to the cervical spine, lumbosacral spine and right shoulder, and that her degree of permanent impairment did not exceed 10%.
5. The first defendant subsequently lodged an application for further assessment of a permanent impairment dispute pursuant to s 62 of the MAC Act on the basis of new additional relevant information about the injury, accompanied by evidence and submissions.
6. The insurer lodged a reply to the first defendant's application, which put in dispute the issues of causation and permanent impairment for each of the injuries to the cervical spine, lumbar spine and right shoulder. The application was also accompanied by evidence and submissions.
7. The third defendant, medical assessor Ian Meakin ("the medical assessor"), was appointed to re-assess the first defendant. On 19 September 2018, the medical assessor issued a decision certifying that the first defendant sustained scarring, as well as injuries to the cervical spine, thoracic spine, lumbar spine, right shoulder, left shoulder and left hip, giving rise to 11% WPI.
8. The insurer applied for a review of the medical assessor's assessment pursuant to s 63 of the MAC Act. On 21 December 2018, the proper officer dismissed the application for review and issued its decision.

Extension of time

1. The insurer seeks an extension of time to file the judicial review in this Court. The application is not opposed. The insurer's explanation for the delay is that after the medical assessor's decision, the insurer unsuccessfully sought a review from the proper officer pursuant to s 63 of the MAC Act. The reasons for the proper officer's decision are dated 21 December 2018. It is because the insurer availed itself of the review process within SIRA that it filed its judicial review in relation to the decision of the medical assessor out of time. It is my view that it is preferable for the insurer to seek review by way of the internal procedures available under the MAC Act before applying for judicial review in this Court. This is what the insurer has done.
2. As such, in the exercise of my discretion, I grant an extension of time up to and including 7 March 2019.

Statutory framework and guidelines

1. Section 44(1)(c) of the MAC Act reads: "44 Medical Guidelines of Authority (1) The Authority may issue guidelines (Motor Accidents Medical Guidelines) with respect to the following: … (c) the assessment of the degree of permanent impairment of an injured person as a result of an injury caused by a motor accident,"
2. Section 58(1)(d) relevantly reads: "58 Application (1) This Part applies to a disagreement between a claimant and an insurer about any of the following matters (referred to in this Part as medical assessment matters): … (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%."
3. Section 60 of the MAC Act states that a "medical dispute" may be referred to the Authority for assessment under Part 4.3 of the MAC Act by either party to the dispute.
4. Pursuant to s 61, a medical assessor is required to give a certificate as to the matters referred for assessment, which is then conclusive evidence of the matters certified.
5. Section 62 of the MAC Act reads: "62 Referral of matter for further medical assessment (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 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."

The guidelines

1. The Medical Assessment Guidelines, made pursuant to ss 44(1)(d) and 65(1) of the MAC Act, apply to medical assessments conducted pursuant to the MAC Act and set out the procedure for review of assessments under Part 3.4.
2. The Motor Accident Permanent Impairment Guidelines ("Permanent Impairment Guidelines"), effective 1 June 2018, are issued pursuant to s 44(1)(c) of the MAC Act and apply to assessments conducted by medical assessors.
3. Section 133 of the MAC Act states that the assessment of permanent impairment is to be made in accordance with the Permanent Impairment Guidelines. Specifically, s 133 reads: "133 Method of assessing degree of impairment (1) The assessment of the degree of permanent impairment of an injured person as a result of the injury caused by a motor accident is to be expressed as a percentage in accordance with this Part. (2) The assessment of the degree of permanent impairment is to be made in accordance with: (a) Motor Accidents Medical Guidelines issued for that purpose, or (b) if there are no such guidelines in force - the American Medical Association's Guides to the Evaluation of Permanent Impairment, Fourth Edition."
4. Parts 1.2 and 1.5 to 1.7 of the Permanent Impairment Guidelines read: "1.2 These Guidelines are based on the American Medical Association's Guides to the Evaluation of Permanent Impairment, Fourth Edition (third printing, 1995) (AMA4 Guides). However, there are some very significant departures from that document in these Guidelines. A medical assessor undertaking impairment assessments for the purposes of the Act must read these Guidelines in conjunction with the AMA4 Guides. These Guidelines are definitive with regard to the matters they address. Where they are silent on an issue, the AMA4 Guides should be followed. In particular, chapters 1 and 2 of the AMA4 Guides should be read carefully in conjunction with clauses 1.1 to 1.46 of these Guidelines. Some of the examples in the AMA4 Guides are not valid for the assessment of impairment under the Act. It may be helpful for medical assessors to mark their working copy of the AMA4 Guides with the changes required by these Guidelines. … 1.5 An assessment of the degree of permanent impairment is a medical assessment matter under clause 2(a) of Schedule 2 of the Act. The assessment must determine the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident. A determination as to whether the injured person's impairment is related to the accident in question is therefore implied in all such assessments. Medical assessors must be aware of the relevant provisions of the AMA4 Guides, as well as the common law principles that would be applied by a court (or claims assessor) in considering such issues. 1.6 Causation is defined in the Glossary at page 316 of the AMA4 Guides as follows: 'Causation means that a physical, chemical or biologic factor contributed to the occurrence of a medical condition. To decide that a factor alleged to have caused or contributed to the occurrence or worsening of a medical condition has, in fact, done so, it is necessary to verify both of the following: The alleged factor could have caused or contributed to worsening of the impairment, which is a medical determination. The alleged factor did cause or contribute to worsening of the impairment, which is a non-medical determination.' This, therefore, involves a medical decision and a non-medical informed judgment. 1.7 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 applicable in circumstances where there are multiple contributing causes."
5. Parts 1.17 and 1.18 of the Permanent Impairment are so-called "helicopter provisions". They read: "Evaluation of impairment 1.17 The medical assessor must evaluate the available evidence and be satisfied that any impairment: 1.17.1 is an impairment arising from an injury caused by the accident, and 1.17.2 is an impairment as defined in clause 1.9 (above). 1.18 An assessment of the degree of permanent impairment involves three stages: 1.18.1 a review and evaluation of all the available evidence including: medical evidence (doctors', hospitals' and other health practitioners' notes, records and reports) medico-legal reports diagnostic findings other relevant evidence 1.18.2 an interview and a clinical examination, wherever possible, to obtain the information specified in these Guidelines and the AMA4 Guides necessary to determine the percentage impairment, and 1.18.3 the preparation of a certificate using the methods specified in these Guidelines that determines the percentage of permanent impairment, including the calculations and reasoning on which the determination is based. The applicable parts of these Guidelines and the AMA4 Guides should be referenced."

The guiding principles

1. In these proceedings, the plaintiff argues that each of the errors identified in the grounds in the summons constitute: 1. errors of law on the face of the record, and/or 2. jurisdictional errors, and/or 3. constructive failure to exercise statutory power.
2. All that is required for the plaintiff to establish his case and enliven the Court's power to issue remedies is for the Court to find an error of law on the face of the record. Errors of law on the face of the record need not be errors going to jurisdiction.
3. A medical assessor's and Review Panel's reasons form part of the record, because s 61(9) of the MAC Act requires it to give reasons.
4. As to the issue of jurisdictional error, the plaintiff pleaded that the errors include a constructive failure to exercise jurisdiction.
5. In Rodger v De Gelder (2015) 71 MVR 514 ("De Gelder"), the Court of Appeal stated at [95] per Gleeson JA (MacFarlan and Leeming JJA agreeing): "[95] Jurisdictional error includes a constructive failure to exercise jurisdiction. A constructive failure to exercise jurisdiction arises when a decision-maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided, or misunderstands the nature of the opinion it is to form: Yusuf at [41] per Gaudron J."
6. The question for this Court is whether the plaintiff has established relevant error(s) of law on the face of the record or jurisdictional error(s) that warrant the Court to exercise its discretion to quash the decision. That is the nature of judicial review proceedings, as distinct from an appeal or review on questions of law, fact or discretion.

The decision of the medical assessor dated 19 September 2018

1. In assessing the first defendant's left hip, the medical assessor was to assess the anterior superior labral tear, acute soft tissue impaction injury, superior Iabral tear, gluteal enthesopathy, trochanteric bursitis and superolateral labral tear.
2. Under the heading "History of the Motor Vehicle Accident", the medical assessor stated: "On 17 March 2012 Mrs Koic was the front seat passenger, wearing a seatbelt in a vehicle being driven by her husband. Their 6 year old daughter was in the rear seat as was the 4 year old son, also in booster seats. The vehicle was stationary when a second vehicle struck their car. Mrs Koic states that she had immediate onset of pain in the posterior cervical neck, thoracic spine and lumbar spine and also a feeling of discomfort in both the right and left shoulder. Today Mrs Koic states that she was experiencing discomfort in the right and left hip from the time of the accident. This feature of history has been challenged by other history takers and will be discussed later. … She initially, in September 2012, came under the care of Dr Jeni Saunders, sports physician, who treated her conservatively and arranged for various scans. Dr Saunders noted the presence of axial pain and pain associated with the left hip although she commented that the left sacroiliac joint may have been the site of significant injury, asking Dr Barbara Hungerford of the Sydney Spine and Pelvic Centre in Drummoyne to be involved. The scans suggested that the left sacroiliac joint had sustained soft tissue damage and was the site of discomfort. Dr Saunders noted the MRI scans did not confirm any gross abnormality apart from developmental issues relating to the cervical neck. Dr Saunders' clinical attention remained on the left sacroiliac joint with continuing conservative management and assistance from the Sydney Spine and Pelvic Group reporting back to the local practitioner. An intra-articular hip injection did settle some pain and attention now focused on the hip joint itself, left side. Dr Saunders referred Mrs Koic to see Dr Robert Molnar, orthopaedic surgeon, in October 2013. He assessed the left hip with a scan and this demonstrated a superolateral Iabral tear, chondrolabral junction injury and an anterior femoral CAM lesion. On 4 December 2013 Dr Molnar performed the first arthroscopic surgery on the left hip performing a Iabral repair with resection of the pre-existing constitutional CAM lesion. On 15 January 2014 when assessed at follow-up Dr Molnar organised a continued rehabilitation programme referencing the left hip but also noted that Mrs Koic was reporting a similar pain on the right side although at the time of questioning today Mrs Koic states that this pain was present right from the very start. Scans were performed on the right side with arthroscopy being performed on 25 September 2014 because of a minimal Iabral tear. Unfortunately symptoms continued to be significant on the left side. Dr Molnar suggested that this may be related to scar tissue associated with the capsular repair and further scans were performed. A further surgery was performed on 6 May 2015 on the left side. The right side arthroscopy was performed on 25 September 2014. Dr Molnar opined that because Mrs Koic was asymptomatic relating to the right and left hip prior to the motor vehicle accident that the painful pathologies must relate to this car accident. On January 2015 there was further investigations of the left hip with a further trial injection of steroid and local anaesthetic performed by Dr Jeni Saunders. This procedure confirmed that the left hip was the source of the continuing pain. By review on 17 June 2015 Mrs Koic remained painful in both hips, particularly on the-left side. In a report on 16 February 2017 when Dr Molnar was asked to defend his decision to equate the hip pathology with the motor vehicle accident following receipt of a report from orthopaedic surgeon, Dr Drummond, he made the comment that Mrs Koic's acetabular morphology predisposed her to Iabral pathologies second to pincer impingement and it is likely that this actually happened at the time of the motor vehicle accident and was the ultimate cause of the Iabral tears."
3. Under the heading "Consistency of Presentation", the medical assessor stated: "Mrs Koic was most helpful at the time of today's physical examination and history taking. She seemed extremely anxious at the time of examination with most aspects of examination causing her discomfort and therefore a careful requirement to repeat and obtain the evidence that I have documented above."
4. Under the heading "Relevant Imaging Studies and Other Investigations", the medical assessor reviewed the available reports and various scans provided and outlined them as follows: "• 25 May 2012 - X-rays Both Knees - Dr Tim Mander-Jones - no abnormality. • 15 October 2012 - Bone Scan - Dr Hans Van der Wall - scan findings are consistent with several sites of facet joint disease in the upper cervical spine and the possibility of trauma to the vertebral bodies in the lower lumbar spine against a background of multiple fusion abnormalities. There is also scan evidence of left sacroiliac joint incompetence. There is associated adductor and hamstring enthesopathy and hip impingement. • 17 October 2012 - MRl Scan Cervical Spine and Lumbar Spine - Dr Hemi Williams - Cervical spine reveals the complex development of cervical abnormalities in the vertebral column in the form of developmental failures osegmentation and formation with hemivertebra and unilateral fusion bars. There is no evidence of fracture. There are some spondylotic changes characterised by mild disc bulging and small protrusions but there are no signs of cord impingement or gross neurological impingement. The lumbar spine also demonstrates normality in the form of very tiny disc bulges at L5/S1. There are no signs of significant disc protrusion or herniation or evidence of central canal, recess or foraminal stenosis in the lumbar spine. • 15 September 2013 - MRl Scan Left Hip - Dr Jennie Noakes - moderate reduction in anterior femoral head-neck offset due to prominent new bone present Anterosuperior Iabral tearing with an incomplete tear extending into the superior labrum. Small chondral rim lesion anterosuperiorly. • 28 October 2013 - X-ray Left Hip and Pelvis - Dr S Kariappa - femoral bump seen involving the lateral cortex of the femoral head/neck junction. No other findings. • 1 November 2013 - CT Scan Left Hip - Dr Carl Bryant - there is protuberance of the anterosuperior aspect of the junction of the femoral head and neck on both sides consistent with CAM deformity. I reviewed this scan and I note the evidence of CAM deformities on the right and left side. • 19 February 2014 - X-ray Both Hips and Pelvis - Dr J Stevenson - there is a minor deformity of the left femoral neck with slight thickening in the mid-neck on the Dunn view on the left. No deformity of the head and neck junction on either proximal femur is noted. The left acetabulum appears marginally deep. • 26 March 2014 - X-ray Pelvis and Left Hip - Dr H Williams - early sclerosis of the acetabulum of the left hip. Moderate degenerative changes in the lower part of the left sacroiliac joint and minor degenerative changes around the symphysis pubis. • 1 September 2014 - MRl Scan Right Hip - Dr J Kuan - labrum intact with no evidence of tear and no paralabral cyst. The hip joint is intact. No CAM lesion detected. No evidence of marrow oedema. Minor subcortical cystic change at its base anteriorly. Mild tendinosis of the gluteus medius but with no tears - mild trochanteric bursitis. • 10 September 2014 - X-ray Pelvis and Right and Left Hip - Dunn views - Dr H Williams - bump deformity of the superolateral aspect of the left femur consistent with a CAM lesion. No significant osteoarthritis in the left hip joint and no significant acetabular osteophytes overhanging the head. On the right side there is mild irregular sclerosis/lucency of the femoral waist on the two Dunn views although not appearing to be associated with significant CAM like bump deformity. • 3 January 2015 - MRl Scan Left Hip - Dr H Williams - a labrum tear and mild gluteal tendinopathy. …"
5. Under the heading "Summary of Relevant Documentation Provided for the Initial Assessment", the medical assessor relevantly stated: "I read the report prepared by Professor Ian Cameron on 15 March 2015. Professor Cameron states that there was soft tissue injury to the cervical spine, lumbosacral spine and right shoulder as a result of the motor vehicle accident. Professor Cameron noted that the left hip pathology was not convincingly related to the motor vehicle accident despite the ongoing treatment. He noted that the symptoms relating to the hips were not recorded in the motor vehicle accident medical certificate or the claim form dated 9 August 2012. I noted numerous reports prepared by Dr Robert Molnar, the treating surgeon, which extend from 28 October 2013 until 16 February 2017. At the time of his initial assessment he notes that there was injury to the left hip in 2012 at the time of the motor vehicle accident. I again point out that in his report of 15 January 2014 he stated that there was similar discomfort in the right hip had occurred just prior to the time of that review. l read the very lengthy report of 26 June 2014 prepared by Dr Robert Drummond, orthopaedic surgeon, who has a very specific interest in hip joint disorders. Dr Drummond suggested that there had been a soft tissue injury to the cervical spine and lumbar spine as a result of the current motor vehicle accident He stated that in his opinion the clinical symptoms associated with the left hip related to developmental constitutional pathology and is not caused or Influenced by the current motor vehicle accident Dr Drummond notes that the Emergency Department at Concord Hospital did not document symptoms associated with the right or left hip."
6. Under the heading "Summary of Relevant Additional Documentation Provided for the Further Assessment", the medical assessor relevantly stated: "Dr Andrew Keller, occupational physician, reviewed Mrs Koic on 14 February 2016. Dr Keller takes the view there was no assessable injury relating to the right and left shoulders and that the hip conditions relate to pre-existing congenital abnormalities. He assesses impairment in the lumbar spine and cervical spine at 0% whole person impairment. Dr Anthony Smith, orthopaedic surgeon, on 12 May 2016 reviewed Mrs Koic. Dr Smith has significant experience in hip surgery. It is his opinion that the symptoms associated with the cervical and lumbar spine soft tissue injury had resolved and that the symptoms relating to both hips are not related to the car accident He noted that Mrs Koic had indeed complained of direct knee pain early in her clinical course with her knees having hit the dashboard of the car and this explains of course the initial plain x-rays of both knees performed on 25 May 2012 with no abnormalities noted. At the time of today's assessment Mrs Koic reports no knee symptomatology. … I note a report prepared by Dr Scott Harbison, orthopaedic surgeon, of 30 January 2018. Dr Harbison has a long career in orthopaedics and hip surgery. Dr Harbison assesses impairment relating to the neck and low back and also noted some discomfort in both knees at the time of his assessment. Dr Harbison notes that the right and left hip pathology do not relate to the motor vehicle accident. He suggests that there is a significant level of Abnormal Illness Behaviour noted at the time of his assessment and appeared concerned that there was such a plethora of disabling symptoms, more than 5 years after what was a relatively minor accident, according to his history."
7. Under the heading "Diagnosis and Causation", the medical assessor concluded: "I am historically satisfied that Mrs Koic had no previous history of painful or traumatic disorder prior to the current motor vehicle accident relating to her right and left upper or lower extremities nor indeed her axial spine. On that date Mrs Koic sustained a soft tissue injury to the cervicothoracic and lumbar spine and also to the area of the right and left shoulder. The discomfort associated with her right and left hip joint is historically (obtained from patient history) related to the motor vehicle accident and has been accepted by the treating surgeon and some independent medical specialists offering a contrary view that such pathology relates to the congenital lesions on the neck/head junction of both hips and that one cannot get intra-articular Iabral pathology as a result of such an accident. From my own point of view I agree with this latter opinion and it is well supported in the literature to suggest that one would need extreme trauma to the right and left hip joint at the time of a motor vehicle accident to cause such pathology. However, I am swayed by the evidence put forward by the attending surgeon, Dr Molnar and the historical record that the left hip was injured at the time of the current motor vehicle accident. I do not accept, however, that the right hip pathology was caused at the time. I have accepted the historical comment by Dr Molnar in his report at the right hip symptomatology was noted to have recently appeared at the time of his assessment on 15 January 2014 when he was reviewing Mrs Koic some 4 weeks after the left hip arthroscopy."
8. Having provided reasons for his decision, the medical assessor determined that the first defendant suffered 2% WPI in relation to the left hip, with a combined WPI totalling 11%.

Judicial review generally

1. This Court has jurisdiction to grant any relief or remedy in the nature of a writ of certiorari, which includes jurisdiction to quash the ultimate determination of a court or tribunal, including both a medical assessor and proper officer, if that determination has been made on the basis of an error of law on the face of the record. The face of the record includes the reasons expressed by the court or tribunal for its ultimate determination: s 69 of the Supreme Court Act 1970 (NSW).

Grounds of judicial review

1. The insurer alleges that there are a number of jurisdictional errors and/or errors of law on the face of the record in both the medical assessor's and the proper officer's decision. Alternatively, the insurer alleges that the medical assessor and the proper officer constructively failed to exercise their statutory power and jurisdiction in making their decisions. The grounds of review in relation to the medical assessor's decision are outlined in para 2 of the insurer's summons. I will first consider grounds 2(a)-(b) together, followed by grounds 2(c)-(e) together, and finally ground 2(f). Although these grounds of appeal are all expressed slightly differently, they all concern causation.

The insurer's submissions

1. The insurer submitted that in this case, the "medical assessment matter" before the medical assessor for assessment was "whether the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident was greater than 10%": see s 58(1)(d) of the MAC Act. As such, an essential aspect of the statutory task involved determining causation of the relevant injuries.
2. Clauses 1.5 to 1.7 of the Permanent Impairment Guidelines (reproduced earlier in this judgment) set out the requirements for making a finding as to causation of injuries which are the subject of medical assessments. Clauses 1.6-1.7 state the steps that must be taken by a medical assessor in relation to assessing causation.
3. At p 15 of his decision, when assessing the left hip, the medical assessor stated: "I am historically satisfied that Mrs Koic had no previous history of painful or traumatic disorder prior to the current motor vehicle accident relating to her right and left upper or lower extremities... The discomfort associated with her right and left hip joint is historically (obtained from patient history) related to the motor vehicle accident and has been accepted by the treating surgeon and some independent medical specialists with other independent medical specialists offering a contrary view that such pathology relates to the congenital lesions on the neck/head junction of both hips and that one cannot get intra-articular labral pathology as a result of such an accident. From my own point of view I agree with this latter opinion and it is well supported in the literature to suggest that one would need extreme trauma to the right and left hip joint at the time of a motor vehicle accident to cause such pathology. However, I am swayed by the evidence put forward by the attending surgeon, Dr Molnar and the historical record that the left hip was injured at the time of the current motor vehicle accident."
4. The insurer submitted that the medical assessor failed to comply with the Permanent Impairment Guidelines when determining causation. After stating that he agreed with the opinion that the discomfort in the first defendant's left hip joint "relates to the congenital lesions on the neck/head junction of both hips and that one cannot get intra-articular labral pathology as a result of such an accident", he nevertheless concluded that the left hip injury was caused by the accident.
5. The reason the medical assessor gave for his conclusion was that he was "swayed by the evidence put forward by Dr Molnar" and the historical record that the left hip was injured at the time of the accident. The insurer submitted that this approach does not comply with the requirements under the Permanent Impairment Guidelines or common law.
6. The insurer submitted that the medical assessor's error is not mitigated by his reliance on Dr Molnar. The medical assessor referred to Dr Molnar's reports at pp 4-5 of his report, noting that Dr Molnar had accepted right and left hip joint pathology as causally related to the motor vehicle accident, while also acknowledging the first defendant's pre-existing congenital abnormality. The insurer submitted that these references also do not comply with the requirements of the Permanent Impairment Guidelines.
7. According to the insurer, the medical assessor's failure to address the issue of causation of the left hip injury as required under cls 1.5-1.7 of the Permanent Impairment Guidelines constitutes a constructive failure to exercise jurisdiction. As such, the medical assessment in relation to the left hip is invalid.

The first defendant's submissions

1. The first defendant submitted that the medical assessor made no error of law in determining causation of the left hip.
2. At the outset, the medical assessor identified that there was a dispute in respect of causation of the left hip injury. As p 4, he stated: "Today, Mrs Koic states that she was experiencing discomfort in the right and left hip from the time of the accident. This feature of history has been challenged by other history takers and will be discussed later."
3. The medical assessor continued by noting that the first defendant consulted her general practitioner, Dr Alexandratos, who referred her to a sports physician, Dr Saunders. The first defendant was eventually referred to an orthopaedic surgeon, Dr Molnar, who became her treating specialist and performed her operation.
4. On p 5 of the decision, the medical assessor stated: "In a report on 16 February 2017 when Dr Molnar was asked to defend his decision to equate the hip pathology with the motor vehicle accident following receipt of a report from orthopaedic surgeon, Dr Drummond, he made the comment that Mrs Koic's acetabular morphology predisposed her to labral pathologies second to pincer impingement and it is likely that this actually happened at the time of the motor vehicle accident and was the ultimate cause of the labral tears."
5. The first defendant submitted that Dr Drummond reported on behalf of the insurer, and in his decision he addressed the issue of causation for the left hip.
6. The medical assessor undertook a clinical examination of the first defendant as required by the Permanent Impairment Guidelines. He also considered and reviewed the documents which had been submitted. The first defendant submitted that the medical assessor's statement of reasons shows a detailed analysis and overview of the available documents.
7. As to the clinical examination and matters relating to consistency of presentation, at p 9 of his decision the medical assessor stated: "Mrs Koic was most helpful at the time of today's physical examination and history taking. She seemed extremely anxious at the time of examination with most aspects of examination causing her discomfort and therefore a careful requirement to repeat and obtain the evidence that I have documented above."
8. The medical assessor then set out the relevant elements of the available documentary material relating to the first medical assessment, which included not only the reports of Dr Molnar, but also the opinion of Dr Drummond. The medical assessor then set out a further document review of the materials, including a summary of the reports of practitioners who addressed causation of the left hip injury, obtained after the first medical assessment and for the purposes of the medical assessor's decision.
9. The first defendant submitted that the medical assessor set out reasons in accordance with his statutory obligation. Those reasons set out his path of reasoning for his decision and address the causation dispute in a manner which the first defendant argued is appropriate for a finding as to causation.
10. The first defendant argued that the medical assessor's conclusion under "Diagnosis and Causation" extracted earlier in this judgment shows that although the medical assessor understood the insurer's concerns and appreciated the medical opinions on which the insurer's position relies, he was nevertheless persuaded by the report of Dr Molnar and the first defendant's history that her left hip injury was caused by the subject accident.
11. The first defendant argued that the Permanent Impairment Guidelines provide guidance to a medical assessor in determining causation. However, she argued that there is nothing incorrect in the medical assessor's approach to resolving the issue of causation. He identified the elements of the insurer's position on causation, and then explained why he did not accept that position. The first defendant submitted that the medical assessor had before him a body of qualified medical opinions which differed, and that ultimately he was persuaded by the view of the treating attendant specialist and by the first defendant's given history. Accordingly, there is no basis to the insurer's argument that the legal test for causation was wrongly applied, or that the outcome of its application was in error.

Consideration

1. The passages in which the medical assessor addressed the first defendant's symptomology and treatment to the left hip have been set out in detail earlier in this judgment. Relevantly, on p 4 of his report, he stated that the first defendant told him that she had been experiencing discomfort in the left and right hip from the time of the accident, but he added that "this feature of history has been challenged by other history takers and will be discussed later." He noted that six months after the accident, in September 2012, the first defendant came under the care of sports physician Dr Jeni Saunders, who noted the presence of axial pain and pain associated with the left hip. Dr Saunders ordered investigation of the left sacroiliac joint, suspecting it might be the site of significant injury. On p 5 of his report, the medical assessor wrote that at the time, "scans suggested that the left sacroiliac joint had sustained soft tissue damage and was the site of discomfort". The first defendant's pain was treated with an intra-articular hip injection.
2. The medical assessor then wrote that Dr Saunders referred the first defendant to Dr Molnar, who wrote "numerous reports" in relation to her condition extending from 28 October 2013 to 16 February 2017. Dr Molnar assessed her left hip with a scan, which demonstrated a "superolateral labral tear, chondrolabral injunction injury and an anterior femoral CAM lesion". Dr Molar performed two arthroscopic surgeries on the first defendant's left hip to repair the damaged tissue, one in 2013 and one in 2015. Dr Molnar gave the opinion that her painful pathologies to the left hip must have been caused by the subject accident because she had not experienced them before it occurred.
3. At p 6 of his report, after detailing Dr Molar's treatment of the first defendant from 2013-2015, the medical assessor stated: "In a report on 16 February 2017 when Dr Molnar was asked to defend his decision to equate the hip pathology with the motor vehicle accident following receipt of a report from orthopaedic surgeon, Dr Drummond, he made the comment that Mrs Koic's acetabular morphology predisposed her to Iabral pathologies second to pincer impingement and it is likely that this actually happened at the time of the motor vehicle accident and was the ultimate cause of the Iabral tears."
4. I will return to discuss this 16 February 2017 report in due course.
5. At p 11 of his report, the medical assessor summarised the available x-ray, MRI, and CT scans. He then turned to address the views of the various medical experts, and why their opinions concerning the causation of the left hip pathology differed from that of Dr Molnar.
6. At p 12, he noted that Professor Ian Cameron, specialist in rehabilitation medicine, had given the opinion that the first defendant's hip pathology was not convincingly related to the subject accident, and that the symptoms relating to the left hip were not recorded in the accident medical certificate or the contemporaneous claim form. The medical assessor also noted the 26 June 2014 report of Dr Robert Drummond, orthopaedic surgeon, who stated that the first defendant's symptoms to the right hip were related to "developmental constitutional pathology" and were "not caused or influenced by" the subject accident. Like Professor Cameron, Dr Drummond had noted that the emergency department notes from the date of the accident did not note an injury to the left hip.
7. At pp 14 to 15, the medical assessor noted the reports of Dr Andrew Keller, occupational physician, and Drs Anthony Smith and Scott Harbison, orthopaedic surgeons, each of whom stated that the first defendant's hip injury was not related to the subject accident. The medical assessor wrote that Dr Harbison expressed concern that the first defendant reported "such a plethora of disabling symptoms, more than 5 years after what was a relatively minor accident, according to his history."
8. It is the two paragraphs under the heading "Diagnosis and Causation" at p 15 of the medical assessor's decision which give rise to the primary disagreement in these proceedings. The medical assessor began his conclusion by stating, "I am historically satisfied that Mrs Koic had no previous history of painful or traumatic disorder prior to the current motor vehicle accident". At the hearing of these proceedings, counsel for the insurer took issue with the phrase "historically satisfied", arguing that its meaning is unclear. However, I accept that the word "historically" may be understood to mean "obtained from [the] patient history", as the medical assessor clarified in the following paragraph when he stated that Dr Molnar, as the first defendant's treating surgeon, had accepted that her left hip discomfort originated with the subject accident.
9. The medical assessor then wrote that other independent medical assessors held "a contrary view that such pathology relates to the congenital lesions on the neck/head junction of both hips and that one cannot get intra-articular Iabral pathology as a result of such an accident." The medical assessor stated: "From my own point of view I agree with this latter opinion and it is well supported in the literature to suggest that one would need extreme trauma to the right and left hip joint at the time of a motor vehicle accident to cause such pathology."
10. He then continued, still on p 15: "However, I am swayed by the evidence put forward by the attending surgeon, Dr Molnar and the historical record that the left hip was injured at the time of the current motor vehicle accident."
11. As to the "historical record", at the hearing of these proceedings, counsel for the insurer noted that there is no direct evidence from the time of the accident that the left hip had been injured. As outlined earlier, the first defendant's complaint of the left hip pain was first recorded in September 2012, six months later. However, from that point forward, the records of Drs Saunders and Molnar, as well as the history provided by the first defendant, detail the presence of left hip pathology.
12. As to the evidence put forward by Dr Molar, there were several reports which addressed the issue of causation of the left hip were available to the medical assessor. On 28 October 2013, Dr Molnar wrote that the first defendant "injured her hip back in 2012 when she was involved in a motor vehicle crash. Ultimately, investigations have included bone scans and MRI scans which have demonstrated a labral tear" (CB 131).
13. In a letter to the first defendant's solicitors dated 23 October 2014, Dr Molnar wrote (CB 139): "At the time of my initial review, Ms Koic complained about the left hip and groin pain. The patient reported that in 2012 she was involved in a motor vehicle crash. Prior to that she reports no proceeding hip or groin pain on either side…"
14. Later in that letter, he continued (CB 141): "Unfortunately, the cause of the patient's labral tear is difficult to determine, however, she does report no previous hip symptoms prior to the accident and for this reason I do feel that it is reasonable to attribute the hip pathology to the original motor vehicle accident."
15. In a letter dated 11 January 2017, the first defendant's solicitors wrote to Dr Molar seeking his medical opinion in relation to her case (CB 149-151). In that letter, solicitors for the first defendant requested that Dr Molar "accept our instructions are correct" with respect to certain assumptions. Those assumptions included that the first defendant's account of the subject accident was accurate, that the collision was "forceful and unexpected" and "occurred at speed, and with considerable force", and that she was "thrown violently forwards and backwards in her seat" (CB 149) in which she had been twisted around at the moment of impact. Dr Molar was further asked to assume that the first defendant noticed symptoms to her left hip "within days" of the collision (CB 150). The letter concluded (CB 151): "[W]e seek your comment and expert opinion as to whether, on the basis of the above detailed history, which we ask you to assume is correct, there is, on balance of probabilities, particularly in the absence of any history or complaint of symptoms or disability before the motor vehicle accident, a causal nexus, on balance of probabilities, between the circumstances of the motor vehicle accident and the injuries diagnosed by you to have been sustained by Mrs Koic to both hips…"
16. On 16 February 2017, Dr Molar issued a report in response to the first defendant's solicitors' request. That report formed "additional relevant information" in the first defendant's application for further assessment to the medical assessor. Dr Molar wrote (CB 152): "In response to your questions specifically, I have considered Dr Drummond's opinion that the pathology Mrs Koic has suffered was congenital in nature. While it is likely that Mrs Koic's acetabular morphology predisposed her to labral pathology secondary to pincer impingement, it is quite likely that the accident was the ultimate cause of the labral tear. The forces involved in a high speed motor vehicle accident are unpredictable and given the patient's assertion that she had no prior pain in her hips, lower back, neck and shoulders, the balance of probabilities is in my opinion that the labral tears were caused by the trauma involved in the high speed collision. Hip pathology such as labral tears can often be difficult to diagnose, and it is not at all surprising that the patient did not seek treatment immediately. Previous studies in the US have demonstrated that patients are often misdiagnosed with hip pathology and on average, it may take up to six years to obtain an appropriate diagnosis. Mrs Koic was seen by an expert Musculoskeletal Physician relatively early after the injury at the time when the diagnosis was made. Unfortunately, Ms Koic's soft tissue injuries combined with the labral pathology likely led to altered mechanics in her gait, and I suspect that this is the cause of the more diffuse pain around the pelvis and sacroiliac joint regions."
17. Counsel for both the insurer and the first defendant agreed that it was this 16 February 2017 report that "swayed" the medical assessor to agree with Dr Molar's assessment of causation. Counsel for the insurer called the report "highly questionable" in light of its premise (T 15.36). Moreover, he submitted that Dr Molar only provided an opinion on the balance of probabilities, and failed to address causation to the standard required under the Permanent Impairment Guidelines or the common law. In determining causation, he argued, Dr Molar had "shot from the hip" (T 4.25-26).
18. Counsel for the first defendant replied that there is no mischief to asking an expert to assume a set of circumstances which reflect an important part of a claimant's history (T 19.45). He argued that it is both common and proper to issue such instructions in the context in which such reports are requested by parties to medical disputes.
19. Importantly, it is noted that the insurer did not submit that the assumptions put to Dr Molar were inaccurate in any way.
20. Clauses 1.5 to 1.7 of the Permanent Impairment Guidelines concern causation in medical assessments under the MAC Act and are reproduced earlier in this judgment. Clause 1.5 states that a determination of causation is "implied" into medical assessments, and that medical assessors "must be aware" of relevant AMA4 Guides and common law principles. However, the Permanent Impairment Guidelines prescribe no set formula for determining causation in every case. Clause 1.7 states that "the accepted approach involves determining whether the injury (and the associated impairment) was caused or materially contributed by the motor accident".
21. There is no dispute that in his reasons, the medical assessor accurately and fairly set out the differing medical evidence concerning the first defendant's left hip injury. He summarised the reports of Professor Cameron and Drs Drummond, Keller, Smith and Harbison, all of whom stated that the first defendant's left hip injury was not caused by the subject accident. He also referred to the reports of Dr Molnar, and to the first defendant's own history, which stated that the accident had caused her hip pathology. In his conclusion, the medical assessor said that he agreed with the opinions of the former group of experts that "one would need extreme trauma" to the hip at the time of the subject accident to cause the first defendant's pathology. He then concluded that he was "swayed" that this had occurred by the evidence of the first defendant and Dr Molar, her treating practitioner.
22. Contrary to the insurer's submissions, it is my view that these two statements are not inconsistent. Neither can it be said that the medical assessor "shot from the hip". At p 5 of his reasons, he had set out a detailed history of the first defendant's left hip symptomology, including extensive treatment by Dr Molnar from 2013 to 2015. At p 6 of his reasons, extracted earlier in this judgment, the medical assessor referred to the 16 February 2017 report of Dr Molnar as to causation. It was in that report that Dr Molar agreed with Dr Drummond that the first defendant suffered a congenital acetabular morphology. However, he determined that this condition had not singularly caused her labral pathology, but that it had "predisposed" her to the condition which he determined was "ultimately caused" by the subject accident. It was his opinion that the "unpredictable" forces of a motor vehicle accident were capable of causing her labral tears. Moreover, Dr Molar noted that those tears would have been difficult to diagnose, which would explain why the first defendant had not sought treatment immediately, and why the injury was not recorded in the hospital notes on the date of her accident.
23. Under cl 1.6 of the Permanent Impairment Guidelines, determining causation involves the medical judgment of verifying that the motor vehicle accident could have contributed to the impairment. Dr Molar's reports provided this evidence, and it was open to the medical assessor to find them persuasive. Determining causation also involves the non-medical informed judgment of concluding that the motor vehicle accident did contribute to the impairment. The medical assessor stated that he was "swayed" that the accident was the ultimate cause of the injury. Clause 1.7 of the Permanent Impairment Guidelines states that the subject accident does not have to be the sole cause of the injury, so long as it was "a contributing cause which is more than negligible".
24. I will discuss the sufficiency of the medical assessor's reasons in further detail when I address grounds 2(c)-(e) below. However, for present purposes, neither the Permanent Impairment Guidelines nor the common law required the medical assessor to use a prescribed form of words in reaching his determination. In reviewing the available evidence and concluding that he was swayed by the first defendant's and Dr Molar's evidence, it is my view that the medical assessor satisfactorily addressed the issue of causation of the left hip injury as required under cls 1.5 to 1.7 of the Permanent Impairment Guidelines. This ground of review fails.

The insurer's submissions

1. The insurer submitted that the medical assessor was obliged to set out lawful reasons for his decision, pursuant to s 61(9) of the MAC Act and the Motor Accident Guidelines.
2. The insurer submitted that in making his decision, the medical assessor failed to set out his actual path of reasoning and to do so in terms sufficiently clear so as to enable a reader to determine whether or not he fell into legal error, as set out by the High Court in Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; 303 ALR 64 ("Wingfoot"). He did not set out lawful reasons for his findings on causation, and in particular, failed to explain why the left hip injury was causally related to the subject accident.
3. The issue of causation was a statutory task that the assessor was required to consider pursuant to s 58(1)(d) of the MAC Act, as well as under the Permanent Impairment Guidelines. The insurer submitted that the medical assessor's duty to give reasons was heightened in circumstances where the insurer highlighted the issue of causation in its MAS forms and submissions.
4. In particular, the insurer had put in issue the existence of a hip injury as follows: 1. In the MAS 2A Application form, the first defendant had listed a number of injuries allegedly caused by the accident, including injury to the "lower limbs - left hip". 2. In the MAS 2R Reply form, the insurer said that the first defendant's list of injuries was incorrect, and listed instead just three injuries that it says were caused by the accident: the cervical spine, lumbar spine and right shoulder. 3. In the MAS 4A Application form, the first defendant again listed a number of injuries allegedly caused by the accident, including injury to the "left & right hip". 4. In the MAS 4R Reply form, the insurer once again stated that the first defendant's list of injuries was incorrect, and listed instead just three injuries that it says were caused by the accident: the cervical spine, lumbar spine and right shoulder. 5. The insurer's submissions accompanying the 4R form also addressed causation of the left hip injury and submitted that the first medical assessor was correct in finding that the left hip was not causally related to the accident.
5. The insurer submitted that in this way, the application and reply forms squarely put in issue the question of causation of the left hip injury.
6. In Allianz Australia Insurance Ltd v Francica (2012) 63 MVR 1; [2012] NSWSC 1577, Hall J stated at [17]: "[17] ...The decision of the Court of Appeal in Campbell City Council v Vegan (2006) NSWCA 284 is the leading authority in relation to the principles that apply to a case such as the present. His Honour, Basten JA, with whom the other members of court agreed, at paragraph 121 stated that: 'Where it is necessary for the panel to make findings of fact in order to reach a particular conclusion as to the existence, nature and extent of any physical impairment it may be expected that the findings and material facts will be set out in its reasons. Where facts are in dispute, it may be necessary to refer to evidence or other material on which findings are based but the extent to which this is necessary will vary from case to case. More importantly, where more than one conclusion is open, it will be necessary for the panel to give some explanation for its preference of one conclusion over another. That aspect may have particular significance in circumstances where the medical members of the panel have made their own assessment of the applicant's condition and have come to a different conclusion from that reached by other medical practitioners as set out in reports provided to the panel.'"
7. The insurer submitted that in determining the adequacy of reasons, it is important to determine what was at issue between the parties before the determining tribunal.
8. In Alchin v Daley [2009] NSWCA 418, Sackville AJA, with whom McColl and Young JJA agreed, stated at [35]: "[35] …The extent and content of the reasons will depend on the particular case and the issues under consideration but it is essential to expose the reasoning on the point critical to the contest between the parties….This may require the judge to refer to evidence which is critical to the proper determination of the issue in dispute" (citations omitted)
9. The insurer submitted that because causation of the left hip injury was the "battleground" between the parties, there was onus on the medical assessor to properly address this issue in his reasons. In this context, the medical assessor's reasons fell below the required legal standard.

The first defendant's submissions

1. In addressing the standard to which the medical assessor's reasons are to be held, the first defendant referred to AAI Limited v Fitzpatrick [2015] NSWSC 1108 ("Fitzpatrick") at [27]-[31]: "[27] There was no real issue between the parties as to the assessor's obligations under this statutory scheme, where the statutory task being undertaken requires consideration to be given to the question of both factual and medical causation. [28] Those obligations are of the nature discussed in Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; (2013) 252 LR 480 at [47]-[48], namely, to form and give his or her own opinion on the medical dispute referred. In undertaking that function, the assessor must consider what both parties advance, in light of the information provided to the assessor. The assessor is not called on to choose between competing arguments, or to opine on the correctness of other opinions about the medical dispute, but must form his or her own opinion, by applying the assessor's own medical experience and expertise. [29] In forming his or her opinions on the dispute, the assessor must thus take into account what any clinical examination he or she conducts reveals, as well as the opinions of other medical practitioners, including those expressed in earlier certificates, by treating doctors and those who have expressed medico-legal opinions. Account must also be taken of diagnostic findings and other available notes and reports, including those from allied health professionals. [30] The conclusions expressed in the certificate issued must then be explained by the assessor in the accompanying statement of the reasons. While the reasons given need not be elaborate, they must disclose the actual path of reasoning by which the assessor arrived at the opinions formed on each of the issues which had to be resolved. Such reasons are not, in review proceedings such as this, to be scrutinised overzealously, as discussed in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 271-2. [31] As discussed in Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 N WLR 372 at [22], however, where there is a medical controversy over a particular issue, more expansive explanations may need to be given."
2. The first defendant submitted that the medical assessor's reasons are to be read beneficially and as a whole. The medical assessor explained why he made the positive causation finding, and in doing so he dealt with the articulated case advanced by the plaintiff on the differing medical evidence. Accordingly, his reasons reveal no error.

Consideration

1. The medical assessor was obliged to provide reasons for his findings pursuant to s 61(9) of the MAC Act. The standard by which those reasons are considered to have discharged his obligation is set out in Wingfoot at [54]-[56], referred to by Hall J in Fitzpatrick quoted above. In Wingfoot, the High Court held at [55] that a medical assessor's written reasons "must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law".
2. While Wingfoot refers to a medical panel under the Accident Compensation Act 1985 (Vic), the standard for written reasons set out in Wingfoot applies equally to the medical assessor under the MAC Act in this case: see Frost v Kourouche (2014) 86 NSWLR 214 at [2], [40]; Zahed v JAG Limited t/as NRMA Insurance (2016) 75 MVR 1 at [34].
3. In considering the adequacy of the medical assessor's reasons, I also accept that they are not to be "minutely and finely construed with an eye keenly attuned to the perception of error", but rather read fairly and as a whole: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; Martin v Kelly [2008] NSWSC 577 ("Martin") at [16]. In reading the medical assessor's reasons generally, I bear in mind that they are written to inform, and "not to be scrutinised upon overzealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed".
4. Read as a whole and fairly, it is my view that the medical assessor's reasons meet the standard set out in Wingfoot at [55] quoted earlier. As I outlined in relation to grounds 2(a)-(b), the medical assessor accurately set out the available evidence on causation, and then determined that he was "swayed" by the evidence of the first defendant and her treating surgeon. In the context of the decision as a whole, it is my view that it was open to the medical assessor to agree with the medical experts who stated that "one would need extreme trauma to the right and left hip joint at the time of a motor vehicle accident" to cause the first defendant's pathology, and also be persuaded by the evidence of the first defendant and Dr Molar that this trauma occurred in the subject accident. Crucially, the medical assessor stated that he accepted Dr Molar's explanation for the delay in onset the first defendant's symptoms.
5. For these reasons, I am satisfied that the medical assessor provided sufficient reasons why the subject accident caused the first defendant's injury to the left hip, and do not constitute an error of law. This ground of review fails.

(3) 2(c) - Failure to respond to a substantial and clearly articulated argument

The insurer's submissions

1. The insurer argued that it put the issue of causation of the left hip in issue, and had made submissions on the issue. These arguments were based on the evidence set out in the submissions. The insurer argued that in his decision, the medical assessor did not respond to all of the insurer's arguments.
2. In Allianz Australia Insurance Ltd v Cervantes (2012) 61 MVR 443, Basten JA addressed the legal obligation of administrative decision-makers to take particular evidence into account, stating at [19]-[20]: "[19] ...In Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 73 ALD 321; 197 ALR 389; 77 ALJR 1088; [2003] HCA 26 at 24, Gummow and Callinan JJ stated: [24] To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice. [20] A similar point was made by Kirby J at [86] referring to a passage in the judgment of Gaudron J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; 179 ALR 238; [2001] HCA 22 at [81] (Miah) where, after noting that it was not always easy to distinguish an error of law which is jurisdictional from one that is not, her Honour continued: [81] However, the present case is, in my view, a clear case of constructive failure to exercise jurisdiction. That is because the delegate failed to consider the substance of Mr Miah's application and could only have failed to do so because he misunderstood what is involved in the Constitutional definition of 'refugee'."
3. In De Gelder, Gleeson JA (with MacFarlan and Gleeson JJA agreeing) held that the review panel in that case had failed to respond to a substantial argument raised by the claimant, stating at [109]: "Here the Panel failed to respond to a substantial argument based on evidence relied upon by Mr De Gelder as to the causation of his thoracic spine injury by the motor accident. It may also be inferred that the Panel failed to apply itself to the real question to be decided in carrying out its statutory function under s 58(J)(d), because it misunderstood a significant body of evidence relevant to its non-medical determination. What the Panel did amounted to a jurisdictional error. The Panel's decision recorded in its certificate is to be regarded as a purported and not real exercise of its statutory function in s 58(J)(d), leaving that statutory function unexercised, and the Authority and the Panel liable to the relief granted by the primary judge by way of judicial review…"
4. The insurer submitted that in failing to respond to its substantial and clearly articulated arguments, the medical assessor failed to afford procedural fairness and constructively failed to exercise his jurisdiction.
5. Any breach of the rules of procedural fairness is a serious matter. There is no such thing as a trivial denial of procedural fairness: see Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; 62 ALD 285; [2000] HCA 57 at [17] and [59].
6. The first defendant relied on her submissions in relation to the previous grounds of review.

Consideration

1. The failure of a decision maker to respond to a substantial and clearly-articulated argument is a failure to accord procedural fairness and a jurisdictional error: see De Gelder at [89]-[94]; Cervantes; Dranichnikov as referred to in the insurer's submissions. The content of the requirement to accord procedural fairness will depend upon the facts and circumstances of a particular case: see De Gelder at [93]; Trazivuk v Motor Accidents Authority of New South Wales [2010] NSWCA 287 at [28]. I have accepted that what constitutes sufficient reasons for the medical assessor differs from the standard required of a court: see Wingfoot at [54]-[56].
2. For the reasons I have given in relation to grounds 2(a)-(e), it is my view that the medical assessor satisfactorily responded to the insurer's argument that the subject accident was not the cause of the first defendant's left hip injury. At p 4 of his decision, the medical assessor flagged that causation was in issue, and stated that he would address the controversy in due course. He then referred to the first defendant's oral history of her pathology to the left hip, and accurately summarised the various evidence of the medical experts and her treating practitioners. It was open to the medical assessor to prefer the evidence of the first defendant and Dr Molar, as he did. This ground of review fails.

(4) 2(f) - Legal unreasonableness

1. Finally, the insurer submitted that the decision was vitiated by legal unreasonableness. In Minister for Immigration v Li (2013) 249 CLR 332; [2013] HCA 18 ("Li"), the High Court observed at [68] and [76]: "[68] Lord Greene MR's oft-quoted formulation of unreasonableness in Wednesbury has been criticised for 'circularity and vagueness', as have subsequent attempts to clarify it . However, as has been noted, Wednesbury is not the starting point for the standard of reasonableness, nor should it be considered the end point. The legal standard of unreasonableness should not be considered as limited to what is in effect an irrational, if not bizarre, decision - which is to say one that is so unreasonable that no reasonable person could have arrived at it - nor should Lord Greene MR be taken to have limited unreasonableness in this way in his judgment in Wednesbury. This aspect of his Lordship's judgment may more sensibly be taken to recognise that an inference of unreasonableness may in some cases be objectively drawn even where a particular error in reasoning cannot be identified. This is recognised by the principles governing the review of a judicial discretion, which, it may be observed, were settled in Australia by House v The King, before Wednesbury was decided. And the same principles evidently informed what was said by Dixon J about review of an administrative decision in Avon Downs Pty Ltd v Federal Commissioner of Taxation, which was decided less than two years after Wednesbury, at a time when it was the practice of the High Court to follow decisions of the Court of Appeal in England which appeared to have settled the law in a particular area. … [76] As to the inferences that may be drawn by an appellate court, it was said in House v The King that an appellate court may infer that in some way there has been a failure properly to exercise the discretion 'if upon the facts [the result] is unreasonable or plainly unjust'. The same reasoning might apply to the review of the exercise of a statutory discretion, where unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power. Even where some reasons have been provided, as is the case here, it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification." (footnotes omitted)
2. The insurer submitted that at a crucial stage of the medical assessor's reasons, he determined that a person "cannot get intra-articular labral pathology as a result of such an accident". However, he then went on to state that that he was swayed by unidentified evidence from Dr Molnar, and then found that the accident caused injury to the claimant's left hip. The insurer submitted that by so doing, the medical assessor reasoned illogically or irrationally.
3. In IAG Ltd t/as NRMA Insurance v Sleiman (2017) 82 MVR 1; [2017] NSWSC 1346 ("Sleiman"), the Court held that where a decision arose from an unexplained leap in the reasoning process, where its internally inconsistent reasoning lacked an evident and intelligible justification, that decision should be set aside for legal unreasonableness. In Sleiman, Fagan J stated at [28]-[29]: [28] Substantially for the reasons given at [20]-[22], the assessor's attribution to the first defendant of a likely future rate of earnings, but for the accident, of $1,000 per week is strikingly and demonstrably unreasonable. It is inconsistent, internally, with the evidence recorded by the assessor and which she states she has relied upon. Notably, the four and a half years past earnings disclosed in the first defendant's tax returns. It is inconsistent with the assessor's stated assumption and reasoning that the first defendant's pattern of employment would have continued as before. [29] On a reading of the whole of the reasons it is evident that the unexplained leap to a future earning capacity of nearly double the first defendant's demonstrated capacity over the years for which figures were available would deliver to him not compensation for lost capacity but a very considerable windfall. The resulting calculated figure of $497,503.98 for future economic loss in the assessment lacks 'evident and intelligible justification' and the certificate must, on this additional ground, be set aside."
4. The insurer submitted that as a result of the deficiency in the medical assessor's reasons and/or its legal unreasonableness, the decision should be set aside.

The first defendant's submissions

1. The first defendant submitted that there is no inconsistency of the kind submitted by the insurer. The passage specified outlines the medical assessor's path of reasoning, in which he addressed the causation dispute at hand and provided his explanation for his conclusion. The evidence of Dr Molnar was not unexplained, but had been set out earlier in the medical assessor's statement of reasons. As such, the medical assessor's decision was not unreasonableness.

Consideration

1. This is not a case, as in Sleiman above, where a calculation of earning capacity was inexplicably doubled from estimates in evidence. As outlined in detail in relations to grounds 2(a)-(e), in making his determination, the medical assessor considered the material before him, including the insurer's submissions, and was ultimately swayed by the evidence of the first defendant and Dr Molar.
2. In his report of 16 February 2017, Dr Molar agreed with other medical experts that it was "likely" that the first defendant suffered from a congenital condition to her left hip. However, Dr Molar determined that her labral tears could have been caused by the "unpredictable forces" of a motor vehicle collision. In light of the first defendant's insistence that her symptomology to the left hip began with the subject accident, Dr Molar determined that the collision was its ultimate cause. He was not troubled by the absence of documentary evidence of the injury at the date of the subject accident, as he noted studies which demonstrate that such pathologies are difficult to diagnose. It was open to the medical assessor, in the exercise of his discretion, to agree with that opinion.
3. It is my view that the medical assessor's acknowledgement on p 15 that he had been initially compelled by the contrary evidence before being swayed to reach his conclusion does not render his decision "internally inconsistent" in the sense described in Sleiman. Neither do his reasons "lack an evident and intelligible justification" as stated in Li. His reasons are not vitiated by legal unreasonableness. This ground of review fails.

Result

1. The result is that the application for judicial review fails. The summons filed 7 March 2019 is dismissed.

Costs

1. Costs are discretionary. Costs follow the event. The plaintiff is to pay the defendant's costs on an ordinary basis.

The Court orders that: (1) Leave is granted to extend the time for commencing proceedings up to and including 7 March 2019. (2) The plaintiff's summons filed 7 March 2019 is dismissed. (3) The plaintiff is to pay the first defendants' costs on an ordinary basis.

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: 04 December 2019