Kinchela v Insurance Australia Group Ltd t/as NRMA Insurance

INTRODUCTION

1. The plaintiff was involved in a motor vehicle accident on 20 December 2018. The plaintiff's vehicle was stationary on Glenfield Road, Glenfield when it was rear-ended by another vehicle.
2. The plaintiff alleged, that in the subject accident, he sustained injuries to his cervical and lumbar spine, and to his right 2nd toe injury which resulted in a right 2nd toe amputation.
3. The plaintiff made an Application for Personal Injury Benefits to the Compulsory Third Party insurer.
4. The insurer disputed that the plaintiff sustained a non-minor injury to either his neck or his back on the basis that it asserted there was no evidence of a nerve injury, no evidence of a complete or partial rupture of tendons, ligaments, menisci or cartilage. The insurer asserted that there were no signs of radiculopathy, or evidence of spinal nerve root dysfunction.
5. The insurer also disputed that the right 2nd toe amputation was causally related to the subject accident, because, in its view, there was no indication in the ambulance report that the plaintiff sustained injury to the 2nd right toe in the subject accident.
6. An internal review was requested on 13 June 2019 by the plaintiff relating to the minor injury decision and the decision on causation in respect of the 2nd right toe amputation. On 25 July 2019, the insurer confirmed its decision that the injuries to the cervical and lumbar spines were minor in accordance with the Motor Accident Injuries Act 2017 (NSW) ("the MAI Act"). The insurer also confirmed its decision in respect of the 2nd right toe injury and amputation.
7. As a result of the decision by the insurer that the plaintiff had only sustained a minor injury, the plaintiff's entitlement to statutory benefits ceased 26 weeks from the date of the accident. He was, however, still eligible for treatment and care beyond the 26 weeks, in certain circumstances.
8. On 23 August 2019, the plaintiff lodged an application to the SIRA Dispute Resolution Service ("the DRS"), disputing the insurer's decision that the plaintiff had only suffered minor injuries to his cervical and lumbar spines, as well as in respect of the causation issue regarding the 2nd right toe amputation.
9. The dispute was referred to Assessor M Gibson who issued a certificate on 27 November 2019. The plaintiff lodged an Application for Review, and on 26 February 2020, the DRS Proper Officer accepted that there was a reasonable cause to suspect that the certificate of Assessor Gibson was incorrect in a material respect. The medical assessment conducted by Assessor Gibson was referred to the second defendant (per the amended summons) for determination under s 7.26 of the MAI Act.
10. On 28 August 2020, the second defendant, which comprised of Medical Assessor Sophia Lahz, Medical Assessor Thomas Rosenthal and Medical Assessor Paul Myers, issued a certificate determining first, that the plaintiff's claimed injury to his cervical and lumbar spines were soft tissue injuries which were minor injuries for the purposes of the legislation, and second, that the right 2nd toe amputation was not caused by the subject accident.
11. As noted at the outset of this judgment, the plaintiff proceeds on the amended summons for judicial review of the SOR.
12. Each of the defendants filed submitting appearances, save as to costs.

GROUNDS FOR JUDICIAL REVIEW

1. The plaintiff contended that the decision and the SOR of the second defendant contained error of law on the face of the record and jurisdictional error as follows (adopting the numbering style as appears in the amended summons): 1. The second defendant fell into jurisdictional error, in that it denied the plaintiff procedural fairness by failing to give the plaintiff notice of its intention to rely on the following publications to draw an adverse conclusion about the plaintiff's case: 1. Carragee E et al: Does minor trauma cause serious low back illness?, Spine Volume 31 No. 25 pp 2942-2949; 2. Coroneos Michael - Incidence, Evaluation and Classification of Lumbar Spine MR Abnormalities in asymptomatic individuals (Home Page); 3. Ernst C et al: Prevalence of annular tears and disc herniations on MRI images of the cervical spine in symptom free volunteers, European Journal of Radiology, September 2005, 55 409-414; and 4. Stadnik T W et al (published online); Jan 1, 1998 - https://doi.org/10.1148/radiology.206.1.9423651. 1. The second defendant fell into jurisdictional error, in that it denied the plaintiff procedural fairness by failing to afford to the plaintiff an opportunity to address, and deal with, the evidence set out in the articles referred to in sub-paragraph (a) above; and 2. The second defendant fell into jurisdictional error or erred in law on the face of the record by failing to apply the correct principles of causation in respect of the plaintiff's injury to the right second toe; and 3. The second defendant fell into jurisdictional error or erred in law on the face of the record in finding that the absence of a contemporaneous complaint or report of injury in respect of the right second toe was determinative of the issue of causation.

RELIEF SOUGHT

1. The relief sought is set out below: 1. A declaration pursuant to s 69 of the Supreme Court Act 1970 (NSW) that the decision and the SOR of the second defendant dated 28 August 2020 is vitiated by jurisdictional error and is void and of no effect. 2. An order in the nature of certiorari quashing the decision and the SOR of the second defendant, or alternatively, a declaration setting aside or declaring invalid the decision of the second defendant. 3. Such further order as this Court deems necessary to give effect to the plaintiff's claims in the nature of judicial review. 4. The first defendant to pay the plaintiff's cost of the proceedings.
2. In a communication to the Court, prior to the hearing of the matter, the plaintiff confirmed that it no longer pressed prayer 4 for relief.

Grounds (a) and (b): Denial of procedural fairness - error of law on the face of the record

1. The second defendant made findings that the injuries to the cervical and the lumbar spines were soft tissue injuries only and that they were minor within the meaning of s 1.6 of the MAI Act.
2. The second defendant noted the January 2019 MRI scan finding of a disc bulge in the cervical spine following the subject motor vehicle accident, which had been described by Dr Darwish, the plaintiff's treating neurosurgeon. The second defendant stated that there was "strong epidemiological evidence as to the frequency of findings in persons the plaintiff's age" and that the "research evidence" is referred to in its SOR: SOR at 10.
3. The second defendant made different findings as to the "minor injury" stated in the certificate issued by Assessor Gibson. The second defendant, in that respect, found that there had been a lower back injury in the subject accident given that there had been contemporaneous reference to lumbar spine tenderness in the hospital records immediately following the subject accident, and the physiotherapy notes also referred to the low back. The plaintiff was referred for an MRI scan of the lumbar spine in March 2019, which was undertaken in May 2019. The MRI scan demonstrated an L4-5 annular tear and disc protrusion, L3-4 left lateral disc protrusion and left greater than right L5 nerve root impingement. The second defendant stated that the plaintiff's assertion of tenderness at L3-4 at the time of the accident "did not automatically indicate that there had been an annular tear from trauma": SOR at 10-11. The second defendant said further that "spinal tenderness is not an objective finding" and that further "epidemiological evidence is presented below" to "support the contention that radiological findings such as annular tears and disc bulges are common degenerative findings in asymptomatic persons, rather than due to injury": SOR at 11.
4. The second defendant referred extensively to, and relied on, that "epidemiological evidence" to find that radiological findings such as annular tears and disc bulges "cannot be relied on to conclude that an injury has occurred", because the "latter findings are very common, typically degenerative and constitutional in the asymptomatic population, as evidenced by the research cited": SOR at 19. It relied on the epidemiological studies to support "an alternative hypothesis that disc and spinal degeneration begin early in life, primarily on the basis of nutritional, developmental, and genetic factors … and that later minor traumatic or repetitive occupational events play a minor role, if any, in eventual structural changes and serious disability": SOR at 20.
5. The second defendant relied on a study carried out by Stadnik T W, et al, "Annular tears and disk herniation: prevalence and contrast enhancement on MR images in the absence of low back pain or sciatica" (1998) 206(1) Radiology (published online: 1 January 1998), which found that 56% of the subjects had annular tears, 33% had disc protrusions, 81% harboured disc bulges, 72% demonstrated mild to moderate disc degeneration and 55% demonstrated severe disc degeneration. The second defendant stated that "all of the cohort were asymptomatic of either back pain or else sciatica": SOR at 19 and 22.
6. The second defendant also considered pertinent to its deliberations and assessment a study conducted by Carragee E, et al, "Does minor trauma cause serious low back illness?" 31(5) Spine 2942-2949 ("the Carragee study") in which it was concluded that "findings on MR imaging within 12 weeks of new and serious low back pain development are highly unlikely to represent any new structural change and that most new changes on imaging represent progressive age-related changes, and are not associated with acute events": SOR at 19. The second defendant also referred to the Carragee study's findings that new MRI examinations were much more often done on patients involved in compensation claims. The second defendant referred to one study, in which "75% of subjects with a compensation claim underwent an MRI scan compared with 12% of patients with serious back pain episodes not involving a claim": SOR at 19, and that "no patient with a compensation claim had a clear new finding of significant pathology". Further statistics were also referred to, and notably, the second defendant set out the Carragee study finding that if the MRI study is the only imaging available then it is "easy to see how a clinician may suppose that these findings developed, de novo, with a first serous low back pain episode": SOR at 20.
7. The second defendant also referred to a Michael Coroneous article, as well as other studies, to further support the "alternative hypothesis" that there is a "high incidence of lumbar MRI changes in totally asymptomatic volunteers": SOR at 20-21.
8. The epidemiological material was determinative of the issue of whether the cervical and lumbar spines were minor injuries for the purposes of the legislation, and was used by the second defendant adversely to the plaintiff without giving him notice of it: Pascoe v Mechita Pty Ltd [2019] NSWSC 454 at [73]-[78] (per Button J). The epidemiological material referred to extensively by the second defendant informed its conclusion that the cervical and lumbar spine injuries were minor injuries.
9. None of this material was provided to the plaintiff for comment/submissions, or for the plaintiff to send to his medical experts for consideration and comment. The plaintiff was not given notice of the material itself, or how it was to be used by the second defendant. The material was not within the common knowledge of the plaintiff and was not straightforward: Briggs v IAG Limited t/as NRMA Insurance [2020] NSWSC 1318 ("Briggs") at [58] (per Harrison AsJ).
10. As a result, the plaintiff has suffered a practical injustice, because he had not been given a fair opportunity to be heard about this material. Had the plaintiff been advised that the second defendant intended to rely on the epidemiological material, the plaintiff could have consulted his medico-legal experts for an opinion as to its probative value and could have made submissions in relation to the findings set out in the material. This has been denied to the plaintiff.
11. The second defendant had an obligation to provide the plaintiff with notice to confront the adverse material, and an obligation to provide an opportunity to respond before taking into account the material: Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594; [2011] HCA 1 at [9] (per French CJ and Kiefel J); Commissioner for ACT Revenue v Alphaone (1994) 49 FCR 576; [1994] FCA 293. The second defendant therefore denied the plaintiff procedural fairness and the decision ought to be set aside for jurisdictional error.

Grounds (c) and (d): Failure to apply the correct principles of causation in respect of the injury to 2nd right toe

1. The second defendant found that "the subject accident was not a cause more than negligible of the ensuing right 2nd toe amputation": SOR at 18. The plaintiff's evidence was that his right foot was on the brake at the time of the accident and that he was jolted at the time of the impact. As a result of the jolting his right foot smashed into the bar holding the brake pedal. The second defendant did not accept that the accident was of a type that would have caused such entanglement and that the plaintiff was not a reliable historian because his "memories were incomplete".
2. The plaintiff submitted that the second defendant's reasoning and dismissal of the plaintiff's evidence as being unreliable was, in truth, based on the second defendant's view that the lack of any contemporaneous evidence in either the hospital or ambulance records of any injury to the right 2nd toe or the right foot, or of any nail dislodgment was determinative of the issue of causation. This statement is repeated many times in the SOR, so that it is readily apparent that the second defendant based its decision on causation on the lack of any contemporaneous record of an injury to right 2nd toe or right foot.
3. The second defendant's task was not to answer the question of whether there was any contemporaneous evidence, or corroborative evidence, to support an injury to the right 2nd toe, but whether the accident contributed to the right 2nd toe infection, avulsion of the nail and ultimate right 2nd toe amputation. By focussing only on whether there was a contemporaneous record of complaint in the clinical notes or the ambulance notes, the actual question it was required to consider was overlooked - did the motor vehicle accident materially contribute to the right 2nd toe amputation?
4. The second defendant fell, therefore, into the type of error identified in Owen v Motor Accidents Authority of NSW (2012) 61 MVR 245; [2012] NSWSC 650 at [51]-[52]; Bugat v Fox (2014) 67 MVR 150; [2014] NSWSC 888 ("Bugat"); AAI Ltd t/as GIO v McGiffen (2016) 77 MVR 348; [2016] NSWCA 229 ("McGiffen"). The error identified is in treating the absence of a contemporaneous complaint or report of injury as determinative of the issue of causation. Associate Justice Harrison cited the decision in Bugat with approval in Briggs. Her Honour said at [64]-[65]: [64] In Bugat, RS Hulme AJ held that the lack of contemporaneous evidence cannot be determinative of causation. His Honour stated at [31]-[32]: "[31] One of the pivotal questions for the panel was whether the injuries of which the plaintiff complained had been caused (or materially contributed to) by the motor accident she alleged To that question the presence or absence of contemporaneous evidence of injury was relevant but not determinative in circumstances where there was other evidence, in particular the plaintiff's claim form made but 15 days later, the remarks of Dr Hor in his report of 13 July 2011, and the plaintiff's statements which the certificate discloses were made to the panel to the effect that at the time of the accident she suffered 'pain in her neck going out to both shoulders'. [32] While I accept that, as an administrative decision-maker, the panel's reasons should not be subjected to 'minute and detailed textual criticism in the hope of finding something on which to base an argument' [Allianz Australia Insurance Ltd v Motor Accidents Authority (NSW) (2006) 47 MVR 46, [2006] NSWSC 1096 at [36]] in expressing themselves the way they have, the panel have clearly shown that they have regarded what they perceived as the absence of contemporaneous evidence as determinative on the issue of causation. In doing so they erred, the error being one apparent on the face of the record." [65] In McGiffen, the Court of Appeal held at [64] - [65]: [64] The question that the review panel was required to address was not simply whether there was any contemporaneous evidence of complaint about an injury to the lumbar thoracic spine. It included whether Mr McGiffen's lumbar thoracic spinal injury was causally related to the 'gait derangement', itself caused by the accident. That is, was the accident a contributing cause of a lumbar thoracic spinal injury by reason of the gait derangement caused by the accident. [65] In deciding causation solely on the basis of the existence or otherwise of contemporaneous evidence of complaint of injury to the thoracic spine the review panel only partially addressed the question posed by s 58(1)(d). For that reason, the decision recorded in the panel's certificate must be treated as a purported and not real exercise of its statutory function under s 58(1)(d), leaving that function unexercised, and the Authority and the panel liable to the relief granted by the primary judge for jurisdictional error."
5. The second defendant failed to apply the correct test of causation as set out in the relevant Guidelines informed by s 5D of the Civil Liability Act 2002 (NSW) and the common law. As result, the second defendant failed to apply the appropriate legal test in order to discharge its jurisdictional function.
6. This amounts to jurisdictional error and the medical assessment and certificate of the second defendant ought to be set aside.

CONCLUSION

1. In the circumstances, the plaintiff should have orders in the nature of the first and second prayers for relief in the amended summons. The matter should be remitted to the President of the Personal Injury Commission of New South Wales. The plaintiff sought no order for costs as the defendants entered submitting appearances.

ORDERS

1. The Court orders: 1. The summons filed on 28 November 2020 is amended in accordance with the amended summons filed on 30 June 2021 removing the SIRA Review Panel as the second defendant, and replacing it with the President of the Personal Injury Commission of New South Wales. 2. The certificate, the decision and statement of reasons for decision of the second defendant dated 28 August 2020 are vitiated by jurisdictional error and is declared void and of no effect. 3. The certificate, the decision and the statement of reasons for the decision of the second defendant dated 28 August 2020 are set aside. 4. The matter is remitted to the second defendant to be determined according to law. 5. No order as to 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: 01 July 2021