Murdoch v Davis

Motor Accidents Compensation Act 1999 Motor Accidents Act 1988 LEGISLATION CITED: Motor Accident Compensation Amendment (Medical Assessments) Act 2000 Suitors' Fund Act 1951

Gerald Murdoch - Appellant PARTIES: Bradley Robert Davis - Respondent

Ms S Norton SC with Ms M M Fraser - Appellant COUNSEL: S G Campbell SC with I D Cullen - Respondent

Bryden's Law Office, Liverpool - Appellant SOLICITORS: Vandervords - Respondent

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40232/05 DC 3698/03

SANTOW JA McCOLL JA BROWNIE AJA

Monday 19 December 2005 MURDOCH v DAVIS Judgment 1 SANTOW JA: I agree with Brownie AJA. 2 McCOLL JA: I agree with Brownie AJA. 3 BROWNIE AJA: The claimant was injured in a motor accident that occurred on 14 June 2000. Having taken the necessary preliminary steps, he sued the appellant, claiming damages for negligence. At trial the claimant tendered a certificate dated 25 July 2003, given under s 61 of the Motor Accidents Compensation Act 1999 (the Act). That certificate was to the effect that the various impairments suffered by the claimant as a result of the injury sustained in the motor accident was greater than ten percent of what is apparently often described as a "whole person assessment" or "whole person impairment". Without such a certificate the claimant would not have been able to recover damages for non-economic loss: s 131 of the Act. 4 When the certificate was tendered, at the commencement of the trial, it was said that the opponent had not seen the certificate previously. Counsel for the opponent took no objection to the tender, but foreshadowed an application under s 132(2) of the Act for an adjournment of the trial later on, to enable the opponent to apply for a further assessment, under s 62 of the Act. The trial proceeded, and after the close of evidence, the opponent made that application, but without calling upon the claimant, the learned trial Judge, Bishop DCJ, rejected the application. 5 During the course of the trial, it emerged that the opponent had arranged to keep the claimant under surveillance, in about August 2002, and in due course the opponent tendered a video recording showing certain activities of the claimant. There was a good deal of cross-examination of the claimant, and the medical evidence included a significant volume of medical reports, disclosing sharp disagreements between the various witnesses as to the true level of the claimant's medical state. The opponent had shown the video recording to Professor Jones, one of his medical witnesses, but had not shown it to any of the other witnesses, nor had it been seen by the medical practitioners whose views informed the s 61(1) certificate mentioned above. 6 In the course of his reasons for judgment, his Honour summarised the evidence and continued: "48. I am of the view that the plaintiff has made out a case for some organic consequences of the accident for the period up to the time of the video. The evidence does not indicate that the plaintiff has discharged his onus of proof of any ongoing consequences of the motor vehicle accident thereafter. The evidence as to any damage as a result of the accident with regard to either vision or hearing is unsatisfactory but there is a reasonable inference that a tooth was cracked in the accident.

49. With regard to the extent of damages to which the plaintiff is entitled, it seems to me that there is a valid claim on the plaintiff's behalf for non-economic loss. Exhibit A indicates a certification of organic permanent impairment of the plaintiff as a result of the motor accident of eleven percent. Thus the threshold is passed and the matter is not adversely affected by the psychological involvement indicated in the medical material (See Longhurst & Anor v Hunt (2004) NSWCA 91). Taking into account the findings set out earlier about what was essentially a fairly protracted whiplash-type injury, I consider that the appropriate figure for non-economic loss is $35,000. In coming to this view I am influenced by the fact that there was a degree of improvement in the plaintiff's condition shortly after his arrival in Darwin. This is indicated in the assessment of past economic loss to which I will now turn.

50. There was considerable discussion by counsel as to the appropriate measure for economic loss. This related to extracts from the various income tax returns that were put into evidence. I think for the initial period the submissions of counsel for the plaintiff should be accepted and a net wage loss of $480 per week should be found. This would apply from 19 June 2000 (see section 124) to 31 December 2000 (twenty-seven weeks). The evidence at the close of the year 2000 indicates that the plaintiff and his wife were very actively engaged in their building problems with regard to the duplexes. Concurrently with this the objective physical evidence of the plaintiff's complaints tends to dissipate more toward the psychological aspects. In my view the economic loss from 1 January 2001 to 22 August 2002 should be found at $200 net per week (85 weeks). Loss of past superannuation would then come to $2397.

51. I am not prepared on the evidence to make any allowance for future economic loss after the date of the video." 7 On the claimant's application for leave to appeal, attention came to be focused on [48]. In my view, it is clear that whilst his Honour accepted that the effect of the s 61 certificate (Exhibit A) was that the degree of impairment of the claimant was greater than ten percent as at 25 July 2003, so as to lead to the conclusion that the claimant was entitled to damages for non-economic loss, and to the assessment of those damages at $35,000, his Honour also concluded that the claimant had "made out a case for some organic consequences of the accident for the period up to" August 2002, but he had not proved "any ongoing consequences" after that time; and at [51] his Honour declined to award damages for economic loss for the period after August 2002. 8 I consider that this inconsistency means that, prima facie, an appeal should be successful. The implicit finding of a greater than ten percent permanent incapacity as at July 2003 cannot stand together with a finding that there was no impairment proved, in respect of the period from August 2002 onwards. 9 The opponent sought to escape from this conclusion by reference to some submissions concerning the proper construction of the Act, and by seeking leave to rely upon the conduct of the claimant at trial, so as to lead to the view that this Court ought not to interfere with the result obtained. 10 Part 3.4 of the Act contains these provisions: " 58 Application (1) This Part applies to a disagreement between a claimant and an insurer about any of the following matters: (a) whether the treatment provided or to be provided to the injured person was or is reasonable and necessary in the circumstances, (b) whether any such treatment relates to the injury caused by the motor accident, (c) whether an injury has stabilised, (d) the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident, (e) the degree of impairment of the earning capacity of the injured person as a result of the injury caused by the motor accident.

(2) This Part also applies to any issue arising about such a matter in proceedings before a court or in connection with the assessment of a claim by a claims assessor.

59 Appointment of medical assessors (1) The Authority is required to appoint medical practitioners and other suitably qualified persons to be medical assessors for the purposes of this Part.

(2) The terms of any such appointment may restrict a medical assessor to disputes of a specified kind.

(3) The Authority is to ensure that, as far as reasonably practicable, there are medical assessors appointed in the regional areas of the State.

60 Medical assessment procedures (1) A medical dispute may be referred for assessment under this Part by either party to the dispute or by a court or claims assessor.

(2) If the insurer disputes all liability under a claim the dispute cannot be referred for assessment under this Part by the claimant alone.

(3) The request for a referral is to be made to the officer of the Authority designated by the Authority for the purpose (in this Part referred to as the proper officer of the Authority ).

(4) The proper officer of the Authority is to arrange for any such request that is duly made to be referred to one or more medical assessors.

61 Status of medical assessments (1) The medical assessor or assessors to whom a medical dispute is referred is or are to give a certificate as to the matters referred for assessment.

(2) Any such certificate as to: (a) whether the degree of permanent impairment of the injured person is greater than 10%, or (b) whether any treatment already provided to the injured person was reasonable and necessary in the circumstances, or (c) whether an injury has stabilised, is conclusive evidence as to the matters certified in any court proceedings or in any assessment by a claims assessor in respect of the claim concerned.

(3) Any such certificate as to any other matter is evidence (but not conclusive evidence) as to the matters certified in any court proceedings or in any assessment by a claims assessor in respect of the claim concerned.

(4) In any court proceedings, the court may (despite anything to the contrary in this section) reject a certificate as to all or any of the matters certified in it, on the grounds of denial of procedural fairness to a party to the proceedings in connection with the issue of the certificate, but only if the court is satisfied that admission of the certificate as to the matter or matters concerned would cause substantial injustice to that party.

(5) If a certificate as to any matter is rejected under subsection (4), the court is to refer that matter again for assessment under this Part and adjourn the proceedings until a further certificate is given and admitted in evidence in the proceedings.

(6) However, if a certificate as to whether or not the degree of permanent impairment of the injured person is greater than 10% is rejected under subsection (4), the court may, if it considers it appropriate, substitute a determination of the court as to the degree of permanent impairment of the injured person (assessed by the court in accordance with section 133) instead of referring that matter again for assessment under this Part.

(7) Except as provided by subsection (6), a court may not substitute its own determination as to any matter referred to in subsection (2) (a), (b) or (c).

(8) This section: (a) does not prevent a court from referring a matter again for assessment under this Part (as provided for by section 62), and (b) does not require a court to refer a matter again for assessment under this Part if the matter is not a matter referred to in subsection (2) (a), (b) or (c).

(9) A certificate is to set out the reasons for any finding by the medical assessor or assessors as to any matter certified in the certificate in respect of which the certificate is conclusive evidence.

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

(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.

63 Review of medical assessment by review panel (1) A party to a medical dispute may apply to the proper officer of the Authority to refer a medical assessment under this Part by a single medical assessor to a review panel of medical assessors for review. (2) An application for the referral of a medical assessment to a review panel may only be made on the grounds that the assessment was incorrect in a material respect.

(3) The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least 3 medical assessors, but only if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application.

(4) The review panel may confirm the certificate of assessment of the single medical assessor, or revoke that certificate and issue a new certificate as to the matters concerned.

(5) Section 61 applies to any such new certificate." 11 Part 5.3 of the Act contains these provisions:

"Impairment thresholds for award of damages for non-economic loss 131 . No damages may be awarded for non-economic loss unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%. Assessment of impairment required before award of damages for non-economic loss if dispute over impairment threshold 132. (1) If there is a dispute about whether the degree of permanent impairment of an injured person is sufficient for an award of damages for non-economic loss, the court may not award any such damages unless the degree of permanent impairment has been assessed by a medical assessor under Part 3.4 (Medical assessment). (2) The court may, at any stage in proceedings for an award of damages for non-economic loss, refer the matter for assessment of the degree of permanent impairment under Part 3.4. (3) A medical assessor may decline to make an assessment under Part 3.4 of the degree of permanent impairment of an injured person until the assessor is satisfied that the injury has stabilised. Court proceedings with respect to any such matter may be adjourned until the assessment is made. (4) Nothing in this section prevents: (a) the degree of impairment being re-assessed under Part 3.4; or (b) a claim from being settled at any time.

Method of assessing degree of impairment 133. (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 the Part. (2) The assessment of the degree of permanent impairment is to be made in accordance with: (a) MAA 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. (3) In assessing the degree of permanent impairment under subsection (2)(b), regard must not be had to any psychiatric or psychological injury, impairment or symptoms, unless the assessment of the degree of permanent impairment is made solely with respect to the result of a psychiatric or psychological injury. Maximum of amount of damages for non-economic loss 134. (1) The maximum amount that a court may award for non-economic loss is $284,000. (2) . If that amount if adjusted by the operation of section 146 (Indexation of amounts relating to award of damages), the applicable maximum amount is the amount as at the date the award is made." 12 In my judgment, the terms of s 61 are unambiguous. Subsection (2) has the effect that a certificate under subs (1) is conclusive evidence of the matters mentioned in subs (2)(a)(b) and (c); subs (4) has the effect that a court may reject a certificate on the grounds mentioned, but in that event the court must adjourn the proceedings until a further certificate has been obtained, and admitted into evidence, unless the ruling mentioned in subs (6) is given: see subs (7). That did not occur in this case. 13 However, if the view is taken that s 61 is ambiguous, any ambiguity is dispelled by reference to the legislative history. 14 The Act provided for a scheme, replacing an earlier scheme established under the Motor Accidents Act 1988. The Explanatory Memorandum to the Act referred to some of the features of the previous scheme that have been retained, and to the principal changes effected by the Act. Those changes included: "(d) The establishment of a system of independent medical assessment to resolve disputes about treatment, rehabilitation and other related medical matters. (h) The modification of the principles applicable to the award of damages, in particular: (i) changing the current threshold tests that apply before a person is entitled to damages for non-economic loss (e.g. pain and suffering) to at least 10% permanent impairment on a "whole of person" medical assessment, and (ii) excluding compensation for economic loss for the first 5 days of loss of earnings and providing a cap on the weekly amount of loss of earnings similar to that applying to damages for work-related injuries." 15 The Explanatory Memorandum also included the following passages: "Part 3.1 Preliminary

This Part deals with certain preliminary matters for the operation of Chapter 3. These matters include the definitions of certain words for the purposes of that Chapter, the injuries to which the Chapter applies and the issuing of Medical Guidelines by the Motor Accidents Council as part of the Council's oversight of medical assessment. The Medical Guidelines may approve appropriate treatment for injuries, appropriate rehabilitation procedures and set out procedures for the assessment of permanent impairment and the assessment of medical and related disputes. Part 3.4 Medical assessment

This Part provides for the new arrangements outlined above for independent medical assessment in the case of disputes between a claimant and an insurer about certain matters related to medical or related treatment for a motor accident injury and the degree of permanent impairment a person has suffered from such an injury. The Part provides for the appointment of medical assessors, assessment procedures, costs of assessments and the review of such assessments by a review panel." 16 In the Bill then before the Parliament, s 61(1) to (4) were in the form set out above, but the Bill then included the following sub clauses of clause 61: "61 Status of medical assessment …

(5) If any such certificate is rejected, the court is to refer the matter again for assessment under this Part and adjourn the proceedings until a further certificate is given and admitted in evidence in the proceedings.

(6) If in any proceedings in respect of a claim under this section, the court may (despite anything to the contrary in this section) reject a certificate as to the degree of permanent impairment of the injured person and refer the matter again for assessment under this Part or substitute a determination of the court as to the degree of permanent impairment of the injured person.

(7) A certificate is to set out the reasons for any finding by the medical assessor or assessors as to a matter referred to in subsection (2) that is certified in the certificate." 17 In his Second Reading Speech, the Minister said: "Part 3.4 provides an accessible means of getting early, quick and independent decisions on treatment, rehabilitation and care outside of the court system. All disputes over the treatment, rehabilitation and care an injured person requires, the degree of permanent impairment an injured person has or whether an injury has stabilised will be referred to the MAA, which will refer the disputes to a relevant medical expert from a list maintained by the MAA. Further medical assessments will be allowed if a person's condition deteriorates, and there is provision for review of an assessment by three medical experts. Medical assessment decisions on the treatment, rehabilitation and care of injured persons pending the finalisation of their claim, and decisions on degree of permanent impairment and whether an injury has stabilised, are binding. These reforms permit early, quick, objective decisions on medical issues to be made outside of the court system. The majority of motor accident matters do not involve difficult legal issues and are essentially a determination of an amount of compensation. While very few matters end up being decided in a court, over half of all motor accident claims involve claimants commencing court proceedings. Claims are prepared on an adversarial basis with attendant high level of legal costs. …. The main change to damages is to introduce an objective assessment of impairment as a gateway for non-economic loss. Non-economic loss is essentially compensation for pain and suffering and loss of enjoyment of life and is additional to compensation for actual monetary loss or costs. Non-economic loss represents a significant component of total compensation payments. The Motor Accidents Act 1988 currently has a number of gateways to obtaining non-economic loss damages but these have been eroded over time. Under the provisions of the bill no damages will be paid for non-economic loss unless the person is assessed as having more than 10 per cent permanent impairment. An objective method for determining the degree of permanent impairment will be used, such as the American Medical Association's Guides to Permanent Impairment. These guidelines are currently used under the Victorian scheme, although I would point out that under the more severe benefit restrictions which apply in Victoria access to common law damages for pain and suffering requires that the person be 30 per cent or more impaired. Disputes over whether the 10 per cent permanent impairment gateway is reached will be resolved using the medical assessment process outlined in part 3.4. …." 18 Later, before the commencement of s 61(6) of the Act, the Act was amended, by the Motor Accident Compensation Amendment (Medical Assessments) Act 2000. The Explanatory Memorandum to this Act said: "Overview of Bill The object of this Bill is to amend the Motor Accidents Compensation Act 1999 so as to make it clear that a court does not have an unfettered power to reject a certificate given by a medical assessor under the Act as to whether the degree of permanent impairment of an injured person is greater than 10% and substitute its own determination as to the degree of permanent impairment of the injured person. A court will be able to substitute its own determination only if there has been a denial of procedural fairness in the issue of the certificate and the court is satisfied that admission of the certificate as to that matter would cause a substantial injustice to a party to the proceedings. At present, the Motor Accidents Compensation Act 1999 provides that certain disputes between a claimant and an insurer in respect of a motor accident claim may be referred to a medical assessor for assessment. The medical assessor is to give a certificate as to the matters referred for assessment. Such a certificate is conclusive evidence in any court proceedings as to certain matters, including any assessment by the medical assessor as to whether the degree of permanent impairment of the injured person is greater than 10%. No damages may be awarded for non-economic loss unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%. Section 61 (4) of the Act provides that a court may reject the certificate on the grounds of a denial of procedural fairness to a party to the proceedings in connection with the issue of the certificate, but only is the court is satisfied that the admission of the certificate would cause substantial injustice to that party. In such a case, the court must adjourn the proceedings and refer the matter again for assessment under Part 3.4 of the Act. Section 61 (6) of the Act, which is uncommenced, further provides that a court may reject a certificate as to the degree of permanent impairment of an injured person and either refer the matter again for assessment under Part 3.4 of the Act or substitute a determination of the court as to the degree of permanent impairment of the injured person. This Bill clarifies the powers of a court with respect to certificates given by medical assessors. The amendments set out in the Bill provide that: (a) a court may reject a certificate as to all or any of the matters that are certified in the certificate, but only on the grounds of denial of procedural fairness to a party to the proceedings in connection with the issue of the certificate, and only if the court is satisfied that the admission of the certificate as to the matter concerned would cause substantial injustice to that party, and (b) if a certificate as to whether or not the degree of permanent impairment of an injured person is greater than 10% is rejected, the court may substitute its own determination as to that matter or refer the matter again for assessment by a medical assessor or assessors, and (c) if a certificate as to any other matter (such as a certificate as to whether the injury has stabilised) is rejected, the court must refer that matter again for assessment by a medical assessor or assessors, unless the matter is a matter in respect of which a certificate is not conclusive evidence, and (d) the circumstances set out in paragraph (b) are the only circumstances in which the court may substitute its own determination as to a matter in respect of which a certificate is conclusive evidence." 19 On the occasion of the Second Reading Speech concerning this Bill, the Minister referred to the course of the passage through the Parliament of the earlier Bill, that became the Act, and continued: "I remind honourable members that section 61 was a key component of the new scheme and entirely in keeping with the intent of removing the adversarial and litigious approach to medical decisions. In its place we have provided for decisions about treatment and impairment to be determined by way of independent medical assessment. This, of course, recognised that the system in which these decisions were made by judges following the presentation of medico-legal evidence was costly, time consuming and did not necessarily ensure that the decision was made on proper medical grounds. Litigation and the duelling doctor phenomenon was widely recognised as a drain upon the finite resources of the scheme, ultimately diminishing the funds available for return to injured people as compensation for the injuries they suffer. The reason for not commencing subsection (6) has been the subject of considerable discussion. The subsection was not proclaimed because it was capable of, and indeed was, being interpreted in such a way as to thwart the original intention of the Act and the amendment itself. For example, the Law Society's journal Caveat suggested the subsection as worded would allow the court an unfettered right to reject a medical certificate and to substitute the court's own assessment. Some members of the legal profession were clearly gearing up to utilise the subsection to sidestep the new medical assessment process. In a letter I wrote to the Hon. Helen Sham-Ho in September explaining to her the reasons for not commencing the subsection I said: 'I believe you made it very clear when moving the amendment that the ability of the court to substitute its own determination only arises where the court has set aside the assessment on grounds of procedural unfairness. However, the legal profession is advancing a different interpretation to the section. I am forwarding a copy of the recent edition of the Caveat produced by the Law Society of New South Wales, which claims that this amendment was sponsored by the Law Society's intervention, and which provides a different view. I have highlighted in the text the suggestion that the section gives an unfettered right to reject a medical certificate and substitute the court's own assessment.' I went on to say: 'While it is perhaps not surprising, it is disappointing that the immediate reaction of the Law Society to these reforms is to seek ways of avoiding the new arrangements and thereby continue to promote litigious solutions to claims.' You will appreciate that I am concerned not to allow this to occur and accordingly, I am proposing not to commence section 61 (6) with the other provisions. Instead, I will bring forward an amendment to the section to make it absolutely clear that the right of the court to make a substituted assessment is limited to circumstances where the original assessment is set aside on grounds of procedural unfairness. In the course of the discussion on the operation of section 61 (6) numerous advices as to the meaning of the subsection were provided by a variety of legal professionals. It appeared that the only consensus reached was that the court would have to be relied on for interpretation, as the meaning of the subsection was not immediately clear. This was confirmed by advice I received from the Crown Solicitor. I, therefore, took the view that it was inappropriate to commence a section of any Act which was open to such misinterpretation. The matter needed to be resolved in Parliament. Accordingly, Parliamentary Counsel was asked to redraft section 61 (6) to ensure that it was clear and unambiguous. In redrafting Parliamentary Counsel has found it necessary to slightly reword all of section 61 so as to integrate subsection (6). The meaning of the section has not been altered."

20 In this case, a certificate under s 61 was tendered, and admitted into evidence. Once that had been done, the certificate was conclusive evidence of the fact that the degree of permanent impairment of the claimant was greater than ten percent. On the face of the certificate, that referred to the degree of his permanent impairment as at the date of the certificate, 25 July 2003. If at trial it had seemed proper to do so, the matter might have been referred back for a fresh certificate, under the provisions of ss 62 and/or 132, but this did not happen, and if the case is to be retried now, it might be that one or more of the parties or the judge before whom the matter comes will consider it appropriate to seek a fresh certificate. It is understandable that, on the trial, where the claimant had travelled from Darwin to Sydney for the hearing, it was thought desirable to take his and other evidence; it is understandable that the opponent, not having seen the certificate in advance, had not asked the medical assessor or assessors to view the video recording; and it is understandable that the opponent might have wished to preserve a tactical forensic advantage by not disclosing the existence of the video recording until the claimant had come to give his evidence in chief; but the effect of s 61 cannot be denied. 21 I note in passing that the Medical Assessment Guidelines, made pursuant to s 44(1)(d) of the Act provides in Ch 9 for an insurer, In the position of the opponent's insurer here, to provide video surveillance film, together with the supporting surveillance report, in support of any application for a review of the s 61 certificate in question. 22 The opponent referred to course of the trial, submitting in effect that the claimant had stood by, when the trial judge declined to make the order sought by the opponent during final address, adjourning the hearing pending the obtaining of a further certificate under s 61. However, as the claimant submitted, until the Judge published his reasons for judgment, containing what I respectfully consider to be the error contained in [48] and [51], there was no occasion for the claimant to do or say anything, presently relevant. 23 The opponent submitted that, if the case was to be remitted for retrial, the retrial should be limited to the question of damages for non-economic loss. However, for the reasons mentioned above, it may be that the damages awarded for economic loss suffers from the same blemish as the damages awarded for non-economic loss - compare [48] and [51]. 24 I propose the following orders:

2. Allow appeal, and set aside the judgment and orders of the District Court.

4. Order the opponent to pay the costs of the claimant of the appeal, but grant to the opponent a certificate under the Suitors' Fund Act 1951, if otherwise qualified.

5. The costs of the first trial should be in the discretion of the judge conducting the retrial. **********

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