NRMA Insurance Ltd v Motor Accidents Authority of NSW

• 15 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30080/03 NRMA INSURANCE LIMITED v MOTOR ACCIDENTS AUTHORITY OF NSW

JUDGMENT 1 HIS HONOUR: The main issue in these proceedings is whether the Motor Accidents Authority of New South Wales (the Authority) has power to undertake a medical assessment and/or issue a Certificate pursuant to ss 60 and 61 of the Motor Accidents Compensation Act 1999 (the Act) in respect of a person who is deceased. A further issue (not referred to in the Summons) has also arisen as to whether the steps taken, or intended to be taken, by the Authority constitute a denial of procedural fairness. 2 On 1 April 2001, the late Michael Wayne Bennett (the deceased) was a passenger in a motor vehicle driven by James Evill when the vehicle was involved in a motor vehicle accident allegedly due to the negligence of the driver as a result of which the deceased allegedly suffered a number of injuries including a severe head injury, a dislocated left hip, facial fractures and a fracture of the cervical spine, resulting in severe brain damage, incontinence and severe pain and restriction of movement at the various fracture sites. 3 On 13 September 2002, the deceased applied to the Authority for an assessment of his permanent whole person impairment resulting from the accident and on 9 October 2002, the insurer (NRMA) lodged a reply to the application, denying the Authority's ability to make an assessment because of insufficient information regarding the deceased's pre-accident history and lack of information as to whether his injuries had stabilised. It also alleged that he had a long history of significant alcohol abuse and epilepsy. 4 Mr Bennett died on 22 November 2002 before any assessment was carried out. His solicitors notified the Authority and requested that the assessment proceed on the papers. 5 NRMA in letters dated 23 December 2002 and 8 January 2003, submitted that it was inappropriate to continue with the assessment in view of the death and also raised doubts as to whether the deceased's death resulted from the accident of 1 April 2001. Although this issue has not been resolved, it appears that there is prima facie evidence at least that his death was not a result of the accident as the death certificate states the cause of death as being epilepsy, which is noted in a number of medical reports as a pre-existing condition of the deceased. 6 By letter of 16 January 2003, the deceased's solicitors wrote to the Authority requesting that an assessment proceed on the papers although accepting that further information was necessary for that to occur including further information from the deceased's general practitioner and the obtaining of his medical history. Subsequent efforts both by the deceased's solicitors and by NRMA to obtain further information from the deceased's general practitioner have to date been unsuccessful but that position may change now that an administrator has been appointed who can give express authorisation to the doctor to make the information available. 7 Following further correspondence, the summons was filed on 25 June 2003 by NRMA naming the Authority as the only defendant. When the matter was before me for directions on 17 December 2003, I queried whether the Authority was the proper contradictor, and granted liberty to either party to seek the joinder of an appropriate representative of the estate of the deceased as a defendant. On 2 April, at the commencement of the hearing by consent I ordered that Trevor John Hudson, the Administrator of the estate of the deceased, be joined as a defendant in the proceedings, and he was represented at the hearing by counsel. In addition, a copy of the draft Statement of Claim intended to be filed by Mr Hudson on behalf of the deceased's estate became exhibit A in the proceedings. That draft Statement of Claim pleads a cause of action in negligence against the driver of the vehicle, alleges that the deceased died from causes unrelated to the subject motor vehicle accident and that the proceedings are brought pursuant to s 2 of the Law Reform (Miscellaneous Provisions) Act 1944 and the Motor Accidents Compensation Act 1999. 8 Court proceedings in respect of claims in respect of the death or injury to a person resulting from a motor vehicle accident are governed by Part 4.5 of the Act (ss 107 to 115), and before such proceedings are commenced, the claim must be assessed and a certificate issued to that effect under s 94 unless the Authority has granted a certificate under s 92 exempting the claim from assessment: s 108. This is an exempt claim, a certificate under s 92 having been issued on 27 March 2002. Chapter 5 (ss 122 to 146) relates to Awards of Damages and s 131 provides that no damages may be awarded for non-economic loss (i.e. pain and suffering, loss of amenities of life, loss of expectation of life and disfigurement: s 3) unless there is a permanent impairment of the whole person of not less than 10 percent, and if there is a dispute about the degree of such permanent impairment, 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 of the Act. 9 Part 3.4 (ss 57-65) relates to medical assessments. A medical dispute may be referred for assessment by either party to the dispute or by a court or by a claims assessor: s 60(1) and s 61 so far as material provides as follows: (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. 10 Section 44(1) provides for the issue by the Authority of guidelines with respect to various matters including "the assessment of the degree of permanent impairment of an injured person as a result of an injury caused by a motor accident" and pursuant to that section, the Authority has issued two relevant sets of guidelines namely the "Medical Guidelines - Medical Assessment Guidelines" and the "Medical Guidelines - Guidelines on the Assessment of Permanent Impairment of a person injured as a result of a motor vehicle accident". These guidelines are herein referred to as the "Medical Assessment Guidelines" and the "Permanent Impairment Guidelines". The Authority has also established a unit within its organisation known as the Medical Assessment Service (MAS) to deal with medical assessments. 11 The Medical Assessment Guidelines provide for a preliminary assessment (clause 7) to determine various matters, including whether further information or documentation is required, whether the matter is ready for assessment or whether the assessment should be declined or deferred, and to determine the way in which the assessment is to proceed. Specific provision is made in clause 7.3 for an officer to request further information or documentation but clause 7.4 provides that the officer may proceed in the absence of the requested further information. 12 Under clause 7.10 if the matter is found to be suitable for assessment, the officer is to determine the way in which the assessment is to proceed including requesting the claimant to attend for a medical or other examination or examinations (clause 7.10.1), or requesting a medical assessor to assess the disagreement on the material provided (clause 7.10.2). 13 Where the assessment is to proceed in accordance with clause 7.10.1 or 2, the Proper Officer is to refer the disagreement to one or more medical assessors from the Authority's list of medical assessors, having regard to the nature of the injury and any continuing disabilities, the nature of the dispute and the specialty of the assessor. Specific provision is made in clause 7.14 for an officer to arrange an assessment without a medical examination if satisfied that the information provided by the parties is sufficient to enable the assessor to make a determination of the issues the subject of the assessment. 14 Upon completion of the assessment, the assessor is to prepare a clear, accurate and complete report setting out the matters specified (clause 10) and give a certificate as to the matter it is referred for assessment specifying the matters indicated (clause 10.8). 15 The Permanent Impairment Guidelines are substantially based on the American Medical Association Guide to the Evaluation of Permanent Impairment amended in certain respects. Those guidelines includes clause 1.14 which provides that before an impairment is undertaken, it must be shown that the injury is stabilised and clause 1.15 which is as follows: The evaluation should only consider the impairment as it is at the time of the assessment. It should not include any allowance for a predicted deterioration, such as osteoarthritis in a joint many years after an intra-articular fracture, as it is impossible to be precise about any such later alteration. However, it may be appropriate to comment on this possibility in the impairment report. 16 The Law Reform (Miscellaneous Provisions) Act 1944 s 2 provides, subject to certain limited exceptions, for the survival of causes of action vested in a person at the time of his or her death for the benefit of his or her estate and sub-s 2(d) provides where the death of that person has been caused by the act or omission which gives rise to the cause of action, such damages shall not include any damages for the pain and suffering of that person. 17 It was submitted on behalf of NRMA that the Authority had no power to refer for assessment an application in respect of a person who has died prior to the time of the referral for a number of reasons, some based on the proper construction of the Act and others based on the application of the Guidelines. 18 In particular, attention was directed to the use of the word "is" in s 61(2)(a) and it was submitted that in any assessment it is the present degree of permanent impairment at the time of the assessment which is to be assessed and not that at some past date (such as immediately prior to the date of death). However, although the word "is" generally denotes present tense, this is not universally so. In Public Trustee v McKay [1969] NZLR 995, it was held that the Minister was authorised to make a decision whether a person "is or is not" a "hospital patient" under relevant legislation notwithstanding that at the time of the declaration, the person was no longer an inmate in the institution. McCarthy J at 1002 said: "Nevertheless, when one reads the subsection in the context of this particular part of the Act as a whole, it is plain that the legislature was speaking in an ever present sense, posing the question of the character of the patient's care as being always in the present. This is by no means an uncommon use of the present tense of the verb to be". 19 Turner J (at 1005) considered that in its context, the word "is" was used without any temporal significance at all, whilst North P (at 1008) was of opinion that the use of the present tense in the subsection "did not relate to time". 20 Similarly, in Logan Park Investments Pty Ltd v Commonwealth Director of Public Prosecutions (1994) 122 FLR 1 at 3 the word "is" in the relevant legislation was construed as meaning "was at the date of the restraining order" and the Court pointed out that there was substantial authority supporting such construction, citing Re M (a minor) [1994] 2 A C 424 and Re D (a minor) [1987] A C 317, and referred to words in the present tense being used without any temporal connotation. 21 In my view, similar considerations apply here. What the assessor is required to assess under s 61(2)(a) is whether the degree of permanent impairment of the injured person is greater than 10 percent. The person is injured once and for all at the time of the accident, so the injury is past; the permanent impairment on the other hand is a continuing static condition, but it is in any case only permanent up until the time of death, whether such death occurs prior to the assessment or many years after it. Accordingly, I consider that the word "is" in s 61(2)(a) is not used in a temporal, but rather a narrative sense and should be read as meaning "is or was". 22 Attention was also drawn to the reference to the "injured person" in s 61(2)(a) and "injured person" is defined in s 3 to mean "a person who suffers an injury" as defined. But as I have said, an injury is suffered once and for all at the time of the accident whether it be a fracture, abrasion, wound or other trauma. What follows e.g. pain, disability, impairment are consequences of the injury, rather than the injury itself. I therefore consider that "injured person" in ss 3, 61 and elsewhere in the Act should be read as referring to a person who has suffered an injury. 23 It was also submitted that in some sections of the Act, a distinction is drawn between an injured person and a deceased person e.g. ss 122(1), 125(2) and 130. But this distinction is irrelevant for present purposes. Those sections and others like them are dealing with two different types of causes of action, firstly those brought by injured persons to recover damages for the injuries they have suffered, and secondly, those brought under the Compensation to Relatives Act 1897 on account of the death of the deceased. The present claim belongs to the former class being brought to recover damages for the injuries received by the deceased prior to his death. 24 It follows that in my opinion, there is nothing in the Act to prevent an assessment of permanent impairment being made in respect of an injured person who has since died. Although chapter 4.5 requires a claim (unless an exempt claim) to be submitted for assessment before court proceedings are commenced and limits the time within which such proceedings must be commenced, and chapter 5 limits the damages in certain respects, the Act does not purport to otherwise abolish or limit common law or statutory rights. Pursuant to the common law and the Law Reform (Miscellaneous Provisions) Act 1944, the estate of the deceased has a right to bring proceedings to recover damages, including damages for non-economic loss, for the injuries suffered by the deceased as a result of his accident up to the date of his death, provided that his death was not caused by the subject accident: s 2(2)(d), although, before the estate can recover any damages in such proceedings for non-economic loss, it must obtain an assessment under s 61 - see s 132. 25 If the Act were construed as preventing the estate from obtaining an assessment under s 61, it would have the effect of depriving the estate of the right to obtain damages for non-economic loss. There is nothing in the Act which suggests there was any intention to deprive estates of deceased persons of their right to obtain damages for non-economic loss merely because the degree of the deceased's permanent impairment resulting from the accident had not been assessed prior to the death. Damages for non-economic loss in such actions would thus become dependant on whether or not the assessment of permanent incapacity was assessed or not before the death of the injured party, which would be an anomalous situation. 26 The instruments issued by the Authority pursuant to s 44 are described as "Guidelines" which suggests something less than orders or directions of universal application. The Macquarie Dictionary, 3rd ed at p 948 gives as one of the meanings of "guide" to "lead, direct or advise in any course or action" and defines "guideline" as "a statement which offers advice on the implementation of a policy". 27 In Laker Airways Ltd v Department of Trade [1977] QB 643, the Court drew a distinction between "direction" and "guidance" in different sections of the legislation there under consideration, and in particular Denning MR at 699 said that "guidance" did not connote an order or command. Likewise, in respect of "guideline" judgments delivered by the Court of Criminal Appeal, Spigelman CJ has said, "Such guidelines are intended to be indicative only. They are not intended to be applied in every case as if they were rules binding on sentencing judges": R v Jurisic (1998) 45 NSWLR 209 at 220, and "Guidelines are not rules of general application. They may be departed from when the justice of a particular case requires such departure": R v Henry [1999] NSWCCA 111, 46 NSWLR 346 at [29]. 28 In any event the Medical Guidelines, being delegated legislation, cannot affect the proper construction of the Act: Pearce and Geddes: Statutory Interpretation in Australia, 5th ed at [3.37], or limit the rights conferred by the Act. They are there to indicate how the relevant assessments are generally carried out but must, where necessary, be applied so as to accommodate any unusual circumstances for which they do not make an express provision. 29 I can see no practical difficulty in the application of the Medical Guidelines. Although clause 7.3 authorises an officer of the Authority to request further information, there is power to proceed in the absence of the further information: clause 7.4; and there is authority in clause 7.10.2 to request the medical assessor to assess the disagreement on the material provided (i.e. on the papers without a clinical examination of the (deceased) applicant). See also clause 7.14. If the circumstances cannot be fitted in to any of the subclauses 7.14.1 to 7.14.6, those provisions must give way for the reasons I have already indicated. 30 Reference was made in particular to clause 1.15 of the Permanent Impairment Guidelines which provide that the evaluation should only consider the impairment as at the time of the assessment, but the balance of the clause makes it clear that this is intended as a prohibition on assessing or predicting further impairment in the future. In my view, clause 1.15 simply has no application to a case where the injured person is deceased by the time of the assessment. 31 In many cases it will be comparatively easy to make an assessment in respect of a deceased person by reference only to the hospital and clinical records; to take an obvious example, the injured person who in the relevant accident suffers quadriplegia, and is subsequently killed in another accident. In other cases, it may be more difficult and in some cases, impossible. In that last mentioned case, the medical assessor will be unable to issue the certificate referred to in clause 10.8 of the Medical Guidelines and without such certificate, the estate of the deceased will be unable to recover damages for non-economic loss up to his or her death as a result of the combined operation of ss 61(2)(a) and 131; but that is no reason for denying the estate of the deceased a right to an assessment if it can be carried out. 32 It was also submitted that claims for damages for personal injuries arising out of motor vehicle accidents are now statutory causes of action under the Act accordingly that the deceased had no cause of action unless he first went through the assessment procedure provided in Part 4.4 of the Act. To this submission there are two answers, firstly, the deceased was granted a certificate of exemption under s 92; secondly, and more generally, his cause of action was not a creature of statute but of the common law, it was a cause of action in negligence which arose on the occasion of the accident when, it is alleged, the driver failed to take reasonable care and the deceased suffered damage. In any proceedings, he had to prove not only that he was an injured person as a result of a motor vehicle accident, but he had to establish a cause of action, negligence, or possibly trespass, giving him a right to recover damages. The Act merely regulated some preliminary procedural steps and modified the damages he could recover if successful in such action, but was not the source of his cause of action. 33 For these reasons, I am satisfied that the Authority has power to proceed with its medical assessment of the deceased as to the extent to his permanent impairment, and the plaintiff is not entitled to the relief sought in the Summons. 34 The plaintiff's claim for denial of procedural fairness was not the subject of any prayer in the Summons and indeed only arose from the letter of 1 April (the day before the hearing of this matter) in which a person acting on behalf of the Proper Officer advised that a preliminary assessment had been conducted that day and the matter would be referred to an assessor for the purpose of conducting an assessment. This aspect of the matter was therefore not strictly before the Court but all parties argued it, presumably in an effort to avoid multiplicity of proceedings.

35 On 19 January 2004, the Authority's Medical Assessment Service wrote to NRMA's solicitors (Abbott Tout) advising that if administration of the deceased's estate were granted (it had not at that stage) and instructions were received to pursue a claim for non-economic loss, MAS would conduct a further preliminary assessment of the matter and then consider what further action was to be taken. The letter went on: "Bearing in mind the earlier correspondence from you, MAS MAY require further information from either or both parties before proceeding any further. That information MAY never be provided in which case the assessment of the dispute about entitlement and non-economic loss MAY never take place. It may be that the matter is referred to an assessor, who considers the material and decides the claimant's whole person impairment is unable to be assessed" (my emphasis). 36 By letter dated 18 March 2004, the estate's solicitors advised the Authority that they were acting for the estate, that they intended to pursue the claim and intended to pursue the application for assessment of a claimant's whole person permanent impairment as a result of the injury caused by the subject accident 1 April 2001 and the same day, advised Abbott Tout accordingly. 37 On 30 March 2004, Abbott Tout wrote to the Authority inquiring its position in relation to the assessment in the light of the response from the estate's solicitors and the following day (31 March), the Authority wrote to NRMA's solicitors referring to an earlier letter of 21 May 2003 from the Authority in which it had stated inter alia:

"There has to be a mechanism for assessing whole person impairment claims where the injured person has subsequently died, whether or not the death is caused by and/or related to the subject motor vehicle accident. MAS will conduct an assessment on this dispute on the papers. Please be aware the Medical Assessment Service is not enquiring or concerned with the cause of death". 38 The letter of 31 March 2004 repeated the three questions asked in the earlier letter and stated that the information was needed by MAS before it could consider the matter further.

39 On 1 April 2004, NRMA's solicitors answered those questions and asked the Authority to confirm that it propose to act in accordance with its proposals set out in its letter of 19 January 2004. The same day, the Authority noted that a claim for non-economic loss was being pursued and stated that in the circumstances, the preliminary assessment had been conducted to determine how the matter would proceed, and went on that the matter would be referred to an assessor for the purpose of conducting an assessment in relation to the degree of whole person impairment and nominated the assessor as Associate Professor Ian Cameron, Consultant Physician in Rehabilitation Medicine. The letter concluded that a letter would be forwarded to the parties shortly calling for the provision of further relevant material and notifying the parties of details of the assessment. It is this latter correspondence that gives rise to the claim for denial of procedural fairness.

40 It was submitted that the decision to refer the matter for assessment without taking into account the significance of any information the Authority received from the estate relevant to the question whether there should be a referral or seeking the insurer's comments on the estate's response to the questions repeated in the Authority's letter of 31 March 2004 was contrary to the representations made by the Authority in its letter of 19 January that the matter would not be referred for assessment if information previously requested was not provided, and that NRMA was deprived of an opportunity of making further representations to the Proper Officer as to why the application was unsuitable for assessment. 41 In my opinion, the Authority's letter of 19 January did not contain any representation that unless the relevant information was provided there would be no assessment or that NRMA would be given any further opportunity to make further representations in the light of any further information received by the Authority. The letter of 19 January must be read it its context namely, that at that stage, no probate or administration had been granted in respect of the deceased's estate, it was not known whether any solicitors had instructions to act for the estate or whether the estate intended to pursue the claim for damages. What the letter said was that if these conditions were fulfilled, the Authority would conduct a further preliminary assessment of the matter and then consider what further action was to be taken. The letter went on stating what MAY happen in certain circumstances but the only unequivocal representation was that unless information as to the grant of probate, the instruction of solicitors and the intention to pursue the damages claimed was confirmed, an assessment would not take place. 42 In my view, the decision to refer it to an assessor was not a breach of any position set out in the letter of 19 January. There had been no indication in that letter that when the questions raised in that letter had been answered any further opportunity would be afforded to Abbott Tout to make further submissions, and that firm had not in its letter of 1 April indicated that it wished to make any further submissions, either in relation to the answers it furnished in its letter of 1 April or in relation to any other matter. In particular, there was no representation that NRMA would be given an opportunity to comment on any answers given by the estate's solicitors to the questions asked by the Authority in its letters of 21 May 2003 and 31 March 2004, and which had been answered by Abbott Tout in its letter of 1 April.

43 NRMA had made lengthy submissions as to why the matter should not be referred for an assessment and the difficulties that might be encountered in conducting an assessment in its original reply to the application for assessment dated 9 October 2002 and its letters to the Authority dated 27 February 2003 and 4 June 2003, and had instituted these proceedings to stop any assessment taking place. In these circumstances, it is difficult to see what, if any, further representations NRMA could possibly have made. See Minister for Immigration and Multicultural Affairs ex-parte v Lam [2003] HCA 6, 195 ALR 502 at [37]-[38]. But more importantly, I am satisfied that neither the letter of 19 January nor that of 31 March contained any suggestion that the plaintiff would be afforded any opportunity to make further representations as to why the claim should not be referred for the relevant assessment. 44 In any event, the letter of 1 April from the Authority advised that a letter would be sent to the parties shortly calling for the provision of further relevant material. I can see nothing to prevent NRMA making further submissions or providing further information on the medical issues to the Authority at this stage, in which case, in accordance with clause 8.4 of the Medical Guidelines, the Authority would be required to make it available to the assessor for his consideration. Moreover, there would appear to be nothing to prevent NRMA making submissions of a medical nature directly to the nominated assessor. 45 For these reasons, I order that the Summons be dismissed with costs. **********

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