Oeding-Erdel v Allianz Australia Insurance Limited

Supreme Court of NSW|2021-09-30|Before: McCallum JA, Callum JA

Judgment

McCALLUM JA: Sandra Oeding-Erdel was injured in a motor vehicle accident in 2016 in which the other driver was at fault. She suffered physical injuries to her neck, back, shoulders and jaw. She also suffered psychological harm. The other driver's third-party insurer, Allianz Australia Insurance Limited, admitted liability but disputed her need for certain treatment and her degree of permanent impairment. Ms Oeding-Erdel lodged two applications with the State Insurance Regulatory Authority to have those medical disputes referred for assessment by the Medical Assessment Service in accordance with the provisions of the Motor Accidents Compensation Act 1999 (NSW).
In the result, Ms Oeding-Erdel was unsuccessful in establishing permanent impairment of greater than 10%, the statutory threshold for an entitlement to damages for non-economic loss: s 131 of the Act. She now seeks judicial review of the decisions that produced that result.
Following amendments to the Act which came into force on 1 March 2021 (effected by the Personal Injury Commission Act 2020 (NSW)), the proper defendant to the application as decision-maker is the President of the Personal Injury Commission of New South Wales, even though the decisions were issued by his predecessor. The President has filed a submitting appearance in the proceedings. The active defendant is the insurer, Allianz.
By her amended summons filed on 14 May 2021, Ms Oeding-Erdel seeks review of three decisions. The first concerned the degree of permanent impairment to her neck and back, which was assessed by an orthopaedic specialist, Dr Dixon, to be 9%. Ms Oeding-Erdel applied for a review of that decision, as allowed under s 63(1) of the Motor Accidents Compensation Act. The review application was dismissed by a proper officer of the Authority without being referred for review. That is the first decision of which judicial review is now sought. The application for review of that decision is out of time. Allianz opposes any extension of time and opposes the substantive relief sought in respect of that decision.

Extension of time

The first decision was issued on 27 February 2020. Rule 59.10(1) of the Uniform Civil Procedure Rules 2005 (NSW) provides that proceedings for judicial review of a decision must be commenced in this Court within three months of the date of the decision. However, the Court has a discretion under r 59.10(2) to extend that period.
The present application was brought by summons filed on 4 May 2021, more than 14 months after the date of the decision. It may be accepted that the delay is lengthy.
The delay is explained in the affidavit of Timothy Driscoll affirmed on 25 June 2021. Mr Driscoll explained the steps he took culminating in his lodging the two applications with the Authority including the dispute as to the degree of permanent impairment. Dr Dixon was tasked, inter alia, with the assessment of whole person impairment attributable to the orthopaedic injuries. He gave his decision on 1 October 2019. He found that Ms Oeding-Erdel had 14% whole person impairment in respect of injuries to her cervical spine, lumbar spine, left shoulder and right shoulder. The component for the injury to the lumbar spine was 5%. However, Dr Dixon also found that Ms Oeding-Erdel had a lumbar disc bulge which pre-dated the motor vehicle accident. On that basis, he deducted 5% from the whole person impairment in relation to the lumbar spine, giving a whole person impairment in respect of the injuries assessed by him of 9%.
Mr Driscoll said he had "an issue" with that assessment. On 14 November 2019, he lodged an application for review of the assessment. The decision refusing that application is the first decision the subject of the present application.
In the meantime, Ms Oeding-Erdel had been assessed by Dr Nichols for whole person impairment in respect of dental injuries. Mr Driscoll had learned from his client that Dr Nichols had conveyed to her that she needed an occlusal splint as a result of the motor vehicle accident and that he could not assess her permanent impairment from the jaw injury until that therapy was completed (that was the TMJ treatment to which I have already referred). Dr Nichols told the plaintiff that, when she returned to him after completion of the therapy, it was likely that he would assess her as having 3% to 5% whole person impairment for the jaw injuries.
In light of that information, when Mr Driscoll received the first decision refusing to refer the whole person impairment attributable to the lumbar spine to a review panel, he recommended to the plaintiff not to seek judicial review of the decision at that time "as it seemed likely the plaintiff would overcome the 10% WPI threshold in any event once the TMJ was assessed for WPI purposes". That expectation was thwarted by the second and third decisions, by which time judicial review of the first decision was well out of time.
Allianz noted that, as the person bringing the proceedings, Ms Oeding-Erdel bears the onus of persuading the Court to exercise the discretion to extend time: Dijakovic v Pérez [2015] NSWCA 174 at [38] (Gleeson JA, with whom Leeming JA and I agreed at [129] and [134]).
Allianz submitted that Mr Driscoll's recommendation to Ms Oeding-Erdel, accepted by her, not to seek judicial review of the first decision amounted to an election of the kind considered by the Court of Appeal in Itek Graphix Pty Ltd v Elliott [2001] NSWCA 442. In that case, Ipp AJA (Spigelman CJ and Sheller JA agreeing) expressed the view at [91] that a deliberate decision to allow a statutory limitation period to expire would be a "powerful factor" against the grant of leave. While a time limit specified in the rules of Court is different from a statutory limitation period, Allianz submitted that the Court of Appeal has "confirmed that the principles relating to elections apply to judicial review proceedings, although whether or not an election has been made involves factual considerations". The authority cited for that proposition was Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 at [91]-[93]. I do not read that passage of the judgment in that way. The Court held that Mr De Gelder "was not debarred on discretionary grounds from obtaining prerogative relief because he had elected to engage in the further assessment". That was an assessment of the relevance of a particular fact to the exercise of a discretion in that case. It should not be elevated to a principle of law that the so-called "principles relating to elections" stated in Itek apply to judicial review proceedings. The law is not so rigid.
In Rodger v De Gelder, an extension of time was granted in circumstances where the claimant took part in further assessment processes before ultimately commencing judicial review proceedings with respect to the original decision of the proper officer. Allianz submitted that the factual situation in the present case is different because the plaintiff was not awaiting the outcome of a series of consecutive decisions but rather chose to cease pursuing review of one line of decision relating to the physical injuries assessed by Dr Dixon in order to pursue a different line of assessment, being the TMJ injuries. However, all of the steps taken by Ms Oeding-Erdel were directed to a single medical dispute, being the degree of permanent impairment. One clear proposition that does emerge from Rodger v De Gelder at [92] is that a superior court with supervisory jurisdiction usually requires a party first to exhaust administrative remedies before seeking judicial review. That is not to say that the time limit for commencing judicial proceedings may be ignored with impunity, but there is a broad discretion to extend time which is not constrained by rigid principles.
Ms Oeding-Erdel relied in this context on the decision of IAG Ltd t/as NRMA Insurance v Chahoud [2019] NSWSC 767. In that case, Bell P sitting at first instance accepted a submission (in that instance by an insurer) that the delay of just less than three months was explained by the fact that the insurer was pursuing an avenue of review, albeit not a statutory right of review: at [54]. His Honour found that the second decision was "inextricably linked" to the first.
As acknowledged by Ms Oeding-Erdel, the present case is not on all fours with the facts of that case. However, it may be accepted that the plaintiff was pursuing her ultimate remedy of establishing the threshold whole person impairment that would entitle her to claim damages for non-economic loss at common law through administrative means. Had the second and third decisions been determined correctly, it was possible if not likely that she would not have needed to challenge the first decision. Mr Hooke SC, who appeared with Mr Morgan for Ms Oeding-Erdel, submitted that she should not be punished for exhausting other administrative remedies before seeking judicial review. There is force in that submission.
Rule 59.10(3) of the Uniform Civil Procedure Rules specifies a list of factors the court "should" take into account in considering whether to extend time under subrule (2). Foremost among those in the present case, leaving aside the submission that an election was made, is the length of the delay, which is significant.
Separately, Allianz submitted that the plaintiff has not outlined a fairly arguable case with respect to the first decision: cf Tomko v Palasty (No 2) [2007] NSWCA 369 at [55]. As I will explain, I do not accept that submission.
Although the delay was lengthy, in my view it was appropriate for the plaintiff to seek to exhaust her administrative avenues for the ultimate remedy she sought before bringing a judicial review application in this Court. Although the decisions concerned different injuries, I consider that the challenge to the first decision was relevantly linked with the avenues being pursued by Ms Oeding-Erdel in respect of her other injuries. Accordingly, I consider that the extension of time should be granted to and including the date on which the summons was filed.

The function of the proper officer under s 63

The plaintiff specified three grounds for review of the first decision but confined her submissions to ground one as follows: "The second defendant fell into jurisdictional error by misconstruing the nature of the jurisdiction committed to it and, rather than looking to whether the appeal grounds were capable of being made out, erred in proceeding to determine the appeal, that being jurisdiction committed to a Medical Appeal Panel."
As already explained, the principal medical dispute lodged by the plaintiff was the dispute as to the degree of permanent impairment as a result of her injuries. She was assessed by Dr Dixon for injuries to the cervical spine, lumbar spine, left shoulder and right shoulder. The plaintiff's challenge is confined to the assessment of the lumbar spine, as to which Dr Dixon concluded that the degree of whole person impairment was 5% but that 5% was to be deducted for a pre-existing condition, giving 0% whole person impairment for that injury.
Section 63 of the Motor Accidents Compensation Act as it stood at the time of the plaintiff's application allowed a party to a medical dispute to apply to the proper officer of the authority to refer a medical assessment by a single medical assessor to a review panel of medical assessors for review. The role of the proper officer in such an application was specified in s 63(3) as follows: "The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least three 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."
It was not in dispute that a decision such as the decision of a proper officer under that provision refusing to arrange for such an application to be referred to a panel is reviewable: Rodger v De Gelder at [70]; QBE Insurance (Australia) Ltd v Miller [2013] NSWCA 442 at [6] (Basten JA, with whom Ward JA and Young AJA agreed at [58] and [59]); Ballas v Department of Education (State of NSW) [2020] NSWCA 86 at [57]-[75].
Allianz submitted (in writing at least) that the issue in reviewing such a decision is "whether the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds", citing QBE at [36] where Basten JA in turn cited Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992; [2004] HCA 32 at [38] (Gummow and Hayne JJ).
That describes the standard of review of the matter to be considered in the first instance by the proper officer (here, whether 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). However, the application of that test assumes the decision-maker has considered the correct matter. As explained in the same passage in QBE, if the opinion of the proper officer has been reached by misconstruing the terms of the relevant legislation, then "it must be held that the opinion required has not been formed": QBE at [36] citing The Queen v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407; [1944] HCA 42 at 432 (Latham CJ).
The ground for review argued by Ms Oeding-Erdel in the present application contended that the proper officer misconstrued the very nature of the jurisdiction committed to her under section 63(4). The task of the proper officer was to have regard to the particulars set out in the application and to ask, if those contentions are correct, am I satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect.
Allianz did not take issue with the correctness of the proposition that it was not the function of the proper officer to determine the application for review on its merits; nor ultimately with the availability of the ground for review relied on in the present case. In oral submissions, Allianz accepted that, if the contention that the proper officer misconstrued the jurisdiction committed to her under section 63(4) were made good, that would establish jurisdictional error. Its central contention was that the proper officer did not commit that error in the present case.

The proper officer's reasons

Accordingly, the central question debated at the hearing of the application was whether the reasons of the proper officer indicated that she did indeed misconstrue the function committed to her. I am satisfied that she did misconstrue her function and so exceeded her jurisdiction. In my view, that is the conclusion that must be drawn from the language of the reasons for decision.
In her application for review, Ms Oeding-Erdel contended that Dr Dixon had not complied with cl 1.31 of the Motor Accident Permanent Impairment Guidelines in that he had failed to calculate the pre-existing whole person impairment. In response to that contention, the proper officer said: "[9] …I agree with the respondent in this respect and do not consider the Assessor's assessment is in contravention of cl 1.31 of the Guidelines."
At [10], the proper officer said: "The Assessor has in the paragraph above given sufficient reasons which satisfy the signs listed under Table 72, AMA IV, DRE II for the 5% impairment found by the Assessor for the [plaintiff's] pre-existing impairment. In respect to providing reasons as to how 5% was calculated, I note that Table 72 provides DRE II attracts 5% impairment. Accordingly, further to establishing why the [plaintiff] satisfied DRE, the Assessor was not required to provide any further reasons as to the deduction of 5% applied."
The proper officer then responded to Ms Oeding-Erdel's claim that Dr Dixon's assessment was against the substantial weight of the evidence as follows at [13]: "… The results of these scans, particularly with respect to the L5/S1 disc, support the Assessor's conclusion outlined above at paragraph 8 that there were similar findings at this level following the subject accident…"
Then at [14], the proper officer said: "I do not accept the [plaintiff's] submission that the Assessor's deduction is clearly at odds with the substantial evidence. The Assessor considered the [plaintiff's] symptoms and history as well as the imaging studies before him. The imaging studies substantially support the Assessor's findings in relation to the deduction for pre-existing impairment made."
In my view, it is clear from those statements that the proper officer exceeded her statutory function. She clearly determined the application on the basis of a view as to the substance of the grounds raised. That required the exercise of medical expertise she did not possess in order to arrive at conclusions she was not authorised to draw. Her conclusions plainly related to the correctness of the Assessor's decision rather than the question whether there was "reasonable cause to suspect that the medical assessment was incorrect in a material respect".
At [9]-[10] of her reasons, the proper officer stated that Dr Dixon had complied with cl 1.31 of the Motor Accident Permanent Impairment Guidelines by correctly calculating the whole person impairment of the plaintiff before the time of the accident. That finding was based upon the proper officer's purported application of medical judgment in the conclusion that the Assessor's reasons in relation to the plaintiff's pre-existing impairment aligned with certain indicia in Table 72 of the AMA Guides to the Evaluation of Permanent Impairment (4th Ed). Such an analysis called for the application of medical expertise which was beyond the qualifications of the proper officer and, more importantly, beyond the scope of her statutory function.
At [13]-[14] of her reasons, the proper officer stated that the imaging scans supported the Assessor's reasons for deducting the whole person impairment of the pre-existing injuries from the plaintiff's whole person impairment at the time of her assessment. Again, that entailed an interpretation of the radiological images which was a clear overreach of her role as it demonstrated that her reasoning process was based on the proper officer's own assessment of the medical evidence.
The respondent submitted that these aspects of the proper officer's reasoning were to be construed "beneficially", relying on the decision of the High Court in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272; [1996] HCA 6. The appropriate response to that submission was stated by Hamill J in Sadsad v NRMA Insurance Ltd [2014] NSWSC 1216 at [47]: "It is one thing to give a "beneficial construction" to the reasons of an administrative decision maker. It is another to fill in the gaps in the path of reasoning by reference to an assumption that the decision was made according to the relevant law."
His Honour referred in that context to the remarks of Stone J in SZCBT v Minister for Immigration and Multicultural Affairs [2007] FCA 9 at [26]: "The phrase 'beneficial construction', as used in Wu Shan Liang has a specific meaning, and was certainly not intended to mean that any ambiguity in the Tribunal's reasons be resolved in the Tribunal's favour. Rather, the construction of the Tribunal's reasons should be beneficial in the sense that the Tribunal's reasons would not be over-zealously scrutinised, with an eye attuned to error. In this sense a 'beneficial' approach to the Tribunal's reasons does not require this Court to assume that a vital issue was addressed when there is no evidence of this and, indeed, the general thrust of the Tribunal's comments suggest that the issue was overlooked."
In the present case, the mischief is overreach rather than the overlooking of an issue but the remarks of Hamill J remain applicable: where the language of the decision-maker plainly indicates that she determined the grounds for the application on the merits, the decision in Wu Shan Liang does not require the Court to make an assumption that she confined her decision to the task conferred by the statute.
Allianz relied on the fact that, in a number of places in the decision, the proper officer stated the correct test. At the same time, it was acknowledged that the mere recitation of the correct test will not necessarily indicate it has been applied. In my view, reading the decision as a whole, it is clear that, although she recited the correct test, the proper-officer strayed beyond that test in the process by which she reached her decision.
Allianz further submitted that the proper officer did no more than to agree with the arguments put forward by it as to why there was not reasonable cause to suspect that the decision of the Assessor was incorrect. The difficulty with that submission is that the insurer's submissions to the proper officer proceeded on the same misapprehension of the legislation as did the proper officer. The submission were not directed to the "gatekeeper" function of the proper officer but to the correctness of the Assessment. As noted in Ms Oeding-Erdel's submissions in reply, the question for the proper officer was not whether it was "open to the Assessor" to make the findings he did, as suggested in the submissions to the proper officer, but whether there was reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application.
Finally, Allianz submitted that, if Ms Oeding-Erdel's argument were to be accepted, it would render the role of the proper officer redundant. The first response to that submission is that the Court is required to construe the statute according to its clear terms. The language of s 63(3) is clear. The content of the role it confers on the proper officer is a matter for Parliament.
In any event, I do not accept that the plaintiff's construction of the statute leaves no role for the proper officer. It is not difficult to imagine examples of cases the proper officer would decline to refer for review on a correct application of the section.

Costs

The insurer accepted that, as to the first decision, costs should follow the event. However, it submitted that, as it submitted to the relief sought concerning the second and third decisions, it should not be ordered to pay the costs of the application so far as it concerned those decisions.
I am not persuaded that this is a case in which a differential costs order should be made. In the first instance, correspondence to which I was taken during the hearing revealed that the insurer shared the misconception of the second decision-maker and to that extent contributed to the errors. Secondly, as I have explained, the three decisions are all aspects of the determination of the medical dispute as to whether the degree of permanent impairment exceeds the threshold of 10%, a proposition Allianz has resisted from the outset.

Orders

For those reasons, I make the following orders: 1. An order setting aside the first decision issued by the Second Defendant, on 27 February 2020. 2. An order setting aside the second decision issued by the Second Defendant, on 30 November 2020. 3. An order setting aside the third decision issued by the Second Defendant, on 15 February 2021. 4. An order remitting the matter to the Second Defendant for determination according to law. 5. The First Defendant to pay the Plaintiff's costs.

Amendments 06 October 2021 - Coversheet: inclusion of additional case and specific provisions of legislation At [47]: typographical error 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: 29 October 2021

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (7 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (17)

Cited By (2)