Peachey v Allianz Australia Insurance Limited

Judgment

1. HER HONOUR: By summons filed 9 February 2015, the plaintiff seeks firstly, a declaration pursuant to s 69 of the Supreme Court Act 1970 (NSW) that the certificate and statement of reasons issued by the second defendant, constituted by the third defendant, on 31 October 2014 is void and of no effect; secondly, an order setting aside the certificate and statement of reasons issued by the second defendant, constituted by the third defendant, on 31 October 2014; and thirdly, an order remitting the matter to second defendant for determination by a different Review Panel according to law.
2. The plaintiff is Martin Peachey ("Mr Peachey"). The first defendant is Allianz Australia Insurance Limited ("Allianz"). The second defendant is the Motor Accidents Authority of New South Wales ("the MAA"). The third defendant is a Review Panel appointed by the Motor Accidents Authority of New South Wales ("the Review Panel"). Mr Romanuik SC with Mr Ryan appeared for Mr Peachey. Ms Poljak appeared for Allianz. The second and third defendants have filed submitting appearances.
3. Mr Peachey relied upon the affidavit of his solicitor Philip Banister dated 2 April 2015. This affidavit annexes the documents that were before the Review Panel.

Background

1. Mr Peachey has a pre-existing condition in the left knee related to osteoarthritis. On 16 June 2003, Mr Peachey suffered injuries to his left knee in a motor vehicle accident while he was doing work as a waste collector. This injury is the subject of his application pursuant to s 63 of the Motor Accidents Compensation Act 1999 (NSW) ("the Act").
2. On 29 April 2014, the assessment of the injury to Mr Peachey's left knee was assessed by Medical Assessment Service Assessor Thomson ("the MAS Assessor").
3. On 6 May 2014, the MAS Assessor issued a certificate and provided written reasons. He determined that Mr Peachey had suffered 0% whole person impairment ("WPI"). In his reasons, the MAS Assessor concluded: "Diagnosis and Causation It is my opinion that Mr Peachey has had long standing osteoarthritis of his left knee which has been present for a number of years. There have been a number of work injuries that have led to exacerbation of the symptomatology of the left knee. The episode of injury when he fell against the step of the back of the truck would not appear to have been a significant contribution to his osteoarthritis as this appeared to have been present prior to the alleged incident of a motor vehicle accident. I therefore conclude that Mr Peachey's left knee is a result of long standing osteoarthritic degenerative changes that commenced in his late teens and has been progressive over a number of years, which has leg to the need for a total knee replacement."
4. I have included the MAS Assessor's reasons as the Review Panel considered inter alia the MAS Assessor's reasons on review.
5. On 4 June 2014, Mr Peachey lodged an application pursuant to s 63 of the Act.
6. On 5 August 2014, the Proper Officer granted the s 63 application and the matter was referred to the Review Panel.
7. On 31 October 2014, the Review Panel determined that Mr Peachey had suffered 0% whole person impairment attributable to the motor accident.

The relevant statutory framework

1. Section 58 of the Act relevantly reads: "58 Application (1) This Part applies to a disagreement between a claimant and an insurer about any of the following matters (referred to in this Part as 'medical assessment matters'): … (d) whether the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%. …"
2. Section 61 the Act relevantly reads: "61 Status of medical assessments … (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."
3. A Review Panel is also obliged to set out its reasons.
4. Section 63(3A) the Act reads: "63 Review of medical assessment by review panel … (3A) The review of a medical assessment is not limited to a review only of that aspect of the assessment that is alleged to be incorrect and is to be by way of a new assessment of all the matters with which the medical assessment is concerned."
5. Both the Medical Assessment Guidelines and the Permanent Impairment Guidelines are relevant here.

The Medical Assessment Guidelines

1. The MAA Medical Assessment Guidelines, 1 October 2008 ("the Medical Assessment Guidelines") are made pursuant to s 44(1)(d) of the Act. They apply in respect of a motor accident occurring on or after 5 October 1999. Pursuant to s 65(1) of the Act, the Medical Assessment Guidelines operate by force of law as if they were delegated legislation.
2. Clause 16.21 of the Medical Assessment Guidelines refers assessment by a review panel. It relevantly provides: "Review Panel assessment 16.21 The Review Panel is to hold an initial meeting or teleconference within 30 days of the date the panel was convened and, at that meeting or in subsequent meetings, is to: 16.21.1 consider afresh all aspects of the assessment under review; 16.21.2 determine whether re-examination of the claimant is required, and if so set a timetable for that to occur; 16.21.3 determine whether additional information is required in order to make a decision; 16.21.4 determine whether each of the certificates issued by the original Assessor is to be confirmed or revoked; 16.21.5 if revoked, determine what new certificates are to be issued; … 16.21.8 determine whether a further meeting of the panel is required; and …"

The Permanent Impairment Guidelines

1. The MAA Permanent Impairment Guidelines, 1 October 2007 ("the Permanent Impairment Guidelines") are issued pursuant to s 44(1)(c) of the Act and apply in respect of a motor accident occurring on or after 5 October 1999. They use the American Medical Association Guides to the Evaluation of Permanent Impairment, 4th Edition, 3rd Printing (1995) ("the AMA4 Guides") as their basis. The AMA4 Guides are widely used as an authoritative source for the assessment of permanent impairment. However, these MAA Guidelines make significant changes to the AMA4 Guides to align them with Australian clinical practice and to better suit them to the purposes of the Act.
2. Under clause 1.20 of the Permanent Impairment Guidelines an assessment by a medical assessor of the degree of WPI involves three stages. They are: "(i) A review of medical and hospital records including: - all available treating and medico-legal doctor notes and reports (general practitioner, specialist and allied health), both prior to and following the accident; and - diagnostic findings from all available relevant investigations. (ii) An interview and a clinical examination, wherever possible, to obtain the information specified in the MAA Guidelines and the AMA 4 Guides necessary to determine the percentage impairment; and (iii) The preparation of a report using the methods specified in these MAA Guidelines which determines the percentage permanent impairment together with the evidence, calculations and reasoning on which the determination is based. The applicable parts of the MAA Guidelines and the AMA 4 Guides should be referenced."
3. Clause 1.23 of the Permanent Impairment Guidelines provides: "The evaluation should only consider the impairment as it is at the time of the assessment."
4. The clause that is central to this judicial review is clause 1.33 of the Permanent Impairment Guidelines which deals with pre-existing impairment. It is also relevant to set out clauses 1.34 and 1.35. They read: "Pre-existing impairment 1.33 The evaluation of the permanent impairment may be complicated by the presence of an impairment in the same region that existed prior to the relevant motor accident. If there is objective evidence of a pre-existing symptomatic permanent impairment in the same region at the time of the accident, then its value should be calculated and subtracted from the current whole person impairment value. If there is no objective evidence of pre-existing symptomatic permanent impairment, then its possible presence should be ignored. 1.34 The capacity of an assessor to determine a change in physical impairment will depend upon the reliability of clinical information on the pre-existing condition. To quote the AMA 4 Guides page 10, 'For example, in apportioning a spine impairment, first the current spine impairment would be estimated, and then impairment from any pre-existing spine problem would be estimated. The estimate for the pre-existing impairment would be subtracted from that for the present impairment to account for the effects of the former. Using this approach to apportionment would require accurate information and data on both impairments'… 1.35 Pre-existing impairments should not be assessed if they are unrelated or not relevant to the impairment arising from the motor vehicle accident."
5. Accordingly, clause 1.33 requires a two stage assessment first, the identification of objective evidence of a pre-existing symptomatic permanent impairment in the same region at the time of the time accident, and secondly, the calculation of what extent the value of such an injury caused current impairment and should be subtracted from the WPI.
6. Under s 58(1)(d) of the Act, an assessment should determine the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident. An assessment of permanent impairment arising from an injury without a finding as to whether that injury was or was not caused by the subject motor accident has no statutory basis or function: see Motor Accidents Authority of New South Wales v Mills (2010) 78 NSWLR 125; [2010] NSWCA 82 at [61].
7. Since the pre-existing injury is osteoarthritis, the clause 1.33 inquiry may involve consideration of clause 3.2(g) and table 62 of the AMA4 Guides. Clause 3.2g outlines how roentgenographic grading systems can be used to determine the extent of arthritis impairment by reference to table 62. Clause 3.2(g) relevantly reads: "3.2g Arthritis Range of motion techniques are of limited value for estimating impairment secondary to arthritis. While there are some patients with arthritis for whom loss of motion is the principal impairment, most patients are impaired more by pain and weakness secondary to advanced joint surface degeneration but still can maintain functional ranges of motion. Roentgenographic grading systems for inflammatory and degenerative arthritis are well established and widely used for treatment and scientific investigation. For most patients, roentgenographic grading is a more objective and valid method for assigning impairment estimates than physical findings, such as the range of motion or joint crepitation. Crepitation is an inconstant finding that depends on factors such as forces on joint surfaces and synovial fluid viscosity. Certain roentgenographic findings that are of diagnostic importance, such as exostoses and reactive sclerosis, have no direct bearing on impairment. The best roentgenographic indicator of functional impairment for a patient with arthritis is the cartilage interval or joint space. The hallmark of all types of arthritis is thinning of the articular cartilage, and this correlates well with disease progression. The need for joint replacement or major reconstruction usually corresponds with the complete loss of the articular surface. The impairments related to arthritis (Table 62, p. 83) are based on standard roentgenograms taken with the patient standing, if possible, and 36 inches from the machine, with the beam at the level of and parallel to the joint surface. The estimate for the patellofemoral joint is based on a 'sunrise view' taken at 40º flexion or on a true lateral view. In the case of the knee, the joint must be in neutral position (0%). …"
8. Table 62 of the AMA4 Guides is as follows:

The decision under review

1. The Review Panel comprised of Professor Ian Cameron, a rehabilitation medicine specialist, Dr Richard Crane, a general surgeon and Dr Donald Faithfull, an orthopaedic surgeon. The Review Panel confirmed the certificate dated 6 May 2014, determining that the injury to the left knee cause by the motor vehicle accident gave rise to a WPI in total of 0%.
2. The Review Panel decided not to conduct a re-examination of Mr Peachey. On 21 August 2014, the Proper Officer wrote to the solicitors for Mr Peachey stating that: "If you object to the Review Panel being conducted without an examination of the claimant, please advise immediately in writing, providing reasons why you believe an examination is required". No objection was made by Mr Peachey (Aff Banister 2/4/15).
3. On 10 September 2014, the Review Panel convened by teleconference. The Review Panel listed the documentation and other material it had received. Under the heading "Evidence considered" it stated: "The Panel considered all of the available evidence. It noted Dr Thomson's certificate. Assessor Thomson concluded that, because Mr Peachey had pre-existing impairment of the left knee related to osteoarthritis, he apportioned all the current impairment (due to a 'good' result from total knee arthroplasty). He concluded, therefore, that there was 0% WPI related to the subject motor vehicle crash."
4. The Review Panel then addressed clause 1.33. First, it concluded that there was objective evidence of a pre-existing permanent impairment in the same region. However, it was unclear whether or not this injury was symptomatic, so the Review Panel determined that further material was required which it identified. This included x-ray films and an x-ray report: "The Panel reviewed the material and concluded that Mr Peachey had pre-existing osteoarthritis of the left knee. However, the key issues with reference to the MAA Permanent Impairment Guidelines were whether this pre-existing impairment was symptomatic and able to be evaluated as being associated with pre-existing assessable permanent impairment. The Panel noted that Mr Peachey had a medial meniscectomy of the left knee in the past, but, based on the information that was available, it was unclear whether there were symptomatic pre-existing problems from the left knee in the period prior to the subject motor vehicle crash. The Panel identified additional material that was required. These were the general practitioner clinical records of Dr D'Souza for the two years prior to the subject motor vehicle crash, and x-rays of the left knee both before and after the subject motor vehicle crash."
5. The Review Panel requested additional material from the parties. On 10 September 2014, the secretary to the Review Panel wrote to the solicitors for Mr Peachey and Allianz, requesting that they provide by 15 October 2015 all clinical records of Dr D'Souza, and all x-rays and imaging of the left knee. On 15 September 2014 the solicitors for Allianz replied to the letter and enclosed the x-ray reports of Dr Wylie, Dr Almosawi (2), Dr Schaffer and Dr Masters. On 24 September 2014 the solicitors for Mr Peachey replied to the letter, enclosing the records of Dr D'Souza and noting that "In respect of the x-rays and imaging on the left knee the Applicant Claimant does not hold those scans or imaging". Accordingly, neither party provided the actual x-ray films. No further request was made by the Review Panel or the proper officer for the provision of the x-ray films as distinct from the reports (Aff, Banister 2 April 2015).
6. On 31 October 2014, the Review Panel reconvened. The Review Panel noted and identified additional evidence it had received and commented that it had reviewed these materials, as well as additional submissions from the parties concerning the additional materials. It then concluded that the pre-existing osteoarthritis was symptomatic. Although the x-ray films had not been obtained, the Review Panel made the decision that those films were not required in order to make the decision about whether or not the injury was symptomatic because the x-ray report showed the cartilage interval. Having assessed the pre-existing injury as being symptomatic, the Review Panel proceeded to discuss causation and impairment evaluation relevant to the second stage of the clause 1.33 inquiry: "Causation of the listed injury was discussed. It was agreed that Mr Peachey sustained an injury to his left knee on 16 June 2003 and this could be characterised as an exacerbation of established osteoarthritis at the left knee. The general practitioner provided a medical certificate in relation to the injury on the same day as the motor accident and stated that there was a knee effusion and patellofemoral crepitus present. The Panel discussed the approach to impairment evaluation. It determined that Mr Peachey had significant severe pre-existing osteoarthritis at the left knee. This was related to past injuries. The Panel discussed whether it should wait to see if additional requested information to become available. It decided that this was not required because it had obtained information that showed the osteoarthritis was symptomatic prior to the subject motor vehicle accident and further information that had become available provided a method of impairment evaluation (the x-ray report showing the cartilage interval). The report of Dr Tzelvelis was approximately 9 months prior to the subject motor vehicle accident. It showed that there were long standing symptoms and problems from the left knee. Thus the osteoarthritis was persistently symptomatic prior to the subject motor accident. The x-ray that was performed less than six months after the subject motor vehicle accident showed some areas with no cartilage interval. These are changes of long standing osteoarthritis and it is not possible for this pathology to develop in six months. The Panel noted the report of Dr Middleton. It appeared that he was not provided with the information about pre-existing left knee problems. The Panel agreed with the reasons provided in the certificate of Assessor Thomson. It noted that Assessor Thomson had carefully assessed Mr Peachey and determined that there was a good result of the knee arthroplasty."
7. The Review Panel then calculated the degree of WPI. It agreed with the MAS Assessor's evaluation of 15% WPI due to Mr Peachey's knee injury. It then evaluated Mr Peachey's WPI related to his pre-existing osteoarthritis as 20% based upon reference to table 62 of the AMA4 Guides and clause 3.2g. Accordingly it calculated Mr Peachey's current WPI due to the motor accident as 0%: "As shown in Assessor Thomson's certificate there is a good result from the total knee replacement and this is evaluated as 15% WPI. The pre-existing impairment is calculated based on the zero millimetre cartilage interval ('bone on bone') shown in the x-ray of 4 December 2003. Table 62, page 83 AMA4 Guides, shows that this is evaluated as 20% WPI. This pre-existing permanent impairment is subtracted from the current impairment to give 0% WPI related to the subject motor vehicle accident. Body Part or System AMA Guides/MAA Guidelines References (chapter/page/table) Stabilised (YES/NO) Current %WPI* %WPI* from pre-existing OR subsequent causes %WPI* due to motor accident
8. Left leg - left knee Table 62 p83 AMA4 and Table 64 p85 AMA4 Yes 15 20 0

The grounds of review

1. Mr Peachey seeks review of the Review Panel's decision on the following main grounds: 1. The Review Panel erred in its construction and misapplied clause 1.33 of the Permanent Impairment Guidelines in its evaluation of objective evidence of pre-existing symptomatic permanent impairment and in its approach to causation; 2. The Review Panel erred in its construction, and misapplied, table 62 on page 83 of the AMA4 Guides because it did not use the required roentgenographic investigation imaging, and because table 62 is designed to assess symptomatic and asymptomatic injury; 3. The Review Panel erred in failing to undertake a clinical examination of Mr Peachey in circumstances where the operation of clause 1.33 required the determination of the statutory notion of a pre-existing symptomatic permanent impairment and information and materials relevant to that statutory notion included a thorough understanding the Mr Peachey's left knee condition prior to the subject accident; and 4. The Review Panel, in the exercise of the statutory task to decide Mr Peachey's WPI, erred in relying on materials that became available in the Review Panel process, including the x-ray report dated 4 December 2003 and the letter from Dr Tzelvelis dated 28 October 2002, without raising those matters with Mr Peachey and that amounted to a denial of procedure fairness, and the occasioning of practical injustice.

(1) Application of clause 1.33

1. Senior counsel for Mr Peachey submitted that the Review Panel erred in its construction and application of clause 1.33 and that there was no evidence, or no probative evidence, that would have satisfied the statutory notion of "pre-existing symptomatic permanent impairment" if that statutory notion had been correctly construed, and also that the incorrect test as to causation was applied.
2. First, senior counsel for Mr Peachey submitted that the first stage of clause 1.33 is a task of calculating pre-existing symptomatic conditions suffered by a claimant to ascertain the degree of symptomatic impairment prior to an accident, which involves examining the impact of impairment, not merely its existence.
3. According to Senior Counsel for Mr Peachey, the path of reasoning of the Review Panel makes it clear that they simply equated the existence of the pre-existing osteoarthritic condition as satisfying the clause 1.33 inquiry, when what was required was an assessment of how symptomatic that injury was prior to the accident. He submitted that as a matter of construction, clause 1.33 is not directed to simply equating the presence of a pre-existing condition with the satisfaction of clause 1.33, and that analysis of Mr Peachey's day to day symptoms at the time of the accident was required. Mr Peachey argued that the text of clause 1.33 makes plain that that task involves ascertaining "objective evidence of a pre-existing symptomatic permanent impairment in the same region at the time of the accident", and so accordingly, the Review Panel needed to isolate and identify that objective evidence, and did not.
4. Senior counsel for Mr Peachey argued that on any view of the material before the MAS Assessor, and then the Review Panel, Mr Peachey's condition was either asymptomatic, or it was intermittently and mildly displaying some symptoms, and that there was no evidence, or no probative evidence, of a pre-existing symptomatic permanent impairment. Senior counsel submitted that this lack of probative evidence made the finding irrational, illogical or unreasonable and that "acting without probative evidence is the equivalent of acting without evidence": see Skiwing Pty Ltd v Trust Company of Australia (t/as Stockland Property Management) [2006] NSWCA 276, Spigelman CJ at [52].
5. So far as the second stage of the clause 1.33 inquiry is concerned, Mr Peachey's submission was that the Review Panel, in determining Mr Peachey's WPI, had to apply legal notions of legal causation, not some modified, attenuated or other lesser causation doctrine. In support of that proposition he relied on Owen v Motor Accidents Authority of New South Wales [2012] NSWSC 650 at [37]; Nelkovska v Motor Accidents Authority of NSW [2012] NSWSC 819 at [35]-[37] and [47]; AAMI Ltd v Ali [2012] NSWSC 969 at [47]; and Gardner v Rail Corporation New South Wales [2013] NSWSC 649 at [38]-[42].
6. According to senior counsel for Mr Peachey, as a legal matter, the question of causation where there is a pre-existing condition, involves consideration of whether the motor vehicle accident materially contributed to the condition as it existed after the accident, because that (at the least) reflects how s 5D of the Civil Liability Act 2002 (NSW) operates by its statutory formulation of the "but for" approach: see Strong v Woolworths Ltd t/as Big W (2012) 246 CLR 182; [2012] HCA 5. Senior counsel for Mr Peachey argued that the vulnerability to injury of a plaintiff by reason of a pre-existing condition in an accident event is reflected in the assessment of damages, and not in the question of a causal connection, and in these circumstances, the correct legal approach, after the finding as to the existence of a pre-existing condition, was to evaluate the chance that the pre-existing condition would impact on a head of damage and then discount the damages awarded accordingly, referring to H Luntz, Assessment of Damages for Personal Injury and Death (Butterworths, 4th ed, 2002).
7. Counsel for Allianz's submission was that the Review Panel fulfilled the two stage inquiry under clause 1.33. Firstly, she argued that there was sufficient evidence before the MAS Assessor and the Review Panel to support the finding of a pre-existing symptomatic permanent impairment of Mr Peachey's left knee prior to the accident, and that Mr Peachey's complaint that there was no probative evidence was incorrect.
8. Counsel for Allianz argued that the second stage of the clause 1.33 inquiry was also done correctly. The Review Panel looked at the report of the x-ray in order to determine what percentage of impairment they could give to it by looking at the distance between the joint, which is the cartilage, and that they were able to make this medical judgment call based upon their expertise. Counsel submitted that it is erroneous for Mr Peachey to contend that the applicable law has not been applied because the reasons for decision did not identify that the Review Panel applied the correct legal test for causation, referring to clause 1.8 of the Permanent Impairment Guidelines which provides that determination of causation "involves a medical decision and a non-medical informed judgment", and clause 1.7 which provides that "Assessors should be aware of the relevant provisions of the AMA4 Guides, as well as the common law principles that would be applied by a court (or claims assessor) in considering such issues". Counsel for Allianz submitted that Mr Peachey's contention that a non-medical informed judgment with "awareness" of common law principles amounts to a strict legal test, puts an impermissible gloss on the real meaning of the Permanent Impairment Guidelines and should be treated with caution.
9. Further, counsel for Allianz argued that the reasons of the Review Panel should not be subjected to "minute and detailed textual criticism in the hope of finding something on which to base an argument": see Allianz Australia Insurance Limited v Motor Accidents Authority of NSW (2006) 47 MVR 46; [2006] NSWSC 1096 at [36] per Sully J, citing R v Sorlie (1925) 25 SR 532 at 539. Counsel argued that Mr Peachey's case appears to be that the reasoning of the Review Panel should be the subject of detailed examination and analysis, and that this approach should be rejected by the Court as it is an impermissible attempt to have the Court examine for itself the real merits of the matter properly the subject of a claims assessment and ascribe weight to various factual matters and factual arguments. Counsel for Allianz submitted that legality must be the issue, not the merits of the proceeding below: see to Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 40 per Mason J; Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1 at 35-36 per Brennan J and Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 272 per Brennan CJ (with whom Toohey, McHugh and Gummow JJ agreed).
10. According to Allianz, in the present case, a merits submission can be identified in that allegedly past evidentiary material that was in fact before the Review Panel, and quoted by it, has been dragged up and trawled through by Mr Peachey in order to challenge the Review Panel's finding on causation.
11. The question for this Court is whether or not the Review Panel's decision was open to them as a matter of law, not whether the decision was reasonable or whether or not this Court would have made the decision itself. In Peko-Wallsend, Mason J referred to the limited role of a court reviewing the exercise of an administration decision (at 40 to 42): "The limited role of a court reviewing the exercise of an administrative decision must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned: Wednesbury Corporation (41). … … a court should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest in exceed its supervisory role by reviewing the decision on its merits."
12. So far as the first stage of the clause 1.33 inquiry is concerned, the Review Panel identified that the injury was possibly symptomatic but it was unclear whether it was symptomatic in the period prior to the motor vehicle accident. The Review Panel requested more material to elucidate this information, in particular the x-ray report and the report of Dr Tzelvelis. The Review Panel formed the opinion that this was evidence that the osteoarthritis was "persistently symptomatic prior to the subject motor accident". In my view, this decision was a medical judgment call based on medical expertise. In Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [47] the High Court discussed the role of a medical review panel: "[47] The function of a Medical Panel is to form and to give its own opinion on the medical question referred for its opinion. In performing that function, the Medical Panel is doubtless obliged to observe procedural fairness… It goes too far, however, to conceive of the function of the Panel as being either to decide a dispute or to make up its mind by reference to competing contentions or competing medical opinions. The function of a Medical Panel is neither arbitral nor adjudicative: it is neither to choose between competing arguments, nor to opine on the correctness of other opinions on that medical question. The function is in every case to form and to give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise."
13. It is important to keep in mind that as this Court does not possess the clinical skill and expertise of a medically qualified assessor, it should only intervene if there are clear cases of jurisdictional error: see Nelkovska at [54]. No such clear error can be found in the Review Panel's approach to the first stage of the clause 1.33 inquiry.
14. So far as the second stage of the test is concerned, in my view the Review Panel adequately evaluated the extent to which Mr Peachey's pre-existing symptomatic osteoarthritis caused his current WPI. Although the Review Panel did not apply the strict legal test for causation, and did not clearly use the "but for" test, it is clear the Review Panel assessed "whether the injury was caused or materially contributed to by the motor accident": see Nelkovska at [47]. In a detailed summary, it explained how Mr Peachey's current knee left injury "could be characterised as an exacerbation of established osteoarthritis", that his pre-existing osteoarthritis was significant and severe, and that the x-ray results six months after the motor accident showed areas with no cartilage interval which are changes of long standing osteoarthritis which are "not possible" to develop in six months. Accordingly, it is clear that the Review Panel's opinion was that it was the pre-existing symptomatic osteoarthritis, not the motor accident that materially contributed to Mr Peachey's left knee injury.
15. As observed by Johnson J in Ackling v QBE Insurance (Australia) Ltd [2009] NSWSC 881; (2009) 75 NSWLR 482 at 499, the task of medical practitioners conducting medical assessments is "a practical one" and "it is important that the process is not rendered unduly complex by legal terminology". It is not necessary that the strict legal test for causation be applied by a medical review panel. As Hidden J recently stated in Peet v NRMA Insurance Ltd (2015) 70 MVR 473; [2015] NSWSC 558 at [29] "one might question whether it would ever be appropriate for the normative judgment required by CLA s 5D(1)(b) to be made in the medical assessment process". This ground of review fails.

(2) Misapplication of AMA4 Guides Table 62

1. Senior counsel for Mr Peachey submitted that in this case, clause 3.2g of the AMA4 Guides requires that roentgenographic investigation imaging be used for the purposes of determining WPI by application of Table 62. Senior counsel argued that since the Review Panel did not use the specific images referred to in clause 3.2(g) in their assessment under Table 62, that assessment was illegitimate. As outlined above, the Review Panel decided that they were in a position to make a decision about whether or not the osteoarthritis was symptomatic from the x-ray report, without needing to view the x-ray films. The Review Panel did not use roentgenographic investigation imaging itself, and senior counsel for Mr Peachey submitted that to apply Table 62 by reference to clause 3.2g the Review Panel needed to look at the x-ray films themselves, not just the report. In particular, senior counsel for Mr Peachey argued that the Review Panel needed to look at a certain set of films taken at a certain distance from the joint and at a certain view.
2. Senior counsel for Mr Peachey submitted that the Review Panel, in not requesting the x-ray films to analyse itself, but instead relying on someone who reported on the x-rays of Mr Peachey for treatment purposes, erred as there was no evidence, no findings and no reasons that could support the application of clause 3.2g. In support of this proposition, senior counsel for Mr Peachey referred to the decision of Sadsad v NRMA Insurance Limited [2014] NSWSC 1216 at [47] where Hamill J stated, in the context of the discussion about those limitations to the "beneficial construction" of reasons that: "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."
3. Further, senior counsel for Mr Peachey submitted that there was another fundamental complaint in the Review Panel applying clause 3.2g and Table 62, in that they are designed to assess symptomatic and asymptomatic injury. Accordingly, his argument was that the 20% conclusion that the Review Panel reached by applying clause 3.2g, by the very nature of that part of the Permanent Impairment Guidelines, included asymptomatic injury, and as such was illegitimate.
4. Counsel for Allianz submitted that the Review Panel was entitled to rely on the x-ray report from the specialist radiologist who has assessed the scans. She submitted that the report used, that of Dr Almosawi dated 4 December 2003, was a report about roentgenographic investigation as specified in clause 3.2g. Counsel for Allianz argued that the report is clearly a review of a roentgenographic investigation as the letterhead is "Mayne Diagnostic Imaging" and the author of the report is a managing radiologist. Additionally, counsel submitted that being medical experts, the Review Panel members were persons able to view the x-ray report showing weight bearing views that imply that Mr Peachey was standing, showing the knee joints, and also showing the cartilage interval, and be able to decide that the accident was not causative of the osteoarthritis. Accordingly, Allianz's submission was that there was sufficient radiological evidence for the Review Panel to be able to apply Table 62.
5. Clause 3.2g states that the best way to work out impairment for arthritis is through the use of roentgenographic investigation. Roentgenographic investigation involves the use of specific x-ray images to determine the thinness of the articular cartilage, which is the "hallmark" of all types of arthritis. The thinness of cartilage intervals shown in roentgenographic images, in millimetres, is used to determine impairment through Table 62.
6. The Review Panel adopted the opinion of Dr Almosawi that Mr Peachey had "significant narrowing of the joint space involving mainly the medial compartment with bone on bone contact on the weight bearing views." Although it is not known whether these opinions are based on "standard roentgenograms" taken from the exact views specified in clause 3.2g for the purposes of Table 62, the medical experts on the Review Panel were in a position to and did make a medical judgment call that they could determine that "bone on bone" equated to 0 millimetres. The Review Panel, using its medical knowledge, adopted the viewpoint of Dr Almosawi and determined that it was unnecessary for the Review Panel to view roentgenographic images of Mr Peachey's knee to check that the cartilage interval was 0 millimetres. They were entitled to make that medical judgment call and no error arises here. This ground of judicial review fails.

(3) Failure to undertake interview and clinical examination

1. Mr Peachey submitted that the Review Panel, by failing to undertake a clinical examination, erred in failing to take into account relevant considerations in its determination of a pre-existing symptomatic injury.
2. Mr Banister, the solicitor for Mr Peachey (Aff 2/4/15), explained why he did not object to the Review Panel's decision not to perform a re-examination at paragraphs [28] and [30]: "[28] At the time when I considered the question of whether I would ask that there be an examination of the Plaintiff, I formed the view that this was not necessary because at that time lengthy submissions had been provided on behalf of the Plaintiff setting out the reasons why it was submitted that Assessor Thomson's Certificate and determination were incorrect. … [30] When I considered the question of whether the Plaintiff should ask for a clinical examination, there was no evidence which had been served by either party, or which had arisen from Assessor Thomson's clinical examination, reasons and Certificate, that suggested, or established, that the Plaintiff was not asymptomatic as at the date of the accident, and this was referred to in the submissions filed in support of the Plaintiff's position."
3. Senior counsel for Mr Peachey submitted that because the Review Panel took a different approach to the MAS Assessor, and was minded to reject Mr Peachey's version of his pre-existing condition as being asymptomatic, it needed to conduct a clinical interview so that it could inquire of Mr Peachey as to what his condition was at the time of the accident. He argued that a re-examination was an opportunity to ask Mr Peachey about his employment, how his left knee was at the start of the day and how during the day his left knee was giving him difficulty, and those were all relevant considerations.
4. Senior counsel for Mr Peachey referred to Rutland v Allianz Australia Insurance Ltd [2014] NSWSC 1583 in which he said a similar issue arose. In that case, Garling J held that it was not possible, in those particular circumstances, for a Review Panel to undertake an assessment and form its opinion without such a consultation and examination, and made the following comments about re-examinations in general at [76]: "[76] The plaintiff submits that a re-examination is in all practical senses, essential in all cases of review. The terms in which Guideline 1.20 are expressed… would support this submission. I do not have to determine that question on such a broad basis. There may be circumstances, at least that one can envisage, where an assessment of whole person impairment would not necessarily be advanced by an examination or consultation with a claimant. The probabilities are that such circumstances will be rare or unusual."
5. Counsel for Allianz submitted that the decision not to re-examine Mr Peachey was a decision open to the Review Panel to make. Counsel submitted that the Review Panel had before them the clinical findings of the MAS Assessor, all of the documents provided to the MAS Assessor prior to the assessment, and sought additional evidence for the two year period prior to the accident. Counsel for Allianz argued that there is nothing binding the Review Panel to perform a fresh examination, as it is a discretionary guideline (see clause 1.3).
6. Under clause 1.20 of the Permanent Impairment Guidelines, a review panel is entitled to conduct an interview and clinical examination to obtain information specified in the Guidelines. However, there is no binding obligation on a review panel to conduct a re-examination. Mr Peachey knew that the Review Panel was conducting a fresh assessment, and could come to a different opinion about whether or not his osteoarthritis was symptomatic to that of the MAS Assessor. On 21 August 2014, the Proper Officer wrote to Mr Peachey asking if he objected to the Review Panel being conducted without an examination of him. The Proper Officer also advised that, "The Review Panel will consider afresh all aspects of the assessment under review, any may choose to confirm or revoke any or all of the certificates issued by the Medical Assessor whose assessment is under review."
7. Mr Peachey made a decision not to request a re-examination and interview. Had he wanted the Review Panel to elicit an account from him as to how his left knee felt at particular times of the day, he was in a position to make this submission as the basis for requesting the clinical interview and re-examination. This ground fails.

(4) Denial of procedural fairness?

1. Senior counsel for Mr Peachey submitted there is a procedural fairness issue in the sense that the Review Panel could have, but did not, say anything to the parties about their intention to rely on the x-ray report instead of the x-ray films in their determination of WPI. Accordingly, senior counsel submitted that Mr Peachey was not given an opportunity to respond to that course of action. Senior counsel for Mr Peachey referred to paragraph 8 of the Review Panel Practice Note 3/201 which relevantly reads: "8 Procedural fairness check: Before coming to a final decision on the issues before them, the Review Panel should consider whether the parties have had opportunity to address the issues that are being decided. The Review Panel should adjourn and invite submissions from the parties if: a. the Review Panel is inclined to revoke a certificate issued by the previous medical Assessor when that certificate and/or that aspect of the assessment was not disputed in the review application or reply, or b. the Review Panel is inclined to find that a conclusion of the original medical Assessor is incorrect, when that aspect of the assessment was not disputed in the review application or reply, or c. the Review Panel is of the view that the party that may be disadvantaged by their decision has not addressed a critical issue In such cases the Review Panel should generally: a) formulate a letter to the parties explaining the aspect/s of the assessment that are under consideration b) where applicable, indicate the preliminary views of the Panel on that issue c) seek submissions on the specified issue/s from the parties, to be provided within a specified time frame which will be no less than 10 working days, and d) make arrangements for the time and date on which the Review Panel will reconvene to consider the submissions. The Secretary of the Review Panel will: e) forward the letter to both parties, and f) forward copies of any submissions received to the other party and to all Review Panel members.
2. Senior counsel for Mr Peachey submitted that what happened here falls into the first subparagraph (c) of the Practice Note. He argued that Mr Peachey should have been notified that the Review Panel did not have the x-ray films, and that they were going to rely on the x-ray report instead and apply clause 3.2g and Table 62. That did not occur (T12.43-49) and this he says constituted a denial of procedural fairness. Senior counsel submitted that, had the Review Panel written a letter in accordance with the Practice Note, signalling to Mr Peachey that it intended to rely upon the x-ray report and not the film itself, Mr Peachey could have raised two issues. First, that clause 3.2g could not be utilised without the x-ray films, and secondly, that clause 3.2g could not be used in a clause 1.33 setting, as it assesses both symptomatic and asymptomatic injury, and clause 1.33 is concerned only with symptomatic injuries.
3. Counsel for Allianz submitted that there was no denial of procedural fairness insofar as the material available is concerned. She argued that the Review Panel requested from the parties additional material for the two years prior to the accident, and both Mr Peachey and Allianz had the opportunity, and did, provide submissions on the additional material prior to the assessment.
4. When a decision maker such as a review panel exercises a power to request additional information, issues of procedural fairness may arise. Procedural fairness and practical injustice in such a setting was described in Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39 at [32] by Leeming JA: "[32] It was also common ground that the content of the obligation upon the panel to accord procedural fairness extended to confronting the applicant with inconsistencies and providing him or her with an opportunity to respond. That is consistent with what has often been held, in a wide range of contexts, including Kioa v West (1985) 159 CLR 550 at 587 ('the need to bring to a person's attention the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it'). It is reflected in cl 1.43 of the 'Permanent Impairment Guidelines: guidelines for the assessment of permanent impairment of a person injured as a result of a motor vehicle accident' dated 1 October 2007, which (like the Medical Assessment Guidelines) bound the members of the panel by reason of s 65(1) of the Act."
5. In Jaksic v Insurance Australia Ltd, trading as NRMA [2013] NSWSC 1141 at [66]-[67] Rothman J had the following to say about procedural fairness in the context of a medical review panel: "[66] …procedural fairness depends upon the statutory context for the decision making process. The Panel is charged, on a review such as this, with the function partly of an expert witness, partly inquisitorial and partly adversarial. Largely, the Panel, when examining a claimant, is fulfilling the function of applying the medical expertise of the members of the Panel in investigating the degree of the impairment suffered as a result of the claimed injuries. [67] In those circumstances, there is necessarily a significant diminution in the level of formality that would occur in adversarial proceedings. It is also, therefore, essential that the Panel adhere to those requirements prescribed in order to ensure procedural fairness."
6. Rothman J referred to Practice Note 3/201 from [71]-[72] and stated: [71] Unlike the Guidelines, the practice note is not 'binding'. Nevertheless, the terms of clause 8 of the practice note, recited above, emphasise the need, in providing the parties with procedural fairness, to provide them with an appropriate opportunity (including, where necessary, an adjournment and the invitation of submissions) to prepare and to present that party's case, including any critical issue of which the party has been given notice. [72] Fundamental to the process of procedural fairness is that a party is given notice of the hearing and has the right to be heard. Ordinarily, and fundamental to the purposes which the notice is to serve, the notice provided must disclose the critical issues that are required to be addressed: Kanda v Government of Malaya [1962] AC 322 (PC) at 337, per Lord Denning; Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 582, 587 per Mason J. In Kioa v West at 587, Mason J said: '[40] In this respect recent decisions illustrate the importance which the law attaches to the need to bring to a person's attention the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it.'"
7. As Rothman J said in Jaksic, "The rules of procedural fairness applicable to administrative decision-making are … flexible and must take account of the context". In my view, the Review Panel was not obliged to bring the decision to proceed without the x-ray films and exercise clause 3.2g to Mr Peachey's attention.
8. When the Review Panel requested additional information, they afforded the parties procedural fairness by notifying them that they required the clinical records, the x-ray report and the x-ray films by letter dated 10 September 2014. This letter invited the parties to make further submissions and also stated: "It is suggested that the parties discuss this request and make any necessary arrangements. In any event, when submitting this information, please confirm that you have provided a copy to the other party."
9. The Review Panel put the parties on notice that the x-ray reports and x-ray films would be reviewed. They also ensured that each party knew which documents had been provided by the other party. Mr Peachey did not provide the x-ray films, and Allianz should have advised Mr Peachey the documents it provided. It would have been clear to Mr Peachey's legal representatives that the actual x-ray films had not been provided to the Review Panel. In these circumstances, it was open to Mr Peachey to provide additional submissions about the reasons why the Review Panel should not proceed without the actual x-ray films and wait until they became available. He did not do so.
10. The Review Panel exercised its medical judgment when deciding to apply clause 3.2g without the necessity of viewing the films and it was entitled to do so. The Review Panel was of the view that it was not necessary for it to analyse the x-ray films itself in order to apply clause 3.2g and Table 62. Mr Peachey was not denied procedural fairness by the Review Panel.
11. The result is that the application for judicial review fails. The summons filed 9 February 2015 is dismissed.
12. Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the first defendant's costs as agreed or assessed.

Orders The Court orders that: (1) The summons filed 9 February 2015 is dismissed. (2) The plaintiff is to pay the first defendant's costs on an ordinary basis as agreed or assessed.

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: 17 July 2015