Pinarbasi v AAI Ltd t/as GIO

Solicitors: Bryden's Lawyers (Plaintiff) Barry Nilsson Lawyers (First Defendant) Crown Solicitor's Office (Second and Third Defendant) File Number(s): 2022/198295

JUDGMENT

1. In July 2018 Mr Pinarbasi was injured in a motor vehicle accident when the bus he was driving was hit by another bus. His later claim under the Motor Accidents Injuries Act 2017 (NSW) was rejected by the insurer, AAI, in March 2020, it having concluded that he had suffered only "minor injury" in the accident. Mr Pinarbasi's application for review of that decision succeeded, a certificate issued by medical assessor Herald in April 2022 accepting that he had suffered an injury to his right shoulder in the accident which was not a minor injury.
2. The insurer pursued an application for review of that decision. The President of the Personal Injury Commission of New South Wales is given a gateway function in relation to such applications under s 7.26(5) of the Act, of the kind considered in Meeuwissen v Boden (2010) 78 NSWLR 143; [2010] NSWCA 253 and Insurance Australia Ltd v Marsh [2022] NSWCA 31.
3. The President's delegate concluded that there was reasonable cause to suspect that the medical assessment was incorrect in a material respect and accordingly referred the review application to a review panel. There were limited reasons given for that decision by way of a proforma Determination document.
4. These judicial review proceedings were then brought by Mr Pinarbasi under s 69 of the Supreme Court Act 1970 (NSW). His application was not opposed by the insurer, which entered a submitting appearance.
5. While in proceedings such as this the President would usually also file a submitting appearance, there being in those circumstances no contradictor, he appeared to be heard on the proper construction of the Act on an amicus basis, to which there was no objection: R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13; [1980] HCA 13 at 35-36. It was common ground that there would thus be no order as to costs made in respect of the President's appearance.

Issues

1. At common law there is no general obligation to give reasons for an administrative decision: Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [43]. But such an obligation may be implied: Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 at [25]. That depends on the nature of the function: at [104]-[108].
2. There may also be circumstances where the failure to give any reason supports an inference that the decisionmaker had no good reason: Public Service Board (NSW) v Osmond (1986) 159 CLR 656; [1986] HCA 7 at 663-664. But in this case, some reasons were given, in accordance with the President's administrative practice.
3. The absence of a statutory requirement to give reasons does not preclude judicial review such as that here sought: Avon Downs Pty Ltd v Federal Commissioner of Taxation (Cth) (1949) 78 CLR 353; [1949] HCA 26 at 360.
4. In issue was whether there was an implied obligation to give reasons for decision imposed when the s 7.26(5) gateway function was exercised, which had not been complied with by the delegate. That turned on the proper construction of the statutory scheme.
5. Even if there was no such obligation, whether the delegate had considered an alleged error raised by the insurer's application, which was incapable of rendering the assessor's certificate incorrect in a material respect, given the assessor's statutory functions, also arose to be considered.
6. While the President did not seek to be heard on this second question, there was no issue that the test to be applied to the formation of the state of satisfaction which s 7.26(5) required was whether the opinion formed was reached according to law: Avon at 360 and Buck v Bavone (1976) 135 CLR 110; [1976] HCA 24 at 118, applied in QBE v Miller [2013] NSWCA 442 at [36].

The parties' cases

1. Mr Pinarbasi's case was thus that given the nature of the gateway function in question, there was an implied obligation to give reasons imposed. That was disputed by the President.
2. Mr Pinarbasi also contended that in any event, the insurer's application could not have resulted in the required conclusion that there was reasonable cause to suspect that the medical assessment was incorrect in a material respect, given the proper operation of the statutory scheme.
3. Neither the President nor the insurer sought to be heard about this.

The statutory scheme

1. The scheme provides for dispute resolution in relation to medical disputes in Pt 7 of the Motor Accidents Injuries Act. It provides for:

• medical assessments regulated by Div 7.5, which provides for an internal review by an insurer, before any medical assessment of a medical dispute: s 7.19;
• the conduct of such a review by a merit reviewer who is obliged to issue a certificate, giving brief reasons for the determination arrived at: s 7.13;
• in the event of an ongoing medical dispute, referral of the injured person for assessment by a medical assessor, on application of either the injured person or insured: s 7.20;
• the medical assessor's determination of the injured person's degree of impairment for the purpose of the Act: s 7.21;
• the assessor's certificate as to such impairment, which: - is given statutory status in legal proceedings: s 7.23; and - must set out the reasons for the matters certified: s 7.26(7).
• review of such an assessment under s 7.26 by an application which may only: - be made on the grounds that the assessment was incorrect in a material respect: s 7.26(2); and - be referred for review if the President "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": s 7.26(5).
• such a review being undertaken by a panel of three appointed by the President, by way of a new assessment not limited to a review of that aspect of the assessment alleged to be incorrect, which may result in the issue of a new certificate: s 7.26(5A), (6) and (7). In that event the obligation imposed on an assessor to give reasons for the matters certified is also attracted; and
• the making of Regulations and Guidelines, the latter also dealing with the obligation to give reasons in respect of internal review and merit review: ss 7.13 and 7.16.

1. But unlike the obligations imposed on internal merit reviewers, assessors and review panels which must issue certificates giving reasons for their decisions, there is no express obligation imposed on the President to give reasons when performing the s 7.26(5) gateway function.
2. It is the words of s 7.26(5) which limit the gateway function to a consideration of the matters raised by the particulars set out in the review application, rather than any apparent error in the assessor's certificate.

Was the delegate obliged to give reasons?

1. I am satisfied that there was no obligation imposed by s 7.26(5) to give reasons for the decision arrived at.
2. At law in the case of an administrative decision such an obligation may be expressly imposed by statute, or implied. Whether implied or not, the President's administrative practice required reasons to be given when the s 7.26(5) function was exercised and the resulting determination issued, as the result of the proforma determination in use. There is no suggestion that such a practice could not lawfully be adopted by the President.
3. The short reasons which the delegate gave in this case thus arise to be considered, but they did not shed much light on the path of reasoning which led the delegate to the conclusion arrived at on the matters the insurer raised. That path of reasoning would have been necessary to disclose, if it was the Motor Accidents Injuries Act which required the giving of such reasons.
4. While not conclusive, it is pertinent to the proper construction of s 7.26(5) that the Parliament has expressly required that reasons be given for other decisions made under the statutory scheme and that Guidelines may also require the giving of reasons for other decisions, but that no reasons are so required to be given when the s 7.26(5) gateway function is exercised: Doyle's Farm Produce Pty Ltd v Murray Darling Basin Authority (No 2) (2021) 106 NSWLR 41; [2021] NSWCA 246.
5. There it was observed that "[i]t is much better to start with the language which Parliament has enacted, rather than draw inferences based on words which it has not employed": at [70].
6. In Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission (NSW) [2007] NSWCA 149, it was s 327 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) which arose to be considered. It provided for an appeal against a medical assessment undertaken under that statutory scheme, on grounds specified in s 327(3).
7. Such an appeal was "not to proceed unless the President is satisfied that, on the face of the application and any submissions made to the President, at least one of the grounds for appeal specified in subsection (3) has been made out": s 327(4). No express requirement to give reasons for the conclusion reached was there imposed. While not identical to the requirement imposed by s 7.26(5) of the Motor Accidents Injuries Act, there are thus similarities in these two gateway functions.
8. Whether the s 327(4) function of the Workplace Injury Management and Workers Compensation Act was judicial in nature was in issue in Riverina Wines, that being pertinent to the resolution of whether an obligation to give reasons was implied: Vegan at 393-394 and 396.
9. In Riviera Wines it was concluded that the s 327(4) function did not have a judicial character, that generally involving a determination of legal rights and duties, rather than the decision maker's state of mind: at [109]-[112]. While it was accepted that some decisions of an administrative character do carry an obligation to give reasons, for example where a person's rights and legitimate expectations may be adversely affected if the reasons are not provided, it was found that the s 327(4) function did not have that character. That conclusion was supported by there being no statutory right to appeal given in respect of such a decision: at [113].
10. The result was the conclusion that when exercising the s 327(4) function, the Registrar or a delegate was not under any duty to provide reasons for the decision arrived at.
11. A more similar provision to s 7.26(5) of the Motor Accidents Injuries Act, s 63(3) of the Motor Accidents Compensation Act 1999 (NSW), arose to be considered in Marsh. There an application for review of a medical assessment had been refused, but reasons had been given by the proper officer there exercising that gateway function. Whether there was an obligation to give reasons thus did not arise for consideration in that case. But what was there decided is relevant to the determination of the second issue raised by Mr Pinarbasi.
12. I am nevertheless satisfied that a similar conclusion must be arrived at in relation to the construction of s 7.26(5) of the Motor Accidents Injuries Act, as that reached in relation to s 327(4) of the Workplace Injury Management and Workers Compensation Act in Riverina Wines. That follows from the similar nature of the two gateway functions, despite the differences in wording in the two sections.
13. Both gateway functions are administrative, not judicial in character; neither require the correctness of the medical assessment sought to be reviewed to be determined; neither otherwise determine ultimate rights or liabilities; and neither attract any appeal rights, alleged error having to be pursued by way of judicial review application.
14. It follows that on its proper construction, there is also not implied in s 7.26(5) any obligation to give reasons for the decision the President or the delegate arrives at, when exercising that gateway function, when an application for review of a medical assessor's certificate is made.

Could what the insurer's review application raised, result in the required statutory opinion?

1. As explained in Avon at 360, even though there is no requirement to give reasons when the gateway function is exercised, the decision may be reviewed in proceedings such as this. Such an application will succeed, if on a full consideration of the material which arose to be considered, the conclusion reached is capable of explanation only on the ground of some misconception as to the applicable law.
2. Thus, "[i]f the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition." In such a case it is not necessary "to be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law".
3. Section 63(3) of the Motor Accidents Compensation Act, considered in Marsh, provided that: The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least 3 medical assessors, but only if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application.
4. That requirement is the same as that imposed by s 7.26(5) of the Motor Accidents Injuries Act. In both Marsh and this case reasons were given by the delegate and so must be considered in resolving the second issue raised by Mr Pinarbasi, albeit those given in Marsh were more extensive than those given by the delegate in this case.
5. In Marsh the primary judge had quashed the proper officer's decision to refuse the application for review and ordered that the assessment be referred to a review panel. Her Honour's order had flowed from the conclusion that the inevitable result of a proper officer exercising the s 63(3) function as it then was, confronted with conflicting opinions of medical practitioners, was "that there must be reasonable cause to suspect that the medical assessment is incorrect in a material respect": at [7].
6. It was held on appeal that this involved a misconstruction of s 63 of the Motor Accidents Compensation Act : at [8]. Further, that "[i]f the proper officer were to find reasonable cause to suspect that an assessment was incorrect merely because conflicting medical opinions had been provided, that would reveal a misunderstanding of the function of the medical assessor. In other words, the existence of conflicting opinions, far from providing an invariable basis for referral to a review panel, cannot, by itself, constitute a ground for referral to a review panel": at [12].
7. It was also observed in Marsh that the "particulars set out in the application" referred to in s 63(3) to which the proper officer was required to have regard were those matters stated in the submissions attached to the application for review: at [43]. It was thus there not reasonably arguable that what was required of the proper officer was to have regard to all of the materials before or available to the assessor: at [45]. What was required was that the proper officer's reasons "address the particulars set out in the application", in that case, in the accompanying submission.
8. These conclusions help explain the insurer's submitting appearance in this case, given the same requirements imposed by s 7.26(5) of the Motor Accidents Injuries Act. It also requires the President to form the opinion there required, by reference to the particulars set out in the application for review, in this case those of the insurer.
9. It follows that the exercise of the resulting gateway function also cannot proceed simply on the basis that of the conclusion that there having been a medical dispute before the assessor involving conflicting medical opinions, that there must be reasonable cause to suspect that the medical assessment was incorrect in a material respect, because the assessor came to a different view to that arrived at in the medical opinions on which the party challenging the assessment had relied.

The assessor's certificate

1. In Mr Pinarbasi's case the assessor gave extensive reasons for the conclusions reached, outlining:

• the dispute to be assessed;
• the submissions received;
• the documents provided by the parties, which had been considered;
• the legislation and Guidelines to which regard had been had;
• the reasons for the decision arrived at, which explained: - that Mr Pinarbasi had attended for examination by the assessor; - his personal details and pre-accident medical history; - the history of the accident; - the history of Mr Pinarbasi's subsequent symptoms and treatment; - the injuries and conditions he suffered after the accident; - his current symptoms; - his current and proposed treatment; - the results of the assessor's clinical examination; - the assessor's observations of consistency; - the documents the assessor reviewed, which included numerous medical reports, an ultrasound of Mr Pinarbasi's shoulder and his clinical records; and - a summary of radiological and medical imaging and other investigations;
• the assessor's determination that Mr Pinarbasi's injuries to his cervical and lumbar spine were minor injuries as defined in s 1.6(1) of the Motor Accident Injuries Act and Pt 1, cl 4(2) of the Motor Accident Injuries Regulation 2017 (NSW), but that his shoulder injury was not minor.

1. The assessor's explanation for that conclusion was, however, short and did not refer to all the competing opinions of other doctors which had been considered. The assessor explained: "However in regard to the right shoulder Mr Pinarbasi does have features of a rotator cuff tear which has been identified on ultrasound in 2019. He has been symptomatic even prior to this as demonstrated by examination with Dr Loefler and his history of having been symptomatic since the accident which Dr Loefler examines the right shoulder specifically and showed symptoms of pain and crepitus. Ultrasounds are notoriously inaccurate and an MRI scan would be more accurate in determining the size of the rotator cuff tear but I suspect it has progressed over time and may be bigger than the ultrasound suggests it is. This is obviously a non-minor injury based on the above definition in Section 1.6(2)."

The review application

1. The insurer's application for review of this determination was advanced by way of a written submission that the assessor's assessment: "was incorrect in a material respect since the assessor failed to properly consider the documentation provided in relation to the claimant's alleged right shoulder injury. The insurer submits that the Assessor Herald has failed to provide a clear path of reasoning for his determination of the right shoulder injury. Had Assessor Herald carefully reviewed the claimant's pre-accident medical history, he would have noted that the claimant's alleged right shoulder injury (Rotator cuff tear) is not causally related to the subject accident and arose due to the claimant's employment and degenerative conditions."
2. To support this the insurer relied on the February 2019 ultrasound result and the opinions of named treating doctors and specialists who had come to a different conclusion to that reached by the assessor.
3. Reference was made to what the specialist Dr Loefler had said in September 2018, that Mr Pinarbasi's history of persistent neck and shoulder pain was consistent with soft tissue injuries as the result of the bus accident. That the GP who later arranged and reviewed the ultrasound took the view that his shoulder pathology was more consistent with his driving duties, than the accident. A Dr Burrow took the view that there had not been an acute injury to the shoulder in the accident, but that there was a partial cuff tear consistent with a background degenerative condition, referring to a certificate of capacity provided by a Dr Maher in 2018. Associate Professor Minter in 2020 referred to Dr Burrow's opinion about inconsistent behavioural responses during examination of the shoulder and Dr Keller considered there had been a delayed onset of neck and back pain consistent with minor soft tissue strains. Dr Rosenthal concluded that changes seen in MRI scans were not related to acute trauma caused by the accident and that the reported tear in the shoulder was not caused by the accident.
4. The insurer's position was thus explained to be: "On pages 2 and 3 of his Certificate, Assessor Herald noted the insurer's prior submissions (which refer to the above reports) and briefly acknowledged that he has considered the documents provided in the application and reply. … Therefore, it is submitted that the subject application ought to be accepted because the President's Delegate can be satisfied that Assessor Herald's assessment is incorrect in a material respect and warrants referral to a Review Panel for further consideration."
5. The matters which the insurer advanced also included that the assessor had failed to give proper reasons for the decision reached. That was not accepted by the delegate and does not arise for consideration on this application, even though that could have been pursued by the insurer by way of judicial review.
6. Instead, it was pursued by the insurer in its review application, the gateway function permitting a consideration of whether there is "reasonable cause to suspect that the medical assessment was incorrect in a material respect": s 7.26(5) of the Motor Accident Injuries Act. But that was not accepted by the delegate.
7. In AAI Ltd v Fitzpatrick [2015] NSWSC 1108, the gateway function as then contained in s 63(3) arose for consideration. There it was not in issue that an assessor's failure to give required reasons was itself a sufficient basis for the delegate to have reached the conclusion that there was reasonable cause to suspect the assessment was incorrect in a material respect: at [99]. But that was not a conclusion which the delegate reached in this case and that has not been challenged by the insurer.
8. Instead, the delegate accepted what was otherwise raised by the insurer's submissions, complaint that the assessor had failed to address the "consistent opinions" which the identified doctors had expressed and on which the insurer had relied. The delegate concluding that this provided the required satisfaction "that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect".

The delegate thus erred

1. But addressing those consistent opinions was not the assessor's statutory task in relation to the medical dispute which had arisen to be assessed. As explained in Wingfoot at [47], that task was "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".
2. While the insurer did not refer in its submissions to the medical opinions on which Mr Pinarbasi had relied in his case, it must be inferred from the assessor's certificate that they were to different effect, given the medical dispute over injury to the shoulder which was being assessed. Otherwise, there would have been no "medical dispute" between the parties to resolve by the assessment.
3. In Marsh it was thus observed, given that only medical disputes are referred to assessors, that if there are no conflicting medical opinions, it is unlikely that a dispute will be referred to an assessor: at [63]. Further: "64 The existence of conflicting reputable medical opinions might well mean that the proper officer would inevitably have reasonable cause to suspect that a review panel might reach a different conclusion from the medical assessor. But that is not the question. The question is whether the proper officer is satisfied that there is reasonable cause to suspect material error by the assessor. Because the assessor's task is not to pronounce on the correctness of other medical opinion but to form his or her own opinion, it is necessary for an applicant under s 63(1) to persuade the proper officer of reasonable cause to suspect material error in the assessor's consideration, eg by the ignoring of important facts or not undertaking the assessment correctly, either procedurally or by not addressing the right questions (Meeuwissen v Boden at [22]). 65 The primary judge was correct in saying that it is not the role of the proper officer to choose between competing medical opinions (J[65]). Nor is that the role of the medical assessor. The proper officer did not mistake his role."
4. In the result it was concluded in Marsh that the appeal had to be upheld and the order referring the assessment to a review panel set aside. That having followed the incorrect "conclusion that because of conflicting medical opinion only one course was open to the proper officer" at [68]. Further, that because other doctors had earlier expressed a different opinion following their examinations than that arrived at by the assessor, did not mean that the proper officer ought to have had reasonable cause to suspect that the medical assessment under review was incorrect in a material respect: at [66]-[68].
5. A similar problem was thus raised here by the case which the insurer advanced by the submissions it made in support of its application for review of Mr Pinarbasi's medical assessment certificate.
6. What the insurer advanced by its review application was the existence of and the assessor's failure to agree with the medical opinions on which it had relied when advancing its case about the medical dispute, before the assessor. That alone could not give rise to the delegate's required conclusion that there was "reasonable cause to suspect that the medical assessment was incorrect on a material respect having regard to the particulars set out in the application".
7. The assessor's task had not been to adopt those on which the insurer relied or even to choose between the competing medical opinions. What the assessor was obliged to do was to form his or her own opinion on all the matters which arose to be considered on the cases which both parties advanced, including the results of his or her own examination of Mr Pinarbasi, in light of all the records which had to be considered, as well as the competing medical opinions on which the parties relied.
8. In the result I am satisfied that the delegate also fell into error in accepting that the assessor having reached a different opinion to that of the doctors on whom the insurer relied, provided reasonable cause to suspect that the medical assessment was incorrect in a material respect. For the reasons explained in Marsh, that complaint was not capable of providing a basis for the required statutory opinion.
9. It follows that the conclusion reached by the delegate is thus capable of explanation only on the ground of a misconception about the applicable law. It follows that the orders quashing the delegate's decision to refer the assessment to a review panel, which the insurer did not oppose, must be made.

Costs

1. In the event this conclusion was reached, Mr Pinarbasi wished to be heard on a costs order against the insurer. Costs are thus reserved and the parties are directed to confer on that question.

Orders

1. For the reasons given I order that: 1. The delegate's decision is quashed. 2. There be no order as to costs in relation to the President's appearance. 3. In the event that the parties wish to be heard on the question of costs they should approach within 14 days and if there is any dispute, file short written submissions about what lies in dispute. Otherwise consent orders should be filed. 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: 14 February 2023