Zadehfard v Allianz Australia Insurance Limited [2025] NSWSC 1423 | Case summary

Zadehfard v Allianz Australia Insurance Limited [2025] NSWSC 1423 | Case summary | Zoe

On 9 May 2022, the plaintiff was injured in a motor vehicle accident. He lodged a claim for “personal injury benefits” on 4 August 2022. He claimed that he sustained physical and psychological injuries in the accident – in particular, “injury to [his] lower back radiating down [his] hips and both legs”.
The first defendant, on 7 October 2022, accepted “liability for [his] claim for statutory benefits”. However, on 6 December 2022, the first defendant advised the plaintiff that his claim for “benefits ceased on … 7 November 2022”.
The plaintiff consulted a neurosurgeon and spinal surgeon, Dr Peter Khong, on 11 August 2022, 20 January 2023 and 24 March 2023. Relevantly here, Dr Khong expressed the opinion: that reasonable treatment options included “analgesia, physiotherapy, steroid injections and surgery”; and that, given the plaintiff had “failed non-operative management options” and steroidal injections were “unlikely to give him long-term pain relief” for the treatment of his “persistent lower back pain, surgery is reasonable”. Dr Khong also expressed the opinion that surgery was “necessary because [the plaintiff] has had persistent severe back pain for 10 months since his accident” and recommended that he undergo an L5/S1 anterior lumbar interbody fusion.
The plaintiff qualified a consultant orthopaedic surgeon, Dr Anil Nair, for the purposes of his claim, who prepared a report dated 19 September 2023. Relevantly here, Dr Nair expressed the opinion that the plaintiff suffered from “significant alteration in the patho-anatomy of the L5/S1 intervertebral motion segment” and he agreed with the opinion expressed by Dr Peter Khong – namely, “that an L5/S1 anterior lumbar interbody fusion is likely to restore the anatomy of the L5/S1 motion segment and improve symptoms”.
The plaintiff desired to undergo that surgery. He submitted a claim to the first defendant and invited it to accept liability for the cost of him undergoing that procedure.
By letter dated 14 December 2023, the first defendant advised the plaintiff that his request “for approval [to undergo the surgery] has not been accepted”.
The plaintiff sought an internal review of this decision, which was undertaken on 3 January 2024. The internal review affirmed the “decision to decline liability for the L5/S1 anterior lumbar interbody fusion”. The basis for that affirmation was the acceptance that there was no nexus between the symptoms in the plaintiff’s lumbar spine and the motor vehicle accident. That conclusion was reflected in the statement of the review that there was “significant medical evidence”, that confirmed the plaintiff had “a pre-existing injury to [his] lumbar spine and therefore the request [was] not considered causally related to the subject motor vehicle accident”. It was also reflected in the statement by the reviewer that the plaintiff’s symptoms in his lumbar spine were not “a result of the subject motor vehicle accident but, rather, pre-existing and/or due to the degenerative disc disease” such that the “request for the lumbar fusion [was not] causally related to [the] injury sustained as a result of the subject motor vehicle accident” (CB 31).
The plaintiff, being dissatisfied with this outcome, filed an application (Form M01 – Medical assessment) with the Personal Injury Commission (‘the Commission’) on 25 September 2024. The application, which involved the applicant selecting the appropriate “box” on the form that identified the issue(s) in dispute, identified the dispute as: “Treatment and care reasonable and necessary”. Other possible selections – which were not selected – were: “Treatment and care relates to the injury caused” and “Treatment or care will improve recovery”.
It was common ground that the dispute that had arisen was a “medical assessment matter” (see Schedule 2, cl 2(b) of the MAI Act) and that what constitutes “whether any treatment and care provided or to be provided … is reasonable and necessary” in the circumstances was not defined in the MAI Act or in any statutory instrument made under it.
The plaintiff filed written submissions, dated 25 September 2024, in support of his claim. The submissions stated, inter alia, that the application sought a determination that the surgery “is reasonable and necessary treatment and care and that the need for surgery is as a result of the subject accident”.
The first defendant also filed submissions, dated 11 October 2024, in support of its decision to decline liability for the surgery. However, as confirmed during submissions in this Court, it did not secure its own expert medical evidence to respond to the reports from Dr Khong and Dr Nair, and the opinions expressed by them as to the reasonableness and necessity of the lumbar surgery.
The first defendant’s submissions before the medical assessor included an argument that “any requirement for surgery relates to pre-accident factors including the injury the [plaintiff] sustained to his lumbar spine in a 2015 accident in which he made a CTP claim”, a matter that was said to be borne out by the contention that “there was no relevant change in the imaging”. A further argument raised by the first defendant was that the “proposed surgery [was] not reasonable and necessary, having regard to the nature of the [plaintiff’s] lumbar pathology”. In relation to this last matter, the first defendant submitted that the plaintiff’s “current symptomatology [was] the result of the degeneration of the injury sustained in the 2015 accident” and that Dr Khong’s recommendation that the plaintiff undergo surgery was to relieve “low back pain” and not “to alleviate any radicular symptoms”. In those circumstances, the first defendant submitted that “such significant surgical intervention is not reasonable and necessary in the circumstances”.

As earlier noted, the plaintiff argued that procedural unfairness resulted from the way the medical assessor determined the absence of reasonableness and necessity for the spinal surgery. The plaintiff’s essential argument was that the medical assessor’s treatment finding involved a consideration of, and reliance upon, matters that were beyond the parameters of the dispute between the parties leading to the rejection of his claim. Given that approach, the plaintiff submitted that procedural fairness was denied to him because the medical assessor failed to provide him with the opportunity to deal with such matters by evidence and/or submissions (plaintiff’s submissions at [14], [38], [44]).
As was put during submissions by Mr Robinson SC, broadly two matters came “out of the blue” – and were: first, the finding that “substantial” and/or “considerable” controversy existed for a spinal fusion to be undertaken in the circumstances and that the “chance that such surgery will lead to a significant improvement in symptoms is in the region of 30% … [and therefore] on the balance of probability [sic] it is unlikely to be successful”; and, secondly, the acceptance that there “is significant public policy recommending against and trying to regulate such surgery” (plaintiff’s submissions at [15]). It is convenient, in what follows, to describe these as the “challenged matters”.
In relation to the challenged matters – viz., individually described in submissions (and what follows) as the “prospects of success of the surgery” and the nature of “medical opinion or public policy” regarding the surgery – the following should be noted. First, as the plaintiff submitted, the first defendant’s submissions were entirely “silent on th[ese] issue[s]”. Secondly, it is worth recalling, as was confirmed during the hearing in this Court, that the first defendant did not retain its own expert to respond to the opinions expressed by Dr Khong and Dr Nair. Thirdly, the medical assessor did not identify the evidence or material he relied upon to make the findings he did. Fourthly, the plaintiff submitted that these findings – the challenged matters – were material to the medical assessor’s decision to refuse his claim. They were unquestionably of that character and the first defendant did not suggest to the contrary.
The first defendant contested that the medical assessor’s decision was invalid for want of procedural fairness. It argued that there was “no error in assessing a matter beyond the scope of the dispute between the parties” because these matters “were relevant and inherently arose for consideration when performing the statutory task” (first defendant’s submissions at [32]).
The foundation for this argument was its contention that whilst the scope of a medical dispute turns upon the actual dispute between the parties, they cannot constrain the medical assessor discharging the “essential elements of the statutory task” (first defendant’s submissions at [24]). On this argument, despite the first defendant not putting the challenged matters in issue before the medical assessor (or adducing evidence about them), it was simply unnecessary for them to do so: that was because the issues about “the prospects of success of the surgery” and the “nature of medical opinion or public policy regarding the surgery” were a necessary incident of the statutory test “and the authorities interpreting that test” (first defendant’s submissions at [28], [30]). The result, therefore, was twofold: first, there “was no error in [the medical assessor] assessing the matter beyond the scope of the dispute between the parties”; and, secondly, procedural fairness did not require anything further because these issues were “plainly open on the known material” and it was “perfectly clear” that the medical assessor would consider them (first defendant’s submissions at [32], [35]-[36]).
The parties, as noted, argued the matter on the basis that the single ground of review related to whether procedural fairness was denied to the plaintiff, albeit that the nature of their dispute was relevant to the consideration of that ground. Given that approach, it is useful to first address aspects of the arguments about the medical dispute before considering whether procedural fairness was afforded to the plaintiff.

Three matters should presently be noted about the first defendant’s argument. First, the decision in Mills did not concern the way and manner in which the parties to a medical dispute can confine its ambit (and its effect upon the medical assessment process when they do), but whether there could be a referral (under the predecessor motor accident scheme) to assess the degree of permanent impairment resulting from an injury without that referral including the issue of causation. An analogy might be, say, a situation where the Commission only referred whether treatment was necessary, rather than reasonable and necessary. That is not what occurred here. Secondly, although argued to be responsive to the plaintiff’s essential complaint, properly understood, it does not: the plaintiff’s argument did not involve any suggestion of limiting “essential elements of the statutory task”, but was directed to the way a medical assessor should approach resolving that dispute when the parties have limited its ambit. Thirdly, given the argument, whether – and if so to what extent – there is any purpose or utility in the parties confining aspects of their medical dispute remains unclear; none were identified in submissions.
The next step, which was the centrepiece of the first defendant’s argument, was the suggested corollary to the first – viz., given the parties cannot limit the medical dispute in a way that constrains the medical assessor in discharging their “statutory task”, it necessarily follows that everything is in issue, and the parties need to approach the medical assessment process on that basis, regardless of whether they have previously refined those issues. Following this argument through, because the “prospects of success of the surgery” and the “nature of medical opinion or public policy regarding the surgery” were “relevant” to the ultimate question as to whether the proposed surgery was reasonable and necessary, it was unnecessary “that those considerations be specifically put in dispute by the parties” (first defendant’s submissions at [28]-[30]).
It is necessary to address aspects of this argument.
It may be accepted that the parties cannot constrain the medical assessor forming their own opinion on the medical dispute referred to it – here, the ultimate question about whether the proposed surgery was reasonable and necessary. The plaintiff did not suggest to the contrary and, as I have mentioned, that is not his complaint. However, to the extent the first defendant suggested an extension to this, submitting by analogy that constraint applies to “issues” and “considerations” relevant to the ultimate question, I entertain some doubt. No authority was cited, nor was the submission developed: amongst other issues, the consistency of this argument with the holding in Mandoukos would require careful consideration. Undoubtedly issues, such as those that are in dispute in the present application, are relevant to the statutory test – here, whether the proposed surgery was reasonable and necessary – but plainly those matters are not the statutory test itself, nor the ultimate question for the medical assessor. In the end, it is unnecessary to further consider this wider submission – and its ramifications – because the positions are, I consider, reconcilable – as I next explain.
Contrary to what the first defendant argued, even if the parties – despite limiting the ambit of their dispute – cannot constrain the medical assessor in forming their own opinion on the “statutory task”, I do not accept that it necessarily follows that everything in the medical dispute is, or should be understood to be, in issue. Nor do I accept that a medical assessor is unconstrained in the performance of their functions: they must discharge those functions in accordance with the provisions of the MAI Act and the general law.
Thus, ordinarily, the application, the evidence adduced in support and the submissions prepared by the parties establish and define the parameters of the dispute. As explained in Mandoukos at [73] and [78], that may encompass any and every aspect of the medical assessment matter, but it need not. There is no necessary incompatibility between the parties narrowing the nature and extent of a medical dispute and the medical assessor discharging their functions and forming their own opinion on that dispute. That is because, if a medical assessor proposes to resolve a matter outside the ambit of the dispute as narrowed by the parties, then the fairness in them doing so would squarely arise for their consideration and condition the exercise of their functions: Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [47].
It is to that issue that I now turn.

The parties adopted competing positions on whether these requirements had been met: adopting the language of Alphaone – which the parties largely did – the arguments turned upon whether the challenged matters were “open on the known material”.
The plaintiff argued that, given the position adopted by the first defendant, he was unaware and could not reasonably anticipate the matters raised by the medical assessor – they were not, therefore, matters that were “obviously … open on the known material”.
The first defendant, on the other hand, advanced two arguments to the opposite effect. The first argument was a repeat of the earlier one, directed to the inability of the parties to bind the medical assessor when they discharge the “essential elements of the statutory task”. On this argument, given the challenged matters were relevant to whether the proposed surgery was reasonable and necessary, it “ought to have come as no surprise” to the plaintiff that the medical assessor would consider the challenged matters in forming his opinion. The second argument was that, given the first defendant had not accepted that the proposed surgery was reasonable and necessary, the challenged matters were “plainly open on the known material” and the plaintiff should have approached the medical assessment on the basis that essentially everything was in issue, and could not complain that procedural fairness was denied to him if he did not.
I will first address the first defendant’s (second) argument – namely, that it had not conceded, but had put in issue, that the surgery was reasonable and necessary.
It is necessary to give some context and meaning to this submission – which was advanced, not in the first defendant’s written submissions filed in this Court, but during oral submissions at the hearing. As earlier noted, the position of the first defendant, in its written submissions, was that it accepted that the challenged matters were “beyond the scope of the dispute between the parties”: see [34], above. (The consistency between the written and oral submissions was not addressed and will be put to one side).
Whilst I accept that, in a limited way, the first defendant challenged the reasonableness and necessity of the proposed surgery, I do not accept – as appears to be submitted – that it adopted the stance that every issue that might inform whether the proposed surgery was reasonable and necessary was contested. That it did not do so is consistent with the written submissions it prepared and submitted for consideration by the medical assessor and the medical assessor’s characterisation of its position in relation to the treatment dispute: he identified the first defendant’s submissions as, relevantly, involving the contentions that the “pathology [in] the lumbar spine was a pre-existing condition and that the recommendation for lumbar fusion is not causally related to the injuries sustained as a result of the subject motor vehicle accident”: see [23], above. That characterisation, which was not challenged by the first defendant, confirmed the nature of the medical dispute “in fact” before the medical assessor.
Additionally, although that characterisation was not challenged, it is unsurprising that the medical assessor identified the first defendant’s position about the issues for determination in that way, given the terms of the first defendant’s written submissions prepared for the medical assessment. Thus, as earlier noted, the first defendant’s arguments included that: the plaintiff’s “current symptomatology is the result of the degeneration of the injury sustained in the 2015 accident”; that the surgery was only recommended “to relieve low back pain”, and not to alleviate “any radicular symptoms”; that in those circumstances, the surgery was “not reasonable and necessary” having “regard to the minimal discal pathology evident”; and that, to the extent surgery “is found to be reasonable and necessary”, it was “a result of the degeneration of the injury [the plaintiff] sustained in the 2015 accident”. The submissions did not raise any of the challenged matters, as the first defendant accepted, nor did it squarely raise that it was putting in contest all issues relating to whether the proposed surgery was reasonable and necessary. Thus, although not seeking to rely upon anything in its written submissions before the medical assessor as raising these matters as issues, the first defendant nevertheless submitted that merely raising a suggestion in broad terms – “it’s not reasonable and necessary” – would itself be sufficient to put “everything in dispute”. I do not accept that submission. I do not consider the mere assertion that treatment is not reasonable and necessary – untethered to precisely why – can reasonably be characterised as putting a matter in issue in a medical dispute, nor does merely contesting or not admitting the general issue, in and of itself, amount to this.
The first defendant’s related submission, to the effect that it was inevitable that the various considerations – said to derive from the decision in Diab v NRMA [2014] NSWWCCPD 72 – would form part of the medical assessor’s assessment of the dispute, does not arise given the medical assessor’s characterisation of the dispute in fact, and my assessment of it. In any event, I would simply note that the first defendant’s submissions to the medical assessor neither referred to that decision, nor did those submissions address the various matters that were said to be established by it as potentially relevant to whether the proposed treatment was reasonable and necessary.
It follows that I do not accept the first defendant’s second argument. Nor do I accept its first, for the following reasons.
If the parties choose to narrow issues in the medical dispute, then I do not consider that the medical assessor is free to simply depart from how the parties have approached that dispute: see [48], above. However, that is what occurred here: the medical assessor, having identified the competing contentions of the parties and thereby identified the ambit of the dispute, proceeded to determine the matter without regard to their approach.
The difficulty with what occurred can be illustrated by reference to the “public policy” consideration relied upon by the medical assessor. Public policy considerations may possibly be relevant, as both parties accepted. But there may well be – as there was here – a live contest about its suggested existence and what was apparently reflected in that “public policy”. The plaintiff submitted that he was unaware of it. The medical assessor did not identify how he discerned it. Neither Dr Khong nor Dr Nair referred to it, and it may be (given their opinions on the surgery) that both would or might be surprised by, and contest, its suggested existence. To be clear, I do not accept that this issue was, as the first defendant submitted, somehow, a matter of “common knowledge”, and therefore its use by the medical assessor was unexceptional. Nor do I accept that it was, somehow, “obvious” given the approach of the parties to the medical dispute or even considering what the first defendant submitted was the “statutory task”.
Similar issues arise in relation to the “[s]ubstantial controversy” or “considerable controversy” about lumbar surgery in the present circumstances and the assessment of its prospects of resulting in significant improvement. In relation to this matter, it is to be remembered that the plaintiff’s expert evidence – from an orthopaedic surgeon and a neurosurgeon and spinal surgeon – supported the reasonable need for it and the first defendant did not obtain expert evidence to respond to these opinions. However, the medical assessor considered the fact that the prospect of a successful outcome was 30% – precisely where this came from is, the plaintiff submitted, unknown – was a factor that stood against the reasonableness and necessity of the surgery. The likelihood of surgery being “successful” was accepted by the parties to be a relevant matter for consideration. However, it is by no means a black-and-white issue: success has gradations and sometimes – not always, of course – a patient in particular circumstances may (reasonably) choose to undergo that surgical procedure, notwithstanding those prospects, or the risk, that it may not prove to be fully successful. Given the approach of the parties, including (as I have earlier noted) the fact that the first defendant accepted that it did not raise this matter as an issue in their dispute, I am unable to accept that it was “obvious”. Nor do I accept it is of this character considering the “statutory task”.
Here, as I have earlier noted, the first defendant did not suggest that the challenged matters were immaterial to the way in which the medical assessor resolved the medical dispute. Their materiality is clear. Each of them was a critical issue upon which the medical assessor relied to reject the plaintiff’s claim. They were not, however, “obviously … open on the known material” given the way the issues in the medical dispute had been refined by the parties, nor were they of that kind given the nature of the “statutory task”.
In those circumstances, by failing to afford the plaintiff an opportunity to address the challenged matters by evidence and/or submissions, the medical assessor denied him procedural fairness.
An error of that kind is jurisdictional. The plaintiff is entitled to the relief he seeks, including that it be remitted for redetermination in accordance with law by a different medical assessor: see Insurance Australia Limited trading as NRMA Insurance v Trkulja [2023] NSWSC 956 at [116], and the authorities there cited. The interests of justice plainly require that a different medical assessor determine the medical dispute, particularly given the nature of the error. No contrary submission was put by the first defendant.

Zadehfard v Allianz Australia Insurance Limited

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

JUDGMENT

Introduction

The extension of time

Background

The procedural history

The referral to the medical assessor and the medical assessment

The review application

The ground of review: whether the medical assessment was procedurally unfair

Introduction

Discussion and consideration

The “dispute”

Procedural fairness

Orders

Parties

Legislation Cited (6)

Cases Cited (6)

Cited By (1)