NSWNSWSC

Zilic v QBE Insurance

[2025] NSWSC 11

Supreme Court of NSW|2025-02-04|Before: McNaughton J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2025-02-04

Before

McNaughton J

Catchwords

[2006] NSWCA 284 Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225
[2023] NSWCA 215 D'Ament v Allianz Australia Insurance Ltd [2019] NSWCA 201 Lou v IAG Ltd (2019) 101 NSWLR 606
[2019] NSWCA 319 Ming v Director of Public Prosecutions (NSW) (2022) 109 NSWLR 604
[2022] NSWCA 209 Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480

Source

Original judgment source is linked above.

Catchwords

[2006] NSWCA 284 Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225[2023] NSWCA 215 D'Ament v Allianz Australia Insurance Ltd [2019] NSWCA 201 Lou v IAG Ltd (2019) 101 NSWLR 606[2019] NSWCA 319 Ming v Director of Public Prosecutions (NSW) (2022) 109 NSWLR 604[2022] NSWCA 209 Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480

Judgment (14 paragraphs)

[1]

JUDGMENT

Shortly prior to 8:15am on 25 October 2016, the plaintiff, Elmedina Zilic, was injured when her Vespa motor scooter collided with a motor bike whilst she was on her way into the Sydney CBD. At the time of the incident, Ms Zilic had been working at a major bank, and was completing a Master of Laws at the University of Sydney.
Ms Zilic commenced proceedings in the District Court of New South Wales on 4 December 2019 against the compulsory third party ("CTP") insurer of the vehicle at fault, the first defendant ("the insurer"), pursuant to the Motor Accidents Compensation Act 1999 (NSW) ("MAC Act"). During the course of the proceedings, a dispute arose between Ms Zilic and the insurer as to whether the injuries she sustained in the accident give rise to a permanent impairment greater than 10%. This is a significant issue because s 131 of the MAC Act provides that no damages may be awarded for non-economic loss unless 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]

Further background

Shortly after the accident on 25 October 2016, at around 8:30am, Ms Zilic was transported by ambulance to the Royal Prince Alfred Hospital. On 31 October 2016, a discharge referral letter was issued by the Royal Prince Alfred Hospital. Under the admission summary of that document, the principal diagnosis in relation to Ms Zilic's injuries is listed as a "[l]eft foot degloving injury".
In a letter of plastic surgeon Dr Shagun Aggarwal, dated 25 November 2016, it is recorded that "[t]he graft has almost fully healed but [Ms Zilic] now has ongoing swelling and neuropathic pain in the foot". A further letter, dated 1 December 2016, records: "[…] Today on examination the graft on the dorsum of [Ms Zilic's] foot has almost completely healed, there remains a small 4-5mm area in the centre of the graft that is still healing. [Ms Zilic's] main concerns still surround cosmesis and the ongoing healing of the split skin graft. […] Interestingly [Ms Zilic] has also been complaining of burning and sharp pain that has been keeping her up at night. This is consistent with neuropathic pain and the distribution of the superficial peroneal nerve. […]"
Dr Aggarwal noted in a final letter, dated 6 February 2017: "Unfortunately, as you may be aware, [Ms Zilic] developed complex regional pain syndrome (CRPS) requiring treatment from the pain clinic at [the Royal Prince Alfred Hospital]."
On 10 May 2018, Ms Zilic instituted a CTP claim by submitting a "Motor Accident Personal Injury Claim Form" provided by the New South Wales State Insurance Regulatory Authority.
On 31 March 2020 and 22 July 2020, Ms Zilic's solicitors sought but failed to receive concessions from the insurer that the s 131 threshold was crossed. The plaintiff then applied to the State Insurance Regulatory Authority for an assessment of permanent impairment pursuant to ss 58(1)(d) and 60(1) of the MAC Act. Included in that application form, amongst other claimed injuries was "Psychiatric" injury, described as "Chronic adjustment disorder with anxiety and depressed mood". Medical records between the dates of 25 October 2016 and 20 November 2020 were attached to the application. From these records it is apparent that: 1. In June 2019, Ms Zilic was admitted as a patient at the Northern Beaches Hospital Mental Health Unit. In a letter, dated 24 June 2019, Dr Stephen Gibson, a doctor of the Royal Prince Alfred Pain Management Centre ("Pain Management Centre") recorded that "[Ms Zilic] had become overwhelmed with multiple stressors, including the CRPS left leg, but also financial issues and social stressors […]". This view was confirmed in a letter of Dr Matthew Holton, a psychiatrist at the Pain Management Centre, who then opined: "I think that [Ms Zilic] would benefit from being referred to a psychologist […]". 2. Two letters addressing Ms Zilic's psychological state were produced on 27 April 2018 and 17 April 2019 by a clinical psychologist at the Dee Why Psychological Health Centre. In the later letter, the clinical psychologist relevantly stated: "As you will be aware [Ms Zilic's] circumstances remain very challenging. She is dealing with extreme pain, the personal and financial consequences of her medical condition and in addition interpersonal and legal matters." 1. On 30 March 2020, Dr Anthony Dinnen, a consultant psychiatrist, examined Ms Zilic following the institution of her claim in the District Court. Dr Dinnen set out, under the assessment of impairment, his opinion that Ms Zilic was suffering from a "[c]hronic adjustment disorder with anxiety and depressed mood, consequent to physical disability and chronic pain, as described and recorded". He added that "[h]er condition is likely to persist and the prognosis is guarded. She requires ongoing psychological and psychiatric treatment, with the use of long-term antidepressant and antianxiety medication". 2. On 21 October 2020, Dr Graham Vickery, psychiatrist, assessed Ms Zilic. In the course of his report, he noted: "There is a relationship between Mrs Zilic's alleged psychiatric injury and disabilities and the alleged incident however this has occurred in the context of multiple personal stressors and a pre-existing vulnerability." As to his assessment of whole person impairment ("WPI"), he stated: "The diagnosis is Somatic Symptom Disorder (formerly Chronic Pain Syndrome) which is not utilised in the assessment of Whole Person Impairment. The Whole Person Impairment directly due to the accident is 0%." (Emphasis added.)

[3]

Certificate of assessment by Medical Assessor Wayne Mason

The plaintiff was medically assessed by Assessor Mason pursuant to s 61 of the MAC Act. Assessor Mason conducted the assessment on 12 April 2024 via video link and issued a certificate of assessment, including reasons, dated 14 April 2022.
In the course of his reasons, he noted the submissions made by Ms Zilic that her chronic adjustment disorder with mixed anxiety and depressed mood gave rise to WPI of 25%. He also noted the insurer's submissions that there was evidence of a pre-existing psychiatric condition consisting of depression in 2013 and anxiety in 2015. There was reference to multiple personal stressors and pre-existing vulnerability.
In the section recounting her history, Assessor Mason relevantly noted: "In general terms she experienced a series of adjustment disorders with mixed anxiety and depressed mood between 2010 and 2015 arising from difficulties in romantic relationships. Treatment consisted of a low dose of antidepressant medication prescribed by her GP and psychological counselling. She said she last used the antidepressant in early to mid-2015. […] In my opinion the prior psychological difficulties consisted of adjustment disorders with mixed anxiety and depressed mood which arose because of disappointments in romantic relationships, plus an experience of harassment by an unwanted suitor. While it is most likely these had largely settled due to her satisfactory relationship with [her current partner], I have apportioned for a pre-existing condition."
As to her current functioning, after setting out his assessment in relation to Ms Zilic's self-care and personal hygiene, social and recreational activities, travel, social functioning, concentration, persistence and pace, he stated the following in relation to "adaptation": "The claimant has been unable to return to work. She said she tried for 1 day and was defeated by pain. Since the development of anxiety and depression she believes she could not deal with work tasks and other people. She is not performing adequately as a mother, wife and homemaker. She no longer does the bookkeeping for her husband's new café. She is severely impaired from a psychiatric point of view."
Assessor Mason made the following comments about Ms Zilic's consistency: "Ms Zilic' presentation was internally consistent, consistent with the documentation provided and consistent with the diagnosis I have made. It was not consistent with the conclusion reached by psychiatrist Dr Vickery who diagnosed no psychiatric condition."
After providing a summary of his review of the relevant documentation, Assessor Mason stated: "I agree with the conclusion reached by psychiatrist Dr Graham Vickery that she has developed a Somatic Symptom Disorder (pain). I do not agree with his conclusion that there is no psychiatric condition. In my opinion she suffers from an Adjustment Disorder with Mixed Anxiety and Depressed Mood which is severe in intensity and chronic. In this regard I agree with the conclusions reached by psychiatrist Dr Anthony Dinnen, treating psychologist Ms Jo Gorrell, treating pain management psychiatrist Dr Matthew Holton and the psychiatric consultant at the Northern Beaches Hospital. I note that a number of psychiatrists have indicated the presence of cluster B personality traits. This refers to the claimant's tendency for intense emotional experience and expression, characteristics which have caused problems in the past. In my opinion this tendency was exacerbated by the subject motor accident. I do not believe a personality disorder diagnosis was possible prior to the motor accident. I believe these issues of emotional intensity and dysregulation are satisfactorily addressed under the diagnosis of a severe chronic Adjustment Disorder with Mixed Anxiety and Depressed Mood."
Under the heading "Causation and reasons", Assessor Mason stated: "The claimant had developed a Somatic Symptom Disorder (pain) as a consequence of the subject motor accident. This is the case whether she suffers from CRPS or simply from chronic pain. She was initially hopeful this could be cured and her psychiatric condition deteriorated greatly when this proved not to be the case. This in turn created a great deal of disruption in her life. She has been unable to continue with a valued job and university study which would have most likely led to career advancement. It has created difficulties for her in all of her relationships. It has also created difficulties for her in her ability to function as a mother. In my opinion her chronic and severe Adjustment Disorder with Mixed Anxiety and Depressed Mood has arisen secondarily to the ongoing Somatic Symptom Disorder." (Emphasis added.)
Assessor Mason certified that Ms Zilic's psychological injuries caused by the accident, including an adjustment disorder with mixed anxiety and depressed mood, chronic and severe, gave rise to a permanent impairment greater than 10%, that is 19%.

[5]

Review Panel

The Review Panel was convened, and Ms Zilic was re-examined via Microsoft Teams on 4 August 2023 by Medical Assessors Newlyn and Chew on behalf of the Review Panel. The Panel met again on 17 August 2023 to deliberate on the findings.
Submissions were received on behalf of the insurer and Ms Zilic. Relevantly, the insurer's submissions highlighted that Assessor Mason determined that Ms Zilic's chronic and severe adjustment disorder with mixed anxiety and depressed mood "arose secondary to her ongoing Somatic Symptom Disorder (pain)" (Emphasis in original). Ms Zilic's submissions also highlighted that the psychiatric diagnosis had arisen secondary to an ongoing somatic symptom disorder, that Assessor Mason's conclusion was formulated on this basis, and that this did not preclude him utilising the Psychiatric Impairment Rating Scale ("PIRS") to measure a disorder which is known under the Diagnostic and Statistical Manual of Mental Disorders ("DSM").
On 22 August 2023, the Review Panel issued a certificate of assessment, including reasons purportedly pursuant to ss 61 and 63 of the MAC Act. It stated: "The Panel revokes the certificate dated 14 April 2022 and issues a new certificate. The motor accident caused the following injuries which give rise to a permanent impairment of 0% which IS NOT GREATER THAN 10%: • persistent somatic symptom disorder with predominant pain." (Emphasis in original.)
The panel's reasons included the relevant law and guidelines, then a summary of both parties' submissions. The reasons then summarised the psychosocial history and pre-accident history of Ms Zilic.
In the course of summarising Ms Zilic's submissions, the Review Panel stated at [54]-[56]: "The Medical Assessor dealt with the insurer's suggestion that the claimant was dealing with only a somatic symptom disorder underneath the heading of Diagnosis and reasons on page 12 of his certificate. The Medical Assessor pointed out he agreed with Dr Vickery's diagnosis, but disagreed with his conclusion that there was no psychiatric condition. The Medical Assessor opined the claimant had a severe and chronic adjustment disorder with mixed anxiety and depressed mood. The Medical Assessor pointed out this matches Dr Anthony Dinnen's conclusion in his report dated 30 March 2020 and her treating doctors' reports. […]"
Further arguments of Ms Zilic were summarised. The documentation purportedly considered by the Review Panel was then listed.
The last main heading in the reasons was "Review Panel Findings". A series of sub-headings under this heading followed, including "Who attended the assessment", "Psychosocial history and pre-accident history" followed by a number of paragraphs; then "History of the motor accident" under which was one paragraph summarising the accident. This was followed by a sub-heading "History of symptoms and treatment following the motor accident" which, in four paragraphs, summarised the account given by Ms Zilic at the re-examination. Under the next sub-heading, "Details of any relevant injuries or conditions sustained since the motor accident", the following paragraph was set out: "There are no further diagnosed injuries or conditions. There have been further stressful events including relationship difficulties noted in some documentation as well as coping with a second pregnancy while caring for her young child."
Under the next sub-headings "Current status", "Mental state examination" and "Comments of consistency" there were single paragraphs again apparently referring only to the re-examination. Under the latter heading it was noted "There were no gross inconsistencies".
The next sub-heading was "Diagnosis and Reasons", under which the Panel stated: "Based on Ms Zilic's account, her presentation and review of provided documentation, her primary psychiatric diagnosis is persistent somatic symptom disorder with predominant pain. She presents with significant physical symptoms which are distressing and cause her significant disruption of her daily life. She has a persistently high level of anxiety about her symptoms. Her symptoms predominantly involve pain, are severe with marked impairment and of long duration (more than six months)." (Emphasis added.)
The last sub-heading was "Panel deliberations". Under this heading the following was set out: "The Panel discussed the re-examination findings on assessing Ms Zilic's mental and behavioural disorder in accordance with the Guidelines. The Panel decided it would adopt the re-examination report as evidence in its decision. The medically trained Members confirmed that the accident caused the diagnosed condition and that it was the most appropriate fit for the symptoms Ms Zilic displayed during the re-examination. It also fit the symptoms the Panel had seen in the clinical notes and reports the claimant and insurer provided. The Panel decided that the written material and the re-examination was sufficient to assess the claimant's psychological condition. The Panel also found there was no pre-existing impairment that could be deducted from any impairment assessment. Based on the high level functioning Ms Zilic displayed up to the time of the accident the Panel agreed the evidence did not support a symptomatic permanent impairment existing at the time of the accident. The examination caused the Panel to disagree with the Medical Assessor Mason's assessment that the accident caused Ms Zilic to have an adjustment disorder with mixed anxiety and depressed mood, which was chronic and severe. As the Panel had diagnosed persistent somatic symptom disorder with predominant pain it was unable to apply the PIRS in accordance with the Guidelines' clause 1.215. Accordingly the Panel could not attribute any psychological permanent impairment to the accident. Therefore the total permanent impairment is 0%. […]" (Emphasis added.)
By way of Amended Summons, Ms Zilic seeks relief from the whole of the decision pursuant to s 69 of the Supreme Court Act 1970 (NSW).
On 12 March 2024, the Commission and the Review Panel filed submitting appearances, save as to costs, in accordance with r 6.11 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). On 25 June 2024, the insurer, having changed its original position of support of the Review Panel's decision, also filed a submitting appearance, save as to costs, following receipt of Ms Zilic's amended outline of submissions.
Although the matter was originally set down for hearing on 30 July 2024, the parties agreed that the matter could be dealt with on the papers, and accordingly the hearing was vacated. Accordingly, there was no contradictor.

[6]

The Amended Summons

The Amended Summons seeks an order in the nature of certiorari or, alternatively, a declaration setting aside or declaring invalid the certificate and medicate assessment dated 22 August 2023 of the Review Panel purportedly made pursuant to ss 61 and 63 of the MAC Act; an order in the nature of mandamus remitting the medical assessment of Ms Zilic to a differently constituted review panel for determination of the matter according to law; and costs.
By email correspondence with my chambers on 25 July 2024, it was confirmed that no relief in the nature of prohibition or injunction was sought should I make the primary orders set out in the Amended Summons, and that the order now sought as to costs is that costs are reserved.
The grounds of review listed in the Amended Summons are that the Review Panel erred in the following respects: 1. Whilst considering the psychological effect on Ms Zilic of the motor vehicle accident on 25 October 2016, the Review Panel provided a "primary psychiatric diagnosis of persistent somatic symptom disorder with predominant pain" but did not consider whether the accident materially contributed to any other psychiatric diagnosis and thereby constructively failed to exercise the jurisdiction committed to it and, alternatively, erred in law on the face of the record. 2. It confined its consideration with respect to causation of injury to a "primary psychiatric diagnosis". The Review Panel adopted the wrong approach in law in that it wholly failed to take into account the presence of a secondary psychiatric disorder within the meaning of the Diagnostic and Statistical Manual of Mental Disorders (DSM) as required by the MAPIG dated 1 June 2018. This approach is wrong in law and connotes a constructive failure to exercise jurisdiction. 3. In limiting itself to its primary psychiatric diagnosis, the Review Panel failed to fully exercise its jurisdiction and fell into error by asking itself the wrong question. 4. It failed to apply or properly apply clauses 1.6, 1.7 and 1.213 of the MAPIG. 5. It failed to set out reasons or lawful reasons as it was required to do pursuant to s 61(9) of the MAC Act and so erred in law on the face of the record. 6. It failed to provide reasons for disagreeing with the findings of Assessor Mason's assessment that, inter alia, Ms Zilic's chronic and severe adjustment disorder with mixed anxiety and depressed mood had arisen secondarily to the ongoing somatic symptom disorder (pain). 7. It failed to deal with an argument clearly articulated in Ms Zilic's submissions in response to the review application by the first defendant that the presence of a somatic symptom disorder leading to an adjustment disorder with mixed anxiety and depressed mood did not preclude the use of the PIRS pursuant to clause 1.213 to assess WPI resulting from the secondary adjustment disorder with mixed anxiety and depressed mood.
Ms Zilic relies on the affidavit of Richard Dababneh sworn on 29 April 2024 which contains the decision under review and the documents that were before the Review Panel at the time of the decision.

[7]

The Motor Accidents Compensation Act 1999 (NSW) (the MAC Act)

As set out by Simpson AJA (Leeming JA and Macfarlan JA agreeing) in D'Ament v Allianz Australia Insurance Ltd [2019] NSWCA 201 at [8] - [13] in relation to the MAC Act: "The long title of the MAC Act is: 'An Act to establish a new scheme of compulsory third-party insurance and payment of compensation relating to the death of or injury to persons as a consequence of motor accidents; to amend the Motor Accidents Act 1988 and other Acts; and for other purposes.' Chapters 3 and 4 of the MAC Act provide a detailed mechanism for assessment of claims for compensation for injury alleged to have been suffered consequential upon motor vehicle accidents about which there is disagreement ("a medical dispute" - see s 57) between the claimant and the compulsory third party insurer of the relevant motor vehicle. A detailed account of the provisions can be found in previous decisions of this Court: see Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 per Beazley JA; Rodger v De Gelder [2015] NSWCA 211; (2015) 71 MVR 514 per Gleeson JA. I can therefore confine references to the provisions of the MAC Act to those which specifically arise in the present case. By s 131 damages may not be awarded for non-economic loss unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10 per cent. By s 44, the Authority may issue Guidelines with respect to a number of issues, including (relevantly) the assessment of the degree of permanent impairment of an injured person, and procedures for the referral of disputes for assessment or review of assessments, and the procedure for assessment and review of assessments. Permanent Impairment Guidelines issued on 1 October 2007 were provided to the Court ("the Guidelines"). They include specific reference to the assessment and permanent impairment claimed to have been caused by a motor accident where a subsequent impairment has intervened (cl 1.36). Part 3.4 of the MAC Act is directed to the medical assessment of injury. It applies to a medical dispute between a claimant and an insurer about, inter alia, whether the degree of permanent impairment of an injured person as a result of injury caused by a motor vehicle accident is greater than 10 per cent (s 58(1)(d)). Section 59 provides for the appointment of medical assessors, to whom medical disputes are referred for assessment (s 60) and who are required (s 61(1)) to give a certificate as to the matters referred for assessment. Although a certificate is, with some exceptions, conclusive evidence in any court or any medical assessment of the matters certified (s 61(2)), a matter previously referred for assessment may, by s 62(1)(a), be referred by any party to the medical dispute on one or more occasions for further assessment, but only on the grounds of deterioration of the injury or additional relevant information about the injury. That is further qualified by s 62(1A), which provides: (1A) A matter may not be referred again for assessment by a party to the medical dispute on the grounds of deterioration of the injury or additional relevant information about the injury unless the deterioration or additional information is such as to be capable of having a material effect on the outcome of the previous assessment. A party to a medical dispute that has been the subject of assessment under s 60 may apply to the proper officer of the Authority to refer the medical assessment to a Review Panel (s 63(1)). Such an application may only be made on the ground that the assessment was incorrect in a material respect (s 63(2)). If satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect the proper officer is to arrange for the application to be referred to a Review Panel of three medical assessors (s 63(3)). Such a review is not limited to the aspects of assessment said to be incorrect, but is to be by way of a new assessment of all matters with which the medical assessment is concerned (s 63(3A)). The Review Panel may confirm the certificate of the medical assessor or revoke the certificate and issue a new certificate (s 63(4)). By s 65 medical assessments are subject to relevant provisions of the Guidelines issued under s 44."

[9]

Grounds (a)-(c) and (g)

These grounds of review can be dealt with together. Collectively, the grounds combine to form the submission that the Review Panel erroneously limited itself to determining only Ms Zilic's primary diagnosis and did not consider whether the accident resulted in a secondary diagnosis which could amount to relevant permanent impairment. It is contended this amounts to a constructive failure to exercise jurisdiction.
Ms Zilic points to the decision of the Review Panel and, in particular, the diagnosis the Review Panel provided after re-examining her. The Review Panel stated: "Based on Ms Zilic's account, her presentation and review of provided documentation, her primary psychiatric diagnosis is persistent somatic symptom disorder with predominant pain." (Emphasis Added.)
In her submissions, Ms Zilic referred to the MAPIG effective from 1 June 2018. This version is applicable as it applies to motor accidents occurring between 5 October 1999 and 30 November 2017 (the instant accident having occurred between those dates on 25 October 2016). Clause 1.5 of those guidelines provides: "An assessment of the degree of permanent impairment is a medical assessment matter under Section 58 (1)(d) of the Act. The assessment must determine the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident. A determination as to whether the injured person's impairment is related to the accident in question is therefore implied in all such assessments […]".
Ms Zilic says the Review Panel did not assess the "degree of impairment" because it limited itself to only diagnosing the primary psychiatric condition caused by the accident when no such limitation is found in the statute or any delegated legislation or guidelines. It is further said that the Review Panel's description of the diagnosis as a "primary diagnosis" suggests there may be at least a secondary diagnosis that was not dealt with or considered.
In my view, there is substance to this submission.
As to what constitutes jurisdictional error, Kirk JA in Ming v Director of Public Prosecutions (NSW) (2022) 109 NSWLR 604; [2022] NSWCA 209 helpfully stated: "[…] Constructive failure to exercise jurisdiction arises where the decision-maker purports to have exercised the jurisdiction but in substance has not undertaken or completed the task of doing so because of failure to address some essential matter. That matter might, for instance, be a statutory precondition to the exercise of the power which it was necessary for the decision-maker to be satisfied of before the power is enlivened. Or it might be a critical argument raised by a party. […] A risk of this type of argument [(referring to Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26)] is that claims about failure to address matters can shade into claims about arguments having been resolved incorrectly because misunderstood, or not really grappled with, which tends towards merits or appellate review. Further, as discussed below, it is not necessary for judicial decision-makers to address every argument or every piece of evidence in delivering reasons. Hence the need to show that there has been a failure to grapple with a substantial, clearly articulated argument. That language has been reiterated by members of the High Court […] The failure to address an issue must be of such significance as to warrant a conclusion that the decision-maker has failed to complete the exercise of its power by reason of having failed to engage with an issue of importance to the matter being resolved." (Emphasis in original.)
Payne JA (Ward ACJ and Basten AJA agreeing) in Ceerose Pty Ltd v A-Civil Aust Pty Ltd (2023) 112 NSWLR 225; [2023] NSWCA 215 at [38]-[69] also provides another helpful exposition on jurisdictional error.
The first sentence of the Review Panel under the heading "Diagnosis and Reasons" referred in terms to Ms Zilic's "primary" psychiatric diagnosis of "persistent somatic symptom disorder with predominant pain". It is stated that this was based upon Ms Zilic's account, her presentation and a "review of provided documentation". It stated that the "diagnosed condition … was the most appropriate fit" for the symptoms Ms Zilic displayed during the re-examination, and it "also fit the symptoms the Panel had seen in the clinical notes and reports the claimant and insurer provided".
The Review Panel concluded this section of its reasons by stating "[t]he examination caused the Panel to disagree with Medical Assessor Mason's assessment that the accident caused Ms Zilic to have an adjustment disorder with mixed anxiety and depressed mood, which was chronic and severe". (Emphasis added.)
Although there is a reference to Assessor Mason's assessment of the secondary nature of the psychiatric condition in an early part of the Panel's reasons - in the section which purports to set out the competing submissions of the parties - there is simply no consideration of the "substantial, clearly articulated argument" centred around this issue in the portion of the reasons in which the findings and reasons of the panel are apparently explained.
The reasons made no reference to Dr Dinnen's diagnosis, why it was not accepted, nor why it was not appropriate to have regard to a consequential or secondary diagnosis. This issue was clearly raised in the expert material, in the course of the written submissions, and was clearly articulated in the reasons of Assessor Mason. Further, the Panel failed to analyse or determine the question, clearly raised by Ms Zilic in written submissions, of whether the presence of a somatic symptom disorder leading to an adjustment disorder with mixed anxiety and depressed mood precluded the use of the PIRS pursuant to clause 1.213 to assess WPI resulting from the secondary adjustment disorder with mixed anxiety and depressed mood. The presence of a secondary disorder was clearly articulated by Ms Zilic and required the Review Panel to deal with it. By limiting itself to the primary diagnosis and entirely failing to consider the critical issue of the secondary diagnosis when coming to its conclusion, the Review Panel constructively failed to exercise jurisdiction.

[10]

Ground (d)

The fourth ground is, in substance, similar to the grounds dealt with above. It is whether the Review Panel limited itself to only determining whether the primary injury was caused by the accident, rather than considering whether the accident contributed to the occurrence of a subsequent medical condition or conditions.
Ms Zilic again calls in aid the MAPIG, and in particular, cll 1.6-1.7: "Causation is defined in the Glossary at page 316 of the AMA4 Guides as follows: 'Causation means that a physical, chemical or biologic factor contributed to the occurrence of a medical condition. To decide that a factor alleged to have caused or contributed to the occurrence or worsening of a medical condition has, in fact, done so, it is necessary to verify both of the following: 1. The alleged factor could have caused or contributed to worsening of the impairment, which is a medical determination. 2. The alleged factor did cause or contribute to worsening of the impairment, which is a non-medical determination.' This, therefore, involves a medical decision and a non-medical informed judgement. There is no simple common test of causation that is applicable to all cases, but the accepted approach involves determining whether the injury (and the associated impairment) was caused or materially contributed to by the motor accident. The motor accident does not have to be a sole cause as long as it is a contributing cause, which is more than negligible. Considering the question 'Would this injury (or impairment) have occurred if not for the accident?' may be useful in some cases, although this is not a definitive test and may be inapplicable in circumstances where there are multiple contributing causes." (Emphasis in original.)
Clause 1.213 of the MAPIG is also relied upon, which states: "The impairment must be attributable to a psychiatric diagnosis recognised by the current edition of the Diagnostic & Statistical Manual of Mental Disorders (DSM) or the current edition of the International Statistical Classification of Diseases & Related Health Problems (ICD). […]"
Ms Zilic contends that the Review Panel, in limiting itself as outlined above, failed to grapple with whether its finding of "persistent somatic symptom disorder with predominant pain" in turn contributed to the occurrence of another recognised psychiatric condition. There was a complete absence of any analysis of the issue of the primary versus secondary diagnosis in the context of these apparently highly relevant clauses of the MAPIG; in my view, this constitutes jurisdictional error.

[11]

Grounds (e)-(f)

Grounds (e) and (f) are that the Review Panel failed to set out lawful reasons such that it erred in law on the face of the record.
Ground (e) refers specifically to s 61(9) of the MAC Act.
Section 61(9) reads: "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."
By failing entirely to set out its reasons for discounting the issue of the secondary psychiatric diagnosis, the Review Panel made an error of law on the face of the record.
Further, in failing to provide reasons for disagreeing with Assessor Mason's assessment that Ms Zilic's psychiatric condition had arisen secondarily to the primary condition, it failed to set out its actual path of reasoning.
The Review Panel is required to set out its "actual path of reasoning" that would enable a court to determine whether the reasons contain an error of law: Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [55]. That case states: "The standard required of a written statement of reasons given by a Medical Panel under s 68(2) of the Act can therefore be stated as follows. The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion."
Further, in accordance with Hall J's analysis in Allianz Australia Insurance Limited v Francica [2012] NSWSC 1577 at [17]-[18] (which also refers to Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284) in determining the adequacy of reasons it is important to determine "what was the issue; in other words, what was the precise battle ground between the parties before the determining tribunal" (Emphasis added). Ms Zilic submits, and I accept, that the "battle ground" here was whether or not Ms Zilic had sustained a recognised psychiatric disorder, and in particular an adjustment disorder as a result of the motor vehicle accident.
In support of this contention, Ms Zilic points to: 1. the fact that such a disorder was found by Assessor Mason; 2. Ms Zilic's submission before the Review Panel which addressed the insurer's contention that Assessor Mason had incorrectly found such a disorder; and 3. the diagnosis made by Dr Dinnen in the medico-legal report which was before the Panel (referred to above at [8(3)]) that Ms Zilic was suffering from a "chronic adjustment disorder with anxiety and depressed mood, consequent to physical disability and chronic pain".
The Review Panel did not explain why it came to the conclusion that Ms Zilic had sustained simply a somatic symptom disorder beyond stating that it had come to the conclusion based on the material before it and the re-examination of Ms Zilic, and that it was "the most appropriate fit" for Ms Zilic's symptoms. Given the clear issue in contention, this was wholly inadequate and failed to expose the reasoning of the Panel.
In recording: "The examination caused the Panel to disagree with Medical Assessor Mason's assessment that the accident caused Ms Zilic to have an adjustment disorder with mixed anxiety and depressed mood, which was chronic and severe." the Review Panel failed to provide any detail in relation to what aspect of the examination caused the Review Panel to disagree with the assessment of Assessor Mason.
I have examined the Review Panel's reasons carefully and can see no explanation or reasoning underpinning its conclusory statement that the examination caused the Panel to disagree with Assessor Mason's assessment.

Zilic v QBE Insurance - [2025] NSWSC 11 - NSWSC 2025 case summary — Zoe

Zilic v QBE Insurance

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (14 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (19)