AAI Limited t/as AAMI v Phillips

[2018] NSWSC 1710

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

AAI Limited t/as AAMI v Phillips [2018] NSWSC 1710

Hearing dates:

24 April 2018 & 18 June 2018

Date of orders:

13 November 2018

Decision date:

13 November 2018

Jurisdiction:

Common Law

Before:

Davies J

Decision:

(1) A declaration that the Certificate of the Third Defendant dated 17 August 2017 relating to a motor accident on 24 October 2012 (for which the First Plaintiff is the third party insurer) is affected by jurisdictional error.

 

(2) A declaration that the Certificate of the Third Defendant dated 17 August 2017 relating to a motor accident on 16 July 2012 (for which the Second Plaintiff is the third party insurer) is affected by jurisdictional error.

 

(3) An order in the nature of mandamus remitting the matter to the Second Defendant to be determined in accordance with law.

 (4) The First Defendant is to pay the Plaintiffs' costs of these proceedings.

Catchwords:

ADMINISTRATIVE LAW – judicial review - assessment of causation of neck injury by Motor Accidents Medical Assessment Service Review Panel – whether misapplication of principles of causation disclosed jurisdictional error – whether proposed surgical treatment is related to injury caused by one or more of three motor accidents – where Panel found that mild soft tissue injuries did not materially contribute to chronic degeneration but nevertheless found that proposed surgery related to accidents causing those injuries – where Panel did not make determination in respect of submissions about the persistence of symptoms of those injuries – Panel yet to determine related question of whether proposed treatment reasonable or necessary

  ADMINISTRATIVE LAW – prerogative writs - certiorari – need for reviewed decision to have apparent legal effect or to affect rights – declaratory relief available in circumstances where Panel decision did not have immediate legal effect

Legislation Cited:

Civil Liability Act 2002 (NSW) s 5D
Civil Procedure Act 2005 (NSW) s 56
Motor Accidents Compensation Act 1999 (NSW) ss 57, 58, 60, 83
Uniform Civil Procedure Rules 2005 (NSW) r 59.10

Cases Cited:

AAI Ltd trading as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229
AB v Judicial Commission of New South Wales (Conduct Division) [2018] NSWCA 264
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10
Allianz Australia Insurance Ltd v Cervantes (2012) 61 MVR 443; [2012] NSWCA 244
Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26
Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149; [1996] HCA 44
Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1
Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22
Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43

Category:

Principal judgment

Parties:

AAI trading as AAMI (First Plaintiff)
Insurance Australia Ltd t/as NRMA Insurance (Second Plaintiff)
Erroll Phillips (First Defendant)
State Insurance Regulatory Authority (Second Defendant)
A Review Panel appointed by the State Insurance Regulatory Authority (Third Defendant)

Representation:

Counsel:
K P Rewell SC (First & Second Plaintiffs)
A Canceri (First Defendant)
Submitting appearances (Second & Third Defendants)

  Solicitors:
Moray & Agnew (First & Second Plaintiffs)
CMC Lawyers (First Defendant)
Crown Solicitors Office (Second and Third Defendants)

File Number(s):

2017/348070

Publication restriction:

Nil

Judgment

1. The first defendant sustained injuries in three motor vehicle accidents. The first accident was on 4 June 2010 in respect of which Zurich Australian Insurance Ltd was the insurer. The second was on 16 July 2012 in respect of which the second plaintiff, Insurance Australia Ltd t/as as NRMA Insurance was the insurer. The third accident was on 24 October 2012 in respect of which the first plaintiff, AAI Ltd t/as AAMI, was the insurer.

2. The second defendant which is the regulatory authority, and the third defendant which is the medical Review Panel (the Panel) who made the assessment, filed submitting appearances.

3. The first defendant alleges that he suffered injuries to his cervical, thoracic and lumbar spines, and both shoulders, caused by each accident. In June 2016 the first defendant was referred to Dr Ralph Mobbs, a neurosurgeon, who recommended that he undergo an anterior surgical decompression and fusion at the C5/C6 level.

4. The present proceedings concern a decision by the Assessor, Dr Meakin, on 14 March 2017 and upheld by the Panel in three certificates given on 17 August 2017, that surgery proposed by Dr Mobbs was causally related to the second and third accidents but not the first accident.

5. The plaintiffs appeal against the Panel’s certificates in relation to the accidents on 16 July 2012 and 24 October 2012 on three grounds:

(1)   The Panel applied the wrong test of causation;

(2)   The Panel failed to provide adequate reasons; and

(3)   The Panel failed to engage with the plaintiffs' arguments as to causation.

The decision of the Review Panel

6. The Panel’s decision was a lengthy one. It involved a review of a very large number of earlier assessments and medical and other reports. Having set out a summary of all of those documents the Panel provided its reasons for determining that any need for the neck surgery was caused by the accidents of 16 July and 24 October 2012 and not by the accident of 4 June 2010. The Panel said:

C.   Panel Deliberations

The Panel discussed the information contained within the multiple, voluminous documents.

The Panel decided that there was minimal evidence linking the occurrence of a neck injury to the initial motor accident on 4/6/10. The documents clearly indicate that the claimant's main complaint immediately afterwards was thoracolumbar (back) pain. The claim form noting neck pain for this accident is not completed until 16/8/10 (two months later) whilst the medical certificate completed on 4/6/10 does not refer to the neck at all. The contemporaneous GP records also do not refer to any neck pain after the accident 4/6/10. A pictogram from the physiotherapy records on 20/7/10 specifically indicates no shading of the neck whereas there is shading of the shoulder girdles and thoracic spine.

The physiotherapist's letter (Richardson 2014) cited above, (retrospectively) refers to complaint of neck pain during July 2010, at odds with the pictogram 20/7/10 having no shading about the neck.

Thus, there is no evidence of any neck symptoms prior to 20/7/10, approximately seven weeks after the initial subject accident despite the claimant's attendance at the GP and physiotherapist. The GP records are difficult to decipher although there is probable mention of neck pain on 29/7/10, again, several weeks after the initial subject (2010) accident. By August 2010, the physiotherapy records make regular mention of neck pain.

Neck pain became more prominent after the right shoulder surgery in late 2011, and there was a request made in April 2012 for the physiotherapist to treat a painful neck. The claimant also told Assessor Pierides that neck symptoms developed particularly after the 2011 right shoulder surgery.

This being the case, the Panel could not make any causal linkage between the delayed onset of neck pain 6-7 weeks after the subject 2010 accident, and that accident. Whilst contemporaneous evidence is not determinative, the Panel notes that the claimant was regularly seeing his GP from the time of the initial motor accident in June 2010, and had there been a neck injury, the symptoms of this would have been mentioned to the doctor and recorded, at the same time as those noted in the thoracolumbar spine.

The Panel noted that it was clear that the claimant had suffered from neck pain during late 2010, 2011 and 2012 prior to the second subject accident on 16/7/12.

In early 2012, the physiotherapy records indicate that neck pain was very substantial. Looking at the totality of the records, the Panel was uncertain whether the claimant's neck condition would be any different now, but for the occurrence of the subject 16/7/12 and 24/10/12 accidents. There were well-established, severe neck symptoms, which were ongoing, immediately prior to the second subject accident on 16/7/12, persisting thereafter and remaining significant until the third accident on 24/10/12, ongoing to present date.

Notwithstanding, the Panel found clear contemporaneous evidence within the documents of increased neck symptoms after the subject accident on 16/7/12 (medical certificate) and also the third subject accident on 24/10/12 (medical certificate).

The Panel also noted that the said accidents 16/7/12 and 24/10/12 were minor, in that the ambulance and police did not attend. The ambulance and police also did not attend the initial subject accident in 2010. Further the claimant has been able to continue working after the subject accidents.

The Panel noted that claimant's neck scans had shown significant degenerative changes which became symptomatic in July 2010 (well after the initial subject 2010 accident) with symptoms ongoing, these neck symptoms being aggravated by each of the subject accidents in 2012.

The Panel accepted that the claimant had sustained mild soft tissue injuries of the neck, superimposed on chronic underlying degenerative changes due to each of the 2012 subject accidents. Further, the records indicate that the claimant was psychologically distressed. The Panel noted too that the claimant had a long and complex history of pain problems in various body parts, predating the subject accidents.

In summary, the Panel accepted there had at the very most been mild soft tissue injuries of the neck due to the subject accidents occurring 16/7/12 and 24/10/12 with documented increase in neck symptoms after each of these. However, the claimant's main problem was significant, long-standing degenerative change in the neck, associated with axial (neck) pain.

The Panel does not consider that the subject 2012 accidents have resulted in any structural changes to the cervical spine that would warrant such major neck surgery being fusion and decompression. The Panel strongly suspects that the advent of these 2012 accidents more likely than not has not resulted in any substantive change of neck condition and certainly not one which could warrant cervical fusion and decompression. The Panel thought it highly likely that the claimant would have severe neck pain even if the subject motor accidents in 2012 had not occurred, given the reported severe neck symptoms in early 2012 when additional physiotherapy was requested. However, the Panel concedes that this is difficult to confirm.

Having found mild neck injuries due to the 16/7/12 and 24/10/12 subject accidents with attendant increase in neck symptoms, the Panel concluded that the proposed neck surgery (cervical decompression and anterior fusion) is related to the mild neck injuries sustained in both of the subject 2012 accidents, although the Panel considered that the recommended neck surgery would be very ill-advised for reasons below.

Of great importance, the Panel noted that none of the medical assessors had demonstrated any neurological abnormalities in the upper limbs to indicate presence of cervical radiculopathy (nerve root compression) or else upper and lower limbs to indicate cervical myelopathy. A cervical spinal decompression is typically done radiculopathy (which the claimant does not have.)

The claimant suffers predominantly from axial neck pain without the clinical signs of either radiculopathy (nerve root compression) or myelopathy (spinal cord compression). The proposed surgery is generally indicated for patients having radiculopathy, (or else myelopathy) which the claimant does not have.

The Panel also noted that the proposed neck surgery targets only a single (C5-6) level whereas the claimant's neck scans indicate that there are multilevel degenerative changes, rendering surgery targeting just one level, highly unlikely to be effective with respect to symptomatic relief. The Panel strongly cautions that a single level cervical fusion in the clinical circumstances will highly likely be ineffective, as well as carrying risk of significant side effects and complications.

The Panel also highlights that the treating surgeon himself (Dr Mobbs) has indicated that there are no guarantees of success with the proposed surgery, and surgical results would be "unpredictable". The Panel also notes that targeted neck injections to the C5-6 level (proposed site of surgery) by Dr Yu, the pain physician did not provide the claimant with any symptomatic relief, further militating against the likely benefits of the proposed neck surgery.

Injuries

For all three subject motor accidents, the Panel only considered causation of the claimed neck injury, given that the neck injury was the only relevant injury, in light of the treatment dispute involving proposed neck surgery.

4.   Panel Decision (Subject Accident 4/6/10)

The Review Panel found that the accident was NOT a cause of the following claimed injuries:

• Neck - soft tissue injury

In respect of the dispute as to whether C5-6 decompression and anterior fusion is related to the injuries caused by the 2010 accident, the panel considered that the proposed surgery is not related to the subject accident because there was no neck injury caused by the subject 2010 accident.

Related Treatment

The Review Panel agrees that the Related Treatment certificate in relation to the accident 4/6/10 issued by Assessor Meakin is confirmed.

Panel Decision (subject Accident 16/7/12)

The Review Panel found that the accident WAS a cause of the following claimed injuries:

• Neck - soft tissue injury, aggravation of underlying degenerative change

In respect of the dispute as to whether C5-6 decompression and anterior fusion is related to the injuries caused by the 16/7/12 accident, the panel considered that the proposed surgery is related to the subject accident given the increased neck symptoms immediately afterwards. However, the panel emphasizes that the neck injury from the accident 16/7/12 was minor and has not resulted in any structural or neurological injury warranting the proposed neck surgery.

Related Treatment 16/7/12

The Review Panel agrees that the Related Treatment certificate issued by Assessor Meakin is confirmed.

Panel Decision (Subject Accident 24/10/12)

The Review Panel found that the accident WAS a cause of the following claimed injuries:

• Neck - soft tissue injury, aggravation of underlying degenerative change

In respect of the dispute as to whether C5-6 decompression and anterior fusion is related to the injuries caused by the 24/10/12 accident, the panel considered that the proposed surgery is related to the subject accident given the increased neck symptoms immediately afterwards. However, the panel emphasizes that the neck injury from the accident 24/10/12 was also minor and not resulted in any structural or neurological injury warranting the proposed neck surgery.

Related Treatment 24/10/12

The Review Panel agrees that the Related Treatment certificate issued by Assessor Meakin is confirmed.

7. In motor accident claims, disputes as to permanent impairment or as to the need for particular treatment are dealt with under Pt 3.4 of the Motor Accidents Compensation Act 1999 (NSW) (‘MACA’) by the Medical Assessment Service (‘MAS’) under the authority of the second defendant, the State Insurance Regulatory Authority. Under s 60(1) of the MACA, a “medical dispute” may be referred to the Authority for assessment by MAS. “Medical dispute” is defined in s 57 of the MACA to mean “a disagreement or issue to which” Pt 3.4 applies.

8. Section 58(1) of the MACA provides:

58 Application

(1) This Part applies to a disagreement between a claimant and an insurer about any of the following matters (referred to in this Part as medical assessment matters):

(a) whether the treatment provided or to be provided to the injured person was or is reasonable and necessary in the circumstances,

(b) whether any such treatment relates to the injury caused by the motor accident,

(c) (Repealed)

(d) whether the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%.

(e) (Repealed)

9. In the present case, the MAS has assessed whole person impairment in respect of the first defendant’s alleged physical and psychological injuries arising from each accident. The present proceedings do not concern the assessment of permanent impairment. Nor do they concern whether the proposed surgery is reasonable and necessary, despite what the Panel said in its report. That is a separate medical assessment under s 58(1)(a). The issue is whether, assuming the surgery is appropriate, it was related to the injuries caused by the accidents of 16 July 2012 and 24 October 2012, or whether the need for it related to the degenerative changes which pre-dated the accidents. The present assessment is under s 58(1)(b), namely, whether any such treatment relates to the injury caused by the motor accident. Specifically, the dispute concerns which accident, if any, the treatment relates to.

10. However, the Panel’s report has highlighted that the determination of the present issue will not resolve the entirety of the medical disputes between the parties. Accepting to some extent that the present position might not have been foreseeable, what has transpired demonstrates the artificiality of referring one medical dispute when another inextricably linked medical dispute remains unresolved. To the extent that the insurers dispute that the 2012 accidents are related to the need for surgery, so the decision of Dr Mobbs that surgery was needed at all ought to have been made the subject of a dispute, as has now occurred.

11. On 28 September 2017 the second plaintiff made application for the assessment of a medical dispute, namely, whether the surgery recommended by Dr Mobbs was reasonable and necessary in relation to the July 2012 accident. However, I was informed by senior counsel for the plaintiffs, without opposition, that the whole medical assessment process, including the medical dispute to be determined under s 58(1)(a), has been put on hold by the MAS until judgment in the present matter is delivered.

Submissions

12. As Mr Rewell SC for the plaintiffs acknowledged, the three grounds of appeal simply express in a different way in administrative law the same substantive complaint about what the Panel did. It is convenient, therefore, to deal with the grounds together.

13. The plaintiffs submitted that the dispute to be determined was whether the surgical treatment proposed by Dr Mobbs related to an injury caused by one or more of the three motor accidents. The plaintiffs drew attention to cl 1.9 of the Guidelines dealing with the accepted approach to causation, and submitted that for any of the three motor accidents to have been causative of the need for surgery, the accident in each case had to have made at least a material contribution to the need for surgery.

14. The plaintiffs submitted that it was also necessary for the Panel to consider whether the need for the proposed surgery would not have arisen but for the occurrence of one or more of the accidents. The plaintiffs submitted that in that regard, s 5D of the Civil Liability Act 2002 (NSW) applied.

15. The plaintiffs then drew attention to various parts of the Panel’s report which demonstrated only minor injuries subsequent to the 2012 accidents. In that regard the plaintiffs pointed to the factors which the Panel found contradicted any need for or likely benefit from the proposed surgery, but nevertheless found, inconsistently with their findings of the minor nature of the exacerbation of the injuries, that the surgery was related to the second and third accidents.

16. The plaintiffs submitted that the test for causation applied by the Panel was whether each of the second and third accidents resulted in an increase in the First Defendant's neck symptoms. The plaintiffs submitted that that was the wrong legal test of causation. The correct test was whether the need for the surgery would not have arisen but for either or both of the second and third motor accidents.

12. The plaintiffs submitted that applying the wrong test of causation in a way that affects the exercise of the Panel's statutory power is an error of law on the face of the record and amounts to a constructive failure to exercise jurisdiction. That renders the medical assessment invalid.

13. The plaintiffs submitted that the Panel made no specific finding as to whether the increase in symptoms after each of the second and third accidents had persisted. This, it was submitted, was an important and serious omission from their reasons, and was an omission that obscured the Panel's process of reasoning on the question of causation of the need for surgery.

14. The plaintiffs submitted that in their submissions to the Panel they argued that the effects of the soft tissue injury to the neck suffered by the first defendant in the accident for which each was responsible was temporary, and that the symptoms from that injury had fully resolved. The Panel failed to make any finding as to the duration of the increase in the neck symptoms that it found followed each of the second and third accidents. In that way the Panel failed to engage with a clearly articulated argument advanced by the plaintiffs, and that failure amounted to jurisdictional error.

15. The first defendant submitted that the Plaintiffs have conflated the questions in ss 58(1)(a) and (b) of the MACA. The first defendant submitted that the question whether the surgery was reasonable and necessary was not referred to Dr Meakin, nor to the Panel, despite the comments made by Panel in its report.

16. The first defendant submitted that the Panel reasoned that the surgery was related to the second and third accidents because of the documented increase in neck symptoms after each of those accidents. It was the increase and persistence of the symptoms which resulted in Dr Mobbs advising the surgery, and in that way the surgery related to the injury caused by the second and third accidents.

17. The first defendant submitted that neither the wording of cl 1.9 nor the ‘but for’ test of causation embodied in s 5D of the Civil Liability Act provides any guidance in determining whether treatment is related to an injury. In that way, the first defendant submitted that the test postulated by the plaintiffs was unduly restrictive.

18. The first defendant submitted that it was clear that the Panel was of the view that the increased symptoms persisted. That was because the Panel referred to a substantial body of documents showing the treatment the first defendant had undergone for his neck including physiotherapy, diagnostic blocks and the taking of various pain medications. The Panel also found clear contemporaneous evidence within the documents of the increased neck symptoms after the second and third accidents. In that way, there was no inadequacy of their reasons.

19. The first defendant submitted that the argument that the Panel failed to engage with the insurers’ causation arguments was misconceived because it was based on a conflation of the questions in s 58(1)(a) and (b). The first defendant submitted that because the question under s 58(1)(a) was not referred to the Panel, it was not required to engage with the insurers’ argument that the second and third accidents did not cause a need for the proposed surgery.

20. In reply, the plaintiffs submitted that the first defendant asserted that the words “relates to the injury” have a different meaning from “are causally related to the injury”. The plaintiffs submit that the words “relates to the injury” do not mean that any relationship, however trivial, between the proposed surgery and the injuries suffered in the second and third accidents will suffice to render the insurers liable for the costs of the proposed surgery. The plaintiffs submitted that the only sensible construction of s 58(1)(b) is that the need for the proposed surgery must have been created by, or at least contributed by, an injury or injuries suffered by the first defendant in the second or third accidents.

Is error established?

26. In my opinion, the Panel has fallen into error in its application of the appropriate test of causation. That error can best be demonstrated in two paragraphs of the Panel’s conclusions as follows:

The Panel does not consider that the subject 2012 accidents have resulted in any structural changes to the cervical spine that would warrant such major neck surgery being fusion and decompression. The Panel strongly suspects that the advent of these 2012 accidents more likely than not has not resulted in any substantive change of neck condition and certainly not one which could warrant cervical fusion and decompression. The Panel thought it highly likely that the claimant would have severe neck pain even if the subject motor accidents in 2012 had not occurred, given the reported severe neck symptoms in early 2012 when additional physiotherapy was requested. However, the Panel concedes that this is difficult to confirm.

Having found mild neck injuries due to the 16/7/12 and 24/10/12 subject accidents with attendant increase in neck symptoms, the Panel concluded that the proposed neck surgery (cervical decompression and anterior fusion) is related to the mild neck injuries sustained in both of the subject 2012 accidents, although the Panel considered that the recommended neck surgery would be very ill-advised for reasons below.

27. Clause 1.9 of the Motor Accidents Medical Guidelines dealing with permanent impairment addressed the issue of causation. Clause 1.9 provides:

1.9   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.

28. The requirement in s 58(1)(b) is to determine whether the treatment relates to the injury caused by the accident. If the injury that existed at the time of the Panel’s assessment was not the injury caused by the accident (the mild soft tissue injuries superimposed on the chronic degenerative changes) but, rather, simply the continuation of those pre-existing degenerative changes, then the treatment cannot relate to “the injury caused by the motor accident”.

29. I accept the plaintiffs’ submission that for any of the three motor accidents to have been causative of the need for the suggested surgery, the accident would have to have made at least a material contribution to the need for surgery. Further, the Panel should have considered whether the proposed surgery would not have arisen but for the occurrence of one or more of the accidents being considered.

30. Where the Panel strongly suspected that the second and third accidents more likely than not did not result in any substantive change of neck condition and certainly not one which could warrant cervical fusion and decompression, and where the Panel thought it highly likely that the claimant would have severe neck pain even if the second and third accidents had not occurred, it is difficult to see how the proper test of causation has been applied by the Panel.

31. Further, the Panel found only that there were increased neck symptoms immediately after each of the second and third accidents. It is difficult see how, in the absence of a finding that those symptoms persisted, that the proper test of causation could be applied to conclude that those accidents were causally related to the need for surgery.

32. It is not to the point, as the first defendant submitted, that the Panel set out all the evidence contained in various reports concerning the injuries sustained in those accidents. Some of those reports, it was submitted, dealt with the treatment following the accidents which threw light on the continuation of the symptoms. However, the matter of importance is that the Panel did not make any findings in that regard. In that way, the Panel’s reasons were inadequate.

33. Connected with that matter is the fact that each of the insurers in their written submissions to the Panel submitted that any injury sustained in each of the second and third accidents had resolved by the time of the assessment by Assessor Pierides in August 2013. The Panel did not deal with that argument, whilst at the same time not stating in its reasons whether it considered that the increase in neck symptoms persisted so as to justify the conclusion that the need for the neck surgery was caused by those accidents.

34. In Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 Gaudron J said at [81]:

However, the present case is, in my view, a clear case of constructive failure to exercise jurisdiction. That is because the delegate failed to consider the substance of Mr Miah’s application and could only have failed to do so because he misunderstood what is involved in the Convention definition of ‘refugee’.

35. In Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088, at [24], Gummow and Callinan JJ stated:

To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice.

Failure to afford procedural fairness is a recognised form of jurisdictional error: Kirk v Industrial Court of New South Wales; (2010) 239 CLR 531; [2010] HCA 1.

36. In AAI Ltd trading as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229, the Court of Appeal pointed out that there are important limits to the principles described in Dranichnikov and Miah. The Court at [50] endorsed what Basten JA said in Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; 61 MVR 443 at [22]:

The second point is that neither Dranichnikov nor Miah went so far as to imply an obligation to consider every piece of evidence presented. Further, to refer to a report, but not to a particular passage in the report, may indicate an implicit preference for some other material which (in the absence of any no evidence ground) must be accepted as existing to support a particular conclusion. Such a course cannot constitute a failure to take into account a relevant consideration nor a failure to respond to a substantial argument: Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; 243 CLR 164 at [35].

37. The submission put by the plaintiffs to the Panel went to the central issue of causation. If the injury sustained in the second and third accidents had resolved, it is difficult to see how there could be causal connection between those accidents and the surgery. When the Panel also found that it was highly likely the first defendant would have had severe neck pain even if the second and third accidents had not occurred, it was essential for the Panel to determine if the “mild soft tissue injuries…superimposed on chronic underlying degenerative changes” sustained in those accidents had resolved. In any event, a finding that it was highly likely that the first defendant would have had severe neck pain even if those accidents had not occurred, points strongly against the proper application of the causation test, namely, that the proposed surgery would not have arisen but for the occurrence of one or more of those accidents.

38. In failing to apply the correct test of causation, the Panel’s decision was a purported and not a real exercise of its statutory function under s 58(1)(b). Further, in failing to respond to the substantial argument that the injuries sustained in those accidents had resolved, a practical injustice resulted. In either case, a jurisdictional error is established: McGiffen at [65]-[66].

39. I do not agree with the first defendant’s submission that the plaintiffs are eliding the matters in s 58(1)(a) and (b). The submission was that the question of the persistence of the symptoms went to the issue of the reasonableness of the treatment, which was a matter under paragraph (a).

40. It may be accepted that the two medical questions (whether the treatment is reasonable or necessary, and whether the treatment relates to the injury caused by the accidents) are closely related. The Panel, nevertheless, recognised the distinction, as do the Plaintiffs in their submissions.

41. Whilst it may also be accepted that, whether the persistence of the symptoms would be a matter to be considered when determining whether the treatment was reasonable or necessary, such persistence is also a finding necessarily anterior to the finding that the treatment relates to that injury. This, of course, is why it was a reasonably arid exercise to consider the question under paragraph (b) without also considering the question under paragraph (a). Certainly, a negative answer to either question would be the end of the matter, but an affirmative answer to either question would not be.

42. Subject to discussion of what relief, if any, is available to the plaintiffs by reason of my conclusions, I strongly urge the second defendant and the parties to ensure that both questions are determined at the one time by the same Panel.

What relief is available?

43. The first defendant submitted that in any event, no occasion arose for granting certiorari because, until the issue under s 58(1)(a) is formally dealt with by the MAS, the insurer is not under a duty to pay for the surgery. In that way the decision of the Panel does not have apparent legal effect and the effect of its determination is moot. Reference was made to was said by the High Court in Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480 at [25]. The first defendant submitted in the circumstances that relief should be refused on discretionary grounds.

44. Similarly, the first defendant noted that the plaintiffs had now lodged an application in relation to a treatment dispute under s 58(1)(a). That application should have been lodged and disposed of prior to the commencement of these proceedings. On that basis, the first defendant says that relief should be refused on discretionary grounds.

45. In Wingfoot, the High Court said at [25]:

The function of an order in the nature of certiorari is to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power. Thus, an order in the nature of certiorari is available only in respect of an exercise or purported exercise of power which has, at the date of order, an "apparent legal effect". An order in the nature of certiorari is not available in respect of an exercise or purported exercise of power the legal effect or purported legal effect of which is moot or spent. An order in the nature of certiorari in those circumstances would be not simply inutile; it would be unavailable.

46. The first defendant submitted that, until the issue under s 58(1)(a) has been dealt with, the plaintiffs are under no duty to pay for the surgery and in that way the Panel’s determination has no apparent legal effect. In that regard, the first defendant points to s 83(2) of the Act which provides:

83 Duty of insurer to make hospital, medical and other payments

(cf s 45 (2)–(4) MAA)

…

(2) The duty of an insurer under this section to make payments applies only to the extent to which those payments:

(a) are reasonable and necessary in the circumstances, and

(b) are properly verified, and

(c) relate to the injury caused by the fault of the owner or driver of the motor vehicle to which the third-party policy taken to have been issued by the insurer relates.

Note.

Medical disputes about payments under this section may be referred by the insurer or claimant to a medical assessor for assessment under Part 3.4. Other disputes may be referred to a claims assessor under section 96 for assessment.

47. The plaintiffs submitted that the legal effect of the Panel’s decision is not moot. If, as the plaintiffs contend, the surgery proposed by Dr Mobbs does not relate to a neck injury suffered by the first defendant in the second or third accidents, it will be completely unnecessary for the MAS to deal with the further dispute as to whether the proposed surgery is or is not “reasonable and necessary”. In those circumstances the plaintiffs will have no liability to pay for the proposed surgery.

48. The plaintiffs submitted further that, if they are successful in these proceedings, the MAS will be requested to expand the Review Panel’s terms of reference to consider the medical assessment matters referred to in both ss 58(1)(a) and (b).

49. The way these proceedings came to the Court was unfortunate in the sense that the parties appear not to have discerned at an early enough time the interdependence of the two questions under paragraphs (a) and (b) of s 58(1). A decision relating to paragraph (a) was made by Dr Mobbs in June 2016 but there does not appear to have been any challenge to that by the plaintiffs until just after the Panel’s report (and probabaly as a result of it), and just before these proceedings commenced on 17 November 2017.

50. On the other hand, the question under paragraph (b) went to Dr Meakin on 14 March 2017, was then appealed to the Panel, and these proceedings commenced.

51. It may accepted that UCPR r 59.10 imposes a time limitation on the commencement of judicial review proceedings with which the plaintiffs were obliged to comply after the decision of the Panel. On one view, the present proceedings could have been commenced within time, and then an application made to stay those proceedings until determination of the issue under paragraph (a), if it was in fact the Panel’s determination that really concentrated the plaintiffs’ collective minds on that question.

52. If I accepted the first defendant’s submission about the effect of Wingfoot, the result would be this. Despite my conclusions that there is jurisdictional error in the Panel’s determination, nothing could be done about that determination until the issue under paragraph (a) had been finalised. Relief would be refused in these proceedings because the decision had no legal effect. Fresh proceedings by the plaintiffs would be necessary in the event that the determination in relation to paragraph (a) went against the plaintiffs. Such proceedings would need to include the challenge to the Panel’s decision which I have dealt with in this judgment.

53. That course would not be consistent with s 56 of the Civil Procedure Act 2005 (NSW).

54. The issue raised by the first defendant in reliance on Wingfoot is whether an order in the nature of certiorari would have any apparent legal effect if made now. In my opinion it would have such effect, although its effect would be contingent on a determination of an assessor and/or a Panel on the paragraph (a) question. If the paragraph (a) question was determined in favour of the first defendant, the order in the nature of certiorari made in these proceedings would then operate to require the Panel to reconsider the paragraph (b) question. That may be an application of the principle in Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149; [1996] HCA 44.

55. In that case, Brennan CJ, Gaudron and Gummow JJ said (at 159):

Thus, for certiorari to issue, it must be possible to identify a decision which has a discernible or apparent legal effect upon rights. It is that legal effect which may be removed for quashing.

This formulation encompasses two broadly typical situations where the requirement of legal effect is in issue: (1) where the decision under challenge is the ultimate decision in the decision-making process and the question is whether that ultimate decision sufficiently "affects rights" in a legal sense;

(2) where the ultimate decision to be made undoubtedly affects legal rights but the question is whether a decision made at a preliminary or recommendatory stage of the decision-making process sufficiently "determines" or is connected with that decision.

56. To ascertain whether the preliminary decision can be said sufficiently to affect legal rights, the judgment went on to say (at 162):

Thus, in the words of Stephen J [in Ainsworth v Criminal Justoice Commission (1992) 175 CLR 564 at 580], one must ask whether there is a decision which constitutes some condition precedent to the exercise of power which will affect legal rights. Alternatively, in the words of the majority in Ainsworth, the preliminary report or recommendation must operate in this situation "as a precondition or as a bar to a course of action" or "as a step in a process capable of altering rights, interests or liabilities".

57. I am conscious of the width of the expression of the principle in Wingfoot because reference is made to the fact that the legal effect or purported legal effect of the exercise of power is moot. It is moot at the present time and, if the paragraph (a) determination favoured the plaintiffs, the conclusions to which I have come in this judgment would remain moot because they would never need to be considered. It is also not easy to see whether that course of events fits within what was said in Hot Holdings.

58. An alternative course is available. In Ainsworth v Criminal Justoice Commission (1992) 175 CLR 564, the High Court made clear (at 580) that declaratory relief may be available with respect to decisions which do not have a specific legal effect: see also AB v Judicial Commission of New South Wales (Conduct Division) [2018] NSWCA 264 at [10]. The plaintiffs seek declarations that the Panel’s determination in respect of each of them is affected by error of law and/or jurisdictional error. In addition, they seek an order in the nature of mandamus remitting the matter effectively to be determined in accordance with law.

59. A suggestion was made during argument that the relief claimed might be amended to ask for a declaration that the decision of the Panel was void. The first defendant resisted that course. I do not consider there is a necessity for such amendment. If this Court makes declarations in favour of each of the plaintiffs that the determination of the Panel is affected by jurisdictional error, that has the effect that the Panel has not determined the matter according to law. No principle such as that set out in Wingfoot at [25] attends the making of an order in the nature of mandamus. Accordingly, I propose to make declarations and an order in the nature of mandamus.

60. I make the following orders:

(1)   A declaration that the Certificate of the Third Defendant dated 17 August 2017 relating to a motor accident on 24 October 2012 (for which the First Plaintiff is the third party insurer) is affected by jurisdictional error.

(2)   A declaration that the Certificate of the Third Defendant dated 17 August 2017 relating to a motor accident on 16 July 2012 (for which the Second Plaintiff is the third party insurer) is affected by jurisdictional error.

(3)   An order in the nature of mandamus remitting the matter to the Second Defendant to be determined in accordance with law.

(4)   The First Defendant is to pay the Plaintiffs' costs of these proceedings.

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Decision last updated: 13 November 2018