Berrell v Allianz Australia Insurance Ltd

[2018] NSWSC 1114

Supreme Court

New South Wales

Medium Neutral Citation:	Berrell v Allianz Australia Insurance Ltd [2018] NSWSC 1114
Hearing dates:	13 July 2018
Date of orders:	19 July 2018
Decision date:	19 July 2018
Jurisdiction:	Common Law
Before:	Fagan J
Decision:	1. The amended summons is dismissed. 2. The plaintiff is to pay the first defendant’s costs of the proceedings.
Catchwords:	ADMINISTRATIVE LAW – judicial review – State Insurance Regulatory Authority – appeal against decision of proper officer of Authority refusing referral of medical assessment to review panel – where primary medical assessment certificate issued for nil whole person impairment following motor accident – where assessor did not apply methodology in MAA Permanent Impairment Guidelines – whether reasonable cause to suspect that medical assessment “incorrect in a material respect” – Motor Accidents Compensation Act 1999 (NSW), s 63 – whether decision of proper officer unreasonable – whether lack of “evident and intelligible justification” – summons dismissed
Legislation Cited:	American Medical Association’s Guides to the Evaluation of Permanent Impairment (4th ed) Motor Accidents Compensation Act 1999 (NSW) Permanent Impairment Guidelines (1 October 2007)
Cases Cited:	Meeuwissen v Boden (2010) 78 NSWLR 143; [2010] NSWCA 253 Minister for Immigration v Li (2013) 249 CLR 332; [2013] HCA 18 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6
Category:	Principal judgment
Parties:	Wayne Paul Sidney Berrell (plaintiff) Allianz Australia Insurance Limited (first defendant) State Insurance Regulatory Authority (second defendant) proper officer (third defendant)
Representation:	Counsel: Mr Robert Sheldon SC/Mr Vasilios Tzatzagos (plaintiff) Mr Mark Robinson SC/Ms Sian McGee (first defendant) Submitting appearances (second and third defendant)   Solicitors: Stacks Law Firm (plaintiff) Hall & Wilcox Lawyers (first defendant) Crown Solicitor’s Office (second and third defendant)
File Number(s):	2018/081396

Judgment

1. The plaintiff claims he was injured in a motor vehicle accident on 2 August 2012. He made a claim for compensation which gave rise to a “medical dispute” within the meaning of Pt 3.4 of the Motor Accidents Compensation Act 1999 (NSW) (“the Act”). In 2017 there was a further referral of the medical dispute to an assessor pursuant to s 62 of the Act. On 17 October 2017 the medical assessor issued a Medical Assessment Certificate (“MAC”) for nil whole person impairment. On 10 February 2018 the proper officer of the State Insurance Regulatory Authority (“the Authority”) refused to refer the assessment to a review panel under s 63. The plaintiff now seeks administrative review of the proper officer’s decision.

2. The only active defendant is the first, which is the compulsory third-party insurer of the vehicle the plaintiff was driving. The second and third defendants, the Authority and its proper officer, have filed submitting appearances.

The medical dispute

3. The accident occurred when the plaintiff was driving a rented station wagon through a roundabout on the Sturt Highway near Wagga Wagga. He was proceeding at less than 20 km/h when a sedan motor vehicle entered the roundabout from his left, failed to give way and collided with the plaintiff’s car. The plaintiff was wearing a seatbelt. Only the front passenger-side airbag deployed. The plaintiff’s wife who was seated in the front passenger seat, another passenger in the rear and the plaintiff himself were able to get out of the vehicle.

4. The plaintiff was born in late 1956 and was 55 years old at the date of the accident. He was seen at Wagga Wagga Hospital shortly after the collision and complained of soreness in his left knee, left hip and lumbar spine. The hospital discharged him the same day.

5. The medical dispute which arose from his claim was first referred to the Authority in 2016, under s 60 of the Act. The Authority referred it to Dr J McKee. On 6 July 2016 Dr McKee issued an MAC under s 61(1). This has not been tendered but from references in other documents it appears Dr McKee assessed the plaintiff as having an impairment of his left hip caused in part by pre-accident degenerative changes and in part by the accident, giving rise to 5% whole person impairment attributable to the accident.

Information presented to Dr Cunneen

6. The further referral of the medical dispute, on the plaintiff’s application under s 62, was to Dr C Cunneen. Before issuing his MAC on 17 October 2017 Dr Cunneen reviewed the files from Dr McKee’s assessment and the forms and supporting documents relating to the further referral. He also examined the plaintiff. I paraphrase as follows Dr Cunneen’s summary (in the MAC) of the documented history concerning the plaintiff’s back and hips:

1. Lower back: since 1982 the plaintiff had suffered recurrent episodes of lumbar back pain. An x-ray on 8 August 2004 showed degenerative L4/5 and L5/S1 disc spaces with marginal anterior osteophytes.

2. Left hip: since May 2011 there had been advanced osteoarthritic changes in the plaintiff’s left hip. An x-ray on 19 May 2011 showed the changes, with subarticular sclerosis, cyst formation and multiple osteophytes.

3. Lower back: on 6 August 2012, four days after the accident, the plaintiff reported to his general practitioner some pain over his lower lumbar spine.

4. Lower back and right hip: in October and December 2012 the plaintiff’s general practitioner noted the plaintiff’s right hip joint was osteoarthritic and that he suffered degeneration of his lumbar back. The general practitioner attributed aching in the plaintiff’s right leg to these hip and back degenerative changes.

5. Both hips: x-rays of 20 September 2013 showed osteoarthritis in both hip joints with marginal osteophytes, joint narrowing and subarticular sclerosis. A report of Dr Gillett, orthopaedic surgeon, of the same date expressed the opinion with respect to the plaintiff’s left hip that he “would have reached a similar situation in the period of 1 to 2 years from the date of the accident regardless of this accident”. Dr Gillett assessed his whole person impairment from the left hip as at that date, two years prior to hip joint replacement surgery, at 4% of which he apportioned 2% to the accident.

6. Lower back: x-rays and a CT scan on 13 February 2014 showed multilevel degenerative disc disease, particularly at L4/5 and L5/S1.

7. Right hip: x-ray on 21 March 2014 showed advanced osteoarthritis with decreased joint space and considerable subarticular cyst formation.

8. Both hips: on 18 May 2015 the plaintiff underwent a right total hip replacement. An equivalent operation was carried out on the left side on 14 December 2015.

7. Dr Cunneen noted that the plaintiff’s history included congenital bilateral pes cavus or “club foot” which had required multiple surgeries. This condition is characterised by exceptionally high arches of the feet. The doctor made no observation as to whether this congenital condition may have affected the plaintiff’s gait and thereby contributed to degenerative changes in his lumbar spine and hips. That was not important to Dr Cunneen’s task. He was ultimately concerned with whether and to what extent the accident of 2 August 2012 was the cause of any identifiable impairment as at October 2017.

8. At examination by Dr Cunneen the plaintiff reported current symptoms of his lower back and hips, which I summarise from the MAC as follows:

1. Central lower lumbar back: constant pain as at October 2017, worse with activity and involving intermittent referred pain to the right buttock and leg.

2. Left hip joint: minimal pain and increased function following the left total hip replacement in December 2015.

3. Right hip joint: pain much reduced since the replacement of the joint in March 2015 and improved ability to walk since that time.

9. Dr Cunneen’s relevant findings on examination were (in my paraphrase):

1. Lower back: loss of lumbar lordosis, no muscle wasting or muscle spasm, mild tenderness over right L3 and the right sacroiliac joint.

2. Both hips: normal alignment, stable joint, no tenderness elicited. The plaintiff was found negative to Trendelenburg's sign, a test for weakness of the muscle supporting the joint and for pain in the joint.

10. In addition the doctor measured the plaintiff’s active range of motion in both hip joints and found it to some degree restricted in extension, abduction and adduction. The active range of motion of the lumbar spine was also restricted in flexion and extension.

11. The above summary of Dr Cunneen’s review of the recorded medical history, of the history he obtained orally from the plaintiff and of his findings on examination does not include numerous other complaints of the plaintiff concerning both shoulders, both elbows and both knees. There is no suggestion in the case that symptoms in these areas are in any way related to the accident on 2 August 2012.

Critical findings in Dr Cunneen’s MAC

12. Dr Cunneen’s critical findings appear at pp 12-15 of his MAC of 17 October 2017. The first relevant extract is as follows (at 12-13, numbering added for ease of reference):

1. In my opinion, I would state all physical injuries from August 2012 MVC were musculoligamentous/soft tissue in nature and would have resolved over a period of 4-8 weeks (late-October 2012). Any ongoing signs/symptoms beyond November 2012, particularly pertaining to his degenerative bilateral hip joints and degenerative lumbar spine, would not be pertaining to August 2012 event.

2. Furthermore, I would state his requirement for bilateral Total Hip Replacement (THR) during 2015 was not influenced to a significant degree by August 2012 MVC.

3. List of Injuries [caused] by the Accident

…

Left hip - injury aggravating asymptomatic degenerative changes.

…

Right hip - injury aggravating symptomatic degenerative changes.

4. Summary of injuries listed by the Parties but not caused by the Accident

Advanced Osteoarthritic changes right hip joint requiring surgery.

Advanced Osteoarthritic changes left hip joint requiring surgery.

…

13. At p 14 Dr Cunneen provided a table which he said contained his determination of permanent impairment in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment (4th ed) and the Permanent Impairment Guidelines (1 October 2007). It is not in dispute that these were the appropriate guidelines to apply.

14. Section 2 of this table contains the following information for the left hip. The words before the colon in each point correspond with column headings in the table:

a. Body part or system: Left hip - injury aggravating asymptomatic degenerative changes - resolved.

b. AMA Guides/Guidelines References: Chapter 3, pages 85 and 87, tables 64 and 65. Soft tissue injury resolved. Right [scil Left] [total hip replacement] with reduced [range of movement] (unrelated). Stable left [total hip replacement].

c. Permanent: Yes.

d. Current % WPI: 0% WPI.

d. % WPI from pre-existing or subsequent causes: Nil.

c. % WPI due to motor accident: 0% WPI.

15. Section 5 of the table contains the following information for the right hip:

a. Body part or system: Right hip - injury aggravating symptomatic degenerative changes - resolved.

b. AMA Guides/Guidelines References: Chapter 3, pages 85 and 87, tables 64 and 65. Undergone right [total hip replacement] (unrelated). Stable right [total hip replacement]. Musculoligamentous injury resolved.

c. Permanent: Yes.

d. Current % WPI: 0% WPI.

e. % WPI from pre-existing or subsequent causes: Nil.

f. % WPI due to motor accident: 0% WPI.

16. It appears to me very clear that Dr Cunneen considered all injuries sustained on 2 August 2012 would have resolved within at most 8 weeks and that any impairment or symptoms suffered by the plaintiff at 17 October 2017, including in connection with his hips and lower back, could not be attributed in any proportion to the accident. That is explicit in par 1 of the extract from the MAC quoted at [12] and also in par 4 where the osteoarthritic changes in both hips, which required joint replacement surgery, are unequivocally listed under the heading “not caused by the Accident”.

17. The assessor’s conclusion is also clear from his entries in the table at p 14 of the MAC, extracted at [14] and [15] above. In section 2 of that table, concerning the left hip, Dr Cunneen entered the words “Soft tissue injury resolved” and he designated the total hip replacement as “unrelated”. Similarly in section 5, concerning the right hip, the material entry is “Musculoligamentous injury resolved” and, again, the replacement surgery is designated “unrelated”.

Plaintiff’s suggested construction of the assessor’s conclusions

18. The plaintiff submits that this apparently straightforward meaning of the MAC is contradicted or at least qualified by two aspects of the document. First, the plaintiff seizes upon the phrase “not influenced to a significant degree” in par 2 of the passage quoted at [12]. The plaintiff suggests this equates to an affirmative finding that the requirement for bilateral hip replacement (and any permanent whole person impairment which that may involve) was “influenced” in some degree by the accident.

19. I disagree. The submission ascribes to the doctor an intention to draw the sort of fine distinctions a lawyer would draw between degrees of causative effect, whereby causation to a less-than-significant degree might be regarded as causation nonetheless. Elsewhere the assessor speaks plainly. At par 1 he states that signs and symptoms of the plaintiff’s degenerative lumbar spine and hips after November 2012 “would not be pertaining to August 2012 event”. In the table on p 14 he says the soft tissue or musculoligamentous injuries from the accident “resolved” and the hip replacement surgery was “unrelated”.

20. These definitive statements indicate that what Dr Cunneen meant by “not influenced to a significant degree” was negligibly influenced or not influenced in any degree sufficient to be regarded as a contributory cause.

21. Secondly the plaintiff refers to par 3 of the extract at [12] above. He contends the doctor’s finding that injuries from the accident included aggravation of degenerative changes in the hip joints means he found the accident was a contributing cause of the extent of degeneration which ultimately required surgery to replace the joints. This does not follow. On a fair reading of all of these findings taken together the doctor’s reference to “injury aggravating … degenerative changes” is to the soft tissue or musculoligamentous injury which he identified at par 1 as having resolved within eight weeks. The entries in Dr Cunneen’s table at p 14 of the MAC, in the items lettered “a” at [14] and [15] above, confirm this.

22. If, contrary to that understanding, the assessor should be taken to have meant that the accident caused, in addition to soft tissue injury, some acceleration of the advanced osteoarthritis, osteophyte formation and subarticular sclerosis and cyst formation in his hip joints (see [6(2)], [6(4)], [6(5)] and [6(7)] above), then his definitive statements elsewhere clearly treat that acceleration as de minimis and negligible in the progress of the degeneration. I say that because of the doctor’s finding that the total hip replacements were “unrelated” to the accident.

Alleged error in the decision of the proper officer

23. Section 63 of the Act provides, so far as relevant (emphasis added):

63 Review of medical assessment by review panel

(1) A party to a medical dispute may apply to the proper officer of the Authority to refer a medical assessment under this Part by a single medical assessor to a review panel of medical assessors for review.

(2) An application for the referral of a medical assessment to a review panel may only be made on the grounds that the assessment was incorrect in a material respect.

(3) The proper officer of the Authority is to arrange for any such application to be referred to a panel of at least 3 medical assessors, but only if the proper officer is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application.

24. The proper officer gave reasons for being “not satisfied that there is reasonable cause to suspect that the medical assessment is incorrect in a material respect” and for refusing referral to a review panel. She considered arguments from the plaintiff as to why the MAC was said to be materially incorrect in relation to each of his lumbar spine, his left and right hips, his left shoulder and his left elbow. The grounds set out in the summons and the plaintiff’s written and oral arguments impugn Dr Cunneen’s assessment only in relation to the plaintiff’s hips. The grounds and submissions purport to find fault with the proper officer’s reasons only because she did not find cause to suspect material error in the MAC’s findings regarding the hips.

25. The plaintiff’s case was put upon the basis that “the proper officer’s decision was one to which no reasonable person in that position could have come”. The plaintiff referred to this as “Wednesbury unreasonableness”, the modern formulation of which was expressed in Minister for Immigration v Li (2013) 249 CLR 332; [2013] HCA 18 at [76] (Hayne, Kiefel and Bell JJ) in these terms:

“Even where some reasons have been provided ... it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.”

26. It is not necessary to set out the whole of the proper officer’s reasons. The plaintiff’s oral argument was narrower than his written submissions and ultimately only the words highlighted in bold in the following passages (numbered as they appear in the proper officer’s reasons) were said to disclose reviewable error:

20(ii) Assessor Cunneen has provided reasons as to why an injury to hips was not causally related to the motor vehicle accident.

21 As there was no causal link between the accident and any injury to the hips, and there is no evidence that any pain in the hips was as a result of the lower back, Assessor Cunneen has not erred … .

27. The plaintiff submitted that the above statements are wrong because in the passage quoted from the MAC at [12] the assessor did find injury to the plaintiff’s hips caused by the accident, namely, (at par 1) musculoligamentous/ soft tissue injuries and (at par 2) injuries aggravating degenerative changes in the hip joints. I have concluded above that on a fair reading of the MAC these are two descriptions of the same thing and that in any event Dr Cunneen found no causal connection between injuries from the accident and the hip replacement surgery and any residual impairment from that.

28. The resolution of the plaintiff’s argument lies in a fair reading of the proper officer’s reasons, as required by authority: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272; [1996] HCA 6. Although the single word “injury” is used in each of the impugned paragraphs, it is clear the proper officer was referring to injury which sounded in permanent impairment. She could not have meant to say, erroneously, that Dr Cunneen found no injury at all, even of a short-lived nature. Viewed in their entirety the proper officer’s reasons show that she had read the MAC. She quoted apposite passages from it to address arguments the plaintiff had advanced in support of review. It is very clear from the MAC that Dr Cunneen found the accident had caused some minor injury to the hip joints which resolved quickly. There is no justification for reading pars 20(ii) and 21 in the proper officer’s reasons with a pedantic and narrow concentration upon the isolated word “injury”, thereby imputing that she missed Dr Cunneen’s clear conclusion that the plaintiff’s hips were injured but not in a way that led to permanent impairment.

27. The plaintiff submitted that Dr Cunneen failed to apply cll 1.33-1.36 of the MAA Permanent Impairment Guidelines as applicable at October 2017. Those Guidelines were made pursuant to ss 44(1)(c) and 45 of the Act. Relevant parts of cll 1.33 and 1.36 were as follows:

1.33 … If there is objective evidence of a pre-existing symptomatic permanent impairment in the same region at the time of the accident, then its value should be calculated and subtracted from the current whole person impairment value. If there is no objective evidence of pre-existing symptomatic permanent impairment, then its possible presence should be ignored.

1.36 … If there is objective evidence of a subsequent and unrelated injury or condition resulting in permanent impairment in the same region its value should be calculated. The permanent impairment resulting from the relevant motor accident should also be calculated.

30. Dr Cunneen’s table at p 14 of the MAC is set out in a manner which would be appropriate for calculating the full extent of whole person impairment attributable to each of the plaintiff’s hips, from whatever cause including conditions or injuries that pre-dated the accident or were subsequent to it, and then separately calculating and deducting the proportion solely attributable to pre- or post-accident causes. Despite the table being set out in that manner Dr Cunneen did not apply the methodology. With respect to each hip he assessed directly 0% whole person impairment attributable to the accident, providing a narrative which explained that he treated the soft tissue or musculoligamentous injury from the accident as resolved and regarded the total hip replacement operations as “unrelated” (see [14b] and [15b] above).

31. I do not consider that Dr Cunneen’s approach involved material error which the proper officer should have identified or found reason to suspect. Only cl 1.36 would be applicable, on the basis that the degeneration of the plaintiff’s hip joints progressed after the accident to the point of requiring replacement surgery. Had Dr Cunneen followed cl 1.36, he would have assessed a percentage of whole person impairment attributable to each hip and then, paying regard to his conclusion that none of this was caused by the accident, he would have deducted the whole of that percentage to arrive at 0%. By not applying the cl 1.36 methodology, all that is missing from the MAC is Dr Cunneen’s assessment of the percentage of impairment caused by non-accident progressive degeneration. If this should be regarded as error at all (which I do not accept) it certainly could not be regarded as material.

32. In support of the plaintiff’s case that the proper officer’s decision was “one to which no reasonable person in that position could have come”, the following submissions were made in writing (emphasis added):

[Dr Cunneen’s assessment] miscarried so as to produce the remarkable outcome that the plaintiff, who had established that the need for the surgery was related to the subject incident, was found to have no permanent impairment despite having had his hip replaced (Plaintiff’s Submissions par 1).

Here was a man of whom it was accepted that he had asymptomatic degenerative changes in his hip but who had begun to have symptoms in his hip because of the car accident, which symptoms led to the replacement of his hip (Plaintiff’s Submissions par 23).

[The plaintiff was] a man who it was accepted needed a total hip replacement by reason of the motor vehicle accident … (Plaintiff’s Submissions par 31).

[At October 2017 the plaintiff was a person who had] undergone a total hip replacement the need for which, it has been determined beyond argument, was created by the subject motor vehicle accident … (Plaintiff’s Submissions in Reply at par 1).

33. There is no warrant for any of these assertions. In the material before the proper officer there was no finding by Dr Cunneen that the plaintiff “needed total hip replacement by reason of the motor vehicle accident” or even that “the need for the surgery was related to the subject incident”; quite the contrary. Nor was there any agreement by the first defendant that any such causal connection existed. The statements that these matters were “established” or had been “accepted” or “determined beyond argument” are all false. These were spurious grounds upon which to assert that the proper officer’s decision lacked “evident and intelligible justification”.

Orders

34. Taking into account the manner in which s 63 was to be applied, as held in Meeuwissen v Boden (2010) 78 NSWLR 143; [2010] NSWCA 253 at [16]-[24] (Basten JA), I find the proper officer made no reviewable error in failing to reach satisfaction that there was “reasonable cause to suspect that the medical assessment is incorrect in a material respect”. The orders of the Court will be:

1. The amended summons is dismissed.

2. The plaintiff is to pay the first defendant’s costs of the proceedings.

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Decision last updated: 19 July 2018