Carney v Insurance Australia Limited ACN 000 016 722 T/As NRMA (Motor Accident Injuries)

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CARNEY v INSURANCE AUSTRALIA LIMITED ACN 000 016 722 T/AS NRMA (Motor Accident Injuries) [2025] ACAT 50

MAI 7/2024

Catchwords:               MOTOR ACCIDENT INJURIES – reviewable decision where insurer rejected liability for a total right hip replacement procedure in respect of injuries sustained by the applicant in a motor accident – where the matter is remitted to the respondent for reconsideration in accordance with the MAI Act and the MAI Guidelines.
List of Legislation:     Motor Accident Injuries Act 2019 ss 193,120,126
Subordinate
legislation cited:         Motor Accident Injuries (ACAT Costs Orders) Regulation 2020 s 198 cl 6
Cases cited:Bothe v AAI Limited ACN 005 297 807 trading as GIO [2022] ACAT 12
Kioa v West 1985] HCA 81; 159 CLR 550; 60 ALJR 113; 62 ALR 321
Neish v Insurance Australia Limited CAN 000 016 722 trading as NRMA [2022] ACAT 24

Tribunal:Member J Hanton

Date of Orders:  4 July 2025
Date of Reasons for Decision:      4 July 2025
Date of Publication:  14 July 2025
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          MAI 7/2024

BETWEEN:

SANDRA CARNEY

Applicant
AND:

INSURANCE AUSTRALIA LIMITED ACN 000 016 722 T/AS NRMA Respondent

TRIBUNAL:Member J Hanton

DATE:4 July 2025

ORDER

Having found that the reviewable decision of 3 October 2024 was affected by an error of law, the Tribunal orders that:

The internal review decision of 3 October 2024 rejecting liability for defined benefits is set aside and the matter remitted to the respondent for reconsideration in accordance with the Motor Accident Injuries Act 2019 and the relevant Motor Accident Injuries Guidelines.
The respondent is to pay the applicant’s costs, as agreed or assessed, in accordance with section 198 of the MAI Act and the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020.
If the parties provide the Tribunal with proposed consent orders, the beneficiary of those orders is to give to the Tribunal and the other party itemised details of the costs in accordance with clause 6 of the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020, within 14 days of this decision.
The Tribunal notifies the parties that it proposes to decide any costs application on the basis of documents, without the parties, their representatives or witnesses appearing at a hearing.
If the parties do not reach an agreed position on costs:
(a)An application for costs, including:
i.evidence and submissions in support,
ii.itemised details of the costs in accordance with clause 6 of the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020,
iii.the amount of costs claimed,
is to be provided to the Tribunal and the other party within 21 days of this decision, along with any representations about the proposal to decide any costs application on the basis of documents;
(b)Any response to an application for costs, including evidence and submissions in support, is to be provided to the Tribunal and the other party within 28 days of this decision, along with any representations about the proposal to decide any costs application on the basis of documents.

And the Tribunal notes:

If a costs application is made, the Tribunal will decide whether or not to determine the application on the basis of documents or whether to list the application for a hearing.

…………………………

Member J Hanton

REASONS FOR DECISION

Background

The application in this matter was made pursuant to section 193 of the Motor Accident Injuries Act 2019 (MAI Act) seeking external review of the respondent’s internal review decision dated 3 October 2024 to reject liability for a total right hip replacement procedure in respect of injuries sustained by the applicant in a motor accident on 2 February 2024.

Background facts

On 2 February 2024 the applicant was injured in a motor accident when the car she was driving was hit from behind on the Monaro Highway.
On 4 March 2024 the applicant lodged a Defined Benefits Application (DBA) with the respondent.[1] In that application, the applicant stated that she suffered lumbar pain[2] as a result of the accident.
[1] MAI documents, page 1
[2] MAI documents, page 3
The applicant noted that she was not suffering an illness or injury affecting the same or similar parts of her body at the time of the accident.[3]
[3] MAI documents, page 3
The applicant’s general practitioner (GP), Dr Rudzki, provided a report dated 6 March 2024 in support of the DBA. The report:
(a)provided a diagnosis of a disc prolapse at the L4/5 and L5/S1 levels of the applicant’s spine with clinical findings of pain in R shin (L5 dermatome). Deep seated central pain. MRI shows damage to L4/5 and L5/S1[4];
(b)noted the possibility that the accident had rendered a pre-existing condition symptomatic but she was asymptomatic prior to the accident.[5]
(c)recommended medium term treatment of 4 to 13 weeks encompassing tapered oral prednisone; antibiotic treatment for possible discitis; NSAIDs for ache and stiffness; soft tissue therapy and exercise physiology one pain had settled [6]; and
(d)stated the applicant was not fit for work from 6 to 14 March 2024 as she had started limping due to right leg pain which he anticipated would settle over the week.[7]
[4] MAI documents, page 6
[5] MAI documents, page 7
[6] MAI documents, page 7
[7] MAI documents, page 8
On 22 March 2024 the applicant presented at Canberra Hospital with worsening back pain. The discharge summary also noted that the applicant was complaining of associated hip and knee pain.
On 8 April 2024 the respondent accepted liability to pay defined benefits under the MAI Act.[8]
[8] MAI documents, page 17
On 18 June 2024 Dr Rudzki referred the applicant to orthopaedic surgeon Dr Alexander Burns noting she had developed hip pain 24 hours after the accident that had progressively worsened.
In a request dated 25 July 2024, Dr Burns submitted a request to the respondent for funding to perform a right hip replacement and associated costs.[9] The request was received by the respondent on 6 August 2024.[10]
[9] Paragraph 2.5 of the applicant’s submissions; paragraph 3 of respondent’s submissions
[10] Paragraph 2.5 of the applicant’s submissions; paragraph 3 of respondent’s submissions
In an independent medical examination report dated 23 August 2024[11] orthopaedic surgeon Dr Richard Powell said:
(a)The applicant’s recovery from the accident was complicated by a fall at work in July 2024 which led to a diagnosis of right hip osteoarthritis.
(b)The right total hip replacement was required for the management of advanced end stage osteoarthritis, not on the basis of any injuries sustained in the motor vehicle accident.

The dispute between the parties

[11] MAI documents, page 89

On 10 September 2024[12] the respondent declined the applicant’s request for surgery made on her behalf Dr Burns on the basis after it determined that that treatment was not reasonable and necessary as it was not related to the injuries sustained in the motor vehicle accident. The respondent said that the treatment was instead required for the management of advanced end-stage osteoarthritis of the right hip.[13]
[12] The respondent also refused remedial massage treatment in a separate decision also dated 10 September 2024, MAI documents page 33.
[13] MAI documents, page 27
On 19 September 2024 the applicant sought internal review of the decision dated 10 September 2024.
In a supplementary report for the respondent dated 3 October 2024[14] Dr Powell said:
(a)The medical evidence indicated that the applicant was suffering from severe right hip osteoarthritis, a long standing pre-existing condition.
(b)Contemporaneous evidence indicated that the accident was at the minor end of the spectrum and the applicant was not aware of any symptoms at the time of the accident.
(c)Because the accident was minor the forces involved were minimal. The applicant’s vehicle was a large 4 wheel drive and she was appropriately restrained and the transmission of forces across the right hip were likely to be extremely minor.
(d)The accident was certainly not the cause of the degenerative changes identified on a subsequent MRI.
(e)The contemporaneous medical evidence was that the symptoms developed several months after the accident and while there had been a deterioration in her condition, this needed to be considered in the context of multiple concurrent claims, longstanding musculoskeletal issues, medication use, and some significant mental health issues.
(f)There was always a point in time where an advanced asymptomatic degenerative pathology becomes symptomatic, including in response to an aggravating or precipitating incident. However, if that was to be the case there would generally be a tight temporal relationship which was not present in the applicant’s case.
(g)The applicant would have required total hip replacement surgery at or about the same time irrespective of any contribution from the motor vehicle accident.
[14] MAI documents, page 99
The internal review was conducted and a decision issued on 3 October 2024 (the reviewable decision).[15] The reviewable decision:
(a)set out that among the information used in the conduct of the review was Dr Powell’s supplementary report of 3 October 2024;
(b)cited the findings of Dr Powell’s 3 October 2024 report, including that he had concluded the accident had not led to a deterioration or worsening of the degenerative right hip osteoarthritis condition given the delayed onset of symptoms and a marked degenerative pathology evident on MRI;
(c)found the applicant’s need for the surgery requested was not related to an injury sustained in the 2 February 2024 accident and it was therefore not reasonable and appropriate; and
(d)affirmed the initial decision of 10 September 2024 that the respondent would not pay for the cost of the applicant’s right total hip replacement.
[15] MAI documents, page 48
On 7 November 2024 the applicant lodged an application with the Tribunal seeking external review of the respondent’s reviewable decision of 3 October 2024 under section 193 of the MAI Act.
Documents and submissions available to the Tribunal
The Tribunal had available to it the following documents when considering the matter:
(a)Documents containing all available information to the decision-maker when the reviewable decision was made by the respondent (MAI documents).
(b)Applicant’s submissions dated 26 March 2024.
(c)Respondent’s submissions dated 11 April 2024.
Summary of applicant’s submissions
The applicant had reported hip pain during her presentation to Canberra Hospital on 22 March 2024, within two months of the accident.
The surgery requested by Dr Burns is a treatment and care expense directly related to an injury she sustained in the motor accident, that injury being her previously asymptomatic right hip osteoarthritis.
Given that Dr Burns, an appropriately qualified orthopaedic surgeon, had requested the treatment from the respondent, he must have had a belief that the source of her hip pain was the accident.
It was not in dispute that the surgery proposed by Dr Burns was entirely appropriate for the management of the end stage osteoarthritis the applicant had been diagnosed with.
The reviewable decision of 3 October 2024 made errors of fact in: (a) erroneously relying on the reports of Dr Powell; (b) misidentifying the date that treatment had first been sought for hip symptoms; and (c) failing to properly consider the medical opinions of the applicant’s treating medical practitioners.
These factual errors lead to legal error through the misapplication of sections 120 and 126 of the MAI Act.
A further legal error was a failure to provide procedural fairness in that the applicant was not given the opportunity to comment on Dr Powell’s supplementary report dated 3 October 2024 before the internal review decision was made, also on 3 October 2024.
The applicant sought orders that the respondent’s decision of 3 October 2024 be set aside and that the respondent fund her right hip total replacement surgery.
Summary of respondent’s submissions
The respondent confirmed that it relied on the finding of the internal review decision that the total hip replacement surgery was not related to personal injury sustained in the motor accident on 2 February 2024.
Dr Powell had not concluded in his report of 23 August 2024 that the accident had played a causative role in the applicant’s advanced end stage osteoarthritis and the need for a right total hip replacement was not required on the basis of any injury sustained in the motor vehicle accident.
The internal review decision set out the available evidence and the reasons for the decision and was conducted with reference to the MAI Act, the Guidelines, and the Regulations. No further information had been received since the internal review was conducted which would alter the respondent’s prior determination.
While the internal reviewer had given weight to Dr Powell’s supplementary report dated 3 October 2024, by then the issues were well traversed and there was nothing in it that would cause surprise. The reason the supplementary report had not been provided to the applicant for comment was because the respondent had strict statutory timeframes and it was required to make the internal review decision the same day Dr Powell’s report was received. The respondent would have been criticised had it not obtained the further report or made a decision on 3 October 2025.
The respondent sought an order that the internal review decision dated 3 October 2024 be affirmed.
Relevant law
Under the MAI Act, a person injured in a motor accident is entitled to treatment and care benefits for treatment and care expenses.[16]
[16] MAI Act section 112(1) and (2)
Section 113 of the MAI Act provides “treatment and care expenses”:
(a)means expenses incurred by the injured person in providing for the injured
person’s treatment and care; but
(b) does not include expenses incurred for treatment and care—
i.that was not reasonable and necessary; or
Note Section 120 deals with deciding whether treatment and care is reasonable and necessary.
ii.that did not relate to a personal injury sustained in the motor accident…
Section 110(1)(a) of the MAI Act provides that “treatment and care” includes medical treatment.
Section 188(2) of the MAI Act provides that the conduct of an internal review must comply with the MAI Guidelines.
The Motor Accident Injuries (Internal Review) Guidelines 2022 (IR Guidelines) (at 4.4.1) state that an internal review may include a document review, informal discussions with an applicant, a teleconference, a video conference or a face-to-face meeting.
Section 197 of the MAI Act provides:
In deciding an application for external review of an ACAT reviewable decision, the ACAT must, by order—
(a) affirm the decision; or
(b) amend the decision; or
(c) set aside the decision and—
(i) make a substitute decision; or
(ii) remit the matter for reconsideration by the insurer that made the
decision (the decision-maker) in accordance with any direction of the
ACAT.
In deciding the application for external review, the ACAT must only consider the information that was available to the decision-maker when the decision was made.
In conducting this review, section 193(1) of the MAI Act provides that the role of the Tribunal is to determine whether the reviewable decision is affected by any errors of law or fact.[17] The reviewable decision can only be set aside or amended if it was made by engaging in an error of law or by relying on an error of fact.[18] The review conducted by the Tribunal is not a merits review.
[17] Neish v Insurance Australia Limited CAN 000 016 722 trading as NRMA [2022] ACAT 24 at [19]
[18] Neish at [19]
The Tribunal has previously found that in the context of an internal review under the MAI Act:
procedural fairness requires that an applicant is provided with an opportunity to respond to any information relied upon by the reviewer when reviewing the decision.[19]
[19] Bothe v AAI Limited ACN 005 297 807 trading as GIO [2022] ACAT 12 at [45]
And with reference to Kioa v West[20], the Tribunal found:
Procedural fairness and its requirement of the fair hearing rule means that if a document is to be relied upon to make a decision about a person’s interests, a reasonable opportunity needs to be provided to the person first so that they may comment on the document before the decision is made.[21]
Was there an error of law?
[20] [1985] HCA 81; 159 CLR 550; 60 ALJR 113; 62 ALR 321
[21] Neish at [71]
The internal review decision of 3 October 2024 noted that among the information considered in making the decision was Dr Powell’s supplementary report also dated 3 October 2024.
The internal review decision cited extracts from Dr Powell’s 3 October 2024 supplementary report about the deterioration or worsening of the applicant’s degenerative right hip osteoarthritis.
There is no evidence that the respondent provided the applicant with any opportunity to comment on Dr Powell’s supplementary report as considered by the decision-maker during the review, though it contains information which was relevant to the issue under review.
It is possible that had the applicant been given an opportunity to comment on Dr Powell’s supplementary report and to provide comment on the conclusions the reviewer had drawn from it before the review was finalised, she would have been able to provide information herself or from her medical practitioners which was relevant to the review. For instance, the applicant could have corrected Dr Powell’s understanding of when she had first sought treatment for right hip symptoms.
Any information provided by the applicant may not have been determinative of whether the total hip replacement recommended by Dr Burns was the result of the injury she sustained in the motor accident on 2 February 2024, but it would have been information that the reviewer would have had to consider in reaching the reviewable decision and it is possible it may have changed the outcome of the 3 October 2024 decision.
The Tribunal acknowledges the respondent’s submission that it had a legislative obligation to make the internal review decision the same day it received Dr Powell’s supplementary report. However, in relying on that report (that the applicant was unaware of) without giving her an opportunity to comment on it or be heard the applicant was denied procedural fairness during the internal review process. This breach of the hearing rule amounts to an error of law.
This means the reviewable decision must be set aside.
The Tribunal does not have any medical or other evidence before it that addresses Dr Powell’s supplementary report of 3 October 2024 and therefore cannot make a substituted decision as to whether the right hip total replacement surgery was reasonable and necessary as a result of the motor vehicle accident on 2 February 2024.
That being the case, the matter is remitted to the respondent for reconsideration in accordance with the MAI Act and the MAI Guidelines.
Costs
48.Section 198 of the MAI Act allows the Tribunal to make a costs order with regard to external review proceedings under that Act. The basis by which costs may be recovered are set out in the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020.
The Tribunal has made directions for the parties to confer about costs and provide the Tribunal with an agreed position, and to make and respond to any application for costs if they cannot agree.
The Tribunal proposes to decide any costs application on the basis of documents, without the parties, their representatives or witnesses appearing at a hearing. The Tribunal has made directions allowing the parties to make representations about that proposal.

ORDER

Having found that the reviewable decision of 3 October 2024 was affected by an error of law, the Tribunal orders that:

The internal review decision of 3 October 2024 rejecting liability for defined benefits is set aside and the matter remitted to the respondent for reconsideration in accordance with the Motor Accident Injuries Act 2019 and the relevant Motor Accident Injuries Guidelines.
The respondent is to pay the applicant’s costs, as agreed or assessed, in accordance with section 198 of the MAI Act and the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020.
If the parties provide the Tribunal with proposed consent orders, the beneficiary of those orders is to give to the Tribunal and the other party itemised details of the costs in accordance with clause 6 of the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020, within 14 days of this decision.
The Tribunal notifies the parties that it proposes to decide any costs application on the basis of documents, without the parties, their representatives or witnesses appearing at a hearing.
If the parties do not reach an agreed position on costs:
(a)An application for costs, including:
i.evidence and submissions in support,
ii.itemised details of the costs in accordance with clause 6 of the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020,
iii.the amount of costs claimed,
is to be provided to the Tribunal and the other party within 21 days of this decision, along with any representations about the proposal to decide any costs application on the basis of documents;
(b)Any response to an application for costs, including evidence and submissions in support, is to be provided to the Tribunal and the other party within 28 days of this decision, along with any representations about the proposal to decide any costs application on the basis of documents.

And the Tribunal notes:

If a costs application is made, the Tribunal will decide whether or not to determine the application on the basis of documents or whether to list the application for a hearing.

………………………………..

Member J Hanton

Date of hearing:	17 April 2025
Solicitors for the Applicant:	Mr S Wolfhagen, Maliganis Edwards Johnson
Counsel for the Respondent:	Mr B Wilson
Solicitors for the Respondent:	Mr A Crowe, Hall & Wilcox

[2025] ACAT 50

4 July 2025

Key Legal Topics

Areas of Law

Civil Litigation & Procedure

Legal Concepts

Limitation Periods

Procedural Fairness

Reconsideration

Motor Accident Injuries