Insurance Australia Limited v Salvadori

[2019] NSWSC 1470

Supreme Court

New South Wales

Medium Neutral Citation:

Insurance Australia Limited v Salvadori and Ors [2019] NSWSC 1470

Hearing dates:

17 October 2019, 29 October 2019

Date of orders:

29 October 2019

Decision date:

29 October 2019

Jurisdiction:

Common Law - Administrative Law

Before:

Johnson J

Decision:

1. Extend time to 8 May 2019 for commencement of these proceedings.
2. Summons dismissed.
3. The Plaintiff is to pay the First Defendant’s costs of the proceedings with those costs to be payable on an indemnity basis on and from 16 October 2019.
4. No order as to costs with respect to the Second and Third Defendants.

Catchwords:

ADMINISTRATIVE LAW – judicial review of decision of Medical Assessor and Proper Officer of SIRA – where Insurer alleges that an unlawful direction was given to claimant by Medical Assessor concerning assessment of range of movement during clinical examination – whether decision of Proper Officer infected by error – whether any practical difference between “pain” and “discomfort” –– no error or illegality demonstrated – summons dismissed - claim for indemnity costs arising from offer of compromise - costs ordered on indemnity basis on and from 16 October 2019

Legislation Cited:

Civil Procedure Act 2005
Motor Accidents Compensation Act 1999
Uniform Civil Procedure Rules 2005

Cases Cited:

Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58
Minister of Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30
Rodger v De Gelder (2015) 71 MVR 514; [2015] NSWCA 211

Texts Cited:

American Medical Association “Guides to the Evaluation of Permanent Impairment” (4th edn)

  The Motor Accident Permanent Impairment Guidelines

Category:

Principal judgment

Parties:

Insurance Australia Limited t/as NRMA Insurance (Plaintiff)
Maria Salvadori (First Defendant)
State Insurance Regulatory Authority (Second Defendant)
Medical Assessor Dr Eugene Gehr (Third Defendant)

Representation:

Counsel:

 

17 October 2019
Mr M Robinson SC; Ms J Gumbert (Plaintiff)
Mr A Stone SC; Ms M Holz (First Defendant)

 

29 October 2019
Ms OB Hermis (Solicitor) (Plaintiff)
Mr A Stone SC; Ms M Holz (First Defendant)

  Solicitors:
Sparke Helmore Lawyers (Plaintiff)
Bonura Legal (First Defendant)
Submitting appearances (Second and Third Defendants)

File Number(s):

2019/143343

Publication restriction:

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Judgment

1. JOHNSON J: By Summons filed on 8 May 2019, the Plaintiff, Insurance Australia Limited (“the Insurer”), seeks prerogative relief in judicial review proceedings against the First Defendant, Maria Salvadori (“Ms Salvadori”), the Second Defendant, State Insurance Regulatory Authority (“SIRA”) and the Third Defendant, Medical Assessor Dr Eugene Gehr (“the Medical Assessor”).

2. The Insurer’s claim for relief concerns a decision made by the Medical Assessor under s.61 Motor Accidents Compensation Act 1999 (“MAC Act”) and the subsequent decision of the Proper Officer of SIRA (“the Proper Officer”) under s.63 MAC Act.

Hearing of the Summons

3. The hearing proceeded before me on 17 October 2019. Mr Robinson SC and Ms Gumbert of counsel appeared for the Insurer. Mr Stone SC and Ms Holz of counsel appeared for Ms Salvadori. In accordance with usual practice, submitting appearances were filed on behalf of SIRA and the Medical Assessor.

4. By consent, a Court Book was tendered and became Exhibit A in the proceedings. The critical documents in the Court Book for the purpose of these proceedings were the certificate of the Medical Assessor under s.61 MAC Act dated 5 October 2018 (pages 31-47) and the Statement of Reasons dated 1 February 2019 of Margot Undercliffe, Proper Officer, under s.63 MAC Act (pages 94-98).

5. Written submissions were filed on behalf of the Insurer and Ms Salvadori and counsel spoke to those submissions at the hearing.

6. The Insurer requires an extension of time under Rule 59.10 Uniform Civil Procedure Rules 2005 (“UCPR”) to commence proceedings on 8 May 2019, some seven days outside the period specified in the UCPR. Ms Salvadori does not object to the Insurer having an extension of time. The Insurer will be granted an extension of time until 8 May 2019 to bring the present proceedings.

Factual Background

7. The background to the present proceedings is not disputed.

8. Ms Salvadori was injured in a motor vehicle accident that occurred at Ingleburn on 31 March 2017. The Insurer, which trades as NRMA, is the CTP insurer of the vehicle at fault in that accident.

9. Ms Salvadori’s entitlement to monetary damages for non-economic loss pursuant to s.131 MAC Act was in dispute and a medical assessment of her degree of permanent impairment was required to ascertain whether her whole person impairment (“WPI”) was greater than 10%. Ms Salvadori made an application to the Medical Assessment Service of SIRA for assessment of WPI under s.58(1)(d) MAC Act.

10. On 27 September 2018, the Medical Assessor, who was appointed under s.59 MAC Act, assessed Ms Salvadori.

11. The Medical Assessor issued a certificate and reasons on 5 October 2018, certifying that Ms Salvadori’s WPI caused by the accident was greater than 10%. The injuries that gave rise to the WPI assessment were identified as follows by way of degree of permanent impairment:

1. cervical spine - 5% WPI;

2. thoracic spine - 5% WPI;

3. left shoulder - 8% WPI.

12. Applying the relevant provisions (which results in some reduction when combining multiple substantial WPI assessments: see Ms Salvadori’s written submissions dated 25 July 2019 at [20]), the final permanent impairment percentage assessment was 17% (Exhibit A, page 47).

13. On 28 November 2018, the Insurer made an application seeking a review of a medical dispute under s.63 MAC Act (Exhibit A, pages 48-56).

14. On 1 February 2019, the Proper Officer gave reasons for the purpose of s.63 MAC Act stating that she was not satisfied there was reasonable cause to suspect that the medical assessment was incorrect in a material respect so that the review application was dismissed (Exhibit A, pages 94-98).

15. On 8 May 2019, the Insurer commenced the present proceedings seeking prerogative relief with respect to the decisions of the Medical Assessor dated 5 October 2018 and the Proper Officer dated 1 February 2019.

Relevant Provisions in the MAC Act

16. Pursuant to s.60 MAC Act, a “medical dispute” may be referred to SIRA for assessment under Part 4.3 MAC Act by either party to the dispute. Under s.61 MAC Act, a medical assessor is required to give a certificate as to the matters referred for assessment which is then conclusive evidence of the matters certified.

17. Under s.63 MAC Act, a party to a medical dispute may apply to the proper officer of SIRA to refer a medical assessment by a single medical assessor to a review panel of medical assessors for review. An application for 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: s.63(2) MAC Act. The proper officer of SIRA is to arrange for such an application to be referred to a panel of at least three 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”: s.63(3) MAC Act.

18. The Motor Accident Permanent Impairment Guidelines (effective from 1 June 2018) issued by SIRA (“the PI Guidelines”), made under s.44(1)(c) MAC Act, apply to the assessment of permanent impairment disputes by virtue of s.133 MAC Act.

19. The American Medical Association “Guides to the Evaluation of Permanent Impairment” (4th edn) (“the AMA4 Guides”) also applied to the subject assessment by way of s.133(2) MAC Act.

20. Extracts from the PI Guidelines and the AMA4 Guides will appear later in this judgment in the course of assessment of the submissions of the parties.

Alleged Errors by the Medical Assessor and Proper Officer

21. The grounds of judicial review relied upon by the Insurer are set out in the Summons. The Insurer alleges that jurisdictional error occurred and/or constructive failure of a decision maker to perform relevant duties under the MAC Act. The Insurer acknowledges (as it must) that the Court is undertaking supervisory jurisdiction concerning the lawfulness or legality of the decision and not merits review.

22. The Insurer’s complaint concerns the approach taken by the Medical Assessor during his clinical examination of Ms Salvadori on 27 September 2018. As part of the medical assessment process, the Medical Assessor undertook a clinical examination with respect to Ms Salvadori’s cervical spine, thoracic spine, lumbar spine and upper and lower extremities. Under the heading “Clinical Examination”, the Medical Assessor stated in his reasons (Exhibit A, page 35) (emphasis added):

“All measurements done with a goniometer and inclinometer. All measurements repeated three times for consistency, if required. A tape measure was used. The active range of motion, ROM, was measured with the passive range of motion reserved for clinical and diagnostic verification. The claimant was advised that examination would be with all measured movements within a pain-free range and that there might be some discomfort at the upper limit of movement which should be reported immediately and the movement will be discontinued.”

23. The Insurer submitted that instructions given by the Medical Assessor to Ms Salvadori (in the underlined portion of the preceding paragraph) were not supported by the required methodology as set out in the PI Guidelines and in the AMA4 Guides. It was submitted by the Insurer that the instruction to Ms Salvadori to report the onset of “discomfort”, following which the movement would be discontinued, was not consistent with the PI Guidelines and the AMA4 Guides in that:

1. there was nothing in either of those guidelines which requires that movement be ceased on the onset of discomfort;

2. it was inconsistent with the requirement to record maximum range of movement, for movement to be ceased on the onset of discomfort.

24. The Insurer submitted that the Medical Assessor’s instructions were legally incorrect (having regard to the relevant guidelines) and that the Medical Assessor had erred in so providing those instructions. It was submitted that these “unlawful instructions” affected the entirety of the methodology of the assessment of the shoulders as the measurements were ceased at the onset of discomfort rather than at the maximum range of movement.

25. The Insurer submitted that this constituted error on law on the face of the record or an error so fundamental as to constitute a jurisdictional error: Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58 at [14]; Minister of Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 at [82]; Rodger v De Gelder (2015) 71 MVR 514; [2015] NSWCA 211 at [95].

26. It is appropriate to set out part of the Statement of Reasons of the Proper Officer to which submissions were directed in this Court. The Proper Officer said (Exhibit A, pages 95-96) (emphasis added):

“Incorrect methodology

6.   On page 5 of the Certificate, the Assessor states:

‘The claimant was advised that examination would be all measures movement within a pain-free range and that there might be some discomfort in at the upper limit of the movement which should be reported immediately and the movement will be discontinued.’ [emphasis added by the Proper Officer]

7.   The applicant submits:

‘The insurer respectfully submits the instructions given by the Assessor does not appear to be supported by the methodology as described in the Guidelines and Guides. By ceasing active range of motion at the onset of pain or discomfort, the claimant would have likely not reached the 'maximum' range of motion possible. The difference in impairment between the maximum active range of motion possible and the assessed range of motion would be equitable to making a 'separate allowance for permanent impairment due to pain'. Thus, it would appear that the indicated methodology would overestimate the claimant's permanent impairment given that although the claimant is likely able to move beyond the recorded range of motion stated in the MAS Certificate. The recorded range of motion is not a true reflection of the claimant's capacity as the claimant appears to have been instructed to cease prematurely.’

8.   The respondent submits that there is nothing within clause 1.38 of the Guidelines that compels an assessor to direct a claimant to push their active range of movement to the pain and experiencing pain. They submit that clause 1.38 of the Guidelines says that ‘the allowance of 8% for Ms Salvador's restricted range of movement in her left shoulder incorporates all the allowance for any pain on such restricted range of movement that the NSW parliament intended to permit. There can be no 'topping up' of the 8% with an additional allowance if there is more unusual pain levels associated with this restricted range of movement in this specific case’.

9.   The applicant appears to be submitting that an assessor while examining a claimant as part of the dispute resolution process, should push that claimant in the range of motion assessment to a point of pain and discomfort, which could potentially lead to further injury. Whilst there is nothing in the Guidelines or the Guides that specifically addresses this issue, it is difficult to believe that a scheme which aims to assist in the recovery of an injured claimant would propose such a methodology as being appropriate.

10.   As noted by the applicant, pain may result in limiting the active range of motion. I do not agree that if pain limits the active range of motion, that the range recorded is not the claimant's active range of motion. During an assessment of range of motion, impairment is assessed because of a loss in the range of motion in one of the planes. There is nothing in the Guidelines or Guides to indicate that the loss cannot be due to pain or discomfort.

11.   Although I acknowledge that clause 1.38 of the Guidelines states that an assessor ‘should make no separate allowance for permanent impairment due to pain’, I am not satisfied that this is what the Assessor has done when assessing the claimant. The Assessor has assessed the claimant's range of motion and although that range of motion was limited due to pain, that does not mean he has made any allowance for pain. As submitted by the respondent, there can be no ‘topping up’ of the 8% with an additional allowance for pain levels associated with the restricted range of motion, and the Assessor has made no such allowance.

12.   It follows that I am not satisfied that the Assessor has erred in his methodology nor in his instructions to the claimant. I do not accept that a claimant should be put in pain for the purpose of assessing impairment. I am not satisfied of reasonable cause to suspect the assessment is incorrect in a material respect on this ground.”

27. The Insurer submitted that the Proper Officer’s decision under s.63 MAC Act was invalid because it relied on an invalid medical assessment decision. It was submitted, in the alternative, that the Proper Officer erred in making her decision by wrongly finding that the Medical Assessor had not erred in the methodology used to conduct his assessment. The Insurer submitted that integral to the Proper Officer’s decision was her finding that Ms Salvadori should not be put in “pain” for the purpose of the assessment. It was submitted that, in making this finding, the Proper Officer misunderstood and mischaracterised the nature of the Medical Assessor’s instructions to Ms Salvadori and the nature of the insurer’s argument to the Proper Officer which referred to the assessment of range of movement ceasing at the onset of discomfort.

28. The Insurer submitted that “discomfort” is not the same as “pain” and that the Proper Officer had erred in conflating the two and in failing to understand and respond to the evidence and submissions before her.

29. The Insurer submitted that the Proper Officer had erred in law and had effected a denial of procedural fairness to the Insurer.

30. By reason of the alleged errors on the part of the Medical Assessor and the Proper Officer, the Insurer submitted that the decision of each of them was void.

31. Neither the PI Guidelines nor the AMA4 Guides define “active” or “passive” range of movement. Nor do the Medical Assessor or the Proper Officer define these terms. The parties accepted that these terms are taken to be common medical knowledge. It was common ground between the parties that an “active range of movement” involves the examinee moving a body part in accordance with directions whereas a “passive range of movement” involves the examiner engaged in moving the body part.

32. Ms Salvadori submitted that the direction of the Medical Assessor concerning the reporting of “discomfort”, with movement thereafter to be “discontinued”, was not contrary to any provision in the MAC Act nor in the PI Guidelines or the relevant parts of the AMA4 Guides. Ms Salvadori pointed to parts of the AMA4 Guides and, in particular, the provision that the “physician must utilise the entire gamut of clinical skill and judgment in assessment whether or not the results of measurements or tests are plausible and relate to the impairment being evaluated”.

33. Ms Salvadori submitted that it would be contrary to the proper exercise of clinical judgment in the practice of medicine for a medical assessor to require an examinee to undertake and persist with a painful movement with the possible risk of injury resulting.

34. To the extent that the Insurer sought to distinguish the terms “discomfort” and “pain”, Ms Salvadori noted that there was no textual or dictionary support for this distinction. It was submitted that the term “pain” is a synonym for “discomfort” and vice versa.

35. To the extent that the PI Guidelines refer to “maximum effort”, Ms Salvadori submitted that there is nothing within the PI Guidelines or the AMA4 Guides that suggests that maximum effort requires an examinee to incur discomfort/pain and the risk of further injury during an examination.

36. Ms Salvadori submitted that the only standard or test that makes any sense from the perspective of both “risk of injury” and “consistency of measurement” is to stop movement at the point of incurring discomfort/pain. It was submitted that this was the approach adopted by the Medical Assessor and the approach which the Proper Officer endorsed.

37. Ms Salvadori submitted that no error had been demonstrated which would attract the grant of relief sought in the Summons. Further, and in the alternative, Ms Salvadori submitted that even if there was some error which affected the WPI percentage assessment concerning the shoulder examination, Ms Salvadori otherwise had obtained a 10% WPI assessment so that the proceedings were futile.

Decision

38. The clinical examination of Ms Salvadori was being undertaken by a medical practitioner who was appropriately and suitably qualified for appointment as a medical assessor under s.59 MAC Act. A clinical examination of Ms Salvadori was a necessary part of the medical assessment process. The clinical examination to be undertaken related, in particular, to Ms Salvadori’s shoulders together with areas of the spine.

39. In circumstances where the Insurer asserts illegality in the approach adopted by the Medical Assessor in giving the impugned direction (at [22] above) to Ms Salvadori, it is necessary to consider whether any statutory provision or instrument required the Medical Assessor to adopt a particular approach or to avoid a particular approach.

40. It was common ground that no provision in the MAC Act bore directly on this issue. Rather, the Insurer pointed to provisions in the MAC Act (referred to earlier) which attracted the operation of the PI Guidelines and parts of the AMA4 Guides.

41. Clause 1.2 of the PI Guidelines refers to the AMA4 Guides. Clause 1.18.2 of the PI Guidelines provides that an assessment of the degree of permanent impairment involves three stages, including an interview and a clinical examination.

38. Clause 1.38 of the PI Guidelines states:

“Pain

1.38   Some tables require the pain associated with a particular neurological impairment to be assessed. Because of the difficulties of objective measurement, medical assessors must not make separate allowance for permanent impairment due to pain, and Chapter 15 of the AMA4 Guides must not be used. However, each chapter of the AMA4 Guides includes an allowance for associated pain in the impairment percentages.”

43. The effect of Clause 1.38 is to exclude Chapter 15 of the AMA4 Guides so that separate allowance for permanent impairment due to pain is not permitted. However, I accept the submission of Ms Salvadori that this does not operate to exclude a scenario where a claimant is unable to move a limb beyond a certain point because of pain or discomfort. That scenario, which reflects the present case, does not involve a separate allowance for permanent impairment due to pain, but a separate allowance for an injury where there is limited movement given pain which restricts the range of movement in the person.

44. Clauses 1.47-1.50 of the PI Guidelines deal with assessment of the upper extremity. Those clauses state:

“Introduction

1.47   The hand and upper extremity are discussed in Section 3.1 of Chapter 3 of the AMA4 Guides (pages 15-74). This section provides guidance on methods of assessing permanent impairment involving the upper extremity. It is a complex section that requires an organised approach with careful documentation of findings.

Assessment of the upper extremity

1.48   Assessment of the upper extremity involves a physical evaluation that can use a variety of methods. The assessment, in these Guidelines, does not include a cosmetic evaluation, which should be done with reference to 'Other body systems' within these Guidelines and Chapter 13 of the AMA4 Guides.

1.49   The assessed impairment of a part or region can never exceed the impairment due to amputation of that part or region. For an upper limb, therefore, the maximum evaluation is 60% WPI.

1.50   Although range of motion appears to be a suitable method for evaluating impairment, it can be subject to variation because of pain during motion at different times of examination and/or a possible lack of cooperation by the person being assessed. Range of motion is assessed as follows:

1.50.1   A goniometer should be used where clinically indicated.

1.50.2   Passive range of motion may form part of the clinical examination to ascertain clinical status of the joint, but impairment should only be calculated using active range of motion measurements.

1.50.3   If the medical assessor is not satisfied that the results of a measurement are reliable, active range of motion should be measured with at least three consistent repetitions.

1.50.4   If there is inconsistency in range of motion, then it should not be used as a valid parameter of impairment evaluation. Refer to clause 1.40 of these Guidelines.

1.50.5   If range of motion measurements at examination cannot be used as a valid parameter of impairment evaluation, the medical assessor should then use discretion in considering what weight to give other available evidence to determine if an impairment is present.”

45. Fairly read, I do not consider that anything contained in these provisions, including Clause 1.50, bears upon the impugned direction in this case. These paragraphs provide general guidance, but do not assist the Insurer’s argument that the direction in this case was unlawful.

46. It is appropriate to refer to parts of the AMA4 Guides to which the Court was taken during submissions. Chapter 3 of the AMA4 Guides is entitled “The Musculoskeletal System”. At the commencement of this chapter, it is said that the “Sections describe and recommend methods and techniques of determining impairments due to … restriction of motion …” (page 3/1).

47. The following also appears (page 3/1):

“In general, the impairment percents shown in this chapter make allowance for the pain that may accompany the musculoskeletal system impairments.”

48. Reference is made to examinations for determining musculoskeletal system impairments (pages 3/1-3/2) (emphasis added):

“Examination for determining musculoskeletal system impairments are based on traditional approaches for recording the medical history and performing the physical examination. The impairment examination and report should not be separated from the generally accepted principles of medical practice or the consensus of medical knowledge and experience.

The measurement techniques recommended in this chapter are current and are as simple, practical, and scientifically sound as possible. The tests should be done accurately and precisely. For evaluating ranges of motion of the upper and lower extremities, small and large goniometers are needed. For evaluating the spine, either two mechanical inclinometers are needed, or a single, computerized inclinometer is needed that is capable of calculating compound joint motion. These instruments are described further in Section 3.3 (p. 113).

The tables of Chapter 3 are based on the active range of motion; which is determined with the patient's full effort and cooperation. The recommended tests should be performed and reported according to Guides recommendations, so they can be repeated by others and the results compared. Comparing the patient's active range of motion with the passive range of motion provides useful information.

Evaluating the range of motion of an extremity or of the spine is a valid method of estimating an impairment. To some extent, however, the range of motion is subject to the patient's control. The results of such evaluations should be consistent and concordant with the presence or absence of pathologic signs and other medical evidence.”

49. Part 3.1(a) of the AMA4 Guides concerns evaluation of the hand and upper extremity. Reference is made to evaluation of restriction of motion in the upper extremity (page 3/15):

“In evaluation of restriction of motion of the hand and upper extremity, the full range possible of active motion should be carried out by the subject and measured by the examiner. Several repetitions may be performed to obtain reliable results. The examiner may check the range of passive motion by applying moderate pressure to the joint. However, in the Guides, the range of active motion takes precedence. If a joint cannot be moved actively by the subject or passively by the examiner, the position of ankyloses should be recorded.”

50. Part 3.1(j) concerns the shoulder. Under a heading “Abnormal Motion of Shoulder”, it is said that the “shoulder functional unit represents 60% of upper extremity function” (page 3/41) and that the “shoulder has three functional units of motion, each contributing a relative value to shoulder function”.

51. Instruction is given with respect to measuring flexion and extension of the shoulder with a requirement to “Measure the maximum flexion and extension and record the goniometer readings” (page 3/42). A further direction states “Measure the maximum abduction and adduction and record the goniometer readings” (page 3/43). A further instruction states “Measure the maximum internal and external rotation and record the goniometer readings” (page 3/44).

52. Earlier in an introductory chapter, the following was said with respect to pain (page 2/9):

“In general, the impairment percents shown in the chapters that consider the various organ systems make allowance for the pain that may accompany the impairing conditions. Chronic pain, also called the chronic pain syndrome, is evaluated as described in the chapter on pain (p. 303).”

53. Critical to the Insurer’s argument is the contention that the statement made by the Medical Assessor to Ms Salvadori (at [22] above) was unlawful. It was submitted that this statement or direction was contrary to law by reference to parts of the PI Guidelines and the AMA4 Guides to which reference has been made.

54. Senior counsel for the Insurer was asked by the Court during the hearing to identify what part of the Medical Assessor’s direction was unlawful and what ought to have been said, in the Insurer’s submission, to constitute a lawful direction. After some discussion, Mr Robinson SC submitted that a lawful direction would have been along the lines of “Give me your full effort and co-operation and do the best you can”, without any reference being made to discomfort or ceasing movement in the event of discomfort (T10-11, 17 October 2019). Mr Robinson SC later qualified this by submitting that “no formulation at all is better than an unlawful one” (T30, 17 October 2019).

55. Mr Robinson SC sought to distinguish the terms “pain” and “discomfort”. Whilst accepting that these terms were not to be considered in an abstract way, senior counsel for the Insurer contended that there was a significant distinction between these terms in the context of this case. The following discussion serves to illustrate the point (T12.24-46, 17 October 2019):

“HIS HONOUR: …. One is talking about here someone dealing with upper extremities. The question of discomfort, when the examination is dealing with the parts of the body said to be affected, it is not an abstract concept.

ROBINSON: No, your Honour.

HIS HONOUR: Is it the concept of … discomfort by reference to the parts of the body under examination such as to encompass pain? So, effectively, they are interchangeable terms.

ROBINSON: No. No, your Honour. If there is any doubt about it, the context that the word discomfort is in the same passage that we are looking at.

In other words, the medical assessor determined that, what we are doing, ‘all measured movements must be determined within a pain-free range’.

So, he is not talking about pain here. He says, ‘At the moment of discomfort’. Which is not pain. If he wanted the claimant to stop at the first onset of pain, this doctor would have said and should have said: ‘Please stop at the onset of pain’. That is not what he said here. He said: ‘Please stop at the onset of discomfort’. In which case, we say there is a problem. It is not in accordance with the Act and the Guidelines.”

56. In a continuing effort to understand the Insurer’s submission, the following discussion occurred (T17.8-25, 17 October 2019):

“HIS HONOUR: This isn't like a lever which can only move to a certain point because that is as far as it can go.

You are talking here about the human body. If there are said to be some injury, or impact on the human body, then it is trite to say, of course, that they can get to a point where … there is a level of discomfort or pain. It would be quite a large step to suggest that one should say: "You keep moving your arm even if it's causing pain so that I can see how far you can get".

ROBINSON: Your Honour, I haven't suggested that.

HIS HONOUR: That is what I am trying to understand. In a way I think that is what this case is about; understanding what the insurer says the examiner was required to do.

ROBINSON: We say what the examiner is required to do is what is required by the AMA4 Guides, the Permanent Impairment Guides and the motor legislation - that is, full effort and co operation, and as full a range as possible.”

57. Soon after, Mr Robinson SC submitted (T17.37-48, 17 October 2019):

“ROBINSON: … In other words, I need you to show me your full effort and co operation. Or, I need you to show me as full a range as possible in how you can move your arm. That would be a perfectly lawful, appropriate thing.

HIS HONOUR: And say nothing about discomfort or pain?

ROBINSON: Say nothing about the discomfort or pain.

If a patient is going to be in pain, presumably, they would say something. If needs be, and if they express concern about pain, you could say: ‘Stop at the point where it hurts’. But it is not necessary, I submit, to go that far. Certainly not necessary.”

58. Expanding upon the written submissions for Ms Salvadori, Mr Stone SC submitted that the Medical Assessor was entitled to use his judgment arising from common and acceptable medical practice with the concept of “full effort and co-operation” to be considered in the context of a medico-legal examination. Mr Stone SC submitted that medical assessors as medical practitioners are bound by the Hippocratic oath not to put patients at risk of injury and were undertaking their duties (as was this Medical Assessor) within a system of compensation that is designed to compensate persons for, amongst other things, loss of capacity to use their limbs as a consequence of pain (T27-28, 17 October 2019). Such an approach is consistent with the objects of the MAC Act, in particular s.5(1)(a) MAC Act.

59. The Insurer contends that there is error of law on the face of the record or error so fundamental as to constitute jurisdictional error in the approach adopted by the Medical Assessor in the impugned direction. It is necessary for the Insurer to demonstrate that the Medical Assessor identified a wrong issue or asked himself a wrong question or ignored relevant material or relied on irrelevant material or adopted an erroneous approach in reaching his conclusion, or that he misconceived his duty and failed to apply himself to the real question to be decided or misunderstood the nature of the opinion to be formed.

60. It is necessary to keep in mind the practical context in which events of the type under consideration occur. Persons to be examined by medical assessors under the MAC Act come from the diverse and multicultural community of modern Australia. Ms Salvadori was born in Uruguay and, as at the date of assessment on 27 September 2018, was 48 years old. She had been effectively a stay-at-home mother and lived with her daughters and grandchildren at the time of the examination.

61. In considering the Insurer’s submissions concerning the terms “pain” and “discomfort”, it is necessary to keep in mind that these are not statutory terms or words which are used in the PI Guidelines or the AMA4 Guides in a manner which provides for either a prescribed or prohibited formula of words. A medical assessor will examine a person in the practical context of an assessment of the alleged injuries and the degree of impairment which is said to flow from those injuries.

62. In this context, I accept that the terms “pain” and “discomfort” are effectively interchangeable. The Medical Assessor was examining Ms Salvadori’s shoulders and spine to determine the degree of impairment flowing from injuries sustained in a motor vehicle accident. Although the term “discomfort” may be capable of wider meaning in other contexts, there is no practical difference between “pain” and “discomfort” in the present context. It is noteworthy, in any event, that the Macquarie Dictionary includes the word “pain” as a meaning of “discomfort”.

63. In my view, the difficulty experienced by senior counsel for the Insurer in articulating the precise alleged illegality, and in spelling out what was said to be the appropriate legal formulation serves to demonstrate the deficiencies in the Insurer’s argument.

64. There is nothing in the MAC Act, the PI Guidelines or the AMA4 Guides which prohibited the words used by the Medical Assessor or required the use of words suggested by senior counsel for the Insurer (at [54]-[57] above).

65. To inform an examinee that the examination would be “with all measured movements within a pain-free range” and that “there might be some discomfort at the upper limit of movement which should be reported immediately and the movement will be discontinued” was not contrary to any lawful requirement upon the Medical Assessor nor, for that matter, contrary to the Medical Assessor’s professional and ethical obligations as a medical practitioner appointed under the MAC Act to utilise his skill, clinical judgment and ethical standards for the purpose of a statutory examination and assessment.

66. I do not consider that the direction given by the Medical Assessor to Ms Salvadori was contrary to anything contained in the MAC Act, PI Guidelines or the AMA4 Guides.

67. It is, of course, not sufficient for the Insurer to assert that some other verbal formula could be used by a medical assessor during an examination. It is for the Medical Assessor, using his clinical judgment and experience to formulate the explanation or direction to be given to an examinee for the purpose of clinical examination as part of the assessment.

68. To succeed in these proceedings, it is necessary for the Insurer to demonstrate a legal obligation on the part of the Medical Assessor to have said something else to Ms Salvadori and to refrain from saying something which he did say during the examination. In my view, the Insurer has fallen far short of demonstrating error in that respect, let alone error which could justify the grant of prerogative relief in judicial review proceedings.

69. I am not persuaded that any error or illegality has been demonstrated with respect to the approach applied, and direction given, by the Medical Assessor in the course of the clinical examination of Ms Salvadori.

70. The Insurer’s challenge to the decision of the Proper Officer rises no higher than the complaint made concerning the examination by the Medical Assessor. As I am not satisfied that error is demonstrated on the part of the Medical Assessor, then a similar conclusion should be expressed with respect to the decision of the Proper Officer.

71. To the extent that the Proper Officer went further in her reasons (in paragraphs 9 and 12 at [26] above) in stating that she did not accept that a claimant should be put in pain for the purpose of assessing impairment, this is a fair comment given the arguments which had been advanced on behalf of the Insurer. After all, the Insurer’s argument before the Proper Officer, and in this Court, was that it was legally wrong for the Medical Assessor to say anything to Ms Salvadori about pain or discomfort at all. That argument meant that it was legally necessary for the Medical Assessor to require Ms Salvadori to attempt movement and continue with that attempt with the only qualification being that if Ms Salvadori stated that she felt pain, then the Medical Assessor ought then invite her to cease movement. To the extent there was a passing submission by the Insurer of a denial of procedural fairness (see [29] above), I am not satisfied that the approach of the Proper Officer operated unfairly to the Insurer.

72. For these reasons, the Insurer’s challenge to the decision of the Medical Assessor and the decision of the Proper Officer should be rejected.

73. In these circumstances, it is not necessary to consider Ms Salvadori’s submissions with respect to futility beyond noting that, without the shoulder examination, Ms Salvadori had already reached a 10% WPI as certified by the Medical Assessor. Although the Insurer advanced arguments to suggest that the spinal examinations were flawed as well by the impugned direction, the Insurer would have had considerable difficulty in overcoming the futility submission if that point had been reached in these proceedings. However, the Insurer has failed to demonstrate a foundation for the grant of the relief sought so that this point in the proceedings has not been reached.

Conclusion

74. The Insurer has not made good its claim for relief with respect to the decisions of the Medical Assessor or the Proper Officer.

75. I make the following orders:

1. extend time to 8 May 2019 for commencement of these proceedings;

2. Summons dismissed;

3. the Plaintiff is to pay the First Defendant’s costs of the proceedings;

4. no order as to costs with respect to the Second and Third Defendants.

[Mr Stone SC made an application that the Plaintiff pay the costs of the First Defendant on an indemnity basis on and from 16 October 2019]

76. A short time ago, I gave judgment in this matter dismissing the Summons and making other orders, including an order that the Plaintiff is to pay the First Defendant's costs of the proceedings.

77. Having announced those orders, application was made immediately by senior counsel for the First Defendant, Mr Stone SC, for an order that the Plaintiff pay the First Defendant's costs from 16 October 2019 on an indemnity basis.

76. That application having been made, Ms Hermis, solicitor, who appears for the Plaintiff, requested a short adjournment, which was granted.

77. Upon resumption, the application was made with submissions advanced on behalf of the Plaintiff and the First Defendant. There was no application on behalf of the Plaintiff for an adjournment or for more time to consider the application.

78. In support of the application for indemnity costs from 16 October 2019, the First Defendant relies upon two letters, dated 15 October 2019, from Bonura Legal, solicitors for the First Defendant directed to the solicitors for the Plaintiff. The letters involve, firstly, the service of an Offer of Compromise, dated 15 October 2019, in which the First Defendant offered to compromise the proceedings upon the basis that the Plaintiff's Summons was dismissed, being a verdict for the First Defendant, with each party to bear its own costs.

79. The Offer of Compromise noted that it was open for acceptance until 5.00 pm on Tuesday 15 October 2019. The letter accompanying the Offer of Compromise observed that the offer was not a capitulation, as costs exceeding $20,000.00 had already been incurred on behalf of the First Defendant by that time.

80. I note that the second letter of 15 October 2019 from Bonura Legal was drawn on a mistaken basis in that it refers to the potential success of the "Plaintiff" rather than the "First Defendant" and the giving of notice of an alternative basis for seeking indemnity costs, namely, a Calderbank offer. Mr Stone SC noted that, given the deficiency in that letter, he would not seek to rely upon the second leg of the application, being the Calderbank offer.

81. Accordingly, the application is made by reference to the Offer of Compromise.

82. On behalf of the Plaintiff, it has been submitted by Ms Hermis that the offer was made on 15 October 2019, only two days prior to the scheduled hearing on Thursday 17 October 2019, and there was no sufficient time so that the Court should not give effect to the Offer of Compromise. It was submitted for the Plaintiff that the Court should leave in place the order already made - that the Plaintiff pay the First Defendant's costs in the proceedings on the ordinary basis.

83. Section 98 Civil Procedure Act 2005 provides that, subject to the rules of Court, costs are in the discretion of the Court, and the Court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

84. The First Defendant relies upon Rule 20.26 UCPR with respect to the present Offer of Compromise. It was submitted that the making of the offer two days out from the scheduled hearing date was reasonable in the circumstances of this case. The letter attaching the Offer of Compromise indicated that if more time was needed by the Plaintiff to consider the offer, then there was an invitation to contact the author of the letter. There was no such contact.

85. It is necessary to consider the nature of the proceedings. This was a claim for judicial review, in the Administrative Law List, of decisions of a Medical Assessor and a Proper Officer of the SIRA, being decisions under the MAC Act. By 15 October 2019, all written submissions had been filed and served, these being the Plaintiff's submissions in-chief, the First Defendant's submissions and the Plaintiff's submissions in reply.

86. This was a single-issue case where the question was whether error had been demonstrated such as to attract the grant of prerogative relief concerning the decisions under challenge. The judgment delivered earlier this morning contained a clear finding in favour of the First Defendant on the merits of the case.

87. I bear this in mind because it may be said, on a chronological basis, that the making of the Offer of Compromise was quite late and only two days before the hearing. However, the hearing was not one involving a claim for damages where issues of fact and law and potentially the credibility of witnesses would come into play. This was, on the face of it, a relatively straightforward administrative law challenge where both sides had a full understanding of the issues in the proceedings by 15 October 2019.

88. The decision of the Court effectively accepted the arguments of the First Defendant at the hearing.

89. There is no evidence to indicate what steps were taken (or not taken) by the Plaintiff and the Plaintiff's legal representatives after receipt of the Offer of Compromise. It seems to me that, armed with the submissions about the case, the Plaintiff and the Plaintiff's legal representatives were in a position to take advice and to make a prompt decision. There is certainly no evidence to indicate any unfairness to the Plaintiff because of the timing of the making of the Offer of Compromise.

90. The view that may be formed, in the absence of any evidence to the contrary, is that the Plaintiff considered that the matter would proceed to hearing with the Court to determine the issues in the proceedings and thus there was no response at all by the Plaintiff to the Offer of Compromise.

91. The Offer of Compromise did involve, in my view, a significant element of compromise. As I have said, these were administrative law proceedings. There is no role for an award of damages in proceedings of this sort. Either the Summons was to be dismissed, or the relief sought in the Summons was to be granted in whole or in part with costs sequences, depending upon the outcome.

92. In circumstances where the Offer of Compromise was made two days out from the hearing inviting the dismissal of the Summons on the basis that each party bear its own costs, I am satisfied there was a significant compromise on the First Defendant’s part. Having received the Offer of Compromise, the Plaintiff took no steps to accept it or to seek more time or to do other than to proceed with the hearing.

93. In the circumstances of this case, it is appropriate for the Offer of Compromise procedure to be followed through to its logical conclusion.

94. The purpose of the compromise provisions in Rule 20 UCPR is to encourage a realistic assessment of proceedings before the hearing. In my view, that is what the First Defendant invited the Plaintiff to do in this case. The Plaintiff did not respond.

95. The Court should proceed upon the basis that the consequence which follows is an order that the Plaintiff pay the First Defendant's costs on an indemnity basis from 16 October 2019.

96. Accordingly, I vary the order contained in [75](c) of the judgment delivered earlier today. I order that the Plaintiff is to pay the First Defendant's costs of the proceedings, with those costs to be payable on an indemnity basis on and from 16 October 2019.

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Decision last updated: 29 October 2019