Insurance Australia Ltd trading as NRMA Insurance v Cahill

[2025] NSWSC 828

Supreme Court

New South Wales

Medium Neutral Citation:

Insurance Australia Ltd trading as NRMA Insurance v Cahill [2025] NSWSC 828

Hearing dates:

24 July 2025

Date of orders:

24 July 2025

Decision date:

25 July 2025

Jurisdiction:

Common Law

Before:

Adamson JA

Decision:

(1)   Set aside the second defendant’s determination made on 19 December 2024.

(2) Remit the determination of the medical dispute to the third defendant for referral to a review panel, constituted by members other than those constituting the second defendant, pursuant to s 7.26 of the Motor Accident Injuries Act 2017 (NSW).

(3)   Make no order as to costs.

Catchwords:

ADMINISTRATIVE LAW — judicial review — jurisdictional error — motor vehicle accident — review panel assessed permanent impairment on the basis of an injury which had not been identified by the parties or in the material before the panel — where review panel denied procedural fairness – where review panel did not provide adequate reasons — error of law on the face of the record and jurisdictional error — decision of review panel set aside — Motor Accidents Injuries Act 2017 (NSW), ss 4.11, 7.20, 7.21, 7.26

Legislation Cited:

Motor Accident Injuries Act 2017 (NSW), ss 1.6, 1.8, 4.11, 4.12, 4.3, 4.4, 7.17, 7.20, 7.21, 7.23, 7.26

Personal Injury Commission Act 2020 (NSW), ss 18, 33

Supreme Court Act 1970 (NSW), s 69

Motor Accident Guidelines, cll 5.7, 5.8

Motor Accident Injuries Regulation 2017 (NSW), cl 4

Uniform Civil Procedure Rules 2005 (NSW), r 59.10

Cases Cited:

AAI Limited trading as GIO v Amos [2024] NSWCA 65

Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39

Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531; [2010] HCA 1

McKee v Allianz Australia Insurance Ltd (2008) 71 NSWLR 609; [2008] NSWCA 163

Pham v NRMA Insurance Ltd [2014] NSWCA 22; (2014) 66 MVR 152

Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57

Stanizzo v AAI Limited trading as GIO [2021] NSWSC 1077; (2021) 97 MVR 229

WingfootAustralia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43

Category:

Principal judgment

Parties:

Insurance Australia Ltd trading as NRMA Insurance (Plaintiff)
James Cahill (First Defendant)
Medical Review Panel constituted under s 7.26 of the Motor Accident Injuries Act 2017 (NSW) (Second Defendant)
President of the Personal Injury Commission of NSW (Third Defendant)

Representation:

Counsel:
C Allan (Plaintiff)
Submitting appearances (Defendants)

Solicitors:
Moray & Agnew (Plaintiff)
Kemp & Co Lawyers (First Defendant)
Crown Solicitor’s Office (Second and Third Defendants)

File Number(s):

2025/104854

 Decision under appeal 

Court or tribunal:

Personal Injury Commission

Jurisdiction:

Motor Accidents Division

Date of Decision:

19 December 2024

Before:

Legal Member Terence Stern OAM
Medical Assessor Thomas Rosenthal
Medical Assessor Margaret Gibson

File Number(s):

M21877/24

HEADNOTE

[This headnote is not to be read as part of the judgment]

The plaintiff, Insurance Australia Ltd trading as NRMA Insurance (the insurer), sought judicial review of a decision made by the second defendant (the review panel) on 19 December 2024 that the first defendant, James Cahill (the claimant), had suffered a non-threshold injury to his lumbar spine as a result of a motor accident on 9 July 2020 (the accident).

The claimant applied to the third defendant, the President of the Personal Injury Commission of NSW (PIC) for assessment of permanent impairment suffered as a result of injuries claimed to have been sustained in the accident. The insurer separately lodged an application with PIC for assessment as to whether the claimant’s injuries were threshold injuries. Both disputes were referred to a medical assessor.

The medical assessor found that the claimant had not suffered any injuries as a result of the accident and that any injuries were the result of his pre-existing multiple sclerosis. The claimant applied for review to a review panel.

The issue before the review panel was whether, as the claimant contended, he had at least two clinical signs of radiculopathy, a finding which would have resulted in the injury to his lumbar spine qualifying as a non-threshold injury.

The basis of the review panel’s determination that the injury was a non-threshold injury and its assessment that the claimant’s Whole Person Impairment was 5% was that the claimant had suffered a tear of his lumbar disc cartilage. None of the material before the review panel had referred to such an injury and it was not apparent on what basis the tear had been detected. The review panel had failed to notify the parties that it proposed to determine the matter on a basis which had not been raised by them.

The insurer challenged the review panel’s determination in the Supreme Court on two grounds: first, that the review panel failed to give adequate reasons; and second, that the insurer was denied procedural fairness. All the defendants filed submitting appearances.

At the conclusion of the hearing on 24 July 2025, the Court set aside the review panel’s determination and provided reasons subsequently.

Adamson JA held allowing the challenge:

Alleged failure to provide adequate reasons

1. The review panel was required to explain its actual path of reasoning in accordance with WingfootAustralia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43. It determined that the lumbar spine injury was a non-threshold injury based on a tear in the lumbar disc cartilage, but did not identify any medical evidence, clinical findings, or submissions which supported that conclusion: [31]-[34].

2. The reasons failed to disclose the reasoning process and did not meet the standard required in Wingfoot. This constituted an error of law on the face of the record: [36].

Pham v NRMA Insurance Ltd [2014] NSWCA 22; (2014) 66 MVR 152; WingfootAustralia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43, applied.

Alleged denial of procedural fairness

1. The review panel was required to afford procedural fairness by deciding the dispute on grounds raised by the parties. However, it determined that the lumbar spine injury was a non-threshold injury based on a tear in the lumbar disc cartilage, an issue not raised or put to the parties: [38].

2. This failure to notify the parties denied them the opportunity to respond and constituted both a jurisdictional error and an error of law on the face of the record: [39]-[40].

WingfootAustralia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43, applied.

McKee v Allianz Australia Insurance Ltd (2008) 71 NSWLR 609; [2008] NSWCA 163; Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39; AAI Limited trading as GIO v Amos [2024] NSWCA 65; Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531; [2010] HCA 1; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57, cited.

JUDGMENT

Introduction

1. By amended summons filed on 10 April 2025, the plaintiff, Insurance Australia Limited trading as NRMA Insurance (the insurer), seeks judicial review under s 69 of the Supreme Court Act 1970 (NSW) and this Court’s inherent jurisdiction of the decision of the second defendant (the review panel) made on 19 December 2024. The aspect of the decision which is alleged to warrant its setting aside is the determination that the injury to the lumbar spine of the first defendant, James Cahill (the claimant) is a non-threshold injury.

2. At the conclusion of the hearing on 24 July 2025, I made the orders set out at the end of these reasons, including an order setting aside the decision of the review panel. What follows are my reasons for making these orders.

3. The insurer challenges the determination on the following grounds:

1. alleged failure to give adequate reasons; and

2. alleged denial of procedural fairness.

4. The claimant, the review panel and the third defendant, the President of the Personal Injury Commission of New South Wales (PIC) have each filed submitting appearances. There is, accordingly, no active defendant to the proceedings.

5. As the proceedings were commenced by summons filed on 18 March 2025, the insurer was within the time specified in Uniform Civil Procedure Rules 2005 (NSW), r 59.10(1), being 3 months from the date of the decision.

The statutory scheme

The Motor Accident Injuries Act 2017 (NSW)

6. Before setting out the background to the current proceedings, I propose to outline the statutory scheme established by the Motor Accident Injuries Act 2017 (NSW) (the Act), which applies to motor accidents which occurred after 1 December 2017: s 1.8. Unless otherwise indicated, all references to legislation in these reasons are to the Act.

7. The claimant has no entitlement to damages if the only injuries he sustained in the accident were “threshold injuries”: s 4.4.

8. Section 1.6 relevantly defines “threshold injury” as follows:

1.6   Meaning of “threshold injury”

(1)     For the purposes of this Act, a threshold injury is, subject to this section, one or more of the following—

(a)     a soft tissue injury,

(b)     a psychological or psychiatric injury that is not a recognised psychiatric illness.

(2)     A soft tissue injury is (subject to this section) an injury to tissue that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes), but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage.

…

(4)     The regulations may—

(a)     exclude a specified injury from being a threshold injury for the purposes of this Act, or

(b)     include a specified injury as a threshold injury for the purposes of this Act.

(5)     The Motor Accident Guidelines may make provision for or with respect to the assessment of whether an injury is a threshold injury for the purposes of this Act.

…

9. The only damages that may be awarded are damages for economic loss as permitted by Division 4.2 and damages for non-economic loss as permitted by Division 4.3: s 4.3. Damages for non-economic loss are only payable if the degree of whole person impairment (WPI) as a result of injuries caused by the accident is greater than 10%: s 4.11.

10. If there is a dispute between the claimant and the insurer, damages may not be awarded for non-economic loss until a medical assessor appointed by PIC has carried out an assessment of permanent impairment under Division 7.5: s 4.12. Under Sch 2, cl 2(a), the degree of permanent impairment of the injured person that has resulted from the injury caused by the motor accident (including whether the degree of permanent impairment exceeds 10%) is declared to be a “medical assessment matter” for the purposes of Part 7 (entitled “Dispute Resolution”). In Part 7, a medical dispute means, relevantly, a dispute between a claimant and an insurer about a medical assessment matter: s 7.17(a).

11. Either party to the dispute may refer a medical dispute about a claim to the President for assessment: s 7.20(1)(a). The President is to arrange for the dispute to be dealt with by one or more assessors: s 7.20(2). The President is empowered to appoint medical assessors for the purposes of the Act: s 33(1)(b) of the Personal Injury Commission Act 2020 (NSW) (the PIC Act).

12. Section 7.21 provides in part:

7.21   Assessment of degree of permanent impairment

(1)     The assessment of the degree of permanent impairment of an injured person for the purposes of this Act is to be made in accordance with the Motor Accident Guidelines. The assessed degree of permanent impairment is to be expressed as a percentage.

(2)     Impairments that result from more than one injury arising out of the same motor accident are to be assessed together to assess the degree of permanent impairment of the injured person.

13. Section 7.23(1) requires a medical assessor to whom a medical dispute is referred to give a certificate which sets out the reasons for any finding by the medical assessor as to any matter certified in the certificate in respect of which the certificate is conclusive evidence: s 7.23(7).

14. A medical assessment may only be reviewed by a review panel if the President 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 7.26(5). The President may delegate this function: s 18(1) of the PIC Act.

15. Pursuant to s 7.26(5A), the President may constitute a review panel. The review of a medical assessment is not limited to the particular aspect that is alleged to be incorrect and is to be by way of a new assessment of all the matters with which the medical assessment is concerned: s 7.26(6). The review panel may confirm the certificate of the medical assessor or revoke it and issue a new certificate: s 7.26(7).

The Motor Accident Injuries Regulation 2017 (NSW)

16. Clause 4(1) of the Motor Accident Injuries Regulation 2017 (NSW) (the Regulation) provides:

4 Meaning of “threshold injury”, section 1.6(4) of the Act

(1)     An injury to a spinal nerve root that manifests in neurological signs (other than radiculopathy) is included as a soft tissue injury for the purposes of the Act.

…

17. The claimant relied on the words in parentheses to establish that the injury to his lumbar spine was not a threshold injury.

The Motor Accident Guidelines

18. The Motor Accident Guidelines (the Guidelines) in force at the time of the review panel’s assessment were version 9.2 which commenced on 10 November 2023.

19. The Guidelines relevantly provide:

Soft tissue assessment – injury to a spinal nerve root

5.7    In assessing whether an injury to the neck or spine is a soft tissue injury, an assessment of whether or not radiculopathy is present is essential.

5.8   Radiculopathy means the impairment caused by dysfunction of a spinal nerve root or nerve roots when two or more of the following clinical signs are found on examination when they are assessed in accordance with ‘Part 6 of the Motor Accident Guidelines: Permanent impairment’.

(a)    loss or asymmetry of reflexes (see the definitions of clinical findings in Table 6.8 in these Guidelines)

(b)    positive sciatic nerve root tension signs (see the definitions of clinical findings in Table 6.8 in these Guidelines)

(c)    muscle atrophy and/or decreased limb circumference (see the definitions of clinical findings in Table 6.8 in these Guidelines)

(d)    muscle weakness that is anatomically localised to an appropriate spinal nerve root distribution

(e)    reproducible sensory loss that is anatomically localised to an appropriate spinal nerve root distribution.

5.9    Where the neurological symptoms associated with the injured person’s injury of the neck or spine do not meet the assessment criteria for radiculopathy, the injury will be assessed as a threshold injury.

(Underlining in original.)

The factual background

20. The claimant was involved in a motor accident on 9 July 2020 (the accident). He claims that, as a result of the accident, he suffered injuries to his cervical spine, lumbar spine, right leg, right arm and right shoulder.

21. On 23 December 2022, the claimant lodged an application for assessment of permanent impairment with PIC. On 31 August 2023, the insurer lodged an application for assessment of a threshold injury dispute with PIC.

22. Thus, there were two medical disputes between the claimant and the insurer:

1. whether the injuries were threshold or non-threshold injuries (which would determine whether the claimant was entitled to damages: s 4.4); and

2. the extent of any permanent impairment (which would determine whether the claimant was entitled to damages for non-economic loss: s 4.11).

23. These disputes were referred for medical assessment to the President under s 7.20, who referred them to Medical Assessor Assem (the medical assessor). On 22 April 2024, the medical assessor issued a certificate certifying that none of the injuries was caused by the accident and therefore he did not need to address the two medical disputes which had been referred to him (the Assem Certificate). He considered that the claimant’s symptoms “align[ed] more closely with a pre-existing condition of elapsing-remitting multiple sclerosis”.

24. The claimant sought review of the medical assessor’s assessment pursuant to s 7.26(1). The President referred the review to the review panel.

25. The claimant submitted to the review panel that the accident caused an injury to his lumbar spine which resulted in radiculopathy. The insurer submitted to the review panel that the accident was minor and incapable of causing any injury, much less a non-threshold injury.

26. Medical Assessor Rosenthal, who was a member of the review panel, examined the claimant on 30 October 2024. On examination, he detected only one of the clinical signs of radiculopathy specified in cl 5.8 of the Guidelines (paragraph 40 of the review panel’s reasons). This was insufficient to fulfil the requirements of “two or more” clinical signs of radiculopathy to render the injury a non-threshold injury.

27. On 19 December 2024, the review panel issued a certificate revoking the Assem Certificate and substituting its determination that:

1. the injuries to the lumbar spine and cervical spine were caused by the accident;

2. the lumbar spine injury was a non-threshold injury; and

3. such injuries resulted in a WPI of 5%.

28. The reasons of the review panel for their determination at (2) were as follows:

117   If the Panel confirms that radiculopathy was present and meets the [Guidelines], this injury would be a non-threshold injury. Based on his current presentation, however, the Panel considers that Mr Cahill has only one criterion for radiculopathy and does not meet the Guidelines.

118   The Panel determined on the balance of probabilities that there was a tear in the lumbar disc cartilage, and it was this tear which led to the radicular symptoms, and as a result this was a non-threshold injury.

29. The effect of the review panel’s determination is that the claimant is entitled to claim damages (because he has suffered a non-threshold injury) but is not entitled to damages for non-economic loss (because his WPI is not greater than 10%).

30. As referred to above, the insurer challenges the determination that the lumbar spine injury was a non-threshold injury.

The grounds

Ground 1: alleged failure to provide adequate reasons

31. The effect of s 7.23(7) is that the review panel’s reasons form part of the record since they are part of the certificate and the certificate is the record: Pham v NRMA Insurance Ltd [2014] NSWCA 22; (2014) 66 MVR 152 at [27] (Leeming JA, Tobias AJA agreeing). In these circumstances, the insurer did not need to rely on the extended definition of record in s 69(4) of the Supreme Court Act (which has not been held to apply in present circumstances as the review panel has not been held to be a “tribunal”) in its challenge to the review panel’s decision on the basis of inadequacy of reasons.

32. The review panel reasons were required to meet the standard outlined in WingfootAustralia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 (Wingfoot) at [55] (French CJ, Crennan, Bell, Gageler and Keane JJ) (in that case the medical panel was constituted under the Accident Compensation Act 1983 (Vic)) as follows:

The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion.

33. In the present case, the claimant submitted to the review panel, in reliance on s 1.6(4) and the words in parenthesis, “(other than radiculopathy)” in cl 4(1) of the Regulations, that the injury to his lumbar spine was a non-threshold injury because of the presence of radiculopathy. This submission required the claimant to establish at least two clinical signs of radiculopathy within cl 5.8 of the Guidelines. The insurer submitted that it was no more than a soft tissue injury.

34. As Ms Allan, who appeared for the insurer, confirmed:

1. there was no reference in any of the material or submissions which were before the review panel to any such tear;

2. the review panel made no reference to the presence of a tear in the lumbar disc cartilage in its comprehensive summary of the medical evidence in its reasons;

3. the examination conducted by Dr Rosenthal did not reveal any basis for detecting a tear in the lumbar disc cartilage or any indication that he had detected such a tear; and

4. neither party submitted that the injury to the claimant’s lumbar spine was a non-threshold injury because of a tear in the lumbar disc cartilage.

35. I infer, (although the review panel did not indicate this to be the case or explain its reasoning), that the review panel relied on the negative aspect of the definition of soft tissue injury in s 1.6(2): “but not an injury to …. cartilage”. But there was nothing in the review panel’s reasons to indicate where this finding had come from or the basis on which it was made. Nor did the review panel explain why it felt at liberty to go beyond the parameters of the medical dispute between the parties, which had been the subject of voluminous evidence and detailed submissions.

36. The review panel’s reasons fell short of the standard set out in Wingfoot. It failed to set out the actual path of reasoning which led it to find that the claimant had suffered a non-threshold injury to his lumbar spine in circumstances where the only basis on which the claimant relied on was the presence of radiculopathy of which the review panel had found only one clinical sign (which was not sufficient, having regard to cl 5.8 of the Guidelines, which required at least two).

37. For these reasons, ground 1 has been made out.

Ground 2: alleged denial of procedural fairness

38. The review panel was required to accord procedural fairness to the claimant and the insurer in determining the medical dispute which had been referred to it for review. In Wingfoot at [47], the content of procedural fairness in this context was expressed as follows:

The function of a medical panel is to form and to give its own opinion on the medical question referred for its opinion. In performing that function, the medical panel is doubtless obliged to observe procedural fairness, so as to give an opportunity for parties to the underlying question or matter who will be affected by the opinion to supply the medical panel with material which may be relevant to the formation of the opinion and to make submissions to the medical panel on the basis of that material.

39. Procedural fairness requires that where the review panel proposes to determine a crucial matter on a basis on which neither party has adduced evidence or made submissions, the review panel is obliged, as a matter of “practical justice” to draw that matter to the parties’ attention in order to give them the opportunity to provide material and make submissions about it: McKee v Allianz Australia Insurance Ltd (2008) 71 NSWLR 609; [2008] NSWCA 163 at [8] (Allsop P); Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39 at [32]-[37] and [41] (Leeming JA, Beazley P and Basten JA agreeing); applied in AAI Limited trading as GIO v Amos [2024] NSWCA 65 at [55] (myself, Kirk JA and Basten AJA agreeing).

40. In the present case, the review panel decided a key matter – that the injury to the claimant’s lumbar spine was a non-threshold injury – on a basis which had not been put to it and, accordingly, which the parties could not, without prior notice, have contemplated would be the basis for the decision. In these circumstances, the determination that the injury to the claimant’s lumbar spine is a non-threshold injury involves a denial of procedural fairness. This is both an error of law on the face of the record and a jurisdictional error: Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531; [2010] HCA 1 at [60]; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57 at [41] (Gleeson CJ), [142] (Kirby J) and [170] (Hayne J).

41. For these reasons, ground 2 has also been made out.

Costs

42. As all defendants have filed submitting appearances, Ms Allan, accepted that it is appropriate that there be no order as to costs.

The orders sought

43. The insurer seeks that the decision of the review panel be set aside.

44. The insurer also seeks an order that the matter be remitted to a differently constituted review panel. This course would avoid any suggestion of apprehension of bias which might arise if the matter were referred back to the review panel: see, for a similar case, Stanizzo v AAI Limited trading as GIO [2021] NSWSC 1077; (2021) 97 MVR 229 at [17]. I am persuaded that it is the appropriate course.

Orders

45. For the reasons given above, I made the following orders:

1. Set aside the second defendant’s determination made on 19 December 2024.

2. Remit the determination of the medical dispute to the third defendant for referral to a review panel, constituted by members other than those constituting the second defendant, pursuant to s 7.26 of the Motor Accident Injuries Act 2017 (NSW).

3. Make no order as to costs.

**********

Decision last updated: 25 July 2025