Newport v Kelly & VACC Insurance Co Ltd

[1996] QSC 217

IN THE SUPREME COURT
OF QUEENSLAND
CAIRNS DISTRICT REGISTRY

O.S. No. 21 of 1996

Before the Hon. Mr Justice Mackenzie

[Newport v. Kelly & V.A.C.C. Insurance Co Ltd]

BETWEEN

CAROLYNN NEWPORT
  Plaintiff
  (Applicant)
AND

MATTHEW KELLY
  First Defendant
AND

V.A.C.C. INSURANCE CO. LTD (ACN 004 167 953)
  Second Defendant
  (Respondent)

JUDGMENT - MACKENZIE J.

Judgment Delivered  9 October, 1996

CATCHWORDS:

PERSONAL INJURY - Motor Accident Insurance Act 1994 - application under s. 51 for the provision of reasonable rehabilitation services - obligations of insurer and claimant discussed

ss. 45, 47, 51 Motor Accident Insurance Act 1994 discussed

McMullen v. Suhr and Suncorp Insurance and Finance (2209/95 Byrne J. unreported 2 April 1996) applied; In re Walker (460/95 Moynihan SJA unreported 18 August 1995) applied

Counsel:                 M. Sumner Potts for applicant

R.C. Morton for respondent

Solicitors:                Myles Thompson & Co for applicant

McInnes Wilson & Jensen for respondent

Date of hearing:       26 August 1996
IN THE SUPREME COURT
OF QUEENSLAND
CAIRNS DISTRICT REGISTRY

O.S. No. 21 of 1996

Before the Hon. Mr Justice Mackenzie

[Newport v. Kelly & V.A.C.C. Insurance Co Ltd]

BETWEEN

CAROLYNN NEWPORT

Plaintiff
  (Applicant)

AND

MATTHEW KELLY
  First Defendant

AND

V.A.C.C. INSURANCE CO. LTD (ACN 004 167 953)

Second Defendant
  (Respondent)

JUDGMENT - MACKENZIE J.

Judgment Delivered  9 October, 1996

The applicant plaintiff has sought an order that pursuant to s. 51 of the Motor Accident Insurance Act 1994 the respondent insurer make available to the applicant reasonable rehabilitation services namely physiotherapy and hydrotherapy, psychological counselling, memory training, audio assessment, and assistance in her continuing education by providing a home or laptop computer. The application was filed on 11 July 1996 and on 18 July 1996 the applicant's solicitors gave notice that they would also argue for the provision of a "cognitive head injury rehabilitation program".
          The accident in which the applicant's vehicle had been struck from behind by the first defendant's vehicle at relatively low speed occurred on 10 May 1995.  There is evidence suggesting that the applicant was not rendered unconscious but claims to have suffered a wide range of effects of the accident.  Notice of claim under s. 37 was given on 27 October 1995 and liability admitted on 23 January 1996.  At the hearing no reference was made to authority and it appears that the provision under which the application has been made (s. 51(5)) has only been judicially considered on two occasions.  The second of the two decisions is that of Byrne J. in McMullen v. Suhr and Suncorp Insurance and Finance (2209 of 1995, unreported, 2 April 1996).  The plaintiff had become a paraplegic in an accident for which the insurer accepted full liability.  Prior to the accident the plaintiff had lived in a house which she owned subject to a mortgage.  The house was unsuited to the needs of a paraplegic and after discussions with the plaintiff's rehabilitation consultant the insurer rented and modified a suitable house for her.  Although the plaintiff's original residence was let the rent receivable was insufficient to service the mortgage debt and attempts which Byrne J. accepted as reasonable had been made to sell it without success.  Byrne J. also accepted that it was not reasonable to expect the plaintiff to live with her parents, partly because her parents were not anxious to have her live there and because of wheelchair accessibility problems, but principally because there was evidence from experts that independent living had distinct emotional advantages for the plaintiff.
          After rent had been paid for some time the insurer argued that payment of rent was more akin to ordinary expenses of living than to "rehabilitation services".  Byrne J. held that "rehabilitation services" must be given a wide meaning.  He held that in the absence of any unreasonable conduct on the plaintiff's part it was proper to regard rent paid to enable her to achieve the continuing therapeutic benefit of living independently in a specially modified house as "rehabilitation services".
It is important to keep firmly in mind the notion that unreasonableness on the part of the plaintiff may be a factor in determining whether or not rehabilitation services sought on an application under s. 51(5) are reasonable. Byrne J. also referred to the obligations under ss. 45 and 47 for the parties to co-operate. He said the following:-

"The Motor Vehicles Accident Act 1994 obliges the insurer and a claimant to 'co‑operate' with each other. See ss. 45(1) and 47(1). Such co-operation could be expected to yield exchanges between the parties fairly apprising each other of any concerns and the reasons for them. Then, in conformity with the legislative mandate, the parties could more effectively work together towards the speedy resolution of the claim and achieving the other beneficial objects of the Act, which include encouraging the rehabilitation of claimants:"

The earlier decision was by Moynihan SJA in In re Walker (460 of 1995, unreported, 18 August 1995). Moynihan SJA observed that s. 51(5) should receive a beneficial interpretation and that the Court had to form its own opinion of what was reasonable and appropriate in the circumstances of the particular case. He said the following in this connection:-

"        Subs.(5) appears to require the court to form its own opinion.  Although there may be a role for expert opinion in some aspects of applications under subs.(5), that should be limited by the nature of the jurisdiction and to evidence of expert opinion properly defined.  The court must make up its own mind at an interim stage in a broad rather than refined way."

After reviewing the specific items in dispute he said the following about the application:

"It seems a pity that it was necessary to bring it.  It seems desirable that before such applications are brought it should be demonstrated that the differences could not have been resolved by negotiation or some less formal and expensive process".

I accept and apply the approaches inherent in the cases to which I have referred and add only that in my view the taking of an unnecessarily firm or insufficiently flexible stance by either side is likely to be counter-productive and lead to premature applications being made when applications under s. 51(5) should be the last resort after all reasonable attempts to achieve consensus by co-operation have failed.
          As I have previously indicated liability was admitted in this matter on 23 January 1996.  On 18 January 1996 a request had been made whether the insurer would meet the costs of the applicant attending a speech pathologist, an optometrist, and a neurologist to undergo an EEG.  On 23 January 1996, in the letter admitting liability, the insurer asked for medical evidence to support the requests which, it was asserted, had no causal link with the injury.  A request to have the applicant medically examined was also made.
For reasons that are not obvious the applicant's solicitors then engaged in acrimonious correspondence with the respondent's solicitors apparently on the premise that liability had not been admitted and on an assumption that seems to be at odds with s. 45(2) about the responsibility for providing medical reports obtained on the applicant's behalf. There were other matters in the correspondence which it is not necessary to detail. A response refuting the points made, including one where the applicant asserted a right to be examined by a single doctor of her choosing rather than a doctor from the panel nominated by the insurer was made.
Then there were disputes over payment for medico legal reports obtained by the applicant and the applicant's claim that her four children would have to accompany her to Brisbane if she was to be examined there on the basis that it was unreasonable to request her to go to Brisbane even if flights were arranged which would get her there and back on the same day. In later correspondence reference was made to s. 45(5). The question of the need for a causal connection between the nature and extent of the applicant's claimed injuries and the accident was raised specifically by the insurer on 1 May 1995 and a request that the plaintiff be examined by one of the panel of specialist neurologists previously notified was renewed. After more correspondence the applicant agreed on 13 June 1996 to see Dr Cameron in Brisbane. An appointment and arrangements for travel were made for 6 September 1996. On 2 July 1996 the plaintiff's solicitors demanded that the insurer "honour its legal obligations and provide for necessary rehabilitation expenses" for the treatments referred to in the summons and asserted:

"Our client has suffered a severe disability and is left with permanent disc damage and frontal lobe injury.  Her memory problems are such that her future development is being jeopardised.  In the circumstances there is no reason to continue to refuse to allow our client that which she is entitled to at law.  Your client's continued insistence on refusing to honour its obligations under the Act are jeopardising our client's recovery."

The commencement of court proceedings was foreshadowed.  The present application followed one week later.  In the meantime a complaint had been made to the Insurance Commissioner on the applicant's behalf.  Further correspondence ensued in which further allegations of failure to fund rehabilitation were made.  A report from the Commonwealth Rehabilitation Service about the plaintiff's rehabilitation needs had been sought some time earlier with written authority from the applicant but on 26 July 1996 that consent was withdrawn.  After further correspondence and negotiations it was agreed that the report could be prepared and proceeded with and after it was received, some time after the present proceedings had been commenced, and it had been referred to the insurer's rehabilitation consultants a detailed letter was written on the insurer's behalf on 19 August 1996.  Amongst other things the letter advised that it was intended to recommend to the insurer that Dr Cameron's recommendations following the examination on 6 September in relation to the applicant's ongoing rehabilitation for injuries related to the accident be implemented; that further consideration of any treatment for optical problems (which it was noted were not expressed in the CRS report to be related to the accident) would be made in the light of Dr Cameron's examination; that some physiotherapy and hydrotherapy as recommended by the CRS would be funded; that there was no evidence that the need for a laptop computer was related to the accident; and that memory training and cognitive rehabilitation would be considered following Dr Cameron's examination.  There was also reference to an orthopaedic examination.  A panel of three specialists in Brisbane was nominated and it was suggested that the examination take place on the same day as Dr Cameron's examination.  The letter concluded with the statement that the insurer had at no time refused to provide rehabilitation.  The insurer had simply requested the applicant to undergo an independent examination, as required by the Act, so that it could give consideration to any further rehabilitation she needed. 
          The response on 20 August 1996 included an agreement that the applicant would undergo orthopaedic examination.  However the plaintiff's solicitors nominated a panel of three doctors in Cairns with the suggestion of a "check medical" by a Brisbane doctor subject to conditions including the provision of information about the number of examinations done by the checking doctor for insurers in the preceding six months.  There were several requests for a categorical undertaking that the insurer would pay for all recommendations in the insurer's rehabilitation report.  A claim that the applicant was premature and unnecessary, made in the insurer's solicitors' letter of 19 August 1996, produced a strongly worded retort including the description of it as "ridiculous".
          I have deliberately expressed the tone of the correspondence summarised above as neutrally as possible in an attempt to distil the substance of it.  In fact, especially from the applicant's side it is extremely confrontational in tone.  Coincidentally on 13 August 1996 the Insurance Commissioner wrote to the applicant's solicitors in connection with the complaint previously referred to.  After referring to the insurer's claim that the applicant was not fully co‑operating with them in their endeavours to establish the bona fides of her claims, the letter summarises the matter in a way with which issue cannot be taken.  The relevant passages are as follows:-

"The insurer, based on the evidence available to them, is adopting a position that it is not satisfied that the treatment and rehabilitation sought has a causal connection to the motor vehicle accident of 10 May 1996 and for this reason a check medical examination is essential.  It is unfortunate that for what ever reason, arrangements in this regard were not accepted until June 1996 and then there were complications in respect of both your client's and the specialist's availability.

............

Early resolution of claims is a clear objective of the Motor Accident Insurance Act 1994 and the whole concept is based on openness and cooperation between the parties. I am concerned with the delays experienced by your client and I would urge you, following receipt by both parties of the medical assessment and clarification of the casual relationship, to work closely with the insurer to develop a rehabilitation and injury management program for the benefit of your client."

I should add that an examination of copies of medical records exhibited in the proceedings clearly demonstrates that there were a number of complaints made to doctors before the accident which call for further exploration in connection with the claims of causation of alleged consequences of the accident.  I have also had the advantage of seeing the applicant under cross-examination which assisted me in resolving one issue. 
          Turning now to the specific matters claimed in the summons, the position at the time of hearing and how the claims should be resolved are as follows:

Physiotherapy and hydrotherapy
          On the basis of the CRS report, which was received after the summons had been filed, the insurer agreed to provide the rehabilitation advised.  I am satisfied that prior to that there had been a failure to provide information in a timely way which would have allowed the insurer to make an informed decision as to the extent of physiotherapy necessary to treat consequences of the accident.  No order will be made in this respect.

Psychological counselling
          No order will be made in this respect on the basis that there was no satisfactory evidence that it is required. 

Memory training
          There is some evidence that memory training strategies might be of assistance to the applicant and the CRS report suggested three hours at $96 per hour.  There is also evidence that the applicant's memory is at least not below average.  There was also one recommendation that the CRS recommendation should be reviewed after the neurologist's review.  In the circumstances I do not consider that it was unreasonable to delay the decision whether to provide memory training until after Dr Cameron's examination, the timing of which was, of course, delayed by the applicant's reluctance, since resiled from, to go to Brisbane for examination. 

Audio assessment
          There was a recommendation from a psychologist that the applicant consult an audiologist to ascertain whether or not she had any audiological processing problems.  Subsequent reports did not recommend such a procedure.  There is no evidence of hearing problems in the applicant's material.  It was submitted that given the applicant's past medical history it was appropriate for the insurer to have the applicant examined before providing this rehabilitation.  It was also submitted that there was no explanation of what was involved in "audio assessment" nor its cost and that that had an effect on whether it had been established that it was reasonable and appropriate.  It may well be too narrow a view of the applicant's affidavit to exclude the possibility that hearing difficulties contribute, for example, to the problem with comprehension.  However as the matter stood, the evidence was not sufficiently satisfactory to convince me that it was necessary and appropriate to order such treatment prior to the examination by Dr Cameron and I make no order in that respect.

Assistance on continuing education by providing a home or laptop computer
          The impression may have been gained from the written material that there was a problem about gaining access to computers at the Cairns Institute of Technical and Further Education.  However that was clarified in evidence.  I had the opportunity of seeing the applicant cross-examined in connection with this claim and am by no means satisfied, having regard to that evidence, that there was a link between the consequences of the accident and the difficulty experienced by the applicant in collating material in connection with her course.  No doubt a laptop computer would be a very useful adjunct to studies in the subject but on the basis of the cross-examination I am far from convinced that it is consequences of the accident rather than the inherent nature of the course that has caused the difficulty adverted to.  I will not make an order in this respect.

Cognitive head injury rehabilitation program
          There was a lack of clarity as to precisely what is intended in this respect.  The proposal from the insurer's side was that the neurologist Dr Cameron be asked to comment upon it during his examination.  At the time the application was brought there was very little information about what was involved, what its cost would be and what its effects would be.  Further it seems to be a matter which is most appropriately considered after Dr Cameron has conducted his examination.  I therefore propose not to make any order in that respect.
In the result I have found that the applicant has not established that any of the matters sought are reasonable and appropriate rehabilitation services in the particular circumstances. As will be plain from what I have said, the application was premature and any sense of grievance over the time it had taken for consideration to be given to rehabilitation was to a very significant extent the result of the confrontational nature of the negotiations, evident from the correspondence, in which rehabilitation was sought. It is also plain that, in my judgment, the Act, in imposing mutual obligations to co-operate upon the plaintiff and the insurer, is intended to ensure that the applicant exposes its reasons for seeking such rehabilitation services and, if the insurer has a problem, exposing its nature to the plaintiff so that proper consultation and as much consensus can be had before the need to bring an application under s. 51 arises. This process should neither encourage ambit claims on the part of plaintiffs nor recalcitrance on the part of insurers. The order is that the application is dismissed with costs to be taxed.