Shaw v Insurance Australia Group Limited t/as NRMA Insurance

[2023] NSWSC 1273

Supreme Court

New South Wales

Medium Neutral Citation:

Shaw v Insurance Australia Group Limited t/as NRMA Insurance [2023] NSWSC 1273

Hearing dates:

1 March 2023

Decision date:

27 October 2023

Jurisdiction:

Common Law

Before:

Rothman J

Decision:

(1)   Judgment for the plaintiff.

(2)   An order in the nature of certiorari quashing the decision of the delegate of the President on 25 August 2022 in the application for review lodged by the first defendant in relation to the medical assessment of Dr Rosenthal of 17 June 2022.

(3)   Remit the aforesaid application for review to the second defendant to deal with in accordance with law.

(4)   The first defendant shall pay the plaintiff’s costs of and incidental to these proceedings.

(5) The first defendant shall, to the extent otherwise eligible, have a certificate under s 6 of the Suitors’ Fund Act 1951 (NSW).

Catchwords:

ADMINISTRATIVE LAW – certiorari – medical assessment – gatekeeper – reasonably suspect material error – agreement between parties as to compression of disc – according with only evidence – methodology error not, without more, reasonable basis for error in assessment – delegate to President answered wrong question.

Legislation Cited:

Motor Accident Injuries Act 2017 (NSW), Sch 2, s 2

Motor Accidents Injuries Act 2017 (NSW), ss 4.11, 7.17, 7.20, 7.20(1), 7.20(2), 7.20(3), 7.20(4), 7.22(1), 7.25, 7.26(1), 7.26(2), 7.26(5), 7.26(6)

Motor Accident Guidelines

Suitors’ Fund Act 1951 (NSW), s 6

Supreme Court Act 1970 (NSW)

Cases Cited:

Attorney-General (NSW) v Quin (1990) 170 CLR 1; [1990] HCA 21

Australian Insurance Staffs’ Federation Claimant; and Accident Underwriters’ Association (1923) 33 CLR 517; [1923] HCA 61

Australian Insurance Staffs’ Federation v Atlas Assurance Company Limited (1931) 45 CLR 409; [1931] HCA 35

Coldham; ex parte Brideson (1989) 166 CLR; [1989] HCA 2

Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39

Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58

De Gelder v Rodger [2014] NSWSC 872

Federated Municipal and Shire Council Employees’ Union of Australia v Melbourne Corporation (1919) 26 CLR 508; [1919] HCA 73

Freeman v South Western Sydney Local Health District [2022] NSWSC 1642

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Meeuwissen v Boden (2010) 78 NSWLR 143; (2010) 56 MVR 453; [2010] NSWCA 253

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; (1981) HCA 45

Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97

Sullivan v Department of Transport (1978) 20 ALR 323; [1978] FCA 323

Wood v Insurance Australia Ltd t/as NRMA Insurance [2022] NSWSC 1290

Category:

Principal judgment

Parties:

Anthony Victor Shaw (Plaintiff)
Insurance Australia Group Limited t/as NRMA Insurance (First Defendant)
The President of the Personal Injury Commission
of New South Wales (Second Defendant)

Representation:

Counsel:
A Canceri (Plaintiff)
Submitting Appearance (First Defendant)
Submitting Appearance (Second Defendant)

Solicitors:
CMC Compensation Lawyers (Plaintiff)
Hall & Wilcox (First Defendant)
Crown Solicitor’s Office (Second Defendant)

File Number(s):

2022/00346090

 Decision under appeal 

Court or tribunal:

Personal Injury Commission of NSW

Jurisdiction:

Application for Review of a Medical Assessment

Date of Decision:

25 August 2022

Before:

President’s Delegate Gupta, The Review Panel of the Personal Injury Commission

File Number(s):

R-M10523789/22

JUDGMENT

Background

1. HIS HONOUR: These proceedings arise from an incident (“the Incident”) which is alleged to have taken place on 6 September 2018 in Pokolbin, New South Wales. The plaintiff, Anthony Shaw, claims that he was riding a bicycle when he was struck by a car. The car was covered by a compulsory third party policy of insurance issued by the first defendant, Insurance Australia Group Limited t/as NRMA Insurance (“NRMA”). The plaintiff alleges that he sustained personal injury as a result of the incident.

Procedural History

2. The plaintiff has since brought a claim for personal injury damages against NRMA, pursuant to the provisions of the Motor Accidents Injuries Act 2017 (NSW) (hereinafter “the Act”).

3. As set out in an Affidavit dated 30 January 2023, sworn by the plaintiff’s solicitor, Mark Capolupo, the claim included an allegation that the plaintiff’s degree of injury arising from the incident was greater than 10% of what is known as “permanent impairment”. Such a degree of permanent impairment would overcome the limitation on the plaintiff recovering damages for non-economic loss, pursuant to the terms of s 4.11 of the Act. This was the threshold that the plaintiff had to reach to be eligible to receive damages for pain and suffering arising from the collision.

4. While the material before me is not determinative of the date that the claim was first put to NRMA, it is clear that on 23 June 2021 NRMA sent a letter to the plaintiff communicating its decision that the plaintiff’s whole person impairment (“WPI”) arising from the incident was no greater than 10% (“the NRMA Decision”). In reaching that decision, NRMA relied on the medical information available to it at the time, which included various treating medical records and results of medical imaging.

5. On 6 July 2021 the plaintiff requested that NRMA undertake an Internal Review of the NRMA Decision. NRMA issued the outcome of that Internal Review in a letter to the plaintiff dated 24 July 2021. It appears that further information was available to NRMA at the time of the Internal Review, including a report of Dr Lachlan Host and further medical information from treating practitioners. The Internal Review upheld the original NRMA Decision.

6. It is useful at this point to set out a little about the injuries that the plaintiff claimed to have sustained in the incident and the findings about those injuries made by NRMA as a result of the Internal Review. In short, the plaintiff alleged that he had sustained a compression fracture of the L2 vertebrae in the mid back, a torn left hamstring, bruising and injury to the left knee, a strained ligament in the right foot, an injured left hip and buttock, and soreness to the neck, right ribs, and left hand. NRMA determined that the medical evidence showed ongoing injury to the L2 vertebrae. NRMA accepted that the plaintiff had sustained a fracture of L2 with 40% compression, leading to a DRE III (Diagnosis-Related Estimate Category III) lumbosacral category rating, and 10% WPI. NRMA’s view was that while there were some complaints of ongoing right hip pain, the medical evidence did not establish the nature or extent of any injury to that area, such as to enable any assessment of it.

7. On 29 July 2021, the plaintiff lodged an Application for Resolution of a Medical Dispute with the Personal Injury Commission of New South Wales (“the Commission”), the President of which is the second defendant to this proceeding. The plaintiff sought to challenge NRMA’s determination that his total WPI did not exceed 10%. Each of the plaintiff and NRMA submitted documents to the Commission for consideration. NRMA’s response included a concession that the L2 fracture gave rise to 10% WPI. The Commission allocated the matter to Dr Thomas Rosenthal for assessment.

8. Dr Rosenthal assessed the plaintiff on 14 June 2022, and issued a medical assessment certificate on 17 June 2022. Dr Rosenthal concluded that there was a total of 12% WPI, which arose from injuries to the L2 vertebrae, the cervical spine, and the right hip. Relevantly, Dr Rosenthal accepted that the L2 compression fracture was between 25% and 40% compressed based on radiological reports, resulting in 10% WPI. A further 2% WPI was said to arise from the right hip injury. While there was a cervical spine injury, it was held not give rise to any assessable impairment. Dr Rosenthal did not have available the scan of the plaintiff’s spine at L2 but did have two radiology reports.

9. On 14 July 2022, NRMA filed an application for the Commission to review Dr Rosenthal’s medical assessment. NRMA asserted that the decision was flawed because Dr Rosenthal failed to adhere to the Motor Accident Guidelines (“the Guidelines”) when assessing the L2 fracture, which required him to undertake his own measurements of the percentage of compression of the vertebrae, and not rely on percentages in radiological reports.

10. The plaintiff filed a reply to NRMA’s application which asserted that NRMA had earlier conceded that the lumbar spine injury attracted a WPI of 10%. The plaintiff submitted that as a result, there was no relevant “dispute” for the purposes of the Act. On this basis, the plaintiff contended that the Commission had no jurisdiction to refer the matter for review.

11. On 25 August 2022, the Commission issued a Determination, which found that there was reasonable cause to suspect that Dr Rosenthal’s medical assessment was incorrect in a material way, and ordered that the assessment be referred to a review panel (“Commission’s Decision”).

12. On 17 November 2022 the plaintiff filed a Summons in this Court seeking judicial review of the Commission’s Decision, which is the reason that the matter now comes before the Court for determination.

Parties’ Positions

Plaintiff

13. The plaintiff’s Summons seeks judicial review of the Commission’s Decision on three grounds.

Ground 1

14. The first ground of review put forward by the plaintiff is that the Commission’s power to refer a medical assessment for review only arises in accordance with s 7.26(5) of the Act. That section requires the Commission to be satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect, before it may be referred for review.

15. Simply put, the plaintiff’s argument is that s 7.17 of the Act defines a “medical assessment” as arising out of a “medical dispute”. The plaintiff says that because NRMA had conceded the existence and extent of the L2 compression fracture, there was no “medical dispute” on that issue between the parties for the purposes of the Act.

16. The plaintiff submits that the Commission’s decision to refer the matter for further review could only have been made under the misconception that there was a “medical dispute” in relation to the L2 injury which Assessor Rosenthal was required to assess under the Guidelines.

17. The plaintiff says that the impact of that error was that the Commission then considered that Dr Rosenthal’s assessment of the lumbar spine was a “medical assessment” within the meaning of the Act, such that it could be a basis for referring the matter for review.

18. In this circumstance, the plaintiff says that the Commission made a jurisdictional error and an error of law, such that a writ of certiorari may be granted under the Supreme Court Act 1970 (NSW).

Ground 2

19. The plaintiff’s second ground upon which he seeks judicial review is that the decision of the Commission was so unreasonable that no reasonable decision maker could have come to the same conclusion.

20. He relies on Wood v Insurance Australia Ltd t/as NRMA Insurance [2022] NSWSC 1290. In that case, the Court concluded that a decision maker fundamentally misunderstood the task required to be performed in taking into account a medical assessor’s assessment of an injury which was not in dispute between the parties. The Court held that such a decision-making process would not have been undertaken by a reasonable decision maker performing the required statutory task.

Ground 3

21. Lastly, the plaintiff says that given NRMA had conceded that the incident caused the plaintiff to sustain a compression fracture of the L2 vertebra resulting in 10% WPI, NRMA was estopped from asserting that that the medical assessment in respect of that injury was incorrect in a material respect. He says that NRMA’s application for review should have been determined on that basis.

22. He says that NRMA created an expectation that that the WPI attributable to the L2 fracture would not be in issue in Dr Rosenthal’s assessment, and says that it would be unconscionable for NRMA to be permitted to resile from its prior concession about the injury.

Defendants

23. NRMA and the Commission have each filed Submitting Appearances and have not served any other evidence or submissions. They each submit to the giving or entry of judgment in respect of the plaintiff’s claims, except as to costs.

Consideration

24. Section 7.26 of the Act provides that a party may apply to the Commission for a medical assessment to be referred to a review panel. ^[1] It also provides that such an application may only be made on the ground that the assessment was incorrect in a material respect. ^[2] This was the avenue raised by NRMA in seeking that the Commission refer Dr Rosenthal’s assessment to a review panel.

    1. Motor Accident Injuries Act 2017 (NSW), s 7.26(1).

    2. Motor Accident Injuries Act 2017 (NSW), s 7.26(2).

25. Put simply, the plaintiff says that this course was not open to NRMA, as a “medical assessment” may only arise from a “medical dispute”. The plaintiff says that there was no “medical dispute” about the lumbar spine injury in light of NRMA’s earlier concession about that injury, and thus any assessment of L2 undertaken by Dr Rosenthal was not a “medical assessment” for the purpose of the Act, such that it would be liable to referral to a review panel.

Legislative Provisions

26. The term “medical assessment” is defined in s 7.17 of the Act as “an assessment of a medical assessment matter under this Division”. ^[3] The same section defines a “medical dispute” in the following way: ^[4]

“medical dispute means—

(a)     a dispute between a claimant and an insurer about a medical assessment matter, or

(b)     an issue arising about a medical assessment matter in proceedings before a court for damages or in connection with the assessment of a claim by the Commission.”

3. The types of matters deemed to be “medical assessment matters” are specified in Schedule 2 of the Act, and those matters include the degree of permanent impairment that has resulted from the injury caused by the motor accident: Motor Accident Injuries Act 2017 (NSW), Sch 2, s 2.

4. Motor Accident Injuries Act 2017 (NSW), s 7.17.

27. Pursuant to s 7.20 of the Act, a medical assessment takes place when a party refers a medical dispute for assessment. On this basis, the plaintiff’s submission that a medical assessment may only arise from a medical dispute is one that I accept, having regard to ss 7.17 and 7.20, as well as the synergy of Div 7.5 of the Act as a whole.

Was There a Medical Dispute?

28. In the Application for Resolution of a Medical Dispute, submitted by the plaintiff to the Commission on 29 July 2021, ^[5] the plaintiff identified 9 areas of bodily injury said to arise from the incident, which included the L2 fracture in the lumbar spine. In written submissions supporting that application, it was specifically stated that the plaintiff sought to refer each of those injuries for assessment, including the compression fracture of the L2 vertebrae. ^[6]

    5. Plaintiff’s Court Book, p 41.

    6. Plaintiff’s Court Book, p 50.

29. Despite NRMA’s internal review finding 10% WPI arising from the L2 fracture, and NRMA confirming that concession in its reply to the plaintiff’s application to the Commission, the request made by the plaintiff for that injury to be assessed by a medical assessor was not withdrawn. As I have already stated, the Act provides that only medical disputes may be referred for medical assessment. ^[7]

    7. Motor Accident Injuries Act 2017 (NSW), s 7.20(1).

30. The plaintiff’s request for a medical assessment of the L2 fracture prima facie indicates that he disputed NRMA’s view of the WPI arising from that injury. There is also no indication that prior to the receipt of Dr Rosenthal’s assessment, the plaintiff ever communicated to NRMA or the Commission that NRMA’s assessment of the WPI referrable to the L2 fracture was one that he accepted. The only available inference is that the plaintiff did in fact dispute the WPI that NRMA had assessed in relation to the L2 fracture, and he sought a medical assessment of that injury as a result of that medical dispute.

31. Given the L2 fracture was one of the matters that was referred for medical assessment (at the request of the plaintiff), Dr Rosenthal was required to prepare a certificate which dealt with that injury. ^[8] Accordingly, it seems to me that, subject to that which follows, Dr Rosenthal’s assessment of that injury formed part of the “medical assessment” he conducted for the purposes of the Act, and as such, is open for referral to a review panel in accordance with s 7.26 of the Act.

    8. Motor Accident Injuries Act 2017 (NSW), s 7.22(1).

32. Unlike the process of referral for medical assessment, a referral pursuant to s 7.26 is not contingent on the existence of a medical dispute. Relevantly, and as earlier stated, s 7.26(1) mandates that the sole ground for a referral to a review panel is that the medical assessment was incorrect in a material respect. Presumably, this is predicated on the fact that a dispute had to have arisen for the medical assessment to have taken place at all.

33. It is necessary to deal more fully with the nature of a dispute under this Act. Ordinarily, a dispute involves a disagreement or controversy of some kind. In the case of the most litigated term, being “industrial dispute”, it was defined to mean a disagreement or controversy between capital and labour as to the terms upon which they were to cooperate. ^[9]

    9. Federated Municipal and Shire Council Employees’ Union of Australia v Melbourne Corporation (1919) 26 CLR 508 at 554 (Isaacs and Rich JJ); [1919] HCA 73, as explained in Australian Insurance Staffs’ Federation Claimant; and Accident Underwriters’ Association (1923) 33 CLR 517 at 524 (Isaacs and Rich JJ); [1923] HCA 61.

34. As Rich J explained^[10] when a claim for an amount was made by employees and a lower amount proposed as the appropriate rate by employers, there was one dispute the ambit of which was the range between the two different amounts. But the context of industrial disputes is very different. In some respects the plaintiff seeks to import some aspects of those distinctions into this regime.

    10. Australian Insurance Staffs’ Federation v Atlas Assurance Company Limited (1931) 45 CLR 409 at 422-423 (Rich J); [1931] HCA 35.

35. The meaning of the terms “medical assessment” and “medical dispute” must be derived from the Act and its purpose. A medical assessment matter is the subject matter of a dispute between a claimant and an insurer,^[11] and is determined by a reference to cl 2 of Schedule 2 to the Act. The foregoing provision expressly prescribes that a medical assessment matter is, amongst other currently irrelevant matters, “the degree of permanent impairment of the injured person”.

    11. Motor Accident Injuries Act 2017 (NSW), s 7.17, supra.

36. The foregoing clarifies that the subject matter is one which is capable of resolution as a dispute and capable of being referred for review. Nevertheless, as extracted above, there is still, otherwise than when an issue arises in a court, a need for a dispute between the claimant (in these proceedings the plaintiff) and the insurer about the WPI assessment. The plaintiff submits that, because the insurer accepted that there was a 10% WPI, there was no dispute except, it seems, in relation to any WPI above 10%.

37. The plaintiff lodged a claim before the Commission. In doing so, the plaintiff identified the dispute as being in the category of “Medical Assessment” and of the type “Permanent Impairment”. ^[12] The Claim lodged identified 9 injuries, one of which was to the cervical spine, one to the lumbar spine and two of which were to the hip. The desired outcome was described by reference to the written submissions. The written submissions described the desired outcome by reference to that which was “referred”, which was “whether [the] degree of permanent impairment is greater than 10%”. ^[13]

    12. Application/Claim, Court Book, p 43.

    13. Court Book, p 50.

28. NRMA filed a Reply in which, in response to the question as to desired outcome, it referred to its submissions lodged with the formal reply. In those submissions, NRMA said:

“The Insurer concedes that this [the compression fracture at L2] gives rise to an assessment of DRE III or 10% WPI.” ^[14]

14. Court Book, p 126 at [3.1].

39. This is a formal pleaded concession. As already stated, the Referral resulted in Dr Rosenthal assessing the compression fracture at L2 at 10% WPI, which was the concession made by NRMA. He also assessed other injuries, being the injury to the right hip, at a further 2%, resulting in a WPI of 12%.

40. NRMA, as stated, applied to have a review of that assessment and in so doing sought expressly to challenge the method of assessment for the L2 injury, which led to the 10% WPI it had conceded in the medical assessment. An application for review is permitted by s 7.26 of the Act, which grants to a claimant and an insurer the capacity to apply for a review to a Review Panel. The term “may” in s 7.26 is permissive or facultative. ^[15] It enables a party to apply and the application is then dealt with by the Commission in accordance with the Act.

    15. Re Coldham; ex parte Brideson (1989) 166 CLR 338 at 347-348 (Wilson, Dean and Gaudron JJ); [1989] HCA 2.

41. The provisions of s 7.26 of the Act permit an application to refer “a medial assessment”. There is no requirement for a medical dispute. The review is not limited to that which is alleged to be incorrect in the application. ^[16]

    16. Motor Accidents Injuries Act 2017 (NSW), s 7.26(6).

42. When, on 14 July 2022, NRMA lodged its application for review, it asserted the “Dispute Category” was “Medical Assessment” and the “Dispute Type” was “Panel Review of Single Medical Assessment”. ^[17] There is, on the formal application, no statement of disagreement nor any expressed desired outcome. ^[18]

    17. Court Book, p 317.

    18. Court Book, p 318.

43. As earlier stated, a review may be taken by either party against a medical assessment,^[19] and, once before the Review Panel, is not limited in its scope by that said to be incorrect. ^[20] The Review Panel is otherwise bound to deal with the assessment in accordance with Division 7 as it is conducting a new assessment. ^[21]

    19. Motor Accidents Injuries Act 2017 (NSW), s 7.26(1).

    20. Ibid, s 7.26(6).

    21. Ibid.

44. There are a number of provisions that inform the interpretation of the Act. First, the objects of the Act express the legislature’s perceived purpose. Those objects (and other provisions) clarify that the purposes include: informality of process; early resolution of claims; and, the quick, cost effective and just resolution of disputes.

45. Further, the Act encourages the resolution of disputes by agreement and, where appropriate, without proceedings. Further again, s 7.25 of the Act provides that the assessment of a medical dispute by way of review may be made on the basis of any agreement by the parties, inter alia, on the degree of permanent impairment from a “particular injury”. As such, this permits the assessment of WPI on the basis of an agreement on one injury and an assessment on another, because, leaving aside for present psychiatric injury, ^[22] the assessment of permanent impairment from different injuries sustained from an accident is an accumulation or sum based on the WPI assessment for each injury. ^[23]

    22. Motor Accidents Injuries Act 2017 (NSW), s 7.21(3).

    23. Ibid, ss 7.21(2), 7.23(8), 7.26(8).

46. The issue that then arises is the extent to which those earlier-mentioned provisions expressly exclude any assessment on review being confined to the matters raised and, on the other hand, the other provisions, including the purposes of the Act pointing to the encouragement of agreement, both result in informing a purposive approach to construction.

47. Taking such an approach, the Act does not entitle a party to review that part of an assessment to which the party objects and prevent the Review Panel from examining other parts of the assessment. While the Act does not forbid a party from challenging an assessment to which there was agreement, such a result would be inconsistent with the purposes of the Act.

48. The submission of NRMA, which was incorporated into the response before Medical Assessor Rosenthal, not only concedes a 10% WPI, it provides the basis for it (DRE III), ^[24] and submits that the WPI is not greater than 10%. ^[25] Dr Rosenthal accepted that conclusion consistently with the only expert medical evidence available to him, namely the two radiological reports. As earlier stated, the plaintiff’s scan of L2 was not available to the Medical Assessor.

    24. Court Book, p 126, [3.1].

    25. Ibid, p 126, [4.1].

49. Dr Rosenthal’s WPI assessment of 12% was the result of the DRE III Assessment at the bottom of the range (10%) together with the result of the hip injury. An impairment that is in the DRE III Lumbar Category has a defined WPI of between 10% and 13%. Thus, properly understood, the parties had agreed that the impairment was in the DRE III Category, but not on the value within that range. Nor had they agreed on any impairment arising from any other injury, and, in particular, from the hip injury. And all of the medical evidence was to the effect of a minimum of a 25% compression of the disc, which placed the plaintiff at DRE III.

50. The assessment of impairment arising from an injury is performed under the Motor Accident Permanent Impairment Guidelines which refer to AMA4 Guides. The Tables in AMA4 Guides establish the Categories and establishes that DRE III results in a WPI of between 10% and 13%.

51. Thus, once the injury, its symptoms, and treatment are established, the range of WPI is governed by the Category applicable to those symptoms and treatment. It is for that reason that the concession that the plaintiff was categorised as DRE III, necessarily established a minimum WPI of 10%.

52. I then turn to the challenge to the decision of the President’s delegate in light of the foregoing comments. The President (or, in this case, his delegate, hereinafter referred to as the President) is the “gatekeeper” for any application for review. The plaintiff seeks orders in the nature of certiorari quashing the referral to the Review Panel. The President is required to refer the matter only if satisfied there is reasonable cause to suspect that the medical assessment was incorrect. ^[26]

    26. Motor Accidents Injuries Act 2017 (NSW), s 7.26(5).

53. The function of the President affects the rights of the applicant for review and the respondent to any such application. ^[27] A decision of the President of this kind is amenable to such orders. ^[28]

    27. Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 at [70] (Beazley JA, McColl and Macfarlane JJA agreeing).

    28. Ibid.

54. Such orders will issue only for error of law or error of jurisdiction. Where the President reasonably determines on evidence or material presented that there is reasonable cause to suspect that the medical assessment was incorrect, then, even if that conclusion were “wrong”, it is neither error of jurisdiction nor error of law. The jurisdiction of the courts does not go beyond enforcing the law or declaring it. ^[29] Any curing of injustice or unfairness is, in that sense, merely collateral, coincidental or unintended. ^[30]

    29. Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36 (Brennan J); [1990] HCA 21.

    30. Ibid.

55. The terms of s 7.26(5) of the Act require the President to be satisfied of a reasonable basis for the medical assessment to be incorrect. The reference to “incorrectness” relates to the medical assessment; not the certificate or the reasons. If, as is alleged in the application for review, there is an error in the methodology utilised to calculate the assessment, then, if the assessment were correct, it would only be by coincidence. Otherwise expressed, if the methodology of assessment were incorrect, then there would be reasonable cause to suspect that the medical assessment was incorrect.

56. However, the test is not where there is a reasonable basis for the methodology being incorrect; it is whether the assessment itself is incorrect. The President accepts the “correctness” of the submission of NRMA that the Medical Assessor appears to have utilised the wrong methodology. ^[31] The apparent error was to rely on radiology reports, rather than conducting his own assessment of the degree of compression.

    31. Court Book, p 347 at [7].

57. A concession as to 10% WPI does not, in and of itself, bind NRMA in subsequent proceedings before the Commission. It is a conclusion. However, the position of NRMA went well beyond the conclusion. Its position was that the plaintiff was in the Category of DRE III, the minimum WPI for which is 10%. In those circumstances, it is not apparent how the alleged methodology error could have adversely affected NRMA.

58. The President, while dealing with the agreement as to 10% WPI, does not deal with the effect of the possible methodology error on the medical assessment, in circumstances where the agreed or conceded facts put the minimum WPI for the plaintiff at the percentage assessed, and the assessment is in accordance with the only evidence before the Assessor.

59. In part, at least, the error of the President derives from the manner in which the plaintiff’s submissions were framed, but it more significantly arises because the delegate did not ask the correct question. The delegate of the President was satisfied that there was reasonable cause for the incorrectness of the assessment because the methodology was incorrect, and did not turn their mind to whether, on the agreed facts, there could be an error in the result that adversely affected NRMA, or whether the error was material.

60. As a consequence, the President asked and answered the wrong question. Such a failure is an error of law, and, on one view at least, jurisdictional error. ^[32]

    32. Craig v South Australia (1995) 184 CLR 163 at 179; [1995] HCA 58 at [14] (Brennan, Deane, Toohey, Gaudron and McHugh JJ).

61. Dr Rosenthal’s WPI assessment of 12% was the result of the DRE III Assessment at the bottom of the range for the lumbar injury (10%) and the injury to the hip.

62. The plaintiff’s first ground of review conflates Dr Rosenthal’s endorsement of NRMA’s initial assessment of the L2 fracture with a proposition that there was or is no medical dispute as to the L2 fracture at all, and thus that the assessment of that injury was not a “medical assessment” within the meaning of the Act. The purpose of the medical assessment scheme is to resolve medical disputes between the parties. The fact that the dispute was resolved in the manner contended for by one party does not mean that there was not a dispute in the first place.

63. Put another way, the fact that one party’s initial position was vindicated in circumstances where a dispute was clearly referred for assessment does not retrospectively alter the status of the assessment, which was conducted, to exclude it as a “medical assessment” under the Act.

64. Further, once the assessment has been made, the assessment may be the subject of an application for review by one or both parties. Further again, the available determination by a Review Panel is not confined to the range available as a result of the claims in the application for review.

65. The real question is whether NRMA ought to have been precluded from seeking review of a medical assessment which was determined in a manner consistent with NRMA’s position. The Act is silent on this issue; the only explicit limitation on the referral of a medical assessment to a review panel is that the only ground which may be relied upon is that the assessment was incorrect in a material respect.

66. Accordingly, the Court must consider if the Commission failed to afford the plaintiff natural justice by upholding NRMA’s request for panel review of Dr Rosenthal’s L2 injury assessment in circumstances where that assessment was consistent with NRMA’s earlier concession.

67. As I stated in Freeman v South Western Sydney Local Health District:^[33]

“Natural justice is often divided into two sub-rules: the hearing rule and the bias rule. The two rules are related. The requirement afforded a party to be heard and to have a reasonable opportunity to prepare is premised on the fundamental proposition that the opportunity to be heard requires an independent and impartial decision-maker, arriving at a not unreasonable result.”

33. [2022] NSWSC 1642 at [143].

68. In Sullivan v Department of Transport,^[34] Deane J stated while a party is entitled to a reasonable opportunity to prepare and to present its case, the court or tribunal is not required to ensure that the party utilises the provided opportunity to its best advantage. ^[35]

    34. (1978) 20 ALR 323; [1978] FCA 323.

    35. Ibid at 343.

69. It could not be said that the plaintiff did not have an opportunity to be heard on NRMA’s application for review. In evidence before me is the plaintiff’s response to NRMA’s application, accompanied by written submissions which raise many of the same matters argued by the plaintiff before this Court. I am unable to find that the plaintiff was denied procedural fairness because of lack of notice of NRMA’s contention that Dr Rosenthal’s assessment of the L2 fracture did not comply with the Guidelines.

70. Dr Rosenthal, unlike NRMA when conducting its Internal Review, was a qualified medical practitioner. He was appointed to conduct a medical assessment in accordance with the Guidelines. Despite cl 6.43 of the Guidelines specifying that claimants ought to attend medical assessments with copies of radiology and medical imaging, it seems the plaintiff did not do so in that the imaging was unavailable and may not have been available to the plaintiff. Dr Rosenthal did not subsequently request copies of the imaging.

71. Dr Rosenthal did not and could not conduct his own measurements of the compression of L2 seen on the imaging, as required by cl 6.148 of the Guidelines. Clause 6.148 specifically states that assessors should not rely on estimated percentages in radiology reports in lieu of conducting their own measurements. It is in the following terms:

“6.148   Compression fracture: The preferred method of assessing the amount of compression is to use a lateral X-ray of the spinal region with the beam parallel to the disc spaces. If this is not available, a CT scan can be used. Caution should be used in measuring small images as the error rate will be significant unless the medical assessor has the ability to magnify the images electronically. Medical assessors should not rely on the estimated percentage compression reported on the radiology report, but undertake their own measurements to establish an accurate percentage using the following method:

(a)    the area of maximum compression is measured in the vertebra with the compression fracture;

(b)    the same area of the vertebrae directly above and below the affected vertebra is measured and an average obtained;

(c)    the measurement from the compressed vertebra is then subtracted from the average of the two adjacent vertebrae;

(d)    the resulting figure is divided by the average of the two unaffected vertebrae and turned into a percentage;

(e)    if there are not two adjacent normal vertebrae, then the next vertebra that is normal and adjacent (above or below the affected vertebra) is used.

The calculations must be documented in the impairment evaluation report.”

72. Once the plaintiff had applied for a medical assessment to resolve the dispute between the parties as to the L2 fracture, NRMA was entitled to expect that the dispute would be appropriately determined by the assessor in accordance with the Guidelines.

73. There is a subtle but important difference between NRMA’s two propositions. NRMA’s application for review of Dr Rosenthal’s assessment related to whether the assessment had been conducted correctly. NRMA was not specifically disputing that the compression and WPI arising may indeed be 40% and 10% respectively, but rather sought that this matter, which had been put in dispute by the plaintiff, be determined in accordance with the Guidelines.

74. In respect of this issue I have had regard to the decision of Basten JA (with whom Beazley JA and Sackville AJA agreed) in Meeuwissen v Boden. ^[36] That case dealt with the Motor Accidents Compensation Act 1999 (NSW), which was the precursor to the Act in issue in these proceedings. The process of referral of a medical assessment for panel review is largely identical under each Act.

    36. (2010) 78 NSWLR 143; (2010) 56 MVR 453; 2010] NSWCA 253.

75. Basten JA stated at [19] that what must be incorrect in a material respect is “the medical assessment” and not the certificate which results from the assessment. His Honour went on to say at [23]:

“…. where there is doubt as to the extent of the power of an administrative officer, the nature of the power itself must be taken into account. The power under s 63 is that of a gatekeeper, not a decision-maker. Where there is reasonable cause to suspect that a significant error has been made, fairness suggests that the review should be allowed to proceed. In other words, the injured party is entitled to a decision reached in accordance with a proper understanding of statutory scheme and the facts: where an important fact has been ignored, the assessment has not been properly undertaken and the statutory right subverted. Where a construction is available which would allow a full and proper assessment to occur, in place of a flawed assessment, that construction should be preferred.”

76. While the Guidelines at cl 6.148, extracted above, deal with the process that should be adopted in assessing a compression fracture, its terms are, necessarily, guides to the method of assessment. As noted in the foregoing extract, the Guidelines recommend that Medical Assessors not estimate the percentage compression by reference to the radiology report, but should undertake their own measurements. This, according to the Guideline, should be based on a lateral X-ray of the spinal region, and if unavailable, a CT scan. The Guidelines are to be construed in the context of the provisions relating to the cll 6.17 and 6.18.

77. A Medical Assessor “must evaluate the available evidence” and be satisfied that the impairment arises from the injury. In doing so, the assessment involves three stages: the review and evaluation of all the available evidence (including medico-legal reports and diagnostic findings); an interview and clinical examination; and, the preparation of a certificate using the methods specified in the Guidelines themselves.

78. In the current proceedings, the Medical Assessor did not have available to him either a lateral X-ray of the spinal region or a CT scan. Thus, an “evaluation of all the medical evidence” was required to be confined, with one exception, to the material that was available which were the two radiology reports, seemingly commissioned by each of the plaintiff and defendant. Moreover, the Medical Assessor was entitled to take some comfort from the agreement of the defendant that the injury gave rise to a 25% — 40% compression of the relevant spinal region, which accorded with the radiology reports and, thereafter, assessed the injury at the minimum level for such a compression.

79. The Medical Assessor was required to assess the medical condition upon referral by the President. ^[37] As is clear from the provisions of s 7.20(4) of the Act, the Medical Assessor may require one or both parties to provide such information as may reasonably be required. It is a condition of the insurer’s licence to comply with such a requirement and, if a party who is required to provide such information does not do so, the Medical Assessor may decline to make a medical assessment.

    37. Motor Accident Injuries Act 2017 (NSW), s 7.20(2), (3), and (4).

80. The Medical Assessor did not require the production of a scan (assuming for present purposes that there was a scan available). As a consequence, the Medical Assessor could not decline to make the medical assessment, because no party had failed to provide required information. Moreover, the President, in referring the matter to a Medical Assessor, is, at least implicitly, signifying that sufficient evidence has been provided to assess the degree of permanent impairment. ^[38]

    38. Motor Accident Injuries Act 2017 (NSW), s 7.20(3).

76. The provisions of cl 6.148 of the Guidelines assume that a CT scan or lateral X-ray is available to the Medical Assessor. In an optimal situation, the Medical Assessor should have required the production of one or other of the lateral X-ray or the CT scan.

77. However, in circumstances where there was agreement that the compression was between 25 and 40% and, as a consequence, agreement that there was an injury in the DRE III Category, such a requirement would seem to be otherwise than in accordance with the overriding purpose of a just, expeditious and cost-effective process being adopted.

78. Further, were the Medical Assessor to have assessed the L2 injury at less than 10%, he would have done so in the absence of any evidence to support such an assessment and inconsistently with each of the expert reports before the Commission. Such an assessment would give rise to an error of law and possibly have denied the plaintiff/claimant natural justice.

79. The provisions of s 7.26(5) of the Act require the President to arrange for a medical assessment to be referred to a Review Panel, only in circumstances where the President is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect. As a consequence, it is for the party seeking the review to satisfy the President (or, in this case, the delegate of the President) of the reasonable cause.

80. In circumstances where, as here, there was agreement before the Medical Assessor that the degree of compression was at or above 25%, it would be extremely easy for a party seeking review of such an assessment, to provide evidence either by way of a CT scan or lateral X-ray, showing some doubt as to the level of compression or a medical report inconsistent with the medical reports upon which the Medical Assessor relied in the initial assessment. Neither of those avenues were taken.

81. NRMA provided no evidence to demonstrate that the degree of compression was other than 25 – 40%, such that the assessment was arguably incorrect. As a consequence, there is an inference that any such evidence would not assist the case of NRMA. ^[39]

    39. Jones v Dunkel (1959) 101 CLR 298 at CLR 308 (Kitto J), 312 (Menzies J) and 317-320 (Windeyer J); [1959] HCA 8.

82. The plaintiff in these proceedings does not raise a ground of appeal based upon the absence of evidence upon which the delegate was entitled to refer the application for review to a Review Panel. The first ground of appeal raised by the plaintiff asserts the absence of a medical dispute.

83. A medical dispute existed at the time that the matter was referred to the Medical Assessor. Once an assessment has been made, the Act does not require the existence of a dispute or its continuation.

84. Further, the jurisdiction of the Review Panel (and, in that regard, the delegate to the President) is not confined to the difference between the parties as to a particular issue. Further again, expressly, the Review Panel’s jurisdiction is not confined to those issues raised by the parties.

85. If, for example, one party raised that a WPI should be assessed at 10% and another party raised that it should be assessed at 15%, a Review Panel, properly seized of the review, is not bound to reach a conclusion between 10% and 15%, subject, always, to the principles of procedural fairness. Each party has the right to make application for review and each such application gives rise to a separate and independent jurisdiction in the Review Panel. The applications for review are not interdependent and the Review Panel is entitled to deal with the whole of the assessment and each issue arising in it.

86. The foregoing circumstance is one of the reasons that the role of the “gatekeeper” is of such importance. It is the President’s function (or the function of the President’s delegate) to be satisfied that there is a reasonable basis for asserting that the medical assessment is incorrect.

87. The allegation that error of law has been committed by the delegate on the basis that there is a requirement for a medical dispute in order for a medical assessment to be referred to the Review Panel is, in my view, misconceived. This ground fails.

88. The second ground of appeal is expressed in terms of manifest unreasonableness and the decision is challenged on the basis that no reasonable decision-maker would come to this conclusion. Judicial review, including certiorari, may be based on a number of aspects.

89. The ground here expressed is not usually one which is used to encompass a decision which is based upon the absence of evidence. Nevertheless, in the absence of evidence, or in the absence of a suggestion that the methodology recommended by cl 6.148 of the Guidelines was available, the ground of appeal is adequate to encompass such an error.

90. It may be that the President or the President’s delegate may take the view that in the absence of a CT scan or a lateral X-ray, a Medical Assessor ought never assess a spinal compression injury. Such an approach would be consistent with cl 6.148 of the Guidelines.

91. But that is not the decision of the delegate. Such an approach is not the manner in which the delegate dealt with the issue.

92. In those circumstances and given the nature of the agreement as to the minimum level of compression by the applicant for review and the evidence available to the Medical Assessor, it cannot be said that there is, on the material presented to the President, reasonable cause to suspect that the medical assessment was incorrect in a material respect (or an immaterial respect). Given the most peculiar circumstances of the medical assessment, the decision of the delegate to the President was a decision, in the absence of evidence of the effect of the methodology on the assessment itself, to which no reasonable decision-maker could have come. In this area, it is necessary to bear in mind the limitation on the Court in exercising its judicial review functions.

93. The plaintiff called on the authority in Wood v Insurance Australia Group Limited t/as NRMA Insurance, where Wright J found a different decision by the Commission to be legally unreasonable, on the basis of a finding that the decision maker had fundamentally misunderstood the task required to be performed by concluding that the medical assessor was required to assess causation. In that case, causation was not in dispute between the parties, the issue having been resolved following an earlier medical assessment.

94. It has often been stated that when considering the “unreasonableness” of administrative decisions, the Court needs to be vigilant to ensure that there is separation between the function of the Court, on judicial review, and the function of the administrative decision-maker. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd,^[40] Mason J (as his Honour then was) said:

“The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned (Wednesbury Corporation, at p.228). It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power (Sean Investments Pty Ltd v MacKellar , at p 375; Reg. v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 , at p 205; Elliott v Southwark London Borough Council (1976) 1 WLR 499 , at p 507; (1976) 2 All ER 781 , at p 788; Pickwell v Camden London Borough Council (1983) QB 962 , at p 990). I say ‘generally’ because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is ‘manifestly unreasonable’. This ground of review was considered by Lord Greene MR in Wednesbury Corporation, at pp.230, 233–234, in which his Lordship said that it would only be made out if it were shown that the decision was so unreasonable that no reasonable person could have come to it. This ground is now expressed in ss.5(2)(g) and 6(2)(g) of the ADJR Act in these terms. The test has been embraced in both Australia and England.”^[41]

40. (1986) 162 CLR 24; [1986] HCA 40.

41. Ibid at CLR 40–41.

100. Notwithstanding the caution that must be exercised by the Court in concluding that no reasonable decision-maker would come to this conclusion, I consider this ground is established.

101. Lastly, it is necessary to deal with the third ground of the plaintiff’s application for judicial review.

102. The final ground relied upon by the plaintiff is that NRMA ought to have been estopped from asserting that the medical assessment of L2 was incorrect in a material respect, in light of its concession that the L2 fracture was in DRE Category III. The plaintiff, in his written submissions, relied on the type of estoppel described by Deane J in Commonwealth v Verwayen ^[42] , which is known as conduct estoppel. Conduct estoppel is a principle which prevents an unconscientious departure by one party from an assumption adopted by the other as the basis of a relationship to the other’s detriment.

     42. (1990) 170 CLR 394; [1990] HCA 39.

103. A critical aspect of such a claim is that the party who has adopted the assumption must have acted upon that assumption in a way which would be detrimental to it, should the assumption not be made good. This was not a factor with which the plaintiff engaged in the course of evidence or submissions, and as such a claim for conduct estoppel is not made out.

104. For completeness, while it was not raised by the plaintiff specifically, it is pertinent to make some brief comments on Anshun estoppel^[43] in the context of this application. As I have had cause to remark in the past, Anshun estoppel aims to prevent a party to litigation from later agitating an issue that reasonably could have, or should have, been raised in the earlier proceedings. ^[44] While NRMA did not call into question degree of compression of the lumbar injury featured in the radiology until its application to refer Dr Rosenthal’s assessment to a Review Panel, a review is a hearing de novo, and the delegate was to undertake a new assessment of all matters with which the medical assessment was concerned. ^[45] As such, the course of the matter prior to the delegate’s decision was not sufficiently final to enliven the doctrine of Anshun estoppel.

     43. Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; (1981) HCA 45.

     44. De Gelder v Rodger [2014] NSWSC 872 at [115].

     45. Motor Accident Injuries Act 2017 (NSW), s 7.26(6).

105. As the evidence currently stands, I do not consider that ground 3 has been established.

Orders

106. As a consequence of the foregoing reasons, I make the following orders:

1. Judgment for the plaintiff.

2. An order in the nature of certiorari quashing the decision of the delegate of the President on 25 August 2022 in the application for review lodged by the first defendant in relation to the medical assessment of Dr Rosenthal of 17 June 2022.

3. Remit the aforesaid application for review to the second defendant to deal with in accordance with law.

4. The first defendant shall pay the plaintiff’s costs of and incidental to these proceedings.

5. The first defendant shall, to the extent otherwise eligible, have a certificate under s 6 of the Suitors’ Fund Act 1951 (NSW).

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Endnotes

Decision last updated: 30 October 2023