INSIGHTS: The legal duty under section 7.26(5) of the Motor Accident Injuries Act 2017 (NSW)

Insurance Australia Limited t/as NRMA Insurance v Momand [2024] NSWSC 1529

Key takeaways

• When considering an application for the review of a Medical Assessment Certificate under s 7.26(1) of the Motor Accident Injuries Act 2017 (NSW) (“The Act”), the president of the Personal Injury Commission (“PIC”), or their delegate, must engage in an active intellectual process regarding the submissions made in the application.
• A diagnosis of Post-Traumatic Stress Disorder (“PTSD”) cannot be made if the injured person was not exposed to death or threatened death or serious injury in a severe motor accident, in criterion A in the Diagnostic and Statistical Manual of Mental Disorder (“DSM-V”).

Background

Hedgerat Ahmad Momand (“the Claimant”) was injured in a motor vehicle accident on 11 March 2021 when a van collided with the rear of his vehicle. On 1 March 2023, he filed an application for assessment of his whole person impairment at the PIC. In his application, the Claimant alleged the following psychiatric injuries:

1. Chronic PTSD, and
2. Co-morbid Persistent Depressive Disorder.

On 17 October 2023, a Medical Assessment Certificate (“MAC”) was issued following Dr Abhishek Nagesh’s (“the Assessor”) assessment of the Claimant. The Assessor diagnosed Chronic PTSD which was caused by the accident and yielded whole person impairment of 15%.

 On 28 November 2023, NRMA Insurance (“the Insurer”) filed an application in the PIC for the referral of the MAC to a review panel pursuant to s 7.26(1) of the Act. Notably, s 7.26(5) of the Act requires the President (or his delegate) to be satisfied that there is no reasonable cause to suspect that the medical assessment was incorrect in a material respect, before a matter is referred for review.

On 8 February 2024, the Delegate of the President of the PIC (“The Delegate”) determined, pursuant to s 7.26(5) of the Act, that there was no reasonable cause to suspect that the MAC and the reasons for the medical assessment were incorrect in a material respect. Therefore, the Insurer’s application was denied. The Insurer applied to the Supreme Court for judicial review of the Delegate’s decision.

Issues

The Insurer raised three grounds for review that concern the manner in which the Delegate considered the Claimant’s application:

1. Constructive jurisdictional error, in that the Delegate:

1. failed to consider a substantial claim or argument advanced
2. failed to have regard to the particulars set out in the referral application as required by
   s 7.26(5) of the MAI Act
3. failed to consider whether the medical assessment was incorrect in a material respect by reason of the medical assessor’s failure to determine whether the injury of the PTSD was caused by the motor accident, and whether the degree of permanent impairment was a result of the injury
4. failed to conclude that there was a reasonable cause to suspect that the medical assessment was incorrect in a material respect on account of the finding in the medical assessment that the claimant had a “significant accident where he was exposed to death” when there was no evidence to support that finding
5. could not reasonably have reached the conclusion that she did not reasonably suspect that the medical assessment was incorrect in a material respect.

2. A denial of procedural fairness.
3. An error on the face of the record.

Decision

Ground 1

The Claimant alleged that the insured van collided with the rear of his vehicle at a speed of 70 to 80 km/h.

A biomechanical engineer provided a report which included photographs that evidenced minor damage to both the Claimant’s car and the insured van. Based on the damage, and the other evidence available at the scene, the report determined that it was likely the closing speed was approximately 10 to 15 km/h.

The Insurer made it clear in their submissions to the medical assessor that the physical evidence at the accident scene confirmed the accident was minor. Thus, the diagnosis of PTSD could not have been consistent with the DSM-V (Criterion A) as the Claimant was not exposed to actual or threatened death or serious injury.

These concerns were also set out by the Insurer in their submissions to refer the MAC to the review panel.

In reviewing the Delegate’s decision, the court determined that the Delegate failed to engage in an intellectual process when considering the Insurer’s submissions in the application regarding the Claimant’s diagnosis of PTSD. Had the Delegate done so, the court determined she should have formed the opinion that a diagnosis of PTSD would not be appropriate as the accident severity did not satisfy the DSM-V (Criterion A).

The court also found that the reasons given by the medical assessor for issuing the MAC were insufficient in explaining why he accepted the history from the Claimant in preference to the Insurer’s argument. The court stated that the inadequacy of the Assessor’s explanation, should have been readily apparent to the Delegate.

Grounds 2 and 3

By failing to consider the omission of an adequate explanation for the medical assessor’s findings, the court agreed the Insurer suffered a denial of procedural fairness and an error on the face of the record.

Final Result

The Court found in favour of the Insurer.

The decision of the delegate was quashed. The matter was remitted to the PIC for determination of the Insurer’s application under s 7.26(1) of the Act. The Claimant was ordered to pay the Insurer’s costs.

Why the decision is important

This decision highlights the important legal duty imposed by s 7.26(5) of the Act on the President of the PIC and their delegates when assessing a MAC referral application.

For a decision to be made pursuant to s 7.26(5) of the Act, as to whether there “was a reasonable cause to suspect the medical assessment was incorrect in a material respect having regard to the particulars set out in the application”, a decision maker must actively engage in an intellectual process in order to effectively address the submissions made in the application.

A failure to properly understand and discharge this duty may result in procedural unfairness, potentially disadvantaging the parties involved.

The court confirmed that a diagnosis of PTSD must be made in accordance with the DSM-V. In this case specifically, PTSD is not available as a diagnosis if the Claimant had not experienced a traumatic event involving actual or threatened death or serious injury.

This Case Note was written by Graduate, Jake Mulqueeney, with the assistance of Principal Andrew Gorman. For further information or advice on any related matters please contact Andrew.

Disclaimer: This information is current as of December 2024. This article does not constitute legal advice and does not give rise to any solicitor/client relationship between Meridian Lawyers and the reader. Professional legal advice should be sought before acting or relying upon the content of this article.