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#4 – Review Panel finds Rotator Cuff Tear Sustained During Treatment is a Non-Threshold Injury

Decision

Gibbin v AAI Ltd t/as GIO [2025] NSWPICMP 523

Principles

✅ At Common Law, injury sustained during the application of reasonable and necessary treatment may have been caused by the motor accident unless the application of the treatment is grossly negligent.

✅ A rotator cuff tear sustained during treatment for a frozen shoulder was, therefore, found to be a non-threshold injury.

✅ The Court of Appeal has previously doubted, however, whether consequential surgery constitutes an “injury” – see Mandoukos v Allianz Australia Insurance Limited [2024] NSWCA 71.

Sixty-Second-Or-Less Summary

A Claimant suffers a frozen left shoulder as a consequence of a motor accident. She subsequently undergoes manipulation of her shoulder under anaesthetic which, on the balance of probabilities, causes a right rotator cuff tear.

Has the Claimant sustained a non-threshold injury?

In Gibbin v GIO, the Medical Review Panel noted that the original accident caused any injury sustained during reasonable and necessary treatment unless the treatment was grossly negligent because a mishap during treatment is a foreseeable consequence of the original accident. The Panel, therefore, concluded that the motor accident caused the rotator cuff tear which is, of course, a non-threshold injury.

Query, however, whether the Review Panel overlooked the Court of Appeal’s decision in Mandoukos v Allianz.

Facts

The Claimant was injured in a motor accident on 21 March 2019 when the vehicle she was driving was struck from behind at 80 kph.

The Insured denied liability for ongoing statutory benefits (and, effectively, for common law damages) on the grounds that the only injuries sustained by the Claimant were threshold injuries.

The threshold injury dispute proceeded to the Commission for assessment. A Medical Assessor subsequently found that the accident caused soft tissue injuries to the cervical spine and left shoulder, which were both threshold injuries.

The Medical Assessor noted a left rotator cuff tear, revealed by an MRI in November 2020, but concluded that the tear was age-related and not caused by the motor accident.

The Claimant successfully applied for referral to the Review Panel.

The Review Panel’s Decision

The Review Panel determined that the motor accident caused a non-threshold injury to the Claimant’s left shoulder for the following reasons:

🟪 Whilst there was no history of any direct impact to the Claimant’s left shoulder, she was holding the steering wheel when the rear-end impact occurred.

🟪 The forces involved in the accident were capable, from a medical perspective, of causing a left shoulder injury.

🟪 The Claimant made complaints of left shoulder pain to her GP seven days post-accident.

🟪 The Claimant subsequently developed a frozen left shoulder.

🟪 On the balance of probabilities, the accident caused an injury to the Claimant’s left shoulder which developed into a frozen shoulder.

🟪 The Claimant underwent manipulation of her left shoulder under anaesthetic on 15 November 2019.

🟪 A subsequent MRI scan on 26 November 2020 revealed a full thickness left rotator cuff tear.

🟪 The manipulation under anaesthetic procedure was a reasonable and necessary treatment measure to address the Claimant’s frozen left shoulder.

🟪 A torn rotator cuff is a known risk associated with manipulation under anaesthetic.

🟪 The High Court held in Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522 that the original tortfeasor remains liable for injury caused by any subsequent treatment unless the conduct of the subsequent treatment provider can be categorised as grossly negligent.

🟪 It followed that the accident caused a frozen left shoulder, necessitating manipulation under anaesthetic, which caused a rotator cuff tear which is a non-threshold injury.

Pete’s Perspective

The Review Panel in Gibbin applied the common law principle that an adverse treatment outcome, even if the result of negligence, is a foreseeable consequence of the original tortfeasor’s negligence in causing the original accident. Only gross negligence breaks the causal chain between the original accident and the adverse treatment outcome.

The Review Panel, therefore, concluded that the motor accident caused the left rotator cuff tear which resulted from the manipulation under anaesthetic designed to alleviate the Claimant’s frozen shoulder. There was no suggestion that the rotator cuff tear was the result of gross negligence. It was a foreseeable risk of the manipulation under anaesthetic.

The Review Panel appears to have overlooked, however, the doubts expressed by the Court of Appeal in Mandoukos v Allianz, at [99], re whether consequential surgery can transform a threshold injury into a non-threshold injury. My full McCabes Lawyers Case Note on Mandoukos can be found here.

PJH

#3 – Review Panel Wrong-Footed by Wingfoot

Decision

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

Principles

✅ A decision-maker fails to provide a proper path of reasoning if it states a conclusion without explaining how they came to that conclusion by reference to the evidence before them.

✅ A decision-maker denies a party procedural fairness if it decides a dispute on a basis not put by the parties without giving the parties a chance to be heard.

Sixty-Second-Or-Less Summary

A Review Panel finds a lumbar cartilage tear and concludes that the motor accident caused a non-threshold injury.

The Insurer seeks Judicial Review in the Supreme Court.

Is the Review Panel’s decision afflicted by administrative error?

In IAG v Cahill, the Supreme Court found that the Review Panel failed to explain how it came to a random conclusion which was not addressed by either party and that the Review Panel denied the Insurer procedural fairness by not giving it a chance to address the random conclusion it proposed reaching.

Facts

The Claimant was injured in a motor accident on 9 July 2020.

The Insurer subsequently determined that the Claimant was not entitled to ongoing statutory benefits (or common law damages) because the injury to this lumbar spine was a threshold injury.

The threshold injury dispute proceeded to a PIC Medical Assessment. The original Medical Assessor determined that the accident did not cause any injury to the Claimant’s lumbar spine and that any lumbar complaints were caused by pre-existing multiple sclerosis.

The Claimant successfully sought a referral to the Review Panel. The Review Panel disagreed with the original Medical Assessor and found that the accident caused a non-threshold injury to the lumbar spine based on a tear of the lumbar disc cartilage.

The Insurer sought Judicial Review in the Supreme Court.

The Supreme Court’s Decision

Justice Adamson allowed the Insurer’s application for two reasons:

🟪 Failure to Give Reasons – the Review Panel failed to include any information in its reasons to explain its finding that the accident caused a lumbar disc cartilage. As such, the Panel failed to meet the standard required by Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 because the Panel failed to set out the actual path of reasoning which led to its conclusion.

🟪 Denial of Procedural Fairness – the Review Panel found a lumbar cartilage tear in circumstances where neither party presented any evidence or submissions with regard to the presence of a lumbar cartilage tear and neither party could have contemplated that the Review Panel would resolve the dispute on the grounds of a lumbar cartilage tear. The Panel denied the Insurer procedural fairness because it failed to alert the Insurer to its thinking and give the Insurer an opportunity to be heard on the cartilage tear issue.

Pete’s Perspective

The Supreme Court’s decision in Cahill confirms the high onus on a PIC Medical Assessor or a PIC Review Panel to give proper reasons for their decision. In this dispute, the Review Panel fell short of the required standard by making an apparently random decision without either explaining their thinking of giving the parties a chance to be heard on the random conclusion it reached.

PJH

#2 – Can Treatment & Care be Found on the Uber App?

PIC Decision

Phothisenh v AAI Limited t/as AAMI [2025] NSWPIC 338

Principles

✅ A claim for the cost of transporting an injured child to school, via private transport, could be a claim for “treatment and care” because it is a claim for “transport modification” and/or a claim for “rehabilitation” and/or a claim for “attendant care services“.

✅ A claim for the cost of transporting an injured child to school, via private transport, is not a claim for “education and vocational training” because that term is limited to education and vocational training required as a consequence of an injury, not to the compulsory education of a child.

Sixty-Second-Or-Less-Summary

An infant Claimant claims she requires private transport to get to and from school.

Is the cost of the private transport recoverable as a statutory benefit for treatment and care?

In Phothisenh v AAMI, a PIC Member found that the cost of private transport could constitute “transport modification“, “rehabilitation” or an “attendant care service“, all of which are included in the exhaustive list of items which constitute “treatment and care” found in s 1.4 of MAIA.

As such, the claim for private transport was a claim for treatment and care. Whether the transport was reasonable and necessary and related to the injuries sustained in the accident, however, was a Medical Assessment Matter to be determined by a Medical Assessor.

Facts

The Claimant was only five and a half years old when she was involved in a motor accident on 18 July 2023. On that day, she was crossing the road with her mother. She was riding a scooter and she was crossing under the protection of a pedestrian crossing. One motorist stopped to allow the Claimant and her mother to cross the road. The Insured, however, failed to stop and collided with the Claimant.

The Claimant sustained facial injuries together with fractures of both her left and right femurs. She was restricted to a wheelchair for some period post-MVA.

A dispute subsequently arose between the Claimant and the Insurer regarding the Claimant’s need for private transport to and from school.

The dispute was initially allocated to a Member, as a Miscellaneous Assessment Matter, to determine whether the claim for private transport constituted a claim for treatment and care within the meaning of section 1.4 of the Motor Accident Injuries Act 2017 (MAIA).

Relevant Definitions

The definition of “treatment and care” in section 1.4 of MAIA includes, amongst other items, “education and vocational training“, “rehabilitation“, “home and transport modification” and “attendant care services“.

The term “rehabilitation” is separately defined in s 1.4 as follows:

“…the process of enabling or attempting to enable the person to attain and maintain—

(a)  the maximum level of independent living, and

(b)  full physical, mental, social and vocational ability, and

(c)  full inclusion and participation in all aspects of life.“

The term “attendant care services” also has its own definition s 1.4 as follows:

“..services that aim to provide assistance to people with everyday tasks, and includes (for example) personal assistance, nursing, home maintenance and domestic services.”

The Member’s Decision

The Member addressed the multiple arguments advanced by the parties as follows:

Is Education Treatment?

The term “education and vocational training” in the definition of “treatment” in s 1.4 of MAIA does not include the compulsory education of children. The term is directed to additional education and vocational training required as a consequence of an injury. For example, a hypothetical Claimant with a head injury might require specialised education and training as a consequence of that injury. It follows that transport to and from school is not transport for the purpose of obtaining “treatment“.

Is Travel to School Rehabilitation?

If a hypothetical Claimant needed assistance to access the school grounds and enter the classroom, that assistance would be part of the Claimant’s rehabilitation because it would be part of a process which helps the Claimant attain and maintain full inclusion in their school life. The same applies, in this claim, to getting the Claimant to school in the morning and home again in the afternoon. Whether the process of the Claimant’s rehabilitation has ended is a Medical Assessment Matter to be determined by a Medical Assessor.

Is Uber Travel a Form of Transport Modification?

Travelling to school via Uber rather than public transport is a form of “transport modification” as that term is used in the definition of “treatment and care” in section 1.4 of MAIA. “Transport modification” refers to a change or an alteration in the way the Claimant was transported before the accident. In this case, the Claimant used public transport before her accident. Following the accident, she claims she needed to modify that arrangement and use private vehicles.

Is Taking a Child to School an Attendant Care Service?

Taking a child to school is an “everyday task” in the sense that it is routine or commonplace. Furthermore, given that the Claimant could not go to and from school by herself, given her age, accompanying her to school is a form of “personal assistance“. Whilst the Claimant’s mother would have assisted her to get to and from school, irrespective of her injury, the change in transport from public transport to a private vehicle is a form of treatment and care provided to the Claimant because of her injury.

As such, the Member found that the claim for private travel was a claim for treatment and care within the meaning of sections 1.4 and 3.24 of MAIA because it was a claim for transport modification and/or a claim for attendant care services and/or a claim for rehabilitation.

Whether the private transport was reasonable and necessary and related to the injuries the Claimant sustained in her accident was a Medical Assessment Matter. Any subsequent dispute about the cost would be a Merit Review Matter.

Pete’s Perspective

The decision in Phothisenh is instructive because it demonstrates the overlap that exists between the twelve items listed in the definition of “treatment and care” in s 1.4 of MAIA. In this claim, the Member found that the private transport sought by the Claimant fell within three separate items in the definition.

It is important to understand, however, that the Member’s role was limited to deciding whether the claim for private transport was a claim for “treatment and care” within the definition. It was not the Member’s role to decide whether the claim for private transport was reasonable and necessary, in the circumstances, and whether the claim related to the injuries the Claimant sustained in the accident. Those issues were to be decided in a subsequent medical assessment conducted by a Medical Assessor.

PJH

#1 – Mostly at Fault? Can’t Get No (Reasonable) Satisfaction

PIC Decision

PXAYL v Insurance Australia Ltd t/as NRMA Insurance [2025] NSWPIC 324

Principles

✅ In most-at-fault disputes, the onus is on the Insurer to demonstrate what happened and that the accident was caused, wholly or mostly, by the Claimant’s fault.

✅ Whilst the required standard is “reasonable satisfaction”, that crossbar is high given that the Claimant’s entitlement to ongoing statutory benefits will end if the Insurer satisfies the Commission that the Claimant was wholly or mostly at fault.

Sixty-Second-Or-Less Summary

The Claimant is driving along a major arterial road. She starts to merge into the kerbside lane to her left because she wants to make a left hand turn in the near future. At around the same time, the Insured enters the arterial road from a cross-street and enters the kerbside lane. The two vehicles collide. The Insurer determines that the Claimant was wholly or mostly at fault for her accident because she failed to maintain a proper lookout whilst changing lanes. The Claimant challenged that decision.

Was the Claimant wholly or mostly at fault?

The PIC Member found that the Claimant was not wholly or mostly at fault because the Insurer failed to demonstrate, to the Member’s reasonable satisfaction, that the Insured was already established in the kerbside lane before the Claimant started merging into that lane.

Facts

On 26 June 2024, at approximately 8.15am, the Claimant was driving in the middle of three lanes along The Northern Road, Glenmore Park. Her intention was to merge into the lane on her left because she wanted to make a left hand turn into Jamison Road.

In the meantime, the Insured had entered The Northern Road from Garswood Road and entered the lane to the Claimant’s left.

The Claimant started to merge into the lane to her left and the front left wheel of the Claimant’s vehicle collided with the front right bumper and wheelarch of the Insured vehicle.

The Insurer served a Liability Notice denying liability for ongoing statutory benefits on the grounds that the accident was wholly or mostly caused by the Claimant’s fault.

The Insurer alleged that the Claimant failed to maintain a proper lookout when merging to her left.

The Claimant argued that the Insured was at fault because they failed to notice the Claimant merging into the kerbside lane when they entered The Northern Road from Garswood Road.

Following an unsuccessful Internal Review, the Claimant lodged a Miscellaneous Assessment in the Personal Injury Commission.

The Member’s Decision

The Member determined that the Claimant was not wholly or mostly at fault for the following reasons:

🟪 The onus is on the Insurer to prove that the accident was caused wholly or mostly by the Claimant’s fault.

🟪 Whilst the standard is one of “reasonable satisfaction”, careful regard must be had to the nature, strength and limitations of the available evidence given that the consequences are serious. The Claimant will be disentitled from ongoing benefits.

🟪 Clause 149(2) of the Road Rules 2014 provides that a driver moving from one line of traffic to another must give way to any vehicle already travelling in the destination lane. The rule only applies, however, if the Insured was, in fact, already occupying the destination lane when the Claimant began to merge.

🟪 The geometry of the road and the damage profile to each vehicle was consistent with both vehicles entering the kerbside lane at roughly the same time.

🟪 The evidence failed to establish that the Claimant’s version was implausible.

🟪 In those circumstances, the Insurer failed to discharge its burden of demonstrating that the Claimant was wholly or mostly at fault.

Pete’s Perspective

The decision in PXAYL illustrates the challenges facing Insurers when the circumstances of an accident are ambiguous.

Putting it bluntly, the Insurer fails to discharge its onus of proving that the Claimant was wholly or mostly at fault if it fails to demonstrate, through cogent evidence, how the accident occurred.

PJH