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