Australia: Proper test for the Proper Officer

Curwoods Case Note
Last Updated: 29 September 2012
Article by Joseph Vermiglio

AAMI Ltd v Ali [2012] NSWSC 969

Judgment date: 24 August 2012

Jurisdiction: Supreme Court1

In Brief

  • The failure of a Proper Officer to expressly refer to evidentiary material in a decision will not automatically demonstrate a failure to afford natural justice.
  • The substituted word used in the application of a statutory test by a decision maker must be considered in context before one can conclude that the incorrect test was applied.
  • A Claims Assessor or Court is not constrained by the requirement for deterioration or additional information about an injury when considering referral for further assessment under s 62(1)(b).


On 13 November 2006, Mr Ali was injured in a motor vehicle accident. Medical Assessor Lethlean certified that the injuries to the head, back and right shoulder exceeded the 10% WPI threshold. Medical Assessor Williams determined 3% WPI for the injury to the eighth cranial nerve resulting to deafness and tinnitus. Medical Assessor Lewin determined 26% WPI due to the major depressive disorder.

On 5 August 2010, AAMI lodged a MAS 4A Application for further assessment of Mr Ali's psychiatric and neurological injuries. The Proper Officer allowed a further assessment of Mr Ali's head, back, right shoulder and psychiatric injuries, but not for the damage to the cranial nerve. Further appointments were made with Dr Lewin, Psychiatrist and Dr Fitzsimons, Neurologist.

On 1 June 2011, Dr Fitzsimons assessed 17% WPI for the injuries to the head, back and right shoulder. AAMI lodged a MAS 5A seeking a referral of Dr Fitzsimons' assessment to the review panel. AAMI complained that Dr Fitzsimons' report was based substantially on Mr Ali's "subjective complaints" which AAMI contended were not credible.

On 2 August 2011, Dr Lewin provided a further certificate in relation to the psychiatric injuries. He accepted that Mr Ali was suffering from post-traumatic stress disorder, but concluded that it was not caused by the motor accident. He concluded that it arose as a result of his military service, subjection to torture, prolonged imprisonment, and separation from his family prior to arriving in Australia. This prompted AAMI to provide further submissions to the Proper Officer on 7 September 2011. The submissions set out passages from Dr Lewin's report in which Dr Lewin referred to the inconsistencies in Mr Ali's history and stated that "any formal assessment of impairment which relies upon [Mr Ali's account] is meaningless".

First Decision – Proper Officer

The Proper Officer declined AAMI's application under s 63(1) of the Motor Accidents Compensation Act 1999 (MAC Act). The primary basis for the Proper Officer's decision was that Dr Fitzsimons had appreciated that, although Mr Ali's history was unreliable, he had suffered a severe head injury in the accident. Dr Fitzsimons then applied an objective test to arrive at her determination of WPI, irrespective of Mr Ali's account. AAMI challenged the decision on two grounds.

First, AAMI submitted that the Proper Officer erred in law when he stated that he was not "persuaded" as opposed to "satisfied" in accordance with the test contained within s 63(3) of the MAC Act. Beech-Jones J rejected this argument stating that it was clear on a fair reading of the reasons that the reference to being persuaded was a reference to being persuaded that the criteria in s 63(3) was established.

AAMI's second complaint was that the Proper Officer failed to have regard to Dr Lewin's assessment in applying the test in s 63(3) and therefore failed to accord natural justice. AAMI pointed to the absence of any express reference to it in the Proper Officer's reasons. In rejecting this argument, his Honour noted that there was nothing in the MAC Act which imposed on the Proper Officer an obligation to consider the entirety of the evidentiary material placed before him when addressing a request under s 63(3). AAMI needed to demonstrate that the alleged act of overlooking the relevant material flowed from some legal misconception about the function being exercised by the tribunal or administrative decision.

After considering the decision of Minister for Immigration and Multicultural Affairs v Yusuf 2 , his Honour emphasised that the task was not one of simply identifying evidentiary material that was relevant to the decision maker's task and then ascertaining whether it was referred to in their reasons. It involved a process of determining whether or not it was considered and, if not, why it was not considered.

Beech-Jones J noted the letter written by the Proper Officer on 8 September 2011 to AAMI acknowledging receipt of their letter dated 7 September 2011 which referred to Dr Lewin's second report. In that letter, the Proper Officer stated he would consider the issues raised by AAMI. Given the letter of 8 September 2011 and the Proper Officer's obligation to give "brief reasons", his Honour did not think that the absence of any express reference to Dr Lewin's second report in the Proper Officer's reasons demonstrated that it was not taken into account. The challenge on the Proper Officer's first decision was rejected.

Second Decision – Proper Officer

On 31 October 2011, AAMI lodged an application for further assessment under s 62(1)(a). AAMI submitted that Dr Lewin's second report was "additional relevant information" sufficient to require a further assessment. On 27 January 2012, another Proper Officer rejected the application.

AAMI challenged the decision and submitted that the Proper Officer imposed the wrong test in so far as she stated that AAMI's application and submissions were not enough to "convince" her that s 62(1A) was satisfied. His Honour rejected this submission, noting that AAMI took no complaint with the expression of the test made in the Proper Officer's first paragraph which was stated correctly and demonstrated that in the context the correct test was applied.

The second alleged error was that the Proper Officer failed to identify Dr Lewin's second report as "additional relevant material". Whilst the Proper Officer did not determine whether or not Dr Lewin's report constituted additional relevant information, she nevertheless concluded that s 62(1A) was not satisfied. The court held that this did not involve an error.

Third Decision – Claims Assessor

On 27 February 2012, AAMI's solicitors wrote to the Claims Assessor and stated that they were making an application to have him remit the matter back to MAS for assessment pursuant to s 62(1)(b) of MAC Act. A Preliminary Conference occurred and the Claims Assessor refused to refer the matter back to MAS. In doing so, the Claims Assessor stated that he only had the power to refer the matter for further assessment "on grounds of the deterioration of the injury of additional relevant information about the injury". AAMI submitted that this was not a limitation upon his power under s 62(1)(b), but instead only a limitation on the circumstances in which a party to a medical dispute could seek further assessment.

His Honour agreed with AAMI's submissions. The Claims Assessor wrongly construed s 62(1) and imposed an added gloss on the statutory test which had no constraints other than the purpose and scope of the MAC Act.


The wording which the Proper Officer uses in relation to the statutory tests imposed upon him or her in a decision needs to be read in context. The impression that the Proper Officer substituted a similar word will, of itself, not indicate failure to apply the correct test.

In determining whether a decision maker failed to afford natural justice by not expressly referring to a piece of evidence, the task is not one of identifying evidentiary material that was relevant and whether it was referred to in the reasons. The proper test is to determine whether it was considered and, if not, determine why it was not considered. Documents external to the decision itself may also shed light on a Proper Officer's considerations.

If there are grounds for referral of a matter for further medical assessment other than additional relevant information, insurers should remember that a Court or Claims Assessor has the power to refer it pursuant to s 62(1)(b).


1 Beech-Jones J
2 [2001] HCA 30

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