Allianz Australia Insurance Limited v Estate of the Late Summer Abawi [2025] NSWCA 85
Key Principles
- The NSW Court of Appeal has overturned the decision of Allianz Australia Insurance Limited v The Estate of the Late Summer Abawi [2024][1] in which the NSW Supreme Court had determined that skin lacerations were non-threshold injuries for the purposes of the Motor Accident Injuries Act 2017 (NSW) (the Act).
- An injury to the skin that does not involve an injury to nerves is a ‘soft tissue injury’ for the purposes of the Act.
- A skin injury such as a laceration will generally be considered a threshold injury, as defined by the Act.
- Some significant skin injuries, such as those caused by burns or road rash (non-exhaustive list), may fall outside the definition of ‘soft tissue injuries’ because they also involve an injury to the nerves.
Background
In order to retain an entitlement to statutory benefits beyond 52 weeks post-accident, and an entitlement to common law damages, the injuries a person sustains in a motor vehicle accident must fall outside the definition of ‘threshold injury’ as defined in section 1.6 of the Motor Accident Injuries Act 2017 (NSW) (‘The Act’).
A soft tissue injury is considered a ‘threshold injury’ for the purposes of the Act, which provides the following definition:
1.6 Meaning of “threshold injury”
(2) A soft tissue injury is (subject to this section) an injury to tissue that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes), but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage.
On 8 December 2017 the claimant was involved in a motor vehicle accident, in which she sustained soft tissue injuries to the neck, back, shoulders, and lacerations on both wrists. Initially, a PIC medical assessment determined the lacerations sustained to both wrists were not related to the accident. However, a Review Panel later concluded that the lacerations were accident related. The Review Panel also decided that the lacerations were not threshold injuries for the purposes of the Act.
Judicial Review was sought by the Insurer, in the NSW Supreme Court with Justice Griffith deciding that an injury to the skin is not a ‘soft tissue injury’ for the purposes of the Act because:
- Parliament stipulated a long list of examples as to what constitutes a soft-tissue injury and skin is omitted from that list.
- The parties agreed with the Review Panel that the skin is both a tissue and an organ.
- While it was anomalous that Parliament had omitted skin injuries from the list of example soft tissue injuries, it was considered plausible that the list was non-exhaustive out of a concern to not exclude “some kind of esoteric tissue which ‘connects, supports or surrounds other structures or organs of the body’”.
The insurer appealed the Supreme Court decision.
Decision
Justice Kirk, with Justice Adamson and Justice Stern in agreement, upheld the appeal, deciding that an injury to skin which is not a nerve injury is, of itself, a soft tissue injury for the purposes of the definition outlined at section 1.6 (2). Justice Kirk also went on to address the following issues:
1. Skin is characterised as both ‘tissue’ and an organ
The parties agreed that skin is considered both ‘tissue’ and an organ, and there was no dispute that skin supports or surrounds organs of the body. The parties also agreed that organs such as the heart and brain could be said to support other structures within the body in at least one sense, and that Parliament could not have intended for injuries to these organs to fall within the definition of ‘soft tissue injury’.
For the purposes of the Act, Justice Kirk concluded that the words “connects, supports or surrounds” within the definition should be read as identifying the dominant or primary physical function of the tissue. With this interpretation, the primary function of skin is to connect, support, or surround other issue, and while skin is an organ, its primary function places it within the definition of ‘soft tissue’.
2. The exclusion of ‘skin’ within the definition of ‘soft tissue injury’ is of little significance
Justice Griffith had noted that Parliament stipulated a long list of examples as to what constitutes a soft-tissue injury, and that skin is omitted from that list. His Honour had suggested that if skin was to be considered a soft tissue injury, it could have readily been included within the list.
Justice Kirk respectfully disagreed with this interpretation, stating that skin could have been just as readily listed as an exclusion in the event Parliament intended for such a commonplace injury to be excluded from the definition.
3. Skin injuries are common, but not an inevitable consequence
The insurer had argued that the primary judge’s construction of section 1.6 has the effect in practice of reading the threshold injury test out of existence. It was argued that it was exceedingly commonplace for a person to sustain some sort of minor cut, scratch, or bruise, in a motor vehicle accident, and that based on Justice Griffith’s interpretation, those claimants who were “plainly intended to be caught by the soft tissue injury definition” would be entitled to extended statutory benefits and damages, thus opening a ‘floodgate’ of claims. [2] It was accepted that skin injuries may be frequent, but they are not an inevitable consequence. Reference was made to the 2020 SIRA Report, which suggested that 19% of reported cases involved a ‘skin type injury’. Ultimately, Justice Kirk was not persuaded that the primary decision rendered the threshold injury test abortive, finding that each case will turn on its unique factual circumstance.
4. Some significant skin injuries may fall outside the definition of ‘soft tissue injury’
Justice Kirk confirmed that some significant skin injuries, such as those caused by burns or road rash (non-exhaustive list), may fall outside the definition of ‘soft tissue injuries’ because they also involve an injury to the nerves. The Court concluded that the question of nerve involvement in an injury is a matter for medical assessment, and that each case will turn on its own unique circumstances.
The claimant sought to have the matter remitted for fresh PIC medical assessment, on the basis that the previous Assessors did not have the benefit of the Court’s clarification on the definition of ‘soft tissue injuries’. Justice Kirk referred to the Review Panel Certificate, which stated there was no evidence of any nerve injury in either wrist, and refused to remit the matter for assessment. The appeal was allowed.
Why this decision is important
Since its introduction, numerous anomalies have been identified within the threshold injury test contained in the Motor Accident Injuries Act 2017. The Court of Appeal’s decision brings much-needed clarity to the definition of a ‘soft tissue injury’.
Notably, the Court only made reference to significant skin injuries with nerve involvement falling outside the definition of ‘soft tissue injuries’. Based on the reasons outlined by Justice Kirk, it could also be said that skin injuries involving a complete or partial rupture of tendons, ligaments, menisci, or cartilage will also fall outside of the definition. Correspondingly, injuries such as simple abrasions, bruising or even haematoma are now unlikely to attract the definition of a non-threshold injury.
Nevertheless, it is not anticipated that this decision represents the end of disputes regarding the interpretation of the Act’s ‘threshold injury’ test. Justice Kirk acknowledged that section 1.6(4) of the Act allows for a specific injury to be included or excluded from the definition via the Motor Accident Regulation 2017. While the Court ultimately concluded that this would not permit regulations wholly inconsistent with the purposes of the Act itself, future amendments to the Motor Accident Regulation 2017 may provide an extrinsic source of clarity regarding the classification of skin injuries in unique case-by-case circumstances.
Further information
This article was written by Solicitor Allisa Hollier and reviewed by Principal Andrew Gorman. For further information or advice on any related matters please contact Andrew.
Disclaimer: This information is current as of May 2025. 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.
[1] NSWSC 1245
[2] Allianz Australia Insurance Limited v Estate of the Late Summer Abawi [2025] NSWCA 85 [52].
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