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Case summary: Allianz Australia Insurance Limited v Estate of the Late Summer Abawi [2025] NSWCA 85 – When is a skin injury a ‘threshold injury’? NSW Court of Appeal provides clarity

Published on July 10, 2025 by Tim Concannon and Michael Greene

The recent decision of the New South Wales Court of Appeal in Allianz Australia Insurance Limited v Estate of the Late Summer Abawi [2025] NSWCA 85 provides clarification about how skin injuries are classified under the Motor Accident Injuries Act 2017 (NSW) (MAIA). Specifically, the Court considered whether a skin laceration should be treated as a ‘threshold injury’ — a critical classification that determines a claimant’s entitlement to damages for non-economic loss and the duration of statutory benefits.

This case offers important guidance to claimants, insurers, legal practitioners, and medical assessors in interpreting section 1.6 of the MAIA, which defines threshold injuries and distinguishes them from more serious injuries that may support a broader compensation entitlement.

Background

Summer Abawi sustained injuries, including superficial lacerations to her wrist, in a motor vehicle accident on 8 December 2017. She lodged a claim under the MAIA. Allianz, the relevant insurer, determined that her injuries were threshold injuries only — meaning she was not eligible for non-economic loss damages or extended statutory benefits beyond 26 weeks.

The matter was referred to the Personal Injury Commission (PIC) for medical assessment. Assessor Home concluded that the wrist lacerations were not caused by the accident and that the other injuries were threshold injuries as defined in section 1.6 of the MAIA.

After Ms Abawi’s passing in 2021 (from unrelated causes), her estate continued the claim and successfully sought a review of the original medical certificate. A Review Panel, comprising Member Nolan and Assessors Moloney and Couch, revoked Assessor Home’s certificate and determined that the skin lacerations were indeed caused by the accident and were not threshold injuries.

Statutory framework

Section 1.6(1) of the MAIA defines a threshold injury as one or more of the following:

• a soft tissue injury, or
• a psychological or psychiatric injury that is not a recognised psychiatric illness.

Section 1.6(2) elaborates:

• 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.

The Review Panel reasoned that skin did not fall within this definition, noting that the intent of the section was to exclude musculoskeletal connective tissues rather than organs like skin. Their reasoning was as follows:

“[64] To exclude an injury to the skin because it ‘connects, supports or surrounds other structures’ is inconsistent with the meaning intended to be ascribed to this threshold provision’s phraseology…

[65] Accordingly, lacerations to the skin would not be a threshold injury.”

Supreme Court and Appeal

The insurer sought judicial review in the NSW Supreme Court, arguing that skin lacerations should be considered soft tissue injuries under the MAIA, thus meeting the definition of threshold injuries. The Supreme Court dismissed the application, holding that the exclusion of skin from the statutory definition was appropriate — as Parliament had included a detailed list that omitted reference to skin.

The insurer then sought leave to appeal. The key question before the Court of Appeal was the proper construction of section 1.6(2) — and whether skin should be classified as soft tissue.

Decision of the NSW Court of Appeal

On 2 May 2025, the Court of Appeal (Kirk JA, Adamson JA, and Stern AJA) allowed the insurer’s appeal.

In delivering judgment, Justice Kirk held that:

• The definition of soft tissue under s 1.6(2) should be interpreted textually, focusing on whether the tissue’s significant characteristic function is to “connect, support or surround” other structures or organs.
• While skin may have multiple biological roles, one of its primary physical functions is to surround the body and internal structures, making it consistent with the statutory definition of soft tissue. The same could not be said for most other ‘organs’ of the body.
• Therefore, skin injuries generally fall within the scope of soft tissue injuries — and are thus threshold injuries.

Importantly, the Court was not persuaded by broader purposive or contextual arguments. Justice Kirk found that neither the Regulations nor the Motor Accidents Guidelines should influence the construction of the statutory text.

Nerve involvement: a critical distinction

The Court did acknowledge that not all skin injuries are automatically threshold injuries. Where nerve damage is present — such as in deep lacerations, burns, or road rash — the injury may fall outside the scope of section 1.6(2).

This distinction reflects the statutory language, which expressly excludes “injury to nerves” from the threshold injury definition.

In this case, the estate contended that the matter should be remitted to determine whether the skin injury involved nerve endings. However, the Court found that Assessor Home had already determined there was no evidence of nerve injury, and the Review Panel had not disagreed. Therefore, there was no need to revisit the issue.

Implications for claimants

This decision narrows the pathway for claimants seeking damages and statutory benefits under the MAIA. By confirming that injuries to the skin — including lacerations, abrasions, and superficial wounds — are generally classified as threshold injuries, the Court has limited the scope of what may give rise to ongoing entitlements. Unless a claimant can produce evidence of deeper tissue or nerve involvement, skin injuries will typically fall below the threshold needed to access damages for pain and suffering or to obtain statutory benefits beyond the statutory period.

Claimants and their legal representatives will need to carefully consider the medical evidence when preparing a claim. Where skin injuries are the primary or only physical injuries sustained, obtaining early medical clarification about the presence or absence of nerve damage may be critical to determining whether the claim can proceed beyond the threshold limitation.

The decision in Allianz v Estate of the Late Summer Abawi affirms a textual approach to the MAIA’s definition of threshold injuries. It provides much-needed clarity about how skin injuries are to be treated, confirming they will usually be regarded as soft tissue injuries — and thus subject to the Act’s threshold limits.

While this outcome brings certainty to both claimants and insurers, it also highlights the importance of careful medical investigation and reporting, particularly where skin injuries may mask underlying nerve involvement.

Please note that this article does not constitute legal advice. If you are seeking professional advice on any legal matters, you can contact Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page and one of our lawyers will be able to assist you. If you or a loved one have been injured, use our Personal injury Claim Check now.

Disclosure and important note: This article is based on our own legal research and thinking. Some of its content has been generated with the assistance of artificial intelligence. The authors have checked and approved this article, including the AI generated content, for publication.