Barrett Burston Malting Co Pty Ltd v Kotzman
[2013] VSC 248
•15 May 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
No. S CI 2012 06241
BETWEEN
| BARRETT BURSTON MALTING CO PTY LTD | Plaintiff |
| and | |
| DR DAVID KOTZMAN, DR ANDREA BENDRUPS, MISS ELIZABETH LEWIS, ASSOCIATE PROFESSOR PETER DOHERTY AND DR DIANE NEILL (WHO COMPRISED THE MEDICAL PANEL THAT GAVE AN OPINION IN RESPONSE TO REFERENCE M111/2921) | First to Fifth Defendants |
| NIKOLA VRANJESEVIC | Sixth Defendant |
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JUDGE: | CAVANOUGH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 6 May 2013 | |
DATE OF JUDGMENT: | 15 May 2013 | |
CASE MAY BE CITED AS: | Barrett Burston Malting Co Pty Ltd v Kotzman & Ors | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 248 | |
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ADMINISTRATIVE LAW – Judicial review – Procedural fairness – Workers’ compensation – Medical panel – Novel diagnosis that could not reasonably be anticipated – Panel’s opinion quashed – Medical questions remitted for reconsideration by fresh panel – Accident Compensation Act 1985 s 68.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Fleming SC with Mr R Kumar | Wisewould Mahony |
| For the First to Fifth Defendants | No appearance | |
| For the Sixth Defendant | Mr A Keogh SC with Mr A Saunders | Shine Lawyers |
HIS HONOUR:
This is an application for judicial review under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 in relation to a certified opinion of a medical panel given under s 68 of the Accident Compensation Act 1985 (“the Act”) on 11 September 2012 in answer to certain medical questions. The plaintiff (“the employer”) is the former employer of the sixth defendant, Mr Vranjesevic (“the worker”). The first to fifth defendants comprised the medical panel. The employer contends, among other things, that it was denied procedural fairness (or natural justice) by the medical panel.
The case was initially argued before me as an opposed matter during the morning of 6 May 2013. When the hearing resumed after the luncheon adjournment, senior counsel for the worker announced that he did not seek to argue further against certain propositions relating to the employer’s procedural fairness ground that I had put to him before the adjournment, with the expected result that the opinion of the medical panel would be quashed. On the other hand, he submitted that it would be unnecessary and therefore inappropriate for the Court to base the quashing of the medical panel’s opinion on any of the other grounds relied upon by the employer. As I indicated at the time, I agree with this submission, notwithstanding that there is some overlap between the grounds relied upon by the employer. That is to say, I will not decide whether or not the employer’s other grounds (which are referred to below) are sustainable. However, I will uphold the employer’s procedural fairness ground. I will order that the panel’s opinion be quashed and that the medical question be re-determined by a differently constituted panel. I will do so for the reasons now to be explained.
On 22 October 1999 the worker lodged a claim under the Act for weekly payments of compensation and medical and like expenses, alleging (so far as presently relevant) injury to his left wrist and hand said to have occurred as a result of a fall in the course of his employment with the plaintiff on 26 September 1999. The claim was accepted and the worker commenced receiving weekly payments and medical expenses. This continued for some 12½ years.
In the years following the accident, the worker was seen by numerous medical practitioners. He was also assessed by a medical panel in March 2003 and again, by a different panel, in January 2004.
So far as relevant, the March 2003 medical panel determined that:
… the worker suffers from a left hand dysfunction as a result of a central tear of the triangular fibro cartilage with chondromalacia [sic] of the ulnar head and proximal portion of the lunate at his left wrist in the context of a chronic constitutional condition of ulnar positive variance aggravated by the direct impact injury to the wrist, relevant to the accepted left hand/arm injury. He is also suffering from an aggravation of cervical spondylosis without radiculopathy, a Chronic Pain Syndrome involving the left upper limb and the left side of the face, relevant to the accepted injuries to the left upper limb, neck, the left side of the face and Chronic Pain Syndrome. There is no abnormality of the knuckle pads and he is not suffering from Reflex Sympathetic Dystrophy.[1]
[1]Joint Court Book, 92.
So far as relevant, the January 2004 medical panel determined that:
… the worker is suffering from left hand and arm dysfunction due to a chronic pain syndrome and hand joint contractures as a result of soft tissue injuries of the left wrist and forearm, unresolved by surgery, relevant to the accepted injuries to the left hand and left arm.[2]
The Panel also conducted a psychiatric assessment and concluded that the worker is suffering from a Chronic Pain Disorder and an Adjustment Disorder, with depressed mood and anxiety, relevant to the accepted psychiatric disorder injury.
[2]Sixth Defendant’s Court Book, 12.
By a letter dated 4 April 2012 the employer’s insurer/agent (“Allianz”) notified the worker that it had decided that the worker was no longer entitled to weekly payments or medical expenses and that these would cease as from 6 May 2012. In the letter Allianz advised that its decision was based, in particular, on reports from a Dr Phillip Mutton dated 5 September 2011 and 2 April 2012 respectively and on a surveillance investigation report dated 23 February 2012. Extracts from the reports were included in the letter. The surveillance material included a video of the worker taken on 17 February 2012. Among other things, the video showed the worker removing some bags from the boot of a car and then carrying the bags in his left hand for a short distance without apparent difficulty. The surveillance report stated that the worker had also been observed driving the motor vehicle which was registered in his own name. The gist of Allianz’s reasoning was that the surveillance material indicated to Dr Mutton and to Allianz that the worker had no disability at all in his left upper limb, and therefore no work-related incapacity for work, contrary to his prior presentation.
The worker challenged the decision by means of an application to the Accident Compensation Conciliation Service. He was represented in his challenge by an organisation called WorkCover Assist, which, as I am informed by counsel, is a body funded by the Victorian Workcover Authority but which is otherwise independent and acts on behalf of workers involved in conciliation proceedings.
The worker’s challenge to Allianz’s decision became known to three of the worker’s then treating medical practitioners, namely Dr R Khoo (a general practitioner), Dr J Cooper (a psychiatrist) and Dr A Anderson (a physician). During June 2012, each produced a report in support of the worker’s challenge.
Relevantly, Dr Khoo expressed the opinion that the worker was (still) suffering from the injuries of “tear of left TFCC and subsequent complex regional pain syndrome of his left arm” and “depression and anxiety” and that these were related to the initial injury. Having apparently seen the surveillance material, Dr Khoo said that the worker “would have some hand grip capacity in his left hand and would be able to carry some low weight objects for a short period” but that this “would still not allow him a work capacity”.[3] Dr Khoo went on to conclude his report in the following way:
It is unlikely that he is able to drive with one functioning hand. The video surveillance will need to be reviewed to confirm his identity. [4]
[3]Joint Court Book, 79.
[4]Ibid, 80.
So far as relevant, Dr Cooper opined that the worker was suffering from “chronic Anxiety and Depression”; that this was caused by severe, chronic pain that had been diagnosed as “Complex Regional Pain Syndrome (CRPS)” affecting his left arm, which in turn was originally caused by the injury sustained in the fall at work in 1999.[5] Dr Cooper maintained that the “pain syndrome” underlying the worker’s “Anxiety and Depression” had persisted as a “chronic condition”[6]. He continued:
Mr Vranjesevic is not currently able to perform any work. His psychiatric condition alone precludes him from work. It is my opinion that the pain and physical restrictions caused by his left arm condition are also likely to prevent him from performing any work.[7]
Dr Cooper considered the worker’s condition to be likely to continue indefinitely.
[5]Ibid, 81.
[6]Ibid, 82.
[7]Ibid, loc.cit.
As to the surveillance material, Dr Cooper was sharply dismissive. He said:
It has been brought to my attention that this dispute arose because Mr Vranjesevic was observed to be using his left arm to remove bags from his car and this information was used to assert that he has a work capacity. This strikes me as an absurd conclusion and defies the objective elements of Mr Vranjesevic’s condition that have been apparent since I have known him.[8] These include obvious swelling, discolouration of his left arm, pain behaviours in the absence of secondary gain and obvious depression and anxiety. I also understand that it has been an integral part of his physical treatment that he be encouraged to use his left arm as much as possible to help prevent further deterioration and contractures. I have strongly encouraged Mr Vranjesevic to normalise behaviours and routines as part of countering the disabling aspects of his severe anxiety.
I feel it is also important to note the severe distress this development has caused Mr Vranjesevic. At his best, Mr Vranjesevic has fragile psychological health. These developments defy his ability to cope and push him to a point where he is at risk of aggravated anxiety and depression, suicidal behaviour and the prospect of being hospitalised needs to be considered again.[9]
[8]Dr Cooper began providing psychiatric treatment to Mr Vranjesevic in February 2001.
[9]Joint Court Book, 83.
The relevant part of the report of Dr Anderson (dated 8 June 2012[10]) stated that, as at the year 2000 when she began to treat him, the worker had a past history of forearm fracture, secondary to which he had developed “reflex sympathetic dystrophy” and that this had also resulted in significant depression and anxiety. Since then, according to the report, the worker had had “continued problems with the reflex sympathetic dystrophy, which has made the use of his left arm almost impossible, although he always tries to keep as independent as he can”. The worker had “continued problems with anxiety and depression”. Dr Anderson was of the opinion that Mr Vranjesevic was unable to work and that this was directly or indirectly related to the injury suffered at work. She then concluded her report as follows:
As such, I feel he would certainly be unable to drive and that it would be very difficult for him to do any household duties and feel that he continues to need daily living assistance.
[10]Annexed to the report of 8 June 2012 was an earlier report dated 1 February 2002 which was incorporated by reference.
Each of the medical reports to which I have referred found its way to the relevant conciliation officer of the Accident Compensation Conciliation Service. Then, pursuant to s 56(6) of the Act, the Conciliator issued a Referral to Medical Panels containing four medical questions. So far as relevant, the referral described the worker’s injuries as “break in left hand and wrist … sustained in a fall on 26/9/1999”.[11] The “Issues in dispute and reason for referral” were stated as follows:
[11]Joint Court Book, 26.
Whether Mr Vranjesevic has a current work capacity; if not, is this incapacity materially contributed to by his accepted left arm injury.
Under “Agreed facts relevant to the medical question”, the referral stated (so far as presently relevant):
I am satisfied that the following facts are agreed:
•Mr Vranjesevic’s date of birth is 20/8/1951.
•Mr Vranjesevic was employed as a maltster with Barrett Burston Malting Co from 1985.
•On 26/9/1999 Mr Vranjesevic fell and sustained injuries to his left wrist … .
•Mr Vranjesevic lodged a claim for compensation which was accepted, with weekly compensation payments commencing from 26/9/1999.
•Mr Vranjesevic was referred to the Medical Panel in 2004 for an impairment benefit assessment, where he was assessed as having a 57 percent whole person impairment.
•Allianz issued a notice on 4 April 2012 terminating weekly compensation benefits and medical and like expenses from 6 May 2012.
Under “Facts in dispute relevant to the medical question”, the referral stated:
I am satisfied that the following facts are in dispute:
•Whether Mr Vranjesevic has a current work capacity; if not, is this incapacity materially contributed to by his accepted left arm injury.
The medical questions were stated as follows:
1 What is the nature of the worker’s medical condition (including any sequelae) relevant to the claimed injury? (See Section 4 above).[12]
2 What is the extent to which any physical or mental condition resulted from, or was materially contributed to, by the injury and/or condition?
3 Is the worker capable of performing his pre-injury duties?
4 If the worker is not capable of performing his pre-injury duties, does the worker’s incapacity for work result from, or is it materially contributed to by, the (claimed) injury?
[12]Section 4 contained the above mentioned description of the relevant injury.
Accompanying the referral was a relatively small quantity of documentary material. It was later supplemented by one further document. According to the reasons later produced by the panel, the material before the panel comprised, only, the worker’s 1999 claim for compensation, the Allianz letter of 4 April 2012 (called the “Notice of Determination”), the two earlier medical panel opinions with their respective statements of reasons, the two reports of Dr Mutton, the surveillance report, the surveillance DVD and the above mentioned reports of Drs Khoo, Cooper and Anderson.
The panel was not provided with written submissions from either side, whether with the referral or otherwise. It seems that neither side produced any such submissions.
In its certificate of opinion dated 11 September 2012, the medical panel answered the four questions as follows:
Question 1)
What is the nature of the worker’s medical condition (including any sequelae) relevant to the claimed injury?
Answer:
In the panel’s opinion, the worker is suffering from persisting dysfunction of the left hand and forearm, as a consequence of a factitious disorder relevant to the claimed injury.
Question 2)
What is the extent to which any physical or mental condition resulted from, or was materially contributed to, by the injury and/or condition?
Answer:
The Panel is of the opinion that the worker’s factitious disorder is materially contributed to by the claimed injury.
Question 3)
Is the worker capable of performing his pre-injury duties?
Answer:
No.
Question 4)
If the worker is not capable of performing his pre-injury duties, does the worker’s incapacity for work result from, or is it materially contributed to by, the (claimed) injury?
Answer:
In the panel’s opinion, the worker’s incapacity for work is materially contributed to by the claimed injury.
In its statement of reasons, the panel set out the history it had obtained from the worker. It noted, among other things, that the worker had complained of being unable to use his left arm at all for any activity. The worker had said that his (dominant) left arm and hand were constantly swollen and painful, with pain and pins and needles in the whole arm, including the left shoulder, which extended across through his neck to his right shoulder.[13] The worker had told the panel that he had not driven a car since 1999 or 2000.[14] Physical examination of the fingers of the worker’s left hand had revealed a fixed flexed posture, with active resistance to finger extension.[15] The panel had viewed the surveillance DVD in the presence of the worker. After describing what was visible on the DVD, the panel said:
The Panel concluded that the actions depicted were inconsistent with the history provided by the worker of being unable to use his left hand for any activity whatsoever and were also inconsistent with his presentation on examination. When asked about this inconsistency, the worker told the panel that he was not holding the bags in his left hand, but they were resting on his left forearm as depicted earlier in the video. The panel did not accept the worker’s description of the actions depicted in the video and concluded that the actions of the worker in the surveillance DVD were inconsistent with his claimed level of disability. The panel noted the surveillance reports provided with the referral which stated that [the] worker was observed driving a car. The worker told the panel that he had not driven his car for many years and that the surveillance report was in error. The panel was unable to arrive at a conclusion as to whether the worker is able to drive a car.
[13]Joint Court Book, 36.
[14]Ibid, 37.
[15]Ibid, 38.
The panel then went on to note the findings that had been made by the two previous medical panels, including the salient findings mentioned above. The current panel noted that neither the first nor the second panel had had the opportunity of viewing any surveillance of the worker.
The current panel also conducted a mental state examination of the worker. After referring to its observations in this regard, the panel expressed the crux of its reasoning, and its conclusions, as follows:
The Panel took account of the worker’s family, developmental and injury history, the features on presentation, the variability in presentation and history, including within both the physical and the psychiatric examinations, the surveillance material, and the material provided with the referral, including the worker’s history of recurrent infections in the left forearm, requiring antibiotic treatment. Based on this information, the Panel concluded that the worker’s current psychiatric presentation is consistent with a factitious disorder, in the context of systemic framing of physical complaints and illness behaviour and secondary gain.
The Panel noted the Opinions and Reasons of the first and second previous Panels dated 27 March 2003 and 18 January 2004, where in it is concluded that the worker was suffering from an adjustment disorder with depressed mood and anxiety; and also the opinion of the worker’s treating psychiatrist that the worker is suffering from chronic anxiety and depression as well as “pain behaviours in the absence of secondary gain”. The panel considered that there is significant secondary gain and environmental reinforcement of the worker’s physical complaints and illness behaviour. The panel is also of the opinion that the worker is not now suffering from an adjustment disorder or from chronic anxiety and depression.
Taking account of the nature of the worker’s psychiatric condition, the Panel concluded that the worker is suffering from persisting dysfunction of the left hand and forearm, which is attributable to his current psychiatric condition of factitious disorder. In view of the circumstances of his presentation to the Panel, the Panel was unable to make any further determination about the nature of any persisting physical injury.
Based on the worker’s history of a soft tissue injury to the left forearm and hand, with the subsequent development of a chronic pain disorder and now features consistent with a factitious disorder, the panel concluded that the worker’s factitious disorder is materially contributed to by, and relevant to, the claimed injury.
The Panel also concluded that the severity of the worker’s current psychiatric condition is such that he is not capable of performing his pre-injury duties and that the worker’s incapacity for work is materially contributed to by the claimed injury.
The Panel noted the medical report of independent medical examiner Dr Philip Mutton dated 5 September 2011 wherein he stated that “I would therefore come to the conclusion that there has been no significant change in his condition since he was assessed by the medical panel in 2004” and his subsequent report dated 2 April 2012, after having viewed the surveillance material on 17 February 2012, wherein he stated that “there is no indication that he suffers from disability in relation to the left upper limb”.
The Panel arrived at a different conclusion, for the reasons stated above.[16]
[16]Ibid, 40-41.
The employer’s principal complaints about the approach of the medical panel revolve around its finding that the worker now had a “factitious disorder”. There had been no express reference to that concept in any of the material that had been supplied to the panel. Nor did the panel say in terms what it meant by “factitious disorder”. In the proceeding in this Court, without objection by the worker, the employer has filed an affidavit of its solicitor exhibiting several extracts from the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, 4th Edition (“DSM-IV”) and other medical definitional material relevant to the psychiatric diagnosis of “factitious disorder” and the differential diagnosis of “malingering”.
The employer goes so far as to contend that the findings of the medical panel in this case could never sustain a determination of compensable “injury” or “disease”.[17] The employer submits that, according to the DSM-IV, a diagnosis of “factitious disorder” is “characterised by physical or psychological symptoms that are intentionally produced or feigned in order to assume the sick role”, but where there are “external incentives for the behaviour (such as economic gain, avoiding legal responsibility, or improving physical well-being, as in Malingering)” for the feigned symptoms, the diagnosis is excluded.[18] The following explanation by Maldonado[19] of the difference between Factitious Disorder and Malingering is relied upon by the employer –
In the end, the main difference between factitious behaviour and malingering hinges on the motivation for symptom production. Malingerers fake their symptoms in order to obtain tangible secondary gains, while in cases of factitious disorder the main goal of the production of symptoms is to be in the sick role. That is, to derive sympathy from a caring medical professional so as to re-enact a failed object relation, or to re-establish a similar relationship in the present.
[17]Citing Comcare v Mooi (1996) 137 ALR 690.
[18]Citing the DSM-IV definitions for “Factitious Disorder” and “Malingering”, at pp 516-517 and referring also to Maldonado, “When patients deceive doctors: a Review of Factitious Disorders”, 22 American Journal of Forensic Psychiatry, Issue 2, 2002, at pp 43-4.
[19]Op.cit, at p 44.
The employer contends that a finding that a worker is malingering could not sustain a finding of compensable injury or disease. It points out that, in this matter, the panel found that the worker’s presentation involved “significant secondary gain”. The employer contends that this finding necessitated the conclusion that the worker was malingering, as opposed to suffering a psychiatric disorder, whether that of “factitious disorder” or otherwise. A medical panel could not render malingering compensable merely by, in effect, calling it a “disorder”.
The employer submits that the diagnosis of “factitious disorder” was not open in this case. It points out that the diagnostic criteria for a “factitious disorder” as set out in the DSM-IV are as follows:[20]
A. Intentional production or feigning of physical and psychological symptoms.
B. The motivation for the behaviour is to assume the sick role.
C. External incentives for the behaviour (such as economic gain, avoiding legal responsibility, or improving physical well-being, as in Malingering) are absent.
[20]At p 517.
The employer further points out that the medical panel did not refer to DSM-IV, or to any other psychiatric medical source, for the diagnostic criteria that it had regard to in coming to its conclusion of a “factitious disorder”. It says that while DSM-IV contains cautionary statements as to its use and whilst DSM-IV itself is not a statutory formulation to be construed and applied directly by the courts[21], an allegation that a person suffers from a psychiatric disorder that is referred to in DSM-IV is typically expected by Victorian courts to be established in accordance with the diagnostic criteria set out therein.[22] According to the employer, applying the diagnostic criteria in DSM-IV to the panel’s reasons in the present matter, it was not open to the panel to conclude that the worker was suffering from a “factitious disorder” because, in circumstances where the worker was found by the panel to be motivated by “significant secondary gain”, such a conclusion would be inconsistent with the DSM-IV diagnostic criteria, particularly criterion C. The employer points out that exclusionary criterion C is in substance repeated in the definitions given for “factitious disorder” in the general psychiatric medical literature.
[21]See Cavenett v Commonwealth [2007] VSCA 88 at [77]-[81].
[22]The employer cites 7 cases for this proposition of which the most recent is Paradise Enterprises Ltd v Kakavas [2010] VSC 25 at [9], [13].
In its written submissions filed in this proceeding, the employer describes the issues in the case as follows:
(a) whether the Panel fell into jurisdictional error, alternatively error of law patent on the record, in determining its opinion to the referred medical questions by concluding that the worker was suffering a “factitious disorder” in relation to the claimed injury (Questions 1 and 2), and/or that the worker’s incapacity for work was materially contributed to by the said “factitious disorder” (Question 4), notwithstanding the finding of the Panel that the worker was motivated by “significant secondary gain”;
(b) whether the Panel fell into jurisdictional error in determining its opinion to the referred medical questions by failing to take into account a relevant consideration that it was bound in law to consider, namely a written report of an investigator provided to the Panel to the effect that the worker had been observed driving a motor vehicle, which actions were denied by the worker to the Panel;
(c) whether the Panel failed to accord the plaintiff procedural fairness in determining its opinion to the referred medical questions by failing to give it a reasonable opportunity to obtain expert psychiatric opinion or make written submissions to the Panel in connection with its conclusion that the worker was suffering from a psychiatric condition described by the panel as “factitious disorder” notwithstanding its finding that the worker was motivated by “significant secondary gain”, which conclusion as to diagnosis, adverse to the plaintiff, could not reasonably have been anticipated;
(d) whether the Panel failed to give an adequate statement of reasons sufficient to comply with s.68(2) of the Act.
As indicated already, and for reasons to be further explained, I propose to uphold this application for judicial review on the employer’s procedural fairness ground, which is encapsulated in paragraph (c) above, without determining the sustainability of the other grounds. On the other hand, as I have also mentioned, there are obviously elements of overlap between the procedural fairness ground and the other grounds of review raised by the employer.
Relevant statutory provisions
The provisions of the Act bearing on the procedures and obligations of medical panels have been set out and discussed in many previous decisions of this Court.[23] It is unnecessary to set them out again.
[23]See, eg, Moyston Court Fisheries Ltd v Malios [2007] VSC 518.
I turn to the provisions of the Act relating to entitlements to statutory benefits. As the employer points out in its written submissions, s 82(1) of the Act provides that, generally, there is entitlement to compensation in accordance with the Act if a worker has sustained an injury arising out of or in the course of his or her employment. Section 5 of the Act contains relevant definitions, including “injury”.[24] So far as relevant, “injury” is defined to mean “any physical or mental injury and without limiting the generality of the foregoing includes … a disease contracted by a worker in the course of the worker’s employment … and to which the employment was a significant contributing factor” and “the recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing injury or disease where the worker’s employment was a significant contributing factor to that recurrence, aggravation, acceleration, exacerbation or deterioration”.
[24]As the employer points out, the relevant form of the definition of “injury” is as enacted prior to the commencement of s 3 of the Accident Compensation and Transport Accident (Amendment) Act 2003.
There is also a definition of “disease” in s 5 of the Act, as follows:
Disease includes
(a) any physical or mental ailment, disorder, defect or morbid condition whether of sudden or gradual development; and
(b) the aggravation, acceleration, exacerbation or recurrence of any pre-existing disease;
Section 93 of the Act provides for compensation in the form of weekly payments if a worker’s incapacity for work results from, or is materially contributed to by, an injury which entitles the worker to compensation. Section 114 of the Act provides for the termination of weekly payments, setting out, inter alia, the permissible grounds for termination, and notice requirements.
Legal principles: procedural fairness
There is no dispute between the parties as to the content of the administrative law principles relating to procedural fairness or natural justice, either generally or in their application to medical panels. Adopting, largely, the terms of the written submissions of the employer, I would make the following observations about those principles.
A medical panel convened to form its opinion as to medical questions referred to under the Act is bound to observe the rules of natural justice in favour of persons whose rights are liable to be affected by the discharge of that function.[25] Failure to sufficiently accord an affected party procedural fairness or natural justice contaminates the medical panel opinion with illegality such that it is liable to be quashed upon judicial review. Examples of a medical panel’s opinion being quashed upon judicial review for failure to observe “the hearing rule” of procedural fairness may be found in Calleja v Franet Pty Ltd[26] and Weerappah v Nisselle[27]. The leading Australian case concerning the content of the hearing rule generally is Kioa v West[28].
[25]Masters v McCubbery [1996] 1 VR 635.
[26][1999] VSC 202.
[27][1999] VSC 249.
[28](1985) 159 CLR 550.
A medical panel is obliged to accord the protection of the “hearing rule” of procedural fairness to the employer/insurer party, not merely to the worker party: see, eg, Weerappah[29] where Smith J said:
While much of the foregoing discussion is centred on the position of the worker, it must be borne in mind that there is always another party to these disputes and it too can be disadvantaged if the panel does not accord natural justice. For example, in the course of a medical examination, the worker may reveal information of which the insurer is unaware and which may, if accepted, entitle the worker to the compensation it [sic] had been denied. It would be a denial of natural justice for the insurer not to have an opportunity to address that information before the Panel reached its decision.
[29][1999] VSC 249 at [50].
A medical panel can also breach the hearing rule in relying upon its own medical expertise to form an opinion – say, as to diagnosis, or, say, as to an aspect of disability previously unnoticed by other medical examiners – such that it could be said that a party did not have a fair opportunity to have that proposed adverse conclusion explored with its own experts. In such a situation, the aggrieved party has been denied a fair opportunity to be “heard” (for instance, through submitting its own medical reports or written submissions) on the issue. Calleja v Franet Pty Ltd is an example of the Supreme Court giving relief in such an instance.
In Vegco Pty Ltd v Gibbons[30] Kyrou J said:
A Medical Panel is bound to observe the rules of natural justice in favour of persons whose rights are liable to be affected by its opinions on medical questions. The Medical Panel may breach the rules of natural justice where it relies on new information provided to it by the worker during the examination by the Medical Panel, a new medical report, evidence that has not been seen previously by the worker and a matter within the panel’s own expertise and does not prior to reaching the final opinion, provide the substance of this new information, evidence or matter to the parties affected by its opinion and give them a reasonable opportunity to address it. (citations omitted).
[30][2008] VSC 363 at [23].
In Commissioner for ACT Revenue v Alphaone[31], a Full Court, comprising Northrop, Myles and French JJ, said:
Where the exercise of a statutory power attracts the requirement for procedural fairness, the person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question.
[31](1994) 49 FCR 576.
More recently, in SZBEL v Minister for Immigration & Multicultural & Indigenous Affairs[32] the High Court referred with apparent approval to the passage from the Alphaone decision set out above. The High Court continued:[33]
In Alphaone the Full Court rightly said:
It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material.
[32](2006) 228 CLR 152, especially at [29]ff.
[33]At [32].
Procedural fairness: factitious disorder: employer’s written submissions
In its written submissions the employer expressed its complaint about denial of procedural fairness in relation to the panel’s “factitious disorder” finding in the following way.[34] There was no medical opinion provided to the medical panel which identified or suggested a diagnosis of a “factitious disorder”. Whilst it could have been reasonably anticipated that the medical panel might find that the worker no longer suffered from any physical condition[35], it could not have reasonably anticipated that the panel would find that any persisting dysfunction of the worker’s left hand and forearm would be as a consequence of a “factitious disorder”. Such a diagnosis was unexpected in circumstances where previous psychiatric diagnoses had been made only of “adjustment disorder with depressed mood” and “anxiety and depression”.[36] (Those previous psychiatric diagnoses were rejected by the panel.) But worse, the employer submits, the panel’s conclusion of a “factitious disorder”, notwithstanding its finding that the worker was motivated by significant secondary gain, involved an approach to the diagnosis of the psychiatric disorder known as “factitious disorder” which was, on the face of it, inconsistent with the diagnostic criteria for that disorder in the DSM-IV, and in analogous criteria in the general psychiatric medical literature. The panel’s approach to whether or not a “factitious disorder” existed could not have been reasonably anticipated. If the panel had given fair notice of its unconventional approach to the diagnosis of a “factitious disorder”, the plaintiff and its legal advisers would, at minimum, have sought to be heard in relation to the correct diagnostic criteria for a “factitious disorder” under the DSM-IV and in general psychiatric medicine.
[34]Joint Court Book, 204-205.
[35]By way of example, the employer noted that, following a review of the surveillance footage, Dr Mutton reported on 2 April 2012 that “there is no indication that he suffers from disability in relation to the left upper limb” and that “he has normal use of the left upper limb”.
[36]Here the employer refers to the above mentioned reports of Dr Khoo, Dr Cooper and Dr Anderson and to the 2003 medical panel report which diagnosed, among other things, “an adjustment disorder with depressed mood”.
Accordingly, the employer argued, the employer was denied a fair opportunity to make submissions to the medical panel, and to submit further expert medical opinion, as to the legal and medical appropriateness of the conclusion reached by the panel that the worker was suffering from a “factitious disorder”.
Procedural fairness: factitious disorder: worker’s written submissions
In their written outline of submissions,[37] counsel for the worker contended that the medical panel had not denied the employer procedural fairness. They submitted that a diagnosis of “factitious disorder” was both open and reasonably to be anticipated.
[37]Dated 22 April 2013.
It was submitted that, under DSM-IV, there could be a diagnosis of “factitious disorder” even where external incentives were present; and that, in any event, it was wrong to read the diagnostic criteria in the DSM-IV strictly.[38] Counsel contended that it was sufficient if the primary motivation for the behaviour was to assume the sick role or if there were, otherwise, sufficient symptoms and signs.[39]
[38]Sixth defendant’s court book, 25.
[39]Ibid, 27.
According to the outline, it was clear that the medical panel had concluded that, “whilst the worker was also motivated by secondary gain, the predominant motivation was the adoption of the sick role”.[40] Further or alternatively, it was submitted, the medical panel had identified in the worker sufficient symptoms and signs of a “factitious disorder” as described in DSM-IV and in the other psychiatric literature which had been referred to by the employer.
[40]Ibid.
It was also submitted that in Calleja v Franet Pty Ltd[41] the medical panel had assigned an entirely novel, non-work related cause (namely, menopause) to the mental symptoms that had been exhibited in that case by the worker; and that Calleja could thus be distinguished. It was said that, by contrast, the previous psychiatric diagnoses in the present case included not only the ones referred to in the employer’s written submissions (“adjustment disorder with depressed mood” and “anxiety and depression”) but also “chronic pain syndrome” and “a Chronic Pain Disorder”, the two latter diagnoses having been mentioned in the 2003 and 2004 medical panel opinions, respectively. It was pointed out that “Pain Disorder” is a DSM-IV diagnosis. It was submitted that a differential diagnosis for that disorder is “Factitious Disorder”.
[41][1999] VSC 202.
Further, it was submitted, Dr Mutton (on whose opinion the decision to terminate the worker’s entitlements was partly based) had expressed the view that the worker was exhibiting “significant abnormal illness behaviour”. He had also said that he had “some issues with forming an accurate diagnosis” (presumably at least partly as a consequence). Thus, it was submitted, the employer was (or should have been) well aware that the worker’s symptoms were – or may have been – at least partially psychogenic in nature (and that the panel itself may have concluded accordingly). Therefore, it was submitted, the employer had had ample opportunity to obtain a psychiatric opinion and/or make submissions to the panel as it saw fit.
The parties’ positions at the hearing: a point of clarification
At the hearing, counsel for the employer presented oral submissions that, in substance, did not relevantly depart from their written submissions.
By contrast, counsel for the worker made a submission that, I think, represented a departure from their written submissions. Paragraph 15 of those submissions, which I have already quoted in part, read as follows:
It is clear from the Panel’s reasons that it carefully considered the worker’s motivation in producing symptoms and concluded that, whilst the worker was also motivated by secondary gain, the predominant motivation was the adoption of the sick role.
Prima facie, the reference to “secondary gain” in that paragraph seems to involve two concessions: first, that there was an obvious objective “external incentive” (within the meaning of DSM-IV) for the worker to intentionally produce or feign physical or psychological symptoms, namely the incentive of keeping or regaining entitlements by way of weekly payments of compensation; and second, that the medical panel itself had actually found that the worker had indeed intentionally produced or feigned physical or psychological symptoms for the very purpose (at least in part) of keeping or regaining such entitlements. That was obviously the basis on which the previously filed written submissions of the employer had proceeded, and the worker’s written submissions had not expressly disputed the point.
Nevertheless, during his oral submissions, senior counsel for the worker contended that, by “secondary gain”, both the panel (which had used that expression 3 times) and counsel themselves (in their own written submissions) should be taken to have been referring only to internal psychological gain on the part of the worker, not external, pecuniary gain. I expressed some surprise about this submission when it was made and the matter was then discussed at some length before the luncheon adjournment. It may be that counsel’s general change of stance after the adjournment should be taken to include a withdrawal of the submission, although it was not expressly withdrawn. In any event, I should make it clear that, in my view, when the medical panel referred to “secondary gain” and “significant secondary gain” in the passages from its reasons which are set out above, the panel was plainly not referring to internal psychological gain but rather was referring to pecuniary gain. If that were not otherwise obvious, it was made utterly clear by the panel’s express disagreement with the worker’s treating psychiatrist, Dr Cooper, when he had opined that objective elements of the worker’s condition included pain behaviours “in the absence of secondary gain”. In other words, I am satisfied that the employer’s written and oral submissions proceeded on a correct interpretation of the panel’s reasons and that the worker’s (initial) oral submissions did not.
Procedural fairness: factitious disorder: resolution of the issue
I agree with the employer’s submission that the medical panel’s psychiatric diagnosis – that the worker was suffering from a “factitious disorder” – was unexpected and could not reasonably have been anticipated; and that the employer was denied a fair opportunity to address the matter.[42] In my view, the panel’s psychiatric diagnosis of a “factitious disorder” in its opinion and reasons came “out of the blue”.
[42]For a similar conclusion in a comparable case, see Australian Postal Corporation v Kember [2003] FCA 800 (Finn J), esp at [25].
It is true that the 2004 medical panel had made a psychiatric diagnosis of “Chronic Pain Disorder”. However, the contention contained in the worker’s written outline to the effect that a “differential diagnosis” for that disorder is “Factitious Disorder” does little, if anything, to assist his position. I accept that in DSM-IV there is a reference to “Factitious Disorder” (together with a reference to “Malingering”) under the heading “Differential Diagnosis” within the subsection entitled “Pain Disorder” of DSM-IV under the larger heading “Somatoform Disorders”. However, reading the relevant paragraphs in their context, they indicate that “Factitious Disorder” and “Pain Disorder” are by no means closely related. Rather, they are very distant from each other. Crucially, a Pain Disorder does not involve the “intentional production or feigning of physical or psychological symptoms” whereas a “Factitious Disorder” does.
As mentioned above, the expression “factitious disorder” did not appear in any document that went to the medical panel. Moreover, the suggestion in the worker’s written submissions that, by virtue of Dr Mutton’s report and the terms of the psychiatric literature, the employer should have anticipated that the medical panel might arrive at a diagnosis of “factitious disorder”, is rendered entirely artificial and unpersuasive when one remembers that Allianz’s notice of determination, including its references to Dr Mutton’s reports and to the surveillance material, were referred to the worker’s 3 treating doctors, Dr Khoo, Dr Cooper and Dr Anderson, and that not one of those doctors suggested for a moment in their responsive medical reports that the true diagnosis for Mr Vranjesevic was, or might include, a diagnosis of factitious disorder. Indeed, their reports were quite inconsistent with any suggestion that Mr Vranjesevic was suffering from a factitious disorder.
Further, as the employer submits, it was all the more surprising that the medical panel arrived at a diagnosis of factitious disorder without mentioning DSM-IV or any other psychiatric literature; and, moreover, that it did so notwithstanding that the panel considered that there was “significant secondary gain and environmental reinforcement of the worker’s physical complaints and illness behaviour”. I disagree with the contention in the worker’s written submissions to the effect that the panel made it clear that the worker’s “primary” motivation was to adopt the sick role and that any element of secondary gain was merely incidental. That is a very doubtful interpretation of the panel’s reasons, at best. These unfortunate circumstances serve to illustrate the inherent wisdom and the importance of the rules of natural justice or procedural fairness.[43] The quality of the medical panel’s decision and the clarity of its explanation of its reasons could only have been improved by affording the employer an opportunity to comment on the novel proposition that the worker was suffering from a factitious disorder. Such an opportunity was all the more necessary because there may be a question as to whether any entitlement to statutory benefits under the Act can properly arise from or through a factitious disorder. I asked senior counsel for the worker whether, to his knowledge, there had ever been an award of common law damages or statutory benefits to a person based exclusively, or critically, on a factitious disorder. Senior counsel replied, with some justification, that the employer’s submissions did not directly assert that there could be no liability for a factitious disorder (properly so called) and that, therefore, he had not come prepared to deal with my question. I then referred senior counsel to Bakovic v Rosebridge Nominees Pty Ltd[44], a decision of the Full Court of the Supreme Court of Western Australia given in 1999, which might be said to raise a question as to whether a “factitious disorder” could ever be a foundation for an award of common law damages.[45] Counsel for the worker said no more about this topic when the hearing before me resumed after the luncheon adjournment. I stress that I have formed no definite, or even provisional, views as to whether a worker might be entitled to statutory benefits if he were properly found to be suffering from a factitious disorder as defined in DSM-IV or if his or her presentation were partly motivated (whether primarily or incidentally or otherwise) by secondary (pecuniary) gain. On the other hand, towards the end of the hearing before me, it seemed to become almost common ground that it would be desirable for both sides to have an opportunity to research and consider these and other issues and then to make such submissions as they may be advised about all of the issues arising from the referred medical questions, and to do so to a differently constituted medical panel. I would agree. Given the medical panel’s rejection of the truth of some of the worker’s critical statements to it, I think it would seem considerably fairer to both parties if there was to be a full reconsideration of the medical questions by a fresh panel.[46]
[43]See John v Rees [1970] Ch 345, 402; Re Refugee Review Tribunal; ex parte Aala (2000) 204 CLR 82, 117 [81].
[44][1999] WASCA 78 (25 June 1999). Compare Australian Postal Corporation v Kember [2003] FCA 800 (Finn J); Re Ismail and Australian Postal Corporation [2001] AATA 647, esp at [55] (reading “factional” as “factitious”).
[45]See especially per Ipp J (with whom Steytler J agreed) [1999] WASCA 78 [12]-[17], [30]-[34] and per Owen J at [36].
[46]See Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39, 42-43; Kapoor v Monash University (2001) 4 VR 483, 499 [51]; Martin v Fasham Johnson [2008] VSC 289, [54]; cf Davidson v Fish [2008] VSC 32 [14]-[21].
Conclusion and orders
For these reasons, the employer’s application for review succeeds on the ground of procedural fairness (paragraph 11 of the originating motion). It is unnecessary and it would be inappropriate to make rulings on the other grounds of review relied upon.
The Court will order that
(a)there be an order in the nature of certiorari to quash the opinion of the Medical Panel comprised by the first, second, third, fourth and fifth defendants certified in writing dated 11 September 2012.
(b)there be an order in the nature of mandamus remitting the medical questions in respect of which the certified opinion was given to a differently constituted panel to be reconsidered in accordance with law.
(c)the sixth defendant pay the costs of the plaintiff.
I am satisfied that the Court has power to grant an indemnity certificate under s 4(1) of the Appeals Costs Act 1998 in respect of the costs payable by the sixth defendant in relation to this proceeding notwithstanding that it is not an “appeal” strictly so called but rather a proceeding within the Court’s original jurisdiction governed by Order 56 of the Supreme Court (General Civil Procedure) Rules.[47] I am further satisfied that this is an appropriate case in which to grant such a certificate. The grant of the certificate will be recorded in “Other Matters” in the authenticated order of the Court.
[47]Gatto v Felstead [2012] 14 [32] (footnote 10 and cases there cited).
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