Capel Sound v Sim
[2025] VSC 485
•13 August 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2024 05863
BETWEEN:
| CAPEL SOUND FORESHORES COMMITTEE OF MANAGEMENT | Plaintiff |
| v | |
| EMERITUS PROFESSOR MALCOLM SIM & ORS (according to the attached schedule) | Defendants |
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JUDGE: | Barrett AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 31 July 2025 |
DATE OF JUDGMENT: | 13 August 2025 |
CASE MAY BE CITED AS: | Capel Sound v Sim & Ors |
MEDIUM NEUTRAL CITATION: | [2025] VSC 485 |
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ADMINISTRATIVE LAW – Judicial review – Medical panel – Determination of ‘significant injury’ by panel under Part VBA of the Wrongs Act 1958 (Vic) – Whether panel erred in combining assessments under different methods in the AMA Guides – Whether panel was precluded under the AMA Guides from combining peripheral nerve assessment of one impairment under s 3.2k, with manual muscle testing assessment of another impairment under s 3.2d – Whether medical panel’s decision in accordance with the AMA Guides – Whether jurisdictional error of a medical panel – Appeal dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr Paul Czarnota | Hall & Wilcox |
| For the First and Second Defendant | No appearance | No appearance |
| For the Third Defendant | Mr Peter Haddad | Slater & Gordon |
TABLE OF CONTENTS
Introduction
Principles
What Does the AMA Guides Require?
The Panel’s Decision and Reasons
Submissions
Consideration
HIS HONOUR:
Introduction
The third defendant alleges he slipped and fell on a slimy boat ramp in Tootgarook in 2019, suffering injuries to his knee including a quadriceps tendon tear, stiffness, pain and sensory loss and scarring. He seeks to recover damages, including for non-economic loss, from Capel Sound Foreshores Committee of Management (‘the plaintiff’) for those injuries. In order to recover damages for pain and suffering, the third defendant must establish that he has suffered a ‘significant injury’ as that term is defined in Part VBA of the Wrongs Act 1958 (Vic) (‘Wrongs Act’).[1] The Wrongs Act provides a procedure for the determination of whether an individual has suffered such an injury, including referral to a medical panel.
[1]The relevant threshold is a whole body impairment of more than a 5%.
Initially, an Orthopaedic Surgeon (Dr Mills) certified that the third defendant’s degree of impairment satisfied the ‘significant injury’ threshold. This certificate was served by the third defendant’s solicitors on the plaintiff in accordance with s 28LT(2) of the Wrongs Act. The plaintiff subsequently referred the medical question (whether the third defendant had suffered a significant injury) to a medical panel, pursuant to s 28LZG(2)(a) of the Wrongs Act. The Medical Panel (‘the Panel’), comprising the first and second defendants, examined the third defendant and determined that he had suffered a ‘significant injury.’
The plaintiff seeks orders quashing the decision of the Panel and referring the question to a differently constituted panel. The plaintiff essentially submits that the Panel committed a jurisdictional error by impermissibly combining impairment for muscle weakness (Manual Muscle Testing) with Peripheral Nerve Injuries, contrary to the mandatory directions and instructions of the fourth edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment (‘the AMA Guides’).[2]
[2]American Medical Association, Guides to the Evaluation of Permanent Impairment (American Medical Association, 4th ed, 1995) (‘the AMA Guides’).
The Panel members did not appear, but reserved their right to make submissions as to costs, if necessary.
Principles
The Wrongs Act requires the Panel to identify and assess impairment in respect of all potentially compensable injuries; assess impairment from the claimed injuries and sequelae/consequences; and assess impairment according to the AMA Guides.[3] That means the Panel ‘must apply methodologies, processes and criteria set out in the AMA Guides for the relevant body condition, body part or system and adhere to any minimum or maximum values set out in the AMA Guides for that condition, body part or system’. Further, ‘once a particular methodology or table has been selected, its requirements, including limitations, must be applied in the manner set out in the guide.’[4] The interpretation of the AMA Guides is a matter of law, but the determination of the level of impairment, and whether there are one or two impairments, are questions of fact.[5]
[3]Wrongs Act 1958 (Vic) s 24LH(1)(a)(i).
[4]Saddingtonv Kotzman [2013] VSC 196, [28]–[29]; Vicinity Centres Pty Ltd v Arik [2023] VSCA 295, [4] (‘Vicinity Centres v Arik’).
[5]HJ Heinz Co Australia v Kotzman [2009] VSC 311, [24]; Gamble v Emerald Hill Electrical Pty Ltd (2012) 38 VR 45 (‘Gamble v Emerald Hill Electrical’). See also Vicinity Centres v Arik (n 4).
In order to demonstrate jurisdictional error, the plaintiff must demonstrate that the Panel’s assessment ‘departed from the methodology laid down by the AMA Guides to such an extent that it can be properly said of the assessment that it was not “in accordance with” the Guides.’[6] Further, where the Panel states it has carried out the assessment in accordance with the AMA Guides, ‘there will be a “heavy onus” on the challenging party to persuade a court that this statement should not be taken at face value.’[7]
[6]Vicinity Centres v Arik (n 4) [59], citing Gamble v Emerald Hill Electrical (n 5) 61 [53]–[54].
[7]Ibid.
For an error to constitute a jurisdictional error, it must be material in the sense that there is a realistic possibility that the decision that was made could have been different if the error had not occurred.[8] The threshold is not demanding or onerous and is satisfied if there is a realistic possibility as opposed to a fanciful or improbable one.[9]
[8]LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2024) 280 CLR 321, 327 [7].
[9]Ibid 328 [14].
What Does the AMA Guides Require?
The AMA Guides ‘provides a standard framework and method of analysis through which physicians can evaluate, report on, and communicate information about the impairments of any human organ system.’[10] Impairment is defined as ‘an alteration to an individual’s health status’ and ‘is assessed by medical means and is a medical issue.’[11] It ‘closely parallels that of the World Health Organisation (WHO), which has defined an impairment as “any loss or abnormality of psychological, physiological, or anatomical structure or function.”’[12] An impairment percentage assessed in accordance with the AMA Guides is intended ‘to represent an informed estimate of the degree to which an individual’s capacity to carry out daily activities has been diminished.’[13]
[10]The AMA Guides (n 2) 1 – 6.
[11]Ibid 1, s 1.1.
[12]Ibid.
[13]Ibid.
Section 3.2 of the AMA Guides describes the assessment requirements for lower limb injuries. The introduction of that section describes in broad terms the methods available to assess impairment as follows:
Anatomic, diagnostic, and functional methods are used in evaluating permanent impairments of the lower extremity. While some impairments may be evaluated appropriately by determining the range of motion of the extremity, others are better evaluated by the use of diagnostic categories or according to test criteria.
In general, only one evaluation method should be used to evaluate specific impairment. In some instances, however, as with the example on p. 77, a combination of two or three methods may be required.[14]
The introduction further specifies:
If the patient has several impairments of the same lower extremity part, such as the leg, or impairments of different parts, such as the ankle and a toe, the whole-person estimates for the impairments are combined (Combined Values Chart, p. 322).[15]
[14]Ibid 75, s 3.2 (emphasis added). The example on p 77 referred to in the preceding paragraph is where there is impairment to the ankle; and the toes, each of which were separate impairments that could be combined. See, Vicinity Centres v Arik (n 4) [33]–[35].
[15]The AMA Guides (n 2) 75, s 3.2 (emphasis in original).
This is consistent with the Rules for Evaluations in chapter 2.2 of the AMA Guides which provides:
If the physician believes that the patient has two significant, unrelated conditions and the extent of each should be estimated, this may be done. The whole-person impairment estimates for the two separate conditions then would be combined into an overall impairment estimate using the Combined Values Chart.[16]
[16]Ibid 8, section 2.2.
Section 3.2c of the AMA Guides is entitled ‘Muscle Atrophy (Unilateral).’ It provides:
Diminished muscle function should[17] be estimated under only one[18] of several parts of this chapter, relating to gait derangement (p. 75), muscle atrophy (p. 76), manual muscle testing (p. 76), or[19] peripheral nerve injury.
The evaluating physician should determine which method and approach best applies to the patient’s impairment and use the most objective method that applies.[20]
[17]Ibid 76, section 3.2c (emphasis added).
[18]Ibid (emphasis in original).
[19]Ibid (emphasis added).
[20]Ibid (emphasis added).
Section 3.2d, entitled ‘Manual Muscle Testing’, provides for manual muscle testing to be assessed in accordance with Tables 38 and 39. Table 38 describes six grades of muscle function. Table 39 allocates whole person impairment (as well as lower extremity impairment) percentages to various grades of muscle function. So, for example, grade 4 knee flexion impairment is characterised as a 12% lower extremity impairment and a 5% whole body impairment.
Section 3.2k of the AMA Guides is entitled ‘Peripheral Nerve Injuries.’ It provides:
Peripheral nerve injuries are divided into three components: motor deficits, sensory deficits and dysesthesia or disordered sensation. … All estimates listed in Table 68 (p. 89) are for complete motor or sensory loss for the named peripheral nerves. Motor, sensory and dysesthesia estimates should be combined.[21] …
Estimates for peripheral nerve impairments may be combined with those for other types of lower extremity impairments, except those for muscle weakness and atrophy, using the Combined Values Chart (p. 322).[22]
[21]Ibid 88, section 3.2k (emphasis in original).
[22]Ibid (emphasis added).
The Panel’s Decision and Reasons
The Panel found that based on the ‘clinical history, physical examination findings and the imaging reports’ the third defendant suffers from ‘continuing pain, weakness dysfunction of the right knee following a ruptured quadriceps tendon, surgically treated.’[23] The Panel also took note that there was no significant change in the third defendant’s right knee injury in the last 12 months, and no plans for further surgery. The Panel concluded that his condition was stable.[24]
[23]The Medical Panel, Reasons for Determination Re: Mr Thomas Sanza (Medical Report, 2 September 2024) 5 (‘Reasons for Determination’).
[24]Ibid.
The Panel’s determination was accompanied by reasons which included the following:
The Panel conducted an impairment assessment of the claimant in accordance with the AMA Guides to the Evaluation of Permanent Impairment (4th Edition) (’the Guides’) as required by Section 28LH of the Wrongs Act 1958 (‘the Act’). The Panel used a goniometer to measure active ranges of motion in accordance with the instructions in the Guides.
The Panel assessed impairment of the right knee in accordance with the Specific Procedures and Directions in Section 3.2 of the Guides.
The Panel considered that the Range of Motion in Section 3.2e, Manual Muscle Testing in Section 3.2d, Arthritis in Section 3.2g and Peripheral Nerve Injuries in Section 3.2k were the most appropriate methods to assess impairment of the right knee.
The Panel considered that the Range of Motion, Manual Muscle Testing and Arthritis methods were assessing the same impairment in the right knee and therefore only one could be used to assess impairment of the right knee. The Panel considered that the Manual Muscle Testing method was the most appropriate of the three methods to use for the claimant’s knee condition. The Panel also considered that the Peripheral Nerve Injuries method (based on dysaesthesia) was assessing a different impairment from the Manual Muscle Testing method and therefore the impairment based on these two methods could be combined.
The Panel assessed the appropriate whole person impairment due to Manual Muscle Testing for extension of the right knee pursuant to Table 39 of Section 3.2d.
The Panel assessed the appropriate whole person impairment due to Peripheral Nerve Injuries of the right knee pursuant to dysaesthesia in Table 68 of Section 3.2k.
The Panel considered it was unnecessary to determine whether there was any additional impairment when assessed in accordance with the Guides in order to answer the medical question.
In making an assessment of physical impairment, the Panel took into account the claimant’s history and referral material to determine the level of impairment that may have been present prior to or occurred following the incident which the Panel considers is from pre-existing or subsequent unrelated causes or injuries and which the Panel ought to disregard in accordance with Section 28LL(3) of the Act, as impairment from unrelated causes or injuries.
To evaluate the extent to which there is impairment from an unrelated injury or cause which is playing a part in the claimant’s current impairment, the Panel gave consideration to the Supreme Court judgements of Alcoa Holdings Limited & Anor v Peter Lowthian & Ors and John de Haas [June 2011], and Dr K S Chua v Dr Peter Lowthian & Ors [September 2011]. The Panel understands that, in performing the task of assessing any pre-existing impairment, the Panel must have an evidentiary basis on which it can be positively satisfied of pre-existing impairment which is to be disregarded.
The Panel considered and accepted the claimant’s history that he had not previously suffered any injury to, or any significant medical condition of, his right knee and concluded that there is no impairment that should be disregarded pursuant to Section 28LL(3) of the Act.
The Panel combined the whole person impairments attributable to the physical injury to the right knee using the combined values chart in the Guides and concluded that the degree of whole person impairment resulting from the physical injury to the claimant alleged in the claim is permanent and is more than 5% and it therefore does satisfy the threshold level prescribed by Section 28LB of the Act as amended.
The Panel considers that it has assessed impairment arising from the claimant’s physical injury alleged in the claim in accordance with the Guides and considers that further explanation or detailed reasons of the basis on which it has calculated impairment is prohibited by Section 28LZG(4) of the Act.
The Panel further considers that it is not required to make a finding in relation to the issue of whether or not the claimant’s current physical condition which he attributes to the injury alleged in the claim was caused by the circumstances of the incident as alleged, that gave rise to the claim, but the Panel has assessed the impairment arising from the injury to the claimant that is potentially compensable.[25]
[25]Reasons for Determination (n 23) 5–6 (emphasis added).
Submissions
The plaintiff submits that the error of the Panel in this case was in combining an estimate for peripheral nerve impairments with estimates for muscle weakness and atrophy using the Combined Values Chart which, it submits, is contrary to the terms of section 3.2k. The plaintiff also submits that the materiality requirement is met, having regard to the fact that neither of the assessments of muscle weakness or peripheral nerve impairments are greater than 5% so if either is excluded, then the overall assessment will not be greater than 5%, and therefore will not meet the ‘serious injury’ threshold.
The third defendant submits that the Panel was clear that:
(a)it made its decision in accordance with the AMA Guides; and
(b)it combined the assessments under ss 3.2d and 3.2k because it formed the conclusion that there were two different impairments. That approach is consistent with the words at the commencement of s 3.2, and the decision in Vicinity Centres v Arik, that estimates for separate impairments may be combined.
Consideration
It is important to be clear about what conclusion the panel reached as to the distinct nature of the impairments they assessed. As noted above, the AMA Guides at 3.2 states ‘[i]n general, only one evaluation method should be used to evaluate a specific impairment. In some instances, however, as with the example on p 77, a combination of two or three methods may be required.’ The example provided in the AMA Guides is:
A 45-year-old woman sustained a fractured tibia in a crash. Months after the injury, when the residua were stable, she had lost half of the ankle flexion and extension motion, and she had severe, permanent stiffness of all toes.
Impairment: The woman’s whole-person impairments were estimated to be moderate (6%) in terms of ankle motion (Table 42 …) and severe (2%) (Table 45 …) in terms of toe impairment. The two impairments are combined by means of the Combined Values Chart (p. 322). The whole-person impairment was 8%.[26]
[26]The AMA Guides (n 2) 77–8 (emphasis in original).
The example treats the ankle and toe impairments as two distinct impairments, not one, despite the fact they arose from the same incident. The prohibition on combining assessments only applies in relation to ‘a specific impairment’, but if the conclusion is reached, as apparently it was in the example, that there are two distinct impairments, then the prohibition will not apply, and the assessments of each may be combined. That is consistent with the general statement in s 2.2 of the AMA Guides that impairments related to ‘two significant unrelated conditions’ should be combined. It is also consistent with the statement in s 3.2 of the AMA Guides that:
If the patient has several impairments of the same lower extremity part, such as the leg, or impairments of different parts, such as the ankle and a toe, the whole-person estimates for the impairments are combined (Combined Values Chart, p. 322).[27]
[27]The AMA Guides (n 2) 75. The example on p 77 referred to in the preceding paragraph is where there is impairment to the ankle; and the toes, each of which were separate impairments that could be combined.
Notably, this latter statement accommodates the situation where the separate impairments are in different parts (the ankle and the toe) and also where the separate impairments are in the ‘same lower extremity part.’
The Court of Appeal in Vicinity Centres v Arik held that:
Once more than one impairment is identified, then we would agree with the judge that the language is clear, unambiguous and intelligible. It is necessary to combine the various whole person impairments, using the combined values chart at the end of the Guides.[28]
[28]Vicinity Centres v Arik (n 4) [35].
In this case, it is apparent that the Panel formed the view that the impairment assessed by the Muscle Testing Method on the one hand, and the impairment assessed by Peripheral Nerve Injuries method on the other, were two different and unrelated impairments.[29] So much is clear from their statement that:
The Panel also considered that the Peripheral Nerve Injuries method (based on dysaesthesia) was assessing a different impairment from the Manual Muscle Testing method and therefore the impairment based on these two methods could be combined.[30]
[29]This is consistent with the report of the orthopaedic surgeon who initially examined the third defendant and reported a ‘quadriceps tendon tear’ and also ‘saphenous nerve sensory loss.’
[30]Reasons for Determination (n 23) 5 (emphasis added).
That conclusion was made in conjunction with the statement that the Panel made its decision in accordance with the AMA Guides, with an implicit recognition that there are limitations on combining assessments in relation to the same impairment. The plaintiff did not submit that the Panel erred in concluding that the impairments it assessed were separate impairments, which is a question of fact.
The plaintiff submitted that s 3.2k prohibits combined assessments of lower limb impairments irrespective of whether or not they are assessments of the same impairment. I do not agree that the language of chapter 3 of the AMA Guides should be interpreted that way. The AMA Guides is clear that assessments of separate, unrelated impairments must be combined.[31] The language of s 3.2k does restrict the extent to which Peripheral Nerve Assessment of an impairment may be combined with other assessments, but on its proper construction, that limitation applies only in relation to assessments under different methodologies of a specific impairment, and not to more than one unrelated impairment. The language of chapter 3 is directed towards ensuring that multiple assessments of the same impairment are not duplicative. That is consistent with the AMA Guides requiring the identification of the most appropriate method to assess the specific impairment.
[31]Also see Vicinity Centres v Arik (n 4).
Section 3.2k has work to do insofar as it prevents multiple assessments under different methodologies of the same impairment from being combined, but it does not extend to preventing the combining of assessments of different impairments. In this case, the Panel’s conclusion appears to be that the functional consequences of the tendon tear (assessed in accordance with 3.2d) and the dysesthesia from the nerve damage (assessed in accordance with 3.2k) are ‘different’ or ‘unrelated’ impairments that are to be combined.
A practical difficulty of the plaintiff’s submission is that it would preclude combined assessments of distinct impairments that affect a person in distinct ways. For example, if a person suffers injuries to a knee and an ankle in an accident, and a panel determined that the knee injury (being a tendon injury) is best assessed by Manual Muscle Testing (3.2d), but the ankle injury (being nerve injury) is best assessed by reference to Peripheral Nerve Injuries method (3.2k), the plaintiff’s submission would preclude the assessments of each impairment from being combined for the purposes of determining whole person impairment even though they are distinct impairments that affect the person in distinct and cumulative ways. Reading chapter 3 of the AMA Guides as a whole, I do not agree with an interpretation that would lead to that result. If a tendon injury and a nerve injury each cause the same impairment (for example, by causing a reduction in strength), then s 3.2k may have some work to do in precluding combined assessments under ss 3.2d and 3.2k of that impairment. But that does not mean assessments may not be combined where there are different impairments.
It is sufficiently clear that the panel concluded that the nerve injury had effects different from the tendon/muscle injury, and therefore they were separate impairments that may be combined without contravening the terms of s 3.2k. And once separate impairments have been identified, the AMA Guides do not preclude a panel from combining assessments of one impairment under Peripheral Nerve Injuries (3.2k) with an assessment of another impairment under Manual Muscle testing (3.2d). That being the case, the plaintiff has not discharged the ‘heavy onus’ of establishing that the assessment was not conducted in accordance with the AMA Guides.[32]
[32]Gamble v Emerald Hill Electrical (n 5) 61 [56]; Vicinity Centres v Arik (n 4) [59].
The application will be dismissed. I will hear the parties on the question of costs.
SCHEDULE OF PARTIES
| S ECI 2024 05863 | |
| BETWEEN: | |
| CAPEL SOUND FORESHORES COMMITTEE OF MANAGEMENT | Plaintiff |
| - v - | |
| EMERITUS PROFESSOR MALCOLM SIM | First Defendant |
| DR JOHN SKELLEY | Second Defendant |
| THOMAS SANZA | Third Defendant |
0
5
0