Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liq) - [2013] NSWSC 365

Supreme Court

New South Wales

Medium Neutral Citation: Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liquidation) [2013] NSWSC 365
Hearing dates: 20 March 2013
Decision date: 18 April 2013
Jurisdiction: Common Law
Before: Schmidt J
Decision:
(1) Quash the whole of the decision made by the Second Defendant, the Appeal Panel of the Workers Compensation Commission of New South Wales, on 29 August 2012 pursuant to s 328(5) of the Workplace Injury Management and Workers Compensation Act 1998, and the medical assessment certificate issued with the decision, which stated that Mr Elcheikh has whole person impairment of 12%.
(2) Declare that the decision and the medical assessment certificate are void.
(3) Remit the matter to the third defendant for the purpose of constituting an Appeal Panel under s 328(1) of the Workplace Injury Management and Workers Compensation Act to determine the matter according to law.
(4) Costs of the appeal to Mr Elcheikh as agreed or assessed.
(5) Exhibits may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

Catchwords: APPEAL - appeal against Workers Compensation Commission Appeal Panel decision - Court's power to make orders sought - legislative scheme - arbitrator's decision - medical specialist's decision - Appeal Panel's decision - whether Appeal Panel's reasons inadequate - whether there was jurisdictional error - degree of impairment - failure to determine degree of impairment due to pre-existing condition - specific injury - whether specific injury needed for diagnosis related estimate category - failure to consider extent of resulting impairment - failure to consider whether pre-existing condition contributed to impairment - failure to consider whether proportion of impairment was due to pre-existing condition - whether Appeal Panel failed to address s 323(2) - orders
Legislation Cited: Supreme Court Act 1970
Workers Compensation Act 1987
Workplace Injury Management and Workers Compensation Act 1998
WorkCover Legislation Amendment Act 1996 (repealed)
Cases Cited: Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372
Cole v Wenaline Pty Limited [2010] NSWSC 78
Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163
Hanna v Department of Immigration, Multicultural and Indigenous Affairs [2004] NSWCA 275
Siddik v WorkCover Authority of NSW [2008] NSWCA 116; (2008) 6 DDCR 228
Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259
Zuanic v Gypro-Tech (Australia) Pty Limited (in liq) [2006] NSWSC 739; (2006) 66 NSWLR 206
Category: Principal judgment
Parties: Zain Elcheikh (Plaintiff)
Diamond Formwork (NSW) Pty Ltd (in liquidation)
Bruce McManamey, Dr Brian Noll, Dr Tommasino Mastroianni as members of the Appeal Panel of the Workers Compensation Commission of New South Wales (Second Defendant)
Registrar of the Workers Compensation Commission of New South Wales (Third Defendant)
Representation: Counsel:
Ms M Allars with Mr L Morgan (Plaintiff)
Mr C Jackson (First Defendant)
Solicitors:
C&M Lawyers (Plaintiff)
Moray & Agnew (First Defendant)
IV Knight, Crown Solicitor's Officer (Second Defendant)

File Number(s): 2012/318123
Publication restriction: None
Decision under appeal

Date of Decision:

2012-08-29 00:00:00

Before:

Appeal Panel
Arbitrator: Bruce McManamey
Approved Medical Specialist: Dr Brian Noll
Approved Medical Specialist: Dr Tommasino Mastroianni

File Number(s):

M1-002330/12

Judgment

By amended summons filed on 26 March 2013 the plaintiff, Mr Elchiekh, sought orders under s 69 of the Supreme Court Act 1970 quashing a decision made by the second defendant, an Appeal Panel of the Workers Compensation Commission of New South Wales, on 29 August 2012 under s 328(5) of the Workplace Injury Management and Workers Compensation Act 1998 ('the Act'). The plaintiff also sought orders declaring that the decision and a medical assessment certificate issued by the Appeal Panel with the decision are void. The medical assessment certificate certified that the plaintiff had a whole person impairment of 12%.

The Court's power to grant the relief sought

There is no statutory appeal to this Court from such a decision (see Zuanic v Gypro-Tech (Australia) Pty Limited (in liq) [2006] NSWSC 739; (2006) 66 NSWLR 206 at 217 [30]). The merits of the decision thus do not arise for consideration. However, jurisdictional error, errors on the face of the record, and other errors are alleged.

Relief under s 69 may be granted in the case of jurisdictional error and error of law on the face of the record, which includes the reasons expressed by the Appeal Panel for its decision (see Supreme Court Act, s 69(4) and Hanna v Department of Immigration, Multicultural and Indigenous Affairs [2004] NSWCA 275 at [28].) The defendant conceded that if the decision contains an error going to jurisdiction, or an error of law on the face of the record, the Court has power to quash the decision. That there had been such error was in issue.

It is relevant to note as to the matters over which the parties joined issue, that in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, it was observed at 179:

"If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it."

The background

Mr Elcheikh, who was born in 1970, began working as a labourer in 1990 and as a leading hand in 1997. His work was very heavy, involving heavy lifting of timber, plywood and props. He began working with the first defendant, Diamond Formwork, doing that kind of work and some carpentry, in 1997. In 2004 he began experiencing pain and restriction of movement in his upper back. The pain worsened over time to the point where by 2007 it was becoming unbearable. He ceased work in 2008 when the company went into liquidation. The pain worsened further and he then sought specialist attention. Initially, Mr Elcheikh received workers compensation payments, but in December 2008 the insurer denied liability.

Mr Elcheikh was treated by a neurosurgeon, Dr Steel. Scans were taken of his back and neck and, in November 2008, Dr Steel prescribed cortisone injections. They provided no lasting relief. Further scans were undertaken and surgery recommended. Mr Elcheikh was diagnosed to be suffering an underlying condition, Scheuermann's disease. He underwent spinal fusion surgery in 2010.

The legislative scheme

In order to determine the matters over which the parties joined issue, it is necessary to have regard to the legislative scheme and how Mr Elcheikh's workers compensation claims were dealt with.

Mr Elcheikh made his first application to the Workers Compensation Commission in April 2009. Mr Elcheikh claimed that the work he had performed for Diamond Formwork had placed stress and strain on the lower part of his thoracic spine, neck and lower back; and that he had contracted a degenerative disc disease of the spine by a gradual process to which his employment was a contributing factor to the aggravation, acceleration, exacerbation and/deterioration of the disease. He then sought weekly benefits, medical expenses and domestic assistance.

Under s 9A of the Workers Compensation Act 1987, he was not entitled to compensation unless his employment was a substantial contributing factor to his injury. 'Injury' was relevantly defined in s 4 as:

"(a) means personal injury arising out of or in the course of employment"

Because Diamond Formwork's insurer disputed liability for Mr Elcheikh's injury, its liability had to be determined before any medical assessment of the condition of his spine could be undertaken (see s 293(3)(b)). On 11 August 2009, a Workers Compensation Commission arbitrator determined that Diamond Formwork had liability for Mr Elcheikh's injury and a certificate to that effect was issued under s 294, to which was attached a brief statement of the reasons for the determination. The insurer was ordered to pay Mr Elcheikh's medical and related expenses under section 60 of the Workers Compensation Act.

In 2010 Mr Elchiekh underwent thoracic pedicle screw fusion in order to alleviate his pain. In March 2012 he made an application for lump sum compensation, as well as compensation for pain and suffering. The degree of his impairment was in dispute.

Section 65 of the Workers Compensation Act provided:

"(3) If there is a dispute about the degree of permanent impairment of an injured worker, the Commission may not award permanent impairment compensation unless the degree of permanent impairment has been assessed by an approved medical specialist."

The dispute over the extent of Mr Elcheikh's impairment had to be dealt with under part 7 of the Act. Section 321 provides for referral of such a 'medical dispute' for assessment by a medical specialist. That term is defined in s 319 as;

"a dispute between a claimant and the person on whom a claim is made about any of the following matters or a question about any of the following matters in connection with a claim:

(a) the worker's condition (including the worker's prognosis, the aetiology of the condition, and the treatment proposed or provided),

(b) the worker's fitness for employment,

(c) the degree of permanent impairment of the worker as a result of an injury,

(d) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion,

(e) the nature and extent of loss of hearing suffered by a worker,

(f) whether impairment is permanent,

(g) whether the degree of permanent impairment of the injured worker is fully ascertainable."

This dispute fell into clauses (c) and (d). It was a dispute over the 'claim' Mr Elcheikh had made as to his 'injury': what his degree of permanent impairment after the injury was and whether any proportion of that impairment was due to his pre-existing condition. These terms are defined in s 4(1) of the Act to mean respectively:

"Claim means a claim for compensation or work injury damages that a person has made or is entitled to make.'

Injury:

'(a) means a personal injury arising out of or in the course of employment, and

(b) includes:

(i) a disease contracted by a worker in the course of employment, where the employment was a contributing factor to the disease, or

(ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, but

(c) does not include (except in the case of a worker employed in or about a mine):

(i) a dust disease, or

(ii) the aggravation, acceleration, exacerbation or deterioration of a dust disease."

Mr Elcheikh's claim was referred to an approved medical specialist appointed under s 321 for assessment. The assessment had to be undertaken by the medical specialist in accordance with s 322, which provides:

"322 Assessment of impairment

(1) The assessment of the degree of permanent impairment of an injured worker for the purposes of the Workers Compensation Acts is to be made in accordance with WorkCover Guidelines (as in force at the time the assessment is made) issued for that purpose.

(2) Impairments that result from the same injury are to be assessed together to assess the degree of permanent impairment of the injured worker.

(3) Impairments that result from more than one injury arising out of the same incident are to be assessed together to assess the degree of permanent impairment of the injured worker.

Note. Section 65A of the 1987 Act provides for impairment arising from psychological/psychiatric injuries to be assessed separately from impairment arising from physical injury.

(4) An approved medical specialist may decline to make an assessment of the degree of permanent impairment of an injured worker until the approved medical specialist is satisfied that the impairment is permanent and that the degree of permanent impairment is fully ascertainable. Proceedings before a court or the Commission may be adjourned until the assessment is made."

Section 322(1) required that the assessment be made in accordance with the Guidelines in force at the time the assessment was made. They were the 'WorkCover guides for the evaluation of permanent impairment' 3rd edition, February 2009. Guideline 4.1 adopted a method of assessment known as 'diagnosis related estimate', as provided in the American Medical Association guides to the evaluation of permanent impairment 5th edition ('AMA 5').

Guideline 1.21 required that the medical assessment only be conducted when the degree of permanent impairment of the injured worker was fully ascertainable. That is, when the assessor considers the person has attained maximum medical improvement.

Chapter 15.3 of AMA 5 provided that assigning an individual to the correct category could be undertaken on the basis of two approaches. The first based on symptoms, signs and appropriate diagnostic test results. The second based on the presence of fractures and/or dislocations with or without clinical symptoms. It specified that almost all individuals will fall into one of the first three DRE categories, but that "altered motion segment integrity (ie, increased motion or loss of motion ) qualifies the individual for category IV or V'.

Guideline 4.33 also dealt expressly with the effect of surgery on the spine. It provided that an operation with surgical ankylosis (fusion), such as Mr Elcheikh had undergone, was to be considered under DRE category IV, as provided in table 15.4 of AMA 5. That table specified a 20% whole person impairment ('WPI') for DRE IV, with up to a further 3% available for the impact of the condition on activities of daily living ('ADL'), which was dealt with elsewhere in AMA 5.

On 11 May 2012, the medical specialist assessed Mr Elcheikh's WPI to be 20% and his ADL 2%, a total of 22% and issued a certificate to that effect.

Section 323 also required the medical specialist to make a deduction from the assessed impairment resulting from the injury, for any proportion of the impairment found to be due to any previous injury or pre-existing condition. It provides:

"323 Deduction for previous injury or pre-existing condition or abnormality

(1) In assessing the degree of permanent impairment resulting from an injury, there is to be a deduction for any proportion of the impairment that is due to any previous injury (whether or not it is an injury for which compensation has been paid or is payable under Division 4 of Part 3 of the 1987 Act) or that is due to any pre-existing condition or abnormality.

(2) If the extent of a deduction under this section (or a part of it) will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction (or the relevant part of it) is 10% of the impairment, unless this assumption is at odds with the available evidence.

Note. So if the degree of permanent impairment is assessed as 30% and subsection (2) operates to require a 10% reduction in that impairment to be assumed, the degree of permanent impairment is reduced from 30% to 27% (a reduction of 10%).

(3) The reference in subsection (2) to medical evidence is a reference to medical evidence accepted or preferred by the approved medical specialist in connection with the medical assessment of the matter.

(4) The WorkCover Guidelines may make provision for or with respect to the determination of the deduction required by this section.

(5) (Repealed)

Note. Section 68B of the 1987 Act makes provision for how this section applies for the purpose of calculating workers compensation lump sum benefits for permanent impairment and associated pain and suffering in cases to which section 15, 16, 17 or 22 of the 1987 Act applies."

Deduction for pre-existing conditions was also dealt with in the Guidelines at 1.50 to 1.52. Guideline 1.51 and 1.52 provided:

"1.51 In assessing the degree of permanent impairment resulting from the work injury, the assessor is to indicate the degree of impairment due to any previous injury, pre-existing condition or abnormality. This proportion is known as the 'deductible proportion'. The deductible portion should be deducted from the degree of permanent impairment determined by the assessor.

1.52 For the injury being assessed, the deduction is one tenth of the assessed impairment, unless this is at odds with the available evidence."

The term 'work injury' was defined in s 4 of the Act to mean 'an injury in respect of which compensation is payable'.

The medical specialist assessed the deductible portion in Mr Elcheikh's case to be 50%, with the final result being an 11% whole person impairment. That was also referred to in the certificate.

Once an assessment has been made, a medical assessment certificate must be issued by the medical specialist under s 325(2), in a form approved by the Registrar. It must:

"(a) set out details of the matters referred for assessment, and

(b) certify as to the approved medical specialist's assessment with respect to those matters, and

(c) set out the approved medical specialist's reasons for that assessment, and

(d) set out the facts on which that assessment is based. (s325(2))."

Under s 326(1) this certificate is presumed to be conclusively correct as to:

"(a) the degree of permanent impairment of the worker as a result of an injury,

(b) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality,

(c) the nature and extent of loss of hearing suffered by a worker,

(d) whether impairment is permanent,

(e) whether the degree of permanent impairment is fully ascertainable."

A party is given limited rights of appeal against a medical assessment under s 327, if the Registrar of the Workers Compensation Commission is satisfied under s 327(4) that at least one of the grounds of appeal specified in s 327(3) is made out on the face of the application. They are:

"(3) The grounds for appeal under this section are any of the following grounds:

(a) deterioration of the worker's condition that results in an increase in the degree of permanent impairment,

(b) availability of additional relevant information (but only if the additional information was not available to, and could not reasonably have been obtained by, the appellant before the medical assessment appealed against),

(c) the assessment was made on the basis of incorrect criteria,

(d) the medical assessment certificate contains a demonstrable error."

Mr Elcheikh appealed the medical specialist's decision on various grounds, including that the assessment contained demonstrable error, including in relation to the issue of scarring and that the deduction of 50% was made on the basis of incorrect criteria.

The Registrar may refer a person who has appealed for further assessment under s 329 as an alternative, but only if the matter could otherwise have proceeded on appeal under this section (s 327(5)). In Mr Elcheikh's case the Registrar concluded that at least one of the grounds for appeal specified in subsection (3) had been made out and referred the appeal to an Appeal Panel. The referral was not, however, in evidence.

An Appeal Panel constituted under s 328(1) has power to confirm or revoke the medical specialist's assessment, or to issue a new assessment. The section provides:

"328 Procedure on appeal

(1) An appeal against a medical assessment is to be heard by an Appeal Panel constituted by 2 approved medical specialists and 1 Arbitrator, chosen by the Registrar.

(2) The appeal is to be by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made. The WorkCover Guidelines can provide for the procedure on an appeal.

(3) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the medical assessment appealed against may not be given on an appeal by a party to the appeal unless the evidence was not available to the party before that medical assessment and could not reasonably have been obtained by the party before that medical assessment.

(4) When attending an Appeal Panel for the purposes of an assessment, an injured worker is entitled to be accompanied by a person (whether or not a legal adviser or agent) to act as the injured worker's advocate and assist him or her to present his or her case to the Appeal Panel.

(5) The Appeal Panel may confirm the certificate of assessment given in connection with the medical assessment appealed against, or may revoke that certificate and issue a new certificate as to the matters concerned. Section 326 applies to any such new certificate.

(6) The decision of a majority of the members of an Appeal Panel is the decision of the Appeal Panel."

The Appeal Panel agreed with the medical specialist's assessment of Mr Elcheikh having a total impairment of 22%, to be reduced by 50% for his pre-existing condition. It concluded, however, that the medical specialist had failed to address the issue of the scarring which had resulted from the operation on Mr Elcheikh's spine. Scarring was assessed at an amount of 1%, which was also reduced by 50% on account of his pre-existing condition. As the result of a rounding up exercise the plaintiff was assessed to have a total 12% whole person impairment.

The arbitrator's decision

The Appeal Panel adopted the reasons and conclusions of the medical specialist in its decision. It is necessary to understand the reasons given for their decisions by both the arbitrator and the approved medical specialist, in order to resolve the matters over which the parties joined issue in these proceedings.

The arbitrator concluded that Mr Elcheikh had suffered injury to his cervical and thoracic spine as a result of the nature and conditions of his employment by Diamond Formwork between 1997 and 2007. The deemed date of this injury was 1 January 2007.

The arbitrator gave reasons for his decision. He had before him medical reports of the orthopaedic surgeons Dr Bodel and Dr Bornstein and a GP, Dr Guirguis.

The arbitrator noted that Dr Bodel was of the opinion that Mr Elcheikh's symptoms were associated with degenerative change which had developed in his spine, because of the underlying Scheuermann's disease from which he was suffering; and that the nature and conditions of his work had aggravated and possibly accelerated the disease process, which was of gradual onset. He was of the opinion that this disease had not caused pain in his childhood, adolescence, or adult life. It was a problem in growing adolescence and once the growth was finished, the condition recovered.

He noted that Dr Bornstein was of the opinion that Mr Elcheikh had advanced Scheuermann's disease, which was decompensating. He considered that the symptoms were gradually progressive and may have been contributed to in terms of progression by the nature and conditions of his employment, but that causation was constitutional and had developed as an adolescent. He was of the view that other than in a very peripheral sense, Mr Elcheikh's employment had not materially contributed to his symptoms and was not the direct cause of his complaint, but that his duties certainly would not have helped.

He also noted that Dr Guirguis disagreed with Dr Bornstein, because Mr Elcheikh had never had any complaints, kyphosis or pains over the years. In his view, consistent heavy lifting every day for years had affected his spine. He considered that if the Scheuermann's disease had anything to do with Mr Elcheikh's complaints, it would have affected him years ago, when he started working in industry.

The arbitrator considered that Dr Bodel supported the opinions of Dr Guirgis. The arbitrator preferred the views of these two doctors over that of Dr Bornstein, concluding that Mr Elcheikh had suffered injury to his cervical and thoracic spine as a result of the nature and conditions of his employment between 1997 and 2007.

The approved medical specialist's decision

When the claim which Mr Elcheikh pursued after his spinal fusion surgery was referred to the approved medical specialist, Dr Pillemer, the arbitrator had already determined that Mr Elcheikh had been injured at work and that Diamond Formwork had liability for that injury. What had to be determined by the medical specialist was whether the resulting impairment was permanent; whether the degree of permanent impairment was fully ascertainable; if it was, the degree of that impairment; and what contribution, if any, his pre-existing condition might have made to that impairment.

The medical specialist overlooked the claim in relation to scarring, but certified that Mr Elcheikh's 'impairment is permanent and the degree of permanent impairment is fully ascertainable'. He concluded that Mr Elcheikh fell into DRE category IV, with 20 % whole person impairment in respect of his thoracic spine and an additional 2% for interference with activities of daily living. He determination that there should be a 50% deduction for the proportion of that impairment due to the pre-existing condition, with the result an 11% impairment.

The medical specialist examined Mr Elcheikh in May 2012. In his reasons he noted that he found him to have a very muscular build and that in the past, he had played first grade rugby league. He also noted that he had performed extremely heavy work in the course of his employment, constructing formwork which required carrying and stacking and passing material and equipment up to the next level, including very heavy steel frames.

Amongst other things the medical specialist noted that the history given by Mr Elcheikh included that he first noticed discomfort in his thoracic spine in approximately 2004/2005. There was no history of any injury to his back or other precipitating factor. He had suffered significant ongoing problems with his thoracic spine since then, but had been in good health until then, apart from suffering an ankle injury at one time. His symptoms then came on spontaneously, becoming progressively worse over time and eventually becoming very severe.

The medical specialist noted that Mr Elcheikh was asymptomatic prior to the onset of his symptoms in 2004/2005. Previously he had always been very fit and active in sporting activities, until the ankle injury at work. He noted that Mr Elcheikh had suffered very significant symptoms in his back up until the time of his surgery in the lower thoracic region, to the point where he was 'unable to take the pain'. His general health was otherwise good.

The medical specialist also noted that Mr Elcheikh had carried on with his normal work even though he was in pain from approximately 2004, until 2008 when he had to stop work because of his symptoms. He remained off work for a few months and then started work in sales. He continued this work full-time up until his surgery in 2010. The medical specialist observed that Mr Elcheikh was 'quite obviously a very well motivated gentlemen', but he had not gone back to gainful employment after the surgery.

The medical specialist outlined his findings on physical examination of Mr Elcheikh, which included a 22 cm vertical scar from the mid-thoracic region, which was well healed and an increase in the normal thoracic kyphosis. He noted that he had elected not to palpate Mr Elcheikh's spine.

The medical specialist also noted that:

" ... a CT scan of his thoracic spine carried out on 22 August 2008 showed significant changes in the lower thoracic region from T7 to T12 with irregularity of end plates, vertebral body wedging and lengthening of vertebral bodies from front to back all in keeping with Scheuermann's disease. There was also secondary degenerative changes with osteophyte formation at multiple levels and facet degeneration. Subsequent x-rays post operation showed the fusion of T8 to T12 with pedicular screws in position, a very satisfactory position having been obtained."

The medical specialist's summary was:

"Mr Elcheikh has radiological evidence of advanced longstanding Scheuermann's disease of his lower thoracic spine accompanied by significant secondary degenerative changes. He has the typical features of AP overgrowth of the vertebral bodies with irregular end plates and anterior wedging as well as disc space narrowing.

As noted, his work was very heavy and in my opinion the nature and conditions of his work over the years would have been aggravation of his underlying condition(sic). Important in consideration to the extent of deduction for his underlying condition is the fact that there is no history of any injury or precipitating factor.

Because of significant symptoms Mr Elcheikh came to extensive posterior thoracic fusion from T8 to T12 and although his symptoms have improved considerably, he remains with significant ongoing discomfort."

The medical specialist then referred to various reports which he had considered. He referred to the opinions of Dr Bornstein, noting 'I am very sympathetic with the views expressed by Dr Bornstein but have elected to give Mr Elcheikh the benefit of the doubt with regard to the extent that his employment has contributed to his ongoing symptoms.' No reasons for that sympathy were given.

He also referred to the 2008 to 2011 reports of Dr Steel, noting a diagnosis of severe degenerative osteoarthritis; appearances that 'were the most marked I have seen in such a young patient'; that he would eventually require a spinal fusion; and that he had improved following surgery.

He also referred to Dr Bodel's 2009 report, which noted the underlying Scheuermann's disease; that the pathology was primarily a constitutional ailment; and that work had been an aggravating factor, as well as causing acceleration, the condition not then having stabilised.

The medical specialist also referred to the 2011 reports of Dr Jones, a rehabilitation specialist. Dr Jones considered that Mr Elcheikh fell in to DRE category IV with 2% for ADL as giving a total of 22% WPI, with no deduction for the underlying condition.

He also referred to the 2010 reports of Dr Schwarzer, a rheumatologist and pain specialist, who was not sure that surgery would be effective for Mr Elcheikh, but suggested no figures of impairment. He also referred to an incomplete report of Dr Barnsley, another rheumatologist.

The medical specialist also referred to Dr Guirguis' 2008 report, noting that he disagreed with Dr Bornstein's opinion that the basic cause of Mr Elcheikh's complaints was the underlying Scheuermann's disease. He considered that his problems were due to the nature and conditions of his work. The medical specialist observed that he did 'not agree with Dr Gurgius' reasoning', but did not explain why.

The medical specialist also referred to a 2012 report of Dr Garvan, an orthopaedic surgeon, who he observed had noted that there was no particular injury sustained on the suggested date of injury 1 January 2007. Dr Garvan considered that Mr Elcheikh's condition was due to pre-existing multilevel thoracic spondylosis as well his pre-existing Scheuermann's disease affecting his thoracic spine. He accepted that the nature and conditions of his work would have been an aggravating factor and suggested 23% whole person impairment, with a 50% deduction, resulting in a 12% whole person impairment. Dr Garvan's report was in evidence. He there gave no explanation for the conclusion that there should be a 50% deduction. The Medical specialist said that he agreed with Dr Garvan's assessment, other than in relation to the assessment of 3% for ADLs.

The reasons given by the medical specialist for the 50% deduction were:

"As noted, in the body of my report, Mr Elcheikh has advanced degenerative changes due to the Scheuermann's disease of the lower thoracic spine as agreed by almost all of the specialists noted. His treating specialist felt that these were the most marked changes that he had seen in such a young patient. In fact the operation was carried out for the pain but was mainly on the basis of the degenerative changes and kyphosis that was present. If not for the underlying Scheuermann's disease, there is no way that surgery would have even been considered. Surgery therefore was directly related to his underlying condition.

If Mr Elcheikh had been assessed for his back pain prior to surgery he would have only fallen into DRE category II with 2% whole person impairment giving a total of 7% whole person impairment

Importantly, as noted above, there was no history of any injury although it is certainly accepted that the nature and conditions of his work were very strenuous. The Guides are very clear in this regard, noting that to get into DRE category II of any region of the spine there needs to be a 'history ... compatible with a specific injury or illness'. Although not specifically stated, the implication is that any DRE category above DRE II, a specific injury is needed. I have however given Mr Elcheikh the benefit of the doubt, noting that his work could be extremely heavy at times.

Once again, as noted, the radiological changes are typical of Scheuermann's disease and I would certainly accept that the nature and conditions of his work would be an aggravating and accelerating factor of his underlying condition and in my opinion is a substantial contributory factor to the eventual development of his symptoms and the requirement for surgery.

In my opinion in a one-half (50%) deduction is a realistic figure in the present situation and in my opinion this is giving Mr Elcheikh the benefit of any doubt."

Mr Elcheikh's appeal

On appeal Mr Elcheikh did not challenge the medical specialist's conclusion that he fell into DRE category IV. He complained that the medical specialist had failed to assess his scarring and that he had erred in concluding that there should be a 50% deduction pursuant to s 323.

In written submissions it was argued for Mr Elcheikh that the medical specialist had used wrong criteria; had failed to consider relevant evidence; had failed to give adequate reasons for his decision; had arrived at a 50% deduction on the basis of conjecture and assumption, rather than logical deduction from the history and other evidence; and that he had failed entirely to consider his claim for scarring.

The Appeal Panel's decision

The Appeal Panel conducted a preliminary review, concluding that it was not necessary for it to examine Mr Elcheikh. It determined the appeal on the basis of the documents before the medical specialist and the parties' submissions, without conducting a hearing.

The Appeal Panel noted that its role under s 327 was to determine the grounds of appeal allowed by the Registrar, but that it could consider other grounds falling within s 327(3), if it gave the parties an opportunity to be heard (Siddik v WorkCover Authority of NSW [2008] NSWCA 116; (2008) 6 DDCR 228). The Appeal Panel also noted that its review could involve either a hearing de novo or a rehearing and that it had an obligation to give reasons for its decision (Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372). It also noted that where more than one conclusion was open, it might be necessary to explain why one conclusion was preferred over another. It then noted that it had conducted a review and reached its own conclusion concerning the correct assessment of Mr Elcheikh's impairments and losses. It also noted that since 2010 amendments, its review was limited to the grounds of appeal on which the appeal was made.

After referring to the medical specialist's examination of Mr Elcheikh and the conclusions reached, the Appeal Panel noted Mr Elcheikh's case that the 50% deduction pursuant to s 323 was made on the basis of incorrect criteria or contained a demonstrable error. It referred to submissions that the medical specialist failed to give proper consideration to his work history and active lifestyle prior to 2004, without any problems associated with Scheuermann's disease. It also noted that he had argued that proper reasons had not been given for not accepting Dr Guirguis' opinion and that the deduction of 50% for a pre-existing condition was purely conjecture, not based on any logical deduction, given the history of a 15 year gap between the onset of his pain in 2004 and his adolescence, when symptoms of the disease would ordinarily have manifested.

The Appeal Panel referred to Cole v Wenaline Pty Limited [2010] NSWSC 78, where it was concluded that:

"[29] For a deduction to be made from what has been assessed to be the level of impairment which resulted from the later injury in question, a conclusion is required, on the evidence, that the pre-existing injury, pre-existing condition or abnormality caused or contributed to that impairment.

...

38 What s 323 required, however, was that the evidence be considered, so that it could be determined, firstly, what the level of impairment after the second injury was. Secondly, whether a proportion of that impairment was due to the first injury. Thirdly, what that proportion was. Undoubtedly in undertaking this exercise, the medical members of an Appeal Panel must utilise their medical judgement, knowledge and experience. Nevertheless, all stages of the statutory exercise must be undertaken in the light of the evidence and without the making of assumptions not provided for by the section."

The Appeal Panel then observed:

"[23] ....the first step in determining whether there is a 323 deduction is to identify the matters which are taken into account when making an assessment of impairment. In this case the relevant matter is the fact that the Appellant has undergone surgery by way of a fusion. As was correctly pointed out by the AMS this is the basis on which he is assessed as DRE Cateogry IV and on which the overall assessment of 22% whole person impairment is based.

24 The next step in determining a 323 deduction is to identify any pre-existing condition or abnormality. In this case there is no dispute that there is a pre-existing Scheuermann's disease.

25 The third step is to determine whether the pre-existing condition or abnormality has contributed directly to the matters taken into account when assessing the impairment. In this case the question is whether the pre-existing Scheuermann's disease has contributed to the need for the surgery which was performed on 29 October 2010. The AMS directly addressed this question. He identified that the surgery was carried out for two purposes. One was to treat the pain which could be seen as the consequence of the work related injury. The surgery was also to treat the effects of the pre-existing Scheuermann's disease. The AMS considered that in the absence of the Scheuermann's disease the surgery would not have been carried out. The panel agrees with that conclusion.

26 The final step is to compare the relative contributions of the injury and the pre-existing condition in order to determine an apportionment. In this case the AMS determined that the effects of the injury and a pre-existing condition contributed equally to the decision to carry out the surgery. The Panel is of the view that the conclusion reached by the AMS is consistent and logical."

The Appeal Panel referred to Mr Elcheikh's case that the Scheuermann's disease could not have contributed to his impairment, because he was able to work for many years in heavy work and that there had been considerable time between the development of the disease in adolescence and the onset of pain he experienced in his mid 30s. It observed that under the former legislative scheme there could be a deduction even though the evidence did not disclose any back impairment prior to the relevant injuries. It also noted that the question it had to determine was not whether there was any pre-existing impairment, but whether, and to what extent, the pre-existing condition contributed to the impairment being assessed.

It then concluded:

"[28] The AMS has clearly explained how the pre-existing Scheuermann's disease has contributed to the currently assessable impairment and why he made a deduction of 50 per cent. The panel agrees with the reasoning and conclusions of the AMS."

No other explanation was given for its conclusions. It then turned to the appeal in respect of scarring. The conclusions which the appeal panel reached in that regard are not challenged.

Were the Appeal Panel's reasons inadequate?

It is convenient to commence with this issue. The reasons given by the Appeal Panel must be approached in the way discussed in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at [30] - [31]:

"30. When the Full Court referred to "beneficial construction", it sought to adopt an approach mandated by a long series of cases, the best exemplar of which is Collector of Customs v Pozzolanic ([1993] FCA 456; (1993) 43 FCR 280). In that case, a Full Court of the Federal Court (Neaves, French and Cooper JJ) collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be "concerned with looseness in the language ... nor with unhappy phrasing" of the reasons of an administrative decision-maker ([1993] FCA 456; (1993) 43 FCR 280 at 287). The Court continued ([1993] FCA 456; (1993) 43 FCR 280 at 287):

"The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error".

31. These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed (See McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 at 616). In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision. This has been made clear many times in this Court. For example, it was said by Brennan J in Attorney-General (NSW) v Quin ((1990) 170 CLR 1 at 35-36):

"The duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone."

Even so approaching the Appeal Panel's reasons, it is apparent from its adoption of the conclusions and reasons of the medical specialist, without further explanation, that it fell into error.

In Campbelltown City Council v Vegan, it was said at [121] - [122]:

"121 Where it is necessary for the Panel to make findings of primary fact, in order to reach a particular conclusion as to the existence, nature and extent of any physical impairment, it may be expected that the findings of material facts will be set out in its reasons. Where facts are in dispute, it may be necessary to refer to evidence or other material on which findings are based, but the extent to which this is necessary will vary from case to case. More importantly, where more than one conclusion is open, it will be necessary for the Panel to give some explanation of its preference for one conclusion over another. That aspect may have particular significance in circumstances where the medical members of a Panel have made their own assessment of the applicant's condition and have come to a different conclusion from that reached by other medical practitioners, as set out in reports provided to the Panel.

122 On the other hand, to fulfil a minimum legal standard, the reasons need not be extensive or provide detailed explanation of the criteria applied by medical specialists in reaching a professional judgment: see Soulemezis at 273-274 (Mahoney JA) and 281-282 (McHugh JA). At least, that will be so where the medical science is not controversial: if it is, a more expansive explanation may be required. "

The matters raised on Mr Elcheikh's appeal could not be resolved by the Appeal Panel undertaking its own assessment of Mr Elcheikh and then simply stating that it agreed with the conclusions and reasons given by the medical specialist. That did not adequately explain why Mr Elcheikh's appeal failed, nor did it reveal how the Appeal Panel had resolved the matters over which the parties had joined issue.

As further discussed in Campbelltown City Council v Vegan at [129], the Panel was under an obligation to supply reasons for refusing the appeal. Those given were manifestly deficient and did not constitute compliance with the minimum requirements of that obligation. There was no attempt to engage with the grounds of appeal advanced; to explain why they were rejected; or to explain why the medical specialist was considered to have arrived at the correct conclusions on the evidence that there should be a 50% deduction for the pre-existing condition. The bald statement that the Appeal Panel agreed with the conclusions reached, for the reasons which the medical specialist had given did not satisfy the obligation to give reasons, particularly when the reasons which the medical specialist gave are considered, a matter to which I will return.

Notwithstanding that the assessment of the contribution of Mr Elcheikh's pre-existing condition to his physical impairment unquestionably involved matters of evaluation and judgment, which are often not always reducible to precise explanations, more was required in the circumstances of this case. Some explanation of why the Appeal Panel considered that the conclusion that the medical specialist had arrived at was correct, by reference to the factual contest between the parties, had to be provided by the Appeal Panel.

In the result it must be accepted that this aspect of Mr Elcheikh's case was established.

Other jurisdictional error

For the reasons which follow, I am satisfied that jurisdictional error has been established.

The Appeal Panel failed to consider what the degree of permanent impairment resulting from the injury was, as s 323(1) required

The arbitrator had determined that Mr Elcheikh had suffered 'a personal injury arising out of or in the course of employment' for which the employer was liable. It was a 'work injury' which fell within paragraph 4(b)(ii) of the definition of 'injury' in the Act:

"(ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration"

The injury was treated in various ways, including by the surgery to Mr Elcheikh's spine in 2010. On Dr Steel's report that improved the plaintiff's condition. In 2012 the medical specialist was able to find that the resulting impairment was permanent and had attained maximum improvement.

What the medical specialist then had to determine under s 322 was the degree of permanent impairment which had resulted from Mr Elcheikh's injury. The medical specialist also had to make a deduction under s 323 for any proportion of the impairment that was due to the pre-existing condition which Mr Elcheikh suffered, Scheuermann's disease.

There was no issue before the Appeal Panel that the medical specialist had correctly concluded that Mr Elcheikh fell into category DRE IV, with a whole person impairment of 20%, to which was added 2% for activities of daily living, giving a total of 22%. The Appeal Panel addressed Mr Elcheikh's complaint that the medical specialist had failed to deal with the issue of scarring, with the result that the assessment was increased to 23%. In these proceedings there is no complaint about that conclusion.

Mr Elcheikh advanced various grounds of appeal against the medical specialist's conclusion that there should be a 50% deduction from that assessment, to reflect the degree of the impairment due to his pre-existing condition. The Appeal Panel did not engage with them. Given that it was required by s 328(1) to approach the appeal 'by way of review of the original medical assessment', which review 'is limited to the grounds of appeal on which the appeal is made', this appears to have involved a fundamentally wrong approach, not contemplated by the legislation. It could not simply proceed on the basis of its own assessment of Mr Elcheikh, accepting that the medical specialist had arrived at the correct conclusions. It was obliged to consider and determine the appeal advanced against those conclusions.

For Mr Elcheikh it was argued that the Appeal Panel had wrongly approached its task by its focus on the surgery to Mr Elcheikh's spine, which it described to be 'the relevant matter'. The first defendant's case was that Mr Elcheikh's impairment was 'directly attributable to the surgery which had been performed, a four level fusion of the thoracic spine'. It was thus open to the Appeal Panel to approach what it had to determine as it did, because it was necessary for it to consider what had caused the need for surgery.

The first defendant's submission may not be accepted. That the Appeal Panel misconceived its functions must be accepted. The result of its approach to the assessment it undertook, was, it said in its reasons, that it had reached the same conclusion as the medical specialist. The explanation given was that it agreed with his reasoning. That involved a fundamental failure to deal with and resolve the matters over which the parties had joined issue on the appeal.

Further, Mr Elcheikh's impairment was not the result of the surgery to his spine. That surgery was part of the treatment he received for the injury which the arbitrator had determined in 2009 he had suffered as the result of the work he had performed for Diamond Formwork between 1997 and 2007. It had been found liable under the statutory scheme for that injury. The medical specialist was bound by that decision. Having determined that the injury had resulted in permanent impairment, what the medical specialist had to consider was whether the pre-existing condition, Scheuermann's disease, had contributed to that impairment.

Mr Elcheikh appealed the medical specialist's conclusion that there should be a 50% deduction, to reflect that contribution, on various grounds. That appeal required the Appeal Panel to consider whether the medical specialist had correctly approached the task required to be undertaken by s 323 and whether he had reached the correct conclusion, on the relevant evidence.

The view that this aspect of the appeal could be resolved by focussing on the surgery which Mr Elcheikh required after he was injured at work, was fundamentally flawed, given this statutory scheme. In so approaching the appeal, the Appeal Panel clearly fell into error.

Failure to determine the degree of impairment due to the pre-existing condition

The evidence was that the underlying condition had been asymptomatic throughout Mr Elcheikh's life, despite the heavy work he performed for the first defendant from 1997. Before 2004, when he was in his 30's, he had suffered no symptoms at all. He continued his heavy work, even after he began experiencing symptoms. The pain caused by the deteriorating condition of his spine was eventually so severe that he had to cease his work in 2008, but he was then able to undertake more sedentary work. His condition finally became so severe that he required surgery in 2010, with the final result that he could work no more.

Mr Elcheikh's case was that its focus on the surgery undertaken in 2010, rather than on the injury suffered to his spine at work and the contribution of the underlying condition to the impairment which resulted, had led the Appeal Panel into further error. There was no evidence that in the absence of the work injury, Mr Elcheikh would have required surgery for his pre-existing condition. It had been asymptomatic prior to the work injury. The result of the Appeal Panel's approach was that like the medical specialist, it failed to consider whether his pre-existing condition had contributed to his level of post work injury impairment, as s 323 required.

The first defendant's case was that the Appeal Panel had accepted the correctness of the conclusion reached by the medical specialist, adopting his reasons. That course was properly open to it. The medical specialist had reached his conclusions relying on his own expertise, the radiological evidence, and the expert opinions provided to him. Notwithstanding his sympathy for the views of Dr Bornstein, who considered that the pre-existing condition was the sole reason for Mr Elcheikh's impairment, the medical specialist had accepted that the work injury was a substantial contributing factor to the impairment, which he assessed at 50%. It submitted that there was no error in the Appeal Panel's approach.

It seems to me that this submission cannot be accepted.

Section 323 requires that once the level of impairment which results from a work injury has been established, that a medical specialist must make 'a deduction for any proportion of the impairment that is due to any previous injury'. As discussed in Cole v Wenaline Pty Limited at [29] that requires a conclusion:

"on the evidence, that the pre-existing injury, pre-existing condition or abnormality caused or contributed to that impairment'."

As discussed in Cole v Wenaline Pty Limited at [30], that assessment cannot be made on the basis of an assumption or hypothesis that a pre-existing condition contributed to the impairment flowing from the subsequent injury. It has to have regard to the evidence as to the actual consequences of the pre-existing condition.

The Appeal Panel referred to the medical specialist having directly addressed this question by identifying that the surgery had been carried out for two purposes, one to treat Mr Elcheikh's pain, which 'could be seen as a consequence of the work-related injury' and the other 'to treat the effects of the pre-existing Scheuermann disease'. The Panel agreed with that conclusion.

It noted, correctly, that the fact that the pre-existing condition had been asymptomatic did not preclude it from contributing to the impairment being assessed. Nor, however, could it be assumed that an asymptomatic condition did contribute to the impairment. Whether or not there had been any contribution had to be determined on the evidence, which included the competing specialist opinions on that matter, as well as various other evidence.

The Appeal Panel considered that the medical specialist had 'clearly explained' how the pre-existing condition had contributed to the assessable impairment. It said that it agreed with his reasoning and conclusions, but did not explain why.

Even approaching the Appeal Panel's reasons in the way discussed in Wu Shan Liang, in the circumstances, given that it was dealing with an appeal from the medical specialist's conclusions, that approach did not satisfy the obligations imposed upon it to consider and resolve the issues raised on the appeal, to which the parties had directed their submissions. It had to give reasons for its conclusions, given the competing evidence. The reasons given were inadequate, as I have explained. That reflected that the Appeal Panel had failed to engage with and determine the challenge to the correctness of the decision reached as to the deduction. That challenge had to be resolved on the basis of the relevant evidence.

The medical specialist plainly considered that the evidence established that the Scheuermann's disease, completely asymptomatic and something of which Mr Elcheikh learnt only after treatment for his workplace injury was sought, was primarily responsible for his impairment. In reaching that conclusion he had to consider not only the evidence of the conflicting expert opinions about whether this condition had contributed at all to the impairment, but also the other evidence which shed light on this question. While the medical specialist referred to the various reports in evidence and identified which he preferred, he did not explain why. He also did not refer to the evidence that the pre-existing condition had been asymptomatic, nor did he explain what the other evidence showed its contribution to the resulting impairment to have been.

An asymptomatic condition may or may not contribute to a resulting impairment. While reasons may be shortly given, in the event of a contest, not only the conclusion reached, but also its basis on the evidence has to be revealed by a medical specialist. In this case, the conclusions which the medical specialist had reached were contradictory. They had been challenged on appeal as incorrect. The Appeal Panel was thus obliged to consider and resolve that challenge. It failed to do so.

The arbitrator had determined that Mr Elcheikh had suffered a compensable injury as the result of his heavy work between 1997 and 2007, for which the former employer was liable. The nature of that injury was an aggravation of a previously asymptomatic condition, not as the result of any particular, identifiable event, but rather as the result of the consequences of the ongoing heavy work which he had performed over that time on his spine. The notional date of the injury specified was 1 January 2007.

The medical specialist, having initially expressed the opinion that Mr Elcheikh's work 'was very heavy' and that over the years it would have aggravated his underlying condition, finally concluded that Mr Elcheikh should have 'the benefit of the doubt' as to the contribution of his work to his impairment, observing that there 'there was no history of any injury'.

In this statutory scheme, those conclusions are difficult to understand.

His first opinion, that Mr Elcheikh's work had aggravated his pre-existing condition, accorded not only with the arbitrator's decision, but in terms of the definition in s 4 of the Act, was itself also a conclusion that there had been an 'injury' suffered as the result of his work. The medical specialist's later conclusion that there was no history of any injury, not only conflicted with his earlier conclusion, it was also inconsistent with the history given by Mr Elcheikh, to which the medical specialist had referred and which he did not indicate he doubted. That history was that the underlying condition, undiagnosed before the work injury, had been asymptomatic and that the pain which he had only begun suffering 2004, when he first sought treatment, had resulted from his heavy work. That was a history of injury at work about which there could be no doubt, given the arbitrator's determination.

Having determined the level of Mr Elcheikh's resulting impairment post surgery to be 22%, the medical specialist had to determine whether the pre-existing condition had contributed to that impairment. In doing so, he was not entitled to call into question the arbitrator's decision that the injury had been caused by Mr Elcheikh's work. The medical assessment had to proceed on the basis that it had.

The evidence was that the aggravation of Mr Elcheikh's pre-existing condition which resulted from his work, was significant. It is apparent from his final conclusions that the medical specialist considered that the major cause of the impairment was the pre-existing condition. That was presumably why he said that he gave Mr Elcheikh 'the benefit of the doubt' in concluding that it had contributed only 50% to his impairment, a conclusion which he described as 'realistic'.

The medical specialist also considered, however, that if Mr Elcheikh had been assessed before surgery was required, he would have fallen into DRE category II, which has a 5-8% whole person impairment range. He considered that he would then have been assessed at 7%. After surgery the level of his impairment brought him into category DRE IV, which has a 20-23% impairment range. Of itself, that suggests that the impact of Mr Elcheikh's work on his pre-existing condition was considerable.

It is in that context that the deduction of 50%, said by the medical specialist to be 'realistic' and made by giving Mr Elcheikh 'the benefit of the doubt' that his work had contributed to his impairment, was challenged on appeal as involving a wrong approach to the requirements of s323 and having resulted in the wrong conclusion.

The Appeal Panel approached what it had to determine by adopting what the medical specialist had asked himself as to whether the underlying condition was a necessary factor in the decision to carry out the surgery undertaken in 2010. He concluded that it was, observing that 'if not for the underlying Scheuermann's disease, there is no way that surgery would have even been considered'. If this was a relevant consideration in the factual circumstances, what clearly also required consideration, given that the condition had been asymptomatic, was whether, without the impact of his heavy work the pre-existing condition would have required such surgery.

That, however, was not the only matter which required consideration in resolving this aspect of the appeal. In determining what contribution, if any, the underlying condition had made to Mr Elcheikh's permanent impairment, the medical specialist had to consider all of the relevant evidence, including the competing expert's opinions, the material on which they rested, the history Mr Elcheikh had given and what his examination had all revealed.

It follows that the Appeal Panel's adoption of the medical specialist's conclusions and reasons, without engaging with the parties' contest as to what s 323 required to be determined, or the evidence on which the challenged conclusions rested and without providing reasons for the conclusions it reached on that contest, involved fundamental error. The adoption of the medical specialist's conclusions and reasons did not accord with the obligation imposed on the Appeal Panel by s 328, to determine the appeal which Mr Elcheikh had brought against that decision.

The first defendant's submission that 'ultimately, such apportionments are a matter of expert opinion, and involve a degree of clinical judgment' may well be accepted. Nevertheless, such judgments must be approached in the way provided by s 323 and must be resolved on the facts of the particular case. That the medical specialist had undertaken the assessment of the deduction in accordance with the requirements of s 323 and had necessary regard to the relevant facts was in issue on appeal.

In the circumstances, the Appeal Panel was obliged to do more than record its conclusion that it agreed with the medical specialist for the reasons he had given. The Appeal Panel plainly erred in not attempting the exercise required of it by s 328.

Did the Appeal Panel regard itself as bound by a requirement that for any diagnosis related estimate category above DRE Category I that a 'specific injury' is needed?

This aspect of Mr Elcheikh's case rested on the medical specialist's view that a 'specific injury ' was implicit in category DRE IV. Given this statutory scheme, it is apparent that the medical specialist was wrong in taking the view that such a 'specific injury' was required, in order for a worker to come within DRE IV.

The term 'specific injury' is not defined in AMA 5, but the use of the word 'specific' suggests that it has a meaning which is not as broad as the wide statutory definition of the word 'injury' in s 4 of the Act.

From the medical specialist's reasons, it appears that what he had in mind when referring to a 'specific injury' by reference to the date 1 January 2007, was a specific event, which resulted in an injury, rather than an injury of the kind that Mr Elchiekh had suffered, by way of aggravation or exacerbation of a pre-existing condition, over a period of time.

This view rested on the definition of category DRE II in AMA 5, which relevantly provides:

"History and examination findings are compatible with a specific injury or illness; findings may include significant muscle guarding or spasm observed at the time of the examination, (asymmetric loss of range of motion (dysmetria), or non verifiable radicular complaints, defined as complaints of radicular pain without objective findings, no alteration of motion segment integrity"

There is no reference to such a 'specific injury' made in the definitions of DRE III or IV, for example. DRE III is relevantly defined as:

"clinically significant radiculopathy, verified by an imaging studies that demonstrates a herniated disk at the level and on the side that would be expected from objective clinical findings; history of radiculopathy, which has improved following surgical treatment"

DRE IV is relevantly defined as:

"Alterations of motion segment integrity or bilateral or multilevel radiculopathy, alteration of motion segment integrity is defined from flexion and extension radiographs as translation of one vertebra on another of more than 2.5 mm; radiculopathy as defined in thoracic category III need not be present if there is alteration of motion segment integrity; if an individual is to be placed in DRE thoracic category IV due to radiculopathy, the latter must be bilateral or involve more than one level"

AMA 5 is an American publication adopted by the Guidelines. It has clearly not adopted the wide definition of 'injury' appearing in section 4 of the Act. That is something which medical specialists and Appeal Panels must be conscious of, when undertaking their functions under the Act.

In any event, neither DRE III nor IV require a history of 'a specific injury', unlike the position in relation to DRE II, where reference to the presence of such an injury is made. In his reasons the medical specialist did not explain why he considered that such a requirement should be read into other definitions. Nor was consideration given to how reading such a requirement into the DRE definitions, might interact with the use of the defined term in the Act.

Nor did the medical specialist consider that in Mr Elcheikh's circumstances, Guideline 4.33 expressly specified that spinal fusion had the result that a person fell within DRE IV. That did not require the person to have suffered any 'specific injury', reflective no doubt of the fact that other injuries might require such treatment. In the result, speculation as to the proper construction of the definition of DRE IV was unnecessary and the view that a 'specific injury' was required, in order for an injured worker such as Mr Elchiekh to fall within a category above DRE II, was wrong.

It follows that contrary to the medical specialist's apparent understanding, the question of whether Mr Elcheikh fell into category DRE IV did not depend on whether he had suffered a 'specific injury'. Whether he had suffered a 'specific injury' was, however, something which the medical specialist considered necessary to have regard to, under s 322, when determining the level of the impairment which had resulted from his workplace injury. In reaching his conclusion that Mr Elcheikh fell within DRE IV by giving him the 'benefit of doubt', he plainly fell into error.

As I have explained, ti is difficult to understand aspects of the medical specialist's reasons. In the explanation which he gave for the 50% deduction he arrived at, he said that it was important that 'there was no history of any injury', which he explained by reference to the need for a 'specific injury' in the definition of DRE II. It follows that in so far as the view that Mr Elcheikh had not suffered a 'specific injury' had an impact on the medical specialist's conclusions, either as to the cause, nature or extent of the impairment which had resulted from his work injury, or the contribution which the pre-existing condition had made to that impairment, the approach adopted was plainly wrong.

The Appeal Panel did not engage with this aspect of the challenge to the medical specialist's decision. It said that it agreed with the medical specialists reasoning and conclusions, without explaining why, or why this aspect of Mr Elcheikh's appeal failed. In the result it also erred in its approach to the resolution of this aspect of the appeal.

Did the Appeal Panel regard itself as having a function of determining causation of the permanent impairment following the injury when that was an issue of liability to be determined by the arbitrator and not capable of determination by the Appeal Panel?

On Mr Elcheikh's case the element of causation to be determined under s 323 is limited to the question of whether any proportion of the impairment identified under s 322 to have resulted from the work injury, was caused by a pre-existing condition. In this case that required a consideration of what proportion of the impairment was due to Scheuermann's disease. It did not require a determination of whether the impairment was due to the work injury. That was not a matter which could be the subject of a 'medical dispute' which could be referred to a medical specialist under the Act, given the definition of that term in s 4. Whether employment was a substantial contributing factor to the injury and thus compensable under the Workers Compensation Act was a matter for the arbitrator, who had already determined that question.

It followed, it was submitted, that in concluding that it was to give the plaintiff the benefit of the doubt that his work was the cause of any part of his impairment, the medical specialist misconceived his function, as did the Appeal Panel. They both had to approach their tasks from the starting point that this question had already been decided in Mr Elcheikh's favour, by the arbitrator.

The first defendant's case was that a fair reading of the medical specialist's reasons showed that he was not attempting to determine causation. It was submitted that the medical specialist's entire discussion was about the extent of any contribution to Ms Elcheikh's impairment as a result of his work, rather than his underlying condition, but that his assessment was not directed to the issue of liability. It was the extent of the contribution of the work injury, in respect of which he was being given the benefit of the doubt, when his permanent impairment was being assessed. That was how the Appeal Panel had read his reasons and it was entitled to agree with him as it did.

This submission, it seems to me, underscores the problem with the approach adopted by both the medical specialist and the Appeal Panel to the matters which they each had to determine in relation to Mr Elcheikh's claim and on appeal. The legislative scheme required the medical specialist to determine Mr Elcheikh's deductible proportion, not by reference to his workplace injury, but rather by determining what contribution the pre-existing condition had made to the permanent impairment which had resulted from that injury.

The starting point of a medical assessment conducted under s 322 is that the impairment being assessed resulted from an injury suffered at work. Under s 323, the medical specialist is not called upon to determine whether the resulting impairment was contributed to by that work. The assessment proceeds on the basis that it did.

As discussed in Cole v Wenaline Pty Limited at [30], in the case of a workplace injury caused by an exacerbation or acceleration of a pre-existing condition, what must be determined by a medical specialist under s 323 is:

Firstly, what the extent of the resulting impairment is.

Secondly, whether the pre-existing condition contributed to the impairment.

Thirdly, if it did, what proportion of the impairment was due to the pre-existing condition.

The statutory scheme recognises that this may be a difficult exercise and so provides a mechanism for its resolution, in s 323(2). If a medical specialist considers that it to be either difficult or costly to determine the contribution to the impairment which the pre-existing condition has made, the assumption provided by s 323(2) has to be applied by the medical specialist. That is, the contribution has to be assessed to be 10%, unless that is considered to be at odds with the available evidence.

That was not the way in which the medical specialist approached his task. Instead, he focussed on the contribution of the work to the impairment. This approach was challenged on appeal. The Appeal Panel did not consider or resolve that challenge. In the result it again fell into error.

Ground 2 - Did the Appeal Panel fail to address the requirements of s 323(2)?

As was submitted for the first defendant, it is unnecessary to delve into the submissions advanced for Mr Elcheikh as to whether the Appeal Panel made a constructive jurisdictional error in the absence of a jurisdictional fact, which was disputed by the first defendant. This ground of appeal may be more easily resolved.

Section 322(1) required that the assessment of the degree of Mr Elcheikh's permanent impairment for the purposes of the Workers Compensation Act be undertaken in accordance with the Guidelines. They required that he be assessed as falling within DRE category IV (see Guideline 4.33). Guideline 1.52 required that there be a deduction of 10% for his pre-existing condition, unless this was 'at odds with the available evidence'.

On its face, Guideline 1.52 does not precisely accord with s 323 which provides in this respect:

"(2) If the extent of a deduction under this section (or a part of it) will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction (or the relevant part of it) is 10% of the impairment, unless this assumption is at odds with the available evidence.

Note. So if the degree of permanent impairment is assessed as 30% and subsection (2) operates to require a 10% reduction in that impairment to be assumed, the degree of permanent impairment is reduced from 30% to 27% (a reduction of 10%)."

Guideline 1.52 provides:

"15.2 For the injury being assessed, the deduction is one tenth of the assessed impairment, unless this is at odds with the available evidence."

The Act must prevail over delegated legislation such as the Guidelines in the event of any inconsistency. In considering whether there is any real conflict between them, attention must be paid to the purpose of s 323, which is plainly facilitative of the difficult exercise which medical specialists are called upon to undertake, when determining what contribution an earlier injury or pre-existing condition might have made to a work injury for which an employer is liable under the Workers Compensation Act. It is also necessary to consider what s 323(3) and (4) provide:

"(3) The reference in subsection (2) to medical evidence is a reference to medical evidence accepted or preferred by the approved medical specialist in connection with the medical assessment of the matter.

(4) The WorkCover Guidelines may make provision for or with respect to the determination of the deduction required by this section."

So approaching Guideline 1.52, it is apparent that it is intended to provide a practical simplification of the requirements of s 323(2). The effect of s 323(2) is clearly that where the required assessment is difficult or costly, a deduction for the pre-existing injury or condition will be 10%, unless evidence which a medical specialist accepts or prefers, dictates a greater, or lesser, deduction.

While Guideline 1.52 suggests that even where there is no such difficulty, a deduction may be 10%, it makes it plain that such a deduction cannot result, if that is 'is at odds with the available evidence'. Consistently with s 323, in a case where there is no difficulty in identifying on the evidence which the medical specialist accepts or prefers, that a different deduction is required, a 10% deduction would plainly be 'at odds with the available evidence' and so could not be ordered.

In the result it seems to me that there is no real conflict between the two provisions.

This conclusion accords with the Explanatory note to the WorkCover Legislation Amendment Act 1996 (repealed), which enacted the predecessor to the current s 323(2). At page 8, the Explanatory note explained that a purpose of s 323's predecessor was:

"To avoid litigation seeking to determine the precise percentage of pre-existing disability the amendments provide that where it is clear that the worker did have some pre-existing disability but there is an absence of medical evidence to ascertain the percentage, 10% of the workers overall disability (or the bodily part of function affected) may be taken by the insurer assessing the claim or, in the case of a dispute, by a conciliator or the Compensation Court as the proportion to be deducted for that purpose."

Of course, in a case where there is a dispute as to whether the evidence is at odds with a 10% deduction, the medical specialist will have to resolve that dispute, identifying the evidence accepted or preferred, on which the conclusion reached rests. That accords with the obligation imposed by s 325(d) to give reasons for the decision reached.

In this case the medical specialist was clearly of the view, as I have said, that the major cause of the impairment was the underlying Scheuermann's disease. It must be accepted that in coming to a conclusion that the deduction should be 50%, it was not necessary for the medical specialist to refer expressly to the 10% deduction specified by s 323(2) and Guideline 1.52. Implicit in his conclusions was the view that the evidence was at odds with a 10% deduction.

Given the parties' competing cases, what was required, however, was an explanation of what evidence was accepted or preferred in reaching the conclusion that the deduction should be 50%. The simple statement that the medical specialist did not accept the reasoning of one expert and that he agreed with that of another, did not comply with the obligation to give reasons for the conclusions reached. Some further explanation had to be given. Nor was it sufficient to state that it was to give Mr Elcheikh the benefit of the doubt as to the contribution of his work to his impairment, to explain why a deduction of 50% was arrived at.

On its face this involved a departure from the statutory scheme, which itself gives workers 'the benefit of the doubt' in the case of difficulty in establishing contribution of a pre-existing condition to impairment resulting from a work injury. The statutory assumption provided by s 323(2) is that the contribution was 10%. That assumption can be displaced by evidence which the medical specialist considers is at odds with the assumption. In the event of a dispute over such evidence, the medical specialist must identify the evidence which is accepted or preferred and explain why a particular deduction has resulted.

Here the medical specialist's conclusions were challenged on appeal. For its part the Appeal Panel did not refer to or deal with this aspect of the challenge to his decision. Nor did it make any reference to the competing evidence on which the conclusion it reached that the medical specialist was correct, had rested. Nor did it give any other explanation as to why this aspect of the appeal had to fail.

In the result, it must again be concluded that the Appeal Panel erred in so approaching its task.

Orders

For the reasons given, I make the following orders:

(1) Quash the whole of the decision made by the Second Defendant, the Appeal Panel of the Workers Compensation Commission of New South Wales, on 29 August 2012 pursuant to s 328(5) of the Workplace Injury Management and Workers Compensation Act 1998, and the medical assessment certificate issued with the decision, which stated that Mr Elcheikh has whole person impairment of 12%.

(2) Declare that the decision and the medical assessment certificate are void.

(3) Remit the matter to the third defendant for the purpose of constituting an Appeal Panel under s 328(1) of the Workplace Injury Management and Workers Compensation Act to determine the matter according to law.

(4) Costs of the appeal to Mr Elcheikh as agreed or assessed.

(5) Exhibits may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.

**********

Decision last updated: 18 April 2013

Medium Neutral Citation:	Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liquidation) [2013] NSWSC 365
Hearing dates:	20 March 2013
Decision date:	18 April 2013
Jurisdiction:	Common Law
Before:	Schmidt J
Decision:	(1) Quash the whole of the decision made by the Second Defendant, the Appeal Panel of the Workers Compensation Commission of New South Wales, on 29 August 2012 pursuant to s 328(5) of the Workplace Injury Management and Workers Compensation Act 1998, and the medical assessment certificate issued with the decision, which stated that Mr Elcheikh has whole person impairment of 12%. (2) Declare that the decision and the medical assessment certificate are void. (3) Remit the matter to the third defendant for the purpose of constituting an Appeal Panel under s 328(1) of the Workplace Injury Management and Workers Compensation Act to determine the matter according to law. (4) Costs of the appeal to Mr Elcheikh as agreed or assessed. (5) Exhibits may be returned forthwith; any exhibits returned must be retained intact by the party or person that produced the material until the expiry of the time to file an appeal, or until any appeal has been determined.
Catchwords:	APPEAL - appeal against Workers Compensation Commission Appeal Panel decision - Court's power to make orders sought - legislative scheme - arbitrator's decision - medical specialist's decision - Appeal Panel's decision - whether Appeal Panel's reasons inadequate - whether there was jurisdictional error - degree of impairment - failure to determine degree of impairment due to pre-existing condition - specific injury - whether specific injury needed for diagnosis related estimate category - failure to consider extent of resulting impairment - failure to consider whether pre-existing condition contributed to impairment - failure to consider whether proportion of impairment was due to pre-existing condition - whether Appeal Panel failed to address s 323(2) - orders
Legislation Cited:	Supreme Court Act 1970 Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998 WorkCover Legislation Amendment Act 1996 (repealed)
Cases Cited:	Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372 Cole v Wenaline Pty Limited [2010] NSWSC 78 Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 Hanna v Department of Immigration, Multicultural and Indigenous Affairs [2004] NSWCA 275 Siddik v WorkCover Authority of NSW [2008] NSWCA 116; (2008) 6 DDCR 228 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Zuanic v Gypro-Tech (Australia) Pty Limited (in liq) [2006] NSWSC 739; (2006) 66 NSWLR 206
Category:	Principal judgment
Parties:	Zain Elcheikh (Plaintiff) Diamond Formwork (NSW) Pty Ltd (in liquidation) Bruce McManamey, Dr Brian Noll, Dr Tommasino Mastroianni as members of the Appeal Panel of the Workers Compensation Commission of New South Wales (Second Defendant) Registrar of the Workers Compensation Commission of New South Wales (Third Defendant)
Representation:	Counsel: Ms M Allars with Mr L Morgan (Plaintiff) Mr C Jackson (First Defendant) Solicitors: C&M Lawyers (Plaintiff) Moray & Agnew (First Defendant) IV Knight, Crown Solicitor's Officer (Second Defendant)
File Number(s):	2012/318123
Publication restriction:	None
Decision under appeal	Date of Decision: 2012-08-29 00:00:00 Before: Appeal Panel Arbitrator: Bruce McManamey Approved Medical Specialist: Dr Brian Noll Approved Medical Specialist: Dr Tommasino Mastroianni File Number(s): M1-002330/12