Fairfield City Council v Janet Brear - [2010] NSWSC 480

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CITATION: Fairfield City Council v Janet Brear & Ors [2010] NSWSC 480

HEARING DATE(S): 10/05/10

JUDGMENT DATE :
20 May 2010

JUDGMENT OF: Barr AJ at 1

DECISION: Quash the decision of the Medical Appeal Panel dated 4 September 2009.
Remit the matter to the Medical Appeal Panel for determination.
Order the plaintiff to pay the first defendant's costs.

CATCHWORDS: Workers' Compensation - assessment of impairment by injury - appeal - agreed basis of assessment - Appeal Panel adopts different basis without notice to the parties - oral hearing refused - denial of procedural fairness.

LEGISLATION CITED: Workplace Injury Management and Workers Compensation Act, 1998

CATEGORY: Principal judgment

CASES CITED: Ah-Dar v State Transit Authority of NSW (2007) 69 NSWLR 468
Levy v Victoria (1996-97) 189 CLR 599
Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208
Siddik v WorkCover Authority of NSW [2008] NSWCA 116

PARTIES: Plaintiff- Fairfield City Council
First defendant- Janet Brear
Second defendant-Appeal Panel
Third defendant-Registrar of the Workers' Compensation Commission

FILE NUMBER(S): SC 2009/298132

COUNSEL: Plaintiff-M.L.Williams SC, D. Saul
First defendant- L.Goodman
E.E.Welsh (for WorkCover Authory of NSW)

SOLICITORS: Plaintiff-Paul Macken, Leigh Virtue & Associates
First defendant- Michael Barnes, White Barnes
Second and third defendants- submitting appearance.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BARR AJ

THURSDAY, 20 MAY 2010

2009/298132 FAIRFIELD CITY COUNCIL v JANET BREAR & ORS
JUDGMENT

1 HIS HONOUR: The first defendant, Janet Brear, was employed by Fairfield City Council, the plaintiff. On 1 May 2006 the first defendant sustained an injury to her left ankle and made a claim under the Workplace Injury Management and Workers Compensation Act (1998) (“the Act”) for lump sum compensation. The process of administering such claims required the appointment of an approved medical specialist (“AMS”) under s 320 of the Act. Dr Rowe was appointed AMS and the claim was referred to him for assessment under s 322 of the Act. By s 323 the AMS was to make a deduction from the assessment to take account of any previous injury or pre-existing condition or abnormality. Dr Rowe had before him the written reports of two other orthopaedic surgeons, Dr Marnie of 24 August 2007 and Dr Bye of 8 April 2008. Dr Marnie had assessed the first defendant’s Whole Person Impairment (“WPI”) at 17 per cent and would have deducted 10 per cent for pre-existing injury. Dr Bye assessed WPI at 15 per cent after deducting 10 per cent for pre-existing injury. After making a reduction of 10 per cent for pre-existing injury, Dr Rowe assessed the First Defendants’ WPI at 11 per cent.

2 On 24 December 2008 the plaintiff appealed by application under s 327 against Dr Rowe’s assessment. By s328 an appeal is heard by an appeal panel constituted by two approved medical specialists and one arbitrator, chosen by the Registrar. By subs (2) the appeal is to be by way of review of the original medical assessment.

3 In its appeal the plaintiff cited as grounds that the assessment was made on the basis of incorrect criteria and that it contained a demonstrable error. They are two of the grounds provided for in clause 39 of the Guidelines. The Plaintiff requested the opportunity to present oral submissions to the appeal panel and annexed to its application submissions in support of its case. One such submission was that the appeal could not be determined on the papers in view of the nature of the grounds relied on. It was submitted that the AMS had applied incorrect criteria and proceeded to a demonstrable error by making an inappropriate assessment, inconsistent with the requirements of s 376 of the Act. It was also submitted that the allowance for pre-existing abnormality of 1/10^th was demonstrably erroneous in view of medical evidence that there was at the time of assessment substantial pre-existing osteoarthritic change, against the background of an earlier fracture. It was submitted that the deductible proportion should have been at least 90 per cent. It was submitted that the certificate of the AMS should be revoked and a new certificate issued assessing impairment of 4 per cent, reduced by a proportion between 90 and 100 per cent. The plaintiff did not ask for a medical re-examination of the first defendant.

4 By s 327(4) an appeal is not to proceed unless the Registrar is satisfied that on the face of the application and submissions made that at least one of the grounds of appeal has been made out. On 27 February 2009 the Registrar certified satisfaction that a ground of appeal had been made out, namely that error could be shown in relation to the assessment of the First Defendant’s impairment of the left lower extremity. The Registrar referred the appeal to a Medical Appeal Panel.

5 In the meantime the first defendant also applied for an appeal. The application related to a question of impairment from scarring, and the first defendant asked for a medical re-examination on that question.

6 By s 322(1)-

(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

7 The version of the Guidelines in force at the time of Dr Rowe’s assessment was the second edition. However, on 6 February 2009, after the plaintiff applied to appeal, the third edition of the Guidelines was promulgated. The Government Gazette of 5 February 2009 provided that it should apply to all assessments of a degree of permanent impairment that occurred on or after 6 February 2009.

8 By the third edition, the assessment of the first defendant’s impairment fell to be determined on a scale more generous to her than was provided by the second edition.

9 The Medical Appeal Panel sought further submissions from the plaintiff and the first defendant. The plaintiff filed written submissions as directed on 17 April 2009. By then the first defendant’s appeal had failed to satisfy the Registrar on necessary matters and the Registrar had declined to refer the matter to an Appeal Panel, so it was at an end. The plaintiff submitted that there should be no further medical examination of the first defendant. It submitted that the second edition of the WorkCover Guidelines should apply to the Appeal Panel’s assessment.

10 The first defendant also filed submissions, one of which was that the relevant edition of the WorkCover Guidelines was the second edition. The first defendant was stated to be “amenable to the Panel medically examining” her. However, it appears that that submission was made to preserve the first defendant’s position should she be permitted to re-agitate the question of impairment from scarring. In fact that matter, which had already come to an end, was never resurrected. The Appeal Panel did not consider it.

11 The Medical Appeal Panel arranged for the first defendant to be medically examined by one of its own members, Dr Crocker. The Registrar informed the first defendant and sent a copy of the letter to the solicitor for the plaintiff. It appeared, however, that the appointment made in the letter did not suit the first defendant and that another fixture would have to be made. In a letter of 22 January 2009 the solicitor for the plaintiff informed the Registrar that the plaintiff wished to be represented on any examination of the first defendant. By implication it asked to be informed of any date fixed.

12 Dr Crocker examined the first defendant on 7 August 2009 but no notice of that fixture was given to the plaintiff, and it was not represented at the examination.

13 After that the Appeal Panel considered the matter. It considered the written submissions filed. No notice was given to the plaintiff and it was not represented. There were no oral submissions. The Appeal Panel made its decision, which was published on 4 September 2009. Notwithstanding the submissions of both sides, the Appeal Panel determined that the appropriate edition of the Guidelines was the third edition. It accepted and acted on the findings of Dr Crocker even though it had given the parties no opportunity to make oral submissions about them. The Panel’s reasons for denying the plaintiff that opportunity were stated as-

Having considered the evidence, the Panel is satisfied that the matter can properly be determined without an assessment hearing.

14 Dealing with the question which edition of the Guidelines should apply, the Panel acknowledged the submissions of both sides that it should be the second. It went on to consider whether its determination of the appeal by way of review was an assessment so as to come within the purview of the third edition of the Guidelines. It held that it was an assessment. It held that whether the appeal were a hearing de novo or a re-hearing the result would be the same and the third edition of the Guidelines would therefore apply. It applied the scale applicable under the third edition and substituted the resulting assessment for the assessment appealed from.

15 In its summons filed on 3 December 2009 the plaintiff claims the following orders-

2. An Order that the decision of the Medical Appeal Panel be quashed.

3. Costs.

16 The first defendant filed a defence in which she submitted to the orders of the Court save as to costs. Counsel represented the first defendant on the hearing of the summons, but only to make submissions about costs. The second and third defendants, who are the Appeal Panel and the Registrar of the Workers’ Compensation Commission respectively, have filed submitting appearances.

17 When the hearing commenced, Ms Welsh sought leave to appear as amicus curiae, representing the WorkCover Authority. I was concerned that the attitude of the First Defendant on the substantive orders sought by the Plaintiff had produced the result that there was no contradictor. It seemed possible that the Court might need assistance on the applicable law, since all the submissions, other than anything said about costs, were going to be made only on behalf of the plaintiff. I therefore granted leave to Ms Welsh to appear as amicus curiae and to assist the Court on the applicable law. However, I did not allow Ms Welsh to make submissions on the facts or on the merits of the plaintiff’s claim, since they were matters which could have been taken up by the first defendant. No reason was offered why that had not happened. See the judgment of Brennan CJ in Levy v Victoria (1996-97) 189 CLR 599 at 605.

18 The plaintiff asserts that the appeal panel committed the following errors, justifying the orders sought-

“(a) it denied the request for an oral hearing, without any adequate reasoning;

(b) one of the Panel members, Dr Crocker, conducted his own examination of Brear, without giving the parties the opportunity to consider or make submissions on the findings;

(c) the Panel ‘accepted in full’ and acted upon the findings of Dr Crocker, without reference to the parties and without reference to the evidence which was the subject of the review;

(d) the Panel relied upon an incorrect set of WorkCover Guidelines;

(e) the Panel conducted a hearing de novo, rather than a review as required by the legislation.”

Consideration

19 I will deal together with the first three of the asserted errors, since they all raise the same principle. The appeal by way of review under s 328 was considered by McColl JA in Siddik v WorkCover Authority of NSW [2008] NSWCA 116. At [101] her Honour, with whom the other members of the Court of Appeal agreed, held that such an appeal may, depending on circumstances, involve either a hearing de novo or a re-hearing. Her Honour stated that an appeal panel may even consider not grounds “let in” by the Registrar under s327, if it gives the parties an opportunity to be heard.

20 The plaintiff had submitted that there was no need for a further medical examination of the first defendant. Although the first defendant indicated a willingness to be examined again, the reason for that seems to have been only her desire, if she should get the chance, to re-institute her claim for an allowance for impairment from scarring.

21 It seems to me that the decision of the Appeal Panel to have one of its own members re-examine the first defendant without giving the plaintiff the opportunity it had requested to be present at the re-examination and to have the result of that examination before it for consideration gave rise to a particular need to consider or to reconsider the plaintiff’s submission that it should be permitted to make oral submissions to the Appeal Panel.

22 The Court is not here concerned with any question whether the opinion formed by Dr Crocker after the re-examination was reasonable or not or whether the Appeal Panel was entitled ultimately to rely upon it or not. The point is that the Appeal Panel had gone out of its way to receive evidence, and that from one of its own members, of which the plaintiff knew nothing and which the plaintiff could not test.

23 In the circumstances I think that the reasons given by the Appeal Panel for proceeding to the determination without an assessment hearing were inadequate.

24 A party has a right to know the evidence that is being presented and on which a determination may possibly be made against its interests. A party is entitled to make oral submissions about such matters. In Ah-Dar v State Transit Authority of NSW (2007) 69 NSWLR 468, an Appeal Panel had dealt with an appeal on the papers, in the mistaken belief that both sides had consented to that manner of determination. In fact the plaintiff had objected to the determination of the matter without an assessment hearing. The plaintiff had filed written submissions with the Appeal Panel. Bell J said this at [67-9]-

“[67] It may be accepted that it was open to the Appeal Panel to determine that the appeal would proceed without an assessment hearing. However, there is force to the complaint that the Appeal Panel’s discretion to decide whether to hold an assessment hearing was not properly exercised. It seems to me that it was not exercised at all because the Appeal Panel, wrongly, understood that each of the parties to this medical dispute wanted the appeal to be determined on the papers.

[68] The Appeal Panel’s failure to take into account the plaintiff’s wish to have an assessment hearing and make oral submissions would only justify setting its determination aside if it was bound to take this consideration into account: Minister for Aboriginal Affairs v Peko-Wallsend Limited (1985-1986) 162 CLR 24 Mason J at 39. In determining whether the Appeal Panel was bound to take this consideration into account it is necessary to have regard to the functions of the appeal panel under the Act. The appeal panel exercises a function that is judicial in nature. Its determination has potentially significant consequences for the parties. An assessment hearing offers the injured worker an opportunity to be legally represented and to have oral submissions advanced on his or her behalf. A party may be permitted to cross-examine a witness at an assessment hearing. The proceedings are recorded. An assessment hearing may offer important procedural protections to a party to a medical dispute.

Craig

25 Her Honour concluded that the resulting determination was attended by jurisdictional error.

26 Concerning the right of parties to be heard, there is a long line of authority dealt with in the judgments of each of the members of the Court of Appeal in Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208. Mason P said at [7]-

The Frontiers of Liability

‘How can the court know with any certainty that evidence and argument from a party would have made no difference? It simply cannot know in the sense of knowledge as justified belief. Facts, truth, insight, all emerge from argument and discourse, and the clearest case can easily give way to doubt. Megarry V-C put the point well: “ … the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change.”[ John v Rees [1970] Ch 354 at 402]

27 The members of the Appeal Panel appreciated, as the reasons for determination make clear, that they were determining the matter in the absence of the parties, who had both submitted that the second edition of the Guidelines applied. The Panel must have assumed, and to my mind should have assumed, that both sides would expect that the determination would rest on the application of the second edition of the Guidelines. Instead, the Panel, without notice to the parties, dealt with the matter on a different basis.

28 The question whether the second or the third edition should apply depended upon the answers to two antecedent questions. The first was whether the Panel’s determination of the appeal amounted to an “assessment”. In its reasons the Panel acknowledged that. That, it seems to me, was a matter on which minds might have differed. The Court is not here concerned with whether the Panel came to the right or the wrong conclusion but with its denial of the plaintiff’s right to make submissions on the question.

29 In Seltsam Pty Ltd v Ghaleb the plaintiff was one of two respondents in the Dust Diseases Tribunal. The defendant had proceeded against Seltsam and the other party, asserting that they had caused him a relevant injury. The proceedings between the defendant Ghaleb and the other employer was settled. At the hearing the defendant Ghaleb conceded that the other party had caused him to suffer the injury. Both parties conducted the case on an understanding that the verdict would make allowance for some responsibility on the part of the other employer. Without notice to the parties, the trial judge, in delivering judgment, held Seltsam Pty Ltd wholly responsible for the defendant’s injury.

30 On appeal Ipp JA, with whom other members of the Court agreed, said this at [69]-[79]-

Stead v State Government Insurance Commission

Counsel did not then pursue the matter. When the trial judge delivered judgment, it became apparent that he had indeed accepted the doctor’s evidence on the point in question. The ground of appeal before the High Court was that, by stopping the plaintiff’s counsel from addressing on the topic of Dr Scanlon’s evidence, the judge had deprived the plaintiff of an opportunity of presenting argument on a vital issue in the case.

‘The general principle applicable in the present circumstances was well expressed by the English Court of Appeal … in Jones v National Coal Board [1957] 2 QB 55 at 67 in these terms:

‘[A]n appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility.

[71] The High Court pointed out that where the denial of justice affects the entitlement of a party to make submissions on an issue of fact, it is more difficult for a Court of Appeal to conclude that compliance with the requirements of natural justice could have made no difference. Their Honours said (at 145 to146) that where there had been a denial of natural justice relevant to a finding of fact an appellate court should proceed with caution:

‘It is no easy task for a Court of Appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.’

‘At the trial the critical question on the issue of causation was whether Dr Scanlon’s testimony should have been accepted in preference to the appellant’s expert witnesses … It was an issue pre-eminently suitable for determination by the primary judge who had an advantage over the Full Court in seeing and assessing the witnesses. We do not see how the Full Court, denied the important advantage of seeing and assessing the witnesses, could satisfactorily conclude that had the appellant’s counsel been given a reasonable opportunity to prevent submissions on the issue, it could have made no possible difference to the result.’

‘All that the appellant needed to show was that the denial of natural justice deprived him of the possibility of a successful outcome. In order to negate that possibility, it was, as we have said, necessary for the Full Court to find that a properly conducted trial could not possibly have produced a different result.’

Stead

;

(unreported, NSWCA, 11 October 1995) and

. In

the respondent conceded that the trial judge had denied procedural fairness to the appellant but submitted that no substantial prejudice or miscarriage of justice had occurred. Tobias JA, with whom Sheller JA and Pearlman AJA agreed, said:

Pantorno v R

‘ When the parties to an adversarial proceeding agree on a proposition of law and conduct their cases on that basis, their agreement does not bind the trial judge. If the judge determines the law to be different, he may apply the law as he determines it to be, but he must inform the parties of the view he has formed when that is necessary to give them an opportunity to address new issues arising from the judge’s departure from the proposition of law on which the case was conducted. Otherwise both parties are taken by surprise: see Fairmount Ltd v Environment Secretary [1976] 1 WLR 1255 at 1265–1266.’

[76] Pantorno was followed in Monaco v Arnedo Pty Ltd (unreported, Full Court, SCt of WA, 6 September 1994). The latter case involved the construction of the phrase “floor area” in the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). The parties conducted the trial on the basis that floor area was to be construed in accordance with a certain formula outside the Act and the evidence led by them was designed to support only their respective contentions in that regard. The Commissioner, who presided over the trial, without informing the parties of his intention to do so, held that the formula was inappropriate and determined the floor area in accordance with a different construction based on the ordinary meaning of the words in the Act. Neither party was given an opportunity to lead new evidence in accordance with the construction held by the Commissioner to be correct, or to recall for cross-examination witnesses who had already testified, so as to clarify the issues that were relevant to the Commissioner’s construction. The Court (Malcolm CJ, Kennedy and Ipp JJ) held that the Commissioner should have informed the parties of his decision to decide the case upon a concept fundamentally different to the submissions advanced by the parties, on which they had based their evidence, cross-examination and conduct of the case, generally. The Court considered that, on that basis alone (that is, without hearing evidence), a substantial injustice had occurred, set aside the judgment and ordered a retrial.

Wrigley Co Pty Ltd v Hollands

Monaco v Arnedo Pty Ltd

Australian Wire Industries Pty Ltd v Nicholson

.

The award was set aside and the proceedings were remitted to the Compensation Court.

[79] A failure so to inform the parties will ordinarily result in a denial of procedural fairness. A new trial will be ordered if a party is not afforded a fair trial in circumstances where a properly conducted trial might possibly have produced a different result. It will not ordinarily be necessary to lead evidence to prove that the denial of procedural fairness had the potential to affect the outcome; in most cases the facts will speak for themselves.”

31 The second question which arose was whether the appeal was properly to be regarded as a hearing de novo or as a re-hearing and, depending on the answer to that question, whether the Guidelines applicable at the time of Dr Rowe’s assessment, the one appealed from, should apply or whether it should be the edition current at the time of the determination of the appeal.

32 Minds might differ about the answers to those questions also. Because the Plaintiff had no way of knowing that the Appeal Panel was to depart from the basis of the applicability of the second edition of the Guidelines, according to the common ground of both sides, it seems to me that the Plaintiff was denied procedural fairness. It seems to me that the Appeal Panel, as soon as it contemplated the possibility that the third and not the second edition of the Guidelines was that which applied, ought to have informed the parties and afforded them an opportunity to make submissions. The failure to do so amounted, I think, to a denial of procedural fairness.

33 In my opinion the plaintiff has established on the first three grounds an entitlement to have this Court quash the determination of the Appeal Panel.

34 I do not think it necessary to deal with the remaining questions posed by the plaintiff, namely, whether the Panel relied on inapplicable Guidelines and whether the Panel erred in conducting a hearing de novo rather than a review. There are two reasons for this.

35 The first is that following the orders which I intend to make, the plaintiff’s appeal will have to be dealt with once again. If the determination of the appeal is attended by error, the plaintiff will have its rights.

36 The second reason relates to the way in which the proceedings was conducted before me. As I have said, the first defendant played no part in the debate about whether the Plaintiff should have its orders other than orders for costs against the first defendant. The reserved questions raise matters quite different from those on which the plaintiff has succeeded. They are matters on which the Plaintiff has not put any substantial submissions and, in the circumstances I have explained, there has been no contradictor. It is not necessary to answer the questions in order to decide whether to make the orders sought.

37 It seems to me to be inappropriate to answer those questions.

38 The Plaintiff does not seek costs against the second or the third defendant. It does seek costs against the first defendant. In the notice filed on 17 December 2009 the first defendant, having appeared, made this statement of submission-

“Janet Brear, first defendant, submits to the making of all orders sought, and the giving or entry of judgment in respect of all claims made, save as to costs.”

39 The plaintiff’s submission in this Court was that it was not enough for the first defendant, in order to avoid the risk of an order for costs against her, merely to submit. Consent was necessary for that. Mr Williams submitted that if there had been a consent, rather than a submission, orders could have been made by consent without a hearing. So the first defendant’s attitude had made necessary a hearing that was otherwise unnecessary.

40 I do not accept that submission. The orders sought included a declaration that the decision of the Appeal Panel involved error on the face of the record and jurisdictional error. That is not a matter, I think, that it would have been appropriate to provide for, as it were unquestioningly, by giving effect to agreed orders. It seems to me that the Court would not have been justified in making the orders without a proper examination of the evidence and the law. That is what happened. In view of the fact that counsel for the first defendant took no part in the debate on the merits, the hearing was no longer than it would otherwise have been.

41 In the circumstances the plaintiff ought not to have the costs order it has sought against the first defendant. Consequently it ought to pay the first defendant’s costs.

42 I make the following orders-

1. Quash the decision of the Medical Appeal Panel dated 4 September 2009,

2. Remit the matter to the Medical Appeal Panel for determination .

**********

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Citations

Fairfield City Council v Janet Brear [2010] NSWSC 480

Most Recent Citation

CSR Limited v Jamie Leonard Smith [2011] NSWSC 68

Cases Citing This Decision

1

CSR Limited v Jamie Leonard Smith [2011] NSWSC 68

Cases Cited

6

Statutory Material Cited

1

Siddik v Workcover Authority of NSW [2008] NSWCA 116

Dar v State Transit Authority of NSW [2007] NSWSC 260

CITATION:	Fairfield City Council v Janet Brear & Ors [2010] NSWSC 480
HEARING DATE(S):	10/05/10
JUDGMENT DATE :	20 May 2010
JUDGMENT OF:	Barr AJ at 1
DECISION:	Quash the decision of the Medical Appeal Panel dated 4 September 2009. Remit the matter to the Medical Appeal Panel for determination. Order the plaintiff to pay the first defendant's costs.
CATCHWORDS:	Workers' Compensation - assessment of impairment by injury - appeal - agreed basis of assessment - Appeal Panel adopts different basis without notice to the parties - oral hearing refused - denial of procedural fairness.
LEGISLATION CITED:	Workplace Injury Management and Workers Compensation Act, 1998
CATEGORY:	Principal judgment
CASES CITED:	Ah-Dar v State Transit Authority of NSW (2007) 69 NSWLR 468 Levy v Victoria (1996-97) 189 CLR 599 Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 Siddik v WorkCover Authority of NSW [2008] NSWCA 116
PARTIES:	Plaintiff- Fairfield City Council First defendant- Janet Brear Second defendant-Appeal Panel Third defendant-Registrar of the Workers' Compensation Commission
FILE NUMBER(S):	SC 2009/298132
COUNSEL:	Plaintiff-M.L.Williams SC, D. Saul First defendant- L.Goodman E.E.Welsh (for WorkCover Authory of NSW)
SOLICITORS:	Plaintiff-Paul Macken, Leigh Virtue & Associates First defendant- Michael Barnes, White Barnes Second and third defendants- submitting appearance.