Guzman v Trade West Pty Limited - [2017] NSWWCCPD 44

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Guzman v Trade West Pty Ltd [2017] NSWWCCPD 44
APPELLANT:	Luis Guzman
RESPONDENT:	Trade West Pty Ltd
INSURER:	QBE Workers Compensation (NSW) Ltd as agent for icare NSW
FILE NUMBER:	A1-1847/17
SENIOR ARBITRATOR:	Ms C McDonald
DATE OF ARBITRATOR’S DECISION:	8 June 2017
DATE OF APPEAL DECISION:	23 October 2017
SUBJECT MATTER OF DECISION:	Section 352(3A) of the Workplace Injury Management and Workers Compensation Act 1998 – leave to appeal an interlocutory decision, dismissal of proceedings pursuant to s 354(7A) of the Workplace Injury Management and Workers Compensation Act 1998; the bifurcated system and application of Abou-Haidar v Consolidated Wire Pty Ltd [2010] NSWWCCPD 128; 12 DDCR 307 and associated authorities
PRESIDENTIAL MEMBER:	Deputy President Michael Snell
HEARING:	On the papers
REPRESENTATION:	Appellant:	Sanford Legal
Respondent:	Sparke Helmore Lawyers
ORDERS MADE ON APPEAL:	1. Leave to appeal is granted pursuant to s 352(3A) of the Workplace Injury Management and Workers Compensation Act1998. 2. The Certificate of Determination dated 8 June 2017 is revoked, and the following decision is made in its place: “1. The matter is remitted to the Registrar, for referral to an Approved Medical Specialist, to assess whole person impairment (cervical spine and right upper extremity - shoulder), resulting from injury on 1 August 2006. 2. The Approved Medical Specialist is to have access to the material that was in evidence before the Senior Arbitrator. 3. The Approved Medical Specialist should, if possible, be Dr Neil Berry, who previously assessed the appellant on 1 November 2011.”

INTRODUCTION

This appeal is against a decision of a Senior Arbitrator dismissing the proceedings, pursuant to s 354(7A)(b) of the Workplace Injury Management and Workers Compensation Act1998 (the 1998 Act), on the basis that they were misconceived and lacking in substance. The proceedings involve a claim for further lump sum compensation, which Luis Guzman (Mr Guzman/the appellant) seeks to have referred to an Approved Medical Specialist (AMS) for assessment pursuant to Pt 7 of Ch 7 of the 1998 Act. For reasons which follow, the appeal succeeds.

BACKGROUND

Mr Guzman developed problems in his right shoulder and cervical spine in about the late 1990s, when working with TNT Equipment. He resigned that employment, and made a claim for compensation. He was subsequently employed for short periods with other companies, the last of which was Trade West Pty Ltd (Trade West/the respondent). He said that his symptoms “seemed to deteriorate a little” before he was retrenched by Trade West, in August 2006.
Mr Guzman was assessed by Dr Bodel, orthopaedic surgeon, at the request of his solicitors. Dr Bodel, reporting on 15 March 2011, said that the “nature and conditions” of Mr Guzman’s duties with Trade West were a substantial contributing factor by way of aggravation, of pre-existing pathology. Dr Bodel assessed Mr Guzman as suffering whole person impairment (WPI) of 6% in respect of the cervical spine, and 5% in respect of the right upper extremity. The right upper extremity assessment was reduced to 2% after deduction of 3/5 pursuant to s 323 of the 1998 Act, yielding a combined total of 8% WPI.
Mr Guzman’s claim for lump sum compensation against Trade West, based on this assessment, was referred to Dr Berry, an Approved Medical Specialist (AMS). Dr Berry’s Medical Assessment Certificate (MAC), dated 26 October 2011, certified WPI of 6% for the cervical spine and 3% for the right upper extremity. Dr Berry applied a deduction pursuant to s 323 of 2/3 in respect of both of these body parts, yielding WPI of 2% and 1% respectively, a combined total of 3% WPI. The Commission issued a Certificate of Determination dated 6 December 2011 for $3,750 in respect of 3% WPI, resulting from injury on 1 August 2006.
Mr Guzman was assessed, at his solicitors’ request, by Dr Woo, orthopaedic surgeon, on 21 June 2016. Dr Woo reported on 13 September 2016. He assessed WPI at 6% for the cervical spine and 3% for the right upper extremity. He reduced each of these figures by 1/10 pursuant to s 323, yielding figures of 5% and 3% respectively, a combined total of 8% WPI. Mr Guzman’s solicitors made a claim for lump sum compensation on his behalf against Trade West, on 19 September 2016. The sum claimed was $6,250 in respect of 5% WPI, being the difference between the assessment by Dr Woo of 8%, and the percentage previously compensated of 3%.

THE ARBITRAL PROCEEDINGS AND DECISION

Trade West’s insurer did not respond to the claim within an appropriate time, and Mr Guzman commenced the current proceedings. The insurer lodged a Reply which denied that Mr Guzman suffered from any WPI, and asserted that the claim was “frivolous, misconceived or lacking in substance and should be dismissed”. The Reply included written submissions on the dismissal application. It argued that Mr Guzman’s own evidence did not support the proposition that there was “any further WPI since the previous award”. Leaving the issue of deductions to one side, WPI was now assessed by Dr Woo at 8%, whereas the AMS in the MAC had assessed WPI at 9%. It followed that the “only issue sought to be litigated is the extent of the s 323 deduction contained in the earlier MAC”. Trade West argued that any attempt to overturn that deduction should have been by way of appeal to a Medical Appeal Panel, pursuant to s 327 of the 1998 Act, in the earlier proceedings, which was not done. Trade West submitted the current proceedings were “unmeritorious, frivolous, misconceived or lacking in substance and should be dismissed pursuant to Section 354(7A) of the WIM Act”.
Trade West referred to Caulfield v Whelan Kartaway Pty Ltd[1] in support of the availability of the relief that it sought.
[1] [2014] NSWWCCPD 34 (Caulfield).
Mr Guzman’s solicitors, following a telephone conference in the matter, lodged written submissions in response on 25 May 2017. They submitted that the Commission could not award “permanent impairment compensation unless the degree of permanent impairment has been assessed” by an AMS (s 65(3) of the Workers Compensation Act 1987 (the 1987 Act). The dispute about both “the degree of permanent impairment”, and whether any proportion of such impairment is due to “any previous injury or pre-existing condition or abnormality, and the extent of that proportion”, fell within the definition of a ‘medical dispute’ in s 319 of the 1998 Act. The appellant submitted it was obligatory that the dispute about the degree of permanent impairment, and any deductible proportion pursuant to s 323 of the 1998 Act, be referred to an AMS. The resulting MAC is then “conclusively presumed to be correct” on these matters.
The Senior Arbitrator determined the matter ‘on the papers’, in a decision dated 8 June 2017.[2] She summarised the evidence and submissions. She noted that Dr Woo’s assessment, before deduction, was less than that of the AMS in the earlier proceedings. She noted that Dr Woo did not give reasons for applying a deduction of 1/10. The dispute only arose because of the “lesser deduction”. She accepted Mr Guzman’s submission that the Commission lacked jurisdiction to determine a ‘medical dispute’ within the meaning of s 319 of the 1998 Act. She referred to Caulfield[3] and Abou-Haidar v Consolidated Wire Pty Ltd[4], on the application of s 354(7A) of the 1998 Act. She said that the “lack of any reasoning” by Dr Woo, for his 1/10 deduction, lent force to the conclusion that Mr Guzman’s was an “unmeritorious application”, which sought to cavil with the deduction made by the AMS in the earlier proceedings.
[2] Guzman v Trade West Pty Ltd [2017] NSWWCC 133 (the reasons).
[3] Caulfield at [82].
[4] [2010] NSWWCCPD 128; 12 DDCR 307 (Abou-Haidar).
The Senior Arbitrator said that there was no substance to Mr Guzman’s argument that there was a difference in assessing the deductible proportion on the basis of the fourth edition of the Guides[5], rather than the third; the most recent edition does not impose “a different methodology”. She referred to an argument that dismissal of the proceedings would prevent Mr Guzman from pursuing the one further claim available to him pursuant to cl 11 of Sch 8[6]. She said, “without deciding the question”, that “claim means a valid claim and not merely a demand for compensation”, and a claim “may not be resolved” by a decision under s 354(7A) of the 1998 Act.[7]
[5] NSW Workers Compensation Guides for the Evaluation of Permanent Impairment, 4 ed, 1 April 2016.
[6] Workers Compensation Regulation 2016 (the Regulations).
[7] The reasons at [31], citing Woolworths v Stafford [2015] NSWWCCPD 36.
The Senior Arbitrator concluded that the claim was “misconceived and lacking in substance”, and she dismissed it pursuant to s 354(7A)(b) of the 1998 Act.

ON THE PAPERS

Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Nos 1 and 6; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum in s 352(3) of the 1998 Act have been met.
Section 352(4) of the 1998 Act provides that an “appeal can only be made within 28 days after the making of the decision appealed against”. The decision was dated 8 June 2017. Mr Guzman’s Application to Appeal was received and registered in the Commission on 6 July 2017, within time. The Registrar’s Delegate issued a Direction dated 12 July 2017, advising that the document did not comply with the procedural requirements of s 352 of the 1998 Act, in that it did not set out submissions separately addressing each of the grounds of appeal. The Direction required that an Amended Application be filed on or before 26 July 2017, and only then would the Commission set a timetable for submissions.
Mr Guzman’s solicitors lodged an Amended Application on 18 July 2017. On 19 July 2017 the Registrar’s Delegate advised Mr Guzman’s solicitors that the Amended document did not adequately comply with the Direction, and reiterated the requirement that an Amended document complying with the Direction be lodged by 26 July 2017. Ultimately, a Further Amended Application was lodged on 2 August 2017 (in compliance with a further Direction issued by the Registrar’s Delegate on 25 July 2017), and a proceedings timetable was issued. References in this decision to the Application to Appeal are to the further amended document lodged on 2 August 2017.
The Notice of Opposition lodged by Trade West states that the appeal was filed on 2 August 2017, outside the timeframes for an appeal, the delay being due to Orders of the Commission extending the time for filing. Trade West states that there is no prejudice, and it does not object to time to appeal being extended.
It is unnecessary to extend time. Part 16 r 16.2(11) of the Rules[8] provides “[f]or the purposes of section 352 (4) of the 1998 Act, an appeal is made when the application is registered by the Registrar.” Part 1 r 1.4(2) of the Rules provides “[a] document is registered for the purposes of these rules when it has been accepted by the Registrar.” It is clear, from the Commission file, that the Application to Appeal, when initially lodged on 6 July 2017, was sealed and registered. The threshold requirement as regards time in s 352(4) is satisfied.
[8] Workers Compensation Commission Rules 2011 (the Rules).

INTERLOCUTORY DECISION AND LEAVE

Section 352(3A) of the 1998 Act provides:
“There is no appeal under this section against an interlocutory decision except with the leave of the Commission. The Commission is not to grant leave unless of the opinion that determining the appeal is necessary or desirable for the proper and effective determination of the dispute.”
Mr Guzman submits that “on one view the decision appealed against is technically interlocutory and leave is sought”. He submits the decision was “in the nature of a strike-out, and thus had a final consequence”. He submits leave is necessary or desirable for the proper and effective determination of the dispute.
Trade West submits that the decision was “not a final decision and the Appellant’s rights to a further lump sum claim are maintained”. The respondent submits that leave is required, and opposes it.
The question posed is “Does the judgment or order, as made, finally dispose of the rights of the parties?”[9] Neither party actively argues that the decision is not interlocutory. Shams v Venue Services Group Pty Ltd[10] involved an appeal against a decision by an arbitrator striking a matter out on the basis that, due to procedural deficiencies in the making of a claim, the proceedings were a nullity. The worker argued that the dismissal of any proceedings was “final in nature and interlocutory orders relate only to interim decisions of a court or tribunal”.[11] Rejecting this argument, Roche DP, after considering authority[12], described the strike out decision as “clearly an interlocutory order”. The Deputy President said “an order dismissing proceedings, without a hearing on the merits, involves no determination of the parties’ rights”[13]. Applying these principles, the decision dated 8 June 2017 is interlocutory, and requires leave pursuant to s 352(3A) of the 1998 Act.
[9] Licul v Corney [1976] HCA 6; (1994) 180 CLR 213 (Licul v Corney) at 225 (per Gibbs J).
[10] [2013] NSWWCCPD 57 (Shams).
[11] Shams at [35].
[12] Little v State of Victoria(1998) 4 VR 596, Wickstead v Browne [1992] NSWCA 272; 30 NSWLR 1 at 11.
[13] Shams at [39]. See also Spears v Department of Ageing, Disability & Homecare of NSW [2010] NSWWCCPD 35; 12 DDCR 1 (Spears) at [28]-[29] and the cases cited therein.
This requires consideration of whether “determining the appeal is necessary or desirable for the proper and effective determination of the dispute”.[14] In Collingridge v IAMA Agribusiness Pty Ltd[15] Roche DP said that this “requires a consideration of the nature of the dispute and the orders sought on appeal.”[16]
[14] Licul v Corney.
[15] [2011] NSWWCCPD 31; 10 DDCR 174 (Collingridge).
[16] Collingridge at [17].
Trade West’s attack on Mr Guzman’s claim, before the Arbitrator, went essentially to the claim’s alleged lack of strength on its merits. Leaving to one side the extent of any deductible proportion pursuant to s 323 of the 1998 Act, the appellant’s permanent impairment resulting from the conceded injury to his cervical spine and right upper extremity was assessed at:
(a)    11% by Dr Bodel on 15 March 2011, which grounded the original claim;
(b)    9% by Dr Berry, AMS, in the MAC dated 1 November 2011, the basis of the award dated 6 December 2011, and
(c)    8% by Dr Woo on 13 September 2016, the basis of the current claim.

There was actually a decrease, rather than any increase, in the assessed level of permanent impairment. The permanent impairment assessment of Dr Woo exceeded the assessment on which the earlier award was based, because Dr Woo assessed the deductible proportion at 1/10, whereas the AMS in the earlier MAC assessed it at 2/3. Trade West argued that the current proceedings “are an attempt to overturn the earlier MAC findings in relation to the s 323 findings”. The respondent submits this should have been done by way of an appeal against the MAC decision pursuant to s 327 of the 1998 Act. No such appeal was brought.
Frequently when an interlocutory decision is at issue on appeal, it is an issue that could be later agitated on appeal following a final determination, even if leave were not granted at the interlocutory stage.[17] Trade West argues that, if leave is not granted, Mr Guzman remains entitled to pursue a further lump sum claim. This is true to a point. Mr Guzman has made the only claim for further lump sum compensation which is available, on the evidence which he currently has. That claim was dismissed pursuant to s 354(7A)(b) of the 1998 Act. If he were to simply bring the same claim again, there would be a high risk, having regard to the result in the current proceedings, that a second such claim would meet the same fate. It cannot be assumed that Mr Guzman will, at some unspecified point in the future, be assessed as suffering a greater level of permanent impairment (leaving issues under s 323 of the 1998 Act to one side) than is assessed now. Although the parties’ rights have not been finally determined, from a practical point of view the decision dated 8 June 2017 may well conclude the appellant’s opportunity to seek determination of the claim, on the available evidence, on its merits.
[17] See, for example, Dunphy v Boney [2010] NSWWCCPD 111.
The factual difficulties in Mr Guzman’s current claim are apparent. The Senior Arbitrator correctly accepted that it was not within the jurisdiction of an arbitrator (as opposed to an AMS) to determine a ‘medical dispute’[18]. The appellant argues that what was before the Senior Arbitrator was a ‘medical dispute’ that required referral to an AMS. The order Mr Guzman seeks on appeal is remitter to the Registrar, for referral to an AMS for assessment. The respondent argues that it was an “unmeritorious claim” that was “liable to be dismissed” pursuant to s 354(7A)(b)[19]. It is “necessary” that this argument be resolved, if the dispute is to be “determined”.
[18] The reasons at [25].
[19] Relying on Abou-Haidar at [65].
The order dismissing the proceedings did not involve “determination of the dispute”; there was “no determination of the parties’ rights”[20]. The amount of additional compensation claimed is modest. It is desirable, consistent with the ‘System objectives’ of the legislation, that the issue of whether Mr Guzman has any additional entitlement to lump sum compensation be dealt with in the claim which he has brought, rather than possibly at some indeterminate time in the future, in another set of proceedings.[21]
[20] Shams at [39].
[21] The 1998 Act, s 3.
Leave to appeal is granted pursuant to s 352(3A) of the 1998 Act.

THE NATURE OF THE APPEAL

This appeal is governed by the provisions of s 352 of the 1998 Act. The nature and scope of such an appeal is as provided by s 352(5):
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
The powers of the Commission upon conduct of such an appeal are defined by the provisions of s 352(7):
“On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.”

THE GROUNDS OF APPEAL

The following grounds are raised:
(a) the Arbitrator misconstrued s 354(7A)(b) of the 1998 Act (Ground No 1);
(b) the Arbitrator took irrelevant considerations into account in refusing to refer a ‘medical dispute’ to an AMS (Ground No 2), and
(c) the Arbitrator exceeded her powers by determining, or purporting to determine, a ‘medical dispute’ as defined by s 319 of the 1998 Act (Ground No 3).

GROUND NO 1 – SECTION 354(7A)(b) OF THE 1998 ACT

The Provision

Section 354(7A) reads:
“The Commission may dismiss proceedings before it before or during the conduct of proceedings:
(a)    if it is satisfied that the proceedings have been abandoned, or
(b)    if it is satisfied that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance, or
(c)    for any other ground of dismissal specified in the Rules.”

The Appellant’s Submissions

Mr Guzman’s submissions refer to the judgment of Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW)[22] as the “classic statement as to how to approach what is, in effect, a strike out application”.
[22] [1964] HCA 69; 112 CLR 125 (General Steel).
His submissions also refer to Spears[23], where Roche DP applied General Steel to an application in the Commission pursuant to s 354(7A)(b) of the 1998 Act.
[23] Spears at [43].
Mr Guzman submits that the respondent’s reliance on the earlier MAC did not render the proceedings susceptible to summary disposal under s 354(7A), as there is no estoppel in a changing situation, relying on Abou-Haidar[24]. He submits that he does not cavil with the earlier MAC, but rather “seeks a further medical examination to determine the extent of additional impairment which has accrued since that MAC was issued”.
[24] Abou-Haidar at [66].
Mr Guzman submits that the Senior Arbitrator failed to apply, or refer to, “the General Steel test” in her reasons, and Ground No 1 is made out.

The Respondent’s Submissions

Trade West refers to its submissions before the Senior Arbitrator; it states it relies on these in the appeal. It submits that, on reviewing the medical evidence, it is “abundantly clear” that there has been no additional impairment since the earlier MAC. It refers to the appellant’s submission that there is “no estoppel in changing circumstances”, and submits that the appellant has not demonstrated “any changing circumstance” on the evidence. The only issue in dispute was “the extent of the s 323 deduction”. This had already been determined in the earlier MAC, which the appellant was “simply attempting to cavil with”.

Consideration

The respondent does not challenge the appellant’s reference to the test in General Steel, or the appellant’s argument that the test applies to an application to dismiss proceedings pursuant to s 354(7A)(b) (which was the basis of the Senior Arbitrator’s order). Neither party argues that Abou-Haidar was wrongly decided.
Neither party’s submissions refer to the decision of Keating P in Campbelltown Tennis Club Ltd v Lee[25], a matter in which the facts were similar to the current matter. In Lee the worker made a claim based on an assessment of 27% WPI, reduced pursuant to s 323 by 1/10, to a figure of 23%. The employer obtained a medical assessment of 27% WPI, reduced by 1/3 to a figure of 18%. The parties entered into a complying agreement pursuant to s 66A of the 1987 Act based on 18% WPI, consistent with the employer’s assessment. The s 66A agreement referred to both parties’ medical assessments. The worker, five years later, obtained an assessment from a different independent medical examiner, for 27% WPI reduced by 1/10, the same as the assessment on which his earlier claim was based. The worker brought a further claim for lump sum compensation, based on this assessment.
[25] [2013] NSWWCCPD 50 (Lee).
The Arbitrator in Lee referred the matter to an AMS for assessment on the basis that there was a ‘medical dispute’, relying on Abou-Haidar[26]. The President referred to the term ‘liability’ in s 321(4)(a) of the 1998 Act, and said that this “undefined concept” could encompass an issue, regarding whether “by operation of a s 66A agreement, a party may be prevented from bringing a claim for further lump sum compensation”[27]. His Honour distinguished Abou-Haidar, on the basis that decision “involved a medical dispute that fell within the sole jurisdiction of an AMS”, whereas Lee involved a dispute concerning “the meaning and effect of the s 66A agreement… not merely a medical dispute”[28].
[26] Abou-Haidar at [55].
[27] Lee at [50].
[28] Lee at [51].
The President considered the effect of the s 66A complying agreement, applying principles of contract law[29], and referring to those provisions in s 66A(3) which can permit the recovery of lump sum compensation additional to that provided for in a complying agreement[30]. His Honour, in the circumstances, dealt with the appeal by reference to the principles governing additional compensation under s 66A(3), rather than the principles in Abou-Haidar and associated authorities dealing with determination of a ‘medical dispute’. The decision in Lee is readily distinguishable on that basis. Neither party submits that it is relevant to the issues raised before me in the current appeal.
[29] Lee at [72]-[77].
[30] Lee at [78]-[93].

Principles Governing the Dismissal Application

In General Steel Barwick CJ said:
“8. … It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’.
9. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or ‘so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument’; so to speak apparent at a glance’.”[31]
[31] General Steel at [8]-[9].
In Spears, Roche DP said that “a matter should not be dismissed under [s 354(7A)(b)] unless the test set out in General Steel is satisfied and the matter is clearly ‘not reasonably arguable.’”[32]
[32] Spears at [43].
It is true, as the appellant submits, that the Senior Arbitrator did not refer to General Steel in her reasons. Neither party referred her to that decision. The appellant did refer her to Norman v Mathews[33], a decision which was cited by the Full Bench of the Federal Court in Atkinson v Commissioner of Taxation[34], as authority for the following proposition:
“The proceeding is ‘frivolous’ in the sense that no reasonable person could properly treat it as genuine and contend that he had a grievance which he was entitled to bring before the Court…”[35]
[33] (1916) 85 LJKB 857.
[34] [2015] FCAFC 18 (Atkinson).
[35] Atkinson at [28].
The respondent, before the Senior Arbitrator, referred to Abou-Haidar, and submitted the appellant’s claim fell within the following passage from Caulfield:
“Be that as it may, the profession is reminded, as it was in Abou-Haidar, that unmeritorious applications that merely seek to cavil with a conclusive and binding MAC that has not been appealed under s 327 (or challenged in the Supreme Court) may be liable to be dismissed as ‘frivolous or vexatious or otherwise misconceived or lacking in substance’ (s 354(7A)).”[36]
[36] Caulfield at [82].
The test for dismissal pursuant to s 354(7A)(b), stated in Spears, is that the matter be clearly not reasonably arguable. The various alternative formulations quoted in General Steel also assist.

The Dispute Regarding Permanent Impairment

The appellant’s further claim for lump sum compensation was made in correspondence addressed to Trade West and its insurer, on 19 September 2016. The correspondence included copies of Dr Woo’s report dated 13 September 2016. As the Senior Arbitrator observed, “Trade West did not respond to the claim within the time frames in the legislation”[37]. It did not issue a notice raising any ‘liability’ issue. Trade West lodged a Reply on 1 May 2017. That document identified that there had been a “Failure to determine”. It did not seek leave pursuant to s 289A of the 1998 Act, to raise any previously unnotified dispute relevant to ‘liability’. The Reply sought leave to include a denial that Mr Guzman suffered “any Whole Person Impairment as alleged or at all”. It also sought to include an allegation that “the claim is frivolous, misconceived or lacking in substance and should be dismissed”. This challenged the extent to which the claim was arguable, on the principles in General Steel. It did not challenge whether the claim was properly made, in accordance with the Regulations and Guidelines. There is no suggestion that it was not.
[37] The reasons at [4].
The denial that there was any WPI raised a ‘medical dispute’, for reasons discussed below. It did not raise a ‘liability’ issue. The allegation going to the nature of the claim did not raise a ‘liability’ issue; it gave notice of the dismissal application (relevant submissions were attached to Trade West’s Reply), which was dealt with in the decision dated 8 June 2017. The outcome of that application could not determine the parties’ rights.[38] The request in the Reply, to make that application, did not raise a ‘liability’ issue, which required resolution as a precondition to referral by the Registrar of the ‘medical dispute’, pursuant to s 321(4)(a) of the 1998 Act. As a practical matter, the Commission entertained the application pursuant to s 354(7A)(b) before making the referral.
[38] Shams at [37]-[39].
Section 65 of the 1987 Act relevantly provides:
“65 Determination of degree of permanent impairment
(1) For the purposes of this Division, the degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.
…
(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.”
Section 323(1) of the 1998 Act (which falls within Pt 7 of Ch 7) provides:
“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.” (emphasis added).
A ‘medical dispute’ is defined in s 319 of the 1998 Act, which falls within Pt 7 of Ch 7. It includes a dispute about:
“(c) the degree of permanent impairment of the worker as a result of an injury”
and
“(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”
The matters about which the assessment of an AMS is “conclusively presumed to be correct”, pursuant to s 326 of the 1998 Act, include:
“(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,”
In Haroun v Rail Corporation New South Wales[39] Handley AJA (McColl JA and McDougall J agreeing) said:
“19 The scheme of the two Acts is to ensure that the degree of permanent impairment that results from an injury, and any contribution to the worker’s total impairment that is due to an earlier injury or pre-existing condition are assessed under and in accordance with Part 7 of the 1998 Act and not otherwise.
20 If there is a medical dispute of a kind defined in s 326(1) of the 1998 Act, an Arbitrator has no jurisdiction to decide it, but “may refer it for assessment” by an AMS: s 321(1)…
21 Since the Arbitrator had no jurisdiction to decide the medical dispute he had no jurisdiction to make findings which were binding on the AMS or the Appeal Panel. The finding of a person without jurisdiction cannot bind the person or persons with jurisdiction, and cannot even be persuasive.”[40]
[39] [2008] NSWCA 192; 7 DDCR 139 (Haroun).
[40] Haroun at [19]-[21].
It is clear that assessment of permanent impairment as provided by Pt 7 of Ch 7, in compliance with s 65 of the 1987 Act, involves both the degree of permanent impairment and whether there is a deductible proportion pursuant to s 323(1) of the 1998 Act. In Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine[41] Meagher JA (Leeming and Simpson JJA agreeing) said:
“Whether a medical dispute existed was a jurisdictional fact depending on the true character of any dispute between the parties. If there was such a dispute concerning permanent impairment it was required to be resolved in accordance with a medical assessment under Pt 7.”[42]
[41] [2016] NSWCA 213 (Hine).
[42] Hine at [56].
Mr Guzman brings a further claim for lump sum compensation. He was previously awarded compensation based on 3% WPI. He now has an assessment of 8% WPI from Dr Woo, he claims the difference. Trade West has not raised a ‘liability’ issue. Having regard to the true character of the dispute, this is a ‘medical dispute’. It is necessary that it be determined in accordance with Pt 7 of Ch 7. The Senior Arbitrator did not have jurisdiction to decide the ‘medical dispute’ (as she correctly observed) nor to make findings which either bound, or were persuasive with, an AMS or an Appeal Panel. As there were no further matters of ‘liability’ requiring determination by the Commission, it was appropriate that the ‘medical dispute’ be referred to an AMS, in compliance with s 65(3) of the 1987 Act and s 293(2) of the 1998 Act.
This is consistent with the approach taken in Lee[43] and Abou-Haidar[44]. The Deputy President in Abou-Haidar said:
“Mr Flett’s submissions have invited me to engage in an assessment of the merits of Mr Abou-Haidar’s claim for lump sum compensation. In circumstances where the only compensation claimed is lump sum compensation in respect of an accepted injury, the legislation has reserved the assessment of such claims (where there is a medical dispute) to AMSs. Once a worker has properly made a claim, and liability issues have been determined, there is no need for a worker to establish a plausible case of a deterioration.”[45]
[43] Lee at [51].
[44] Abou-Haidar at [60]-[63].
[45] Abou-Haidar at [62].
The Senior Arbitrator’s reasons for the dismissal involved consideration of the merits of Dr Woo’s assessment of permanent impairment, involving the lack of reasons for the deductible proportion which he applied.[46] I accept the appellant’s submission, made in reply on the appeal:
“… an arbitrator cannot decline to remit the matter to the [R]egistrar for referral to an AMS on the basis of frivolity etc because of a pre-emption as to what the AMS would or should determine on the question of deterioration or other matters pertaining to the calculation of WPI.”
[46] The reasons at [29]-[30].
It was not open to the Senior Arbitrator in the circumstances, to dismiss the proceedings pursuant to s 354(7A)(b), effectively on the basis of a consideration of the persuasiveness of the medical evidence relied on by the appellant, to make the claim for lump sum compensation which gave rise to the ‘medical dispute’. The Workers Compensation Acts reserve assessment of a ‘medical dispute’ to an AMS. The High Court in Wingfoot Australia Partners Pty Ltd v Kocak[47], dealing with broadly similar Victorian legislation, said:
“The function of a Medical Panel is neither arbitral nor adjudicative: it is neither to choose between competing arguments, nor to opine on the correctness of other opinions on that medical question. The function is in every case to form and to give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise.”[48]
[47] [2013] HCA 43 (Wingfoot Australia).
[48] Wingfoot Australia at [47].
In State of New South Wales (NSW Department of Education) v Kaur, Campbell J described the function of AMSs under the New South Wales legislation:
“… it is not necessary that approved medical specialists should sit as decision makers choosing between the competing medical opinions put forward by the parties. Essentially, the function is the same as that described by the High Court in Wingfoot Australia. That is to say, their function is in every case to form and give his or her own opinion on the medical question referred by applying his or her own medical experience and his or her own medical expertise.”[49]
[49] [2016] NSWSC 346 at [26].
In a matter where no liability issues are raised, and the remaining issue is one going to assessment of permanent impairment (which requires referral to an AMS) it is difficult to see a basis on which a view could be formed by an arbitrator, consistent with General Steel, that the matter is clearly not reasonably arguable. The assessment by the AMS will be based on not only the evidence of the parties, but also his or her own medical experience and expertise, and cannot be known before it is carried out. The test applied by the Senior Arbitrator was an incorrect one, in that she dismissed the proceedings on the basis of the perceived lack of viability of the permanent impairment claim on quantum, when that was not a matter for her to decide.
The parties, in their submissions, refer to an issue regarding whether an estoppel arose, from the earlier MAC and award, regarding the deductible proportion. The Senior Arbitrator quoted from the decision in Abou-Haidar[50] (at [65]), the passage included:
“… unmeritorious applications that merely seek to cavil with a conclusive and binding MAC that has not been appealed under s 327 (or challenged in the Supreme Court) may also be liable to be dismissed as ‘frivolous or vexatious or otherwise misconceived or lacking in substance’ (s 354(7A)).”
[50] The reasons at [27].
The Senior Arbitrator also quoted from a passage in Caulfield to similar effect.[51]
[51] The reasons at [28].
The quoted passages from Abou-Haidar and Caulfield did not specifically raise issues of estoppel. The Arbitrator went on to say:
“No appeal was lodged in respect of the previous assessment and compensation was paid. The lack of any reasoning in Dr Woo’s report to account for the deduction of one-tenth lends force to the conclusion that the matter falls neatly within the description of an unmeritorious application which seeks to cavil with the extent of the deduction made under s 323 by the AMS. The alleged dispute only arises because a lesser deduction was made. The proceedings are misconceived and lacking in substance.”[52]
[52] The reasons at [30].
Mr Guzman’s submissions deal with this, saying that Trade West’s reliance on the prior MAC “did not render the application susceptible to summary disposal”. Those submissions refer to Abou-Haidar[53], where Roche DP said “there is no estoppel in a changing situation”, referring to a number of authorities[54]. The respondent’s submissions respond, saying “in this matter the Appellant has failed to demonstrate on the evidence that there was any changing circumstance”.
[53] Abou-Haidar at [66].
[54] Including O'Donel v Commissioner for Road Transport & Tramways (NSW) [1938] HCA 15; 59 CLR 744, Rail Services Australia v Dimovski [2004] NSWCA 267; 1 DDCR 648 (Dimovski).
The respondent’s submission on this issue involves a misreading of the relevant passage of Abou-Haidar, where the Deputy President said (excluding references):
“The last point to note (though it was not argued by Consolidated, but may be relevant to future claims) is that there is no estoppel in a changing situation. A claim for additional lump sum compensation is such a situation.”[55]
[55] Abou-Haidar at [66].

This reasoning, on the operation of estoppels in such circumstances, is consistent with the decision in Dimovski[56], discussed and applied in Prisk v Department of Ageing, Disability and Home Care (No 2)[57]. The Deputy President relied also on Spencer Bower, Turner & Handley, The Doctrine of Res Judicata [58]. The point may be made more clearly in the following passage of the Deputy President’s decision in Superior Formwork Pty Ltd v Livaja:[59]
“Third, a worker’s medical condition is capable of change. It is now more than two years since the Appeal Panel MAC. As a matter of basic fairness there is no reason why a MAC that is two years old should now bind a worker, especially in circumstances where he has issued fresh proceedings suggesting, based on different evidence, his impairment is different to that assessed two years earlier.”
[56] Dimovski at [10]-[13] (per Handley JA) and [57]-[58] (per Hodgson JA).
[57] [2009] NSWWCCPD 13; 7 DDCR 331.
[58] Spencer Bower, Turner & Handley, 3 ed, 1996, 102.
[59] [2009] NSWWCCPD 158 8 DDCR 78 at [104].
The assessment of permanent impairment, which depended in part on assessment of the deductible proportion for the purposes of s 323, was different to that assessed in the earlier MAC. The appellant’s submission on this point is correct.
The reasons (at [27]) quoted from a passage of Abou-Haidar (at [65]). I note the Deputy President’s remarks elsewhere in that decision, dealing with further claims for permanent impairment compensation:
“A worker must make a claim under s 282 and support that claim with a whole person impairment assessment in the proper form from a WorkCover trained assessor. If the assessment is the same as in a previous award or order of the Commission, there will be no basis for referral to an AMS. If the assessment is higher than in a previous award or order, then, assuming that there are no liability issues in dispute, the Registrar will refer the matter to an AMS for further assessment.”[60] (emphasis added)
[60] Abou-Haidar at [55].
No application pursuant to s 354(7A) was made in Abou-Haidar. The approach I have taken above is consistent with the ratio in Abou-Haidar.
It flows from the above that Ground No 1 is upheld. It is necessary that the order dismissing the proceedings pursuant to s 354(7A)(b) be revoked. The appropriate order was one remitting the matter to the Registrar, for referral to an AMS.

GROUND NO 2 – TAKING IRRELEVANT CONSIDERATIONS INTO ACCOUNT

The Appellant’s Submissions

Mr Guzman submits that the Senior Arbitrator “in effect, carried out a medical assessment”. He submits that in doing so she considered “the content of the criteria for assessing whole person impairment”, which was irrelevant to the issue before her, which was whether the matter involved a ‘medical dispute’ which should be referred to an AMS. The application pursuant to s 354(7A) did not make it the Senior Arbitrator’s task to “in effect carry out a medical assessment, find no additional compensable impairment, and then reason back from that finding that the claim was frivolous and not mandatorily referred”.
Mr Guzman submits that there was a ‘medical dispute’. Determination of that dispute was not a matter for the Arbitrator, but for an AMS.

The Respondent’s Submissions

Trade West submits that the Senior Arbitrator had the power to dismiss the proceedings. She reviewed the evidence, including the medical assessments relied on, and the “absence of statement evidence”. She concluded that the only issue was the extent of the s 323 deduction. This had already been the subject of a MAC which was not challenged in the earlier proceedings. It was necessary and appropriate that the Senior Arbitrator consider the evidence, in dealing with the s 354(7A) application.

Consideration

The reasons dealing with Ground No 1 effectively deal also with Ground No 2. I accept Mr Guzman’s submissions on this ground. There were no outstanding ‘liability’ issues requiring determination by the Commission. Mr Guzman had made a further claim, relying on an assessment of permanent impairment (8%) which was greater than that the subject of the earlier award (3%). This created a ‘medical dispute’ which required referral to an AMS. The dismissal of the proceedings, after consideration of the merits of the permanent impairment claim on quantum, involved taking irrelevant considerations into account. Ground No 2 is upheld.

GROUND NO 3 – EXCEEDING POWER BY DETERMINING A MEDICAL ASSESSMENT

It is unnecessary to deal with Ground No 3.

DISPOSITION OF THE APPEAL

It is necessary that the order dated 8 June 2017 be set aside. The appropriate order is one providing for referral to an AMS. The usual practice adopted by the Commission is that the AMS who conducted the original assessment also assesses the further claim, if he or she is available to do so. This was the procedure adopted in Abou-Haidar[61], which I propose to follow.
[61] Abou-Haidar at [63] and [67].

DECISION

Leave to appeal is granted pursuant to s 352(3A) of the 1998 Act.
The Certificate of Determination dated 8 June 2017 is revoked, and the following decision is made in its place:
“1. The matter is remitted to the Registrar, for referral to an AMS, to assess whole person impairment (cervical spine and right upper extremity - shoulder), resulting from injury on 1 August 2006.
2. The AMS is to have access to the material that was in evidence before the Senior Arbitrator.
3. The AMS should, if possible, be Dr Neil Berry, who previously assessed the appellant on 1 November 2011.”

Michael Snell
Deputy President

23 October 2017