Lockwood-Hall v BHP Billiton Nickel West Pty Ltd - [2015] WASCA 232

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: LOCKWOOD-HALL -v- BHP BILLITON NICKEL WEST PTY LTD [2015] WASCA 232

CORAM: McLURE P
NEWNES JA
CHANEY J

HEARD: 22 JULY 2015

DELIVERED : 20 NOVEMBER 2015

FILE NO/S: CACV 62 of 2014

BETWEEN: SCOTT LOCKWOOD-HALL
Appellant
AND
BHP BILLITON NICKEL WEST PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :WISBEY AUDCJ
Citation  :BHP BILLITON NICKEL WEST PTY LTD -v- LOCKWOOD-HALL [2014] WADC 67
File No  :APP 71 of 2013

Catchwords:

Workers' compensation - Appeal - Workers' Compensation and Injury Management Act 1981 (WA), s 93D(2)(c), s 93E(1), (3) - Workers' Compensation and Injury Management Regulations 1982 (WA), reg 19IA - Occupational asthma - Assessment of degree of disability under American Medical Association's Guides to the Evaluation of Permanent Impairment - Relevance of table 8 in chapter 5.2 in assessing impairment

Legislation:

Workers' Compensation and Injury Management Act 1981 (WA), s 93D(2)(c), s 93E(1), (3), s 217, s 254
Workers' Compensation and Injury Management Regulations 1982 (WA), reg 19IA
Workers' Compensation Reform Act 2004 (WA)

Result:

Appeal allowed
Decision of primary judge set aside

Category: B

Representation:

Counsel:

Appellant: Mr G T Stubbs
Respondent: Mr D W Williams

Solicitors:

Appellant: Chapmans Barristers and Solicitors
Respondent: WHL Legal Pty Ltd

Case(s) referred to in judgment(s):

Atanasoska v Inghams Enterprises Pty Ltd [2009] WASCA 17
BHP Billiton Nickel West Pty Ltd v Lockwood‑Hall [2012] WADC 108
BHP Billiton Nickel West Pty Ltd v Lockwood-Hall [2014] WADC 67
Lockwood-Hall v BHP Billiton Nickel West Pty Ltd [2012] WACC C5‑2012
SNF (Australia) Pty Ltd v Jones [2008] WASCA 121
Velez Pty Ltd v Tudor [2011] WASCA 218

McLURE P: I agree with the orders proposed by Newnes JA generally for the reasons he gives. I propose to make some additional observations.
This matter has had a long and unfortunate history. In 2003 the appellant was diagnosed with occupational asthma as a consequence of chemical exposure in the course of his employment as a mechanical fitter at the respondent's Kwinana nickel refinery.
The appellant lodged a workers' compensation claim under the Workers' Compensation and Injury Management Act 1981 (WA) (the Act) in August 2004. The respondent accepted liability and the appellant received weekly payments of compensation until the prescribed amount was reached in mid‑2011. Weekly payments of compensation are made if total or partial incapacity for work resulted from the work‑related 'injury'. Prior to the commencement of the Workers' Compensation Reform Act 2004 (WA), the statutory term was 'disability'.
In October 2009, the respondent terminated the appellant's employment with effect from 30 November 2009 on the grounds that the appellant's injury prevented him from filling the requirements of his position and it was unable to accommodate him in suitable alternative employment.
In January 2011, the appellant applied for an order under s 217 of the Act for additional financial provision (the s 217 application). Such an order can only be made if the compensable work‑related injury has resulted in 'permanent total incapacity for work'. The respondent resisted the s 217 application on the basis that, inter alia, the appellant's injury had not resulted in permanent total incapacity for work. The s 217 application came before Arbitrator Waring who determined that issue in the appellant's favour and awarded $65,000. The arbitrator accepted the appellant's evidence and found that his airway reactivity had worsened over time to the point where the range of contaminants that impacted adversely upon him was very much wider than it once was [48]. The arbitrator continued:
While I am satisfied that there are workplaces that would be vocationally suitable for the [appellant], I have accepted evidence that the reactivity of his airways:
(a)to a wide range of everyday airborne contaminants, bacteria and/or viruses, renders workplaces including his own home, unsustainable (and even unsafe) to varying degrees; and
(b)together with his compromised immune system, result in him displaying an unpredictable pattern of sporadic illness and unfitness for work. I find it doubtful that employers who could offer a safe and vocationally suitable workplace … could manage the uncertainty and time lost through the roller‑coaster of relapses to which the [appellant] is prone [49].
The arbitrator had before her reports of Dr J Silbert, an occupational physician called by the respondent, including a report dated 19 April 2011 which was also relied on by the respondent in the proceedings the subject of this appeal (the s 93D proceedings). Dr Silbert did not accept the appellant's evidence relating to the nature, extent and consequences of his respiratory symptoms and concluded he was fit to undertake the role he had performed with the respondent on a full‑time and unrestricted basis with capacity for shift work and overtime. Other expert medical evidence before the arbitrator was from Dr M Pritchard, the appellant's treating respiratory physician, and Dr E Gabbay, a respiratory physician.
The respondent's appeal from the orders made in the s 217 application was dismissed by Commissioner McCann in May 2012.
The s 93D proceedings were commenced at around the same time as the s 217 application and were also heard by Arbitrator Waring. The statutory restraint on common law damages applicable to the appellant's claim is the '1993 scheme' in pt 4 div 2 of the Act. Under that scheme, common law damages can only be awarded if it is agreed or determined that the degree of disability is not less than 30%: s 93E(3)(a). The degree of disability is to be determined in accordance with s 93D.
It was accepted by the parties that the degree of disability was to be assessed under s 93D(2)(c) of the Act and reg 19IA of the Workers' Compensation and Injury Management Regulations 1982 (WA) in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment (4^thed ) (AMAG). The focus in this appeal was on Table 8 at 5/162 of the AMAG which identifies four classes of respiratory impairment of the whole person, being Class 1: 0%; Class 2: 10-25%; Class 3: 26-50%; Class 4: 51-100%.
In the s 93D proceedings, Arbitrator Waring determined the degree of disability to be 33.8% reflecting a number of disabilities, the primary one being the appellant's occupational asthma.
The respondent successfully appealed against the arbitrator's determination of the degree of disability: BHPBilliton Nickel West Pty Ltd v Lockwood‑Hall [2012] WADC 108 (BHP No 1). McCann DCJ set aside the orders made by the arbitrator and ordered a rehearing.
The rehearing was conducted by Arbitrator Powles who also accepted the appellant's evidence relating to his occupational asthma. The expert evidence relied on by the parties in the s 217 application was also relied on in the s 93D proceedings, including the reports of Dr Pritchard, Dr Silbert and Dr Gabbay.
Arbitrator Powles said that the consensus among the expert physicians who reviewed the appellant was that he fell in Class 1 of the AMAG 'which is impairment of the whole person of 0-10%' [29]. Her assessment, using the AMAG, was 'of Class 1 whole person impairment, which is up to 10% impairment' [32]. Based on that assessment, and having regard to the extent to which the appellant's occupational asthma reduced his ability to perform work of any kind, she assessed the appellant's degree of disability at 40%.
The respondent again appealed to the District Court. Relying on the expert evidence that the appellant fell within Class 1 of Table 8, the primary judge held, as a matter of construction, that that mandated a conclusion of 0% impairment of the whole person with the further consequence that 0% impairment mandated a finding of 0% degree of disability. The primary judge upheld the appeal and dismissed the appellant's s 93D application. The appellant appeals from that decision.
It is impossible to reconcile the primary judge's conclusions of 0% impairment and 0% degree of disability with the factual findings in the s 217 application and the arbitration as to the nature, extent and effect of the appellant's occupational asthma. The primary judge erred in both conclusions.
There can be little doubt that, as a matter of construction, Class 1 of Table 8 is 0% impairment of whole person not a range of 0-9% impairment. So much is apparent from other tables in the AMAG where Class 1 is 0-9% of whole person impairment. See, for example Table 8, congenital heart disease, 6/181; Table 9, hypertensive cardiovascular disease, 6/187; Tables 17 and 13, peripheral vascular disease, 3/57 and 6/197; Table 5, air passage defects, 9/231; Table 3, colonic and rectal impairment, 10/241. What distinguishes the approach in these cases is that the classification is informed in large measure by clinical assessment. By contrast, the assessment of respiratory impairment in Table 8 is wholly based on physiologic tests of pulmonary function, including spirometry.
However, the AMAG expressly states that certain respiratory conditions may cause impairment that is not readily quantifiable by physiologic tests, including conditions of an episodic nature. Asthma is such a condition for the reasons explained in detail in Table 10 (set out in the reasons of Newnes JA). It is sufficient for present purposes to refer to the following:
Impairments in persons with these conditions [including asthma] should be evaluated by physicians with expertise in lung disease, and the impairment estimate should be left to the physician's judgment (5/164).
As the AMAG makes clear, a person with lung cancer in its early stages may, on physiologic testing, fall within Class 1 (no impairment of the whole person) and yet properly be classified as severely impaired within Class 4.
It was because the appellant's condition was episodic and not readily quantifiable that, relying on their clinical judgment, the medical experts extrapolated Class 1 to mean 0-10%. That is apparent from the reports of Dr Pritchard (G34 ‑ 35, G45 ‑ 46) and Dr Gabbay (G58, G74, G76). Dr Silbert was not critical of the combined quantitative and qualitative approach reflected in the range of 0-10%. Rather, his conclusion was that, as a matter of fact, the appellant's impairment was 0%. In his report dated 22 October 2012, Dr Gabbay eventually came to agree with Dr Silbert but that involved rejecting the appellant's evidence of his symptoms and the consequences of them. Arbitrator Powles clearly rejected expert opinions which were based on rejection of the appellant's evidence.
The combination of quantitative and qualitative inputs into the assessment of impairment under the AMAG was expressly acknowledged and approved by McCann DCJ in BHP No 1 [51] ‑ [52], [63]. It was, in substance, the approach of both arbitrators in the s 93D proceedings. It cannot be said that such an approach is contrary to the proper construction of the AMAG. If anything, it might be thought the medical experts gave too much weight to the wholly quantitative criteria in Table 8.
Finally, the AMAG distinguishes between 'impairment' and 'disability'. An impairment percentage derived by means of the AMAG is intended to represent an informed estimate of the degree to which an individual's capacity to carry out daily activity, excluding occupational demands, has been diminished. See the definition of 'Daily Living Activities' (316, 317). Disability is defined as an alteration of an individual's capacity to meet personal, social or occupational demands and

arises out of the interaction between impairment and external requirements, especially those of a person's occupation.

The step from impairment rating to degree of disability involves an evaluative assessment that does not admit of detailed amplification. It is clear from the reasons that Arbitrator Powles was balancing the relatively low impairment rating on the one hand, with the very significant impact it had on the appellant's capacity for work, on the other. No error of law is demonstrated in the outcome or the obvious reasoning for it.
NEWNES JA: This is an appeal from an order of Wisbey DCJ in the District Court setting aside the finding of an arbitrator under the Workers’ Compensation and Injury Management Act 1981 (WA) (the Act) that the appellant had a degree of disability of 40% under s 93D of the Act. The appellant contends that the primary judge erred in setting aside the finding.
Pursuant to s 254 of the Act, the appeal must relate to a question of law and leave to appeal must be obtained. On 22 August 2014, it was ordered that the application for leave to appeal be referred to the hearing of the appeal.

Background

The appellant was employed as a mechanical fitter at the appellant's Kwinana Nickel Refinery. In or about June 2003, the appellant was diagnosed as suffering from occupational asthma as a consequence of chemical exposure. The respondent accepted liability under the Act and paid workers' compensation to the appellant. The appellant has not worked since October 2009.
Once the weekly payments of compensation reached the prescribed amount, the appellant made an application under s 217 of the Act for additional provision. On 7 November 2011, Arbitrator Waring found that the appellant's disability had resulted in permanent total incapacity for work and ordered the respondent to pay the appellant an additional sum of $65,000, thereby determining the respondent's total liability under the Act. Appeals by both parties against the arbitrator's decision were dismissed: Lockwood-Hall v BHP Billiton Nickel West Pty Ltd [2012] WACC C5‑2012.
The appellant also wished to pursue a claim for common law damages against the respondent. However, under s 93E of the Act he was precluded from doing so unless he could establish a degree of disability,

assessed in accordance with s 93D(2), of not less than 30%. Relevantly, under s 93D(2)(c) and reg 19IA of the Workers’ Compensation and Injury Management Regulations 1982 (WA), the appellant's degree of disability was to be assessed in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment (4^th Edition) (AMAG). The appellant applied for a determination pursuant to s 93D in respect of several alleged injuries, including the occupational asthma.

On 10 November 2011, an arbitrator found that the appellant's degree of disability was 33.8% and thus above the statutory threshold for common law damages. The respondent appealed to the District Court, contending that the assessment was excessive. The appellant filed a notice of contention, contending that the arbitrator should have found a greater level of disability. On the appeal, the decision of the arbitrator was set aside and the matter sent back to be reheard: BHP Billiton Nickel West Pty Ltd v Lockwood‑Hall [2012] WADC 108.
At the subsequent arbitration, the arbitrator found that for the purposes of s 93D the appellant's degree of disability in respect of his condition of occupational asthma was 40%. The arbitrator found the appellant had no disability in relation to the other alleged injuries.

The reasons of the arbitrator

The arbitrator noted that she was required to make three findings: the diagnosis of the condition; the extent of permanent loss or diminution of function of a body part or function; and the degree of disability [5].
The arbitrator found that from his respiratory illness the appellant experienced a number of symptoms, which she described. She also found that the appellant had not participated in the workforce since 2009 and that his day to day activities involved domestic, household and personal activities [12] ‑ [13].
The arbitrator then reviewed the medical evidence consisting of reports of three specialists: Dr Prichard; Dr Silbert; and Professor Gabbay. It is unnecessary to refer in detail to all of the medical reports referred to by the arbitrator. The relevant reports were as follows.
In a report of 15 June 2011, Dr Prichard assessed the appellant's permanent degree of disability under the AMAG as '0 ‑ 10%'. Dr Prichard went on, however, to say in that report that the AMAG (among other guides) did not cover all forms of impairment associated with asthma and 'certainly not the impairment in [the appellant's] case.'
In a report of 5 October 2011, Dr Prichard referred to reviews of the appellant on 27 October 2010 and 20 April 2011, and expressed the view that there had been no change in the appellant's symptoms of asthma over the past few years. He described the appellant as having 'persistent frequent symptoms of asthma and frequent exacerbations treated by oral steroid therapy. Between exacerbations his airway function is normal.'
Professor Gabbay provided a report of 18 January 2011 in which he noted that based on resting lung function and a cardiopulmonary test, the appellant had a 'Class 1 or 0% impairment' based on table 8 in chapter 5.2 of the AMAG (table 8). However, Professor Gabbay went on to observe that the AMAG pointed out that asthma can present a difficult problem in impairment and disability evaluation because results of pulmonary function may be normal or near normal between attacks. He said that based on the measurements of respiratory function, the appellant would fall within class 1 of table 8, but that allowing for some variability in his symptomology, his assessment of the appellant's impairment was 0% to 10%, rather than a specific number.
In a report dated 19 April 2011, Dr Silbert agreed with Professor Gabbay's methodology but, based on the clinical findings and the appellant's ability to undertake a variety of domestic and recreational pursuits, concluded that the appellant had a 0% degree of permanent impairment.
In a report dated 22 October 2012, Professor Gabbay revised his previous assessment. In that report, Professor Gabbay said that based on the various lung function tests the appellant had undergone and Dr Silbert's description of the appellant's activities, he considered the appellant had a 0% degree of disability.
The arbitrator found there was no dispute as to the diagnosis of occupational asthma. She defined her task as being 'to determine first of all the level of permanent whole person impairment under the [AMAG] and then to convert it to a degree of disability' [26].
Turning to the question of whole person impairment under the AMAG, the arbitrator noted that the consensus among the physicians was that the appellant fell into class 1 of table 8, impairment of the whole person of 0% to 10% [29]. The arbitrator did not accept the assessment of Dr Silbert that the appellant had a 0% degree of permanent impairment, observing that Dr Silbert's assessment was based on normal findings at the time of assessment. Nor did the arbitrator accept the revised assessment of Professor Gabbay of a 0% degree of permanent impairment. Having regard to the evidence as to the appellant's respiratory condition, particularly Dr Prichard's clinical findings and Professor Gabbay's own observations of the appellant's symptoms, persistent evidence of airways disease, and variability of symptoms, the arbitrator found that the appellant had an impairment within class 1 of table 8; that is, an impairment of up to 10% [31] ‑ [32].
The next step, the arbitrator observed, was to translate knowledge about the impairment into a degree of disability, the degree of permanent disability being a matter of judgment having regard to the criteria in the AMAG and the evidence bearing upon the condition of the worker [33]. She noted that it had already been determined that the appellant had a permanent total incapacity for work as a result of the occupational asthma. However, in the arbitrator's view a determination of a degree of disability of 100% would not give adequate weight to the assessment of a class 1 impairment under table 8, the mildest impairment.

The arbitrator concluded:
Applying the relevant criteria to carry out the assessment of [the appellant's] permanent degree of disability, that is, having regard to both the assessment of impairment under the [AMAG] and the extent to which the condition has reduced [the appellant's] capacity to perform work of any kind, I determine that in respect of his condition of occupational asthma, his degree of disability is 40%. I arrive at this percentage after considering the Class 1 impairment assessment of less than 10% but bearing in mind that the diagnosis of occupational asthma can present a difficult problem when assessing impairment because pulmonary function may be normal or near normal between attacks, and after considering my findings regarding [the appellant's] condition, the clinical findings and opinion of Dr Pritchard [sic] who has been reviewing [the appellant] over an extended period of approximately eight years, the clinical findings and opinions of Professor Gabbay and Dr Silbert, and the prior determination that [the appellant's] occupational asthma has resulted in total permanent incapacity for work.
The respondent appealed to the District Court.

The grounds of appeal in the District Court

There were three grounds of appeal before the primary judge:
1.There was no evidence to support the arbitrator's finding;
2.The arbitrator failed to properly apply the AMAG;
3.The arbitrator erred in finding that the respondent had a permanent degree of disability of 40%.

The decision of the primary judge

The primary judge rejected a contention by the respondent that the arbitrator had to make her own finding as to the appellant's capacity for work, concluding that the arbitrator was not only entitled to accept the earlier determination of permanent total incapacity for work but bound to do so [24].
However, his Honour found that the arbitrator was in error in concluding that the consensus of medical opinion was that the appellant fell within class 1 of table 8 which was an impairment of the whole person of 0% to 10%. His Honour summarised the medical evidence and set out table 8. Table 8 classifies respiratory impairment of the whole person into four classes based upon certain tests. It is as follows:
Table 8. Classes of Respiratory Impairment

Class 1: 0%, no impairment of the whole person	Class 2: 10-25%, mild impairment of the whole person	Class 3: 26-50%, moderate impairment of the whole person	Class 4: 51-100%, severe impairment of the whole person
FVC FEV₁ FEV₁/FVC (%) D_co	FVC > 80% of predicted; and FEV₁ > 80% of predicted; and FEV₁/FVC > 70%; and D_co > 70% of predicted.	FVC between 60% and 79% of predicted; or FEV₁ between 60% and 79% of predicted; or D_co between 60% and 69% of predicted.	FVC between 51% and 59% of predicted; or FEV₁ between 41% and 59% of predicted; or D_co between 41% and 59% of predicted.	FVC < 50% of predicted; or FEV₁ < 40% of predicted; or D_co < 40% of predicted.
or	or	or	or
VO₂ Max	> 25mL/(kg * min); or > 7.1 METS	Between 20 and 25 mL/(kg*min); or 5.7-7.1 METS	Between 15 and 20 mL/(kg*min); or 4.3-5.7 METS	< 15mL/(kg*min); or < 1.05 L/min; or < 4.3 METS

FVC = forced vital capacity, FEV₁ = forced expiratory volume in the first second, D_co = diffusing capacity of carbon monoxide … VO₂ Max, or measured exercise capacity.

His Honour said:
Class 1, being the classification in which all specialists place the respondent is '0% no impairment of the whole person'. In the result the burden of the evidence before the arbitrator was that the respondent did not have any impairment of the whole person, and it was imperative to so find as it was critical to the determination. This was recognised by the arbitrator when she stated at:
[26] My task is to determine first of all the level of permanent whole person impairment under the US guides and then to convert it to a degree of disability;
and
[33] I am required to translate knowledge about impairment into a degree of disability.
The arbitrator was incorrect when she stated at [29] that Class 1 of the AMAG was indicative of impairment of the whole person of 0% ‑ 10%. Although she stated that she did not accept that the respondent had 0% impairment believing it to be somewhere between 0% ‑ 10% she overlooked the fact that Class 1 categorisation was 'no impairment of the whole person'.
A percentage impairment finding is essential because the relevant regulation provides that 'the degree of disability is to be assessed in accordance with the AMAG'. If the AMAG assessment is '0% no impairment of the whole person' it is not possible to determine a degree of disability since one would be left making the assessment using only a worker's capacity for employment instead of implementing the required conversion from an impairment rating. To make a determination based simply upon an assessment of the worker's capacity for employment would be contrary to the requirements of s 93D(2) as the AMAG would not form part of the equation. [33] ‑ [35]
The primary judge held that in any event it was not possible to determine how the arbitrator had arrived at a figure of 40% degree of disability and no adequate reasons were given by the arbitrator for that finding [36], [39].
His Honour concluded:
The proper finding on the evidence is that [the appellant] must be classified under the AMAG as Class 1 '0% no impairment of the whole person'. In the result it is not possible statutorily to make the necessary determination by conversion of a degree of disability. [43]
Leave to appeal was granted and the arbitrator's decision set aside: BHP Billiton Nickel West Pty Ltd v Lockwood-Hall [2014] WADC 67.
The appellant now appeals to this court from the decision of the primary judge.

The grounds of appeal to this court

It is unnecessary to set out the grounds of appeal in full. The appellant's substantive contentions on the appeal were that the primary judge erred:
1.in failing to give any or any adequate reasons why the grounds of appeal involved a question of law (ground 1);
2.in finding that as the appellant's level of impairment fell within class 1 of table 8, the appellant had 0% or nil impairment of the whole person (grounds 2 and 3);
3.in finding that under s 93D(2) of the Act, it was not open to the arbitrator to make a finding of a degree of permanent disability of 40% based upon an assessment of impairment within class 1 of table 8 and the appellant's capacity for work (ground 4); and
4.in finding that the arbitrator had failed to provide reasons for her finding that the appellant's degree of permanent disability was 40% (ground 5).

The disposition of the appeal

Grounds 2 ‑ 4

Section 93E(3) of the Act provides that damages can only be awarded if, relevantly, it is determined or agreed between the worker and employer that the worker's degree of disability is not less than 30%. Pursuant to s 93E(1), the 'degree of disability' means the degree of disability of the worker assessed in accordance with s 93D(2).
Section 93D(2) provides, relevantly, that for the purposes of s 93E, the degree of disability of the worker is to be assessed:
(a)so far as Schedule 2 Part 1 provides for an injury suffered by the worker, as a percentage equal to -
(i)if only one item of that Part applies to the injury, the percentage of the prescribed amount provided for by that item, as read with section 25; or
(ii)if 2 or more items of that Part apply to the injury, the sum of the percentages of the prescribed amount provided for by those items, as read with section 25;
(b)to the extent that paragraph (a) does not apply, as the degree of permanent impairment assessed in accordance with the AMA Guides; and
(c)to the extent, if any, that neither paragraph (a) nor paragraph (b) applies, then in accordance with the regulations …
Regulation 19IA provides that for the purposes of s 93D(2)(c), the degree of disability is to be assessed in accordance with the AMAG.
As mentioned above, it was common ground that the relevant provision in this case was s 93D(2)(c) and accordingly that the appellant's degree of disability was to be assessed in accordance with the AMAG. It is therefore necessary to turn to the AMAG.
The AMAG emphasises the distinction between an 'impairment' and a 'disability'. In the AMAG, impairment is defined as 'the loss, loss of use, or derangement of any body part, system, or function' [GAB 136]. It is also described as 'a deviation from normal in a body part or organ system and its functioning' [GAB 109].
A 'disability' is defined as 'a decrease in, or the loss or absence of, the capacity of an individual to meet personal, social, or occupational demands, or to meet statutory or regulatory requirements' [GAB 138]. It is also described as:
an alteration of an individual's capacity to meet personal, social, or occupational demands, or statutory or regulatory requirements, because of an impairment. Disability refers to an activity or task the individual cannot accomplish. A disability arises out of the interaction between impairment and external requirements, especially those of a person's occupation. (emphasis added) Disability may be thought of as the gap between what a person can do and what the person needs or wants to do. (original emphasis)
…
An 'impaired' individual is not necessarily 'disabled'. For example, loss of the distal phalanx of the little finger of the right hand will impair the functioning of the digit and hand of both a concert pianist and a bank president. However, the bank president is less likely to be disabled than the pianist. A surgeon who loses a hand will be impaired and will be disabled in terms of the ability to operate; but the surgeon may be fully capable of being the chief of a hospital medical staff and may not be disabled at all with respect to that occupation. (citation omitted) [GAB 110]
In the proceedings before both the arbitrator and the primary judge, attention was focused on table 8 in chapter 5 of the AMAG. Chapter 5 is headed 'The Respiratory System' and is said to provide 'a framework for the recognition and assessment of respiratory abnormalities that affect the individuals' ability to function in the everyday world.' Sub‑chapter 5.1 sets out means of assessing the respiratory system. Sub‑chapter 5.2 is headed 'Physiologic Tests of Pulmonary Function: Techniques, Use, and Interpretation'. It describes physiologic testing of pulmonary function as 'the quantitative basis on which the evaluation of respiratory system impairment rests'. It states that:
[m]easurements are made from at least three acceptable spirometric tracings of forced expiration: forced vital capacity (FVC), forced expiratory volume in the first second (FEV₁), and the ratio of these measurements (FEV1/FVC). … The single breath D_co [diffusing capacity of carbon monoxide] should be used for the evaluation of all levels of impairment. … Exercise capacity measurements [VO₂Max] may be used as an adjunctive or accessory means of assessing the severity and cause of exercise intolerance. [GAB 127 ‑ 130]
Sub‑chapter 5.2 contains table 8, set out above at […], which classifies the level of impairment, based on the above measurements, into four classes: class 1 ‑ 0%, nil impairment of the whole person; class 2 ‑ 10 - 25%, mild impairment; class 3 ‑ 26 ‑ 50%, moderate impairment; and class 4 ‑ 51 ‑ 100%, severe impairment.
Sub‑chapter 5.3 is headed 'Criteria for Evaluating Permanent Impairment'. It commences as follows:
Table 8 … presents criteria for estimating the extent of permanent impairment. Spirometry and D_co must be performed on each individual being studied. The VO₂Max will be performed rarely and it is not often necessary for identifying classes of impairment. If the patient is considered to have no impairment, all of the listed criteria except for VO₂ Max must be met. For all other classes, at least one of the listed criteria must be fulfilled.
Sleep disorders, Asthma, Lung Cancer, and Other Impairments
Certain respiratory conditions may cause impairment that is not readily quantifiable by testing pulmonary functioning, spirometry, diffusing capacity, or measured exercise testing. [GAB 131]
Having discussed certain sleep disorders, the AMAG goes on to say:
Table 10 … highlights some other conditions in which impairment is not readily quantifiable and provides some general comments. Impairments in persons with these conditions should be evaluated by physicians with expertise in lung disease, and the impairment estimate should be left to the physician's judgment. [GAB 132]
Table 10 is headed 'Impairments Not Directly Related to Lung Functions' [GAB 132]. One of the impairments contained in table 10 is asthma. In relation to asthma, table 10 includes the following:
Asthma presents a difficult problem in impairment evaluation because results of pulmonary function studies may be normal or near normal between attacks. Despite the intermittent nature of the disease, severe impairment may be diagnosed when the individual is receiving optimum medical therapy and has physiologic test results in the severely impaired range on three successive tests performed at least 1 week apart. The frequency of attacks also should be taken into consideration when deciding on the level of impairment.
It is clear from chapter 5.3 of the AMAG that the results of the physiologic testing referred to in table 8 are not a reliable guide in determining the level of impairment from asthma. The AMAG expressly notes that because of the intermittent nature of the symptoms of the disease, asthma is not readily quantifiable by the test results contained in table 8 or, indeed, at all. That is, as Professor Gabbay also noted, because pulmonary function may be normal or near normal between asthma attacks. Accordingly, under the AMAG the assessment of impairment in the case of asthma is a matter that 'should be evaluated by physicians with expertise in lung disease, and the impairment estimate should be left to the physician's judgment.' That is, an assessment in accordance with the AMAG of impairment in a person suffering from asthma is a matter of clinical judgment rather than simply the application of the classes of impairment set out in table 8. Whether or to what extent table 8 is of assistance in forming that clinical judgment will be a matter for the physician.
The difficulty in the application of table 8 was recognised by Professor Gabbay in his medical report of 18 January 2011. There he specifically referred to the problems identified in the AMAG in the evaluation of impairment and disability based on the measurements of the respiratory functions set out in table 8. In view of the variability of the appellant's symptomology, Professor Gabbay arrived at his own assessment of the appellant's impairment of between 0% and 10%, rather than a 0% assessment based on table 8 (Professor Gabbay later resiled from that assessment but his revised assessment of 0% was not accepted by the arbitrator).
It was also reflected in Dr Prichard's observation that the AMAG did not cover all forms of impairment associated with asthma and that it did not cover the impairment in the appellant's case. It is, I think, to be inferred that Dr Prichard was there referring to table 8. Dr Prichard noted, in his report of 5 October 2011, that between exacerbations the appellant's airway function was normal.
It was, however, a matter overlooked by the primary judge. His Honour found, in effect, that the assessment of impairment of the appellant by the medical experts as falling within class 1 of table 8 meant that the appellant had 0% or nil impairment. It followed, in his Honour's view, that the arbitrator could not then make an assessment of a degree of disability, as that assessment resulted from the conversion of the level of impairment [35]. That is, his Honour considered that if the measurements in table 8 placed the appellant's level of impairment within class 1, there could be no degree of disability.
That, with respect, is not correct. In determining the degree of disability of the appellant in accordance with the AMAG, the arbitrator was entitled to take into account that the level of impairment in the case of asthma is not readily quantifiable by the testing on which table 8 is based and that, because of the intermittent nature of the symptoms of the disease, the categorisation of the level of impairment by reference to table 8 is not a reliable guide to the actual level of impairment. The fact that the appellant's level of impairment fell within class 1 of table 8 was not therefore conclusive as to the actual level of impairment and the arbitrator was not bound to conclude that the appellant had no whole person impairment.
It is evident that the arbitrator was alert to the difficulties described in the AMAG in the evaluation of impairment in cases of asthma and took that into account in determining that the appellant had more than 0% or nil whole person impairment. That finding was supported by the evidence of Dr Prichard and the first report of Professor Gabbay. As I have mentioned, the arbitrator did not accept the second report of Professor Gabbay or Dr Silbert's evidence that the appellant had a 0% level of impairment.
The arbitrator then made, as she was required to do, an evaluative judgment of the appellant's degree of disability. She did so having regard, as she was entitled to do, to her findings as to the appellant's condition, the views and clinical findings of the medical experts, and the earlier finding of Arbitrator Waring that the appellant's asthma had resulted in the appellant's total permanent incapacity for work. The arbitrator concluded the degree of disability to be 40%. That was a finding, in my view, that was open to her on the evidence.
I would grant leave to appeal and uphold grounds 2, 3 and 4 of the grounds of appeal.

Ground 5

It is not clear how this arises on the appeal. It was not a matter raised in the respondent's grounds of appeal before the primary judge and appears not to have been a live issue before his Honour. On this appeal, the respondent disclaimed any reliance upon a contention that the arbitrator's reasons were inadequate, describing the relevant statements in the primary judge's reasons as being 'in the nature of obiter dicta'. In the circumstances, I do not think it is necessary to determine this ground.
However, for completeness I should say that any contention that the arbitrator failed to provide adequate reasons for her finding must be rejected.
The basic principles as to the adequacy of reasons at common law are well established: see SNF (Australia) Pty Ltd v Jones [2008] WASCA 121 [32] ‑ [34]. In short, reasons for decision will be sufficient if the reasoning process which led to the result is disclosed with sufficient certainty to enable the litigant to know why it is that the result ensued and to ensure that the right of appeal has been secured: SNF [32].
In considering the adequacy of reasons for decision of an arbitrator under the Act it is also necessary to have regard to s 213(4), which provides:
The reasons for an arbitrator's decision ‑
(a)need only identify the facts that the arbitrator has accepted in coming to the decision and give the reasons for doing so; and
(b)need only identify the law that the arbitrator has applied in coming to the decision and give the reasons for doing so; and
(c)need not canvass all the evidence given in the case; and
(d)need not canvass all the factual and legal arguments or issues arising in the case.
That provision does not, however, relieve an arbitrator from an obligation to expose his or her reasoning process with sufficient certainty to enable the litigant to know why it is that the result ensued and to ensure that the statutory right of appeal has been secured: Velez Pty Ltd v Tudor [2011] WASCA 218 [70].

The inadequacy that I understand the primary judge identified in the arbitrator's reasons was a failure to set out how she had arrived at a figure of 40%, as opposed to some other figure. That, however, is to overlook the nature of the task the arbitrator was required to undertake. The assessment the arbitrator had to make of the appellant's degree of disability was an evaluative judgment involving elements of fact, degree and value judgment. An evaluative judgment is of its nature inexact and non-scientific, and not susceptible of detailed elaboration. In my view, the arbitrator sufficiently disclosed the reasoning process which led to her determination of a degree of disability of 40% and it was not incumbent upon her to provide a more elaborate exposition. The observation of the primary judge that the reasons were inadequate is, with respect, erroneous.

Ground 1

It is unnecessary to consider ground 1 of the grounds of appeal in light of the conclusions I have reached.

The notice of contention

The respondent sought to uphold the decision of the primary judge on five grounds not relied upon by his Honour. They were, in substance that the arbitrator:
1.misdirected herself as to the effect of the AMAG and accordingly assessed the appellant's degree of disability contrary to s 93D(2)(c) of the Act;
2.in finding that the appellant had a whole person impairment of up to 10%, misdirected herself as to the effect of Professor Gabbay's evidence;
3.erred in accepting that it had previously been determined by an arbitrator that the appellant was unfit for employment of any kind when it had only been determined that the appellant had suffered a total permanent incapacity for work within the meaning of s 217 of the Act;
4.erred in implicitly accepting that the appellant had an impairment under the AMAG when the appellant had no impairment and/or there was no evidence of any assessable impairment under the AMAG that translated into an inability to perform work of any kind; and
5.misdirected herself as to the effect of the evidence of Dr Prichard, Dr Silbert and Professor Gabbay in finding that there was a consensus of the medical experts that the appellant fell into the range of whole person impairment of 0% to 10% under class 1 of table 8.

Ground 1

By this ground, the respondent contends that under the AMAG the degree of the appellant's impairment was required to be assessed in accordance with table 8. Class 1 of table 8 attributes nil impairment to anything under 10%. Accordingly, it was submitted, the arbitrator was in error in assessing the appellant's degree of impairment to be between 0% and 10%.
This ground must fail in light of my conclusions on the appeal.

Ground 2

The respondent contends that, to the extent the arbitrator relied upon Professor Gabbay's evidence to find that the appellant had an impairment of 0% to 10%, she was in error. That, the respondent says, is because whilst, in his report of 18 January 2011, Professor Gabbay made his own assessment of 0% to 10% impairment, he acknowledged that table 8 only allowed a 0% assessment. In addition, in his report of 22 October 2012 Professor Gabbay qualified his earlier report and confirmed that the appellant fell within class 1 of table 8 so that he had 0% impairment.
This ground must fail. It is not contended by this ground that there was no evidence upon which the arbitrator could have found that the appellant had an impairment of up to 10%. If that contention had been made it would clearly have involved a question of law. This ground, however, is limited to a contention that, to the extent the arbitrator found that Professor Gabbay's evidence supported such a finding, she had misunderstood his evidence. That is an allegation of error in fact-finding. An arbitrator who merely finds facts wrongly or upon a doubtful basis does not make an error of law: Atanasoska v Inghams Enterprises Pty Ltd [2009] WASCA 17 [21].
As an appeal from the decision of the arbitrator was available to the respondent only if it involved a question of law, this ground is incapable of supporting the judgment of the primary judge.
In any event, I do not consider there is any substance in this ground for the reasons set out in relation to grounds 2 to 4 of the grounds of appeal. I would also note that insofar as the respondent's contention relies upon Professor Gabbay's report of 22 October 2012, it fails to recognise that the arbitrator did not accept Professor Gabbay's opinion in the report that the appellant had 0% impairment. The arbitrator's rejection of Professor Gabbay's evidence in that report does not involve a question of law.

Ground 3

The essence of this ground, as I understand it, is that the arbitrator erred in having regard to the earlier finding of Arbitrator Waring on the application under s 217 of the Act, that the appellant's occupational asthma had resulted in his permanent total incapacity for work. There are, it seems, two propositions contained in this contention. First, that the question of the appellant's capacity to work for the purposes of s 217 was different to the question before the arbitrator and therefore not something the arbitrator could properly take into account [WAB 39]. It was submitted that 'permanent total incapacity for work' under s 217 meant 'being wholly unable to earn a living in a labour market in which he was working before suffering the injury or in which he could reasonably be expected to work, that is, one which is reasonably accessible to him and for which he is vocationally suited': Lockwood-Hall WACC C5‑1202. The respondent submitted that the question before the arbitrator in assessing the appellant's degree of disability under s 93D(2) was a different question, namely, the appellant's general ability to do work of any kind. Secondly, it was submitted that the finding of Arbitrator Waring was not a finding that the appellant's permanent total incapacity for work was a condition that would exist forever but related only to the appellant's capacity at the time of his determination. Accordingly, the arbitrator was required to consider the question afresh on the evidence before her (ts 22 ‑ 24).
I do not accept the first proposition. In my view, for present purposes there was no relevant difference between 'being wholly unable to earn a living in a labour market in which he was working before suffering the injury or in which he could reasonably be expected to work' and being unable to do work of any kind. Whether a person is unable to do work of any kind is a question whether the person is unable to work in the labour market in which he or she was working before suffering the injury or in which he or she could reasonably be expected to work, having regard to matters such as the person's age, experience, background, education or pre‑existing physical disabilities. It was not a relevant consideration that the appellant may have a theoretical capacity to do work he could not reasonably be expected to do.
In relation to the second proposition, it is correct that 'permanent total incapacity' does not mean such incapacity is necessarily forever but, as Arbitrator Waring noted, is to be assessed on the basis that the incapacity for work is more likely than not to continue in the foreseeable future. There is no suggestion that the arbitrator in the proceedings below understood it otherwise.
The earlier finding the appellant’s occupational asthma had resulted in his permanent total incapacity for work was relevant to the decision the arbitrator had to make as to the appellant's degree of disability and she was entitled to have regard to it. In any event, the contention that the arbitrator should not have taken that finding into account is an allegation of an error in fact-finding and does not involve an error of law.

Ground 4

This ground must fail in light of my findings on the appeal.

Ground 5

This ground must fail for the same reason but I would add that, in my view, it reflects a misreading of the medical evidence and of the arbitrator's decision. The relevant passage of the arbitrator's decision was as follows:
Turning first to the question of the percentage whole person impairment under the [AMAG], I note that the consensus amongst the physicians who have reviewed [the appellant] is that he falls in Class 1 of the [AMAG], which is impairment of the whole person 0 - 10%.
In his report of 19 April 2011, Dr Silbert said:
[The appellant] underwent formal assessment with myself on 28 March 2011. The findings at that consultation were normal. With this [the appellant] presents with a 0% permanent impairment as assessed under

[the AMAG]. This remains within the range as ascribed by Associate Professor Gabbay, being 0-10% whole person impairment. [GAB 92]

In his report of 18 January 2011, Professor Gabbay said that the appellant fell within class 1 of table 8 but, allowing for some variability in his symptomology, his assessment of the appellant's impairment was 0% to 10%, rather than a specific number. It is the case that in his report dated 22 October 2012, Professor Gabbay revised his previous assessment to a 0% degree of disability but the arbitrator did not accept that evidence.
In his report of 15 June 2011, Dr Prichard assessed the appellant's permanent degree of disability under the AMAG as '0 ‑ 10%', but went on to qualify that by observing that the AMAG did not cover all forms of impairment associated with asthma. In the circumstances, it is a reasonable inference that Dr Prichard's assessment of 0% to 10% was a reference to class 1 of table 8.
It was factually correct for the arbitrator to say that the consensus, or majority, view of the physicians who had reviewed the appellant was that he fell within class 1 of table 8. In any event, this contention is an allegation of an error in fact‑finding and does not involve a question of law. Even if made out, it would not therefore be capable of supporting the judgment below.
I would dismiss the notice of contention.

Conclusion

I would:
1.grant leave to appeal;
2.allow the appeal; and
3.set aside the decision of the primary judge.
CHANEY J: I agree with Newnes JA.