Malcolm v Narasell Pty Ltd as Trustee for Heath Newton Family Trust

DETERMINATION OF APPEAL PANEL
CITATION:	Malcolm v Narasell Pty Ltd as Trustee for Heath Newton Family Trust [2025] NSWPICMP 164
APPELLANT:	Michael James Malcolm
RESPONDENT:	Narasell Pty Limited as Trustee for Heath Newton Family Trust
APPEAL PANEL
MEMBER:	Marshal Douglas
MEDICAL ASSESSOR:	Gregory McGroder
MEDICAL ASSESSOR:	James Bodel
DATE OF DECISION:	14 March 2025
CATCHWORDS:	WORKERS COMPENSATION - Workplace Injury Management and Workers Compensation Act 1998; whether Medical Assessor (MA) erred by making a deduction of 50% under section 323(1) for pre-existing osteoarthritis; Appeal Panel noted that the appellant’s injury arose as a consequence of the work he did over the course of more than thirty years and that the appellant’s pre-existing disease at the commencement of his employment was in all likelihood mild; Held – the MA erred by not assuming in accordance with section 323(2) that the deductible portion for the purpose of section 323(1) is 10%; Medical Assessment Certificate revoked.

BACKGROUND TO THE APPLICATION TO APPEAL

On 19 December 2024, Michael James Malcolm, the appellant, lodged an Application to Appeal Against the Decision of a Medical Assessor. The medical dispute was assessed by Dr Robin Mitchell, a Medical Assessor, who issued a Medical Assessment Certificate (MAC) on 29 November 2024.
The appellant relies on the ground for appeal listed at s 327(3)(d) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act), being that the MAC contains a demonstrable error.
The delegate is satisfied that, on the face of the application, at least one ground of appeal has been made out. The Appeal Panel has conducted a review of the original medical assessment but limited to the ground(s) of appeal on which the appeal is made.
Rule 128 of the Personal Injury Commission Rules 2021 (the PIC Rules) and Procedural Direction PIC7 - Appeals, reviews, reconsiderations and correction of obvious errors in medical disputes set out the practice and procedure in relation to the medical appeal process under s 328 of the 1998 Act. An Appeal Panel determines its own procedures in accordance with r 128(1) of the PIC Rules.
The assessment of permanent impairment is conducted in accordance with the SIRA NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment, 4^th ed
1 March 2021 (the Guidelines) and the American Medical Association Guides to the Evaluation of Permanent Impairment, 5^th ed (AMA 5).

RELEVANT FACTUAL BACKGROUND

In 2005 the appellant commenced employment as a slaughterman at the Junee Abattoir. He was then either 26 or 27 years of age.
He ceased his employment on 1 August 2022. At that time his employer was Narasell Pty Ltd as Trustee for Heath Newton Family Trust, the respondent. It is not known whether the respondent was his employer for the entirety for the period at which he worked at the Junee Abattoir, but nothing in the appeal hinges on that, and the Appeal Panel merely notes this for completeness.
In a statement the appellant signed on 23 February 2023 he describes that his work as a slaughterman at the Junee Abattoir was heavy and physically demanding, andinvolved him standing all day, with the repetitive use of his legs, and repetitive twisting, turning, bending and crouching.
Around 2005 he commenced experiencing symptoms in his left knee and consulted an orthopaedic surgeon. Subsequently he developed symptoms in his right knee. These symptoms worsened over the ensuing years. It was because of the pain in his knees that he ceased his employment.
On November 2022 he had bilateral total knee joint replacements done simultaneously.
On 21 March 2024 the appellant’s solicitors wrote to the respondent advising it that the appellant claimed compensation from it for permanent impairment, of the order of 36% whole person impairment (WPI), that they said the appellant had from an injury to his knees sustained in the course of his employment with the respondent. They described the nature of the injury as being either a disease of gradual onset that was caused by duties the appellant carried out in his employment or alternatively an injury due to an aggravation of a disease in his knees that occurred as a consequence of the nature and conditions of his employment between 1989 and 18 July 2022, which seems to be the last day on which the appellant performed duties for the respondent.
In their correspondence to the respondent the appellant’s solicitors provided several particulars of the appellant’s claim. Those particulars included that the appellant’s “percentage impairment” was “30% whole person impairment in respect of the left knee” and “30% whole person impairment in respect of the right knee”. The particulars also detailed that there was to be a one-tenth “deduction for pre-existing conditions”. The particulars included that the “total whole person claimed” is “36%”.
The appellant’s solicitors attached to their correspondence relevant clinical records and several medical reports. These included a report of specialist surgeon Dr Geoffrey Miller dated 18 February 2024 who had examined the appellant at the request of the appellant’s solicitors on 23 January 2024, and who advised in his report that he assessed the appellant had 30% WPI of each lower extremity due to the knee replacements he had in each lower extremity. Dr Miller also advised that “one-tenth of his impairment is due to pre-existing underlying constitutional change”. He advised the appellant “therefore has a 20% whole person impairment” for each of his lower extremities”. It is obvious that Dr Miller made a mistake with his arithmetic, which the appellant’s solicitors corrected in their correspondence to the respondent.
The respondent’s solicitors arranged for the appellant to be examined by orthopaedic surgeon Dr Ron Haig on 21 May 2024. In a report dated 28 May 2024, Dr Haig advised that he assessed the appellant had 20% WPI for each knee. He also said that he believed “there is a deduction of 100% for each knee for I do not believe his osteoarthritis was caused by or contributed to by his work.”
On 2 July 2024 the respondent’s insurer wrote to the appellant, care of his solicitors, notifying him under s 78 of the 1998 Act that it denied liability to meet his claim for compensation for permanent impairment. It advised him, in substance, that its reason for that denial was that it relied on the report of Dr Haig, a copy of which it attached to its notice.
Thereupon the appellant instituted proceedings in the Personal Injury Commission (Commission) by filing an Application to Resolve a Dispute (ARD), dated 16 September 2024, by which he sought the Commission determine his claim for compensation for permanent impairment. Following the respondent filing a reply to the ARD, a delegate of the President of the Commission referred various medical disputes relating to the appellant’s claim to the Medical Assessor to assess.
The Medical Assessor examined the appellant on 13 November 2024 so as to assess those medical disputes, and as said issued the MAC on 29 November 2024. In that he advised that he assessed the appellant’s overall WPI relating to each lower extremity was 20%. He explained this was because the appellant had achieved a fair result from his total knee replacements. No issue has been raised in the appeal regarding that.
The Medical Assessor expressed his view, that the appellant had a pre-existing condition of, “osteoarthritis of each knee joint that developed over a period of time in the absence of any frank injury”. The Medical Assessor said this was, “indicated in the history given,” and “confirmed in the subsequent investigations undertaken”.
The Medical Assessor made brief comments on the relevant investigations that had been done, the earliest of which was a MRI of the appellant’s left knee on 28 May 2005 that the Medical Assessor noted, “indicated articular cartilage irregularity, predominantly of the central and medial femoral condyle articular surface” and which did not reveal pathology,
“to account for medial joint pain”. The earliest investigation done of the appellant’s right knee was an X-ray on 28 March 2018, which the Medical Assessor noted revealed, “moderate osteoarthritic changes with loss of the medial compartment joints space together with small marginal osteophytes in the patellofemoral compartment in a small superior patella spur.”
It is apparent from the MAC that the Medical Assessor considered the appellant’s pre-existing osteoarthritis contributed a proportion to the permanent impairment the appellant had from the injury to his knees. He made a deduction of 50% for that proportion pursuant to s 323(1) of the 1998 Act, providing the following reasons for doing so within s11b of the MAC.

“Osteoarthritis had clearly developed over a period of time as indicated in the history given by Mr Malcolm and confirmed in the subsequent investigations undertaken.

He claims that the nature and conditions of his work of prolonged standing on concrete
floors particularly while wearing gumboots contributed to his osteoarthritic condition of
both the left and right knees.
Whilst the extent of the deduction is difficult or costly to determine, the available evidence, in my opinion, is that a 10% deduction is insufficient to take into account his severe osteoarthritis which was predominantly of a constitutional nature. However, 35 years of standing on hard concrete and involved in arduous manual handling, at least in the earlier years before mechanisation became commonplace, would have been a significant contributing factor to the development of the degenerative changes identified
radiologically. Therefore, on balance, I feel that the contribution between the long period of working as a slaughterman would best be considered as 50% of the assessed impairment level determined, and that 50% was due to the constitutional osteoarthritic condition.”

The Medical Assessor consequently certified that, upon making that deduction, the appellant had 10% WPI relating to the left knee and 10% WPI relating to the right knee from the injuries to his knees. The Medical Assessor certified that the degree of the appellant’s permanent impairment from the injury to his knees, when the impairment for each knee was combined, amounted to 20% WPI. The Appeal Panel observes that, that combination is incorrect and that in accordance with the Combined Values Chart in AMA5 the correct combination based on the figures the Medical Assessor assessed is 19% WPI.

PRELIMINARY REVIEW

The Appeal Panel conducted a preliminary review of the original medical assessment in the absence of the parties and in accordance with the Procedural Direction PIC7.
As a result of that preliminary review, the Appeal Panel determined that it was not necessary for the appellant to undergo a further medical examination. This is because, firstly, no issue has been raised regarding the findings the Medical Assessor made from his examination of the appellant, and secondly, the Appeal Panel considers the Medical Assessor conducted a thorough examination of the appellant such that the Panel can rely on his findings. Hence no point would be served by subjecting the appellant to a further examination.

EVIDENCE

The Appeal Panel has before it all the documents that were sent to the Medical Assessor for the original medical assessment and has taken them into account in making this determination.

SUBMISSIONS

Both parties made written submissions. They are not repeated in full, but have been considered by the Appeal Panel.
In summary, the appellant submitted that the Medical Assessor has assumed that he had pre-existing osteoarthritis and that assumption is inconsistent with the evidence. The appellant said that there is no documented history of his having knee pain or osteoarthritis before he commenced his employment as a slaughterman and that there are no clinical findings or imaging studies pre-dating the commencement of his employment.
The appellant submitted that the Medical Assessor did not have proper regard to the fact that he undertook physically demanding work over a period of 33 years.
The appellant submitted that the Medical Assessor did not provide sufficient reasons for the deduction he made.
In reply, the respondent submitted that the MRI scans done in 2005 and 2018 demonstrated the presence of an existing degenerative condition which was aggravated by the appellant’s work. The respondent submitted the Medical Assessor identified that pre-existing condition.
The respondent submitted that there was evidence in the form of the reports of Dr Haig and also a report of Dr Clout that revealed the appellant had a pre-existing condition. The Appeal Panel notes that Dr Clout is an orthopaedic surgeon the appellant consulted in
September 2022 and who carried out the appellant’s knee replacements at the Wagga Wagga Base Hospital on 18 November 2022. The respondent noted that Dr Clout in his report advised that the appellant’s bilateral varus osteoarthritis of his knees” is “consistent with overuse and likely contributed to by his 30 years of employment with the abattoir”. The respondent noted that Dr Haig had observed that the appellant had significant pre-degenerative changes prior to his ceasing work and that the appellant’s osteoarthritis had progressed over decades due to the degenerative changes consistent with the appellant’s age and mechanical factors.
The respondent submitted that the Medical Assessor acknowledged the contribution of the appellant’s 33 year history as a slaughterman to his injury, and detailed various parts in the MAC where the Medical Assessor had noted the work the appellant had undertaken. The respondent submitted that the deduction the Medical Assessor made “balanced” the appellant’s cumulative workplace contributions and the medical evidence.
The respondent submitted that the Medical Assessor provided adequate reasons for the deduction he made under s 323(1).

FINDINGS AND REASONS

The procedures on appeal are contained in s 328 of the 1998 Act. The appeal is to be by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made.
In Campbelltown City Council v Vegan [2006] NSWCA 284 the Court of Appeal held that the Appeal Panel is obliged to give reasons.
The appellant’s injury to his knees was as a consequence of the work he did as a slaughterman over the course of 33 years from the age of either 26 or 27. In such circumstance, the pre-existing condition for which a deduction can be made under s 323(1) of the 1998 Act, must be a condition that the appellant had at the start of his employment as a slaughterman.[1] Section 323(1) cannot be engaged if the condition is a co-existing condition.[2] If the appellant had a pre-existing condition at the time he started his employment as a slaughterman, even if asymptomatic at time, and that condition is a contributing factor to the permanent impairment he now suffers from the injuries to his knees, then there must be a deduction for that proportion of his permanent impairment that is due to the pre-existing condition.[3]
[1] Cullen v Woodbrae Holdings Pty Ltd [2015] NSWSC 1416 (Cullen) at [47]-[58]; Craigie v Farcloth & Reynolds Pty Ltd [2021] NSWSC 1211; Oswell v Sublime Install Pty Ltd [2024] NSWSC 1586 at [85]-[92].
[2] Cullen at [43].
[3] Cullen at [46]; Vitaz v Westform (NSW) Pty Ltd [2011] NSWCA 254 at [43]
The Appeal Panel considers that in this case the Medical Assessor was correct to find that the appellant had a pre-existing condition, although the Appeal Panel considers that the Medical Assessor’s reasons for his conclusion were sparse and in that regard lacked cogency. This is because he did not engage with all the relevant evidence pertaining to that issue, and hence he did not, in the Appeal Panel’s view sufficiently expose his path of reasoning for his finding.
Further, the Appeal Panel considers that the Medical Assessor was correct to conclude that a proportion of the appellant’s permanent impairment from his injury was due to the pre-existing condition, but again the Appeal Panel considers that the Medical Assessor’s reasons for his finding were sparse in that he did not engage with relevant evidence pertaining to that point.
The Appeal Panel also considers that the Medical Assessor’s reasoning was sparse and consequently he did not adequately expose the path of his reasons for, firstly, why he considered assuming in accordance with s 323(2) that the deductible proportion for s 323(1) is 10% was at odds and secondly, why he considered the deductible proportion is 50%.
The Appeal Panel therefore considers that the Medical Assessor made an error with respect to the deduction he made under s 323(1) and that that error is such that the MAC contains a demonstrable error.
The evidence relevant to whether the appellant suffered a pre-existing condition, and the extent to which that pre-existing condition contributes to the permanent impairment he has from his injury to his knees, included the fact that the appellant was only 26 or 27 years of age at the time he commenced his employment. The appellant’s evidence in a statement he signed on 23 September 2022 is that he played rugby league and hockey until aged about
26 years old, that is around the time he commenced his employment as a slaughterman. It can be inferred from that evidence, that the appellant placed significant load on his knees until that age from his participation in those pastimes.
Osteoarthritis is a constitutional condition. Generally, it does not develop in a young adult, except in the circumstance where the young adult has suffered a frank injury to his or her knees or has undertaken activity that has placed significant load on the knees. The osteoarthritis, upon its onset, may remain asymptomatic for years, indeed decades, or only manifest in mild symptoms such that it has no real impact on the young adult’s life.
Once the disease has started, it will progress in accordance with its natural pathological path. If however significant load is placed on the joints containing the disease after its onset or the person suffers injury to the joints, then that is likely to either or both aggravate the underlying disease such that symptoms will manifest from it or accelerate the rate at which the disease progresses, such that symptoms will manifest at an earlier time than if the load had not been placed on the joint or injury had not occurred.
Given the appellant’s sporting activities, which as the Appeal Panel said would have placed significant load on his knees prior to his commencing employment with the respondent, it is likely that osteoarthritic changes had commenced in his knee prior to his starting employment as a slaughterman.
The evidence is that from the time the appellant commenced his employment as a slaughterman, he undertook arduous duties. The work he did placed substantial load on his knees. His only other pastimes after he commenced his work as a slaughterman were shooting and fishing, which he said in his statement did not involve walking because he used a four-wheel drive or a quad bike. His engagement in those activities consequently is unlikely to have placed any significant load on his knees. His activities of daily living would only have placed a normal load on his knees. In other words, absent the arduous duties he undertook in his employment as a slaughterman, there was no factor that would have aggravated or worsened the osteoarthritis in his knees or accelerated the progress of it, and the disease would have just progressed in accordance with its normal pathological path.
The appellant’s impairment from his injury has been assessed by reference to the fact that he now has artificial joints in his knees. Absent the work he did as a slaughterman, he would not have needed the knee replacements at the time he did, and indeed as to whether he would ever have required them, had the disease only progressed in accordance with its natural pathological path, is a matter of complete speculation. It may be that he would never have required the knee replacements and it may also have been that the osteoarthritis may have manifested in very minimal symptoms and minimal impairment to the appellant.

It is the case however that the osteoarthritis that likely pre-existed in the appellant’s knees before he commenced employment with the respondent, contributes to his current impairment because without that osteoarthritis having existed it necessarily could not have worsened and he would not have needed knee replacements.
Hence, as the Appeal Panel has already noted, the Medical Assessor was right to conclude that the appellant had a pre-existing condition and that, that pre-existing condition contributed to his permanent impairment from his injury, although the Medical Assessor’s reasons for his findings were sparse and not adequately explained.
As also indicated earlier, the Appeal Panel considers that the Medical Assessor did not adequately explain why assuming under s 323(2) that the deductible proportion for s 323(1) is 10% is at odds with the evidence. The only explanation he provided was, in substance the osteoarthritis is a constitutional condition. But the evidence that the Appeal Panel has just discussed relating to the extent of the osteoarthritis in the appellant’s knee at the time he commenced employment as a slaughterman and how the load on his knees as a consequence of that employment would have aggravated and accelerated the rate at which the disease progressed, far in excess of what would normally have occurred in accordance with its normal pathological process, reveals that a more thorough explanation was required of the Medical Assessor to reveal why he thought assuming the deductible proportion is 10% is at odds with the evidence.
It is simply not possible to determine the exact proportion that the pre-existing osteoarthritis contributes to the impairment the appellant now has, which is as said is rated by virtue of his having artificial joints. Hence, it is difficult to determine the deductible proportion. Making an assumption that it is 10% is not at odds with the evidence the Appeal Panel has just analysed.
As said, in the Appeal Panel’s view the Medical Assessor did not adequately analyse that evidence and hence his reasons for his conclusion that s 323(2) should not be engaged is inadequate, which amounts to an error.
The Appeal Panel, in correcting that error, applies s 323(2) and consequently makes a deduction under s 323(1) of 10%.
For these reasons, the Appeal Panel has determined that the MAC issued on 29 November 2024 should be revoked, and a new MAC should be issued. The new certificate is attached to this statement of reasons.

WORKERS COMPENSATION DIVISION

APPEAL PANEL

MEDICAL ASSESSMENT CERTIFICATE

Injuries received after 1 January 2002

Matter number:	W26310/24
Applicant:	Michael James Malcolm
Respondent:	Narasell Pty Limited as Trustee for Heath Newton Family Trust

This Certificate is issued pursuant to s 328(5) of the Workplace Injury Management and Workers Compensation Act1998.

The Appeal Panel revokes the Medical Assessment Certificate of Medical Assessor Robin Mitchell and issues this new Medical Assessment Certificate as to the matters set out in the Table below:

Table - whole person impairment (WPI)

Body Part or system	Date of Injury	Chapter, page and paragraph number in NSW workers compensation guidelines	Chapter, page, paragraph, figure and table numbers in AMA 5 Guides	% WPI	Proportion of permanent impairment due to pre-existing injury, abnormality or condition	Sub-total/s % WPI (after any deductions in column 6)
Left knee	22.06.2022	Paragraph 3.29; modified table 17.35 page 21	Table 17.33	20%	1/10	18%
Right knee	22.06.2022	Paragraph 3.29; modified table 17.35 page 21	Table 17.33	20%	1/10	18%
Total % WPI (the Combined Table values of all sub-totals)					33%

The above assessment is made in accordance with the SIRA NSW Guidelines for the Evaluation of Permanent Impairment for injuries received after 1 January 2002.

[2025] NSWPICMP 164

14 March 2025