Marks v Secretary, Department of Communities and Justice

[2021] NSWSC 306

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Marks v Secretary, Department of Communities and Justice [2021] NSWSC 306

Hearing dates:

9 March 2021

Date of orders:

31 March 2021

Decision date:

31 March 2021

Jurisdiction:

Common Law

Before:

Simpson AJ

Decision:

See [71] and [72]

Catchwords:

ADMINISTRATIVE LAW – whether reviewable error of law – jurisdictional error – where relief sought includes an order in the nature of certiorari – where appeal panel found demonstrable error in decision-maker’s approach – where demonstrable error included applying the wrong test – where appeal panel proceeded to its own assessment – whether appeal panel erred in identifying error in decision-maker’s application of the wrong test – whether appeal panel itself applied the wrong test

STATUTORY INTERPRETATION – subordinate legislation – scope of empowering provisions – where the primary legislation provides for a deduction for any proportion of an impairment that is due to a previous injury or pre-existing condition or abnormality – where the primary legislation provides that impairment is to be assessed in accordance with guidelines – where the application of the guidelines would require a nil deduction for a pre-existing but asymptomatic psychiatric injury or condition – whether the guidelines are inconsistent with the primary legislation – whether the guidelines are beyond power

WORKERS COMPENSATION – medical assessment – assessment of degree of permanent impairment – deduction for pre-existing impairment – where claimant has suffered previous psychiatric injury – where condition related to previous psychiatric injury was asymptomatic at time of present injury – where asymptomatic condition contributed to impairment suffered as a result of present injury – whether any deduction should be made

Legislation Cited:

State Insurance and Care Governance Act 2015 (NSW)

Supreme Court Act 1970, ss 69, 75

Workers Compensation Act 1987 (NSW), ss 9, 66

Workplace Injury Management and Workers Compensation Act 1998 (NSW), ss 321, 323(1), 328, 376

Cases Cited:

Broadspectrum(Australia) Pty Ltd v Fiona Louise Wills [2018] NSWSC 1320

Broad-spectrum (Australia) Pty Ltd v Wills [2019] NSW WCC MA 13

Broadspectrum(Australia) Pty Ltd v Wills [2019] NSWSC 1797

Cole v Wenaline Pty Ltd [2010] NSWSC 78

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

Frost v Kourouche [2014] NSWCA 39

Henderson v QBE Insurance (Australia) Ltd [2013] NSWCA 480

Mathew Hall Pty Ltd v Smart [2000] NSWCA 284

Siddik v Work Cover Authority of NSW [2008] NSWCA 116

Category:

Principal judgment

Parties:

David Marks (Plaintiff)
Secretary, Department of Communities and Justice (First Defendant)
Appeal Panel: John Wynyard, Dr Julian Parmegiani, Dr Michael Hong (Second Defendant)
Registrar, Workers Compensation Commission of NSW (Third Defendant)

Representation:

Counsel:
B G McManamey (Plaintiff)
L Morgan (First Defendant)
Submitting appearance (Second and Third Defendants)

Solicitors:
Law Partners (Plaintiff)
Moray & Agnew (First Defendant)

File Number(s):

2020/290869

 Decision under appeal 

Court or tribunal:

Workers Compensation Commission of NSW

Jurisdiction:

Civil

Date of Decision:

14 August 2020

Before:

Appeal Panel

File Number(s):

4986/19

Judgment

1. SIMPSON AJ: By summons filed on 8 October 2020, the plaintiff, David Marks, seeks declaratory relief under s 75 of the Supreme Court Act 1970 (NSW) and, pursuant to s 69 thereof, judicial review of a decision of an Appeal Panel constituted under s 328 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“the WIM Act”) of 14 August 2020. The decision was made on appeal from a medical assessment by an approved medical specialist (“AMS”) under Part 7 of the WIM Act.

2. Review under s 69 of the Supreme Court Act is available only in respect of jurisdictional error, or, where the relief sought is an order in the nature of certiorari, error of law on the face of the record.

3. Three defendants are named in the summons. They are, respectively, Secretary, Department of Communities and Justice (the plaintiff’s employer); the named members of the Appeal Panel; and the Registrar of the Workers Compensation Commission of NSW (“the Commission”). The second and third defendants have filed submitting appearances. The first defendant is the only active defendant.

4. The substantive orders sought are expressed to be:

• a declaration that the “Decision and the Statement of Reasons for Decision of the Appeal Panel” are void and of no effect;

• an order setting aside the “Decision and the Statement of Reasons for Decision”;

• an order that the matter be remitted to the Appeal Panel and/or the Registrar to be determined according to law.

5. The application calls for consideration of certain provisions of the WIM Act, which is to be read in conjunction with the Workers Compensation Act 1987 (NSW) (“the WC Act”, also referred to as “the 1987 Act”). Since the determinations relevant to these proceedings substantial amendments have been made to the legislation: Personal Injury Commission Act 2020 (NSW). References that follow are to the legislation as it existed at the relevant time (but are expressed in the present tense). By s 9 of the WC Act a worker who has suffered injury arising out of or in the course of employment is entitled to compensation in accordance with the WC Act. By s 66 thereof, where the injury results in a degree of permanent impairment greater than 10%, the entitlement extends to compensation in a lump sum calculated in accordance with s 66(2).

6. The procedures by which compensation under the WC Act is to be assessed are contained in the WIM Act. Part 7 of Chapter 7 (ss 319-331) deals with “Medical assessment”. Pursuant to s 320, “approved medical specialists” (generally known as “AMS’s”) are appointed for the purposes of Ch 7, Part 7. By s 321 a medical dispute may be referred for assessment under Part 7 by a court, the Commission or the Registrar thereof. By s 319 a “medical dispute” is defined to include a dispute between a claimant and the person on whom the claim is made about the degree of permanent impairment resulting from the injury.

7. By s 376 of the WIM Act the State Insurance Regulatory Authority (“the Authority”), constituted under the State Insurance and Care Governance Act 2015 (NSW), may issue (and has issued) guidelines with respect, inter alia, to the assessment of the degree of permanent impairment of an injured worker as a result of an injury.

8. Further relevant provisions of the WIM Act are fully set out below.

1. Assessment of impairment

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

   …

2. Deduction for previous injury or pre-existing condition or abnormality

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

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

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

   (3)   …

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

   …”

3. Medical Assessment Certificate

   (1)   The approved medical specialist to whom a medical dispute is referred is to give a certificate (a medical assessment certificate) as to the matters referred for assessment.

   (2)   A medical assessment certificate is to be in a form approved by the Registrar and is to:

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

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

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

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

   …

4. 26   Status of medical assessments

   (1)     An assessment certified in a medical assessment certificate pursuant to a medical assessment under this Part is conclusively presumed to be correct as to the following matters in any proceedings before a court or the Commission with which the certificate is concerned—

   (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,

   …

   (2)   As to any other matter, the assessment certified is evidence (but not conclusive evidence) in any such proceedings.

   …

327   Appeal against medical assessment

(1)     A party to a medical dispute may appeal against a medical assessment under this Part, but only in respect of a matter that is appealable under this section and only on the grounds for appeal under this section.

(2)     A matter is appealable under this section if it is a matter as to which the assessment of a medical assessor certified in a medical assessment certificate under this Part is conclusively presumed to be correct in proceedings before a court or the Commission.

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

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

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

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

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

(4)    An appeal is to be made by application to the Registrar. The appeal is not to proceed unless the Registrar is satisfied that, on the face of the application and any submissions made to the Registrar, at least one of the grounds for appeal specified in subsection (3) has been made out.

(5)    …

(6)     The Registrar may refer a medical assessment for further assessment under section 329 as an alternative to an appeal against the assessment (but only if the matter could otherwise have proceeded on appeal under this section).

328   Procedure on appeal

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

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

…

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

…

329   Referral of matter for further medical assessment or reconsideration

(1)    A matter referred for assessment under this Part may be referred again on one or more further occasions for assessment in accordance with this Part, but only by—

(a) the Registrar as an alternative to an appeal against the assessment as provided by section 327, or

(b)     a court or the Commission.

(1A)    …

(2)   A certificate as to a matter referred again for further assessment or reconsideration prevails over any previous certificate as to the matter to the extent of any inconsistency.

9. The key provisions for present purposes are ss 322(1), 323(1) and 323(4).

10. Guidelines issued under s 376 of the WIM Act generally adopt similar guidelines issued by the American Medical Association (AMA5). Relevant NSW Guidelines contain the following:

“Part 2 – PRINCIPLES OF ASSESSMENT

1.6    The following is a basic summary of some key principles of permanent impairment assessments:

a.   assessing permanent impairment involves clinical assessment of the claimant as they present on the day of assessment taking account the claimant’s relevant medical history and all available relevant medical information to determine:

•   whether the condition has reached Maximum Medical Improvement (MMI)

•   whether the claimant’s compensable injury/condition has resulted in an impairment.

•   whether the resultant impairment is permanent.

•   the degree of permanent impairment that results from the injury.

•   the proportion of permanent impairment due to any previous injury, pre-existing condition or abnormality, if any, in accordance with diagnostic and other objective criteria as outlined in these Guidelines.

b.   Assessors are required to exercise their clinical judgment in determining a diagnosis when assessing permanent impairment and making deductions for pre-existing injuries/conditions.

c.   In calculating the final level of impairment, the assessor needs to clarify the degree of impairment that results from the compensable injury/condition. Any deductions for pre-existing injuries/conditions are to be clearly identified in the report and calculated. …

d.   The referral for an assessment of permanent impairment is to make clear to the assessor the injury or medical condition for which an assessment is sought.

…

Deductions for pre-existing conditions or injuries

1.28   In assessing the degree of permanent impairment resulting from the compensable injury/condition, the assessor is to indicate the degree of impairment due to any previous injury, pre-existing condition or abnormality. This proportion is known as ‘the deductible proportion’ and should be deducted from the degree of permanent impairment determined by the assessor …

…

Adjustment for the effects of treatment

1.32   Where the effective long term treatment of an illness or injury results in apparent substantial or total elimination of the claimant’s permanent impairment, but the claimant is likely to revert to the original degree of impairment if treatment is withdrawn, the assessor may increase the percentage of WPI by 1%, 2% or 3%. This percentage should be combined with any other impairment percentage, using the Combined Values Chart. …

…”

11. In issuing the Guidelines, (at 1.10) the Authority has expressly excluded the application of AMA5 so far as it relates to psychiatric and psychological disorders, and has created its own Guideline which is to be found in Chapter 11. Relevantly, Chapter 11 contains the following provisions:

“Permanent Impairment

11.7   A psychiatric disorder is permanent if, in your clinical opinion, it is likely to continue indefinitely. Regard should be given to:

•   the duration of impairment

•   the likelihood of improvement in the injured worker’s condition.

•   whether the injured worker has undertaken reasonable rehabilitative treatment

•   any other relevant matters.

• …

• Pre-existing impairment

11.10   To measure the impairment caused by a work-related injury or incident, the psychiatrist must measure the proportion of WPI due to a pre-existing condition. Pre-existing impairment is calculated using the same method for calculating current impairment levels. The assessing psychiatrist uses all available information to rate the injured worker’s pre-injury level of functioning in each of the areas of function. The percent impairment is calculated using the aggregate score and median class score using the conversion table below. The injured worker’s current level of WPI % is then assessed, and the pre-existing WPI % is subtracted from their current level, to obtain the percentage of permanent impairment directly attributable to the work-related injury. If the percentage of pre-existing impairment cannot be assessed, the deduction is 1/10^th of the assessed WPI.” 

12. Tables 11.1 to 11.6 set out Psychiatric Impairment Rating Scales (PIRS) with respect to six subject matters. These are intended to be, and are, used by AMS’s assessing the degree of permanent impairment of a claimant caused by psychiatric or psychological disorders.

Factual background

13. The underlying facts may be stated as follows.

14. From 2015 the plaintiff was employed by the first defendant in the Office of the NSW Sheriff. He was subjected to a degree of harassment and vilification that resulted in psychological and/or psychiatric injury. He made a claim for compensation pursuant to s 66 of the WC Act. After initially denying liability for the claim, on 2 October 2018 the first defendant accepted liability. The claim was referred to an AMS, Dr Wasim Shaikh, for assessment of the degree of “whole person impairment” in accordance with s 321 of the WIM Act. (While s 321 speaks of “permanent impairment”, the language used in medical assessments is invariably “whole person impairment” or “WPI”.)

15. The first defendant relied on a report by a psychiatrist, Dr Bisht, dated 2 July 2019, who considered that the assessment should not proceed because, in his opinion, the plaintiff had not achieved maximum medical improvement (see Guidelines, 1.6a extracted at [10] above). The assessment nevertheless proceeded. No issue was raised as to any pre-existing condition or impairment that would justify deduction from the assessed degree of impairment under s 323 of the WIM Act.

16. Although it has limited bearing on the issues raised in the present application, in the interests of completeness reference should be made to the material presented to AMS Shaikh. There are some puzzling features in that material. Since the primary material is not in the papers presented to this Court, the following is drawn from the Statement of Reasons of the Appeal Panel the subject of this application.

17. The plaintiff provided a statement of 27 July 2018 and a supplementary statement of 17 March 2019. In the first, he stated that, prior to his employment by the first defendant, he had been a retained fireman employed by “Fire Rescue NSW”. He made no mention of previous employment in the NSW Police Force which, as will be seen below, is of some considerable relevance. The plaintiff did disclose in his first statement that he had, about ten years previously, suffered post traumatic stress disorder (“PTSD”), which had abated. He said that, by reason of a confidentiality agreement, he was precluded from speaking about the circumstances of the injury that gave rise to that condition, or his employer at the time. In the supplementary statement of 17 March 2019 the plaintiff emphasised that the condition had resolved and was “completely irrelevant” to the condition for which he was seeking compensation. He again said that he was not at liberty to discuss the details of the previous condition “due to a gag order”. He noted that prior to commencing employment with the first defendant he had been required to complete rigorous psychological testing.

18. Also before AMS Shaikh were a number of medical reports. One such report was provided on behalf of the plaintiff, for medico legal purposes, by Associate Professor Michael Robertson who also recorded a previous history of PTSD, although that was said to have been in 2001. Associate Professor Robertson expressed the opinion:

“In the final analysis, the nature and conditions of Mr Marks’ employment with the Sheriff’s Office in Liverpool Court was the primary cause of the current presentation. The diagnosis is either an adjustment disorder with anxiety and depressed mood with some cross-cutting features of PTSD. It is also possible that this presentation is an exacerbation or recrudescence of the previous (presumed) PTSD which was sustained in circumstances ostensibly unrelated to this employment.” 

19. There was also a report of 17 May 2018 from the plaintiff’s then treating psychiatrist, Dr Nagesh. Dr Nagesh diagnosed depressive and anxiety symptoms for the preceding three years:

“… in the context of multiple psycho-social stresses, namely stress at work. He reports feeling stressed and anxious for the last fifteen years which has been worse lately where he finds it difficult to handle …” 

20. Dr Nagesh recorded a history of PTSD 17 years earlier. Clinical notes from Dr Nagesh of 17 May 2018 recorded:

“Feeling depressed and anxious for the last 15 years, cannot handle stress, poor sleep, lost weight in one month, worrying all the time, worries about everything …” ([47])

21. On 23 October 2019 AMS Shaikh examined the plaintiff. He provided a medical assessment certificate (“MAC”) on 24 October. He diagnosed the plaintiff as suffering from “major depressive disorder”. AMS Shaikh assessed the plaintiff’s degree of whole person impairment at 19%. He noted that the plaintiff had previously suffered from PTSD “from witnessing a traumatic event in the past” but also noted that, although the plaintiff had “had a couple of sessions” with a psychiatrist, he had not received any treatment in the years preceding the incidents that gave rise to the injury the subject of the assessment.

22. AMS Shaikh considered that the plaintiff’s treatment in respect of the depressive illness had led to an improvement in his mental health and to a significant reduction in impairment. In recognition of “the treatment effect”, for which cl 1.32 of the Guidelines (see [10] above) provides, he added 2% to the assessment, and found a total permanent impairment of 21%. He declined to make any deduction under s 323(1) representing any contribution to the impairment made by a pre-existing condition. In answer to a specific question whether any proportion of the whole person impairment was due to a previous injury, pre-existing condition or abnormality he answered:

“No. Whilst there is evidence of past PTSD, his mental health was seemingly stable prior to the nominated work issue.” 

23. Pursuant to s 329(1)(a) of the WIM Act the first defendant sought a referral for further medical assessment. The basis for the application was the failure of another employer and another insurer to comply with directions for production of documents evidencing an earlier claim by the plaintiff for compensation for psychiatric injury. (This was the PTSD to which AMS Shaikh expressly referred). On 10 January 2020, a delegate of the Registrar referred the matter to AMS Shaikh for further assessment.

24. Additional material was provided. That material showed that, in 2011, the plaintiff had made a similar claim for compensation arising out of his service with the NSW Police Force. He had been (or perceived that he had been) threatened with a gun by a colleague. In 2011 an AMS, Dr Lana Kossoff, diagnosed the plaintiff as suffering from PTSD and assessed his degree of permanent impairment at 22%. AMS Kossoff considered then that the plaintiff’s condition had become chronic and was unlikely to remit or significantly improve, despite further treatment.

25. The plaintiff provided a further statement, dated 31 January 2020. As recorded by the Appeal Panel, he said that when he began work with the first defendant:

“… I felt like I was in a great place in life, and had moved on a[nd] recovered from the 2009 workplace incident [sic]. I stopped receiving any psychological treatment and/or medication in 2012 and did not suffer from any relapse. I feel like I made a full recovery.” 

26. The first defendant contended to AMS Shaikh that a deduction pursuant to s 323(1) representing the proportion of the plaintiff’s permanent impairment attributable to the earlier condition should be made from the assessed level of permanent impairment.

27. On 14 April 2020 having reviewed the materials again, including the additional material, AMS Shaikh issued a second MAC. He certified:

“The available documentation confirms that Mr Marks had suffered Post-Traumatic Stress Disorder in the past and been in receipt of treatment for the same. There is no evidence to suggest the experience of psychiatric disturbance, or receipt of psychiatric treatment in the years preceding nominated work injury [sic].

I do not have reason to change the opinions expressed in the previous medical assessment certificate.” 

28. Pursuant to s 327 of the WIM Act the first defendant appealed. As mentioned above, by s 327(3) the available grounds for appeal are limited to those set out in that subsection. The sole ground of appeal invoked by the first defendant was stated to be:

“The medical assessment certificate contains a demonstrable error.”

The appeal was referred to the Appeal Panel constituted by the three members named as the second defendant, being (as required by s 328(1)) an Arbitrator and two approved medical specialists.

29. The asserted error was particularised in submissions provided to the Appeal Panel as:

"(a)   The failure to engage with the historical medical evidence, including the medical assessment certificate of Dr Lana Kossoff, approved medical specialist dated 17 January 2001 …;

(b)   Failure to obtain a detailed history of the worker’s symptomatology and level of functioning following his PTSD injury … so as to delineate, when assessing impairment utilising the PIRS, between disabilities flowing from the earlier injury and those alleged to arise due to the injury the subject of this claim; and

(c) Failure to have regard to the evidence of the worker’s significant pre-existing psychiatric condition when considering the application of s 323 of the [WIM] Act.”

30. The submissions quoted extensively from the findings of AMS Kossoff, and included the following:

“14.   It is also submitted that in failing to delineate, with any degree of clarity or at all, the symptoms and disabilities found to have arisen from the prior PTSD which was the subject of Dr Kossoff’s MAC (and was of itself conclusively presumed to be correct as to the degree of permanent impairment resulting from the PTSD – see 326(1)(d) of the [WIM] Act) and the symptoms and disabilities which allegedly independently arose from the injury herein referred represents a failure to provide adequate reasons in support of the finding that the worker suffered a 21% WPI due to injury deemed on 6 February 2018.” 

31. There was no challenge to the allowance by AMS Shaikh of an additional 2% representing “the treatment effect”.

The decision of the Appeal Panel

32. The Appeal Panel found demonstrable error in the approach of the AMS, largely by what it perceived as a failure by AMS Shaikh to give adequate reasons in a number of respects for the approach he took to the s 323(1) question (see Statement of Reasons at [96], [107], [110], [115]). It considered that the failure of AMS Shaikh to refer specifically to the documentation relevant to the earlier diagnosis of PTSD was indicative of failure to consider the content of that documentation (at [116]).

33. Additionally, the Appeal Panel considered (at [105]) that the AMS applied the “wrong test” by considering that the fact that the plaintiff was asymptomatic prior to the injury in question was “determinative” of whether any s 323(1) deduction should be made. Pursuant to s 328(5) of the WIM Act the Appeal Panel revoked the MAC, proceeded to its own assessment of whole person impairment and issued a new certificate. It adopted AMS Shaikh’s assessment of 19%, but:

1. did not adopt the allowance of an additional 2% to represent the “treatment effect” and revoked the MAC in that respect; and

2. applied, pursuant to s 323(1), a deduction of 25% representing the proportion of the permanent impairment it found to be attributable to the previous condition.

   34. The Appeal Panel regarded the history of harassment and vilification during the plaintiff’s employment in the Office of the Sheriff as “the cause of [his] decompensation” ([111]). However, it also considered that the similarity of “the two causes of [his] PTSD” was “of some moment”, and that subsequent decompensation was contributed to by his earlier experience while serving in the Police Force. It was for that reason that it reduced the assessment of whole person impairment of 19% by 25%, yielding an ultimate assessment of 14%.

   35. The Appeal Panel rejected a submission made on behalf of the plaintiff that the question of deduction under s 323(1) was to be determined by reference to Guideline 11.10. It relied on, and extracted passages from, a decision of an earlier Appeal Panel, constituted by the same Arbitrator and one of the approved medical specialists who constituted the Appeal Panel in the present case, which had expressly declined to apply Guideline 11.10 (Broad-spectrum (Australia) Pty Ltd v Wills [2019] NSW WCC MA 13). In that case the Appeal Panel explained its reasoning as follows:

   “58. The method set out in Chapter 11.10 of assessing pre-existing conditions is contrary to the development of the principles applicable to the application of s 323 … Those principles require that the first inquiry is as to whether there is whole person impairment caused by the injury, the second is as to its extent or degree, the third is as to whether a pre-existing condition relevantly has contributed to that impairment, and the fourth is the quantification of the contribution. Such a condition does not have to be symptomatic and may contribute to the level of impairment caused by the subject injury even if it were asymptomatic. In such situations, a clear explanation is required. Assumption or hypothesis is not sufficient, and there must be a reference to the relevant evidence to show the path of reasoning by which the assessment was reached.

   59.   Chapter 11.10 on the other hand would seem to have an outcome that is at odds with those principles … Chapter 11.10 is entitled ‘Pre-existing Impairment’ which gives an indication of the limitation the exercise required by the Guideline illustrates. In the present situation … there is no evidence supporting a pre-existing impairment, although there was at least one pre-existing condition. In these circumstances, the exercise of using the same method of calculating pre-existing condition as is set down for the calculating of the current impairment it is an unhelpful task. It stands to reason that if a worker has not suffered an injury at the outset of his/her employment, it may very well be that he/she is not suffering from any impairment. It may be, as in the present case, that the person is functioning with a pre-existing condition, but if it is asymptomatic then the result of the exercise will be that at the time just before the injury the injured worker had no whole person impairment that was due to his/her pre-existing condition.

   60.   Although the last sentence of Chapter 11.10 mandates a finding of 1/10^th if the percentage of pre-existing impairment could not be assessed, in the case of a worker carrying a pre-existing condition which was asymptomatic the percentage of pre-existing impairment can easily be assessed. In the present case, the assessment would be nil. In all the categories of the Psychiatric Impairment Rating Scale, Ms Wills would be assessed as a class 1 value, that is to say, prior to the subject injury, she had either no deficit, or a minor deficit attributable to the normal variation in the general population. The logical application of that method would be that Ms Wills is entitled to the full assessment, without deduction.

   62.   Having complied with the requirement that we measure the WPI due to a pre-existing condition as mandated by Chapter 11.10 and then subtract from the current WPI, we decline to apply it to the present circumstances, as it would produce an anomalous assessment contrary to the principles we have above referred to.”

   36. Although, in the present case, the Appeal Panel did not expressly state its intention to decline to apply Guideline 11.10, it is apparent that it did so. It said:

   “87.   As was the case in Wills, an application of Chapter 11.10 to Mr Marks’ case would also give a nil assessment, as the predominance of the evidence shows that he was asymptomatic when he began work with the appellant employer. As is pointed out in the above extract, however, whether a claimant was asymptomatic or not when he commenced his employment is but one of the factors that have to be considered in the context of s 323.”

   37. In reasoning to its conclusion that the MAC should be revoked the Appeal Panel said:

   “113   The similarity of the two causes of Mr Marks’ PTSD we regard of being of some moment. We accept that the circumstances of the subject injury have been affected by Mr Marks’ prior experiences with the Police Force, as they show that he was traumatised by his superior officer. His subsequent decompensation when he perceived he was being bullied by his senior officers was contributed to by that earlier experience.

   …

   117   The similarity in the symptoms described by Dr Kossoff and the AMS are quite marked, and indicates similarities with Mr Marks’ earlier PTSD when his current injury manifested itself. Without his earlier injury we are satisfied that his ability to cope with the perceived problems at his workplace in 2018 would not have been as compromised and the degree of impairment would have been significantly lessened.

   …

   119   The evidence before the AMS at the time of his reconsideration demonstrated that there were other causes for the impairment caused by the psychiatric injury suffered by Mr Marks whilst employed with the appellant employer. Those other causes were both the prior psychiatric injury suffered when Mr Marks was employed by the NSW Police Force, and the pre-existing depressive state that Mr Marks was from time to time subject to. We are satisfied that the degree of impairment caused by the subject injury would not have been as great but for these matters.

   …

   122   The medical experts on the Panel concur that a previous injury such as the PTSD suffered by Mr Marks is a significant factor in assessing the WPI caused by a further PTSD. We agree with A/Prof Robertson, who did not have the details available therefore properly applied the statutory 1/10th deduction, that the impairment caused by the prior PTSD contributed to that caused by the subject injury.

   123   Whilst the impairment caused by the earlier PTSD abated with the passage of time, such an injury would make a substantial contribution to impairment arising from a new injury. In some cases it might be mostly responsible for impairment which develops after a relatively minor incident. We do not however agree with A/Prof Robertson that the present PTSD is a recrudescence of Mr Marks’ earlier PTSD. They are separate injuries, and A/Prof Robertson was of necessity speculating when he made the comment, as Mr Marks had declined to tell him the details of his injury. The PTSD caused by the subject injury would have occurred had Mr Marks been in normal health, but the damage he sustained is greater because of aggravation caused by the earlier PTSD with the Police Force.”

   38. With respect to the “treatment effect” the Appeal Panel held (at [129]) that this “modifier” is only available where there has been effective long-term treatment that has resulted in “apparent substantial or total elimination” of the relevant impairment, and that the plaintiff had achieved neither. It declined, in its reassessment, to make a similar increment.

The application for judicial review

39. Neither the summons nor the plaintiff’s written submissions clearly identified the basis of jurisdiction invoked. The relief sought includes an order in the nature of certiorari. As indicated above, relief under s 69 is available for jurisdictional error or error of law on the face of the record.

40. No ground expressly challenged the conclusions of the Appeal Panel that the AMS failed to give adequate reasons for some of his conclusions. While, in the absence of argument to the contrary, I would accept that failure by an AMS to give adequate reasons for an assessment could constitute “demonstrable error” within the meaning of s 327(3)(d), and would therefore justify the Appeal Panel proceeding to make its own assessment (s 328(5)), the real issue in the present application is whether the Appeal Panel was correct in its identification of the relevant error (on the part of AMS Shaikh) as the application of the wrong test. If, in revoking AMS Shaikh’s certificate and issuing a new certificate, the Appeal Panel itself applied a wrong test, it was in jurisdictional error.

41. Only two issues emerged on the hearing of the application:

1. the basis on which the Appeal Panel determined that a deduction of 25% from the assessment of whole person impairment should be made under s 323(1) of the WIM Act;

2. the decision of the Appeal Panel, contrary to the decision of the AMS, that no allowance for “the treatment effect” should be made.

1. The deduction under s 323(1) of the WIM Act

42. The plaintiff’s attack on the decision of the Appeal Panel focused principally on its reliance on the extracted passages from the reasons in Wills, and its refusal (at [87]) to apply Guideline 11.10 of Chapter 11 of the Guidelines.

43. The Appeal Panel drew support for its approach to Guideline 11.10 from two decisions of this Court which it considered endorsed the approach taken in Wills. In Ms Wills’ case the employer was twice dissatisfied with determinations of the Appeal Panel and sought judicial review in this Court: see Broadspectrum (Australia) Pty Ltd v Fiona Louise Wills [2018] NSWSC 1320, per Harrison AsJ; Broadspectrum (Australia) Pty Ltd v Wills [2019] NSWSC 1797, per Meagher J. In neither of those cases was any issue raised as to the correctness of the extracted passages. Meagher J made specific reference to that circumstance, saying:

“18. … The Panel’s proceeding on this basis is not challenged as involving any reviewable error in its understanding of the task required by s 323(1).”

Neither of those decisions can be regarded as endorsement of paras [58] – [62] of the reasons in Wills.

44. Nor did the Appeal Panel state any source of the “principles” to which it referred in [58] of Wills. It is likely, however, that those sources include decisions such as Cole v Wenaline Pty Ltd [2010] NSWSC 78 (“Cole”) and Elcheikh v Diamond Formwork (NSW) Pty Ltd (in Liquidation) [2013] NSWSC 365 (“Elcheikh”). In Cole Schmidt J said of s 323:

“29.   … The section is directed to a situation where there is a pre-existing injury, pre-existing condition or abnormality. For a deduction to be made from what has been assessed to have been the level of impairment which resulted from the later injury in question, a conclusion is required, on the evidence, that the pre-existing injury, pre-existing condition or abnormality caused or contributed to that impairment.

…

34. … Section 323 requires that a conclusion be reached as to whether or not any proportion of permanent impairment assessed resulted from an earlier injury, pre-existing condition or abnormality.

…

38. What s 323 required, however, was that the evidence be considered, so that it could be determined, firstly, what the level of impairment after the second injury was. Secondly, whether a proportion of that impairment is due to the first injury. Thirdly, what the proportion was.”

45. In an earlier decision (Mathew Hall Pty Ltd v Smart [2000] NSWCA 284, concerning a relevantly similar provision of the WC Act, to which Schmidt J referred) the Court of Appeal said:

“It does not matter that the pre-existing condition was asymptomatic, and if no loss is to some extent due to the pre-existing condition there must be deduction of the deductible proportion for that loss.”

46. In Elcheikh Schmidt J repeated the observations she had made in Cole, and (at [91]) accepted that the fact the pre-existing condition had been asymptomatic did not preclude its contributing to the impairment being assessed. Her Honour went on to observe (at [95]) that an asymptomatic condition may or may not contribute to a resulting impairment.

46. There is an important distinction to be drawn between these cases and the present case. In both Cole and Elcheikh the injury concerned was physical, and therefore one to which the AMA5 Guides, adopted by the s 376 Guidelines, were applicable. Guideline 11.10 had no application. The relevant Guideline was 1.28.

47. The reasoning in [58] and [59] of Wills is not entirely easy to follow. The Appeal Panel appears to interpret s 323(1) as dictating a sequence, or a series of four steps, to be taken in the determination of whether any deduction should be made. According to the Appeal Panel, the sequence required by s323(1) is:

1. determination whether any whole person impairment is caused by the injury;

2. if so, the extent or degree of that impairment; and

3. whether a pre-existing condition has relevantly contributed to that impairment; and

4. if so, the quantification of the contribution.

A fifth step would be the deduction from the determined level of impairment made under step (ii) of the contribution made by the previous condition quantified under step (iv) to yield the degree of permanent impairment resulting from the injury in question.

49. The Appeal Panel considered that, by contrast, application of Guideline 11.10 dictates a different sequence, being:

1. assessment of the claimant’s “pre-injury level of functioning” – to produce an assessment of pre-injury impairment;

2. assessment of the current level of permanent (or whole person) impairment;

3. subtraction of (i) from (ii), to produce the “percentage of permanent impairment directly attributable to the work-related injury”.

   50. On that basis, according to the Appeal Panel, an earlier injury, condition or abnormality that was asymptomatic immediately prior to the injury in question could not be taken into account for the purposes of the s 323(1) assessment. That, presumably, results from the requirement to begin by assessing the claimant’s “pre-injury level of functioning”; if the claimant is asymptomatic, there is no “pre-injury impairment” to assess, and nothing to subtract from the current, or, post-injury, level of impairment.

   51. That would deny the relevance of any contribution that might be made by a pre-existing, but dormant, condition that, for example, rendered the claimant more vulnerable to the injury that precipitated the impairment under assessment.

   52. The stated reason of the Appeal Panel for declining to apply Guideline 11.10 was that to do so would produce an “anomalous” result. As I understand the Reasons, that is because it would exclude consideration of any contribution made to the plaintiff’s current impairment by his previous (but at the time of his employment with the first defendant asymptomatic) psychiatric or psychological condition. That, the Appeal Panel considered, would not produce a result in accordance with s 323(1); neither s 323(1) nor the various decisions with respect thereto requires that a pre-existing condition or abnormality be symptomatic at, or immediately before, the time of the injury caused by the workplace injury.

   53. It is apparent from the extracts of the Reasons set out in [37] above that the Appeal Panel considered that notwithstanding the plaintiff’s asymptomatic status at the time of his employment with the first defendant, he was nevertheless, by reason of his earlier experience of PTSD, rendered more vulnerable to the subsequent harassment and vilification such that the earlier condition was “a significant factor” in the assessment of the extent to which his current condition was caused by the events while he was an employee of the first defendant. To take that vulnerability into account in the assessment of permanent impairment caused by the injury suffered in the defendant’s employ would, on the Appeal Panel’s reasoning, be entirely consistent with s 323(1) but not in accordance with Guideline 11.10.

   54. The argument advanced against the conclusions of the Appeal Panel on behalf of the plaintiff was disarmingly simple. It was that s 322(1) is unequivocal in requiring the AMS (and the Appeal Panel) to assess the degree of permanent impairment in accordance with Guideline 11.10. So much, it was contended, was the inevitable consequence of the requirement in s 322(1) that the assessment “is to be made” in accordance with the Guidelines, reinforced by s 323(4) empowering the Authority to make specific Guidelines for the determination of any deduction to be made under s 323(1). That left no room for the Appeal Panel to decline to apply Guideline 11.10 because of what it perceived to an anomalous outcome.

   55. The response made on behalf of the first defendant was equally simple. It was, as expressed in written submissions:

   “25 The Guidelines do not subsume or take precedence over the legislation; the provision that empowers the making of guidelines at sub paragraph (4) [sic – subs (4)] cannot be said to override the legislative purpose mandated at s 323(1)-(3).”

   56. Buried in these submissions, and not addressed by either party, is what I consider to be an important underlying issue, and possibly the key to the approach taken by the Appeal Panel. One way of understanding the reasoning of the Appeal Panel, it seems to me, is that it took the course it did (in both Wills and in the present case) because it considered that Guideline 11.10 is inconsistent with s 323(1). That could, at least potentially, raise an issue as to the validity of Guideline 11.10. Two questions arise:

4. is there a relevant inconsistency?;

5. if so, what is the effect of that inconsistency? Specifically, under which provision is the assessment to be made?

   57. As to the second question the decision of the Court of Appeal in Henderson v QBE Insurance (Australia) Ltd [2013] NSWCA 480 (“Henderson”) needs to be considered. That was a decision with respect to the Motor Accidents Compensation Act 1999 (NSW) (“MAC Act”) which established a procedure for the medical assessment of injuries suffered in motor accidents, and, by s 44, permitted the relevant authority to issue Guidelines with respect to the assessment of the degree of permanent impairment of a person so injured. A clear discrepancy was discernible between a statutory provision and a clause in the Guidelines. Section 62 permitted a second (or subsequent) referral for assessment on the grounds of the deterioration of the injury or additional relevant information about the injury but only (by s 62(1A)), where the deterioration or additional information is such as to be capable of having a material effect on the outcome of the previous assessment. By contrast, the relevant Guideline provided:

   “14.7   If the Proper Officer is not satisfied that the deterioration of the injury or the additional relevant information about the injury would have a material effect on the outcome of the application, the Proper Officer may dismiss the application.”

   58. Of that discrepancy Beazley P (with whom Tobias AJA agreed) said:

   “25    … cl 14.7 states a different requirement from s 62(1A). That difference is not material in this case, but could be vital in different factual circumstances. The statutory provision must, of course, prevail.”

   59. Meagher JA, while noting the discrepancy, did not comment because it was not, on the facts of that case, significant. That was because the statutory test had, in fact, been applied. Since, as both Beazley P and Meagher JA noted, the inconsistency in that case was of no significance, the observation of Beazley P is obiter. Moreover, and no doubt because of the insignificance of the discrepancy, her Honour did not refer to s 133(2) of the MAC Act which provided:

   “(2)   The assessment of permanent impairment is to be made in accordance with –

   (a)   MAA Medical Guidelines issued for that purpose, or …”

   60. It is possible, as the Appeal Panel apparently considered, that Guideline 11.10 does not accurately reflect what was contemplated by the legislature in enacting s 323(1), which does not depend upon pre-injury level of functioning, but encompasses (or potentially encompasses) pre-existing causal factors that are not, at the time of assessment, operative to produce symptoms, but may nevertheless contribute to the overall impairment (see Cole and Elcheikh). If that is so, a question arises, or might arise, as to whether Guideline 11.10 is beyond power.

   61. On one view it is not possible to escape the plain language of the relevant legislation. Sections 376 and 323(4) respectively empower the Authority to issue Guidelines with respect, inter alia, to the assessment of permanent impairment, and to the determination of the deduction required by s 323(1). As the plaintiff emphatically pointed out, s 322(1) states, unequivocally, that the assessment of permanent impairment is to be made in accordance with those Guidelines. On that view, if Guideline 11.10 is, as is perceived by the Appeal Panel, “at odds” with what the legislature had in mind in the formulation of s 323(1), it is the Guideline that is to be applied. Moreover, the Authority has made a deliberate and considered decision, authorised by the legislation, to exclude the application of AMA5 (including Guideline 1.28) from the assessment of psychiatric and psychological conditions, and has crafted its own Guideline.

   62. On that view the decision of the Appeal Panel evidenced both jurisdictional error (by the Appeal Panel directing its attention to the wrong question) and error of law of the face of the record (by the misconstruction of the relevant legislation).

   63. On an alternative view, the Guidelines must be seen as subservient to the legislation. If Guideline 11.10 is, as the Appeal Panel appears to consider, inconsistent with s 323(1): see also Frost v Kourouche [2014] NSWCA 39 at [45], it must, as Beazley P held in Henderson, give way to the statute.

   64. The proposition that a Guideline that is inconsistent with a statutory provision can nevertheless take effect is difficult to countenance. True it is that s 376 does not have the proviso, common in provisions authorising delegated legislation, that the delegated legislation be “not inconsistent with” the authorising Act. Nevertheless, the issue of a guideline that is inconsistent with any provision of the authorising statute is unlikely to survive challenge.

   65. These questions have not been debated in the present case. They are of some importance. I propose to give the parties the opportunity to make submissions as to:

6. whether Guideline 11.10 of the Workers Compensation Guidelines is inconsistent with s 323(1) of the WIM Act; and

7. if so,

(a)    the consequence of that inconsistency and,

(b)   specifically, whether Guideline 11.10 is beyond power.

1. Allowance for “the treatment effect”

66. It is then possible to consider briefly the second aspect of the application, the refusal of the Appeal Panel to make any allowance for “the treatment effect”. As indicated above, the allowance made by AMS Shaikh was not the subject of any challenge in the appeal to the Appeal Panel and no notice was given to the plaintiff that it might be disturbed. The complaint now made is that there was a denial of procedural fairness in the Appeal Panel proceeding to make its assessment without either incorporating such an allowance, or, at least, giving the plaintiff an opportunity to be heard in that respect.

67. In my opinion this complaint is made good. While it is open to the Appeal Panel to consider additional grounds of appeal to those notified, that can only be done in compliance with the rules of procedural fairness: see, eg, Siddik v WorkCover Authority of NSW [2008] NSWCA 116 at [101].

68. It may be that the approach taken by the Appeal Panel was correct; however, the plaintiff had the benefit of a finding, or assessment, by the AMS and there was no indication to him that he would not continue to have that benefit or that it would be challenged. He was not given the opportunity to be heard on the question.

69. In those circumstances I accept that the plaintiff was denied procedural fairness. Jurisdictional error in this respect has been established.

70. That raises the difficult question of what orders ought to be made. As indicated above the orders sought include an order that the decision be set aside and the matter be remitted to the second defendant (the Appeal Panel) and/or the third defendant (the Registrar) to be determined according to law. With respect to the allowance for “the treatment effect”, such an order is appropriate, to give the plaintiff an opportunity to be heard.

71. The only order I make at this stage is that the matter is stood over for further hearing on a date to be fixed.

72. I direct each party to provide any submissions with respect to the questions stated in [65] above on or before 16 April 2021, and any response to the submissions of the other party on or before 30 April 2021.

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Amendments

24 May 2021 - punctuation in [15],[18],[29] and removal of appeal book references.

Decision last updated: 24 May 2021