Bos v East Coast Security Dogs Pty Ltd

Supreme Court of NSW|2022-08-03

Judgment

HER HONOUR: This matter involves a Judicial Review of a decision of a Medical Appeal Panel of the Personal Injury Commission. The main point of contention is the deduction made by a Medical Assessor pursuant to s 323 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("Workplace Injury Act").
The plaintiff is Simon Bos. The first defendant is East Coast Security Dogs Pty Ltd ("the employer"). The second defendant is the President of the Personal Injury Commission of New South Wales. The third defendant is Member Marshal Douglas and Drs Patrick Morris and Douglas Andrews in their capacity as an Appeal Panel ("the Appeal Panel"). The second and third defendants filed submitting appearances.
By way of amended summons filed 10 February 2022 the plaintiff relevantly seeks: 1. A declaration pursuant to s 69 of the Supreme Court Act 1970 (NSW) that the Medical Assessment Certificate, the decision and the statement of reasons of the third defendant issued by the second defendant on 25 August 2021 is void and of no effect. 2. An order setting aside the Medical Assessment Certificate, the decision and the statement of reasons of the third defendant issued by the second defendant on 25 August 2021.

Relevant legislation

The relevant provisions of the Workplace Injury Act read: 322 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) Impairments that result from the same injury are to be assessed together to assess the degree of permanent impairment of the injured worker. (3) Impairments that result from more than one injury arising out of the same incident are to be assessed together to assess the degree of permanent impairment of the injured worker. Note - Section 65A of the 1987 Act provides for impairment arising from psychological/psychiatric injuries to be assessed separately from impairment arising from physical injury. (4) A medical assessor may decline to make an assessment of the degree of permanent impairment of an injured worker until the medical assessor is satisfied that the impairment is permanent and that the degree of permanent impairment is fully ascertainable. Proceedings before a court or the Commission may be adjourned until the assessment is made. … 323 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. ... 325 Medical assessment certificate (1) The medical assessor 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 President and is to - (a) set out details of the matters referred for assessment, and (b) certify as to the medical assessor's assessment with respect to those matters, and (c) set out the medical assessor's reasons for that assessment, and (d) set out the facts on which that assessment is based. … 326 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, (c) the nature and extent of loss of hearing suffered by a worker, (d) whether impairment is permanent, (e) whether the degree of permanent impairment is fully ascertainable. (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 - … (d) the medical assessment certificate contains a demonstrable error. (4) An appeal is to be made by application to the President. The appeal is not to proceed unless the President is satisfied that, on the face of the application and any submissions made to the President, at least one of the grounds for appeal specified in subsection (3) has been made out. … 328 Procedure on appeal (1) An appeal against a medical assessment is to be heard by an Appeal Panel constituted by 3 persons chosen by the President as follows - (a) 2 medical assessors, (b) 1 member of the Commission who is a member assigned to the Workers Compensation Division of the Commission. (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. … (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. …
In this Court, the plaintiff now says that s 65A of the Workers Compensation Act 1987 (NSW) is relevant. The employer in its submissions to the Appeal Panel relied upon s 65A but no longer does. It reads: 65A Special provisions for psychological and psychiatric injury (1) No compensation is payable under this Division in respect of permanent impairment that results from a secondary psychological injury. (2) In assessing the degree of permanent impairment that results from a physical injury or primary psychological injury, no regard is to be had to any impairment or symptoms resulting from a secondary psychological injury. (3) No compensation is payable under this Division in respect of permanent impairment that results from a primary psychological injury unless the degree of permanent impairment resulting from the primary psychological injury is at least 15%. Note - If more than one psychological injury arises out of the same incident, section 322 of the 1998 Act requires the injuries to be assessed together as one injury to determine the degree of permanent impairment. (4) If a worker receives a primary psychological injury and a physical injury, arising out of the same incident, the worker is only entitled to receive compensation under this Division in respect of impairment resulting from one of those injuries, and for that purpose the following provisions apply - (a) the degree of permanent impairment that results from the primary psychological injury is to be assessed separately from the degree of permanent impairment that results from the physical injury (despite section 65 (2)), (b) the worker is entitled to receive compensation under this Division for impairment resulting from whichever injury results in the greater amount of compensation being payable to the worker under this Division (and is not entitled to receive compensation under this Division for impairment resulting from the other injury), (c) the question of which injury results in the greater amount of compensation is, in default of agreement, to be determined by the Commission. Note - If there is more than one physical injury those injuries will still be assessed together as one injury under section 322 of the 1998 Act, but separately from any psychological injury. Similarly, if there is more than one psychological injury those psychological injures will be assessed together as one injury, but separately from any physical injury. (5) In this section - primary psychological injury means a psychological injury that is not a secondary psychological injury. psychological injury includes psychiatric injury. secondary psychological injury means a psychological injury to the extent that it arises as a consequence of, or secondary to, a physical injury.

The Medical Assessor's decision dated 14 May 2021

On 14 May 2021, the Medical Assessor issued his Medical Assessment certificate on (Ex A(1) 75). He assessed the plaintiff as having suffered 24% WPI made a deduction pursuant to s 328 for a preexisting condition or abnormality of 50%. The total WPI was assessed at 12%.
Under the heading 'History relating to the injury' the Medical Assessor recorded: "Details of any previous or subsequent accidents, injuries or condition: Mr Bos was admitted to Macquarie Hospital In May 2007 with low mood, poor sleep, poor concentration, lack of purpose and it was noted he was significantly in debt due to him calling chat lines and socially isolated. He had a one month admission, diagnosed with depression, and treated with an SSRI. Mr Bos told me today that this was associated with 'burnout' in relation to him working as a chef. He had previously had a month-long admission in late 2005 with similar depressive symptoms. He has been treated with antidepressant continuously since. His GP notes record that after he moved to Sydney in 2010 indicate that he continued to use Lexapro and had a symptomatic relapse in February 2012 with irritability, snappiness, fatigue, anxiety and moodiness and his medication was increased. He was also noted to be anxious later in 2012 and referred to a psychiatrist. He continued to take 20mg of Lexapro until the time of the incident."
Under the heading 'Summary' the Medical Assessor recorded: "Mr Bos is a complex case, hampered by both the internal inconsistencies within his own report, his focus on all difficulties being attributable "to my PTSD" and apparent lack of full information either provided to the [Independent Medical Examiners or explored by them. On reviewing the contemporaneous documentation, it is clear that Mr Bos had a recurrent Major Depressive Disorder with two prior admissions and long-term treatment for nearly a decade prior to the assault in 2013. For several years after the incident the notes from numerous clinicians in two hospitals and community settings including several consultant psychiatrists, psychiatric nurses and other treating clinicians do not describe any of the characteristics of Post traumatic Stress Disorder, and Mr Bos reports not having Criterion B symptom in 2015. What they do clearly and consistently describe is a relapse of his recurrent Major Depressive Disorder caused ' by chronic pain, sequelae, and dysfunction arising from his physical injury i.e. a secondary psychiatric injury. It is only in the past two years that there have been any reports of criterion B and C symptoms of Post-traumatic stress disorder. This either reflects a very late onset disorder, a new focus on different symptoms by different clinicians that was missed for years by many others, or a potential legal iatrogenic manifestation. Nevertheless he now meets the full criteria for that disorder and certainly had a criteria A event and has symptoms in all four domains. This, 'late onset' Post traumatic stress disorder is the primary pshyciatric injury caused by the incident. He appears chronically unwell with increasing physical and psychological symptoms over time. His physical symptoms as described today may well be the manifestation of a somatoform pain disorder, given how different they are to 2017 and inexplicable on the basis of his injury. … …He had a recurrent Major Depressive Disorder and this was exacerbated as a secondary psychiatric injury consequent to his physical injury as identified by the contemporaneous notes and discharge summaries. It is quite clearly apparent that his low mood and irritability as well as significant dysfunction arising from his pain in this relapse episode contributed to the breakup of his relationship as well as further withdrawal from function, indicating that this secondary psychiatric injury contributes a significant portion to his current whole person impairment, if not the majority of it. There are however a number of features now including intrusive memories hyperarousal, avoidance and withdrawal that reflects the primary Post traumatic Stress Disorder psychiatric injury which contribute significantly to his current impairment. It is impossible to calculate a pre-existing impairment because his secondary psychiatric injury, the exacerbation of his pre-existing recurrent Major Depressive Disorder actually post-dated the incident itself and his primary injury only became manifest many years after the injury. As such, a 1/10 deduction under section 323 is inappropriate and is at odds with the evidence which would indicate that approximately half of his current whole person impairment is a result of the secondary psychiatric injury exacerbating his pre-existing psychiatric disorder."
These passages of the Medical Assessor's decision were reproduced at [18]-[19] of the Appeal Panel's decision.

The Appeal Panel's decision

On 25 August 2021, the Appeal Panel gave reasons for its decision (Ex A(1) 77). It dismissed the appeal.
At [13] the Appeal Panel stated: "[13] That medical dispute was duly referred to the Medical Assessor on 6 April 2021. He examined the appellant on 28 April 2021 and, as mentioned earlier, issued the MAC on 14 May 2021. The Medical Assessor certified in the MAC that he assessed the Appellant's permanent impairment from "psychological injury/mind" is 24% WPI but that half of that is due to a pre-existing condition. The Medical Assessor applied s 323(1) of the 1998 Act and certified the appellant's permanent impairment from his psychological injury is 12% WPI. The appellant in his appeal against the MAC challenges the correctness of the deduction that the Medical Assessor made under s 323(1)."
Under the heading 'Findings and reasons' the Appeal Panel stated: "[25] 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. [26] In Campbelltown City Council v Vegan [2006] NSWCA 284 the Court of Appeal held that the Appeal Panel is obliged to give reasons. [27] With respect to the deduction a Medical Assessor Is to make under s 323(1), the authorities are consistent and clear regarding the approach a Medical Assessor must take. That is, the level of a worker's post-injury impairment, as at the time of assessment, must firstly be determined. Secondly, a worker's prior injury or pre-existing condition or abnormality must be identified. Thirdly, it must be determined whether a proportion of a worker's post-injury impairment is due to that prior injury or pre-existing condition. Lastly, the extent to which a worker's post-injury impairment is due to the prior injury or pre-existing condition or abnormality must be determined. [28] The Court of Appeal held in Ryder that the pre-existing condition that a worker has or the prior injury the worker has suffered must make a difference to the outcome in order that a worker's impairment can be found to be due to it. The extent to which it does make a difference, there must be a deduction. [29] The third stage of this process cannot be done based on assumption or hypothesis, but must be done by reference to the evidence. The evidence must be able to demonstrate that a proportion of a worker's impairment is due to the pre-existing condition or previous injury. Further, the fourth stage can also not be done by reference to assumption unless the extent to which a deduction is to be made under s 323(1) would be too difficult or costly to determine, because of the absence of medical evidence or some other reason, in which case, in accordance with s 323(2) of the 1987 Act, the deduction is be assumed to be 10% so long as that assumption is not at odds with the evidence. [30] Section 325(2)(c) of the 1998 Act requires a Medical Assessor to set out within the MAC his or her reasons for the assessment of the matters that were referred for assessment. The reasons must be sufficient to reveal the actual path by which a Medical Assessor arrives at his or her assessment. The reasons do not need to be comprehensible to a person with no medical expertise, such that if a conclusion of a Medical Assessor is self-evident in a medical sense, then the reasons need not be extensive. If, however, a conclusion may be medically contestable, based on the evidence, then a Medical Assessor will need to address the evidence so as to expose the path of his or her reasoning in order to explain the conclusion to which he or she came. [31] As said, there is no challenge to the Medical Assessor's assessment of the appellant's permanent impairment from psychiatric illness. There is also no challenge to the Medical Assessor's finding that the appellant had a pre-existing condition, being a Major Depressive Disorder. This was in remission and not impairing the appellant as at 1 March 2013. … [33] The Medical Assessor's explanation for why he found that a proportion the appellant's permanent impairment was due to the appellant's pre-existing Major Depressive Disorder was, essentially, that the illness had recurred as a consequence of chronic pain, sequelae, and dysfunction from the physical injury the appellant suffered on 1 March 2013. The Medical Assessor explained that the recurrence of the Major Depressive Disorder manifested by the appellant having low mood and irritability and significant dysfunction. The Medical Assessor addressed the evidence when providing his explanation, including the extensive history he had obtained. … [35] With respect to the fourth step, the Medical Assessor explained that the appellant's low mood and dysfunction manifesting from the recurrence of the appellant's Major Depressive Disorder contributes a significant portion to the appellant's present impairment "if not the majority of it". The Medical Assessor explained that the appellant's low mood and irritability from his Major Depressive Disorder causes the appellant a significant withdrawal from function. The Medical Assessor further explained that features manifesting from the appellant's PTSD also affected the appellant's function and made a significant contribution to the appellant's present impairment. [36] The Medical Assessor, by using the term "impossible", clearly acknowledged there was difficulty in determining the exact extent to which the appellant's pre-existing condition contributed to the appellant's present impairment. This is partly because the exacerbation of the pre-existing condition was secondary to the physical injury and partly due to the assessor finding the appellant an unreliable reporter of his history. The Medical Assessor explained |hat to assume the extent of the contribution the pre-existing condition makes to the appellant's permanent impairment is 1/10'would be at odds with the evidence. In the Appeal Panel's view, when the passage from the MAC extracted at [19] above is read in whole, the Medical Assessor's reason for this conclusion was that he considered the features manifesting from the appellant's Major Depressive Disorder accounted for at least half of the overall impaired function of the appellant and that the features manifesting from the appellant's PTSD contributed almost half. The Medical Assessor formulated his opinion on this issue having regard to the extensive history he had obtained, which, as mentioned, he did having regard to the clinical records before him relating to the appellant. [37] In such circumstance, the Medical Assessor was precluded, by s 323(2), from assuming the deduction to be made under s 323(1) was 10%. The Appeal Panel considers that the Medical Assessor sufficiently explained his reasons for not being able to assume the deduction to be made under s 323(1) was 10%. It is known from the MAC why he could not do so. [38] In the Appeal Panel's view, it is also apparent from the MAC that the Medical Assessor considered, and sufficiently explained, that the appellant's Major Depressive Disorder made a difference to the appellant's present impairment. This is again because the Medical Assessor found that the features of the appellant's Major Depressive Disorder caused the appellant a significant withdrawal from function and contributed to at least half of the appellant's present impairment. .. [40] The Appeal Panel also considers that the Medical Assessor was correct to apply s 323, and that is because the appellant had a pre-existing condition and that a proportion of the appellant's impairment was due to that pre-existing condition. Insofar as the Medical Assessor made a deduction under s 323 for the extent to which that pre-existing condition contributes to the appellant's permanent impairment, then the requirements of ss 65A(1) and (2) have also been met in this case. This is because the symptoms manifesting from the appellant's pre-existing condition recurred as a consequence of the appellant's physical injury. Hence, by making a deduction under s 323 of the 1987 Act for the extent to which that pre-existing condition contributes to the appellant's overall impairment from his psychiatric injury, the Medical Assessor has, in effect, disregarded the appellant's symptoms and impairment from a secondary psychological injury." [my emphasis]

Grounds of Judicial Review

The grounds of judicial review set out in the amended summons are as follows: 1. The third defendant erred in law in failing to correctly apply the statutory requirements of s 323 of the Workplace Injury Act in particular, in respect of the factual determination that the current impairment assessed resulting from the workplace injury is greater by 50% by reason of a pre-existing condition; 2. The third defendant erred in law by applying a deduction pursuant to s 323 of the Workplace Injury Act based on an assumption that a recurrent Major Depressive Disorder post dating the work injury contributed to the current impairment; 3. The third defendant made an error on the face of the record by failing to provide any, or any adequate, reasons for its finding that a pre-existing condition contributed to the current impairment in circumstances where it was accepted that the preexisting condition was in "remission" as at the time of the injury; 4. The third defendant erred in law by failing to apply the one-tenth deduction pursuant to s 323(2) of the Workplace Injury Act in circumstances where the Medical Assessor had stated it was "impossible" to calculate a pre-existing impairment because the secondary psychiatric injury, the exacerbation of his pre-existing recurrent Major Depressive Disorder post-dated the incident itself; 5. The third defendant's decision of a 50% deduction for a pre-existing condition or abnormality was legally unreasonable because the deduction was made in circumstances where the Medical Assessor had stated that it was "impossible" to calculate a pre-existing impairment because the secondary psychiatric injury, the exacerbation of his pre-existing Major Depressive Disorder post-dated the incident itself.
In summary, all the grounds of this Judicial Review concern the proper application of s 323 of the Workplace Injury Act.
Central all these grounds of Judicial Review is the decision in Ryder v Sundance Bakehouse [2015] NSWSC 526 ("Ryder"). In Ryder, where, Campbell J explained what is required under s 323 at [45]: "[45] What s 323 requires is an inquiry into whether there are other causes, (previous injury, or pre-existing abnormality), of an impairment caused by a work injury. A proportion of the impairment would be due to the pre-existing abnormality (even if that proportion cannot be precisely identified without difficulty or expense) only if it can be said that the pre-existing abnormality made a difference to the outcome in terms of the degree of impairment resulting from the work injury. If there is no difference in outcome, that is to say, if the degree of impairment is not greater than it would otherwise have been as a result of the injury, it is impossible to say that a proportion of it is due to the pre-existing abnormality. To put it another way, the Panel must be satisfied that but for the pre-existing abnormality, the degree of impairment resulting from the work injury would not have been as great."

Submissions of both parties

The plaintiff has addressed all the grounds of Judicial Review together in his submissions. The employer has adopted a different approach. It addressed each individual ground of judicial review. I will summarise both parties submissions and then make my conclusion.

The plaintiff's submissions

Where the question to be determined relates to the impact of a pre-existing condition, s 323 has three different elements to be considered. First, a causal inquiry as to whether the workplace injury is causally related to the pre-existing condition. Second, a factual determination that the impairment assessed after the workplace injury is greater by reason of that pre-existing condition. Third, a deduction to reflect that second situation.
The Appeal Panel identifies what they described as a four-stage process, and the Appeal Panel at [27] (reproduced earlier in this Judgment with emphasis) describe as the third and last stage: "[27] Thirdly, it must be determined whether a proportion of a worker's post-injury impairment is due to that prior injury or pre-existing condition. Lastly, the extent to which a worker's post-injury impairment is due to the prior injury or pre-existing condition or abnormality must be determined."
While the Appeal Panel's statement at [27] might potentially glance of the correct operation of s 323, the Appeal Panel's formulation is not orthodox and the Appeal Panel failed to understand the factual determination required in the application of s 323.
In the Appeal Panel's dispositive reasons, it treats the factual determination required in the application of s 323 as effectively representing a more general causal pathway inquiry, which is then coupled with some general apportionment mechanism, not based on the required factual determination. This is the effect of transposing the notion of "due to" into the s 323 inquiry, rather than undertaking the required factual determination.
The Medical Assessor found, and it was accepted as correct by the Appeal Panel, that a 50% deduction was required. If that was the result of the correct factual determination required under s 323, such finding is the equivalent of a factual determination that the evidence before the Appeal Panel justified that the factual proposition that the plaintiff's post-accident post-traumatic stress disorder was made twice as bad by reason of his pre-existing condition. On any view of the materials, such factual conclusion was not available on the evidence and such a factual conclusion was not in fact made by either the Medical Assessor or the Appeal Panel. This situation points to the incorrect factual task having been applied, and s 323 being applied incorrectly.
There is likely no substantive issue that the pre-existing major depressive disorder rendered the plaintiff vulnerable to suffering the end-point extent of the PTSD (described apply in oral submissions as the "snake" as will be explained later in this Judgment) the plaintiff did, but such a proposition is an example of the first element in the application of s 323, which is a general causal pathway determination, and not an example of the factual determination contained in the second element.
The importance of the fact-finding task that the impairment assessed is greater by reason of the pre-existing condition, and the implications of that situation, is set out by Campbell J in Ryder at [45] (reproduced earlier in this Judgment).
The necessary factual determination, and therefore the correct application of s 323, did not occur. Accordingly, there were no relevant findings, and no relevant reasons. As a result, there was error on the face of the record, and error jurisdictional in nature, in respect of the Appeal Panel's determination about the deduction under s 323.
In this case, the Medical Assessor refers to it being "impossible" to make findings. Although the Appeal Panel does not recognise this, such a conclusion about that "impossible" situation directs attention s 323(2), which provides statutory direction as to what should occur in such circumstances. The impossibility identified by the Medical Assessor in the setting of the evidence that was available should have resulted in the application of the 10% deduction under s 323(2).
In this case, the Medical Assessor appears to have used the notion of impossible to springboard into a form of non-evidence-based speculation as to a general apportionment. It was such a speculation because for the reasons outlined above, that the Medical Assessor did not correctly undertake the factual task required, as explained in the Ryder decision. However, in the end, tested factually on the material that was before the Medical Assessor, it was an illogical or irrational conclusion to make a finding that had the factual effect of concluding that the plaintiff's post-incident condition was effectively made twice as bad by the pre-existing condition. This meant that the 1/10th deduction referred to in s 323(2) was not at odds with the available evidence.
In oral submissions, Senior Counsel referred to Ryder, where Campbell J referred to 'step 1' of the enquiry, using the words 'due to' as part of the general casual pathway (T22.3-9). In Senior Counsel's submission, "Due to" involves making a finding or turning their mind to and addressing the criteria of this necessary factual determination that the degree of impairment resulting from the work injury was greater because of the pre‑existing condition. In this case, there is significance with the fact that the pre‑existing condition was in remission and controlled at the time of the index event. And post the index event there was a recurrence of that condition, which is something that happened after the index event, and somehow it has been interweaved into the primary injury of a PTSD. And then there is a generalised apportionment of 50% with really no finding directed towards the degree to which the symptoms of the pre‑existing condition which had manifested because of the consequences of the physical injuries of the primary incident. (T22.17-33)
Senior Counsel further stated (at T23.34-42) that the Appeal Panel didn't address the issue about how in fact the degree of permanent impairment for the PTSD, when it is assessed, is made greater by reason of that pre‑existing condition. They then jump to this, pejoratively put, "She will be right. It's close enough. Let's just call it 50%". You test that logic of that 50% deduction by understanding that to apply 50% deduction, and to do it correctly under the principles identified by Campbell J, you would need to make a finding that the PTSD of whole person impairment was not as bad.
When assessing the plaintiff's psychiatric condition the PIRS scale, the interrelationship between the PTSD and major depressive disorder and how they operate together. There does seem to be significance in the fact that there was a secondary psychiatric disorder. The Appeal Panel at [41] in its bootstraps argument did not really hint at it, but to the extent that s 65A was the correct mechanism, that is, the outcome that has been achieved, that deals with that.

The employer's submissions

As in Cole v Wenaline [2010] NSWSC 78 ("Cole") and Ryder it has been held that it is impermissible to simply assume that a pre-existing condition must contribute to an impairment (Ryder at [45]).
In Secretary, NSW Department of Education v Johnson [2019] NSWCA 321, Emmett AJA, with whom Macfarlan JA and Simpson AJA relevantly agreed, explained that (at [58]): "[58] The injured worker's current level of whole person impairment is assessed and the pre-existing whole person impairment percentage is subtracted from the current level to obtain the percentage of permanent impairment directly attributable to the work-related injury."
The Appeal Panel set out the enquiries required, by reference to Cole and Ryder among other authorities, from [26] of its reasons.
There were three relevant tasks for the Appeal Panel (at [13]), being to: 1. Assess whether the injury was causally connected to the pre-existing condition; 2. Consider whether it is possible to reach a factual conclusion that the impairment is greater by reason of that condition; and 3. If applicable, calculate a deduction to reflect the second matter.
The approach described by the Appeal Panel at [27] of its reasons is "unorthodox". The employer does not agree with that characterisation, but, in any event, it is common between the parties that the three matters the plaintiff describes are appropriate enquiries.
In the present case, the Appeal Panel's summary of its tasks incorporates each of these (including at [27]), as to the first above, that "it must be determined whether a proportion of a worker's post-injury impairment is due to that prior injury or pre-existing condition"; and to the second and third, "the extent to which a worker's post-injury impairment is due to the prior injury". Further to the second and third, at [28], the Appeal Panel continued: "The Court of Appeal held in Ryder that the pre-existing condition that a worker has or the prior injury the worker has suffered must make a difference to the outcome in order that a worker's impairment can be found to be due to it. The extent to which it does make a difference, there must be a deduction".
The plaintiff's primary claim appears to be that the Appeal Panel failed to find that the plaintiff's current psychiatric/psychological disorder was made worse by reason of his pre-existing condition. However, the Appeal Panel recognised that it was required to make such a finding in order to apply a deduction, and did make such a factual finding, and accompanied it by detailed reasoning.
The Medical Assessor (whose analysis the Appeal Panel accepted) set out at page 7 of his reasons his view that: "approximately half of [the plaintiff's] current whole person impairment is a result of the secondary psychiatric injury exacerbating his pre-existing psychiatric disorder."
The Appeal Panel considered the evidence before it in detail, and noted particularly at [35] that: "… the Medical Assessor explained that the appellant's low mood and dysfunction manifesting from the recurrence of the appellant's Major Depressive Disorder contributes a significant portion of the appellant's present impairment 'if not the majority of it'. The Medical Assessor explained that the appellant's low mood and irritability from his Major Depressive Disorder causes the appellant a significant withdrawal from function. The Medical Assessor further explained that features manifesting from the appellant's PTSD also affected the appellant's function and made a significant contribution to the appellant's present impairment."
The Appeal Panel recognised, and complied with, the statutory requirements in applying a deduction pursuant to s 323 of the Workplace Injury Act.
So far as Judicial Ground (2) is concerned, the Appeal Panel had regard to significant evidence of the plaintiff suffering from a serious psychological condition prior to the 2013 incident at his workplace, including two extended hospitalisations. [The prior serious psychological condition of major depressive disorder has been described by Senior Counsel for the plaintiff as "the snake"]
That the plaintiff's condition may have been reasonably managed at the time of the incident in 2013 does not foreclose the finding that his workplace injury was made worse by virtue of the pre-existing condition. That his depressive disorder was "recurrent" emphasises that the plaintiff had this condition prior to 2013.
In Marks v Secretary, Dept of Communities [2021] NSWSC 616 ("Marks"), Simpson AJ considered whether a pre-existing but, at the time of injury, asymptomatic psychiatric illness [as is the case here] would require that no deduction be applied (in that case, with regard to a guideline suggesting so that is not presently in issue).
Her Honour, in Marks, noted that there is extensive authority to the effect that, in the context of physical conditions, asymptomatic status at the time of injury does not preclude a deduction: See Government Cleaning Service v Ellul (1996) 13 NSW CCR 344 at [16]; Matthew Hall Pty Ltd v Smart (2000) 21 NSWCCR 34, [2000] NSWCA 284; Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liq) [2013] NSWSC 365 at [91] and [95]). Her Honour found (at [19]) that: "As was submitted on behalf of the first defendant, s 323(1) makes no distinction between physical and psychiatric/psychological injury… There is nothing in s 323(1) that authorises exclusion of asymptomatic pre-existing conditions as causative or partially causative of a subsequent impairment."
There is a proper basis in the Appeal Panel's reasons to support the conclusion that a deduction was appropriate, notwithstanding that the plaintiff's pre-existing condition was well-managed at the time of the incident.
The Medical Assessor's assessment noted that the plaintiff had been referred to a psychiatrist in late 2012, and also that he was taking medication to assist with his mental health at the time of the incident. The Medical Assessor explained that the medical records showed that the plaintiff had suffered a "relapse" of the earlier condition. It was the "exacerbation" of this condition (and not the condition itself) that post-dated the date of injury.
At [12] of the Appeal Panel's reasons, the Appeal Panel set out an argument raised by the plaintiff that is very similar to the ground now raised (albeit, in relation to the Appeal Panel's reasoning) in the present matter. Between [33] and [39], the Appeal Panel addressed this, and stepped through why it accepted that it had been open to the Medical Assessor to conclude, as he did, that the plaintiff's pre-existing condition had "made a difference to the appellant's present impairment" (at [38]). This included the clinical records that had been made available, extensive history taken, and the conclusion that the plaintiff was "an unreliable reporter of his history" (at [36]).
As to judicial ground (3), the employer referred to a recent decision of Basten JA (sitting as a single Judge) in Lancaster v Foxtel Management Pty Ltd [2022] NSWSC 929 ("Lancaster"), where His Honour stated at [45]: "Although Wingfoot was concerned with a statutory obligation to give reasons, it is appropriate to adopt a similar approach in relation to the implied obligation under the Workplace Injury Act, based on a similar purpose from which it is derived. That purpose is to ensure that, to the extent possible, any error of law in the reasoning of the Appeal Panel is revealed and may be the subject of an application for judicial review. However, as a practical matter, the Appeal Panel is likely to determine the question before it as a matter of expert medical opinion, the basis for which is peculiarly a matter of its special expertise and It is of course well established that the Appeal Panel has an implied statutory obligation to give reasons: Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 (Vegan) at 396 [117] per Basten JA. The Appeal Panel's reasons must "fulfil a minimum legal standard", which does not require "extensive" reasons, but which must nevertheless provide an explanation for the Appeal Panel's conclusions: Vegan at 397 [121]-[122] per Basten JA; see also Petrovic v BC Serve No 14 Pty Ltd [2007] NSWSC 1156 per Hoeben J at [42].
The plaintiff agrees with what is stated in Lancaster above.
However, the reasons of the decision maker should not be examined with an eye finely tuned to error: McGinn v Ashfield Council [2012] NSWCA 238 per McColl JA at [17] (Sackville AJA and Gzell J agreeing); Walsh v Parramatta City Council (2007)161 LGERA 118; [2007] NSWLEC 255 at [67] per Preston CJ citing Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 291. The Appeal Panel was keenly aware of its reasons obligation, as noted at [26] of its decision.
The Appeal Panel accepted at [34] that the Medical Assessor had "sufficiently revealed why he considered a proportion of the appellant's permanent impairment was due to a pre-existing condition", and found at [40] that the "symptoms manifesting from the appellant's pre-existing condition recurred as a consequence of the appellant's physical injury".
The Appeal Panel's reasons provide a clear explanation for why it accepted, despite the plaintiff's condition "not impairing" him at the date of the incident ([31]), that the pre-existing condition had made a difference to his present impairment and in particular, meet the reasons requirements addressed in Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284.
So far as Judicial Ground (4) is concerned, the employer submitted that the plaintiff appears to suggest that the Appeal Panel did not recognise the need for reference to s 323(2) of the Workplace Injury Act (at [21]). In fact, the Appeal Panel expressly addressed this at [37] - concluding that the Medical Assessor had been "precluded" from assuming the deduction to be 10% on the basis of evidence and findings that the Appeal Panel accepted.
There is explanation in the Appeal Panel's reasons for why a deduction of 10% was at odds with available evidence, and that the Appeal Panel had regard to evidence of the plaintiff's condition prior to the 2013 incident (and consequent impact of that pre-existing condition). It was "known from the MAC" why the Medical Assessor could not apply a deduction of 10% (at [37]), and "apparent from the MAC that the Medical Assessor considered, and sufficiently explained, that the appellant's Major Depressive Disorder made a difference to the appellant's present impairment" (at [38]).
There was no error in failing to apply a 10% deduction (which, as the Appeal Panel recognised at [36], "would be at odds with the evidence"). The conclusion that a higher deduction was appropriate conforms with s 323(2) of the Workplace Injury Act, and the ground is not established.
Lasty, in relation to Judicial Ground (5), the employer submitted that this ground raises issues that have already been addressed by it. The Appeal Panel's conclusion was not "illogical or irrational", as the plaintiff's submissions suggest at [23] it was, as above, open on the evidence and properly made.
In conclusion the employer submitted that none of the grounds of judicial review have been successful.

The plaintiff's submissions in reply

The employer and the plaintiff are at issue as to the how the principles identified by Campbell J in Ryder at [45] are to be applied in the application of s 323. The employer incorrectly stated the three different elements of the question to be determined. It is particularly the second element ("second, a factual determination that the impairment assessed after the workplace injury is greater by reason of that pre-existing condition") that is misstated by the employer's ("consider whether it is possible to reach a factual conclusion that the impairment is greater by reason of that condition"). This is a signal as to why the employer contended that there was no material error in the determination under s 323. The factual determination required, which is specifically identified, and explained, by Campbell J in Ryder, was an important omission, and error, in the decision impugned.

Resolution

There is no challenge to the Medical Assessor's findings that the plaintiff's had a psychiatric WPI of 24%. The subject of the challenge in this judicial review is the deduction of 50% which reduced the plaintiff's WPI assessment to 12%.
In Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; 303 ALR 64 ("Wingfoot") at [47], the High Court explained that the Medical Assessor's function is to form and to give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise. In Wingfoot at [55] it explained the obligations of a Tribunal to provide reasons: "…The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law…"
Both the AMS and the Appeal Panel's decision must be read as a whole and I "should not read the reasons of the decision maker with an eye finely tuned for error": McGinn v Ashfield Council [2012] NSWCA 238 per McColl JA at [17] (Sackville AJA and Gzell J agreeing); Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255 at [67] per Preston CJ citing Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 ("Wu Shan Liang") at 291.
Before the Appeal Panel and in this current judicial review, there is no challenge to the Medical Assessor's assessment of the appellant's permanent impairment from psychiatric illness assessed at 24%. The appellant had a pre-existing condition, being a Major Depressive Disorder that was in remission and not impairing the appellant as at 1 March 2013.
The Medical Assessor described the plaintiff's psychiatric condition as complex. In 2013, prior to the assault, the plaintiff had been diagnosed with Major Depressive Disorder with two prior admissions and long-term treatment for nearly a decade. The Medical Assessor determined that the 'late onset' post-traumatic stress disorder is the primary psychiatric injury that was caused by the injury. As at March 2013 when the plaintiff suffered the physical injury, the Major Depressive Disorder was in remission but he had remained on anti-depressant medication.
In oral submissions referred to earlier in this judgment, Senior Counsel for the plaintiff suggested that the Major Depressive Disorder could best be described as "the snake". Prior to in physical injury, the plaintiffs major depressive order, the "snake", went into hibernation. After the assault, a relapse of the recurrent Major Depressive Disorder occurred. In other words, the snake came out of hibernation and started hissing, if you will. Sometime later, the plaintiff was diagnosed with 'late onset' PTSD. Both Medical assessor and the Appeal Panel considered the late onset of PTSD as the primary psychiatric injury caused by the injury.
In Ryder, (to which the Appeal Pane referred) Campbell J explained at [45] that what s 323(1) of the Workplace Injury Act requires is an inquiry into whether there are other causes, (previous injury, or pre-existing abnormality), of an impairment caused by a work injury. A proportion of the impairment would be due to the pre-existing abnormality (even if that proportion cannot be precisely identified without difficulty or expense) only if it can be said that the pre-existing abnormality made a difference to the outcome in terms of the degree of impairment resulting from the work injury. If there is no difference in outcome, that is to say, if the degree of impairment is not greater than it would otherwise have been as a result of the injury, it is impossible to say that a proportion of it is due to the pre-existing abnormality. To put it another way, the Appeal Panel must be satisfied that but for the pre-existing abnormality, the degree of impairment resulting from the work injury would not have been as great.
At [27] the Appeal Panel in its decision stated that with respect to the deduction a Medical Assessor is to make under s 323(1), the authorities are consistent and clear regarding the approach a Medical Assessor must take. It stated that, firstly, the level of a worker's post-injury impairment, as at the time of assessment, must be determined. Secondly, the Appeal Panel stated that a worker's prior injury or pre-existing condition or abnormality must be identified. It is steps 3 and 4 that are in dispute.
Thirdly, the Appeal Panel stated that it must be determined whether a proportion of a worker's post-injury impairment is due to that prior injury or pre-existing condition. This third stage of the process cannot be done based on assumption or hypothesis, but must be done by reference to the evidence. The evidence must be able to demonstrate that a proportion of a worker's impairment is due to the pre-existing condition or previous injury.
Fourthly, the Appeal Panel stated that the extent to which a worker's post-injury impairment is due to the prior injury or pre-existing condition or abnormality must be determined. I accept that the Appeal Panel did not specifically state that, as in Ryder, "but for the plaintiff's major depressive disorder, the degree of the late onset of the post-traumatic stress disorder would not have been as great." However, it did explain at [28] referring to Ryder, that the pre-existing condition that a worker has, or the prior injury the worker has suffered, must make a difference to the outcome in order that a worker's impairment can be found to be due to it. The Appeal Panel continued that the extent to which it does make a difference, there must be a deduction. It stated, this fourth stage of the process can not be done by reference to assumption unless the extent to which a deduction is to be made under s 323(1) would be too difficult or costly to determine, because of the absence of medical evidence or some other reason, in which case, in accordance with s 323(2) of the Workplace Injury Act, the deduction is be assumed to be 10% so long as that assumption is not at odds with the evidence. It is the third and fourth propositions that the plaintiff takes issue with.
The Medical Assessor's reasoning as to the appropriate deduction for the pre-existing Major Depressive Disorder is as follows. The plaintiff had recurrent Major Depressive Disorder and this was exacerbated as a secondary psychiatric injury consequent to his physical injury as identified by the contemporaneous notes and discharge summaries. The Medical Assessor stated that it is quite clearly apparent that the plaintiff's low mood and irritability as well as significant dysfunction arising from his pain in this relapse episode contributed to the breakup of his relationship as well as further withdrawal from function, indicating that this secondary psychiatric injury contributes a significant portion to his current WPI, if not the majority of it. There are however a number of features now including intrusive memories, hyperarousal, avoidance and withdrawal that reflects the primary PTSD psychiatric injury which contribute significantly to his current impairment. It is impossible to calculate a pre-existing impairment because his secondary psychiatric injury, the exacerbation of his pre-existing recurrent Major Depressive Disorder, post-dated the incident itself and his primary injury only became manifest many years after the injury. As such, a 10% deduction under s 323 is inappropriate and is at odds with the evidence which would indicate that approximately half of his current WPI is a result of the secondary psychiatric injury exacerbating his pre-existing psychiatric disorder.
The Appeal Panel summarised the Medical Assessor's explanation referred to in the preceding paragraph in this judgment for why he found that a proportion of the appellant's permanent impairment was due to the appellant's pre-existing Major Depressive Disorder was, essentially, that the illness had recurred as a consequence of chronic pain, sequelae, and dysfunction from the physical injury the appellant suffered on 1 March 2013. The Medical Assessor opined that the recurrence of the Major Depressive Disorder manifested by the appellant having low mood and irritability and significant dysfunction. The Appeal Panel stated that the Medical Assessor addressed the evidence when providing his explanation, including the extensive history he had obtained.
So far as the fourth step is concerned, the Appeal Panel stated that the Medical Assessor explained that the appellant's low mood and dysfunction manifesting from the recurrence of the appellant's Major Depressive Disorder contributes a significant portion to the appellant's present impairment "if not the majority of it". The Medical Assessor explained that the appellant's low mood and irritability from his Major Depressive Disorder causes the plaintiff a significant withdrawal from function. The Appeal Panel noted that the Medical Assessor had further explained that features manifesting from the appellant's PTSD also affected the appellant's function and made a significant contribution to the appellant's present impairment.
The plaintiff made a submission that when the Medical Assessor used the word 'impossible' it meant the Medical Assessor should have applied the 10% deduction as stipulated by s 323(2). In response the Appeal Panel stated that the Medical Assessor, by using the term "impossible", acknowledged there was difficulty in determining the exact extent to which the appellant's pre-existing condition contributed to the appellant's present impairment. This is partly because the exacerbation of the pre-existing condition was secondary to the physical injury and partly due to the assessor finding the appellant an unreliable reporter of his history. The Appeal Panel agreed with the Medical Assessor's opinion that to assume the extent of the contribution the pre-existing condition makes to the appellant's permanent impairment is 10% would be at odds with the evidence. In the Appeal Panel's view, when the passage from the MAC extracted at [19] above is read in whole, the Medical Assessor's reason for this conclusion was that he considered the features manifesting from the appellant's Major Depressive Disorder accounted for at least half of the overall impaired function of the appellant and that the features manifesting from the appellant's PTSD contributed almost half. The Medical Assessor formulated his opinion on this issue having regard to the extensive history he had obtained, which, as mentioned, he did having regard to the clinical records before him relating to the appellant.
The Appeal Panel stated that such circumstance, the Medical Assessor, for reasons he explained, that 10% assumption is at odds with the available evidence and was precluded by s 323(2) from assuming the deduction to be made under s 323(1) was 10%. The Appeal Panel held that the Medical Assessor sufficiently explained his reasons for not being able to assume the deduction to be made under s 323(1) was 10%. The appeal was dismissed.
It is my view that the Appeal Panel correctly applied and gave reasons in relation to the four step process as required by s 323(1)-(2) of the Workplace Injury Act and provided sufficient reasons.

Result

The application for Judicial Review is dismissed. The amended summons filed 10 February 2022 is dismissed. The decision of the Appeal Panel dated 25 August 2021 is affirmed.

Costs

Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the first defendant's costs on an ordinary basis.

The Court orders: 1. The amended summons filed 10 February 2022 is dismissed. 2. The decision of the Appeal Panel dated 25 August 2021 is affirmed. 3. The plaintiff is to pay the first defendant's costs on an ordinary basis.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 September 2022

Workers Injury Management and Workers Compensation Act 1998(NSW)

(1996) 13 NSW CCR 344

(2007) 161 LGERA 118

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