WORKERS COMPENSATION - Workplace Injury Management and Workers Compensation Act 1998; appeals by both parties from 30% assessment; both parties agreed that Medical Assessor (MA) miscalculated the whole person impairment; whether a section 323 deduction should have been made; Held - entitlement recalculated; principles applying to application of section 323 considered; Asbury v Donhad Pty Ltd considered; MA applied wrong test; little relevance in final outcome; Medical Assessment Certificate (MAC) confirmed as to section 323; MAC revoked to correct the miscalculation.

1. On 4 September 2025 Chelsea Claydon lodged an Application to Appeal Against the Decision of a Medical Assessor. The medical dispute was assessed by Dr Peter Honeyman, a Medical Assessor, who issued a Medical Assessment Certificate (MAC) on 11 August 2025.
2. On 8 September 2025 The Kitchen Creative Management Pty Limited also lodged an application to Appeal.
3. Ms Clayton's appeal is M1 and the Kitchen Creative Management Pty Limited's appeal is M2.
4. The M1 appellant relies on the following grounds of appeal under s 327(3) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act):
   • the assessment was made on the basis of incorrect criteria.
5. The M2 appellant employer relied on the following grounds:
   • The assessment was made on the basis of incorrect criteria.
   • The medical assessment certificate contains a demonstrable error.
6. The delegate is satisfied that, on the face of the application, at least one ground of appeal has been made out. The Appeal Panel has conducted a review of the original medical assessment but limited to the ground(s) of appeal on which the appeal is made.
7. Rule 128 of the Personal Injury Commission Rules 2021 (the PIC Rules) and Procedural Direction PIC7 - Appeals, reviews, reconsiderations and correction of obvious errors in medical disputes set out the practice and procedure in relation to the medical appeal process under s 328 of the 1998 Act. An Appeal Panel determines its own procedures in accordance with r 128(1) of the PIC Rules.
8. The assessment of permanent impairment is conducted in accordance with the SIRA NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment, 4th ed

1 March 2021 (the Guidelines) and the American Medical Association Guides to the Evaluation of Permanent Impairment, 5th ed (AMA 5). "WPI" is reference to whole person impairment. "Baseline WPI" is a reference to the total WPI assessed before deduction for the effect of pre-existing injury, condition or abnormality pursuant to s 323 of the 1998 Act.

1. On 16 July 2025 this matter was referred to the Medical Assessor for a WPI assessment caused by injury to the cervical spine and scarring (TEMSKI) on 16 November 2018.
2. Ms Clayton was employed as a Production Manager. She developed a condition of gradual onset that initially started as right arm pain and then spread into the neck and shoulders.
3. Ms Clayton sought medical help and underwent various tests and investigations.
4. She was treated conservatively at first with nerve blocks and she came to surgery with Professor Laurence McEntee, orthopaedic surgeon on 22 February 2024. This consisted of a total disc replacement at C4/5, C5/6 and C6/7.
5. The Medical Assessor assessed 30% WPI.

1. The Appeal Panel conducted a preliminary review of the original medical assessment in the absence of the parties and in accordance with the Procedural Direction PIC7.
2. As a result of that preliminary review, the Appeal Panel determined that it was not necessary for the worker to undergo a further medical examination because the issue raised in the M1 appeal concerned the accuracy of the method of calculation which could be corrected as an error in calculation. The issue raised in the M2 appeal related to the application of s 323 of the 1998 Act, but no re-examination was necessary, as no error was found in the MAC.

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

1. The parts of the medical certificate given by the Medical Assessor that are relevant to the appeal are set out, where relevant, in the body of this decision.

1. Both parties made written submissions which have been considered below by the Appeal Panel.

1. 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.
2. In Campbelltown City Council v Vegan [2006] NSWCA 284 the Court of Appeal held that the Appeal Panel is obliged to give reasons. Where there are disputes of fact it may be necessary to refer to evidence or other material on which findings are based, but the extent to which this is necessary will vary from case to case. Where more than one conclusion is open, it will be necessary to explain why one conclusion is preferred. On the other hand, the reasons need not be extensive or provide a detailed explanation of the criteria applied by the medical professionals in reaching a professional judgement.

1. In his reasons for assessment the Medical Assessor said at [11]:

"The cervical spine is assessed by the DRE method, as set out in T15-5 p 392. She fits DRE 4 with 25% as disc replacement is equated as fusion for classification.

4.37 p29 of the NSW guides modifies these ratings. She has had cervical spinal surgery with residual symptoms and radiculopathy which adds 3% WPI. She has had surgery at 2 further levels which add 2%."

24. In considering the medical opinions before him, the Medical Assessor said at [11c]:

"Drs Gehr and Rosenberg agree of finding radiculopathy and their assessments of the cervical spine WPI. Both have added their values for the spine rather than combine. But Dr Rosenberg has reduced 2/10 on the basis of radiology at the time of injury. I disagree. He has recorded no history of preceding neck complaints."

1. At [12] of the MAC the Medical Assessor said:

"12. DEDUCTION (IF ANY) FOR THE PROPORTION OF THE IMPAIRMENT THAT IS DUE TO PREVIOUS INJURY OR PRE-EXISTING CONDITION OR ABNORMALITY

1. In my opinion the worker suffers from the following relevant previous injuries, pre-existing conditions or abnormalities:

The initial x-rays do show degenerative changes. But by history there were no

previous presentations for neck pain, and she had been very physically active and

1. Ms Clayton submitted that there had been an error in the manner in which the Medical Assessor had calculated the impairments that he assessed.
2. It was submitted that the total of 30% WPI was incorrect and that it should have been 31%.
3. The respondent relied on a letter from its solicitors in response. It agreed that there had been an error in the calculation and that the matter should be referred to the Panel.

1. Although it was submitted that 31% was the correct total, after properly calculating the findings pursuant to the Guidelines, in fact we have found it to be 32%.
2. The Guides provide that in order to assess the impairment the first step is to calculate the DRE category, which in this case is DRE 4, giving 25%.
3. To this is added the impairment for the restrictions in the activities of daily living which was assessed at 2% to give a total of 27%.
4. Impairment then needs to be calculated according to Table 4.2 of the Guides, which in

Ms Clayton's case provided for an additional 3% for residual radiculopathy and 2% for the two additional levels operated on, giving a total of 5% WPI. 5. The total calculated pursuant to Table 4.2 is then combined with the 27% WPI. 6. Using the combined value table that gives a total of 31%. However to this figure a further 2% needs to be combined for the scarring, which in turn leads to 32% WPI. 7. The Medical Assessor has simply carried out the calculation steps in the wrong order.

1. The appellant employer appealed against the finding by the Medical Assessor that there should be no deduction pursuant to s 323 of the 1998 Act.
2. The appellant employer submitted that the finding by the Medical Assessor was incorrect.
3. We were referred to Cole v Wenaline Pty Ltd[1] and Ryder v Sundance Bakehouse.[2] The appellant employer submitted that the Medical Assessor had applied the wrong test in the application of s 323.
4. We were referred to the report of Dr Rosenberg, who made a deduction of 20% pursuant to s 323.
5. The appellant employer submitted that the failure to apply a deduction was based on incorrect criteria. It submitted that there should be at least a one-tenth deduction.

1. Ms Clayton referred to the comments made by the Medical Assessor when considering the deduction made by Dr Rosenberg.
2. Ms Clayton submitted that the appellant employer had not demonstrated that the degenerative condition shown on X-ray had contributed to the baseline impairment. She submitted that the first scan of 5 December 2018 showed a minimal facet joint degeneration and submitted that the appeal should be dismissed.

"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."

1. In Asbury v Donhad Pty Ltd[3] Griffiths J gave the following summary of the applicable principles in the application of s 323, from [52]:

"The task of a medical assessor under s 323 was described by Schmidt J in Cole at [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 was due to the first injury. Thirdly, what that proportion was. Undoubtedly in undertaking this exercise, the medical members of an Appeal Panel must utilise their medical judgment, knowledge and experience. Nevertheless, all stages of the statutory exercise must be taken in the light of the evidence and without the making of assumptions not provided for by the section.'

1. Earlier in the reasons for judgment in Cole, her Honour made the following observations regarding s 323 (emphasis added):

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.

30. Section 323 does not permit that assessment to be made on the basis of an assumption or hypothesis, that once a particular injury has occurred, it will always, 'irrespective of outcome', contribute to the impairment flowing from any subsequent injury. The assessment must have regard to the evidence as to the actual consequences of the earlier injury, pre-existing condition or abnormality. The extent that the later impairment was due to the earlier injury, pre-existing condition or abnormality must be determined. The only exception is that provided for in s 323(2), where the required deduction 'will be difficult or costly to determine (because, for example, of the absence of medical evidence)'. In that case, an assumption is provided for, namely that the deduction 'is 10% of the impairment'. Even then, that assumption is displaced, if it is at odds with the available evidence.

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. In a case such as this, that conclusion must be reached on the evidence led as to the actual consequences of the earlier and later injuries, unless the assumption provided in s 323(2) applies.

1. This approach was endorsed and explained by Campbell J in Ryder v Sundance Bakehouse [2015] NSWSC 526 at [45] (emphasis added):

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.

1. Finally, it is desirable to note the following observations by Wright J in Southwell at [49]-[50] which also approve the approach in Cole:

49. On its terms, however, s 323(2) does not apply if it has not been determined that a deduction is to be made under subs (1) because a part or portion of the level of impairment suffered was due to the pre-existing condition. Subsection (2) relates only to "the extent of a deduction under this section" not to whether such a deduction is required. As Schmidt J held, in effect, in Cole v Wenaline Pty Ltd [2010] NSWSC 78 (Cole) at [30] and [31], s 323(1) does not permit the assessment of whether a deduction is required to be made on the basis of an assumption or hypothesis, that once there is found to be a particular pre-existing condition, it will always, "irrespective of outcome", contribute to the impairment flowing from any subsequent injury. Rather, the assessment of whether a deduction is required must have regard to the evidence as to the actual consequences of the pre-existing condition and whether any proportion of the permanent impairment present after the workplace injury was due to the pre-existing condition.

50. Thus, it has been held, in cases such as Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liq) [2013] NSWSC 365 at [126] (Schmidt J) and Secretary, Department of Communities and Justice v Lewandowski [2023] NSWSC 334 at [52] (Griffith AJ), that what must be determined under s 323 involves, at least, three enquiries:

• Firstly, what the extent of the resulting impairment is.
• Secondly, whether the pre-existing condition contributed to the impairment.
• Thirdly, if it did, what proportion of the impairment was due to the pre-existing condition."

1. In Mr Claydon's case the resulting impairment, described in these reasons as the baseline WPI, is not in issue, save as to the calculation issue above discussed. The pre-existing condition is the presence of a degenerative condition in Ms Claydon's cervical spine.
2. The appellant employer submitted that in deciding that the degenerative condition did not contribute to the baseline WPI, the Medical Assessor applied the wrong test. As noted above, he said, firstly that he disagreed with the opinion of Dr Rosenberg's opinion that a 2/10 deduction was called for, and secondly, to repeat, he said:

"The initial x-rays do show degenerative changes. But by history there were no previous presentations for neck pain, and she had been very physically active and well before start of symptoms."

1. Dr Rosenberg's opinion was contained in his report of 11 April 2025.[4] He noted evidence of degenerative disc disease shown by the investigations, and advised:[5]

"I believe the radiological findings were largely pre-existing but she did become symptomatic whilst at work in 2018. I believe the fact that she did have some disc protrusions and degeneration and that she had a positive discography has resulted in the pursuit of the three-level disc replacement. I believe it highly unlikely that the nature and conditions of her work resulted in the need for such extensive surgery."

1. The question of whether a person was asymptomatic prior to the subject injury is not determinative of the question whether a deduction should be made. In Vitaz v Westform (NSW) Pty Ltd[6] Basten JA, McColl JA and Handley AJA agreeing, said at [43]:

"....The resulting principle is that if a pre-existing condition is a contributing factor causing permanent impairment, a deduction is required even though the pre-existing condition had been asymptomatic prior to the injury. In the absence of any medical evidence establishing a contest as to whether the pre-existing condition did contribute to the level of impairment, the complaint about a failure to give reasons must fail. An approved medical specialist is entitled to reach conclusions, no doubt partly on an intuitive basis, and no reasons are required in circumstances where the alternative conclusion is not presented by the evidence and is not shown to be necessarily available."

1. A Medical Assessor is not required to opine on the opinions of other experts, but his function is to give his own opinion of the medical question referred by applying his medical experience and expertise.[7] Whilst the employer is technically correct that the question of whether a person is asymptomatic or not, is not the appropriate test, that issue is a significant factual consideration in the application of s 323. The Medical Assessor found that there was an alternative conclusion presented by the evidence, namely that Ms Claydon's degenerative condition did not contribute to the baseline impairment. He explained why he differed from Dr Rosenberg, stating that Ms Claydon was not only asymptomatic, but had been very physically active and well before the onset of her symptoms. He has thus considered the second step outlined by Griffiths J above, and decided there was no contribution. We find no error in his having done so.
2. Accordingly, the MAC will be revoked to reflect the correct calculation as explained above.
3. For these reasons, the Appeal Panel has determined that the MAC issued on

11 August 2025 should be revoked, and a new MAC should be issued. The new certificate is attached to this statement of reasons.

This Certificate is issued pursuant to s 328(5) of the Workplace Injury Management and Workers Compensation Act 1998.

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

Chapter, page and paragraph number in NSW workers compensation guidelines

Chapter, page, paragraph, figure and table numbers in AMA 5 Guides

Proportion of permanent impairment due to pre-existing injury, abnormality or condition

Sub-total/s % WPI (after any deductions in column 6)

Total % WPI (the Combined Table values of all sub-totals)

[1] [2010] NSWSC 78.

[2] [2015] NSWSC 526.

[3] [2025] NSWSC 1,558.

[6] [2011] NSW CA 254.

[7] Wingfoot Australia Pty Ltd v Kocak [2013] HCA 43 at [47].