WORKERS COMPENSATION - Workplace Injury Management and Workers Compensation Act 1998; assessment of whole person impairment of psychological injury; appeal by worker on grounds of the assessment being made on the basis of incorrect criteria and demonstrable error; Appeal Panel satisfied that the Medical Assessor erred in making a deduction pursuant to section 323 in relation to a pre-existing condition by way a deduction based on 3% for effects of treatment; Held - MAC revoked.

1. On 25 November 2025 Jennifer Cunningham (the appellant) lodged an Application to Appeal Against the Decision of a Medical Assessor. The medical dispute was assessed by Dr Melissa Barrett, a Medical Assessor, who issued a Medical Assessment Certificate (MAC) on 29 October 2025.
2. The 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, and
   • the MAC contains a demonstrable error.
3. 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.
4. 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.
5. 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).

1. The appellant sustained a psychological injury in the course of her employment as a finance officer with Kurri Kurri Community Services Pty Ltd (the respondent) deemed to have occurred on 6 November 2017.
2. The appellant filed an Application to Resolve a Dispute (ARD) dated 26 June 2025.
3. In a Certificate of Determination - Consent Orders Member Gaius Whiffin remitted the matter to the President for referral to a Medical Assessor pursuant to s 321 of the 1998 Act, for assessment as follows:

(a) date of injury: 6 November 2017 (deemed);

(b) body systems/parts: psychiatric and psychological disorders, and

(c) method of assessment: whole person impairment.

1. The matter was referred to Dr Mellssa Barrett Medical Assessor, for assessment of whole person impairment (WPI) of a psychiatric and psychological disorder.
2. The Medical Assessor examined the appellant on 20 October 2025.
3. The Medical Assessor assessed 22% WPI and added 1% for treatment effect. She then made a deduction of 3% WPI pursuant to s 323 of the 1998 Act which resulted in a total of 20% WPI as a result of the injury deemed to have occurred on 6 November 2017.

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 there was sufficient information on which to make a determination.

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. They are not repeated in full but have been considered by the Appeal Panel.
2. The appellant's submissions include the following:

(a) Ground 1 - s 323 of the 1998 Act - the Medical Assessor incorrectly applied a deduction in accordance with s 323 of the 1998 Act in relation to a pre-existing condition by way of a deduction for a pre-existing treatment effect.

(b) Southwell v Qantas Airways Limited [2024] NSWSC 497 and Neader v The Trustee for Vestito Unit Trust t/as TS 14 Plus Australia Pty Ltd [2025] NSWSC 866 set out the correct method for assessing a pre-existing psychiatric impairment.

(c) The Medical Assessor has not provided any calculations or other method for calculating the past impairment level, in accordance with Guideline 11.10 as set out above. Presumably, if the Medical Assessor had assessed the appellant in accordance with the Guideline, she would have found her to have no rateable permanent impairment based on the Psychiatric Impairment Rating Scales (PIRS) categories as she concluded that the appellant's previous psychological condition was asymptomatic at the time of her work-related injury.

(d) The report of Dr Shannon Paisley stated:

"On the available evidence, any pre-existing condition had been treated and was asymptomatic. A Whole Person Impairment assessment done just prior to the tornado would have scored 0%. Therefore, I did not make any deductions for pre-existing impairments."

(e) The Medical Assessor notes that the general practitioner (GP) records did not show any further entries relating to psychological symptoms after an attendance on 4 May 2017, being six months prior to her work-related psychological injury. This is consistent with the appellant's reports to the Medical Assessor that in the period prior to the injury she was symptom-free and her psychological condition was asymptomatic.

(f) Had the Medical Assessor determined that a pre-existing WPI could not be reliably assessed, or it would be too difficult or too costly to determine, it would have been open to the Medical Assessor to apply a 10% deduction to her assessed impairment. Had this been applied to the overall assessment of 23%, the final assessment of the appellant would have been 21% (23% - 2.3% (10%) = 20.7, rounded, 21%).

(g) Treatment effects - treatment effects are considered separately both from the permanent impairment assessment and from any applicable s 323 deductions. The Guidelines at Cl 1.32 outline the method an assessor is to follow to make adjustment for the effects of treatment.

(h) There is nothing in the Guidelines Cl 1.31-1.33 that allows a Medical Assessor to decrease the overall impairment assessment based on a pre-existing treatment effect. In fact, the wording of the Guideline is such that the assessor may increase the percentage of WPI assessed by 1-3%. The overall purpose of the treatment effect guidelines is to allow the Medical Assessor to account for any greater impairment that the injured worker may have at the time of the assessment, that would otherwise increase their impairment if it was not being managed by long-term ongoing treatment.

(i) Therefore, the appellant submits that the Medical Assessor has applied an incorrect criterion and/or a demonstrable error in using the treatment effect Guidelines to discount the appellant's assessed WPI for a pre-existing condition.

(j) Ground 2 - further or in the alternative, the Medical Assessor has failed to provide adequate reasons for making the deduction of 3% for pre-existing treatment effect.

(k) If it is found that the Medical Assessor was correct in applying a deduction on the basis of a pre-existing treatment effect (which is not conceded), the Medical Assessor has not provided adequate reasons for applying a 3% deduction (being the highest deduction allowed for treatment effect) for a pre-existing treatment effect, rather than 1 or 2% deduction as allowed under the Guidelines.

(l) The MAC should be set aside, and a new MAC issued which removes the deduction of 3% for a pre-existing treatment effect.

1. The respondent's submissions include the following:

(a) The Medical Assessor has clearly identified the pre-existing condition being a longstanding history of generalised anxiety disorder with panic attacks and with the natural history of the condition tending to wax and wane with external stressors.

(b) Section 323(1) requires a deduction to be made when a proportion of the impairment is due to a previous injury, condition or abnormality, regardless of whether the pre-existing condition was symptomatic at the time of injury.

(c) To the extent that Guideline Cl 11.10 requires proof of assessable functional impairment prior to the injury, it is inconsistent with s 323(1). To the extent of the inconsistency, s 323(1) prevails and Guideline 11.10 is invalid (Marks v Secretary, Department of Communities and Justice (No 2) [2021] NSWSC 616).

(d) The Medical Assessor has correctly applied a deduction of 3% WPI based on the appellant's previous condition, which was present in GP records since at least 2005, and which had been managed by long term medication and treatment.

(e) The appellant gave the Medical Assessor a history of significant past psychiatric condition, recorded on page 8 of the MAC.

(f) Shortly prior to the work injury, a GP record indicates attendance by the appellant on 4 May 2017 where she requested referrals to psychologist, with continued generalised anxiety with panic episodes occurring twice a week, anxious worrying causing her mind to race, and insomnia. On the Depression, Anxiety, and Stress Scales (DASS) self-report measure, she scored in the severe range for anxiety and stress and in the mild range for depression. Despite this presentation shortly prior to injury, the appellant stated at [40] of her supplementary statement: "With my previous mental health stressors prior to my injury, in each of those situations my mental health has been able to resolve in a relatively short time with counselling and mediations. "

(g) The evidence clearly supports the reasoning of the Medical Assessor for diagnosing a pre-existing history of generalised anxiety disorder, a history of somatic symptoms of anxiety, at times reaching severity of panic attacks, waxing and waning, since 1999.The Medical Assessor, with reference to the appellant's own history, statements, and the clinical records reviewed, opined "[the appellant] was using a maintenance SSRI antidepressant, sertraline, and had had previous periods of psychological intervention, adopting a CBT approach."

(h) On this given history and the clinical records, there is no doubt that Medical Assessor's opinion that the appellant was suffering a pre-existing condition was open to her. It is submitted, as opined by the Medical Assessor, that the appellant had a clear history of decompression in heightened states of stress, personal or external stressors, which heightened her pre-existing generalised anxiety disorder, and contributed to the severity of symptoms experienced.

(i) The Medical Assessor then opined, on that history, her pre-existing condition was asymptomatic for short period prior to the work injury on account of her maintenance treatment with antidepressants medications. This is analogous to a 3% WPI adjustment of impairment for the effects of treatment pursuant to Cl 1.32 of the Guidelines, as opined by the Medical Assessor. The Medical Assessor therefore found the pre-existing impairment to be 3% WPI.

(j) There was ample evidence before the Medical Assessor, which she considered and referred to, demonstrating there was a pre-existing condition that contributed to the appellant's impairment. Having discharged her onus of referring to that evidence and explaining the reasons for his assessment, the extent of impairment was a matter wholly within the jurisdiction of the Medical Assessor. The Medical Assessor did not decrease impairment pursuant to Cl 1.32 of the Guidelines, rather that paragraph was used to quantify the proportion of pre-existing impairment by reference to the evidence.

(k) There was no error in the Medical Assessor 's methodology or application of the relevant criteria, and the deduction therefore ought not to be the subject of challenge.

(l) In line with the application of s 323 in Southwell v Qantas Airways Limited [2024] NSWSC 497 at [50] (Southwell), the Medical Assessor's assessment addressed the extent of the resulting impairment (due to the work injury) using the PlRS on pages 18 and 19 of the MAC, the Medical Assessor found the pre-existing condition (generalised anxiety disorder with panic attacks) contributed to the current impairment - and the Medical Assessor quantified the proportion of impairment due to that pre-existing condition with reference to Cl 1.32 of the Guidelines, and deducted that amount.

(m) This approach was open to the Medical Assessor and the MAC does not contain any demonstrable error and/or is not based on the application of incorrect criteria.

(n) Ground 2 - adequate reasons - s 325(2)(c) of the 1998 Act provides that a Medical Assessor must provide reasons for their assessment. This does not require an Medical Assessor to provide extensively detailed reasons as to his or her opinion, rather it requires the Medical Assessor to "explain the actual path of reasoning in sufficient detail to enable the Court to see whether the opinion does or does not involve any error of law" (see State of New South Wales (NSW) Department of Education v Kaur [2016] NSWSC 346 and Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43).

(o) In this regard, the Medical Assessor recorded an extensive history from the appellant and recorded an overview of the evidence reviewed in conducting her examination of this case. She provided detailed reasoning for the assessment, which is supported by the available evidence in the proceedings. The Medical Assessor explained the actual path or reasoning in sufficient detail, as required.

(p) The appellant failed to demonstrate there is an error in the assessment, and more than simply a difference in opinion.

(q) This assessment was open to the Medical Assessor and available to her following the assessment, and when reading all the medical evidence in the proceedings as a whole.

(r) The appeal should be dismissed as the MAC was not made on the basis of incorrect criteria to warrant an appeal in accordance with s 327(3)(c) of the 1998 Act and as the MAC does not contain a demonstrable error to warrant an appeal in accordance with s 327(3)(d) of the 1998 Act.

(s) The MAC dated 29 October 2025 and the assessment of 20% WPI ought to be confirmed.

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.
3. The Appeal Panel reviewed the MAC and evidence in this matter.

1. The appellant submits that the Medical Assessor incorrectly applied a deduction in accordance with s 323 of the 1998 Act in relation to a pre-existing condition by way of making a deduction for a pre-existing treatment effect.
2. The Medical Assessor on p 5 of the MAC under "History relating to injury" wrote:

"Ms Cunningham reported that on 6 November 2017 she was at work when there was a severe storm. She had assisted another staff member to a safer location in the building but had returned to the office to collect her handbag when the storm caused the building's roof to come off, the wall to collapse and building material fell on her. She stated she does not recall getting out of the debris but people told her she jumped out and then fell. People came to assist her. Ambulance and Fire Brigade Services were called and she was taken to hospital."

1. The Medical Assessor at pages 11-12 of the MAC under "summary of injuries and diagnoses" wrote:

"Ms Cunningham had a pre-existing history of generalised anxiety disorder, where she had a history of somatic symptoms of anxiety, at times reaching severity of panic attacks, intermittent waxing and waning at times during periods of heightened stress, since 1999. She was using a maintenance SSRI antidepressant, sertraline, and had had previous periods of psychological intervention, adopting a CBT approach.

As a result of the workplace injury on 6 November 2017, she developed Post Traumatic Stress Disorder, where she (A) was injured by building collapse in the context of a storm, after which she developed (B) re-experiencing symptoms, flashbacks and physiological arousal when exposed to external reminders, such as TV news images of collapsed buildings or observing inclement weather, (C) avoidance symptoms, avoiding going out, avoiding leaving the home in stormy weather, or going out on her own, avoiding news articles depicting collapsed buildings, (D) negative affect and cognition, persistent feelings of fear, worrying 'if I am safe' , negative self-belief, ruminating about her altered circumstances, and reduced belief in her capacity to manage stress 'can't do that on my own', 'can't risk that now' associated with low mood, intermittent suicidal ideation, wondering, 'What's the point of this life?' and one episode of suicide attempt by fatal means in 2018, reduced interest and energy, as well as (E) sustained hyperarousal and reactivity, noting exaggerated startle to external noises, poor concentration, which had impacted her work performance in an attempted return to work with an alternate employer, insomnia, poor energy, a pattern of comfort eating, leading to weight gain and irritability. Her symptoms have persisted for more than six months and therefore fulfil the chronic specifier, cause her distress and impact her functioning across a range of domains, fulfilling severity criteria".

1. Under "Details of any previous or subsequent accidents, injuries or condition", the Medical Assessor wrote:

"She acknowledged a past psychiatric history. Her first marriage was characterised by emotional abuse over a period of three or four years and then post-separation abuse in the form of physical domestic violence and stalking, stating her ex-husband smashed her car windows. She had three different AVOs against him. The post-separation abuse continued for about three or four years until she forgave unpaid child support. She recalls symptoms of insomnia and tearfulness. She saw her GP and was commenced on the SSRI antidepressant, citalopram, which she took for about six months to one year. She tried to She was then commenced on sertraline, which she continued. She separated from her husband in 1999. She attended marriage counselling and then women's groups acknowledging she was suffering low self-esteem.

In 2010, while working at NovaCare, a whiteboard had fallen on her causing an injury to her neck which was the subject of a Workers Compensation claim. She reports there were other stressors in the workplace, issues with board members and unreasonable workload and she made a Workers Compensation claim for bullying in 2011, for which she was off work for six months. She described episodes of somatic symptoms of anxiety, including palpitations, which caused her fear she was having a myocardial infarction and called an ambulance. Cardiac investigations were apparently normal and her symptoms were considered to be related to stress triggered by deadlines. She saw her psychologist through EAP for a few sessions. In the context of the alleged workplace bullying, she reports an exacerbation of neck pain due to muscular tension and increased somatic symptoms of anxiety and worrying. She saw a psychologist for a period of six months who utilised some graded exposure to the workplace. Her Workers Compensation Claim was rejected and she resigned from that employer. She apparently continued on sertraline.

She stated that her mother was diagnosed with cancer in 2014 and died in 2015. She suffered grief and saw a counsellor for six months. She remained on sertraline 50 mg.

She acknowledged some previous stressors in the current workplace, alleging the previous chief financial officer had possibly embezzled money. However she stated that on sertraline 50 mg she was well prior to the storm. She denied any insomnia, she stated. 'I used to be a social butterfly, and gave the example that she had set-up parents without partners group after separation'.

Since the 2010 workplace injury when the whiteboard fell upon her she had intermittent neck stiffness but not pain. She attended a chiropractor once a month.

She acknowledged a lifelong history of obesity. She described a history of binge eating disorder, binge eating carbohydrates, such as a whole block of chocolate, particularly when stressed. She did not engage in any purging or laxative abuse. She denied feeling guilty after binges. At a height of 162 cm she stated that prior to the subject workplace injury she was 145 kg resulting in a BMI of 55.3 kg/m2, where a BMI more than 30 is defined as obese. She stated she had been offered weight loss surgery but had declined considering that if she was unable to binge eat, 'might mentally not cope with that'. She had been diagnosed with type 2 diabetes, requiring insulin. She has been prescribed Ozempic for the last six months which has resulted in weight loss of about 3 kg or 4 kg. She had hypertension, managed on antihypertensives."

1. At Part 8 of the MAC, the Medical Assessor wrote:

"e. Is any proportion of loss of efficient use or impairment or whole person impairment, due to a previous injury, pre-existing condition or abnormality? Yes.

1. If so, please indicate which body part/system is affected by the previous injury, pre-existing condition or abnormality. Psychiatric. There is a pre-existing history of generalised anxiety disorder with panic attacks."

1. Under "Reasons for Assessment" the Medical Assessor wrote:

"a. My opinion and assessment of whole person impairment:

20% (WPI 22%, minus pre-existing impairment of 3% plus 1% treatment effect = 20%)."

1. At Part 11 of the MAC, the Medical Assessor wrote:

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

1. Generalised anxiety disorder with panic attacks.

In my opinion the deductible proportion is 3% for the following reasons:

Ms Cunningham had a longstanding history of generalised anxiety disorder with panic attacks reported at assessment and documented in the treating GP's records. It is the natural history of generalised anxiety disorder that it tends to wax and wane with external stressors, which had been the case for Ms Cunningham. There had been periods where her symptoms had increased, such that she was unable to work for a period of about six months in 2011, and she had required periods of treatment with a psychologist and ongoing SSRI antidepressant treatment, initially citalopram and then sertraline, at doses up to 200 mg.

I note the GP records indicate an attendance on 4 May 2017, approximately six months prior to the workplace injury, where she requested referrals to a psychologist with continuing generalised anxiety with panic episodes occurring twice a week, anxious worrying causing her mind to race and insomnia. On the DASS, self-report measure, she scored in the severe range for anxiety and stress and in the mild range for depression. However, Ms Cunningham reported that in the period prior to the injury, on maintenance sertraline and with resolution of the workplace stressors, she was symptom-free, and thus the condition was asymptomatic. I note there were no further entries in the GP records describing anxiety symptoms for a period of about 6 months injury. If Ms Cunningham's history is accepted, then the condition was asymptomatic on maintenance treatment, resulting in there being a 3% treatment effect. Therefore the pre-existing impairment is 3%."

1. In her statement dated 1 October 2025, the appellant stated that in about December 1999 she was diagnosed with depression by her GP after she separated from her ex-husband. She said that there was domestic violence involved in the separation process which resulted in her ex-husband having two Interim Apprehended Violence Orders (AVO) issued and three AVOs each of 12 months duration. She stated that once the first two AVO's expired the domestic violence started up again and she feared for her safety. The appellant said that she managed her depression with anti-depressant medication, trying to exercise and attending counselling, including group counselling classes and was prescribed Cipramil.
2. The appellant stated that in about July 2003 she consulted her GP again in relation to depressive symptoms. and was prescribed Cipramil which she took for about 12 months. She said that this was around the time she attended Court regarding the last AVO against her ex-husband and also around the time she was first diagnosed with diabetes.
3. The appellant stated that on 17 March 2005 she reported to her GP that her anxiety symptoms were returning due to work stressors and was prescribed Zoloft and Xanax. She wrote:

"10. Realising my ability to handle stressors was regressing each time I stopped taking antidepressants I let my mental health be monitored by my GP. I continued to take Zoloft until my doctors decided to change my prescription."

1. The appellant stated that she suffered from another work injury on 26 June 2006 when she tripped and fell of some unguarded stairs at work and noticed an increase in anxiety around the time of this injury. The appellant described struggling working part-time, worrying about finances, transporting her child to school, and being paid little if any child support. She said that she was also in the process of negotiating property settlement with her ex-husband which was overwhelming. The appellant stated that she took a second part-time job to help relieve some financial burdens and then was given a full-time position and increased responsibilities and pay with her first employer. She stated that she stayed there until 2008 where she was unfairly dismissed being replaced by the daughter of the company's director.
2. The appellant stated that she then took a job as a payroll officer in 2009 for a medium size not-for-profit (NFP) organisation. She said the role required a lot of corrections each week to the digital costing data compared to manual data supplied which was stressful. She stated that in December 2009 the stress of this position caused her to have pains in her chest which resulted in an ambulance being called. She said that an angiogram showed no problems with her heart and the episode was put down to anxiety. The appellant stated that her GP suggested she see a psychologist for some coping strategies which she did through the Employer Assistance Program (EAP), and she continued to work full-time as a payroll officer and manage my day-to-day life.
3. The appellant stated that while at work, on 12 October 2010 she had a whiteboard detach from a glass panel and hit her causing a work-related neck and upper back injury. She said that she returned to full duties in January 2011.
4. The appellant stated that she saw many changes in management, investigations into previous management, many staff who alleged they were being bullied by new management, lots of staff leaving in 2011 and watched her assistant being bullied and eventually resigning. She said that she felt that more pressure was being put on her, and this resulted in more stress. She stated that in December 2011 she presented to her doctor with pain in her neck and was certified unfit due to "exacerbation of previous neck injury, workplace issues".
5. The appellant stated that following this the bullying intensified and her stress and anxiety became intense during this period resulting in panic attacks. She said that she attended psychology appointments as part of her treatment and managed the panic attacks by way of psychotherapy, relaxation and exposure therapy. She stated that she eventually resigned from that position in June 2012.
6. The appellant stated that another personal stressor in 2012 was her mother undergoing a double bypass as a result of a heart attack the death of her aunt in July 2012. She said that her aunt died in America and she had to help get her body and belongings home to Australia which took several months. She stated that she also had to help plan for a funeral, packing up her aunt's home in Sydney and dealing with her estate.
7. The appellant stated that she looked for new employment and commenced a job as a finance officer for another NFP late in early 2012. She wrote: "My psychological symptoms had resolved at this point and I was enjoying my new job and life in general."
8. The appellant stated that in 2014 she experienced some work-related stressors when she reported that money was going missing from the till of a small shopfront the company ran. She stated that she decided to attend counselling services, to lower her stress levels. She said that this was helpful and she was able to continue to work on a full-time basis with the support of the counsellor.
9. The appellant stated that at the end of 2014 her mother was diagnosed with stage IV cancer and given only a short time to live. She stated that this was very stressful time for her and whilst working fulltime, she shared care of her mother with her sister staying several nights each week until her mother moved to the hospice. The appellant stated that she was still working full-time and taking sick leave and other leave to assist in caring for her mother and continuing with the counselling to help her manage. She said that her mother died on 17 December 2015 and, as she had been attending grief counselling, she was able to return to work straight after the annual Christmas shutdown two weeks later. She stated that she was no longer seeing the counsellor as she had moved but was still using the strategies she had taught her during the sessions to help her cope during this time. She said that she continued to work full-time after this.
10. The appellant stated that when she came back to work in 2016, new Board members, a new Chief Financial Officer (CFO) then finally a new Chief Executive Officer (CEO) were employed, which was a good thing for the company and for her work. She said that the new CFO and CEO were competent at their jobs and seemed to be moving the company forward and the place felt good. The appellant wrote:

"I was in a much better state of mind with my job. I was feeling very content, being heard and that I mattered. I was feeling good about work and life and felt like I was progressing in my job, learning new skills and generally positive about life. This all changed after the work incident on 6 November 2017 causing my work injury."

"With my previous mental health stressors prior to my injury, in each of those situations my mental health has been able to resolve in a relatively short time with counselling and medications. I was injured on 6/11/2017 and it has now been nearly 8 years and the PTSD has not subsided and the Depression is still affecting me".

1. Dr Shannon Paisley, consultant psychiatrist, in a report dated 31 May 2023 (ARD p 27) stated:

"I acknowledge her pre-existing history of episodes of depression and anxiety in 1999 and 2011. I agree that this may have increased her susceptibility to developing further episodes of depression and anxiety.

However, there was no evidence of impairments in her functioning because of any preexisting condition at the time of the tornado. On the available evidence, any pre-existing condition had been treated and was asymptomatic. A Whole Person Impairment assessment done just prior to the tornado would have scored 0%. Therefore, I did not make any deductions for pre-existing impairments."

1. Dr Ben Teoh, consultant psychiatrist, in a report dated 25 February 2025 assessed 22% WPI and deducted 2% pursuant to s 323 of the 1998 Act, which resulted in an assessment of 20% WPI.
2. The clinical records of Wallsend Medical Centre indicate that the antidepressant Cipramil was commenced on 8 December 1999 (p 22 Application to Lodge Additional Documents (ALAD)1 October 2025).
3. The clinical records of Wallsend Medical Centre indicate Zoloft and Xanax were commenced on 17 March 2025 to manage anxiety symptoms (p 26 ALAD1 October 2025). From these records it appears that the appellant continued use of Zoloft up to the work injury.
4. In the GP Mental Health Care Plan (p 11 ALAD 1October 25) in a copy of an entry dated 29 October 2015, Dr Louise McKinnon wrote:

Presents with history of anxiety since late teenage years. She became more anxious over time during her first relationship which was verbally abusive and which became physically abusive during the separation. After separating, she experienced depression and had some suicidal ideation but no attempts. She would have full blown panic attacks twice a day at least.

She currently experiences panic episodes which are not so intense or long (palpitations, nausea, shakey(sic) legs, some SOB) md manages them fairly well through breathing and calming techniques. These occur about twice a week now. She feels under pressure from so many areas and states: 'I can't handle pressure. I can't have deadlines.' She admits to procrastinating and taking too long doing simple tasks. She also admits to being somewhat of a perfectionist.

She has a lot of responsibilities caring for her frail parents along with her sister. Her mum is terminally ill and she finds her quite demanding. Her dad can be aggressive and make things difficult. She was involved in a workplace bullying situation 4 years ago which led to workcover issues and finally leaving the job.

She has been in counselling over the past year and getting much help from this."

1. The clinical records of Wallsend Medical Centre contained the following entries:

(a) in an entry dated 5 February 2016 (p 77 Reply), Dr Louise McKinnon noted that the appellant's mother had died in December and she was "having greater difficulties at work because boss insists she arrive on time (can't due to extreme anxiety in mornings getting ready for work) - this has caused extreme anxiety....Tends to be anxious all the time now and having major panic episodes 1-2X a week ...wants to continue to see Lara (psychologist) on a monthly basis." Dr Mckinnon noted "DASS - Depression 10 (mid low and down from 12), anxiety 22 (ext seve-low and down from 24, Stress 25 seve-low and down from 32)".

(b) In an entry dated 19 April 2016 (p 78 Reply), Dr McKinnon noted that the appellant had a crying fit at work last Tuesday and someone had to come and get her from work. Dr McKinnon noted that the psychologist suggested the appellant needed a psychiatric assessment.

(c) In a referral dated 29 October 2016 to Lara Enfeld (p 16 ALAD 1 October 2025) Dr McKinnon noted that the appellant was referred for continuing psychological services and a new Mental Health Plan had been done.

(d) In an entry dated 4 May 2017 (p 17 ALAD 1 October 2025), Dr McKinnon noted that the appellant presented for:

"MHP wanting psychological services; continues to have generalised anxiety with some panic episodes happening twice a week (not full blown as in the past - not hyperventilating). Manages these with breathing techniques; sleeps about 5 hours a night only, mind races a lot, wants to see a female counsellor".

Dr McKinnon noted that on the DASS self-report measure, she scored in the severe range for anxiety (18) and stress (30) and in the mild range for depression.

1. After reviewing the given history and the clinical records, the Appeal Panel agrees with the Medical Assessor's opinion that the appellant was suffering a pre-existing psychiatric condition or more possibly accurately conditions. The appellant had a clear history of anxiety, episodes of depression and chronic panic attacks over many years which the Medical Assessor diagnosed as a pre-existing generalised anxiety disorder with panic attacks. This has been exacerbated by the injury, many of her symptoms are the same as existed periodically for years and contributed to the current whole person impairment.
2. Section 323 of the 1998 Act sets out the criteria for assessing a deduction in relation to a pre-existing impairment as follows:

"(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.

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

1. The Guidelines set out the method for calculating a pre-existing psychiatric impairment as follows:

"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 alculating current impairment level. 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 percentage impairment is calculated using the aggregate score and a 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 1/10th of the assessed WPI."

1. The Guidelines at Cl 1.32 outline the method an assessor is to follow to make adjustment for the effects of treatment as follows:

"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. This paragraph does not apply to the use of analgesics of anti-inflammatory medication for pain relief."

1. In Southwell v Qantas Airways Ltd [2024] NSWSC 497, (Southwell) Wright J commented on the operation of s 323 at [50], stating that it involves three enquiries:
   • firstly, what the extent of the resulting impairment is;
   • secondly, whether the pre-existing condition contributed to the impairment, and
   • thirdly, if it did, what proportion of the impairment was due to the pre-existing condition.
2. This requires a consideration of whether the pre-existing condition contributed causally to the impairment suffered as the result of the workplace injury, as well as whether a portion or part of that level of impairment was due to the pre-existing condition, rather than the workplace injury.
3. Further, Southwell confirms that the above process needs to take into account the evidence and "not by reference to assumption or hypothesis."
4. Campbell J stated at [45] in Ryder v Sundance Bakehouse [2015] NSWSC 526 (Ryder) with respect to a deduction under s 323, "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."
5. The case of Neader v The Trustee for Vestito Unit Trust t/as TS 14 Plus Australia Pty Ltd [2025] NSWSC 866 states as follows: "Section 323 thus does not permit assumptions to be made but requires a determination on the evidence of 'whether any proportion of the permanent impairment present after the second injury was due to the earlier injury'."
6. The Appeal Panel noted that the respondent referred to the decision of Simpson AJ in Marks v Secretary, Department of Communities and Justice (No 2) [2021] NSWSC 616 (Marks No 2) however made no reference to the decision of Matheson v Baptistcare NSW & ACT [2025] NSWSC 213 (Matheson).
7. The Appeal Panel accepts that there is difference in the line of legal authority as to whether the process of the Guidelines 11.10 is inconsistent with s 323 of the 1998 Act. In Marks No 2, Simpson AJ held that to the extent that there is inconsistency between Guideline Cl 11.10 and s 323 of the 1998 Act, s 323 prevails. She found that Guideline Cl 11.10 was inconsistent with s 323 and invalid to the extent that it excludes, in the application of s 323(1) of the 1998 Act to any psychiatric or psychological impairment, consideration of any contribution made to the impairment of a pre-existing but asymptomatic condition.
8. However, Basten AJ in Matheson held that contrary to the decision in Marks No 2 Cl 11.10 of the Guideline is not invalid in cases where the worker had a previous injury which was asymptomatic. Basten JA found that there was no finding by the first Appeal Panel of any level of pre-existing impairment in accordance with the Guidelines and the making of a deduction pursuant to s 323(1) in respect of a pre-existing condition, the existence of which was merely assumed, was an error of law.
9. The Appeal Panel prefers the reasoning set out in Matheson in which Basten AJ addressed the distinctions drawn within the Workers Compensation Acts as to the treatment of psychological and other injuries and included inferences to be drawn from the legislative scheme. Further, the approach in Marks No 2 failed to give proper effect to the statutory provisions relating to the Guidelines.
10. The appellant submits that the Medical Assessor incorrectly applied a deduction under s 323 of the 1998 Act in relation to a pre-existing condition by way of making a deduction for a pre-existing treatment effect. The appellant argues that the deduction pursuant to s 323 based on a pre-existing treatment effect under Cl 1.32 of the Guidelines was incorrectly applied and based on incorrect criteria.
11. The appellant submits that there is nothing in the Guidelines Cl 1.31-1.33 that allows an assessor to decrease the overall impairment assessment based on a pre-existing treatment effect. The appellant argues that the overall purpose of the treatment effect guidelines is to allow the Medical Assessor to account for any greater impairment that the injured worker may have at the time of the assessment, that would otherwise increase their impairment if it was not being managed by long-term ongoing treatment.
12. The Appeal Panel agrees that the Medical Assessor did not make the s 323 deduction as set out in cl 11.10 of the Guidelines nor did she apply a one tenth deduction pursuant to s 323(2) of the 1998 Act on the basis that the extent of the deduction was difficult or costly to determine. The Medical Assessor did not refer to cl 11.10 of the Guidelines and used paragraph 1.32 as a method of assessing impairment pre-injury so that it could be deducted from assessment of WPI under s 323.
13. The respondent notes that the Medical Assessor found that the pre-existing condition was asymptomatic for short period prior to the work injury on account of her maintenance treatment with antidepressants medications. The respondent argues that this is analogous to a 3% WPI adjustment of impairment for the effects of treatment pursuant to paragraph 1.32 of the Guidelines, and therefore the Medical Assessor found the pre-existing impairment to be 3% WPI.
14. However, the Guidelines in cl 1.32 enable a Medical Assessor to "increase the percentage of WPI by 1%, 2% or 3%" 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". There is no provision for the application of this clause to a pre-existing condition as calculation of the pre-existing WPI is not a determination of "permanent impairment" (almost by definition as that pre-existing WPI changes with the subsequent injury and treatment).
15. The Appeal Panel accepts that the Medical Assessor erred in calculating the deduction under s 323 of the 1998 Act in relation to a pre-existing condition by way of making a deduction for a pre-existing treatment effect.
16. The Medical Assessor was satisfied that there was a pre-existing condition but, having found that this condition was "asymptomatic on maintenance treatment" appears to have assumed that there was no impairment and thus made no assessment of the behavioural effects of that condition nor an assessment by reference to Guideline 11.10.
17. In Matheson, Basten AJ described the statutory scheme as requiring a causal connection between a pre-existing condition and the impairment arising from the subject injury. That is, there is to be a deduction where any proportion of the impairment "is due to" any previous condition and the deduction is not contingent upon a finding that the previous injury itself caused an impairment. Accordingly, an asymptomatic injury which contributes to the present impairment must result in a deduction. However, Basten AJ proceeded to draw a distinction between physical injuries and psychological injuries and held that a guideline which states that an asymptomatic psychological condition cannot satisfy the precondition, is not inconsistent with the operation of s 323(1). Adopting that approach, cl 11.10 in the Guidelines, which deals specifically with the calculation of a "pre-existing impairment", in relation to a psychological injury, requires the calculation of a percentage impairment in applying s 323, and makes no provision for treatment effects. The Medical Assessor did not adequately explain why she did not make an assessment and calculation under cl1 1.10 of the Guidelines. If the Medical Assessor accepted that the appellant was asymptomatic, then according to Mattheson no deduction should have been made_._
18. Further, the Appeal Panel accepts that the Medical Assessor did not provide any reasons to explain why she selected 3% for the effects of treatment, rather than 1% or 2%.
19. Having found error, the Appeal Panel must review what s 323 deduction, if any, is to be applied in this matter.
20. The Appeal Panel is satisfied and agrees with the Medical Assessor that the appellant has a pre-existing condition, namely, a generalised anxiety disorder with panic attacks. The Appeal Panel is satisfied that the pre-existing condition, contributed to the impairment assessed for the reasons set out below.
21. The Appeal Panel considered whether the appellant was asymptomatic at the time of the subject injury, that is, on 6 November 2017. Having reviewed the evidence in this matter, the Appeal Panel is satisfied that the appellant was likely to be symptomatic at the time of the subject injury, that is, on 6 November 2017. The history of the appellant's pre-existing condition shows a long term history of symptoms of anxiety since 1999. These symptoms at times have reached the severity of panic attacks. In short, the appellant has been symptomatic for a large part of her adult life. The Appeal Panel accepts that the symptoms appear to wax and wane from time to time with external stressors.
22. The Appeal Panel notes that the appellant has hyperarousal and avoidant symptoms factored into her PIRS rating, which in the view of the Appeal Panel had been contributed to by her pre-existing condition.
23. The Medical Assessor notes that there had been periods where the appellant's symptoms have increased, to the point where she was unable to work for a period of about six months in 2011. She has required periods of treatment with a psychologist and ongoing SSRI antidepressant treatment, initially citalopram and then sertraline, at doses up to 200mg. The clinical records of Wallsend Medical Centre indicate antidepressant Citalopram (ie Cipramil) was commenced on 8 December 1999 and Zoloft (Sertrealine) and Xanax were commenced on 17 March 2025 to manage anxiety symptoms. From these records it appears that the appellant continued use of SSRI antidepressant treatment up to the subject injury. The appellant had extensive psychological therapy and counselling over the years.
24. The Appeal Panel noted that the GP records indicate an attendance by the appellant on 4 May 2017, approximately six months prior to the subject injury, where she requested a referral to a psychologist having presented with continuing generalised anxiety with panic episodes occurring twice a week, and anxious worrying causing her mind to race and insomnia. On the DASS self-report measure, Dr McKinnon noted that the appellant scored in the severe range for anxiety and stress and in the mild range for depression. Clearly, the appellant was symptomatic as at 4 May 2017 and was seeking a referral in order to attend a psychologist for further psychological treatment. Although the Appeal Panel accepts that with such treatment from a psychologist and the continued use of SSRI antidepressant treatment, the appellant's symptoms may have improved, there is an absence of any clinical evidence of a complete remission as at the time of the subject injury. While the appellant reports that in the period prior to the injury, when on maintenance sertraline and with resolution of the workplace stressors, she was symptom-free that is not clinical evidence of remission. Further, the Appeal Panel places little weight on the opinion expressed by the appellant in her statement dated 1 October 2025 as to whether she was symptom free or not, because her opinion is highly subjective and was made nearly eight years after the period immediately prior to the subject injury. Considering the very long history of chronic and pervasive psychiatric symptoms and treatment, the Appeal Panel is of the view that the treatment she has received, including in May 2017, did not result in the appellant being asymptomatic but only lessened the severity of symptoms and enabled her to adopt strategies to cope with symptoms e.g. breathing exercises.
25. Having found that the appellant was symptomatic at the time of the work injury, the Appeal Panel notes that the subject injury occurred more than eight years ago. The Appeal Panel considers that there is insufficient evidence in relation to the appellant's functioning pre-injury to enable a PIRS assessment to be carried out in respect of her pre-injury impairment. The Appeal Panel noted that she worked fulltime but it is not clear what affect her symptoms had on her functioning in the PIRS categories before the subject injury. The Appeal Panel considers that it would be impossible to obtain an accurate history on which a PIRS assessment could be made of the pre-existing condition prior to the subject injury.
26. The Appeal Panel therefore considered it appropriate to make a one tenth deduction pursuant to s 323(2) because it was not possible to make an assessment using Cl 11.10 of the Guidelines and because the precise deduction is difficult to determine. While there is medical evidence of various symptoms and problems pre-injury, there is no real evidence that address the actual level of function in each of the PIRS scales and it is clear that the severity of symptoms varied from time to time. The Appeal Panel, on reviewing the evidence prior to the work injury, does not consider that a 10% deduction is at odds with the evidence.
27. The Appeal Panel notes that the assessment by the Medical Assessor of 1% WPI for effects of treatment was not appealed.
28. The Appeal Panel, therefore, assesses 22% WPI and adds 1% WPI for effects of treatment. The Appeal Panel deducts one tenth pursuant to s 323(2), that is 2.3% WPI, which results in 20.7% which is rounded up to 21% WPI.
29. For these reasons, the Appeal Panel has determined that the MAC issued on 29 October 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 Melissa Barrett 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)