Ferguson v State of New South Wales & Ors

Supreme Court of NSW|2016-12-09|Before: Campbell J

P Perry (Plaintiff) D Baran (First Defendant)

McCabe Partners New South Wales Crown Solicitor's Office File Number(s): 2016/00259202

judgment

The plaintiff, Ms Ferguson, applies under s 69 Supreme Court Act 1970 (NSW) for judicial review of a decision of a medical Appeal Panel convened under s 328 Workplace Injury Management and Workers Compensation Act 1998 (NSW) ('WIM') revoking the prior medical assessment certificate of a medical assessor, which was more favourable to her, and issuing a new medical assessment certificate instead under s 328(5) WIM. Specifically, she seeks an order in the nature of certiorari quashing the legal effect of the new certificate, and an order in the nature of mandamus remitting the matter to the second defendant, the Registrar of the Workers Compensation Commission, to convene a different Appeal Panel to determine the appeal under s 327 WIM according to law.

The medical dispute

Ms Ferguson was a serving police officer who was exposed to psychological trauma in the discharge of her office. There was no dispute that she suffered post-traumatic stress disorder and major depression to which her "employment was a substantial contributing factor". There was no dispute that this psychiatric condition caused permanent impairment. The medical dispute is about the degree of impairment.
In accordance with the provisions of Chapter 7 WIM, the dispute was referred for assessment by an approved medical specialist ('AMS'), Dr Samson Roberts. Following examination of Ms Ferguson and consideration of the other material provided by the parties to the dispute, the AMS issued a medical assessment certificate under s 325 WIM certifying that Ms Ferguson's degree of permanent impairment resulting from her psychiatric injury was 19 per cent.
There were two contentious matters in the AMS's assessment of Ms Ferguson's condition which was made in accordance with the psychiatric impairment rating scale ('PIRS') prescribed by the WorkCover Guides for the Evaluation of Permanent Impairment made under the WIM. Those matters related to the AMS's rating of the categories of social functioning and employability.
Under s 326 WIM, the degree of impairment certified in the medical assessment certificate "is conclusively presumed to be correct … in any proceedings before a court or the [Workers Compensation] Commission". Such an assessment is an appealable matter: 327(2) WIM. The grounds for appeal are limited by s 327(3) WIM.

Medical appeal

The first defendant initiated an appeal by applying to the Registrar of the Commission (the second defendant) under s 327(4) WIM on the grounds that the AMS assessment was made on the basis of incorrect criteria, and the medical assessment certificate contained a demonstrable error. For the purpose of s 327(4), the Registrar was satisfied that "on the face of the application and [the employer's] submissions" at least one of the grounds had been made out. The Registrar convened an Appeal Panel (the third defendant) under s 328(1) WIM constituted by two approved medical specialists and one arbitrator as specified in the subsection.
I interpolate that in accordance with the usual practice in these matters, the second and third defendants have filed submitting appearances.
In exercise of its function under s 328(2), the Appeal Panel upheld the appeal, revoked the AMS's certificate of 17 March 2016, and issued a new certificate assessing the impairment suffered by Ms Ferguson as 9 per cent. This assessment is below the threshold of "greater than 10 per cent" for Ms Ferguson to be entitled to receive compensation for permanent impairment under s 66 Workers Compensation Act 1987 (NSW) ('WCA'). The original assessment made by the AMS cleared the "at least 15 per cent" threshold fixed by s 151H WCA for work injury damages, if Ms Ferguson is otherwise entitled to that relief. The dispute therefore is not an arid one.
The Appeal Panel accepted the employer's arguments about the social functioning category, but rejected its arguments about the employability category. Although it may therefore have been open to find that the AMS's assessment was made on the basis of an incorrect criterion, the Appeal Panel seems to have rested its decision on the ground that the "medical assessment certificate contains a demonstrable error".

The issues for determination and relevant principles

The central issue, of course, is whether the Appeal Panel's decision conforms to law. The Court is not concerned with the merits of Ms Ferguson's claim as it is not empowered to conduct a merits review of the Appeal Panel's decision: Attorney-General (NSW) v Quin (1990) 170 CLR 1; [1990] HCA 21.
The Appeal Panel's function is conferred by s 328(2) WIM which is in the following terms: The appeal is to be by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made. The Workers Compensation Guidelines can provide for the procedure on an appeal. The Appeal Panel's powers are conferred by s 328(5) in the following terms: 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 Inghams Enterprises Pty Ltd v Lakovska [2014] NSWCA 194 at [40], Barrett JA (Gleeson JA agreeing) said: Under s 328(2), a medical Appeal Panel's function is to make a "review of the original medical assessment", being, however, a review that is "limited to the grounds of appeal on which the appeal is made" being grounds formulated and advanced by the party concerned within the limits allowed by s 327(1). Inghams notes that the part of s 328(2) confining a review to the grounds advanced by the appealing party was added by the Workers Compensation Legislation Amendment Act 2010 (NSW) in apparent response to the decision of this court in Siddik v WorkCover Authority of New South Wales [2008] NSWCA 116. (See also: NSW Police Force v Registrar of the Workers Compensation Commission of NSW [2013] NSWSC 1792 per Davies J at [45] - [46]; [52]; and Cullen v Woodbrae Holdings Pty Ltd [2015] NSWSC 1416 per Beech-Jones J at [29]-[38].)
It needs to be borne in mind that these statutory powers, and indeed the statutory powers exercised by an AMS under s 324 WIM, provide for a method of dispute resolution by expert evaluation. The AMS at first instance and the two AMSs on the Appeal Panel are not only entitled, but obliged, to bring their professional expertise to bear in the exercise of their functions: Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [47]: The function of a Medical Panel is to form and to give its own opinion on the medical question referred for its opinion … The function is in every case 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. This statement was made in the context of similar Victorian legislation. It has been applied frequently in New South Wales and may be considered apposite to the functions of an AMS at first instance, and also, with necessary adaptation allowing for the more limited functions exercised on appeal, to the medical members of the Appeal Panel.

Psychiatric Impairment Rating Scale

It is necessary to set out the requirements of the Guides as to the evaluation of permanent impairment resulting from psychiatric injury. They are found in the Psychiatric Impairment Rating Scale (PIRS) which is applicable by virtue of Chapter 11 of the Guides. The requirements were summarised by the Appeal Panel in [22] to [24] of its reasons in the following terms: The Psychiatric Impairment Rating Scale ('PIRS') is established as the relevant rating indicia by virtue of Chapter 11 of the Guides in both the 09 and 16 Guides, which are the same. The PIRS sets out six categories of behaviour to be assessed, each being divided into five classes. Class 1 relates to a situation where there is no psychological deficit, or a minor deficit attributable to the normal variation in the general population. Class 5 pertains to a person who is totally impaired by his injury, and the classes between are in an ascending order of impairment. The assessor is required to classify each category, and apply the resulting scores as set out in Chapter ll. Each class in the six categories has indicia attached, called 'descriptors.' Chapter 11.13 provides that: "Impairment in each area is rated using class descriptors. Classes range from 1 to 5, in accordance with severity. The standard form must be used when scoring the PIRS. Examples of activities are examples only. The assessing Psychiatrist should take account of the person's cultural background. Consider activities that are usual for the person's age, sex and cultural norms." The indicia contained within the PIRS examples in Chapter 11 therefore are not intended to be exclusive, and are subject to the variabilities that accompany a person seeking psychiatric help, such as those matters mentioned - age, sex and cultural norms.
At [29], the Appeal Panel referred to Table 11.4 of the Guide classifying degrees of social functioning, relevantly as follows: "Class 2 Mild impairment: existing relationship strained. Tension and arguments with partner or close family member, loss of some friendships. Class 3 Moderate impairment: previously established relationship severely strained, evidenced by periods of separation or domestic violence. Spouse, relatives or community services looking after children. Class 4 Severe impairment: unable to sustain long term relationships. Pre-existing relationships ended (eg lost partner, close friends). Unable to care for dependents (eg own children, elderly parent)."
The Appeal Panel understood that the employer was challenging the AMS's assessment "on the basis that the AMS had applied incorrect criteria or made a demonstrable error in his allocation of two of the categories under the psychiatric impairment rating scale, 'Social Functioning' and 'Employability": Appeal Panel reasons at [27].

The decision of the AMS

The AMS had accepted the account given by Ms Ferguson who he had interviewed for the purpose of his psychiatric assessment. Ms Ferguson had previously been in a bona fide domestic relationship with another young woman. To summarise his findings in my own words, the relationship was a life partnership having the usual incidences of such a relationship including sexual intimacy. The AMS accepted that the intimate relationship had failed during the illness, that there had been a period of separation for a duration of six months, but that the former partners had resumed living under the same roof "because [Ms Ferguson] was not coping on her own". During that time Ms Ferguson had suffered symptoms of agoraphobia. On the AMS's findings, the former partner moving back in did not signify a resumption of the previous relationship. Rather their relationship was now one of platonic friendship with her former partner providing support. She had a level of difficulty with other friendships and some family relationships.
To make good its arguments, the employer submitted that because: 1. Ms Ferguson continued to have relationships with her family; 2. There had been a "resumption of the relationship" with the other young woman; 3. The findings of the AMS were to the effect "that they were living together without any tension, and that the friendship was continuing"; 4. "There was no evidence of any periods of separation or domestic violence which would indicate that the relationship had been severely strained"; an assessment of a Class 2 impairment for social functioning was more appropriate than a Class 3 in the circumstances.
Ms Ferguson submitted that the findings of the AMS were justified because the history he accepted demonstrated that "the relationship was severely strained". The resumption of a relationship between the two did not indicate otherwise. The evidence indicated that the relationship had changed from its earlier intimate nature to one of a supportive friendship.

The Appeal Panel's decision

The Appeal Panel said that because the Registrar was satisfied under s 327(3) WIM that at least one of the grounds had been made out, it would conduct a review of the material before it to reach its own conclusions concerning the correct assessment: Appeal Panel reasons at [21]. I interpolate this appears to be a legally incorrect approach.
First, it is well established that the Registrar's role under s 327(4) WIM is that of a gatekeeper. The Registrar's function is limited to satisfaction "on the face of" the material provided that at least one ground "has been made out". This is in effect a leave provision and the appeal "is not to proceed" absent the Registrar's satisfaction. The language of s 324(3) indicates that it is the Registrar's function to make what I would call a decision at "first blush". This is what is meant by the "on the face of" the material provided. It is not the Registrar's function to decide whether the ground of appeal has actually been made good. Section 328(2) WIM confers that function on the Appeal Panel: "[t]he appeal is to be by way of review of the original medical assessment, but the review is limited to the grounds on which the appeal was made".
I repeat, it is the Appeal Panel, not the Registrar, which has the function of deciding whether the grounds of appeal have been made good. The Appeal Panel's contrary approach involved jurisdictional error: Cullen at [59]. However, it is clear that notwithstanding this mistaken interpretation of its governing statute, the Appeal Panel purported to decide that the employer had demonstrated error in accordance with s 328(2) WIM: see Appeal Panel Decision [41] - [42]; cf Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 at 353 per Mason CJ.
By reference to NSW Police Force v Daniel Wark [2012] NSWWCCMA 36, the Appeal Panel directed itself that in questions of classification under the PIRS: "… the pre-eminence of the clinical observations cannot be underrated. The judgment as to the significance or otherwise of the matters raised in the consultation is very much a matter for assessment by the clinician with the responsibility of conducting his/her enquiries with the applicant face to face".
The Appeal Panel accepted that intervention was only justified: if the categorisation was glaringly improbable; if it could be demonstrated that the AMS was unaware of significant factual matters; if a clear misunderstanding could be demonstrated; or if an unsupportable reasoning process could be made out. I understood that all of these matters were regarded by the Appeal Panel as interpretations of the statutory grounds of applying incorrect criteria or demonstrable error. One takes from this that the Appeal Panel understood that more than a mere difference of opinion on a subject about which reasonable minds may differ is required to establish error in the statutory sense.
The Appeal Panel also, with respect, correctly recorded that in accordance with Chapter 11.12 of the Guides "the assessment is to be made upon the behavioural consequences of psychiatric disorder, and that each category within the PIRS evaluates a particular area of functional impairment": Appeal Panel reasons at [37]. The descriptors, or examples, describing each class of impairment in the various categories are "examples only": see Jenkins v Ambulance Service of New South Wales [2015] NSWSC 633. The Appeal Panel said "they provide a guide which can be consulted as a general indicator of the level of behaviour that might generally be expected": Appeal Panel reasons at [37].
The salient aspect of the Appeal Panel's reasoning and conclusions appear at [38] to [42] and are as follows: The AMS has relied upon what he described as the failure of the relationship with [her sometime partner] as having the degree of severity necessary to place the claimant's functional impairment in class 3. That is to say, the same general area as someone whose condition has involved more than one period of separation, or where domestic violence has occurred. The other matters to which the AMS referred - the maintenance of friendships and relationships with family, and the loss of some friendships - are more compatible with a class 2 value. The relationship between [her sometime partner] and the claimant cannot in our view be properly described as one which has failed. In her statement of 18 June 2015 [her sometime partner] stated that in the last year of her relationship with the claimant, the relationship was "on again/off again". [Her sometime partner] said that one of the main reasons for the breakdown of the relationship was the claimant's frequent outbursts of anger. She said that she and the claimant stopped living together in March 2015. The evidence is that subsequently cohabitation resumed in August 2015 and, whilst the nature of the relationship is a private matter between them, it cannot be said on the evidence before the AMS that that previously established relationship remains "severely strained" which is the term used in the descriptor for class 3. There has certainly been no suggestion at any stage that domestic violence has been a part of that relationship. The relationship, it seems to us, exists in that the two are now back living together, notwithstanding the difference in their hours. The evidence does not sustain a finding that the relationship is strained, rather that its nature may have altered. Further the AMS noted that the applicant goes out in the company of others on a weekly basis and, whilst she has continued to see some of her friends (Justine and Rebecca), she has also scared a lot of friends off. The fact is also more consistent with a class 2 value than a class 3. The facts that the AMS has based his assessment on are more closely allied to a mild rather than a moderate level of social functioning. The AMS appears to have based his assessment upon the fact that the claimant's intimate relationship failed. The assessment is as to the behavioural consequences of the psychiatric disorder as to the claimant's social functioning. Whether her relationship with [her sometime partner] is intimate or not, it remains an existing relationship and the evidence is that it is not severely strained. Whilst the descriptors are not of themselves exclusive in this area, they are examples, and the assessing AMS has accordingly a wide discretion as to the appropriate value to apply to such a category. However, for the reasons given we are satisfied that his finding that a class 3 assessment of social functioning is glaringly improbable. There is no evidence which indicates a degree of seriousness upon which a moderate impairment depends.
It can be seen from paragraph [39] of its reasons that the Appeal Panel accepted a period of separation had occurred between March and August 2015. However, with respect, the Appeal Panel seems to have declined to inquire into the critical question that impressed the AMS which related to the markedly changed nature of the previous relationship after August 2015, that is to say, the change from a life partnership involving sexual intimacy to a more platonic friendship. The members of the Appeal Panel glossed over this by declining to inquire into that question on the basis that "the nature of the relationship was a private matter between them". With respect, that sensitivity was misplaced. It was necessary for the Appeal Panel to deal with the substantive question of whether there had been that marked change in the relationship following the separation. Only after making a full assessment of all aspects of the relationship before and after the seperation could a decision be made about whether it was "severely strained". Doubtless the Appeal Panel may have been at some disadvantage given that it did not have the benefit of the "face to face" assessment enjoyed by the AMS.
I would not regard it as straining the language to assess a previously subsisting whole of life partnership involving sexual intimacy as being "severely strained", or indeed "lost" (see Class 4), if a psychiatric injury resulted in breakdown of the relationship leading to one extended period of separation, followed by a new arrangement whereby the home was shared on the basis of a platonic friendship for the provision of support. Indeed, those facts would be capable of supporting an assessment that the previous relationship had been lost, pushing the matter into a Class 4: see Table 11.4, Chapter 11 of the Guides. I do not say that the facts found by the AMS "necessarily" put the matter into Class 3 or 4, but those facts left it open for such an evaluation to be made. But it is not correct to say, as the Appeal Panel held, that on those facts "it cannot be said on the evidence that the relationship remains 'severely strained'" (my emphasis).
The last sentence of [39] rather begs the question. The Appeal Panel said: The evidence does not sustain a finding that the relationship is strained, rather that its nature may have altered. (My emphasis) A material alteration in the nature of a relationship may evince strain, even severe strain, and to this extent the Appeal Panel asked itself the wrong question.
If one concentrates upon the conclusions expressed at [42], it is clear that the Appeal Panel regarded the case as one of demonstrable error in the certificate because on the clinical findings made by the AMS, the Appeal Panel regarded the case as necessarily falling below Class 3. This is evident from the implicit finding that the assessment of the AMS is plainly unreasonable in as much as it necessarily fell outside the range of his "wide discretion"; that his finding was "glaringly improbable"; and, that "there is no evidence which indicates a degree of seriousness upon which a moderate impairment depends" (my emphasis).
It must be accepted that even in its present more limited form, s 328 WIM confers a broad function upon the Appeal Panel. It is trite to say the Appeal Panel is essentially an expert panel whose function, subject to finding error, includes review of the facts. However, in the present case, the Appeal Panel found that the AMS fell into legal error because the Appeal Panel held facts as he found them to be necessarily fell outside and below Class 3.
The Appeal panel also decided there was no material (no evidence) before the AMS which could support a Class 3 assessment in relation to social functioning. This is clearly a question of law: see Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty (2010) 241 CLR 390; [2010] HCA 32 at 418 [90] - [91]. At 418 [91] the plurality said: A tribunal that decides a question of fact when there is "no evidence" in support of the finding makes an error of law. What amounts to material that could support a factual finding is ultimately a question for judicial decision. It is a question of law. [Original emphasis, footnote omitted]
In my judgment the material before the AMS could support a Class 3 rating or assessment for impairment of social functioning; that is to say, a moderate impairment of social functioning. And the Appeal Panel's decision that it could not is an error of law. Given that the Appeal Panel's reasons form part of the record (s 69(4) Supreme Court Act 1970 (NSW)), the error is an error of law on the face of the record. Had that error of law not been made, the Appeal Panel's decision might have been different by reason of the possibility that assessing the matter according to law it may then have confirmed the AMS's assessment.
I am satisfied that the plaintiff has made out a case for an order in the nature of certiorari. Given that the Appeal Panel has taken the view, erroneously in my opinion, that the facts could not possibly fall within Class 3, I think it appropriate that the matter on remitter be referred to a differently constituted Appeal Panel.
My orders are: 1. Set aside the Appeal Panel Medical Assessment Certificate in matter number M1-004465/15 dated 5 August 2016; 2. Remit the matter to the second defendant for determination of the first defendant's appeal by a differently constituted Appeal Panel chosen under s 328(1) Workplace Injury Management and Workers Compensation Act 1998 (NSW); 3. The first defendant to pay the plaintiff's costs.

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: 04 July 2017

Workers Compensation Legislation Amendment Act 2010(NSW)

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