Galluzzo v Little

Court of Appeal (NSW)|2013-03-18|Before: Barrett JA, Ward JA, Schmidt J, Commission J

ation Commission - Third Respondent Representation: C D Jackson - Appellants/Cross-Respondents D J Hooke SC/L G Morgan - First Respondent-Cross-Appellant Submitting Appearances - Second and Third Respondents Leigh Virtue & Associates - Appellants/Cross-Respondents Beilby Poulden Costello - First Respondent-Cross-Appellant I V Knight, Crown Solicitor - Second and Third Respondents File Number(s): 2012/191906 Decision under appeal Citation: TJ Galluzzo and SJ Galluzzo t/as Riverwood Chemworld Chemist v Dianne Little [2011] NSWSC 1581 TJ Galluzzo and SJ Galluzzo t/as Riverwood Chemworld Chemist v Dianne Little (No 2) [2012] NSWSC 324 Before: Schmidt J File Number(s): 2011/84012

Judgment 1BARRETT JA: The Court heard on 18 March 2013 an application for leave to appeal and, concurrently, the appeal itself and a cross-appeal arising from a decision of a judge of the Common Law Division (Schmidt J) upon an application for declaratory and prerogative relief in respect of a decision of a Medical Appeal Panel constituted under the Workplace Injury Management and Workers Compensation Act 1998. 2The primary judge delivered reasons on 19 December 2011 ([2011] NSWSC 1581) and 5 April 2012 ([2012] NSWSC 324). Except as otherwise stated, references to her Honour's reasons are to those of 19 December 2011. 3It is agreed by the parties that, for the purposes of the appeal and cross-appeal, it is legislation in force in January 2011 that must be considered. In the discussion that follows, references to the "WC Act" are references to the Workers Compensation Act 1987 and references to the "WIM Act" are references to the Workplace Injury Management and Workers Compensation Act 1998 as each stood in January 2011. 4The primary judge found that the Medical Appeal Panel's decision involved error of law on the face of the record and made a declaration accordingly but made no further or consequential order, except an order as to costs. 5The proceedings concerned a workplace injury and liability of employers to their employee for workers compensation. In the Common Law Division, the employers (partners in a retail pharmacy business) were the plaintiffs and the employee was the defendant. In this Court, the employee is the appellant and cross-respondent, while the employers are the respondents and cross-appellants. It is convenient, I think, to refer to them simply as the "employers" and the "employee". 6The grounds of appeal on each side raise questions of construction of the relevant legislation and statutory instruments, questions of procedural fairness on the part of the Medical Appeal Panel and questions about the exercise of the Supreme Court's discretion where grounds for a grant of prerogative relief are established.

Events in outline 7The employee worked at the employers' retail pharmacy premises and was injured when she fell at work. She suffered injury to both knees and to her lumbar spine. The other relevant facts are recorded at [1] to [4] of the primary judge's reasons: "1 The first defendant, Ms Dianne Little, was injured at work in March 2007. She later made a workers compensation claim and was eventually assessed to have a permanent impairment to her right knee and her spine, as a result of that injury. She had also injured her right knee, but the assessment of that injury was deferred until it stabilised. The plaintiff, Ms Little's employer, challenged the assessment. The challenge was considered and dismissed by a Medical Appeal Panel on 21 January 2011. The employer now challenges the Medical Appeal Panel's decision. The appeal raises questions of the construction of the Workplace Injury Management and Workers Compensation Act 1998 ('the Act') and the WorkCover Guides for the Evaluation of Permanent Impairment ('the Guides') and whether the Medical Appeal Panel denied the employer a fair hearing. 2 The Medical Appeal Panel's decision was made after a Workers Compensation Commission Arbitrator decided that the injury to Ms Little's knees was a substantial contributing factor to her spinal condition. There was then a dispute between the parties about the degree of Ms Little's resulting impairment. That was only partially resolved by the decision made by the Approved Medical Specialist, Dr Sikander Khan. It was his decision which became the subject of the employer's appeal to the Medical Appeal Panel. 3 By summons filed in March 2011, the employer asked for a declaration that the Medical Appeal Panel's decision involved error on the face of the record and jurisdictional error and an order quashing the decision. The grounds relied on included that the Medical Appeal Panel was in error in refusing an oral hearing; in not properly considering the grounds of the appeal, in circumstances where the Registrar was satisfied that a particular ground had been made out; in having regard to irrelevant considerations; in going beyond matters available to be considered on appeal; in considering the requirement for a deduction for pre-existing abnormality; and in failing to consider or apply applicable provisions of the Act and the Guides. 4 The orders sought were opposed by Ms Little. The hearing was adjourned to give the WorkCover Authority of New South Wales ('WorkCover') an opportunity to make submissions to the Court about the validity of cl 1.21 of the Guides. That issue arose when the employer argued that it was inconsistant with s 322 of the Act. WorkCover took up that opportunity, supporting the submissions made by Ms Little about the construction of the Act and the Guides."

The medical assessment and the appeal against it 8The task of an approved medical specialist with respect to a medical assessment certificate is prescribed by s 325 of the WIM Act to which more detailed reference will be made presently. A right of appeal to a Medical Appeal Panel against a medical assessment is created by s 327. Only certain grounds may be relied upon in initiating an appeal. An appeal is made by application to the Registrar and cannot proceed unless the Registrar is satisfied that, on the face of the application and any submissions made to the Registrar, at least one of the grounds for appeal that the section allows has been made out. 9In pursuing their appeal under s 327, the employers relied on several grounds. The Registrar (or, as it was in this case, a delegate of the Registrar) performed the initial screening function and decided that appeal was warranted by the ground based on the contention that all impairments should be determined together. 10The employers, in putting forward their appeal under s 327, made short written submissions and sought an opportunity to make oral submissions to the Medical Appeal Panel. The employers' reasons for that request were described by the primary judge at [9]: "The employer supported the appeal by brief written submissions, seeking an opportunity to present oral submissions to the Medical Appeal Panel at a hearing. The reasons given for that application were the grounds of the appeal; the nature of the appeal; and the numerous matters which it was said needed to be addressed orally. It was submitted that the Certificate went beyond issues which an Approved Medical Specialist may determine; that Dr Khan had failed to take into account relevant considerations; that he had taken into account irrelevant considerations; that there was no evidence to support the assessment or there was insufficient evidence; and that the assessment was inconsistent with the evidence. A denial of procedural fairness was also raised. The basis for these complaints was not outlined in detail in the written submissions." 11The employee's position in relation to the appeal was that the matter should be decided on the basis of the parties' written material. The main points she made were that the employer's brief written submissions did not provide sufficient particulars to permit meaningful response; that there was no reason why impairment in respect of the two of the three injuries should not be determined at once, with the third left for future assessment; that it was unfair that she receive no permanent impairment compensation at all until the third condition had stabilised; and that the employer had not pointed to any statutory provision or other matter that prevented the assessment of impairment of the two conditions that had stabilised. Identified here is what was to become a central issue. The opinion of the medical specialist was that, at the time of his examination, the injuries to the employee's right knee and lumbar spine had reached maximum medical improvement but the injury to the left knee had not. 12The employers' only response to this was a letter noting their request for a hearing. 13In consequence of the decision of the Registrar's delegate, the appeal was placed before the Medical Appeal Panel which proceeded to consider it "on the papers" (in the form of the employers' application and the employee's response) and without any provision for further submissions being made, whether orally or in writing. On the matter of the employer's request for a hearing, the Medical Appeal Panel said: "The Appellant has sought an Assessment Hearing saying that it proposes to elaborate on the claimed errors in the Medical Assessment Certificate. No explanation is given why the written submissions require further elaboration. It is not even claimed that the written submissions are incomplete." 14The Medical Appeal Panel then referred to a number of Supreme Court decisions in support of the proposition that it is not under any duty to conduct a hearing. Its conclusion was then stated: "Having considered the evidence and the submissions the Panel is satisfied the matter can be properly determined without an Assessment Hearing." 15Having formed that view, however, the Medical Appeal Panel later said: "The Panel considers that the submissions made by the Appellant are not of an acceptable standard. They contained nothing but vague unspecified assertions without reference to the evidence. The Panel is of the view that such submissions are unacceptable. The Appellant is well aware that medical appeal matters are routinely determined on the papers and that accordingly written submissions must include all matters which are relevant to the deliberations of the Panel. If there is evidence or authority to support any submission then it must be referred to in the submission. Vague assertions that are unsupported by evidence and in some instances simply wrong are not acceptable." 16The Medical Appeal Panel did not call for further submissions from the employer. It proceeded to determine that matter on the written material before it, unsatisfactory though the submissions of the appellant employers were considered to be. The Medical Appeal Panel's decision was, in essence, that the lumbar spine and right knee had reached maximum medical improvement and that the left knee had not; but that, despite the employers' submissions to the contrary, there was no need to await a settled outcome in relation to the latter. The Medical Appeal Panel said: "There is no reason why a worker cannot be paid compensation in respect of impairments that have stabilized and at a later time be paid additional compensation for other impairments which have not been stabilized. As the Respondent points out the combining tables are available to assess the total impairment when the additional impairments have stabilized. There is no reasons why an injured worker should be kept out of his entitlement to compensation for body parts that have stabilized. This is particularly so when such delay cannot be compensated with an award of interest."

The decision of the primary judge 17The questions before the primary judge upon the application for declaratory and prerogative relief in relation to the Medical Appeal Panel's decision were: (a) whether, as a matter of statutory construction, it was permissible for a medical assessment to be underetaken and concluded before permanent impairment from all injuries suffered had stabilised; (b) whether the Medical Appeal Panel had failed to give reasons for its decision that the course in (a) was legally permissible and had thereby failed to accord the employers natural justice; (c) whether, in dealing with the appeal on the papers and not conducting a hearing as the employers requested, the Medical Appeal Panel had denied procedural fairness and therefore natural justice; and (d) whether, in failing to give the employers a specific opportunity to make further submissions after forming the view that their original submissions were "not of an acceptable standard", the Medical Appeal Panel had denied procedural fairness and therefore natural justice. 18Her Honour answered question (a) in the affirmative, as follows (at [90]): "In my view, s 322 permits assessment of a worker who has been permanently impaired as the result of injury resulting from an incident, even though not all of the injuries suffered are then capable of being assessed. Once any other injury is stabilised, the resulting impairment must then be 'assessed together' with any other impairment resulting from injures which earlier stabilised. That is done by repeated application of the Combined Values Charts. Thereby, the effect of any particular injury is assessed in combination with all other assessments undertaken already, as the section requires." 19The judge also gave an affirmative answer to question (b), saying (at [39]): "The conclusion reached by the Medical Appeal Panel that there is 'no reason why a worker cannot be paid compensation in respect of impairments that have stabilised and at a later time be paid additional compensation for other impairments which have not been stabilised' was not explained. There was no reference made to any aspect of the statutory scheme on which that conclusion rested. The inadequacy of the submissions which the parties had addressed to the construction point, did not obviate the need for the Medical Appeal Panel to give reasons for its conclusion on that point." 20Question (c) was answered in the negative. The primary judge said (at [34]) that the employers knew that it was plainly "on the cards" that the employer's application for an oral hearing might be refused (that being the course the employee urged) and that they should have taken the opportunity that they plainly had to advance submissions in response to those advanced against them by the emploree. Having failed to do so,they could not complain about that lost opportunity. 21Question (d) was answered in the affirmative. The judge said (at [35]): "[I]n the circumstances, given the Medical Appeal Panel's views as to the inadequacy of the submissions before it on a matter which it had to determine, given the Registrar's delegate's decision, it was plainly obliged to seek clarification from the parties as to their cases on that issue." 22And then, at [37]-[38]: "[I]f the Appeal Panel determined to proceed without an oral hearing, at the least it ought to have called for submissions from them, on the views which the Registrar's delegate had expressed, before coming to a conclusion on the construction point which had arisen for its determination. By failing to take that course, the parties were not given an opportunity to be heard on a matter which then fell to the Appeal Panel to decide. The result was a denial of procedural fairness, the parties not having been heard on the point." 23Although the judge was of the opinion that it was permissible for the assessment of impairments to proceed in stages (as contended by the defendant employee), she decided that the errors with repect to denial of an opportunity for the employers to make further submissions to the Medical Appeal Panel and failure to give reasons for the decision on statutory construction so affected the Medical Appeal Panel's decision that the correct outcome was, as stated at [97], that: "[T]he appeal must be upheld, the decision quashed and the matter referred back to the Medical Appeal Panel" 24Her Honour added (at [98]): "The usual order is that costs should follow the event. The parties may approach if they wish to be heard on costs. Otherwise they should file agreed minutes of the orders to be made." 25The decision and reasons were published on 19 December 2011. There was no agreement on the orders to be made to give effect to the decision or with respect to costs. Submissions on those matters were made on 15 March 2012 and further reasons were published on 5 April 2012, at which time orders were made. It was at that point that the judge made the bare declaration (see [4] above) and abandoned the foreshadowed intention of quashing the Medical Appeal Panel's decision and remitting the matter for redetermination. The basis for that change was explained at [16] and [17] of the April 2012 reasons: "Given the conclusions reached as to the proper construction of the Act, the result is that the Medical Appeal Panel has already acted on a basis which accorded with that construction. The position of the defendant's left knee does not seem to have stabilised even yet. It has not yet been assessed by a medical assessor. In those circumstances, it is unlikely that any different outcome could result from the matter being referred back to the Medical Appeal Panel. In those circumstances there does not seem to be any real utility in referring the matter back to the Panel. It is a costly exercise which ought not to be required, unless that course is unavoidable. That depends on whether, in this statutory scheme, the failure to give reasons amounted to jurisdictional error (see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [34]-[40]). In my view it did not, having in mind this statutory scheme and the nature of the decision in question. The Panel's errors were within jurisdiction, not jurisdictional." 26The matter of costs was also dealt with in the April 2012 reasons. The employee's position was that she should be awarded costs and that those costs should be assessed on the indemnity basis. In the result, the judge ordered that the employers pay 70% of the employee's costs and that costs be assessed on the ordinary basis.

Grounds appeal and cross-appeal 27The case that the employers advance on appeal is based on the following contentions: (1) The judge erred in finding that the legislation permitted an approved medical specialist or a Medical Appeal Panel to issue a certificate of assessment before all impairments suffered as a result an injury were fully ascertainable. (2) Having found that the Medical Appeal Panel failed to give adequate reasons for its decision on a point of statutory construction, the judge should have quashed the Medical Appeal Panel's decision and remitted the matter for redetermination. The conclusion that it was unlikely that any different result would result upon redetermination was insufficient to justify departure from that course, the correct question being whether or not it could be said that no different result could ensue. (3) The judge erred in finding that there was no denial of procedural fairness when the Medical Appeal Panel declined to grant an oral hearing. 28Further contentions are advanced by the employee as cross-appellant: (4) The judge erred in holding that the Medical Appeal Panel was required to call for further submissions from the employer. (5) The judge erred in not awarding the employee the whole of her costs assessed on the indemnity basis. 29Leaving the matter of costs to one side, there are thus two general matters for consideration by this Court, namely, the correct construction of the statutory provisions concerning assessment of impairment and the content of the duty of procedural fairness to which a Medical Appeal Panel is subject. 30The question of statutory construction raises issues of general importance warranting a grant of leave to appeal. I begin with that question.

The statutory provisions and the Workcover Guidelines 31The WC Act provides for several kinds of compensation for injured employees. In this case, the employee was in receipt of weekly compensation. The appeal relates to another element, that is, lump sum compensation for permanent impairment. Section 66 provides that a worker who receives an injury that results in permanent impairment is entitled to compensation as provided by that section; and that such compensation is in addition to any other compensation under the Act. The amount of compensation for permanent impairment differs according to the degree of permanent impairment expressed in percentage terms. 32Section 65(1) of the WC Act directs that the degree of permanent impairment that results from an injury is to be assessed as provided by s 65 itself and Part 7 of Chapter 7 of the WIM Act. Section 65(3) makes it clear that the matter for determination is "the degree of permanent impairment of an injured worker". 33Section 322(1) of the WIM Act (which is within Part 7 of Chapter 7) requires that "the degree of permanent impairment of an injured worker" be assessed by an approved medical specialist in accordance with the WorkCover Guidelines. Section 2A of the WC Act says that that Act is to be construed with, and as if it formed part of, the WIM Act; and that, if there is any inconsistency between the two, the WIM Act prevails to the extent of the inconsistency. The WorkCover Guidelines are issued by the WorkCover Authority under the authority of s 376 of the WIM Act. 34According to their paragraph 1.4, the WorkCover Guidelines "are to be used whenever there is a need to establish the level of permanent impairment that results from a work-related injury or disease". Paragraph 1.5 states that assessing permanent impairment involves "clinical assessment on the day of assessment and determining" several matters, including "whether the impairment has reached Maximum Medical Improvement (MMI)", "whether the resultant impairment is permanent" and "the degree of permanent impairment that results from the injury". 35There are several provisions dealing with cases of multiple consequences of one incident. The first is s 65(2) of the WC Act which states: "If a worker receives more than one injury arising out of the same incident, those injuries are together to be treated as one injury for the purposes of this Division." 36Second, s 322(2) of the WIM Act provides: "Impairments that result from the same injury are to be assessed together to assess the degree of permanent impairment of the injured worker." 37Third, s 322(3) provides: "Impairments that result from more than one injury arising out of the same incident are to be assessed together to assess the degree of permanent impairment of the injured worker." 38The provisions just quoted, read as a whole (and together with s 322(1) of the WIM Act), indicate three things: first, that if a worker suffers several "injuries" arising out of a single "incident", those injuries are to be treated as a single injury and the impairments resulting from that composite single injury are to be "assessed together"; second, that, even if the several injuries arising out of a single incident are not to be treated as a single injury, the impairments resulting from those injuries are to be "assessed together"; and, third, the object of the process of assessment as a whole is to quantify is "the degree of permanent impairment of an injured worker". 39The aim, therefore, is to address the state of "permanent impairment" of a particular person produced by a single incident, with all injuries arising out of the incident being treated as a single injury and all resultant impairments being "assessed together", so as to avoid the kind of situation illustrated by Canute v Comcare [2006] HCA 47; (2006) 226 CLR 535 (a case involving the Commonwealth workers compensation regime) where each "injury" was dealt with in its own right and without reference to the others even though all arose from the one incident. 40Some aspects of the New South Wales statutory scheme were considered by the Workers Compensation Commission (Roche DP) in Department of Juvenile Justice v Edmed [2008] NSWWCCPD 6 at [26]: "That the term 'injury' can have two different meanings is acknowledged in s 322(3) of the 1998 Act where reference is made to 'Impairments that result from more than one injury arising out of the same incident...' This reference to 'injury' can only mean the 'pathology' that has resulted from the relevant work 'incident' or injurious event. For example, if a worker falls and suffers a broken leg and separate and distinct nerve damage in the arm, he or she has suffered more than one 'injury' (an injured leg and an injured arm) within the terms of s 322(3) resulting from the one 'incident'. In other words, he or she has suffered more than one pathology ('injury') as a result of the one incident or injurious event. Those "injuries" are to be assessed together. This interpretation is consistent with s 65(2) of the 1987 Act and is uncontroversial." 41This, in my respectful opinion, is an accurate summary, subject to one modification. The provisions envisage that an "injury" (or several "injuries") will "arise from" an "incident" and that one or more "impairments" will "result from" the "injury" (or "injuries"); and that it is "impairment" or "impairments" that must be assessed. The penultimate sentence in the quoted extract should therefore read: "The impairments resulting from those 'injuries' are to be assessed together." 42There are also provisions about postponement of evaluation until consequences are clear. Thus, the WorkCover Guidelines state, in paragraph 1.21: "Assessments are only to be conducted when the medical assessor considers that the degree of permanent impairment of the injured worker is fully ascertainable. The permanent impairment will be fully ascertainable where the medical assessor considers that the person has attained maximum medical improvement. This is considered to occur when the worker's condition has been medically stable for the previous three months and is unlikely to change by more than 3%WPI in the ensuing 12 months with or without further medical treatment (ie further recovery or deterioration is not anticipated)." 43In addition, s 322(4) of the WIM Act provides: "An approved medical specialist may decline to make an assessment of the degree of permanent impairment of an injured worker until the approved medical specialist is satisfied that the impairment is permanent and that the degree of permanent impairment is fully ascertainable. Proceedings before a court or the Commission may be adjourned until the assessment is made."

AMA5 and the Combined Values Chart 44The WorkCover Guidelines are based on the American Medical Association's Guides to the Evaluation of Permanent Impairment, fifth edition ("AMA5"). Unless there is some inconsistency with the WorkCover Guidelines themselves, AMA5 is to be used in performing tasks with which the WorkCover Guidelines deal. 45Under AMA5, multiple impairments resulting from an injury or injuries arising out of a single event are combined to determine the degree of permanent impairment of an injured worker. For this purpose, AMA5 uses the "Combined Values Chart" which it describes as follows: "The Combined Values Chart (p. 604) was designed to enable the physician to account for the effects of multiple impairments with a summary value. A standard formula was used to ensure that regardless of the number of impairments, the summary value would not exceed 100% of the whole person. According to the formula listed in the combined values chart, multiple impairments are combined so that the whole person impairment value is equal to or less than the sum of all the individual impairment values." 46By means of the Combined Values Chart, multiple impairments are combined into a summary value, so that the whole person impairment is equal to or less than the sum of all the individual impairments. The formula reflected in the chart is: Combined value of A and B = [A + B (1 - A/100)] rounded to nearest integer, where A and B are the impairment ratings to be combined. 47The process may be illustrated by an example. Assume a case in which there are three impairments, one with a rating of 60%, a second with a rating of 30% and a third with a rating of 10%. When regard is had to the first impairment, an impact of 60% is seen, leaving 40% to be apportioned between the two remaining impairments. When regard is then had to the second impairment, the impact is 30% of the residual 40%, that is, 12%; and that 12% is added to the initial 60% to produce a progressive total of 72% total impairment. When regard is finally had to the third impairment (being 10%), one takes 10% of the 28% remaining after allowing for the progressive total of 72%, that is, 2.8%; and that 2.8% is added to the previous total of 72% to produce a final percentage of 74.8% (rounded to 75%) total impairment. 48AMA5 contemplates that the several impairments will be addressed in descending order of individual degree. But it makes no difference if the impairments are addressed in reverse order. If the 10% impairment is dealt with first, the result at the first stage is 10%, with 90% remaining. If regard is then had to the 30% item, the impact is 30% of 90%, that is, 27% which, when added to the initial 10%, produces a progressive total of 37% and leaves a residue of 63%. When, at the final stage, regard is had to the 60% impairment, the impact is 60% of 63%, that is, 37.8% and that, when added to the previous total of 37%, produces the same final percentage of 74.8% (rounded to 75%) total impairment. 49There are two particularly significant features of this system. First, it allows the combined effect of several impairments to be reflected in mathematical terms on a basis that recognises the composite effects, on a "whole person" basis, of a single incident. Second, if the several impairments are addressed successively, the applicable percentage can never decrease; and the result is the same regardless of the order in which the impairments are addressed. The percentage resulting from the most recent application of the formula will always be at least equal to that which was produced by the immediately preceding application.

The circumstances of this case 50Debate in this case focused on the word "together" in ss 322(2) and 322(3) of the WIM Act. It is accepted on both sides that the employee sustained several injuries "arising out of the same incident", being the fall she suffered at work. That fall produced injury to the right knee, injury to the left knee and injury to the lumbar spine. The question is whether the requirement that the impairments resulting from those injuries (or any deemed single injury to which s 65(2) of the WC Act directs attention) be "assessed together" means that there may be no assessment of any of them unless and until each has reached an appropriate state of stability; or whether, by contrast, the statute merely directs that each is to be assessed in the light of and having regard to each of the others so that none becomes the subject of individual assessment divorced from those others in the same way as in Canute v Comcare (above). 51The legislation makes no attempt to define "permanent impairment", as it applies to "an injured worker". The matter is left to medical opinion formed by reference to the circumstances of the particular case. This is emphasised by the definition of "medical dispute" in s 319 of the WIM Act. The defined expression includes "the degree of permanent impairment of the worker as a result of an injury", "whether impairment is permanent" and "whether the degree of permanent impairment of the injured worker is fully ascertainable", thus indicating the evaluative nature of the concept of "permanent impairment" and its "degree". This is reinforced by s 326 which says that an assessment certified in a medical assessment certificate pursuant to a medical assessment under Part 7 is conclusively presumed to be correct as to the degree of permanent impairment of a worker as a result of an injury. 52Given its nature, the necessary evaluation must proceed by two steps. The initial question is whether there is impairment of the injured worker that is permanent. The second question is one of quantification: what is the "degree" of the permanent impairment of the injured worker? The general expectation must therefore be that an assessment will be completed only when the medical condition has reached a point of stability or predictable final outcome that allows both the necessary judgments to be made. And it obviously may happen that it is possible to say that there is permanent impairment before it is possible to form an opinion as to the degree of that permanent impairment. 53What, then, are the import and effect of s 322(4) which, in terms, appears to create a discretion? Does it mean merely that an approved medical specialist is at liberty to defer making an assessment of the degree of permanent impairment of a person until satisfied as to the matters stated; or is the message in truth that there is an obligation to do so, with "may", in the particular context, meaning "must". 54Mr Jackson of counsel, who appeared for the employers, argued for the latter proposition. In his submission, s 322(4) operates, in a case such as the present, so that the approved medical specialist is not permitted to perform the allotted task until the effects of each and every injury are manifested, observable and measurable in such a way that it is possible not only to conclude that all impairments are permanent but also to ascribe the necessary "degree" to each of them and therefore to the whole. 55I am not at all persuaded that this is the correct approach. The legislation defers to medical opinion. It makes the professional evaluations of approved medical specialists (and, as necessary, a Medical Appeal Panel) the foundation of the system of quantification of lump sum compensation. That being so, it would be surprising if the legislature intended to indicate, through the word "may" in s 322(4), a compulsory course of conduct on the part of medical personnel as distinct from creating a discretion. 56The discretionary nature of s 322(4) is seen to be even more pronounced when it is remembered that the system of quantification involving AMA5 and the Combined Values Chart expressly contemplates a continuing process under which a degree (or percentage) originally struck by reference to one impairment may be revised and updated as and when other impairments having the same ultimate source become ripe for evaluation in degree (or percentage) terms. 57The construction for which the employers contend would mean that, in a case such as the present where different impairments emerge in full form at different - perhaps widely different - times, the injured worker can receive no lump sum compensation until all of them have emerged in full form. 58The prescribed assessment system facilitates the combination, in a structured manner, of the effects of different impairments having their source in a single incident. It does so in such a way that the "degree" attributed to one impairment will not be reduced if the "degree" of another impairment having the same source is later added. There is therefore no difficulty with the concept of ongoing revision of the overall effect, in impairment terms, produced by a single incident, with lump sum compensation in turn being increased to reflect that revision. 59In that context, there is no warrant for reading "may" in s 322(4) as meaning "must". Rather, "may" places a choice at the disposal of the approved medical specialist and implies that that choice is to be exercised according to the practitioner's discretion concerning a particular impairment. 60In my opinion, therefore, the primary judge was correct to give an affirmative answer to question (a) at [17] above; and contention (1) at [27] above is not correct.

Denial of oral hearing 61I turn now to the judge's twofold conclusion that, in the circumstances of the case, the Medical Appeal Panel was not required to conduct an oral hearing but was required to call for further submissions from the employers. 62The relevant facts may be stated briefly. The employers, in their appeal application, indicated that they wished to have an opportunity to present oral submissions. That application was accompanied by written submissions of two pages referring to the grounds of appeal stated in the application, offering certain explanations and concluding: "The Appellant says further that as the Appellant is seeking a hearing in respect of this matter, the Appellant proposes to elaborate on all of the errors identified with submissions to be made at the hearing sought." 63The Registrar's delegate made and documented a decision that, on the face of the application, one of the grounds of appeal had been made out, being a ground based on the proposition that there can be no assessment until all impairments have reached maximum medical improvement. The delegate's decision included the following: "An Appeal Panel may determine an appeal solely on the basis of the written application and any written notice of opposition. When a matter is determined on the papers, a copy of the decision will be issued to the parties." 64The statutory provision concerning appeal is s 328 of the WIM Act: "(1) An appeal against a medical assessment is to be heard by an Appeal Panel constituted by 2 approved medical specialists and 1 Arbitrator, chosen by the Registrar. (2) The appeal is to be by way of review of the original medical assessment. The WorkCover Guidelines can provide for the procedure on an appeal. (3) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the medical assessment appealed against may not be given on an appeal unless the evidence was not available to the appellant before that medical assessment or could not reasonably have been obtained by the appellant before that medical assessment. (4) When attending an Appeal Panel for the purposes of an assessment, an injured worker is entitled to be accompanied by a person (whether or not a legal adviser or agent) to act as the injured worker's advocate and assist him or her to present his or her case to the Appeal Panel. (5) The Appeal Panel may confirm the certificate of assessment given in connection with the medical assessment appealed against, or may revoke that certificate and issue a new certificate as to the matters concerned. Section 326 applies to any such new certificate. (6) The decision of a majority of the members of an Appeal Panel is the decision of the Appeal Panel." 65Three features of this provision should be noted. First, s 328(1) refers to an appeal being "heard by" an Appeal Panel. Second, s 328(4), dealing with an injured worker's "attending an Appeal Panel for the purposes of an assessment", says that the worker is entitled to be accompanied by a person "to act as the injured worker's advocate and assist him or her to present his or her case to the Appeal Panel". Third, s 328(2) says that the WorkCover Guidelines may provide for the procedure on an appeal. This last aspect is reinforced by s 331 which says that appeals under Part 7 are "subject to relevant provisions of the WorkCover Guidelines" relating to certain matters, including "the procedure on appeals". 66Relevant provisions of the WorkCover Guidelines, as in force at the material time, are paragraphs 45 and 46. Paragraph 45 reads, in part, as follows: "The Appeal Panel may adopt any of the following procedures in accordance with the needs of the individual case: preliminary review (in all matters), 'on the papers' review, further medical examination by an approved medical specialist on the appeal panel, assessment hearing." 67The balance of paragraph 45 deals with the case where a further medical examination is required. Paragraph 46 then provides: "Where the Appeal Panel determines a matter is not capable of determination on the papers either with or without a further medical examination, an assessment hearing will be arranged." 68The remainder of paragraph 46 deals with procedure at the hearing itself. 69The effect of the applicable provisions was, in my respectful opinion, correctly summarised by Studdert J in Estate of Brockmann v Brockmann Metal Roofing Pty Ltd [2006] NSWSC 235 (at [57]-[58]): "In context, I do not consider that s 328(1) of the WIMWC Act compels the conduct of an adversarial hearing. An appeal is to be 'heard' by a three person panel, but the Practice Direction and, more importantly, the Guidelines contemplate that the Appeal Panel may determine how the Appeal is to proceed. Under para 43 of the Guidelines, the Appeal Panel is authorised either to set a date for an assessment hearing, or to decide the appeal on the papers, without further involvement from the parties. The Guidelines do not specifically mandate an assessment hearing if the Panel decides that there ought to be a medical examination. Nor do I consider s 328(4) ought to be construed as making an assessment hearing obligatory. What the subsection does is to entitle an injured worker to be accompanied to an Appeal Panel hearing, if such a hearing is conducted." 70Those observations were expressly endorsed by Hall J in Symbion Health Ltd v Hrouda [2010] NSWSC 295. 71Pertinent features of the applicable provisions are that: (a) it is the Appeal Panel that decides which of the several procedures described in the Guidelines is to be adopted: (b) the Appeal Panel's decision is to be informed by its assessment of the needs of the particular case; (c) a hearing will be arranged if the Appeal Panel determines that the matter is not capable of determination on the papers; and (d) the reference to an appeal being "heard" does not imply that there must invariably be an oral hearing. 72Having regard, in particular, to (c), the general expectation is that there will be a determination on the papers. This is reinforced by the prescribed form by means of which an appeal is initiated. The form says, in relation to a request to present oral submissions: "If yes, attach reasons why the appeal should not be determined by the Appeal Panel on the papers, and why the presentation of oral submissions is necessary. Failure to attach submissions may result in the application being rejected." 73In this case, the Medical Appeal Panel decided that the matter was capable of determination on the papers. It made that clear in the part of its decision extracted at [14] above. It is true that the Medical Appeal Panel then went on to criticise the standard of the employers' submissions: see [15] above. It made the point that the employers were aware that appeals were routinely determined on the papers and that they should have framed their submissions accordingly, rather than proceeding on the basis that they would advance further submissions or amplify the written submissions at the hearing they were requesting. 74The fact that, under the applicable provisions, it is the task of the Medical Appeal Panel to decide which method of proceeding is apt, coupled with the fact that disposal on the papers is stated to be the preferred method unless the panel itself decides that it is unsuitable, means that an appellant must, in general, present its written appeal in a way that will allow that method to be adopted. I say "in general" because there may be cases of particular difficulty or complexity which cannot be dealt with adequately in writing and where some oral elaboration or explanation is needed. In such an instance, however, it is for the applicant to point to factors making the matter unsuitable for determination on the papers and advance cogent reasons why an oral hearing should be convened. 75In this case, the employers made no attempt to explain why an oral hearing was necessary. They simply put from the start the proposition that there should be an oral hearing and effectively declined to give more than a skeleton outline of the grounds on which they relied and the submissions they advanced. It does not avail them to refer in abstract terms to a "right to be heard" since this entails no more than a fair opportunity to present one's case in the context of the procedures applicable to the particular decision making function. 76The employers were quite entitled to take the course they in fact adopted. What they were not entitled to do was to assume that, just because they asked for an oral hearing and chose to say very little in their written materials, the Medical Appeal Panel would or should grant their request. It was for the Medical Appeal Panel, not the employers, to decide whether the case required an oral hearing. The employers had no legitimate expectation of forcing the Medical Appeal Panel's hand in that respect by filing sketchy material and saying to the Medical Appeal Tribunal, in effect, "Given the paucity of the material we have deliberately chosen to provide, you have no real option but to grant the oral hearing we seek." 77The employers knew of the processes described in the Act and the Guidelines. Their position was therefore as described by Mason P (with the concurrence of Santow and Tobias JJA) in Fletcher International Exports Pty Ltd v Barrow [2007] NSWCA 244; (2007) 5 DDCR 247, a case concerning appeal to a Presidential Member of the Workers Compensation Commission from the decision of an Arbitrator. Mason P said (at [96]-[97]): "It [the employer] knew that it was at least 'on the cards' that the Commission might proceed on the papers. The employer sought to persuade the Commission otherwise but, on the evidence before us, it had no entitlement to presume a favourable response to the views it somewhat presumptuously expressed through its solicitors. The employer's submissions hint at the proposition that it was in some way misled into thinking that a hearing would be appointed. There is no evidence to suggest this. It seems to have done nothing to clarify the position. Its written submissions were dated 27 April 2005 and accompanied the Application. The transcript of the arbitration proceedings was sent to the employer by the Commission on 23 June 2005 (Red 529). The Determination of the Acting Deputy President was issued on 14 June 2006." 78The primary judge said that, in this case too, it was plainly "on the cards" that the employers' application for an oral hearing might be refused and that that was what the employee urged. The employers had full opportunity to advance full and detailed written submissions in response to those advanced against it by the employee on the matters in issue but, by way of what can only have been a tactical decision, deliberately forewent that opportunity, preferring to take its chances on bluffing the panel into a departure from the normal practice. Contention (3) at [27] above is not valid. 79The primary judge was, in my opinion, correct in her conclusion that there was no denial of procedural fairness in the Medical Appeal Panel's decision not to convene an oral hearing.

No request for further written submissions 80I turn now to the circumstance that the Medical Appeal Panel did not invite further written submissions form the employers or otherwise give them an opportunity to make further written submissions. 81The nature of the ordained process is such that a party who appeals to a Medical Appeal Panel must, at the outset, frame grounds of appeal and marshal material sufficient to enable the Registrar to decide, under s 327(4) of the WIM Act, whether any of the grounds relied on "has been made out". The Registrar's function is not to decide whether there is a serious case to be considered or whether some prima facie basis for intervention on appeal has been established. It is to evaluate each of the appeal grounds put forward and to decide whether any of them "has been made out". It follows that submissions made to the Registrar must be sufficiently detailed and comprehensive to allow the Registrar to come to a definitive decision. 82An appellant will therefore place before the Registrar all grounds and all supporting materials that the appellant considers necessary to enable a decision to be made whether or not each ground "has been made out". From the appellant's viewpoint, the task to be undertaken before the Registrar is, in essence, the same as the task to be undertaken before the Medical Appeal Panel itself, that is, the task of persuading the decision-maker that the grounds put forward have "been made out". There must accordingly be an expectation that the full case the appellant seeks to make in respect of each ground will be completely articulated, first, so that the Registrar can decide in relation to each ground whether it "has been made out" and, second, so that the Medical Appeal Panel can make its own decision on the several grounds, if and when a positive decision is made by the Registrar. 83I am not persuaded that the Medical Appeal Panel fell into error by not inviting the employers to make further submissions to it or otherwise giving them an opportunity to make further submissions. The Medical Appeal Panel criticised the standard of the submissions and their brevity. The Medical Appeal Panel was nevertheless quite able to understand the case put. At several places in its determination, the Panel referred to matters submitted by the employers. At paragraph 24, it outlined a particular submission and rejected it. At paragraph 25, it outlined another submission, said that the alleged error was not explained and expressed an opinion corresponding with the finding of the approved medical specialist. The same course was taken at paragraph 26 in relation to another matter. A further submission was referred to at paragraph 27 and dismissed as "simply wrong". 84It is thus clear that the Medical Appeal Panel engaged directly with the employers' submissions and dealt with them on their merits, as it saw them. It is true that the Panel criticised the standard and quality of the employers' submissions. But the fact that it formed a poor opinion of them did not give rise to any duty to seek further and better submissions when the employers had consciously chosen to be brief as part of what can only be regarded as a ploy (ultimately unsuccessful) to obtain an oral hearing. Entirely apposite here are observations of Mason P in Fletcher International Exports Pty Ltd v Barrow (above) at [98] concerning an analogous type of appeal: "The submissions that the Presidential member was in some way obliged to 'seek clarification of the way in which the Appellant contended its submissions were relevant' (Ground 6(c)) seeks to impose a duty on which the statute is silent. Procedural fairness does not require this of a decision-maker: a reasonable opportunity to advance arguments is all that is required in a context where the issues are known or (as here) formulated by the party in question. The detailed reasons provided in the Determination show that the presidential member understood the employer's submissions, addressing them in turn." (Emphasis added) 85I should add that this was not a case in which the Medical Appeal Panel departed from the grounds of appeal the employer had notified. The particular duty to give an opportunity to advance submissions identified in Siddick v WorkCover Authority of New South Wales [2008] NSWCA 116; (2008) 6 DDCR 228 at [104] therefore did not operate. 86For these reasons, I am of the opinion that the primary judge fell into error when she decided that the Medical Appeal Panel denied natural justice when it did not give the employers an opportunity to make further written submissions to supplement those it described as not of an acceptable standard. Contention (4) at [27] above is correct.

Failure to remit 87The next question for consideration is whether the primary judge's discretion miscarried when, having found that the Medical Appeal Panel failed to give adequate reasons in support of its conclusion on the question of statutory construction, her Honour declined to quash the decision and remit the matter for redetermination. 88The employers say that the primary judge's conclusion (at [16]) that "it was unlikely that any different outcome could result from the matter being referred back to the Appeal Panel" represented an insufficient basis for declining to set aside the panel's determination and to remit the matter to the panel. The correct test, it is said, is whether or not it could be said that no different result could ensue if the matter were remitted for reconsideration. 89In the particular context, I consider it unnecessary to express an opinion on what is the correct test. This is because the real question relevant to the discretion under consideration is whether any benefit could have arisen from the grant of prerogative relief and remitter to the decision maker or whether that course would be futile. 90The primary judge held that the Medical Appeal Panel had correctly construed the statutory provisions, even though it had not adequately stated the reasons for its opinion. I am of the opinion that the judge's decision was correct. Upon any remitter, a panel would be obliged to proceed according to that view of the law - that is, on a basis corresponding precisely with that it adopted originally. In those circumstances, remitter would be futile; and it can be said that no miscarriage of justice will result if the judge's decision not to remit is allowed to stand. That statement of conclusion is sufficient to deal with contention (2) at [27] above.

The declaration 91The employee, in her notice of cross-appeal, seeks an order setting aside the declaration made by the primary judge which was in these terms: "Declare that the decision of the Medical Appeal Panel involved error of law on the face of the record." 92As I have said, the primary judge, being of the opinion reflected by the declaration, declined to remit the matter to the Medical Appeal Panel for redetermination. 93Although little was said in submissions about this aspect of the cross-appeal, the central contention of the employee is that, in the particular context, a bare declaration that does not declare some right is of no utility. I accept that submission. The declaration does not state that one of the parties has some entitlement as against the other. Nor does it say how the decision involved error of law on the face of the record. The error was, however, clearly identified in the judge's reasons as the panel's failure to give reasons. 94Given that the judge's reasons thus identified and explained the relevant error and the declaration did not do so, the declaration cannot, in this case, produce any useful effect of a salutary kind such as was recognised in Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 and Truth About Motorways Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11; (2000) 200 CLR 591. 95Because, in the circumstances of the case, the bare declaration serves no useful purpose, this Court should set it aside.

The costs issue 96The primary judge ordered that the employer pay 70% of the employee's costs and that costs be assessed on the ordinary basis. The employee argued before this Court that she should have the whole of her costs at first instance and that those costs should be assessed on an indemnity basis. 97The primary judge observed that while the employers had succeeded on the issues concerning adequacy of reasons and the panel's failure to seek further submissions, they had failed on the issue of correct construction of the legislation. Her Honour noted that it was the construction issue that had taken up "the bulk of the time at the hearing" and had provided a need for an adjournment so that the WorkCover Authority could be given an opportunity to be heard. Having regard to the mixed outcome, the judge was of the opinion that an order requiring the employers to bear 70% of the employee's costs would be the just result. 98On the question of assessment on the indemnity basis, it was submitted by the employee before the primary judge that the employers' conduct in "attempting to hold the Panel to ransom in pursuing its desire for an oral hearing and disregarding its obligation to assist the Panel" (to quote the judge's paraphrase of the submission) was "presumptuous and contemptuous of its obligations before the Medical Appeal Panel" and constituted unreasonable conduct for the purposes of principles concerning indemnity costs. Her Honour declined to order assessment on an indemnity basis, saying (at [23] of the reasons of 5 April 2012): "A costs order is compensatory in nature, not punitive. An indemnity costs order may be made in circumstances where there is relevant misconduct in connection with the conduct of the proceedings, but it is not an order for damages in respect of conduct that gave rise to the proceedings (see Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67]-[70].)" 99In light of my conclusions on the issues raised on appeal, the employers cannot be regarded as having succeeded on any of the issues that arose in the proceedings. A possible qualification is that the primary judge's finding of lack of adequate reasons on the part of the Medical Appeal Panel is undisturbed but that, in reality, is wholly blunted by the conclusion that no duty to remit arose and that the bare declaration should be set aside. 100In those circumstances, the order that the employers pay 70% of the employee's costs at first instance should be replaced by an order that the employers pay the whole of those costs of the employee. 101As to the contention on appeal that assessment of the costs at first instance should have been on an indemnity basis, I am of the opinion that the primary judge's approach and decision were correct. The focus must be upon the parties' conduct in the litigation. I accept that the employers failed to engage in an appropriate way with established Medical Appeal Panel procedures and sought, in a real sense, to bend those procedures to their advantage. While conduct of that kind is obviously unmeritorious (particularly when engaged in by employers towards their injured employee), it is conduct that is separate from and anterior to legal proceedings that arise from a decision of a Medical Appeal Panel. 102The issues raised by the employers in the proceedings they commenced in the Common Law Division were genuine issues. They were not spurious or devoid of merit. The proceedings were properly and responsibly instituted and prosecuted, whatever view one might take of the employers' earlier conduct in relation to the Medical Appeal Panel. 103The judge's discretion as to the basis of assessment of costs did not miscarry.

Costs on appeal 104The employee says that, if the outcome of the appeal is favourable to her (as, in my opinion it should be), she should have her costs in this Court on an indemnity basis. That submission is supported by the same argument as was made in relation to the basis of assessment of the costs at first instance. For the same reasons, I am of the opinion that, while the employee should have a costs order, costs should not be assessed on an indemnity basis.

Conclusion 105In my opinion, this Court should make orders as follows:

Grant leave to appeal and to cross-appeal.
Direct that notice of appeal and notice of cross-appeal be filed within fourteen days.
Appeal dismissed.
Cross-appeal allowed.
Set aside the orders made in the Common Law Division on 5 April 2012.
In lieu thereof: (a) Dismiss the summons. (b) Order the plaintiffs to pay the first defendant's costs of the proceedings.
That the appellants/cross-respondents pay the costs of the respondent/cross-appellant of the appeal and the cross-appeal. 106WARD JA: I agree with Barrett JA and the orders his Honour proposes. 107TOBIAS AJA: I agree with the orders proposed by Barrett JA for the reasons he has expressed.

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: 14 May 2013

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