1. Section 106 of the RTW Act addresses the costs of proceedings relating to a decision under Division 4 of Part 6 and provides:

(1) A party (other than the relevant compensating authority) is entitled, subject to this Part and to limits prescribed by regulation, to an award against the relevant compensating authority for the party's reasonable costs of -

(a) any initial reconsideration of a decision under Division 4; and

(b) any subsequent proceedings for resolution of the matter before the Tribunal.

(a) the cost of representation by a legal practitioner or an officer or employee of an industrial association; and

(b) costs of a kind authorised by the regulations that were reasonably incurred.

(3) If the Tribunal is of the opinion that a party -

(i) in bringing proceedings before the Tribunal; or

(ii) in view of an assessment or recommendation of a member of the Tribunal under section 43(13) of the South Australian Employment Tribunal Act 2014; or

(iii) without limiting subparagraph (ii) - in failing to discontinue or settle any proceedings before the conclusion of the hearing of a matter; or

(iv) in relation to any other aspect of the conduct of proceedings before the Tribunal; or

(b) has acted frivolously or vexatiously in bringing or in relation to the conduct of proceedings before the Tribunal,

(c) decline to make an award of costs in favour of the party and may further (if it thinks fit) make an award of costs against the party; or

(d) reduce the amount of the award of costs to which the party would otherwise have been entitled.

(4) Subject to subsection (5), an award of costs to cover professional advice or assistance may, if the Tribunal considers appropriate, be made in favour of the person who provided the professional advice or assistance.

(5) An award of costs to cover the cost of representation by an officer or employee of an industrial association are payable to the industrial association.

(6) An award of legal costs cannot exceed 85% of the amount that would be allowable under the relevant Supreme Court scale if the proceedings were in the Supreme Court.

(7) If the amount of permanent impairment compensation is disputed by a worker and the amount the Tribunal awards is less than, or the same as, or less than 10% above, an amount offered by the relevant compensating authority to settle the matter before the matter proceeds to a hearing before the Tribunal, the worker is not entitled to costs under this section (and evidence of an offer made in the course of a compulsory conference or mediation is admissible (without the consent of all parties) in subsequent proceedings for the purpose of applying this provision).

(8) Section 57 of the South Australian Employment Tribunal Act 2014 does not apply to proceedings before the Tribunal under this Act.

1. In Northern Territory v Sangare[1] the High Court stated that the power to award costs is a creature of statute.[2] The Court went on to observe that, subject to fetters upon the exercise of discretion provided by the legislature, a successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation.[3] The Court added that the formulation of principles to guide the exercise of any discretion conferred avoids arbitrariness and serves the need for consistency which is an essential aspect of the exercise of judicial power.[4]
2. Section 106 of the RTW Act has been referred to as providing a more benevolent costs regime for parties, other than the relevant compensating authority, than would normally apply in conventional civil litigation.[5] This is in circumstances of ordinarily in conventional civil litigation costs following the event and s 106(1) providing that, ordinarily, a party other than the relevant compensating authority is entitled to an award of costs against the relevant compensating authority of the party's reasonable costs, regardless of the outcome.
3. Sub-sections 106(3) and (7), sought to be relied upon by the respondent in this matter, provide for exceptions in certain circumstances. Sub-section 106(3) empowers the Tribunal to make adverse costs orders against a party and, relevantly in this case, where a party acts unreasonably, frivolously or vexatiously in bringing the proceedings, or in the conduct of the proceedings, before the Tribunal. Where such a finding is made, the Tribunal may decline to make an award of costs in favour of that party and may further make an award of costs against the party, or it may reduce the amount of the award of costs to which the party would otherwise have been entitled. It is for the party seeking to invoke s 106(3) to persuade the Tribunal that, firstly, the facts are within the scope of the sub-section and, secondly, that the discretion should be exercised in the manner sought.
4. Sub-section 106(7) may only apply in circumstances of a dispute as to the amount of permanent impairment compensation claimed. If the criteria set out in the sub-section are satisfied, then the provision states that the worker is not entitled to costs under the section. Whilst sub-section 106(7) was construed by the Court of Appeal in Return to Work Corporation of South Australia v Sweeney (Sweeney)[6], the Court observed that whether there is no scope for the exercise of any residual discretion where the criteria are satisfied, was not argued on that appeal.[7] The Court identified what sub-section 106(7) requires in order for it to be operative in any particular case:

119. It may be seen that s 106(7) requires:

1. A dispute concerning the amount of permanent impairment compensation determined by the compensating authority to be due to a worker.

2. An amount offered by the relevant compensating authority to settle the matter before the matter proceeds to a hearing before the Tribunal.

3. A hearing of that dispute in the Tribunal.

4. An award made by the Tribunal following the hearing of that dispute.

5. The award made by the Tribunal is "less than, or the same as, or less than 10% above" the amount offered by the compensating authority.[8]

1. The following background is obtained from the affidavits read and documents tendered for the purpose of the Tribunal determining the applications for costs.
2. At the time the arrangements were made for the applicant to be assessed as to permanent impairment in accordance with s 22 of the RTW Act and relevant medical guidelines, the respondent had accepted the applicant had a work injury of noise-induced hearing loss and tinnitus. Leading to the assessment of permanent impairment to be undertaken by ear, nose, and throat surgeon Dr Garret Hunter, the applicant requested, and had confirmed by the respondent's nominated compensating authority, that two medical certificates would be provided to Dr Hunter which were contended by the applicant to be relevant to the assessment of permanent impairment for the tinnitus.
3. The first certificate was of Dr Gibe Jose dated 22 May 2025, which stated:

This is to certify that:

Ms Faye Hamilton Date Of Birth: 3/12/1962

Has been having headaches associated with tinnitus since ten years which is worsening progressively.

This certificate was completed on 22/5/2024.

1. The second certificate dated 28 May 2024 was of Dr Mark Harris and stated:

Re: Ms Faye Hamilton

...

Date of Birth 03 DE C 1962

This is to certify that the above has had headaches associated with tinnitus for some years.

She has related high frequency hearing loss.

1. The arrangements made for the applicant to be assessed by Dr Hunter were not made directly with Dr Hunter or private rooms of Dr Hunter. The arrangements were made through an organisation called PIA Reporting which, in turn, appears to have had a contractual arrangement with Dr Hunter. Accordingly, the medical certificates were provided by the respondent to PIA Reporting with the understanding that they would, in turn, be provided by PIA Reporting to Dr Hunter.
2. Dr Hunter provided a whole person impairment (WPI) assessment report dated 18 June 2024 (the first report). In the first report, he stated that he examined the applicant on 4 June 2024 for a WPI assessment and report. The first report is divided into separate headings. One such heading is titled "Documentary Materials" under which the first report then sets out confirmation of documents that were received by Dr Hunter. Neither of the two medical certificates are identified either in that part or in any other part of the first report.
3. In the history section of the first report, Dr Hunter records:

There was no reported history of head trauma or other unrelated hearing loss. She does suffer from headaches which worry her.

1. Whether there was any association or causal link between the headaches and the tinnitus experienced by the applicant was not addressed in the first report.
2. Dr Hunter utilised a separate heading titled "Tinnitus History". There he recorded:

Ms Hamilton suffers from intermittent tinnitus with modest effect on her sleep, concentration, or speech discrimination. As I assessed tinnitus symptoms to be mild, I declined to provide a loading under paragraph 9.11 of the Impairment Assessment Guidelines.

1. There was no record of Dr Hunter asking the applicant about the history recorded in the certificates of having experienced, for up to ten years, headaches associated with the tinnitus which had been worsening progressively. There was no reference in the first report whether he had taken this into account or any reasoning associated with whatever conclusion may have been reached.
2. In relation to the assessment of WPI for the noise-induced hearing loss, Dr Hunter concluded that the relevant assessment was of 7.6% binaural hearing impairment (BHI) which translated to a 4% WPI by utilising Table 9.2 of the Impairment Assessment Guidelines (IAG). The assessment of BHI had to reach the range of 8.8 to 10.6 BHI to equate to a 5% WPI. Given the nil assessment for tinnitus, the overall assessment of WPI remained at 4%. Chapter 9.11 of the IAG provides for an additional percentage of up to 5% BHI in cases of severe tinnitus.
3. Section 58(2) of the RTW Act provides that there is no entitlement to a lump sum payment under that section if the worker's degree of WPI from physical injury is less than 5%.
4. In reliance of the assessment of Dr Hunter, the respondent proceeded to determine, by letter dated 25 June 2024, that the applicant's entitlement to compensation for non-economic loss as a result of noise-induced hearing loss and tinnitus is nil.
5. On 14 October 2024 the applicant applied to the Tribunal for it to review the determination of the respondent. The applicant advanced the following ground:

The applicant asserts that the Whole Person Impairment report of Dr Garret Hunter dated 18 June 2024 is flawed. The applicant suffers from tinnitus, and in addition of her compensable condition, should have been made in accordance with the IAGs. The applicant produced medical records to support her tinnitus condition, which Dr Hunter does not appear to have considered.

1. The matter failed to resolve at conciliation. In her Assessment and Recommendations, dated 19 December 2024, Commissioner Byrt noted the position of the applicant that there should have been a joint request by the parties to Dr Hunter for him to provide a further report stating whether he considered the content of the two medical certificates when exercising his judgement in relation to the claimed tinnitus. The Commissioner noted that the respondent would not agree to such an approach. The Commissioner added:

The suggestion of seeking clarification from Dr Hunter is a most reasonable course of action. It is certainly a more economical way of getting clarity than the cost of running a trial and allowing that information to come out via examination/cross-examination. Given the comments made by the applicant's representative, it could well lead to a quick resolution of the dispute ... and I don't consider there is such a dearth of evidence that the Applicant could be put on notice as to costs for proceeding to a trial.

1. The Assessment and Recommendations of the Commissioner was not provided to me until it was annexed to an affidavit of solicitor Leanna Marie Ferraro sworn on 29 September 2025. The record of the first directions hearing before me, which took place on 16 January 2025, upon referral for hearing and determination, states:
   1. There has been a discussion today as to whether there should be a letter sent to Dr Hunter asking him to clarify whether or not he considered the content of a medical certificate dated 22 May 2024. If he did, then the letter should seek his reasoning as to why it was not sufficient to provide a loading for tinnitus or, if he did not consider it, whether it does cause him to vary the opinion that he has expressed. The matter is adjourned to a directions hearing at 10:50am on 30 January 2025 to allow the respondent an opportunity to consider if it is prepared to consent to a letter being sent to Dr Hunter to address those matters in the light of the discussion today. [emphasis added][9]
2. Whilst the respondent caused a letter to be sent to PIA Reporting dated 21 February 2025 requesting a further report from Dr Hunter, he was only asked whether the two medical certificates were considered by him prior to writing the first report.[10] He replied that the documents were received within an hour of the consultation and were considered before the tinnitus loading was determined. No reasoning was provided. The further information was provided by letter dated 21 March 2025 (the second report). It is not clear as to whether the certificates were received and read by Dr Hunter before or after the consultation, so that it is also not clear whether Dr Hunter had the benefit of the certificates when obtaining the history from the applicant.
3. Thereafter, there were exchanges of correspondence between the parties. The applicant offered to concede the dispute upon the acceptance by the respondent that she be entitled to recover her costs of representation from the respondent. The respondent rejected that offer. Nevertheless, by email transmission forwarded on 8 July 2025, the respondent put forward an offer to pay an amount of $4,500 inclusive of GST and internal disbursements, to settle any claim for costs. That was in response to a claim by the applicant of $7,735 inclusive of GST and internal disbursements. Ultimately the orders recorded in paragraph 1 of these reasons were made on 5 August 2025.

1. The respondent submitted that the Tribunal should order, in cascading order of alternative:
   1. That the applicant pay the respondent's costs to be agreed or adjudicated; or
   2. That the Tribunal declines to make an order in the applicant's favour with respect to her costs of the proceedings; or
   3. That the Tribunal reduces the award of costs in favour of the applicant to a percentage less than 100%.[11]
2. The respondent submitted that the consent orders made by the Tribunal constituted a final order which resulted in "less than, or the same as, or less than 10% above" the amount that had been offered by the respondent which, in accordance with s 106(7) of the RTW Act, means that the applicant is not entitled to costs under s 106. In the alternative, it was submitted that the applicant acted unreasonably in the course of the proceedings (including the commencement or the continuation of the proceedings), and further there was frivolous or vexatious conduct within the ambit of s 106(3) of the RTW Act.
3. The respondent submitted that the applicant either knew, or ought to have known from the outset, given the state of the expert evidence, that there was no prospect of success and that the outcome should have been even more starkly apparent after the applicant received a letter from the respondent's solicitors dated 6 December 2024. That letter asserted that the first report of Dr Hunter was compliant and that Dr Hunter had been provided with the two medical certificates. The respondent offered, at that time, to pay the applicant's reasonable legal costs if the applicant effectively conceded the dispute by the close of business on 10 December 2024. Otherwise, the applicant was put on notice that the letter would be relied upon in support of an application for an order that the applicant pay the respondent's costs of the proceedings, on an indemnity basis, from the date of the letter. That position was expressed to be in accordance with the principles set out in Calderbank v Calderbank (Calderbank)[12] and Hazeldene's Chicken Farm v VWA (No2) (Hazeldene)[13].
4. In characterising the applicant's case, the respondent submitted:
   1. The applicant's argument never had any evidentiary support, and was not worthy of consideration - it did not prove unsuccessful on balance;
   2. The applicant cannot, given the lack of supporting expert evidence, be found to have had a "genuinely held belief" in her version of events;
   3. She therefore prosecuted a hopeless case which was doomed to fail, and this was an unreasonable act; and
   4. It cannot be said that pursuing a hopeless case is in any way "appropriate, moderate, fair, and proportionate".[14]
5. The respondent further submitted that to institute the claim and continue with the proceedings where the case was hopeless would constitute a frivolous and vexatious approach to the litigation.
6. In relation to s 106(7), the respondent referred to the requirements for that provision to operate, as set out by the Court of Appeal in Sweeney in paragraph 119. The respondent acknowledged, as arguable, that steps 3, 4, and 5 have not been met because the matter had not proceeded to a hearing and determination of an award by the Tribunal. It urged a broad construction of s 106(7), which is intended to operate to reduce litigation by compromise, and the respondent referred to the offer that had been made to pay reasonable costs to 10 December 2024.

1. The applicant urged caution in evaluating the merit of her case, in the manner raised by the respondent, where there had been no hearing and determination by the Tribunal. The applicant maintained that there was merit in continuing with the application for review until the consent orders were made. Reference was made to the decision of the Tribunal in Abraham v Return to Work SA (Abraham)[15] that a permanent impairment assessment report in accordance with s 22 of the RTW Act must satisfy the test of admissibility that applies to expert evidence. The applicant also referred to the decision of the Full Bench of this Tribunal in Luke v Department of Primary Industries and Regions (Luke)[16] that potential error, as opposed to actual error, by an assessor may provide a sufficient basis for the Tribunal to make a referral to an independent medical adviser, in order to establish or allay concerns about perceived error.
2. The applicant submitted that in this case, until Dr Hunter confirmed in his second report that he had considered the two medical certificates, the applicant had acted reasonably in raising potential error in Dr Hunter not having considered evidence which was forwarded by the respondent for his consideration.
3. The applicant noted that it was only after the obtaining of the second report from Dr Hunter was raised by me that the respondent agreed to do so. Reference was made to the applicant's consent to such an approach at the conciliation conference.
4. The applicant also referred to the decision of this Tribunal in Van Loggem v Return to Work Corporation of South Australia (Van Loggem)[17] with respect to the preparation of reports by experts associated with PIA Reporting.
5. The applicant submitted that, in conceding the dispute when she did, the applicant did not concede that her application for review was without merit. Rather, the applicant had to take into account the risk of proceeding to a hearing and determination by the Tribunal, and the potential consequences as to costs if the Tribunal were to have confirmed the decision of the respondent in those circumstances by reference to the reasoning of the Court of Appeal in Sweeney.
6. The applicant referred to the observation of the Court of Appeal in Sweeney that s 106(7) of the RTW Act is intended to encourage the resolution of disputes concerning permanent impairment compensation.[18] As to the construction of s 106(7), the applicant submitted the Court of Appeal held in Sweeney, by reference to the requirements identified at paragraph 119 of its judgment, that it is only where there has been an amount offered by the relevant compensating authority to settle the matter before the matter proceeds to a hearing before the Tribunal, that the matter does proceed to a hearing of the dispute in the Tribunal, and an award is subsequently made by the Tribunal following the hearing of the dispute, that the provision may operate. As, in this case, there had been no hearing by the Tribunal nor an award made by the Tribunal following the hearing of that dispute, the applicant submitted that s 106(7) cannot operate so as to disentitle the applicant from recovering from the respondent, her reasonable costs of representation.
7. In reply the respondent submitted that it would be erroneous to equate, without evidence, the practice of Dr Hunter with the evidence given by another ear, nose, and throat surgeon in Van Loggem.

1. Sub-section 22(3) of the RTW Act provides that the Minister will publish IAG for the purposes of assessment for permanent impairment. Since the RTW Act came into operation on 1 July 2015 there have been three editions of the IAG. The second edition did not become operative. The third edition commenced on 1 October 2025 but did not apply in this case as Chapter 1.4 provides:
   • 1.4 The impairment assessment guidelines in operation immediately before the commencement date will continue to apply in relation to the assessment of permanent impairment of a worker's injury if, before the commencement date, the worker had attended an appointment with an assessor selected in accordance with those impairment assessment guidelines for the purpose of assessment of permanent impairment of that injury.
2. Accordingly, it is the first edition of the IAG which continued to apply in this case. It is the edition referred to below.
3. The IAG adopt AMA5 in most cases but where there is a difference then the IAG are to be used as the modifying document.[19]
4. Chapter 9 of the IAG addresses hearing loss and tinnitus. The preamble to the Chapter states that the IAG are to take precedence over AMA5. Chapter 9.11 addresses tinnitus in the context of a BHI and states:

9.11 Binaural hearing impairment and severe tinnitus: up to 5% may be added to the work-related binaural hearing impairment for severe tinnitus caused by work injury:

• After presbyacusis correction, if applicable, and
• Before determining WPI.

The severity of tinnitus is determined by the accredited assessor.

1. Whilst the severity of the impairment, as a question of fact, is to be determined by the assessor, there is no definition or criteria identified in Chapter 9 to determine whether the threshold question of the establishment of severe tinnitus has been satisfied. The interpretation of the IAG is a question of law.[20]
2. Chapter 9.11 of the IAG varies from the cognate provision in AMA5. There, the ear, nose, throat, and related structures are addressed in Chapter 11. Chapter 11.2a sets out the criteria for rating impairment due to hearing loss and, with respect to tinnitus, states:

Tinnitus in the presence of unilateral or bilateral hearing impairment may impair speech discrimination. Therefore, add up to 5% for tinnitus in the presence of measurable hearing loss if the tinnitus impacts the ability to perform activities of daily living.

1. Chapter 9.11 of the IAG is accordingly different as the text before examples does not refer to either the possible impairment upon speech discrimination nor the impact that tinnitus may have upon the ability to perform activities of daily living, as criteria to be taken into account.
2. The IAG utilise examples to assist an assessor. Some of the examples in Chapter 9 address tinnitus. Example 9.1 refers to moderately severe tinnitus which was present on most days, interfering with concentration and occasionally interfering with sleep, when it could not be dampened with extraneous noise. 4% binaural hearing impairment was added for severe tinnitus. The example suggests that both the frequency of the experience of tinnitus and how the tinnitus may affect functioning are matters appropriately to be taken into account. Example 9.2 refers to mild tinnitus without impact upon the activities of daily living with the result of no additional allowance for the tinnitus experienced. Example 9.3 refers to an acceptance of severe tinnitus in circumstances of interference with sleep for 1 or 2 nights of the week, no effect during the day. 2% binaural hearing impairment was added for that medically assessed severe tinnitus. The further examples are indicative of a similar approach.
3. Whilst the examples may provide some assistance, if there is any inconsistency between the text in the IAG and an example intended to be illustrative of what is stated in the text then it is the text that will prevail.[21]
4. As Chapter 9.11 of the IAG does not identify the aspect or aspects of the experience of tinnitus that is or are required to qualify for a loading of impairment, it was at least arguable that "severe tinnitus" in Chapter 9.11 of the IAG is capable of differing constructions. It was arguable that it may refer to either the severity of the level of the ringing noise experienced, or individually the experience of how intrusive the noise experience has been, or the frequency experienced, or the impact upon the activities of daily living, or whether it gives rise to other symptoms such as headaches, anxiety or depression, including the extent to which those symptoms may have an impact upon the activities of daily living, or a combination thereof.
5. In the first report, Dr Hunter did not refer to the medical certificates which provided evidence of ongoing tinnitus over a number of years associated with headaches. Whilst the second report stated that he had considered the medical certificates before completing the first report, there was no reasoning as to why the tinnitus and associated headaches referred to in the medical certificates, either alone or in combination with his recorded "modest effect on her sleep, concentration, or speech discrimination", did not amount to severe tinnitus. It is unclear as to whether Dr Hunter concluded that the associated headaches could or could not be relevant to the evaluation of whether the claimed tinnitus was severe.
6. Chapter 1.43 to 1.51 of the IAG set out requirements for the content of reports relating to the assessment of WPI. Chapter 1.43 notes that an assessor in general will be requested to address issues including the reasoning as to how the assessor decided to allocate an injury to a particular class and selected a percentage within a percentage range, if applicable. Chapter 1.44 states that whilst the report should contain the factual information based upon the assessor's own history-taking and clinical examination, if other reports or investigations are relied upon in arriving at an opinion, then they should be appropriately referenced in the assessor's report. Chapter 1.45 provides that the report should provide a rationale consistent with the methodology and content of the guidelines.
7. In this case, it was at least arguable that Dr Hunter failed to provide his reasoning and rationale. He failed to appropriately reference the two medical certificates in the first report given his statement in the second report that he did consider them before he prepared the first report. He also failed to provide any reasoning, either in the first report, or the second report, as to why the experience of tinnitus and associated headaches, as noted in the two medical certificates, did not satisfy the requirement of "severe tinnitus" in Chapter 9.11, either alone, or in combination with the other effects of tinnitus as noted by Dr Hunter in the first report.
8. Where a medical assessor is required to provide reasons, then the failure to provide adequate reasons is an error of law and may amount to jurisdictional error. In Wingfoot Australia Partners Pty Ltd v Kocak[22] the High Court addressed s 68 of the Accident Compensation Act 1985 (Vic) which required a Medical Panel to give an opinion on a medical question referred to it and a written statement of its reasons for that opinion. The appeal raised questions as to the legal effect of an opinion of a Medical Panel, the standard required of the written statement of reasons and whether such an opinion could be quashed by an order in the nature of certiorari for breach of that standard. The High Court held that in Australia there is no free-standing common law duty to give reasons for making a statutory decision and that the duty is that imposed by the text of the legislative provision itself. The content of the statutory duty thereby defines the statutory standard that the written statement of reasons must meet to fulfil it.[23]
9. In construing the provision, the High Court identified two considerations as being of particular significance in determining the standard required of a written statement of reasons in order to fulfil the duty imposed by the provision. The two considerations identified were, firstly, the nature of the function performed by a Medical Panel informing and giving an opinion on a medical question referred to it, and the second was the objective within the scheme of the Act of requiring the medical panel to give a written statement of reasons for that opinion.[24] The Court observed that the function of a medical panel is to form and give its own opinion on the medical question referred for its opinion. The objective of requiring the Medical Panel to give a written statement of reasons for the opinion expressed was identified as providing a written statement of reasons adequate to enable a court to see whether the opinion does or does not involve any error of law.[25] Those considerations apply equally to the provision of a permanent impairment assessment report in accordance with s 22 of the RTW Act and the IAG.
10. The Court then stated the standard required of a written statement of reasons given by a Medical Panel as follows:

The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion of the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of that opinion. [emphasis added]

1. The requirements of the statement of reasons as emphasised in the passage apply to the reasons disclosed in a permanent impairment assessment report in accordance with s 22 of the RTW Act and the IAG. There are differences in the relevant provisions of the RTW Act as to the practical consequences of a failure to provide adequate reasons. A decision of a compensating authority based upon a permanent impairment assessment report is amenable to review by this Tribunal.[26]
2. As submitted by the applicant, the Tribunal held in Abraham that a permanent impairment assessment report must satisfy the test of admissibility that applies to expert evidence and if it does not, then the report is not binding either upon the parties or the Tribunal.[27] In reaching that conclusion, Gilchrist DPJ noted that had been the position with respect to the opinion of a Medical Panel constituted under the former Workers Rehabilitation and Compensation Act 1986.[28] The approach in Abraham has since been followed in this Tribunal and was cited with approval by Livesey and Bleby JJ as the majority in Paschalis v Return to Work Corporation of South Australia[29].
3. As submitted by the applicant, in Luke the Full Bench stated that potential error, as opposed to actual error may provide a sufficient basis for the Tribunal to refer a medical question to an independent medical adviser with a view to either establishing or allaying concerns about a perceived error.[30]
4. It follows that the applicant had an arguable case for the ground advanced by her in her application for review and that the Tribunal was empowered to review the decision of the respondent which relied upon the assessment of permanent impairment of Dr Hunter. In filing the application for review, the applicant had an arguable case that the Tribunal should exercise the power conferred to it under Part 8 of the RTW Act and refer the assessment of permanent impairment arising from tinnitus to an independent medical adviser.
5. It was appropriate that the applicant review her position when the second report was received. Until that time, the undisputed evidence was that both parties requested Dr Hunter to consider the two medical certificates. He failed to identify those certificates in the part of the first report that recorded the documents he had received and considered, and there was no reference to the content of these certificates in the reasoning for not allowing any additional binaural hearing loss for the tinnitus experienced by the applicant. I do not accept the submission of the respondent that its letter dated 6 December 2024 had confirmed that Dr Hunter had received the 2 medical certificates. At best, it sought to confirm the certificates had been provided to PIA Reporting. That Dr Hunter had seen the certificates had not been confirmed in evidence to the Tribunal until Dr Hunter provided the second report.
6. Both parties advanced submissions in relation to the possible relevance of the evidence received by the Tribunal in Van Loggem from Dr Corlette as to the practice he and PIA Reporting adopted in relation to reports sent out under the name of Dr Corlette. I accept the submission of the respondent that is not evidence of the practice adopted by Dr Hunter with PIA Reporting. However, I also accept the submission of the applicant that given the combination of the evidence given by Dr Corlette in Van Loggem to the effect that medical reports were initially prepared by others within PIA Reporting, reviewed by Dr Corlette and then issued by PIA Reporting with an electronic signature of Dr Corlette affixed by others, and the absence of confirmation in the first report that Dr Hunter himself had considered the two medical certificates provided by the respondent to PIA Reporting reasonably gave rise to further enquiry as to whether the certificates had been received and considered by Dr Hunter.
7. The significance of the second report is not confined to the confirmation that Dr Hunter had considered the medical certificates at the time of the preparation of the first report. In South Australia Police v Morris[31] the Full Bench held it is permissible for the parties, after receiving a permanent impairment assessment report, to obtain a clarifying report or reports from the assessor. The Full Bench also held that the Tribunal is empowered to obtain further evidence orally at a hearing so that deficiencies or ambiguity in a report may be addressed.
8. In reviewing her position after receiving the second report of Dr Hunter, the applicant also would have reasonably taken into account the potential application of s 106(7) of the RTW Act if, upon receiving further evidence from Dr Hunter at a hearing, the Tribunal determined to confirm the decision under review. I generally accept the submissions of the applicant as to the construction of s 106(7) of the RTW Act and its application in her circumstances.
9. The Court of Appeal in Sweeney stated that the provision is intended to encourage the resolution of disputes concerning permanent impairment compensation having regard to the scheme for the assessment for WPI and the potential entitlements under the RTW Act.[32] The Court observed that where no offer is made prior to a hearing then a worker will ordinarily be entitled to costs under s 106(1)(a), regardless of the outcome.[33] The Court then stated:

The introduction of s 106(7) may be seen as an encouragement to compensating authorities to make realistic offers, as well as an incentive to workers to accept them, if not a disincentive against rejecting them. Because the purpose of the rule is to encourage settlement, and to avoid the ordinary consequences of s 106(1)(a), the reference to "settle" should be viewed as carrying with it some notion of compromise.[34]

1. The Court went on to conclude that, in the circumstances of that case, an offer of nil compensation but payment of costs could invoke the operation of s 106(7) where the matter had proceeded to a hearing and, on its merits, the Court confirmed the decision of the respondent of nil compensation on the basis that the applicant had not proven a permanent impairment that reached the threshold of at least a 5% WPI. The Court held that the Full Bench of this Tribunal had erred in construing s 106(7) of the RTW Act as requiring that a positive amount had to be offered by way of lump sum compensation for non-economic loss before s 106(7) could operate.[35]
2. As stated by the Court, at paragraph 119, for s 106(7) to operate, the requirements include a hearing of the dispute in the Tribunal, an award made by the Tribunal following the hearing of that dispute, and that the award is "less than, or the same as, or less than 10% above" the amount that had been offered by the compensating authority. In this case, there has been no hearing of the dispute in the Tribunal and, consequently, there has been no award made by the Tribunal following the hearing of that dispute.
3. In considering whether the applicant has acted unreasonably in the conduct of the proceedings, the respondent urged the Tribunal to consider the offer of compromise that was made and contended to be within the principles described in Calderbank and subsequent cases.
4. A distinction is to be drawn between the approach to unreasonableness, when considering the application of the principles in Calderbank, in the context of s 106(7) of the RTW Act and unreasonableness for the purposes of s 106(3). In Sweeney, the Court stated that s 106(7) contains what amounts to a formula or range against which an offer is to be assessed, and a worker's failure to accept an offer within that range is treated by the provision effectively as being unreasonable and giving rise to a denial of costs to the worker.[36] That was expressed in the circumstances of that case, noting the Court's earlier statement that whether in some circumstances there may be a residual discretion to be exercised, was not argued.
5. In Wills v Chief Executive Officer of the Australia Skills Quality Authority (costs)[37] the Full Court of the Federal Court of Australia addressed the common law principles concerning the Calderbank offers and stated they are:

Designed to encourage parties to give careful consideration to reasonable offers of compromise and to encourage such offers of compromise to be made... The ultimate question is whether the failure to accept the offer in all of the circumstances warrants departure from the ordinary rules as to costs.[38] [emphasis added]

1. In this case the respondent relied upon the judgment in Calderbank and also the judgment in Hazeldene. In the latter case, the Court of Appeal affirmed the statement of principle expressed by Giles J.A. in SMEC Testing Services Pty Ltd v Campbelltown City Council[39] that the question to be asked is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rules as to costs.[40] That is the approach to be applied in determining whether, by reference to the offer made, there should be a departure from the ordinary order as to costs under s 106(1), in accordance with s 106(3) of the RTW Act.[41]
2. In this case, the relevant offer was made on 6 December 2024. I have referred to the deficiencies associated with the first report and the remaining issues following the second report. In determining whether the applicant acted unreasonably in not accepting the offer of the respondent, it is also relevant to have regard to the recommendation of Commissioner Byrt that a further report be obtained from Dr Hunter. The compulsory conciliation conference that was conducted by Commissioner Byrt was in accordance with s 104 of the RTW Act and s 43 of the South Australian Employment Tribunal Act 2014 (the SAET Act). Sub-section 43(13) of the SAET Act provides:

(13) If settlement of a matter is not reached at a compulsory conference, the member of the Tribunal presiding at the conference -

(a) must give to the parties an assessment of the merits of the party's case; and

(b) must seek to recommend ways to resolve any matter in dispute.

1. The text of s 43(13) indicates that, in the absence of an agreed outcome at a compulsory conciliation conference, the subsequent Assessment and Recommendations document is prepared with a view to assisting the parties in their evaluation of the merits of their respective cases and narrowing the continuing issues in dispute. It is relevant to an assessment of whether a claim is frivolous or vexatious if a commissioner, in an Assessment and Recommendations document indicates that there is merit in the claim being pursued. Further, it is relevant to an assessment of whether a party has acted unreasonably in the conduct of proceedings if the applicant is pursuing steps recommended by a commissioner to resolve a matter that is in dispute. These statements of principle are subject to developments that may occur following the referral to hearing and determination and which may affect a continued reliance upon the Assessment and Recommendations document. In this case, upon referral for hearing and determination and without knowledge of the recommendation by the Commissioner that the second report be obtained, I too raised the obtaining of the second report, and what it should address, as a matter of law, if one were to be obtained.
2. Following the receipt of the second report, the applicant did consent to an order confirming the decision that she is not entitled to a lump sum payment for non-economic loss pursuant to s 58 of the RTW Act for noise induced hearing loss and tinnitus. I reject the submission of the respondent that the consent of the applicant was an acknowledgment that her application for review was without merit. For the reasons given, even after the second report there was an arguable case for a referral to an independent medical adviser. However, the end result remained in doubt and the applicant reasonably reviewed her position. The respondent referred to the period of a few months between the receipt of the supplementary report of Dr Hunter and the consent orders being approved by the Tribunal. Much of that time was spent upon exchanges between the parties as to the appropriate order as to costs.
3. For the reasons given:
   1. I find that the requirements for the application of s 107(6) of the RTW Act have not been met.
   2. I find that the application for review and the applicant's conduct in the proceedings was neither frivolous nor vexatious.
   3. The respondent has failed to persuade me that the applicant acted unreasonably, either in bringing the proceedings before the Tribunal or in any other aspect of the conduct of the proceedings before the Tribunal.
4. Earlier in these Reasons I noted the respondent made an offer to the applicant on 8 July 2025 to pay a sum of $4,500 inclusive of GST and internal disbursements for the applicant's costs of the proceedings. Whilst that offer does not deprive the applicant of an order in accordance with s 106(1) of the RTW Act, it may be raised by the respondent in any adjudication of the quantum of the costs to be awarded to the applicant.

1. The applicant is entitled to an award against the respondent for her reasonable costs of representation in accordance with s 106(1) of the Return to Work Act 2014 with the quantum of such costs to be adjudicated by the Tribunal in default of agreement.

[1] [2019] HCA 25.

[5] See, for example, Malthouse v Return to Work SA (Teagle Contracting) (No2) [2017] SAET 14, [7] (Gilchrist DPJ); Perre v Local Government Workers Compensation Scheme (City of Unley) (No2) [2017] SAET 43, [28] (Calligeros DP); Moretta v Return to Work SA (Bendigo and Adelaide Bank) [2017] SAET 139, [8] (Gilchrist & Hannon DPJJ & Lieschke DP).

[6] [2025] SASCA 50 (Livesey P, S Doyle & Bleby JJA).

[9] The second medical certificate dated 28 May 2024 had not been raised at that directions hearing.

[10] Dr Hunter was not requested to set out his reasoning.

[11] Paragraph [2] of the respondent's outline of submissions on costs application. As s 106(6) of the RTW Act provides that an award of legal costs cannot exceed 85% of the amount that would be allowable under the Supreme Court scale if the proceedings were in the Supreme Court, the submission has been construed as a percentage less than 100% of what otherwise could be allowed noting the restriction in s106(6).

[12] (1975) 3 All ER 333.

[13] [2005] VSCA 298.

[14] Paragraph [13] of the respondent's outline of submissions on costs application.

[15] [2016] SAET 76, [54]-[58].

[16] [2025] SAET 24.

[17] [2025] SAET 47.

[20] HJ Heinz Company Australia Ltd and Anor v Kotzman & Ors (Kotzman) [2009] VSC 311 [24] (Kyrou J) (followed in Dallimore v Return to Work Corporation of South Australia [2020] SASCFC 115 [32] (Stanley J) (with whom Peek J and David AJ agreed)); Paschalis v Return to Work Corporation of South Australia & Anor [2021] SASCFC 44 [212] (Livesey & Bleby JJ).

[21] Kotzman supra [28] and reference to Mountain Pine Furniture Pty Ltd v Taylor [2007 ] VSCA 146; [2007] VSCA 146; (2007) 16 VR 659, 669 [33].

[22] [2013] HCA 43.

[26] Section 97(d) of the RTW Act provides that a decision as to a permanent impairment matter under Part 2 Division 5 is a reviewable decision. What may constitute a "permanent impairment matter" is defined in s 4 to include the degree of whole person impairment suffered by a worker.

[28] Abraham supra [55] and the cases there cited.

[29] [2021] SASCFC 44, [159], [184].

[30] Luke supra [112] (Gilchrist, Kelly & Crawley DPJJ).

[31] [2025] SAET 56.

[37] [2022] FCAFC 43.

[38] Ibid [22] (Logan, Griffiths, & Perry JJ).

[39] [2000] NSWCA 323 at [37].

[40] Hazeldene's Chicken Farm supra [20].

[41] See Envirogen Industrial Services (Aust) Pty Ltd v Return to Work Corporation of South Australia [2020] SAET 101, [53] (Rossi DPJ).