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% DESCRIPTION OF LEVEL OF IMPAIRMENT 0 X-ray changes but no loss of function of shoulder, elbow or wrist 5 Any ONE of the following: • x-ray changes with minimal loss of function of shoulder, elbow or wrist • ankylosis of any joint of fingers 4 and/or 5 10 Any ONE of the following: • loss of less than half normal range of movement of shoulder or elbow • loss of half normal range of movement of wrist • ankylosis of any joints of fingers 2 and/or 3 15 Any ONE of the following: • loss of more than half normal range of movement of wrist • ankylosis of any joints of thumb 20 Any ONE of the following: • loss of half normal range of movement of shoulder or elbow • ankylosis of wrist 30 Loss of more than half normal range of movement of shoulder or elbow 40 Ankylosis of shoulder or elbow.' (emphasis added) 18 A value of 10% level of whole person impairment was thus assigned by Table 9.1 in the event of 'loss of less than half normal range of movement of shoulder or elbow'. It may be accepted, having regard to the conditions for assigning a value of 5%, that the resulting loss of function needed to be more than minimal. In accordance with Table 9.1, therefore, a value of 10% whole person impairment would be assigned in the event of more than minimal loss of function up to at least loss of 49% of normal range of movement. The accommodation of such a large range within the value of 10% whole person impairment is potentially significant for the disposition of the present case. 19 An officer of Australia Post rejected Mrs Jordan's claim on 9 February 2006. In a letter to Mrs Jordan's solicitors, after reference was made to Dr Goldberg's reports, including matters which I have extracted above, it was said: 'All of the above confirm that while Mrs Jordan reported a level of pain symptoms post surgery her range of movement of the right shoulder is clearly at a normal level. Against the appropriate Table of the Comcare Guide, Table 9.1, there is clearly no evidence to suggest that your client's level of impairment reaches the required threshold. It is certainly unclear how your client's shoulder condition has altered from one of having normal movements in Dr Goldberg's report of 2/5/05 to one of limited range as at 2/2/06. This is against all the evidence of the reports post surgery and is contradictory to the opinion expressed.' 20 Mrs Jordan sought a review of the decision of 9 February 2006. In a letter dated 27 February 2006 the original decision was affirmed. The Reconsideration Officer said in her letter: 'The Compensation Claim for permanent Injury was submitted under cover of your letter dated 6 February 2006. Other than the Part C certificate, no further medical opinion was provided in support of the claim. The Part C certificate was completed by Dr Goldberg. He does not provide an assessment of impairment in percentage terms nor does he apparently make an assessment in accordance with the Guide to the Assessment of the Degree of Permanent Impairment. He indicates, as best I can interpret, that the extent of the impairment is pain and a reduced range of movement, but provides no description of any decrease in range of movement of the right shoulder such as to meet the requirement in section 24(7)(b) of 10 per cent whole person impairment. In the absence of any such evidence, I am of the opinion that Ms Jordan has not discharged the evidentiary onus to establish an entitlement to the payment of compensation pursuant to sections 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988.' 21 Mrs Jordan made an application to the Administrative Appeals Tribunal ('the AAT') for a review of the decision to refuse her claim. Her claim was put squarely on the basis that her impairment arose from the fact that pain caused by a work related injury restricted the normal range of movement of her right shoulder to an extent representing 10% whole person impairment. It is not suggested that such a circumstance would not qualify for compensation. 22 The AAT had a series of medical reports before it, including those to which I have referred. It took oral evidence from Mrs Jordan and two medical practitioners on 31 January 2007. One of the medical practitioners was Dr Maxwell who had made a further report dated 20 April 2006. The other was Dr Richard Evans who provided a report dated 14 February 2006. Dr Evans' report contained the following: 'The exact cause of the persisting shoulder pain is uncertain, but it is not surprising. It could arise from the damaged rotator cuff, from associated synovitis, from subacromial/subdeltoid bursitis, or from the damage to the glenoid labrum (the cartilaginous rim of the socket of the "ball and socket" shoulder joint). … PROGNOSIS: She is likely to continue to experience pain and impaired movement in the right shoulder. DISABILITY: The permanent whole person impairment of Mrs Jordan's right upper extremity is 10% (Table 9.1: "loss of less than half of normal range of movement of shoulder or elbow"). It has occurred as a result of the nature and conditions of her work with Australia Post between 1997 and 2001. I confirm that maximum medical improvement has occurred. I also confirm that the above disability is substantially a result of Mrs Jordan's employment with Australia Post.' (emphasis added) 23 It appeared during Dr Evans' evidence that his opinion was in part confirmed by ultrasounds taken on 19 September 1996, 14 October 1998 and 10 May 2001. He did not have the benefit of any ultrasounds taken after the operation performed in May 2004. He did not have a copy of the operation report nor any other reports by Dr Goldberg. He was asked: 'So you had no information about the results that the surgeon recorded post-operatively?---That's right.' 24 Dr Maxwell's written report included the following: 'Mrs Maree Jordan continues to complain of pain in her right shoulder. Since I last saw her she has had surgery in the form of an excision of chronic calcification of the rotator cuff which she states has had no effect on her symptoms. When I saw her prior to this surgery on the 12/2/2004 she only had 10° of loss of abduction and flexion and other movements were within normal range. After the operation on the 2/12/2004 Dr Goldberg states that she had excellent movement in her shoulder despite complaining of pain. When he examined her on the 2/5/2005 he stated in the 2nd paragraph of his letter that "her movements had returned to normal which was far better than the pre-operative period". When I tested her range of movements there was virtually no scapulothoracic movement on abduction and flexion indicating that her movement was all glenhumeral. This is unusual in patients with rotator cuff pathology as normally the glenhumeral movement is the most affected. I therefore consider it is doubtful that she was exerting maximum voluntary effort during my physical examination. She also seemed emotionally labile and had a hyperactive pain response. … In accordance with Table 9.1 she has 10% WPI as she has loss of less than half the normal range of movement of her shoulder … The WPI does relate to her right shoulder. As previously outlined I do not consider she has suffered a specific work related injury. I consider that she has a degenerative condition of calcification of the rotator cuff which may have been aggravated in the course of her work but her symptoms are now due to the underlying condition as she has not worked since 2001. Any impairment is also related to the underlying condition.' (emphasis added) 25 In his oral evidence Dr Maxwell said: 'You still accept that she satisfies something more than an insignificant range of movement related to her work condition, that's right, isn't it?---Yes I don't know that there's anything else I need to ask?---I'd actually changed my opinion and I felt that the calcification was a degenerative condition and I wasn't conceding that it was actually related to her work. I felt that it was aggravated by her work, but not caused by her work and therefore if she hadn't worked for four years that it was no longer aggravated by her work. It was due [to] the underlying calcification.' (emphasis added) 26 According, therefore, to Dr Maxwell's assessment the impairment which he identified was not, to any extent, the result of compensable injury. When he assigned a value of 10% WPI Dr Maxwell made no distinction between compensable and non-compensable injury. The Act and the Guide only contemplate and direct that a value will be assigned to the degree of permanent impairment arising from an 'injury'. In accordance with the view expressed by Dr Maxwell, that Mrs Jordan's impairment was due to an underlying condition and did not arise out of her employment, the percentage value which he should have assigned, in accordance with the principles in the Guide, was nil. 27 As will be seen, the AAT preferred Dr Maxwell's assessment to that of Dr Evans, although it did not adopt the whole of his conclusions. 28 Counsel for Mrs Jordan submitted that in light of Dr Maxwell's earlier conclusion, that the restriction on movement experienced by Mrs Jordan before her operation was attributable to 'the nature and conditions of her work' (see Dr Maxwell's report of 12 February 2004), it was not open as a matter of law for the AAT to accept any change of opinion by Dr Maxwell to the effect that Mrs Jordan's impairment in 2006 was now due only to an underlying condition and not to a work related 'injury'. He relied upon the judgments of Jenkinson J in Comcare v Amorebieta (1996) 66 FCR 83 ('Amorebieta') and Burchett J in Martin v Australian Postal Corporation [1999] FCA 655; 29 AAR 420 ('Martin'). However in my view neither of those decisions supports the proposition which was advanced. Showing that a work related aggravation of a pre-existing condition is a continuing aggravation is a necessary condition for a conclusion that it represents a work related compensable injury. As well as continuing, the effects of aggravation must also be permanent. 29 While Dr Maxwell did not appear to doubt that Mrs Jordon's ongoing pain resulted in loss of a significant range of movement, on his assessment any aggravation of Mrs Jordan's underlying condition, which resulted from the nature and conditions of her work, had been completely resolved. With the passage of time it was clear, in his view, that her symptoms were due entirely to the underlying condition and in no part to aggravation caused by her work. That was a question for medical assessment. Dr Maxwell certainly did not commit any error of law, nor did the AAT in relying upon his opinion. 30 Counsel for Australia Post contended, in opposing the appeal, that a relevant injury, to be compensable, must be wholly related to work. To the extent that the submission invokes the definition of 'injury' earlier set out and its associated effect on s 24 and the Guide, it is clearly correct. However, neither the Act nor the Guide exclude the possibility that some impairment might result from the combined effect of an underlying condition and a work related aggravation of that condition. In those circumstances it is, strictly speaking, only the work related aggravation which is compensable. The Guide directs that, 'where it is possible', the compensable effects of any work related aggravation should be isolated from the effects of the underlying condition for the purpose of assessing the degree of permanent impairment due to compensable effects. That may be easier said than done. If it is not possible the assessment made should operate beneficially to the claimant (see Martin at [29] to [30]). 31 In the critical passages in the AAT decision it said the following: '55. On balance, we prefer the assessment of Dr Maxwell that Mrs Jordan does experience 10% impairment, but that this is not simply attributable to a work related injury. She had full movement restored to the shoulder by the surgery in 2004 but has not maintained any improvement. As she has not worked since 2001, we favour Dr Maxwell's assessment that this suggests a degenerative condition rather than a continuing effect from the work injury or aggravation. We find further reassurance in taking this view from Dr Evans's oral evidence that the surgery he understood to have been performed normally would provide relief. Dr Evans's opinion was coloured by his knowledge being confined to what he told us at the hearing, that is, he knew the applicant had arthroscopic surgery and he had the information from her that it didn't help and that she had injections. He thought the injections from Dr Goldberg after the operation implied that the result wasn't a very good one. By comparison, this was not what Dr Goldberg believed. Dr Goldberg was pleased with the result of the surgery and observed improved range of movement. Unfortunately, Dr Evans did not have the benefit of Dr Goldberg's reports when forming his own opinion. 56. We find that Mrs Jordan's injury did benefit from the surgery in 2004 and that her impairment, while possibly being in the order of 10%, must be discounted when assessing the degree of impairment for compensation because it is partly attributable to a degenerative condition of calcification. It is necessary for the injury to result in 10% impairment before compensation is payable. See s 24(7). 57. It follows that we will affirm the decision under review.' (emphasis added) 32 In my view this approach reveals a misunderstanding of the statutory scheme and the legal effect of the direction contained in the Guide, by which the AAT was bound. It does not appear that the AAT embraced Dr Maxwell's final conclusion, although preferring his opinion to Dr Evans'. Had it done so it would have concluded there was nil impairment under Table 9.1. Rather, the AAT appeared to proceed by deduction. It concluded that Mrs Jordan's loss of range of movement was partly attributable to an underlying condition and that any attribution at all of Mrs Jordan's injury to a degenerative condition of calcification necessarily resulted in the extent of impairment dropping below 10%. However, it is not permissible to proceed upon any assumption that 'discounting' for the presence or contribution of an underlying condition necessarily resulted in whole person impairment of less than 10%. There are three reasons for that. The first is that any assigned value represents a final conclusion about whole person impairment arising from employment injury. It is not a starting point for further calculations. Secondly, the assigned value (in this case 10%) accommodates a wide range of loss of range of movement. Attribution of some loss to an underlying condition, unless it entirely explains the loss of range of movement, will in many cases not make the final assignment of a value any less valid. For example, if a 45% loss of range of shoulder movement was due, as to 20%, to an underlying condition, the remaining 25% attributable to work injury or aggravation would still represent, in accordance with Table 9.1 of the Guide, a 10% whole person impairment. The third reason is related to the last mentioned circumstance. The Guide directs that compensable effects be isolated 'where it is possible'. As already observed, where that is not possible no discount, to the disadvantage of a claimant, of the effects of a work related injury will be permissible. 33 The AAT accepted Dr Maxwell's assessment that Mrs Jordan had lost a significant range of movement. Unless it concluded that the loss of range was entirely due to an underlying condition in my view it was obliged to consider whether the effects of any work related injury could be isolated from the effects of the underlying condition so that an impairment value could be assigned directly to, and only to, the effects of the work related injury. 34 The approach taken by the AAT overlooks the necessity for appropriate isolating of compensable effects (where it is possible) before a value is assigned to the impairment. It is inconsistent with the legislative arrangements to discount after a value is assigned. The error is compounded when, as in the present case, a false starting point is chosen for the deduction process. The process adopted by the AAT could only result in rejection of the claim. That approach represented a failure to address the question for its attention - namely, what level of impairment was due to a work related injury? 35 The view which I take of the necessity to evaluate only compensable effects, and attribute a value for whole person impairment to them, appears to me to be consistent with observations made by Jenkinson J in Amorebieta where his Honour said (at 96): 'The inclusion of the phrase in s.24(5) ["resulting from an injury"] is explicable as a means of making clear that only impairment which results from harm suffered in compensable circumstances is to be the subject of determination. "Injury" is so defined as to require contribution to the harm by the employment or, in the case of an injury other than a disease or the aggravation of such an injury, to require that it arise "in the course of" the employment.' (emphasis added) 36 It is relevant to note also that Jenkinson J rejected the proposition (although in a different context) that the assignment of percentage values in tables in the Guide allowed some mathematically derived result rather than a direct assignation of value based upon a medical evaluation of the effects of compensable injury. His Honour said (at 99): 'It was a ground of appeal that the Tribunal had failed to recognise that on its proper construction Table 9.6 required that the loss of less than half normal range of movement of the thoraco-lumbar spine which would justify assessment of "whole person impairment" as 10 per cent was a loss of at least one third of the normal range of movement of the thoraco-lumbar spine. That construction was proposed because 10 per cent whole person impairment was one third of the 30 per cent whole person impairment shown by the Table to be appropriate in respect of complete loss of movement of the thoraco-lumbar spine. The explanation of the expression "whole person impairment" in the Guide Glossary (set out above at p 92) shows it to signify a "medical appraisal". Without expert medical evidence that the mathematical relationship suggested in submission accords with the processes of medical appraisal of whole person impairment the Tribunal would not in my opinion be free to accept the submission …' (emphasis added) 37 It follows from what I have said that, in my view, the AAT made errors of law in its assessment of Mrs Jordan's claim. 38 Counsel for Mrs Jordan also contended that the AAT had made an error of law by not providing sufficient reasons for its decision. Section 43(2) of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act') requires the AAT to give reasons for its decision. Section 43(2B) of the AAT Act provides: '(2B) Where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.' These requirements were referred to and explained by Burchett J in Martin at [18] and [19]. 39 Although it is clear that the reasons for decision of the AAT were based upon a preference for Dr Maxwell's opinion to that of Dr Evans, what is omitted from the AAT decision is any finding on the factual question concerning the assessment of the degree of permanent impairment suffered by Mrs Jordan as assigned by the Guide. As already discussed, the assumption that partial attribution of her loss of range of movement to a degenerative condition of calcification necessarily resulted in her failure to establish a 10% whole person impairment is unsound and not in accordance with the Act or the Guide. In circumstances where Dr Maxwell's assessment was not wholly embraced it was necessary for the AAT to make sufficient findings of fact to reach its own objectively sustainable conclusion as to what percentage degree of whole person impairment should be assigned in accordance with the Guide. A final result was not to be reached by a process of simple deduction. 40 Counsel for Australia Post sought to support the form of reasoning used by the AAT by reference to a decision of a Full Court in Carson v Comcare [2004] FCAFC 204 ('Carson'). In Carson the Full Court said at [55] and [56]: '55. Neither before the primary judge, nor on this appeal, did the appellant identify, let alone establish, any error of law in respect of the central findings by the second AAT. As the primary judge noted: 'The second AAT accepted that Dr Carson had a permanent impairment of 10 per cent, and that Dr Carson had some permanent impairment related to his workplace. The Tribunal regarded it as possible to "isolate the compensable effects" of the work-related injury on a pre-existing condition in this case. The tribunal was ultimately "satisfied that the applicant had a permanent impairment of 5 per cent prior to suffering his compensable injury at the DSTO. The Tribunal is thus bound to find that the permanent impairment suffered by the applicant is only 5%".' 56. As earlier indicated, the primary judge noted that "On appeal, the appellant did not seek to argue that the compensable effects could not be isolated and that his injury should be treated as an aggravation that was wholly compensable."' 41 In Carson the Full Court approved the findings of the primary judge that no error of law had been demonstrated. It is important to note, however, that the argument for the appellant in that case was that there was no pre-existing disorder/impairment, with the result that there was no foundation for suggesting that Dr Carson suffered less than 10% whole person impairment as a result of a work injury. That contention was not accepted as raising any question of law. No occasion arose, as I read the judgment, to analyse the approach taken by the AAT of deducting from a 10% whole person impairment, assigned by the Guide, an amount of 5% whole person impairment found to be due to a pre-existing condition, with the result that less than 10% remained. 42 Such an approach does not, with respect, appear to me, in any event, to have been in accordance with the Guide. Table 5.1 of the Guide (which was relevant to Dr Carson) provided the following indicia for the assessment of psychiatric conditions: '5 Despite the presence of ONE of the following is capable of performing activities of daily living without supervision or assistance. • reactions to stressors of daily living with minor loss of personal or social efficiency • lack of conscience directed behaviour without harm to community or self • minor distortions of thinking 10 Despite the presence of MORE THAN ONE of the following is capable of performing activities of daily living without supervision or assistance. • reactions to stressors of daily living with minor loss of personal or social efficiency • lack of conscience directed behaviour without harm to community or self • minor distortions of thinking.' 43 It certainly seems possible that two of the three indicia of impairment might be found to be present as a result of employment injury notwithstanding that the third indicia was already present as a result of a pre-existing condition. As I read the Guide an assessment of 10% whole person impairment should still be made in such a case. 44 What is required is the assignment of a value in accordance with the Guide as a response to the assessment of work related injury. It is an error to approach the matter by attempting to assign an overall level of impairment regardless of its cause and then deduct some amount for pre-existing injury. If a value is attributed in accordance with the Guide having regard, only (as the Guide itself suggests) to work related injury no occasion will arise to embark upon the discounting exercise which was employed in the present case. 45 In my view the AAT failed, as directed by s 43(2B) of the AAT Act to make material findings of fact. It failed to identify whether it was possible to isolate to what extent Mrs Jordan's loss of range of movement was attributable to a work related injury rather than a degenerative process of calcification and, were it possible to do so, to assess those effects. It failed to assign a percentage value for whole person impairment in accordance with the Guide and as required by s 24(5) of the Act. 46 In my view, therefore, the AAT committed a number of errors of law. It did not, as required by s 24(5) of the Act, determine the degree of Mrs Jordan's impairment resulting from work related injury. It did not approach its task in accordance with the Guide. It did not give adequate reasons for its decision that Mrs Jordan's claims for compensation should be rejected. 47 The Court is not in a position where it could substitute any view of its own for assessments which are entrusted under the Act and under the Guide to the relevant authorities and to the AAT. 48 The appropriate course is to set aside the decision of the AAT and remit the matter to the AAT for further consideration. 49 The whole of the matter will be remitted. It will be within the discretion of the AAT whether further evidence is taken (see s 44(5)) of the AAT Act and Peacock v Repatriation Commission (2007) 161 FCR 256 at [24]-[26]). I was asked by the appellant to direct that the AAT be reconstituted. I will not do so. I see no reason to intrude upon the discretion of the President of the AAT (see s 20B of the AAT Act). 50 The appellant sought her costs if successful. No submissions to the contrary were advanced. I can see no reason why costs should not follow the result of the appeal. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.