21 May 2008
MAHENTHIRARASA v STATE RAIL AUTHORITY OF NEW SOUTH WALES & ORS
Judgment
1 GILES JA: The proper contradictor in the application for leave to appeal and appeal was the State Rail Authority of New South Wales ("the SRA"). As Basten JA has explained, it chose to enter a submitting appearance before the primary judge and in this Court. Despite the assistance from the submissions of counsel for the applicant, in the absence of a contradictor I confine my reasons to those strictly necessary for disposal of the application and appeal. In doing so I gratefully draw upon the reasons of Basten JA.
2 The question for the primary judge was whether there was jurisdictional error or error on the face of the record in the determination of the Registrar's delegate, made pursuant to s 327(4) of the Workplace Injury Management and Workers Compensation Act 1998, that it did not appear that at least one of the grounds for appeal specified in s 327(3) "exists". The applicant had relevantly asserted the grounds that the assessment of the approved medical specialist was made on the basis of incorrect criteria and that the medical assessment certificate contained a demonstrable error. The delegate held that neither ground existed.
3 What was meant by "exists" in s 327(4), which has since been amended to use the phrase "has been made out", has been referred to in this Court in Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372; Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission [2007] NSWCA 149; (2007) 4 DDCR 607; and Pitsonis v Registrar of the Workers Compensation Commission [2008] NSWCA 88. In Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission Campbell JA, with whom Hodgson JA and Handley AJA agreed, adopted at [75] the explanation put forward by Handley JA in Campbelltown City Council v Vegan at [8] that a ground for appeal existed if it was "on its face, valid and apparently credible". His Honour added at [76] the further explanation that a ground of appeal could exist if it was a contention relied on as a reason why the appeal should succeed "made in circumstances where there is a sufficiently realistic prospect of the ground being made out", and that the Registrar had to form a view whether the ground "has enough substance to warrant the appeal proceeding". Campbell JA's explanation was adopted by Mason P, with whom McColl and Bell JJA agreed, in Pitsonis v Registrar of the Workers Compensation Commission of New South Wales at [20].
4 The further explanation by Campbell JA may not be entirely congruent with that of Handley AJA, and may be thought to have some circularity. Perhaps the meaning of "exists" in s 327(4) as it previously stood will call for further consideration, but as Campbell JA said at [76] it is not the same as the ground for appeal being "made out". It is less than that.
5 In the present case the ground for appeal of demonstrable error existed. That is so because, as recounted by Basten JA, there was plain inconsistency within the medical assessment certificate. The approved medical specialist assessed 20 per cent impairment for the left leg at or above the knee and an 11 per cent whole person impairment. These percentages could differ, because the subject matters were different. But the approved medical specialist attributed much more of the whole person impairment to pre-existing injury than he attributed the impairment for the left leg at or above the knee to pre-existing injury. For the same pre-existing injury, this could not be right; or at the least, there was a strong argument that it was not right. The error was asserted in the grounds falling for the delegate's determination, and was plain from the medical assessment certificate. On any reasonable view of demonstrability and within any view of existence as explained in the cases to which I have referred, demonstrable error existed.
6 The delegate simply asserted that it did not appear that the assessment was made on the basis of incorrect criteria or that the medical assessment certificate contained a demonstrable error. In such explanation as was given in the delegate's reasons there was no mention of error through inconsistency within the medical assessment certificate, notwithstanding that it had been described and relied on in the grounds for appeal. On the contrary, the delegate said that nothing on the face of the record of the medical assessment certificate indicated that the findings made by the approved medical specialist "amounts to the use of an incorrect criteria [sic] or demonstrable error". It should be concluded that the delegate failed to address the ground for appeal of demonstrable error on which the applicant relied, and in not exercising the function as required of the Registrar under s 327(4) fell into jurisdictional error.
7 The primary judge referred to Campbelltown City Council v Vegan, but from his [20] appears to have considered that the test for whether one of the grounds for appeal existed was whether it had been made out. With the benefit of the later decisions of this Court, that can not be sustained. His Honour said that even on the test propounded by the applicant, one put in various ways such as whether the ground was arguable or there was a serious issue to be tried, the applicant should fail. Having dealt with other matters, his Honour referred to the submission that the delegate had failed to find a demonstrable error or an arguable case of demonstrable error in the respect described earlier in these reasons. He said -
"27 The further argument was not developed and it seemed to me to be but faintly pressed at the hearing. In my view, the plaintiff failed to make out this argument. Further, there was a failure to persuade that what was done could constitute "demonstrable error" in the contents of the certificate. It may be added that even if a different view was taken on these matters, it was not shown that the ground had any real significance in relation to the assessment."
8 Although it may not have been developed, I respectfully consider that the submission commanded acceptance, and that there was error in failing to grant the relief claimed by the applicant.
9 As appears from the reasons of Basten JA, the applicant's recovery of costs is problematic. I agree that he should have leave enabling him to pursue recovery of his costs against the SRA, but any application will be at his own risk as to the costs of the application. I agree with the orders proposed by Basten JA.
10 BASTEN JA: Mr Arumugam Mahenthirarasa ("the applicant") was, in August 2001, an employee of the State Rail Authority of NSW ("the SRA"). He fell, injuring his back and left leg, as a result of which he received compensation until a date in May 2003. Thereafter the employer considered that he was able to perform his pre-injury duties and compensation ceased. A dispute was notified to the Workers Compensation Commission in September 2004 and was referred to an arbitrator. A medical assessment of permanent impairment was undertaken by an approved medical specialist, Dr Robert Breit, who in or about March 2005, issued a certificate under s 325 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the Workplace Injury Act"). The applicant was dissatisfied with the certificate.
11 Section 327(1) of the Workplace Injury Act provides that a party to a medical dispute "may appeal against a medical assessment under this Part, but only in respect of a matter that is appealable under this section and only on the grounds for appeal under this section": s 327. The grounds are set out in s 327(3) and include deterioration of the worker's condition (par (a)) and the availability of additional relevant information (par (b)). These grounds appear not to have been relied upon. The other grounds, set out in paragraphs (c) and (d), are that the assessment was made on the basis of "incorrect criteria" and that the medical assessment certificate contains a "demonstrable error".
12 The appeal is made by application to the Registrar: s 327(4). In July 2005, when the Registrar considered the application, s 327(4) further provided:
"The appeal is not to proceed unless it appears to the Registrar that at least one of the grounds for appeal specified in subsection (3) exists."
13 Section 327(4) has been amended since the Registrar exercised his power in the present matter. As from 1 November 2006 the section no longer requires that it appear to the Registrar that at least one of the grounds exists, but now provides that the appeal is not to 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 specified in subsection (3) has been made out".
14 Although other steps may be taken, the general procedure on appeal is that an Appeal Panel constituted by two approved medical specialists and an arbitrator is established by the Registrar and that body then reviews the original medical assessment: s 328(1) and (2). In the present case, a delegate of the Registrar determined that the appeal should not proceed because he was not satisfied that any of the specified grounds 'existed'. The applicant sought to review that determination in the Court.
Grounds of review
15 The grounds relied upon before the primary judge (Malpass AsJ) were not originally stated with great precision. However, an amended summons, filed after the hearing, included a sole ground alleging that the Registrar had "asked the wrong question, that error going to jurisdiction … or erred in law, that error being apparent on the face of the record": see Mahenthirarasa v State Rail Authority of New South Wales [2007] NSWSC 22 at [16]. That ground was particularised by reference to two matters. First, it was said that the Registrar erred in asking whether the grounds relied upon to challenge the certificate were "made out" rather than whether they established a serious issue to be tried. Secondly, it was said that the Registrar failed to take into account a relevant consideration, namely whether the medical specialist had "demonstrably erred" or "applied incorrect criteria" in making inconsistent deductions for pre-existing injury in different parts of the certificate.
16 One other matter should be noted in relation to the proceedings below. The summons commencing proceedings in the Common Law Division named the SRA as the first defendant, the Registrar as the second defendant and the medical specialist as the third defendant. The third defendant was apparently included because an order was sought quashing the certificate provided by him. That relief appears not to have been pressed before the primary judge. Although an order quashing the certificate was sought in the draft notice of appeal, no grounds were included in support of that order and it would not be appropriate in any event to make it. The role of the third defendant (and third respondent) can therefore be put to one side.
17 The Registrar was presumably joined as the officer responsible for the decision under review. If so, the assumption was not strictly correct as the decision was that of a delegate of the Registrar. In any event, the Registrar also filed a submitting appearance, both in the Common Law Division and on the appeal.
18 The first respondent below and in this Court was the SRA. It was the employer of the applicant and was the party responsible for paying compensation. It also filed a submitting appearance, a position which was confirmed in writing after the hearing in this Court.
19 As a result, the relief sought in the summons was unopposed. Similarly, the relief sought on the application for leave to appeal and the appeal were also unopposed. Despite those circumstances, the applicant was apparently required to argue his case before the primary judge and, indeed, failed to obtain the relevant relief on the uncontested application. For reasons explained below, the primary judge was in error, even if it were appropriate to consider the merits of the application. As a result, the applicant is entitled to the relief sought, setting aside the decision of the delegate of the Registrar. The fact that the decision was not contested, however, has led to a circumstance where no party is willing to pay the applicant's costs properly incurred for the purpose of obtaining an order to which he was entitled. In a system where costs follow the event, the result that the applicant is unable to obtain an order for costs would appear to be anomalous.
Background to dispute
20 In order to understand the nature of these challenges, it is necessary to consider the content of the certificate of permanent impairment issued by Dr Breit pursuant to a request dated 8 December 2004. The applicant was examined by Dr Breit on 21 February 2005 and the certificate, apparently not dated, bears a facsimile transmission date at the top of each page of 24 March 2005. (Nothing turns on it, but it seems unlikely that the certificate was issued on 4 April 2005, as the primary judge stated.) The medical certificate was issued pursuant to s 325 of the Workplace Injury Act, which provided as follows:
" 325 Medical assessment certificate
(1) The approved medical specialist to whom a medical dispute is referred is to give a certificate (a medical assessment certificate ) as to the matters referred for assessment.
(2) A medical assessment certificate is to be in a form approved by the Registrar and is to:
(a) set out details of the matters referred for assessment, and
(b) certify as to the approved medical specialist's assessment with respect to those matters, and
(c) set out the approved medical specialist's reasons for that assessment, and
(d) set out the facts on which that assessment is based."
21 The injury to the applicant occurred on 30 August 2001, at his place of work. The claims made related to a degree of impairment of the back, left knee and right knee. The certificate recorded that the matters referred involved an "impairment dispute" and a "threshold dispute". This dual characterisation flowed from the fact that the injury occurred prior to the commencement, on 1 January 2002, of Part 7 of Chapter 7 of the Workplace Injury Act, pursuant to which the procedure was established involving the use of approved medical specialists. It is not necessary for present purposes to consider how the transitional provisions operated in the present case.
22 At pages 12-13 of the certificate, the medical specialist gave reasons for his assessment of the percentage of permanent impairment. He stated first:
"Prior to the first surgery on the left knee the MRI showed a chronic tear of the anterior cruciate which was not caused by the fall. There was also evidence of chronic articular damage. The most likely sequence of events is that the knee gave way because of the anterior cruciate deficiency resulting in a blow to the front of the knee and a tear of the medial meniscus as well as a more minor tear of the lateral meniscus. This is an aggravation and acceleration of a pre-existing condition."
23 Curiously, at page 13, he set out his assessment of whole person impairment by reference to "the right knee". In the tables at the end of the reasons, impairments were noted in each case in relation to the left knee. The error on page 13, where the relevant percentages are first set out, might have been identified as an "obvious error" but nothing was said to turn on it for the purposes of the appeal.
24 The primary point of complaint was that, although the tests for the two forms of assessment under s 68A of the Workers Compensation Act 1987 (NSW) and s 323 of the Workplace Injury Act were substantially identical, the results provided in the two tables differed significantly. Thus, in the table for injuries received before 1 January 2002, the total percentage of impairment identified for the left leg at or above the knee was 20%, the proportionate loss due to pre-existing injury, abnormality or condition, assessed under s 68A, was 75%. This gave a total percentage of permanent loss attributable to the injury at 5%. The medical specialist stated at page 13, in referring to the threshold assessment:
"The reasoning for my assessment is the same as for the Table of Disabilities, that is, in my opinion there is no work related impairment associated with either the left knee or the lumbar spine."
25 As already noted, that was a direct contradiction of all that had been said on the previous page as to which knee was injured. But the percentages which were then assessed, and set out in the second table in relation to the "left lower extremity", constituted a total whole person impairment of 11% and an apportionment under s 323 for the pre-existing injury at 10/11ths. This gave a percentage attributable to the injury as 1%, or one-fifth of that identified in the previous table according to what the medical specialist himself described as the same assessment.
26 In his grounds of appeal in the Workers Compensation Commission, the applicant identified a number of errors. The error presently under consideration was identified in express terms at paragraph 10:
"Likewise, the AMS deduction with regard to the left lower extremity under AMA5 of 10/11ths was plainly wrong. The relevant criterion under section 323 of the 1998 Act is essentially the same as section 68A. The finding under section 68A of ¾ and the finding under section 323 of 10/11ths with regard to the same body part is a clear demonstrable error. The two different findings with regard to virtually the same criterion are inconsistent."
27 The SRA filed a response in the Commission which did not expressly address this complaint. So far as percentages were concerned, it quoted from a report of Dr Perla, dated 18 November 2002, expressing the opinion that "the striking of the left knee had probably aggravated a pre-existing problem, such that 50% of his condition was attributable to the work related incident, with the remaining 50% attributable to a pre-existing condition". It also referred to a report of Dr Bornstein dated 27 April 2004, which included the opinion that the applicant had "suffered from a 5% permanent loss of use of the left leg, which was likely work related". For what it was worth, this material supported the applicant's contention that there must have been error in the table finding a work-related impairment of 1% only.
28 On 14 July 2005 a decision was made by a delegate of the Registrar, pursuant to s 327(4) of the Workplace Injury Act.
Review of delegate's determination
29 The Registrar's delegate gave reasons and no complaint is made about their inadequacy. So far as they are presently relevant, they are brief and conclusory. Thus the delegate stated:
"[4] After consideration of the submissions received from the Appellant and the Respondent, it does not appear that the assessment was made on the basis of incorrect criteria or that the medical assessment certificate contains a demonstrable error.
…
[9] Hence, there is nothing on the face of the record of the medical assessment certificate that indicates that the findings made by the AMS on the basis of information and material provided to the AMS, and also clinical observation, amounts to the use of an incorrect criteria [sic] or demonstrable error.
[10] Accordingly, as it does not appear to the Registrar that at least one of the grounds of the appeal exist, the appeal should not proceed and the matter is referred back to the Arbitrator for any outstanding issues to be resolved."
30 If the delegate were required to give reasons in the exercise of a judicial function (which as discussed below he is not), these would not suffice. Nevertheless, they provide support for the proposition that the unexplained inconsistencies, which exist in the certificate, were simply not addressed.
31 The applicant sought to review this decision, the application being heard by Malpass AsJ. His Honour dismissed the application. At [6], his Honour set out the submission in paragraph 10 of the applicant's submissions, which has been set out above at [26]. He then addressed the relevant criteria to be applied by the Registrar concluding, following his own earlier decision of Wikaira v Registrar of the Workers Compensation Commission of NSW [2005] NSWSC 954, that the Registrar was required to be satisfied that at least one of the grounds "has been 'made out'": at [13]. For reasons noted below this approach was in error. His Honour also took the view that, even if the Registrar need only be satisfied that one ground was arguable to let the appeal proceed, the application for review would nevertheless fail: at [21]. His Honour said, no doubt correctly, that the reasons of the delegate did not disclose what test was applied. But it does not follow from that conclusion that no error can be demonstrated. His Honour's failure to consider further the possibility of legal error was itself erroneous.
32 As was explained by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360, the fact that it was for the Commissioner, not the Court, to be satisfied of a particular matter, did not render the Commissioner's decision unexaminable. As his Honour noted:
"If he does not address himself to the question which the sub-section formulates, if his conclusion is affected by some mistake of law, if he takes some extraneous reason into consideration or excludes from consideration some factor which should affect his determination, on any of these grounds his conclusion is liable to review."
33 Relevantly for present purposes, Dixon J continued:
"Moreover, the fact that he has not made known the reasons why he was not satisfied will not prevent the review of his decision. The conclusion he has reached may, on a full consideration of the material that was before him, be capable of explanation only on the ground of some such misconception. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law."
34 His Honour referred to what he characterised as a "further argument" which relied upon demonstrable error in the certificate, resulting from the disparate application of s 68A and s 323: at [25]. The submission stated:
"That is because of the logical inconsistency between the deduction for pre-existing condition under section 68A of the old Act, using table 1, and the deduction for pre-existing condition under section 323 of the WIM Act, using table 2, in relation to precisely the same injury…."
35 The primary judge said that this ground was not developed, although it appears to have been identical to the second particular identified in the amended summons. It is not self-evident that further development was required: on its face it showed that a demonstrable error existed without additional explanation.
36 Having concluded that there was no error, his Honour indicated that had he been satisfied otherwise he would have declined to grant relief in the exercise of his discretion because relief would have been "a futility": at [23]. It may be inferred that the "futility" of relief was not fully explored at the hearing and his Honour's conclusion should not lead this Court to decline relief, if satisfied that his Honour erred on the primary issue: see King v Goussetis (1986) 5 NSWLR 89 at 94 (McHugh JA, Kirby P and Hope JA agreeing) applying Wade v Burns (1966) 115 CLR 537; Canham v Australian Guarantee Corporation Ltd (1993) 31 NSWLR 246 at 263 (Kirby P, Priestley and Meagher JJA agreeing).
37 The primary judge added, apparently as an additional reason, that he was not satisfied that "what was done could constitute 'demonstrable error' in the contents of the certificate": at [27]. He stated at [29]:
"In Merza v Registrar of the Workers Compensation Commission [2006] NSWSC 939, Hoeben J said that it was sufficient for the purposes of determining that case to conclude that such an error is an error that is readily apparent from an examination of the medical assessment certificate and the document referring the matter for assessment. He also observed that error alone was not sufficient. The second reading speech contains the following concerning 'demonstrable error':
'A demonstrable error would essentially be an error for which there is no information or material to support the finding made - rather than a difference of opinion.'"
38 Finally, albeit as something of an unresolved comment, the primary judge also stated at [27]:
"It may be added that even if a different view was taken on these matters, it was not shown that the ground had any real significance in relation to the assessment."
39 This final comment may have been intended to indicate that it did not matter whether the applicant's degree of impairment was 1% or 5%. The medical specialist was asked to do no more than assess the degree of whole person impairment. It should be assumed that each of the specific findings in the certificate, made in accordance with the matters referred, should be treated as material unless demonstrated otherwise. No party sought to demonstrate otherwise. Accordingly materiality should be assumed.
Nature of Registrar's function
40 The relevant form of s 327(4) was referred to by this Court in Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372 at [8], [76] and [80]. That case was not directly concerned with the decision of the Registrar under s 327(4), the matter having been considered by an Appeal Panel. Rather, it was concerned with the validity of the decision of the Appeal Panel, and the adequacy of the reasons provided by the Panel. The decision in Campbelltown City Council concerned steps taken in 2003 and, in the course of giving reasons, both Handley JA and I expressed views as to the function of the Registrar under s 327(4), as then in force.
41 Handley JA stated at [8]:
"An appeal does not proceed to an Appeal Panel unless it appears to the Registrar that at least one of the grounds for appeal 'exists', which I take to mean that the ground is, on its face, valid and apparently credible (s 327(5))."