WORKERS COMPENSATION - Workplace Injury Management and Workers Compensation Act 1998; review of Medical Assessment Certificate (MAC); review of assessment of permanent impairment following total knee replacement; previous meniscectomy followed by several years of strenuous work; deterioration following a change in work duties; Medical Assessor allowed four-tenths deduction under section 323 which was excessive; Cole v Wenaline Pty Ltd, Ryder v Sundance Bakehouse, and Southwell v Qantas Airways Limited considered; section 323(2) applied; Held - MAC revoked.

1. On 16 June 2025 Anthony Manera lodged an Application to Appeal Against the Decision of a Medical Assessor. The medical dispute was assessed by Medical Assessor David Gorman, who issued a Medical Assessment Certificate (MAC) on 19 May 2025.
2. Mr Manera relies on the grounds of appeal under s 327(3)(c) and (d) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act):
   • the assessment was made on the basis of incorrect criteria, and
   • the MAC contains a demonstrable error.
3. The President's delegate was satisfied that, on the face of the application, at least one ground of appeal was made out, being that in s 327(3)(d) with respect to the assessment of scarring. We conducted a review of the original medical assessment, limited to the grounds of appeal on which the appeal is made.
4. Rule 128 of the Personal Injury Commission Rules 2021 (the PIC Rules) and Procedural Direction PIC7 - Appeals, reviews, reconsiderations and correction of obvious errors in medical disputes set out the practice and procedure in relation to the medical appeal process under s 328 of the 1998 Act. An Appeal Panel determines its own procedures in accordance with r 128(1) of the PIC Rules.
5. The assessment of permanent impairment is conducted in accordance with the SIRA NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment, 4th ed 1 March 2021 (the Guidelines) and the American Medical Association Guides to the Evaluation of Permanent Impairment, 5th ed (AMA 5).

1. Mr Manera was employed as a forklift driver by Diversey Australia Pty Ltd (Diversey). He claimed compensation as a result of an injury to his left knee as a result of the nature and conditions of his employment, which required him to step up onto the forklift.
2. Mr Manera underwent a left total knee replacement on 26 May 2021.
3. On 2 July 2021, a Member of the Personal Injury Commission determined[1] that Mr Manera had suffered an injury to his left knee, being the aggravation of a disease to which employment was the main contributing factor. The Member determined that the left total knee replacement surgery was reasonably necessary medical treatment as a result of the injury.
4. The Medical Assessor was asked to assess Mr Manera's whole person impairment (WPI) in respect of his left lower extremity (knee) and scarring. He assessed 20% WPI in respect of Mr Manera's left knee and deducted four-tenths under s 323 of the 1998 Act, to reach 12% WPI. He assessed 1% for scarring under the Table for the Evaluation of Minor Skin Impairments (TEMSKI). The total assessment was 13% WPI.

1. We conducted a preliminary review of the original medical assessment in the absence of the parties and in accordance with the Procedural Direction PIC7.
2. As a result of that preliminary review, we determined that it was not necessary for Mr Manera to undergo a further medical examination because there is sufficient information in the file to determine the appeal.

1. We have all the documents that were sent to the Medical Assessor for the original medical assessment and have taken them into account in making this determination.
2. The parts of the MAC that are relevant to the appeal are set out below.

1. Both parties made written submissions. They are not repeated in full, but we have considered them.
2. In summary and in submissions prepared by Mr Morgan of counsel, Mr Manera submitted that the Medical Assessor incorrectly applied s 323 of the 1998 Act and the Guidelines.
3. Mr Manera noted that the Medical Assessor recorded that he had made a claim in respect of his left knee in previous employment in 2002 and had returned to pre-injury duties in around late 2003. The Medical Assessor did not refer to radiology other than an X-ray dated 17 December 2004. Mr Manera referred to some of the evidence in the file.
4. With respect to s 323, Mr Manera submitted that the Medical Assessor took an inappropriate approach when he simply referred to a previous partial meniscectomy in 2002 which "would have" led to degenerative change, reinforced by the 2004 X-ray. After setting out some of the authorities with respect to s 323, Mr Manera said that there was little evidence of a prior, symptomatic condition. He said that there should be no deduction under s 323. He said that the "default" deduction of one-tenth should be applied.
5. Turning to scarring, Mr Manera submitted, by reference to the evidence in his statement, that the scarring warranted an assessment of 2% WPI.
6. In reply, Diversey submitted that there was no demonstrable error in the MAC. Diversey submitted that there was support in the file in the reports of Dr Powell, whom it retained, for the deduction that the Medical Assessor made. Diversey also noted that Mr Manera's general practitioner, Dr Liang, commented that an X-ray on 20 August 2020 showed extensive osteoarthritic change as did his treating surgeon Dr Khatib. It said that a mere disagreement about the level of impairment was not sufficient to demonstrate error.
7. Diversey referred to paragraph 14.6 of the Guidelines and said that the scar was consistent with the surgery undertaken. It submitted that the MAC should be confirmed.

1. The procedures on appeal are contained in s 328 of the 1998 Act. The appeal is by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made.
2. In Campbelltown City Council v Vegan[2] the Court of Appeal held that an Appeal Panel is obliged to give reasons. Where there are disputes of fact it may be necessary to refer to evidence or other material on which findings are based, but the extent to which this is necessary will vary from case to case. Where more than one conclusion is open, it will be necessary to explain why one conclusion is preferred. On the other hand, the reasons need not be extensive or provide a detailed explanation of the criteria applied by the medical professionals in reaching a professional judgement.
3. In Queanbeyan Racing Club Ltd v Burton[3] the Court of Appeal held that an Appeal Panel is not limited to the ground held to have been made out by the delegate but may consider all grounds of appeal raised in the application. However, the panel is not permitted to look for errors which are not part of the grounds of appeal on which the appeal is made. We have only considered those grounds specifically raised by the appeal.

1. We note that the MAC is concise. The Medical Assessor described Mr Manera's surgery and claims with respect to his right knee and the previous claim in respect of his left knee. He said:

"Mr Manera said he made a previous workers compensation claim on 17 October 2002 when he had a slip on a wet floor and injured his left knee. He was working for Australian Correctional Management as a Detention Officer. Mr Manera underwent arthroscopic surgery to the left knee to repair his meniscus and had time off before returning to work. Mr Manera returned to pre-injury duties in around late 2003.

Mr Manera said he had not had any major issues with his left knee other than some stiffness from time to time until the current injury."

1. The Medical Assessor noted that Mr Manera related his injury to the nature and conditions of his employment, stepping onto his forklift and that he found that more difficult when the forklifts were replaced by new vehicles with a higher step. Mr Manera suffered gradually increased symptoms from 2020.
2. The only investigation on which the Medical Assessor commented was:

"Left knee X ray 17 December 2004 medial joint space loss."

1. Consistent with the other assessments in the file, the Medical Assessor rated Mr Manera's left knee replacement as a fair result under Table 17-35 of AMA 5, resulting in 20% WPI.
2. With respect to scarring the Medical Assessor said:

"Scarring is considered with reference to TEMSKI, where the surgical scarring is consistent with the expected outcome of the procedure undertaken without any complicating features. It is well healed, just visible but with no suture marks and no adherence. It is less obvious than the right knee scar which is erythematous and raised. The left knee scar is Category 2, with 1% whole person impairment."

1. The Medical Assessor commented on the reports of Dr Powell, who examined Mr Manera at the request of Diversey, and Dr Guirgis, who saw him at the request of his solicitors. He said:

"I noted the assessments of Dr Richard Powell (Orthopaedic Surgeon). I agree that this is a 'fair result'. Dr Powell subtracted 5/10 for his pre-existing knee complaints. I felt that the deduction should be somewhat less at 4/10 - he had been working without significant complaints since returning to work in 2003 after the left knee arthroscopy.

I reviewed the report of Dr Medhat Guirgis dated 4 September 2024. He also assessed a 'fair result'. However, he considered that the underlying arthritis from an arthroscopy in 2002 would have not significantly affected his current impairment. He therefore only deducted 1/10 for pre-existing impairment. I disagree and believe that the previous injury would have contributed to accelerated osteoarthritis, particularly combined with his obesity. I note that the X ray as far back as 2004 showed medial joint space loss. I therefore subtracted 4/10. I also do not believe the scarring is 4% WPI. It is well healed and less obvious that the scarring from the right total knee replacement."

1. Turning specifically to s 323, the Medical Assessor said:

"There is a significant history outlined above of left knee complaints, including surgery. There would have been the development of osteoarthritis after the previous surgery particularly with his obesity. This made him prone to develop an aggravation with the conditions of his current employment."

"(i) There is clear evidence of significant pre-existing pathology involving the left knee. The history has been detailed above, which includes a partial medial meniscectomy to address a previous injury in the early 2000s. Even in 2004 an X-ray of the left knee showed loss of medial joint space consistent with an osteoarthritic process progressing. I have taken into account the presence of an underlying primary osteoarthritic process, the history of previous injury and surgery, his obesity and the history of Mr Manera's employment with Diversey Australia Pty Ltd but acknowledging that liability for the total knee replacement was accepted by the current employer.

(ii) I make a deduction of 4/10 of the impairment, resulting in 12% whole person impairment for the left knee."

1. In his statement dated 11 August 2020, Mr Manera said:

"I have had a previous Workers Compensation Claim On 17 October 2002. At that time, I was working for Australasian Correctional Management - Villawood Detention Centre. On this occasion I had a slip on a wet floor in the kitchen area and damaged my left knee. This injury did involve me having time away from work. I had an arthroscopic surgery on my left knee to repair the meniscus. I had time away from work and returned to work on a graded program. I returned back to full pre-injury duties from memory around late 2003.

Since this time, I have not had any major issues with my left knee other than some stiffness from time to time until these current issues."

1. The operation report from 9 December 2002 shows that Dr Chung performed a "left knee arthroscopic medial meniscectomy chondroplasty."
2. The X-ray dated 17 September 2004 was of both knees and relevantly reads:

There is joint space loss involving the medial compartment. Patellofemoral joint has normal alignment. No joint effusion is seen. Bone density is satisfactory."

1. Mr Manera provided some more detail in his statement dated 14 January 2025:

"This injury was treated with surgery, in the form of a repair of my medial meniscus. In or around August 2003, my left knee fully recovered. It was completely asymptomatic, and I had no physical restrictions with my left knee. For example, between August 2003 - 2016 I initially returned to my pre-injury duties and later engaged in various alternative employment including truck driving, forklift driving, engaged in store duties and walking 2-3 km per day. I was also able to kneel, climb stairs, climb ladders, and walk at a reasonable pace without issues.

On 14 May 2014 I commenced employment with Diversey Australia Pty Limited as a Storeman and forklift driver.

At the time of commencing this employment, I considered myself to be healthy, fit and highly capable at handling the physical demands of my employment."

1. Mr Manera said that the new forklifts were introduced in 2016. Though he found it more difficult to get in and out of the forklift, he did not experience real pain until early 2020.
2. In her decision, the Member found:

"The clinical records show only intermittent references to the left knee in the context of the 2002 injury and a separate event up until 2008. I accept the applicant's submission that there was then a 10 year period in which there is no evidence of the applicant seeking medical treatment or reporting symptoms in the left knee."

1. The notes from Mr Manera's general practitioner record some complaints of left knee pain in 2018 and 2019. He had a fall in 2008 which resulted in some complaints of knee pain for a short period. Having reviewed the notes, we agree with the Member's statement that there were no complaints of left knee pain for an extended period.
2. On 2 March 2020 Dr Khatib, orthopaedic surgeon, wrote to Mr Manera's general practitioner and said:

"Anthony ... has known about osteoarthritis in his left knee for many years. In 2002, he had a knee arthroscopy under the care of Professor Cheong. At the time, he had some relief of his symptoms but over the last 6 months he has had significant deterioration of symptoms with constant pain. His pan Is worse with activities that involve getting up into the forklift and getting off the forklift."

"X·rays of the knee demonstrate predominantly medial joint compartment osteoarthritic changes with bone-on-bone articulation. The patellofemoral joint demonstrates mild osteophyte changes but the lateral joint comportment ls reasonably well preserved.

I have explained to Anthony that he Is suffering from advanced knee osteoarthritis with bone on bone articulation of the medial femoral condyle and medial tibial plateau."

1. The report to which Dr Khatib refers does not appear in the file, though Mr Manera's general practitioner, Dr Liang, said in a report dated 29 January 2021:

"X-rays of Mr Manera's left knee that I organised on the 20th of August 2020 identified 'extensive osteoarthritic change'. Medial side 0mm of cartilage left. Lateral side opening, 11mm gap."

1. Dr Guirgis prepared a report at the request of Mr Manera's solicitors on 4 September 2024. He assessed a fair result as a result of the left knee replacement, at 20% WPI. He made a deduction of one-tenth under s 323 because Mr Manera did his normal duties from 2014 until "he started complaining in 2020". Dr Guirgis considered the role of the 2002 meniscectomy to be inseparable from age appropriate changes. He assessed 4% WPI for scarring.
2. In August 2020 Dr Powell considered that Mr Manera suffered left knee osteoarthritis, the cause of which was multifactorial, including the 2002 injury and the degenerative process. He did not consider that Mr Manera's employment was the main contributing factor to the aggravation of a disease. On 20 November 2024, Dr Powell also assessed a fair result from left total knee replacement surgery. He deducted one half under s 323 "taking into account" a primary osteoarthritic process, the previous injury and surgery, the history of employment and the assumption that Diversey had accepted liability for the left knee replacement.

"323 Deduction for previous injury or pre-existing condition or abnormality

(1) In assessing the degree of permanent impairment resulting from an injury, there is to be a deduction for any proportion of the impairment that is due to any previous injury (whether or not it is an injury for which compensation has been paid or is payable under Division 4 of Part 3 of the 1987 Act) or that is due to any pre-existing condition or abnormality.

(2) If the extent of a deduction under this section (or a part of it) will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction (or the relevant part of it) is 10% of the impairment, unless this assumption is at odds with the available evidence.

1. In Cole v Wenaline Pty Ltd[4] an Appeal Panel (by a majority) determined that s 323 mandated a deduction from the impairment assessed as a result of a lumbar spine injury because Mr Cole had undergone lumbar spine surgery in 1976. After recovering from the first injury, he had no impact on his activities of daily living and no radiculopathy. The medical members of the Panel proceeded on the assumption that the fact of the first injury, irrespective of outcome, must have contributed to the impairment. In that context, Schmidt J said:

"Section 323 does not permit that assessment to be made on the basis of an assumption or hypothesis, that once a particular injury has occurred, it will always, 'irrespective of outcome', contribute to the impairment flowing from any subsequent injury. The assessment must have regard to the evidence as to the actual consequences of the earlier injury, pre-existing condition or abnormality. The extent that the later impairment was due to the earlier injury, pre-existing condition or abnormality must be determined. The only exception is that provided for in s 323(2), where the required deduction 'will be difficult or costly to determine (because, for example, of the absence of medical evidence)'. In that case, an assumption is provided for, namely that the deduction 'is 10% of the impairment'. Even then, that assumption is displaced, if it is at odds with the available evidence."[5]

"Section 323 requires that a conclusion be reached as to whether or not any proportion of permanent impairment assessed resulted from an earlier injury, pre-existing condition or abnormality. In a case such as this, that conclusion must be reached on the evidence led as to the actual consequences of the earlier and later injuries, unless the assumption provided in s 323(2) applies."[6]

1. In Ryder v Sundance Bakehouse (Ryder) Campbell J said:[7]

"What s 323 requires is an inquiry into whether there are other causes, (previous injury, or pre-existing abnormality), of an impairment caused by a work injury. A proportion of the impairment would be due to the pre-existing abnormality (even if that proportion cannot be precisely identified without difficulty or expense) only if it can be said that the pre-existing abnormality made a difference to the outcome in terms of the degree of impairment resulting from the work injury. If there is no difference in outcome, that is to say, if the degree of impairment is not greater than it would otherwise have been as a result of the injury, it is impossible to say that a proportion of it is due to the pre-existing abnormality. To put it another way, the Panel must be satisfied that but for the pre-existing abnormality, the degree of impairment would not have been as great."

1. Southwell v Qantas Airways Limited[8] also concerned the extent of the deduction under s 323. Wright J considered Cole v Wenaline Pty Ltd and said:[9]

"Thus, it has been held, in cases such as Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liq) [2013] NSWSC 365 at [126] (Schmidt J) and Secretary, Department of Communities and Justice v Lewandowski [2023] NSWSC 334 at [52] (Griffiths AJ), that what must be determined under s 323 involves, at least three enquiries:

• Firstly, what the extent of the resulting impairment is.
• Secondly, whether the pre-existing condition contributed to the impairment.
• Thirdly, if it did, what proportion of the impairment was due to the pre-existing condition.

In light of the construction referred to above, however, the formulation of the second of these three enquiries may, in a case such as the present, misdirect consideration, if it were thought that all that had to be established was that the pre-existing condition was causally related in some way to subsequent workplace injury and the impairment suffered as a result of that injury, without any part or portion of that level of impairment being due to the pre-existing condition and not the injury."

1. After quoting the passage from Ryder set out above, Wright J said:

"Applying that approach, Campbell J concluded at [47]-[48] that the Panel in that case fell into jurisdictional error by failing in the circumstances of that case to address, inter alia:

1. whether the injury suffered in the workplace injury 'was worse because of the pre-existing [degenerative disc condition or] abnormality'; and
2. 'the means by which the pre-existing abnormality in the disc as found by the Panel contributed causally to the level of impairment, as opposed to the occurrence of the injury' (emphasis added).

This approach is consistent with what was said in Vitaz at [43], when it is understood that the reference to 'permanent impairment' in the principle stated by Basten JA was a shorthand reference to the 'level of [permanent] impairment' as referred to later in that same paragraph. In other words, the principle in that case was to the effect that, even if a pre-existing condition was asymptomatic before a workplace injury but some portion of the level of impairment after the workplace injury was due to the pre-existing condition and not the injury, a deduction was required under s 323."

1. The Medical Assessor said that he had deducted 4/10ths of the assessment because of "the underlying primary osteoarthritic process, the history of previous injury and surgery, his obesity and the history of Mr Manera's employment with Diversey". We agree that there should be a deduction as a result of the previous injury and the presence of osteoarthritis but we consider that 4/10ths is excessive.
2. Some of the factors that the Medical Assessor relied on support a deduction but others do not. Mr Manera did suffer an injury and undergo a medial meniscectomy in 2002. At that time, his permanent impairment would have been assessed at 1%. A weight bearing X-ray shows some medial joint space loss as a result of osteoarthritic change in 2004. However, Mr Manera returned to normal duties with his previous employer then worked in a variety of roles before obtaining employment at Diversey in 2014, becoming permanent in 2018. At Diversey he performed duties that required him to bend his knee and to step into his forklift many times a day. He coped well with those duties until a significant change in his employment in 2016, which required him to take a much higher step to get onto the forklift. He began to seek treatment for pain in 2020.
3. There is no doubt that Mr Manera had osteoarthritis in his left knee. In the absence of specific treatment between 2002 and 2020, other than for a specific incident in 2008, it is not possible to chart the progress of the osteoarthritis or the actual consequences of that injury. Because Mr Manera underwent surgery to his right knee before the 2002 injury to his left, his contralateral knee does not provide a benchmark. The extent of the deduction is difficult or costly to determine so that a deduction of one-tenth is appropriate.
4. We adopt the assessment of 20% WPI. A deduction of one-tenth reduces the assessment to 18% WPI.

1. The Medical Assessor was required to make his own assessment on the day of the examination. He was not bound by Mr Manera's statement as to the appearance of the scar, prepared in response to Dr Powell's assessment of 0% WPI. The Medical Assessor was required to bear in mind that an uncomplicated scar from a standard surgical procedure should not, of itself rate an impairment.[10]
2. The Medical Assessor described his examination of the scar, noting that it was much less obvious than that on Mr Manera's right leg. Based on the Medical Assessor's description that the scar was well-healed, just visible, with no suture marks and no adherence, an assessment of 1% WPI was appropriate.
3. For these reasons, we have determined that the MAC issued on 19 May 2025 should be revoked, and a new MAC should be issued. The new certificate is attached to this statement of reasons.

This Certificate is issued pursuant to s 328(5) of the Workplace Injury Management and Workers Compensation Act 1998.

The Appeal Panel revokes the Medical Assessment Certificate of Medical Assessor David Gorman and issues this new Medical Assessment Certificate as to the matters set out in the table below:

Chapter, page and paragraph number in NSW workers compensation guidelines

Chapter, page, paragraph, figure and table numbers in AMA 5 Guides

Proportion of permanent impairment due to pre-existing injury, abnormality or condition

Sub-total/s % WPI (after any deductions in column 6)

Total % WPI (the Combined Table values of all sub-totals)

[1] Manera v Diversey Australia Pty Ltd [2021] NSWPIC 223.

[2] [2006] NSWCA 284.

[3] [2021] NSWCA 304 at [26].

[4] [2010] NSWSC 78.

[7] [2015] NSWSC 526 at [45].

[8] [2024] NSWSC 497.