1. On 30 June 2025 David Andrew Paterick, the appellant, lodged an Application to Appeal Against the Decision of a Medical Assessor. The medical dispute was assessed by Robert Kuru, a Medical Assessor, who issued a Medical Assessment Certificate (MAC) on

5 June 2025. 2. The appellant relies on the following grounds of appeal under s 327(3) 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 delegate is satisfied that, on the face of the application, at least one ground of appeal has been made out. The Appeal Panel has conducted a review of the original medical assessment but limited to the ground(s) 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 Paterick suffered a significant injury to his right shoulder whilst changing a car battery. The battery gave way, and his arm hyperextended, causing a significant rotator cuff tear. Following conservative treatment, Mr Paterick eventually underwent reversal total shoulder replacement.
2. He brought a claim for lump sum compensation. He presents with significant restriction in range of motion, as well as scarring in his right shoulder as a result of shoulder surgery. He was assessed as suffering from 25% whole person impairment due to loss of range of motion in the right shoulder. Medical Assessor Kuru made a deduction of 1/3rd for pre-existing condition or abnormality, resulting in an impairment in the shoulder of 17%. Mr Paterick appeals against the deduction made by the Medical Assessor pursuant to s 323 of the 1998 Act.

1. The Appeal Panel 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, the Appeal Panel determined that it was not necessary for the worker to undergo a further medical examination because none was requested and the issue in dispute on appeal is not one which necessitates a further examination.

1. The Appeal Panel has before it all the documents that were sent to the Medical Assessor for the original medical assessment and has taken them into account in making this determination.

1. The parts of the medical certificate given by the Medical Assessor that are relevant to the appeal are set out, where relevant, in the body of this decision.

1. Both parties made written submissions. They are not repeated in full, but have been considered by the Appeal Panel.
2. In summary, the appellant provides an extensive summary of the relevant principles concerning the meaning of "incorrect criteria", "demonstrable error", and the application of s 323 of the 1998 Act. The appellant also provides a comprehensive summary of the evidence in this dispute, including the findings of the Medical Assessor, which are not necessary to repeat or summarise here (although will be referred to, where relevant, below).
3. The appellant submits that the Medical Assessor's conclusion that Mr Paterick would have needed a reverse total shoulder replacement irrespective of the work injury is at odds with every other medical opinion available. The appellant further submits that in reaching that conclusion, the Medical Assessor misconstrued his function and considered a matter not in issue in the proceedings (i.e. the cause of the need for surgery).
4. In reply, the respondent refers to the appellant's statement suggesting that it is inconsistent with the history of injury and that he failed to disclose such a history to Prof Ghabrial. The respondent refers to the report of Dr Rosenthal who takes a history of a previous right shoulder rotator cuff tear in 2014. The respondent also notes that Dr Harrington was not given a history of any previous right shoulder injury, but still proceeded to make a deduction of 1/10th. The respondent refers to the treating evidence, and submits that when the totality of the evidence is considered, the Medical Assessor did not err in the deduction he made. The Medical Assessor gave sufficient consideration to the fact that the appellant suffered a pre-existing rotator cuff tear in the right shoulder, back to 2014 or 2015, which was confirmed by imaging taken at that time.

1. The procedures on appeal are contained in s 328 of the 1998 Act. The appeal is to be 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. In Queanbeyan Racing Club Ltd v Burton [2021] NSWCA 304 (Burton), the Court of Appeal confirmed that the Appeal Panel is not limited to the ground held by the President to have been made out pursuant to s 327(3), but cannot look for errors which are not part of the grounds of appeal (per Basten JA at [26]). The issue in this case is limited to s 323 of the 1998 Act.
2. In Campbelltown City Council v Vegan [2006] NSWCA 284 the Court of Appeal held that the Appeal Panel has an implied obligation 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. Section 323 of the 1998 Act, the "deduction" section, has been subject of commentary in a large number of cases. Section 323 provides:

"(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. > > **Note - ** > > So if the degree of permanent impairment is assessed as 30% and subsection (2) operates to require a 10% reduction in that impairment to be assumed, the degree of permanent impairment is reduced from 30% to 27% (a reduction of 10%). > > (3) The reference in subsection (2) to medical evidence is a reference to medical evidence accepted or preferred by the medical assessor in connection with the medical assessment of the matter. > > (4) The Workers Compensation Guidelines may make provision for or with respect to the determination of the deduction required by this section. > > (5) (Repealed) > > **Note - ** > > Section 68B of the 1987 Act makes provision for how this section applies for the purpose of calculating workers compensation lump sum benefits for permanent impairment and associated pain and suffering in cases to which section 15, 16, 17 or 22 of the 1987 Act applies."

4. The starting point for considering the application generally of s 323 of the 1998 Act is often the regularly cited Cole v Wenaline Pty Limited [2010] NSWSC 78 (Cole), per Schmidt J. Cole was followed by Elcheikh v Diamond Formwork (NSW) Pty Ltd (in Liq) [2013] NSWSC 365 (Elcheikh), in which the three-step test was affirmed and elaborated upon:

"As discussed in Cole v Wenaline Pty Limited at [30], in the case of a workplace injury caused by an exacerbation or acceleration of a pre-existing condition, what must be determined by a medical specialist under s 323 is:

• 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."

1. In Ryder v Sundance Bakehouse [2015] NSWSC 526 (Ryder), Campbell J sets out the interpretative history of s 323 through various decisions of the Supreme Court and Court of Appeal from [38]-[45]. His summary of what the section requires is expressed at [45]:

"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 resulting from the work injury would not have been as great."

2. The appellant also refers to State of New South Wales (Central Coast Health District) v Page [2023] NSWSC 935 (Page) at [29]. The Appeal Panel notes that the quotation relied upon by the appellant comprises the Appeal Panel's reasons in the decision subject of review, and not any finding of Lonergan J. Further, the factual circumstances of that case create no binding authority. There may be some passing similarities, but each case must be determined on its own facts.
3. The above is not to say that the approach taken by the Medical Assessor was correct. The Medical Assessor addressed the question of deduction on page 6 of the MAC. He identifies the existence of a pre-existing condition or abnormality, being a "chronic rotator cuff tear". He goes on to identify how that condition contributes to the current impairment:

"The injury on 25/08/2020 represents aggravation of a chronic pathology affecting the right shoulder. Whilst Mr Paterick gave no history of previous injury to his right shoulder, he has undergone imaging on it in June of 2015 demonstrating significant chronic rotator cuff pathology at that stage. The injury on 25/08/2020 represents aggravation of chronic pathology in the shoulder. The necessity for him to ultimately undergo a reverse shoulder replacement was to address the pathology that was documented 5 years prior to the date of injury and not the consequences of acute injury to the shoulder. I note the injury relates to an acute event and it is not proposed that the nature and conditions of employment have been a substantial contributor."

4. He then determines the extent of the contribution from pre-existing condition:

"The failure of the initial attempt at rotator cuff repair and ultimate requirement to undergo arthroplasty was on the basis of Mr Paterick having a chronic pathology in the right shoulder, not the consequence of injury on 25/08/2020. In the absence of having the pathology, the injury on 25/08/2020, on the balance of probability, would not have resulted in Mr Paterick undergoing reverse total shoulder arthroplasty and would have resulted in significantly lesser impairment being assessable subsequent to the injury."

5. The three-step test in Cole and El Cheikh must be considered in the context of the above reasons. Firstly, the Medical Assessor has assessed the current degree of impairment resulting from injury: 25%. There is, however, within the Medical Assessor's reasons, somewhat of a misdirection - he refers to the necessity for Mr Paterick to undergo reverse shoulder replacement as due to earlier pathology and not due to the acute injury.
6. The Appeal Panel accepts the appellant's submission that the Medical Assessor's conclusion, concerning the need for shoulder surgery, is at odds with every other opinion contained in the material. Further, and more material, is that he has asked himself the wrong question. The question is not whether the surgery was to address pathology that may have pre-existed what was a significant injurious event. The question is whether the need for surgery results from the injury, that is whether the injury materially contributes to the requirement. It is trite law that there can be multiple causes of damage suffered by a worker: ACQ Pty Ltd v Cook [2009] HCA 28.
7. The Medical Assessor misdirected himself as to the appropriate question in step two of the three-step test in Cole, by considering the need for surgery (with an erroneous conclusion), rather than whether the pre-existing condition contributes to the current degree of impairment. This conclusion was reached on a purely speculative or hypothetical basis. Accordingly, the MAC contains a demonstrable error.
8. The Appeal Panel must then consider the appropriate application of s 323 of the 1998 Act.
9. The starting point is the assessment of impairment. As this was based on range of motion, and not challenged on appeal, the Appeal Panel accepts the assessment of 25% as correct.
10. The second step is to identify whether there is any pre-existing condition or abnormality that has contributed to the current degree of permanent impairment. Ryder postulates a reversal of that test as a "but for": "the Panel must be satisfied that but for the pre-existing abnormality, the degree of impairment resulting from the work injury would not have been as great".
11. The Medical Assessor identified a "chronic rotator cuff tear" as an issue. The worker's statement identifies that he had "never injured" his right shoulder prior to the incident. That does not mean that a condition could have existed prior to the incident. Dr Burrow identifies the probable existence of an "essentially asymptomatic tear" that developed over a long period but exacerbated by an acute work injury. Dr Rosenthal takes a history of previous rotator cuff tear in 2014, but that Mr Paterick was able to fully recover from it. There was no surgery at that time, but a left shoulder reconstruction in 2000.
12. Professor Ghabrial takes no history of previous issues and opines "no deduction is necessary" without any explanation. Dr Harrington made a deduction due to "natural constitutional changes and degenerative changes".
13. Based on the above evidence, the Appeal Panel are satisfied that Mr Paterick had a pre-existing condition in his right shoulder. He had previous issues with his rotator cuff that predate the injury by about five or six years. The functioning of the shoulder resolved without surgical intervention, but represents a relevant pre-existing condition. In addition to that, Mr Paterick was 58 at the time of (frank) injury, had worked in heavy work for years, and had engaged in physical activities that involve the shoulder. These all lead to degenerative change in the affected body part.
14. The appropriate question in s 323 is not just whether a pre-existing condition exists, but whether it contributes to the current degree of impairment. The appellant, with reference to Page, appears to suggest that it does not. The Appeal Panel do not accept that characterisation. The existence of a pre-existing rotator cuff tear, along with degenerative change, have contributed to the current degree of impairment by making it worse. The rotator cuff tear suffered in the course of employment was no doubt significant, as were the consequences of the failed surgery (the need for which was undoubtedly due to the work-related injury, as well as other causes). However, the impairment would not have been as significant if not for the pre-existing condition. The Appeal Panel agree that a deduction is appropriate, for different reasons than adopted by the Medical Assessor.
15. As to the third step in Cole, s 323 requires the consideration of the extent of the contribution from those identified pre-existing conditions. In present circumstances, the Appeal Panel disagree with the conclusion reached by the Medical Assessor. As discussed above, the requirement for both surgeries was due to the injury. Other factors may have contributed but there was undoubtedly a causal connection between the injury and the surgeries undertaken.
16. The Medical Assessor made a deduction of 1/3rd of the assessed impairment. This conclusion was reached applying s 323(2). That is, the Medical Assessor first identified that it would be difficult or costly to determine the extent of the deduction, bringing into play the "default" or "fallback" deduction presumed by s 323(2) of the 1998 Act. However, the Medical Assessor went a step further to conclude that a deduction of 1/10th would be at odds with the available evidence.
17. The Appeal Panel disagree with that conclusion. The available evidence indicates that Mr Paterick had a pre-existing condition but that he was functioning well until the injury in 2020. It would be difficult or costly to determine the contribution from that pre-existing condition, but there is insufficient evidence to displace the presumption allowed for in s 323(2). It should be noted that a deduction can be made even where a pre-existing condition is asymptomatic prior to and at the time of injury: Vitaz v Westform (NSW) Pty Ltd [2011] NSWCA 254 at [43]. Mr Paterick had a pre-existing condition that was previously symptomatic, but at the time of injury he was functioning largely normally.
18. In all of the circumstances of the case, considering the medical evidence available and as discussed above, the Appeal Panel are satisfied that a deduction of 1/10th is appropriate.
19. For these reasons, the Appeal Panel has determined that the MAC issued on 5 June 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 Robert Kuru 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)

P 476 F 16-40

P 477 F 16-43

P 479 F 16-46

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