Phillips v JW Williamson and RW Williamson trading as Williamson Bros

Supreme Court of NSW|2016-11-17|Before: Schmidt J

Judgment

Mr Phillips suffered permanent impairment when he was injured at work in 2011, while walking backwards in a removalist truck, when he fell onto his back, striking his head and the tip of his right shoulder. He required surgery to his shoulder in 2012 and afterwards received ongoing treatment for pain and other symptoms in his neck, shoulder and right hand. He claimed workers compensation under the Workers Compensation Act 1987 (NSW).
While initially liability for the injury to Mr Phillips' cervical spine was denied, in October 2014 he was referred to an approved medical specialist for assessment of his injuries under the Workplace Injury Management and Workers Compensation Act 1998 (NSW). In January 2015, the medical specialist found that he had suffered 10% upper extremity impairment, which equated to 6% whole person impairment, with a combined total of 13% whole person impairment for all of his injuries. Those conclusions rested on the medical specialist's opinion that deterioration in his condition since 2014 was explained by abnormal illness behaviour.
On appeal from the medical specialist's assessment, Mr Phillips sought to tender additional evidence not available at the time of his examination by the medical specialist. He also asked to be examined by a Medical Appeal Panel, to demonstrate that his deterioration was not the result of abnormal illness behaviour and that his injuries had not reached maximum medical improvement. In August 2015, the Appeal Panel refused both applications and dismissed his appeal.
By his summons Mr Phillips sought a declaration that the medical certificate and decision of the medical specialist were affected by error of law on the face of the record, as well as orders under s 69 of the Supreme Court Act 1970 (NSW), setting aside the decision of the Appeal Panel, which he contended was also infected by error of law.
In issue finally at the hearing was whether Mr Phillips should be given leave under Rule 59 of the Uniform Civil Procedure Rules 2005 (NSW) to bring his application out of time and whether the Appeal Panel's decision was infected by various errors of law, including a denial of procedural fairness.

Mr Phillips must be given leave to bring his application out of time

Under Rule 59.10 of the Uniform Civil Procedure Rules, Mr Phillips was obliged to commence these proceedings within three months of the Appeal Panel's August 2015 decision. They should thus have been commenced by November 2015, but were not commenced until 17 February 2016.
It was by motion filed in March 2016 that Mr Phillips sought an extension of time for the commencement of the proceedings. That application was supported by affidavits sworn by both Mr Philips and his solicitor. The application was opposed, even though it was not contended that any prejudice would result for the employer, if the application was granted.
In opposing the application, reliance was placed on Itex Graphix Pty Limited v Elliott (2002) 54 NSWLR 207; [2002] NSWCA 104, where an appeal against the exercise of an unconstrained discretion to grant an application for leave to bring proceedings out of time, was upheld. There, a deliberate decision to allow a three year appeal period to expire had been taken on a fully informed basis, with the applicant then delaying for a further significant period, before changing her mind; circumstances which were considered to weigh heavily against the exercise of the discretion. It was also considered to be relevant that she had given no satisfactory or pertinent explanation for her decisions.
After an extensive review of the authorities, it was concluded that in the case of such a wide discretion, the general question that has to be asked is what is fair and just. The authorities referred to included Salido v Nominal Defendant (1993) 32 NSWLR 524, where Gleeson CJ pointed out that "the usual purpose of any limitation period is to protect a defendant from the injustice of having to face a stale claim" (at 530). In Holt v Wynter (2000) 49 NSWLR 128; [2000] NSWCA 143, the appropriate question to ask when determining an application to commence proceedings out of time under s 151D(2) of the then Workers Compensation Act was said to be that formulated by Toohey and Gummow JJ in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25 at 550, namely: "The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent."
In Prince Alfred College Incorporated v ADC (2016) 335 ALR 1; [2016] HCA 37, s 48 of the Limitation of Actions Act 1936 (SA) arose for consideration. There the plurality observed at [99]-[100], referring to Brisbane South Regional Health Authority, that the discretion to grant an extension of time raises two fundamental propositions. The first that the applicant must "prove the facts which enliven the discretion to grant the extension and also show good reason for exercising the discretion in his or her favour". Such an extension of time is not a presumptive entitlement which arises upon satisfaction of the pre-conditions that enliven its exercise. Account must be taken of the reasons for the limitation regime, and the discretionary nature of the decision to be made must be respected, given the general perception that "[w]here there is delay the whole quality of justice deteriorates".
The second proposition identified was that the purpose of the conferral of such a discretion is to "ensure a fair trial on the merits of the case" and the loss of evidence which will tend against the prospects of a fair trial, will usually be fatal to showing good reason for the exercise the discretion. For their parts, Gageler and Gordon JJ considered that the deliberate decision in that case not to bring proceedings and then, after a lengthy delay, to institute them, told against the exercise of the discretion (at [125]).
This Court's discretion under the Uniform Civil Procedure Rules, to grant leave to bring the proceedings out of time is not unconfined. Rule 59.10(3) requires that in considering this application the Court should "take account of such factors as are relevant in the circumstances of the particular case, including the following: (a) any particular interest of the plaintiff in challenging the decision, (b) possible prejudice to other persons caused by the passage of time, if the relief were to be granted, including but not limited to prejudice to parties to the proceedings, (c) the time at which the plaintiff became or, by exercising reasonable diligence, should have become aware of the decision, (d) any relevant public interest."
Rule 59 unarguably evinces an intention that judicial review proceedings such as this should be instituted promptly, namely within three months of the administrative decision sought to be reviewed. Consideration of these and other relevant factors may still warrant the grant of leave in an appropriate case.
In this case there is no suggestion that the time that the application was made, some three months out of time, would result in a trial over a "stale claim", or indeed any prejudice to the employer. Further, there has been an explanation given for Mr Phillips' initial decision not to pursue judicial review, at a time when the application would have been within time, namely the feared costs and risks of the litigation. That decision was revisited, because of the consequences of amendment to the legislative scheme; consequences which flowed in part from the Appeal Panel's refusal of Mr Phillips' appeal.
The evidence was that in September 2015, counsel advised Mr Phillips that he could pursue judicial review of the Appeal Panel's decision. The cost and risks of the litigation led him, however, to decide that he could not pursue the application. He was then in receipt of weekly workers compensation payments. The effects of amendments to the Workers Compensation Act, following enactment of the Workers Compensation Amendment Act 2015 (NSW), later forced him to revisit his decision.
The result of the refusal of his appeal from the medical specialist's assessment, and the later making of a "work capacity decision" in January 2016, was that Mr Phillips lost the right to weekly compensation payments. Mr Phillips was advised by counsel in February 2016 that he had no right to appeal the work capacity decision. That advice caused him to review his decision not to pursue judicial review of the Appeal Panel's decision, given the loss of his compensation entitlements, with the result that the proceedings were commenced on 17 February.
The peculiar circumstances in which Mr Phillips found himself as the result of these developments, demonstrates the particular interest which he now has in the pursuit of his application for judicial review of the Appeal Panel's decision. That there is any public interest in his application being refused, is not apparent. There is no suggestion that anyone would be prejudiced if his application was granted, or that the lapse of time would preclude a fair trial on this application.
As discussed in Gallo v Dawson (1990) 64 ALJR 458; [1990] HCA 30 by McHugh J, the purpose of a discretion to permit an application to be brought out of time is to ensure that a limitation period does not become an instrument of injustice. His Honour there considered it relevant to have regard to the apparent prospects of success of the application (see at 459). In Re Commonwealth of Australia; Ex Parte Marks (2000) 75 ALJR 470; [2000] HCA 67, McHugh J considered that an extension of time could only be granted if necessary to do justice between the parties. That required consideration to be given to the "history of the matter, the conduct of both parties, the nature of the litigation and the consequences for the parties of a grant or refusal of the extension" (see at 480).
Taking all of these matters into consideration, I am well satisfied that the Court's discretion to permit Mr Phillips to bring his application out of time must be exercised, if justice is to be done in this case.

The parties' cases

The employer correctly contended that given the Appeal Panel's decision, this Court can make no declaration in relation to the medical specialist's decision (see Vitaz v Westform (NSW) Pty Ltd [2011] NSWCA 254 and Dyason v Butterworth [2015] NSWCA 52). Still, in order to resolve what remained in issue between the parties, it is necessary to consider the reasons given for the medical specialist's decision.
While Mr Phillips contended that both the medical specialist and the Appeal Panel fell into various errors of law, the employer's case was that the appeal was an attempt rather to cavil with conclusions reached by the medical specialist on the evidence, which had been confirmed by the Appeal Panel.
That case cannot be accepted. The Appeal Panel's decision, on its face, reveals the errors into which it fell.

The medical specialist's decision

After outlining the history of Mr Phillips' injury and treatment, the medical specialist turned to his present symptoms, which included significant ongoing problems with his neck; pain radiating down his right arm to his right hand; as well as pain in his shoulder, which had not improved significantly since his injury.
The specialist then outlined his findings on Mr Phillips' physical examination, which showed considerable deterioration since his last examination in 2014, and significant restriction of his right shoulder movement. He also noted that "it is difficult to test for ulnar nerve function as Mr Phillips complained of diffuse hyperaesthesia of his upper limb, as noted, and there was generalised weakness to testing intrinsic muscles of both median and ulnar nerves", as well as "sensitivity to percussion of both ulnar nerves behind the medial epicondyles being more noticeable on the left side with paraesthesiae radiating down into the fingers of his left hand". The specialist also noted the results of various CT and MRI testing.
In his summary, the medical specialist noted the ongoing problems Mr Phillips had encountered since his fall in 2011, when he sustained a dislocation of his right shoulder, evidenced by a Hill-Sachs lesion, with various significant ongoing problems, including marked restriction of movement, as well as significant degenerative change in the cervical region, with ongoing problems in his neck. In the medical specialist's opinion "the referred pains he experienced initially from his shoulder down to his elbow are from his shoulder injury and as noted, the symptoms in his right hand only came on following his shoulder surgery". He then said: "Consistency of presentation I do have considerable difficulty in assessing Mr Phillips as in my opinion there are features in keeping with an additional fairly significant functional component (Abnormal Illness Behaviour) and in my opinion then his presentation is not entirely consistent. For example, I am unable to explain the diffuse hypoaesthesia to pinprick involving the whole of the right upper extremity and the right side of his face nor can I explain the marked weakness of grip strength of the right hand and the intrinsic weakness of both median and ulnar nerve supplied intrinsics. Similarly, I have difficulty in explaining the extent of the restriction of right shoulder movements, noting that at the time he saw Associate Professor L Kleinman in September 2013 his range of shoulder movement was far greater than today with 140° of flexion compared to only 90° today and 110° of abduction compared to only 40° today. Similarly, I note that when he saw Dr J Bentivoglio, orthopaedic surgeon, in March 2014 he was able to flex to 135° and abduct to 120°. I can suggest no particular reason why his range of shoulder movement should have diminished so significantly since these examinations. I have taken all the above into account when assessing impairment of the right upper extremity, as discussed below."
The medical specialist assessed the injury to Mr Phillips' cervical spine to have resulted in a total of 7% whole person impairment, but concluded that he could not use the figures he had found on examination of his shoulder, in view of his inconsistent presentation.
The medical specialist observed that in September 2013, Associate Professor Kleinman had found a 9% upper extremity impairment for the decreased range of Mr Phillips' shoulder movement, while in March 2014, Dr Bentivoglio had found a similar range of motion, resulting in 10% impairment. The medical specialist could not account for the deterioration in his condition at the "present severe range of restriction of movement on the basis of the injury in June 2011". Accordingly, he elected to award Mr Phillips only 10% upper extremity impairment.

Mr Phillips' case on the appeal

Mr Phillips' case was that the medical specialist had erred in arriving at that conclusion. The grounds of appeal which he advanced under s 327(3) of the Workplace Injury Management and Workers Compensation Act were deterioration in his condition; availability of additional relevant information; the medical specialist having made the assessment on the basis of incorrect criteria; and that the certificate contained demonstrable error.
The Appeal Panel's task on appeal "by way of review" was that specified by s 328(2), as discussed in Siddik v WorkCover Authority of NSW [2008] NSWCA 116. The appeal thus would have involved a hearing de novo, if the new evidence had been received (see at [96] - [98]). That application having been refused, it involved a rehearing, (which involves identification and correction of error (see at [95])). Under s 328(2), as amended after Siddick, that rehearing was confined to a consideration of the grounds of appeal pursued by Mr Phillips.
The Panel not having received the new evidence Mr Phillips sought to rely on and refused his application for re-examination, its role was to consider, and if found proven, correct, the alleged errors raised by his appeal.

The Appeal Panel's decision

The Appeal Panel began by noting the background to the application. It referred to the results of its preliminary review, namely, a decision that it was not necessary for Mr Phillips to undergo a further examination. No reasons for that decision were given. It identified the documents in evidence before it and also refused Mr Phillips application for a hearing, being satisfied "the matter is capable of determination without hearing".
It then turned to its "Findings and Reasons". After identifying the nature of its functions, it noted the parties' submissions and the conclusions recorded in the Medical Assessor's Certificate and then turned to the two issues it identified. The Panel first refused to receive the additional material on which Mr Phillips sought to rely, to demonstrate the errors he alleged the medical specialist had fallen into. The Appeal Panel concluded at [41]: "41. As discussed above, there is no evidence of deterioration of the worker's condition after the assessment by the AMS in the additional material. There is no subsequent deterioration apparent to the Panel. The ground of appeal is not made out."
It then turned to the assessment of Mr Phillips' right shoulder. It began by outlining what the medical specialist had decided, referring to the medical specialist's reasons for basing his assessment on Mr Phillips' condition in March 2014, rather on than the results of his own examination in January 2015, namely, "a fairly significant functional component (Abnormal Illness Behaviour)". The Appeal Panel then referred to the WorkCover Guides on inconsistent presentation: "45. At Part l0.b. the AMS refers to page 11, paragraph 1.60 of the WorkCover Guides, which provides, 'Inconsistent presentation 1.60 AMA5 (p 19) states: "Consistency tests are designed to ensure reproducibility and greater accuracy. These measurements, such as one that checks the individual's range of motion are good but imperfect indicators of people's efforts. The physician must use the entire range of clinical skill and judgment when assessing whether or not the measurements or test results are plausible and consistent with the impairment being evaluated. If, in spite of an observation or test result, the medical evidence appears insufficient to verify that an impairment of a certain magnitude exists, the physician may modify the impairment rating accordingly and then describe and explain the reason for the modification in writing." This paragraph applies to inconsistent presentation only. The requirements stated in paragraph 1.13 apply to all assessments.'"
The Appeal Panel then concluded: "46. There is nothing on the face of the Certificate to suggest that the AMS did not make several attempts at attempting to verify the consistency of the worker's shoulder movements with reference to paragraph 2.5 of the WorkCover Guides. That the AMS found inconsistency implies that he did so. Having found the inconsistency on presentation in respect of the right shoulder examination, the AMS correctly followed the course dictated by the WorkCover Guides. 47. As to the submission by the Appellant that the worker should be examined by the Panel to establish whether or not the shoulder injury has reached maximum medical improvement, the Panel notes that the AMS took the history under "present symptoms" that, "He does not feel that there has been any improvement in his shoulder symptoms which have remained fairly static since his injury." 48. The AMS then noted at Part 8.b. of the MAC that all subject body parts had reached maximum medical improvement. This was consistent with the history, the evidence and the findings on examination. 49. The Panel discerns no demonstrable error on the face of the Certificate; nor is the assessment based on incorrect criteria."
The Panel thus confirmed the medical assessment certificate issued on 9 January 2015.

The Appeal Panel denied Mr Phillips procedural fairness

The Appeal Panel's reasons must be considered in the way discussed in Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6 at 291. They must thus be read as a whole, considered fairly and without "combing through the words with a fine appellate tooth-comb, against the prospect that a verbal slip will be found warranting the inference of an error of law". Even so, reading the Appeal Panel's reasons, it is apparent that it fell into legal error.
There was no issue between the parties that both the medical specialist and the Appeal Panel were each obliged to give both parties procedural fairness. That concept is essentially concerned with questions of practical justice (see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [37] per Gleeson CJ and Frost v Kourouche (2014) 86 NSWLR 214; [2014] NSWCA 39 at [41]).
Failing to respond to a substantial, clearly articulated argument, relying upon established facts, can involve a denial of natural justice (see Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26 at [24].) A failure to accord procedural fairness can also involve jurisdictional error (see Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1 at [60] and Re Refugee Review Tribunal; Ex parte HB (2001) 179 ALR 513; [2001] HCA 34 at [10].)
In this case, there were obviously a number of possible explanations for the deterioration in the condition of Mr Phillips' shoulder, which the medical specialist found on his examination in 2015, results which the medical specialist said he could not explain. They included that the deterioration was the result of as yet uninvestigated or unidentified causes; that Mr Phillips was exaggerating his symptoms; that he had suffered another injury; or that he was suffering some other unidentified condition, such as abnormal illness behaviour.
The nature of that condition was considered by McCallum J in Kuzet v The Registrar of the Workers Compensation Commission [2015] NSWSC 4. Her Honour discussed at [22] the question of whether such behaviour involves a psychological injury, or is rather a condition which affects a person's perception of his or her primary injuries. Her Honour considered in that case that the existence of such a condition was required to be considered in assessing the degree of Ms Kuzel's permanent impairment and that this properly fell within the realm of the assessor's clinical judgment.
In Mr Phillips' case, as a matter of his clinical judgment, the medical specialist being unable to account for the deterioration in his condition, given the medical reports he had before him and his own examination of Mr Phillips, concluded that he suffered abnormal illness behaviour and so decided to base his assessment on Mr Phillips' condition in 2014. That was an available course under the applicable Guides, in such a case.
Mr Phillips' notice of appeal and accompanying submissions revealed that his case on appeal was that the medical specialist had erred in reaching that conclusion. He contended that the specialist ought to have either found that his deterioration since 2014 had resulted in an increase in the degree of his permanent impairment, or that his degree of impairment was not fully ascertainable, at the time of the examination.
Mr Phillips sought to lead additional evidence not available at the time of his assessment in January 2015 and to be further examined by a member of the Appeal Panel, contending that the specialist's assessment had been based on incorrect criteria and contained demonstrable error.
Under s 328(2) of the Workplace Injury Management Act, such fresh evidence, or evidence in addition to or in substitution for the evidence received in the medical assessment appealed against, could not be given "unless the evidence was not available to the party before that medical assessment and could not reasonably have been obtained by the party before that medical assessment".
There was no issue between the parties that those requirements were satisfied by the material on which Mr Phillips sought to rely, he having been examined by the medical specialist on 5 January 2015, but only having seen his neurosurgeon, Dr Christie, on 7 January. He thus claimed to be entitled, on appeal, to rely on Dr Christie's 20 January report, which had not been received until 30 January, as well as his resulting referral on 2 February by his GP, Dr Thera, for further ultrasound examination, they both being relevant to the grounds of appeal which he pursued.
In his report Dr Christie considered it to be unlikely that sensory loss in fingers on Mr Phillips' right hand was related to his cervical spine. He considered that there may have been injury to the brachial plexus, or irritation of the ulnar nerve and recommended nerve condition studies be pursued, to rule that out. Dr Thera's referral for ultrasound investigation of his painful right shoulder, referred to his symptoms getting worse and bursitis.
In his written submissions, Mr Phillips contended that if the January 2015 report of his neurosurgeon, Dr Christie, and his GP's subsequent referral for further ultrasound examination of his shoulder had been available to the medical specialist, the specialist would not have concluded that he was suffering abnormal illness behaviour. Those records provided, he contended, other physical explanations for his deterioration since his assessment in 2014. He also contended that the medical specialist's identification of his "potential ulnar nerve dysfunction" was supported by Dr Christie, who had recommended that he undergo nerve conduction studies, which would confirm or rule out an ulnar nerve irritation, or a brachial plexus injury.
On that material there can be no question that by his appeal, Mr Phillips sought to demonstrate to the Appeal Panel that there was another explanation for his deterioration since examination in 2014. His case was also that this material was relevant to the Panel's determination of whether the medical specialist had erred in concluding that he had reached maximum medical improvement and/or whether further medical investigations were required.
That the further material was relevant to what was in issue on the appeal was thus apparent on the face of the documents and so accepted by the employer, who also accepted that further investigation was required. Accordingly, the employer did not object to the receipt of the further evidence. It submitted as to Dr Thera's referral: "19. The Appellant submits at paragraph 2.8 that Dr Thera has suggested bursitis as a possible reason for the alleged deterioration in the Appellant's condition. The Appellant relies on an ultrasound referral from Dr Thera, and not any formal medical report of other medical evidence. The Respondent submits that the Appellant has failed to adduce any medical which evidences a deterioration in his condition, and further, that the Appellant has failed to adduce any medical evidence supporting a diagnosis of bursitis. 25. A referral for an ultrasound does not, in our view, provide substantive evidence of anything other than the need for further investigation."
As to Dr Christie's report, the employer submitted that: "23. The Appellant also relies on the report of Dr John Christie dated 07 January 2015. Given the 2 days between the AMS examination and Dr Christie's examination, the Respondent submits that this report is not evidence of a deterioration in the Appellant's condition, and is merely evidence of ongoing investigation into the cause of the Appellant's complaints. 25. A referral for an ultrasound does not, in our view, provide substantive evidence of anything other than the need for further investigation. 26. In relation to the report of Dr Christie, the Respondent submits that Dr Christie has not provided evidence of any further symptoms, nor of any deterioration in the Appellant's condition. Dr Christie is merely offering a further opinion, namely that of a Neurosurgeon. 27. The Appellant submits as follows at paragraph 3 6; "Further and on the same page the AMS notes potential ulnar nerve dysfunction which is also identified by Dr Christie in his report of 7 January 2015. Dr Christie." recommends that the Appellant undergo nerve conduction studies of the ulnar nerve to confirm or rule out an ulnar nerve irritation or brachial plexus injury." 28. The Respondent submits that the AMS identified the potential 'ulnar nerve dysfunction' at the time of the examination and subsequent MAC, and so the report of Dr Christie does not provide additional evidence in this respect, but merely suggests further investigations take place, 29. The Respondent submits that the AMS indicated that "it was difficult to test for ulnar nerve function" not that he did not do so. 30. The Respondent also submits that, notwithstanding that the AMS identified the potential 'ulnar nerve dysfunction', he certified that the degree of permanent impairment was fully ascertainable."
Despite there being no objection to the receipt of the further evidence, the Appeal Panel refused to receive it, observing at [36] that: "36. In Lukasevic [sic] v Coates Hire Operations Pty Limited [2011] NSWCA 112 (Lukasevic) [sic]. Hodgson JA, in the majority, says (at 78), "in my opinion it would be reasonable for an AP [Appeal Panel] not to admit evidence raising such a dispute unless that evidence had substantial prima facie probative value, in terms of its particularity, plausibility and/or independent support. Otherwise, simply by raising such a dispute, going to a matter relevant to the correctness of the certificate, a worker could put the AP in a position where it had to have a further medical examination conducted by one of its members. I do not think this would be in accord with the policy of the WIM Act.""
The factual dispute in Lukacevic was over what had occurred at the approved medical specialist's examination, the worker disputing the specialist's account, in the reasons given for his decision. Thus it was that the account which the worker sought to give as to what he contended had occurred during the examination raised questions as to the plausibility of his evidence, amongst other things.
What Hodgson JA (in the majority) observed in Lukacevic at [78] was: "78 A dispute by the worker as to the history set out in the certificate, or the observations made by the AMS, can readily be raised; and it could be raised honestly or dishonestly, on strong or flimsy grounds. Having regard to the matters I have set out, in my opinion it would be reasonable for an AP not to admit evidence raising such a dispute unless that evidence had substantial prima facie probative value, in terms of its particularity, plausibility and/or independent support. Otherwise, simply by raising such a dispute, going to a matter relevant to the correctness of the certificate, a worker could put the AP in a position where it had to have a further medical examination conducted by one of its members. I do not think this would be in accord with the policy of the WIM Act."
In Mr Phillips' case there was no question as to the probative value of the material on which Mr Phillips sought to rely on the appeal. The employer accepted that it demonstrated that further investigations were needed.
This was, accordingly, quite a different case to Lukacevic. Mr Phillips sought to rely on additional, probative medical material, which did not exist at the time that he was examined by the medical specialist, to which no objection was taken, in order to demonstrate the errors into which he claimed the specialist had fallen.
While Handley AJA, who agreed with Hodgson JA, discussed in Lukacevic at [102] - [104] that s 328 does not require the Appeal Panel to receive all new evidence which meets the statutory threshold, such an Appeal Panel would be slow to reject reports of other medical practitioners obtained by an appellant after the medical specialist's examination, which are relevant to what it has to determine on the appeal, about which no questions of probative value arise and to which no objection is taken. The proceedings, while administrative, are, after all, adversarial. The opposing party's attitude to an application under s 328, is thus a relevant consideration on the exercise of the Appeal Panel's discretion.
Given the flexible nature of an appeal brought under s 328, as discussed in Siddik and the obligation to give the parties' both procedural fairness and natural justice, in this case, it is apparent that the Appeal Panel erred in rejecting the relevant and probative additional material on which Mr Phillips sought to rely, to which the employer took no objection, to demonstrate the medical specialist's errors.
Thereby, Mr Phillips was denied procedural fairness.

The Appeal Panel's decision was otherwise unreasonable

An Appeal Panel's exercise of its discretion under s 382(3) may be challenged in this Court, if it is irrational or vitiated by patent legal error, for example in the case of "Wednesbury" unreasonableness, which includes the exercise of a discretion so unreasonable, that no reasonable person could have so exercised it (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 KB 223).
This is such a case.
Mr Phillips was contending that there was a cause for the deterioration in his condition since March 2014 which required further investigation. He sought to rely on the new medical material, which post-dated the medical specialist's examination, to demonstrate that deterioration was not explained by him suffering abnormal illness behaviour and that he had not achieved maximum medical improvement. That was also why he sought a further examination by the Panel.
The Appeal Panel's view of his appeal was: "39. The Appellant's appeal in regard to the deterioration of the worker's condition is misconceived. The additional material is also of no probative value to the extent it is used to cavil with the opinion of the AMS. There is nothing in the material that would cause the AMS (or the Panel) to change the outcome. 40. The material the Appellant seeks to rely on would not change the outcome and lacks "substantial prima facie probative value, in terms of its particularity, plausibility and/or independent support". Therefore the material is excluded. 41. As discussed above, there is no evidence of deterioration of the worker's condition after the assessment by the AMS in the additional material. There is no subsequent deterioration apparent to the Panel. The ground of appeal is not made out."
It was not the appeal which was misconceived. Having refused to receive the additional material, it was not before the Appeal Panel to consider on the appeal, as it here purported to do.
In any event, contrary to the Appeal Panel's understanding, Mr Phillips was not contending that there had been any further deterioration in his condition since examination by the medical specialist in January 2015. The Appeal Panel failed both to understand and consider Mr Phillips' case that the deterioration in his condition since examination in 2014 was the result of the consequences of his injuries, which required further investigation, not abnormal illness behaviour.
In the result, it is apparent that Mr Phillips was not only denied procedural fairness by the Appeal Panel's refusal to receive the report of his neurosurgeon and his referral for ultrasound examination of the cause of his worsening symptoms, but by the course which the Appeal Panel pursued, Mr Phillips was denied practical justice.
The Appeal Panel misunderstood the issues which lay between the parties, which it was called on to resolve, given the grounds of appeal which Mr Phillips had advanced and how the employer had responded to them.
In the result, Mr Phillips' case must succeed, the Appeal Panel having failed to resolve the matters over which the parties had joined issue, namely that his deterioration since examination in 2014 could be explained by something other than the abnormal illness behaviour the medical specialist had concluded that he was suffering.

The Appeal Panel also failed to consider another aspect of Mr Phillips' appeal

Even reading the reasons given in the way discussed in Wu Shan Liang, that the Appeal Panel also failed to consider Mr Phillips' case that his degree of impairment was not fully ascertainable, given the further investigations being pursued into the cause of his worsening symptoms, must also be accepted.
The NSW Workers Compensation Guides for the Evaluation of Permanent Impairment, made under s 376 of the Workplace Injury Management and Workers Compensation Act, contemplated that assessments would be conducted when the injured person's degree of permanent is found to be "unlikely to change by more than 3%WPI in the ensuing 12 months with or without further medical treatment". If treatment is considered to have been "inadequate and maximum medical improvement has not been achieved, the assessment should be deferred". The Guidelines also contemplate that on assessment further investigations might be required and pursued (see WorkCover New South Wales, WorkCover Guides for the Evaluation of Permanent Impairment, 3rd ed, (6 February 2009) at 1.21 - 1.22).
In June 2014, Dr Thera had referred Mr Phillips to a neurosurgeon, his pain having worsened after the surgery in 2012, spreading to his shoulder and he having noticed numbness in fingers of his right hand. On testing by the medical specialist in January 2015, Mr Phillips complained of diffuse hypaesthesia (numbness) to pinprick of the whole of his right upper limb, extending to the right side of his face. The medical specialist noted that this was difficult to test, but he did find generalised weakness to testing intrinsic muscles of both median and ulnar nerves, with sensitivity to progression of both ulnar nerves being more noticeable on the left side. Still, he concluded that Mr Phillips' degree of impairment was fully ascertainable, concluding that his symptoms were the result of abnormal illness behaviour.
Dr Christie examined Mr Phillips two days later, and advised soon afterwards that Mr Phillips might have suffered injury to the brachial plexus, or might be suffering ulnar nerve irritation. Nerve conduction studies were thus recommended. For his part, Dr Thera considered that bursitis might also explain Mr Phillips' ongoing symptoms and he was thus referred for ultrasound testing. The employer accepted the necessity for such further investigation.
Despite this, the Appeal Panel did not receive this material, even though it was also unarguably relevant to the question of whether the medical specialist had erred in not concluding that Mr Phillips' degree of impairment was not fully ascertainable.
The reasons given by the Appeal Panel do not leave open the conclusion that it considered this part of Mr Phillips' case at all. To the contrary, under the heading "Discussion" it identified only two issues which arose for its determination. The first "Issue - Additional relevant information/deterioration of the workers condition", was concerned with the receipt of the additional material, about which there was no issue lying between the parties. The second was identified to be "Issue - Assessment of the right shoulder made on the basis of incorrect criteria/insufficient reasons for not acting findings on examination".
In oral submissions it was contended for the employer that the question of whether the medical specialist had erred in not concluding that Mr Phillips' degree of impairment was not fully ascertainable, was dealt with by the Appeal Panel at [48] - [49], where it observed: "48. The AMS then noted at Part 8.b. of the MAC that all subject body parts had reached maximum medical improvement. This was consistent with the history, the evidence and the findings on examination. 49. The Panel discerns no demonstrable error on the face of the Certificate; nor is the assessment based on incorrect criteria."
It is not sensibly open to conclude that at this point of its reasons, the Appeal Panel was dealing with the second matter over which the parties had joined issue, namely, whether Mr Phillips' degree of impairment was fully ascertainable. If it was, the Appeal Panel failed to give necessary reasons for its conclusions.
Mr Phillips' sought to rely on the additional material and asked to be examined by the Appeal Panel, contending that his condition had not yet reached maximum medical improvement and required further investigation. The employer's case in its written submissions was: "55. The Respondent submits that the Appellant does not disagree with the range of movement recordings of the right upper extremity, and in these circumstance, there is no requirement for a further examination. 56. The Respondent notes that the Appellant submits in paragraph 4.1 that the Appellant may not have reached maximum medical improvement. The Respondent notes that this was a finding open to the AMS to make, and which he did not do. The Respondent further submits that in view of the AMS' certification that the impairment is permanent and degree of impairment is fully ascertainable, the Appellant has reached maximum medical improvement. 57. In the alternative, the Respondent submits that the appropriate course would be for Dr Pillemer to be asked to review the further material provided by the Appellant as well as the submissions, and be given the opportunity to reconsider the opinion he expressed in the MAC. 58. In the alternative, should the Appellant be referred to a Medical Appeal Panel for re-examination, contrary to the submissions of the Respondent above, the Respondent requests that the Appeal Panel additionally consider whether a deduction pursuant to section 323 of the 1998 Act ought to be made in light of the evidence of a pre-existing degenerative change."
Having not received the additional material and having refused itself to examine Mr Phillips, the Appeal Panel's reasons reveal that it also did not consider the parties' cases on the question of whether his injuries had reached maximum medical improvement. The bare statement that the medical specialist's conclusion that "all subject body parts had reached maximum medical improvement" was "consistent with the history, the evidence and the findings on examination", was not an adequate way in which this aspect of Mr Phillips' appeal could be resolved by the Panel.
Nor were the reasons given sufficient for the Panel to meet the obligation it had to supply reasons, as discussed in Campbelltown City Council v Vegan & Ors [2006] NSWCA 284, to which the Panel referred in the reasons it gave for its decision. On this issue, the reasons given were "manifestly deficient and did not constitute compliance with the minimum requirements of that obligation" as discussed in Vegan at [129].
In the result, it must be accepted that this aspect of Mr Phillips' case was also established.

Orders

For the reasons given, Mr Phillips' application must succeed. The usual order as to costs under the Uniform Civil Procedure Rules 2005 (NSW) in those circumstances is an order that the employer must bear his costs, as agreed or assessed. Unless the parties approach to be heard within 14 days, that will be the Court's order.
For the reasons given, I otherwise order that: 1. Leave to file summons out of time is granted. 2. The Appeal Panel's medical assessment certificate and statement of reasons of 17 August 2015 is set aside. 3. The matter be referred to the Workers Compensation Commission of NSW for the appointment of a new Appeal Panel to consider the appeal from the medical specialist's certificate afresh, in accordance with law.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 November 2016

Workers Compensation Amendment Act 2015(NSW)

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (31)

Cited By (4)