Plaintiff v Defendants

Supreme Court of Victoria|2008-10-28|Before: Kyrou J

Judicial review - Order 56, _Supreme Court (General Civil Procedure) Rules 2005 (_Vic) - Accident Compensation Act 1985 (Vic) - medical panel - failure to take into account relevant considerations - decision set aside - costs order where employer adopted a passive role in the proceeding - whether appropriate to order costs against medical panel.

2 The first, second and third defendants constituted the medical panel. The fourth defendant, the firm of Garland Hawthorne Brahe, is the plaintiff's former employer. The defendants did not contradict the plaintiff's affidavit material and made no submissions on the substantive issues. They addressed me only in relation to costs.

3 For the reasons set out in this judgment, I have decided to quash the opinion of the medical panel and to remit the medical questions to a medical panel to be convened in accordance with the Accident Compensation Act 1985 (Vic) ("ACA"). I have also decided that the fourth defendant pay the plaintiff's costs and that there otherwise be no order as to costs.

4 As the facts are not in dispute, they can be stated briefly.

5 The plaintiff is a solicitor. On 18 October 2004, while returning to his office from a legal seminar, he was struck by a car on City Road, Southbank. He sustained a moderately severe injury to the brain, with a fracture to the occipital bone, bifrontal contusion with traumatic change to the olfactory nerves. He was treated in various hospitals as an in-patient until 3 December 2004. He commenced a graduated and supervised return to work program around August 2005. In about February 2006, he resumed direct contact with clients.

6 On 22 October 2004, the plaintiff made a claim on his employer for weekly payments of compensation and medical and like expenses. The claim was accepted by the employer's WorkCover insurer, Allianz Workers Compensation ("Allianz"). On about 20 February 2006, the plaintiff made a claim for impairment benefits under ss 98C and 98E of the ACA. The injuries listed in the claim form included total loss of taste and smell. The solicitors inquiry form prepared by the plaintiff's solicitors claimed compensation for (among other things) "total loss of taste and smell". Allianz arranged for the plaintiff to be medically examined by various doctors. The plaintiff consistently informed the doctors that, as a result of the accident, he had totally lost his sense of smell and taste.

7 There was an initial dispute between the plaintiff and Allianz on certain aspects of his claim. Certain medical questions were referred to a medical panel on 21 March 2007 resulting in an opinion dated 19 June 2007. That opinion is not relevant for present purposes.

8 The plaintiff disputed Allianz's determination of his whole person physical impairment and its rejection of his claim for compensation under s 98E of the ACA for total loss of taste and smell. This dispute resulted in a further referral to a medical panel comprising the first, second and third defendants on 31 July 2007. The documents that accompanied the referral indicated that the plaintiff claimed he suffered "total loss of taste and smell". The members of the panel examined the plaintiff. During the examinations, the panel members asked the plaintiff about his loss of taste and smell and he informed them that he had a total loss of taste and smell since the accident. The questions that were referred to the panel and the answers given by the panel in its opinion dated 26 September 2007 are as follows:

(i) What is the worker's degree of permanent whole person impairment resulting from the accepted injury/s assessed as in accordance with S91 and is the impairment permanent?

In the Panel's opinion, the worker has a 23% whole person impairment resulting from the accepted physical injuries described as head injury resulting in organic brain damage, anosmia, loss of taste, loss of vision, balance disorder, teeth injury, tinnitus, and a sleep disorder, when assessed in accordance with Section 91, which is permanent.

When the impairment attributable to the total loss injury is excluded, there is a 19% whole person impairment resulting from the accepted injuries remaining. The degree of impairment is permanent.

The Panel is also of the opinion that there is a 5% psychiatric impairment resulting from the accepted psychiatric condition injury, when assessed in accordance with Section 91(2) of the Act.

For the purposes of Sections 134AB(3) & (15) of the Act there is a combined whole person impairment of 27% resulting from the accepted physical and psychiatric injuries. The degree of impairment is permanent.

(ii) Does the worker have an accepted injury, which has resulted in a total loss injury mentioned in the table in S98E(1)?

The Panel is of the opinion that the worker has a total loss of the sense of smell, when assessed in accordance with Section 98E of the Act.

9 The panel prepared reasons for its opinion dated 26 September 2007. The opinion and the reasons were provided to the plaintiff's solicitors on 17 October 2007. The reasons contain the following statements:

[The plaintiff] complains of a complete loss of his sense of smell and a partial loss of taste affecting sugar and salt and also reports decreased vision in the right eye.

The Panel assessed a whole person impairment of 5% for a total loss of sense of smell, due to olfactory nerve dysfunction, pursuant to the instructions on page 144 in Section 4.1f. The Panel also assessed a whole person impairment of 1% pursuant to Table 10 of Section 4.2b, for a partial loss of taste of the anterior tongue.

10 The references to pages, sections and tables in the above quotation are to the American Medical Association's Guides to the Evaluation of Permanent Impairment (Fourth Edition) ("AMA Guides").

11 The plaintiff issued an originating motion dated 14 December 2007 seeking an order quashing the opinion of the medical panel on the following grounds:

The Medical Panel failed to take into account a relevant consideration namely the Plaintiff's history of having a total loss of taste.
The Medical Panel took into account an irrelevant consideration namely a history of the Plaintiff, which he did not provide to the Medical Panel, that he suffers from only a partial loss of taste.

12 The originating motion also sought an order remitting the medical questions to a differently constituted panel. However, Mr Pillay, who appeared for the plaintiff, informed me during argument that the plaintiff did not press that the remittal be to a differently constituted medical panel.

13 A medical panel is amenable to judicial review.[1] Its opinion can be quashed if it makes a jurisdictional error.[2] It commits jurisdictional error if, in making its decision, it ignores a matter it is bound to take into account and that matter materially affects its decision.[3]

14 Mr Pillay submitted that the panel made an error in recording the plaintiff's medical history in relation to his loss of taste and that such an error constitutes jurisdictional error. He relied on Tralongo v Malios[4] and Cladingboel v Newcrest Mining Ltd.[5] He submitted that had the panel not made this jurisdictional error, its opinion could have been more favourable to the plaintiff, potentially resulting in significantly higher compensation under the compensation table in s 98E of the ACA and in other respects, including the possibility of meeting or exceeding the threshold 30 percent permanent impairment and thus being entitled automatically to a serious injury certificate.[6]

15 In the special circumstances of this case, I am prepared to find that although the panel members took into account the extent of the plaintiff's loss of taste, they so fundamentally misunderstood what the plaintiff told them about his loss of taste that they, in substance, failed to take into account the plaintiff's statement to them that he suffered from a total loss of taste.

16 The plaintiff's statement to the panel that he suffered from a total loss of taste was something that the panel was bound to take into account by virtue of ss 104B(9) and 65(5)(a) of the ACA and the nature of the questions that were referred to the panel. The panel's failure to take the statement into account constitutes a jurisdictional error which materially affected the panel's opinion.

17 It follows that the opinion of the medical panel will be quashed and the medical questions remitted to a medical panel to be convened in accordance with the ACA.

18 At the end of the plaintiff's submissions on the question of jurisdictional error (in respect of which the defendants did not make any submissions), I announced to the parties that I had decided to quash the opinion of the medical panel and that I would deliver my reasons later in the day. I then invited the parties to address me on costs.

19 Mr Pillay sought an order that the plaintiff's costs be paid by the defendants. He submitted that, as the plaintiff has been successful in the proceeding, the ordinary rule that costs follow the event, should apply. He did not press strongly for an order that the first, second and third defendants pay the plaintiff's costs in light of the Court of Appeal's decision in Psychologists Registration Board of Victoria v The Herald and Weekly Times Limited,[7] which held that costs should not be awarded against a statutory tribunal which has exceeded its jurisdiction unless it can be demonstrated that the tribunal has been "guilty of serious misconduct or corruption or has acted perversely". He conceded that no such allegation is made against the panel in this case. In relation to the fourth defendant, he relied on Smith v Lloyd (No 2),[8] where Lasry J reviewed the authorities and concluded that, in the circumstances of that case, the defendants, other than the medical panel, should be ordered to pay the plaintiff's costs notwithstanding that they had adopted a passive role in the proceeding.

20 Mr Masel, who appeared for the first, second and third defendants, submitted that, in accordance with Psychologists, there was no basis for an order for costs being made against his clients. He also relied on Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3).[9] He informed me that the first, second and third defendants did not seek costs.

21 Mr Letten, solicitor, who appeared for the fourth defendant, informed me that the fourth defendant did not seek costs. He submitted that an order for costs should not be made against the fourth defendant, as it had adopted a passive role in the proceeding and did not oppose the relief sought by the plaintiff. Mr Letten correctly submitted that no conduct of the fourth defendant contributed to the need for this proceeding to be instituted. He sought to distinguish Smith on the basis that, unlike the defendants in that case, the fourth defendant in this case is unlikely to be involved in any future litigation with the plaintiff, as the plaintiff's rights are primarily against the Transport Accident Commission.

22 It is well established that the Court has a broad discretion in relation to costs, which must be exercised judicially. While, in the normal course, costs follow the event, there is no rule that such an order must be made. There may be circumstances in a particular case which warrant departure from the costs follow the event outcome.

23 I accept that on the authority of Psychologists, there is no basis for me to order the medical panel to pay the plaintiff's costs. The key question is whether the fact that the fourth defendant played a passive role in this proceeding is sufficient to warrant an order that there be no order as to costs instead of an order that the fourth defendant pay the plaintiff's costs. While I have found this question difficult, in the end I have decided to adopt the same course as in Smith and to order that the fourth defendant pay the plaintiff's costs and that the first, second, third and fourth defendants bear their own costs. The reasons for my decision are as follows:

(a) The plaintiff had no choice other than to bring the proceeding in order to quash the medical panel's opinion and for his rights to compensation to be determined in accordance with law. Had the plaintiff not instituted this proceeding, the medical panel's opinion would be final and conclusive.[10]

(b) The referral to the medical panel and the decision of the medical panel occurred in the normal course of determination of the plaintiff's claim, which in turn arose out of the plaintiff's employment relationship with the fourth defendant. This proceeding has an intimate connection with the plaintiff's claim and the employment relationship.

(c) Although the fact that the fourth defendant did not oppose the relief sought by the plaintiff weighs in favour of no order for costs being made, it is not sufficient in the circumstances of this case to deprive the successful plaintiff of his costs. There is nothing in the plaintiff's conduct in this proceeding that would warrant the plaintiff being deprived of a costs order.

24 Accordingly, in all the circumstances, I find that it is just and reasonable that an order be made that the fourth defendant pay the plaintiff's costs.

(a) The opinion of the medical panel constituted by the first, second and third defendants set out in the certificate of opinion dated 26 September 2007 is quashed.

(b) The medical questions in respect of which the certified opinion was given be remitted to a medical panel to be convened in accordance with the Accident Compensation Act 1985 (Vic) to be determined in accordance with law.

(c) The fourth defendant pay the plaintiff's costs of this proceeding and the first, second, third and fourth defendants bear their own costs of this proceeding.

[1] Masters v McCubbery [1995] VICSC 209; [1996] 1 VR 635 ("Masters").

[3] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39-41; Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, 179; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, 351-2 [82]-[83].

[6] Under table 10 of section 4.2b of the AMA Guides, a range of 1 percent to 4 percent impairment of the whole person is set out for loss of taste. The plaintiff submitted that the panel's error deprived him of a rating higher than 1 percent impairment of the whole person due to loss of taste.

[7] [2000] VSCA 118, [11] ("Psychologists").

[8] [2007] VSC 436 ("Smith").

Court (General Civil Procedure) Rules 2005

Compensation Act 1985

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Judgment (52 paragraphs)

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