Plaintiff v Defendants

Supreme Court of Victoria|2013-07-18|Before: KYROU J

ADMINISTRATIVE LAW - Judicial review - Order 56, Supreme Court (General Civil Procedure) Rules 2005 - Medical panel - Determination of whether a worker had 'no current work capacity' - Whether non-compensable injuries can be taken into account in making that determination - Alleged jurisdictional error - Accident Compensation Act 1985 ss 5(1), 68(2), 82(1), 93, - Application granted.

1 In May 2008, the sixth defendant, Denise Walsh, twisted her right knee in the course of her employment as a casual disability carer with the plaintiff, the Department of Human Services ('Department').

2 The Department accepted Ms Walsh's claim under the Accident Compensation Act 1985 ('AC Act') for weekly payments of compensation in respect of the right knee injury. Weekly compensation payments commenced on 16 July 2008. Ms Walsh has not worked in any capacity since January 2010.

3 Section 93C of the AC Act, read together with the definitions in s 91E, provides that a worker's entitlement to weekly compensation payments ceases after the worker has received such payments for 130 weeks unless the worker has 'no current work capacity' and is likely to continue indefinitely to have 'no current work capacity'. Section 5(1) of the AC Act defines 'current work capacity' and 'no current work capacity' as follows:

current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment.

no current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to work, either in the worker's pre-injury employment or in suitable employment. [1]

4 The Department terminated the weekly payments to Ms Walsh with effect from 8 January 2011 on the basis that such payments had been made to her for 130 weeks and that she had a current work capacity.

5 In April 2011, Ms Walsh sustained a right shoulder injury and in November 2011 she sustained a left shoulder injury. Subsequently, she also developed low back pain. On 2 May 2011, Ms Walsh made a claim on the Department for a right shoulder arthroscopy. On 13 July 2011, the Department rejected the claim on the basis that the surgery was needed for a condition that was not work-related.

6 On 29 June 2011, Ms Walsh commenced a proceeding in the Magistrates' Court in which she sought to challenge the decision set out at [4] above on the basis that she had no current work capacity. The Magistrates' Court proceeding was subsequently expanded to also challenge the decision set out at [5] above.

7 On 19 July 2012, the Magistrates' Court referred six medical questions to a medical panel comprising the first to fifth defendants ('Medical Panel') pursuant to s 45 of the AC Act.[2] The Medical Panel answered the medical questions in a certificate of opinion dated 5 October 2012 ('Opinion') and provided reasons for the Opinion on the same day ('Reasons'). The Opinion and the Reasons are relevantly set out at [19] and [20] below.

8 In summary, the Medical Panel determined, by reference to all of her injuries, that Ms Walsh had no current work capacity. The effect of the Medical Panel's Opinion was that the Department was obliged to continue to make weekly compensation payments to Ms Walsh.

9 The Department has sought judicial review of the Opinion under O 56 of the Supreme Court (General Civil Procedure) Rules 2005, principally on the basis that the Medical Panel made a jurisdictional error.

10 The first to fifth defendants did not participate in the proceeding, in accordance with R v Australian Broadcasting Tribunal; Ex parte Hardiman.[3]

11 The central issue in this proceeding is whether the Medical Panel erred in not confining itself to the right knee injury and its consequences in deciding whether Ms Walsh had no current work capacity for the purposes of s 93C of the AC Act.

12 For the reasons that follow, I have concluded that the Medical Panel erred and that the application for review should be granted.

Relevant provisions of the Accident Compensation Act

13 Section 82(1) of the AC Act provides that a worker is entitled to compensation in accordance with the Act, for 'an injury arising out of or in the course of any employment'.

14 Section 93 of the AC Act contains an entitlement to compensation in the form of weekly payments where 'a worker's incapacity for work results from, or is materially contributed to by, an injury which entitles the worker to compensation'.

15 I have already referred to s 93C of the AC Act and the definitions of 'current work capacity' and 'no current work capacity' in s 5(1), both of which contain the phrase 'suitable employment'. That phrase is defined in s 5(1) as follows:

suitable employment, in relation to a worker, means employment in work for which the worker is currently suited -

(a) having regard to -

(i) the nature of the worker's incapacity and the details provided in medical information including, but not limited to, the certificate of capacity supplied by the worker; and

(ii) the nature of the worker's pre-injury employment; and

(iii) the worker's age, education, skills and work experience; and

(iv) the worker's place of residence; and

(v) any plan or document prepared as part of the return to work planning process; and

(vi) any occupational rehabilitation services that are being, or have been, provided to or for the worker; and

(b) regardless of whether -

(i) the work or the employment is available; and

(ii) the work or the employment is of a type or nature that is generally available in the employment market.

16 Under s 45 of the AC Act, a court may refer a medical question to a medical panel for an opinion. Pursuant to s 65(1), a medical panel is not bound by the rules of evidence and may inform itself on any matter relating to a reference in any manner it thinks fit. A medical panel is required to act informally, without regard to technicalities or legal forms, and as speedily as a proper consideration of the reference allows.[4] Under s 65(5)(c), a worker may be required to submit to an examination by a medical panel.

17 Section 68(2) of the AC Act requires a medical panel to whom a medical question is referred to give a certificate of its opinion and a written statement of reasons for that opinion.

18 Section 68(4) of the AC Act provides that an opinion by a medical panel must be adopted and applied by any court, body or person. Although an opinion is final and conclusive,[5] it is amenable to judicial review.

19 Only the first four questions and answers in the Opinion are presently relevant. They were as follows:[6]

Question 1)

What is the nature of the medical condition(s) (including any sequelae) resulting from:

(a) the accepted injuries to the right knee suffered by [Ms Walsh] in an incident on or about 20 May 2008 in the course of her employment with the [Department];

(b) the alleged injuries (rejected by the [Department]) to:

(i) the right shoulder;

(ii) the left shoulder;

...

(iv) anxiety and depression.

Answer:

(a) In the Panel's opinion, [Ms Walsh] is suffering from an aggravation of degenerative osteoarthritis of the right knee and from a medial meniscal injury, treated by medial meniscectomy, relevant to the accepted right knee injury.

(b) (i & ii) the Panel is of the opinion that [Ms Walsh] is suffering from bilateral shoulder dysfunction, as a consequence of bilateral rotator cuff disease, which is not relevant to the alleged injuries.

...

(iv) The Panel is of the opinion that [Ms Walsh] is suffering from a chronic adjustment disorder with depressed mood and some features of pain amplification, which has arisen as a consequence of, and is relevant to, the accepted right knee injury.

Question 2)

(a) Was [Ms Walsh's] employment in fact; or

(b) Could [Ms Walsh's] employment possibly have been -

a significant contributing factor to

(i) the accepted injuries to the right knee identified in question 1(a);

(ii) the alleged injuries (but rejected by the [Department]) identified in question 1 (b)?

Answer:

The Panel is of the opinion that [Ms Walsh's] employment could possibly have been and was in fact, a significant contributing factor to the accepted injury to the right knee and to the development of a chronic adjustment disorder with depressed mood, but not to any alleged injuries to the right shoulder [or] left shoulder ... nor to the recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing injury or condition of the right shoulder [or] left shoulder, in any way.

Question 3)

Does [Ms Walsh] have:

(a) a current work capacity;

(b) no current work capacity?

Answer:

In the Panel's opinion, [Ms Walsh] has no current work capacity.

Question 4)

If yes to question 3(b), is [Ms Walsh] likely to continue indefinitely to have no current work capacity?

Answer:

The Panel is of the opinion that [Ms Walsh] has no current work capacity and this situation is likely to continue indefinitely.

20 The Medical Panel's Reasons relevantly stated:[7]

The Panel took account of the nature of the incident on 20 May 2008, the nature and extent of [Ms Walsh's] right knee condition and the subsequent development of a psychiatric condition, her persisting right knee symptoms since that time, the development of symptoms in the ... right shoulder and left shoulder, ... the worker's explanation of the development of the right shoulder symptoms, which she attributed to lifting herself up from her chair and the current findings on physical examination and on medical imaging.

In particular, the Panel noted normal muscle bulk and strength around the worker's shoulder girdles, normal power in her left and right buttock and lower extremity muscles, thus not compromising her ability to stand from a sitting position. The Panel also noted that the pathology in her right knee is mild to moderate, not severe, there is no instability in her right knee, she is able to fully extend her right knee, with only mild reduction in her range of flexion, and she was able to stand from the sitting position from a chair without arms, in the course of examination by the Panel, without obvious difficulty. ... Based on this information, the Panel concluded that lifting herself up from her chair did not have any effect on her right shoulder condition.

...

The Panel concluded that the nature of the worker's right knee condition is such that she is not capable of performing her pre-injury duties as a casual personal carer.

The Panel took into account all aspects of the definitions of 'suitable employment', 'current work capacity' and 'no current work capacity' in the [AC Act] and in particular, her age of 55 years, (which limits her employment options); the nature of her right knee condition (which limits her degree of mobility) combined with her bilateral shoulder condition and low back pain (which further affects her capacity to undertake physically demanding work); the mild nature of her psychiatric condition (which limits her work capacity); her education to year 9; her transferrable skills, including a Certificate IV in disability care at TAFE Bendigo in 2008/2009, and previous work experience (involving working in a café for a few months, as a seasonal dried fruit packer and citrus packer and as a personal carer); her place of residence in rural NSW, 20 minutes from Mildura, (which would not limit her capacity for work); the medical information in the referral material from those doctors who have treated or examined the worker; and the absence of a return to work plan.

The Panel noted the vocational assessment reports from Konekt Australia ... in the referral material, which contain suggested job options for the worker. Based on its analysis of the criteria for suitable employment set out in the previous paragraph the Panel concluded that the suggested job options of outside of school assistance, disability support worker, employment consultant, customer services assistant, café worker, pharmacy assistant and aged care worker, would not constitute suitable employment for the worker.

The Panel considered that there is no work for which the worker is currently suited and which she could perform on a consistent basis. The Panel therefore concluded that the worker has no current work capacity.

The Panel considers the worker's condition is unlikely to change in the foreseeable future and therefore concluded that she is likely to continue indefinitely to have no current work capacity.

21 The Department relied on three grounds of review. The first two grounds of review alleged jurisdictional error and the third ground alleged inadequate reasons. The grounds were expressed as follows:

[1] In determining its opinion upon questions 3 and 4, the Medical Panel fell into jurisdictional error, alternatively error of law patent on the record, by finding that the worker had 'no current work capacity' and that this situation was likely to continue indefinitely.

PARTICULARS

In taking into account the effects of the worker's supervening bilateral shoulder condition and low back pain, which were not compensable under the Act, the Medical Panel erred in law by misconstruing or misapplying the terms 'current work capacity' and 'no work capacity', defined in s 5 of the Act.

[2] Further or alternatively, in determining its opinion under questions 3 and 4, the Medical Panel fell into jurisdictional error by taking into account an irrelevant consideration that it was bound to disregard.

PARTICULARS

The reasons of the Medical Panel show that in determining whether the worker had a 'current work capacity' or 'no current work capacity' the Panel impermissibly took into account the effects of the worker's supervening bilateral shoulder condition and low back pain, which were not compensable under the Act.

[3] The Medical Panel failed to give an adequate statement of reasons sufficient to comply with s 68(2) of the Act.

22 Workers' compensation legislation in Australia uses various expressions to describe the requisite causal connection between a compensable injury and incapacity for work. The leading cases that have considered such expressions where more than one injury contributed to the incapacity are discussed below.

23 In Ward v Corrimal-Balgownie Collieries Ltd,[8] the High Court was required to consider s 9(3) of the Workers' Compensation Act 1926 (NSW) ('1926 NSW Act') which capped an employer's liability for compensation for a workplace injury at £1000, 'except in the case of a worker whose injury results in total and permanent disablement'. The Workers' Compensation Commission of New South Wales ('NSW Commission') had found that the applicant, who had been employed as a coal-miner, was totally and permanently disabled. The NSW Commission had also found that this disablement was caused by two conditions operating concurrently: pulmonary fibrosis, which was a compensable injury, had occurred on 17 April 1929 and had caused 20 per cent incapacity for work; and arteriosclerosis and myocardial degeneration, which was detected after 17 April 1929, was not work-related and had caused 80 per cent incapacity for work. Additionally, the NSW Commission had found that the two conditions were not causally related.

24 Latham CJ, Rich and Dixon JJ found that the applicant's compensable lung injury did not result in total and permanent disablement and therefore the exception to the cap of £1000 compensation in s 9(3) of the 1926 NSW Act did not apply. McTiernan J dissented on the basis that the NSW Commission's findings of fact were insufficient to enable the Court to decide the case and that the matter should be remitted to the NSW Commission.[9]

25 The principles that the Court applied in Ward may be summarised as follows:

(a) The proposition that a compensable injury need not be the sole cause of total and permanent incapacity only applies in accordance with the principles in (b) to (e) below.[10]

(b) If a worker suffers from a medical condition which does not result in incapacity for work and then suffers a workplace injury which, acting on the underlying condition, renders the worker totally and permanently incapable of working, the total and permanent incapacity results from the workplace injury.[11] An example is where the workplace injury aggravates an underlying condition.[12] The workplace injury is regarded as the cause of the total and permanent incapacity even if the injury would not have resulted in another worker who did not suffer the underlying condition, becoming totally and permanently incapacitated.[13]

(c) Where a workplace injury initially does not cause total and permanent incapacity but over time, without the intervention of a new cause, the injury worsens and eventually causes total and permanent incapacity, that incapacity results from the injury.[14] The position is the same where the workplace injury is part of a chain of causation culminating in a single condition which amounts to total and permanent incapacity.[15]

(d) If a worker suffers partial incapacity due to a workplace injury and, after suffering an independent injury which is unrelated to the workplace injury, the worker becomes totally and permanently incapacitated, the total and permanent incapacity does not result from the workplace injury; it results from 'the concurrent action' of both injuries.[16] In other words, where a workplace injury and an independent cause produce independent consequences, distinct bodily conditions, which amount to total and permanent incapacity only because they must be added together, the total and permanent incapacity does not result from the workplace injury.[17] For example, where a workplace injury causes partial incapacity and subsequently, through advancing age or other natural causes, the worker becomes totally and permanently incapacitated, the worker's employer is not liable for the total and permanent incapacity.[18]

(e) If a workplace injury results in total and permanent incapacity and a subsequent independent and unrelated event, such as an illness, occurs which is sufficient to cause total and permanent incapacity, the workplace injury is still regarded as having resulted in the total and permanent incapacity.[19]

26 In Conkey & Sons Ltd v Miller,[20] the High Court considered whether the widow of a worker was entitled to compensation. In August 1974, the worker suffered a myocardial infarction, which was a compensable injury. The worker did not recover from this infarction. It weakened his heart to such an extent that it was probable that a further infarction would cause his death. The worker suffered a second infarction in October 1975 and died. The second infarction was not a compensable injury and was not caused by the first infarction.

27 The issue in Conkey was whether, for the purposes of s 8 of the 1926 NSW Act, the worker's death 'resulted from' the first infarction. The NSW Commission held that the worker's death 'resulted from the injury in August 1974 in the sense that the infarction in August 1974 made it probable that the worker would not survive a further infarction'.

28 Barwick CJ (with whom Gibbs, Stephen, Jacobs and Murphy JJ agreed) upheld the NSW Commission's decision. His Honour stated:

Thus the effect of the medical evidence ... would seem to be that the work-caused injury to the heart at the time of the first infarction was so great that, there being no recovery, another infarction, no matter what its immediate cause, would most probably, if indeed not certainly, be fatal. In my opinion, such a statement warrants the conclusion that the death by reason of myocardial infarction when it did ultimately occur, 'resulted' from the work-caused injury of the first infarction, even if it could not be said that the final infarction was itself caused by work-caused injury.[21]

29 The only authority that Barwick CJ discussed was Commonwealth v Butler[22] where, on similar facts, the High Court concluded that the worker's death did not result from the compensable injury. His Honour stated that Butler did not decide any principle of law and that the outcome of that case depended on its particular facts.[23] Likewise, Conkey did not enunciate any new principle and its outcome turned on its own facts.[24] The outcome, however, is consistent with the 'chain of causation' component of principle (c) in Ward, which is set out at [25] above.

30 In Bushby v Morris,[25] the worker had suffered a lumbar disc strain in 1964 while working for a first employer, George. Subsequently, in 1966, the worker suffered an aggravation of a pre-existing lumbar spinal condition while working for a second employer, Bushby. Due to these injuries and their treatment, the worker was at certain times partially incapacitated for work, and at other times, totally incapacitated. The NSW Commission made an unchallenged factual finding that the worker's incapacity 'resulted from' the 1964 and 1966 injuries for the purposes of s 9(1) of the 1926 NSW Act, and awarded compensation against both employers in respect of the same incapacity.

31 The Privy Council upheld the awards of compensation. It stated that it is well established in common law contexts that an injury or incapacity may be attributable to more than one cause, in the legal sense, operating concurrently.[26] The Privy Council added that, in the field of workers' compensation, it is sufficient that the incapacity results from the compensable injury by a chain of legal causation unbroken by any novus actus interveniens.[27] Their Lordships held that, where a worker's incapacity results from successive independent injuries with separate employers, there is no principle of law that requires that one or other injury must be selected as the cause of the incapacity.[28] In Bushby, the NSW Commission's finding that the worker's incapacity resulted from both the 1964 and the 1966 injuries concluded the matter.[29]

32 Although the Privy Council did not refer to Ward, the principle that their Lordships applied is consistent with principle (c) in Ward, which is set out at [25] above.

33 In Calman v Commissioner of Police,[30] a police officer suffered a compensable injury, namely, a work-related anxiety disorder. On 6 September 1993, he was informed by his superior officer that he would be transferred to another location. This exacerbated his underlying disorder and he became incapacitated for work for several weeks. The issue was whether the incapacity 'resulted from' the anxiety disorder within the meaning of s 33 of the Workers Compensation Act 1987 (NSW).

34 The High Court (Gaudron ACJ, McHugh, Gummow, Kirby and Callinan JJ) held that, as the underlying anxiety disorder continued and was exacerbated by the events at work on 6 September 1993, the incapacity resulted from that disorder.[31] The Court stated:

It has long been settled that incapacity may result from an injury for the purposes of workers' compensation legislation even though the incapacity is also the product of other - even later - causes.[32] Indeed, death or incapacity may result from a work injury even though the death or incapacity also results from a later, non-employment cause. ...

Whether incapacity results from injury is a question of fact. Upon the findings in this case, however, the answer to that question could admit of only one answer. As a matter of law, the tribunal was bound to find that the incapacity of the appellant resulted from injury within the meaning of s 33 of the Workers Compensation Act. Although the incapacity would not have arisen but for the appellant being told that he was to be transferred, there would have been no incapacity but for the existence of his underlying anxiety disorder. The incident, which was the immediate cause of his incapacity, merely exacerbated the underlying anxiety disorder which continued to exist, notwithstanding that immediately before the incident it manifested no symptoms. In those circumstances, the injury was a contributing cause to the incapacity. As Jordan CJ pointed out in Salisbury v Australian Iron and Steel Ltd:[33]

It is not necessary that the employment injury should be the sole cause of disability. It is sufficient if it is a contributing cause.[34] It may be the catalyst which precipitates disability in a medium of disease. But when the stage is reached at which the employment injury ceases to produce effects and could therefore no longer be a contributing cause to any incapacity which may then exist, the right to compensation ceases.[35]

35 Although the Court did not refer to Ward, the above passages are consistent with principles (b), (c) and (e) in Ward, which are set out at [25] above.

36 In Minter Ellison Services Pty Ltd v Kotzman,[36] the worker suffered a compensable injury to her right knee in November 2004 and received weekly compensation payments until they were terminated in May 2007 under s 93C of the AC Act. In January 2011, the worker made a claim under the AC Act for an injury to her left knee, which was said to be causally related to the right knee injury. The worker also applied for the reinstatement of weekly compensation payments on the basis that she had no current work capacity. A medical panel found that the left knee condition was constitutional in origin and that it had no causal relationship with the right knee condition.[37] The medical panel also found that the worker had no current work capacity, and in doing so, took into account the compensable right knee injury and the left knee condition.

37 Judd J noted that, while workers' compensation legislation in Australia sometimes used different formulations to describe the causal link between injury and incapacity, it 'seems to have been uniformly applied by reference to a commonsense notion of causation that looks for a sufficiently proximate relationship between injury and work capacity.'[38] His Honour referred to Ward and stated that, while the phrase 'results in' that was considered in that case differs from the phrases in s 93 of the AC Act and in the definition of 'no current work capacity' in that Act, the High Court's approach in Ward 'has been consistently applied in circumstances where, under similar legislation to the [AC] Act, an assessment must be made to ascertain a sufficient connection between the workplace injury and incapacity for the purpose of establishing a right to compensation.'[39] In that context, his Honour assumed a similar content in the expressions 'arising from', 'resulting from, or materially contributed to by' and 'arising out of'.[40]

38 Judd J stated that there was an absence of authority concerning the meaning of the phrase 'arising from' in the definition of 'no current work capacity'.[41] His Honour observed that while the causation formulation contained in s 93 of the AC Act differs from that contained in the definition of 'no current work capacity' in s 5(1), he did not consider that the two provisions were intended to impose different tests of causation.[42] His Honour noted that the words 'arising out of' require a less proximate or immediate relationship between cause and effect than the expression 'caused by'.[43] His Honour also noted that the degree of proximity required to establish the necessary connection between a workplace injury and disability is to be considered in a context where an employer takes the employee as it finds him or her.[44]

39 Judd J concluded that, as the medical panel had decided that the left knee condition was not work-related and had no causal relationship with the compensable right knee injury, the medical panel had misdirected itself and had made an error of law by taking into account the left knee condition in determining whether the worker had no current work capacity.[45]

40 Other cases that have discussed causation issues in the context of workers' compensation legislation - and upon which the parties relied - may also be mentioned briefly.

41 In Grech v Orica Australia Pty Ltd,[46] Ashley JA, with whom Buchanan and Chernov JJA agreed, said the following about the phrase 'results from, or is materially contributed to by' in s 93 of the AC Act:

Most often, a consequence is compensable if it 'results from or is materially contributed to by' an injury. The concept of material contribution was a later addition to workers compensation legislation. But even before that addition, the causal connection required by the words 'results from' had been construed to require much less than that injury be the sole cause of a consequence.[47]

42 In Zlateska v Consolidated Cleaning Services Pty Ltd,[48] the Victorian Court of Appeal (Maxwell ACJ and Eames and Redlich JJA) stated that the words 'arising out of' in s 82(1) of the AC Act 'have long been recognised as requiring a causal connection between the employment or its incident and the injury.'[49]

43 In Switzerland Insurance Workers Compensation (NSW) Ltd v Burley,[50] which involved four separate injuries to a worker's back, Mahoney P stated that Bushby authoritatively determined that an incapacity could result from more than one injury.[51] His Honour also stated that Bushby made it clear that 'separate injuries can and may often do, produce the same incapacity, particularly in the case of a back.'[52] In the course of his discussion of 'various combinations of injury and incapacity', his Honour stated that, where an injury affects a worker's arm and another injury affects his or her leg, and the injuries produce discrete inabilities to perform work-related acts, then the injuries result in discrete incapacities.[53] His Honour described 'a single incapacity' as a situation where there is 'only one set of work related acts which the worker can no longer do and by reference to which his [or her] incapacity is seen to exist.'[54]

44 In Medcalf v Perry,[55] a worker injured her back in 1980 and again in 1983 while working for the same employer. The New South Wales Court of Appeal (Beazley and Giles JJA and Brownie AJA) held that a single incapacity could be attributable to more than one injury and accepted the primary judge's finding that the worker's permanent incapacity for work was equally attributable to both injuries.[56]

45 The Department submitted that only the right knee injury and the related psychiatric injury were compensable under the AC Act, and therefore, only these injuries could be taken into account by the Medical Panel in determining whether Ms Walsh had no current work capacity. This is because the words 'arising from an injury' in the definition of that phrase in s 5(1) connote a causal relationship between the compensable injury and the inability to return to pre-injury employment or to suitable employment.

46 The Department relied on Ward for the proposition that, where incapacity due to compensable injury is being assessed, a supervening non work-related injury and its incapacitating consequences are not to be taken into account. Contrary to this principle, so it was said, the Medical Panel took into account the supervening bilateral shoulder condition and low back pain in determining whether Ms Walsh had no current work capacity. The Department relied on the Medical Panel's findings that the compensable right knee injury only limited Ms Walsh's 'degree of mobility', and that the compensable psychiatric injury was 'mild' in nature. Meanwhile, the non-compensable bilateral shoulder condition and the non-compensable low back pain were described by the Medical Panel as affecting Ms Walsh's capacity to undertake physically demanding work. As such, according to the Department, the Medical Panel's finding that Ms Walsh had a present inability to return to pre-injury employment or to suitable employment is likely to have been due to her non-compensable conditions. According to the Department, the Medical Panel's answer to medical question 3 would probably have been different if it had confined itself to the consequences of the compensable injuries.

47 Ms Walsh submitted that the definition of 'no current work capacity' in s 5(1) of the AC Act requires that a worker's inability to return to work either in his or her pre-injury employment or in suitable employment must 'arise from' or be materially contributed to by a compensable injury. According to Ms Walsh, the words 'arising from' do not require the exclusion from consideration of a non-compensable injury which makes a contribution of a causal nature to such an inability. As such, so it was said, the compensable injury need not be the sole relevant causal event.

48 Ms Walsh relied on Bushby and Calman for the proposition that the absence of a current work capacity is a 'single' state of affairs which must be assessed not solely by reference to a compensable injury but by taking into account the physical and other factors relevant to whether the worker is able to return to work either in his or her pre-injury employment or in suitable employment. Only when that has been done, so it was said, can it be determined whether the state of affairs 'arises from' or is materially contributed to by the compensable injury.

49 Ms Walsh acknowledged that the Medical Panel took into account the effects of her bilateral shoulder condition and low back pain in determining whether she had no current work capacity. She submitted that, although the Medical Panel did not consider her inability to return to work was only due to the compensable injuries, the Medical Panel concluded that the inability arose from the compensable injuries as well as other factors. Accordingly, so it was said, the Medical Panel had not erred in law.

50 The legal principles summarised earlier need to be applied to the present case in the context of the following unchallenged facts:

(a) There was a causal relationship between Ms Walsh's employment with the Department and her right knee injury and anxiety and depression. The anxiety and depression arose as a consequence of the right knee injury.

(b) There was no causal relationship between Ms Walsh's employment with the Department and her bilateral shoulder condition or her low back pain.

(c) There was no causal relationship between Ms Walsh's right knee injury and anxiety and depression, on the one hand, and her bilateral shoulder condition and low back pain, on the other hand.

(d) Having regard to Ms Walsh's right knee injury, anxiety and depression, bilateral shoulder condition and low back pain, she had no current work capacity.

51 Another important consideration is the extent to which the Medical Panel made any other findings about causation. As set out at [20] above, the Medical Panel concluded that 'the nature of the worker's right knee condition is such that she is not capable of performing her pre-injury duties as a casual personal carer.' This wording is not sufficient to attract the definition of 'no current work capacity' because no reference is made to whether Ms Walsh is able to return to work in suitable employment.

52 The Medical Panel discussed whether Ms Walsh was able to engage in suitable employment in the context of all of her injuries. The Medical Panel stated that the nature of Ms Walsh's right knee condition 'limits her degree of mobility', that the bilateral shoulder condition and low back pain 'further affects her capacity to undertake physically demanding work' and that 'the mild nature of her psychiatric condition ... limits her work capacity'.

53 The Medical Panel used the word 'combined' to link its assessment of the consequences of Ms Walsh's right knee condition with the consequences of her bilateral shoulder condition, low back pain and psychiatric condition. After also considering Ms Walsh's personal circumstances, employment history and the contents of vocational assessment reports, the Medical Panel concluded that Ms Walsh had no current work capacity and that this was likely to continue indefinitely. It follows that the Medical Panel had regard to all of these considerations in determining whether Ms Walsh had no current work capacity.

54 Read in context, the Medical Panel's reasons are capable of supporting an inference that the Medical Panel decided that Ms Walsh's 'no current work capacity' did not arise from and was not materially contributed to by her right knee injury and anxiety and depression. I refer, in particular, to the Medical Panel's use of the word 'mild' to describe Ms Walsh's psychiatric condition as well as her right knee condition[57] and its effect on her range of flexion, and the Medical Panel's limited conclusion that the right knee injury rendered Ms Walsh incapable of performing her pre-injury duties.

55 However, it is not necessary for me to draw that inference in order to decide this proceeding. What is important for present purposes are the following considerations:

(a) The Medical Panel did not make a factual finding that Ms Walsh's 'no current work capacity' arose from, or resulted from or was materially contributed to by her right knee injury and anxiety and depression.

(b) The Medical Panel made a factual finding that attributed Ms Walsh's 'no work capacity' to the nature of her right knee injury 'combined with' her bilateral shoulder condition, low back pain, anxiety and depression, and other factors.

56 In order for Ms Walsh to be entitled to continue to receive weekly compensation payments it was necessary for her to satisfy the definition of 'no current work capacity' in s 5(1) of the AC Act. To do so, she had to establish that she had 'a present inability arising from [her right knee injury and anxiety and depression] such that [she] is not able to return to work, either in [her] pre-injury employment or in suitable employment'.

57 In deciding whether Ms Walsh had satisfied the above statutory requirement for the purposes of answering medical question 3, the Medical Panel was obliged to apply the principles summarised at [22] to [44] above.

58 I reject Ms Walsh's submission that there is such a fundamental difference between the phrases 'results in' and 'arising from' that the principles in Ward do not apply to the present case. I also reject Ms Walsh's submission that Ward has been 'bypassed' by Bushby and Calman. As I have demonstrated, the principles in those cases are consistent with Ward. However, I agree that in the light of the wording of s 93 of the AC Act, the phrase 'arising from' in the definition of 'no work capacity' in s 5(1) includes situations where a compensable injury materially contributes to a worker's inability to return to his or her pre-injury employment or to suitable employment. It also follows that the phrase does not require that a compensable injury be the sole cause of such an inability. In the discussion that follows, I will use the phrases 'arising from' and 'arose from' as including 'materially contributed to by'.

59 The analysis in the Medical Panel's Reasons is not consistent with the principles set out at [22] to [44] above. The Medical Panel's finding that there was no causal relationship between Ms Walsh's compensable injuries (the right knee injury and the anxiety and depression) and her bilateral shoulder condition and low back pain means that principles (b) and (c) in Ward - which are set out at [25] above - were not engaged. The Medical Panel's failure to find that Ms Walsh's 'no current work capacity' arose from her compensable injuries means that principle (e) in Ward was not engaged. Likewise the facts in the present case are not analogous to those in Conkey, Bushby or Calman.

60 Ms Walsh relied heavily on the principle that a single incapacity may result from independent injuries. However, the Medical Panel in the present case did not make a factual finding that Ms Walsh had a single incapacity that arose from the compensable injuries and the non-compensable injuries. There was no finding that the separate injuries affected only one set of work-related acts which Ms Walsh can no longer perform.[58] Rather, as the Department pointed out in its submissions, the Medical Panel concluded that Ms Walsh's right knee injury affected her mobility whereas her bilateral shoulder condition and lower back pain affected her capacity to undertake physically demanding work.

61 None of the cases in which a single incapacity was held to arise from different injuries involved injuries to different body parts. Conkey involved successive myocardial infarctions, Bushby involved injuries to the worker's lumbar spine, Calman involved an aggravation of the worker's underlying anxiety disorder, and Burley and Medcalf both involved injuries to a worker's back. In Burley, Mahoney P acknowledged that, where separate injuries affect separate body parts, the injuries may produce discrete incapacities.[59]

62 In my opinion, the second sentence of principle (d) in Ward - which is set out at [25] above - would have applied to the present case if the Medical Panel had concluded that Ms Walsh's compensable injuries were insufficient to satisfy the definition of 'no current work capacity' and that that definition was only satisfied by adding to the consequences of those injuries the consequences of the bilateral shoulder condition and the low back pain. As Minter Ellison demonstrates, where there is no causal relationship between a compensable injury and a non-compensable injury and a medical panel decides that the definition of 'no work capacity' is satisfied only by aggregating the consequences of the compensable injury with the consequences of the non-compensable injury, the medical panel's opinion is vitiated by error of law.

63 In the present case, although the Medical Panel decided that Ms Walsh had 'no current work capacity' it did not do so by asking itself whether Ms Walsh's inability to return to work either in her pre-injury employment or in suitable employment arose from her right knee injury and anxiety and depression. Rather, the Medical Panel decided that Ms Walsh had no current work capacity based on a consideration of her compensable injuries and her bilateral shoulder condition and low back pain, notwithstanding the factual context referred to at [50] above. In doing so, the Medical Panel misconstrued the nature of its statutory task in answering medical question 3 and took into account considerations that it was obliged not to take into account. Accordingly, it made an error of law which is apparent on the face of the record of [60]e Opinion.60 It is not necessary for me to decide whether the Medical Panel's error of law is jurisdictional in nature.

64 It follows that Grounds 1 and 2 have been made out.

65 As it is possible that the Medical Panel may have reached a different decision if it had not misconstrued the nature of its statutory task and taken into account irrelevant considerations, the Opinion must be quashed.

66 My conclusion in relation to Grounds 1 and 2 means that it is not necessary for me to consider Ground 3. However, as the parties made submissions on Ground 3, I will briefly explain why that ground is not made out.

67 The Department submitted that the Medical Panel's Reasons were inadequate for three reasons. First, the Reasons failed to explain the relevance of Ms Walsh's supervening bilateral shoulder condition and low back pain in the consideration of whether she had 'no current work capacity'.

68 Secondly, the Department submitted that the Reasons were inadequate because they failed to explain the extent to which Ms Walsh's supervening bilateral shoulder condition and low back pain affected her capacity for work having regard to the incapacitating effects of the compensable injuries.

69 Thirdly, the Department submitted that the Reasons were inadequate because they failed to explain the effect of Ms Walsh's compensable injuries on her capacity for work notwithstanding the incapacitating effects of the supervening bilateral shoulder condition and low back pain.

70 The Department contended that, as a result of these inadequacies, the Reasons failed to provide a 'discernible path of reasoning' to show how the Medical Panel had arrived at its Opinion.

71 Ms Walsh submitted that the Medical Panel was not required to provide the information described at [67] to [69] above. Rather, the Medical Panel was only required to say why it considered that Ms Walsh's inability to return to work arose from the compensable injuries, and its reasons for this finding are apparent from the Reasons.

72 The requirement in s 68(2) of the AC Act that a medical panel give a written statement of its reasons was considered by the Victorian Court of Appeal (Nettle and Osborn JJA and Davies AJA) in Kocak v Wingfoot Australia Partners.[61] In that case, the Court stated that the content of a medical panel's written reasons will depend on the nature of the medical question referred and the particular circumstances. The Court observed that many referrals to a medical panel involve competing bodies of expert medical opinion and submissions on behalf of the parties as to fact and law. In such circumstances, the Court saw no reason to accept that a medical panel's reasons should not meet the standard required of any other statutory decision maker exercising a comparable quasi-adjudicative/investigative function. The Court said that, in such cases:

a Medical Panel's reasons ... should include a statement of findings on material questions of fact; some sort of identification of the evidence or other material upon which those finding[s] are based; and an intelligible explanation of the process of reasoning that has led the Panel from the evidence to the findings and from the findings to the Panel's ultimate conclusion.[62]

73 More recently, in Gamble v Emerald Hill Electrical Pty Ltd,[63] a differently constituted Court of Appeal (Maxwell P and Cavanough AJA), after considering Sherlock v Lloyd,[64] Minister for Immigration and Ethnic Affairs v Liang[65] and Kocak, said:

It is unnecessary for present purposes to consider whether, and if so to what extent, [the] observations [in Kocak] (including the Court's description of the function of a medical panel) diverge from the view expressed in Sherlock that, in providing an opinion on a medical question referred to it, a medical panel is performing an expert medical function, not a judicial function. It is sufficient to say that the principles enunciated in Liang continue to apply, such that a court hearing a judicial review application in relation to a Victorian medical panel will ordinarily view with disfavour grounds of review which rely on mere looseness in the language or unhappy phrasing in the Panel's reasons. Such grounds usually fail, and their inclusion tends to suggest that the judicial review application as a whole lacks legal merit.[66]

74 It is not necessary for me to decide whether the observations in Gamble - with which I agree - require a less rigorous approach than Kocak to assessing whether reasons given by a medical panel are adequate. That is because, applying the test set out in Kocak in the present case, the Medical Panel's Reasons are adequate.

75 Although the Reasons contain some ambiguities - which are partly attributable to deficiencies in the medical questions - when the Reasons are read as a whole, they disclose the Medical Panel's path of reasoning and provide an intelligible explanation for the Opinion. Importantly, the Reasons are sufficient to enable the Department to understand why the Medical Panel made findings that are adverse to the Department's position and to enable this Court to determine whether the Medical Panel performed its statutory function according to law.[67]

77 For the above reasons, the Opinion must be quashed and the medical questions must be remitted for redetermination. I will hear from the parties on the precise form of the order to be made by this Court and on the question of costs.

[1] The definition of 'suitable employment' is set out at [15] below.

[2] The medical questions were revised versions of medical questions initially referred on 15 June 2012.

[6] The first four medical questions and answers also dealt with a foot injury. As this injury is not presently relevant, I have omitted the references to it.

[7] I have omitted references in the Reasons to Ms Walsh's foot injury, as it is not presently relevant.

[9] Ward [1938] HCA 70; (1938) 61 CLR 120, 147-8 (McTiernan J).

[10] Ward [1938] HCA 70; (1938) 61 CLR 120, 129-30 (Latham CJ), 141 (Dixon J).

[11] Ward [1938] HCA 70; (1938) 61 CLR 120, 130, 137 (Latham CJ).

[12] Ward [1938] HCA 70; (1938) 61 CLR 120, 130 (Latham CJ).

[13] Ward [1938] HCA 70; (1938) 61 CLR 120, 130 (Latham CJ).

[14] Ward [1938] HCA 70; (1938) 61 CLR 120, 130 (Latham CJ).

[15] Ward [1938] HCA 70; (1938) 61 CLR 120, 141 (Dixon J).

[16] Ward [1938] HCA 70; (1938) 61 CLR 120, 130-3, 137 (Latham CJ), 138 (Rich J), 140-2, 144 (Dixon J), 148 (McTiernan J).

[17] Ward [1938] HCA 70; (1938) 61 CLR 120, 141 (Dixon J).

[18] Ward [1938] HCA 70; (1938) 61 CLR 120, 131 (Latham CJ).

[19] Ward [1938] HCA 70; (1938) 61 CLR 120, 131 (Latham CJ), 140-1 (Dixon J).

[20] (1977) 16 ALR 479 ('Conkey').

[21] Conkey (1977) 16 ALR 479, 484.

[23] Conkey (1977) 16 ALR 479, 485.

[24] In Bushby v Morris [1980] 1 NSWLR 81, 86 [15], 87 [17] ('Bushby'), the Privy Council stated that neither Butler nor Conkey contains a detailed examination of the authorities and that both cases turned upon an analysis of the medical evidence.

[26] Bushby [1980] 1 NSWLR 81, 87 [19].

[27] Bushby [1980] 1 NSWLR 81, 87 [19].

[28] Bushby [1980] 1 NSWLR 81, 87 [20].

[29] Bushby [1980] 1 NSWLR 81, 87 [20].

[31] Calman [1999] HCA 60; (1999) 167 ALR 91, 101 [40].

[32] Salisbury v Australian Iron and Steel Ltd [1943] NSWStRp 50; (1943) 44 SR (NSW) 157, 162; Butler [1958] HCA 56; (1958) 102 CLR 465, 476; Conkey (1977) 16 ALR 479, 484; Bushby [1980] 1 NSWLR 81, 86-8.

[34] Harwood v Wyken Colliery Co [1913] 2 KB 158, 166-9.

[35] Calman [1999] HCA 60; (1999) 167 ALR 91, 101 [38]-[39].

[36] [2012] VSC 375 (10 October 2012) ('Minter Ellison').

[37] Although there was some ambiguity in the medical panel's answers, the parties in Minter Ellison agreed that Judd J should decide the case on the basis that the medical panel found that there was no causal relationship between the knee injuries.

[38] Minter Ellison [2012] VSC 375 (10 October 2012) [27].

[39] Minter Ellison [2012] VSC 375 (10 October 2012) [30].

[40] Minter Ellison [2012] VSC 375 (10 October 2012) [30].

[41] Minter Ellison [2012] VSC 375 (10 October 2012) [31].

[42] Minter Ellison [2012] VSC 375 (10 October 2012) [23]-[24], [27].

[43] Minter Ellison [2012] VSC 375 (10 October 2012) [36]. See also Butler v St John Of God Health Care Inc [2008] WASCA 174 (22 August 2008) [39] (Newnes AJA).

[44] Minter Ellison [2012] VSC 375 (10 October 2012) [39].

[45] Minter Ellison [2012] VSC 375 (10 October 2012) [65].

[47] Grech (2006) 14 VR 602, 616-17 [58] (citations omitted). His Honour cited Latham CJ's judgment in Ward for this proposition.

[48] [2006] VSCA 141 (7 July 2006) ('Zlateska').

[49] Zlateska [2006] VSCA 141 (7 July 2006) [7].

[50] [1996] NSWCA 512 (5 December 1996) ('Burley').

[51] Burley [1996] NSWCA 512 (5 December 1996) 21. His Honour stated that a single incapacity may result from independent injuries with different employers: at 23.

[52] Burley [1996] NSWCA 512 (5 December 1996) 28.

[53] Burley [1996] NSWCA 512 (5 December 1996) 16-17.

[54] Burley [1996] NSWCA 512 (5 December 1996) 17.

[56] Medcalf [2000] NSWCA 230; (2000) 50 NSWLR 211, 215 [18]-[19], 218 [35]-[36].

[57] The Medical Panel stated that the pathology in Ms Walsh's right knee was 'mild to moderate, not severe'.

[58] Burley [1996] NSWCA 512 (5 December 1996) 17.

[59] Burley [1996] NSWCA 512 (5 December 1996) 16-17.

[60] Section 10 of the Administrative Law Act 1978 provides that the reasons for decision of a tribunal form part of the record of the decision.

[61] [2012] VSCA 259 (23 October 2012) ('Kocak'). Special leave to appeal to the High Court was granted on 10 May 2013.

[62] Kocak [2012] VSCA 259 (23 October 2012) [48] (citations omitted).

[63] [2012] VSCA 322 (20 December 2012) ('Gamble').

[66] Gamble [2012] VSCA 322 (20 December 2012) [20] (citations omitted).

[67] Masters v McCubbery [1995] VICSC 209; [1996] 1 VR 635, 640, 650-1 (Winneke P), 653 (Ormiston JA), 661 (Callaway JA).

Workers' Compensation Act 1926(NSW)

Court (General Civil Procedure) Rules 2005

Compensation Act 1985

Compensation Act 1987

At a glance

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