Plaintiff v Firstnamed Defendant Secondnamed Defendant Thirdnamed Defendant Fourthnamed Defendant Fifthnamed Defendant

1 On 6 February 2003, Mr Hayden Nicholls, the plaintiff, suffered injury in the course of his employment with Schmidt Harvesting Pty Ltd, the fifth defendant. Mr Nicholls was working behind a grape harvesting machine when it stopped suddenly. As he was walking around the machine, he slipped on wet ground and his hand entered the back of the machine and came into contact with a rotating fan blade.

2 Subsequently, Mr Nicholls made a claim under the provisions of the Accident Compensation Act 1985 ("the Act"). On 23 June 2008, the Victorian WorkCover Authority ("the Authority") accepted liability for the following injuries:

"Multiple compound fractures of the right hand and arm; degloving of right hand, crush injury to the right hand, amputation of the fifth digit, depression, anxiety and nervous shock, which [the plaintiff claims] to have sustained in the course of employment on 6 February 2003".

3 Mr Nicholls accepted the liability determination. However, a dispute arose as to the Authority's assessment of Mr Nicholls' injuries and the calculation of his entitlements.

4 The fourth defendant is the Convenor of Medical Panels pursuant to the provisions of the Act. A medical panel comprising the first, second and third defendants was convened to answer questions concerning Mr Nicholls' whole person impairment. On 24 October 2008, the Medical Panel answered the referred medical questions as follows:

"Question i) What is the worker's degree of permanent whole person impairment resulting from the accepted injuries as assessed in accordance with Section 91 and is the impairment permanent?

Answer: In the Panel's opinion the worker has a 23% whole person impairment including total loss, resulting from the accepted multiple compound fractures of right hand and arm; degloving of right hand, crush injury to the right hand, amputation of the 5th digit injury when assessed in accordance with Section 91 of the Act. The degree of impairment is permanent.

In the Panel's opinion the worker has an 18% whole person impairment excluding total loss, resulting from the accepted multiple compound fractures of right hand and arm; degloving of right hand, crush injury to the right hand, amputation of the fifth digit injury when assessed in accordance with Section 91 of the Act. The degree of impairment is permanent.

The Panel is also of the opinion that there is an 8% psychiatric impairment resulting from the accepted depression, anxiety and nervous shock injury, when assessed in accordance with Section 91(2) of the Act. The degree of psychiatric impairment is permanent within the meaning of the Act.

For the purposes of Sections 134AB(3) & (15) of the Act there is a combined whole person impairment of 29% resulting from the accepted physical and psychiatric injuries. The degree of impairment is permanent within the meaning of the Act.

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

Answer: Yes, total loss of the little finger of the right hand."

5 Only the plaintiff and the fifth defendant took an active part in this proceeding. The first to fourth defendants indicated that they would submit to such orders as the Court might make.[1] The dispute concerns the calculation of the whole person impairment of 29%. This figure was arrived at by combining a number of other impairments. The plaintiff's complaint is that the impairments found by the Medical Panel and combined in the order combined by the Medical Panel total 29%. However, the same impairments combined in a different order (using the combined values chart in the American Medical Associations Guides to the Evaluation of Permanent Impairment (4th Edition) (the "AMA Guides") produces the figure of 30%.[2] In essence, the plaintiff contends:

(a) In combining the impairments in an order that led to a total of 29%, the Medical Panel fell into jurisdictional error; alternatively,

(b) the Medical Panel failed to provide adequate reasons as to why it combined the impairments it found in the order it combined them to reach a whole person impairment of 29%, rather than 30%.

6 Central to the resolution of this proceeding, is the proper construction and operation of the AMA Guides, and in particular the way in which multiple different impairments are to be combined so as to arrive at a whole person impairment. For the reasons given below, the opinion of the Medical Panel that the plaintiff's whole person impairment is 29% must be quashed.

7 The Panel assessed the plaintiff's psychiatric impairment in accordance with ss 91(2) and (6) of the Act.[3] The psychiatric impairment assessed by the Panel was 8%. There is no dispute in relation to this figure.

8 The Panel also assessed the scarring associated with the plaintiff's injuries. This assessment was performed in accordance with section 13.5 of Chapter 13 of the AMA Guides. The whole person impairment for scarring was assessed at 5%. There is no dispute in respect of this figure.

9 The Panel assessed the plaintiff's right arm injuries as constituting a 19% whole person impairment. This impairment was arrived at by adding impairments in respect of the right thumb, right index figure, right middle finger, right ring finger and right little finger, converting the total of these impairments to an upper extremity impairment, combining this upper extremity impairment with two other upper extremity impairments (the wrist and the elbow) and converting the total upper extremity impairment to a whole person impairment. The dispute between the parties so far as this calculation is concerned relates to the assessment of the right ring finger.

10 The right ring finger was assessed in accordance with section 3.1g of the AMA Guides. This involved assessing the impairments of the distal interphalangeal joint (DIP joint), proximal interphalangeal joint (PIP joint) and metacarpophalangeal joint (MP joint) of the right ring finger. The Panel assessed the impairments of the DIP joint, PIP joint and MP joint at 5%, 64% and 25% respectively.

11 The dispute between the parties so far as the right upper extremity (right arm) is concerned relates to the combining of the right ring fingers DIP, PIP and MP joint impairments. Combined in the order combined by the Medical Panel (which does not involve a mere addition of the figures, but a calculation which I will explain in greater detail below) produced a combined impairment of the right ring finger of 74%. However, the plaintiff contends that the DIP, PIP and MP joint impairment figures should have been combined in a different order so as to produce an impairment of the right ring finger of 75%.

12 In addition to assessing the impairment of the DIP, PIP and MP joints of the right ring finger, the Panel also assessed a 40% finger impairment in relation to a rotational deformity of the right ring finger. There is no dispute about this figure. However, when this figure of 40% is combined with either 75% or 74%, it produces a total impairment in respect of the right ring finger of 85% or 84% respectively. The importance of these figures is that they convert into an impairment of the hand of 9% or 8%. When these figures are added to the other hand impairments (about which there is no dispute), they produce the following different results:

(a) 2 (thumb) + 5 (index) + 4 (middle) + 9 (ring) + 10 (little) = 30

(b) 2 (thumb) + 5 (index) + 4 (middle) + 8 (ring) + 10 (little) = 29

13 When the figures of 30 and 29 are converted from hand impairments to upper extremity impairments, the resultant upper extremity impairments become:

14 When the upper extremity impairments are converted into whole person impairments, the figure of 33 becomes 20 and the figure of 32 becomes 19. Thus, it can be seen that the dispute over the order in which the DIP, PIP and MP joint impairments of the right ring finger are combined has the capacity to alter the whole person impairment in respect of the plaintiff's right arm from 19% to 20%.

15 If the right arm whole person impairment is 20%, then it does not matter in which order this impairment is combined with the 5% scarring impairment and 8% psychiatric impairment. All six combinations come to 30% using the combined values chart. However, if the right arm impairment is 19%, then (using the combined values chart) four of the six possible combinations produce a total of 29%,[4] whereas only two produce a total of 30%.[5]

16 In section 2.2 of the AMA Guides, it is stated:

"If the physician believes that the patient has two significant, unrelated conditions and that the extent of each should be estimated, this may be done. The whole person impairment estimates for the two separate conditions then would be combined into an overall impairment estimate using the Combined Values Chart."

17 The issue of combining impairment assessments is referred to again in section 3.1e. Section 3.1e deals with fingers and hands, and provides:

"When there is more than one impairment of a member, such as abnormal motion, sensory loss, and amputation of a finger, the impairments must be combined before the conversion to the next larger unit, in this case the hand, is made.

The method for combining impairments is based on the idea that a second or a succeeding impairment should apply not to the whole, but only to the part that remains after the first and other impairments have been applied. The combined value determination is based on the following formula: A% + B% x (100% - A%) equals the combined value of A% plus B%.

The Combined Values Chart on p 322 may be used to determine the combined value of two impairment percents or, in succession, any number of impairment percents."[6]

18 The combined values chart consists of three pages of the AMA Guides which permit the user to combine any two impairments between 1% and 99%. On the first page of the combined values chart, the following explanation is given:

"The values are derived form the formula A + B (1-A) = combined value of A and B, where A and B are the decimal equivalents of the impairment ratings. In the chart all values are expressed as percents. To combine any two impairment values, locate the larger of the values on the side of the chart and read along that row until you come to the column indicated by the smaller value at the bottom of the chart. At the intersection of the row and the column is the combined value.

For example, to combine 35% and 20% read down the side of the chart until you come to the larger value, 35%. Then read across the 35% row until you come to the column indicated by 20% at the bottom of the chart. At the intersection of the row and column is the number 48. Therefore, 35% combined with 20% is 48%. Due to the construction of this chart, the larger impairment value must be identified at the side of the chart.

If three or more impairment values are to be combined, select any two and find their combined value as above. Then use that value and the third value to locate the combined value of all. This process can be repeated indefinitely, the final value in each instance being the combination of all the previous values. In each step of this process the larger impairment value must be identified at the side of the chart.

Note: If impairments from two or more organ systems are to be combined to express a whole-person impairment, each must first be expressed as a whole-person impairment percent."

19 When one examines the figures in the combined values chart, one immediately sees that the combined values have been rounded to the nearest whole number. For example, the combined value of 10% plus 7% is shown as 16% in the chart, whereas applying the formula A + B (1-A) produces the following result:

20 Whilst rounding to the nearest whole number after combining two impairments does not produce a problem (and is arguably contemplated by s 91(10) of the Act), when combining three or more impairments, rounding as one goes has the capacity to produce different end results. For example, 19 combined with 8 produces 25, which, when combined with 5, produces 29. However, 8 combined with 5 produces 13, which, when combined with 19, produces 30. On the other hand, if one applied the formula to these three impairments, then (in whatever order the calculation was to be performed) the result would be 29.206% (or 29% if rounded in accordance with s 91(10) of the Act).

21 Similarly, if one applied the formula to the right ring finger DIP, PIP and MP joint impairments, then 64%, 25% and 5% would combine to 74.35% (or 74% if rounded in accordance with s 91(10)). Further, it is to be remembered that a combined impairment of the right ring finger DIP, PIP and MP joint impairments of 74% leads to a right arm whole person impairment of 19% when the other undisputed assessments are appropriately added, combined, converted and combined again. However, if one combines 74.35% with the 40% ring finger impairment in relation to the rotational deformity, one arrives at a total impairment in respect of the right ring finger of 84.61%. When this is rounded up to 85% in accordance with section 91(10), the ring finger's contribution to the hand impairment goes from 8% to 9%. Further, when one follows the figures through, the right arm whole person impairment figure becomes 20%.

22 The plaintiff's contentions that the Panel fell into jurisdictional error and/or provided inadequate reasons are summarised in the outline of plaintiff's submissions[7] as follows:

"Jurisdictional Error

23. The order of combination of impairments using the Chart results in different combined whole person impairment figures. The combined whole person impairment figure directly impacts upon the Plaintiff's compensation entitlements and his access to common law damages. Therefore the order of combination and use of the Chart is a critically important consideration for the Panel.

24. There is no evidence that the Panel took this critically important consideration into account when determining the Plaintiff's combined permanent whole person impairment. The inference that no consideration was given to this issue by the Panel is virtually inescapable. Jurisdictional error is therefore made out.

25. Had the Panel given consideration to the issue of the order of combination of impairments then it should, having regard to the remedial nature of the provisions, have adopted that combination most advantageous to the Plaintiff.

26. The failure of the Medical Panel to use the order of combination of impairments most advantageous to the Plaintiff supports the conclusion that the Panel has simply failed to take into account as a consideration the possibility of achieving different permanent whole person impairment figures by altering the order of combination of impairments. Further, proper construction of the objects of the Act require the adoption of that order of combination of impairments most advantageous to the Plaintiff.[8] The failure to do so is itself a jurisdictional error.

Reasons

27. If the jurisdictional argument fails it must be on the basis that the Panel has chosen an order of combination of impairments after consideration of the alternatives. In that case, the reasons of the panel are clearly inadequate."

(a) The Panel, when called upon to combine multiple impairments, worked from largest to smallest - and in doing so performed its assessment in accordance with the AMA Guides.

(b) The application of the formula A + B (1 - A) supports 29% (and not 30%) regardless of the order of combination.

(c) The highest to lowest approach is supported by "training commonly given to Victorian medical assessors"; "scholarly literature";[9] the fact that the 6th edition of the AMA Guides explicitly requires a highest to lowest order for combining three or more impairments and some decided cases have performed the calculation from highest to lowest.[10]

(e) The Panel's reasons are not inadequate because they reveal the path of reasoning (in this case the adoption of a highest to lowest approach, which the fifth defendant asserts "can hardly be regarded as unexpected or controversial").[11]

24 The relevant principles in applications of this kind have been stated and summarised on a number of occasions.[12] It is convenient to restate them here:

(a) First, it is not enough for a plaintiff to show that the medical panel's reasons for its decision are so expressed as to suggest the possibility that the panel proceeded upon a wrong view of the law. The Court is not entitled to interfere with the decision unless it is satisfied that there was in fact a vitiating error of law.

(b) Secondly, a medical panel's reasons should enable a Court and the parties to understand that the question referred to the panel has been properly considered according to law and that the opinion furnished is founded on the appropriate application of the panel members' medical knowledge and expertise.

(c) Thirdly, the medical panel is an expert tribunal, whose members are chosen for their experience and its findings need to be viewed in that light.

(d) Fourthly, a medical panel's reasons are those of a tribunal, not that of a judicial body, and must be viewed from that perspective.

(e) Fifthly, the reasons of a medical panel are to be read in context, taking into account the background of the case, the material provided and the issues which have to be determined.

(f) Sixthly, the reasons of a medical panel are meant to inform, and over-zealous judicial review is to be eschewed.

(g) Seventhly, the reasons of the medical panel do not need to advert in detail to those matters it has taken into account.

(h) Eighthly, the reasons should give sufficient explanation so as to enable a review thereof by the Supreme Court either under the Administrative Law Act or otherwise by judicial review.

(i) Ninthly, although the medical panel's task is to determine questions of a medical nature, it does not follow that it cannot, or should not, provide the reasons for its determination. Even the most simple of medical questions determined by the panel will nonetheless be based on a process of reasoning and hence enable it to provide reasons.[13] As was said by Callaway JA in Masters v McCubbery:[14]

"There is nothing in the nature even of the simplest medical question that is incompatible with the furnishing of reasons. For example one doctor could sensibly ask another the 'reasons' for his or her diagnosis of a patient's illness."

25 Section 91 of the Act requires the plaintiff's impairment assessment to be made "in accordance with" the AMA Guides.[15] In H.J. Heinz & Anor v Kotzman & Ors,[16] Kyrou J discussed some general principles in relation to the interpretation of the AMA Guides. His Honour also discussed the meaning of the phrase "in accordance with" in s 91 of the Act. His Honour said:[17]

"24. The interpretation of the Guides is a question of law.[18] The determination of a level of impairment is a question of fact.[19]

25. It has been said that to the extent that an Act requires determinations of impairment to be made in accordance with the Guides, the Guides has the force of law[20] and is a legislative document.[21]

26. However, the Guides is, as its title suggests, a guide.[22] It was written by expert medical practitioners and not by statutory draftspeople, and should not be overlaid with legalistic - or a lawyer's precise - interpretation.[23] It is of paramount importance to be faithful to the Guides' plain words.[24] The Guides should not be interpreted as if it was a statute.[25]

27. The use of the Guides is designed to promote precision, certainty and consistency.[26] Its purpose is to make as objective as possible the process of estimating impairment by reference to sufficient medical and non-medical information to justify the estimate.[27]

28. If there is any inconsistency between the AC Act and the Guides, the AC Act will prevail. If there is any inconsistency between the text in the Guides and an example which seeks to illustrate what is said in the text, the text will prevail.[28]

...

44. The meaning of the phrase 'in accordance with' depends on the context. It is generally taken to mean 'in conformity with', although in some contexts, strict compliance is not required.[29]

45. In order for a medical panel to assess impairment 'in accordance with the [Guides]' as required by s 91 of the AC Act, it must act in conformity with the Guides. This means that it must apply the methodologies, processes and criteria set out in the Guides for the relevant condition, body part or system and adhere to any minimum or maximum values set out in the Guides for that condition, body part or system. Where the Guides contains a table that is applicable to a condition, body part or system, an assessment based on that table will not be in accordance with the Guides unless the categories, descriptions, criteria, ranges, adjustments and other elements of the table that are relevant to the condition, body part or system are adhered to and complied with.

46. Some provisions of the Guides, including some tables, provide alternative methodologies or set out ranges, and require the exercise of professional judgment in selecting the most appropriate methodology or in determining where in the range the relevant condition or body part falls. However, the Guides does not permit the exercise of professional judgment at large, unconstrained by the specific requirements of each methodology or table that it sets out. Once a particular methodology or table is selected, its requirements, including any limitations, must be applied in the manner set out by the Guides even if the outcome may appear sub-optimal. This is so because the role conferred by the AC Act on a panel is not to arrive at a correct or fair assessment, but rather to arrive at an assessment that is the product of the application of the Guides.

47. The Guides itself makes it clear that the protocols and methodologies it sets out are intended to be standardised processes which produce similar outcomes irrespective of who conducts the assessment. In particular, the statement in s 1.2 of the Guides which I have set out ... [above][30] highlights that in order for an assessment to be in accordance with the Guides, the panel must follow the protocols and tables in the Guides."[31]

Do the AMA Guides require multiple impairments to be combined in any particular order?

26 At the heart of this case is the question of whether the AMA Guides require multiple impairments to be combined in any particular order. The plaintiff contends that all possible combinations should be examined and the combination most favourable to the plaintiff should be adopted either because the Act (in providing for compensation) is remedial (and therefore the Act and the AMA Guides should be construed beneficially to the plaintiff) or because the adoption of a contrary position has the capacity to deprive the plaintiff of an ability to commence common law proceedings. Without being the entire response to the plaintiff's contentions, the fifth defendant argues that a highest to lowest approach (that is, combining the highest numbers first and then combining progressively lower numbers to the total) is appropriate. This approach is said to be supported by "the scholarly literature"[32] and decisions of VCAT.[33]

27 A possible competing approach might simply be to apply the formula A + B (1 - A) until all impairments have been dealt with. This approach has the advantage of producing the same answer irrespective of the order in which the impairments are combined. Whilst the Guides contain statements that multiple impairments "should be combined by means of the combined values chart",[34] on their proper construction, the Guides do not mandate the use of the combined values chart to the exclusion of the formula A + B (1 - A). To hold otherwise would be to render otiose the references in the Guides to the formula and the matters and philosophy upon which the formula is based.

28 A difficulty with the plaintiff's approach of identifying all possible combinations and then combining multiple impairments so as to produce the highest possible figure is that in some cases this will necessitate many calculations being performed in order to ascertain which one produces the best figure for the plaintiff. For example, whilst a six impairment case might not be common, six impairments can be combined in 720 different ways. Even if one excluded every second combination on the basis that the order in which the first two impairments are combined does not have the capacity to change the result, this would leave 360 separate calculations. One would not lightly conclude that such an inconvenient and cumbersome approach was necessitated by the Act and the Guides.[35]

29 A further difficulty with the plaintiff's submission is that it would require the Guides to be applied differently for the purposes of compensation cases than from the way in which their authors intended them to be applied generally. For example, on p 12/267 of the Guides,[36] an example is given of combining a 10% impairment with another 10% impairment with a 5% impairment. The example suggests that the combined impairment is 23%. This result can only have been achieved by combining the two 10% impairments (to make 19%) and combining the resultant 19% impairment with 5% to make 23%. However, on the plaintiff's submission, the impairment should have been 10% combined with 5% to make 15%, which, when combined with a further 10%, produces 24%.

30 Finally, on this aspect of the case, I should note for the sake of completeness Kellam J's rejection in Re Coverdale and Transport Accident Commission[37] of the submission that a rounding up which was permitted by the Second Edition of the AMA Guides[38] should take place "as a matter of course".[39] By parity of reasoning, there is no basis for combining multiple impairments in such a way that the most favourable result is achieved for the plaintiff as a matter of course. To do so would simply compound rounding errors so that the end result was as far from the result achievable by applying the formula as is possible (although accepting that a similarly skewed result could be achieved in the other direction by combining the impairments in the way least favourable to the plaintiff).

31 It is clear that the authors of the AMA Guides never anticipated the problem that has arisen in this case. A reason for this is that the Guides do not purport to be able to assess whole person impairment to the nearest percentage point. Indeed, in section 2.2, it is stated that the whole person impairment may be rounded "to the nearer of the two nearest values ending in zero or five" (e.g. 25%, 30%, 35%).[40]

32 The fifth defendant submits that impairments can (and should) be combined from highest impairment to lowest impairment. However, if one uses the combined values chart, then there is an element of capriciousness about such an approach. Put simply, combining from highest to lowest will in some cases produce a figure in excess of that produced by the application of the formula A + B (1 - A) - and in other cases a figure less than the amount produced by the formula. Given the references to rounding in the AMA Guides, it is clear that the authors of the Guides did not intend to produce results of such a random nature. Further, it is difficult to believe that Parliament intended such random results.[41]

33 Nowhere in the AMA Guides is it stated that multiple impairments should be combined from highest to lowest. There are examples in the Guides where multiple impairments have been combined from highest to lowest.[42] Similarly, there are examples where the combination has not been from highest to lowest.[43]

34 If one goes to the explanatory text on the first page of the combined values chart,[44] there is some support for the proposition that when combining two impairments, one starts with the larger impairment. However, as I have said above, the order in which only two impairments are combined does not change the result according to the combined values chart. The instruction to start with the larger figure in a two impairment case merely reflects the construction of the chart. For example, if one attempted to combine a 15% impairment with a 20% impairment by starting with 15% and reading across the row, one would observe that the chart terminates before getting to 20 and no result would be achieved.

35 In any event, the real impediment to using the explanatory text as support for the proposition that the Guides mandate a highest to lowest approach is the sentence "If three or more impairment values are to be combined, select any two and find their combined value as above". A fair reading of the explanatory text suggests that in a multiple impairment case, one can start the process of combining with any two impairments (be they smallest or largest or otherwise), as long as in each step of the process the larger of the two impairments is identified first (and this only because of the construction of the chart).

36 As to the fifth defendant's reliance upon scholarly literature, decided cases and the 6th edition of the AMA Guides, the following points may be made:

(a) First, the literature does not disclose any reasoning process whereby the AMA Guides are to be construed as mandating a highest to lowest approach. At best for the fifth defendant, the literature contains examples showing how calculations might be performed and adopting a highest to lowest approach without any explanation or discussion of the issue.

(b) Secondly, in the decided cases where it can be gleaned that a highest to lowest approach was used, there is no suggestion that the matter was an issue between the parties or that the question was given any consideration at all.

(c) Thirdly, the express statement in the 6th edition of the AMA Guides concerning a highest to lowest approach cannot assist in the construction of the 4th edition of the Guides where no such statement exists.[45]

37 In an attempt to support a highest to lowest approach, the fifth defendant took me to material demonstrating that assessors are being trained to use a highest to lowest approach in multiple impairment cases. It was submitted that the Guides gave a discretion as to the order of the combination of multiple impairments and that in order to promote consistency, certainty and identical outcomes, a highest to lowest approach was reasonable. It was said that over time this would "work itself out". By that, I understood the fifth defendant to be submitting that whilst such an approach would deny a higher impairment value to some workers, it equally would grant a higher impairment value to other workers. However, this does not answer the random (and some might say, capricious) nature of the exercise being undertaken to (in some cases) determine whether a common law proceeding can be commenced.

What approach is to be taken in a multiple impairment case?

38 In many cases there will be no dispute between the parties as to the appropriate order of combination of multiple impairments. Indeed, in many of those cases, there may be no dispute as to the appropriateness of a highest to lowest approach. A dispute is only likely to arise where the combination of multiple impairments in different orders produces significantly different results (in this case, the difference between being able to commence a common law proceeding and not being able to commence such a proceeding).

39 I have already said why the AMA Guides do not mandate a highest to lowest approach in every case or an approach which involves performing all possible combinations in order to achieve the one most beneficial to the plaintiff. The debate to this point has proceeded on the basis that in a multiple impairment case, the combined values chart must be used. There is no issue as to the appropriateness of its use in a case where only two impairments need to be combined. However, the issue is different for three or more impairments.

40 In my view, the Guides do not require the combined values chart to be used without reference to the formula A + B (1 - A). The formula A + B (1 - A) reflects precisely the statement in section 3.1e that the method for combining impairments is based on the idea that a second or succeeding impairment should apply not to the whole, but only to the part that remains after the first and other impairments have been applied. Further, the Guides provide that the combined values chart "may" be used to determine combined values.[46]

41 In multiple impairment cases where different results are capable of being achieved by combining impairments in different orders, the most rational approach may be to simply apply the formula A + B (1 - A) to achieve a precise figure - and one that will not vary depending upon which figures are chosen in what order. This approach has the benefit of precision, certainty and consistency.[47] Such an approach also eliminates the possibility of rights being affected by matters no more substantial than rounding errors that might operate randomly in favour of one party or against the interests of another party.[48]

42 There is no reference in the reasons of the Medical Panel to the possibility that combining impairments in different orders might produce different results. Whilst there might be cases where this issue could not be expected to be at the forefront of a medical panel's consideration, this is not such a case. A case where multiple impairments, when combined total 29% or 30%, should raise immediately the issue of the proper order of combination and the question of whether or not the formula A + B (1 - A) should simply be applied to achieve a result that can then be rounded in accordance with s 91(10).

43 The only inference one can draw from the reasons of the Medical Panel is that these issues were not considered. In not considering these issues, the Panel committed a jurisdictional error.[49] The fifth defendant submits that the Panel's reasons reveal that it adopted the highest to lowest approach for combining multiple values.[50] If that is the approach the Medical Panel took, then it appears that this approach was taken because of some perception that the Guides mandate a highest to lowest approach.[51] However, if such an approach was taken, then it involved a misconstruction of the Guides for the reasons I have given above. Such a misconstruction constitutes jurisdictional error.

44 The Panel's reasons do not disclose any reasoning path as to why a highest to lowest approach was taken (if that was the approach taken). The lack of such reasons warrants the inference that the Panel failed to consider the material issue as to the proper way in which the impairments in this case should have been combined. This conclusion is, of itself, sufficient to justify the quashing of the Medical Panel's opinion.[52] However, in defence of the Panel's opinion, the fifth defendant relies upon the fact that the application of the formula A + B (1 - A) to the 19%, 8% and 5% impairment produces 29.206% - or 29% when rounded down in accordance with s 91(10) of the Act.[53]

45 The answer to this submission is that if one applies the formula to the entire assessment process, the correct rounded result is 30%. This is so because of an application of the formula at an antecedent stage to that referred to by the fifth defendant. The right ring finger was found to have a DIP joint impairment of 5%, a PIP joint impairment of 64% and an MP joint impairment of 25%. When one applies the formula to these three impairments, one arrives at 74.35%. If one then applies the formula to this figure and the 40% impairment in respect of the rotational deformity of the right ring finger, one arrives at 84.61%. Rounding 84.61% in accordance with s 91(10) produces 85%,[54] which then produces a hand impairment associated with the right ring finger of 9% instead of 8%.[55] This then follows through to an upper extremity (arm) whole person impairment of 20%. Applying the formula to impairments of 20%, 8% and 5% produces 30.08% - rounded down in accordance with s 91(10) to 30%.

46 The Panel has either failed to consider the issue of the way in which the multiple impairments it assessed should be combined or has misconstrued the AMA Guides as mandating a highest to lowest approach in every case. In either event, the Panel committed a jurisdictional error and its conclusion that the plaintiff's whole person impairment was 29% must be quashed.

47 Whilst the relief sought in the amended originating motion was that the opinion of the Medical Panel be quashed and that the matter be referred back to the Convenor of Medical Panels for determination by a differently constituted medical panel, in argument, Senior Counsel for the plaintiff acquiesced with the suggestion that in the event that I found jurisdictional error, the matter could be remitted to the original medical panel (the first three defendants) for re-determination so far as the question of combination of impairments was concerned. In my view, the present case is not one of those cases where a referral back to the original medical panel has "an air of unreality" because of the risk that such an order "would merely give the tribunal an opportunity to patch up [its] reasons".[56] In the circumstances, I am prepared to refer the matter back to the first three defendants for reconsideration and re-determination in accordance with these reasons.

48 I will hear the parties on the precise form of order and on the question of costs.

[1] Cf R v The Australian Broadcasting Tribunal & Ors; ex parte Hardiman & Ors [1980] HCA 13; (1980) 144 CLR 13.

[2] The difference between 29% and 30% is not trivial. Apart from differences in entitlements to compensation under the Act, a whole person impairment of 30% or more is one of the gateways entitling a worker to commence common law proceedings in accordance with s 134AB.

[3] That is, as if "The Guide to the Evaluation of Psychiatric Impairment for Clinicians" were substituted for Chapter 14 of the AMA Guides and excluding any psychiatric injury that arose as a consequence of (or secondary to) a physical injury.

[4] 19 + 8 + 5, 19 + 5 + 8, 8 + 19 + 5 and 5 + 19 + 8.

[8] In support of this submission, the plaintiff relied upon a series of well known authorities in relation to the construction of beneficial or remedial legislation, including Dodd v Executive Air Services [1975] VicRp 66; [1975] VR 668; Khoury v Government Insurance Office (NSW) [1984] HCA 55; (1984) 165 CLR 622; Amaca v Cremer [2006] NSWCA 164; (2006) 4 DDCR 42; State Trustees v TAC [2002] VSC 428, [25] and Hegedis v Carlton & United Breweries [2000] VSC 380; (2000) 4 VR 296, [32] (and on appeal at [2002] VSCA, [2]).

[9] Reference was made to "The Guides Casebook; Cases to Accompany Guides to the Evaluation of Permanent Impairment 4th edition" at pp 73-4.

[10] See for example Griffiths v TAC [2005] VCAT 819 at paragraph [38] and Zagar v TAC [2005] VCAT 820 at paragraph [63].

[11] See paragraph 34 of the fifth defendant's outline of submissions dated 1 March 2010.

[12] See in particular the judgment of Forrest J in Dixon v Hacker [2007] VSC 342 at paragraphs [40] - [44]. See also Davidson v Fish [2008] VSC 32; Amendola v Coles Supermarkets Australia Pty Ltd [2008] VSC 36; Bluescope v Nisselle & Ors [2008] VSC 72; and Robert Bosch (Australia) Pty Ltd v Barton [2008] VSC 227. See further Portland Properties Pty Ltd v MMBW (1971) 38 LGRA 6 at 18, Kymar Nominees Pty Ltd v Sinclair [2006] VSC 488 at paragraph [9] and Treacy v Newlands & Ors [2008] VSC 395.

[13] See Masters v McCubbery [1995] VICSC 209; [1996] 1 VR 635 at 661 per Callaway JA.

[15] Subject, amongst other things, to what I have already said in relation to the operation of ss 91(2) and (6).

[16] [2009] VSC 311.

[17] At [2009] VSC 311, paragraphs [24]-[28] and [44]-[47].

[18] Barnett v Transport Accident Commission (1999) 15 VAR 414; [1999] VSC 484, [30]; aff'd and reasons adopted in Barnett v Transport Accident Commission (2001) 34 MVR 26; [2001] VSCA 12.

[19] Gillat v Transport Accident Commission (2003) 38 MVR 463; [2003] VSC 15, [27] ('Gillat').

[20] Transport Accident Commission v Elworthy [2007] VSC 48, [20] ('Elworthy').

[21] State Trustees Ltd v Transport Accident Commission [2002] VSC 428; (2002) 6 VR 359, 365 [25].

[22] Lake v Transport Accident Commission [1998] 1 VR 616, 626 ('Lake'); Connelly v MMI Workers Compensation (Vic) Ltd [2003] VSCA 60; (2003) 6 VR 555, 557 [9] ('Connelly').

[23] Lake [1998] 1 VR 616, 626; Connelly [2003] VSCA 60; (2003) 6 VR 555, 557-8 [9]; Elworthy [2007] VSC 48, [21].

[24] Elworthy [2007] VSC 48, [21].

[25] Martinez v Dynamic Engineering Construction Co Pty Ltd [2005] VSC 204, [10].

[26] Elworthy [2007] VSC 48, [20].

[27] Gillat [2003] VSC 15, [47].

[28] Mountain Pine Furniture Pty Ltd v Taylor [2007] VSCA 146; (2007) 16 VR 659, 669 [33].

[29] See, eg, Waycott v Koffler (1983) 25 NTR 1, 8; Hutchins v Commissioner of Taxation (1987) 14 FCR 510, 529; Australian Capital Television Pty Ltd v Minister for Transport and Communications (1989) 86 ALR 119, 147-8; Walker v Wilson [1991] HCA 8; (1991) 172 CLR 195, 207-8; Re La [1993] FCA 62; (1993) 41 FCR 151, 158.

[30] In paragraph [11] of his Honour's judgment, Kyrou J set out part of section 1.2 of the Guides in the following terms:

"[T]he Guides chapters on the organ systems containing protocols or descriptions of ways to evaluate a particular body part, function or system. ... [T]he chapters contain tables relating to the evaluation protocols. If the physician has followed the protocols and tables, then the reported findings will be congruent with the Guides criteria."

[32] See paragraph 24 of the fifth defendant's outline of submissions dated 1 March 2010.

[33] See in particular Griffiths v TAC [2005] VCAT 819 at paragraph [38] and Zager v TAC [2005] VCAT 820 at paragraph [63].

[35] Whilst the fifth defendant filed affidavit evidence suggesting that in a six impairment case there were 720 permutations, in a seven impairment case there were 5,040 permutations and in an eight impairment case there were 40,320 permutations, when one has regard to the fact that the combined values chart produces the same answer when one combines two figures in either order, the number of distinct calculations is ultimately a fraction of the number of permutations suggested. Specifically, in a six impairment case, the number of distinct calculations is probably only 90. Nevertheless, what I have said about requiring a medical panel to identify the number of distinct calculations out of a large number of possible permutations militates against acceptance of the plaintiff's submission on this issue.

[37] (1999) 15 VAR 240.

[38] As to which, now see s 91(9) of the Act.

[39] Cf Connelly v MMI Workers Compensation (Vic) Limited [2003] VSCA 60 at paragraph [27].

[40] But cf s 91(9) of the Act which prohibits this rounding for the purposes of assessments made in accordance with the provisions of the Act.

[41] But cf Haden Engineering Pty Ltd v McKinnon [2010] VSCA 69, per Maxwell P at [3] and Nettle JA at [52].

[42] See for example the examples given at p 3/30 top left column; p 3/35 top left column; p 3/65 bottom right column and p 12/267 middle left column.

[43] See for example the example given at the foot of the right column on p 3/34.

[45] Cf Mountain Pine Furniture Pty Ltd v Taylor & Ors [2007] VSCA 146 per Nettle JA at [31].

[47] See Martinez v Dynamic Engineering Construction Co Pty Ltd [2005] VSC 204, [10] and H J Heinz & Anor v Kotzman & Ors [2009] VSC 311, [27].

[48] In reaching this conclusion, I have not overlooked the randomness of withholding common law rights to a worker with a whole person impairment of 29.4999%, but granting them to a worker with a whole person impairment of 29.5000% (see s 91(10)).

[49] Cf Minister for Aboriginal Affairs v Peko-Wallsend [1986] HCA 40; (1986) 162 CLR 24 at 39-40; Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179; Minister for Immigration and Cultural Affairs v Yusuf (2001) 206 CLR 323, [82]-[83]; Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; (2004) 78 ALJR 992, [48]-[57] and Kirk v Industrial Relations Commission of New South Wales (2010) 84 ALJR 154, [66]-[90].

[50] See paragraph 34 of the fifth defendant's outline of submissions dated 1 March 2010.

[51] See in particular the affidavit of Ross William Cairns sworn 3 March 2010 (filed on behalf of the fifth defendant) at paragraphs [8]-[10].

[52] Cf Repatriation Commission v O'Brien [1985] HCA 10; (1985) 155 CLR 422 per Brennan at 445-446; Brambles Industries Limited v Nisselle [2005] VSC 82, [21] and Clarke v National Mutual Life Insurance Limited [2007] VSC 341, [67]-[69].

[53] However, when the calculation referred to in the next paragraph was put to counsel for the fifth defendant, the emphasis in relation to this submission diminished in oral argument from that set out in the fifth defendant's written outline at paragraphs [19]-[20]: see T18.15 - 19.19.

[54] Whilst it was submitted that s 91(10) could not operate to round 84.61% to 85%, s 91(10) provides "A number determined under the AMA Guides must be rounded to the nearest whole percent". At the foot of s 91(10), an example is given in the following terms:

"A final degree of impairment of 9.5% must be rounded to 10%. A final degree of impairment of 8.4% must be rounded to 8%."

Section 91(10) does not distinguish between "a final whole person impairment" or a final (or other) impairment of a body part. To the extent that the example given under s 91(10) suggests that s 91(10) is limited to final whole person impairments, it is to be remembered that the example does not limit the meaning of s 91(10) (see s 36A of the Interpretation of Legislation Act 1984). Further, the example given at the foot of s 91(10) talks of a "final degree of impairment" which could refer to a final whole person impairment or a final impairment in respect of a particular injury. That is, the reference in the example to a "final degree of impairment" may be a reference to, for example, a final degree of impairment of a ring finger (after combining MIP, PIP and MP joint impairments) (cf the references to intermediate, combined and final values in s 91(9)).

[55] During argument it was put that the conversion from 84% in relation to the right ring finger to 8% of the right hand and 85% to 9% mandated by Table 1 on p 3/18 of the Guides supported the proposition that one could not round 84.61% or use the formula to arrive at this figure. However, when one has regard to the permissive use of the combined values chart referred to in the third paragraph of section 3.1e extracted above, one sees that nothing in Table 1 on p 3/18 mandates against the use of the formula and then appropriate rounding. Further, it was suggested that because the Guides do not explain (by reference to a formula or otherwise) how the conversion from finger impairments to hand impairments is calculated in Table 1 on p 3/18, there should be no use of the formula A + B (1 - A) at this level of the assessment. This argument is without merit. Merely because the Guides do not provide the formula used to make the conversion from finger impairments to hand impairments does not militate against the use of the formula in circumstances where it is clearly contemplated by the Guides that the calculation is to be based upon the formula.

[56] Cf Body Corporate Strata Plan (No. 4166) & Ors v Stirling Properties Limited [1984] VicRp 73; [1984] VR 903 at 912 per Ormiston J.