Plaintiffs v Defendants

Supreme Court of Victoria|2009-07-31|Before: Kyrou J

Judicial review - Order 56, Supreme Court (General Civil Procedure) Rules 2005 (Vic) - medical panel - jurisdictional error - alleged misapplication of the AMA Guides to the Evaluation of Permanent Impairment (4th edition) - assessment of permanent impairment for a total ankle replacement by reference to the provisions dealing with total hip and total knee replacement -breach of the rules of natural justice - admissibility of evidence of steps that would have been taken if the hearing rule had been complied with - inadequate reasons - Accident Compensation Act 1985 (Vic), ss 91, 98C and 104B.

No appearance for the First, Second, Third and Fourth Defendants

1 This is an application for judicial review under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) of a medical panel's opinion dated 2 December 2008.

2 Two medical questions were referred to the panel for its opinion in accordance with s 104B(9) of the Accident Compensation Act 1985 (Vic) ('AC Act'). The referral resulted from the fifth defendant, Judith King, disputing a determination made by the second plaintiff, the Victorian WorkCover Authority ('VWA'), that Ms King had a permanent 8 percent whole person impairment for the purposes of her claim for a lump sum payment under s 98C of the AC Act. The claim related to an injury Ms King sustained whilst employed by the first plaintiff, H J Heinz Company Australia Ltd ('Heinz'). The injury was described as a 'left ankle (affecting left leg and left foot) injury' and involved total left ankle replacement surgery. The plaintiffs had accepted liability for the injury, which also included a psychiatric condition.

3 In its opinion, the panel determined that Ms King had a permanent 20 percent whole person impairment.

4 The plaintiffs sought an order quashing the panel's opinion and an order remitting the medical questions to a differently constituted medical panel on two principal grounds, namely jurisdictional error and breach of the rules of natural justice. These grounds related to the manner in which the panel applied the fourth edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment ('Guides'). The plaintiffs also relied on the alternative grounds of error of law on the face of the record and inadequate reasons.

5 The first, second, third and fourth defendants, who constituted the panel, did not participate in the proceeding. Ms King assumed the role of contradictor.

6 For the reasons set out in this judgment, I have concluded that the panel exceeded its jurisdiction and its opinion should be quashed.

Relevant provisions of the Accident Compensation Act

7 Section 98C(1) of the AC Act provides that a worker who suffers an injury which entitles the worker to compensation is, 'in respect of an injury resulting in permanent impairment as assessed in accordance with section 91', entitled to compensation for non-economic loss in the form of a lump sum calculated in accordance with s 98C.

8 Section 104B(9) of the AC Act provides that, where a worker disputes a determination of impairment, the VWA must refer to a medical panel for its opinion medical questions as to 'the degree of impairment assessed in accordance with section 91' resulting from an injury for which liability is accepted.

9 Sections 91(1) and (8) of the AC Act provide that a reference to the assessment of a degree of impairment in accordance with that section in part IV of the Act (which includes ss 98C and 104B) is a reference to an assessment made in accordance with the Guides.

The AMA Guides to the Evaluation of Permanent Impairment

10 The purpose of the Guides is to provide standard protocols and criteria for estimating the degree of permanent impairment.[1]

the Guides chapters on the organ systems contain 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.

12 Section 1.3 of the Guides states that the Guides 'does not and cannot provide answers about every type and degree of impairment' because, among other things, 'the field of medicine and medical practice is characterized by constant change in understanding disease and its manifestations, diagnosis, and treatment'. It also states that '[t]he physician's judgment and his or her experience, training, skill, and thoroughness in examining the patient and applying the findings to Guides criteria will be factors in estimating the degree of the patient's impairment'. It adds that these attributes 'compose part of the "art" of medicine, which, together with a foundation in science, constitute the essence of medical practice'.

13 On the other hand, s 1.7 of the Guides states that

[e]ven though rating or estimating impairments cannot be totally objective, use of the Guides increases objectivity and enables physicians to evaluate and report medical impairment in a standardized manner, so that reports from different observers are more likely to be comparable in content and completeness.

14 The desirability of standardised assessments based on the Guides is also emphasised on page 2/7 of the Guides.

15 Chapter 3 of the Guides is headed 'The Musculoskeletal System'. Section 3.2 sets out how permanent impairment of 'the lower extremity' is to be assessed. Page 3/13 states that the lower extremity has six sections: the foot, the hindfoot, the ankle, the leg, the knee and the hip.

16 Section 3.2 of the Guides commences with the following statement:

Anatomic, diagnostic, and functional methods are used in evaluating permanent impairments of the lower extremity. While some impairments may be evaluated appropriately by determining the range of motion of the extremity, others are better evaluated by the use of diagnostic categories or according to test criteria.

In general, only one evaluation method should be used to evaluate a specific impairment. In some instances, however, ... a combination of two or three methods may be required.

This section includes information on using some of the simpler, more reproducible methods of and tests for assessing function. It also includes examples illustrating how the physician selects the best approach to evaluate an impairment. Selecting the optimal approach or combining several methods requires judgment and experience. Also needed is careful testing that produces accurate and consistent results.

17 Section 3.2 of the Guides is followed by the following specific sections:

3.2a - Limb Length Discrepancy.
3.2b - Gait Derangement.
3.2c - Muscle Atrophy (Unilateral).
3.2d - Manual Muscle Testing.
3.2e - Range of Motion.
3.2f - Joint Ankylosis.
3.2g - Arthritis.
3.2h - Amputations.
3.2i - Diagnosis-based Estimates.
3.2j - Skin Loss.
3.2k - Peripheral Nerve Injuries.
3.2l - Causalgia and Reflex Sympathetic Dystrophy.
3.2m - Vascular Disorders.

18 Each of the specific sections sets out a methodology for assessing impairment for the purposes of that section. A number of the sections contain tables which assign a percentage for impairment of the whole person or of the relevant lower extremity part depending on particular criteria. For example, s 3.2b includes Table 36, headed 'Lower Limb Impairment from Gait Derangement', which assigns a percentage for whole person impairment based on whether the gait derangement is 'mild', 'moderate' or 'severe'. A further example is s 3.2e which includes Table 42, headed 'Ankle Motion Impairments', and Table 43, headed 'Hindfoot Impairments', which assign a percentage for whole person impairment based on different types of motion.

19 Section 3.2i commences with the following statement:

Some impairment estimates are assigned more appropriately on the basis of a diagnosis than on the basis of findings on physical examination. A good example is that of a patient impaired because of the replacement of a hip, which was successful. This patient may be able to function well but may require prophylactic restrictions, a further impairment. For most diagnosis-based estimates, the ranges of impairment are broad, and the estimate will depend on the clinical manifestations.

The evaluating physician must determine whether diagnostic or examination criteria best describe the impairment of a specific patient. The physician, in general, should decide which estimate best describes the situation and should use only one approach for each anatomic part. (Emphasis in original)

20 Section 3.2i includes three tables, Table 64, headed 'Impairment Estimates for Certain Lower extremity Impairments', Table 65, headed 'Rating Hip Replacement Results', and Table 66, headed 'Rating Knee Replacement Results'. Table 64 contains whole person and lower extremity impairment assessments for various lower extremity conditions and body parts including the hip, knee and ankle.

21 In relation to the ankle, Table 64 refers to 'Ligamentous instability' and 'Fracture', which may be 'Extra-articular with angulation' or 'Intra-articular with displacement'. It was common ground before me that these items were not apt in relation to Ms King's injury. Table 64 does not refer to total ankle replacement. In relation to the hip and the knee, Table 64 includes 'Total hip replacement' and 'Total knee replacement' and, for each, assigns a 15 percent whole person impairment for a 'good result', a 20 percent whole person impairment for a 'fair result' and a 30 percent whole person impairment for a 'poor result'. Whether a result is good, fair or poor depends on the number of points accumulated in accordance with Table 65 (for hip replacement) or Table 66 (for knee replacement). If less than 50 points are accumulated, the result is poor, if between 50 and 84 points are accumulated, the result is fair and if between 85 and 100 points are accumulated, the result is good.

22 Table 65 deals exclusively with total hip replacement and assigns points, for the purposes of Table 64, for a number of criteria under the headings 'Pain', 'Function', 'Activities', 'Deformity' and 'Range of Motion'. The criteria under the heading 'Deformity' are 'fixed adduction', 'fixed internal rotation', 'fixed external rotation', 'flexion contracture' and 'leg length discrepancy'. The criteria under the heading 'Range of Motion' are 'flexion', 'abduction', 'adduction', 'external rotation' and 'internal rotation'.

23 Table 66 deals exclusively with total knee replacement and provides for the accumulation of points for the purposes of Table 64 under the headings 'Pain', 'Range of motion', 'Stability', 'Deductions (minus) Flexion contracture', 'Extension lag' and 'Alignment', to determine whether a total knee replacement falls into the category 'good result', 'fair result' or 'poor result'.

24 The interpretation of the Guides is a question of law.[2] The determination of a level of impairment is a question of fact.[3]

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[4] and is a legislative document.[5]

26 However, the Guides is, as its title suggests, a guide.[6] 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.[7] It is of paramount importance to be faithful to the Guides' plain words.[8] The Guides should not be interpreted as if it was a statute.[9]

27 The use of the Guides is designed to promote precision, certainty and consistency.[10] 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.[11]

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.[12]

29 Ms King worked at Heinz as a forklift driver and goods-lift operator. On 26 March 1998, she injured her left foot when she jumped off a forklift, landed on a steel railing and twisted her left ankle. The injury was such that a total ankle replacement operation was required. This took place in August 2002 and was followed by a revision procedure in March 2004.

30 Following the injury, Ms King made a claim for weekly payments under the AC Act. The claim was accepted and Ms King continues to receive weekly payments. She ceased work in early 1999 due to her injury. Heinz closed its factory on 29 September 2000 and Ms King was made redundant at that time. She has not worked since early 1999.

31 In August 2008, Ms King made a claim for payments under s 98C of the AC Act. The claim was accepted by the VWA and Ms King was advised that based on a whole person impairment of 8 percent, she was not entitled to a lump sum payment. In making this assessment, the VWA relied on a report dated 19 September 2008 from Hugh Weaver, an orthopaedic specialist, and a report dated 23 September 2008 from Norman Rose, a psychiatrist. Mr Weaver's report relevantly stated:

You require to be advised that, from the viewpoint of the Fourth Edition of the American Medical Association Guidelines, there is technically no particular table or set of tables which applies to the undertaking of a total ankle replacement. My viewpoint would be that Ms King's situation can probably be assessed alternatively using a Range of Motion Model, from page 78; or possibly using Table 36 to discuss her situation in terms of a lower limb impairment from gait derangement.

If her situation is assessed using Tables 42 and 43 from page 78 then, according to the kinds of measurements which I obtained on this recent occasion, she would be assessed as exhibiting a moderate impairment of ankle motion, with allowance for a 6% whole person impairment from Table 42 and a further 2% from Table 43. The result, using combined figures, would be an 8% whole person impairment.

...

If she is assessed alternatively, using Table 36 (page 76) then I would suggest that a case could be made for her to be demonstrated as exhibiting a mild impairment according to point (a); this would allow for a 7% whole person impairment.

My own viewpoint would be that the Range of Motion Model is probably the more appropriate one for her and I would therefore suggest that an 8% whole person impairment can be accepted, relating to Ms King's ankle problem. I would further suggest that an impairment figure of this kind can be regarded as being permanent in character and that it does continue to reflect very substantially the effects of the original injury which Ms King sustained in the course of her employment back in March [1998].

32 Dr Rose diagnosed Ms King as suffering from a chronic adjustment disorder with depressed mood. Although he assessed Ms King as having a psychiatric impairment, he advised that no allowance for this was permitted by the AC Act because the impairment was the consequence of the ankle injury.

33 At Ms King's request, on 14 October 2008 the VWA referred two medical questions to the panel. The panel examined Ms King on 5 November 2008. In its opinion dated 2 December 2008, the panel answered the two questions that had been referred to it as follows:

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

In the Panel's opinion, the worker has a 20% whole person impairment resulting from the accepted left ankle (affecting left leg and left foot) 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 0% psychiatric whole person impairment resulting from the accepted psychiatric condition 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 [Section] 115c of the Act, there is a combined whole person impairment of 20% resulting from the accepted physical and psychiatric injuries. The degree of impairment is permanent within the meaning of the Act.

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

34 The panel also prepared reasons for its opinion dated 2 December 2008. These reasons were provided to the VWA's claims agent on 29 December 2008 following a request from the agent dated 24 December 2008.

35 The key paragraphs in the panel's reasons for present purposes are as follows:

The Panel concluded that the worker is suffering from persisting left ankle dysfunction, as a consequence of an aggravation of osteoarthritis of the left ankle, treated by an ankle replacement, relevant to the accepted left ankle (affecting left leg and left foot) injury.

...

The Panel concluded that the worker is suffering from a chronic adjustment disorder with depressed mood and some panic - being her response to her persistent physical symptoms, increase in her weight, the change in her appearance and the limitations of life/lifestyle, relevant to the accepted psychiatric condition injury.

The Panel conducted an impairment assessment of the accepted physical injury according to the methods prescribed in the American Medical Association Guides to the Evaluation of Permanent Impairment (4th Edition - 3rd printing), as required by Section 91 of the Act. The Panel considered that no further information was required from the worker's treating practitioners to carry out the assessment.

The Panel considered the methods of assessing the impairment of the left ankle (affecting left leg and left foot), pursuant to Section 3.2 of Chapter Three. The Panel concluded that the worker's condition, involving a left total ankle replacement, cannot be adequately assessed using gait derangement, muscle atrophy, manual muscle testing, range of motion, joint ankylosis or arthritis and there is no diagnosis-based estimate for a total ankle replacement, (as is the case for a total hip or total knee replacement).

The Panel considered that in this case, in assessing the degree of impairment resulting from ... the worker's total ankle replacement, it is appropriate to apply equivalent criteria to those applicable to a total hip or knee replacement, where surgical outcomes are classified as good, fair or poor.

On the basis of the worker's pain levels, range of motion, stability and deformity attributable to the left ankle, the Panel concluded that the worker's total ankle replacement is equivalent to a fair result for a total hip or knee replacement pursuant to Table 64, resulting in a whole person impairment of 20%. There is no other impairment attributable to the worker's accepted left ankle (affecting left leg and left foot) injury.

The Panel noted the medical report of the independent medical examiner Mr. Hugh Weaver, dated 19.9.2008, wherein he assessed an 8% whole person impairment resulting from the accepted left ankle (affecting left leg and left foot) injury, based on range of motion. The Panel's higher assessment of 20% whole person impairment was formed on the basis of the Panel's examination of the worker on 5.11.2008 and the Panel considers that the assessment of 20% whole person accurately reflects the outcome of the worker's total left ankle replacement, when assessed on that date.

36 The plaintiffs filed an originating motion on 15 January 2009 seeking an order quashing the panel's opinion and remitting the medical questions to a differently constituted medical panel. In the alternative, they sought an order under s 8(4) of the Administrative Law Act 1978 (Vic) ('ALA') requiring the panel to furnish a further statement of its reasons.

37 The plaintiffs relied on four grounds of review. The first was that the panel committed a jurisdictional error by failing to conduct its assessment in accordance with s 91 of the AC Act in that it assessed impairment of the ankle by using a method in the Guides applicable to a total hip or knee replacement rather than a method applicable to an ankle. The second was an alternative ground that, if the error was not a jurisdictional error, it was an error of law on the face of the record. The third was that the panel breached the rules of natural justice by not giving the plaintiffs prior notice of its intention to use a method applicable to a total hip or knee replacement and a fair opportunity to be heard on that issue. The fourth was that the reasons for the panel's opinion were inadequate.

Decision on first ground of review - jurisdictional error

38 A medical panel is amenable to judicial review.[13] Its opinion can be quashed if it makes a jurisdictional error.[14] It does not commit a jurisdictional error merely because it employs illogical reasoning.[15] However, if its reasoning demonstrates that it asked itself the wrong question, took into account irrelevant considerations or failed to take into account relevant considerations, then it commits a jurisdictional error.[16] What factors a medical panel is bound to consider in forming its opinion is determined by construction of the statute conferring its jurisdiction, namely the AC Act.[17]

39 Mr Fleming, who appeared for the plaintiffs, submitted that the panel committed a jurisdictional error because it assessed Ms King's impairment by reference to provisions of the Guides dealing with total hip and knee replacement rather than provisions dealing with impairment to an ankle. Such an assessment, it was said, was not 'in accordance with the A.M.A. Guides' as required by s 91 of the AC Act, which defined the panel's jurisdiction. Mr Fleming contended that the reference in the panel's reasons to an impairment not being 'adequately assessed' by using the sections of the Guides dealing with matters such as gait derangement, indicated that the panel saw its role as arriving at a sufficient or fair assessment as distinct from an assessment which was required by the correct application of the Guides.

40 In the alternative, Mr Fleming submitted that even if it was open to the panel to assess Ms King's impairment on the basis of a total ankle replacement, the panel did not reach such an assessment by applying Tables 64, 65 and 66 as they were intended to be applied by the Guides. Rather, Mr Fleming contended, the panel appeared to have adopted a global assessment.

41 Mr O'Loghlen QC, who appeared with Mr Wicks for Ms King, submitted that the panel's assessment was in accordance with the Guides considered as a whole and that the panel did not exceed its jurisdiction. Mr O'Loghlen relied on the provisions of the Guides which emphasised that the assessment task involved estimation based in part on professional judgments to be made by the medical practitioners who apply the Guides.

42 Mr O'Loghlen submitted that the panel had identified a lacuna in the Guides dealing with a total ankle replacement, just as Mr Weaver had done. In order to overcome this lacuna and arrive at an assessment that was appropriate for Ms King's injury, the panel relied on the diagnostic method, as permitted by the Guides, and used the provisions of Table 64 to support that method. Mr O'Loghlen pointed out that Mr Weaver, in his report, said that various options were open in arriving at an assessment for Ms King's impairment. He submitted that the fact that the panel adopted a different option to the options considered by Mr Weaver was no more than the exercise of professional judgment within the framework provided by the Guides.

43 I was initially attracted to Mr O'Loghlen's submissions. However, a detailed review of the Guides and the principles applicable to interpreting it has persuaded me that the panel's assessment was not in accordance with the Guides and was beyond the panel's jurisdiction.

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.[18]

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 in [11] 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.

48 If the panel had applied the protocols and tables in the Guides, as it was required to do, it would have applied as many of the sections of the Guides in Chapter 3 as were applicable to the ankle and other parts of the lower extremity that were the subject of Ms King's injury, to the extent that this was permitted by the Guides, and arrived at a combined whole person impairment.[19] This is not what the panel did. Instead, the panel decided to assess Ms King's impairment on a basis not set out in the Guides, namely a total ankle replacement. The panel's reasons make it clear that as a result of the absence of a reference to total ankle replacement in Table 64, the panel had to improvise by applying what it described as 'equivalent criteria to those applicable to a total hip or knee replacement, where surgical outcomes are classified as good, fair or poor'.

49 This was an impermissible approach, because the classifications of 'good result', 'fair result' and 'poor result' in Table 64 in relation to total hip and knee replacement could only be arrived at by applying the criteria set out in Tables 65 and 66, respectively, and accumulating the points set out in those tables. The panel did not purport to apply Tables 65 and 66 for the simple reason that those tables are specific to total hip and knee replacement respectively and contain criteria (such as adduction and abduction) which are not relevant to an ankle. It was not open to the panel to apply those criteria in Tables 65 and 66 which could be relevant to an ankle and ignore those criteria which were not relevant, as this would produce a points score which was not sanctioned by the Guides.

50 Mr O'Loghlen submitted that the Guides permitted the panel to adopt a diagnostic methodology in assessing Ms King's impairment and that is what it did. He contended that the panel's reliance on the categories of fair, good and poor for total hip and knee replacement in Table 64 was for the purpose of giving effect to the diagnostic methodology the panel had adopted and was therefore in accordance with the Guides.

51 I reject this submission. Although the panel was entitled under s 3.2i to reach a diagnosis-based estimate, that estimate had to be arrived at by the diagnostic methodologies set out in s 3.2i and the tables accompanying it. Table 64 provided criteria for reaching a diagnosis-based estimate for an ankle. The fact that the table did not refer to a total ankle replacement meant that a diagnosis-based estimate could not be reached for a total ankle replacement. It did not mean that the panel was at liberty to rectify any perceived deficiency in the Guides by, in effect, creating a new category of total ankle replacement in Table 64 by using the 'equivalent' categories of total hip and knee replacement in order to facilitate a diagnosis-based estimate for the new category.

52 Mr O'Loghlen also submitted that, as the AC Act imposed a duty on the panel to assess the actual degree of Ms King's impairment, the panel could not shirk its performance of this duty as a result of gaps or deficiencies in the Guides. Rather, the panel had to reach its assessment doing the best it could in the circumstances, in the same way that the courts routinely perform difficult assessments in various areas including workers' compensation cases.[20] This submission must also be rejected. The panel in this case did not simply do the best it could in applying the Guides. Instead, it purported to address a perceived deficiency in the Guides by applying provisions of the Guides which, by their terms, were not applicable to Ms King's injury. Further, as I have already said, the panel's duty was to assess the degree of impairment resulting from the application of the Guides, not some other degree of impairment that the panel considered to be 'correct', 'fair', 'optimal' or 'actual'.

53 The approach I have adopted is consistent with the approach of Bongiorno J in Taylor v Mountain Pine Furniture Pty Ltd,[21] which also involved a challenge to a panel's determination. Section 3.3d of the Guides contained a direction that in assessing impairment, no heed should be paid to any improvement following surgery whereas the Guides defined 'permanent impairment' as one that has stabilised and is unlikely to change in spite of further surgery. The panel noted this 'apparent conflict' between the direction in s 3.3d and the definition of 'permanent impairment' and ignored the direction. Bongiorno J said:

The Accident Compensation Act 1985 requires the Medical Panel to assess impairment using the AMA Guides. This attempt by the legislature to introduce some degree of objectivity into the assessment of impairment for compensation purposes represents a significant application of the rule of law in an area where one of the fundamental principles of justice - that like cases should be treated alike - has particular importance. Nothing would discredit a compensation system more quickly than the idiosyncratic application of criteria to the determination of an injured person's impairment and hence their entitlement to compensation at a particular level. Although the efficacy of the application of the AMA Guides to achieve a just result for injured people may be debated, as the law stands they must be applied regardless of any personal view of the assessor called upon to make the assessment. Whilst the interpretation of medical matters referred to in the Guides and the exercise of clinical judgment must be left to the medical examiner who is applying them, it is not within that medical examiner's remit to ignore an express direction contained in the Guides as to how a particular objective fact is to be treated in making an assessment. Thus it was not within the power of the Medical Panel in this case to reach its assessment of Mr Taylor's impairment after taking into account the effects of surgery performed on his cervical spine.[22]

54 For the above reasons, the panel's opinion was beyond its jurisdiction and must be quashed.

Decision on second ground of review - error on the face of the record

55 As I have held that the panel made a jurisdictional error, the alternative ground of review based on an error of law on the face of the record falls away.

Decision on third ground of review - breach of rules of natural justice

56 My conclusion that the panel made a jurisdictional error means that it is not necessary for me to decide whether the panel breached the rules of natural justice. However, as this matter was fully argued before me, I will set out what I would have concluded in relation to the natural justice ground had I formed the view that the panel was entitled, as a matter of law, to apply the Guides in the manner in which it did.

57 A medical panel is bound to observe the rules of natural justice in favour of persons whose rights are liable to be affected by its opinion on medical questions and is a 'tribunal' for the purposes of the ALA.[23]

58 Mr Fleming submitted that the plaintiffs could not have reasonably expected the panel to rely on the provisions of the Guides dealing with total hip and knee replacement to assess the degree of impairment of Ms King's ankle. This meant, he contended, that the panel was obliged to give the plaintiffs notice of its intention to rely on those provisions and an opportunity to furnish further expert medical opinions and make further submissions to the panel on the issue.

59 Mr Fleming relied on the following statement of the Full Federal Court in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd:

Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question.[24]

60 In Szbel v Minister for Immigration and Multicultural and Indigenous Affairs,[25] the High Court referred to the above statement in Alphaone and continued:

Particular attention was directed in argument in this Court ... to the Tribunal's conclusion that the three identified elements of the appellant's story were not "plausible". Was that a conclusion "which would not obviously be open on the known material"? Or was it no more than a part of the "mental processes" by which the Tribunal arrived at its decision?

Stated in this way, the argument seeks to elucidate the content of the requirements of procedural fairness by setting up a dichotomy. There are two reasons to exercise considerable care in approaching the problem in that way. First, it is far from clear that the two categories that are identified (conclusions not obviously open on the known material, and mental processes of decision-making) encompass all possible kinds of case that may fall for consideration. Secondly, there is a very real risk that focusing upon these two categories will distract attention from the fundamental principles that are engaged.

In Alphaone the Full Court rightly said:

"It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material."

(Emphasis added.)[26]

61 Unsurprisingly, Mr O'Loghlen submitted that the panel's reliance on the provisions of the Guides dealing with total hip and knee replacement was merely part of the panel's mental processes and the application of the panel's medical expertise, which did not attract the hearing rule.[27] In the alternative, he submitted that the hearing rule was satisfied because Mr Weaver's report put the plaintiffs on notice that the Guides contained a gap in relation to total ankle replacement and that various options for assessing Ms King's impairment were open to the panel, including the diagnosis-based methodology.

62 Consistent with what the High Court said in Szbel, I have focused on whether the plaintiffs were given the opportunity of ascertaining the relevant issues, rather than the dichotomy between conclusions not obviously open on the known material and the mental processes of decision-making. The fact that the ultimate issue for determination by the panel, namely the degree of Ms King's whole person impairment assessed in accordance with the Guides, was known to the plaintiffs, is not determinative.

63 Had the panel confined itself to the provisions of the Guides expressly dealing with the ankle, the plaintiffs could not have complained because those provisions are an obvious issue for consideration by the panel. However, by going beyond those provisions and relying on provisions dealing with body parts which were unaffected by Ms King's injury, the panel introduced a new issue - namely the appropriateness of relying on those provisions - without giving the plaintiffs prior notice of that issue. The panel's reliance on those provisions, which were critical to its opinion, was not simply the application of one of the options that was available in the Guides. That reliance was so radically different from the range of options in the Guides that the panel might have been reasonably expected to apply, that the panel's failure to inform the plaintiffs that it was considering relying on those provisions was a breach of the hearing rule.

64 The plaintiffs had no notice, either from any submissions made to the panel on behalf of Ms King or from anything the panel said to the plaintiffs, that the panel might rely on those provisions. Nor was such reliance obviously open on a fair reading of the Guides. In these circumstances, the panel was required to inform the plaintiffs that it was considering applying those provisions in assessing Ms King's impairment and to give them an opportunity of providing evidence and making submissions to the panel on this issue.

65 I reject Mr O'Loghlen's alternative submission based on Mr Weaver's report. Mr Weaver did no more than point out the obvious fact that the Guides did not include a category of total ankle replacement for assessing an ankle injury and the various alternative means expressly set out in the Guides for assessing an ankle injury. There was nothing in Mr Weaver's report to suggest that Ms King's ankle injury could be assessed by applying provisions dealing with total hip and knee replacement. Likewise, the fact that s 3.2i referred to a diagnosis-based estimate could not, in itself, serve to alert the plaintiffs that the panel proposed to arrive at such an estimate by applying provisions dealing with total hip and knee replacement.

66 My finding that the panel breached the rules of natural justice does not necessarily mean that its opinion must be quashed. If it would be futile to quash the opinion because, for example, any further material or submissions from the plaintiffs could not possibly have affected the panel's opinion, the Court would ordinarily not do so.[28]

67 During the hearing, Mr Fleming sought to rely on two affidavits sworn by employees of VWA and its claims agent respectively. Those affidavits stated that VWA and the claims agent would have made written submissions regarding the legal and medical appropriateness of the panel using the provisions of the Guides dealing with total hip and knee replacement to assess an ankle impairment if they had had prior notice that the panel proposed to rely on those provisions for that purpose. Mr O'Loghlen objected to the affidavits on the ground of relevance and, by agreement, I deferred a ruling on the objection until judgment.

68 In my opinion, it was appropriate for the plaintiffs to present evidence to establish that there were practical steps they could and would have taken to seek to dissuade the panel from adopting its proposed course. Accordingly, I have decided that the affidavits contain relevant and admissible evidence and that it is appropriate for me to take that evidence into account in deciding what remedy is appropriate in relation to the breach of natural justice.

69 Had the panel received further submissions from the plaintiffs prior to reaching its opinion, there is a real possibility that the panel would not have applied the provisions of the Guides dealing with total hip and knee replacement. In these circumstances, it is appropriate to quash the opinion on the basis of the breach of the rules of natural justice.

70 Accordingly, if it had become necessary for me to do so, I would have upheld the third ground of review.

Decision on fourth ground of review - inadequate reasons

71 There is much to be said for the plaintiffs' submission that the panel's reasons did not satisfy the requirements of s 8(4) of the ALA as expounded in Masters v McCubbery.[29] However, my conclusion in [54] makes it unnecessary for me to consider whether the fourth ground of review, namely that the panel's reasons are inadequate, was established and, if it was, what remedies would be available.

72 I will order that the panel's opinion be quashed and that the medical questions be remitted to a panel convened in accordance with the AC Act. I do not propose to direct that the panel be differently constituted[30] but will hear further submissions on this issue if any party wishes to make any. I will also hear submissions on the question of costs.

[2] 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.

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

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

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

[6] 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').

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

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

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

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

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

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

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

[15] Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, 355-6; Roads Corporation v Dacakis [1995] VicRp 70; [1995] 2 VR 508, 517-20; Minister for Immigration and Multicultural Affairs v Rajalingam [1999] FCA 719; (1999) 93 FCR 220, 257 [146]; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611, 626 [40], 627-8 [44]-[45]; Willcocks v Comcare (2001) 66 ALD 119; [2001] FCA 1315, [6]; Berbers v Transport Accident Commission (2002) 19 VAR 201; [2002] VSC 211, [28]-[34]; Bell Corp Victoria Pty Ltd v Stephenson (2003) 20 VAR 280; [2003] VSC 255, [34]; Lucas v Transport Accident Commission [2003] VSC 97, [10].

[16] Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, 179.

[17] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39.

[18] 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.

[19] Section 3.2 of the Guides states: 'If the patient has several impairments of the same lower extremity part ... the whole-person estimates for the impairments are combined' (emphasis in original).

[20] Mr O'Loghlen relied on Nash v Sunshine Porcelain Potteries [1959] HCA 7; (1959) 101 CLR 353, 361, Stevenson v Buchanan & Brock Pty Ltd [1971] VicRp 63; [1971] VR 503, 519 and Esam v ASP Ship Management (1998) 87 FCR 82, 85.

[21] [2006] VSC 499; aff'd in Mountain Pine Furniture Pty Ltd v Taylor [2007] VSCA 146; (2007) 16 VR 659, 668 [27].

[26] [2006] HCA 63; (2006) 228 CLR 152, 162 [30]-[32] (citation omitted).

[27] Mr O'Loghlen relied on Minister for Health v Thomson [1985] FCA 208; (1985) 8 FCR 213, 217, 224 and Keller v Drainage Tribunal [1980] VicRp 43; [1980] VR 449, 453.

[28] Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 145.

[30] Cf Vegco Pty Ltd v Gibbons [2008] VSC 363, [33].

Court (General Civil Procedure) Rules 2005

Compensation Act 1985

At a glance

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Judgment (122 paragraphs)

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Legislation Cited (3)

Cases Cited (20)