Quintiliani-Johns v Secretary, Department of Education

Medical Assessment Certificate

1. On 7 July 2023, the medical assessor issued the Certificate, assessing the plaintiff as having WPI of 4% (rounded down from 4.5%), on the basis of which the plaintiff was not entitled to lump sum compensation: 1987 Act, s 65A(3). Under the heading "Reasons for assessment", the medical assessor stated that in making that assessment he had taken into account the following matters: "1. The history provided by Ms Quintiliani-Johns to me and other examiners. 2. Her pre-injury condition and the natural history of bipolar disorder type 1. 3. The effect of subsequent stressors. 4. The mental state examination. 5. The documentation provided. 6. The treatment rendered."
2. The medical assessor diagnosed the plaintiff as meeting the DSM-V criteria for a bipolar disorder type 1. Consistently with that disorder, he considered that her condition was "characterised by manic episodes … lasting at least one week and present most of the day nearly every day", and that the plaintiff "predominantly suffered from major depressive episodes, often with melancholic features, characterised by depressed mood most of the day, nearly every day". His diagnosis was established "from the longitudinal history, medical evidence provided by [the plaintiff's] treating clinicians, more recent evidence from her admissions to the James Fletcher Psychiatric Unit and the Newcastle Mental Health Unit and collateral history provided by [the plaintiff's] husband to her general practitioner and hospital staff".
3. The medical assessor set out the following by way of explanation for his calculation of WPI: "9% - (5/10 x 9% = 4.5% rounded to 5%) = 4% See below for a discussion of the apportionment for pre-existing condition. The effects of treatment are not substantial. She remains depressed and the treatment is suboptimal for the manic pole of bipolar disorder type I."
4. The Certificate noted that the worksheet for the medical assessor's calculations was attached. That worksheet contained the following table: Body Part or system Date of Injury Chapter, page and paragraph number in NSW workers compensation guidelines Chapter, page, paragraph, figure and table numbers in AMA5 Guides %WPI WPI deductions pursuant to s323 for pre-existing injury, condition or abnormality (expressed as a fraction) Sub-total/s % WPI (after any deductions in column 6) 1.Psycho-logical 11, page 55-60 14 9% 5/10 4% Total %WPI (the Combined Table values of all sub-totals) 4%

1. Also attached to the Certificate was the PIRS rating form that he completed in reaching his conclusion of WPI. Relevantly, that table included the following entries for self care and personal hygiene, and social and recreational activities: PIRS Category Class Reason for Decision Self Care and personal hygiene 2 Ms Quintiliani-Johns can live independently but is less concerned about her appearance, sometimes skips showering or brushing her teeth and does not maintain her self-care to the pre-injury standard. She is able to maintain a minimal level of hygiene and nutrition independently. Social and recreational activity 2 Ms Quintiliani-Johns regularly socialises with family and a few close friends. She can leave her residence and occasionally goes out for social or recreational activities. She attends yoga, walks and swims regularly. She participates in once a month art and recovery activities. She attends a dialectical behaviour therapy group therapy program as part of her treatment. She is less interested in social and recreational activities than she was prior to the injury. Most of her activities are home based or structured around her immediate family.

1. Under the heading "Deduction (if any) for the proportion of the impairment that is due to previous injury or pre-existing injury", the medical assessor stated: "a. In my opinion the worker suffers from the following relevant previous injuries, pre-existing conditions or abnormalities: (i) Bipolar disorder type 1. b. The previous injury, pre-existing condition or abnormality directly contributes to the following matters that were taken into account when assessing the whole person impairment that results from the injury, being the matters taken into account in 10a, and in the following ways: (i) The history and documentation confirm that Ms Quintillani-Johns has a pre-existing condition, specifically bipolar disorder type 1. This impacted her role and function at work leading up to the injury. In determining the burden of impairment and apportion of pre-existing conditions I considered Ms Quintiliani-Johns' self-reported history, the documentation provided, documented collateral history from her husband, the natural history of bipolar disorder type 1 and reports from several independent medical examiners. (ii) Bipolar disorder type 1 substantially impacted the work related injury, is a major mental illness, and influenced her behaviour in the workplace. c. Whilst the extent of the deduction is difficult or costly to determine the available evidence is that the deductible proportion is large and a deduction of one tenth is at odds with the available evidence. In my opinion the deductible proportion is 5/10 for the following reasons: (i) The current impairment is a product of both a pre-existing psychological disorder and the effects of the subject injury. Ms Quintiliani-Johns' pre-event psychological status was fragile and impacted her work function. The index event worsened a pre-existing clinical level psychiatric disorder. There is link with work related stressors, although the direction of causation is unclear. I cannot conclude that the greater portion of her psychological impairment arises from the work related aggravation. The pre-existing condition and the work related injury had substantial impacts; one is not greater than the other."

Application to Appeal Panel

1. On 4 August 2023, the plaintiff lodged an appeal against the medical assessment pursuant to s 327(1) of the 1998 Act, relying on two of the four grounds of appeal for which s 327(3) provides: (c) the assessment was made on the basis of incorrect criteria, (d) the medical assessment certificate contains a demonstrable error.
2. In the written submissions in support of the appeal, the plaintiff contended that the medical assessor had made errors in assessing her as class 2 for both "self care and personal hygiene" and "social and recreational activities". The plaintiff also contended that the medical assessor had misunderstood the nature and timing of the events that caused her injury, wrongly attributing some of the symptoms to her "pre-event psychological status". She submitted, "further and in the alternative", that the medical assessor had misapplied the Guidelines.
3. In respect of self care and personal hygiene, the plaintiff referred to the statement she made on 8 August 2022, in which she stated that she continued to experience severe depressive symptoms and anxiety, continued to struggle with insomnia, often forgot to eat and struggled to look after herself. Her husband and daughter reminded her to eat and looked after her a lot. This part of her statement, which was not referred to in the otherwise detailed section of the Certificate commenting on the evidence (pp 8-14), was consistent with the medical evidence summarised. The plaintiff also referred to the section of the Certificate subtitled "social activities/ADLs", in which the medical assessor recorded a number of statements that were relevant to this scale, namely: "(a) 'She skips meals and has gained weight' (b) 'She cooks once a week, but her husband cooks the rest.' (c) 'Her husband and daughter do most of the housework.' (d) 'She showers at least every second day and often skips a day.' (e) 'She is indifferent to her appearance and manages the basics only.'"
4. The plaintiff then referred to the PIRS table and the medical assessor's reasons for assessing her in class 2, before submitting: "17. … The PIRS summary makes no reference to the worker skipping meals and the dependency of her husband to cook all but one night per week, detailed in the body of the report. 18. On the history and findings of the Medical Assessor the worker ought to have been assessed as "moderate" class 3 and not "minor" for this category. It could not be said that the worker is able to live independently, looks after herself adequately, and only sometimes misses a meal (class 2 descriptors). 19. The worker skips meals and skips showers. She relies on her husband to cook all but one meal per week. She forgets to eat, and her husband or daughter remind her. She relies on her husband and daughter to do housework. She is indifferent to her appearance and manages the basics only. Even with the support of her husband she is only managing a minimum level of hygiene and nutrition."
5. The plaintiff's submissions in relation to the social and recreational activities scale adopted a similar structure. The submissions referred, first, to her August 2022 statement in which she stated that she avoided going out into the community or social settings as much as she could, for fear of running into someone from the school where she used to work. In the Certificate, the medical assessor had recorded that she felt apathetic, disinterested and did not enjoy things, as well as making the following comments in the section of his report, "social activities/ADLs": "(a) She 'feels anxious about socialising. She feels that she cannot trust people anymore.' (b) She might go to her in-laws in the next suburb with her husband. (c) She may take herself to a psychiatrist appointment and visit on the way back but is usually accompanied by her husband. (d) She attends an 'Arts in Recovery' program (intended for people with mental health difficulties) once per month. (e) She walks alone or with her daughter. (g) Her husband takes her to Merewether Baths to swim."
6. After setting out the reasons of the medical assessor in the PIRS table, the plaintiff submitted: "26. On the history and findings of the Medical Assessor the worker ought to have been assessed as 'moderate' class 3 and not 'minor' for this category. 27. On the history taken by the Medical Assessor, consistent with the worker's statement, and the other medical evidence, the worker rarely goes out to social and recreational events, and when she does, she has a support person, usually her husband or daughter. 28. The statement in the PIRS table that the worker 'regularly socialises with family and a few close friends' is unsupported by the history taken by the Medical Assessor. Her husband and daughter live with her. She is not engaging in a 'social or recreational activity' when she interacts with them in the course of her daily life. Walking alone or with her daughter (with whom she lives) is not a 'social or recreational activity'. 29. The worker's ability or inability to function socially in relationships with family and friends is properly addressed under 'social functioning' and it is an error to intermingle the criteria for one category where it is properly assessed under another. Ordinary interactions with family members that do not involve a social or recreational activity are not to be assessed under this category. 30. The evidence is and the history taken is that she rarely engages in social and recreational activities, if at all. 31. The PIRS table also contains an error in categorising the attendance of dialectical behaviour therapy (DBT) group therapy sessions as 'social or recreational activity'. She is not there to socialise. Treatment and therapy designed to assist the worker is not a social and recreational activity."
7. In respect of the medical assessor's application of a deduction pursuant to s 323, the plaintiff first submitted that while it was uncontroversial that the plaintiff now has bipolar disorder type 1, the basis upon which the medical assessor found that to be a pre-existing condition was unclear. She submitted that this was highly relevant as episodes of mania suffered by those with bipolar disorder type 1 were more severe and prolonged than episodes of hypomania suffered by those with bipolar disorder type 2. She submitted that the opinion of the medical assessor was inconsistent with: 1. the 25 October 2022 report of Dr Cassimatis, which diagnosed bipolar disorder but did not identify a type, as well as subsequent reports in which he considered that the plaintiff initially had bipolar disorder type II, which was exacerbated by the events at the school and led to bipolar disorder type I; and 2. a discharge summary from the James Fletcher Mater Mental Health Services on 17 January 2019, which recorded a diagnosis of bipolar disorder type 2.
8. The plaintiff submitted that if the medical assessor found something different, there was a failure to give reasons in respect of the issue, and in any case there was no evidence of the plaintiff being affected by her bipolar disorder type 2 in January 2019, before the events leading to her injury.
9. The plaintiff next submitted that the medical assessor misapplied s 323 and the Guidelines, and that on a correct application of the Guidelines the appropriate deduction was 10%. The plaintiff submitted that his finding that the extent of the deduction was difficult or costly to determine was unsurprising and should have led to the application of a 10% deduction. The plaintiff contended that such a deduction was consistent with the available evidence, and noted that both Dr Allan and Dr Cassimatis had found 10% to be the appropriate deduction. She submitted that result was also consistent with [11.10] of the Guidelines, "which in cases where there is a symptomatic pre-existing condition a Medical Assessor is to assess any pre-existing impairment using PIRS methodology and subtract that from the current level of WPI" and, "[i]n cases like this case (and indeed many cases) where this cannot be done, the deduction is 10%".
10. On 6 September 2023, the delegate of the President of the PIC referred the appeal to an Appeal Panel comprising PIC member Richard Perringnon and medical assessors Dr Michael Hong and Dr Douglas Andrews.

The decision of the Appeal Panel and the grounds of appeal

1. On 23 November 2023, the Appeal Panel issued its statement of reasons. As I noted above, the Appeal Panel did not uphold any of the plaintiff's contentions in the appeal but recognised that the medical assessor should have rounded the final WPI up from 4.5%, rather than down; and on that basis revoked his determination and determined that the plaintiff's WPI was 5%.

The Appeal Panel's reasoning on self care and personal hygiene

1. The Appeal Panel first set out the criteria for class 2 and class 3 of the self care and personal hygiene scale (at [10]), extracted the reasons of the medical assessor in the PIRS form (at [11]), and noted the history he had taken of the plaintiff in relation to her social activities addressed (at [12]).
2. The Appeal Panel acknowledged that some of the history that the medical assessor had recorded "was not quoted in the reasons given in the PIRS Table for assessing a class 1 impairment", but said that the medical assessor's reasons were "to be read as a whole" (at [13]) and continued (at [14]): "In summary, the Medical Assessor found that the appellant showers at least every second day, and brushes her teeth daily, though she often or sometimes skips a day; that she cooks once a week relying on her husband to cook the rest of the time; that she leaves most of the housework to her husband and daughter; that [she] does not visit the dentist or optician as often as previously; and that the frequency of haircuts, visits to the beautician and changing of jewellery has been adversely affected by the fact that she has become indifferent to her appearance."
3. Pausing there, it is apparent from a comparison of the above paragraph with the medical assessor's reasons in the PIRS table that the Appeal Panel's summary did not reflect the medical assessor's reasons. Nonetheless, the Appeal Panel proceeded on the basis of its summary, stating: "[15] It was the task of the Medical Assessor to determine in which category the behavioural consequences of psychological injury best fit, by applying the descriptors in each class of impairment as examples: Guidelines at [11.12]. [16] Whether the facts fit better into class 2 or class 3 is a matter of opinion on which reasonable minds might differ. In our view, they fit better into class 2, because the history was consistent with a class 2 impairment, and no history was taken to the effect that a community nurse has to visit to ensure minimum levels of hygiene and nutrition, or that the worker skips meals (as distinct from eating meals prepared by others), or that the worker needs prompting to wear clean clothes - which might be consistent with class 3 impairment. [17] The criteria in each class are not prescriptive, but they must be considered in determining into which of two classes a given set of behavioural consequences best fits. [18] In our view, it was well open to the Medical Assessor to assess a class 2 on the history taken, even if reasonable minds might differ. A mere difference of opinion does not demonstrate error or the application of incorrect criteria. We can discern neither. This ground fails."
4. By ground 1 of the Amended Summons, the plaintiff contended that in addressing its complaint about the reasons of the medical assessor about self care and personal hygiene, the Appeal Panel failed to respond to a substantial, clearly articulated argument that she had advanced. This was, she submitted, "not only a denial of procedural fairness but also a constructive failure to exercise jurisdiction".
5. In Fisher v Nonconformist Pty Ltd [2024] NSWCA 32, Kirk JA (Meagher JA and Simpson AJA agreeing) recently summarised the principles which are relevant to an allegation of constructive failure to exercise jurisdiction of the nature that the plaintiff has advanced. His Honour stated: "[117] Constructive failure to exercise jurisdiction arises where a decision-maker purports to have exercised the jurisdiction but in substance has not undertaken or completed the task of doing so because of failure to address some essential matter. [118] Here the appellants raise a form of constructive failure based on the alleged failure by the Member to respond to a critical argument. This is the variant of constructive failure of jurisdiction discussed by members of the High Court in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088. In that case Gummow and Callinan JJ, with whom Hayne J agreed, held that for an administrative decision-maker '[t]o fail to respond to a substantial, clearly articulated argument relying upon established facts' was both a constructive failure to exercise jurisdiction and a failure to accord natural justice (at [23]-[25]). Kirby J similarly held that where, as in that case, the decision-maker's mistake 'amounts to a basic misunderstanding of the case brought by an applicant, the resulting flaw is so serious as to undermine the lawfulness of the decision in question in a fundamental way' (at [88])."
6. His Honour quoted with approval the following passage from the reasons of Meagher JA in Day v SAS Trustee Corporation [2021] NSWCA 71 at [37] (Payne and White JJA agreeing): "… a constructive failure to exercise jurisdiction (or a purported exercise, in the sense that there is an appearance of an exercise of jurisdiction) as alleged by the appellant is not a mere failure to consider evidence or to address an argument or submission, which may be contingent or otherwise insignificant, but a failure to understand and determine a case or claim. The ultimate question is whether a failure to consider and address certain issues or arguments involved a failure to address central or critical elements of the case or claim: compare, in relation to failures to consider evidence, Minister for Immigration and Citizenship v SZRKT (2013) 212 FCR 99; [2012] FCA 317 at [69], [111]. It will be insufficient for the appellant to show that his 'three key issues' were not stated and determined discretely. What he must show is that they raised 'substantial' (in the sense of clearly material) arguments or questions which the primary judge in substance failed to address in determining the appellant's claim ...".
7. I have set out the submissions the plaintiff advanced to the Appeal Panel about self care and personal hygiene at [38]-[39] above. Her central point was that in concluding that her impairment on this scale was properly assessed as within class 2, the medical assessor had not brought to account what she said in her August 2022 statement on that subject, or pertinent statements in her history as he had recorded it (that inference being available from the absence of any reference to those matters in his reasons in the PIRS table). The plaintiff submitted to the Appeal Panel that on all of the material before the medical assessor that was relevant to this category, she would properly be assessed as class 3.
8. The Appeal Panel did not engage with that submission. It emphasised that it was "the task of the Medical Assessor to determine in which category the behavioural consequences of psychological injury best fit", when the point the plaintiff was making was that the medical assessor had undertaken that task in relation to self care and personal hygiene without considering all of the material that was relevant to that scale. The Appeal Panel's statement that where the facts fit "is a matter of opinion on which reasonable minds might differ" might be relevant when considering whether demonstrable error has been shown (see Vannini v Worldwide Demolitions Pty Ltd [2018] NSWCA 324 at [87] (Gleeson JA, Macfarlan JA and Barrett AJA agreeing) ("Vannini")), but it was not an answer to the plaintiff's point, that the medical assessor had omitted relevant material from his assessment. It was not a case, as the Appeal Panel sought to characterise it, of the medical assessor having "not quoted" some of the history in his reasons in the PIRS table.
9. Although the Secretary contended that there was no failure on the part of the Appeal Panel to engage with the plaintiff's submissions, the Secretary's written and oral submissions sought to defend the ground on the basis of the merits of the decisions of the medical assessor and the Appeal Panel on this scale. Those submissions did not answer the ground the plaintiff advanced. It follows that ground 1 is made out.

The Appeal Panel's reasoning on social and recreational activities

1. I have set out the plaintiff's submissions to the Appeal Panel on this PIRS category above at [40]-[41]. Those submissions raised for consideration the issue that the Court of Appeal considered in Ballas v Department of Education (State of NSW) (2020) 102 NSWLR 783; [2020] NSWCA 86 ("Ballas"). Bell P and Payne JA (with whom Emmett AJA agreed) there stated: "[93] Whilst it is no doubt correct that an AMS [Approved Medical Specialist] must exercise a degree of clinical judgment in assigning a class of seriousness to each area which he or she is required to address in completing a medical assessment, the characterisation of conduct as going to 'social and recreational activities' on the one hand, as opposed to any of the other five scales on the other hand, is not a matter of discretion. [94] Even if there may, as a matter of English language, be some overlap between some of the scales or categories of functional impairment, for the purposes of the WPI assessment exercise, particular conduct will fit within one or other of the scales. This calls for the correct characterisation of the conduct, ie whether it goes to 'self care and personal hygiene', 'social and recreational activities', 'travel', 'social functioning (relationships)', 'concentration, persistence and pace' or 'employability'. This does not involve an exercise of discretion. If conduct is wrongly assigned to one scale, when it should have been assigned to another, this will result in the AMS taking into account an irrelevant consideration in the context of assigning a class to each of the distinct scales. This will inevitably bear upon the calculation of the WPI which is critical for an injured worker's entitlement to compensation."
2. The Appeal Panel did not address the issue that the plaintiff raised in this regard in relation to the range of conduct that the medical assessor had relied upon in assessing social and recreational activities. Instead, the Appeal Panel adopted the same approach in relation to this scale as it had for self care and personal hygiene, summarising the plaintiff's history and the medical assessor's reasons before concluding: "[22] This history was interpreted by the Medical Assessor in the way that he summarised in his PIRS Table, extracted above. Essentially, he interpreted the history to mean that the worker 'socialises with family and a few close friends', occasionally goes out for social or recreational activities, participates in [sic] once a month in her Arts in Recovery program, attends a dialectical behaviour group therapy program (also monthly), even though she is 'less interested in social and recreational activities than she was prior to the injury' and her social and recreational activities are mostly 'home based or structured around her immediate family'. [23] In our view, that was a reasonably accurate summary of the history taken. It is consistent with the exemplars for a class 2 impairment. It was reasonably open to the Medical Assessor to find that the behavioural effects of injury best fit the exemplars for a class 2 impairment. [24] Whether or not those effects were also consistent with the exemplars for a class 3 impairment, and better fit those exemplars, is a matter of opinion on which reasonable minds might differ. In our view, they do not better fit the exemplars for a class 3 impairment, because the evidence does not satisfy us that the worker will not go out without a support person - even though she may take a support person from time to time - or that she is not actively involved in social and recreational activities, remaining quiet and withdrawn. [25] Our opinion, however, is beside the point. As it is a matter of opinion, the omission to assess a class 3 impairment is not one which discloses error of any kind. This ground also fails."
3. The focus of the Appeal Panel's was whether the matters on which the medical assessor relied were "consistent with the exemplars for a class 2 impairment". That reasoning did not grapple with the point the plaintiff was seeking to make in her submissions, which was that a number of the plaintiff's activities on which the medical assessor relied as social and recreational activities were not correctly characterised as such. Nowhere in the Appeal Panel's reasons did it address that argument.
4. The Secretary's written submissions again sought to engage with the merits of the Appeal Panel's assessment, contending that clinical observations should be pre-eminent. Again, that submission did not answer the constructive failure to exercise jurisdiction that the plaintiff advanced. As Bell P and Payne JA recognised in Ballas, "[m]isassignment of conduct to a particular area or 'scale', and assessment of that conduct for the purposes of assigning a rating or 'class' to that area, has the potential to distort the overall WPI of an injured worker": at [84]. The plaintiff advanced a substantial clearly articulated argument that was directed to that issue. The Appeal Panel did not consider it. Ground 2 is made out.

Communication of the Appeal Panel's own views

1. The plaintiff also took issue with the comments that the Appeal Panel made in upholding the medical assessor's rating for self care and personal hygiene, and his rating for social and recreational activities. In relation to the former, the Appeal Panel stated at [16]: "Whether the facts fit better into class 2 or class 3 is a matter of opinion on which reasonable minds might differ. In our view, they fit better into class 2, because the history was consistent with a class 2 impairment…". (Emphasis added.)
2. The Appeal Panel made a similar comment in relation to social and recreational activities (see [24] of its reasons, extracted in [57] above). However, it subsequently stated that its own opinion was "beside the point": at [25].
3. The plaintiff contended that the Appeal Panel introduced an irrelevant consideration, namely, its own opinion, which diverted it from its statutory task. The Secretary, on the other hand, submitted that the words "in our view" did not indicate that the Appeal Panel was conducting its own assessment and offering its own opinion, particularly having regard to the acknowledgment in [25] that its view was beside the point.
4. The task for the Appeal Panel was to determine the grounds of appeal by reference to the submissions advanced in respect of those grounds: Vannini at [20]-[22] (Gleeson JA, Macfarlan JA and Barrett AJA agreeing). The comments about which the plaintiff complained in ground 3 supported the plaintiff's complaint on grounds 1 and 2, that the Appeal Panel was directing itself to the task of making an independent assessment of the plaintiff's impairment with respect to self care and hygiene, and social and recreational activities, at the expense of considering what she had submitted. That said, the Appeal Panel also expressly recognised, correctly, that its own views were not relevant. In the face of that acknowledgment, I am not satisfied that ground 3 as advanced is made out.

The Appeal Panel's approach to s 323 of the 1998 Act

1. In Cole v Wenaline Pty Ltd [2010] NSWSC 78 ("Cole"), in a case involving physical injury, Schmidt J explained the operation of s 323 in these terms: "[29] As the plaintiff argued, to so approach the exercise required to be undertaken by s 323, was to fall into an error of law. The section is directed to a situation where there is a pre-existing injury, pre-existing condition or abnormality. For a deduction to be made from what has been assessed to have been the level of impairment which resulted from the later injury in question, a conclusion is required, on the evidence, that the pre-existing injury, pre-existing condition or abnormality caused or contributed to that impairment. [30] Section 323 does not permit that assessment to be made on the basis of an assumption or hypothesis, that once a particular injury has occurred, it will always, 'irrespective of outcome', contribute to the impairment flowing from any subsequent injury. The assessment must have regard to the evidence as to the actual consequences of the earlier injury, pre-existing condition or abnormality. The extent that the later impairment was due to the earlier injury, pre-existing condition or abnormality must be determined. The only exception is that provided for in s 323(2), where the required deduction 'will be difficult or costly to determine (because, for example, of the absence of medical evidence)'. In that case, an assumption is provided for, namely that the deduction 'is 10% of the impairment'. Even then, that assumption is displaced, if it is at odds with the available evidence. [31] The reason for this statutory approach can readily be seen. It is entirely possible that a person could suffer such a catastrophic injury, that the presence or absence of any previous injury, pre-existing condition or abnormality, would make no difference at all to the impairment which resulted from the later injury. An injury which results in death, is an obvious example, albeit not one which would arise for consideration under this section. A more relevant example, in this case, is a second injury which severed the spine. Or, as was discussed in the authorities, an earlier injury which was asymptomatic, may or may not contribute to the impairment which results from a second injury. That is a matter of fact to be assessed on the evidence led in each case. An assumption of the kind here made, namely that surgery to the lumbar spine, irrespective of outcome, must always result in a level of residual impairment which contributes to the level of impairment which follows a later injury, has no role to play in that assessment. What must be determined on the evidence is whether any proportion of the permanent impairment present after the second injury was due to the earlier injury." (Emphasis added.)
2. Subsequently, in Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liq) [2013] NSWSC 365 ("Elcheikh"), Schmidt J summarised the "steps" involved in applying s 323 as follows (at [126]): "As discussed in Cole v Wenaline Pty Limited at [30], in the case of a workplace injury caused by an exacerbation or acceleration of a pre-existing condition, what must be determined by a medical specialist under s 323 is: • Firstly, what the extent of the resulting impairment is. • Secondly, whether the pre-existing condition contributed to the impairment. • Thirdly, if it did, what proportion of the impairment was due to the pre-existing condition."
3. Her Honour's decisions have been followed on a number of occasions, including, in recent times, in cases involving psychiatric injury: Secretary, Department of Communities and Justice v Lewandowski [2023] NSWSC 334 at [51]-[52] (Griffiths AJ); and Secretary, Department of Communities and Justice v Taane [2024] NSWSC 54 at [28] (Chen J).
4. As contemplated by s 323(4) of the 1998 Act, [11.10] of the Guidelines makes provision for the method of assessment of the deduction. I have set out the terms of [11.10] above at [16]. In Coca-Cola Europacific Partners API Pty Ltd v Pombinho [2024] NSWCA 191 ("Pombinho"), the appellant submitted (as summarised by Ward P at [61]) that the process of determining what, if any, deduction was required for pre-existing injury required a comparison between the present impairment and the pre-existing impairment, that is, "a disentanglement between the impairment suffered due to the pre-existing injury and that due to the injury giving rise to the present claim".
5. In Pombinho, the medical assessor had failed to consider relevant material (this was the appellant's ground 2 before the Appeal Panel), and had not considered whether a s 323 deduction was necessary (this was the appellant's ground 4 before the Appeal Panel). The appellant contended that in those circumstances the Appeal Panel, having found that those two grounds were established, should not have been required to start with the PIRS assessment that the medical assessor had undertaken, which was limited to the worker's current condition. In allowing an appeal from the decision of the primary judge that the Appeal Panel had exceeded its jurisdiction, Ward P stated at [86] (White JA and Stern JA agreeing): "In any event, Ground 4 in my opinion suffices to bring the assessment of Mr Pombinho's current whole person impairment within the scope of the grounds of appeal and hence within the jurisdiction of the Appeal Panel. That is because I accept the appellant's submission that, in order to determine the impact of pre-existing injury on current whole person impairment, a comparative exercise was necessary and that it would be logically incoherent simply to begin the exercise from a fixed starting point (i.e., the 24% whole person [impairment] assessment made by the Medical Assessor) and then separately to consider the extent to which the pre-existing injury contributed to that whole person impairment (and then to apply that amount to the fixed starting point) without considering the starting point itself. The approach required by the Guidelines is a subtractive approach, requiring a deduction from the starting point of whole person impairment, but it would make the exercise artificial if, having been required to consider all of the material that the Medical Assessor had failed to consider, the Appeal Panel could not then revisit the starting point of the assessment."
6. As I noted above, the plaintiff made two complaints to the Appeal Panel about the medical assessor's approach to s 323 of the 1998 Act: the first was essentially factual, and related to the diagnosis of the plaintiff with bipolar disorder type 1 as a pre-existing condition. The second took issue with his approach to the deduction, specifically, his conclusion that there should be a deduction of 50% of the plaintiff's assessed WPI percentage.
7. In respect of the plaintiff's challenge to the factual basis of the medical assessor's assessment, the Appeal Panel stated that the medical assessor "was not bound to accept the opinions of other clinicians, including their diagnoses." It outlined the evidence upon which the medical assessor based his diagnosis, and continued: "[29] … a report by the worker's treating general practitioner dated 17 January 2019 referred to a history of depression commencing 25 years previously, the taking of antidepressant medication over a period of 20 years, and to her fluctuating mental state over that period. [30] The appellant's submission that this evidence goes only to the period after 20 March 2019 must be rejected. It is evidence relevant to the appellant's psychological condition prior to injury, noting that the injury alleged was a psychological injury resulting from an accumulation of work stressors from 20 March 2019. The Medical Assessor was both obliged and entitled to have regard to this evidence in identifying the existence and nature of a pre-existing condition, as he did. [31] We can discern no error in his determination that bipolar disorder type 1 existed prior to the work stressors which caused the injury."
8. By these paragraphs, the Appeal Panel addressed the factual issue that the plaintiff had raised. The plaintiff does not contend on this application that it was not open to the medical assessor to diagnose the plaintiff with bipolar disorder type 1 and does not challenge the Appeal Panel's finding to that effect.
9. The Appeal Panel then moved on to consider "whether that disorder contributed to current impairment", being the second step that Schmidt J identified in Cole and Elcheikh. I have set out the plaintiff's submissions to the Appeal Panel at [44] above. The Appeal Panel concluded that the medical assessor had not turned his mind to the issue of causation, stating that in order to find that a pre-existing condition contributed to current impairment, a medical assessor must be satisfied that, but for the existence of the pre-existing condition, the current impairment would not be as great as it is, citing Ryder v Sundance Bakehouse [2015] NSWSC 526 ("Ryder"). Nonetheless, the Appeal Panel considered the error was inconsequential because the test in Ryder was, in its view, easily satisfied on the facts, stating at [36]: "After the onset of work stressors on 20 March 2019 which caused psychological injury, the worker became incapable of working, suffered the adverse behavioural consequences of injury summarised by the Medical Assessor in his PIRS Table, and was admitted to the mental health unit of the Mater Hospital in Newcastle as an involuntary patient in February 2022 with a manic episode with psychotic features. These represent a substantial deterioration when compared with her pre-injury condition. In the absence of bipolar disorder type 1, it is highly unlikely that she would have suffered symptoms or behavioural consequences as severe as these. In our view, her impairment would now be less than it is. The pre-existing bipolar disorder contributes to current impairment." (Emphasis added.)
10. The last two sentences of this paragraph represent a conclusion on the second step. The italicised passage, however, is relevant to the third step, to which the Appeal Panel turned in the following paragraphs: "[37] We turn to consider the extent of the deduction. Before the onset of work stressors on 20 March 2019, the applicant was working, notwithstanding difficulties which she was experiencing as a result of the pre-existing bipolar disorder. As indicated, after the onset of work stressors which aggravated her symptoms, she became incapable of working, suffered the adverse behavioural consequences of [her] injury summarised by the Medical Assessor in his PIRS Table, and was admitted to the mental health unit of the Mater Hospital in Newcastle as an involuntary patient. Even though it might be said that the extent of the deduction is difficult or costly to determine, that evidence in our view is at odds with a deduction of one-tenth." [38] At [10(c)(i)], the Medical Assessor found: 'I cannot conclude that the greater proportion of her psychological impairment arises from the work related aggravation. The pre-existing condition and the work related injury had substantial impacts; one is not greater than the other.' [39] It is not possible to determine with precision the relative contributions to impairment of the pre-existing bipolar disorder and psychological injury. Nevertheless, we agree that the contribution to the current injury by the pre-existing bipolar disorder on the one hand and the psychological injury on the other are about equal, because the bipolar disorder type 1 has continued to affect the appellant to a significant degree, its effects continue to be significant, and those effects have been significantly increased by psychological injury. In our view, a deduction of one half is open on the evidence, and accurate."
11. The focus of s 323 is the degree of permanent impairment resulting from an injury. Section 323(1) requires a deduction for any proportion of the impairment that is due to any previous injury or that is due to any pre-existing condition or abnormality. The exercise to determine the extent of that deduction is provided for in the Guidelines at [11.10], as explained by Ward P in Pombinho. The Secretary did not submit that the decision of Simpson AJA in Marks (No 2), in which her Honour held that [11.10] of the Guidelines was invalid where a pre-existing condition was asymptomatic, applied to the present case, in which the plaintiff was, on the medical assessor's findings, symptomatic before the onset of the work-related stressors in March 2019.
12. In order to ascertain what, if any, proportion of the plaintiff's current level of WPI was due to her pre-existing condition, the Guidelines required the medical assessor to undertake an assessment of the plaintiff's pre-injury level of functioning, by reference to the PIRS. If that could not be assessed, the Guidelines prescribed that the deduction was to be one-tenth of her assessed WPI (it was not submitted that this was inconsistent with s 323(2)). The plaintiff's complaint to the Appeal Panel was that the medical assessor did not approach the issue consistently with the Guidelines. Instead, notwithstanding his conclusion that the extent of the deduction was difficult or costly to determine, he settled on a deduction of 50% on the basis of an assessment on his part of what proportion of her psychological impairment - that is, her injury - could be attributed to her pre-existing condition.
13. In oral submissions, counsel for the Secretary submitted that while [39] of the Appeal Panel's reasons could have been more eloquently expressed, it showed that the Appeal Panel had taken into account the pre-existing condition, considered the overall impairment and had accepted that the two were of equal proportion. The Panel had thereby taken into account what was pre-existing, what the current impairment was, and how the pre-existing condition impacted on the overall impairment. The Secretary submitted in writing that, on the basis of this finding, it was reasonable for the panel to uphold the medical assessor's s 323 deduction.
14. I do not accept that submission. In my view, in dismissing this complaint, the Appeal Panel adopted the same erroneous approach as the medical assessor, focusing on "the contribution to the current injury by the pre-existing bipolar disorder". So much is clear from the penultimate sentence of paragraph [39] of the Appeal Panel's reasons, in which the Panel concluded that "the contribution to the current injury by the pre-existing bipolar disorder on the one hand and the psychological injury on the other are about equal". As the plaintiff submitted, that did not address the issue she had raised, and in any event it was not the right question. In asking itself the wrong question in this regard, the Appeal Panel made a jurisdictional error; it may also be characterised an error of law on the face of the record. I would uphold ground 4.

Conclusion

1. That which should be quashed is the order made by the Appeal Panel on 23 November 2023 as encapsulated in the certificate of determination issued by the Personal Injury Commission dated 9 January 2024: State of New South Wales v Wright [2023] NSWSC 757 at [57] (Basten AJ).
2. At the hearing, the parties informed me of their agreement that each party should pay their own costs of the application. Accordingly, I make the following orders: 1. Set aside the decision of the third defendant dated 23 November 2023, and the Certificate of the Personal Injury Commission dated 9 January 2024. 2. The matter be remitted to the second defendant for referral to a differently constituted appeal panel under s 328 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) to be determined according to law. 3. There be no order as to costs.

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