Secretary, Department of Communities and Justice v Taane & Ors

The injury and claim: an overview

1. The first defendant commenced employment as a correctional officer with the Department of Communities and Justice in 2013. In the course of that work, the first defendant alleges, and the plaintiff accepts, that she suffered psychiatric injury. The first defendant ceased her work as a correctional officer in December 2018 due to her psychiatric symptoms - with 20 December 2018 being the deemed date of injury.
2. From December 2018, the first defendant was paid statutory compensation benefits until her termination in September 2020. On 9 December 2021, the first defendant lodged a claim for permanent impairment compensation pursuant to ss 65A and 66 of the Workers Compensation Act 1987 (NSW) ('the WCA') in which she claimed $51,780 - reflecting 20% whole person impairment ('WPI').
3. On 17 May 2022, the plaintiff issued a notice pursuant to s 78 of the WIM Act - a notice that recorded the plaintiff disputed that the first defendant had a degree of permanent impairment of at least 15% pursuant to ss 65A and 66 of the WCA.

The medical assessment of the first defendant

1. On 21 November 2022, the first defendant was assessed by Dr John Lam-Po-Tang, a medical assessor of the Personal Injury Commission, following which he issued a medical assessment certificate dated 8 December 2022. By that certificate, Medical Assessor Lam-Po-Tang concluded that the first defendant had "clinical features of Borderline Personality Disorder, Persistent Depressive Disorder and Posttraumatic Stress Disorder". However, based on the "history provided", he found that the first defendant's Borderline Personality Disorder constituted a "pre-existing psychiatric condition", and that disorder rendered her "more vulnerable to developing psychiatric symptoms following exposure to traumatic incidents, and increases the likelihood of severe symptoms following such exposure".
2. Medical Assessor Lam-Po-Tang assessed the first defendant's psychiatric injuries as giving rise to a total WPI of 19% - however, he made a deduction for the "pre-existing condition" pursuant to s 323 of the WIM Act (viz., the first defendant's Borderline Personality Disorder) that resulted in an assessment of the first defendant's final WPI as 17%.

The appeal to the Appeal Panel

1. On or around 5 January 2023, the plaintiff filed an appeal (a document described as: 'Appeal Against a Decision of Medical Assessor') against the decision of Medical Assessor Lam-Po-Tang (exhibit B). Attached to the appeal were written submissions dated 5 January 2023. By that appeal, the plaintiff raised two grounds: first, that the assessment was made on the basis of incorrect criteria, pursuant to s 327(3)(c) of the WIM Act; and, secondly, that the certificate contained a demonstrable error, pursuant to s 327(3)(d) of the WIM Act (exhibit J, [2]).
2. The first defendant filed a response on or around 23 January 2023 (a document described as: 'Notice of Opposition Appeal Against Decision of Medical Assessor'). Attached to the response were written submissions dated 18 January 2023 (exhibit C).
3. A delegate determined that, in each respect, the appeal ground was "arguable, or capable of being made out, on the face of the application and the parties submissions" (exhibit J, [4] and [5]) - and, accordingly, referred the appeal to an Appeal Panel for determination.

The decision of the Appeal Panel

1. The Appeal Panel, by determination and reasons dated 21 March 2023, "confirmed" the medical assessment certificate issued on 8 December 2022 (exhibit D).
2. Relevant to what, ultimately, was argued to amount to the "errors" of the Appeal Panel - those that relate to the extent of the deductions to be made pursuant to s 323 of the WIM Act - by way of summary, the critical findings and conclusions made by the Appeal Panel were as follows: (a) notwithstanding the first defendant's psychiatric history, including "her history of pre-existing [Borderline Personality Disorder]", the first defendant was able to continue in her employment "until obliged to cease work due to injury" (Appeal Panel reasons at [53]); (b) applying s 323 of the WIM Act, the Appeal Panel considered that it would be "difficult or costly to determine" the extent of the deduction required for the pre-existing condition such "that 10% of the WPI assessed by the Medical Assessor of 19% should be deducted, resulting [in] an assessment of 17% WPI as a result of injury on 20 December 201[8]" (Appeal Panel reasons at [54]); and (c) the Appeal Panel held that this deduction "was not at odds with the evidence before the Medical Assessor of her pre-injury functioning and summarised" in the medical assessment certificate (Appeal Panel reasons at [55]).
3. The Commission issued a Certificate of Determination dated 29 March 2023, ordering the plaintiff to pay the first defendant, as lump sum compensation under s 66 of the WCA, $42,450 "in respect of 17% permanent impairment resulting from injury on 20 December 2018" (exhibit E).
4. Having sketched that background, I will, before dealing with the plaintiff's arguments, set out the relevant statutory provisions.

Injury causing permanent impairment

1. Where a worker suffers an injury that results in a degree of permanent impairment, there may be an entitlement to compensation for that permanent impairment (in addition to any other compensation payable).
2. The degree of permanent impairment that results from an injury is to be assessed in accordance with s 65 of the WCA and Chapter 7, Part 7 of the WIM Act: s 65(1) of the WCA. For permanent impairment compensation to be payable in respect of a primary psychological injury (accepted to be the case here), "the degree of permanent impairment resulting from the primary psychological injury" must be at least 15%: s 65A(3) of the WCA.

Medical assessment and medical disputes

1. Chapter 7, Part 7 of the WIM Act deals with medical assessment of medical disputes. Relevantly here, where the degree of permanent impairment resulting from an injury is disputed - viz., where there is a dispute about "the degree of permanent impairment of the worker as a result of an injury" - between the parties to a claim, it constitutes a "medical dispute": s 319(c) of the WIM Act. A medical dispute "has the meaning given by section 319": s 4(1) of the WIM Act.
2. The medical dispute arising may be referred for medical assessment: s 321 of the WIM Act.
3. The referral of the medical dispute is to a medical assessor: ss 4(1), 321(1) and (2) of the WIM Act. A medical assessor "means a person appointed under the Personal Injury Commission Act 2020 (NSW) as a medical assessor for the purposes of this Act": s 4(1) of the WIM Act.
4. Here, the medical dispute was about the first defendant's degree of permanent impairment, and that medical dispute was referred to a medical assessor - Medical Assessor Lam-Po-Tang.

Medical disputes: medical assessment

1. A medical assessor to whom a medical dispute has been referred is to give a medical assessment certificate as to the matters referred for assessment: s 325(1) of the WIM Act. The certificate is to certify the assessment, the reasons for assessment and the facts on which the assessment is based: s 325(2).
2. The status of medical assessments is dealt with by s 326. It provides: 326 Status of medical assessments (1) An assessment certified in a medical assessment certificate pursuant to a medical assessment under this Part is conclusively presumed to be correct as to the following matters in any proceedings before a court or the Commission with which the certificate is concerned-- (a) the degree of permanent impairment of the worker as a result of an injury, (b) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, (c) the nature and extent of loss of hearing suffered by a worker, (d) whether impairment is permanent, (e) whether the degree of permanent impairment is fully ascertainable. (2) As to any other matter, the assessment certified is evidence (but not conclusive evidence) in any such proceedings.

Medical disputes: assessment of impairment

1. The assessment of the degree of permanent impairment of an injured worker is to be assessed in accordance with the Workers Compensation Guidelines: s 322(1) of the WIM Act. Those guidelines are issued under s 376: s 4(1) of the WIM Act. There are also specific guidelines issued that "relate to the assessment of the degree of permanent impairment of an injured worker as a result of an injury": s 377(1) of the WIM Act. They are described as: 'NSW workers compensation guidelines for the evaluation of permanent impairment', Fourth edition.
2. Section 323 of the WIM Act deals with deductions for any proportion of impairment that is due to a previous injury or pre-existing condition or abnormality. The key complaint of the plaintiff in this application is that the Appeal Panel failed to apply - or correctly apply - s 323, so I will set out the section in full: 323 Deduction for previous injury or pre-existing condition or abnormality (1) In assessing the degree of permanent impairment resulting from an injury, there is to be a deduction for any proportion of the impairment that is due to any previous injury (whether or not it is an injury for which compensation has been paid or is payable under Division 4 of Part 3 of the 1987 Act) or that is due to any pre-existing condition or abnormality. (2) If the extent of a deduction under this section (or a part of it) will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction (or the relevant part of it) is 10% of the impairment, unless this assumption is at odds with the available evidence. (3) The reference in subsection (2) to medical evidence is a reference to medical evidence accepted or preferred by the medical assessor in connection with the medical assessment of the matter. (4) The Workers Compensation Guidelines may make provision for or with respect to the determination of the deduction required by this section. (5) (Repealed).
3. In Cole v Wenaline Pty Ltd [2010] NSWSC 78 ('Cole'), Schmidt J explained the operation of that section in these terms (at [29]-[31] and [38]): 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 lumber 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. … 38 What s 323 required, however, was that the evidence be considered, so that it could be determined, firstly, what the level of impairment after the second injury was. Secondly, whether a proportion of that impairment was due to the first injury. Thirdly, what that proportion was. Undoubtedly in undertaking this exercise, the medical members of an Appeal Panel must utilise their medical judgement, knowledge and experience. Nevertheless, all stages of the statutory exercise must be undertaken in the light of the evidence and without the making of assumptions not provided for by the section.
4. 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]): • 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.
5. These decisions have been followed on a number of occasions: see, for example, Fullford v Maccas Ferry Services Pty Ltd [2016] NSWSC 1161 at [28]; Secretary, Department of Communities and Justice v Lewandowski [2023] NSWSC 334 at [51]-[52]. Both (active) parties accepted the correctness of the decisions in Cole and Elcheikh; the present dispute turned upon the proper application of the principles established by those decisions - specifically, in relation to ground 1, the "third step".

Medical disputes: appeals

1. Section 327 of the WIM Act deals with appeals against medical assessments. A party to a medical "dispute may appeal against a medical assessment under this Part, but only in respect of a matter that is appealable under this section and only on the grounds for appeal under this section": s 327(1).
2. Section 327(2) makes provision for what is "appealable" under s 327(1): A matter is appealable under this section if it is a matter as to which the assessment of a medical assessor certified in a medical assessment certificate under this Part is conclusively presumed to be correct in proceedings before a court or the Commission.
3. Section 327(3) of the WIM Act identifies the four permitted grounds of appeal: The grounds for appeal under this section are any of the following grounds- (a) deterioration of the worker's condition that results in an increase in the degree of permanent impairment, (b) availability of additional relevant information (but only if the additional information was not available to, and could not reasonably have been obtained by, the appellant before the medical assessment appealed against), (c) the assessment was made on the basis of incorrect criteria, (d) the medical assessment certificate contains a demonstrable error.
4. The first two grounds (ss 327(3)(a) and (b)) have been described as "remedial grounds", whereas the second two have been described as "error-based grounds": Sleiman v Gadalla Pty Ltd [2021] NSWCA 236 at [61].
5. Pausing momentarily to recap: the grounds of appeal, as ultimately advanced by the plaintiff before the Appeal Panel, were confined to ss 327(3)(c) and (d) of the WIM Act, and the Appeal Panel approached the matter on this basis. The subject matter of those grounds related to the extent of the deduction for the pre-existing condition.
6. An appeal is made by application to the President of the Commission and is not to proceed unless the President is satisfied that, on the face of the application and any submissions, at least one of the specified grounds of appeal in s 327(3) is "made out": s 327(4). This imposes a requirement on the President not to assess "the correctness of the argument but simply [an assessment] that what has been put forward is arguable", in order for the appeal "to proceed": Ballas v Department of Education (2020) 102 NSWLR 783; [2020] NSWCA 86 at [72]. That state of satisfaction was reached, as I have earlier noted: see [11], above.
7. An appeal against a medical assessment is to be heard by an Appeal Panel constituted by two medical practitioners and one arbitrator: s 328(1) of the WIM Act. The appeal "is to be by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made": s 328(2) of the WIM Act.

The plaintiff's grounds of review: introduction and summary

1. The plaintiff raises three grounds of review in relation to the decision of the Appeal Panel, all of which centre on the extent to which the first defendant's pre-existing condition should have affected the assessment of her WPI. Those errors, shortly stated, are said to be: first, that the Appeal Panel "applied the wrong test" in determining the extent of any deduction pursuant to s 323 of the WIM Act ('ground 1'); secondly, the Appeal Panel failed to give "adequate reasons" when determining the deduction ('ground 2'); and, thirdly, that the Appeal Panel took into account "irrelevant matters" when determining the extent of any deduction ('ground 3').
2. During the course of submissions, the plaintiff accepted that ground 3 did not add to the arguments raised by grounds 1 and 2 and was not pressed. The discussion that follows, therefore, is confined to grounds 1 and 2. In relation to the remaining two grounds, the plaintiff alleges that they reveal that the Appeal Panel "erred in law and made a jurisdictional error". An error within ground 1 would be a jurisdictional error (Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 at [41]; Rodger v De Gelder (2015) 71 MVR 514; [2015] NSWCA 211 at [95]), and an error within ground 2 would be an error of law on the face of the record (Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [28] ('Wingfoot')).
3. Before dealing with the grounds, a matter should be noted. The plaintiff's written submissions made reference to "the guidelines" used by the Medical Assessor and to the decision in Marks v Secretary, Department of Communities and Justice (No 2) [2021] NSWSC 616 - and the holding, in that case, that "the guidelines" were partially invalid (plaintiff's submissions at [8]). Nevertheless, no ground of appeal was directed to those guidelines (and their application in the present case), nor were any submissions made seeking to develop their materiality in the context of the grounds that were pressed. Accordingly, I have put these submissions to one side.

The plaintiff's submissions

1. By this ground, the plaintiff's essential complaint is that the Appeal Panel failed to apply s 323 of the WIM Act: the plaintiff argued that the Appeal Panel, "[i]n reaching its conclusion about the s 3232 [sic] deduction" failed to address "any of the steps set out" in the decisions in Cole and Elcheikh (plaintiff's submissions at [19]).
2. In furtherance of this ground, the plaintiff - although accepting there was no dispute that the first defendant suffered from a pre-existing condition - argued that the Appeal Panel "did not explain the mechanism by which the pre-existing condition has contributed to the current impairment" (plaintiff's submissions at [26] and [29]), or "why and how the pre-existing condition contributes, in fact, to the current impairment" (plaintiff's submissions at [27]). The plaintiff submitted that the approach adopted by the Appeal Panel was that "once it found a pre-existing condition it automatically followed that there was a deduction" (plaintiff's submissions at [28]).
3. It should be noted, however, that these written submissions were directed to each of the three grounds of review raised by the plaintiff in the amended summons, without differentiation. For this ground the argument, however, was narrowed and confined during submissions to a complaint that the Appeal Panel failed to apply the "third step" identified in Elcheikh.
4. The first defendant - whilst (properly) accepting that if the Appeal Panel misdirected itself or failed to apply the correct test, then error would be established entitling the plaintiff to relief - essentially submitted that, as a matter of substance, the Appeal Panel correctly approached the resolution of the "third step".

The reasons of the Appeal Panel

1. The plaintiff submitted that the critical parts of the reasons of the Appeal Panel - which evidenced the errors, as explained in [39]-[41], above and in particular the error relating to the "third step" - were confined to three paragraphs: [53]-[55]. It is appropriate therefore to set out in full the reasons of the Appeal Panel in those paragraphs: 53. The Medical Assessor has given a comprehensive overview of the respondent's condition, injury and treatment and accepts her reported long-term memory impairment, a well-recognised, if uncommon sequala, of ECT. The Panel also notes that: (a) notwithstanding the difficulties experienced by the respondent whilst she was employed by the appellant; (b) her history of pre-existing [Borderline Personality Disorder]; (c) the treatment she received prior to the commencement of her employment with the appellant, and (d) the traumatic break up of her marriage which included domestic violence, the respondent was able to continue in that employment until obliged to cease work due to injury, and with the assistance of her mother was able to look after her two young children. 54. Having regard to all of the evidence, the Panel is of the view that the extent of the deduction for pre-existing injury, condition or abnormality pursuant to s 323 of the 1998 Act would be difficult or costly to determine, and that 10% of the WPI assessed by the Medical Assessor of 19% should be deducted, resulting [in] an assessment of 17% WPI as a result of injury on 20 December 201[8]. Is the s 323(2) deduction at odds with the available evidence? 55. The Panel further determines that, for the reasons previously outlined, the s 323 deduction was not at odds with the evidence before the Medical Assessor of her pre-injury functioning and summarised in the MAC. There was significant social support, she possessed self-care, travel and cognitive capacity sufficient for work, and the breakup of her marriage was not the result of a psychiatric injury but rather domestic violence.

Discussion and consideration

1. As explained during the course of submissions, the plaintiff argued that the Appeal Panel, although identifying a pre-existing condition and "identified that it contributes", failed to identify how it contributes (T11.10-11.12). The Appeal Panel, as I have earlier noted, was said to have misdirected itself or failed to properly apply the statutory test in connection with the "third step" (T11.6).
2. It is, at this point, worth observing that whether the Appeal Panel committed errors of the kind alleged is determined as a matter of substance. Thus, the fact that a decision-maker correctly states the legal test to be applied does not, of course, mean that it was: it is well recognised that "formulaic recitation of a statutory test is neither sufficient nor decisive in determining whether the correct test has in fact been applied": IAG Ltd t/as NRMA Insurance v Chahoud (2019) 89 MVR 87; [2019] NSWSC 767 at [56] ('Chahoud'). Further, the fact that a decision-maker fails to refer to the legal test to be applied does not necessarily invalidate the decision if functionally it is apparent that the decision-maker, in fact, applied that test. These statements reflect a broader principle - namely, in determining whether there has been a misapplication of a statutory test, the focus is upon the substance of the reasons, reading them fairly and as a whole: Chahoud at [61]-[63]. The plaintiff's argument here was that, as a matter of substance, it was evident that there had been a failure to apply the third step (viz., determining "what was due to the pre-existing condition proportion of the impairment").
3. The question, then, is: was the correct legal test applied?
4. It is important to emphasise - and note - some matters that were expressly not in issue in the current application. First, the plaintiff accepted that the first defendant suffered psychiatric injury arising out of her employment, and there was no "issue of that nature before the Appeal Panel" (T6.50). Secondly, the Medical Assessor assessed the first defendant's overall degree of WPI at 19% "and no challenge was made to that assessment" by the plaintiff (T7.33-34). Thirdly, the plaintiff accepted that the Appeal Panel had correctly addressed the first and second steps as expressed in the decisions in Cole and Elcheikh (notably, that last decision) (T11.1-11.12). To be clear, the plaintiff accepted during the course of submissions that the Appeal Panel had determined the first and second steps: (a) the extent of the resulting impairment; and (b) whether the pre-existing condition contributed to the impairment.
5. Thus, as argued, the error of the Appeal Panel reduced to, and was said to lie in, its failure to apply the third step (viz., having identified that a pre-existing condition contributed to the impairment, determining "what proportion of the impairment was due to the pre-existing condition").
6. It is apparent that the three steps identified in Elcheikh are directed to s 323(1) of the WIM Act. As the decision in Cole (at [30]-[31]) emphasised, the third step - which is directed to determining "what proportion of the impairment was due to the pre-existing condition" - is evidence, not presumption, based. There is, however, an exception and a carve out to that exception provided by s 323(2): if "the extent of a deduction…will be difficult or costly to determine", then the degree of permanent impairment "that is due to any pre-existing condition or abnormality" - and therefore the subject of a "deduction"- is "to be assumed" as 10% of the impairment, "unless this assumption is at odds with the available evidence". Put another way, s 323(2) facilitates the determination of what was "due" to the pre-existing condition where determining the "extent of a deduction…will be difficult or costly": in those circumstances, "it is to be assumed… that the deduction… is 10% of the impairment, unless this assumption is at odds with the available evidence".
7. The plaintiff's submission was that the Appeal Panel failed to follow the terms of the statute because it failed to direct itself to the correct issue - which was said to be reflected in the following questions (that, although expressed in slightly different language, were nevertheless argued to be substantively the same): "Well, how do things contribute to the current impairment?" (T17.4) or: "How does the pre-existing condition contribute to the impairment resulting from the work injury?" (T17.48-17.49). I do not accept this submission, for the following reasons.
8. First, the question posed by the plaintiff does not reflect the language of the "third step", as expressed in Elcheikh. That step was expressed in that case to involve the following question: "…what proportion of the impairment was due to the pre-existing condition". Nor does the question posed by the plaintiff reflect the language of s 323(1). That section (relevantly) is expressed in these terms: "…there is to be a deduction for any proportion of the impairment that is due to … any pre-existing condition…".
9. Secondly, in my respectful view, the question posed by the plaintiff elides the second and third step. The second step - which, I add, the plaintiff conceded had been correctly observed by the Appeal Panel - is directed to determining "whether the pre-existing condition contributed to the impairment"; the third step, which builds upon the second, is directed to determining the proportion and the extent of that contribution. That last determination is, as I have noted above, facilitated by s 323(2). That elision is, in my respectful view, also reflected in the plaintiff's written submissions - where it was submitted that the "correct enquiry is whether the pre-existing condition contributes to the current impairment and if it does to what extent it contributes" (plaintiff's submissions at [29]): that submission encapsulates the second and third steps, not simply the third step.
10. Thirdly, in my view, the Appeal Panel correctly approached the third step. Having accepted that a proportion of the overall impairment was due to a pre-existing condition (a step the plaintiff conceded had occurred), the Appeal Panel then directed itself to determining the extent of the deduction that should be made by reason of the pre-existing condition - that is the "third step"- and this is apparent from (at least) the reasons of the Appeal Panel at [54]. There, the Appeal Panel found that the extent of the "deduction" would be "difficult or costly to determine" (a finding that follows, and is in conformity with, s 323(2)). Further, having made that finding (with the consequence that the "deduction" for what was "due" to the pre-existing condition would be 10%), the Appeal Panel then directed itself, again in conformity with s 323(2), to whether that "assumption is at odds with the available evidence" - and concluded that it was not. That is apparent from the reasons of the Appeal Panel at [55]. The manner in which this issue was approached, and resolved, was orthodox, in conformity with ss 323(1) and (2) and, critically, the "third step".
11. In my view, for these reasons, ground 1 should be rejected.

The plaintiff's submissions

1. In relation to this ground, the thrust of the interwoven written submissions was premised on there being an error relating to the "third step": that there was a misdirection/misapplication of the statutory test (see [41], above). That was principally, if not exclusively, the way it was argued during submissions. The fallback argument was that if error was not evident in the principal way argued by the plaintiff, then the error was one relating to inadequacy of reasons. As to reasons, the plaintiff's argument was confined to the following: (a) the Appeal Panel "did not explain how the pre-existing condition contributed to the current condition" (plaintiff's submissions at [29]); and (b) there was "no explanation" to support the finding that the s 323(2) deduction was not at odds with the available evidence (plaintiff's submissions at [30]).

The reasons of the Appeal Panel

1. The relevant paragraphs of the Appeal Panel reasons where the plaintiff submits that the error relating to reasons appears are [54]-[55] (T18.38-18.40). For convenience, I will set them out again: 54. Having regard to all of the evidence, the Panel is of the view that the extent of the deduction for pre-existing injury, condition or abnormality pursuant to s 323 of the 1998 Act would be difficult or costly to determine, and that 10% of the WPI assessed by the Medical Assessor of 19% should be deducted, resulting [in] an assessment of 17% WPI as a result of injury on 20 December 201[8]. Is the s 323(2) deduction at odds with the available evidence? 55. The Panel further determines that, for the reasons previously outlined, the s 323 deduction was not at odds with the evidence before the Medical Assessor of her pre-injury functioning and summarised in the MAC. There was significant social support, she possessed self-care, travel and cognitive capacity sufficient for work, and the breakup of her marriage was not the result of a psychiatric injury but rather domestic violence.

The relevant principles: the standard of reasons required

1. In Wingfoot, the High Court set out the following principles that relate to the standard of reasons required of an Appeal Panel (at [47], [54]-[56]): 47. … It goes too far, however, to conceive of the function of the Panel as being either to decide a dispute or to make up its mind by reference to competing contentions or competing medical opinions. The function of a Medical Panel is neither arbitral nor adjudicative: it is neither to choose between competing arguments, nor to opine on the correctness of other opinions on that medical question. The function is in every case to form and to give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise. 54. The objective, within the scheme of the Act, of requiring the Medical Panel to give a written statement of reasons for that opinion can therefore be seen to be that persons affected by the opinion automatically be provided with a written statement of reasons adequate to enable a court to see whether the opinion does or does not involve any error of law. There is an obvious benefit in requiring a written statement of reasons for an opinion always to meet that standard. The benefit is that it enables a person whose legal rights are affected by the opinion to obtain from the Supreme Court an order in the nature of certiorari removing the legal effect of the opinion if the Medical Panel in fact made an error of law in forming the opinion: an error of law in forming the opinion, if made, will appear on the face of the written statement. To require less would be to allow an error of law affecting legal rights to remain unchecked. To require more would be to place a practical burden of cost and time on decision-making by an expert body for no additional legal benefit and no identified systemic gain. 55. The standard required of a written statement of reasons given by a Medical Panel under s 68(2) of the Act can therefore be stated as follows. The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law… 56. … A Medical Panel explaining in a statement of reasons the path of reasoning by which it arrived at the opinion it formed is under no obligation to explain why it did not reach an opinion it did not form, even if that different opinion is shown by material before it to have been formed by someone else.
2. Although concerned with a different statutory scheme, these general principles apply to the present one: see, for example, Queanbeyan Racing Club Ltd v Burton [2021] NSWCA 304 at [42] ('Queanbeyan Racing'); Lancaster v Foxtel Management Pty Ltd [2022] NSWSC 929 at [45] ('Lancaster').
3. To those general principles, the following should be added. First, the adequacy of reasons must be evaluated in the context of what the Appeal Panel was asked to decide: "[n]o mechanical formula can be given for determining what constitutes sufficient reasons, but it is particularly important that a complaint that they are inadequate be assessed against the circumstances of the particular case": Sydney Trains v Batshon [2021] NSWCA 143 at [48] ('Batshon'); see also Lancaster at [52]. Secondly, the reasons of an administrative decision maker should not be reviewed "minutely and finely with an eye keenly attuned to the perception of error": Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, 287; [1993] FCA 322 at [22]; Minister for Immigration and Ethnic Affairs v Wu Shan Liang and Others (1996) 185 CLR 259, 272.

Discussion and consideration

1. As I have earlier noted (see [55], above), the plaintiff argued that [54] and [55] of the Appeal Panel's reasons reveal errors relating to reasons.
2. I will deal with each of the alleged errors in order.

The alleged error in par 54 of the Appeal Panel's reasons

1. The plaintiff submitted that, rather than explaining how the "pre-existing condition contributed to the current condition", the Appeal Panel addressed this matter by reference to the ability of the first defendant "to function prior to the work injury" (plaintiff's submissions at [29]). That approach was argued to be erroneous: it was argued that such an enquiry "about prior function is an enquiry into the extent of any pre-existing impairment…The correct enquiry is whether the pre-existing condition contributes to the current impairment and if it does to what extent it contributes" (plaintiff's submissions at [29]). I do not accept these submissions, for the following reasons.
2. First, [54] of the Appeal Panel's reasons is, contrary to what the plaintiff argued, directed to a different issue altogether and does not bespeak the error alleged: it is premised upon a finding of contribution by the pre-existing condition to the current one and not, as the plaintiff submitted, directed to determining and explaining that contribution. In my respectful view, that is clear from the way in which the Appeal Panel expressed itself in that paragraph of its reasons - it was considering "the extent of the deduction".
3. Further, to the extent that the plaintiff argued that the finding about the ability of the first defendant "to function prior to the work injury" was erroneous (I add, a finding that appears in the Appeal Panel's reasons at [53] and not [54]), in my respectful view, this submission is based upon a misunderstanding of the structure of the reasons of the Appeal Panel: that finding was an intermediate one that was relevant to the overall question about the extent to which the pre-existing condition contributed to the present one. In my view, a consideration of the ability of the first defendant "to function prior to the work injury" was plainly relevant to the overall question about "the deduction"; and it was also relevant to a consideration about whether the deduction of 10% for the pre-existing condition was "at odds with the available evidence".
4. Secondly, as the decisions in Batshon and Lancaster emphasise, the adequacy of the Appeal Panel's reasons "must be viewed in the particular context of the case": Lancaster at [52]. That matter bears emphasis because, in my respectful view, the reason why the Appeal Panel addressed the ability of the first defendant "to function prior to the work injury" was because it was raised in the written submissions that the plaintiff filed before the Appeal Panel. In those submissions, the plaintiff argued that the Medical Assessor erred in applying "a 10% deduction pursuant to section 323 of the [WIM] Act rather than providing a pre-injury assessment of impairment" (plaintiff's Appeal Panel submissions at 6). Thus, the plaintiff was arguing before the Appeal Panel that the Medical Assessor was in error in failing to provide "a pre-injury assessment of impairment" and, necessarily, the Appeal Panel should make findings in relation to that issue - which it did.
5. Further, and more fundamentally, in relation to the alleged error that the Appeal Panel failed to give reasons in connection with how the pre-existing condition contributed to the current condition, the "context" includes the fact that the plaintiff did not seek to challenge the finding of the Medical Assessor that there was a contribution by the pre-existing condition (being the Borderline Personality Disorder). The challenge, relevantly, was to the deduction that was to be made for that pre-existing condition (plaintiff's Appeal Panel submissions at 6 and (c), [19]-[21]). Thus, I accept, as the first defendant essentially submitted, that the appeal to the Appeal Panel was directed toward the extent of the deduction and not the operation of s 323(1) of the WIM Act and any question about "how" the pre-existing condition contributed to the present one (first defendant's submissions at [12] and [15]). The structure of the reasons of the Appeal Panel confirms this, in my view.
6. The plaintiff's appeal from the decision of the Medical Assessor specifically accepted the finding that there was a contribution to the current condition by the pre-existing Borderline Personality Disorder: the plaintiff had argued that the evidence permitted a finding that there was an assessable impairment that was able to be determined on the evidence that should be deducted and that the application of the 10% deduction was, contrary to what the Medical Assessor held, "at odds with the available evidence" (plaintiff's Appeal Panel submissions at 6 and (b)). The Appeal Panel was therefore not concerned with this issue: the appeal to the Appeal Panel (as it correctly observed in its reasons at [32]) was "limited to the grounds of appeal on which the appeal is made": s 328(2) of the WIM Act. The "Appeal Panel is not permitted to look for errors which are not part of the grounds of appeal on which the appeal is made": Queanbeyan Racing at [26].
7. Given these matters, in my view, it is simply not open to assail the reasons of the Appeal Panel on what is essentially the second step when that issue was not only not raised by a ground of appeal (or submission in aid of a ground) before it, but in fact accepted to exist.
8. Thirdly, and notwithstanding that no issue was raised about the fact that the pre-existing condition contributed to the current one, I consider an explanation for the contribution of the pre-existing condition to the present one sufficiently appears in the reasons of the Appeal Panel.
9. The structure of the Appeal Panel's reasons on this issue commences with its consideration of the Medical Assessor's reasons and the evidence directed to this issue. The Appeal Panel noted: (a) that the first defendant "had a history of psychiatric symptoms and treatment from her teenage years" (Appeal Panel reasons at [7]); (b) that there was a "history of the traumatic break up of her first marriage in 2017 involving physical violence and culminating in the deportation of her husband to New Zealand" (Appeal Panel reasons at [9]); (c) the opinion from Professor Derrick Silove (a consultant psychiatrist qualified on behalf of the plaintiff) that the "severe physical trauma" experienced during the period of domestic violence that occurred prior to the first defendant's marital separation "was likely to be an added causative factor in relation to her post-traumatic stress disorder and depression, or at least a major aggravating factor" and, further, that the history of borderline personality disorder had the consequence that persons afflicted with that condition "are more likely to have post-traumatic stress disorder and periods of severe depression" (Appeal Panel reasons at [40]-[41]); and (d) the clinical records from Dr Jon Pauley (the first defendant's general practitioner) that recorded the "difficult relationship", including incidents of domestic violence, but found that they were "insufficient to assess any degree of impairment as a result of the pre-existing [borderline personality disorder] referred to therein" and that they did not contain adequate information "about functioning and impairment upon which [to] base a pre-impairment calculation" (Appeal Panel reasons at [47]).
10. Thus, although I have concluded, given the grounds of appeal advanced before it (see [66], above), that the Appeal Panel was not required to address the "second step", in my view, it is sufficiently clear that the Appeal Panel necessarily accepted there to be a contribution by reason of the well-established Borderline Personality Disorder suffered by the first defendant, as the Medical Assessor found. In my respectful view, it is not entirely clear what more would be needed to explain that the Appeal Panel was satisfied that there was a contribution. Further, much of the ability of the Appeal Panel to be able to express, perhaps in more definitive terms, a conclusion on that issue would depend upon the evidence, and in particular the ability of the Appeal Panel to make a finding about the extent of that contribution. In this case, however, the Appeal Panel found that the evidence did not permit an exact finding about the extent to be made.

The alleged error in par 55 of the Appeal Panel's reasons

1. The plaintiff next submitted that the reasons of the Appeal Panel were legally insufficient in another respect - viz., when considering whether the proposed deduction of 10% was "at odds with the available evidence" (this being the "carve out", as I have described it: see [49], above). The plaintiff's argument was directed to the Appeal Panel's reasons at [55]. The nub of the plaintiff's argument was that the Appeal Panel provided "no explanation as to how any of these matters are relevant when applying the proper considerations for a s 323 deduction": the plaintiff submitted that the findings that were made merely go to the extent of any pre-existing impairment but "do not address the proper question which is to what extent does the pre-existing condition contribute to the current impairment" (plaintiff's submissions at [30]).
2. I do not accept this submission, for the following reasons.
3. First, contrary to what the plaintiff submitted, the Appeal Panel was not dealing with the issue contended by the plaintiff - argued to be: to what extent does the pre-existing condition contribute to the current impairment - in its reasons at [55]. The proper question - what was being addressed by the Appeal Panel in its reasons at [55] - were the terms of s 323(2): specifically, whether the "assumption" (being that the deduction "is 10% of the impairment"), is "at odds with the available evidence". The heading in the reasons of the Appeal Panel ("Is the s 323(2) deduction at odds with the available evidence?") accurately records what it was dealing with.
4. Secondly, although the plaintiff argued that a consideration of one of the matters raised in the Appeal Panel's reasons at [55] (essentially, the first defendant's pre-injury functioning) was not relevant to the question posed by the terms of s 323(2) being considered by the Appeal Panel - namely, whether the proposed deduction of 10% was "at odds with the available evidence" - in my respectful view, that is not so. It was plainly relevant to the comparative exercise required of the Appeal Panel to give consideration to the first defendant's pre-injury functioning in order to determine whether the assumed deduction would be contrary to the available evidence.
5. Thirdly, in my view, contrary to what the plaintiff argued, the Appeal Panel gave legally sufficient reasons for reaching its ultimate conclusion on this issue. The Appeal Panel, in its reasons at [55], made reference to "the reasons previously outlined": thus, in and of itself, it is not correct to confine the Appeal Panel's reasons on this issue merely to what is recorded in [55] of the Appeal Panel's reasons, as the plaintiff argued. Regard must be had to those "reasons previously outlined".
6. In relation to the "available evidence", put simply, as the first defendant essentially submitted, the Appeal Panel undertook an analysis of the evidence about the first defendant's Borderline Personality Disorder and found that much of the expert evidence secured by the (active) parties did not address the extent of contribution to the present condition by the pre-existing one. Having reached that point, the Appeal Panel made the following further findings (Appeal Panel reasons at [52]): 52. The Panel is therefore left with the opinions of Dr Bertucen and the Medical Assessor on the degree of WPI suffered by the respondent as a result of injury on 20 December 2018. Neither Dr Silove nor Associate Professor Kaplan provided such an assessment, and therefore did not comment on any degree of WPI that should be deducted for pre-existing injury, condition or abnormality. Dr Silove gave his opinion subject to the qualification that the respondent's history of sexual abuse in the workplace is accepted, and Associate Professor Kaplan noted this qualified acceptance.
7. In relation to the opinion from Dr Burtucen, the Appeal Panel had earlier noted that although Dr Burtucen had made a deduction of 10% for a pre-existing psychiatric condition, he "did not however give any reason for his deduction" of 10%: Appeal Panel reasons at [49]. No reliance was therefore placed upon that opinion by the Appeal Panel. Further, the Appeal Panel gave consideration to the clinical records from the first defendant's general practitioner, Dr Pauley, but essentially found that they did not contain adequate information "about functioning and impairment upon which [to] base a pre-impairment calculation" (Appeal Panel reasons at [47]).
8. In addition to these matters, the "reasons previously outlined" by the Appeal Panel include: (a) the finding at [53] - essentially, a finding that despite the history of the first defendant having a pre-existing Borderline Personality Disorder (and other matters relating to her psychiatric state), the first defendant was "able to continue in [her] employment until obliged to cease work due to the injury"; and (b) the finding that is contained in the second sentence in the Appeal Panel's reasons at [55] - essentially, a finding that the first defendant "possessed self-care, travel and cognitive capacity sufficient for work, and the breakup of her marriage was not the result of a psychiatric injury but rather domestic violence".
9. The Appeal Panel was satisfied, therefore, that the deduction of 10% was not "at odds with the available evidence".
10. In my respectful view, the Appeal Panel sufficiently explained not only why it would be "difficult or costly" to determine the deduction, particularly given the state of the evidence, but why they considered the deduction was not at odds with the available evidence: put simply, the evidence (including the medical evidence) did not usefully address the extent of the contribution and applying the 10% deduction was not at odds with that evidence, nor the evidence about the first defendant's pre-injury level of functioning.
11. In my view, for these reasons, ground 2 should be rejected.

Ground 3: taking into account "irrelevant matters"

1. As I have noted (see [37] above), this ground was not pressed during the course of oral submissions.

The first defendant's notice of motion

1. On 23 October 2023, the first defendant filed a notice of motion seeking an order that the amended summons be struck out in its entirety pursuant to r 14.28(1) of the Uniform Civil Procedure Rules 2005 (NSW). That notice of motion was, during the course of submissions by the first defendant, said to have been filed essentially defensively in connection with a possible issue about competency. The orders sought in that notice of motion were not pressed (accordingly, it will be dismissed), and the only issue about it remained one of costs.
2. In the event that the application failed, the plaintiff submitted that it should not have to bear the costs of the notice of motion. It was argued that the filing of that notice of motion was unnecessary. I agree.
3. Even if there was an issue, as the first defendant argued, about whether the plaintiff had adopted a position that was inconsistent with one that was taken before the Appeal Panel, that circumstance (if it be correct) could readily have been dealt with by submissions and argument. In my view, the first defendant should not have the costs of that notice of motion.

Orders

1. For the above reasons, I make the following orders: 1. Order the amended summons filed 27 June 2023 be dismissed. 2. Order the first defendant's notice of motion filed 23 October 2023 be dismissed. 3. In relation to the notice of motion filed 23 October 2023, make no order as to costs, such that each party is to bear its or her own costs of it. 4. Otherwise, order the plaintiff pay the costs of the first defendant of the proceedings in this Court.

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