Secretary, Department of Communities and Justice v Virtue

Secretary, Department of Communities and Justice v Virtue - [2024] NSWSC 1380 - NSWSC 2024 case summary — Zoe

HEADNOTE [This headnote is not to be read as part of the judgment] On 22 September 2013, Paul Andrew Virtue (the claimant) suffered an injury to his right knee in the course of his employment in the New South Wales Department of Aging, Disability and Homecare. Over the next decade a number of disputes arose between the claimant and his employer (represented by the Secretary, Department of Communities and Justice) relating to his claim for workers compensation. The present proceeding concerned a claim for lump sum compensation under s 66 of the Workers Compensation Act 1987 (NSW). The calculation of the compensation turned on the level of whole person impairment resulting from the injury, subject to deductions for previous injuries or pre-existing conditions, in accordance with s 323 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the 1998 Act). That exercise required an assessment of not only the claimant's right knee, but consequential impairments of his right ankle, his left knee and his left ankle. Both knees and the right ankle had been subject to pre-existing conditions. Where the extent of a deduction would be difficult or costly to determine, it is to be assumed that the deduction is 10% of the impairment, unless the assumption is at odds with the available evidence. On 25 September 2023, a medical assessor, Dr Jonathan Negus, provided a medical certificate assessing Mr Virtue's whole person impairment at 31%. He assessed the deduction for the right knee at 50%, but the deductions for the left knee and right ankle at 10%. The employer appealed the decision of the medical assessor with respect to the deductions for the left knee and the right ankle to a medical appeal panel of the Personal Injury Commission (the Panel). On 12 March 2024, the Panel upheld the appeal in part on an agreed miscalculation in the initial assessment (which increased the level of impairment) but otherwise dismissed the appeal. A further certificate was issued assessing the claimant's whole person impairment at 41%. On 9 August 2024 the employer, pursuant to an amended summons, sought judicial review of the Panel's decision. The issues concerned the deductions to be made on account of previous injuries and pre-existing conditions. The grounds of review were whether the Panel: 1. adequately considered the grounds raised on the appeal before it; and 2. gave adequate reasons for its decision. The Court, setting aside the decision of the Panel, held: As to (i) (adequacy of consideration) 1 The Panel was obliged in determining the appeal to respond to any substantial and clearly articulated case made by the appellant in respect of the application of s 323(1) of the 1998 Act. It was necessary not merely that the submissions be considered, but that that they be ruled upon. In the present case, the Panel did not set out the terms of the grounds of appeal or the submissions and dismissed in two sentences the employer's ground of appeal relating to the application of deductions by the assessor. The Panel's response did not demonstrate that it had properly considered the employer's grounds of appeal relating to the left knee and right ankle. It follows that the Panel failed to carry out its proper function according to law: [40]-[43], [47]-[49]. Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 applied. As to (ii) (adequacy of reasons) 2 The Panel's reasoning did not address the substance of the employer's submissions on the appeal, failing to explain how it had assessed unchallenged medical evidence of the claimant's prior injuries and pre-existing conditions (if it did) and failing to identify the medical evidence which it accepted or preferred in circumstances where the medical assessor had similarly failed to do so: [53]-[54]. Bay Simmer Investments Pty Ltd v State of New South Wales [2017] NSWCA 135; 222 LGERA 286; Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 applied. Query raised as to why all consequential impairments were not subject at least to the deduction attaching to the primary impairment due directly to the injury: [55]-[56].

[3]

JUDGMENT

BASTEN AJ: In 2013, Paul Andrew Virtue (the claimant) was employed as a disability support worker in the New South Wales Department of Aging, Disability and Homecare. On 22 September 2013, he suffered an injury to his right knee whilst lifting a patient onto a hoist, to place her into her wheelchair.
Over the ensuing decade, there were numerous disputes between the claimant and his employer (now represented by the Secretary, Department of Communities and Justice), in relation to his claims for workers' compensation. The present issue arises from a claim for lump sum compensation pursuant to s 66 of the Workers Compensation Act 1987 (NSW) (the 1987 Act). Such compensation is calculated by reference to the degree of permanent impairment resulting from the injury.
That calculation involved three steps, namely (i) identifying the scope of the "injury"; (ii) determining the extent of permanent impairment resulting from the injury, and (iii) determining any deduction to be made on account of previous injuries or pre-existing conditions or abnormalities.
As to the first matter, although the initial injury affected only the claimant's right knee, which was the subject of several surgical procedures, the claimant asserted that there had been consequential deterioration in his right ankle, his left knee and his left ankle.
By the time the claim for lump sum compensation was made, the employer had accepted that the deterioration of the left knee and left ankle were consequential upon the right knee injury. However, there remained a dispute as to the causal connection between the right knee injury and the deterioration of the right ankle. That dispute was referred to an arbitrator, Mr John Turner, who determined on 6 June 2023 that the claimant had suffered a consequential condition of the right ankle as a result of the accepted injury to the right knee. The scope of the "medical dispute" having been determined, there followed a referral to a medical assessor pursuant to s 293 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the 1998 Act) for assessment of "the degree of permanent impairment of the worker as a result of an injury". [1]
There are two operative provisions of the 1998 Act of present relevance. First, there is the general provision for assessment of impairment: 322 Assessment of impairment (1) The assessment of the degree of permanent impairment of an injured worker for the purposes of the Workers Compensation Acts is to be made in accordance with Workers Compensation Guidelines (as in force at the time the assessment is made) issued for that purpose. (2) Impairments that result from the same injury are to be assessed together to assess the degree of permanent impairment of the injured worker. (3) Impairments that result from more than one injury arising out of the same incident are to be assessed together to assess the degree of permanent impairment of the injured worker. Note - Section 65A of the 1987 Act provides for impairment arising from psychological/psychiatric injuries to be assessed separately from impairment arising from physical injury. (4) A medical assessor may decline to make an assessment of the degree of permanent impairment of an injured worker until the medical assessor is satisfied that the impairment is permanent and that the degree of permanent impairment is fully ascertainable. Proceedings before a court or the Commission may be adjourned until the assessment is made.
Importantly, the present case involved a single injury. Section 322(2) envisages that there may be multiple impairments resulting from a single injury, but only one "degree of permanent impairment". Section 323 deals with deductions: 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.
There is an awkwardness in the reference to "medical evidence" in subs (3), as that term only appears in subs (2) by reference to "the absence of medical evidence". It makes no sense to refer to evidence as accepted or preferred if it is absent. Nor is there any reason to consider whether the statutory assumption is at odds with evidence which has not been accepted. The better view is that subs (3) refers to "the available evidence", with which the assumption of 10% impairment must not be "at odds". So understood, the provisions operate coherently.
The central issues in the present case are whether the medical assessor exercised his function in accordance with s 323(1), and so far as applicable, s 323(2), and, if not, whether the appeal panel understood and corrected any error.
On 25 September 2023, a medical assessor, Dr Jonathan Negus, orthopaedic surgeon, provided a certificate assessing the total whole person impairment at 31%. On 23 October 2023, the employer lodged an appeal against the decision of the medical assessor, identifying six grounds. On 7 December 2023, a delegate of the President of the Personal Injury Commission referred the appeal to a medical appeal panel (Appeal Panel).
On 12 March 2024, the Appeal Panel delivered its decision. The appeal was upheld in part because it had been common ground that the medical assessor had made an error in the calculation of impairment resulting from "a poor result for a knee replacement". A further certificate was issued correcting that error, which gave a total whole person impairment of 41%. There is no dispute as to the correction of that error.
Pursuant to an amended summons filed in this Court on 9 August 2024, the employer sought judicial review [2] of the Appeal Panel determination on six grounds, which were more limited than the grounds addressed by the Appeal Panel. Each relates to a failure to address the employer's complaints about the manner in which the medical assessor had addressed deductions to be made on account of previous injuries and pre-existing conditions, pursuant to s 323 of the 1998 Act. To explain the basis of the challenges made in this Court it is necessary to address in outline the history of medical conditions afflicting the claimant's lower limbs. Further, it is necessary to identify the limits on the jurisdiction of this Court exercising its function of judicial review pursuant to s 69 of the Supreme Court Act 1970 (NSW).

[4]

Claimant's medical history

The claimant had a long history of injury and consequential medical treatment to both left and right knees and ankles.
In about 1990, the claimant was injured in a motorcycle accident which resulted in a fracture of his left femur. Although counsel for the employer submitted in this Court that the insertion of a metal rod in his left thigh bone must have had consequential effects on his left leg generally, there was very limited medical evidence supporting that submission. For present purposes, the 1990 accident may be disregarded.
In about 1995, the claimant suffered a second motor vehicle accident in which he fractured his right ankle (described as a "crush injury") and developed avascular necrosis of the talus bone. In addressing the connection between the right knee injury and the right ankle condition, Member Turner, in his determination of 6 June 2023, observed: "52 Dr Mair in a report to Centrelink dated 19 November 2019 records that Dr Sharp in 2016 diagnosed right ankle avascular necrosis of the talus from early twenties leading to early arthritis, exacerbated by limping from the knee injury. Both ankles have suffered as a result of the compensatory gait and limp." Member Turner further observed: "133 On about 12 April 2013, approximately six months prior to the subject work injury, the applicant attended on Dr Sharp with right ankle pain and swelling. Dr Sharp thought that the change in the ankle architecture due to the injury sustained in the motor vehicle accident was the cause of the right ankle discomfort. 134 Contrary to the applicant's evidence that the avascular necrosis was asymptomatic until the total right knee replacement in 2017, the attendance on Dr Sharp on or about 12 April 2013 indicates that the right ankle was symptomatic prior to the subject work incident." Member Turner concluded: "153 The evidence supports and I accept that the applicant has suffered multiple sprains to his right ankle as a result of the injury to the right knee and the consequential injuries to his left knee and left ankle."
The challenge before the Appeal Panel (and in this Court) focused on the assessment of the right ankle and the left knee. However, it is convenient to address both knees together because the medical assessor made a 50% deduction on account of pre-existing conditions in the right knee, but a 10% deduction with respect to the left knee. The discrepancy formed part of the employer's challenge to the medical assessor's determination.
On 12 April 2013, Dr Robert Sharp (orthopaedic surgeon) provided a report to the claimant's general practitioner, that is, five months prior to the work injury. The report dealt with both knees in the following terms: "Paul has had a very active and energetic youth and as a result his body has taken a bit of a pounding. Both of Paul's knees have had ACL reconstructions and both had [meniscal] injuries …. Paul has pain on the lateral side of his right knee. Most of that pain is over the lateral femoral condyle. That pain corresponds to an area where there was damage by his meniscus and as a result Paul has bare bone. The problem with bare bone is that it is really rough and very hard and it is causing the crunching that he is experiencing …. The other trouble Paul is having in his left knee is that he feels the patella is drifting towards the lateral side …. Paul had some lateral sided pain, and it was a tear off his lateral meniscus at the back, laterally, and that might be also contributing to Paul's symptoms."
In the claimant's statement of 16 November 2018, he recounted: "25 In relation to my right knee, there was no specific injury however I started to have problems with it in approximately 2007. I attended my general practitioner at the time Dr King …. The doctor referred me to Dr Doig who I saw for the first time in October 2007. Dr Doig treated me between October 2007 and December 2010. During this period Dr Doig performed surgery on both my knees in February 2008. At the same time as performing the operation on my right knee, anterior cruciate ligament reconstruction, Dr Doig also perform[ed] surgery on my left knee. In respect to my left knee he performed an arthroscope. I recall that I was off work for about eight weeks before returning to my normal duties …. … 27 In approximately 2010 I was still having problems with my left knee and I was referred to Dr Sharp … and he performed an ACL reconstruction. 28 Then in 2012 I was again having problems with my right knee and so I attended upon my general practitioner … and that doctor referred me to Dr Sharp. 29 In 2012 Dr Sharp undertook the repair of a meniscal tear of my right knee. Again I was off work for six weeks and returned to work and did my normal duties."

[6]

Employer's appeal to Appeal Panel

Several of the grounds raised before the Appeal Panel were not pursued on this review application. Further, it is convenient to address some grounds together. Grounds 2 and 5 of the employer's appeal addressed the application of s 323 in relation to the left knee. [4] Had the left knee been treated similarly to the right knee, the employer submitted, the deduction would have been closer to 50% than 10% and the contribution to the whole person impairment would therefore have been closer to the 12% assessed for the right knee than the 20% assessed for the left knee with the lower deduction. (Some further reduction might have resulted for the left ankle, which the medical assessor did not include amongst the impairments requiring deduction.)
Grounds 4 and 6 related to the failure to address the relevant evidence regarding the right ankle. The employer's case was that, had that evidence been addressed, the default 10% deduction would have been seen to be "at odds with the available evidence". Ground 3 challenged the adequacy of the medical assessor's reasons.
Ground 1 should also be noted. It identified an error in the application of the NSW Workers Compensation Guidelines (the Guidelines) to the assessment of impairment resulting from a knee replacement operation, requiring an adjustment in favour of the claimant. The error involved applying Table 3.3 of the Guidelines for a valuation of permanent impairment, which dealt with "total ankle replacement" and not knee replacement. The result of using the correct table (from the American Medical Association Guidelines (5th ed), was to increase the whole person impairment from 31% to 41%. Its relevance for present purposes is that the level of impairment was correctly calculated by reference to the effectiveness of the knee replacement operations. The relevant deductions, the employer submitted, was to be calculated by reference to the causal contributions of pre-existing injuries or conditions to the operations. Counsel for the claimant did not dispute that proposition.
Turning to the employer's submissions to the Appeal Panel, the following issues were raised with respect to the deduction assessed for the left knee.

[7]

Left knee deduction - employer's submissions

Putting to one side the claimant's earlier femur injury, the employer relied upon the need to determine the extent to which constitutional changes leading to arthroscopy and an ACL reconstruction had contributed to the eventual need for a total left knee replacement. The submissions for the employer referred to observations recorded by Dr Sharp in his report of 12 April 2013, set out above.
The submissions continued: "36 In a report of Dr Daevyd Rodda dated 27 June 2018, the doctor recorded a history that the [claimant] had had approximately six arthroscopies and an ACL reconstruction. Dr Rodda noted that the clinical science was consistent with 'severe osteoarthritis'. 37 Dr Sharp also provided a report dated 27 May 2019 in which he reiterated that the [claimant] had a number of left knee issues prior to his injury and that the 'left knee pain had been there for quite some time'. Dr Sharp noted the existence of degenerative changes in the left knee. 38 On 17 June 2019, Dr Sharp noted that the previous ACL reconstruction in the left knee had ruptured, along with the rupture of the PCL. This led to the proposed left total knee replacement. 39 The [claimant] was reviewed by Dr Machart on behalf of the [employer] on a number of occasions. Dr Machart recorded a consistent history of the pre-existing left knee problems and stated: 'I have no doubt that the osteoarthritic changes would have progressed irrespective of the injury, perhaps not quite as quickly.' 40 Dr Machart subsequently assessed a three-quarters deduction for the left knee given the pre-existing condition. 41 From the medical evidence, it is evident that the [claimant] had significant issues in the left knee prior to his injury on 22 September 2013. He had undertaken a number of arthroscopies as well as an ACL reconstruction. Evidently, there was osteoarthritis in the left knee not attributable to the injury on 22 September 2013. Had the MA [undertaken] the correct inquiry when determining the deduction to be applied for the left knee, being the extent that the pre-existing condition contributed to the eventual left knee replacement, his conclusion would have been that a significant deduction was required, similar to that assessed for the right knee. Ultimately, it is submitted that the medical evidence demonstrates that the eventual left total knee replacement was inevitable given the prior issues and as such, the proper inquiry would have led to a deduction of at least one-half."
By way of an alternative ground, the employer submitted that if, contrary to the previous contention, the medical assessor had considered those matters, he had failed to give any reasons for his rejection of those matters.
Before turning to the employer's submissions with respect to the right ankle deduction, it is convenient to address the manner in which the Appeal Panel dealt with these submissions as to the left knee.

[8]

Left knee deduction - Appeal Panel's reasons

The relevant passage in the Appeal Panel's reasons addressing the issues in relation to the deductions for the left knee commenced at p 5. The following five pages set out the medical assessor's decision and his reasons. The deductions were noted at par 31 and the assessor's reasons set out at par 32. After two paragraphs identifying matters which are not in dispute, the whole of the Appeal Panel's reasons for rejecting this aspect of the appeal were set out: "35 The evidence and history that exists to support a deduction of one-half for the right knee does not exist for the left knee and there is no basis, on the available evidence, to support a deduction higher than one-tenth for the left knee. The appellant panel can discern no error in the making of a one-tenth deduction for the left knee."
Four observations may be made with respect to this conclusion. First, although it may have been correctly inferred that the employer, at least by implication, relied upon a comparison of the evidence available with respect to the right knee, and the differential treatment of the evidence with respect to the left knee, it was not the sole focus of the submissions on the appeal.
Secondly, the right knee was the subject of the work injury. No harm befell the left knee on 23 September 2013. The deterioration in the left knee was entirely consequential, resulting from additional stress imposed by the instability of the right knee.
Thirdly, the evidence referred to by the employer identified several pre-2013 procedures undertaken on the left knee and the existence of osteoarthritis. A rational explanation for the differential treatment may have been available, but it was not provided by the Appeal Panel's conclusory statement as to "no evidence" and "no basis". The Appeal Panel was required to address the material relied on by the employer.
Fourthly, the medical assessor in fact identified previous injuries and pre-existing conditions or abnormalities with respect to the left knee, but the reason he gave for applying the default deduction was that "[t]he extent of the deduction is difficult or costly to determine". That was a somewhat glib recitation of the opening words of s 323(2). It would not have been "costly" because no-one was suggesting any further steps be taken; the assessment can have been no more difficult than was the assessment of the rest of the medical evidence, including that relating to the right knee. That statement did not constitute an adequate reason for failing to make the appropriate assessment on the evidence available to the assessor, pursuant to s 323(1). Nor did it address the qualification to the application of s 323(2), namely that the default position not be at odds with the evidence. On either approach, the evidence had to be addressed and was not. The reason given by the medical assessor was not accepted or adopted by the Appeal Panel. But neither did it carry out the necessary consideration of the existing medical evidence under either s 323(1) or s 323(2).
As has been noted, there was no challenge to the failure to identify the left ankle as the subject of any deduction. On one view, the injury to the left ankle was doubly contingent in the sense that it was consequential upon the condition of the left knee which was in turn a consequential injury. It will be appropriate to return to this matter in due course.

[10]

Right ankle deduction - Appeal Panel's reasons

The Appeal Panel's response to this challenge was as follows: "36 In respect of the deduction of one-tenth for the right ankle, the appellant says that the Medical Assessor found that the right ankle was asymptomatic (up until 2017) but the Medical Assessor didn't consider the report of Dr Sharpe [sic] which in 2013 noted that the worker was experiencing discomfort in the right ankle. The Medical Assessor does not have to refer to every piece of evidence and the 2013 report of Dr Sharpe [sic] does not change the overall clinical picture pre and post the subject injury in respect of the right ankle when all of the evidence is taken into account. The Medical Assessor has made a deduction of one-tenth which properly accounts for the pre-existing condition of the right ankle and the contribution to the level of permanent impairment assessed for the right ankle, noting that the ankle was previously injured which the medical assessor has clearly taken account of in making the deduction and noting the history that the right ankle swells when the right knee is painful: 'It is worse when the knee if painful and the ankle swells up and is painful to walk on and he needs to use a brace.' 37 The Appeal Panel can discern no error in the making of a one-tenth deduction. The failure to refer to Dr Sharpe's [sic] report which notes that in 2013 the worker suffered ankle discomfort would not amount to evidence that would be inconsistent with a one-tenth deduction."
The thrust of this response appears to be that, whether or not the medical assessor took account of Dr Sharp's report, the Panel itself formed the view that the evidence did not support a deduction of more than 10%. However, that reasoning did not address the substance of the submissions made on the appeal. First, unchallenged medical evidence that the right ankle was symptomatic before the work injury is hard to reconcile with the evidence relied on by the assessor that it was then "asymptomatic". It is not easy to understand why Dr Sharp's report "does not change the overall clinical picture pre … the subject injury".
Secondly, it is not clear what the Appeal Panel was referring to as "taking into account all of the evidence". Dr Sharp's report referred not merely to symptoms but, by reference to x-ray evidence, to the "architecture" of the ankle, that the "tibia has changed its shape, as has the talus", that "the tibia is more curved than it should be and so is the talus" and that the femur does not look normal. The claimant had "pain on the outside of his ankle, but he has swelling over both sides". Further, the employer's submissions drew attention to the presence of avascular necrosis which Dr Frank Machart had stated made the knee replacement operation inevitable, but was hastened by the work injury. Each of these observations and opinions might have been open to dismissal with explanations by medical professionals, but the Appeal Panel provided no explanation as to why they took the view they did when considering "all of the evidence". While it is true that the medical assessor did "not have to refer to every piece of evidence", he did have to refer to the substance of the evidence relied on against his conclusion and explain, even if briefly, why it was not accepted or not preferred. [5]
The significance of this issue is reinforced by the terms of s 323(3) of the 1998 Act which identifies the reference to "medical evidence" in subs (2) as a reference to "medical evidence accepted or preferred by the medical assessor". Assuming that is a reference to "the available evidence", [6] the point for present purposes is that subs (2) cannot be applied unless there are findings as to the evidence which has been accepted or preferred. The statement of the Appeal Panel failed to identify the medical evidence which it accepted or preferred, in circumstances where the medical assessor had similarly failed to take that step.
It is clear that the Appeal Panel's response to the grounds of appeal and written submissions relied on by the employer was unsatisfactory. The question is whether the decision of the Appeal Panel was infected by jurisdictional error or error of law on the face of the record.

[12]

Jurisdictional error

The employer's written submissions in support of ground 1 identified a failure to exercise jurisdiction "by failing to respond to a substantial and clearly articulated argument made by the plaintiff in respect of the correct application of s 323(1) of the 1998 Act". That language is derived from the judgment of Gummow and Callinan JJ in Dranichnikov v Minister for Immigration and Multicultural Affairs. [8] Two observations should be made with respect to that submission. First, it is important to note that the substantial, clearly articulated argument must rely upon "established facts". Secondly, such an error constitutes a constructive failure to exercise jurisdiction and hence jurisdictional error. In the same case, and to similar effect, Kirby J identified a "fundamental mistake at the threshold in expressing, and therefore considering, the legal claim propounded by an applicant" which he identified as a "constructive failure of the decision-maker to exercise the jurisdiction and powers given to it": at [87].
Grounds of judicial review can often be identified in different ways. One approach is to infer that "when legislation creates a forum for considering applications, or resolving disputes, the body hearing the matter will be obliged to consider (and rule upon) the claims articulated by the applicant (and the respondent)". [9] In that sense, the content of the application may itself be a mandatory consideration. However, an important aspect of the ground is not merely that the matter be considered, but that it be ruled upon. In some cases, the setting out of the terms of an application (or in this case a ground of appeal and the supporting submissions) may indicate a level of attention to the substance of the case to be decided. That in turn may give rise to difficult questions as to how much "consideration" is required in particular circumstances. [10] However, even that step was not taken in the present case. The Appeal Panel, as noted above, dismissed this ground of appeal (in relation to the left knee) in two sentences. The limited consideration of the grounds relating to the right knee has also been noted. The inadequacies of the responses in each case have been identified. In the former case, to reiterate, although the medical assessor identified the condition of the left knee as subject to a pre-existing injury or condition, he failed to address the medical evidence which might have allowed him to determine the proportionate contribution to the eventual total knee replacement procedure. That procedure, it may be noted, did not take place until some four years after the injury to the right knee.
There is no evidence in the Appeal Panel's reasons supporting a conclusion that the Panel adequately considered the grounds and submissions on the appeal relating to the appropriate deduction with respect to the left knee or the right ankle. It follows that the Appeal Panel failed to carry out its proper function according to law.

[13]

Adequacy of reasons

Against the possibility that the Court found that the Appeal Panel had adequately considered the relevant appeal grounds, the employer submitted that the Panel had failed to give adequate reasons for its determination. On the view taken above, it is not necessary to address that alternative approach. If that reasoning is in error, it is necessary to identify the appropriate standard by which to assess the adequacy of the reasons.
In Bay Simmer Investments Pty Ltd v State of New South Wales, [11] I observed: "As explained at some length in Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc, [12] there is a plethora of cases discussing the nature of the legal obligation to have regard to, or consider, a particular matter. It has sometimes been said that the obligation is to give "proper, genuine and realistic consideration" to the matter. This language has been referred to in a series of cases (including recently in Minister for Immigration v SZJSS, [13] an authority not referred to in Warkworth). Accepting that the weight to be given to a particular factor is a matter for the decision-maker and not the court on a judicial review application, the difficulty is to articulate a legal standard between a level of consideration which appears to be cursory or dismissive (and therefore inadequate) and a level of consideration which requires an assessment of the conclusions reached by the decision-maker (and is therefore beyond the role of the court). Little more can be said by way of judicial exegesis than that the standard will depend upon the subject matter and purpose of the consideration, in a given statutory context."
In the context of reasons required of medical assessors, the High Court stated in Wingfoot: "44 The standard required of a written statement of reasons in order to fulfil the duty imposed on a Medical Panel by s 68(2) of the [Accident Compensation Act 1985 (Vic)] falls therefore to be determined as an exercise in statutory construction. In the absence of express statutory prescription, that standard can be determined only by a process of implication. … 47 … 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. … 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. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion."
If the foregoing reasoning as to a constructive failure to determine the appeal on the grounds presented by the employer is not correct, it is self-evident that the reasons of the Panel were deficient in explaining why it was satisfied that the medical assessor had properly addressed the deduction relevant to the left knee. A similar two-stage analysis may be undertaken in respect of the challenge to the assessor's findings regarding the deduction for the previous injury to the right ankle.
For the reasons set out above, the Appeal Panel's reasons demonstrated that it either failed to understand the employer's grounds, or failed to determine them. Alternatively, if the conclusory statements were thought to demonstrate that the grounds were understood and addressed, the reasons failed to reveal a logical pathway to the conclusion that the assessments constituted a proper application of s 323(1) of the 1998 Act. On either view, there was reviewable error.
It may be recalled that there was no challenge to the deduction assessed for the left ankle, because the assessor did not identify any previous injury or pre-existing condition. Subject to what follows nothing more need be said about that aspect of the assessment.

[14]

Consequential impairments - a further concern

As noted above, the work injury engaging an entitlement to compensation under s 66 of the 1987 Act, was the injury to the claimant's right knee which occurred on 22 September 2013. That injury resulted in a number of impairments. In considering the degree of impairment resulting from the knee injury, as the employer emphasised, the Guidelines required that the assessment be made by reference to the total knee replacement operation which, in the present case, was assessed as having a "poor" outcome. A deduction of 50% applied to the assessment of that injury, by reference to previous injuries and pre-existing conditions. The further impairments, based on the consequences of the right knee injury, were assessed independently of it. Although the point seems not to have been raised in these terms, either in the Commission or in this Court, there may be a logical flaw in treating a consequential impairment as subject to no deduction by reference to the injury from which it resulted, where the impairment which resulted directly from that injury was subject to a 50% deduction.
The approach adopted in this case was to assess the consequential impairments of other body parts, and any deduction, by reference only to previous injuries or pre-existing conditions affecting those body parts. But if the causal link were taken back to the total knee replacement operation on the right knee, the apportionment of that impairment, resulting directly from the work injury, should logically flow through to any consequential impairments. That would result in those impairments being subject to a 50% deduction, being the deduction adopted with respect to the right knee operation. In practical terms, if the injured right knee gave rise to a change in gait, affecting the left knee, that change in gait was partly a function of the previous injury to, and pre-existing condition of, the right knee. That is, the change in gait was only 50% attributable to the work injury. It should follow that the impairment of the left knee was only 50% attributable to the work injury. Whether there should then be a further deduction for a pre-existing condition of the left knee is a separate question. The same reasoning would apply to both ankles.
Not having been raised in these terms, this is not a factor which affects the outcome in this Court, but it may be a matter which will need to be considered in an appropriate case.

[15]

Orders

The Commission's determination, based on the medical assessment certificate provided for compensation of $89,100. The realistic amount of any success on a re-assessment was not addressed, but the costs of this proceeding must be of the same order as the value of success. The claimant did not seek to have the proceeding dismissed on a discretionary basis. Accordingly, the application for judicial review should be upheld and the determination of the Appeal Panel set aside.
In the event it was successful, the employer sought various orders with respect to decisions made by the Appeal Panel and by the President. There is no need to make a declaration with respect to the decision of the Appeal Panel: it will suffice to set it aside. That may be done by setting aside the medical assessment certificate prepared by the Panel and dated 12 March 2024.
On 16 April 2024, the Commission issued a "certificate of determination" providing a final order for the payment of lump sum compensation by the employer under s 66 of the 1987 Act. That certificate should be set aside.
The employer also sought an order that "the matter" be remitted to the President for referral to a differently constituted appeal panel. Pursuant to s 69 of the Supreme Act, no order is made removing a matter to this Court, so that the appeal, which remains unresolved, is not in fact before this Court. An order for remittal is therefore inappropriate. However, the President is a party to this proceeding and may be directed to deal with the appeal in the terms sought by the employer.
Although there was no order as to costs of the proceedings in the Commission, both parties sought costs in the event of success in this Court. Neither submitted that the ordinary rule that costs follow the event should not apply. Accordingly, there will be an order for costs in favour of the employer.
The Court makes the following orders: 1. Set aside the decision and medical assessment certificate issued by an appeal panel of the Personal Injury Commission dated 12 March 2024. 2. Set aside the certificate of determination issued by the Personal Injury Commission, Workers Compensation Division, dated 16 April 2024. 3. Direct that the President of the Personal Injury Commission refer the Secretary's appeal to a differently constituted medical appeal panel for reconsideration according to law. 4. Order that the first defendant pay the plaintiff's costs in this Court.

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Judgment (17 paragraphs)

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