Skates v Hills Industries Ltd

Supreme Court of NSW|2020-06-25|Before: Adamson J

Dr Frank Machart as an Approved Medical Specialist under s 320 of the Workplace Injury Management and Workers Compensation Act 1998 (Second Cross-defendant) Representation: Counsel: B G McManamey (Plaintiff) S Blount (First Defendant) Submitting appearance (Second, Third and Fourth Defendants, and Second Cross-defendant)

Solicitors: Slater and Gordon (Plaintiff) Bartier Perry (First Defendant) Crown Solicitor's Office (Second, Third and Fourth Defendants, and Second Cross-defendant) File Number(s): 2019/400759

Factual background

Before turning to the grounds relied on by the Claimant, I propose to summarise the relevant factual background.
On 7 June 2013, the Claimant fell from a ladder while trying to access a roof to complete a pay-television installation. It was accepted that the accident occurred in the course of his employment by the Employer. On 1 March 2016 he was assessed by Dr O'Keefe as suffering a whole person impairment (WPI) of 18%, which comprised 15% WPI for his left-hand ring finger and 3% WPI for scarring measured by the table for the evaluation of minor skin impairment (TEMSKI).
In reliance on Dr O'Keefe's report, the Claimant made a claim under s 66 of the Workers Compensation Act 1987 (NSW) (the 1987 Act). The Employer disputed the claim as Dr Panjratan, an orthopaedic surgeon retained by the Employer, assessed the Claimant's WPI at 12% (11% for left upper extremity and 1% for TEMSKI scarring).
On 8 August 2017, the Claimant filed an application to resolve a dispute in the Workers Compensation Commission (the Commission).
The matters in dispute were identified in Part 1 as follows: "1.1 Claim to which dispute relates 1.1A For referral for determination by the Commission (s 288 of the 1998 Act) … - Lump sum compensation where liability in dispute … 1.1B For referral for medical assessment by an Approved Medical Specialist (s 293 of 1998 Act) - Lump sum compensation where degree of permanent impairment in dispute …"
In Part 4 of the application, the injury was described as "injury to left wrist, ring finger and scarring". The description of how the injury occurred was: "The applicant fell from a ladder whilst accessing a roof to complete a pay TV installation severely injuring his left wrist and ring finger."
In Part 5, headed "Claim details", the Claimant specified in 5.6, "Permanent impairment including pain and suffering" that the date of injury was 7 June 2013, the "body parts/systems claimed" were "left upper extremity, joint ring finger and scarring" and the percentage WPI was said to be 18%, giving rise to an amount claimed of $26,950.
The Employer filed a reply on 29 August 2017.
On 1 September 2017, a delegate of the Registrar issued a referral for assessment of permanent impairment to an Approved Medical Specialist (AMS). In the referral, the date of the injury was said to be 7 June 2013. The "body part(s) referred" were said to be "Left upper extremity (joint ring finger), scarring (TEMSKI)". On 11 September 2017, the parties agreed, in emails to which the Registrar was copied, that the left wrist was included in the referral to the AMS, Dr Machart.
The AMS examined the Claimant on 29 September 2017. He found evidence that he was suffering from a condition known as complex regional pain syndrome (CRPS). However, CRPS could not be diagnosed because, according to the Workers Compensation Guidelines for the Evaluation of Permanent Impairment (4th ed, 1 April 2016) (the Guidelines) symptoms of such condition need to be present for more than a year and need to be verified by more than one examining physician: cl 17.5 and Table 17.1 of the Guidelines. The AMS did not assess the Claimant as he had not reached "maximum medical improvement", a pre-condition to assessment of WPI. The findings of the AMS were expressed in a medical assessment certificate dated 13 October 2017.
Ultimately, on 16 November 2017, the Commission issued a certificate of determination stating that the Claimant's degree of permanent impairment was not fully ascertainable and that the proceedings could be restored when he had attained maximum medical improvement.
On 24 January 2019, the Claimant asked that the proceedings be restored and that he be referred for assessment by an AMS. The parties agreed that the referral should be to Dr Machart, the AMS who had previously examined the Claimant.
On 13 March 2019, the Registrar's delegate notified the parties of the proposed referral for WPI in respect of the injury sustained on 7 June 2013. The "body part(s) referred" were said to be "Left upper extremity (joint ring finger), scarring (TEMSKI)". The email stated that any objection to the referral should be lodged and served within three working days. The email contained the following note: "Note 1: an error or omission in the referral is not grounds for appeal against the Medical Assessment Certificate".
It was common ground that the Commission had accepted that the Claimant had suffered an injury to his left wrist as well as to the left ring finger and that this ought to have been referred but was not. However, unlike in 2017, on this occasion neither party informed the Registrar of this omission and the referral was made to Dr Machart in the same terms as the draft.
Because of the importance of the terms of the referral, I propose to set it out in full: "WORKERS COMPENSATION COMMISSION REFERRAL FOR ASSESSMENT OF PERMANENT IMPAIRMENT TO APPROVED MEDICAL SPECIALIST Matter Number: 003957/17 Applicant: Anthony Earl Skates Respondent: Hills Industries Ltd Date of Request: 13 March 2017 [sic, 2019] 1. MEDICAL DISPUTE REFERRED FOR ASSESSMENT (s319 1998 Act) • the degree of permanent impairment of the worker as a result of an injury (s319(c)) • whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion (s319(d)) • whether impairment is permanent (s319(f)) • whether the degree of permanent impairment of the injured worker is fully ascertainable (s319(g)) Date of Injury: 7 June 2013 Body part/s referred: Left Upper Extremity (joint ring finger), Scarring (TEMSKI) Method of assessment: Whole Person Impairment 2. BRIEF The brief provided to the Approved Medical Specialist includes: 1. the Application and attached documents 2. the Reply and attached documents 3. MAC dated 13 October 2017 4. Applicant's letter dated 24 January 2019 attached Dr Anderson's medical report dated 7 December 2018 5. The Application to Admit Late Documents lodged by the respondent on 11 February 2019 3. ARRANGEMENTS The parties request the Registrar to choose the AMS (s321(1)): DR FRANK MACHART, WAGGA WAGGA Referred by: P Sunderaj Padmini Sunderaj Dispute Services Coordinator As delegate of the Registrar"
The AMS examined the Claimant on 29 April 2019. The AMS noted in his reasons the body parts that had been specified in the referral. He issued a certificate on 15 May 2019 in which he assessed the Claimant as suffering from 61% WPI, which comprised 60% for the left upper extremity (including the shoulder, elbow, wrist and all fingers of the left hand, including the thumb) and an additional 2% for scarring. I note that WPI is not derived from simple addition of respective percentages but is arrived at following application of the Combined Values Chart from American Medical Association, Guides to the Evaluation of Permanent Impairment (5th ed) (AMA5) (see further below).
On 15 June 2019, the Insurer filed an application to appeal against the AMS's decision. The Insurer objected to the decision on the basis that the AMS had assessed body parts which had not been referred to him. The Insurer accepted that the body parts referred should have included the left wrist as well as the ring finger and scarring (as identified in the first referral of 21 September 2017) but submitted that the AMS was not entitled to assess the Claimant's left shoulder, left elbow, left thumb, index, middle and little fingers. The Insurer also contended that the AMS's diagnosis of CRPS was in error.
On 27 September 2019, the Appeal Panel revoked the AMS's certificate and issued a new certificate assessing the Claimant's WPI as 7%, which comprised 5% WPI for the left upper extremity (ring finger) and 2% WPI for TEMSKI scarring.
In its reasons, the Appeal Panel found: "35. The appellant employer conceded that the referral by the delegate of the Registrar failed to identify the wrist as one of the matters for assessment and further, that the AMS himself had noted that the injury pleaded in the Application to Resolve a Dispute (ARD) was to the left wrist in addition to the matters that were actually referred. … 39. It is clear from the description of the affected parts of the left upper extremity described in Part 10b(2) of the MAC that the AMS did assess the effect of the injury on the whole left upper extremity including the arm, shoulder, elbow, wrist and all fingers and thumb. We appreciate that such an assessment was difficult to compartmentalise in view of the diagnosis being CRPS affecting the whole upper limb. However, it is settled law that an AMS is confined by the terms of the referral. 40. In Aircons Pty Ltd v Registrar of the Workers Compensation Commission of NSW, Associate Justice Malpass observed at [34] that the referral should be regarded as being in the category of initiating process or pleadings. 41. In Dening v Olfoy Pty Ltd trading as Noble Toyota the referral was concerned with the assessment of hearing loss where the Appeal Panel was ambivalent about whether the employer was the last noisy employer. It was held that the Appeal Panel had erred. In Bindah v Carter Holt Harvey Woodproducts Australia Pty Ltd, the question was whether the Appeal Panel had made findings beyond the scope of the referral, which, in the circumstances, it had not. 42. An AMS is bound by the terms of the referral by which he is appointed. Accepting the submission by the appellant employer that the referral did not reflect the intention of the parties in that the wrist was also to be assessed, it is clear that the AMS has nonetheless exceeded the terms of his remit. A demonstrable error has thereby occurred. 43. Accordingly we have determined that the MAC must be revoked. It is convenient to consider the other grounds raised by the appellant employer however, before doing so." [Footnotes omitted.]
The Appeal Panel also found, in any event, that the AMS had misapplied the diagnostic criteria for CRPS.
On 1 November 2019 the Arbitrator issued a certificate of determination pursuant to s 294 of the Act which said: "The Commission determines: 1. The applicant suffers 7% permanent impairment resulting from injury on 7 June 2013. 2. The applicant has no entitlement to lump sum compensation resulting from injury on 7 June 2013. Brief statement of reasons 3. This Certificate of Determination is issued in accordance with the Medical Assessment Certificate issued under Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998. 4. The claim for compensation was made on or after 19 June 2012. The applicant did not reach the threshold for entitlement to compensation, as required by section 66(1) of the Workers Compensation Act 1987. 5. The proceedings were commenced after 2 April 2013 and therefore no order is made as to costs."

The Act and the 1987 Act

Section 4 of the 1987 Act relevantly defines injury as meaning "a personal injury arising out of or in the course of employment". Whether the Claimant has suffered an injury is for the Commission to determine: Bindah v Carter Holt Harvey Woodproducts Australia Pty Ltd [2014] NSWCA 264 (Bindah) at [111] (Emmett JA, Ward JA agreeing). Section 9A of the 1987 Act provides that no compensation is payable under the Act unless the employment concerned was a substantial contributing factor to the injury.
Pursuant to s 66(1) of the 1987 Act, a claimant can only be awarded compensation for permanent impairment if the assessed WPI is at least 10%. Section 66(1A) provides that only one claim can be made under the 1987 Act for permanent impairment compensation in respect of permanent impairment that results from an injury. A claimant cannot commence court proceedings for the recovery of work injury damages unless the degree of WPI has been assessed by an AMS to be at least 15%: ss 313 and 314 of the Act.
Chapter 7 of the Act, entitled "New Claims Procedures", includes Part 4, entitled "Compensation Dispute Determination". Division 3 of Part 4, "Determination of Disputes by Commission" contains s 288, which provides: "288 Referral of disputes to Commission (1) Any party to a dispute about a claim may refer the dispute to the Registrar for determination by the Commission. However, if the dispute is about lump sum compensation, only the claimant can refer the dispute. Note. A medical dispute concerning the claim can also be referred for assessment under Part 7 (Medical assessment). (2) The Registrar may not accept a dispute for referral for determination to the Commission if the dispute is a dispute that, under this Part, cannot be referred for determination by the Commission."
Part 7 of Chapter 7 of the Act is entitled "Medical Assessment" and contains ss 319-331. The term "medical dispute" is relevantly defined by s 319 as follows: "medical dispute means a dispute between a claimant and the person on whom a claim is made about any of the following matters or a question about any of the following matters in connection with a claim - (a) the worker's condition (including the worker's prognosis, the aetiology of the condition, and the treatment proposed or provided), … (c) the degree of permanent impairment of the worker as a result of an injury, (d) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion, … (f) whether impairment is permanent, (g) whether the degree of permanent impairment of the injured worker is fully ascertainable."
Section 320 authorises the appointment of medical practitioners as Approved Medical Specialists. The Registrar may refer a medical dispute to an AMS: s 321. Section 322 provides: "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. … (4) An approved medical specialist may decline to make an assessment of the degree of permanent impairment of an injured worker until the approved medical specialist 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."
An AMS may call for the production of medical records and other information and require a claimant to submit himself or herself for examination: s 324(1). An AMS 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). The certificate is to certify the assessment, the reasons for assessment and the facts on which the assessment is based: s 325(2).
A party may appeal against a medical assessment on specified grounds: s 327. The grounds include that the assessment was based on incorrect criteria (s 327(3)(c)) and that the certificate contains a "demonstrable error" (s 327(3)(d)). The appeal is made by application to the Registrar and is not to proceed unless the Registrar is satisfied that, on the face of the application and any submissions, at least one of the specified grounds of appeal is made out: s 327(4). 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). It is to be by review, but is limited to the grounds of appeal: s 328(2). The Workers Compensation Guidelines can provide for the procedure on appeal: s 328(2). The Appeal Panel may confirm the AMS's certificate or may revoke it and issue a new certificate: s 328(5).
Section 331 provides: "331 Guidelines Medical assessments, appeals and further assessments under this Part are subject to relevant provisions of the Workers Compensation Guidelines relating to the procedures for the referral of matters for assessment or appeal, the procedure on appeals and the procedure for assessments."
Section 376(1) relevantly provides: "(1) The Authority may issue guidelines with respect to the following - (a) the assessment of the degree of permanent impairment of an injured worker as a result of an injury, … (c) such other matters as a provision of the Workers Compensation Acts provides may be the subject of Workers Compensation Guidelines."
Guidelines issued pursuant to s 376(1) have the effect of delegated legislation: Ballas v Department of Education (State of NSW) [2020] NSWCA 86 at [97] (Bell P and Payne JA).
Section 294 of the Act relevantly provides: "294 Certificate of Commission's determination (1) If a dispute is determined by the Commission, the Commission must as soon as practicable after the determination of the dispute issue the parties to the dispute with a certificate as to the determination. (2) A brief statement is to be attached to the certificate setting out the Commission's reasons for the determination. …"

NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment

The Guidelines were made pursuant to s 376 of the Act. Chapter 1 of the Guidelines relevantly provides: "Multiple impairments 1.17 Impairments arising from the same injury are to be assessed together. Impairments resulting from more than one injury arising out of the same incident are to be assessed together to calculate the degree of permanent impairment of the claimant. 1.18 The Combined Values Chart in AMA5 (pp 604-06) is used to derive a percentage of whole person impairment (WPI) that arises from multiple impairments. An explanation of the chart's use is found on pp 9-10 of AMA5. When combining more than two impairments, the assessor should commence with the highest impairment and combine with the next highest and so on."

Workers Compensation Medical Dispute Assessment Guidelines

The Workers Compensation Medical Dispute Assessment Guidelines relevantly provide: "5.17 The MAP [Medical Appeal Panel] may adopt any of the following procedures in accordance with the needs of the individual case: 5.17.1 'on-the-papers' review 5.17.2 further medical examination by an approved medical specialist on the appeal panel 5.17.3 assessment hearing. 5.18 The MAP decides which of the procedures is to be adopted. 5.19 The decision of the appeal panel is to be informed by its assessment of the needs of the particular case."
It was common ground that the Appeal Panel had chosen to adopt the procedure of an 'on the papers' review. The Claimant did not challenge this decision and had not sought that he be re-examined by the Appeal Panel.

The alleged errors

In his second further amended summons the Claimant alleged that the Appeal Panel's decision of 27 September 2019 was affected by the following legal errors: 1. the Appeal Panel erred at law when it held that the AMS had been wrong to assess impairment of the left wrist, elbow and shoulder when assessing whole person impairment of the left upper extremity; 2. the Appeal Panel erred at law when it held that the AMS was only entitled to assess the joint ring finger when the referral was to assess the left upper extremity; 3. the Appeal Panel erred at law when it held that the AMS was only entitled to assess the body parts referred when it was not disputed that there was an established injury to the left wrist and where there had been no determination of injury by an Arbitrator.
For the reasons given below I am persuaded that the Appeal Panel was in error in finding that the AMS was not entitled to assess the WPI by reference to the Claimant's left wrist since the employer, to the Appeal Panel's knowledge, conceded that this ought to have been included in the referral. This error led the Appeal Panel to omit the left wrist from its own assessment of WPI. The Appeal Panel was otherwise correct to find that the AMS had gone beyond the terms of the referral in assessing WPI for the whole of the Claimant's left upper extremity. However, because of the error identified, the decision of the Appeal Panel ought be set aside.

Consideration

The Claimant's claim for relief turns on the wording of the Act. The task of statutory construction must begin with the text: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47]. Section 325(1) requires the AMS to give a medical certificate "as to the matters referred for assessment".
Thus, having regard to the terms of the referral, the AMS was obliged to assess the degree of permanent impairment of the worker as a result of an injury (s 319(c)); whether any proportion of permanent impairment was due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion (s 319(d)); whether the impairment was permanent (s 319(f)); and whether the degree of permanent impairment was fully ascertainable (s 319(g)). The body parts referred were the left ring finger and scarring. It was conceded that the wrist ought also to have been included.
The question is whether the referral entitled the AMS to assess the degree of permanent impairment arising from parts of the left upper limb which had not been specifically referred, if he was satisfied that they were the result of the injury sustained by the worker to his left ring finger (and wrist).
Mr McManamey, who appeared on behalf of the Claimant, contended that the AMS was entitled to determine the degree of permanent impairment resulting from the injuries the Claimant sustained to his left ring finger and, by agreement, his left wrist, and from the scarring, wherever in the Claimant's body the impairment arose. He submitted that the part of the referral, "body parts referred" ought be entirely disregarded because it was beyond the power of the Registrar, who made the referral, to constrain the AMS to certain body parts when the consequences of the injuries could go beyond the original site of the frank injury. Mr McManamey contended that, if the referral is read in this way, there was no error by the AMS because the AMS was entitled to consider all the consequences of the accepted injuries to the Claimant's left ring finger and wrist, including those in his left shoulder and elbow and the other fingers and the thumb of the left hand.
Mr McManamey contended that Aircons Pty Limited v Registrar of the Workers Compensation Commission of NSW [2006] NSWSC 322 (Aircons) was distinguishable. In the alternative, he submitted that it was no longer good law. Mr McManamey argued that Cincotta v Police Citizens Youth Clubs NSW Ltd [2018] NSWSC 1588 (Cincotta) supported the proposition that any referral, by necessary implication, authorised the AMS to determine and assess the effects of the accepted injury to any part of the body. He relied on Bindah in support of the proposition that an AMS has power to determine issues of causation in the course of a medical assessment and contended that the assessment of the consequences of an injury to the body parts referred for the rest of the Claimant's body fell within the remit of the AMS.
Dr Blount, who appeared for the Employer, submitted that the AMS was bound by the terms of the referral and that those terms included the limitation regarding the body parts referred. He submitted that, had the referral not been limited as it was, the Employer would have objected. Thus, had the referral been for the body part "left upper limb" simpliciter, the Employer would have objected since the only injuries accepted by the Commission were injuries to the left ring finger and left wrist, and not the left shoulder or left elbow. He submitted that a dispute about the effects of the injury could have been determined by the Commission under s 288 of the Act to determine whether the injury had resulted in the shoulder and elbow condition before a referral to an AMS was made.
Dr Blount submitted that the scheme of the 1987 Act and the Act had the effect that significant issues of liability (such as whether the symptoms in the elbow and shoulder were caused by the injuries to the ring finger and the wrist) were left to the Commission itself to determine and that the area left to be determined by an AMS was confined to those matters listed in s 319 of the Act. Although he accepted that the Court of Appeal in Bindah had found that an AMS could determine some issues of causation, he submitted that the present was not a case where an AMS could conduct a general inquiry into the body parts affected by the injuries sustained because the terms of the referral did not permit it. The Employer contended that the construction placed on these words by the Appeal Panel was correct: namely, that it was only the joint ring finger on the left upper extremity and scarring which had been referred.
The expression "permanent impairment" is to be distinguished from the concept of "degree of permanent impairment". Neither expression is defined in the legislation. It was authoritatively held in Hunter Quarries Pty Ltd v Mexon (2018) 98 NSWLR 526; [2018] NSWCA 178 (Hunter Quarries) that the question of whether a worker has suffered permanent impairment is an antecedent question which arises prior to the question of the degree of that permanent impairment: [67] (Payne JA, Gleeson JA and Sackville AJA agreeing).
The evident purpose of s 325(1) is not only to provide an AMS with the parameters of his or her task but also to provide procedural fairness to the parties. There is also a third purpose: to prevent overlap if there is more than one referral because the nature of the worker's work-related condition goes beyond a single speciality. The examination conducted by the AMS is conducted in the absence of the Employer or the legal representatives for either party. Thus there is, effectively, no opportunity for a party to respond to a change in the parameters delineated in the referral. This highlights the importance of the terms of the referral, which is set by reference to the application to resolve a dispute and the reply, following which the parties may provide medical reports of experts retained by them for the consideration of the AMS. It is significant that the AMS's jurisdiction is limited by the terms of the referral, rather than by reference to the matters contained in the medical reports provided by the parties.
The requirement that the terms of the referral confine the jurisdiction of the AMS is also consistent with what the Court of Appeal (Handley AJA, McColl JA and McDougall J agreeing) said in Haroun v Rail Corporation New South Wales [2008] NSWCA 192 at [16]: "… The scheme for the settlement of compensation disputes established by the 1998 Act read with the Workers' Compensation Act 1987 (the 1987 Act) is to have factual and legal issues resolved by an Arbitrator subject to an appeal to a President or Deputy President, and to have certain medical issues decided by an AMS subject to appeal to a Panel."
It is important for the scheme that only certain matters be referred to an AMS and that the limits of the matters referred be set out clearly in the referral and not left for conjecture by the AMS or by the parties.

Relevant authorities

In order to determine whether the AMS fulfilled the task conferred on him by the referral, it is necessary to construe the referral. However, before doing so I propose to review the authorities relied on by the parties (Aircons, Bindah, Dening v Alloy Pty Ltd trading as Noble Toyota [2014] NSWSC 1224 (Dening) and Cincotta) to determine whether any affects the question to be determined.

Aircons

In Aircons, an arbitrator made a referral for assessment of the degree of permanent impairment. The referral to Dr Fry, a plastic surgeon, was for assessment of the matters of scarring and skin colouration. The referral to Dr Bodel was for assessment of restriction of movement only. Whereas Dr Bodel confined his consideration to an assessment of restriction of movement, Dr Fry considered not only scarring and skin colouration (which were within the terms of the referral), but also restriction in movement arising from "RSD/Causalgia". An appeal by the employer to the Appeal Panel was dismissed. The employer filed a summons in this Court, seeking relief under s 69 of the Supreme Court Act. Malpass AsJ held that the Appeal Panel erred in law in failing to find that the certificate of Dr Fry contained demonstrable error and that this amounted to an error of law on the face of the record. His Honour said, at [18]: "[I]t is a matter of importance that the medical dispute referral identify with precision the matters that are referred for assessment. A failure to do so may infect the whole assessment process."
His Honour drew an analogy between the terms of the referral and the pleadings. While the analogy was useful in Aircons, there are some difficulties with attributing broader application to it since there are some important differences. In Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11, the High Court set out the orthodox position regarding pleadings before addressing the circumstances where a court may decide a case on a basis different from that pleaded. The importance of pleadings to procedural fairness was also emphasised. Mason CJ and Gaudron J said, at 286-287: "The function of pleadings is to state with sufficient clarity the case that must be met… In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities… Ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted." [Emphasis added and citations omitted.]
In the present case, Mr McManamey argued that the ambit of the dispute between the parties was to be determined not only by the terms of the referral but also by what was contained in the medical reports which were exchanged between the parties. I reject this submission which I regard as inconsistent with the statutory wording of s 325(1). There is an important distinction between pleadings on the one hand and the terms of a referral on the other. A party cannot unilaterally expand the terms of a referral by serving a report which goes beyond the remit in the referral. Nor can parties, by their conduct, affect the terms of a referral except in the limited circumstances of an express concession which can have the effect of requiring the Appeal Panel to have regard to it (as in the present case with respect to the left wrist) or of binding the Appeal Panel to a particular conclusion (as in Dening).
I am not persuaded that there is any reason to distinguish Aircons on the basis of amendments to the Act or the 1987 Act since it was decided. Nor am I persuaded that it was erroneous or inconsistent with the subsequent decisions referred to below.

Bindah

In Bindah, a door swung back and hit the worker in his right eye. At the time he had a cataract in that eye. He had cataract surgery and was required to have a second operation as a consequence of complications arising from the first. The complications led to the worker losing sight in his right eye. The insurer accepted liability for the injury but denied that the injury included or involved a material exacerbation or aggravation of the cataract requiring surgery. The worker referred the dispute to the Commission under s 288 of the Act. The Commission made orders by consent that the worker suffered injury on 28 January 2009 to his right eye and the insurer was liable in respect to the injury; and that the matter be remitted to the Registrar for referral to an AMS.
The medical dispute as to the degree of permanent impairment as a result of the eye injury was referred to an AMS who assessed the permanent impairment as a result of the eye injury to be 0% and found that the permanent impairment to the worker's eye was due to the surgery. The Appeal Panel confirmed the certificate issued by the AMS.
The worker commenced proceedings in this Court pursuant to s 69 of the Supreme Court Act and argued that it was not open to the AMS or the Appeal Panel to determine whether the blow to the worker's right eye had exacerbated the pre-existing cataract, since that question had been determined in his favour by the order made by the Commission referred to above. The primary judge held that the "injury" referred to in the order was the injury sustained by impact with the door. On this basis, the primary judge dismissed the summons and held that the Appeal Panel had asked and answered the correct question.
The worker appealed to the Court of Appeal, which upheld the trial judge's finding. The worker argued that the primary judge erred in concluding that the question whether permanent impairment caused by an injury was capable of being determined by an AMS or the Appeal Panel. He contended that such a dispute had to be determined by the Commission itself. The Court of Appeal rejected that argument and said at [110] that the AMS and the Appeal Panel may, in the performance of their respective tasks, be required to determine issues of causation. Such issues include whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality and what degree of permanent impairment is due to the injury in question.
It follows from Bindah that, if the terms of the referral in the present case had authorised it, the AMS, and the Appeal Panel, would have been entitled to address whether CRPS (which affected his shoulder, elbow and all fingers and the thumb of the left hand) had been caused by the injury to the Claimant's left finger, wrist and scarring.

Dening

In Dening, the worker had been employed by Noble Toyota from 2003 to 2006. He suffered from industrial deafness and made a claim for compensation under the 1987 Act. On 22 June 2012 the worker filed an application to resolve a dispute, claiming a lump sum payment for industrial deafness. Noble Toyota informed the Registrar that it conceded that it was the last "noisy employer". It told the Registrar that there were two issues that had to be resolved: the nature and extent of the worker's hearing loss and whether hearing aids were reasonable and necessary treatment. Noble Toyota sought that the matter be referred to an AMS, to which the worker consented. The AMS was unaware of the employer's concession, having not been informed of it by the Registrar ([28]). The AMS determined that Noble Toyota was not a noisy employer and the injury suffered by the worker was not related to his employment with Noble Toyota. The worker appealed to the Appeal Panel, which confirmed the AMS's decision. This Court (Harrison AsJ) held that the Appeal Panel had failed to appreciate the significance of Noble Toyota's concession or to accept that Noble Toyota was the last noisy employer and was, accordingly, liable for the worker's hearing loss.

Cincotta

In Cincotta, the worker filed an application to resolve a dispute in the Commission concerning his claim for WPI on the basis of "lumbar spine/peripheral spinal nerve roots impairment (left)", which was also included in the "body parts referred" section of the referral. The worker had fallen at work and injured his lower back on 2 October 2015. He had had back surgery on 8 December 2015. Although the pain resolved following the surgery, the worker experienced weakness in his left leg and foot drop. There was an issue about whether the weakness had been caused by the injury or the surgery or whether it was caused by diabetic neuropathy. In its reply, the employer noted that the worker had injured his back some time before, in 2008, for which he had been paid lump sum compensation for permanent impairment of 24% WPI. The AMS found that the nerve root impingement fell within the earlier award for lump sum compensation and that no allowance ought be made for it. The AMS also found that the cause of the worker's foot drop was likely to be diabetes mellitus. The Appeal Panel confirmed the AMS's certificate and concluded at [37] of its reasons (extracted in Cincotta at [51]): "In our view, the AMS clearly explained his reasons for concluding that features of neurological abnormality were unrelated to the injury, and consistent with a diabetic polyneuropathy, and his findings were consistent with the totality of the evidence."
Hoeben CJ at CL said of the ambit of the referral: "[39] It is true that liability was not in issue in relation to the fall and anything consequential upon it. As such, had there been a determination by the AMS/Appeal Panel that the plaintiff's left foot drop was caused by the fall and the 2015 surgery, liability for the plaintiff's left foot drop would not have been disputed. However, that does not mean that there was no dispute as to whether the plaintiff's left foot drop, being the condition said to cause the permanent impairment, was caused by the injury for which liability had been accepted. That was a matter very much in dispute and that was made clear by the insurer's Reply. [40] The scope of an AMS's task, and therefore that of the Appeal Panel, was defined by two factors - the dispute referred to the AMS/Appeal Panel and the relevant legislative provisions. In this case, the referral to the AMS/Appeal Panel included: (a) the plaintiff's degree of permanent impairment as a result of the fall and/or the 2015 surgery; and (b) the proportion, if any, of the plaintiff's degree of permanent impairment due to any previous injury or pre-existing condition or abnormality."
It was argued by the worker in Cincotta that the Appeal Panel had erred in making a finding as to causation and proceeding on the basis that there was no consequential injury as a result of the fall at work, being the left foot drop. The worker submitted that all the AMS and Appeal Panel were authorised to do was to determine the degree of permanent impairment which existed without considering the question of causation. Hoeben CJ at CL rejected these arguments and found that the terms of the referral obliged the AMS and the Appeal Panel to consider the degree of permanent impairment attributable to other causes (which included diabetes and the 2008 injury) and to differentiate between these and the degree of permanent impairment resulting from the fall and the 2015 surgery. This process was necessary to determine the degree of impairment caused by the compensable fall.

Left upper extremity

A consideration of the authorities referred to above reveals that the question whether any impairment in the Claimant's left upper limb (apart from the ring finger, the wrist and the scarring) arose from the injury to the ring finger, the wrist and the scarring was a medical dispute which could have been determined by the AMS. Just as the AMS in Bindah was authorised to determine whether the injury to the worker's right eye exacerbated his cataract (thereby connecting the surgery which resulted in his blindness with the work-related injury) and the AMS in Cincotta was authorised to determine whether the injury to the worker's back caused the foot drop, the AMS in the present case could have been authorised to determine whether the CRPS from which he was alleged to be suffering was causally related to the injury to his left ring finger, wrist and scarring. In each instance, the question would have to be answered for the purposes of determining the degree of permanent impairment arising from the work-related injury.
I reject the contention of Mr McManamey that the reference to "body parts referred" could be disregarded by the AMS or that it constituted an unwarranted exercise of power by the Registrar. These body parts were the very same body parts as had been identified by the Claimant in the application to resolve a dispute which was filed by him on 8 August 2017. As the extract set out above indicates, the application identified a dispute which the Claimant said could be determined by the Commission under s 288 of the Act (being the dispute about lump sum compensation where liability is in dispute) and a dispute which could be determined by the AMS following referral under s 293 of the Act (being lump sum compensation where degree of permanent impairment is in dispute). The body parts claimed were nominated in Part 5.6 of the Claimant's application as "left upper extremity, joint ring finger and scarring". Thus, it was not the Registrar who was constraining the referral; it was the terms of the Claimant's own application to resolve a dispute which contained the limitation. As was held in Aircons, the AMS is bound by the terms of the referral to confine the matters determined to those which have been referred.
The Claimant (through his solicitors) was given an opportunity to review the referral and make submissions as to whether it correctly stated the dispute to be referred. The Claimant failed to avail himself of that opportunity by claiming that the whole of the left upper limb and not merely the ring finger (and wrist) were implicated and ought be referred. Had he done so, the question of causation could have been determined by the AMS, as it was in Bindah and Cincotta.
In my view, the plain meaning of the referral was that the only part of the left upper extremity which was to be assessed was the joint ring finger and scarring. By agreement with the Employer, the wrist was also to be assessed. However, the AMS was not entitled to assess the whole of the left upper extremity and went beyond the jurisdiction conferred on him by the referral. While it is understandable that the AMS, Dr Machart, felt entitled to continue where he had left off after the first referral, he was in error to assess the degree of permanent impairment in body parts that were not within the ambit of the referral. The Appeal Panel was correct to recognise this error. It, too, was bound by the terms of the referral. Its remit was also, however, affected by the Employer's concession that the left wrist ought also to have been referred. Indeed, the Appeal Panel expressly noted the employer's concession that the wrist ought to have been included in the referral.

The omission of the left wrist from the referral

It is plain from the Appeal Panel's decision that it limited its assessment to the Claimant's left ring finger and scarring. Having regard to the Employer's concession that the left wrist ought also to have been included, which was noted in the Appeal Panel's reasons, this omission was an error of law on the face of the record.
While the Appeal Panel was correct to determine that the AMS had gone beyond the terms of the referral in considering the shoulder, elbow and other fingers and thumb, the Appeal Panel itself was in error in not giving effect to the Employer's concession that the left wrist ought also to have been referred. When it became aware of the parties' concession, the Appeal Panel should have reverted to the Registrar to obtain a referral which reflected the parties' agreement as to the correction required. It was not entitled to ignore the Employer's concession that the wrist should have been included.
As in Dening, the Appeal Panel was required to give effect to the Employer's concession and the parties' agreement that the left wrist ought also to have been referred. It was an error of law to disregard the concession. For this reason, the decision of the Appeal Panel must be set aside.
I note for completeness that the parties addressed me on the potential consequences of the non-inclusion of the left shoulder and elbow in the referral. It appeared to be common ground that if the Claimant was bound by the certificate of the Appeal Panel he would not be able to obtain a further assessment: see Hochbaum v RSM Building Services Pty Ltd; Whitton v Technical and Further Education Commission t/as TAFE NSW [2020] NSWCA 113, [56] (Brereton JA, White JA agreeing). This was said to be the consequence of s 66(1A) of the 1987 Act and s 322A of the Act, when read with cl 1.17 of the Guidelines. This question does not arise for determination in these proceedings since I am satisfied that the Claimant has made out the third alleged error and that the Appeal Panel's decision ought, accordingly, be set aside. However, the risk that a worker might be debarred from having all the consequences of a work-related injury taken into account in an assessment of the degree of permanent impairment if the wording of the referral does not extend to a consideration of them, highlights the importance of care being taken in the wording of a referral. Further, it also indicates that where parties agree that the referral is incomplete, the Registrar ought be asked to send a revised, correct referral to the AMS or the Appeal Panel, as the case may be, so that the recipients of a referral are not in doubt as to its ambit.

Costs

The parties agreed that, as the cross-summons did not arise because of the amendment to the further amended summons, the parties ought bear their own costs of the cross-summons. It was also common ground that costs ought follow the event in accordance with the general rule: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

Orders

For the reasons given above, I make the following orders: 1. Set aside the decision of the second defendant made on 27 September 2019. 2. Remit the matter to the fourth defendant to be determined in accordance with law. 3. Dismiss the cross-summons. 4. Subject to order (4) below, order the first defendant to pay the plaintiff's costs of the proceedings. 5. Order the parties to bear their own costs of the cross-summons.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 June 2020

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