Smith v Liquip Services Pty Limited and Ors

Supreme Court of NSW|2007-06-25|Before: Hoeben J

Background facts 6 The plaintiff commenced casual employment with the first defendant as a hose maker on 20 July 2000. He suffered an injury to his right shin on 7 February 2001 when a large metal flange fell from a hose and struck him on the right shin. He was born on 14 August 1974 and was then aged 26. 7 Thereafter there is a significant factual dispute, the competing versions of which were before the approved medical specialists. In a statement made two and a half months following the incident, the plaintiff said that his shin was very painful following the incident although he was able to continue to go to work. He sought treatment from his family doctor, Dr Patroulias, on 23 February 2001. He says that when he returned to work on 26 February 2001 he presented a certificate from that doctor to the first defendant and his services were terminated. 8 The first defendant relied upon statements provided by fellow workers to the effect that following the incident on 7 February 2001, the plaintiff made no complaint and was quite active in performing his work. His services were terminated on 26 February 2001, not because he presented a certificate of unfitness, but because of his poor attendance and poor punctuality. 9 When interviewed by Dr Blake on 27 August 2004, approximately three and a half years after the incident, the plaintiff gave a significantly different description of how the injury had occurred and said that he felt something go bang in his left outer buttock and groin and felt pain in the region of his right sacro-iliac. He said that this caused him to limp while at work. He said that after he saw Dr Patroulias he was referred to an orthopaedic surgeon, Dr Giblin, who had advised physiotherapy. He said that his right leg was so sore that he needed to use crutches. 10 After 7 February 2001 the plaintiff went to rugby league training a couple of times but gave up when he fractured his collar bone. This appears to have occurred between 26 February 2001 and 15 July 2001. On 15 July 2001 the plaintiff was skiing when he suffered a significant injury to his left knee. The injury involved a dislocation of the patella with swelling of the knee. The plaintiff has not worked since 26 February 2001. 11 The plaintiff was not able to give Dr Blake a coherent account of his previous medical history. It seems that he had some back problems as a young man, but that these problems had resolved before he commenced employment with the first defendant. 12 The plaintiff appears to have developed back pain on 21 April 2001 during physiotherapy. On 28 April 2001 the physiotherapist recorded that back pain had ceased. No history was recorded as to the cause of the back pain. An x-ray of the plaintiff's low back was carried out on 13 May 2001. It was in September 2001 that the plaintiff began to attribute his back pain to the incident of 7 February 2001. 13 His claim for loss of efficient use of sexual organs was based on his reduced capacity to engage in sexual activity because of back pain. 14 The first defendant disputed the plaintiff's claims for compensation on the basis that he had not injured his back on 7 February 2001 and that his subsequent back problems had nothing to do with the injury at work. 15 It was against that background that the matter was referred by the Commission to the two AMS. Witness statements and medical reports, on behalf of both the first defendant and the plaintiff, were provided to the AMS.

Certificates from approved medical specialists 16 The matters referred to Dr Blake for assessment were: "Assessment of impairment of the back, loss of efficient use of right and left legs at or above the knee, and impairment of the pelvis, in accordance with the Table of Disabilities." 17 Dr Blake examined the plaintiff. In relation to that examination he reached the following conclusions: "Back - pelvis level on standing, nearly flat lordosis. No deformity, no lateral tenderness or spasm, and no central tenderness over the spine identified. Mr Smith indicated that some levels of his back feel good with the application of pressure. Movement show extension absent, flexion lower than expected at forty degrees, fingertips reaching the lower thigh. Lateral flexion a normal 40º to both sides, without pain. Rotation a low 40º to both sides without pain. When attempting extension movement in particular pain occurs and his trunk twists around. … Right lower leg - no evidence locally of the site of impact from the hose flange. A recent circular abrasion present in the lower shin area, and there was a small vein blow out evident. No abnormality found otherwise in the soft tissue. No abnormality found in the shin bone, which was not tender and in which no deformity was identified. Mental state - sadly, Mr Smith has some difficulty in holding a normal rational conversation. He was emotionally labile, would change the conversation to another direction, and would vary between being nervous and agitated, to relaxed and laughing at the questions, to being somewhat aggressive and threatening. He could then be sad and teary, appearing distressed and somewhat tormented to find himself in his present state." 18 Dr Blake's summary of injuries and diagnoses was: "Mr Smith describes how on 7 February 2001 he was at work as a hose maker and was fitting heavy flanges to 4" petrol hoses. He picked up a 6m role of completed hose to put it on the pallet. The flange, weighing possibly 10kg, came out of the coil and struck his right shin. In his initial statement of 20 April 2001, two and a half months following the injury, Mr Smith described how his right shin was very sore and he was helped to the first aid post and he rested and had ice supplied for about twenty minutes. He then resumed his normal work again. He makes no mention of any back problems, either Mr Smith himself or his work colleagues who have given statements made on the same date (20 April 2001). Mr Smith's work colleagues in their statements indicate that two days after the injury Mr Smith was running around the workshop trying to get things done and did not appear to have any limp or injury to his leg and Mr Smith did not appear to have any difficulties with performing his usual tasks following the alleged injury on 7 February 2001. At the time of this assessment and history giving, just over three years six months after the injury, Mr Smith describes a somewhat different incident in which he was taking weight through his right foot and toes at the time of the incident, his right leg being pushed backwards on the toes and with something suddenly going "bang" in his left outer buttock and groin, and a tearing in his right outer pelvis and groin. The two descriptions are not compatible. Diagnosis is of a sharp direct blow to the right shin, with bruising and local damage to the underlying bone, a bone scan showing increased activity. Recovery has been complete, there being no evidence of abnormality either on repeat x-rays or on repeat bone scan, or on physical examination of the right knee or lower leg, relating to such injury. The lumbar spine in which degenerative changes have been demonstrated in the lower two levels, together with a small to moderate central protrusion at L4/5 and a protrusion on the right at L5/S1, was not involved in the injury to his right shin at work on 7 Feb 2001. Apparently in about April 2001 during a course of physiotherapy, he developed low back pain radiating to the right leg. These symptoms increased after the skiing injury to his left knee on 15 July 2001. Unfortunately Mr Smith appears to have had a very disordered childhood followed by ongoing marijuana abuse and a personality disorder. A severe pain disorder and severe depression have been diagnosed. These factors considerably cloud and enlarge his musculo-skeletal presentation. His presentation was not consistent and his mood varied considerably during the assessment." 19 Dr Blake assessed the plaintiff as having suffered a 5% permanent loss of the efficient use of his back, 1.7% permanent loss of the efficient use of his right leg at or above the knee and 1.7% permanent loss of the efficient use of his left leg above the knee as a result of the incident of 7 February 2001. He set out his reasons for making that assessment as follows: "Below are my reasons for: a. My opinion and assessment of the percentage of permanent loss of efficient use and/or permanent impairment. Right shin - Mr Smith describes the sharp direct blow to the middle area of his right shin, producing bruising to the soft tissues and local damage to the underlying bone. The plain x-rays have always been normal, but the first bone scan showed increased activity locally in the shin, consistent with the blow producing a reaction in the bone, as a result of the trauma. Subsequent bone scans have returned to normal. Mr Smith is unable to identify the site of the injury now, and there is no scarring or other deformity on physical examination to suggest any persisting related abnormality. The muscle compartments are soft and normal. No abnormality is found in the right knee, apart from an old unrelated scar just below the kneecap. Thus it is evident that while occasional mild discomfort may still be present, the injury has healed and no sign of abnormality is now found. Back - the accounts of details of Mr Smith's injury and the subsequent events vary, including the two different descriptions given by Mr Smith himself in his early statement two and a half months after the event, and in his history as given now three and a half years later. There was no early mention of his back being in any way involved in the initial incident. His back appears to be first mentioned in the clinical notes of his treating physiotherapy on 21.4.01. They state that after initiating slump stretching involving his back (no reason is evident why they would start treating his back) there was a slight increase in his right leg symptoms. On 26.4.01 his symptoms are decreasing, and on 28.4.01 it is recorded there is no lower back pain. On 12.5.01 the notes record his condition is static and he is having right sided lower back pain. Dr Stenning on page 2 of his report states Mr Smith "feels the injury to his left knee (skiing on 15.7.01) produced added pressure onto his right leg leading to problems here and shin splints again started hurting a lot". Dr Bodel records that Mr Smith complained of back pain before the skiing injury, but doesn't mention a date. Later accounts of the initial incident by Mr Smith change and include the inclusion of his back being involved. There is thus inconsistency in the initial descriptions and history, and the more recent descriptions and history. The initial descriptions and Mr Smith's own statement would appear to be the more reliable, having been recorded close to the event. In my opinion, on the available information, Mr Smith's lower back was not involved directly in the work incident on 7.2.01. However it does appear that his back became involved secondarily, apparently during physiotherapy treatment in or about mid April. Pre-existing degenerative changes have been demonstrated in the lower two lumbar levels. On this basis, a smaller proportion of his present back symptoms are attributable to the original injury to his right shin. An Assessment is made, in relation to a most extreme case, as he now presents, of 15% impairment of the back, and 5% permanent loss of efficient use in each leg at or above the knee. The assessments in the legs relate to the complaint of pain radiating down the back of each leg in the absence of objective neurological signs. 2/3 of his total impairment in both the back and legs is attributable to the pre-existing degenerative changes in the back, and the subsequent effects of the skiing accident. 1/3 of the impairment in both the back and legs is related to the injury to his right shin on 7.2.01. Pelvis - there has been no injury to his pelvis. Both hip joints are normal to clinical examination. No impairment is thus found. … c. My brief comments regarding the other medical opinions and findings submitted by the parties and, where applicable, the reasons why my opinion differs: The opinions given in the medico-legal reports range from no back injury and no back or right leg impairment, through to significant back impairment relating to the injury, and impairment of the legs and of the pelvis. My opinion and assessments are explained under (a) above, and indicate why my opinion differs from the two extremes presented, falling more in the middle. The main decisions relate particularly to whether or not a back injury occurred at the time of the initial injury, and whether the back became secondarily involved as appears to be the case." 20 The matter referred to Dr Taylor for assessment was "sexual organs". Dr Taylor took a similar factual history to that recorded by Dr Blake. 21 In his summary of injuries and diagnoses Dr Taylor recorded: "Mr Robert Smith suffered two injuries on 7 February 2001 and 17 July 2001. In the first he suffered an injury to the right side of his leg and in the second an injury to the left knee. Since then he has developed diffuse body pains and complains of a degree of loss of use of his sexual organs. It is beyond my comprehension to envisage how the injuries that Mr Smith described to me as happening to him could lead to the loss of use of his sexual organs." 22 Dr Taylor assessed the plaintiff as having suffered 0% permanent loss of the efficient use of his sexual organs as a result of the injury of 7 February 2001. He set out his reasons for making that assessment as follows: "a. My opinion and assessment of the percentage of permanent loss of efficient use and/or permanent impairment. In my opinion the percentage of permanent loss of efficient use and/or permanent impairment of Mr Robert Garry Smith's sexual organs from the two accidents described above is nil. It is beyond my ability to conceptualise how the injuries described to me could result in the loss of sexual organs as described to me by Mr Smith. … c. My brief comments regarding the other medical opinions and findings submitted by the parties and, where applicable, the reason why my opinion differs: There are two other reports giving an opinion as to the loss of use of Mr Smith's sexual organs. Dr Lowy gives a total assessment of 30% and a whole person impairment of 5%. Dr Nash gives an impairment of 40%. I would point out that in Mr Smith's case his erectile function has been maintained and I cannot conceptualise how an injury to the right leg and the left knee would result in the widespread body pains and the testicular pains which Mr Smith told me he believed were the cause of the loss of use of sexual organs. I would point out further that there are no objective findings in Mr Smith's case which would substantiate his claim. That situation, however, is not uncommon in the loss of use of sexual organs following an injury. However, in the light of the thoroughly confusing and inconsistent history given by Mr Robert Smith it is my opinion that objective findings would be important in giving him the benefit of any doubt in the assessment of loss of use of his sexual organs. Further there is, in my opinion, no possible mechanism, either physiological or pathological by which Mr Smith's injuries of 7.2.2001 and 14.7.2001 could produce the loss of use of sexual organs that he described. Further, Mr Smith himself attributed the loss of use of his sexual organs to pains felt in his testes, back and right ribcage, not to the pain in the site of injuries. Also in assessing any loss of use of sexual organs in Mr Smith's case, that loss of use is slight reduced frequency of intercourse, and his statement that he does not enjoy it as much as he did before the injury. I disagree that this degree of loss of use of use of sexual organs is anywhere near as high as the 30% and 40% given by Drs Lowy and Nash." The Appeals 23 The sections dealing with appeals from approved medical specialist are ss 327 and 328: At the time these applications for appeal were brought those sections were in the following form: " 327 Appeal against medical assessment (1) 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.

(2) A matter is appealable under this section if it is a matter as to which the assessment of an approved medical specialist certified in a medical assessment certificate under this Part is conclusively presumed to be correct in proceedings before a court or the Commission. (3) 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 (being evidence that was not available to the appellant before the medical assessment appealed against or that could not reasonably have been obtained by the appellant before that medical assessment), (c) the assessment was made on the basis of incorrect criteria, (d) the medical assessment certificate contains a demonstrable error. (4) An appeal is to be made by application to the Registrar. The appeal is not to proceed unless the Registrar is satisfied that, on the face of the application and any submissions made to the Registrar, at least one of the grounds for appeal specified in subsection (3) exists. (5) If the appeal is on a ground referred to in subsection (3) (c) or (d), the appeal must be made within 28 days after the medical assessment appealed against, unless the Registrar is satisfied that special circumstances justify an increase in the period for an appeal. (6) The Registrar may refer a medical assessment for further assessment or reconsideration under section 329 as an alternative to an appeal against the assessment. (7) There is to be no appeal against a medical assessment once the dispute concerned has been the subject of determination by a court or the Commission or agreement registered under section 66A of the 1987 Act. (8) Section 345 of the Legal Profession Act 2004 applies to and in respect of the provision of legal services in connection with an appeal under this section in the same way as it applies to and in respect of the provision of legal services in connection with a claim or defence of a claim for damages referred to in that section.

328 Procedure on appeal (1) An appeal against a medical assessment is to be heard by an Appeal Panel constituted by 2 approved medical specialists and 1 Arbitrator, chosen by the Registrar. (2) The appeal is to be by way of review of the original medical assessment. The WorkCover Guidelines may provide for the procedure on an appeal. (3) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the medical assessment appealed against may not be given on an appeal unless the evidence was not available to the appellant before that medical assessment or could not reasonably have been obtained by the appellant before that medical assessment. (4) When attending an Appeal Panel for the purposes of an assessment, an injured worker is entitled to be accompanied by a person (whether or not a legal adviser or agent) to act as the injured worker's advocate and assist him or her to present his or her case to the Appeal Panel. (5) The Appeal Panel may confirm the certificate of assessment given in connection with the medical assessment appealed against, or may revoke that certificate and issue a new certificate as to the matters concerned. Section 326 applies to any such new certificate. (6) The decision of a majority of the members of an Appeal Panel is the decision of the Appeal Panel." 24 The first defendant made an application to appeal to the Registrar against the assessment of Dr Blake. It made no application in relation to the assessment by Dr Taylor. It relied upon grounds of appeal 327(3)(c) and (d) that the assessment of the AMS was made on the basis of incorrect criteria and that the medical assessment certificate contained a demonstrable error. The plaintiff made an application to appeal to the Registrar in relation to the assessments of both Doctor Blake and Doctor Taylor. He relied upon all four grounds of appeal provided for in s 327(3). 25 The Registrar was apparently satisfied that, on the face of the applications and any submissions made, at least one of the grounds of appeal had been made out. Unfortunately the document recording the Registrar's referral to the Appeal Panel has been lost or no longer exists. The parties were unable to provide a copy to the Court. Accordingly, it is not known in respect of what grounds the matter was referred to the Appeal Panel and on what basis. It is not even clear which appeals were referred to the Appeal Panel. 26 In view of the approach adopted by the Appeal Panel, it seems to me that all of the appeals must have been referred to it. On the basis of the submissions from each side in support of the applications to appeal, I infer that the Registrar must have been satisfied either that the assessments were made on the basis of incorrect criteria or that one or both of the medical assessment certificates contained a demonstrable error. 27 No challenge was made in the submissions (both oral and written) in this Court to the decision of the Registrar. It was the decision of the Appeal Panel which was the subject of challenge.

Decision of Appeal Panel 28 The Appeal Panel determined that it was not necessary for the plaintiff to be further medically examined because it had sufficient evidence before it to enable it to determine the appeal. It noted that as well as the submissions in support of the appeal it had before it the same material as had been placed before the AMS. The Appeal Panel delivered its decision on 7 July 2006. 29 By way of preliminary remarks the Appeal Panel referred to the decision of Campbelltown City Council v Vegan [2004] NSWSC 1129, a decision of Wood CJ at CL. It referred specifically to the opinion of his Honour that the Registrar under s 327(4) has a "gatekeeper" role. The Appeal Panel described its role as follows: "If the Registrar decides that an appeal can "proceed" the Appeal Panel "is then free to conduct a review upon the basis of the material properly before it, without any need to make a formal finding itself as to the existence of an error falling within an available ground of appeal and without being confined to the correction of that error." 30 Accordingly, the Appeal Panel in this case approached its task as if it were a review de novo of all of the material that was properly before it. The Appeal Panel did not consider that it needed to identify a specific error in the medical assessments which it was reviewing. 31 In line with that approach the Appeal Panel reviewed the factual background of the claim by reference to medical examinations of the plaintiff, which had taken place during 2001, and to histories given by the plaintiff at that time. It noted that it was not until 5 September 2001 that the plaintiff's treating orthopaedic specialist, Dr Giblin, had recorded that the plaintiff was complaining of back problems. It was for that reason that Dr Giblin had ordered an MRI scan of the low back. The Appeal Panel specifically referred to the opinion of Dr Giblin in his report of 24 October 2001 where he said: "It appears that at the time of the injury, although the metal object hit him in the shin, he twisted his back at the same time, and I consider that most of his problem relates to his back." 32 In relation to the medical assessment of Dr Blake, the Appeal Panel said: "25 The Appeal Panel notes that Dr Blake, the AMS, took a very detailed and careful history and accepts his opinion that: (a) The Right Leg diagnosis is of a sharp direct blow to the right shin with bruising and local damage to the underlying bone, a bone scan showing increased activity. Recovery has been complete, there being no evidence of abnormality either on repeat x-rays or repeat bone scan, or on physical examination of the right knee or lower leg, relating to such injury. (b) The Lumbar Spine. Degenerative changes have been demonstrated in the lower two levels, together with a small to moderate central protrusion of L4/5 and a protrusion on the right at L5/S1 was not involved in the injury to his right shin at work on 7 February 2001. Apparently in about April 2001 during a course of physiotherapy, he developed low back pain radiating to the right leg. These symptoms increased after the skiing injury to his left knee on 15 July 2001. 26. The Panel also notes the alternative explanation proffered to the AMS to account for a mechanism of injury different to that recorded in the worker's statement and his opinion that "the two descriptions are not compatible". 27 The Panel agrees with the comment of the AMS that there is need for help and understanding of the worker's situation, and support both socially and medically. The report of Dr Robert Hampshire, consultant psychiatrist, also indicates that the worker suffers from "a severe pain disorder in which psychological factors are now the overwhelming driver to his symptotology, far outweighing any organic or underlying structural damage he may have." 28 However, in the view of the Appeal Panel, there is no evidence before it that the worker has any permanent disability resulting from the bruising to his right leg on 7.2.2001. There is no evidence that the worker suffered any injury to his back resulting from the accident at work on 7.2.2001. The Panel rejects Dr Giblin's explanation that the worker twisted his back at the time he was hit on the shin, as mere conjecture unsupported by any contemporaneous report of his injury to his back by the worker. 29 The Panel notes the assessment of Dr James Bodel in his report of 8 October 2003 that the MRI showed very minor pathology in the lumbar spine and there is no evidence of nerve root irritability. In the view of the Panel, the evidence of back disc lesions only showed up after physiotherapy or the skiing incident. There is no objective evidence of radiculopathy, or genuine sciatica. 30 There was nothing in the mechanism of injury to the right shin described that would indicate that the worker could have injured his back as a result of this accident. There was nothing in the worker's statements at the time of the injury, or some months thereafter which indicates that the worker reported any injury to his back." 33 In their decision the Appeal Panel not only revoked the medical assessment certificate issued by Dr Blake, but also revoked the medical assessment certificate of Dr Taylor. No reasons were given for this latter decision. It then issued a new medical assessment certificate which awarded 0% in respect of all of the plaintiff's claims, including the claim relating to loss of efficient use of sexual organs.

The relief claimed by the plaintiff 34 The plaintiff claims orders quashing the decision of the Registrar on the grounds of jurisdictional error and/or error of law. In the alternative, he claims an order quashing the decision of the Appeal Panel on the same basis, and an order remitting the matter to an Appeal Panel differently constituted to be dealt with according to law. 35 As indicated, not only have the documents relating to the Registrar's decision been lost but no grounds of appeal or submissions were directed to this matter. In any event such a challenge would be extremely difficult in view of the decision of the Court of Appeal in Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission of NSW and Ors [2007] NSWCA 149. Consequently I do not propose to consider the orders sought in respect of the Registrar but to only have regard to those sought against the Appeal Panel. 36 The plaintiff also claimed a declaration that clauses 43 and 44 of the Guidelines are invalid because of inconsistency with the obligation imposed by s 328(1). The plaintiff submitted that s 328(1) mandates that the Appeal Panel hold an assessment hearing rather than merely allowing for it. The ground was formally maintained but no submissions were advanced in support of it. Counsel for the plaintiff accepted that this point had been decided adversely to the plaintiff in Estate of Heinrich Christian Joseph Brockmann v Brockmann Metal Roofing Pty Limited [2006] NSWSC 235 (Studdert J). In my opinion the decision of Studdert J is correct and Brockmann was correctly decided. It follows that I decline to make the declaration sought in ground of appeal (2). 37 This meant that the two specific grounds of appeal relied upon by the plaintiff for challenging the decision of the Appeal Panel were:

(1) The Appeal Panel failed to consider the exercise of a discretion, failed to take into account a relevant consideration and/or failed to accord the plaintiff procedural fairness in failing to consider whether to exercise their discretion to request medical reports in the possession of the first defendant as requested by the plaintiff.

(3) The Appeal Panel failed to exercise its jurisdiction, failed to understand the nature of its task and erred in law in conducting a hearing de novo rather than confining itself to the correction of demonstrable error or incorrect application of criteria. 38 The jurisdiction to grant relief in the nature of certiorari is to be found in s 69 of the Supreme Court Act 1970. Subsection (3) declares that the jurisdiction of the Court to grant relief of this kind includes the jurisdiction to quash the ultimate decision of the tribunal if it is made on the basis of error of law on the face of the record. 39 In Craig v South Australia (1985) 184 CLR 163 at 179 the High Court explained the scope of jurisdictional error in the context of the review of decisions of an administrative tribunal in this way: "If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it." 40 The first ground of appeal depends upon a particular reading of s 324. This section provides: "324 Powers of approved medical specialist on assessment (1) The approved medical specialist assessing a medical dispute may: (a) consult with any medical practitioner or other health care professional who is treating or has treated the worker, and (b) call for the production of such medical records (including x-rays and the results of other tests) and other information as the approved medical specialist considers necessary or desirable for the purposes of assessing a medical dispute referred to him or her, and (c) require the worker to submit himself or herself for examination by the approved medical specialist. (2) If a worker refuses to submit himself or herself for examination by the approved medical specialist if required to do so, or in any way obstructs the examination: (a) the worker's right to recover compensation with respect to the injury, or (b) the worker's right to weekly payments, is suspended until the examination has taken place. (3) This section extends to the assessment of a medical dispute in the course of an appeal or further assessment under this Part. An approved medical specialist who is a member of the Appeal Panel hearing the appeal or who is assessing the matter by way of further assessment has all the powers of an approved medical specialist under this section on an assessment of a medical dispute." 41 The plaintiff submitted that s 324(1)(b) gave to an AMS (and therefore the Appeal Panel) power to require production by a party of a medico-legal report which it had obtained for use in proceedings before the Commission. In this case the first defendant had obtained a report from a urologist, Dr Korbel, and from a doctor who specialised in sporting injuries, Dr Saunders, but had not served those reports or provided them to the plaintiff when requested. In his submissions in support of his application to appeal the plaintiff asked the Appeal Panel to require the first defendant to produce to it those two reports. 42 The plaintiff submitted that the Appeal Panel was bound to consider that request by the plaintiff and to consider whether to exercise its discretion to request those reports from the first defendant. If the Appeal Panel decided not to exercise its discretion in that way, then it was bound to give reasons for its decision (Campbelltown City Council v Vegan [2006] NSWCA 284). In this case not only had the Appeal Panel failed to give reasons, it had not even referred to the plaintiff's request. 43 The plaintiff characterised that failure on the part of the Appeal Panel as ignoring relevant material in the sense referred to in Craig. He submitted that the Appeal Panel was bound to have regard to this request by the plaintiff and its failure to do so involved a failure to properly exercise its function which was quasi judicial in nature and provided a basis for its decision being quashed. Reliance was placed on what was said by Bell J in Dar v State Transit Authority of NSW [2007] NSWSC 260 at [68-69]. 44 In my opinion this ground of appeal fails at the first hurdle. I do not read the phrase "medical records" as used in s 324(1)(b) as including medico-legal reports obtained by either side for use in an application for compensation before the Commission. The phrase "medical records" would undoubtedly include medical reports, which may have been obtained in the past, but not it seems to me medico-legal reports specifically obtained for use in the actual proceedings in relation to which the AMS or Appeal Panel is performing a function. Such documents are not normally considered to be medical records as such. The concept of a "record" and the context in which the phrase is used in s 324 suggest documents which comprise the medical history of the applicant for compensation. In support of that interpretation is the fact that in other parts of the Act a clear distinction is made between a "medical report" and other documents (ss 332, 338). 45 Medical reports such as those obtained from Doctors Korbel and Saunders by the first defendant would normally be covered by legal professional privilege. For s 324(1)(b) to have the meaning submitted by the plaintiff, an intention to displace possible claims for legal professional privilege would need to be expressed in significantly clearer terms. 46 The interpretation which I have given to s 324(1)(b) accords with the procedures prescribed for assessments by an AMS or Appeal Panel. Those procedures provide for the parties to submit medical reports, statements and other documents to support their position. The AMS or Appeal Panel then has power to seek out other material such as medical records from persons who have treated the worker including test results so as to provide the full medical picture. That procedure does not, in my opinion, envisage the involuntary provision by a party of medico-legal reports obtained for use in proceedings current in the Commission. 47 Given my approach to s 324, there is no need to consider the plaintiff's first ground of appeal further. 48 In relation to the third ground of appeal the plaintiff relies upon the following remarks by Basten JA (with whom McColl JA agreed) in Vegan: "132 These questions are clearly not unrelated. Thus, if several grounds are identified in a notice of appeal, is it only those of which the Registrar is satisfied that the ground "exists" that can be dealt with by the Panel? Or if one is found to exist by the Registrar, can the Appeal Panel deal with all grounds which are in their view sustainable? If the Appeal Panel is limited to the ground or grounds found by the Registrar, must she specify the ground and can she specify more than one ground? 133 On first impression, it would seem that the Registrar is not required to determine the scope of the appeal because her role is merely to determine whether the appeal is to "proceed", the appeal itself being by way of review by the Appeal Panel. If only one ground for appeal exists, in the opinion of the Registrar, it would appear that the whole of the appeal may proceed and that, being satisfied as to one ground, the Registrar is not required to address other grounds. Similarly, to say that a ground of appeal "exists", as it "appears" to the Registrar, is to say no more than that the application before the Registrar satisfies the minimum requirements of s 327(3). There is no suggestion that the Registrar is required to consider whether the ground should succeed or to do more than satisfy herself that a ground, in conformity with s 327(3), is alleged and (perhaps) cannot be dismissed as patently untenable or colourable. 134 Whether this is entirely consistent with the approach accepted by the primary judge at [74]-[75] and apparently applied by Hislop J in Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission of NSW [2005] NSWSC 1260 at [24] is not entirely clear. In the present case, Wood CJ at CL adopted a particular view of the role of the Registrar not because (as in Riverina Wines ) there had been a challenge to the decision of the Registrar, but because his Honour needed to determine whether the review undertaken by the Appeal Panel was "other than a review de novo": see at [77]. By that his Honour meant, adopting the categorisation in Allesch v Maunz (2000) 203 CLR 172 at [23], a completely fresh rehearing "in which the power of the appellate body to re-exercise the power must be exercised 'regardless of error'." His Honour concluded at [81]: "It would follow, in the present case, that once the Registrar as gatekeeper was satisfied, of the existence of the 2% error appearing on the face of the table, or of any other error, then it was appropriate for the matter to be referred to the Appeal Panel. It was then free to conduct a review upon the basis of the material properly available before it, without any need to make a formal finding itself as to the existence of an error falling within an available ground of appeal, and without being confined to the correction of that error." 135 The tendency of the legislature to identify the available grounds for an appeal, without separately determining the scope of the appellate tribunal, has given rise to difficulties in other situations. That is particularly so where the appellate tribunal has broad powers and many sources of jurisdiction. For example, in Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at [38] the joint judgment of Gleeson CJ, Gummow and Callinan JJ (in which Hayne J relevantly agreed) noted that where an appeal to this Court was available where a party was aggrieved "in point of law or on a question as to the admission or rejection of evidence", this Court's powers might be limited to correction of the error, or might encompass the powers exercisable by the Compensation Court, as on a rehearing. The majority did not express an opinion on this question (at [38]) but Kirby J, who found it necessary to do so, concluded that the powers of this Court were limited to correcting errors of law. Thus his Honour stated [69]: "In the context of this legislative history, and despite the ungainly language, there can be little doubt that the purpose of Parliament was to limit both the jurisdiction and powers of the Court of Appeal to the determination of appeals on a point of law (or in relation to the admission or rejection of evidence). The alternative construction would be capricious, involving the need for jurisdiction to establish, relevantly, an error in point of law but thereafter allowing, and probably requiring, the Court of Appeal to exercise its powers to decide purely factual disputes." 136 A similar conclusion had been reached by this Court in North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412 at [22]-[24] (Beazley JA, Giles JA and Davies AJA agreeing), because the legislature had conferred exclusive jurisdiction on the Compensation Court to determine such matters.

137 Two factors suggest that such an approach would also be appropriate in relation to the powers of the Appeal Panel. First, if the Appeal Panel's powers were at large, the need to specify grounds of appeal limited to particular categories, would be rendered largely otiose. Secondly, the Appeal Panel is not a tribunal which has any powers other than those necessary to deal with the appeals in question. Thus, unlike this Court, it is not necessary to consider whether broad existing powers are exercisable in a particular case or not. On a tentative view, the approach adopted by the primary judge in the present case may have been in error and the powers of the Appeal Panel may be limited to addressing, and if thought necessary, correcting, errors identified in the certificate granted by the approved medical specialist, as specified by the appellant. However, it is not necessary to reach a final conclusion in relation to this aspect of the matter because the certificate must be set aside on other grounds and the matter remitted to the Appeal Panel for it to exercise its powers according to law ." 49 The plaintiff submitted that the tentative view of Basten JA ought to be applied to the decision of the Appeal Panel in this case. If it were then the AMS as the original decision maker should be regarded as the finder of fact and the Appeal Panel would only have power to intervene if "demonstrable error" was identified or there was an incorrect application of criteria. 50 Following the decision of the Court of Appeal in Vegan there has been some division of opinion in this Court. In Lukacic v Vickarni Pty Limited & Anor [2007] NSWSC 530 Harrison As J adopted the approach of Wood CJ at CL at first instance in Vegan. However, the decision of Malpass As J in Skillen v MKT Removals Pty Limited & Ors [2007] NSWSC 608 is more in accord with the "tentative view" of Basten JA. 51 In Skillen Malpass As J referred to the confusing terminology in ss 327 and 328 where the concepts of "appeal" and "review" are used apparently interchangeably. His Honour said: "20 It would seem to be intended that what is described as a "review" conferred by the sections (like that which is conferred by the Rules) is, at least in part, in the nature of an appeal. 21 The statutory regime not only limits the grounds of appeal to four categories, but also requires an identification of those that are relied on.

22 The statutory regime does not require the Registrar to address all of the grounds for appeal. It suffices for the Registrar to be satisfied that at least one of them has been made out. If that happens, only then does the appeal proceed to a Panel (which can address and correct error). 23 In this statutory context, it does not seem to me that it was intended that the review be a hearing de novo (a completely fresh hearing at large in which the power of the Appeal Panel may be exercised regardless of error). See, inter alia, Allesch v Maunz (2000) 203 CLR 172 at 180-181 . I observe also that there may not be a hearing as such (as in this case, it may be determined on the papers) and the Appeal Panel has restricted powers. 24 I prefer the view that the grounds for appeal impose a restraint on the scope of the review that is to be conducted by the Appeal Panel pursuant to s 328. I further take the view that the matters in issue may be further narrowed by that which may arise from submissions made in respect of the grounds for appeal.

25 Even if a different view were to be taken in respect of any of those matters, it seems to me that it would be a denial of natural justice for the Appeal Panel to deal with matters falling either outside the scope of the grounds of appeal or the submissions without first giving the parties the opportunity to be heard concerning them." 52 Quite clearly on the hearing de novo approach advocated by Wood CJ at CL in Vegan at first instance the plaintiff's ground of appeal 3 must fail. A final decision as to which approach is correct must await further consideration by the Court of Appeal. That having been said, it seems to me that it is a bold step for a first instance judge to entirely disregard obiter remarks by a Judge of Appeal, particularly where that judgment has been agreed to by another Judge of Appeal. This is the case even where those remarks are but "a tentative view". 53 It seems to me that the approach suggested by Malpass As J has considerable force. I agree that the grounds of appeal impose a restraint on the scope of the review to be conducted by the Appeal Panel. Nevertheless, the task of the Appeal Panel as set out in s 328(2) is to conduct the appeal "by way of review of the original medical assessment". It is also of significance that the appeal panel is a specialist panel made up of an arbitrator and two medical specialists. Taking that into account and the concept of "review" in s 328(2) it would be unduly restrictive to constrain the functions of an Appeal Panel in the way described by Kirby J in Vetter v Lake Macquarie City Council. It seems to me that once error of the necessary kind has been identified that the Appeal Panel can exercise its particular expertise to correct that error which may involve fact finding depending on the nature of the error identified. 54 In this case it seemed to be agreed between the parties, at least implicitly, that the relevant ground of appeal was "the medical assessment certificate contains a demonstrable error". Submissions from both sides were directed to that ground of appeal. However, the meaning of the ground of appeal is itself not particularly clear. 55 In that regard Basten JA said in Vegan: "95 These complaints were all said to demonstrate that the assessment was made on the basis of "incorrect criteria". It is arguable that factual errors made by an approved medical specialist, as recorded in the certificate, may be "demonstrable errors", but they would not usually satisfy the "incorrect criteria" ground. That must refer to such matters as the tests set out in the Guidelines, where they are applicable. The transcription error contained in the certificate was relied upon as a "demonstrable error". It was also an "obvious error" which was capable of correction by the Registrar and was conceded by the Council to be an error which required correction." 56 I attempted to apply the phrase in Merzer v Registrar of Workers Compensation Commission [2006] NSWSC 939 at [39] where I said: "39 I do not propose to, nor is it necessary, that I define what is "demonstrable error" for the purposes of s327 of the Act in an exhaustive way. It is sufficient for the purposes of this matter that I conclude that "demonstrable error" is an error which is readily apparent from an examination of the medical assessment certificate and the document referring the matter to the AMS for assessment." 57 In Pitsonis v Registrar of the Workers' Compensation Commission [2007] NSWSC 50 Malpass As J concluded that "demonstrable error" for the purposes of subs 327(3) embraces something more than an "obvious error", which the Registrar may correct under s 325(3). He observed that an error is demonstrable if it is capable of being shown or made evident, citing the definition of "demonstrable" in the Oxford English Dictionary, 2nd ed. 58 Taking those approaches into account, it seems to me that factual errors particularly of a medical kind, or errors of logic and analysis if they are readily "demonstrable" from an examination of the medical assessment certificate would amount to demonstrable error for the purposes of s 327(3). 59 At the time when the Appeal Panel made its determination the Court of Appeal decision in Vegan had not been handed down. The Appeal Panel approached its task in the way recommended by Wood CJ at CL in Vegan at first instance. In particular no attempt was made to identify "in terms" demonstrable error. On the "tentative view" of Basten JA that approach may have been erroneous. 60 Does that mean that the assessment by the Appeal Panel has to be quashed? In my opinion it does not. The medical assessment certificate of Dr Blake reveals demonstrable inconsistency. The finding that: "in my opinion on the available information, Mr Smith's lower back was not involved directly in the work incident on 7.2.01. However, it does appear that his back became involved secondarily apparently during physiotherapy treatment in about mid April" is inconsistent with his earlier findings of fact both as to complaints made by the plaintiff and as to the medical significance of those complaints. This it seems to me establishes that the medical assessment certificate of Dr Blake contained a demonstrable error. 61 Dr Blake's conclusion is subject to the same criticism as the Appeal Panel directed to the September report of Dr Giblin: "However, in the view of the Appeal Panel, there is no evidence before it that the worker has any permanent disability resulting from the bruising to his right leg on 7.2.2001. There is no evidence that the worker suffered any injury to his back resulting from the accident at work on 7.2.2001. The Panel rejects Dr Giblin's explanation that the worker twisted his back at the time he was hit on the shin as mere conjecture unsupported by any contemporaneous report of injury to his back by the worker." 62 It is clear from an analysis of the reasons of the Appeal Panel that in carrying out their review they identified demonstrable error in the medical assessment certificate of Dr Blake and their conclusion in that regard did no more than to correct that demonstrable error. 63 On the "tentative view" of Basten JA the Appeal Panel in describing its function may well have asked itself the wrong question. Even so, applying the test in Craig it does not seem to me that this caused the Appeal Panel to make an erroneous finding or reach a mistaken conclusion so that the Appeal Panel's exercise of power was thereby affected. 64 Had the Appeal Panel asked itself the correct question that is, whether the medical assessment certificate contained a demonstrable error, it is clear from its analysis and process of reasoning that it would have reached the same conclusion. It is not without significance that the submissions made to the Appeal Panel particularly those by the first defendant were directed to the precise error identified by the Appeal Panel. It is clear from paragraphs 28-30 of its reasons that, while it accepted the primary findings of fact by Dr Blake, it did not accept his conclusion. 65 It follows that the plaintiff has failed to make out ground of appeal (3). 66 Whilst that is sufficient to deal with the challenge to the new medical assessment certificate issued by the Appeal Panel in respect of the medical assessment of Dr Blake, it does not explain why the Appeal Panel quashed the medical assessment certificate of Dr Taylor. Nor does it explain why it then issued its own medical assessment certificate which came to the same result, ie 0% permanent loss of efficient use of sexual organs. 67 No submissions were made by either side on this matter. I propose to grant liberty to the parties to make submissions as to what the Court should do in relation to that part of the Appeal Panel certificate which deals with the medical assessment of Dr Taylor. I propose to refrain from making final orders in the matter until both sides have had a chance to provide further submissions on that question. **********

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CITATION : Smith v Liquip Services Pty Limited and Ors [2007] NSWSC 687

Allesch v Maunz (2000) 203 CLR 172 Campbelltown City Council v Vegan [2004] NSWSC 1129 Campbelltown City Council v Vegan [2006] NSWCA 284 Craig v South Australia (1985) 184 CLR 163 Dar v State Transit Authority of NSW [2007] NSWSC 260 Estate of Heinrich Christian Joseph Brockmann v Brockmann Metal Roofing Pty Limited [2006] NSWSC 235 CASES CITED : Lukacic v Vickarni Pty Limited & Anor [2007] NSWSC 530 Merzer v Registrar of Workers Compensation Commission [2006] NSWSC 939 North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412 Pitsonis v Registrar of the Workers' Compensation Commission [2007] NSWSC 50 Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission of NSW [2005] NSWSC 1260 Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission of NSW and Ors [2007] NSWCA 149 Skillen v MKT Removals Pty Limited & Ors [2007] NSWSC 608 Vetter v Lake Macquarie City Council (2001) 202 CLR 439

(1999) 18 NSWCCR 412

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