TJ Galluzzo and SJ Galluzzo t/as Riverwood Chemworld Chemist v Dianne Little

3The defendant also raised the question of whether, in concluding that there had been a denial of procedural fairness in the Appeal Panel failing to call further submissions from the parties on the construction point, what had been decided in Fletcher International Exports Pty Limited v Barrow [2007] NSWCA 244 at [98] had been overlooked. It had not. What was there observed was: "98 The submissions that the Presidential member was in some way obliged to "seek clarification of the way in which the Appellant contended its submissions were relevant" (Ground 6(c)) seeks to impose a duty on which the statute is silent. Procedural fairness does not require this of a decision-maker: a reasonable opportunity to advance arguments is all that is required in a context where the issues are known or (as here) formulated by the party in question. 99 The detailed reasons provided in the Determination show that the presidential member understood the employer's submissions, addressing them in turn." 4In this case, I concluded that while the plaintiff was not entitled to an oral hearing: "35 Even so, in the circumstances, given the Appeal Panel's views as to the inadequacy of the submissions before it on a matter which it had to determine, given the Registrar's delegate's decision, it was plainly obliged to seek clarification from the parties as to their cases on that issue. 36 That was the approach taken in Symbion Health Ltd v Hrouda. There, Hall J took the view that there had been no denial of procedural fairness in circumstances where the Appeal Panel had identified the issue on which its consideration turned and had invited further submissions from the parties, to which the plaintiff had not responded. There the Appeal Panel was also not satisfied with the submission initially provided. The plaintiff did not pursue that opportunity and in those circumstances, no lack of procedural fairness was found (see at [75] - [98]). That course was not taken by the Appeal Panel in this case. 37 The result was that the issue on which the Registrar's delegate concluded that a ground for appeal had been established, which concerned the construction and operation of provisions of the Act and the Guides and a possible conflict between them, was not properly dealt with. The views expressed were not ones which the parties had specifically addressed. That being so, if the Appeal Panel determined to proceed without an oral hearing, at the least it ought to have called for submissions from them, on the views which the Registrar's delegate had expressed, before coming to a conclusion on the construction point which had arisen for its determination. 38 By failing to take that course, the parties were not given an opportunity to be heard on a matter which then fell to the Appeal Panel to decide. The result was a denial of procedural fairness, the parties not having been heard on the point. " 5This conclusion was reached in circumstances which were markedly different from these which had arisen for consideration in Fletcher International Exports Pty Limited v Barrow. In this case the plaintiff had not addressed the construction and operation of the Act in its written submissions, that being the matter in respect of which the Registrar's delegate had concluded that a ground of appeal had been established. The delegate's reasons explained why she had concluded that this ground of appeal had been established. That was an aspect of the appeal which the Panel had to resolve. 6The Panel was rightly critical of the written submissions. Despite the inadequacy of the submissions, however, the appeal had to be determined. Under this statutory scheme the Panel was not obliged to conduct an oral hearing, but it was obliged to determine the construction point, giving reasons for its conclusion. The inadequacy of the submissions did not relieve the Panel of that obligation. Given its view that the submissions were inadequate, as a matter of procedural fairness the Panel was obliged to inform the plaintiff of its view and to give it an opportunity to address the deficiency. 7The end result of the procedure adopted was that not only were the parties not afforded procedural fairness, the Panel had inadequate assistance in deciding the construction point which fell to it to determine and, it appears on the face of the judgment, given the absence of any reference at all to the applicable provisions of the Act which the Panel had to consider, seemingly had no real understanding of the issue which it had to decide. In the result, it did not understand the parties' respective positions on the construction point and did not give any explanation of the reasons for the conclusion which it reached, as to the operation of the Act. 8The Appeal Panel's approach in this case involved errors of kinds not present in Fletcher International Exports Pty Limited v Barrow. In that case, not only were the matters in issue understood by the decision maker, as was the parties' position on those issues, they were decided for reasons which were given. In Symbion Health Ltd v Hrouda [2012] NSWSC 295, a similar difficulty to that confronting the Panel in this case arose. In that case that difficulty was dealt with in a procedurally fair way, when the Appeal Panel invited further submissions from the parties on the point not addressed in their written submissions. That is what should have occurred in this case, if the obligation to afford the parties procedural fairness was to be met.

The Orders 9As to the orders to be made, it was the defendant's case that there was a discretion not to uphold the appeal and refer the matter back to the Appeal Panel, which should be exercised in this case, given that the Appeal Panel would be bound to follow the conclusions reached as to the proper construction of the Act. In the circumstances, if that course were pursued, then the same conclusions would have to be reached by the Panel, notwithstanding the errors which had been established on appeal, because the approach which the Panel had adopted, accorded with the conclusions reached on appeal as to the proper construction of the Act. 10Strictly speaking, of course, these proceedings do not involve an appeal, but an application for various declaratory relief and other orders. For the plaintiff it was submitted that the errors identified were not only errors of law, but also jurisdictional errors, with the result that the appeal had to be upheld, the decision quashed and the matter remitted to the Appeal Panel. In the circumstances that would be desirable in any event, because, given the passage of time, the Appeal Panel would be able to itself examine the defendant in order to determine the consequences of all of the injuries which she had suffered, including that suffered to her left knee. 11That was disputed for the defendant, who did not have an opportunity to lead evidence, given the time that this submission was advanced by the plaintiff, but who submitted that her position is that she is due still to have further surgery on her left knee, with the result that this injury had not yet stabilised sufficiently for any assessment to be made. In any event, it was submitted that this matter could not be dealt with by the Appeal Panel, it only having a role in the assessment of that injury, in the event that the parties were disagreed as to a medical assessor's assessment of the consequences of the injury. There had as yet been no such assessment made. 12That submission accords with the provisions of the Act. In accordance with s 322(4), the approved medical specialist declined to make an assessment of the degree of permanent impairment of the defendant's left knee. That assessment remains to be made when the approved medical specialist is satisfied that the impairment is permanent and that the degree of permanent impairment of that knee is fully ascertainable. There is no suggestion that this assessment has as yet occurred. Until it does and a medical assessment certificate is issued in relation to the left knee, which either party disputes and appeals under s 327, the condition of the left knee does not arise for assessment by the Medical Appeal Panel. 13In the December judgment, I concluded that the Appeal Panel's failure to give reasons constituted legal error on the face of the record (see Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372 at [31]); that it might also constitute jurisdictional error (see Campbelltown City Council v Vegan at [121]); and that the decision should be quashed and the matter referred back to the Appeal Panel. 14It is the utility of referring the matter back to the Appeal Panel, which has now been raised. The plaintiff did not dispute that this question could be raised and dealt with at this stage of the proceedings, as the defendant sought to do, but urged that the conclusion reached would be that the Medical Appeal Panel's failure to give reasons was a jurisdictional error, requiring an order that the decision be quashed (see Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597). 15Given the requirements of the Civil Procedure Act 2005 and its emphasis in s 56 on the just, quick and cheap resolution of the real issues in the proceedings, it seems that the relief sought by the plaintiff must be granted, at least in part, given the conclusions reached as to the matters on which the defendant succeeded. However, an order quashing the Appeal Panel's decision ought only to be made, if in truth, any different outcome could result from the Panel's proper application of the true construction of the legislation. 16Given the conclusions reached as to the proper construction of the Act, the result is that the Appeal Panel has already acted on a basis which accorded with that construction. The position of the defendant's left knee does not seem to have stabilised even yet. It has not yet been assessed by a medical assessor. In those circumstances, it is unlikely that any different outcome could result from the matter being referred back to the Appeal Panel. 17In those circumstances there does not seem to be any real utility in referring the matter back to the Panel. It is a costly exercise which ought not to be required, unless that course is unavoidable. That depends on whether, in this statutory scheme, the failure to give reasons amounted to jurisdictional error (see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [34] - [40]). In my view it did not, having in mind this statutory scheme and the nature of the decision in question. The Panel's errors were within jurisdiction, not jurisdictional. 18In Sasterawan v Morris [2008] NSWCA 70 the question of whether inadequacy of reasons constituted an error going to jurisdiction arose to be considered. It was concluded that in the circumstances there arising for consideration, it did not. Reference was made to numerous authorities where questions of this kind have been considered, including Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163 at 177; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56; (2003) 216 CLR 212 at 226; Minister for Immigration and Multicultural and Indigenous Affairs v NBDS [2006] FCA 265 at [23] - [24]; and Rockdale Beef Pty Limited v Industrial Relations Commission of NSW [2007] NSWCA 128 at [81] - [85]. 19Here, the inadequacy of the reasons given were such as to constitute an error of law, but as it happens, the Panel approached its consideration of the appeal before it on a basis which accords with the proper construction of the legislation. In the result, it seems to me that the Panel's decision was given in exercise of its jurisdiction or authority. It was not a decision 'given in a purported and not a real exercise of jurisdiction, leaving the jurisdiction in law constructively unexercised' (see Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420 per Jordan CJ). 20The plaintiff's case on construction of the Act failed. The Appeal Panel's errors were errors within jurisdiction, notwithstanding the failure to give adequate reasons for its decision. In the result, the orders which should be made are a declaration that the Appeal Panel's decision involved error on the face of the record, together with an appropriate order as to costs, but the summons should otherwise be dismissed.

21The usual order as to costs is that they follow the event. While the plaintiff succeeded on some issues, it failed on others. Importantly, while it established that the Appeal Panel had erred in not calling for further submissions on the construction point and in failing to give reasons for that aspect of its decision, it failed on the construction point it pursued. That was the issue which took up the bulk of the time at the hearing and necessitated an adjournment, so that the WorkCover Authority could be given an opportunity to be heard, which then advanced submissions supportive of the defendant's construction of the Act. 22The defendant sought an indemnity costs order in her favour, complaining that the plaintiff's conduct had been presumptuous and contemptuous of its obligations before the Medical Appeal Panel, attempting to hold the Panel to ransom in pursuing its desire for an oral hearing and disregarding its obligation to assist the Panel. It was submitted that the approach adopted had earlier been criticised in Fletcher International Exports Pty Limited v Barrow and in Symbion Health Ltd v Hrouda. The circumstances were argued to be such that the defendant should not suffer as a consequence. 23Given what was observed in these authorities, it seems to me that criticism of the approach adopted by the plaintiff to its pursuit of an oral hearing and its written submissions is warranted. Nevertheless, on appeal it has established relevant failures on the Appeal Panel's part, which may not be overlooked. A costs order is compensatory in nature, not punitive. An indemnity costs order may be made in circumstances where there is relevant misconduct in connection with the conduct of the proceedings, but it is not an order for damages in respect of conduct that gave rise to the proceedings (see Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67] - [70].) 24Whatever view be taken of the plaintiff's approach to the appeal below, there is no suggestion that there was any misconduct on its part in these proceedings. Indeed, the plaintiff succeeded in part. In my view there is nothing in the conduct of these proceedings which would warrant the exercise of a discretion to make an indemnity costs order in favour of the defendant. 25The proper exercise of the costs discretion in the circumstances which have arisen, in my view requires consideration of the fact that the bulk of the hearing was taken up with the question of the proper construction of the legislation. That was the dominant issue in the proceedings, on which the defendant succeeded. As a matter of justice, while the plaintiff would be entitled to its costs of the part of the case on which it succeeded, it ought to pay the defendant's costs in relation to the construction point on which she succeeded. 26It is well settled that where there is a mixed outcome in relation to the various issues raised in the proceedings, the question of apportionment of costs is a matter for the trial judge. The exercise of the costs discretion in such a case depends on matters of impression and evaluation, not mathematical precision (see the authorities discussed by Ward J in McLaughlin v Dungowan Manly Pty Limited [2010] NSWSC 306 at [8] - [43].) 27In the circumstances of this case, it seems to me that a just costs order, reflecting all these considerations, is that the plaintiff bear 70% of the defendant's costs of the proceedings, as agreed or assessed. That properly has regard to the various matters on which the parties respectively succeeded and failed on.

Orders 28For those reasons, I make the following orders:

1. Declare that the decision of the Medical Appeal Panel involved error on the face of the record.
2. Order the plaintiff to bear 70% of the defendant's costs.
3. Otherwise dismiss the 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: 05 April 2012