Tomislav & Ranka Divljak (trading as DTR Ceilings) v Workers Compensation Commission & Ors

Supreme Court of NSW|2018-03-02|Before: Latham J

Solicitors: Gordon Jankov (Plaintiff) NSW Compensation Lawyers (Third Defendant) File Number(s): 2016/197166

Judgment

By an Amended Summons filed 19 February 2018, the plaintiff seeks an order in the nature of certiorari quashing a decision of the Appeal Panel of the Workers Compensation Commission (the second defendant) of 29 March 2016. Alternatively, the plaintiff seeks a declaration setting aside the decision and an order remitting the dispute to the Commission for referral to a differently constituted Appeal Panel for determination.
The proceedings are by way of judicial review of the decision of the Appeal Panel in relation to a medical dispute arising out of an assessment of whole person impairment (WPI) of the third defendant (the worker). An Approved Medical Specialist (AMS) assessed the WPI of the worker resulting from a work-related injury to the worker's spine and digestive system. For the purposes of the assessment, the AMS allowed 1% for injury to the anal region.

The Worker's Claim

The worker suffered an injury in the course of his employment on 21 June 2012. The injury was occasioned to his spine while lifting concrete sheeting. The worker developed a secondary or consequential injury to his digestive tract as a result of the medication prescribed for the primary injury.
On 19 November 2014, the worker made a claim pursuant to s 66 of the Workers Compensation Act 1987 (NSW) (the 1987 Act) relying upon the reports of Dr Dixon, Dr Maniam and Dr Greenberg.
The digestive system complaint was based upon an assessment provided by Dr Greenberg, dated 31 October 2014, of WPI of 2% for the upper gastrointestinal tract according to Table 6.3 of the Guides to the Evaluation of Permanent Impairment of the American Medical Association (AMA5) and 2% WPI for the lower gastrointestinal tract according to Table 6.4 of the AMA5.
Upper digestive tract for the purposes of Table 6.3 is defined as oesophagus, stomach and duodenum, small intestine and pancreas. Lower digestive tract for the purposes of Table 6.4 includes colon and rectum. Anal injuries are addressed separately under Table 6.5.
The employer's insurer obtained an opinion from Dr Garvey, who assessed WPI of 2% with reference to Table 6.3 and WPI of 0% with reference to Table 6.4.
Thus, the dispute which was ultimately referred on 7 October 2015 to the AMS by the Registrar of the Commission (the first defendant) under s 319 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the 1998 Act) centred upon the difference of opinion between Dr Greenberg and Dr Garvey with respect to the WPI assessment for the lower digestive tract.

The AMS Assessment and the Basis of the Appeal

The referral required the AMS to assess the degree of permanent impairment of the worker as a result of the injury, whether any proportion of the impairment was due to a previous injury or pre-existing condition and the extent of that proportion, whether the impairment was permanent and whether the degree of permanent impairment was fully ascertainable. The body parts referred for assessment were the cervical spine, the thoracic spine, the lumbar spine and the digestive system (upper and lower digestive tract): s 319 of the 1998 Act.
The current WorkCover Guides to the Evaluation of Permanent Impairment, read together with the AMA5, required the AMS to assess the digestive system injury in accordance with Chapter 6 of AMA5. That Chapter contains Tables 6.3, 6.4 and 6.5.
Following an examination of the worker on 22 October 2015, the AMS assessed the worker's WPI relating to the upper and lower digestive tract by reference to Tables 6.3 and 6.4 respectively and arrived at an assessment consistent with that of Dr Garvey. However, the AMS went on to deal with the existence of small internal haemorrhoids and assessed impairment of the worker's anal region at 1% by reference to Table 6.5. The AMS issued a certificate to that effect on 2 November 2015.
The employer/appellant asserted that the AMS made a number of errors. They were:- 1. The worker had not made a claim relating to the anal region. 2. The parties were not afforded an opportunity to dispute the assessment under Table 6.5 3. There was no medical dispute between the parties, and therefore before the AMS, relating to an assessment by reference to Table 6.5 4. The evidence did not establish a causal connection between the workplace injury and the condition of the worker's anus. 5. The AMS provided no reasons for such a causal connection. 6. The evidence did not establish that the anal impairment was permanent. 7. The AMS provided no reasons for concluding that the impairment to the anus was permanent. 8. The AMS failed to consider whether a deduction for a pre-existing condition was appropriate, pursuant to s 323 of the 1998 Act.
With respect to (i), (ii) and (iii), the third defendant in these proceedings maintains that the lower digestive tract includes the anus according to 6.3 of Chapter 6 of the AMA5 and that it was not necessary for the worker's claim to articulate specific body parts. It seems to be accepted that there was no opportunity to address the AMS on the assessment under Table 6.5, rather it is submitted that such an assessment was "on the cards" and was within the bounds of the discretion of the AMS. It was further submitted that there was no denial of procedural fairness because the employer had the opportunity of stating its position through the opinion of Dr Garvey. These submissions are addressed more fully below.
In relation to (iv) and (vi), the extent of the evidence before the AMS was that the worker consulted a general practitioner a number of times in 2010 concerning external haemorrhoids, that a colonoscopy on 27 March 2014 detected "simple haemorrhoids", that no rectal examination was carried out on 5 August 2014 by Dr Greenberg, that Dr Greenberg said nothing about the "first degree haemorrhoids" detected by the colonoscopy being causally related to the work injury or to the effects of medication for the spinal pain, and that Dr Garvey's report of 16 December 2014 noted "rectal examination was normal and there were no fissures, fistulas or haemorrhoids and no blood." The AMS took a history from the worker which referred to haemorrhoids occurring intermittently.
In relation to (v), (vii) and (viii), the AMS did not refer to the worker's pre-injury medical history or to Dr Garvey's report for the purposes of the assessment under Table 6.5.
The Registrar referred the appeal to the Appeal Panel pursuant to s 327(4) of the 1998 Act, on the grounds identified by the employer/appellant, namely that the certificate contained demonstrable errors and the assessment was made on the basis of incorrect criteria (s 327(3)).

The Decision of the Appeal Panel

The Appeal Panel's reasons included the relevant factual background. The summary referred to the worker's injury in June 2012 "to his neck and upper back whilst lifting a panel" in the course of his employment as a gyprocker. The worker "subsequently developed gastric problems which are the subject of the referral regarding the digestive system." The referral to the AMS was in relation to "injury to the cervical spine, thoracic spine, lumbar spine and digestive system." ([13] to [16])
Under the heading "Findings and Reasons" ([18] and [19]), the Appeal Panel noted that the appeal is confined to the particular demonstrable errors identified by a party to the appeal (referring to Davies J's consideration of s 328 of the 1998 Act in New South Wales Police Force v Registrar of the Workers Compensation Commission of NSW [2013] NSWSC 1792). The Panel also held that its obligation to provide reasons may require referral to evidence on which findings are based where there are disputes of fact, and that "reasons need not be extensive or provide detailed explanation of the criteria applied by the medical professionals in reaching a professional judgment." This latter reference to the content of its reasons derived from Campbelltown City Council v Vegan [2006] NSWCA 284 (Campbelltown City Council).
One of the AMS members of the Panel re-examined the worker on 8 March 2016. The whole of the report of that examination is set out within the reasons (at [62]). There is no reference within that report to the lower digestive tract or the anal region. Impairment was assessed at 7% for the cervical spine, 0% for the thoracic spine and 5% for the lumbar spine. The Panel adopted the report and recommendations therein (at [63]).
The Panel's reasons addressed the lower digestive tract. It noted that the employer/appellant submitted that the reasons provided by the AMS were inadequate to establish the basis of the assessment and that the gastroenterology opinions did not provide a WPI assessment in relation to the presence of haemorrhoids. It noted that the AMS recorded the fact that there was no evidence of external haemorrhoids and that internal examination was not justified because the worker "had previously undergone a colonoscopy". (This was a reference to the colonoscopy carried out on 27 March 2014.) It noted that the worker's gastroenterologist considered the findings on colonoscopy were normal, notwithstanding the presence of small internal haemorrhoids.
The appellant argued before the Panel that the AMS did not explain how that condition was consistent with the worker's injury, particularly in circumstances where the worker had complained of lower abdominal pain since June 2010 and had consulted his general practitioner in December 2010 in relation to an external haemorrhoid brought on by carpentry work.
The Panel went on to refer to the relevant objective procedures for establishing lower digestive tract impairment and the criteria for rating permanent impairment, according to the relevant Guidelines. The Panel's reasons continued:- 57 The AMS recorded that the worker suffered constipation and a feeling of haemorrhoids coming and going. He noted that colonoscopy was normal apart from a small polyp, that was not related to the subject work injury, and small first-degree haemorrhoids. 58 As there was no objective evidence of any disease or abnormality in the colon or rectum he allocated 0 percent WPI on account of that portion of the lower digestive tract. 59 In regard to the anus he allocated 1 percent WPI and did not make any deductions for any pre-existing condition. 60 It was noted that on 10 December 2010 ... the worker had developed a 2 centimetre external haemorrhoid that subsequently bled and ulcerated. This was almost certainly a thrombosed external haemorrhoid, which is due to a burst blood vessel and not necessarily related to internal haemorrhoids.
The Panel's reasons for the resolution of this issue appear at [61]:- Whilst minds might differ as to whether any whole person impairment should be assessed for first-degree haemorrhoids, as they are frequently completely asymptomatic and are readily treated, we consider that the AMS, in exercising his clinical judgment, was within the bounds of his discretion and did not fall into error.

The Third Defendant's Submissions

The worker submitted that the Panel was entitled to find that no error had been committed by the AMS. The relevant "injury" referred for assessment to the AMS was the lower digestive tract, which included the anus. It was submitted that the application to resolve the dispute, which resulted in the assessment by the AMS, only required the nomination of body parts, that is, the digestive system. Thus, it was said that the worker made an appropriate claim in respect of the lower digestive tract and the AMS was not bound by the classification of the injury adopted by the parties.
This submission somewhat ignores the structure of Chapter 6 of AMA5 for the purposes of assessment and the basis of the worker's claim. As already discussed, a distinction exists for the purposes of medical assessment of WPI between impairment of the colon and rectum on the one hand (Table 6.4), and impairment of the anus on the other (Table 6.5). Dr Greenberg's assessment was only in relation to the colon and rectum; it was that assessment which provided the basis of the worker's claim. The dispute referred to the AMS was only in relation to that claim.
The worker's submissions acknowledge that the AMS was the first to apply Table 6.5 and that this fact gives rise to the question of procedural fairness. However, it is submitted that the complaint as to procedural fairness is really a merits based complaint, in that Dr Greenberg's opinion (the consequential injuries were classified as lower digestive tract) was accepted by the AMS in preference to that of Dr Garvey (the consequential injuries were attributable to irritable bowel syndrome). Therefore, it is said that no practical injustice arises in circumstances where Dr Garvey's opinion was taken into account.
This submission ignores the practical injustice occasioned to the employer who would be required to pay compensation through its insurer on the basis of an assessment by the AMS of which it had no notice, no opportunity to address and no opportunity to rebut by the production of further expert medical opinion: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [37] per Gleeson CJ.
A further oral submission deserves comment. The third defendant's senior counsel referred to Frost v Kourouche [2014] NSWCA 39; 86 NSWLR 214 (Frost) in support of the proposition that it was "on the cards" if not inevitable that the AMS would assess WPI for the digestive tract differently to that which had been undertaken by Dr Greenberg and Dr Garvey. Frost was a case concerning a medical assessment under the Motor Accidents Compensation Act 1999. That legislation provides that a review of an assessment is not confined to that aspect of the assessment alleged to be incorrect, rather it is by way of a new assessment of all matters (at [9]). In that context, the proposition is unsurprising, but it is not applicable to an appeal under a different statutory regime which confines an appeal to the matters in dispute."

The Obligation to Provide Reasons and Procedural Fairness

There is no express statutory obligation upon the Appeal Panel to provide reasons, but as the following passage in the judgment of Basten JA in Campbelltown City Council makes clear, the obligation arises principally out of the judicial nature of the Panel's functions and the statutory context:- 117 In the absence of challenge to the principles established in Soulemezis, it should be accepted that the appeal panel was subject to an implied statutory obligation to give reasons. That conclusion follows from the foregoing analysis of the statutory context and from an understanding of the nature of the functions imposed on the appeal panel. Those functions might not constitute an exercise of judicial power for the purposes of the federal Constitution, but they are functions properly characterised as judicial in nature, for the purposes of determining their incidents. 118 It is not necessary to rely upon the exception permitted by Gibbs CJ in Osmond (at CLR 670; ALR 568) that "in special circumstances natural justice may require reasons to be given". An implied statutory obligation is no doubt informed by requirements of procedural fairness, but more directly depends upon the judicial nature of the function and the specific statutory context, as recognised by Handley JA in Attorney-General (NSW) v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 at 739, a case dealing with the obligation of a costs assessor to give reasons. That is not, of course, to deny the significance of general principles of procedural fairness, as a basis underlying the obligation of a judicial officer to give reasons for decisions.
The Panel's incomplete reference to the content of those reasons according to Basten JA in Campbelltown City Council should be augmented by the following:- 121 Where it is necessary for the panel to make findings of primary fact, in order to reach a particular conclusion as to the existence, nature and extent of any physical impairment, it may be expected that the findings of material facts will be set out in its reasons. Where facts are in dispute, it may be necessary to refer to evidence or other material on which findings are based, but the extent to which this is necessary will vary from case to case. More importantly, where more than one conclusion is open, it will be necessary for the panel to give some explanation of its preference for one conclusion over another. That aspect may have particular significance in circumstances where the medical members of a panel have made their own assessment of the applicant's condition and have come to a different conclusion from that reached by other medical practitioners, as set out in reports provided to the panel. 122 On the other hand, to fulfil a minimum legal standard, the reasons need not be extensive or provide detailed explanation of the criteria applied by medical specialists in reaching a professional judgment: see Soulemezis at 273-274 (Mahoney JA) and 281-282 (McHugh JA). At least, that will be so where the medical science is not controversial: if it is, a more expansive explanation may be required. [Emphasis added.]
Justice Basten's observation, that the implied statutory obligation on the Appeal Panel to provide reasons is informed by the requirements of procedural fairness, is particularly apt in circumstances where the Appeal Panel's reasons do not engage with the argument of a party. If the substantive complaints underpinning the grounds of the appeal are not addressed by the Panel's reasons, not only are the parties unable to discern how those complaints were resolved by the Panel, but a court reviewing the Panel's decision is unable to determine whether it contains an error of law. Inadequacy of reasons of this genus constitute an error of law on the face of the record: Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; 252 CLR 480 (Wingfoot).
The AMS was also obliged to afford procedural fairness "so as to give an opportunity for parties to the underlying question or matter who will be affected by the opinion to supply the [AMS] with material which may be relevant to the formation of the opinion and to make submissions to the [AMS] on the basis of that material.": Wingfoot at [47].
A failure to respond to a substantial, clearly articulated argument relying upon established facts, constitutes a denial of natural justice (procedural fairness) and, in some circumstances, a constructive failure to exercise jurisdiction: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 197 ALR 389.
Gleeson JA in Rodger v De Gelder [2015] NSWCA 211 (Macfarlan and Leeming JJA agreeing) summarised the principles thus:- 94 A failure to accord procedural fairness is a recognised form of jurisdictional error: Kirk v Industrial Relations Commission (NSW) [2010] HCA 1; 239 CLR 531 at [60]. It is susceptible to correction as jurisdictional error: Re Refugee Review Tribunal; Ex parte HB [2001] HCA 34; 179 ALR 513 at [10]. 95 It has also been said where the relevant facts have been clearly established and the reasons show the decision-maker acted on the wrong basis in important respects, the decision-maker has failed properly to exercise their jurisdiction: Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No 2) [2011] FCA 757; 282 ALR 24 at [102]-[103]. Jurisdictional error includes a constructive failure to exercise jurisdiction. A constructive failure to exercise jurisdiction arises when a decision-maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided, or misunderstands the nature of the opinion it is to form: Minister for Immigration v Yusuf [2001] HCA 30 at [41] (Gaudron J).

The Inadequacy of the Appeal Panel's Reasons and Jurisdictional Error

The preamble to the Panel's statement at [61] of its reasons (see [24] above), acknowledges that the assessment of WPI in relation to internal haemorrhoids may be controversial. Notwithstanding that qualification, the sole basis upon which the Panel confirms the certificate of the AMS is that the AMS appropriately exercised his clinical judgment. The preceding paragraphs ([57] to [60]) represent a recitation of what the AMS did, absent any further analysis.
The Panel could not have failed to appreciate that the employer/appellant disputed the existence, nature and extent of the alleged physical impairment to the worker's anus. In those circumstances, its reasons ought to have contained the findings of material facts it found for the purposes of confirming that internal haemorrhoids constituted a secondary injury to the worker, causally related to the spinal injury, that the condition (albeit fluctuating) existed at the time of the AMS assessment, that it was permanent and that no proportion of the impairment was due to a pre-existing condition: Campbelltown City Council at [121].
It must be recognised that compliance with that expectation was difficult, if not impossible, given that the AMS on the Panel did not address the alleged impairment to the lower digestive tract and there was a paucity of evidence before the AMS in October 2015 that the worker was suffering from internal haemorrhoids. The height of the evidence was that 19 months previously the worker had internal haemorrhoids and that the worker had "a feeling" that they were coming and going. Whatever temporal connection there may have been between the worker's spinal injury in June 2012 and the results of the colonoscopy in March 2014, the relevant causal connection could not be reliably established without addressing the worker's medical history in 2010. The employer/appellant's argument in that respect was not effectively met by noting that the presence of an external haemorrhoid was not necessarily related to internal haemorrhoids; that observation leaves open the possibility of a connection.
In short, the Panel was demonstrably unable to explain the pathway by which it arrived at its decision. It was, in effect, driven to a misplaced reliance upon the evaluative and discretionary judgment of the AMS, which was the very focus of the argument advanced before it by the employer/appellant. There was no attempt to explain the resort by the AMS to Table 6.5, in the absence of any notified dispute relating to such an assessment. The Panel's reasons were inadequate and constitute an error of law on the face of the record.
It is also apparent from the foregoing that the Panel failed entirely to engage with the argument of the employer/appellant, beyond simply referring to it in the course of the reasons. At the very least, this constitutes a denial of procedural fairness. In the light of the Panel's comprehensive failure to deal with the real dispute before it, I am also of the view that there has been a constructive failure to exercise jurisdiction.

Orders 1. The decision of the second defendant of 29 March 2016 is quashed. 2. The medical dispute the subject of the referral by the first defendant on 26 February 2016 is remitted to the first defendant for referral to a differently constituted Appeal Panel for determination of the dispute according to law. 3. The third defendant to pay the plaintiff's costs.

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: 28 May 2018

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (10 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (12)