Supreme Court New South Wales Medium Neutral Citation: Fardell v Clinton Industries Pty Ltd [2022] NSWSC 111 Hearing dates: 9 November 2021 Date of orders: 15 February 2022 Decision date: 15 February 2022 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court orders: (1) The decision and statement of reasons of the second defendant dated 16 April 2021 is set aside. (2) The proceedings are to be remitted to the third defendant for determination as according to law. (3) The first defendant is to pay the plaintiff's costs. Catchwords: ADMINISTRATIVE LAW – Judicial review – Workplace injury – Workers injury management and workers compensation act – Assessment of whole person impairment – Section 323 deduction – Jurisdictional error – Error of law – Matters that were not raised at first instance Legislation Cited: Supreme Court Act 1970 (NSW), s 69 Workers Compensation Act 1987 (NSW), s 39 Workers Injury Management and Workers Compensation Act 1998 (NSW), ss 322, 323, 325, 326, 327, 328 Cases Cited: Cole v Wenaline Pty Ltd [2010] NSWSC 526 Elcheikh v Diamond Formwork (NSW) Pty Limited (in liquidation) [2013] NSWSC 365 Insurance Australia Group Ltd t/as NRMA Insurance v Keen [2021] NSWCA 287 Marks v Secretary, Department of Communities and Justice (No 2) [2021] NSWSC 616 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 Moy v Emoleum Services Pty Limited [2015] NSWSC 1062 New South Wales Police Force v Registrar of the Workers Compensation Commission of New South Wales [2013] NSWSC 1792 Ryder v Sundance Bakehouse [2015] NSWSC 526 Sleiman v Gadalla Pty Ltd [2021] NSWCA 236 Vegan v Campbelltown City Council (2006) 67 NSWLR 372 Vitaz v Westform (NSW) Pty Ltd [2011] NSWCA 254 Category: Principal judgment Parties: Ian Fardell (Plaintiff) Clinton Industries Pty Ltd (First Defendant) Catherine McDonald, Dr Drew Dixon and Dr J Brain Stephenson in their capacity as a Medical Review Panel appointed by the third defendant (Second Defendant) The President of the Personal Injury Commission of NSW (Third defendant) Representation: Counsel: B McManamey (Plaintiff) P Stockley (First defendant) Solicitors: McIntosh McPhillamy & Co (Plaintiff) Stephen Lee Legal (First Defendant) File Number(s): 2021/174578 Publication restriction: Nil Judgment 1. HER HONOUR: This is a judicial review of the decision of an Appeal Panel in relation to a s 323 deduction under the Workers Injury Management and Workers Compensation Act 1998 (NSW) ("Workplace Injury Act"). 2. The plaintiff is Ian Fardell. The first defendant is Clinton Industries Pty Ltd ("Clinton Industries"), the plaintiff's employer. The Second defendant is an Appeal Panel constituted by Catherine McDonald and Drs Drew Dixon and J Brian Stephenson ("the Appeal Panel"). The third defendant is the President of the Personal Injury Commission of NSW. The second and third defendants filed submitting appearances. The parties relied on a joint court book ("CB"). 3. By way of summons filed 17 June 2021 ("the summons") the plaintiff relevantly seeks (CB 2): 1. a declaration pursuant to s 69 of the Supreme Court Act 1970 (NSW) ("Supreme Court Act") that the decision and the statement of reasons for decision issued by the second defendant on 16 April 2021 and amended on 19 April 2021 is void and of no effect; 2. an order setting aside the decision and the statement of reasons for decision issued by the second defendant on 16 April 2021 and amended on 19 April 2021; and 3. an order that the matter be remitted to the second defendant and/or third defendant to be determined according to law. Background 1. On 30 March 1999, the plaintiff suffered an injury to his back while in the course of his employment with Clinton Industries. The injury occurred when the plaintiff picked up a piece of quarter-inch pipe from a low rack. He felt severe pain in his lower back which radiated down his leg. An MRI performed on 3 May 2000 disclosed a left posterior disc protrusion at L4/5. 2. The plaintiff came under the care of Specialist Orthopaedic Surgeon, Dr Robert Kuru, who performed disc replacement surgery on 19 April 2004. 3. On 24 September 2007, the plaintiff was examined by Dr Bosanquet at the request of Cambridge Integrated Services Australia (at that stage, the workers compensation scheme agent acting on behalf of Clinton Industries): CB 52. In his report dated 2 October 2007, Dr Bosanquet assessed a 24% whole person impairment ("WPI") and made a 2/3rds deduction pursuant to s 323 of the Workplace Injury Act: CB 59. Dr Bosanquet attributed this deduction to a pre-existing condition that afflicted the plaintiff: CB 55. The pre-existing condition is described by Dr Bosanquet as having occurred in 1989 when the plaintiff was "working as an auto electrician, and suffered back pain which showed a disc rupture at L4/5 and he had a laminectomy": CB 56. No further information is provided regarding the pre-existing injury. 4. On 20 March 2017, the plaintiff was seen again by Dr Bosanquet: CB 60. He again assessed the plaintiff's WPI at 24%: CB 63. He explained that this was on the basis that the plaintiff had undergone disc replacement surgery. However, on this occasion, Dr Bosanquet made a 1/10th deduction pursuant to s 323 of the Workplace Injury Act. He said (CB 63): "he has had a previous laminectomy at L4/5 but that is not part of this claim. I have deducted 10% due to those pre-existing changes, leaving a 22% whole person impairment as a result of the injury on 30 March 1999." 1. Clinton Industries requested a supplementary report from Dr Bosanquet following his 20 March 2017 assessment: CB 65. Clinton Industries queried Dr Bosanquet's assessment of a 1/10th deduction and requested an amended report with the appropriate deduction for his previous injury: CB 65-7. 2. In his supplementary report dated 29 March 2017, Dr Bosanquet explained that he had made a 1/10th deduction due to the plaintiff's pre-existing impairment, applying clause 1.28 of the NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment 4th ed, which states (CB 67): "For the injury being assessed, the deduction is 1/10th of the assessed impairment, unless that is at odds with the available evidence." Dr Bosanquet went on to explain that he could not say categorically that the current impairment was greater as a result of the prior factor – that is, the laminectomy at L4/5 as being a cause for the spinal fusion: CB 67. He stated that many people have a spinal fusion without a prior laminectomy. He also said that in his opinion there is no evidence indicating that the prior factor caused or contributed to the impairment based on a reasonable probability greater than 50% likelihood: CB 67. He was not aware of evidence indicating this degree of certainty. He thus maintained his 1/10th deduction: CB 67. 3. On 19 April 2017, Clinton Industries again wrote to Dr Bosanquet pointing out that in his 30 September 2007 assessment of the plaintiff, he had apportioned 2/3rds of the impairment to the previous injury. Dr Bosanquet replied (CB 65): "Having made that decision, I will continue with that apportionment. Thus, his whole permanent impairment of 24% is to have 2/3rd deducted, i.e. 16%, leaving 8% whole person impairment as a result of the injury of 30 March 1999. With regards to the Assessment for Permanent Impairment, he has a 10% impairment of his back as a result of the injury on the 30 March 1999. I trust this is the information you require." 1. On 6 March 2018, the plaintiff was seen by Dr Negus: CB 72. Dr Negus considered that the plaintiff had suffered an L4/5 disc injury, leading to disc replacement surgery: CB 78. While he did not think that the plaintiff had reached maximum medical improvement, he made an assessment of WPI at that time. He assessed the plaintiff as Diagnosis Related Estimate ("DRE") Category IV, which equates to 20% WPI, as he had had a disc replacement surgery: CB 79. To this, he added 2% for restriction in activities of daily living and 3% because of residual radicular symptoms. This combined to 24% WPI: CB 79. Dr Negus made a 10% deduction pursuant to s 323 of the Workplace Injury Act. His reasons were "he has had previous spinal surgery at the L4/5 level and was not pain-free." This resulted in Dr Negus calculating the WPI of the plaintiff at 22%: CB 79. 2. On 4 March 2020, proceedings were commenced in the Workers Compensation Commission. The proceedings sought an assessment as to whether the degree of permanent impairment is more than 20% of the purposes of s 39 of the Workers Compensation Act 1987 (NSW) ("Workers Compensation Act"). The matter was referred for assessment by an Approved Medical Specialist. The relevant legislation 1. The relevant provisions of the Workplace Injury Act read: "322 Assessment of impairment (1) The assessment of the degree of permanent impairment of an injured worker for the purposes of the Workers Compensation Acts is to be made in accordance with Workers Compensation Guidelines (as in force at the time the assessment is made) issued for that purpose. (2) Impairments that result from the same injury are to be assessed together to assess the degree of permanent impairment of the injured worker. (3) Impairments that result from more than one injury arising out of the same incident are to be assessed together to assess the degree of permanent impairment of the injured worker. Note— Section 65A of the 1987 Act provides for impairment arising from psychological/psychiatric injuries to be assessed separately from impairment arising from physical injury. (4) A medical assessor may decline to make an assessment of the degree of permanent impairment of an injured worker until the medical assessor is satisfied that the impairment is permanent and that the degree of permanent impairment is fully ascertainable. Proceedings before a court or the Commission may be adjourned until the assessment is made. 323 Deduction for previous injury or pre-existing condition or abnormality (1) In assessing the degree of permanent impairment resulting from an injury, there is to be a deduction for any proportion of the impairment that is due to any previous injury (whether or not it is an injury for which compensation has been paid or is payable under Division 4 of Part 3 of the 1987 Act) or that is due to any pre-existing condition or abnormality. (2) If the extent of a deduction under this section (or a part of it) will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction (or the relevant part of it) is 10% of the impairment, unless this assumption is at odds with the available evidence. ... 325 Medical assessment certificate (1) The medical assessor to whom a medical dispute is referred is to give a certificate (a medical assessment certificate) as to the matters referred for assessment. (2) A medical assessment certificate is to be in a form approved by the President and is to— (a) set out details of the matters referred for assessment, and (b) certify as to the medical assessor's assessment with respect to those matters, and (c) set out the medical assessor's reasons for that assessment, and (d) set out the facts on which that assessment is based. … 326 Status of medical assessments (1) An assessment certified in a medical assessment certificate pursuant to a medical assessment under this Part is conclusively presumed to be correct as to the following matters in any proceedings before a court or the Commission with which the certificate is concerned— (a) the degree of permanent impairment of the worker as a result of an injury, (b) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, (c) the nature and extent of loss of hearing suffered by a worker, (d) whether impairment is permanent, (e) whether the degree of permanent impairment is fully ascertainable. (2) As to any other matter, the assessment certified is evidence (but not conclusive evidence) in any such proceedings. 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 a medical assessor 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— … (d) the medical assessment certificate contains a demonstrable error. (4) An appeal is to be made by application to the President. The appeal is not to proceed unless the President is satisfied that, on the face of the application and any submissions made to the President, at least one of the grounds for appeal specified in subsection (3) has been made out. … 328 Procedure on appeal (1) An appeal against a medical assessment is to be heard by an Appeal Panel constituted by 3 persons chosen by the President as follows— (a) 2 medical assessors, (b) 1 member of the Commission who is a member assigned to the Workers Compensation Division of the Commission. (2) The appeal is to be by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made. … (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. …" The law 1. Both parties referred to the decision of Cole v Wenaline Pty Ltd [2010] NSWSC 78 ("Cole"). In Cole, Schmidt J was considering a case with similar facts. In that matter, the worker had initially suffered an injury to his back in 1976 for which he had undergone surgery in the form of an L4/5 discectomy. In October 2005, he suffered an injury at work while he was maneuvering a 44-gallon drum of oil and fuel. As a result of that Injury, the worker underwent a further discectomy at the same level as the previous surgery. The majority of an Appeal Panel had made a deduction of one half pursuant to s 323 of the Workplace Injury Act. In granting relief, Her Honour described how the Appeal Panel incorrectly applied a section 323 deduction at [28]-[30]: "[28] It is apparent from the way in which the majority reasoned to its conclusion, that it proceeded on the basis of an assumption. The assumption was that even though the treatment of the first injury to the plaintiff's spine in 1976 had succeeded, with the results to which the dissenting member of the panel referred, the very fact of the existence of that prior injury, 'irrespective of outcome', resulted in an impairment which must have contributed to the impairment which arose after the second injury. As the majority explained, it was of the view, 'hypothetically', that if the plaintiff had been examined before the second injury, given his history, he would have been assessed as suffering from a 10% of whole person impairment, under AMA 5. [29] The section is directed to a situation where there is a pre-existing injury, or pre-existing condition or abnormality. For a reduction to be made from what has been assessed to have been the level of impairment which resulted from the later injury in question, a conclusion is required, on the evidence, that the pre-existing injury, pre-existing condition or abnormality caused or contributed to that impairment [30] Section 323 does not permit that assessment to be made on the basis of an assumption or hypothesis, that once a particular injury has occurred, It will always, Irrespective of outcome', contribute to the impairment flowing from any subsequent injuries. The assessment must have regard to the evidence as to the actual consequence of the earlier injury, pre-existing condition or abnormality. The extent that the later injury was due to the earlier injury, pre-existing condition or abnormality must be determined. The only exception is that provided for in section 323(2), where the required deduction 'will be difficult or costly to determine'." 1. In Cole, Her Honour further explained the correct legal reasoning to be observed when applying a deduction under s 323 of the Workplace Injury Act when she said at [38]: "[38] What s 323 required, however, was that the evidence be considered, so that it could be determined, firstly, what the level of impairment after the second injury was. Secondly, whether a proportion of that impairment was due to the first injury. Thirdly, what that proportion was. Undoubtedly in undertaking this exercise, the medical members of an Appeal Panel must utilise their medical judgement, knowledge and experience. Nevertheless, all stages of the statutory exercise must be undertaken in the light of the evidence and without the making of assumptions not provided for by the section." 1. In Elcheikh v Diamond Formwork (NSW) Pty Limited (in liquidation) [2013] NSWSC 365 ("Elcheikh"), again, Schmidt J considered the application of s 323 of the Workplace Injury Act and confirmed that a deduction under that section involves a three step process. At [126] it reads: "[126] As discussed in Cole v Wenaline Pty Limited at [30], in the case of a workplace injury caused by an exacerbation or acceleration of a pre-existing condition, what must be determined by a medical specialist under s 323 is: Firstly, what the extent of the resulting impairment is. Secondly, whether the pre-existing condition contributed to the impairment. Thirdly, if it did, what proportion of the impairment was due to the pre-existing condition." 1. In Elcheikh, Her Honour also considered what reasons were required in circumstances where the conclusion was reached that the deduction was greater than 10%. Her Honour said at [139]-[141]: "[139] In this case the medical specialist was clearly of the view, as I have said, that the major cause of the impairment was the underlying Scheuermann's disease. It must be accepted that in coming to a conclusion that the deduction should be 50%, it was not necessary for the medical specialist to refer expressly to the 10% deduction specified bys 323(2) and Guideline 1.52. Implicit in his conclusions was the view that the evidence was at odds with a 10% deduction. [140] Given the parties' competing cases, what was required, however, was an explanation of what evidence was accepted or preferred in reaching the conclusion that the deduction should be 50%. The simple statement that the medical specialist did not accept the reasoning of one expert and that he agreed with that of another, did not comply with the obligation to give reasons for the conclusions reached. Some further explanation had to be given. Nor was it sufficient to state that it was to give Mr Elcheikh the benefit of the doubt as to the contribution of his work to his impairment, to explain why a deduction of 50% was arrived at. [141] On its face this involved a departure from the statutory scheme, which itself gives workers 'the benefit of the doubt' in the case of difficulty in establishing contribution of a pre-existing condition to impairment resulting from a work injury. The statutory assumption provided bys 323(2) is that the contribution was 10%. That assumption can be displaced by evidence which the medical specialist considers is at odds with the assumption. In the event of a dispute over such evidence, the medical specialist must identify the evidence which is accepted or preferred and explain why a particular deduction has resulted." 1. The parties also referred to Ryder v Sundance Bakehouse [2015] NSWSC 526 ("Ryder"). In Ryder, Campbell J provided further explanation of the s 323 deduction (at [45]): "[45] What section 323 requires is an enquiry into whether there are other causes, previous injury, or pre-existing abnormality of an impairment caused by a work Injury. A proportion of the Impairment will be due to the pre-existing abnormality (even if that proportion cannot be precisely identified without difficulty or expense) only if it can be said that the pre-­existing abnormality made a difference to the outcome In terms of the degree of impairment resulting from the work injury. If there is no difference in outcome, that Is to say, if the degree of impairment is not greater than it otherwise would have been as a result of the injury, It Is Impossible to say that a proportion of It is due to the pre-existing abnormality. To put It another way, the panel must be satisfied that but for the pre-existing abnormality, the degree of impairment resulting from the work injury would not have been as great." The decision of the AMS dated 27 October 2020 1. On 27 October 2020, in accordance with the referral, the plaintiff was seen by an Approved Medical Specialist, Dr Tim Anderson, Occupational Therapist, ("AMS") and a medical assessment certificate was issued on that date: CB 159. 2. Under the heading 'Summary of injuries and diagnoses' the AMS stated (CB 162): "Mr Fardell gives a history of severe low back pain which started in late 1999 when he was standing up from bending down to pick up a relatively light weight component. It was identified that there was discogenic pathology at the L4/5 level. This was managed by a disc replacement several years later under the care of specialist spinal surgeon, Dr Robert Kuru. Later there was a further deterioration. There was a trial of a spinal cord stimulator which initially seemed to be quite successful, but later when it was permanently implanted, was very much less effective and has subsequently been completed removed. He continues with gross dysfunction in his lower back with radiculopathy down the left leg." 1. The AMS assessed a 24% WPI: CB 163. He explained that the plaintiff had a disc replacement at the L4/5 articulation: CB 163-4. This placed him in DRE Lumbar Category IV. He allowed a further 2% for activities of daily living and an additional 3% because of the continuing effect of radiculopathy. This combined to a total of 24%: CB 164. 2. The AMS went on to make a deduction pursuant to s 323 of the Workplace Injury Act of 1/3rd. His reasoning for the deduction was (CB 164): "In 1999, Mr Fardell had a discectomy at the L4/5 articulation. After this more recent event, the specific clinical management was a disc replacement. This is a more substantial clinical intervention. With the extensive pre-existing condition from 1989, there would reasonably be a significant deduction. In evaluating the pre-existing condition with the disc excision with the much more recent event where there was a disc replacement, I believe that there should be a 1/3rd deduction for the pre-existing condition and that the event of 30/03/99 would constitute two thirds of the current impairment." Appeal against the decision of the AMS 1. On 23 February 2021, the plaintiff lodged an appeal pursuant to s 327 of the Workplace Injury Act: CB 166. The appeal did not dispute the overall assessment of 24% WPI. The plaintiff challenged the deduction pursuant to s 323 of the Workplace Injury Act. The plaintiff submitted that the Medical Assessment Certificate contains a demonstrable error. 2. In his submissions to the Appeal Panel, the plaintiff stated at [18]-[19], [21] and [23] (CB 175-6): "[18] As can be seen from the AMS' reasons, he has not given any consideration to the crucial question of whether the previous injury or abnormality has in fact contributed to the current level of Impairment. He has simply stated that there is a pre-existing condition and therefore there should be a significant deduction, By approaching the matter In that way, the AMS has made the same error as the majority of the appeal panel in Cole. [19] At no stage has the AMS addressed the question of whether the previous back Injury has meant that there is now a greater impairment than would have otherwise been the case. … [21] The histories show that following the earlier injury the Appellant had some recurrent back pain however there is no evidence of any radiculopathy since the time of the previous surgery. The radiculopathy appears upon the happening of the subject Injury being the L4/5 disc prolapse. As such, the radiculopathy is also a consequence of the subject Injury. The 3% modifier In respect of the residual radiculopathy applies because of the continuing effects of the 1999 Injury, Again, the assessment is not made any greater because of the prior surgery which has not contributed to the radiculopathy. In fact, the nature of the prior surgery is such as to have removed the potential source of any radiculopathy prior to the 1999 Incident. After the incident, the radiculopathy was caused by the new disc protrusion. … [23] If the appeal panel is against that conclusion, the result is to apply the terms of section 323(2) and make a deduction of 1/10th. There is no basis for making any greater deduction." 1. On 11 January 2021, Clinton Industries filed a notice of opposition: CB 177. Clinton Industries agreed with the plaintiff's statement concerning the applicable law and made submissions about the nature and extent of the pre-existing condition. Clinton Industries asserted at [24], [28] and [29] as follows (CB 183-4): "[24] In the Respondent Submissions the evidence is compelling to confirm an ongoing lumbar spine pain and radiculopathy subsequent to the surgery in August 1989. The respondent submits that the appeal panel would be comfortably satisfied that there was a pre-existing injury and impairment prior to the 1999 incident. This was a view of the AMS. … [28] It is submitted on behalf of the respondent that the evidence in the Response and the Application vividly point towards injury and impairment being in existence prior to the subject incident on 30 March 1999. [29] The AMS has correctly acknowledged at paragraph 11 of the MAC the histories and findings of treating and qualified specialists following the 1989 surfacing of back pain, and has described that clinical condition of the appellants lumbar spine as an "extensive pre-existing condition from 1989." The AMS has stated that the more recent surgical procedure in April 2004 was more substantive than the discectomy at the L4/5 articulation in 1989 but has nevertheless correctly assessed that the pre-existing condition gave rise to impairment which he has assessed at 1/3rd for the purpose of the deduction under section 232 of the WIM ACT 1998." The Appeal Panel's decision dated 19 April 2021 1. On 16 April 2021, the matter came before the Appeal Panel who gave written reasons for their decision: CB 185. The Appeal Panel's reasons were amended on 19 April 2021: CB 192. 2. Under the heading "submissions" the Appeal Panel summarised the parties submissions as follows (CB 193): "[13] Both parties made written submissions. They are not repeated In full, but have been considered by the Appeal Panel. [14] In summary, Mr Fardell submitted, through his solicitor Ms Swan, that the AMS was in error to deduct one third of the assessment under s 323. He agreed that the assessment of 24% was appropriate. He quoted from the decisions of Cole v Wenaline PtyLimited (Cole) and Ryder v Sundance 'Bakehouse [Ryder) to argue that the AMS had not considered if the previous injury. In fact contributed to the current level of impairment. He submitted that the injury suffered was an L4/5 disc protrusion for which he had undergone disc replacement and that he would have been assessed in DRE Lumbar Category IV whether he had prior surgery or not. He said there was no evidence of radiculopathy following the first operation and that the radiculopathy suffered was a result of the new disc protrusion, Mr Fardell submitted that there should be no deduction under s 323 so that his WPI would be more than 20%. [15] In submissions prepared by its solicitor, Mr Lee, Clinton said that there was evidence that Mr Fardell suffered back pain and radiculopathy after the surgery. In 1989 which prevented him from continuing to work as an auto-electrlclan and caused him to retrain. Clinton noted that when Davidson CCJ made an award In respect of permanent impairment of the back in 2001, his Honour deducted two thirds in respect of the 1989 injury. The contemporaneous medical evidence showed that Mr Fardell complained of radiculopathy in the period before the second Injury and Clinton submitted that the AMS had not made a demonstrable error." 1. It then summarised the decision of the AMS and reproduced at [22]-[23] the AMS' reasons for the s 323 deduction (CB 195): "[22] The AMS gave reasons for the deduction under s 323: "In 1989, Mr Fardell had a discectomy at the L4/5 articulation, After this more recent event, the specific clinical management was a disc replacement, This is a more substantial clinical Intervention, With the extensive pre-existing condition from 1989, there would reasonably be a significant deduction, In evaluating the pre-existing condition with the disc excision with the much more recent event where there was a disc replacement, I believe that there should be a one-third deduction for the pre­existing condition and that the event of 30/03/99 would constitute two-thirds of the current impairment," [23] After making a one-third deduction, the AMS assessed 16% WPI." 1. Next the Appeal Panel turned its attention to the medical evidence. Under the heading 'Consideration' the Appeal Panel set out ss 323(1) and (2) of the Workplace Injury Act, summarised Cole and observed (CB 197): "[42] Mr Cole's history was quite different to that of Mr Fardell, He underwent an L5/S1 discectomy as a result of an injury In 1976. He had an excellent recovery and returned to full labouring duties without symptoms until another injury in 2005. After recovering from the first injury, Mr Cole has no impact on his activities of daily living and no radiculopathy. In a majority decision, the medical member of the panel proceeded on the assumption that the fact of the first injury, irrespective of outcome must have contributed to the Impairment. Her Honour's statements were made in that context." 1. At [44] to [48] the Appeal Panel concluded (CB 198): "[44] Mr Fardell argued that the AMS had not addressed the question of whether the previous impairment meant that there was now a greater impairment. It is clear that he considered it did, The AMS gave clear and concise reasons for the deduction he made and was not required to provide further detail, [45] In Bojko v ICM Property Service Pty Ltd [2009] NSWCA 175, Handley AJA said (at [39]) that the worker's argument: "…involved a hyper-critical approach to the reasons of the Panel which is contrary to authority and ignores the presumption of regularity which attends administrative action. The correct approach Is that mandated by the joint judgment In Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6,185 CLR 259,272 which approved the following statement of principle in a decision of the full Federal Court: "…a court should not be concerned with looseness in the language nor with unhappy phrasing of the reasons of an administrative decision-maker..,, the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error,'" [46] The Guidelines provide in paragraph 4.38 that the impairment from disc replacement surgery is equated to a spinal fusion, Assessment in DRE Lumbar Category IV was appropriate. Based on the history provided and the observations on the day made by the AMS, the assessment of 24% WPI was appropriate as was the deduction of one-third, [47] It is unlikely that disc replacement surgery would have been offered in 2004 in the absence of previous surgery. As the AMS said, it is a more substantial intervention. He identified that the pre-existing condition was extensive." [48] The medical reports in the period between the two operations confirm that the pre-existing condition was extensive. Mr Fardell was unable to continue working as an auto-electrician and was retrained. He continued to complain of back pain and Dr Evans recorded significant radicular symptoms In 1996, confirmed by Dr Chan in 1998. Dr Negus recorded that he was never pain free. Those factors are relevant to the determination that the surgery impairment resulting from the injury in 1999 was greater because of the impairment resulting from the previous injury." Grounds of judicial review 1. For the purposes of this judgment, Grounds 2(a)-(f) as set out in the summons will be referred to as Grounds (1)-(6). They are as follows (CB 4-5): 1. the Appeal Panel erred in point of law or committed jurisdictional error when it held that the Approved Medical Specialist had given reasons why the previous injury had resulted in a greater impairment than would otherwise had been the case; 2. the Appeal Panel erred in point of law or committed jurisdictional error when it held that the deduction the Approved Medical Assessor had correctly applied the law when considering a s 323 deduction; 3. the Appeal Panel erred in point of law or committed jurisdictional error when it considered that the appropriateness of a deduction pursuant to s 323 of the Workplace Injury Act can be illustrated by calculating the pre-existing impairment and assuming this equated to the extent of a deduction; 4. the Appeal Panel erred in point of law or committed jurisdictional error when it failed to properly consider whether the pre-existing condition in fact contributed to the matters relevant to an assessment of whole person impairment; 5. the Appeal Panel erred in point of law or committed jurisdictional error when it considered that it was relevant that it was unlikely that disc replacement surgery would have been offered in the absence of the pre-existing condition when this had not been submitted by Clinton Industries and for which there was no evidence; and 6. the second defendant erred in point of law or committed jurisdictional error when it failed to afford the plaintiff procedural fairness by considering that disc replacement surgery would not have been offered in the absence of the previous surgery when this had not been submitted by Clinton Industries and without giving the plaintiff an opportunity to be heard. 1. From my reading of these grounds of review, it would appear that Judicial Grounds (1)-(4) set out strikingly similar arguments. In fact, each of these 4 grounds of judicial review concern the Appeal Panel's application of s 323 of the Workplace Injury Act, although expressed in 4 different ways. It would also appear that the plaintiff, in the drafting of these grounds, has failed to identify, with the necessary precision, the distinction between error on the face of the record and jurisdictional error. This approach is similar to that which was negatively received by Leeming JA (with whom Basten JA and Simpson AJA agreed) in Insurance Australia Group Ltd t/as NRMA Insurance v Keen [2021] NSWCA 287 at [25]-[26]. 2. The distinctions between jurisdictional error and error on the face of the record were recently emphasised by Leeming JA (with whom Gleeson and Payne JJA agreed) in Sleiman v Gadalla Pty Ltd [2021] NSWCA 236, where His Honour stated at [20]: "[20] It may assist other litigants invoking this Court's supervisory jurisdiction to observe the following: (1) The principal bases of review of administrative decision-making in this Court's supervisory jurisdiction are jurisdictional error and error of law on the face of the record. (2) Jurisdictional error cannot be defined with complete precision, but a useful summary may be found in the joint judgment of Basten, Ward and McCallum JJA in Bangura v Director of Public Prosecutions (NSW) [2020] NSWCA 138 at [13]: "Jurisdictional error arises where the decision-maker has misunderstood the limits of his or her legal authority or has otherwise acted outside the scope of that authority, or failed to exercise the powers conferred by that authority. A failure to accord a party procedural fairness in a material respect will constitute jurisdictional error, because procedural fairness is an essential characteristic of the exercise of judicial power, being the power exercised by the District Court judge in the present case." (3) Error of law may be more familiar, but it shares with jurisdictional error a similar definitional challenge. Distinguishing between questions of law and questions of fact may not be easy, because "no satisfactory test of universal application has yet been formulated": Director of Public Prosecutions (Cth) v JM (2013) 250 CLR 135; [2013] HCA 30 at [39]. The absence of novelty in that statement may be seen from a passage in Holdsworth's History of English Law, first published precisely one century ago, to "the debatable boundary line between law and fact" (see now W Holdsworth, A History of English Law (7th ed, 1956) Vol 1, p 298). Nonetheless, decisions which turn on the construction of legislation, or that are made on a basis for which there is no evidence, are common examples of errors of law. (4) Not only do the two bases of judicial review differ in their substance, but the material which may be deployed to establish them differs. The only practical restriction upon the evidence able to be deployed to establish jurisdictional error is likely to be relevance, in accordance with s 56 of the Evidence Act 1995 (NSW). In contrast, any alleged error of law must be apparent on the face of the "record". The term "record" is narrowly circumscribed, although in the case of a decision by the court or tribunal includes its reasons: Supreme Court Act 1970 (NSW), s 69(4), overturning the result reached in Craig v State of South Australia (1995) 184 CLR 163; [1995] HCA 58, the background may be seen in Kriticos v State of New South Wales (1996) 40 NSWLR 297 at 299-301 and in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4 at [62]-[78]. …" 1. In any event, I will summarise the plaintiff's overlapping arguments in Judicial Grounds (1)-(4). I will then address Judicial Grounds (1)-(4) together followed by my resolution. Judicial Grounds (1)-(4) – Section 323 deduction The plaintiff's submissions 1. The plaintiff's argument comprised within grounds (1)-(4) of the Judicial Review are that the Appeal Panel erred in law and committed jurisdictional error when it held that the AMS had correctly applied the law when considering a s 323 deduction under the Workplace Injury Act. 2. The plaintiff referred to the AMS's reasoning, at [11] of the Medical Assessment Certificate, where it was noted that the plaintiff had a discectomy at the L4/5 articulation in 1989. There the AMS stated that after the more recent event, the specific clinical management was a disc replacement and observed that this was a more substantial clinical intervention than the discectomy. His only reasoning was "with the extensive pre-existing condition from 1989, there would reasonably be a significant deduction." 3. The plaintiff noted that the AMS did not give any reasons to explain why or how the pre-existing condition from 1989 contributed to the impairment that was being assessed in October 2020. This was in circumstances where the AMS had before him the reports of Dr Bosanquet, particularly the report of 29 March 2017 where he had applied the correct test and had opined that he could not say that the current impairment was greater than it otherwise would have been and there was no evidence indicating that a prior factor caused or contributed to the impairment. 4. In the plaintiff's submission, in those circumstances the AMS was required to give reasons explaining how the pre-existing condition contributed to the current impairment and giving reasons why he disagreed with the differing opinions expressed by Dr Bosanquet. 5. At the hearing in this Court, Counsel for the plaintiff explained that this constituted a failure of the AMS to set out steps two and three of the legal test set out by Schmidt J in Cole (T10.5-35): "Now that is the core of our complaint because he simply hasn't taken the reasoning through steps 2 and 3 as set out by Justice Schmidt. He hasn't told us, "Yes, I have a pre‑existing condition but why does that contribute to a current impairment, a pre‑existing condition that was identified as a discectomy? I have a current condition as assessed by reason of a disc replacement and the two don't necessarily meet." In many respects it is very similar to the circumstance in Cole which was that the plaintiff in Cole had 20 years previously had a discectomy or laminectomy, the L4/5 again, and then many years later had the subsequent injury, further surgery and the medical members of the Appeal Panel made a deduction on the basis of, "Well, you have had this discectomy before, it must be a deduction", without explaining the steps that her Honour described on the basis of an assumption or hypothesis." … So the complaint that was taken to the Appeal Panel, what was in a sense that the assessor has simply not carried out the statutory task of making a s 323 deduction. [The AMS] had identified a pre‑existing condition but had not explained as to how it contributes to the assessment and if the deduction is not 10 percent, then one is required to explain why it is not 10 percent and why you arrive at that particular number." 1. The plaintiff submitted that the Appeal Panel also failed to address this aspect of the plaintiff's case noting its reasoning at [44] when it said: "Mr Fardell argued that the AMS had not addressed the question of whether the previous impairment meant there was now a greater impairment. It is clear that he considered it did. The AMS gave clear and concise reasons for the deduction that he made and was not required to provide further details." 1. The plaintiff submitted that the Appeal Panel did not address the question of whether the AMS had properly applied the test set out by Schmidt J in Cole and Elcheikh. It did not identify where the AMS had found that the previous condition had meant that there was now a greater impairment and it did not identify where the AMS had found or explained that there was a causal connection such that it could be said that part of the current impairment results from the pre-existing condition. The AMS had only said that the disc replacement was a more substantial clinical intervention than a discectomy. The approach adopted by the AMS was merely a comparison between a disc excision and a disc replacement as a mode of clinical intervention. 2. The plaintiff noted that the Appeal Panel sought to support the decision of the AMS at [49] of its reasons. It said that the appropriateness of the deduction can be illustrated by considering the likely assessment following the surgery in 1989. It said that based on the material in the file that, assuming a laminectomy had been undertaken anytime during the intervening period, the plaintiff would have probably been assessed in DRE Lumbar Category II with 5% WPI with the addition of 2 or 3% for the impact on activities of daily living, resulting in assessment of 7 or 8% WPI, which equates to about 1/3rd of the current assessment. 3. The plaintiff submitted that to the extent that the Appeal Panel relied upon this reasoning, it was in error. It had been clearly established in Cole that a deduction is not to be made by way of a mere assessment of the impairment that resulted from the previous injury. It was irrelevant to ask the hypothetical question of "what was the impairment pre-existing". This was the very error that was made by the medical members of the appeal panel in Cole, where the medical members had based their opinion upon the fact that the plaintiff in that case would have been DRE Lumbar Category Ill as a result of the previous discectomy. 4. In the plaintiff's submission, what was required was an analysis of whether and how the previous injury contributed to the current impairment. That question is not answered by merely doing an assessment of the impairment resulting from the previous injury. The plaintiff referred to the decision of Simpson AJ in Marks v Secretary, Department of Communities and Justice (No 2) [2021] NSWSC 616 in which Her Honour held that Guideline 11.10 of the Workers Compensation Guidelines, with its focus on pre-injury level of functioning, was inconsistent with s 323(1) of the Workplace Injury Act and invalid. To the extent that the Appeal Panel was of the view that the appropriate deduction was to be measured by making a separate assessment of an impairment resulting solely from the previous injury, it was acting contrary to the law and therefore taking into account an irrelevant consideration. To that extent, it was making an error of law on the face of the record. 5. The plaintiff also referred to Moy v Emoleum Services Pty Limited [2015] NSWSC 1062 ("Moy"), in which Davies J held that it was an error of law for an Appeal Panel to fail to properly consider the application of s 323(2) of the Workplace Injury Act. His Honour said that the panel's reasoning of "it would simply be at odds with the evidence to assume that it is 10%" was not adequate. His Honour said at [57]: "Further, recognising that s 323(2) had at least to be considered, the Panel said only "it would simply be at odds with the evidence to assume it is 10%". The evidence is not identified, nor is it said how that evidence would mean that 10% is not appropriate, nor how 4/5 was appropriate." 1. In the plaintiff's contention the Appeal Panel repeated the error which had been made by the AMS. The AMS had not carried out any of those steps, and there had been no proper consideration of this question by the AMS. All that the AMS had said when considering the impairment assessed by Dr Negus was "with great respect, I believe this is very much at odds with the existing clinical evidence. The deduction should be considerably more than 1/10th." The AMS gave no other reasons for this conclusion other than that the pre-existing condition was extensive. The AMS had failed to consider how the pre-existing condition related to the impairment actually being assessed and accordingly gave no explanation as to why the deduction of 1/10th was inconsistent with the evidence. 2. The Appeal Panel, to the extent that it could be seen to be making its own assessment, also failed to address this question. The plaintiff submitted that by acting in this way the Appeal Panel has made an error of law on the face of the record and committed jurisdictional error. 3. When asked about the ruling of the full Federal Court in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6;185 CLR 259, that a court should not be concerned with looseness in the language nor with unhappy phrasing of the reasons of an administrative decision-maker, Counsel for the plaintiff responded (T17.13-27): "This is not a question of finely attuned for error, this is just a complete absence of the relevant reasoning. … There is nothing in there in which the AMS, on the face of it, has considered how the previous condition would contribute to the current impairment. Nothing to show that he has considered the question from Ryder that has the previous injury resulted in a greater impairment. He has told us that this work injury has resulted in a greater intervention and a greater impairment, but that is not the question. The question is what the earlier injury contributes. He addressed none of those things and nowhere had he even expressed any of those terms, as we read it. So when one puts it together, a statement that one paragraph has covered the statutory test must fail completely." Clinton Industries' submissions 1. Clinton Industries noted that the appeal before the Appeal Panel was made on the grounds that the original decision maker, the AMS, had erred in failing to apply the correct legal test in determining whether any proportion of the plaintiff's assessed lumbar impairment resulted from a previous injury or pre-existing condition or abnormality. 2. However, Clinton Industries submitted that the plaintiff's claim was predicated on the basis that there was such a contribution from a pre-existing condition. The doctor upon whose opinion he relied, said that there was. No medical practitioner whose evidence was presented said otherwise. There was a compelling body of medical evidence which supported the existence of a pre-existing back condition that had been so serious as to keep the plaintiff out of the work force for several years and caused him to undertake retraining in order to take up the relatively undemanding duties required of him in his employment with Clinton Industries. In December 1990, he was certified by Dr Peter Wearne as having a lower back vulnerability. A clinical picture of his condition after commencing work as a clerk with Clinton Industries but before his work injury can be found in the report of Dr Richard Evans who reported to the plaintiff's then lawyers on 29 October 1996. Further medical assessments closer to the date of injury are contained in reports of Dr Chan dated 20 June 1998 and 14 November 1998. 3. The circumstances of the plaintiff's injury with Clinton Industries were relatively innocuous. A Judge of the Compensation Court of NSW had previously found that 2/3rds of the plaintiff's back impairment (as opposed to his lumbar WPI) resulting from his work injury was due to a pre-existing condition. 4. Clinton Industries submitted that a finding that a proportion of the plaintiff's assessed lumbar impairment resulted from a previous injury or pre-existing condition or abnormality was not a step in the required deliberations of the AMS. It was not part of the medical dispute and was simply not an issue and in those circumstances, it was Clinton Industries' submission that the Appeal Panel accorded the plaintiff's submission more attention than it warranted. However, it cannot have erred in dismissing an appeal challenging the determination of a matter that was not in issue at first instance. 5. In bolstering its argument, Clinton Industries made close reference to the procedural history of the matter. I need not repeat that summary here, as the background of the matter is set out earlier in this judgment from [4]. 6. Clinton Industries noted that the plaintiff appealed under the Workplace Injury Act citing demonstrable error by the failure of the AMS to address the question of whether the plaintiff's previous back injury has meant there is now a greater impairment than would otherwise be the case, and arguing that this constituted the same error as identified by Schmidt J in Cole. 7. In Clinton Industries submission, by application of the reasoning of Davies J in NSW Police Force, the appeal and the Appeal Panel's consideration of it were confined to the error identified in the plaintiff's submission. 8. Clinton Industries noted that the Appeal Panel dealt with the plaintiff's ground of appeal at [44] of its reasons, concluding that the AMS had in fact considered the question, referring to both the medical history and the opinions of qualified doctors, including Dr Negus. However, given the way in which the application had been framed, there was never any issue that a proportion of the plaintiff's assessed impairment was due to his pre-existing injury or condition. The plaintiff's notice to Employers Mutual NSW Limited of 2 March 2020 explicitly adopted the opinion of Dr Negus who had certified a deduction. No medical opinion had suggested otherwise. A Judge of the Compensation Court had previously applied s 323 of the Workplace Injury Act to deduct two thirds from the assessed impairment of the plaintiff's back. The judicial decision did not result in an issue estoppel because the Compensation Court was assessing the impairment of the back as opposed to the WPI of the lumbar spine. Nevertheless, it underscores the fact that there was general acceptance that the medical condition of the plaintiff's low back was due in large part to a condition which pre-dated his employment with Clinton Industries. 9. Thus in Clinton Industries' submission, there was no obligation whatsoever for the AMS to provide reasons for concluding that a proportion of the assessed WPI was due to a pre-existing condition or abnormality. It was simply not an issue. 10. The obligation of an Appeal Panel to give reasons in this context was considered by Campbell J in Ryder, where his Honour referred (at [24]) to the judgment of Basten JA in Vegan v Campbelltown City Council (2006) 67 NSWLR 372 ("Vegan"): "[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" (emphasis added) 1. In this instance there was no such factual dispute before the AMS and thus no need for the Appeal Panel to make primary findings of fact. 2. Clinton Industries submitted that in providing its reasons contained in its decision (at [44]-[50]) the Appeal Panel gave the plaintiff's submissions and appeal ground greater consideration than was warranted. In so doing the Appeal Panel cannot have erred in law in such a manner as to attract the intervention of the Court pursuant to s 69 of the Supreme Court Act. The only criticism that could be made of the Appeal Panel's reasons is that they were unnecessary. 3. At the hearing, Counsel for Clinton Industries referred to Vitaz v Westform (NSW) Pty Ltd [2011] NSWCA 254 ("Vitaz") where at [43] Basten JA (with whom McColl JA and Handley AJA agreed) stated: "[43] …The resulting principle is that if a pre-existing condition is a contributing factor causing permanent impairment, a deduction is required even though the pre-existing condition had been asymptomatic prior to the injury. In the absence of any medical evidence establishing a contest as to whether the pre-existing condition did contribute to the level of impairment, the complaint about a failure to give reasons must fail. An approved medical specialist is entitled to reach conclusions, no doubt partly on an intuitive basis, and no reasons are required in circumstances where the alternative conclusion is not presented by the evidence and is not shown to be necessarily available." 1. Counsel for Clinton Industries submitted that there was no contest based on the medical evidence that obliged the AMS to undertake the exposition of the sort of reasons that the plaintiff argues for. As such the Appeal Panel found that there was no error in the AMS' finding on that point (T26.10-16). 2. Counsel for Clinton Industries also referred to Vitaz at [34] where Basten JA stated: "[34] Questions as to the adequacy of the reasons given by an approved medical specialist are different in kind. Although reasons are required so that the unsuccessful party may know why he or she has failed, it does not follow that a medical specialist has to give reasons which are immediately comprehensible to a person with no medical expertise. For example, a medical expert speaking to other practitioners might say that some degree of impairment was self-evidently caused by a pre-existing condition, despite the fact that the person was asymptomatic prior to the injury. On the other hand, such a conclusion may be medically contestable. In order for the applicant to succeed in this Court in asserting inadequacy of reasons, there must at least be material properly before the Court which demonstrates that the opinion falls into the latter category. The Court was not taken to any material which indicated that to be the case." 1. Counsel submitted (at T28.40-50) that even though the Appeal Panel didn't itself cite Basten JA's approach in Vitaz to the giving of reasons by the AMS, his commentary underscores the fact that their decision to affirm the medical assessment certificate was without error. Once one reaches that conclusion there's no basis for relief pursuant to s 69 of the Supreme Court Act to be dispensed in this matter. Whatever comments the Appeal Panel may have made about the quantification of WPI be it before the dates of this injury or otherwise is interesting, but it doesn't vitiate the decision that it has made. 2. With regards to the plaintiff's reliance upon the decisions of Cole or Moy, Counsel for Clinton Industries submitted (at T27.11-18) that this current case differentiates from these decisions as this is not a case where the Appeal Panel set aside a medical assessment certificate of the AMS and then set about undertaking their own assessment. All the Appeal Panel did was confirm the medical assessment certificate of the AMS. Cole and Moy were cases where the Appeal Panel wanted to undertake its own assessment and different considerations and principles clearly apply when they're undertaking that task. The plaintiff's submissions in reply 1. The plaintiff noted that Clinton Industries submitted that there was no issue about a s 323 deduction, and submitted that simply not correct for several reasons. 2. The first of these was that the referral to the AMS specifically directed attention to the question consistent with s 319 being "(d) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion," 3. The second was that an examination of the medical material also discloses that there is a dispute about the s 323 deduction. The plaintiff noted that Dr Negus had made a deduction of 10% though the deduction was not explained applying the correct legal principles. 4. By contrast Clinton Industries had relied upon the opinion of Dr Bosanquet who initially opined that a 10% deduction was appropriate but upon further questioning, changed his opinion to a two thirds deduction. In concordance with its primary submissions, the plaintiff submitted that Dr Bosanquet did not explain his reasoning other than to acknowledge that he had previously made a two thirds deduction. 5. In the plaintiff's submission it is apparent from a consideration of the medical material that the nature and extent of any s 323 deduction was the center of the dispute, and in fact it was the only matter in dispute. Both Dr Bosanquet and Dr Negus had assessed an impairment of 24%. The only point of difference between them was the s 323 deduction. 6. It follows that a primary task for the AMS was to make an assessment of whether there was a s 323 deduction and if so to what extent was the impairment due to the pre-existing condition. That task required the application of the settled principles as set out in the primary submissions. Those principles apply to both a determination of whether there is a deduction and if so, the extent of the deduction, 7. The plaintiff opined that it is significant that Clinton Industries did not attempt to submit that the Appeal Panel applied the correct test. The plaintiff noted that there is no submission that the AMS found that the previous surgery in fact contributed to the current impairment or that the previous surgery meant that the impairment is greater than in otherwise would have been, or that the AMS or the Appeal Panel had addressed any of those matters. 8. In the plaintiff's submission the inference to be drawn is that Clinton Industries concedes that both the AMS and the Appeal Panel failed to apply the correct legal test and in doing so made an error of law on the face of the record and made a jurisdictional error. As set out in the primary submissions an examination of the reasons of the AMS and the Appeal Panel discloses that there was such an error. Resolution 1. It is Clinton Industries' argument that a finding that a proportion of the plaintiff's assessed lumbar impairment resulted from a previous injury or pre-existing condition or abnormality was not a step in the required deliberations of the AMS because it had never been in issue and was not part of the medical dispute. According to Clinton Industries, as the s 323 deduction was not part of the medical dispute, the Appeal Panel were not required to provide reasons with regards to this issue as per Vegan and were also confined to the error identified by the appeal grounds as per NSW Police Force. 2. As it is not disputed that there was a pre-existing injury or that the plaintiff's WPI was calculated at 24%, in my view the central issue of the dispute before the AMS was the s 323 deduction. The amended referral to the AMS (CB 212), states that the medical dispute involves "whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion (s 319(d))". The AMS acknowledged "[t]he following matters have been referred for assessment (s 319 of the 1998 Act)". The AMS addressed this issue under the heading 'Deduction (if any) for the proportion of the impairment that is due to previous injury or pre-existing condition or abnormality'. 3. The legal principles to be applied when making a deduction under s 323 of the Workplace Injury Act have been clearly set out by Schmidt J in Cole. As set out earlier, Her Honour stated (at [38]) that this involves a three step test which requires a consideration of firstly, what the level of impairment after the second injury was; secondly, whether a proportion of that impairment was due to the first injury; and thirdly, what that proportion was. 4. In Cole, at [30] Schmidt J stated that s 323 of the Workplace Injury Act does not permit an assessment to be made on the basis of an assumption or hypothesis, that once a particular injury has occurred, it will always, ' irrespective of outcome', contribute to the impairment flowing from any subsequent injury. The assessment must have regard to the evidence as to the actual consequences of the earlier injury, pre­existing condition or abnormality. The extent that the later impairment was due to the earlier injury, pre-existing condition or abnormality must be determined. 5. With regards to the s 323 deduction made to the calculation of the plaintiff's WPI, the AMS' assessment dated 27 October 2020 states that "in 1989, Mr Fardell had a discectomy at the L4/5 articulation. After this more recent event, the specific clinical management was a disc replacement. This is a more substantial clinical intervention. With the extensive pre-existing condition from 1989, there would reasonably be significant deduction." In evaluating the pre-existing condition with the disc excision with the much more recent event where there was a disc replacement, the AMS was of the opinion that there should be a one-third deduction for the pre-existing condition and that the event that occurred on 30 March 1999 would constitute two-thirds of the current impairment. 6. From a fair reading of the AMS' assessment, it would appear that in making a 1/3rd deduction under s 323 of the Workplace Injury Act, the AMS has failed to provide an evidentiary basis in determining whether a proportion of the plaintiff's current injury was in relation to the previously existing injury and if so what was this proportion. The AMS did not apply steps 2 and 3 of the legal test set out by Schmidt J in Cole. Rather, the reasoning provided for this deduction was that "with the extensive pre-existing condition from 1989, there would reasonably be a significant deduction". It would appear that the AMS has made his determination on the basis of an assumption or hypothesis that the occurrence of the earlier injury suffered by the plaintiff to his L4/5 will always contribute to impairment following from subsequent injuries, irrespective of outcome and has, as such, fallen into the same error described by Schmidt J in Cole (at [30]). 7. Similarly, the Appeal Panel, in its decision dated 16 April 2021, failed to provide the necessary evidentiary nexus between the first injury suffered by the plaintiff in 1989 and the degree that this injury contributed to the second injury. Again, an assumptive approach was taken in which the Appeal Panel, in supporting the decision of the AMS, stated that based on the evidence in the file and assuming a laminectomy had been undertaken, at any time during the intervening period, the plaintiff would probably have been assessed in DRE Lumbar Category II at 5% WPI with the addition of 2 or 3% for the impact on the activities of daily living, resulting in an assessment of 7 to 8% WPI, which equates to about one-third of the current assessment. 8. As established in Cole, a deduction is not to be made by way of assessing the impairment that would have resulted from the previous injury and deducting this from the current injury. The Appeal Panel was required to analysis whether and how the previous injury contributed to the current injury and the extent of this contribution. The Appeal Panel failed to recognise an error and then failed to analyse whether and how the previous injury contributed to the current injury and the extent of its contribution. 9. Clinton Industries referred to the decision of Vitaz where at [43] Basten J stated that if a pre-existing condition is a contributing factor causing permanent impairment, a deduction is required even though the pre-existing condition had been asymptomatic prior to the injury. Basten J explained that the absence of any medical evidence establishing a contest as to whether the pre-existing condition did contribute to the level of impairment, the complaint about a failure to give reasons must fail. His Honour concluded that approved medical specialist is entitled to reach conclusions, no doubt partly on an intuitive basis, and no reasons are required in circumstances where the alternative conclusion is not presented by the evidence and is not shown to be necessarily available. 10. However, Vitaz differs from the present case. In Vitaz, the Appeal Panel made a 1/10th deduction pursuant to s 323(2) of the Workplace Injury Act which provides that if the extent of a deduction will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction is 10% of the impairment, unless this assumption is at odds with the available evidence. In those circumstances it is not necessary for the Appeal Panel to provide reasons as to why the deduction applies where the alternative conclusion is not presented by evidence. This factual situation is different from these current proceedings where a deduction of 1/3rd was made where there was medical evidence supporting an alternative conclusion. 11. It is my view that both the AMS and the Appeal Panel have failed to correctly apply the test outlined by Schmidt J in Cole (at [38]) with regards to s 323 deductions. In doing so, the Appeal Panel has committed an error of law on the face of the record. The decision of the Appeal Panel should be set aside. It is now unnecessary to consider Judicial Grounds (5) and (6). Result 1. The result is that the plaintiff has established that in relation Judicial Grounds (1)-(4) the Appeal Panel erred in law in its application of s 323. Therefore, the Appeal Panel's decision dated 16 April 2021 should be set aside. The Judicial Review is successful. The plaintiff has sought that this matter be referred to a differently constituted Appeal Panel. In the absence of any allegations of bias, it is my view that the composition of the Appeal Panel is a matter for determination by the President of the Personal Injuries Commission. The decision is to be remitted to the third defendant for determination as according to law. Costs 1. Costs are discretionary. Costs usually follow the event. The first defendant is to pay the plaintiff's costs on an ordinary basis. The Court orders: 1. The decision and statement of reasons of the second defendant dated 16 April 2021 is set aside. 2. The proceedings are to be remitted to the third defendant for determination as according to law. 3. The first defendant is 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: 15 February 2022