Shanahan v Trojan Workforce Recruitment (No 4) Pty Ltd [2005] NSWSC 610

New South Wales Supreme Court

CITATION : Shanahan v Trojan Workforce Recruitment (No 4) Pty Ltd [2005] NSWSC 610

HEARING DATE(S) : 26/05/05

JUDGMENT DATE : 29 June 2005

JUDGMENT OF : James J at 1

DECISION : Summons dismissed

CATCHWORDS : ADMINISTRATIVE LAW - administrative review of conduct of the Registrar of the Workers Compensation Commission of NSW in forwarding a medical report to an approved medical specialist - contrary to arbitrator's purported ruling

Workers Compensation Act LEGISLATION CITED : Workers Compensation Regulations Workplace Injury Management & Workers Compensation Act

Campbelltown City Council v Vegan [2004] NSWSC 1129 CASES CITED : Fletchers International Exports Pty Limited v Regan [2004] NSW WCC PD 7

PARTIES : Andrew Shanahan v Trojan Workforce Recruitment (No 4) Pty Ltd

FILE NUMBER(S) : SC 30072/04

R Goodridge - Plaintiff COUNSEL : S Flett - 1st Defendant Ms Allars - 3rd Defendant

Firths, TheCompensation Lawyers - Plaintiff Rankin Nathan Lawyers - 1 Defendant SOLICITORS : IV Knight - Workcover - 3 Defendant

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINSTRATIVE LAW LIST

JAMES J

Wednesday 29 June 2005

30072/04 SHANAHAN v TROJAN WORKFORCE RECRUITMENT (No.4) PTY LTD & ORS

JUDGMENT 1 HIS HONOUR: These proceedings were brought by the plaintiff Andrew Shanahan against the first defendant Trojan Workforce Recruitment (No.4) Pty Limited and the second defendant the Registrar of the Workers Compensation Commission of New South Wales ("the Registrar"). The third defendant the Workcover Authority of New South Wales ("Workcover") was joined as a party pursuant to Pt 8 r 8 of the Supreme Court Rules. 2 In the summons by which the proceedings were commenced the plaintiff claimed a declaration and orders in respect of a decision by an approved medical specialist (an "AMS") appointed under Pt 7 of the Workplace Injury Management and Workers Compensation Act 1998 ("the WIM Act") on the grounds that the plaintiff had been denied natural justice and that the decision by the approved medical specialist had involved jurisdictional error and had been beyond power. 3 The summons was supported by three affidavits sworn by the solicitor for the plaintiff and by solicitors in the employ of the firm of the solicitor for the plaintiff. At the hearing there was no cross-examination of any of the deponents of these three affidavits and no evidence was adduced by any of the defendants. 4 It is convenient to set out a summary of some of the facts established by the plaintiff's affidavits. 5 On 6 December 2001 the plaintiff was injured in an accident which occurred in the course of his employment by the first defendant. 6 On 10 January 2003 the plaintiff was examined by Dr D Johnson, at the request of the first defendant's workers compensation insurer. Dr Johnson made a report of his examination of the plaintiff in which he expressed the opinion that the plaintiff had not suffered any permanent impairment as a result of any injury sustained on 6 December 2001. On 25 June 2003 the first defendant's insurer wrote to the plaintiff's solicitor advising that, having regard to Dr Johnson's report, no offer of compensation for permanent impairment would be made. 7 The plaintiff's solicitors had the plaintiff examined by Dr W.G.D Patrick. In a report of 4 August 2003 Dr Patrick expressed the opinion that the plaintiff had suffered a total permanent impairment of his back of 25 percent of a most extreme case. In a further report of 4 August 2003 Dr Patrick said that it would be reasonable to make a deduction of 5 percent for a pre-existing but relatively asymptomatic spondylolisthesis, leaving the plaintiff with a total permanent impairment of his back resulting from injuries sustained on 6 December 2001 of 20 percent of a most extreme case. 8 On 26 August 2003 the plaintiff's solicitors wrote to the first defendant demanding payment of workers compensation for the plaintiff, including, in particular, compensation for an alleged 20 percent permanent impairment of his back. 9 The demand for payment of workers compensation was not acceded to and on 11 December 2003 the plaintiff's solicitors filed an application for workers compensation with the Workers Compensation Commission. The application was served and a reply was filed on behalf of the first defendant. 10 On 6 February 2004 a telephone conference was conducted by an arbitrator appointed under the WIM Act with representatives of the parties. At the conference the arbitrator, acting pursuant to Pt 7 of the WIM Act and particularly s 321, referred the medical dispute between the parties about the degree of permanent impairment to the plaintiff's back to an approved medical specialist Dr G Weisz. 11 Evidence was given by one of the solicitors in the employ of the plaintiff's solicitors that he had participated in the telephone conference on 6 February 2004 and that during the conference the arbitrator had made a ruling that, because Dr Johnson's report had not been served on the plaintiff's solicitors within ten days of a request for its production, Dr Johnson's report was inadmissible in the proceedings and should not be forwarded to Dr Weisz. 12 On 29 March 2004 the plaintiff was examined by Dr Weisz. On 5 April 2004 Dr Weisz as an approved medical specialist issued a medical assessment certificate in accordance with s 325 of the WIM Act. 13 In his certificate Dr Weisz certified that the plaintiff had not suffered any permanent impairment to his back. Dr Weisz said that he had based his assessment on his clinical findings and on the plaintiff's work history over the previous two years. In two parts of his certificate Dr Weisz referred to Dr Johnson's report of 10 January 2003. Dr Weisz said that he concurred with Dr Johnson's assessment that the plaintiff had not suffered any permanent impairment. 14 Under s 326 of the WIM Act an assessment in a medical assessment certificate is conclusively presumed to be correct in any proceedings before a court or the Workers Compensation Commission with respect to a number of matters, including the degree of permanent impairment of a worker as a result of an injury. However, there is a limited right of appeal under s 327 of the WIM Act, an appeal being made by an application to the Registrar. The grounds on which an appeal can be brought are limited to the grounds set out in subs (3) of s 327 and the appeal cannot proceed unless it appears to the Registrar that at least one of the grounds of appeal specified in subs (3) exists. 15 An appeal under s 327 of the WIM Act was brought by the plaintiff. In the application to the Registrar it was stated that Dr Johnson's report had been sent to Dr Weisz, after the arbitrator had made a ruling at the telephone conference on 6 February 2003 "rejecting" Dr Johnson's report. It was submitted that, because Dr Weisz had had regard to Dr Johnson's report, Dr Weisz' medical assessment had been made on the basis of incorrect criteria (s 327(3)(c)) and the medical assessment certificate from Dr Weisz contained a demonstrable error (s 327(3)(d)). 16 On 17 August 2004 the Registrar found that she was not satisfied that a ground for appeal existed and hence the appeal could not proceed. In par 6 of her reasons for her decision the Registrar said:- "It was held in the case of Fletchers International Exports Pty Limited v Regan [2004] NSW WCC PD 7, inter alia, that as the AMS are not members of the Commission and that the making of a medical assessment by an AMS is not a 'proceeding' before the Commission therefore the Commission has no power to restrict the material sent to the AMS". 17 On 2 September 2004 the Workers Compensation Commission issued a certificate of determination that, in accordance with Dr Weisz' medical assessment certificate, the applicant was suffering "0% permanent impairment of the back attributable to the injury of 6 December 2001". 18 It became apparent in counsel for the plaintiff's oral submissions that the case being advanced for the plaintiff was rather different from what might have been inferred from the terms of the claims for relief in the summons. The claims for relief in the summons would have suggested that what was being sought by the plaintiff was administrative review of the "decision" by the approved medical specialist Dr Weisz on the grounds that Dr Weisz had denied the plaintiff natural justice and had made a "decision" which involved jurisdictional error and was beyond power. However, it became apparent in counsel for the plaintiff's submissions that what was being sought by the plaintiff was administrative review of what was submitted to have been the conduct of the Registrar in forwarding Dr Johnson's report to the approved medical specialist Dr Weisz. 19 Counsel for the plaintiff expressly disavowed that he was seeking administrative review of the making of the medical assessment by Dr Weisz or of anything done by the arbitrator either before or after Dr Weisz was requested to make a medical assessment. It was submitted that the medical assessment certificate should be quashed but only because it had been infected by the Registrar's conduct in sending Dr Johnson's report to Dr Weisz. 20 The steps in the argument which was advanced by counsel for the plaintiff can be summarised as follows. The court should find that the arbitrator made a ruling at the conference on 6 February 2004 that Dr Johnson's report not be sent to Dr Weisz, the approved medical specialist. It was clear from parts of Dr Weisz' medical assessment certificate that he had in fact received Dr Johnson's report. The court should infer that Dr Weisz had received Dr Johnson's report as a result of the report being sent to Dr Weisz by the Registrar. Whether the Registrar in sending Dr Johnson's report to Dr Weisz had acted advertently, that is in deliberate disregard of the arbitrator's ruling, or inadvertently, that is without adverting to the arbitrator's ruling, the Registrar had acted in excess of her powers and administrative law remedies should be granted. The relief the plaintiff was entitled to would include relief enabling the making of a further medical assessment by an approved medical specialist, who was not sent either Dr Johnson's report or Dr Weisz' medical assessment certificate which had been infected by Dr Johnson's report. 21 Fairly brief oral submissions were made by counsel for the first defendant. Wide ranging written and oral submissions were made by counsel for Workcover, to many of which I do not find it necessary to refer in order to determine these proceedings. 22 It was not disputed by counsel for the first defendant or counsel for Workcover that the arbitrator had purported to make a ruling at the conference on 6 February 2004 that Dr Johnson's report not be sent to Dr Weisz and it was not disputed that Dr Weisz had in fact received Dr Johnson's report. 23 It was submitted by counsel for Workcover that I should not draw the inference that Dr Weisz had received Dr Johnson's report as a result of an act of the Registrar in sending the report to Dr Weisz. It was suggested that there might have been other ways in which Dr Weisz had received Dr Johnson's report, for example through the report having been sent to Dr Weisz by some officer of the Commission acting on behalf of the arbitrator. Without deciding this issue, I am prepared to proceed on the assumption that Dr Weisz did receive Dr Johnson's report as a result of the report being sent to Dr Weisz by the Registrar. 24 The principal submission made by counsel for the first defendant, which was also one of the principal submissions made by counsel for Workcover, was that the arbitrator did not have any power to make the purported ruling at the conference on 6 February 2004 that Dr Johnson's report not be sent to Dr Weisz and that the purported ruling had been of no effect and hence there had been no contravention of any valid ruling by the arbitrator in the Registrar sending Dr Johnson's report to Dr Weisz (if the Registrar had in fact sent the report). 25 Counsel referred to s 294A of the WIM Act, which authorises the making of rules and regulations concerning medical evidence in connection with proceedings before the Commission. 26 Section 294A(1)(b) authorises the making of rules and regulations with respect to the disclosure of medical reports to approved medical specialists. Section 294A(1)(c) authorises the making of rules and regulations with respect to limiting the number of medical reports in connection with a claim or any aspect of a claim. 27 Pursuant to the power conferred by s 294A(1)(c) regs 43 and 44 of the Workers Compensation Regulations were made. Reg 43 provides that, in general, only one medical report in any particular speciality may be admitted on behalf of a party to proceedings but a further medical report may be admitted, if it is a permissible update of another medical report. Reg 44 sets out the requirements for a medical report to qualify as a permissible update of another medical report. 28 The regulations under the Workers Compensation Act now contain reg 43A, which provides that a medical report is not to be disclosed to an approved medical specialist in connection with a claim for compensation, unless certain conditions are satisfied including that the report has been admitted in proceedings on the claim. However, reg 43A did not come into operation until 3 September 2004 and hence was not in force when Dr Johnson's report was disclosed to Dr Weisz. At the time Dr Johnson's report was sent to Dr Weisz there was no legislative provision, regulation or rule preventing a medical report being disclosed to an approved medical specialist. 29 Counsel for the first defendant and for Workcover referred to the decision of a presidential member of the Workers Compensation Commission in Fletchers International Exports Pty Limited v Regan [2004] NSW WCC PD 7. In Fletcher an employer sought leave to appeal to the Commission constituted by a presidential member from a decision of the Commission constituted by an arbitrator. Before the arbitrator the employer had sought to rely on reports by four orthopaedic or general surgeons. The arbitrator held that three of the reports should not be admitted in the proceedings and should not be sent to the approved medical specialist who was being requested to make a medical assessment. 30 On the appeal the presidential member of the Commission held that the arbitrator had not erred in restricting the number of medical reports in the proceedings to only one medical report in any particular speciality. The presidential member then turned to consider the arbitrator's decision restricting the reports which should be sent to the approved medical specialist. This part of the presidential member's judgment should be quoted in full:- "44. The referral of medical evidence to an AMS is a separate issue. 45. Part 7 of Chapter 7 of the 1998 Act provides for 'Medical assessment' in relation to a dispute about a claim for workers compensation. 'Approved Medical Specialist' and 'medical dispute' are defined (section 319). Where a dispute before the Commission is a 'medical dispute' the Commission or the Registrar may refer it to an AMS for assessment (section 321). A dispute about permanent impairment must be referred to an AMS for assessment (section 293(2)). The AMS has the power to consult with other medical practitioners who currently or previously have treated the worker, call for the production of medical reports and to examine the worker (section 324). The AMS then gives a 'medical assessment certificate' ('a MAC'), as to the matters referred for assessment, to the Registrar (section 325). The MAC is binding in relation to certain matters 'in any proceedings' before the Commission (section 326). 46. Where an AMS is of the view that a medical assessment cannot be made because the degree of permanent impairment is not fully ascertainable, then 'proceedings in the Commission may be adjourned until the assessment is made' (section 322). 47. AMS's are not members of the Commission (section 368 of the 1998 Act). The making of a medical assessment by an AMS is not a 'proceeding' before the Commission. Part 9 of Chapter 7 of the 1998 Act concerns 'Proceedings before [the] Commission'. 48. Section 294A of the 1998 Act (set out above) distinguishes between the making of rules and regulations in relation to the 'disclosure of medical reports (including X-rays and the results of other tests) to approved medical specialists' (Section 294A(1)(b)), and the making of rules and regulations 'limiting the number of medical reports in connection with a claim or any aspect of a claim and, in particular, limiting the number of medical reports that may be admitted in evidence in proceedings before the Commission' (Section 294A(1)(c)). 49. Clauses 43 and 44 of the Regulations give effect to section 294(1)(c) of the 1998 Act in that they expressly place 'Restrictions on number of medical reports that can be admitted'. 50. Rule 68, by reference, applies only to the restrictions in Clause 43 of the Regulations. 51. No Regulations or Rules have been made to give effect to section 294A(1)(b), namely, in relation to disclosure of medical reports to an AMS. The result is that while a party is not permitted to file more than one medical report in any one specialty in proceedings before the Commission (constituted by an Arbitrator or Presidential Member), the Commission has no power to restrict the disclosure of information, including medical reports, to an Approved Medical Specialist. Effectively, the only limitation on obtaining multiple reports in the same medical specialty is that the party will not be entitled to recover the costs of obtaining a medical report that is not admitted in the proceedings. Section 331 of the 1998 Act provides that medical assessments by AMSs are 'subject to relevant provisions of the WorkCover Guidelines ['the Guidelines'] relating to the procedures for the referral of matter for assessment'. Guideline 13 states that the Registrar is to provide the AMS with: · A copy of any minute of order or referral indicating the nature of the medical dispute; and · All information and documentation on which the parties propose to rely lodged with the Commission in accordance with the Workers Compensation Commission Rules 2003. 53. This does not take the issues in this appeal any further. The Guidelines do ;not restrict a party in relying upon documents and information for the purpose of an AMS assessment, that they would not be permitted to rely upon in Commission 'proceedings'. The Guidelines incorporate the terms of the Rules, which in turn incorporate the requirements of the Regulations, which do not expressly restrict the disclosure of medical reports to an AMS. 54. The only discretion that rests with the Registrar and the Commission in relation to the referral of medical disputes to an AMS is whether or not to refer a matter that does not concern a claim for permanent impairment (section 321). 55. The Arbitrator erred in directing that only those medical reports that were admitted into the proceedings before the Commission were to be referred to the AMS for the purpose of a medical assessment…". 31 Counsel for the first defendant and for Workcover also referred to Campbelltown City Council v Vegan [2004] NSWSC 1129 (Wood CJ at CL). In Vegan an employer sought administrative review of a decision by an appeal panel constituted under s 328 of the WIM Act, allowing an appeal against a medical assessment made by an approved medical specialist under s 327 of the WIM Act. 32 An issue which arose in Vegan was whether administrative review of the decision of the appeal panel was precluded by s 350 of the WIM Act, which provides that a decision of the Commission is final and binding and is not subject to appeal or review. Wood CJ at CL held that administrative review of the decision of the appeal panel was not precluded by s 350, because s 350 applies only to a decision of "the Commission" and his Honour held, referring to ss 4, 366, 368 and 375 of the WIM Act, that "the Commission" means the Commission as constituted by an arbitrator or a presidential member and does not include an appeal panel. 33 In the present proceedings it was submitted by counsel for the first defendant and counsel for Workcover that, if "the Commission" does not include an appeal panel hearing an appeal from a medical assessment, it could not include an approved medical specialist making an initial medical assessment. 34 In my opinion, the submissions by counsel for the first defendant and for Workcover, which I have summarised, are compelling and should be accepted. 35 At the time Dr Weisz was requested to make a medical assessment and Dr Johnson's report was sent to him, no rule or regulation had been made pursuant to s 294A(1)(b), restricting the disclosing of medical reports to an approved medical specialist who was requested to make a medical assessment. Regulations 43 and 44 made pursuant to s 294A(1)(c), which were in force at the relevant time, apply to the admission of medical reports in proceedings before the Commission and the making of a medical assessment by an approved medical specialist is not part of proceedings before the Commission. Regulation 43A, made pursuant to s 294(1)(b) of the Act, which does provide that a medical report is not to be disclosed to an approved medical specialist in connection with a claim, unless inter alia the report has been admitted in proceedings on the claim, had not yet come into force. Counsel for the plaintiff did not point to any source of power outside the regulations which could have authorised the purported ruling made by the arbitrator on 6 February 2004 that Dr Johnson's report not be sent to Dr Weisz. I conclude that the purported ruling made by the arbitrator on 6 February 2004 that Dr Johnson's report not be sent to Dr Weisz was made without power and was of no effect and that, if the Registrar did forward Dr Johnson's report to Dr Weisz, there was no impropriety in the Registrar so acting. 36 I order that the summons be dismissed and that the plaintiff pay the costs of the proceedings of the first defendant.