New South Wales Supreme Court CITATION : Deanne Michelle Dillon v Australasian Correctional Management Pty Ltd & 4 Ors [2005] NSWSC 1284 HEARING DATE(S) : 15 November 2005 JUDGMENT DATE : 12 December 2005 JUDGMENT OF : Newman AJ DECISION : See Para 15 CATCHWORDS : Workers Compensation - appeal against medical panel - whether decision involved jurisdictional error and was beyond power. Supreme Court Act 1970 LEGISLATION CITED : Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998 Brown v John Watson Ltd (1914) BWCC 259 Cammpbelltown City Council v Vegan [2004] NSWSC 1129 CASES CITED : Craig v State of South Australia (1995) 184 CLR 163 Drake v The Minister for Immigration and Ethnic Affairs (1974) 24 ALR 577 Passey v The Registrar of the Workers Compensation Commission of NSW & Ors [2005] NSWSC 1032 PARTIES : Deanne Michelle Dillon v Australasian Correctional Management Pty Ltd & 4 Ors FILE NUMBER(S) : SC 12774/05 Mr C Jackson (pl) COUNSEL : Mr M Batten (1st def) PK Simpson and Co, Solicitors (pl) SOLICITORS : In House Legal Department QBE Workers Compenstaion (1st def) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION NEWMAN AJ 12 December 2005 12774/05 Deanne Michelle DILLON v Australasian Correctional Management Pty Ltd & 4 Ors JUDGMENT 1 NEWMAN AJ: The plaintiff, by summons, brings these proceedings pursuant to s69 of the Supreme Court Act 1970. She seeks the following orders :- 1. That the second defendant's endorsement and applied approval of the decision of the Third, Fourth and Fifth Defendants' (being the Medical Appeal Panel) made on 1 April 2005 be quashed. 2. That the Second Defendant instruct the Third, Fourth and Fifth Defendants' (being the Medical Appeal Panel) to decide the question of the extent of the permanent loss of the efficient use of the plaintiff's sexual organs in accordance with the law. 3. That the decision of the Third, Fourth and Fifth Defendants' (being the Medical Appeal Board) made on 1 April 2005 be quashed on the grounds of error on the face of the record and jurisdictional error. 2 The defendants' to the summons are her former employer, Australasian Correctional Management Pty Ltd, the Registrar of the Workers Compensation Commission of New South Wales and three persons who constituted the Appeal Panel who heard the appeal in the matter at the direction of the Registrar. 3 The plaintiff's claim arises out of events which occurred in the course of her employment as a detention officer with the first defendant at the Villawood Detention Centre. For the purposes of determining this matter it is necessary only to state the background facts relating to those events in short order. 4 The first event which gave rise to the plaintiff's claim occurred on 24 September 2001. On that day the plaintiff came across the dead body of an inmate of the centre . The condition of the inmates body was macabre and the plaintiff suffered a severe psychological reaction as a consequence of this event. The second event occurred on 15 November 2001. On this occasion, again in the course of her employment at the centre, the plaintiff stepped into a drain which caused her to fall. She suffered fractures of bones in the lower part of her right leg and right foot and also suffered soft tissue injuries. She subsequently alleges that she suffered pain and disability in her lower back as a result of the second incident. 5 The plaintiff's claim, so far as it is relevant to these proceedings, involves an allegation that, as a result of the psychological trauma she suffered as a consequence of both incidents, she has lost a percentage use of her sexual organs. It is her allegation that she has suffered a total loss of libido as a consequence of these events. Her claim is for permanent impairment of her sexual organs, as defined in ss65-67 of the Workers Compensation Act 1987. The 1987 Act contained tables of injuries for which lump sum compensation could be obtained should those injuries have resulted in permanent impairment to the relevant bodily parts. The tables provided for compensation to be paid for " loss of the efficient use… of the relevant bodily part", in this case sexual organs. 6 While the amount of compensation payable (if any) is to be determined by the tables to be found in the 1987 Act, the machinery for the resolution of a dispute involving such a claim is to be found in the Workplace Injury Management and Workers Compensation Act 1998. Pursuant to Part 7 of that Act (here and after referred to as the 1998 Act) a medical dispute is referred to an approved medical specialist pursuant to s319. By virtue of s326(a) a determination of permanent impairment under Part 7 is binding. Again, permanent impairment is defined under the Workers Compensation Act 1987 pursuant to ss 65-67. 7 After considering the dispute the approved medical specialist issues a medical certificate pursuant to s325 of the 1998 Act. An appeal may be lodged against that decision to an Appeal Panel constituted pursuant to s 328(1) of the 1998 Act by two approved medical specialists and an arbitrator, or personnel to be chosen by the Registrar. The appeal may be lodged only in relation to grounds which are to be found in s327 (3) (a)-(d) of the 1998 Act. Pursuant to s327(4) an appeal is made by application to the Registrar. The Registrar, as described by Wood CJ at CL in Campbelltown City Council v Vegan [2004] NSWSC 1129, performs a gatekeeping role. If the Registrar is satisfied that at least one of the grounds prescribed by s327(3) (a)-(d) exists he refers the matter to the Appeal Panel, which is constituted as I have stated. The procedure on appeal is stipulated by s328 of the 1998 Act. Essentially, such an appeal is an appeal de novo and it is the obligation of the Appeal Panel to consider the matter a fresh. In Vegan's case Wood CJ at CL carried out a detailed analysis of the relevant sections of the 1998 Act. As Patten AJ did in Passey v The Registrar Of the Workers Compensation Commission of NSW & Ors [2005] NSWSC 1032, I have followed Wood CJ at CL's decision in Vegan's case as a matter of judicial commodity. 8 In relation to s327 of the Act Wood CJ at CL said :- "74 It is to the effect that s 327 provides a gatekeeper role for the Registrar, whose task it is to consider, pursuant to s 327(4), whether "at least one of the grounds for appeal specified in sub-section (3) exists." If it appears to the Registrar that this is the case, then in accordance with s 327(4), the appeal can "proceed" and be referred to an Appeal Panel. Thereafter, it was submitted, the Appeal Panel can conduct a review afresh, and is not itself required to determine whether any of the four grounds referred to in s 327(3) has been made good. Nor is it confined to correcting the assessment in relation to such ground or grounds as have been made good. 75 This was said to follow from: (i) The fact that the grounds set out in paras (a) to (d) are described in s 327(3) as "grounds for appeal under this section"; (ii) The absence of any reference, in s 328(5), to the Appeal Panel needing to find that an "appeal ground" has been established, or to it "allowing an appeal"; (iii) The fact that, pursuant to s 328(2) the appeal "is to be way of a review of the original medical assessment"; and from (iv) The circumstance that pursuant to s 327(6) and s 329(1)(a) the Registrar may refer the matter for a further assessment, as an alternative to an appeal (at least where the relevant ground falls within s 327(3)(a) or (b)). 76 In my view there is force in this submission for the four reasons mentioned. Although the result is perhaps somewhat unusual it is consistent with the legislative policy of placing a tight control on appeals, and of confining the grounds for them." He went on to consider the nature of the Appeal Panels role as follows :- "78 In Allesch v Maunz (2000) 203 CLR 172 Gaudron, McHugh, Gummow and Hayne JJ noted that there were three categories of appeal: (i) An appeal in the strict sense, in which the function of the appellate body is "simply to determine whether the decision under appeal was or was not erroneous on the evidence and the law as it stood when the original decision was given", and in which the appellate body cannot receive further evidence; (ii) An appeal by way of rehearing in which the powers of the appellate body "are exercisable only where the Appellant can demonstrate that, having regard to all of the evidence now before the appellate (body), the order that is the subject of the appeal is the result of some legal, factual and discretionary error", or (iii) A completely fresh rehearing, called a hearing de novo, in which the power of the appellate body to re-exercise the power must be exercised "regardless of error" (at 180). 79 The analysis in this decision has been applied to Tribunals, for example, Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194. 80 In the present case the powers of the Panel are confined to revoking the certificate of the AMS, or to issuing a "new certificate as to the matters concerned", powers which are consistent with an appeal being a review de novo of the original assessment, falling within the third of the three categories mentioned in this decision, that is, a review which is not confined to correction of error which is established within one or other of the s 327(3) grounds. If it were a review of the second kind, one might have expected to see a power in the Panel to remit the matter to the AMS for revision. 81 It would follow, in the present case, that once the Registrar as gatekeeper was satisfied, of the existence of the 2% error appearing on the face of the table, or of any other error, then it was appropriate for the matter to be referred to the Appeal Panel. It was then free to conduct a review upon the basis of the material properly available before it, without any need to make a formal finding itself as to the existence of an error falling within an available ground of appeal, and without being confined to the correction of that error. 82 This gives rise to a somewhat novel form of appeal, but being a statutory appeal it has to be understood in the light of the relevant provisions, and in the light of the Legislative intent, in so far as that can be identified. 83 While I have not found this point, or indeed any other point which has been argued in these proceedings, as clear, or easy of determination, it does seem to me to be more consistent with a review by a Panel of Experts, once a ground for appeal has been identified, that it should be free to conduct a full review de novo on the available material. The position of the Racing Appeals Tribunal, which sat at a second level in an appellate framework, and which was considered in New South Wales Thoroughbred Racing Board v Waterhouse (2003) 56 NSWLR 691 is distinguishable. The position of the Appeal Panel in that case was more akin to that of the present Appeal Panel, in so far as it was held able to conduct a review de novo, while the Tribunal, to which appeal lay from the Appeal Panel, was confined to error review. 84 To confine a lay panel, even though this one is chaired by an Arbitrator, to the narrow confines of an appeal which is more suitable for a court of law, would be contrary to the intent of the Act, or to the objective of dealing with the claims efficiently and effectively, and in a timely way (see ss 3 and 367 of the WIMWC Act). As a consequence, the Plaintiff's assertion that there was an error of law, in relation to the incorrect criteria argument, must fail." Thus the Panel was bound to hold a completely fresh hearing in the matter, that is a hearing de novo, and it was not obliged to confine its attention to a determination as to whether any of the four grounds in s 327(3) had been established – that being a matter for the Registrar. 9 What then happened here? The plaintiff's claim for loss of efficient use of sexual organs was referred by the Registrar, Dr Frank Breslin, who carried out an examination of the plaintiff on 6 July 2004. I should add that the plaintiff's claim in relation to her back was referred to a Dr O'Neil by the Registrar, that appointment being made for 28 May 2004. While the matter of Dr O'Neil's assessment is still a subject of dispute, it plays no part in these proceedings and I shall not mention it again. 10 However, in relation to the examination carried out by Dr Breslin the Registrar issued a copy of his certificate to the plaintiff under the cover of a letter dated 13 August 2004. Essentially, Dr Breslin found that the proportion of permanent loss due to the injuries of 24 September 2001 and 15 November 2001 was nil. He ultimately found as follows:- "The issue with regard to this disability with regard to loss of sexual organs from 24 September 2001 to date would place the problem as being after 1 January 2002. This again would have no sexual dysfunction in it under the Act even if due to pain and I do not believe that the issue arises. I therefore assess that her sexual loss is basically psychiatrically induced with a minor element due to pain which is hard to quantify." 11 The plaintiff, being dissatisfied with this finding, lodged an appeal, relying upon the grounds to be found in s327(3)(c) and (d) of the 1998 Act. The Registrar, having performed her gate-keeping role under s327(4) of that Act, referred the matter to an Appeal Panel. To do so she must have found that at least one of the grounds existed. However, the Registrar is not obliged to identify which ground she found to have existed. Her decision to refer the matter to a Medical Appeal Panel was notified to the plaintiff by letter dated 3 March 2005. The reasons for decision of that Medical Panel were advised to the plaintiff under the cover of a letter bearing date 1 April 2005. MEDICAL PANELS CERTIFICATE – FINDINGS AND REASONS "12. The Panel finds for the Respondent for the following reasons. The Panel agrees with the reasoning of Dr Breslin in relation to his assessment of loss of efficient use of the sexual organs. Such reasoning was in keeping with the 1987 Act and the associated Table of Disabilities. The neurologist and AMS Dr O'Neil confirms normal neurological function in this case. 13. For these reasons, the Panel has therefore determined that the Medical Assessment Certificate issued on the 13/08/04 given in this matter should be confirmed." 12 In adopting Dr Breslin's reasoning the Appeal Panel, plainly enough, adopted his finding that loss of efficient use of sexual organs can be determined only by reference to a physical problem and not a psychiatric problem. It is common ground that the plaintiff's claim for loss of use of sexual organs is in fact one based on psychological or psychiatric grounds. The plaintiff's case can be simply put, that by deciding that the plaintiff's claim could only succeed on the basis that she had suffered a physical injury and by thus excluding any psychological or psychiatric injury Dr Breslin was in error and, by adopting his reasons, so was the Appeal Panel. The error involving the use of wrong criteria as to the assessment of an injury pursuant to the Act was an error of law. I should add that if Dr Breslin had found that the plaintiff's psychiatric condition was transient and not permanent he would have properly rejected the claim. But he did not. 13 As Wood CJ at CL pointed out in Vegan's case, the scope of this court to intervene in cases such as this was defined by the High Court in Craig v State of South Australia (1995) 184 CLR 163 at 179 in the following terms :- "If…an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it." In my view, by adopting Dr Breslin's reasoning, the Appeal Panel repeated his error by confining its assessment to disability flowing from physical injury. The definition of injury under the Workers Compensation legislation as it existed at the time, and has for many years previously, included psychological injury as well as physical injury as a basis for an applicant receiving compensation (see Brown v John Watson Ltd (1914) BWCC 259 per Lord Shaw) The error accordingly is an error going to jurisdiction and in my view this court should intervene. 14 However the matter does not end there. The plaintiff also contends that the Appeal Panel failed to reconsider the matter with a fresh mind. The hearing, being a hearing de novo, required the Appeal Panel to approach the matter in the way described by Bowen CJ and Deane J in their judgment in the Federal Court in Drake v The Minister for Immigration and Ethnic Affairs (1974) 24 ALR 577, namely, "The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal." The Appeal Panel's reasoning which I have set out above is indicative that rather than considering the matter with a fresh mind, it merely agreed with the reasoning adopted by Dr Bresnan. The plaintiff's counsel, in his written submissions, put his case this way :- "In doing so, the Appeal Panel has asked itself the wrong question, asking "Is there anything wrong with the decision under review?" (that question being for the gate-keeper", that is the Registrar) rather than "What is the correct and preferable decision, based on our own assessment?", in other words, approaching it with fresh minds, and fresh clinical input." In my view, that submission is one which should be upheld. 15 Accordingly, I find that the Appeal Panel's decision involved both jurisdictional error and error of law. Accordingly, I make the following orders :- 1. I quash the order of the Appeal Panel. 2. I order that the matter be returned for determination according to law by a fresh Appeal Panel established under s328 of the Act. 3. I order Australasian Correctional Management Pty Ltd to pay the plaintiff's costs. 4. I make no order as to the costs of the Registrar and the Appeal Panel. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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