New South Wales Supreme Court CITATION : Rarasea v The Danks Family Trust trading as Caroline Chisholm Nursing Home & Ors [2007] NSWSC 1072 HEARING DATE(S) : 25/09/2007 JUDGMENT DATE : 4 October 2007 JUDGMENT OF : Associate Justice Malpass DECISION : The Certificate issued by the Appeal Panel is set aside. The matter is remitted to the Registrar for referral to an Appeal Panel for determination according to law. The defendant is to pay the costs of the Summons. CATCHWORDS : Decision of Appeal Panel - insufficient reasons LEGISLATION CITED : Supreme Court Act 1970 (NSW) Workplace Injury Management and Workers Compensation Act 1998 (NSW). CASES CITED : Campbelltown City Council v Vegan [2006] NSWCA 284 Matthew Hall Pty Ltd v Smart [2000] NSWCA 284 Merani Bataki Rarasea (Pl) PARTIES : The Danks Family Trust trading as Caroline Chisholm Nursing Home & Ors (1st Def) Registrar of the Workers Compensation Commission (2nd Def) An Appeal Panel constituted under section 328 of the Workplace Injury Management and Workers Compensation Act 1998 (3rd Def) FILE NUMBER(S) : SC 30005/07 COUNSEL : Mr C. Jackson (Pl) Mr M. Batten (1st Def) P K Simpson & Co (Pl) SOLICITORS : Turkslegal (1st Def) Crown Solicitor (submitting appearance) (2nd & 3rd Def's) LOWER COURT JURISDICTION : Workers Compensation Commission LOWER COURT FILE NUMBER(S) : WCC 7068-2006 LOWER COURT JUDICIAL OFFICER : Appeal Panel LOWER COURT DATE OF DECISION : 10/01/2007 - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE MALPASS 4 OCTOBER 2007 30005/07 Merani Bataki Rarasea v The Danks Family Trust T/as Caroline Chisholm Nursing Home & Ors JUDGMENT 1 HIS HONOUR: The plaintiff suffered work injury, inter alia, to her left knee. She has given various versions of how she came to suffer that injury. It seems that it may have happened either on the 5th or 6th of January 2004, or on both such days, whilst she was pushing a trolley on a ramp. 2 She had an x-ray on 7 January 2004 (it was said to demonstrate mild degenerative changes and a slight displacement of the patella). On 23 February 2004, she underwent an arthroscopy. It was found that:- "there was a cleavage tear of medial meniscus, Grade IV chondral damage patellofemoral joint and medial femoral condyle" On 1 November 2004, there was an MRI scan of her left knee. A report was prepared by Dr Read, which set out degenerative changes and abnormalities. On 18 January 2005, she had a further x-ray of the left knee (it was said to demonstrate an almost 1cm lateral displacement of the patella in relation to the intercondylar notch and mild degenerative changes with slight narrowing of the joint in the medial compartment) 3 As pain and disability continued, on 17 June 2005 she underwent a total knee replacement. 4 Her claim for assessment of whole person impairment was referred to an Approved Medical Specialist (AMS). He was given a history of injury on both of 5 January 2004 and 6 January 2004. He issued a Medical Assessment Certificate (the Certificate). He assessed the whole person impairment for the left lower extremity at 20% for both of 5 January 2004 and 6 January 2004. The body of the Certificate expresses that he made no deductions for pre-existing disorders. However, table 2 thereto lists a 100% deduction for the 6 January 2004 injury. 5 I shall briefly mention certain of the other material recorded in the body of the Certificate. It recorded that the plaintiff continued to complain of moderate discomfort felt constantly in the left knee and that there had been a number of investigations of the left knee, which were irrelevant to the present assessment because they pre-dated the total knee replacement. The summary appearing therein contained the following:- "7. . summary of injuries and diagnoses: This claimant has undergone total knee replacement on the left side due to degenerative changes in the joint. . consistency of presentation: The claimant's presentation is somewhat excessive for the presence of a total knee replacement. There was some evidence of voluntary resistance to examination." 6 It seems to be common ground that the AMS gave inadequate reasons for his decision. His view that the total knee replacement was "due to degenerative changes" has provoked competing submissions from the parties as to what he considered the causation to be. 7 The defendant made application to appeal against the medical assessment by the AMS for the 5 January 2004 injury. A Delegate of the Registrar allowed the appeal to proceed. A review of the original medical assessment took place and was heard by an Appeal Panel. 8 The issue before the Appeal Panel was what deduction, if any, should be made in respect of any proportion of the impairment that was due to previous injury, pre-existing condition or abnormality pursuant to s323 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW). 9 The Appeal Panel, after a determination on the papers, decided to revoke the Certificate and issue a new one. The new Certificate assessed the whole person impairment at 2% (a reduction of 90% was made in respect of 20% of the left lower extremity injury of 5 January 2004). This material appears only in the table which forms part of the new Certificate (which was attached to the Statement of Reasons (the reasons) given for the decision of the Appeal Panel). 10 The plaintiff has brought a challenge to the new Certificate by way of Summons in this Court. She now proceeds on an Amended Summons, which was filed in Court on 25 September 2007. Relief is sought, inter alia, pursuant to s69 of the Supreme Court Act 1970 (NSW). There are two grounds of appeal. One is presented as misdirection in relation to s323. The other is inadequate disclosure of reasoning process. 11 In respect of the ground of appeal that related to s323, the Court has been referred to authority (including Matthew Hall Pty Ltd v Smart [2000] NSWCA 284). It was common ground that subs (2) had no present application. 12 In Matthew Hall, Giles JA observed as follows:- "[31] In Government Cleaning Service v Ellul (1996) 13 NSW CCR 344 at 349 it had been said that s68A(1) was not concerned with any pre-existing condition or abnormality which was not causing any permanent impairment. Cole JA went on in D'Aleo v Ambulance Service of New South Wales to explain that, read in context, this meant that unless the pre-existing condition was a contributing factor causing permanent impairment, s68A(1)(b) had no application; so read, it was consistent with the view his Honour had earlier stated. In the result, therefore, it did not matter that the pre-existing condition had been asymptomatic, provided that the permanent impairment of the back as found was to some extent due to the pre-existing condition. [32] The same, in my view, must be said as to the current s68A(1). It does not matter that the pre-existing condition was asymptomatic, and if the loss is to some extent due to the pre-existing condition there must be deduction of the deductible proportion for that loss. But it is necessary that the pre-existing condition was a contributing factor causing the loss. And, of course, it is necessary that there was a pre-existing condition." 13 The reasons contained, inter alia, the following:- "26. The Panel on reading all the material makes the following observations, that the injuries on the dates contained in the referral were not major in terms of impairment. That an arthroscopy one month after the dates of injury the worker was found to have Grade IV changes in the medial compartment indicative of an advanced long term condition. 28. The Panel is satisfied the worker had a significant albeit asymptomatic left knee condition, the medical evidence is clear on that point. D'Aleo v Ambulance Service of NSW (1996) 14 NSWCCR 139 is authority to support a deduction for a previously asymptomatic pre-existing condition so long as the condition was a contributing factor causing permanent impairment. 29. Whilst it is incumbent for an AMS to give reasons for applying a deduction greater than 10% likewise it is incumbent in the face of overwhelming evidence of a pre-existing condition to give reasons as to why no deduction was applied. The reasons of the AMS clearly indicate the demonstrable error where he states, "There are a number of investigations of the left knee which are irrelevant to the present assessment as they predated the total knee replacement". 30. For these reasons, the Panel has therefore determined that the Medical Assessment Certificate dated 31 August 2006 given in this matter should be revoked, and a new Medical Assessment Certificate should be issued." 14 This material from the reasons reveals that the Appeal Panel made certain observations in dealing with what had been done by the AMS (that her left knee injury was not major in terms of impairment, the finding on arthroscopy that was indicative of an advanced long term condition and of its satisfaction that the plaintiff had a significant, albeit asymptomatic left knee condition). Save for those observations, largely the reasons offer nothing more to explain how the Panel came to its assessment of 2%. 15 The Court has been taken to what was said by Basten JA (inter alia, in paragraphs 121, 122 and 128) in Campbelltown City Council v Vegan [2006] NSWCA 284. 16 It seems to me that this case can be disposed of by having regard to the second ground of appeal only (a consequence of that view is that it is really not possible to consider the other ground). In reaching that view, I have had regard to the factors involved in an assessment of physical impairment by Medical Specialists. It involves matters of evaluation and judgment and such matters are often not reducible to precise explanations (the choice of a particular figure will only be a point within a legitimate range). 17 Even having regard to those matters, I consider that the expression of reasoning process in this case was grossly deficient. 18 The Appeal Panel appears to have concentrated on pointing out what it regarded as the error of the AMS, that led it to the setting aside of the Certificate. It did not itself indulge in a sufficient expression of findings or reasoning process that led it to its own assessment. What brought about such result can only be gleaned by way of inference. In this case, there is an insufficiency of material from which relevant inferences may be drawn. I should add that, in its context, the deduction for pre-existing condition was a large one. The Appeal Panel came to reduce the original assessment by 18% (a 90% reduction). 19 It suffices to briefly mention certain particular matters. There is no express finding that the pre-existing condition was a contributing factor causing permanent impairment. What might have brought about such a finding is left undisclosed. The total knee replacement is not mentioned in the expression of reasoning process. What part, if any, it played in the reaching of the decision is a matter for conjecture. How the Appeal Panel came to make a deduction of 90% is similarly a matter for conjecture. 20 In the circumstances, it seems to me that the parties were not left in a position to understand why a whole person impairment of 2% was assessed. 21 The Certificate issued by the Appeal Panel is set aside. The matter is remitted to the Registrar for referral to an Appeal Panel for determination according to law. The defendant is to pay the costs of the Summons. 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