New South Wales Supreme Court CITATION : Cole v Wenaline Pty Limited [2010] NSWSC 78 HEARING DATE(S) : 18 December 2009 JUDGMENT DATE : 23 February 2010 JUDGMENT OF : Schmidt J DECISION : 1. The decision be quashed and the matter referred to the Appeal Panel to be dealt with according to law. 2. The defendant bear the plaintiff's costs of the proceedings, other than the costs thrown away in respect of the hearing listed on 16 December 2009. The Plaintiff is to bear the defendant's costs, in that respect. CATCHWORDS : APPEAL - Workers Compensation - appeal from Workers Compensation Commission Appeal Panel - construction of s 323 of the Workplace Injury Management and Workers Compensation Act 1998 - error made - appeal upheld - medical panel decision quashed - costs Supreme Court Act 1970 LEGISLATION CITED : Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998 CATEGORY : Principal judgment CASES CITED : Campbelltown City Council v Vegan & Ors [2006] NSWCA 284; (2006) 67 NSWLR 372 Matthew Hall Pty Ltd v Smart [2000] NSWCA 284; (2000) 21 NSWCCR 34 PARTIES : Applicant: Warwick James Cole Respondent: Wenaline Pty Limited FILE NUMBER(S) : SC 30048/09 COUNSEL : Applicant: Mr P R Stockley, counsel Respondent: Mr G Parker, counsel SOLICITORS : Applicant: Stacks/Taree Respondent: Turks Legal LOWER COURT JURISDICTION : Compensation Court LOWER COURT FILE NUMBER(S) : M1-007201/08 LOWER COURT JUDICIAL OFFICER : Arbitrator Bruce McManamey LOWER COURT DATE OF DECISION : 24 April 2009 - 19 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LIST SCHMIDT J TUESDAY, 23 FEBRUARY 2010 30048/09 Warwick James Cole v Wenaline Pty Limited JUDGMENT 1 HER HONOUR: By amended summons filed in July 2009, the plaintiff Mr Cole seeks orders under s 69 of the Supreme Court Act 1970 quashing a decision given on 19 February 2009 by a Workers Compensation Commission Appeal Panel on the ground of judicial error on the face of the record. 2 Mr Cole was injured in October 2005 while he was manoeuvring a 44 gallon drum of oil and fuel. Liability was accepted for his injury and workers compensation payments and medical expenses have been paid. Mr Cole had worked as a farm labourer for the defendant for some 6 years prior to the injury. In February 2008, Mr Cole had a lumbo-sacral disectomy. He claimed permanent impairment, pain and suffering and an assessment of his whole of person impairment under s 66 of the Workers Compensation Act 1987. 3 Mr Cole was assessed as having an 11% whole person injury as the result of the back injury. That assessment had regard to guidelines published by the WorkCover Authority under s 322(1) of the Workplace Injury Management and Workers Compensation Act 1998, which required in [4.1] that assessment of the spine be conducted using 'diagnosis related estimates (DREs)' dealt with in Chapter 15 of the American Medical Association Guides to the Evaluation of Permanent Impairment 5 ('AMA5'), subject to certain modifications specified later in the guidelines. In [4.33] of the guideline such an adjustment was made in relation to the effects of surgery, in respect of which a separate table was provided – table 4.2. There was no controversy as to that aspect of the assessment which was made in accordance with this table. 4 On appeal the impairment was re-assessed by Dr Murray Hyde Page, an approved medical specialist, as 16%, comprising a DRE lumbar category III assessment of 10%, to which was added 3% for the activities of daily living and 3% for surgery persistence of symptoms. This assessment was then reduced by half, because of a 'pre-existing injury, condition or abnormality', the plaintiff having suffered an injury in 1976 for which he had undergone surgery. An appeal from that decision was referred to an Appeal Panel, which dismissed the appeal by majority, the Arbitral member of the Panel dissenting. 5 This appeal was advanced on three grounds: The majority of the Panel failed to give reasons for the decision. The majority of the Panel acted upon and quoted incorrectly the evidence that was before the AMS. The majority of the Panel fell into legal error in their application of s 323 of the Workplace Injury Management Act to the facts. 6 The defendant's case was that the Court's jurisdiction on appeal depended on the existence of an error of law on the face of the record. The grounds of appeal either raised questions of fact or mixed questions of fact and law. A review of the merits was not available in these proceedings. 7 It was argued in written submissions that s 328(6) of the Workplace Injury Management and Workers Compensation Act provided that the decision of a majority of the members of an Appeal Panel is the decision of the Panel. Reasons for decision were given by the majority and by the dissenting Arbitral member. The authorities referred to in the dissenting Arbitral member's decision were not raised by the plaintiff and were not relevant to the concept of a deductible proportion for pre-existing impairment or incapacity, provided for under s 323 of the Workplace Injury Management and Workers Compensation Act. 8 The medical assessment of the medical members of the Appeal Panel was undertaken in light of their clinical experience, training and professional judgment, which was not shared by the Arbitral member of the panel. In matters of medical assessment their opinions ought to take precedence, even if s 328(6) of the Act did not produce that result. The difference between the members of the Panel turned on a factual issue over which reasonable minds might differ, but gave rise to no error of law available to be reviewed under s 69(3) of the Supreme Court Act. 9 The assessment of the majority accorded with the evidence as to Mr Cole's previous injury in 1976, surgery then undertaken to his spine and the residual impairment which resulted, even though he had a good result from that surgery. Such an injury would automatically result in a 10% whole person injury assessment in accordance with AMA 5. The 2005 injury caused damage to the same area, which required further surgery, with symptoms not fully resolved. The majority's assessment of whole person injuries accorded with DRE Category III. 10 The concept of 'taking your victim as you find him,' referred to by the dissenting Arbitral member, was not relevant to an assessment of a deductible proportion for pre-existing impairment or incapacity under s 323 of the Workplace Injury Management Act. The Panel could have deducted 10% from 16% to arrive at a final result of 6%, but by application of clinical experience concluded that the result should be 8% of whole person impairment and thus dismissed the appeal. The conclusion that the prior injury did not result in any prior impairment was not open on the evidence. The legislation 11 The issue lying between the parties turned on s 323 of the Workplace Injury Management and Workers Compensation Act, which provides: 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. Note. So if the degree of permanent impairment is assessed as 30% and subsection (2) operates to require a 10% reduction in that impairment to be assumed, the degree of permanent impairment is reduced from 30% to 27% (a reduction of 10%). (3) The reference in subsection (2) to medical evidence is a reference to medical evidence accepted or preferred by the approved medical specialist in connection with the medical assessment of the matter. (4) The Work Cover Guidelines may make provision for or with respect to the determination of the deduction required by this section. (5) (Repealed) 12 The construction of this provision does not appear to have been the subject of judicial consideration, but predecessor legislation has been. While s 323 of the Workplace Injury Management and Workers Compensation Act now focuses on 'a deduction for any proportion of the impairment that is due to any previous injury', s 68A of the Workers Compensation Act 1987 focussed on 'a deduction for any proportion of the loss that is due to any previous injury', in assessing respectively, 'the degree of permanent impairment' in the former and the 'the compensation payable' in the latter. Both sections, nevertheless, concerned themselves with assessing the contribution of former injury, or causation, to the consequences of later injury. Section 68A provided: 68A Deduction for previous injury or pre-existing condition or abnormality (1) In determining the compensation payable under this Division for a loss, there is to be a deduction for any proportion of the loss that is due to any previous injury (whether or not it is an injury for which compensation has been paid or is payable under this Division) or that is due to any pre-existing condition or abnormality. (2) The proportion of a loss that is required to be deducted because of subsection (1) is the deductible proportion for that loss. … (6) If there is a deductible proportion for a loss but the extent of the deductible proportion (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 litigation) that the deductible proportion for the loss (or the relevant part of it) is 10 per cent of the loss, unless this assumption is at odds with the available evidence. (7) The reference in subsection (6) to medical evidence is, in the context of court proceedings, a reference to medical evidence properly admitted in the proceedings or accepted or preferred by the court." 13 This provision was considered In Matthew Hall Pty Ltd v Smart [2000] NSWCA 284; (2000) 21 NSWCCR 34, where it was observed that: 29 Section 68A in its present form was included in the Act in 1996, replacing a provision broadly to the same effect but limited to loss being permanent impairment of the back, neck or pelvis. There were differences in expression, but the structure and language of the original s 68A(1) were similar to that of the current s 68A(1) so far as it denied compensation of a deductible proportion, being - " … any proportion of the loss that is due to: (a) a previous injury for which compensation has been paid or is payable under this Division, or (b) any other previous injury or any pre-existing condition or abnormality." The equivalent to the current s 68A(6) was then s 68A(8). 30 The background to the original s 68A, in the decisions referred to in the passage next set out, was explained in D'Aleo v Ambulance Service of New South Wales (NSWCA, 12 December 1996, unreported). In that case the appellant had pre-existing degenerative changes to her back, although they were asymptomatic. It was argued that a pre-existing condition which was asymptomatic and had not resulted in any prior impairment in the sense of physical disability or incapacity was insufficient to attract s 68A. Cole JA, with whom Handley JA and Cohen AJA agreed, said - "The terms of s 68A(1) are in my judgment tolerably clear. The employer who is liable in respect of an injury causing permanent impairment of the back, neck or pelvis is not liable in respect of 'any proportion of the loss that is due to' the factors referred to in (a) and (b). The circumstances referred to in (a) are those in respect of which compensation has been paid or is payable under Division 4. The approach of the courts in Rodios v Trefel [(1937) 11 WCR NSW 285], King v Hayward [(1943) 67 CLR 488] and TAFE v Pitt [(1993) 9 NSWLR CCR 309] is negated. However the legislature went further by enacting (b). Prior non-compensable injuries, pre-existing conditions or abnormalities result in a deductible [sic] proportion being determined for which the employer liable in respect of the injury causing the permanent impairment of the back, neck or pelvis is not to be responsible. The words 'any pre-existing condition' in my view include a degenerated back caused by the advent of age. Insofar as the permanent impairment of the back as found is due to that pre-existing condition, an appropriate deduction for the effects of the pre-existing condition is to be made. In the circumstances mentioned in subsection (8), it is 10%." 31 In Government Cleaning Service v Ellul (1996) 13 NSW CCR 344 at 349 it had been said that s 68A(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, s 68A(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 s 68A(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. What was not in contest below 14 There was no issue as to the injury suffered by the plaintiff in 2005 or the result, a prolapse with left sided sciatica, with an unsuccessful discectomy later undertaken. There was also no issue that the injuries fell for assessment within the DRE category III 'lumbo-sacral injury or complaint due to ongoing radiculopathy' and no contest as to the assessment of the plaintiff's 16% whole person impairment. There was also no issue that there had been an earlier injury in 1976 to the plaintiff's back, which arose for consideration under s 323. What was contested 15 The issue for the Appeal Panel under s 323 was whether any proportion of the plaintiff's permanent impairment was due to his previous injury, that having been assessed by Dr Murray Hyde-Page as having contributed to 50% of the impairment. It was the plaintiff's case that the majority of the Appeal Panel failed to give adequate reasons for its conclusions, had misquoted and acted upon an incorrect understanding of the evidence and had failed to correctly apply the requirements of s 323 of the Workplace Injury Management and Workers Compensation Act to the facts, by failing to consider the evidence in the light of the causation on which the section focussed. The approach adopted constituted an error of law. The majority's reasons 16 In making an assessment as to whether any deduction should be made under s 323, consideration must be given to the evidence as to the impairment suffered. Even if a previous injury was asymptomatic, if it is concluded on the evidence that it contributed to the impairment present after the second injury, it must lead to a deduction. If the previous injury was, however, not a contributing factor to that impairment, there can be no deduction made. 17 After noting their agreement with Dr Murray Hyde-Page's assessment of 16% of whole of body impairment, the majority observed: 57. The AMS concluded that Mr Cole had a 16% WPI at the time of his assessment in November 2008. This figure was made up of 10% WPI for being in DRE Category III, with an additional 3% for interference with activities of daily living, and a further 3% for the persistence of radiculopathy post-operation. This figure is assessed by all as being correct. 58. The AMS then made a deduction of one-half of this impairment on the basis of three facts: i. The previous history of disc surgery at the same level in 1976 ii. Noting that Mr Cole had had ongoing symptoms with his back ever since then '... niggling pain and stiffness ever since'. iii. Noting that there were ' ... significant degenerative changes present in the lower lumbar spine' at the time of his injury in October 2005. 59. Both of the AMSs on the Appeal Panel agree with the AMS's assessment of deduction, noting that there is no scientifically accurate method of reaching this figure, but that it is reached by taking into consideration all the available evidence and information, and then applying medical judgement based on knowledge and experience. 18 What s 323 required was a deduction for any proportion of the impairment that is due to any previous injury, pre-existing condition or abnormality. The majority noted the defendant's contention that Mr Cole's previous problems with his lumber spine contributed to at least half of his present impairment and observed: 61. To suggest as the Arbitrator has done, that Mr Cole's previous problems with his lumbar spine are not a substantial contributing factor to his present impairment, seems to ignore medical opinion and available information in this matter. 62. It is not a matter of predisposition or vulnerability, it is a matter of the previous impairment. That is, an impairment that was present prior to the injury in October 2005. The fact that Mr Cole was able to continue with his normal work (despite his ongoing symptoms) after his injury in 1976 does not mean that there was no impairment present. For example, at the present time a person having a very successful operation on his lumbar spine, who obtains an excellent recovery is assessed as having 10% WPI according to AMA5, and the WorkCover Guides. 19 The view of the majority of the Appeal Panel was clearly that the evidence showed that there was such a previous impairment in this case. At [63], it explained its approach in this way: Hypothetically, it is suggested that if Mr Cole had been examined prior to his injury in October 2005, and taking into account his history of surgery at the lumbosacral level plus the history of ongoing symptoms since that time, as well as the significant degenerative changes noted on investigation, he would certainly have rated a level of WPI. The AMS has assessed this impairment as half of his present impairment, and the medical members of the Appeal Panel are of the opinion that this assessment is realistic, and that in the same circumstances presented to the AMS in the MAC, would have found a deduction of a similar amount. 20 A deduction made under s 323 depended on a conclusion that the impairment assessed after the injury in question was in part 'due to' the previous injury, pre-existing condition or abnormality. There was evidence of 'occasional niggling back pain and stiffness', after the earlier injury. There was also evidence that the plaintiff had worked as labourer. What the 'niggling pain and stiffness', was due to, was not a matter dealt with by the majority. 21 The view of the majority was that irrespective of the outcome of the earlier procedure to the spine, there was a level of impairment present prior to the second injury and that it must have contributed to the impairment assessed after the second injury, thus requiring a deduction under s 323. The majority concluded at [64] and [65] that: 64. It is again pointed out that once a person has had surgery to the lumbar spine irrespective of the outcome, that person does have a level of residual impairment present. 65. In the present case, to suggest that there is no deduction under section 323 is not acceptable to the medical members of the Appeal Panel. The Arbitral members' reasons 22 The Arbitral member approached the issue in a different way, taking the view that a pre-existing condition which made a person more vulnerable to subsequent injury, could not of itself result in a conclusion that it had contributed to an impairment which followed a later injury. The evidence had to establish that such a contribution had actually occurred. He dealt with the evidence at [67] to [70]: 67. The Appellant initially suffered injury in or about 1975 or 1976. He had a L5/S1 discectomy. He had a good result from the surgery. He told Dr Hope on 5 June 2008 that he had an excellent recovery returning to full laboring duties without continuing symptoms. Dr Wallis was told that after the surgery the symptoms then settled. He required no further treatment after this procedure and before his work injury in October 2005. The AMS was told that the Applicant had a very good result following the surgery and he had almost complete resolution of his back problems. Upon further questioning the Applicant admitted he had occasional niggling back pain and stiffness ever since. He only developed leg symptoms after the incident in 2005. After the surgery in the 1970s the Appellant returned to working in laboring type employment in cotton farms for over 20 years. It is clear that any continuing symptoms that the Applicant(sic) suffered during that period were minor. 68. The Appellant suffered further injury on 25 October 2005. He was lifting very heavy drums of fuel which he had to manoeuvre as well as doing other heavy work. This involved a lot of twisting. By 2pm he developed low back pain and he had to leave work and go home. By the next day the low bad pain and stiffness was much works and he had pain shooting down his left leg. An MRI carried out in January 2006 disclosed a central left para-central bulge at L5/S1 contacting the adjacent nerve root. The Appellant underwent a further discectomy in February 2008. 69. When seen by the AMS the Appellant complained of severe low back pain and stiffness, together with pain in the left buttock and left calf, particularly when driving. There was burning sensation in his right foot. He had numbness at the top of his left foot and toes. 70. On examination there was significant stiffness in his lumbar spine with muscle guarding and virtually no spinal movement. When lying down straight leg raising was suggestive of a positive sciatic tension in the left leg. There was an absent left ankle reflex. He also had sensory changes in the dorsal of his left foot. 23 As to impairment after the first injury, it was concluded: 45. There is no evidence that there was any residual radiculopathy following the 1975 surgery. Equally there is no evidence that the Appellant suffered any restriction in his activities of daily living prior to the injury on 25 October 2005. There is also no evidence that the prior surgery contributes to either the current residual radiculopathy the current restriction in activities of daily living. If the October 2005 injury had not occurred the Appellant would probably have continued as he was without radiculopathy or restriction. 24 It should be observed in passing that there is a difficulty with the numbering of the paragraphs in the judgment below, hence the reference here to paragraphs which seem out of sequence. The arbitrator concluded at [47] to [51]: 47. In determining an appeal, an Appeal Panel is entitled to rely upon the medical expertise of its members. A view was expressed by the medical members of the Panel that, "medically", the medical members explained: - "The worker had a previous problem at the same (L5-S1) disc level. So that level was already abnormal and "set" for further problems in the future." 48. That interpretation does not explain how the previous injury contributes to the current level of impairment. What is required is some explanation of the matters to be taken into account when assessing an impairment pursuant to AMA5 as modified by the AMA Guidelines. Those matter(sic) are considered at paragraphs 34 to 36 above. It is then necessary to show how the pre-existing condition contributes to those factors. The medical members of the Panel have not been able to substantiate how the previous injury and surgery contributes to the factors currently making up the existing whole person impairment. The explanation proposed by the medical members is no more than a statement that because there had been previous injury to the L5/S1 disc, the disk was now weakened and now more vulnerable to injury. As has already been explained that is not the basis for a 323 reduction. 49. Equally it is an error to merely assert that there was an assessable impairment existing before the injury on 25 October 2005. It is clear from D'Aleao that it is not the mere existence or non existence of a prior impairment that determines whether there should be a deduction. The question is whether the prior condition contributes to the assessment currently being assessed. 50. In any event it is not possible to establish that the previous injury had contributed to the occurrence of a disc protrusion on this occasion. As has already been explained the circumstances in which the October 2005 injury occurred are such that the same injury may well have occurred in a normal back, unaffected by prior injury or degenerative change. 51. In my opinion if the facts are applied in accordance with the proper legal principles the conclusion must be that there is no deduction pursuant to s.323. Was error shown? 25 The defendant's case was that while it was accepted that s 323 contained an element of causation, the test was controlled by s 323(3). This required an assessment of medical evidence to determine whether any proportion of the plaintiff's impairment was due to his previous injury. Such an assessment did not involve the determination of any legal question. The majority of the Appeal Panel had assessed the evidence and had concluded that 50% of the impairment was due to the previous injury. It followed that any error involved in the majority assessment is an error of fact, not law. 26 There is no question that in so far as the Appeal Panel may have mistaken the evidence in arriving at its assessment that the prior injury resulted in a 50% contribution to the impairment which the plaintiff was suffering, that was an error of fact not amenable to review in these proceedings. It is only if it can be shown that there was an error of law involved in its approach to the resolution of the matter which fell to be decided, namely whether any proportion of the plaintiff's impairment was due to his previous injury, pre-existing condition or abnormality that the relief sought may be granted. 27 In my view such an error was made. 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 As the plaintiff argued, to so approach the exercise required to be undertaken by s 323, was to fall into an error of law. The section is directed to a situation where there is a pre-existing injury, pre-existing condition or abnormality. For a deduction 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 injury. The assessment must have regard to the evidence as to the actual consequences of the earlier injury, pre-existing condition or abnormality. The extent that the later impairment was due to the earlier injury, pre-existing condition or abnormality must be determined. The only exception is that provided for in s 323(2), where the required deduction 'will be difficult or costly to determine (because, for example, of the absence of medical evidence)'. In that case, an assumption is provided for, namely that the deduction 'is 10% of the impairment'. Even then, that assumption is displaced, if it is at odds with the available evidence. 31 The reason for this statutory approach can readily be seen. It is entirely possible that a person could suffer such a catastrophic injury, that the presence or absence of any previous injury, pre-existing condition or abnormality, would make no difference at all to the impairment which resulted from the later injury. An injury which results in death, is an obvious example, albeit not one which would arise for consideration under this section. A more relevant example, in this case, is a second injury which severed the spine. Or, as was discussed in the authorities, an earlier injury which was asymptomatic, may or may not contribute to the impairment which results from a second injury. That is a matter of fact to be assessed on the evidence led in each case. An assumption of the kind here made, namely that surgery to the lumber spine, irrespective of outcome, must always result in a level of residual impairment which contributes to the level of impairment which follows a later injury, has no role to play in that assessment. What must be determined on the evidence is whether any proportion of the permanent impairment present after the second injury was due to the earlier injury. 32 That view of the section accords with the provision made in the guidelines established under s 322, which adopt the AMA 5 Guide. Paragraph [1.6b] Apportionment Analysis of the Guide provides: Apportionment analysis in workers' compensation represents a distribution or allocation of causation among multiple factors that caused or significantly contributed to the injury or disease and resulting impairment. The factor could be a pre-existing injury, illness, or impairment. In some instances,, the physician may be asked to apportion or distribute a permanent impairment rating between the impact of the current injury and the prior impairment rating. before determining apportionment, the physician needs to verify that all the following information is true for an individual: 1. there is documentation of a prior factor. 2. The current permanent impairment is greater as a result of the prior factor (ie, prior impairment, prior injury, or illness). 3. There is evidence indicating the prior factor caused or contributed to the impairment, based on a reasonable probability (<50% likelihood). The apportionment analysis must consider the nature of the impairment and its possible relationship to each alleged factor, and it must provide an explanation of the medical basis for all conclusions and opinions. Most states have their own customized methods for calculating apportionment. Generally, the most recent permanent impairment rating is calculated, and then the prior impairment rating is calculated and deducted. The remaining impairment rating would be attributed or apportioned to the current injury or condition. 33 This statutory scheme adopts a similar approach. It does not provide that the mere existence of a previous injury, even to the same body part, as was the case here, automatically results in a deduction under s 323. Before a deduction may be made, consideration must be given to the evidence as to whether or not the earlier injury in fact contributed to the permanent impairment identified after the later injury. It was argued for the defendant that the majority's reasons showed that it had not proceeded by rote. They were medical specialists who agreed with the conclusion reached by the specialist appealed from, that there was a previous impairment which had contributed to the impairment identified as existing after the second injury. They had not misunderstood the section, but had applied it. 34 I am unable to accept the defendant's submission that the majority of the Appeal Panel understood and applied the section to the evidence in this way. Section 323 requires that a conclusion be reached as to whether or not any proportion of permanent impairment assessed resulted from an earlier injury, pre-existing condition or abnormality. In a case such as this, that conclusion must be reached on the evidence led as to the actual consequences of the earlier and later injuries, unless the assumption provided in s 323(2) applies. 35 In Campbelltown City Council v Vegan & Ors [2006] NSWCA 284; (2006) 67 NSWLR 374, it was said: 121 Where it is necessary for the Panel to make findings of primary fact, in order to reach a particular conclusion as to the existence, nature and extent of any physical impairment, it may be expected that the findings of material facts will be set out in its reasons. Where facts are in dispute, it may be necessary to refer to evidence or other material on which findings are based, but the extent to which this is necessary will vary from case to case. More importantly, where more than one conclusion is open, it will be necessary for the Panel to give some explanation of its preference for one conclusion over another. That aspect may have particular significance in circumstances where the medical members of a Panel have made their own assessment of the applicant's condition and have come to a different conclusion from that reached by other medical practitioners, as set out in reports provided to the Panel. 122 On the other hand, to fulfil a minimum legal standard, the reasons need not be extensive or provide detailed explanation of the criteria applied by medical specialists in reaching a professional judgment: see Soulemezis at 273-274 (Mahoney JA) and 281-282 (McHugh JA). At least, that will be so where the medical science is not controversial: if it is, a more expansive explanation may be required. 36 In this case the difficulty, it seems to me, is that the majority proceeded on the basis of an assumption as to what will be the situation in every case where an earlier injury to the spine has occurred, 'irrespective of outcome'; rather than focussing on the evidence of what the outcome in fact was, after the earlier injury and determining how that contributed to the impairment present after the second injury. That required an assessment of the evidence to which the dissenting member made reference. That assessment was not undertaken. 37 The evidence suggested that the degree of impairment before and after the second injury was quite different. Why the degree of impairment present after the second injury was found to be due to the previous injury was not explained, other than by reference to the assumption which the majority made. 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. 39 There was a further difficulty with the majority's approach. They accepted the assessment of the plaintiff's impairment after the second injury of 16%, including a 10% impairment for being in DRE category III. To that 10% was added 3% for the activities of daily living and 3% for surgery persisting symptoms. The consequence of the majority's adoption of the assumption it referred to, was an assessment of whole of back impairment following the 1976 injury of 10%, according to AMA 5. That appears to reflect a view that there was no difference in that aspect of the plaintiff's whole of body impairment, it was 10% both before and after the second injury. Notwithstanding this, the majority also accepted that the assessment of 50% contribution of the prior injury to the current impairment was correct, leaving a final outcome of 8%. How this could follow as a matter of logic, is not apparent. 40 What is apparent from the decision is that the majority conducted its assessment on a basis inconsistent with what s 323 required. The appeal must, accordingly be upheld, with an order as to costs, other than those for the costs thrown away when the matter could not proceed when originally listed for hearing, as the result of the plaintiff's counsel's difficulty. Orders 41 For the reasons given, I order that: 1. The decision be quashed and the matter referred to the Appeal Panel to be dealt with according to law. 2. The defendant bear the plaintiff's costs of the proceedings, other than the costs thrown away in respect of the hearing listed on 16 December 2009. The Plaintiff is to bear the defendant's costs, in that respect. ********** 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. 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