Supreme Court New South Wales Medium Neutral Citation: Geoffrey Hallmann v The National Mutual Life Association of Australia Limited [2017] NSWSC 151 Hearing dates: 18 November 2016 Date of orders: 02 March 2017 Decision date: 02 March 2017 Before: Wilson J Decision: (1) Second further amended summons is dismissed. (2) No order as to costs. Catchwords: ADMINISTRATIVE LAW – judicial review – workers compensation – seriously injured worker – work capacity assessment – chronic fatigue syndrome Legislation Cited: Supreme Court Act 1970 (NSW) Workers Compensation Act 1987 (NSW) Workplace Injury Management and Workers Compensation Act 1998 (NSW) Cases Cited: Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 Kirk v Industrial Court (2010) 239 CLR 531 Category: Principal judgment Parties: Plaintiff: Geoffrey Peter Hallman First Defendant: The National Mutual Life Association of Australia Limited Second Defendant: CGU Workers Compensation (NSW) Limited Representation: Counsel: Mr P Latham (Plaintiff) Mr C Jackson (First and Second Defendants) Solicitors: Harris and Harris Solicitors (Plaintiff) Bartier Perry (First and Second Defendants) File Number(s): 2016/00062229 Publication restriction: None. Judgment 1. The plaintiff in these proceedings seeks to challenge decisions made by the second defendant in which it was determined that the plaintiff was not a seriously injured worker as contemplated by the Workers Compensation Act 1987 (NSW), in the form that applied from February to August 2015, ("the Act"). 2. The plaintiff contends that the second defendant fell into jurisdictional error in one or all of three ways: by breaching the relevant legislative provisions; without evidence or irrationally; and without giving reasons. He argues that, because the decision makers were exercising functions under the Act, the decisions are amenable to judicial review. 3. The plaintiff invokes the supervisory jurisdiction of this Court pursuant to s 69 of the Supreme Court Act 1970 (NSW) and asks the Court to set aside the decisions of the second defendant. Factual Background 1. From 1992 to 1996 the plaintiff was employed by the first defendant, National Mutual Life Association of Australasia Ltd, trading as AXA. In 1992, the plaintiff contracted acute Epstein Barr virus infection from a colleague which resulted in glandular fever. The plaintiff experienced flu like symptoms, including prominent fatigue. The plaintiff took some months off work to recover from the condition. Glandular fever is a known prelude to Myalgic Encephalomyelitis / Chronic Fatigue Syndrome ("ME/CFS"). 2. Between March 1994 and November 1996, the plaintiff was employed as a Trainee Sales Manager. He is said to have enjoyed good health until late 1995 / early 1996. The plaintiff, during 'off peak' times of business was working between 60 to 80 hours per week. 3. The plaintiff began experiencing symptoms similar to those experienced when he had Glandular Fever, including fatigue. There was a period which culminated in 'crisis' and on 29 November 1996 the plaintiff left work due to disability. This is the date of the injury in question, although the onset of injury was earlier. 4. In 1998, the plaintiff was diagnosed with ME/CFS, with overlapping Fibromyalgia, by Dr Helen Willoughby and subsequently by Dr Iain Stewart. This continues to be the prevailing diagnosis. An explanation of the condition is provided in the evidence of Dr Bird: "The prevailing view of those who research and treat the condition is that it involves 'widespread inflammation and multisystemic neuropathology' that it involves 'profound dysregulation of the central nervous system (CNS) and immune system, dysfunction of cellular energy metabolism and ion transport and cardiovascular abnormalities'." (CB 2:23, p.454) 1. Currently, the plaintiff has a work capacity of approximately 15 hours and he is employed as a tutor at the Southern Cross University. Procedural History 1. In 2002, the Plaintiff filed a claim in the then Compensation Court of New South Wales, claiming weekly compensation pursuant to s 36 of the Act for lost earnings as a result of chronic fatigue syndrome. The chronic fatigue was said to be caused by the nature and conditions of the plaintiff's employment. The claim was transferred to the Workers Compensation Commission and, by agreement between the Commission and the employer (the first defendant), the plaintiff was awarded ongoing weekly compensation on the basis that he was totally incapacitated for work. 2. In late 2005, the plaintiff filed another claim for permanent impairment in the Commission with respect to the same injury. Because the date of the injury was November 1996, the plaintiff was to be assessed in respect of that claim under the "table of disabilities" as it applied in November 1996. The plaintiff claimed impairment with respect to multiple body parts. 3. Four of the body parts or systems claimed by the plaintiff, ultimately returned a 0% permanent impairment assessment, those being the bowel, visual system, hearing and brain. With respect to his other claimed impairments, he was awarded the following: "1% permanent loss of use of each arm at or above the elbow; 1% permanent loss of use of each leg at or above the knee; 1% permanent impairment of the neck; 1% permanent impairment of the back; 10% permanent loss of use of sexual organs." 1. On 26 April 2006, the Plaintiff appealed to the Commission against a medical assessment certificate ("MAC"). The MAC was issued by an Approved Medical Specialist, Dr Ivan Lorentz. The Plaintiff sought to have the medical assessment reviewed pursuant to s 327(3) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the 1998 Act") on a number of grounds, being: the availability of additional relevant information; that the assessment was made on the basis of incorrect criteria; and that the assessment contains demonstrable error. 2. The Registrar was satisfied that at least one of the grounds was made out and, in accordance with s 327(4) of the 1998 Act referred the appeal to a differently constituted Appeal Panel for a review of the original medical assessment. 3. On 9 October 2007, the Appeal Panel revoked the MAC of Dr Lorentz and, in its place, issued its own. The Appeal Panel's findings were that the Plaintiff was suffering a 1% permanent impairment to each of his limbs; 1% to his neck and back; 10% loss to his sexual organs functioning; and 0% permanent brain damage. The Panel concluded that the levels of impairment were low, and subsequently awarded the plaintiff a lump sum award of $8,750 compensation. No compensation was awarded for pain and suffering. 4. In July 2014 the plaintiff filed further proceedings in the Commission seeking additional lump sum payment compensation in accordance with s 66 of the Act. This component of the plaintiff's claim is yet to be resolved; however, it is not the subject of these proceedings. The Current Proceedings 1. The plaintiff seeks judicial review of two decisions made by the second defendant, CGU Workers Compensation. The decisions are as follows. The First Decision 1. In January 2015, the second defendant decided to carry out a work capacity assessment of the plaintiff, pursuant to s 44A of the Act. The second defendant notified the plaintiff in writing of its intention to conduct the work capacity assessment on 13 March 2015, informing the plaintiff that the assessment had commenced as at 16 January 2015. The second defendant anticipated that it would have a decision in relation to the plaintiff's work capacity by 10 April 2015. The plaintiff was advised that the work capacity decision could impact on the weekly benefits entitlement and that it was likely that weekly payments would cease. 2. On 28 May 2015, the decision was made by the second defendant that the weekly payments of the plaintiff would be reduced. The payment was reduced from $917.63 to $172.12. The reduction was said to be as a consequence of the plaintiff's demonstrated ability to work, his earnings and due to the application of the different weekly payments entitlement formula in the new s 38(7) of the Act, as introduced with the 2012 weekly payments amendments. 3. The second defendant relevantly found that the plaintiff had suffered a work related injury which resulted in a permanent impairment. It also found that the permanent impairment rendered the plaintiff incapacitated to work beyond 15 hours per week. However, the second defendant was not satisfied that the plaintiff was, within the meaning of s 32A of the Act, a "seriously injured worker". 4. The plaintiff was notified of the decision in the following: "I note that an insurer is not to conduct a work capacity assessment if an existing recipient is a seriously injured worker (Schedule 6, Part 19H, Division 2, Section 10 of the Workers Compensation Act 1987). In consideration of this requirement I have reviewed the definition of a 'seriously injured worker' as provided in Section 32A of the Workers Compensation Act 1987. I do not consider that you meet the necessary requirements to be deemed a seriously injured worker. In order to be considered a seriously injured worker: - You must be a worker whose injury has resulted in a permanent impairment AND - You must be assessed by a trained assessor to have permanent impairment of more than 30% OR - An approved medical specialist has declined to make an assessment of your condition OR - CGU as the insurer, must be satisfied that the degree of your permanent impairment is likely to be more than 30%. I agree you are a worker whose injury has resulted in a permanent impairment. CGU have paid a lump sum permanent impairment benefit to you in accordance with Section 66 of the Workers Compensation Act 1987. As your injury was prior to 1/1/2002, this payment was made in accordance with a Table of Maims assessment. This payment was for $8750 and was made to you on 11/12/2007 excluding a 10% advance payment of $875.00 made to Medicare Australia, following a Workers Compensation Commission decision on 30/10/2007. However, I do not consider you meet the additional criteria provided in the definition of seriously injured worker because: - You have not been assessed by a trained assessor to have permanent impairment of more than 30% - An approved medical specialist has not declined to make an assessment of your condition - CGU as the insurer is not satisfied that the degree of your permanent impairment is likely to be more than 30%." (CB 3:41, p.1720) The Second Decision 1. The plaintiff sought internal review of that decision pursuant to s 44(1)(a) of the Act on the grounds that the assessment should not have occurred because he was, in accordance with the Act's definition, a seriously injured worker, or because it was unfair to conduct the assessment. If the plaintiff was "a seriously injured worker" the second defendant would not be able to conduct a work capacity assessment upon him. 2. On 23 July 2015, the second decision, being the determination of the internal review, was made. The result of the internal review by the second defendant resulted in substantially similar findings to the first decision. 3. The second defendant indicated that it had, again, considered the material and the plaintiff's additional submissions. In answer to whether or not the plaintiff was a seriously injured worker, the decision was in the negative. "CGU agree with your statement that an insurer is not to conduct a work capacity assessment if an existing recipient is a seriously injured worker (Schedule 6, Part 19H, Division 2, Section 10 of the Workers Compensation Act 1987) In order to be considered a seriously injured worker: - You must be a worker whose injury has resulted in a permanent impairment AND - You must be assessed by a trained assessor to have permanent impairment of more than 30% OR - An approved medical specialist has declined to make an assessment of your condition OR - CGU as the insurer, must be satisfied that the degree of your permanent impairment is likely to be more than 30%. As part of the work capacity decision made on 28 May 2015, consideration was given to whether or not you meet the requirements of a seriously injured worker as provided in Section 32A of the Workers Compensation Act 1987. As your injury was prior to 1/1/2002, you have been paid a lump sum permanent impairment in accordance with Section 66 of the Workers Compensation Act 1987 in accordance with a Table of Maims assessment. This payment was for $8750 and was made to you on 11/12/2007 excluding a 10% advance payment of $875.00 made to Medicare Australia, following a Workers Compensation decision on 30/10/2007. As such, I agree you are a work whose injury has resulted in a permanent impairment. However, I do not consider you meet the additional criteria provided in the definition of seriously injured worker because: - You have not been assessed by a trained assessor to have permanent impairment of more than 30% OR - An approved medical specialist has not declined to make an assessment of your condition OR - CGU as the insurer is not satisfied that the degree of your permanent impairment is likely to be more than 30%. I do not consider that you meet the necessary requirements to be deemed a seriously injured worker pursuant to Section 32A of the Workers Compensation Act 1987 at this point in time. As such, I consider you may be the subject of a work capacity decision." (CB 3:44, p.1761) 1. These were the reasons given to the plaintiff in respect to whether or not he was a seriously injured worker. 2. The Plaintiff appealed these decisions unsuccessfully to the Merit Review Authority and also the WorkCover Independent Review Office. The Submissions of the Parties The Plaintiff's Submissions 1. The plaintiff contends that, for the decision maker to be satisfied as to whether the plaintiff was a seriously injured worker the defendant had to conclude that there was evidence that the plaintiff fell below the threshold of 30% incapacity. He submits that there was no such evidence; to the contrary there was a weight of evidence to establish that the plaintiff was incapacitated to an extent greater than 30%. On that basis, s 44A(4) provided that the work capacity assessment should not have been conducted. It is argued that the reasons provided by the decision makers did little more than refer to the statutory provisions, without exposing the reasoning process. The Defendant's Submissions 1. The defendant submits that the plaintiff's case is misconceived because it is based upon an incorrect understanding of s 32A of the Act. It is submitted that, correctly understood and applied, s 32A did not operate such as to prevent the insurer from making a work capacity decision, and there was no breach of s 44A(4). The defendant contends that the reasons given for the decisions were adequate in the circumstances. Determination 1. The 2012 amendments to the Act provides for a scheme of weekly compensation by way of income support to injured workers. The relevant provisions of the Act are ss 32A through 58. "Work capacity decisions" can be made by the insurer and such decisions affect weekly compensation payments to an injured worker. 2. There are various statutory mechanisms of review of decisions of this nature. There do not appear to be any previous instances where judicial review of such decisions has been sought or undertaken. 3. Despite that, there does not seem to be any barrier to judicial review of the nature sought by the plaintiff. Although the second defendant is a private company, when making decisions relevant to work capacity and entitlement to weekly compensation payments it exercises statutory powers as an agent of the Nominal Insurer, pursuant to ss 154A, 154B and 154G of the Act. Further, s 43(1) of the Act appears to contemplate judicial review. 4. I proceed on the basis that the impugned decisions are amenable to judicial review. 5. To exercise judicial review, the Court must be satisfied that there has been jurisdictional error, such as a mistaken assertion or denial of jurisdiction, or a misapprehension of the nature and extent of jurisdiction: Kirk v Industrial Court (2010) 239 CLR 531 at [72]. 6. It is noted that the plaintiff has already pursued a number of avenues for review of the relevant decisions. He sought an internal review of the work capacity decision pursuant to the then s 44(1)(a) of the Act, raising as one of the grounds his contention that an assessment should not have been conducted because he was a "seriously injured worker". When the decision was affirmed on internal review, the plaintiff appealed without success to the Merit Review Authority (pursuant to s 44(1)(b) of the Act) and to the WorkCover Independent Review Office (pursuant to s 44(1)(c) of the Act). 7. That he has availed himself of a number of earlier mechanisms of review may be relevant to the question of the exercise of this Court's discretion, should error be establish and the discretion enlivened. 8. Here, the plaintiff contends that the second defendant was not entitled to perform a work capacity assessment, by virtue of the operation of s 44A(4) of the Act. That provision, which provides a mechanism for determining what a worker is capable of earning in suitable employment, is in the following terms. "44A Work capacity assessment (1) An insurer is to conduct a work capacity assessment of an injured worker when required to do so by this Act or the WorkCover Guidelines and may conduct a work capacity assessment at any other time. (2) A work capacity assessment is an assessment of an injured worker's current work capacity, conducted in accordance with the WorkCover Guidelines. (3) A work capacity assessment is not necessary for the making of a work capacity decision by an insurer. (4) An insurer is not to conduct a work capacity assessment of a seriously injured worker unless the insurer thinks it appropriate to do so and the worker requests it. (5) An insurer may in accordance with the WorkCover Guidelines require a worker to attend for and participate in any assessment that is reasonably necessary for the purposes of the conduct of a work capacity assessment. Such an assessment can include an examination by a medical practitioner or other health care professional. (6) If a worker refuses to attend an assessment under this section or the assessment does not take place because of the worker's failure to properly participate in it, the worker's right to weekly payments is suspended until the assessment has taken place." 1. A work capacity decision may be made at any time, independent of a work capacity assessment, and regardless of whether the worker is a seriously injured worker: s 43(3) and s 38(5) of the Act. 2. Whilst s 44A(4) provides that an insurer is not to conduct a work capacity assessment of a seriously injured worker unless it is considered appropriate by the insurer and the worker requests it, the insurer is required to conduct such an assessment in compliance with other provisions of the Act: s 38(4)(a); s 38(4)(b). 3. The dispute to be resolved turns to a significant extent upon the construction of s 32A of the Act, the definition of a 'seriously injured worker' which provides: "[…] seriously injured worker means a worker whose injury has resulted in permanent impairment and: (a) the degree of permanent impairment has been assessed for the purposes of Division 4 to be more than 30%, or (b) the degree of permanent impairment has not been assessed because an approved medical specialist has declined to make an assessment until satisfied that the impairment is permanent and the degree of permanent impairment is fully ascertainable, or (c) the insurer is satisfied that the degree of permanent impairment is likely to be more than 30%." 1. For present purposes, s 32A(c) is the material provision. There is no dispute that the plaintiff's injury resulted in permanent impairment. 2. The plaintiff asserts that, to make a determination that a worker is not a seriously injured worker; the insurer must be positively satisfied that the worker's whole person impairment is not more than 30%. This, however, inverts the language of the provision. What is required is a state of satisfaction that the degree of impairment is likely to be more than 30%. 3. The insurer is entitled, and in specific instances required, to conduct a work capacity assessment unless "satisfied" that the level of impairment "is likely to be more than 30%". 4. I do not accept the plaintiff's contention that the decision maker was not entitled to conduct the assessment because of the operation of s 44A(4) of the Act. The prohibition on conducting a work capacity assessment turns on the determination of whether a worker is a seriously injured worker. The plaintiff's complaint in this regard is based upon what I have concluded to be his flawed interpretation of s 32A. 5. It is not necessary for the decision maker to reach a state of satisfaction about the worker's level of impairment as a prerequisite to the conduct of a work capacity assessment. 6. The plaintiff submits that there was no evidentiary or rational basis for the insurer to be satisfied other than that the plaintiff's level of impairment was likely to exceed 30%; however the statute does not require specific evidence as to the level of impairment. 7. There was a large volume of material before the decision maker, including expert independent medical evidence to the effect that the plaintiff's symptomatology was not a complication of ME/CFS (such as the report of Professor Wakefield). That evidence, coupled with the objective fact that the plaintiff was able to undertake work as a university tutor, was evidence available to the decision maker in concluding that it was not satisfied that the plaintiff's level of impairment was likely to be more than 30%. 8. Whilst there was also medical evidence contrary to that of Professor Wakefield, much of what was relied upon by the plaintiff was strident, apparently partisan, and lacking in balance. The decision maker was not obliged to accept it or rely upon it when considering the state of satisfaction contemplated by the legislation. 9. The plaintiff concedes that the statutory test as to a state of satisfaction of a decision maker presents a high bar to challenge: Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360 per Dixon J. It is not the state of satisfaction or otherwise of this Court that determines the matter. 10. I am unable to conclude that the decisions under review were unsupported by evidence, or not open to a rational decision maker. 11. The reasons given by the decision makers for the decisions were succinct, but a lengthy explication was not required. In both decisions, there was discussion of the application of s 44A(4), and the basis of the conclusion that it did not prohibit the review was set out. The reasons recorded the decision maker's lack of satisfaction that the level of impairment was likely to be more than 30%. There was sufficient exposure of the reasoning process to allow the decision to be understood. The Question of Costs 1. The first defendant sensibly and fairly does not seek costs and I do not propose to make an award as to costs. orders 1. Second further amended summons is dismissed. 2. No order as to 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: 27 July 2017