Supreme Court New South Wales Medium Neutral Citation: Broadspectrum (Australia) Pty Ltd v Fiona Louise Wills [2018] NSWSC 1320 Hearing dates: 13 June 2018 Date of orders: 31 August 2018 Decision date: 31 August 2018 Jurisdiction: Common Law - Administrative Law Before: Harrison AsJ Decision: I make declarations that: (1) The certificate and statement of reasons issued by the fourth defendant dated 2 February 2017 is void and of no effect. (2) The certificate and statement of reasons issued by the third defendant on 5 June 2017 is void and of no effect. The Court orders that: (3) The proceedings are referred to the Workers Compensation of NSW to be dealt with according to law. (4) The plaintiff and first defendant are to pay their own costs. Catchwords: ADMINISTRATIVE LAW – Judicial Review - Workplace Injury Management and Workers Compensation Act 1998 (NSW) – whether the Medical Appeal Panel failed to find a demonstrable error in the the Medical Assessment Certificate and statement of reasons of the AMS – whether the Medical Appeal Panel failed to revoke the Medical Assessment Certificate and conduct its own review in circumstances where there was a demonstrable error - whether the Medical Appeal Panel failed to perform its statutory task Legislation Cited: Supreme Court Act 1970 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Workers Compensation Act 1987 (NSW) Workplace Injury Management and Workers Compensation Act 1998 (NSW) Cases Cited: Campbelltown City Council v Vegan [2006] NSWCA 284 Cole v Wenaline Pty Ltd [2010] NSWSC 78 Cullen v Woodbrae Holdings Pty Ltd [2015] NSWSC 1416 Elcheikh v Diamond Formwork (NSW) Pty Ltd (In Liq) [2013] NSWSC 365 Inghams Enterprises Pty Ltd v Lakovska [2014] NSWCA 194 McGinn v Ashfield Council [2012] NSWCA 238 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 NSW Police Force v Registrar of the Workers Compensation Commission of NSW [2013] NSWSC 1792 Nicol v Macquarie University [2018] NSWSC 530 Pereira v Siemens Ltd [2015] NSWSC 1133 Roger v De Gelder [2015] NSWCA 211 Ryder v Sundance Bakehouse Pty Ltd [2015] NSWSC 526 Sadsad v NRMA Insurance Limited [2014] NSWSC 1216 Siddick v WorkCover Authority of NSW [2008] NSWCA 116 State of New South Wales v Hill [2018] NSWSC 54 Vannini v Worldwide Demolitions Pty Ltd [2018] NSWSC 572 Vitaz v Westform (NSW) Pty Limited [2011] NSWCA 25 Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255 Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43, (2013) 252 CLR 480, 88 ALJR 52 Texts Cited: NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment (Fourth edition, 1 April 2016) Category: Principal judgment Parties: Broadspectrum (Australia) Pty Ltd (Plaintiff) Fiona Louise Wills (First Defendant) Workers Compensation Commission of NSW("Second Defendant) Medical Appeal Panel of the Workers Compensation Commission of New South Wales constituted by Arbitrator Ross Bell and Approved Medical Specialists, Dr Lana Kossoff and Brian Parsonage (Third Defendant) Approved Medical Specialist Dr Wasim Shaikh (Fourth Defendant) Representation: Counsel: D J Hooke SC with E E Grotte (Plaintiff) E G Romanuik SC with J L Brazel (First Defendant) Solicitors: Holman Webb Lawyers (Plaintiff) Attwood Marshall Lawyers (First Defendant) Submitting Appearance – Crown Solicitor (Second, Third & Fourth Defendants) File Number(s): 2017/266184 Publication restriction: Nil Judgment 1. HER HONOUR: This is a judicial review from a decision of a Medical Appeal Panel of the Workers Compensation Commission of NSW dated 5 June 2017 relating to s 323 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIM Act). 2. The plaintiff in this matter is Broadspectrum (Australia) Pty Ltd (Broadspectrum). The first defendant is Fiona Louise Wills (Ms Wills). The second defendant is the Workers Compensation Commission of NSW. The third defendant is the Medical Appeal Panel of the Workers Compensation Commission of New South Wales constituted by Arbitrator Ross Bell and Approved Medical Specialists, Dr Lana Kossoff and Dr Brian Parsonage (the Appeal Panel). The fourth defendant is the Approved Medical Specialist Dr Wasim Shaikh (the AMS). The second, third and fourth defendants filed submitting appearances. 3. By summons filed 1 September 2017, Broadspectrum seeks firstly, a declaration pursuant to s 69 of the Supreme Court Act 1970 (NSW) that the decision and the statement of reasons for decision of the Appeal Panel and issued by the Workers Compensation Commission dated 5 June 2017 is void and of no effect; secondly, an order setting aside the decision and the statement of reasons for decision of the Appeal Panel and issued by the Worker's Compensation Commission dated 5 June 2017; thirdly, an order pursuant to r 59.10(2) Uniform Civil Procedure Rules 2005 (NSW) (UCPR) extending the time to apply to the Court for the commencement of judicial review proceedings in respect of the decision and statement of reasons of the AMS issued by the second defendant on 2 February 2017 to the date of the filing of this summons; fourthly, a declaration pursuant to s 69 of the Supreme Court Act that the decision and the statement of reasons for decision of the AMS and issued by the Workers Compensation Commission is void and of no effect; and finally, an order setting aside the decision and statement of reasons for decision of the AMS and issued by the Workers Compensation Commission on 2 February 2017. 4. The decisions to be reviewed in this judicial review are firstly, the decision and statement of reasons for the decision of the Appeal Panel dated 5 June 2017; and secondly, the whole of the decision and statement of reasons of the AMS dated 2 February 2017. Extension of time 1. Broadspectrum sought an order pursuant to the UCPR 59.10(2) extending the time to apply to the Court for the commencement of judicial review proceedings in respect of the decision and statement of reasons of the AMS issued by the Workers Compensation and Commission on 2 February 2017 to the date of the filing of the summons. This was not opposed by the first defendant. The reason for seeking the extension of time was that the plaintiff appealed to the Appeal Panel. It handed down its decision on 5 June 2017 and the summons was filed on that day. While I am not convinced that the extension of time to file the summons to 5 June 2017 is necessary, for the absence of doubt, I grant this extension of time. Background 1. From March 2014 to July 2014, the plaintiff was employed by Broadspectrum as a full time social worker/case manager at the Offshore Processing Centre on Manus Island. 2. The first defendant says as a result of a sexual assault where she was touched inappropriately by a client on 3 May 2014 at the Manus Island facility, she developed, over time, a psychiatric and/or psychological injury. 3. On 11 October 2016 Arbitrator Edwards of the Workers Compensation Commission determined that the first defendant had sustained injury in the course of her employment. 4. The question of the assessment of the first defendant's whole person impairment (WPI) was referred to the AMS who confirmed his medical assessment certificate (MAC) on 2 February 2017. The AMS concluded that the first defendant had sustained a 21% WPI when assessed under the PIRS Rating Scale, which comprised an aggregate impairment of 19% WPI and a treatment effect of impairment of 2% WPI, resulting in 21% WPI. I shall refer to the AMS's decision in more detail later in this judgment. 5. Broadspectrum appealed the decision of the AMS relying on s 327(3)(c) (incorrect criteria) and s 327(3)(d) (demonstrable error) of the WIM Act. 6. The Registrar (the gate keeper) was satisfied that at least one of the grounds of appeal was made out in accordance with s 327(4) of the WIM Act and referred the appeal to the Appeal Panel for review of the AMS's decision. 7. On 5 June 2017, the Appeal Panel confirmed the decision of the AMS and found that the assessment was based on correct criteria; and that there was no demonstrable error on the face of the certificate. I shall refer to the Appeal Panel's decision in more detail later in this judgment. The Statutory Scheme 1. I shall briefly outline the relevant provisions of the statutory scheme. For a worker to receive compensation under s 9(1) of the Workers Compensation Act 1987 (NSW), the worker must show an injury which is defined in s 4 as follows: "In this Act: injury: (a) means personal injury arising out of or in the course of employment, …" 1. No compensation is payable under the Workers Compensation Act pursuant to s 9A(1) in respect of an injury unless the employment concerned was a substantial contributing factor to the injury. Section 9A(1) reads: "(1) No compensation is payable under this Act in respect of an injury (other than a disease injury) unless the employment concerned was a substantial contributing factor to the injury." 1. Chapter 7, Part 7 of the WIM Act provides for medical assessment, including the assessment of the degree of WPI, by an AMS and, by way of review, appeal panels. The scheme was designed to take the function of assessment of injury out of the adversary court system: see Inghams Enterprises Pty Ltd v Lakovska [2014] NSWCA 194 at [1] per Basten JA. 2. Approved Medical Specialists are appointed under the WIM Act to deal with medical disputes which are defined in s 319 to mean: "319 Definitions In this Act: … "medical dispute" means a dispute between a claimant and the person on whom a claim is made about any of the following matters or a question about any of the following matters in connection with a claim: (a) the worker's condition (including the worker's prognosis, the aetiology of the condition, and the treatment proposed or provided), (b) the worker's fitness for employment, (c) the degree of permanent impairment of the worker as a result of an injury, (d) whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion, … (f) whether impairment is permanent, (g) whether the degree of permanent impairment of the injured worker is fully ascertainable." 1. Section 323 provides for the deduction for previous injury or pre-existing condition or abnormality. It reads: "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 Workers Compensation Guidelines may make provision for or with respect to the determination of the deduction required by this section. ..." 1. Section 325 relates to the medical assessment certificate. It reads: "(1) The approved medical specialist to whom a medical dispute is referred is to give a certificate (a medical assessment certificate) as to the matters referred for assessment. (2) A medical assessment certificate is to be in a form approved by the Registrar and is to: (a) set out details of the matters referred for assessment, and (b) certify as to the approved medical specialist's assessment with respect to those matters, and (c) set out the approved medical specialist's reasons for that assessment, and (d) set out the facts on which that assessment is based. …" 1. Appeals against medical assessments are governed by ss 327 and 328 of the WIM Act. 2. Section 327 relevantly reads: "327 Appeal against medical assessment … (3) The grounds for appeal under this section are any of the following grounds: … (c) the assessment was made on the basis of incorrect criteria, (d) the medical assessment certificate contains a demonstrable error. …" 1. Section 328 relevantly reads: "328 Procedure on appeal (1) An appeal against a medical assessment is to be heard by an Appeal Panel constituted by 2 approved medical specialists and 1 Arbitrator, chosen by the Registrar. (2) The appeal is to be by way of review of the original medical assessment. The WorkCover Guidelines may provide for the procedure on an appeal. (3) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the medical assessment appealed against may not be given on an appeal unless the evidence was not available to the appellant before that medical assessment or could not reasonably have been obtained by the appellant before that medical assessment. … (5) The Appeal Panel may confirm the certificate of assessment given in connection with the medical assessment appealed against, or may revoke that certificate and issue a new certificate as to the matters concerned. Section 326 applies to any such new certificate. …" 1. Section 328(2) confines the grounds of appeal which an Appeal Panel may consider, to those pursued by the appellant. 2. Section 331 of the WIM Act requires the Appeal Panel to apply the Guidelines in conducting its review. Section 331 relevantly reads: "331 Guidelines Medical assessments, appeals and further assessments under this Part are subject to relevant provisions of the Workers Compensation Guidelines relating to the procedures for the referral of matters for assessment or appeal, the procedure on appeals and the procedure for assessments." The Guidelines 1. The parties referred to a number of relevant provisions in the NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment (Fourth edition, 1 April 2016) ("the Guidelines"). 2. Clause 1.6 provides "a basic summary of some key principles of the permanent impairment assessment." They include: "Part 2 – Principles of Assessment 1.6 … a. The assessment of the impairment involves a clinical assessment as they present on the day of assessment. In this case, the only day of assessment was when the Plaintiff saw the AMS. … b. Assessors are required to exercise their clinical judgment in determining a diagnosis when assessing permanent impairment and making deductions for pre-existing injuries/conditions. …" 1. Clause 11.10 of the Guidelines refers to pre-existing conditions. It provides: "Pre-existing impairment 11.10 To measure the impairment caused by a work-related injury or incident, the psychiatrist must measure the proportion of WPI due to a pre-existing condition. Pre-existing impairment is calculated using the same method for calculating current impairment level. The assessing psychiatrist uses all available information to rate the injured worker's pre-injury level of functioning in each of the areas of function. The percentage impairment is calculated using the aggregate score and median class score using the conversion table below. The injured worker's current level of WPI% is then assessed, and the pre-existing WPI% is subtracted from their current level, to obtain the percentage of permanent impairment directly attributable to the work-related injury. If the percentage of pre-existing impairment cannot be assessed, the deduction is 1/10th of the assessed WPI." 1. Clause 11.11 of the Guidelines sets out the Psychiatric Impairment Rating Scale (PIRS): "11.11 Behavioural consequences of psychiatric disorder are assessed on six scales, each of which evaluates an area of functional impairment: 1. Self care and personal hygiene (Table 11.1) 2. Social and recreational activities (Table 11.2) 3. Travel (Table 11.3) 4. Social functioning (relationships) (Table 11.4) 5. Concentration, persistence and pace (Table 11.5) 6. Employability (Table 11.6)." 1. Clause 11.12 of the Guidelines provides: "11.12 Impairment in each area is rated using class descriptors. Classes range from 1 to 5 in accordance with severity. The examples of activities are examples only. The assessing psychiatrist should take account of the person's cultural background. Consider activities that are usual for the person's age, sex and cultural norms." The decision of the AMS 1. On 2 February 2017, the AMS took a history relating to the first defendant's injury, summarised her present symptoms and treatment, noted her previous and subsequent work history and detailed any previous accidents before making findings with respect to her mental and physical state upon examination. The AMS then made his findings on the first defendant's level of permanent impairment before completing the PIRS rating form. 2. At [4] the AMS took a history relating to the injury: "Ms Wills was working as a case manager at Manus Island between November 2013 until July 2014. She was sexually assaulted by a transferee, who touched her breast during an Interview. She was not made aware of this person's assault history. She felt unsafe and, unsupported by the organisation. She received some psychological support, and attempted a return to work, but this was unsuccessful. In the months following the alleged assault, she experienced symptoms Including flashbacks, avoidance, emotional labiality, panic attacks, and Impaired cognition. These progressed further despite treatment, to include sleep disturbances, self-harm ideation, and dissociative phenomenon. She has since received treatments In various modalities, although notes that these have not led to a significant reduction in her symptomatology. She was in a relationship at the time of the Incident, lasting 1.5 years. She advises that as a result of her being away, the relationship had become difficult, and she was In very limited contact. She did not contact this person after her return." 1. As to present treatment, the AMS recorded that the first defendant is currently under the care of Dr Andrew Christensen on a weekly basis in Brisbane. Various psychotherapeutic techniques are used during the sessions including Eye Movement Desensitisation and Reprocessing. The first defendant has also been an inpatient at psychiatric hospitals on four occasions, lasting between three and six weeks. She has also undergone several sessions of Electro-convulsive therapy at Belmont hospital, including acute and maintenance treatment. The first defendant is also under the care of psychologist Jacinta Wagner, who has known her for the past three years and she has previously been under the care of Dr Guha another psychiatrist. 2. The AMS referred to the first defendant's present symptoms at [5]: "Ms Wills is now resident by herself in Coorparoo. Ms Wills reports the presence of re-experiencing symptoms and flashbacks about the Manus Island Incident. She denies flashbacks about the other assault. She experiences anxiety symptoms, including panic attacks where she pants with her breath and feels sick. She identified low mood and can often get tearful. She continues to be in fear of being attacked again, particularly when she sees a Middle Eastern person. She has lost interest and concentration in reading and undertaking research. She states that certain things she reads triggers flashbacks of the sexual assault at Manus Island. She has trouble having intellectual conversations. She struggles to focus attention through a movie. She must ask people to repeat their statements. She does not recall discussions on the previous day. She skips meals, and takes the "easy option" with meals. She has put on 20kg since the event. She would visit the gym for spin classes regularly before the injury, but is no longer confident of doing so. She states that her self-care is poor and can often not shower or not change her clothes. Her daughter or friend visit once a week. She reports a "not too bad" relationship with her daughter. She gets along well with her friend, but has lost other friends, who she believes have "not been understanding". She has not tried to get into a relationship in the past 3 years. She has a very good relationship with her father. She has periods of feeling flat and empty. She has emotional liability. She notes dissociative phenomenon where she can lose time and "zone-out". She continues to harbour negative emotions regarding her employer, who she believes did not provide appropriate support. Ms Wills had travelled outside her local area herself, and is able to use public transport (although notes some anxiety). She has had consistent self-harm ideation and has previously attempted to harm herself in several ways. She now continues to scratch herself "to cope with the pain"." 1. Under the sub heading "Details of any previous or subsequent accidents, injuries or conditions" the AMS made the following comments: "Ms Wills has a significant past history of mental illness. She was sexually abused as a child by her grandmother's neighbour, when she was aged 10. She subsequently returned to New Zealand in 1989, and tried to take legal action against the perpetrator. She was advised that it was not worthwhile pursuing charges, as he was old, unwell, and a known paedophile. She received extended counselling over a six-month period. In 2000, she received antidepressants (Lovan) for PMT, and took them for 2 years. She started seeing Dr Guha in 2012 in relation to a sexual assault in 2007. She was also subject to domestic violence from her then partner, who was misusing cannabis. She sought support from a domestic violence group and was on Lovan (she was not sure when this was restarted), and this was Increased. She also visited a psychologist for marital issues. There is a family history of mental illness, with conditions such as PTSD, Depression, and Alcohol Misuse. Ms Wills was in an on and off relationship for 5 years with her children's parents, and this included domestic violence. She notes difficulties with her son, who lives on the Gold Coast. She has not been allowed to meet her grandson." 1. The AMS then went on to record his findings in relation to the first defendant's general health and work history before recording his findings with respect to her physical and mental state upon examination at [5]: "Ms Wills was initially unaccompanied in the interview room, but after the first 30 minutes of the assessment, she became highly agitated and panicky. Her daughter was invited to help settle her down, and stayed for the rest of the interview. She was reasonably dressed, albeit somewhat dishevelled with her hair. Her concentration and memory appeared inconsistent there were periods where she would focus well, and had good memory of events going back several years. She was somewhat slow in her speech. Her mood was low, and her affect was blunted. There were some periods where she used humour. Her thoughts were consumed by anxious themes, and a level of paranoia. There were no formal psychotic symptoms. She noted self-harm and suicidal thoughts, but with no immediate intent. Her insight and judgement were fair. She seemed to have a good understanding of impairment categories, and was clearly reporting an array of symptomatology for each category. In summary, there were some inconsistencies in mental state examination, but the general sense was that of a moderately severe psychiatric condition." 1. Under the heading "Summary", the AMS stated at [7]: "• summary of injury and diagnoses: Ms Hill (presumably Ms Wills) presents with history reflective of the condition of Major Depressive Disorder, which has continued with symptomology to impair her functioning." 1. The AMS stated that in terms of clinical syndromes, the first defendant presented with post traumatic stress disorder (aggravation), major depressive disorder, recurrent (aggravation) as well as alcohol misuse disorder. In terms of developmental and personality disorders, the AMS recorded that a personality disorder was not otherwise specified. The AMS observed that there were some inconsistencies in her presentation, but from an overall perspective, there was evidence of a moderately severe psychiatric disorder. 2. Under the heading "Evaluation of Permanent Impairment" the AMS was asked the following question at 8(e) to (g) and provided answers: "e. Is any proportion of loss of efficient use or impairment or whole person impairment, due to a previous injury, pre-existing condition or abnormality? Yes. (My emphasis) f. If so, please indicate which body part/system is affected by the previous injury, pre-existing condition or abnormality. Psychological. (My emphasis) g. Indicate whether there has been any further injury subsequent to the subject work injury. If this injury has caused any additional impairment this should not be included with the assessment of impairment due to the subject work injury. Not Applicable." 1. Under the heading "The Facts on which the Assessment is Based" the AMS at [9] stated: "The facts on which I based my assessment of whole person impairment are: History, Mental State Examination, Documentation Review." 1. The AMS completed the PIRS rating form stated that first defendant presents with an impairment of 19% WPI. He recorded his brief comments regarding the other medical opinions and findings submitted by the parties and, where applicable, the reasons why his opinion differed. The AMS stated at [10(c)]: "The diagnosis is pretty similar to that expressed in other specialist reports. Contrary to Dr Huntsman's opinion, I do believe there are obvious personality vulnerabilities. These are only minor differences in the impairment ratings." 1. At [11] the AMS was asked what deduction was to be made (if any) for the proportion of the impairment that is due to previous injury or pre-existing condition or abnormality. The AMS answered "Not applicable". (My emphasis). 2. However, in the MAC, the AMS deducted 1/10 for pre-existing injury, condition or abnormality, under s 323 of the WIM Act. 3. There appears to be an inconsistency between [11] and the deduction made in the MAC. Submissions on appeal 1. Both parties made submissions on appeal. It is not necessary to reproduce them here as they are adequately covered in the Appeal Panel's decision reproduced below. The Registrar's (gatekeeper's) decision 1. On 5 April 2017, at [5] the delegate of the registrar stated at [5]: "Upon examination of the MAC and on the face of the application and submissions made, I am satisfied that a ground of appeal as specified in section 327(3)(d) is made out in relation to the AMS's application of section 323 of the 1998 Act." 1. The appeal was referred to the Appeal Panel. The decision of the Appeal Panel dated 5 June 2017 1. The Appeal Panel in its decision at [22] to [27] referred to some authorities relating to s 323. They read: "22. The first task for the AMS, as Campbell J notes in Greater Western Area Health Service v Austin [2014] NSWSC 604 is to assess the body parts referred, "An Approved Medical Specialist's task is to assess the whole person impairment with which the injured worker presents. Whether it be caused by the injury or whether its cause is from an unrelated source, nonetheless the impairment should be recorded. If it is the opinion of the AMS that the losses, or part of them, had been caused for other reasons then an AMS has the power to make an appropriate deduction under s 323 of the 1998 Act, or to vary his assessment as provided at [8(g)] of the MAC." 23. In Ryder v Sundance Bakehouse [2015] NSWSC 526, Campbell J said, "Section 323 as I have already said, requires there to be a deduction for any proportion of the impairment that is due to any pre-existing condition. This is an essential element of the section; indeed it is the pith of it. It is not enough to simply identify that there is a pre-existing condition and that there has been a subsequent impairment and therefore make a deduction under this section because of the existence of the pre-existing condition. Such reasoning fails to consider a necessary condition of the operation of the section; that a proportion of the permanent impairment is due to the pre-existing condition." In Cullen v Woodbrae Holdings Pty Ltd [2015] NSWSC 1416 Beech-Jones J at [46] reiterated the need for evidence of an actual pre-existing condition rather than a predisposition or susceptibility, "This reasoning is equally applicable to s 323 of the WIM Act. Thus to establish a pre-existing condition for the purposes of s 323(1) there must, at the relevant date, be an actual condition although it may be asymptomatic. A mere predisposition or even a susceptibility is not sufficient to constitute a condition." (at 46). 25. In Vitaz v Westform (NSW) Pty Limited [2011] NSWCA 254 the Court said at paragraph 43, "The resulting principle is that if a pre-existing condition is a contributing factor causing permanent impairment, a deduction is required even though the pre-existing condition had been asymptomatic prior to the injury. In the absence of any medical evidence establishing a contest as to whether the pre-existing condition did contribute to the level of impairment, the complaint about a failure to give reasons must fail. An approved medical specialist is entitled to reach conclusions, no doubt partly on an intuitive basis, and no reasons are required in circumstances where the alternative conclusion is not presented by the evidence and is not shown to be necessarily available." 26. Cole v Wenaline Pty Ltd [2010] NSWSC 78 (Cole) is relevant authority for the principle that for a deduction to be properly made there must be evidence that a pre-existing abnormality; condition; or previous injury contributes to the impairment. In Fire & Rescue NSW v Clinen [2013] NSWSC 629 (Clinen), Campbell J refers to D'Aelo v Ambulance Service of New South Wales (1996) NSWCCR 139; Elcheikh v Diamond Formwork (NSW) Pty Ltd (in liq) [2013] NSWSC 365, and Cole. 27. In Clinen Campbell J said, "As Schmidt J pointed out in Cole and Elcheikh, it is necessary to find a pre-existing abnormality or condition, here the latter, actually contributing to the impairment before s. 323 WIM is engaged. This conclusion has to be supported by evidence to that effect. Assumption will not suffice." Campbell J also noted that it is "…necessary for the evidence acceptable to the appeal panel to actually support the connection between a previous injury (here, pre-existing abnormality or condition) and the overall degree of impairment in the instant case."" 1. The Appeal Panel's decision then recorded Broadspectrum's (the appellant) and the respondent's (first defendant) submissions as follows at [28] to [36]: "Appellant's submissions 28. The appellant submits that the AMS erred in failing to apply a deduction of greater than 1/10. The AMS states that a deduction was "not applicable", when the worker was still receiving treatment at the time of the injury. The deduction was inadequate based on the nature of injury found by the Arbitrator, and on the evidence. 29. The AMS erred in making reference to 2 per cent deduction for pre-existing condition without explanation in the "PIRS Schedule". 30. The AMS made findings as to injury, against the findings of the Arbitrator. The AMS ignored the findings of the Arbitrator an substituted his own diagnosis in relation to the injury. 31. The AMS failed to provide a basis for the deduction made. The deduction made was inconsistent with his own diagnosis of the aggravation of PTSD and Major Depressive Disorder in addition to other diagnoses. 32. Given the Arbitrator accepted the diagnosis of Dr Lotz, a significant deduction should be made similar to the deduction made by him. Respondent's submissions 33. The respondent submits that the appellant's submissions are without merit and the MAC should be confirmed. There is no basis for the appellant's submissions that the assessment is based on incorrect criteria. The AMS has used the Psychiatric Impairment Rating Scale and properly completed Table 11.8 PIRS Rating Form under the Guidelines, and has complied with section 319 of the 1998 Act. 34. The referral to the AMS was for the assessment of "psychological injury". The terms of the referral are sufficiently broad for the diagnosis made by the AMS, The AMS is not constrained by the Arbitrator's determination as to the specific type of diagnosis, but has the jurisdiction to make a diagnosis under sections 322 and 326 of the 1998 Act. The AMS is able to make the diagnosis and assessment of impairment arising from the injury. Thus is consistent with Haroun v Railcorp New South Wales [2008] NSWCA 192 (Haroun). 35. The appellant is estopped from arguing that there are grounds for appeal in the working of the referral to the AMS, because issue should have been taken at the time of the referral. 36. The submissions of the appellant on the pre-existing condition are misconceived and not supported by the evidence which was fully considered by both the Arbitrator and the AMS." 1. Under the heading "Discussion" the Appeal Panel at [39] and [40] reproduced the AMS's notes of the history, the summary of injuries and diagnoses, comments in relation to the pre-existing condition or abnormality and his comments at Part 11. 2. The Appeal Panel at [41] stated: "41. The Panel notes that the above comment at Part 11 is inconsistent with the comments of the AMS at Part 8, the history reported, and the deduction of 1/10 applied to the assessment under section 323. The Panel takes the comment at Part 12 to be a "slip", with the intention of the AMS clear, taking the MAC as a whole." 1. The Appeal Panel addressed the s 323 appeal issue stating at [44] to [50]: "44. The appellant submits that the AMS has failed to explain the 1/10 deduction made under section 323, or to take account of the history of the pre-existing condition. The Panel notes that under "present symptoms" the AMS reports on his enquiries as to the source of the symptoms experienced relative to the pre-existing issues, "Ms Wills reports the presence of re-experiencing symptoms and flashbacks about the Manus Island incident. She denies flashbacks about the other assault. She experiences anxiety symptoms, including panic attacks where she pants with her breath and feels sick. She identified low mood and can often get tearful. She continues to be in fear of being attacked again, particularly when she sees a Middle Eastern person. She has lost interest and concentration in reading and undertaking research. She states that certain things she reads triggers flashbacks of the sexual assault at Manus Island. 45. It is clear from the above excerpt and the history taken that the AMS was well aware of the pre-existing condition. The Panel notes that the deduction of 1/10 is consistent with the evidence that Ms Wills' previous condition had improved considerably in the period prior to the injury. She was on some medication, but in a report of 28 April 2013 Dr Nicholas Jetnikoff reports, "As regards current illness there is limited evidence of any current active psychological problems at all at the time of relevance." 46. Additionally, the health screening report for the employer dated 24 September 2013 states, "Suitable for proposed placement and assignment. Minor medical issues identified are considered stable and would not preclude successful assignment." 47. A letter from Dr Saibal Guha, treating consultant psychiatrist, dated 28 December 2013, signifies the end of treatment after a period of six months without a consultation, and says, "... we have discharged your care back to your GP, Dr Dore, as we envisage you are currently travelling well." 48. The clinical note of the GP, Dr Dore, on 16 April 2014, notes the circumstances of the employment on Manus Island and the involvement of Ms Wills in stressful situations in her work there. Dr Dore notes, "Need to keep an eye on this, monitor for PTSD." This suggests some vulnerability, but it is also consistent with the above medical evidence of the condition prior to injury. 49. All of this indicates that Ms Wills was functioning quite well in the period leading up to the injury. This evidence does not support the final opinion of Dr Trevor Lotz as to the pre-existing component. The evidence is consistent with the deduction applied by the AMS of 1/10, as it is difficult to quantify the deductible proportion, and 1/10 is not at odds with the evidence. 50. While the AMS could have expanded on the reasons for his conclusion on section 323, this has led to no error in the assessment. The Panel does not accept the submission of the appellant that the assessment is based on incorrect criteria. The AMS has used the PIRS assessment, as apparent at Table 11.8. The AMS has also considered and applied section 323 of the 1998 Act." 1. The Appeal Panel made a finding that the assessment was based on the correct criteria; there is no demonstrable error on the face of the certificate; and confirmed the decision of the AMS. Grounds of review 1. Broadspectrum says that the decision of the Appeal Panel contained the following jurisdictional errors. They are as follows: (a) The Appeal Panel failed to find demonstrable error in the MAC and statement of reasons of the AMS dated 2 February 2017 in respect of the deduction applied by the AMS pursuant to s 323 of the WIM Act despite acknowledging that the reasons in respect of any deduction pursuant to s 323 of the AMS were inadequate or absent and in so doing, failed to perform its statutory task pursuant to s 328 of the WIM Act, thereby committing a jurisdictional error; (b) The Appeal Panel only has the power to either confirm or revoke the MAC as prescribed by s 328(5) of the WIM Act, but despite acknowledging a failure to provide reasons for the applied deduction, which was a demonstrable error and should have triggered a revocation, the Appeal Panel failed to revoke the MAC and then failed to conduct a review as required by the legislation and determine for itself the contribution of the previous injury, or pre-existing condition or abnormality to the current impairment, thereby committing a jurisdictional error; (c) The Appeal Panel failed to perform its statutory task by not conducting its own review in circumstances where there was a clear demonstrable error, being a clear failure to explain or expose the reasoning and provide reasons for the deduction applied by the AMS, and instead the third defendant engaged in an exercise of justifying the final assessment of the AMS, providing an explanation which it assumed formed the basis of the assessment made by the AMS, thereby acting outside its jurisdiction and committing a jurisdictional error. (a) Failure to find a demonstrable error Plaintiff's submissions 1. Broadspectrum submitted that the reasoning of the Appeal Panel demonstrates that it mistakenly failed to find the error committed by the AMS, that error being a failure to provide any reasons at all for the 1/10th deduction. 2. Broadspectrum referred to the decisions in Pereira v Siemens Ltd [2015] NSWSC 1133 ("Pereira"); Cole v Wenaline Pty Ltd [2010] NSWSC 78 ("Cole"); Elcheikh v Diamond Formwork (NSW) Pty Ltd (In Liq) [2013] NSWSC 365 ("Elcheikh") and Sadsad v NRMA Insurance Limited [2014] NSWSC 1216 ("Sadsad"). 3. In Pereira, Garling J set out the correct steps to be taken in conducting a s 323 deduction at [81] to [90]. They read: "81 The assessment required by s 323 is one which must be based on fact, not assumptions or hypotheses: Elcheikh v Diamond Formwork (NSW) Pty Ltd (In Liq) [2013] NSWSC 365 at [89]; Matthew Hall Pty Ltd v Smart [2000] NSWCA 284 at [33]; Ryder v Sundance Bakehouse [2015] NSWSC 526 at [40]. 82 The process encompassed by s 323 requires the application of each of the following steps before reaching the ultimate conclusion of the existence of a pre-existing injury which has an impact on the assessment of the injury the subject of the worker's claim. 83 The first step requires a finding of fact that the worker has suffered an injury at work which has resulted in a degree of permanent impairment which has been assessed pursuant to s 322 of the 1998 Act: see Elcheikh at [125]. 84 The second step which needs to be addressed is, assuming such an injury has been sustained and impairment has resulted, what is the extent of that impairment expressed as a percentage of the whole person: see Cole v Wenaline Pty Ltd [2010] NSWSC 78 at [38]; Elcheikh at [126]. 85 The third matter to be addressed is whether the worker had any previous injury, or any pre-existing condition or abnormality. The previous injury does not have to be one in respect of which compensation is payable under the 1998 Act. If the phrase "pre-existing condition or abnormality" is to be relied upon, then such condition or abnormality must be a diagnosable or established clinical entity: Fire & Rescue NSW v Clinen [2013] NSWSC 629. 86 A finding of the existence of a previous injury can be made without the presence of symptoms, but there must be evidence which demonstrates the existence of that pre-existing condition: Mathew Hall at [31]-[32]. 87 The pre-existing injury or condition must, on the available evidence, have caused or contributed to the assessed whole person impairment: see Matthew Hall at [32]; Cole at [29]-[31]; Elcheikh at [88] and Ryder at [42]. 88 It cannot be assumed that the mere existence of a pre-existing injury means that it has contributed to the current whole person impairment: Clinen at [32]; Cole at [30]; Elcheikh at [91]. What must occur is that there must be an enquiry into whether there are other causes of the whole person impairment which reflect a difference in the degree of impairment: Ryder at [45]. 89 Next in dealing with the application of s 323, the extent of the contribution, if any, of the pre-existing condition to the current impairment must be assessed in order to fix the deductible proportion. If the extent of the deductible proportion will be difficult or costly to determine, an assumption is made that the deductible proportion will be fixed at 10%, unless that is at odds with the available evidence: s 323(2) of the 1998 Act. 90 Each of these steps, and considerations, is a necessary element of a determination that an assessed whole person impairment is to be reduced by a deductible proportion by virtue of the application of s 323 of the 1998 Act." 1. In Cole, Schmidt J discussed the operation of s 323. Her Honour at [29] to [31] stated: "29 …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." 1. Broadspectrum contended that the Appeal Panel's comment at [50], "the AMS could have expanded on the reasons for his conclusion on section 323", is a misstatement of what the AMS did, there were no reasons to expand upon. The plaintiff submitted that the concluding sentence at [50] that "The AMS has also considered and applied section 323 of the 1998 Act", is a generous remark as if the AMS did consider or apply the terms of s 323, he did not disclose that fact. 2. In Elcheikh, after referring to Campbelltown City Council v Vegan [2006] NSWCA 284 at [121] and [122], Schmidt J stated at [69] and [70]: "69 The matters raised on Mr Elcheikh's appeal could not be resolved by the Appeal Panel undertaking its own assessment of Mr Elcheikh and then simply stating that it agreed with the conclusions and reasons given by the medical specialist. That did not adequately explain why Mr Elcheikh's appeal failed, nor did it reveal how the Appeal Panel had resolved the matters over which the parties had joined issue. 70 As further discussed in Campbelltown City Council v Vegan at [129], the Panel was under an obligation to supply reasons for refusing the appeal. Those given were manifestly deficient and did not constitute compliance with the minimum requirements of that obligation. There was no attempt to engage with the grounds of appeal advanced; to explain why they were rejected; or to explain why the medical specialist was considered to have arrived at the correct conclusions on the evidence that there should be a 50% deduction for the pre-existing condition. The bald statement that the Appeal Panel agreed with the conclusions reached, for the reasons which the medical specialist had given did not satisfy the obligation to give reasons, particularly when the reasons which the medical specialist gave are considered, a matter to which I will return." 1. Broadspectrum in oral submissions asserted that in the present case there is not even a bald statement that the Appeal Panel agreed with the conclusions of the AMS, there are simply statements indicating that the conclusions reached are consistent with the evidence. Broadspectrum submitted that the approach adopted by the Appeal Panel did not satisfy the obligation to give reasons, particularly when the AMS's reasons are considered. (T 23: 45-50) 2. In Sadsad, Hamill J at [47] and [48] stated: "47 It is one thing to give a "beneficial construction" to the reasons of an administrative decision maker. It is another to fill in the gaps in the path of reasoning by reference to an assumption that the decision was made according to the relevant law (in this case cl 2.5). This accords with the approach taken by Stone J in SZCBT v Minister for Immigration and Multicultural Affairs [2007] FCA 9 at [26]: "The Minister urged a 'beneficial' construction of the Tribunal's reasons and referred to comments made in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259, in particular at 271-272. The phrase 'beneficial construction', as used in Wu Shan Liang has a specific meaning, and was certainly not intended to mean that any ambiguity in the Tribunal's reasons be resolved in the Tribunal's favour. Rather, the construction of the Tribunal's reasons should be beneficial in the sense that the Tribunal's reasons would not be over-zealously scrutinised, with an eye attuned to error. In this sense a 'beneficial' approach to the Tribunal's reasons does not require this Court to assume that a vital issue was addressed when there is no evidence of this and, indeed, the general thrust of the Tribunal's comments suggest that the issue was overlooked." 48 Further, while to "fulfil a minimum legal standard, the reasons need not be extensive", "where more than one conclusion is open, it will be necessary for the [decision maker] to give some explanation of its preference for one conclusion over another": Campbelltown City Counsel v Vegan (supra) at [121]-[122] (Basten JA)." 1. According to Broadspectrum, while the AMS's reasons are entitled to a beneficial construction, this requirement does not extend so far as to fill in the gaps in the reasons of administrative tribunals. Therefore, although the AMS deducted 1/10th for a pre-existing condition, it cannot be said that he did so through the application of s 323. In oral submissions, Broadspectrum submitted that the Appeal Panel at [50] proceeded to assume reasons in the decision making process of the AMS, contrary to the position taken by Hamill J in Sadsad. 2. Broadspectrum submitted that this is not the exemplar case for the operation of s 323(2), where it "will be difficult or costly to determine (because for example, of the absence of medical evidence)", leading to the application of an arbitrary 10% reduction for the impairment due to previous or pre-existing condition or abnormality, to the contrary there was a substantial body of evidence available for the purpose of assessing the degree of impairment that is due to a pre-existing condition or previous injury. Broadspectrum also submitted that the reduction in s 323(2) is an exception to the general process of assessment. If there is a finding that a proper assessment would be difficult or costly to determine, that finding must be affirmatively made and explained. 3. Therefore, even if it could be said that the AMS did apply s 323 of the WIM Act, he did not turn his mind so far as one can tell from his reasons, to the jurisdictional fact or necessary precondition that grounds the engagement of s 323(2). As such, Broadspectrum submitted that the case has not been properly engaged with at either level of the decision making process. First defendant's submissions 1. The first defendant submitted that for there to be a deduction for a pre-existing condition from the assessment of the degree of WPI, the pre-existing condition must have the impact that because of the pre-existing condition the degree of WPI is greater. 2. Both parties referred to Ryder v Sundance Bakehouse Pty Ltd [2015] NSWSC 526 (the Appeal Panel referred to a different paragraph), where Campbell J stated at [45]: "45 What s 323 requires is an inquiry into whether there are other causes, (previous injury, or pre-existing abnormality), of an impairment caused by a work injury. A proportion of the impairment would be due to the pre-existing abnormality (even if that proportion cannot be precisely identified without difficulty or expense) only if it can be said that the pre-existing abnormality made a difference to the outcome in terms of the degree of impairment resulting from the work injury. If there is no difference in outcome, that is to say, if the degree of impairment is not greater than it would otherwise have been as a result of the injury, it is impossible to say that a proportion of it is due to the pre-existing abnormality. To put it another way, the Panel must be satisfied that but for the pre-existing abnormality, the degree of impairment resulting from the work injury would not have been as great." 1. Prima facie, a predisposition or vulnerability without more does not give rise to a deduction under s 323, as was recognised by the Appeal Panel in their reference to Cullen v Woodbrae Holdings Pty Ltd [2015] NSWSC 1416 at [46]. It has also been noted that the simple presence of a pre-existing condition without more does not properly found a deduction under s 323 of the WIM Act: see El Cheikh at [87] and [91]. 2. The first defendant submitted that the Appeal Panel correctly identified the AMS made a deduction of 2% WPI in respect of the pre-existing condition. The AMS was therefore aware of the pre-existing condition when he made the assessment. The first defendant asserted that an assessment of the deduction for a causally relevant pre-existing condition under s 323 can itself be a matter of clinical assessment and not one where expansive reasons are required. 3. In oral submissions, the first defendant submitted that Broadspectrum did not provide any specific written submissions to the AMS on pre-existing condition and its causal impact in regards to s 323. Therefore, the AMS was entitled to simply provide the path for his reasons in accordance with what is stated in Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43, (2013) 252 CLR 480, 88 ALJR 52 ("Wingfoot") at [55]. In other words, it was not incumbent upon the AMS to state reasons beyond the figure reached for the 1/10th deduction as it is clear from the context in which the AMS was operating that this default position was adopted. In circumstances where detailed contentions are not put forward as to what should happen the minimum legal standard applies: Vegan at [121] and [122]. These requirements set out above in terms of the minimum legal standard, are not even engaged in this case due to the way in which the material was put to the AMS. 4. The first defendant referred to Vitaz v Westform (NSW) Pty Limited [2011] NSWCA 25 ("Vitaz"), referred to by the Appeal Panel at [25] of its reasons. 5. In oral submissions the first defendant also referred to the decision in State of New South Wales v Hill [2018] NSWSC 54 ("Hill"), where Campbell J stated at [49]: "49 It is also important to bear in mind that the question of whether a s 323 deduction should be made from an assessment of whole person impairment is not the exercise of a discretionary power. Rather, it is an evaluative judgment involving the application of a statutory test to facts established by material properly before the Appeal Panel, involving the application by the Panel of its medical expertise to the ultimate decision. Where their reasons as expressed are not palpably illogical or irrational it will be difficult for a plaintiff to demonstrate the relevant jurisdictional error." 1. The first defendant submitted that Vitaz and Hill are authority for the proposition that an AMS is required to make an intuitive or evaluative judgment and in doing so, they rely upon and apply their own medical skill and expertise to the task: Wingfoot at [47]. The first defendant says that the Appeal Panel correctly identified that the AMS was aware of her pre-existing condition and the AMS was aware of its impact in terms of the effect of the injuries sustained while in Broadspectrum's employment. The Appeal Panel also properly identified in the passages at [44] to [50], that the first defendant was effectively clear of ongoing symptomology at the time she commenced employment. 2. Further, the first defendant says that even if there was an error in respect of the obligation to state reasons by the AMS, the Appeal Panel's reasoning complies with that obligation. Based on the evidence and material, the Appeal Panel noted its conclusion that the 1/10th deduction was not made in error and is in itself correct. Consideration 1. The approach that I have adopted is that both the AMS and the Appeal Panel's decision must be read as a whole and I "should not read the reasons of the decision maker with an eye finely tuned for error": McGinn v Ashfield Council [2012] NSWCA 238 per McColl JA at [17] (Sackville AJA and Gzell J agreeing); Walsh v Parramatta City Council (2007) 161 LGERA 118; [2007] NSWLEC 255 at [67] per Preston CJ citing Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 ("Wu Shan Liang") at 291. 2. The obligation to provide reasons has been explained in Wingfoot at [55]: "…The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law…" 1. As to whether the AMS turned his mind to the question of "whether a deduction is necessary for a previous injury, pre-existing condition or abnormality", the AMS answered this question at 8(e) by saying "Yes". In the accompanying table to the MAC, the AMS deducted 1/10th WPI pursuant to s 323 for a pre-existing injury, condition or abnormality. The AMS equated 1/10th WPI to 2% and deducted it from 21% resulting in a WPI of 19%. These are the only references that the AMS made to the 1/10th deduction. 2. It appears that the AMS applied s 323(2), but he did not say that he did, nor did he explain why he did so. Section 323(2) applies "if the extent of a deduction under s 323(1) 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." Under the heading "details of previous or subsequent accidents, injuries or conditions" the AMS referred to a significant past injury of mental illness. He reported that the first defendant was sexually abused as a child by her grandmother's neighbour when she was aged 10; she consulted Dr Guha in 2012, in relation to a sexual assault in 2007 and had counseling over a six month period. She was also subjected to domestic violence from her partner and restarted antidepressants. 3. In response to the question raised under heading 11, "what deduction (if any) for the proportion of the impairment that is due to previous injury or pre-existing condition or abnormality", the AMS answered "Not applicable" but nevertheless it appears that he deducted 2%, being 1/10th for a pre-existing condition. The Appeal Panel characterised this comment by the AMS as a "slip" and considered that "the AMS could have expanded on his reasons for his conclusion on s 323". This statement by the Appeal Panel is a misstatement as there were no reasons given by the AMS to expand upon. 4. The AMS did not provide any reasons as to why he applied the 1/10th deduction under s 323(2) of the WIM Act. If the deduction under s 323 was going to be too difficult or costly to determine (because for example there was an absence of medical evidence) then the AMS needed to say so in order to fulfil the requirements of s 323(2). It is unclear why s 323(2) was applied in circumstances where the AMS had recorded the existence of two previous sexual assaults that involved counselling and medication. The AMS should have provided some brief reasons to explain the path of reasoning which lead him to apply a 1/10th deduction for pre-existing WPI set out in s 323(2). 5. The Appeal Panel did not find a demonstrable error but rather approached its statutory task by filling in the gaps that were omitted by the AMS. This approach does not accord with what was said by Hamill J in Sadsad at [47]. It is one thing to give a beneficial construction to the reasons of an administrative decision maker. It is another to fill in the gaps in the path of reasoning by a reference to an assumption that the decision was made according to the relevant law. This is what the Appeal Panel did at [45] to [49]. The Appeal Panel should have found a demonstrable error. In doing so, the Appeal Panel misconstrued its statutory task. (b) and (c) Failure to revoke the AMS's decision and failure to conduct its own review when there was a demonstrable error 1. Both (b) and (c) relate to the Appeal Panel's failure to conduct its own independent review where there was a demonstrable error asserted in the reasons provided by the AMS. According to Broadspectrum, the Appeal Panel did not carry out its own evaluation of the evidence and thus failed to discharge its statutory function under the WIM Act. 2. Broadspectrum referred to s 328(5) of the WIM Act, which stipulates that an Appeal Panel may confirm the certificate of assessment given in connection with the medical assessment appealed against, or may revoke the certificate and issue a new certificate as to the matters concerned. The approach adopted by the Appeal Panel, in failing to acknowledge the error, speaks to an approach that was directed to simply confirming the MAC and justifying the 1/10th deduction made by the AMS. 3. In support of the assertion that the Appeal Panel was required to conduct its own independent review of the material, Broadspectrum referred to Vannini v Worldwide Demolitions Pty Ltd [2018] NSWSC 572, where Fagan J stated at [59] to [63]: "59 Section 328(2) has subsequently been amended in such a way that her Honour's observations concerning the scope for an appeal to extend beyond the grounds originally nominated to the Registrar are no longer applicable. However, the general conclusions that an appeal in a case such as the present "has indicia of an appeal by way of rehearing" and the importance of the medically qualified Panel members being able to decide questions of fact within their expertise remain pertinent following the amendment. 60 Consideration of the functioning of other appellate tribunals that proceed by way of rehearing readily shows that a ground of error of fact in an impugned decision is properly upheld simply by the appellate body reviewing the evidence upon which the first instance decision was made and drawing its own different factual conclusion. For example this is fully discussed in relation to the Court of Appeal and s 75A of the Supreme Court Act in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [20]-[31] (Gleeson CJ, Gummow and Kirby JJ). There, reference is made to the extent to which the Court of Appeal should recognise advantages in fact-finding enjoyed by a first instance judge. 61 No such advantage is enjoyed by an approved medical specialist relative to an Appeal Panel when the appeal concerns a "demonstrable error" of fact within s 327(3)(d). In such a case, as here, the Appeal Panel are on an equal footing with the first instance decision maker. Far from it being beyond jurisdiction for the Panel to form their own conclusion, that is precisely what they are constituted to do. They are empowered and required to substitute their own conclusion if different. The medically qualified Panel members are obliged to bring their professional expertise to bear: Ferguson v State of New South Wales [2017] NSWSC 887 at [13]; Guidelines, cl 1.6b. 62 The plaintiff cited the decision of Schmidt J in Versace v Australia's Best Tyres & Auto Pty Ltd [2016] NSWSC 1540 as having disapproved an Appeal Panel's formation and substitution of a conclusion contrary to that of the approved medical specialist. However on my reading of her Honour's judgment, particularly at [63], the error identified was that the Panel did not confine themselves to consideration of the specific grounds of appeal before them, at all. Rather, from the outset, the Panel reviewed the material with which they were presented and reached their own conclusion on the ultimate question of the injured worker's "impairments and losses". Apparently, having come to a different view concerning "assessment of the impairments and losses" the Panel then concluded "that the medical specialist must have erred". Her Honour considered that that was the reverse of the correct appellate process (see [76]-[79]), with which I would respectfully agree. 63 Nothing of the kind occurred in the present case. The Panel did not purport to take the whole of the material which had been before Dr Rosenthal and start afresh, making their own assessment of whole person impairment and then working backwards to determine whether the specific factual error of which the first defendant complained was demonstrated. Contrary to the plaintiff's submissions, Versace v Australia's Best Tyres & Auto Pty Ltd is not authority for the proposition that an Appeal Panel lacks power to uphold a ground of appeal concerning error of fact by drawing its own conclusion on the evidence and substituting that for the conclusion of the primary decision maker." 1. Thus according to Broadspectrum, the Appeal Panel was required in the exercise of its function, to consider whether the findings of the AMS were right or wrong having regard to the Appeal Panel's independent review of all of the relevant evidence before it and the application of its own clinical expertise. It did not do so. 2. Further, Broadspectrum asserted that the Appeal Panel at [46] relied upon the health screening report undertaken by the Salvation Army on 24 September 2013 (mistakenly said to be by the employer) to suggest the first defendant was "stable". Broadspectrum says that this report was not undertaken by a psychiatrist and relied on self-reporting. Nor was the report prepared or undertaken for the purpose of determining whether the first defendant's condition was continuing and would be contributing to any permanent impairment. 3. According to Broadspectrum, this clearly demonstrates that the Appeal Panel failed to carry out its statutory task of review of the original medical assessment, thereby committing jurisdictional error: Siddick v WorkCover Authority of NSW [2008] NSWCA 116 at [100]; NSW Police Force v Registrar of the Workers Compensation Commission of NSW [2013] NSWSC 1792. 4. The requirement under s 323 is to determine the extent of the pre-existing condition to the current impairment. Broadspectrum submitted that there was an "avalanche" of probative medical evidence suggesting that the first defendant had significant conditions which required ongoing treatment at the time of her injury. The Appeal Panel failed to conduct its own evaluation of the extent of any deduction, because the Appeal Panel reduced its task to one where it purported to adjudicate on the medico legal opinions; that is, it had to choose either the assessment of Dr Lotz or the assessment of the AMS. The Appeal Panel therefore misdirected itself in relation to its task, and the application of s 323, and thereby committed jurisdictional error. 5. Broadspectrum referred to Nicol v Macquarie University [2018] NSWSC 530, in support of the proposition that the Appeal Panel incorrectly approached its task with respect to the ongoing treatment required at the time of the subject injury, where I stated at [123]: "123 …Further, any suggestion of remission had to be viewed in the setting of Mr Nicol's heavy consumption of medication, as noted by the AMS which plainly showed that there was no remission, but rather management by medication." 1. At [145] and [146], I stated: "145 The characterisation of the new injury as causing symptoms to recur suggests that the new injury and prior injury are linked. Based upon the decision of Aboushadi …, the present circumstances appear to fall into the second category. In other words, the further injury which resulted at Cambridge would have occurred even if Mr Nicol had been in normal health, but the damage sustained was greater because it was an aggravation of the earlier injury from Macquarie University. It is this additional damage resulting from the aggravated injury that remains causally linked to the first injury at Macquarie University. While Macquarie University submitted that the aggravation of an earlier injury does fall within the scope of the statutory definition of "injury" under s 4 of the Workers Compensation Act, it does not follow that the aggravation alone results in a new injury unless the causal chain has been broken. 146 The Appeal Panel also made reference to Mr Nicol's improvement in condition as constituting a remission of the first injury. The Appeal Panel did not refer to Mr Nicol being on any medication at that time. Putting to one side the inconsistent statements of Mr Nicol regarding his depression, this improvement does not constitute the required novus actus to snap the causative connection as set out in Kooragang." 1. Broadspectrum submitted that this is also the case in this matter when Dr Jetnikoff's report is properly understood by reading the whole of his opinion, rather than simply reading the one sentence extracted by the Appeal Panel at [45] of its reasons. Further, when looking at a number of the other contemporaneous reports it is apparent that the submission the first defendant was in full remission should be rejected. 2. Alternatively, Broadspectrum says that the Appeal Panel at [48] engaged in irrational or illogical reasoning by treating the first defendant as being 'vulnerable' to psychiatric illness at the time she commenced her employment with the plaintiff. The evidence shows that the first defendant was continuing to take anti-depressant medication for a major depressive disorder with generalised anxiety and post traumatic stress disorder. If the Appeal Panel had acknowledged that the previous condition had been continuing at the time of the subject injury, then it would have determined a greater reduction. The Appeal Panel also engaged in illogical and irrational reasoning in finding that a 1/10th deduction is not at odds with the evidence. This according to Broadspectrum it is not a rational assessment of all the evidence. First defendant's submissions 1. The first defendant asserted that contrary to Broadspectrum's submission, the Appeal Panel did not find that there was a demonstrable error in the certificate and as such did not need to conduct a new assessment in accordance with the requirements of the "two stage process" set out in NSW Police Force v Registrar of the Workers Compensation Commission of NSW [2013] NSWSC 1792 at [33]. 2. Further, by applying the reasoning in Wu Shan Liang at 272, that "the reasons for decision under review are not to be construed minutely and finely with an eye keenly tuned to the perception of error", the first defendant asserted that the Appeal Panel concluded that the AMS had not made a demonstrable error. 3. The first defendant submitted that this is how the Appeal Panel resolved the issue. Alternatively, if they did find an error and then went on to assess the degree of WPI, doing the "two-step process" in ss 327 and 328 of the WIM Act, then [44] to [50] of the Appeal Panel's reasons show that they assessed the same degree of WPI as the AMS. Importantly, the Appeal Panel's reasons at [44] to [48] show the findings that were made on factual matters and [49] shows the correct application and why the 1/10th deduction was applied. The first defendant submitted that there can be no basis to complain about the outcome. 4. According to the first defendant, the Appeal Panel did not reduce its statutory task to simply adjudicating on medico legal opinion. The reasons provided at [44] to [50] show that the Appeal Panel was dealing with Broadspectrum's case based on its retained medico legal opinion, which the Appeal Panel was required to do in the procedural fairness sense as set out in Roger v De Gelder [2015] NSWCA 211. 5. Contrary to Broadspectrum's submission that the Appeal Panel applied the wrong test or asked itself the wrong question, namely that the Appeal Panel examined the question of the extent of any deduction by finding that the first defendant was "functioning quite well in the period leading up to the inquiry" and that she "had improved considerably in the period prior to the injury", these facts did justify the Appeal Panel's factual conclusions in regards to s 323. Further, the reasons must be read as a whole and those reasons do correctly dispose of the fact finding enquiry under s 323. Consideration 1. The submissions made by Broadspectrum as to how the Appeal Panel treated the health screening and Dr Jetnikoff's report are more akin to a merits review and should be disregarded. There were no reasons provided by the AMS as to his application of s 323(2) and he failed to properly carry out his statutory duty. This is a demonstrable error. The Appeal Panel failed to identify the demonstrable error but rather sought to fill in the gaps as stated in my conclusions in judicial ground of review (a). Had the Appeal Panel identified the error, it was obliged to carry out its own evaluation of the evidence. It did not do so. It failed to discharge its statutory function under s 328 of the Act. Costs 1. In respect to costs, by consent the plaintiff and first defendant are to pay their own costs. 2. The first defendant did not suggest that declaratory relief was inappropriate if jurisdictional error and/or error of law on the face of the record was established. Accordingly, I am of the opinion that the relief sought in the summons should be granted. I make declarations that: (1) The certificate and statement of reasons issued by the fourth defendant dated 2 February 2017 is void and of no effect. (2) The certificate and statement of reasons issued by the third defendant on 5 June 2017 is void and of no effect. The Court orders that: (3) The proceedings are referred to the Workers Compensation of NSW to be dealt with according to law. (4) The plaintiff and defendant are to pay their own costs. ********** Amendments 19 September 2018 - Coversheet, paragraph [97], Order (4) At the request of the parties, by consent, order (4) is varied by deleting the words "The first defendant is to pay the plaintiff's costs on an ordinary basis" and inserting the words "By consent, the plaintiff and first defendant are to pay their own 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: 19 September 2018