Vegco Pty Ltd v Gibbons & Ors [2008] VSC 363 (17 September 2008)

VEGCO PTY LTD and VICTORIAN WORKCOVER AUTHORITY	Plaintiffs

v

DR PETER GIBBONS, DR OWEN WHITE and ANDREW JOHN GIBBS	Defendants

JUDGE:	Kyrou J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 September 2008
DATE OF JUDGMENT:	17 September 2008
CASE MAY BE CITED AS:	Vegco Pty Ltd v Gibbons
MEDIUM NEUTRAL CITATION:	[2008] VSC 363

Judicial review – Order 56, Supreme Court (General Civil Procedure) Rules 2005 (Vic) – Accident Compensation Act 1985 (Vic) – medical panel – taking into account irrelevant considerations – failure to comply with the rules of natural justice – whether a request for reasons must be made under s 8, Administrative Law Act 1978 (Vic) before inadequacy of reasons can be an independent ground of review – decision set aside – whether medical questions to be remitted to a differently constituted panel.

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J Noonan SC with Mr M Fleming	Hall & Wilcox

For the First and Second Defendants	Mr D Masel	Monahan & Rowell

No appearance for the Third Defendant

1 This is an application for judicial review under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) in relation to an opinion of a medical panel dated 18 January 2008 answering two medical questions and assessing the whole person impairment of a worker, Andrew Gibbs, at 15 percent. The plaintiffs are Mr Gibbs’ former employer, Vegco Pty Ltd (“Vegco”), and the Victorian WorkCover Authority (“VWA”). The members of the medical panel are the first and second defendants and Mr Gibbs is the third defendant.

2 For the reasons set out in this judgment, I have decided to quash the opinion of the medical panel and to remit the medical questions to a medical panel to be convened in accordance with the Accident Compensation Act 1985 (Vic) (“AC Act”).

3 On 25 February 2007, Mr Gibbs lodged a claim for lump sum impairment compensation pursuant to ss 98C and 98E of the AC Act alleging injury to his neck, left arm, and shoulder, and anxiety and depression, which he alleged occurred in the course of his employment with Vegco on 10 November 2005, and which he first reported on 9 December 2005. Mr Gibbs alleged that his injury was caused by the process of preparing vegetables and packing boxes on a conveyor belt that was going too fast. In his claim form, Mr Gibbs stated that he did not suffer from any relevant pre-existing injury. Mr Gibbs ceased his employment with Vegco in February 2006.

4 In March 2006, Mr Gibbs moved to Western Australia and worked as a gardener in a resort in Broome. His duties included trimming hedges with a petrol hedge trimmer. He returned to Victoria around November 2007.

5 Mr Gibbs was examined by Mr Brian Davie, a consultant orthopaedic surgeon, on 16 July 2007. Mr Davie prepared a report dated 18 July 2007 in which he assessed Mr Gibbs’ whole person physical impairment at two percent. In that report, Mr Davie made the following observations and expressed the following opinion:

Examination revealed a heavily-built man who was aged 46. There was tenderness around the left acromioclavicular joint and trapezius muscles. There was slight restriction of movement in the cervical spine; however, movements [o]f the shoulders, elbows, forearms, wrists and hands were satisfactory and sensation, reflexes and power were normal in the upper limbs.

Andrew Gibbs has sustained a cervical disc injury on or around 10 November 2005 with left brachial neuralgia and I believe it is consistent with the activities at work around that time. This is a clinical diagnosis and I do not have any access to any x-rays.

The cervical disc problem has invariably slowly improved and in fact he has largely recovered from the cervical disc problem and is now working satisfactorily at another job in Broome. I would see that he has now recovered from the work-related injury with Vegco Pty Ltd. There is a possibility of further recurrent problems that could occur at home or related to work.

6 After receiving x-rays, Mr Davie prepared a supplementary report dated 8 August 2007 in which he stated:

X-rays have been forwarded to me from Bairnsdale which show mid cervical disc degeneration with foraminal narrowing and an x-ray of the left shoulder was satisfactory.

You will know that I saw Andrew Gibbs on 16/7/07 and as a result of the x-rays I don’t have cause to alter my opinion.

7 Pursuant to s 104B(2) of the AC Act, liability for the claimed injury was accepted by CGU as claims agent for the VWA. CGU gave a notice dated 2 August 2007 to Mr Gibbs accepting liability for his injuries and assessing his overall whole person impairment at two percent.

8 By notice dated 8 November 2007, Mr Gibbs advised his dispute pursuant to s 104B(6B) of the AC Act as to the determination of permanent impairment of his physical injuries and, by letter dated 22 November 2007, CGU referred medical questions pursuant to s 104B(9) to a medical panel for its opinion under s 67 of the AC Act. The panel received that letter on 26 November 2007. The documents submitted by CGU included various medical reports, including both of Mr Davie’s reports.

9 A medical panel comprising the first and second defendants was convened to give its opinion. The medical panel examined Mr Gibbs on 9 January 2008. During the examination, Mr Gibbs informed the panel that, in November 2007, he was using a petrol hedge trimmer and working up a ladder all day when he experienced an exacerbation of his neck pain, and was certified unfit for work for a fortnight, subsequently returning to work on light duties. I will refer to the exacerbation injury as the “Broome injury”. The panel also received a radiology report from Dr L Ramakrishnan of South Terrace Radiology dated 18 December 2007 which recorded the results of a CT scan of Mr Gibbs’ neck. Dr Ramakrishnan’s report was posted to CGU under cover of a letter dated 9 January 2008 and was received by CGU on 11 January 2008. It was common ground before me that the report was probably handed to the panel by Mr Gibbs during the examination on 9 January 2008. As South Terrace is in Western Australia and as Dr Ramakrishnan’s report post-dated the Broome injury, I infer that Dr Ramakrishnan’s report was obtained in connection with the Broome injury.

10 In its opinion dated 18 January 2008, the medical panel answered the questions that had been referred to it as follows:

Question i): What is the worker’s degree of permanent whole person impairment resulting from the accepted injury/s as assessed in accordance with S91 and is the impairment permanent?

Answer: In the Panel’s opinion the worker has a 15% whole person impairment resulting from the accepted neck, left arm and shoulder injuries when assessed in accordance with Section 91 for the purposes of Sections 98C and 134AB(3) & (15) of the Act. The degree of impairment is permanent.

The degree of impairment resulting from the accepted physical injuries includes a 15% whole person impairment assessed in accordance with Chapter Three of the American Medical Association Guides to the Evaluation of Permanent Impairment (4th Edition, 3rd reprint).

Question ii): Does the worker have an accepted injury, which has resulted in a total loss injury mentioned in the table in S98E(1)?

11 The panel’s opinion was accompanied by reasons for its opinion, also dated 18 January 2008. It was common ground before me that the reasons were not provided pursuant to a written request for reasons under s 8(1) of the Administrative Law Act 1978 (Vic) (“ALA”). In its reasons, the panel stated the following:

The worker told the Panel that he subsequently sourced further employment undertaking gardening maintenance work and said that his neck and left arm symptoms improved over time but never completely resolved. In November 2007 the worker said that he was using a petrol hedge trimmer and working up a ladder all day when he experienced an exacerbation of his neck pain radiating into both arms but more severe on the right than the left. He attended his local doctor and was certified unfit for work duties for a fortnight subsequently returning to work on light duties. The worker told the Panel that he has returned to Melbourne for treatment and to seek further employment.

The worker told the Panel that currently he suffers from constant neck pain that radiates to the suprascapular region bilaterally and to the lateral aspect of the upper arm more severe on the right than the left. He also experiences intermittent shooting pains demonstrated to affect the medial aspect of the upper arm and pins and needles over the dorsum of the hand and tips of all his fingers more severe on the right than the left.

On physical examination the Panel noted normal contours of the shoulder girdle and upper extremities, with no evidence of joint swelling or deformity in either upper limb, and no wasting of the scapular or periscapular musculature. His hands were normally keratinised with no evidence of disuse. Active cervical range of motion was restricted by complaint of pain. Full active range of motion was identified in both shoulders, elbows, wrists and hands. There was no clinical evidence of rotator cuff dysfunction or impingement syndrome affecting the left or right shoulder. Neurological assessment demonstrated reduction of the left biceps reflex and consistent and reproducible weakness of the deltoid, infraspinatus, biceps and wrist extensors that the Panel considered to be objective clinical evidence of left C6 radiculopathy.

There was no diagnostic imaging available to view but the Panel considered that none was necessary for it to complete the impairment assessment. The Panel noted the report of a CT scan of a neck dated 17 December 2007 which opined that the CT scan showed left C5-6 and bilateral C6-7 intervertebral foraminal narrowing on the basis of a combination of uncovertebral joint disease and intervertebral disc degenerative disease.

The Panel concluded that the worker is suffering from an aggravation of pre-existing cervical spondylosis with referred pain into the left arm and shoulder and the right shoulder and arm, with objective clinical evidence of left C6 radiculopathy, relevant to the accepted neck, left arm and shoulder injury. The Panel also concluded that there is no intrinsic medical condition of the left arm or shoulder, relevant to the accepted left arm and shoulder injury.

The Panel conducted an impairment assessment of the accepted physical injuries in accordance with the AMA Guides to the Evaluation of Permanent Impairment (4th Edition, 3rd reprint) as required by Section 91 of the Act. The Panel considered that no further information was required from the worker’s treating practitioners to carry out the assessment.

The Panel carried out the assessment of the accepted neck injury in accordance with the Specific Procedures and Directions in Section 3.3f on page 101 of the Guides.

The Panel assessed the worker’s accepted neck injury in accordance with Table 70 of Chapter Three and concluded that there are clinical signs of neck injury, together with clinical evidence left C6 radiculopathy. The Panel therefore concluded that the appropriate impairment category for the cervicothoracic spine is DRE Category III pursuant to Table 73 of Chapter Three, resulting in a 15% whole person impairment.

12 Vegco and the VWA issued an originating motion dated 17 March 2008 seeking an order quashing the opinion of the medical panel and an order remitting the medical questions to a differently constituted panel. They were represented by Mr Noonan SC and Mr Fleming. Mr Gibbs did not appear at the hearing to contest the application for review. Mr Masel appeared for the members of the medical panel as a matter of courtesy to assist the Court if required. They did not file any affidavit and Mr Masel made limited submissions in accordance with R v Australian Broadcasting Tribunal; Ex parte Hardiman.[1]

13 The plaintiffs relied on three grounds of review. The first was that the medical panel fell into jurisdictional error by taking into account a matter it was bound by s 91(7)(c) of the AC Act to ignore, namely exacerbation of the injury due to an unrelated injury or cause. The second ground was a failure by the medical panel to afford the plaintiffs procedural fairness in that the medical panel took into account the Broome injury, a CT scan dated 17 December 2007 and Dr Ramakrishnan’s report of 18 December 2007 without giving the plaintiffs prior notice of its intention to do so and a reasonable opportunity to make submissions on these facts and documents and to obtain further expert opinion on them. The third ground was that the medical panel committed an error of law on the face of the record by providing inadequate reasons for its opinion, by not disclosing whether the panel was disregarding any impairment resulting from the Broome injury and not referring to the opinion of Mr Davie and explaining why the panel was diverging from the opinion of Mr Davie. The third ground was an alternative to the first ground.

14 Section 91(7)(c) of the AC Act provides that, for the purposes of s 98C of that Act, “impairments from unrelated injuries or causes are to be disregarded in making an assessment”. Section 104B(9)(a) requires a medical panel to assess the degree of impairment “resulting from the injury or injuries claimed for which liability is accepted”.

15 A medical panel is amenable to judicial review.[2] It is obliged to comply with the rules of natural justice or procedural fairness.[3] Its opinion can be quashed if it makes a jurisdictional error or breaches the rules of natural justice.[4] If a panel gives reasons for its opinion pursuant to a request under s 8 of the ALA which are deficient because they do not comply with that section, this Court can order the panel to provide further reasons.[5] If the medical panel fails to comply with such an order, the Court can quash the opinion on the basis of error of law on the face of the record.[6]

16 A body such as a medical panel which is amenable to judicial review commits jurisdictional error if, in making its decision, it relies on a matter it is bound to ignore and that matter materially affects its decision.[7]

17 Section 91(7)(c) of the AC Act contains a clear legislative direction to medical panels to disregard impairments from unrelated injuries or causes in making their assessment. It follows that if a medical panel takes into account an impairment from unrelated injuries or causes in making its assessment, it will have taken into account a consideration it is bound not to take into account.

18 In Millane v M J Millane Pty Ltd, Balmford J held that impairment caused by an injury that preceded the injury that was the subject of a compensation claim was an impairment from unrelated injuries or causes for the purposes of s 91(7)(c) of the AC Act and therefore had to be disregarded by a medical panel in assessing the degree of impairment.[8] Her Honour distinguished Del Borgo v Nisselle[9] on two bases, one of which was that the claim in that case was for industrial deafness, “which has its own special characteristics”.[10] I agree with her Honour’s decision on that point. Del Borgo relevantly turned on the meaning of provisions such as ss 88 to 90 and 91(3) of the AC Act, which make special provision for industrial deafness. Those provisions, among other things, contained deeming provisions as to how and when industrial deafness has occurred and set out a formula for determining compensation for any further injury based on the difference in the total percentage of the worker’s loss of hearing as at the date of the relevant injury and the percentage as at the date of a prior injury. Del Borgo also dealt with the interaction of those provisions with other provisions of the AC Act. Stojcevski v Nisselle,[11] another case dealing with industrial deafness, also turned on the special provisions of the AC Act dealing with industrial deafness. In that case, Smith J referred to Millane and repeated, without any disapproval, Balmford J’s comment that “industrial deafness has its own special characteristics”.[12] Accordingly, Del Borgo and Stojcevski do not affect the applicability of Millane to the present case.

19 Mr Masel drew my attention to the case of Gennimatas v Transport Accident Commission[13] without making any submissions as to its applicability to this case. Mr Noonan submitted that the approach adopted in that case to causation of injuries under provisions of the Transport Accident Act 1986 (Vic) where there are multiple accidents, involving “determin[ing] injury and degree of impairment caused by the second accident taking the situation determined to result from the first accident as the starting point”,[14] could sensibly be applied in the present case. Gennimatas dealt with issues of causation under a different statute and therefore does not affect my conclusions.

20 Mr Noonan SC submitted that a comparison of Mr Davie’s reports, which were prepared before the Broome injury, and the reasons of the panel shows that there was a clear and demonstrable difference between Mr Gibbs’ condition before the Broome injury and after it. He submitted that such a comparison forms a basis for the view that it was the Broome injury that led to the development of the severe neurological symptoms sufficient to constitute radiculopathy. He informed me that a diagnosis of radiculopathy is “a factor of significant relevance” in determining the category in which a person is placed under the A.M.A. Guides in accordance with which impairment is assessed.[15] He submitted that, in the absence of the Broome injury, Mr Gibbs would not have been placed in category III. I accept that a comparison of Mr Davie’s reports and the medical panel’s reasons indicates that the impact of the Broome injury on the degree of Mr Gibbs’ impairment was not trivial or insignificant.

21 Section 91(7)(c) of the AC Act required the medical panel to disregard any impairment to Mr Gibbs from unrelated injuries or causes. Any aggravation to the injuries sustained by Mr Gibbs from his employment with Vegco arising from his subsequent employment in Broome constituted an impairment from unrelated injuries or causes within the meaning of s 91(7)(c). It is clear from the medical panel’s reasons that it did not disregard the impairment Mr Gibbs suffered from the unrelated Broome injury in making its assessment and that it considered that impairment as material. It thus failed to comply with s 91(7)(c) of the AC Act. In failing to disregard such impairment, the panel took into account a consideration it was bound to ignore and therefore made a jurisdictional error.

23 A medical panel is bound to observe the rules of natural justice in favour of persons whose rights are liable to be affected by its opinion on medical questions.[16] A medical panel may breach the rules of natural justice where it relies on new information provided to it by the worker during an examination by the medical panel,[17] a new medical report, evidence that has not been seen previously by the worker[18] or a matter within the panel’s own medical expertise[19] and does not, prior to reaching a final opinion, provide the substance of this new information, evidence or matter to the parties affected by its opinion and give them a reasonable opportunity to address it.

24 In this case, it was not suggested that the plaintiffs were aware of the Broome injury when CGU referred the medical questions to the panel (the referral occurred in November 2007, as did the Broome injury). The first they heard of that injury was when they received the medical panel’s opinion. Had they known of the Broome injury, the plaintiffs could have investigated that injury and sought further medical reports for submission to the panel and could have made submissions on the degree of impairment caused by the Broome injury and how the impairment caused by that injury was to be disregarded for the purposes of the panel’s opinion.

25 As the medical panel’s reasons referred to the aggravation of Mr Gibbs’ injury twice, and having regard to the context in which those references appear, it is clear that the panel regarded the aggravation as material to their opinion. It follows that, by failing to give the plaintiffs an opportunity to put further material and submissions to the panel in relation to the Broome injury, the panel breached the rules of natural justice. This is not a case where such further material and submissions could not possibly have affected the panel’s opinion.[20]

26 The position in relation to the medical panel’s reliance on the report of Dr Ramakrishnan is less clear, as this was provided to CGU a week before the panel issued its opinion. Mr Noonan submitted that the provision of Dr Ramakrishnan’s report to CGU without an explanation that there had been an intervening injury in Broome in November 2007, did not sufficiently alert the plaintiffs to the significance of the report and did not enable them to make informed submissions to the panel on the contents of the report. There is no evidence that the plaintiffs sought clarification from the panel as to the provenance of the report and how the panel proposed to rely on it. The absence of accurate information about the circumstances in which the report came to be given to the panel and the panel’s subsequent forwarding of the report to CGU without explanation has made it difficult for me to assess whether there was a breach of the rules of natural justice in connection with the report. On balance, I have concluded that the report was related to the Broome injury and that the fact that a copy of the report was provided to CGU a week before the panel issued its opinion did not, in the absence of the explanation referred to by Mr Noonan, constitute sufficient compliance with the rules of natural justice.

28 Section 8(1) of the ALA provides that a tribunal shall, “if requested to do so by any person affected by its decision made or to be made by it, furnish him with a statement of its reasons for the decision”. A medical panel is a tribunal for the purposes of the ALA.[21] The question of what information a medical panel’s reasons for opinion must contain in order to comply with s 8 of the ALA has been considered in detail by this Court in numerous cases commencing with the Court of Appeal decision in Masters v McCubbery.[22]

29 I raised with Mr Noonan and Mr Masel whether, given that there is no common law obligation on decision-makers to provide reasons for decision,[23] the alleged inadequacy of a medical panel’s reasons for opinion could be a separate ground of review where the reasons were provided by the panel voluntarily, rather than pursuant to a request under s 8 of the ALA.[24] Mr Masel informed me that it has been the practice of the medical panels over many years to provide reasons for opinion as a matter of course without receiving a request under s 8 of the ALA. Neither Mr Noonan nor Mr Masel were able to clarify whether the medical panels have expressly or impliedly represented to the VWA and others that they will always provide reasons for opinion as if a request had been made under s 8 of the ALA and that, therefore, such requests need not be made.

30 Having regard to the fact that I have already decided in favour of the plaintiffs on the first two grounds of review, the fact that the third ground was an alternative to the first ground, the fact that Mr Gibbs did not appear as a contradictor in this proceeding, the fact that Mr Masel appeared in the limited capacity referred to above, and to the circumstances referred to in the preceding paragraph, it is neither necessary nor appropriate for me to decide in this case whether the medical panel’s reasons for opinion are inadequate and, if so, whether that inadequacy constitutes a separate ground of review. I note, however, that Masters did not decide that medical panels have an obligation to provide reasons for opinion under s 8 of the ALA independently of a request under that section.

31 It follows that the opinion of the medical panel will be quashed and the medical questions remitted to a medical panel to be convened in accordance with the AC Act.

32 In their written submissions, the plaintiffs submitted that the medical questions ought be remitted to a differently constituted panel. They relied on Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal[25] and Body Corporate Strata Plan No 4166 v Stirling Properties Ltd (No 2).[26]

33 Successful applicants in judicial review and appeal proceedings to the trial division of this Court frequently seek remittal to a differently constituted primary decision-maker when the primary decision is set aside and the matter is remitted. If orders are made by this Court as a matter of course requiring decisions to be remade by a differently constituted primary decision-maker, this may have serious resourcing implications for primary decision-makers and add to the costs and delays of the decision-making process. For the Court to be persuaded to order remittal to a differently constituted primary decision-maker, good reason for doing so, based on established principles, must be shown by the party seeking such an order. The guiding principle is that remittal will be to a differently constituted primary decision-maker where there is some feature of the conduct or reasons for decision of the primary decision-maker which would render it unfair to the successful party or give the appearance of unfairness to that party (whether arising from strongly expressed views on key issues, adverse findings on the credit of witnesses, apprehended bias or otherwise) if the matter were remitted to the same decision-maker or where it would be impracticable for the same primary decision-maker to redetermine the matter.[27]

34 In this case, as the plaintiffs did not address the issue of unfairness or impracticability in their oral submissions, I will give the represented parties an opportunity to do so.

35 Accordingly, I will hear submissions from counsel on whether I should order that the panel be differently constituted, on the question of costs and generally on the precise form of the orders to be made by me.

[7] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, 39-41; Craig v South Australia (1995) 184 CLR 163, 179; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, 351-2 [82]-[83].

[9] [2002] VSC 368; subsequently affirmed in Victorian WorkCover Authority v Del Borgo (2004) 9 VR 470 (Victorian Court of Appeal).

[15] “A.M.A. Guides” means the American Medical Association’s Guides to the Evaluation of Permanent Impairment (Fourth Edition) (other than Chapter 15) as modified by the AC Act and any regulations made under the AC Act: s 91(8) of the AC Act. See also ss 91(1) and 98C of the AC Act.

[22] (1996) 1 VR 635; Calleja v Franet Pty Ltd [1999] VSC 202; Pyle v Nisselle [2000] VSC 398; Taylor v Mountain Pine Furniture Pty Ltd [2004] VSC 324; Kamener v Griffin (2005) 12 VR 192; Clarke v National Mutual Life Insurance Ltd [2007] VSC 341; Moyston Court Fisheries Ltd v Malios [2007] VSC 518; Davidson v Fish [2008] VSC 32; Robert Bosch (Aust) Pty Ltd v Barton [2008] VSC 227. Some of these cases have not involved a request for reasons under s 8 of the ALA.

[24] The power of the Court to quash a decision under s 8(4) of the ALA only applies where the tribunal fails to comply with an order made under that section consequent upon a failure to provide reasons, or adequate reasons, in response to a request.

[27] Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39, 42-3; Kapoor v Monash University (2001) 4 VR 483, 498-9 [51]; Davidson v Fish [2008] VSC 32, [14]-[21]; Able Demolitions & Excavations Pty Ltd v Yarra Ranges Shire Council [2008] VSC 294, [49].

Supreme Court of Victoria Decisions

Vegco Pty Ltd v Gibbons & Ors [2008] VSC 363 (17 September 2008)