Mercy Connect Limited v Kiely

1. [1]

   HER HONOUR: This is a judicial review of a decision made by a Medical Appeal Panel of the Workers Compensation Commission of NSW dated 27 February 2018 relating to s 328(1) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“WIM Act”). The matter for this Court to determine is whether or not the Appeal Panel made a jurisdictional error or whether there is an error on the face of the record.

2. [2]

   The plaintiff is Mercy Connect Limited (formerly known as Mercy Centre Lavington Limited) (“Mercy Connect”). The first defendant is Rachelle Marcel Kiely (“Ms Kiely”). The second defendant is the Appeal Panel of the Workers Compensation Commission constituted by Deborah Moore, Dr Julian Parmegiani, and Dr Patrick Norris (“the Appeal Panel”). The third defendant is the Registrar of the Workers Compensation Commission. The first, second, and third defendants have filed submitting appearances. Mercy Connect relied upon its court book filed 15 June 2018.

3. [3]

   By summons filed 27 March 2018, Mercy Connect seeks firstly, an order in the nature of certiorari quashing the decision of the Appeal Panel; or secondly, in the alternative, a declaration that the decision of the Appeal Panel is invalid. It does not specifically seek that the matter be remitted to the Workers Compensation Commission to be determine according to law. There has been one decision by an Approved Medical Specialist, two decisions by Medical Appeal Panels, differently constituted, and one judicial review. This is the second judicial review.

Background

1. [4]

   Ms Kiely was born in 1974 and is currently 44 years of age.

2. [5]

   In March 2009, Ms Kiely commenced employment with Mercy Connect. On 19 April 2011, Ms Kiely sustained an injury in the course of employment with Mercy Connect, including various physical injuries and a psychological injury.

3. [6]

   On 19 November 2015, the solicitor for Ms Kiely wrote to Mercy Connect’s insurer, Catholic Church Insurance Ltd, making a claim for lump sum compensation pursuant to s 66 of the Workers Compensation Act 1987 (NSW) for primary psychological injury.

4. [7]

   On 13 January 2016, Mercy Connect’s insurer issued a notice pursuant to s 74 of the WIM Act disputing liability of Ms Kiely’s claim. Mercy Connect says that Ms Kiely’s psychological injury is a secondary, as opposed to a primary, psychological injury.

5. [8]

   On 20 July 2016, Ms Kiely commenced proceedings in the Workers Compensation Commission by way of an application to resolve a dispute, claiming compensation under s 66 of the Workers Compensation Act.

6. [9]

   On 24 October 2016, a conciliation/arbitration was held before arbitrator Snell. The claim for lump sum compensation was referred to an Approved Medical Specialist, Dr White (“the AMS”), for assessment of the primary psychological injury. The order provided that the AMS was to exclude any impairment arising from a secondary condition.

7. [10]

   On 29 November 2016, the AMS issued a Medical Assessment Certificate (“MAC”) assessing Ms Kiely as suffering from a 12% whole person impairment (“WPI”) as a result of the primary psychological injury.

8. [11]

   On 20 December 2016, Ms Kiely lodged an application to appeal the decision of the AMS together with submissions in support.

9. [12]

   On 23 January 2017, Mercy Connect lodged a notice of opposition and submissions in support.

10. [13]

    On 15 March 2017, the Appeal Panel revoked the MAC and issued a new MAC, certifying Ms Kiely as suffering from a 15% WPI.

11. [14]

    18 April 2017, Mercy Connect filed a summons in this Court seeking judicial review of the decision of the Appeal Panel.

12. [15]

    On 18 August 2017, the judicial review was heard by Wilson J.

13. [16]

    On 14 September 2018, her Honour delivered judgment, quashing the decision of the Appeal Panel and remitting Ms Kiely’s appeal to the Workers Compensation Commission for determination by a differently constituted Appeal Panel.

14. [17]

    On 26 September 2017, Mercy Connect and Ms Kiely were advised of the members of the reconstituted Appeal Panel.

15. [18]

    On 20 October 2017, the Appeal Panel wrote to the parties calling for further submissions.

16. [19]

    On 27 February 2018, the Appeal Panel delivered its decision and statement of reasons. The Appeal Panel quashed the MAC and substituted an assessment of 19% WPI.

17. [20]

    On 27 March 2018, Mercy Connect filed its summons seeking this current judicial review from the decision of the Appeal Panel dated 27 February 2018.

18. [21]

    I will deal with these earlier proceedings in more detail later in this judgment.

The statutory scheme

1. [22]

   It is convenient that I briefly outline the relevant provisions of the statutory scheme.

2. [23]

   Section 65A of the Workers Compensation Act contains special provisions for psychological and psychiatric injury. It relevantly reads:

3. [24]

   Section 66 of the Workers Compensation Act provides as follows:

4. [25]

   Chapter 7, Part 7 of the WIM Act provides for medical assessment, including the assessment of the degree of WPI by an Approved Medical Specialist 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. (“Lokovska”).

5. [26]

   Approved Medical Specialists are appointed under the WIM Act to deal with medical disputes, which are defined in s 319 to mean:

6. [27]

   Section 323 provides for the deduction for a previous injury or pre-existing condition or abnormality. It reads:

7. [28]

   Section 325 relates to the medical assessment certificate. It reads:

8. [29]

   Appeals against medical assessments are governed by ss 327 and 328 of the WIM Act.

9. [30]

   Section 327 relevantly reads:

10. [31]

    Section 328(2) confines the grounds of appeal which an appeal panel may consider to those pursued by the appellant: see Lakovska per Barrett JA at [40] (Gleeson JA agreeing); New South Wales Police Force v Registrar of the Workers Compensation Commission of New South Wales [2013] NSWSC 1792, Davies J at [45]-[46]; Cullen v Woodbrae Holdings Pty ltd [2015] NSWSC 1416, Beech-Jones J at [29]-[38]; and Ferguson v State of New South Wales & Ors [2017] NSWSC 887 per Campbell J at [12]. In this current judicial review, the Appeal Panel was confined to whether the assessment was made on the basis of incorrect criteria or there is a demonstrable error.

The referral

1. [32]

   On 24 October 2016, the Workers Compensation Commission issued a certificate of determination following a conciliation conference held by the parties with arbitrator Snell. (Aff, Murray 14 May 2018, Ex A). The referral was for the AMS, Dr White, to assess the degree of WPI arising out of the primary psychological injury sustained by Ms Kiely as a result of the incident. (My emphasis).

2. [33]

   Relevantly, the certificate of determination provided as follows at [3] and [4]:

3. [34]

   On 31 October 2016, the referral was amended to include the following:

The decision of the AMS

1. [35]

   On 29 November 2016, the AMS issued a MAC. The MAC relevantly stated at 1:

2. [36]

   In his reasons, the AMS provided a detailed overview of the history relating to Ms Kiely’s injury. (Aff, Murray 14 May 2018, Ex C, 2-5). Under the heading “Findings on mental state examination”, he stated at 6:

3. [37]

   The AMS concluded at 8:

4. [38]

   The AMS found that 5% was the portion related to a secondary psychological injury, and should be deducted in accordance with s 65A of the Workers Compensation Act from Ms Kiely’s 17% overall WPI. Accordingly, the AMS issued a MAC with a 12% WPI.

The decision of the Registrar (“gatekeeper”) dated 7 February 2017

1. [39]

   On 20 December 2016, Ms Kiely filed an application to appeal against the AMS’s decision. The grounds of this appeal were that the assessment was made on the basis of incorrect criteria and that the MAC contained a demonstrable error. Both parties relied upon written submissions and Mercy Connect lodged a notice of opposition.

2. [40]

   On 7 February 2017, the delegate of the registrar at [5] stated:

3. [41]

   In her submissions to the Appeal Panel, Ms Kiely stated at [12]:

The decision of the first Appeal Panel

1. [42]

   On 15 March 2017, the first Appeal Panel handed down its decision. It determined at [47] that there was a demonstrable error made by the AMS as to his approach to assessing the secondary condition. It stated at [44]-[46]:

2. [43]

   The first Appeal Panel continued at [52]-[55]:

3. [44]

   Accordingly, the first Appeal Panel ordered that the AMS’s MAC be revoked and issued a new certificate. It made a new WPI assessment of 15%, being the original 17% WPI found by the AMS (prior to his 5% deduction) with a 2% deduction for secondary psychological injury. The first Appeal Panel calculated this 2% by “borrowing” the 10% deduction approach for pre-existing injury, condition or abnormality in s 323(2) of the WIM Act. (At [53]).

First judicial review in this Court before Wilson J

1. [45]

   By summons filed 18 April 2017, Mercy Connect sought an order in the nature of certiorari or alternatively, a declaration setting aside or declaring invalid the decision made by the first Appeal Panel on 15 March 2017; and an order in the nature of prohibition.

2. [46]

   The grounds of the review were firstly that the first Appeal Panel made a number of jurisdictional errors and/or error of law on the face of the record, or alternatively, the first Appeal Panel constructively failed to exercise its statutory power in making the decision. The AMS’s quantification of the secondary psychological injury as 5% WPI was not in dispute. There were four errors identified by Mercy Connect. These were as follows.

3. [47]

   The first error identified was that the first Appeal Panel was restricted in its review to the specific grounds of appeal on which the appeal was made in accordance with s 328(2) of the WIM Act. It therefore wrongly determined (at [43]-[46]) that the AMS’s decision was afflicted with a “problem” that involved “irrelevant factors” and featured a conclusion which did not have a “scientific rational”. The first Appeal Panel determined that the AMS’s finding of 5% WPI did not have a sound basis and it constituted “demonstrable error”. It did not have the jurisdiction or power to make this determination as they did not constitute the grounds of appeal on which the appeal was made. Further or alternatively, the conclusion of the first Appeal Panel that the factors listed by the AMS were irrelevant was wrong in law and misconstrued and misapplied the relevant law. The first Appeal Panel also failed to set out its reasons for its conclusions in that it failed to set out its actual path of reasons and/or failed to do so in sufficient detail so as to enable the Court to see whether the opinion did or did not involve any error of law.

4. [48]

   The second error identified was that the first Appeal Panel incorrectly considered the appeal at large and continued to make its own determination as to Ms Kiely’s WPI.

5. [49]

   The third error was that the first Appeal Panel misconstrued and misapplied its powers, or that it constructively failed to exercise its power in determining reasons at [52] and [53] that it could “borrow” the calculation of impairment methodology from a different and otherwise inapplicable provision of the workers compensation legislation, being s 323(2) of the WIM Act. Such a borrowing of a statutory provision that did not apply to the appeal was impermissible and it thereby failed to make its own assessment of WPI as it was required to do according to law.

6. [50]

   The fourth error was that the decision was afflicted by legal unreasonableness within the meaning of Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 and is thereby invalid. The first Appeal Panel wrongly determined that there was a dispute about a number of factors concerning the AMS’s decision when there was not. It also acted irrationally or illogically in criticising the AMS when it stated at [44] that “physical injuries are not relevant to considering the impairment due to the secondary condition, nor is the pain suffered by Ms Kiely, or the experience of other individuals suffering pain”, and then stated later at [52] that “some of the depressive symptomatology associated with the pain from the physical injuries does contribute to the overall impairment.”

7. [51]

   On 14 September 2017, Wilson J handed down her decision in Mercy Centre Lavington Ltd v Kiely & Ors [2017] NSWSC 1234. (“Mercy Centre”).

8. [52]

   So far as the first and second errors are concerned, Wilson J stated at [49] and [52]-[55] that the first Appeal Panel had fallen into error by considering matters which were not raised by Ms Kiely on appeal and should not have been considered. Under s 328(2) of the WIM Act, an appeal panel is limited in its review to the grounds of appeal. Ms Kiely had not argued the quantification of the secondary psychological injury as a ground of appeal to the first Appeal Panel. Nor had Ms Kiely raised on appeal that the AMS had made an error in the factors taken into account, other than his reference to his experience of other individuals in similar situations. The first Appeal Panel had therefore fallen into error by revising the quantum of the secondary psychological injury, finding errors with factors taken into consideration by the AMS, and referring to the physical injuries as being irrelevant to the consideration of secondary impairment.

9. [53]

   Her Honour went on to find at [56], [57] and [60]-[63] that the third error had been established because s 323 of the WIM Act had been incorrectly relied upon by the first Appeal Panel. In making its assessment over the proportion of impairment to be excluded as secondary injury, the first Appeal Panel had found there was difficulty in separating primary and secondary psychological injury and resolved this by relying upon s 323 of the Act. Wilson J held at [57] that “it was not open to the [Appeal Panel] to utilise s 323 as the methodology adopted by which to determine secondary psychological impairment pursuant to s 65A of the [Workers Compensation Act]”. This was because s 65A of the Workers Compensation Act and s 323 of the WIM Act serve different purposes. Section 65A is directed towards compensation while s 323 concerns the assessment of impairment. (At [60]). The first Appeal Panel had relied upon s 323 to assess the quantum of impairment to be deducted and failed to take into account the available medical evidence. (At [61]). Her Honour also noted that even if s 323(2) was available to assess an appropriate deduction, it is “not open-ended” as the ten per cent deduction can only be made in circumstances where it would be too difficult or costly to make a more specific medical assessment. This was not the case here was there was a great deal of evidence the first Appeal Panel could have referred to. (At [62]). Accordingly, the use of s 323 for this purpose amounted to an error of law.

10. [54]

    In relation to the fourth error concerning legal unreasonableness, Wilson J found at [64] that due to the first, second and third errors, the decision was unreasonable.

11. [55]

    Her Honour ordered that the decision of the first Appeal Panel be set aside and that the matter be remitted to the Workers Compensation Commission for determination by a differently constituted appeal panel.

The decision of the second Appeal Panel

1. [56]

   At a preliminary review on 20 October 2017, the second Appeal Panel constituted by an arbitrator, Ms Deborah Moore, and two AMSs and psychiatrists, Dr Julian Parmegiani and Dr Patrick Morris, issued a number of directions to the parties.

2. [57]

   The Appeal Panel made two directions in its preliminary review dated 20 October 2017. They are as follows:

3. [58]

   It later explained the basis of its direction for re-examination in its statement of reasons at [14] as follows:

4. [59]

   In accordance with the directions, both parties provided written submissions. Neither party agitated a deterioration in Ms Kiely’s condition and both agreed that the AMS’s initial assessments were correct.

5. [60]

   On 23 January 2018, Dr Parmegiani re-examined Ms Kiely and made the following observations:

6. [61]

   Dr Parmegiani undertook a new PIRS assessment as follows:

7. [62]

   On 27 February 2018, the second Appeal Panel provided reasons. The second Appeal Panel agreed and adopted Dr Parmegiani’s medical assessment and set out its reasons for accepting his assessment at [41]-[45]. It stated:

8. [63]

   The new MAC issued by the second Appeal Panel stated that the WPI was 19%.

The present judicial review

1. [64]

   On 27 March 2018, Mercy Connect filed a summons in this Court for judicial review of the second Appeal Panel’s decision dated 27 February 2018. I have already set out the orders sought earlier in this judgment.

2. [65]

   For ease of understanding, any reference to “Appeal Panel” is a reference to the second Appeal Panel, being the focus of the present judicial review.

3. [66]

   There are seven grounds of judicial review. They are as follows:

   1. (1)

      The Appeal Panel failed to determine Ms Kiely’s appeal;

   2. (2)

      The Appeal Panel made directions that Ms Kiely should have a further examination before determining whether there was an error in the MAC;

   3. (3)

      The Appeal Panel mistook its own jurisdiction on appeal with the Supreme Court’s jurisdiction on judicial review;

   4. (4)

      The Appeal Panel failed to make a finding as to the percentage of Ms Kiely’s psychological injury due to agreed secondary psychological injury under s 65A of the Workers Compensation Act. This included a failure to consider Ms Kiely’s agreed secondary psychological injury, a failure to make a finding on Ms Kiely’s secondary psychological injury, and a failure to give sufficient reasons for a court on review to understand whether the Appeal Panel had considered and made a finding for Ms Kiely’s secondary psychological injury or not;

   5. (5)

      The Appeal Panel failed to consider making a deduction for pre-existing condition or abnormality under s 323 of the WIM Act;

   6. (6)

      The Appeal Panel failed to give reasons for its revision of Ms Kiely’s WPI; and

   7. (7)

      The Appeal Panel’s decision is legally unreasonable.

4. [67]

   In the alternative, the plaintiff assets that grounds 1 to 6 above are errors on the face of the record pursuant to s 69 of the Supreme Court Act 1970 (NSW).

5. [68]

   Ms Kiely has filed a submitting appearance. Hence, she has not filed any written submissions.

6. [69]

   I shall deal with these judicial grounds of review in order.

Ground 1 – Failure to consider Ms Kiely’s appeal

1. [70]

   This ground concerns the failure of the Appeal Panel to determine Ms Kiely’s appeal. Mercy Connect submitted that the Appeal Panel was required to determine whether any ground in Ms Kiely’s appeal filed 20 December 2016 had been made out. The grounds of appeal were that the AMS had impermissibly made an assessment of the secondary psychological error, and had impermissibly taken into account his experience of other individuals in a similar situation. These grounds were also been identified by Wilson J: see Mercy Centre at [53]. It says that the Appeal Panel has not addressed or determined these grounds of appeal and that consequently, there was a failure of the Appeal Panel to exercise its jurisdiction under s 328(2) of the WIM Act.

2. [71]

   Section 328(2) of the WIM Act provides that the procedure is to review the original medical assessment of the AMS.

3. [72]

   The referral to the AMS was made on the basis that the AMS excluded from his assessment “any impairment or symptoms arising from or attributable to, the secondary psychological condition.” Ms Kiely’s subsequent appeal to the first Appeal Panel was made on two grounds; firstly, that the AMS’s assessment was made on the basis of incorrect criteria; and secondly, that the MAC contained a demonstrable error. These grounds were confirmed in judicial review before Wilson J in Mercy Centre at [53]. Her Honour summarised the submissions accompanying the two grounds of appeal as being that the AMS had impermissibly made an assessment of the secondary psychological injury, and had impermissibly taken into account his experience of other individuals in a similar situation. As her Honour remitted the decision back to be decided by a newly constituted appeal panel, the task of the second Appeal Panel was to review the original AMS’s MAC on the same grounds of appeal.

4. [73]

   In its decision dated 27 February 2018, the Appeal Panel adopted the WPI assessment of 19% made by Dr Parmegiani following his re-examination of Ms Kiely on 23 January 2018, and made orders to revoke the AMS’s original MAC and issue a new MAC. The Appeal Panel’s reasons for doing so are contained in [41]-[45] of its decision, which I have set out earlier in this judgment. However, nowhere in its reasons does the Appeal Panel address whether the AMS had impermissibly made an assessment of the secondary psychological error. Nor does the Appeal Panel consider whether the AMS’s approach in taking into account his experience of other individuals in similar situations was permissible. These were the grounds upon which the original appeal was made and the Appeal Panel was obligated to determine them in accordance with s 328(2) of the WIM Act.

5. [74]

   It is my view that the Appeal Panel has not addressed the grounds of appeal raised here. As it did not address the grounds of appeal, it failed to exercise its statutory task and misconstrued its statutory duty.

Ground 2 – Seeking a further medical examination

1. [75]

   Ground 2 is that the Appeal Panel’s determination that Ms Kiely should undergo a further medical examination by Dr Parmegiani before determining whether there was an error in the MAC.

2. [76]

   Mercy Connect submitted that the Appeal Panel fell into jurisdictional error by examining Ms Kiely before determining whether there was an error in the MAC. The Appeal Panel stated that it had issued a direction for Ms Kiely to be re-examined because of the nature of the injury and the comments made by Wilson J. According to Mercy Connect, these reasons are insufficient and do not indicate that the Appeal Panel had identified for itself an error to enliven its jurisdiction to re-examine Ms Kiely. In particular, Mercy Connect says that the decision of Wilson J cannot be construed as finding an error in the MAC for two reasons. Firstly, the Supreme Court on judicial review cannot enter into a consideration of the merits of an appeal; and secondly, Wilson J made no specific finding of error in the MAC, only of errors in the first Appeal Panel’s decision.

3. [77]

   Mercy Connect further submitted that even if the Appeal Panel determined that Ms Kiely’s condition had deteriorated and re-examined Ms Kiely on this basis, the deterioration was not the basis of Ms Kiely’s appeal. In addition, even if the Appeal Panel gave the parties an opportunity to be heard on the ground of deterioration: see Siddick v WorkCover Authority (NSW) [2008] NSWCA 116 at [104] (McColl JA with Mason P and Giles JA agreeing), its failure to identify an antecedent error as alleged by Ms Kiely in her appeal remains a jurisdictional error.

4. [78]

   In Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 (“Vegan”), Basten JA considered the limited scope of the Appeal Panel’s jurisdiction at [137] as follows:

5. [79]

   Vegan was upheld in Pitsonis v Registrar of the Workers Compensation Commission (2008) 73 NSWLR 366; [2008] NSWCA 88 [48]-[49].

6. [80]

   In New South Wales Police Force v Registrar of the Workers Compensation Commission of New South Wales, Davies J stated that it is necessary for an Appeal Panel to identify a demonstrable error in a MAC before it is permitted to order a re-examination. His Honour at [34] stated:

7. [81]

   In summary, these authorities support the proposition that the Appeal Panel had a limited jurisdiction in conducting its appeal and was obliged to identify a demonstrable error in the MAC prior to directing any re-examination of Ms Kiely.

8. [82]

   The Appeal Panel did not identify a demonstrable error arising from the MAC upon which to justify its direction for further re-examination of Ms Kiely. Nor can the Appeal Panel rely upon the “nature of the injury” and Wilson J’s decision as being sufficient to identify such an error.

9. [83]

   When the Appeal Panel sought submissions from the parties, both parties agreed that there had been no deterioration in Ms Kiely’s medical condition. Further the parties agreed that the AMS’s initial assessments were correct. What was in issue was the explanation of how the AMS arrived at the 5% WPI for the secondary psychological injury, and whether the AMS had impermissibly taken into account his experience of other individuals in a similar situation. In my view, the Appeal Panel has not identified a demonstrable error in the MAC so they were not entitled to conduct the re-examination. Accordingly, the Appeal Panel has misconstrued its statutory duty.

Ground 3 – jurisdiction

1. [84]

   Ground 3 of the judicial review concerns the Appeal Panel having erred by mistaking its jurisdiction. Mercy Connect submitted that the Appeal Panel confused its appellate jurisdiction with the review powers of the Supreme Court. In support of this submission, Mercy Connect drew this Court’s attention to [19] of the Appeal Panel’s statement of reasons dated 27 February 2018, in which it stated that “both parties had made written submissions…and were expanded upon at the hearing before Wilson J”. It also referred to [22] of the Appeal Panel’s decision, in which it stated that “this matter has been the subject of prior appeals.” In other words, Mercy Connect says that the Appeal Panel had incorrectly mistaken its jurisdiction as being part of an appeal process that includes the Supreme Court and that it incorrectly concluded that it did not need to make findings already made by the Supreme Court.

2. [85]

   As the Appeal Panel has misconstrued its statutory duty on other grounds, it is not necessary for me to address this ground of judicial review. However, in the event that I am wrong, my view would have been as follows.

3. [86]

   While the Appeal Panel did make some oblique statements at [19] and [22] of its reasons, these statements were made in the context of the Appeal Panel summarising the parties’ submissions and the procedural history of the matter. Therefore, I would have found that to consider these statements as evidence of the Appeal Panel misconstruing its jurisdiction would involve this Court incorrectly adopting an overly zealous approach to language with an eye finely tuned for error: see 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) 185 CLR 259; [1996] HCA 6 at 291.

4. [87]

   Accordingly, judicial review ground 3 has not been made out.

Grounds 4 and 5 – Failure to consider secondary psychological injury and adoption of 19% WPI

1. [88]

   Grounds 4 and 5 of the judicial review raise similar issues. While it is not necessary for me to decide these grounds of review, I will make some observations because they raise significant issues.

2. [89]

   Ground 4 of this judicial review is perhaps the more significant one. It concerns the alleged failure of the Appeal Panel to consider secondary psychological injury.

3. [90]

   Ground 5 concerns the Appeal Panel having erred by considering and revising the WPI of Ms Kiely.

4. [91]

   In relation to ground 4, Mercy Connect submitted that the Appeal Panel failed to consider secondary psychological injury pursuant to s 65A of the Workers Compensation Act. The first Appeal Panel found at [41]-[42] of its decision that the AMS made no error in his general approach to excluding secondary psychological injury, although they did take issue with the factors taken into account by the AMS in assessing the 5% WPI to be excluded. (At [43]). This was not subject to appeal and Wilson J did not comment adversely upon it. However, the Appeal Panel adopted the finding of Dr Parmegiani from his re-examination of Ms Kiely, and found that Ms Kiely suffered from a 19% WPI. Mercy Connect submitted that there is no reason why Dr Parmegiani should not have expressly considered and applied a deduction for secondary psychological injury. Mercy Connect says that the Appeal Panel has either made a jurisdictional error by failing to consider whether a deduction for secondary psychological injury under s 65A of the Workers Compensation Act should be made; or has made a jurisdictional error by failing to calculate total WPI for psychological injury and then deducting the percentage of WPI due to secondary psychological injury.

5. [92]

   In the alternative, Mercy Connect submitted that the Appeal Panel made a jurisdictional error by failing to give reasons sufficient for a court on review to understand whether a deduction for secondary psychological injury has been made or not, and the extent of any deduction. According to Mercy Connect, Dr Parmegiani was vague as to whether the 19% WPI included a reduction of secondary psychological injury or not.

6. [93]

   In relation to ground 5, Mercy Connect submitted that the Appeal Panel misconstrued its statutory duty by reconsidering and revising Ms Kiely’s WPI. Applying the reasoning of Wilson J, this constitutes an error. According to Mercy Connect, an issue before her Honour in the first judicial review concerned the first Appeal Panel’s revision of the 5% deduction for secondary psychological injury. However, her Honour found that the 5% secondary psychological injury was not an issue on appeal before the first Appeal Panel. The second Appeal Panel has again revised the 5% secondary psychological injury in re-assessing Ms Kiely’s WPI.

7. [94]

   As best as I can understand them, Mercy Connect’s submissions concerning grounds 4 and 5 appear to be contradictory. Where ground 4 is related to the Appeal Panel having failed to consider secondary psychological injury, ground 5 is framed as the Appeal Panel having revised the 5% secondary psychological injury by re-assessing Ms Kiely’s WPI as 19%. During the hearing, counsel for Mercy Connect confirmed it was his position in relation to ground 5 that “the Appeal Panel has again revised the 5 per cent, which was the subject of the first review…”. (T12.16-17). In any event, as I have already determined that the Appeal Panel misconstrued its statutory duty on an earlier ground, I do not consider it necessary to reconcile this inconsistency, subject to my following comments.

8. [95]

   For convenience, s 65A of the Workers Compensation Act (which I have set out earlier in this judgment) requires a distinction to be drawn between primary psychological injury and secondary psychological injury. Under s 65A(1), no compensation is payable for permanent impairment that results from a secondary psychological injury. When an AMS (or Appeal Panel) assesses the degree of permanent impairment resulting from a primary psychological injury, no regard can be had to any impairment or symptoms resulting from a secondary psychological injury in accordance s 65A(2).

9. [96]

   The statutory scheme comprising of the WIM Act and the Workers Compensation Act creates a two-step approach in assessing the degree of WPI for a psychological injury. The assessor must first calculate the entire degree of psychological injury in line with the PIRS categories. The secondary psychological injury must then be assessed and deducted in accordance with s 65A of the Workers Compensation Act, leaving the primary psychological injury remaining.

10. [97]

    This two-step process accords with the referral of the Workers Compensation Commission on 24 October 2016. This referral provided for the AMS to assess the degree of WPI arising out of the primary psychological injury sustained by Ms Kiely as a result of the incident, excluding “any impairment or symptoms arising from or attributable to, the secondary psychological condition.”

11. [98]

    On 23 January 2018, Dr Parmigiani in his re-examination report stated:

12. [99]

    While Dr Parmigiani calculated the entire degree of psychological injury as required in step one above, he does not appear to have considered the degree of secondary psychological injury in step two as required under s 65A of the Workers Compensation Act. The Appeal Panel then accepted his assessment of 19% WPI without any qualification for secondary psychological assessment. However, as I have previously set out, Wilson J in Mercy Centre stated at [52] that an Appeal Panel is “confined to determining the grounds of appeal on which the appeal is made”. Her Honour then concluded at [53] and [55] that the first Appeal Panel’s decision was made outside of s 328(2) of the WIM Act because the AMS’s quantification of secondary psychological injury was not raised on appeal.

13. [100]

    Putting aside the fact that the Appeal Panel incorrectly conducted a re-examination without first identifying an error, together with the parties having agreed that the AMS’s initial assessments were correct in their written submissions, the Appeal Panel was not obliged to consider the quantification of secondary psychological injury as this issue was not raised on appeal. Nor was the Appeal Panel obliged to revise the WPI when this was not raised as a ground of appeal. Had it been necessary for me to express a view (which it is not), I would have determined that the Appeal Panel had misconstrued its statutory task on both these grounds.

Ground 6 – Failure to consider deduction under s 323

1. [101]

   Ground 6 concerns the failure of the Appeal Panel to consider whether it should make a deduction for Ms Kiely’s previous pre-existing condition or injury under s 323 of the WIM Act. This issue was not raised on appeal.

2. [102]

   Mercy Connect submitted that the amended referral states that the medical dispute referred for assessment includes, under s 319(d) of the WIM Act, whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality. Mercy Connect says that there is an abundance of medical evidence as to the psychological, primary psychological and secondary psychological injury on which the Appeal Panel could have formed an opinion as to pre-existing injury, condition or abnormality. The Appeal Panel failed to take into account considerations and evidence it was bound to take into account in relation to Ms Kiely’s pre-existing condition: see Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24.

3. [103]

   In its supplementary submissions, Mercy Connect also submitted that the Appeal Panel was obliged to consider a deduction under s 323 of the WIM Act in respect of the primary psychological injury. This is to be distinguished from the first Appeal Panel’s incorrect use of s 323 to quantify secondary psychological injury. The fact that the initial AMS made no s 323 deduction from the primary psychological injury did not relieve the Appeal Panel of the requirement to consider that issue afresh in accordance with the referral. In support of this submission, Mercy Connect referred to Roads and Maritime Services v Rodger Wilson [2016] NSWSC 1499, where Fagan J stated at [26]:

4. [104]

   This ground of judicial review seems to be more akin to a merits review.

5. [105]

   The referral provides that the AMS was to consider in his assessment “any deduction required under section 323 of the [WIM Act]”. In addition, the amended referral dated 31 October 2016 required the AMS to consider “whether any proportion of permanent impairment is due to any previous injury or pre-existing condition or abnormality, and the extent of that proportion…”. The AMS in his assessment noted that Ms Kiely had two previous accidents, injuries or conditions, being repeated incidents of sexual assault between the ages of 8 and 14. (At 3). Despite this, the AMS found that there was no relevant previous injury, pre-existing condition or abnormality. Accordingly, there was “no deducible proportion”. (At 9). However, no reasons were given by the AMS as to why this finding was made.

6. [106]

   Importantly, the issue of whether a 323 deduction should have been made by the AMS was not raised by Ms Kiely as a ground of appeal before the Appeal Panel. Had this been raised as a ground of appeal and had the Appeal Panel found the requisite error to conduct its re-examination, then the Appeal Panel in conducting a fresh assessment would have been obliged to consider whether any deduction was required for impairment due to a previous injury, or pre-existing condition or abnormality. This is not the case here.

7. [107]

   Accordingly, had it been necessary for me to consider this ground of judicial review, I do not consider that the Appeal Panel misconstrued its statutory duty by not considering the s 323 deduction.

Ground 7 – unreasonableness

1. [108]

   Ground 7 concerns the Appeal Panel’s decision being unreasonable.

2. [109]

   Mercy Connect submitted that the decision is unreasonable to the standard of legal unreasonableness. A decision that is legally unreasonable may give rise to jurisdictional error, either because the unreasonable outcome is indicative of underlying procedural error, or because there is no evidence and intelligible justification for the outcome: see Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [76] (“Li”), Minister for Immigration and Border Protection v Singh & Anor (2014) 231 FCR 437, and Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1. Mercy Connect submitted that the Appeal Panel’s decision was an unintelligible outcome due to the 19% WPI being adopted with no apparent explanation of the way secondary psychological injury was dealt with, as well as the failure of the Appeal Panel to understand and exercise its jurisdiction.

3. [110]

   In Li, the High Court stated at [75]-[76]:

4. [111]

   In order to find that an error on the basis of legal unreasonableness, this Court must be satisfied that the decision is unreasonable or plainly unjust, or that the decision lacks an evident and intelligible justification.

5. [112]

   While I accept that several errors arose in the Appeal Panel’s decision, I do not consider that these meet the threshold of being either unreasonable or plainly unjust, or lacking an evident and intelligible conclusion. The Appeal Panel reached their conclusion on WPI by accepting Dr Parmegiani’s findings. The mere fact that the Appeal Panel made errors in doing so does not automatically result in the decision being unreasonable in the relevant sense.

6. [113]

   Accordingly, judicial review ground 7 fails.

Conclusion

1. [114]

   The result is that grounds 1, 2, 4 and 5 of the judicial review have been made out. The decision of the Appeal Panel in matter number 3761/16 dated 27 February 2018 is set aside. The decision of the Appeal Panel in matter number 3761/16 is remitted to the Workers Compensation Commission of New South Wales to be determined in accordance with law.

2. [115]

   Costs are reserved.

   1. (1)

      The decision of the Appeal Panel in matter number 3761/16 dated 27 February 2018 is set aside.

   2. (2)

      The decision of the Appeal Panel in matter number 3761/16 is remitted to the Workers Compensation Commission of New South Wales to be determined in accordance with law.

   3. (3)

      Costs are reserved.