Ballas v Department of Education (State of NSW)

BELL P AND PAYNE JA: The applicant (Ms Ballas) was employed by the first respondent (the Department) from 1991, and worked as a primary school teacher at Yagoona Public School from 1999. From 2011 to 2016, she was exposed to a series of events that resulted in a significant psychological injury.

On 24 October 2016, Ms Ballas brought a claim for permanent impairment compensation. Liability was not disputed.

The availability in New South Wales of permanent impairment compensation in respect of a psychiatric or psychological disorder suffered in connection with a worker’s employment depends upon a claimant’s whole person impairment (WPI) as a result of that injury being assessed at 15% or more: s 65A(3) of the Workers Compensation Act 1987 (NSW) (the 1987 Act). An assessment below 15% WPI also operates to preclude consideration of a claim in work injury damages arising out of the circumstances in which the injury was sustained: s 151H of the 1987 Act.

Under the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the 1998 Act), where the degree of impairment is in dispute, the assessment is made by an Approved Medical Specialist (AMS) and results in the issue of a “medical assessment certificate” (MAC), explained in more detail at [18] below.

The assessment is not “at large” as it were in the form of a single and conclusory expert pronouncement as to the percentage of the injured person’s impairment. Rather, it results from a far more structured and directed process in accordance with the Workers Compensation Guidelines 2016 (NSW) (the Guidelines) issued by the State Insurance Regulatory Authority (the Authority). An understanding of that process is critical to the disposition of this appeal.

Ms Ballas was assessed by Dr Michael Hong (Dr Hong) as having a WPI of 8%. That assessment had two major consequences:

The present appeal, brought pursuant to a grant of leave on 29 October 2019, is from a decision of Wright J (the primary judge) sitting in the Administrative List of the Common Law Division of this Court. His Honour relevantly refused judicial review of a decision of the delegate (the Delegate) of the Registrar (the Registrar) of the Workers Compensation Commission (WCC) by which the Delegate refused an application to appeal from Dr Hong’s 8% WPI assessment: Ballas v Department of Education (State of NSW) [2019] NSWSC 234.

The Delegate’s decision was given on 17 July 2018.

On 22 August 2018, and before Ms Ballas had commenced her judicial review proceedings (which she did on 14 September 2018), Ms Annette Farrell, an Arbitrator of the WCC, issued a Workers Compensation Commission Certificate of Determination in accordance with s 294 of the 1998 Act. That Certificate was in the following terms:

To do justice to the careful and detailed arguments presented, and in order to understand the basis of the appeal to this Court, it is necessary to set out at some length:

Section 4 of the 1987 Act provides that “injury”:

Section 9 of the 1987 Act provides that:

Section 65(1) of the 1987 Act provides that:

Although s 66(1) of the 1987 Act, which is headed “Entitlement to compensation for permanent impairment”, provides that a “worker who receives an injury that results in a degree of permanent impairment greater than 10% is entitled to receive from the worker’s employer compensation for that permanent impairment as provided by this section”, s 65A(3) contains special provisions for psychological and psychiatric injury, and provides that:

Assessment of impairment is governed by the 1998 Act. If there is a medical dispute concerning the permanent impairment of an injured worker, there is a process pursuant to s 321A of the 1998 Act, and the Regulations made under that section, by which the worker is referred by the Registrar to an AMS who examines the worker, and issues a MAC.

Section 322(1) of the 1998 Act provides that:

Section 324 of the 1998 Act outlines the powers of an AMS on assessment, including that they may consult with any medical practitioner or other health care professional who is treating or has treated the worker, call for the production of medical records and other information as the AMS considers necessary, and require the worker to submit himself or herself for examination by the AMS.

Section 325(1) of the 1998 Act requires the AMS, to whom a medical dispute has been referred, to give a MAC as to the matters referred for assessment. Under s 325(2), the MAC is required to set out details of the matters referred for assessment, a certification of the AMS’s assessment, the reasons for that assessment and the facts on which that assessment is based. Under s 326, an assessment certified in a MAC is conclusively presumed to be correct as to, amongst other things, the degree of permanent impairment of the worker as a result of the injury.

The power to issue the Guidelines is vested in the Authority and is sourced in s 376(1)(a) of the 1998 Act.

The Guidelines which were in force at the time that Dr Hong made his assessment of Ms Ballas were issued on 1 April 2016 and applied to assessments of permanent impairment conducted on or after that date.

Chapter 11 of the Guidelines, styled “Psychiatric and psychological disorders”, is relevant for the purpose of the current appeal, and, to employ the language of s 11.1, “lays out the method for assessing psychiatric impairment. The evaluation of impairment requires a medical examination.”

Sections 11.11 and 11.12 of the Guidelines are concerned with what is described as the “Psychiatric impairment rating scale”, which is given the acronym “PIRS” in the Guidelines. Section 11.11 provides:

The “class descriptors”, numbered 1 to 5, for each of the six scales are identified in the tables referred to in s 11.12 of the Guidelines. The most relevant of those tables for the purpose of this appeal are the following:

Section 11.13 of the Guidelines provides that rating psychiatric impairment using the PIRS is a two-step procedure, involving determination of the “median class score” and calculating the “aggregate score”. Sections 11.14–11.20 then detail how these two scores are used to determine percentage impairment, with worked examples provided. For present purposes, it suffices to observe that Ms Ballas’s argument on appeal, if correct, has the potential to result in a recalculation and a WPI of greater than 15%.

Section 327 of the 1998 Act provides for an appeal against a medical assessment, as follows:

Notwithstanding the language of s 327(4) of the 1998 Act, the appeal to which s 327 refers is one to an Appeal Panel, with s 328(1) providing that “[a]n 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.” The appeal is to be by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made (s 328(2)), and 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: s 328(5).

As outlined at [18] above, s 326(1)(a) of the 1998 Act states that the degree of permanent impairment of the worker as a result of an injury is one of the matters as certified in a MAC which is conclusively presumed to be correct, and thus is appealable under ss 327(1) and (2) of the 1998 Act.

The terms of s 369(3) of the 1998 Act, dealing with the qualifications for appointment of a Registrar, should also be noted:

Section 371 of the 1998 Act deals with the functions of the Registrar, with sub-section (2) specifying that the “Registrar can delegate to any member or member of staff of the Commission any of the Registrar’s functions under the Workers Compensation Acts, except this power of delegation”.

As has been noted at [6] above, Ms Ballas was referred to Dr Hong who assessed her as having an 8% WPI.

In making this assessment, Dr Hong completed a prescribed form which is reproduced below in its entirety:

On 8 June 2018, pursuant to s 327(4) of the 1998 Act, Ms Ballas lodged with the Registrar an application to appeal against the medical assessment, on the basis that when making the assessment of Social and Recreational Activities, Dr Hong had made a “demonstrable error” and applied “incorrect criteria”, adopting the terminology of ss 327(3)(c) and (d) of the 1998 Act.

Ms Ballas’s application was accompanied by submissions styled “Draft Appellant’s Submissions”. It was submitted in this Court that both the form prescribed for the making of applications to appeal to the Appeal Panel, and the practice before the Commission, required that such submissions accompany the application to the Registrar but were for the benefit of the Appeal Panel, if the Registrar permitted the appeal to pass through the gateway. This submission would appear to be consistent with the submissions being styled “Draft Appellant’s Submissions” in much the same way as an applicant in this Court who requires leave to appeal is required to file a Draft Notice of Appeal with any application for leave.

In truth, the Draft Submissions which accompanied the application to the Registrar were required for dual purposes: first, consideration by the Registrar in the discharge of the statutory task assigned to the Registrar by s 327(4) of the 1998 Act; and, secondly and contingently, for the benefit of the Appeal Panel if the gateway was passed.

For the purpose of understanding the decision of the Delegate of the Registrar, and the basis for the application for judicial review, it is necessary to set out in full the Draft Appellant’s Submissions which accompanied the application to the Registrar. They were as follows, subject only to the fact that for ease of later consideration, we have assigned paragraph numbers to the submissions:

Brief submissions were also filed by the Department in opposition to the application to appeal. It is not necessary to reproduce them for present purposes.

The decision of the Delegate of the Registrar was made on 17 July 2018. As has been noted at [7] above, she refused the application. It is necessary to reproduce the entirety of the Delegate’s decision, as follows:

On 14 September 2018, Ms Ballas commenced proceedings in this Court for judicial review, pursuant to the Supreme Court Act 1970 (NSW) s 69. The Department was named as first defendant. The other defendants were the Registrar of the WCC, the Delegate of the Registrar of the WCC and the Arbitrator of the WCC respectively.

The application for judicial review sought the following relief:

No argument was advanced in the judicial review proceedings at first instance on behalf of any of the defendants that the Court did not have the power to grant any of the relief sought as set out above, including the power to set aside the Certificate of Determination issued by the Fourth Defendant on 22 August 2018. Notwithstanding this, Senior Counsel for the Department sought to raise this question by a Notice of Contention filed in this appeal. This Notice of Contention is addressed at [102] – [132] below.

The Summons for judicial review also set out what it was contended were the jurisdictional errors and errors on the face of the record which Ms Ballas relied upon. These were as follows:

His Honour grouped grounds (a), (b), (d) and (e) and treated them together under the heading “Failure to Consider the Submission Ground”. He styled ground (c) as the “Discretion as to Category Ground”, and treated grounds (f) and (g) as consequential and dependent on the other grounds being established.

The application for judicial review was dismissed on 8 March 2019: [2019] NSWSC 234.

In relation to what the primary judge styled the “Failure to Consider the Submission Ground”, his Honour summarised his conclusions at [61], stating that the Delegate:

His Honour said that “[f]or these reasons, I conclude that the Delegate has not misunderstood Ms Ballas’s submission or failed to address it. The Failure to Consider the Submission Ground is not made out”: at [62].

Wright J’s reasoning in relation to what his Honour described as the “Discretion as to Category Ground” was as follows (at [65]-[69]):

It should also be noted that the primary judge accepted that the Draft Appellant’s Submissions relied upon by Ms Ballas before the Delegate expressly raised the argument that, when assessing “social and recreational activities”, the AMS took into account irrelevant considerations and failed to take into account relevant considerations: at [41]. It had evidently been argued that this ground was not clear on the face of Ms Ballas’s submissions, such that the Delegate could not be criticised in the way sought to be agitated in the application for judicial review. No challenge was made by way of cross-appeal to this aspect of the judgment below.

In her Notice of Appeal in this Court, two grounds were raised by the appellant as follows:

The first of these grounds goes to the role of the Registrar (in the present case, performed by a Delegate), under s 327(4) of the 1998 Act.

The second ground is essentially a challenge to Wright J’s conclusions reproduced at [45] above.

Before turning to a consideration of each of these grounds, it is necessary to make a number of observations about the expression “demonstrable error” as used in s 327(3)(d) of the 1998 Act.

In Merza v Registrar of the Workers Compensation Commission [2006] NSWSC 939 (Merza), Hoeben J (as his Honour then was) said that it was sufficient for the purposes of determining that case to conclude that a “demonstrable error” is an error that is “readily apparent” from an examination of the MAC and the document referring the matter to the AMS for assessment: at [39]. He had earlier observed that “error alone [was] not sufficient”: at [35].

The Second Reading speech to the Workers Compensation Legislation Amendment Bill 2001 (NSW) (see New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 19 June 2001 at 14775) contains the following statement in relation to a “demonstrable error”, noting that the meaning of the expression, left undefined in the 1998 Act, is for the Court to determine:

In Mahenthirarasa v State Rail Authority of New South Wales [2008] NSWCA 101, Basten JA referred to the observations of Hoeben J in Merza before going on to say (at [59]-[60]) that:

The meaning of “demonstrable error” was also considered by this Court in Pitsonis v Registrar of the Workers Compensation Commission (2008) 73 NSWLR 366; [2008] NSWCA 88 at [47]-[49] (Pitsonis), where Mason P said:

In Vannini v Worldwide Demolitions Pty Ltd [2018] NSWCA 324 at [87] (Vannini), Gleeson JA noted that it was not in dispute that an error is not demonstrable merely because the Panel disagrees with the opinion of the AMS. There is, however, a difference between mere disagreement and a conclusion that, even with regard to a decision of a kind that permits “some latitude of opinion such as to admit a range of legally permissible outcomes”, the decision was outside the range: Vannini at [92].

Section 327(4) of the 1998 Act provides that:

Under s 327(4), the Registrar plays a “gatekeeper” role, in that before an appeal under s 327 can proceed, the Registrar must be “satisfied” that at least one of the grounds for appeal in ss 327(3)(a)-(d) has been “made out”.

Section 327 was amended by the Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act 2005 (NSW) Sch 1.1 cl 22. In Bunnings Group Limited v Hicks [2008] NSWSC 874 at [56] (Bunnings), Simpson J (as her Honour then was) noted that, prior to the amendments which took effect from 1 November 2006, s 327(4) took the following form:

Her Honour noted that, in this form, the role of the Registrar was that of a “gatekeeper”, and had been so interpreted in the Supreme Court. Thus, in Campbelltown City Council v Vegan [2004] NSWSC 1129 at [74]-[75], Wood CJ at CL referred to an argument advanced by the WorkCover Authority to the effect that:

The decision went on appeal (Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284), but the appeal focussed on the extent of any obligation on the part of the Appeal Panel to give reasons.

In Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission (NSW) [2007] NSWCA 149; (2007) 4 DDCR 607, Campbell JA, with whose reasons in this respect Hodgson JA and Handley AJA agreed, said (at [74] and [76]):

These paragraphs were quoted by Mason P (with whom McColl and Bell JJA agreed) in Pitsonis at [20].

Returning to Bunnings, Simpson J concluded that the change of terminology effected by the 2006 amendments to s 327(4) had not altered the role of the Registrar as a “gatekeeper”, but that it had “varied or altered the test that she must apply in determining whether the gates are to be opened, and the appeal permitted to proceed”: at [58]. Her Honour went on to consider the extent of that variation or alteration in an analysis which is of direct relevance to the present case. Thus, at [64]-[76], her Honour said:

Simpson J’s focus in [72]-[73] on the contrast between the expertise of the AMS (which is required by s 121(1) of the 1998 Act) and the Registrar (see s 369(3)), and the implications of that contrast for the role of the Registrar under s 327(4) was, in our opinion, particularly apposite and, as her Honour observed, the contrast is even more acute when it is appreciated that the Registrar’s task under s 327(4) may be delegated to an officer of the Commission who is not even required to have the basic legal qualifications required of the Registrar.

The contrast to which her Honour drew attention may also be made between the lack of medical expertise required of a Registrar and any Delegate, and the qualification requirements for the Appeal Panel which, pursuant to s 328(1), requires two approved medical specialists and one arbitrator, as chosen by the Registrar. Section 121(1) of the 1998 Act defines an “approved medical specialist” as:

These matters and considerations of context bear profoundly on the meaning to be attributed to the words “at least one of the grounds for appeal specified in subsection (3) has been made out” in s 327(4). It cannot have been the intention of the legislature that the Registrar, still less his or her Delegate, determine appeals, a conclusion that may otherwise be suggested by the words “made out”, especially when juxtaposed with the expression “is satisfied”. Such an interpretation would also be at odds with the very existence of, and role to be performed by, a Medical Appeal Panel for which the 1998 Act makes provision (and see, for example, in relation to the nature of an appeal to that body, Siddik v WorkCover Authority of NSW [2008] NSWCA 116).

In Vannini at [19], Gleeson JA referred to [58] of Simpson J’s decision in Bunnings for the proposition that the “amendments to s 327(4) of the Management Act in November 2006 have not altered the role of the Registrar as gatekeeper”. The Court did not expressly consider what her Honour had said about the role of the Registrar and the degree of satisfaction required under s 327(4), as Vannini was a case which involved a challenge to the decision of the Appeal Panel, and not the Registrar. Gleeson JA, with whom Macfarlan JA and Barrett AJA agreed, did, however, make the following observation at [83], which is consistent with Simpson J’s analysis of the Registrar’s role under s 327(4):

On the hearing of the appeal in the present case, Senior Counsel for the Department, Dr Allars SC, accepted and did not seek to challenge the correctness of the formulation of the approach articulated by Simpson J in Bunnings. Nor was any submission put that the passage from Vannini that we have set out at [68] above was wrong, insofar as it made reference to the task of the Registrar under s 327(4). Indeed, that decision was positively referred to in the Department’s written submissions in support of the submission that “[t]he Registrar looks to the capacity of the appeal ground being made out (ie an arguable case of error) while the Appeal Panel determines whether such an error has been demonstrated.”

In both written and oral submissions, Senior Counsel for Ms Ballas contended that the Delegate misconstrued the “gatekeeper” nature of the task ascribed by s 327(4) to the Registrar. He submitted that the Delegate, rather than looking to whether the appeal grounds were capable of being made out, proceeded to determine the appeal. An analysis of the Delegate’s language lends strong support to this submission. Thus phrases such as “I do not accept that …” (see [25] of the Delegate’s decision extracted at [37] above) and “I am not satisfied that the AMS has made the assessment based on incorrect criteria or that there is a demonstrable error on the face of the MAC” (see [29] of the Delegate’s decision) both have the tone of final determination.

Certainly, the Delegate did not express herself in terms of whether Ms Ballas’ proposed grounds of appeal were capable of, in the sense of having the potential to be, made out. Dr Allars sought to counter this argument by stating that it followed from the conclusory language in which the Delegate expressed herself that she must have necessarily formed the opinion that the proposed grounds were not capable of being made out. In other words, a conclusion that something is not made out must carry with it an implicit conclusion that it is not capable of being made out.

The fallacy with this submission is that it reasons backwards from the non-expert conclusion that the Delegate was not authorised (or qualified) to reach. An assessment of arguability, to adopt and adapt the language of Gleeson JA in Vannini, is a very different exercise, as the Registrar or his or her Delegate is required to make that assessment “on the face of the application, and in any submissions made to the Registrar”: at [19]. It involves an assessment and satisfaction that an argument to support the nominated grounds is manifest in those two documents. If it is, that argument passes the gatekeeper and goes to the expert Appeal Panel. This process does not involve the Delegate in assessing the correctness of the argument but simply that what has been put forward is arguable.

In the present case, we are not satisfied that this is what the Delegate did. Not only did she fail to pose the correct questions and embark on the correct process, namely to achieve satisfaction that an “arguable case of error” had been established (this being sufficient to establish the first ground of appeal), she fundamentally misconstrued the nature of the error that Ms Ballas had identified as a “demonstrable error” within the meaning of s 327(3)(d) in the submissions accompanying the application.

The learned primary judge accepted, as we have already pointed out, that this argument was sufficiently articulated in the submissions put before the Delegate (see at [47] above). His Honour also found that the Delegate properly considered this argument.

For the reasons that follow under the consideration of the second ground of appeal, the Delegate did not do so, and the primary judge should have found that her decision was infected by jurisdictional error: Craig v South Australia (1995) 184 CLR 163 at 179; [1995] HCA 58; Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123; [2018] HCA 34.

Whilst it is true (and indeed was accepted by Ms Ballas) that the Delegate correctly stated what Ms Ballas’s argument was at [21] of her reasons (see [37] above), the consideration of that argument in the paragraphs that followed revealed that the Delegate had, with respect, not properly understood it, and had conflated “scales” and “classes” in the Guidelines and had misunderstood the process that an AMS was required to go through in making his or her assessment of WPI.

It was put that the conflation of concepts, as reflected in the language of the Delegate’s decision, had the consequence that the Delegate could not have given proper consideration to Ms Ballas’s argument (or indeed to its arguability, had the Delegate asked herself the correct question). It was put that, in addition to the language employed by the Delegate (which we will consider further below), the conflation of concepts in the Delegate’s reasons was also to be seen in her reference in [16] and [23] of those reasons to the decision of Garling J in Jenkins v Ambulance Service of New South Wales [2015] NSWSC 633 (Jenkins).

Dr Allars sought to counter this submission by invoking the well-known words of the High Court in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272; [1996] HCA 6 (Wu Shan Liang) that:

The Court is, of course, well familiar with the High Court’s injunction in Wu Shan Liang. However, given that reasons and therefore erroneous reasons (if there be error) will generally manifest themselves in the language of the decision-maker, the injunction cannot be taken too far nor invoked so as to mask jurisdictional error that emerges in, or from, a decision-maker’s reasons. In this context, reference was made to the observations of Hamill J in Sadsad v NRMA Insurance Ltd [2014] NSWSC 1216 at [47], who in turn had cited the decision of Stone J in SZCBT v Minister for Immigration and Multicultural Affairs [2007] FCA 9 at [26] as follows:

For the reasons given below, we do not think that Wu Shan Liang can be deployed in the present case to explain away what we consider to be the Delegate’s error (and the primary judge’s error in concluding that there was no error by the Delegate).

For the purpose of considering the criticism of the Delegate’s decision and the primary judge’s consideration of it, it is convenient to focus upon the following four paragraphs from Ms Ballas’s submissions to the Delegate (the complete submission having been set out at [35] above):

This submission had, underpinning it, an argument that each of the “scales” referred to in s 11.11 of the Guidelines was focussed on different particular behavioural consequences of the injured worker’s psychiatric disorder, and that each “scale” was a distinct area of functional impairment (see [22] above) falling to be separately assessed. It was important in this regard, so the argument ran, that only matters relevant to the distinct area or “scale” were taken into account in making an assessment of the degree of impairment in that particular area.

It will be recalled that for each area of functional impairment, an AMS was required to assign a “class” of between 1 and 5 in order to “rate” each particular area of functional impairment. Tables are supplied in the Guidelines in respect of each particular area or “scale” which supply examples of behaviour or conduct that would merit a particular rating or “class” of between 1 and 5. The tables relevant to the area or “scale” of functional impairment described in s 11.11 as “social and recreational activities” and “social functioning” have been reproduced at [23] above.

Misassignment of conduct to a particular area or “scale”, and assessment of that conduct for the purposes of assigning a rating or “class” to that area, has the potential to distort the overall WPI of an injured worker. Thus it was submitted and accepted as correct that, had Dr Hong assigned a rating of 3 rather than 2 to the “social and recreational activities” area of impairment, then, applying the formulae in ss 11.13-11.20 of the Guidelines (see [24] above), Ms Ballas’s overall WPI would have been 17% rather than 8%. This difference would have major implications for Ms Ballas, including entitling her to permanent impairment compensation (see [6] above).

The argument advanced by Mr Hooke SC on behalf of Ms Ballas was that, in giving his reasons for the particular rating of 2 assigned to the “social and recreational activities” area of impairment (the reasons are set out in the prescribed form reproduced at [31] above), Dr Hong took into account matters that, whilst they may have been relevant to other areas of impairment that fell for assessment such as “travel” and “social functioning”, did not bear upon that area identified as “social and recreational activities”. In particular, the solitary nature of Ms Ballas’s gambling was said not to be relevant to “social and recreational activities” because, to quote from para 6 of her submission to the Delegate, that scale “is directed to the kind of activities that involve interactions with other people”. This was the essence of what made it “arguable” that the AMS had made a “demonstrable error”.

The question for the primary judge was whether the Delegate properly considered this argument, and the question for this Court is whether, in concluding that the Delegate did, the primary judge erred.

It should at this point be observed that the nomenclature employed in the Guidelines is apt to confuse. The word “scales” is used in the Guidelines to describe areas or categories of functional impairment, even though the word “scale” is not a natural synonym for either of those two concepts. The word “classes” is actually closer in ordinary English meaning to “categories”, but is used in the Guidelines to mean degrees of impairment. The Guidelines moreover allow for the assignment of a range of impairment from 1-5 which may be thought of in terms of a “scale” in its ordinary English sense. It is not difficult to understand how, therefore, confusion may arise.

A review of the Delegate’s decision shows that, on a number of occasions, she conflated these concepts. One example is supplied by contrasting the Delegate’s use of the word “category” in [18] of her reasons (which clearly was a reference to “scale”, because she spoke of a “category of social and recreation”, corresponding to the second of the six scales in s 11.11 of the Guidelines) with her statement in [23] that “PIRS categories are examples of activities only” and are “generic and general in their description”, citing Garling J’s decision in Jenkins. Here, she was using the word “categories” to refer to the “classes” by reference to which activities are rated. That is so both as a matter of language and context, for Jenkins was a case which focussed on “classes”.

Further, in [25] of her reasons, the Delegate having stated that she did not accept that the activity of attending a RSL Club once a month was necessarily an activity that ought to fall within class 3 and not class 2, she went on to state that “the PIRS categories are not a [sic] rigid in formation and they are to be applied by an AMS based on the history taken by him [or] her during the clinical examination”. Here, as a matter of context, the Delegate would appear to be using “PIRS categories” to refer to “classes”, rather than to “scales”. This would appear to be inconsistent with her earlier use of the word “category” in [18] (referred to at [88] above).

When one turns to [24] of the Delegate’s reasons, it is frankly unclear whether the Delegate was intending to refer to “scales” or “classes”, although we incline to the view that it was the latter. In that paragraph the Delegate stated that:

It is for these reasons that we reject the primary judge’s conclusion at [57] that “it is clear that, when referring to ‘PIRS categories’ in [24] and ‘categories’ elsewhere, the Delegate was referring to the scales or functional areas and not classes within them.” The Delegate used the word “categories” at some points in her reasons to refer to “scales” and at other points in her reasons to refer to “classes”. At the very least, there was no clarity as to the Delegate’s decision.

If, in [24] of her reasons (see [90] above) and contrary to our preferred view, the Delegate was referring to categories as “scales”, as the primary judge found, then the Delegate was wrong to speak in the language of “discretion”. The scales are fixed and are treated by the Guidelines as distinct from each other. The structure of the Guidelines, and the mandated use of a standardised form on which an AMS must specify the “class” he or she assigns to each “scale” and give his or her reasons for doing so, are designed to add transparency and rigour to the exercise of WPI assessment.

Whilst it is no doubt correct that an AMS must exercise a degree of clinical judgment in assigning a class of seriousness to each area which he or she is required to address in completing a medical assessment, the characterisation of conduct as going to “social and recreational activities” on the one hand, as opposed to any of the other five scales on the other hand, is not a matter of discretion.

Even if there may, as a matter of English language, be some overlap between some of the scales or categories of functional impairment, for the purposes of the WPI assessment exercise, particular conduct will fit within one or other of the scales. This calls for the correct characterisation of the conduct, ie whether it goes to “self care and personal hygiene”, “social and recreational activities”, “travel”, “social functioning (relationships)”, “concentration, persistence and pace” or “employability”. This does not involve an exercise of discretion. If conduct is wrongly assigned to one scale, when it should have been assigned to another, this will result in the AMS taking into account an irrelevant consideration in the context of assigning a class to each of the distinct scales. This will inevitably bear upon the calculation of the WPI which is critical for an injured worker’s entitlement to compensation.

In the present case, it was plainly “arguable”, to use the language of Vannini, that the AMS took into account an irrelevant consideration in relation to the scale “social and recreational activities” when he made reference in his reasons to “[s]ees one friend regularly” (see [9] of the submissions to the Delegate, extracted at [81] above). This is because there is a separate scale entitled “Social functioning (relationships)” to which that conduct is more directly relevant.

Whilst it could be said that seeing a friend is a form of social activity, in the context of a process that has a distinct category or scale dealing with relationships and in circumstances where the AMS is directed by s 11.15 of the Guidelines to address each area of functional impairment separately, the degree of regularity of seeing a friend or friends fell squarely within the “Social functioning (relationships)” scale.

The aim of the Guidelines (which have been held to have the force or effect of delegated legislation: see Kolundzic v Quickflex Constructions Pty Ltd [2014] NSWSC 1523 at [25]-[28]; Jenkins at [29]) would be subverted if the decision as to which scale to place certain conduct in for the purposes of assessing seriousness of impairment were left to the discretion of an AMS, as the Delegate indicated it could be. This would also have ramifications for the reviewability of decisions by an AMS. There is an important difference between a characterisation exercise and an exercise of discretion.

We are unable to accept the primary judge’s conclusion in [60] of his judgment in relation to [25] of the Delegate’s reasons that:

As we have already stated at [89] above, the Delegate’s decision at [25], in using “categories” to refer to “classes” rather than “scales” in this paragraph, appeared to be responding to an argument that the AMS had assigned the wrong class (a “2” rather than a “3”) to the scale of social and recreational activities. So much follows from the opening words of [25] of the Delegate’s decision. The primary judge’s conclusion in [60] of his Honour’s judgment set out at [98] above cannot be sustained. His Honour’s opening reference to the fact that this paragraph of the Delegate’s decision may not be “entirely elegant” highlighted the confusion that was immanent in the Delegate’s reasons.

The “social and recreational activities” scale looks to the injured worker’s degree of participation in such activities. This scale, it was argued, was directed towards an assessment of an injured worker’s interaction with other people, and not a solitary activity such as gambling on poker machines. As was put in the submissions to the Delegate, when one examined the examples that were given for classes 1-5 in Table 11.2 of the Guidelines, all involved some degree of interaction with others, to a greater or lesser degree and on a sliding scale. It was plainly arguable in our opinion that that was the case, and this being so, the requisite level of satisfaction under s 327(4), as explained earlier in these reasons, should have been held to have been met.

For all of the above reasons, the Delegate erred and that the primary judge in turn erred in holding to the contrary. It follows that appeal ground 2 has been sustained. Subject to consideration of the Notice of Contention, the appeal should be allowed.

The Department’s Notice of Contention provided, relevantly: [1]

Although the issues raised by the Notice of Contention were not agitated below, as grounds 1 and 3 of the Notice of Contention raise a question of jurisdiction it is appropriate that leave be granted to consider them.

The question raised is whether a Certificate of Determination issued by the WCC pursuant to s 294 of the 1998 Act has the effect of superseding the Delegate’s decision and placing it beyond the Court’s supervisory jurisdiction under s 69(3) of the Supreme Court Act. By reason of a subsequent application made by Ms Ballas after the hearing in this Court, the Department now seeks to advance a submission that the refusal by the WCC to reconsider the decision to issue the Certificate of Determination under s 350(2) of the 1998 Act (the reconsideration determination) also has the effect of placing the decision by the Delegate beyond the Court’s supervisory jurisdiction.

For the reasons that follow both questions should be answered “no”. Both the original Certificate of Determination and the reconsideration determination should be set aside. This is on two bases. First, setting aside the Certificate of Determination and the reconsideration determination is necessary consequential relief having regard to the established jurisdictional error in a critical step in the statutory process of the WCC making a determination. Secondly, the original Certificate of Determination and the reconsideration determination were themselves affected by jurisdictional error.

On this second point, the Department submitted that an order should not be made setting aside the Certificate of Determination and the reconsideration determination as themselves being affected by jurisdictional error as this was not relief originally sought by Ms Ballas in the Notice of Appeal. That submission should be rejected. The issue the subject of the Notice of Contention was not raised at all by the Department before the primary judge. Ms Ballas was entitled to take the view that the Notice of Appeal framed as seeking consequential relief about the Certificate of Determination was sufficient. In any event, both parties were permitted to make two rounds of additional written submissions about this issue and, having regard to the Department’s conduct of the case, there is no unfairness in permitting Ms Ballas to advance the argument that the original Certificate of Determination and the reconsideration determination were each themselves affected by jurisdictional error.

The Certificate of Determination was issued under s 294 of the 1998 Act which provided:

The nature of the “dispute” which was “determined by the Commission” the subject of the Certificate of Determination is here critical. Where there is a dispute in connection with a claim for compensation, any party to the dispute may refer the dispute for determination by the WCC: s 287(1) of the 1998 Act. Where the dispute is about lump sum compensation, only the claimant can refer the dispute: s 288(1) of the 1998 Act.

When, as in the present case, the dispute referred to the WCC comprises a medical dispute, s 293(1) of the 1998 Act applies. At the date the Certificate of Determination was issued on 22 August 2018, s 293 of the 1998 Act provided:

The present case involves a “medical dispute within the meaning of Part 7” and the “medical dispute” was referred to Dr Hong for “medical assessment under Part 7”. The “determination of the dispute by the Commission” is deferred pending the “outcome of that medical assessment”.

This Court has an entrenched jurisdiction under s 69(3) of the Supreme Court Act to grant the necessary relief in relations to decisions affected by jurisdictional error. Section 350(2)(b) of the 1998 Act does not insulate the Certificate of Determination or the reconsideration determination from the Court’s supervisory jurisdiction in the case of jurisdictional error: Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1 (Kirk). Section 350 provides:

We reject the Department’s central submission that in “the same manner as an appellate decision, [the Certificate of Determination and the redetermination decision] supersedes decisions made along the way, whether by an AMS, the Registrar or an Appeal Panel”.

The principal case relied upon for this proposition by the Department, Wishart v Fraser (1941) 64 CLR 470; [1941] HCA 8 (Wishart v Fraser) as applied by this Court in Vitaz v Westform (NSW) Pty Ltd [2011] NSWCA 254 at [23]-[24] (Vitaz), is not authority which assists the Department in the present case. It is necessary to examine Vitaz in some detail. The essence of that decision is that, in applying the principles in Wishart v Fraser, a challenge by way of judicial review to the decision of the AMS is incompetent where there has been a concluded appeal to an Appeal Panel. Of course, in the present case, the decision of the Delegate which was affected by jurisdictional error meant that there has been no appeal from the AMS’s medical assessment.

In Vitaz Basten JA (with whom McColl JA and Handley AJA agreed) explained that, in determining whether an order “confirming” a certificate may constitute the exclusive authority for the decision under review, close attention must be paid to the particular statutory scheme which is engaged. His Honour’s conclusion was that in this statutory scheme, following a decision of the appellate body, judicial review proceedings may not be brought in respect of the original decision. That is not what occurred here. Indeed, one important aspect of the jurisdictional error was that the Delegate misunderstood the statutory power engaged and determined the question as if the Delegate was entitled to act in the place of Appeal Panel. Ironically, given this conclusion, the Department here submitted that relief should be refused to Ms Ballas on discretionary grounds as the appellate procedure had not been used. Basten JA’s reasons at [19]-[24] of Vitaz (with which McColl JA and Handley AJA agreed) should be set out in full:

Vitaz deals with a situation quite different to the present. On the correct construction of the 1998 Act, the Certificate of Determination was not an appellate affirmation of the decision of the Delegate. The WCC was not exercising appellate jurisdiction in respect of the Delegate, and the Certificate of Determination and the reconsideration decision did not “confirm”, “uphold”, or otherwise pass judgment on the Delegate’s decision. Under s 293 of the 1998 Act, the WCC was required to “defer determination of the dispute by the Commission pending the outcome of that medical assessment”. The decision by the WCC to issue the Certificate of Determination in circumstances where, by reason of the Delegate’s jurisdictional error, the process of medical assessment miscarried, was itself jurisdictional error.

Nor did the Certificate of Determination make any relevant determination about the MAC or Dr Hong’s decision. This is because, on the correct construction of the 1998 Act, in issuing the Certificate of Determination the WCC was bound by the outcome of the medical assessment. This is the effect of s 326 of the 1998 Act which provided:

The MAC issued by Dr Hong related to the “degree of permanent impairment of the worker as a result of an injury”. Section 326(1) of the 1998 Act provides that the MAC was “conclusively presumed to be correct”. It was by reason of the decision of the Delegate, affected by jurisdictional error, that Ms Ballas’s application to appeal the making of that MAC was not in truth considered.

It is not the role of the WCC to determine “medical disputes” about the assessment of permanent impairment, that is reserved to an AMS, subject of course to an appeal to an Appeal Panel: Haroun v Rail Corporation of NSW [2008] NSWCA 192; 7 DDCR 139 at [16]-[20]. As Handley AJA there explained (at [17]-[20]) about sections that were materially the same:

In this case, there was jurisdictional error in the Delegate’s decision. This error was a critical causative step in the ultimate determination of the WCC leading to the issue of the Certificate of Determination. An alleged error in making the underlying MAC was identified by Ms Ballas. An appeal from the decision of the AMS was sought to be brought. By reason of the s 327(4) decision of the Delegate being affected by jurisdictional error Ms Ballas’s application to have her appeal heard by an Appeal Panel failed to be considered.

As a matter of construction of the 1998 Act, the Certificate of Determination issued here could not have been issued save for the erroneous decision of the Delegate. This is because, in the present circumstances and on the correct construction of the 1998 Act, the “determination of the dispute by the Commission” reflected in the Certificate of Determination miscarried. The WCC was obliged by the statute to “defer determination of the dispute by the Commission pending the outcome of that medical assessment”. Here there was no “outcome” of the medical assessment because a step mandated by the statute in the determination of the medical assessment was not taken by reason of the jurisdictional error of the Delegate. The same conclusion applies to the reconsideration determination. The Certificate of Determination and the reconsideration determination must be set aside as necessary consequential relief having regard to the jurisdictional error in the decision of the Delegate and as decisions themselves affected by jurisdictional error.

The cases referred to by the Department do not establish that the decision of the Delegate is here immune from this Court’s supervisory jurisdiction. The case of Ali Ali v Rockdale City Council [2015] NSWSC 1481 (Ali Ali) deals with a different point. Stevenson J, sitting in the administrative law list, explained that after the impugned decision of the AMS to issue a MAC an Appeal Panel of the Commission confirmed the certificate. Critically, the Certificate of Determination in that case was made by consent. As his Honour explained:

The Certificate of Determination in Ali Ali was not issued pursuant to s 294 of the 1998 Act following “a determination by the Commission”, but pursuant to r 15.9(1) of the Workers Compensation Commission Rules 2011 (NSW). At that time r 15.9(1) of the Rules was in the following terms:

In order to engage r 15.9, the orders needed to be made by consent. The applicant’s consent was a jurisdictional fact found against Mr Ali Ali. Ali Ali is not authority supporting the Department’s jurisdictional argument.

Mulholland v Australian Electoral Commission (2014) 219 FCR 1; [2014] FCA 136 at [35]-[36] per Murphy J also addresses a quite different issue. The case turned on the construction of a statutory review by the Australian Electoral Commission of a decision of its Delegate. The review which had taken place was unlimited in scope. The powers of the Electoral Commission on review extended to confirmation, variation, or setting aside of the decision, and included a power to substitute a different decision for that under review. As Murphy J explained at [35]:

His Honour went on at [36]-[37] to examine and apply the passages from the judgment of Basten JA in Vitaz that are set out above. For the reasons already given, the present case is very different to Vitaz.

The Department’s jurisdictional argument is inconsistent with the entrenched jurisdiction of this Court under s 69 of the Supreme Court Act. In Kirk, the High Court quashed both the orders of Walton J at first instance and the orders of the Full Bench on appeal because the same jurisdictional errors infected both sets of orders. As the plurality explained at [108]:

The failure of the WCC to identify jurisdictional error in this case in issuing the Certificate of Determination and in making the reconsideration determination is itself jurisdictional error. So much was established by Kirk. The WCC was correct in making the reconsideration decision to observe at [55] that:

Despite this evidence of practice the Certificate of Determination and the redetermination decision should be set aside.

Acceptance of the Department’s submission would allow the WCC to define its own jurisdiction and insulate the correct determination of a medical dispute from review. A Certificate of Determination issued under s 294 immediately after a decision by a Delegate under s 327(4) would, on the Department’s case, immunise a s 327(4) decision affected by jurisdictional error from review by this Court. That is precisely the vice against which the entrenched supervisory jurisdiction described in Kirk protects. The Department’s submission that “any invalidity of an exercise of power under s 327(4) does not infect an exercise of power under s 294” is not correct. The exercise of power under s 294 followed inexorably and automatically in this case from the making of a decision under s 327(4) which was affected by jurisdictional error. The failure of the WCC to identify the jurisdictional error made in the s 327(4) decision was itself jurisdictional error. The same conclusion applies to the reconsideration decision. The exercise of power in making that decision was affected by jurisdictional error made in making the s 327(4) decision.

Ms Ballas’s rights to an appeal to an Appeal Panel only came to an end by reason of a decision made by the Delegate which was affected by jurisdictional error. The steps which followed as a direct consequence of this erroneous decision under s 327(4) should be set aside and the matter remitted to the WCC to permit a proper consideration of the s 327(4) question.

Grounds 1 and 3 of the Notice of Contention should be dismissed. Orders should be made setting aside the Certificate of Determination and the reconsideration determination.

Ground 4 of the Notice of Contention was limited to discretion. The point was not taken before the primary judge. The hearing of this appeal is not the occasion to permit the Department to completely reformulate its case and raise matters which might have led to a different approach being taken by Ms Ballas before the primary judge. Leave to rely on ground 4 of the Notice of Contention should be refused.

The orders of the Court are:

EMMETT AJA: The question in this application concerns the operation of the appeal process under the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the Management Act). The question arises in the context of a dispute between the appellant, Ms Fiona Ballas, and the first respondent, the New South Wales Department of Education (the Department), in relation to the degree of impairment incurred by Ms Ballas as a result of psychological injury suffered in the course of her employment by the Department.

Ms Ballas lodged an application to resolve the dispute with the Workers Compensation Commission of New South Wales (the Commission). Following that application, the dispute was referred to an approved medical specialist (the AMS) who issued an assessment certificate that the whole person impairment suffered by Ms Ballas as a result of psychological and psychiatric injury was 8%. The consequence was that Ms Ballas was not entitled to the compensation that she claimed.

Ms Ballas applied to the Registrar of the Commission, to appeal against the decision of the AMS. The Delegate of the Registrar (the Delegate) decided that none of the grounds of appeal on which Ms Ballas wished to rely was made out and that the appeal was not to proceed. By summons filed on 14 September 2018, Ms Ballas sought judicial review of the Delegate’s decision pursuant to s 69 of the Supreme Court Act 1970 (NSW). On 8 March 2019, a judge of the Common Law Division dismissed the summons. On 5 April 2019, Ms Ballas gave notice of intention to appeal and filed a notice of appeal on 7 June 2019. She then filed a summons seeking leave to appeal on 7 August 2019. On 29 October 2019, leave to appeal was granted.

Ms Ballas was employed by the Department as a primary school teacher at Yagoona Public School. In the course of that employment, she was exposed to events that resulted in psychiatric injury. On 24 October 2016, she brought a claim against the Department for compensation for permanent impairment pursuant to s 66 of the Workers Compensation Act 1987 (NSW) (the Compensation Act). Liability was not disputed.

Section 65 of the Compensation Act relevantly provides that the degree of permanent impairment that results from an injury is to be assessed as provided for by Pt 7 of Ch 7 of the Management Act. Section 66 of the Compensation Act relevantly provides that a worker who receives an injury that results in a degree of permanent impairment greater than 10% is entitled to receive compensation for that permanent impairment. However, under s 65A(3) of the Compensation Act, no compensation is payable in respect of permanent impairment that results from a primary psychological injury unless the degree of permanent impairment resulting from the primary psychological injury is at least 15%. A primary psychological injury is one that does not arise as a consequence of, or secondary to, a physical injury. Psychological injury includes psychiatric injury.

Section 293 of the Management Act relevantly provides that when a dispute referred for determination by the Commission concerns a medical dispute, the Registrar may refer the medical dispute for medical assessment and defer determination of the dispute by the Commission pending the outcome of that medical assessment. Under s 322, the assessment of the degree of permanent impairment of an injured worker for the purposes of the Compensation Act is to be made in accordance with workers’ compensation guidelines issued for that purpose. Section 326 relevantly provides that an assessment certified in a medical assessment certificate pursuant to a medical assessment under Pt 7 of Ch 7 of the Management Act is conclusively presumed to be correct as to the degree of permanent impairment of the worker as a result of an injury in any proceedings before a Court or the Commission.

Section 327 of the Management Act provides that a party to a medical dispute may appeal against medical assessment under Pt 7, but only in respect of a matter that is appealable under s 327 and only on the grounds for appeal under s 327. The matter is appealable under s 327 if it is a matter as to which the assessment of an approved medical specialist certified in a medical assessment certificate is conclusively presumed to be correct in proceedings before a Court or the Commission. The grounds for appeal under s 327 include the following:

Under s 327(4), an appeal is to be made by application to the Registrar. The appeal is not to proceed unless the Registrar is satisfied that, on the face of the application and any submissions made to the Registrar, at least one of the grounds for appeal specified in s 327 has been made out.

Under s 328, an appeal against a medical assessment is to be heard by an appeal panel constituted by two approved medical specialists and one arbitrator, chosen by the Registrar. The appeal is to be by way of review of the original medical assessment but the review is limited to the grounds of appeal on which the appeal is made.

The application to resolve a dispute lodged with the Commission by Ms Ballas stated that the dispute related to a claim for lump sum compensation where liability was in dispute. The date of injury was stated to be 24 October 2016 or by reason of the nature and conditions of employment from 1999 to that date. The claim for compensation was made on 18 December 2017. The application claimed $34,240 in respect of 15% whole of person impairment in respect of psychological injury. The Department lodged a reply to the application dated 18 April 2018. The reply was supported by medical reports by Associate Professor Robert Kaplan. A delegate of the Registrar referred the dispute to the AMS. The dispute was stated to be as follows:

On 14 May 2018, following an examination of Ms Ballas on 8 May 2018, during which the AMS took detailed history from Ms Ballas relating to the injury, the AMS issued a medical assessment certificate. The certificate stated that the opinion of assessment of whole person impairment by the AMS was as set out in a table in the form provided for in the guidelines. Chapter 11 of the guidelines deals with psychiatric and psychological disorders and lays out the method of assessing psychiatric impairment, the valuation of which is said to require a medical examination. The impairment rating must be based on a psychiatric diagnosis and the psychiatrist is expected to provide a rationale for the rating based on the injured worker’s psychiatric symptoms.

Paragraph 11.11 of Ch 11 provides that behavioural consequences of psychiatric disorder are assessed on six scales, each of which evaluates an area of functional impairment as follows:

On 8 June 2018, Ms Ballas lodged with the Registrar an application to appeal against the decision of the AMS in his certificate of 14 May 2018. The application stated that the grounds relied on for the appeal were:

On 29 June 2018, the Department lodged a notice of opposition to the appeal against the decision of the AMS. Submissions on behalf of the Department were attached to the opposition. The Department said that the appeal could be decided by the appeal panel solely on the basis of the written application and any written notice of opposition lodged.

On 17 July 2018, the Delegate made a decision that the appeal was not to proceed. The decision of the Delegate runs to some 30 paragraphs. Ultimately, the Delegate concluded that on the face of the application and the submissions made, she was not satisfied that a ground of appeal as specified in s 327 was made out.

By her notice of appeal, Ms Ballas complains that the primary judge, in his reasons of 8 March 2019, erred in misconstruing s 327 of the Management Act and erred in holding that the Delegate did not err her in her application of the Management Act to the grounds of appeal sought to be raised. By notice of contention, the Department asserts that the decision of the primary judge should be affirmed on the basis that the decision of the Delegate was not an operative decision that was justiciable under s 69, having been overtaken by the decision made on 22 August 2018 by the Commission. On 22 August 2018, an arbitrator appointed by the Commission, certified that Ms Ballas suffers 8% permanent impairment resulting from psychological injury deemed to have happened on 24 October 2016. The certificate was said to be issued in accordance with the medical assessment certificate issued under Pt 7 of Ch 7 of the Management Act by the AMS and, accordingly, Ms Ballas did not reach the threshold for lump sum compensation as required by s 65A of the Compensation Act.

The approach of the Registrar in effect pre-empted the right of appeal. The function of the Registrar is not to assess the merits of the proposed appeal but simply to determine whether on the face of the documents in question the grounds were within the provisions of s 327. In the present case, they clearly were. It was not for the Registrar to form a view as to the possible merits of the grounds of appeal. The Registrar exceeded the jurisdiction conferred by s 327.

I have had the advantage of reading in draft form the proposed joint reasons of the President and Payne JA. I agree, for the reasons proposed by their Honours, that the appeal should be allowed with costs and that leave to rely on ground 4 of the notice of contention should be refused. I agree with the orders proposed concerning the decision of the primary judge.