Western Health v Gallichio & Ors [2009] VSC 134 (8 April 2009)

WESTERN HEALTH	Plaintiff

and

DR FRANCIS GALLICHIO, DR ALAN GOBLE, DR MARK FARACHER and MARY SALIBA	Defendants

JUDGE:	PAGONE J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 April 2009
DATE OF RULING:	8 April 2009
CASE MAY BE CITED AS:	Western Health v Dr Gallichio & Ors
MEDIUM NEUTRAL CITATION:	[2009] VSC 134

ADMINISTRATIVE LAW – Judicial review – Medical panel – Adequacy of reasons – Remedies available where reasons inadequate – Administrative Law Act 1978 (Vic),

s. 8.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr K P Hanscombe SC and Mr M Fleming	Lander & Rogers

For the First, Second and Thirdnamed Defendants	No appearance

For the Fourthnamed Defendant	Mr M O’Loghlen QC and Mr N B Chamings	Arnold Thomas Becker Pty Ltd

1 The plaintiff, Western Health, challenges a determination of the first to third defendants, the medical panel, dated 3 July 2008 pursuant to the Wrongs Act 1958 that the whole of person impairment of the fourth defendant, Mrs Saliba, satisfied the threshold level under that Act. The dispute between Western Health and Mrs Saliba commenced with a claim made by letter from her solicitors dated 19 February 2008 to the legal officer of Western Health. Mrs Saliba’s claim was that she suffers from neurogenic syncope and other consequences of surgery at the Western General Hospital on 23 May 2006 to insert a permanent pacemaker. Mrs Saliba wishes to initiate a claim for damages against the hospital and the doctor who performed the surgical procedure. In order for her to do so, however, she must satisfy the threshold requirements in the Wrongs Act which restricts recovery of common law damages for non-economic loss in respect of personal injuries. Recovery is only available where the claimant has suffered “significant injury”, which in this case means a greater than 5% whole person impairment.

2 The claim letter enclosed a certificate of assessment pursuant to s 28LN of the Wrongs Act dated 17 November 2007 signed by Dr Michael Jelinek certifying that the claimant had a greater than 5% whole person impairment. On 18 April 2008 the solicitors for Western Health referred a medical question to a medical panel. The question referred was:

On 3 July 2008 the medical panel gave a certificate of determination pursuant to s 28LZG(2)(a) of the Wrongs Act with its answer to the medical question asked. On the same day it gave its reasons (“the reasons”).

3 Western Health contends that the certificate of determination ought to be quashed and the medical question remitted to a differently constituted tribunal for determination. The grounds of complaint are essentially that: (a) the determination by the medical panel was vitiated by jurisdictional error on the grounds that the medical panel had taken into account irrelevant considerations and had asked itself the wrong legal question; and (b) that the reasons it provided were inadequate to discharge its legal obligation to provide reasons.

4 The irrelevant matters said to have been taken into account were particularised as being:

Mrs Saliba’s answer to these complaints are that the first item alleged to have been taken into account was not taken into consideration but, rather, was expressly said by the medical panel to have been disregarded, and that the second matter was properly taken into account by the medical panel as sequelae or consequences of the injury which it was required to take into account.

5 The purpose of the referral of the question to the medical panel was to determine whether Mrs Saliba could commence proceedings to recover damages for non-economic loss in respect of injury caused by the fault of another. Parts VBA of the Wrongs Act imposes a threshold level in relation to the recovery of such damages. Section 28LE provides that a person is not entitled to recover such damages unless the person has suffered a “significant injury”. Section 28LF(1)(a) defines a “significant injury” as an injury where the degree of whole person impairment resulting from the injury is determined to satisfy “the threshold level”. “Threshold level” is defined in s 28LB to mean, relevantly, “impairment of more than 5 per cent”. The assessment of the degree of impairment is to be undertaken in accordance with the AMA guide or the methods prescribed for the purposes of Parts VBA of the Wrongs Act: s 28LH. In this case the medical panel purported to assess the degree of impairment in accordance with the AMA guide. In doing so the medical panel was required by s 28LL(3) to disregard “impairments from unrelated injuries or causes”.

6 Western Health contended that the medical panel took into account an unrelated cause or injury contrary to the prohibition in s 28LL(3). Western Health’s contention was that the reasons show that the medical panel took into account Mrs Saliba’s impairment attributable to her syncope condition which existed prior to the 23 May 2006 incident. Her claim against Western Health was that she suffers neurogenic syncope and other consequences of the surgery which she undertook on 23 May 2006 at the Western General Hospital to insert a permanent pacemaker. It seems that Mrs Saliba has long suffered from neurocardiogenic syncope and indeed, that it was that condition which she had hoped to cure by the insertion of the permanent pacemaker.

7 The reasons of the medical panel record that its members were told that she first suffered fainting turns, with total loss of consciousness, from about the age of seven. The reasons go on to record some history taken from Mrs Saliba and on page 3 of 5 of the reasons, have a “one sentence paragraph” stating:

Counsel for Western Health placed some emphasis upon this statement. It was said, in short, that it gave a clear indication that the panel had not disregarded any impairment attributable to the syncope that existed prior to the insertion of the pacemaker on 23 May 2006, notwithstanding that the medical panel later in its reasons expressly said that it had disregarded such impairment.

8 In my view the reasons of the medical panel do not establish that it took into account any impairment attributable to the claimant’s syncope condition existing prior to the 23 May 2006 incident. The “one sentence paragraph” quoted above does not, in my view, indicate that the medical panel was taking into account the pre 23 May 2006 condition in determining the impairment referrable to the 23 May 2006 incident. The sentence appears immediately after an account of the procedure and its relevant medical history. It is clear that the reason for the procedure was to improve her syncopal episodes, which the sentence should fairly be read as indicating that the procedure failed to improve. A reading of the whole of the reasons also reveals that the medical panel understood that its task was to assess the impairment of Mrs Saliba’s neurocardiogenic syncope resulting from the injury occasioned by the procedure on 23 May 2006 and, importantly, that it consciously and deliberately stated that they had disregarded any impairment attributable to the syncope that existed prior to the insertion of the pacemaker. In that way it was clearly identifying that it was aware of a pre-existing condition and was expressly and consciously excluding that from its assessment. It may be that the panel have failed to explain how that was done but I accept that it did do so.

9 The second irrelevant consideration said to have been taken into account by the medical panel was particularised as the “impairment attributable to another injury not referred to the medical panel, namely, “post surgical scarring””. The question referred to the medical panel under s 28LB was in the referral letter dated 18 April 2008 from Western Health’s lawyers to the deputy convenor of medical panels. The letter refers to Mrs Saliba’s claim that “she sustained injury following treatment at Western Health in May 2006”. Western Health’s contention was that the panel was required to assess the degree of impairment resulting from that injury, namely that as referred by Western Health and which the medical panel identified as “neurocardiogenic syncope”, and not any other injury. Western Health contended that the panel erred by assessing the degree of impairment resulting from “post surgical scarring” in its assessment of the degree of impairment in addition to the “neurocardiogenic syncope”. The response for Mrs Saliba was that the medical panel’s consideration of “post surgical scarring” was not a consideration of an impermissible separate injury but, rather, the sequelae or consequences of the very injury which had to be considered by the medical panel.

10 The statutory obligation upon the medical panel was to answer the question referred to it by Western Health. The question, as stated above, required a determination of the degree of impairment of Mrs Saliba from the injury on 23 May 2006. That determination required, by s 28LZG(1), an assessment of the degree of impairment in accordance with Division 3 of the Wrongs Act. Having made the assessment the medical panel was required by s 28LZG(4) to state whether the degree of impairment resulting from the injury satisfied the threshold level, but was by statute prevented from stating the specific degree of impairment.

11 The case for Western Health on this point depends upon a narrow identification of the injury referred to the medical panel. The letter of referral from Western Health’s solicitors dated 18 April 2008 described the injury in a way that might surprise a reader untutored to disputes in this field. The fact was that a procedure took place on 23 May 2006 which Mrs Saliba contended to have caused her certain conditions. On 19 February 2008 her lawyers had written to the legal officer at Western Health describing their client’s injury as “a 4cm large wound, which required packing and has taken months to heal”. The letter continued to describe her as having scar tissue causing permanent pain, physical and psychological distress as a result of an infection, and continued suffering from neurogenic syncope. That letter, however, was not before the medical panel. What was before the medical panel was the letter from Western Health’s lawyers who, in purporting to describe Mrs Saliba’s actual claim, identified the “details of the injury” as her continuing “to suffer from neurocardiogenic syncope”. That letter began by referring to Mrs Saliba’s claim more broadly than described under the heading “details of the injury”, namely, as being that she had “sustained injury following treatment at Western Health in May 2006”. Nonetheless, the medical panel did not have the letter written on behalf of Mrs Saliba to Western Health, but did have the letter from the solicitors for Western Health.

12 A narrow reading of the letter from Western Health to the medical panel would, as a matter of literal interpretation, suggest that the particular question referred to the medical panel was whether the injury described solely as the “neurocardiogenic syncope” satisfied the threshold level. That reading is not one which should be adopted. The medical panel was asked in the referral letter whether an impairment resulting from an injury satisfied the threshold level as required by statute. The question itself, therefore, drew a distinction between an impairment and something causing an impairment. The letter from the lawyers for Western Health may have inserted the words “the claimant continues to suffer from neurocardiogenic syncope” as the only words under the heading “details of the injury”, but it seems to me that what the author intended by doing so was to indicate that the neurocardiogenic syncope was the relevant impairment and that the injury (otherwise undescribed in any detail in the letter of referral) was the incident previously described as the “insertion of a permanent pacemaker at Western Health on 23 May 2006 to treat neurocardiogenic syncope” which the letter went on to state had subsequently become infected and removed on 22 August 2006. The medical panel also had available two letters from Dr Michael Jelinek, one dated 25 October 2007 and the other dated 20 November 2007. Each speaks in terms of the neurocardiogenic syncope as the consequence of the procedure to insert a pacemaker which had been unsuccessful.

13 A medical panel charged with the task of making an assessment under the Wrongs Act is required to consider both the injury and its sequelae or consequences: Archibold Russell Limited v Corser;[1] Kidman v Sefa;[2] Farrar v Western Metropolitan College of Tafe[3] and Dunin v Harrison.[4] The medical panel’s consideration of the “post surgical scarring” is, in my view, to be seen as a consideration by it of the consequences of the incident which was said to have given rise to the neurocardiogenic syncope as the impairment. The referral letter may have been carelessly inaccurate in its description of the injury but, I think, a fair reading of the referral letter on its own or in the context of all of the materials available to the medical panel makes clear that the “neurocardiogenic syncope” was relevantly the impairment said to have resulted from the injury occasioned by the insertion of the permanent pacemaker on 23 May 2006. Seen in that light the medical panel’s consideration of the “post surgical scarring” is sequelae or the consequence of the injury.

14 The next challenge by Western Health to the determination by the medical panel is that its reasons were inadequate. The obligation of the medical panel to give reasons, and how that obligation is to be satisfied, has been set out elsewhere and need not fully be repeated.[5] The obligation of the medical panel to provide reasons arises when constituted under Part VBA of the Wrongs Act.[6] In that regard I respectfully agree with Kaye J in Amendola v Coles Supermarkets Australia Pty Ltd[7] that the reasoning of the Court of Appeal in Masters v McCubbery, concerning the duty of the medical panel to provide reasons, is applicable to a medical panel constituted under Part VBA of the Wrongs Act as much as when constituted under the Accident Compensation Act 1958.

15 In my opinion the medical panel has failed to provide reasons or reasons legally sufficient to satisfy its obligation to provide reasons. The conclusions of the medical panel are stated in the document headed “reasons for determination” to which I have referred above, but it does not contain an explanation sufficient to enable a reader to understand how the conclusions were reached. Most of the document sets out a history of Mrs Saliba’s condition and the investigations undertaken in that regard. The conclusions about the degree of impairment by application of the AMA guide is, however, not revealed. One can accept the submission put on behalf of Mrs Saliba that the task of the medical panel in providing reasons was circumscribed by s 28LZG(4) by which the medical panel was positively prevented from stating the degree of impairment and, therefore, that some reasons that might otherwise be relevant to the reasoning process might not be permitted to be stated in its reasons. However, the document purporting to set out the reasons, should enable persons affected, appellate courts, and other readers to see how the conclusion has been reached at least to the extent that it is permissible for those reasons to be stated. Perhaps the difficulty is to be explained by the fact that the document is prepared by medical experts who come to understand conclusions and connections within their field of expertise without the need for further elaboration. The obligation to provide reasons, however, is not satisfied merely because some readers might be able to determine the reasons imbedded in a document which may be capable of being understood by experts. The reasons must be capable of being understood objectively by a sufficiently wide class of people that would include, in this instance, a person such as Mrs Saliba and those charged with the management of Western Health. Such people could not, in my view, see how or why critical conclusions were reached.

16 At times it is difficult to understand how some conclusions could have been reached by the panel in light of other conclusions it expressed; that is to say, at times some of the statements in the reasons appear to be inconsistent. In that context I have in mind the complaint by Western Health that the medical panel had said that it had “disregarded any impairment attributable to the syncope that would have existed prior to the insertion of the pacemaker”, but that in an earlier part of the reasons the panel had expressed itself in language that Western Health contended had said the opposite. A reading of the document does not explain, either expressly or by inference, how pre-existing syncope had been disregarded. This omission in explanation is significant because the impairment being inquired into was similar to a condition pre-existing the event and which, indeed, had been the reason for the procedure which she claims to have caused the impairment now complained of by Mrs Saliba. How the medical panel disregarded the pre-existing syncope is not explained but would be informative to a reader if it were. Similar criticisms can be made concerning the more general conclusion that the impairment (that is, the neurocardiogenic syncope) was more than 5% for the relevant statutory purposes. That is not to say that it should disregard its duty not to state the degree of impairment determined, but that it should give such reasons as would disclose the explanation for its conclusion. In some cases it may be that a medical panel could not provide reasons without breaching the prohibition and, when that is the case, it may be sufficient for the medical panel to explain that it is prevented from giving detailed reasons because of the prohibition. Here the difficulty is that one simply does not know how the conclusion was reached, whether the reasons were withheld because of the prohibition in s 28LZG(4), or the extent to which the post surgical scarring was relevantly seen as sequelae or consequences. In my opinion the medical panel has failed in its legal obligation to provide reasons in this case.

17 The next question for me to consider is what consequences follow from my conclusion that the medical panel failed in its legal obligation to provide reasons or adequate reasons. There have been many cases in this Court commenced, like this proceeding, under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 which have quashed decisions of medical panels on the grounds of the inadequacy of reasons.[8] However, in a recent decision Kyrou J has expressed doubt about those decisions and felt unable to follow them.[9] Not surprisingly Western Health submitted that I should follow the previous decisions which had quashed opinions of medical panels on the grounds of the inadequacy of reasons, whilst Mrs Saliba contended that I should embrace the more recent decision of, and the reasons set out in the judgment in, Sherlock v Lloyd & Ors.[10]

18 The reason his Honour in Sherlock felt unable to follow the earlier decisions which had quashed decisions of medical panels on the grounds of inadequacy of reasons was explained as follows:

In this passage his Honour identifies two potential bases for the decisions he felt unable to follow. The first is that they might have been based upon the proposition that a failure to give reasons by a statutory decision maker had been considered a denial of natural justice. I agree with his Honour that such a proposition would have been contrary to authority had it been the basis upon which the other cases depended.[11] The second reason identified by his Honour, and described by him as a “questionable proposition”, was that inadequate reasons given by a tribunal (as distinct from a Court) which had a legal obligation to provide reasons constituted an error of law. His Honour felt unable to follow the earlier decisions upon that basis because his Honour considered that the earlier decisions had wrongly ignored the carefully structured remedies in

s 8(4)

of the Administrative Law Act 1978 . With respect to his Honour, I am unable to agree with his conclusion or the criticism of the earlier decisions and, in deference to his Honour, I should explain why.

19 Masters v McCubbery[12] held that the medical panel was obliged to give reasons for decisions because of

s 8

of the

Administrative Law Act

. That case concerned an opinion of the medical panel given under the Accident Compensation Act 1985 which, as Kaye J held in Amendola v Coles Supermarkets Australia Pty Ltd[13] (and with which I entirely agree), applied with equal force to an opinion of the medical panel under Part VBA of the Wrongs Act. The position of the medical panel is, therefore, that by operation of

s 8(1)

of the Administrative Law Act, as authoratively construed in Masters v McCubbery,[14] it is required by law to provide legally effective reasons. A failure to give reasons for decisions may constitute an error of law as was held in Dornan v Riordan[15] which, notwithstanding that it is a decision of the Full Federal Court rather than of the Court of Appeal of this Court, ought to be followed by this Court insofar as it enunciates a principle of the common law of Australia.[16]

20 In any event, and apart from the decision in Dornan v Riordan and others to that effect, I am not able to agree, that the decisions of this Court which have quashed opinions of medical panels on the ground of inadequacy of reasons have ignored the wording of the statutory provision that imposes the legal obligation on the medical panel to provide reasons. I agree with Kyrou J that there is “no basis in principle for ignoring the carefully structured remedies in

s 8(4)

” of the

Administrative Law Act

in cases where it is alleged that reasons given by a medical panel are inadequate, but I do not agree that a consideration of the carefully structured remedies in

s 8(4)

leads to the conclusion that inadequate reasons provided by the medical panel cannot be quashed. In part that is because of the general nature of the

Administrative Law Act

and of

s 8

in particular.

21 It is of course, as his Honour suggests in Sherlock, always a necessary requirement that the consequence of a statutory obligation depends upon its construction in the context of the statute in which it is found. Many statutes are necessarily specific, with obligations imposed within, and confined to, the specific context in which they are created. The

Administrative Law Act

, however, was intended to have wide application across a large field of tribunals and decisions where the common law had previously not supplied a legal entitlement for reasons to be given. A necessary consequence of a general enactment such as the

Administrative Law Act

is to have imposed an obligation to provide reasons upon tribunals (such as the medical panel) constituted and operating under enactments otherwise regulating their obligations. The effect of

s 8(1)

of the Administrative Law Act is, therefore, to operate in and upon the statutes and general law otherwise governing bodies like the medical panel. A necessary consequence of

s 8(1)

of the

Administrative Law Act

is, therefore, to alter the position of the medical panel under the Wrongs Act or, perhaps more precisely in this case, under the common law as it would otherwise have applied to the medical panel when discharging its functions under the Wrongs Act.

Section 8(4)

of the

Administrative Law Act

provides a particular remedy where a party satisfies this Court that a reasonable time has elapsed after a request for reasons without reasons having been furnished or with inadequate reasons having been furnished. The specific power given in

s 8(4)

to compel the furnishing of additional reasons, and the specific orders which a Court may make upon such a failure, does not carry with it the necessary consequence that, the obligation in

s 8(1)

having arisen, the only remedy of a party is that found in

s 8(4).

The remedy provided in

s 8(4)

is not, in my view the only remedy. The section does not say that it is, and the general purpose of the obligation created by

s 8(1)

suggests to me that it was not intended to be. In my view that the

Administrative Law Act

was intended to supplement and extend the rights at common law and not to provide an exclusive code.[17] In State Electricity Commission v Commissioner for Equal Opportunity,[18] Gobbo J said:

I do not accept that

is in effect a separate and watertight provision. It is, in my view, primarily directed to providing a mechanism to cover the provision of reasons. Subs(4) plainly provides that it is not to operate alone. Where the procedure in the Act for requesting reasons has been followed and no statement of reasons is provided, there is no reason why such failure should be irrelevant for purposes of a review under the same Act. It is true that no further direction was given by the court in the proceedings commenced by the SEC against the commissioner for that purpose but that was because the commissioner agreed that no reasons had been given. The commissioner went further and said in effect that no reasons would or could be given.

It would be productive of inconvenience and procedural circuity if it was necessary to have separate proceedings in circumstances where it was clear that no reasons had been or would be supplied. I am accordingly of the view that the applicant is entitled in the particular circumstances of this case to rely upon the refusal to provide reasons as part of its application under s3 and that such refusal amounts to an error of law on the face of the record.[19]

I respectfully agree with these observations and would apply them to the same conclusion on the facts before me. I am unable to see any reason in policy, language, precedent or sound administration to treat the specific remedy in s 8(4) as the only remedy enlivened by a failure to comply with s 8(1). Indeed, the facts in this case fortify me in that view. In this case the medical panel purported to give its reasons on 3 July 2008. This proceeding was commenced under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 on 29 August 2008. On 23 February 2009 the solicitors for Western Health requested the medical panel to provide further and better reasons for its decision specifically pursuant to s 8(4).[20] On 18 March 2009 the solicitors for the medical panel replied stating, amongst other matters, that the panel had “already provided its reasons dated 3 July 2008” which were exhibited to an affidavit in these proceedings. In such circumstances I can see no practical utility in a requirement to require the parties to pursue the same outcome through a different process.

23 The provisions of the

Administrative Law Act

were designed to reform and improve the procedure for judicial review in circumstances where the common law was thought to have been defective. The terms and effect of the

Administrative Law Act

should be construed consistently with that purpose without the introduction of unnecessary constraints and procedural obstacles unless they be necessary to secure a policy objective revealed by its provisions. It has been said that the purpose of the

Administrative Law Act

was “to eliminate the complexities which attended applications to the Supreme Court for the grant of prerogative writs and similar remedies directed to tribunals and other bodies charged with the performance of public acts and duties”.[21] I am unable to see any policy advanced by limiting the consequences of s 8(1) narrowly to the terms and structure of

s 8(4).

I can well see how the terms and structure of

s 8(4)

may usefully provide a convenient and straightforward mechanism where, all things being equal, a party seeks further reasons which have been requested and either not supplied or where what has been supplied as reasons is inadequate. What I am unable to see is why the consequence of a failure to supply reasons at all, or reasons which are adequate in law, should not be capable of challenge under a proceeding commenced under Order 56. In the case before me, commenced under Order 56, I find that the medical panel has failed to comply with its obligation under

s 8(1)

of the

Administrative Law Act

24 The next matter for me to consider is whether I should remit the matter to a differently constituted panel. In that regard I refer to and repeat the observations I made in Davidson v Fish.[22] I remain of that view and no particular facts or matters have been referred to me in these proceedings to require a different outcome.

25 Accordingly I will order that the decision of the medical panel made on 3 July 2008 be set aside and the question it answered be referred back to the Convenor of Medical Panels for re-determination.

[11] Public Service Board of New South Wales v Osmond (1986) 159 CLR 656, 662-3 (Gibbs CJ), 671 (Wilson J), 675 (Brennan J), 676-7 (Deane J), 678 (Dawson J).

[16] Farah Constructions v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89, 151-2 (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).

[20] The letter erroneously refers to the Administrative Law Act as the Administrative Board Act but the responding letter makes clear that the Board correctly understood that the enactment being relied upon was

s 8(1)

of the Administrative Law Act .

[21] Butterworths, Williams Civil Procedure Victoria, vol 3, (at 20,513), [10,231.0].

Supreme Court of Victoria

Western Health v Gallichio & Ors [2009] VSC 134 (8 April 2009)