DETERMINATION OF APPEAL PANEL	
	
CITATION:	Labour Master Pty Ltd v Giovenale [2023] NSWPICMP 685	
		
APPELLANT:	Labour Master Pty Ltd	
		
RESPONDENT:	Claudio Giovenale	
		
Appeal Panel		
		
MEMBER:	Catherine McDonald	
		
MEDICAL ASSESSOR:	James Bodel	
		
MEDICAL ASSESSOR:	John Brian Stephenson 	
		
DATE OF DECISION:	19 December 2023	
		
CATCHWORDS: 	wORKERS cOMPENSATION - Workplace Injury Management and Workers Compensation Act 1998; bricklayer suffered a serious shoulder injury when he fell from scaffolding and was trapped in a pile of bricks; Medical Assessor (MA) assessed impairment of the axillary nerve as part of upper extremity impairment; injury likely to have impacted on axillary nerve and open to MA to assess impairment when found; section 323 deduction for significant, pre-existing rotator cuff tears; worker had undertaken heavy work until the injury; no alternative conclusion in employer’s evidence; Vitaz v Westform (NSW) Pty Ltd applied; Held – Medical Assessment Certificate confirmed.

BACKGROUND TO THE APPLICATION TO APPEAL
1.	On 5 September 2023 Labour Master Pty Ltd lodged an Application to Appeal Against the Decision of a Medical Assessor. The medical dispute was assessed by Dr Drew Dixon, a Medical Assessor, who issued a Medical Assessment Certificate (MAC) on 8 August 2023.
2.	Labour Master relies on the following grounds of appeal under s 327(3) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act): 
•	the assessment was made on the basis of incorrect criteria, and
•	the MAC contains a demonstrable error.
3.	The delegate was satisfied that, on the face of the application, at least one ground of appeal was made out. We conducted a review of the original medical assessment, limited to the grounds of appeal on which the appeal is made.
4.	Rule 128 of the Personal Injury Commission Rules 2021 (the PIC Rules) and Procedural Direction PIC7 – Appeals, reviews, reconsiderations and correction of obvious errors in medical disputes set out the practice and procedure in relation to the medical appeal process under s 328 of the 1998 Act. An Appeal Panel determines its own procedures in accordance with r 128(1) of the PIC Rules.
5.	The assessment of permanent impairment is conducted in accordance with the SIRA NSW Workers Compensation Guidelines for the Evaluation of Permanent Impairment, 4th ed 1 March 2021 (the Guidelines) and the American Medical Association Guides to the Evaluation of Permanent Impairment, 5th ed (AMA 5).
RELEVANT FACTUAL BACKGROUND
6.	Mr Giovenale was injured on 24 April 2021 while working as a bricklayer for Labour Master when he fell from scaffolding which collapsed under the weight of bricks, causing him to be trapped by the bricks. He suffered a fracture dislocation of his right shoulder and suffered a consequential condition in his left shoulder.
7.	The Medical Assessor assessed 18% upper extremity impairment (UEI) as a result of the right shoulder injury, which converts to 11% whole person impairment (WPI). The Medical Assessor deducted one-tenth of the assessment under s 323 of the 1998 Act. The Medical Assessor assessed 12% upper extremity impairment in respect of Mr Giovenale’s left shoulder which equates to 7% WPI. He deducted one-tenth under s 323. The resulting assessments of 10% for the right shoulder and 6% for the left shoulder were combined to reach 15% WPI.
SUBMISSIONS 
8.	Both parties made written submissions. They are not repeated in full, but we have considered them. 
9.	In summary, Labour Master submitted that the Medical Assessor applied incorrect criteria in assessing 1% UEI as a result of an injury to the axillary nerve, failing to take into account “pre-existing and confounding conditions.” Conceding that the diagnosis of a peripheral nerve injury was within the scope of the medical dispute, Labour Master submitted that the Medical Assessor failed to explain his path of reasoning in determining that Mr Giovenale suffered an axillary nerve injury which was causally connected to the incident on 24 April 2021. It submitted that paragraph 1.6c of the Guidelines required the Medical Assessor to record the nature of any previously unidentified injury/condition and to specify the causal connection to the relevant compensable injury. It noted that the requirements of section 16.5 of AMA 5 with respect to diagnosis of peripheral nerve injuries and the possible relevance of diabetes, which the Medical Assessor noted that Mr Giovenale suffers.
10.	Labour Master also noted the reference to “chronic microangiopathic change” and an adrenal lesion on a CT trauma pan scan taken on 24 April 2021 and said that the Medical Assessor should also have referred to those conditions “due to their role as underlying causes of neuromuscular dysfunction.”
11.	Labour Master submitted that the Medical Assessor made a demonstrable in that he failed to explain how a deduction of one-tenth from the assessed loss of each shoulder was not at odds with the available evidence. It referred to the reports from Mr Giovenale’s treating doctors who diagnosed longstanding rotator cuff tears and said that a deduction of one-tenth was glaringly improbable. Labour Master said that Mr Giovenale had significant underlying pathology that impacted on his shoulder mobility, for which he was recommended surgical repair at multiple stages by his treating specialists.
12.	Noting that the mechanism of injury and pathological changes in each of Mr Giovenale’s shoulders were different, Labour Master said that Dr Giblin, qualified for Mr Giovenale, and A/Prof Miniter, qualified on its behalf, addressed each of the shoulders differently. It said that the Medical Assessor did not engage with those differences.
13.	In reply and in submissions prepared by Mr Epstein of counsel, Mr Giovenale submitted that it was common for the kind of shoulder injury he suffered to result in axillary nerve damage so that it was not an unusual situation as described in paragraph 1.6c of the Guidelines. While he did suffer from diabetes, there was no suggestion that nerve damage predated the right shoulder injury. He said that the Medical Assessor gave sufficient reasons for making the assessment.
14.	With respect to the s 323 deduction, Mr Giovenale submitted that the evidence is clear that he had no pain or stiffness in his shoulders before the injury. Referring to Cole v Wenaline Pty Ltd, he said that it was not possible to determine the extent of the impairment that is due to the pre-existing condition and that the Medical Assessor had explained his reasons for making a one-tenth deduction.
PRELIMINARY REVIEW
15.	We conducted a preliminary review of the original medical assessment in the absence of the parties and in accordance with the Procedural Direction PIC7.
16.	As a result of that preliminary review, we determined that it was not necessary for Mr Giovenale to undergo a further medical examination because the assessment made by the Medical Assessor was open to him in the exercise of his clinical judgement.
EVIDENCE
17.	We have all the documents that were sent to the Medical Assessor for the original medical assessment and have taken them into account in making this determination.
18.	The parts of the MAC that are relevant to the appeal are set out in the body of this decision. 
FINDINGS AND REASONS 
19.	The procedures on appeal are contained in s 328 of the 1998 Act. The appeal is 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. 
20.	In Campbelltown City Council v Vegan the Court of Appeal held that an Appeal Panel is obliged to give reasons. Where there are disputes of fact it may be necessary to refer to evidence or other material on which findings are based, but the extent to which this is necessary will vary from case to case. Where more than one conclusion is open, it will be necessary to explain why one conclusion is preferred. On the other hand, the reasons need not be extensive or provide a detailed explanation of the criteria applied by the medical professionals in reaching a professional judgement.
The MAC
21.	The Medical Assessor took a history of the injury and the treatment provided to Mr Giovenale. He described his current symptoms. He noted that Mr Giovenale has diabetes and raised blood pressure for which he takes medication and that he has been a brick layer for all of his adult life.
22.	The Medical Assessor set out his findings on examination:
“There was stiffness on elevation of his right shoulder with active abduction 70 degrees, forward flexion 80 degrees, extension 30 degrees, adduction 30 degrees, external rotation 60 degrees and internal rotation 40 degrees. Shoulder girdle power on the right was grade four out of five. There was grade four out of five sensory change in the axillary nerve area of his right shoulder.
He had tenderness in the biceps groove and at the supraspinatus insertion of his shoulder as well as the deltoid muscle as far as its insertion and the lower trapezial muscle. There was impingement on abduction.
In the left shoulder, there was restricted motion with forward flexion decreased to 100 degrees, active abduction 90 degrees, extension 40 degrees, adduction 40 degrees, external rotation 80 degrees, and internal rotation 60 degrees. There was tenderness of the antero-lateral deltoid and at the anterior biceps groove. Shoulder girdle power on the left was grade four out of five.
There was no other neurological deficit of either upper extremities. There was no winging of either scapula on resisted protraction. His reflexes were brisk. There was 1cm of wasting of his left upper arm, there was no wasting of his forearms. Thenar power, intrinsic power and grip strength was grade five out of five bilaterally.”
23.	The Medical Assessor summarised the injuries and his diagnosis:
“This claimant sustained fracture dislocation of his right shoulder and has post traumatic stiffness, together with mild sensory change, grade four out of five in the region of the axillary nerve and shoulder girdle weakness.
On the left he has consequential pain and stiffness of the left shoulder with weakness of the shoulder girdle.”
24.	The Medical Assessor set out his calculations	 which are not the subject of appeal. When commenting on the other medical opinions relied on, he said:
“These findings are consistent with those found by Dr Matthew Giblin, in his IME report dated June 20, 2022.
It is noted that Professor Paul Miniter in his IME report of May 22, 2023 felt there was significant pre-existing change in the left shoulder and deducted that from the right shoulder, to give 0% whole person impairment. I am at variance with this opinion as the claimant had been able to work as a brick layer satisfactorily all his working life and there was no history of prior shoulder condition on either side and there was no history of direct injury to the left shoulder but it was a consequential injury due to favouring his right shoulder. He notes that the claimant is not fit to return to work as a brick layer with which I concur.”
Assessment of peripheral nerve disorders
25.	Labour Master submitted that the Medical Assessor applied incorrect criteria in making an assessment in respect of impairment of Mr Giovenale’s axillary nerve. It referred to the first paragraph of section 16.5 of AMA 5 which provides:
“Accurate diagnosis of peripheral nerve disorders is based on a detailed history, a thorough physical examination with special emphasis on the nervous and vascular systems, and appropriate diagnostic tests, including a variety of electrical and imaging studies. Excellent knowledge of the morphologic anatomy and physiology of the nervous system is a prerequisite. Underlying causes of neuromuscular dysfunction that may mimic specific regional defects must be detected and may include diabetes mellitus, chronic alcohol abuse, systemic neurologic disorders, hypothyroidism, and other systemic diseases. A failure to recognize a preexisting alteration of sensory or motor nerve function can lead to erroneous conclusions after nerve injury.”
26.	In that introductory paragraph, the authors of AMA 5 deal with peripheral nerve disorders at a high level of generality, cautioning that an assessor should consider other conditions which might be relevant to the particular assessment being undertaken. It does not follow from that warning that a condition such as diabetes will be relevant to the assessment of every peripheral nerve disorder. It may be relevant to consider diabetic neuropathy in the case of an injury to the legs, feet or even the hands but it is not a relevant consideration for impairment of the axillary nerve. It also does not follow that the Medical Assessor was required to consider and exclude every underlying medical condition when the injury suffered was one which was likely to impact the axillary nerve.
27.	The Guidelines provide in paragraph 1.6 (c):
“In calculating the final level of impairment, the assessor needs to clarify the degree of impairment that results from the compensable injury/condition. Any deductions for pre-existing injuries/conditions are to be clearly identified in the report and calculated. If, in an unusual situation, a related injury/condition has not previously been identified, an assessor should record the nature of any previously unidentified injury/condition in their report and specify the causal connection to the relevant compensable injury or medical condition.”
28.	The assessment of axillary nerve impairment made by the Medical Assessor does not fall within paragraph 1.6(c); it is a known possible consequence of the injury Mr Giovenale suffered, not a condition which was not previously unidentified.
The injury and medical evidence
29.	An axillary nerve injury is a common consequence of anterior dislocation of the shoulder. The axillary nerve wraps around the neck of the humerus and a fracture dislocation as a result of falling and being trapped in a pile of bricks would be likely to stretch that nerve.
30.	The CT trauma pan scan undertaken at Westmead Hospital on the day of the injury relevantly showed “anterior dislocation of the right humeral head with combined bony Hill Sachs and Bankart defects. A small fragment of the anterior glenoid bone lies antero-inferior in the shoulder joint.”
31.	The injury was a serious fracture dislocation, pushing Mr Giovenale’s shoulder significantly out of alignment. It was reduced in the Emergency Department of Westmead Hospital without surgery.
32.	Mr Giovenale was referred to Dr Baba who reported on 24 May 2021. He said:
“He has had an X-ray performed, which shows a reasonable size glenoid fracture fragment. His shoulder looks reduced however, I cannot confidently assess the size of  this glenoid fragment to see whether it is significant. Also In his age group, there a risk of rotator cuff tear with these injuries. so I have advised him to get a CT scan to assess the size of the bony fragment and to have an MRI to assess for any rotator cuff tears. If he does indeed have a large bony fragment or significant rotator cuff tear then I would recommend operative intervention.
Clinically. currently, he has a stiff shoulder as expected. He is only elevating to about 20°, externally rotating to about 10°. His axillary nerve is intact ...”
33.	Dr Baba’s reference to the axillary nerve highlights the relationship between the injury suffered and possible damage to the axillary nerve.
34.	Dr Baba saw Mr Giovenale again after the scans were undertaken. He said:
“He has a difficult situation. His MRI shows longstanding rotator cuff tears with full thickness tears involving the supraspinatus and upper subscapularis as well as the infraspinatus. These are longstanding with evidence of muscle atrophy and tendon attenuation. He also has a large displaced bony Bankart fragment as a result of this most recent traumatic incident comprising approximately 20% of the joint.”
35.	Dr Baba told Mr Giovenale that there were surgical and conservative options for treatment. The surgical option proposed was to restore the articular surface of the glenoid, damaged as a result of the fracture dislocation. It was not, as Labour Master submitted, to repair the longstanding degenerative changes.
36.	Mr Giovenale sought a second opinion from Dr Sher on 12 July 2021 who recommended surgery. Dr Sher also noted full thickness tearing of the supra and infraspinatus, some of which was of longstanding. The surgery he proposed was open reduction and internal fixation of the glenoid with a rotator cuff repair at the same time. 
37.	Dr Sher reported again on 6 May 2022, noting deterioration in Mr Giovenale’s left shoulder due to overuse. An MRI scan reported on 28 April 2022 showed a significant left rotator cuff tear which Dr Sher considered was an acute on chronic injury. There was no proposal for surgery to Mr Giovenale’s left shoulder. Dr Sher said that the scan of the right shoulder joint showed “his Hill-Sach’s lesion and bony Bankart with a malunuion as well as a rotator cuff tear and wasting.”
38.	Dr Giblin prepared a report dated 20 June 2022 at the request of Mr Giovenale’s solicitors. Dr Giblin considered that Mr Giovenale’s injuries were consistent with the accident described and that he sustained a fracture/dislocation of his right shoulder and due to overuse of his left arm to protect his right, he developed aggravation of a pre-existing rotator cuff injury. Dr Giblin assessed 16% right UEI, using the range of motion and equating to 10% WPI. He did not consider there was any significant pre-existing condition. He did not assess left UEI on the basis that Mr Giovenale had not reached maximum medical improvement.
39.	Dr Giblin reported again on 7 February 2023, making the same assessment in respect of Mr Giovenale’s right shoulder and assessing 15% UEI or 8% WPI in respect of his left, the latter after a deduction of one-tenth under s 323.
40.	A/Prof Miniter examined Mr Giovenale at the request of Labour Master and reported on 22 May 2023. A/Prof Miniter agreed that Mr Giovenale had a serious injury being a Hill Sachs fracture of the humeral head and a large anteroinferior fracture of the glenoid consistent with anterior shoulder dislocation. He noted that subsequent MRI scans demonstrated massive rotator cuff tears which are retracted and clearly long-standing and, on the right, an unhealed fracture of the glenoid labrum and a Hill Sachs fracture.
41.	A/Prof Miniter did not consider that Mr Giovenale suffered a consequential condition in his left shoulder and he noted that Mr Giovenale’s diabetes was poorly controlled. He did not assess permanent impairment because he believed Mr Giovenale had a symmetrical range of motion. A/Prof Miniter observed that Mr Giovenale had worked “in heavy labour for many years.” He also conceded that Mr Giovenale continued to function normally until the injury, despite the pre-existing rotator cuff tears.
42.	Despite A/Prof Miniter’s opinion, Labour Master agreed that Mr Giovenale suffered a consequential condition in his left shoulder.
Assessment of impairment
43.	The assessment made by the Medical Assessor was an appropriate exercise of his clinical judgement. There is no submission that the range of motion assessments he made were not accurate. 
44.	The assessment of impairment to the axillary nerve was open to the Medical Assessor, when he observed grade four out of five sensory change in the appropriate area of Mr Giovenale’s right shoulder. The fact that the assessment was not made by any other medical practitioner was immaterial. The Medical Assessor was required to make an assessment of Mr Giovenale as he presented on the day of the examination.
45.	As we observed above, the axillary nerve may well be impacted by an injury of the kind Mr Giovenale suffered. It was therefore not necessary for the Medical Assessor to provide a more detailed path of reasoning before making an assessment under Table 16-5 of AMA 5. We note that Labour Master did not take issue with the Medical Assessor’s calculations.
Section 323
46.	Section 323 relevantly provides:
“323   Deduction for previous injury or pre-existing condition or abnormality
(1)	In assessing the degree of permanent impairment resulting from an injury, there is to be a deduction for any proportion of the impairment that is due to any previous injury (whether or not it is an injury for which compensation has been paid or is payable under Division 4 of Part 3 of the 1987 Act) or that is due to any pre-existing condition or abnormality.
(2)	If the extent of a deduction under this section (or a part of it) will be difficult or costly to determine (because, for example, of the absence of medical evidence), it is to be assumed (for the purpose of avoiding disputation) that the deduction (or the relevant part of it) is 10% of the impairment, unless this assumption is at odds with the available evidence.”
47.	The Medical Assessor made deductions of one tenth from the assessment of each of Mr Giovenale’s shoulders to reflect “prior asymptomatic supraspinatus injury and AC arthrosis.” The Medical Assessor’s explanation for his disagreement with A/Prof Miniter is also his explanation for making the one-tenth deduction – that Mr Giovenale was able to work satisfactorily as a bricklayer until the injury and there was no history of a prior shoulder condition on either side. While that opinion is concise, we consider that the Medical Assessor’s statements indicate that he considered that the extent of the deduction would be difficult or costly to determine.
48.	A Medical Assessor is an administrative decision maker. In Bojko v ICM Property Service Pty Ltd  Handley AJA (with whom the other members of the Court agreed) said that the worker had failed to establish his grounds of appeal because:
“Both involved a hyper-critical approach to the reasons of the Panel which is contrary to authority and ignores the presumption of regularity which attends administrative action. The correct approach is that mandated by the joint judgment in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6, 185 CLR 259, 272 which approved the following statement of principle in a decision of the full Federal Court:
‘… a court should not be concerned with looseness in the language nor with unhappy phrasing of the reasons of an administrative decision-maker. … the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error.’"
49.	Mr Giovenale clearly had longstanding degenerative tears in the rotator cuff of each shoulder. Those changes warrant consideration of a deduction under s 323. In the right shoulder, it is likely that there was some aggravation at the time of the injury, as a result of the force which caused the fracture dislocation. In the left, Labour Master accepted that the aggravation of those changes caused a consequential condition and consented to the referral.
50.	Contrary to Labour Master’s submission, the surgery proposed by each of Dr Baba and Dr Sher was not intended to deal with the longstanding changes in Mr Giovenale’s right shoulder other than as part of the surgery proposed to repair the glenoid.
51.	The determination that a one-tenth deduction is not at odds with the evidence is implicit in the Medical Assessor’s statement
52.	In Cole v Wenaline Pty Ltd Schmidt J considered a case in which the medical members of an appeal panel found that a deduction under s 323 was warranted because surgery had been undertaken as a result of a previous injury some years before. Her Honour said:
“The section is directed to a situation where there is a pre-existing injury, or pre-existing condition or abnormality. For a reduction to be made from what has been assessed to have been the level of impairment which resulted from the later injury in question, a conclusion is required, on the evidence, that the pre-existing injury, pre-existing condition or abnormality caused or contributed to that impairment
Section 323 does not permit that assessment to be made on the basis of an assumption or hypothesis, that once a particular injury has occurred, It will always, ‘irrespective of outcome', contribute to the impairment flowing from any subsequent injuries. The assessment must have regard to the evidence as to the actual consequence of the earlier injury, pre-existing condition or abnormality. The extent that the later injury was due to the earlier injury, pre-existing condition or abnormality must be determined. The only exception is that provided for in section 323(2), where the required deduction 'will be difficult or costly to determine'.
…
What s 323 required, however, was that the evidence be considered, so that it could be determined, firstly, what the level of impairment after the second injury was. Secondly, whether a proportion of that impairment was due to the first injury. Thirdly, what that proportion was. Undoubtedly in undertaking this exercise, the medical members of an Appeal Panel must utilise their medical judgement, knowledge and experience. Nevertheless, all stages of the statutory exercise must be undertaken in the light of the evidence and without the making of assumptions not provided for by the section.”
53.	Clearly there must be a deduction in respect of the pre-existing condition in Mr Giovenale’s shoulders. We agree that the extent of the deduction would be difficult or costly to determine, particularly because Mr Giovenale had been able to perform heavy work as a bricklayer until the injury in 2021.
54.	In Vitaz v Westform (NSW) Pty Ltd (Vitaz) Basten JA said:
“…The resulting principle is that if a pre-existing condition is a contributing factor causing permanent impairment, a deduction is required even though the pre-existing condition had been asymptomatic prior to the injury. In the absence of any medical evidence establishing a contest as to whether the pre-existing condition did contribute to the level of impairment, the complaint about a failure to give reasons must fail. An approved medical specialist is entitled to reach conclusions, no doubt partly on an intuitive basis, and no reasons are required in circumstances where the alternative conclusion is not presented by the evidence and is not shown to be necessarily available.”
55.	While the Medical Assessor’s reasons were brief, there was no alternative conclusion presented by Labour Master’s evidence. A/Prof Miniter considered that Mr Giovenale suffered a “serious genuine injury to his right shoulder” and that the fractures suffered as a result of the injury had not healed. He said that he was not able to properly assess Mr Giovenale’s right shoulder. A/Prof Miniter did not accept that Mr Giovenale suffered a frank injury to his left shoulder. Despite the clearly articulated case that Mr Giovenale suffered a consequential condition in his left shoulder, the questions set out in the report reveal that A/Prof Miniter was only asked if Mr Giovenale suffered an injury. A/Prof Miniter determined that he did not. He said that there would be permanent impairment assessable in respect of the right shoulder without setting out what it was. He also said that the application of the Guidelines meant that any permanent impairment of Mr Giovenale’s left shoulder should be deducted from any assessment but the symmetrical range of motion meant that no loss was assessable. A/Prof Miniter did not consider s 323.
56.	In the absence of clearly articulated alternative opinion as to the extent of the appropriate deduction, the assessment made by the Medical Assessor was open to him in the exercise of his clinical judgement and additional reasons were not required.
57.	For these reasons, we have determined that the MAC issued on 8 August 2023 should be confirmed.