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Li v Villawood Relaxation Centre (NSWPICMP 2025)

Key Takeaways

If there is insufficient evidence to form a conclusion as to the proportion of permanent impairment that is due to a previous injury/condition, then even in cases where there is evidence of age related degenerative changes and/or a prior injury, s323(2) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) will operate to assume a deduction of 1/10th.

Brief Facts

The worker was assaulted by a co-worker in the course of his employment and sustained a significant lumbar spine injury.

The worker made a claim for lump sum compensation which was subject to proceedings in the Personal Injury Commission. Subsequently, a Medical Assessment Certificate (MAC) was issued by a Medical Assessor (MA) who assessed 25% WPI, reduced by 1/4 pursuant to s323 of the 1998 Act. The resultant figure for total WPI was 20% (after 1% was added for scarring).

The worker appealed against that assessment, limited to the MA’s application of s 323 of the 1998 Act.

Judgment

The worker submitted that the deduction made by the MA of 1/4 was excessive and not based on the available evidence, representing a demonstrable error. The worker identified the basis for the deduction, as opined by the MA, being a previous lumbar spine injury.

The worker submitted that in the following circumstances, the appropriate step would be to make a deduction of 1/10th pursuant to s323 of the 1998 Act:

• There was no accurate detail to determine that his prior back injury of 2000 or 2001 caused him to be incapacitated until 2016.
• There were conflicting statements about the effects of the injury of 2001, which could be due to memory.
• There were no medical records available in respect of the injury of 2001.

In submitting that the MAC should be confirmed, the respondent submitted that the evidence supported the conclusion that the worker suffered a previous back injury, for which he brought a prior claim. The respondent further referred to the history given by the worker of an absence from work for many years and an injury significant enough to warrant a financial settlement. Specifically, the worker had a back injury in 2001 subject to a workers compensation claim. He received financial settlement in 2004 ($15,000) and did not work until 2016 when he commenced employment with the respondent.

The Appeal Panel (AP) explained that s323 of the 1998 Act provides a statutory basis for the making of a deduction for previous injury or pre-existing condition or abnormality. It went on to say that s323 has been the subject of significant judicial scrutiny however the various authorities affirm a three step test for consideration when applying s323: the first step is to determine the extent of impairment following the work injury. The second is to determine whether a proportion of that impairment is due to a previous injury, or pre-existing condition or abnormality. The final step is to determine the extent or proportion of that contribution (see Cole v Wenaline [2010] NSWSC 70; Elcheikh v Diamond Formwork (NSW) Pty Ltd (in Liq) [2013] NSWSC 365).

It was noted that the third step was in issue in the appeal, which required consideration as to what extent the worker’s previous lumbar spine injury and the age-related degenerative changes, had contributed to the current degree of permanent impairment.

In respect of the age-related degenerative changes, the AP held that the radiological evidence was clear and supported the existence of degenerative change in the worker’s spine that had been present prior to the work injury where the worker was assaulted.

However, what was less clear, was the worker’s prior back injury. The AP noted the inconsistent histories recorded in various medical reports and the conflicting statements of the worker, as to what precisely had occurred in 2001. The AP accepted that the worker was injured, and on the balance of probabilities was satisfied that the injury included the lumbar spine. However it emphasised that that was as far as the evidence goes. It was not clear what the $15,000 payout was for, and why the worker ceased work for a period of 15 years.

The AP held that it could not be, without conclusive evidence, attributed to a back injury, particularly where there was evidence of an injury to other body parts. It noted that the claims history recorded by SIRA of an injury to the back was not sufficient in the context of those competing histories.

The AP highlighted the ‘fall back mechanism’ contained in s323(2), that is:

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.

The AP held that there was an absence of medical evidence of the lumbar spine injury as noted above and therefore concluded that the MAC contained a demonstrable error in failing to properly analyse the medical evidence available of the previous injury.

The AP found that the extent of the contribution of the prior injury was difficult or costly to determine because of the absence of medical evidence of the previous injury and on that basis, considered a deduction of 1/10th appropriate.

Implications

This case serves as a reminder that where the evidence (medical and statement) is inconclusive and at times inconsistent, no more than a deduction of 1/10th will likely be made to the overall WPI assessment.