ADMINISTRATIVE LAW – judicial review – medical review panel – assessment of degree of permanent impairment under the Motor Accidents Compensation Act 1999 (NSW) – failure to take into account relevant considerations – whether the failure to refer to particular evidence can constitute failure to take into account relevant considerations – failure to accord procedural fairness – whether failure to respond to a substantial argument based on a body of evidence – constructive failure to exercise jurisdiction – whether failure of review panel to apply itself to the real question to be decided – whether review panel misunderstood a significant body of evidence relevant to causation of injury – review panel certificate vitiated by jurisdictional error
Gleeson JA (Macfarlan and Leeming JJA agreeing)
84 It is well established that reference to a “relevant consideration” in judicial review is a reference to a factor which, by law, the decision-maker is bound to take into account: Peko-Wallsend at 39; Allianz Australia Insurance Ltd v Cervantes  NSWCA 244; 61 MVR 443 (Cervantes) at  (Basten JA; McColl and Macfarlan JJA agreeing).
85 As Basten JA explained in Cervantes at , this ground required the respondent, Mr De Gelder, to identify the legal obligation on which he relied to identify what were mandatory factors to be taken into account for the purposes of the Panel’s decision. The identification of relevant and irrelevant considerations is to be drawn from the statute empowering the decision-maker to act rather than from the particular facts of the case that the decision-maker is called on to consider: Abebe v Commonwealth of Australia  HCA 14; 197 CLR 510 at  (Gummow and Hayne JJ).
86 It seems that this did not occur before the primary judge. This remained the position in this Court. Although Mr Rodger contended that the Permanent Impairment Guidelines were delegated legislation and Mr De Gelder did not submit to the contrary, neither party identified any mandatory considerations the Panel was bound to take into account. Both parties proceeded on appeal on the same basis as they did before the primary judge – that relevant material was the same as a relevant consideration in the sense described in Peko-Wallsend. This approach, which his Honour adopted, was erroneous. The error, as Basten JA said in Cervantes at , is that “to describe evidence as ‘relevant’ to the case of one party is not to identify a ‘relevant consideration’ for judicial review purposes”.
89 In Cervantes at  – , Basten JA addressed the legal obligation of administrative decision-makers to take particular evidence into account. The context in that case was the obligation of a claims assessor exercising power under the MAC Act, s 94. His Honour said:
 Although this ground must be dismissed for the reasons given above, it is desirable to return to the first step in the reasoning, namely identifying the legal obligation to take particular evidence into account. No case was referred to which supported a proposition expressed in these terms. In Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 73 ALD 321; 197 ALR 389; 77 ALJR 1088;  HCA 26 at  (Dranichnikov), Gummow and Callinan JJ stated:  To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice.
 A similar point was made by Kirby J at  referring to a passage in the judgment of Gaudron J in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; 179 ALR 238;  HCA 22 at  (Miah) where, after noting that it was not always easy to distinguish an error of law which is jurisdictional from one that is not, her Honour continued:  However, the present case is, in my view, a clear case of constructive failure to exercise jurisdiction. That is because the delegate failed to consider the substance of Mr Miah’s application and could only have failed to do so because he misunderstood what is involved in the Convention definition of “refugee”.
 Two propositions may be drawn from these statements. First, although not articulated in these terms, a constructive failure to exercise jurisdiction may arise because the statutory conferral of power has not been exercised according to its terms. Thus, in the present case, s 94 of the [MAC] Act requires that a claims assessor “is, in respect of a claim referred to the assessor for assessment, to make an assessment of … the amount of damages”: s 94(1)(b). It is, therefore, mandatory that the assessor address the claim and carry out the statutory function.
 The second point is that neither Dranichnikov nor Miah went so far as to imply an obligation to consider every piece of evidence presented. Further, to refer to a report, but not to a particular passage in the report, may indicate an implicit preference for some other material which (in the absence of any no evidence ground) must be accepted as existing to support a particular conclusion. Such a course cannot constitute a failure to take into account a relevant consideration nor a failure to respond to a substantial argument: Minister for Immigration and Citizenship v SZJSS (2001) 243 CLR 164; 273 ALR 122; 119 ALD 446;  HCA 48 at  (SZJSS).
93 Where a decision-maker has failed to respond to a substantial argument it has been said that there has been a failure to accord natural justice, that is, procedural fairness: Dranichnikov v Minister for Immigration and Multicultural Affairs  HCA 26; 77 ALJR 1088. In such a case the concern of the law is to avoid practical injustice: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam  HCA 6; 214 CLR 1 at  (Gleeson CJ). It is well accepted that with respect to the MAC Act, procedural fairness applies to a review panel exercising powers under s 63: McKee v Allianz Australia Insurance Ltd  NSWCA 163; 71 NSWLR 609 at  (Allsop P). The particular content of this requirement will depend upon the facts and circumstances of the particular case: Trazivuk v Motor Accidents Authority (NSW) at ; Frost v Kourouche at  and .
94 A failure to accord procedural fairness is a recognised form of jurisdictional error: Kirk v Industrial Court of New South Wales  HCA 1; 239 CLR 531 at . It is susceptible to correction as jurisdictional error: Re Refugee Review Tribunal; Ex parte HB  HCA 34; 179 ALR 513 at .
95 It has also been said where the relevant facts have been clearly established and the reasons show the decision-maker acted on the wrong basis in important respects, the decision-maker has failed properly to exercise their jurisdiction: Nufarm Australia Ltd v Dow AgroSciences Australia Ltd (No 2)  FCA 757; 282 ALR 24 at -. Jurisdictional error includes a constructive failure to exercise jurisdiction. A constructive failure to exercise jurisdiction arises when a decision-maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided, or misunderstands the nature of the opinion it is to form: Minister for Immigration v Yusuf at  (Gaudron J).