District Court New South Wales Medium Neutral Citation: Nunn v Camberwell Coal Pty Limited [2019] NSWDC 938 Hearing dates: 13-15 November 2019 Date of orders: 15 November 2019 Decision date: 15 November 2019 Jurisdiction: Civil Before: Neilson DCJ Decision: See [40] Catchwords: COALMINERS WORKERS COMPENSATION Claim for weekly payments for partial incapacity – P had left coal mining industry and, during relevant period, was in self-employment – Consideration of various ways of fixing compensation under s11(1) of the Workers Compensation Act 1926 Legislation Cited: Workers Compensation Act 1926 Workers Compensation Act 1987 Cases Cited: Cage Developments Pty Ltd v Schubert [1983] HCA 27; (1983) 151 CLR 584; [1983] WCR 167 Texts Cited: Willis, Workmen's Compensation Acts, 37th ed (1945) Category: Principal judgment Parties: Rodney Nunn – Plaintiff Camberwell Coal Pty Limited - Defendant Representation: Counsel: D. Benson – Plaintiff T. Rowles – Defendant Solicitors: Hicksons Lawyers – Plaintiff Sparke Helmore - Defendant File Number(s): RJ41/17 Publication restriction: Nil. Judgment 1. HIS HONOUR: The plaintiff, Rodney Ian Nunn, was formerly employed in or about an open cut coal mine as a plant mechanic. He now claims weekly payments of compensation from 1 July 2014 to date and continuing pursuant to s 11(1) of the Workers Compensation Act 1926 as its operation is preserved for those who work in or about a coal mine pursuant to Sch 6 Pt 18 of the Workers Compensation Act 1987. The statement of claim also claims lump sum compensation under s 66 and s 67, but the parties were able to reach an agreement on that aspect of the plaintiff's case. The defendant consented to awards being entered for the plaintiff for 30% impairment of his back and a 20% loss of efficient use in his left leg at or above the knee, as well as the plaintiff's entitlement under s 67 for pain and suffering, anxiety and distress resulting from that impairment and that loss. The parties also reached agreement as to outstanding s 60 expenses. 2. The case is relatively straightforward. The plaintiff was born in 1972. He is currently 47 years old. He has dependent upon him four children. His eldest son, Campbell, was born on 23 September 1994. Campbell currently lives with the plaintiff. He is a fulltime student at the University of Newcastle and obtains from his father board and lodging. That amounts to a dependency because the son is mainly dependent upon the plaintiff. The plaintiff's second son, Riley, was born on 16 April 2002. Riley is 17 years old. He is current in year 11 at high school. Although Riley resides with his mother, the plaintiff's first wife, the plaintiff pays child support for him. I note the plaintiff's general practitioner's records this entry made on 28 September 2015: "Child Protection Services is restricting him from seeing them [his two oldest sons] as he owes $6,000 for child support. This was calculated on previous annual income when working in the mines. Now Rodney [in] self-employment and making much less money and cannot afford this." It would appear at that stage Campbell was living with his mother as well Riley. It appears that the amount of child support which is paid by the plaintiff is considerable. I accept that Riley is mainly dependent upon the plaintiff for support. 1. The plaintiff has two children, the fruit of his second marriage. They are Phoebe who was born on 18 April 2011 and is currently eight years old, and his youngest son, Archie, who was born on 31 May 2012 and is seven years old. Both Phoebe and Archie are in primary school. There is no dispute that they are mainly dependent upon the plaintiff for support. I accept, therefore, that the plaintiff has dependent upon him at all material times, four children. 2. The plaintiff grew up in Moree. He left high school at the age of 18, having gained a Higher School Certificate. He then obtained an apprenticeship with Gough & Gilmore as a plant mechanic working at the Mount Thorley Mine. He did his TAFE studies at Kurri Kurri. He completed his apprenticeship and became a tradesman. Shortly after completing his apprenticeship, the plaintiff obtained work with the defendant on 7 August 1995. That date can be obtained from exhibit 7. 3. There was no dispute that the plaintiff sustained an injury to, inter alia, his low back on 2 January 2001. The claim form he submitted at the time is exhibit B. That bears date 3 January 2001. The plaintiff was re running wires from the front spotlights on the right hand air cleaner box of a Caterpillar truck and fell down backwards on to the boarding ladder, injuring his lower back, his thoracic spine and his head. He was taken to first aid and then sent home. He eventually went to the Singleton Hospital where X rays were performed. According to Dr A V B Isaacs, who first saw the plaintiff on 31 January 2001, the X rays of thoraco lumbar spine show that the L4 5 disc space was moderately narrowed and that there was a transitional L5 vertebra on the right. Apparently it may show some abnormality in the thoracic spine as well. 4. The plaintiff came under the care of Dr P Innis at the Singleton Heights Medical Practice. On 18 January 2001 a bone scan was performed. According to Dr Isaacs, that showed a fracture of the T6 vertebral body and a fracture through the lower sacrum and a bony injury involving the posterior element of the sacrum on the right side. The plaintiff did not lose any time from work. That was a practice adopted by the defendant to obviate time loss injuries. The plaintiff was provided with menial work in the office as a form of restricted work. 5. The plaintiff, as I said, saw Dr Isaacs on or about 31 January 2001. Dr Isaacs obtained a history that the plaintiff had seen a chiropractor, but the plaintiff did not respond to chiropractic treatment. Indeed, the plaintiff told me that the one manipulation of his back by the chiropractor caused him acute distress because it appears that it was not realised at that time that there had been bony fractures involving the spine. According to Dr Isaacs, movements of thoracic spine were restricted at extremes. He said that there was tenderness over T6 to T7 although the doctor refers to "L6 7" which, of course, does not exist and clearly in context is a mistyping of T6 7. As far as the lumbosacral spine is concerned, Dr Isaacs noted a positive sciatic stretch test. He also noted tenderness over the L5 S1 interspinous space. 6. He arranged for an MRI That was performed on 1 February 2001. According to the radiologist, Dr Wierna, that showed a left para median protrusion at the L4 5 level, abutting the origin of the L5 nerve root. There was an annular tear of the L4 5 disc associated with that protrusion. According to Dr Wierna, there was a minor bulge at the L5 S1 level associated with a degree of disc degeneration. 7. The plaintiff returned to see Dr Isaacs on 9 February 2001. He noted the plaintiff was still performing light duty work at that time. The doctor thought the plaintiff was improving symptomatically and, therefore, recommended conservative treatment. 8. The plaintiff remained working in his occupation as a plant mechanic in the defendant's open cut mine near Singleton for a number of years. He eventually found the work too heavy for him and he resigned, in effect, on 25 June 2010. That date can be obtained from exhibit 7. 9. There is really no dispute the plaintiff injured the L4 5 disc in his back in the fall of 2 January 2001. Repeated radiological investigations establish that. Eventually, the plaintiff was referred to Dr Richard Ferch, a neurosurgeon, specialising in spinal surgery. Dr Ferch first saw the plaintiff on 20 March 2012. Dr Ferch arranged further radiological investigations which as far as the L4 5 disc is concerned, showed an annular fissure with a broad based disc bulge. That was compressing the theca and effacing the central nerve roots, more so on the right than on the left. In combination with hypertrophy of the ligamentum flavum and facet joint degenerative changes, there was mild to moderate canal stenosis. The L5 S1 disc was also degenerate, but there was no fissure of the annulus fibrosis of the disc, nor was there evidence of compression that was equal to or greater than the compression at the L4 5 level. Dr Ferch was of the view that the plaintiff's symptoms were predominantly coming from the L4 5 disc. 10. On 2 April 2012, he performed an L4 5 laminectomy and an left L5 S1 decompression. The operation report contains this: "Sequestrated disc fragments were removed beneath the L5 nerve roots bilaterally. A defect within the posterior margin of the disc was noted and loose disc material within the defect was resected. The segment was noted to be somewhat hypermobile...The left L5 S1 level was decompressed [sic] haemostasis was, again, achieved with bipolar cautery and Gelfoam." One should note that Dr Ferch did not, in that operation, remove all of the nucleus pulposus of the L4 5 disc, nor did he remove the annulus fibrosis. 1. The plaintiff's symptoms recurred. That caused Dr Ferch to perform a left L4 5 microdiscectomy with neurolysis of the L5 nerve root on 9 September 2013. Again, the doctor found a soft disc bulge and loose disc material which he ablated, decompressing the nerve root along its course. Again, he did not remove either all of the nucleus pulposus, or the annulus fibrosis of the disc. 2. Unsurprisingly, there was a further occurrence of symptoms. Eventually, on 16 February 2015, Dr Ferch carried out a full decompression at the L4 5 level and performed an interbody fusion using bone harvested from probably the iliac crest. On that occasion, he did remove the remaining nucleus pulposus and the annulus fibrosis of the disc, in other words, a full laminectomy was only performed at the third operative treatment. If the first initial treatment had been a full laminectomy, that is an excision of the whole of the disc, then the plaintiff may have only needed to have one operative intervention. 3. There is no dispute that the plaintiff is incapacitated for work. I merely have to refer to the defendant's qualified doctor, Dr David Millons. Dr Millons first saw the plaintiff on 24 May 2017. He provided this view of the diagnosis: "He had pre-existing changes at L4 5 which were asymptomatic prior to the subject fall, which fall clearly caused a substantial aggravation of those changes. The nature and conditions of his working years, thereafter, would have caused ongoing aggravation of those changes." The doctor went on to say this: "The nature and conditions of his work as a plant mechanic are heavy and demanding and entail working in awkward or confined spaces, adopting abnormal body postures and a lot of lifting." A little further in his report he said this: "The work of a plant mechanic in the mining industry is extremely heavy and demanding." 1. As to the plaintiff's then capacity to work, Dr Millons said this: "Mr Nunn is fit for work of a light, semi sedentary nature, avoiding excessive bending, lifting more than 10 kilograms or working in awkward or confined spaces. He is better suited to semi sedentary type activities. He seems well suited to his current position in vehicle diagnostics whereby he just reviews the computer programmes on cars and has others do the mechanical work...Mr Nunn will never return to pre injury duties as a plant mechanic." 1. After leaving the employ of the defendant, the plaintiff found work commencing on 4 May 2011 with DMST Pty Ltd of Bolwarra Heights. DMST was an acronym for Dwayne's Mine Safety Tech. The company was established by two former workers who had the same trade qualifications as the plaintiff and who had worked in the coal mining industry. The plaintiff's job was, essentially, an office job planning ongoing maintenance for the mining industry. The plaintiff earned good money in that job. However, the company was bought out by the SubZero Group, and the plaintiff took a certain view about the financial practices of that organisation. He believed he could no longer morally work for that group and he submitted his resignation which took effect on 21 February 2014. That date can be obtained from exhibit 6. 2. It should be noted that the plaintiff underwent his first two operations whilst working for DMST. After the first operation, he had a number of weeks off work, but it appears that it may have been only two weeks off work after the second operation. 3. The plaintiff then obtained work in Cannington in far North Queensland. That was a fly in fly out job. He was working for a company known as Secora Pty Ltd working in a job known as "business improvement coach". That, as I understand it, was not hard, physical work. In fact, it appears to be likely to be much the same as the work he was doing for DMST. A report prepared for the defendant by Furzer Crestani indicates that the plaintiff commenced working for Secora in March 2014 and, since the job lasted for six months, would have finished up in August 2014. Particulars delivered by the plaintiff's solicitors to the defendant's solicitors indicate the plaintiff was earning $1,500 per week in that employment. However, when one looks at the figures given in the Furzer Crestani report, which are taken from the records of the plaintiff's business, it appears that the plaintiff's actual gross weekly earnings were probably $2,000 per week. As I said, that job would have ended sometime in August 2017. 4. Secora Pty Ltd would not employ the plaintiff directly. It required the plaintiff to have his own company and Secora Pty Ltd subcontracted to the plaintiff's company and the plaintiff's company employed him. The plaintiff's company is known as Tregoose Pty Ltd. That company was incorporated on 6 March 2014. That is consistent with the plaintiff's starting work for Secora Pty Ltd in March 2014. 5. Tregoose Pty Ltd registered the business name of "Advanced Vehicle Remapping, Hunter Valley", on 3 September 2014. That represents the time when the plaintiff set up the business which he is still operating. To iterate what is said about that by Dr Millons, is helpful. In his report of 24 May 2017, Dr Millons said this: "Three years ago, he started up his own business, working in vehicle diagnostics. He has become quite skilled if computer programmes on cars. He works on a contract basis and is called in to service stations to deal with problems on the computerised workings of vehicle. It is all quite technical. He states that he has reinvented himself. He feels that as time passes, more people will become skilled in computerised programmes on cars and his role may not be viable long term." Later in that report, Dr Millons said this: "He seems to have found a niche position and is self-employed in vehicle diagnostics which position does not entail putting any undue demands on his lower back. One can only wish him well and hope that the position will continue. One might presume that as new mechanics come into the scene, they will be well trained in the computer diagnostic area and his position may well diminish." 1. Dr Millons saw the plaintiff for a second time on 6 September 2018. The history then obtained by Dr Millons about the plaintiff's work is this: "When I saw him last, he told me how people were becoming skilled in computer programmes and he felt that the role may not be viable long term. That has actually not proved to be the case and he states that there are a lot of people who come and go, but that his business seems to be well secure and he works most days. He works in an office and out on site." 1. The plaintiff gave evidence that initially he worked out of a vehicle which carried the equipment that he used to diagnose problems in cars and other vehicles. He has, since eight months ago, been renting premises at Mustang Drive, Rutherford, an area of 250 square metres, from which he can operate his business. Vehicles are brought to him to be diagnosed. Some he can repair himself, but if there is any heavy, physical work required, the plaintiff gives the work to younger, fit motor mechanics and pays them the rate which he himself charges. The plaintiff, therefore, may only make a small profit from such work, the profit being from actually diagnosing the problem and choosing a mechanic who can repair the problem. 2. The plaintiff told me, and I wholly accept, however, his job is driven by the inability of ordinary repairers to deal with problem cars, problem cars which are generally known in Australia as "lemons". The work which he currently does, in particular, involves commercial vehicles and high end private vehicles and the ones he described as being the most regular vehicles brought to him being manufactured by German makers, although they may not actually be manufactured in Germany. 3. The real area of dispute between the parties is what should be the plaintiff's entitlement, if anything, under s 11(1) of the Workers Compensation Act 1926. Unfortunately, the wage schedules filed do not assist the Court at all. For example, the plaintiff's wages schedule, exhibit D, says the plaintiff's probable gross earnings at all material times since 1 July 2009 have been $1,800 per week. The defendant's wages schedule says that since 1 July 2014, the plaintiff's probable earnings but for injury have been at all material times $1,879.62 per week. Experience tells me that wages levels in the coal mining industry increase from year to year. I cannot accept that the plaintiff's wages schedule showing no change in wage levels over the last ten years is at all accurate, nor do I readily accept that the plaintiff's earnings in the open cut coal mining industry have not changed since 1 July 2014, as the defendant's wages schedule, exhibit 1, suggests. However, I must go on what the parties put before me. I accept that the plaintiff's probable earnings, but for the injury, have been at all material times, $1,879.62 per week, that being the admission made by the defendant in its wages schedule. 4. The question is what has the plaintiff been earning or what is his ability to earn? The plaintiff's actual earnings are easy to ascertain, based upon his income tax returns. Before me are his income tax returns for each of the financial years ending 30 June 2013, 2014, 2015, 2016 and 2018. The plaintiff's income tax return for the financial year ending 30 June 2017 has not been put before me, but the plaintiff's taxable income during that financial year can be ascertained from the Furzer Crestani report, Sch B. 5. Based upon those tax returns and that taxable income, the plaintiff's actual earnings have been these: Financial Year Average Weekly Earnings 30 June 2013 $2,657.17 30 June 2014 $2,155.88 30 June 2015 $741.31 30 June 2016 $585.00 30 June 2017 $526.37 30 June 2018 $516.67 1. The actual calculations in the report of Furzer Crestani raise a number of interesting issues. They also point to complicating factors. The plaintiff's wife, prior to 23 July 2018, was running her own public relations business and one of her major clients was Hunter Water. She used Tregoose Pty Ltd for the purposes of her business, just as the plaintiff was using Tregoose Pty Ltd for the purpose of his business. Since 23 July 2018, the plaintiff's wife has been working fulltime for the Department of Primary Industry. Nevertheless, she assists the plaintiff by doing some administrative and bookwork for him. 2. The plaintiff's actual hours, he told me, are between 80 and 100 per week. However, they are not all productive hours. They include doing menial work such as sweeping the floor of his factory premises or workshop premises, doing other cleaning work, answering the telephone, and he told me he spent much time answering the telephone, and chasing outstanding accounts, chasing up money and, no doubt, ordering parts, work that he can do himself and, perhaps, ordering parts for other mechanics to use that he engages to do the repairs that he cannot do. The plaintiff told me about 40 to 45% of his hours were not billable. 3. When a man is in self-employment, there are at least two ways of ascertaining the compensation payable. Those two ways were considered by the High Court of Australia in Cage Developments Pty Ltd v Schubert [1983] HCA 27; (1983) 151 CLR 584; [1983] WCR 167. That was a rara avis, a single, unanimous decision of five Judges of the High Court of Australia. At CLR 586, their honours said: "The reference in s 11(1) (a) to the 'amount' which a worker 'is earning, or is able to earn', is a reference to the amount which he is earning or is able to earning as a worker, that is to say, by his own physical and mental exertion(J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625 at 632, 643 and 651 – 2). In the present case, the profits of the business carried on by the partnership, earned by the utilisation of both capital and labour and were apparently divided between the respondent and his wife without regard to the relatively value of the respective contributions of both or either. In those circumstances, neither the net profits of the business, nor the respondent's share therein could properly be regarded as representing an 'amount' which he was 'earning' by his labour. The respondent was not, or the purpose of s 11(1) (a) 'earning' any such 'amount' or, for that matter, any other quantified 'amount'. That being so, it was necessary for Westcott J to determine the average weekly amount which the respondent was 'able to earn'. In a context where it is not suggested that the respondent would have been more gainfully or suitably employed elsewhere, his Honour was entitled to adopt the approach which he did and determine the average weekly amount by reference to the value of the work which the respondent was performing for the partnership during the relevant period of partial incapacity (see, generally, Paterson v AG Moore & Co [1910] SC 29 at 31 32; Calico Printers' Association Limited v Higham [1912] 1 KB 93 at 102; J & H Timbers v Nelson at 631, 643." Later in the judgment at CLR 588 their Honours said this: "Once his Honour decided, as he was entitled to do, that it was appropriate to act on the basis that the measure of the amount of actual or potential earnings was the value of the work which the respondent performed for the partnership during the period of partial incapacity, it was relevant to consider what it would have cost the partnership to 'employ somebody to do in a business what the respondent himself did or what the respondent's 'work would have been worth in wages if he had been employed by another to do the work'. (See J & H Timbers v Nelson at 631; Willis, op cit at 301)." The latter is a reference to Willis' Workmen's Compensation Acts 37th ed (1945). 1. The other alternative method of ascertaining the compensation is referred to by the High Court in this fashion (at CLR 587): "As Glass and Mahoney JJ pointed out in the Court of Appeal, there is no single way in which the actual or potential earnings of such a former worker must be determined. The circumstances of the particular case will indicate what way or ways are open and what evidence is relevant for that purpose and it is undesirable to confine the Commission within the strict limits of artificial rules laid down in advance by an appellate court. Thus; there may well be cases in which the actual earnings of a business, either represent the actual or potential earnings of a former worker during a period of potential incapacity. Where, for example; a business consists essentially of the provision of personal services by the former worker (eg, a business of a sole plumber or casual gardener) and no significant investment of capital is involved, the actual earnings of a business might properly be seen as representing the actual reward for 'the labour' of the former worker (see J & H Timbers v Nelson at 652) during a period of partial incapacity. In such a case, if the former worker is carrying on business solely on his own account; the net earnings of the business might properly be seen as representing the 'amount he is earning', in a business; if he is carrying on business in partnership or as an employee of a family company, the net earnings may properly be seen as representing the 'amount he...is able to earn', either in employment or in a business." 1. I have come to the view that the latter is not the way to proceed in this case. The first thing is that I do not know the extent of the computer programmes and technological devices which the plaintiff uses in his business, nor do I know their cost, that is the capital cost. I do not know the capital cost of the vehicle that he is using in the business prior to acquiring the premises at Rutherford, nor do I know the rent or the other outgoings for the Rutherford property. I do not know the extent of the plaintiff's wife's work for the plaintiff's business, either before she joined the Department of Primary Industries or since that time. 2. The accountants from Furzer Crestani who prepared the report relied upon by the defendant point out that there have been a large number of depreciation of assets, some being written off during the year that they were purchased and others being given accelerated depreciation in accordance with certain tax relief enacted by the Federal Government in recent times. 3. Furthermore, the raw data, I do not find, suggesting for example, how many jobs the plaintiff actually received, those which he hived off to other mechanics for repair and those which he was able to do himself. There is evidence of net profit that is set out in the Furzer Crestani report, but that does not help me particularly and appears to be inconsistent with the plaintiff's income tax returns. I am referring there to what Furzer Crestani referred to as the "true profits" where adjusted business income ("ANBI") which can be found in s 12 of the report. The table on p 13, for example, gives an annual profit in the financial year ending 30 June 2015 of $379.13 per week, the financial year 30 June 2016 an average weekly profit of $381.21 per week, the financial year ending 30 June 2017, a weekly ANBI of $1,086.06 and in the financial year ending 30 June 2018, an ANBI of $403.19 per week. That, they point out, has to be adjusted because of a lack of information about the input of the plaintiff's wife and they had not deducted the reasonable remuneration payable to Mrs Nunn for her efforts in the plaintiff's business. All this is thoroughly confusing. 4. One thing, however, is of assistance. Essentially, the plaintiff's trade is as a motor mechanic. Annexed to the Furzer Crestani report as attachment M, are statistics from the Australian Bureau of Statistics for fulltime non managerial employees paid at an adult rate in May 2018. They tell me that a motor mechanic working ordinary hours was paid $1,444.70 a week. They also tell me that an auto electrician was paid $1,463.60 for an ordinary working week. That, however, those ordinary working weeks were for a motor mechanic 39.7 hours and for an auto electrician, 38.9 hours, hardly standard 38 hour week. This table also provides for total earnings. They include overtime and for an auto electrician an average of 48 hours per week and for a motor mechanic an average of 42.2 hours per week and there is no evidence of the plaintiff's working overtime in the coal mining industry. Indeed, there is the usual evidence of rotating shifts and the like which may have involved some penalty rates, but no evidence of overtime. Equally, I do know that when the plaintiff was working for DMST, he was working a standard 38 hour week which was remunerated at the rate of $45 per hour in May of 2011 and that was increased to $48 per hour in November of that year. I shall compare apples with apples and keep the comparison at a rate of 38 hours per week or as close thereto as I can. 5. Although the plaintiff's claim commences on 1 July 2014, from what I have said about his work with Secora Pty Ltd, I cannot be satisfied that there was any economic loss prior to 1 September 2014. 6. The question is I can accept that since that time, the probable earnings but for injury are the $1,879.62 admitted by the defendant. Based as at 1 September 2014, I believe that the value of the plaintiff's work that he was doing was equivalent to his employing a motor mechanic and, in the circumstances, I believe that his ability to earn or, perhaps, more properly, the worth of his work was $1,400 per week. The difference is $479.62 per week. 7. The statutory maximum at that time for a worker with four dependant children was $557.20 per week. The statutory maximum at the current time is $628 per week. The amount which I propose to award under s 11(1) is below the statutory maximum at all material times. There was no reason, in my view, to exercise my discretion under s 11(1) to decrease that difference. It may well be that in due course, the plaintiff may ascertain that his probable, but for injury, are much greater than $1,879.62 and if there be a further application brought on that basis, the parties should, at least provide me with things such as the award rates and average weekly earnings for persons such as motor mechanics and the like. 8. I have inquired of counsel for the parties if any further reasons for judgment required and told none, if so required. 9. For those reasons, I make an award for the plaintiff for $479.62 per week from 1 September 2014 to date and continuing pursuant to s 11(1) of the Workers Compensation Act 1926 as its operation preserved pursuant to the Workers Compensation Act 1987 Sch 6 Pt 18. I make a general order under s 60. That order to operate in the future. The parties have agreed on past s 60 expenses. I order the defendant to pay the plaintiff's costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 September 2020