KELLOGG (AUSTRALIA) PTY LTD v PIZANIAS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, PRIESTLEY and MEAGHER JJA 23 October 1989, 31 October 1989 [1989] NSWCA 119 WORKERS COMPENSATION — whether evidence supported award under s11(2) of Workers Compensation Act 1926 — whether evidence of failure by employer to provide suitable employment — no error of law by trial judge. Mahoney JA I agree with the judgment of Priestley JA. As his Honour has said, the only ground of appeal on which the appellant has in fact relied has been the ground which his Honour has specified: Mr Rolfe QC for the appellant, whilst not formally abandoning the other grounds, indicated that he would say nothing in support of them. Mr Rolfe's contention was essentially that it was for the worker to show that, as at the date of the application to the compensation Court, there was a deemed total incapacity; that this required that he show that, as at that date, the employer was failing to do what s11(2) of the Workers Compensation Act 1926 then required it to do; and that there was no evidence that, at that date, there was, in the relevant sense, a failure to offer appropriate work to the worker. I do not think that that submission should be accepted. The conclusion was open and should be drawn that at an earlier date, viz, in 1985, there had been a refusal and therefore a failure in terms to provide relevant work for the worker. It is proper to have regard to what happened subsequently up to the date of the application and, in my opinion, thereafter in order to determine whether, as a matter of fact, the employer continued to take such an attitude to the worker. I agree with Priestley JA that there was evidence on which his Honour could conclude that it did: if and insofar as it may be relevant, the proper conclusion from the facts was that it did. I agree with the orders proposed by Priestley JA. Priestley JA Kellogg (Australia) Pty Limited ("the appellant") has appealed against an award made against it under the Workers Compensation Act 1926 on the application of Mr E Pizanias ("the respondent"). The appellant employed the respondent as a machine operator from January 1978 until 7 October 1984. On that day the respondent suffered an injury to his back while at work. He recovered from the injury sufficiently for various medical practitioners to form the opinion that he was fit for light duties. He went back to work with the appellant for a short time on light duties, but was only able to work for a couple of hours on the job he was given to do before he had to stop because he had a lot of pain and numbness. By 12 July 1985 his employment had been terminated. The appellant voluntarily paid compensation to the respondent until 5 August 1986. As from that day no further compensation was paid. On 16 July 1986 the respondent had filed an application for compensation pursuant to sl1(1) and s11(2) of the Workers Compensation Act 1926. If he succeeded only under s11(1) the respondent would be awarded a weekly payment for partial incapacity. If he succeeded under s11(2) he would be compensated as if his incapacity for work 2 UNREPORTED JUDGMENTS were total. This would be because, although the respondent was only claiming to be partially incapacitated, the employer would have been found to have failed to provide suitable employment for him during that partial incapacity. When the case came on for hearing before Burke J in the Compensation Court, evidence was given upon which findings of the facts I have already noted were made. In addition, the respondent gave evidence that early in 1988 he applied to the appellant for employment on light duties. He said that his application was refused. He also said that he would have been willing to do any suitable work. He was not cross-examined about the making of his application for employment, but was asked a series of questions all suggesting that the respondent, although the doctors had advised him he was fit for light duties, believed in his own heart that he was physically incapable even of doing light duties. The gist of his replies is exemplified in the following passage from the evidence: "Q So you could not work any harder now than you could have back in 1985 when you tried this two hours, is that right? A When I feel a little bit better I feel that I could work, but for how long I don't know. Q But it would be doing just that job that we've described, the conveyor bringing it down to you and you sitting or standing and putting it in a bin? A Yes I can do it, yes I will try. Q You will try? A Well I can do it but for how many hours I don't know. Q Do you consider that you are quite sick today? A Yes I feel - because the pains are still pains, they never stop. The numbness is there in the leg, I'm still taking pain killers for the pains, and I don't think that I am as strong as I used to be before. Q Right and just let me go through it, is it correct you are too sick say to cut your own lawn? A Yes. I am sick." It would seem from this cross-examination that the appellant was seeking to show that although the medical opinions were that the respondent was capable of doing at least light duties, he himself really believed that he was not able to carry out light duties, so that his attempt to obtain employment with the appellant in early 1988 was a sham, with the result that the appellant was not in breach of its obligation under s11(2), (see Electric Power Transmission Pty Ltd v D'Urso (1970) 124 CLR 338) and the respondent's claim under that subsection must fail. If this was the strategy of the appellant (and I cannot see any other explanation of the way the case was conducted then it failed to persuade Burke J. It is implicit in his reasons that he accepted in a general way what the respondent said. However, he went further. He said he saw no reason to reject the respondent as honestly giving an account of the symptoms that he subjectively experienced. Referring to the light work provided by the appellant in 1985 his Honour said: "One would normally have thought that it sounded to be quite suitable for somebody. However the applicant says it exacerbated his symptoms such that he could not continue. Patently that is consistent with his presentation both before and after. Subjectively as to whether it should be so on any pathological basis is a different question altogether. I accept that it is in fact so. If the applicant could not do that exceedingly light work it seems highly improbable of course that he can do the job of a machine operator. On general terms on a reasonably accessible labour market the applicant presenting as he does it really appears that there is little likelihood of him fitting into any industrial niche, even the traditional driveway attendant or something of that order. If the man feels as poorly as he says he does, and I accept that he does it is unrealistic in my view to feel that he could fill any position in industry and he is in all practical terms totally incapacitated." In the final paragraph of his judgment Burke J said: URJ KELLOGG (AUSTRALIA) PTY LTD v PIZANIAS (Priestley JA) 3 "T find one, on 7th October 1984 the applicant suffered injury to his back in the course of his employment. Two, the applicant incapacitated thereby and paid compensation to 5th August 1986. Three, the applicant totally incapacitated 6th August 1986 to date and continuing. Four, at all material times there was totally dependent upon the applicant his wife and three children. Five, average weekly earnings current weekly wage rate sufficient to support an award at the maximum rates. I make an award for the applicant s11(2),6th August 1986 $243.60 per week as adjusted 6th August 1986 to date and continuing." On one reading of his Honour's reasons, it seems that he was finding that the respondent was totally incapacitated as a matter of fact, which would have led to an award under s9, rather than s11(2). The appellant appears to have understood his reasons in that sense, at least at the time when the notice of appeal was filed, because the grounds in that notice are all based on the proposition that his Honour's award was made under s9. However, when the appeal came on for hearing the appellant sought leave to amend its grounds of appeal by adding the following: "That his Honour was in error in holding that there was evidence upon which he could make an Award that the worker was totally incapacitated pursuant to s11(2) as from 6 August, 1986." This became the only ground of appeal upon which the appellant relied. The argument in support of the ground of appeal was that there was no evidence upon which the Compensation Court could find, at least in the period between the ending of compensation payments to the respondent on 5 August 1986 and the date in early 1988 when the respondent applied to the appellant for light duties and was refused, that the appellant had failed to provide suitable employment for the respondent during his partial incapacity for work, within the meaning of s11(2). In association with this argument it was pointed out that no specific finding had been made by Burke J of failure by the appellant within the meaning of the subsection. Counsel for the appellant, however made it clear that in making this last submission, he was not seeking to rely upon the line of authority which says that in some circumstances, a failure by a trial judge to show at least the basis of his reasoning upon matters essential for his conclusion, may be an error of law. (For this line of cases, see Apps v Pilet [1983] 11 NSWLR 350, and cases there cited). For the respondent, it was argued that Burke J plainly intended to make an award under s9. On this submission, when Burke J said "I make an award for the applicant s11(2)", the reference to s11(2) was nothing more than a slip. In particular the respondent in making this submission relied upon his Honour's finding, which appears in the passage of his reasons I have already set out, that the respondent was "in all practical terms totally incapacitated." In the view I have formed of the case, it is unnecessary for this Court to determine whether Burke J's award was made under s9 or s11(2). For the purposes of deciding the appeal, it is sufficient to deal with the only argument advanced for the appellant. In my opinion that argument should not be accepted. The question whether an employer has failed to provide suitable employment within the meaning of s11(2) has been said to be a question of fact: see, for example, per Kitto, Taylor, Windeyer and Owen JJ in RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665 at 669. This must be so, except perhaps in the case where the question is raised whether the fact was decided by reference to an erroneous understanding of the meaning in law of the word "fails" in s11(2). No such contention was raised in the present case. The only ground the appellant 4 UNREPORTED JUDGMENTS could (and did) take was to submit that there was no evidence upon which a finding of the relevant failure could be made. I do not agree with the appellant's submission. The following evidence was before Burke J. From medical reports both before and after the time when the employer stopped paying the voluntary payments of workers compensation to the respondent, being reports which the appellant must be taken to have been aware of, it appears that the doctors who examined the respondent considered him to be fit for light duties. The appellant paid workers compensation voluntarily to the respondent from the time he tried unsuccessfully in 1985 to carry out the light duties offered to him by the appellant until a date three weeks after he filed his formal application for compensation. That application was expressed to be made pursuant to s11(1) and s11(2) and not s9. That meant the respondent was alleging partial incapacity, and in the alternative, partial incapacity and failure by the appellant to provide suitable employment. The filing of this claim seems to me clearly to have put the appellant on notice that the respondent was holding himself out as willing and able to do light duties. The respondent gave evidence that despite his belief concerning his disabilities being greater than those recognised by the doctors, he was willing to try to carry out suitable light duties. The appellant at no time after 16 July 1986 offered the respondent any suitable employment to the respondent, and, when in early 1988 the respondent explicitly asked for such employment, the appellant refused to provide it. These matters appear to me to be sufficient to found a conclusion that the appellant had failed as from 5 August 1986 to provide suitable employment for the respondent, its partially incapacitated former worker. The way in which s11(2) has been explained in D'Urso and Westfield Shopping Centre v Kassem (1985) 4 NSWLR 344 provides ample support for this conclusion. The fact that Burke J did not explicitly refer in his reasons to a finding of failure seems to me to be explicable by two considerations; if, as the appellant argues, the award was made under s11(2), the finding is implicit in his Honour's reference to that subsection in the operative part of his judgement; that is, the reference to the subsection is itself enough to show that the judge, having evidence before him on which such a finding could be based, was in fact by clear implication making such a finding. The other and allied matter is that it seems clear enough that the actual issue contested at the trial was whether the respondent had in fact been willing and able to enter into suitable employment with the appellant in the period between 5 August 1986 and early 1988. There is no indication in the materials before this Court that any other point was being contested at the trial. Burke J's decision plainly negated the appellant's contention, and it seems to me there was therefore no call to be more explicit about a matter not really in contest once the appellant lost on the issue which it was really litigating. On this footing it seems to me that the only ground of appeal relied upon by the appellant cannot succeed. As earlier indicated, on this approach it is unnecessary to deal with the respondent's assertion that the award was based on s9 rather than s11(2). I therefore say no more about that alternative contention than that it seems to me at the very least to be arguable, on the materials before the Court, in the way I have earlier indicated. Indeed, if I should be wrong in what I have said about the appellant's appeal based upon its s11(2) contention, I would be prepared to uphold the award made by Burke J on the footing of s9. The words of the award as formally drawn up seem to me to be equally consistent with its statutory base having been the one section as the other. URJ KELLOGG (AUSTRALIA) PTY LTD v PIZANIAS (Meagher JA) 5 In the course of argument it was said that it may well be material, for other proceedings the respondent has on foot against the appellant, for the parties to know whether the award was based on s9 or s11(2). If this is a real problem, it is unnecessary for this Court to solve it for the parties, particularly as the Court was informed that s17 of the Compensation Court Act authorises procedures whereby the Compensation Court can itself resolve the question between the parties, upon appropriate application being made to it. In my opinion the appeal should be dismissed with costs. Meagher JA I agree with Priestley JA. Appeal dismissed with costs. Counsel for the Appellant: JMN Rolfe QC and CB Loveday Solicitors for the Appellant: Hunt and Hunt Counsel for the Respondent: JL Sharpe Solicitors for the Respondent: Geoffrey Edwards and Co