BROKEN HILL PROPRIETARY CO LTD v KUHNA SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, MEAGHER and CRIPPS JJA 17 August 1992, 26 August 1992 [1992] NSWCA 30 The respondent (a miner) was injured at work on 4 June 1988. At first instance, although it was found the injury was attributable to the serious and wilful misconduct of the worker, compensation was still payable as the injury resulting in serious and permanent disablement under s14 Workers ComPensation Act 1987. The employer appealed against the finding that injury resulted in serious and permanent disablement. HELD: The trial judge was correct in his finding and there was evidence to support his finding. To satisfy the requirement of "serious and permanent disablement" it is not necessary to show that all capacity for employment has gone. It is necessary to show that the disability is both serious and permanent: Peters Ice Cream Pty Ltd v Feeney [1970] 3 NSWR 125, CF Wicks v Union Steamship Co of New Zealand (1933) 50 CLR 328. The fact a worker may now be earning more in a clerical capacity than he would as a miner does not mean he has not been seriously and permanently disabled. Mahoney JA I agree with the judgment of Cripps JA. Mr Timbs QC, who appeared for Broken Hill Proprietary Co Ltd, sought at length to establish that, within s14(1) of the Workers Compensation Act 1987, "serious and permanent disablement" connotes disablement for work generally and not merely for the work or the kind of work done by the worker at the time of the injury. I do not accept that that is the meaning of the phrase. No doubt the word "disablement" refers primarily to disablement in respect of capacity to perform work. But provided the disablement or interference with capacity is "serious", the provision may be satisfied notwithstanding that other work may be undertaken and even undertaken more remuneratively. This provision is not concerned with quantification of compensation according to the extent of incapacity. It is, in its function, part of a condition imposed upon the right to a payment of compensation. I agree with the orders proposed by Cripps JA. Meagher JA I agree with Cripps JA. Cripps JA On 4 June 1988 the respondent worker was injured while sliding down aconveyor belt at the Appin Colliery. He had travelled approximately 1.5 kilometres along a 1:3 incline without any trouble. He then struck a slippery patch and for the remaining half kilometre of his descent he was out of control. At the end of the conveyor belt he became airborne and struck a steel structure on the side of the belt. He was taken to hospital where it was found he had suffered multiple abrasions to both elbows, a fracture of his nose, a fracture of two ribs on the right side, a comminuted fracture of the os calcis and an undisplaced fracture of the left lateral malleolus. As a result of the accident he was totally incapacitated for work from 4 June 1988 until 14 August 1988. The appellant employer refused to pay any compensation. On 16 September 1988 he made application to the compensation court for a weekly payment of compensation from 4 June 1988 until 14 August 1988. 2 UNREPORTED JUDGMENTS Upon the matter coming on for hearing before Cameron CCJ, the employer did not dispute that the plaintiff had suffered an injury at work. However, it maintained that, by reason of the conduct of the worker, he was not entitled to compensation. $14 of the Workers Compensation Act 1987 relevantly provides: "14(1)... (2) If it is proved that an injury to a worker is solely attributable to the serious and wilful misconduct of the worker, compensation is not payable in respect of that injury, unless the injury results in death or serious and permanent disablement. (3)...." Cameron CCJ held that the employer had discharged the onus of establishing that the misconduct of the worker was serious and wilful and that his injury was solely attributable to his misconduct. There has been no appeal from that finding. However, the learned trial judge was of the opinion that the worker suffered "serious and permanent disablement". Accordingly, an award was made in his favour. The employer has appealed against that lastmentioned finding. The appeal is limited to questions of law. Almost all the oral evidence given in the proceedings at Wollongong and later at Sydney was concerned with the employer's claim that the worker's injury was solely attributable to his serious and wilful misconduct. The worker tendered medical reports including those of Dr Deshpande. On 16 January 1990, Dr Deshpande reported that the worker was then working at a desk job and "is managing satisfactorily". He said he complained of pain in the right foot which was constant. The pain was aggravated by walking and assertion. The worker had difficulty in walking for long distances and had pain if he stood for a long time. He walked with a limp and said that the pain in his right foot was getting worse. Dr Deshpande thought that the worker was suffering from post-traumatic subtaloid arthritis of the right foot which could eventually require a subtaloid fusion. He was of the opinion that the worker's disability "is quite significant, especially with his left subtaloid joint being stiff as well". He was of the opinion that the "disability in his right foot is thirty per cent". In his reasons for judgment, the learned trial judge, after categorising the worker's misconduct as serious and wilful said: "That, however, is not the end of the case so far as the applicant is concerned because there is no doubt in my mind, on the medical evidence, that the applicant did suffer serious and permanent disablement. He had serious injuries to the oscalcis of one of the feet and has undoubted impairment of his ability to engage in mining work." He therupon made an award for the applicant at the rate of $521.10 per week from 4 June, 1988 to 14 August, 1988, together with s10 expenses. In its Notice of Appeal, the employer alleged: "That his Honour failed to address and consider all matters relevant to the finding made and in particular failed to address and consider whether the Respondents injuries had reflected themselves in economic terms and in so doing erred in law." In its written submissions as originally filed, the employer maintained that it was not open to the learned trial judge on the material before him to conclude that the worker was seriously and permanently disabled and that the learned trial judge had applied an incorrect test. It also submitted that there was no evidence entitling the learned trial judge to reach the conclusion he did and that he erred in law in failing to provide adequate reasons for his conclusion (see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247). At the hearing the employer filed amended grounds of appeal: URJ BROKEN HILL PROPRIETARY CO LTD v KUHNA (Cripps JA) 3 "1. That his Honour erred insofar as he determined that the Respondent's impaired ability to engage in mining work constituted 'serious and permanent disablement' within the meaning of that expression in s14(2) of the Workers Compensation Act, 1987 as amended. 2. His Honour erred insofar as he failed to have regard to the nature and extent of the Respondent's capacity for work in his assessment of disablement under s14(2) of the Act. 3. His Honour failed to assess the nature and extent of the Respondent's capacity to undertake the type of work for which, by his aptitudes, education, training and experience he was otherwise capable. 4. That his Honour failed to give adequate reasons in relation to his findings as to serious and permanent disablement. 5. That there was no evidence before his Honour which would support a finding of serious and permanent disablement." Upon the matter coming on for hearing, the employer abandoned appeal grounds 4 and 5. That is to say, it was no longer contended that the learned trial judge failed to give adequate reasons and it was no longer contended that there was no evidence entitling the learned trial judge to make a finding of "serious and permanent disablement". The employer's essential submission is that the learned trial judge, when considering whether the worker suffered a serious and permanent disablement failed to have regard to the worker's pre-injury and post-injury capacity for work. It was submitted that the learned trial judge should have considered, but did not, the whole of the worker's capacity for work and should not have confined himself, as it is submitted he did, to the incapacity of the worker to undertake the work he was doing when he was injured. Although not resiling from its abandonment of appeal ground No 5 that there was no evidence to support the learned trial judge's finding, it was also submitted that there was no evidence as to the seriousness of the disablement or its permanency. In particular, it was submitted that in the absence of direct evidence from the worker concerning his physical capacity for work, the learned trial judge was precluded from concluding that his disablement was serious. However, as will be seen, I am of the opinion that there was evidence capable of sustaining the learned trial judge's finding. Mr Timbs QC, on behalf of the employer, has submitted that the learned judge fell into error because he concluded that the proviso had been made out merely because the worker suffered a serious injury. He also submitted that he erred in law because he failed to ask himself the proper question which was: whether the worker was seriously and permanently disabled for work generally. It was submitted that it was not enough that the worker was unable to undertake his pre-accident employment. In Wicks v Union Steamship Co of New Zealand Ltd (1933) 50 CLR 328, the High Court was concerned with the meaning and application of the phrase "total and permanent disablement". At 338, it was described as: "an expression which, in our opinion, means physically incapacitated from ever earning by work any part of his livelihood. This condition is satisfied when capacity for earning is gone except for the chance of obtaining special employment of an unusual kind". Mr Timbs QC has submitted, correctly I think, that the "disablement" of which s14(2) speaks is to be understood in an employment context. That is to say, it is not sufficient merely to conclude that a worker suffers an impairment. In Peters 4 UNREPORTED JUDGMENTS Ice Cream Pty Ltd v FeEney [1970] 3 NSWR 125, Jacobs JA, in dealing with the words "serious and permanent disablement" in the Workers' Compensation Act 1926 said: "Tt is true that in Wicks v Union Steamship Co of New Zealand (1933) 50 CLR 328 the High Court, when dealing with the expression 'total and permanent disablement' enunciated the condition that the capacity for earning must be found to be gone except for the chance of obtaining special employment of an unusual kind. I think it is correct to say that this case shows an approach which requires exceptional circumstances before applying words of this kind. However, it would be wrong to transpose the condition which was enunciated in that case where the words were 'total and permanent disablement' to a section which uses the words "serious and permanent disablement'. It would therefore not be correct to insist upon the finding that all capacity for emploYment has gone except for a mere chance of obtaining special employment of an unusual kind. The condition required under the section now being considered would be satisfied provided there is evidence that the disability was both serious and permanent. In the context it is correct, I think, to apply those words to employment situations, and it seems to me that is what the medical evidence did in this case." In the present case, there was evidence that the worker not only suffered an impairment but that impairment affected his physical capacity to undertake work. The argument, as I understand it, on behalf of the employer is that the disablement cannot be said to be serious because, before such a finding could be made, it was necessary for the learned trial judge to consider the whole range of the worker's activity and, it is submitted, that was not done. As Jacobs JA pointed out in Feeny, the questions whether or not a disablement is serious and whether it is permanent are matters of fact. It is no longer submitted that he failed to give adequate reasons for his conclusion. If it is still maintained that it was not open to the learned trial judge to conclude as he did, I reject the submission. I have already referred to the medical evidence. It is true that the worker himself gave very little evidence concerning his present condition. However, the medical evidence was admitted by consent and was not the subject of any challenge. In my opinion, it provided the basis upon which it was open to the learned trial judge to make the findings he did. The impairment to the worker's right ankle was, according to the medical evidence, serious and permanent. He suffered a 30% disability and it was likely to get worse. Dr Deshpande was of the opinion that it would require operative treatment in the future. Dr Deshpande recorded that the worker was no longer employed as a miner but was able satisfactorily to undertake a clerical job with the employer above ground. In my opinion, it was open to the learned trial judge to infer that as a result of the injury the worker could no longer work underground as a miner. I am not persuaded that it was necessary for the learned trial judge to go further than that. However, there was some evidence concerning the worker's capacity to undertake certain types of work. It was said that he was now doing clerical work which was within his physical capacity. The learned trial judge was entitled to infer that certain other work, including work underground as a miner, was not. The circumstance that the worker may have been earning as much as he would have been earning had he remained an underground miner did not mandate a conclusion that he had not been seriously and permanently disabled. I would URJ BROKEN HILL PROPRIETARY CO LTD v KUHNA (Cripps JA) 5 dismiss the appeal. The order I propose is that the appeal be dismissed and the appellant pay the respondent's costs of the appeal. Appeal dismissed. Appellant to pay respondent's costs of appeal. Counsel for the Appellant: JA Timbs QC/C RR Hoeben Instructed by: Sparke Helmore and Withycombe 10 Counsel for the Respondent: BJ Gross QC/RF Wilkins Instructed by: Moroney Rutter and Mantach