BORIBO PTY LTD vy MUNDY SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, HANDLEY and Cripps JJA 17 March 1993, 2 April 1993 [1993] NSWCA 31 WORKERS COMPENSATION — LUMP SUM FOR' PERMANENT IMPAIRMENT- INTEREST. WORKERS COMPENSATION — lump sum for permanent impairment — whether proper percentage applied to most extreme case. WORKERS COMPENSATION — lump sum for pain and suffering — whether excessive. INTEREST The Judge found that the worker had suffered a permanent impairment of his back equivalent to 15 per cent "within the range 0 to 60 per cent", and awarded the worker 15 per cent of the maximum sum of $85,200 then available under s66(1) of the Workers Compensation Act 1987. The employer argued that consistently with his findings of fact, the Judge should only have awarded 15 per cent of the maximum of 60 per cent available in a most extreme case of back impairment. The employer also argued that the compensation awarded under s67 for pain and suffering was excessive. On appeal from the Compensation Court (1) (Mahoney and Handley JJA) On the basis of his findings the Judge made no error in awarding 15 per cent of $85,200. Per Cripps JA (dissenting) The award was for only 15 per cent and not 25 per cent impairment of the back. (2) The award under s67 for pain and suffering was not so disproportionate to the nature and consequences of the injuries as to be beyond the range of the exercise of a sound discretion. Moran v Moran (1985) 3 NSWLR 700 referred to. ORDERS 1. Set aside 0.4 made by Judge Manser and in lieu thereof order that interest be paid on the compensation for past pain and suffering from the date of injury to the date of judgment at half the rate prescribed by the Rules of Court. 2. Otherwise appeal dismissed with costs. Mahoney JA I have had the advantage of reading the judgment of Handley JA. I adopt his Honour's statement of the facts and of the issues. The learned trial judge made two relevant awards: one under s66 of the Workers Compensation Act 1987 and the other under s67 of that Act. Each of these is in question. In addition, his Honour awarded interest. The court is asked by the parties to deal by consent with the lastmentioned matter. I agree with what in that regard has been proposed by Handley JA. 1. S66 AWARD: In February 1989 the worker suffered an injury which, his Honour found, resulted in a disc lesion. The learned judge awarded him compensation "of 15 per cent of the maximum sum prescribed under s66(1) at the date of the injury, February 1989". At that date, the maximum amount was $85,000. The judge's award was therefore $12,780 and that amount is set forth in the award ultimately settled and forwarded to the parties. Two questions have arisen: what was the effect of what the learned judge did; and whether what he did involved error open for correction upon an appeal to this Court by way of rehearing. 2 UNREPORTED JUDGMENTS In my opinion, the judge awarded the worker 15 per cent of the maximum amount which, under s66(1), could be awarded to him. As Handley JA has pointed out, the effect of, inter alia, s66 and s73 is that a maximum amount is established for s66 injuries; in respect of the various classes of injury, the maximum amount which may be awarded is stated as a percentage of that amount (in the case of a back injury of this kind, it is 60 per cent); and, when the court quantifies the s66 award in a particular case, it is to determine the relationship between the particular injury and "a most serious case" of that kind of injury. It then awards an amount assessed accordingly. The present case was decided before the publication of the decision of this Court in Jones Bros Bus Company Pty Ltd v Baker (1992) 26 NSWLR 322. It is therefore, I think, understandable that the learned judge stated the matter as he did. But it is clear that what he intended to award was 15 per cent of $85,000. The sum specified in the award $12,780 is 15 per cent of $85,000. It was submitted by Mr Hulme QC for the employer company that, if this was what the judge did, it should be set aside. Mr Hulme's submissions involved at least two things: that on the evidence, the finding that the injury caused permanent impairment of the worker's back equivalent to 15 per cent was wrong; and that the judge's stated reasoning was such that his reasons did not support a finding of 15 per cent impairment. On the evidence it was, in my opinion, open to the judge to find that the permanent impairment of the worker's back was of the order of 15 per cent. The argument for the appellant was broadly along the following lines. It was suggested that the judge reached his assessment of impairment by reference inter alia to three things: two medical reports and his own judgment of the worker's condition as appearing from the evidence given before him. It was suggested for the employer that the medical reports could not justify the conclusion that the degree of impairment was as found by the judge. It was said that the medical reports suggested an objective degree of impairment of 15 per cent or 24 per cent. The award which the judge made, $12,780, represented a finding of objective impairment of the order of 24 per cent. And, the suggestion was, the evidence did not support a finding of objective impairment of 24 per cent. In order to understand these suggestions, it is necessary to draw out the implications which, as it was suggested, arise from the evidence. First, it may be accepted that the judge's award of $12,780 and what he said in relation to it indicated that he thought there was a degree of objective impairment of the worker's back of the order of 24 per cent or thereabouts. This is because an award of $12,780 is of the order of 25 per cent of the maximum award in respect of such a back injury, viz, 60 per cent of $85,000, namely $51,000. This may be accepted. It was then suggested that a finding of 24 or 25 per cent objective impairment could not be justified. The maximum impairment referred to in the medical reports was, it was suggested, 24 per cent but this was to be reduced because the worker's condition had been exacerbated between the injury (February 1989) and the date of medical examination and/or trial by reason of his doing excessively heavy work. Ido not think that this suggestion should be accepted. The judge was conscious that, in the end, s66 requires that the court make "a subjective assessment" of the extent of the worker's injuries and that that assessment be "based upon all of the evidence whilst paying due deference to the assessments of medical practitioners". Mr Harrington, for the worker, informed the court that in his experience it was not unusual for a judge of the Compensation Court to arrive at URJ BORIBO PTY LTD v MUNDY (Handley JA) 3 a degree of objective impairment beyond that adopted by medical witnesses and to do this upon the basis of the judge's own understanding of the worker's evidence before him. I think that that is what the judge did in this case. I would not infer from what he said that he misunderstood what s66 required him to do or the extent to which he could go beyond the medical assessments in evidence before him. Reference has been made to the fact that the judge's judgment was published before the examination of s66 by this Court in Jones Bros Bus Company Pty Ltd v Baker. That may explain why the learned judge expressed the degree of permanent impairment as 15 per cent and dealt with it as he did. But I do not see in what his Honour said error in the conclusion of fact to which in this regard he arrived. Mr Hulme's argument suggested or implied that the reasoning followed by the learned judge, as set out in his judgment, was such as to warrant the inference that his conclusions were not supported by the findings he made. It may be that, in dealing with s66, the learned judge made reference to facts relevant, or more particularly relevant, to issues under s67 and the extent of the pain suffered by the worker. A judgment need not be an orderly and strictly logical progression of the argument from its opening statement to its conclusion. I do not criticise the present judgment in this regard. I do not think that it indicates such misunderstanding as warrants the setting aside of conclusions of fact of this kind. I would not differ from this part of the judge's award. 2. S67 AWARD: The learned judge awarded $14,200 in respect of pain and suffering. He did this upon the basis that the worker's pain and suffering was such as to be "one third of the maximum amount prescribed under s67 at the time of his injury". Mr Hulme QC submitted that the facts did not warrant such a finding. He submitted that the section requires such an award to be a proper proportion of the "most extreme case" and that the evidence did not establish the worker's condition to be such. It is not necessary for present purposes to attempt to quantify the nature of "a most extreme case" of this kind. The learned judge saw the worker in evidence and had a description of the pain and suffering which had resulted from the injury. He took into account the worker's preinjury condition. The nature of the injury and its consequences have been referred to in the judgment of Handley JA. The worker's condition was described in terms such as "a lot of pain', "his right leg aches and pains all the time", "he has never been free of pain in his back since April 1991" and "his back has been getting worse and worse - it has mainly affected his leg now". The effect of the pain upon the worker was, his Honour could find, considerable. I would not differ from such an assessment. I see no appealable error in this portion of the award. I therefore agree with the orders proposed by Handley JA. Handley JA This is an appeal by the employer from awards of workers compensation made by Manser CCJ. The proceedings were commenced after the 1989 amendment to s32 of the Compensation Court Act and accordingly the appeal lies on issues of fact as well as law. The worker injured his back at work on | February 1989 and there was no dispute at the trial about his employment or injury. The Judge found that the worker had been partially incapacitated at all times since June 1989 and this finding was not challenged. The notice of appeal attacked his Honour's awards of compensation for partial incapacity under s40 but these grounds were abandoned prior to the hearing. In the result the appeal 4 UNREPORTED JUDGMENTS as argued challenged his Honour's awards under s66 for permanent impairment of the worker's back, under s67 for pain and suffering and the consequential awards of interest. S66 The Judge found that prior to his injury the worker was suffering from degenerative changes in his lumbar spine and had a history of back problems which had caused some disability and required him to consult chiropractors or physiotherapists from time to time. He was employed in the building industry and on the day he was injured was engaged in heavy lifting work when he experienced severe pain in his low back. He was semi paralysed, and stuck in a bent position for some time. As soon as possible he was taken to hospital. About one or two weeks later he developed problems in his right leg involving aching and numbness. The Judge found that the worker had suffered an intervertebral disc lesion which caused the symptoms in his lower back and right leg. The worker was off work until June 1989 when he commenced employment in the timber industry felling trees and preparing pit props. The Judge found that this work was arduous and at times extremely so, and as a result the worker's condition had worsened. Dr McKee reporting in December 1990 was of the view that the worker had suffered a fifteen per cent permanent loss of efficient use of his back but the doctor was not then aware that the worker had suffered a disc lesion. In September 1991 a medical panel assessed the permanent impairment of the worker's back as twenty five per cent of the total loss thereof, but this assessment was not binding on the trial Judge. See Jones Bros Bus Co Pty Ltd v Baker (1992) 26 NSWLR 322 at 337 B-C, 342 C-D. His Honour's findings and conclusion were as follows:- "\.. itis necessary for me to take account of the likely affects of the work which the worker has been performing since June 1989. It is of course difficult to find objective criteria by which one can confidently come to an assessment of a percentage impairment because it is notorious that symptoms and signs tend to fluctuate in conditions such as this... I think as the section and notes require the Court must come to a subjective assessment based upon all of the evidence whilst paying due deference to the assessments of medical practitioners. It seems to me that the worker has laboured under the affliction of his disc lesion from February 1989 and that is the primary condition which causes his impairment. However one cannot, with the application of commonsense and some experience in this tribunal, ignore the fact that the worker has performed arduous work over a considerable period with the likelihood that that work has affected his condition. Allowing for all of these circumstances it seems to me that the worker has in all probability suffered a permanent impairment of his back equivalent to fifteen per cent. That is to say fifteen per cent within the range of 0 to 60%, bearing in mind that the top of the range is reserved for a most extreme case. That would of course on the view that I take of the task required of the Court under s66 and particularly note (a) to the Table, result in compensation to him of fifteen per cent of the maximum amount prescribed under s66(1) at the date of the injury, February 1989." The appellant's first submission was that the Judge had found that the worker had suffered "a permanent impairment of his back equivalent to fifteen per cent" meaning a loss of fifteen per cent of the uninjured capacity of his back. On this basis the Judge would have erred in then awarding fifteen per cent of the URJ BORIBO PTY LTD v MUNDY (Handley JA) 5 maximum compensation allowable under s66. However in my opinion his Honour committed no such error. S66(1) in force at the time of the injury provided:- "A worker who has suffered the loss of a thing mentioned in the Table to this Division as the result of an injury is entitled to receive from the worker's employer by way of compensation for the loss, in addition to any other compensation under this Act, the amount equal to the percentage of $85,200 set out opposite to that loss in that Table". The Table at the end of the Division provided so far as relevant: - "Permanent impairment of the back... 0 - 60". Note (a) to the Table reads: - "Where a range of percentages is provided by the Table, the maximum percentage is payable only in a most extreme case and the percentage payable in any other case shall be reasonably proportionate to that maximum percentage having regard to the severity of the matter..." The range 0 - 60% in respect of permanent impairment of the back is a percentage of the sum of $85, 200 then applicable under s66(1). His Honour awarded fifteen per cent of the $85, 200, this being twenty five per cent of the maximum of sixty per cent available in a most extreme case of back impairment. The appellant submitted that consistently with his findings his Honour should only have awarded nine per cent of the total, this being the result of the following calculation: - 15/100 x 60 = 9. In my opinion his Honour made neither a slip nor an error of law in awarding fifteen per cent of $85, 200 on the basis of his fin Having found that the worker had suffered a permanent impairment of his back "equivalent to fifteen per cent" he proceeded to explain exactly what he meant by adding "that is to say fifteen per cent within the range of 0 to 60 per cent" and then saying "it would... result in compensation to him of fifteen per cent of the maximum amount". It is clear that the Judge found that the worker's back impairment was equivalent to 15 units of incapacity out of ("within") a notional maximum of sixty such units (15 of 60) and not that percentage "of" such maximum. (15/100 x 60) In my judgment therefore the appeal on this part of the award fails. S67 The worker's entitlement to lump sum compensation under s66 equal to fifteen per cent of the maximum satisfied the threshhold in s67(2) and entitled the worker to compensation for pain and suffering. The Judge's findings on this issue were as follows:- "There is no doubt that this man has suffered considerable pain in the past as a consequence of the injury that he suffered in February 1989. But a good deal of his pain must necessarily result from the work that he is performing at the present time... He was born on 18 July 1951, so that he is still a relatively young man. It seems to me that an appropriate amount for him and I compare him... with a most extreme cast, to fall at about the one third mark. The result is that he is entitled to one third of the maximum amount prescribed under 867..." The appellant challenged this award. Mr Hulme QC for the appellant supplied the Court with a comprehensive schedule of the relevant evidence of the worker and the doctors on this issue and I have carefully considered this material. The question for this Court is whether the compensation awarded for pain and suffering was so excessive as to be beyond the limits of a sound discretionary judgment or, what amounts to the same thing, was so disproportionate to the 6 UNREPORTED JUDGMENTS nature and consequences of the injuries received as to go beyond the range of the exercise of a sound discretion. See Moran v McMahon (1985) 3 NSWLR 700 at 718-723. The trial Judge saw and heard the plaintiff and there was no challenge to his primary findings. Given those findings, the areas affected by the pain, the worker's back and right leg, the arduous nature of his employment and his age, I have not been persuaded that the award was so disproportionate as to warrant the intervention of this Court. INTEREST The parties were agreed that the trial Judge erred in awarding interest at the full rate on the compensation awarded for past pain and suffering for the full period up to judgment. That pain and suffering was experienced progressively from the date of injury onwards and it is necessary to mould the award of interest to reflect this. Courts normally do this either by awarding interest on the past component at the appropriate rate for half the period or at half the appropriate rate for the full period. See Metropolitan Meat Industry Board v Williams (1991) 24 NSWLR 54. On this basis the parties agreed that the award for interest should be reduced by $1727.00. In my opinion, subject to the agreed variation, the appeal should be dismissed. The Court should make the following orders:- 1. Set aside O.4 made by Judge Manser and in lieu thereof order that interest be paid on the compensation for past pain and suffering from the date of injury to the date of judgment at half the rate prescribed by the Rules of Court. 2. Otherwise appeal dismissed with costs. Cripps JA I agree that for the reasons given by Handley JA that the ground of appeal against the award under s67 should be rejected. I am of the opinion, however, that the ground of appeal under s66 should be upheld. Handley JA has set out the learned judge's findings and the relevant statutory provisions. As Handley JA observed, had the learned judge found a 15% permanent impairment of his back and awarded him 15% of the maximum compensation allowable under s66, he would have erred. In my opinion, that is what his Honour did. I cannot read his Honour's reasons as meaning that he found a 25% permanent impairment of the worker's back. He never said he did. The award was for $12,780 "in respect of 15% impairment of the applicant's back". Moreover, the learned judge referred to the assessment by the Medical Panel on 9 September 1991 that the permanent impairment of the worker's back was "25% of the total loss thereof'. The respondent was injured on | February 1989. Thereafter, as his Honour found, the respondent's back deteriorated. It was for that reason that Manser CCJ reduced the 25% found by the Medical Panel to 15%. I am of the opinion that Manser CCJ erred. Accordingly, I would uphold the ground of appeal against the award made pursuant to s66 of the Act. The parties have agreed that the award for interest should be reduced by $1727.00. It is not necessary for me to decide whether the matter should be remitted to the Compensation Court or whether this Court should vary the award. My disagreement with Handley JA is not on any question of principle. It is on my understanding of what Manser CCJ did. The majority is of the opinion that there was no error with respect to the sward under s66. That being so, the order suggested by Handley JA would appear appropriate. URJ BORIBO PTY LTD v MUNDY (Cripps JA) 7 1. Set aside O.4 made by Judge Manser and in lieu thereof order that interest be paid on the compensation for past pain and suffering from the date of injury to the date of judgment at half the rate prescribed by the Rules of Court. 5 2. Otherwise appeal dismissed with costs. Counsel for Appellant: RS HULME QC/J GLEESON Solicitors for Appellant: HICKSON LAKEMAN and HOLCOMBE 10 Counsel for Respondent: R I HARRINGTON Solicitors for Respondent: CARROLL and O'DEA