VIDESKI v AUSTRALIAN IRON and STEEL PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MEAGHER and Cripps JJA 17 February 1993, 17 June 1993 [1993] NSWCA 282 WORKERS' COMPENSATION — lump sum compensation — claim for permanent impairment of back and for pain and suffering — injury undisputed — worker in receipt of continuing weekly compensation — claim of permanent impairment of back contested — objective medical evidence supports degree of impairment — judge of Compensation Court (O'Toole CCJ) finds permanent impairment — awards $4,000 in respect thereof — appeal on issues of law and fact EVIDENCE — witness — demeanour of — approaching witness box — conduct in witness box — judge's observations of — where likely to influence decision — duty of judge to draw to attention of counsel JUDGES — reasons — necessity to state — obligation to explain grounds — relevance of seriousness of the decision for the rights and duties of the parties — extent of detail required — desirability of clear expression of statutory test to be applied — claim for lump sum compensation under s66 and s67 Workers Compensation Act 1987 — observations by members of the Court on the judicial duty to state reasons for decisions. ANTI DISCRIMINATION — racial discrimination — bias for cultural stereotypes — exaggeration of symptoms — responses of different cultures in a public courtroom in Australia — differing views of Kirby P and Meagher JA thereon. Held: (Cripps JA, Meagher JA concurring; Kirby P dissenting): (1) The judge's reasons adequately stated the grounds of her decision. Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (CA); Apps and Anor v Pilet (1987) 11 NSWLR 350 (CA); Offset Alpine Printing Pty Ltd v Porteous, Court of Appeal, unreported, 30 October 1992; (1992) NSWJB 115 applied; (2) Her reasons rested upon impressions of the worker as a witness which were permissible and involved no procedural unfairness. Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 (CA) applied; (3) Upon the basis of the findings the award was sustained. Offset Alpine Printing Pty Ltd v Porteous, Court of Appeal, unreported, 30 October 1992; (1992) NSWJB 115 discussed. Held: (by the Court): The conduct of a witness approaching the witness box, or in the witness box within sight of the parties or their representatives, could be relied upon by the judge and was not required to be drawn specifically to the notice of the parties before judgment was given. Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 (CA) applied. Workers' Compensation Act 1926, s11(1). Workers Compensation Act 1987, s40, s66, s67. Kirby P I regard this appeal as presenting a borderline case. As I approachit, the appeal concerns the accuracy and adequacy of the reasons provided by the learned judge of the Compensation Court (O'Toole CCJ) to support her award 2 UNREPORTED JUDGMENTS now under challenge. Other grounds of appeal have been raised. Some of these are without substance (as in the case of the complaint about the observance of fair procedures by her Honour in relying upon observations of the appellant said to have been undisclosed). Others are such as would not, alone, have been sufficient to demonstrate an error which would authorise this Court, on appeal, to disturb the award. I am in general agreement with the reasons of Cripps JA for his conclusions on these matters. In particular, I agree with Cripps JA that the reliance which O'Toole CCJ placed upon the inferences which she derived from the appearance of the worker as he approached and sat in the witness box was, by conventional theory, open to her. It involved no breach of procedural fairness, at least upon the understanding which I have of the conduct of the hearing. In every respect, gave for that dealt with below, that conduct appears to have been impeccable. Cf Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 (CA), 309f, 323. A claim for lump sum compensation is determined The facts are fully described by Cripps JA. Mr Ilija Videski (the worker), who is the appellant, recovered an award of $4,000 under s66 of the Workers Compensation Act 1987 (the Act). He did so, as the award shows, in respect of permanent impairment of his back. He challenges the correctness of the award, the process of reasoning by which it was arrived at and the reasons offered by the judge to justify it. O'Toole CCJ recounted the worker's injury; the "very proper" concession of Australian and Steel Pty Ltd (the employer) that the worker was incapacitated for work; and the fact that he was "presently in receipt of the full amount of weekly payments, payable pursuant to the Act". She recounted the denial by the employer of the worker's claim that he suffered permanent impairment of the back in terms of s66 of the Act, and its denial of his claim to a lump sump for pain and suffering pursuant to s67 of the Act. Her Honour's reasons set out the worker's claim at the trial, which was for the recovery of 70% of the maximum amount recoverable, as applicable at the relevant time in respect of impairment of the back. There is a small mathematical error in her Honour's reasons in this regard. Correctly, the worker took no point on this trivial mistake. The reasons then proceed to a description of the impression which O' Toole CCJ derived from the worker's appearance as he approached and sat in the witness box. She concluded this review with the statement: "\.. [have difficulty accepting the Applicant as a witness of credit. If I were wrong in that conclusion, aspects of the Applicant's presentation, viewed in the light of the balance of the evidence, cause me real difficulty, accepting him as an accurate historian." Nevertheless, as O'Toole CCJ then accurately acknowledged: "Some features of the Applicant's presentation diminish in significance because overall, there is a great deal of common ground in the medical evidence. The evidence seems to me to give rise to the inescapable conclusion that following the fall in November 1988, there was a material alteration in the pathological condition of the Applicant's back. " Her Honour next reviewed the main points of the medical reports tendered before her. As seems to be becoming more common, no oral medical evidence whatsoever was called. The judge then had to perform her statutory function by reference only to the medical reports and the impression which the worker made upon her, so far as this was relevant. In the circumstances, it is not entirely surprising that the evidence of the worker should URJ VIDESKI v AUSTRALIAN IRON and STEEL PTY LTD (Kirby P) 3 have loomed large in her Honour's mind. Communication with the mind of the decision maker in a trial (whether judicial officer, tribunal member or juror) is obviously affected by the forensic nature of the engagement. The cold print of medical reports will not always equate, in vividness and persuasive messages, with the oral communication of a live witness. Following the review of the evidence, her Honour reached what was to be the critical passage where her conclusion and award were stated. The passage is relatively brief: "The Respondent's counsel does not canvass the arithmetic [of the worker's claim for 70% impairment]... but asked me to conclude, from the whole of the evidence, that the Applicant's spine is not severely and permanently impaired. Because I have difficulty accepting the estimates of Dr Patrick and Dr Bannister (which are based, at least to a substantial extent upon acceptance of the Applicant as a credible witness) on the evidence before me, there is not a useful estimate, in percentage terms. Having to make an assessment which is, necessarily, somewhat imprecise and having to determine a figure, on the whole of the evidence, I propose making an award for the Applicant, pursuant to s66 in the sum of $4,000." The judicial obligation to state the reasons or grounds of decision Obviously, this was an important decision for the worker. Not only did it determine his claim for the lump sum under s66 of the Act. The award represented an amount less than one tenth of that which the worker had asserted. The determination also had the effect of disqualifying the worker from recovery under the Act of any compensation at all for pain and suffering pursuant to s67. This was because s67(2) of the Act excludes such compensation where the compensation paid under s66 for the losses there stated is less than 10% of the maximum amount referred to in s66(1). As the worker's complaint was not only of permanent impairment of his back, but also of considerable pain and suffering, it can be understood that the decision was a great disappointment to him. But was it wrong in a way which permits this Court to intervene? The applicable legal principles are: 1. It is the duty of a judge in this State, as an incident of the judicial process, to provide reasons for his or her decision. Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 (CA), 386; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (CA), 280; Public Service Board of New South Wales v Osmond (1986) 159 CLR 656, 666; 2. This duty does not oblige the judge to detail each and every step taken in the reasoning to the ultimate conclusion of the opinion. Some decisions will be so transparent, or will have no effect on the rights and duties involved in the litigation, so that they will not require reasons to be given. See eg Apps and Anor v Pilet (1987) 11 NSWLR 350 (CA), 356. In many cases the formal reasons given (if any) may need to be supplemented by the exchanges which have preceded them between the judicial officer concerned and the parties or their representatives. See eg Apps (above) at 353. Especially where (as here) the reasons followed ex tempore and immediately after the conclusion of argument, it is only proper to understand the reasons by reference to the issues for decision as they were tendered to the judge as revealed in the submissions of the parties; 3. The borderline between what must be disclosed as a "ground" or "reason" for a judicial decision and what need not be disclosed as a mere "step in the process of reasoning" involves self-evidently a matter of degree. Upon it views will differ, as they did in this Court in Soulemezis and in other cases before and 4 UNREPORTED JUDGMENTS since. The appellate judge tests the exposure of the reasoning under review against the standards which he or she expects of the judicial office. It is relevant to consider the seriousness of the decision and the effect it has on the rights and duties of the parties (see Apps, above). The extent of the duty in a particular case will also be affected by any seeming disharmony between the conclusion stated and the apparent strength or weakness of the case when measured against that conclusion; 4. Inevitably, the reasons which must be stated depend upon the issue to which they are directed. Where that issue is not susceptible to precise explanation or involves an inescapable element of judgment, a point will be reached where the judge exhausts the reasoning process and is left with little more than his or her statement of conclusion. This is so where the issue involves the application to facts of a vaguely worded, generally expressed criterion. Such is certainly the case of the criteria stated in s66 and s67 of the Act. So much was pointed out in Offset Alpine Printing Pty Ltd v Porteous, Court of Appeal, unreported, 30 October 1992; (1992) NSWJB 115; and 5. Where the process of reasoning by a judge depends, expressly or by necessary implication, upon findings which the judge has made concerning the credit worthiness of a witness, an appellate court is not, in the normal case, at liberty to substitute its decision upon those findings for that of the trial judge, for it does not see the witness(es). It can only substitute its opinion where the judge's conclusion demonstrably conflicts with incontrovertible facts or is otherwise glaringly improbable. See Abalos v Australian Postal Commission (1990) 171 CLR 167 and the cases there cited. This approach has been repeatedly endorsed by the High Court of Australia. See eg Baltic Shipping Co v Dillon (1993) 67 ALJR 228 (HC) at 240f; Devries v Australian National Railways Commission (1993) 67 ALJR 528 (HC) at 531. Objective strength of worker's case enhances expectation of reasons I now turn back to apply these principles to the present case. What gives the worker here an apparently strong position to complain about the adequacy of the award of compensation under s66 are the following considerations grounded in the evidence: 1. The happening of the injury in 1988 and the continuation of incapacitating symptoms flowing from it were not disputed by the employer when the trial was heard on 11 March 1991. As stated, the employer continued to pay weekly compensation (and so far as the Court knows, still does so). The worker had commenced employment with the employer in 1980. He had worked for no other employer since arriving in Australia. He had progressed to be a leading hand. His work, as may be imagined, involved heavy lifting, a lot of walking and frequent bending. He made no relevant complaint about his back until the subject injury; 2. Although disputed by the employer, the judge found that there was in fact permanent impairment of the worker s back. This finding was fully supported by the evidence; 3. Although the judge discounted the worker's credit, as she acknowledged there was a large measure of agreement which meant that the case was not wholly dependent upon the testimony of the worker, still less of the impression he made on the trial judge; 4. Many cases concerned with claims of back pain and disability involve (as the common experience of this Court and the Compensation Court shows) little more than the complaint of the worker. In such cases, the impression of his or her truth telling may be vital. But in this case, there were numerous objective URJ VIDESKI v AUSTRALIAN IRON and STEEL PTY LTD (Kirby P) 5 indications that the worker's complaints had a physiological basis, were genuine and, upon one view, serious or potentially so. The evidence to which I refer included: (a) ACT scan performed on 14 November 1988 by Dr LR Stevenson which was in evidence. This was done from L2 to S1 level. At L4/5 level there was a "small lateral protrusion of the disc on the right side into the neural exit foramen where disc material is seen abutting against the right L4 nerve root as it emerges from the foramen. It is not possible to exclude compression of the right L4 nerve root... At L5/S1 level there is a rather prominent broad based posterior disc protrusion which is producing mild to moderate indentation on the anterior aspect of the thecal sac though no compression of the existing LS nerve roots seen and there is no obvious compression of the S1 nerve roots in the upper sacral spinal canal"; (b) An electrophysiological examination by way of EMG and nerve conduction studies was performed on 13 March 1990 by Dr WG Shepherd. This found that there was "no spontaneous fibrillation" in the right and left tibialis anterior. Based upon this finding Dr Shepherd commented "There is electrophysiological evidence of a partial L(4)5, S1/2 root irritation"; (c) Dr D Cullum on 3 February 1990 at the Sydney Thermography Centre undertook lower body thermographic assessment. This found "mild cooling in the right buttock consistent with referred pain. Leg views are relatively symmetrical... The appearances of the buttocks however are mildly abnormal"; (d) Dr NG Dan on 15 March 1989 found that the left hip appeared to dip on doing Trendelenberg's test. "Sensation was diminished to pinprick on the right but most markedly in an LS distribution. The right knee jerk was slightly less brisk than the left"; (e) Dr J Bannister, the worker's orthopaedic surgeon, found in March 1990 "marked flattening of the lumbar spine"; and (e) Dr WGD Patrick, surgeon, made similar findings. Need to avoid stereotyped expectations of witness box understatement Against this background of substantially objective evidentiary material, and the recognition, expressed by her Honour that this reflected "a great deal of common ground in the medical evidence", it is surprising that O'Toole CCJ should have placed quite so much confidence in her own capacity to assess the worker's "permanent impairment" upon the basis of her brief observations of him as a witness over the space of an hour or so during the conduct of the hearing. With respect, it would have been rather safer, as it seems to me, to place greater reliance on the objective evidence set out above, gathered over a long period of time and supported by the worker's treating doctors. In our tradition, at least until now, understatement, a stiff upper lip and uncomplaining heroism in the bearing of the pains and misfortunes of life are conventionally regarded with admiration. Judges of our tradition may be tempted to think the better of those stalwart characters who underestimate their complaints. Who can deny that this occurs? Everyone involved in trials knows of the phenomenon. It is these people who tend to excite - even unconsciously - our respect, sympathy and support. There is, on the other hand, a tendency to feel impatience with those who are believed to exaggerate their symptoms or to make the most of them in the courtroom. In our multicultural society it is imperative that judicial officers should avoid expecting from people of different cultural traditions the same emotional imperatives that have, until now, tended to influence Australian values. For all I 6 UNREPORTED JUDGMENTS know, the behaviour in court of this worker, which seems to have struck her Honour as "exaggerated" or "distorted", would be perfectly normal for a claimant with back pain appearing in a Macedonian courtroom. Perhaps there it would be considered perfectly natural for a person, facing his or her decision maker, to lay emphasis upon the matters of which that person is complaining. This is not (as Meagher JA would have it) to "deviate from the paths of honesty. It is to make discomfort known and not to mask or disguise it because that is thought strategically wise in an Australian courtroom. Perhaps in Macedonia the brave understatement of one's own case would be regarded as a bizarre psychological manipulation of the contra suggestible kind which one would only expect from foreigners. This is speculation. I only mention it to emphasise that we, the Australian judges of today, must be on our guard against the imposition of behaviourial stereotypes. I reject utterly the contention that this is itself a stereotype. Human conduct is infinitely variable. But it is certainly influenced by cultural norms. What is in issue here is not the honesty of people of Macedonian origin, like the appellant, who may or may not be the epigoni of Alexander the Great. It is the awareness on the part of Australian judges that people from different cultures may not immediately succumb to the heroic norms of our culture when they come into our courtrooms. Cf New South Wales Bar Association v Jetnikoff, Court of Appeal, unreported, 18 December 1992. To blow this up, as Meagher JA attempts, to a suggested xenophobia and even racial discrimination on my part is self evidently absurd. However, I shall allow his Honour's comments to pass taking compensatory comfort from the new found interest of Meagher JA in the international instruments of human rights and their application to Australian domestic law. See Mabo v Queensland (1992) 175 CLR 1 at 42. Enough has now been said to indicate why, on the face of things, the very small assessment made by her Honour seems quite disharmonious with the overwhelming thrust of the objective evidence taken before her. The worker's appeal comes to this Court as a full appeal on fact and law. It is not confined, as so many earlier cases invoking inadequacy of reasons were, to a point of law. Rightly, the employer abandoned a contention that the worker needed leave to appeal. The issue at stake more than qualifies the case for the review of the factual findings of O'Toole CCJ. Were we effectively excluded from a useful review of those findings by the line of authority collected in Abalos v Australian Postal Commission (1990) 171 CLR 167, that might be a sufficient answer to the complaint about the quantification of the assessment of the amount awarded. It would not, of course, meet the complaint that her Honour failed sufficiently or adequately to state her reasons by which she reached the amount awarded. The defects in the reasons stated by the trial judge In considering whether the reasons given adequately state the grounds for her Honour's award, as the law requires, it cannot be denied that the rights of the worker, and the duties of the employer, were at stake. Substantive rights and not mere procedural questions were in issue. The worker appeared, on the objective facts, to have a strong case for a more substantial award. That did not give him a right to have the judge accept his case. By no means. But it did give him a basis to expect, under our system of justice, that the essential reasoning of the judge to her conclusion would be exposed so that he, his advisers representing him and this Court reviewing the decision, could understand the rather small award which was then URJ VIDESKI v AUSTRALIAN IRON and STEEL PTY LTD (Kirby P) 7 entered. Equally essential was it that the reasons should make it plain that the correct questions were asked and that the applicable legal tests were accurately applied to the facts, as found. There is no statement in O' Toole CCJ s reasons of the applicable statutory tests laid down by s66 of the Act. Indeed, the section itself is never mentioned until the final award sum is provided. If the section, the Table annexed to it and the note to that Table provided simple statutory criteria, these omissions might be understandable. But the statutory provisions are far from simple, as decisions of this Court have shown. See eg Jones Bros Bus Company Pty Ltd v Baker (1992) 26 NSWLR 322 (CA) and Porteous (above). It is not to be thought that such an experienced judge would be ignorant of the section or of its complexities. Nor is the mere incantation of the section or the reproduction, tediously, of its terms a prerequisite to passing the test of adequate reasons. On the other hand, the Court has made the point many times, in the context of s11(1) of the Workers' Compensation Act 1926 and s40 of the Workers Compensation Act 1987 that the statement of the applicable statutory formula, at least in its essential respects, will often be a useful corrective to ensure that the judicial mind, at the point of decision making, focuses precisely upon the issue which is relevant. See eg Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 (CA) 538-541; Australian Wire Industries Pty Ltd v Nicholson, Court of Appeal, unreported, 4 February 1985, at 4, 8f (McHugh JA) and at 12 (myself); Kesen v Luke Singer Pty Ltd (1989) 18 NSWLR 566 (CA) and O'Loughlin v The Zinc Corporation Ltd, Court of Appeal, unreported, 21 December 1989, at 1. The foregoing cases show that what is essential is not the reproduction of the terms of the statute, or even a paraphrase of its obligations. It is a clear indication, from the reasons given by the judge, that he or she has accurately addressed attention to the correct statutory question. It will not lightly be assumed that an experienced judge has failed to do so. But the clearest way in which such a judge can indicate that what is required has been done is in the chief vehicle by which that information is normally conveyed to the appellate court, the disappointed party and the legal representatives: in the written reasons which the judicial process requires from the judge to support the conclusion. Once the legal process went beyond the jury verdict to the decision of a judge, a qualitative change occurred. It requires (at least in a case such as the present) reasons which sufficiently convince the reasonable mind that the decision in question is well founded in law and in fact. With every respect to O'Toole CCJ, I have come to the conclusion that this cannot be said in the instant case. In fact, the conclusion looks more like the verdict of a jury. It takes on that feature from: 1. The perfectly rounded nature of the sum awarded; 2. The absence of any findings as to the extent of the permanent impairment of the worker's back; 3. The failure to assign the percentage of the case on the scale of 0-60 at which the worker was to be placed; 4. The absence of any indication of consideration of reasonable proportionality as required by note (a) to the Table; and 5. The absence of any mention of consideration of the "severity of the matter", as the note also requires. Tam left with a sense of disquiet that the sum was arrived at, not as the result of the steps required by s66 of the Act, the Table and note (a), but as a figure that seemed just to her Honour in all the circumstances. This is not the way that the 8 UNREPORTED JUDGMENTS statute authorises the judge to proceed. To ensure conformity with the statute, it is necessary for the judge manifestly to take seriatim, the steps which the statute mandates. Further, to the extent that there are clues to the essential reasoning of O' Toole CCJ to her conclusion, they seem to suggest that her Honour took into account at least two irrelevant matters. The first of these involved reference to the impairment of the worker's "spine". The Table, it will be remembered, is concerned not with the spine but with the "back". This includes more than the spinal bone and column. I have no doubt that, in this regard, her Honour was misled by the submissions of the parties and by the medical reports which were likewise expressed in terms of the "spine". But it meant that her mind was directed at the critical moment to a consideration which was too narrow, given the terms of the Table. The second consideration was the attention given to a telescoped phrase "severely and permanently impaired". The "permanent impairment" in issue is that referred to in the Table, viz "Permanent impairment of the back". "Severity", so far as it is referred to in the Act, is not an additional adjective for the "impairment of the back". It is only a criterion in the calculation of proportionality. In the terms of note (a) to the Table, it requires the decision maker to have regard "to the severity of the matter". Conclusion: award set aside; matter remitted I therefore conclude that the award cannot stand. There is a want of adequate reasons to sustain it. Some of the reasons actually given undermine or cast doubt on the award's validity. This Court is not in a position to determine the proper compensation payable to the worker. Although to a lesser extent than O' Toole CCJ was apparently inclined to think, the impression of the complaints of the worker would be relevant to the determination of "the severity of the matter". The Court has not seen the worker. It cannot therefore judge that component of the calculation. The matter must accordingly be returned to the Compensation Court for consideration. It would be no misfortune if, in the redetermination, the worker were to consent to the course which the employer suggested at the outset of the proceedings before O'Toole CCJ. This was that the assessment be referred to a Medical Panel. At the trial, the worker elected for judicial determination of his entitlement as is his right, as note (a) to the Table (amongst other things) makes plain. Judicial determination has the disadvantage of delay and a degree of uncertainty in the outcome. But it has the great merit of a public hearing and of a reasoned decision which can be reviewed, as in this case, on appeal. That review results, in the view I take, in the setting aside of the award which was entered. Doubtless that is an expensive inconvenience to the parties. But it vindicates the process of reasoned justice and manifestly correct decisions which are the hallmarks of our legal tradition. People who have come to this country from Macedonia and other lands, like people present in this country of whatever origin, are entitled to leave the courts with judicial reasons which explain such determinations and adequately display the grounds that support them. Orders As that did not occur here, the orders which I would favour are: 1. Appeal allowed; 2. Set aside the award of her Honour Judge O'Toole dated 11 March 1991; URJ VIDESKI v AUSTRALIAN IRON and STEEL PTY LTD (Cripps JA) 9 3. Order that the application by the appellant Ilija Videski for compensation under s66 and s67 of the Workers Compensation Act 1987 be returned to the Compensation Court of New South Wales for determination conformably with the judgment of this Court; and 4. The respondent to pay the appellant's costs of the appeal. The costs in the Compensation Court to abide the orders of that Court. Meagher JA In this matter I have read the draft judgments of Kirby P and Cripps JA. I agree entirely with the latter. It follows I disagree with the former. In normal circumstances that is all which need be said. However, there is one aspect of Kirby P's judgment which is so extraordinary that it requires comment. The trial judge found that Mr Videski exaggerated when he gave his evidence. On this slender, and one would have thought unexceptionable observation, his Honour develops an elaborate, and distinctly xenophobic, rodomontade. His Honour says that Mr Videski only exaggerated because he was a Macedonian, all Macedonians are untrustworthy exaggerators, in this respect they do not resemble Anglo Saxons, and judges ought be reeducated unless they appreciate these truths. One cannot permit such sentiments to be uttered without protest. Alexander the Great was a Macedonian, and Arrian's Life of him emphasized his honesty and taciturnity. There was no evidence before the Court that his epigoni have changed. We cannot assume that they have. On the face of it they are not the only people who have exaggerated when giving testimony. Occasionally people of undoubted Anglo Saxon stock do so. I should have thought that an unfortunate propensity to deviate from the paths of honesty is something which occurs regardless of ethnicity. Judges are capable of dealing with it wherever it occurs, and from whatever source. It would be unfortunate if his Honour were permitted to utter, with the apparent approval of his brethren, sentiments so markedly at variance with the United Nations' Optional Protocol on Human Rights, not to mention Article 5 of the International Convention on the Elimination of All Forms of Racial Discrimination. Cripps JA This is an appeal against the decision of Judge O'Toole of the Compensation Court sitting at Wollongong awarding Mr Videski (the appellant worker) $4,000 as lump sum compensation for permanent impairment of his back pursuant to s66 of the Workers ComPensation Act 1987 (the Act) and rejecting his claim for compensation for pain and suffering pursuant to s67 of the Act. Mr Videski claimed 70% permanent impairment of his back. That would have entitled him to a lump sum payment pursuant to s66 of the Act of $35,784 (being 70% of 60% of the maximum entitlement at the relevant time set out in the Table to Division 4 of Pt3 of the Act (see Jones Bros Bus Co Pty Ltd v Baker (1992) 26 NSWLR 322). He also claimed an entitlement under s67 of the Act. S67(2) provides that compensation for pain and suffering is not payable if the compensation paid or payable under s66 for the losses referred to is less than 10% of the maximum amount from time to time referred to in s66(1). O' Toole CCJ awarded Mr Videski $4,000 pursuant to s66 which was less than 10% of the maximum amount in s66(1) at the relevant time. Accordingly, she awarded no compensation pursuant to s67 of the Act. At the time of his injury, Mr Videski was a fitter employed by Australian Iron and Steel Pty Ltd (AI and S). He was injured when he slipped on the kerb outside his home on his way to work. He saw his local GP, Dr Marinovic, and was absent from work until March 1989. He was referred to Dr Maloney and later to Dr Dan. 10 UNREPORTED JUDGMENTS He returned to work in March 1989 on light duties, and not long afterwards, to normal duties. Later in the year he had a few more weeks off work because of his back. From November 1989 until February 1990 he was at work. On 10 February 1990 Dr Bannister, to whom he had been referred by Dr Marinovic, admitted him to hospital for manipulation. He was discharged on 18 April 1990. He has not returned to work since. Mr Videski told O'Toole CCJ that for twelve months before March 1991 he was in continual pain. He described it as ranging from "little pain all the time" to "very painful" to "agony". He said he could not sleep, had headaches at least every two or three days and had difficulty walking and sitting for prolonged periods. It is clear from a reading of the transcript that Mr Videski's claim for impairment of his back was based upon his assertions of debilitating pain. His evidence was challenged by AI and S. It was put to him that he exaggerated his condition in court and was less than truthful to the doctors who had examined him. A number of medical reports were tendered but no doctors were called to give oral evidence. Mr Videski's counsel tendered reports from Dr Marinovic, Dr Maloney, Dr Dan and Dr Bannister. He also tendered a report from Dr Patrick who, I infer, was qualified to give evidence as an expert. The result of a CT scan performed by Dr Stevenson was tendered which relevantly read: "At L4/5 level there is a small lateral protrusion of the disc on the right side into the neural exit foramen where disc material is seen abutting against the right L4 nerve root as it emerges from the foramen. It is not possible to exclude compression of the right L4 nerve root." He also tendered what was described as an "EMG and Nerve Conduction Study" which revealed: "There is electrophysiological evidence of a partial L(4)5, S1/2 root irritation." Before turning to the grounds of appeal, there are two observations I would make. First, there was objective clinical evidence of "a defect of Mr Videski's spine". Second, Mr Videski's complaints of pain and restriction of movement appeared to be viewed suspiciously by some doctors, including Dr Maloney and some doctors thought that his complaints of pain were inconsistent with observed ease of movement. Furthermore, some doctors noted that Mr Videski's complaints of pain appeared to be inconsistent with his ease of movement and he was not as badly affected as he claimed. O'Toole CCJ did not believe Mr Videski's evidence in material and relevant respects. She said she had "difficulty accepting (him) as a witness of credit". She said she understood how some of the doctors were able to express the opinions referred to above. O'Toole CCJ's acceptance of Mr Videski's claim depended upon her acceptance of his truthfulness and accuracy. She made it plain she had difficulty believing him. Further, she said, in terms, she had reservations about the opinions of Dr Bannister, much relied on by Mr Videski. Her conclusions concerning Mr Videski proceeded from his demeanour in the witness box and her observations of his movements when entering and while in the witness box. For example she said: "The Applicant approached the witness' box by awkwardly rising from his seat, in an exaggerated manner, whilst holding his back with one of his arms. He then walked slowly and awkwardly to the witness' box, sat on one buttock and turned in an awkward manner. As the examination in chief progressed, he sat normally, comfortably and in a relaxed manner. When he rose to give a demonstration, he again made awkward and elaborate movements but whilst standing, he appeared to be relaxed and moved URJ VIDESKI v AUSTRALIAN IRON and STEEL PTY LTD (Cripps JA) 11 his upper body in an apparently normal and unremarkable manner. I gained the impression that the Applicant's contorted posture, at intervals during cross examination, could have caused discomfort, sitting in the witness's box. When the Applicant was alert and closely following either English questions or the interpreter's rendition, he appeared to be comfortable. The Applicant easily removed his jacket: that contrasts with observations made by medical practitioners, on clinical examination." O'Toole CCJ found that, as a result of the injury, Mr Videski had a permanent impairment of his back. That finding proceeded, almost entirely I think, from her acceptance of the objective clinical findings referred to above. However, as I have mentioned, she did not accept that the impairment was as bad, or anything like as bad, as Mr Videski claimed. In his amended grounds of appeal, Mr Videski alleges six grounds of error as follows: "1. Her Honour erred in assessing the amount of compensation payable to the appellant pursuant to s66 of the Workers Compensation Act, 1987 (hereinafter referred to as "the Act') in that Her Honour determined the said amount by reference to an assessment of the percentage of permanent impairment of the back and/or Her Honour failed to determine the said amount in accordance with s66 of the Act and the Table to Pt3 Division 4 of the Act and, in particular, in accordance with note (a) to the said Table. 2. Further, or in the alternative, Her Honour failed to sufficiently or adequately state reasons upon which the amount of $4,000 awarded as compensation was determined upon the findings that were made. 3. Her Honour erred in failing to inform Counsel for the parties of observations of the Appellant that made by Her Honour in the courtroom out of the observation of Counsel, and as the Appellant approach the witness box, during the course of his evidence and/or Her Honour failed to afford to Counsel the opportunity of answering or dealing with the matters observed by Her Honour. 4. Her Honour's determination of the amount compensation payable pursuant to s66 of the Act was inadequate on the findings made. 5. Her Honour erred in finding that the Appellant's back was not severely and permanently disabled and Her Honour ought to have found that the appellant had a severe and permanent impairment of the back. 6. Her Honour erred in not finding the Appellant was entitled to a payment of ten per cent of the maximum amount payable under the said Table, or more, and therefore also erred in failing to consider the claim of the Applicant pursuant to s67 of the Act." Until 1989 appeals from the Compensation Court were limited to questions of law. Now, subject to certain exceptions, there is a full appeal to the Court of Appeal. Leave must be obtained if the appeal involves neither a point of law [or] the admission or rejection of any evidence nor compensation amounting to $10,000 or more. Mr Videski did not seek leave to appeal. However, Mr Hislop QC, for AI and S, has not submitted that the appeal, or any aspect of it, is incompetent. The first ground of appeal appears to be an attempt to advance again an argument recently rejected by this Court in Jones Bros Bus Co Pty Ltd v Baker (1992) 26 NSWLR 322. Prior to Jones Bros, there were, apparently, two views held among the Compensation Court Judges concerning the approach required to be taken by a judge when calculating compensation payable under s66(1) for a percentage "impairment of the back" where the case fell short of a "most extreme 12 UNREPORTED JUDGMENTS case". They were referred to as a one step and a two step approach. The two step approach, introduced what was called a "subjective element" into the assessment. At 332, Kirby P (with whom the Chief Justice agreed) said: "It is in this context that Note (a) at the foot of the Table must be seen, in impairment cases, as the legislative equivalent to the proportional calculation of entitlement performed in loss cases by s68. It is not surprising that the marginal Note to s68 refers to 'proportionate loss of use'. This was also the purpose of the former s16(5). It is also the purpose of Note (a) in those cases to which it applies. Later upon the same page Kirby P said: "The proportion is that which is reasonable 'having regard to the severity of the matter'. There is some uncertainty about the meaning of 'matter'. Whereas the note twice refers to 'case', the 'matter' can only mean the particular case in which the severity is to be measured." In the present case, it is not clear to me that O' Toole CCJ did not consider "the particular impact of the 'permanent impairment' in question... on the particular worker". But if she did, she reached a result more favourable to Mr Videski than would otherwise be the case. If she did not, then no error of law has been demonstrated. The third ground of appeal is that O'Toole CCJ denied procedural fairness to Mr Videski because she failed to make known to his counsel matters referred to by her in her judgment. These matters related to her observations of Mr Videski as he entered the witness box and while he gave evidence. The duties of a trial judge when making observations of witnesses outside the witness box and out of sight of the advocates was recently discussed in this Court in Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304. In Bailey the judge had regard to undisclosed observations of a plaintiff seated in the back of the court room. The defendant claimed that it was denied natural justice because the trial judge made no mention of his observations at the time or in address. The first it became aware of them was in the judge's judgment. All judges expressed the opinion that the trial judge failed to observe a fundamental rule viz that a case should be decided upon evidence which all parties have the opportunity to question. However, Clarke JA with whom Hope AJA agreed was of the opinion that, in the circumstances of the case, there had been no miscarriage of justice. In the present case, what O'Toole CCJ observed was observeable to everyone else in the Court including the advocates. In Bailey all members of the Court adopted the statement of King CJ in Angaston and District Hospital v Thamm (1987) 47 SASR 117 at 178 to 179 which, omitting irrelevant parts, reads: "... It is clear, however, that where the judge makes observations of the actions or demeanour of a party, which actions and demeanour are not observable by counsel, and makes use of those observations in a way which has significant influence upon his decision of the case, he is required in justice, before making such use of those observations, to make those observations and the possibility of his using them in the course of his judgment known to counsel at a stage of the hearing at which counsel still has an opportunity of dealing with them in a proper and effective way." Unlike Bailey, in the present case, we do not know what happened in addresses. It would seem to me, with respect to people who have other views, that an appellate court should be slow to find that a judge has unfairly had regard to her own observations when all the material facts are not before the Court. I am, therefore, not prepared to assume O' Toole CCJ proceeded in a way that denied Mr Videski procedural fairness. URJ VIDESKI v AUSTRALIAN IRON and STEEL PTY LTD (Cripps JA) 13 I trust I do no disservice to the fourth ground of appeal when I state that, on the findings made by the learned judge, it can scarcely be said that the award made pursuant to s66 was inadequate. The fifth ground of appeal challenges the adequacy. O' Toole CCJ was not compelled to find that Mr Videski's back was as severely impaired as he claimed. There was medical evidence, tendered by consent, supporting her view that the permanent impairment of his back was minor. She did not believe his complaints of pain. Her findings in this regard depended upon her assessment of him as a witness. This Court cannot interfere with that assessment. The second ground of appeal and the one most strenuously argued was that O'Toole CCJ failed to give legally sufficient reasons for her decision. In considering such a submission, it is, of course, relevant to have regard to the way the parties conducted the litigation. In the present case, no medical practitioners was called to give evidence. Their reports were tendered. As I have mentioned above, It is clear that the conclusions of the doctors with respect to the extent of permanent impairment to Mr Videski's back were dependent upon the accuracy or truthfulness of the history given to them by Mr Videski. The only way O' Toole CCJ could resolve the conflict was, I would have thought, to have made her own estimation of Mr Videski's accuracy and truthfulness. A reading of the medical reports and the transcript of oral evidence of Mr Videski makes it clear to me, at least, why she found as she did. In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 it was pointed out by McHugh JA at 280 that the discharge of the obligation does not require lengthy or elaborate reasons. He said that more elaborate reasons are required where there is a full right of appeal than where an appeal is limited to a question of law. However, as I would understand the law, the obligation is discharged by the judge making it plain why she reaches her conclusions. In the present case, it is clear to me what matters O' Toole CCJ took into consideration and why she reached the view she did. Accordingly, I reject the submission. Mr McSpedden further alleges error in that O'Toole CCJ failed to spell out precisely how she arrived at the figure of $4,000 which she awarded as compensation. He referred to the circumstance that she failed, in terms, to mention percentages. I do not know whether this submission is directed to the claim that she failed to give adequate reasons or to raise an inference that she misunderstood her legal function. However, on either basis, the submission must, in my opinion, be rejected. She made it quite clear in the early part of her judgment that she understood the process to be undertaken. She said that Mr Videski's counsel formulated the claim as being 70% of $51,080 "being the relevant percentage, at the relevant time, of the sums fixed by the Act. Consequently, the applicant asserts his entitlement to the sum of $35,784 pursuant to s66." That makes it clear to my mind at least that she was aware that so far as compensation for impairment of backs was concerned, she understood her function. The circumstance that the figures were a few dollars out does not gainsay the proposition. It was conceded by Mr McSpedden that his submission would have been very much more difficult if, prior to awarding $4,000, the learned judge had uttered words to the effect that when fixing compensation for permanent impairment she was required by Note (a) to undertake the task by conceding a most extreme case and then providing a percentage which was reasonably proportionate to the maximum percentage having regard to the severity of the matter. I see no reason 14 UNREPORTED JUDGMENTS why this Court should not assume that that is what her thought processes were notwithstanding that she did not express it in precise terms. Finally, it was submitted that O'Toole CCJ may not have understood her function because she referred to "a most extreme case" of "spinal impairment" and not "the most extreme case" of "permanent impairment of the back". The decision was given, I infer, ex tempore. I have no doubt that when O' Toole CCJ referred to Mr Videski's spine she was referring to his back. The sixth ground of appeal, it is conceded by the appellant, fails if the other grounds of appeal are dismissed. I am of the opinion that the appeal should be dismissed and the appellant should pay the respondent's costs of the appeal. Appeal dismissed with costs. Counsel for the Appellant: AL McSpedden Instructed by: Carters Counsel for the Respondent: JD Hislop QC / KJ O'Grady Instructed by: Blake Dawson Waldron