KOGARAH GOLF CLUB LTD v SULLIVAN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, CLARKE and SHELLER JJA 1 April 1993, 23 April 1993 [1993] NSWCA 155 WORKERS COMPENSATION — PARTIAL INCAPACITY — AVAILABILITY OF SUITABLE WORK — MUTUALITY The applicant worker was injured in the course of his employment with the appellant (Kogarah). After a period off work he resumed normal duties, having been refused light duties. He later left this employment for reasons unconnected with its suitability, and after a time began work with the second respondent (Arncliffe) during which his condition deteriorated. He left that employment after being refused light duties on 16 January 1986. Kogarah was ordered to pay the worker compensation pursuant to s11(1) of the Workers Compensation Act 1926 on the basis of partial incapacity from the time that he left work with Arncliffe until 16 January 1987 and pursuant to s11(2) on the basis of total incapacity thereafter. Kogarah appealed against both orders. Kogarah contended that the trial judge erred in finding that it had failed within the meaning of s11(2) to provide the applicant with suitable employment or that the applicant was ready willing and able to engage in such employment with Kogarah. Kogarah relied upon the applicant's relinquishment in August 1983 of his employment with Kogarah for reasons unconnected with its suitability and the absence of evidence that the applicant was thereafter ready willing and able to engage in suitable employment with Kogarah. It submitted that the applicant having left its employment for reasons which had nothing to do with suitability, his readiness and willingness to return to suitable employment were of no significance unless Kogarah was aware of this. Alternatively it argued that it had provided and the applicant had relinquished suitable employment. Kogarah also contended that in making an order under s11(1) the trial judge should have treated the applicant's earnings with Arncliffe as the measure. Held: 1. The finding that Kogarah failed to provide suitable employment was open on the evidence and could not be challenged. 2. It was open to the trial judge to conclude that the applicant's actual earnings with Arncliffe were of no significance in assessing his ability to earn. Compensation Court Act 1984 Workers Compensation Act 1926 Sydney City Council v Ince (1989) 16 NSWLR 690 Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417 RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665 Trass v Qantas Airways Ltd (1976) 1 NSWLR 425 Electric Power Transmission Pty Ltd v D'Urso (1970) 124 CLR 338 Cassidy v International Combustion Australia Ltd (unreported) Court of Appeal 10 October 1988. George Weston Foods Ltd v Rantino (unreported) Court of Appeal 8 AugustORDERS 1. The proceedings be remitted to the Compensation Court for adjustment to O.1(1) and O.3(1) in accordance with what has been agreed between the parties. 2. Otherwise appeal dismissed. 3. Appellant to pay the respondents' costs. Priestley JA I agree with Sheller JA. 2 UNREPORTED JUDGMENTS Clarke JA I agree with Sheller JA. Sheller JA Raymond Phillip Sullivan (the applicant) was employed as a barman by the Kogarah Golf Club Ltd (Kogarah) in February 1979. Later he was promoted to head steward. On 30 July 1981 he was injured in the course of his employment while moving beer kegs. He received medical treatment and was off work until October 1981. During this period he was paid compensation. In October 1981 he resumed his normal duties after having asked for and been refused light duties. He continued his normal employment until August 1983 when he left his employment with Kogarah. About this he gave the following evidence: "Q. I think in August 1983 - it was about then that you broke up with your wife. Is that right? A. De facto. Q. With your de facto. A. Yes. Q. Was that one of the reasons you left the Kogarah Golf Club? A. Yes, the only reason. " Thereafter he was unemployed for twelve months until August 1984 when he commenced casual work with Mingara Recreational Club. In February 1985 he was employed by the Arncliffe RSL Club (Arncliffe). While working with Arncliffe his physical condition deteriorated. On 15 December 1985 he ceased employment with Arncliffe and from that date until mid January 1986 he was off work and not paid any compensation. On 16 January 1986 he applied to Arncliffe for light duties and was told there were no light duties available. At about that time he moved first to his parents' home on the Central Coast and then to Queensland where he remained. In January 1990 he secured employment with Gold Coast Indoor Sports Recreational Centre. In September 1988 he applied for compensation under the Workers Compensation Act 1926 against Kogarah and, by amendment, Arncliffe. According to the particulars in his amended application the claim covered the period from 16 January 1986 "to date and continuing" and was made pursuant to s9A and s11(2) of the Act. The application was heard by Manser CCJ in April 1990. His Honour gave judgment on 3 May 1991. In addition to the facts as I have stated them his Honour found as follows: "In 1981 whilst in the employ of Kogarah, the Applicant suffered injury to his LS /S1 disc which produced the degenerative condition which became evident on radiological investigation and [was] confirmed by CT scan and MRI subsequently. The worker was totally incapacitated for a short period and then was partially incapacitated and has remained so from that condition to the present time. There was a failure on the part of Kogarah to provide the worker with suitable employment as it was required to do under s11(2) when the worker returned to work and had the conversation with the secretary manager. The employment with Arncliffe caused a further injury to the worker by way of an aggravation to his preexisting condition, such as to produce in him a total incapacity for a period from December 1985 until January 1986. Thereafter the worker was partially incapacitated for work, although at a level of incapacity greater than that which he suffered at the time that he came to the employ of Arncliffe and.... he remained so from then for a period of a further twelve months. URJ KOGARAH GOLF CLUB LTD v SULLIVAN (Sheller JA) 3 There was a failure on the part of Arncliffe to provide the worker with suitable employment as it was required to do under s11(2) of the Act from the time that the worker had the conversation with the secretary manager of that club in January 1986. At the expiration of that twelve months period, the worker returned to the state of partial incapacity that he had reached as a result of the injury suffered by him in Kogarah's employ and he remains burdened by that incapacity for the present time." Manser CCJ went on to say that the failure by Kogarah to provide suitable employment had continued throughout this period but he considered himself prevented from awarding the applicant compensation under s11(2) against both employers by reason of this Court's decision in Sydney City Council v Ince (1989) 16 NSWLR 690. He held that the applicant was entitled as against Kogarah to compensation under s11(2) for the period from the termination of his employment in 1983 until the commencement of his incapacity while with Arncliffe in December 1985. However because, in his opinion, there was no evidence that the applicant would have relinquished his position with Arncliffe in order to take up an offer of suitable employment by Kogarah, he refrained from ordering Kogarah to pay the worker compensation under s11(2) from the time he commenced employment with Arncliffe. Since the applicant had made no claim for compensation for the period prior to 16 January 1986 the award as taken out did not reflect his Honour's view that compensation under s11(2) was available against Kogarah for the period from the termination of the applicant's employment with Kogarah in 1983 until the commencement of his employment with Arncliffe in February 1985. His Honour went on to say: "He will, of course, be entitled to compensation under s11(1) from the time of his employment with Kogarah until the expiration of the period of incapacity resulting from the injuries suffered in Arncliffe's employ, whereupon his entitlement against Kogarah under s11(2) will revive." It is probable that when his Honour said "Kogarah" in the first part of this quotation he meant "Arncliffe". The judgment continued: "So far as Arncliffe is concerned, the failure by it to provide the applicant with suitable employment in January 1986 results in it being liable to pay the worker compensation under s11(2) from 16 January 1986 until 16 January 1987. It follows from what I have said that I am satisfied that the worker did suffer injury in the circumstances which I have described in the employ of Kogarah and subsequently in the employ of Arncliffe, the latter being as a consequence of the nature and conditions of his employment. It would seem to me however, that the circumstances of the worker..... since he moved to Queensland, requires the Court to give consideration to whether in normal circumstances, the worker would be ready, willing and able to undertake suitable employment were it offered by the employer, Kogarah. The worker struck me as being a sincere and reasonable person and I have no reason to doubt his evidence that had any offer of light duties been made to him by either respondent, he would have immediately returned to Sydney and taken up those duties. The work that he does with the Gold Coast Indoor Sports Recreational Centre is of a part time character and there would be no impediment to the worker returning to Sydney and undertaking suitable employment if it were offered to him by the respondent, Kogarah. 4 UNREPORTED JUDGMENTS I therefore find that since the worker obtained employment, moved to Queensland, and more particularly since he obtained employment with the Gold Coast Indoor Sports Recreational Centre, that he would nevertheless have been ready, willing and able to undertake suitable work were it provided to him by the respondent, Kogarah. Consequently he has the necessary 'mutuality' to entitle him to the benefits of s11(2) on a continuing basis. So far as the worker's entitlement under s11(1) is concerned, I note from the wage schedule Exhibit F, that the worker's probable weekly earnings but for injury throughout the relevant period, that is to say from the commencement of his employment with Arncliffe until the expiration of the period covered by the award under s11(2) against Arncliffe is concerned, varied between $353.72 and $361.89. I find that in the same period the worker would have been able to earn in some suitable employment the sum of $200. If I average the probable earnings over the period, the result is $357.80 from which I deduct the amount which have found that he was able to earn in some suitable employment, namely $200, leaving a mathematical difference of $157.80 per week. Having regard for the circumstances existing at that time, that the worker is entitled under my Judgment to compensation against Arncliffe under s11(2) for at least part of that period. I reduce the mathematical difference to a figure of $150 per week. " While his Honour was not satisfied that the applicant would have been prepared to relinquish his position at Arncliffe in order to undertake suitable work if it had been offered to him by Kogarah it seems that he was satisfied that once the applicant had ceased working for Arncliffe he would have been ready willing and able to undertake suitable work provided to him by Kogarah from 17 January 1987. The relevant part of the orders and awards were as follows: " 1. That the first respondent [Kogarah] pay the applicant weekly compensation at the rate of (1) $150.00 from 15th December 1985 to 16 January 1987 on the basis of partial incapacity. (2) $155.00 from 17th January 1987 to 31st March 1987, $159.00 from 1st April 1987 to 30th September 1987, $163.50 from 1st October 1987 to 31st March 1988, $165.70 from 1st April 1988 to 30th September 1988, $169.30 from 1st October 1988 to 31st March 1989, $173.50 from 1st April 1989 to 30th September 1989, $179.80 from 1st October 1989 to 31st March 1990, $183.60 from 1st April 1990 to 30th September 1990, $192.10 from 1st October 1990 to 31st March 1991, and $194.60 from Ist April 1991, as if the incapacity for work were total; such weekly payment to continue in accordance with the provisions of the Act. 3. That the second respondent [Arncliffe] pay the applicant weekly compensation at the rate of (1) $150.60 from 15th December 1985 to 16th January 1986 on the basis of total incapacity. (2) $150.60 from 17th January 1986 to 31st March 1986, and $155.00 from 1st April 1986 to 16th January 1987, as if the incapacity for work were total." Kogarah appeals against these awards. An appeal against an order that Kogarah pay the applicant interest was abandoned. Kogarah concedes that the appeal is one to which s32 of the Compensation Court Act 1984 in its form prior URJ KOGARAH GOLF CLUB LTD v SULLIVAN (Sheller JA) 5 to the 1989 amendment applies and accordingly the appeal is restricted to points of law. The main thrust of Kogarah's appeal was directed to O.1(2). It was contended that his Honour erred in making an award against Kogarah pursuant to s11(2), and should not have found that there had been a failure by Kogarah, within the meaning of that subsection, to provide the applicant with suitable employment or that the applicant had been ready, willing and able to engage in suitable employment with Kogarah. Kogarah relied upon the applicant's relinquishment in August 1983 of his employment with Kogarah for reasons which, on the evidence, had nothing to do with the unsuitability of that employment and the absence of any evidence that the applicant thereafter was ready, willing and able to engage in suitable employment with Kogarah. Alternatively Kogarah contended that the employment it provided and the applicant relinquished in 1983 was suitable employment. The intolerable burden, to adapt the language of Mason J, as he then was, in Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417 at 434, of paying compensation on the footing of total incapacity to a partially incapacitated worker who is gainfully employed elsewhere or has moved to live at a place remote from the employer's place of business which s11(2) would, as a matter of language, impose upon an employer if he failed to provide suitable employment for the injured worker during his partial incapacity has been ameliorated by the principle of mutuality explained in RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665 at 669 and many subsequent cases. To quote from that case at 669: "There can, of course, be no 'failure' on the part of an employer to provide suitable employment if the employee refuses, and continues to refuse, to enter his employment, or, if the facts show that the employee's conduct is inconsistent with the necessary degree of cooperation on his part. Such would be the case where the employee has undertaken full time employment with another employer so long as such employment continues, or, where the employee moves his residence to a place so remote from the employer's place of business as to be quite incompatible with employment by that employer. Likewise, it would seem, the position would be the same where after his partially incapacitating injury the worker suffers further injuries or sickness resulting in total incapacity for any form of work. It must be remembered that not only is the obligation to provide suitable employment a continuing one but there must also be a continuing failure to provide suitable employment in order to entitle a worker to continuing benefits pursuant to s11(2) and, in our view, there cannot be a continuing failure where the circumstances are such that it can be seen that throughout any relevant period the employee is not ready, willing or able to enter the employ of the preinjury employer." The Court went on to point out that whether or not there has been any such failure during the continuance of the partial incapacity is a question of fact to be determined in the light of all the circumstances including the situation of the worker. It was relevant, if not essential, for the applicant to give evidence that he was during the periods for which he made claim under s11(2) ready, willing and able to enter into suitable employment with Kogarah. This Court has held the onus to be on him; see Trass v Qantas Airways limited (1976) 1 NSWLR 425 at 427, 430 and 433. Kogarah contended that there was no evidence to support his Honour's finding. The applicant having relinquished his employment with Kogarah for reasons that had nothing to do with its suitability it was submitted 6 UNREPORTED JUDGMENTS that his Honour's view that the worker was entitled to succeed against Kogarah under s11(2) from the time of the cessation of his employment with it was not open as a matter of law. The applicant referred to evidence which, it was submitted, supported his Honour's finding. He requested light duties when he went back to work for Kogarah in October 1981 and from Arncliffe in January 1986. He gave evidence which was unchallenged that in April or May 1989 if Kogarah had offered him a light job he would have moved back from Queensland to Sydney and taken it up. In response to this Kogarah submitted that the applicant having left its employment in 1983 for reasons which had nothing to do with its suitability, his readiness and willingness to return to suitable employment were of no significance unless Kogarah was aware of this. An employer is under a continuing obligation to provide his partially incapacitated worker with suitable employment. In Electric Power Transmission Pty Ltd v D'Urso (1970) 124 CLR 338 at 341 the majority of the High Court said: "[s11(2)] does require an employer to provide his partially incapacitated worker with suitable employment and states the consequence of his failure to do so. It does not require as a condition of its operation that the worker should ask for work and it does not afford the employer any excuse for failing to provide such work. It operates if, but only if, the employer fails to provide suitable employment. As, however, appears from what was said by the members of this court in RJ Brodie (Holdings) Pty Ltd v Pennell an employer does not fail to provide employment to a worker who in fact is not willing to work for him. It was pointed out there that employment involved mutuality between the employer and the worker and that if a worker did not want to work, an employer could not be said to have failed to provide him with employment. What Sugerman J said in Asciak v Australian Glass Manufacturers Pty Ltd (1964) 64 SR (NSW) 344 at 351, is in line with the observations made in Pennell's Case." See also Cassidy v International Combustion Australia Ltd (unreported) Court of Appeal 10 October 1988. If from 17 January 1987 the applicant was ready, willing and able to undertake employment with Kogarah he was entitled to an award under s11(2). As was observed by the President, with whose judgment Priestley and Meagher JJA agreed, in George Weston Foods Ltd v Rantino (unreported) Court of Appeal 8 August 1991 at 11 there is a certain artificiality about some of the decisions on s11(2). At 17 his Honour went on to say: "Once it was determined..... that the employer had failed to provide suitable employment to his injured worker during that worker's partial incapacity and that the worker had 'at all times been ready, willing and able to undertake suitable employment' with the employer, the relevant requirements of s11(2) were made out". In my opinion Manser CCJ's finding that for the period commencing from 17 January 1987 Kogarah had failed to provide the applicant with suitable employment was open on the evidence and accordingly cannot be challenged. Furthermore while his Honour did not specifically make a finding that the work which the applicant was doing immediately prior to his leaving Kogarah's employment in August 1983 was unsuitable this is implicit in the conclusion he reached. Dr Maxwell, the treating doctor, expressed the view that in returning to work in October 1981 the applicant should avoid lifting or pushing around beer barrels as much as possible. His Honour's description of the applicant's work showed that a considerable part of it involved receiving kegs and moving them URJ KOGARAH GOLF CLUB LTD v SULLIVAN (Sheller JA) 7 by rolling and tilting into the cool rooms. It was in the course of doing this work that he was injured on 30 July 1981. After his return to work with Kogarah his Honour found that the applicant's pain was aggravated by bending and lifting and that he adopted strategies for avoiding insult to his back by taking it easy when he was not observed and taking longer to perform such arduous tasks as the rolling of the kegs. The applicant described how various activities caused him pain, such as bending down to pick up glasses and get money out of the poker machine and safe and the like. The applicant said, and his Honour clearly accepted him, that he was not able to return to the sort of work that he was performing with Kogarah and Arncliffe. In my opinion Kogarah's appeal against O.1(2) fails. Kogarah also appealed against O.1(1). All parties agreed that O.3(1) against Arncliffe should be amended to increase the weekly payment from $150.60 by an amount which can be calculated by reference to the appropriate table and O.1(1), insofar as it covers the period up to 16 January 1986, reduced by the same amount. But Kogarah also challenged his Honour's quantification of the applicant's claim pursuant to sl1(1). Manser CCJ noted that the applicant's probable weekly earnings but for injury throughout this period would have averaged $357.80. He found that within this period the applicant would have been able to earn in some suitable employment $200 per week. This left a mathematical difference of $157.80 which, having regard to the circumstance that the applicant was entitled to compensation against Arncliffe under s11(2) for at least part of the period, he reduced to $150 per week. Kogarah argued that the applicant's earnings with Arncliffe should have been treated as the measure, or alternatively as the most relevant consideration, in assessing the applicant's ability to earn. This his Honour, it is said, failed to do. His Honour found that the applicant's condition became worse while he was working with Arncliffe. By Christmas 1985 he could not handle the pain any more. When he returned to Arncliffe on about 16 January 1986 he asked for light duties and was told that there was none. He then moved from Sydney because he had no money. These circumstances left it open to his Honour to conclude that the applicant's actual earnings while working for Arncliffe were of no significance in assessing his ability to earn. His Honour made a finding of fact quantifying the applicant's ability to earn and this, in my opinion, is not open to challenge as a point of law. Finally it is submitted that if Manser CCJ accepted that the applicant was a witness of truth and remained, as at the time of judgment, incapable of performing the duties which he had performed either for Kogarah or Arncliffe, then, as a matter of logic, he could not have found that the effects of injury compensable by Arncliffe had ceased. In my opinion this submission has no substance. His Honour found that at the expiration of twelve months after January 1986 the applicant returned to the state of partial incapacity that he had reached as a result of the injury suffered by him in Kogarah's employ. He remained burdened by that incapacity. The proceedings should be remitted to the Compensation Court to make an adjustment to O.1(1) and O.3(1) in accordance with what has been agreed between the parties. Otherwise the appeal should be dismissed and Kogarah ordered to pay the respondents' costs. 1. The proceedings be remitted to the Compensation Court for adjustment to O.1(1) and O.3(1) in accordance with what has been agreed between the parties. UNREPORTED JUDGMENTS 2. Otherwise appeal dismissed. 3. Appellant to pay the respondents' costs. Counsel for Appellant: NT Robson Solicitors for Appellant: Nevill and Edwards Counsel for First Respondent: PM Morris Solicitors for First Respondent: FC Bryant and Co Counsel for Second Respondent: MJ Cranitch Solicitors for Second Respondent: Leigh Virtue and Collins