AKAWA AUSTRALIA PTY LTD vy CASSELLS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirBy P, PRIESTLEY JA and ROLFE AJA 7 June 1995, 19 June 1995 [1995] NSWCA 10 WORKERS COMPENSATION — Claim pursuant to s40. Open to his Honour to assess the difference between pre-accident wage and post-accident ability to earn: Compensation Court as a specialist tribunal able to have regard to its knowledge of employment and wages. JC Ludowici and Son Ltd v Cutri (1992) 26 NSWLR 580 followed. Australian Iron and Steel Pty Ltd v Elliott (1966) 67 SR 87 and J and H Timbers Pty Ltd v Nelson (1971-1972) 126 CLR 625 considered and followed. EVIDENCE available to support award under s66. WORKERS' COMPENSATION — partial incapacity — injury and re-engagement on light duties — employer moves business — worker ceases work by mutual agreement — entitlement under Workers Compensation Act 1987, s40 — whether error in the approach of the primary judge (Burke CCJ) — ability of worker to earn — held: No error — no issue of new principle. Steggles Pty Ltd v Aguirre (1988) 12 NSWLR 693 (CA) applied; JC Ludowici and Son Ltd v Cutri (1992) 26 NSWLR 580 (CA). EVIDENCE — judicial notice — specialist tribunal — Compensation Court of New South Wales — entitlement of judge to rely upon experience and knowledge of matters in the labour market and wages paid for particular work — held: Judge entitled to draw on specialised knowledge. J and H Timbers Pty Ltd v Nelson (1971-1972) 126 CLR 625, Australian Iron and Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87 (CA) referred to. Workers Compensation Act 1987, s40, s66, and s67. ORDERS Appeal dismissed with costs. Kirby P : I agree with Rolfe AJA. Priestley JA : I agree with Rolfe AJA. Rolfe AJA INTRODUCTION The Applicant/respondent, who was born on | January 1966, sustained an injury to his left foot in the course of his employment with the appellant on 12 August 1987. Whilst he was driving a forklift with one foot hanging over its side, the forklift came into close proximity with an adjoining object and his foot was jammed. He was treated and remained off work until 19 October 1987, during which time he was paid workers' compensation. He resumed employment with the appellant on light duties in a clerical type position, which, apparently, was not foreign to him as he had previously been a trainee manager with a supermarket chain. He ceased to be employed by the appellant on or about 30 June 1988. This employment ceased because the appellant encountered "financial troubles and moved and couldn't keep me on so I left with a mutual agreement": AB13. During the time he was so employed by the appellant he received wages at least of an amount equal to those he was receiving prior to being injured. 2 UNREPORTED JUDGMENTS On 12 October 1988 he obtained employment as a Process Worker at a wage in excess of his pre-accident wage and he remained in that employment until 5 May 1989. He ceased that employment because his foot "was playing up" and when he was pressed about this in cross-examination he said: "T told all the doctors that I had difficulty working there but I said that was part of the reason I left. I said part of the reason was that I couldn't handle the work there plus I wasn't getting on with some of the staff': AB17. It was not suggested to the respondent that the sole or substantial reason for his leaving was his bad relationship with some of the staff. Although the respondent sought work thereafter he remained unemployed, save for a period of about three weeks when he worked as a Tyre Fitter, until his application for workers' compensation was heard by Burke CCJ on 6 August 1992. FINDINGS OF THE TRIAL JUDGE By that application the respondent sought continuing compensation of $192.10 per week, a lump sum of $20,000 pursuant to s66 of the Workers' Compensation Act 1987, ("the Act'), medical and hospital expenses, interest and a lump sum payment of $25,000 pursuant to s67 of the Act. Burke CCJ delivered judgment on 7 August 1992. He found the applicant sustained an injury to his left foot on 12 August 1987 and was incapacitated thereby, and that he was paid compensation to 19 October 1987, since when he has been partially incapacitated to the date of hearing. He found the respondent suffered no economic loss from 20 October 1987 to 30 June 1988, 12 October 1988 to 5 May 1989, and 27 September 1989 to 17 October 19839, ie at all times when he was employed after 20 October 1987. His Honour made a finding as to the respondent's probable earnings, if he had remained in his pre-accident employment, and of the respondent's ability to earn in the same periods during which he was unemployed. The latter figures were about eleven per cent less than the former figures. His Honour found that as a result of the injury the respondent suffered a twenty five per cent permanent loss of efficient use of his left leg in respect of which he awarded $13,000, and that he experienced pain and suffering proportionate to a most extreme case in the ratio approximating 1:5, 1:6, which equated to an award of $7,000 pursuant to s67. His Honour ordered the appellant to pay medical and other expenses, costs an.i interest. From this determination the appellant appeals on three grounds. THE APPEAL Firstly, it is asserted his Honour erred in law in his application of s40 of the Act by finding that the respondent had an economic incapacity on the open labour market when he had demonstrated he was able to earn, following the work injury, a sum which was greater than the weekly amount which he would probably have been earning as a worker but for the injury and had he continued to be employed in the same or some comparable employment as he was at the date of the injury. The second and third grounds stated that in applying the provisions of s66 and s67 of the Act his Honour's judgment was against the evidence or weight of evidence. The third ground of appeal relating to the award pursuant to s67 was not pressed. In his reasons his Honour traced the happening of the injury and the subsequent work undertaken by the respondent. He found the reason for the respondent's leaving the employment of the appellant "was perhaps a little ambivalent but it seemed to come down to the fact that the respondent moved premises. He did not wish to follow them to wherever it was". I think, with URJ AKAWA AUSTRALIA PTY LTD v CASSELLS (Rolfe AJA) 3 respect, this does not reflect the evidence in the most favourable light to the respondent and I have set out the reason why he left as it appears at AB13. This version was not challenged in cross-examination. In dealing with the reason the respondent ceased to work as a Process Worker his Honour said it was "because of the problem with his foot". This, undoubtedly, was part of the reason the respondent gave for taking that course and his Honour said it was "that sort of problem that caused him to leave" this employment. There was also the evidence that in part he was unable to get along with his fellow workers, although his Honour made no finding on that and no point is taken about it. In the light of the evidence it was strange his Honour said that he ceased work as a process worker for reasons unrelated to his injury. I think this was an error and that the findings by his Honour as to his leaving because of the injury are the one's he did make and intended to make. In noting the respondent had remained unemployed since October 1988 his Honour said: "Notwithstanding the present labour market one would wonder that someone of his age could not find some work if he really wanted it. Be that as it may, he has not. Subsequently his Honour said: His credit is unimpugned. He undoubtedly had a crush injury to the foot. He says that he has had this problem ever since. Nothing in the lay or factual evidence would suggest that it should not be so. I said I did not find him a particularly impressive witness in general but not as to his credit. He did not really seem to be a highly motivated young man, but nonetheless, there seems to be no reason why I would not accept that he does in fact have the types of symptoms of which he complains in this injured left foot. In that context, I am satisfied that as a result of the injury he does have the symptoms and the types of restrictions of which he complains. That, in my view, would tend to suggest that there are areas of the labour market in which he had functioned with (sic) are no longer open to him, particularly perhaps the job that he had with the respondent where he was on his feet for considerable periods, manipulating quite heavy weight, stacking pallets with this equipment. If you have a sore foot, I can understand that that is a good way to make it sorer, which is in effect the applicant's general line of complaint. It seems to me that that type of work is not really suitable to him any longer and that he is restricted to something, as he suggests, with an opportunity to sit down now and again, not too much on his feet. That seems to be a reasonable series of limitations and would constitute an incapacity in law. I would therefore be satisfied the applicant has a physical incapacity as a consequence of the employment injury." The first ground of appeal concerns whether his Honour was entitled to find, as he did, that the respondent was earning less than he had been prior to the accident. The way the appellant's case was presented before his Honour appears at AB19. The first submission was that his Honour should accept the medical evidence tendered on behalf of the appellant and find the respondent was "fully fit for all forms of duties and make an Award for the respondent accordingly". The submissions continued: "Tf your Honour is against the respondent on that the applicant has admitted, and when your Honour sees the wage schedule, that he was earning in employment with Friskies and Hermans sums in excess of what he would have earned with the respondent. He says he left because he could not cope but the fact 4 UNREPORTED JUDGMENTS is he coped from October 1988 until June of 1989 and we say that if he does have an ongoing disability, that that disability does not register in an economic incapacity and that therefore again there should be an Award for the respondent. The third aspect is that if your Honour is against the respondent on those 2 submissions then he has a rather wide range of ability to earn and that any Award pursuant to s40 would be only minimal." I think it is inherent in the second submission that because the respondent was earning more in his post-injury employment, in so far as he was employed, than in his pre-injury employment, which was undoubtedly the fact, he should be treated as able to earn more at all times. If this was not so the appellant relied on the further submission to which I have referred. His Honour dealt with the matter thus: "The question is really: what is his ability to earn? It seems to me that if you are satisfied that a mao has an incapacity, the probabilities are that it will reflect in an economic element, except in a special circumstance. There are, no doubt, in my view, having regard to the fairly low probable earnings, a variety of sedentary jobs which would pay as much as or even more than his probable earnings uninjured. However, it does not alter the fact that a fairly wide field of an unskilled labour market is precluded to him by virtue of the effects of the injury. A view I have expressed in a number of cases is that in finding ability to earn after an injury, I am not seeking to merely identify a particular job or category of employment in which the applicant can in fact operate and thereby determine that the income generated in that job represents his ability to earn. I am more concerned with taking a broad range of the labour market that is now open to him, the types of earnings that those types of jobs will produce, and getting a sort of weighted average; the ones that are more readily available weigh high, those that are rarely available weigh low. Doing that sort of approach in this case, I think there is a marginal decrement in his overall ability to earn, compared to his probable earnings uninjured. It is not a particularly substantial decrement." As I have said, his Honour seems to have assessed it at eleven per cent of his pre-injury earning capacity. How he derived this figure is not clear from what he said, although one assumes that left with the evidence as it was he concluded the respondent had suffered a degree of incapacity, which affected his earning capacity to an extent and the only way to quantify it was by applying a percentage reduction reflecting the extent to which his Honour thought, as a matter of judgment, the respondent's earning capacity was reduced. Indeed the third submission on behalf of the appellant invited such an approach, as I understand it. Although the appellant complains about the way in which his Honour approached the matter it is difficult to understand how else he could have worked out the amount the respondent was able to earn. The respondent's case was that he had not worked for some four years prior to the proceedings being heard and, on one view, it must have been that he was unable to earn anything. On the other hand the appellant did not advance any figures, other than those representing what the respondent had actually earned in employment in which he was not able to continue and, as I have noted, the matter was left to his Honour, at least as a last resort, in the way to which I have referred. The attack made by the appellant is that his Honour should have taken the difference between the two amounts specified in s40(2) and it is suggested he failed to follow the statutory requirement for determining the loss. In particular URJ AKAWA AUSTRALIA PTY LTD v CASSELLS (Rolfe AJA) 5 it was suggested he overlooked the authority of JC Ludowici and Son Ltd v Cutri (1992) 26 NSWLR 580. It was also submitted his Honour appeared to have ignored the fact that for periods of employment following his injury and for which there was a claim for compensation for partial incapacity the plaintiff was actually earning as much and more than his probable earnings uninjured. I do not agree with this because, as appears from the Award, his Honour declined to grant any loss in respect of these periods. Although s40 and its predecessor, have been the subject of much judicial consideration ultimately the matter is one of fact and, as Priestley JA stated in Steggles Pty Ltd v Aguirre (1988) 12 NSWLR 693 at 704: "My conclusion is that in cases requiring the tribunal of fact to decide what a worker was able to earn at a stated time for purposes of s11(1) what the tribunal must decide is what the worker was able to earn simply by his own ability as a worker and not taking into account amounts he might be paid for other reasons. On this basis, it is my opinion that there was no error of law by Burke J in his approach to the question of what the worker was able to earn at the relevant time, within the meaning of the provision. Thus, in my opinion, the employer's principal ground of appeal fails." Put this way the alternatives open to his Honour, once he rejected the submission that the respondent was fully fit for all work, on the facts presented, were either to find that the plaintiff was not able to earn in some suitable employment, which would have amounted to a total incapacity and, therefore, not have fallen within s40, or alternatively to have applied, as he was invited to do by the appellant, some discount. However the respondent did not make, nor could he have, a case of total incapacity. Although it is not, as I have said, clear why his Honour chose eleven per cent it was, none-the-less, a figure chosen in conformity with a request by the appellant, if its previous submissions were rejected, that an appropriate discount should be made. Inherent in what I have said is that his Honour was entitled to find that there was partial incapacity and, having done so, to quantify it. The Compensation Court is a specialised tribunal the Judges of which are well qualified by their experience and knowledge of matters in the labour market and wages paid to make the type of assessment Burke CCJ was called on to make in this case. This has been recognized by appellate Courts for many years. In Australian Iron and Steel Pty Ltd v Elliott (1966) 67 SR 87 Sugerman JA said words, which are equally applicable to this case, at 94: "The parties do not seem to have raised the question of quantum, or to have placed before his Honour any evidence on which he might determine either the amount of the 'difference' mentioned in s11(1), or the amount proper to be awarded under the circumstances of the case, being content, apparently, to leave all questions of quantum to his Honour's decision in reliance on the fund of information as to the conditions of employment and rates of pay which the Commission should be taken to possess...". In J and H Timbers Pty Ltd v Nelson (1971-1972) 126 CLR 625 Barwick CJ referred to similar considerations: at 632-633. Notwithstanding the detailed submissions on behalf of the appellant I am not persuaded his Honour's assessment was wrong. The second ground of appeal, which is the only other ground pursued, is that his Honour's finding of twenty five per cent permanent loss of efficient use of the respondent's left foot for the purposes of s66 was based upon incomplete comparisons between those doctors expressing an opinion. As in so many cases 6 UNREPORTED JUDGMENTS his Honour was confronted with a number of medical reports and he preferred the evidence of Dr Malouf and Dr Maniam, who suggested, respectively, twenty per cent and thirty per cent loss of efficient use. His Honour apparently took the middle figure. His Honour reviewed the medical evidence. He referred to that of the doctors called on behalf of the appellant, namely Drs Scarlett and Schwartz and noted that Dr Scarlett, by December 1991 "seems to suggest there could be a five per cent loss of efficient use of the foot". Dr Schwartz made no such assessment, though he did query "perhaps, a diagnosis of extensor tenosynovitis resulting from the trauma as being the source of the man's ongoing symptoms". His Honour continued: "Both Dr Scarlett and Dr Schwartz patently take the view that the applicant may have symptoms in his foot. They would be fairly minimal, in their view, and they would not be such as to interfere with his capacity to work." In his report of 29 May 1991 Dr Scarlett said the respondent walked normally and did not appear to be distressed and examination of his left ankle revealed no gross deformity. There was a slight limitation of flexion at the fourth and fifth metaso-phalangeal joints, but he was unable to detect any other significant abnormality and there was sensory disturbance in the left foot. He saw x-rays, which appeared to be normal and revealed old united fractures of the necks of the fourth and fifth metatarsals with some deviation of the related toes. He proffered the opinion that the respondent: ".. could have some scar tissue involvement of the dorsal digital nerves of the 4th and Sth toes. However there is no evidence clinically of tarsal tunnel compression. Similarly, there is no indication in my view for any surgery. If one accepts that his symptoms are genuine then it could only be considered that he has no gross disability as a result of the accident of 12.8.1987 and only conservative management of his ongoing complaints is justified." On 13 December 1991 Dr Scarlett reported that his opinion remained "as previously expressed". He said the respondent suffered from pre-existing bilateral flat feet prior to the accident of 12 August 1987 and: "I believe it is reasonable that in this accident in which he suffered fractures of the 4th and Sth metatarsals of the left foot associated with soft tissue injuries would have occurred. This accident may, in my opinion, well have led to the onset of symptoms in his previously symptom free left foot. However, I do not believe that his present ongoing symptoms could be reasonably regarded as being disabling. In my opinion, as a result of the accident in question, he has suffered a permanent loss of the efficient use of his left foot of 5%." In his report of 8 October 1990 Dr Schwartz formed the view that the respondent was fit "for all tasks" and he would "place no restrictions upon him. I do not feel that he has any ongoing permanent disability which would impede his work capabilities". However, he said he felt "that he would benefit, as I stated, by wearing firm support shoes and exercise to the extensors of that foot". Dr Panjratan, an Orthopaedic Surgeon, gave a report on 14 October 1991. However it appears that the respondent failed to keep a subsequent appointment with that doctor. Dr Mark Malouf, an Orthopaedic Surgeon, furnished a report on 16 October 1991 in which he concluded the respondent suffered "a significant crush fracture of his left foot and trauma to the left shin". He was of the view the associated soft tissue trauma and damage to the foot caused the tarsal arch to collapse spreading the forefoot and giving persistent neuralgia or paraesthesia to the forefoot region in the lateral half. He continued: URJ AKAWA AUSTRALIA PTY LTD v CASSELLS (Rolfe AJA) 7 "The prognosis for such an injury, given the architecture of the foot has been significantly deformed, is not good. He will continue to have spreading of the forefoot, with undue pressure on the fractured metatarsals, and continued symptoms, depending on the amount of work and standing and pressure applied to the foot." He said the respondent was "not fit to be employed in a standing position or in a job that required a lot of agility, running or lifting as this would definitely exacerbate his symptoms". He assessed the percentage loss of function to be in the order of twenty - twenty five per cent. Dr Maniam, in his report of 9 September 1991, referred to a number of problems which, in his opinion, would not subside because of their number. He said there was also some weakness in the ankle movements as a result of partial disruption of the peroneal and extensor muscle bellies. He concluded: "This man will be capable of carrying out selected light work that did not involve prolonged standing and prolonged walking. The left foot function has been compromised by 30% of normal." Dr Richard Deveridge formed the opinion that as a result of the accident there was residual disability with pain, that in his opinion the respondent was unfit for work involving very prolonged periods of standing, very heavy lifting and carrying and other forceful or repeated stresses to the right foot. He said the prognosis: ".. remains fair and he is unlikely to develop any significant osteoarthritis as a result of his injury. I have assessed the permanent loss of effective use of his left leg (below the knee) at 10%. Accordingly, all the doctors, save for Dr Schwartz, found there had been some loss and, on balance, his Honour was clearly entitled to find that. The question then was the extent of the loss. In his Honour's reasons he balanced, as best he was able in view of the fact that none of the doctors were called, the competing contentions and he concluded that the loss was to the extent he found. Once the respondent satisfied his Honour, as it seems to me the evidence must have done, that there was some percentage loss it was a question of factual judgment for his Honour to determine, albeit on the reports alone, what figure was appropriate. On reading the reports it seems to me that the figure to which his Honour came was obviously an available figure and, in my opinion, his Honour's assessment is not one with which this Court should interfere. The third ground of appeal was not pressed. In my opinion the appeal should be dismissed with costs. Appeal dismissed with costs. Counsel for the Appellant: HJ Marshall Instructed by: Rishworth Dodd and Menczel Counsel for the Respondent: SG Campbell Instructed by: Moffatt Sullivan