GOVERNMENT CLEANING SERVICE (now known as Commercial Services Group) v KEMP and ANOR SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, MEAGHER and STEIN JJA 10 April 1997, 7 May 1997 [1997] NSWCA 127 WORKERS COMPENSATION — apportionment of liability for 2 separate injuries between consecutive employers — economic not physical consequences of injury relevant WORKERS COMPENSATION — SEPARATE INJURIES SUSTAINED BY WORKER WHILE IN THE EMPLOY OF CONSECUTIVE EMPLOYERS — APPORTIONMENT OF LL\BILITY FOR PERIOD OF TOTAL INCAPACITY AND LATER PARTIAL INCAPACITY BETWEEN EMPLOYERS Worker injured back in fall at premises of first employer, continuing back pain and impairment of function, but worker able to return to normal duties — worker injured neck during work journey concerning second employer. — Period of total incapacity followed by partial incapacity. — Trial judge apportioned total incapacity equally between first and second employer, and attributed partial incapacity to first employer. — Worker recovered damages in District Court for second incident. On appeal: (1) Whether reasonable to attribute whole of partial incapacity to first employer. (2) Whether trial judge accorded procedural fairness to the first employer by failing to indicate the possibility of a finding that first employer wholly responsible. (3) Whether s151Z(1)(b) Workers Compensation Act prevents recovery from second employer. Held: It was open for the trial judge to attribute the whole of partial incapacity to first employer and that possibility should have been clear to the parties. It is the source of economic incapacity and not physical impairment which is relevant to apportionment. Not necessary to decide the effect of s151Z(1)(b). The Commonwealth v Muratore [1978] 141 CLR 296 and Arnotts Snack Products Pty Ltd v Yacob [1984-5] 155 CLR 171 applied Mason P I agree with Stein JA. Meagher JA I agree with Stein JA. Stein JA This is an appeal from an award made by the Compensation Court on 12 June 1996 relating to weekly payments for the worker's residual earning capacity. The Notice of Appeal filed 9 October 1996 specifies three grounds, viz: 1. That His Honour erred in assessing the Applicant's earning capacity at $150.000 per week. 2. That His Honour erred in finding that the First Respondent was solely liable for loss of income from 26 October 1994 and continuing. 3. That His Honour erred in finding the First Respondent liable for s60 expenses from 25 October 1994. 2 UNREPORTED JUDGMENTS In written submissions lodged by the appellant on 7 April 1997 (3 days before the hearing of the appeal and after the worker's submissions had been filed) the appellant raised issues of failure of the trial judge to give reasons, together with a denial of procedural fairness. Unsurprisingly, at the commencement of the hearing of the appeal, counsel for the appellant Mr P Stockley handed up a form of amended notice of appeal. The document contains eight grounds, including 5 additional ones. Counsel representing each respondent objected to leave being granted, but were content for the appeal to proceed before a decision was given on the amendment application. In the event, no submission was made by the appellant in support of grounds 1 and 4 and grounds 3 and 8 were not pressed. The delay (in seeking to amend) was unexplained. However, it is plain that the granting of leave to amend does not require further evidence nor an adjournment. It visits little prejudice on the respondents. Accordingly, I believe that leave should be granted to rely on the amended notice of appeal. Having granted the amendment, however, it may be said that grounds such as procedural fairness or failure to give adequate reasons do not attract much significance on an all grounds' appeal such as the present. FACTS The facts may be relatively briefly stated. The worker Lola Kemp (first respondent) commenced work as a cleaner of schools in 1968. She was born in 1940. She moved to Port Macquarie in 1981 and continued as a school cleaner. On 16 June 1991 she suffered a heavy fall whilst sweeping a flight of stairs. According to the findings of the trial judge, she fell backwards a considerable distance down the stairs, landing heavily on her posterior. She experienced considerable pain and remained on the concrete floor for a few minutes. She then got up and reported her fall, but continued to work. Her back was sore but she did not seek medical treatment. Rather she continued to work with the aid of regular painkillers to overcome the continuing soreness. On 9 March 1992 she was visited by severe lower back pain. The pain was so distressing she could not report for work. She saw Dr Young who put her off work for 3 weeks and prescribed rest and an analgesic. After that she returned to work but experienced considerable back pain. She coped with her duties stoically with the aid of painkillers. Her back pain adversely affected her sport, in particular golf and aerobics. On 28 January 1994 the worker's employment contract was taken over by Tempo Cleaning Services, the second respondent. On 5 August 1994 she injured her neck on a work journey. It appears that she suffered a fairly classic whiplash injury to her neck. The accident happened on a Friday and she attempted to return to work on the following Monday. However, she says she was in considerable pain, could not continue to work and returned to her doctor. She has not worked since. Dr Garry Scarf examined her neck injury in January 1995 at the request of the appellant. He described her neck injury from the August 1994 car accident as a simple soft tissue musculo-ligamentous cervical strain superimposed on pre-existing degenerative changes'. He added 'she is clearly settling from this'. There is confirmatory evidence of this from the worker. Although in examination in chief she maintained that her neck had limited movement which prevented certain cleaning activities, in cross-examination by counsel for Tempo \WQVERNMENT CLEANING SERVICE (now known as Commercial Services Group) 8 KEMP and ANOR (Stein JA) she agreed that her neck symptoms did not affect her walking, driving, shopping, washing, taking washing off the line or hanging out wet washing. On 24 October 1994 Dr Prowse examined the worker and reported that he felt that CRS should be involved regarding her graded return to work on light duties'. PROCEEDINGS IN THE COMPENSATION COURT The initial hearing took place before His Honour Judge Maguire QC on 30 October 1995. It concerned the worker's entitlement to lump sum compensation for permanent impairment to her back under s66 of the Worker's Compensation Act 1987. Also at stake was the worker's claim for weekly payments. However, this was not determined at the time but adjourned and ultimately disposed of on 12 June 1996 after submissions were heard on 7 June. In the judgment of 1 December 1995 His Honour made a number of findings which are not challenged before us. These include the acceptance by the judge of the worker as a credible witness; that she had to give up golf because of her back condition before the neck injury and that she had commenced her compensation claim in relation to her back prior to the motor car injury and saw Dr Plowman in connection therewith on 26 July 1994. His Honour noted that Dr Plowman's opinion was that Mrs Kemp was fit for her present employment even though it would continue to affect her back. His Honour indicated some reservations about reconciling aspects of Dr Plowman's report. However, after assessing the other medical evidence (all contained in reports without cross examination) he said: There is no reason for me not to accept the applicant's evidence that there has been a continuity of symptoms in her lower back, from 16 June 1991 right up to the time of the hearing. She has asserted this continuity at every opportunity and was in the process of preparing her back claim for presentation to the Court before she was overtaken by the neck injury which has been disruptive of her life to date. However, I do not accept that the impairment of the back is a very substantial one. I award $5,880 in respect of 10 per cent permanent impairment of the back. It will be seen from this finding that His Honour, while not regarding the impairment of the back as very substantial, nonetheless relied heavily on the worker's own evidence. The matter returned before His Honour the following June with regard to the claim for weekly payments. His Honour found that the worker was totally incapacitated for work from 5 August 1994 to 24 October 1994. This is not challenged. He found this referable equally to the respective injuries and the respective respondents'. Although ground 4 included in the amended notice of appeal takes issue with this finding, the appellant made no submission on it. In my opinion, it was a finding that was clearly open to His Honour on the evidence and applying his discretion. In dealing with the issue of partial incapacity, His Honour noted the applicant's claim and that neither respondent really disputed that she was in fact partially incapacitated. The issues were, he stated, the extent of the incapacity and its derivation. His Honour noted a submission from the second respondent that even though there was no permanent incapacity of the neck, nevertheless there should be an apportionment between the two injuries and respondents. His Honour stated: 4 UNREPORTED JUDGMENTS Having reviewed the evidence and my earlier findings I conclude that the applicant's back injury was counting heavily against her before she was overtaken by the neck injury. I have already found as a fact that she gave up golf before the neck injury. Only 10 days before the neck injury she was examined by Dr Plowman. He regarded Mrs Kemp as fit for her then present work but he expressed the view that she would continue to have trouble with her back as long as she continued to work. The judgment then proceeds to find that the partial incapacity for work began on 25 October 1994 and was 'wholly referable to the back injury sustained by her while in the employ of the first respondent on 16 June 1991'. The Court was then required to assess the degree of partial incapacity. The trial judge acknowledged the difficulty in this because of the lack of assistance in the medical reports. He concluded: Doing the best I can I find that the applicant has a present capacity to earn in some suitable employment the sum of $150 per week. Bearing in mind the worker's average weekly earnings of $368.96, this lead to an award to the applicant of $218.96 against the appellant from 25 October 1994 and continuing. Although the assessment of $150 per week was the subject of ground | in the notice of appeal, and repeated in the amended notice of appeal, the appellant made no submission to support it. It is the making of the award solely against it that is the gravamen of the appellant's concern. ARGUMENT Mr Stockley submits that the medical evidence (and the oral evidence of the worker) was such that His Honour could not have found that her partial incapacity for work was solely attributable to his client. He also submits that no party suggested that the Court should find the appellant solely liable for the worker's partial incapacity and that counsel were given no opportunity to address on this possibility. The appellant further submits that the trial judge confused the question of impairment with that of incapacity. He asks that this Court substitute an award against Tempo, alternatively awarding a small proportion only (10 to 15%) against the appellant. On behalf of the worker, Mr A. Leslie QC submits that it was open to His Honour to conclude that his client had an on-going back disability with economic consequences. He submits that it was open, on the evidence, to conclude that the neck injury only had economic consequences for the closed period of total incapacity of 11 weeks. Thereafter, her neck disability carried no economic consequences and would cause her no financial loss of earnings. His Honour was entitled to conclude that after the period of total incapacity (from 25 October 1994) the worker's partial loss of earnings was attributable to her back and not to her neck. Mr Leslie submits that His Honour did not confuse impairment with incapacity. His reliance on Arnotts Snack Products Pty Ltd v Yacob [1984-1985] 155 CLR 171 is apposite. In the joint judgment of Mason, Wilson, Deane and Dawson JJ (at 178) their Honours cited Jacobs J in The Commonwealth v Muratore [1978] 141 CLR 296 at 300-301: It has always been recognized that incapacity for work', those words being taken to refer to physical incapacity, is only relevant where it produces an economic incapacity. Their Honours went on to say in Yacob: \WQVERNMENT CLEANING SERVICE (now known as Commercial Services Group) § KEMP and ANOR (Stein JA) It follows that the concept of partial incapacity for work is that of reduced physical capacity, by reason of physical disability, for actually doing work in the labour market in which the employee was working or might reasonably be expected to work. Under s11(1) an applicant's entitlement to compensation will depend on his loss of earning power. Mr Leslie stresses that His Honour's task was to deal with the economic consequences of any physical incapacity, and that he did just this and did not confuse the issues. On the procedural fairness challenge, Mr Leslie cautions us not to ignore the nuances of language habitually used in the Compensation Court. He suggests that several passages in the exchanges between counsel and the bench, to which he drew attention, are indicative that the appellant knew full well that one of the possibilities was an award for partial incapacity solely against it. Further, it had the opportunity to make submissions against this possibility. Counsel for Tempo, Mr G Parker, supports the first respondent's submission, save to add one additional defence peculiar to his client, which I will refer to in a moment. In my opinion, Mr Leslie's submission is to be accepted. There was ample evidence, both medical and lay, upon which the trial judge could conclude that the economic consequences of the worker's partial incapacity for work was solely the responsibility of the appellant. We should not be over anxious to read too much into the somewhat cryptic arguments made in a specialist jurisdiction such as the Compensation Court. More likely all parties had their eyes wide open during the hearing and the two respondents were content to manoeuvre in order to seek to minimise their liability for compensation. In my opinion, His Honour's decision was correct and reveals no error. It was open to him to find that the whiplash injury from the motor car accident was a minor one with no economic consequences (for work loss) after the 11 week closed period of total incapacity. On 27 August 1996 the worker received an Arbitrator's award for damages in the District Court arising out of the motor vehicle accident. Tempo submits that by reason of s151Z(1)(b) of the Worker's Compensation Act, it can have no further liability to the worker. Accordingly, Mr Parker submits that for this reason alone the appeal should be dismissed against the second respondent. Although this is likely to be correct, because of my view as to the merits of the appeal it is unnecessary to determine. I would dismiss the appeal with costs and confirm the awards of the Compensation Court. (1) Appeal dismissed with costs. (2) Awards confirmed. Counsel for the Appellant: P Stockley Solicitors for the Appellant: Hunt & Hunt Counsel for Respondent 1: A Leslie QC & P Mooney Solicitors for Respondent 1: Steve Masselos & Co Counsel for Respondent 2: G Parker Solicitors for Respondent 2: P W Turk & Associates