MAYNE NICKLESS LTD t/as IPEC TRANSPORT GROUP v DWIGHT SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MEAGHER and STEIN JJA, and CLARKE AJA 4 June 1997, 23 October 1997 [1997] NSWCA 197 Worker's compensation — negligence — successive accidents — incapacity — double dipping — direction to jury — s89(1) Supreme Court Act — inconsistent claims for disability. FACTS The respondent was employed by the appellant as a truck driver from 1986 until his dismissal in December 1991. On 5 May 1987, the respondent claimed he suffered injury to his left shoulder during the course of his employment. He had three days off work and returned to normal duties. On 14 March 1988, he suffered severe pain in his right shoulder allegedly arising during the course of his employment. He took a short break from employment. Then in February 1991 he claims he suffered further injury to his shoulder during the course of his employment. At common law, the respondent claimed the initial incident of 1987 was responsible for his subsequent incapacity and the two subsequent injuries merely aggravated this existing injury. In his subsequent claim for Worker's Compensation, he claimed disability arose from the second incident of 14 March 1988. He has received workers compensation for all three accidents. The appellant argues that it is these workers compensation benefits which give rise to the present appeal. First, the issue of these benefits was too complicated for the jury to consider and that his Honour erred in not granting the appellant's motion to dismiss the jury and secondly, the jury should have been directed to consider the benefits when determining the quantum of damages. Further, the parties agreed that the defendant's insurer had paid the medical expenses of the plaintiff worker for all three accidents, a sum agreed to be $30,961. In respect of this sum the jury were not instructed as to which parts of this sum were attributable to each accident. However, counsel for the present appellant has told this court that only $292.50 of this $30,961 was attributable to the first accident. The appellant claims his Honour erred in not dissecting these payments. HELD By Meagher JA, Stein JA, Clarke AJA agreeing: 1. It was not contended that the jury's verdict was perverse, which precludes any examination of its award. It follows that it is not possible to establish whether or not this respondent has benefited from having been twice compensated for out of pocket expenses. 2. In a common law action for negligence, it is the plaintiff's duty to establish exactly what damage flowed from the act of negligence complained of, and the right of a defendant to challenge any head of damage alleged. In a case like the present, where the first of a series of incidents is alleged to constitute the tort of negligence, and worker's compensation payments have been made in respect of all three incidents, it is necessary to dissect those payments. If they have been made in respect of the alleged negligence, they should be deducted. On the other hand, if they had been made in respect of later incidents, they should be disregarded as irrelevant. Without such a dissection, one cannot arrive at a justifiable result. 3. Whether or not, in reliance on s89(1) of the Supreme Court Act his Honour withdrew from the jury consideration of workers' compensation payments, it would have been necessary for his Honour to dissect the payments, which he did not. 2 UNREPORTED JUDGMENTS 4. The respondent's claim of disability in negligence is not consistent with the same claim under the Worker 's Compensation Act as far as the incident for consideration is made out. Meagher JA This is an appeal from the decision of a Jury, presided over by Studdert J, in an industrial negligence claim. Judgment was delivered on 7 April 1995. The respondent, born 29 October 1940, was employed by the appellant ("Ipec") as a truck driver from 1986 until dismissed in December 1991. Mr Dwight has not worked since his dismissal and enjoyed, prior to it, relatively constant employment in manual tasks, mostly as a driver. The incident giving rise to the decision from which this appeal is made occurred on 5 May 1987. On that day, Mr Dwight claims to have suffered injury-to his left shoulder whilst unloading coats from a pantechnicon during the course of his employment with Ipec. The coats had to be unloaded from a rail some seven feet ten inches above the floor of the pantechnicon. Mr Dwight is five foot ten inches tall and had to remove the coats through a lifting, twisting and pulling motion. Mr Dwight had three days off work before returning to his normal employment. The case was complicated by the occurrence of two further accidents. On 14 March 1988, the respondent suffered severe pain in his right shoulder which he claimed arose out of the employment in which he was involved at the time, involving much lifting with his right arm. Mr Dwight was off work for a short period. A third incident occurred in February 1991 when he was unloading a semi-trailer when a roll of cartons fell from the truck, striking him on the shoulder. Much, often conflicting, medical evidence was given at the hearing. It is sufficient to note that the evidence conflicted as to whether the injury in 1987 was a factor which could be regarded as causing Mr Dwight's shoulder problems or whether it merely aggravated or accelerated degenerative changes or rheumatoid arthritis. The medical evidence was also conflicting as to whether, and if so to what the extent, the 1987 incident could be regarded as causing Mr Dwight's incapacity for work. Mr Dwight's case was that the incident of May 1987 (the first accident) caused all his damage, and, indeed, rendered him permanently unfit for work. Worker's compensation payments had been made in respect of all three accidents. The proceedings ran from 27 to 31 March 1995 and 3 and 4 April 1995. On 29 March 1995, the appellant made application to his Honour, Studdert J, to dispense with the jury. His Honour refused that application, delivering reasons on 30 March 1995. It was submitted by learned Senior Counsel for the appellant, Mr Nock SC, that the issue of the effect of workers' compensation payments on quantum was too complicated for the jury and that the matter was generally not one suitable for trial by jury. His Honour noted the tardiness of the appellant in making its application, made neither by motion nor supported by affidavit evidence. His Honour acknowledged that it might be easier to discharge the jury and proceed to determine the matter himself, but concluded that on balance, it was proper for the jury to determine the factual issues. We cannot possibly reverse his Honour's decision on this issue. Of major concern to the appellant was that successive accidents gave rise to differing rights. Mr Dwight had received and continued to receive workers' compensation benefits (medical and incapacity payments) both in relation to the first incident and in relation to both further incidents and, it was argued, these had to be considered by the jury when determining the quantum of damages to which Mr Dwight was entitled. URMAYNE NICKLESS LTD t/as IPEC TRANSPORT GROUP v DWIGHT (Meagher JA) 3 Having heard argument on the issue the day before, his Honour delivered reasons, on 4 April 1995, for his decision that the jury was not permitted to bring into account, in reducing damages otherwise payable to Mr Dwight, payment of workers' compensation benefits that were made in 1991 and in following years or the possibility of any future workers' compensation payments. His Honour noted that it was not Mr Dwight's case that the appellant was liable, at common law, for the injuries sustained in 1988 and 1991. The issues, liability and quantum, to be determined by the jury were confined to the incident in 1987 and the consequences of that incident. His Honour, in summing up, gave specific directions to the jury that, provided they were satisfied on the issue of liability, Mr Dwight was to be compensated "to the extent that you find it [the injury] is due... to the accident in 1987. If it is not due to the accident in 1987, you disregard it". The jury assessed Mr Dwight's damages at $330,000 (instead of the nearly $492,000 sought) and Mr Dwight made application for interest on the past components of economic loss and general damages. His Honour, through reasons delivered 7 April 1995, made various findings as to the likely composition of the jury's assessment and awarded interest in the sum of $12,182. That sum was reduced by $292.50 because of a defence based on s63(5) of the Worker's Compensation Act, 1926. What was involved in this application is worth mentioning. His Honour found, after agreement between the parties on the matter, that the defendant by its insurers had paid medical and legal expenses totalling $30,961. The jury had heard this fact mentioned. But the jury were also instructed, which was the fact, that there was no agreement between the parties as to whether all or part (and if the latter, which part) of the sum was attributable to the first incident. The appellant's counsel's instructions were that only $292.50 of this amount was attributable to the first incident, which sum his Honour ultimately instructed be deducted from the jury's verdict. In view of his instructions, Mr Nock could hardly have asked for a greater deduction. The appellant grounds its appeal on the basis that his Honour erred: i in not allowing the jury to be dispensed with; ii in failing to direct the jury that the medical and hospital expenses had been paid by the defendant and should not, therefore, form part of the verdict; iii in not directing the jury that the weekly incapacity payments made pursuant to workers' compensation legislation had been paid by the appellant and should, therefore, be deducted from any past economic loss awarded; iv in failing to direct the jury to consider as a question of fact whether the respondent would be entitled to workers' compensation payments; v in failing to direct the jury on how to take into account the findings of fact in the event that the jury found the respondent was entitled to payments of workers compensation; vi in not allowing the appellant to adduce evidence to show that the respondent was entitled to workers compensation payments; vii in directing the jury that the workers compensation payments already made should not be taken into account; viii in directing the jury that the law would make adjustments in respect of payments of workers' compensation benefits to the respondent; and 4 UNREPORTED JUDGMENTS ix in directing the jury that certain workers' compensation payments received after 5 May 1987 were irrelevant for the purpose of the jury's assessment of damages. The appellant argued that his Honour's directions in respect of the workers' compensation issue resulted in the respondent receiving monies to which he was not entitled, either because the appellant had already paid him, or because the appellant would be compensating him through worker's compensation benefits. These included medical expenses already paid by the appellant; monies allowed for past economic loss previously paid for in the respondents workers' compensation benefits; and an allowance for future economic loss which failed to take into account the respondent's entitlement to continuing weekly incapacity payments. Following the common law proceedings the subject of this appeal, Mr Dwight brought proceedings in the Compensation Court of NSW. Material from those proceedings was admitted as evidence for the purposes of this appeal, it having come into existence after the determination of the common law proceedings. Its tender by the appellant was not opposed by the respondent. The Amended Application for Determination, dated 29 February 1996, sought compensation in respect of injuries suffered in February 1988, 14 March 1988, 14 February 1991 and as a result of the nature and conditions of employment from 8 May 1987 to 14 February 1991. The compensation sought was for aggravation "of a pre-existing injury to his left shoulder", namely the injury the subject of the common law proceedings, that of 5 May 1987. The workers' compensation proceedings were heard by Burke CCJ, who delivered judgment on 18 October 1996. His Honour made the following statement: "This man may have been predisposed by the May 1987 injury to the ultimate consequences but it does not alter the fact that he worked on for four years doing quite substantial work, doing quite substantial damage as far as his shoulder was concerned till ultimately he ended up in the state that he is. In my view the applicant's present loss and incapacity results from injury up to and including 14 February 1991. In respect of that injury the applicant has not been compensated at all. "Tn my view it is not open to me to withdraw from the entitlements created by that injury up to 14 February 1991 anything that I think might be fair having regard to the fact that he has recovered some damages in respect of prior injury." His Honour awarded certain sums representing past and continuing partial incapacity payments, a s66 lump sum in respect of 60% loss of use of the left arm at or above the elbow and a s67 lump sum in respect of pain and suffering. He also awarded the applicant his s60 medical expenses. Returning to the proceedings the subject of this appeal, Mr Dwight's case was that all of his various losses flowed from the incident which occurred on 5 May 1987. He did not deny that the other incidents occurred. The appellant, on the other hand, invited the jury to conclude that it was the combination of incidents, as well as the underlying degenerative condition, that all contributed to the various losses. It was not suggested, either by the appellant or the respondent, that the 1987 injury caused the subsequent injury. His Honour left to the jury the task of assessing what damages arose solely from the 1987 incident, taking into account the later accidents, the nature and conditions of work and any underlying medical condition, but not taking into account any compensation payments made. It seems probable that the jury did not accept that the entirety of Mr Dwight's URMAYNE NICKLESS LTD t/as IPEC TRANSPORT GROUP v DWIGHT (Meagher JA) 5 predicament was caused by the one incident. Mr Dwight then pursued, as he was entitled to, in the Compensation Court, workers' compensation payments in relation to the other incidents. One question is whether the jury should have been directed to consider the past payment of, and future entitlement to, workers' compensation benefits. As a general principle, if a plaintiff says that certain losses have been incurred or sustained, a defendant is entitled to lead evidence to say that those losses have not been incurred or sustained or, where those losses have been met or where there is a continuing need to meet them, that the defendant has already paid for them or will have to continue to meet them This evidence, in a jury trial, must be assessed by the jury. But in civil proceedings, a judge is entitled to withdraw any particular issue from the issues to be considered by a jury provided the judge then decides that issue. In this matter, the jury decided which of the plaintiff's losses were attributable solely to the 1987 incident and was asked to quantify the damages arising solely from that incident. They were directed not to consider the issue of payment of workers' compensation. Studdert J then considered the amount of workers' compensation in the context of a set-off by way of statutory defence and allowed an amount of $292.50. But, he did not consider the relevance of any other payment. The problem is clearly illustrated by the approach to the payment of medical expenses. The jury was informed that an insurer had paid $30,961 in respect of medical costs, all of which they might well have included in their verdict. If this were true, the plaintiff has had his medical expenses paid around the time they were incurred and has also had these expenses awarded to him in his verdict. This would be a clear case of "double dipping". At the conclusion of the case, the plaintiff's claim as put to the jury was one for $491,638. That was made up of the following components General damages $70,000 Past economic lass $106,208 Future economic loss $264,469 Past out-of-pocket expenses $ 30,961 Future out-of-pocket expenses $ 20.000 Total $491,638 The jury's verdict for the plaintiff was in the sum of $330,000. They, therefore, accepted some, but not all, of the plaintiff's figures. What they accepted, and what they did not, is forever beyond the possibility of analysis. It was not contended by the appellant that the jury's verdict was perverse. However, it is contended that workers' compensation payments made in respect of the first incident should have been deducted from the verdict; and that, if the whole matter were to be tried by a jury, evidence should have been permitted on the question of the nature and cause of all such payments. In the present case, although some very inconsequential questions were put and answered about workers' compensation payments, his Honour, at the plaintiff's invitation, then refused to have the matter discussed in the presence of the jury: no evidence was permitted on the subject, and no directions were to be given in respect of it. His Honour, in a procedural judgment given in the absence of the jury, explained his ruling thus: 6 UNREPORTED JUDGMENTS "The plaintiff is saying on an accident which he claims occurred on 5 May 1987 and in which he injured his left shoulder. Following that injury he claims that his shoulder gradually deteriorated until eventually he had an operation in June 1991 and since then he has not worked. The defendant's case is that what happened in 1987 was relatively insignificant and that the plaintiff had recovered from the consequences of this accident within a matter of a very short period of time. There was, however, another incident in 1988 and there was another incident in February 1991, and it is also contended that the need for the operations and the subsequent incapacity was referable to the progression of the plaintiff's arthritic condition and also to the very nature of the work which the plaintiff undertook between 1987 and 1991. It is against this background that I was asked to consider the payments of workers' compensation benefits which have been made to the plaintiff since 1991. Those payments total $71,966.96. In addition the insurer has met medical and hospital expenses totalling $30,961. The defendant sought to prove such payments before the jury and to rely upon them to reduce the damages otherwise payable to the plaintiff. The payments were not made in respect of the injury which occurred in 1987 but were paid as being attributable to the plaintiff's incident at work in 1988. It is therefore common ground that these payments are not available by way of defence pursuant to s63(5) of the Workers' Compensation Act, of 1926. The defendant has submitted that unless the jury could bring the payments into account as well as the possibility of future payments, the plaintiff may well be over compensated if it takes a view of the facts favourable to the plaintiff. It seems to me that it would be most unjust if this jury, accepting the plaintiff's case in full, was to include in its assessment an allowance for all wage loss to date, and if the plaintiff was permitted to retain the periodic payments of workers' compensation benefits as well, paid as they were by the defendant's insurer for the same period of incapacity. Mr Nock's submission is therefore an attractive one, but one which I have ultimately concluded, albeit with considerable reluctance, that I cannot adopt." After the jury's verdict was given, the defendant's counsel asked for deduction of all relevant workers' compensation payments. Except for the one small amount referred to, this request was refused. Therefore, neither judge nor jury ever considered in detail whether some or all of the other compensation payments should be deducted. The ultimate situation, then, is this: in a common law action for negligence, it is the plaintiff's duty to establish exactly what damage flowed from the act of negligence complained of, and the right of a defendant to challenge any head of damage alleged. In a case like the present, where the first of a series of incidents is alleged to constitute the tort of negligence, and workers' compensation payments have been made in respect of those incidents, it is necessary to dissect those payments. If they have been made in respect of the alleged negligence, they should be deducted. On the other hand, if they had been made in respect of later incidents, they should be disregarded as irrelevant. Without such a dissection, one cannot arrive at a justifiable result. His Honour's ruling on the question should be quoted. He said:- "The conclusion I reach is that the jury is not concerned with the question of compensation payments. They will be a matter for me." URMAYNE NICKLESS LTD t/as IPEC TRANSPORT GROUP v DWIGHT (Clarke AJA) 7 Mr Semmler SC, learned senior counsel for the respondent, submitted that under s89(1) of the Supreme Court Act the judge had a discretion to withdraw "all or any" of the issues from the jury and that this is what Studdert J did. This may be so (although his Honour did not mention s89(1)). However, if that is what his Honour did, he nowhere heard evidence on the question of dissecting the payment, much less decided it. He could not permit the jury to do it, and he would not do it himself. In these circumstances, the appellant has some reason to complain about the ultimate result. There were some other matters which were debated in this extraordinarily difficult case. One related to the complication arising from the fact that the appellant had different insurers at the time of each of the incidents. I cannot see how this had anything to do with the running of the action. It may have caused and obviously did cause some problems for Mr Nock, but that had no relevance to judge or jury. Again, we were reminded that the relevant Workers' Compensation Act relating to the first incident was the Workers ' Compensation Act 1926, and the one relating to the second and third incidents was the Workers' Compensation Act 1987. That consideration, again, seems to me irrelevant to any issue in the case. A third matter, which is more troublesome, relates to the use we can make of the judgment of Burke CCJ in the workers' compensation proceedings. Since the respondent did not oppose its tender, I suppose we can use it as new evidence. But insofar as his Honour found, for example, "it would be ridiculous to find that the applicant's present state (which was no different from his state at the time of Studdert J's judgment) results from the injury of May 1987", we are bound by a jury verdict not challenged as perverse to hold the opposite. On the other hand, insofar as the respondent's application alleges that "total incapacity" arose from the second incident, it underlines the conclusion that Studdert J should have heard evidence as to the nature of the compensation payments, as that statement is hardly consistent with the respondent's case at the trial. It reinforces an observation which Clarke AJ made in argument: "A man can hardly be totally disabled twice". A fourth matter concerns the evidence which the appellant would have led if Studdert J had invited it to do so on this issue. We saw a document which was a proof of "evidence" by some insurance clerk. It would have been wholly inadmissible if tendered, since it consisted of no more than this gentleman's opinion on many issues, some of them legal issues. However, it would surely have been possible for the appellant to produce some oral evidence if put to the test. For these reasons I am of the view that the following orders should be made: 1. Appeal allowed 2. Verdict and judgement set aside 3. Order a new trial on the question of quantum 4. The respondent to pay the appellant's costs of the appeal, but to have a certificate under the Suitors' Fund Act in respect thereof. 5. The costs of the trial to abide the costs of the re-trial. Stein JA I agree with the judgment of Meagher JA and the orders he proposes. There should be a new trial on the quantum of damage. Clarke AJA I agree that the appeal should be allowed and a new trial of the damages issue ordered. I do not with respect, agree with Meagher JA's statement that a judge is entitled to withdraw any issue from the jury provided he or she 8 UNREPORTED JUDGMENTS decides the issue withdrawn. In my opinion, where a trial is held with a jury the general principle which applies is that the judge decides all questions of law and the jury all questions of fact. There are some apparently anomalous situations recently created by statutory power to dispense with a jury but otherwise the general rule applies. Subject to this reservation I agree with Meagher JA's reasons. Appeal allowed. Verdict and judgement set aside. Order a new trial on the question of quantum. The respondent to pay the appellant's costs of the appeal, but to have a certificate under the Suitors' Fund Act in respect thereof. 5. The costs of the trial to abide the costs of the re-trial. BYNE Counsel for the Appellant: D Nock SC Solicitors for the Appellant: Hunt & Hunt Counsel for the Respondent: P Semmler QC/ L Grey Solicitors for the Respondent: McLellands