NEILSEN v LACHLEY MEATES (FORBES) PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL Mason P, COLE and STEIN JJA 6 May 1998, 15 May 1998 [1998] NSWCA 156 Workers Compensation — partial incapacity — proper exercise of discretion under s40(1) Mason P I agree with Stein JA. Cole JA I agree with Stein JA. Stein JA This appeal concerns a claim for compensation for partial incapacity for work for 4 days in April 1994. The appellant worker was a boner and slicer employed by the respondent, Lachley Meats (Forbes) Pty Ltd. He left work in the afternoon of 19 April 1994 and went to his doctor. The medical practitioner gave him a certificate for restricted duties. Armed with the certificate, he attended work on 20 April and asked for suitable duties. He was not given any work because the boners and slicers went out on strike over an industrial grievance. Mr Neilsen agreed that if he had been uninjured, he would not have worked during the strike. Curtis CCJ found: I have to weigh his evidence of a preparedness to work on light duties when uninjured during the time when his mates were on strike against the objective probabilities and I do not find him convincing. I believe that he probably would have, commendably, remain [sic] steadfast with his workmates in their action for better industrial conditions. (AB 35 W-Y) The claim before the Compensation Court was one under s38 and s38A of the Workers Compensation Act 1987 (the Act). His Honour dismissed this claim. While an appeal was launched against this conclusion, it was not pressed at the hearing of the appeal. At the heel of the hunt before Curtis CCJ it appears that an alternative submission was made which was based on s40 of the Act. No amendment to the application was sought or made. His Honour dealt with the matter thus: In the alternative, while not expressed in the Application for Determination, he may have perhaps pressed a claim pursuant to s40 of the Act. S40 requires that I find the amount which the worker would probably have been earning but for the injury and deduct from that in the first step the amount which the worker would have been able to earn in his injured condition. It seems to me that upon the worker's evidence that which he would have been earning but for the injury is manifestly nil. In any event, were it not so and there were a mathematical difference between what the worker was able to earn and that which he would have been earning but for the injury, the amount is to bear such relation to the circumstances as may appear proper in the present case and in all the circumstances I do not think it proper that the worker should receive payments pursuant to compensation statute when his workmates otherwise similarly placed received nothing in respect of the days in respect of which he claims. (AB 36 E-I) 2 UNREPORTED JUDGMENTS Counsel for the appellant submits that his Honour erred in law in his finding of 'nil' under s40(2)(a) of the Act. It is said that he misdirected himself as to the nature of the inquiry in the first step. It is further submitted that his Honour made no assessment under s40(2)(b) of the appellant's ability to earn as a result of the injury. Finally, it is submitted that his Honour's exercise of the discretion under s40(1) miscarried for three reasons:- a) the discretion cannot be exercised unless the preceding steps have been properly carried out, and they were not; b) an irrelevant consideration was taken into account; and c) a proper exercise of discretion cannot lead to a 'nil' result applying Kesen v Luke Singer Pty Ltd (1989) 18 NSWLR 566 at 568. In terms of carrying out the s40(2) exercise, his Honour was given little evidence or assistance. At AB 25 the judge asked if a wage schedule was to be tendered. Counsel for the applicant asked counsel for the respondent if $354.50 was agreed. Counsel for the respondent accepted this and informed his Honour that the parties agreed that the relevant award rate for the subject period was $354.50 per week. In the circumstances, I find it difficult to know what figure, other than the agreed award rate, could have been arrived at in the s40(2)(b) step. Leaving this to one side, and on the assumption that his Honour was in legal error in the first step under s40(2)(a) in his finding of 'nil' and in failing to make a finding under s40(2)(b), but expressly without so deciding, it is convenient to turn to the arguments on discretion. As far as the first argument is concerned - that the preceding steps must be properly exercised before the discretion can be applied under s40(1) - it seems to me that his Honour assumed this to be so. The short reasons that he gave were that, assuming the probable earnings of the worker were not 'nil' (as he had found) and that there was a quantifiable difference between what the worker was able to earn and that which, but for the injury, he would have earned, the judge would have exercised the discretion under s40(1) to refuse the claim. I can see no error in this approach. His Honour was not examining the discretion on the basis that the first step under s40(2)(a) produced a 'nil' result. To the contrary, he was assuming that the step produced a finding. The second submission is that it was irrelevant to take into account that the applicant would receive compensation payments while 'his workmates otherwise similarly placed received nothing'. I am unsure if it is an irrelevant factor or not. What is readily apparent on a reading of the judgment is that Curtis CCJ found that the worker would have joined his co-workers in their strike action as a demonstration of solidarity. Accordingly, he would not have carried out the light duties if they were on offer. This factor is undoubtedly relevant in the exercise of the discretion and would lead to the same result. Finally, it is submitted that, conformably with Kesen, a finding of zero cannot be a proper exercise of the discretion (see 568 F-G). However, the court said (at 569) that it was not determining a situation where a partially incapacitated worker 'declines to work, or who by some means puts it out of his power to do so'. It seems to me that this is one such case. The exercise of the discretion was not carried out contrary to law or principle and I am unpersuaded that this court should interfere with its exercise. I would dismiss the appeal with costs. Appeal dismissed with costs. URJ NEILSEN v LACHLEY MEATES (FORBES) PTY LTD (Stein JA) Counsel for the appellant: M J Joseph SC Solicitors for the appellant: White Barnes Counsel for the respondent: J Merkel Solicitors for the respondent: McCabe Brown