Pirie v Franklins Ltd [2001] NSWCC 167

Reported Decision : (2001) 22 NSWCCR 346

Compensation Court of New South Wales

CITATION : Pirie v Franklins Ltd [2001] NSWCC 167 Clive Pirie PARTIES : v Franklins Ltd MATTER NUMBER(S) : 46175 of 1999 JUDGMENT OF: Neilson J at 1 CATCHWORDS: Elements of Workers Compensation :- LEGISLATION CITED: CASES CITED: DATES OF HEARING: 10/09/01 EX TEMPORE JUDGMENT DATE : 09/10/2001

FOR APPLICANT: Mr M L Snell instructed by Carroll & O'Dea appeared for the applicant. FOR RESPONDENT: LEGAL REPRESENTATIVES: Mr D Hall instructed by Moray & Agnew appeared in the interests of QBE. Mr D Saul instructed by Hunt & Hunt appeared in the interests of GIO of NSW. Mr J W Catsanos instructed by Moray & Agnew appeared in the interests of Allianz Insurance.

JUDGMENT: 1. Mr Clive Pirie of Wallarah claims weekly payments of compensation from 10 February 1991 to 31 March 1991. However, the evidence discloses that the applicant actually returned to work on 31 March 1991, so the claim ought be from 10 February 1991 to 30 March 1991. The applicant also claims weekly payments of compensation from 6 March 1999 to date and continuing for total incapacity. However, it is common ground that 6 March was in fact a Saturday and accordingly the claim for weekly payments ought commence on 8 March 1999. The applicant also claims a lump sum compensation under s 66 for 10 per cent permanent impairment of the neck and 13 per cent permanent loss of efficient use of the applicant's right arm, presumably at or above the elbow, together with, if appropriate, a consequential lump sum for pain and suffering pursuant to s 67. 2. To deal with these claims it is necessary to compartmentalise them, as counsel approached the matter in their addresses. The closed period in 1991 represents time that the applicant had off work to undergo quadruple coronary bypass surgery. The claim for permanent impairment of the neck stems from a motor vehicle accident in which the applicant was involved, on a periodic journey between his place of abode and his place of employment in approximately 1993. The claim for the permanent loss of efficient use of the applicant's right arm results from the type of work the applicant did for the respondent, which required prolonged handwriting and the use of a computer mouse. As the matter has been approached that should be regarded either as an injury which occurred some time in about 1997 or as a disease process which ended about that time or alternatively a disease process with a deemed date of injury of 5 March 1999. 3. The ongoing claim for weekly payments of compensation effectively results from the termination of the applicant's services by the respondent, notice of which was given to him on 1 March 1999. Before canvassing each of those claims I should set out the background of this matter. The applicant is now 60 years of age, having been born on 6 September 1941. He has dependent upon him for support his wife and two daughters, who are still at school. The applicant's wife is clearly mainly dependent and the applicant's children are wholly dependent upon him for support. 4. The applicant can be described as a self-made man. He left school at the age of 14, not having completed the Intermediate Certificate. He left early because of disagreements with his schoolmasters who tarred him with the brush of his siblings. After leaving school the applicant obtained some menial work in a food store, but then joined TGI Insurance, which later became AGC Insurance. The applicant was initially employed as a clerk in motor claims assessing property damage claims. All told the applicant stayed in the employment of TGI/AGC for approximately 29 years. During that time he worked himself up the ladder of the insurance company. He worked as a recovery clerk, a section head, a supervisor and a claims manager, in fact at the end of this time with AGC the applicant had managed all departments of the insurer. He was at one time the Workers Compensation Claims Manager and became the General Claims Manager after that. He was involved in the latter years of his career with AGC with both claims handling and underwriting aspects of insurance. He left that employment in "1985" and, with his wife, conducted a newsagency business at Kogarah. He pursued that occupation for nearly four years but in 1986 he gave it away because he found it involved long hours of work and also demanding work and he preferred to rejoin the insurance industry. 5. In mid 1986 he answered an advertisement placed in the newspapers by Jardine Insurance Brokers. He was engaged as a consultant in connection with the review of the claims department of the current respondent. Having finished that consultancy work the applicant was employed on a full-time basis by the respondent commencing on 1 July 1987 as its national insurance manager. The applicant served in that capacity until he was given notice of retrenchment on 1 March 1999 after a period of 11 and three quarter years of service to Franklins Limited. 6. The evidence discloses that the applicant had no formal qualifications and achieved what he did achieve through hard work and application. He was aware of persons working in the insurance industry who had academic qualifications and greater qualifications on paper and the applicant worked extremely hard in order to keep up with those who could be seen as his competitors. 7. When the applicant first went to work for Franklins, and I infer it was during the consultancy period, he formed the view that they were at the stage of being almost "uninsurable." A major problem for the respondent had been workers compensation claims. The workers compensation insurer at that time obviously did not want to carry the risk of Franklins Limited further and reopened all the claims files, increased the estimates thereby allowing it to charge "a very greatly increased premium to Franklins Limited for workers compensation." It appears that the applicant managed to find a way around that dilemma. It is clear from Mr Pirie's evidence, unchallenged in this regard, that Mr Pirie salvaged the insurance position of Franklins. He set up a system that permitted Franklins Limited to bear part of the risk of each claim by having deductibles on many of its insurances. These deductibles were in many fields high so that Franklins Limited would have control of most of the claims. The applicant himself said that he set up Franklins as if it were an insurance company. Clearly, the steps taken by Mr Pirie salvaged Franklins Limited insurance position. I have no doubt, and it was not suggested otherwise, that Mr Pirie worked extremely hard in running the insurance side of Franklins Limited, and indeed running many of its claims, in particular public liability claims. 8. In mid 1987, when he commenced with Franklins as an employee, he came to manage about 1,000 workers compensation claims annually. When he started as an employee of Franklins Limited there were about 1,500 to 1,600 claims to be dealt with annually. However, it appears that the number of claims in general escalated over the years and Mr Pirie estimated that there was an increase of approximately 1,000 claims per annum. The applicant saw Dr Robert Gertler, a psychiatrist for his solicitors on 21 February 2001. Dr Gertler obtained a history that at the end of his career with the respondent the applicant was dealing with 6,500 new claims annually. One can see a great escalation in work over the period of time that the applicant worked for Franklins. When the applicant commenced his employment there was one typist to assist him. As his workload increased staff had to be engaged and trained. The respondent was not prepared to pay for experienced insurance staff and the applicant used to recruit workers from the typing pool whom he found to be suitable for working in insurance and he offered such persons a position and trained them in the work of dealing with insurance claims. The applicant himself undertook the training and supervision of staff. It is clear at the end of his career there were nine people in the insurance division of Franklins Limited. They had been engaged and trained by Mr Pirie. 9. The applicant worked long hours, as time went by those hours increased. When he commenced his employment with Franklins Limited the applicant was working between 10 and 12 hours per day. He also used to take work home with him and would spend time working at home nearly every weekend, that could be between 3 and 4 hours of work but could take up the whole of the weekend. It is clear, that after the applicant underwent coronary by-pass surgery, his hours reduced a little but it is also clear that the applicant's working hours then again increased such that towards the end of his career the applicant was working for 12 to 14 hours per day plus weekend work. In addition it must be remembered that the applicant lived in the Hunter Valley and had to commute from his home to the respondent's premises at Bankstown daily, which required a fair amount of travel in addition to his long hours. 10. Everything speaks of the applicant being a very devoted and hardworking employee who spent much of his time working for the respondent. It is clear from Mr Pirie's evidence that he spent very little time with his family, spent very little time caring for his children, as he said in his evidence to me, and has been recorded by medical practitioners, work was his life. 11. I turn now to the various compartmentalised claims to which I have referred. The applicant had for many years been a smoker. He had his first cigarette when he was about 12 years of age. He smoked intermittently in his adolescent years but then became a regular smoker. For somebody growing up at the time the applicant did that is not at all unusual. When the applicant commenced working at Franklins he was smoking between 10 and 15 cigarettes a day. However, once he started working for Franklins his smoking rate increased greatly. He told me that from the time his employment commenced with Franklins Limited his rate of smoking gradually increased. Prior to his coronary by-pass surgery the applicant was smoking between 50 and 60 cigarettes per day, they being Rothmans Filters. This evidence was then given: Question Sir, why was it that you smoked them all the time. Answer Nerves, pressure - it was a gradual increase at work each year, no real increase in the staff until some, I think it's probably 6 or 7 years before I had a full-time girl. Question If I could just go back to the change in your smoking levels and why you were doing that. Answer M'mm. Question You say there was an increase associated, I think it was nerves and pressure were the two terms you used. Answer M'mm. Question When you talk about nerves, what do you mean by that. Answer A feeling of tension the whole time progressively I used to wake up early in the morning, about 2.00 or 3 o'clock and could never get back to sleep and always thinking about cases or what had to be done. Question When you talk about pressure what are you talking about, the same thing or something different. Answer The same thing. 12. The applicant clearly attributed his increased smoking habit to the pressures of his work. The applicant's evidence in that regard has not been challenged at all. The applicant had a number of cardiac risk factors. They are recorded by the applicant's treating cardiologist Dr Fraser Bates as hypercholesterolaemia, being a smoker and having a positive family history of ischaemic heart disease. There is also evidence that suggests that the applicant was hypertensive. 13. The applicant noticed some chest discomfort initially in October 1990 when he was attending at the local show. However, he suffered what appears to be acute chest pain on 8 January 1991. He then consulted Dr Mohan, a general practitioner and was then admitted to Gosford Hospital clearly with angina pectoris. At the Gosford Hospital the applicant came under the care of Dr Bates. From the Gosford Hospital the applicant was transferred to the Royal North Shore Hospital and underwent angiogram which indicated an urgent need for quadruple coronary by-pass surgery. According to Mr Pirie he started having a "heart attack" whilst undergoing the angiogram. It is clear that coronary artery by-pass surgery was performed by Dr Brady, the surgeon at Royal North Shore Hospital, on 13 February 1991. It is in connection with that surgery that the initial closed period claim is made. 14. When the applicant was discharged home his workload did not cease. Files were brought for him by either motor vehicle or a Franklins truck to his home so that he could continue to work on them and give instructions even whilst being bedbound and unable to attend at his place of employment. The submission made is that the applicant's increased rate of smoking accelerated or made worse the applicant's coronary artery disease which clearly is constitutionally based and that that aggravation or acceleration brought forward the need for the coronary by-pass surgery such that the period that the applicant had off when undergoing that surgery ought be the subject of workers compensation. In a report of 22 September 1999 Dr Fraser Bates said this: The aetiological factors causing coronary atherosclerosis in Mr Pirie's case a hyperlipidaemia, hypertension, cigarette smoking and a genetic predisposition with a positive family history of ischaemic heart disease, and a sedentary western lifestyle with a lack of exercise and obesity. His stressful work situation, although not directly contributing to the disease process, can aggravate symptoms of coronary atherosclerosis, producing anginal chest pain, thus indirectly contributing to the disease process by interrupting and preventing adoption of a healthy lifestyle ie regular aerobic physical exercise of at least 30 minutes five times a day, a nutritious low fat diet with three regular meals a day, and aggravation of the smoking habit. Hence, from Mr Pirie's description of his work related responsibilities and his responsible attitude to his occupation, it is probable that his heart condition was substantially contributed to by his work as a claims manager for Franklins. The applicant's solicitors wrote to Dr Bates for a supplementary opinion. That letter, bearing date 29 June 2000, forms part of Exhibit E. The relevant question posed is this: