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: If it is[sic] accepted that Mr Pirie's increased cigarette intake was due to the stressful conditions of his work, together with the sedentary nature of his work and the very long hours he put into his work, is it your opinion that these factors aggravated, accelerated and/or exacerbated his heart disease condition? Dr Bates' reply of 4 July 2000 was in the following terms: Indeed, if it is[sic] accepted that Mr Pirie's increased cigarette intake was due to the stressful conditions of his work, together with the sedentary nature of his work and the very long hours he put in, it is my opinion that these factors aggravated, accelerated and/or exacerbated his known coronary artery disease. 15. That is the opinion of the treating cardiologist, to which great weight ought be given. However, in this case there is no competing evidence from any cardiologist. I therefore have no hesitation in accepting the opinions expressed by Dr Bates. I accept that the applicant's cigarette smoking gradually increased such that his rate went from 10 to 15 a day to 50 or 60 a day in the period from 1987 to early 1991. That clearly was an increased risk factor which accelerated or aggravated the applicant's coronary artery disease bringing forward the need for the coronary bypass surgery which the applicant underwent at the Royal North Shore Hospital on 13 February 1991. If Mr Pirie's cigarette smoking had not so increased it seems to me likely that the coronary bypass surgery would not have been necessary at the time it did become necessary. Furthermore, the applicant's evidence again is unchallenged that his work required prolonged hours and the applicant clearly had a sedentary lifestyle. He had no interests other than his work and clearly the insurance type work that he was doing was purely sedentary work requiring clerical skills, reading, thinking and the like. With the benefit of hindsight one can see how those other aspects of the applicant's work contributed to his coronary artery disease. For example, the evidence contains a report from Dr Assam, a Registrar in Rehabilitation at the Central Coast Area Health Service under whose care the applicant entered a cardiac rehabilitation program on 7 March 1991. Dr Assam records that the applicant "currently has a stressful job as the National Insurance Manager for Franklins". 16. A final assessment following that rehabilitation program is reported on by Dr R M Hughes in a report of 29 April 1991. According to Dr Hughes the applicant "did very well" in the rehabilitation program, however, the report continues thus: However, he still remains a very anxious employee, over and above his bearable stress levels. He is still the overweight anxious middle aged executive, prone to myocardial infarction, so I think it would be advisable if he got the weight off, became fit on his exercise bike, which he has at home, and went to relaxation classes on a regular basis. 17. However, the evidence is that the applicant did not lose weight but in fact increased his weight over the passage of time, no doubt eating more to substitute for the smoking habit which he gave up after the coronary artery bypass surgery and compounded by his sedentary lifestyle. There is in evidence the file of Dr Bates relating to his treatment of the applicant. In a report of 15 October 1991 Dr Bates said this to the applicant's treating general practitioner: His risk factor modification program is taking a battering due to his work commitments, his weight has gone up a little to 88 kilograms, he should weigh 78 or less, his cholesterol he tells me, however, is down to 4.9 simply with diet and he is not smoking. In a report of 24 April 1992 Dr Bates said this: Unfortunately his stressful job in Sydney continues, he has long hours during the day, two small children at home, he is not exercising, his weight has gone up 3 kilograms to 91 kilograms, his cholesterol remains high at 5.9 but at least he is not smoking. In a report of 28 October 1992 Dr Bates said this: I have suggested: 1. That he really needs to review his work situation and try to either get help at work or take some more time off so that he can achieve not only a more effective exercise period but also to try to reduce some of the stress that is placed upon him and to review his eating habits. He desperately needs to reduce his weight towards 83 kilograms, he may need a referral to a dietitian or some other Organisation to assist him in success. 18. The other recommendations made by Dr Bates relate to the applicant's medication regime, the control of his lipids and for a review in a period of nine months. Those observations of Dr Bates and of Dr Assam and Dr Hughes fortify me in the view that the applicant's cardiac condition was accelerated by the type of work that he did for the respondent, in particular accelerated by his increased smoking habit and by his enforced sedentary lifestyle and his inability to exercise for lack of time. Accordingly I accept that the applicant is entitled to compensation during the closed period which I have identified, namely, from 10 February 1991 to 30 March 1991. It is agreed between the parties that the applicant was not remunerated pursuant to any award and accordingly he is entitled to the rate of compensation prescribed by s 42(1) par (d) of the Workers Compensation Act 1987. 19. The next claim chronologically is for impairment of the applicant's neck. There are no records in evidence to suggest when the motor vehicle accident occurred, the applicant thought it was in 1993 or 1994, it has been pleaded as being in 1993. There was no dispute that the applicant was driving from his home to his place of employment, he was stationery at an intersection and that his motor vehicle was struck from behind. On the following morning the applicant woke up with a very stiff neck and felt that all the muscles of his neck were stiff and he had a headache. The applicant has noticed ongoing problems with his neck since that time. The applicant frankly concedes that he did not lose any time from work as a result of the neck injury and that he did not seek any medical treatment for it, that he merely self medicated with the use of Panadol or the like. A submission was put by Mr Saul for the respondent in the interests of the insurer at risk 1993-1994 that the accident could have occurred at any time. However, it is abundantly clear from Mr Pirie's evidence that records were available to the respondent to pinpoint the occurrence of injury and those records have not been produced and put into evidence. 20. The applicant was driving a company motor vehicle, the company motor vehicle was damaged. The damage to the company motor vehicle had to be processed through Franklins insurance claims unit. On p 12 of the transcript of evidence given on 20 February 2001 details are given of the records that were made and of the procedures that were gone through to process the property damage claim. Those records would be available to the respondent and could be put into evidence if, for example, the accident did not occur in 1993 as pleaded and as suggested in evidence. I accept that the accident happened in 1993 and the applicant injured his neck. The applicant clearly did not complain to anybody about his neck at work and put up with it. Such allegations are usually met with a degree of cynicism but that cynicism is not reflected in this case in either the way the applicant was cross-examined or in the opinions of the medical practitioners. I accept that the motor vehicle accident happened, that it happened in 1993, that the applicant injured his neck and has since that time ongoing problems with his neck. 21. I turn now to the orthopaedic evidence regarding the applicant's cervical condition. The applicant was seen by Dr Murray Stapleton, a general surgeon, on 4 June 1999. Dr Stapleton's report is of not much utility to me in any regard because he has not set out his findings on examination and fails to make any diagnosis. However, he accepted that the applicant was genuine in his claim and thought that the injury was typical of a whiplash injury. Dr Stapleton added this comment which I believe to be accurate: It should be also remembered that he was one who was prepared to put up with discomfort because of a loyalty to Franklins, in that sense he feels so badly let down. The doctor is referring at the end to the circumstances of the applicant's termination of services but he is clearly referring to the fact the applicant did not make much of his neck injury because of his loyalty to the respondent. 22. The applicant was seen by Dr Wolfenden, a consultant neurologist, at the request of the applicant's solicitors on 21 March 2000. Dr Wolfenden had available to him x-rays of the applicant's cervical spine which showed narrowing of the C5-6 and C6-7 disc spaces with associated degenerative changes. Dr Wolfenden thought the applicant's neck injury was due mainly to injury to the muscles and ligaments of the neck and was unable to see any definite evidence of a disc protrusion, although he noted that there were degenerative changes in the cervical spine. Dr Wolfenden thought the applicant had a 10 per cent permanent impairment of his neck. 23. The applicant saw Dr Brian Stevenson, a consultant orthopaedic surgeon, on 29 March 2001 for one of the insurers of the respondent. Dr Stevenson sets out a report of a x-ray of the applicant's cervical spine made on 8 April 1999. Not only are there changes shown at C5-6 and C6-7 but also at C3-4. Dr Stevenson thought the applicant sustained a cervical strain which "should resolve satisfactorily." He noted that there was evidence of cervical spondylosis or degenerative changes in the neck and pointed out that that was degenerative and was not related to the motor vehicle accident. He did not find that there was any assessable disability in the applicant's neck referrable to the motor vehicle accident. 24. On 31 May 2000 the applicant came under the care of Dr Stuart Riley, an orthopaedic surgeon at Hornsby. His diagnosis was of cervical spondylosis. He thought that it was probable that the motor vehicle accident involving the cervical strain injury exacerbated the pre-existing arthritis in the applicant's lower cervical spine. He thought the applicant had a 15 per cent permanent impairment of the neck, of which you would attribute two-thirds to the motor vehicle accident and one-third to the underlying cervical spondylosis. 25. The other orthopaedic evidence before me comes from Dr James Bodel qualified by one of the insurers of the respondent. Dr Bodel saw the applicant on 1 December 2000. He points out that the cost of the repairs to the applicant's vehicle was approximately $1,500, clearly relating to the quantum of the claim for property damage which was processed by the Franklins' Insurance Claims Department. He accepted that the applicant had established degenerative changes or cervical spondylosis in the neck. He thought that it was probable that some additional structural damage did occur in the motor vehicle accident which was itself relatively minor. He thought that the applicant had a 10 per cent impairment of function in the neck, half of which was due to the motor vehicle accident in question and the other half due to the underlying constitutional or developmental condition of cervical spondylosis. 26. I accept that the applicant was suffering from cervical spondylosis, a pre-existing degenerative condition at the time of the motor vehicle accident of 1993. 27. I accept that it was exacerbated or aggravated by the motor vehicle accident. 28. The only real question is the quantum of the applicant's entitlement. On Mr Pirie's evidence the aggravation or exacerbation has been persisting now for eight years, and so one can readily infer that there will be some permanent impairment of the applicant's neck. I accept the opinion of Dr Bodel that the applicant has a 10 per cent permanent impairment of his neck. That, of course, is lower than the assessment made by Dr Riley but it must be borne in mind that the applicant has not ever been greatly incommoded by his cervical condition and certainly did not require any treatment until very recent times. 29. The only remaining question is the extent of the deduction under s 68A. Again I follow the opinion of Dr Bodel. As I have pointed out from time to time where the only diagnosis is of the aggravation of a pre-existing condition both the aggravating injury and the pre-existing condition are each necessary but not sufficient indicating that the extent of a deductible proportion ought be one half. 30. Accordingly the applicant is entitled to an award for 5 per cent permanent impairment of his neck as a result of the injury of 1993. 31. I turn now to the claim in respect of the loss of efficient use of the applicant's right arm. The applicant preferred to write his correspondence, file notes and the like in longhand. He initially attempted to use a dictaphone but found it inconvenient because he was constantly interrupted as he went about his work by having to take phone calls and the like or deal with other staff and to come back to the dictaphone was much more difficult than to come back to something that he had been writing by hand. The applicant developed, what he has referred to to some of the doctors, as writer's cramp. However, that problem has persisted since the applicant stopped working for the respondent. If it were merely scrivener's cramp one would expect the condition to go away when the applicant stopped working. However, it has not. 32. The applicant noticed that the problem persisted with his writing and also with use of a computer mouse which he used in the course of his work. It is to be noted also that the applicant still uses a computer mouse at home to play computer games to fill in his idle time since his retrenchment in 1999. The applicant dated the onset of his symptoms to about 1992 or 1993. He noticed numbness of the right hand and pain in the wrist. He told me this about the progress of the condition: Question As time went on, what happened to this problem with the right hand and hand. Did it go away, get worse, stay the same. What was the position. Answer No, it got worse until probably the last couple of years. My whole hand would go completely numb after using it for a quarter of an hour, 20 minutes. That portion of evidence has led to a dispute amongst the insurers of the respondent, a dispute which I must determine. 33. Mr Saul appeared for the respondent in the interest of the Government Insurance Office of New South Wales at risk between 15 August 1991 and 15 August 1997. Mr Catsanos appeared for the respondent in the interests of Allianz Insurance at risk from 15 August 1997. Mr Saul argues that the last insurer ought pay the applicant's hand condition, and the last insurer points out that the condition did not get worse after 1997 so that Mr Saul's client ought pay for this aspect of the case. Of course there is evidence to support each of those propositions, for example, in cross-examination by Mr Saul the applicant gave this evidence: Question Is it your evidence that the problems in your right hand and your right wrist got progressively worse as time went on. Answer Yes. Question By the time that you ultimately were made redundant 1999 your right arm was at its worst. Your right arm problems, your right wrist and hand problems were at their worst. Answer Yes. 34. However, under cross-examination by Mr Catsanos the applicant reiterated the evidence that he gave in chief and said that the last two years his condition basically stayed the same and agreed with the proposition that that was consistent with the fact that he was using the dictaphone a little more in the last two years of his work. 35. The medical evidence concerning the applicant's right hand complaints is somewhat confused. Dr Stapleton accepted the applicant was generally suffering from pain and discomfort in his wrist but he did not consider that work was the causative factor. The important thing from that statement is his acceptance that the applicant's problems were genuine, not whether work was a factor which must be considered in light of the diagnosis and no diagnosis is given by Dr Stapleton. 36. Dr Wolfenden, who examined the applicant on 21 March 2000, could find no neurological abnormalities in either the applicant's upper limbs. He pointed out that no definite abnormality had been found in nerve conduction studies or EMGs to explain the applicant's problems in his right hand. However, it is noteworthy that the applicant gave the doctor a history of the numbness being in the ring and little fingers of the right hand, in the ulnar distribution. Dr Wolfenden thought that the applicant's right arm condition may have been due to some nerve root irritation in the neck with aggravation of that condition by prolonged use of the hand. However, there is no radiological or clinical evidence of cervical nerve root irritation, a fact which Dr Wolfenden himself accepted. Nevertheless he thought the applicant had a 15 per cent loss of efficient use of the right arm below the elbow. 37. Dr Stevenson saw the applicant on 29 March 2000 and found on examination essentially no abnormality in the applicant's right upper limb, in particular he noted no sensitivity of the ulnar nerve to palpation of it adjacent to the right elbow, therefore it is clear that Dr Stevenson was testing for a cubital tunnel syndrome, which must have been raised as a possibility to explain the applicant's complaints to Dr Stevenson. Dr Stevenson thought the applicant may have had some discomfort or "writer's cramp" when writing but there were no remarkable findings in the right wrist, he did not believe that symptoms in the right wrist would prevent the applicant from doing normal office duties or administrative duties, for example, and he did not believe that there was any permanent impairment of the applicant's right arm. 38. Dr Riley has seen the applicant twice. The first occasion was 31 May 2000 and the second occasion was 8 August 2000. On 31 May 2000 Dr Riley did not appear to make any positive finding on clinical examination to explain the applicant's problem in his right arm. He recommended a course of physiotherapy and that the applicant undergo a general aerobic gym fitness program. On the second occasion that the applicant saw Dr Riley, Dr Riley noted inter alia the following: Neurological examination of the upper limbs revealed normal power and symmetrical but sluggish reflexes. Subjectively there was slightly decreased sensation in the ulnar digital nerve distribution to the right hand. There was some mild tenderness over the cubital tunnel and Tinel's test at that side was equivocal. 39. As a diagnosis Dr Riley thought the applicant had a "possible" right cubital tunnel syndrome, being entrapment of the ulnar nerve at the elbow. Dr Riley went on to say this: I do not feel that the patient's work injury, nor his work duties, have caused the `cubital tunnel syndrome' but they have probably aggravated this condition also. This has been created by the repetitive actions and duties required with the patient's occupation, also aggravated by the lengthy work hours and associated work stress suffered by the patient. He went on to diagnose a 20 per cent permanent impairemnt of the applicant's right arm as a whole, of which he attributed two-thirds to work related duties and one-third to the underlying condition. 40. Dr Bodel, as I said, saw the applicant on 1 December 2000. He noted that the applicant's grip strength was slightly weak on the right-hand side. He noted the applicant's right dominant side was half a centimetre greater in circumference than his left, which is a normal anatomical difference. He found no objective evidence of median or ulnar nerve pathology in either limb. Whether the doctor noted subjective findings of a neurological kind as suggested by Dr Riley I do not know. Dr Bodel found no clinical evidence of ongoing pathology in the right upper limb and therefore could not assess any permanent loss of efficient use of the applicant's right arm at or above the elbow. 41. I accept that Mr Pirie has ongoing problems, the ongoing problems of which he told me in his right dominant hand. It is clear from descriptions that he has given to doctors and the description he gave to me that the major effect is in the ulnar distribution of his right hand in the ring and little finger of the hand. The clear suggestion raised by Dr Riley is that the applicant has a cubital tunnel syndrome. This is clearly based on a constitutional condition that has been made worse by the nature of the applicant's work. I accept that opinion. 42. The only assessment of the loss of efficient use of the applicant's right arm is that of Dr Riley. I accept that the applicant does have a 20 per cent loss of efficient use of the applicant's right arm as a whole. The remaining question, of course, is that under s 68A. Here, again, the underlying condition is necessary but not sufficient, equally the work aggravation is itself necessary but not sufficient. In my view the extent of the deductible proportion under s 68A ought be half, such that the applicant is entitled to an award for 10 per cent permanent loss of efficient use of the applicant's right arm at or above the elbow. That finding under s 66, like my earlier finding under s 66, does not entitle the applicant to lump sum compensation under s 67. It must be recalled that these are two different injuries. 43. The remaining question, of course, is the dispute raised between GIO and Allianz. Here the opinion that I have accepted is that of Dr Riley. The diagnosis I accept is that a cubital tunnel syndrome on a constitutional basis which has been made worse by the type of work the applicant performed by the respondent. The underlying constitutional condition can be seen as morbid pathology. There has been aggravation, acceleration and exacerbation of that condition due to the type of work that the applicant performed for the respondent. This case is within s 16 of the Workers Compensation Act 1987. Whilst there was no deterioration of symptoms in the last two years that the applicant worked for the respondent equally that work involved the applicant using a dictaphone, a computer mouse and handwriting and those activities carried the risk of aggravating, et cetera, the underlying constitutional condition. The respondent is entitled to be indemnified in respect of the last award, which I have indicated I shall make, by the last insurer at risk, which is Allianz. 44. I turn now to the major dispute between the parties in this case, which is the claim in respect of the applicant's psychiatric condition. There is no dispute that the applicant has a genuine psychiatric condition that satisfies the test laid down in Yates v South Kirkby Collieries Limited [1910] 2 KB 538. There is also no real dispute that the psychiatric condition results from the applicant's being given notice of his retrenchment on 1 March 1999. There is also no dispute that the applicant is at least partially incapacitated for work, although the applicant's case is that he is totally incapacitated. It is clear from what I have already said that the applicant's work was found by the applicant to be stressful. The applicant sought to tell me, with the benefit of hindsight, that he would have come eventually to some form of "nervous breakdown" at some stage because of the pressure of the work that he was under. That is mere speculation on his part. The fact is he only became psychiatrically disturbed when he received the notice of the termination of his services. 45. There are only, accordingly, two issues for me to determine. The first is whether the respondent has a defence available to it under s 11A of the Workers Compensation Act 1987, and if not whether the applicant is totally or partially incapacitated. S 11A(1) provides: No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to the transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers. Here it is clear that the psychological injury was wholly or predominantly caused by the action proposed to be taken by the employer with respect to the retrenchment of Mr Pirie. The question is whether the action proposed to be taken or actually taken by the employer was reasonable. 46. This area of the law is not without some judicial exegesis. The first case to which I have been referred is that decision of his Honour Judge Burke in Melder v Ausbowl Pty Ltd (1997) 15 NSWCCR 454. At 458 his Honour said this: In a real sense no action can be divorced from the way in which it is performed. The manner of its doing is part of the action. The action is not merely its end result. The action is what takes place to achieve that result. An action is fairly synonymous with a deed. A `good deed ' need not be an instantaneous action. I can help a blind man across a street. It doesn't take long but encompasses a short social interchange as well as the actual guidance. I can have my Alzheimer-affected acquaintance home to a meal. The action or deed takes rather longer but it too includes the whole of the transaction. Similarly, I would think that the action of transferring, demoting, promoting or discharging an employee would encompass the whole of the transaction between the employer and the employee. But it is the action of transferring or whatever, not the whole history of the relationship between the parties nor the subsequent developments that is relevant. What went before or after may be a guide to the reasonableness of the particular action but is not part of it. 47. It is in particular the last sentence of what fell from his Honour that is of relevance in my assessment of the facts of this case. Whilst the antecedent relationship between the applicant and the respondent was not part of the process of his retrenchment, whether that retrenchment was reasonable or not must be seen in the light of their pre-existing relationship. 48. The next case to which I was referred is that of my colleague Judge Armitage in Ritchie v The Department of Community Services (1998) 16 NSWCCR 727. In that case his Honour was impressed by the reasoning of his Honour Judge Geraghty in Irwin v The Director General of School Education (unreported, 18 June 1998, matter number 14068 of 1997). His Honour there adopted what fell from his Honour Judge Geraghty in Irwin's case that under the current version of s 11A the onus falls upon the employer to prove that the action that it took in respect of the retrenchment of Mr Pirie was reasonable. His Honour Judge Armitage continued at par 44: In relation to `reasonableness ', his Honour said at 10 (and I respectfully agree with him): The question of reasonableness is a test that has not yet been addressed in this Court since it is only a recently amended provision of the legislation. It has been considered in the Commonwealth legislation of [sic] Employer's Rehabilitation and Compensation Act 1998 and particularly s 4(1). There have been a number of cases which have considered very similar or if not exactly the same provisions in the Commonwealth. The question of reasonableness is one of fact, weighing all the relevant factors. That test is less demanding than the test of necessity, but more demanding than a test of convenience. The test of `reasonableness' is objective and must weight the rights of employees against the objective of the employment. Whether an action is reasonable should be attended, in all the circumstances by questions of fairness. His Honour Judge Armitage at par 45 went on to consider the cases decided under the Commonwealth legislation that were referred to so succinctly by Judge Geraghty in Irwin's case. 49. The final decision to which I have been referred and of which I must take note is a decision of the Court of Appeal in Manly Pacific International Hotel Pty Ltd v Doyle (1999) 19 NSWCCR181. In that case Fitzgerald JA with whom Mason P concurred said at par 27: The criterion of s 11A(1) par (b) is `reasonable action taken ... by or on behalf of the employer ' the words, "with respect to," are of a wide application, transferred demotion, promotion, et cetera, may be the subject of the action or proposed action taken by or on behalf of the employer or matters with respect to which the action or proposed action is connected or may themselves constitute the action or a part of the action. However, the provision does not speak of an injury caused by the transfer, demotion, promotion, et cetera of a worker but an injury caused by the action taken or proposed to be taken by or on behalf of the employer with the respect to such a matter. The words `performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers ' all clearly refer to matters other than the performance by the worker of his duties. The paragraph is thus looking to the worker's response to the employer's action or proposed action not to the worker's response to the employment conditions encountered after a transfer, demotion, promotion, et cetera. Senior counsel for Mr Doyle put the matter well when he submitted that the section was looking to the process of transfer, demotion, promotion, et cetera, rather than those acts per se. 50. The view I have formed on all the evidence is that the action of the respondent with the respect to the process of the retrenchment of Mr Pirie was not reasonable. There are a number of reasons for making that finding. Mr Catsanos rightly submitted that I am not concerned with whether the retrenchment was justified or not, that I am not in a position to make the decision or unmake the decision which the employer actually made. However, in conformity with what fell from his Honour Judge Burke in Melder's case one must have regard to the antecedent relationship of the parties to gauge the reasonableness of the process actually adopted in this case. 51. Mr Pirie's case might be seen as an unusual one in regard to retrenchment. He was not a mere labourer, factory worker, tradesman or clerk, he was in fact an executive of the respondent responsible for all insurance aspects of the respondent's operation throughout the Commonwealth of Australia. Mr Pirie had served the employer for eleven and three-quarter years. When he came to work for Franklins he rescued its insurance operations obviously to the satisfaction of his employer. He obtained his position at Franklins through the intermediation of Jardine Insurance Brokers. In 1993 that same firm of brokers made a report on the insurance operations of Franklins Limited which was adverse to the applicant. The applicant gave this evidence, which is unchallenged: There had been an adversary [scil.adverse] report to management by the insurance brokers. In my opinion the report was most inaccurate. I, as a result, I did a fairly lengthy memo to the financial director and it was completely vindicated and company-wise no further action was ever taken on that report. Not long after that, the author of the report was in the office and he was walking down and I was walking up, he put his hand out to shake my hand and I just knocked it away. I went to the men's restroom and the room spun and I became unconscious. 52. Evidence was then given that the applicant was then transported by ambulance to the Canterbury Hospital. A hospital report has been admitted from the Bankstown Hospital. That records that the applicant was admitted to the Bankstown/Lidcombe Hospital on 7 December 1993. The hospital report indicates that the applicant had "earlier received a bad report" and goes on to indicate that the applicant gave a history of "significant recent stress in relation to his job." No firm diagnosis was come to as to the syncopal attack which the applicant appears to have had at that time but the hospital report indicates that there was "a lot of stress compounding Mr Pirie's problems at this time." Clearly there had been an adverse report given about Mr Pirie's management of the insurance operations at Franklins by Jardines, which was drawn to his attention, which he had an opportunity to rebut and which he rebutted successfully. 53. In January 1997 Mr Guy Adrian Robertson was appointed the General Manager Finance of the respondent. Between 1984 and 1996 Mr Robertson had been an employee of Jardines. From 1984 until 1990 his work was in insurance but as a financial director. He also told me that between 1989 and 1990 he managed the New South Wales office of Jardine Insurance Brokers managing a team of 60 people. However, from 1990 until 1996 the applicant worked for Jardines on the property side. Jardines are a conglomerate based in Hong Kong, the most recent version of their name is that of Jardine Lloyd Thompson Insurance Brokers, which must have a number of subsidiaries including JLT Claims Management Services Pty Ltd. In early 1998 Mr Robertson took on responsibility for the insurance area of Franklins Ltd. As far as he could recollect the annual cost of claims to Franklins was between $5 and $6 million per annum. He formed this view: We are not in the insurance business and the decision was taken that that area of the business could be best managed by professionals, and the decision was taken to outsource that part of the business to Jardine Lloyd Thompson Insurance Brokers. 54. One might think from his having described Jardine Lloyd Thompson Insurance Brokers as "professionals" that there was some discrimen between that firm of brokers and Mr Pirie. However, in another passage in his evidence Mr Robertson said that there were "no insurance professionals" who took the place of Mr Pirie and the team who were retrenched by the respondent. However, there clearly was on the respondent's part dissatisfaction with the way in which Mr Pirie managed the claims made against Franklins. That can be seen from the cross-examination of Mr Pirie by learned counsel for the respondent in the interest of Allianz. That cross-examination commenced in the following way: Question Just in terms of the fact that the work was being outsourced to JLT, obviously the insurance area was costing Franklins a lot of money. Answer In relative terms the average cost of the claim hardly increased over the 10 year period. Question Is it fair to say, Mr Pirie, that you are, and no criticism here, sir, but your particular approach to claims was very litigious. Answer I would say it wouldn't have been more than 1 to 2 per cent of the claims that were litigated.... Question You understand the concept that I was putting to you, Mr Pirie, that your approach to claims management generally was quite litigious. Do you accept that or not. Answer I don't believe so, no. Question When Mr Robertson became involved at Franklins a couple of years, I think you said before you were finally terminated, did he have any role in actually reducing the number of claims that were coming through. Answer In probably the six months before he came across to the office, probably three or perhaps four times. I sort of put aside any claims that I thought were worth discussing with him, direct involvement, no. Question If I were to suggest to you that his involvement actually involved the reduction in claims from 1,700 to 1,100 matters. Would that - how would you deal with that proposition. Answer Well, I can't recall. Further in evidence the applicant was asked these questions: Question The time you were working for Franklins before your retrenchment, you were aware of what the insurance division was costing Franklins. Answer Yes. Question Were you aware whether any inroads were made on the cost of that by Mr Robertson prior to your retrenchment. Answer No. He had very little input. 55. The input that Mr Pirie conceded was that Mr Robertson introduced a second firm of solicitors to act for the respondent. The applicant used the firm of Glover & Glover for litigation within this State but Mr Robertson introduced Abbott Tout and those two firms thence shared the workload of litigated claims between them. Mr Pirie also conceded that there was one additional matter where Mr Robertson requested forms to be completed by solicitors as to the current state of each matter which they were handling. 56. In re-examination the applicant gave this evidence: Question In the lead up to when you were retrenched in March 1999, was there any suggestion made to you, by anyone in authority, that you way was other than adequate. Answer The inference I got from Mr Robertson was that he would prefer to throw cash at them rather than drag them out. Question When was this inference. Answer Perhaps a month, six weeks before the retrenchment. Question Were you told that you should do things in any other way or your employment would be at risk. Answer We just discussed some claims and he just threw a figure on the table, in my opinion no real justification for the figure to carry out his wishes. Question Was it suggested at that stage that your employment was at any risk. Answer No. 57. I accept that Mr Pirie had absolutely no knowledge of the retrenchment which was announced to him by Mr Robertson on 1 March 1999. The inference is clearly available, and I draw it, that Mr Robertson was dissatisfied with the way in which Mr Pirie was conducting the claims management of Franklins Limited and decided to "outsource it" to his former employer, Jardines. Mr Pirie was given no notice of that decision and was not asked to make any input or submission to a proposition that the insurance claims unit of Franklins be closed and that the work be outsourced. It was strenuously submitted to me by Mr Catsanos for the respondent in the interest of Allianz that this was nothing "personal" as far as Mr Pirie was concerned. That submission is based on semantics, the question is what does "personal" mean? Clearly, Mr Robertson was dissatisfied with the way Mr Pirie was conducting the management of claims. Whether it was dissatisfaction with him or how he did things is little to the point, the fact is that it reflects directly and affects directly the applicant. 58. The applicant, as I said, was an executive, he was responsible for this aspect of the respondent's operations. The proposal conceived by Mr Robertson was to directly abolish the area of work that he was doing, thus affecting him and also other staff in the insurance area of the respondent. In the peculiar circumstances of Mr Pirie's case it is my view that justice, equity and fairness require the respondent to at least consult Mr Pirie as to its proposal. The respondent did not do so, in fact the respondent, it appears, directly excluded Mr Pirie from the process and insured that he would not find out about it. Of course one cannot postulate that in every retrenchment a worker ought be consulted beforehand. If a company's trading arm is losing money and the executives deem it necessary to close that trading arm or that division then the input of an ordinary worker in a factory or a shop would be of no assistance whatever to the employer in coming to a decision. However, here the applicant's input may have been of some benefit. At least, in my view, the applicant was entitled to be heard on the proposal. That view is reinforced when one considers the fact that Mr Pirie became a form of saviour to Franklins in his dealings with its insurance at his commencement in 1987; that he successfully made a submission against an inaccurate report made by Jardines in 1993, and it may well have been that, given some input, he may have been able to change the course of affairs to the respondent's advantage in 1999. However, he was not given an opportunity to do so. Bearing in mind the antecedent relationship of Mr Pirie and Franklins Ltd I again take the view that the applicant was entitled to have some input into the process of the retrenchment but he had no such input at all. 59. The next area which must be borne in mind, is the suddenness, if I may use the expression, of the axe that fell upon the applicant. On 1 March 1999, a Monday, he was asked to attend Mr Robertson at his office at Chullora. The applicant and his claims unit worked at Bankstown. The applicant did so. He was told by Mr Robertson that the company had decided to outsource its insurance operations with the immediate effect that he and his staff would become redundant within a month. Mr Pirie was offered the opportunity to leave immediately but he decided to stay on and work the month to ensure a smooth transition or handing over of claims from his own insurance unit to Jardines. This clearly came as a grave shock to the applicant. It is clear the applicant would not have immediately comprehended the full effect of what he was told at the short meeting with Mr Robertson. If anything were to bring home to him the force of the information that was conveyed to him on 1 March 1999, it was the fact that on 2 March 1999 an officer of Jardines entered the claims unit of Franklins Ltd in order to oversee or take part in the transfer of the claims from Franklins Ltd to Jardines. 60. The third area which I would identify as being of relevance to the question of reasonableness was the relatively short period of notice that the applicant was given, a period of one month's notice. A period of one month's notice might be usual for a factory worker or a shop worker, even perhaps for a tradesman, but a period of one month's notice for a senior executive appears to me to be quite unreasonable. One does not readily find available jobs for insurance claims managers or insurance company managers at short notice. The period of notice given to Mr Pirie must be contrasted with a period of notice which Franklins Ltd had given to other employees earlier. 61. Exhibit B in these proceedings is a circular letter from Franklins Ltd to its employees at the Chullora which circular bears date 15 July 1997. The first part of that letter recites the decision to close the respondent's Chullora warehouse and for the Ingleburn warehouse to be the sole hub of grocery distribution for Franklins in New South Wales with support from a "TNT overflow facility at Moorebank." The first half of that letter also gives the reasons for that decision. The last part of the letter is as follows: We are making a genuine and meaningful effort to minimise the impact on the Chullora warehouse team by: making this announcement as early as we possibly could to give the warehouse team the maximum possible notice; offering all Chullora warehouse team members the retrenchment package we negotiated with their union some time ago; providing all team members with references and records of employment; engaging the services of internationally known employment consultant Ernst & Young and establishing a job centre on site at Chullora to people affected. The job centre offers a large range of services explained in the enclosed information bulletin, and will also offer family counselling and financial advice and planning. Between now and early September the Chullora warehouse will operate as usual, giving team members time to adjust and make arrangements. If you have any questions please contact your office management team. 62. Clearly warehouse workers were given at least six weeks notice of retrenchment. The Chullora warehouse was to operate "as usual until at least early September" and presumably from that time on it would be run down with the retrenchments being performed over a period of time. The period of notice given was to ordinary warehouse workers who in the main would be storeman and packers, from this Court's experience, was at least six weeks and probably more, yet Mr Pirie was only given one month and held a much more senior position, a much more responsible position and would find it more difficult than storeman and packers to find comparable employment. In my view the period of notice was unreasonable. 63. The fourth area which was the subject of complaint to me by Mr Pirie in his evidence, and a submission on his behalf by counsel, was the lack of the provision of counselling services. It is clear from the circular letter which I have just quoted that when it was proposed to retrench warehouse staff at Chullora family counselling was made available and financial advice and planning was made available as well as a job centre being established in order to help retrenched workers to find alternative employment. No counselling of any form was offered to Mr Pirie or indeed to the members of his team nor was any financial advice or planning service offered. As to employment opportunities I shall comment separately. 64. In cross-examination Mr Robertson gave this evidence: Question Sir, are you aware that it is a relatively common practice in the industry to use specialists in personnel to conduct exit interviews, deal with counselling, replacements and things of that nature. Answer Yes. Question You would accept that that is a desirable state of condition. Answer If I thought it was warranted, we would have provided that service. Question Can we take it the reason you did not provide the service in this instance is that you decided that it was not warranted. Answer Correct. Earlier in cross-examination Mr Robertson gave this evidence: Question Were you aware that employees who had been involved in that particular round of retrenchments when the warehouse closed in 1997, had been, amongst other things, offered counselling. Did you know about that or not. Answer It was Franklins' policy to offer counselling to those sorts of employees, correct. Question What sort of counselling are we talking about, psychological counselling. Answer Out-placement services. Question Out-placement services would typically include a range of services, which would include psychological counselling, assistance in finding new work and things of that nature. Is that right. Answer Correct. Question Designed to meet the broad range of both occupational and emotional needs of the employee who would have as a consequence of being retrenched. Answer Correct. Question I think you said it is Franklins policy to make the counselling facilities available - your terms was - I hope, and correct me, that sort of employee. What did you mean by that. Answer Well, I guess if what we are leading to in terms of the current team if they had required it it would have been available, it's a small cost. Question I was rather picking up on a term that you had used, now I am just asking you if you would explain what you meant. I think the term that you used when I was asking you about the 1997 warehouse retrenchments - Answer Sure. Question - was that it was Franklins policy to make counselling available to that sort of employee Answer Well, employee. Question I was asking what you mean by that sort of employee. Answer Sure. To any employee. Question Any employee. Answer Correct. Question So the phrase `that sort of' was it had no meaning or context to the answer when you gave it. Answer Correct. 65. Mr Robertson, in my view, made a slip when answering the first of the questions which I have just quoted and did mean "that sort of employee". When pressed to show that there was some discrimen involved he changed his evidence so that the term had no meaning, that it was available to all employees. At p 44 of the transcript of evidence of 26 June 2001 the witness said in answer to my questions that the cost of providing the counselling was of no concern. The only reason advanced by Mr Robertson for not offering any form of counselling service to Mr Pirie or the other members of his team was that they did not ask for it. However, clearly Franklins volunteered it to the warehouse staff whom it proposed to retrench in 1997. I believe that there was some discrimination by Franklins between the warehouse staff and the staff of the insurance unit. Mr Robertson would not admit that there was a discrimination between blue collar workers and white collar workers, but there may have been. There is evidence that staff at the warehouse were unionised but the staff at the insurance unit were not. That may have been another cause of discrimination. However, the fact remains that counselling was seen by Franklins Ltd as a normal part of retrenchment process, it was volunteered to some staff, it was not volunteered at all to Mr Pirie and his staff. The cost was of no moment, according to Mr Robertson, but Mr Robertson maintained that it would have been provided if asked for, although it is clear that Franklins itself had volunteered it to other employees on an earlier occasion. 66. The fact that such counselling of a psychological nature was not provided to Mr Pirie goes again, in my view, to show that the process of the retrenchment adopted by Franklins Ltd was unreasonable. In that regard one must bear in mind that Mr Robertson conceded that there was a personnel department which oversaw aspects of the retrenchment process and that inter alia vetted correspondence between the applicant and the respondent. Mr Robertson gave this evidence: Question Did you shortly prior to announcing these retrenchments on 1 March 1999 have any liaison with the Franklins personnel department regarding how you would go about it, or what would be done. Answer Yes, the correspondence was vetted by personnel and the payroll people would have worked through the retrenchment packages. Question The payroll people working through retrenchment packages is simply working out what people are entitled to. So far as the actual management of retrenchments is concerned you said that the correspondence would have been given. What do you mean by that. Answer All correspondence that went to Clive and at that time went to personnel. Question Would that have included correspondence such as the letter that you were shown of 10 March 1999. Answer Correct. Question The reason for vetting such correspondence, I take it, is trying to minimise any potential threat either legal or economic to Franklins arising out of the retrenchments. Would that be a fair comment. Answer Correct. Question So the vetting that you told us about which was carried out by personnel was carried out for the purpose of trying to minimise Franklins exposure to economic or legal consequences for retrenchments. Yes. Answer You'll have to ask personnel management about that. 67. To me that was Mr Robertson seeking to avoid the import of the preceding questioning which was, of course, that Franklins were doing their best to minimise any financial risk following upon the retrenchment of Mr Pirie and his team, but, of course, did not take the small financial burden of providing counselling. Furthermore, later on in cross-examination, Mr Robertson conceded that he had not discussed with anybody in the personnel management team of the respondent before March 1999 about the provision of out-placement services to Mr Pirie and his team. Whether it was deliberately done by Mr Robertson or merely a question of oversight, it appears to me that it is of little moment whether it was a sin of commission or a sin of omission, but it again indicates that the process adopted by the respondent was not reasonable. 68. The fifth area to which I turn is the provision made by the respondent to try and find some alternative employment for Mr Pirie. It is clear that there were discussions between Mr Robertson and Mr Steven Ball of Jardines prior to 1 March 1999 such that Jardines would endeavour to find alternative work for Mr Pirie, initially doing consulting work and with a view in the long term to finding him permanent employment. Mr Robertson himself advised Mr Pirie on 1 March 1999 that there would be some consultancy work available to him in risk management for the respondent which would require Mr Pirie to visit the various retail outlets of Franklins Ltd and ascertain risks which could be avoided in order to minimise, I infer, both public liability claims and workers compensation claims. 69. At this stage one needs to turn to the chronology of events. As I said the applicant was given notice of his retrenchment on the morning of 1 March 1999. The applicant returned from Mr Robertson's office at Chullora to his office at Bankstown and was followed there by Mr Robertson. Mr Robertson then gave notice of the retrenchment to the rest of the members of the insurance unit. The applicant worked on Tuesday the 2nd and Wednesday 3 March 1999. On 2 March, of course, a person from Jardines entered the insurance claims unit of the respondent. On Thursday, 4 March, arrangements were made for the applicant to have an interview with Mr Steven Ball, who is a senior executive of Jardines here in New South Wales. The interview did not go well for the applicant. On the evening before the interview, that is the evening of 3 March 1999 the applicant had an attack of angina which I am prepared to infer was precipitated by the acute distress that the applicant was undergoing following upon the notice of his retrenchment. The applicant gave this evidence as to what occurred prior to his turning up at the meeting with Mr Ball on 4 March: Question How did you feel when you turned up at the interview on the 4th. Answer Very stressed out. I guess part of the reason is that I had some urgent things I had to do at the office and so I went to the office first and then went into Jardines by train, and I went to where I thought Jardines' office was to find out that I was lost. I went back to Town Hall station and tried to phone Mr Ball to apologise for being late and asked him where the address was, and I had strife with the telephones and I eventually got through. I walked towards Jardines trying to get a taxi, but I ended up walking the whole way so I was very stressed out when I got there. 70. The applicant told me that he had had to walk from the vicinity of Town Hall station to a place "down the back of Wynyard." The applicant told me that the meeting with Mr Ball lasted 20 minutes. The meeting was not conducted in Mr Ball's office but Mr Ball invited the applicant to a cafe downstairs so they could have a cup of tea or coffee over a chat. The applicant's evidence is that he was confronted by Mr Ball, whose first question to him was "What do you believe your strengths are?" Mr Pirie told me that that really "threw him" because he did not contemplate such a formal interview situation. Mr Pirie had dealings over many years with Mr Ball, and indeed Mr Ball was part of the team who selected Mr Pirie to do work for Franklins in 1986 and 1987. As far as Mr Pirie was concerned Mr Ball merely said that Mr Pirie should send to him a curriculum vitae and that he would "pass it on to a couple of mates." Those were not the exact words which Mr Ball admitted to using, but certainly he admitted to using words to the effect that he would pass on the applicant's curriculum vitae to his associates or acquaintances who might be able to find appropriate work for him. Even if Mr Ball used those words Mr Pirie was quite entitled to refer to such persons as some of Mr Balls "mates." The other thing that Mr Pirie obviously found surprising about Mr Ball's initial question is that Mr Ball would well have known of the applicant's abilities and employment history prior to 4 March 1999. 71. What became very clear from the evidence of Mr Ball was that Mr Ball would not recommend Mr Pirie to anybody to carry out the same sort of work that he had done for Franklins Ltd or the sort of work that he had previously performed for AGC. In other words Mr Ball had no confidence in the applicant's ability to carry out the work which he had actually carried out for eleven and three-quarter years for Franklins Ltd. To engage somebody to find Mr Pirie alternative work who had no confidence in his ability to carry out work which he had been carrying out for many years does not appear to me to be at all appropriate. One would wish to engage someone who had Mr Pirie's interests at heart, who would be prepared to listen to Mr Pirie's description of his own abilities and strengths and experience and would seek to find Mr Pirie the very sort of work for which he had become experienced through his work at AGC and Franklins. Mr Ball was not such a person, he was part of the Jardines organisation which had sought to undo the applicant in 1993 and which had dealt with Mr Robertson completely unbeknown to the applicant in order to take the applicant's work to Jardines. One might comment in other situations that there was a grave conflict of interest. Mr Pirie made the point in his evidence that he did not believe either the demeanour, language or body language of Mr Robertson or Mr Ball was supportive of him. 72. I am prepared to accept Mr Pirie in that regard. I did not form a favourable impression of either Mr Robertson or Mr Ball. Mr Robertson, clearly, had a background as a chartered accountant, and one would think a high flying one, he was businesslike, he said that he approached Mr Pirie "professionally" although it had been suggested to Mr Pirie by Mr Catsanos that the demeanour of Mr Robertson was "courteous and gentle." Certainly the man I saw in the witness-box would be more likely to be described as hard nosed and businesslike rather than courteous and gentle and perhaps the description of Mr Robertson's demeanour might be correct that he was "very cold." Equally for Mr Ball became to some extent evasive in answering questions about what work could be found for Mr Pirie. He talked about the applicant doing the risk management, but that clearly involved investigation of accident scenes or potential accident scenes of which the applicant has no experience whatever. He also used words such as "claims technician" to describe the sort of work which might be found for Mr Pirie but when he was pressed to provide examples of what he meant by that it became clear that he was merely referring to the work of what one might call a claims clerk rather than any form of claims manager, and it is to be recalled that the applicant's background was in claims management. Rather than being reasonable in providing the services of Jardines to the applicant to try and find him alternative work the selected source of job assistance was in fact quite inappropriate for the applicant. 73. I accept that he did not feel at all supported by either Mr Robertson or Mr Ball and one can readily understand the nervous breakdown which he underwent on the morning of 6 March 1999. The question which then arises, of course, is whether the unreasonable conduct of the respondent which I have identified was the cause of the breakdown. There is medical evidence to support that. Dr Robert Gertler, under the heading "History" said this: Mr Pirie had absolutely no warning that he would be told this and was shocked. 74. Under the heading "Impressions" Dr Gertler said this: In answer to your third question, Mr Pirie's adjustment disorder with anxious and depressed mood, has developed on the basis of the incident on 1 March 1999 when he was unexpectedly told of his redundancy. He had been coping with his work, albeit under increasing pressure, for a number of years and had prided himself on his ability to achieve positive results for his employer. His employer's action on that day constituted a rejection of Mr Pirie's efforts and professionalism. 75. Clearly that is the inference I draw from the evidence, and the inference which I assume Mr Pirie himself drew and of which the respondent did nothing of any moment to disabuse the applicant. Further on Dr Gertler said this: Mr Pirie's current psychiatric condition was, in my opinion, created by the conditions of his employment to some extent, there were largely a product of the manner in which his employment was ended. 76. It clearly is the view that it was not merely the fact of being retrenched but the manner in which the retrenchment that was affected that was the cause of the applicant's nervous breakdown. 77. The applicant has undergone some occupational therapy to try and get him back into the workforce. An occupational therapist, Rona Griffith, in a report of 20 October 2000 said this: Clive has acknowledged, within the group, how a major part of his life was committed to performing well at work, and his redundancy, and the manner in which this was conveyed to him, has shattered his perception of himself, his self esteem and his confidence in his ability, or, in fact, any point, in finding any other meaningful role or direction in life. 78. The applicant has undergone counselling from clinical psychologist Dr Wallis of the Central Coast Area Health Service. Dr Wallis said this: During the course of the program, I noted Mr Pirie's intense distress and anxiety in relation to his work situation. The loss of his position was a severe blow to Mr Pirie. I also noted that the manner in which the redundancy was communicated to him was extremely distressing. No counselling or other intervention was offered to Mr Pirie and his previous employers expressed no further concern or interest in his welfare to him. 79. In the latter regard one should note a development after the applicant's frank nervous breakdown on the early hours of 6 March 1999. The applicant did not return to work after Friday, 5 March 1999. The evidence of Mr Robertson shows scant concern or regard for Mr Pirie's welfare at that time. This evidence was given in cross-examination: Question By the time you wrote that letter [10 March 1999] you were aware that Mr Pirie had a nervous breakdown on or about 6 March. Is that right. Answer I think Janice Reeds, who was the office manager, had indicated that medically there were some issues. Question You knew he had, what is colloquially referred to as a mental breakdown on or about the 6th. Answer I was not aware of the exact medical condition of Clive. Question What was your understanding of the medical issues, as you term them, at the time you penned that letter on the 10th. Answer I had no - great understanding of, you know, why Clive was not at work or choosing not to take up the option to work out the month. Question Did you have no idea. Answer I mean I was told by - I believe Janice Reeds - I don't believe I had any discussion with Clive that indicated exactly what the medical condition was. Question Had you inquired. Answer I believe I had a discussion with Janice Reeds on that question. Question When Clive did not come to work you asked her `Why is Clive not here?' Answer And I understood, you know, he had some medical condition and was not going to attend work. Question Is how I have just how it happened, that Clive had not appeared at work for some days and then you have said to Janice `Why is Clive not here?', or is there some other scenario, that was, but I mean - Answer I'd given Clive the option to be there or not to be there. Question Clive had been there on the 2nd and 3rd, we have already heard, when he answered the questions in chief, so you knew that Clive was at least initially working on. Answer Correct. Question When he then failed to appear I take it you were curious about what had occurred. Answer I had a discussion with Janice Reeds on that issue. Question Was that discussion initiated, sir, by you or by her. Answer By me. Question Would that discussion have occurred very shortly prior to when you drafted the letter to Clive dated 10 March, which is shown to you in your evidence-in-chief. Answer I cannot recall. 80. It is to be borne in mind that Mr Robertson conceded that there was no question that Mr Pirie was shocked at the meeting that he had with Mr Robertson on the morning of 1 March 1999. One need only look at the answers recorded at line 26 of page 43 of the transcript of evidence given on 26 June 2001 to see that. Knowing that the applicant was shocked and distressed and knowing that some "medical condition" had arisen Mr Robertson appears to have been completely unconcerned as to the state of Mr Pirie's health, and one can see how that may have adversely affected the applicant as recorded by Dr Wallis. 81. For those reasons it is my view that the process adopted by the respondent in the retrenchment of Mr Pirie was not reasonable and that the respondent's defence under s 11A fails. 82. There is no problem with the diagnosis in this case, the diagnoses proffered by the applicant's treating psychiatrist, Dr B K Iyer, is of adjustment reaction - depressed mood. Dr Robert Gertler diagnoses "adjustment disorder with anxious and depressed mood." Dr Wallace diagnoses "adjustment disorder with mixed anxiety and depression." It is very difficult to get any two psychiatrists to agree on any one term, so that they are really all diagnosing the same condition, an adjustment disorder with anxiety and depression. 83. The three counsel for the respondents tendered no psychiatric evidence but there is evidence before me that the applicant has been seen by Dr E Revai, a psychiatrist for the insurance company, and the applicant was also cross-examined about histories given by him to Dr Lewin, who I will take judicial notice of the fact is a psychiatrist often retained by employers in this jurisdiction. 84. The only real question is the extent of the applicant's incapacity. Unfortunately I have not had sufficient time to put all these observations in chronological order. In a report which bears date 1 May 1999 Dr Fraser Bates, the applicant's treating cardiologist said this: His depression would certainly seem to be significant enough for him to be classified medically unfit to work. 85. The applicant was first seen after his nervous breakdown by the locum for Dr Mohan Dr Bhaga on 6 March 1999. He diagnosed total incapacity until 13 March. Dr Mohan saw the applicant on 15 March and certified total incapacity for work until 31 March 1999. 86. In a report of 5 October 1999 the applicant's treating psychiatrist, Dr Iyer, who first saw the applicant on 23 March 1999, said the applicant when last seen on 1 September 1999 was not fit to work. He said that that unfitness for work, not for his pre-injury work but for work, was because of depression which occurred following upon his redundancy. 87. Dr Gertler saw the applicant on 21 February 2000 and thought that the applicant was unfit for his pre-injury occupation "or indeed for any occupation". Dr Gertler pointed out the applicant was depressed and anxious as part of his adjustment disorder, that he had lost his confidence in his ability to re-enter the workplace. In a report of 26 July 2000 Dr Wallis said this: Mr Pirie is unable to work at this time. Depression and anxiety have left him hopeless about his ability to get and maintain a job. Added to that his age and having been made redundant mean the possibility of obtaining work is not good. Prior to this redundancy Mr Pirie had maintained constant employment throughout his adult life. There is little reason to assume that Mr Pirie would not have adjusted well to either an early retirement or obtaining other employment had this redundancy been handled in a more appropriate manner. I cite that for this purpose at this stage of my reasons for judgment to show that Dr Wallis was diagnosing total incapacity, however, that extract which I have just made again takes up the earlier quotation which I made from Dr Wallis commenting on the causation of the applicant's psychiatric condition being related to the process of retrenchment that the respondent adopted on this occasion. 88. Earlier the applicant had been seen on 4 June 1999 by Dr Murray Stapleton, a general surgeon, for Allianz, the last insurer of the respondent. Dr Stapleton said this: The prognosis for the claimant, at least in the short term, is difficult to know because he is so profoundly depressed and certainly, in my view, is in some danger. I say that because although he does not entertain the thought of suicide it would not surprise me if the answer to that was more in the affirmative. 89. Fortunately Mr Pirie has not succumbed to that but clearly Dr Stapleton was impressed by the profound depression of the applicant, which again speaks in the direction of total incapacity. 90. The rest of the medical evidence does not assist me in my current inquiry. Mr Pirie's evidence itself speaks of total incapacity. In cross-examination by Mr Hall, counsel for QBE, this evidence was given: Question Is there anything you think you could do at the moment, workwise I mean. Answer Honestly I don't think so, no. Question You could not even for instance serve in a shop, serving customers, that sort of thing. Answer No, I don't think I could. Question Why is that. Answer I just don't think that my emotional state would allow me to. 91. Mr Pirie's background in insurance claims management, which requires clerical skills, management skills, a lot of reading, writing, concentration, application. The applicant's background would not really permit him to do any manual work, he certainly has no experience of it. The applicant's complaints are of poor concentration, inability to remember things, limited ability to read for any period and if he does read inability to remember what he has read. Clearly he would be unfit for any form of clerical work in my opinion and I must accede to the submission that the applicant remains at this stage and has been since 6 March 1999 totally incapacitated for work. 92. I have inquired of the representatives of the parties whether any further reasons for judgment are required and I am told that none is so required. I should add before making the award that the economics in this case are all one way. The applicant's wages schedule, Exhibit A, shows the applicant's probable earnings but for injury has been $1,139.10 a week. However, the applicant's actual income tax return for the financial year ended 30 June 1998 shows an average weekly earnings of $1,631.25, those sums must be read down to the statutory maximum of $1,000. As I early mentioned it is common ground that the applicant is not remunerated under any award and therefore for the first 26 weeks of each period of incapacity the applicant must be compensated pursuant to s 42(1) par (d). 93. For those reasons I make an award for the applicant for $302.20 per week from 10 February 1991 to 30 March 1991 pursuant to s 36. 94. I make an award for the applicant for $388.80 per week from 8 March 1999 to 31 March 1999. 95. For $395.60 per week from 1 April 1999 to 8 September 1999. 96. Those awards pursuant to s 36. 97. For $459.30 per week as indexed from 9 September 1999 to date and continuing pursuant to s 37. 98. An award for the applicant for $2,000 for 5 per cent permanent impairment of the neck (10 per cent for s 68A) for injury in 1993. 99. I make an award for the applicant for $8,000 for 10 per cent loss of efficient use of the right arm at or above the elbow (20 per cent before 68A) for injury deemed to have occurred on 5 March 1999. 100. I order the respondent to pay the applicant's hospital and medical and like expenses pursuant to s 60. 101. For the avoidance of doubt I make the following findings and declarations: The applicant is entitled to be paid the s 60 expenses referrable to the operative treatment which he underwent on 13 February 1991 and for treatment prior thereto by QBE, and that insurer is to pay the costs of the applicant's subsequent cardiac treatment up until 28 February 1999 because such treatment was a mere following up and checking up following upon the cardiac by-pass surgery. The applicant's s 60 expenses referrable to treatment of his neck are to be paid for by GIO, the insurer at risk in respect of the injury in 1990. The expenses for treatment of the applicant's psychiatric condition and for the treatment of his right arm condition are the responsibility of Allianz. The applicant's cardiac condition has clearly been destabilised or upset or to use more technical language aggravated by the applicant's psychiatric condition and the distress following the applicant's redundancy. The applicant's cardiac treatment expenses since 1 March 1999 are to be indemnified by Allianz. 102. Order the respondent to pay the applicant's costs. 103. Certify two additional conferences each in the sum of $310. Mr M L Snell instructed by Carroll & O'Dea appeared for the applicant. 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. 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