Reported Decision : (2002) 23 NSWCCR 736 Compensation Court of New South Wales CITATION : Towers v SAS [2002] NSWCC 51 PARTIES : Malcolm Towers SAS Trustee Corporation MATTER NUMBER(S) : 4223 of 2001 JUDGMENT OF: Bishop J at 1 CATCHWORDS: Assessment of Compensation :- LEGISLATION CITED: CASES CITED: DATES OF HEARING: 14th June 2002 DATE OF JUDGMENT: 07/10/2002 FOR APPLICANT: Mr B Slowgrove instructed by Taylor & Scott LEGAL REPRESENTATIVES: FOR RESPONDENT: Mr T Ower instruct by Brian Matthews JUDGMENT: 1. This is an appeal by a former member of the Police Service against a determination made on 31 January 2001 by the Police Superannuation Advisory Committee by which determination an increase was approved of the applicant's pension from 72.75 per cent to 77 per cent payable from the date of application for an increase which was 25 August 2000. The percentages relate to his salary of office. The relief sought was that the applicant's superannuation pension should be increased to 85 per cent of his salary of office as from the date of his discharge of 6 May 1999. 2. The background to this is explained by reference to the relevant part of the provisions of s 10(1A) of the Police Regulation (Superannuation) Act 1906: (1A) Subject to this section, the annual superannuation allowance for a disabled member of the police force is: (a) an amount that is equal to 72.5 per cent of his salary of office; and (b) except where paragraph (c) applies, an additional amount this is: (i) not more than 12.25 per cent of his salary of office; and (ii)commensurate, in the opinion of the Board, with his incapacity for work outside the police force; (c) … 3. The applicant had had a number of injuries during his police service more fully set in Exhibit A. The relevant injuries were accepted by the respondent as having been caused by the applicant being hurt on duty. Those injuries were: 1. Tendonitis right shoulder 2. Instability left ankle and degenerative changes of the cuneio-first metatarsal joint and talonavicular joint. 3. Low back pain with L4/5 disc protrusion and L5/S1 disc degeneration. THE EVIDENCE 4. The only oral evidence was given by the applicant himself who is 54 years of age and resides at Banora Point up near Tweed Heads in the northern part of New South Wales. He joined the Police Service in 1967 having attained the intermediate certificate at school and having worked for a period with the Post Master Generals Department as it then was without acquiring any other trades or qualifications before joining the force. After some early service he was posted for a period to Gunnedah and then to the Tweed Heads area where he had been for 19 years before his discharge on 6 May 1999 with the rank of Incremental Sergeant. In the course of his career he did normal promotional examinations which included Aboriginal Awareness and various supervision certificates. He has not been in any employment since his discharge. 5. He indicated that at the present time he is restricted in sitting or standing for any length of time without getting symptoms in his back and down his legs. Sudden twisting or bending causes problems and he has found that this makes his concentration in carrying out manual tasks and his communication skills worse than they were. In regard to his ankle he said that his foot was deformed and demonstrated that he wore special boots for support and that the ankle tends to give way from time to time with excessive standing or walking producing pain and swelling. Lifting his arm above his shoulder is not easy and he cannot lift any weights above shoulder height. 6. From what he knew about the area where he lived he was unaware with any control room jobs with private security firms and that he felt that he would be unable to drive a motor vehicle all day. He could not even do that for a few days per week. His ability to use a computer he indicated was restricted to the basics of what he had to do in the Police Service. In his latter years in the service he had taken pain killers from time to time and he conceded that he was doing a greater proportion of supervisory duties as a Sargent in the later years. He also did some paper work duties. He had not made any particular attempts to get work or to look for jobs in the Tweed Heads area since his discharge. He conceded that his main problem was his back and denied that he had been sitting without complaint for up to an hour while being vocationally assessed by CRS. He maintained that he was unable to indicate whether he could manage the job of a console operator. 7. The applicant was a straight forward and acceptable witness but gave an impression of being somewhat introverted and despondent about the position in which he found himself. 8. The medical and other material tendered for the applicant comprised firstly reports of Dr Black, a medico legal consultant, apparently without post graduate speciality qualifications. In his earlier examination on 4 May 2000 he confirmed that the applicant was suffering from right shoulder tendonitis, L4/5 disc herniation and injury to the left ankle which was also the subject of degenerative changes. He felt that the applicant was unfit for the duties of a police officer but was fit for light sedentary work which did not require full use of the back, right shoulder or left ankle. In a further examination of 19 May 2002 he found that the conditions from which the applicant was suffering were subjectively worse but that there was some objective confirmation with regard to the position with the right shoulder by way of ultra sound examination. At this time he was expressing the view that the applicant was not able to manage any full or part-time work on the open labour market and that he would need to do any work at his own pace. 9. Exhibits C and D were functional and vocational assessments by CRS Australia. It was stated that the applicant was co-operative but there was a suggestion that he managed better shoulder movements and sitting tolerance than he professed without much discomfort. The conclusion was one of fitness for sedentary work on a part-time basis with regular changes of position. The author of the report noted the applicant's own statement that he did not expect that he would ever return to work. The vocational assessment supported the conclusion of a fitness to return to part time employment. A number of vocational options were listed. The first of these was a telephonist/query operator for a taxi company. This involved telephone work, input of data into a computer and liasing with customers and drivers. Shifts were six to eight hours in length and the labour market opportunities were considered in the report to not only be minimal but that in recruiting previous experience was desirable. A similar type of position with a limousine company was regarded as unsuitable because of inadequate computer literacy and very limited job availability due to the tourism down turn. An assessment was also made a private investigators duties but it was indicated that such jobs could have extensive physical demands and long periods remaining stationary in vehicles or carrying our surveillance. The job of a security control room operator was another one where previous experience was considered important. However private security companies tendered to require their employees to be able to work in static and mobile security duties as well as in the control room. It was conceded in the report that the applicant would not be able to do this although the control room operator job on its own might well be within his capacity. 10. The respondent tendered reports from Dr Dodd the applicant's treating orthopaedic surgeon and another orthopaedic surgeon Dr Watson. The former indicated that the applicant would have difficulties with bending, lifting and the like and the type of occupation for which he was fit would be sedentary with an ability to move about as required for reason of his back problem. Examples given were real estate or travel agency work. The latter doctor considered that there was a fitness for semi-sedentary duties. Heavy manual work involving prolonged standing was unsuitable and he too concluded that jobs such as selling real estate or life insurance would be appropriate depending on the applicant's motivation and education. 11. The overwhelming evidence suggests that any fitness for employment which the applicant has is of a part-time nature only. The job of a casual security control room operator might well be within his suitability if it was findable. Part-time work for a few shifts a week as a console operator would seem to be also within his capacity as far as the medical material is concerned. THE LEGAL PRINCIPLES APPLICABLE 12. The interpretation of the relevant part of s 10(1A) set out above has been the subject of a number of decisions. It is convenient to deal with a number of them. 13. The first case to examine the section in any degree of detail appears to have been Shepherd v State Authorities Superannuation Board (1996) 12 NSW CCR 710. Here Neilson J concluded that the issue to be determined with regard to additional amount referred to in subs (b) was an economic one. It was an inquiry similar to that which is carried out under s 40 of the Workers' Compensation Act where the minimum amount payable is 72.75 per cent of the salary of office. His Honour also concluded that the assessment was to be done of the ability to earn on the open labour market reasonably accessible to the particular applicant. A similar approach to the labour market had been adopted by Duck J in Madden v State Authorities Superannuation Board (26 February 1993 unreported). 14. The second decision to which reference should be made is that of Poole v State Authorities Superannuation Board (2000) NSW CCR 633. Here Curtis J agreed that the section referred to incapacity in the economic sense which he interpreted as the ability to obtain paid employment. He also found in the circumstances of that particular case that the additional amount could be claimed or paid beyond the date of probable retirement of the former police officer because the operating legislation unlike the Workers' Compensation legislation put no inhibitions on this. His Honour further concluded that the s 40 discretion was not applicable in an exercise like this. 15. In Carrette v SAS Trustee Corporation (2001) 21 NSW CCR 586 Neilson J again examined the section. He confirmed his previous view that the concept therein of incapacity for work referred to a diminution of ability to earn in the open labour market reasonably acceptable to the former officer. 16. He went on to conclude in the circumstances of that case that on the analogy of s 40 of the Workers Compensation legislation it was not open for the former officer to have an additional amount awarded under the section where the sum of the increased pension and the actual earnings or ability to earn after the injury exceeded the probable earnings but for the injury ie the salary of office. 17. The type of reasoning in the cases of Shepherd and Carrette were followed by Ashford J in Sanders v State Authorities Superannuation Board 25 September 2001 unreported and Armitage J in Naylor v SAS Trustee Corporation 10 April 2002 unreported. 18. Although the reasoning in Shepherd and Carrette has been followed on a number of occasions there are some aspects involved in that reasoning with which I do not agree. The first point relates to the conclusion that the section is not designed to operate so that the combination of the pension of the former officer and the actual earnings or ability to earn exceeds the then current salary of office. The section simply does not say this. There is no ambiguity in the terminology of the section as far as this issue is concerned. It is also significant to note that the only reason why the analogous position applies in the Workers Compensation legislation is because of specific legislative provision. There is no ground for reading into s 10 such a policy consideration unless necessary to make the section work. 19. Further difficulties emerge with the analogy of s 40. The Workers Compensation legislation has provision for ongoing increases and decreases in entitlement to compensation as circumstances dictate. S 10 only has the option of an increase within limited parameters and no provision for decrease. S 40 also as is well known imports into the judicial process a very well established area of discretion. As pointed out by Curtis J. in Poole such does not appear in s 10. 20. The Shepherd line of authority is in my view correct in that the labour market referred to is the labour market reasonably open to the former officer. This is however justifiable on the well known principle that you take a plaintiff as you find him according to the common law. It does not require the importation of s 40 into the different statute. 21. With regard to the arguments submitted by counsel for the respondent during addresses on the situation of the hermit in the remote mountain area, if such a former officer in that hypothetical example, or in a case where the former officer had perhaps moved overseas to live, applied to the Committee for an additional sum to be fixed under subs (b) it is highly unlikely that such application would be successful without very detailed supporting material. 22. In broad terms I would support the approach demonstrated by Curtis J in Poole's case. It is a value judgment in the light of the circumstances of the individual case. A monetary assessment of the ability to earn is a useful tool in carrying out the task mandated in the subsection as is that of the percentage diminution in the available market that was adopted in Poole's case. After all the additional amount must be commensurate … with his incapacity for work outside the police force . 23. This really approaches an inquiry as to the range of duties for which the former officer is not fit. 24. It was firmly submitted by counsel for the respondent that the inquiry with regard to the labour market was an objective theoretical one and not related to where ever the applicant might happen to be. For the reasons which I have set out above I do not think this argument is sustainable. CONCLUSION 25. The applicant's own evidence together with other material makes its clear that at best the applicant's capacity relates to part-time work. I do not consider on the evidence as a whole that this is a case where the applicant has been left with such a minute capacity to work that he should be regarded as totally incapacitated. The vocational reports underline the difficulties in obtaining suitable work. As remarked earlier the applicant's restrictions are found in three area of his body and would probably limit him in view of his educational qualifications to part-time clerical duties or a couple of shifts per week as a console operator. From the applicant's own evidence of what he knows of the area where he lives and from the other evidence put forward in the vocational reports I consider that it should be concluded that as a result of his certified disabilities the applicant's capacity to work should he so desire outside the police force has been reduced by 60 per cent. This would entitle him to an additional payment under s 10(1A)(b) of 7.35 per cent of his salary of office rather than the 4.25 percent granted to him on his application. 26. There was some degree of discussion as to whether this increase should date from the applicant's retirement or from the time of his application pursuant to s 10(1A). The increase appealed from which was awarded was dated from the application for the increase. Early authorities of this court support such an approach (see McDonnell v State Authorities Superannuation Board Manser J 30 October 1992 unreported and Madden's case (supra)). I see no reason to differ from that approach. 27. Accordingly I set aside the determination of the Police Superannuation Advisory Committee of 31 January 2001 and find that the applicant is entitled to an additional payment pursuant to s 10(1A) of 7.35 per cent of his salary of office dating from 25 August 2000. 28. As the appeal has been successful I order the respondent to pay the applicant's costs thereof. Mr B Slowgrove instructed by Taylor & Scott appeared for the applicant Mr T Ower instructed by Brian Matthews appeared for the respondent DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.