New South Wales Court of Appeal CITATION : Eltin Open Pit Operation v Jones [2001] NSWCA 247 FILE NUMBER(S) : CA CA 40876/00; CL 107/00 HEARING DATE(S) : 31 July 2001 JUDGMENT DATE : 31 July 2001 PARTIES : Eltin Open Pit Operation Pty Limited (Appellant) Matthew Kevin Jones (Respondent) JUDGMENT OF : Meagher JA at 42; Giles JA at 43; Studdert AJA at 1 LOWER COURT JURISDICTION : District Court LOWER COURT 107/99 FILE NUMBER(S) : LOWER COURT Williams DCJ JUDICIAL OFFICER : COUNSEL : A.C. Bridge SC/D. Priestley (Appellant) B. Gross QC/J. Wynyard (Respondent) SOLICITORS : Hunt & Hunt (Appellant) Boyd & Longhurst (Respondent) CATCHWORDS : Negligence - assessment of damages - employment injury - allowances for past wage loss and future loss of earning capacity and for future domestic assistance - whether such allowances erroneous. LEGISLATION CITED : Workers' Compensation Act DECISION : Appeal allowed. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40876/00 MEAGHER JA GILES JA STUDDERT AJA Tuesday 31 July 2001 ELTIN OPEN PIT OPERATIONS PTY LIMITED v MATTHEW KEVIN JONES JUDGMENT 1 STUDDERT AJA: In this appeal, the appellant, Eltin Open Pit Operations Pty Limited, challenges the quantum of damages assessed in the District Court by Judge Williams in proceedings brought against the appellant by the respondent Matthew Kevin Jones. 2 On 20 October 2000, his Honour having found the appellant to have been negligent in the circumstances alleged by the respondent, went on to assess damages and the plaintiff recovered a verdict of $553,174. There was some adjustment for workers' compensation payments received and his Honour directed the entry of judgment for the plaintiff in the sum of $551,069. 3 In the notice of appeal filed the appellant asserted that the judge fell into error on the issue of liability as well as the issue of damages. However, the appeal on liability has not been pressed. 4 The respondent was injured in the course of his employment with the appellant just two days after he commenced to work for it at its mine at Blayney. The respondent was employed as a nipper and the mine was a hard rock mine. As a nipper, the respondent assisted the operator of a machine which was used to drill holes for the placement of explosive charges in the rock. The respondent was injured when he lost his footing and fell whilst carrying a number of rock bolts. 5 The respondent sustained what his Honour found was "a reasonably significant injury to his back" . No doctor was called to give evidence but many reports were placed in evidence and his Honour reviewed the medical evidence in the course of his judgment in a manner to which no exception has been taken. It is unnecessary for present purposes to review the detail of the many reports considered by his Honour and referred to in his judgment. 6 The evidence established, as his Honour found, that the plaintiff had suffered a mild disc herniation at the L5/S1 level. His Honour accepted that the plaintiff had continuing pain and discomfort in his spine and that this could be very disabling and frustrating. In addition, there was an element of functional overlay but his Honour found this to be compensable. 7 The assessment of damages in this case was governed by the Workers' Compensation Act 1987 and his Honour assessed damages as follows: Allowance for non economic loss $88,040.00 Past economic loss 40,000.00 Loss of earning capacity 380,000.00 Allowance for future domestic care 42,500.00 Out of pocket expenses 2,634.00 $553,174.00 Less credit for payments under the Workers' Compensation Act 2,105.00 $551,069.00 8 Section 151G governed the allowance for non-economic loss and the amount awarded under this head represented forty percent of the maximum sum which may be awarded in a most extreme case. The appellant does not challenge the assessment for non economic loss and his Honour's findings relevant to that assessment, and to which I referred, were plainly open to him on the evidence. 9 The focus of this appeal is on the allowances made by his Honour in the assessment of damages for past economic loss and for future loss of earning capacity. It is also contended that the judge erred in making the allowance for future domestic care. 10 It is necessary to record something of the respondent's work history. 11 The plaintiff, who was born on 16 July 1972, left school at the age of sixteen and completed an apprenticeship which equipped him for employment as a spray painter. He obtained a position in the panel beating industry and worked there until 1996 when he sustained a serious injury to a knee which required a knee reconstruction procedure. After that operation the respondent travelled overseas and the position he took up with the appellant was the first employment undertaken by him after he returned to Australia. 12 The respondent started work with the appellant on 21 October 1996 and he was injured on 23 October 1996. It does not seem that he had any time off from work initially and treatment for his back has been conservative throughout. After a period of light duty the respondent resumed his work underground as a nipper in December 1996 and he continued in that work until October 1997. 13 The next position which the respondent held was doing work as a cotton chipper at Trangie but the evidence was that this was too taxing for his back and the respondent obtained a position operating a tractor at Narromine instead. He left that work also because of his back. 14 There appears to have been then a period of unemployment before the respondent obtained work as a salesman with Matlock Security on the central coast. He did this work for three or four months and then on 12 January 2000 he obtained the position in which he continued in employment up to the time of trial. This was work as an industrial painter with Warren Yachts at Kincumber. 15 It was agreed at the trial that the respondent was earning $500 per week nett with Warren Yachts and he had been earning $550 per week nett when he was employed with the appellant. 16 The trial judge made a number of findings relevant to the respondent's claim for loss of earnings and loss of earning capacity: (i) the injury to the respondent's right knee did not preclude the respondent from working as a miner or from working elsewhere; (ii) the respondent's injury has precluded him from undertaking reasonably heavy work and will do so in the future. The respondent would be unable to return to mining and he is probably unfit for his original occupation as a motor vehicle spray painter. 17 Those findings were open to his Honour. 18 The basis upon which the judge arrived at the figure of $40,000 for past economic loss is addressed in his Honour's reasons for judgment. 19 There was a period of 104 weeks during which the respondent was apparently unemployed altogether. The judge expressed himself, however, as not being persuaded that the full period of time off work should be allowed as referable to the injury. His Honour said: "Having regard to the evidence, it is my view that the past economic loss is incapable of being accurately calculated. Doing the best I can, I allow the plaintiff the sum of $40,000 in respect of past economic loss. I make that calculation based approximately on half the economic loss claimed of $86,400 on the basis that in regard to the 104 weeks half of that is referable to not being able to work because of his spinal injuries being a material factor and in regard to the forty weeks related to his new job that an allowance of a difference of $300 nett per week should be made to reflect the likelihood of him being able to earn that much as a miner and him being able to earn that much doing extra overtime in a new job." 20 Then, turning to the future, his Honour said: "In regard to future economic loss, as I have already indicated there seems to be little difference between what the plaintiff might have been able to earn as a miner and what the plaintiff would be able to earn doing overtime with his current employer. His current employer manufactures very large yachts and the plaintiff apparently has, and this is not contested, opportunities for overtime and travel overseas to service the firm's product. The plaintiff says, and again this is uncontested, that he has had to turn down overtime that he would otherwise have done because of his back and it seems fairly clear from the medical reports that whilst the plaintiff can carry out his current occupation, it is necessary for him to tailor the way he carries out that work to minimise exacerbations to his spinal pathology. There is no reason to suppose that the plaintiff would not continue to work to age 65 and using the 5% tables the multiplier is 894. A discount for contingencies should be made and I see no reason to interfere with the normal discount of 15%. It also seems to me that one would have to factor into the future economic loss situation the following considerations. If the plaintiff continued to work as a miner it is unlikely that he would have continued to earn at the rate an underground miner earns for the rest of his life. That is probably physically impossible, mining being a job basically for younger and fitter men. Further I have to take into account a contingency in regard to his current employment that there is a possibility that the amount of overtime currently enjoyed would not continue at its present rate for the foreseeable future or until the plaintiff achieves the age of 65, the normal age of retirement. Again, it seems to me that the question of future economic loss, while some guidance can be obtained by a mathematical calculation using the figures I have referred to, that that would not truly reflect the actuality. Again, doing the best that I can on the available evidence it seems to me that an appropriate figure to allow for future economic loss is the sum of $380,000.00. In reaching this figure, I have used the multiplier referred to above, discounted the final sum by 15% but reduced the net economic loss to take into account the other matters to which I have referred, to a figure in the vicinity of $400.000 net per week." 21 His Honour's judgment reveals that in assessing the allowance for future economic loss, what his Honour did was to capitalise $400 per week on the five percent tables and then apply a discount rate of fifteen percent. However, the figure that this exercise produced should have been $303,960. The sum of $380,000 allowed by the judge approximates to the capitalisation of $500 per week on the five percent tables and the application then of a discount of fifteen percent. 22 It has been contended on behalf of the respondent that his Honour did intend to provide for a loss of $500 per week and $400 represents a transcript error or some other inadvertent lapse. I do not accept that submission. His Honour's choice of $400 as a weekly measure of the ongoing loss of earning capacity is explicable in the setting in which it appears in the judgment and I see no reason to doubt that the judge did intend to measure such lost capacity of $400 per week. Hence the assessment should not stand. 23 In any event, it seems to me that to measure the respondent's ongoing loss of capacity at $400 per week is altogether too generous. 24 His Honour was plainly influenced in doing so by having regard to the earnings of hard rock underground miners and also to opportunities for overtime in the work the respondent was doing with Warren Yachts. As to the former activity, the evidence disclosed that the mine where the respondent had worked for the appellant closed in December 1999. Moreover, his Honour had made a finding that he was not persuaded that mining was going to be the respondent's career but for his accident in the mine. That his Honour was not persuaded that the respondent was going to pursue such a career was not surprising, having regard to the respondent's evidence to the effect that from the outset he was uncomfortable working underground. His evidence was to the effect he was anxious underground from day one. In these circumstances, what the respondent could theoretically have earned in an area of employment that he was unlikely to have undertaken in the future, was not an appropriate measure to employ in arriving at an allowance for loss of earning capacity for the respondent. His Honour had to bring into account the extent to which the respondent would have availed himself of the capacity lost if he had retained it. 25 Turning to the assessment based on loss of overtime, it does not seem to me that an analysis of the evidence that the respondent gave would warrant the loss being measured at $400 per week. His Honour said after reviewing the respondent's evidence: "Apparently the job offers as much overtime as people are prepared to work and the plaintiff has indicated that it would be possible for him to earn as much as $2,000.00 per week gross. However, he is unable to accept overtime because of ongoing problems with his back. He also has a floor manager who is aware of his back problem and the type of work that he does with the company does not involve him in as much physical activity as other persons so employed." 26 The evidence that the plaintiff gave was as follows: "Q. Are you casual or permanent? A. I'm employed casually but I'm capable of doing like 30, like I can do anywhere up to 70 hours, 80 hours a week if I was capable to do it but I don't. Q. How many hours are you working a week? A. Thirty-eight. ………… Q. Does your back limit the number of hours you can work? A. Some weeks it does. Q. Are you paid on an hourly basis? A. Yes. Q. What is the hourly rate? A. $16.00 an hour. Q. If you work more hours, is there an overtime arrangement or does it just stay at sixteen? A. There's overtime arrangement Q. Are there weeks in which you do work more than the 38 hours? A. Yes. Q. What's the maximum number of hours you've worked, say, in the last - well since you've started there, in one week? A. Five hours I think, 5 or 6 hours, I can't quite remember, there's not that many more than you know, a normal week. Q. Were there more hours on offer if you could have done them? A. Yes. Q. You mentioned a figure earlier, how did you arrive at that figure, you mentioned 60 or 70 hours a week? A. Because that's what I get told every week, they say to me, it's about time you done some overtime. Every week, every week-- Q. --Who says this to you? A. The head painter. Q. Would you do that if your back was alright? A. If my back was alright I could be earning $2,000.00 a week if I wanted to. Like I could be sitting down there at work killing myself, having no life, working - just working my guts out, but I just can't do that." 27 To work six hours overtime to which the respondent referred results in earnings of approximately $100 per week nett. However, to earn $400 per week by way of overtime would involve working twenty-four hours per week overtime. The evidence did not warrant a finding that on the balance of probabilities that amount of overtime would have been available to the respondent for the rest of his working life, even if he had wanted to do so much overtime if uninjured. There was nothing in his previous work history to invite the inference that the respondent would have worked twenty-four hours per week overtime on a regular basis and he gave no evidence that he would have done so. 28 It was submitted on behalf of the appellant that $100 per week was a fair measure of the loss of earning capacity for the future but in my opinion that submission ought not be accepted. 29 The respondent is a young man and he has a back which is susceptible to further injury. The restrictions which his Honour found that the respondent has, place him at a disadvantage on the labour market and do limit him in the opportunities for overtime in his present work. In all the circumstances, it seems to me that an appropriate allowance for loss of earning capacity in the future would be $190,000, which approximates to measuring the lost capacity at $250 per week, again by reference to the five percent tables and applying a fifteen percent discount. 30 I return to consider the allowance for past economic loss. In the period that the respondent was employed by the appellant until 9 October 1997, it does not appear that he suffered any loss. After the brief work experiences as a cotton chipper and as a tractor operator, the respondent did only three to four months work as a salesman on the central coast. This means that there was a period of approximately two years in which the respondent did no work and in which he had a restricted capacity for work. 31 The evidence covering the period to the date of trial was unsatisfactory. His Honour did not accept that the plaintiff was totally incapacitated for the two years he did not work but certainly there was evidence given by the respondent that he endeavoured to find work in the extended period of unemployment. Then the respondent was entitled to have taken into account the limitations on ability to do overtime in the period he was working for Warren Yachts up to the date of trial. It was not possible for his Honour to make an allowance with mathematical precision but I am not persuaded by the evidence that the allowance made by his Honour warrants disturbance in this Court. 32 Turning to the issue of the allowance made for domestic care, a very substantial claim was presented based on evidence of an occupational therapist, yet none of the doctors whose reports were relied upon in the respondent's case addressed such claim. 33 The respondent's claim under this heading was largely rejected. However, the basis upon which the judge made the allowance for domestic services that was made was that his Honour regarded it as not inconceivable that as time went by and as the plaintiff became older, the need for domestic care would slowly increase. What his Honour endeavoured to do as he expressed it, was to award the respondent "a cushion payment in regard to future domestic care" 34 The only doctor who addressed this claim for domestic services was Dr Bodel, and it is clear from his Honour's remarks that the judge accepted Dr Bodel's opinion. Dr Bodel's evidence is to be found in two reports. In the first report of 21 July 2000, the doctor dealt shortly with the claim for domestic care, saying: "The patient is working full time as an industrial spray painter. In my view, if he can manage that he can manage domestic household maintenance and cleaning activities. Although he does have quite genuine pathology, he is in my view fit to undertake normal household maintenance activities." (White Book, 169) 35 In a subsequent report of 31 July 2000, having considered the claim for past and future domestic assistance and the occupational therapist's report supporting it, the doctor said: "The patient at this stage does not require domestic assistance for household maintenance or cleaning activities as I believe he can undertake these activities done slowly and carefully if he is capable of full time work as an industrial spray painter. I do not believe that living in shared accommodation or in independent accommodation would make any difference to his requirements..." 36 It was in this report that he went on to say that the respondent should be able to take out the garbage and mow the lawns and that he should be able to wash the car and do his own shopping. 37 Dr Bodel did not opine that there would be a need for domestic care in the future; nor did any of the other doctors whose reports were placed before the trial judge. 38 It does not seem to me that the evidence proved an entitlement to recover that sum which the judge allowed for future domestic care. However, the approach of allowing some form of cushion to recognise the chance that there may be a time reached in the respondent's life when his back will deteriorate to a degree warranting some domestic aid has to be evaluated. It seems to me the appropriate allowance for this would be a modest sum and the figure I consider would be appropriate is the sum of $10,000 39 For the above reasons, I am of the opinion this appeal should be allowed and the judgment of Judge Williams should be set aside. 40 In lieu thereof I propose that that judgment be entered in favour of the plaintiff in the sum of $328,569, together with his costs. That sum is made up as follows: Allowance for non economic loss $88,040.00 Allowance for past economic loss 40,000.00 Allowance for loss of earning capacity 190,000.00 Allowance for future domestic assistance 10,000.00 Out of pocket expenses 2,634.00 $330,674.00 Less payments made under the Workers' Compensation Act 2,105.00 $328,569.00 41 The respondent should pay the appellant's costs of the appeal, but should have in respect thereof a certificate under the Suitors' Fund Act . 42 MEAGHER JA: I agree. 43 GILES JA: I also agree. 44 MEAGHER JA: The orders of the Court are the orders proposed in the judgment of Studdert AJA. ********** 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. 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