New South Wales Court of Appeal CITATION : Concrite Pty. Limited v. Rogerson [2003] NSWCA 306 HEARING DATE(S) : 9 October 2003 JUDGMENT DATE : 9 October 2003 JUDGMENT OF : Hodgson JA at 1; Tobias JA at 41; Foster AJA at 42 DECISION : 1. Appeal allowed. 2. Orders of primary judge set aside. 3.Order that there be a new trial limited to damages. 4. Respondent to pay appellant's costs of appeal and to have a Suitors' Fund certificate if otherwise entitled. 5. Costs of the first two trials to be in the discretion of the judge hearing the new trial. CATCHWORDS : WORKERS' COMPENSATION - Modified common law action for damages - Assessment of non-economic loss - Threshold for award of economic loss - An irrelevant consideration. LEGISLATION CITED : Workers Compensation Act 1987 ss.151G, 151H Dell v. Dalton (1991) 23 NSWLR 528 CASES CITED : Southgate v. Waterford (1990) 21 NSWLR 427 State Bank of NSW v White (1995) 36 NSWLR 622 PARTIES : Concrite Pty. Limited - appellant Bruce Rogerson - respondent FILE NUMBER(S) : CA 40166/03 COUNSEL : Mr. J.D. Hislop QC with Mr. N.E. Chen for appellant Mr. D.T. Kennedy SC with Mr. D. Andrews for respondent SOLICITORS : Sparke Helmore, Sydney for appellant Rishworth Dodd & Co., Sydney for respondent LOWER COURT District Court JURISDICTION : LOWER COURT DC 4578/00 FILE NUMBER(S) : LOWER COURT Karpin DCJ JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40166/03 DC 4578/00 HODGSON JA TOBIAS JA FOSTER AJA Thursday 9 October 2003 CONCRITE PTY. LIMITED V. ROGERSON Judgment 1 HODGSON JA: On 7 March 2003 Judge Karpin gave a verdict and a judgment for the respondent, in proceedings brought by him against the appellant, in the sum of $349,461.43. The appellant appeals to this Court from that decision. 2 This is not the first time the case has come to this Court. On 26 November 2001 another District Court Judge had given a verdict and judgment for the respondent in the sum of about $326,000.00, and an appeal to this Court from that decision was upheld on 18 September 2002 (cf. [2002] NSWCA 310). On that occasion the Court ordered a new trial limited to the quantum of damages, and that new trial gave rise to the decision against which the present appeal is brought. 3 I will outline the circumstances giving rise to the proceedings. 4 As at 13 August 1998, the respondent was employed by the appellant as a concrete truck driver. On that day he lost his footing when cleaning a chute on the rear of a truck and he fell, landing on his back on a pile of reinforcing mesh. This gave rise to pain in his back and neck and a tingling sensation in one leg. 5 He consulted medical practitioners and was off work until 31 August 1998. On that day he returned to work, and he remained in employment without further time off until March 1999. 6 In March 1999 he voluntarily resigned in order to travel to northern Australia. He had intended to find employment there, but in March 2000 he returned to Sydney. 7 He did not again seek medical attention for difficulties with his back until about the end of 1999 or beginning of 2000. He has not been in employment since March 1999. 8 According to the findings of the primary judge, his capacity for employment is now one third of full capacity; and her Honour held that the accident had reduced his capacity for employment by two thirds. 9 Her Honour put the date, from which this reduction of capacity was demonstrated, as being 3 March 2000. However, in assessing future economic loss, her Honour took into account other health problems of the respondent; in particular, a long standing depressive illness and an associated addiction to Ativan, which has continued and was not exacerbated by the accident; early onset symptoms of Parkinson's Disease; knee problems involving a number of arthroscopies and a serious risk of requiring knee replacement; serious problems with his left arm involving a left ulnar neuropathy which has required operative intervention; and pre-existing degenerative changes to his whole spine. By reason of these problems the primary judge assessed an appropriate discount for vicissitudes at thirty per cent rather than the usual fifteen per cent. 10 The respondent was born in 1950. The primary judge held that he would have worked until age 65 and calculated his future economic loss on that basis. The verdict that she entered was made up as follows: NON ECONOMIC LOSS $ 53,750.00 PAST ECONOMIC LOSS $ 92,737.15 PAST SUPERANNUATION $ 7,418.97 INTEREST ON PAST ECONOMIC LOSS $ 12,018.72 WORKERS COMPENSATION $ 1,152.10 PAST MEDICAL EXPENSES $ 13,382.53 FUTURE ECONOMIC LOSS $140,644.00 FUTURE SUPERANNUATION $ 12,657.96 FUTURE MEDICAL EXPENSES $ 15,660.00 JUDGMENT $349,461.43 11 The appellant relies on the following grounds of appeal: 1. Her Honour erred, when assessing damages, in taking into account irrelevant considerations. 2. Her Honour's findings as to causation are erroneous. 3. Her Honour failed to give adequate reasons. 4. Her Honour erred in her assessment: a. Of the Respondent's work capacity. b. Of the cause of any impairment of the Respondent's work capacity. c. Of damages for non-economic loss and out of pocket expenses. 5. The damages are excessive. 12 The ground which in the result causes this Court to hold the view that the appeal should be upheld is the first ground, concerning irrelevant considerations; and I will return to that in a moment. 13 When the hearing of the appeal commenced, the Court indicated to the appellant a tentative view that this first ground concerning irrelevant considerations was a valid ground and that the result of it succeeding would be a new trial. The appellant was invited to advance arguments as to whether the Court should take some different course, such as assessing damages itself, and the appellant indicated that it did not wish to advance any such arguments. For that reason the Court has not heard arguments from the appellant on the other grounds of the appeal. Those grounds related essentially to the primary judge's assessment of economic loss, and were directed to the proposition that the judge had insufficiently taken account of the respondent's other health problems in reaching the view that the affectation of his capacity for employment by the accident was as much as two-thirds. 14 The Court has accordingly proceeded on the basis that this aspect of the primary judge's decision was correct; and indeed my tentative opinion on that aspect of the appeal is that the primary judge's conclusions as to the degree of affectation of the respondent's working capacity was supportable and not affected by appealable error. I make these comments because the view taken by the primary judge on the affectation of the respondent's working capacity does reflect back to some extent on her view as to non-economic loss, which is the concern of the first ground of appeal. 15 I would however make the broad comment on this aspect of the case that, when one has regard to the adoption of a thirty per cent discount for vicissitudes rather than the usual fifteen per cent, I think it is appropriate to regard the effective disabling consequences of the accident as closer to one half the respondent's working capacity than to two-thirds, when one does fully take into account his other problems. 16 I return now to the first ground of appeal, to the effect that the primary judge took into account irrelevant considerations. 17 The provisions of the Workers' Compensation Act (1987) that are relevant to this case are to be found in s.151G and 151H of that Act as they were at the time relevant to this case. Section 151G ss.(2), (3), (4) and (5) were then in the following terms: 151G Damages for non-economic loss (1) … (2) The amount of damages to be awarded for non-economic loss is to be a proportion, determined according to the severity of the non-economic loss, of the maximum amount which may be awarded. (3) The maximum amount which may be awarded for non-economic loss is $204,000, but the maximum amount may be awarded only in a most extreme case. (4) If the amount of non-economic loss is assessed to be $36,000 or less, no damages for non-economic loss are to be awarded. (5) If the amount of non-economic loss is assessed to be between $36,000 and $48,000, the amount of damages to be awarded for non-economic loss is as follows: … 18 Indexation had the effect that the figures applicable to this case within those sections were $228,350.00 rather than $204,000.00, $40,300.00 rather than $36,000.00, and $53,750.00 rather than $48,000.00. 19 Section 151H ss.(1) and (2A) were in the following terms: 151H No damages for economic loss unless injury serious (1) No damages are to be awarded for economic loss unless the injured worker has received a serious injury or dies as a result of the injury. (2) … (2A) A serious injury is, if received on or after the commencement of Schedule 2 (2) to the Workers Compensation (Benefits) Amendment Act 1991: (a) an injury for which the compensation otherwise payable under section 66 for the loss or losses resulting from that injury is, in the opinion of the court, not less than 25 per cent of the maximum amount from time to time referred to in section 66 (1), or (b) an injury for which damages for non-economic loss of not less than $48,000 are to be awarded in accordance with the Division (whether or not compensation is payable under section 66). 20 Indexation had the effect that the relevant amount applicable to this case was $53,750.00 rather than $48,000.00. 21 It will be seen that the effect of those sections on this case was that, unless non-economic loss was assessed at $53,750 or above, the respondent was not entitled to damages for economic loss. 22 During addresses in the case on 26 February, Counsel for the appellant handed to her Honour a schedule showing the relevant figures for the purposes of s 151G and 151H. In the course of handing up that schedule counsel said to her Honour that "… if the plaintiff does not exceed the 23.5 per cent amount, which is $53,000 odd dollars, the plaintiff has no entitlement ... for any economic loss". A little later he said "I'll urge upon your Honour, that the plaintiff's entitlement to non-economic loss falls below the lower threshold". 23 The schedule handed up by counsel showed the appropriate figure in s.151H ss.(2A) para (b) to be $53,750.00; but in another place it associated the words "lower threshold" with the sum of $40,300 referred to in s.151G ss.(4), being 17.6 per cent of the maximum amount in s.151G ss.(3). 24 The addresses of Counsel finished on 26 February and the primary judge stood the matter over to 27 February. When she came on the bench that day her Honour said this: HER HONOUR: As you will recall from yesterday, my purpose in having you here today was simply to give you some base figures and say to you, "Alright, these will be what will come out in the judgment" which is presently in draft form but I want you to do the calculations and I also wondered if there might be some issue about costs, depending upon what my decision was so I thought I needed to raise that with you. I don't know if there is anything outstanding from the previous proceedings. The determination that will be made - and, as I say, I am not giving you any reasons at this stage because I will be publishing my reasons - there will be a finding of non-economic loss at 20 percent in the worst case scenario, so he is entitled to 20 percent of the monies under s 151G(3). The out of pocket expenses, the total that was put to me of $14,239.83 will be reduced by the amount which was attributed to the Ativan which is not recoverable of $857.30, resulting in past out of pockets of $13,382.53. Future out of pocket expenses, as you agreed, will be allowed at $20 per week on the basis of the requirement for continuing chiropractic treatment and analgesics. The past economic loss, there is of course the amount of $1,152.10 which is, as I understand it, the workers' compensation figure paid to the plaintiff or paid when the plaintiff was absent from work. I have come to the view that so far as his inability to work is concerned, that his past economic loss will be dated from 3 March 2000. The reasons for that will appear in my decision. I don't know that I need to go through the figures that were handed up in a schedule Mr Andrews gave me yesterday. Do you have those separately, Mr Andrews, or do I need to go through them now? 25 The primary judge was then told that non-economic loss assessed at twenty per cent of a most extreme case would disentitle the respondent to damages for economic loss. 26 Her Honour then said this: Well, I rescind the orders I have just made. I regard it as quite inappropriate and unfair that the plaintiff should not - clearly that is not acceptable. A finding that he has only a one-third capacity for work clearly, it seems to me, requires that he should come within the category of somebody who is entitled to recompense for that and I propose to re-think the decision. I am not prepared to end up with something which I regard as unjust, whether it is my mistake in terms of reading the schedule or the way in which it was prepared. 27 The matter was stood over till 28 February, and when her Honour came on the bench on that day she said this: HER HONOUR: This is a matter in which I indicated yesterday that I was going to give you certain determinations so that you could do the figuring of the mathematical matters. We ran into some difficulties. That clearly arises from my misreading of a schedule. I am satisfied that I misdirected myself because clearly in my view the level at which the plaintiff has been disabled by this accident entitles him to a greater result than I had indicated in the sense that I think that his disablement had been inadequately assessed by me when I considered the whole matter. In the circumstances, I propose that the order I will make will be that I assess his non-economic loss at 23.5 percent. Now, do I need to go through the other figures which I gave you yesterday or do you have those properly recorded? 28 In her judgment on this point the primary judge said this: Given his residual capacity for employment, I have come to the view that his whole of body impairment sits at the very threshold of the percentage of non economic loss which has been determined by the legislation as the point at which an entitlement to economic loss arises. I accordingly assess that disability at 23.5385% which results in an award of non economic loss of $53,750. 29 It was submitted for the appellant that the evidence of what the primary judge said, in particular on 27 February, was admissible, and that it was apparent that the primary judge took into account an irrelevant consideration in arriving at the figure for non-economic loss, namely that this was the amount necessary and sufficient to entitle the respondent to damages for economic loss. It was submitted that the case of State Bank of NSW v White (1995) 36 NSWLR 622 showed that this was an irrelevant consideration, and that taking it into account to reach a figure of non-economic loss vitiated the determination. 30 For the respondent it was submitted that the primary judge assessed non-economic loss in accordance with the principles in Southgate v Waterford (1990) 21 NSWLR 427 and Dell v Dalton (1991) 23 NSWLR 528. It was submitted that what was said in discussion prior to judgment, even if indicative of error, did not vitiate the judgment. It was submitted that errors can and should be corrected in a judgment, and that this is what occurred here. 31 In oral submissions Mr Kennedy SC for the respondent submitted that the reference to lower thresholds to which I have referred caused confusion. He submitted that what occurred subsequently was that the primary judge realised that she had not fully taken into account the disablement of the plaintiff in arriving at the figure of twenty per cent as she stated on 28 February, and that when she said that on that day that the level at which the plaintiff has been disabled by the accident entitled him to a greater result, she meant a greater result for non-economic loss. The result of this reassessment was the figure given in the judgment. 32 Mr Kennedy referred us to the judgment of Mahoney JA in State Bank NSW v White at p.627, where his Honour said this: It may be said parenthetically that where such is alleged and where inference is relied upon, the inference must be appropriately strong before the court will come to such a conclusion. It is important to bear in mind that in the course of the formulation of a judgment and in particular an ex tempore judgment given in circumstances such as the present, a judge's mind may vary or fluctuate: it may vary even during the course of formulation of the judgment and the reducing of it to words. It is not readily to be inferred, from changes in verbiage or the like, that a judge has done what is here alleged. 33 Mr Kennedy submitted that the figure arrived at by the primary judge was a figure arrived at after reassessment by the primary judge, based on the extent of the respondent's disablement, and that it was not vitiated by the circumstances that it happened to coincide with the statutory threshold. 34 In my opinion, the circumstance that the primary judge in her judgment identified the quantum of non-economic loss by reference to the precise percentage which reached the statutory threshold, namely 23.5385 per cent, makes it impossible to come to any other view than that the existence and quantum of this threshold was a very substantial factor taken into account by her Honour in assessing the quantum of non-economic loss. In my opinion, White's case establishes that this is an irrelevant consideration, and in my opinion the circumstance that the primary judge gave substantial weight to this consideration must vitiate her assessment of non-economic loss. 35 I accept the submission for the respondent that a judge can express tentative views, and is entitled to revise those views at any time up to delivery of a final judgment; and that a view that a previous underestimation of the effect of incapacity for work on non-economic loss could be a legitimate ground for revising upwards a tentative view on non-economic loss. 36 However, as I have said, the terms of the judgment itself leave no alternative to the view that the irrelevant consideration has weighed substantially in her Honour's final judgment. 37 Mr Kennedy submitted that, should the Court come to that view, what the Court should then do is reach its own view on the quantum of non-economic loss. He submitted that, having regard to the primary judge's findings, the Court could readily come to the view that the non-economic loss was at least of the order of thirty per cent of a most extreme case, and the Court could on that basis dispose of the matter. 38 I accept that it would be most undesirable and most unfortunate if this case were to go for a third first-instance hearing. However, I do not think it is possible for this Court to undertake the exercise suggested by Mr Kennedy. If this Court were to do so, it would be attempting to make an assessment of non-economic loss without having observed the respondent. It would be doing so in circumstances where the indications from the primary judge are that the non-economic loss does happen to be at a level close to the threshold at which economic loss becomes awardable. 39 If this Court were to assess the non-economic loss at something above the threshold, in those circumstances it seems to me that the appellant could have a legitimate sense of grievance. If on the other hand the Court were to assess the non-economic loss at a figure which happened to be below the threshold, then the respondent no doubt would have a legitimate sense of grievance. 40 In those circumstances, I think the Court has no other alternative than to order a new trial and so I propose that the Court make the following orders: 1. Appeal allowed. 2. Orders of primary judge set aside. 3. Order that there be a new trial limited to damages. 4. Respondent to pay appellant's costs of appeal and to have a Suitors' Fund certificate if otherwise entitled. 5. Costs of the first two trials to be in the discretion of the judge hearing the new trial. 41 TOBIAS JA: Subject to the rider that unlike Hodgson JA I have not formed even a tentative view on the appellant's arguments with respect to the correctness of the primary judge's assessment of damages for future economic loss, I agree with the orders proposed by Hodgson JA for the reasons his Honour has given. 42 FOSTER AJA: Yes I also agree but with the same rider. ********** Last Modified: 10/17/2003 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.