Supreme Court New South Wales Medium Neutral Citation: Howarth v Rail Corporation New South Wales (No 1) [2013] NSWSC 220 Hearing dates: 18 and 19 March 2013 Decision date: 20 March 2013 Jurisdiction: Common Law Before: Beech-Jones J Decision: Plaintiff succeeds against Third Defendant. Parties given liberty to apply in relation to interest on past loss of earnings. Catchwords: Personal injury claim against employer - damages restricted to future and past economic loss - contributory negligence - earning capacity - vicissitudes. Legislation Cited: - Social Security Act 1991 (Cth) - s 151(1A), s 23(5D) - Workers Compensation Act 1987 - Div 3 Pt 5, s 151N(1) - Workplace Injury Management and Workers Compensation Act 1998 - Pt 7 Ch 7 Cases Cited: - Consolidated Broken Hill Ltd v Edwards [2005] NSWCA 380 - Fox v Wood [1981] HCA 41; 148 CLR 438 - Kallouf v Middis [2008] NSWCA 61 - Joslyn v Berryman [2003] HCA 34; 214 CLR 552 - Malec v JC Hutton Pty Ltd (1989) 169 CLR 638 - Najdovski v Crnojlovic [2008] NSWCA 175; 72 NSWLR 728 - Visyboard Pty Ltd v Ranieri [1999] NSWCA 331 Category: Principal judgment Parties: Jodie Nicole Howarth (Plaintiff) Rail Corporation New South Wales (RailCorp) (Third Defendant) Representation: Counsel: D.A. Wheelahan QC, M.J. Maxwell (Plaintiff) N.J. Polin (Third Defendant) Solicitors: Adams & Co (Plaintiff) Hicksons Lawyers (Third Defendant) File Number(s): 2011/037417 Judgment - ex tempore 1As at August 2008 the plaintiff, Jodie Howarth, was employed by the third defendant, Rail Corporation New South Wales (RailCorp), as an area controller grade 2 at the Hornsby signal depot. Construction work had been undertaken at the depot for a number of months. 2On 22 August 2008 Ms Howarth injured herself when she attended the depot to start work. She claims that the injuries she suffered as a result of her accident have caused her to be permanently unfit for all forms of work. 3Ms Howarth commenced proceedings against the state corporation responsible for work at the depot, the head contractor and RailCorp. On the first day of the hearing I granted her leave to discontinue against the defendants other than RailCorp. 4RailCorp admitted that its conduct towards Ms Howarth was negligent and causative of the accident. The only matters truly in dispute were whether there was contributory negligence on part of Ms Howarth and the amount that should be awarded to her for future economic loss. For the reasons that follow, I am not satisfied that there was any contributory negligence on the part of Ms Howarth. I also conclude that the present and most likely future earning capacity of Ms Howarth is nil but that an overall deduction of 30 percent should be made from the amount awarded to her under that head to account for various contingencies which I will discuss. Contributory Negligence 5As I have stated, although liability on the part of RailCorp was admitted, it contended that Ms Howarth's own negligence contributed to the injuries she suffered. To address this it is necessary to outline the circumstances surrounding Ms Howarth's accident. 6At the entrance to the Hornsby depot is an automatic gate. It is wide enough to allow access by trucks and cars. From the perspective of the outsider looking in, to the right of the gate is a keypad located on a vertical pole. The gate can be opened by inputting the code into the keypad. Approximately half a metre in front of the pole with the keypad is another vertical pole. Between the two poles is wire mesh fencing. 7The construction work at the depot had resulted in the area immediately in front of the automatic gate becoming muddy and periodically pooling with water. This had been brought to the attention of reasonably senior personnel within RailCorp a number of months prior to the accident. Ms Howarth had made complaints herself. 8In her evidentiary statement Ms Howarth described the accident as follows: "On 22 August around 14.10 hours I arrived outside Hornsby signal box after being dropped off by my boyfriend at the time. In order to reach the keypad to gain access to my work site I had to step over the large puddle, hold on to the gate/fence with my right hand and stretch with my left to reach the keypad. On this day it had been raining and by the time the manager had inspected the site some of the water had receded because it had stopped raining. After I had dialled in the code I twisted back in order to regain my balance when my jacket got caught in the wire fence/gate. This pulled my upper body, causing me to lose balance, twist, and this wrenched my right knee. I was wearing Baxters work boots at the time." 9The reference to the manager inspecting the site was, as I understand it, to a manager to whom the accident was reported and who inspected the site of the accident after it occurred. 10Tendered before me was a photograph taken some 40 minutes after the incident which showed a pool of water outside the gate. As explained by Ms Howarth in her evidentiary statement the level of water at the time depicted in the photo was said to be lower than it was at the time of the accident. 11In her oral evidence Ms Howarth expanded upon her description of the accident. She explained that when she sought to input the code her feet were straddled around the pole where it was dry. She said she was leaning forwards. She said: "I tried to bring my left foot around to where there was no water and as I went to move off I got caught with a bit of wire mesh in the fence and my body went one way and my knee just went. I don't know - wrenched." 12Ms Howarth explained it was the clothing on the inside of her right wrist that was caught in the mesh and it was her right knee that was "wrenched". There was no challenge to these aspects of Ms Howarth's evidence and I accept them. 13The particulars of contributory negligence pleaded by RailCorp are as follows: "(a) [she] was aware of the risk of injury but placed herself in a position of danger; (b) [she] failed to heed warnings given in relation to safety risks; (c) [she] failed to keep a proper look out; and (d) [she] failed to use an alternate route of access for work premises (sic)." 14The common law test of contributory negligence is applicable to this claim (see s 151N(1) of the Workers Compensation Act 1987). This test requires RailCorp to demonstrate that Ms Howard exposed herself to a risk of injury which might reasonably have been foreseen and avoided and she suffered an injury within the class of risk to which she was exposed (see Joslyn v Berryman [2003] HCA 34; 214 CLR 552 at [16] and [18] per McHugh J). 15Sub-paragraph (d) of the particulars of contributory negligence can be dismissed at the outset. It was not suggested that there was any alternative route of entry to the depot. 16Sub-paragraphs (a), (b) and (c) can be considered together. In substance they reflect the three alternatives that RailCorp suggested that Ms Howarth should have taken to gain access to the depot. Those alternatives were: having someone open the gate from the inside, walking through the pool of water to the keypad, or taking care to make sure that her clothes were not caught on the fence. 17It was not expressly suggested to Ms Howarth that in performing the manoeuvre of the kind she did when accessing the keypad she knew that she was exposing herself to a risk of injury. However, leaving aside whether she in fact foresaw it, I accept that there was a foreseeable risk of some injury from her attempting to open the gate in that manner, although she could not have perceived it as a particularly high risk or that the level of likely harm that she would suffer would be as significant as it proved to be. 18In view of those fairly low risks, I am far from persuaded that it was reasonable for her to have avoided them by trawling through a reasonably deep pool of water to the keypad. 19The area beneath the pool of muddy water was uneven and contained various pot holes. Apparently it was being constantly worked over by machinery. If Ms Howarth had walked through the pool she would have assumed other risks more significant than the one she did in opening the keypad by straddling the poles. Also, while the inconvenience of having to work through most of the shift with wet feet may seem trivial in hindsight, it is a very real consideration when looking at her decision not to walk through the water prospectively. 20On the inside of the depot was another keypad for the automatic gate. In cross-examination Ms Howarth agreed that she "could have" telephoned someone "in the office and asked them to come and open the gate". In circumstances where it was common ground that Ms Howarth had been aware of the propensity of the water to pool outside the gate for many months it was submitted on behalf of RailCorp that Ms Howarth was negligent in terms of her own safety in not contacting someone inside. 21I do not accept that submission. The submission must be addressed in the context of evidence which reveals that RailCorp was aware of this hazard for many months and there is no evidence that it took any step to address it. In particular there is no evidence that it issued any direction or request to its employees as to how they should access the depot when the water pooled. There is no evidence that it made any arrangements for any staff to leave their duties and walk to the gate to open it from the inside. 22With this alternative I am not satisfied that the standard of reasonable concern for her own safety required Ms Howarth not to undertake the manoeuvre she did but instead, to wait for a member of staff to be available to come and open the gate for her. There was a risk posed by the measure she undertook but it would not have been assessed as a particularly high one or one that was likely to have serious consequences if the relevant risk materialised. If she had asked someone to come to the gate she would not know how long it would take. Ms Howarth was not engaged in a recreational activity, but was instead trying to access her workplace to fulfil her obligations to RailCorp. I do not consider that her adoption of a manoeuvre which would have only appeared to be a slightly to moderately risky alternative, compared with one which was most likely to be much more inconvenient, involved a failure to take reasonable care for her own safety. 23Further, I am also not satisfied that even if Ms Howarth had made a call to someone in the depot to open the gate that the accident would have been avoided. RailCorp bore the onus of proof in relation to contributory negligence. As part of that onus it had to demonstrate that, had Ms Howarth undertaken the suggested step of telephoning someone inside the depot, the accident would not have happened. No evidence was led as to the logistics of how an even informal system of gate opening might have operated on the day of the accident. There was no evidence as to how many staff were present at the depot, what they were doing, whether they could have left their duties to open the gate and, if so, how long that would have taken. Ms Howarth could not have been expected to wait at the gate for too long a period before trying some other method to gain access to the premises to start work. 24The last alternative suggested by RailCorp involved Ms Howarth taking particular care to ensure her clothing was not caught on the wire fencing as she used the keypad. Ms Howarth was cross-examined about this as follows: "Q. I take it that you are aware with those sorts of fences that there are in places bits of wire that are actually exposed? A. Yes, normally where the poles are, and stuff like that. I'm quite aware that there are little bits of metal hanging out - just not like on the actual fence part itself. Q. But you are aware generally that with a fence of this type there were pieces - A. Yes. Q. And could you get your clothes caught on it? A. Yes, but I didn't think I could would have - I would have got the front of me caught, instead of down here, (Indicated). Q. On this occasion you got the area between your elbow and wrist of your right hand caught? A. Yes. Q. I take it in performing this manoeuvre, if you had paid a little bit of attention to your right hand and had a look, you would have seen that your clothing was caught? A. I did actually look. I had to look to see where I was putting my hand, but I didn't see anything hanging out. I just had to look to see where I was putting my hand so I didn't. So I do remember doing that. Q. But as you are coming back, I think you said you were moving your balance backwards? A. Yes, as I was trying to straighten back up, it got caught here (Indicated). I don't know if it stabbed me - sorry, it got caught when I grabbed, or what. I don't know. Q. But you didn't fall over did you? A. No. Q. It was just a twisting movement of your knee? A. That's correct. Q. And I take it you are swinging back to your left? A. Yes, trying to get, sort of - it's hard to explain. Q. And swinging back to your left, your right hand got caught and you twisted your knee? A. Yes, I feel it, my knee, it went together. Q. I am suggested if you used a bit more care coming back, you would have seen that your clothing had been caught? A. I'm not sure, because I didn't - when I seen it, it was only a little bit, but you may be right, because - Q. But it's something that you could probably have done? A. Yes." (emphasis added) 25In these answers Ms Howarth stated that she did make an observation as to whether her clothing was caught ("I did actually look"). I accept her evidence that she did so. In my view that was sufficient. She was performing a difficult manoeuvre that was necessitated by her being significantly impeded from accessing her own workplace. Ms Howarth's agreement with the cross-examiner that she could "probably have used a bit more care" struck me as no more than an acceptance in hindsight that, although she looked to see if her clothing was stuck on the fence, she could have looked harder. I am not satisfied that the need for her to take reasonable steps for her own safety required her to do so. 26For the sake of completeness, I note that I was referred to a decision in which a cyclist had been held to be contributorily negligent for failing to ensure his clothing was kept clear of a rail car as he passed between the rail car and the edge of a bridge. On appeal this finding was expanded and the injured cyclist was found to be also negligent in determining to cross the bridge when a far easier route was available to him (Consolidated Broken Hill Ltd v Edwards [2005] NSWCA 380 at [59] to [73] per Ipp JA, with whom Giles JA at [1] and Hunt AJA at [77] agreed). 27I do not see any analogy between either the reasoning at first instance or on appeal in Edwards and this case. In Edwards the cyclist was traversing the defendant's land and chose an obviously risky path between the rail car and the unprotected edge of a bridge when a safer and easier alternative route was available. This case involved an employee who was required to attend work, but was presented with significantly impeded access to her workplace and no alternative route. In Edwards the cyclist chose to traverse the bridge. Ms Howarth was obliged to get inside the gate. 28In the end result I am not satisfied that there was any contributory negligence on the part of Ms Howarth. Damages under the Workers Compensation Act 29The recovery of damages at common law by Ms Howarth against her employer is governed by Div 3 of Pt 5 of the Workers Compensation Act 1987. The regime has the following features. 30First, s 151H(1) imposes a threshold that must be satisfied before damages can be awarded, namely that the injured worker has a degree of permanent impairment of at least 15 per cent. The method of assessment is specified in the balance of the section and Pt 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998. It is not in dispute that the threshold has been satisfied in this case. 31Second, the only damages that can be awarded are for past loss of earnings and future economic loss due to the deprivation or impairment of earning capacity (s 151G). 32Third, any amounts of weekly payments of workers compensation already paid are to be deducted from the amount of damages awarded (s 151A(1)(b)). 33Fourth, any such award is subject to the limitation that amounts that would have but for the accident exceeded the maximum amount payable provided for in s 34 are to be disregarded (s 151I). Currently that amount is $1,858.34. It is not suggested that this amount will be exceeded in this case. 34Fifth, the amount awarded for future economic loss is to be determined by the adoption of a discount rate of 5 per cent (s 151J). 35Sixth, in determining the amount for future economic loss the Court is required to disregard any earning capacity of Ms Howarth after she reaches "pension age" being the age of 67 (see s 151(IA) and s 23(5D) of the Social Security Act 1991 (Cth)). 36Seventh, special provision is made in respect of the duty of the injured worker to mitigate their damage which involves at least a partial reversal of the usual onus of proof (s 151L). 37Eighth, special provision is also made for the payment of interest on damages (s 151M). Ms Howarth's condition at the time of the accident 38Ms Howarth was born in 1974. She was 34 at the date of the accident and is now 39. She completed secondary school in 1991. While attending school she worked in various menial jobs. After leaving school she worked as a maid and a waitress. 39In June 1992 she sat the public service examination. In July of that year she commenced employment with RailCorp as a junior station assistant at Gosford signal box. She stayed in the position for a year and a half. In 1994 she changed her position to that of a safe working station assistant. 40In 1995 Ms Howarth was promoted to signal grade 1 at Hornsby station. In 1997 she became an area controller grade 1 for the railway from Hornsby to Hawkesbury River. In 2001 she was promoted to area controller grade 2. Ms Howarth explained that this promotion to grade 2 resulted in her obtaining responsibility for a larger area of the railways. She occupied that position up to the time of her accident. As at that date her net salary was $1500 a week before penalties and overtime. 41Ms Howarth was also active in union affairs. At some point she became the union delegate for Hornsby and she was later elected president of the signallers section of the relevant union. 42In June 2008 Ms Howarth suffered an injury when she turned on her right knee and "felt a pain go". She undertook some physiotherapy and returned to work. She did not lodge a claim. Otherwise in the immediate years up to the date of the accident she lived what she described as a healthy and active life. 43At this point I note that Ms Howarth has a work history which does not support any suggestion that she would ever malinger so far as work injuries are concerned, or that she even had any special sensitivity to such injuries. To the contrary, despite a relatively modest level of educational achievement she was promoted to a responsible position on a reasonable income. The impression that her history gives is of someone who was very much motivated to work. This was reinforced by her presentation in giving evidence before me. While she became upset and listless in discussing her life since the accident, she discussed her previous work at RailCorp with enthusiasm. Post-Accident 44After the accident Ms Howarth's knee was swollen and painful. She completed her shift and was driven home. She went and saw a doctor and stopped work. Her knee was X-rayed but no fractures were detected. At some point she returned to work for three days but had to stop work due to increasing pain and stiffness. 45After various forms of treatment she underwent an arthroscopy in January 2009. Apparently this only aggravated the knee and it became even more painful. From that time onward Ms Howarth has been wracked with pain in the knee and has pain elsewhere. In her evidence she stated that she had pain in her "right knee, my right leg, my right foot, my left foot, my back, my shoulders, my neck, my ribs, my elbows. Practically from head to toe". 46In December 2009 and then again in 2011 and 2012, Ms Howarth presented to Dr Adler, a specialist in rehabilitative medicine. Her complaints of a stabbing pain like "glass inside the knee" and other symptoms led Dr Adler to diagnose that she was suffering from a syndrome described as either "complex regional pain syndrome" or "chronic regional pain syndrome" (CRPS). Dr Adler produced three reports which were consistent in maintaining this diagnosis and his opinion as to the unlikelihood of her ever obtaining any meaningful employment. 47Ms Howarth was also referred to Professor Cousins from the Pain Management and Research Centre. Consistent with Dr Adler he identified her as having CRPS of the right knee associated with a marked reduction in the range of movement in the right knee joint as well as a number of other significant psychiatric issues. 48In May 2010 Dr Bodel, an orthopaedic surgeon, provided RailCorp with his report concerning Ms Howarth. He referred to her accident as a "fairly simple event" which had been "complicated by the development of a CRPS in the right lower limb". He described her prognosis as "very guarded". Dr Bodel concluded Ms Howarth was "currently unfit for all work because of the severity of her pain and the degree of her ongoing disability". 49The only dissension from these diagnoses of CRPS amongst the medical opinions is to be found in the reports of Dr Anthony Smith, an orthopaedic surgeon. Dr Smith saw Ms Howarth in November 2011 and February 2013. Dr Smith accepted that she had CRPS. However, he considered that it was resolving and that Ms Howarth was manufacturing physical signs of her condition. Dr Smith considered she was fit for her pre-injury duties. 50The suggestion that Ms Howarth was manufacturing or exaggerating her condition was not taken up in her cross-examination. To the contrary, RailCorp expressly submitted that it did not press for an acceptance for so much of Dr Smith's reports that rested on that contention. Once that aspect of Dr Smith's reports is put aside they do not add anything to Dr Adler or Dr Bodel's assessment. 51At the trial Ms Howarth was on crutches. It was apparent in court that she had experienced difficulty, including pain, especially when ascending and descending the steps into and from the witness box. She explained that if she is required to sit for periods then she needs to stand and briefly move to relieve her pain. 52All the medical reports describe Ms Howarth as presenting with a significantly impeded ability to move, especially in the flexion of her right leg. Leaving aside Dr Smith's reports there is a large degree of unanimity amongst them that this is a genuine and causally related condition to her accident on 22 August 2008. 53I have already referred to Professor Cousins' concerns about Ms Howarth's psychiatric state. In addition in December 2012 Ms Howarth saw a psychiatrist, Dr Jungfer, for a medicolegal assessment. Dr Jungfer diagnosed her as suffering from an adjustment disorder with depressed mood, panic disorder with secondary agoraphobia, CRPS and substance dependence. The reference to substance dependence was to the various drugs Ms Howarth took to cope with her condition, including painkillers. 54Previously, in November 2011, Ms Howarth had seen a psychiatrist retained by one of the defendants, Dr Potter. Dr Potter had considered that she fulfilled the criteria for a diagnosis of chronic pain disorder associated with psychological factors and a general medical condition, that condition being CRPS. 55It was not suggested that there was any difference in substance between the opinions of Dr Jungfer and Dr Potter. As best as I can ascertain the only real area of potential difference is that Dr Potter identifies a "pre-existing emotional vulnerability" on the part of Ms Howarth as contributing to the severity and chronicity of her pain. However, nothing in the material supports the contention, if it is made, that anything about Ms Howarth's pre-accident emotional state rendered her especially vulnerable to either CRPS or any psychological disorder that may be related thereto. Otherwise, both her description of her personal relations in her evidence and the manner of her presentation was consistent with the diagnosis of those psychiatrists of her as being very depressed. 56Since the accident Ms Howarth has taken various medications for pain, depression and anxiety. At the time of the hearing she stated that she was currently taking Durogesic, which is a narcotic analgesic, Xanax for anxiety, and Cymbalta, an antidepressant and analgesic. In cross-examination Ms Howarth agreed that the narcotic analgesics affected her "day-to-day performance" which I understood to be a reference to her mental acuity. 57The end result is that the quantification of Ms Howarth's past and future economic loss needs to be undertaken having regard to the clear diagnosis of CRPS, her dramatically reduced mobility, her psychological affectation and the impact upon her of the drugs she takes to address those matters. Past loss of earnings 58Ms Howarth's claim for past economic loss due to loss of earnings involved her relying on the earnings of another RailCorp employee whose position was said to be comparable to hers. This employee commenced working for RailCorp in the late 1990s. Ms Howarth was his allocated mentor when he first started. By the time of the accident this employee was also an area controller grade 2 stationed in Hornsby. He explained that since the accident the grade 2 controllers at Hornsby had been moved to Homebush and made acting grade 3 controllers. These promotions were subject to the successful completion of training that all of them had undertaken. Thus this employee was now a grade 3 controller and the obvious inference is that, but for the accident, Ms Howarth would be as well. 59RailCorp accepted the appropriateness of the use of this person as a comparable employee. This led to an agreed figure for past loss of earnings to 19 March 2013 of $368,070. The agreed figure to deduct for past workers compensation weekly payments was $123,462.91. Future economic loss 60The agreement concerning the appropriate use of the comparable employee has the result that the parties commence their analysis of Ms Howarth's future economic loss on the basis that, but for the accident, she would have net earnings of $1,655.80 per week as at the date of the trial. Senior Counsel for Ms Howarth, Mr Wheelahan QC, contended that the appropriate basis for the assessment was to project that figure until her pension age and then apply the usual discount of 15% for vicissitudes. A premise of this submission is that Ms Howarth presently has no effective earning capacity and that position is unlikely to change. 61Counsel for RailCorp, Mr Polin, contended that the appropriate method was to project forward a 65% loss of earning capacity and then apply the 15% discount for vicissitudes. He submitted that Ms Howarth retained an earning capacity which has a significant likelihood of increasing in the short term. In support of this contention, Mr Polin pointed to evidence that she gave of performing part-time work for RailCorp in late 2008 to early 2009. Ms Howarth explained that she did some timetabling work for four hours a day, three days a week from home. She said that the work "ran out" and that her employment was eventually terminated from RailCorp on medical grounds. 62Mr Polin also referred to an earnings capacity report prepared by a sports physician, Dr King, and a psychologist, Ms Monger ("the ECA report"). The ECA report contains separate assessments of Ms Howarth's physical and psychological capacity for work. Her physical capacity is identified as being initially three hours daily for five days a week with the suggestion that she "may be able to increase to 25 hours weekly". One significant physical constraint upon her ability to enter the workforce that is identified in the report is that Ms Howarth considered that she was unable to drive for 90 minutes or take public transport for that period. The report refers to Ms Howarth stating that she should able to drive, or be a passenger in a car, for 60 minutes and use public transport for 30 minutes. As Ms Howarth lives on the Central Coast, the report confines the available labour market to that area. The ECA report assessed Ms Howarth's psychological capacity for work at 25 hours per week. 63It is not apparent to me that either of the authors of the ECA report have taken into account any effect on Ms Howarth of the drugs that she was taking. I will return to consider this. I note that Dr Jungfer described Ms Howarth as presenting to her in an "over-sedated state". 64The ECA report identifies three jobs that it is considered that Ms Howarth could potentially perform on a part-time basis, namely call centre operator, telemarketer and administration worker. It reviews the Central Coast labour market and notes that there were positions being filled in those occupations in that area. It does not address how many part-time positions were filled or available, although the advertisements that were reproduced as examples of the work available offered part-time roles. 65Dr Jungfer provided a report dated 1 March 2013 responding to the ECA report. Dr Jungfer identified what she considered were a number of deficiencies in that report. First, she noted that the delineation between Ms Howarth's physical and psychological health meant that the combined and interactive effects of both were not properly addressed. Second, consistent with what I have stated earlier, she noted that there was no consideration of the effect of the medications that Ms Howarth consumes upon her ability to work. Third, Dr Jungfer pointed to Ms Howarth as having a history of panic attacks and agoraphobic behaviour which made it difficult for her to utilise public transport without a travelling companion. Fourth, Dr Jungfer was highly doubtful of Ms Monger's assessment that Ms Howarth was psychologically able to perform 25 hours per week. 66Mr Polin submitted that in broad terms Ms Howarth had, or was likely to shortly obtain, an earning capacity of around 35 percent of the hypothetical position she would be in if the accident had not occurred. He contended that, after the stress and anxiety of the litigation faded, there would be a likely decrease in the level of pain she suffered and the need for her to take as much medication as she previously had. He submitted that, in those circumstances, the physical assessment of 15 hours initially would move to coincide with the 25 hours which she was assessed as being psychologically able to work. Mr Polin then calculated the expected level of earnings of the three positions that I have referred to earlier on the basis of Ms Howarth working 25 hours per week. This yielded a figure for net earnings of around 35% of Ms Howarth's expected earnings. 67Mr Wheelahan QC submitted that this approach was entirely unrealistic. He contended that the critical question was what was Ms Howarth's present and likely future ability to exploit her labour. He referred me to the following passage from the judgment of Davies AJA in Visyboard Pty Limited v Ranieri [1999] NSWCA 331 at [28] to [32]: "[28] Earning capacity involves an ability to engage in remunerative employment and this itself involves an ability to find an employer who is prepared to engage and remunerate the disabled person. [29] Lord Atkinson said in Ball v William Hunt & Sons Ltd [1912] AC 496 at 505: 'The earning of wages depends as much on the demand for the workman's labour as it does upon his physical ability to work. If because of his apparent physical defects no one will employ him, however efficient he may be in fact, he has lost the power to earn wages as completely as if he was paralysed in every limb. If it be then the paramount object of the Act to compensate for the loss of the power to earn wages, the workman whom because of the injury caused by an accident, nobody will employ, comes within its purview as much as one who is rendered unable to do any work at all.' [30] Ellicott J in Bowman v Repatriation Commission (1981) 51 FLR 374 at 385-386 said, when considering provisions of the Repatriation Act 1920 (Cth): "Each of them in its terms requires an assessment to be made of the effect of an applicant's mental and physical incapacity on his or her ability to earn, and this can only be gauged by reference to the market in which the applicant might expect to earn. ... It is not enough simply to form a view that an applicant in a physical sense can still undertake work despite war related injuries. The incapacity so arising may well have destroyed or impaired his or her earning capacity in the market-place.' [31] Brennan J expressed like views in Redding v Lee (1983) 151 CLR 117 at 165, where his Honour said, when speaking of the Social Security Act 1947 (Cth): "... the state of the labour market reasonably accessible to a claimant is an indispensable consideration in ascertaining his qualification. We were referred to a decision by the Administrative Appeals Tribunal (Re Panke and Director-General of Social Services (1981) 4 ALD 179) where the relevant provisions of the Act have been thus construed, and subsequent decisions of that Tribunal have confirmed the administrative direction then given. The same consideration applies when a court is assessing a plaintiff's damages in tort for destruction or impairment of earning capacity." [32] It follows that the trial judge was bound to take into account what market was readily accessible to Mr Ranieri having regard to the injuries which he had received and what was the prospect of his obtaining remunerative employment. Mr Ranieri was fifty years of age, he had lost joints on two fingers of his right hand and he had an injury to his back which was of such a nature that even a small incident could aggravate it and cause him to have excruciating pain for a considerable time." 68I accept Mr Wheelahan's submission. In the end result I am satisfied that the present position and most likely position going into the future is that Ms Howarth will not have any earning capacity. 69I have already outlined the criticism of the ECA report by Dr Jungfer. I accept the force of the points that Dr Jungfer makes. In particular, in terms of Ms Howarth's ability to perform work, the limitations on her physical and psychological functioning narrow dramatically the range of positions for which she is eligible. The ECA report in my view overstates the geographical area in which she can move. Otherwise, in my view, the only realistic amount that at a maximum she could perform is 15 hours a week. Further, that could only occur if there was a marked decrease in the drugs she consumes to combat her various afflictions, especially pain. That outcome does not appear to me to be very likely at all. My view as to the narrowness of the work that she is in fact able to perform is confirmed by the evidence she gave about the 12 hours a week that she performed at home from late 2008 to early 2009. This was undertaken at a time when her condition overall was better than it is now. It did not involve her travelling. 70Thus the supply side of the labour equation involved in assessing Ms Howarth's current and future likely earning capacity is relatively bleak. She could only perform a limited number of hours in a small geographical area and only if her drug consumption decreases. 71The demand side of that labour equation does not appear to me to be any better. As Mr Wheelahan QC submitted, in seeking work she would be competing for relatively unskilled positions in a small geographic area. She would be someone who was presenting with a history of physical and psychological problems and as someone who was medically discharged from her last position. Her afflictions and limitations would, in my view, make her prospects of obtaining a position very poor. Realistically, it would only be in the circumstance of a dramatically significant labour shortage that she could be expected to obtain work within her limitations. In my view, the possibility of that occurring is better reflected in considering the appropriate deduction for vicissitudes, a matter I will turn to next. 72For the present, I conclude that Ms Howarth does not have an earning capacity and the most likely position is that that will remain so into the future. Other contingencies 73The conclusion I have reached concerning Ms Howarth's future earning capacity does not complete the necessary analysis. I have only addressed the most likely position. However, assessments of future events are not exclusively governed by such assessments. Instead, probabilities and possibilities must be addressed (see Malec v J C Hutton Pty Ltd (1989) 169 CLR 638). In Kallouf v Middis [2008] NSWCA 61 at [49] McColl JA and Hall J stated: "Any assessment in respect of the impairment of future earning capacity necessarily involves a consideration of possibilities. In some cases, it would be an error in treating as certain the fact that a plaintiff would lose wages for a period of years from the date of trial. Where incapacity is established as at the date of trial, what is to be evaluated will be the extent of the possibility that the plaintiff may not work in the future or may lose time from work and determine the allowance of proper compensation in respect of that possibility. That evaluation will depend upon the evidence. Where there is no evidence to support a conclusion that, as a matter of certainty, an injured plaintiff would not earn monies from employment for a number of years post trial, then such a finding would involve an error of principle: Ahmedi v Ahmedi (1991) 23 NSWLR 288 (at 302) per Clarke JA, Handley JA agreeing." 74A number of matters raised by RailCorp raise at least as a realistic possibility a chance that Ms Howarth could reclaim an earning capacity in the future. One matter was the resolution of this litigation. There was an acceptance by both Ms Howarth and Dr Jungfer that the removal of the stress and anxiety from the litigation may lead to some improvement in her condition. Dr Jungfer accepted that there was a link between Ms Howarth's stress and her pain levels so that the reduction of stress that would accompany the resolution of this case may lead to a lowering of the need for her to consume the same level of analgesics as she does presently. A reduction in her consumption of those drugs is likely to lead to an increase in her mental acuity. 75Another matter raised concerned the possibility of Ms Howarth having a dorsal stimulator implant. In cross-examination Ms Howarth stated that her treating doctors had recommended that one be inserted but that her workers compensation insurer would not agree to fund the cost of the operation. Ms Howarth stated that she understood that there was a 50% chance that if she undertook that operation it would reduce her need for medication. In re-examination Ms Howarth explained that she was advised that it would cost $10,000 for the trial and $40,000 if it worked. 76There was some debate about the relevance of this matter given that the Court does not have the power to award Ms Howarth an amount representing the cost of the operation. If she is to undertake it she must fund it out of the proceeds of this judgment which is solely concerned with past and future economic loss. 77There is an element of unfairness in there being a potential reduction in her award because of the possibility that she may use funds designed to support her now and into the future to pay for an operation that her worker's compensation insurer has refused to fund. Nevertheless, I am required by the legislation to assess her future economic loss which, as I have stated, requires me to address future possibilities and probabilities. In the end result, I consider there is a realistic possibility that she would choose to fund such an operation herself. On the limited information I have, there is some basis for considering that it may provide her with some alleviation of her present condition. 78A further matter that needs to be accounted for as a possibility is that Ms Howarth's ability to perform a limited amount of work may improve and that labour conditions may be such that she will be able to exploit this limited capacity that she has to perform work. This in part flows from the matters that I have just addressed and the balance from what I have canvassed earlier. 79One final matter needs to be addressed concerning vicissitudes. It appears from my recitation of Ms Howarth's work and life history that at the time of her accident she had specialist skills in a very narrow field, namely railway operations. Implicit in the ECA report is the proposition that leaving aside her accident, if she no longer worked for RailCorp she was unlikely to find other work at the same level of remuneration. In considering the circumstances of what might have developed had the accident not happened, in my view it follows that some allowance needs to be made for the possibility that at some point she would no longer have worked for RailCorp. Jobs from school to retirement are far less prevalent in these times than they ever were, even for those employed by the State. 80Taking into account all these matters, I consider the appropriate reduction from the amount to be awarded for future economic loss is 30 percent. I will allow the parties the opportunity to check my figures. On my calculations, the award for future economic loss is $923,307.14. This involves the use of the figure of $1,655.80, the agreed multiplier of 5% until age 67 of $796.16 and then a deduction of 30%. Past and future superannuation 81Both parties agreed that the appropriate allowance for superannuation benefits was 11 percent of the net loss for the past and 14.09 percent of the net figure for the future (see Najdovski v Crnojlovic [2008] NSWCA 175; 72 NSWLR 728). This results in figures of $40,487.00 and $129,262.99 for past and future superannuation benefits respectively. [Counsel then addressed his Honour.] 82The parties have now had the opportunity to consider my figures. There are two corrections. The correct figure for past workers compensation weekly payments is $124,342.00. The correct figure for future superannuation is $130,094.00. The parties have also agreed that, based on my findings, the appropriate Fox v Wood [1981] HCA 41; 148 CLR 438 component is $42,622.00. It is also accepted by Mr Wheelahan QC that, by the operation of the relevant legislation, his client is not entitled to recover costs. At the appropriate time I will order that there be no order as to costs. 83There is, however, an outstanding question about interest on past economic loss that results from the operation of s 151M of the Workers Compensation Act. The parties will consider that in light of this judgment. 84The provisional total of all the figures that I have determined to date is $1,380,238. I will not enter a judgment for that amount at this point given the outstanding question of past interest. Instead, the only order that I will make is there be liberty to apply for both parties on short notice to address that outstanding issue. I so order. ********** 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. Decision last updated: 05 April 2013