Court of Appeal Supreme Court New South Wales Medium Neutral Citation: ACN 096 712 337 Pty Ltd v Javor [2013] NSWCA 352 Hearing dates: 8 August 2013 Decision date: 25 October 2013 Before: Meagher JA at [1]; Barrett JA at [43]; Ward JA at [44] Decision: Appeal dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Rules 36.15, 36.16, 36.17 and 36.18, deals with setting aside and variation of judgments or orders. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: DAMAGES - assessment of workplace injury damages - whether primary judge erred in failing to find that respondent had not taken all reasonable steps to mitigate his damages for lost earning capacity - whether primary judge erred in assessing respondent's pre-injury earning capacity - no question of principle Legislation Cited: Workers Compensation Act 1987, s 151L Workers Compensation Legislation Amendment Act 2012 (No 53), s 2, Sch 1.2 Workplace Injury Management and Workers Compensation Act 1998, ss 41, 48 Category: Principal judgment Parties: ACN 906 712 337 Pty Ltd (formerly known as Formtec Group Pty Ltd) (Appellant) Damir Javor (Respondent) Representation: Counsel: H J Halligan (Appellant) B Dooley SC, F Curran (Respondent) Solicitors: Hicksons Lawyers (Appellant) Carters Law Firm, Auburn (Respondent) File Number(s): 2012/328715 Decision under appeal Jurisdiction: 9101 Citation: Javor v ACN 096 712 337 Pty Ltd [2012] NSWDC 157 Date of Decision: 2012-09-29 00:00:00 Before: Levy DCJ File Number(s): 2012/104654 Judgment 1MEAGHER JA: On 20 April 2004 the respondent (Mr Javor) sustained injuries to his back and right knee in a work accident. At that time he was working as a formwork labourer on a 14 storey apartment building site at Milson's Point. The primary judge (Levy DCJ) held that those injuries were caused by the negligence of his employer, the appellant (Formtec), and rejected a contributory negligence defence: Javor v ACN 096 712 337 Pty Ltd [2012] NSWDC 157. Neither of those conclusions is challenged on this appeal, which is concerned only with the assessment of damages for past and future economic loss. 2His Honour made the following findings as to Mr Javor's ongoing disabilities. Those findings are not challenged on appeal: "64 The plaintiff's resultant difficulties have centred upon ongoing pain in his back and his right knee. He has difficulty walking, lifting and exerting himself. He has stiffness in his back and has difficulty with exertion. He has suffered a reduction in his physical fitness. He is therefore precluded from engaging in work in the construction industry. 65 The plaintiff's disabilities include the prospect of increased arthritis of the right knee with some disruption of the articular surface. His right knee problems have caused the plaintiff's need for orthoses to assist with his gait. His arthrodesed right ankle exacerbates his right knee pain when he walks. He has reduced mobility and agility. He has pain and discomfort in his thoracic spine. He has mechanical derangement in his spine at the level T12/12. These conditions led to the plaintiff's need to take medication to relieve his discomforts. He had an adverse reaction to those medications and this has caused the plaintiff to suffer irritable bowel syndrome. The plaintiff has suffered much irritation and loss of confidence as a result of his ongoing disabilities. He has also suffered depression and anxiety, as was noted by the defendant's psychiatrist." 3At the time of the trial in late June 2012, Mr Javor had not returned to work. The primary judge accepted his submission that "in practical terms" he had been rendered incapable of gainful employment. Two matters were said in combination to justify that conclusion. The first involved the acceptance of the opinions of Dr Guirgis and Dr Todorovic that as a result of the work accident the plaintiff was unfit for and should avoid activities that applied stresses to his back and right knee. This ruled out work which involved heavy lifting, repeated lifting and repeated bending and twisting movements, activities causing jolting, jerking or jarring of the back, heavy manual handling, pushing or picking of heavy weights, prolonged standing or walking, repeated overhead reaching, and stresses to the right knee: [112], [126], [132]. The second was that Mr Javor's experience, aptitude and age, and specifically his limited English speaking skills, limited cognitive ability and limited transferable skills prevent him from engaging in the types of work which having regard to his permanent incapacity he otherwise might be able to undertake. 4The primary judge assessed Mr Javor's damages as follows: Past economic loss $376,815 Past loss of superannuation $41,449 Fox v Wood $18,750 Future economic loss $534,865 Future loss of superannuation $50,009 5Mr Javor's claim for past economic loss as formulated was for lost net earnings per week of between $1,058 and $1,285 for the period from 20 April 2004 to 30 June 2012. That claim was based on the earnings of two labourers, Mr Oliveric and Mr Visic, which were said to reflect what Mr Javor would have been likely to earn. In assessing past economic loss, the primary judge discounted by 25 per cent the present value of those earnings over that period. He did so to allow for the fact that Mr Javor might not have maintained both continuous employment and employment with regular overtime during that period: [135], [137]. 6Mr Javor's claim for future economic loss was made on the basis of lost net earnings of $1,285 per week to age 67 (a period of 21 years from the time of the hearing). In his assessment of that loss, the primary judge assumed lost earnings of $1,100 net per week to age 60 and allowed a further $40,000 for the period to age 67: [140], [147], [151]. Issues on appeal 7The appellant contends that in assessing these heads of loss, the primary judge erred in two respects. First, he should have found that Mr Javor had not taken all reasonable steps to mitigate his damages for lost earning capacity. In particular, it is said that the primary judge did not consider whether Mr Javor had taken the steps referred to in paragraphs (b) to (d) of section 151L(2) of the Workers Compensation Act 1987. This argument is raised by grounds of appeal 1 and 2. 8The appellant submits that the primary judge should have found that Mr Javor had not taken reasonable steps promptly to seek suitable alternative employment and that he had not taken reasonable steps to improve his English language skills. The appellant also submits that when addressing these questions the primary judge erred in relation to findings made as to Mr Javor's ability to speak and understand English, as to whether he had made real attempts to improve his command of English and as to whether he had made genuine efforts to find light part-time work suited to his limited earning capacity and skills. These arguments are raised in general terms by grounds of appeal 3 and 6 and were given content by the appellant's written and oral submissions. 9The second respect in which the primary judge is said to have erred is that when assessing Mr Javor's economic loss his Honour should not have treated Mr Javor as having a pre-injury earning capacity comparable to that of Mr Oliveric and Mr Visic. This argument is made by grounds of appeal 5 and 7. 10Ground of appeal 4, which challenged the sufficiency of the evidence upon which the primary judge relied in awarding damages for lost earning capacity, was abandoned in oral argument. 11An understanding of the issues in the appeal is assisted by a short summary of Mr Javor's background and the efforts which he made to improve his English and obtain employment between the time of his accident in April 2004 and the hearing in June 2012. Mr Javor's background and attempts to find employment following the accident 12Mr Javor is a Serb who was born in Croatia in 1966 and migrated to Australia in March 2001. He attended high school in Croatia and whilst doing so completed a course in electrical mechanics. After leaving school he was drafted into military service and during that period suffered an injury to his right ankle and foot in a landmine explosion. That injury resulted in a slight shortening of his right leg. 13He migrated to Australia in March 2001 with his wife and two daughters. A third daughter was born in Australia. At the time he arrived in Australia Mr Javor spoke no English. Between March 2001 and October 2002 he attended approximately 510 hours of Commonwealth funded English classes. In February 2002 he had an arthrodesis to his right ankle. He commenced working for the appellant in November 2003 as a formwork labourer. At the time of the accident Mr Javor was 38 years old. Whilst working on a platform supported by a scaffold he fell about 1.5 metres and injured his right knee, fracturing the left lateral femoral condyle, and his back. 14Dr Todorovic was Mr Javor's treating general practitioner and Dr Giblin his treating orthopaedic surgeon. In a short letter dated 17 December 2004 to Dr Todorovic, Dr Giblin stated that he would be "happy for [Mr Javor] to return to work when you see fit". In his report dated 22 February 2005 Dr Todorovic noted that it was unlikely that Mr Javor would ever be fit to return to his pre-injury duties as a labourer and observed: "His rehabilitation provider needs to get involved, looking for jobs not involving prolonged walking, prolonged standing, walking on uneven surface, heavy lifting, repetitive bending, squatting, kneeling and climbing. In my opinion he will be fit for part-time light duties in 1-2 months, after a 1-2 months work-conditioning program has been completed, with view of gradually increasing his working hours towards normal working hours." On 22 March 2005 Dr Todorovic certified that Mr Javor remained unfit to work before 6 April 2005 at which time a further review was to be undertaken. 15In May and June 2005 Mr Javor attended a course in spoken and written English at the Parramatta College. Mr Javor's evidence was that in late 2005 he started to look for part-time work involving light duties. He approached various businesses in the Fairfield area for employment but without success. Between April 2006 and April 2008 he made further attempts to obtain work involving light duties only. During that period he completed, on a fortnightly basis, a job search diary which had been provided to him by GIO, acting as agent for the Workers Compensation Nominal Insurer. 16In July 2008 GIO arranged for Mr Javor to receive rehabilitation services from Konekt Australia Pty Ltd (Konekt). In a vocational assessment report dated 13 September 2008 Konekt recorded that Mr Javor was currently certified as fit by Dr Todorovic for light duties, three hours a day for three days a week. It also noted that the primary barriers to Mr Javor's return to work appeared to be "intense fears of re-aggravation of injury, limited English and significant medical restrictions". The author concluded, having considered his education and employment history and tested his aptitude, that Mr Javor had "limited English and transferable skills, limited Australian education background and poor physical tolerances" and that his "transferable skills and poor English restrict him to unskilled labouring jobs; however, such positions are currently beyond [his] functional tolerances". Konekt recommended that Mr Javor attend English training to improve his English skills and broaden his employment options. 17At some stage before March 2009 Mr Javor attended an adult migrant English program conducted by UWS College. A certificate issued by that college indicated that Mr Javor had not yet reached "functional English" which would permit him to participate in complex spoken exchanges, understand information both with familiar and unfamiliar contexts and be able to comprehend tests in familiar topics. Between March and September 2009 Mr Javor completed a further adult migrant English program conducted by Navitas English. 18Notwithstanding his participation in these courses, Mr Javor's command of English did not significantly improve. In May 2010 he participated in further sessions of vocational counselling and job search skills training. Those sessions were organised by Konekt. In a further report dated 25 August 2010 Konekt recorded that the barriers or factors affecting Mr Javor's return to work remained: * "No English Skills. * Limited cognitive ability. * Resistant to participating in English Language Skills Training. * Limited Transferable skills. * Lack of motivation to return to work." 19The report concluded that Mr Javor "requires additional English skills to be able to successfully participate in the QBE Job Placement Program. Until Mr Javor does not require an interpreter, he is not suitable to receive additional job seeking assistance." 20In 2008 or 2009 Mr Javor's eldest daughter, who was then at high school, assisted him in applying for jobs. Most of those applications were made by telephone in response to employment opportunities advertised in the local English language newspaper. From March 2010 to March 2012 a handwritten list was kept of the businesses to which such applications were made. The main reason for keeping that record was to provide evidence of Mr Javor's attempts to obtain employment which could be provided to the Department of Social Security so as to support his claims for Centrelink unemployment benefits. 21Mr Javor's daughter also gave evidence that Serbian was the only language spoken in their home, that her father's English was "extremely poor", that he was "very embarrassed" about not speaking English, that his pronunciation was not good and that he did not "go well" trying to learn English. Mitigation of damages for lost earning capacity (grounds 1 and 2) and challenges to findings of fact (grounds 5 and 7) 22The appellant's argument relies in part upon the provisions of s 151L of the Workers Compensation Act 1987 which provides: "151L (1) In assessing damages, the Court must consider the steps that have been taken, and that could reasonably have been or be taken by the injured worker to mitigate those damages. (2) In particular, the court must consider the following matters: (a) whether the injured worker has undergone appropriate medical treatment, (b) whether the injured worker has promptly sought suitable employment from the employer or, if necessary, suitable alternative employment (c) whether the injured worker has duly complied with the worker's obligations under Chapter 3 of the 1998 Act (workplace injury management), (d) whether the injured worker has sought appropriate rehabilitation training. (3) In any proceedings for damages, the person claiming damages has the onus of proving that all reasonable steps to mitigate damages have been taken by the injured worker. However, the person claiming damages does not have the onus of establishing that the steps referred to in paragraphs (b)-(d) of subsection (2) have been taken, and the court assessing damages does not have to take the matters referred to in those paragraphs into account, unless it is established that before those steps could reasonably be expected to have been taken the worker was made aware by the employer or insurer that the worker was required to take those steps." 23With respect to s 151L(2)(c), in its written submissions to this Court the appellant relied upon s 48(1) of the Workplace Injury Management and Workers Compensation Act 1998 (the WIM Act). Section 48 in that form was enacted by the Workers Compensation Legislation Amendment Act 2012 (No 53), s 2(1), Schedule 1.2[4]. That amendment did not, however, apply to Mr Javor's injury because that injury happened before the commencement of that provision: see s 41(2). At the time of Mr Javor's injury s 48 of the WIM Act provided: "48. An injured worker must make all reasonable efforts to return to work with his or her pre-injury employer (that is, the employer liable to pay compensation to the worker) as soon as possible, having regard to the nature of the injury." 24The principal difference between this provision and that relied upon by the appellant is that the latter (s 48(1)) imposes an obligation to make reasonable efforts to return to work in suitable employment either at the place of employment or at another place of employment. That difference is of no practical significance in this case because the taking of steps to return to work is also dealt with by s 151L(2)(b) and it is not suggested that Mr Javor should have sought to return to work with the appellant. 25It is convenient to address the substance of the appellant's mitigation arguments before considering any effect on those arguments of the onus provision in s 151L(3). The appellant submits that the primary judge did not consider, as he was required to do by s 151L(2)(b) and (c), whether Mr Javor had taken reasonable steps promptly to seek alternative employment. The appellant argued before the primary judge (as is recorded at [107]) that Mr Javor was fit to return to work in early 2005 and that thereafter he made no genuine attempts to find alternative work. The argument that he was fit to pursue such alternative work was based, in part, on Dr Giblin's statement in his report dated 17 December 2004 that he was "happy for him to return to work". 26The primary judge rejected each of these arguments: see esp at [71], [72], [111], [112], [121], [134]. In my view he is not shown to have erred in doing so. Dr Giblin's report dated 17 December 2004 left the assessment of Mr Javor's fitness to return to work to Dr Todorovic. Dr Todorovic's evidence (specifically his report dated 22 February 2005) confirmed that Mr Javor was not likely ever to be fit to return to his pre-injury duties. His opinion was that Mr Javor would, in the future, be fit for part-time light duties after a work-conditioning program had been completed. Mr Javor's evidence was that he was first certified fit for light duties at the end of 2005 or in early 2006. That evidence was not challenged. At that time he commenced looking for part-time work involving light duties. That he did so is consistent with what he told Dr Bhattacharyya as recorded in his reports dated 11 and 21 April 2006. 27Mr Javor's evidence was that he commenced looking for work in late 2005. He relied upon the job search diary entries and later handwritten lists of businesses to which job applications had been made as evidence of his attempts to find employment. The appellant argued that the steps taken to find employment - principally the making of job applications over the telephone by someone who spoke little English - was no more than a "charade": [107]. In support of that argument, the appellant pointed to the fact that a number of the jobs applied for involved positions for which Mr Javor had no relevant training, skill or experience. For example, it was pointed out that he applied for positions such as a "glass cutter", "French polisher", "butcher" and "sandwich hand". 28The primary judge also rejected this argument. He found at [72] that whilst some of the positions which Mr Javor sought may have been unrealistic having regard to his lack of skill in English or his want of relevant training or qualification, Mr Javor was "well motivated and should not be criticised for not trying to mitigate his situation". In my view the primary judge is not shown to have erred in reaching that conclusion. 29The appellant's argument to the contrary has two aspects. The first is that Mr Javor made applications for a number of positions for which he was clearly not qualified. However, the evidence suggested at least two explanations for that having occurred. Mr Javor's daughter explained that some applications were made for jobs for which he was not qualified because she understood that her father had been asked by the workers compensation insurer to provide evidence of applications for at least four jobs each fortnight. She said that on occasions they could not find anything suitable because there was nothing advertised for which Mr Javor was qualified. For that reason applications were made for jobs for which he was not qualified. Mr Javor also gave evidence that he applied for some positions although he was not qualified for the advertised job because he thought the business might have other positions involving light duties for which he was qualified. 30The primary judge accepted Mr Javor and his daughter as witnesses of credit: [12]. The other evidence relevant to this subject does not show that their evidence as to the making of these job applications should not be accepted. The Konekt report of 13 September 2008 recorded that the respondent had actively been seeking work. That report and the later report of 25 August 2010 confirmed that the fact that Mr Javor spoke little English constituted a significant difficulty for his making job applications, particularly for positions which did not involve unskilled labouring. The difficulties which Mr Javor, even with the assistance of his daughter, faced in making those applications were to be expected and provide no basis for challenging the primary judge's conclusion that Mr Javor was genuinely seeking to find suitable employment. 31The second aspect of the argument made by the appellant is that Mr Javor failed to take reasonable steps to become proficient in English. Before considering that argument it is necessary to address a different, and inconsistent argument, which was made in support of the more general proposition that Mr Javor had not taken reasonable steps to find alternative employment. 32That argument was that Mr Javor was exaggerating or overstating his lack of skill in the English language. The primary judge made no such finding. Instead he found that Mr Javor's lack of proficiency in English was due at least in part to his not having a facility for learning that language: [70], [121]. That finding was justified on the evidence. That evidence was that he had undertaken a number of courses with limited success. He attended English classes when he first arrived in Australia. He attended further classes at the Parramatta College in May and June 2005. As assessed by Konekt in its report of 13 September 2008 he was said to have "limited English skills" which restricted him to unskilled labouring positions. His English skills were assessed as not being suitable for "occupational positions that rely on English reading and comprehension abilities". Mr Javor subsequently completed two further English courses. One was completed at UWS College before April 2009. The other was undertaken between March and September 2009 and conducted by Navitas English. Notwithstanding that he had completed those courses, Konekt concluded in its report dated 25 August 2010 that he had "no English skills". More significantly, Konekt also concluded in that report that Mr Javor had "limited cognitive ability" and that he was resistant to participating in English language skills training. That evidence was consistent with the evidence of his daughter as to his difficulties and embarrassment in relation to the speaking and understanding of English. 33The appellant argued that Mr Javor's evidence that he had no English language skills was not consistent with Ex N, which was the UWS College certificate issued in April 2009. That argument must be rejected. The certificate did not indicate that Mr Javor was proficient in English. On the contrary, it indicated that he had not reached "functional English" as that expression is described in that certificate. 34The appellant's argument that Mr Javor had failed to take reasonable steps to become proficient in English focused on the part of that 2010 Konekt report which records that Mr Javor did not attend a further English course which had been arranged in July 2010. That report continues: "Mr Javor has expressed that he does not feel an English course is necessary to find work and he stated he is too old to learn English and he finds it stressful. Mr Javor will continue to be unsuccessful in attempting to attain employment if he fails to attend an English course." 35In relation to this argument the primary judge concluded: "[125] To the extent that the April 2010 Konekt report made mention of a lack of motivation of the plaintiff for returning to work, the embellishment of pain symptoms and restrictions, and his resistance to training in English and in job seeking, I do not consider that these are matters that should be seen as critical of the plaintiff or viewed as a failure to mitigate his damages, given his ongoing pain, his limited cognitive and language abilities, and the earlier effect of depression and anxiety on his potential for rehabilitation." The primary judge then referred to his earlier finding: "[70] The plaintiff has an apparent lack of proficiency with the use of English language as he does not have a facility for learning the language. I do not consider his inability to learn to use English represents an unreasonable failure to mitigate his damages." 36In my view these findings were available on the evidence, and in particular the Konekt assessment of his cognitive ability and his daughter's evidence as to the way in which his language difficulties manifested themselves in the domestic environment. 37Mr Javor also gave evidence in cross-examination which contradicted some aspects of the Konekt report. That evidence had to be considered in circumstances where the author of that report did not give evidence. Mr Javor denied that he said that he was too old to learn English or that he did not think it was necessary for him to undertake an English course in order to find work. He explained that he did say to Konekt: "... that I think that I would improve my English if I were to be involved with people rather than attending classes." He also said that he did not attempt to enrol in one of the three language courses suggested by Konekt at this time (that at Cecil Hills Community Centre) because that course was not being held for a month or two. 38In the face of this evidence, and given Mr Javor's evidence of the other classes which he attended and Konekt's assessment of his difficulties in learning English, the primary judge was justified in concluding that his lack of English skills and inability to learn English were not the consequence of any unreasonable failure on his part to attempt to do so. 39For these reasons the challenges to the primary judge's conclusions as to mitigation of damage should be dismissed. That makes it unnecessary to consider the question as to onus which might have arisen in relation to the two matters relied upon. As noted earlier, s 151L(3) provides that the worker does not have the onus of establishing that the steps referred to in paragraphs (b) to (d) of subsection 151L(2) have been taken unless it is established that before those steps could reasonably be expected to have been taken the worker was made aware by the employer or insurer that he was required to take those steps. The job search diary forms which were provided to Mr Javor and completed between April 2006 and April 2008 state that it is part of the worker's "legal obligations" that he "look for work". That statement may be sufficient to satisfy s 151L(3) in relation to the taking of steps to find suitable alternative employment. However, there was no other evidence which constituted a communication by or on behalf of the appellant or its insurer to Mr Javor stating that he was required to undertake any particular English language course as part of his rehabilitation training. 40In dealing with the arguments concerning grounds 1 and 2 I have also dealt with the appellant's challenges to findings of fact made by the primary judge. Those challenges, as identified in argument, were to the findings that Mr Javor had no English language skills and that his resistance in July 2010 to undertaking further training in English was unreasonable. Evidence of earnings of comparable workers (grounds 5 and 7) 41The appellant argues that the primary judge was not justified in using the evidence as to the earnings of Mr Oliveric and Mr Visic as an indication of what Mr Javor could have earned had he not been injured. It submits that Mr Oliveric and Mr Visic occupied positions which were quite different, in terms of skill and experience, to that in which Mr Javor was employed at the time of his injury. Each of these witnesses gave evidence that he was a "formwork labourer". Each began working in that position in about 2005. The primary judge accepted the evidence of these witnesses as truthful: [12]. Mr Oliveric said that at the time of the accident he was a "formwork carpenter". However, he maintained that there was no real difference between that position and that of a "formwork labourer" and that the basic skills required for the former could be acquired "in a couple of days". That evidence was not contradicted by any other evidence. There was no other cross-examination of Mr Oliveric, and no cross-examination of Mr Visic, to suggest that the work which each carried out or the skills which they brought to bear in doing so were sufficiently different from those of Mr Javor as to justify higher earnings than he would have been able to obtain as a "formwork labourer". That being the case, it is not established that the primary judge erred in treating the earnings of these witnesses as an indication of the value of Mr Javor's lost earning capacity. Conclusion 42For these reasons the appeal should be dismissed with costs. 43BARRETT JA: I agree with Meagher JA. 44WARD JA: I agree with Meagher JA. ********** 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: 25 October 2013