District Court New South Wales Medium Neutral Citation: The Clean Plumber Pty Limited v Communications Construction Consultants Pty Limited [2014] NSWDC 320 Hearing dates: 29 May 2014 Date of orders: 30 May 2014 Decision date: 30 May 2014 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1)Note that the limit of indemnity under s 151Z(1)(d), being the damage in respect of the injury, is determined to be $150,506.97. (2)Judgment for the plaintiff in the sum of $35,335.81. (3)The defendant to pay the plaintiff's costs. Catchwords: NEGLIGENCE – DAMAGES – work injury – negligence by a third party – recovery by employer's insurer – amount of personal injury damages – limit of indemnity – level of non-economic loss – relevance of age of injured party – domestic assistance – interest – award less than $40,000 - costs Legislation Cited: Uniform Civil Procedure Rules 2005, r 42.35 Workers Compensation Act 1987, s 151Z Cases Cited: Clarence Valley Council v Macpherson [2011] NSWCA 422 Kemble v Gate Gourmet Services Pty Ltd [2012] NSWDC 52 Reece v Reece (1994) 19 MVR 103 Category: Principal judgment Parties: Edwards Michael Lawyers (plaintiff) Representation: Counsel: Mr S Maybury (plaintiff) Solicitors: Edwards Michael Lawyers (plaintiff) File Number(s): 2013/237526 Publication restriction: None Judgment A. INTRODUCTION 1. The plaintiff, The Clean Plumber Pty Limited ("The Clean Plumber"), employed James Kent as a plumber. Mr Kent was injured in the course of his employment when he tripped on a damaged footpath. The workers compensation insurer of The Clean Plumber made payments to and on behalf of Mr Kent and seeks to recover those payments under s 151Z of the Workers Compensation Act 1987 ("the Act") from the defendant, Communications Construction Consultants Pty Limited, a building company that had done works on the footpath. The Clean Plumber obtained default judgment against the building company and applies for an assessment of its loss. B. THE STATUTORY PROVISION 1. Section 151Z(1)(d) of the Act provides as follows: "151Z Recovery against both employer and stranger (1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect: … (d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages), …" 1. Thus, if the building company is liable to Mr Kent for the injuries suffered by Mr Kent when he tripped on the footpath then The Clean Plumber (or, more accurately, its workers compensation insurer who paid the compensation) is entitled to be indemnified by the building company for its loss, limited to the amount of damages for which the building company is liable to Mr Kent. C. PROCEDURE AND ISSUES 1. The Clean Plumber obtained default judgment against the building company with damages to be assessed. The building company did not appear at this hearing and The Clean Plumber proceeded ex parte. The default judgment confirms that the building company is liable to The Clean Plumber. The residual issues left for me to determine are: 1. what is the limit of indemnity, which is the same question as what is the amount of damages for which the building company became liable to Mr Kent as a result of the incident; and 2. what is the judgment amount that I should order, which is the amount of compensation paid by The Clean Plumber or the amount of the limit of indemnity, whichever is the lesser. D. THE LIMIT OF INDEMNITY/DAMAGES OF MR KENT (1) Background 1. Mr Kent gave an account of the incident and its effects. He was not cross‑examined but nevertheless he appeared to me to give a fair and balanced account of the incident and his injuries and disabilities. He did not, so far as I could tell, appear to exaggerate his symptoms. I accept his account. 2. On 27 August 2010, Mr Kent was walking along a footpath near the Officeworks building in West Ryde. He was seeking to ascertain the cause of some seepage and water leaks in that building in accordance with directions from his employer, The Clean Plumber. As he walked, he stepped on the edge of a broken piece of the footpath, twisted his ankle and fell to the ground, his elbow striking the ground, causing pressure in his shoulder. Mr Kent was in a lot of pain and he lay on the ground and cried, an uncommon thing for him. Once he recovered, he first called the council to complain about the footpath, then his employer to explain that he was injured and was going to see his doctor. He felt pain in his left ankle, left knee and left shoulder, but particularly, in his ankle. 3. Mr Kent was off work for about five weeks. During that period, the knee injury resolved but he was still troubled by his ankle and the condition of his shoulder worsened. At the suggestion of his doctor, he undertook physiotherapy from about three weeks after the fall that lasted about six months. That treatment assisted his ankle injury, increasing the strength in his ankle so that it became less troublesome. Mr Kent ceased going to physiotherapy as he found he could do the same activities and stretches at home, which he continued to do. 4. Mr Kent's return to work about five weeks after the accident was not successful. He gave evidence that he lasted only one to three days, although the records indicate it may have been a week or so. In any event, he found that he could not descend steps other than by sitting on them. He was off work for a further fortnight. When he returned an apprentice assisted him whenever any lifting was needed. During this work he engaged in activities that were less physically demanding. 5. Mr Kent has worked as a plumber since his 16th year in late 1960 or early 1961, initially as an apprentice. He obtained his full qualification in about 1970. He enjoyed his work as a plumber which, at the time of the accident, amounted to about 50 years. He thought he would work until 67 or 68 then see if he was still inclined to work, depending on his health. His employer had indicated to him that he could work as long as he wanted. 6. Currently, Mr Kent is pain free apart from his shoulder and some occasional ankle pain. He has not been free of pain since the fall. His shoulder causes a dull, aching, continuing pain, which increases if he ever unwittingly uses his left arm beyond its limited movement. His left arm can be raised in abduction about 70% to the vertical before causing pain, whereas his right arm can be raised a full 180 degrees without trouble. 7. Notwithstanding the pain, Mr Kent continued at work. He was given a cortisone injection that did not significantly improve his condition. In September 2010 a MRI scan of Mr Kent's left shoulder was performed which showed a tear in the rotator cuff and "glenohumeral disease". 8. Mr Kent continued working until 13 January 2012 when he was approaching 67 years of age. On 1 February 2012 he underwent an operation on his shoulder, left arthroscopic subacromial decompression, debridement of the glenohumeral joint and biceps tenotomy and thereafter, after about three weeks, underwent a further course of physiotherapy for some six months. A MRI scan of his left ankle later in February confirmed some ligament damage. Since then Mr Kent has received a local anaesthetic injection and a "glenohumeral joint injection of Celestone and lignocaine". His condition is not expected to improve. 9. Mr Kent has not returned to work since the surgery in February 2012. He can no longer work as a plumber. He was earning $950 per week before tax, approximately $800 after tax. He lives on his own since his separation some 18 years ago in a standard detached house on a suburban block. He always mowed the lawn but in recent months has engaged someone to perform that task at $50 a visit, fortnightly during the growing season and less frequently in the colder months. 10. After the fall, Mr Kent's daughter initially stayed with him for a month. She assisted him for about four months thereafter on weekends, cooking, cleaning and mowing the lawn. These tasks took some three and a half hours. 11. Mr Kent has managed by himself since his daughter's assistance ceased even doing the lawn mowing one handed until recent times. He does his other domestic tasks, though not so frequently as he did before the fall. Changing bed linen and hanging wet clothes on the line are more especially challenging for him. He formerly enjoyed cleaning and polishing his car weekly whereas now he merely hoses it less frequently. He would like to get domestic help but "money only goes so far", he says. Mr Kent is reluctant to pick up his youngest granddaughter because of his infirmity. He is a keen photographer and he is less able to travel significant distances to do that because of his injuries. 12. For his pain, Mr Kent takes Oxycodone and Endone perhaps once a fortnight when he feels the pain more strongly. He takes Panadeine Forte or Panadeine Extra almost every night. Sometimes he also takes sleeping tablets. Four and a half hours is a good night's sleep because of the pain. He spends about $8 a week on medication. Mr Kent has put on weight since the fall. Formerly he weighed 95 kilos, now about 108 to 109. He sees this to be a result of his inability to exercise and his medication. He reads a lot and from time to time gets upset over his reduced level of fitness. (2) Claimed Amount of Damages 1. The Clean Plumber submits that Mr Kent has suffered the following damages, which it submits is the appropriate limit on the indemnity: Head of Damage Amount Non‑economic loss $77,000.00 Past economic loss $53,600.00 Loss of superannuation $5,896.00 Past out‑of‑pocket expenses $25,938.97 Future out‑of‑pocket expenses $4,822.00 Past paid care $250.00 Future paid care $89,666.00 Total $257,172.97 1. I am satisfied with all of these amounts as fairly representing the loss claimed save for the non‑economic loss component and the future paid care. The past economic loss represents 14 months of lost work until Mr Kent's 68th birthday. I accept that it is likely that Mr Kent would have worked until then. The amount also includes the seven weeks off work after the fall. The past out‑of‑pocket expenses comprise the cost of the shoulder operation and physiotherapy expenses. His future out‑of‑pocket expenses is the present value of his $8 per week medical expenses for his life expectancy and his past paid care is the cost on five occasions of the lawn mowing. I accept all of these items and the lost superannuation. 2. The figure for non-economic loss represents 28% of a most extreme case. I think that percentage is a little on the high side. It seems to me that 25% is a more appropriate figure, given Mr Kent's age and the level of his disability. In reaching this conclusion, I have considered the decision of Reece v Reece (1994) 19 MVR 103 where the Court of Appeal confirmed that the age of a person is relevant and that a younger age with a consequent likelihood of experiencing the pain for a more substantial period of years would suggest a higher level of non-economic loss. In that case, the plaintiff was 64 years old at the time of the injury, a little younger than the present plaintiff. 3. Further, in Kemble v Gate Gourmet Services Pty Ltd [2012] NSWDC 52 and Clarence Valley Council v Macpherson [2011] NSWCA 422, where in both cases the percentage of a most extreme case was assessed at 25% the plaintiffs seemed to have a similar level of pain and suffering. This assessment of 25% produces an amount of non-economic loss of $36,000, a reduction of $41,000 in the submitted amount. 4. The domestic assistance claim comprises the costs of lawn moving for a further 17 years, being Mr Kent's life expectancy and three and a half hours per week of commercial domestic assistance at $38.50 per hour for the same period. 5. So far as the lawn mowing is concerned, I think the amount of $8,439 should be discounted because Mr Kent might not be expected to need lawn mowing for the remainder of his life. There was no evidence of an intention to move or to remain in his present house but I regard it as unlikely that he would continue to live independently in his own detached home for the entire remainder of his life. Even if he did, some discount should be made because Mr Kent, absent the fall, may have been unable to mow his lawn for the remainder of his life absent the injury. There was also the prospect of some assistance from his daughters, although this may be a less significant matter since he has commenced paying a commercial rate for this service. There is also the prospect that on occasion he may recommence mowing the lawn himself as he did until more recent times, notwithstanding his shoulder difficulties. In my view, this amount should be reduced to the sum of $4,000 to represent the various possibilities and likelihoods to which I have referred, namely, that he may mow his own lawn, that his daughter may assist him, that he may not have a lawn to mow and that he may, in any event, apart from the injury, have not been able to mow his lawn for the remainder of his life. 6. The need for commercial domestic assistance, aside from lawn mowing, will be largely unaffected by any changing accommodation of Mr Kent. However, Mr Kent has made no payments in this regard since the fall. Initially, he had some assistance from his daughter but since those early months after the fall he has managed to do all of his domestic chores without assistance, although no doubt with more difficulty than when he previously did them. The Clean Plumber submits that if Mr Kent were awarded damages he would likely avail himself of commercial help on the basis of his evidence that he would likely get domestic help "but money only goes so far". 7. I have no evidence about Mr Kent's financial position and I do not think I can infer anything about his finances from him living alone for the past 18 years and being a plumber for about 50 years. Whether Mr Kent's award of damages should include an amount for commercial domestic assistance depends on the likelihood that he will both need and utilise commercial assistance. He has shown neither to date, apart again, from the first few months after the incident, and recently in respect of lawn mowing. Even if I consider that his financial resources may improve from an award of damages, as I am urged, and prepared, to conclude, I am not persuaded that Mr Kent would likely proceed to expend funds on domestic assistance. I do, however, think that the significance of Mr Kent's injured shoulder will make those tasks more difficult over time as he ages, rendering a greater need for domestic assistance and also increasing the likelihood of him expending funds on that need. 8. In all the circumstances, I propose to award a sum of $20,000 in respect of the need for future care, apart from lawn mowing. Thus, the total amount of future care damages determined by me is $24,000, a reduction of $65,666 on the amount submitted. 9. Accordingly, my assessment of damages is $106,666 less than the figure submitted. I determine that the total damages and, thus, the limit of indemnity provided pursuant to s 151Z(1)(d) is $150,506.97. No claim is made for interest on this figure. I also note that this hearing was, as referred to above, consequent upon a default judgment. There was no cross‑examination of Mr Kent and there was no proper contradictor in respect of the orders sought. In these circumstances, it might be doubted whether the damages I have determined are any guide, either as a maximum or a minimum, to the appropriate level of damages which Mr Kent, after a contested hearing, might be assessed to have suffered. E. THE RECOVERABLE AMOUNT 1. The amount claimed by The Clean Plumber is $31,068.47, comprising $6,650 in weekly compensation benefits and $24,418.47 in medical and rehabilitation expenses. The expenditure of this amount was established. Interest on this at the statutory rate, multiplied by 50% because the expenses were incurred over time between injury and the date of judgment, amounts to $4,267.34 to today. As the total including interest is less than the limit of indemnity, this whole amount should be awarded, being $35,335.81. F. COSTS 1. Part 42 r 35 of the Uniform Civil Procedure Rules 2005 provides: "42.35 Costs order not to be made in proceedings in District Court unless Court satisfied proceedings in appropriate court (1) This rule applies if: (a) in proceedings in the District Court, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $40,000, and (b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants. (2) An order for costs may be made, but will not ordinarily be made, unless the District Court is satisfied the commencement and continuation of the proceedings in the District Court, rather than the Local Court, was warranted." 1. In my view, it was appropriate that this matter be brought and continued in this Court and, accordingly, there should be no reduction on the normal costs order, although the amount awarded was within the Local Court jurisdiction. Section 151Z(1)(d) required a determination of Mr Kent's damages. Those damages exceed the amount the Local Court would ordinarily have jurisdiction to assess and, thus, that court might not be expected to be familiar with those types of awards. G. CONCLUSION AND ORDERS 1. Accordingly, the orders and notations of the Court are: 1. Note that the limit of indemnity under s 151Z(1)(d), being the damage in respect of the injury, is determined to be $150,506.97. 2. Judgment for the plaintiff in the sum of $35,335.81. 3. The defendant to pay the plaintiff's costs. ********** 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: 06 May 2015