Allison v Tuscan Industries Pty Limited

Procedural order 2The plaintiff was out of time for the filing of his statement of claim. At the outset of the hearing, in separate reasons, pursuant to a notice of motion filed by him seeking such an order under s 151D of the Workers' Compensation Act 1987 ["WC Act"], I granted the plaintiff leave to proceed, notwithstanding that his claim was filed out of time.

Issues 3Once the order was made granting the plaintiff leave to proceed pursuant to s 151D of the WC Act, the defendant admitted there had been a relevant breach of the duty of care owed to the plaintiff. This left the remaining issue of whether the plaintiff's economic loss claim should be accepted. The principal factual dispute underpinning that claim was whether, before the subject accident, the plaintiff had been intending to seek alternative higher paid employment with a different employer in the plastic extrusion industry, but had been prevented from doing so as a result of his injury. The outcome of that issue was dependent upon whether the plaintiff's evidence should be accepted in that regard.

Credit 4I found the plaintiff to be an entirely credible and impressive witness whose evidence could be relied upon as being truthful. His account of events was straightforward, considered, matter of fact and understated. I accept his evidence in its entirety.

Facts 5In the paragraphs that follow, I set out my findings of fact concerning the plaintiff's background and work history, his pre-accident work intentions, the events of the accident, and relevant matters concerning the medical treatment and assessment of the plaintiff.

Plaintiff's background 6The plaintiff was born in the UK in 1947. At the commencement of the hearing he was 2 weeks short of age 65 years. In the UK he qualified as a draftsman, and also worked as a blacksmith. He also worked for a flight catering company. He migrated to Australia in 1974. He initially worked as a furniture salesman in a department store. In 1981 he obtained employment in a plastics factory as an extrusion machine operator. In 1984 he worked as a sheet metal cutter and fabricator. In 1985 he resumed work as a plastics extrusion machine operator until 1988. From 1988 to 1991 he worked as a manager of a suburban hotel. After a short gap in his employment in 1991, in 1992 he commenced work with the defendant as an extrusion machine operator. Other than for a short period in his employment with another plastics company, the plaintiff had worked continually with the defendant until his injury on 31 October 2003. 7In the period immediately before the accident the plaintiff had tired of his employment with the defendant because he felt he had been considerably underpaid compared to others employed by the defendant in the same job. As a result he was looking to leave his position and obtain more remunerative employment in the same industry. 8He believed, reasonably on the evidence, that by working in the same industry, in another factory, as a supervisor, he would have easily been able to earn between $27 and $37 per hour gross. In the defendant's employ, at the time of the accident, the plaintiff said that his hourly rate of pay was about $12.50. The plaintiff's reason for having remained in that lesser paid position for so long was not explained in the evidence. The plaintiff's evidence that he intended to leave the defendant's employ to seek those higher earnings in a supervisory capacity was not challenged or contradicted through other evidence. There being no sound reason for not accepting that evidence, I accept it. 9The plaintiff was accustomed to regularly working overtime before the accident. He worked 12-hour shifts for either 48 hours or 60 hours per week, for which he was paid overtime. In this regard, he worked 60 hours per week more regularly than 48 hours per week.

Accident on 31 October 2003 10Although the defendant admitted a relevant breach of duty of care during the course of the hearing, it is necessary to shortly review the factual circumstances in which the plaintiff sustained his injury. 11It is sufficient to say that on the day of the accident, the plaintiff was in the process of loading plastic beads into a hopper that fed the beads into a plastic extrusion machine. To do so he had to stand on a mezzanine platform about 8 feet above ground. He was required to climb a rickety metal stepladder in a confined access space whilst balancing a 25kg bag of plastic beads on his shoulder. 12When he reached the tipping point for the beads he had to maintain his balance on the ladder on his toes whilst cutting open the bag to pour the beads into the hopper. He was required to carry out this task on multiple occasions each day. He had on many occasions complained to his employer about this work system because it was unsafe. He had also on many occasions before the accident, suggested that his employer obtain an automated hopper loader which he had seen in operation elsewhere, at a cost of $1200. That suggestion was rejected because of the expense. Instead, the employer had from time to time effected temporary repairs to the rickety stepladder. 13On the day in question, the plaintiff had climbed the stepladder with a 25kg bag of plastic pellets on his shoulder. As he was readying himself to swing the bag up and onto the rim of the hopper before cutting the bag open for pouring the beads, the unstable stepladder tilted and moved from under him. In these events he was pushed sideways by the weight of the bag against his neck. In these events he sustained a painful and serious neck injury. Ever since that time, the plaintiff's neck, which beforehand had not caused him pain or difficulty, has remained symptomatically painful, despite surgical treatment. 14The defendant's admission of breach of duty of care was an appropriately made concession in these circumstances.

Injuries and initial treatment 15There was no evidence tendered to show what initial medical treatment was sought by the plaintiff. No adverse comment was made about the fact that although the plaintiff was injured on 31 October 2003, the earliest medical report that was tendered related to an x-ray examination almost 12 months later. 16Although there were no contemporaneous medical reports tendered to detail the plaintiff's injuries, no challenges were made by the defendant to the plaintiff's oral evidence and the summaries of the histories of injury recorded in the medical reports tendered. In those circumstances, I accept the plaintiff's account of his injuries and the summaries of the accounts he has provided to the assessing medical practitioners: Daw v Toyworld (NSW) Pty Ltd [2001] NSWCA 25, per Heydon JA at [70]; s 60 of the Evidence Act 1995. 17I find that the plaintiff suffered a severe jarring injury to his cervical spine which served to permanently aggravate and render painfully symptomatic, an underlying degenerative condition of his cervical spine. That injury has caused him to suffer lasting abnormal neurological symptoms, weakness and impairment.

Medical assessments and subsequent treatment 18On 17 April 2004, the plaintiff underwent an x-ray examination of his cervical spine which revealed narrowing of the C5/6 and C6/7 intervertebral disc space with osteoarthritic changes in the C2/3 and C6/7 apophyseal joints. Narrowing was also identified in the C6/7 foramina on both sides and in the C5/6 intervertebral foramina on the right side. These findings were obvious degenerative changes, as was confirmed by subsequent medical opinion. 19On 1 March 2006, at the request of the workers' compensation insurer, the plaintiff was examined by Dr Philip Sharp, a consultant surgeon. Dr Sharp noted that the work accident had caused the plaintiff to aggravate his pre-existing degenerative changes in his neck causing ongoing neck pain and headaches 20On 21 June 2007, the plaintiff underwent x-ray examination of the cervical, thoracic and lumbar spines, and the pelvis. In these x-rays the only identified abnormalities comprised degenerative spondylitic changes with osteophyte formation and disc space narrowing at the levels C5/6, C6/7 and at L4/5, L5/S1. 21On 9 July 2008, and again on 6 August 2008, at the request of his solicitor, the plaintiff was examined by Dr Vijay Maniam, an orthopaedic surgeon. At that time, Dr Maniam recorded the plaintiff's complaints of constant neck pain and associated headaches, radiation of pain into the right shoulder and right arm, intermittent pain in the lumbar spine with radiation into the right lower leg, weakness and dragging of the right leg. 22After examining the plaintiff and reviewing x-rays, Dr Maniam diagnosed the plaintiff to be suffering from aggravation of pre-existent degenerative disease in the cervical spine associated with cord impingement at the C5/6 level with related myelomalacia, intervertebral disc protrusion at L4/5 with a mass effect on the L4 nerve root, and intervertebral disc protrusion at the L5/S1 without any neurological involvement. At that time, Dr Maniam was pessimistic about the plaintiff returning to any work. 23On 24 July 2008, at the request of Dr Maniam, the plaintiff underwent an MRI scan of the cervical and lumbar spines. 24The cervical MRI scans were reported as showing moderate changes, the worst at C5/6, where there was some effacement of the cerebrospinal fluid around the cord, and compression around the cord in keeping with myelomalacia, and multi levels of foraminal stenosis. 25The lumbar MRI scans were reported as showing mild to moderate changes, the worst being at L4/5 and L5/S1, with an abnormality at the right exiting L4 nerve root in the right neural exit foramina at L4/5, but without definite neural impingement of the spinal cord in the supine position. 26In July 2008, at the request of Dr Maniam, the plaintiff was examined by Dr Suresh Nair, a neurosurgeon. Dr Nair was of the view the plaintiff had a severe spinal cord compression causing right sided neck pain and brachialgia, leg stiffness with weakness and giving way of the right leg, which he related to the accident in question. He recommended a cervical discectomy procedure with decompression and fusion. 27On 14 January 2009, at Nepean Private Hospital, Dr Nair performed a right-sided C5/6 anterior cervical discectomy and a cervical fusion operation on the plaintiff. On 20 January 2009, at the request of Dr Nair, the plaintiff underwent a post-operative neck x-ray, which was reported as showing an anterior fusion and disc replacement at the C5/6 level. 28On 10 February 2009, when Dr Nair next reviewed the plaintiff, he noted the plaintiff's neurological state remained unchanged from his pre-operative state. He recommended an MRI scan of the plaintiff's cervical spine. 29On 27 February 2009, the MRI scan recommended by Dr Nair was carried out. It was reported as showing satisfactory decompression and anterior cervical fusion at the C5/6 level, with multi-level degenerative changes present and incompletely resolved cord signal intensity, which may be a reference to the earlier reported myelomalacia. 30On 6 March 2009, Dr Nair reviewed the plaintiff and the MRI scan. He noted the scan showed quite a good decompression of the spinal canal at the C5/6 level. He noted a reduction in the plaintiff's reported neck pain and an improvement in sensation in the affected leg. 31On 22 January 2010, at the request of his solicitor, the plaintiff was examined by Dr Michael Fearnside, a consultant neurosurgeon. Dr Fearnside concluded that although the plaintiff had a pre-existing asymptomatic and significant cervical spondylosis in his cervical spine, when he injured his neck in the course of his employment in the subject accident, that accident was a substantial contributing factor to the causation of symptoms in the plaintiff's neck. 32Dr Fearnside identified the plaintiff to have a Brown Sequard syndrome, being a pyramidal weakness and sensory deficit in the legs, suggestive of a hemi-spinal cord compression, consistent with myelomalacia on the left side at the level C5/6. He noted surgery had arrested further deterioration of the myelomalacia. He expressed the opinion the plaintiff was permanently unfit for heavy manual work, but was fit for part-time light duty work for about 20 hours per week. 33On 26 Aril 2011, at the request of his solicitor, the plaintiff was re-examined by Dr Fearnside. At that time a history was noted of continued signs of weakness from the partial Brown Sequard injury, with associated weakness in the right leg, constant neck pain, dropping of objects and impairment of walking and balance. Dr Fearnside reiterated his earlier opinion but also added that the plaintiff would be fit for some light supervisory work. He also noted the plaintiff had ceased work because of neck pain and because of problems with his walking and balance.

Remaining disabilities 34The plaintiff's ongoing disabilities comprise significant and constant neck pain with associated headaches. He has pain that radiates into his right shoulder and right arm. He also has intermittent pain in the lumbar spine with radiation into the right lower leg. He has weakness in the right lower leg, which he drags when he walks. Those symptoms relate to what has been described as a partial left-sided Brown Sequard syndrome or hemi-spinal cord compression with pyramidal consequences due to myelomalacia. This problem affects his gait and his balance. The plaintiff has a surgical scar on the anterior portion of his neck from the discectomy decompression and cervical fusion procedures at the level C5/6.

Employment effects 35The plaintiff had no pre-accident plans for retirement at the age of 65 years before he had his accident on 31 October 2003. The plaintiff's ongoing neck problems have had a lasting detrimental effect on his ability to work. After various periods away from his employment with the defendant due to neck pain and aggravated discomforts, in May 2005, the plaintiff left the employ of the defendant and obtained alternative employment with Tech Plas Extrusions as a supervisor, earning $27 per hour gross. 36The plaintiff's reasons for leaving the defendant's employ were that he found the work too difficult because of his neck problems, and because he felt his employer "did not look after employees" in his circumstances. No evidence was called to contradict that evidence. 37The plaintiff found the work with Tech Plas too difficult because of his neck problems and as a result, he had to leave that employment in 2008. It should be noted that in the employment of Tech Plas, he was required to do some physical work when other employees were on their scheduled breaks. 38After leaving Tech Plas the plaintiff was on Centrelink unemployment benefits between 2008 and 2009. In 2009 he obtained occasional part-time work in the plastics industry with APE. He maintained that employment intermittently, neck and related pain permitting, until April 2011, when he left because he could not cope with the work. 39Although the precise dates of the above periods of employment and unemployment were not stated in the evidence, the general picture is one of significant impairment of the plaintiff's past earning capacity. That picture is borne out by the medical evidence which supports the claim that the plaintiff has become unsuited for heavy manual work due to the effect of his injuries. 40The plaintiff has recently obtained a supervisory position in the plastics industry to commence some weeks following the hearing. That job will be managerial and will involve the training of others so he will not be performing physical work.

Mitigation 41As is evident from his oral evidence and from Exhibit "D", the plaintiff has undergone extensive medical and allied treatment, including surgery for cervical spinal fusion. There is no basis from within the evidence to suggest that the plaintiff has failed to pursue his duty to mitigate the effects of his injuries. I find that the plaintiff has taken all reasonable steps to mitigate the effects of his injuries. I find that his periods of unemployment have been due to the effects of the injuries he sustained in the work accident in question.

Damages 42In the paragraphs that follow I set out my assessment of the plaintiff's entitlement to damages.

Past economic loss 43The plaintiff makes a claim for past economic loss on several bases, namely Method A and Method B: Method A 44Method A assumed that uninjured, the plaintiff would have moved to supervisory work that would have attracted remuneration at the rate of between $27 to $37 per hour gross for a 38 hour week. The plaintiff relied upon a middle range figure of $33 per hour to yield a weekly rate of $1254 gross. In support of the reasonableness of these assumptions, the plaintiff pointed to his employment with Tech Plas in 2008 at the rate of $27 per hour. 45The plaintiff's economic loss claim further assumed that the plaintiff would have been paid for overtime at 130 per cent penalty rates. Having worked overtime in the past, for 48 to 60 hours per week in total whilst in the defendant's employ, the plaintiff relied upon a more conservative rate of 55 total hours per week including overtime. This represented an additional 17 hours per week of income at $43 per hour, or $731 per week gross, thus identifying a total gross weekly rate of $1985 which, it was not disputed, in 2004 was the equivalent of $1275 per week net. 46Method A proceeded along the further premise that from 2004, average weekly earnings have increased by an overall 30 per cent. This was said to produce an average rate of 15 per cent over the period, or $1466 per week net. 47On Method A, the plaintiff's submissions calculated a potential claimed loss of $1466 per week net over the period of 466 weeks since the accident in the amount of $683,156. After allowing for an offset for the plaintiff's actual earnings over that period, namely, $198,131, the balance of $485,025 is claimed as a loss. Method B 48Method B, the plaintiff's alternative calculation, assumed a loss of $1119 per week net, adjusted to $1286 per week net after allowing for increases in average weekly earnings. 49The base rate of $1119 per week assumed by Method B was derived from a rate of $28 per hour for 38 hours per week or $1064, to which a further $618 per week gross was added to reflect 17 hours per week of overtime at $36.40 per hour, resulting in a gross weekly amount of $1682, which was the equivalent of $1119 per week net. 50Method B further assumed increases for average weekly earnings to yield a figure of $1286 per week net. 51On those assumptions, pursuant to Method B, the sum of $1286 per week net over 466 weeks yielded an amount of $599,276, less actual net income of $198,131, to identify a claimed past loss of earnings of $401,145 net. Consideration and conclusions on past economic loss 52A difficulty with each of these methods was the inherent imprecision of the calculations and the absence of precise evidence of actual comparable earnings and the availability of regular overtime in the comparable positions upon which the claim is based. In these circumstances, I must evaluate the evidence as best I can in the light of the available evidence. 53The defendant's approach to the assessment of the plaintiff's claim for past loss of earnings was that until the plaintiff had his cervical fusion operation on 14 January 2009, he worked for substantially the whole period, and received annual increments in his employment in that regard, and therefore, it was submitted, he suffered no loss in that period before his operation. 54The defendant further submitted that following the surgery, the plaintiff received workers' compensation payments and make-up pay. The defendant claimed that the plaintiff's tax returns reflected the same earnings, with increments, as the plaintiff would have derived had he not been injured, and therefore, it was submitted, he had suffered no loss. The defendant further submitted that the calculations submitted on behalf of the plaintiff were speculative in nature, and should not be allowed. I considered the defendant's position to be too simplistic and one which did not consider the evidence of the plaintiff. 55The essential difference between the parties on the issue of past economic loss is whether the plaintiff's evidence should be accepted when he said he was intending to change his employment around the time the accident occurred. There is no dispute as to the interpretation of the plaintiff's income tax returns and notices of assessment, which include income from workers' compensation payments and payments from Centrelink. 56Given the plaintiff's repeated safety concerns over the defendant's system of work and what he described as underpayment of wages, I consider the plaintiff's evidence on the issue of whether or not he was intending to change his employment, was compelling and had the ring of truth about it, and should be accepted. I find that at the time of the accident, it was the plaintiff's intention to find supervisory work in the industry he was working in, and to seek remuneration in the range he has identified, and that as a result of his accident, to date he has been unable to do so, and has lost income accordingly. 57This then raises the question of how the plaintiff's past economic loss should be assessed. 58Of the differing scenarios outlined in the respective submissions that I have summarised, subject to some qualifications to which I shall refer, I have generally preferred the plaintiff's submission that proceeded according to the described Method A. 59I accept that in general terms, the plaintiff has suffered loss of income along those lines, but with a discount that must necessarily be applied to reflect the following qualifications that I consider must be taken into account. 60The first qualification is the uncertainty as to the timing of the plaintiff's changeover to higher paid employment with a different employer had he remained uninjured. On the one hand, the plaintiff had put up with the deficiencies he described in his pre-injury employment for some time, and on the other hand, it was clear that he was dissatisfied in his pre-injury employment and wanted to move on to a better paid position that was supervisory in nature. However, no evidence was called as to the precise timing of availability of such alternative employment. In those circumstances, I consider that a discount of some months must be applied in favour of the defendant in any assessment of this component of the claim. 61Secondly, the evidence of the range of rates was loose, as were the assumptions. Whilst I am satisfied that the plaintiff would have made the move he described, and would have been paid at rates within the range he identified including for overtime, as was evident from the subsequent supervisory employment he obtained with Tech Plas, without firm evidence that these were the going rates, and that overtime was available to the extent that the plaintiff had expected to obtain, I consider that some discount should be applied on account of these factors as well. 62Thirdly, I consider the defendant made a valid point that during the time the plaintiff continued to derive earnings before his surgery, he continued to receive the benefit of annual CPI increments in his income, probably in line with the percentage increments found to apply to increases in average weekly earnings. The state of the evidence does not reasonably permit a precise mathematical analysis that enables that factor to be dissected and offset from the comparative calculations submitted on behalf of the plaintiff. Accordingly, a discount should be applied on account of this factor as well as the others I have identified. 63Fourthly, the plaintiff's pre-accident vulnerability to receiving a debilitating injury due to his degenerative cervical spine, and the usual potential adverse vicissitudes that arise in such cases where there were uncertain events to be reckoned in any balanced assessment, also requires that a discount should be applied. 64In my view, the uncertainties involved in this particular economic loss claim, although relating to past events, should therefore be assessed according to the principles identified in Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638. 65In my view, it would be artificial to apply serial discounts for these factors as this could lead to unwarranted multiple discounting. Instead, although the losses claimed relate to the past, I propose to apply a broad discount to reflect these factors of uncertainties inherent in the calculation of past economic loss: State of NSW v Moss [2000] NSWCA 133, (2000) 54 NSWLR 536, at [71]; Malec v JC Hutton Pty Ltd. 66I consider that an appropriate discount for these factors should be 25 per cent. Accordingly, applying a 25 per cent discount to the submitted sum of $485,025, this yields an amount of $363,768. 67I therefore award the plaintiff damages for past economic loss in the amount of $363,768.

Fox v Wood 68The plaintiff makes a claim for reimbursement of the tax paid on weekly workers' compensation payments. The defendant has conceded this should be in the amount of $13,000. I therefore award the plaintiff damages for reimbursement of the amount of tax deducted from his weekly payments of workers' compensation in the amount of $13,000.

Past loss of superannuation 69The plaintiff makes a claim for loss of past employer funded superannuation contributions. This sum is identified by applying the accepted rule of thumb of 11 per cent of past loss of net earnings. The plaintiff has been awarded $363,768 for this component of his loss. An amount of $52,000 should be notionally added to that sum to represent the net value of workers' compensation benefits to yield the notional net sum of $415,768. Applying the 11 per cent rule of thumb to that sum, past loss of employer funded superannuation benefits are identified as $45,734, and for past loss of superannuation I therefore award the plaintiff the sum of $45,734.

Future loss of earning capacity 70The plaintiff is limited in his claim for future loss of earning capacity to age 65, to a further 2 weeks from the commencement of the hearing. Consistent with the claim for past loss of earning capacity I award the plaintiff damages for 2 weeks future loss of earning capacity in the net sum of $3000.

Future loss of superannuation 71The plaintiff is entitled to damages for future loss of employer funded superannuation benefits which I assess at 11 per cent of $3000, namely $330.

Summary of damages assessment 72My assessment of the Plaintiff's damages is summarised as follows: (a) Past economic loss $363,768 (b) Fox v Wood $13,000 (c) Past loss of superannuation $45,734 (d) Future loss of earning capacity $3,000 (e) Future loss of superannuation $330 Total $425,832

Disposition 73The plaintiff has established his entitlement to a verdict against the defendant in the sum of $425,832. The defendant is entitled to offset its pleaded defence of $64,916.97 for past weekly payments. This identifies the plaintiff's entitlement to a judgment in the amount of $360,915.03.

Costs 74The plaintiff is entitled to an order that the defendant pay his costs of the proceedings on the ordinary basis unless an entitlement can be shown for some other order.

Orders 75I make the following orders: (1) Verdict for the plaintiff in the sum of $425,832; (2) After offsetting from the plaintiff's verdict the defence of payments made to the plaintiff in the sum of $64,916.97, judgment for the plaintiff in the amount of $360,915.03; (3) The defendant is to pay the plaintiff's costs on the ordinary basis unless otherwise ordered; (4) The exhibits may be returned; (5) Liberty to apply on 7 days notice if further orders are required.

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: 21 September 2012