Berrico Estate Pty. Ltd. v. Andersen [2003] NSWCA 23

Tuesday 11 February 2003 BERRICO ESTATE PTY. LTD. (t/a HIGGINS MANUFACTURING GROUP PTY LTD.) V. ANDERSEN Judgment 1 GILES JA: I will ask Hodgson JA to give the first reasons. 2 HODGSON JA: On 21 January 2002 Twigg DCJ gave judgment in proceedings in which the opponent, Neils Andersen, sought damages under the Workers Compensation Act 1987 against his former employer, the claimant Berrico Estate Pty Limited. He gave a verdict for the opponent in the sum of $132,130.71, but this was subsequently amended under the slip rule to $89,810.71. 3 The claimant seeks leave to appeal against that decision, both on the question of liability and on the question of quantum of damages. The application for leave has been argued on the basis that if leave is granted, the appeal will be decided without further argument. An extension of time was required and no submission in opposition to the grant of the extension of time was made: in my opinion, that extension should be granted. 4 I will start with outlining the circumstances of the case. The opponent was born in Denmark in 1958 and came to Australia when he was twelve years old. After leaving school, he worked with his father as a carpet laying apprentice, and then he was involved in the motor trade and he qualified as a carpenter. 5 He worked for two floor covering companies in Sydney, and then operated his own floor covering business for seven years. In 1996 he was employed by the claimant, another floor covering company, and he became its storeman manager in New South Wales. 6 On 11 July 1997 the opponent was moving a roll of underfelt, and his evidence was that he felt a sharp pain in his neck and down his back and in his left arm and shoulder. He drove from the claimant's premises, St Marys, to physiotherapist's rooms at Drummoyne. He then went to Balmain Hospital, and from there was transferred to the Masonic Hospital Ashfield and he remained at that hospital for four days. 7 He did not work from the time of the accident until about mid-December 1997. He moved to Queensland in about September 1997, and he obtained a job with Sunstate Flooring as sales manager in December 1997. In this job he did not do physical work but it substantially involved clerical work. He had further similar jobs, and then in April 2001 commenced his own business Jag Interiors Pty Limited. He has not sought treatment from medical practitioners since September 1997, but he complains that he still has pain and stiffness in his neck and back. In about mid-1998 he commenced participating in triathlons and duathlons. 8 Turning to the primary judge's decision, he dealt first with liability, in relation to which he found the opponent to be a good historian, doing his best to tell the truth. The primary judge found the claimant was negligent in its system of work, in particular in its failure to provide appropriate mechanical equipment for the work being undertaken. 9 In relation to damages, the primary judge noted agreed past out-of-pockets as $7,235.68, and found past economic loss associated with twenty-two weeks out of work to be $16,962.53. 10 Turning to future economic loss, the primary judge said the following in relation to the opponent's evidence: I found the Plaintiff to be unsatisfactory and unreliable in his evidence on damages. He was not doing his best to assist the Court; rather he was seeking to mislead and avoid the real situation, particularly when telling the Court of his participation in triathlons and duathlons during 1998. On my finding the effort required for his participation in those events was quite arduous, despite the Plaintiff's assertion to the contrary in regard to what was required and where he finished in particular sections of the event. The video (Ex 4) shown to the Plaintiff in Court revealed a quite different ability of the Plaintiff than he was prepared to agree to in his evidence.

151H(1) No damages are to be awarded for economic loss unless the injured worker has received a serious injury or dies as a result of the injury. (2) A serious injury is, if received before the commencement of Schedule 2(2) to the Workers Compensation (Benefits) Amendment Act 1991: (a) an injury for which the compensation otherwise payable under section 66 for the loss or losses resulting from that injury is, in the opinion of the court, not less than 33 percent of the maximum amount from time to time referred to in section 66(1); or (b) an injury for which damages for non-economic loss of not less than $67,800 are to be awarded in accordance with this Division (whether or not compensation is payable under section 66). (2A) A serious injury is, if received on or after the commencement of Schedule 2(2) to the Workers Compensation (Benefits) Amendment Act 1991: (a) an injury for which the compensation otherwise payable under section 66 for the loss or losses resulting from that injury is, in the opinion of the court, not less than 25 percent of the maximum amount from time to time referred to in section 66(1); or (b) an injury for which damages of non-economic loss of not less than $48,000 are to be awarded in accordance with the Division (whether or not compensation is payable under section 66). 3. [Repealed] (4) Division 6 of Part 3 (Indexation of amounts of benefits) applies as if the amount of $48,000 were ad adjustable amount and were referred to in section 81(1). However, section 80(2) does not apply to amount of $48,000. (5) For the purposes of determining whether an injury is a serious injury, the court has the powers under this Act of the Compensation Court relating to the reference of a matter to a medical referee or medical panel for report. (6) If an amount mentioned in this section: (a is adjusted by the operation of Division 6 of Part 3; or (b) is adjusted by an amendment of this section, the damages awarded are to be assessed by reference to the amount in force at the date of the injury. 15 The figure of $204,000 referred to in s.151G was relevantly changed by indexation to $222,450, and the other figures in that section underwent proportionate changes. 16 Dealing first with the application for leave to appeal in relation to liability, Mr Hooke, for the claimant, submitted first that the primary judge's acceptance of the opponent as a reliable historian as to the circumstances of the accident was inconsistent with his view of the opponent's credibility on the question of damages; and he submitted it was also strongly affected by the contradictory accounts given by the opponent to medical practitioners as to how his injury occurred. 17 In any event, Mr Hooke submitted, even accepting the opponent's account that the injury occurred suddenly when manoeuvring a roll of underfelt from a trolley, that account could not support the finding of negligence. Mr Hooke pointed out that the opponent's expert witness, Dr Coyle based his opinion, favourable to the opponent, on a history that a trolley had not been used; and his opinion was to the effect that a trolley should have been provided, so that his opinion showed that the claimant had not breached its duty. 18 Mr Hooke submitted that, having regard to the opponent's experience and the simplicity of the task he was undertaking, there could not be negligence in any failure to instruct: see Van Der Sluice v Display Craft Pty Ltd [2002] NSWCA 204. 19 As to whether the finding could be upheld on the basis of an unsafe system of work, Mr Hooke submitted that there was no specificity as to any defect in the unsafe system or of how any such defect was causative of the frank injury allegedly received by the opponent, and there was no relevant reasoning process of the primary judge. 20 Mr Hislop QC for the opponent submitted that leave should not be granted. There was no question of legal principle involved and no miscarriage of justice. He submitted that in any event the primary judge's findings were open. He pointed to Dr Coyle's evidence that there should have been a standardised method of loading and unloading trucks of the rolls of carpet and underfelt, and to evidence that the claimant's head office in Queensland had a conveyor belt whereas the items had to be manhandled by the opponent and just one other employee in the Sydney depot. 21 He submitted that on this occasion the claimant had required the opponent to complete a job urgently that involved moving 350 rolls. The other employee had been available to help with 150 to 200 of the rolls, but the claimant had to the move the others on his own. Mr Hislop submitted that there had been complaints by the opponent to the claimant as to the need for equipment and more help. Mr Hislop submitted that, even if it might be thought there was no inadequacy of the system and equipment in relation to moving a small number of rolls, it was open to find that it was inadequate for such an extended task and that this was causative of an injury incurred towards the end of this task. 22 In my opinion, there is no substance in the claimant's argument that there is inconsistency in the primary judge's views of credibility on the two aspects of the case. It is open to a judge to find a witness or a party to be giving true and credible evidence on one matter but to be giving false evidence on another. 23 On the other matters, while it could be said that the case was not conducted on the broad basis put by Mr Hislop and that the primary judge did not spell out reasoning along those lines, I would not myself take a narrow view of the basis on which the case was conducted; and having regard particularly to Mr Hislop's arguments, I do not think a finding of negligence was unreasonable and unsupported by reasons so as to justify the grant of leave to appeal in this case. 24 Turning to the question of damages, Mr Hooke submitted that the primary judge's finding that non-economic loss should be assessed at twenty-five per cent of a most extreme case was inconsistent with his findings on the opponent's credibility on the damages question. Further, he submitted that the finding of continuing disability should not have been made, and that the primary judge gave no reasons to support such a finding in the light of his other findings on the matter of damages. 25 In relation to damages also, Mr Hislop submitted no leave should be granted because there was no question of legal principle and no miscarriage of justice. In any event, he submitted that the finding of damages was within the range open to the primary judge. The opponent was thirty-nine at the time of injury. He suffered a disk lesion at the C6/7 level and had no previous injury there. This caused pain radiating down his left side and to his left arm and to the left side of his head. He was in hospital four days, given narcotic analgesics, yet still noted by hospital staff as moaning with pain. He was unable to work for five months. On the primary judge's finding he was still suffering pain and disability. The continuing pain and disability was supported by medical evidence. Mr Hislop submitted that even one of the claimant's doctors supported a finding of fifteen per cent loss of the effective use of his spine. 26 Mr Hislop pointed out that a most extreme case is not the most extreme case possible: see Dell v Dalton (1991) 23 NSWLR 528. He submitted that an assessment of twenty-five per cent of a most extreme case by a judge who has not overlooked any significant matter should not be set aside unless plainly unreasonable: see Wilson v Peisley (1976) 50 ALJR 207, Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118. 27 In my opinion, when one has regard to the activities undertaken by the opponent, particularly activities in the nature of triathlons, the primary judge's findings on the credibility of the opponent on the question of damages, and the primary judge's view that the opponent had not disclosed his activities to medical practitioners, and also to the view of at least one of the medical experts called for the claimant that the opponent was suffering no continuing disability, the primary judge's finding that the opponent was still suffering disability and pain to his neck and arm required explanation and justification which was not given. In my opinion there are no relevant reasons given supporting that finding. 28 That, in itself, in my opinion would be an error justifying a new trial, assuming leave is granted. However, in my opinion this is not a case where a new trial would be ordered, because in my opinion, on the findings of the primary judge as to the activities and the credibility of the opponent, it is not open to find that the opponent's non-economic loss should be assessed at anything like the figure of twenty-five per cent of a most extreme case adopted by the primary judge. 29 On the view of the primary judge that the opponent set out to mislead in relation to damages, it is appropriate to apply the principle that where uncertainty is created by a party failing to call evidence or giving deliberately false evidence, that uncertainty should, in general terms, be resolved unfavourably to that party: see Oran Park Motor Sport Pty Ltd v Fleissig [2002] NSWCA 371 at para [66] and [67], and cases there cited. 30 Having regard to these considerations, in my opinion any assessment of the opponent's non-economic loss as being in excess of about ten per cent of a most extreme case would be unsupportable, and accordingly the thresholds in s.151G, namely 17.4 per cent, and s.151H, namely 23.5 per cent, are not approached. 31 This view is confirmed by the consideration that even the most favourable medical practitioners for the opponent assessed his loss of effective use of the spine at fifteen to twenty per cent, translating to no more than about eight per cent of the maximum amount payable under s.66 of the Act, as compared with the twenty-five per cent of that figure specified in the alternative threshold given in s.151H(2A)(a). 32 The legislature has shown a clear intent that common law damages are only to be awarded in serious cases, and in my opinion, where there is such a clear conflict with that intention, it is appropriate to grant leave to appeal. 33 The question arises in those circumstances where, on the view I take, the decision on liability is left undisturbed, subject to the effect of a decision as to damages, whether the result would be a verdict for the defendant or a verdict for the plaintiff for out-of-pockets; in this case $7235.68. This depends upon the effect of s.151B of the Workers Compensation Act as it was prior to 27 November 2001, that is as follows: 151B(1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act: (a) the person then cease to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid); and (b) the amount of any compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation. (2) This section does not apply to a person who recovers damages for non-economic loss in respect of an injury if the person does not recover any damages for economic loss in respect of that injury because of the operation of section 151H (No damages for economic loss unless injury serious). (3) A person who recovers damages for economic loss in respect of an injury but does not recover any damages for non-economic loss in respect of that injury because of the operation of section 151G (Damages for non-economic loss) is not prevented from recovering, and is not required to deduct under this section, any compensation under Division 4 (Compensation for non-economic loss) of Part 3 except compensation under s 67 (Compensation for pain and suffering). (4) In applying subsection (2) or (3) to a particular case: (a) the reason for the non-recovery of damages for economic loss or non-economic loss (respectively) must be solely the operation of section 151H or 151G (respectively), and not a combination of reasons (including, for example, a partial settlement or partial compromise of a claim); and (b) the amount of damages for non-economic loss applied in determining the operation of the threshold test in the relevant section must be calculated on the basis of the actual loss, and must not be reduced on the basis of any settlement or compromise or otherwise. 34 In my opinion, the words "is to be deducted from the damages" in s.151B(1)(b) contemplate that the verdict will include the amount in question, but this amount is then not paid to the worker but either paid by the employer to its insurer or else retained by the insurer in payment of itself. 35 So on the approach I take, there would be a verdict for the plaintiff opponent in this amount. However, I do not think this verdict would carry costs. Indeed I think the appropriate order would be, in those circumstances, that the plaintiff opponent pay the claimant's costs of the proceedings, because in substance the proceedings would have wholly failed. 36 For those reasons, the orders that I would propose are as follows. Leave to appeal granted, subject to a notice of appeal being filed within fourteen days. Appeal allowed and orders below set aside. Verdict and judgment for the opponent in the sum of $7235.68, with the opponent to pay the claimant's costs of the proceedings. Opponent to pay the claimant's costs of the application and appeal, and to have a Suitor's Fund certificate if otherwise entitled. 37 GILES JA: I agree that leave to appeal should be granted in relation to the assessment of damages, and that the appeal should be allowed in that respect. 38 There was a stark absence of reasons for the judge's finding that as at the date of the hearing the plaintiff was still suffering disability and pain to his neck as a direct result of the accident in July 1997, and otherwise as to his Honour's arrival at twenty-five per cent of a most extreme case. Despite Mr Hislop's able submissions, regard to the evidence before his Honour could not support meeting the thresholds for awarding damages for non-economic and economic loss. I agree with what has been said by Hodgson JA and do not wish to add anything. In these circumstances, notwithstanding that the amount at stake is a little over $80,000 and thus below the appellate figure of $100,000, there would be significant injustice to the defendant to permit the award of the damages to stand by declining leave to appeal. Therefore, leave to appeal should be granted and the appeal should be allowed. 39 There is a question whether, if no more transpired, the result would be a verdict for the plaintiff for the out-of-pocket expenses or a verdict for the defendant. If the former, I agree with Hodgson JA that the proper orders for costs would be that the plaintiff pay the defendant's costs, because as a practical matter, the plaintiff would have failed in his claim and cannot salvage some costs because of a formal verdict for an undisputed amount which must immediately be paid away. 40 However, and respectfully differing from Hodgson JA, in my opinion leave to appeal should also be granted in relation to liability, and the appeal should be allowed in that respect. Thus there should in any event be a verdict for the defendant. 41 The plaintiff's injury was not suffered when unloading rolls of underfelt from the truck. The rolls had been unloaded, and the plaintiff was moving them from one part of the warehouse to another. He was using a trolley, described as a standard industrial trolley. A vertically standing roll of underfelt was tilted slightly so that the tray of the trolley could be pushed beneath it. It was then lifted by tipping the trolley and conveyed by the trolley to where it was to stand against other rolls at the designated part of the warehouse. When the plaintiff suffered his injury, he tilted a particular roll of underfelt slightly in order to remove the trolley from beneath it at the position where it was to be placed, at one point saying that the gave the roll a bit of a push to get it into place. This, he agreed, was the standard use of such a trolley to "tip the load forward a touch and slide the base of the trolley out from underneath it." When he did this, the plaintiff said, he felt a sharp pain in his neck and down his back, and that was the frank injury for which he sued. 42 The judge accepted the plaintiff's evidence of how he suffered his injury, and although he did not think the plaintiff's evidence in other respects had been frank I do not think that this Court can overturn the acceptance. The difficulty for the plaintiff, however, is as to negligence on the defendant's part causative of the injury. 43 The judge found that the defendant had been "negligent in its system of work, and its failure to provide appropriate mechanical equipment for the work required to be done by the Plaintiff." What was negligent in the system of work was not clearly explained, but appears to have been that the plaintiff did not have assistance from another employee and because of "the system of working requiring [the plaintiff] to unload a number of heavy rolls." The failure to provide appropriate mechanical equipment was also not clearly explained but appears to have taken up the evidence of Dr Ian Coyle which his Honour cited, being 5.0 ALTERNATIVES AVAILABLE As is usually the case, there were a number of reasonable and economic alternatives available which had they been instituted would have significantly reduced the prospect of an injury occurring such as the one that befell Mr Andersen. These are dealt with below: 5.1 The rolls of carpet underfelt could and should have been handled by materials handling equipment. As a minimum this should have included a trolley onto which the rails could. be placed. An appropriate unit would cost $ 300.00 as at the time of writing this report. 5.2 Another alternative would have been to use a ride-on forklift with a carpet lifting prong. 5.3 The method of loading and unloading the truck should have been standardised at both locations so as to ensure efficiency and reduction in manual handling effort at both ends. Having said this, it needs to be noted that I would estimate that an Increase In efficiency would have been in the order of 20 to 30 percent with appropriate equipment and job design. 44 Dr Coyle's instructions had not been accurate. He had been told that the plaintiff was "manoeuvring a roll of underfelt weighing in the order of 60 kgs into a confined/restricted storage area by hand (the trolley could not be used in this case because of restriction)." In fact the plaintiff was using a trolley and was using it in the standard way. 45 In my opinion, there was no basis in the evidence for finding that using a ride-on fork lift with a carpet lifting prong was called for or would have made any difference to the suffering of the injury. What the plaintiff was about was relevantly not unloading the truck, but again there was no basis in the evidence for finding that replication of what was done upon loading the truck would have made any difference to the suffering of the injury. The plaintiff was engaged in normal use of equipment which Dr Coyle said was appropriate equipment, the trolley. I am unable to see that, for what the plaintiff was doing when he suffered his injury, the evidence of Dr Coyle made out the plaintiff's case of an unsafe system of work or failure to provide appropriate mechanical equipment. 46 Mr Hislop submitted that a sound basis for an unsafe system of work, sufficient to uphold the judge's finding of liability, lay in the lack of assistance from another employee and the unloading of a number of rolls of underfelt. As has been seen, the judge's reasoning appears to have included these matters. 47 As to assistance from another employee, there was no evidence from Dr Coyle or elsewhere that, for what the plaintiff was doing when he suffered his injury, assistance was necessary or desirable, and it is not self-evident. 48 As to the unloading of a number of rolls of underfelt the plaintiff said that he had been involved in unloading or moving something like 350 rolls in the course of the day, as to some 200 to 250 without assistance. But there was no evidence that this work in some manner disposed the plaintiff to suffering the frank injury on the particular occasion later in the day when he was moving a roll by use of the trolley. The plaintiff's account of suffering the injury did not, in my opinion, involve some causal influence of the process of unloading the rolls or the number of rolls, even if it be assumed that the process of unloading of rolls or the number of rolls raised a question of a safe system of work, nor did other evidence found such a causal influence. Again, a causal influence is not self-evident. In my view, this was not an available basis for the judge's decision. 49 I do not think this is a case where, although the judge's decision as to liability was open to question, it should be allowed to stand pursuant to the policy considerations underlying the requirement of leave to appeal. The decision was more than open to question. While the verdict is below the appellate figure of $100,000 it is significant and, in the view I take, the defendant's liability was plainly not established. Hence I consider there should be leave to appeal and the appeal should be upheld in this respect also. 50 I propose the following orders. Extend time to apply for leave to appeal up to and including 24 May 2002. Grant leave to appeal and direct that the notice of appeal be filed within fourteen days. Appeal upheld. Verdict and judgment for the plaintiff and the order for costs below set aside and in lieu thereof verdict and judgment for the defendant and an order that the plaintiff pay the defendant's costs. Plaintiff to pay the defendant's costs in this Court and have a certificate under the Suitor's Fund Act if otherwise qualified. 51 CRIPPS AJA: I agree with the reasons given by Giles JA and with the orders he proposes. 52 GILES JA: The orders of the Court will therefore be those which I proposed. **********

At a glance

Court

Decision date

Before

Source

Judgment (27 paragraphs)

Cases Cited (5)

Cited By (3)