Carbone v Toyota Motor Corporation Australia Ltd [2017] VSCA 249

1 The applicant issued a proceeding in the County Court by which he sought leave, pursuant to s 134AB of the Accident Compensation Act 1985 ('the Act'), to commence proceedings at common law against the respondent for damages for pain and suffering and loss of earning capacity in respect of injuries to his shoulders in the course of his employment with the respondent. After a hearing, in which the applicant was cross-examined, the judge, by a reserved decision, dismissed the application.[1] The applicant seeks leave to appeal from that decision.

2 The applicant was born in 1973, and, at the time at which he made the application, was 43 years of age. Having completed Year 10, he undertook one year of a carpentry apprenticeship. He then commenced employment, in May 1994, with the respondent on a full-time basis, working about 38 hours per week, together with about 10 hours overtime. His duties included fitting car doors and bonnets from production lines; work which involved repetitive and heavy lifting of component parts of motor vehicles.

3 On 8 June 2010, the applicant suffered injury to his right shoulder in the course of his employment when lifting a heavy car door from the production line. The weight of the car door put excessive strain on his shoulder, and he felt immediate pain in that area radiating down his right arm and fingers. At the time of his injury the applicant's role at work was as a 'team leader' in which he worked full time hours. Following that injury, he did not return to unrestricted work with the respondent.

4 On 4 August 2010 an MRI, performed on the applicant's right shoulder, disclosed signs of supraspinatus tendinosis and partial thickness in substance tearing at its insertion. Subsequently, on 22 September 2010, the applicant underwent surgery performed by Mr Richard Dallalana, an orthopaedic surgeon.

5 Following that operation, the applicant began a gradual return to work from 11 April 2011. On 15 July 2011, he underwent an ultrasound guided steroid injection into the right shoulder. At that procedure, a 7 millimetre diameter articular surface tear was identified at the anterior aspect of the supraspinatus tendon, but otherwise the rotator cuff tear tendons appeared to be intact.

6 By 5 August 2011, the applicant had managed to return to his normal full time hours, and he continued to work with restrictions, which consisted of not working above shoulder height, and no lifting, pushing or pulling of weights greater than 5 kilograms.

7 On 2 April 2012, the applicant suffered injury to his left arm and shoulder in the course of his duties with the respondent. As he went to open a heavy bonnet on a car on the production line, the line began moving, which caused a jerking motion, resulting in his left shoulder bearing the weight of the bonnet. An ultrasound of the applicant's left shoulder, that was performed on 19 April 2012, disclosed findings consistent with tendinosis of the supraspinatus tendon, as well as an insertional fibre tear at the anterior aspect of that tendon. The applicant had an ultrasound guided steroid injection into the left shoulder on 30 April 2012. On 25 October 2012, Mr Dallalana performed an operation on the applicant's left shoulder, consisting of arthroscopic decompression and bursectomy. In the operation Mr Dallalana found an articular sided 5-6 millimetre anterior tear of the supraspinatus tendon associated with low grade tendinosis. The tear comprised 20 percent thickness of the tendon.

8 The applicant returned to work on 29 August 2013, performing modified duties on reduced hours. The number of hours he worked varied from week to week. The parties agreed that during that period he worked between nine and twelve hours per week. He ceased work from 25 February 2014 and has not worked since that time.

9 After the applicant ceased work, his former general practitioner, Dr Chui Leong, provided him, until July 2015, with certificates of capacity for each shoulder certifying that the applicant was unfit for all work because of each shoulder. The applicant ceased to attend Dr Leong in about June 2015, and subsequently, in September 2015, he commenced to attend Dr Sheriff, a general practitioner in St Albans.

10 The applicant continued to experience ongoing problems and pain with his right shoulder. As a consequence he underwent an MRI scan prescribed by Mr Dallalana on 6 May 2015. The scan revealed tendinosis of the supraspinatus tendon with a small full thickness insertional tear involving its mid aspect, mild tenosynovitis at the long head of the biceps tendon, and mild degeneration of the superior labrum. As a consequence, on 25 June 2015, Mr Dallalana performed further surgery on the applicant's right shoulder. Mr Dallalana noted that the applicant had a recurrence of his impingement, and repeated decompression along with formal excision of the acromial-clavicular joint, and extensive bursectomy. Mr Dallalana repaired a small rotator cuff tear with suture anchors. He prescribed a six week period in a sling with a three month recovery period, before the applicant was to resume light manual tasks.

11 However, in the meantime, by a letter dated 29 June 2015, the respondent terminated the applicant's employment. The applicant has not been employed since that date. He has remained under the care of his general practitioner, Dr Sheriff, and has received treatment from a physiotherapist, Mr Luke Bagot. In November 2015, he commenced to attend a psychologist, Mr John Karamanos. In December 2015, he attended physician Dr Paul Verrills for assessment for a pain management program. In turn Dr Verrills referred him to Dr John Ford of Advance Healthcare in St Albans for assessment for a pain management program. The applicant completed a four week multi-disciplinary network pain management program trial at Advance Healthcare's St Albans facility. On the completion of the trial, he reported that he had unchanged pain levels and functional activity levels. As a consequence, Advance Healthcare recommended that he be discharged early from the program.

12 At the time of the hearing, the applicant had been prescribed a range of medication, including Celebrex (200 mg once per day), Lyrica (300 mg twice per day), one Panadeine Forte per day and up to six Panadol Osteo per day.

13 In support of his application to the trial judge, the applicant relied on an impairment to his right shoulder and on an impairment to his left shoulder. At the hearing of that application, although he did not formally abandon the application in respect of the left shoulder, the applicant made no submissions concerning it. It is common ground, on this application, that the parties treated the application concerning the left shoulder as abandoned.

14 The applicant swore two affidavits in support of his application before the trial judge. In the first affidavit, dated 17 December 2015, he set out the circumstances in which he was injured, and the treatment that he has received, to the effect already summarised. He stated that since sustaining the injuries to both shoulders, he had frequent severe pain in both upper arms, which was exacerbated by lifting his arms over the height of his shoulders and by lifting any object. He said that he often experienced referred pain in the form of pins and needles, as well as aches, in both his arms and hands. He found it difficult to achieve a good night's sleep and his sleep was regularly broken due to pain levels. The applicant stated that his cognitive functions had been affected due to his injuries, and the medications that he had been prescribed. He had become increasingly depressed and stressed when thinking about the impact that his injuries have had on his life. The applicant stated that he was restricted in the performance of domestic chores and general maintenance around the house, and he found it difficult to perform routine functions such as washing his body above his shoulders and brushing his teeth. He further said that since sustaining his injuries his relationship with his family and friends had deteriorated and that he frequently argued with his wife. He said that he found it difficult to drive a motor vehicle for more than 20 minutes at a time.

15 The applicant stated that he had not had any further employment since his employment with the respondent had been terminated. Taking into account his age, his work history and the ongoing effects of his injuries he believed that his chances of obtaining any form of employment on the open labour market would be negligible.

16 In his second affidavit sworn 29 November 2016, the applicant confirmed that he had not been referred for employment assistance following the termination of his employment with the respondent. He had received assistance from IPAR Rehabilitation ('IPAR') while he was employed, but that did not result in the identification of any work that was suitable for him. The applicant stated that he no longer received any active treatment by way of physiotherapy or hydrotherapy because funding for that had already ceased. He continued to take the medication to which reference has already been made.

17 In his second affidavit, the applicant stated that he continued to suffer from sleep disturbance which is a major problem for him. He had lost strength in both arms particularly in his right arm. He found that performing simple routine tasks provoked pain, and he lacked strength to undertake them. The applicant and his wife have five children ranging in ages from 16 years to 6 months. He said that during the last six years he had experienced difficulty because he had been unable to engage with his children in some of their activities.

18 The applicant stated that he had enjoyed his work with the respondent and would have remained there until retirement, if not for his injuries. He had always worked in a factory, and he did not have computer skills. He said that he was uncertain as to what tasks he could perform due to the constancy and intensity of the pain in both his shoulders. The applicant stated that by virtue of his right shoulder injury alone he considered he was no longer capable of any employment.

19 The applicant's wife, Gordana Carbone, also swore an affidavit in support of the applicant's claim. Mrs Carbone stated that the applicant has always been very good with his hands and that he has carried out maintenance and repair work to the home. However, since he suffered injury in 2010 his ability to do that work around the house had gradually diminished. The applicant had been in pain for a long time and he suffered disturbed sleep as he was unable to get comfortable. That has led to frustration and tension in the marriage. The applicant's injuries have interfered with his ability to assist with the younger children in performing tasks such as bathing and feeding. Mrs Carbone stated that the applicant's emotional state had changed. He has suffered from mood swings, is easily agitated, and experiences anger and frustration.

20 The applicant and the respondent each tendered a number of medical reports on the application.

21 The applicant's former general practitioner, Dr Leong, in a report dated 15 January 2015, described the treatment that had been provided to the applicant to that date. He concluded his report by stating that the applicant was unable to do his pre-injury work due to persistent pain in both shoulders and reduced range of movement of both shoulders. He was able to do alternative work. However, he should not perform any work above his shoulders or any repetitive work involving both shoulders. Dr Leong stated that the applicant continued to need physiotherapy and oral pain relief.

22 Dr Sheriff, who succeeded Dr Leong as the applicant's general practitioner in September 2015, noted, at that time, that the applicant had experienced severe pain with considerable psychological impact which affected his daily living and caused him to suffer depression. In a report dated 19 October 2015, Dr Sheriff stated that since he had taken over the management of the applicant's treatment, the applicant had progressed poorly, with poor shoulder movement and significant psychological impact. Dr Sheriff stated that the applicant's injuries had had a devastating effect on his life, he had no current work capacity, and his prognosis was poor.

23 A number of short letters written by Mr Dallalana, to referring doctors, and to the respondent, were tendered on behalf of the applicant. They did not provide much elucidation as to the current condition of the applicant. In a letter to Dr Leong dated 30 June 2015, Mr Dallalana described the applicant's second operation to his right shoulder, and stated that the applicant would require a six week period in a sling and a three month recovery period, before resuming light manuals tasks. Mr Dallalana then predicted that it would take five to six months before the applicant was in a fit state to carry out 'regular heavy manual or overhead tasks'.

24 In a subsequent letter to Dr Leong dated 11 August 2015, Mr Dallalana noted that the applicant had presented six weeks after his operation, suffering significant pain over and above that which is normally seen at such at a stage. However, there was no restriction of movement, no frozen shoulder, and no sign of infection or of any other specific problem. Mr Dallalana considered that the applicant required physiotherapy. He concluded:

Altogether [the applicant] shows signs of nerve hypersensitivity across both shoulder girdles and he certainly to me exhibits some features of chronic pain. Structurally his shoulders are in relatively good order and I feel as though a pain management specialist would assist in controlling the situation. ... Hydrotherapy in fact would also be a good treatment avenue for him coordinated by his physiotherapist.

25 Finally, in a letter dated 10 November 2015 addressed to Dr Sheriff, Mr Dallalana reported that he had seen the applicant on that day, and that he had demonstrated some improvement with active elevation to 90 degrees and a better rotational profile of the arm. The applicant still had some discomfort particularly in the right hand which would be addressed by his pain management specialist. Mr Dallalana considered that, from his perspective, the applicant did not require any further appointments. He stated that the applicant 'should continue to recover further from his relatively minor structural shoulder injury'. He said he had approved further physiotherapy for the applicant, which might assist a little further.

26 Mr Bagot, the applicant's physiotherapist, provided a report dated 28 July 2016. Mr Bagot considered that the applicant had no capacity for his pre-employment duties. Due to the severity of his symptoms, he had no capacity for physical labour of any kind. At that time, the applicant's pain currently limited him to sitting for less than 20 minutes, to writing or typing for less than five minutes, and to driving for less than 10 minutes, which meant that he had no capacity for sedentary office work. Mr Bagot expressed the view that it was unlikely the applicant would achieve much improvement in his symptoms, and that his current level of pain and disability was very likely to remain permanent.

27 Dr Jon Ford, a musculoskeletal physiotherapist, has provided two reports concerning the treatment that was provided to the applicant by Advance Healthcare. In his first report dated 4 February 2016, Dr Ford noted the following on clinical examination:

• Disproportionate, inconsistent, non-mechanical/non-anatomical pattern of pain provocation in response to movement/mechanical testing.
• Positive identification of various psycho-social factors (catastrophisation, fear-avoidance behaviour, distress).

28 In his second report dated 27 July 2016, Dr Ford noted that the applicant had completed the four week multi-disciplinary network pain management program trial at the St Albans facility of Advance Healthcare. On completion, he reported unchanged pain levels, unchanged functional and activity levels, and unchanged capacity to cope with management symptoms, and that he was struggling to attend the program because of financial issues. It was therefore recommended that he be discharged early from the program. Dr Ford considered that the applicant appeared best suited to continue rehabilitation upon review with his general practitioner both for his physical issues and his psychological symptoms, and management of his medication by his general practitioner.

29 Dr David Kennedy, a sports and industrial physician, assessed the applicant on 11 July 2016 at the request of his solicitors, and provided a report dated 14 July 2016. He expressed the view that the applicant had sustained damage to the rotator cuff mechanism with impingement in the subacromial-subdeltoid space on the right and left shoulder joints following the workplace incidents.

30 Dr Kennedy considered that the applicant was unfit to return to his pre-injury employment, or to any alternative duties, due to the nature and extent of the persistent and ongoing problems with both shoulder joints. He noted that the applicant was currently receiving treatment coordinated by Dr Verrills as his pain management specialist. Dr Kennedy considered that the applicant should continue to receive that treatment. He noted that the applicant was significantly restricted in his ordinary daily living activities. He concluded that the applicant's prognosis was poor, and that, on the balance of probabilities, his impairment would persist, and the effects of it on his occupational capacity as well as his social, domestic and recreational activities would be of a long-term nature.

31 In a supplementary report, Dr Kennedy expressed the view that as a result of the applicant's right shoulder injury alone, the applicant was not capable of any employment for which he had the appropriate education, skills training and work experience, due to the nature and extent of the significant problems that he experienced in his right shoulder joint. He considered that although the applicant's left shoulder injury caused less significant problems, nevertheless he would have difficulty in engaging in any occupational duties as a result of that injury, taking into account his education, training, background, occupational duties and skills experience. If both upper extremities were to be regarded as a single body function, the applicant was not capable of any employment. He had limited education, skills, training and work experience, as most of his working life involved manual occupational duties involving the strenuous and repetitive use of his upper extremities. He had limited computer skills, and if he was to engage in a sedentary occupation, he would have difficulty with any repetitive use of his upper extremities, particularly at or above shoulder height.

32 The final witness, called on behalf of the applicant, was Dr David Weissman, a psychiatrist, who examined the applicant on 12 July 2016. Dr Weissman, having conducted a psychiatric assessment, concluded that the applicant suffered from a chronic adjustment disorder with depressed and anxious mood of mild to moderate intensity or severity. He had also probably developed symptoms and features of a chronic pain disorder, associated with psychological factors, and a general medical condition known as a somatic symptom disorder. His psychiatric prognosis was uncertain and guarded, and, most likely, 'only fair at best'.

33 Dr Dominic Yong, a specialist occupational physician, examined the applicant on two occasions at the request of the respondent. He first examined the applicant in May 2013. At that time, he considered that the applicant had clinical features of right shoulder symptomatic supraspinatus tear, which had required surgery two years previously, with persisting right shoulder rotator cuff dysfunction, and left shoulder rotator cuff tear requiring surgery seven months previously with moderate rotator cuff dysfunction. He considered that the applicant had features suggesting the presence of a psychological comorbidity which could impact on his recovery from his physical condition. He considered that the applicant had a current work capacity to perform work with restrictions involving avoiding reaching tasks, over the shoulder height tasks, firm pushing or pulling, and lifting more than three kilograms on a repetitive basis. Dr Yong then considered that the applicant's prognosis 'should not be unreasonable given the underlying condition'.

34 Dr Yong conducted a further examination of the applicant in April 2016. He noted that the applicant's condition at that time was complicated by a 'psychological co-morbidity' that required ongoing treatment. He considered that the applicant had a current capacity to perform tasks, with the following restrictions: a significant reduction in working hours, such as working three hour shifts for three days per week; and avoiding reaching tasks, above shoulder height tasks, pushing or pulling tasks, and lifting more than two kilograms on a repeated basis. Dr Yong stated:

I have seen workers with similar conditions. I have noted workers with similar restrictions related to the condition. I have seen workers with these restrictions being able to perform some tasks in the workplace for reduced hours. They generally would perform tasks with minimal manual handling requirements.

I note that Mr Carbone has previously done a range of administrative tasks as part of a team leader role and during a past return to work program, and I note that this was described in the previous independent medical assessment report. These administrative tasks are likely to comply with the restrictions, and would be considered suitable to perform.

35 In September 2016, Ms Katarina Jakovljevic of CoWork Pty Ltd ('CoWork') undertook a vocational assessment and labour market analysis in respect to the applicant. Ms Jakovljevic noted that the applicant performed poorly in the interview, and that that presentation, together with his pain and disability focus and his lack of enthusiasm for work, would be unlikely to impress at a job interview. If those matters could be addressed, Ms Jakovljevic was of the view that, based on the medical information provided to her, the applicant was capable of suitable alternative employment. She considered that he had sufficient transferrable skills to obtain suitable employment. In particular, she recommended that the following occupations, which would be available to him, would be suitable: vehicle inspector; meter reader; radio dispatcher/fleet controller; spare parts interpreter; and parking enforcement officer.

It is my opinion that Mr Carbone has sufficient transferrable skills to obtain suitable employment.

As a supervisor at Toyota, and having worked there for twenty years, the occupation of vehicle inspector is an alternative for him to consider. There is a high demand for spare parts interpreters and in this regard Mr Carbone could potentially use his extensive knowledge of automotive manufacturing in this occupation.

Outside of the industry where he has been predominantly employed, Mr Carbone could be considered for the employment as a meter reader where the physical demands would be complied with the medical restriction stated. Likewise, his confident and forthright personality may well be suited to the occupation of a parking enforcement officer.

His competence and experience in organising the work of others may be transferrable to the occupation of radio dispatcher/controller.

All things considered, based on his presentation and my assessment, it is unlikely that Mr Carbone would currently succeed at a job interview. His poor standard of presentation, lack of enthusiasm and irritability would not impress a potential employer. Fortunately, these issues can be addressed, if Mr Carbone so chooses.

37 In September 2016, Dr Yong was provided with the report of Ms Jakovljevic. In relation to the five possible employment options identified by Ms Jakovljevic, he made the following comments:

• The role of a vehicle inspector might require above shoulder height actions with opening and closing the bonnet or boot of a vehicle. Accordingly, that role would require individual assessment to determine that it complied with the restrictions.
• The role of a spare parts interpreter sometimes might involve handling goods in excess of the weight restriction specified by Dr Yong, and therefore that role would require individual assessment.
• There was minimal manual handling involved in any of the roles of meter reader, parking inspector and radio dispatcher, and therefore they would be suitable for the applicant to perform.

38 The applicant was examined by Associate Professor Bruce Love, an orthopaedic surgeon, in July 2014, one year before he underwent the second surgery to his right shoulder. At that time, Associate Professor Love considered that the applicant had bilateral rotator cuff disease which probably involved a full thickness tear on the right hand side. His prognosis was guarded. In view of the failure of the earlier surgeries to bring about a major functional improvement, it was uncertain whether further surgery would assist the applicant to return to work. Associate Professor Love stated that throughout the interview the applicant focussed entirely on his right shoulder, and he only mentioned his left shoulder injury at the conclusion of the interview.

39 The applicant was also examined by Dr Gary Davison, an occupational physician, in August 2014. On that occasion, the applicant was not prepared to discuss his right shoulder injury, indicating that he had only attended Dr Davison to discuss his left shoulder injury. Accordingly, Dr Davison was unable to evaluate the right shoulder. He considered that the applicant's presentation and significant impairment of his left shoulder function could not be ascribed to his physical condition, as Mr Dallalana had stated that he only had a 'very small partial tear' of the supraspinatus tendon. Dr Davison considered that the applicant may have developed a chronic pain state or pain amplification syndrome.

40 Finally, the applicant was examined on behalf of the respondent by Professor George Mendelson, a psychiatrist, in September 2016. Professor Mendelson considered that the applicant was not depressed and he did not manifest clinically significant anxiety. The applicant presented as being aggrieved, angry and resentful about what he considered to have been unfair treatment by his employer, but his emotional state did not constitute a diagnosable mental disorder.

41 The applicant was cross-examined at the hearing of the application. He said that when he returned to work after his first right shoulder operation in 2010, he performed modified duties, but he was doing the same work that he had done before he was injured. The only modification to his previous duties was that he was not to perform any task above shoulder level. He continued to perform that work until he suffered his left shoulder injury in 2012. By then he had got back to working full hours, albeit with restriction. When he returned to work after his left shoulder operation, he had the same restrictions. However, when he finished work at Toyota, he was working limited hours, which he described as 'probably ten minutes to an hour'. The applicant stated that when he returned to work after his left shoulder operation, he was in charge of about ten employees as the team leader. He said that he worked on the line every day, and he denied that he was carrying out his role as team leader. He said that in fact he worked on the line for most of the time, rather than undertaking supervisory duties.

42 The applicant stated that he ceased working after he had returned from his left shoulder operation, due to pain in both shoulders. He disagreed that it was the pain in the left shoulder that had caused him to cease work, but said he still had problems with his right shoulder. In further cross-examination, he accepted the proposition put to him that what stopped him working in early 2014 was his left shoulder.

43 He said that he saw IPAR (the rehabilitation provider) on two occasions. He said that the only suggestion that was made by IPAR was that he undertake a computer course. However, he had not followed that advice, as he could not sit on a chair for any amount of time, both because he suffered pain, and also because the medication that he was taking caused him to be drowsy. He said that he felt sleepy a bit in the morning, but it got worse by lunch time and after that.

44 The applicant stated that his right shoulder pain was always bad. When asked whether anything specific made it worse, he replied 'It's always bad'. He said that the pain felt bad and he suffered a lot of discomfort in the joint area at the site of the operation. He said that Mr Dallalana had told him that there was a lot of scar tissue and nerve damage in the area which he could not resolve.

45 Counsel referred the applicant to the observation by Mr Dallalana in his report of November 2015, that the applicant displayed improvement on that day. He responded that the shoulder was not improving 'one bit', that actually it was 'getting even more worse'.

46 The applicant stated that since the second operation to his right shoulder, he had not been able to drive, so his wife drove him to see Dr Sheriff. He agreed that there were times when he had been able to cope with the drive of half an hour or so in order to see Dr Sheriff, and he agreed that he only started to see Dr Sheriff after his last operation in 2015. The applicant stated that he went for walks, but that he could not walk each day, because the medication made him drowsy and he suffered pain. He said that when he walked he would get vibrations in the arm, and that he could only walk for half an hour, 45 minutes, or even an hour. He agreed that when he spoke to Ms Jakovljevic of CoWork, he had said that he had problems walking, and he would only walk a few houses down around the block. He said that due to the intense pain when he walked, he felt like he would fall over. He said that he could stand for a little while, but he felt drowsy most of the time.

47 When asked by counsel whether he had considered training for a job which he would be able to do allowing for his restrictions, he said that he was not just limited to lifting his arms above shoulder height, he said that it was even under shoulder height that was the problem. He said he had trouble even lifting a cup of tea. He said that when he did so, that he would lose feeling in his arm and the cup might fall out of his hand.

48 The applicant stated that he had not applied for any jobs. He said he found it difficult to type with his right hand and he was right-handed. He had not considered undergoing a training course because of his shoulders, and in particular his right shoulder, which he said was 'in extreme pain'. He said that he would love to be able to have a task such as taking numbers on meters, but he would not be able to go longer than an hour or so because of the pain in his shoulders and the medication that he was taking. In re-examination, he said that he was not working due to his right shoulder. He said that both shoulders caused him problems, but the right shoulder was worse. Also the medication made it difficult for him to work. He said that he had always worked in manual handling when employed by the respondent.

49 In her reasons, the judge noted that, under s 134AB(38)(c) of the Act, the applicant must establish an impairment that had consequences which were serious in relation to both pain and suffering, and loss of earning capacity. Her Honour noted that in respect of the claim for loss of earning capacity, the applicant must demonstrate that that loss must be to the extent of 40 percent or more at the date of hearing and permanently. Her Honour also noted that s 134AB(38)(g) required that the questions of rehabilitation and retraining be considered in determining whether such a loss had been established.

50 The judge then summarised, in detail, the evidence to which we have referred. Having referred to the competing submissions made on behalf of the parties, the judge stated:

As I indicated during the hearing, to suggest there was nothing but an organic basis was a somewhat adventurous submission on the part of counsel for the plaintiff. In my view, there were significant non organic features present in both the plaintiff's presentation in court, complaining of somewhat bizarre restrictions that cannot be explained medically, and also found by medico legal examiners and the plaintiff's treaters.

Accordingly, I am not satisfied that the plaintiff's shoulder condition has a substantial organic basis as at the date of hearing. Thus the plaintiff will need to take the next step and disentangle, separating the physical contribution to his pain and suffering and loss of earning capacity from the psychological consequences.

The plaintiff must establish that the organically based consequences of his right shoulder impairment alone are 'serious'.

Counsel for the defendant submitted the plaintiff had not asked the question of the doctors that needed to be asked in order to discharge this burden. Further, there was also a disentangling issue in relation to the left shoulder injury.[2]

51 The judge then referred to the competing submissions made by counsel for the applicant and counsel for the respondent concerning the applicant's presentation in court. Her Honour noted that counsel for the respondent had submitted that the applicant had presented as an unmotivated person who was fixed in his ideas about his inability to work. Counsel had not suggested that he was lying, but rather submitted that the applicant was 'so coloured in his perception of his physical capabilities' that that perception impacted on his evidence.[3] Her Honour then concluded as follows:

In my view, the plaintiff was not a credible witness. I do not accept that as a result of his right shoulder condition the plaintiff has the level of pain and restriction that he describes, particularly in the absence of any organic explanation thereof by a medical practitioner. The most obvious examples of what I consider to be exaggeration by him were his difficulties walking, intense pain regardless of activity and a right hand weakness causing him to drop things.

Accordingly, when considering the consequences of any impairment in the present case, the objectively established evidence is particularly important.[4]

52 Having considered the complaints made by the plaintiff, and his treatment, the judge stated:

Whilst the plaintiff has undergone a range of treatment including two right shoulder operations, what was clearly an organic impairment at the time thereof could not be said to be so now as Mr Dallalana's most recent examination in late 2015 confirmed.[5]

53 The judge then considered the question of the applicant's work capacity. The judge noted that the applicant was no longer able to work above shoulder height, but her Honour considered that that was the only restriction on his work capacity on an organic basis, and that it would not preclude him returning to other work which did not involve demanding right upper limb work or over the shoulder tasks.[6]

54 The judge noted that the applicant considered that he was significantly disabled, and Associate Professor Mendelson considered that the applicant's sense of perceived injustice was contributing to a perpetuation of his complaints of pain. The judge stated:

In those circumstances, although having been employed by the defendant for over twenty years, the plaintiff has decided he will not be able to return to any work whatsoever. He has no intention of looking for work because of his injuries. Further, he had refused to participate and engage in a discussion about future possibilities relating to work. Accordingly, in my view, he has not discharged his onus under subparagraph (g) in terms of relation to retraining and rehabilitation.

Whilst Dr Sheriff thought the plaintiff was unfit to retrain, a view with which Dr Yong disagreed, Dr Sheriff based this opinion on both psychological and physical grounds.

The plaintiff has not established that on the basis of an organically-based right shoulder alone he has a serious injury in terms of loss of earning capacity or pain and suffering.[7]

55 In support of that conclusion, the judge referred to the evidence of Dr Sheriff, Mr Dallalana, Dr Leong and Dr Davison. The judge noted the concession made by counsel for the applicant that there was a lack of medical evidence on the relevant issues in the application, but that counsel had submitted that the views of Dr Kennedy, Dr Yong and Associate Professor Love supported the applicant's case. The judge then concluded:

In July 2016, Dr Kennedy advised that, with regard to the plaintiff's right shoulder injury alone, he did not have the capacity for suitable employment, given the nature and extent of the significant problems in the right shoulder joint for which he was undergoing further evaluation.

Whilst Dr Kennedy made no reference to non-organic factors in the plaintiff's presentation, he did not have any recent report from Mr Dallalana and was therefore unaware of his views as to the plaintiff's good prognosis as at the end of 2015. Further, he did not comment on the suitability of the jobs set out in the Co Work report.

Given his expertise, I prefer the evidence of treating orthopaedic surgeon, Mr Dallalana, as to the plaintiff's shoulder condition to that of Dr Kennedy, sports and industrial physician.

Dr Yong thought the plaintiff had a capacity for duties not involving reaching above shoulder height or lifting more than 2 kilograms repetitively, returning to work on a graduated basis. He considered the administrative tasks previously carried out by the plaintiff were considered suitable for him to perform.

In 2014, when Professor Love stated the plaintiff did not have a current work capacity, the plaintiff was awaiting the second right shoulder surgery.

Whilst the plaintiff is unable to do work above shoulder height or repetitive work over shoulder height in a manual fashion, I am not satisfied he has established that requisite loss of earning capacity of 40 per cent on a permanent basis.

The parties agreed the appropriate 'without injury' earnings figure is $78,300. Sixty per cent thereof is $46,980 or $903 per week.

The plaintiff's work experience with the defendant involved a range of duties including administrative tasks and was not confined to manual handling. A number of suitable jobs were suggested by Co Work.

Dr Yong considered three of these jobs were suitable without qualification: meter reader, parking inspector and radio despatcher. He thought the role of vehicle inspector and spare parts handler may be suitable subject to individual assessment as to shoulder activities. He anticipated the plaintiff being able to work increased hours on a graduated basis.

On all the available evidence, I am not satisfied that the plaintiff could not earn in excess of $903 per week on a permanent basis and he has therefore not established the requisite loss of earning capacity. Further, he has not discharged the onus under subsection (g).

Whilst other consequences were deposed to by the plaintiff involving sleep difficulties, family problems and difficulties with household activities and driving, these were not the subject of submissions. In any event, alone or in combination with other claimed impairments, these are not organically-based consequences that meet the statutory test of serious.

The plaintiff has been unable to establish on the balance of probabilities that the organic basis of his right shoulder condition accounts for pain and suffering and loss of earning capacity consequences that are serious.[8]

56 In the application for leave to appeal, the applicant originally relied on four proposed grounds of appeal. At the hearing of the application, he abandoned grounds (3) and (4). The remaining grounds alleged:

(1) The primary judge erred in law by failing to provide reasons that disclosed an intelligible path of reasoning for her decision.

(2) The primary judge erred in law by denying the applicant procedural fairness in that she concluded that he had exaggerated a number of the consequences of his injury, but the respondent did not put this to him in cross examination, nor did the primary judge warn him that she was considering reaching a conclusion that he was exaggerating.

57 Before considering the grounds of appeal separately, it is convenient, first, to outline briefly the legal framework in which the application was made to the primary judge for leave under s 134AB.

58 It is well understood that the test for establishing that an injury is 'serious', for the purposes of s 134AB of the Act, is a stringent test. The test focusses on the degree of impairment resulting from the injury that is complained of. Importantly, where, as in a case such as this, an applicant has sustained separate injuries to separate body functions, it is not permissible to aggregate those impairments for the purposes of determining whether an injury is a serious one.[9] Thus, in the present case, it would not be permissible to aggregate the effects of the injury to the applicant's right shoulder and his left shoulder, in order to determine whether the impairments taken collectively, or separately, were serious.

59 There is evidence that the applicant sustained a psychological or emotional reaction to his injuries and the effects of them. Section 134AB(38)(h) provides that the psychological or psychiatric consequences of a physical injury are only to be taken into account for the purposes of paragraph (c) of the definition of serious injury and not otherwise. In other words, psychological or psychiatric consequences may only be taken into account in determining whether, as a consequence of the injury, the applicant has sustained a permanent severe mental or permanent severe behavioral disturbance or disorder. The applicant did not rely on such a disorder in support of his application. Accordingly, the applicant was required to 'disentangle' the psychological effects of his injuries from the physical effects of the injury to his right shoulder.

60 In Mutual Cleaning & Maintenance Pty Ltd v Stamboulakis,[10] this Court was concerned with an applicant who had sustained an injury to her back, as a result of which she also suffered from psychological injury. Maxwell P stated the relevant principles applicable to such a case in the following terms:

For the assistance of judges, the applicable principles may be summarised as follows:

(1) Where an applicant for leave under s 134AB(16)(b) relies on physical injury - 'permanent serious impairment or loss of a body function' - the Court in assessing the 'pain and suffering consequences' must exclude 'the psychological or psychiatric consequences' of the injury: s 134AB(38)(h).

(2) Accordingly, so far as the evidence allows, the Court must identify, and exclude from consideration, any pain and suffering consequences which cannot be shown on the balance of probabilities to have an organic or physical basis.

(3) The Court must therefore exclude any pain and suffering consequences which result from or are a manifestation of -

• any recognised psychiatric condition (for example depression, adjustment disorder);

• exaggeration of symptoms, whether conscious or unconscious; or
• any other aspect of the injured person's psychological response to the physical injury.

(4) Where the Court is unable to 'disentangle' the pain and suffering consequences in this way, this will ordinarily mean that the application must be refused, since the Court cannot be satisfied on the balance of probabilities that the organically-based pain and suffering consequences satisfy the statutory criterion ('more than significant or marked, and ... at least very considerable').

(5) For the assistance of the Court in deciding such matters, any medical witness who is of the opinion that there are both organic and non-organic contributors to the pain and suffering should be asked to quantify, so far as possible, the respective contributions to the pain and suffering of the organic and non-organic causes.

(6) The reasoning in Richards v Wylie has no application to proceedings under s 134AB.[11]

61 In subsequent decisions, the Court has described the inquiry that needs to be made in such a case as a two-step process, namely:

The first step is to ask whether there is a substantial organic basis for the pain and suffering consequences relied on. If the answer to that question is affirmative - and, of course, if the pain and suffering consequences satisfy the statutory criterion - then the applicant will succeed without the need for any 'disentangling' of the physical contributions to the pain and suffering from the psychological contributions.

If, however, that first question is not - or cannot be - answered affirmatively, then the applicant will need to take the next step and 'disentangle'. That is, the applicant will need to be able to separate the physical contribution to the pain and suffering from the psychological, in order to be able to satisfy the court that the pain and suffering consequences attributable to the physical injury satisfy the statutory test.[12]

62 In order to be granted leave to claim damages for loss of earning capacity the applicant was required to satisfy three requirements, namely:

(1) The applicant must prove that his right shoulder injury has resulted in an impairment to his loss of earning capacity that is serious in the manner defined by s 134AB(38)(b) and (c).

(2) Pursuant to s 134AB(38)(e), the applicant needed to demonstrate that he had suffered, and would continue permanently to suffer, a loss of earning capacity of 40 percent or more as measured according to the formula set out in s 134AB(38)(f). By that formula, a worker's loss of earning capacity is to be compared by measuring, on the one hand, the applicant's gross income from personal exertion which he was earning (whether in 'suitable employment' or not), or was capable of earning 'in suitable employment', with the gross income that the worker was earning, or was capable of earning from personal exertion, or would have earned or would have been capable of earning from personal exertion, during that part of the period within three years before, and three years after, the injury as most fairly reflects the worker's earning capacity had the injury not occurred. (The phrase 'suitable employment' is defined in s 5 of the Act).

(3) Pursuant to s 134AB(38)(g) of the Act, the applicant also had to establish that where he has, or would have after rehabilitation or training, a capacity for employment, including alternative employment or further or additional employment, he would not earn more than 60 percent of gross income from personal exertion as determined in accordance with paragraph (f) had the injury not occurred. It is now settled that the onus is on the applicant to satisfy the requirements of sub-paragraph (g).[13]

Ground 1: Failure to provide adequate reasons - submissions

63 In their written submissions in support of ground 1, counsel for the applicant contended that the reasons of the judge failed to comply with the principles stated by Nettle JA in Hunter v Transport Accident Commission[14], by failing to expose the path of reasoning in five particular respects, namely:

(1) The judge's reasons do not disclose how the judge found that the applicant was not a credible witness and that he had exaggerated his difficulties with walking, pain and right handed weakness. It was submitted that that omission was significant as the respondent did not adduce any surveillance footage of the applicant, and the respondent, in submissions, disavowed any suggestion that the applicant was 'actively lying' in his evidence.

(2) The judge's reasons do not disclose which part of the evidence of the applicant she accepted, and which parts she rejected. As a result, it is not possible to identify the parts of the applicant's evidence that the judge rejected, and the basis for the rejection by the judge of that evidence.

(3) The judge's reasons do not disclose her Honour's path of reasoning for her conclusion that the applicant had not established the loss of earning capacity specified by s 134AB(38)(e) and (f), in light of her Honour's acceptance that the applicant was not able to perform work above shoulder height. In particular, it was submitted, the judge's reasons do not disclose her path of reasoning for concluding that the applicant's inability to work above shoulder height 'would not preclude him returning to other work not involving demanding right upper limb work or over shoulder tasks'.[15] Counsel submitted that there was no analysis by the judge of the particular jobs for which the judge found the applicant was suited, and there was no analysis of the physical requirements of such work.

(4) It was submitted that the judge's reasons do not address why the applicant's incapacity for his pre-injury work, which he had enjoyed, was not a pain and suffering consequence that satisfied the statutory threshold of serious.

(5) Finally it was submitted that the reasons of the judge do not disclose her path of reasoning to the conclusion that the applicant had failed to discharge the onus imposed by s 134AB(38)(g) of the Act.

64 In oral submissions, counsel for the applicant, without abandoning any of those points, relied principally, if not solely, on a sixth basis upon which he contended that the judge had failed to provide adequate reasons for her decision. Counsel accepted that it was open to the judge to conclude, as she did, that there were significant non-organic features about the applicant's presentation. He contended that the judge, by relying on Mr Dallalana's last report, concluded that there was no organic impairment at the time of the hearing. However, it was submitted, in reaching that finding, the judge failed to take into account or consider the evidence of five practitioners who had seen the applicant since November 2015, namely, Dr Sheriff, Dr Kennedy and Dr Yong, and the physiotherapists, Mr Bagot and Dr Ford. At the time of the hearing, the applicant was a 43 year old manual worker who had had two operations on his right shoulder which had left him with residual pain and disability. In those circumstances, the judge was required to, but did not, discuss the findings by each of those practitioners that there was an organic basis to the applicant's condition. Further, to the extent that the judge found that there was an organic basis to that condition, the judge failed to identify the nature and extent of the organic injury suffered by the applicant, and to refer to the evidence of those practitioners in making such a finding.

65 Counsel for the applicant submitted that such a finding was a necessary step for the judge to make in order to determine whether the applicant suffered the requisite degree of impairment to constitute a serious injury, both for the purposes of his claim for loss of earning capacity, and for his claim for pain and suffering damages. It was further submitted that, insofar as the judge did address the pain and suffering consequences of the applicant's injury, she failed to take into account, or address, his complaints of pain, his need for medication, and the fact that his shoulder impairment deprived him of the capacity to continue to perform the work in which he had been employed for 20 years, and from which he had derived great enjoyment.

66 In response, counsel for the respondent submitted that the judge's reasons complied with the principles stated in Hunter,[16] and were adequate. It was pointed out that the question, whether an applicant has established the requisite 'serious injury', is a question of impression which is influenced by elements of fact, degree and value judgment. The adequacy of reasons must be determined by reference to the issues that were agitated at trial. In serious injury applications, a judge is commonly provided with a substantial body of material, substantial parts of which may be irreconcilable, in circumstances in which the judge must choose between competing contentions as an evaluative process. Further, in determining such an application, the judge is not required to mention every fact or argument relied on by the losing party.

67 By reference to those principles it was submitted that the judge adequately exposed her reasons for finding that the applicant's own descriptions of his level of pain and restriction could not be accepted. In that regard, counsel referred to passages from her Honour's reasons which we have set out above.

68 Counsel for the respondent further submitted that the judge's reasons responded to the oral submissions that were made before her Honour. For example, counsel for the respondent had submitted that the medical evidence did not permit the judge to identify the extent and consequences of the right shoulder injury. In response, counsel for the applicant had submitted that such disentanglement was unnecessary, as there was a substantial organic basis for the applicant's injury. The judge correctly noted that the applicant must establish that the organically based consequences of his right shoulder impairment, alone, were serious.[17] Having considered the evidence of the medical practitioners, the judge accepted the opinion of Dr Yong that the only restriction on the applicant's work capacity was that he should not perform tasks demanding right upper limb work or over the shoulder work. The judge thus found that the applicant had not established that, on the basis of an organic based right shoulder injury alone, he had a serious injury in terms of loss of earning capacity or pain and suffering.[18] The judge accepted the opinion of Dr Yong concerning the applicant's retained capacity for administrative work and other identified employments. Further, the judge found that the applicant's complaints relating to sleep, family problems, difficulties with household activities and driving were not organically based. In that way, it was submitted, the judge had sufficiently disclosed the path by which her Honour determined that the application should be refused.

69 In response to the contention by counsel for the applicant in oral submissions, counsel for the respondent contended that the judge adequately addressed the issues, relating to the applicant's disability, that had been raised in the course of argument before her Honour. At the commencement of her analysis of the evidence, the judge noted that while the primary submission on behalf of the applicant was that he had a dysfunctional right shoulder that was organically driven, counsel for the respondent had submitted that a psychological reaction was responsible for many of the applicant's present complaints. In response to those submissions, the judge, having analysed the evidence, was not satisfied that the applicant's shoulder condition had a substantial organic basis at the time of the hearing.[19] The judge then referred to the requirement that the applicant disentangle the physical contribution to his pain and suffering and loss of earning capacity from the psychological aspects of it. In considering the applicant's suitability for work, the judge took into account her findings as to the credibility of the applicant's complaints of pain and limitation. The judge noted that counsel for the applicant relied specifically on the views of Dr Kennedy, Dr Yong and Associate Professor Love. The judge analysed the evidence of each of those three witnesses, and on the basis of those matters, concluded that she was not satisfied the applicant had established the requisite loss of earning capacity of 40 per cent on a permanent basis. In those circumstances, it was submitted that the judge adequately exposed her path of reasoning for that conclusion. In particular, the judge addressed the manner in which the applicant had put the case on the issue of loss of earning capacity. In respect of the claim for pain and suffering damages, the judge specifically referred to the principles stated in Advanced Wire and Cable Pty Ltd v Abdulle,[20] that if the applicant established the requisite loss of earning capacity for the purposes of being granted leave, the applicant would also be entitled to claim pain and suffering damages.[21] Further, given the finding by the judge that the applicant was fit for a range of employment, it followed that the loss of a capacity to engage in pre-injury employment would not, as contended by counsel for the applicant, necessitate a finding that the applicant had established the prerequisites for being granted leave to claim pain and suffering damages.

70 In a passage which is frequently cited, Nettle JA (as his Honour then was) in Hunter[22] described the content of the obligation of a judge to provide adequate reasons in terms that they are relevant to the issues agitated under ground 1:

When a judge decides an application under s. 93(4)(d) of the Act the judge is under a duty to provide reasons for his or her decision. Furthermore, while the extent of the reasons will depend upon the circumstances of the case, the reasons should deal with the substantial points which have been raised; include findings on material questions of fact; refer to the evidence or other material upon which those finding are based; and provide an intelligible explanation of the process of reasoning that has led the judge from the evidence to the findings and from the findings to the ultimate conclusion. It should also be understood that the requirement to refer to the evidence is not limited to the evidence that has been accepted and acted upon. If a party has relied on evidence or material which the judge has rejected, the judge should refer to that evidence or material and, in giving reasons which deal with the substantial points that have been raised, explain why that evidence or material has been rejected. There may be exceptions. But, ordinarily, where a judge rejects or excludes from consideration evidence or other material which is relevant and cogent, it is simply not possible to give fair and sensible reasons for the decision without adverting to and assigning reasons for the rejection or exclusion of that material. Similarly, while it is not incumbent upon the judge to deal with every argument and issue that might arise in the course of a case, where an argument is substantial or an issue is significant, it is necessary to refer to and assign reasons for the rejection of the argument or the resolution of the issue. Above all the judge should bear steadily in mind that reasons are not intelligible if they leave the reader to wonder which of a number of possible routes has been taken to the conclusion expressed. Failure to expose the path of reasoning is an error of law.[23]

71 In subsequent cases, a number of qualifications and amplifications have been developed in relation to those principles, including the following:

(1) The question, whether an applicant has discharged the onus of establishing 'serious injury', is, essentially, a question of impression, that is influenced by elements of fact, degree and value judgment.[24] As such, it does not readily admit of detailed analysis and reasoning.[25]

(2) A standard of perfection is not required. An appeal court should not examine a judge's reasons too critically, with an eye for detecting of want of an explanation.[26]

(3) As noted by this Court in Poholke,[27] an application, for leave to bring proceedings under the Act, is made on originating motion, supported by affidavit material. Ordinarily, as in the present case, only the applicant is cross-examined. The judge is regularly provided with a substantial amount of material comprising medical reports, rehabilitation reports, certificates and employment records. At the conclusion of the hearing, a judge is often left with a large volume of material, significant parts of which may be irreconcilable.[28]

(4) The adequacy of the reasons must depend on the issues that were agitated in the hearing, and the manner in which the case was presented. In an appropriate case, the judge's path of reasoning may be sufficiently disclosed by a combination of what is expressly stated in the reasons, and inferences which might be drawn from the judge's recitation of the material.[29]

(5) The principles, stated by Nettle JA in Hunter, do not require that the judge deal with every argument and issue that might arise in the case.[30] Rather, the obligation, to provide reasons, attaches to an argument or issue which is substantial or significant.

Ground 1: Failure to provide adequate reasons

72 Bearing those principles in mind, we now first turn to the five matters in respect of which it was contended in the applicant's written submissions that the judge failed to provide adequate reasons.

73 We commence with the first matter relied on by the applicant. The judge's finding , that the applicant was not a credible witness, and that he had exaggerated his difficulties with walking, pain and right hand weakness, was an important step in the reasoning of the judge. Accordingly, it was necessary for the judge to provide adequate reasons for the view that she formed of the credibility of the applicant as a witness. In our opinion, the judge clearly discharged that obligation.

74 In the relevant section of her judgment, in which the judge reached the conclusion to which we have just referred, the judge commenced by noting the primary submission by the applicant that he had a dysfunctional right shoulder that was organically driven. Her Honour then noted the competing submission made on behalf of the respondent that a 'psychological reaction' was responsible for many of the applicant's present complaints, so that it was difficult to specify any current symptoms which were substantially organically based. The judge then referred to a part of the passage from the judgment of Maxwell P in Meadows v Litchmore Pty Ltd,[31] which we have mentioned. The judge noted that counsel for the respondent had pointed to medical evidence that there was a significant 'psychological component' to the applicant's complaints. In that respect, counsel for the respondent had referred to the evidence of Dr Sheriff, Mr Dallalana, and Dr Ford. In addition, the judge noted that Dr Weissman had made a formal diagnosis of chronic pain disorder or a somatic pain disorder.

75 The judge then set out the matters relied on by counsel for the applicant in response to that submission by counsel for the respondent. In particular, the judge noted the submission by counsel for the applicant that there was no evidence to suggest that there was any non-organic basis to the applicant's presentation. The judge noted that counsel for the applicant relied on the evidence of Dr Sheriff, Dr Kennedy, Associate Professor Love, and Associate Professor Mendelson.

76 It was in response to that submission that the judge made the observation that, to suggest that there was nothing but an organic basis to the applicant's presentation, was 'a somewhat adventurous submission' on the part of counsel for the applicant. In that respect, the judge referred to significant non-organic features present in the applicant's presentation in court, and also to findings by medico-legal examiners and the applicant's treating practitioners to that effect.

77 Pausing there, in the context of the reasons that preceded it, the judge was clearly referring to the complaints made by the applicant of 'bizarre restrictions' which could not have a medical basis - such as his inability to hold a cup of tea - and also to the parts of the reports of the medical practitioners, which had been referred to by counsel for the respondent. The judge was, in our view, fully entitled to conclude, as she did, that she was not satisfied that the applicant's shoulder condition had a substantial organic basis, so that the applicant bore the onus of disentangling the physical contribution to his pain and suffering, and loss of earning capacity, from the psychological consequences.[32]

78 The judge then noted the competing submissions by counsel for the applicant and counsel for the respondent as to how she should assess the credibility of the applicant. As mentioned, the judge referred to the submission made by counsel for the respondent that, while it was not suggested that the applicant was actively lying, it was submitted that the applicant was 'so coloured in his perception of his physical capability' as to affect his evidence about various matters, such as the problems with walking caused by his shoulder pain. It was in that context that the judge then concluded that the applicant was not a credible witness. The judge expressly based that finding on her conclusion that there was an absence of an organic explanation for the degree of pain and restriction of the right shoulder complained of by the applicant. The judge gave examples of evidence given by the applicant which she considered to be an exaggeration by him, namely, his difficulties walking, his intense pain regardless of activity, and his right hand weakness causing him to drop things. In that way, the judge clearly set out the bases upon which she concluded that the applicant was not a credible witness. Those reasons were, in our opinion, amply sufficient.

79 The second complaint, about the judge's reasons, was that they do not disclose which parts of the applicant's evidence she accepted, and which parts she rejected. That complaint may be simply disposed of. In accordance with the principles that we have stated, it was not necessary for the judge to identify each and every part of the evidence of the applicant which she accepted, and each and every part of the evidence of the applicant which she rejected. Rather, the judge made it plain that she did not accept that the level of pain and disability, complained of by the applicant, was due to any organic injury to the applicant's right shoulder.

80 The third matter, relied on by the applicant in support of ground 1, is that the judge's reasons do not disclose a path of reasoning for concluding that the judge was not satisfied the applicant had suffered the loss of earning capacity specified by s 134AB(38)(e) and (f), in circumstances in which the judge had accepted that the applicant was unable to perform work above shoulder height. That criticism, of the judge's reasons, may also be shortly rejected. Based on the evidence of Dr Yong, the judge accepted that the only restriction on the applicant's working capacity was his inability to do tasks above shoulder height.[33] The judge gave careful reasons as to why she reached that conclusion, referring to the evidence of Dr Sheriff, Dr Yong, Mr Dallalana, Dr Davison, Dr Kennedy and Associate Professor Love.[34] The judge did not consider that that restriction had resulted in a loss of earning capacity of 40 percent on a permanent basis. In particular, in reaching that conclusion, the judge referred to the fact that the applicant's work experience with the respondent involved a range of duties, including administrative tasks, and he was not confined to manual handling. The judge noted that 'a number of suitable jobs were suggested by CoWork'. She referred to the evidence of Dr Yong as to the suitability of those jobs, in light of the applicant's physical restriction. Having undertaken that analysis, the judge was not satisfied that the applicant could not earn in excess of 60 percent of his pre-injury earnings on a permanent basis.[35] In that way, the judge amply described the path of reasoning which she took to reach the conclusion that the applicant had not established the matters stipulated under s 134AB(38)(e) and (f) of the Act.

81 The fourth matter, relied on by the applicant, is that the judge's reasons did not address why the applicant's incapacity for his pre-injury work was not a pain and suffering consequence that satisfied the statutory threshold of serious injury. The difficulty with that proposition is that the judge was not satisfied that the applicant was restricted for any work, other than that which required him to perform tasks above shoulder height. Certainly, if the judge had concluded that the applicant was unfit for gainful employment, that matter would have been an important consideration in determining whether the applicant had established that his pain and suffering, as a result of the injury, was serious. However, for the reasons stated, the judge did not make such a finding.

82 The fifth matter, relied on by the applicant, is that the judge failed to disclose a path of reasoning for the conclusion that the applicant had failed to establish the matters stipulated in s 134AB(38)(g) of the Act. In our view, the judge's reasons for reaching that conclusion were sufficient. As mentioned, the judge noted that the applicant's work experience with the respondent had involved a range of duties which were not confined to manual handling, and that a number of suitable jobs, suggested by CoWork, were considered by Dr Yong to be within the applicant's capacity. Those matters, noted by the judge, were demonstrably the basis of her conclusion that the applicant had not discharged the onus specified by sub-s (g).

83 We now turn to the sixth matter, relied on by the applicant, and argued in the course of oral submissions, in support of ground 1. In essence, counsel made two associated points in relation to this aspect of his submissions. First, it was submitted, the judge failed to deal with the evidence of Dr Sheriff, Dr Kennedy, Dr Yong, Mr Bagot and Dr Ford in reaching the conclusion that there was no organic basis to the complaints by the applicant of pain and limitation of movement to the right shoulder. Secondly, it was submitted that the judge was obliged, but failed, to make any finding, based on the evidence of those five practitioners, as to the nature and extent of the organic injury to the applicant's right shoulder, and to explain why the evidence of those five practitioners was not sufficient to establish the requisite degree of impairment stipulated by s 134AB of the Act.

84 The first matter may be shortly disposed of. Contrary to the submissions of counsel, the judge did not make a finding that there was no organic basis to the applicant's complaints of pain and injury. Rather, as submitted by counsel for the respondent, the judge commenced her analysis of the evidence by reference to the primary submission of the applicant that he had a dysfunctional right shoulder that was organically based, and to the primary submission of counsel for the respondent that a psychological reaction was responsible for many of the applicant's present complaints.[36] In that context, the judge considered the evidence relating to the applicant's complaints, and, in particular, the evidence of practitioners such as Dr Ford, Dr Weissman and Dr Sheriff, as to the non-organic contribution to the applicant's complaints. Her Honour noted that, on his last examination of the applicant in November 2015, Mr Dallalana had considered that the applicant's condition had improved so that he had a good range of movement. It was on the basis of those matters that the judge concluded that there were 'significant non-organic features' present, both in the applicant's presentation in Court, and also as found by the medico-legal examiners and the applicant's treating practitioners.[37] Thus, the judge concluded that she was not satisfied that the applicant's shoulder condition had 'a substantial organic basis' at the date of hearing. Having reached that conclusion, the judge correctly noted that the applicant was required to disentangle the physical contribution to his pain and suffering and loss of earning capacity from the psychological contribution.[38]

85 It is clear, from the foregoing, that, contrary to the submissions made by counsel for the applicant in this application, the judge did not conclude that there was no organic basis to the applicant's complaints of pain and limitation of movement. Rather, the judge expressly found that there was 'a substantial' non-organic contribution to those complaints. By noting that the onus was on the applicant to disentangle the two contributions, the judge clearly recognised that there was an organic contribution to the applicant's complaints.

86 The second aspect of the submissions in respect of the sixth matter, is that the judge failed to deal expressly with the evidence of Dr Sheriff, Dr Kennedy and Dr Yong, and the physiotherapists, Mr Bagot, and Dr Ford, and failed, by reference to that evidence, to make a finding as to the nature of the applicant's organic injury. There are, we consider, a number of difficulties with that proposition.

87 First, the judge did, expressly, refer to, and form a view about, the evidence of Dr Sheriff, Dr Kennedy and Dr Yong. In particular, she noted that Dr Sheriff considered that there was a psychological component to the applicant's condition, and that the applicant could not work was based on both physical and psychological grounds.[39] In considering the applicant's work capacity, the judge noted the view of Dr Kennedy that, because of the applicant's right shoulder injury alone, he did not have a capacity for suitable employment. The judge made three comments about Dr Kennedy's evidence. First, Dr Kennedy did not have any recent report from Mr Dallalana and therefore he was unaware of his views as to the applicant's good prognosis at the end of 2015. Secondly, Dr Kennedy did not comment on the suitability of the applicant for the work described in the CoWork report. Thirdly, the judge preferred the evidence of the treating orthopaedic surgeon (Mr Dallalana), as to the applicant's shoulder condition, to that of Dr Kennedy, a sports and industrial physician.[40] In the next passage of her reasons, the judge expressly considered the evidence of Dr Yong, as to the applicant's physical limitations from working,[41] and that the applicant was capable of performing work as a meter reader, parking inspector and radio despatcher as suggested by CoWork.[42]

88 It was for the applicant, and not the respondent, to disentangle the psychological contribution to his pain and suffering and limitation from the physical contribution to it. In the sections of her reasons to which we have referred, the judge adequately dealt with the evidence of the three medical practitioners, Dr Yong, Dr Kennedy and Dr Sheriff, in relation to the question of whether the applicant's organic injury resulted in the impairment that satisfied the tests specified in s 134AB(38)(e), (f) and (g) of the Act. In our view, the judge's treatment of the evidence of those witnesses was sufficient to make clear how that evidence affected her conclusion relating to the applicant's current work limitations.

89 Further, and contrary to the submissions of counsel for the applicant, it was not, in our view, necessary for the judge to make any specific finding as to the precise organic injury or impairment suffered by the applicant. Rather, the onus was on the applicant to establish that he had sustained an organic injury which had resulted in the requisite degree of impairment specified in s 134AB. The judge expressly preferred the evidence of Mr Dallalana as to the nature of the applicant's physical injury. Further, she accepted the limitations on the applicant's employment capabilities described by Dr Yong.[43] Those findings were sufficient to disclose to the parties the basis upon which the judge concluded that the applicant had not established any of the three prerequisites to be entitled to be granted leave to claim damages for loss of earning capacity. Further, those findings were sufficient to explain why the judge concluded that the applicant's subjective complaints, relating to sleep difficulties, family problems and difficulties with household activities and driving, were not organically based such as to the statutory test of serious injury.[44]

90 For those reasons, the applicant has failed to make out ground 1.

91 Ground 2 is directed to the finding by the judge, to which we have earlier referred, that the applicant was not a 'credible witness', and that he had exaggerated his level of restriction and disability, for example, by describing his difficulties in walking, his intense pain regardless of activity, and a right-handed weakness that caused him to drop things.[45] It was submitted that the judge, in that way, specifically found that the applicant had intentionally exaggerated his evidence, so that he was not an honest witness. Counsel submitted that at no time during the hearing was the applicant, or counsel, put on notice that the judge would or might make such a finding about the applicant's credibility.

92 In support of ground 2, counsel for the applicant contended that, in the hearing before the primary judge, counsel for the respondent did not put to the applicant, in cross-examination, that he was exaggerating his restrictions. Nor did counsel submit, in final address that the applicant was dishonest in his evidence. Rather, counsel for the respondent submitted to the judge that the applicant was so 'coloured' in his perception of his physical capabilities that that impacted on the answers that he gave in evidence, and on what he had said to various doctors.

93 Further, counsel for the applicant submitted that the judge did not warn the applicant that she was considering making a finding that he was exaggerating his restrictions. The applicant's wife was not required to attend for cross-examination. In those circumstances, neither the applicant in evidence, nor his counsel in submissions, had the opportunity to anticipate or respond to that suggestion.

94 Counsel for the applicant submitted that the judge's finding, that the applicant was exaggerating some of his restrictions, were central to her finding that he was not a credible witness. The judge's assessment, of the applicant's credibility, was material to the judge's assessment of the pain and suffering consequences relied on by the applicant, as well as the judge's assessment of his motivation to return to other employment.

95 For those reasons, it was submitted that the judge denied the applicant procedural fairness in respect of her finding that the applicant was exaggerating his restrictions. In support of that submission counsel for the applicant relied on the decision of this Court in Ucar v Nylex Industrial Products Pty Ltd.[46]

96 In response, counsel for the respondent submitted that the passage in the judge's reasons, relied on in support of ground 2, did not constitute a finding by the judge that the applicant had intentionally lied or exaggerated in describing his levels of pain and degree of disability that he experienced as a result of his shoulder injury. Rather, it was submitted, in that passage of her reasons, the judge was referring to the credibility of the evidence given by the applicant in relation to those matters, and the judge had referred to the exaggerated nature of the applicant's complaints compared with the organic basis for them.

97 Counsel for the respondent further submitted that the judge gave adequate reasons for such a finding. In particular, he referred to the reasons given by the judge for her finding that the applicant had exaggerated his difficulties. Counsel noted that the matters referred to by the judge - the exaggeration by the applicant of his difficulties of walking, his constant intense pain regardless of activity, and his right hand weakness - emerged in cross-examination. Further, the judge raised and discussed those matters with counsel for each side during address. Accordingly, it was submitted, the applicant's contention that he did not have an opportunity to anticipate or respond to the judge's finding should be rejected.

98 In our view, the judge's findings concerning credibility and exaggeration, relied on by the applicant, when considered in their proper context, did not amount to a finding by the judge that the applicant had deliberately or intentionally misstated, or exaggerated, the nature and extent of his pain and disability resulting from his right shoulder injury. In order to properly understand the meaning of the passage of the judge's reasons relied on in support of ground 2, it is necessary to refer, in a little detail, to the context in which that passage occurred.

99 First, as noted by counsel for the respondent, the matters on which the judge relied, to conclude that the applicant was not a credible witness, and that there was exaggeration by him of his symptoms, emerged during cross-examination. Some of those matters were put to the applicant as being inconsistent with the description of his restrictions that he had previously given to doctors. For example, in the course of cross-examination, the applicant stated that after his second right shoulder operation, Mr Dallalana had told him he could not do anything further, as he had a lot of scar tissue and nerve damage. Counsel then put to the applicant the contents of the letter written by Mr Dallalana to Dr Sheriff, in November 2015, in which Mr Dallalana stated that the applicant had showed improvement on that day with active elevation to 90 degrees and a better rotational profile. Shortly after that passage, counsel then cross-examined the applicant about his ability to drive a vehicle. He stated that he had driven to Dr Sheriff to attend appointments. He then said that he had not driven since his operation. He agreed that he had been able to cope with the drive of over half an hour to see Dr Sheriff on the occasions that he undertook it. It was then pointed out to the applicant that he only commenced to see Dr Sheriff after his second operation on his right shoulder in June 2015.

100 Counsel then cross-examined the applicant about his ability to walk. In the course of that questioning, he said that he could walk up to an hour at a time. Counsel then put to the applicant that when he attended CoWork, in September 2016, he told Ms Jakovljevic that, because of his injury, he could only walk, at most, 'a few houses down around the block'.

101 Counsel also cross-examined the applicant about his level of shoulder pain. He said that he could not walk, because of the intense pain to the shoulders. He said that his shoulders hurt 'most of the time'. He agreed that he had trouble lifting a cup of tea, that he had weakness in his right hand, so that the cup would fall out of his hand on occasion.

102 Pausing there, on any view, it would be readily apparent, at least to counsel acting for the applicant, that the cross-examination, to which we have just referred, could well impact on the judge's assessment of the credibility of the complaints made by the applicant as to his level of pain and degree of restriction as a result of his right shoulder injury. The cross-examination, and the answers given by the applicant, were, in our view, such as to plainly put the applicant, and his counsel, on notice as to that matter.

103 In those circumstances, it is not surprising that, in the course of submissions at the conclusion of evidence, the judge expressly asked counsel for the respondent what she said in relation to the applicant's credit, his demeanour and his presentation in the witness box. In response to that question, counsel responded that the applicant presented as a person who was unmotivated, and who was fixed in his ideas about his inability to work or to do anything. Counsel stated that the answer to the applicant's presentation was in Professor Mendelson's report, that the applicant was aggrieved with the situation and was unprepared to make any efforts to improving the situation. When the judge asked counsel what she said about the applicant's credit, counsel responded:

I don't put to your Honour that the plaintiff was actively lying to your Honour but we do say that, for example, the questions I asked him about how far he can walk and the way that he conducts himself day to day seemed to be at odds with some of the histories in the medical reports. We say that an explanation may be that he is so coloured in his perception of his physical capabilities that that impacts on the answers that he has given in evidence and also what he said to various doctors.

104 At the conclusion of the submissions by counsel for the respondent, counsel for the applicant made submissions to the judge. In the course of those submissions, the judge asked counsel for the applicant what she should make of the applicant's evidence as to his limitations and his complaints of pain and limitation, which the judge considered were 'an unusual response to a shoulder injury'. Counsel responded, to that question, by pointing out that there was no surveillance video, and that some of the matters, described by the applicant, could be attributed to the effects of the medication that he was taking. The judge, while accepting that point, asked how the applicant's inability to grip items related to his shoulder. She asked counsel if there was any medical evidence that suggested that there was an organic, as opposed to psychological, basis for that problem. The judge specifically asked counsel if he submitted that she should accept any complaints, that she thought as disproportionate or unusual for a shoulder injury, as attributable to his medication.

105 It was in that context that, in her reasons, the judge considered the issue of the credibility of the complainant's evidence in the passage on which the applicant relies in support of ground 2.

106 As we have earlier mentioned, in her reasons, the judge noted the submission made by counsel for the applicant that the applicant had given frank responses that were unsophisticated, and there was no attempt to 'obfuscate' any issues. The judge noted that counsel for the applicant had referred to the fact that no surveillance film was tendered in evidence. The judge then referred to the submissions made by counsel for the respondent, that the applicant presented as an unmotivated person, with fixed ideas about his inability to work or to do anything. The judge also noted that while it was not suggested that the applicant was actively lying, it was submitted by counsel for the respondent that the applicant was 'so coloured in his perception of his physical capabilities that that impacts on his evidence about various matters such as problems with walking caused by his shoulder pain.'[47] Immediately after reciting those two competing submissions, the judge made the findings that the applicant was not a credible witness, and that there was exaggeration by him of his difficulties in walking, his intense pain, and his right-handed weakness.

107 It is important that findings by a judge, such as those that are under consideration in this application, should be construed and understood, not in isolation, but in the context of the whole of the judge's reasons, and in the context in which the particular issue of credibility was agitated at the trial of the case.

108 When the passages in the reasons, relied on by the applicant, are considered in that way, we do not accept that the judge specifically made a finding that the applicant was a dishonest witness, or that he had intentionally exaggerated his symptoms. Rather, in that context, it is clear that the judge found that the applicant was not a reliable witness, in the sense that his evidence lacked credibility. The judge found that his complaints as to his level of pain and restriction were objectively exaggerated, because they lacked any organic basis as established by the evidence. Those findings were not conclusions as to the applicant's subjective truthfulness as a witness. Rather, in their context, they were findings by the judge as to the credibility (or reliability) of his evidence, and that his complaints of pain and disability were exaggerated, over and above the level of the organic contribution to them.

109 Counsel for the applicant, properly, accepted that, if the judge's conclusions were to be understood in that way, then ground 2 must fail. We agree with that concession. It is, of course, fundamental that a court has a duty to accord procedural fairness to a party, and that that requirement obliges a court to provide a fair opportunity to a party to respond to any potential finding that the judge might make that is adverse to that party's credibility.[48] However, in the circumstances of the present case, and in particular in light of the type of responses made by the applicant to questions put to him in cross-examination, it might be fairly concluded that the risk, that the judge might make such a finding adverse to the applicant's credibility, was necessarily apparent.[49] In the present case, that risk was expressly referred to by the judge, in final submissions, in the manner in which we have just described. It is clear that the applicant, and his counsel, were put on notice that the judge might make such a finding adverse to the applicant's credibility, and in particular, adverse to the credibility of the complaints by the applicant of the extent of the pain, suffering and limitation that he suffered as a result of his shoulder injury.

110 For those reasons, we consider that the applicant has not established ground 2.

111 For the foregoing reasons, the applicant has not made out ground 1 or ground 2 of the application. It follows that the application for leave to appeal should be refused.

112 I have had the very considerable advantage of reading in draft the joint reasons of Osborn and Kaye JJA. Substantially for the reasons advanced by their Honours, I agree that the first ground of appeal cannot be sustained.

113 On ground 2, however, I have reached a different conclusion. In my opinion, that ground should succeed. It is therefore necessary that I briefly state my reasons. Given the thorough treatment of these matters by Osborn and Kaye JJA, however, I am largely relieved of any need to recapitulate the relevant evidence or the applicable legal principles.

114 Senior counsel for the respondent at trial made it plain in the course of her final submissions 'that disentangling is necessary'; and she submitted that the applicant had 'failed to demonstrate that there is a substantial organic basis for the symptoms that he now suffers'. It is plain, however, that the respondent at no stage suggested that the applicant had lied, or that he had deliberately exaggerated his symptoms in the course of giving his evidence.

115 That the respondent suggested neither lies nor exaggeration is plain from the following passage, in which the judge twice invited submissions on the applicant's credit. In the course of submissions concerning the report of Dr Dominic Yong, specialist occupational physician, who considered that the applicant had a capacity for work (albeit he needed to avoid tasks that involved reaching above shoulder height, firm pushing or pulling, or lifting more than three kilograms), the following exchange occurred between the judge and senior counsel for the respondent:[50]

HER HONOUR: I was just thinking about the [applicant's] response to you putting those jobs to him. What do you say as to credit and the plaintiff's demeanour and presentation in the witness box generally?

[COUNSEL]: We say that the plaintiff presented as an unmotivated person. We also say that his presentation in the witness box really sports [scil, supports] what the CoWork report and Dr Mendelson say about him. His responses to issues surrounding potential work and retraining options really exemplifies, in my submission, the view that the plaintiff is somewhat fixed in his ideas about his inability to work and inability to do anything.

He wasn't prepared to consider even a computer course, saying, 'I couldn't do it. I couldn't sit. As long as it was something I could do for an hour'. We say that really, he gave the impression of being resigned to what he sees as an inevitability recording his inability to do anything because of pain. Pain that he says he has even at rest and a drowsiness which he links to medication.

HER HONOUR: It's not for you to do this but I would just like your comment. How do I reconcile that presentation with the excellent work history with the one employer? It's really more for [counsel for the applicant] but do you want to say anything about that?

[COUNSEL]: We say that answer is in Dr Mendelson's report and that is that what has unfortunately resulted is a perception of how he is being treated, being aggrieved with the situation and as a result, being unprepared to make any efforts towards improving his situation.

HER HONOUR: Do you say anything about his credit or do you really limit your comments to the matters that you have just put to me?

[COUNSEL]: I don't put to Your Honour that the plaintiff was actively lying to Your Honour but we do say that, for example, the questions I asked him about how far he can walk and the way that he conducts himself day-to-day seem to be at odds with some of the histories in the medical reports. We say that an explanation may be that he is so coloured in his perception of his physical capabilities that that impacts on the answers that he gives in evidence and also, what he said to various doctors.

116 In my view, taken in context, the judge in the above passage was inviting - and counsel understood the judge to be inviting - submissions as to the truthfulness of the applicant, rather than submissions on whether his evidence was worthy (or unworthy) of belief for reasons unconnected to truthfulness. Although the two are sometimes used interchangeably, in the ordinary forensic parlance of practising lawyers a reference to the 'credit' of a witness usually is a reference to his or her honesty - or lack thereof - whereas 'credibility' generally is a reference to whether evidence is worthy of belief (albeit that a reference to the 'credibility' of a witness is sometimes treated as embracing both honesty and reliability).[51], [52]

117 It is significant that at one point during the submissions of the applicant's counsel, the judge drew attention to a lack of evidence having been adduced by the applicant about his capacity for work, and commented that one of the medical reports was 'skinny'; and that shortly afterward there was the following exchange:[53]

[COUNSEL]: ... Our primary submission is really that this man, despite the fact that he is 43 and having worked manual labouring, his training prior to the manual labouring consisted of about a year's worth of a carpentry apprenticeship.

He gave very frank responses, unsophisticated responses but there was certainly no attempt, we would submit, Your Honour, to obfuscate any issues. We would - - -

HER HONOUR: What do I do or what do I make of Mr Carbone's evidence about, 'I can only do things for an hour' or, 'I feel like I am going to fall over when I am standing up' or, 'I lose my balance when I am walking'? Those sort of extreme - - -

[COUNSEL]: It's consistent with the evidence that he has given to other doctors, Your Honour. He has given that same evidence to Dr Mendelson - - -

HER HONOUR: I asked the plaintiff myself, 'How come you feel like you are going to fall over when you are standing up or going for a walk?' What I am saying is my thought is it's an unusual response to a shoulder injury.

[COUNSEL]: But he is affected by the medication. He says that all along. It's even in his affidavit, Your Honour. I am happy to point Your Honour to his affidavits with respect to how he feels and what impact the medication has on him. He also gives a fairly clear history and it's detailed, again, from a number of doctors about his inability to grasp certain things with his hand. Your Honour probably is already aware of the fact that on the second page of the defendant's index there is surveillance video but we see no video shown.

HER HONOUR: I totally accept that point. That's a really good point for you. But dealing with the inability to grasp things, how does that relate to his shoulder?

[COUNSEL]: He suffers a weakness. He says he's getting Lyrica prescribed for neuropathic pain.

HER HONOUR: Have you got any medical evidence that discusses that there is some organic as opposed to psychological basis for what's happening in his hand, for example?

[COUNSEL]: There is in the medical reports a weakness in the right shoulder which is described - - -

HER HONOUR: I am talking about his hand.

[COUNSEL]: It doesn't say anything about his hand, Your Honour. I can't assist you with that. There's no neurosurgeon or neurological report with respect to that.

HER HONOUR: I am only raising it because these are unusual complaints, particularly the balance. You say it's explained by the medication but they are unusual complaints for a shoulder injury. That's why I am just asking for your thoughts about them.

[COUNSEL]: Unfortunately, my education doesn't - - -

HER HONOUR: You are not a doctor but you could have taken me to something in the medicine.

[COUNSEL]: I would have, Your Honour, absolutely, because there is no neurologist report and it isn't dealt with by any of the other treaters.

HER HONOUR: Do you say that I should accept any complaints that I think are disproportionate or unusual for a shoulder injury to his medication [sic.]? Is that really your submission?

[COUNSEL]: No. What my submission is is that he has a dysfunctional right shoulder that is organically driven.

...

118 From the discussion immediately above it will be seen that the judge asked for counsel's 'thoughts' about what her Honour perceived to be the applicant's 'extreme' or 'unusual' responses to a shoulder injury, and asked whether she should attribute any complaints that were 'disproportionate' or 'unusual' to the applicant's medication. Hence, it must have been obvious to counsel that the judge was expressing some scepticism about the applicant's complaints. But the judge did not, so it seems to me, distinctly raise with counsel the possibility that she might find that the applicant's complaints were borne of deliberately untruthful exaggeration.

119 In the course of her reasons, however, the judge made what I consider amounts to a critical finding that the applicant was not a truthful witness, and that he had deliberately and untruthfully exaggerated his symptoms:[54]

In my view, the plaintiff was not a credible witness. I do not accept that as a result of his right shoulder condition the plaintiff has the level of pain and restriction that he describes, particularly in the absence of any organic explanation thereof by a medical practitioner. The most obvious examples of what I consider to be exaggeration by him were his difficulties walking, intense pain regardless of activity and a right hand weakness causing him to drop things.

120 When read contextually, in my opinion the crucial passage above in the judge's reasons clearly demonstrates that her Honour was reflecting upon the applicant's truthfulness, rather than simply his reliability. The reference to 'exaggeration by him' can, in my view, only mean deliberate exaggeration.

121 I am conscious that, when reading a trial judge's reasons in an application such as the present, an appellate court should not search for, or too readily identify, error; should avoid reading the reasons under review as if they were a will or a statute; and should eschew the temptation to turn a molehill of semantic imprecision into a mountain of appealable shortcoming. Furthermore, it may be acknowledged that the impugned passage occurs in detailed reasons constituted by 268 paragraphs occupying 42 pages, broken into discrete sections, 'Preliminary', 'The Plaintiff's evidence', 'Future work', 'Activities', 'Lay evidence', 'Medical evidence' (with sub-headings 'Treaters', 'Investigations', 'The Plaintiff's medico-legal examiners' and 'The Defendant's medico-legal examiners'), 'Claim documentation', 'Vocational evidence', 'Overview - Right shoulder', 'Credit', 'Pain', 'Treatment' and 'Work', the relevant paragraph occurring in the section 'Credit'.[55] So much being accepted, however, it seems to me that the remarks in the relevant paragraph are the hub around which the rest of the judge's reasons revolved. Indeed, on my assessment, the judge's finding of deliberate exaggeration was critical to her refusal of the application for leave to bring proceedings for damages.

122 In my opinion, the applicant was denied procedural fairness by the judge having decided the matter according to an adverse finding as to the applicant's credit without having distinctly raised that possibility with the applicant's counsel. Of course, a mere denial of procedural fairness does not necessarily invalidate her Honour's decision. Whether it does or does not depends on whether it can be said that the breach had no practical bearing on the decision, or that an order for a retrial would be futile because the same order will inevitably result on the retrial. Thus, in Stead v State Government Insurance Commission, the High Court observed:[56]

[N]ot every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial.

Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. ... It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.

123 And as was said in Ucar v Nylex Industrial Products Pty Ltd:[57]

When an order is to be made which will deprive a person of some right or interest or legitimate expectation, the person is entitled to know the case sought to be made against them and to be given an opportunity of replying to it. 'Rights' and 'interest' includes 'preservation of reputation', hence a judicial determination involving serious adverse findings against a person will require that they be afforded an opportunity to address such an issue. The opportunity to be afforded the person must be sufficient to permit them to adduce evidence or make submissions rebutting the potential adverse finding and to address matters which are not already obvious.

The risk of an adverse finding will usually be present whenever there is a serious challenge to the credibility of a party or witness. Generally speaking, it will be unnecessary for the trial judge to advert to the possibility of such a finding because the risk will be apparent. Where the risk of an adverse finding being made does not necessarily inhere in the issues to be decided or where the facts or the inference which the judge contemplates drawing from the facts and which gives rise to such a risk is unknown to the party, the fundamental rule of fairness requires the decision-maker in some way to draw attention to the existence of that risk.

124 Although, as I have said, the judge expressed a deal of scepticism about the applicant's complaints, she did not distinctly raise with counsel for the applicant the possibility that she might find that the applicant's complaints were borne of deliberately untruthful exaggeration. Had she done so, counsel might have endeavoured by reasoned submissions to persuade her Honour to a different point of view. Such an endeavour may not have succeeded. But at least the applicant would have had the opportunity to confront the issue upon which the judgment against him turned.

125 Since the finding as to credit was pivotal to the ultimate decision, ground 2 must succeed. I would grant leave to appeal, allow the appeal and order a retrial.

[1] Carbone v Toyota Motor Corporation Australia Ltd [2017] VCC 73 ('Reasons').

[2] Ibid [222]-[225] (citation omitted).

[9] Humphries v Poljak [1992] VicRp 58; [1992] 2 VR 129, 138 (Crockett and Southwell JJ); Lu v Mediterranean Shoes Pty Ltd [2000] VSCA 65; (2000) 1 VR 511, 518-19 [22]-[23] (Chernov JA).

[10] [2007] VSCA 46; (2007) 15 VR 649.

[12] Fokas v Staff Australia Pty Ltd [2013] VSCA 230, [5] (Nettle JA); Meadows v Lichmore Pty Ltd [2013] VSCA 201, [20]-[22] (Maxwell ACJ); Jayatilake v Toyota Motor Corporation Ltd [2008] VSCA 167, [24] (Ashley JA).

[13] Barwon Spinners Pty Ltd v Podolak [2005] VSCA 33; (2005) 14 VR 622, 638 [31] (Phillips JA).

[14] [2005] VSCA 1 ('Hunter').

[16] [2005] VSCA 1.

[20] [2009] VSCA 170.

[21] Ibid [62]-[64] (Redlich JA, Beach AJA).

[22] [2005] VSCA 1.

[24] Ellis Management Services Pty Ltd v Taylor [2013] VSCA 326, [59] (Osborn and Beach JJA).

[25] Hunter [2005] VSCA 1 [22] (Nettle JA); Nichols v Robinson [2001] VSCA 11, [14] (Winneke P); Poholke v Goldacres Trading Pty Ltd [2016] VSCA 232, [79] (Hansen, Kaye and McLeish JJA) ('Poholke').

[26] Dressing v Porter [2006] VSCA 215, [26] (Ashley JA).

[27] [2016] VSCA 232.

[29] Ibid [78]; Murray Goulburn Co-op Ltd v Filliponi [2012] VSCA 230, [28] (Neave JA and Beach AJA); Woolworths Ltd v Warfe [2013] VSCA 22 [131] (Kaye AJA).

[30] Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447, 463 [62].

[31] [2013] VSCA 201 [20] - [22] (Maxwell ACJ). See [61] fn 12 above.

[46] [2007] VSCA 181; [2007] 17 VR 492.

[48] Ucar v Nylex Industrial Products Pty Ltd [2007] VSCA 181; (2007) 17 VR 492, 500 [22] (Chernov JA).

[49] Steen v WorkSafe Victoria [2014] VSCA 299, [82]-[84] (Santamaria JA).

[51] The Serious Injury Manual, published by the Judicial College of Victoria, draws a distinction between reliability and credibility at [5.2.8] (as at 4 June 2015):

In making assessments regarding credibility, the judge should bear in mind the distinction between reliability and credibility. In some cases, it may be more appropriate to find that a witness is mistaken, or a poor historian than to suggest that the witness is wilfully dishonest. Such an approach recognises that an unwarranted adverse credibility finding can produce great unfairness to the witness in the immediate proceedings and beyond (see D Byrne, Assessing the Credibility of Witnesses, presentation at Assessing Witnesses, 10 August 2012; Justice J Douglas, 'How should Tribunals evaluate evidence', presentation at 7th Australian Institute of Judicial Administration Tribunals Conference, 11 June 2004).

[52] See also more generally: Palmer v The Queen [1998] HCA 2; (1998) 193 CLR 1, 24 [56] (McHugh J); Goldsmith v Sandilands [2002] HCA 31; (2002) 190 ALR 370, 378 [32] (McHugh J). See also Legal Services Commissioner v Voll [2008] QCA 293, [40] (Wilson J); T Simos, 'The Nature and Scope of Cross-Examination as to Credit' in Harold H Glass (ed), Seminars on Evidence (Lawbook Co, 1970) 165, 166-8.

[56] [1986] HCA 54; (1986) 161 CLR 141, 145-6 (Mason, Wilson, Brennan, Deane and Dawson JJ).

[57] [2007] VSCA 181; (2007) 17 VR 492, 508-9 [42]-[43] (Redlich JA) (citations omitted).