Coles Supermarkets Australia Pty Ltd v Fardous

Court of Appeal (NSW)|2015-03-05|Before: Macfarlan JA, Emmett JA, Simpson J, MacFarlan JA

Solicitors: McCulloch & Buggy (Appellant) Jordan Djundja Lawyers (Respondent) File Number(s): CA 2014/195027 Decision under appeal Court or tribunal: District Court Jurisdiction: New South Wales Date of Decision: 17 June 2014 Before: Sorby DCJ File Number(s): DC 2013/70232

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

THE SEQUENCE OF EVENTS AND MEDICAL OPINIONS

Mr Fardous was born in Lebanon in 1966 and migrated to Australia with his family in 1976. He left school after year 10 and was employed for 11 years as a machine operator at HBA Book Binding. He commenced employment with Graphic Book Binding in 1999 and on 27 September 2007 he was injured in the course of his employment with that company. As a result, Mr Fardous suffered severe lower back pain, extending into his left leg, and was admitted to hospital for five days. After examining CT and MRI scans, Dr Mark Davies, a neurosurgeon and spinal surgeon, concluded that Mr Fardous had an L3/4 spinal injury that warranted surgery (Report, 28 December 2012, p 1).
Dr Davies performed the surgery on 31 January 2008 and advised Mr Fardous that he should return for a consultation in August 2008 and "that if a job was available for him he would be fit to return to work on restricted duties" (ibid, p 2).
On 6 August 2008 Dr James Bodel, an orthopaedic surgeon engaged by Graphic Book Binding's insurer, examined Mr Fardous. Dr Bodel recorded that Mr Fardous "state[d] that unfortunately after the surgery was done on 31 January 2008 there ha[d] been minimal improvement" and that he had ongoing lower back pain and stiffness, as well as listing five different medications as proposed or current treatment for Mr Fardous (Report, 6 August 2008, pp 2, 3). Dr Bodel concluded that Mr Fardous "remains unfit for all work" and that further surgery might be necessary depending on the outcome of a forthcoming examination by Dr Davies (ibid, pp 4, 5).
Dr Davies' report of 28 December 2012 includes the following in relation to his consultation with Mr Fardous on 18 August 2008: "I explained to him, even if he has pain in the leg, he was not necessarily causing any damage. He should attempt to return to work on graduated return to work programme on restricted duties in the following months. I suggested it may be difficult to know whether he can work, unless he tries. He was probably not fit to return to his normal duties at that stage. I also suggested a left L3 nerve root block but he was certainly not keen on having this procedure. A last resort with perhaps only a 60% chance of helping his pain was an L3/4 fusion. I was certainly not advocating this but this is something that could have been left in reserve as a last resort. I took the liberty of referring him to Dr David Gorman for a pain management program" (p 2).
Mr Fardous met with Dr Gorman on 4 September 2008.
On 17 June 2009 Dr John Davis, a consultant in occupational medicine, reported, for the purposes of a workers' compensation claim by Mr Fardous against his employer, on his assessment of Mr Fardous the previous day. Dr Davis noted that Mr Fardous had a continuing complaint of constant lower back pain but was "not at all keen to undergo any further [surgical] procedure at this time" (Report, 17 June 2009, p 3). Notwithstanding Mr Fardous' reluctance, Dr Davis was of the view that Mr Fardous would eventually have to "succumb" to further surgery. He said that Mr Fardous was no longer able to undertake work which involved lifting more than five kilograms and that Mr Fardous was permanently unfit to return to his pre-injury work. He concluded: "Mr Fardous has no appropriate transferable skills, and given his level of ongoing pain, likely requirement for further operative intervention and required restrictions it is more likely than not that in fact he will not find further formalised employment on the open labour market. Should he be sufficiently motivated and fortunate enough to obtain some form of suitable employment, then I believe that his maximal work capacity in any situation would be to 15 hours per week. There would however have to be considerable reduction in his symptom intensity prior to consideration of any formalised employment" (Report, 17 June 2009, p 5).
On 24 September 2009 Dr Con Kafataris, a corporate medical consultant engaged by Mr Fardous' employer's insurer, reported on his assessment of Mr Fardous. Dr Kafataris reported that Mr Fardous said that his surgery in January 2008 "gave him no improvement in his symptoms not even temporary improvement in his leg pain" (Report, 24 September 2009, p 1). Dr Kafataris noted: "He has been cleared for suitable duties at 12 hours a week for sometime, however he has not found any work. Apparently, further surgery has been discussed but the worker is not keen on this. He continues to complain of persistent left sided lumbar pain with pain radiating to his left thigh, calf and left foot. There has been no substantial change in his symptoms over the past 12 months. There is paraesthesia over the lateral aspect of the left foot. Solicitors are involved in his case" (ibid, p 2).
Dr Kafataris concluded as follows: "Treatment The worker has attempted the full gamut of interventions for work related low back pain including physiotherapy, a home exercise program and a pain clinic. None of these have been particularly effective in improving the worker's functional capacity. It appears however that the worker has been less than diligent in applying functional restoration techniques taught to him and this may at least partially explain the failure of these interventions to achieve an improvement. Fitness for Work I can see no reason why the worker could not increase his hours of work. He has been certified fit for 12 hours a week for some time however his chances of finding work at this level is relatively poor. I therefore recommend that his hours be upgraded to four hours a day, five days a week to improve the chances of obtaining a work trial. Similar restrictions could apply as do currently, i.e., to avoid prolonged static postures, change position at least every 30 minutes, avoid repeated flexion and rotation and a lifting limit of 5kg should apply. Essentially the only way forward for this worker is for him to focus on improving levels of functional capacity via progressive increases in activity over a period of time and using CBT principles to manage the inevitable exacerbations that will occur with each increase. Accordingly, when he returns to work, he will need to maintain his hours for at least four weeks probably six weeks, before any upgrades can be looked at, as there will most likely be an exacerbation in his symptoms over this period of time. If he is able to remain at work and negotiate his way through this exacerbation, then the long-term prognosis will be much more favourable. The best possible scenario for this worker will be a full shift of permanently modified duties. I would suggest that he may require between 12 and 20 weeks to move from 20 hours a week to 40 hours a week. At that point, a permanently modified duties certificate could be looked at" (ibid, pp 4-5).
On 3 November 2009 Mr Fardous commenced proceedings in the District Court claiming damages from his employer. His Statement of Particulars asserted that as a consequence of the injuries that he sustained in the 2007 accident Mr Fardous "has not been able to return to work and given the extent of the pathology in his back, he is unlikely to ever return to work in any meaningful capacity" and that he "is effectively totally incapacitated for employment" (p 3).
On 17 December 2009 Mr Fardous attended Dr Nasr Ismail, a general practitioner practising at the Al Zahra Medical Centre. Dr Ismail noted that "Mr Fardous continued to complain about back pain and left leg numbness and loss of left knee reflexes" and that his involvement in an expensive and comprehensive pain management program had not reduced his pain or improved his quality of life (Report, 17 December 2009, p 1). Dr Ismail considered that helping Mr Fardous to obtain employment depended on improving his pain management which would in turn help to solve "his psychological trauma and improve physical activity" (ibid). Dr Ismail concluded that if Mr Fardous' ability to work was reassessed as up to 20 hours per week: "… the main issue of upgrading Mr Fardous medical condition is bound by first better control of pain management. I recommend review pain control by Dr. Gourmin so we can get pain control improvement. Secondly, find a suitable job to help to test Mr Fardous ability and pain control so he can be physically and psychologically in a better mood then we can increase hours and lift the restriction on his medical certificate" (ibid, p 2).
On 19 March 2010 Mr Fardous' proceedings against his employer were settled, with judgment to be entered in his favour in the sum of $365,000.
In a report dated 3 November 2010 Dr Ismail recorded the following in relation to a consultation with Mr Fardous on 26 March 2010: "After surgery his symptoms and pain continued to improve, he visited me on the 26/03/2010 happy and comfortable with the results saying his pain is improving significantly and his need for analgesia" (p 1).
In his report dated 28 December 2012 Dr Davies noted that he had not seen Mr Fardous after 16 August 2008 but that he was "assured by him, and the suggestion is from his GP, that he continued to improve and in the end had little pain" (Report, p 3).
The accident at the appellant's premises occurred on 10 July 2010.
Mr Fardous gave evidence that prior to the July 2010 accident he had attempted to obtain work but had been unsuccessful (transcript pp 6, 26). In February/March 2011 he undertook a course to obtain a qualification as a security guard. He obtained the relevant certificate in November 2011 but was unable to obtain security work (or any other type of job).

THE JUDGMENT AT FIRST INSTANCE

After reviewing the evidence, the primary judge found the following in relation to Mr Fardous' condition prior to his July 2010 accident: "36. I accept that there was improvement in the Plaintiff's symptoms as at the time he saw Dr Ismail on 26 March 2010, but also the Plaintiff still had pain and discomfort in his back and left leg".
In relation to out-of-pocket expenses, his Honour noted that there was an overlap between the medication and treatment taken and received as a result of the two accidents (Judgment [42]). His Honour took that into account in his award for past and future expenses (Judgment [43]).
His Honour also awarded Mr Fardous $13,000 to cover the possibility that he would need an operation in the future to deal with the injury he suffered in the July 2010 accident (Judgment [46]).
His Honour awarded Mr Fardous damages for past economic loss on the basis that his earning capacity before the July 2010 accident was 20 hours per week at $20 per hour and that this had been lost. His Honour erroneously recorded that Mr Fardous had obtained a "security license" prior to the July 2010 accident (at [54]). His Honour found that, but for that accident, Mr Fardous could have utilised the license to obtain work "in a sedentary position" as a security guard at $20 per hour.
His Honour also said: "52. Whilst his general practitioner Dr Ismail noted 'improvement' in the Plaintiff's back pain prior to his fall, no specialist is of the opinion that the Plaintiff was fit for his old industrial job or other work at that time". As to future economic loss, his Honour concluded: "59. I accept that the Plaintiff would like to be gainfully employed, to his credit and is applying for work online [sic]. But the medical evidence, largely contradicts his assessment as to his capacity for work. However, as submitted by Mr Ward, he is capable of 20 hours a week at $20.00 per hour in a light sedentary type job. These figures take into account the previous industrial injury. The plaintiff intended to work until the age of 67. I therefore award him the sum of $228,000 for future economic loss ($20 x 672 x 0.85)".
His Honour's reference to Mr Fardous being then presently capable of working 20 hours a week appears to have been a slip. Presumably, his Honour was intending to say that, but for the July 2010 accident, Mr Fardous would have been so capable.
By agreement of the parties the award for future economic loss was later adjusted to $219,640.

Economic loss

As noted earlier, it was accepted on appeal that the July 2010 accident destroyed any earning capacity that Mr Fardous then had. The question therefore was whether Mr Fardous had any pre-existing earning capacity and, if so, to what extent. A plaintiff in Mr Fardous' position must prove "the extent of his or her pre-accident earning capacity, the extent to which that capacity would have been productive of income had the accident not happened, and the extent to which the compensable injuries have diminished his or her ability to exercise the pre-accident earning capacity" (Morvatjou v Moradkhani [2013] NSWCA 157 at [54] citations omitted). In the absence of an issue about a plaintiff's pre-existing condition emerging from the plaintiff's case, the defendant has an onus to adduce evidence to raise it. The legal onus nevertheless rests on the plaintiff "upon the whole of the evidence to satisfy the tribunal of fact of the extent of the injury caused by the defendant's negligence" (Purkess v Crittenden [1965] HCA 34; 114 CLR 164 at 168). In the present case, there was ample material in the evidence led by both the plaintiff and the defendant to raise an issue as to the effect of the 2007 accident on Mr Fardous. Accordingly, no question of the defendant/appellant not discharging an evidentiary onus arose.
The medical opinions pre-dating the July 2010 accident suggested that Mr Fardous had at least a theoretical capacity to work for up to 20 hours per week in a relatively sedentary occupation. Whether any such theoretical earning capacity would, but for the July 2010 accident, have been productive of income is a hypothetical question requiring consideration of what would or might have happened in the period up to and after the hearing at first instance if that accident had not occurred. That question is to be answered by determining the degree of probability or possibility that the earning capacity would have been productive of income (Malec v J C Hutton Pty Ltd [1990] HCA 20; 169 CLR 638 at 642-643). The issue is not one of whether an event has or has not occurred. Such an issue would have to be determined on the balance of probabilities and "if the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain … " (ibid).
This approach accords with the dictates of s 13 of the Civil Liability Act 2002 (NSW) which provides: "Future economic loss - claimant's prospects and adjustments (1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury. (2) When a court determines the amount of any such award of damages for future economic loss it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury. (3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted."
Application of this section to the present case requires a statement of the court's "assumptions" (that is, findings) about the extent to which, but for the July 2010 accident, any earning capacity that Mr Fardous had at the date of the accident would have been productive of income thereafter. This involves a statement of the "percentage possibility" of income of a certain level being earned. As with the assessment of earning capacity remaining after an accident that is the subject of the proceedings, there needs to be a "practical assessment" of the likelihood of the plaintiff having obtained employment (see Nominal Defendant v Livaja [2011] NSWCA 121 at [65]; Mead v Kerney [2012] NSWCA 215 at [18]).
The primary judge appears to have proceeded on the basis that it was certain that Mr Fardous had pre-accident earning capacity that, but for the July 2010 accident, would have produced income for 20 hours per week at $20 per hour. This was erroneous given that the evidence did not indicate the certainty of this occurring and, as I have noted, a balance of probabilities approach (if that is what the primary judge adopted) was not appropriate.
It is therefore necessary to re-consider the issue. The following matters are relevant in this respect.
First, the medical evidence of examinations prior to the settlement on 19 March 2010 of Mr Fardous' claim against his employer in relation to his 2007 workplace accident gave a relatively bleak assessment of the realistic prospects of Mr Fardous obtaining employment. In August 2008 Dr Bodel referred to only "minimal improvement" in the 18 months since Mr Fardous underwent surgery and around the same time Dr Davies was doubtful of Mr Fardous' ability to obtain work (see [5] and [6] above).
In June 2009 Dr Davis opined that it was more likely than not that Mr Fardous would not obtain employment and in September of that year Dr Kafataris referred to the absence of improvement in Mr Fardous' symptoms ([8] and [9] above). Nevertheless Dr Kafataris contemplated that Mr Fardous might be able to work up to 20 hours per week and, later, even 40 hours per week (see [10] above). In December 2009 Mr Fardous' general practitioner, Dr Ismail contemplated that Mr Fardous might be able to work up to 20 hours per week (see [12] above).
Secondly, after settlement of his proceedings against his employer, Mr Fardous reported significant improvement in his pain, with Dr Davies later reporting that by the time of his July 2010 accident Mr Fardous asserted that he had little pain (see [15] above). The primary judge accepted that Mr Fardous' symptoms had improved by March 2010 but concluded that he still had pain at that time (see [18] above).
In these circumstances, it is by no means certain that Mr Fardous would, but for his July 2010 accident, have ever resumed significant gainful employment. Nevertheless, his condition was improving by the time of that accident and in my view the medical evidence supports a finding that Mr Fardous had a significant prospect of obtaining employment of 20 hours per week at the rate of $20 per hour. I assess the prospect of this occurring as 65%. The primary judge's award in respect of both past and future economic loss should be reduced to reflect this percentage, the deduction being in addition to the normal allowance of 15% for vicissitudes of life.
There was no evidence to found the primary judge's specific conclusion, reached when dealing with past economic loss, that Mr Fardous would have obtained work as a security guard and that his rate of pay in that role would have been $20 per hour. However the evidence is sufficient to enable it to be inferred that Mr Fardous had a significant prospect of obtaining some type of part-time employment at this rate. Consistent with this approach, the primary judge, in dealing with future economic loss, referred to Mr Fardous' capability of obtaining "a light sedentary type job", paid at the rate of $20 per hour (at [59]).
The appellant submitted that it was not open to the Court to conclude, in the absence of evidence, that $20 per hour would have been an achievable rate of pay. In my view the Court can however infer that if Mr Fardous obtained employment that it would have been at least at that modest rate of pay. Depending on the circumstances, the want of specific evidence on aspects of a damages claim does not prevent the court doing the best it can to address the plaintiff's loss (National Instruments Pty Ltd v Gilles (1975) 49 ALJR 349 at 350; JK Kealley v Jones [1979] NSWLR 723 at 733-734; State of New South Wales v Moss [2000] NSWCA 133; 54 NSWLR 536 at [64]-[87]).

Future out-of-pocket expenses

The appellant challenged the primary judge's awards of $7,000 for the costs of pain relief medication that Mr Fardous was likely to incur in the future and $5,725 for the costs of future consultations with a general medical practitioner. The appellant submitted that Mr Fardous would have incurred these expenses as a result of his September 2007 injury regardless of whether or not he had suffered further injury on 10 July 2010. However in making the awards, his Honour took into account Mr Fardous' medical needs resulting from the September 2007 accident and only allowed for the cost of additional needs that flowed from the July 2010 accident (Judgment [44] and [45]). There was no error in this approach and no other basis for interfering with his Honour's assessments was demonstrated.
The appellant also challenged the primary judge's award of $13,000 for the possibility that Mr Fardous might, as a result of his injury suffered in July 2010, need to undergo further surgery. Because his Honour's finding reflected a submission put to him on behalf of Mr Fardous which the appellant did not attempt to answer, the challenge to his Honour's award should be rejected on the basis that the appellant is bound by its conduct of the proceedings at first instance.

ORDERS

For the reasons that I have given, the quantum of the damages awarded to Mr Fardous in respect of past and future economic loss should be adjusted. Whilst the appellant has had some success on appeal it is only limited success and in my view it should therefore pay 65% of Mr Fardous' costs of the appeal.
I propose the following orders: 1. Appeal allowed. 2. Set aside the judgment of $354,965 entered pursuant to orders made in the District Court on 30 July 2014. 3. Direct that the parties lodge with the Court within 14 days of the date of this judgment a form of consent order varying, in accordance with the Court's reasons for judgment, the amount of the judgment entered in Mr Fardous' favour in the District Court or, if the parties are unable to agree on the form of that order, that they lodge proposed orders and submissions in accordance with the following timetable: 1. The appellant within 14 days 2. The respondent within a further 14 days 3. Any reply within a further 7 days. 1. Order the appellant to pay 65% of the respondent's costs of the appeal.
EMMETT JA: The question in this appeal is whether, as at 10 July 2010, the respondent, Mr Abrahim Fardous, had any earning capacity having regard to an accident that he suffered at work on 27 September 2007. That question is relevant to the damages to which Mr Fardous is entitled as a consequence of a fall that he suffered at the Burwood supermarket of the appellant, Coles Supermarkets Australia Pty Ltd (Coles), on 10 July 2010. Mr Fardous injured his back and sued Coles for damages for negligence in the District Court.
Coles was found liable and Mr Fardous was awarded damages of $354,965, which included $79,600 for past economic loss, $219,640 for future economic loss and $25,725 for future out-of-pocket expenses. Coles has now appealed to this Court in respect of certain aspects of the assessment of damages. It does not challenge the finding of liability and accepts that the fall on 10 July 2010 destroyed any residual earning capacity that Mr Fardous might have had at that time. However, Coles contends that the District Court should have found that Mr Fardous had no earning capacity at the time of the accident in its supermarket.
Section 13 of the Civil Liability Act 2002 (NSW) relevantly provides that a court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury. The court is then required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury. The court is required to state the assumptions on which the award was based and the relevant percentage by which the damages were adjusted.
I have had the advantage of reading in draft form the proposed reasons of Macfarlan JA. I agree with his Honour that the District Court erred in proceeding on the basis that it was certain that Mr Fardous had a pre-accident earning capacity that, but for the accident on 10 July 2010, would have produced income for 20 hours per week at $20 per hour. I also agree with Macfarlan JA, for the reasons proposed by his Honour, that the medical evidence supports a finding that Mr Fardous had a significant prospect of obtaining employment of 20 hours per week at the rate of $20 per hour and that the prospect of that occurring was 65 per cent. Further, I agree with Macfarlan JA that there was no error on the part of the District Court in the assessment of damages for future out-of-pocket expenses.
It follows that the appeal should be allowed. However, the measure of Coles's success is not great, insofar as it contended that Mr Fardous was entitled to no damages for past and future economic loss. I agree with Macfarlan JA that the appropriate order for costs is to require Coles to bear 65 per cent of Mr Fardous's costs of the appeal. I agree with the orders proposed by his Honour.
SIMPSON J: I agree with Macfarlan JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 April 2015

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