1 STEIN JA:
2 The appellant, John Farrell, commenced employment with the respondent, Metromix Pty Limited, as a truck driver in 1994. On 8 July 1996 he was involved in a motor vehicle accident whereby he was thrown about the cabin of his vehicle and sustained injuries. He was taken to hospital but was able to resume work the next day. On the following morning the appellant felt his back starting to 'seize-up' and was forced to stop work. He saw the respondent's doctor who put him on light duties. However, he remained on those duties for only a short time and returned to driving the truck. Thereafter, the appellant complained of neck pain and a very sore back, amongst other symptoms.
3 At the time of the accident the appellant was working a significant amount of overtime. He said some 40 hours per week although the Commissioner in the Compensation Court believed this to be an exaggeration. It is apparent however, that from around July 1997, after the appellant returned from holidays, that he was offered less overtime than before.
4 It is difficult to see that he lost any overtime of consequence prior to mid 1997. Certainly the wage schedule, tendered in evidence by the appellant, indicated only a small reduction in average weekly earnings for the year following the accident (July 1996 - June 1997). This, and evidence from Mr Farrell himself, led the Commissioner to conclude that for the period from the date of injury to the middle of 1997, he was not satisfied that the wage loss in the wages summary reflected the effects of the accident.
5 Following the appellant's return from holidays in July 1997 it appears that there was some animosity displayed by the supervisor towards him. According to the appellant, this changed attitude lead to the gradual reduction in overtime offered to him. He said that the employer 'cut back' his overtime. In cross-examination the appellant was asked that if he had been offered the same overtime (after July 1997) as before, whether he would have been able to do it. His answer was equivocal:
No if I felt - done it, yes I probably would have, if I could have done it.
6 The next question put to him was:
What I am suggesting to you is that physically you could have done it?
7 To which he answered:
Well maybe I could have until such time that my back seized us, yes. ['us' may be an error for 'up']
8 Later he was asked whether the only reason he did less overtime, as time went on, was because of the attitude that the respondent had to him. The appellant answered:
The attitude towards me yes because if you said anything to the allocator you got an 8 hours syndrome. Everybody goes through it.
9 With regard to the issue presented by the evidence the Commissioner concluded:
… The time when I think the problem really arises is when the applicant says that he resumes work after his holidays in the middle of 1997. This is when some loss of significance is shown in the wages schedule, some $274 odd per week. I have been at pains earlier in these reasons to indicate that it was at this stage that the perceived attitudinal change occurred between management and the applicant, and I was at some pains to point out that I also considered that the applicant did suffer from this time some residual effects of the motor vehicle accident which had an effect on his earning capacity.
10 The Commissioner was satisfied that it was a combination of both matters, the attitudinal change and the effects of his injuries, that caused the worker to lose some moneys after July 1997. But the Commissioner found that the loss referable to the effects of his injuries was 'in no way reflected [by] a figure approaching $275 per week'. The Commissioner also noted that the loss for the last period (July 1998 to June 1999) was, by contrast, $126 per week. Again, the Commissioner emphasised that any losses in earnings occurring during that period was as a result of both factors - the changed attitude of the employer (regarding overtime) and the ongoing effects of his injuries.
11 Commissioner Hogg referred to the worker being unable to change tyres and climb up and down trucks. He said that these were necessary adjuncts to the performance of duties as a truck driver but 'do not indicate a major economic incapacity on the open labour market'.
12 Utilising the discretion under s 40(1) of the Worker's Compensation Act 1987 (the Act) the Commissioner assessed the worker's loss of earning capacity at $75.00 per week from 15 July 1997 to the date of judgment (11 August 1999) and continuing.
13 The appellant appealed to a judge of the Compensation Court who found no error of law and dismissed the appeal. The appeal to this court lies only in respect of error of law.
14 The core of the appellant's complaint is related to the Commissioner's exercise of discretion under s 40(1). As I understand the submission of the appellant, it is contended that, in exercising his discretion, the Commissioner was not entitled to take into account the reduction of overtime offered to the appellant because of the attitudinal change by the respondent employer. It is said to be an irrelevant factor. Further, it is maintained that the Commissioner gave no reasons to indicate what factors he regarded as relevant to the discretion and how he brought them into account. In short it is submitted that the discretion miscarried.
15 As evidence of this, the appellant relies on what it claimed to be an irrational reduction to $75.00 per week of two significantly different figures with respect to two different years, viz $272 per week and $126 per week respectively.
16 The appellant makes a further submission which may be disposed of shortly. It is maintained that the Commissioner transposed the agreed figure of $1,000 comparable earnings from the period July 1998 to June 1999 and used it also with regard to the preceding year. It seems that the Commissioner probably did utilise the $1,000 figure for the July 1997 to June 1998 period. But I see nothing wrong in this. On the face of the agreed wages summary, and in the absence of any explanation as to its meaning, the Commissioner was entitled to assume, using his expertise as he was permitted, that the $1,000 figure also applied to the earlier periods. Given that the appellant's actual earnings, including extensive overtime, was $1,002.70 per week for the 12 months prior to the injury, the inference was more than truly open. There was no other evidence before the Commissioner and he had to do the best he could with the paucity of material.
17 The most elucidating judgment on the process to be followed in relation to quantifying compensation for partial incapacity is that of Kirby P in Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 at 538 - 541. [See also Australian Wire Industries Limited v Nicholson (Unreported, Court of Appeal, 4 February 1985), Kesen v Luke Singer Pty Limited (1989) 18 NSWLR 566 and Kraturn Pty Limited v Quinn (1990) 6 NSWCCR 326].
18 The 'first stage' is to calculate a figure for s 40(1)(a) of the Act. This requires the ascertaining of the probable earnings of the worker had he not been injured. Kirby P pointed out that this limb of the paragraph required three hypotheses to be accepted: that an injury had not occurred; that whatever actually occurred, the worker is presumed to have continued earning as a worker and, whatever the real circumstances, that he continued in the same or comparable employment. These assumptions must be made whatever the facts actually establish in the particular case.
19 The next step in the 'first stage' is to determine what the worker is earning, or is able to earn as an average weekly sum in some suitable employment after the injury. This is provided in s 40(1)(b) of the Act. As Kirby P acknowledged, if the worker is earning an average weekly amount, that will normally be an end of the inquiry. See also J.C. Ludowici & Son Pty Limited v Cutri (1992) 26 NSWLR 580. If he is not so earning, then the decision-maker has to fix a hypothetical sum which the worker is able to earn.
20 Having completed stage one of the process of computation, the decision-maker is entreated to deduct (b) from (a). However, the resulting figure is not automatically to be awarded to the incapacitated worker. In the 'second stage', the decision-maker is commanded not to award more than the difference between the two sums. Further, he or she 'is required to exercise a discretion awarding only that amount of the difference as appears "proper" in the circumstances', s 40(1). Kirby P observed that it is here that the artificialities which may result from the required hypotheses in the first stage can be adjusted to take account of the 'realities of law and fact proved in the evidence of the particular case'.
21 For a recent discussion of the necessary steps in the process, see Mitchell v Central West Health Service [1997] 14 NSWCCR 527.
22 In the instant case the Commissioner took into account, under the s 40(1) discretion, the evidence of the applicant as to the change in attitude of his employer after he returned from holidays in the middle of 1997. There was apparently some animosity shown to the worker by his supervisor and this resulted in him being offered less overtime than before. The Commissioner found that he could not be satisfied that all of the loss of overtime resulted from his injury. There was, so he found, a duality of factors leading to a loss of overtime. These were the effects of his injuries and 'some attitudinal change towards him by his employers'.
23 The Commissioner repeated that:
… I am satisfied, however, as a combination of both of those matters, that is, the attitudinal change and the effects of the injuries that he did lose some money after July 1997. …