Conclusion
78 The reasoning in Clout means that in assessing damages pursuant to s 151Z(2)(d) in Mr Johnston's proceedings, regard must be had to the fact that they were commenced on 6 September 2002 so that, in contrast to Clout, the 2001 amendments applied. Consistently with Clout, the same damages regime had to be adopted to assess the damages recoverable pursuant to both pars (c) and (d). That regime was the post 27 November 2001 regime. An assessment pursuant to that regime would only have resulted in a notional award of damages if Mr Johnston had suffered a 15% permanent impairment as a result of his injury.
79 As I have earlier noted Forstaff's submissions before the primary judge concerning Clout turned, in part, upon the proposition that Mr Johnston had not been assessed as having a 15% degree of permanent impairment an assertion his Honour appears to have accepted.
80 In its written outline in support of its Summons for Leave to Appeal, Forstaff noted that the only evidence as to the degree of Mr Johnston's impairment was that it was less than 15%. This was a reference to a report from Dr Bodel, an orthopaedic surgeon qualified by Brimac, who concluded that Mr Johnston was suffering from a 3% impairment of his hand which amounted to a 2% whole person impairment according to Tables 16-1, 16-2 and 16-3 of AMA 5 (pp 438 - 439). WorkCover's Guides for the evaluation of Permanent Impairment issued pursuant to s 376 of the Workers Compensation Act are substantially based on AMA5.
81 Neither Brimac or Mr Johnston's responses to Forstaff's written outline challenged the proposition that the primary judge had been entitled to consider Forstaff's contribution argument on the basis that Mr Johnston had not been assessed as having the degree of permanent impairment required under the 2001 amendments to s 151H to attract an award of economic loss.
82 During the hearing of the appeal, however, the question was raised as to which of the parties before the primary judge had borne the onus of proof of the Pt 5 Div 3 damages. Mr Kearns submitted it was the plaintiff as he was seeking to recover damages. Mr Colefax submitted that where the third party and the employer were both parties to the injured worker's proceedings the plaintiff bore the onus. Mr Harrison submitted the plaintiff did not bear any onus in that regard.
83 Section 151Z(2)(d) is silent as to who bears the onus of proving what the plaintiff worker's damages would be if assessed under Pt 5, Div 3 of the Workers Compensation Act. Several matters persuade me that, in circumstances such as have arisen in this case, that burden of proof in that respect is borne by the plaintiff worker.
84 The first matter is that, as was said by Glass JA (with whom Moffitt P and Hutley JA agreed) in Munce v Vinidex Tubemakers Pty Ltd [1974] 2 NSWLR 235 at 238, the "true (or legal) burden of proof, in relation to all questions of fact pertinent to the issue of damages, rests on the plaintiff". His Honour added that "[w]here a disputed question comes under the heading of damages the plaintiff will normally bear both [the legal and the evidentiary burden]".
85 The legislature has addressed an issue of onus elsewhere in Pt 5. Section s 151L(3) places the onus of proving that all reasonable steps to mitigate damages have been taken on the plaintiff worker, subject to certain matters relating to seeking alternative employment, complying with Chapter 3 of the WIM Act (which relates to workplace injury management) and seeking rehabilitation training. This provision alters the common law principle, discussed below, that the onus of proof of mitigation of loss rests on the defendant. The fact that the legislature addressed an issue of onus of proof in the same Part of the Workers Compensation Act in which s 151Z is found indicates that it was content that the common law principles as to the burden of proof of damages should apply to the latter section.
86 However there is authority to the effect that in some cases a defendant seeking to reduce a plaintiff's damages bears the onus of proof of the issue said to justify that diminution. Does the fact that the purpose of s 151Z(2) is to allow a non-employer tortfeasor to achieve a reduction in the damages payable to the plaintiff worker alter the incidence of the burden of proof?
87 In Munce the Court held that the general rule was subject to the exception that the defendant bore both the legal and evidentiary burden of proving that a plaintiff's damages should be reduced because of failure to mitigate his or her loss: see Hutley JA at 237, Glass JA at 239. It is that exception which has been overridden by s 151L(3).
88 It has also been held that a defendant bore the onus, albeit an evidentiary one only, of demonstrating that a plaintiff's damages should be reduced in a dependency action for damages under the English Fatal Accidents Acts 1846. In such cases it is for the defendant to establish that benefits received after the death of the person on whom the plaintiff claims to have been dependent must be offset against the loss caused by the death: Hay v Hughes [1975] QB 790 at 807 per Lord Edmund-Davies citing Baker v Dalgleish Steam Shipping Co Ltd [1922] 1 KB at 377 per Younger LJ; Peacock v Amusement Equipment Ltd [1954] 2 QB at 354 per Somervell LJ and Mead v Clarke Chapman & Co Ltd [1956] 1 WLR at 84 per Parker LJ.
89 In Stewart v Dillingham Constructions Pty Ltd [1974] VR 24 Winneke, CJ, Little and Stephen, JJ explained that the onus placed on the defendant in a dependency case was an evidentiary one and that the trial judge was in error in directing the jury that the onus of proving offsetting gains rested on the defendant. Their Honours said (at 28):
"In Purkess v Crittenden (1965) 114 CLR 164; [1966] ALR 98, the joint judgment of the Chief Justice and Kitto and Taylor, JJ, after referring at (CLR) p. 168 to these 'two frequently confused meanings,' adopted as correct what appears in Phipson on Evidence 10th ed. paragraph 95 to the effect that the true or legal onus is always stable and, unlike the evidentiary onus, does not shift in the course of a case, so that in a personal injuries case such as that there is question 'it is for 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': at (CLR) p. 168. No different principle should, we think, apply in the case of an action for damages under Pt III of the Wrongs Act 1958. What is here in issue is the proof of damages; the plaintiffs are seeking from a jury such damages as the jury may think proportioned to the injury resulting to them from the death of their father: Wrongs Act 1958, s 17. In such circumstances it might be thought surprising that the principle applicable should not be what this Court has called 'the general principle as to the onus of proof of damages...that the legal onus, the ultimate burden, rests upon the plaintiff to prove what injuries he received as a result of the defendant's tort, the extent of the injuries and the duration of them': Pastras v Commonwealth [1967] VR 161, at p. 164. The fact that claims under Pt III of the Wrongs Act are to a degree sui generis would not appear to call for any departure from the general principle; indeed, we would have thought that the statutory foundation of the plaintiffs' claim, with its emphasis upon 'injury' and 'assessment of damages proportioned to the injury' served rather to emphasize that it is for the plaintiff to prove all that is involved in that concept.
As Lord Wright said in Davies v Powell Duffryn Associated Collieries Ltd. [1942] AC 601; [1942] 1 All ER 657, the legislation gives 'a claim for damages to be assessed on the balance of profit and loss and to be proportionate to the injury resulting from the death to the individual. The injury . . . cannot be computed without reference to the benefit also accruing from the death to the same individual from whatever source. ' This passage, cited by Dixon, J (as he then was), in Public Trustee v Zoanetti (1945) 70 CLR 266, at p.288, together with like passages from the reasons of other members of the Judicial Committee in Davies' Case - at (AC) pp. 606, 609 and 618--makes it clear that, in the words of Lord MacMillan at (AC) p. 609: 'It is the net loss on balance which constitutes the measure of damages .'
It follows that it is that net loss which the plaintiff must prove; and, as Walsh, J, observed in Currie v Dempsey (1967) 69 SR (NSW) 116, it lies upon a plaintiff to prove each essential element in his cause of action, the onus of proof, in the sense of the legal onus, lying on the defendant only when by his defence there is raised not merely a denial of some essential element of the plaintiff's cause of action but some allegation which may constitute a good defence which amounts to an 'avoidance' of the plaintiff's prima facie claim to relief." (emphasis added)
Kirby P and Priestley JA (sitting as a bench of two) applied Stewart v Dillingham Constructions Pty Ltd in Moore v Limb [1994] Aust Torts Rep ¶81-295. McHugh J referred to both cases with approval in De Sales v Ingrilli [2002] HCA 52; (2002) 212 CLR 338 at [111], footnote 98.
90 The passage the Full Court cited from Davies v Powell Duffryn Associated Collieries Ltd [1942] ac 601 has analogical force in the s 151Z context. The object of s 151Z is to ensure that the damages recoverable by the plaintiff worker against the non-employer tortfeasor are reduced to reflect the worker's reduced rights against the employer: Grljak no 2, cited with approval in Clout (at [34]). Once a non-employer tortfeasor sued by a plaintiff worker raises the issue that the worker has taken, or is entitled to take, proceedings independently of the Act to recover damages from his or her employer and that the non-employer tortfeasor is entitled to recover contribution from the employer, the plaintiff worker's damages are to be reduced by an amount which depends upon calculating the damages, if any, which would be assessed in the plaintiff worker's favour under Pt 5, Div 3. The amount the plaintiff worker can recover can only be determined after that assessment is made and the s 151Z(2)(c) calculation performed. It is "… the net loss on balance which constitutes the measure of damages": Davies v Powell Duffryn Associated Collieries Ltd at 609.
91 The effect of s 151Z(2), if applicable, is that a plaintiff worker cannot recover damages against the non-employer tortfeasor unless (assuming that person is entitled to contribution from the employer) the s 151Z(2)(c) and (d) calculations are undertaken. The plaintiff worker is at risk of not having discharged the onus of proving damages if that calculation cannot be performed. In such circumstances, in my view, the plaintiff worker bears both the legal and evidentiary onus of establishing what, if any, damages would be assessed for the purposes of the hypothetical s 151Z(2)(d) exercise.
92 It would, of course, be incumbent on a non-employer tortfeasor wishing to invoke s 151Z(2) to give the plaintiff worker notice of that intention. A cross-claim against the employer may be sufficient notice. That would, I would have thought, be the most usual course. If the non-employer tortfeasor chose not to pursue a cross-claim, it should plead its intention to invoke s 151Z(2).
93 The conclusion that the plaintiff worker bears the onus of proving the damages for the purposes of the hypothetical s 151Z(2)(d) exercise is consistent with the legislative intention, apparent from the scheme of the Workers Compensation Act, the WIM Act and the Workers Compensation Commission Rules 2003, that it is incumbent upon a worker, whether seeking only to claim workers compensation or to recover common law damages, to demonstrate that he or she has suffered the degree of permanent impairment pre-requisite to a successful claim.
94 The issue of permanent impairment is relevant both to claims for workers compensation and Pt 5, Div 3 modified common law damages.
95 Part 3, Div 4 of the Workers Compensation Act (Compensation Benefits) deals with compensation for non-economic loss. A worker who receives an injury that results in permanent impairment is entitled to receive from the worker's employer compensation for that permanent impairment: s 66(1). For the purposes of Pt 3, Div 4, the degree of permanent impairment that results from an injury is to be assessed as provided by s 65 and Pt 7 of Chapter 7 of the WIM Act: 65(1). If there is a dispute about the degree of permanent impairment of an injured worker, the Commission may not award permanent impairment compensation or pain and suffering compensation unless an approved medical specialist has assessed the degree of permanent impairment: s 65(3). An approved medical specialist is a medical practitioner appointed under Pt 7 of the WIM Act (see s 2A(2) of the Workers Compensation Act which provides that the Workers Compensation Act is to be construed with, and as if it formed part of, the WIM Act).
96 The obtaining of a permanent impairment medical certificate and any examination required for the certificate are to be taken to be medical or related treatment for the purposes of Pt 3, Div 3 (which deals with compensation for medical, hospital and rehabilitation expenses) in the circumstances there set out, which include (par (b)) the worker having given the employer a copy of the certificate: s 73(1). A "permanent impairment medical certificate is a report or certificate of a medical practitioner that certifies that a worker has received an injury resulting in permanent impairment and the degree of permanent impairment (assessed as provided by the Workers Compensation Act) resulting from the injury: s 73(2). The worker's employer is liable to pay for the cost of a permanent impairment certificate: s 60(1).
97 Section 322(1) which appears in Pt 7, Ch 7 of the WIM Act requires the permanent impairment assessment exercise required under both s 65(1) and s 151H(4) to be made in accordance with WorkCover Guidelines. An "approved medical specialist" undertakes that exercise: s 322(4). Where there is a dispute about, inter alia, the degree of permanent impairment of a worker as the result of an injury, the dispute may be referred for assessment by an approved medical specialist under Pt 7 of the WIM Act by a court or the Commission: s 321. The approved medical specialist is to give a certificate (a "medical assessment certificate") as to the matters referred for assessment: s 325(1). The "medical assessment certificate" appears to be the certificate referred to in s 73(2) of the Workers Compensation Act as the "permanent impairment medical certificate". An assessment certified in a medical assessment certificate pursuant to a medical assessment under Pt 7 is conclusively presumed to be correct in any proceedings before a Court with which the certificate is concerned as to the degree of permanent impairment of the worker as a result of an injury: s 326(1)(a). Although the point was not debated on appeal, it is plain from the terms of s 65(1) and s 151H(4) as read with Pt 7 of the WIM Act, that proof of the requisite degree of permanent impairment turns on the certificate.
98 Other provisions of the WIM Act bear on the issue. Neither compensation nor work injury damages are recoverable by an injured worker unless notice of the injury is given to the employer as soon as possible after the injury happened and before the worker has voluntarily left the employment in which the worker was at the time of the injury: s 254(1). "Work injury damages" are "damages recoverable from a worker's employer in respect of (a) an injury to the worker caused by the negligence or other tort of the employer…whether the damages are recoverable in an action for tort or breach of contract or in any other action, but does not include motor accident damages": s 250(1)(a).
99 A worker who wishes to recover work injury damages must first seek to resolve that claim extra-curially. Court proceedings cannot be commenced unless a claim for work injury damages has been made: s 262, WIM Act. The claimant must provide to the relevant insurer "relevant particulars about the claim" (s 281(2), WIM Act) which includes details of "all impairments arising from the injury": s 282(1)(b), WIM Act. Where the person on whom the claim is made accepts or disputes liability that person must notify the claimant whether or not the person accepts that "the degree of permanent impairment of the injured worker resulting from the injury is sufficient for an award of damages": s 281(2B), WIM Act.
100 Before a claimant can commence court proceedings for the recovery of work injury damages, the claimant must serve on the defendant a "pre-filing statement" setting out such particulars of the claim and the evidence that the claimant will rely on to establish or in support of the claim as the Rules may require: s 315(1). A claimant is not entitled to serve a Statement of Claim materially different from the proposed Statement of Claim that formed part of the pre-filing statement: s 318.
101 Rule 81 of the Workers Compensation Commission Rules 2003 provides:
"81 (1) For the purposes of sections 315 and 318 of the [ WIM Act], a claimant for work injury damages must serve with the pre-filing statement all information and documents upon which the claimant proposes to rely including:
(a) any notification provided to the claimant as required by section 281(2B) of the [ WIM Act ] that the degree of permanent impairment of the injured worker resulting from the injury is accepted as being sufficient for an award of work injury damages, or
(b) if the dispute has been referred to an approved medical specialist for assessment of permanent impairment, the medical assessment certificate issued by the approved medical specialist in accordance with section 325 of the [ WIM Act]."
102 The effect of the legislative scheme, therefore, is that a plaintiff worker who seeks to recover common law damages from his or her employer is required to establish that the statutory threshold has been met. That construct should also apply in the s 151Z context where the plaintiff worker is entitled to, but has not taken, such proceedings. Section 151Z(2)(d) requires the Court to consider the case as if the plaintiff worker's damages were being assessed under Pt 5, Div 3 and, in my view, it follows that the onus of proof in that context should fall where it would if the plaintiff worker had actually sued.
103 Finally I note that in cases to which the 2001 amendments apply in which the worker is entitled to, but has not, taken proceedings against the employer, it would usually be in the worker's interest to demonstrate that the s 151H threshold was satisfied. This is because if there was no evidence that, the worker would recover any damages in accordance with Pt 5, Div 3 the whole of the contribution which the non-employer tortfeasor would (but for Pt 5) be entitled to recover from the employer as a joint tortfeasor or otherwise would exceed the amount of the contribution recoverable and would be used to reduce the damages to which the worker would be entitled against the third party: Grljak no1 (at 89), Grljak No 2 (BC9601317 at 7), Clout (at [34]). In other words, any damages found to be recoverable if damages are assessed pursuant to Pt 5, Div 3 reduce the differential between that amount and the contribution which the non-employer tortfeasor would (but for Pt 5) be entitled to recover from the employer as a joint tortfeasor or otherwise and, concomitantly, limit the amount by which the worker's damages claim against the non-employer tortfeasor is reduced (s 151Z(2)(c)).