Fugen Holdings Pty Ltd v Brassington

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

1 GILES JA: The respondent Mr Michael Brassington was injured in the course of his employment as a bricklayer with the appellant Fugen Holdings Pty Ltd. He applied for an award of lump sum compensation pursuant to s 66 of the Workers Compensation Act 1987 ("the Act") and compensation for pain and suffering pursuant to s 67 of the Act. On 16 February 1998 Walker CCJ made an award of a total of $77,000 made up of -

45 per cent permanent impairment of the back $20,000 15 per cent permanent loss of efficient use of the left leg $11,250 5 per cent permanent loss of efficient use of the right leg $3,750 Pain and suffering $35,000 Total $77,000

The appellant submitted that his Honour had erred in relation to each constituent of this award.

2 The first group of grounds of appeal were directed to the award in relation to the permanent impairment of the back. The challenges to the award in this respect were of two kinds.

3 It was submitted that his Honour had misdirected himself as to the correct criterion for the determination of the extent of permanent impairment of the respondent's back. There was no doubt that the respondent had suffered a permanent impairment of his back. Permanent impairment of the back was a "thing" mentioned in the Table to Division 4 of Part 3 of the Act, and by s 66 the respondent was entitled as compensation for what the Act called the loss of that thing to an amount equal to the percentage of $100,000 set out opposite the loss in the Table. For this thing a range of percentages was provided. By the operation of Note (a) to the Table the maximum percentage of 60 per cent was payable only in a most extreme case, and his Honour had to determine for the respondent's loss the percentage reasonably proportionate to that maximum percentage having regard to the severity of the matter. He arrived at 45 per cent. The argument was that in referring to the respondent's "incapacity" in his reasons his Honour had misdirected himself by adopting the concept of incapacity, the concept in the Act relevant to the calculation of weekly payments of compensation, when the correct concept was permanent impairment.

4 In his reasons his Honour recounted the respondent's evidence of the impact of the injury upon him and said that he found the respondent to be a credible, straightforward witness of truth and that he did not form the impression that the respondent was in any way exaggerating his claim. He summarised the medical evidence, which included assessments by some of the doctors of percentages of impairment of the respondent's back. When giving the reasons leading to his assessment, in referring to part of the respondent's evidence his Honour said this - "When the applicant presents to a doctor's surgery and is subjected to clinical examination to test his restrictions according to the arbitrary guidelines of the Australian Medical Association he can do some things. He can raise his legs to 45 per cent, bend over and touch his knees, jog a few steps, squat, and remove his trousers and footwear. However, the applicant's evidence is that every day after activity he suffers severe exacerbations of his pain requiring painkillers, sometimes up to eight a day. In other words, for part of his day he is rendered virtually immobilised by pain induced incapacity. The specialists opinion [sic] are no doubt a fair assessment of the applicant's impairment and losses when he is suffering the constant dull ache in his back. They are not a fair assessment of his losses and impairment when he is in severe pain as he is from time to time daily. The severe bouts generate pain which causes paraesthesia in his legs and pain in his legs and my determination is that the full range of the applicant's incapacity has not been assessed in the medical practitioners reports. For these reasons I take the view when comparing the applicant's case to a most extreme case that the permanent impairment of his back is greater than that assessed by all the specialists and I determine his impairment to represent 45 per cent of a most extreme case."

5 I do not think there is any reason to conclude that his Honour misdirected himself in the manner suggested. He was clearly alive to, and acted upon, the concept of permanent impairment, and the appellant's reliance on the two references to incapacity in the passage I have set out did not in my view indicate adoption of the concept of incapacity as a term of art, as it was described in the course of submissions, in the Act. As part of a description of the respondent's state, his Honour referred to incapacity. The state had to be addressed in order to evaluate impairment. Incapacity in a sense other than the term of art can be evidence of impairment or a ground for finding impairment. There was nothing in this point.

6 It was then submitted that his Honour had erred in arriving at the percentage of 45 per cent. The doctors' assessments of permanent impairment were in the range 20 per cent to 30 per cent. His Honour said that those assessments were only part of the evidence he was entitled to take into account, and it is plain that he arrived at the higher percentage because of the respondent's evidence of the impact of the injury. In this his Honour was correct, as was not in dispute in this appeal: see Jones Brothers Bus Co Pty Ltd v Baker (1992) 26 NSWLR 322; Manning Valley Senior Citizens Homes Ltd v Cleveland (NSWCA, 13 June 1995, unreported); and National Starch & Chemical Pty Ltd v Nelson, (NSWCA, 17 September 1998, unreported). The appellant argued that error of law was nonetheless revealed in what his Honour then said.

7 First, after saying that all the evidence was available to the Court including that of the respondent, his Honour continued, "I say that because when I weigh the appellant's evidence the tragic truth is that for all intents and purposes at the age of 29 years he is an invalid." It was said that the finding that the respondent was an invalid was "not germane to his Honour's deliberations under s 66." I see nothing objectionable in using such a description of the effect of the injury, as part of an assessment of the permanent impairment of the respondent's back.

8 Secondly, his Honour referred in the passage already set out to what the respondent could do when in a doctor's surgery and "subjected to clinical examination to test his restrictions according to the arbitrary guidelines of the Australian Medical Association". He went on to say that the doctors' reports were not an assessment of the full range of the respondent's incapacity. The appellant said that, where the doctors had not given oral evidence and were not subject to cross-examination, there was no evidentiary foundation for saying that the full range of the respondent's incapacity had not been assessed, and further that there was no evidence concerning guidelines of the Australian Medical Association, let alone to the effect that such guidelines were arbitrary.

9 Again there is nothing in this. In what he said about the doctors' assessment of the full range of the respondent's incapacity, his Honour meant no more than that in the light of the respondent's evidence he did not think that the doctors' reports truly reflected the impact of the injury as his Honour found it to have been. The reference to guidelines of the Australian Medical Association was regrettably loose, but was clearly enough a reference to scales in the Spine Society of Australia's Spine Function Assessment by which one of the doctors had assessed a percentage permanent impairment of the respondent's back. Such a means of assessment is arbitrary, in that it is a scale according to selected criteria when other means of assessment and other criteria may just as appropriately be employed. The manner in which his Honour expressed himself was not ideal, but in my opinion it did not reveal error.

10 The second group of grounds of appeal were directed to the award in relation to the permanent loss of efficient use of the legs. The Table provided for fixed percentages of the maximum amount payable, not a range of percentages, and accordingly Note (a) did not govern assessment of a percentage less than a most extreme case. Instead, by s 68(1) of the Act, if the loss consisted of the loss of a proportion (but not all) of the efficient use of the legs, there was payable "a percentage of the compensation payable for the total loss ... equal to the percentage lost by" the respondent. His Honour had to assess a percentage of the amount flowing from the fixed percentage.

11 The appellant submitted that his Honour had misdirected himself in this exercise in two respects.

12 First, it was said that there was error in failing appropriately to address the relevant items in the Table. The Table provided for loss of either leg at or above the knee, a fixed percentage of 75 per cent, and loss of either leg below the knee, a fixed percentage of 70 per cent. There was no express finding as to which of these items his Honour took. It was said that his Honour failed to consider the alternatives in the Table to determine which was applicable, and to give reasons why he so determined. Once again, there is nothing in this. A simple calculation shows that his Honour took for both the left leg and the right leg the fixed percentage of 75 per cent referrable to loss of either leg at or above the knee. The evidence recited by his Honour entitled him to do so. I do not think there was the failure to consider and determine, nor do I think that more was required by way of reasons than his Honour provided.

13 Secondly, it was said that his Honour had erroneously made his assessment by regard to Note (a) in the Table rather than s 68(1). There is no doubt that, when making his assessments in the course of his reasons, his Honour said that he was "comparing the applicant's permanent loss of efficiency to a most extreme case", and in a formal statement of his findings his Honour referred to the permanent losses of efficient use of the legs as percentages of a most extreme case. This language was not appropriate when the governing provision was s 68(1) rather than Note (a) in the Table, and his Honour either wrongly stated what he was about, or at best was astray in the way he expressed himself.

14 But an appeal exists to correct the result, not the reasoning or inappropriate expression of the reasons, and I do not think that his Honour arrived at an incorrect result. The most extreme case of loss of a leg, at the outer limit of any range in a most extreme case, is amputation, loss in an absolute sense. Treating the permanent loss of the efficient use of a leg as the loss of a proportion (but not all) of such an absolute loss of the leg, as s 68(1) requires, and arriving at a percentage loss, is the same exercise although in different language as that required by Note (a) in the Table. The difference in expression between Note (a) in the Table and s 68(1) is because the losses for which fixed percentages are provided in the Table are losses in the absolute sense, but the losses for which ranges of percentages are provided in the Table are not of that nature. They are losses in terms of loss of function, damage, impairment or disfigurement. All this is explained in Jones Brothers Bus Co Pty Ltd v Baker at 332-3. Kirby P said at 332 -

"There is an important difference between the scheme adopted in s 68 of the Act and that adopted in Note (a). Section 68, working against a background of sixty years of the application of s 16 of the 1926 Act, provides no referent in proportion to which the percentage lost by the worker is to be scaled for the purpose of calculating the compensation payable under s 66. Note (a), however, does give such a referent. It does so by providing that the ' … maximum percentage is payable only in a most extreme case.'

This is not a difference of substance. In the case of 'loss of right hand' it was unnecessary for s 68 to refer to 'a most extreme case' because in 'loss' cases the 'most extreme case' necessarily involves the total loss of the anatomical part in question (or total loss of the relevant sense). This is easily imaginable and ascertainable. However, in the case of impairment of the back, because the worst case is not one where the back is 'lost' as such, it is appropriate to specify that it is 'a most extreme case' that is to be put at the top of the scale. Lesser cases are then to be scaled by reference to this imagined case as they bear a relationship to it. Thus, other cases are to bear a proportionality to such a 'most extreme case'. The proportion is that which is reasonable 'having regard to the severity of the matter'."

15 His Honour later said at 333 - "For `loss' cases, s 65 and s 68 govern the calculation of proportionality. For brain damage, permanent impairment and disfigurement cases, the same or similar work is done by Note (a)."

16 The appellant submitted that nonetheless there could be a difference in the two exercises, because the notion of a most extreme case was not the same as the notion of an absolute loss. A most extreme case could be less than the most extreme case, and so it was said that a given percentage of a most extreme case could lead to an award different from the same percentage of an absolute loss. Assuming a possible difference for present purposes, in this case I do not think it is of significance. The loss was loss of efficient use of the legs, involving a less than precise, indeed judgmental, assessment. I do not think there would be any realistic difference between a given percentage of loss of all the efficient use of the legs and the same percentage of a most extreme case of loss of efficient use of the legs. Although his Honour did not in his language make his assessment by reference to s 68(1), as he should have done, I do not think his error is such as to displace the award.

17 The final group of grounds of appeal were in relation to the award of compensation for pain and suffering. By s 67(1) of the Act a worker who has suffered a loss mentioned in the Table is entitled to an award of compensation for pain and suffering "resulting from the loss".

"Because there is a distinction between injury and loss resulting from an injury (and compensation is payable under this section only for pain and suffering resulting from a loss), the pain and suffering for which compensation is payable under this section does not include pain and suffering that results from the injury but not from the loss."

19 The appellant submitted that, contrary to s 67(1A), his Honour had included in his award compensation for pain and suffering resulting from the injury together with pain and suffering resulting from the loss, and that the compensation therefore went beyond that authorised under the Act. It pointed to his Honour's statement of his finding - "As a result of the injury the applicant is entitled to lump sum compensation pursuant to s 67 for pain and suffering representing 70 per cent of a most extreme case." (emphasis added).

20 A reading of his Honour's reasons underlying this finding does not otherwise indicate disregard of s 67(1A) but the statement of his Honour's finding provides a foundation for the appellant's submission. The language follows the same language in which his Honour had expressed findings in relation to permanent impairment of the back and permanent loss of efficient use of the legs, each being found to have been sustained "as a result of that injury" or in similar terms, meaning the injury suffered by the respondent in the course of his employment. But it must be asked what s 67(1A) does and whether there was anything more than another unfortunate use of language.

21 A loss of a thing mentioned in the Table resulting from an injury may not immediately follow the injury. There may be a period of time between an injury and the onset of a loss for the purposes of the Act, for example between the injury and the arrival of a permanent impairment of the back. There may also be pain and suffering caused by the injury otherwise than in connection with the loss for the purposes of the Act, although it may be difficult to give instances of this. This limitation, inherent in s 67(1), was brought out in Borovac v Corporate Ventures Pty Ltd (1995) 12 NSWCCR 84, in which Mahoney JA said at 89 - "Section 67(1) limits the compensation to be awarded to 'pain and suffering resulting from the loss', that is, from the (permanent) impairment of the back. An injury falling within the Act may produce both pain and suffering which arises from something other than the impairment of the worker's back and pain and suffering which results from that impairment. Section 67 authorises compensation only in respect of the latter: see, e.g. Glennos Constructions Pty Ltd v Beccari, Court of Appeal, No 40561/90, 22 September 1993, unreported. As to section 67 generally, see Rico Pty Ltd v Road Traffic Authority (1992) 28 NSWLR 679; Alvorac General Engineering Pty Ltd v Arlotta (1993) 29 NSWLR 734; Arklow Pty Ltd v Taavao (1992) 8 NSWCCR 269. Such operation of the section may require the Court to make difficult dissections and it is possible that the result of the provision may in this regard produce artificial distinctions. But, in my opinion, the terms of the provisions are in this regard clear. It was no doubt apparent to the legislature that the injuries for which compensation is payable under the Act include both injuries within the Table and many kinds of injuries which are not. The legislature decided to limit the power to grant compensation for pain and suffering to (as far as is here relevant) injuries which fall within the Table."

22 Section 67(1A) was inserted in the Act by the Workcover Legislation Amendment Act 1995. It is evident from the explanatory memorandum and the second reading speech that the amendment was intended to put beyond doubt, not necessarily because it had been brought to the fore in Borovac v Corporate Ventures Pty Ltd, the limitation to which Mahoney JA had referred: for example, in the second reading speech it was said that the proposed amendment "reinforces that the entitlement is confined to the `permanent loss' resulting from a worker's injury, rather than encompassing other effects of the injury." Thus the effect of s 67(1A) is to exclude from the compensation for pain and suffering any pain and suffering prior to the onset of a loss for the purposes of the Act, and any pain and suffering thereafter resulting from the injury but otherwise than from the loss. As Mahoney JA noted, even prior to s 67(1A), difficult dissections may be required and there may be artificial distinctions, and the terms of this provision have not done away with them.

23 The question is whether, reading his reasons as a whole, his Honour included in his award forbidden compensation for pain and suffering. I do not think he did.

24 On the facts as found by his Honour, the injury suffered by the respondent brought immediate impairment of his back and loss of efficient use of his legs. In short, he could not work, was in constant pain, and could not walk properly. He suffered loss, meaning permanent impairment of his back and permanent loss of efficient use of his legs, from the time of the injury, even though the permanency of the losses may not have become apparent without the passage of time. In this last respect, reference may be made to the judgment of Clarke JA in Borovac v Corporate Ventures Pty Ltd at 95, recognising a permanent impairment from the time of the injury even though it was only at a later time that it could be said that all of the impairment was permanent. Further, there was no suggestion of pain and suffering arising from something other than the respondent's losses. On the facts before his Honour, there was no difference between pain and suffering resulting from injury and pain and suffering resulting from a loss. It is understandable, therefore, that his Honour should have used the language he did in stating his finding, and while it was incorrect language I do not think it demonstrated departure from s 67(1A).

25 It was then submitted that the award for pain and suffering was erroneous so far as it included an amount referrable to the loss of efficient use of the legs. According to the argument the injury was to the back, not the legs, and the loss of efficient use of the legs was because of pain from the injury to the back. The loss of efficient use of the legs was the pain and suffering and, it was submitted, there could not be separate pain and suffering resulting from that loss. It was said that compensation should not be awarded twice for what was in substance the same pain and suffering, and there was reference to a question raised by Neilson CCJ in Scrimshaw v S A R Wood Pty Ltd (1997) 14 NSWCCR 335 at 343 -

"This case also raises an interesting conundrum. Where, for example, a back injury causes pain radiating into the lower limbs and that radiating pain causes a loss of efficient use of the lower limbs, can one then award compensation for the pain in the lower limbs, which pain itself is not the result of the loss of the use of the limbs? That is, can one pull oneself up by one's own bootstraps in finding that there is a loss because of a radiating pain and then submit that that pain is the result of the loss and therefore the basis to an entitlement to compensation under section 67?"

26 By the definition in s 67(7) of the Act, pain and suffering includes distress or anxiety. The appellant's argument could not exclude distress or anxiety resulting from the loss of efficient use of the legs, nor in my view in this case should the pain and suffering which brought about the loss of efficient use of the legs be excluded. The pain and suffering, including the pain in the legs, resulted from the loss, being the permanent impairment of the back. It does not matter that the pain and suffering also brought about the loss of efficient use of the legs, and I do not think that constituted double compensation. This case does not present the conundrum to which Neilson CCJ referred.

27 Finally, the appellant submitted that the award of $35,000 was not reasonably proportionate, having regard to the degree and duration of pain and suffering and the severity of the loss or losses, to the maximum amount of compensation payable under s 67 in a most extreme case, as required by s 67(3).

28 The maximum amount payable in a most extreme case was $50,000. His Honour found that the respondent had a great deal of pain and as a twenty-nine year old could expect many more years of pain. The pain was constant, at least a dull ache and during the day exacerbating to a point where it became so unbearable that the respondent required painkillers. He took pain Tablets daily. He had a great deal of emotional anguish, and had the regular services of a psychologist, the anguish relating to his personal life with his wife and from the fact that he could no longer provide for his family, do the domestic tasks, or fulfil an active role as a father to his four children. As well, he had lost a lifestyle in which he took great pleasure, including what his Honour described as "the love of his life which is fishing". This caused him distress. I repeat that, for relevant purposes, under the Act pain and suffering includes distress or anxiety. The assessment of the reasonable proportionality of the respondent's pain and suffering to the maximum amount was necessarily judgmental, and this Court should intervene only where the assessment of the trial judge was clearly wrong (see Offset Alpine Printing Pty Ltd v Porteous (1992) 8 NSWCCR 489 at 502, 507). I do not think that this can be said of his Honour's assessment.

29 It follows that in my opinion the appeal should be dismissed with costs.

32 PRIESTLEY JA: The order of the Court is that the appeal is dismissed with costs.

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