Harris v DJD Earthmoving Pty Ltd [2016] VSCA 188

1 This is an application for leave to appeal, and, if leave be granted, an appeal from a judgment given in the County Court.[1]

2 The matter before the County Court judge was an application by Mr Brian Harris under s 134AB(16)(b) of the Accident Compensation Act 1985 ('the Act') for leave to bring common law proceedings in respect of an employment-related back injury, being an application made on the basis that the back injury amounted to 'serious injury' within paragraph (a) of the definition of that term in s 134AB(37) of the Act ('permanent serious impairment or loss of a body function'). Mr Harris had sought leave to bring proceedings for both 'pain and suffering damages' and 'pecuniary loss damages' as those terms are defined in s 134AB(37). By his order the judge, in effect, granted leave to Mr Harris to issue proceedings at common law for pain and suffering damages but refused his application insofar as he sought leave to proceed for pecuniary loss damages.

3 Mr Harris' application to this Court for leave to appeal was refined at the hearing, such that it now relies on a single ground. In effect, the ground is that the judge did not provide an adequate statement of reasons for refusing Mr Harris leave to proceed for pecuniary loss damages.[2]

4 In our view, this ground is a good one. It is not sufficiently clear, from the judge's written reasons or otherwise, why Mr Harris' application for leave to proceed for pecuniary loss damages was unsuccessful. Leave to appeal should be granted; the appeal should be allowed; the judge's order should be set aside insofar as it relates to leave to proceed for pecuniary loss damages; and to that extent the matter should be remitted to the County Court for rehearing by a different judge.

5 His Honour's reasons for judgment begin with some introductory remarks about the nature of Mr Harris' claim. Then follows an outline of s 134AB of the Act, a statement of what are described as the issues in the case and an analysis of Mr Harris' credit. As to the latter, in short, the judge expresses satisfaction with Mr Harris' honesty as a witness, albeit with reservations as to the reliability or accuracy of his evidence, such reservations being attributed not to evasiveness but to befuddlement on the part of Mr Harris on account of his admitted alcoholism and marijuana use.[3] Next in the judgment comes a section headed 'Compensable physical injury' comprising paragraphs [59] to [143]. This contains references to a considerable quantity of evidence, being mainly medical reports. The main focus is on assessing the nature and extent of Mr Harris' injury and the extent to which the use of his back is impaired as a result of the injury. At the end of this section of the reasons, his Honour sums up his conclusions to that stage as follows:

[143] Accordingly, I find that the plaintiff has suffered a work-related permanent aggravation of a discal injury at L5-S1 which has had the consequence of rendering the plaintiff totally incapacitated for his previous work and capable of performing, at best, suitable light work for an uncertain number of hours.

6 The next section of the judgment is headed: 'The Plaintiff's evidence: pain and suffering consequences'. Under this heading, his Honour says:[4]

[144] Having found the compensable physical injury as cited above, including the objective physical signs elicited by various medical practitioners, I consider the following evidence of the plaintiff to be consistent with those findings.

[145] The plaintiff was born in January 1969 and is forty-six years of age. He attended Swinburne Technical College up to Year 8 and left when he was fourteen years old. Thereafter, he worked in a number of physical manual jobs.

[146] During the approximate seven years he worked with the defendant, the plaintiff worked as a full-time machine operator and would drive machinery over uneven ground involving a lot of vibrations and rocking. Approximately 40 per cent of his work was labouring duties. This involved heavy lifting and twisting and turning on uneven ground and manoeuvring weights such as pumps weighing up to 50 kilograms. He also worked eight hours a day from Monday to Friday, plus two hours of overtime every day and also six hours of overtime on Saturday.

[147] Lower back pain slowly developed over a one-year period from about 2011 to 2012. He also started getting pain in the back of his right leg as far as the knee.

[148] On 29 October 2012, the plaintiff was driving over uneven ground involving a lot of rocking and movement back and forth. He developed worse lower back pain and stopped working at about 10.30am. He has not worked since that time.

[149] Treatment has consisted of visits to his general practitioner, physiotherapy and hydrotherapy. He has also had epidural injections both from his general practitioner and from his treating neurosurgeon, Mr Craig Timms.

[150] The plaintiff complains of constant low-back pain which radiates down his back into the back of his right leg as far as his knee and sometimes down to the calf. The symptoms of sciatica happen at least once a day and sometimes the pain goes into his left buttock.

[151] The lower back pain gets worse if he bends or twists or does some forceful pushing or pulling.

[152] The plaintiff has difficulty sleeping and he gets up several times at night because of lower back and right leg pain. He also takes short naps through the day because of fatigue.

[153] At the time of swearing his first affidavit on 11 June 2014, the plaintiff was seeing his general practitioner once every two weeks and taking medication such as OxyContin, Endone, Tramal and Valium to relax his back muscles. At this time, he swears that he struggles with the housework as his wife suffers from carpal tunnel syndrome. He states that he can do the vacuuming and mopping although it hurts a lot. He has to take breaks and have rests.

[154] The plaintiff complains that his back pain is worse when he is straining on the toilet.

[155] Activities such as fishing with his friends or recreation on his jet ski are curtailed. On this occasion, the plaintiff swears that a few minutes on his jet ski became too painful for his back and he had to cease.

[156] The plaintiff further swears that he wears thongs or "crocs" so that he can avoid putting on or taking off his shoes.

[157] Regular attendance at the North Melbourne Football Club home games has been reduced to once or twice a year.

[158] The plaintiff states that sexual activity hardly happens anymore:

"When it does it's really painful, so now I just don't bother."

[159] In the ultimate paragraph of his first affidavit, the plaintiff swears:

"... Because of my work injury, I feel like my life has been robbed. I feel like my livelihood has been taken away from me and I am depressed because of it. I also had to sell my investment property for financial reasons and this was really difficult to do. I feel like all the work that I have done up until now has been lost."

[160] In his second affidavit sworn 10 February 2015, the plaintiff swore that he felt that his lower back and right leg pain had become a little worse. He stated he got sciatica pain down his right leg at least once a day and sometimes it is there for most of the time.

[161] The plaintiff further swore that he no longer took Endone and now takes one to two tablets of OxyContin a week. He stated he took two tablets of Tramal most days and he takes about two to four tablets of Valium nearly every day in order to help relax his back muscles. He has also now been prescribed Pristiq once a day for depression.

[162] The plaintiff further swore that he has gone fishing "about two times" since the injury. He swore:

"... On these trips, I remember going out a couple of times on the boat. With my back pain, I found it more difficult getting in and out of the boat and with the fishing as well."

[163] Further, in the past the plaintiff used to collect his own firewood by chain sawing trees, splitting wood and chopping same with an axe. He stated he used to obtain about 4 or 5 tonne per year. He now buys about 2 tonne for the year as he is unable to perform this task.

[164] The plaintiff also swears he finds it difficult to exercise his dog, Banjo, because of his lower back pain.

[165] On balance, I find that the consequences referred to above, particularly the constant back pain, the need for ongoing medication, the loss of sleep and the severe interference with his chosen occupation, are all consistent with the diagnoses that I have found to exist above. In all the circumstances, I consider that these consequences, when judged by a comparison with other cases in the range of possible impairments or losses of a body function, are permanent, in the sense that they are likely to persist into the foreseeable future and they can fairly be described as being "more than significant or marked" and as being "at least very considerable".

[166] Several medico-legal examiners have referred to the need for the plaintiff to attend a pain management specialist to try to get his use of narcotics and other substances under control. I will deal with this aspect of the evidence more fully in the economic loss category but suffice to say that I accept that even if the plaintiff attended such pain management, the consequences would still be "serious" as described.

7 Having regard to the language of s 134AB(37) and (38) of the Act (especially that of paragraphs (b) and (c) of s 134AB(38)),[5] it is clear enough that the conclusions expressed in paragraphs [165] and [166] of the judgment (as set out above) were the foundation of Mr Harris' success insofar as his application sought leave to sue for pain and suffering damages.

8 The judge turns next to the determination of the issue of leave to sue for pecuniary loss damages. This is the final section of his Honour's reasons. It contains most (though not all) of the observations made by the judge which are directly relevant to this issue, which, ultimately, became the principal issue at the hearing. It is headed 'The Plaintiff's evidence: economic loss consequences'. It consists of the following six paragraphs only:[6]

[167] As stated earlier, the plaintiff left school at the age of fourteen and it would appear he has had no further formal training, education or work skilling. Clinical neuropsychologist, Mr James Drury, reported to the plaintiff's solicitors on 23 January 2015 to the following effect:

"... Mr Harris demonstrates a pattern of cognitive and memory functioning which is within the Average to Low Average ranges at best, but also highlights several areas of relative weakness. He reported long-standing difficulty with aspects of language processing and numeracy, and the current assessment confirmed these weaknesses. He also demonstrated limited visuo-spatial planning and memory, and slow processing speed."

[168] On any view, the plaintiff's capacity to perform "suitable work" is severely compromised by virtue of the ongoing pain and probably his substance abuse. Several medical practitioners have commented on the need for him to attend a pain management specialist in order to ameliorate his position. It is clear that the plaintiff having been referred to pain management specialist, Dr Monagle, in late 2013, has cancelled a number of appointments for various reasons. He told Mr Drury that there had been "seven subsequent attempts to rebook the appointment". Whatever the facts, it appears that Dr Monagle has not been prepared to make another appointment. The plaintiff himself has given evidence that his own solicitor either offered or did pay for one of the aborted appointments.

[169] Further, the general practitioner has indicated his intention to refer the plaintiff to the South Eastern Alcohol and Drug Dependency Service at the conclusion of his WorkCover case. The outcome of such a referral or indeed a referral to a pain management specialist is obviously uncertain. All that I can infer is that both referrals may ameliorate the plaintiff's capacity for work to some extent.

[170] I am prepared to infer that the plaintiff's reluctance to attend a pain management clinic is probably related to his substance abuse, but overall, I am not prepared to infer that this abuse prevents him from attending such a clinic. Despite his antecedent learning difficulties, there is evidence before me that the plaintiff is capable of a wide range of alternative light duties.

[171] On the evidence before me, the plaintiff's Senior Counsel has conceded that, with respect to the need to prove the 40 per cent loss of earning capacity, it is "all or nothing", in that the plaintiff would need to prove that he is totally incapacitated for suitable work. I am unable to find that he has discharged the burden of proof in this regard at the date of hearing. His claim for leave to proceed at common law for economic loss is dismissed.

[172] I will hear the parties as to any consequential orders.

9 In summary, the applicant contends that the judge's reasons in the County Court proceeding do not reveal an identifiable path of analysis and reasoning that shows why his Honour was not satisfied that the applicant had discharged his onus in relation to economic loss. The applicant refers to various findings made by the judge which, he submits, favoured the applicant's economic loss claim. In addition, he submits that the judge's reasons do not deal adequately with what might constitute 'suitable employment' for the applicant for the purposes of the relevant statutory test. He cites Dressing v Porter,[7] in which Ashley JA said that 'an examination of the reasons should enable the losing party to know why he or she lost'. He contends that the reasons of the County Court judge do not enable him to know why he lost his economic loss claim.

10 In its written case, the respondent contended that, having regard to the 'narrow basis' of the primary judge's decision, the reasons sufficiently explain the path of reasoning that led to the conclusion set out at [171] of the judgment.[8]

11 At the hearing, the respondent commenced by contending that the reason why the applicant failed before the primary judge was that he had failed to persuade his Honour of the extent of his permanent loss of earning capacity for the purposes of s 134AB(38)(e)(ii) of the Act.[9] The respondent submitted that the primary judge's reasons were 'more than adequate' and 'abundantly clear'.[10]

12 The respondent acknowledged that there had been evidence before the County Court that the applicant had had 'no work capacity, or reduced work capacity'.[11] It accepted that there had 'certainly' been evidence that the applicant would never be able to return to his former employment.[12] It noted that there were differences of opinion as to whether the applicant was able to return to any employment and, if so, what type of employment; and it acknowledged that the primary judge had not resolved the issue of the kind of employment for which the applicant might be suitable. But, according to the respondent, there was no occasion for the judge to do so, having regard to the legislative framework, the issues at trial and the reasons which the judge did give.[13]

13 As to the legislative framework, we have already mentioned that 'serious injury' is defined in s 134AB(37) to mean 'permanent serious impairment or loss of a body function'. We should also set out ss 134AB(38)(b) and (c), which are as follows:

(b) the terms serious and severe are to be satisfied by reference to the consequences to the worker of any impairment or loss of a body function, disfigurement, or mental or behavioural disturbance or disorder, as the case may be, with respect to -

(i) pain and suffering; or

(ii) loss of earning capacity -

when judged by comparison with other cases in the range of possible impairments or losses of a body function, disfigurements, or mental or behavioural disturbances or disorders, respectively;

(c) an impairment or loss of a body function or a disfigurement shall not be held to be serious for the purposes of subsection (16) unless the pain and suffering consequence or the loss of earning capacity consequence is, when judged by comparison with other cases in the range of possible impairments or losses of a body function, or disfigurements, as the case may be, fairly described as being more than significant or marked, and as being at least very considerable;

14 In describing the legislative framework, the respondent took us first to s 134AB(19)(b) of the Act,[14] which applies for the purposes of an application under s 134AB(16)(b), and which provides:

(b) for the purposes of proving a loss of earning capacity in accordance with subsection (38), a worker bears the onus of proving any inability to be retrained or rehabilitated or to undertake suitable employment or any employment including alternative or further or additional employment and the extent of such inability;

15 Then the respondent referred to s 134AB(38)(e), which provides (so far as relevant):

(e) where a worker relies upon paragraph (a), (b) or (c) of the definition of serious injury in subsection (37), ... a court shall not grant leave under subsection (16)(b) on the basis that the worker has established the loss of earning capacity required by paragraph (b) unless the worker establishes in addition to the requirements of paragraph (c) or (d), as the case may be, that -

(i) ... at the date of the hearing of an application under subsection (16)(b), the worker has a loss of earning capacity of 40 per centum or more, measured ... as set out in paragraph (f); and

(ii) the worker ... will after the date ... of the hearing continue permanently to have a loss of earning capacity which will be productive of financial loss of 40 per centum or more;

16 Next, the respondent took us to paragraph (f) of s 134AB(38), which provides:

(f) for the purposes of paragraph (e)(i), a worker's loss of earning capacity is to be measured by comparing -

(i) the worker's gross income from personal exertion (expressed at an annual rate) which the worker is -

(A) earning, whether in suitable employment or not; or

(B) capable of earning in suitable employment -

as at that date, whichever is the greater, and -

(ii) the gross income (expressed at an annual rate) 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 3 years before and 3 years after the injury as most fairly reflects the worker's earning capacity had the injury not occurred;

17 The expression 'suitable employment' which appears in s 134AB(38)(f) and in s 134AB(38)(g) (to which we will come in a moment) was, at the relevant time, defined in s 5 of the Act in the following terms:

suitable employment, in relation to a worker, means employment in work for which the worker is currently suited -

(a) having regard to -

(i) the nature of the worker's incapacity and the details provided in medical information including, but not limited to, the certificate of capacity supplied by the worker; and

(ii) the nature of the worker's pre-injury employment; and

(iii) the worker's age, education, skills and work experience; and

(iv) the worker's place of residence; and

(v) any plan or document prepared as part of the return to work planning process; and

(vi) any occupational rehabilitation services that are being, or have been, provided to or for the worker; and

(b) regardless of whether -

(i) the work or the employment is available; and

(ii) the work or the employment is of a type or nature that is generally available in the employment market;

18 Finally, the respondent took us to and emphasised s 134AB(38)(g), which provides:

(g) a worker does not establish the loss of earning capacity required by paragraph (b) where the worker has, or would have after rehabilitation or retraining, and taking into account the worker's capacity for suitable employment after the injury and, where applicable, the reasonableness of the worker's attempts to participate in rehabilitation or retraining, a capacity for any employment including alternative employment or further or additional employment which, if exercised, would result in the worker earning more than 60 per centum of gross income from personal exertion as determined in accordance with paragraph (f) had the injury not occurred;

19 In addressing these legislative provisions, the respondent pointed out that s 134AB(38)(e)(i) is concerned with loss of earning capacity as at the date of the hearing, whereas subparagraph (ii) requires the worker to demonstrate that he or she would, after the date of the hearing, continue permanently to have a loss of earning capacity which will be productive of financial loss of 40 per centum or more; and that the conditions set out in s 134AB(38)(e)(i) and (ii) are cumulative.[15] The respondent contended that it was the applicant's failure to persuade the judge on the balance of probabilities that the applicant would continue permanently to have a loss of earning capacity which would be productive of a financial loss of 40 per centum or more that was the material issue on which the case turned in the County Court. The respondent submitted that, therefore, it was unnecessary for his Honour to reconcile differing opinions about the applicant's earning capacity, either as at the time of trial or into the future. According to the respondent, a necessary element which the applicant was required to establish had not been proven to the primary judge's satisfaction, namely permanence; and his Honour had explained adequately why permanence had not been proven. In that regard, the respondent pointed to the connection between the burden of proof cast on the applicant by s 134AB(19)(b) and the provisions relating to rehabilitation and retraining contained in s 134AB(38)(g).[16]

20 To support these contentions, the respondent referred to the judgment of the Court of Appeal in Barwon Spinners Pty Ltd v Podolak.[17] Two submissions were made in reliance on that case.[18]

21 First, with a view to demonstrating that the burden of proof is and remains on the worker in all relevant respects, the respondent drew attention to paragraph 31 of the judgment, which contains the following observations:

The burden of proving economic loss is expressly placed by para (e) on the worker, and as the question of rehabilitation or retraining is but part of that larger issue, we think the better view must be that the onus remains on the worker even in relation to the matters canvassed by para (g). Indeed subs (19)(b) appears to provide so expressly. [That subsection was then set out.] ... Accordingly, in our opinion the burden of proof under para (g) of subs (38) does not shift from the one upon whom the overall burden lies of proving the case for leave.

22 Secondly, the respondent submitted that the correct sequencing of analysis in serious injury applications could be discerned from paragraph 33 of the judgment in Barwon Spinners. The Court of Appeal there spoke of a need to identify precisely, at the outset, the nature and extent of the injury relied upon and of the consequent impairment of a body function said to have been produced. The Court continued:

A necessary part of that task of identification will be to determine how far, if at all, the alleged impairment is permanent, in the sense of likely to last for the foreseeable future. Only then, it seems to us, can one proceed to the inquiry about the consequences for the plaintiff: are the consequences such that they satisfy the "very considerable" test set forth in paras (b) and (c)? Thus, in order the questions must be: first, what is the injury and what is the impairment said to be produced in consequence; secondly, is the impairment permanent, ie, likely to last for the foreseeable future; and thirdly, are the consequences for the plaintiff such as to satisfy the "very considerable" test?

The respondent submitted that this analysis applies equally to the evaluation of loss of earning capacity for the purposes of s 134AB(38)(e), (f) and (g); and, in particular, that permanency is a necessary element, as s 134AB(38)(e)(ii) indicates. Thus, the respondent submitted, Barwon Spinners establishes that the question of permanence arises before one gets to evaluation of the loss of earning capacity. In the present case, according to the respondent, the County Court judge adopted the correct sequence of analysis, and the matter did not get beyond permanence because the applicant failed to persuade his Honour on the question of permanence.[19] In this regard, the respondent noted that, in the introductory part of the County Court judgment, the judge had said he had 'applied the principles identified' in Barwon Spinners.[20]

23 The respondent's factual arguments relating to the judge's approach to permanence are dealt with in paragraphs 16 to 19 of its written case,[21] as follows:

1. Having regard to s 134AB(38)(g) and to the fact that pursuant to sub-s (19)(b) the applicant bore the onus of proving the extent of any inability to be rehabilitated, the applicant's case on loss of earning capacity had to confront two significant obstacles -

(a) first, the applicant had not been assessed by a pain management specialist or participated in a pain management program, despite the fact that Mr Timms and other medical practitioners had recommended pain management for the specific purpose of optimising and reducing his use of medications, assisting him to cope with pain and improving his functional capacity;[22] and

(b) secondly, the applicant had unresolved problems with substance abuse, which Dr Williams intended to address after the WorkCover case was over by referring the applicant to a drug rehabilitation service.

1. At [169], the primary judge found that, although the outcome of any referral to a pain management specialist or to a drug rehabilitation service was 'obviously uncertain', both referrals might have ameliorated the applicant's incapacity for work to some extent. That finding was inherently sound. Having made that finding, his Honour went on to conclude at [171] that the applicant had failed to persuade him that, as at the date of the hearing, he was totally and permanently incapacitated for suitable employment.
2. There was no error in the primary judge's analysis. The finding at [169] was supported by the opinions of Mr Timms, Dr Kenna and Dr Slesenger, and it was not controverted by the opinion of Professor Bittar or Mr Flanc. Professor Bittar considered that the applicant's symptoms were likely to improve with appropriate treatment. Although he and Mr Flanc recommended that the applicant participate in a multidisciplinary pain management program, neither of them specifically referred to the applicant's prospects for rehabilitation in assessing his work capacity. The opinions of Mr Brownbill and Mr Drury - as well as those of Dr Williams, Mr Troy and Mr Haig - were immaterial to the finding at [169]: they could not assist his Honour in determining whether the applicant's participation in a pain management program might have ameliorated his incapacity for work.
3. The evidence did not permit the primary judge to make any finding about the extent to which the applicant's incapacity for work might have been ameliorated by his participation in a pain management or drug rehabilitation program. Thus, there was no occasion for his Honour to determine whether any of the jobs identified by Nabenet or Mr Troy constituted suitable employment.

24 As to what is required in a statement of reasons for a judicial decision, the respondent relied on a passage from the judgment of Cussen ACJ in Brittingham v Williams[23] which, as noted by Santamaria JA in Transport Accident Commission v Campbell,[24] was cited by approval by McHugh JA in Soulemezis v Dudley (Holdings) Pty Ltd,[25] to wit:

...A case may turn entirely upon a finding in relation to a single and simple question of fact, or be so conducted that the reason or reasons for the decision is or are obvious to any intelligent person; or a claim or a defence may be presented in so muddled a manner that it would be a waste of public time to give reasons; and there may be other cases where reasons are not necessary or even desirable.

The respondent emphasises the words in that passage 'or be so conducted that the reason or reasons for the decision is or are obvious to any intelligent person'.[26]

25 To support the proposition that the reasons for the decision of the County Court are obvious to any intelligent person, the respondent referred to certain passages from the transcript of the discussions in the County Court between the judge and senior counsel who then appeared for Mr Harris.

26 First, we were taken to passages which explained the reference in [171] of the judge's reasons to a concession that 'with respect to the need to prove the 40 per cent loss of earning capacity, it is "all or nothing", in that the plaintiff would need to prove that he is totally incapacitated for suitable work'. Queried about this, senior counsel for the respondent maintained before us that the concession was an appropriate one in the circumstances. There was perhaps some minor disagreement between counsel for the parties as to precisely what the concession entailed, but the applicant's (new) senior counsel did not seek to make any point about the concession. We will return to this.

27 Secondly, the respondent contended that the issue on which the case ultimately turned (in relation to pecuniary loss) was presented starkly in the following discussion between the judge and senior counsel for Mr Harris during final addresses:[27]

HIS HONOUR: ...the problem is, and I think that that consequences are probably serious in a pain and suffering context, but in terms of has he discharged an onus of proof about - there's the (g) situation about the reasonableness of rehabilitation, and I know we'll come to that, and then it seems to the extent that alcohol and drugs are affecting his motivation or whatever it is I think [defendant's counsel]'s got a point; that he's been certified fit for light work, he's got an onus to show that he's got a greater than 40 per cent loss of wage earning capacity and he says he hasn't discharged the onus. Not only does he not go to Dr Monagle, he says it doesn't really matter there are taxis and cars breaking down, that was September. What's happened since then?

APPLICANT'S COUNSEL: I'll come to each of those if I might be permitted Your Honour.

HIS HONOUR: Yes, by all means, but I think this is where the focus is for me.

28 Thirdly, the respondent submitted that the judge further exposed what he saw as the necessary focus of the case in the following discussion which occurred during a later stage of final addresses:[28]

HIS HONOUR: You might see some people say, well, let's adjourn this and go and take him kicking and screaming off to the pain management clinic. You might see that sometimes.

APPLICANT'S COUNSEL: Yes, you may.

HIS HONOUR: So, you know, it gets back to you make an election and then there's the onus. But, anyway, let's just look at [(g)] for a moment. Does not establish the loss of any capacity where the worker has or would have after rehabilitation and training [and taking] into account the worker's capacity for suitable employment after the injury. Well, let's take into account, where applicable, the reasonableness of his attempts to participate in rehabilitation or re-training, and let's say, just for the sake of our argument, that goes into negative for him of the reasons that we've been discussing, but that's not - it's not exhaustive, is it, because what you say, even after the pain management, that's management of pain, he's still going to have a physical injury and he's still going to have his educational problems.

29 The respondent summed up by saying that, in assessing the adequacy of reasons, an appellate court should take into account the way in which issues were framed at trial. Having regard to the exchanges between the judge and senior counsel referred to, no-one could be in any doubt, the respondent said, as to his Honour's reasons for rejecting Mr Harris' application.

30 It is a well-established principle that in cases where a court makes a final order, or an order that actually or practically has the result of finally disposing of the rights of the parties, reasons must be given that disclose the path of reasoning that has led to the conclusion reached.[29] To fail to do so can constitute an error of law.[30] This requirement does not correspond to a requirement for lengthy reasons.[31] However, the judgment ought to have:

(a) dealt with the substantial points raised between the parties; and

(b) revealed an intelligible path of reasoning.[32]

Put simply, a judgment must make clear to the losing party why it has lost.[33] In our view, contrary to the submissions of the respondent, this requirement was not met.

31 Let it be assumed that the need for Mr Harris to prove permanent economic loss, including in relation to the question of rehabilitation or re-training, was made apparent to him and to his counsel from the very outset.[34] Let it be further assumed that, at least by about lunch time on the second day of the hearing,[35] the judge had clearly indicated to Mr Harris' counsel that he was seriously concerned about the matters of pain management and drug addiction treatment, from the point of view of the applicant's obligations under s 134AB(19)(b) and s 134AB(38)(g). Nevertheless, the judge's statement of reasons was inadequate.

32 Unsurprisingly, the legal representatives of Mr Harris, being (so it seems) fully aware of what was required, advanced at the trial substantial evidence and arguments on their client's behalf to meet the needs and concerns just mentioned. Indeed, their efforts led to the making by the judge of some findings of fact that were relevant to (and indeed powerfully favoured) the applicant's position in relation to the pecuniary loss claim. These were matters which, in our view, the judge was obliged to deal with, or to come back to and analyse, in the specific context of the pecuniary loss claim. However, the reasons do not sufficiently indicate whether or not the judge had done so.

33 In expanding on this point, we should first explain our understanding of senior counsel's concession relating to total incapacity. The matter arose in the following way. It was common ground that the applicant's pre-injury earnings were in the order of $69,000 per annum.[36] The weekly equivalent is about $1,327 per week. Sixty per cent of that figure is approximately $800 per week (or $41,600 per annum). The defendant's counsel asserted that Mr Harris could earn $800 per week (or more) 'if he had undergone the pain management, and if he had exercised his residual capacity'.[37] He said that there were 'jobs set out in the Nabenet report which are well in excess of that'.[38] Nabenet was an organisation that provided vocational assessment services. It had been involved in seeking to identify jobs that Mr Harris might be able to do. The evidence included two Nabenet Vocational Assessment Reports, dated 16 August 2014 and 13 October 2014 respectively. In the report of 16 August 2014, five job descriptions, characterised as 'Identified Suitable Employment Options', were listed. In order of priority, they were: 1. Light Assembler; 2. Light Packer; 3. Quality Controller; 4. Machinery Operator; and 5. Forklift Driver. An 'Expected Wage' was given for each Identified Suitable Employment Option. They were, in turn, Light Assembler $800 per week, Light Packer $800 per week, Quality Controller $950 per week, Machinery Operator $1,500 per week and Forklift Driver $985 per week. In the report dated 13 October 2014, five job descriptions, characterised as 'employment options', were listed. In order of priority, they were: 1. Despatch Officer; 2. Warehouse Clerk; 3. Purchasing and Supply Clerk; 4. Dog Trainer/Animal Attendant; and 5. Safety Officer. No wage rates were specified for these latter 'options'. Hence it may confidently be assumed that counsel for the respondent was referring to the first Nabenet report in asserting that there were jobs which carried wages well in excess of $800 per week. None of the ten 'employment options' which, in total, were referred to in the two Nabenet reports was indicated to be a part-time position. Some additional kinds of jobs (without wage rates) were floated as possibilities by one of the medical practitioners referred to by the respondent, Dr Troy,[39] but it seems that none of those was a part-time job either. Indeed, it seems that there was little or no evidence directed towards establishing that Mr Harris would be able to work in some nominated position for limited hours (only).[40] It was in these circumstances that the judge put to senior counsel for Mr Harris that senior counsel was 'stuck with total incapacity for suitable work'. Senior counsel agreed. Indeed, he noted that he had already conceded this.[41] The prior exchange to which senior counsel was referring indicates that what he had had in mind was total incapacity for 'suitable employment', as defined in the Act.[42] Thus, in practical terms, the effect of the concession was that Mr Harris accepted that he needed to persuade the court that none of the jobs that had been suggested (all being full-time jobs), nor any other full-time jobs that might be suggested, amounted to, or would amount to, 'suitable employment' for him. We make no comment on the wisdom or appropriateness of the concession. We note, again, that senior counsel who appeared for Mr Harris before us (who had not appeared below) did not seek to resile from his predecessor's concession or otherwise to make any point about the concession. Accordingly, we accept the submission made by senior counsel for the respondent that the concession forms part of the framework of the issues that were before the County Court judge for determination.

34 Further, we accept that it was incumbent on the plaintiff to satisfy the judge in relation to permanence. We will assume, without deciding, that the respondent is correct in its submission that the analysis in paragraph 33 of Barwon Spinners, insofar as it relates to permanence, applies equally to the evaluation of loss of earning capacity as it does to the assessment of impairment. In any event, we accept that, by virtue of s 134AB(38)(e)(ii), the worker must show that he or she will, after the date of the hearing, continue 'permanently' to have a loss of earning capacity which will be productive of financial loss of 40 per centum or more. However, generally speaking, it will not be possible for a court to deal with such a claim by a worker in a vacuum. In the present case, at least, Mr Harris' claim that he had suffered a (sufficiently large) loss of earning capacity as at the date of the hearing and that he would continue permanently to suffer such a loss of earning capacity could not be duly assessed without assessing the extent to which he was now, and might in the future be, capable of earning income from personal exertion in 'suitable employment', as that term is defined in the Act. For the purposes of the exercise required by paragraph 33 of Barwon Spinners, Mr Harris' injury had been duly identified.[43] The consequent impairment had also been duly identified, and its consequences had been found to be 'serious', at least for pain and suffering purposes.[44] Further, the impairment had been found to be permanent.[45] And it was Mr Harris' case that no amount of rehabilitation or re-training - whether consisting of treatment for pain management or treatment for drug addiction or the undertaking of an educational course - would enable him to engage in 'suitable employment' at any time in the foreseeable future.

35 In our view, the judge was obliged to consider this claim in its entirety; to do so specifically in relation to the pecuniary loss aspect in particular; and to give a statement of reasons which revealed the extent to which his Honour had done these things. The need to have done so was strengthened by the following considerations, among others.

36 First, at [119] of the judgment, the judge said that, as at about 17 March 2014 (the date of a report by Dr Kenna to which the judge had just referred), the overall consensus of the medical practitioners on both sides was that Mr Harris was 'virtually totally incapacitated'.

37 Secondly, at [143] of the judgment, his Honour found, as indicated above, that Mr Harris had (at the date of the hearing) 'a work-related permanent aggravation of a discal injury at L5-S1 which has had the consequence of rendering the plaintiff totally incapacitated for his previous work and capable of performing, at best, suitable light work for an uncertain number of hours'.[46]

38 Thirdly, at [166] of the judgment, as is also indicated above, the judge said that, even if Mr Harris were to attend pain management as recommended by various medical practitioners 'the consequences would still be "serious" as described'.

39 Fourthly, as was noted at [145], [146], [148], and [167] of the judgment, Mr Harris was already 46 years of age; had left school at the age of 14 after completing only year 8; had thereafter worked in manual jobs only; had had no further formal training or work skilling; had not worked since developing lower back pain at work on 29 October 2012; and had been assessed by the clinical psychologist, Dr Drury, as having a pattern of cognitive and memory functioning which was within the average to low average range at best and as having several areas of relative weakness, including aspects of language processing, numeracy, visuo-spatial planning, memory and processing speed.

40 Fifthly, at [165] of the judgment, the judge found consequences that included constant back pain, the need for ongoing medication (including OxyContin, Tramal and Valium), loss of sleep and severe interference with his chosen occupation. Moreover, his Honour found that all of these consequences were 'permanent, in the sense that they are likely to persist into the foreseeable future and they can fairly be described as being "more than significant or marked", and as being "at least very considerable"'.[47]

41 Sixthly, at [168] of the judgment, the judge said that, on any view, Mr Harris' capacity to perform 'suitable work' was 'severely compromised' by virtue of the 'ongoing' pain and 'probably' his substance abuse.

42 Seventhly, Dr Drury had cogently criticised those of the job options formulated by Nabenet of which Dr Drury had been made aware; had said that he was not aware of any suitable alternative duties that could be undertaken by Mr Harris; had said that he 'entirely' agreed with Mr Brownbill that, on probability, Mr Harris would have difficulty performing 'any' work for which he was suited in an ongoing or reliable fashion; and had opined that Mr Harris would have difficulty acquiring a level of computer competency sufficient for anything more than the most basic applications in the work place.[48]

43 Eighthly, although the first Nabenet report (of 16 August 2014) listed five jobs as 'Identified Suitable Employment Options', one of them, namely 'Machinery Operator' (being the job with the highest wage rate), was a job which involved 'operating controls to excavate, break, drill, level, compact, gouge out, move, load and spread earth, rock, rubble, soil and other materials', being the very job which, according to every doctor except Dr Troy, had caused Mr Harris' injury. Every doctor, including Dr Troy, had ruled out a return to that form of employment for Mr Harris.[49] The same report stated:

As Mr Harris has no current work capacity from a physical perspective, as certified by his treating GP, Dr Williams, and the Independent Medical Examiner, Dr Kenna, New Employer Services is not recommended at this time and Nabenet will proceed with file closure with the submission of the Vocational Assessment Report. Nabenet will conduct a review on Mr Harris' file at a future date and consider a referral to NES at that time, if appropriate.

44 Ninthly, the second Nabenet report (dated 13 October 2014) did not suggest that any of the five jobs which had been listed in the first Nabenet report was suitable for Mr Harris. Rather, it listed five different jobs. One of them was 'Dog Trainer/Animal Attendant'. At the hearing before the County Court, counsel for the defendant expressly abandoned reliance on 'dog trainer/animal attendant'.[50] It is true that Dr Troy, in a medico-legal report dated 13 December 2014 obtained by the respondent, opined that Mr Harris was fit already to work in the five jobs identified in the second Nabenet report (which included dog trainer/animal attendant) and in yet another five jobs which Mr Troy himself identified, namely 'traffic controller, car park attendant, ticket collector, meeter/greeter or a guard at a warehouse or in a factory scene or the like checking vehicles in and out'. However, as mentioned above, no wage rates were given for any of these jobs. Moreover, in paragraph 14 of his report, Dr Troy implied that Mr Harris could only work part time at that stage. He said that Mr Harris had the capacity 'ultimately' for full time employment in the identified jobs 'as his work tolerance improves'.[51] However, in the part of his Honour's judgment entitled 'Compensable physical injury', immediately after referring to Dr Troy's report and the five jobs suggested by Dr Troy, the judge heavily discounted the report by saying:[52]

[140] Mr Troy, however, considers that the current condition did not relate to the date of the incident in 2012 -

"... as that is more than two years ago, it relates to the fact that he has those established changes there".[53]

[141] In this regard, Mr Troy is "on his own" compared to the other medical practitioners. Also, it appears to be at odds with his opinion that -

"... bouncing around on an excavator or the like is not within his capacity as he would have a deterioration of his degenerative changes which already exist".[54]

[142] This mechanism was significant in other practitioners considering that the disc disease was work related.

45 Tenthly, Mr Harris' treating psychologist, Dr Corran, stated in a response dated 3 December 2014 to a questionnaire sent to him by or on behalf of the respondent, that, in his view, the 'identified suitable job options' listed in the second Nabenet report were 'unrealistic' because of Mr Harris' 'chronic pain'. Further, asked whether Mr Harris could participate in retraining, Dr Corran said 'Currently no, and not in the foreseeable future'.[55] The judge made no reference to this anywhere in the judgment.

46 Eleventh, in a report completed shortly before the hearing (dated 12 January 2015), Professor Bittar had repeated the substance of what he had earlier said in a report dated 3 September 2013, namely that it was likely that, although appropriate treatment would improve Mr Harris' symptoms, Mr Harris would 'almost certainly continue to suffer from significant pain and disability into the foreseeable future'. Professor Bittar had also said, in both reports, that Mr Harris was currently incapacitated both for his pre-injury duties, and for suitable duties; and that taking into account Mr Harris' age, education, training, skills and work experience, as well as the nature and severity of his work related lumbar spine condition, he was likely to remain totally incapacitated for employment into the foreseeable future. At [87]-[92] of the judgment, in the section headed 'Compensable physical injury', the judge did note these aspects of Professor Bittar's reports and did note also that, in the later report, Professor Bittar had opined that Mr Harris' incapacity was 'permanent'. However, the judge did not return to anything said by Professor Bittar when his Honour came to determine the pecuniary loss claim. Moreover, his Honour did not anywhere in the judgment record that, in the report of 12 January 2015, Professor Bittar had said:[56]

In my opinion, there is zero chance of him regaining capacity to undertake work which has a significant physical or manual component...

47 Twelfth, in final submissions, senior counsel then appearing for the applicant submitted that the pain management programs recommended for Mr Harris did not constitute 'rehabilitation', much less 're-training', within the meaning of the Act, in that they were principally designed to enable injured persons to manage their lives better with ongoing pain, rather than to repair the capacity for work of injured workers, especially in the case of persons who were formerly manual workers with no administrative skills or experience, such as Mr Harris.[57]

48 Of course, there was some evidence pointing in the opposite direction and it is true that Mr Harris carried the burden of proof, including in relation to the question of rehabilitation and retraining. However, there were substantial factual issues raised between the parties as to whether Mr Harris' loss of earning capacity was permanent. The judge was obliged to deal with and assess the evidence and the arguments put forward on both sides with respect to those issues. He was obliged to do so realistically, by reference to Mr Harris' physical and mental limitations and by reference to what might or might not amount to 'suitable employment' for Mr Harris in the foreseeable future. Further, the judge was required to provide reasons which revealed an intelligible path of reasoning in this regard.

49 This is not a case of the kind referred to in Brittingham v Williams[58] where the reason or reasons for the decision is or are obvious to any intelligent person. Rather, in the particular circumstances of this case, it was incumbent on the judge to demonstrate by his statement of reasons that he had considered in detail what, if any, specific job or jobs Mr Harris might, in the foreseeable future, be able to do[59] on a regular and consistent basis, allowing for such improvement as might be thought likely or possible after a pain management program and/or a drug treatment program and/or the undertaking of vocational education. It was insufficient that, in the relevant section of the reasons, the judge said only (in this regard) that several medical practitioners had commented on the need for Mr Harris to attend a pain management specialist in order to ameliorate his 'position'; that all he (the judge) could infer was that referrals for drug treatment and for pain management 'may ameliorate the plaintiff's capacity for work to some extent';[60] and that there was 'evidence' before him that the plaintiff was capable of a wide range of alternative light duties.[61] Given the evidence, the arguments (on both sides) and the findings in this case, we consider that his Honour needed to identify at least one particular full time job which could be regarded as 'suitable employment' for Mr Harris and which Mr Harris had failed to show would be beyond him for the foreseeable future.[62] The reasons that the judge gave do not identify any such job.

50 In all the circumstances, the statement of reasons was inadequate.[63]

51 For these reasons, the applicant must succeed in this application for leave to appeal and in his proposed appeal.

1. The application for leave to appeal is granted.

2. The appeal is treated as having been heard instanter and allowed.

3. The order made by the County Court on 16 June 2015 is set aside insofar as it relates to leave to proceed for pecuniary loss damages.

4. The applicant's application under s 134AB(16)(b) of the Accident Compensation Act 1985, insofar as it relates to leave to proceed for pecuniary loss damages, is remitted to the County Court for rehearing by a different judge.

53 We will hear the parties on the question of costs.

[1] Harris v DJD Earthmoving Pty Ltd [2015] VCC 775 ('Reasons'). The medium neutral citation printed on the Reasons for Judgment of the County Court is wrongly stated as ' [2014] VCC 775'.

[2] In support the applicant cited Dressing v Porter [2006] VSCA 215; Rodda v Transport Accident Commission [2008] VSCA 276 ('Rodda'); and Transport Accident Commission v Campbell (2015) 69 MVR 410 ('Campbell').

[4] Footnotes omitted. Italics in original.

[6] Footnotes omitted. Italics in original.

[7] [2006] VSCA 215 [26] (Ashley JA, with whom Callaway and Buchanan JJA agreed). The applicant also cited Rodda [2008] VSCA 276 and Campbell (2015) 69 MVR 410, especially at [80].

[8] Written case for the respondent dated 11 August 2015 [24].

[9] Section 134AB(38)(e) is set out below.

[10] Transcript of Proceedings, Harris v DJD Earthmoving Pty Ltd (Court of Appeal, Warren CJ and Cavanough AJA, 15 October 2015) ('Transcript') 23-24.

[14] Which was said to be a provision reflecting, substantially, s 140 of the Evidence Act 2008: Transcript 26.

[17] [2005] VSCA 33; (2005) 14 VR 622 ('Barwon Spinners').

[20] Reasons [16], noted at Transcript 51.

[21] These paragraphs of the written case were originally directed, principally, to grounds of appeal that have now been abandoned. However, they were also incorporated by reference in the part of the written case directed to the inadequate reasons ground ([23]-[24]). These paragraphs were, in effect, adopted in oral submissions (at Transcript 35).

[22] References are here given to certain reports of Mr Timms, Dr Rathnayake, Dr Slesenger and Mr Flanc.

[23] [1932] VicLawRp 35; [1932] VLR 237, 239.

[24] (2015) 69 MVR 410 [87]. Campbell is a case on which the applicant relies.

[25] (1987) 10 NSWLR 247, 279-280.

[27] Transcript of Proceedings, Harris v DJD Earthmoving Pty Ltd (County Court, [2015] VCC 775, Judge Brookes, 17-18 February 2015) ('County Court transcript') 149:14 - 150:1.

[28] County Court transcript 163:17 - 164:4.

[29] See, eg, Donovan v Edwards [1922] ArgusLawRp 2; [1922] VLR 87; Brittingham v Williams [1932] VicLawRp 35; [1932] VLR 237, 239; Pettitt v Dunkley [1971] 1 NSWLR 376, 380-382; Rodda [2008] VSCA 276 [98]; Dressing v Porter [2006] VSCA 215 [26]; Assad v Eliana Construction & Developing Group Pty Ltd [2015] VSCA 53 [30]-[33].

[30] Rodda [2008] VSCA 276 [98].

[31] R & P Boland Nominees Pty Ltd v Hobbs [2013] VSCA 66 [64].

[32] Alsco Pty Ltd v Mircevic [2013] VSCA 229, [48] (Osborn JA, with whom Warren CJ and Robson AJA agreed), citing Hunter v Transport Accident Commission [2005] VSCA 1; (2005) 43 MVR 130 and Franklin v Ubaldi Foods Pty Ltd [2005] VSCA 317.

[33] Dressing v Porter [2006] VSCA 215 [26].

[34] See, in addition to the passages of the County Court transcript relied on by the respondent, the passage from the opening address of counsel for the then defendant at pages 10-14 of that transcript.

[39] Report dated 13 December 2014: AB 226.

[42] County Court transcript 117, especially at line 30.

[44] Reasons [165]. See also [166].

[48] Report dated 23 January 2015: AB 143-144.

[49] See further below in relation to Dr Troy's opinions.

[51] Report dated 13 December 2014: AB 226-227.

[55] Questionnaire dated 4 December 2014: AB 251-253.

[56] Report dated 12 January 2015: AB 85.

[58] [1932] VicLawRp 35; [1932] VLR 237. Cf also Ali v AAI Ltd (2016) 75 MVR 502 [49]-[51], [55] (Basten JA, with whom Leeming and Simpson JA agreed).

[59] We have used the expression 'be able to do' (as distinct from, say, 'be able to get') advisedly. During the oral hearing, the Court raised with senior counsel for the respondent (at Transcript 52-53) whether 'employability' was relevant, having regard to what was said in Barwon Spinners, especially at [2005] VSCA 33; (2005) 14 VR 622, 652 [74]. Senior counsel's response, in substance, was that the test was one of physical capacity, not employability: Transcript 53. In his reply, senior counsel for the applicant mentioned 'employability' in passing (Transcript 59), but did not develop an argument against, or otherwise take issue with, the respondent's position in that respect. Since the hearing, this Court (Ashley and Kaye JJA, Osborn JA agreeing) has decided Richter v Driscoll [2016] VSCA 142. That case related to a claim for statutory benefits under the Act in respect of a worker said to have 'no current work capacity' (as defined), a statutory concept that involved the same definition of 'suitable employment' as applied in the present case. In Richter v Driscoll, at [106], their Honours held that the definition of 'suitable employment' was such that the medical panel dealing with the matter in that case was 'required to consider whether the entirety of the applicant's relevant personal circumstances - that is, her injury-caused incapacity and other relevant personal circumstances which we have discussed - meant that she would likely be unsuccessful in obtaining employment because she had nothing "merchantable" to sell'. Further, there are indications in Richter v Driscoll, especially at [80], that their Honours did not consider that Barwon Spinners required that a different approach be taken to the question of 'suitable employment' in serious injury applications. However, for the avoidance of doubt, we confirm that, in the present case, in fairness to the respondent, we have assumed the correctness of the position advanced by the respondent (and not squarely contradicted by the applicant), namely that the test is one of physical capacity, not employability, in serious injury applications. However, the outcome would be the same in the matter before us regardless of the proper approach to be taken to the questions of statutory construction involved. Accordingly, it has not been necessary for us to form any view for ourselves on those questions, and we have not done so.

[62] Cf Giankos v SPC Ardmona Operations Ltd (2011) 34 VR 120, 144-145 [115]-[117].

[63] As mentioned above, Richter v Driscoll [2016] VSCA 142 was decided after the hearing before us in the present case. In Richter v Driscoll, the Court of Appeal held that the statement of reasons given by the medical panel was 'by no means adequate' in its treatment of an issue relating to the definition in the Act of 'suitable employment': [2016] VSCA 142 [123]; cf Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; (2013) 252 CLR 480. Nothing in Richter v Driscoll could assist the respondent. However, for the avoidance of doubt, we indicate that, in fairness to the respondent, we have not treated anything said in Richter v Driscoll relating to the adequacy or otherwise of the statement of reasons given by the medical panel in that case to be applicable to our consideration of the present case. The outcome of the matter before us would be the same whether or not we were to treat what was said in Richter v Driscoll as being of relevance to the present case.