J & H Timbers Pty Ltd v Nelson

[1972] HCA 12

High Court of Australia|1972-07-01|Before: Gibbs JJ

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Court

High Court of Australia

Decision date

1972-07-01

Before

Gibbs JJ

Source

Original judgment source is linked above.

Judgment (60 paragraphs)

[1]

The application of the ordinary principles relating to the determination of disputed questions of fact by judicial tribunals requires the conclusion that if a claim for compensation be rejected by the Commissioner or his delegate the onus of proving the necessary facts to entitle the applicant to what is virtually an award of compensation will be upon the claimant in later proceedings before the County Court. [3] The employee claimed to retain the award of compensation not as for total incapacity but as for partial incapacity. Accordingly the Court held that the overturning of the Commissioner's determination to the extent of establishing partial incapacity was upon the appellant employee. Bryer v. Metropolitan Water Sewerage and Drainage Board [1] was not cited or dealt with by the Court, no doubt because it was not relevant to the matter which was before the Court. In my opinion the decision of the Court in Phillips v. The Commonwealth [2] does not touch upon the principles which were dealt with by Jordan C.J. in Bryer v. Metropolitan Water Sewerage and Drainage Board [1] . Consequently I find no necessity further to discuss Phillips v. The Commonwealth [2] with which, if I may say so, with respect, I feel some difficulty which does not need to be resolved in order to dispose of the present case. I should add that I find nothing in Thompson v. Armstrong and Royse Pty. Ltd. [3] which is inconsistent with the views I have expressed. 1. (1964) 110 C.L.R. 347. 2. (1964) 110 C.L.R., at p. 350. 3. (1939) 39 S.R. (N.S.W.) 321. 4. (1964) 110 C.L.R. 347. 5. (1939) 39 S.R. (N.S.W.) 321. 6. (1964) 110 C.L.R. 347. 7. (1950) 81 C.L.R. 585.

[2]

[15]

Under s. 11 (1) (a) the normal procedure in looking to an award of partial incapacity is to find the two sums, to the difference between which one must have regard in approaching the question of an apt award. In the present case it appears to me in relation to the matter of average weekly earnings after the injury that I should attend to what the applicant has been able to earn in some suitable employment or business and desist from the effort to reconstruct what in fact he has earned. That is rendered all the more necessary in some respects by his absence from work for the short periods mentioned for other causes. In relation to the question of the probable weekly earnings in terms of s. 11 (1), I have considered approaching the matter to endeavour to fix some specific figure as representing that amount. This is the quite exceptional case in which I feel driven back to approach the matter from the different point of view of finding the difference between the two amounts without finding what those amounts really are. It appears to me that in the circumstances of this case it is easier for me to do justice between the parties by having regard to the effect of the disability from time to time upon the earning power of a man in the position of the applicant than it is for me to arrive at that difference by first ascertaining separately the amounts, the finding of the difference between which is the purpose of the exercise. Having said this, his Honour continued: I make an award for the applicant for $23.50 per week from 20th February 1967 to 1st June 1967. This part of the award was for total incapacity and is not in question. Turning to the question of compensation for partial incapacity, his Honour then said: Having regard to my view of the general course of the applicant's recovery in the orthopaedic sense and taking the period from 2nd June 1967 to date it appears to me that over that period the probable extent of the difference referred to in s. 11 (1) (a) is - and it is impossible to be dogmatic - is of the order of about $15 per week. I make an award for the applicant under s. 11 (1) (a) for $15 per week from 2nd June 1967 to date and continuing.

[33]

The problem of the case is the difficulty of applying the words of s. 11 (1) (a) when the worker is an independent contractor performing his contract by the use of his own equipment. The section puts an upper limit to the amount of the weekly payment that can be awarded in a case of partial incapacity. Apart from postulating an upper limit it leaves it to the Commission to award a weekly amount that "shall bear such relation to" the upper limit "as under the circumstances of the case may appear proper". The upper limit, as I have called it, is the difference between two amounts of earnings. The former is expressed as an amount that was earned before the injury "as a worker". The latter is expressed in more general terms, by reference to actual earnings or an ability to earn in some suitable employment. It obviously does not follow, as an abstract proposition, that a predicated remainder postulates a particular initial sum and a particular subtrahend. An amount as the upper limit that s. 11 (1) (a) sets can be stated without stating the two amounts used to produce it. His Honour who tried the case in the Commission abandoned any attempt to determine with precision what were the earnings of the respondent before his injury, as the records of his affairs did not enable his weekly gains from his contract to haul logs to the appellant's mill to be segregated from other gains. I think that his Honour was right in not attempting to compute this. But I say so not so much because the computation was difficult or impossible by reason of insufficient data as because it was in my opinion irrelevant and unnecessary. The Act is concerned with compensation for the total or partial incapacity of a worker - that is, the destruction or diminution of his earning capacity measured by his earnings "as a worker". The question is not the same as is involved in assessing "economic loss" in an action for damages for personal injuries. The earning capacity of a man as a worker is measured by the remuneration that is the fruit of his labour, his wages or their equivalent. It is not to be measured by the profits he derives by embarking his capital in a business or by his usual capital equipment in earning money. In the present case the respondent carried on a business on his own account, using his own truck and other equipment. To assess his profits for a given period it, would be necessary to set against receipts all actual and notional outgoings of the undertaking, including all those relevant to the maintenance of the equipment. These might if the equipment were the contractor's property include an allowance for its depreciation; if it were not owned by him, outgoings for its hire or hire purchase. But to my mind the respondent's profits and gains from his business before he was injured were irrelevant. He was deemed to be a worker in another man's business. In this artificial and notional situation, "the weekly amount which he would probably have been earning as a worker" was, for the purposes of the Act, such sum as notionally represented the value of his wage for so much of his time as he devoted to the performance of his contract with the appellant. In the circumstances I see no reason why his Honour was precluded from using his own knowledge of industrial conditions and wages, and concluding therefrom that the diminution of the respondent's earnings resulting from his partial incapacity as assessed by a medical board amounted to $15 a week and making an award accordingly. I think that what was said by the Supreme Court in Kemp v. Darling Island Stevedoring & Lighterage Co. Ltd. [1] is as applicable in relation to pre-injury earnings as to post-injury earnings and to the difference.

[36]

I have had the advantage of reading the judgment prepared by my brother Menzies. I agree with it and wish only to add a few words. I have no doubt that in a case in which an employer seeks to have an award for weekly payments ended or diminished under s. 60 of the Act the onus lies on him to establish all the facts necessary to justify such a course being taken by the Commission. And I would point out that in each of the two cases, namely, Proctor & Sons v. Robinson [2] and Cardiff Corporation v. Hall [3] , upon which Jordan C.J. relied in Bryer's Case [1] for the proposition that "the burden of proving that the incapacity established by the worker is partial only, and, if so, of proving the other facts necessary to involve a limitation of payments under s. 11 is upon the employer" the Court was dealing with an application made by the employer to review the amount of weekly payments payable under an existing award. Where, however, a worker claims that an award should be made in his favour on the ground that he is partially incapacitated it seems to me that it is a necessary part of his case to establish the facts necessary to enable the Commission to determine what is the "difference" to which s. 11 (1) (a) of the Act refers, namely, "the difference between the weekly amount which the worker would probably have been earning as a worker but for the injury and had he continued to be employed in the same or comparable employment, and the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury", so that it may proceed to fix the appropriate sum to be awarded. This, as my brother Menzies has pointed out, accords with what Latham C.J. said in Thompson v. Armstrong & Royse Pty. Ltd. [1] , and with the decision of this Court in Phillips v. The Commonwealth [2] . With all respect to those who sat in Bryer's Case [3] I am of opinion that what Latham C.J. said in Thompson's Case [4] and what this Court decided in Phillips' Case [2] should be followed and that this appeal should therefore be allowed.

[44]

In relation to the question of the probable weekly earnings in terms of s. 11 (1), I have considered approaching the matter to endeavour to fix some specific figure as representing that amount. This is the quite exceptional case in which I feel driven back to approach the matter from the different point of view of finding the difference between the two amounts without finding what those amounts really are. It appears to me that in the circumstances of this case it is easier for me to do justice between the parties by having regard to the effect of the disability from time to time upon the earning power of a man in the position of the applicant than it is for me to arrive at that difference by first ascertaining separately the amounts, the finding of the difference between which is the purpose of the exercise. (Cf. Hamilton v. Shelton Co. Ltd. [1] ). It is not quite clear for what purpose the learned judge cited Hamilton v. Shelton Co. Ltd. [2] , which does not seem to bear on the question which he had been discussing at that point of his judgment, but it may have been for the proposition, enunciated by Atkin L.J., [3] , that in deciding what a worker is able to earn after the accident the judge "is entitled to take into account his own knowledge of the labour conditions in the district". The learned judge went on to say that there did not appear to him to be any reason to award anything less than the actual amount of the difference. He then proceeded to make an award of $23.50 per week in respect of total incapacity and said that: having regard to my view of the general course of the applicant's recovery in the orthopaedic sense and taking the period from 2nd June 1967 to date it appears to me that over that period the probable extent of the difference referred to in s. 11 (1) (a) is - and it is impossible to be dogmatic - is of the order of about $15 per week. The formal order in which his decision is recorded contains a number of findings, including a finding (1 (d)) that "the applicant's average weekly earnings not less than twenty-three dollars fifty cents plus one-third". No doubt this was intended to be a finding as to the respondent's average weekly earnings for the period during which he was deemed to be in the employment of the appellant and, if upheld, it supports the award of $23.50 made for total incapacity under s. 9 of the Act. I have already said that this part of the award is not challenged. 1. (1926) 19 B.W.C.C. 475, at pp. 495-496. 2. (1926) 19 B.W.C.C. 475. 3. (1926) 19 B.W.C.C., at p. 495.

[46]

The burden of proof lies upon the worker to establish (1) that he has received a personal injury arising out of and in the course of his employment, and (2) that as a result he has sustained some incapacity for work, i.e. incapacity for obtaining or performing work of the kind in which he was employed at the time of the accident, or of earning full wages, to the same extent as he could before the injury, assuming such work to be available: Joy v. Morton [3] ; Jones v. A. & E. Pettifer Ltd. [4] . When the worker establishes this, he is prima facie entitled to the compensation provided for by s. 9: Moore v. Barkey [5] ; McCann v. Scottish Co-operative Laundry [6] , unless it appears that the incapacity is partial only, and that it is necessary to limit the weekly payments in the manner provided for by s. 11. The burden of proving that the incapacity established by the worker is partial only, and, if so, of proving the other facts necessary to involve a limitation of payments under s. 11 is upon the employer: Proctor & Sons v. Robinson [7] ; Cardiff Corporation v. Hall [8] . This burden may be discharged by material elicited from the worker or his witnesses or by evidence called on behalf of the employer. But it is for the employer to supply the necessary material to the extent to which it may not be supplied by the evidence given on behalf of the worker. Their Honours held that there is no difference in respect of the onus of proof between an ordinary worker and a person who is deemed to be a worker by the provisions of s. 6 (5) (a) of the Act, that accordingly the appellant bore the burden of proving the facts necessary to limit the amount of compensation under s. 11 (1) (a) and that this onus had not been discharged. They added that the Commission was entitled to use its own experience and knowledge in fixing the amount of compensation. 1. (1970) 92 W.N. (N.S.W.), at pp. 634-635. 2. (1939) 39 S.R. (N.S.W.) 321, at pp. 331-332. 3. (1922) 15 B.W.C.C. 33. 4. (1929) 22 B.W.C.C. 405. 5. [1923] A.C. 790, at p. 795. 6. [1936] 1 All E.R. 475. 7. [1911] 1 K.B. 1004. 8. [1911] 1 K.B. 1009.

[50]

The two decisions which his Honour cited in support of this proposition were both cases in which an employer applied for a reduction of the amount of compensation which had been awarded to a workman on the basis of total incapacity, and it was held that the employer, who contended that the incapacity was no longer total, bore the onus of proving the case which he put forward: see Proctor & Sons v. Robinson [2] and Cardiff Corporation v. Hall [3] . These cases therefore are not authority for the wide statement made by Jordan C.J. Moreover, it is contrary to principle to say that a party who is opposing an award should bear the onus of establishing facts which would show that no award should be made, or that less than total compensation should be awarded. It is true that the right to compensation which is given to a worker by s. 7 of the Act is not cut down by ss. 9 and 11 which prescribe the amount of compensation payable (cf. McCann v. Scottish Co-operative Laundry Association Ltd. [4] ), and that a worker who establishes that he has received a personal injury arising out of or in the course of his employment, and that as a result he has sustained some incapacity for work, is in general entitled to receive at least some worker's compensation from his employer (Kandos Coomber Colliery Co. Ltd. v. Bromwich [1] ). However, a worker who has made out those facts may not be entitled at any particular time to payment of compensation, since his right may be dormant (Thompson v. Armstrong & Royse Pty. Ltd. [2] ), or suspended (Portland Colliery Co. Ltd. v. Murray [3] ). Clearly, the Workers' Compensation Commission may not make an award of an amount which exceeds the limits set by ss. 9 and 11. If it does not appear to the Commission that a particular weekly payment will not exceed those limits, the Commission must refrain from awarding that payment, and the worker who is contending that it should be awarded must fail. In effect therefore the Act imposes on the workman the burden of showing that the amount for which he contends may lawfully be awarded. On behalf of the respondent, it was submitted that s. 11 (1) (a) imposes a ceiling or limit on the amount of compensation that may be awarded under ss. 7 and 9, and that this affords a reason for holding that the onus of showing that this additional barrier would be broken by a particular award lies on the employer. I do not accept this submission. As was said in Commissioner for Railways (N.S.W.) v. Agalianos [4] :

[56]

In a case arising under s. 6 (5) (a), where a contractor is deemed to be a worker, and both before and after the injury the claimant was not in receipt of wages but was conducting his own business, it seems to me that it will be most unlikely that the Commission will have judicial knowledge of the amount the claimant would probably have earned but for the injury, or of the amount he is earning after the injury. The Commission can use its general knowledge of the labour market, but it is not expected to have, or if it has it cannot use, particular knowledge of the facts of an individual case (cf. Reynolds v. Llanelly Associated Tinplate Co., Ltd. [4] ). In the present case the learned primary judge, in applying s. 11 (1) (a), had to find the difference between the amounts referred to in that provision. The word "earning" which is there twice used does not refer, in a case arising under s. 6 (5) (a), to the gross amount which would probably have been received, or is received, by the person who is deemed to be a worker, and out of which payments would have to be made for wages, materials and the provision of plant, but to the net amount, which represents the remuneration for the labour of the person deemed to be a worker. It was said in Jones v. International Anthracite Collieries Ltd. [1] , that in ascertaining "average weekly earnings" for the purpose of a provision that corresponded to s. 11 (1) (a) in its original form, "what one has to arrive at is what was the man really receiving for remuneration. In other words, what was the reward for his labour". In determining the difference between the two amounts mentioned in the present section, the one hypothetical and the other factual (Australian Iron & Steel Pty. Ltd. v. Elliott [2] ,) one is in my opinion concerned with the net remuneration of the person deemed to be a worker, and not with his gross takings. It is obvious that the Commission cannot have general knowledge as to the net amount which an individual contractor would probably have earned for his labour had it not been for his injury, or of the net amount he has actually earned since his injury, since so much depends upon the manner in which he conducts his business, his efficiency, the extent to which he employs workmen and uses plant, and the amount of overhead expenses he has to meet. Such matters must depend on the particular evidence in an individual case, and not on general knowledge.

[59]

The second ground urged by the appellant was that in the circumstances of the case it was not possible for the learned primary judge to find the difference between the two amounts mentioned in s. 11 (1) (a) if he was unable to find the amounts themselves. I agree with this contention. No doubt there may be exceptional cases in which such a finding would be possible, e.g., where there is evidence that a worker suffering from the incapacity in question would earn at a weekly rate which is less by a given sum than the rate paid to an ordinary worker. The present, however, is not a case of that kind. It is true that the determination of the difference mentioned in the subsection involves matters of estimation and not merely a mathematical calculation. I am prepared to agree also that it is not necessary that the Commission should make a formal finding of the two amounts where to do so would be "an empty formality" (as Jordan C.J. said in Bryer v. Metropolitan Water Sewerage and Drainage Board, [1] ). It is however one thing to say that the Commission need not make formal findings of the two amounts; it is quite another to say that it can find the difference between the amounts if it cannot find the amounts themselves and there is no direct evidence to show what the difference is. As to the first amount - the hypothetical weekly earnings - the learned judge said no more than that he had considered trying to fix it. As to the second amount, the learned judge rejected a consideration of the actual post-injury earnings. In this, in my opinion, he was wrong. If the workman is in fact earning after the injury, the amount of his actual earnings cannot be disregarded; it may be shown that his actual earnings are not a true guide, either because he could have obtained better employment, or, perhaps, because they were inflated by the charity of some other benevolent employer, but as a general rule if a man is earning a particular sum it is impossible to say that he is able to earn only a lesser sum. Although the Commission is very much at large in determining the difference mentioned in s. 11 (1) (a), it is required to act judicially and not merely to guess at a figure. In the present case I consider that the learned judge could not have arrived at the amount of the difference for the purposes of s. 11 (1) (a) without first making up his mind as to the two amounts, and that his failure to do so amounted to error of law. Whether, if he had applied his mind properly to the questions raised by s. 11 (1) (a), there would have been evidence to enable him to make a determination does not appear, as I have already said. In the circumstances, therefore, it seems to me that although the appeal should be allowed the proper course would be to remit the matter to the Commission for further consideration.