JEFFERIES v ROADS AND TRAFFIC AUTHORITY OF NSW [1997] NSWCA 167

1. The Master was in error because the medical evidence revealed that the later injuries stemmed from the May 1992 incident and should be taken to be the cause of them.

2. The Master's decision was internally inconsistent - the appellant was given credit for 100% of the workers' compensation payments yet the Master found that only some of the injury stemmed from the May 1992 incident.

In the light of these errors the Master's assessment of damages for non-economic loss, loss of future earning capacity and a claim for possible future surgery needs to be re-assessed.

1. The Master's assessment of damages for non-economic loss at 35% of a most extreme case should be increased to 45%.

2. Damages for future economic loss should be increased from $75,000 to $120,000.

3. $2,000 should be allowed for the possibility of future surgery.

Mason P Master Malpass found the respondent/defendant liable in negligence for damages suffered by the appellant, its employee, in a work place accident that occurred on 26 May 1992. Judgment was entered for the plaintiff in the sum of $183,423.96 plus costs. The appeal challenges the adequacy of the damages in three respects.

The appellant was born in 1968. He left school having obtained the School Certificate. He commenced employment with the respondent in January 1986. Initially he was an apprentice, studying part-time at Sydney Technical College. By 1990 he had completed his apprenticeship and he embarked upon fulltime employment as a carpenter.

On 26 May 1992 he was injured while working as a member of a gang working on the Swan Hill bridge. The Master found negligence by the respondent. At the end of the day the case relates to the damages flowing from this single breach of duty. The appellant's case was that the significant and permanent disability established in the evidence was the result of the May 1992 incident. The respondent's case, in essence, was that some of the injury, pain and disability established in the evidence was the consequence of one or both of two later incidents which, though they occurred in the course of the appellant's continuing employment, were not the result of any negligence on the part of the respondent.

The two later incidents of which there was evidence occurred on 7 August 1992 at Swan Hill ("the August 1992 incident") and on 18 April 1994 at Robinvale ("the April 1994 incident"). It will be necessary to relate the circumstances of these incidents later in the judgment.

The respondent's principal submission accepted that the August 1992 incident had aggravated the appellant's back problems and made his right leg condition worse. It was, however, submitted that the Master had correctly found that not all of the subsequent loss and injury could be laid at the door of the May 1992 incident even though it may have increased the appellant's vulnerability: cf Neall v Watson.!

While disputing this proposition, the appellant submitted in the alternative that the damages were inadequate, even if only partly attributable to the tortious injury. The May 1992 incident occurred when the appellant was a member of a gang engaged in the erection of scaffolding on the Swan Hill bridge. The task involved lifting of oregon beams (stringers) from a boat on the river below the bridge. Two members of the gang were involved in hauling the stringers up to the bridge, each being positioned on opposite sides of the bridge. The appellant was one of those persons. The task required the appellant to stand on the kerb hard up against the handrail of the bridge with his legs in a straight position. While lifting a stringer he experienced sharp pain in his lower back and right side. He gave evidence that the pain continued during that day and over the successive months as he continued his heavy work in the same gang. He did not seek medical treatment, but went to an acupuncturist in Swan Hill and a chiropractor in Deniliquin. Nevertheless, his back pain got worse over those months.

On 7 August 1992 he was laying sheeting. This involved lifting. He experienced bad sciatica down his right leg. He had been experiencing similar trouble between May and August 1992 but, when laying the sheeting "it just got a lot worse, the pain" (AB46). He consulted a general practitioner the next day as a consequence of which he was referred for x-rays and specialist treatment. The diagnosis was the appellant had suffered a prolapsed disc at the L4-5 level. In September he had a lumbar myelogram and a decompressed laminectomy on the L4-5 disc. He was off work until 11 January 1993, returning to work repairing bridges, but on light duties.

The back pain continued, partially relieved by anti-inflammatory drugs. The sciatic pain disappeared in the short term after the operation but kept coming back, off and on. The appellant kept taking pills and he lay down a lot. He eventually decided that he was unable to continue working on the bridge gang. He described the pain as "a constant ache, severe" (AB50). He wrote to his employer seeking a transfer to an alternative position.

The incident on 18 April 1994 occurred at Robinvale. As the appellant was walking down an embankment he slipped and fell. He landed on his bottom and back and this caused immediate major pain in his right leg and across his lower back. He described the fall as having made earlier pain "a lot worse" (AB53). He was driven home to Deniliquin and sought further medical attention. He was off work until 12 June 1994. He received physiotherapy and continued taking the anti-inflammatory pills. When he returned to work he was unable to carry out bridge work. His condition was worse than it had been before the April 1994 incident. Mr Deacon, his orthopaedic surgeon told him that he could not continue

URJ JEFFERIES v ROADS AND TRAFFIC AUTHORITY OF NSW (Mason P) 3

doing bridge work. The back and leg pain was more intense. He was placed on office duties at the Deniliquin District office and, since that time, he has worked as a technical assistant.

Following a further incident in June 1995 that occurred whilst sitting on the toilet the appellant sought medical treatment. He underwent CT and MRI scans. Surgery was proposed for June 1995, but it did not take place because of a dispute with WorkCover. The appellant was off work between 5 June and 11 July 1995. By November 1995 the symptoms from the incident in June 1995 had settled quite significantly. It was common ground at trial that the June 1995 incident had had no long-lasting effect.

The evidence as to the appellant's present condition (the trial being in May 1997) was that back pain continues, ranging from severe to mild. It extends down each leg. Stiffness builds up when walking over 1500 metres or so. Likewise with sitting over a prolonged period, including while driving. At times the appellant wears a brace. Sexual intercourse causes pain. The appellant continues to take anti-inflammatory drugs. He has physiotherapy three times a week and has continued on occasions to have acupuncture. The condition has caused bouts of depression, attested to by the appellant's mother. The current medical prognosis is that the appellant remains permanently unfit for heavy or carpentry work. In November 1995 Dr Caspary an orthopaedic surgeon assessed a permanent impairment of 25 per cent of the back and a permanent loss of function of 10 per cent of the right leg stemming from the various incidents. Dr Seaton also confirms that the condition is permanent in regard to back impairment and right sided sciatica.

A number of matters were common ground at trial. As to quantum, there was agreement as to nett wage loss to date of $34,889, current nett wage loss of $75 per week, past hospital and medical expenses of $36,551.71, and the Fox v Wood component of $5,437.18. It was also agreed that the gross workers compensation payments made to the appellant on account of wages totalled $21,748.72.

The three items of damages which were in dispute at trial, and remain in dispute, were the allowances for non-economic loss and loss of future earning capacity, and the rejection of a claim for $10,000 in relation to possible future surgery.

It was common ground at trial that the appellant had passed the threshold for the recovery of damages for non-economic loss (see Workers Compensation Act 1987, s151G). At trial the appellant sought an assessment based on 70 per cent of the maximum amount, whereas the respondent contended for a figure in the range of 25 to 45 per cent. The Master awarded damages based on an assessment of 35 per cent of the maximum.

As previously indicated it was common ground at trial that the current nett wage loss stemming from the tortious injury was $75 per week. The appellant claimed the sum of $208,879 for loss of future earning capacity. The Master assessed this loss in the sum of $75,000, taking into account a claim for loss of superannuation. In doing so he found (as was common ground) that the appellant had permanently lost the capacity to do heavy bridge work. He also found that the appellant had continuing problems and was at a disadvantage in the competitive labour market. It was noted that the appellant had prospects of being appointed by the respondent to an alternative job which had been advertised but that he may be unemployed for some considerable time. The Master found the appellant to be well-motivated with an aptitude for acquiring skills.

The claim for the cost of future surgery was rejected. The Master said:

The prospects of the plaintiff coming to such surgery are not of a high order. I am not satisfied that the need for any such surgery can be related to the May 1992 incident."

An initial difficulty with the judgment below is that of relating the findings about past non economic and future economic loss to the disputed issue as to the relevance of the second (August 1992) and third (April 1994) incidents. The respondent is certainly correct in the submission that the learned Master was aware of the need to assess the materiality to the appellant's present condition of what he described as the "three incidents of significance". Unfortunately his conclusions on the critical issue are difficult to discern. The Master was correct to describe his task as "'an unenviable one", all the more so because the medical evidence offered comparatively little assistance in the task of unravelling the causative effect of the second and third incidents. The trial took place at Wagga Wagga. For understandable reasons none of the medical witnesses whose reports were tendered were called to give oral evidence or for cross-examination on their reports.

After describing the three incidents and referring to their consequences for the appellant, the Master addressed some of the medical evidence. In a critical passage in his judgment he said:

"... it seems to me that the May 1992 incident caused him to suffer back pain and some right leg problems and that the August 1992 incident aggravated his back problems and made his right leg condition much worse. Also, he developed left leg pain. Following this incident, he was off work for some months and had medical treatment (including surgery). Prior to the August 1992 incident, he had not had any need for medical treatment. He had not had any time off from work. He was able to continue with the heavy bridge maintenance duties (probably with some difficulty). It seems to me that the plaintiff's condition was further aggravated by the April 1994 incident.

The evidence reveals a state of affairs where there are three incidents of significance. Each of them is material to his condition. The problems sustained in the May 1992 incident were adversely affected by each of the two subsequent incidents. It may have increased his vulnerability to injury from heavy work (GIO v Warwick (Court of Appeal, unreported, 23 November 1993))."

There is an initial difficulty with the judgment. The passage quoted indicates that the Master regarded the second and third incidents, particularly that occurring in August 1992, as aggravating the problems with the appellant's back and right leg that stemmed from the tortious incident of May 1992. This means that he saw some at least of the injury and disability that continued after August 1992 as stemming from the May 1992 incident. Yet he appears to have given the defendant credit for 100 per cent of the workers' compensation payments it had made on account of treatment and hospital expenses and weekly payments. Since s151B of the Workers Compensation Act 1987 limits the deduction from damages to the compensation "paid in respect of the injury concerned" (ie that for which damages are recovered), the appellant is correct in suggesting some internal inconsistency in the learned Master's reasoning.

The second difficulty with the judgment is that it lacks findings explaining the precise link between the Master's assessment as to causal impact of the May 1992 incident and the damages that were awarded. The reader is left speculating how much of the assessment with respect to non-economic loss and loss of future earning capacity is the product of attributing part only of the injuries and losses evidenced after August 1992 to the incident of May 1992; and how much is the

URJ JEFFERIES v ROADS AND TRAFFIC AUTHORITY OF NSW (Mason P) 5

result of an independent assessment of the true extent of the appellant's continuing and present economic and non-economic loss. It is to be remembered that the appellant is still under 30.

These matters alone justify the upholding of the appeal. It was suggested by senior counsel for the appellant that there should be a new trial. However, I think that the Court should do its best to reassess. This is a case where none of the relevant conclusions turn upon an assessment of credibility. None of the doctors were examined in relation to their written reports. It is therefore a situation where this Court is in as good a position as the Master to determine the central issues on the present state of the evidence, subject of course to recognising that the appellant bears the onus of persuading that error occurred.2

In my view this is a case where the medical evidence pointed strongly towards the incident of May 1992 as the cause of the appellant's slipped disc and continuing sciatica. The injuries stemming from the later incidents were not disentangled in such a way as to demonstrate that the further injuries would not have occurred had the appellant not been in the physical condition caused by the respondent's negligence which led to the final incident.3 Per contra I am satisfied by the medical evidence that the injuries stemmed from the May 1992 incident, and that it should be taken to be the cause of them.

The appellant's unchallenged evidence was that a particular incident on 26 May 1992 led to the onset of continuing and worsening pain in the lower back and right leg. The nature of that incident, which was found to involve negligence on the employer's part, has already been described. It led the appellant to seek acupuncture and chiropractic assistance which was providing adequate but far from complete relief from continuing pain and discomfort. I regretfully disagree with the Master's statement that "prior to the August 1992 incident, [the appellant] had not had any need for medical treatment", unless that is to be read as stating merely that such treatment was not sought.

While it is clear that "an incident" occurred on 7 August 1992, and that this incident led to the detection of a slipped disc that necessitated surgical intervention and that is regarded as the source of the appellant's continuing difficulties, the evidence is virtually silent as to whether this incident had independent causative effect. I consider that this deficiency creates problems for the respondent rather than the appellant in the light of the cases I have cited, but I do not need to resolve the matter on the basis of onus of proof. It seems to me that a tribunal of fact should conclude that the incident of August 1992 had no or virtually no independent causative effect. Rather, it was an event which revealed the proper extent of the injury suffered by the appellant in the earlier (tortious) incident. Why is this so? In the first place, there is the unchallenged evidence of the appellant that there was continuing and worsening back pain stemming from the first incident. Secondly, there is so little information about the event that actually occurred on 7 August 1992 that one should hesitate before attributing significant causal effect to it. All that one knows is that the appellant was working in an apparently normal work situation when he suffered severe back pain in the course of lifting some sheeting. There is no suggestion that the appellant was involved in some extreme activity or a frolic of his own. The respondent might have explored this matter in evidence, but chose not to do so. Thirdly, there is the medical evidence which in my view indicates the probability that all (or virtually

2. Warren v Coombes (1979) 142 CLR 531.
3. Cf Watts v Rake (1960) 108 CLR 158 at 160; Purkess v Crittenden (1965) 114 CLR 164 at 171.

all) of the appellant's relevant injuries stemmed from the first (tortious) incident. Mr Deacon was the orthopaedic surgeon in Melbourne to whom the appellant was referred by his general practitioner shortly after the August 1992 incident. He carried out the surgical intervention in September of that year. His report dated 24 July 1995 recorded a history of a patient who had hurt his back on 26 May 1992 who -

"eventually... had to stop work because of back pain on 7 August 1992 at which time investigations suggested that he was suffering from a prolapsed intervened lumbar intervertebral disc at the L4-5 level with x-rays and a myelogram confirming this".

The appellant's general practitioner, who first saw the appellant in Deniliquin in relation to the injury suffered in the second incident reported that the "cause of injury seemed to be that on 26.5.92". He then described the first incident. Dr Seaton, a consultant orthopaedic specialist reported that "the injury of great import is the one that occurred on 26 May 1992". He traced the appellant's problems with sciatica in his right leg to the back injury in May 1992. Professor Fearnside is a neurological surgeon who examined the appellant on behalf of the respondent. His opinion was that:

"As a result of the work accidents, probably the significant one of 26/5/92, Mr Jeffries sustained an injury to his low back which resulted in a prolapse of the L4-5 disc".

The respondent accepts that the findings of the Master preclude the argument that the second and third incidents, and the injury which followed them, should be regarded as causally independent of the first incident. If this were the case, no damages for future economic loss would have been awarded. The dispute between the parties centres upon which of the first two categories identified by Malcom CJ in State Government Insurance v Oakley' applies. His Honour said:

"Tn my opinion, where the negligence of a defendant causes an injury, and the plaintiff subsequently suffers a further injury the position is as follows:

(1) where the further injury results from a subsequent accident which would not have occurred had the plaintiff not been in the physical condition caused by the defendant's negligence, the added damage should be treated as caused by that negligence;

(2) where the further injury results from a subsequent accident, which would have occurred had the plaintiff been in normal health, but the damage sustained is greater because of aggravation of the earlier injury, the additional damage resulting from the aggravated injury should be treated as caused by the defendant's negligence..."

In the first category, a plaintiff receives the full damages resulting from the second accident. In the second category, the plaintiff receives only those extra consequences of the second injury due to the existence of the first injury. It is a case of the recent injury increasing the damages flowing from the first (tortious) incident. The vulnerability to later injury that arose from the tortious incident is, in Windeyer J's words, in Faulkner v Keffalinos> supplied with a measure by the second accident. See also Neall v Watson.¢

4. (1990) Aust Torts Reports para81-003 at p67, p577.
5. (1971) 45 ALJR 80 at 85.
6. (1960) 34 ALJR 364 at 367.

URJ JEFFERIES v ROADS AND TRAFFIC AUTHORITY OF NSW (Mason P) 7

Superimposed upon and stemming from these principles are those touching the adjustment of damages to reflect both past compensation payments and future entitlements where (as here) the defendant was the plaintiff's employer at the time of the earlier tortious incident and the later incident that gives rise only to compensation entitlements. $151B(1) extinguishes (with exceptions) rights to further compensation in respect of the injury should the worker recover damages from the employer "in respect of the injury concerned". The predecessor in the 1926 Act was s63. In Vanramer Pty Ltd v Higgins' the Court explained that s63 did not apply to the second injury so that the recovery of damages for the first did not effect the worker's rights to compensation for the second. The majority held, however, that the damages should be reduced because of those compensation rights. This view has been followed in later cases.8

In my view the evidence summarised above leads to the view that all or practically all of the injuries that predated the recent incident were caused by the first incident. The second incident did not aggravate the earlier injury except perhaps very slightly. Rather, it brought it to its true light. This means that the learned Master was correct in offsetting the liability of the appellant's compensation payments received after the second incident, but the corollary is that all of the continuing disability and non-economic loss may effectively be laid at the door of the first (tortious) incident. I reach that view on the evidence, for the reasons already given.

How then to assess non-economic and future economic damages? As to the former, even if I were of the view that the Master was entitled to treat the second and third injuries as mere aggravations of the injury stemming from the first, I would not agree with his assessment of 35 per cent. But I respectfully differ on causation anyway. Having regard to my view on causation, the appellant's age, and the evidence as to the extent and permanence of his low back injuries I would allow 45 per cent.

As to future economic loss, the appellant contends for $208,879 in lieu of the $75,000 awarded. This represents an assessment of 50 per cent loss of earning capacity, applied to the appellant's comparable nett weekly earnings ($550), applying a 5 per cent multiplier for 37 years (893.6) less the conventional 15 per cent. $18,000 is also claimed for loss of superannuation entitlements. While I do not accept the Master's figure, based as it presumably was upon a finding of causation with which I disagree, I would also reject the appellant's claim. It undervalues the appellant's capacity (demonstrated to date) to receive alternative employment without wage loss of the extent claimed. It also undervalues the appellant's motivation and proven aptitude for acquiring skills which the Master accepted. There were prospects of the appellant being appointed to a new position by his long-time employer the respondent. Nevertheless, the injury was severe, continuing and disabling for a young man who had left school at 15 and trained in carpentry, bricklaying and plumbing. The medical evidence is clear that the appellant is unable to return to carpentry work. He is at an obvious disadvantage in the open labour market. I would substitute $120,000 for the Master's $75,000. Like the Master I have taken into account the claim for loss of superannuation.

7. (1991) 24 NSWLR 661.
8. See Kempsey District Hospital v Thackham (1995) 36 NSWLR 492 at 508 and cases cited.

The remaining item in dispute is the appellant's claim for $10,000 in relation to the cost of future surgery. The chance of requiring that surgery is not great, assuming (as I do) that the appellant will abstain from heavy work in the future. Nevertheless, it is a possibility in the light of Mr Seaton's evidence (AB102). Allowing for the contingency and the deferral of any such expenditure, I would allow $2000 on this account.

The appeal should be allowed with costs. The parties are to bring in Short Minutes to the Registrar.

1. Appeal allowed with costs.
2. The parties are to bring in Short Minutes to the Registrar.

Counsel for the appellant: B M J Toomey QC and E G Romaniuk Solicitors for the appellant: Walsh & Blair Counsel for the respondent: P M Hall QC