Jessop v Herald & Weekly Times Limited & Anor [2014] VCC 308

"(a) permanent serious impairment or loss of a body function."

**3 The body function relied upon in this application is the cervical spine.

4 The plaintiff relied upon three affidavits and gave viva voce evidence. In addition, both parties relied on medical reports and other material which was tendered in evidence. I have read all the tendered material.**

Outline of Section 134AB

**5 The impairment of a body function must be permanent, in the sense that it is likely to continue into the foreseeable future. The plaintiff bears an overall burden of proof upon the balance of probabilities. Apart from the general burden, ss(19) and (38)(e) of the Act impose specific burdens in relation to a claim for loss of earning capacity. By ss(38)(c) of the Act, the impairment must have consequences in relation to each of pain and suffering and loss of earning capacity which, when judged by comparison with other cases in the range of possible impairments, may be described at the date of the hearing as being more than significant or marked and as being at least very considerable.

6 I am required to consider the consequences to this particular plaintiff viewed objectively arising from the injury. Comparison must also be made of the impairment arising from the injury in this particular application with other cases in the range of possible impairments or losses of body function. Here, where there is a claim for loss of earning capacity, that loss of earning capacity must be to the extent of 40 per cent or more both at the date of hearing and permanently thereafter. Sub-sections (38)(e) and (f) recite the formula by which loss of earning capacity is to be measured.

7 Sub-section 38(g) requires questions of rehabilitation and retraining to be considered in determining whether the 40 per cent loss has been established. However, in this case, this does not loom as an issue, particularly in view of the defendants' medical evidence. Further, although ss38(h) provides consequences which are psychologically based are to be wholly disregarded in paragraph (a) cases, this is also not in contention here.

8 I have applied the principles identified by the Court of Appeal in Barwon Spinners & Ors v Podolak.[1]

9 The defendants concede that the plaintiff has suffered an injury to the cervical spine in the course of her employment as alleged but say:

(a) Such physical injury has produced consequences which do not meet the threshold as set out by the Act for economic loss or for pain and suffering;

(b) The plaintiff has not proved a 40 per cent loss of earning capacity pursuant to sub-paragraph (e)(i) and (iii) because of essentially the evidence contained in exhibit N tendered by the plaintiff. This document is a summary of taxation returns received into evidence by consent.

10 Defendants' counsel concedes that for the purposes of this case, the figure of $35,000 is appropriate for the earnings attributable for the financial year ending 30 June 2009 which would be relevant to sub-paragraph (f)(ii) of the relevant section. This would mean, he submits, that 60 per cent of that figure is $21,000 and the plaintiff, having earned in excess of this figure, particularly in the financial year ending 30 June 2012 (that figure being $23,861), the plaintiff should fail with respect to her claim for economic loss pursuant to sub-paragraph (e)(i) of the relevant section.

11 The plaintiff tendered in evidence by consent a summary of her payslips for the twelve-month period from 1 March 2008 until 28 February 2009 (exhibit A). I am told by consent that the average number of hours worked per week in that period was 19.95 hours per week. Accordingly, for this twelve-month period, the plaintiff was earning approximately $682 per week or approximately $34 per hour, and earned approximately $31,479 for the twelve-month period.

12 An analysis of exhibit A reveals that in that calendar year, the plaintiff worked 47 weeks. It also reveals that for 30 weeks she worked in excess of 20 hours, that for 17 weeks she worked 23 hours or more and for six weeks she worked 30 hours or more. The plaintiff gave evidence that she was rostered to work these number of hours and I am asked to infer that this calendar year was typical of the plaintiff's working history in the relevant six-year period. No alternative evidence was tendered by the defendants so I am prepared to accept exhibit A as being representative of the plaintiff's earnings.

13 The plaintiff also gave evidence that at all material times prior to being injured she was ready, willing and able to work up to the 37 hours per week that she was occasionally rostered to attend.**

**14 The dispute between the parties ultimately descended to a legal submission as to whether the plaintiff had proved her loss of earning capacity, according to statute, by reference to any extra capacity over and above the 19.5 hours per week average that she worked and of which she would be able to avail herself according to the formula.

15 Before descending to the legal argument, it is worth noting that it was common ground between the parties that in the course of the plaintiff's employment, she injured her cervical spine by way of aggravation of underlying cervical spondylosis such that following approximately May 2009, the plaintiff was only rendered permanently able to perform alternative duties with her employer not in excess of 13.5 hours per week. This was the opinion of the defendants' two doctors, Mr Robin Williams (exhibit 2) and Mr Clive Jones (exhibit 3).**

16 The Court of Appeal in Barwon Spinners & Ors v Podolak[2] was constrained in a number of cases to consider the interpretation to be afforded to s134AB(38)(f) and (e). At paragraph 21 therein, the Court, with respect to sub-paragraph (e), recited as follows:

"This 'new concept of a 40% threshold' was said by the Minister, in the Second Reading Speech, to provide 'an objective criterion of a loss of earning capacity'. In explanation, the Minister said that -

'... this objective standard is within the range which the Full Court found in Petkovski v Galletti [1994] 1 VR 436 to be very considerable. There the Full Court considered a fact situation where the reduction in working hours was from about 40 to between 25 and 20. The Full Court said that such an interference with working capacity may fairly be regarded as a serious consequence.'

Now, however straightforward it may be to calculate a financial loss of 40% or more when what is at stake is a reduction in working hours, the argument on these appeals has demonstrated how difficult it can be to calculate the extent of the loss ... ."

"Moreover, while it might have been thought that the easiest way to determine relevant economic loss would be to compare what was being earned by the worker before injury with what could be earned after injury, the loss of earning capacity is now to be 'measured ... as set out in para (f)' - and para (f) is far more sophisticated. It requires a comparison of two things which may be called, shortly, after-injury earnings and without-injury earnings. The first is described as:

'the worker's gross income from personal exertion (expressed at an annual rate) which the worker is earning or is capable of earning in suitable employment as at that date [being the date of the hearing of the application before the court]'

'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 ... , had the injury not occurred.'"

"The latter, without-injury earnings, are to calculated by reference to 'that part of the period within three years before and three years after the injury as most fairly reflects the worker's earning capacity', had there been no injury. The Court is therefore required to go well beyond actual pre-injury earnings and consider (on the hypothesis that the worker was and remained free of the compensable injury at base) both earnings and capacity to earn during that portion of the six years marked out 'as most fairly reflects the worker's earning capacity'. As it stands, that task is not inconsiderable."

**19 It seems to me that the Court of Appeal has considered that capacity to earn within the meaning of sub-paragraph (f)(ii) is more "sophisticated" than just the actual earnings.

"Accordingly, we would reject the argument that paras (e) to (g) of subs (38) are concerned with anything but the physical or mental capacity of the injured worker to work again. That appears consistent, too, with the expression found in para (b) of subs (38), and as well para (c) - namely -

'... when judged by comparison with other cases in the range of possible impairments or losses of a body function etc etc'."

**21 Accordingly, as counsel for the plaintiff submits, it would appear that the test for serious injury before the Court is a threshold test and is purely a creature of statute and not to be confused with the considerations to be undertaken by a jury, for example, in assessing a damages case.

22 In my view, this is consistent with the Court of Appeal's approach at paragraph 27, wherein it was stated:**

"... On the one hand, it may be said to be a realistic approach to the possibility of further employment, which will lead to common law damages for those in our community who are the most vulnerable because of injury at work. On the other hand, the mere reference to 'capacity for any employment' does not, on its face, suggest that Parliament was concerned with an economic capacity rather than a physical or mental capacity. For instance, in para (g) what is relevant, after considering rehabilitation or re-training or the possibility of rehabilitation or training, is -

'... 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 cent of gross income from personal exertion ....'

In our opinion, the expression 'if exercised' means 'if exercised in employment'. Parliament is looking here to a physical capacity for work which, if exercised in employment, would bring about the result that the worker was earning more than the limit relevant to serious injury. It is not concerned with whether employment will or will not be obtained: it is concerned rather with the economic yield of such work, if the capacity for that work was in fact exercised in employment. ... ."

**23 In my view, the Court of Appeal's consideration of "after injury" earnings in terms of it being a physical capacity for work which, if exercised, would lead to an economic yield, reveals a Parliamentary intention that similar considerations must apply under sub-paragraph (f)(ii) in terms where Parliament adds the disjunctive "... or would have been capable of earning from personal exertion during that part of the period ....".

24 This interpretation, in my view, is consistent with the Court of Appeal's dicta in paragraph 28 of the judgment.

25 In the case before me, I accept the plaintiff's evidence that she would have worked and had the capacity to work well in excess of the 19.5 hours average that she worked in the relevant twelve-month period if that work had been available to her. This evidence is corroborated by the weekly hours worked as set out in paragraph 12 herein and demonstrates a capacity to work up to 37 hours. In my view, the residual capacity as demonstrated by the "after injury" earnings represented by the 13.5 hours per week clearly reveals that the plaintiff has suffered a loss of earning capacity in excess of 40 per cent which can readily be expressed at an annual rate as already demonstrated earlier. Accordingly, leave will be granted to the plaintiff to issue proceedings for loss of earning capacity on account of an injury to her cervical spine suffered in the course of her employment.

26 Further, consistent with the principles laid down in Advanced Wire & Cable Pty Ltd v Abdulle,[3] leave will also be granted for her to issue proceedings with respect to pain and suffering damages. I will hear the parties with respect to any consequential orders.

[3] [2009] VSCA 170