Loss of Telstra Employment
166The parties agreed that the evidence demonstrated that according the documents produced by Telstra, which were tendered as Ex 21, as at 18 July 2003, Mr Kerney's base salary was $998 gross per week. Mr Kerney's evidence was that he was earning over time in addition to his base salary in the order of 10 per cent or so.
167Applying this to the gross sum would suggest that, excluding allowances, Mr Kerney's average weekly earning in July 2003, from all of his work, would have been in the order of $1098 gross per week or $803 net per week.
168Both parties are agreed that it was necessary to apply an increase factor to take Mr Kerney's earnings from Telstra up to the date of this assessment, so as to establish what he would have earned had he not been injured.
169The submissions proposed a number of alternative methods of doing this. The defendants' principal submission was that the appropriate method of projecting the increase was to take the percentage increase which had been allowed under the Telecommunications Services Industry Award in the period from 2002 to 2010.
170The report of the defendants' accountant, Mr Ivey, dated 31 January 2011 (Ex 19) contained award rates which he had extracted from that award. Accordingly, it was possible to calculate the percentage increase in those amounts.
171However, the award was not tendered, and Mr Ivey in his report makes no assertion that Mr Kerney was in fact covered by that award. He simply assumes that he was.
172I note that the award is one which is readily available, and could have been tendered. I also note that the modern industrial relations framework provides for employees to be remunerated either on the basis of an award or alternatively by reference to a modern enterprise award, or an enterprise instrument, within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). In those circumstances, I am not prepared in the absence of evidence that the award covered Mr Kerney or Telstra, to infer that this award had direct application to Mr Kerney or Telstra.
173I therefore reject the defendants' principal method of calculating increases, because the evidence does not support that the award nominated had any relevance to Mr Kerney and his occupation.
174The second alternative which was contended for by the defendants was to increase the 2003 sum by reference to average weekly earnings and the percentage increase in those earnings. Thirdly, Mr Kerney submitted that one could increase the rates by reference to the earnings of a comparable employee, Mr Wellington.
175It is necessary to say something about Mr Wellington's employment.
176Mr Wellington worked for Telstra, as did Mr Kerney whom he knew. He was employed at one level of seniority (and pay rates) below Mr Kerney. Whilst he did broadly similar work, he was located in the metropolitan area and did the great bulk of his work in the metropolitan area. He said in evidence that he performed a lot of overtime, and that probably in the order of 25 to 35 per cent of his wages came from overtime. This is markedly different from Mr Kerney, whose overtime amounted to about 10 per cent of his base earnings.
177I do not think it is safe to regard all Mr Wellington's net earnings, as being comparable to Mr Kerney's net earnings.
178However, I see no reason why the percentage increases in earnings which Mr Wellington received, as an employee of Telstra engaged in substantially the same work as Mr Kerney, would not be those which Mr Kerney would have also received.
179Accordingly, I am satisfied that the percentage increase in the net earnings of Mr Wellington is the appropriate rate of increase to apply to Mr Kerney's earnings from Telstra to calculate his most likely earnings from Telstra if he had not been injured.
180One also needs to keep in mind that the tax rates have also changed over time, and the appropriate tax rates will need to be applied.
181In summary, the principal integers for the calculation of the earnings which Mr Kerney would have earned, had he not been injured, from his employment with Telstra are:
(a) The calculation of Mr Kerney's actual earnings as at the date of his accident is to be calculated by reference to his income tax returns;
(b) The calculation of Mr Kerney's actual earnings as at 18 July 2003 is $803 net per week, a sum calculated from the figures disclosed in Ex 21;
(c) The other earnings for each of the remaining financial years, should be derived by application of the percentage increases in the average earnings of Mr Wellington, the nearest proved comparable employee from Telstra, to Mr Kerney's earnings;
(d) The tax rates to be applied in order to derive the appropriate net earnings are those fixed from time to time by the Commonwealth.
182It is appropriate, in order to ensure accuracy, that the parties, through their expert accountants, calculate this figure and bring in short minutes of order to reflect this calculation (and others which follow).
183The defendants accepted that Mr Kerney was completely incapacitated for work until at least 30 June 2007. The defendants submitted that after 1 July 2007, Mr Kerney had a capacity for work and that accordingly he was not entitled to the entirety of his loss of earnings from Telstra after that date.
184The task upon which the Court is embarked at this stage is to determine whether Mr Kerney has any, and if so what, residual earning capacity. Earning capacity must be measured by reference to the particular individual when viewed with all of his or her characteristics in the labour market: Nominal Defendant v Livaja [2011] NSWCA 121 at [65].
185The first step in the assessment of residual earning capacity is to determine, by reference to the evidence of what the plaintiff is capable of doing, including the expert medical evidence, what the nature is of his physical capacity to undertake work.
186The second step is to undertake an identification of occupations which are theoretically available.
187There is a third and important stage, namely that there must be a practical assessment of the likelihood of the particular plaintiff obtaining employment in one or other of the occupations which are identified as theoretically available: See Livaja at [65].
188It is necessary to consider the question of which party bears the onus of proof of an issue of residual earning capacity.
189McColl JA (Handley and Bryson JJA agreeing) said at [73] in Rabay v Bristow [2005] NSWCA 199:
"73. Compensation for loss of earning capacity is awarded because of the diminution in an injured plaintiff's earning capacity 'is or may be productive of financial loss'." Graham v Baker (1961) 106 CLR 340 at 347.
190It is necessary for a plaintiff to prove the loss for which compensation is claimed: Todorovic v Waller (1981) 150 CLR 402 at 412-413, however conversely, it is not incumbent upon the injured plaintiff to prove what employment he or she " is not capacitated from performing ". It is for a defendant who contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such a person: Luntz, Assessment of Damages for Personal Injury and Death (4 th ed) at 97 [1.9.21].
191This approach was referred to with approval in Magnou v Australian Wool Testing Authority Ltd [2007] NSWCA 357 at [20]. I will consider these questions with the question of onus in mind.
192Thereby the first step therefore which is to be considered is what is the present physical capacity of the plaintiff to undertake work.
193It was the unanimous view of all of the doctors, and the defendants accepted, that Mr Kerney had significant physical restrictions for work. All doctors agreed that, at the least, he was not fit to undertake his pre-accident employment with Telstra, he was not fit to work 40 hours per week and he was not fit to undertake work which involved lifting weights more than ten kilograms. As well, the doctors were all agreed that Mr Kerney's working life was shortened, although there was a debate as to whether 55 years of age or 60 years of age was the likely date upon which his working life will finish.
194Dr Ellis, in the course of the oral evidence, contrary to the adoption of the joint report (Ex Q) of 15 March 2011, expressed the opinion that Mr Kerney was unlikely to achieve any work at all. At T109.50-110.4, he said:
"He has had rehabilitation efforts, which have failed, and as well he is psychologically affected by depression, leading to two suicidal attempts. For these reasons, I think his prognosis and employment potential is poor, and work in an employment capacity is unlikely to be achieved."
195Later, at T113.26, Dr Ellis expressed this view:
"... he has multiple impairments and injuries and continuing pain. Activities of weight lifting do not go with a severe injury if can do this work that the others allege he can he may be able to do them temporarily or for a short period but in an employment capacity to carry on and do them in a continued employment capacity his prognosis is bad for the reasons that I have stated. The fact that he has continuous pain in his right leg is probably of a neuropathic nature. He has been seen by a pain specialist and had specific treatment for neuropathic pain."
196The view of Dr Spira and Dr Cummine was that Mr Kerney was capable of sedentary employment and/or employment restricted to light or selected duties on a part time basis.
197I do not accept the view of Dr Ellis that the plaintiff is completely unemployable and unfit for any work at any time in the past or for the future. There are a number of reasons for this:
(a) As far as it was revealed, the substantial basis for Dr Ellis' opinion about Mr Kerney's unfitness for work was that in addition to his orthopaedic disabilities, he had significant neck and back pain and a serious psychological condition, all of which combined to make him unfit for work. That basis was not substantiated in the evidence. In particular, the extent to which Mr Kerney had neck and back injuries and ongoing disabilities, if any, was minimal. The basis of the opinion which Dr Ellis formed of Mr Kerney's psychological difficulties was not revealed, other than the mere fact on the recited history of the post existence such psychological difficulties. Dr Ellis' opinion was not reflected in the expert opinions of those more qualified than Dr Ellis in the psychiatric field;
(b) Dr Ellis, a general surgeon, did not on the evidence disclose any particular qualification which would enable him to say that employment was or was not likely to be achieved. His particular expertise, such as it is, is in determining the physical disabilities with which Mr Kerney suffers, which related to his speciality of general surgery. I could detect no such injuries or disabilities in this case. It would be wrong, in my view, to equate the qualification, experience and expertise of Dr Ellis with that of a specialist physician.
(c) A further basis for the opinion of Dr Ellis, namely, that Mr Kerney had multiple percutaneous neurotomies performed by Dr Sunduraj was not supported by any evidence which was tendered. Mr Kerney gave no evidence of undergoing these treatments, when they were or what effect, if any, it had on his capacity for work. There was no report by Dr Sunduraj which set out the detail of these procedures. The lack of that material means either that there is no basis proved for Dr Ellis' opinion, or alternatively, the basis of his opinion remains unrevealed;
(d) The approach of Dr Ellis, both in the context of his report, the manner in which he gave his oral evidence, gave rise to a clear impression that Dr Ellis took the view that he was not prepared to discuss, explain, or justify the basis upon which he had reached his opinion. In this case, I formed the impression that Dr Ellis approached the expression of his opinion as though his " ipse dixit " was sufficient. In this case, he did not furnish the court "... with the criteria enabling evaluation of the validity of [his] conclusions ... ": Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at [59] per Heydon JA.
198In addition to the foregoing reasons, I do not accept the opinion of Dr Ellis, as expressed in oral evidence because I found the explanation for the significant difference in opinion between what appears in the joint expert report and the opinion which he expressed orally, by Dr Ellis, disingenuous. He asserted that he did not note any difference of opinion with respect to work capacity to that expressed in the joint expert report because the consensus of the expert meeting was, as indicated in the report, and that it was not a matter for him to express any disagreement with the consensus.
199The difficulty which I have in accepting this explanation is that in the very paragraph where the "consensus" opinion was expressed without demur from Dr Ellis, the last sentence notes a disagreement that Dr Ellis expresses, but it is a limited one, namely, one which only relates to the length of Mr Kerney's future working life. The opinion as there expressed assumes, as so it seems to me, that Mr Kerney will be able to undertake further employment but in a limited range of capacities. It is that restricted working life to which Dr Ellis refers, when expressing the opinion recorded in that paragraph. I do not accept the explanation which Dr Ellis gave in oral evidence for the change in his opinion to that which he expressed orally.
200I have come to the view that in adhering to that explanation in light of his lack of particular expertise, the inadequacy of the expressed basis for his opinion and the contents of the joint report, Dr Ellis left behind his role as an impartial expert expressing an opinion in pursuance to his duty to the Court, and adopted an advocacy role for the plaintiff. That course of conduct did him no credit in this case.
201For those reasons I reject his opinion. I accept the opinions of Dr Cummine, Associate Professor Spira, and also Dr Conrad who signed the joint report, that Mr Kerney has a residual work capacity.
202However, I do not accept that Mr Kerney has all of the work capacity which both Dr Cummine and Dr Spira attributed to him in the joint expert report. The history upon which that assessment of the work capacity was based is encapsulated in Dr Cummine's final report dated 9 April 2010 (Ex 11). As Dr Cummine understood the history given to him by Mr Kerney, he thought that Mr Kerney was fit to, and capable of, driving a 20 tonne excavator for use on his farming property, he was able to maintain his vehicle, work in a shed and do work on the farm. This was described in this way in the joint report by Dr Cummine, and relied upon by Dr Spira and Dr Conrad:
"Mr Kerney was able to perform work on his own farm and that he was able to drive a 20 tonne excavator as well as to assist friends in the installation of machinery."
203The terms of the joint expert report make it plain that the opinion was expressed in respect of that history.
204I do not accept that Mr Kerney can do, in any unrestricted way, these tasks. In the course of the concurrent evidence, a series of assumptions which are set out in Ex P were put by counsel for Mr Kerney to the experts. It seems to me that those assumptions fairly reflect the evidence given by Mr Kerney which I accept. In particular, I accept Mr Kerney's evidence that he is not capable of operating a 20 tonne excavator or other like earth moving machinery except for short periods of 15 minutes or so. I also accept that he experiences difficulty climbing into any of the machines referred to and experiences pain and discomfort whilst operating those machines. There is no realistic prospect of Mr Kerney being able to operate these machines for any lengthy period of time and certainly not in circumstances where stress was placed on his right leg. If the machines are to be operated in the natural environment rather than on an enclosed and smooth surface, the greater stress will be placed on Mr Kerney, and his capacity to operate the machinery will be much reduced.
205I also accept that Mr Kerney presently performs no work on his farm, that he is unable to kneel, crouch or squat and that his right leg and knee, in particular, is unstable on rough or uneven ground.
206In my opinion, the extent of his injuries and disabilities means that Mr Kerney is fit to work part time in light or restricted duties, probably for no more than three hours a day, in a job which he can sit and stand as necessary, and in which he is not required to walk over rough or uneven ground or climb stairs.
207In other words, his residual capacity for work from 1 September 2007, when he last saw Dr Harris and was discharged from his care, to date is in the order of 40 per cent.
208The defendants tendered evidence, which was not challenged, that there were a range of occupations which with his skills and education, Mr Kerney could engage in.
209These theoretically available positions included:
(a) Hire car or taxi radio dispatcher;
(b) Driving instructor;
(c) Bus driver;
(d) Desktop publishing operator;
(e) Sales representative;
(f) Excavator Operator; or
(g) Real estate property manager.
210Mr Kerney agreed that some, but not all, of these occupations were within his physical capacity. I would add to that agreement these constraints, namely, providing he could work on a part time basis with a sufficiently flexible employer who would tolerate the unpredictability of his attendance.
211Accordingly, the defendants had discharged by their evidence, the obligation to prove that there were occupations in which Mr Kerney was able to engage.
212Having established the degree of physical and psychological incapacity to undertake work, it is necessary to determine whether Mr Kerney has in fact a significant residual earning capacity measured by reference to his individual circumstances in the labour market.
213In my opinion, the following circumstances are relevant:
(a) At the time of his accident, Mr Kerney was in his mid 30s and is now aged about 45. His employment history was in one field with one employer;
(b) The field in which he was skilled, namely telecommunications, has in the period since his accident, undergone technological change to a marked extent. Without undergoing any retraining, work in the telecommunications industry would not be open to Mr Kerney;
(c) Mr Kerney has lived all of his life in Kandos, a small town northwest of Sydney. That is where his home is, it is where he went to school and where he grew up. His elderly parents who are in failing health live there, and it cannot be reasonably expected that in the foreseeable future, Mr Kerney should exercise his residual work capacity by moving away from Kandos;
(d) As a consequence, the places open to Mr Kerney to exercise his work capacity are those cities and towns within no more than one hour's drive of Kandos. In a practical sense, this means the towns of Kandos, Rylstone and Mudgee, as well as the environs of those towns;
(e) Although I have formed the view that Mr Kerney is capable of working three hours a day, there will be periods of time when Mr Kerney's physical injuries and disabilities mean that he cannot work every day in a working week and he may have to work part-time. In other words, he may be in a position of taking more sick leave than would an ordinary employee, or else having a less reliable attendance record.
214There was no evidence of the state of the labour market in the Kandos and surrounding areas, by which I include Rylstone, Mudgee and their environs. I do not know whether there are more jobs on offer than there are applicants, nor do I know whether there are any employers in that region, who are sympathetic to employing men of Mr Kerney's age who have disabilities.
215There is no evidence, even of a generally descriptive nature, about the types and numbers of employers, the industries in which they work or operate, and the levels of their operation in the area in which Mr Kerney is based.
216In cross-examination, senior counsel for the defendants put to Mr Kerney that he was capable of doing a number of jobs in areas of skill which were identified to him. Mr Kerney readily agreed.
217However, Senior Counsel did not put to Mr Kerney that there were any realistically available job opportunities in the relevant geographical areas. In fact, Senior Counsel's approach was to the contrary. At T20.3, the following exchange occurred:
"Q. However you could go back into [the telecommunication] field either in a clerical capacity or a technical capacity, couldn't you?
A. Yes, I suppose so.
Q. Perhaps at a lower level than you were but nevertheless back into that field?
A. There is none of that work in the local area, but yes.
Q. Well you have said - just to pick up on what you have just said - at one point you were considering going to Sydney, weren't you?
A. Yes.
Q. Because it was obvious to you that employment opportunities would be far better in Sydney than they might be in Rylstone or Kandos?
A. That's correct.
...
Q. ..., but have you reconsidered the idea of moving to either Sydney or a larger rural centre where more work might be available?
A. No.
Q. What about Mudgee?
A. Not really, no.
Q. That is a bigger centre, isn't it?
A. It is.
Q. And there would be more work available there?
A. I assume so.
Q. Have not you given that any thought?
A. No.
Q. Why not?
A. Impractical.
Q. Why?
A. My dependency on my friends and where I live, I own my own house. I just have not considered it."
218The thrust of this cross-examination was to accept that the availability of work was very limited in Rylstone and Kandos, may have been better in Mudgee, but that Mr Kerney ought reasonably to have considered moving to Sydney to obtain employment.
219The evidence does not enable me to be satisfied that, whatever the limited extent of Mr Kerney's theoretical work capacity is, that there is any practically achievable job which he can do on the open labour market in the general area in which he lives.
220It is not reasonable to expect him to move from Kandos. I think it is practical for him to travel to Mudgee to obtain employment there, notwithstanding his evidence to the contrary. But there is simply no evidence that by going to Mudgee there would be any work which he could practically obtain.
221It is of importance to note two matters which support this finding. They are:
(a) the defendants tendered two reports from the Vocational Capacity Centre dated 2005 and 2008 (Ex 12 and Ex 13). These reports each recorded the results of a "Functional Capacity Evaluation" of Mr Kerney's condition shortly prior to the preparation of each report. The reports also included a "Vocational Assessment Report" and a "Job March Report". It is clear that the assessments were comprehensive. To the extent that the functional capacities of Mr Kerney were thought in these reports to be different from the restricted capacity described by the expert medical witnesses, I prefer the evidence of the medical experts. What is notable, should the contents of these reports, and which supports the conclusions to which I have come, is that although the reports identify specific jobs (called "vocational choices") which the Mr Kerney would be able to undertake, they do not suggest that such jobs exist within reasonable geographical propinquity to Mr Kerney's home in Kandos. The Centre seems an organisation which is entirely suitable to have undertaken such an exercise;
(b) the defendants employed, for the benefit of Mr Kerney, a rehabilitation organisation, to assist him to recover from his injuries and disabilities and to return to the workforce. That organisation was referred to in the evidence by the name "Recovre". Mr Kerney was not placed in any employment by that organisation, nor was there any evidence from that organisation which suggested that it had identified any employment suitable for Mr Kerney which was realistically available to him.
222These two matters, both of which note the absence of evidence tendered or led by the defendants, from organisations which are likely to be in a position to provide that evidence, suggest to me that I can more confidently draw the conclusion which I have reached above, namely, that there is no work which Mr Kerney can practically speaking obtain which would enable him to exercise his residual physical capacities: Jones v Dunkel (1959) 101 CLR 298.
223I would assess Mr Kerney's residual earning capacity as having no value. Accordingly he is entitled to the entirety of his Telstra earnings by way of economic loss from the time of the accident up to judgment.
224As was agreed between the parties, it will be appropriate to compensate Mr Kerney for a loss of superannuation payments which would have been made on Mr Kerney's behalf by his employer, on his net lost earnings to date. The appropriate rate was agreed at 11 per cent. The parties should calculate this amount.