Employment Law - the contract of service and rights, duties and liabilities as between employer and employee - Liability of employer for injury to employee at common law - Safe system of work - Supervision and instruction - Safe and adequate plant and appliances - Contributory negligence - Sawmill - Loss of part of hand in saw when complying with employer's system. Fennell v Supervision and Engineering Services Holdings Pty Ltd (1988) 47 SASR 6 and State Rail Authority of New South Wales v Wiegold (1991) 25 NSWLR 500, applied.

CRAWFORD J The first defendant owned and operated a sawmill at Frankford. On 16 June 1986 the plaintiff was working at the sawmill in the course of his employment by the first defendant as a mill-hand, when he lost a substantial part of his left hand as a result of it coming into contact with a saw. He has sued the first defendant for damages based on negligence, breaches of implied terms of the contract of employment and breaches of statutory duties.

2. On 30 July 1990 it was ordered pursuant to the Workers' Compensation Act 1927, s16C(4) that the second defendant be made a party and take over the conduct of the defence of the action. No consequential amendments have been made to the statement of claim. On the pleadings therefore, the basis of the claim against the second defendant has been left unexplained. It is an agreed fact that on 24 June 1991 the first defendant went into liquidation.

3. The defendants called no witnesses. The plaintiff gave evidence and called as witnesses his father, Stanley Eric Charles Stoward, and a person who at the time of the accident was an inspector with the Department of Labour and Industry, Tony Edwin Mullins. The evidence of the work practices and systems at the first defendant's mill, of the plaintiff's working experience there and elsewhere and of how the accident occurred came only from the plaintiff. As a result I must generally accept what he said when considering the question of liability. I note however that he was an unimpressive witness who had a tendency to assert facts and later contradict them, or to assert facts and later say he could not remember them. I have therefore regarded his evidence with caution.

4. On the day of the accident the plaintiff worked all morning as a benchman on a paling bench. His main task was to present billets of timber to a vertical circular saw for the purpose of having palings cut from the billets. The saw was 60 centimetres in diameter and spun within a horizontal wooden bench 76.5 centimetres long and 92 centimetres wide. The top third of the saw, or thereabouts, protruded up through a slot in the bench. The distance from the front of the spinning blade, at the level of the bench, to the front of the bench was 7.5 centimetres. At the same level as the bench and 12.5 centimetres in front of it was a horizontal, cylindrical and rotating feed roller 13 centimetres long and 7.5 centimetres in diameter. The roller was 20 centimetres from the edge of the blade of the saw. The saw and the feed roller were driven electrically on separate circuits. The system in use at the mill involved the benchman placing a billet of timber on the rotating roller, the purpose of which was to assist him in pushing the billet into the saw. The billet was propelled into the saw by a combination of the benchman pushing and the feed roller rotating. Just above the front half of the saw blade and at right angles to it was a horizontal piece of angle iron. No evidence was given of its height above the blade but from photographs I would estimate it to be between 5 and 10 centimetres.

5. From time to time the blade of the saw became hot and needed to be removed for sharpening. It was common practice for it to be cooled with water before removal. At about ten minutes before lunchtime on 16 June 1986, the plaintiff commenced to cool the blade. To do so he adopted the only procedure he knew and had observed at the mill while employed there. He obtained a cordial bottle and filled it with water from a tank. He then stood in front of the rotating feed roller and leant over it with the bottle in his right hand. The saw blade was spinning under power. He placed his left hand on the length of angle iron at a position above and to the left of the blade. His purpose in doing that was to brace and support himself while he was leaning over the roller and pouring water from the bottle on to the spinning blade. He commenced to pour the water on to the front of the blade, that is to say on the closest part of the blade to him. His clothing became caught in the rotating feed roller or its shaft and he was pulled down and towards the saw. His left hand came off the angle iron and on to the saw causing his injury. He screamed out. Some one turned the machinery off. The roller kept rotating for a time and people held him to prevent any more of him going into the saw.

6. The first defendant owed tortious duties to the plaintiff as his employer to take reasonable care for his safety and to take reasonable care to provide and maintain a safe system of work and proper plant and machinery. I have no hesitation in concluding that the first defendant breached those duties. On the evidence, the plaintiff was conforming with a system of work approved of and maintained by the first defendant. It was the only system used in the mill for cooling the blade. It was a most dangerous system for it required a worker to bring himself into close proximity to the circular saw and to the rotating feed roller immediately in front of it. A safer system would have been to require the application of water to the blade in a different way so that employees were not required to get close to moving machinery. Mr Mullins' early experience elsewhere involved throwing a bucketful of water over the blade, no doubt from a safe distance. He also mentioned some saws having "the induction of water as part and parcel of their operation ... through tubing and constant pressure I guess ... a fine spray or a little heavier." A safer system would have been to require employees to turn off the rotating feed roller before leaning over it. Safer machinery would have included some form of guard rail in front of the roller, although at a lower height so that the passage of the billets of timber would not be inhibited, to prevent an employee's clothing coming into contact with the roller. An accident occurring in the way the plaintiff's accident occurred was plainly foreseeable and could have been avoided by all of those methods. It could also have been avoided by the provision of a leather apron for the plaintiff's use. An apron was provided for those working on the main bench. It would have significantly reduced the risk of clothing becoming caught in the feed roller. A safer system would also have been to require the person pouring water on the blade to do so from the side, thereby eliminating the risk of clothing being caught in the roller.

7. For those reasons I find that the plaintiff's injury was caused by the negligence of the first defendant. I find it unnecessary to consider the allegations of breaches of contract and breaches of statutory duties.

8. Contributory negligence has been pleaded in the defence. It is asserted that the plaintiff failed to take sufficient care for his own safety and in particular that:

- he worked and operated the saw while affected by the

consumption of intoxicating liquor;

- he leaned over the saw while it was running;

- he placed his hand in a dangerous position;

- he operated the saw with his clothing in such a condition

that it could become entangled in the feed roller;

- he failed to wear a leather protective apron while working

at the saw bench;

- he leaned over the feed roller when it was running;

- he failed to stop the feed roller shaft or to request a

fellow employee to do so before leaning over it.

9. Although there was ample evidence that the plaintiff was an alcoholic, there was no evidence that he was in any way affected by intoxicating liquor at the time of the accident.

10. The evidence obliges me to find that the only system in operation at the first defendant's mill for the cooling of the saw was the method used by the plaintiff and it involved pouring water over the blade while it was spinning. The plaintiff had been working at the mill for 2.5 months. He had not previously worked in a sawmill. If the saw should have been cooled in some other way then the first defendant should have issued appropriate instructions. The plaintiff could not reasonably be expected to have devised a different system on his own initiative.

11. The plaintiff's evidence was that at the time of the accident he was wearing a flannelette shirt underneath a cotton windcheater. Counsel for the defendants submitted that I should find that the shirt was hanging out from underneath the windcheater and that as a result, when the plaintiff leaned over the feed roller, the shirt became entangled in it. Counsel relied on admissions made by the plaintiff in cross-examination that on some previous occasions at the mill he had been directed to tuck his shirt in and that he liked to have it hanging out.

12. There was no direct evidence that the shirt was hanging out immediately before the accident. The only direct evidence about the subject came from the plaintiff and it was that his shirt was tucked into his jeans. He said that the windcheater became caught in the roller and not the shirt. He accepted that as a result of that the shirt may well have been pulled out of his jeans. He agreed however that he did not look down and see what was caught - "I didn't have time". He maintained that he was able to say it was the windcheater which initially became caught because it felt that way to him. A statement signed by the plaintiff for an inspector from the Department of Labour and Industry when he was in hospital two weeks after the accident contained the following passage:

"I must have been leaning close to the feed roller as

the next thing I knew was that my clothes - that is my

jumper and shirt was caught in either the feed roller

or the roller shaft".

13. In interrogatories administered some seven years after the accident, the plaintiff was asked whether "your shirt caught in any machinery" to which he answered "Yes, my windcheater and shirt were caught in the rollers". Even if these previous statements of his are accepted as accurate, they do not establish which of the garments was first caught in the roller. The onus of proof in this regard is on the defendants and my conclusion on all the evidence is that I am unable to find on the balance of probabilities that immediately prior to the accident the plaintiff's shirt was hanging out and because of that the accident happened.

14. The evidence does not establish that there was available for the use of the plaintiff a leather apron. The evidence did establish that aprons were provided for employees operating the main bench but not for those operating the paling bench. I am unpersuaded that the plaintiff ought to have provided his own apron.

15. The feed roller operated on a different electrical circuit than the saw. The switch to turn off the roller was not immediately alongside but on a wall within a few paces of the saw bench. Mr Mullins thought it was probably three metres away but he could not be accurate. The plaintiff thought it to be about four feet away. If the plaintiff had turned the roller off and had not leaned over the feed roller until it stopped rotating, the accident would not have happened. The evidence does not establish that he had been instructed to turn it off or that it had ever occurred to him to do so. No instructions were given to him as to how he should carry out the task of cooling the blade. He was doing what he had seen other employees do. He was 21 years of age with only two months' experience on the paling bench. He was the most inexperienced employee at the mill. The evidence does not establish that he realised there was a danger of his clothes being caught if he leaned over the rotating roller, although I find that he had been instructed on previous occasions to tuck his shirt in and that he had realised that the wisdom of that was to avoid becoming entangled in machinery.

16. In assessing whether the plaintiff was guilty of contributory negligence because he leaned over the roller or failed to turn it off before doing so, I have regard to the system which the first defendant provided for him and in particular to the fact that for much of his working day, when working as a benchman, he was required to work in a position which at times must have been close to the unguarded and rotating feed roller. It was part of the environment in which he was required to work. What he was doing was what he believed his employer expected him to do. I adopt the following passage from the judgment of von Doussa J in Fennell v Supervision and Engineering Services Holdings Pty Ltd (1988) 47 SASR 6 at 17:

"The real cause of the plaintiff's injury was the

deficiencies in the system of work. The court should

be ever careful not to transfer the blame from an

employer or party responsible for ensuring a safe

system of work for the protection of the worker to the

worker himself by finding that his adoption of an

inadequate system amounts to contributory negligence

unless the risk of injury arising from that system was

clear, and it can truly be said that the worker was

foolhardy in attempting to achieve his assigned task in

the manner which the inadequate system required. This

is not a case where the plaintiff was acting in

contravention of an instruction which he had been

given. He was attempting to make the best of the

system, such as it was ...".

17. In State Rail Authority of New South Wales v Wiegold (1991) 25 NSWLR 500 at 509 Samuels JA, with whom the other members of the court agreed on this point, said that in a true "system case" it will be rare for a worker's acquiescence in the unsafe system to constitute contributory negligence. In such a case it is ordinarily impossible to regard the employer's failure to take care for the worker as amounting also to a failure by the worker to take care for himself.

18. In this case the plaintiff, in the course of using his employer's system of work, inadvertently moved into a position where his clothing became entangled with the roller while he was concentrating on pouring a stream of water onto the spinning blade. It should not be concluded that his injury was suffered partly as a result of his own fault by performing his duties for the first defendant in the manner expected of him. The allegation of contributory negligence is rejected.

19. Through coming into contact with the saw he lost a large part of his left non-dominant hand, involving amputation of the second, third, fourth and fifth fingers through the metacarpals. The amputation was obliquely across the palm. To my eyes he is left, in non-medical terms, with his thumb and the pad of muscle leading from the thumb to the wrist. At the mill a tourniquet was applied to his arm and he was driven fifteen minutes away to a doctor's surgery at Exeter. An ambulance collected him there and took him to the Launceston General Hospital where he remained an inpatient for a month until 17 July 1986. On the night of his admission he was taken to theatre and reimplantation was attempted by sewing back on the severed part under general anaesthetic. He was taken to theatre a number of times whilst an inpatient. Unfortunately the reimplanted portion of the hand did not survive and became gangrenous and the hand was completely amputated through the original amputation line. A few days later a split skin graft from his left thigh was applied to the amputation stump. There is a resulting scar on his thigh. He is left with very little surface against which the thumb can effectively work. A surgeon's view is that there is an impairment of 75 per cent of the use of the hand.

20. Except at night he always has his hand covered up with a bandage or glove. He does this to keep it warm and to keep it hidden from the view of other people. It is a major and ugly deformity and his wish to hide it is understandable. He finds that people look at the deformity more if it is uncovered. It is very tender. He said if it was tapped hard "I'd probably end up screaming". He occasionally bumps it but endeavours not to do so. He has phantom pains sometimes, depending on the weather. When they occur he has a feeling "like your fingers are going flat out ... just moving around".

21. In his evidence-in-chief the plaintiff said that before the accident he played football, squash and tennis and swam. He cannot play football because of his injury and squash and tennis would be difficult for him because particularly for the purpose of serving he cannot hold a ball in his left hand. His evidence was that he cannot swim now because if he does so he swims in circles. His cross-examination and his father's evidence revealed however that the impact of these restrictions on his activities will not be very great. He could not remember if he had played football as recently as 1984 and he did not play it in 1985 or 1986. His father's evidence was that he finished with football when aged 16, which suggests that he had not played since 1981. Because he was not playing it for some time leading to the accident and because of his alcoholism I find that he almost certainly would never have played it again notwithstanding the accident. He agreed in cross-examination that tennis was not a big feature in his life although he had played occasionally. He had not played squash since early 1985 at the latest. I find that tennis and squash, indeed any sporting activity, would have been rare events in his life, particularly because of his alcoholism and because he had played little sport for possibly as long as eighteen months preceding the accident. As for swimming cross-examination revealed that he had only an occasional dip in his father's backyard swimming pool. He agreed that in the year or so leading to the accident his main "recreational pursuit" and spare time activity was drinking. He also played eight-ball and snooker in hotels where he was drinking.

22. He can dress himself but has some limitations in that regard. He cannot do up shoe-laces. No doubt there are a number of domestic and other chores with which he has difficulty. His mother makes meals for him which he keeps in a freezer. She cuts the food up for him because he cannot hold a knife or fork in his left hand.

23. He believes that he has become bad-tempered since the accident and easily roused to anger. He concedes that drinking too much alcohol is a cause of it. He is self-conscious of people looking at his injured hand and tends to have fights with people. I have no doubt he is usually drink when he does so. The injury may have contributed to such problems to some extent. His wife left him in 1993 but the evidence does not establish that the accident was a cause of that.

24. Following his discharge from hospital on 17 July 1986 he was reviewed on a number of occasions later that year and in 1987. Consideration was given to grafting on to the remains of his hand a finger from the other hand or a toe to give his thumb something to grip against. However, he rejected any suggestion of an operation which involved amputation of a finger or toe and I am satisfied that his decision was a reasonable one. A few years later he had the residual stumps of his metarcapals trimmed in Hobart by a plastic surgeon because of discomfort. About two years after that, in November 1993, he was admitted to the Launceston General Hospital because of similar symptoms, they being continual throbbing pain in the hand caused by the growth of quite prominent spikes over the residual stumps of the bases of the second and third metarcapals. Some form of operation was performed to remedy the problem with incisions being designed to bring some palmar skin up over the residual stumps to provide a more healthy soft tissue coverage. He was discharged some nine days later and reviewed in the outpatients' clinic. Problems with residual stumps where skin coverage is poor can be a recurrent problem due to appositional bone growth in the residual periosteal tissues. It is possible that he may require further trimming at some time in the future. It is impossible to forecast however other than to say that it may be required as often as every three or four years or it may never be required again. If it is he will probably require two days in hospital and expenditure of approximately $2,000 a time.

25. I turn to consider the effect of the plaintiff's injury on his capacity to earn income. He was born on 8 February 1965 and was 21 years of age when the injury was suffered. He was a poor student and at the beginning of grade 9 at Riverside High School, in March 1980, when he was just 15 years of age, he terminated his education. His parents were bus proprietors and able to secure his exemption from education by providing him with employment. They did so because his continued schooling seemed pointless to them. He worked for them as a labourer for about nine months. He helped to build a garage for buses and did some maintenance work, including maintenance on buses. His father gave evidence that it was difficult to find work for him all the time and it was something of a relief when other employment was found, it being about nine months of mixed unskilled work on a dairy farm under some government sponsored scheme. Under the same or a similar scheme he was then employed for another nine months on a pig farm. Following that he was unemployed for a number of months, perhaps six, until he worked for an uncle for about a year splitting wood.

26. He was next able to secure employment with the Beaconsfield Council as a labourer and tractor driver. From information he gave for the purposes of medical treatment in October 1984 and January 1985, and from his evidence, it appears likely that his employment by the council commenced in about November 1983. During the early part of that employment he was convicted of a drink-driving offence with a blood alcohol reading of .15 grams of alcohol per 100 millilitres of blood but he was able to keep his job. In March 1985 however he was again convicted of a drink driving offence and lost his licence. Because it was a second conviction he did not qualify for a restricted licence. He resigned from his job with the council because he was disqualified from driving tractors as required by his employer.

27. Within about a month or so he moved to Broken Hill where he worked for about 4 months in a mine. He resigned from that employment because he thought it too dangerous. There was some period of unemployment while he was in Broken Hill. He returned home to Tasmania by December 1985 and remained unemployed until on or about 4 April 1986 when he commenced his employment with the first defendant. He has not been employed since the accident on 16 June 1986.

28. Because of his poor education and lack of skills he was destined to employment as an unskilled worker and probably only as a labourer. He has had no clerical experience. Some time after coming out of hospital in 1986 he went to the first defendant's mill where he tried to stack palings and found that skin was rubbed off his forearm and he could not do the work properly. Recently he applied to some form of scheme to do a small engine mechanics course. He was rejected because of his physical handicap. He has made some efforts to obtain work through the Commonwealth Employment Service but has been unsuccessful. Although he says that he could drive a tractor or a truck he is clearly disabled to some extent in that regard and at times he would find it almost impossible to load or unload a truck and he would have great difficulty performing tasks required of him in the course of working with a tractor.

29. It is most unlikely that he will ever be able to obtain employment again because of his disability as a result of the accident. He cannot grasp anything with his left hand. I suppose there is a slight chance that he might be able to secure a limited form of employment in good times but that is improbable. A major issue in this case however concerns the extent to which he would have been able to earn income from employment even if the accident had not happened. There is no doubt that he was an alcoholic at the time of the accident and it is the defendants' case that his chances of continuing to earn income would have been significantly reduced by his addiction to the extent that damages for loss of earning capacity should be substantially reduced.

30. He started drinking at about the age of 12 years. His father admitted to recognising that he had a drinking problem when he was aged about 17 years. The first record of him attending for treatment because of it at the Launceston General Hospital is on 23 October 1984 when he was aged 19. He was admitted for six days for detoxification. At that time he had a history of decreased appetite, haematemesis, diarrhoea and abdominal pain. He admitted to drinking an average of twelve stubbies of beer each day and "lately" he had needed one prior to going to work. In evidence he admitted that he first started vomiting up blood in his late teens or early twenties but he denied drinking before work. I prefer to accept the hospital record as more accurate because I did not find him to be a satisfactory witness so far as accuracy of recollection was concerned.

31. On 16 January 1985 he was admitted to the hospital again for six days, the final diagnosis being recorded as "probably haematemesis", alcohol abuse and detoxification. It was recorded that he drank eight to ten stubbies of beer each day and more at weekends, spending $80 to $100 each week on beer. It was also recorded that his first drink of the day was at 4.30pm which I take to be a reference to immediately after work on workdays.

32. In March 1985 he was referred by a doctor at the Launceston Alcohol and Drug Service to the John Edis Hospital in Hobart for treatment for his alcoholism. In the course of driving there from Gravelly Beach, where he lived, he was intercepted by the police with a blood alcohol reading of .18 grams of alcohol per 100 millilitres of blood. The police took him to the hospital. The following day he discharged himself against medical advice. Three days later he returned drunk. Eleven days later he was discharged against his wishes, having absented himself the previous day without permission.

33. Although at one point in his evidence the plaintiff disputed that he had a major problem with alcohol at that time, it is without doubt that he did have one. He conceded that vomiting up blood was a frequent occurrence in the period of four months leading to the commencement of his employment by the first defendant and he agreed that at the time of the accident he was an alcoholic and that he knew he was going to keep drinking for the rest of his life. I am satisfied he was drinking substantially to excess virtually every day. When he was admitted to hospital on the day of the accident his daily consumption was recorded as about twelve stubbies of beer. I find that he was the source of that information.

34. His excessive consumption of alcohol has continued since the accident. His evidence was that his average consumption is a dozen stubbies a day which suggests nothing has changed. I gained the impression however from his evidence and that of his father that he has been consuming a little more alcohol since the accident than before because of his enforced idleness and addiction. It is possible that his consumption is the same but spread over more of each day. For some years until 1993 he lived near Scottsdale and between 1989 and 1993 he was admitted to the North Eastern Soldiers' Memorial Hospital at Scottsdale for fourteen periods, varying from one to seven nights in duration, for one or more of the following three conditions, namely, acute alcoholic gastritis, acute alcoholic hepatitis and acute on chronic alcoholic pancreatitis. On many occasions he requested his own admission and on most occasions he took his own discharge. Between 1987 and 1992 he was admitted to the Launceston General Hospital on four occasions for periods varying from five to thirteen nights because of his alcoholism. He has been admitted several times since and has attended many times at an outpatients' clinic for similar reasons. Alcohol abuse has caused him to have fits and a variety of other medical complaints. On occasions in 1993 he made apparent attempts to commit suicide. Marital breakdown appears to have been at least part of the reason for that.

35. Consideration of his pre-accident employment history does not reveal a man likely to hold lengthy periods of employment. For much of the period of six years three months following leaving school until the accident he was employed, perhaps for as long as five years in all, but of that employment nine months was provided by his parents to assist him to leave school, eighteen months was provided by government schemes and one year was provided by an uncle. Whether the work of splitting wood for his uncle was full or part time was not explained by the evidence. Consumption of alcohol and driving having done so caused him to give up his job with the Beaconsfield Council and in the period of approximately fifteen months thereafter, which led to the accident, he was unemployed for a total of possibly nine months over two periods. I find that if the accident had not occurred there was every likelihood that the plaintiff would have continued to consume alcohol to a grossly excessive degree and his health would have been severely damaged in the way it has in fact been. I expect that he would have experienced increasing difficulty in holding and obtaining employment. Unless he gave up drinking alcohol he could never have been expected to hold a driver's licence for a significant time. His reputation as an alcoholic would have increased. His periods of absence from work for medical treatment would also have increased.

36. It is of course impossible to say with certainty that he would have become permanently unemployed and, if so, when. It is impossible to be certain that if the accident had not occurred he would have been unable to abstain from the consumption of alcohol, either permanently or for a lengthy period or periods. These matters are impossible to forecast now but I am satisfied that on the evidence of his consumption of alcohol prior to the accident and of the evidence of it since which shows little change and worsening health, it is more likely than not that he would have become permanently unemployed eventually. Notwithstanding this I must allow in the damages a sum for loss of earning capacity having regard to the fact that he had employment at the time of the accident, and to his prior history of employment. The award of damages must allow for the possibility, which I do not regard as great, that he would have been able to give up alcohol completely and keep substantially in employment.

37. The plaintiff gave no evidence about his intentions to continue working at the first defendant's mill but for the accident. It is an agreed fact that the first defendant went into liquidation on 24 June 1991. I take judicial notice that unemployment levels in Tasmania have exceeded ten per cent for many years and that unskilled workers have been hardest hit by unemployment.

38. It is an agreed fact that an appropriate description of the plaintiff's duties were those of a "puller out" and award rates of pay for a puller out from the day of the accident to 1 March 1994 were also agreed. At the time of the accident the award rate was $197.90 per week after tax and the Medicare levy. I will not set out all the figures. They show a steady increase in the award rate over the years to $305.25 on 9 August 1981 where it remained until 1 March 1994. The figures show that the award rate for a puller out from the accident on 16 June 1986 until 1 March 1994 would have netted a total of $105,962.02. The first defendant's wages book reveals that the plaintiff was paid $4.40 per cubic metre of timber cut and not at an award rate. Regard should be had to the fact that over the short time he was working for the first defendant his average weekly earnings were about $20 per week more, after tax and the Medicare levy, than the award rate. Regard should also be had to the chance that with experience he might have earned at a greater rate. On these bases I estimate that if he had kept in full time employment until today he probably would have earned about $130,000 after tax and the Medicare levy.

39. The evidence of his receipts since the accident was imprecise. For about a year after the accident he received $200 each week from an accident insurance policy. I should ignore those payments. In about June 1987 he commenced to receive sickness benefits and after a while he commenced to receive the invalid pension instead. He now receives a disability support pension which replaced the invalid pension. The rate at the date of the trial was $191 per week. For much of the time following the accident he was married and living with his wife and presumably the pension rate was different than the single rate. He and his wife separated last year. I was given no information as to earlier pension rates. He said that he receives the disability support pension because of the disability in his hand and not also because of his alcoholism.

40. By agreement I was given some information of worker's compensation paid to the plaintiff by the defendants. It was in this form:

"1 30th June 1989 - 1990:-

(a) Gross weekly payments 33,920.00

Tax thereon paid by the Plaintiff 9,729.00

Net $24,191.00

(b) Department of Social Security $14,930.51

2 30th June 1990 - 1991

(a) Net weekly payments 16,373.12

Tax 4,589.90

(b) Department of Social Security 7,005.98

Total paid by Defendant $76,819.51

Additional payments:

Hospital $2,259.75

Medical and travel $9,297.06

Rule 5 $21,542.00"

Without objection statements were made by counsel concerning

those figures:

1 The amounts shown as paid to the Department of Social

Security were paid as a consequence of the liability of the

defendants to pay workers compensation to the plaintiff and

the liability of the plaintiff to repay the Department.

2 The plaintiff's claim to workers compensation was resisted

on the ground that he was an independent contractor. That

issue was litigated and it was found that he was a worker

under the Workers' Compensation Act 1927. In the meantime

he had been in receipt of social security and the first

defendant had gone into liquidation. The second defendant

paid the amount of weekly compensation that was due from the

date of the accident to the date of the order that

compensation be paid. The second defendant had been served

with a statutory demand to pay to the Department of Social

Security a sum equal to the amount paid to the plaintiff by

way of social security.

3 The figures set forth in par1 above should not be taken to

represent workers compensation payable in the year

commencing 30 June 1989. The total of $48,850.51 shown in

par1 as having been paid included weekly compensation due

for earlier years.

41. I assess the value of the plaintiff's lost earning capacity as a result of the accident, for the period since the accident until today, at $65,000 which is a sum equivalent to half my estimate of what he would have earned if he had remained in full time employment. I assess the value of his lost earning capacity for the future at $95,000 which is a sum equivalent to about 25 per cent of the figure he might have been awarded if calculated on the basis of full time employment to the age of 65 years in about 35 years time, applying a discount rate of 3 per cent. In expressing my assessments in these ways I should not be taken as having determined that if it were not for the accident he would have worked for half the time since the accident until now and he would have worked for about 25 per cent of the time between now and his 65th birthday. It is impossible to make a confident prediction of what might have been if the accident had not occurred. The sums I have arrived at are those with which I find myself most comfortable having regard to all the evidence.

42. The figures of $65,000 and $95,000 have been arrived at without regard to the receipt by the plaintiff of sickness benefits, invalid pension and disability support pension. Counsel for the plaintiff argued that the court should not have regard to the receipt of those benefits and pensions. On the other hand counsel for the defendants argued that entitlement to the benefits or pensions should be taken into account in mitigation of damages for lost earning capacity in the past and in the future. He referred to the provisions of the Social Security Act 1991 and to Camm v Salter (1991) Aust Torts Reports 81-131 for support. That was a case concerning interest on damages and it is of little assistance. Counsel also referred to Sorenson v Woolnough 32/1989 in which Underwood J took into account the likelihood of future eligibility to receive unemployment benefits and reduced the damages for future lost earning capacity by 10 per cent. Since the trial of this case Wright J has published his judgment in Burbury v Sievers 83/1994 where at 47 and 48 his Honour held that in assessing the value of the loss of future earning capacity it is appropriate to take into account any right which an injured person may have to receive a disability support pension.

43. Prior to amendments to the social security legislation which came into force on 1 May 1987 the Social Security Act 1947 (Cth) provided for the repayment of sickness benefits to the Commonwealth out of any damages recovered. It followed from this that entitlement to sickness benefits was not taken into account in mitigation of damages for loss of earning capacity, either past or future. Baird v Roberts (1977) 2 NSWLR 389; Hall v Grimwood (1979) Tas R 220. There was no legislative provision for the repayment of invalid pensions out of damages recovered but notwithstanding that it was settled by Redding v Lee [1983] HCA 16; (1982-1983) 151 CLR 117 that an entitlement to the invalid pension should also be ignored for the purpose of assessing such damages. On the other hand, Redding v Lee also determined that unemployment benefits should be set off when assessing damages for loss of earning capacity. Amendments to the legislation which came into force on 1 May 1987 equated all three of those types of benefits and there is now provision in the legislation for the repayment to the Commonwealth of all or part of the payments of those benefits out of damages recovered and for a preclusion period during which benefits may not be payable if damages are recovered. The relevant provisions of the legislation are to be found in the Social Security Act 1991 Part 3.14.

44. In my opinion the answer to the question whether an entitlement to sickness benefits, invalid pension or disability support pension ought to be taken into account should be the same regardless of the type of social security payment to which the plaintiff was or will be entitled. I also consider that the answer should be the same regardless of whether a court is considering past or future loss of future capacity, although no account should be taken of an entitlement prior to the end of the preclusion period of s1165. If it were not for the judgments of Underwood and Wright JJ I think it likely that I would follow the principles applied by Ambrose J in Muscat v Statewide Industries Pty Ltd (1988) 1 Qd R 637 at 642-644 and by Thomas J, with whom Andrews CJ agreed, in Dabinett v Whittaker (1989) 2 Qd R 228 at 231-232. In the former case it was held that damages for diminution of earning capacity should no longer have discounted from them an entitlement in the future to unemployment benefits, because of the amendments to the legislation which commenced in 1987. In the latter case Thomas J held similarly as to both unemployment and sickness benefits. If I applied those cases I would hold to the same effect with regard to an entitlement to the disability support pension. I note that Professor Luntz in the 3rd Edn (1990) of his Assessment of Damages said that because of the amending legislation an entitlement to sickness benefits, invalid pension or unemployment benefits should not be taken into account when assessing lost earning capacity.

45. Notwithstanding my inclination to reject the argument of counsel for the defendants I feel obliged to follow the principles stated by my brother judges in Sorenson v Woolnough and Burbury v Sievers. How the plaintiff's entitlement to the benefits should be taken into account is a difficult question to answer. Both Underwood and Wright JJ recognised that it is unrealistic to attempt to assess the prospect of receipt of benefits or pensions in precise monetary terms. I have no evidence before me of average weekly earnings which would enable me to attempt a calculation of the preclusion period under the Social Security Act 1991, s1165, although I am satisfied having regard to the amount of my assessments of lost earning capacity and taking judicial notice that average weekly earnings in this country exceed $500, that the period would have ended over 2 years ago. The amount of the disability support pension received by the plaintiff at the time of the trial was $191 per week. The amount he received before is unknown to me. The amount he will receive in the future, and I think that under the current legislation there is little doubt he will be entitled to receive it, will depend on a means test. How that will affect him will depend on how he invests or otherwise applies the damages. Doing the best I can I intend to reduce the damages by $40,000, being my conservative assessment of the value of the plaintiff's entitlement to the benefits or pensions following the end of the preclusion period in past and future periods during which he might have been employed but for the suffering of his injury. It has been a difficult task to arrive at a figure. I received no assistance from counsel.

46. Counsel for the plaintiff submitted that I should allow as damages the total of $21,936.49 which the plaintiff was obliged to repay to the Department of Social Security out of the workers compensation payments received. I am unpersuaded in that regard. Repayment of that sum did not increase the plaintiff's loss occasioned by his injury. See Fox v Wood [1981] HCA 41; (1981) 148 CLR 438.

47. Out of the weekly workers compensation payable to the plaintiff by the defendants there was deducted a total of $14,318.90 for income tax. Under the Workers' Compensation Act 1927 the plaintiff must give credit for the workers compensation he received. In accordance with the principles established by Fox v Wood in circumstances where the damages for lost earning capacity have been calculated without a component for income tax there will be included in the plaintiff's damages that taxation sum, that is to say $14,318.90.

48. There will be included in the damages an agreed amount in the sum of $11,556.81 for these items.

OTHER HOSPITAL, MEDICAL AND PHARMACEUTICAL EXPENSES

49. I assess $7,000 under this heading for the cost of bandages and gloves and the possible future cost of surgery and hospitalisation.

50. For pain, suffering and loss of amenities I assess $40,000.

51. There will be judgment for the plaintiff against the first defendant (and presumably against the second defendant but I will speak to counsel about that) for $82,957.39 made up as follows:

Loss of earning capacity

past 65,000

future 95,000

$160,000

less provision for entitlement

to social security payments 40,000

$120,000.00

Taxation on workers compensation

14,318.90

Hospital, medical and travel

expenses 11,556.81

Other hospital, medical and

pharmaceutical expenses 7,000.00

Pain, suffering and loss of

amenities 40,000.00

192,875.71

Less workers compensation paid 109,918.32

$ 82,957.39