OCS AUSTRALIA PTY LTD v CHO [2010] NSWCA 85 | Case summary

Friday 23 July 2010 OCS AUSTRALIA PTY LIMITED v HELEN CHO Judgment 1 McCOLL JA: I agree with Handley AJA. 2 HANDLEY AJA: This is an appeal by the plaintiff, or if necessary an application for leave to appeal, from orders giving effect to reasons for judgment published by O'Toole DCJ on 11 February 2009. 3 On the morning of 7 February 2002 Mrs Janet Bowen, an employee of the appellant (the employer) injured her back in a motor vehicle accident (mva) on her way to work. The employer, having paid substantial amounts for workers compensation and medical expenses in respect of Mrs Bowen's injuries, on 30 August 2007 brought proceedings in the District Court against the driver of the other vehicle to enforce the indemnity provided for in s 151Z(1)(d) of the Workers Compensation Act 1987 in respect of such payments. 4 A court hearing such proceedings is bound, if the defendant's liability is established, to assess the damages the worker could have recovered from the tortfeasor (the notional pool). In Grant v Royal Rehabilitation Centre Sydney [1999] NSWCA 250, 47 NSWLR 263 at 265 Cole AJA giving the principal judgment said: "The legislature plainly had in mind that there would be one determination of the quantum of common law damages which the injured worker would have recovered, which determination would be binding as between the employer paying compensation to the injured worker, and the tortfeasor. Thereafter, once that limiting figure is known, both the employer and the tortfeasor, or his insurer, will know the extent to which the indemnity provided by s 151Z(1)(d) is recoverable from the tortfeasor. Certainty is introduced in the first proceeding. Accordingly it is incumbent upon the Court hearing the first claim for indemnity pursuant to this section to determine the amount of 'those damages' which would have been recoverable from the tortfeasor. That involves a determination of all of the constituent elements in such a damages claim." 5 The employer alleged that the mva was a material contributing cause of Mrs Bowen's injured back and her incapacity for work following that accident. It claimed indemnity for payments up to the trial totalling $167,221.24 and alleged that the notional pool was $720,998. The trial Judge was not impressed and assessed the notional pool at $3392. She dismissed the action because on 10 January 2005 the defendant's third party insurer made an "interim payment" of $112,452.84 to the workers compensation insurer. 6 The employer filed a notice of appeal as of right. The defendant claimed that the appeal was incompetent because the "matter at issue" for the purposes of s 127(2)(c)(i) of the District Court Act 1973 was only $53,878.45, the amount claimed after giving credit for the interim payment. The employer relied however on s 127(2)(c)(ii) of the District Court Act which confers a right of appeal which "involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more." 7 The Registrar reserved the question to the Court hearing the appeal. After brief argument the Court decided that it would hear the case as an appeal. 8 The competency of the appeal turns on whether it involves (directly or indirectly), "a question … respecting a civil right … of the value of $100,000 or more". The indemnity conferred by s 151Z(1)(d) is capped by the notional pool but otherwise extends to all payments under the Act past and future in respect of the injury. District Court proceedings claiming $53,878.45 were commenced on 30 August 2007 but the employer proved further payments after that date (blue 147). Payments are likely to continue for some considerable time. The right of indemnity attaches to each payment under the Act as and when it is made: A-G v Arthur Ryan Automobiles Ltd [1938] 2 KB 16 CA; South Eastern Sydney Area Health Service v Gadiry [2002] NSWCA 161; 54 NSWLR 495. 9 If the employer's right to the indemnity is established at the first trial the judgment will create issue estoppels for the right of indemnity and the notional pool which will be binding in later proceedings to recover further payments: Grant v Royal Rehabilitation Centre Sydney [1999] NSWCA 250, 47 NSWLR 263. Thus the outer limit of any future claims to indemnity by the employer will be the size of the notional pool, as authoritatively determined in the first proceedings. 10 The Court must be able to determine the competency of quantum appeals in personal injury cases without having to hear the appeal. Competency cannot depend on the result. Consequently a bona fide claim for the requisite amount that is susceptible of reasonable support is sufficient to demonstrate that the appeal involves a matter at issue of that amount: Cole v The Commonwealth [1961] HCA 87, 106 CLR 653, 656. 11 In A-G ex rel Duncan v Andrews [1979] HCA 24, 145 CLR 573 Gibbs J at 579-581 referred to decisions of the High Court and Privy Council on provisions equivalent to s 127(2)(c)(ii) of the District Court Act and held that competency under such provisions depended on the value of the property or civil right and not the value of the claim or question. Under s 127(2)(c) competency depends on the amount involved in the appeal on on the amount of the judgment: Dunn v Ross Lamb Motors [1978] 1 NSWLR 26. This appeal involved a question respecting a civil right, the indemnity, which the appellant reasonably contends has a value of $608,546 after giving credit for the interim payment. The appeal was therefore competent. 12 The Judge held that before the mva the worker's lumbar spine had been weakened by degenerative disease, work injuries in 1998, sundry aggravations and surgical interventions in 1999, and she was already partially incapacitated. The mva did not damage the structure of her lumbar spine but caused minor injuries from which she recovered. 13 The worker gave evidence that she was driving in one of two lanes of traffic proceeding in the same direction, wearing a seatbelt, when the defendant's vehicle coming the other way made a right-hand turn across its oncoming traffic and was struck on its near side by the worker's car and the car in the next lane. This caused a sudden deceleration of her car from 60 kph to zero. Some documentary evidence suggested that it was a low speed collision, but the worker's evidence was not challenged in cross examination and was not rejected by the Judge. 14 The appellant's challenge to the Judge's assessment of the notional pool necessitates an examination of the worker's evidence, medical records, and the evidence of the medical witnesses given orally and in report form. It is necessary to compare the worker's condition immediately before the mva on 7 February 2002 with her condition afterwards. 15 The evidence is not all one way, and evidence called by the appellant would have supported a very different assessment. However experienced senior counsel appearing for the appellant did not submit that the Judge's assessment was not supported by evidence and did not suggest that the Court could reassess on the written record. If the appeal were to be allowed there would have to be a new trial. 16 This concession was properly made because the worker, one of her treating doctors, and three medico-legal experts gave oral evidence and were cross-examined. There was a substantial body of documentary evidence, including radiological evidence, and evidence in report form from medico-legal experts. The trial took five days, and the Judge reserved for some months and had the benefit of the transcript. Her reasons of 54 pages contain an extensive review of the medical evidence. 17 Mr King SC, who appeared with Mr Catsanos for the appellant, directed his attack on the judgment to some of the Judge's inferences and some of her reasoning said to be unsupported or illogical. He also submitted that the Judge, despite her lengthy judgment, had failed to give reasons for some critical findings. 18 The judgment relevantly commenced with a chronological review of the doctors who treated the worker or reported on aspects of her condition. Her Honour then summarised the history. 19 In 1996 the worker returned to the workforce after many years devoted to child rearing. She commenced employment with St John Ambulance as a driver of a station wagon delivering and restocking first aid kits for customers. She had to bend her back and lift to retrieve stock from the back of the wagon. On 13 May 1998 as she retrieved a basket of kit components she felt an abnormal sensation in her back. She worked on for a while but developed incapacitating pain in her lumbar spine, left buttock, and left leg and went home. By 7 July she had substantially recovered and was working a six-hour day although this was shorter than before her injury. She still had to bend and lift and this exacerbated her chronic lumbar pain. 20 She suffered further incapacitating injuries to her back in the course of her employment on 23 October and 2 November 1998 and was off work for different periods. Thereafter, while she continued to work for St John, the pain in her lower back was aggravated by minor incidents at work. 21 The workers compensation insurer arranged for Dr Gudex to conduct a radiological examination of the worker. On 7 July 1998 he took an x-ray and a CT scan of her lumbar spine. He reported (supp 45) that the x-ray disclosed slight disc space thinning, minor osteophytes at L3, L4 and L5, and osteoarthritic lower lumbar facet joints particularly at L5-S1. The CT scan showed a slight disc bulge at L3-4, at L4-5 there was a moderately severe disc bulge, mild severity facet joint osteoarthritis, and slight central canal narrowing. At L5-S1 there was a more severe posterior disc bulge and osteoarthritic and asymmetric facet joints. His conclusion was: "Prominent central disc bulge at L4-5 … to the left of the midline. Osteoarthritic lower lumbar facet joints." 22 The worker's problems with her lower back persisted and she was referred to Dr Edmund Graham who saw her on 3 June 1999 (supp 55). He was sure that her problems were due to a disc lesion and advised a discogram followed by a discectomy. The discogram performed on 22 June was reported on by Dr Levitt (supp 56). Dr Graham reported (supp 57) that the lower two lumbar discs were disrupted. L5/S1 being the main offender was treated with enzymes and decompressed, and L4/5 only had the enzyme. 23 The treatment appeared to be successful and the worker enjoyed pain relief but this did not last very long (black 11). She returned to work full-time with St John but was struggling (black 11). Her back problems returned in late August and September and she was off work from 22 September 1999 until she and others were made redundant on 12 October (supp 72). 24 The worker commenced part-time employment with the appellant in 2001 and in June she became the personal assistant to the general manager working 32 hours a week over four days (black 14). Her back was problematic (black 15), she was struggling and after four days work it took her three days to recover (black 52). She reported this to Dr Saunders (black 270). 25 She was seen by Dr Davis on 1 November 2001 and he had the benefit of an MRI conducted by Dr Shnier on 23 October (supp 70). The latter reported that the worker had degenerative changes in the lower three discs of her lumbar/sacral spine which had been aggravated by her work injury on 13 May 1998 and that her lower back condition would deteriorate over time (supp 73). 26 The worker's problems continued and Dr Saunders referred her to Dr Diwan in June 2001. He reported on 12 July 2001 (supp 77) recording that her pain symptoms were present most of the time and were extremely bothersome. There was "extreme interference with her normal job", her symptoms were getting worse, and she felt suicidal (supp 79). He saw her again on 27 September 2001 and advised that she was heading for a spinal fusion (supp 83). 27 The worker saw Dr Harrison for medico-legal purposes on 4 October. She was recorded as saying that "her overall situation is worse" (supp 88). That with a four-day working week "she comes home tired, exhausted with aggravations of back pain troubling her quite considerably". She takes the three days she has off work to recover (90). He said that the most recent CT study (probably the MRI conducted by Dr Shnier) highlighted degenerative changes at the lower three disc levels in her back. He considered that the injury on 13 May 1998 was "substantially responsible for her current condition" (91). "She is not certain she will be able to carry on such is the extent of the aggravation of pain in her back and legs which she gets through the course of [her] work" (92). 28 Dr Bryant conducted a CT examination of the worker's lumbar spine on 9 November 2001. He reported little change at L3/4 and L4/5 since his x-ray and CT scan on 7 July 1998. However there was disc bulging at L5/S1 on the left, and there could have been a little compression of the left L5 ganglion (supp 100). A bone scan by Dr Quinn on the same day confirmed "moderate disco vertebral arthritis at the L5/S1 level on the left" (101). 29 The mva supervened on 7 February 2002 and the worker was admitted to Canterbury Hospital. Dr Gaden's report (blue 7) on an x-ray (red para [124]) of her lumbar spine taken at 11 am that day reported normal alignment and no fracture. Dr Loneragan's report on an x-ray of her lateral lumbar spine taken at 2.14 pm that day showed normal alignment at the lumbosacral junction and that the vertebrae and disc spaces also appeared normal (blue 277). On 22 April 2002 she had an MRI of her lumbar spine by Dr Shnier (supp 118) who reported that desiccation was present at several levels particularly at L4/5 and L5/S1. There were some small postero-central disc protrusions at L4/5 and L5/S1. 30 On 8 March 2002 the worker felt much better and Dr Saunders concluded that her condition had stabilised. She permitted the worker to resume Pilates and certified her capacity for four hours' work a day for four days. The worker went back to work the next day. She worked for various periods until 22 May 2002 when Dr Diwan performed an L3/4, L4/5 intradiscal annuloplasty. This provided the worker with immediate relief but again this was short lived. 31 Following post surgery rehabilitation the worker returned to work on 1 July 2002 and worked for varying periods. However on the morning of 9 July while the worker was getting dressed "something gave way in my back" (black 54), "something snapped" in her lumbar spine causing severe, incapacitating pain in her back and legs (red [148] and "it really got bad" (black 27). She reported this to Dr Saunders (black 266-7), and told Dr Carr that her back went into spasm (27 May 2003 supp 147). 32 On 11 July 2002 Dr Bryant took an x-ray (supp 130) of her lumbar spine and reported "there is several millimetres of forward slip of L4 on L5" (supp 131). 33 Mr King challenged the judgment on two broad grounds. He first focused on particular passages which he submitted evidenced errors of fact or reasoning. His second challenge was that the Judge's reasons were little more than a summary of the evidence with few actual findings and her conclusions in paras [216]-[227] failed to give any or any proper reasons. In short the judgment was deficient because there were neither sufficient findings nor sufficient reasons. 34 The criticisms of particular paragraphs in the Judge's reasons were of varying weight and significance. In [33] the Judge said that Dr Rabone had advised GIO against paying for an IDETA procedure on the worker's back because Dr Diwan, who advised that procedure, had got his history wrong. This was said to be incorrect but the comparison of Dr Diwan's report (supp 78-9 "a repeat injection") with that of Dr Graham (supp 57) demonstrates that the latter administered two injections at different levels in the worker's spine. Dr Rabone's report (supp 82) can fairly be read as giving this as one of several reasons for advising against the procedure. 35 In [42] the Judge referred to Dr Carr's medico-legal report of 27 May 2003. He interviewed the worker, but did not examine her because she was recovering from her spinal fusion. The Judge said that for this reason Dr Carr's opinion was of limited assistance. This was criticised, but I find no error in the Judge's approach. 36 In [50] the Judge said that Dr Saunders was reluctant to speak audibly, and it was difficult to follow her oral evidence. The Judge also criticised her record keeping as unintelligible. It was submitted that these criticisms were unjustified, they had not been brought to the attention of the witness or counsel, and there had been a denial of procedural fairness. The Judge referred to some of these matters during address (black 232) and her criticism of the legibility of the photocopied records is not unfair if the copies in the appeal books are a reliable guide (blue 97-120). During the relevant period the witness practised at three locations and had records from each (blue 67). The transcript reveals that the Judge commented on the audibility of Dr Saunders' evidence while she was in the witness box (black 271, 277, 278), and the witness did have difficulty with her own handwriting (black 276, 278). 37 In [51] the Judge referred to Dr Patrick's medico-legal report of 18 December 2007, which was favourable to the appellant, and said, correctly, that he was misinformed about parts of the history. No doubt this was why he was called to give oral evidence based on different assumptions. The Judge said: "Dr Patrick's oral evidence is based on different assumptions. Therefore his opinion of Mrs Bowen is of limited assistance to the Court." This was criticised as illogical and not a reason for devaluing his evidence. 38 The quoted passage from the Judge's reasons is a little obscure, but the Court should be slow to adopt a meaning which would make the reasoning illogical. She refers to "his opinion" in the singular. It is also necessary to identify the "different assumptions". In my view she was comparing the assumptions in his written report with those he was asked to make when giving oral evidence. On this basis the Judge should be understood as saying that Dr Patrick attempted to support an unchanged opinion on the basis of very different assumptions. This is supported by the transcript of his oral evidence. The passage, so understood discloses a logical and reasonable basis for treating Dr Patrick's opinion as of little assistance. 39 In [52] the Judge refers to Dr Matalani's medico-legal report of 25 January 2008 and said, correctly, that he too was misinformed about important parts of the history. No doubt this was why he too was called to give oral evidence based on different assumptions. The Judge again said that "his opinion" was of little assistance. Mr King's criticisms of the Judge's reasoning in this paragraph are rejected for the reasons given in relation to the evidence of Dr Patrick. 40 In [62] the Judge refers to the opinion of Dr Bryant based on his comparison of the film taken by Dr Gudex on 7 July 1998 (supp 45) with those he had taken on 9 November 2001 (supp 100). Dr Bryant reported that L3/4 and L4/5 were "relatively unaltered", but he identified changes at L5/S1. The Judge said that this was "consistent with the progressive nature" of the worker's spinal degeneration. It was said that the meaning of consistent in this context was not clear, but I see no difficulty. The condition in L5/S1 had changed, inferentially for the worse, which was to be expected because the condition was progressive. 41 The Judge said [21] that the results of the radiological investigations must be interpreted clinically. Mr King adopted this as the basis of his criticism of the Judge's finding in [86] that Dr Levitt's report on the discogram conducted by Dr Graham on 22 June 1999 (supp 56) "confirmed" Dr Graham's diagnosis of the same date (supp 57). The Judge was not interpreting Dr Levitt's report, but reading Dr Graham's. 42 The Judge introduced her reasons in [66]-[216] headed "The facts" with the statement [65] "Attributing proper weight to the unchallenged evidence I find the following facts". However as Mr King pointed out, a great deal of what followed was a recitation of evidence without a clear finding as to what it had or had not established. 43 Many of the paragraphs refer to the worker's description of her symptoms in the histories given to doctors, and their opinions. These statements were made but it is not clear whether the Judge accepted the truth of the statements and the soundness of the opinions. Moreover, as Mr King submitted, the "unchallenged evidence" was not identified. 44 In [108] the Judge referred to the report of the Commonwealth Rehabilitation Service (blue 2) of 5 November 2001 that stated that the worker "was coping well with no difficulties" in her work for the appellant. The Judge found that this was not accurate and referred to the evidence she relied on. Mr King submitted that the bulk of the evidence did not support the Judge on this point but I disagree. In any event there was evidence to support her finding and she was entitled to make it. 45 The Judge introduced her reasons [216]-[227] with the heading "Conclusions". Mr King directed particular criticism at the finding [216] that the worker "understated her disabilities and overstated her capacity in order to obtain employment". It was said that this was never put to the worker and that there was no evidence to support it. The former is correct, the latter is not. This was Dr Saunders' opinion (black 270, 273, 282) and that of Dr Middleton (blue 50). 46 The Judge's conclusions contained a number of express findings. In [216] she found that the worker's employment injuries and work for St John between 13 May and 23 October 1998 "aggravated her lumbar spinal disease and permanently incapacitated her for repetitive bending, stooping, twisting and lifting". She also found that the treatment administered by Dr Graham "increased the instability of [her] lumbar spine". 47 In [217] the Judge held that the worker's capacity decreased between August 2000 and February 2002 and she became incapable of prolonged static or sedentary postures and full-time clerical work. Any change resulted from the natural progression of her degenerative disease or from Dr Graham's treatment. 48 In [218]-[219] the Judge found that the collision caused minor injuries which temporarily aggravated the worker's lumbar and lower limb pain but the effects were transient. 49 In [220] the Judge held that the appellant had not established that the collision had destabilised the worker's spine or caused any material damage to her spinal structures. The implied finding is that she accepted Dr Korber's opinion based on a review of all the relevant radiology, summarised in [59], that the collision caused "no major alteration" in the workers disrupted discs at L3-S1. 50 In [222] the Judge held that the worker was incapacitated after 9 March 2002 "by her degenerative spinal disease, by injuries, illnesses, and accidents, and by hospital, medical and surgical procedures unrelated to the collision." 51 In [224] the Judge found that the IDETA procedure carried out by Dr Diwan on 22 May 2002 destabilised of the worker's lumbar spine "and caused her incapacitating lumbar and lower limb pain between July 2002 and March 2003" necessitating "the disc replacement surgery" on 18 March 2003. The implied finding was that she found that the back injury suffered by the worker 9 July 2002 while getting dressed ([30] above) was caused by the instability created by the IDETA procedure. 52 These are all primary findings and on their own would probably have discharged the Judge's duty to give adequate reasons for her decision. However she had earlier made other findings. 53 In [20] the Judge held that contemporaneous records of the worker's complaints, clinical signs, and movements during medical examinations were more reliable than her oral evidence of "distant events and their sequelae." 54 By finding in [51]-[52] that Drs Patrick and Matalani were misinformed she necessarily found about the worker was not coping with 38, 35, or 30 hours' work a week before the collision, and that the collision did not injure her lumbar spine or permanently incapacitate her. 55 In [56] the Judge's reference to "the preponderance of medical opinion" indicates that she found that the worker's degenerative spinal disease was progressive. 56 In [83] the Judge's statement that the ensuing events vindicated Dr Rabone's opinion that the worker's L5/S1 disc injury was caused by her work for St John and had caused permanent impairments was a finding about those matters. 57 In [87] the Judge found that Dr Graham's procedures "increased the instability" of the worker's lumbar spine. 58 In [104] the Judge found that the workers struggled with her work before the collision because of leg and back pain, and she had difficulty with her back and her domestic duties. 59 In [108] the Judge found that before the collision the worker could not recline or sit comfortably, her sleep was interrupted by pain, that her four-day, twenty-eight hour working week exhausted her, aggravated her pain, and required her to rest for the next three days. 60 In [111] the Judge found that before the collision the worker was "incapable of 28 hours' work" a week with the appellant. 61 In [112] and [119] her findings that the histories given to Dr Davis and Dr Hume were incorrect necessarily evidenced findings to the opposite effect. 62 In [148] the Judge made findings about the injuries sustained by the worker on 9 July 2002 while she was getting dressed. 63 In my judgment any doubts about the sufficiency of the Judge's reasons in her "Conclusions" in [216]-[224] are removed by the additional findings express or implied referred to in [52]-[61] above. 64 The appeal should be dismissed with costs. 65 SACKVILLE AJA: I agree with Handley AJA.

OCS AUSTRALIA PTY LTD v CHO

At a glance

Court

Decision date

Before

Source

Judgment (16 paragraphs)

Parties

Cases Cited (4)

Cited By (2)