2 The plaintiff sustained injuries in two accidents which arose out of and in the course of his employment with the defendant in March and August 1978. Although the plaintiff was actually working as a bushman for a logging enterprise run by his father, the defendant accepts that he should be treated as its employee for the purposes of the Workers' Compensation Act 1927. The plaintiff suffered a lumbar disc prolapse at the level of L4-5. For present purposes it is accepted that it does not matter which accident caused the injury, although it would seem more probable that it was the later one. He was off work for seven days in March 1978 and between 14th August and 4th December 1978 as a result of these accidents. The following year he was likewise off work between the 7th March and the 22nd May. He was paid workers' compensation on the basis of total incapacity for work during those times.

3 His duties as a bushman at the time of the accidents included driving a log skidder, falling trees, loading logs onto trucks and barking logs. It was heavy work requiring agility and fitness. The plaintiff worked in rough terrain and the use of plant exposed his body to jolting. He was then aged 20 years and had been engaged in the industry for approximately five years. He saw his future as a bushman. I find that at all material times, but for his injury, work as a bushman was and still is available to him.

4 In May 1979 he received a "light duty" certificate and the defendant after placing him on road maintenance for two weeks then placed him for approximately 12 months in its Longreach store, creating a special job for him. Work on the road gang involved duties as a tally clerk and later he drove a front end loader loading gravel and a tractor pulling a vibrator roller to compact roads. He said (and I accept his evidence) that he can only drive these vehicles for short times before needing a spell and that he could not cope with them on a full time basis because the bouncing of the machine and the fact that he had to sit in the same position were beyond him. At the store he did clerical and courier work and the only problems he recalled encountering were in sweeping the floor and occasionally if required to sit in the one position for any length of time (which was an infrequent occurrence). On the 7th May 1980 the plaintiff's forest manager wrote to him in these terms:-

"We are of the opinion that your back injury has reached a stable situation and that our commitment to retrain you and assist in your rehabilitation has been fulfilled.

It is with regret that we must terminate your employment on Friday the 20th June 1980.

You are free to seek employment in any situation you may consider suitable."

In this period of time, according to the defendant's records, he lost seven days' work due to back pain.

5 After this retrenchment he issued proceedings for the recovery of workers' compensation payments, but in April 1981 the defendant re-hired the plaintiff and those proceedings were discontinued. I have not been asked to determine any claim in respect of the nine month period prior to that time. However, I find that in that time he registered at the Commonwealth Employment Service and applied unsuccessfully for quite a number of jobs in various forms of employment. He was provided with a reference by the defendant for use in such applications in these terms:-

"26th March 1980

TO WHOM IT MAY CONCERN

Mr Ross Padgett has been employed by this company during the period April 1979 until now and is currently employed at the Tamar Woodchip Mill (rehabilitating from a workers' compensation injury).

Information relating to the injury and this company's liability is available on request.

Ross has been trained particularly in stores procedures and can be highly recommended in this field.

Having the forest operations background in logging works, we used his abilities to advantage in various sampling and checking work in this field, and were very pleased with his results. He is able to recognise species, check log quality to specifications and in fact, handled all work given, learnt quickly and showed a natural ability for forestry type work.

We recommend him to prospective employers as a most capable employee who can be relied upon to give his best efforts."

I find (and there was no real challenge to this) that the plaintiff has never been fit since the accidents to resume work as a bushman. That work is simply too heavy for him.

6 On the 6th April 1981 the defendant re-hired the plaintiff in its forestry division to fill in for a man suffering from a heart condition. His work included weighbridge duties, species checking and quality control, planting and general duties in the propagating nursery, fencing and some firefighting. Anxious to preserve his place in the work force the plaintiff worked conscientiously at his tasks which ranged from light or medium work to occasionally heavy work. Three months between September and December 1981 were spent at Kiln Dried Hardwoods spent mainly in checking log quality and measurements. In May 1982 the plaintiff suffered another accident when he slipped and fell and was off work for a short time. He lost no time at all in the 13 months prior to that accident. After working a further six to eight weeks the plaintiff was finally retrenched by the defendant on the 3rd August 1982 on the basis that no further work was available for him. Although the plaintiff was able for limited periods of time to engage in quite heavy work, the general level of strenuousness was considerably lower than that involved in his pre-accident work. At some time during this period the possibility of a permanent job at the weighbridge at Herrick, a small hamlet in north eastern Tasmania, was raised. The plaintiff did not decline it but he did not follow it up, as its remoteness would have required his wife to give up her nursing career. It was not strongly submitted that there was any unreasonable refusal or failure by the plaintiff to accept this work, and I do not regard it as "suitable employment" for the purposes of r.3 of the first Schedule to the Act.

7 Three months after his second retrenchment, the plaintiff again registered with Commonwealth Employment Service. From August 1982 I find that the plaintiff made determined and repeated efforts to obtain employment. He said, and I accept, that he could not recall seeing any job within his capabilities which he did not apply for. His only success in obtaining employment since that time has been in working for various enterprises run by his father or brothers.

8 Between August 1982 and the 30th June 1983 the plaintiff was employed on a casual basis by Rama Rural Pty Ltd, a company owned and run by other members of his family. The work was light and consisted mainly of delivering rural products to customers. In the next financial year the plaintiff obtained further work with that company and received pay of $300. In October 1983 he and his wife went to Queensland for a holiday and it was not until the 1st January 1984 that he resumed casual work for family companies. He makes no claim in respect of that period of three months. By the 18th June 1984 he had received a further $4,016 in wages from A C Padgett Pty Ltd and K J Padgett Pty Ltd for casual work doing odd jobs such as gardening, clerical work and deliveries, being paid at an hourly rate.

9 The plaintiff's brother is an inventor and employed the plaintiff training him to operate an invention for testing ewes for pregnancy. The wages were low as the project had not achieved much commercial viability, but no other work was available and it was hoped that the invention would be very remunerative and would provide the plaintiff with secure income greater than his maximum workers' compensation entitlement. Between the 18th June 1984 and the 25th September 1984 when it was decided not to persist with the pregnancy testing project and he embarked on his present employment he received $300 and earned a further $1,000 which has not yet been received by him.

10 Since the 25th September 1984 the plaintiff has been working on another family enterprise promoting a further invention of his brother, a "Crab-Crab", which is a device for loading logs onto jinkers. The evidence indicates that there is considerable potential for the commercial success of this invention and the plaintiff has been employed on a regular weekly wage of $250. He is the sales representative of the company and does a large amount of clerical work.

11 Dr E D McIntyre, an orthopaedic surgeon of considerable experience called by the plaintiff, gave evidence of treating him since July 1979. He diagnosed the lumbar disc injury and was of the opinion that the plaintiff had the physical capacity to undertake light to moderate work only on a continuous basis, although he is capable of occasional heavy work. The plaintiff's actual work experience was put to him by counsel for the defendant and he found nothing in it inconsistent with his own observations and impressions and the history given him by the plaintiff. Likewise he found nothing inconsistent in a movie film taken surreptitiously of the plaintiff showing him moving relatively light furniture and working on and under cars with no apparent discomfort or stiffness. The plaintiff had told him since November 1980 that he was about 85% recovered on most days but that he still experienced a few bad days when he could not work at all. Considerable criticism was made of the plaintiff's answers sworn in November 1983 to certain interrogatories in which he claimed in substance that the ill effects of the second accident (August 1978) had continued in varying degrees ever since, that he has never been free of discomfort and stiffness and pain, that sometimes he can engage in strenuous[1] activity but usually any lifting activity or walking over uneven ground soon causes "an unbearable worsening of the pain". He also said of the period between the dates of the accidents and the time of swearing his answers:-

"The period and discomfort seem to fluctuate. The stiffness seems fairly constant but I am never wholly free of either pain, discomfort or stiffness which is sometimes made very much worse after activity. The acute pain has diminished over the years because I take care not to do things which aggravate it. Basically I feel the ill effects described whilst they might have diminished somewhat in the earlier period have since that time remained unchanged."

Although the claim regarding stiffness seems inconsistent with the activities revealed by the film, I see nothing inconsistent between the remaining complaints and either his present evidence or the history given by him to his medical advisers.

12 Dr McIntyre's opinion was that the plaintiff could not return to his pre-accident work and that he should avoid heavy manual work. He did not think driving heavy machinery on a regular basis was within the plaintiff's capabilities, mainly because of the jolting. Truck driving itself was within them, but not as a regular occupation if he was required to lift heavy objects or cope with maintenance such as changing tyres.

13 The defendant called Dr Dermott Morgan, another orthopaedic surgeon of considerable experience, who agreed with much of Dr McIntyre's evidence, but felt that the plaintiff was fit for most work other than very heavy work and specifically was fit for work as a plant operator or truck driver. In cross-examination he agreed that driving heavy machinery could have a tendency to make the plaintiff's back ache, the jarring effect being an aggravating feature, and that he should not load or unload trucks. Dr Morgan felt that the plaintiff could cope with occasional exigencies such as changing truck tyres but agreed that he would be wise to seek less strenuous work to lessen the risk of further injury and that sitting for long periods of time can aggravate back injuries. He considered that the plaintiff could drive bulldozers, trucks and heavy machinery through a 40 hour week, but expected him to be caused back ache thereby and said that there was a possible, though not likely, risk of further injury if he did so. I prefer Dr McIntyre's evidence, but even if Dr Morgan's view is correct, I would not regard it as reasonable to expect the plaintiff to undertake that kind of work with the probable consequence of back ache and the possibility of further injury being sustained. It should not be regarded as suitable employment within his physical capabilities.

14 The defendant also called evidence that the present award rates for a storeman, a clerk grade 1 and a courier driver exceed the present ordinary time rate of pay for the work in which the plaintiff was engaged. The company had no vacancies for any such positions at the time of the trial and there was no evidence to suggest that there had been any vacancies in any material time.

1 The plaintiff has permanently lost the capacity to engage in the kind of employment he had prior to the accident in 1978.

2 Had he not lost that capacity, such work would have been available to him at all material times.

3 He is not totally incapacitated for all work. He has the capacity to engage in every kind of light to moderate work in which he has from time to time engaged since 1978, including specifically work as a storeman, a clerk grade 1 and a courier driver.

4 Work as a plant operator or truck driver is not "suitable employment" within the meaning of r3(1) of the first Schedule to the Act for the reasons I have given.

5 The plaintiff has made all reasonable endeavours to procure employment at a rate not less than the ordinary time rate of pay for the kind of work he was engaged in at the time of the relevant accident ("the relevant compensation rate"). Such pay as he has received has at all material times been less than that amount, but has been the maximum amount, in all the circumstances, procurable by him.

16 Rule 3(1) of the first Schedule to the Act is in the following terms:-

"3-(1) Subject to this rule, where total or partial incapacity for work results from an injury sustained by the worker, the compensation payable under this Act is, in addition to any lump sum that may be payable under rule 5 or rule 6 in respect of that injury, a weekly payment at the relevant compensation rate reduced, in the case of a period of partial incapacity, by the weekly amounts that the worker is earning or able to earn in some suitable employment or business during that period."

17 The plaintiff contends that in the circumstances what he has in fact earned is as much as he is able to earn for the purposes of that rule and that he is entitled to the difference between the relevant compensation rate at each material time and the lesser amount he has earned. The defendant on the other hand submits that in as much as he is physically able to do the work of a storeman, a clerk or a courier driver and other light to medium work which returns wages equivalent to or greater than the relevant compensation rate, no compensation is payable to him.

18 I think the short answer to the defendant's submission is that in my view the best evidence I have of the plaintiff's ability to earn wages is the uncontradicted evidence of what he is in fact earning and the absence of any basis for supposing that he has acted unreasonably in accepting that amount or that he has declined any realistic opportunities to obtain better paid employment. In Heathcote v Haunchwood Collieries Ltd [1918] AC 52, the House of Lords unanimously upheld the award of an arbitrator who had based it on what the worker was in fact receiving, notwithstanding that there was evidence that other work of which he was capable was more remunerative. Lord Finlay LC said this at p55, referring to the crucial words in the English statute:-

"'Is earning or is able to earn,' the second branch, covers two cases - first, that the man is not taking any work at all, and therefore earning nothing, and, secondly, the case where he is taking work which yields less wages than he might have got if he chose to look out for other work and took that. You must deal with the question of what work he might get with reasonable diligence. The workman here is earning 30s a week as a driver. Though he is capable of working as a packer who would earn 7s 5d a day, there is no finding that such work was available for him or that he acted otherwise than reasonably in taking a situation as driver at 30s a week. Under these circumstances he was entitled to 5s a week, the difference between the 35s he was earning before the accident and the 30s he is earning now."

"There is one point ... which in one sense arises for consideration in this [case], and that is upon the words 'is earning or is able to earn'. I have no doubt that although prima facie what a man is de facto earning must be taken into consideration first, yet it would be perfectly possible for those who objected to that figure being taken to urge and show that the amount he was earning was not really what he might earn if he took proper steps to get the most remunerative employment he could find. I have not a doubt that that inquiry would be perfectly competent but I think it is in accordance with common sense that if you find a man actually at work you would always begin at least with the consideration of the figure which he was actually earning."

"My Lords, I think as to par3 itself that it is perfectly obvious, if one takes the whole object of these Acts and rules into consideration, that the object to be effected by the words 'which he is earning or is able to earn in some suitable employment' was to prevent an employer being mulcted by an injured workman either refusing to work at all, or deliberately taking a wage less than he could have got; and it certainly appears to me that once you have a man in employment earning a wage it is for those who allege that that is not bona fide - that he is taking less than he could get and thereby imposing a greater burden upon his employer to prove it."

"Where an amount is being earned in fact and there is no suggestion that the man has acted unreasonably in accepting that weekly amount, it is perfectly competent for the arbitrator, as a matter of fact, to deal with that as an ascertained figure in fixing the amount of his award."

19 I am satisfied the plaintiff has made genuine efforts to find better paid work than he has had, that he is an energetic type of man who desires such work and has been frustrated by his failure to obtain it, that he endeavoured notwithstanding pain and discomfort to keep the jobs the defendant withdrew from him and that he has not declined any work reasonably available to him within his capabilities. No evidence has been adduced by the defendant suggesting that there is presently available better paid work and indeed the defendant, a large employer, has itself no such job vacancies.

20 However, it was urged upon me that a consideration of such cases as Cardiff Corporation v Hall [1911] 1 KB 1009 and Bevan v Nixon's Navigation Co Ltd [1929] AC 443 would require me to find that the plaintiff's physical ability to do work paying more than the relevant compensation rates deprives him of any right to compensation on the basis that his inability to procure such employment is not a consequence of his injury but is due to the general state of the labour market, for no employer can guarantee that.

21 In the former case Cozens-Hardy MR, who was in the minority, said at p1013:-

"This state of facts raises the question whether an employer, admittedly liable to pay compensation for an accident which disables the man from following his former occupation, can obtain an order for the termination or reduction of the compensation by merely proving physical ability to do light work without either offering to provide such work, or adducing some evidence that light work can be obtained in the neighbourhood where the man resides, and of a suitable character.

In my opinion, apart from authority, this question should be answered in the negative. The effects of the accident have not been removed, and I cannot think that the workman ought to have his compensation reduced merely on the ground that he is physically able to do a different kind of work, which, in truth, cannot be procured. It is not a case in which the effects of the original injury have completely disappeared so that the man is as capable as ever he was. In that case the employer, who does not guarantee the labour market, is free from all further liability."

The majority view was expressed in these terms by Fletcher Moulton LJ at 1020:-

"It is impossible to hold that the employer necessarily or generally guarantees the conditions of the labour market where there is partial incapacity any more than he guarantees that the workman shall get employment where incapacity has for the time ceased. An example will make this clear. Suppose that in the business of a mechanical fitter there is a class of work requiring a special fineness of touch or keenness of sight so that it can only be done by persons specially gifted in these respects and that it accordingly commands higher wages. Suppose also that an accident happens to one of these first-class fitters which injures his sight or touch to such an extent that he now has that sense only in an average degree of perfection, and thus is qualified only for the work of an ordinary fitter, but which does him no other injury. His position after the accident is that he has lost thereby the difference of earning power of a first-class fitter as compared with an ordinary fitter. But he has lost no more. I can see no reason why his chance of obtaining employment or his power of earning wages should be treated for any purpose as different from that of a man who has all his life been an average fitter, and, inasmuch as the employer does not guarantee the state of the labour market for one who is and has previously been an average fitter, I cannot see why he should guarantee the state of the labour market for the workman who has now become one. There can therefore be no general principle, i.e. a principle true in all cases, that in the case of partial incapacity the employer is required not only to shew what work the workman can do but also to shew that he can get such work."

"But on the other hand I am also of opinion that there are cases in which the onus of shewing that suitable work can in fact be obtained does fall upon the employer who claims that the incapacity of the workman is only partial. If the accident has left the workman so injured that he is incapable of becoming an ordinary workman of average capacity in any well-known branch of the labour market - if in other words the capacities for work left to him fit him only for special uses and do not, so to speak, make his powers of labour a merchantable article in some of the well-known lines of the labour market, I think it is incumbent on the employer to shew that such special employment can in fact be obtained by him. If I might be allowed to use such an undignified phrase I should say that if the accident leaves the workman's labour in the position of an 'odd lot' in the labour market, the employer must shew that a customer can be found who will take it. For in such a case we are not in truth dealing with fluctuations of the labour market at all. We are dealing with the chance of someone being found who can and will avail himself with the special residue of powers which has been left in the workman, and, seeing that it is the result of the accident that the workman has been made dependent on the finding of such a special employer, it is right that those who are liable to pay him compensation for his loss of earning power should only be allowed to take credit for his partial capacity for work if they can shew that it can actually be made productive of remuneration to him."

It was on the latter part of his Lordship's remarks that the well known decision of Ball v William Hunt & Sons Ltd [1912] AC 496 appears to have been based. There, a workman lost the sight of his left eye through an accident but continued to work at his old rate of wages. Many years afterwards he met with a second accident to his left eye which necessitated its removal. On his recovery from the operation he was unable to obtain work in his employment in consequence of his being manifestly a one eyed man, although his ability to work remained exactly as it was before. The House of Lords held that he was entitled to compensation for he was left by the accident in such a state that he could not get work in the market.

22 The House of Lords was invited to overrule Cardiff Corporation v Hall in Bevan v Nixon's Navigation Co (supra) which was decided at the time of the notorious Great Depression. The House declined to do so, despite a spirited dissent from Lord Shaw of Dunfermline. The facts of that case are set out at p45 of the report:-

"The appellant was a collier and worked at the face. He had been employed by the respondents for forty years up to 1919. At that time his wages were £2 13s 3d per week. In April, 1919, he was certified as suffering from the industrial disease of nystagmus. This prevented him from working at the face. Up to May, 1920, he was paid full compensation as for total disablement at the rate of £1. By this time he was fitted for surface work though not for work at the face, and he was employed on surface work up to 1922 when the pit ceased working. It was reopened in December 1926, and was still working at the time of the hearing. From June, 1922, till May 1927, he was paid on the basis of partial incapacity. The sum actually paid from December 2, 1926, to the May 17, 1927, was at the rate of 15s 1d per week. Since June, 1922, he was unable to find any surface work. On April 29, 1927, he filed a request for arbitration alleging that the compensation to be paid to him should be raised from 15s 1d to £1 per week as from December 2, 1926. The respondents countered this by a demand that the compensation should be reduced to 5s 3d as from May 17, 1927. This was based on an assertion that he was able to earn, in spite of the nystagmus, wages of £2 2s 8d per week, and that his inability to find work had no connection with the nystagmus.

The case came before the arbitrator. He found certain facts of which the material stated in proposition are these:-

(1) That but for the nystagmus the appellant would be getting work at the face and would be earning £2 13s 3d per week.

(2) That his physical condition with the nystagmus fitted him for surface work for which at current rates he would be paid £2 2s 5d per week.

(3) That he could not get surface work solely on account of labour conditions."

23 Though some of their Lordships expressed reservations about the correctness of the Cardiff Corporation decision, insofar as it was based on the interpretation of an earlier Workers' Compensation Act, the majority took the view that later amendments had reinforced the correctness of the decision. Those amendments incorporated the substance of the present r3(2)(f) which reads as follows:-

"(f) Where a worker has so far recovered from the injury as to be fit for employment (but only for employment of a more limited kind than the employment in which he was engaged before the date when the injury was sustained) and proves to the satisfaction of a judge that he has taken all reasonable steps to obtain, and has failed to obtain, employment of any such kind and that his failure to obtain that employment is a consequence wholly or mainly of the injury (including the physical disfigurement of the worker), the judge may, notwithstanding any other provision of this Act or any earlier order, award, determination, or decision made under this Act by any judge in the case of that worker, order that his incapacity shall continue to be treated as total incapacity for such period and subject to such conditions as the judge determines, and upon the making of any such order compensation in accordance with this schedule shall be paid to that worker accordingly."

"My Lords, I am unable to resist the light on the whole position thrown by this section. It seems to me necessarily to exclude the idea that 'able to earn' applies to any circumstances not personal to the man himself. It deals expressly with the case of the man who cannot find work and it sets the criterion whether the failure to find the work is due wholly or mainly to the accident. Here we are faced with the finding in fact that the failure to find work was due solely to the state of the labour market, but that state of affairs is expressly excluded by the section."

Were it the case that the plaintiff's inability to procure any kind of work within his capabilities was due only to the general state of the labour market, it would seem that he should be treated as having an ability to earn such wages as that kind of work commands. However, I am not prepared to make such a finding. There is no evidence of the general state of the labour market and, while it is a matter of common knowledge that many people are out of work in Australia and the kind of jobs in question are not easy to find, I am far from satisfied that this energetic seeker of work is deprived of it only because of a general down turn in trade. On the contrary, it would seem far more likely that prospective employers, to whom he quite properly and with commendable candour reveals his general condition as set out in the reference already quoted in these reasons and prepared by the defendant with a view to its accompanying such applications, are reluctant to accept a man with his limitations when younger and fitter men are also seeking work of the same kind. While he may not fit the description of an "odd lot" apologetically proffered by Fletcher Moulton LJ in the case of Cardiff Corporation v Hall (supra) I am satisfied that he has not the ability to earn greater wages within the meaning of r3 because he can properly be said to fit the following description by Earl Loreburn LC in McDonald or Duris v Wilsons & Clyde Coal Co (1912) A C 513 at 517:-

"He is under an incapacity if his condition makes his labour unsaleable or saleable only at a lesser wage."

24 Accordingly, I am of the view that the plaintiff has established that he is partially incapacitated for work and that the relevant compensation rate should be reduced by his actual earnings only, they being in fact all that he has been able to earn. On the figures supplied by counsel for the plaintiff, he is entitled to a net figure of $22,946.18 to the 16th April 1985 in addition to the sum of $4,440 already paid. Thereafter the relevant compensation rate is $303.50 to be reduced by the sum of $250 which he is able to earn from his present employment and he is therefore presently entitled to be paid from that date at the rate of $53.50 per week until the maximum sum payable of $32,319.20 is exhausted or his entitlement is otherwise varied or ceases.

tasInLaw edit: The paper copy has "strenous"[.]