Plaintiff v Defendant

2 In this proceeding, Wesfarmers (of which Liquorland is a subsidiary),[2] a self-insurer, seeks to recover, under s 138 of the Accident Compensation Act 1985 (the Act), from Linfox payments of compensation made to Ms Zealley in respect of her workplace injury, the subject of the contribution judgment.

3 The findings made in the contribution judgment are applicable and binding in this case. However, those conclusions do not address all the matters agitated in the proceeding. In particular, the following issues need to be resolved:

(a) What is the proportion of liability of Linfox under Factor X of the formula contained in s 138(3) of the Act.

(b) Whether the assessment of damages payable by Linfox as Factor A of the s 138(3) formula is limited by reason of a subsequent event said to be unrelated to its tortious conduct - namely, the termination of Ms Zealley's employment by Liquorland, with an associated psychiatric reaction.

(c) Dependent upon the answer to (b), the assessment of Ms Zealley's damages, as Factor A of the s 138(3) formula.

4 To be more specific about the issues raised in paragraphs (b) and (c), Ms Zealley continued to work, with difficulties, at Liquorland for over a year after the accident in July 2008. However, in November 2009, and, notwithstanding attempts to maintain her work standards, her employment was terminated. Within a month of that termination, she experienced the first of a series of pseudo-epileptic fits called 'pseudo seizures', which have continued to plague her to the present time - indeed, in the course of giving evidence she experienced such a fit in the witness box.[3]

5 Linfox contended that the psychological stressors produced by the termination of her employment led to the pseudo seizures and should be regarded as breaking the causal chain between the accident and Ms Zealley's injuries. In effect, it said that its liability for damages ceased in or around the time of the termination of Ms Zealley's employment and the first seizure on 21 December 2009.

6 Ultimately, and notwithstanding the apparently callous actions of Liquorland in the termination of Ms Zealley's employment, I accept that her psychological condition (including the pseudo seizures) remains causally related to the injuries sustained by her in the workplace accident on 22 July 2008 and their sequelae, and that the chain of causation was not broken.

7 Pursuant to the formula, I have assessed Factor X at 60 per cent and the amount of damages under Factor A at $1,307,590.

The provisions of s 138 of the Act

9 The relevant parts of s 138 reads as follows:

138 Indemnity by third party

(1) Where an injury or a death for which compensation has been paid, or is or may be payable, by the Authority, a self-insurer or an employer was caused under circumstances creating a liability in a third party to pay damages or that would have created such a liability if the injury or death had been caused in Victoria or that would, but for section 134A, create such a liability in respect of the injury or death, the Authority, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section.

(2) In determining for the purposes of subsection (1) whether an injury or death was caused under circumstances creating a liability in a third party to pay damages or that would have created such a liability if the injury or death had been caused in Victoria in respect of the injury or death, Divisions 8A and 9 of Part IV must not be taken into account.

(3) The amount which a third party is required to pay as indemnity under subsection (1) is the lesser of -

(a) the amount of compensation paid or payable under this Act in respect of the injury or death; and

(b) the amount calculated, were it not for the provisions of this Act, the Transport Accident Act 1986 and Parts VB, VBA and X of the Wrongs Act 1958, in accordance with the formula -

where -

1. is the extent, expressed as a percentage, whereby the third party's act, default or negligence caused or contributed to the injury or death;

1. is the amount of damages (disregarding the extent, if any, whereby any other person's act, default or negligence caused or contributed to the injury or death) for pecuniary loss and non pecuniary loss which the third party is or would have been liable to pay in respect of the injury or death;
2. is the amount recovered or recoverable by the Authority, the self-insurer or the employer under section 137 from the Transport Accident Commission (otherwise than under a settlement);

1. is the amount paid by the third party in respect of the injury or death to the worker or the dependants of the worker under any settlement of, or judgment in, an action by the worker or dependants of the worker against the third party.

Relevant findings in the contribution judgment applicable in this case

10 The following findings in the contribution judgment are relevant to the disposition of this proceeding:

• Ms Zealley injured her back on the rear of a Linfox truck while assisting Mr Field in its unloading. This occurred as a consequence of restraining a roll cage that Mr Loran, the Linfox employee in charge of the unloading operation, had despatched.

• Mr Loran was not given sufficient training and was incompetent in carrying out the task of unloading roll cages from the Linfox truck.

• Ms Zealley was working on the rear of the truck because Mr Loran was incapable of performing his job adequately. In normal circumstances, the roll cage would have been unloaded by the driver alone.

• The unanticipated despatch of the roll cage by Mr Loran caused Ms Zealley to endeavour to restrain it and thus injure her back.

• The truck did not have a lip on the tailgate which may have stopped the roll cage from falling from the truck.

• The unloading accident produced an injury to Ms Zealley's back and psyche which worsened in 2009 and has continued to cause her significant disability.

• Ms Zealley should not have been permitted by her employer, Liquorland, to assist in the unloading of the back of the truck. The system of work should have prevented her from working on the rear of the truck. Her supervisor, Mr Field should have instructed her not to work on the back of the truck.

• Liquorland failed to manage her return-to-work program adequately. At times she carried out work beyond her certified limitations.

• On those occasions there were exacerbations of her back pain but the evidence did not establish any significant long term sequelae from those incidents.

Section 138 recovery: principles applicable to this claim

11 For a third party to incur a liability under s 138(1) a number of conditions must be fulfilled by the party seeking recovery.

12 First, and self-evidently, the compensable injury of the worker must be identified.

13 Second, there must be a legal liability on the part of the third party in relation to the compensable injury. This question was considered in depth by the Court of Appeal in Primary Health Care Limited v Giakalis,[4] in which the issue arose as to whether a self-insurer could recover, pursuant to s 138, payments of compensation made by it to a worker injured in a transport accident. The worker had not satisfied the serious injury provisions under s 93 of the Transport Accident Act 1986 (Vic) and it was contended that absent the existence of a serious injury, there was no legal liability as required by s 138(1).

The short answer to that issue is that s 138(1) cannot, on its terms, apply, unless the circumstances, in which the injury occurred, were such as to give rise to a legal liability in the putative third party to pay damages. The authorities, to which I have just referred, make it plain that no liability, for Ms Davies' injuries, could be asserted against the defendant, unless and until Ms Davies satisfied one of the three preconditions, specified in s 93 of the Transport Accident Act, for instituting proceedings against the defendant. In argument, counsel referred to the defendant as, currently, being subject to a 'contingent liability' to Ms Davies. That description, while useful, is to some extent, misleading. Rather, the appropriate analysis, on the authorities, is that the liability of the defendant to Ms Davies, which would have otherwise existed at common law, has been extinguished by s 93(1) of the Transport Accident Act, subject to a contingency, namely, that the liability may 'spring to life' in the event that the injured worker, Ms Davies, should access one of the three gateways in s 93 of the Transport Accident Act. Unless and until that occurs, any proceeding against the defendant by Ms Davies would not be justiciable, because of the extinguishment, by s 93(1), of any common law liability which the defendant would otherwise have for Ms Davies' injuries.

14 It is not necessary here to repeat the thorough and, with respect, cogent analysis of Kaye AJA. Subject to the provisions of s 138(2), it suffices to say that there must be an actual legal liability to engage a s 138 indemnity.

15 Section 138(2) excludes certain provisions of the Act in the determination of the liability of a third party; in essence, the serious injury regimes in their various iterations since 1992,[6] are to be ignored as well as what is known colloquially as 'the Black Hole'[7] in relation to injuries between 12 November 1997 and 20 October 1999.[8] Accordingly, the Authority or a self-insurer may be entitled to indemnity for payments of compensation pursuant to s 138 notwithstanding that the worker has not met the serious injury threshold (or thresholds) under the Act.

16 It is interesting, but of no consequence in this case, that in relation to the determination of the existence of liability under s 138(1), no reference is made in sub-s (2) to the operation of the provisions of the Wrongs Act or, for that matter, the Transport Accident Act (as the analysis in Primary Health Care Limited v Giakalis shows), which might affect a finding of liability on the part of a third party for a worker's injury.[9]

17 Moving on, the source of the liability under s 138(1) is not limited: to put it another way, whilst it will usually be a liability arising out of a breach of the duty of care owed by the third party to the worker it is not confined to a case in negligence. As I see it, there is nothing that would prevent the Authority or a self-insurer relying on a liability in a tort other than negligence (e.g. nuisance) or arising out of a contractual arrangement entered into by the third party in relation to the worker or his or her activities.

18 Third, the liability is not ethereal - it is to pay damages so, assuming that a relevant act, omission or breach is identified, there must be a causal link between that event and the occurrence of the compensable injury with consequent damage to the worker.

The First Issue: Does Linfox have a legal liability to pay damages - s 138(1)

19 I did not understand counsel for Linfox to contend that there was no liability on the part of his client to pay damages. Rather, it was argued that the extent of such liability (that is, the quantification of the damages under Factor A) was limited as a result of Liquorland's actions in peremptorily dismissing Ms Zealley.

20 The role of the alleged intervening event is not spelt out in Linfox's defence although it was clearly understood by the parties that it was asserted that the causal chain was broken by the termination of Ms Zealley's employment.

21 Determining at what point this issue (i.e. the role of the alleged intervening event) is to be resolved is no easy matter but, thankfully, it was not the subject of debate. For instance, arguably, it may (although I doubt it) have relevance under s 138(1) as to the extent of a third party's liability; alternatively, it may go to the question of causal potency in the determination of Factor X. Finally, it would necessarily have to be considered in the determination of the hypothetical damages payable by the third party in the calculation of Factor A.

22 As I said, fortunately, the parties were content to avoid any jurisprudential quagmire and, were content for me to analyse the issue as part of Factor A.[10] This, it seems to me, is a pragmatic resolution, as it ensures that this argument is not duplicated or results in double counting.

The Second Issue: Determination of Factor X under s 138(3)

23 In the contribution judgment, I held that Liquorland was 40 per cent and Linfox 60 per cent liable for payment of Ms Zealley's damages claim. But that does not resolve the apportionment in this case.

24 Linfox asserts that two other parties should bear responsibility (and thus reduce Linfox's percentage responsibility), namely Ms Zealley and Coles. [11]

25 I now deal with the case against each of the alleged tortfeasors.

26 I will not repeat my conclusions in this regard which are summarised at [10] and in the contribution judgment. It suffices to say that the primary responsibility for the unloading accident lay with Linfox. It failed to provide a competent driver and, in effect, created the situation which resulted in Ms Zealley being on the truck. The driver, Mr Loran, was responsible for the despatch of the roll cage, which caused Ms Zealley to endeavour to restrain it, thus injuring her back.

27 I will also not repeat my assessment of the responsibility of Liquorland for Ms Zealley's injuries and consequential loss in relation to the unloading accident and the management of her return-to-work plan, which are also summarised at [10] and in the contribution judgment. It is enough to say that Liquorland owed Ms Zealley a non-delegable duty of care, which it breached. Liquorland should have had in place a system of work which precluded its employees from working on the back of the truck - which was an obvious source of danger. Either Mr Ord or Mr Field should have instructed Ms Zealley not to get on the truck.

28 The particulars of negligence alleged against Ms Zealley by Linfox were as follows:[12]

(a) failing to exercise reasonable care for her own safety;

(b) failing to keep a proper lookout;

(c) failing to seek assistance;

(d) failing to comply with OH&S policies, procedures and directions issued by Linfox, her employer and/or Coles Supermarkets.

29 In my opinion, for the following reasons, there was no negligence on the part of Ms Zealley.

30 First, she was an employee carrying out her work duties under the supervision of her manager, who was watching what she was doing. It was not suggested that in working on the back of the truck she engaged in a frolic of her own or that such an exercise was contrary to the interests of her employer. To the contrary, she was endeavouring to further the interests of Liquorland in assisting in what she perceived to be the safe unloading of the truck.

31 Second, she was working under the direct supervision of Mr Field. He, or for that matter, Mr Ord if he was aware of the operation, could have put a halt to it or insisted that a more experienced person be despatched by Linfox to assist in the unloading. Neither gave any instruction to Ms Zealley in relation to desisting from carrying out the work.

32 Simply put, Ms Zealley was carrying out her job as best she could and no fault can be attached to her.

33 Linfox also asserted that Ms Zealley's injuries were due to the negligence of 'Coles Supermarkets'. The particulars alleged were:[13]

(a) failing to provide a safe place of work and a safe system of work;

(b) failing to implement and comply with a reasonable OH&S system;

(c) failing to properly induct, train, direct and supervise the worker;

(d) failing to issue appropriate OH&S directions to Linfox under the Transport Agreement;

(e) failing to notify the employer and/or the worker of Linfox's role under the Transport Agreement and the relevant terms and conditions upon which Linfox supplied its services under the Transport Agreement.

(f) failing to ensure that the employer developed and implemented OH&S policies and procedures that conform with the Transport Agreement;

(g) directing Linfox to use roll cages when providing services under the Transport Agreement.

Linfox then repeated the particulars alleged against Liquorland relating to Ms Zealley's unloading on the day of the accident and the return-to-work regime after the accident[14] which are set out in the contribution judgment.

34 In Wesfarmers' defence, this allegation is specifically directed toward Coles Supermarkets. It was clear that this company's only role, as far as the evidence disclosed, was to enter into the Transport Agreement.[15] No point was taken by counsel for Wesfarmers as to the appropriate identification of the Coles company or companies responsible for managing at an administrative level the return-to-work program. As I will now explain, correct identification of the responsible company has no bearing on my conclusion on this point.

35 The evidence of Mr Field confirmed that Liquorland was the entity which handled, in a practical sense, the return-to-work program.[16] The Coles administrative officers simply provided a clearing house for the return-to-work arrangements. The gravamen of the allegation is the implementation of the return-to-work plan consistent with the terms of medical certificates: that was the responsibility of Liquorland employees, and in particular Mr Field and Mr Ord.

36 I also reject counsel for Linfox's submissions that Coles should be held responsible because, along with Liquorland, it was involved in the design of the roll cage system.[17] There is no evidence that the design of the roll cage itself was in any way defective. As I have been at pains to spell out, the primary vice was the way in which the roll cages were unloaded by an incompetent and untrained Linfox employee.

37 No responsibility should be visited upon any Coles company apart from Liquorland.

38 It is appropriate to apply the apportionment of 60/40 Linfox/Liquorland as determined in the contribution judgment. Factor X is 60 per cent.

The third issue: determination of Factor A (damages) under s 138(3)

39 Factor A of the formula, set out at [9] of these reasons, requires the Court to assess the damages for pecuniary and non-pecuniary loss which, Linfox is or would have been, liable to pay Ms Zealley in respect of her injuries. As mentioned previously, s 138(3)(b) requires the Court to ignore the various restrictions on damages contained in Parts VB, VBA and X of the Wrongs Act.

Was the causal chain resulting from Linfox's negligence broken by the termination of Ms Zealley's employment?

40 The following propositions, I think, are uncontroversial.

41 First, the onus is on Wesfarmers to establish on the balance of probabilities that the accident was a cause of the injuries (and their relevant consequences) and that any assessment of damages premised on Linfox's negligence proceeds on that basis.

42 Second, that Linfox is only liable for the consequences of its negligence provided that the chain of causation remains unbroken. The appropriate test at common law (the provisions of Part X of the Wrongs Act are to be ignored)[18] is that set out in Mahony v Kruschich (Demolitions) Pty Ltd,[19] in which the High Court made the position clear:

...In negligence, "damage" is what the plaintiff suffers as the foreseeable consequence of the tortfeasor's act or omission. Where a tortfeasor's negligent act or omission causes personal injury, "damage" includes both the injury itself and other foreseeable consequences suffered by the plaintiff. The distinction between "damage" and "damages" is significant. Damages are awarded as compensation for each item or aspect of the damage suffered by a plaintiff, so that a single sum is awarded in respect of all the foreseeable consequences of the defendant's tortious act or omission. But concurrent tortfeasors whose negligent, acts or omissions occur successively rather than simultaneously may both be held liable for the same damage, being a foreseeable consequence of both torts, although one is liable for some only of the damage for which the other is liable and an award of damages against the one would necessary be less than award of damages against the other.[20]

A negligent tortfeasor does not always avoid liability for the consequence of a plaintiff's subsequent injury, even if the subsequent injury is tortiously inflicted. It depends on whether or not the subsequent tort and its consequences are themselves properly to be regarded as foreseeable consequences of the first tortfeasor's negligence. A line marking the boundary of the damage for which a tort feasor in negligence may be drawn either because the relevant injury is not reasonably foreseeable or because the chain of causation is broken by a novus actus interveniens. But it must be possible to draw such a line clearly before a liability for damage that would not have occurred but for the wrongful act or omission of a tortfeasor and that is reasonably foreseeable by and mistreated as a result of the second tortfeasor's negligence alone. Whether such a line can and should be drawn is very much a matter of fact and degree. In Dillingham, the plaintiff's condition after the subsequent injury was regarded as falling outside the area of foreseeable consequences of the earlier act of negligence.[21]

43 In other words, for the purpose of this case, there are two circumstances in which the chain of causation may be broken and a defendant not liable for the damage (and any award of damages) resulting from that damage beyond that point:-

• where the consequences of the negligence are not reasonably foreseeable. It is the kind of damage that must be foreseeable; it does not matter that the damage is more extreme than could have been foreseen[22] provided it is of the class or character that may be foreseeable.[23]

• where a novus actus interveniens breaks the chain of causation any change thereafter is too remote. In this case, the 'novus actus'[24] is said to be the intervening act of Liquorland terminating Ms Zealley's employment and therefore precipitating the pseudo-epileptic fits - thus a new cause of this condition. The words of Lord Wright in The Oropesa[25] are worth repeating here:

The question is not whether there was new negligence, but whether there was a new cause...To break the chain of causation it must be shown that there is something which I will call ultraneous, something unwarrantable, a new cause which disturbs the sequence of events, something that can be described as either unreasonable or extraneous or extrinsic.[26] (citations omitted)

44 I turn now to the factual background relevant to this argument.

45 After returning to Casey Central it is clear, as the reasons in the contribution judgment demonstrate, that the condition of Ms Zealley's back continued to compromise her ability to carry out her work duties. There were regular exacerbations of her back condition, both at work and at home, and the pattern was one of increasing disability. To this may be added that her psychological state became increasingly compromised, even with the assistance of Ms McDonald, her treating psychologist.

46 The following summarises the position in the period between Ms Zealley's return-to-work on 30 July 2008 and 27 November 2009 (most of which is set out in detail in the contribution judgment):

• Ms Zealley returned to work a week after the accident, eventually returning to full time duties in September 2009. She then suffered the first, of what would be many exacerbations to her back condition which progressively deteriorated.

• After each exacerbation it took longer for her back to settle down and her back flared up more readily.

• Throughout this period Ms Zealley was treated by Dr Kourdoulos who noted that her pain became progressively worse in 2009.

• Ms Zealley was referred to Ms McDonald in March 2009 because her back condition made her depressed.

• Ms Zealley's condition and pain levels increased during the return-to-work period.

• In or about October 2009, Ms Zealley attended a meeting with Mr Ord and a representative from head office (Mr Ord could not say whether they were from Coles or Liquorland,[27] Ms Zealley said they were from HR[28]) to discuss other employment options within the Coles organisation.

• Ms Zealley attended a subsequent meeting with Mr Ord and the representative from head office, where she was told that there were no alternative employment opportunities and her employment was terminated.[29]

• At that meeting Ms Zealley was given a letter dated 27 November 2009 signed by Mr Ord terminating her employment on 18 December 2009. She did not return-to-work at Casey Central to work after 27 November 2009. [30]

• Ms Zealley was traumatised by her dismissal. She valued her employment, had tried hard to cope with her injuries and was let down by her employer.

47 Below is a précis chronology taken from the various medical reports, as well as Ms Zealley's evidence, which sets out, as best I can, her medical history from late 2009 onwards:

• On 21 December 2009 Ms Zealley suffered a seizure at the chiropractor and was taken to Casey Hospital and then transferred to Monash Medical Centre.[31]

• On 27 January 2010 a normal brain MRI scan was carried out.

• On 20 February, 21 March and 21 April 2010 Ms Zealley attended Monash Medical Centre emergency with a history of increasing seizures.

• On 7 April 2010 an EEG was performed, reported as normal by Dr Udeaya Seneviratne, which was confirmed by Dr Bower, the treating neurologist: no indication of eleptiform activity.

• On 28 May 2010, Dr Bower reported that neurological examination was clear and that the clinical history and routine EEG were consistent with psychological non-epileptic seizures or pseudo-seizures.

• From September 2011 to June 2014 Ms Zealley was treated intermittently by Dr Hannerose Falkiner, a psychiatrist.

• From the time of the unloading accident to the present, Dr Kourdoulos has been responsible for Ms Zealley's treatment.

• From March 2009 to the present, Ms Zealley has been treated by Ms McDonald, the psychologist.

• MRI and CT scans of Ms Zealleys's lumbar spine carried out in October 2008, July 2009, and October 2014 did not reveal any significant pathology.

Medical opinion as to the cause of the seizures

48 The first attack occurred on 21 December 2009 in the rooms of Dr Andrew Arnold, a chiropractor, who described it as involving 'multiple seizures'.

49 In her report of 17 July 2014, Dr Falkiner, the treating psychiatrist, provides a helpful description of Ms Zealley's seizures:

[H]er eyes rolled back in her head, hands and feet shook, eyes were open, she did not react to people, went red in the face (not blue) made noises, was not wetting her pants or biting her tongue, had no foam on her mouth. She had numerous seizures since, does not remember the events... [t]he seizures last between 30 seconds and a minute, come in clusters, up to 40 at a time. Her EEG was normal. The first seizure went for three hours.[32]

50 The treating neurologist Dr Simon Bower conducted a series of tests set out at [47]. He concluded that the seizures are psychological and non[33]pileptic.33

51 Dr Owen White, a consultant neurologist, agrees with Dr Bower, that the seizures are psychogenic. He did not think that the back pain, per se, could have produced the seizures. He was 'unable to relate them to any particular cause' and deferred to the opinion of a psychiatrist.[34]

52 Neither doctor implicated the termination of Ms Zealley's employment as the trigger for the seizures.

53 Ms Zealley has been seen by five medico-legal psychiatrists.

54 Dr Geoffrey Hogan saw Ms Zealley in October 2010:

She suffers with constant low back pain with significant limitation of physical activities... I would regard Ms Zealley as clearly having depressive symptoms and I would regard her as having a psychiatric diagnosis of a chronic adjustment disorder with depressed mood moderate severity...I would regard her as clearly psychiatrically ill...I note that she suffers what are described by her G.P. as "pseudo-seizures" with seizure-like activity preceded by migraine headaches and marked exacerbations of back pain, which are said to be relieved with analgesic medication.

55 Dr John Gill saw Ms Zealley in December 2012. He said:

I would regard Ms Zealley as clearly having depressive symptoms and I would regard her as having a psychiatric diagnosis of chronic adjustment disorder with depressed mood of moderate severity.[35]

56 Dr Gill diagnosed a major depressive disorder and conversion disorder. As I read his report, the conversion disorder he refers to is that of the seizures. He described, on Ms Zealley's account, that she was very distressed at her employment being terminated.

57 Professor Ivor Jones saw Ms Zealley on three occasions. In his initial report in February 2010 he noted that the symptoms in her back were compounded by other independent difficulties of a relationship nature and the 'persistent pain that she evidently experiences compounds these problems.'[36]

58 In May 2010, Professor Jones was asked and answered the following:[37]

From what specific psychological/psychiatric condition is the worker suffer? Please provide diagnosis in the context of DSM-IV diagnostic criteria. If the diagnosis is pseudo-seizures would you consider them to be a sequelae of her accepted low back injury?

A: The probability is that Ms Zealley suffers from a conversion disorder, manifested in pseudo-fits, but I would like to see the neurological investigation before a definitive view is made. In my view while she is clearly unhappy and concerned she does not suffer from a DSM-IV diagnosis of depression.

59 In his subsequent report of 13 July 2010, Professor Jones opined that there were other issues in her life that were 'contributing to her disability quite as much as the problems with her back' but treated the seizures as 'having a psychogenic basis in conversional symptoms, indicating a psychogenic response to the sum total of her stressors.'[38]

60 Finally, in a report in June 2012:[39]

Q. Whether any psychiatric condition is related and any in what respect to any physical injuries -A. On present evidence, those psychiatric symptoms she shows appears to be precipitated by the pain she experiences in her back and to be in part a secondary consequence of that pain but the clinical nature would strongly suggest that this position to a response of this nature even though, so far, no clear history of early episodes has been obtained. Further, there is likely to be a contribution from other independent stresses to which she is subject.

61 In response to specific questioning by the solicitors, Professor Jones concluded that the symptoms were a secondary consequence of her physical injury and other stressors to which she is subject.

62 Dr Serry, who saw Ms Zealley once in 2011, made the following diagnosis:[40]

1. Pain disorder with psychological factors with a general medical condition.

2. Chronic adjustment disorder with depressed mood.

1. Pseudo-seizures which have otherwise been conceptualised as a conversion disorder.

He related each of these conditions to Ms Zealley's back injury.

63 In summary, each of the consultant medico-legal psychiatrists, aware of Ms Zealley's history (including several doctors who were aware of the effects upon her of both the work accident and the termination),[41] attributed the seizures to the ongoing back condition related directly to the work incident. Each treated the seizures as part and parcel of the overall psychological condition produced by the unloading accident and the subsequent back pain.

64 It is significant that no specialiast treated the termination of Ms Zealley's employment as the trigger (or sole trigger) for the onset of the seizures, although it is clear a number thought that the circumstances of her dismissal were contributing to her depression.

65 Dr Falkiner, who was responsible for Ms Zealley's treatment from 2011 to 2014, said:[42]

I see her psychiatric prognosis as guarded as her depression and pseudo-seizures are linked to her back injury and pain levels and pain and management is difficult to come by as it needs to be financed by the WC Insurance.

66 Dr Kourdoulos eschewed expertise on the attribution of a cause to the pseudo epiliptic fits.[43]. He was, however, willing to say that the psychological part of Ms Zealley's injury is probably now the major part of her condition,[44] but his view was that she still suffers from lumbar pain connected to the 2008 injury[45] and that her back pain has the greater impact on her capacity for work, which also affects her mental state.[46]

67 Notwithstanding his professed lack of expertise Dr Kourdoulos' opinion is of some assistance. He treated Ms Zealley prior to the accident and has been her primary medical carer since the accident. Moreover he has witnessed her have seizures on several occasions.

68 His opinion was that the seizures were brought on '[g]enerally when she's in a lot of pain, when she's having spasms in her back.'[47] The doctor also said stress is a factor[48] and that Ms Zealley tends to have an idea of when it is going to happen.

In the past she's told me ,'I think I am going to have a seizure' and it happens. I guess make sure that she isn't in too much pain when she comes in and she is not sitting for too long.'[49]

69 As to the onset of the seizures, Dr Kourdoulos considered that they were 'probably' connected with her termination,[50] but when asked by counsel for Linfox in cross examination the following exchange took place:

It really has to be the only cause doesn't it. Because it's nonsense that we go for a year and a half without a seizure and then within a few days of her dismissal - and we see your note on 30 December 2009 - she had a seizure that landed her at Monash Medical Centre? --- Yes.

It's got to be said that this is a profound shock reaction at her dismissal, doesn't it? --- I don't know.

70 When asked further about disentangling the various causes he said:

It's dill [sic]. You can't proportion how much is due to one thing and how much is due to another thing...

But to say what percentage is due to the injury in July 2008, what proportion is due to the termination, what proportion is due to the flare-ups during the course of her work, no-one knows the answers to that.[51]

71 The following answer of the doctor sums up, I think, the highly complicated factual scenario and the difficulty associated with attribution other than to say that the unloading accident was the precipitating incident:

It's obviously a complicated case. She injured her back. She suffered with secondary chronic pain syndrome which was probably exacerbated by her losing her job and her mental condition and now she has, as you have read in the reports, lots of secondary complications, probably all stemming from the whole injury and the Workcover injury and how - what happened at your workplace with her employer. So in terms of whether he back has gotten worse, I don't think it has. I think it's the same. But her level of pain may have increased during the last six years.[52]

72 In summary, Dr Kourdoulos did not treat the termination as being a singular new cause of pseudo-epileptic fits, rather, as I followed his evidence, it was one of a number of contributing factors to their onset.

73 Ms McDonald, Ms Zealley's treating psychologist, has been seeing Ms Zealley on a fortnightly basis since March 2009, when Dr Kourdoulos referred Ms Zealley to her because of 'anxiety and depression caused by her work injury.'[53]

74 In Ms McDonald's view, the pseudo-seizures are most likely caused by 'overwhelming emotional distress',[54] that is, the genesis of the seizures is entirely psychological, with no organic physical cause. Ms McDonald said:

I think Michelle is probably not processing what's actually happened to her consciously, she is avoiding that, and therefore it's sort of coming through in that way. But really, there's no definitive understanding of what causes these things so that's just my view.

Well that she's emotionally overwhelmed and not able to cope so that it comes out like this. That's what a conversion disorder is. [55]

75 As to what brings on a seizure, Ms McDonald stated that Ms Zealley 'tends to have the seizures when she does too much'.[56]

76 Ms McDonald could not provide a firm view about the precise cause of Ms Zealley's pseudo-seizures, agreeing in cross-examination that such seizures are very rare and that she had not encountered, or indeed heard of pseudo-seizures previously.[57]

77 Ms McDonald agreed that Ms Zealley's psychological condition existed before her termination but that afterwards, her psychological state was exacerbated. She said '[a]fterwards it was just more severe'.[58]

78 The pseudo-seizures commenced very soon after the termination. Ms McDonald observed that 'nothing happened after the dismissal and before the seizures that would have caused [the seizures].'[59] Ms McDonald did not say that the dismissal was the major cause. She observed that 'it was probably the whole thing but certainly the dismissal triggered it.'[60] But then again she also said that Ms Zealley would not have had the seizures, which form part of her psychological reaction to the accident, 'if she hadn't had the accident.'[61]

79 I have in the contribution judgment set out the opinion of Mr Hooper, the consultant orthopaedic surgeon who examined Ms Zealley after her accident.

80 Mr Hooper, who saw Ms Zealley on multiple occasions (in 2008, 2009 and 2010) diagnosed a discogenic back injury which would continue to affect her capacity to work and opined that she would continue to complain of some back discomfort into the future.

81 Mr Troy, who saw Ms Zealley on one occasion in June 2011 made a diagnosis of non-specific back ache which was ongoing and indefinite.

82 Mr Kierce who also saw Ms Zealley on one occasion in November 2010, opined that the physical injury had resolved.

83 In my view the opinion of Mr Hooper sits comfortably of that of Dr Kourdoulos. It is relatively contemporaneous to the unloading accident and the termination of Ms Zealley's employment. I think it should be accepted.

84 It is, clear, that the burden of the medical opinion in 2009 and 2010 was that Ms Zealley had sustained an organic disability of her back directly related to the unloading accident which would continue to affect her work capacity.

Was the causal chain broken by the termination of Ms Zealley's employment

85 I have set out the principles in relation to this enquiry at [40] to [43]. From the above I think the following can be accepted.

(a) that within less than a month of Ms Zealley being advised that her employment was to be terminated she suffered the first of her pseudo-epileptic fits (on 21 December);

(b) that her back pain was precipitated by the unloading accident and increased throughout 2009. This resulted in depression and a worsening of Ms Zealley's psychological condition;

(c) that the termination was a particularly traumatic event for Ms Zealley and caused her significant distress;

(d) that the pseudo-epileptic fits are psychological in origin;

(e) that the fits have continued unabated over the past six years and represent a significant interference with her lifestyle and her ability to obtain employment regardless of her ongoing problems with her back and psychological states.

86 In reality Linfox's case on this point rests on the cross-examination of the two treating practitioners (Dr Kourdoulos and Ms McDonald) and the temporal proximity of the seizures to the dismissal. Each was prepared to say that Ms Zealley's condition worsened after the termination of her employment. Each said there was a relationship between the onset of the seizures and the termination (only Ms McDonald was prepared to say it was the trigger).

87 Notwithstanding those opinions, for the following reasons I am of the view that it has not been established, consistent with the relevant principles, that Linfox is not liable for the damage to Ms Zealley resulting from the seizures.

88 First, foreseeability. The seizures are psychological in origin. As the authorities clearly establish, it is not necessary for the exact nature of the psychological injury to be foreseeable. Rather, what must be foreseeable is a psychological reaction to the physical injury. Sadly, there are many forms of psychological injury which manifest themselves consequential upon a physical injury and are patently forseeable. Notwithstanding that pseudo-epileptic seizures are rare, they are nonetheless, psychological sequelae of the back injury and as such, a foreseeable consequence of Linfox's negligent acts and omissions. All of the medico-legal psychiatrists regarded the pseudo-epileptic seizures as a product of the back injury. A number regarded them as a form of 'conversion disorder' which is a relatively common form of psychological consequence of a physical injury.

89 Second, a new cause: the evidence does not establish that the seizures were the subject of a new cause - the termination. To the contrary, there is no suggestion in the reports of the psychiatrists that the termination constituted a fresh and distinct cause of Ms Zealley's psychological condition (and particularly the seizures) as opposed to the back injury and its sequelae.

90 Moreover, the evidence of Dr Kourdoulos and Ms McDonald, when analysed, fails to draw the clear line of distinction necessary to break the chain of causation. Neither discounted the role of the unloading accident and the consequent back pain in her overall psychological state and particularly, the onset of the seizures. At best for Linfox, the tenor of their evidence is that the termination played a significant part in their occurrence, but that it is impossible to disentangle the component parts. Importantly, neither said that the effects of the accident had ceased to play a part. I repeat that none of the psychiatrists, including Dr Falkiner suggested that the seizures were unrelated to the accident.

91 I do not accept the proposition put by counsel for Linfox that the back injury was minor and that that the underlying back pain had, at some point in time, prior to the termination, ceased to play a part in the production of symptoms. The medical evidence to which I have referred (and particularly that of Mr Hooper, Dr Kourdoulos and each of the psychiatrists) establishes that the accident caused the back injury and the consequential psychiatric injury. It is clear that the back symptoms continued up until the time of the termination and the onset of the seizures. In any event, if I accepted (which I do not) the absence of an organic basis for the back pain, it does not mean that the psychological injury (in whatever form) is not related to the unloading accident.

92 At the end of the day, Linfox's case, as put by its counsel, relied on 'common sense' - namely, that the seizures, because of their proximity in time to the dismissal (and Ms Zealley's reaction to it) were solely caused by the termination of her employment.[62] Often, common sense can be used to resolve factual issues in trials. The problem in this case, however, is that this proposition ignores much of the evidence concerning the accident, its sequelae and the medical opinions relating to the cause of Ms Zealley's condition.

93 So, in summary, the causal chain was not broken by the termination. The effects of the unloading accident remained a cause of Ms Zealley's psychiatric condition after the termination of her employment. Factor A should be assessed on that basis.

94 Ms Zealley is now 44 years of age, born 21 December 1970. She was educated to Year 9 and left school when she was just short of 15 years old.[63] She has two children, whom she has raised as a single mother.

95 Prior to employment at Liquorland, from 1990 until 2006, Ms Zealley worked on a casual basis as a packer for Fletcher Foods. In September 2005, she obtained employment with Liquorland at their Cranbourne West store and her employment roles with that company are set out in the contribution judgment.

96 Ms Zealley had no major health issues prior to sustaining the workplace injury in the accident. She suffered a fracture of her coccyx at age 16 but had no ongoing back issues.[64]

97 Ms Zealley has suffered and continues to suffer back pain which restricts her from doing most things.[65] It has prevented her working and has significantly interfered with her domestic and social life.[66]

98 She is particularly restricted in carrying out her daily activities and requires help in the home. She does not drive any more because of the risk of seizures[67] and her sleep is affected.[68]

99 Ms Zealley takes a raft of medication: Endone, Epilim, Valium, Stillnox, Pristiq and Mersyndol Forte. She sees Dr Kourdoulos monthly or more frequently if necessary.[69] She continues to see Ms McDonald.

100 She has not worked since the termination of her employment by Liquorland.

101 A number of medical reports were tendered by Wesfarmers (some of which I have already referred to):

• Southern Health, Monash Medical Centre;[75]

102 In addition, reports of various scans and tests were tendered as well as the certificate of opinion of the Medical Panel dated 9 February 2011.

103 As I mentioned earlier, the two primary treating practitioners (the general practitioner, Dr Kourdoulos, and the treating psychologist, Ms McDonald) gave viva voce evidence.

104 It would be an unproductive and tedious exercise to summarise each of the medical reports and I do not propose to do so. Rather, I will set out parts of the relevant opinions of a number of the medical practitioners.

105 Dr Kourdoulos' opinion is set out in his most recent report of 7 August 2014:

Michelle Zealley continues to suffer with a chronic pain syndrome affecting her cervical, thoracic and lumbar spine. She has secondary depression and insomnia and suffers with pseudoseizures.

Prognosis for improvement remains poor.[86]

106 In oral evidence, Dr Kourdoulos reiterated these findings. He said that Ms Zealley continues to suffer from chronic pain, which has a marked effect on her mental state.[87] He also said that Ms Zealley would likely require that medication indefinitely. His opinion as to the cause of the seizures was a combination of stress and pain.[88]

107 Dr Kourdoulos thought that she would likely require her medication indefinitely. It was also his view that Ms Zealley has and will require assistance with general home maintenance and gardening services indefinitely, due to her 'lumbar condition and her pain'.[89]

108 In relation to Ms Zealley's psychological state, Ms McDonald anticipates that she will need to provide support in the future. It is clear that she provides considerable emotional support to Ms Zealley.[90]

109 The medico-legal orthopaedic opinions vary. As I mentioned earlier, Mr Hooper, who saw Ms Zealley on several occasions, thought that the problems with her back were discogenic and long term. Dr Kourdoulos, whose opinion is important, also thinks that there is an organic component, but that it is now a chronic pain syndrome.

110 I have previously referred to the opinions of the psychiatrists. Dr Falkiner, treating psychiatrist, diagnosed Ms Zealley as suffering from depression and thought the prognosis was guarded.

111 Similar views were expressed by a number of medico-legal psychiatrists. For instance, Dr Gill, who saw Ms Zealley in December 2012, concluded that Ms Zealley suffered from a major depressive disorder and conversion disorder related to the accident. Dr Serry, who saw her in June 2011 diagnosed a pain disorder, chronic adjustment disorder and a conversion disorder with connection between the physical and psychiatric aspects of her presentation.

112 In my view, it is clear that the psychological component of Ms Zealley's disability is significant. That is not to dispute that there is still an underlying physical component as Dr Kourdoulos suggests. Whatever the case, the symptomatology is entrenched. I accept Ms McDonald's view, which was reinforced by my observations of Ms Zealley in court, that once this case is over and behind her, with the resultant lessening in stress then there is a prospect of stability in Ms Zealley's psychological state,[91] and hopefully a lessening of the regular seizures.

Pain and suffering and loss of enjoyment of life

113 Wesfarmers suggested that an appropriate figure was $250,000 - to which counsel for Linfox submitted $150,000.

114 It is clear that Ms Zealley has experienced a very difficult time since the unloading accident and especially since the termination of her employment. This is particularly so with the continuing pattern of pseudo epileptic fits. It seems likely that these problems will continue, although one would anticipate, consistent with Ms McDonald's opinion that with the stress of the litigation behind her that the psychologically-based components of her problems may stabilise.

115 I think that an appropriate allowance is $225,000 for pain and suffering (past and future).

116 There was agreement as to the figure for past medical and like expenses at $111,590.

117 For the future, the parties differed significantly. Wesfarmers put a figure of $127,000 whereas Linfox contended that $37,600 was appropriate.

118 As stated earlier, Ms Zealley continues to take a significant number of different medications for her conditions.[92]

119 The difficult issue is endeavouring to determine at what level Ms Zealley will require treatment in the future.

120 Counsel for Wesfarmers reached his figure of $127,000 utilising the following heads:

121 Counsel for Linfox used similar categories but with smaller allowances.

122 I accept that the thrust of the medical evidence is that whilst there may be improvement in Ms Zealley's condition the prognosis remains guarded. I also accept that it is likely that she will continue to need treatment into the future of the types identified by both counsel.

123 Having said that, I repeat that I think there is some prospect of Ms Zealley's condition reaching a point where, absent the stresses of this litigation and the passage of time, that her level of treatment will diminish slightly as she stabilises.

124 In my view, it is appropriate to allow a figure of $100,000 for future medical expenses bringing the total for medical expenses past and future to $211,590.

125 The parties were agreed that the past loss of earnings of Ms Zealley should be assessed at $197,500.

126 As to the future, Counsel for Wesfarmers said that the appropriate allowance was $592,000 based on Ms Zealley working to age 67 with a discount for contingencies of 15 per cent.

127 In relation to the future, it was not suggested by counsel for Linfox that Ms Zealley would return to full-time work. He submitted that the allowance for future loss of earning capacity should involve a discount of approximately 25 per cent, which takes into account the standard contingencies as well as a prospect that Ms Zealley may obtain some form of part-time employment. On counsel's calculations, applying a 25 per cent discount, and utilising a rate of $800 per week, the appropriate allowance was roughly $490,000. This assessment of the loss was to age 65.

128 Ms Zealley's work record prior to the unloading accident was impressive and I accept that she would have worked into her 60s and perhaps to 65. I would add a small additional discount for the prospect that she may be able to obtain some part-time employment in the future. I think a discount of 20 per cent on the figure to age 65 is sensible. The appropriate allowance for the future is, rounded up, $522,500 (80% of $653,120).

129 It follows that the appropriate allowance (past and future) is $720,000.

130 Ms Zealley has, received assistance in carrying out domestic services. The claim here is pursuant to the principles set out in in Griffiths v Kerkemeyer[93] as adapted by subsequent decisions of the High Court.[94]

131 For past care, counsel for Wesfarmers submitted that an appropriate figure was $51,000, based upon the provision of one hour of care per day provided by her daughter. As to the future, counsel allowed seven hours per week at a rate of $35 an hour with a 15 per cent reduction for vicissitudes, thus producing a figure of $267,000.

132 Counsel for Linfox put a figure of $24,000 for the past and $5,460 for future.

133 Ms Zealley said that she required a considerable degree of assistance in carrying out a variety of household duties (eg cooking, cleaning washing etc). Dr Kourdoulous and Ms McDonald accepted that home help and care were necessary. Whilst I have no doubt that Ms Zealley has required some help in carrying out aspects of her day-to-day life, the level of care actually afforded by her daughter was questioned by Ms McDonald, who, it seems to me, given her close association with Ms Zealley was in a perfect position to evaluate the level of support provided. [95]

134 Having said that a figure of one hour per day for the past year is not unrealistic, and the allowance for the past of $51,000 should be accepted.

135 However the future allowance is not so simple. I do not accept that there will be some magical improvement of her condition in the next year - as Linfox's figures suggest. On the other hand, there is a prospect of stability in Ms Zealley's psychological state once this case is over. That is not to say that she will not need some form of care into the future. Rather than endeavour to fix a weekly sum for a finite period, and taking into account the manner in which each party put the calculations, I assess the loss for the future at $100,000.

136 It follows that I assess damages in total at $1,307,590 made up of:

(c) Loss of earnings and loss of earnings capacity: $720,000.

137 Linfox is liable under s 138(1) of the Act. Pursuant to s 138(3) of the Act, Factor X is 60 per cent and Factor A is $1,307,590.

[1] [2015] VSC 62.

[2] At the time of Ms Zealley's accident, Liquorland was a subsidiary of Coles. The corporate structure is set out in the contribution judgment. There is no issue about Wesfarmers entitlement to bring this claim.

[3] The taking of her evidence subsequently occurred at a more congenial venue in Cranbourne.

[4] [2013] VSCA 75; and in particular, in the judgment of Kaye AJA at [54]-[77].

[5] [2013] VSCA 75,[55] (emphasis added).

[8] See Primary Health Care Limited v Giakalis [2013] VSCA 75, [36] for a summary of the relevant serious injury regimes under the Act.

[9] See VWA v Jones Lang Lesalle (Vic) Pty Ltd [2012] VSC 412,[34]-[37].

[11] Further Amended Defence, [20], [22] and [22A].

[14] Further Amended Defence, [21] (d)-(p).

[19] [1985] HCA 37; (1985) 156 CLR 522.

[20] [1985] HCA 37; (1985) 156 CLR 522, 527 (emphasis added).

[21] [1985] HCA 37; (1985) 156 CLR 522, 518(emphasis added); see also Lindeman v Colvin Ltd [1946] HCA 35; (1946) 74 CLR 313. (emphasis added).

[22] Hughes v Land Advocate [[1963] UKHL 1; 1963] AC 837; Vacwell Engineering v BDH Chemicals [1931] 1 QB 88; Smith v Leach-Bruin [1962] 2 QB 405; Metrolink Victoria Pty Ltd v Inglis [2009] VSCA 277.

[23] Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The "Wagon Mound" (No 1)) [1961] UKPC 1; [1961] AC 388.

[24] For example, Stensbbe v Tremain [1948] 2 KB 48.

[25] [1943] P. 32.

[26] [1943] P. 32, [39].

[30] T114. See also the report of Dr Bower dated 28 May 2010 (Exhibit WF5).

[32] Report of Professor White dated 15 September 2010 (Exhibit WF5).

[33] Report of Dr Bower dated 28 May 2010 (Exhibit WF5).

[34] Report of Dr While dated 31 July 2014 (Exhibit WF5).

[35] Report of Dr Gill dated 19 December 2012 (Exhibit WF5).

[36] Report of Professor Jones dated 16 February 2010 (Exhibit WF5).

[37] Report of Professor Jones dated 5 May 2010 (Exhibit WF5).

[38] Report of Professor Jones dated 13 July 2010 (Exhibit WF5).

[39] Report of Professor Jones dated 26 June 2012 (Exhibit WF5)

[40] Report of Dr Serry dated 8 June 2011 (Exhibit WF5).

[41] Report of Dr Gill dated 19 December 2012, Report of Dr Hogan dated 3 October 2010 and Reports of Professor Jones dated 16 February 2010, 5 May 2010, 2 June 2010, 13 July 2010, 26 June 2012 (Exhibit WF5).

[42] Report of Dr Falkiner, dated 10 December 2012 (Exhibit WF5).

[70] Reports of Ms McDonald dated 16 December 2009, 3 February 2010, 30 May 2010, 30 April 2011, 14 December 2012, and 23 July 2014 (Exhibit WF5).

[71] Reports of Dr Kourdoulus dated 19 November 2009, 9 March 2010, 3 June 2010, 7 February 2013 and 7 August 2014 (Exhibit WF5).

[72] Report of Dr Nguyen dated 18 March 2010 (Exhibit WF5).

[73] Report of Dr Seneviratne dated 8 April 2010(Exhibit WF5).

[74] Report of Dr Bower dated 28 May 2010 (Exhibit WF5).

[75] Monash Medical Centre report dated 9 August 2010 (Exhibit WF5).

[76] Report of Dr Hogan dated 3 October 2010 (Exhibit WF5).

[77] Reports of Dr Falkiner dated 10 December 2012, 3 October 2012 and 17 July 2014 (Exhibit WF5).

[78] Report of Dr Gill dated 19 December 2012(Exhibit WF5).

[79] Report of Dr Gassin dated 24 May 2012 and 14 February 2013 (Exhibit WF5).

[80] Reports of Dr Hooper dated 21 October 2008, 27 March 2009, 29 April 2009, 15 July 2009 and 20 March 2010(Exhibit WF5).

[81] Reports of Dr Serry dated 8 June 2011 and 22 June 2011 (Exhibit WF5).

[82] Reports of Mr Troy dated 23 June 2011 and 29 June 2011 (Exhibit WF5).

[83] Reports Associate Professor White dated 15 September 2010 and 31 July 2014 (Exhibit WF5).

[84] Reports of Mr Jones dated 16 February 2010, 5 May 2010, 2 June 2010, 23 June 2010, 13 July 2010 and 26 June 2010 (Exhibit WF5).

[85] Report of Mr Kierce dated 22 November 2010 (Exhibit WF5).

[86] Report of Dr Kourdoulos dated 7 August 2014 (Exhibit WF5).

[92] Report of Dr Falkiner dated 17 July 2014.

[93] [1977] HCA 45; (1977) 139 CLR 161.

[94] See Van Gervan v Fenton (992) [1992] HCA 54; 175 CLR 327; CSR Limited v Eddy (2005) CLR 1, [5]-[9].

[95] Report of Dr McDonald, 21 July 2014 (Exhibit WF15).