Qiao v Jacon Industries Pty Ltd

LOWER COURT District Court JURISDICTION : LOWER COURT DC 3053/01 FILE NUMBER(S) : LOWER COURT Rein DCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41211/02 DC 3053/01

GILES JA SANTOW JA IPP JA

Thursday 15 May 2003 QIAO v JACON INDUSTRIES PTY LTD & ORS Judgment 1 GILES JA: This is a plaintiff's quantum appeal from a judgment in the District Court. The plaintiff was injured in a workplace accident. He brought proceedings against three defendants, alleging that "all or any" of them was his employer and was liable for breach of statutory duty and/or in negligence. He recovered damages of $32,500. 2 Something should first be said of the nature of the judgment. 3 The plaintiff had been employed by the first defendant. At some time the business of the first defendant was take over by the second defendant. The third defendant was a director of the first defendant and the second defendant. Doubt over whether at the time of his injury the plaintiff was employed by the first defendant or the second defendant is understandable, but it is not easy to see how the plaintiff could have been employed by the third defendant. It is even harder to see how, at the time of his injury, he could have been employed by all three defendants. 4 None of this was dealt with in the judge's reasons, it being said only that the plaintiff's counsel accepted that the defence of the first defendant was applicable to all three defendants. The judgment was in the form "judgment for the plaintiff", without specifying against which of the defendants but apparently against all three defendants, and the order for costs was explicitly against all three defendants. 5 The strong probability is that the judgment should have been against one defendant only, either the first defendant or the second defendant. The course taken in the District Court may have been taken because a workers compensation insurer stood behind all three defendants, and so no one troubled over where liability properly lay, but it is undesirable that judgment should be pronounced in globo and against parties who are not truly liable. By agreement, or if necessary by judicial resolution, where liability properly lay should have been determined and the judgment should have been directed only to the party liable. 6 The plaintiff was employed as a general hand and then as a machinist. On 16 May 2000 he was operating a lathe. He was wearing gloves, found to be a hazard because the gloves might be caught in the lathe and the hand dragged into its workings. That is what happened, and the plaintiff's hand was injured. It was held that the undistributed defendants were liable because they knew the plaintiff was wearing gloves and did not prevent him from doing so. 7 The plaintiff's middle finger on his dominant right hand was broken, and the ring and the little finger were also affected. The plaintiff had an operation on his middle finger followed by physiotherapy. He was left with a degree of impairment in the use of his hand. 8 The plaintiff's damages were subject to the modified common law damages regime under ss 151G and 151H of the Workers Compensation Act 1987. Sufficiently for present purposes, under that regime - (a) his damages for non-economic loss were to be a proportion determined according to the severity of the non-economic loss of the maximum amount which could be awarded, at the time of the introduction of the regime being $204,000 [s 151G(2), (3)];

(b) if the damages for non-economic loss so assessed were within a monetary range the damages awarded were to be calculated according to a formula, which using the amount of the time of the introduction of the regime was "Damages = [Amount so assessed - $36,000] x 4" [s 151G(5)]; (c) no damages were to be awarded for economic loss unless the plaintiff's injury was a serious injury as defined, relevantly and using the amounts at the time - "151H(1) No damages are to be awarded for economic loss unless the injured worker has received a serious injury or dies as a result of the injury.

(2A) A serious injury is, if received on or after the commencement of Schedule 2(2) to the Workers Compensation (Benefits) Amendment Act 1991:

(a) an injury for which the compensation otherwise payable under section 66 for the loss or losses resulting from that injury is, in the opinion of the court, not less than 25 per cent of the maximum amount from time to time referred to in section 66(1); or

(b) an injury for which damages for non-economic loss of not less than $48,000 are to be awarded in accordance with the Division (whether or not compensation is payable under section 66)." and; (d) the various money amounts were subject to indexation. 9 In the result the judge arrived at a figure of $32,500, which meant that no damages were awarded for economic loss. 10 The judge said that he turned to quantum, and then went through a number of matters relevant to quantum. They included medical reports in which doctors had in the familiar manner stated percentage permanent losses of efficient use of the plaintiff's right hand or arm. The percentages were in the range 15 to 19 per cent. 11 The judge then said - "The parties are agreed that pursuant to s 151G and s 151H of the Workers Compensation Act 1987 I am required to assess the Plaintiff's injury as a percentage of a most extreme case (see: Southgate v Waterford (1990) 2 NSWLR 427 and Dell v Dalton (1991) 23 NSWLR 528) and that certain consequences follow depending on the percentage which I determine. Some figures have been agreed upon between the parties which I shall indicate below." 12 The judge then referred to the submission of counsel for the plaintiff that it was very significant that the plaintiff was right hand dominant and that his employment was of a manual nature. He recorded the submission, "He says that in assessing the extremity of the accident compared to a most extreme case, I should treat the injuries as more significant than the fact that the plaintiff is a manual worker than if he were not". Something is astray in this, but the sense is clear enough. After some comments the judge concluded this paragraph of his reasons, "In assessing the level of impairment I do take into account that the injury was to the dominant hand, and that the plaintiff used both his hands for his work". 13 The judge then said - "I assess the Plaintiff's injuries at 22% of a most extreme case, which on the table leads to an amount of $32,500 for non economic loss. In coming to this view I have had regard to the degree of assessment of impairment of the medical experts in relation to the fingers and hand but am not satisfied that the elbow and shoulder complaints are connected with the accident to the figures, and note that they do not seem to have persisted, even if they were. I have placed significance on the Plaintiff's lack of continuing difficulties in the domestic environment and his expressed willingness to return to work without restriction." 14 The beginning of the problem is this. It is agreed that 22 per cent of a most extreme case does not translate, according to the formula, to $32,500. With the changes in the money amounts produced by indexation, a proper calculation would arrive at $42,540. 15 However, the problem goes further. The judge said that he got the $32,500 from "the table". Mills Workers Compensation has as part of its "Benefits Guide" section what might be called a table showing the indexation of the money amounts, none of the indexed amounts being $32,500, but it does not have a table of the results of various calculations using the formula. It also has a table which has $32,500 as the benefit for a percentage of 22 per cent. The conclusion that the judge referred to the last mentioned table is all but irresistible, and it should be said that in the appeal counsel for the defendants properly did not resist it. But the table has nothing to do with the formula in s 151G(5). It is headed, "Ready-reckoner of benefits payable under s 66(2) of the Workers Compensation Act 1987 - applicable for injuries received on or after 1 January 2002", and the percentages are in a column "Degree of permanent impairment (%)". 16 In my opinion, regard to this establishes the probability that the judge's reasoning process was flawed. 17 Counsel for the defendant submitted that the judge had in paragraph 35 posed the issue and in paragraph 37 come to his conclusion in terms of the percentage of a most extreme case, not the degree of permanent impairment, and that the error was no more than referring to a wrong table to find the result of his assessment of 22 per cent of a most extreme case. On the other hand, the judge had spoken of assessing the level of impairment and had had regard to the doctors' assessments of degrees of impairment, and the heading to the table and the description in the percentage column were plain. I do not feel able to exclude that the judge misdirected himself in coming to the percentage of 22 percent itself, in some kind of confusion between the percentage of a most extreme case and the percentage degree of impairment to which the alternative in s 151H(2A) may possibly have contributed. 18 Just what happened in the reasoning process cannot be seen, but in my view within the principles of appellate intervention in assessment of damages for personal injuries discussed in Moran v McMahon (1985) 3 NSWLR 700 error has been shown, whereby the judge's assessment cannot stand. There would be in my view a miscarriage of justice if it were permitted to stand. 19 Counsel for the defendants submitted that the result was not that there should be a new trial as to damages. Rather, he submitted, the appeal should be adjourned so that application could be made to the judge for correction pursuant to the slip rule, either in the inherent power to correct mistakes, if such a power is held in the District Court, or pursuant to its Rules. He referred to Storey & Keers Pty Limited v Johnstone (1987) 9 NSWLR 446 for the width of the slip rule there accepted. 20 However, it is necessary that there was an accidental slip or omission. I an unable to see that the flaw to which I have referred could be so described. 21 While of course no judge would deliberately engage in erroneous reasoning, that is not what the slip rule addresses. By whatever his process of reasoning, the judge arrived at the percentage of 22 percent of a most extreme case, and I do not think that it would be a proper exercise of the slip rule for the matter to go back to the judge for him to say that he really meant a different figure and explain how he arrived at it, or to confirm that he meant that figure and explain where his reasons presently do not the reference to the table. The submission of counsel for the defendants really amounted to the matter being returned to the trial judge for him to have a second go at arriving at the percentage of a most extreme case and giving reasons, and that is not what the slip rule deals with. 22 In my opinion, therefore, the order which must be made is that the judgment of the trial judge be set aside and that there be a new trial limited to assessment of damages. 23 The questions then remaining are the costs of the appeal and of the trial. 24 In my opinion no order should be made as to the costs of the appeal, to the intent that the appellant and the respondents bear their respective costs of the appeal. This was accepted by counsel for the defendants. Counsel for the plaintiff submitted he should have a more favourable order, saying that it was necessary for him to come to this Court in order to obtain the new trial as this Court was the only place where that relief could be granted. The submission overlooks, however, that only this morning when the appeal was called on for hearing was the matter of the arrival at the 22 per cent raised by the Court, it not having been a point taken by the appellant. Leave to amend the notice of appeal was in due course sought and granted, but the late raising of the successful ground of appeal exposes the significant possibility that if the point had been taken in the beginning by the plaintiff the costs of the appeal would not have been necessary. There are such things as consent orders. 25 As to the costs of the trial, I consider that an order should be made that the costs of the trial should abide the result of the new trial. 26 SANTOW JA: I agree. 27 IPP JA: I agree. 28 GILES JA: The orders therefore are: appeal allowed; set aside the judgment and orders for payment of costs ordered by the trial judge; order that there be a new trial as to damages; make no order as to the costs of the appeal; order that the costs of the trial in the District Court abide the result of the new trial.

ROMANIUK: I'm in a position to file in court the amended notice of appeal. GILES JA: That would be excellent, thank you. LITTLE: I've no objection to its filing. GILES JA: That may be filed in court, thank you.

Last Modified: 05/22/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.