Shock Records Pty Ltd & Anor v Jones [2006] VSCA 180

3 Matthew Jones was working as a storeman with Shock Records Pty Ltd. On 2 October 2000, he injured himself when lifting a box. As he put it, he felt his back "go". The pain, after a slight improvement, and despite medical treatment, got progressively worse. His attempts to return to work on reduced hours and light duties failed. He stopped altogether in April 2001 and has not worked since.

4 Mr Jones wanted to sue Shock Records to recover the damages he allegedly suffered in consequence of the injury. But there are limitations on a plaintiff's capacity to commence proceedings of this kind. It became necessary for Mr Jones to obtain leave to do so, which meant he had to establish that his injury was a "serious injury" within the meaning of the Accident Compensation Act 1985.

5 Mr Jones made an application for leave to the County Court, which Shock Records opposed. It contended Mr Jones's back pain could not be due to the work injury he sustained. The pain had to be due to something else, such as his pre-existing psychological condition.

6 The judge found Mr Jones's back pain was substantially due to his work injury, constituted a "serious injury" and warranted the grant of leave.

7 Shock Records (and its insurer, Allianz Australia Workers Compensation (Vic) Ltd), now appeals to this Court against the grant of leave. It submits that, on the medical evidence, properly understood, Mr Jones did not have a serious injury and that, on the evidence generally, Mr Jones did not have a loss of earning capacity

of the necessary degree.

8 Before addressing these submissions I will deal with the legislation, the decision of the trial judge and the nature of the appeal.

9 Under s. 134AB(16) of the Accident Compensation Act, Mr Jones was required to obtain leave before bringing proceedings against Shock Records. He sought that leave in an amended originating motion filed on 3 June 2004. The ground relied upon before the judge was that his back injury was a "serious injury" within the meaning of s. 134AB(37). I will describe this section and the others relevant only as they applied in Mr Jones's case.

10 Section 134AB(37) defined "serious injury" to mean "(a) permanent serious impairment or loss of a body function..."

11 Under s. 134AB(38)(b), the term "serious" had to be satisfied by reference to the consequences of Mr Jones's impairment or loss of a body function with respect to his pain and suffering or loss of earning capacity "when judged by comparison with other cases in the range of possible impairments or losses of a body function..."

12 Under s. 134AB(38)(c), his impairment or loss of a body function had to be such as may be "fairly described as being more than significant or marked, and as being at least very considerable..."

13 Under s. 134AB(38)(e), his loss of earning capacity had to be "40 per centum or more".

14 Under s. 134AB(38)(h) and (i) respectively, the psychological or psychiatric consequences of Mr Jones's physical injury and the physical consequences of any psychological condition could not be taken into account when assessing whether he had a permanent serious impairment or loss of a body function such as to come within paragraph (a) of the definition of "serious injury".

15 That is all I need to say about the serious injury test as this stage. Let me now turn to the decision of the judge.

16 The judge delivered reasons for judgment on 6 October 2005.

17 Her Honour set out the circumstances of the injury and the unsuccessful attempts made by Mr Jones to return to full-time work. She also set out his family, education and employment history. She then turned to a number of issues that I will describe more fully.

18 The judge specifically noted Mr Jones suffered from two other medical conditions of potential importance in the case.

19 The first was his psychiatric history. Her Honour found he suffered from persistent and on-going depression and was under the care of a psychiatrist who described him as suffering from a major depressive and anxiety disorder. She correctly stated - but Shock Records question whether she really understood - that the only relevance of the psychiatric condition was in determining whether Mr Jones's level of back pain was organic or psychiatric in origin. Shock Records contended before her Honour, as it does in this appeal, that this condition, which was not work-related, was the explanation for the difference between Mr Jones's organic injury and reported pain.

20 The second was his psoriatic arthritis condition. The judge had to consider - and Shock Records says she did so incorrectly - whether this too was a non-work related condition that significantly contributed to Mr Jones level of injury and inability to work.

21 Her Honour then dealt with the medical evidence, which was substantial, and consisted of medical reports, tendered both by Mr Jones and Shock Records.

22 None of the doctors gave oral evidence and the judge considered only their written reports. Therefore, when I come to evaluate this evidence, I will be in virtually the same position as her Honour. The same cannot be said of her evaluation of Mr Jones's evidence. Her Honour had the advantage of hearing directly the oral evidence he gave.

23 Although there was considerable disparity in the medical evidence about the critical questions in the case, it was clear what those questions were.

24 A CT scan and MRI taken in 2001 revealed a mild bulge at the L5/S1 level with no sign of nerve compression, which, it was generally agreed, would not account for Mr Jones's level of reported pain at this time.

25 In consequence, as her Honour expressly noted, many of the doctors - including, initially, Mr Jones's treating doctors - believed Mr Jones suffered from pain amplification or a chronic pain syndrome arising from his pre-existing depressive condition. On the other hand, a number of the doctors believed, despite the absence of radiological evidence, that Mr Jones's severe pain had a mechanical origin. One doctor, a rheumatologist, believed the pain arose significantly from Mr Jones's psoriatic arthritis and had become submerged in the pain arising from the work injury.

26 Therefore, as regards the nature and symptoms of Mr Jones's medical conditions, this was a case in which the medical evidence was competing. The judge had to make an overall assessment. In doing so, her Honour understandably gave most weight to the more recent evidence, which, as you will see, was of particular importance, especially the implications of a second MRI. I will give a summary of the evidence that she expressly mentioned. It will contain some necessary comments of my own.

The recent medical evidence, especially the second MRI

27 The judge referred to the evidence of Dr Kenna, a consultant in skeletal pain management. He expected Mr Jones to be suffering from pain amplification but, after examining him, and to his surprise, he was not of this view. In his report dated 30 January 2002, Dr Kenna expressed the prescient suspicion that Mr Jones had suffered an annular tear of the L5/S1 disk, one that had not showed up on the 2001 CT scan and MRI. This was his conclusion:

"Therefore pertaining to the musculo-skeletal injury I believe that he did incur a lumbar disc injury, most likely in the form of an annular or rim tear which would not be picked up on normal x-ray."

28 Her Honour then referred to the evidence of Mr Schofield, a highly experienced treating orthopaedic surgeon. In his report dated 19 March 2002 he contrasted the different indications provided by Mr Jones's symptoms on the one hand and the history of his injury on the other. He saw the symptoms as being -

"consistent with the development of an acute inflammatory response to the injury to the posterior annular wall at the lumbar-sacral level which has irritated the S1 nerve roots on each side, causing the symptoms to both legs and feet...In addition he has evidence of an inflammatory condition which was not previously present..."

"clearly points to a mechanical cause for his current disability. Whether the onset of the inflammatory condition is due to or has been aggravated by the mechanical injury is conjecture."

29 Mr Schofield advised a second MRI should be obtained and asked for Mr Jones to be examined again by his treating rheumatologist, Dr Stockman.

30 Dr Stockman did re-examine Mr Jones. On 11 March 2003 he reported his opinion that, while Mr Jones's back pain was related in part to "an acute lumbar disc injury [resulting from] a lifting episode at work", there was "a significant degree of pain amplification driven by his psychological state." He said he could not confirm an inflammatory condition of the spine. He ordered the second MRI.

31 Mr Schofield was given Dr Stockman's report and responded on 2 April 2003. Mr Schofield stated the issues simply and squarely. He said that, "in the absence of radiological signs ... consistent with his current condition", he would agree with Dr Stockman's opinion that Mr Jones's depression was amplifying the back pain. He went on to say that, "if the persistence of these symptoms is continuing to be due to a mechanical injury", he would expect this to show up on a second MRI. And he further said that, "if the MRI shows no significant change," his inability to return to work could not totally be due to his work injury.

32 For these reasons, Mr Schofield awaited the results of the second MRI.

33 Those results came and were discussed by Mr Schofield in his report dated 3 June 2003. He accepted the description of the experienced MRI reporter that there was "a mild right posterolateral disc bulge at the L5-S1 level, which displaces, but not compress the right S1 nerve root." He referred back to his report of 2 April 2003 where he stated that a second MRI showing more damage "would be significant in terms of a work-related injury." In his view, the second MRI showed a "slightly greater problem" compared with the first, and referred to the likelihood of asymmetric right leg pain if the disc wall had been ruptured. He did not mention -we may safely infer, deliberately - the issue of pain amplification, and went on firmly to state this:

"In conclusion, therefore, I believe that this MRI scan does confirm my opinion that the patient has suffered from a mechanical injury to the lumbar spine and that ongoing disability is due to a mechanical and not a non-mechanical (inflammatory) condition in his spine. His condition is, therefore, stabilised and he is not fit to resume his previous employment, but would I believe, be fit to resume work of a lighter nature."

34 Mr Schofield examined Mr Jones again in 2004. Here is his final opinion, which he stated in his report of 18 October 2004:

"The patient's condition is stabilised. I believe that he has two separate conditions. The injury which occurred on the 2nd of October 2000 caused a disc prolapse at the lumbosacral level. This is responsible for a significant part of his low back pain. Any treatment to alleviate this condition has been compromised by the severe problem of psoriatic arthritis which has affected his joints... He is not fit to resume his previous employment permanently and, hopefully, a retraining which is now being organised will give him a measure of employment in a much lighter work industry."

35 Mr Schofield noted in that report that a consultant psychiatrist had confirmed Mr Jones's "depression and suicidal tendencies." He did not mention this, nor return to the topic of pain amplification, in the context of his opinion about Mr Jones's back injury and inability to work - again, we may safely infer, deliberately.

36 To return to Dr Stockman, in 2005 he was asked to provide an updated report on Mr Jones's medical condition, which allowed him to comment on the second MRI he ordered. (I remind you that, in 2002, he thought Mr Jones's non-work related depression was causing a significant degree of pain amplification.)

37 In his report dated 14 July 2005, Dr Stockman stated the second MRI "revealed [a] disc bulge at L5/S1 and findings consistent with annular disruption." Then he gave his final opinion, which could not have been expressed more clearly:

"I am of the view that Matthew has sustained an independent and discrete injury to his lower back/discs as a result of October 2000 incident. Furthermore, Matthew continues to suffer from an independent, separate and discrete injury/conditions to his lower back which gives him pain and produces impairment.

It is my opinion that Matthew has no ability to undertake his previous job as a storeman with Shock Records because of his back condition.

Furthermore, I am of the view that he does not have the ability to undertake any job which requires sitting for prolonged period of time, perform work which involves bending or lifting weights or more that 5kg because of his back condition.

...

There is an additional disability from psoriatic arthritis. This mainly affects his feet, resulting in reduced ability to weight bear."

38 And the pain amplification or depression? Dr Stockman made no mention of these matters - yet again, we may safely infer, deliberately.

39 The judge carefully set out this evolution of opinion, which was obviously of vital importance in the case.

40 Her Honour noted the evidence of Mr Shannon, a consultant orthopaedic surgeon, who described the annular disruption shown by the second MRI as minor. Her Honour rejected this evidence in these terms:

"I prefer the view of the two treating specialists, Dr Stockman and Mr Schofield who, significantly, in my view, dropped their concerns about clinical evidence matching the plaintiff's complaints following the March MRI results."

41 The judge noted that "many of those practitioners who were critical of the plaintiff's complaints examined him" before the second MRI was undertaken.

42 Finally, on the medical evidence, her Honour noted the opinion of Mr Jones's consultant rheumatologist, Dr Harkness, which, in short, was that his pain and disability was due to his lumbosacral disc injury and not his psoriatic arthritis.

43 The judge then turned to the evidence given by Mr Jones about his injury and its impact on his work capacity. This is a summary or her Honour's account and assessment of that evidence:

• Mr Jones was a believable witness (despite one blemish in his evidence).

• He described, without exaggeration, "a persistent chronic pain condition which had been in existence since 2000, and which is extremely debilitating and restrictive in nearly every area of his life."

• His back pain fluctuated between the considerable and the chronic to the bearable but uncomfortable, usually the former.

• He controlled the pain with medication, which he took most days and, on the worst days, at the recommended maximum daily dose. On higher doses, his concentration was impaired and he sometimes had difficulty performing even the simplest of tasks without error.

• His inability to sit for long because of the back pain made completion of the computer courses (which he had voluntarily undertaken) very difficult, and he could not do the work he previously did in the music industry.

• His credit was not impaired by cross-examination.

The judge's findings and conclusions

44 The judge then considered the evidence and set out her findings and conclusions. This too is a summary:

• Mr Jones suffered from chronic back pain as a result of the work injury.

• He suffered from depression in the past and was prone to depression now. But this was not the basis of his current physical condition, pain levels or inability to work.

• The second MRI and the opinions of Dr Stockman, Mr Schofield and Dr Harkness supported the finding that Mr Jones's physical condition was "mechanical in origin and not as a result of a pre-existing depressive disorder."

• His injury severely limits his physical actions and confines him to bed for long periods each day.

• His injury was a serious injury, and permanent, according to the statutory standard.

• His loss of earning capacity was such that he could not earn more than 60 per centum of his pre-injury earnings. The retraining he had recently undergone had been done with great difficulty and there was only a nebulous possibility of him being able to perform home-based employment.

• His back condition precluded him from employment generally.

• He had discharged the onus or proving that his inability to work could not be addressed by retraining or rehabilitation.

• Any psychological or psychiatric consequences of the physical injury to his back were to be disregarded.

45 Her Honour therefore decided to grant to Mr Jones leave to bring proceedings against Shock Records for the recovery to damages for pain and suffering and loss of earning capacity.

46 Before dealing with Shock Records' attack on this decision, it is necessary to say something about the nature of the appeal.

47 This is an appeal from a decision of a judge of the County Court on an application for leave to bring proceedings for damages for serious injury under s. 134AB(16)(b) of the Accident Compensation Act.

48 The appeal is brought under s. 74(1) of the County Court Act 1958, which allows any party to a civil proceeding who is "dissatisfied" with any judgement or order of the County Court to appeal to the Court of Appeal. The party must serve their notice of appeal on the other parties within 14 days (s. 74(2)) and the notice must specify the part of the judgement or order "the appellant is dissatisfied with" and the "grounds of the complaint" (s. 74(2B)).

49 On the hearing of the appeal, s. 134AD of the Accident Compensation Act requires the Court of Appeal to make its decision in a particular manner. It must "decide for itself" whether the injury is a serious injury, and it must do so "on the evidence or other material before the judge who heard the application", and on such other evidence as it may admit.

50 The precise nature of an appeal under s. 74(1) of the County Court Act to which s. 134AD of the Accident Compensation Act applies was recently considered by the Court of Appeal in Barwon Spinners Pty Ltd v Podolak.[1] On that issue, the fundamental point to emerge from the decision is this: the jurisdiction of the Court of Appeal is to conduct an appeal, not a hearing de novo (a hearing anew), and certainly not an inquiry. It follows that the appellant, who bears the onus of persuasion, will ordinarily go first, and must always establish, in an adversarial setting and focussing on the grounds put forward, that the decision of the judge was wrong in fact or law. The Court of Appeal has to determine that appeal, so framed. In doing so, it must decide the serious injury issue for itself, having regard to a number of considerations of potentially high significance, including the natural advantages of the judge who conducted the trial at first instance and the particular expertise of judges of the County Court - not ordinarily possessed by judges of the Court of Appeal - in determining the range of conditions within which the relevant injury is said to fall.

51 Applying these principles, let me now turn to the grounds of appeal relied upon by Shock Records.

52 Counsel for Shock Records grouped their grounds of appeal into these five propositions: the medical evidence, even as viewed by the judge, did not support the grant of leave; the medical evidence was misunderstood by the judge; if Mr Jones could not work, it was due to an admixture of work and non-work related causes; the evidence established the injury itself did not prevent Mr Jones from working; and the reasons of the judge were not adequate.

53 I will deal with the first two of these propositions under this heading: Did the medical evidence, properly understood, show Mr Jones had a serious injury? I will deal with the final three propositions under this heading: Did the evidence show Mr Jones had a loss of earning capacity of 40 per centum or more?

Did the medical evidence, properly understood, show Mr Jones had a serious injury?

54 The focus of this question is paragraph 49 of the reasons for decision of the judge, which I set out here:

"I am satisfied there is radiological evidence in the form of the 2003 MRI together with the opinions of Dr Stockman, Mr Schofield and Dr Harkness in particular, to support the finding to the relevant standard that the plaintiff's current physical condition is mechanical and organic in origin and not as a result of a pre existing depressive disorder."

55 Counsel for Shock Records made a number of strong criticisms of this passage. They submitted it revealed a fundamental defect in the judge's reasoning. Her Honour had misunderstood the opinions given by Mr Jones's treating doctors. In pointing to the mechanical and organic origin of Mr Jones's back injury, they were not saying his symptoms of severe pain where wholly or even mainly due to this injury. On the critical issue of the source of the level of severe pain reported by Mr Jones, they did not regard the second MRI as significantly different to the first. It may have assisted them to conclude the back injury was not inflammatory in nature. But, after considering the second MRI, they did not say Mr Jones's reported pain was not amplified by his non-work related depression, and they did not withdraw their previously expressed opinion that it was.

56 It follows, so counsel for Shock Records submitted, that the judge failed to identify Mr Jones's work-related impairment and apply the serious injury test to that impairment alone. While her Honour may have professed to disregard Mr Jones's psychological or psychiatric condition,[2] in fact she did not do so, because she failed to exclude Mr Jones's depression-driven pain amplification from consideration.

57 The answer to these submissions lies in the evidence of Mr Jones's treating doctors, which I have already summarised.

58 As that summary revealed, before the second MRI the doctors were concerned that the level of Mr Jones's reported pain was not supported by the mechanical nature of his back injury. This gap was referred to in Mr Schofield's report of 19 March 2002, as I have mentioned. I have also mentioned Dr Stockman's frank assessment of 11 March 2003 that Mr Jones was suffering from "a significant degree of pain amplification driven by his psychological state." There was also concern about whether Mr Jones's arthritic psoriasis was contributing to the injury.

59 The reports of the doctors reveal that, after the second MRI, their concerns about the source of Mr Jones's reported pain evaporated. I have referred to the relevant reports already so I will do so only briefly now.

60 After seeing the report of the second MRI, Mr Schofield said in his report of 3 June 2003 that Mr Jones had "suffered from a mechanical injury to the lumbar spine and that [his] ongoing disability is due to a mechanical and not a non-mechanical (inflammatory) condition in his spine." In his final report of 18 October 2004 he said Mr Jones's injury caused "a disc prolapse at the lumbosacral level [and was] ... responsible for a significant part of his low back pain." The two reports show Mr Schofield thought the main reason Mr Jones could not work was the work-related back injury, not the psoriatic arthritis. Dr Stockman said in his report of 14 July 2005 that the second MRI "revealed [a] disc bulge at L5/S1 and findings consistent with annular disruption" and that Mr Jones had "sustained an independent and discrete injury to his lower back/discs as a result of October 2000 incident... which gives him pain and produces impairment." And the psoriatic arthritis? It mainly affected "his feet."

61 I read these doctors - and Dr Harkness - as saying quite clearly that the principal cause of Mr Jones's reported pain and incapacity to work was his work-related back injury, not depression-driven pain amplification and not psoriatic arthritis.

62 I said earlier that we may safely infer that Mr Schofield (twice) and Dr Stockman (once) had deliberately omitted to make reference to the issue of pain amplification. The inference is safe because the key issue that these doctors were considering at this time was the apparent gap between Mr Jones's injury and his level of reported impairment. Their main concern was that, if Mr Jones's reported pain was amplified by the depression, his inability to return to work could not totally be due to his work injury. The second MRI was ordered in the hope of obtaining more insight into the nature of the injury. Once the MRI results came in, the doctors were able to attribute Mr Jones's impairment to the work injury, and exclude as well the possibility that arthritic psoriasis was a major contributing cause, which they did in the passages in the reports I have set out. If they had any continuing concerns that Mr Jones's depression was amplifying his pain, they could and would have expressed them.

63 The fact that Mr Jones's treating doctors had satisfied their concerns about the nature and cause of his impairment was of fundamental importance in the case. The judge was entitled to treat their opinions, which she properly understood, as having decisive weight. I think her Honour's conclusion in this regard was correct.

64 For these reasons I must reject the submissions of counsel for Shock Records that the judge misunderstood the evidence of the treating doctors and impermissibly included Mr Jones's depression-driven pain amplification in her serious injury assessment.

On the evidence, did Mr Jones have a loss of earning capacity of 40 per centum or more?

65 The focus of this question is paragraphs 52 and 56 of the reasons for decision, which read:

"52. In so far as the plaintiff's loss of earning capacity is concerned I am satisfied, having regard for his capacity for suitable employment and the reasonable attempts to retrain or rehabilitate in the face of the chronic pain condition he currently suffers, that he does not have a capacity for employment which, if exercised, would yield him more than 60% of his pre-injury earnings. The re-training he has recently undertaken has been done with great difficulty and results, in my view, in only a nebulous possibility that the plaintiff will be able to earn some sort of income as a web designer from his home, probably the only suitable employment environment for him in the future. I accept that his back condition precludes him from employment generally.

...

56. In finding as I do that the plaintiff is suffering from a serious injury as defined in S134AB(37)(a) of the Act, I am of course aware of S134AB(38)(h) and I have disregarded any psychological or psychiatric consequence of the physical injury suffered by the plaintiff to his back. "

66 Counsel for Shock Records submit that the reasoning in these paragraphs is wholly inadequate, ignores vital evidence and does not amount to sufficient reasons for decision at all. It is wholly inadequate because the judge failed to disentangle the various causes of Mr Jones's loss of earning capacity, which the serious injury test required her to do. It ignores vital evidence because it fails to take into account a body of evidence about Mr Jones's fitness to do a variety of paid jobs. It does not amount to sufficient reasons for decision because, among other things, it does not show how the judge's decision with respect to Mr Jones's loss of earning capacity was arrived at. As will be apparent, these criticisms are interconnected.

67 Counsel for Shock Records made a foundation submission that the judge was obliged to disentangle the various causes of Mr Jones's incapacity to work or, more accurately in this context, his loss of earnings of 40 per centum or more. They put the same submission another way - the judge was required to strip away the non-work causes to lay the work causes bare.

68 While "disentangle" and "strip away" may be useful short-hand, this language does not strictly describe what the serious injury test required the judge to do.

69 When we earlier looked at the provisions of the Accident Compensation Act governing the serious injury test, we saw that s. 134AB(38)(e) required the judge to determine whether Mr Jones's loss of earning capacity was "40 per centum or more". Taken together with the other elements of the test, this required her Honour to be satisfied that, among other things, Mr Jones's back injury of itself caused a loss of earning capacity of this degree, which required her to exclude the contribution of the other medical conditions and, of course, the psychiatric or psychological consequences of the back injury.

70 A judge is quite capable of making such a determination once he or she has reached the point of being properly satisfied that the plaintiff's injury is enough in itself to cause a loss of earnings capacity of 40 per centum or more. How much disentangling or stripping away is necessary to reach that point will depend upon the circumstances of the given case. If the submissions of counsel for Shock Records mean that, even after reaching that point, a judge still has to identify and quantify all of the other potential causes, I cannot agree with it.

71 In the factual circumstances of this case, however, the judge did have to do some disentangling. Mr Jones suffered from three medical conditions of which only the back condition was injury-related. Her Honour had to be satisfied this condition caused a loss of earning capacity of 40 per centum or more. There was competing medical evidence. A number of the doctors were of the view Mr Jones could perform work of a limited nature. Some were of the view his depression or psoriatic arthritis substantially contributed to his incapacity for work. Mr Jones himself gave evidence his incapacity to work was due to a combination of events - severe back and radiating leg pain, psoriatic arthritis and being "a little lost psychologically".

72 Her Honour's reasons for decision reveal that she engaged in sufficient disentangling to enable the statutory determination to be made.

73 The necessary context to paragraph 52 is the discussion in the immediately preceding paragraphs which contains the judge's conclusion that Mr Jones's back injury was so severe as to satisfy the other elements of the serious injury test. Therefore, when reading paragraph 52, we have to bear in mind that her Honour had already decided to accept the evidence of the treating doctors, which, correctly, she saw as decisive on that point.

74 The treating doctors did not just state that Mr Jones was suffering from a work-related back injury. They stated he had an incapacity for work. As I have noted, Mr Schofield said he was unfit for his previous work but "hopefully", with retraining, could obtain "a measure of employment in a much lighter industry..." You will note the extremely guarded tone of language. Dr Stockman agreed, saying Mr Jones could not "undertake any job which requires sitting for prolonged periods of time...bending or lifting weights more than 5kg..." As I have also noted, their view was that the incapacity arose mainly from the back injury, not the depression or the arthritic psoriasis. The one thing - the incapacity - followed the other - the back injury.

75 Against this background, which was set out in the reasons for decision, her Honour examined the loss of earning capacity component of the test.

76 Paragraph 52 considers this component in terms of Mr Jones's capacity for suitable employment, his unsuccessful attempts to rehabilitate "in the face of the chronic pain condition he currently suffers from" and the "nebulous" possibility he had of obtaining home-based employment. The judge did not expressly state that it was the back injury, and not the depression or the arthritic psoriasis, which was mainly limiting Mr Jones's earning capacity. It would have been better for her Honour to have done so, for it was an important part of the reasoning process required by the serious injury test. Nonetheless I think it is definitely implicit. The judge was dealing in this paragraph with the consequences for Mr Jones's earning capacity of the back injury she had found to be the main cause of his incapacitating symptoms.

77 Also definitely implicit in paragraph 52 is her Honour's satisfaction that the back injury was sufficient in itself to prevent Mr Jones from earning more than 60 per centum of his pre-injury earnings. This satisfaction is implicit in the reference to Mr Jones's "chronic pain condition", which calls up the opinions of the treating doctors that, by reason mainly of the back injury, Mr Jones was suited for a very limited range of work, and to her reference to the unlikelihood of Mr Jones being able to earn "some sort of income" from home-based employment, which calls up Dr Stockman's opinion that Mr Jones could not do work that required prolonged sitting.

78 I think, as the judge saw it, once the back pain was found to arise from the work injury, it was obvious, because the pain was so severe, that the major contributor to Mr Jones's loss of earnings capacity was the work injury. Having reached that point, her Honour felt there was no need to quantify the contribution of the other minor causes. No more "disentangling" or "stripping away", to use the words of counsel for Shock Records, needed to be done. For the reasons I gave earlier, there was nothing wrong with this approach. And I see the case in the same way.

79 With some justification, counsel for Shock Records criticise the judge's reasons for decision for failing to deal with the evidence concerning Mr Jones's capacity for work.

80 As with the evidence concerning the nature of, and the pain caused by, his back injury, there was range of evidence on his capacity for work. This evidence included a number of vocational assessment reports. These reports identified various suitable alternative employment options for Mr Jones, including sales clerk, car park attendant and computer-based employment.

81 It is clear enough from the reasons for decision that the judge considered the recent evidence of the treating doctors to be decisive, not just in relation to the nature of and pain caused by Mr Jones's back injury, but also in relation to his limited capacity for work. I think her Honour was correct to adopt this approach. The early evidence on Mr Jones's work capacity was strongly coloured by the debate over the mechanical verus the psychological causes of Mr Jones's back pain. Once this debate was resolved by the treating doctors in his favour, it could not, compared with their evidence, be of much use.

82 The judge did not expressly say so, but the vocational evidence could not stand with her findings in relation to Mr Jones's back condition. All of the suggested jobs possibly required him to sit for prolonged periods, which, on those findings, he plainly could not do.

83 Counsel for Shock Records submitted the judge was obliged to provide adequate reasons for decision.[3] They submitted her Honour's reasons were not adequate. The reasons did not show how the finding of a serious injury with respect to loss of earning capacity was arrived at. They did not show how the plaintiff discharged the onus of proof applicable to him, how the relevant statutory provisions were satisfied and by reference to what evidentiary material.

84 The obligation of the judge to provide adequate reasons for decision is both entrenched in the common law and specifically imposed by s. 134AE of the Accident Compensation Act. Under that section, the judge must give "detailed reasons which are as extensive and complete as the court would give on the trial of the action." A failure to do so would amount to an error of law that might itself be a ground for upholding an appeal.

85 In my view the reasons for decision of the judge are beyond criticism except that, on the loss of earnings component of the serious injury test, they do not make the path of reasoning explicit in the respects I have mentioned. But reasons for decision have to read fairly and particular parts have to be read in the context of the reasons as a whole.[4] When I so read the reasons for decision in the present case, I see, in the relevant respects, a definitely implicit path of reasoning, and I therefore conclude that they are adequate.

86 I must therefore reject the submissions of counsel for Shock Records that the judge incorrectly found that Mr Jones did not have a demonstrated loss of earnings capacity of 40 per centum or more.

87 Matthew Jones injured his back working for Shock Records and sought leave from the County Court so he could sue the company for damages.[5]

88 To obtain that leave, Mr Jones had to satisfy the serious injury test in the Accident Compensation Act. In particular, his injury had to be a "serious injury" as defined in s. 134AB(37) and, among other things, his consequent loss of earning capacity had to be 40 per centum or more.

89 When Mr Jones sought leave, Shock Records alleged the severe back pain of which he complained could not be totally due to the injury he had at work. It submitted that, if the pain was severe, this could only be due to the additional effects of non-work related medical conditions, such as depression and arthritic psoriasis, from which Mr Jones also suffered.

90 A judge considered the medical and other evidence and granted leave to Mr Jones. Her Honour found that his injury was serious and caused him at least the required degree of loss of earning capacity.

91 Shock Records appeals to this Court against the decision of the judge. It contends that, on the medical evidence, properly understood, Mr Jones did not have a serious injury and that, on the evidence generally, Mr Jones did not have a loss of earning capacity of 40 per centum or more.

92 The critical issue in the appeal concerns the contribution of Mr Jones's other medical conditions to his level of impairment and loss of bodily function and to his incapacity for work. So, if his pain levels were being amplified by his depression, which fell outside the statutory standard, or were due to arthritic psoriasis, which was not work-related, his work injury could not satisfy the serious injury test.

93 An appeal of this nature requires the Court of Appeal to decide the serious injury issue for itself, in the context of an appeal brought on specified grounds by a party with the burden of persuading the appeal court that the judge of the trial court was in error, and remembering that the judge had the advantage of seeing the witnesses give evidence and possesses expertise in dealing with these questions.

94 I have considered the grounds of the appeal relied upon by Shock Records and examined the evidence before the judge. In my view her Honour did not misunderstand the evidence, which established that Mr Jones's back injury, not his depression or arthritic psoriasis, was the principal cause of his severe back pain and incapacity to work. The evidence also established that the loss of earning capacity from his back injury was 40 per centum or more. The judge was therefore right to find that Mr Jones's back injury satisfied the serious injury test and grant him leave.

95 For these reasons I would dismiss the appeal.

[1] [2005] VSCA 33 (25 February 2005).

[2] In paragraph 56 of the reasons for judgment.

[3] See Major Engineering Pty Ltd v Helios Electroheat Pty Ltd [2006] VSCA 107 at [17]- [21]; Fletcher Constructions v Lines MacFarlane (No 2) [2002] VSCA 189; (2002) 6 VR 1 at 30-33; Sun Alliance v Massoud [1989] VicRp 2; [1989] VR 8 at 19-20; Hunter v Transport Accident Commission [2005] VSCA 1 at [21]- [22].

[4] See Hesse Blind Roller Company Pty Ltd v Hamitoski [2006] VSCA 121 at [3] per Ashley JA and [19]-[22] per Redlich JA.

[5] See s. 143AB(16) of the Accident Compensation Act.