Smithson v Baines [1999] NSWCA 48 | Case summary

1 BEAZLEY JA: I agree with Sheppard AJA. 2 FITZGERALD JA: The circumstances giving rise to this appeal are set out in the reasons for judgment of Sheppard AJA. Since Beazley JA has agreed with his Honour's reasons and proposed orders, I will state my reasons for my contrary conclusion briefly. 3 While I agree with most of what is stated by Sheppard AJA and that the appeal should be allowed, I consider that there should be a new trial. 4 This action is riddled with error and confusion, which, in my opinion, this Court cannot satisfactorily unravel to arrive at a conclusion which is just to both parties. In particular, there is to my mind no satisfactory basis upon which this Court can conclude what the respondent's earnings were at the time of his injury, or, if he had not been injured, what his earnings would have been at the time of trial or in the period between injury and trial. 5 It is now almost a decade since the respondent was injured without fault on his part. Apart from limited workers compensation, he has received nothing. The circumstances reflect little credit on those who are responsible for the conduct of the trial. While it would obviously be desirable to avoid another trial, a retrial seems to me to provide the best prospect of a just result. 6 I would allow the appeal and order a retrial on the issue of the respondent's damages. 7 SHEPPARD AJA: This is an appeal from a judgment of Dowd J sitting in the Common Law Division in which he made an award of damages for personal injury in favour of the respondent. The appellants, who were the defendants in the action, complain that the award of damages was too high. The amount of the verdict found by the learned primary Judge, in consequence of which the judgment was directed to be entered, was $509,544.94 made up as follows: Non-economic loss: $49,000.00 Past economic loss ($400 pw from 14.10.89 to date being 443weeks at $400 pw): 177,200.00 Loss of future earning capacity (at the rate of $400 pw for 23 years discounted upon the 5% actuarial tables and further discounted by 15% for vicissitudes): 245,242.00 Past out-of-pocket expenses: 15,474.99 Fox v Wood damages: 22,627.95 $509,544.94 8 The reference to Fox v Wood is a reference to the decision of the High Court in the case of that name (1981) 148 CLR 438. 9 The grounds of appeal relied upon by the appellants are based on two aspects of the amounts awarded for economic loss. It is firstly said that his Honour, in arriving at the figures awarded, used gross, rather than net, figures. In other words, he used figures from which there had been no deduction to allow for income tax. The appellants rely on material which was before his Honour which, in their submission, shows quite clearly that his Honour in fact used gross figures. The second matter concerns his Honour's failure to make any allowance for compensable disability suffered by the respondent as a consequence of an injury subsequent to that for which the appellants were responsible. It is said that the second injury occurred in the course of the respondent's employment and that a deduction should have been made to allow for the amount of workers' compensation to which the respondent would have been entitled had he made a claim for workers' compensation in respect of the second injury. Counsel for the appellants relied upon the decision of this Court in Kempsey District Hospital v Thackham (1995) 36 NSWLR 492. 10 The accident as a result of which the respondent suffered the injuries for which the appellants were responsible occurred on 14 October 1989 when the respondent was riding his motorcycle in a street in Marayong, an outer Sydney suburb. Negligence was alleged on the part of the first appellant. This was not contested so that there was no issue on liability. 11 At the time of the collision the respondent was employed by a company, Glenrelle Services Pty Limited. The accident occurred when the respondent was on his way home from work with that company. He was employed as a crane driver and, according to what his Honour said, was earning an average of $741.50 net per week. The respondent was away from work as a consequence of the accident until 10 November 1989. He ceased work on 4 January 1990 when he was unable to continue as a result of a further injury suffered in the course of his employment. His Honour said that he had not worked since that time except for very short periods of casual work. He said that the respondent claimed loss of earnings from the date of the collision until 10 November 1989 and from 4 January 1990 to the date of the judgment "at the rate of his earnings stated above". 12 The principal injury suffered by the respondent was a severe injury to his left shoulder. His Honour said that he complained also of multiple lacerations, abrasions and pain, stiffness and loss of movement through his entire body. He had stiffness and loss of movement in his left shoulder which required a series of operations and had the consequence of substantially reducing his income earning capacity. 13 The respondent was born on 30 May 1956 so that he was 41 years of age at the time his Honour wrote his judgment. His Honour found that the respondent went to school until half way through the second year of high school. He was a poor student. His reading and mathematical abilities are at the level of a primary school child. His linguistic skills are underdeveloped. After he left school he was employed for six years as a labourer and then for ten years as a truck driver. In 1986 he obtained work as a mechanic's offsider working with cranes. Later, he obtained a crane driver's ticket and a dogman's ticket. The latter required only an oral test. The former normally requires a written test but the departmental officer passed the respondent by an oral test because of his limited reading ability. He commenced employment with Glenrelle Services on 1 February 1989 as a dogman and crane driver. 14 After the first accident the respondent was taken by ambulance to the casualty section of Blacktown Hospital. He was admitted and was an in-patient for one day. He came under the care of Dr Anthony Smith, an orthopaedic surgeon, who first saw him on 18 October 1989. Dr Smith thought that the respondent had "subluxed" (dislocated or partially dislocated) the acromio-clavicular joint (in lay terms the shoulder joint). The respondent was reviewed on 23 October and 6 and 13 October 1989. He was treated with physiotherapy. On 13 November 1989 Dr Smith thought that the respondent had improved considerably since the injury. The respondent told him that he had attempted work as a crane driver and found that he could manage. Dr Smith thought that the respondent was recovering reasonably well. He expected full recovery except that he was likely to have a lump as a "permanent signpost" of the injury. Otherwise, he thought that his progress would be "unremarkable and asymptomatic". Dr Smith has not seen him since. 15 After the second accident the respondent was referred to Dr CN Irani, an orthopaedic surgeon, from the casualty section of Blacktown Hospital to which he had been admitted. In a report dated 12 January 1990, Dr Irani said that the respondent had been involved in two separate accidents. He referred to the accident of 14 October 1989 and to the later accident on 4 January 1990. In relation to the first accident, the respondent told Dr Irani that he was still having problems with his left shoulder when he resumed work late in 1989. He told him that he was working "with difficulty". 16 Dr Irani then referred to the second accident on 4 January 1990 and said that, when he saw the respondent on 10 January 1990, he complained of pain in his left shoulder. He said that he was having difficulty in using his left hand. On examination the doctor found that the lateral end of the clavicle was slightly prominent compared with the opposite side. This was suggestive of dislocation of the left shoulder joint. Dr Irani said that the respondent was acutely tender in that region but had a good range of shoulder movement. X-rays confirmed that dislocation in the joint was present but disclosed that otherwise the joint "proper" was normal. Dr Irani expressed the opinion that the respondent had sustained injuries to his left shoulder and had "subluxed", ie dislocated, the shoulder joint. He certified the respondent unfit for work until 19 January 1990. 17 Dr Irani saw the respondent on further occasions. In a comprehensive report dated 2 September 1991, Dr Irani, after describing the two accidents, referred to his examination on 10 January 1990. He saw the respondent again on 7 February 1990. He was complaining of pain in his left shoulder and along the lateral end of the clavicle. He complained that he was having difficulty in using his left arm. Dr Irani performed an operation at the Guildford Heights Hospital on 13 February 1990. He said that he corrected the dislocation, initially repairing the coraco-clavicular ligament. He explored the shoulder joint where the disc was torn. This he excised. He reduced the dislocation and stabilised the joint with two Kirschner wires. 18 The respondent was discharged from hospital. On 3 April 1990 the two Kirschner wires were removed. He was referred for physiotherapy treatment. Dr Irani saw him again on 30 April, 21 May and 8 June 1990. He certified him fit for light duties from 12 June 1990. 19 Dr Irani saw him next on 29 June 1990 earlier than his scheduled appointment. He had resumed work on 12 June 1990 but said that his left shoulder became more painful and he complained of weakness in his left hand when he awoke in the morning. Dr Irani saw the respondent again on 3 August 1990, 3 September 1990 and 24 September 1990. He was still complaining of pain in his left shoulder and difficulty in using his left arm particularly above shoulder level. He also said that on one occasion his left shoulder "popped out". He then felt numb in his left arm and fingers. Dr Irani said there was no evidence to suggest that any subluxation or dislocation of the left shoulder joint was present. The examination of the respondent's left shoulder joint showed that it was normal. 20 Dr Irani continued to certify him fit for light duties and reviewed him on 15 October 1990, 30 November 1990, 18 January 1991 and again on 20 February 1991. He was still complaining of symptoms similar to those earlier referred to. Dr Irani said that he had tenderness in his left hand but there was no swelling seen and any movements of his shoulder caused pain and discomfort. He could detect no neurological abnormality in the left hand. 21 The respondent made further visits to Dr Irani on 8 March 1991 and 10 May 1991. He failed to keep an appointment on 9 August 1991. Dr Irani expressed the opinion, in the report dated 9 September 1991, that the respondent had sustained injuries to his left shoulder in two separate accidents. He said that initial conservative treatment was unsuccessful. He described the operation and the subsequent physiotherapy with which the respondent was treated. He said that he resumed light duties but was unable to continue. Dr Irani said that, in his opinion, the respondent remained fit for light restricted duties that did not involve excessive and heavy use of his left arm and shoulder. He concluded his report by saying, "His overall prognosis remains guarded". 22 On 2 July 1991 the respondent saw another orthopaedic surgeon, Dr Hopcroft. Fairly obviously, the reason for the respondent's desertion of Dr Irani was because Dr Hopcroft practises in Taree and Dr Irani in Blacktown. The respondent had gone to live in Taree. Dr Hopcroft obtained a history which is in accordance, generally speaking, with that recounted from the reports of Dr Smith and Dr Irani. Dr Hopcroft said that, because of "his massive muscular frame and excellent physical fitness" continuing problems had occurred with the joint causing "the current situation". Dr Hopcroft does not describe the respondent's complaints other than to refer generally to his seeing him "because of problems with his left shoulder". 23 Dr Hopcroft operated on the respondent in the Manning Base Hospital on 9 July 1991. He excised "gross granulation tissue, repaired the capsule and transfixed the joint using a 4" Knowle's pin". 24 Two weeks later, the respondent while at home, complained that, on moving his shoulder, he felt "a sudden breaking noise in the joint". Dr Hopcroft saw him the following day and said that he "felt he may well have re-subluxed the joint fracturing the screw". By "screw" Dr Hopcroft was referring to the pin which he said he inserted. X-rays, however, showed that the pin was in fact "acting as an excellent sub-clavicular splint and holding the joint in excellent position". Dr Hopcroft left it in place "for as long as possible". He "allowed" the respondent "to continue with collar and cuff and body binder to effect the most solid ankylosis (adhesion) of the joint that was possible". There is no earlier reference to the collar and cuff in the report and it is not clear in what circumstances the respondent came to be wearing these. Dr Hopcroft said that he examined him again on 7 August 1991 and found that the joint was holding well. It was in fact in a better position than the joint on the right unaffected side. He expressed a guarded opinion as to the future saying that, as a result of the respondent's "great muscularity", the joint would continue to cause problems in the future. He thought that a more conventional "excision" of the outer end of the clavicle might become necessary. 25 Further reports from Dr Hopcroft are dated 8 May 1992, 25 May 1993 and 16 June 1995. On the last of these occasions, Dr Hopcroft expressed the opinion that the respondent continued to suffer from pain in the left shoulder joint and quite marked distortion of the bony anatomy at that site due to his previous injury and surgery. He said that he believed that these related "entirely to the accident sustained on 14 October 1989". Dr Hopcroft added: "I believe the incident which occurred on 4 January 1990, wherein he wrenched his left shoulder severely in abduction, temporarily aggravated his underlying problem. I believe that his current employment is affected by the problems in his left shoulder, as heavy traction strains such as are exerted in the lifting of any heavy object, causes significant problems to that particular joint. I believe that he is effectively totally incapacitated as a crane driver, being unsafe to work in that environment. I believe his major incapacity began as a result of the injury sustained on 14 October 1989. I believe he is likely to develop further problems with his shoulder into the future and may well require excision of the outer centimetre of his left clavicle in the long term in order to significantly decrease the symptoms that are inevitably going to occur at that site, which will include increasing deformity and increasing pain. I believe that his future loss of earning capacity is significant [sic] as a result of the motor vehicle accident of 14 October 1989. I believe that if he ultimately requires excision of the outer centimetre of his left clavicle, this will be both as a result of his motor vehicle accident, but also as a result of the further aggravation sustained in the abduction injury of January 1990." 26 Dr Smith, Dr Irani and Dr Hopcroft did not give oral evidence. Oral evidence was given by Dr GE Scarf. Dr Scarf described himself as a medical practitioner. His letterhead shows that he carries on practice under the name "Medlegal Services". Dr Scarf is a fellow of the Royal Colleges of Surgeons in Edinburgh, England and Australia. He made reports on 9 June 1992 and 12 April 1995. The reports are lengthy and I do not refer to much of the detail in them. The appellant's solicitors retained an investigator to make observations of the respondent from time to time. The investigator's reports are in evidence as are videos taken of the respondent. These were referred to Dr Scarf. Dr Scarf's prognosis as expressed in his report of 12 April 1995 was that the respondent would suffer some degree of discomfort in the left shoulder joint area associated with the inevitable onset of degenerative change. He considered that management should be conservative. He did not think that any further injections or surgical treatment were required. He said that he believed that observation of the respondent outside the clinical environment should be conducted to determine "his real activities". He expressed the view of the percentage of disability the respondent had suffered in his shoulder as being 29 per cent. He added, however, that, in his opinion, the figure would be subject to challenge "looking at the overall picture with the lack of wasting around the left rotator cuff and scapular area and the left upper limb clearly being used in a reasonably normal manner". 27 In his oral evidence, Dr Scarf referred to the detail of the videos which he had been shown referring amongst other things to the respondent being shown in 1991 as using a crow bar "in the usual customary violent manner to do what he had to do, and using a shovel in a normal manner". 28 The medical evidence to which I have referred is not the only medical evidence called in the case. Nevertheless, it is the more critical medical evidence and that which was substantially referred to by counsel in their submissions. In his judgment his Honour referred to the reports of Dr RL Thomson, who is described on his letterhead as "Legal Consultant". Plainly he saw the respondent for medico-legal purposes. In a similar category is a report of Dr S Khan. His report is written on the letterhead of a firm, Medega Services. 29 His Honour delivered two sets of reasons, the first on 4 November 1997 and the second on 6 March 1998. He also dealt with a stay application and an application under the slip rule, the latter on 21 May 1998. 30 In order to understand the findings that his Honour made it is necessary to consider the two principal judgments comprehensively but, in recounting the effect of his findings, it is difficult to do otherwise than to refer to each of the judgments serially. I have earlier referred to his Honour's account of some of the evidence given by the respondent. His Honour referred to further evidence given by him including evidence of incidents in which the joint "came out". He would wake up during the night in a great deal of pain which was preceded by "a grating crunching noise". The respondent said that to "get his shoulder back in", he would press on it and wriggle his shoulder and "you can feel it grate and it just pops back in". Following these incidents, the shoulder was said to be quite sore for several days. Pain-killing tablets were taken when this occurred. 31 His Honour then described casual work which the respondent had done since the two accidents and jobs for which he had made application but not succeeded in obtaining. The respondent gave instances of work which he thought he could do. He gave evidence of his capacity to work in the garden and to build a fence at his home. He also said that he was able to "play" with a couple of horses. He said that he "jogged the trotters". He owned one and "jogged" the other for a friend. He did this for a couple of hours each morning. His Honour referred to part of Dr Hopcroft's evidence although not the entirety of the paragraphs which I have quoted. He also said that, in the course of the hearing a number of videos were admitted in evidence. The respondent admitted that a video taken of him carrying out fencing work was a couple of days before the operation carried out by Dr Hopcroft to insert the pin in the shoulder. The respondent said that he would not class what was observed on the video as heavy labour. He said that, before he had done the work, he had been filled up with pain killers. The respondent said that he was registered as a trainer at the Taree Harness Racing Club. He admitted to running one of the two race horses which he owned on two occasions. He also demonstrated how he could lift a trotting gig. 32 His Honour referred to the videos more generally saying that they demonstrated that the respondent was able to carry out a very large number of tasks involving the use of both hands. The evidence showed that he was able to dig a hole with a crow bar and shovel, exerting considerable weight on both his left and right hands. It showed him working in the garden hammering in fence stakes. His Honour said that the respondent admitted that he had constructed fences and worked at various activities around the racing club. His Honour continued: "It was clear from the plaintiff's evidence, particularly in cross-examination, that whenever he gave an answer which would be apparently unfavourable to his case, that he would qualify it and indicate that whatever task he was doing which was of a physical nature, would cause pain, either at the time or subsequently or both. The plaintiff is able to jog a trotter sitting in a gig behind that trotter using both left and right hands, even though the left hand is extended forwards. The plaintiff, in almost every answer, endeavoured to minimise his writing skills and working skills and stressed his disabilities in much of his evidence and would qualify his evidence on most occasions that he had to give an admission which may appear to be harmful to his case. The evidence shows that the plaintiff is of average intelligence and despite literacy and numeracy difficulties, is a resourceful and careful witness who would present his evidence in a way best suited to assist a case that would entitle him to compensation." 33 His Honour also referred to Dr Scarf's evidence, particularly to that in which Dr Scarf said that he could find no evidence of wasting of the small muscles of the left hand and arm or other limitations to suggest motor deficit associated with trauma to the elbow. 34 His Honour quoted at length from Dr Scarf's report of 12 April 1995. 35 Additionally, his Honour referred to a report by Dr Thomson of 7 April 1993 in which he said that, given the intervention of two surgical procedures and the indifferent outcomes of them together with the problem of pain and tenderness at the site, the reasonable clinical expectation was that the condition would persist together with the range and type of physical "constrictions" in consequence of them as well as significant constrictions on his amenity of life. He referred to "the prominent pain and tenderness to any form of palpation noted at the site". Dr Thomson said that the respondent was permanently unfit, "on that basis", to perform his previous duties as a crane driver or any alternative form of lighter duties requiring a normal upper left limb/shoulder or the undue requirement of force, strength, stamina, repetitive use or abduction of the shoulder. He said that "he might at most only be fit for very light alternative duties" where those requirements were distinctly secondary or irrelevant. He assessed the percentage loss of efficient use at fifty per cent but, in a later report dated 20 June 1995, this percentage was reduced to thirty per cent. 36 His Honour referred to Dr Hopcroft's reports and to a report of Dr Khan dated 23 May 1991 in which Dr Khan had said that there was no evidence of neurological deficit in either upper limb. There was no evidence of muscle wasting in the left upper limb but the respondent said that he had been exercising the muscles of his left arm to prevent them from wasting. He thought that the respondent had recovered significantly from the injury to his left shoulder joint but had persistent symptoms of pain in the region and restriction of his left shoulder movements. 37 His Honour next referred to an application for compensation which resulted in a judgment given by Commissioner Ashwood. Counsel referred to her decision in the course of their submissions. Counsel for the appellants relied upon it to show that she had found the respondent's earnings to amount to the figures which she gave and which she described as net. The case before Commissioner Ashwood did not involve the appellants although the respondent was a party to the proceedings before her. In those circumstances there can be no estoppel. It may be that the case could be relied upon as some form of admission on the part of the respondent but the difficulty is that one cannot be sure of the basis upon which the Commissioner made her findings. Furthermore, it may be expected that Commissioner Ashwood would have been dealing in gross figures notwithstanding that she refers in places to net figures. Having reflected on the matter, I do not think that anything can be taken from her decision one way or the other. 38 His Honour then returned to the respondent's loss of earnings. He said that his case, as put by his counsel, was that "the gross income" of the respondent between 7 February 1989 and 29 June 1989 was $986 per week and between 14 October 1989 and 4 January 1990 an average of "$736 per week gross". 39 His Honour said that the respondent's case was that he was hopeful of achieving some employment with a salary of about $340 per week (gross or net is not stated) and that the respondent conceded $300 as an appropriate figure, "although it could be argued that a smaller sum is appropriate". It was submitted on the respondent's behalf that it was appropriate to consider the accident of 4 January 1990 as causing $150 per week loss and that the respondent would approach the Compensation Court for an award of that sum. 40 His Honour then drew some conclusions. He said: "It is my view that the plaintiff has shown that the injury to his shoulder prevents him operating a crane of the type which he formerly operated. That there are new cranes available does not entitle the defendants to have the court accept that the plaintiff is capable of operating such machines. The onus is on the defendants to show the plaintiff's capacity to operate such machines, both from an educational and physical point of view. That evidence has not been placed before the court sufficient to show that the plaintiff is capable of returning to his former employment as a crane driver and dogman. His dogman capacity is limited by the serious injury which he has sustained to his shoulder. I find that the plaintiff sustained the injuries as a result of the defendant's negligence which predisposed him to the aggravation injury at work on 4 January 1990. I need to have further argument from counsel as to the way in which the damages flowing from the two injuries should be dealt with. I do consider that the plaintiff has suffered a severe injury which entitles him to a determination for non-economic loss. I believe the appropriate proportion in terms of the Act is 25% of a most extreme case. As at 1 October the indexed amount for a most extreme case is the sum of $250,000 and in accordance with s.79(5) of the Act the sum of $62,500, being 25% of that sum is affected by the requirement to apply the deductible set out in s.72(5) and accordingly, that sum will be reduced by $13,500 making a nett amount payable of $49,000. In relation to economic loss, I consider that the plaintiff has, through both injuries although suffering an incapacity that prevents him earning what would be a comparable wage of $950 per week, has nonetheless retained a capacity to work at a large number of occupations, notwithstanding the injury that he has suffered. The plaintiff clearly is an active and fit person whose diminution in use of the left shoulder has only partly reduced the work that a strong and fit person such as the plaintiff was, at the time of the first injury, able to do. The plaintiff has demonstrated particularly on the video evidence, a physical fitness considerably exceeding his own evidence which latter evidence I find to have been exaggerated in terms of his disabilities. I consider that a person who can drive as an interstate truck driver for ten years, is able to carry out sufficient clerical skills to operate a cash register or work behind a counter. The plaintiff has skills as a driver which may not be able to translated into a bus driver but he is still, in his own words, able to carry out the driving tasks. He has considerable resourcefulness in the fairly heavy gardening and fence building tasks which have been demonstrated and his capacity to carry out labouring work or work in and around a race track or as a security guard have not been demonstrated as being beyond his ability. The period of qualification for a security guard application licence now having elapsed, that is a task which is an activity which is available to him and for which he is suited. The demonstration of him using a crowbar on the video tape was not considered by the plaintiff, in his evidence to be heavy work and he said he was capable of doing some heavy manual work. There are therefore within his capacity, many activities in relation to gardening, landscape, and general manual work which do not require repetitive heavy use of the plaintiff's shoulder, for which he is suited. There would be a degree of bench-work available to him and positions such as a courier clearly would be available. Talking into account the range of skills which the plaintiff still has and the difficulty that he will have with obtaining certain employment because of the injuries he sustained, I consider that he has a capacity to earn work in the various occupations which I have outlined. It is my view that the plaintiff has a capacity to earn in the nature of $550 per week and therefore the loss which he has sustained in his earning capacity is of the order of $400 per week in that he is, in my view, unable to carry out his previous occupation as a dogman and crane driver." 41 His Honour does not say whether the figures of $550 per week and $400 per week mentioned in the last paragraph of the quotation are gross or net figures. 42 His Honour thought that the plaintiff would have worked until he was sixty-five years of age. He thought that a reduction "for vicissitudes" of fifteen per cent should apply. He also referred to the component that would need to be included because of the decision of the High Court in Fox v Wood. 43 His Honour thought that the matter should be relisted for the filing of appropriate calculations and for further argument in relation to the application of the Workers Compensation Act 1987 ("the Act") and "the additional argument" in relation to the "new s.68A" of that Act and its relationship to the earlier mentioned decision in Kempsey District Hospital v Thackham. 44 His Honour stood the matter over after making some appropriate directions as to the future of conduct of the case. 45 In his second judgment delivered on 6 March 1998, his Honour recapitulated some of what had been decided in the earlier judgment and said: "Lest I failed to make it clear, then I wish to now state that the finding of $400 loss of earning capacity was from the time of the first of the two injuries that he sustained to date, that finding a continuing loss of earning capacity. [sic]" 46 His Honour referred to the concession made by counsel for the respondent that it was necessary to consider the effect of the second injury on 4 January 1990 and that it had caused a continuing loss of earning capacity of $150 per week. His Honour said that the figure of $150 was later reduced to $92 per week consequent upon his finding as to loss of earning capacity. He added that counsel had indicated that the respondent would be approaching the Compensation Court for an award of that amount. His Honour also said: "It is clear on the evidence before me, that the injury suffered on 4 January 1990 was a substantial exacerbation of the injury sustained on 14 October 1989. … The range of activities that are suggested as possible employment for the plaintiff are not, in my view, varied by the second injury sustained. Each of the types of work referred to in the judgment or any similar employment is, in my view, likely to create the same limitation on earning capacity whether the plaintiff were seeking employment before the further injury of 4 January 1990 or afterwards. Although he has suffered further injury, pain and suffering and personal physical limitation, it does not appear to me that there is any further limitation on his earning capacity. I consider therefore, that notwithstanding that there was an additional injury, that there was no further diminution in his earning capacity arising from that injury particularly in light of the evidence by way of video showing the physical skills he could exhibit. A wide range of employment as already outlined in relation to his activities on and around the trotting track and the training of animals, are skills which he still retains." 47 His Honour then said that he would allow the respondent his past loss of earnings based on "a gross income of $950 for the wages lost" (emphasis added). He also allowed the respondent his claim for out-of-pocket expenses and made provision for the inclusion in the award of a Fox v Wood component. 48 He said that, because there were some adjustments of figures from the last hearing and calculations consequent upon the judgment, counsel should approach his associate to arrange a hearing within the course of the next few days to finalise the calculations. There would also need to be argument as to costs. 49 On 31 March 1998 his Honour made a direction for the entry of judgment in accordance with apparently agreed short minutes of order. The detail of these is referred to by his Honour at the commencement of his judgment. The appellants made an application for a stay and his Honour made an order that the judgment be stayed "in the sum of $250,000". 50 The final judgment was published on 21 May 1998 and is described as a judgment "Pursuant to Slip Rule". 51 His Honour after some argument, concluded that it was a case for the application of the slip rule. He said that the slip in his judgment was the failure to make it clear that he was dealing with gross figures. He said that the judgment was based on figures "in the rather scant evidence of income in the proceedings" adduced as to the respondent's gross earnings. His Honour said that he considered that the slip was the failure to express the figure as gross or to make it clear that it was gross. He applied the slip rule and indicated that the figures that he expressed were intended to be gross emphasising that the figures in his judgment of 6 March 1998 were gross figures. Nevertheless, the minutes of order which are included with the appeal papers suggest that the figures were not altered as a consequence of his Honour's application of the slip rule and remained gross figures. A search of the papers does not reveal any different position. It does reveal that the judgment has not been entered. 52 Before coming to the submissions of the parties, I need to say something about the evidence that there is of the respondent's earnings both before and after the first of the accidents. 53 In the respondent's statement of particulars it was said, under the heading, "Loss of earnings", that the respondent was employed as a crane driver and that at the time of the first accident he was earning an average of $741.50 net per week. Reference was made to the first period off work which he had, to the second accident, and to his being off work subsequently. It was said that the respondent claimed lost earnings from the date of the accident on 14 October 1989 until 10 November 1989 and from 4 January 1990 to date at the rate of $741.50 net per week. The particulars then dealt with future loss of earning capacity. It was said that it would be alleged that the permanent loss of function in the left shoulder suffered by the respondent would permanently incapacitate him for much of the type of work he was suited to perform prior to the accident. It was said that the respondent would claim a loss of earning capacity at the rate of $600 net per week. 54 Annexed to the particulars is a letter from the respondent's employer, Glenrelle Services, dated 12 November 1990. The letter said that he commenced work on 1 February 1989 with a commencing salary of $1,145.91 (net $759.21) per week. He was classified as a crane driver. At the date of the accident his gross earnings were $1,104 gross (net $741.50) per week. Information was given about the then current salary of a comparable employee which was said to be $697 gross or $523 net per week. On the respondent's return to work on 10 November 1989 his gross earnings were $825 gross (net $598) per week. His salary as at the date of the second injury on 4 January 1990 was $633.50 gross (net $482.50) per week. A puzzling feature about these figures is that they appear to suggest that the earnings for the position declined during the period from 1 February 1989 to 12 November 1990 which is the date of the letter. 55 I have earlier referred to the respondent's evidence of his earnings in which he said that these were in the order of $900 per week gross. 56 There are then in evidence copies of the wages records of Glenrelle Services in relation to the respondent. The original record was not tendered. A copy was accepted instead. The records were kept in a Zions weekly time, pay and wages book. The copy makes it difficult to be sure about the form of the record kept, but it appears to have been spread over two facing pages. The left hand page which, does not deal with earnings, refers to hours worked in each of the weeks dealt with which are said to be from the week ending 4 July 1989 to the week ending 25 October 1989. The earnings are shown on the second page of the double spread. There are a number of columns but it is sufficient to refer to the column for gross wages and that for net wages. These show a variety of figures. Two exceed $1,100 and resulted in a net payment of $755.50 and $741.50 respectively. Neither column shows earnings of over $900 per week (other than the two which are over $1,100). There are three weeks in which the gross earnings were over $800. In others the earnings ranged between $500 and $700. The highest net figures are those to which I have referred. A number of the net figures are of the order of $500 or so. Others are less, one being $336 and another $387. 57 The next period shown in the book is for the weeks ending 31 October 1989 to 13 February 1990. These show the respondent to have been on workers' compensation during the weeks of 31 October 1989, 7 November 1989 and 14 November 1989, and again for the weeks of 16 January 1990 up to and including the week ending 13 February 1990. The respondent's earnings for the weeks during which he was employed show net figures ranging between $400 and $600. The gross figures do not achieve $900 in any week. The highest is $880. Most are substantially less. 58 The difficulty is that the wages records, the letter from Glenrelle Services and the respondent's evidence are not capable of reconciliation. They all differ. They differ for no apparent reason. There was no agreement on wages between the parties and, so far as the record discloses, no attempt to arrive at one. If that had been made, the present difficulties would not have arisen. His Honour would not have made the slip to which he refers in the last of his judgments and it would be likely that there would have been more certainty, if not total agreement, as to what the respondent's earnings at various stages were. 59 The odd thing is that neither party seems to have been aware in the run of the hearings which occurred, at least until the last one, of the error which underlay the figures. The evidence in relation to earnings figures is a morass of uncertainty and ought not to have been left in the condition in which it is. It was the responsibility of counsel and solicitors to see that the issues in relation to actual figures for loss of earnings were reduced to a minimum. That duty has been sadly neglected. Fortunately, this state of affairs does not arise often. Indeed, it would be rare for a case to be left in such a sorry state. His Honour was courteous enough to apologise for his own error. In my view, his error was caused by the failure of the legal representatives to give him the assistance to which he was clearly entitled. 60 As the matter presently stands, there are the three inconsistent sources of evidence about the respondent's earnings to which I have referred. These are the letter from the respondent's employer annexed to the particulars, the respondent's evidence, and the wages records. His Honour's findings are as I have stated them. In those circumstances, the sensible course is to take his Honour's findings as a base, to decide whether or not the figures were gross, and, if they were, to make the necessary adjustments so as to reduce them to net figures. Commendably that was the course suggested by counsel for the appellants in his submissions. Indeed, he did not rely upon the wages records at all. 61 I think it is clear on the face of the evidence and the judgment that his Honour did use gross figures. Any other view is very difficult to maintain in the light of the way in which the various statements made by his Honour are expressed. It was apparent from the judgment delivered by his Honour in relation to the slip rule that he thought he had made the error of which the appellants complain. 62 There was substantial opposition by counsel for the respondent to the course proposed by the appellants being adopted. Two principal reasons were relied upon. One stemmed from the fact that counsel for the appellants, then counsel for the defendants, had had an opportunity of looking at the suggested short minutes provided by counsel for the then plaintiff, now counsel for the respondent. Counsel for the appellants very frankly conceded to us that he had neglected to look carefully enough at the detail of the short minutes and had not discerned the fact that the figures used were gross rather than net. The difficulty I have with the respondent's submission is that the error which was made was made initially either by counsel or by the solicitors for the respondent. Both counsel for the appellants, and subsequently his Honour, were misled by the original error made by the respondent's legal representatives. It is true that counsel for the appellants should have picked the error up but the error was in fact common to the representatives of both parties. In those circumstances the respondent ought not now be able to escape the consequences by endeavouring to place the entirety of the blame on the appellants. That is enough to dispose of the submission. But there are some other matters. 63 Counsel for the respondent appeared to say that the appellants ought not now be relied to rely on the true figures. However, when asked whether the submission was based on a form of estoppel, he said that he did not rely on estoppel but, as I understood the submission, simply upon discretionary matters based upon the circumstance that the matter had been concluded upon the basis of the figures in the short minutes which he had shown to counsel for the appellants. What I have said in the previous paragraph disposes of this aspect of the case. 64 Counsel for the respondent also submitted that his Honour's application of the slip rule was an inappropriate one. A number of authorities were referred to. The slip rule is provided for in Part 20 rule 10 of the Rules. In substance it provides that, where there is a clerical mistake, or an error arising from an accidental slip or omission, in a minute of a judgment or order, or in a certificate, the Court, on the application of any party or of its own motion, may, at any time, correct the mistake or error. The decisions of the English Court of Appeal in Muir v Jenks [1913] 2 KB 412 and in Navimprex Centrala Novala v George Moundreas & Co SA (The Times, 21 March 1983) noted in 58 ALJ 114 are authorities for the proposition that the rule is not confined to accidental slips or omissions on the part of the particular court recording the judgment but empower the correction of a clerical error in the judgment where this has arisen as a consequence of an accidental slip or omission by someone else such as a party's legal advisers. The author of the note in the Australian Law Journal expressed the opinion that these authorities were in consonance with the weight of practice and also with principle. Reference was made to "the abundance of instances of common occurrence in which judges have corrected clerical errors in judgments due to mistakes by parties or their legal advisers, either by consent, or at least without objection". 65 There is a substantial treatment of the operation of the slip rule in the Practice. See the notes to the rule at 2462-2464. The authors of the Practice point out in paragraph 20.10.8 (at 2464) that independently of the power conferred by the rule, where an order has not been passed and entered, the court may vary or rescind any of its orders where it is appropriate to do so. Reference is made to Part 40 rule 9(1) of the Rules. One of the difficulties in the present case is that there does not appear to have been made by the Court any formal order to give effect to his Honour's judgment in which he said, correctly in my opinion, that it was a case for the application of the slip rule. Nothing appears to have been done to correct the short minutes of order which were originally lodged and which were in accordance with the judgment of 6 March 1998. The judgment not having been entered, it would have been open to his Honour to make any correction which might be required as a consequence of the error referred to in his judgment about the slip rule. As the authors of the Practice point out, he could have done this under Part 40 rule 9. But the matter now having been dealt with by way of appeal, it is more practical for any error to be corrected by this Court. To send it back to his Honour would seem a not very productive course to take especially when there is an independent point to be dealt with which does not involve the slip rule. 66 Before concluding this part of the case, I should mention that counsel for the respondent submitted that, in the event that the Court thought that there was an error which needed correction, the matter should not be dealt with by this Court but should be remitted for a new trial. In the run of the argument there was discussion about the fact that the figures which were used in evidence were figures of earnings which were no later than 1990. The matter was heard in July 1995 and the judgment was not finalised until 1998. It is strange that figures current in July 1995 when the matter was heard were not used by the parties, but they were not. It may be, although counsel for the respondent resisted this suggestion, that the real reason why a new trial is sought in the event that the amount awarded by his Honour be the subject of reduction, was the opportunity that would give for the respondent to rely on more up to date figures than were relied upon at the trial. Against this it will be remembered that the earnings figures that are in evidence suggest that wages of crane drivers and dogmen were undergoing a decline in 1989 and 1990. If this trend had continued, counsel for the respondent may have made a conscious decision at the trial not to lead evidence of current figures because they were not as advantageous as the earlier ones. All this is speculation. The important matter is whether there should be a new trial. I am firmly of the opinion that there should not be. Such corrections as need to be made can be made by this Court. 67 In relation to a new trial, I would remark, in passing that it may not have been the most advantageous outcome for the respondent. A new trial would be before a different judge. All matters would be open to be reconsidered. On the evidence to which I have referred it would be open to the Court on a new trial to take the view either that, the respondent was substantially exaggerating his disabilities or that the second injury, which occurred on 4 January 1990, provided a much more significant reason for such disabilities as the respondent has than his Honour thought was the case. 68 So far as the figures to be used are concerned, I am of opinion that we should accept those used in the submission made by counsel for the appellants to which reference has been made. In his submission the correct approach is to apply the marginal tax rate which applied as at 4 June 1990 to $950 found by his Honour to be the figure for pre-injury weekly earnings. This, so counsel said, would produce a net figure of $667. A similar course was contended for in relation to the lower figure found to be the measure of the respondent's working capacity after the respondent was found to be fit for some forms of work. His Honour thought that his continuing loss was $400 per week. That meant that he continued to be able to earn $550 per week. Counsel said that $430 per week was the net figure to be taken into account. On that basis the respondent's continuing weekly loss was the difference between $667 and $430, or $237. Subject to the figures being checked, I am in agreement with the approach adopted by counsel for the appellants. It should be applied to the claims both for past and future economic loss. And, so far as future loss is concerned, the capital sum arrived at needs to be subjected to the conventional fifteen per cent discount. There will also be the need to recalculate the Fox v Wood component. 69 I then come to the other point in the case which is founded upon the decision of this Court in Kempsey District Hospital v Thackham. In that case a worker suffered a work-related injury with his first employer. It gave rise to a right to claim at common law for damages. He suffered another work related injury some seven years later with a second employer which did not give rise to any common law rights. He sued the first employer at common law and recovered damages in respect of both injuries. The trial judge deducted from the assessment of damages amounts paid by both employers in respect of workers' compensation but did not deduct all future entitlements payable by the second employer under the Act. It was held that both compensation actually paid by the second employer and that payable in the future were to be deducted from the worker's damages. Reference was made to Kornjaca v Steel Mains Pty Ltd [1974] 1 NSWLR 343 and Hood Constructions Pty Ltd v Nicholas (1987) 9 NSWLR 600. In the course of his reasons in Thackham, Meagher JA said (at 505) that, if over compensation was to be avoided, both amounts paid and amounts payable ought be deducted. He acknowledged that this meant that, within a common law case, there must be a trial-within-a-trial, so that the trial judge must decide what a workers' compensation judge would probably determine. His Honour thought that this result would not be contrary to s.151Z of the Act. His Honour added (at 505-6): "The expression "creating a liability … to pay damages" [the language of s.151Z] in that section denotes, and denotes only, a liability to pay damages for that injury if that were the sole injury in question. In the present case, the second accident did not create any tortious liability in the appellant." 70 One of the responses made by counsel for the respondent in relation to this aspect of the case was based on s.68A of the Act. Counsel for the appellants said that the section had no application because it was dealing with lump sum compensation. The compensation in question here was compensation by way of weekly payments payable because of the respondent's inability to achieve his pre-injury earnings. Counsel for the respondent said that the section nevertheless applied because of the provisions of s.40A of the Act. In the view I take of this matter, it is unnecessary for the Court to consider these various arguments. My reason for that conclusion is provided by his Honour's findings in relation to the effect of the second injury upon the respondent's loss of earning capacity. He concluded that there was no additional loss occasioned by the second accident. Counsel for the appellants said that this finding was perverse, it being against the totality of the evidence which there was. 71 One of his Honour's conclusions is stated in a passage in the judgment delivered on 6 March 1998 which has been quoted above. His Honour there said that, lest he failed to make it clear, he wished to state that the finding of $400 loss of earning capacity was from the time of the first of the two injuries that the respondent sustained. In the principal judgment delivered on 4 November 1997 his Honour said that it was his view that the respondent had a capacity to earn "in the nature of $550 per week". Accordingly, the loss which he sustained in his earning capacity was of the order of $400 per week in that he was unable to carry out his previous occupation as a dogman and crane driver. 72 Was the approach which his Honour followed justified on the basis of the evidence? In my view it was. That conclusion stems from opinions expressed by Dr Hopcroft in his reports. In his report of 25 May 1993 Dr Hopcroft said that he believed that the respondent's permanent incapacity to perform his pre-injury type of work was directly as a result of the accident suffered on 14 October 1989. He added that the aggravation of pain suffered in the shoulder in January 1990, he believed, simply aggravated the underlying problem which he was suffering as the result of the motor vehicle accident. He said that he did not believe that that episode, in January 1990, in any way significantly affected "his current status and certainly did not affect his present or future capacity for work". 73 In his report of 16 June 1995 Dr Hopcroft said that he believed the incident which occurred on 4 January 1990 temporarily aggravated the respondent's underlying problem. Later, he said that he believed that the respondent's major incapacity began as a result of the injury sustained on 14 October 1989. He concluded, however, that he believed that, if the respondent ultimately required excision of the outer centimetre of his left clavicle, this would be both as a result of his motor vehicle accident and also as the result of "the further aggravation sustained in the abduction injury of January 1990". 74 His Honour referred generally to Dr Hopcroft's reports in his judgment. He referred specifically to the report of 25 May 1993 which has been referred to. His Honour quoted some paragraphs of the report but not the one which I regard as critical for present purposes. Nevertheless, he plainly had the report before him and took its general purport into account. He also made specific reference to the report of 16 June 1995 (referred to in the judgment as the report of 20 June 1995). He quoted one of the six paragraphs which I have earlier quoted but, again, not the critical paragraphs appearing at the end of the report to which I have made reference in connection with the submission now under consideration. 75 I agree that Dr Hopcroft's opinions are not, at least on their face, consistent. In the 1995 report he gave some place to the impact of the second injury. But the important point for the moment is that his Honour expressed himself as satisfied that the respondent had suffered a continuing loss of earning capacity of $400 per week from the time of the original injury in October 1989. In my opinion that finding was well open to him and ought not be disturbed. 76 Counsel for the appellants relied upon the fact that counsel for the respondent appeared to concede at the trial that the appellants should have the benefit of a reduction in the amount of damages because of the Thackham principle. Initially the figure was put at $150 per week. Later, it was reduced to $92 per week. It is not clear to me from what counsel said whether the figure was intended to be treated as if it applied indefinitely or was for a limited period. As counsel for the respondent submitted, this was but one of the possibilities discussed by counsel with the primary Judge. I do not consider that counsel for the respondent foreclosed his position in relation to this matter by making concessions about the amount to be taken into account if Thackham were applied. 77 That being my conclusion, it is unnecessary to consider the submission based upon s.68A or submissions in relation to whether Thackham is necessarily applicable to the circumstances of this appeal. Those questions do not arise because his Honour has not approached the case as a Thackham case and was, in my opinion, entitled to follow that course. It follows that the submissions made by counsel for the appellants based on the Thackham principle do not arise for consideration. 78 In the result the appellants have succeeded on the first point. His Honour, as he himself acknowledged, was in error in using gross figures. The figures need to be recalculated on the basis of net amounts. The appellants have failed on the Thackham point. It is important that there be no further chance of error in the calculations to be done in this case. I am not anxious to delay the matter further than it has been. But I think the safer course to adopt is for counsel for the appellants to prepare short minutes to give effect to the Court's decision and to attempt to agree on those short minutes with counsel for the respondent. If there is agreement, the matter can be disposed of without the need for any further argument or hearing. If there is not agreement, the matter should desirably be disposed of by written submissions. Accordingly, I would stand the matter over for short minutes of order. In the event of disagreement about their form, counsel are to lodge submissions in support of their contentions as to the form of the short minutes on or before 1 April 1999. Counsel should in any event lodge such submissions as they wish to make in relation to the costs of the appeal.

Smithson v Baines

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Judgment (9 paragraphs)

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Cases Cited (3)

Cited By (1)