4 On 12 December 2000 David Andrew Rattray suffered a partial thickness tear of his right supraspinatus tendon in the course of his employment by the Department of Sustainability and Environment. Mr Rattray was a seasonal firefighter. When he suffered this injury he was assisting another firefighter to remove a fallen tree from a fire access track near Bright in north eastern Victoria. As it was being moved the tree sprang backwards and struck Mr Rattray in the right shoulder.
5 Mr Rattray claims that the injury to his right shoulder is a serious injury within the meaning of s.134AB of the Accident Compensation Act 1985, such that he is entitled to claim common law damages for the losses he has suffered as a result of it. To this end, by an originating motion filed on 5 July 2004, he sought leave of the County Court pursuant to s.134AB(16)(b) of the Act to institute such a proceeding. The defendant to this originating motion, Mr Rattray's employer, denied both that he had a permanent serious impairment of body function and that he had a 60% loss of earning capacity as required by s.134AB(38) to enable his damages claim to include a component for pecuniary loss.
The County Court proceeding
6 Mr Rattray's application was tried before a judge of the County Court in May 2005. Her Honour gave judgment on 1 June 2005 upholding the application. She published reasons making it clear that that grant of leave entitled Mr Rattray to bring proceedings for damages generally, including damages for pecuniary loss.
7 Mr Rattray's injury and its aetiology were not in dispute in the County Court. What was in dispute was whether any impairment arising from that injury was permanent and whether the consequences of that impairment were very considerable for Mr Rattray, both as to pain and suffering and as to any loss of earning capacity, so as to satisfy the statutory criteria for leave to be granted.
8 In the course of a comprehensive judgment complying in all respects with s.134AE of the Act, her Honour made a number of findings. She did so on the oral evidence of Mr Rattray and his wife and a Mr Frawley, an orthopaedic surgeon, and medical and other reports tendered to the Court. Those findings included a description of Mr Rattray's personal and work history before and after he injured his shoulder, the happening of that event, his subsequent treatment and the occurrence and effect of an intercurrent right tonsillar carcinoma for which he had both surgery and chemotherapy.
9 In reaching a conclusion that Mr Rattray suffered a permanent impairment as a result of his right shoulder injury, her Honour dealt with, and rejected, an argument by the employer that he had failed to mitigate his loss by undergoing further investigations and possible treatment on his shoulder. She then considered whether Mr Rattray's impairment was a "permanent serious impairment" so as to satisfy the definition of "serious injury" in s.134AB(37) of the Act; that is to say whether it was a permanent impairment which met the test of being able to be "... fairly described as being more than significant or marked, and as being at least very considerable" as required by s.134AB(38)(c).
10 The trial judge found that Mr Rattray was suffering ongoing pain, that he had only restricted movement in his right arm, that he no longer played sport and had other constraints on his recreational and family activities. She accepted that driving a bulldozer presented difficulties for him due to pain in his shoulder caused by the machine being jolted as it traversed uneven ground. She discounted criticism based on surveillance video material and generally accepted his description of the pain, restriction and disability arising from his injury. In a section of her judgment entitled "The Plaintiff's Credit", her Honour analysed issues of credit relating to the plaintiff and his wife and concluded that they each should generally be accepted as witnesses upon whom reliance could be placed. She concluded that insofar as pain and suffering were concerned the plaintiff met the "very considerable" test set out in s.134AB(38)(c).
11 The trial judge then proceeded to consider the question of whether Mr Rattray met the criterion set out in s.134AB(38)(e), so as to entitle him to claim damages for economic loss. To meet this criterion he would have had to establish that at the date of the hearing of the application he had a loss of earning capacity of at least 40% and that such loss would "continue permanently".
12 Her Honour referred to such evidence as there was before the Court as to Mr Rattray's earnings before and after his accident, and considered other evidence as to available remuneration in the off season job which Mr Rattray performed when not engaged in firefighting for DSE and evidence as to the earnings of a comparable DSE employee. Her Honour then put all this evidence aside because, as she said, she had made findings as to Mr Rattray's incapacity for work and the availability of suitable employment which made any further consideration of them unnecessary.
13 The trial judge found that, although the plaintiff had a residual capacity for light work, his loss of earning capacity was 100%, because he was unable to find any light work in his region. She gave extensive and cogent reasons for reaching this conclusion. In doing so she appropriately reviewed the evidence of the plaintiff and reports of two organisations whose function it is to assist injured people to return to the work force. In doing so she made a number of references to the question of whether work was "available" in the region where the plaintiff lives, namely about five kilometres from the town of Bright. She referred to the definition of "suitable employment" in s.5 of the Act and noted that a claimant's place of residence was a relevant matter in determining whether any particular work was to be considered suitable. Her Honour concluded that Mr Rattray had discharged the onus placed upon him by s.134AB(38)(e), (f) and (g) so as to entitle him to claim pecuniary loss damages as well as pain and suffering damages in an action against his employer.
This appeal
14 Mr Rattray's employer has challenged the judge's decision on a number of grounds. Those grounds included three grounds which called into question her determination that Mr Rattray had satisfied the criteria in s.134AB(38)(e) so as to establish the loss of earning capacity required by s.134AB(38)(b). In particular grounds 4 and 5 in the employer's notice of appeal allege a misconstruction by the trial judge of the phrase "capable of earning in suitable employment" in s.134AB(38)(f) of the Act.
15 In his argument on the appeal Mr Ruskin for the employer argued this question by reference to this Court's judgment in Barwon Spinners Pty Ltd v Podolak & Ors[1], where the complex of statutory provisions concerned with serious injury were construed. The case concerned four appeals from the County Court involving different workers and different employers in different factual situations.
16 In that case the Court (Ormiston, Chernov and J.D. Phillips, JJ.A.), in a joint judgment, expressed the view that for the purposes of the serious injury provisions of the Accident Compensation Act 1985, capacity to earn meant the physical capacity to earn income in "suitable employment" whether or not a job was available. The Court considered that this was required by the definition of "suitable employment" in s.5 of the Act, which specifically provides that the relevant inquiry is as to whether the worker is currently suited for a particular employed position which exists in fact, whether or not a vacancy exists. That is to say, in forensic language, to satisfy s.134AB(38)(e) a worker must prove not only the limitation on his work capacity brought about by his impairment but, having regard to each of the other elements of the definition of "suitable employment" in s.5 of the Act, that no job currently exists which he could do in which he would earn 60% or more of his gross income as determined by a formula set out in s.134AB(38)(f). The Court considered that the Act was concerned with the physical consequence of injury and not with its economic effect. Thus analysed, the question of whether a job within the worker's capacity (and taking into account the other indicia set out in the relevant definition of "suitable employment" in s.5) is available for him is irrelevant. The question is merely whether such a job exists.
17 Confronted with this argument Mr Meldrum for Mr Rattray sought to defend his position by submitting that the evidence before the trial judge was such as to enable her properly to reach a finding that no job within Mr Rattray's capacity existed within a reasonable distance of his residential address and that she had in fact made that finding. He referred to various pieces of evidence; in particular to the vocational assessment reports which were before the Court. He submitted that they demonstrated the necessary lack of suitable employment for Mr Rattray which would enable a finding in his favour on this issue to be properly made. He placed emphasis on a number of statements in those reports to the effect that jobs were limited in his local region and that if there were any jobs available he would have heard about them by word of mouth, having regard to the small community in which he lived.
18 But such statements do not assist the worker on the question of the existence of suitable employment. To succeed on this issue he must prove that such employment does not exist.
19 In her reasons for judgment dealing with Mr Rattray's capacity to work, the trial judge had concluded that, although Mr Rattray was suitable for light work, as he could not find any in his region his loss of earning capacity was 100%. Her Honour's extensive reasons for this conclusion did not address the issue of the existence of jobs in Mr Rattray's region, separately from whether any of those jobs was available at the time of the County Court hearing or not.
20 On the authority in Barwon Spinners, the Accident Compensation Act must be thus construed. The question of loss of earning capacity fell to be determined by reference to the physical capacity of the claimant only. The existence or non-existence of a job vacancy in the claimant's region within the claimant's capacity was irrelevant.
21 It follows that her Honour was in error in approaching the question of Mr Rattray's loss of earning capacity in the way that she did. She should have considered the evidence as to whether any job within his capacity, as she found it to be, existed in the area in which he lived, having regard to the other factors set out in the definition of "suitable employment" in s.5 of the Act. Having found that Mr Rattray was employable at some reduced level, whether in terms of activities performed or the period of time over which he could perform them, she ought to have then engaged in the exercise required by s.134AB(38)(f) of the Act. Also, having regard to live issues as to Mr Rattray's engaging in rehabilitation, her Honour needed to consider s.134AD(19)(b) as to retraining, rehabilitation and the undertaking of suitable employment and the onus which fell on Mr Rattray with respect to those issues.
22 If, and only if, the result of these considerations was a determination that Mr Rattray was suffering from a loss of earning capacity of 40% or more, and that that loss of earning capacity would continue permanently, would Mr Rattray be entitled to an order granting him leave to commence a proceeding against his employer for damages which include pecuniary loss damages.
23 In the course of his argument Mr Meldrum also submitted that Mr Rattray was limited, by his injury, to part time employment. It was argued that the judge's conclusion as to Mr Rattray's earning capacity could, therefore, be supported on the basis of a comparison between what he could earn in part time employment within his capacity in his local area and his earning capacity assessed in accordance with s.134AB(38)(f) of the Act. He submitted that such a comparison would demonstrate at least a 40% loss of earning capacity, so as to satisfy s.134AB(38)(e)(i). As there was evidence, he submitted, that would establish that Mr Rattray's impairment was permanent, s.134AB(38)(e)(ii) would also be satisfied.
24 The argument based on part time employment had not been relied upon before the trial judge and was not the subject of any notice of contention in this Court. Unsurprisingly, it was objected to by Mr Ruskin. Further, of course, because of the process of reasoning engaged in by the trial judge to reach her conclusion in Mr Rattray's favour, she had specifically not considered this aspect of the case and there was considerable doubt as to whether sufficient evidence had been led before her to enable her to consider it properly anyway.
25 Following discussion with counsel, Mr Ruskin agreed to a remission of the case to the trial judge in the event that the Court upheld his primary contention that the appeal should succeed.
26 In Barwon Spinners this Court remitted one of the cases there considered to the County Court, as it was unable to express an appropriate conclusion because all the primary facts necessary had not been found by the original trial judge. In this case much of the material already considered by her Honour will be relevant on a rehearing, as will any further evidence tendered by the parties. The task then facing the Court will be to make a decision (as to leave to bring a proceeding under s.134AB (16)(b) of the Act) on the facts as they are found to be at the date of that hearing (as required by s.134AB(38)(e)(i)). Her Honour is, accordingly, better placed than any other judge would be to effect a retrial in accordance with this judgment. She should do so.
27 Accordingly, the appeal will be allowed, the orders made in the County Court on 1 June 2005 will be set aside and the matter remitted to the County Court constituted by the trial judge for rehearing unless she is, for any reason, unable to so constitute the Court. In that event the Court should be constituted by such other judge as the Chief Judge appoints.
28 The costs in the County Court to date should be part of the costs of the retrial. The costs of this appeal should be paid by the respondent, who should have an appropriate certificate pursuant to the Appeal Costs Act 1998.