Steven John French v State of New South Wales

COUNSEL : Appellant - M J Joseph SC & R I Goodridge Respondent - P R Sternberg SOLICITORS : Appellant - Walker Smith, Taree Respondent - I V Knight, State Crown Solicitor CATCHWORDS : DAMAGES - back injury - general damages but no damages for economic loss - no loss of earning capacity - errors in preference in medical evidence and finding of recovery - alternatively, lost earning capacity would not have been exercised - error in wholly excluding financial loss - reassessment required. DECISION : Appeal allowed with costs; judgment for $12,353 be set aside; new trial limited to damages.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

1 GILES JA: This is an appeal by the plaintiff from a decision of Twigg DCJ on his claim for damages for a back injury. The plaintiff seeks reassessment of the damages awarded to a higher amount.

2 The plaintiff was serving a sentence of imprisonment at the Cessnock Correctional Centre. He was willing to work and was assigned to work in the metal shop. On 4 November 1994 an officer of the Centre told him to move some pallets in the metal shop so a fork lift could have passage. The pallets were very heavy, and it was found that the defendant was in breach of a duty of care it owed to the plaintiff because he was required to move the pallets without the use of a pallet trolley or other mechanical assistance. The plaintiff set about moving the pallets, and suffered an injury to his back.

3 The damages awarded were general damages of $10,000, interest on past general damages of $600 calculated at 2 per cent for three years, and out-of-pocket expenses of $1,753, a total of $12,353. From the figures, the general damages were all for the past. No amounts were awarded for past or future economic loss.

4 The appeal was primarily directed to the failure to award damages for economic loss, but if successful could also bring reassessment of general damages. A number of matters were argued on the appeal, but I think it is sufficient to focus on his Honour's treatment of the plaintiff's earning capacity. That treatment should be understood in the light of the evidence of the plaintiff's medical and other background and of findings adverse to acceptance of his evidence.

5 The plaintiff was aged thirty at the time of the injury in question. He had had a history of alcoholism from his teens, and it was found that he still had an alcohol problem at the time of the trial. He had also been addicted to drugs, including a dependence on hard drugs earlier in his life and a more or less continuous dependence on other drugs such as valium and panadeine forte.

6 The plaintiff had worked as a labourer for the State Rail Authority from 1981 to 1985. He ceased that work purportedly because of a back injury, a matter to which I will return, and was then on sickness benefits until May 1986. In that month he was charged with supplying marijuana and was taken into custody, and he was later sentenced to a term of imprisonment for that offence. From his release from prison in 1990 he was on unemployment benefits (in his words, "as everybody does") until he was sentenced to a term of imprisonment for armed robbery of a service station commencing in August 1994, being the sentence served at the Cessnock Correctional Centre. From his release in August 1995 he was on an invalid pension.

7 His Honour said that he did not accept the plaintiff as a witness of truth, and described him as a man who had been used to being careless with the truth most of his life and who regarded the oath to tell the truth and the whole truth as a tool to achieve his end: his Honour also expressed the view that it did not matter what the plaintiff said, provided it was focused on his purpose at the time. One matter to which his Honour specifically referred was the plaintiff's admission that the purported back injury when working with the State Rail Authority was falsely claimed, and that he had falsely prosecuted a workers compensation claim for that injury. His Honour also said that there were many inconsistencies and other aspects of the plaintiff's evidence which required careful scrutiny for corroboration of what he said. A reading of the transcript of the plaintiff's cross-examination amply bears this out.

8 Apart from the purported back injury in 1985, there was evidence that the plaintiff had a motor cycle accident in 1986 in which he injured his right foot, but not his back, and that in 1991 he fell twenty feet or so from a balcony, landed on his back, and suffered what the plaintiff described as muscle damage and overnight pain and weakness in his legs: he denied any more significant back pain. There was no other evidence to support a back injury or back pain from the fall from the balcony. 9 In the absence of an employment or earnings history, the plaintiff's case for economic loss was presented on the basis of male average weekly wages in the work force in New South Wales, less tax, and for the future with a deduction of 15 per cent for vicissitudes. The amounts for which the plaintiff contended were past economic loss of $39,000 and future economic loss of $343,931. This assumed that before the injury in question the plaintiff had an earning capacity appropriately measured by the male average weekly earnings and that the back injury suffered on 4 November 1994 deprived him of that earning capacity.

10 Medical reports were tendered. None of the doctors gave oral evidence, and his Honour was left to evaluate the different medical opinions and the information revealed by a CT scan and an MRI study.

11 The plaintiff tendered reports from a number of doctors. One was from Dr Linda Calabresi, the plaintiff's GP from 1992. Another was from Dr David Outridge, the plaintiff's GP from March 1997. There were four reports from Dr Abe Isaacs, the plaintiff's treating orthopaedic surgeon to whom he was referred by Dr Calabresi in October 1995. Dr Isaacs saw the plaintiff in that month and again in December 1995, January 1996, and July 1996. There was also a July 1995 referral with a brief assessment of the plaintiff's injury from Dr Dobler, whose role in the plaintiff's treatment was unclear. As well, the plaintiff tendered a report from the Hunter Rehabilitation Service and a report of a CT scan taken on 15 December 1994.

12 The reports of Dr Isaacs should be particularly noted. The CT scan showed a large central disc bulge or protrusion at the L5-S1 level with probable compression of the left L5 and S1 nerve roots. His immediate opinion, with the benefit of the CT scan, was that in moving the pallets the plaintiff had ruptured the L5-S1 disc with left-sided sciatic nerve root irritation. For his last report in November 1996 Dr Isaacs had the benefit of an MRI study. It showed disc dessication at the L4-5 and L5-S1 levels with a broad based disc bulge without thecal impression or nerve root impingement. Dr Isaacs did not withdraw his immediate opinion, saying only that in view of the MRI study he advised further conservative treatment. He said that the plaintiff's injuries were consistent with the history given, and gave percentage estimates of permanent impairment of the back and loss of use of the left leg. He said that the plaintiff could not return to work involving heavy lifting, constant bending, sitting, or standing in one position for a long period, and that his chances of obtaining any gainful employment appeared quite remote.

13 The defendant tendered a report of Dr Chris Harrington, who examined the plaintiff in February 1997 for the purposes of the proceedings, and the report of the MRI study taken on 19 June 1996, together with miscellaneous clinical records of the Corrections Health Service for the periods during which the plaintiff was in custody.

14 His Honour expressed a preference for the report of Dr Harrington. It is necessary to see in more detail what Dr Harrington said.

15 The history recorded by Dr Harrington included - "As you know he was a guest of Her Majesty in Cessnock Corrective Centre and he said that he had to move steel pallets and these, according to him weighed about 80 to 100 kilos, and he hurt his back. There was no injury in the sense that it just occurred whilst moving these pallets on the 4.11.94. I asked him whether he had any past history and he said there wasn't but I noted that there was a letter from Dr Chapman dated 1987 which mentioned that he had a back problem but according to him (and he was very vague about this) this was whilst working with the railway and he said that he only said that he had back problems so that he could stay with his wife and children. He was in a gang which moved around the state and they were going to Cobar. He said that as far as he could remember nothing occurred and he never had an x-ray or anything like that." "This recorded history said nothing about the fall from the balcony. The letter from Dr Chapman as concerned with the plaintiff's complaint of back discomfort from the purported injury when working with the State Rail Authority, and Dr Chapman could "find nothing to suggest that he is not fit for work". 16 After a little more history, including that the plaintiff had had a CT scan and an MRI study, Dr Harrington's report continued -

"Examination: On examination there isn't much spare skin that doesn't have some work of art, tattooed into it. He stands with a straight spine and level pelvis. Normal lordosis, no spasm and no tenderness. He can flex to below his knees, extension is full and lateral bending is slightly restricted. He can walk on his heels, walk on his toes. His knee reflex is very brisk and symmetrical. His ankle jerk is not as brisk but symmetrical. His toes are down going. He has altered sensation to pin prick to the whole of his left leg in dermagraphical pattern. His peripheral pulses are present. Straight leg raising is inconsistent between sitting and lying. His MRI shows degenerative disc at 4/5 and 5/1. There may be a small protrusion at 5/1 on the MRI sagittal cuts, but it doesn't seem to be involving any nerve roots and this is borne out by the physical examination. I don't think surgery has any part to play with this man's injury. Comment: It is hard to get a straight story about whether there were some problems in the 1980's and this may be worthwhile checking in his past notes. He is obviously dependent upon the system and probably knows more than anyone the ins and outs of it. I couldn't really explain the ongoing difficulty he purports, on spinal pathology and I think it may be his experience over the last 10/15 years that have lead [sic] him to this way of behaving and believing that he is disabled. Considering his MRI and Scan he is obviously going to remain on the pension, although I think he would be fit for the type of work he is used to. Opinion: I don't think he has any percentage disability from the episode he describes in 1994." 17 As I have said, his Honour expressed a preference for the report of Dr Harrington, on which he relied in his "finding about economic loss, and about the injuries to the plaintiff".

18 His Honour summarised aspects of the reports of Drs Outridge, Dobler and Isaacs. Again with particular reference to the reports of Dr Isaacs, he said "He does not seem to come to any particular conclusion on the way I read his reports, that make [sic] it entirely clear what the cause of the plaintiff's injuries are [sic]". His Honour then said - "In my view, the report that I am best able to accept is that of Dr Chris Harrington, exhibit 1. I note that the consultation was on 27 February 1997 and his report is 4 March 1997, but to my mind this gives the doctor the best chance of reviewing all the scans and reports, particularly the one in June 1996. He was able to concentrate on the 1987 injury to the back of the plaintiff, and I note again, that the plaintiff made it clear that he fell from a substantial height on a verandah on to his back and had low back pain after that. He noted that the plaintiff had had a CT scan and an MRI scan, and that he had been on, to use the doctor's phrase, 'a cocktail of analgesics, Panadeine Forte 6 per day, Valium and Mersyndol at night'. He commented at the bottom of page 2, after noting that the MRI showed degenerative disc at 4/5 and 5.1 and the possibility of a small protrusion at 5.1 on the MRI sacatel (?) cuts, that he 'couldn't really explain the ongoing difficulty he purports, on spinal pathology, and I think it may be his experience over the last 10 to 15 years, that have led him to this way of behaving and believing that he is disabled'. Dr Harrington's opinion was, 'I don't think he has any disability in the episode he describes in 1994'. I prefer that medical opinion, to the other medical opinions. I also emphasise that the evidence of the plaintiff given before me was unacceptable to me. The plaintiff exaggerated and was willing, when faced with matters that were not to his liking, to prevaricate and decline to be frank with the Court. He course, in my view, is experienced in dealing with authorities to convince them, but to my mind, it was quite clear that his motive in bringing this claim was to claim compensation. He was not a witness whose evidence regarding his difficulties I could accept, and having regard to the report upon which I rely, I am fortified in my finding about economic loss, and about the injuries to the plaintiff." The errors in the reproduction of the language of the report are in the original judgment, no doubt in faulty transcription from the record of his Honour's oral judgment. 19 The conclusions as to the injuries to the plaintiff and economic loss were then expressed by his Honour - "I am required to make an order for general damages and deal with the matters of economic loss. In determining the extent to which the incident on 4 November 1994 caused injury, I am satisfied that I cannot accept the evidence of the plaintiff as to his continual difficulties. It is clear to me that whilst he was unable to perform his duties in the workshop as before, until January 1995, he clearly was thereafter able to attend to his work, and he did so. The evidence on the medical side before me, reveals quite clearly that he finished his term then, and there is no corroborative evidence that he has been in any way disabled since he has come out of prison. He, on his own admission, has made false statements, in order to gain from a Workers Compensation application, which is before the Court, and I have noted exhibits 5A to D, regarding the Corrections Health Service material that was available. I note too, the 1991 fall from the balcony is a contributing factor, and I note the plaintiff's addiction to alcohol and his use of analgesics over a long period. Again, doing the best I can, it seems to me that he did have an incident on 4 November 1995, from which he suffered injury. On my findings, he recovered from that within a short period, certainly by January 1995, and he was able to resume from this, any activities he might have been able to [do] before. His earning capacity to my mind, is nil. He is a person who is on a pension and likely to remain so. In my view, there is no prospect that he could have run a business at all, and certainly not one involving the skills of a tattooist. I do not accept that he could only work for 15 minutes without suffering pain. Clearly on what he had said earlier to Dr Isaacs, he could work for up to two hours, before suffering any inconvenience." 20 As I read his Honour's reasons, there were two grounds for declining to award any damages for economic loss. One was that the plaintiff had recovered from the effects of the injury suffered on 4 November 1994 by January 1995, and had no loss of earning capacity thereafter. (That would have left a short period of economic loss, but while in the Centre, probably of no magnitude, and it seems not claimed.) The other was that any lost earning capacity was of no value, and so would not bring an award of damages for economic loss, because the plaintiff would never exercise the earning capacity.

21 The first ground must have been founded on his Honour's preference for the report of Dr Harrington, and on a finding that the plaintiff had recovered from the injury suffered by January 1995. His Honour accepted that there was an injury suffered on 4 November 1995, and hence the general damages of $10,000 and the out-of-pocket expenses (although it seems that the out-of-pocket expenses were in part or in whole for the period after January 1995 - a possible inconsistency which it is unnecessary to follow up). The conclusions so far as resting on these elements of the first ground were in my opinion so flawed that they can not be accepted.

22 The preference for the report of Dr Harrington was not in fact supported by his Honour's apparent explanation for its acceptance. His Honour first said that Dr Harrington had "the best chance of reviewing all the scans and reports, particularly the one in June 1996". Dr Isaacs had also reviewed both the CT scan and the MRI study, and had expressed the opinions I have earlier described. His Honour then said that Dr Harrington was "able to concentrate on the 1987 injury to the back of the plaintiff". His Honour may have had in mind the 1985 purported injury, being the injury as to which Dr Harrington knew from Dr Chapman's letter that Dr Chapman found no disability and knew from the plaintiff's own mouth that the purported injury was falsely claimed. If, because of the immediately following reference to the fall from the balcony, his Honour had in mind that fall (which he said resulted in low back pain "after that"), Dr Harrington knew nothing of the fall. How concentration on the so-called 1987 injury made Dr Harrington's opinion more acceptable is unclear, and it certainly did not provide a reason other than the injury in 1994 for any disability suffered by the plaintiff. And to say that the plaintiff had low back pain after the fall from the balcony was not accurate - the evidence was limited to overnight pain and weakness in the legs.

23 Nor was the preference for the report of Dr Harrington supported by his Honour's apparent comparison with the acceptability of Dr Isaacs' reports. Dr Isaacs had not failed to come to a conclusion as to the "cause of the plaintiff's injuries". He had said quite clearly that there was ongoing incapacity and that it was consistent with, indeed from his immediate opinion caused by, injury when moving the pallets on 4 November 1994. As the treating specialist, Dr Isaacs' opinions were entitled to due consideration, and where Dr Harrington's report was rather obscurely worded it was, in the absence of amplification, not readily to be accepted in preference to the clear opinions of Dr Isaacs. Dr Harrington acknowledged the difficulty in getting "a straight story about whether there was some problems in the 1980's". While he said that he could not explain the plaintiff's reported difficulties "on spinal pathology", he seemed to accept that the CT scan and the MRI study demonstrated spinal deficiencies sufficient to warrant the plaintiff remaining on the pension , and it is not easy to know what Dr Harrington had in mind when he referred to fitness for "the type of work he is used to". How Dr Harrington came to the conclusion of no "percentage disability from the episode he describes in 1994" is not obvious, when he seemed to accept pension status.

24 The defendant submitted that Dr Harrington really meant that the plaintiff had no pathology or investigative signs consistent with continued incapacity from the injury in question, with experience of "the system" would be able to justify pension status based on the CT scan and MRI study, but was really fit for work. It was said that his Honour must have accepted that opinion, particularly when his Honour had come to an unfavourable view of the plaintiff's veracity. But the matters to which I have referred seem to me to reveal such error in the way his Honour came to prefer the report of Dr Harrington that I do not think the preference can stand.

25 To this must be added difficulty in supporting his Honour's finding of recovery from the injury suffered on 4 November 1994 by January 1995, and ability to resume "any activities he might have been able to [do] before". The plaintiff's evidence was that he returned to light duties in the metal shop after the injury, that he had to stop work shortly before Christmas 1994, and that a little later he returned to the metal shop as a welder's assistant "just passing the ruler, the pencil, taking measurements". He said that he thereafter did light duties such as sweeping out the shop until he completed his sentence in August 1995. How then did his Honour find that the plaintiff had recovered from his injury by January 1995?

26 Such a finding could not stand with the opinions of Dr Isaacs held in 1995 and 1996. Nor could it readily stand with the contents of the report from the Hunter Rehabilitation Centre, even accepting that to some extent Dr Isaacs and the rehabilitation staff were dependent on the plaintiff's statements of his symptoms. The defendant could not refer to evidence justifying January 1995 as the latest time of recovery from an injury which his Honour found to have occurred (and to warrant general damages of $10,000), and suggested that his Honour may have thought that the injury was a soft tissue injury only which would in the normal course have cleared up by that time. His Honour did not say so. If, as his Honour accepted, an injury was suffered in November 1994, no evidence explained why it would have abated by January 1995 to the extent that the plaintiff could carry out his pre-injury activities.

27 When regard is had to all these matters, in my view his Honour's apparent conclusion that the plaintiff did not suffer a loss of earning capacity, or at least a loss other than for a short period to January 1995 during which he was in the Centre, was not reasonably open. It was founded on an erroneous evaluation of the medical evidence and of the other evidence going to the effect of the injury suffered by the plaintiff on his ability to work thereafter.

28 On one view, this would not matter if his Honour were correct in the second ground described above, that any lost earning capacity of the plaintiff was of no value because it would not have been and would not be exercised.

29 His Honour's reasons at this point are unclear. The plaintiff had given evidence that he had spent many years learning about tattooing, drawing and artwork, and had worked for nothing in a couple of tattooing shops. He had said that he had wanted to set up his own tattooing shop after his release from the Centre, but that when he tried tattooing after his release he could only work for 15 minutes before he suffered pain. His Honour rejected such a limited ability to work, and appears to have thought that the plaintiff's unwillingness to acknowledge a greater ability to work as a tattooist demonstrated his unwillingness to work at all. His Honour may well have taken account more generally of the plaintiff's alcoholism, drug dependence, and lack of gainful employment over many years as explaining and demonstrating the same unwillingness to work at all.

30 The question, however, was not whether the plaintiff's earning capacity was nil. If the plaintiff had suffered a loss of earning capacity, the question was what were the damages which flowed for the past and the future. He had worked for a time as a labourer with the State Rail Authority, and although he had not been in employment since 1985 he had had an earning capacity which he could have exercised. Any loss of the earning capacity called for an award of damages to reflect the extent to which the loss had been or would be productive of financial loss: Graham v Baker (1961) 106 CLR 340 at 347; Medlin v State Government Insurance Office (1995) 182 CLR 1 at 18-19. The evidence was inadequate to exclude some financial loss, even if on the normal method of assessment an award for future economic loss would be heavily discounted to reflect the plaintiff's unwillingness to exercise his earning capacity.

31 This may be looked at in a different way. Just as an award on the basis of continued exercise of earning capacity is discounted for vicissitudes whereby the capacity will not be exercised, so denial of an award on the basis that earning capacity will not be exercised should allow for what might be called reverse vicissitudes whereby the capacity will be exercised. A nil award for the future for the plaintiff aged 33 was in my view not open to his Honour.

32 It follows that the plaintiff is entitled to reassessment of his damages. The plaintiff accepted that this Court was not in a position to make a reassessment. So in the end did the defendant. The extent of the plaintiff's loss of earning capacity depends amongst other things on the view taken of his evidence of the effect of the injury upon him, which must of course be considered in conjunction with the medical reports, and of his willingness to work. His Honour's adverse view of the plaintiff's evidence can not be translated to a blanket rejection of any worth in what he said. We have not seen the plaintiff giving his evidence.

33 In my opinion there must be a new trial limited to damages. What I have said in these reasons does not, of course, bind the judge undertaking the new trial to conclude that the plaintiff has suffered loss of earning capacity - it will depend on the evidence before the judge. While the difficulties in proceeding other than on tendered medical reports, without oral evidence from the doctors, must be appreciated - particularly when the trial is at a country centre - it is to be hoped that the judge will have greater assistance in evaluating conflicting medical reports than did his Honour.

34 I propose that the appeal be allowed with costs, that the judgment for $12,353 be set aside, and that there be a new trial limited to damages.

35 ROLFE AJA: I agree with the orders proposed by Giles JA and his reasons therefore.

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