Zhang v Andrew Pine Furniture Pty Ltd [2004] NSWCA 250 | Case summary

Wednesday 21 July 2004 ZHANG v ANDREW PINE FUNITURE PTY LTD Judgment 1 GILES JA: The plaintiff was injured at work on 30 May 2000. He claimed damages from the defendant for negligence as his employer. Liability was admitted. In an assessment of damages under the Workers Compensation Act 1987 as it stood on 30 May 2000 the judge found, in accordance with s 151G of the Act, that the severity of the plaintiff's non-economic loss was 20 per cent of a most extreme case. As a result the plaintiff recovered damages of $23,000 for non-economic loss but, because the effective threshold of a 23.5 per cent severity in s 151H of the Act was not met, was not entitled to damages for economic loss. 2 In this appeal the plaintiff submitted that the judge's reasons were inadequate to explain her finding of 20 per cent severity. As to the obligation to provide reasons, it is sufficient to refer to Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430, in particular the discussion by Meagher JA at 442-4 of the content of an adequate statement of reasons. For the reasons which follow, in my opinion the plaintiff's submission should be upheld and a new trial should be ordered. It is unnecessary to go to the plaintiff's further submission that in any event the finding of 20 per cent severity was manifestly inadequate. 3 The plaintiff was born in China on 6 January 1955. He was schooled to the age of eighteen, then worked on a farm and for a construction company as an electrician. In 1982 he attended Shanghai University studying mathematics, and then returned to work as an electrician. He came to Australia in December 1989 and found work with a furniture making company. In 1995 his family arrived from China. He worked for the furniture making company for about seven years, and after a period of unemployment began work with the defendant, another furniture making company, about a week before the injury. 4 The plaintiff injured his left hand when it came into contact with the unguarded blade of a table saw. The back of the middle finger was severally lacerated, its extensor tendon was severed and a groove was cut in the bone. 5 The plaintiff was taken to hospital, where he came under the care of a hand surgeon, Mr Kalnins. The wound was cleaned and debrided and the extensor tendon was repaired, the plaintiff was discharged the next day. His hand was in a splint and was painful. 6 The splint was removed after about six weeks. The wound had healed satisfactorily and mobilisation began. Full extension of the outer joint was lacking, and there was continued pain on movement. At the beginning of September Mr Kalnins performed an arthrodesis to fix the outer joint by a pin. The pin was removed in mid October and a solid fusion developed. There was now pain and swelling in the inner joint of the finger. Physiotherapy continued. 7 Mr Kalnins examined the plaintiff in February 2001, and found a solid fusion of the outer joint in the middle finger with only slight discomfort but a lot of discomfort around the inner joint. On examination later that year he found some restriction in flexion, although his report made no mention of pain. He examined the plaintiff again at the end of October 2002, and reported - "He had not required any medical treatment for his left hand since I last saw him. However, he still had residual symptoms in his left hand. These consisted of stiffness in the left middle finger and soreness particularly around the proximal interpharangeal joint of that finger. He was unable to fully straighten the proximal interpharangeal joint of the finger, and felt that his left hand was much weaker than previously, and he had difficulty in applying any pressure work with this. Whenever using his left hand he tended to use all the other fingers, leaving the left middle finger free. I re-examined his left wrist and hand, and found full range of movement in the wrist joint in flexion, extension, pronation and supination, as well as radial and uulnr deviation. Sensation was normal in the finger. There was a curved scar which extended from proximal to the proximal interpharangeal joint across the middle phalanx into the terminal phalanx over the dorsum of the finger. This was the original injury, and there was a midline dorsal incision over the distal interpharangeal joint used for arthrodesis of the distal interpharangeal joint. The tip of the left middle finger reached to within two centimetres of the palmar skin. The fused distal interpharangeal joint was solid and pain free. He lacked the last 20° of flexion in the proximal interpharangeal joint, and although there was still tenderness around this joint to palpation the collateral ligaments were stable. I believe Mr Zhang's condition with regard to his left hand is now stable. I believe he is permanently restricted in the amount of manual work that he is able to perform as a result of his injury at work on 30 May 2000. The disability is a result of weakness in his hand generally and limited movements in both the proximal and distal interpharangeal joints of the left middle finger. I believe he would only be capable of relatively light duties using his left hand, but of course has normal right hand function. I believe it is unlikely that he will require any further treatment to his left hand in the future." 8 The plaintiff gave evidence to the effect that he could not apply strength through the finger and that if he used it it became painful. He gave the example of wringing out a towel. The problem as appeared from the medical reports generally was that the outer joint had been fixed at 180 degrees, so that the plaintiff could not make a fist even to the extent to which he was able to bend the finger. The plaintiff said that he had no pain in the outer joint, but that the inner joint hurt when he bent it. If he put it in cold water he got the sensation of being pricked by needles, and if he banged it he got excruciating pain. He said he could not do cleaning work or use tools with his left hand because he did not have full strength in it, and that he could not go back to the cabinet making work he had done for the defendant. He had had some limited work since the injury, but his poor English restricted his opportunities and he had been substantially unemployed. 9 There was other medical evidence as to the plaintiff's hand and his capacity for work. 10 Dr Conrad found weakness in the grip of the left hand, and thought that the plaintiff would find it difficult to do "full on heavy repetitive work" with that hand but could do light factory work or light cleaning work. He assessed 30 per cent permanent loss of efficient use of the left hand. Dr Selby-Brown noted progressive improvement throughout his reports, and in his last report found restriction on using the left hand for "forceful and more powerful heavy activities" and some restriction in its use for finer movements. He assessed a 75 per cent permanent loss of use of the finger and a 10 per cent loss of use of the left hand. Both these doctors provided reports to the plaintiff's solicitors. 11 Dr Stapleton provided reports to the defendant's insurer and solicitors. He found pain on flexing the finger joint and reduced grip in the left hand because the plaintiff kept the finger out of the way, but little loss of flexion except for the fused joint. He considered that the plaintiff could return to work as a cabinet maker and that his capacity to perform duties around the house or in the workplace was greater than the plaintiff was prepared to recognise. He assessed a permanent loss of use of the finger of 36 per cent and of the left hand of 7 per cent. The other end of the spectrum was in the reports of Dr Fulop, again provided to the defendant's solicitors. She noted slightly restricted flexion and pain on forced flexion, thought the plaintiff's account of severe limitation in use was exaggerated and that he could work "in a full time carpentry capacity" and in "any number of manual operations", and assessed a loss of use of the left hand of five per cent. Dr Fulop attributed more than half of this loss of use to what she thought was a pre-existing cause, although that appears to have fallen away and was certainly contrary to all other medical evidence. 12 None of the doctors gave oral evidence in chief or was cross-examined, and the judge had to determine the extent of the plaintiff's disability and its effect on his ability to work by selection from a spectrum in the reports in the light of the plaintiff's own evidence. 13 There was, however, a further dimension to the plaintiff's claim, which was particularised to include consequential psychiatric injury. 14 A report of Dr Robertson provided to the plaintiff's solicitors diagnosed a phobia of power saws and a depressive disorder with associated anxiety. Dr Robertson said also that the plaintiff's mental state at his interview suggested a diagnosis of major depression, although this was not further explained. The basis for his diagnoses were described in his report - "Away from work, he cannot do any heavy housework, and cannot do such things as moving any heavy furniture. He does not appear to have had any particular leisure activities of a physical nature. He said that at the time of the accident, he was keenly aware that he was the only one in his family who could bring in an income. Since then, he has been preoccupied with thoughts of the loss of his plans for his future life, and he said that he feels 'aimless'. He experienced a sleep disturbance, with broken sleep resulting from pain in his finger. This has improved, and he usually sleeps quite well now. He did not ever experience dreams or 'flashbacks' after the accident. He has experienced phobic anxiety in relation to the use of an electric power saw. He has not used one since the accident, and he would not do so. He does not have any phobic anxiety in relation to other power tools. In a more general sense, he has been depressed and anxious. There has been anorexia, with weight loss of 5kg. He lacks energy. He has lost interest in things which he previously enjoyed, eg watching TV and going out and socialising. His libido has dropped. There has been no suicidal ideation. He has had no treatment for his psychiatric conditions." 15 A report of Dr Lee provided to the defendant's solicitors accepted fear of power saws, but disputed that it was a phobia because it was neither unwarranted nor excessive. The doctor said that there was no psychiatric impediment to the plaintiff working. He said that there was no objective evidence of the features described by the plaintiff consistent with major depression, and questioned whether there was exaggeration or other pressures on the plaintiff. This was left rather up in the air, and on these two reports there was again a difference calling for determination by the judge. 16 The plaintiff's own evidence as to the effect of the injury on his emotional state was very limited. It was - "Q. From an emotional point of view how do you feel about what's happened to you? A. I feel so unfortunate this injury to my hand has had impact on my family and on me financially. Q. What about your general happiness in life? A. There's not much happiness." 17 The judge's reasons briefly described the injury and Mr Kalnins' treatment and, subject to what I later say, referred to aspects of the various medical reports. Her Honour noted the need for a severity assessment and the submissions of counsel taking up the plaintiff's work history and the medical opinions. It is not easy to see what in these pages of her Honour's reasons is a recounting of counsel's submissions and what, if anything, is findings by the judge. 18 One matter in particular is that, in going through the medical reports with some interspersed reference to evidence from the plaintiff, her Honour said - "Although he is right handed, Mr Zhang says the general weakness in his left hand and the disability he suffers in the middle finger mean he is unable to take any manual or trade work requiring heavy work. Cleaning work is too heavy as is his former employment in cabinet making. He is unable to use any tools of trade because most of them require two handed operation. He has developed a phobic reaction to saws of the kind that injured his hand (Ex A, Dr Andrew Robertson, psychiatrist, 6/8/02, p 3). These matters are supported in the medical reports." Just what her Honour was saying was supported in the medical reports is not particularly clear, nor is it clear whether in saying that the matters were supported her Honour was accepting them. 19 After this exercise her Honour said this - "The highest this case can be put is that Mr Zhang has suffered an injure which may require amputation of the middle finger of his left hand in the future and which prevents him from engaging in any manual work requiring the use of tools or heavy equipment. This excludes him from his former employment in cabinet making and prevents him from taking other unskilled work, such as cleaning. He is left to find light work which does not require use of his left hand, either for fine or heavy work. Because of his limited language skills, Mr Zhang is unable to look for work in alternative fields such as taxi or courier driving. Mr Zhang has restricted movement in the finger and continuing pain. He was 44 at the time of the accident and is currently nearly 48 years old. He has at least another 17 years to work before retirement." 20 This appears to have been her Honour's summation of the submissions put on behalf of the plaintiff, although that also is not entirely clear. Certainly counsel for the plaintiff in the appeal submitted that that was its position, and counsel for the defendant accepted that that was so. 21 Her Honour's critical finding then came in the following passage in her reasons, which was - "If I were to find that he had suffered a serious injury in the meaning of that term in s 151H I believe Mr Zhang would be entitled to compensation for the reduction in his employment opportunities, however, I am not satisfied that the injury suffered is serious enough to meet the s 151H criterion of 23.5% of a most extreme case. I believe Mr Zhang has suffered an injury in the order of 20% of a most extreme case. I believe this assessment takes into account the shock and pain of the incident and the ensuing treatment. It also reflects the continuing disability Mr Zhang suffers which I define as reducing and interfering with the efficient use of his left hand, but not causing the level of disability he claims. I am satisfied that Mr Zhang has enough use of his left hand to engage in some form of manual work using tools. He is right handed and requires his left hand to assist and guide the use of tools and equipment in his right hand. It may be that he is unable to engage in some of the heavier aspects of some manual work. I believe him when he says he cannot operate some of the jarring and heavier equipment used in cleaning, but there are many other aspects of cleaning and other forms of manual work that I am sure he can do. The disfigurement of his left middle finger is observable but not significant. The restrictions in its movement make the disfigurement more observable, but still not significant." 22 The judge's findings underpinning the 20 per cent severity appear to be those made in this last passage. They were not particularly precise about the effect on the plaintiff's ability to work so far as that bore upon his loss of amenities of life. More importantly, they did not include anything about the unhappiness in life of which the plaintiff gave evidence or the depressive disorder, possibly major depression, of which Dr Robertson spoke and which Dr Lee questioned. The judge may have accepted that the plaintiff had a phobia or a fear of power saws, which would have affected the work available to him, although a finding is not explicit. Whether she accepted a level of depressive disorder, and if so what level, was raised for determination and was significant to the plaintiff's non-economic loss. It was not stated. 23 On one view the judge implicitly found that the plaintiff suffered no or negligible depressive disorder, and for that reason did not refer to it in her findings underpinning the 20 per cent severity. That could have been because the plaintiff gave less than strong evidence of the effect of the injury on his emotional state, although the judge did not refer to that evidence at all. She did not refer to Dr Robertson's opinion concerning a depressive disorder, possibly Major Depression, at all. She did refer to Dr Lee's opinion, relevantly only saying that Dr Lee was ambivalent about the plaintiff's need for psychiatric or psychological treatment and that Dr Lee seemed undecided whether the plaintiff was exaggerating his condition or in need of such treatment. If the judge's reasons were to be understood as making such an implicit finding, they were not satisfactory. 24 But there was more. The passage last set out, ending with the award of damages of $23,000, was in the judge's revised reasons. In the reasons originally published the figure for damages was $48,850 and there was the additional paragraph - "I understand that past out of pocket expenses have been agreed at $9,037. A buffer or cushion amount of $5,000 should be awarded for future out of pocket expenses. In making this award I note that Mr Zhang has received no treatment since July 2001 and, despite comments by Dr Selby-Brown about the possibility of an amputation of the finger, his treating specialist Mr Kalinans sees no current need for future treatment. The award is made, however, to give some regard to the remarks [sic] Drs Robertson and Lee about the possible desirability of some psychiatric or psychological counselling. Schedule of damages Non-economic loss (20% of $224,250) 48,850.00 Past out of pocket expenses 9,037.00 Future out of pocket expenses 5,000.00 Total $62,887.00" 25 The $48,850 was an error, as was the award of past and future out of pocket expenses because they were economic loss. We were informed that the parties approached her Honour after the publication of her reasons, and that her Honour made corrections which included the deletion of the additional paragraph last set out. 26 The plaintiff submitted that the additional paragraph showed that the judge considered that the plaintiff had suffered some psychiatric injury, and that an assessment of the severity of the plaintiff's non-economic loss without taking account of that injury was deficient. There was some debate as to the status of the reasons as originally published. Counsel for the defendant accepted, however, that it was appropriate for us to have regard to them in order properly to understand the judge's reasoning, so it is unnecessary to engage further in that debate. 27 The meaning of the additional paragraph was also debated. On one view, her Honour gave the cushion of $5000 for a range of future out of pocket expenses such as analgesics, medical consultations, a possible amputation and some psychiatric or psychological counselling. However, that is not what is said. The last sentence of the paragraph states fairly explicitly why the award is made, namely "to give some regard to the remarks Drs Robertson and Lee [made] about the possible desirability of some psychiatric or psychological counselling". 28 It is fairly clear where the figure of $5000 came from, as it was common ground that the plaintiff's counsel had provided the judge with a schedule of damages at the trial which included $5000 for future out of pocket expenses. The only evidence of amounts of future out of pocket expenses was that Dr Robertson suggested that $1000 would be appropriate for psychiatric counselling for a year. On the surface, her Honour gave $5000 for counselling, which would indicate not just acceptance of the existence of psychiatric injury requiring counselling but that the psychiatric injury was of some consequence. 29 In the light of this, it is very difficult to say that the judge implicitly found that the plaintiff suffered no or negligible depression. It seems fairly clear that the judge considered that the plaintiff did suffer a psychiatric condition which was likely to require psychiatric or psychological counselling. The problem is we really do not know, nor do we know why her Honour did not otherwise refer to any emotional effect of his injury on the plaintiff, in particular an effect extending to a depressive disorder possibly Major Depression. All of this was important to the assessment of non-economic loss. 30 It is unsatisfactory to find that a judge's reasons are inadequate, when it must be recognised that perfection cannot be achieved and that criticism in hindsight may be unrealistic. However, if one returns to Beale v Government Insurance Office of New South Wales, one matter to which Meagher J refers is that a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached. It is plain that not every factual matter in issue need be dealt with and the facts need not be dealt with in detail, but where there is a factual dispute which is significant and the resolution of the dispute is significant to the decision it must be appropriately dealt with, so that it can be seen why the judge came to the conclusion which the judge expressed. I do not believe that in the present case the judge's reasons meet this requirement. 31 It does not follow that a new trial is required. If on appeal it can be seen that the only conclusion open on the evidence at the trial was the conclusion reached by the trial judge, then notwithstanding an inadequate statement of reasons a new trial will not be ordered: see Beale v Government Insurance Office of New South Wales at 444. 32 I have considered whether in the present case we can, on the materials given at the trial, ourselves make findings upon which we can assess the plaintiff's non-economic loss. If we were able to assess the non-economic loss at some figure less than the 23.5 per cent, then it may be that a new trial could be obviated because there would be no necessity to go further. I do not think that we can do so. In my opinion the assessment of the severity of the plaintiff's non-economic loss is something which takes into account the plaintiff's evidence and the advantage which a trial judge has in seeing and hearing the plaintiff give evidence, and I note in that connection we have no statement by the judge accepting, not accepting or otherwise describing the acceptability of the plaintiff's evidence. 33 Regrettably, I consider that the only orders we can make are that the appeal be upheld, the verdict and judgment and order for costs made below be set aside, and the matter be remitted to the District Court for a new trial as to the assessment of damages. The defendant however is entitled to a certificate under the Suitor's Fund Act if it is otherwise qualified. 34 McCOLL JA: I agree.

Zhang v Andrew Pine Furniture Pty Ltd

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