BHP Steel v Oliver

[2002] NSWCA 76

CITATION:	BHP Steel v Oliver [2002] NSWCA 76
FILE NUMBER(S):	CA 40320 of 2001
HEARING DATE(S):	15/03/02
JUDGMENT DATE:	3 April 2002
PARTIES :	BHP Steel (AIS) Pty Limited v Kim John Oliver
JUDGMENT OF:	Meagher JA at 1; Giles JA at 12; Ipp AJA at 31

LOWER COURT JURISDICTION :	Compensation Court
LOWER COURT FILE NUMBER(S) :	40228 of 1999
LOWER COURT JUDICIAL OFFICER :	Bishop J

COUNSEL:	A: Mr J Hislop QC with Mr G Levick R: Mr J Little SC with Mr B Ingram
SOLICITORS:	A: Sparke Helmore R: Maguire & McInerney
CATCHWORDS:	Section 11 of the Workers' Compensation Act 1926 - whether respondent was capable of earning his full pre-injury wage and therefore no award should have been made - whether award calculated by trial judge could be justified - appeal dismissed with costs.
LEGISLATION CITED:	Workers' Compensation Act 1926 Workers' Compensation Act 1987 Coal Mines Regulation Act 1982 Compensation Court Act 1984
CASES CITED:	Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR 20 Ward v Corrimal-Balgownie Collieries Ltd (1938) 61 CLR 120 Australian Iron & Steel Pty Ltd v Elliott (1967) 67 SR (NSW) 87 Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412 Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25 Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530
DECISION:	Appeal dismissed with costs.

CA 40320 of 2001

MEAGHER JA
GILES JA
IPP AJA

Wednesday, 3 April 2002

BHP STEEL (AIS) PTY LTD v KIM JOHN OLIVER

FACTS

The respondent, Mr Oliver, was awarded workers compensation by the primary judge in relation to a back injury, which he suffered whilst in the employ of the appellant, BHP Steel. His psychological claim however, was found on the evidence not to be work-related. At trial, the primary judge calculated an award according to the three steps enquiry required under section 11(1) of the Workers’ Compensation Act 1926. On appeal, it was contended that the primary judge erred in law because it was not open to his Honour to find that the worker had suffered any economic loss as a result of his back injuries.

HELD

Per Meagher JA (Ipp JA agreeing)

(i) The test for “economic loss” should not be construed narrowly. Because there is no immediate loss in the respondent’s former sphere of employment, does not mean that there is no economic loss; Ward v Corrimal-Balgownie Collieries Ltd (1938) 61 CLR 120 Per Latham CJ at 130-131.

(ii) The primary judge correctly calculated the economic loss suffered by the worker from his partial disability on the open labour market. That some supervening, non work-related disability intervened to aggravate that disability is not to the point; Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR 20 Per Jordon CJ at 25.

Per Giles JA (Ipp JA agreeing)

(i) It does not matter that the worker left the employer’s employment because of his psychological condition, provided that in the assessment of compensation only the incapacity caused by the back injuries is taken into account. If on leaving the employer’s employment the worker suffered economic loss according to the three steps enquiry required under section 11(1) of the Workers’ Compensation Act 1926, he was entitled to compensation; Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 at 539-41; Novello v Zinc Corporation Ltd(1988) 14 NSWLR 25 at 35-36.

ORDERS

Appeal dismissed with costs.

CA 40320 of 2001

MEAGHER JA
GILES JA
IPP AJA

Wednesday, 3 April 2002

BHP STEEL (AIS) PTY LTD v KIM JOHN OLIVER

Judgment

1 MEAGHER JA: This is an appeal in a Workers’ Compensation case decided by Bishop J. The worker, Mr Oliver, had worked for the appellant employee for some time, when in April 1998 he suffered a discrete back injury, and in October 1998 a psychological injury. His Honour heard both cases as one. At the time of the former, his occupation at the appellant’s workplace was driving a dolly car.

2 As far as the back claim was concerned, Bishop J held that the alleged incident did occur, it emanated to an “injury” within the meaning of the Act, and resulted in a partial disability, having a 20% impairment in his back. However, his Honour held that the injury did not prevent him from continuing his job of driving a dolly car.

3 As far as the psychological claim was concerned, his Honour held that a psychological problem did exist, so that the prospect of going down a mine terrified the worker, but that, on the evidence, this problem was not work-related.

4 In September 1999 he could not stand it any longer and took voluntary retirement. He and his wife then purchased a newsagency, and have together operated it ever since. His contribution to this joint enterprise has increased over the years.

5 The relevant statutory provision governing his entitlement to compensation is s11(1) of the now repealed Act. That said:

11. (1) (a) In the case of partial incapacity, the weekly payment shall in no case exceed the difference between the weekly amount which the worker would probably have been earning as a worker but for the injury and had he continued to be employed in the same or some comparable employment, and the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury, but shall bear such relation to the amount of that difference as under the circumstances of the case may appear proper.

6 His Honour, having decided that the worker had been partially incapacitated by a work-related injury since 14 April 1999, proceeded to calculate an award by deducting, from the wages he would have received if he had remained a dolly driver, the amount he earned in his newsagency business, and then choosing an appropriate figure within that range.

7 His employer submits that, as a matter of law, on his Honour’s findings of fact this approach cannot be justified. He is entitled, so it was alleged, to no more than the economic loss he suffered within the industry. Before the accident, he was earning $1,150.00 for driving his dolly car, after the accident he could still have earned $1,150.00 driving his dolly car; therefore, his economic loss was nil. Sir Frederick Jordan’s judgment in Aitkin v Goodyear Tyre & Rubber Co (Aust.) Ltd (1945) 46 SR 20 was prayed in aid, and, in particular, the sentence “notwithstanding, his partial incapacity, he [scil. the worker] would have been capable of earning his full pre-injury wage, no award of compensation can be made.” There is, as I have said, no doubt that his Honour found that notwithstanding his back injury he was still capable of driving his dolly car, and there is no doubt that that job was available for him.

8 However, this is to view the test of “economic loss” in far too narrow a fashion. The worker suffered a back injury resulting in incapacity. That incapacity is very real, and will continue for the rest of his life. He carries it around with him. He must suffer some economic loss from it, unless he belongs to the comparatively rare class of persons who do not need to use their backs in order to obtain useful employment. Because there is no immediate economic loss in his former sphere of employment does not mean there is no economic loss. As Latham CJ put it in Ward v Corrimal-Balgownie Collieries Ltd (1938) 61 CLR 120 at 130-131:

“A partial incapacity which, in the sense stated, results from an injury may itself, without the intervention of any new cause, result in total incapacity; for example, a man whose eye is injured may be only partially incapacitated for a time, but the injury may, without any new cause operating, so develop as to produce complete blindness in both eyes. In such a case first the partial incapacity, and next the total incapacity, would have resulted from the injury. The position is the same if the injury aggravates an already existing disease so as to bring about incapacity partial or total.
In other cases there may already be partial incapacity resulting from an injury, and other causes, quite independent of and not associated with the injury in any way, may afterwards bring about further or total incapacity. In such a case the worker is still entitled to compensation, but it is only the incapacity which is the result of the injury (and not the added incapacity which is the result of other causes) for which there is any liability under the Act. Thus if a man was suffering from an injury consisting in lung disease which produced partial incapacity he would be entitled to compensation in respect of that incapacity. If he subsequently became subject to a form of heart disease which was quite unconnected with his lung disease and by reason thereof became totally incapacitated, he would still be entitled under the Act to payment in respect of the partial incapacity which resulted from the injury, but only to payment for partial incapacity (Harwood v Wyken Colliery Co. (1); Stowell v Ellerman Lines Ltd.). in respect of that incapacity. If he subsequently became subject to a form of heart disease which was quite unconnected with his lung disease and by reason thereof became totally incapacitated, he would still be entitled under the Act to payment in respect of the partial incapacity which resulted from the injury, but only to payment for partial incapacity (Harwood v Wyken Colliery Co.; Stowell v Ellerman Lines Ltd.).

9 In the present case, therefore, his Honour endeavoured (and, to my mind, with complete success) to calculate what economic loss was suffered by the worker from his partial disability on the open labour market. That some supervening, non work-related, disability intervened to aggravate that disability is not to the point.

10 This analysis is actually supported by what Jordan CJ himself says in Aitkin’s case at 25:

“If, however, he becomes incapacitated by some non-employment injury or disease from earning anything, it becomes necessary to determine how much compensation he is entitled to receive in respect of so much of his incapacity as is referable to his employment injury.”

11 In my opinion, the appeal should be dismissed with costs.

12 GILES JA: The respondent (“the worker”) obtained the Higher School Certificate and began an apprenticeship as a fitter and turner, but did not complete the apprenticeship because “I wasn’t very academic and I didn’t go really good at the TAFE course that you had to do”. He worked as a labourer for the Water Board for eight to ten years. In 1979 he began his employment with the appellant (“the employer”).

13 For the first ten years or so of his employment the worker was “at the coal face” at the appellant’s Westcliff Colliery. At some time between 1982 and 1984 he injured his back and was off work for about three months. Eventually his seniority enabled him to work driving vehicles transporting workers and supplies in and out of the mine; the vehicles were known as dolly cars. The work included loading and unloading some of the supplies.

14 On 13 March 1997 the worker injured his back lifting a bag of cement onto a dolly car. He was off work for about a week, and on lighter duties for a further six weeks or so before going back to driving a dolly car. On 17 April 1998 he again injured his back loading equipment required for a longwall changeover. He was an in-patient in a hospital for over two weeks, and was off work for a further six or eight weeks. On resuming work he was on light duties on the surface. In about August 1998 he returned to his normal duties driving a dolly car, although he was still having problems with his back.

15 Starting at the end of October 1998, the worker began to have what for present purposes may sufficiently be described as panic attacks. On 13 April 1999 he had a panic attack while the dolly car was down the mine. He was put off work, and returned on a rehabilitation programme on the surface in June 1999. A trial return underground was not successful. For a short time the worker carried out surface duties only, and then he was sent home until he was fit to resume work underground on a full time basis.

16 In September 1999 the worker decided that he could not go back to underground work because he was getting claustrophobic problems even travelling in lifts. On 17 September 1999 he took voluntary retirement. In early 2000 he and his wife bought a newsagency.

17 The worker applied for awards of workers compensation benefits by reason of back injuries and psychological injury. It was not in dispute that the back injuries were work related. Bishop CCJ found that the worker had suffered a disc lesion in his lumbar spine and could not carry out the unrestricted duties of an underground miner, and that he had a 20 per cent impairment of the back. The worker had agreed in his evidence that he could have continued to do his job driving the dolly car, and his Honour appears to have found that, apart from the psychological injury, he was fit for that job. His Honour found that the worker had a psychological condition, but that it was not work related.

18 The worker’s claim to weekly payments fell to be determined under s 11 of the Workers’ Compensation Act 1926, by the savings provisions of the Workers Compensation Act 1987 applicable to an employed worker in or about a mine to which the Coal Mines Regulation Act 1982 applies notwithstanding the repeal of the former Act. It provided -

"(1)(a) In the case of partial incapacity, the weekly payment shall in no case exceed the difference between the weekly amount which the worker would probably have been earning as a worker but for the injury and had he continued to be employed in the same or some comparable employment, and the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury, but shall bear such relation to the amount of that difference as under the circumstances of the case may appear proper.
(2) An employer shall provide suitable employment for his injured worker during the worker's partial incapacity for work but, if the employer fails to do so, the worker shall be compensated as if his incapacity for work were total, unless—

(a) where the employer is an employer referred to in section 18C(2) — the Registrar;

(b) where the compensation is payable under Part IIA — the Registrar; or

(c) in any other case — the insurer,
provides, or arranges for, such suitable employment having regard to the worker's incapacity and place of abode."

19 Bishop CCJ said -

“In view of the findings set out earlier with regard to the appellant’s back claim he is clearly entitled to an award.
With regard to earning matters the wages schedule, Exhibit N, reveals comparable earning figures at all relevant times at the rate of $1,150. Two figures were put forward with regard to the ability to earn. One was the figure of $443.80 representing the award rate for a shop assistant, 21 years and over. The second was $482.90 representing the rate for a shop assistant in charge of a shop with the duty of buying.
The evidence with regard to the financial aspect of the current newsagency business is owing to the nature of the business and its relevant newness not of a great deal of assistance. At this point there is no clear picture emerging from the figures as to what is the real earning rate from the applicant’s point of view. It follows that in this instance at this point in time there is little option to look at the evaluation of the worth of the applicant’s duties to the business. As to this a strong argument was put forward on behalf of the respondent that in recent times the applicant is working up to 60 hours per week in the business and by applying the normal casual rates for a shop assistant this would result in a potential earning figure virtually up to the comparable earning rate.
Doing the best one can with the evidence the view to which I have come is as follows. I think with regard to the initial period of the applicant’s activities in the shop before the improvement in his psychological condition his ability to earn ought to be taken at the lower of the award rates shown in Exhibit N, namely $443.80. Following the period of his improvement in September 2000 I propose taking the higher of the figures in the wages schedule but adjusted upwards to $600 to take into account the extra hours being worked. I think that the applicant’s fairly recent improvement from his psychological condition combined with the fact that the business has not been going for a very long period of time would indicate that it is premature to go above that figure at the present time. This however a position which may alter as time goes by.
It follows that the differentials from the point of view of the exercise which must be undertaken are from 14 April 1999 to 31 August 2000 $706.20 per week and thereafter $550.
I come now to the question of discretion which is very significant in this case. There is no doubt that until the improvement started in the psychological condition this was a factor markedly interfering with the applicant’s ability to earn and on his own case took him out of the mining industry. That warrants a significant exercise of discretion. From September 2000 when an improvement has occurred in the psychological condition the amount of the discretionary reduction must diminish but at the same time the differential between the probable earnings and the ability to earn has also reduced because it is from this date that the higher ability to earn figure is applicable. These discretionary adjustments are reflected in the award which I will now set out.”

20 His Honour set out his award, so far as presently relevant being -

“1. The applicant received injuries to his back in the course of his employment in approximately 1982 and on 13 March 1997 and 14 April 1998.

2. The applicant has been partially incapacitated thereby since 14 April 1999.

3. I make an award in his favour under the former s 11(1) at the rate of $175 per week from 14 April 1999 to 31 August 2000 and at the rate of $165 per week from 1 September 2000 to date and continuing.

… “

21 The employer appealed. It was common ground that the employer was confined by s 32 of the Compensation Court Act 1984 to an appeal in point of law.

22 Although it was put in various ways, the employer’s essential submission was that Bishop CCJ had erred in law because, the worker being able to drive the dolly car, it was not open to his Honour to find that the worker had suffered any economic loss as a result of the back injuries. It was said that his Honour had not asked himself whether the worker had suffered economic loss as a result of the back injuries, as he should have done conformably with Australian Iron and Steel Pty Ltd v Elliott (1967) 67 SR (NSW) 87 at 93-4 and Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 at 178, and that if he had done so he would inevitably have answered in the negative: rather, it was said, the worker’s economic loss was suffered as a result of his non-compensable psychological condition. And it was said that his Honour had failed to give adequate reasons for awarding weekly compensation when the worker could have continued to work driving the dolly car but for the psychological condition.

23 The employer’s essential submission was founded on a passage in the judgment of Jordan CJ in Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1946) 46 SR (NSW) 20 at 25 -

“Hence, where a worker, who has been partially incapacitated for work by an employment injury, is fortunate enough, in spite of this, to earn for a time his pre-injury wage, and, whilst this state of things exists, becomes totally incapacitated for work by a non-employment injury, he is entitled to workers’ compensation for such loss of capacity for work as is referable to his employment injury. In an application for such compensation, since, ex hypothesi , he is not for the time being earning anything, it is for the Commission to assess compensation on the basis of what he would have been physically capable of earning in some suitable employment, assuming that a job had been available, and that the supervening non-employment injury did not prevent him from taking it. If, notwithstanding his partial incapacity, it is found that he would have been capable of earning his full pre-injury wage, no award of compensation can be made . If it is found that he would not have been capable of earning his full pre-injury wage, he is entitled to an award, and the amount awarded will be large or small according to whether the incapacity referable to the employment injury is substantial or unsubstantial.” (emphasis added)

24 This passage, the employer said, had been taken up in North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412 at 418-9. Relying on the sentence emphasised in the passage, the employer said that the worker was capable of earning his full pre-injury wage because he could work driving the dolly car, and so no award of compensation could be made.

25 What Jordan CJ said in Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltdmust be seen in context. The worker in that case had been partially incapacitated by an employment injury, and had thereafter become totally incapacitated by a non-employment injury. The question was how his compensation should be assessed. In the paragraphs preceding the passage set out above his Honour said that a partially incapacitated worker who nonetheless received full pre-injury wages received no compensation: he may receive full pre-injury wages because of an abnormal demand for workers or a philanthropic employer. But, his Honour continued, if that worker became incapacitated by a non-employment injury or disease it was necessary to determine how much compensation he was entitled to received in respect of so much of his incapacity as was referable to his employment injury. The supervening non-employment injury left the diminution in capacity caused by the employment injury still in existence, and only added a further diminution in capacity which was not to be taken into account for the purposes of s 11.

26 In that context, the sentence emphasised in the passage set out above referred to the possibility that the worker was receiving full pre-injury wages, and no more was meant than that so long as the worker was receiving full pre-injury wages compensation could not be paid. Once the worker ceased to receive full pre-injury wages, including because of a supervening non-employment injury, he was entitled to compensation, although the compensation was to be assessed by regard to the diminution in capacity caused by the employment injury and not by regard to any further diminution in capacity caused by the supervening non-employment injury.

27 North Broken Hill Ltd v Tumes does not provide support to the employer’s submission. It was decided on the successor to s 11, s 40 of the Workers Compensation Act 1987. The worker in that case suffered successive employment injuries working for different employers. For some of the time between the injuries he was able to earn what he would have earned but for the first injury, and for some of the time between the injuries he earned less than what he would have earned but for the first injury. He correctly received compensation for the time when he was earning less than what he would have earned but for the first injury. After the second injury the compensation was assessed by regard to the worker’s earnings in a diminished capacity because of both injuries. This was incorrect: in his claim against the first employer regard should have been had only to the diminution in capacity from the injury working for the first employer.

28 Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltdsupports the worker in the present case, rather than the employer. The worker was partially incapacitated by his back injuries, in that while he could drive the dolly car he could not perform the unrestricted duties of an underground miner. While the worker was driving a dolly car and being paid his pre-injury wages he was not suffering any economic loss, and he was not entitled to receive any compensation for the period to April 1999. But he had an impaired earning capacity. Had he been retrenched in April 1999, if because of his back injuries he was unable to earn the same wages in some suitable employment or business he would have suffered economic loss for which compensation would have been payable. Had he voluntarily left the employer’s employment for personal reasons, the position would have been the same (see for example Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25). The employer agreed that these consequences could flow. It does not matter that the worker left the employer’s employment because of his psychological condition, provided that in the assessment of compensation only the incapacity caused by the back injuries is taken into account. If on leaving the employer’s employment the worker suffered economic loss according to the three step enquiry required under s 11(1), see Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 at 539-41 and Novello v Zinc Corporation Ltd at 35-6, he was entitled to compensation.

29 Bishop CCJ did not expound all this. The addresses to his Honour were recorded. A submission to his Honour equivalent to the employer’s essential submission in this Court is far from evident; it may be that with hindsight traces of it can be seen, but if his Honour erred in law the employer’s submissions to him did nothing to save him from error. I do not think, however, that his Honour erred in law. It was open to him to find that the worker suffered economic loss as a result of the back injuries from the time when the worker was put off work prior to taking voluntary retirement. He found partial incapacity from the back injury; he elliptically addressed what the worker would probably be earning as such had the worker not been injured and had he continued in the same or a similar employment, and at greater length addressed what the worker was earning or able to earn in some suitable employment or business after the injury; and he applied his discretion to the difference. If there were error in the result, and I do not suggest that there was, it was not error in point of law. The reasoning was sufficiently evident, and it was certainly not incumbent on his Honour to go through what these reasons have gone through when the employer’s submissions to him were left as they were.

30 In my opinion the appeal should be dismissed with costs.

31 IPP AJA: I agree with Meagher JA and Giles JA.

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