Giankos v SPC Ardmona Operations Ltd
[2011] VSCA 121
•5 May 2011
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No 3868 of 2009
| PAUL GIANKOS | Appellant |
| v | |
| SPC ARDMONA OPERATIONS LTD (ACN 004 077 105) | Respondent |
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| JUDGES | WARREN CJ, NEAVE JA and HARGRAVE AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 15 March 2011 |
| DATE OF JUDGMENT | 5 May 2011 |
| MEDIUM NEUTRAL CITATION | [2011] VSCA 121 |
| JUDGMENT APPEALED FROM | Giankos v SPC Ardmona Operations Ltd [2009] VCC 819 (Judge K Bourke) |
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ACCIDENT COMPENSATION – Appeal from unsuccessful application to commence proceedings for loss of earning capacity – Accident Compensation Act 1985, ss 134AB(19), (38)(b), (c), (e), (f), (g) – Whether appellant lost 40 per cent or more of earning capacity – Assessment of pre-injury earning capacity – Capacity for suitable employment – Accident Compensation Act 1985, s 5 – No suitable employment existing in area of residence – Appeal allowed.
EVIDENCE – Expert evidence – Evidence of suitability of employment given by medical professionals.
COSTS – Statutory direction as to costs – Accident Compensation Act 1985, s 134AB(27)(a) – Costs of application to be awarded against party against whom decision is made, subject to the ‘rules of the court’ – Leave granted to commence proceedings to recover damages for pain and suffering but not for loss of earning capacity – Judge awarded no costs after date on which Calderbank offer lapsed – Whether judge entitled to take account of Calderbank offer.
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| Appearances: | Counsel | Solicitors |
| For the Appellant | Mr R P Gorton QC with Ms B Y Knoester | Zaparas Lawyers |
| For the Respondent | Mr J Ruskin QC with Mr M F Fleming SC | Thomsons Lawyers |
WARREN CJ
NEAVE JA
HARGRAVE AJA:
On 15 November 2005, the appellant, Mr Paul Giankos, who was employed as a forklift operator by the respondent, SPC Ardmona Operations Ltd (‘SPC’), suffered a full-thickness retracted tear of the supraspinatus tendon (a rotator cuff tendon) in his right shoulder. The injury occurred when he tried to dislodge a pallet laden with boxes of canned fruit which had stuck on the rollers of a machine which shrink‑wrapped pallets. Although the tendon was surgically repaired, it tore again on two subsequent occasions. (We refer to these later injuries below.)
On 6 October 2009, a County Court judge granted the appellant leave to commence proceedings to recover common law damages for pain and suffering. Her Honour held that appellant’s tendon tear amounted to a permanent serious impairment or loss of a bodily function,[1] which had serious pain and suffering consequences under s 134AB(38)(a) and (c) of the Accident Compensation Act 1985 (the ‘Act’), because the ‘impairment to the [appellant’s] right shoulder, when judged against other cases in the range of possible impairments, [could] be fairly described as “at [least] very considerable” and “more than significant” or “marked”‘.[2]
[1]Accident Compensation Act 1985, s 134AB(37)(a) (definition of serious injury).
[2]Giankos v SPC Ardmona Operations Ltd [2009] VCC 819 (‘Reasons’), [164].
The judge dismissed the appellant’s application for leave to commence proceedings to recover damages for loss of earning capacity, on the basis that the loss of earning consequences of the injury were not serious within the definition in the Act.[3] Her Honour also ordered SPC to pay the appellant’s costs up to and including 9 February 2009, but made no order as to costs after that date (the ‘costs order’). The appellant now appeals against the refusal to grant leave to initiate proceedings to recover damages for loss of earning capacity[4] and the costs order.[5]
[3]See ss 134AB(37), (38)(b)((ii), (e), (f) and (g).
[4]Under s 52 of the Act.
[5]County Court Act 1958, s 74.
Background
The appellant commenced employment with SPC as a casual night-shift worker in 2004. In 2005, he worked as a seasonal fork-lift driver and also performed casual sorting work. As we have said, he injured his shoulder while loading pallets onto the shrink wrap machine.
Two days after he felt his shoulder ‘give way’, the appellant attended Dr Barry McGrath at Shepparton Lister House Medical Centre (‘SLHMC’). He saw other doctors at SLHMC and was eventually referred to Mr Richard Horton, an orthopaedic surgeon. The MRI taken on 16 December 2005, which was ordered by Mr Horton, revealed a full-thickness retracted tear of the supraspinatus tendon (a rotator cuff tendon).
On 21 December 2005, Mr Horton carried out a surgical repair and partial acromionectomy of the appellant’s right shoulder. After having physiotherapy in January 2006 and attending two more appointments with Mr Horton, the appellant returned to work on 20 March 2006. His duties required him to identify damaged tins of fruit, place them into a carton and stack them onto a pallet. He again experienced pain in his right shoulder. On 22 March 2006, SPC gave the appellant notice that his employment would be terminated two days later.
On 24 March 2006 (the day his employment with SPC was terminated), he attended SLHMC and was referred for an ultrasound of his right shoulder. Before he had the ultrasound, the appellant had found another job at Surdex Steel Pty Ltd (‘Surdex Steel’) and commenced work on 28 March 2006. The day after beginning work with Surdex Steel, the ultrasound was taken and revealed a recurrent full‑thickness tear of the anterior half of the supraspinatus tendon (the ‘second tear’). He resigned from his new job on that day and has not worked since.
An MRI taken on 13 April 2006 confirmed the results of the ultrasound. On 23 May 2006, the appellant returned to see Mr Horton, who again performed surgery on his right shoulder on 16 August 2006. The appellant had more physiotherapy.
In November 2007, the appellant injured his left shoulder in a motorbike accident. Mr Horton surgically repaired the tendon in the left shoulder on 7 May 2008.
On 1 March 2009, after experiencing further right shoulder pain, the appellant was seen by Dr John Pedrotti at SLHMC. The ultrasound taken two days later revealed a complete tear of the right supraspinatus tendon (the ‘third tear’).
Judge’s findings
Application to commence proceedings to seek damages for lost earning capacity
A court must not grant leave to commence proceedings for common law damages unless it is satisfied that the worker has suffered a ‘serious injury’.[6] Under s 134AB(38)(b)(ii) and (c), the term ‘serious’, with respect to loss of earning capacity, refers to the consequences of an injury which, when judged by comparison with other cases in the range of possible impairments or loss of a bodily function, is ‘fairly described as significant or marked and as being at least very considerable’. In addition, the worker must show that, at the date of the hearing of the application, he or she has suffered a loss of earning capacity of 40 per cent or more and will continue permanently to have a loss of earning capacity which will be productive of financial loss of 40 per cent or more.[7]
[6]Section 134AB(19).
[7]Section 134AB(38)(e).
At the time of the injury, ss 134AB(38)(f) and (g) of the Act provided as follows:
(f)for the purposes of paragraph (e)(i), a worker’s loss of earning capacity is to be measured by comparing the worker’s gross income from personal exertion (expressed at an annual rate) which the worker is earning or is capable of earning in suitable employment as at that date with the gross income (expressed at an annual rate) that the worker was earning or was capable of earning from personal exertion or would have earned or would have been capable of earning from personal exertion during that part of the period within 3 years before and 3 years after the injury as most fairly reflects the worker’s earning capacity had the injury not occurred;
(g) a worker does not establish the loss of earning capacity required by paragraph (b) where the worker has, or would have after rehabilitation or retraining, and taking into account the worker’s capacity for suitable employment after the injury and, where applicable, the reasonableness of the worker’s attempts to participate in rehabilitation or retraining, a capacity for any employment including alternative employment or further or additional employment which, if exercised, would result in the worker earning more than 60 per centum of gross income from personal exertion as determined in accordance with paragraph (f) had the injury not occurred;
Her Honour refused to grant leave to commence proceedings to recover damages for loss of earning capacity because she was not satisfied that, at the date of the hearing of the application,[8] the appellant had a loss of earning capacity of 40 per cent or more.
[8]Section 134AB(38)(j).
In relation to the appellant’s pre-injury earning capacity, the judge said that:
In 2005, the plaintiff was earning about $700 net per week. He confirmed the contents of his claim form, that he sometimes did overtime of eight hours a week at $22 per hour, which resulted in total gross weekly earnings in excess of $1,000. He listed the total number of hours worked per week at thirty eight to forty six at an ordinary hourly rate of $19.98. He noted pre injury average ordinary weekly gross earnings at the time of injury of $1,026.00 and overtime for eight hours totalling $266.00 per week.
In cross examination, the plaintiff was not sure as to the amount of overtime he worked. At the time of his injury he was earning $700 clear with weekend work for one or two days, or one and a half days, depending on work availability.[9]
[9]Reasons, [15]-[16].
Her Honour referred to evidence that a comparable SPC employee was earning $1,200 per week in the three to four weeks before the accident, but noted that ‘the comparable employee relied upon earned amounts more consistently in the upper range of $900 per week and as little as $559 per week in the following year’.[10]
[10]Ibid [173].
She concluded that:
Given the fluctuating nature of the plaintiff’s level of income in the three years prior to the incident, as set out below, and his base income of $760 at the time of the incident and the fact that he has not established the regular receipt of overtime payments, I accept a figure which most fairly reflects his earning capacity is $760 per week.[11]
[11]Ibid [175].
Financial Year
Income
2002-2003
$15,168.00
2003-2004
$33,496.00
2004-2005
$23,574.00
Thus, the appellant was required to establish his inability to earn at least $456 per week or $23,712 per annum, in order to show that he had suffered a serious injury.
Her Honour said that:
Counsel for the plaintiff submitted that the continued payment of weekly payments to the plaintiff by the defendant in circumstances where there was evidence that there was a job available for the plaintiff, constituted an admission against interest by the defendant – an acceptance by it that the plaintiff was not capable of doing the job available as it had not been offered to him and weekly payments were made.
I do not accept such an inference can be drawn. Save for the plaintiff’s evidence that he was told on termination of his employment that there would be no job for him with the defendant in the future, it is pure speculation as to why a job has not been offered.
Whilst I accept that forklift duties involve work beyond actually driving the forklift, I am not satisfied that all forklift work involves overhead work such that the plaintiff could not work full time or significant hours with some slight restrictions.
The plaintiff can get on and off the forklift. The operation of the actual forklift does not require overhead movements. The plaintiff can clean up spillages; he can cut shrink wrapping if no overhead work is involved; he can readjust pallets below shoulder height and he can make manual observations of the pallets.[12]
[12]Ibid [185]-[188].
The judge said that the preponderance of medical evidence supported the view that the appellant could drive a forklift.[13] She also relied on a joint report prepared for SPC by Ms Janette Ash and Ms Robyn Willett, occupational therapists employed by Recovre Pty Ltd (‘Recovre’), on Ms Ash’s written response to queries raised by the appellant’s medico-legal experts, and on Ms Ash’s evidence at trial. Ms Ash considered that the appellant could work as a forklift operator, subject to the limitations mentioned above, or as a machine operator.[14] Her Honour said that:
On his own evidence, the plaintiff has such a capacity depending on the machine involved. He would have no problems with pushing buttons or performing the other types of tasks described. Further, the plaintiff thought he could do light process work if it involved below shoulder height work. He could also work as a product quality controller.[15]
[13]Reference was made to the evidence of Mr Horton, Dr O’ Dwyer, Mr Grossbard and Mr Flanc.
[14]The most recent report from Ms Ash was dated 9 February 2009.
[15]Reasons, [192].
Her Honour held that the appellant had the physical capacity to earn the following amounts in the jobs nominated by Ms Ash:
(a) $760 for a 38 hour week or $39,520 per annum as a forklift driver;
(b) $874 per week or $45,448 per annum as a machine operator; or
(c) over $25,000 per annum if he worked at least 25 hours per week in either of the above jobs.[16]
Refusal of Calderbank offer
[16]Ibid [193], [195].
On 16 January 2009, SPC served a letter on the appellant in which it offered to:
(a) consent to the appellant bringing proceedings for recovery of pain and suffering damages only and not for loss of earning capacity; and
(b) pay the appellant’s costs of the proceeding up to 16 January 2009, together with any further costs incurred in accepting the offer, which was to lapse on 9 February 2009.
SPC made it clear in its letter that, if the appellant refused its offer, it would rely on the principles in Calderbank v Calderbank.[17]
[17][1975] 3 All ER 333.
Following delivery of her reasons on the applications for leave to commence proceedings to recover damages for pain and suffering and loss of earning capacity, the judge heard submissions relating to the costs consequences of the appellant’s refusal of SPC’s Calderbank offer. On 6 October 2009, the judge held that the Act did not preclude the making of a Calderbank offer of the type made by SPC and that the appellant’s refusal to accept the offer was unreasonable. Accordingly, she made no order as to the appellant’s costs incurred after the date on which SPC’s offer lapsed.
Grounds of appeal
These were as follows:
1.The learned Trial Judge erred in her decision that the Appellant did not at the date of determination have a loss of earning capacity sufficient to satisfy the requirements of s 134AB(38)(b)(ii), (c) and (e) of the Act.
2.The learned Trial Judge erred in her determination of the Appellant’s ‘without injury’ earning capacity.
3.The learned Trial Judge erred in concluding that the Appellant had a capacity for employment at the date of trial and determination.
4.The learned Trial Judge failed to properly consider and apply the definition of suitable employment, particularly in that she had no proper regard to:
a.the refusal of the Respondent to provide a return to work plan or occupational rehabilitation services but considered jobs with the Respondent when evaluating the Appellant’s capacity for suitable employment; or
b.the age and place of residence of the Appellant.
5.The learned Trial Judge failed to properly consider the medical opinions identifying restrictions on the Appellant’s capacity to undertake employment, as opposed to having the capacity to drive a forklift or do some of the tasks of a machine operator (with the Respondent).
6.The learned Trial Judge failed to apply properly the terms of s 134AB(27).
7.The learned Trial Judge wrongly determined that the ‘Calderbank offer’ delivered on 16 January 2009 and said to expire on 9 February 2009 could effect [sic] the statutory obligation as to costs.
8.The learned Trial Judge failed to consider properly the ability of the Appellant to evaluate the offer when notice of further evidence relevant to evaluation of the Appellant’s claim was not served on the Appellant until after the offer had expired.
9.The learned Trial Judge failed to recognise the weight and importance she had placed on the later served evidence when making her decisions as to costs so that her decision miscarried.
Loss of earning capacity grounds
Section 134AD of the Act, which required this Court to ‘decide for itself whether the injury is a serious injury’ was repealed by s 60 of the Accident Compensation (Amendment) Act 2010 (the ‘Amendment Act’), which came into operation on 10 December 2009. The Amendment Act does not contain transitional provisions in relation to s 60, so it is not clear whether s 134AD continues to apply to appeals from decisions made before 10 December 2009, if the appeal is commenced after that date. That issue does not arise in the present case, where the appeal was commenced by Notice of Appeal dated 20 October 2009. Both counsel accepted that s 134AD applies to the question whether the appellant’s shoulder injury was ‘serious’ in its loss of earning capacity consequences.
This relieves the appellant from showing that the trial judge erred in concluding that he did not suffer an injury with serious loss of earning capacity consequences.[18] Nevertheless, ‘[w]here specific error has been demonstrated, this may invite closer scrutiny of the case as a whole. In this limited sense, the existence of error may not be wholly irrelevant on appeal’.[19]
[18]Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124.
[19]Sutton v Laminex Group Pty Ltd [2011] VSCA 52, [8] (Tate JA, Ashley JA and Hargrave AJA agreeing).
The grounds challenging the dismissal of the application for leave allege that the judge erred in two respects. Ground two relates to the judge’s assessment of the appellant’s earning capacity prior to the injury. Grounds one and three, and four to six relate to the judge’s conclusion that the appellant was capable of earning 40 per cent or more of his pre-injury earnings, in suitable employment.
Pre‑injury earning capacity
Counsel for the appellant submitted that the judge gave excessive weight to the appellant’s low earnings in the three years before he was injured in November 2005. Those earnings were not representative of the appellant’s earning capacity because they were comprised of the net income from a family orchard enterprise which ultimately failed, a low wage paid by his brother-in-law and an uneconomic farming enterprise on leased land.
Counsel submitted that the pre-injury average gross weekly earnings of $1,026 stated on the appellant’s WorkCover claim form, which was completed in December 2005, were more representative of the appellant’s pre‑injury earning capacity than his earnings in the previous three years. Counsel also relied upon the wage records of a fellow worker at SPC to support his submission that the appellant had the capacity in 2005 to earn over $1,200 per week (gross) or $62,400 per annum, when overtime was taken into account.
Counsel for SPC submitted that the judge had fairly assessed the evidence as to the appellant’s earning capacity prior to the injury. As to the complaint about the weight placed on the appellant’s relatively low earnings in the three years prior to his injury, counsel submitted that the judge had properly taken into account the ‘fluctuating’ character of his income,[20] had accepted that the earnings in the previous three years were not representative of the appellant’s earning capacity and had substituted the appellant’s immediate pre-injury earnings of $760 per week (gross) as a proxy for his weekly wage throughout the three years before being injured. The judge was said to have taken a relatively generous approach in doing so.
[20]Reasons, [175].
Counsel for SPC also challenged the appellant’s reliance on the figure of $1,026 per week in his claim form. This figure was said to have included overtime of $266 per week[21] and it was submitted that the judge had correctly found that the plaintiff’s evidence did not establish that he regularly worked overtime.[22]
[21]Although the claim form described these as ‘pre-injury average ordinary weekly gross earnings excluding overtime’. (Emphasis added)
[22]Reasons, [175].
Conclusion on pre-injury earning capacity
Both sub-ss (38)(e) and (f) are concerned with loss of earning capacity, rather than simply with loss of earnings.[23] The former requires
a comparison of the respondent’s post-accident earning capacity with his pre‑accident earning capacity, determined such that the latter is to be calculated by reference to the gross income (expressed as an annual rate) that the respondent was earning or was capable of earning from personal exertion or would have been capable of earning from personal exertion during that part of the period which, starting three years before the accident and finishing three years after the accident, most fairly reflects the respondent’s earning capacity had the injury not occurred.[24]
[23]Acir v Frosster Pty Ltd [2009] VSC 454, [175] (J Forrest J).
[24]Hayhill Pty Ltd v Hodge [2006] VSCA 194, [8] (Chernov, Nettle and Redlich JJA).
We would not disturb her Honour’s findings as to the extent of the appellant’s pre‑injury earning capacity. Although her Honour referred to the appellant’s earnings in financial years 2002‑3, 2003-4 and 2004-5, she gave little weight to the lower amount of earnings in the three years before the accident. Instead, she focused on what he was earning at the time of his injury, as a measure of his earning capacity.
This was consistent with the requirement in sub-s (38)(f) to take account of the income which the worker was earning or capable of earning from personal exertion during that part of the period within three years before and after the accident ‘as most fairly reflects the worker’s earning capacity had the injury not occurred’.
In his claim form dated 2 December 2005, the appellant said that his gross earnings were $1,026 per week, plus $266 for overtime, and that his ordinary hourly rate was $19.98. The extent of his capacity to earn income from overtime payments was pursued in the following passages of cross-examination:
COUNSEL:Now, at the time you were employed by the defendant, I suggest, from August 2005, you were earning at the rate of $19.98 per hour for a 38-hour week. Is that correct?
WITNESS:Yes.
COUNSEL:Essentially your base rate gross was $759.55?
WITNESS:Without overtime?
COUNSEL:Yes?
WITNESS:Yes.
COUNSEL:I suggest to you that you got – from 14 August through to your injury, you had about 14 pay periods – 14 weeks about, and that in 11 of those you earned $759.56 or less gross per week. Do you agree with that, or don’t you know?
APPELLANT: Well, not really, no.
[There was then discussion about the tendering of records, to which the appellant’s counsel objected.]
COUNSEL:I’m putting to you that you were earning about $640 net per week or thereabouts, and that on three occasions only did you gross more than $1,000?
WITNESS:At the time of my injury, I know I was earning $700 clear with weekend work for one or two days or one and a half days. It depended.
HER HONOUR: So what you just put, Mr Middleton, was that 11 of those 14 weeks, was there just a base rate? Is that what you asked Mr Giankos?
COUNSEL:Or less. A base rate of $759 or less.
HER HONOUR: I’m just not sure of your answer to that, Mr Giankos. In the 14 weeks that you worked, Mr Middleton is suggesting in 11 of those weeks there wasn’t overtime. Is that right?
…
HER HONOUR: So in three weeks of the 14, what do you remember about that? Can you remember?
WITNESS:Well, I remember working overtime, but I don’t specifically know how many weeks overtime I did on weekends.
COUNSEL:On three occasions?
WITNESS:Well, if you say so.
COUNSEL:Well, I’m asking you?
WITNESS:I can’t remember exactly how many weekends I did work.
In re-examination, the appellant was asked ‘[w]ith what regularity were you doing overtime?’ and replied ‘[j]ust whenever I was needed because there were other forklift drivers that took on weekend work as well …’.
The appellant also relied on the earnings of an employee said to be doing comparable work. As the judge correctly noted, the comparable employee’s weekly earnings varied from $900 per week to $559 per week in the year after the appellant was injured.[25]
[25]Her Honour’s finding that ‘the comparable employee relied upon earned amounts more consistently in the upper range of $900 per week and as little as $559 per week in the following year’ appears to be based on the statement of earnings of ‘B Young’ in 2007. Statements of earnings of other workers said to be performing comparable work were also provided to the Court. These revealed that ‘M Lingard’ and ‘R Bentancourt’ made average earnings of approximately $785 and $760 per week, respectively, in 2007 (ie, less than B Young). Statements of all three of these workers’ earnings in 2006 and 2008 were also provided. These showed that B Young made average earnings of $770 and $830 per week, respectively, in those years, M Lingard $785 and $770, and R Bentancourt $770 and $835. Note the discussion in Hayhill Pty Ltd v Hodge [2006] VSCA 194, [8] as to the relevance of the earnings of other workers in the period following the accident.
The appellant was a casual seasonal worker who would not necessarily have worked for the full year. His evidence did not indicate that he regularly earned overtime. In our opinion, the appellant failed to satisfy the onus which lay on him to show that, taking account of earnings from overtime, his pre-injury earning capacity was in the order of $1,200 per week.
Capacity for suitable employment
As we have said, the onus was on the worker to prove that his loss of earnings/earning capacity as a result of the injury had been reduced by 40 per cent or more. At the date of the appellant’s injury, ‘suitable employment’ was defined in s 5 of the Act as:
employment in work for which the worker is currently suited (whether or not that work is available), having regard to the following –
(a) the nature of the worker’s incapacity and pre-injury employment;
(b) the worker’s age, education, skills and work experience;
(c) the worker’s place of residence;
(d)the details given in medical information including the medical certificate supplied by the worker;
(e) the worker’s return to work plan, if any;
(f)if any occupational rehabilitation services are being provided to or for the worker.
Medico-legal and Employment Capacity Evidence
In her reasons, her Honour carefully described the opinions of treating doctors, medico‑legal assessors and employment placement consultants about the nature of the appellant’s impairment and its effect on his capacity to undertake ‘suitable employment’.
It is unnecessary to recapitulate all of this evidence. For the purposes of this appeal, we focus on opinions relevant to the effect of the appellant’s shoulder injury on his earning capacity at the date of the application, by which time the second and third tears had occurred.
In broad terms, the expert evidence was that the appellant could not lift heavy weights or raise his right arm above his shoulders. The disagreement between the appellant’s and SPC’s medico-legal experts related mainly to the implications of this impairment on the appellant’s capacity to engage in suitable employment.
Dr Paul O’Dwyer and Dr John Pedrotti, both of SLHMC, and Mr Richard Horton were the appellant’s treating doctors. Doctors at SLMHC, including Dr O’Dwyer, saw the appellant after he was injured for the first, second and third times.[26] Initially, Dr O’Dwyer expressed a sanguine prognosis about the appellant’s work capacity. In his report dated 12 December 2008, he said that:
Mr Giankos is fit for work with regards to his right shoulder. He is unable to perform duties above his head or to engage in heavy or repetitive lifting. At this stage no further treatment is required. Prognosis is for the current limitation of movement to remain unchanged to any significant degree. Mr Giankos continues to have some minor disability related to his original injury in terms of being unable to carry out a full range of shoulder movement.
[26]Dr O’Dwyer provided reports dated 5 May 2006 (ie, after the second injury), 6 December 2006 (ie, after the second repair of the tendon), 12 December 2008, 13 January 2009, 20 January 2009 and 19 March 2009 (ie, after the third tear).
In his report dated 20 January 2009, Dr O’Dwyer stated the view that the appellant
is capable of performing the duties outlined in the Recovre report,[27] namely those of forklift operator in a food processing plant and a machine operator in a food processing plant.
However, as Mr Giankos’ shoulder remains still some what [sic] stiff and limited in it’s [sic] range of movement, his introduction to these positions would need to be in an initially limited capacity. For example 4 hours, 3 days weekly. Hopefully these hours could be increased over some months until he was able to work a full day.
[27]Details of this Report are set out at [64]-[67] below.
In his report of 19 March 2009, Dr O’Dwyer noted that, on 2 March 2009, an ultrasound showed that the appellant had a complete tear in the right supraspinatus tendon which had ‘developed secondary to Mr Giankos’ work related right shoulder injury’. Dr O’Dwyer said that:
Mr Giankos does have a current work capacity, however this has been limited further by the recent development of the tear of the tendon. He will find increased difficulties in operating a fork lift in a food processing plant or as a machine operator. Certainly his activities using the right arm will be further curtailed by his recent injury.
While his pain is likely to improve, Mr Giankos is not likely to regain significant strength and his range of movement will remain limited. He certainly will never regain full movement in the shoulder and this will no doubt limit his work potential.
On 9 April 2009, Dr Pedrotti certified that due to his chronic right rotator cuff degeneration, the appellant ‘was not fit for manual work and will not become so in the foreseeable future’.
On 9 February 2009, Mr Horton provided a report setting out the history of the appellant’s shoulder injuries and the two operations to repair his tendon. Mr Horton noted that he had finally reviewed the appellant on 24 July 2008 and had not done so since that time. (It will be noted that this report was made before the third tendon tear, which was diagnosed on 3 March 2009.) At that time, Mr Horton considered that the appellant was
fit to return to work requiring moderate physical activity but always with care using the right arm away from the body. This would necessarily bar him from performing tasks that required heavy lifting. I would have thought however that he was fit to return to forklift driving.
Mr Horton said that, on the basis of the July 2008 review, the appellant’s prognosis for the shoulder injury was good and noted that the degree of disability related to the original work-related injury meant that the appellant’s right shoulder was not suitable for heavy manual work because of the risk of further injury.
Mr Garry Grossbard, an orthopaedic surgeon, and Mr Charles Flanc, a general surgeon, provided medico-legal assessments to the appellant’s solicitors. Mr Grossbard saw the appellant on 16 December 2008 after the second tear had been surgically repaired. He reported in his report dated 31 December 2008 that:
Mr Giankos feels that following the surgery he has not made a full recovery. He has not returned to work in any meaningful capacity. He is unable to use his shoulder fully. He feels he has lost some movement. He has pain when he rolls over in bed and occasionally during the day. He does not relate the pain to any particular activity. He said he is not able to lift heavy weights because of a loss of power in the shoulder.
He noted that there was some ‘mild wasting of the supraspinatus muscle on the right side’ and ‘power was slightly diminished compared to the left side’. He opined that
Mr Giankos has ongoing symptoms in relation to his shoulder which I believe will be permanent. His ability to resume activities where lifting, pulling and pushing of heavy objects is required particularly at or above shoulder height will be significantly reduced.
He said that the appellant was fit for alternate duties at or below shoulder height where lifting and repetitive forceful movements were not required but that the appellant’s prognosis was guarded in view of his psychological status and increased reliance on alcohol.
In his report dated 14 January 2009, Mr Grossbard reviewed his earlier opinion in light of the Recovre report dated 22 December 2008, to which we refer in more detail below. He reported that:
The job of Forklift Operator in a food packaging plant would be somewhat difficult for this man. In particular, the description and photographs suggest a need to forcibly unwrap pallets. The repeated use of his arms for long periods may also be difficult. This man may cope with these activities for short periods but I doubt he would be able to manage a full day’s activity in this regard.
The role of Machine Operator in a food processing plant would similarly be difficult, particularly if he was required to undertake mopping. I note from the enclosed photographs he would be required to lift and this lifting would include lifting at or above shoulder height. Under those circumstances, this work is probably inappropriate. Although this man may manage some aspects of the job for short periods of time, I doubt he would cope with a full day’s work under these circumstances.
On 15 April 2009, Mr Grossbard provided a further report in light of the development on 1 March 2009 of shoulder pain and the appellant’s re-tearing of his rotator cuff. His opinion relating to the appellant’s work capacity was unchanged. He said:
The absence of a rotator cuff does not preclude someone from undertaking activity with their arms at their side and the conclusions expressed in my previous report still hold true. Even at that time this man’s shoulder mobility was restricted and apart from issues of pain control, his function is probably not altered significantly.
Mr Flanc examined the appellant on 13 October 2008.[28] At that time, the appellant told him that his recovery was slow and that he continued to have some limitation of movement and pain in the shoulder. Mr Flanc recommended that the appellant should not ‘return to any heavy work or work which involved elevation of his arm above shoulder level’. Mr Flanc said that:
In my opinion, with regard to his right shoulder, he is not fit to return to any form of heavy or repetitive work which involves use of the right upper limb.
Theoretically, he could work as a forklift driver providing his work did not involve any heavy use of his right upper limb and I do not know whether this is realistic in a factory situation.
Mr Giankos told me that he has applied for six or seven jobs as a forklift driver but has been rejected because of his age and because lifting would be required. He also stated that he was rejected as soon as he mentioned his previous WorkCover claim.
It therefore may not be realistic to expect him to return to forklift driving.
Mr Giankos does have some basic computer skills which were self taught and the question is whether he could be retrained into a sedentary office type occupation. A vocational assessment would be appropriate but I have serious doubts whether he would be able to be accepted into even a sedentary occupation when one considers his age and background.
[28]Report dated 23 October 2008.
On 18 January 2009, Mr Flanc responded to an employment capacity analysis report from Recovre which indicated that the appellant had the capacity to work as a forklift operator or machine operator. He said the following:
1. Forklift operator in food packaging plant
The activity described ‘required to perform all forklift operation duties. Sustained periods with minimal force. Required constantly throughout workday’.
I do not know what forklift operation duties involve. If by this they mean that he has to press buttons, change gears or turn a steering wheel, then this may be reasonable, at least on a part time basis initially. The term ‘minimal force’ does not explain how much force is required and what actual movements are performed.
I would be interested to receive information about this particular aspect in greater detail.
2.Machine operator in food processing plant
This notes that the upper limbs are required to ‘remove cardboard and press buttons on the monitoring machine. These movements are required constantly throughout the day’.
It is stated that the arms do not have to be lifted above shoulder height and that retrieving products dropped by the machine would not involve weights greater than 1 kg.
I would be interested to receive further information about the term ‘required to remove cardboard’. Does this mean that he has to lift isolated sheets or boxes of cardboard or stacks of cardboard. If his lifting did not involve any heavy weights and he did not have to reach above shoulder height, then it may be reasonable to start this particular job at least initially on a part time basis, perhaps four hours per day.
My questions about these jobs are based on the fact that I really have no knowledge of the actual requirements and hence a fuller explanation would be helpful. I am also aware of the recommendations regarding restrictions made by Mr Michael Shannon, Orthopaedic Surgeon, in his report of 11/4/07 (page 3 of Recovre report). In this he states that ‘he is probably reaching the point where he could drive a forklift but he could not move heavy pallets on rollers’.
The restrictions include ‘not completing any duties outside those outlined in the return to work plan, not to work above shoulder height, not to lift items above 2 kg and to work at his own pace and to report any pain’.[29]
[29]Report dated 18 January 2009.
On 27 April 2009, Mr Flanc provided a further report after the appellant suffered the third tendon tear. He said that
It is likely that the episode of March 2009 was a spontaneous re-rupture of an already twice repaired supraspinatus tendon … In my opinion this tendon may well have been vulnerable to re-tearing even spontaneously and it appears to have further aggravated his condition …
He would clearly still be unfit for any heavy use of his right upper limb and particularly lifting of heavy weights above the horizontal level. In my report following the examination of 2008 I noted that he had applied for a variety of jobs but had been rejected. I also considered that it would not be realistic for him to return to forklift driving.
I again raised the question of whether he could be retrained into a sedentary office type occupation although considering his age and background it is unlikely that he would succeed in finding such a job in the open market.
SPC relied on medico-legal reports provided by Mr Stephen Leitl, an orthopaedic surgeon, Mr Michael Shannon, a surgeon, and Mr Robin Williams, an orthopaedic surgeon.
Mr Stephen Leitl’s report was dated 13 December 2006 (ie, prior to the third tear). At that time, Mr Leitl said that the appellant would recover sufficiently to enable him to return to pre-injury duties as a forklift driver in due course and that he was currently fit for alternative duties where he was not required to undertake repetitive work involving the right upper limb at or above chest height. He noted that, at that stage, the appellant was taking an analgesic and that the appellant reported a reduction in his pain.
Mr Michael Shannon’s report of 11 April 2007 was also made prior to the third tear. At that time, Mr Shannon said that the appellant:
has painful restriction of movement of his shoulder, he has significant muscle wasting and weakness and he is currently and probably in the future limited in his performance of work involving strenuous or repetitive use of his right arm, heavy lifting or work about shoulder level.
He is probably reaching the point where he could drive a forklift, but he could not move heavy pallets on rollers and he states that the work he did on his return to work plan in the repackaging section involved lifting and overhead work resulting in a further tear of his supraspinatus.
Mr Shannon noted a vocational assessment report of Wills IM which was said to describe a number of tasks ‘which seem to be … quite appropriate’ for the appellant. The restrictions were that the appellant was not to complete ‘any duties outside those outlined in the return to work plan, not to work above shoulder height, not to lift items above 2kg, to work at his own pace and to report any pain’.
Mr Williams provided a report dated 7 February 2008, also before the third tear occurred. In that opinion, he noted that the appellant told him that ‘his right shoulder hurts on and off. He said that it hurts if he lays [sic] on it in bed. He said that it cracks, twitches and describes it as being, “not that good”‘.
He noted that the appellant
is able to use his right upper limb for quite a lot of activities at and a little above waist level and therefore he could operate a forklift, but because he has pain and weakness and restricted elevation of the arm jobs requiring such activities would be too difficult.
Mr Williams said that the appellant’s condition was unlikely to change in the foreseeable future and further treatment would not help him. In the summary of the report, he said that the appellant could ‘drive a forklift’ or ‘undertake employment within his experience provided he was not required to use his right upper limb to any extent at shoulder level’.
At the hearing of the appeal, SPC placed particular emphasis on the Recovre report dated 22 December 2008 and prepared by Ms Ash and Ms Willett (the ‘Recovre Report’).
That report referred to the medico-legal assessments other than those of Mr Grossbard and Mr Flanc and said that the appellant would be able to work as a forklift operator, dispatch clerk, purchasing officer, light process worker, light machine operator, product quality controller, or customer service operator. It said that ‘[j]ob roles’ for a forklift operator and a machine operator had been identified and then set out worksite assessments based on a visit to the SPC factory, discussions with the SPC return to work co-ordinator and demonstrations of the work done by a forklift operator in the 1 kilogram area of the factory and a machine operator. The appellant was not interviewed and the report did not refer to any other forklift or machine operator jobs which existed in the Mooroopna area.
On the basis of the worksite assessment the Recovre Report said that: ‘Two roles have been identified as suitable from a skills perspective and an analysis of the tasks involved in each role indicate they are suitable for Mr Giankos from a physical perspective’.
Both jobs were in the one-kilogram area of the factory. The first job was as a forklift operator which involved ‘the rotation of 2 different tasks which involve the unwrapping and disposal of “shrink” wrap from the pallet and general forklift operation’. It was said that this task accommodated the appellant’s physical tolerances as documented in the medical reports.
The second job, that of machine operator, involved three different tasks, namely, pallet inspection, visual observation and clearing the loading area (the last task including ‘mopping a clean spill’). It was said that the worker might have to perform this task up to once an hour, although alternative techniques reducing shoulder strain could be taught to the worker.
In response to questions asked by Mr Flanc in his 18 January 2009 report[30] and the issues raised by Mr Grossbard in his 14 January 2009 report[31] about the nature of these tasks, Ms Ash prepared an amended employment capacity analysis relating to the tasks required of the forklift operator and the machine operator roles. Ms Ash said that the worker currently holding the forklift operator job, which was said to be suitable employment for the appellant, estimated that he spent 80 per cent to 90 per cent of his working day driving the forklift and was not required to undertake any manual movement of pallets or other heavy items. She commented that:
Many forklift roles do require the operator to manually move boxes and other items not accessible to the forklift. The assessed forklift operator role does not require any manual movement of pellets [sic] or other heavy items as all products are stacked onto pellets [sic] which are stored in multi-level racks all of which are accessible to the forklift. The forklift is used to load and unload the process line and also to remove bins and other waste from the process line, including removal of plastic wheelie bins, thereby eliminating the need for the operator to manually complete these tasks.
[30]See [54] above.
[31]See [51] above.
In relation to the removal of plastic shrink wrapping, the worker was given a box cutting knife to slice through the wrapping before it was removed. Pulling force of up to one kilogram was required to remove the wrapping. The left hand could be used to complete any unsnagging if necessary.
The assessed machine operator role required the worker to manually lift and remove single sheets of cardboard placed between layers of tins when the machine failed to do so automatically. The cardboard sheets were said to weigh less than one kilogram and were able to be removed and carried to the bin using one hand. In addition:
·Workers in this role press the operating buttons and touch screen functions at a rate of approximately one touch per 30 seconds, though this can increase if the machine malfunctions and diagnosis of the trouble spot is required via use of the touch screen. Diagnosis of trouble spots is generally made within one minute and this period of increased button pushing ceases upon diagnosis. There is no requirement for constant contact with buttons, thereby allowing the worker to rest their arms by their side.
·The current incumbent suggests that mopping of spilled product generally occurs at a rate of approximately one spill per hour, though he acknowledges that this can occur more or less frequently over the course of a shift. Workers are required to lift the mop to a height of 300mm to clean wet spills when they occur. Cleaning of spills is estimated to take less than one minute per spill and no scrubbing is required with the mop as all spills are fresh. Laden mop weight is unlikely to exceed the stated 2kg restriction (Michael Shannon, 11/04/07) and it is reasonable to assume that the bulk of this weight could be managed by the left arm.
·Lifting above shoulder height in the machine operator role is pictured, (Recovre Employment Capacity Analysis) when the worker observed raises a cardboard sheet weighing less than 1kg overhead. It is not listed as an essential work demand as it can be eliminated via modification in technique used by the worker. Should a worker choose to remove cardboard by lifting above shoulder height it could be undertaken using the left arm only.
In her evidence-in-chief, Ms Ash said that the roles identified related to a specific forklift operator role in the one-kilogram packaging area of the SPC Ardmona plant at Mooroopna and to a specific machine operator’s job at that plant. It was noted in the Recovre Report that the SPC operation was ‘the major employer in the region with up to 1,800 employees across two sites during the busy periods’. Ms Ash also gave evidence that the operation had been significantly reduced in the previous five years and was now operating only one full shift.
The appellant’s evidence
In his affidavit dated 8 December 2007, the appellant said that it had taken him longer to recover after the repair of the second tear and that his recovery was not as good. He said he had been looking for work all of the year but had been unable to secure it because of ‘the combination of his age, injury and lack of qualifications’. He described the current state of his shoulder as follows:
I suffer daily pain in my right shoulder. My right arm is now weaker. The movements of my arm are restricted, particularly above shoulder height. Often there is a painful clicking sensation in my shoulder with movement. The pain in my shoulder increases with use, especially any repetitive activity or heavier weight bearing activity.
…
In the past I always prided myself on being able to work hard. I have only ever done physical work in the past. I have no office qualifications. I have no computer skills. Given my age, my work history and my right shoulder injury it is now difficult for me to identify a job for which I am qualified and which I will actually be able to physically perform. I understand that there is a risk of me re-tearing the tissues in my right shoulder that have already been torn twice. I understand that if the tissues re-tear it is unlikely that I could have a further surgical repair. I am bored and frustrated with sitting at home not working. I hate the fact that I am not working. I am very worried about whether I will be able to obtain work again in the future.
In his third affidavit, dated 6 April 2009, he deposed that:
Since 1 March 2009 the level of pain in my right shoulder has increased. I find it much more difficult to do simple tasks around the house. I am also more restricted in my movements. With my arm extended straight in front of me, I cannot lift my arm to above shoulder height. My range of motion is even less with my right arm extended to the side – I find that my arm cannot go any higher than a bit below shoulder height.
In his evidence at trial, the appellant described the job he had done as a forklift operator at SPC and said that damage to loads commonly occurred and that this required unpacking or repacking of goods. He was asked whether, in looking for employment, he had ‘been able to identify any employment which involves only working as a forklift driver, rather than other duties as well’. He responded: ‘No, not in any sort of forklift work, whether you work in a warehouse or [for a] transport company. There’s always lifting and, you know, manual work to be done and not only just sitting on your forklift’.
He said that he could not work above shoulder height and did not have strength in his right shoulder.
In cross-examination, it was put to the appellant that Mr Horton had reported that, in July 2008, he had been able to put both his shoulders through a full range of painless active movements. The appellant agreed that this had occurred but said that Mr Horton ‘was doing the movements with his hands moving my arms. It wasn’t a case of myself doing it’.
In response to a question from her Honour, the appellant said that, at that stage, he had told Mr Horton that his shoulder was ‘about 80 per cent or 75 per cent, something like that’. He was asked to demonstrate the height to which he could raise his right arm. In discussion between the judge and both counsel, it was agreed that he could lift his arm between half and three quarters from the horizontal.
In cross-examination, the appellant conceded that he had applied for forklift jobs but said that he could only take such jobs if they did not involve any lifting. He also said he did not take any medication for his right shoulder. He was asked whether he thought it was appropriate for him to see what was on offer at SPC and he had replied that he had not done so because ‘they told me they wouldn’t put me back to work’. He was further cross-examined on this matter as follows.
COUNSEL:Who told you that?
WITNESS:One of the staff members.
COUNSEL:What’s their name?
WITNESS:That’s the guy that I contacted in regard to why I was put off.
COUNSEL:What’s his name?
WITNESS:I can’t recollect. I’m sorry.
HER HONOUR: Do you know what job he had there? Was he a supervisor or?
WITNESS:No, he wasn’t a supervisor on the floor. He was one in the main office, person in the main office.
COUNSEL:When did he tell you that - - - ?
WITNESS:When I asked why I was put off work.
COUNSEL:When did you ask why you were put off work?
WITNESS:Well, I asked on that particular day when I was handed the slip.
He was asked by the judge whether he thought he could work as a forklift operator. He said in response:
just driving a forklift is okay … it’s not hard work because you use your left hand to steer with and you use your right hand to manoeuvre the levers for up and down or side shift, if the forklift has got side shift. So the levers aren’t hard … it doesn’t take excess energy to like move the levers. But … you do have to get off your forklift and you do have to lift, and that’s part of the job description of a forklift driver.
He was asked if he could do light process work if the work were all below shoulder height and he said he could do so. He was also asked if he could do light machine operations if the work were below shoulder height and replied: ‘It depends on what sort of machine or what shoulder it is’.
The appellant was also cross-examined as to whether he could do a job involving two different tasks, one of which was unwrapping and disposing of the shrink wrap from pallets and the other involving ‘general forklift operations’. He said that he could do so. He agreed that he would be able to cut shrink wrap off a pallet of cans with a knife, provided that he did not have to take his arm above shoulder height. He also agreed that he could perform a task requiring him to remove ‘an identification label, barcode and record details on production running sheet using pen and paper. Record time the pallet of product is started and finished’.
He was shown photographs of the tasks included in the Recovre report and asked whether he could manage removal of cardboard sheets. It was put to him that he could do so using his left arm. The following exchange took place:
WITNESS:You try and manage those sheets, four feet by four feet, and, you know, try and manage it and stack it where it has to be stacked. The sheets come off the pallets, off the shinies, because each layer of tins, of cans, has got a cardboard sheet. As soon as the machine picks up the cans the operator has got to take the cardboard sheet out and then go and put it on another pallet where they stack it, about this high. Then it’s taken away by the forklift driver and you start the process again.
COUNSEL:Have you done this job?
WITNESS:No.
COUNSEL:There’s no reason, provided you didn’t have to put your arm above your shoulder, that you couldn’t handle a piece of cardboard like that, is there?
WITNESS:No.
COUNSEL:Then the next photograph shows a man mopping, on the production line I assume. You could do that?
WITNESS:Yes.
In re-examination, the appellant was asked whether he had received any indication that there would be employment available to him at SPC after the second tear. He denied receiving such an indication and said that he had been told that there would not be a job for him. His evidence was then as follows:
COUNSEL:Have you ever been given a return-to-work plan at any time since March 2006?
WITNESS:No.
COUNSEL:In relation to the employment with SPC, was there ever an indication to you in March 2006 or subsequent to that time that there would be any employment available to you at that company?
WITNESS:This is after my second injury or - - -
COUNSEL:Yes, when you had the second injury. Did they ever indicate they would be willing to take you back?
WITNESS:No.
COUNSEL:Was there ever any indication to the contrary, that they wouldn’t take you back?
WITNESS:Yes.
COUNSEL:What was that?
WITNESS:That they stated they wouldn’t take me back. I’ve never been employed at SPC since.
COUNSEL:What indication or what understanding did you have as to the availability of work for you back at that company after you injured yourself the second time?
WITNESS:They actually put off people because of the relocation of the machinery and what have you, so they put off a lot more people at SPC Ardmona, especially from the Ardmona plant, and they relocated staff from the Ardmona plant to the Shepparton plant because they’d relocated the whole packaging system to Shepparton.
COUNSEL:Did you have any understanding as to whether or not you were somebody who was welcome back there?
WITNESS:No.
COUNSEL:You had an understanding – were you welcome back or not welcome back?
WITNESS:No, not any more.
COUNSEL:How did you form that understanding?
WITNESS:Well, as I said, there was a phone call asking why I was retrenched. Because they were supposed to give me being on light duties at least four weeks’ work, and by rights they dismissed me.
The respondent was also asked in re-examination whether he was aware of any job where a person was only required to drive a forklift. He said that he was not and that, when he was working at SPC, the factory had not had such a position.
Counsel’s submissions
Counsel for the appellant submitted that the judge should have concluded that the appellant was not capable of earning more than 60 per cent of his pre-injury earnings in ‘suitable employment’, having regard to the factors which must be taken into account under s 5 of the Act. He argued that her Honour had wrongly relied on the opinions of Dr O’Dwyer, Mr Horton and Mr Williams that the appellant was capable of working as a forklift driver, when opinions as to the appellant’s employment capacity were outside the scope of their medical expertise. (This submission related to the fifth ground of appeal.)
Counsel further submitted that the judge had given insufficient weight to the evidence of the appellant and some of the medico-legal assessors that, although the appellant’s shoulder injury did not prevent him from driving a forklift, he was physically unable to perform other tasks associated with that job. The judge should also have rejected Ms Ash’s evidence that the appellant could work as a forklift operator in the one-kilogram packaging area of the plant, or as a machine operator. The evidence about the scope of the job of a forklift driver in the one‑kilogram packaging area of the SPC factory was based on Ms Ash’s one hour observation of another worker which showed that the job did not require lifting the right arm above shoulder height. This ignored the appellant’s evidence as to what forklift driver jobs are required to do and what he could and could not do. The proposed machine operator job disregarded the appellant’s inability to press a touch screen every 30 seconds for eight hours.
Further, even if the appellant could have worked as a forklift driver or machine operator in a role which did not require him to lift heavy weights or use his arms above shoulder height, such positions were not ‘suitable employment’ because he had been told by SPC that he would not be hired again and had been fired two days after he re-commenced work at SPC packing tins of damaged fruit and after his second injury.
Counsel for the appellant necessarily conceded that, under s 5 of the Act, a job which exists and which the worker is capable of doing may be ‘suitable employment’ even though there may be no vacancies for that job in the relevant area. However, he submitted that, in the particular circumstances of this case, the appellant had satisfied the onus of showing that he had no capacity to earn income in suitable employment. The scope of the jobs the appellant could do was limited by his shoulder injury, SPC was the only large employer in the Mooroopna area, SPC had stated that it would not employ him and there was no evidence that any other jobs catering for the appellant’s restrictions were available in the area.
Counsel for SPC conceded that the appellant’s shoulder injury prevented him from undertaking the type of forklift work he had done before the first tear, because he could not undertake activities involving use of his right arm above shoulder height or do heavy lifting or repetitive activity involving that arm. However, he submitted that the appellant had been unable to adduce evidence contradicting Ms Ash’s opinion that he could work as a forklift operator or in a job which did not require him to lift his right arm above his shoulder, or as a machine operator.
He pointed to the appellant’s evidence in cross-examination that he could do forklift driving and shrink wrap work, if lifting were not involved, and that, if he were offered a forklift job, he would take it.[32] Counsel also relied on the appellant’s concessions in cross-examination that he could do light process work if he could work below shoulder height and that he could work as a product quality controller.
[32]Reasons, [50].
Counsel submitted that s 134AB(38)(f), read together with s 5, makes it clear that it is the worker’s capacity that determines whether they are capable of suitable employment. Thus, the fact that there were no job vacancies for forklift drivers who could perform the tasks which could be done by the appellant was irrelevant. There were forklift jobs which the appellant could have done within the SPC factory. There were also machine operator jobs available although these would have required some retraining.
Counsel joined issue with the appellant’s contention that the judge should not have had regard to medical opinions about the suitability of particular occupations for the appellant. He relied in particular upon the opinions of Dr O’Dwyer who, in his report of January 2009, considered that forklift driver and machine operator positions seemed appropriate for the appellant’s condition[33] and those of Mr Horton in his 9 February 2009 report, who said that the appellant, at a review on 24 July 2008, was able to move both shoulders through a ‘full range of painless active movement and … was virtually asymptomatic’ and who considered the plaintiff ‘fit to return to work requiring moderate physical activity but always with care using the right arm away from the body’.[34] Subject to this qualification, Mr Horton had concluded that the appellant was ‘fit to return to forklift driving’.
[33]Ibid [64]; see [43] above.
[34]See [46] above.
In the alternative, counsel for SPC said that, even if the appellant could not work full-time as a forklift driver or a machine operator, he was capable of working part time as a forklift driver or machine operator, and he could earn 60 per cent or more of his pre-injury earnings by undertaking such work.
Conclusion on appellant’s capacity for suitable employment
In our opinion, the appellant has established that the permanent impairment of his right shoulder[35] resulted in a loss of earning capacity of 40 per cent or more.[36] He should therefore be granted leave to commence proceedings to recover damages for loss of earning capacity.
[35]Section 134AB(37).
[36]Section 134AB(38)(e)(i).
Before explaining our reasons for that conclusion, we briefly deal with a preliminary issue arising out of the fifth ground of appeal, which complained that the judge wrongly relied on medical opinions as to whether the appellant could drive a forklift or work as a machine operator.
Expert opinion evidence must relate
sto matters which are wholly or substantially within the expert’s field of expertise.[37] It follows that medical opinions about the suitability of particular employment for an injured worker should focus on the physical restrictions which a particular impairment imposes, rather than on whether the injured person is able to do a particular job. There is a danger that medico-legal experts will stray beyond their field of expertise, and give unqualified opinions about the jobs which can or cannot be done by the worker. Except where a medical practitioner has specialist occupational health and safety qualifications or experience, a medical opinion as to the work which an injured worker can perform may fall outside the doctor’s area of expertise. Mr Horton’s opinion that ‘he would have thought’ that the appellant was fit to return to forklift driving, comes close to transgressing this boundary.[37]J D Heydon, Cross on Evidence (8th Australian ed, 2010) [29043].
On the other hand, if the tasks required in a particular job are analysed by reference to the physical capacities required (for example lifting weights or unwrapping pallets), a medical practitioner is qualified to express an opinion about whether a person with a particular impairment has the physical capacity to perform that particular task. The questions asked by Mr Grossbard and Mr Flanc about the tasks proposed in the Recovre Report are examples of the approach which should be taken by a medical practitioner asked to express an opinion on an injured person’s work capacity.
In this case, most of the medical evidence was confined to comments on the effect of the tendon tears on the appellant’s physical capacity to perform specific tasks. Her Honour used the evidence for that purpose. We would therefore reject ground five, although as we have said, it is unnecessary for the appellant to establish error in order to succeed on appeal.
In considering the other grounds of appeal, it must be recognised that the Act differentiates between an inability to earn income in suitable employment because of an impairment and an inability to earn income because of a tight labour market.[38] A worker’s reduction of the capacity to earn income in suitable employment must relate to the former, rather than the latter. This is reflected in s 5 of the Act, which requires the court to disregard whether the work, for which the injured worker is currently suited, is or is not available to the worker.
[38]Victoria v Rattray [2006] VSCA 145, [16].
We have concluded that the test for the grant of leave has been satisfied, for the following reasons.
First, the worker’s capacity for work for which he is currently suited must be assessed by reference to the appellant’s age and place of residence, as well as his education, skills and work experience.[39] The appellant was 58 years old when the application was heard. He left school when he was young and has had had a history of unskilled and manual work in family enterprises, and at SPC, though at one time he had run a hotel in Melbourne. He was living near Mooroopna. Employment which was situated a long distance from his residence would not be ‘suitable employment’ within s 5.[40] The Recovre Report referred to a statement by the appellant that he had computer skills, but the appellant denied possessing such skills in cross-examination. At the hearing of the appeal, SPC did not contend that office work was ‘suitable employment’ for the appellant.
[39]Section 5, definition of ‘suitable employment’ (b).
[40]Barwon Spinners Pty Ltd v Podolak (2005) 14 VR 622 (‘Barwon Spinners’), 636 (Ormiston, Chernov and Phillips JJA).
Secondly, the trial judge made no adverse findings about the appellant’s credibility. Nor could she have done so. The appellant freely conceded that he could do light process work which did not involve lifting his arm above his shoulder or drive a forklift without doing associated lifting tasks. The issue was thus whether there were any real jobs of that kind in existence.
Thirdly, the worker’s capacity for suitable employment is concerned with his or her physical or mental capacity to work again.[41] The reports of SPC’s medico‑legal experts were provided before the appellant suffered the third tear. It was not contended that the third tear was a separate injury unrelated to the original tendon injury which gave rise to the appellant’s claim. In our opinion, the reports of SPC’s medico-legal experts, which were provided prior to the third tear, must be given less weight in assessing the appellant’s capacity for suitable employment than the reports of Dr Pedrotti, Mr Grossbard and Mr Flanc, all of whom considered that the appellant would have difficulty in performing manual work and that his capacity for suitable employment was limited or non-existent. Dr O’Dwyer, who had previously said that the appellant could return to part-time work driving a forklift, changed his mind about the appellant’s capacity for work following the third tear.[42] Further, both the appellant’s and SPC’s medico-legal experts conceded that the appellant was incapable of performing the forklift work he had done before the accident, which involved heavy lifting and use of his arm above his shoulder.
[41]Barwon Spinners (2005) 14 VR 622, 637.
[42]Report of 19 March 2009, see [44] above.
The fact that the appellant experienced pain after returning to work at SPC following his initial injury and was shortly thereafter diagnosed with the second tear is also relevant to his employment capacity. Even if he did manage to find work which he could do, it was not unlikely that he might suffer further injury by inadvertently using his right shoulder in a way which did not comply with the restrictions to which the medical evidence referred, when placed under pressure to complete a task in a busy factory setting.
Fourthly, the appellant gave evidence that he continued to experience pain in his shoulder which increased with use, especially repetitive, active or weight-bearing activity. The pain suffered by the appellant is relevant in assessing his capacity to undertake suitable employment. Although the appellant said in cross‑examination that he had stopped taking pain-killers, his experience of pain was accepted by both the appellant’s and SPC’s medico-legal experts and the judge found that: ‘The plaintiff’s condition, whilst not one involving constant pain, is activity related and it continues to cause him pain and discomfort when he is trying to sleep’.[43] The judge also accepted that the appellant’s right shoulder injury prevented him from performing other physical activities:
the plaintiff has lost the enjoyment of this lifestyle as a result of his inability to handle stock or engage in other farming activities.
The plaintiff has not attempted to go shooting since the incident because he does not believe he could control the butt of his rifle on his shoulder. He also anticipates heavy fishing would be difficult, particularly casting with his right hand. He is restricted in his ability to play with his grandchildren.[44]
[43]Reasons, [160].
[44]Ibid [161]-[162].
Fifthly, apart from the Recovre report, there was no evidence that real forklift and machine operator jobs, complying with the restrictions which affected the appellant, existed in the area in which he was living.[45] Ms Ash’s report and evidence related to the existence of the two SPC jobs. She did not suggest that there were forklift driver or machine operator jobs in the area which the appellant could do, other than the two jobs existing at SPC. The same can be said of her response to Mr Flanc’s queries in the supplementary Recovre report dated 9 February 2009. SPC was the major employer in the area, though it had scaled down its operations and Ms Ash conceded that forklift drivers in larger factories usually had to do some lifting.
[45]The appellant did get a job at Surdex Steel, where he knew the employer, before the second tear was diagnosed, but he was in pain and left the job the day after he started upon diagnosis of the second tear.
Her Honour appears to have given little weight to the appellant’s evidence that forklift jobs inevitably involved the performance of other tasks and that such jobs did not exist in areas such as packing sheds.
Nor did her Honour give much weight to the appellant’s evidence in cross‑examination that the forklift job depicted in the photograph in the Recovre Report was ‘the sort of job’ that he did in the damaged goods area of the factory, after he returned to work following his first injury. This required him to do heavy and repetitive lifting and to raise his arm above his shoulder and resulted in him experiencing pain. The second tear was diagnosed about a week later.
The trial judge regarded the Recovre Report, which indicated that the appellant could perform the jobs of forklift driver in the one-kilogram area of the SPC factory or machine operator in that factory, as strong evidence of the appellant’s capacity to earn at least 60 per cent of his pre-injury earnings in ‘suitable employment’.
Her Honour noted Ms Ash’s response to queries by Mr Grossbard about the machine operator job and said in relation to the forklift job that:
Ms [Ash] did not observe any manual handling on top of an existing pallet. She agreed that unlike jobs she had observed at other premises, there was no actual heavy lifting off the forklift. She agreed it was quite commonplace for forklift drivers in larger factories to be responsible for those sort of duties.
Ms [Ash] understood the role she assessed was not the role that the plaintiff had been performing before being injured. She never saw manoeuvring of pallets by hand in the hour whilst at the work site nor did she see a situation where pallets were stacked against the wall and the forks could not be manoeuvred under them. She saw one spillage. She did not see any shorter pallets.
Ms [Ash] agreed that the lifting involved in forklift driving occurred in a whole range of circumstances and was highly variable, depending on the specific workplace.
Having been advised of Dr O’Dwyer’s most recent opinion as to the plaintiff’s capacity, Ms [Ash] did not change her view as to the plaintiff’s suitability for the jobs identified by her.[46]
[46]Reasons, [146]-[148].
Ms Ash’s opinion in the Recovre Report was based on a one-hour observation of a single forklift driver and a single machine operator working in a particular area in the SPC factory. Although this evidence of observation may be accepted, we would not attach significant weight to it. A one-hour look at a job being performed is unlikely to be a reliable guide to the varying tasks which may confront the worker doing that job on a daily basis in a busy factory.
Sixthly, counsel for the appellant conceded that, if the only employer in the area which had jobs which the appellant could perform had ruled out any possibility that it would employ the appellant, there would be no work for which he was currently suited, having regard to the factors set out in s 5. It was accepted that this situation was different from the case where there were jobs in existence which the worker could do, but no vacancies for those jobs. That concession was appropriate, because, in such circumstances, there would be no real job in existence that the employee could do.
The unchallenged evidence of the appellant was that he was told by a supervisor that SPC would not hire him again. Although this evidence was given in cross-examination and counsel for SPC complained to the trial judge about the inability to meet it, no application for an adjournment was made for that purpose. The evidence remains uncontradicted and accords with the probabilities. At the time the appellant was told that he would not be re-hired, he had recently returned to work following the first tear and then almost immediately suffered the second tear. In these circumstances, it is understandable that SPC would consider that the appellant’s re-employment might well lead to another injury, whatever duties were assigned to him, and thus be reluctant to re-hire him in any circumstances. The fact that he was not given the opportunity to resume employment under a return to work plan, after his second tendon tear, supports this conclusion.
Consistently with counsel’s concession and on the basis of the evidence, we consider that SPC could not rely on the two jobs in its factory, which Ms Ash identified as suitable employment for the appellant, as evidence of the existence of real jobs within his capacity.
Finally, although the Act[47] required the appellant to prove, on the balance of probabilities, that no suitable employment existed, in which he could earn 60 per cent or more of his pre-injury earnings, we consider that SPC bore an evidentiary onus to adduce evidence that there were other jobs in the Mooroopna area for which the appellant was suited. In Public Transport Corporation v Pitts,[48] a Magistrate had held that the worker’s employment capacity was limited because of the disabling effect of his injury and his poor reading and writing skills. In those circumstances, Smith J said that:
The case was one where it was plainly open to the learned magistrate to conclude that the plaintiff had established a prima facie case that no suitable employment as defined in the legislation existed and so was entitled to succeed in his case unless the defendant produced evidence sufficient to raise some specific alternatives for consideration. In my view, the reality was that the defendant had to adduce evidence sufficient to raise as a real possibility that there were particular types of employment available in the community which the plaintiff was capable of performing. If it did not it would lose.[49]
[47]For example s 134AB(38)(e) and (f) refer to the worker establishing that the factual requirements are satisfied. See also Barwon Spinners Pty Ltd v Podolak (2005) 14 VR 622.
[48][2007] VSC 356.
[49]Ibid [17].
The preponderance of medico-legal evidence, and the appellant’s own evidence, established a prima facie case that the appellant was unable to do forklift work or other jobs which required him to raise his arm above his shoulder. Because of counsel’s concession and the appellant’s evidence that SPC would not re-hire him, SPC had to advance some evidence that there were suitable jobs in existence in Mooroopna or the surrounding area, which the appellant, a man aged 58, was able to do, despite his impairment. In our opinion, it failed to discharge that evidentiary onus. There was no evidence that jobs of the particular kind which existed at SPC existed elsewhere and the appellant’s evidence was that they did not. Nor did Ms Ash’s report refer to the existence of any jobs outside SPC existing in the Mooroopna area.
Having regard to the lack of such evidence and the effect on the appellant’s earning capacity of his age, skills and inability to do heavy or repetitive work which involved lifting his arm above his right shoulder, we consider that the appellant has established that he lacked the capacity to undertake suitable employment in which he could earn 60 per cent of his pre-injury earnings.
We would therefore allow the appeal and grant the appellant leave to commence proceedings to recover damages for loss of earning capacity.
Costs
The appellant also appeals against the costs orders made by the trial judge. Having regard to the conclusion that the appeal should be allowed on the capacity for suitable employment issue, it is unnecessary to determine this aspect of the appeal. However, as the matter was fully argued and the issue is one of general importance in the determination of serious injury applications in the County Court, it is appropriate for this Court to express its view as to the point of principle raised by the notice of appeal. This is particularly so in circumstances where, as appears below, there are conflicting decisions by judges of the County Court on the issue.
The issue of principle arose in the following context. The appellant sought leave to commence proceedings under s 134AB(16) of the Act in respect of both pain and suffering damages and loss of earning capacity. By sub-s (17), a worker who satisfies the Court that he or she has suffered a compensable serious injury, but who fails to satisfy the Court of the requisite loss of earning capacity, may only obtain leave to commence proceedings for recovery of damages for pain and suffering.[50] Accordingly, in a case such as the present, the County Court was faced with two issues for decision. Subsection (17) gives express recognition to the possibility that an applicant for leave to commence proceedings in respect of a serious injury may obtain an order in his or her favour on one issue but may fail on the other issue. That was what happened in this case. A decision was made in the appellant’s favour on the pain and suffering issue, and a decision was made against him on the loss of earning capacity issue.
[50]Subsection (17).
With this possibility in mind, the respondent’s solicitors sent a letter to the appellant’s solicitors prior to the hearing of the serious injury application. In that letter, the respondent offered to compromise the serious injury application on the basis that, by consent of the parties, the appellant be given leave by the Court to bring a common law proceeding for the recovery of pain and suffering damages only, that the respondent pay the appellant’s costs of the proceeding up to the date of acceptance of the offer and that the proceeding be otherwise dismissed. In the event that the offer was not accepted within 21 days, and the appellant thereafter failed to obtain leave to commence proceedings for the recovery of pecuniary loss damages for loss of earning capacity, the respondent stated that it would rely upon the principles enunciated in Calderbank v Calderbank[51] and would invite the Court to make no order as to the costs of the proceeding from the date of the letter (the ‘Calderbank offer’).
[51][1975] 3 All ER 333.
The appellant did not accept the Calderbank offer. He proceeded to a contested hearing of all issues. He succeeded on the pain and suffering aspect of his serious injury application, but the decision was against him on the loss of earning capacity issue. In these circumstances, the trial judge heard argument as to whether it was open for the respondent to rely upon the Calderbank offer as a discretionary factor influencing her decision as to the costs of the serious injury application. The judge decided that it was open for the respondent to rely upon the Calderbank offer as a relevant consideration affecting her discretion as to costs, and made orders in accordance with that offered by the Calderbank offer. She ordered that the respondent pay the appellant’s costs to the date of the offer, and that thereafter there be no order as to costs. Having regard to the outcome of the principal issue on appeal, it is unnecessary to consider whether the trial judge exercised her discretion correctly in the circumstances of the case. In particular, it is unnecessary to decide whether the appellant acted unreasonably in rejecting the Calderbank offer. Accordingly, these reasons deal only with the point of principle as to whether the judge was entitled to take the Calderbank offer into account in formulating her costs order.
Before the trial judge, and on appeal, it was submitted on behalf of the appellant that s 134AB(27)(a) requires a court which decides to grant leave under sub-s (16)(b) to make an order that the employer pay the whole of the worker’s costs of the application without any restriction or modification, even where, as here, the worker fails to obtain leave to commence a proceeding for pecuniary loss damages. In this Court, reliance was placed upon Ballantyne v Alcoa Portland Aluminium,[52] a decision of the County Court which declined to follow the trial judge’s decision in this case.
[52][2011] VCC 1577.
For the reasons appearing below, we do not accept the appellant’s submissions.
Section 134AB(27)(a) makes provision in respect of the costs of serious injury applications under sub-s (16)(b). It is in the following terms:
(27) Subject to the rules of the court—
(a)in proceedings relating to an application for leave of the court under subsection (16), costs are to be awarded against a party against whom a decision is made …
The opening words of sub-s (27) govern para (27)(a). They mean what they say. The legislative direction that costs are to be awarded against a party against whom a decision is made is subject to the rules of the court considering the serious injury application.
The County Court Civil Procedure Rules 2008 are made pursuant to s 78 of the County Court Act 1958. Section 78A(1) of that Act states the fundamental principle to be applied in making costs orders: ‘The costs of and incidental to all proceedings are in the discretion of the Court and the Court may determine by whom and to what extent the costs are to be paid’.
The County Court rules include O 26, which deals with the making and effect of formal offers of compromise. However, although certain presumptive costs entitlements flow under r 26.08 depending on whether the party served with the offer obtains a judgment which is more or less favourable than the terms of the offer, those presumptive entitlements only arise ‘unless the Court otherwise orders’. The Court’s general discretion as to costs is thus preserved where r 26.08 is enlivened. The appellant accepted that, if the formal offer of compromise procedure had been adopted, the trial judge would have been entitled to make costs orders under r 26.08, either in accordance with the specified presumptive entitlements or otherwise in the exercise of her discretion.
Further, O 63A makes provision for the manner in which the discretion as to costs is to be exercised. In that regard, r 63A.04 is relevant. It provides:
(1)The Court may make an order for costs in relation to a particular question in or a particular part of a proceeding.
(2)Where the Court makes an order under paragraph (1), the Court shall by order fix the proportion of the total costs of the proceeding which is attributable to the particular question in or the particular part of the proceeding.[53]
[53]Emphasis added.
Rule 63A.04 is compatible with s 134AB(17) and with the result in this case. It makes express provision for a judge determining a serious injury application to order costs with respect to particular questions in or parts of a proceeding. In a case such as the present, r 63A.04 authorised the Court to order that the appellant pay the costs of the question on which the decision went against him, as to loss of earning capacity. Such an approach would have required the judge to fix the proportion of the total costs of the proceeding to be paid by the appellant, with the remaining proportion to be paid by the respondent. However, although such an approach was clearly open to the judge, it was not adopted in this case.
A question arises as to whether such an apportionment must be fixed in terms of a percentage of the total costs of the proceeding, or whether the apportionment may, in the alternative, be fixed by reference to time. In our opinion, an approach by reference to time may be adopted, provided that the time allocation is fixed by reference to a proportionate assessment of the costs attributable to the relevant question or part. This is consistent with the purpose of the rule, to assist in the taxation of costs by making it unnecessary for the taxing officer to consider whether a particular item is attributable to one or other question or part of the proceeding.[54] Difficulties can otherwise arise on taxation, especially where there is overlap between issues. However, for the avoidance of doubt, the fixing of time cannot be determined by the terms of a Calderbank letter, as was done in this case.
[54]Saarinen v Clay [1954] VLR 392, 395-6; Byrnes v Davie [1991] 2 VR 568, 571; McFadzean v Construction Forestry Mining & Energy Union & Ors [2007] VSCA 289, [158]–[159].
As to Calderbank offers, the issue is whether sub-s (27)(a) has the effect of excluding the general and overriding discretion of the Court as to which party is to be awarded costs. In our view, it clearly does. This is notwithstanding that the discretionary power to award costs has been regarded as necessary to avoid injustice.[55] The clear words of the statute must prevail.
[55]Oshlack v Richmond River Council (1998) 193 CLR 72, [33], [63]; O’Neill v Williamson(No 2) [2008] VSC 430, [13].
The meaning of sub-s (27) is clear. It is only where the rules of Court provide, that the Court’s discretion to determine who is to be awarded costs is retained. Otherwise, the Court must award costs against ‘a party against whom a decision is made’. As appears above, the Act contemplates that a decision may be made both in favour of a party and against that party in the same serious injury application. The rules provide the parties with opportunities, at least under O 26 and r 63A.04, to protect themselves against such a result on costs. Thus, a party in the position of the respondent here, could have utilised the O 26 offer of compromise procedure. If so, an order of the kind made in this case would have been open to the Court in its discretion. Alternatively, in the absence of an offer of compromise having been served, it was open to the respondent to submit that the Court should adopt the r 63A.04 procedure, and apportion the total costs of the proceeding between the issues of pain and suffering on the one hand and loss of earning capacity on the other.
The Calderbank procedure is not recognised by the County Court rules. Accordingly, in determining in whose favour costs are to be awarded, the County Court may not have regard to a Calderbank offer such as that made in this case. Although it appears odd that Parliament would intend to preserve the O 26 procedure but exclude the Calderbank procedure, that is the clear meaning of the words used and that result fits within the legislative scheme – which is to prescribe the costs consequences of proceedings under the Act to a high level of specificity.
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