Newcastle Tyre Service v Elliott

[2001] NSWCA 254

CITATION:	Newcastle Tyre Service v Elliott [2001] NSWCA 254
FILE NUMBER(S):	CA CA 40818/00
HEARING DATE(S):	1 August 2001
JUDGMENT DATE:	6 August 2001
PARTIES :	Newcastle Tyre Service Pty Limited t/as Richards & Deal Discount Tyres (Appellant) Ricky Bruce Elliott (Respondent)
JUDGMENT OF:	Mason P at 1; Powell JA at 2; Studdert AJA at 3

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	46/98
LOWER COURT JUDICIAL OFFICER :	English DCJ

COUNSEL:	G. Petty SC/R. De Meyrick (Appellant) L. King SC/I. Neal (Respondent)
SOLICITORS:	Sparke Helmore (Appellant) Bale Boshev & Associates (Respondent)
CATCHWORDS:	DAMAGES - measure of damages - employment injury - whether assessments for non economic loss and for economic loss manifestly excessive.
LEGISLATION CITED:	Workers' Compensation Act, 1987
DECISION:	See para 35

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40818/00

MASON P

POWELL JA

STUDDERT AJA

Monday 6 August 2001

NEWCASTLE TYRE SERVICE PTY LIMITED v RICKY BRUCE ELLIOTT

JUDGMENT

1   MASON P: I agree with Studdert AJA.

2   POWELL JA: I agree with Studdert AJA.

3   STUDDERT AJA: This is an appeal from an assessment of damages made by her Honour Judge English in the District Court at Newcastle on 28 September 2000. On that date, her Honour directed the entry of judgment for the plaintiff in the sum of $269,106.46.

4   The appellant, Newcastle Tyre Service Pty Limited, employed the respondent, Ricky Bruce Elliott, as a general hand and tyre fitter. Her Honour found that in the course of his employment with the appellant the respondent sustained injury on 5 May 1997 when tyre rims fell, striking his right hand. Her Honour found that the respondent sustained his injuries as a consequence of the appellant’s negligence and the defence of contributory negligence was rejected. Those findings are not challenged here.

5   The damages awarded were made up as follows:

Allowance for non economic loss $77,857.50
Allowance for economic loss:
Loss of earnings to date 42,720.00
Future loss of earning capacity 137,834.00
Out of pocket expenses 6,098.18
Fox v Wood adjustment 4,596.78
$269,106.46

6   The assessment of damages was governed by the Workers’ Compensation Act and it was submitted by the appellant that the above assessment manifested error in that:


(a) the allowance for non economic loss under s 151G of the statute was manifestly excessive;

(b) since any allowance for economic loss should have been below the threshold set for this purpose by the statute, her Honour also erred in allowing damages for economic loss at all; alternatively, that the assessment for economic loss was excessive in the relevant sense.


7   The injuries which the respondent sustained with the appellant consisted of fractures of the metacarpal bones of the ring and little fingers in the right hand. Coincidentally, this same hand had been the site of previous fractures, indeed to the same metacarpal bones. The earlier fractures had occurred in January 1997 when the respondent had punched a wall at his mother’s house. X-rays of the right hand taken on 5 May 1997 showed deformities of the fourth and fifth metacarpal mid-shafts consistent with healed fractures there but, in addition, there were recent fractures of the mid-shafts of the fourth and fifth metacarpals.

8   It was the respondent’s case that when he was injured at work he had already recovered from the effect of the earlier trauma to the hand and that, following such recovery, he had been able to resume his normal work. Her Honour found, consistently with the respondent’s evidence, that the respondent had indeed been able to work “without incapacity flowing from the earlier incident” . That finding was open to her Honour on the evidence and the appellant has not contended to the contrary.

9   The respondent was born on 24 March 1975 so that he was twenty-two years of age at the time of the accident giving rise to this claim, and when damages were assessed he was twenty-five years old. Her Honour was favourably impressed by the respondent as a witness, recording the following assessment:
“The plaintiff appeared to me to be a completely honest witness who made every effort to answer truthfully, candidly and accurately the questions that were put to him on all issues and never availed himself of the opportunity to embellish or improve his case… I have no doubt as to his veracity.”

10   Immediately after the employment accident the respondent was treated at the Mater Hospital at Waratah but the following day he was referred to Dr Harrington, an orthopaedic surgeon. Dr Harrington removed the plaster which had been put in place at the hospital and strapped the affected fingers. Medical evidence from Dr Harrington, which was placed before the District Court, recorded visits which the respondent made to Dr Harrington prior to 5 November 1997 when the respondent underwent an operation on the hand in the nature of a dorsal wedge osteotomy and plating procedure.

11   Following that procedure Dr Harrington was able to report by February 1998 that the respondent was doing well and had a good range of movement. By July 1998 Dr Harrington reported that the time had been reached for the respondent “to go looking for work and retraining” . X-rays available then showed the osteotomies had healed.

12   The respondent did not resume work in July 1998. When he was discharged from Dr Harrington’s care he was the father of an infant child with serious health problems at that time. The respondent had not returned to regular employment by the date of the trial and had worked only for some four weeks doing casual work at a service station in May-June 1999.

13   Plainly her Honour accepted the respondent’s account of his disabilities given in his evidence and it is convenient to record what the respondent said (T17-18):
“Q. Can we start with the pain in the hand?
A. Yes.
Q. Is there pain there all the time or is there a pain that comes and goes in that hand?
A. No, it’s a pain that’s constantly there but it’s become bearable now. So it’s not as prominent as it was when I first noticed it.
Q. For how long, in terms of months or years, has it been bearable?
A. For the last three months I’m just starting to get - to come to terms with it fully. I can, you know, I know what its limitations sort of area, what I can pick up before it starts hurting.
Q. I’m going to ask you about that but in the negative form. What things can’t you do with that right hand now that you could do with it uninjured?
A. I can’t use 10 pound or pick 10 pound hammers up and smash them on chisels and stuff like that anymore. I can’t pick up tyre jacks with this hand. I can’t pick wheels up with this hand, it’s uncomfortable. I found mowing the lawn, I can mow the lawn, I can pick the lawnmower up but not for long, you know, just pick it up over a rock or something, that’s about it. I mow the lawn and I get cramps from that.
Q. So how would you go, do you think, as a tyre fitter back in your old job?
A. I could for a couple of hours a day but that’d be it.
Q. There’s a problem with the positioning of the fingers on the hand that the doctors have referred to. Would you stand up please and show her Honour what that situation is?
CALLAWAY: I couldn’t see that. The little finger.
HER HONOUR: Yes, the little finger crosses onto the ring finger.
CALLAWAY: Q. What happens when you make a fist? Right. Is your fist-making ability as strong as it was?
A. No, not at all.”
14   The medical evidence upon which the respondent relied at the trial is to be found in reports of Dr Ostinga, Dr Isaacs and Dr Ghabriel. The appellant tendered reports from Dr Price, but her Honour rejected his evidence and, whilst written submissions were presented to the contrary, it was acknowledged in this Court that her Honour was entitled to disregard the reports of Dr Price for the purposes of assessing damages. It is unnecessary for present purposes to record an exhaustive summary of the medical evidence which her Honour did accept but, shortly:


(i) Dr Ostinga on examination in December 1998 noted the tendency of the little finger to go into hyperextension at the metacarpo-phalangeal joint and considered this to be a severe disability although he regarded the respondent as fit for most jobs. He assessed the respondent as having suffered a permanent percentage loss of function in the hand based on the abnormal action of the little finger, some impaired sensation and weakness and concluded that the extent of the permanent loss of efficient use of the right hand was twenty-five percent;

(ii) Dr Isaacs, who saw the plaintiff in April 1999, thought that the respondent’s disabilities affected his capacity for work to a moderate degree and that the respondent would not be capable of performing heavy work using his right hand or lifting and carrying heavy objects in the right hand. His assessment of the permanent loss of efficient use of the right hand was twenty percent;

(iii) Prof Ghabriel’s assessment following an examination of the respondent in November 1999 was that the respondent was not fit for activities involving excessive use of the right hand or heavy lifting, and his assessment of the permanent impairment of function in the right hand was thirty percent.

15   Her Honour reached these conclusions set out in her judgment:
“I am satisfied that he sustained fractures of the fourth and fifth metacarpals as a consequence of being struck by the rim of the tyre as described by him. He has undergone surgical procedures due to the non union of the fractures and has been left with plates and screws in situ and a tendency for the little finger to go into hyperextension at the metacarpophalangeal joint.
This was easily observable upon view. It prevents him from being able to form a fist.
………….
Obviously the plaintiff’s pain and distress at the time of accident was very real and very substantial. In my view he has not exaggerated it in any way. He has undergone surgical intervention and has been left with a severe disability in his dominant hand. A significant disability in a young man whose only income earning capacity flows from his ability to perform heavy manual work. The detriments which he suffers today are likely to be with him for as long as he lives which according to the life tables are 50.76 years.”

16   Her Honour’s task in determining what was appropriate for the purposes of s 151G was a difficult one but, in my opinion, the proportion here assessed suggests that her Honour did not have due regard to what was required by s 151G(2) and (3) as to the consideration of “a most extreme case” . Whatever the reason for her Honour’s conclusion, to award thirty-five percent of the maximum set by reference to a most extreme case was to award altogether too much. The assessment can, in my opinion, only be considered as falling outside the range of a sound discretionary judgment.

17   In my opinion therefore the appeal should be allowed.

18   Whilst the respondent has restrictions on his work capacity as defined by the doctors, the respondent retains much useful function in the hand, as the various medical assessments revealed.

19   The respondent, when cross examined about casual work he did in 1999, described the meaningful manual work that he then undertook:
“Q. You performed oil changes to cars on hoists there?
A. Yeah.
Q. Changed spark plugs?
A. Correct.
Q. That involved using tools?
A. Yeah.
Q. You would use those tools with your right hand?
A. Both hands.
Q. You did minor mechanical work?
A. Minor mechanical, yeah.
Q. You did tyre repairs?
A. Correct.
Q. And that would involve removing a worn tyre from a rim and putting on a new tyre?
A. With the machine, not by hand.
Q. You’d still have to manhandle the tyre?
A. Just pick it up, throw it on.
Q. You also repaired tubeless tyres?
A. Can, yeah.”

20   Mr Petty, on behalf of the appellant, submitted that the upper limit for the purposes of s 151G(2) in this case was twenty percent but I do not accept that submission, particularly when regard is had to the respondent’s age. In my opinion, the appropriate proportion here for the purposes of s 151G(2) is twenty-five percent and, accordingly, I would award the respondent damages for non economic loss in the sum of $55,612.50.

21   It is a consequence of the assessment of damages for non economic loss which I have reached that the threshold submission advanced by the appellant on economic loss must fail. Neither s 151G nor s 151H bears on the assessment of damages for economic loss in this case because of the proportion that the sum I would award bears to the maximum payable under s 151G.

22   It is nevertheless submitted by the appellant that the assessment made was excessive both as to the past and as to the future.

23   The assessment for the past included $22,428 allowed up to 21 July 1998 and $20,292 from that date until judgment. In the earlier period the judge found the respondent to be unable to do any work at all and allowed for the period of sixty-three weeks from the date of injury the sum of $356 per week, that being the respondent’s agreed nett weekly wage with the appellant. I do not understand it to be submitted that there was any error in that allowance and the evidence for that period supported the conclusion her Honour reached.

24   What her Honour allowed in the second period, that is from July 1998 onwards, represented fifty percent of what the respondent would have earned at his pre injury weekly rate had he remained in the appellant’s employment. Then, for the future it appears that her Honour used the same figure of $178 in conjunction with the multiplier of 917 (taken from the five percent tables) to compensate for such a loss to age sixty-five. Her Honour then discounted the mathematical calculation by fifteen percent for the vicissitudes to arrive at the figure of $137,834.

25   Mr King submitted that the approach taken was altogether appropriate, particularly having regard to the respondent’s limited work skills; Mr Petty submitted that to treat the respondent as only being able to earn from 21 July 1998 fifty percent of what he was able to earn pre injury involved obvious error. Such approach, it was submitted, not only overstated the effect of the ongoing disability upon the respondent’s earning capacity but it ignored the respondent’s unsettled pre injury employment history.

26   The respondent left school at the age of sixteen with his School Certificate. Thereafter he was employed irregularly, doing various casual labouring jobs. These positions were mainly in tyre fitting. The respondent also worked for a time laying pipes for his father and he did manual work in a furniture business as well. His employment was disrupted by drug abuse but, having been rehabilitated, he started working for the appellant twelve months before his employment injury and he worked regularly until May 1997, save for a period of incapacity after his first hand injury.

27   The respondent’s work experience was essentially in manual work and up to the date of the hearing in the District Court he had undergone no retraining or rehabilitation programme.

28   The medical evidence justified the conclusion reached by her Honour that the respondent’s disability was a significant one for him as a young manual worker with no formal training. How was the loss of earning capacity associated with the disability to be appropriately measured?

29   The work of heavy duty tyre fitting has been beyond the respondent in the past and will probably continue to be beyond him in the future. He has lost the capacity for heavy manual work and he is obviously disadvantaged on the labour market and will remain so. Nevertheless, I consider that to assess the respondent as having lost fifty percent of his earning capacity for the rest of his working life manifests error and has resulted in an allowance for future loss of earning capacity which is much too high. The respondent remains physically capable of a wide range of work.

30   The earnings available as an able bodied tyre fitter appear to have been modest, judged by the respondent's pre accident earnings. One calling in which the respondent has sought work in the past two years has been as a storeman and he would be capable of doing work of that type. Figures to which this Court was taken on the hearing of the appeal indicate that the award for a storeman and packer as long ago as October 1999 was $424.70. Earnings at that award rate would attract income tax of approximately $60 per week, but the award figures of course give no indication of actual earnings and are silent as to overtime opportunities. Nevertheless, those low figures do not compare so unfavourably with what the respondent had been earning as a tyre fitter, albeit in 1997. Further, award figures indicate that in the latter part of 1999 the award rate for grade 1 clerks was close to the award rate for storemen. Obviously though, this Court should be extremely cautious in drawing conclusions for present purposes by reference to those award figures.

31   Her Honour was not assisted at the hearing before her by then current earnings information, either as to tyre fitters or storemen or any other relevant calling. This Court is similarly disadvantaged. Nevertheless, it seems to me, allowing for the respondent’s physical restrictions and his resulting handicapped position on the open labour market, that a fair measure of the respondent’s ongoing loss of capacity is $100 per week. The lump sum presently required to compensate for a loss of $100 per week taking the respondent to age sixty five, calculated by reference to the five percent tables and applying a fifteen percent discount, would approximate to $78,000. Such a sum seems to me to be appropriate to compensate this respondent for his future loss of earning capacity measured from the date of trial.

32   I would not disturb the allowance for the past. Whilst I regard the allowance her Honour made for the future to have been incorrect, there are different considerations that apply to the past. Although the respondent was found to have been capable of working in some suitable employment as from 21 July 1998, he was not thereafter offered any retraining and he had not secured regular employment by the date of trial. It seems to me that the sum allowed for the period from July 1998 until September 2000 was reasonable, as reflecting the need for time for the respondent to adjust to his circumstances and to assess his avenues for employment.

33   Mr Petty submitted that the respondent was distracted from retraining and from seeking work by the need to attend to his infant son in his illness. However, the evidence did not disclose that this was a long term distraction and I do not regard this submission as warranting any adjustment to the past allowance for loss of earning capacity. Nor does it bear upon the future.

34   The appropriate assessment of damages in this case I consider then to be as follows:
Allowance for non economic loss $55,612,50
Allowance for economic loss:
Loss of earnings to date 42,720.00
Future loss of earning capacity 78,000.00
Out of pocket expenses 6,098.18
Fox v Wood adjustment 4,596.78
$187,027.46
35   For the above reasons, I propose the following orders:


1. That the appeal be allowed;

2. That the judgment entered in favour of the respondent be set aside;

3. That in lieu thereof judgment be entered in his favour in the sum of $187,027.46 to take effect from 28 September 2000;

4. That the appellant pay the respondent’s costs of the trial;

5. That the respondent pay the appellant’s costs of this appeal but that the respondent be granted a certificate under the Suitors’ Fund Act in respect thereof.

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