North Broken Hill Ltd v Tumes

[1999] NSWCA 309

CITATION:	North Broken Hill Limited v Tumes [1999] NSWCA 309
FILE NUMBER(S):	CA 40334/98
HEARING DATE(S):	06/07/99
JUDGMENT DATE:	27 August 1999
PARTIES :	North Broken Hill Limited Brian Tumes
JUDGMENT OF:	Beazley JA at 1; Giles JA at 27; Davies AJA at 28

LOWER COURT JURISDICTION:	Compensation Court
LOWER COURT FILE NUMBER(S) :	1417/96
LOWER COURT JUDICIAL OFFICER:	Curtis CCJ

COUNSEL:	Appellant: JD Hislop QC/ G Graham Respondent: A Katzmann SC/ E Techeret
SOLICITORS:	Appellant: Austen Brown, Thompson by their city agents Marshall Marks Kennedy Respondent: Buckworth Ready & Chalker
CATCHWORDS:	Workers Compensation; Injury sustained during employent; Economic loss
ACTS CITED:	Workers Compensation Act 1987 (NSW) Compensation Court Act 1984 (NSW) Workplace Injury Management and Workers Compensation Act 1988 (NSW)
CASES CITED:	Hope v Bathurst City Council (1980) 144 CLR 1 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 Australian Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 J C Ludowici & Son Ltd v Cutri (1992) 26 NSWLR 580 Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25 Steggles v Aguirre (1988) 12 NSWLR 693 Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20 Kraturn Pty Ltd (t/as Mac's Fruit Centre) v Quinn (unreported, New South Wales Court of Appeal, 28 September 1990)
DECISION:	Appeal Allowed

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40334/98
CC 1417/96

BEAZLEY JA
GILES JA
DAVIES AJA

Friday, 27 August 1999



NORTH BROKEN HILL LIMITED & ORS v TUMES

JUDGMENT

1    BEAZLEY JA: This is an appeal from an ex tempore decision of Curtis CCJ in the Compensation Court. The respondent (applicant before the Compensation Court) was awarded lump sum compensation and weekly compensation payments in respect of injuries sustained during the course of his employment as a miner with the appellants. The appellants appeal against that part of his Honour’s judgment whereby the respondent was awarded weekly compensation payments pursuant to s 40 of the Workers Compensation Act 1987 (NSW). The appeal is limited to a question of law: Compensation Court Act 1984 (NSW), s 32.

Background

2    The respondent worked for the appellant from 1979, when he was twenty years old, until he was made redundant in February 1993 upon the closure of the mine at which he worked. During that period he suffered several injuries, such that by the time he was made redundant, he was, according to the finding of Curtis CCJ, “fit for all but the heaviest forms of work” but “not fit for the heaviest work of a miner”. The respondent had not, until that time, lost any time from work due to his injuries.

3    The respondent was unemployed for a little under two months before he commenced employment as a miner with a Mr De Bruin on 1 April 1993. He earned $800 per week in that employment. The trial judge found this work, which involved shaft refurbishment, was “quite heavy”.

4    On 17 January 1994 the respondent changed his employment, commencing work with Allied Constructions. In this employment, the respondent was engaged in shaft sinking, which, although properly characterised as “mining work”, was not of the heaviest type. He earned $1,600 per week.

5    On 20 February 1995, while in the employ of Allied Constructions, the respondent sustained a serious injury to his left hand which caused him to leave the mining industry and find employment, initially as a bit sharpener and subsequently in a clerical capacity, with Sandvik Rock Tools Pty Limited (Sandvik), his current employer. The respondent’s earnings with Sandvik were initially $576 per week, increasing to $690 per week as at the date of hearing.

Issues on the Appeal

6 The appellant’s principal contention is that the trial judge misapplied s 40 of the Workers Compensation Act and thereby erred in law: see Hope v Bathurst City Council (1980) 144 CLR 1; Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389. Specifically, the appellant contended that the trial judge had failed to pose the question for determination under s 40(1), namely, whether the respondent had suffered any economic loss as a result of the injuries sustained during the course of his employment with the appellants: see Arnotts Snack Products Pty Limited v Yacob (1985) 155 CLR 171 at 178; Australian Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87 at 93-94. The appellants further contended that had the trial judge asked himself that question he would have been compelled to find, on the found facts, that the loss of earnings which the respondent has in fact suffered was due to the injury to his hand sustained in the employment with Allied Constructions. The appellants also submitted that even if his Honour had correctly applied s 40, he had failed to give reasons explaining his exercise of discretion under s 40(1): Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247.

The Legislation

7 Section 40 of the Workers Compensation Act provides, relevantly:

“(1) Entitlement . The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the worker’s weekly earnings, but is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case.
(2) Calculation of reduction in earnings of worker - general . The reduction in the worker’s weekly earnings is (except as provided by this section) the difference between:
(a) the weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment (but not exceeding $1,000), and
(b) the average weekly amount that the worker is earning, or would be able to earn in some suitable employment, from time to time after the injury (but not exceeding $1,000).
…
(3) Ability to earn in suitable employment . The determination of the amount that an injured worker would be able to earn in some suitable employment is subject to the following:
(a) the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker,
(b) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.”

8    Section 43A(1) provides:

“For the purposes of sections 38, 38A and 40:
suitable employment , in relation to a worker, means employment in work for which the worker is suited, 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 the medical certificate supplied by the worker,
(e) the provisions of the employer’s workplace rehabilitation program and any rehabilitation assessment of, or rehabilitation plan or return-to-work plan for, the worker,
(f) any suitable employment for which the worker has received rehabilitation training,
(g) the length of time the worker has been seeking suitable employment,
(h) any other relevant circumstances.”
The Trial Judge’s Determination

9    The trial judge’s approach to the award of compensation is clear enough from his judgment. First, he found that the respondent was, as at the date he ceased work with the appellants, partially incapacitated for that employment (notwithstanding that as at that date the incapacity was not productive of economic loss).

10 Secondly, as the respondent was unemployed until 31 March 1993, he was entitled to be paid compensation for partial incapacity for that period. The parties were agreed that for the purposes of s 40(2)(a) the weekly amount which the worker would probably have been earning but for the injury was $1,042.80 (the agreed s 40(2)(a) amount). For the purposes of s 40(2)(b) his Honour held that “had the work been available to him in his injured state he would probably have earned [the] sum of $800 per week which he was paid by De Bruin” (being the employment immediately after the period of unemployment). This resulted in a mathematical difference of $246.60, which his Honour awarded for this period.

11 Thirdly, during the period of employment with De Bruin from 1 April 1993 until 16 January 1994, his Honour awarded compensation in the sum of $246.60 (being the difference between the agreed s 40(2)(a) amount and his actual earnings with De Bruin: s 40(2)(b)).

12 Fourthly, during the period 17 January 1994 until 20 February 1995 when the respondent was employed by Allied Constructions no award was made because the appellant’s actual earnings exceeded the agreed s 40(2)(a) amount.

13 Finally, for the period from 21 February 1995 (being the period commencing immediately after the hand injury) the trial judge deducted the respondent’s actual earnings from the agreed s 40(2)(a) amount (arriving at figures of $487 and $400.20 respectively for different earnings during this period) and then took into account “significant” discretionary factors to reduce the calculation to $300 per week.

14 The proper approach to the determination required by s 40(2)(b) was considered by this Court in J C Ludowici & Son Ltd v Cutri (1992) 26 NSWLR 580. In that case the appellant had, after her injury, returned to work with her pre-injury employer on light duties. Prior to injury she had worked a considerable amount of overtime. After her return to work she was no longer rostered on overtime. Her compensation claim reflected the difference between her pre-injury earnings which included overtime and her post-injury earnings which did not. The trial judge found that although she had returned to her pre-injury employment, that work was unsuitable for her. He determined, therefore, that rather than taking her actual earnings as the appropriate figure under s 40(2)(b), he should assess what she could earn in some “suitable employment”. He found this amount to be less than her actual earnings.

15 Kirby P (with whom Handley JA agreed in general and Sheller JA agreed) stated at 593 that upon its proper construction, s 40(2)(b) meant that:

“where the worker is earning, the average weekly amount produced thereby is normally to be taken as the par (b) component of the equation. It is only otherwise where the decision-maker concludes that the worker is able to earn more than that sum in some suitable employment. Then, but then only, is a notional sum taken into account” (emphasis added).

16 In so construing s 40(2)(b), Kirby P applied a number of obiter statements of the Court as to the proper construction of the section. In Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25, Kirby A-CJ had said at 35-36 that the statutory alternatives in s 40(2)(b):

“… direct the decision-maker first to what the worker ‘is earning’. Then, as an alternative, they direct attention to what the worker ‘is able to earn’. The alternative appears to be stated in case it appears that the worker is not earning anything or that the amount which is actually being earned is not a real estimate of the value, in the open market, of his or her economic capacity.”

17    Kirby A-CJ referred to the similar view expressed by Priestley JA in Steggles v Aguirre (1988) 12 NSWLR 693 and then commented at 36:

“[I]f the worker is earning normally that will be enough. If, however, there is any reason in the evidence to suggest that the amount being earned represents an under-estimation of the worker’s earning capacity regard may also be had to what he ‘is able to earn’.”

18    None of Steggles, Novello or Ludowici involved a case where the worker had suffered a subsequent injury which further diminished the worker’s earning capacity. That possibility was considered in Aitkin v Goodyear Tyre & Rubber Co(Aust) Ltd (1945) 46 SR (NSW) 20, where Jordan CJ said at 25:

“[a] supervening non-employment injury is treated as leaving the diminution in capacity caused by the employment injury as still existent and as only adding a further diminution in capacity which is not to be taken into account for the purposes of s 11”.

19 Section 11 was the predecessor to s 40. The “supervening non-employment injury” referred to in this passage, must, in my opinion, be read as an injury which occurred outside the employment to which the injury subject of the claim relates, regardless of whether the supervening injury was itself an injury in a different employment and itself compensable. If I am wrong and Jordan CJ’s statement was restricted to a non-employment (and therefore non-compensable) injury, then in my opinion, the same principle applies in respect of a subsequent compensable injury suffered whilst in the course of a different employment. Jordan CJ continued at 25-26:

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

20 In this case, the respondent’s claim fell to be determined in two different periods - namely the periods before and after his hand injury. The assessment of the s 40(2)(b) amount in the first period itself fell into three distinct time periods: (i) the period of unemployment immediately after ceasing work with the appellant; (ii) the period during which he was employed by De Bruin; and (iii) the period during which he was employed by Allied Constructions up until the date of his hand injury. In accordance with the principles to which I have referred above, the determination of the s 40(2)(b) amount during the whole of the first period was upon the basis of what he was earning or could have earned in some suitable employment. His Honour correctly approached the matter in that way.

21 That leaves the question whether the trial judge erred in the final phase of the determination, namely in respect of the period after the hand injury. Put more directly, the question is, whether, on the facts found, the trial judge in that period should have used, as the s 40(2)(b) amount, the respondent’s post hand injury earnings (as his Honour did), or whether he should have applied the alternative provision under s 40(2)(b), “the average weekly amount that the worker … would be able to earn in some suitable employment, from time to time after the injury”. During this period the respondent’s incapacity arose in part from injuries suffered whilst in the employ of the appellant and in part due to his supervening hand injury sustained in different employment. In that circumstance, his entitlement to compensation in the subject claim is to be determined having regard only to his incapacity arising from the injuries suffered in his employment with the appellants. Accordingly, the proper approach to s 40(2)(b) requires the court to take as the relevant amount under that paragraph the amount he would be able to earn in some suitable employment, but for the injury sustained during the course of employment with the appellant. The trial judge did not approach the assessment for the period after the hand injury on this basis. Rather, he took the amount the respondent was earning in a diminished capacity because of both his back injury and his hand injury. His Honour erred in law in doing so.

22 The question then arises as to what should flow as a result of this error and in particular whether the matter should be remitted to the Compensation Court for re-hearing on this aspect of the award. Senior counsel for the respondent advised the Court that rather than having the matter remitted, the respondent accepted that the appropriate amount for the purpose of s 40(2)(b) was $246.60 (being the same difference as between the agreed s 40(2)(a) amount and the $800 the respondent earned with De Bruin). Although senior counsel for the appellant did not appear to resist this approach, he did not agree with it either. His primary position was that the respondent was not entitled to any compensation because he had demonstrated that the amount he was able to earn in some suitable employment was the $1,600 earned with Allied Constructions.

23 Notwithstanding the reasonable position taken by counsel for the respondent, I am of the opinion that, absent consent or facts that are not in dispute, such an approach is precluded by s 107 of the Workers’ Compensation Act (now s 105 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW)) which provides:

“[s]ubject to this Act and the Compensation Court Act1984, the Compensation Court has exclusive jurisdiction to examine, hear and determine all matters arising under this Act (except Part 5).”

24 The proper approach to s 40(2)(b) required the trial judge to determine on the facts of this case what amount the respondent would have earned in some suitable employment. That determination is a question of fact. The jurisdiction of this Court is limited by s 32 of the Compensation Court Act to the determination of whether the trial judge erred in law or wrongly admitted or rejected evidence. Section 32(2) provides that this Court may on the appeal “remit the matter to the Compensation Court for determination … in accordance with the decision of the Court of Appeal and may make such other order in relation to the appeal as the Court of Appeal sees fit”.

25 That latter provision does not, however, invest the Court of Appeal with jurisdiction to make findings of fact. There remains outstanding, in this case, a crucial factual issue - namely the amount the respondent could earn in some suitable employment. On the case presented to the trial judge two possibilities were raised - either $800 per week (as earned in the De Bruin employment) or $1,600 per week (as earned with Allied Constructions). It is for the parties to determine what evidence will be adduced on a re-hearing to enable the judge on that re-hearing to make the factual finding, based on the proper approach to s 40(2)(b), which this case requires: see Kraturn Pty Limited (t/as Mac’s Fruit Centre) v Quinn (unreported, New South Wales Court of Appeal, 28 September 1990); Ludowici at 595.

Orders

26    Before dealing with the orders which I consider should be made in this matter it should be noted that there appears to be a clerical error in the award in respect of the period commencing 19 February 1994. That part of the award should have closed as at the date of injury - 20 February 1995 - and not 1 May 1997 as specified. This should be amended under the slip rule. Subject to that I propose the following orders:

(i) Appeal allowed.

(ii) Set aside the third and fourth components of the first order of Curtis CCJ of the Compensation Court of New South Wales dated 18 May 1998.

(iii) Remit the matter to the Compensation Court for re-hearing in respect of the period after 20 February 1995, in accordance with this Court’s decision.

(iv) Order that the respondent pay the appellant’s costs of the appeal, but have a certificate under the Suitors’ Fund Act 1951 (NSW), if so entitled.

27    GILES JA: I agree with Beazley JA.

28    DAVIES AJA: I agree with Beazley JA.