Robson v Fishers Stores Consolidated Pty Ltd
[2010] VCC 472
•10 May 2010
| IN THE COUNTY COURT OF VICTORIA | Unrevised |
Not Restricted
AT MILDURA
CIVIL DIVISION
DAMAGES – COMPENSATON
SERIOUS INJURY DIVISION
Case No. CI-09-05738
| DONALD ROBSON | Plaintiff |
| v | |
| FISHERS STORES CONSOLIDATED PTY LTD | Defendant |
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| JUDGE: | HER HONOUR JUDGE K L BOURKE |
| WHERE HELD: | Mildura |
| DATE OF HEARING: | 15 April 2010 |
| DATE OF JUDGMENT: | 10 May 2010 |
| CASE MAY BE CITED AS: | Robson v Fishers Stores Consolidated Pty Ltd |
| MEDIUM NEUTRAL CITATION: | [2010] VCC 0472 |
REASONS FOR JUDGMENT
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Catchwords: ACCIDENT COMPENSATION – Accident Compensation Act s.134AB – impairment to the spine – loss of earning capacity only – assessment of without injury earnings.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Adams QC with | J N Zigouras & Co. |
| Mr P Kozicki | ||
| For the Defendant | Mr A Moulds with | Hall & Wilcox |
| Ms S Manova | ||
| HER HONOUR: |
1 This is an application for leave to bring proceedings for damages pursuant to Section 134AB(16)(b) of the Accident Compensation Act 1985 (“the Act”) for injury suffered by the plaintiff in the course of his employment on 19 September 2006 (“the said date”).
2 The plaintiff seeks leave to bring proceedings for damages in relation to loss of earning capacity only, pain and suffering having been conceded at the commencement of the hearing.
3 The plaintiff brings this application pursuant to clause (a) of the definition of serious injury to be found in Section 134AB(37) of the Act. There, “serious injury” is defined relevantly as meaning permanent serious impairment or loss of a body function.
4 The impairment of body function relied upon is the lumbar spine.
5 The plaintiff relied upon two affidavits and gave viva voce evidence. He was cross-examined. The defendant relied upon two affidavits from Mr Fisher, sworn 1 April 2010 and 15 April 2010, and an affidavit sworn by Nicole Harris on 6 April 2010.
6 In addition, both parties relied on medical reports and other material which was tendered in evidence. I have read all the tendered material.
7 In this application, the plaintiff bears an overall burden of proof upon the balance of probabilities. Apart from the general burden, subsections (19) and (38)(e) impose specific burdens in relation to a claim for loss of earning capacity.
8 Where there is a claim for loss of earning capacity, that loss of earning capacity must be to the extent of forty per cent or more, both at the date of hearing and permanently thereafter.
9 Subsections (38)(e) and (f) recite the formula by which loss of earning capacity is to be measured.
10 Subsection (38)(g) requires questions of rehabilitation and retraining be considered in determining whether the forty per cent loss has been established.
11 I have applied the principles identified by the Court of Appeal in Barwon Spinners Pty Ltd & Ors v Podolak (2005) 14 VR 622 and Hayhill Pty Ltd v Hodge [2006] VSCA 194 in reaching my conclusions.
12 This application concerned a very narrow issue, namely, the assessment of the appropriate “without injury” earnings figure. There is no dispute on the medical evidence as to the plaintiff’s reduced employment capacity resulting from his back condition. As pain and suffering was conceded, I do not propose to deal in detail with the plaintiff’s evidence as to non-pecuniary loss consequences.
The Plaintiff’s Evidence
13 The plaintiff is presently aged forty four, having been born on 15 April 1966. He is married with four children.
14 Since leaving school having completed Year 10, the plaintiff has always worked in retail sales, initially for Kmart and later Bi-Lo. He commenced work with the defendant in 1992 at its Mildura store. Thereafter, the plaintiff held positions as assistant manager and manager at a number of stores in the Sunraysia region and other large regional towns.
15 In 2005, the plaintiff was appointed the manager of the retail supermarket at Merbein (“the store”), often working up to twelve hours per day. He worked fifty to sixty hours in a normal week. In that year the plaintiff won the IGA manager of the year over one hundred and forty two other stores. In addition to clerical and administrative work which he did in the office at the end of the day, the plaintiff undertook a lot of hands on tasks, dealing with stock.
16 The plaintiff described his work as heavy physical work and from time to time he experienced back pain and required chiropractic treatment, but he was always able to keep working.
17 As store manager, the plaintiff was paid a bonus in addition to his base salary. At the said date the total bonus available was $34,000. In the 2004-2005 financial year, the plaintiff earned a total of $85,846 being a base salary of $53,654 together with a bonus of $32,192. The following year he earned $88,000 being a base salary of $55,000 and a bonus of $33,000.
18 In the plaintiff’s view, if he had not been injured, in the 2006/7 financial year, he would have got ninety per cent of his bonus. He based that on his past history at all the other supermarkets that he had run. He had never achieved a bonus of less than seventy five or eighty per cent. “As Mr Fisher used to say, he always made targets achievable.”
19 The plaintiff explained that the percentage he referred to was the percentage of the total bonus of $34,000.
20 Prior to the accident, the plaintiff would have supervised between sixty and seventy staff. The department heads at the store were also eligible for bonuses from a smaller pool than was available to the plaintiff. The plaintiff agreed, whether he “was riding them or not,” there was a pretty solid incentive for those department heads to work as hard and as efficiently as they could.
21 On or about the said date, the plaintiff was unloading pallets of stock into a trolley when he experienced severe low back pain radiating down his right leg, which caused him difficulty when walking (“the incident”). The plaintiff ceased work that day.
22 The plaintiff saw Dr Dyson-Berry, who arranged two to three weeks physiotherapy treatment, but the plaintiff’s symptoms failed to improve.
23 Initially, the plaintiff had ten weeks off before returning to work on modified duties. He continued on such duties at the store four to five hours per day in the mornings, up to five days a week.
24 As of early 2007, the plaintiff was working about twenty five hours a week. He struggled to cope with modified work. He agreed that to some extent, he could function efficiently at that stage, but it depended on whether the other department heads were in the store when he was in attendance. Further, his productivity whilst at the store depended on how busy the store was at the time because he would not pull the department heads aside if they were busy. He described the situation as “like a nightmare towards the end, to be quite honest”.
25 The plaintiff’s assistant manager was managing the store. This was the situation until May 2007 when the plaintiff was taken out of management altogether because of his injury. The assistant manager did not manage as well as he had, as he did not have enough experience.
26 The plaintiff was prescribed Endone and Oxycontin and later referred to Mr Richard Bittar, neurological surgeon, who undertook surgery on the plaintiff’s back on 29 May 2007.
27 Thereafter, the plaintiff remained off work until 13 August 2007 when he returned to restricted light duties, up to twenty hours a week. He tried to stay at work doing administration type work but those duties involved standing at a work station. His back pain persisted, and he later he developed neck soreness.
28 The plaintiff had great difficulty remaining at work and continued to work under a return to work plan. Eventually, Dr Eades certified him unfit from 3 December 2007. The plaintiff has not returned to work with the defendant since that time.
29 In examination in chief, the plaintiff elaborated upon his problems at work after the incident. After injury, the plaintiff could not spend as much time in his management role because from time to time he was on reduced hours and he also had days off. He could not do any manual lifting or lifting of any kind. It was really a struggle just to do anything. He did his work on a reduced basis. Although he had an assistant manager, in reality they were “one person down and no-one else was employed to take up the slack.”
30 The mere presence of the manager made a difference as to how the store performed such as being able to go and work with department heads to try and achieve targets such as, if their wages were too high, to get them down. When the plaintiff was not there, there “was no-one cracking the whip” and he supposed workers would just slacken off a bit. He just had to be a presence there, so they would know he was there, more than anything. Lots of things like empty stock on the shelves would just not get picked up if he was not there. The plaintiff would have to tell staff that it needed doing and he would have to go and organise for someone to do it, whereas it should just be happening. During the six months after the incident, the Merbein store was running “very average” - “It was shocking the way the store ran”.
31 Staff were coming to the plaintiff’s home to discuss work problems. They just were not happy with anything and there was not anything he could do, apart from speak to the assistant manager. The plaintiff notified Mr Fisher, and he, as far as the plaintiff knew, did very little about it.
32 Further, there were problems with ordering as other employees did not share the plaintiff’s expertise in this regard.
33 In the 2006/7 financial year, the plaintiff became entitled to a bonus of $10,833 which paid to April pro rata, was $9,027.
34 In cross examination, the plaintiff said that he has not really heard much about the reduction in bonuses since he left the defendant’s employ. He was not aware of bonus being progressively reduced from sixty per cent to thirty per cent. He did not think he would have stayed with the defendant if that reduction of bonuses had happened whilst he was still working there as he considered it was an unfair reduction.
35 The plaintiff has completed Certificate III and Certificate IV in Occupational Health and Safety at Sunraysia TAFE. He did Certificate III between September and December 2008 and started Certificate IV in February 2009, finishing mid year.
36 It would have been about two or three months after he finished Certificate IV that the plaintiff started work with Supercheap Auto. He then started another course, a Diploma course in Occupational Health and Safety, (“O,H&S”) which he has not completed. He has only handed in two assignments of the eight required for that Diploma course.
37 The chances of employment in the local area in O,H &S are very limited. The plaintiff applied to the Mildura Rural City Council for a job in August/September last year. He was interviewed and got down to the last three of thirty two who applied for one job. It was a safety officer role involving attending various work sites and making sure employees were using their gear.
38 In cross examination, the plaintiff agreed that an occupational health and safety officer would earn about $66,000 annually, and probably a government safety inspector would earn about $83,000
39 The plaintiff commenced employment with Supercheap Auto as store manager in October 2009. His gross salary is $47,000 a year and he has an entitlement to a potential retail management bonus of no more than $2,000. The terms and conditions of that employment were tendered.
40 Because of his back pain and limitations, the plaintiff has considerable difficulty with this work, particularly being on his feet all day on a concrete floor. He tries to avoid heavy lifting and, at the end of the day, he is hobbling because of his back and he is in a lot of pain. He is anxious to keep this job, but doubts his capacity to keep going because of continuing back pain.
41 The plaintiff continues to use medication to control pain, taking Endep, Panadeine Forte up to eight a day, and Zoloft. His back problems are with him every day. His back remains vulnerable and weak, and his back condition has a marked effect on his quality of life.
The Plaintiff’s Medical Evidence
42 Mr Bittar arranged an MRI scan of the plaintiff’s lumbar spine on 26 April 2007 which confirmed the presence of a right paracentral L5-S1 protrusion with compression of the right S1 nerve root, which Mr Bittar thought fitted in very well with the plaintiff’s clinical presentation of a right S1 radiculopathy.
43 Given the plaintiff remained symptomatic at that time, Mr Bittar thought surgery was appropriate. He carried out a right L5-S1 hemilaminectomy, microdiscectomy and rhizolysis at Epworth Hospital on 29 May 2007 (“the operation”).
44 The plaintiff was examined for medico-legal purposes by Mr Peter Scott, orthopaedic surgeon, in December 2007. In Mr Scott’s view, the plaintiff had suffered an intervertebral disc lesion in the lumbosacral spine, causing right sided sciatica. At that time, he thought the plaintiff’s condition had not stabilised and that he was unfit for his pre-accident employment with restrictions on prolonged sitting or bending and lifting in excess of ten kilograms.
45 Dr George Wilson, occupational health physician, saw the plaintiff on 16 January 2008, at which time he thought a return to a previous return to work plan was appropriate.
46 Mr Hjorth, neurologist, examined the plaintiff for medico-legal purposes on 17 April 2008. Mr Hjorth found a prolapsed disc and radiculopathy and thought the plaintiff should avoid work involving bending and prolonged posture.
47 Dr Michael Baynes, occupational physician, examined the plaintiff on 12 June 2008. He thought the plaintiff had a chronic pain syndrome in association with a right-sided L5-S1 disc prolapse and that surgery had been only partially successful. He considered the plaintiff was not fit for pre-injury duties and that he would not be fit for duties in the future which required heavy physical, manual handling. At that stage, he thought the plaintiff was fit to return to work three hours per day, three days a week, in administration type duties.
48 Mr Michael Dooley, orthopaedic surgeon, re-examined the plaintiff on 21 August 2009, having initially seen him in August 2008. On the recent examination, he thought that the plaintiff had a moderate loss of lumbar spine function as a result of the work related accident which would persist for the foreseeable future.
49 He thought the plaintiff was unfit to perform heavy physical work or work involving a lot of bending or lifting. He thought the plaintiff was capable of carrying out light physical work such as his present job.
50 Mr Dooley considered the plaintiff sustained a right sided lumbar sacral disc prolapse in the incident. He thought the plaintiff did not require formal ongoing conservative measures and there would be no indication for further operative treatment.
51 Mr Daryl Nye, neurosurgeon, examined the plaintiff on 17 February 2009. He concluded that in the incident the plaintiff suffered aggravation of probable pre-existing lumbosacral disc degeneration with precipitation of disc prolapse and development of S1 radiculopathy, and that a partial response to surgery had occurred. He thought the plaintiff’s condition had stabilised.
52 Dr Edward Cole, psychiatrist, examined the plaintiff in November 2007. He then thought the plaintiff was suffering from a Chronic Adjustment Disorder with Mixed Anxiety and Depressed Mood, which had at least been aggravated by his back injury and the conduct of his employer after the plaintiff resumed work.
53 Dr Kalnins, psychiatrist, examined the plaintiff at the request of QBE Workers Compensation Insurance on 14 November 2008. He thought, from a psychological perspective, the plaintiff was fit for his pre-injury duties, although he noted some conflict at the time of the plaintiff’s return to work. He considered the plaintiff could be diagnostically described as suffering from depression.
The defendant’s evidence
54 NES Vocational Assessment provided a report of 22 September 2008 setting out the plaintiff’s suitability for employment as an occupational health and safety officer, safety inspector and training officer. It was recommended at that time that the plaintiff participate in a vocational re-education assessment to determine his suitability for further training in that regard.
55 The salary for those positions was $66,196 for an occupational health and safety officer, $83,876 for a safety inspector and $60,580 for a training officer.
56 The vocational and re-education report of CRS set out the details of the Certificate III in Occupational Health and Safety commencing on 9 October 2008.
57 Nicole Harris, General Manager, Human Resources, employed by the defendant swore an affidavit on 6 April 2010. She described the bonus incentive scheme (“the scheme”) which provided eighty per cent of the bonuses achievable from individual store performance and twenty per cent achievable from the collective performance of the defendant.
58 The two most recent individuals employed as manager at the store had not participated in the scheme due to performance and disciplinary reasons.
59 In the financial year ending 30 June 2009, such a manager would have had the potential to earn a bonus of up to $23,400, representing forty per cent of the gross base salary payable for that position.
60 In accordance with the scheme, eighty per cent of the bonus payable to the manager of the store was based on the specific performance of that store. That equated to $18,720. That sum could be further broken down to take into account sales, growth profit, wage expenditure, staff engagement and retention and occupational health and safety lost time. The entire sixteen per cent of each specific target provided for the above categories was payable if that specific target was met. If it was not met, then none of that component of the bonus attributed to that specific target was payable.
61 Having reviewed the financial performance of the store for the financial year ending June 2009, the store manager would have been entitled to the following bonus payments – gross profit, wage expenditure, occupational health and safety and lost time injuries, each of $3,744, making a total of $11,232. Based on the financial performance of the store for that financial year, the component of the bonus attributable to sales growth would not have been payable.
62 Entitlement to the staff engagement and retention component of the bonus was assessed in accordance with a twelve question staff engagement survey. The survey is rated out of five and the average target score is four. If the store manager had met this target, he would have been entitled to a bonus payment of $3,744. If that target was not met, no bonus would have been payable.
63 In that financial year 2008/9, the defendant failed to meet its collective store performance requirement and that twenty per cent of the bonus was not paid pursuant to the scheme. The total amount payable to the manager at the store based on the overall performance of the store in that financial year according to the scheme would have been $11,232 with an additional $3,744 if the store manager met the staff engagement and retention target. If that target was met, then the total bonus payable pursuant to the scheme would have been $14,976.
64 In his first affidavit sworn on 31 March 2010, Mr Fisher deposed that effectively, as of 1 July 2009, the gross base salary of the manager at the store was $58,500. Effective that date, that manager had the potential to earn a bonus of up to thirty per cent of their base salary provided specific goals were met.
65 In the financial years ending June 30 2008 and 2009, the company failed to meet the collective store performance requirements and the twenty per cent component of the bonus was not paid.
66 In his further affidavit sworn on 15 April 2010, Mr Fisher deposed that in the financial year ending 30 June 2007, the manager at the store had the potential to earn up to sixty per cent of the gross base salary pursuant to the scheme. Based on the overall performance of the Merbein store in that financial year, he estimated the amount payable to the store manager in accordance with the scheme would have been $10,833 (which was in fact what the plaintiff was paid on a pro rata basis).
67 Mr Fisher deposed that in the financial year ending 30 June 2008, the store manager had the potential to earn up to sixty per cent of the gross base salary pursuant to the scheme. Based on the overall performance of the store in that year, he estimated the amount payable in accordance with the scheme would have been $29,000. The current gross base salary for the manager at the store is $58,500.
Summary of base salary of bonus payments to the manager of the store
Year Ending Gross Annual Earnings
30 June 2004 Base rate $44,638 plus bonus $26,782.80 - Total $71,421 30 June 2005 Base rate $53,654 plus bonus $32,192.40 - Total $85,846 30 June 2006 Base rate $55,000 plus bonus $33,000.00 – Total $88,000 Injury occurred on 6 September 2006 30 June 2007 Base rate $57,200 plus bonus $10,833.00 – Total $68,033 30 June 2008 Base rate $58,000 plus bonus $29,000.00 - Total $87,000 30 June 2009 Base rate $58,000 plus bonus $14,976.00 - Total $72,976 6 September 2009 Base rate $58,500 plus maximum bonus $17,550- Total
$76,05068 The plaintiff agreed that prior to the incident and in the year thereafter he was paid the salary and bonus set out in this table.
Overview
69 The issue in this case is what is the appropriate “without injury” earnings figure.
70 Pursuant to Section 38(f) of the Act, I am required to measure that figure by comparing the gross income from personal exertion which the plaintiff is earning, or is capable of earning, in suitable employment as at the date of hearing with the gross income that the plaintiff was earning, or was capable of earning, from personal exertion during that part of the period within three years before and three years after the injury as most fairly reflects the worker’s earning capacity had the injury not occurred.
71 In both cases, the income is limited to gross income from personal exertion and is to be annualised: see Hayhill Pty Ltd v Hodge [2006] VSCA 194, per Chernov, Nettle and Redlich JJA.
72 Based on the after earnings figure of $49,000 being the plaintiff’s current base salary of $47,000 plus potential bonus of $2,000, the plaintiff must show that he does not have the capacity on a permanent basis to earn at least $82,000.
73 Counsel for the plaintiff submitted that the highest figures namely the plaintiff’s earnings in the three years before the incident should be relied upon and on that basis the plaintiff had suffered the requisite loss.
74 Further, if the normal bonus was allowed in the year following the incident, rather than $9,000, again there was the requisite loss. It was submitted that the actual low bonus paid reflected problems with the store due to the plaintiff’s lack of involvement because of his injury and should not be taken into account.
75 It was submitted that it was only in the two years thereafter, when the same level of bonus was not available that the plaintiff would not have suffered the requisite loss and those years should not be taken into account because the plaintiff would have left the job had the bonus been reduced as it later was.
76 Counsel for the defendant submitted the figures at the end of the six year period, which in fact were the lowest figures, were the correct figures as they were the figures closest in time to his current earning capacity.
77 It was also submitted by counsel for the defendant that the plaintiff had not established the requisite loss as if he obtained work in the O, H&S field in which he had recently qualified as employment in this field would attract an income in excess of the threshold figure of $82,000 as set out in the vocational report of NES dated 22 September 2008 with a safety inspector earning $83,876 per annum.
Findings
78 I find that the figure which most fairly reflects the plaintiff’s earning capacity but for injury is the amount of gross earnings in the year preceding the accident – an amount which had increased over the previous two years, including the year when the plaintiff was IGA manager of the year in 2005.
79 It is not relevant to consider the reduced bonus received in a year in which I accept the plaintiff due to his injuries had a much lesser involvement in the store as a result of which there were problems in its management. Taking into account the $9,000 bonus actually received in this period is clearly looking at earnings with injury which is not the proper analysis.
80 Nor is the correct approach to allow a slightly larger bonus than actually received such as $15,000 to $20,000 as suggested by counsel for the defendant rather than the full entitlement which I accept was in the range of $30,000.
81 I do not accept the submission by counsel for the defendant that the last two years should be taken into account when a lesser bonus was in fact available. If that approach was taken the without injury earnings figure would be $72,000 and, accordingly, the present earnings of $49,000 did not result in the requisite loss of earning capacity.
82 In any event, I accept that the plaintiff’s evidence, despite the benefits extended to him in terms of paying certain expenses by the defendant, that he would have left this employ if such reductions in bonus had taken place.
83 Only the job of government safety inspector would defeat the plaintiff’s claim. Having applied for a job in this field and also participated in job club, the plaintiff explained that there are very limited jobs in the local area. Whilst capacity to work is the relevant consideration when considering whether or not that work is available, as Phillips JA for the Court in Barwon Spinners held, at para 25, “employment will not be regarded as suitable if it is too far from a workers place of residence”.
84 Taking into account all the evidence, I am satisfied the plaintiff has a permanent loss of earning capacity of forty per cent or more.
85 I am also required to consider issues of rehabilitation and retraining pursuant to subsection (g). No submissions were made by either counsel in this regard.
86 Given the nature of the plaintiff’s back condition, his work background and the medical opinion as to his accident related restrictions, I am satisfied that there is no rehabilitation or retraining that would be appropriate to be undertaken by the plaintiff which would alter the situation that he has a permanent loss of earning capacity of forty per cent or more. As rehabilitation and retraining have to nothing to offer the plaintiff in terms of his capacity for employment, the plaintiff has satisfied the requirement of section 134AB(38)(g).
87 Accordingly, I grant leave to the plaintiff to bring proceedings for damages for loss of earning capacity.
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