Roleff v Chubb Insurance Co of Australia Pty Ltd
[2011] VSCA 21
•9 February 2011
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No S APCI 2010 0022
| MICHAEL ROLEFF | |
| Appellant | |
| v | |
| CHUBB INSURANCE COMPANY OF AUSTRALIA PTY LTD (ACN 003 710 647) | Respondent |
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JUDGES: | ASHLEY and TATE JJA and HARGRAVE AJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 1 February 2011 | |
DATE OF JUDGMENT: | 9 February 2011 | |
MEDIUM NEUTRAL CITATION: | [2011] VSCA 21 | |
JUDGMENT APPEALED FROM: | Roleff v Chubb Insurance Company of Australia P/L (Unreported, County Court of Victoria, Judge Bowman, 17 February 2010) | |
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ACCIDENT COMPENSATION – Application for leave to bring proceeding claiming damages for loss of earning capacity and pain and suffering – Section 134AB(38)(e) and (f), Accident Compensation Act 1958 – Whether appellant permitted to index ‘without injury’ earnings to time of hearing s 134AB(16)(b) application – Possible relevance of earnings of comparable workers outside ‘window’ period – Appeal dismissed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr S R McCredie | Lennon Mazzeo |
| For the Respondent | Mr M F Wheelahan SC and Mr J P Gorton | Thomsons Lawyers` |
ASHLEY JA:
Michael Roleff was employed as the manager of a newly-established section of the insurance business of Chubb Insurance Company of Australia Pty Ltd between January 1999 and December 2001.[1] He made application under s 134AB(16)(b) of the Accident Compensation Act 1985 (‘the Act’) for leave to bring a proceeding for damages in respect of psychiatric injury allegedly sustained by him in that employment by reason of stresses to which it exposed him. His application for leave to bring a proceeding was in respect of damages for both pain and suffering and loss of earning capacity.
[1]In fact, his contract of employment ended in June 2002, but he last worked on 21 December 2001.
The application was heard by a County Court judge on 6, 9, 10 and 11 November 2009. The applicant and five other witnesses gave viva voce evidence – the others being his wife, three doctors and a psychologist. Other than that, documentary evidence was adduced.
On 9 November his Honour made a ruling, the effect of which impacted upon his final decision.
On 17 February 2010 his Honour dismissed the application.
Now Mr Roleff appeals, having obtained on 20 May 2010 an order extending time to appeal. His counsel submitted that this Court should decide his application for itself – vide s 134 AD of the Act, repealed by Act No 9/2010 – and that it should determine that he sustained compensable injury, serious both in its pain and suffering and loss of earning capacity consequences.
Questions raised by the appeal
Two questions were posed for this Court’s consideration. First, did the repealed s 134AD apply to this appeal? Second, whether or not it did so, should the appeal succeed?
Because the approach to an appeal governed by s 134AD of the Act is not the same as the approach to an appeal to which s 74(3) of the County Court Act 1958 applies,[2] a different result might obtain in some appeals depending upon the governing provision. But in my view, for reasons which I will explain, that is not the situation in the present case. For that reason, it is unnecessary to decide whether, as both parties contended was the situation, s 134AD had application. Refraining from deciding that question – because it is unnecessary – has the added advantage that the Court is not required to decide it in the absence of a contradictor.
[2]Compare Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 with Kelso v Tatiara Meat Co Pty Ltd [2007] VSCA 267.
Matters conceded and agreed
A number of matters were conceded or agreed below. Thus – (1) the appellant conceded that if his claim in respect of loss of earning capacity consequences failed, then his claim in respect of pain and suffering consequences must also do so; (2) the respondent conceded that the appellant had sustained compensable psychiatric injury in his employment by it. (The injury was perhaps best summarised, the judge concluded, as ‘a chronic adjustment disorder with mixed anxiety and depressed mood’); (3) it was agreed that the ‘base figure for the purposes of calculating the [appellant’s] “without injury” earnings was $136,017.96, this figure relating to the financial year ending 30 June 2001’; (4) it was agreed that the appellant’s ‘after injury’ earnings were $88,975.28 per annum.[3]
[3]The judge acted upon that figure, though noting that ‘There may well be argument as to whether or not this represented the applicant’s entire earning capacity’: [2010] VCC 42 [49].
It was common ground that, whether or not the appeal was governed by s 134AD, there was no occasion to depart the matters conceded or agreed.
Resolution of the appeal
Applying s 134AB(38)(f), comparison between $136,017.96 and $88,975.28 did not yield the minimum 40 per cent differential specified by s 134AB(38)(e)(i) of the Act. So, unless the $136,017.96 could somehow be increased, the appellant necessarily failed in his application so far as it related to pecuniary loss damages. He failed regardless whether the consequences of his compensable injury satisfied s 134AB(38)(d). Given such failure, his claim in respect of pain and suffering consequences, by reason of the concession made, must also have failed.
Appellant’s counsel argued below that the figure of $136,017.96 should be increased. Largely, argument turned on a construction of s 134AB(38)(e) and (f) which the judge rejected.
Counsel further argued that there was evidence justifying a conclusion that the figure should be increased in the particular case. The judge rejected the argument.
In the event it was unnecessary for his Honour to consider several antecedent questions – whether the consequences of compensable injury satisfied s 134AB(38)(d);[4] and whether they were permanent as required by the definition of ‘serious injury’ in s 134AB(37) of the Act. Neither was it necessary for his Honour to decide whether a financial loss of 40 per cent or more would be permanent: vide s 134AB(38)(e)(ii).
[4]A matter apparently not raised for his Honour’s consideration.
The determination of questions concerning the proper construction of s 134AB(38)(e) and (f) does not depend upon whether the appeal is governed by s 134AD or s 74 of the County Court Act1958.
Resolution of the question whether the appellant established, upon the evidence, that his ‘without injury’ earnings exceeded his ‘after injury’ earnings by 40 per cent or more does involve a different exercise under s 134AD on the one hand and s 74(3) of the County Court Act 1958 on the other. But in my opinion the answer to that question in the present case could be no different regardless which provision governed the appeal.
The appellant’s statutory construction argument
Section 134AB(38) reads relevantly as follows:
(38)For the purposes of the assessment of serious injury in accordance with subsections (16) and (19)—
…
(e)where a worker relies upon paragraph (a), (b) or (c) of the definition of serious injury in subsection (37), the Authority or self-insurer shall not grant a certificate under subsection (16)(a) and a court shall not grant leave under subsection (16)(b) on the basis that the worker has established the loss of earning capacity required by paragraph (b) unless the worker establishes in addition to the requirements of paragraph (c) or (d), as the case may be, that—
(i)at the date of a decision under subsection (16)(a) or at the date of the hearing of an application under subsection (16)(b), the worker has a loss of earning capacity of 40 per centum or more, measured (except in the case of a worker referred to in section 5A(7) or a worker under the age of 26 years at the date of the injury) as set out in paragraph (f); and
(ii)the worker (including a worker referred to in section 5A(7) or a worker under the age of 26 years at the date of the injury) will after the date of the decision or of the hearing continue permanently to have a loss of earning capacity which will be productive of financial loss of 40 per centum or more;
(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 capable of earning in suitable employment as at that date and 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.
In his ruling of 9 November 2009, the judge said this about arguments raised for the appellant:
2[Counsel for] the plaintiff, whilst not disputing that the plaintiff has the burden of proof in relation to obtaining leave to issue proceedings for pecuniary loss damages, has urged upon me a particular interpretation of s.134AB(38)(f). His interpretation is opposed by [counsel]for the defendant.
3The interpretation for which [plaintiff’s counsel] argues would permit the plaintiff in establishing ‘without injury earnings’, to employ the language used in Barwon Spinners v Poljak and other cases (2005) 14 VR 622, … effectively to index the plaintiff’s earnings to the present date. In other words, the plaintiff, who was injured in late 2001 in his occupation as an insurance executive, could apply average wage increases or consumer price index increases from that date of injury through to now so as to establish the appropriate comparator.
4The converse approach is that the six-year window contained in s.134AB(38)(f) means that the plaintiff is confined to the period of three years before and three years after the injury in nominating the partial period which most fairly reflects his earning capacity had the injury not occurred.
5[Plaintiff’s counsel] has pointed to the unfairness of comparing the plaintiff’s current after-injury earnings with earnings limited to a six-year window that, in a case such as this, is some five years out of date. He has referred to comparing apples with apples. That some unfairness may result from the operation of s.134AB(38)(f) may be undeniable. However, the fact of the matter is that a comparison of after-injury earnings as at the hearing date with a selected period within the overall period of three years before the injury and three years after the injury is what the legislation requires.
6If, initially, there was any confusion as to the meaning of s.134AB(38)(f) – admittedly not the simplest provision to understand at first blush – that confusion has long since been removed by the Court of Appeal. Firstly, in Barwon Spinners, Phillips JA stated as follows:
‘It requires a comparison of two things which may be called, shortly, after-injury earnings and without-injury earnings. The first is described as “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 the date” [being the date of the hearing of the application before the court] and the second, as “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 … had the injury not occurred”.
The latter, without-injury earnings, are to be calculated by reference to “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 there been no injury. The court is therefore required to go well beyond actual pre-injury earnings and consider (on the hypothesis that the worker was and remained free of the compensable injury at base) both earnings and capacity to earn during that portion of the six years marked out “as most fairly reflects the worker’s earning capacity”. As it stands, that task is not inconsiderable.’
7In Hayhill Pty Ltd & Ors v Hodge (2006) VSCA 194, the operation of the subsection is again clearly spelt out. Reference is made to the decision in Barwon Spinners and then the specific operation of s.134AB(38)(f) considered. The plaintiff’s injury occurred on 28 March 2000. Post-accident for the year ending 30 June 2001 and 30 June 2002, the plaintiff had been in receipt of weekly payments of compensation and was not in actual active employment. Thereafter he returned to gainful employment and figures up to 30 June 2005 had been put before the court. These included earnings of workers performing comparable work. The judge at first instance deleted the two-year post-accident period where the plaintiff’s earnings were nil and approached the six-year window as at least including the year ending 30 June 2005. The Court of Appeal stated that:
‘Unfortunately, there are a number of inconsistencies in that section of the judge's reasoning with the effect of s.138AB(38)(f) and the decision in Barwon Spinners.
To begin with, there is the judge's reference in paragraph 20 of his reasons to the salaries which were being earned by truck drivers as at the time of the hearing. As has been seen, s.134AB(38)(f) 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. It seems to us, however, that whatever truck drivers may have been earning more than five years after the accident was irrelevant to these calculations unless it were to be used as a basis from which to infer the amount that the respondent might have been capable of earning in the three years following the accident, and it is plain that that is not the way in which the judge applied it. Secondly, and for the same reasons, the comparison undertaken in the first sentence of paragraph 23 of the reasons – between what other truck drivers were earning as at the end of 2005 and what the plaintiff returned as his income for the year ended 30 June 2005 – was irrelevant.
8 Later on in the same judgment it is said:
‘In the third place, the statement in the third sentence of paragraph 23 of the reasons – that "the legislation refers to a comparison of earning three years prior to the injury and then three years post injury" – is not to be found in the legislation. As has been noted, it calls for a comparison of the respondent's after injury earning capacity with his without injury earning capacity, as described.
The same error is repeated two sentences later with the statement that "a strict application of the three-year prior/post injury earnings only allows for a comparison to be made in respect of one year of post-injury earning", and in turn that leads to the comparison of earnings for the two years before the accident and the two years following the accident which is set out in the latter part of paragraph 23 of the reasons.
Finally, and consequently, it is plain that the conclusion expressed in the last sentence of paragraph 23 of the reasons is misplaced. We consider that it is simply not apparent that if "one deletes the two years in which the plaintiff returned nil income from personal exertion and takes into account his actual earnings in the period of three years post injury it is clear that he meets the 40% impairment of earning capacity".
In short, it cannot be known whether the respondent meets the 40% impairment requirement test until and unless one has carried out the comparison required by s.134AB(38)(f) of the respondent's after injury earning capacity with his without injury earning capacity determined as described. That comparison, however, was not undertaken in this case.’
9I might say that it seems to me that, for the purposes of the present case, the clear statements in that appeal about the earnings of the respondent or the earnings of truck drivers employed in comparable work more than five years after the accident being irrelevant sets out the law on how the section is to operate with considerable clarity.
10Thus, the situation seems to me to be clear. What the Court of Appeal has said on two occasions seems to me to be clear. Projected earnings of an injured worker or workers performing comparable work beyond the six-year window, closing three years after the date of the injury, are irrelevant other than for the possible purpose of inferring what might have been earned within the window period. As I understand it, that is not what I am being asked to do here.
11In any event, I reject [counsel’s] submissions. In my view, the correct interpretation of the comparison to be made pursuant to s.134AB(38)(f) is as stated in Barwon Spinners and Hayhill. The plaintiff’s after injury earnings and his capacity in this regard are to be calculated as at the date of hearing. They are then to be compared with the without injury earnings or capacity to earn during the portion of the six years pre and post-injury period as most fairly reflects the worker’s earning capacity. As in Hayhill, that window closes three years after the injury and subsequent earnings or capacity are largely irrelevant.
In his reasons for judgment, the judge said this –
54.Accordingly, if the plaintiff is to succeed, his ‘without injury’ earnings must be greater than the maximum figure which it is agreed that he earned prior to injury, and greater than those contained in the budget estimate, even assuming that such estimate was applicable. This can only be achieved by indexation, and, as conceded by [his counsel], only if such indexation was carried out in accordance with Average Weekly Earnings. Increases calculated in accordance with the Consumer Price Index and then translated into ‘without injury’ earnings would still leave the plaintiff marginally short of
satisfying the statutory requirements.
….
56There is nothing in s.134AB(38) which mandates indexation either by way of Average Weekly Earnings or by the use of the Consumer Price Index. In particular, there is no reference to the use of indexation in relation to ‘without injury’ earnings during the six year window. ‘Without injury’ earnings are to be calculated by ascertaining the gross income which the relevant worker was earning, was capable of earning, or would have been capable of earning during that part of the window period which most fairly reflects the worker’s earning capacity had the injury not occurred. This assessment is made on the basis of the evidence available and it was not suggested that the onus in this regard lies anywhere other than on the plaintiff.
….
58The situation concerning indexation and s.134AB is to be contrasted with that which prevails in relation to statutory benefits. Section 100 of the Act deals with the indexation of such benefits and the formulae to be applied. No such provisions are to be found in relation to s.134AB.
59I do not accept the arguments of [plaintiff’s counsel] in relation to a type of ‘broad brush’ approach which should be adopted in relation to average weekly earnings and how they tend to balance out over a period of time. I also do not accept that there exists a type of reverse onus whereby, it having been established that average earnings have increased during the window period, it was then up to the defendant to prove that, effectively, the plaintiff would not have been the recipient of some form of increase. In my view, pursuant to the Act, the burden remains with the plaintiff.
60In summary, I reject the argument that some form of indexation should be applied in this case, and I am certainly not satisfied that the amount of the applicant’s earnings prior to injury should, virtually automatically, be indexed and increased over the following years in accordance with average weekly earnings.
In this Court, appellant’s counsel advanced the following argument: The essential purpose of s 134AB(38)(f) is to establish a framework for comparison of capacities – the capacity that the worker had before injury; and the capacity possessed at the time of a sub-s (16)(a) decision or a sub-s (16)(b) hearing. The task, in the language of the subsection, is one of measurement by comparison. The task first involves establishing the two comparators set out in sub-s (38)(f). The second comparator, ‘without injury earnings’, focuses only upon the six year period identified by the subsection. But like must be compared with like if ‘without injury’ earnings are to ‘fairly reflect the worker’s earning capacity had the injury not occurred’, as subs (38)(f) requires; and so the second comparator must be updated to the time of the sub-s (16)(a) decision or sub-s (16)(b) hearing. True it is that sub-s (38)(f) says nothing to suggest that there should be any such updating. But the subsection does not provide a fixed statutory formula. Further, counsel submitted, the effect of the permitted updating was not to ‘stretch’ the six year window specified by sub-s (38)(f).
It seemed initially that counsel was arguing that the updating exercise was confined to maintaining the dollar value of the second comparator – this protecting a worker where, as often happens, there is a substantial time elapse between injury and sub-s (16) decision or hearing. But later he made it clear that the updating might involve adducing evidence of the earnings of a comparable employee as at date of decision or hearing; and it is commonplace that earnings in particular fields of endeavour do not track movements in the Consumer Price Index (‘CPI’) or in Average Weekly Earnings (‘AWE’).
Counsel denied that his submission involved reading any words into sub-s (38)(f). He made it clear that the provision should not be understood to incorporate a mandatory requirement that ‘without injury earnings’ were to be indexed in line with one or other of the CPI or AWE.
Counsel further submitted that the construction of sub-s (38)(f) upon which the judge acted, and which the respondent supported, was arbitrary, unfair, and such as to lead to absurd results. He gave examples. He referred also to sub-s (38)(e)(ii), and submitted that a worker would be placed in an impossible position if a judge had to compare, into the distant future, ‘without injury’ earnings which were forever fixed and ‘after injury’ earnings which were very likely to increase (at least because of inflation).
I do not doubt that the construction put upon sub-s (38)(f) by the judge below may adversely, and I should say unfairly, affect a worker. That is particularly so where (a) there is a substantial time elapse between the closing of the 6 year window and the date of decision or hearing, and (b) the worker is in employment at the latter time.
I do not doubt, however, that his Honour correctly construed the provision. In short, (a) that is what the provision says; (b) that is what the legislature intended to achieve; (c) that is what this Court has said was achieved; (d) contrary to the appellant’s argument, s 134AB(38)(f) does provide something which, in popular if inexact language, may be described as a statutory formula for determining the necessary, and only, comparators; (e) what may be called the formula says nothing about indexation – by contrast with other provisions in the Act;[5] (f) again contrary to the appellant’s argument, the construction which was contended for in truth sought to ‘stretch’ the six year window; and (g), sub-s (38)(e)(ii) does not advance the appellant’s case.
[5]See sections 100, 100A, 100B, 100C, 100D and 100E.
With respect to propositions (a) and (c) above, I refer to the passages in the decisions of this Court in Barwon Spinners Pty Ltd v Podolak[6] and in Hayhill Pty Ltd v Hodge[7] which the judge below cited in his ruling. Counsel submitted that Hayhill was determined by the respondent’s concession that the judge at first instance had erred. The submission was true as a matter of form, but not as a matter of substance. The Court identified errors, and then noted that respondent’s counsel had correctly conceded that they were errors.
[6](2005) 14 VR 622.
[7][2006] VSCA 194.
Concerning proposition (b), I refer to the Minister’s Second Reading Speech.[8]
[8]Hansard, Assembly, 13 April 2000, p1002–1003.
With respect to proposition (d), it is true that s 134AB(38)(f) does not set out a formula in the way that, for instance, s 98C of the Act does so. There is a degree of flexibility in determining the quantum of the comparators, and the absence of necessary certainty may be said to deprive the subsection of the character of a formula. But the substance of the subsection is to set up a regime which, flexibility aside, results in the determination of two money comparators which provide the necessary and only tools for determining whether there is loss of earning capacity of 40 per cent or more.
Concerning proposition (e), I instance the detailed provisions for variation, so-called, in s 100 of the Act.
I turn to proposition (f). It is really self-evident. The effect of acceptance of the appellant’s submission would be that, in every case, ‘without injury’ earnings would be applied as at date of trial. Whilst counsel contended that acceptance of his argument left the six year window still relevant, I doubt that this would always be so. Using a comparable employee’s earnings at date of decision or hearing as the second comparator would not seem to necessitate making a determination of the second comparator in the six year window period at all.
I turn finally to proposition (g). I accept the submission for the respondent that determination whether a loss of earning capacity of 40 per cent or more will continue permanently requires a comparison as on a common law trial, in which it is proper for the plaintiff to rely upon what he or she would be earning at time of trial. So to conclude is consistent with the text of s 134AB (38)(e), because the task for the purposes of paragraph (i) requires recourse to sub-s (38)(f), whereas there is no such requirement in connection with the application of paragraph (ii).
The relevance of earnings subsequent to the 6 year window
The determination of ‘without injury’ earnings can allow for an increase in the amount last earned by a worker within the three year period after injury. Whether there should be any such increase depends, however, upon the evidence led in a particular case. For the reasons explained in Hayhill, evidence of prospective earnings outside the ‘window’ period may be received if it casts light upon the worker’s likely earnings within that period.
Evidence as to without injury earnings
I noted at [12] that it was contended for the appellant below that there was evidence upon which the judge should conclude that the appellant’s earnings within the window period were likely to have exceeded $136,017.96 by an amount sufficient to yield the necessary 40 per cent differential.
The judge made the following findings:
(1) The appellant’s contract did not provide for any automatic salary
increases, whether in percentage terms, or by reference to increases in
the CPI or in AWE.
(2)There was no comparable employee whose salary in the years after December 2001 was able to provide any guidance as to likely increases in the appellant’s earnings in the relevant period had he remained uninjured.
(3)There was a budgeted increase in the appellant’s salary for 2002. But it was no more than a budgeted item, and in any event, even if implemented it would not have increased the appellant’s ‘without injury’ earnings to an amount which met the 40 per cent threshold.
(4)With respect to evidence of increases in the CPI and in AWE in the period 30 June 2002 to 30 June 2008, only if increases in the AWE were factored in to the figure of $136,017.96 could the 40 per cent threshold have been reached by the end of the three year window which commenced, at latest, in December 2001; that is, factoring in of increases in the CPI would not have produced the result which the appellant required.
His Honour held that the evidence was opposed to a conclusion that the appellant’s earnings in the three years after December 2001 would have increased at all, let alone in accordance with the increase in AWE. In so concluding, he did not only rely upon the findings just noted. This is what he said:
55.There is no satisfactory evidence before me to indicate that the plaintiff’s remuneration package would have increased in accordance with either Average Weekly Earnings or the Consumer Price Index.
61.What s.134AB(38)(e) and (f) require is the assessment of capacity as described above. In my opinion the figure of $136,017.96, being the agreed figure for the 2001 year, is the figure which should be adopted as ‘without injury’ earnings. On the basis of the evidence that has been adduced, it is that year which more (sic) fairly reflects the plaintiff’s capacity had the injury not occurred. I have arrived at this conclusion for the following reasons:
(a)There is no satisfactory evidence that the plaintiff’s earning capacity would have increased beyond that amount. Indeed, the available evidence suggests that he had reached the limit of such capacity, if not gone beyond it. Certainly there is no satisfactory evidence that in the years following 2001 his earnings or earning capacity would have increased. The fact that there exists a budget estimate of somewhat unclear origin and made on a date which is not readily apparent does not mean that the plaintiff’s earnings would have increased in this fashion. Indeed, given the dissatisfaction of management with his performance, such an increase does not seem to have occurred and it strikes me as being highly unlikely that it would have occurred had the plaintiff continued to work for the full financial year. It is also to be remembered that, even if such an increase was allowed and the financial year ending 30 June 2002 selected as being the period which most fairly reflected the plaintiff’s earning capacity had the injury not occurred, he would still fall short of establishing the required 40 per cent reduction in income.
(b)Apart from there being no satisfactory evidence that the plaintiff’s earning capacity would have increased above that which existed in the financial year ending 30 June 2001, the evidence is suggestive of the fact that such year represented the limit of his capacity. The plaintiff was headhunted to perform a particular task and occupy a particular position. I accept that there were demands upon him. After a promising start, difficulties arose.
In April 2000 there were the problems in relation to the policies with franchisees of Jim’s Mowing in South Australia. The plaintiff admits in his affidavit of 31 August 2006 that he erroneously left Baldacchino with the impression that such policies would not be renewed with the defendant and it would be off risk. In fact, he had not organised this, and ultimately failed to contact the relevant broker until after the renewal period, by which time she had rolled over the policies. The plaintiff has stated frankly in this affidavit that: ‘Although I had much work on at the time I had made a mistake and was not proud of my failure’.
At about the same time, a problem arose in relation to a policy underwritten by the plaintiff in respect of accident insurance for a mining consultant. Baldacchino was highly critical of this, informing the plaintiff that the individual risk written was above his authority. He was also critical of the fact that the plaintiff had not supplied a list of the insured’s duties which should have referred to matters such as underground mining work, a risk which had to be carefully underwritten. The mining consultant was seriously injured in a mine collapse, and Baldacchino was critical of the fact that the plaintiff had at no time mentioned or referred to the risk which was involved. Effectively as a result of this, the plaintiff’s authority to underwrite personal accident and sickness business in any form was withdrawn for a minimum of three months. Whilst the plaintiff had an explanation in relation to this incident, the impression which I gained was that he had not performed in accordance with his authority and there is no doubt but that management was highly displeased.
On 5 February 2001 the plaintiff completed a self appraisal, this being Exhibit MR-9A to the affidavit of 31 August 2006. In that he clearly indicated that he did not meet business goals in relation to commission and loss ratio. He gave himself a zero in relation to the item ‘Keypunch loss ratio under 40%’ and, in relation to strategies relating to profit performance, gave himself only a one, the observation opposite this being ‘liaison with Claims department achieved but not often enough and not monitored with regularity’. Thus, the plaintiff himself appears to have been aware of some shortcomings in his performance.
In his email to the plaintiff of 7 June 2000 (Exhibit ‘MR-6’) following the problem with the mining consultant, Baldacchino informed the plaintiff that his behaviour had been unacceptable and that his underwriting attitude must change. Indeed, he went so far as to state that: ‘If any other matter like this occurs your tenure at the company will cease immediately. Personally I believe you can do the job we want you to.’ Some advice followed.
In July 2001 the plaintiff was reprimanded by Baldacchino in respect of a remark made by the plaintiff to the Australian manager at a luncheon. In his affidavit the plaintiff has described the remark as being ‘mildly offensive’, but it resulted in further disciplining.
In August 2001 the plaintiff was in further trouble in relation to policies written for Tasmanian jockeys and harness drivers. In an email from Stephen Warren, the zone manager of the defendant, to Baldacchino, very considerable criticism of what had occurred in relation to the assumption of this risk was conveyed. Mr Warren set out that in the plaintiff’s authority to underwrite business it was specifically stated that professional or semi-professional sports and the like had to be referred to the zone, and this had been ignored. Mr Warren concluded that to say that he was disappointed was a gross understatement and that, if this type of thing happened again, more drastic action would be taken against the people concerned. Baldacchino passed on the Warren email to the plaintiff and included some critical remarks of his own.
Following a meeting in October 2001, arrangements were put in place to monitor the plaintiff’s work. Late in October 2001, he was reprimanded for lateness. Micromanagement of his daily activities was subsequently increased. On 7 November 2001 Michael Collins, another officer of the defendant, sent the plaintiff a copy of an email which, inter alia, stated that: ‘Whilst I wish to work with him in a supportive way I think it is important for Mike Roleff to know that if substantial improvement was not achieved then the outcome would be that he would be dismissed’.
The plaintiff took two weeks leave, which had previously been requested, from 30 November 2001. On that day, Mr Collins forwarded to the plaintiff an email setting out a list of things that were to be done pursuant to the plaintiff’s performance improvement plan. He stated that he did not believe that the plaintiff had implemented what was in an earlier email or followed the timetable contained in it. The email of 30 November 2001 also contained the observation that: ‘This will give you food for thought on your leave period and you may be able to get a head start on some of these tasks so that when you return to work in mid December you can achieve all that we need you to achieve. Failure to achieve these issues in the time frames and quality required will put your employment at risk’.
Following the plaintiff’s leave, he had a further meeting with Mr Collins and Baldacchino. An email of Mr Collins of 21 December 2001 included a summary of things that were said at that meeting, including the fact that Mr Collins’ email of 30 November should be taken very seriously and that, essentially, improvement was required or the plaintiff’s employment was at risk. The conclusion was that Baldacchino and Collins advised the plaintiff that they would meet again in approximately one month to assess the extent of the improvement in his performance and, if it was unsatisfactory, he would no longer be employed. Of course, the plaintiff did not work after 21 December 2001.
I have set these matters out at some length so as to illustrate why I consider it to be highly unlikely that the plaintiff would have earned an increased amount had he remained in employment with the defendant.
It is quite apparent that several of his superiors were displeased with his performance and had been displeased for some time. In those circumstances, it seems to me that the plaintiff’s income for the year ending 30 June 2001 represents the high watermark of his earning capacity during the relevant six year period. That year most fairly reflects his capacity had the injury not occurred. Indeed, it might be said that this may be a somewhat generous approach to take. There is no evidence or suggestion that the plaintiff may have been able to earn a figure in excess of $136,017.96 in some other employment.
Counsel for the appellant argued in this Court that we should reach different conclusions to those reached by the judge (if s 134AD applied); or be satisfied of error (if s 74(3) of the County Court Act applied). He submitted that his client had been head-hunted for the job; and that he had then been made a scapegoat for the failed strategy of the man who had head-hunted him. He argued also that the appellant’s problems at work needed to be understood as the failings of a man affected by compensable injury.
I allow that there may be something to each of those submissions. But I am unable to see that they lead to a conclusion that, the two considerations aside, the appellant’s earnings in the three years after December 2001 were at any time likely to
have reached an amount which gave rise to the necessary 40 per cent differential. All in all, it appears to me that his Honour’s findings were appropriate. If the matter was to be considered in the context of s 134AD, I would make those findings myself. If the matter was to be considered in the context of s 74(3), the findings would plainly survive.
Permanence; and section 134AB(38)(d)
On the view which I take of the matter, the issue of permanence and the question whether the appellant had satisfied s 134AB(38)(d) – the latter of which was apparently not raised below – do not fall for determination.
Order
In my opinion, the appeal should be dismissed.
TATE JA:
I would also dismiss the appeal, for the reasons given by Ashley JA.
HARGRAVE AJA:
I have read the draft reasons prepared by Ashley JA. I agree that, for the reasons he gives, the appeal should be dismissed.
In a case such as the present, where an appellant’s pre-injury employment is unique, some measure of indexation of pre-injury earnings may be appropriate to fairly reflect the appellant’s earning capacity at the end of the six year window. Each case must depend upon on its own facts. In this case, the probabilities did not justify such an approach.
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