Fechner v Yerkovich [1991] QSCFC 118 [1993] 1 Qd R 249

o TRANSCRIPT OF PROCEEDINGS State Reporting Bureau, 4th Floor, The L.aw Courts, George Street, BRISBANE. O. 4000 Tel. (07) 227.4360 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND FULL COURT THOMAS J RYAN J MACKENZIE J No. 24 of 1991 TRACEY DIANE FECHNER (Plaintiff) . Appellant and LUKE YERKOVICH on his own behalf (Defendant) Respondent and on behalf of all other members of the Committee of Management of the Seafarers Centre (Gladstone) as at 17 March and 30 June 1984 | Cay- /a U?CT 1S:M j mm BRISBANE . .DATE 4/10/91 1 [1991] QSCFC 118 -- 1 of 22 -- 041091 D.l JUDGMENT MR JUSTICE THOMAS: In my opinion this appeal should be allowed with costs. The judgment for the defendant should be set aside and in lieu thereof there should be judgement for the plaintiff for $3,000 w.m:i costs on the appropriate District Court scale. I publish my reasons. MR JUSTICE RYAN: I agree with the order proposed and with the reasons of the learned presiding judge. MR JUSTICE MACKENZIE: I agree with the order proposed. I publish my reasons. MR JUSTICE THOMAS: The order will be that which I have indicated. MR JUSTICE RYAN: I should add, I agree also with the reasons of my brother Mackenzie. Govt. Printer, Q!d. 1 10 20 30 40 50 60 2 -- 2 of 22 -- /" c tiff// % IN THE SUPREME COURT OF QUEENSLAND FULL COURT Before the Full Court Mr. Justice Thomas Mr. Justice Ryan Mr. Justice Mackenzie BETWEEN: Appeal No. 24 of 1991 TRACEY DIANE FECHNER (Plaintiff) Appellant AND: LUKE YERKOVICH on his own behalf and on behalf of all other members of the Committee of Management of the Seafarers Centre (Gladstone) as at 17 March and 30 June 1984 (Defendant) Respondent REASONS FOR JUDGMENT - THOMAS J. Delivered the 4th day of October, 1991. CATCHWORDS: Workers' Compensation - Deduction from judgment for common law damages - Principles upon which court acts - Objective assessment with hindsight of trial findings - Freedman v . Stradbroke (1988) 2 Qd.R. 621, 630 in part disapproved - Alteration of prima facie figure only when discrepancy apparent - Need for robust approach when exercise undertaken. Workers1 Compensation Act s. 9A(1)(a), Schedule 1 cl. 26A. Counsel: S . Keim for appellant G. Gibson Q.C. with M. Grant-Taylor for respondent Solicitors: Mclnnes Wilson and Jensen for appellant O'Shea, Corser and Wadley for respondent Hearing date: 16th September, 1991. -- 3 of 22 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT BETWEEN: Appeal No. 24 of 1991 TRACEY DIANE FECHNER (Plaintiff) Appellant AND: LUKE YERKOVICH on his own behalf and on behalf of all other members of the Committee of Management of the Seafarers Centre (Gladstone) as at 17 March and 30 June 1984 (Defendant) Respondent REASONS FOR JUDGMENT - THOMAS J. Delivered the 4th day of October, 1991. This case is one where an adjustment is necessary to the refund of workers1 compensation upon a judgment for the plaintiff for common law damages. The need to do so in certain cases has recently been recognised ( Freedman v. Stradbroke Ferries Ptv. Ltd. (1988) 2 Qd.R. 621, 629-30; Lausberq v. Burns Philp & Co. (1991) Q.L.R. 27th July, 1991). The principles upon which the court performs such an exercise need some explanation. The plaintiff sued her employer in respect of two incidents at work in March and June 1984. Liability was admitted by the defendant. However the plaintiff fared poorly at trial on the question of damages, as the trial judge was of the view that the damages attributable to her accident were only "a few thousand dollars". The evidence showed that she had a history of back problems at least three years before the -- 4 of 22 -- 2 injuries the subject of the action. She had been paid workers' compensation for an incident in July 1981, and further incidents had produced back problems including an admission to hospital for 10 days in 1982. She did not claim workers' compensation at the time of episodes on which she has now sued but obtained substantial payments at a later time. The plaintiff ceased working for the defendant shortly after the second episode. She did not seek medical treatment on that occasion. However in September 1984 something happened which caused her to consult a doctor and to be admitted to the Gladstone Hospital. The notes of her admission read "Six year history of back pain - two years ago hospitalisation. This the worst episode ever. Has been moving house the last few weeks and sleeping on cold waterbed. Aggravated by driving, sneezing, sitting. Pushed table and (indecipherable). The pain localised right lumbar region ..." Some months later she made an application for workers' compensation. In her statement she mentioned the 1981 incident for which workers' compensation had been paid, and the 1984 incidents and the circumstances of her employment then, pointing out that no claim had been made, and her subsequent hospitalisation in September 1984. She did not mention any incident that was non-work related, such as the event that apparently led to her hospitalisation at that time. Thereafter for a period of nearly two years she received weekly compensation payments and various expenses were paid on her behalf including hospital and medical expenses. The total of the weekly compensation payments and other expenses was $30,364.20. In addition she was paid a permanent partial -- 5 of 22 -- 3 disability settlement of $14,424.00. Thus the total of the benefits paid after 23rd September, 1984 were $44,788.20. When the action commenced counsel for the plaintiff informed His Honour that the permanent partial disability settlement of $14,424.00 was agreed between the parties to relate to the 1981 incident and it was agreed that those moneys were not refundable out of damages in the present action. Although counsel at that stage conceded that "in the event of the plaintiff's success ” the balance of $30,364.00 would be refundable, there is some ambiguity in the notion of "plaintiff's success" in this particular context. I do not think that this concession disqualified the plaintiff from seeking an accurate determination by the court of the amount properly refundable to the Workers' Compensation Board after the announcement of His Honour's findings in the action. In the event His Honour found that the incidents sued upon were transient aggravations of a long-standing back condition. He regarded the consequences of the table-pushing incident in September 1984 and her history thereafter as unrelated to the injuries the subject of her action. His Honour was therefore of the view that the total assessment should be in the region of "a few thousand dollars" and that it was unnecessary to make a specific assessment because the amount that would have to be refunded to the Workers' Compensation Board was greatly in excess of any figure that he would assess. It is inescapable that on His Honour's findings the incidents for which the defendant was responsible did not -- 6 of 22 -- 4 produce any incapacity or render her unfit for work after 21st September, 1984. After publication of His Honour's reasons for judgment, counsel for the plaintiff applied under s. 9A(1) of the Workers' Compensation Acts for His Honour to determine the total amount of compensation described by the Act to be paid with respect to these incidents. In the result His Honour did not make any other determination of that figure than the full amount paid to the plaintiff after 21st September, 1984, (other than the partial disability payments that the parties had originally conceded to be unrelated to the relevant incidents) and on that basis gave judgment for the defendant. I have had the benefit of reading the proposed reasons of Mackenzie J. and I agree with those reasons. I wish however to add the following observations. In the great majority of cases the amount by which the proposed judgment should be reduced will be that which the Board says is the sum paid in respect of the injury in question. There is a persuasive onus on the plaintiff to show that some other sum is the correct sum of compensation attributable to that injury. In the present case the Board's letter did not make any allegation to that effect. It simply set out the sums paid between September 1984 and August 1986. The parties had already turned their minds to the possible excess and had agreed to attribute the partial disability settlement to the earlier workers' compensation claim. In the absence of any other compensable injury after the accident in question, this would in my view prima facie make the full -- 7 of 22 -- 5 amount deductable, but subject of course to the findings in the action. The exercise which the court must perform after reasons for judgment are published is to determine "the total amount of the compensation prescribed by the Act to be made from the fund in respect of the injury in question" (s. 9A(1)(a)). In the light of the decision of the Full Court in Lausberq v ♦ Burns Philp and Co. Ltd, (unreported, 9th November, 1990) that amount must be objectively assessed using the hindsight of the trial. Unless this happens there may be an inconsistency between the basis of the award and the basis upon which the refund is made. An obvious difficulty arises where the worker has misled the Board and has obtained excessive compensation payments on a footing inconsistent with the findings upon which the damages award is based. On the reasoning in Lausberq this is no basis for exception. An objective appraisal of the compensation that ought to have been paid will need to be made by the court, using the same facts as those found in the action. The only remedy of the Board when it has overpaid the worker and when the judge's assessment of a lower sum results in the Board's failing to recoup its full compensation payments out of the damages, is to make a claim under cl. 26A of the First Schedule to the Act. This allows the recovery of compensation where a worker receives "payment by way of compensation in excess of the payment to which he was entitled under this Act". It also needs to be recognised that this approach is in part inconsistent with that proposed in Freedman v. Stradbroke -- 8 of 22 -- 6 Ferries Ptv. Ltd. (1988) 2 Qd.R. 621, 629-630, where I endeavoured to limit the occasions when the court should embark upon this further exercise of assessment. It was there suggested that where a worker claims in respect of an injury causing aggravation of an earlier compensable condition, the earlier compensation rights become merged in the later compensation claim, and that in such cases it is impossible to separate out the compensation attributable to the respective incidents. On that basis the plaintiff would have to suffer the full reduction which the Board alleged to be attributable to the latter claim. I do not think that that view can stand with the views expressed in Lausberq and in the present case. Difficulties may be foreseen in the application of trial findings that a plaintiff was fit to return to work and should have returned to work before the end of the period for which he received weekly compensation; or that the aggravating incident upon which the plaintiff sues has ceased to play any role after a certain date when the worker was still receiving compensation. In such cases compensation will have been paid for a longer period than the trial judge considers appropriate in the assessment of damages, and adjustments will be required to the compensation deduction. It would however be undesirable that the courts be required to engage in refined exercises such as applying possibilities and hypothetical scenarios to the exercise that determines the "workers' compensation prescribed". The present case is a clear case where the judge's findings indicate the entitlement to compensation paid after September -- 9 of 22 -- 7 1984 to be nil. The plaintiff would no doubt have been entitled to receive a small amount of workers 1 compensation had she ceased work at the time, but no claim was made and it is in any event uncertain whether her wages remained unpaid in respect of any period when she stayed home after the incidents in question. It is impossible to make any objective conversion of the findings of fact in an action for damages to the determination of the amount prescribed to be paid, when no application for compensation is made, and the worker's history proceeded in a different course than it otherwise would. It is necessary that the exercise of assessing "prescribed compensation" at the end of trial be performed in a robust way. Some analogy might be drawn with the exercise of the jurisdiction to assess interest in personal injury claims (cf. Fire and All Risks Insurance Co. Ltd, v. Callinan (1978) 140 C.L.R. 427, 432-433, affirming Callinan v. Borovina (1977) Qd.R. 366). Douglas J. there remarked: "There will be an infinite variety of cases. Fortunately the authorities indicate that a robust rather than a refined approach is the norm." His Honour cited the authorities, including Herring C.J. in Murphy v. Murphy (1963) V.R. 610, 614; and Smith J. in Pi Nitis v. Seekts (1962) V.R. 417: "I think it is reasonably clear that the legislation was intended to enable the matter to be dealt with in quite a broad way if the court felt disposed to do that." The court will alter the prima facie amount only when there is clearly a discrepancy between the basis of the award and the basis of the compensation payments. Sometimes the court will have to apply its own broad view of the degree of -- 10 of 22 -- 8 the discrepancy. As in assessments of interest, this Court will not lightly interfere with the primary court's exercise of the discretion. In the present case this Court should assess damages, along the lines drawn by the learned trial judge, at $3,000.00. It should assess the prescribed compensation "in respect of the injury in question" at nil . The appeal should be allowed with costs. The judgment for the defendant should be set aside and in lieu thereof there should be judgment for the plaintiff for $3,000.00 with costs on the appropriate District Court scale. -- 11 of 22 -- r c ‘ 7// //^ IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No. 24 of 1991 Before the Full Court Mr. Justice Thomas Mr. Justice Ryan Mr. Justice Mackenzie BETWEEN : TRACEY DIANE FECHNER (Plaintiff) AND: LUKE YERKOVICH on his own behalf and on behalf of all other members of the Committee of Management of the Seafarers Centre (Gladstone) as at 17 March and 30 June 1984 (Defendant) JUDGMENT - MACKENZIE J. Delivered the 4th day of October, 1991. Counsel: Mr. S. Keim for Appellant. Mr. G. Gibson Q.C. and M. Grant-Taylor for Respondent . Solicitors: Mclnnes Wilson & Jensen for Appellant. O'Shea Corser & Wadley for Respondent. Hearing date: 16th September, 1991. Appellant Respondent -- 12 of 22 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT Appeal No. 24 of 1991 BETWEEN: TRACEY DIANE FECHNER (Plaintiff) Appellant AND: LUKE YERKOVICH on his own behalf and on behalf of all other members of the Committee of Management of the Seafarers Centre (Gladstone) as at 17 March and 30 June 1984 (Defendant) Respondent JUDGMENT - MACKENZIE J. Delivered the 4th day of October, 1991. The appellant claims damages for negligence against her former employer in respect of two injuries which occurred at her place of work on the 17th March, 1984 and the 30th June, 1984 respectively. At that time she had a pre-existing back condition one factor in which was a work-related injury that had occurred in 1981 . The first of the 1984 injuries was alleged to have occurred when she was working as a barmaid in a club at Gladstone. She gave evidence that she suffered pain after lifting a carton of beer. She believed that she had consulted a doctor the following day and had got a prescription for painkillers. She said that she did not work the next day because she either had the day off or had switched shifts with somebody. She was off work for seven to ten days as a result of the incident. When she returned she -- 13 of 22 -- 2 was put in a lounge bar where "nobody drank" and the pain eventually went away before the second incident occurred. The second of the 1984 injuries also occurred at the club when she was lifting a carton of beer. She said that she continued to work the remaining half hour or so of her shift although she was in pain. Upon going home she told her husband what had happened and he advised her to give up work. Later that evening they went to the club where the plaintiff advised the manager of her intention to resign. He suggested that she take a few weeks off and that her job would be there for her but she never returned to work. She did not seek medical treatment after that incident until mid-September 1984 and did not make a claim for workers' compensation until December 1984. Exhibit 14 shows that it was treated as a re-opening of the claim for the 1981 injury and that payments commenced on 21st September, 1984. There is some discussion in the transcript at pp. 69 and 70 as to whether she had applied for a reopening of her 1981 claim but I am left with the clear impression that the re-opening of that claim was an administrative decision by the Workers' Compensation Board (which may well have been appropriate on the fact supplied to it) rather than a choice on the part of the plaintiff. There was also evidence that the plaintiff had told someone at the hospital in September 1984 that she had hurt her back pushing a table. In the event the learned District Court Judge was satisfied on the balance of probabilities that the back pain in September 1984 was not due to the incident on the 30th June, 1984. He went on to find that she had not established to the -- 14 of 22 -- 3 requisite standard that either of the incidents in 1984 had caused her significant injury. However he did find that the plaintiff suffered some aggravation of her pre-1984 back condition whilst she was working on the 30th June, 1984 but was not satisfied that that incident or the one on the 17th March, 1984 gave rise to the consequences for which the plaintiff contended. He summarised his view of the two 1984 injuries in the following passage: "I am of the view that the incident on 30th June, 1984 and for that matter the earlier incident on 17th March, 1984 were, on the evidence, no more than slight aggravations to the plaintiff's pre-existing spondylolisthesis and accordingly attract no more than a few thousand dollars by way of damages for pain and suffering. It is unnecessary in the circumstances to more precisely quantify the plaintiff's loss. She is obviously not entitled on this conclusion to damages under the various other heads for which she claims and as I have said the sum of $30,364.20 is in any event refundable to the Workers ' Compensation Board of Queensland." There is no appeal against the learned trial Judge's findings of fact. However the complaint underlying the grounds of appeal is in relation to his failure to assess the plaintiff's damages and in relation to his expression of opinion that because the amount of workers' compensation payments would exceed the amount of damages it was unnecessary for him to proceed to that assessment. Upon his reasons for judgment being published, the learned District Court Judge was referred to the decision of the Full Court in Lausberq v. Burns Philp & Company Limited (unreported) 9th November, 1990, which had been delivered after the hearing but before judgment was delivered, but His Honour declined to assess damages. It was submitted by Mr. Keim in -- 15 of 22 -- 4 reliance on that authority that the learned District Court Judge should have: (a) quantified the damages to which, on his findings, the plaintiff was entitled; (b) made a precise finding as to the amount of workers' compensation benefits that were to be paid from the Fund in accordance with the Workers' Compensation Act in respect of the injuries that were compensable; and, (c) subtracted the second sum from the first to achieve the amount to which the plaintiff was entitled. It is convenient at this point to dispose of a submission made on behalf of the respondent that the plaintiff was estopped from raising this matter on appeal. Mr. Keim for the plaintiff had early in the trial tendered by consent a letter from the Workers' Compensation Board dated the 4th January, 1990 referring to the amount that had been paid by the Workers' Compensation Board to the plaintiff. He informed the learned District Court Judge that by agreement the amount that was refundable to the Board "in the event of a successful action" was $30,364.20 and His Honour was clearly left with the impression, from what he said, that that agreement was contingent on the plaintiff's success in the action. In my opinion the exchange recorded at pp. 5 and 6 of the transcript was intended to convey no more than that in the event that the plaintiff established that the injuries that she had suffered on the 17th March, 1984 and the 30th June, 1984 had caused the consequences for which she contended, that sum was the amount that had been paid by the Board in accordance with the Act -- 16 of 22 -- 5 in respect of those injuries. As it turned out the learned trial Judge found that this proposition was not established although there were minor aggravations of the extent described above as a result of those incidents. I conclude that this submission by the respondent should be rejected. In Lausberq v. Burns Philp & Company Limited (supra) the plaintiff had received weekly workers' compensation payments in respect of two periods of incapacity. The first period was of a few days duration and gave rise to an independent common law liability on the part of the plaintiff's employer. The second was for a period of. almost two months. The findings of fact at trial were that this second period of incapacity was not attributable to the initial injury and that past economic loss was limited to the period when the plaintiff was absent from work following the first incident. The question arose as to what reduction should be made in the damages payable to the plaintiff by reason of s. 9A of the Workers' Compensation Act 1916-1990. The trial Judge deducted the whole sum paid by the Workers' Compensation Board to the plaintiff from the damages that were assessed. The result was that instead of $204.80, representing payments for the first period of incapacity, being deducted, $3,072.56 was deducted. The Full Court held that only the former sum should have been taken into account . In the words of Ryan J .: "The reduction to be made is the total amount of the compensation prescribed by the Act to be made from the Fund in respect of the injury in question. It is therefore necessary in the first place to ascertain what was the injury which created an obligation in the employer to pay damages, and in respect of which he was entitled to receive compensation. That injury was the injury which the plaintiff sustained in the -- 17 of 22 -- 6 accident. From the damages awarded in respect of that injury it was necessary to deduct the compensation prescribed to be made in respect of that injury. Accordingly, if the compensation deducted was higher than that prescribed, it was not properly deductible to the extent of the excess. Moreover, if compensation was made in respect of some other injury than that which created a legal liability in the employer, such compensation was not deductible under s. 9A. " The last aspect refers to the fact that payments for the second period had not been made for an injury creating legal liability in the employer and were therefore not in contemplation of s. 9A. Section 9A is concerned with the prevention of double payment from the Workers' Compensation Fund. It applies in cases where an injury in respect whereof a worker is entitled to receive compensation was received under circumstances creating also a legal liability in the employer. In such a case two consequences flow. The first is that the amount of damages which the employer is legally liable to pay are to be reduced by the total amount of the compensation prescribed by the Act to be made in respect of the injury in question. The second is that the court by which the damages are awarded is required upon application to determine the total amount of compensation prescribed by the Act that is to be made from the Fund in respect of such injury. It will be noted that the provision is not concerned with what has in fact been paid from the Fund but with what is the amount of compensation prescribed by the Act to be made in respect of the injury in question. (Neoric v. Albion Scrap Steel Ptv. Ltd. (1978) Qd. R. 362; Freedman v. Stradbroke Ferries Ptv. Ltd. (1988) 2 Qd. R. 621 at 629.) That is the sum by which the -- 18 of 22 -- 7 amount of damages is to be reduced. Viewed in this light s. 9A(1)(a) refers to the calculation of that sum in accordance with the Act in the light of the findings of fact at the trial. The fact that such determination is made binding on the Board and the worker carries with it the implication that what the court decides may not coincide with what the worker or the Board respectively thought the entitlement was. The facts are somewhat complex. The claim for workers' compensation was not made until the 3rd December, 1984 although the injury in respect of which the claim was made was said to have occurred in "May/June 1984". The making of the claim had been precipitated by an admission to hospital in mid-September 1984 following which there was medical advice given that an operation was desirable. When the claim was made on the 3rd December, 1984 the Board appears to have accepted it from the 21st September, 1984, treating it as a re-opening of a claim made in 1981 in respect of a compensable back injury. The event which led to the aggravation of the 1981 injury was said to have occurred in "May/June 1984" but the plaintiff's statement of the 3rd December, 1984 (ex. 27) appears to have disavowed an intention to claim in respect of any period prior to the 21st September, 1984. That is consistent with what the Board has done. Further, it has been held by the learned trial Judge that the pain that caused the plaintiff to seek medical assistance in September 1984 was not caused by either of the injuries that had occurred earlier in 1984 (both of which would have been compensable) . -- 19 of 22 -- 8 On the findings of fact made by the learned Judge of District Courts in this case the incidents in March and June 1984 produced only slight aggravations of the plaintiff's existing back condition. There was evidence that she had suffered incapacity in respect of these and that that incapacity would have been compensable under the Workers ' Compensation Act if she had made a claim in respect of such periods of incapacity. However, on the particular facts of the case she should be taken to have abandoned those claims. The further incident, not connected with either of those two incidents which resulted in the visit to the hospital in September and subsequent events, was neither compensable nor the source of a legal liability in the employer. There was no basis upon which s. 9A could therefore operate in respect of the lastmentioned incident. The Workers' Compensation Board has paid $30,364.20 in compensation to the plaintiff in good faith on the basis that her incapacity for work from 21st September, 1984 to 12th August, 1986 was due to a particular compensable injury whereas it has now been established by the findings of the learned trial Judge that such incapacity was due to some other unrelated event. It follows from that that the moneys paid from the 21st September onwards were paid in respect of an injury which neither gave an entitlement to workers' compensation nor to independent common law liability on the part of the plaintiff's employer. Therefore the sum of money is not within the contemplation of s. 9A and cannot be deducted from the damages to which her employer became liable by reason of the findings of the learned trial Judge. In my opinion Lausberq v. Burns Philp & Company Limited (supra) -- 20 of 22 -- 9 governs the matter and unsatisfactory as that result may be from the point of view of proper administration of the Act, it is a result that the section compels. In my opinion the submission on behalf of the appellant is correct in the light of authority and the appeal must be allowed. The remaining question is whether the matter should be remitted to the District Court with a direction that it proceed according to law to assess damages or whether the material before us is sufficient to enable the question of damages to be disposed of by this Court. In view of the cost involved in remitting the matter to the District Court it would obviously be desirable for this Court to do so if possible. The learned trial Judge expressed the view that the slight aggravations to the plaintiff's pre-existing condition would attract "no more than a few thousand dollars by way of damages for pain and suffering". That is clearly correct. With respect to other heads of damages the learned District Court Judge's remarks setting out his conclusions have been quoted above. In view of the evidence that there was some short period of incapacity established by the evidence I do not interpret them as meaning that there was no period of incapacity producing economic loss in respect of the aggravation of the injuries by the incidents of 17th March, 1984 and 30th June, 1984. In my opinion, a sum of $3,000.00 damages is on the evidence adequate compensation under all heads of damages. So far as the second step, the determination of the amount of workers' compensation benefits that are prescribed by the Act to be made from the Fund in respect of the injury in question, is concerned, in the -- 21 of 22 -- 10 particular circumstances of the case this should be determined as nil for the reasons that I have set out above. The result is that the appeal is allowed. Judgment will be entered for the plaintiff in the sum of $3,000.00 with costs according to the appropriate District Court scale. The respondent should pay the appellant 's costs of the appeal to be taxed . -- 22 of 22 --