WCRA: pre-existing condition + credit issues = substantial discounting

Hosmer v Cook Shire Council [2012] QSC 91

Issues: quantum and the extent to which the plaintiff’s pre-existing degenerative condition of his lumbar spine, previous incidents, exaggeration/malingering and concealment of working for a short period of time impacted his damages.

 Overview: the plaintiff injured himself working for the council whilst driving “dumpy” pegs into hard ground using a sledge hammer. It was found the incident caused a soft tissue injury of the lumbo sacral spine with a central disk protrusion at L5/S1. Associate Professor Williams opined a 8% impairment with 2% pre-existing and Dr Foote considered it was 5% with a 1% allowance for pre-existing conditions.  Ultimately, the plaintiff who was 41 at trial suffered discounting as follows:

 Past economic loss: 45% (10% usual discount + 35% for his pre-existing condition);

 Future economic loss: 55% (35% for his pre-existing condition and 20% for his residual earning capacity).

 Notably, the medical evidence did not establish when the pre-existing condition would have “caught up” with the plaintiff in any event.

 Henry J:

[29] In short there was persuasive evidence the sledge hammering incident caused the injury and it was not clearly established what the future effects of the pre-existing condition, apart from the result of the sledge hammering incident, were likely to be. The proper approach to dealing with the latter aspect was clarified by the High Court’s decision in Purkess v Crittenden (in explaining its earlier decision in Watts v Rake[33]):

“It was, we think, with the character and quality of the evidence required to displace a plaintiff’s prima facie case that Watts v. Rake was essentially concerned. It … was stressed that both the pre-existing condition and its future probable effects or its actual relationship to that incapacity must be the subject of evidence (i.e. either substantive evidence in the defendant’s case or evidence extracted by cross examination in the plaintiff’s case) which, if accepted, would establish with some reasonable measure of precision, what the pre-existing condition was and what its future effects, both as to their nature and their future development and progress, were likely to be. … In the present case the evidence accepted by the learned trial judge by no means established with any reasonable degree of precision the extent of the appellant’s pre-existing affliction or what its future effects, apart from the result of the defendant’s negligence, were likely to be. That being so we think it was proper to deal with the case on the basis that the defendant’s negligence was the cause of the appellant’s permanent disability … .”[34]

Applying that reasoning to the present case, where it was not established with any degree of precision what the future effects of the pre-existing condition, apart from the result of the sledge hammering incident, were likely to be, it is therefore proper to deal with this case on the basis that the sledge hammering incident was the cause of the injury.

[30] I find the sledge hammering incident caused the injury.

31] It follows, from that finding and the Council’s admission in its amendment at trial to paragraph 6 of its Amended Defence, that the Council is liable for causing the injury.

[32] These findings do not render the pre-existing condition irrelevant to my assessment of damages. Both experts regarded the pre-existing condition as responsible for a proportion of Mr Hosmer’s impairment, however it was acknowledged by both experts that impairment in the clinical sense they described was not an assessment of disability.[35] On any view of the evidence the pre-existing condition had not occasioned the degree of disability suffered by Mr Hosmer from the time of the injury and it is the additional impairment occasioned by the injury that has resulted in such a degree of disability in Mr Hosmer that he is unable to perform the same arduous lumbo sacral work and enjoy the same quality of life as he did before the injury. But what of the possibility that at some future time the pre-existing condition would have resulted in Mr Hosmer becoming as disabled as he was following the injury, even if the injury had not occurred?

[33] Associate Professor Williams could not estimate what that possibility was. But, as was observed in Malec v JC Hutton Pty Ltd,[36] “…questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof”. The proper approach to be taken by the court in this context was explained in Malec’s Case:

“If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high – 99.9 per cent – or very low – 0.1 per cent. But unless the chance is so low as to be regarded as speculative – say less than 1 per cent – or so high as to be practically certain – say over 99 per cent – the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability.”[37]

[34] Associate Professor Williams did not expressly say the possibility existed that at some time the pre-existing condition would have resulted in Mr Hosmer being disabled to the same extent as occurred following the injury, even if the injury had not occurred. However, my strong impression in hearing his evidence was that it was to the effect that the possibility existed and it is apparent that is what his words implied. For instance, his explanation of the difficulty in predicting when the pre-existing condition might have given rise to a disability of the same extent as occurred following the injury necessarily assumed such a possibility existed.

[35] Given the objective evidence of significant degenerative changes, the fact that both experts opined the pre-existing condition was responsible for some impairment and the evidence of the plaintiff’s own expert that the pre-existing condition was symptomatic prior to the injury I find the possibility was real and not so low as to be speculative. It will therefore be necessary, in accordance with Malec v JC Hutton Pty Ltd, to assess the degree of probability of the pre-existing condition at some time after the injury disabling Mr Hosmer to the same extent as occurred as a result of the injury and adjust the damages accordingly. Counsel for the plaintiff properly conceded some such discounting should occur.[38]

True extent of the injury – exaggeration or malingering?

 

[42] It is tolerably clear Dr Foote misunderstood that report as indicating Mr Hosmer had said he was 95% recovered when in fact it was his GP who had expressed that view.

[43] Mr Hosmer denied he had told Dr Foote his condition had improved 95% and suggested his condition had improved 5%, not 95%.[44] I believed Mr Hosmer’s denial, which was particularly emphatic, although there was an obviously speculative quality about whether he had said 5% and been misunderstood.

[44] Dr Foote maintained in evidence that Mr Hosmer had said his condition had improved 95% or had said “something like that”.[45] Dr Foote’s report is dated two days after the re-assessment. It is inherently unlikely Dr Foote would have noted the words he did in that report unless he had been told something to that effect by Mr Hosmer, but whether it was Mr Hosmer’s own assessment or something Dr Hill had told him is another matter. Given the above-mentioned example of Dr Foote’s misunderstanding of what Mr Hosmer told Ms Morgan on this subject there is an obvious risk of recurrence of the same misunderstanding of what Mr Hosmer told him, particularly given his evidence was merely that “something like that” was said. Against that background and bearing in mind his contemporaneous notes were not produced,[46] I am not prepared to attach any weight to Dr Foote’s report’s record of words used about a 95% improvement.

[45] I am fortified in taking that approach by the fact that Dr Foote did not appear to interpret Mr Hosmer’s words, whatever they actually were, in the broader context of the whole re-assessment as literally meaning Mr Hosmer was almost completely recovered. He did not suggest that in his findings and used much more guarded language, merely saying, “If anything, Darryl Hosmer’s [condition: sic] has improved”[47]. Moreover, Dr Foote maintained his prognosis in his second report and at trial that Mr Hosmer would no longer be able to perform arduous lumbo sacral spinal work.[48]

[47] In the period between Dr Foote’s second assessment and the formal termination of employment Mr Hosmer had done some casual fulltime work for Grain Corp Operations Limited at Meandarra as a console operator. While he asserts he could not continue at that work “due to the constant pain”,[50] he apparently persevered at it for three weeks from 27 April 2009 to 19 May 2009.[51]

[51] Mr Hosmer did not disclose to the Council then or prior to its termination of his employment that he had worked for Grain Corp. While he was working at Grain Corp he needed an updated Workers’ Compensation medical certificate and saw Dr Victor Lee for that purpose. He plainly did not tell Dr Lee he had been working fulltime for Grain Corp for Dr Lee only certified Mr Hosmer was fit for undemanding work during restricted hours of four hours a day for two to three days a week.[55] Further, he did not mention his employment with Grain Corp to the Medical Assessment Tribunal[56] or to his Occupational Therapist, Mr Hoey,[57] or to Centrelink’s Job Capacity Assessors,[58] or in his Notice of Claim for Damages.[59]

52] An attempt was also made to prove Mr Hosmer did not disclose the fact of his work for Grain Corp to his doctor, Dr Hill, in the context of seeking a letter from Dr Hill to the insurer, which in turn made a substantial “TPD” payout of $178,290.25 to Mr Hosmer under Mr Hosmer’s Council superannuation policy.[60] While Mr Hosmer’s denials about that aspect were unconvincing there is no positive evidence contradicting him and I draw no adverse inference about it. In the present context that does not meaningfully assist Mr Hosmer in that there is a substantial body of other evidence of repeated non-disclosure to others during this era.

[53] Mr Hosmer advanced no credible explanation in his evidence for the pattern of non-disclosure during 2009 to persons and organisations he would have well realised had an interest in being told of his paid work for Grain Corp.

[54] Mr Hosmer finally disclosed the fact of his work for Grain Corp to the Council through his solicitor’s letter to the Council’s solicitor on 13 May 2010.[61] His counsel suggests that disclosure shows Mr Hosmer had not been deliberately concealing the fact he had done the work. I disagree. I infer he was stupidly but deliberately being secretive about it during 2009 so as not to risk reducing the monetary payments he hoped to receive during that era. He did not strike me as a particularly sophisticated thinker and I doubt that at the time of his non-disclosures he gave any thought to the longer-term ramifications thereof.

[55] His deliberate lack of candour during that era and his failure to concede the obvious about it when giving evidence are obviously matters to be borne in mind in considering his evidence but they were not destructive of his credibility generally.

[58] The Council alleged Mr Hosmer exaggerated his symptoms when examined by Associate Professor Williams.

[59] Associate Professor Williams reported that Mr Hosmer walked with an antalgic gait, that is, he limped.[63] Mr Hosmer gave evidence that since the incident he had not walked straight or normally and had walked with a limp ever since the incident.[64] He maintained it took him 15 months to stand up straight instead of being hunched over[65] and that at the time he saw Dr Foote he could not at that stage heal and toe walk.[66]

[60] However, Dr Foote reported that Mr Hosmer presented with a normal gait and could heal and toe walk.[67] Dr Foote explained his noting of Mr Hosmer’s normal gait meant Mr Hosmer walked normally and did not limp and explained that if Mr Hosmer had been hunched over Dr Foote would have commented on that in his report.[68]

[61] Mr Hoey also recorded that on his examination Mr Hosmer’s gait was unaffected.[69]

[62] These inconsistencies might be inconsequential had the evidence suggested there was a progressive worsening of Mr Hosmer’s gait over time, however Mr Hosmer maintained it was a problem from the beginning. Moreover, Mr Hosmer did not lay claim to a significant decline in his condition between the era when Dr Foote and Mr Hoey saw him and when Associate Professor Williams later saw him. To the contrary his evidence was that his condition had slowly improved since the accident[70] and he disowned the possibility that there had been some decline in his condition before he saw Associate Professor Williams.[71]

[63] When Associate Professor Williams examined him, in addition to walking with an antalgic gait, he was only able to heal and toe walk with some discomfort and could only straight leg raise bilaterally to 30 degrees.[72] Associate Professor Williams testified that Mr Hosmer’s apparent incapacity to raise his leg beyond 30 degrees was unexpected, as usually patients with his condition can elevate their leg beyond 30 degrees, more to 60 degrees.[73] He acknowledged it was possible there had been a deliberate attempt by Mr Hosmer not to allow his leg to elevate further[74] although he noted the lack of capacity could simply have flowed from an exacerbation of his symptoms on the particular day and that individual clinical signs sometimes vary on a daily basis.[75] He did not report any suspicion of overstatement or exaggeration by Mr Hosmer.[76]

[64] In the light of the evidence of both Dr Foote and Mr Hoey as to the manner of Mr Hosmer’s presentation, I do not accept Mr Hosmer’s evidence that his gait has been consistently impaired as he described in evidence. I bear that in mind in considering his evidence generally and particularly as to the true extent of his injury. However in the light of Associate Professor Williams’ observation as to variation from day to day in individual subjective clinical signs, I do not infer Mr Hosmer was deliberately exaggerating his symptoms on his presentation to Associate Professor Williams. I infer merely that his apparent difficulty with gait and the straight leg raise on that day was not typical of and was worse than his usual state post-injury.

[65] In any event, it appears Associate Professor Williams did not regard Mr Hosmer’s gait or his apparent difficulty with the straight leg raise as significant,[77] that is, he did not place weight on the test findings in isolation.[78] Thus, Mr Hosmer’s apparent gait and straight leg lift problems seemingly had no material bearing upon Associate Professor Williams’ ultimate opinion that the injury constituted a 4% whole of person impairment.

Other credibility issues

[69] At first blush, the frequency with which Mr Hosmer changed employers during this era may appear high but there is no evidence and no logical basis to suggest it is unusual for unskilled manual workers such as Mr Hosmer to change employers as often as he did. Moreover Mr Hosmer gave evidence that a number of his employers “went into liquidation or sold up and moved from Australia”.[81] A potentially more noteworthy aspect of his employment history in this era is that it was with private rather than public sector employers, that is, he had not had a government job.

[75] A further matter said to bear adversely upon Mr Hosmer’s credibility is the alleged state of his and his girlfriend’s living arrangements.[91] Mr Hosmer lives in Cooktown with his two children but is in a relationship of six years standing with his partner Emiline.[92] Despite this, and despite he and Emiline having had a child together on 16 September 2011, they do not live together.[93] She lives approximately two kilometres away from Mr Hosmer in Cooktown with her mother and seven other people.[94] It was put to Mr Hosmer in cross-examination that in fact they lived together at his home in a de facto relationship and that he was untruthful about that in order to maximize his Centrelink entitlements. Mr Hosmer rejected that suggestion.[95] There was some attempt to contradict Mr Hosmer by reference to him allegedly telling Dr Foote that he lived in a de facto relationship but it transpired, on the evidence of Dr Foote, that a record to that effect only arose because of limitations in what pro forma entries could be ticked during the consultation.[96] Moreover, the relevant line of that entry in the report contains a further error to the effect Mr Hosmer has no children – not a matter he is likely to have misrepresented to Dr Foote.[97] Mr Hosmer explained in re-examination that neither he nor Emiline want to live in each other’s homes and are content with their present domestic arrangement.[98]

[76] It was submitted I ought find the plaintiff should have called Emiline as a witness[99] but no adverse inference can logically flow from her absence as a witness and no proper basis was identified why it should. On the face of it, this issue went to credit and Mr Hosmer’s answers on the topic should be regarded as final. Mr Hosmer’s evidence describes a domestic arrangement that is not so extraordinary as to render his evidence about it implausible or to detract from his credibility.

General damages

[84] While it is true that part of Mr Hosmer’s impairment was said by the experts to be attributable to the injury and part to the pre-existing degenerative condition, on any view of the evidence the pre-existing condition had not previously occasioned the degree of continuing disability suffered by Mr Hosmer after the injury. It is the additional impairment occasioned by the injury that resulted in such a degree of disability in Mr Hosmer as to cause his above-mentioned pain, suffering and loss of amenity of life. Nonetheless, it is appropriate to temper the assessment of general damages in the light of the possibility that he may at some point post injury have suffered the same overall degree of disability and thus the same pain, suffering and loss of amenity of life, even if he had not been injured.

[85] The Council submits for an award of $40,000 whereas Mr Hosmer submits for $80,000. The general damages award of $80,000 sought by Mr Hosmer appears to be high in comparison to other cases,[123] and does not seem to reflect an appropriate degree of moderation for the possibility that he may at some point post injury have suffered the same overall degree of disability, even if he had not been injured. Making due allowance in moderation for that possibility I assess his general damages at $45,000.

Past economic loss

[87] Mr Hosmer remains out of work. By the time of trial he had applied unsuccessfully for 22 jobs in Cooktown, being informed either that there were no positions or that the employer would not employ him because of his back condition.[124]

[91] The fact that Mr Hosmer worked in the Grain Corp job for three weeks tends to confirm he has at least some residual capacity for work that is not physically demanding. His explanation at trial about why back pain caused him to cease the Grain Corp job, at which he worked for three weeks, was not particularly clear…

[94] Had Mr Hosmer seen fit to disclose his Grain Corp work and problems experienced with pain management during it to Mr Hoey it is unlikely, in view of the above evidence, that Mr Hoey would have materially revised his opinion.[131] Mr Hoey would likely have regarded the Grain Corp work as confirming his opinions both that Mr Hosmer retains a capacity to work only in occupations in the sedentary and light range, subject to reduced standing and walking tolerances in such occupations, and that Mr Hosmer needs training in how to better understand and modulate his pain in the workplace.

[95] While Mr Hosmer retains a capacity to work in less physically demanding occupations Mr Hoey opined that alone is not an indicator of his employability, that is, of his capability to gain employment, maintain employment and obtain new employment if required.[132] Mr Hoey explained that while Mr Hosmer might be physically able to perform work such as a security guard, sales assistant or console operator he does not have a background of work experience, qualifications or training in such fields, significantly diminishing his prospects of successfully competing for and securing such positions.[133]

[97] Mr Hosmer’s history of loss of work through injury and his ongoing need to manage his injury and pain in the workplace will also make him less competitive with other jobseekers in such fields and require an empathetic employer.[135]

[98] So too will his limited literacy skills. His assertion in his Quantum Statement that he has difficulty in reading and writing[136] does not indicate the precise extent of that difficulty but my impression of him having seen him give evidence, during which time he appeared to read a variety of documents, is that, while he can read, he is likely of below average reading ability for an adult.

[99] Mr Hoey opined the only way Mr Hosmer was likely to get back into the workforce was with intensive jobseeker training and assistance.[137] He contemplated a graduated move off his disability pension into part-time work may assist him to re-enter the workforce.[138]

[100] The Council submitted Mr Hosmer was not truly motivated to seek further employment. To the extent this submission relied upon Mr Hosmer’s past work history and period of unemployment prior to working with the Council I reject it for the reasons earlier outlined.

[101] The Council’s submissions implied that if Mr Hosmer were serious about pursuing employment he would be prepared to move to a larger community than Cooktown to do so. This appears to overlook that Mr Hosmer was already well settled in Cooktown with his children prior to the injury and that since then he and his partner have had another child. It may well be, as the children become older and Mr Hosmer’s personal or domestic circumstances change, that he elects to live elsewhere, just as he has done from time to time in the past. However, given his existing life circumstances it would be unfair to draw an inference adverse to the assessment of his economic loss from the fact he remains living in the same township he was living in before the Council caused his injury.

[105] In the face of evidence from his own expert that Mr Hosmer will find it difficult but not impossible to resume employment in a less physically demanding occupation than he has previously performed, the evidence advanced by him has not adequately explained why he has to date been unsuccessful in this difficult but not impossible task. The lack of calibre of his evidence on this issue means an expectation was not raised of the defendant adducing evidence of available suitable employment.[139] In the absence of some adequate explanation for his lack of success I am not prepared to conclude the difficulties identified by Mr Hoey were the sole reason for his lack of success in securing new employment to date, however I readily infer in the light of Mr Hoey’s evidence that it was the predominant reason.

[106] Despite these factual limitations it is necessary, as discussed in Smith v Topp & Anor,[140] to nonetheless make the best estimate I can to arrive at a fair award. This is not a matter in which the evidence has equipped the Court with information about pay rates for some of the jobs Mr Hosmer is fit for. It is therefore appropriate to look to what Mr Hosmer would have earned had he remained working at the Council and discount that amount moderately to allow for the fact that it was difficult, but has not been established on the balance of probabilities that it was impossible, for Mr Hosmer to have secured some employment in a less physically demanding job in the meantime. Given the difficulty in securing new work is inherently likely to be most acute in the first several years after injury before then improving over time there is good reason to apply a somewhat more modest discount for this aspect to past economic loss than to future economic loss. That discount in the context of the past economic loss in this case, and bearing in mind that it will be part of a larger overall discount, should be 10%.

[107] It will also be necessary to incorporate a discount for the probability that at some time after the date of the injury the pre-existing condition would have resulted in Mr Hosmer being disabled to his present extent, even if the injury had not occurred. This probability is logically of the same application to economic loss whether the loss is pre or post trial, that is, whether it is past or future economic loss. To accommodate the more mathematical processes involved in calculating such losses, in comparison to the global assessment of general damages, it is appropriate to quantify the probability as a specific percentage.

[108] In all the circumstances of the case I assess the relevant degree of probability as 35%. In Smith v Topp Muir J, as he then was, observed a discount of 35% may be a little low to allow for such a contingency,[141] however when applying this contingency to the most significant award, future economic loss, I will also reduce the relevant retirement age for the calculation by five years from 67 to 62, it being unlikely Mr Hosmer would have worked beyond his early sixties in such a physically demanding job.[142]

Future economic loss

[115] Using Mr Hosmer’s hypothetical weekly net income, were he presently employed at the Council, of $805.21 and applying the 5% tables’ 21 years multiplier of 686 gives an amount of $552,374.06 for future economic loss absent contingencies.

[116] It will be necessary to discount that figure for contingencies. That discount will need to allow for the 35% probability discussed earlier. Some allowance must also be made for Mr Hosmer’s residual income earning capacity because, over time, Mr Hosmer may eventually secure and retain employment in a less physically demanding occupation than he has previously held, thus reducing his future economic loss. As earlier discussed he retains a residual physical capacity for work but the employability difficulties confronting him are very significant now that he has lost the ability to earn a living in the only area of work in which he has substantial experience. His dilemma is summed up by the words of Chesterman J, as he then was, in considering a similar defendant in Bugge v REB Engineering Pty Ltd:

“The fact remains that he is a man of limited education whose occupational experience and qualifications are restricted to heavy manual work and he is unfit for such work.”[146]

In the circumstances I will allow for his residual income earning capacity in adopting an overall contingency discount for future economic loss of 55%.

[117] This gives rise to an award for future economic loss calculated as $552,374.06 x 45% = $248,568.33.

Summary

Summary

General damages $ 45,000.00

Interest on general damages $ 3,600.00

Past economic loss $ 82,110.04

Interest on past economic loss $ 8,064.88

Loss of past superannuation $ 9,853.20

Future economic loss $ 248,568.33

Loss of future superannuation $ 29,828.20

Special damages $ 7,633.20

Interest on special damages $ 103.92

Future expenses $ 14,034.15

Fox v Wood $ 4,654.00

Sub-total $ 453,449.92

Less Workcare amount $ 39,849.49

Total $ 413,600.43

 

Brisbane Barrister – David Cormack

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