Australia: Acceleration and bending the truth - consequences for a worker's damages

Focus: Hosmer v Cook Shire Council [2012] QSC 91
Services: Insurance
Industry Focus: Insurance

Hosmer v Cook Shire Council [2012] QSC 91

The judgement for this quantum only trial looks at the level of discounting applied to damages where a plaintiff was found to have significant credibility issues; a history of both short term employment and deliberate attempts to mislead medical assessors, his own occupational therapist and Centrelink; and a pre-existing injury.

Facts

The plaintiff, Mr Hosmer, suffered an injury to the lumbar spine when carrying out a task of striking pegs into hard ground by repeatedly swinging a sledge hammer over his head, in the course of his employment with Cook Shire Council. The Council admitted liability at trial. The dispute at trial was the significance of Mr Hosmer's pre-existing back condition, and Mr Hosmer's credibility issues in assessing the quantum of loss flowing from that work related injury.

Decision

The Court awarded Mr Hosmer the sum of AUD$413,600.43. They key issues in assessing damages were:

Pre-existing condition: there was evidence of significant degenerative changes, both orthopaedic experts opined the pre-existing condition was responsible for some impairment and the plaintiff's own expert noted that the pre-existing condition was symptomatic prior to the injury. Accordingly, Henry J found that it was 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. Henry J assessed the relevant degree of probability as 35% and discounted the awards for past and future economic loss and special damages accordingly.

Credibility: the Council raised a number of credibility issues. Firstly, Mr Hosmer did some paid, but physically undemanding, work for approximately three weeks, while receiving workers' compensation benefits. He did not disclose this work to the Council, to his general practitioner who provided a medical certificate, to the Medical Assessment Tribunal, his occupational therapist Mr Hoey, Centrelink's Job Capacity Assessors or in his sworn Notice of Claim for Damages. Mr Hosmer also did not disclose this employment information in the context of seeking a letter from his general practitioner to an insurer who made a substantial TPD payout to Mr Hosmer. Henry J also found Mr Hosmer's evidence to various medical practitioners and experts regarding his gait to have been inconsistent.

Employment history and willingness to re-enter the workforce: the Council argued that if Mr Hosmer was serious about pursing employment, he would be prepared to move to a larger community than Cooktown to do so. Henry J stated that this argument overlooked the fact that the Mr Hosmer was well settled in Cooktown with his children prior to the injury, and that it was unfair to draw an inference adverse to the assessment of economic loss from the fact that he remained living in the same township he was living in before the injury. However, Henry J did discount past economic loss by a further 10%, as the evidence advanced by Mr Hosmer did not adequately explain why he had been unable to secure alternate employment. Mr Hosmer had provided bare evidence of 22 attempts to apply for work in Cooktown post injury. However, Henry J approached this evidence with some circumspection in light of Mr Hosmer's credibility issues and the fact that he had not pursued any job seeking assistance.

Previous history of short term employment and willingness to return to work: the Council argued Mr Hosmer was unlikely to have stayed in his position with the Council as he had a history of frequently changing jobs and a recent three year period of unemployment. Henry J disagreed, noting this was Mr Hosmer's first "government" job, and it represented security he had not experienced before and that he and his children had settled in Cooktown. The three year history of unemployment was satisfactorily explained by Mr Hosmer's separation from his wife and his subsequently assuming sole custody of his children. Henry J considered Mr Hosmer would have stayed in his position with the Council, and that it was appropriate to calculate future economic loss by reference to his hypothetical future income were he to have remained in his Council job.

Calculation of damages: past economic loss was calculated on the basis of the income of two Council employees in comparable positions. He was awarded the sum of AUD$82,110.04 calculated as the full loss from the date of injury, then discounted by 45% (10% and 35% as discussed above).

Future economic loss was calculated in the sum of AUD$248,568.33 on the basis of full loss of present Council income, discounted by 55%, which consisted of the abovementioned 35% and then a further 20% to allow for residual earning capacity because, over time Mr Hosmer currently aged 41 years, may eventually secure and retain employment in a less physically demanding role. Further, Henry J reduced the relevant retirement age to 62 from 67, finding it unlikely Mr Hosmer would have worked beyond his early 60's in such a physically demanding job.

Mr Hosmer claimed future expenses for occupational rehabilitation, cognitive behaviour rehabilitation and physiotherapy. The Council argued that given Mr Hosmer's lack of commitment to date in seeking such assistance, he would never actually pay for or undergo such treatment. However, Henry J found that it would be inconsistent to discount his award for future economic loss in order to allow for the prospect Mr Hosmer returning to the workforce and in turn deprive him of the award necessary to equip him with a reasonable prospect of being able to do so. Consistent with the awards for past and future economic loss, this award was discounted by 35%, resulting in an award of AUD$14,034.15.

Implications:

This case is a reminder that in a quantum only trial a plaintiff's pre-existing injury and credibility issues can result in a significant discount of damages.

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