Australia: Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer

Extract

In this recent Work Injury Damages Claim before the NSW Court of Appeal, one of the key issues on appeal was the formulation of the risk of harm and the calculation of damages in relation to past and future economic loss and past and future treatment expenses. The NSW Court of Appeal sided with the Plaintiff in refusing to make a number of deductions, including in relation to economic loss as a result of a pre-existing shoulder injury and future economic loss as a result of alleged future employability.

Introduction

The NSW Court of Appeal considered two Work Injury Damages matters heard together in the first instance by Rothman J in the Supreme Court of NSW in the matter of Avopiling Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer.¹ This article will focus on the Court's formulation of the risk of harm and assessment of the economic loss and past and future attendant care components of damages in light of the numerous challenges mounted by the Defendant.

Facts

In 2006 Bosevski, then an employee of Professional Contracting Pty Ltd, was struck and injured on a work site in regional NSW when an auxiliary cable on the mast of a pile driving rig snapped, causing injury to Mr Bosevski who was standing with his supervisor in the vicinity of the rig. The company Avopiling was the operator of the work site, located in Cringila, NSW. Bosevski was not an employee of Avopiling but a contractor on the work site. As a result of the incident, Mr Bosevski suffered significant injuries to his head, neck and chest.²

Proceedings

Mr Bosevski commenced proceedings against Avopiling Pty Ltd in 2009.³ Avopiling, in its Defence, alleged contributory negligence on the part of Bosevski and alleged that its liability should be reduced in light of the negligence on the part of Bosevski's employer Professional Contracting Pty Ltd.⁴

In 2011 the Workers Compensation Nominal Insurer became responsible for payment of workers compensation benefits on behalf of Professional Contracting. The Nominal Insurer commenced proceedings against Avopiling seeking indemnity for workers compensation payments made to Bosevski on the basis that these payments were made in absence of any finding of negligence.⁵

Indemnity was also sought by the Workers Compensation Nominal Insurer for past Workers Compensation payments made to Mr Bosevski pursuant to Section 151Z(2) of the Workers Compensation Act 1987 (NSW).⁶

Decision at First Instance

In the first instance before the Supreme Court of NSW, Rothman J found in favour of Mr Bosevski and awarded damages in the sum of $2,632,390.93. Rothman J refused to apportion liability, finding that Professional Contracting Pty Ltd had not been negligent and Mr Bosevski was not guilty of contributory negligence. Rothman J also found in favour of the Workers Compensation Nominal Insurer in the indemnity proceedings.⁷

Decision of McColl, Payne and White JJA

Formulation of the Risk of Harm

Avopiling argued on appeal that the risk of harm was formulated in a manner that was unreasonably specific in that it contemplated the precise harm suffered by Mr Bosevski, rather than the general risk of harm that objects would 'fall or be flung from the pile driving rig during the erection process.'⁸ It was submitted that the latter, although put differently by senior counsel for Avopiling during oral submissions,⁹ would necessarily encompass the circumstances which arose.¹⁰

The NSW Court of Appeal identified in obiter that, in the first instance, there were clear errors in the way in which the risk of harm was presented before the primary judge.¹¹ Namely, it was noted that ss 5S-5T of the Civil Liability Act applied to Avopiling's claim of contributory negligence against Mr Bosevski whilst the operation of s 151E(1) of the Workers Compensation Act and s 3B(1)(f) of the Civil Liability Act meant that common law principles rather than the Civil Liability Act necessarily governed Avopiling's claim of negligence against Professional Contracting under s 151Z(2) of the Workers Compensation Act.¹²

It was held that Avopiling bore the onus of proof in relation to identifying and pleading the correct risk of harm with respect to the Civil Liability Act but failed to do so, leading to the primary judge formulating the risk of harm in the same manner for both of Avopiling's claims as for the primary claim of negligence by Mr Bosevki against Avopiling.¹³

The Court of Appeal was also critical is in obiter of Avopiling's submissions on appeal regarding the formulation of the risk of harm.¹⁴ In particular, the risk of harm Avopiling sought to rely upon on appeal was not pleaded in its Defences to the negligence claim or indemnity claim, nor in its first amended cross claim.¹⁵ In its allegations of negligence against Professional Contracting Avopiling repeated and relied upon the particulars of negligence pleaded by Mr Bosevski in the amended statement of claim whilst the defence of contributory negligence against Mr Bosevski did not identify any alleged risk of harm.¹⁶

The Court of Appeal nevertheless came to the conclusion that the formulation of the primary judge of the risk of harm was not in error.¹⁷ This conclusion was primarily due to the finding that the 'true source of potential injury' was correctly identified along with the 'general causal mechanism of the injury sustained.'¹⁸ In contrast, Avopiling's alternative risk formulations neglected the likelihood of the risk eventuating, the reasonableness of precautions that might be taken against it and the 'true source of potentially injury' as indicated by the mechanism by which an object including the type causing injury might become detached.¹⁹

Damages – Past and Future Economic Loss

In relation to past economic loss, the main argument advanced on appeal by Avopiling was that the primary judge failed to make deductions for past loss of income in relation to a pre-existing shoulder injury, various overseas trips and thyroid cancer treatment.²⁰ The Court of Appeal held that a deduction was necessary for one month off work for a thyroid operation and one week off work for thyroid cancer radiation therapy.²¹ In relation to the pre-existing shoulder injury, the Court of Appeal noted that Avopiling's evidence was not sufficiently clear concerning the impact that aggravation of the pre-existing injury would have had on Mr Bosevski's earning capacity, particularly as Mr Bosevski was able to complete his actual duties for his employer notwithstanding the pre-existing injury.²²

The Court of Appeal also held that the argument made by Avopiling that deductions were also to be made to past economic loss for overseas holidays was without support as there was insufficient evidence as to whether Mr Bosevski would have continued his employment absent his injury or whether his overseas holidays would have fallen within his leave entitlements.²³

In terms of future economic loss, Avopiling argued on appeal that Mr Bosevski's future earning capacity was impacted by his pre-existing right shoulder injury and subsequent injuries and hence the 15 per cent discount for vicissitudes applied by the primary judge was insufficient to take into account the challenges Mr Bosevski would have faced in employment in any event.²⁴ Avopiling also argued that Mr Bosevski was still capable of completing non-labouring jobs such as that of a taxi-driver.²⁵

The Court of Appeal rejected the argument made by Avopiling regarding Mr Bosevski's pre-existing and subsequent injuries. It held that the 15 per cent deduction for vicissitudes was sufficient to take into account possibilities and probabilities in the manner outlined in Malec v JC Hutton Pty Ltd.²⁶ The Court of Appeal also rejected the arguments made by Avopiling that Mr Bosevski would have had some future earning capacity in an alternative field of employment, as any finding that Mr Bosevski would have been able to find employment as a taxi driver was inconsistent with the joint expert neurological opinion and joint expert psychiatric opinion which found that Mr Bosevski was 'for practical purposes unemployable.'²⁷

Damages – Past Gratuitous Care

Avopiling submitted that the evidence of Mr Boseveski was insufficient to establish an entitlement to past gratuitous care and in the absence of a lack of specific evidence about such an entitlement it was submitted that the primary judge erred in guessing the number of hours per week of attendant care.²⁸ Avopiling also argued that the primary judge failed to consider a range of evidence which led to a failure to conclude that much of the domestic assistance received by Mr Bosesvki was unrelated to the accident and would have been provided notwithstanding the injury.²⁹ Additional arguments were also made seeking a reduction in the quantum of damages for past gratuitous care in light of overseas holidays, the previous two thyroid surgeries and on the basis of the contrary evidence of Mr Bosevski's second wife.³⁰

The Court of Appeal held that the arguments made by Avopiling that Mr Bosevski was not entitled to the award of past gratuitous care in accordance with Section 15(3) of the Civil Liability Act was unsubstantiated on the basis of the evidence provided by Mr Bosevski, his second wife Ms Bosesvki and his son David Bosevski.³¹ It was held that this evidence was clear in its establishment of the provision of gratuitous care to Mr Bosevski by his family members in virtually all areas due to his severe injuries.³² The Court of Appeal also held that, in contrast to cases such as that of Sampco v Wurth,³³ the evidence provided by Ms Kennedy-Gould, occupational therapist, clearly added to the evidence of Mr Bosevski's family and provided a clear outline of the tasks undertaken in gratuitous care and the time taken for each task.³⁴

The Court also held that, in any event, the evidence of Ms Kennedy Gould clearly established that regardless of any pre-existing injury, extensive services were provided to Mr Bosevski following the accident which were not required prior to the accident and this led to the proper conclusion by the primary judge that these services would not have been provided but for the injury in accordance with Section 15(2)(c) of the Civil Liability Act.³⁵

Damages – Future Domestic & Attendant Care

Avopiling argued on appeal that the award of future domestic care on a commercial basis was incorrect as the evidence of Mr Bosevski was not clear in establishing why future domestic care was required on a commercial rather than gratuitous basis and, in any event, submitted that the requirement for commercial domestic assistance in the future was remote.³⁶ This issue was the subject of further written submissions during the appeal and senior counsel for Mr Bosevski sought to amend his pleadings to claim future gratuitous attendant care rather than commercial services, which was opposed by senior counsel for Avopiling.³⁷ Avopiling also alleged that the primary judge erred in the calculation of damages for future domestic and attendant care in accordance with Section 13 of the Civil Liability Act,³⁸ in the manner outlined in Malec v Hutton.³⁹

The Court of Appeal held that allowing the amendment of a pleading filed in 2010 on the second day of an appeal conducted in 2018 would be inconsistent with the principles of a just, quick and cheap resolution of the issues in accordance with Aon Risk Services Australia Limited v Australian National University.⁴⁰ It was held that senior counsel for Mr Bosevski was not entitled to amend the pleadings and it was necessary to assess future economic loss as sought on a commercial basis.⁴¹

The Court of Appeal arrived at the view that the primary judge failed to approach the question of future attendant care as required by the Civil Liability Act 2002 (NSW) s 13.⁴² It was also identified that Ms Kennedy Gould's evidence failed to establish that future commercial attendant care was required rather than future gratuitous attendant care.⁴³ The Court of Appeal rejected the argument made by senior counsel for Mr Bosevski that Section 13 of the Civil Liability Act 2002 (NSW) only applied to future loss of earnings.⁴⁴ The Court of Appeal also held that Section 13(2) of the Civil Liability Act 2002 (NSW) incorporated the Malec v JC Hutton approach of considering the probability of the event occurring and adjusting the award of damages accordingly,⁴⁵ unless the probability is so low as to be speculative or so high as to be practically definite.⁴⁶

As a result of the above findings, the Court of Appeal held that an award of damages for future attendant care on a commercial basis was appropriate as the factual information was sufficient to support a conclusion that the probability of Mr Bosevski requiring future domestic care was not so low as to be speculative.⁴⁷ Nevertheless, in finding that commercial domestic assistance was required, the Court of Appeal applied a 25 per cent reduction for vicissitudes due to the chance that commercial domestic assistance would not be obtained.⁴⁸

What to take away from the Court of Appeal's Decision

The decision of the Court of Appeal in Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer highlights a number of important issues for practitioners in relation to the preparation of pleadings and calculation of damages in personal injury litigation:

1. Practitioners need to ensure that pleadings are carefully drafted to ensure that all submissions and arguments to be relied upon in a claim are sufficiently particularised.In this case Avopiling submitted that the "risk of harm" as particularised in the Statement of Claim was unreasonably specific. The Court of Appeal found that this ground of appeal should be dismissed because this allegation was not particularised in the Defence.
2. Evidence of a pre-existing injury itself alone is not sufficient to justify a reduction of damages awarded. There is an onus on Defendants the existence of a pre-existing injury alone is not of itself a justification for a reduction in the award of damages. It is necessary for evidence to demonstrate how the pre-existing injury specifically impacted upon the Plaintiff's ability to perform pre-injury employment duties. In this case Avopiling failed to demonstrate with any specific evidence their contention that the injured workers' pre-existing shoulder injury impacted upon his ability to undertake his pre-injury employment specifically and to what extent any aggravation of this pre-existing injury would have impacted upon the injured worker's earning capacity.
3. Practitioners should be aware of the distinction between future gratuitous care and future commercial care. In particular, Plaintiff solicitors should ensure that, in instructing occupational therapists for comments on future attendant care, the distinction between gratuitous care and commercial care is clear. Furthermore, if gratuitous care will necessarily cease in the future, it is necessary for experts to be clear at which point in time this is expected to occur.
4. In general, it is clear that Avopiling faced a high burden in many of the reductions in damages sought on appeal. In particular, this was due to the severe injuries suffered by the Plaintiff and the joint neurological and psychiatric opinion that he was 'for practical purposes unemployable' and greatly reliant on attendant care.

Footnotes

¹[2016] NSWSC 1893 (29 March 2017).

² Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [4]-[6].

³ Ibid [7].

⁴ Ibid [8].

⁵ Ibid [10].

⁶ Ibid.

⁷ Avopiling Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2016] NSWSC 1893 (29 March 2017).

⁸ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [34].

⁹ Ibid [35].

¹⁰ Ibid [36].

¹¹ Ibid [37].

¹² Ibid.

¹³ Ibid [41].

¹⁴ Ibid [42].

¹⁵ Ibid.

¹⁶ Ibid.

¹⁷ Ibid [43].

¹⁸ Ibid.

¹⁹ Ibid [44].

²⁰ Ibid [87]-[92].

²¹ Ibid [93].

²² Ibid [94].

²³ Ibid [95].

²⁴ Ibid [96].

²⁵ Ibid.

²⁶ Ibid [101]; Malec v JC Hutton Pty Ltd (1990) 169 CLR 638.

²⁷ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [102].

²⁸ Ibid [105].

²⁹ Ibid [106].

³⁰ Ibid [107]-[108].

³¹ Ibid [112].

³² Ibid.

³³ [2015] NSWCA 117 (7 May 2015).

³⁴ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [113]-[114].

³⁵ Civil Liability Act 2002 (NSW) s 15(2)(c).

³⁶ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [119].

³⁷ Ibid [121]-[123].

³⁸ Civil Liability Act 2002 (NSW) s 13.

³⁹ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [120]; Malec v JC Hutton Pty Ltd (1990) 169 CLR 638.

⁴⁰ (2009) CLR 175; Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [126].

⁴¹ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [126].

⁴² Ibid [140].

⁴³Ibid [141].

⁴⁴ Ibid [138].

⁴⁵ Malec v JC Hutton Pty Ltd (1990) 169 CLR 638.

⁴⁶ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [129].

⁴⁷ Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146 (27 July 2018) [150].

⁴⁸ Ibid [153].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.