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Two decisions in Queensland last year have the potential to impact defendants and insurers in future personal injury claims. The outcomes highlight risks that defendants and insurers particularly need to keep in mind when considering economic loss assessment.

Paskins v Hail Creek Coal Pty Ltd [2017] QSC 190

An injured worker successfully sued his employer, Hail Creek Coal, and WorkPac, the employer of a labour hire worker involved in the incident, in the Queensland Supreme Court where Justice McMeekin made findings as to who was the Plaintiff’s true employer and what the Plaintiff’s future economic loss was and care costs.

Pro hac vice

WorkPac argued that its employee, who was blamed for the incident, was “subsumed into the system of work of the mine operator” and therefore the master-servant relationship should be temporarily abrogated (the pro hac vice concept).

WorkPac cited the extensive levels of induction, training, supervision and control exerted by the mine over its employee. However, Hail Creek established that WorkPac kept an office on site, had human resources employees on site to manage its labour hire staff and that the labour hire contract preserved WorkPac’s entitlement to control its workforce.

Ultimately, McMeekin J confirmed the onus lies with the employer to prove the transfer of services and, quoting Viscount Simon in Mersey Docks Harbour Board v Coggins & Anor [1947] AC 1 at 11, that the “burden is a heavy one and can only be discharged in quite exceptional circumstances”. WorkPac failed to demonstrate Hail Creek had entire and absolute control over the employee and the pro hac vice argument was rejected. 

Future economic loss (FEL)

The Plaintiff’s FEL claim was premised upon a further 30 years of uninterrupted work in the mining industry but for the personal injury. McMeekin J was sceptical of this assertion for the following reasons:

  • the Plaintiff failed to demonstrate continuity of employment in the mining industry before the subject incident
  • consistency of employment in the mining industry is not certain, even for exemplary employees given the vagaries of overseas markets and numerous recent redundancies
  • the Plaintiff had a degenerative spine condition that may have been adversely impacted by ongoing physical work, reducing the Plaintiff’s long-term mining career ambitions, and
  • the life of a miner is challenging and “what appeals to a younger man does not necessarily appeal to someone more advanced in life”, so the Plaintiff’s likely attitude to that type of work in 10, 15 and 20 years cannot be known.

With these points in mind, McMeekin J rated the Plaintiff’s prospects of working in the mining industry for a further 30 years at 30%, which he described as “generous”. Accordingly, the FEL claim was discounted by 70% as a starting point.

Gratuitous care

The Plaintiff sought considerable damages for past and future care costs, relying on the opinion of an independent Occupational Therapist (OT). As is generally the case, the OT had relied on the Plaintiff’s own “view of his disabilities” to assess care requirements.

McMeekin J formed a different view to the Plaintiff as to his level of disability around the home and confirmed the Plaintiff “bears the consequences of any imprecision” in the evidence. Accordingly, McMeekin J awarded only 50% of the past care claim and a modest future care component.  

Costs

As the award of damages was less than the written final offer made by the Plaintiff at the compulsory conference, the Workers’ Compensation and Rehabilitation Act 2003 (Qld) precluded the Court from ordering Hail Creek to pay the Plaintiff’s costs. In response, the Plaintiff sought an order that WorkPac pay the costs of his claims against Hail Creek and WorkPac.

In making the order, McMeekin J noted that the Plaintiff succeeded against Hail Creek and WorkPac, in circumstances where WorkPac maintained its pro hac vice argument and Hail Creek disputed this, and this compelled the Plaintiff to maintain his claim against both Defendants.

McMeekin J stated it could not be doubted that WorkPac’s conduct was such that it was fair to impose liability on it for the Plaintiff’s costs of pursuing Hail Creek. This was so even though the WCRA expressly precluded the Plaintiff from recovering costs directly against Hail Creek.

Defendants and their insurers should appreciate that the decision is not authority for the proposition (now being advanced with regularity by some plaintiff firms) that in a case involving a WCRA claim against an employer and a Personal Injuries Proceedings Act 2002 (Qld) claim against a non-employer tortfeasor (such as WorkPac), a Claimant who receives damages from the employer but cannot recover their costs of the WCRA claim, can seek those costs from the PIPA tortfeasor.

AAI Limited v Marinkovic [2017] QCA 054

The Queensland Court of Appeal considered the Defendants’ appeal against the trial judge’s award of damages, in circumstances where his Honour found the Plaintiff had tendered false tax returns as part of his evidence of his lost earning capacity, but that there was still a reduced earning capacity.

Facts

The Plaintiff was injured in a motor vehicle accident on 30 April 2010. Liability was admitted and at trial he was awarded damages, including $240,000 and $135,000 for past and future economic loss, respectively. The Defendants appealed the awards for economic loss and the other heads of damages on numerous grounds, but primarily on the basis that the Respondent’s tax returns were essentially “works of fiction” and he was not a reliable witness.

Ground of appeal regarding the Plaintiff’s tax returns

The Appellants relied on the South Australian decision, Giorginis v Kastrati (1988) 49 SASR 371, in support of a submission that damages for economic loss should have been assessed based on the income disclosed in the Plaintiff’s tax returns and the trial judge should not have found the Plaintiff’s income was different to what he’d disclosed to the tax office, unless he had admitted to having not fully disclosed his income.

The decision

In delivering the lead judgment, his Honour Morrison JA held the Giorginis line of reasoning should not be followed because:

  • it took a censorious approach and imposed a form of punishment on the Plaintiff for actions taken out of court—and in that sense was a triumph of form over substance
  • it was wholly inconsistent with the Court’s obligation to make an assessment of damages that would adequately compensate the Plaintiff for the loss of his earning capacity that is or may be productive of financial loss, resulting from the injury caused by the negligent Defendant
  • it seemed contrary to what the Court said in Giorginis—where a plaintiff proves receipt of income other than that declared in his or her tax returns, he or she is entitled to have the exercise of the earning capacity that generated that income taken into account, and
  • it had not been subsequently followed or disapproved.

What do defendants and insurers need to keep in mind?

Paskins confirmed that the threshold an employer needs to establish the total transfer of services for an employee to a host employer remains very high and will only be met in exceptional circumstances.

Where possible, assessments of economic loss damages must be calculated by reference to evidence demonstrating a claimant’s loss of earning capacity, of which tax records are only one part as shown in Marinkovic.

The courts are willing to recognise changing economic and employment factors in industries, such as mining, and adjust economic loss claims accordingly.

A plaintiff will bear the consequences of any imprecision in evidence led at trial to support a damages claim.

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