The ACT Supreme Court has awarded an injured worker plaintiff significant damages exceeding $5.6 m in the judgment of Hauraki v Steinhoff Asia Pacific Limited t/as Freedom Furniture [2021] ACTSC 54. The judgment explores how the Court approaches the assessment of damages in the context of pre-existing conditions which are unexpectedly but substantially exacerbated by a tortious act or omission, in circumstances where the evidence supports the likelihood that the claimant would have suffered impairment and incapacity from a severe exacerbation of the premorbid disorder in the future in any event.

Background

Whilst at work in the defendant’s warehouse on 26 September 2016, the plaintiff was attempting to load a sofa onto a trolley. In the course of doing so, he knocked a nearby dining table weighing approximately 100 kg, causing it to fall and hit him on his head and right shoulder. As he attempted to regain control of the trolley, he felt severe pain in his lower back.

A workers compensation claim was made and accepted. The plaintiff sought treatment for his back and attempted a graded return to work.

The insurer appointed a rehabilitation provider to facilitate the return to work. At a medical case conference with the plaintiff’s general practitioner in early 2017, the plaintiff expressed concerns about the work he was being asked to perform by the employer, and the level of his ongoing back pain. The plaintiff and his wife gave evidence that, after this conference, the rehabilitation provider suggested to the plaintiff that ‘the pain may be in your head’.

In mid-2017, the plaintiff was assessed by an independent orthopaedic surgeon on behalf of the insurer, who opined that the plaintiff was no longer suffering from any physical restriction. Relying on this opinion, the insurer rejected the plaintiff’s workers compensation claim.

Following these two events, the plaintiff began suffering a series of significant psychological symptoms, as well as anger and frustration. He also commenced drinking heavily and expressing suicidal thoughts, upon which he acted. The plaintiff had a series of admissions to a specialist psychiatrist inpatient facility including on the day before the 2021 hearing commenced.

The defendant did not seriously contest that it was in breach of the duty of care owed to the plaintiff by failing to provide a safe place and system of work. The primary issues at trial concerned quantum, and in particular, having regard to the plaintiff’s pre-existing psychiatric state, the appropriate mechanism to assess damages in light of the potential for the plaintiff to become incapacitated and/or cause his own premature death by suicide regardless of the work accident.

Evidence

Both parties qualified a psychiatrist and psychologist to provide opinions in relation to the plaintiff’s psychiatric condition. Although the precise diagnoses varied, it was common ground that the plaintiff was suffering severe psychiatric decompensation which was treatment resistant, and the prognosis for improvement or resolution of his symptoms was poor. Accordingly, the experts accepted that plaintiff was not capable of returning to any form of employment and required a significant amount of care and treatment.

The experts agreed that a brutal assault suffered by the plaintiff in 2009 left him susceptible to future triggers and likely exacerbation of the underlying depression he suffered following the assault. Although the assault was a contributor to the plaintiff’s present condition, the work injury was a necessary and significant factor to his severely decompensated state. Had the plaintiff’s severe depression and anxiety levels been in existence prior to the work injury, he would have required hospitalisation and would have been unfit for work. Thus, the experts accepted that the work injury was a substantial contributing factor to the plaintiff’s present incapacity.

Submissions

The primary issue at trial was accordingly the assessment of the plaintiff’s most likely future earnings but for the injury in light of the predisposition for incapacity, and the appropriate vicissitudes deduction to take into account the heightened risk of permanent incapacity and need for treatment and care independent of the work accident, together with the risk of death through suicide.

As a result of the depression developed by the plaintiff following the assault, he was prescribed antidepressant medication which he continued to take until the date of the work injury. It was argued by the defendant that this, together with a genetic predisposition for depression, caused a particular vulnerability in the plaintiff, and that it was likely he would have experienced an exacerbation of his psychiatric health in the future as a result of the assault, independent of the work injury. This was demonstrated by his ‘abnormal’ response to a number of events post-injury such as a brief separation from his partner, the death of his dog, headaches/tinnitus, concern about his daughter’s health, and an adverse reaction after witnessing a fight at a party.

In addition, with reference to the numerous attempts the plaintiff had taken on his life, it was suggested that any award for future damages ought to be reduced on account of the prospect of a reduced life expectancy.

The plaintiff accepted that it would be appropriate to adjust damages by increasing the discount for vicissitudes to account for the plaintiff’s pre-existing psychiatric condition and the prospect that it might have negatively impacted the plaintiff’s lift in any event. However, it was submitted that this increase ought not be significant, and that there should not be an unfair duplication of discounting for vicissitudes.

Decision

His Honour Acting Justice Crowe found that, despite the assault, the plaintiff was functioning reasonably well in all aspects of his life prior to the workplace injury. His Honour concluded that the injury to the plaintiff’s back set in train a sequence of events which was catastrophic for him and made a material contribution to the development of the psychiatric diseases.

His Honour accepted that the plaintiff’s suicide risk was such that it was reasonable for him to have the level of commercial care recommended by the expert psychiatrist. He also accepted the level of treatment recommended by the experts, including regular hospitalisation. The defendant contended that damages be assessed on a life expectancy of a further 5 years, or in the alternative, a further 30 years, and applying vicissitudes of 50%. The plaintiff tendered a schedule of damages based on a total loss for a normal life expectancy, arriving at a figure of $9,216,100.

Acting Justice Crowe had regard to the reasoning of the High Court in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 in determining the best method to approach the award of damages. With reference to this decision, the defendant’s approach to the award of damages was, to a degree, accepted in assessing the size of the vicissitudes deduction to be greater than ‘normal’ so as to take into account the increased risk of the plaintiff not incurring the loss for the total of his statistical life expectancy. Damages were assessed at full value (to retirement at age 70 and based on a normal life expectancy), and reduced as follows:

• Past economic loss was reduced by 5% due to the small possibility of an intervening incapacitating event.
• Future loss of earning capacity was discounted by 25% to account for the combined risk that a non-tortious intervening event might have caused significant incapacity and that the plaintiff might succeed in ending his life, notwithstanding all the care and treatment which will be made available to him. In addition, the usual reduction of 15% for vicissitudes was applied, although the total discount of 40% was reduced to 35% avoid double counting.
• Future treatment was also discounted by 30% on the same basis.

The result was an award of damages in favour of the plaintiff of $5,624,298. This included an award for general damages of $350,000.

Comment

This general claim demonstrates the significant complicating factors which arise in assessing whether an entitlement arises to statutory compensation when the work accident results in a very severe reaction beyond the initial physical injury. The potential for an injury to the back and shoulder to materially contribute to a severe and disabling psychiatric reaction is difficult to assess without a full history and detailed medical assessments.

Also, from a common law perspective, the decision represents a reminder of the difficulty in predicting the assessment of damages for future losses in situations where the claimant has significant pre-existing health issues. The ‘Egg Shell Skull Rule’ operates advantageously for a claimant in establishing causation even where the reaction to the injury is unexpected. However, a significant reduction in the award of damages is available to a defendant if it can establish that the pre-existing condition would have caused incapacity and impairment in any event.