Berkeley Development Association Inc v Gralton; Berkeley Development Association Inc v Crawford; Gralton v Berkeley Development Association Inc & Anor

[2006] NSWCA 191

New South Wales

Court of Appeal

CITATION:

Berkeley Development Association Inc v Gralton; Berkeley Development Association Inc v Crawford; Gralton v Berkeley Development Association Inc & Anor [2006] NSWCA 191

HEARING DATE(S):

1 March 2006

 
JUDGMENT DATE: 

18 July 2006

JUDGMENT OF:

Handley JA at 1; Bryson JA at 39; Basten JA at 40

DECISION:

CA 41116 of 2004 (1) Appeal allowed with costs.; (2) Judgment for the plaintiff in the District Court against the Association set aside.; (3) In lieu thereof judgment in the action for the Association with costs.; (4) The respondent to have a certificate under the Suitors’ Fund Act 1951.; CA 41117 of 2004 (1) Appeal allowed with costs.; (2) Judgment for the plaintiff in the District Court set aside.; (3) In lieu thereof judgment for the defendant in the action with costs.; (4) The respondent to have a certificate under the Suitors’ Fund Act 1951.; CA 41136 of 2004 (1) Appeal dismissed with costs.; (2) Cross-appeal by Illawarra Area Health Service allowed with costs.; (3) Judgment for the plaintiff in the District Court against the Health Service set aside.; (4) In lieu thereof judgment for that defendant in the action with costs.; (5) The cross-respondent to have a certificate under the Suitors’ Fund Act 1951.

CATCHWORDS:

NEGLIGENCE – employer and quasi-employer – risk of deliberate criminal conduct by others – duty of care – obligation to take reasonable steps to protect employees – need to show that steps would have prevented injury – need for expert evidence - ND

CASES CITED:

Neill v NSW Fresh Food & Ice Pty Ltd (1963) 108 CLR 362
Nelson v John Lysaght (Australia) Ltd (1975) 132 CLR 201

PARTIES:

CA 41116 of 2004
Berkeley Development Association Inc (Appellant)
Shelley Leanne Gralton (Respondent)

CA 41117 of 2004
Berkeley Development Association Inc (Appellant)
Beth Crawford (Respondent)

CA 41136 of 2004
Shelley Leanne Gralton (Appellant/Cross Respondent)
Berkeley Development Association Inc (First Respondent)
Illawarra Area Health Service (Second Respondent/Cross Appellant)

FILE NUMBER(S):

CA 41116 of 2004; CA 41117 of 2004; CA 41136 of 2004

COUNSEL:

I Harrison SC/A B Parker (Berkeley Development Association Inc)
S G Campbell SC/D R Toomey (Shelley Leanne Gralton & Beth Crawford)
J Poulos QC/G Butler (Illawarra Area Health Service)

SOLICITORS:

Curwood & Partners (Berkeley Development Association Inc)
Russell McClelland Brown (Shelley Leanne Gralton & Beth Crawford)
Turks Legal (Illawarra Area Health Service)

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 411 of 2001; DC 15 of 2002
LOWER COURT JUDICIAL OFFICER:	Geraghty DCJ
LOWER COURT DATE OF DECISION:	22 November 2004

CA 41116 of 2004
CA 41117 of 2004
CA 41136 of 2004

HANDLEY JA
BRYSON JA
BASTEN JA

18 JULY 2006

BERKELEY DEVELOPMENT ASSOCIATION INC v SHELLEY LEANNE GRALTON

BERKELEY DEVELOPMENT ASSOCIATION INC v BETH CRAWFORD

SHELLEY LEANNE GRALTON v BERKELEY DEVELOPMENT ASSOCIATION INC & ANOR

CATCHWORDS

NEGLIGENCE – employer and quasi-employer – risk of deliberate criminal conduct by others – duty of care – obligation to take reasonable steps to protect employees – need to show that steps would have prevented injury – need for expert evidence

FACTS

The Berkeley Neighbourhood Centre was established in 1992 to address problems created by the anti-social behaviour of local unemployed youths in the area. On 3 February 1999 an incident occurred during which three of the Centre’s staff were terrorised by two youths affected by alcohol one of whom threatened them with what appeared to be a pistol. The youths were arrested when the police arrived and the pistol was then found to be a replica. The women claimed that they suffered nervous shock and commenced actions based on the Centre’s failure to exercise reasonable care for their safety. The trial Judge found that the Centre owed a duty of care to the employees, there was a foreseeable risk of injury and that the Centre and another employer had failed to take reasonable care for their safety. The Judge did not accept the expert evidence called for the plaintiffs and instead made findings of breach based on commonsense and general experience. HELD: (1) It was not open to the Judge to make a finding that a number of simple inexpensive measures could have been taken to protect the staff; (2) His findings were inconsistent with the expert evidence; (3) He had not considered the issue of causation; (4) The onus was on the plaintiff to establish that adoption of these steps would have prevented or substantially minimised the traumatising events; (5) The Judge’s implicit finding that the adoption of the three safety precautions he identified would have prevented or mitigated the traumatising effect of the incident could not be supported.

ORDERS

CA 41116 of 2004

Berkeley Development Association Inc v Gralton

(1) Appeal allowed with costs.

(2) Judgment for the plaintiff in the District Court against the Association set aside.

(3) In lieu thereof judgment in the action for the Association with costs.

(4) The respondent to have a certificate under the Suitors’ Fund Act 1951.

CA 41117 of 2004

Berkeley Development Association Inc v Crawford

(1) Appeal allowed with costs.

(2) Judgment for the plaintiff in the District Court set aside.

(3) In lieu thereof judgment for the defendant in the action with costs.

(4) The respondent to have a certificate under the Suitors’ Fund Act 1951.

CA 41136 of 2004

Gralton v Berkeley Development Association Inc & Anor

(1) Appeal dismissed with costs.

(2) Cross-appeal by Illawarra Area Health Service allowed with costs.

(3) Judgment for the plaintiff in the District Court against the Health Service set aside.

(4) In lieu thereof judgment for that defendant in the action with costs.

(5) The cross-respondent to have a certificate under the Suitors’ Fund Act 1951.

CA 41116 of 2004
CA 41117 of 2004
CA 41136 of 2004

HANDLEY JA
BRYSON JA
BASTEN JA

18 JULY 2006

BERKELEY DEVELOPMENT ASSOCIATION INC v SHELLEY LEANNE GRALTON

BERKELEY DEVELOPMENT ASSOCIATION INC v BETH CRAWFORD

SHELLEY LEANNE GRALTON v BERKELEY DEVELOPMENT ASSOCIATION INC & ANOR

Judgment

1 HANDLEY JA: The Berkeley Neighbourhood Centre was established in the suburb of Wollongong of that name in an attempt to address problems in the area resulting from the anti-social and criminal activities of unemployed teenagers. It was established in 1992 by the Berkeley Development Association Inc in premises owned by the Council. The Centre also provided services to older people and pensioners but it concentrated on its youth work. It was supported by tied grants from the Premier’s Department, the Department of Community Services, and the Council. It also received modest amounts from donations and membership fees.

2 At the relevant time – February 1999 – the Centre had one full-time employee Maryann Pratt (Pratt), who was in overall charge, between 30 and 40 part-time employees, and a considerable and active group of volunteers some of whom were also part-time employees. With one exception the employees were paid by the Association. One of the part-time staff, Shelley Gralton (Gralton), was employed and paid by the Illawarra Area Health Service but was seconded to the Association.

3 These proceedings arose out of incidents at the Centre on 3 February 1999 when two of its clients aged 17 and 19, wanting desperately to play pool in the early afternoon, brandished a replica gun and terrorised three women in the Centre; a volunteer, an employee and the employee of the Health Service. The women claimed that as a result they suffered nervous shock. Gralton brought proceedings against the Association and the Health Service based on their alleged failures to exercise reasonable care for her safety. Similar claims were made by Beth Crawford (Crawford) a volunteer, and Christine Humphreys (Humphreys) an employee. Humphreys’ case was settled and cross-claims between the Association and the Council are not before this Court.

4 The other two cases were heard by Geraghty DCJ who found for both plaintiffs and awarded substantial damages in each case. The Association appealed, the Health Service cross-appealed in Gralton’s case, and the Association appealed in Crawford’s case. Gralton also appealed challenging the separate judgments for different amounts against the two defendants.

5 The three plaintiffs and Pratt gave evidence about the confrontations that occurred on the day in question. The Judge summarised their evidence which differed in detail but he did not make findings as to what actually occurred. He thought that some of Crawford’s evidence, although honest, was a reconstruction. Counsel for the Centre and Health Service accepted the broad outline of the incidents as they emerged from this evidence and nothing turns on the differences.

6 That morning the two boys, David Hart and Trent Bertout, had been drinking beer outside the Centre for some hours. They were affected by alcohol and were loud and abusive. Humphreys and Gralton spoke to them in an attempt to have them moderate their behaviour without result. About 1.30pm they came inside and went into the pool room demanding to be allowed to play pool. Gralton told them that this was not possible because the balls were locked away and the youth worker who had the keys was not on duty. David Hart then produced what Gralton took to be a pistol and pointed it at her.

7 She kept talking, and then walked away, going into Pratt’s office. Pratt called out asking Hart if he had a gun. He denied it and the boys left the building. Gralton called the police and while she was on the phone someone called out “they’re coming back”. Pratt closed the office door and stood with her body weight against it. The boys were outside kicking and yelling. Humphreys pressed the panic button twice and then went to the door to relieve Pratt. Gralton finished talking to the police. It took about 10 or 15 minutes for them to arrive when they arrested the boys and discovered that the gun was a replica.

8 Crawford was elsewhere in the Centre during the confrontations. She said that the boys had not directed any threats at her, but she had seen the events outside Pratt’s office. After a while the boys went to the pool room but she remained traumatised sitting in her chair. According to her a boy aged 5 who was at the Centre with his mother came out of the pool room with the gun and pointed it at her from a few metres away saying that he was going to shoot her before eventually putting it down. It’s not clear how much of this was accepted by the Judge, but he found that Crawford had been traumatised.

9 The Judge found that the Association owed duties of care to Gralton and Crawford, and that the Health Service also owed Gralton a duty. He found that there was a foreseeable risk of injury to staff at the Centre from the criminal acts of unruly youths and that both defendants had failed to take reasonable care for their safety.

10 The Judge found that Berkeley was a dysfunctional community affected by vandalism, assaults, drugs, alcohol, violence and anti-social behaviour in general. In the months and weeks before 3 February 1999 there had been a number of incidents of violence in and around the Centre. Pratt had twice been punched by Bertout, one of the two boys involved in the incidents on 3 February. Gralton gave evidence of two incidents when a knife was produced and Bertout was involved in one of them. Humphreys had also been confronted by a boy with a knife. A member of staff had been injured when her leg was struck by a sliver of glass from a bottle with a cracker inside (blue 1/221). There was much other evidence, oral and documentary, of violent and lawless behaviour by youths in the suburb and around the Centre which the Judge summarised.

11 He concluded that that the Centre was a dangerous place and the Association’s committee knew this. Pratt had also told them about the dangers and the concerns of the staff.

12 The Association was financially on the edge, during the period leading up to 3 February. The Judge was impressed by the work being done at the Centre, and the dedication and commitment of the staff, paid and unpaid. It existed to attract troubled youths in the hope that the activities it provided would encourage and develop more appropriate behaviour and habits. He made the following important finding:

“… there had to be a balance between the services provided and the safety and security of the workers, the security of the generous volunteers, and of those attending the premises where the services were being offered.”

13 He continued:

“It is clear to me … that the workers and volunteers of the Centre needed some protection, some security system to ensure their safety. But where does the balance lie? The Association had limited finances. It was functioning on a very frugal budget. It was a voluntary organisation. Where does the balance lie?”

14 Liability was contested on all grounds at the trial but in this Court Mr Harrison SC for the Association and Mr Poulos QC for the Health Service wisely limited their challenges on liability to the issues of breach and causation. The plaintiffs obtained a report from Mr Jennings a security expert who also gave oral evidence. There was no doubt about his qualifications and experience, but the Judge did not accept his evidence. The witness said that the Centre should have been provided, by way of additional security, with back-to-base cameras, metal detectors at the entrance, and static guards.

15 The Judge found that these steps would have been very expensive and may only have deterred young people from attending the Centre. Having static guards examining people outside the premises as they came in did not seem to him to be a way of attracting troubled young people to the Centre. He concluded:

“I consider the expert’s suggestions exaggerated, over-the-top and unreasonable, and probably ineffectual. For example security cameras might act as a general deterrent, but probably would not have prevented this incident because the boys in question were drunk, and were well-known to the staff anyway.”

16 This was the only expert evidence in support of the plaintiffs’ case that the Association and the Health Service had breached their duties of care. However the Association conducted a safety audit a few months earlier and officers of WorkCover turned up, as usual, after the event and it will be necessary to consider the evidence about these matters, although, in terms, the Judge did not rely on this evidence.

17 He considered that it was open to him to find, on the basis of commonsense and general experience, that a number of “simple inexpensive measures” could have been taken to protect their staff. He said:

“Firstly, it seems to me, that it would be important to train the staff, developing methods of dealing with potentially difficult situations, such as boisterous unruly behaviour of drunken youths. The Centre could have adopted a protocol of removing drunken youths from premises or surrounds, including summoning the police to assist. It could have developed a protocol of discouraging unruly, bad behaviour in and around the Centre …

The Centre could also have kept the entrance door locked and installed a buzzer system for entry. There should not have been free access to the premises where staff were immediately vulnerable to any entrant. Finally the Centre could also have installed a protective counter in the office, to separate staff from clients, and to provide an opportunity to vet undesirable entrants …

In the end, this was not a matter of money. It was a question of supervision, of procedures and protocols.”

18 In my judgment, and with respect, this approach was not open to his Honour. Mr Jennings, the qualified expert, did not suggest that the Association should have done any of these things. His silence was in fact evidence that for one reason or another these things were either not reasonable or would be ineffective. After the event not even WorkCover was able to suggest, with the perfect wisdom of hindsight, that a buzzer system for entry and a protective counter would have helped. The Judge considered that these were “simple options” but his reasons failed to address the causation question. The plaintiffs had to establish that the adoption of these steps would have prevented or substantially minimised these traumatising incidents.

19 The relevant principles are well established. There are cases where the existence of an obvious risk and the employer’s failure to provide protection against it will enable the tribunal of fact, as a matter of commonsense, to find that the employer has been negligent. However there are other cases where commonsense will not be enough. In Neill v NSW Fresh Food & Ice Pty Ltd (1963) 108 CLR 362, 368-370 Taylor and Owen JJ said:

“No doubt in many cases no more than common knowledge, or perhaps commonsense, is necessary to enable one to perceive the existence of a real risk of injury and to permit one to say what reasonable and appropriate precautions might appropriately be taken to avoid it … [I]t must appear that the employer failed to take reasonable steps to provide a system which will be reasonably safe, having regard to the dangers necessarily inherent in the operation … Whether or not there has been such a failure on the part of the employer may, in some cases be resolved, by the application of common knowledge; in other cases it may be necessary to show … that an appropriate method which would eliminate or minimise the risk was readily available. Additionally, of course, it must appear that the plaintiff’s injuries would have been prevented if … the alternative method had been employed.”

20 In some cases a change of system after an accident may provide prima facie evidence of what could and should have been done beforehand to avoid an obvious risk. In such a case a plaintiff may succeed if there is no answer to the prima facie case, as happened in Nelson v John Lysaght (Australia) Ltd (1975) 132 CLR 201, but that case is clearly distinguishable.

21 In a valiant attempt to support the judgment or obtain favourable findings Mr Campbell SC relied on the Council’s safety audit and safety program and the notices from WorkCover. On 21 December 1998 the Wollongong Council reported on a Community Safety Audit of the Centre and its surrounds conducted on 11 November. Gralton was the Centre’s representative on the Working Committee (black 1/276) which included representatives of the Council, the police and the community (blue 3/705). The Committee identified a number of safety issues at the Centre (3/709) and made recommendations (3/712) which relevantly included provision of security roller shutters for the windows and doors which could be closed “when security of staff is compromised”, and a security camera to deter anti-social behaviour and provide evidence for the police.

22 Nothing had been done by 3 February 1999 but the recommendations were not adopted either by the expert or by the Judge, and neither would have prevented these traumatising incidents.

23 The general issues raised by the Committee include a recommendation for increased policing at Berkeley, that “consideration” be given to the installation of surveillance cameras, and that a youth facility should be established separate from the Centre. There was also a recommendation for “education and training for workers in the community facilities on preventing violence in the workplace and dealing with critical incidents”. The other recommendations are not relevant.

24 The security audit provides cogent evidence of what safety measures were seen by a representative committee as reasonable and appropriate for dealing with the perceived risks.

25 Earlier the Council had prepared a Draft Community Safety Program (3/765) as a result of a public meeting at Berkeley on 29 September 1998 organised by the Centre. This had been called to discuss community concerns at the level of crime. The Draft Program was presented on 21 October (3/769). It recognised the need for ongoing support for staff at the Centre and recommended that discussions take place between representatives of the Centre and the Council to develop a plan of action for staff support. The necessary resources were identified as staff time and funding for training and supervision (3/777).

26 WorkCover inspectors served enforcement notices on the Centre on 30 March 1999. These included the following directions (notice 166473):

“Develop systems of work which will effectively control the risks of injury to employees from clients exhibiting challenging or aggressive/assaultive behaviours. Assess, by way of a risk assessment or other effective means, the risks to the health and safety of employees arising from clients who may exhibit challenging or violent behaviour.”

27 Another notice (166475) gave this direction:

“Develop and implement systems of work which will effectively control the risks to employees identified by the processes set out in improvement notice 166473.”

28 A further notice, in similar terms to the latter, was given in respect of non-employees. These directions were totally lacking in content, and did not explain how systems of work could control risks such as those which occurred on 3 February.

29 There was no other evidence, expert or otherwise, about the content of the training, the improved systems of work or the protocols that should have been adopted, and no evidence, expert or otherwise, that any of those things would have prevented the incidents of 3 February or eliminated or mitigated their traumatic effect on staff. Without such evidence the findings, recommendations, and directions are nothing more than motherhood statements and bureaucratic jargon.

30 Some of the staff on duty at the time were experienced and had relevant training. Crawford had no special training for this work but had been at the Centre since 1996 (black 1/10). Gralton had worked for the Health Service in its HIV prevention section which ran needle exchange programs (1/101) and then at its Port Kembla Sexual Assault Clinic (1/103). In September 1998 she was transferred to the Centre (1/104) and became a member of the Safety Audit Committee.

31 Pratt, the full-time manager, had studied community welfare at the TAFE and was appointed to the staff at the Centre in April 1995 (black 1/196). She was promoted to manager within a year (1/196). In March 1998 she had called a meeting to discuss safety concerns at and around the Centre. This was attended by one member of the Committee of management, Mr Bruce McDonald, the senior WorkCover inspector in the area, and staff (black 1/149).

32 Humphreys had done an Outreach Access course at Wollongong TAFE in 1994 and a Diploma in Community Welfare and Social Science at Shellharbour TAFE between 1995 and 1997. She had worked in the social work departments of Wollongong and Port Kembla hospitals before joining the Centre in 1998 as a part-time employee and volunteer (black 2/399). Within a year or so she had become relief manager who acted when Pratt was away (2/400).

33 As the Judge found, the boys were regular attenders at the Centre and well known to the staff (black 1/195). The boys knew Pratt’s first name (1/111) and she knew Hart’s first name (1/122). Prior to this incident Pratt considered that she had a good relationship with them (1/196), she thought that Hart was a good kid (1/197) and that what had happened on 3 February was totally unexpected and a complete shock (1/196). Humphreys also knew them because they were regular visitors (2/402). Crawford did not know them personally but had seen them at the Centre before (black 1/13) while Gralton knew Bertout but not Hart (2/319).

34 Since these boys were so well known, particularly by Pratt and Humphreys, a locked front door and buzzer system would not have prevented them entering the Centre on 3 February. On the probabilities Pratt would have allowed them inside despite their unruly behaviour and the knowledge that they were affected by alcohol. The Judge having found (para [15]) that security cameras would not have prevented these incidents because the boys were well known did not explain how a locked door and buzzer system would have done so.

35 There was no immediate alarm when the boys first entered the Centre and at that stage the police were not called and the distress alarm was not activated. Later when they were seen coming back and it was thought that Hart had a gun Pratt took charge. The police were called, the distress alarm was activated, and Pratt and two of the ladies locked themselves in her office. Pratt’s actions at this stage were entirely appropriate and it is not apparent how formal protocols or further training could have made any difference.

36 The third measure suggested by the Judge was the installation of a protective counter in the office to separate staff from clients. He did not elaborate on the type of counter he had in mind but since he said that his options were “not a matter of money” it is apparent that he did not envisage a counter with an alarm operated bullet proof glass barrier of the type found in banks.

37 It is not apparent how an open wooden counter could have prevented or mitigated these traumatising incidents involving the use of a replica pistol to threaten staff. Some time later the Centre installed a counter of some kind which was not identified in the evidence but this does not provide evidence that an open wooden counter would have protected the staff from these boys on 3 February.

38 The Judge’s explicit findings of breach based on the failure to adopt the three safety precautions he identified and his implicit finding that they would have prevented or mitigated the traumatising effect of the boys’ conduct cannot be supported. In my judgment the Centre’s appeals and the Health Service’s cross-appeal succeed on these issues and it is not necessary to consider other questions. Gralton’s appeal which challenged the differential judgments entered against the Centre and the Health Service fails as a necessary consequence. The following orders should be made:

CA 41116 of 2004
Berkeley Development Association Inc v Gralton


(1) Appeal allowed with costs.

(2) Judgment for the plaintiff in the District Court against the Association set aside.

(3) In lieu thereof judgment in the action for the Association with costs.

(4) The respondent to have a certificate under the Suitors’ Fund Act 1951.

CA 41117 of 2004
Berkeley Development Association Inc v Crawford


(1) Appeal allowed with costs.

(2) Judgment for the plaintiff in the District Court set aside.

(3) In lieu thereof judgment for the defendant in the action with costs.

(4) The respondent to have a certificate under the Suitors’ Fund Act 1951.

CA 41136 of 2004
Gralton v Berkeley Development Association Inc & Anor


(1) Appeal dismissed with costs.

(2) Cross-appeal by Illawarra Area Health Service allowed with costs.

(3) Judgment for the plaintiff in the District Court against the Health Service set aside.

(4) In lieu thereof judgment for that defendant in the action with costs.

(5) The cross-respondent to have a certificate under the Suitors’ Fund Act 1951.

39 BRYSON JA: I agree with Handley JA.

40 BASTEN JA: I agree with the orders proposed by Handley JA in each matter and with his reasons.

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