Chiu v Liebherr-Australia Pty Ltd
[2025] WADC 6
•20 FEBRUARY 2025
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: CHIU -v- LIEBHERR-AUSTRALIA PTY LTD [2025] WADC 6
CORAM: REGISTRAR NAIRN
HEARD: 3 OCTOBER 2024 & SUPPLEMENTARY SUBMISSIONS FILED ON 28 OCTOBER 2024 BY DEFENDANT & 18 NOVEMBER 2024 BY PLAINTIFF
DELIVERED : 20 FEBRUARY 2025
FILE NO/S: CIV 5211 of 2022
BETWEEN: MING-LAN CHIU
Plaintiff
AND
LIEBHERR-AUSTRALIA PTY LTD
Defendant
Catchwords:
Practice and procedure - Pleadings - Defendant's application to strike out statement of claim pursuant to O 20 r 19 Rules of the Supreme Court 1971 (WA) - Defendant's alternative application for summary judgment pursuant to O 16 r 1 Rules of the Supreme Court 1971 (WA) - General principles - Leave to replead where statement of claim previously struck out in its entirety in Chiu v Liebherr-Australia Pty Ltd [2024] WADC 5
Claims arising out of suspension and termination of employment - Breach of employment contract - Negligence - Negligent misstatement
Implied terms of employment contract - Terms implied in fact or by operation of law - Whether employer has duty of good faith
Damages sought for pecuniary and non-pecuniary loss - Employment law context - Psychiatric harm - Impact of Elisha v Vision Australia Ltd [2024] HCA 50
Issue estoppel - Ability to pursue contract and tort claims in face of findings made in Fair Work Commission decision regarding unfair dismissal under the Fair Work Act 2009 (Cth)
Whether negligence claim otherwise barred in whole or part by operation of common law provisions of workers' compensation legislation - Application of, and transitional provisions of, Workers Compensation and Injury Management Act 2023 (WA) and impact on operation of Workers' Compensation and Injury Management Act 1981 (WA)
Legislation:
Fair Work Act 2009 (Cth), s 385, s 392, s 394
Rules of the Supreme Court 1971 (WA), O 16 r 1, O 20 r 19
Workers' Compensation and Injury Management Act 1981 (WA), s 5, s 93E, pt IV
Workers Compensation and Injury Management Act 2023 (WA), s 6, s 7, pt 7 div 1 - div 4, pt 14
Result:
Defendant's application to strike out statement of claim allowed in part with partial leave to replead granted to the plaintiff
Defendant's application for summary judgment dismissed
Representation:
Counsel:
| Plaintiff | : | In person |
| Defendant | : | Mr A J C Mossop |
Solicitors:
| Plaintiff | : | Not applicable |
| Defendant | : | Ai Group Workplace Lawyers |
Case(s) referred to in decision(s):
AA v Trustees of the Roman Catholic Church for the Diocese of Maitland‑Newcastle [2024] NSWSC 1183
Addis v Gramophone Company Ltd [1909] AC 488
Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88
Armet v CFC Consolidated Pty Ltd [2019] WASCA 165
Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344
Bartlett v Australia & New Zealand Banking Group Ltd [2016] NSWCA 30; (2016) 92 NSWLR 639
Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20
BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266
Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558
Chiu v Liebherr‑Australia Pty Ltd [2024] WADC 5
Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169; (2014) 312 ALR 356; (2014) 88 ALJR 814; (2014) 244 IR 425; (2014) 66 AILR 102-240
Dafallah v Fair Work Commission [2014] FCA 328
Daynes v I-MED Central Queensland Pty Ltd [2024] NSWSC 1064
Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58; [2012] 2 AC 22
Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (in liq) (1993) 43 FCR 510
Elisha v Vision Australia Ltd [2024] HCA 50
Foran v Wight (1989) 168 CLR 385
Girgis v Poliwka [No 6] [2019] WASC 230
Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd [1972] HCA 36; (1972) 128 CLR 529
Gray t/as Clarence Valley Plumbing Services v Ware Building Pty Ltd [2013] NSWCA 271
Haley v Laing O'Rourke Australia Management Services Pty Ltd (No 8) [2024] FedCFamC2G 779
Harden v Willis Australia Group Services Pty Ltd; Willis Australia Group Services Pty Ltd v Harden [2021] NSWSC 939
Harvey Industries Group Pty Ltd v Jones [2017] WADC 74
Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; (1992) 173 CLR 473; (1992) 106 ALR 611; (1992) 66 ALJR 365
Helmers v Como [2014] WASC 394
Johnson v Unisys Ltd [2001] UKHL 13; [2001] 2 All ER 801; [2001] 2 WLR 1076; [2001] ICR 480; [2001] IRLR 279; [2001] Emp LR 469
Keybridge Capital Ltd v Molopo Energy Ltd [2024] NSWSC 779
Lee v Lawfirst Pty Ltd [No 2] [2023] WASCA 166
Martinez as trustee for Martinez HWL Practice Trust as representative of the partners trading as HWL Ebsworth Lawyers v Griffiths as trustee for the Griffiths HWL Practice Trust [2019] NSWCA 310
McGavin v McGavin [2024] WASC 408
Meredith v Commonwealth of Australia (No 2) [2013] ACTSC 221
Mineral Resources Ltd v Destec Pty Ltd [No 5] [2024] WASC 449
Ming‑Lan Chiu v Liebherr‑Australia Pty Ltd [2022] FWC 1842
Murphy v Abi-Saab (1995) 37 NSWLR 280
Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199; (2016) 333 ALR 569
Parker v Garry Crick's (Nambour) Pty Ltd [2024] QDC 20
Pettit v Evolution Mining Ltd [No 2] [2017] WADC 68
Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13; (1973) 130 CLR 575
Pigozzo v Mineral Resources Ltd [2022] FCA 1166
Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234
Rogan-Gardiner v Woolworths Ltd [No 2] [2010] WASC 290
Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2007] NSWSC 104
Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217
Scanlan v 2-4 McCabe Pty Ltd [2023] WASCA 135
Scapin v The University of Notre Dame Australia [2018] FCA 906
Smethurst v Commissioner of Police [2020] HCA 14
Smith v Ventia Pty Ltd [2023] NSWSC 517
State of New South Wales v Paige [2002] NSWCA 235
Summertime Holdings Pty Ltd v Environmental Defender's Office Ltd (1998) 45 NSWLR 291
TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130
The Bishop of the Roman Catholic Diocese of Wagga Wagga, Mark Edwards v TJ (a pseudonym) [2024] VSCA 262
Wilcox v Chapple [2024] NSWSC 1394
Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381
XY v WA Country Health Service [2016] WASC 202
Zheng v Jin [2024] NSWCA 293
Zurich Australian Insurance Ltd v CIMIC Group Ltd [2024] NSWCA 229
REGISTRAR NAIRN:
The defendant applies by chamber summons filed 17 June 2024 for orders to strike out the plaintiff's further re‑amended statement of claim filed 3 May 2024 (FASOC) alternatively for summary judgment against the plaintiff (the defendant's applications).
The defendant's applications were originally supported by submissions filed 17 June 2024.
The plaintiff in opposition filed an affidavit on 29 July 2024, and an outline of submissions on 20 September 2024.
Oral submissions were also made in respect of the plaintiff's application at a special appointment hearing on 3 October 2024.
At that hearing, directions were made for the parties to make supplementary submissions on certain discrete issues.
Pursuant to those directions, the defendant filed supplementary submissions on 28 October 2024 and the plaintiff filed responsive supplementary submissions on 18 November 2024.
In summary I have found as follows:
(a)the defendant's application for summary dismissal of the plaintiff's claim is dismissed;
(b)the defendant's application to strike out the FASOC is partially successful, in that:
(i)pars 8, 13 and 20 of the FASOC should be struck out pursuant to O 20 r 19(1)(d) of the Rules of the Supreme Court 1971 (WA) (RSC), on the grounds of an established issue estoppel; and
(ii)pars 14 - 19 of the FASOC should be struck out pursuant to O 20 r 19(1)(a) of the RSC, on the grounds that the negligent misstatement pleading contained within those paragraphs does not disclose a reasonable cause of action;
(c)otherwise, the defendant's application to strike out the FASOC be dismissed; and
(d)the plaintiff has leave to replead the FASOC, such leave being limited to the repleading of material facts the subject of pars 8 and 13 of the FASOC only.
Regrettably, to reach this outcome my reasons are far lengthier than I had originally anticipated. This reflects the number and complexity of the issues that have arisen.
Moreover, I am mindful that one of the parties to the action is self‑represented, and I considered it important that, insofar as the plaintiff takes the opportunity to replead, some useful guidance is presented to the parties, in the hope that any further interlocutory squabbling between the parties as to the plaintiff's statement of claim is minimised.
The plaintiff's action in this court
It is necessary to briefly trace the history of the proceedings to put the defendant's applications in context.
The action was commenced by a writ of summons issued 29 November 2022.
The first statement of claim was filed 29 November 2022.
Following an unsuccessful mediation, by chamber summons filed 8 May 2023, the defendant brought an application to strike out the entirety of the statement of claim, alternatively for summary judgment against the plaintiff.
By orders made 16 August 2023, Registrar Jeyamohan ordered that the statement of claim be struck out in its entirety and gave leave for the plaintiff to replead. The defendant's application filed 8 May 2023 was in effect otherwise adjourned.
Pursuant to that leave, the plaintiff filed an amended statement of claim on 13 September 2023 (ASOC).
In response, the defendant renewed its application filed 8 May 2023, this time attacking the ASOC.
By orders made 1 February 2024, Registrar Jeyamohan ordered that the ASOC be struck out in its entirety and dismissed the defendant's application for summary judgment.[1]
[1] Chiu v Liebherr‑Australia Pty Ltd[2024] WADC 5 (Chiu).
In striking out the ASOC, Registrar Jeyamohan relevantly found as follows:
62In the present matter, the ASOC continues to suffer from the same limitations of its predecessor as it pleads allegations at too high a level of generality and fails to sufficiently inform the defendant what it must meet with clarity. By way of example, no facts are pleaded which lead to the conclusion that the defendant acted in breach of contract in requiring the plaintiff to comply with the Direction and the plaintiff's argument in this regard was difficult to understand.
…
64… the pleadings in their present form remain ambiguous or not reasonably intelligible and continue to raise immaterial or irrelevant issues. The matters pleaded in the ASOC have not been done with any degree of particularity and raise a case against the defendant in terms which are simply too general. Further, the ASOC contains irrelevant or unnecessary pleas by the plaintiff that appear by way of assertion and opinion which have no place in pleadings. The combined effect resulting in a pleading that is liable to be struck out on the basis that it will prejudice, embarrass or delay the fair trial of the action where the defendant must traverse the allegations and, thereby, raise false issues.
65The ASOC the subject of the Application is some 13 pages long and much of the information set out in the ASOC has no proper place in a pleading as it is full of irrelevancies and it fails to focus on the real issues in this case. Simply put, the ASOC is of a quality that a defendant should not have to grapple with. This in itself warrants the ASOC being struck out when one has regard to the legal principles as set out in Vantage Holdings Group Pty Ltd v Donnelly [No 4].
66For these reasons I consider that it is appropriate to strike out the whole of the ASOC. However, I propose to give the plaintiff leave to amend if sought.
Importantly, Registrar Jeyamohan did not make a positive finding that the plaintiff's claims in contract, negligence and negligent misstatement were unarguable or doomed to fail. Rather it was the manner in which those claims were expressed in the pleading that formed the basis of the strike out.[2]
[2] Chiu [71] - [72].
Following an application by the plaintiff filed 13 February 2024, by orders made 12 March 2024, Registrar Jeyamohan granted leave to the plaintiff to replead the statement of claim.
The plaintiff then filed the FASOC on 3 May 2024 which is the subject of the defendant's current application.
The FASOC therefore represents the plaintiff's third attempt to plead out her case.
The defendant's strike-out application
The defendant seeks an order that the entirety of the FASOC be struck out and the action be dismissed pursuant to O 20 r 19(1)(a), r 19(1)(b) and r 19(1)(d) of the RSC.
O 20 r 19(1) of the RSC is in the following terms:
The Court may at any stage of the proceedings, subject to subrule (3), order to be struck out or amended any pleading, or the indorsement of any writ in the action, or anything in any pleading or in the indorsement on the ground that -
(a)it discloses no reasonable cause of action or defence, as the case may be; or
(b)it is scandalous, frivolous or vexatious; or
(c)it may prejudice, embarrass or delay the fair trial of the action; or
(d)it is otherwise an abuse of the process of the Court,
and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
The defendant's summary judgment application
The defendant seeks (in the alternative to its strike‑out application) an order that summary judgment be entered for the defendant pursuant to O 16 r 1(1) of the RSC.
The relevant legal principles governing the defendant's applications
The relevant legal principles informing both the strike-out application and the summary judgment application are set out in the reasons of Registrar Jeyamohan.[3] I respectfully adopt those statements of the law, with the following additions.
[3] Chiu [27] - [29].
First, the statements of general principle made by the Court of Appeal in Lee v Lawfirst Pty Ltd [No 2].[4]
[4] Lee v Lawfirst Pty Ltd [No 2] [2023] WASCA 166 [80] - [82] (Lee).
Secondly, given the plaintiff is self-represented, I would also add the recent decision in McGavin v McGavin[5] where Lundberg J held as follows:
10It has been said that self-represented litigants will inevitably possess an imperfect knowledge of the complexities that are inherent in the pleading process. In light of this, in dealing with the pleadings of self-represented litigants, the Court must exercise a certain level of discretion to ensure that justice is served both equitably and effectively. In doing this the Court must respect an individual's right to resort to the justice system in person, whilst also ensuring not to penalise an opposing party for seeking representation.
11The following observations of Le Miere J in Tobin v Dodd & Ors bear repetition:
The court should approach applications for the peremptory termination of the litigation of litigants in person with a view to ensure that in a possibly ill‑expressed and unstructured statement of claim there is no viable cause of action which, with appropriate amendment and a little assistance from the Court, could be put into proper form: Wentworth v Rogers (No 5) (1985) 6 NSWLR 534 at 536, 543. The Court will approach matters involving litigants in person with a degree of flexibility, bearing in mind that the rules of pleading are a means to an end, not an end in themselves.
(footnotes omitted)
[5] McGavin v McGavin [2024] WASC 408.
Thirdly, and in my view related to the second point above, I respectfully adopt the following observation of Hill J in Mineral Resources Ltd v Destec Pty Ltd [No 5]:[6]
The court is not required to strike out a statement of claim that is 'less than optimal'. Where 'there is enough' in the statement of claim and particulars (including schedules) to enable the defendant to adequately prepare to meet the case against it, the court may exercise its discretion to refuse to strike out a defective pleading.
(footnotes omitted)
[6] Mineral Resources Ltd v Destec Pty Ltd [No 5] [2024] WASC 449 [31] (Mineral Resources).
The events underpinning the plaintiff's claims
It is useful to set out a brief chronology of key events that emerge from the FASOC:
Date
Alleged event
Pleading reference
16 November 2020
Plaintiff enters employment contract with defendant for position as a 'storeperson'.
FASOC, par 3.
12 November 2021
Defendant gives direction (wrongly) identifying plaintiff's role as requiring mandatory COVID-19 vaccination, failing which plaintiff may be excluded from workplace as from 1 January 2022.
From this point, the defendant commenced wrongfully enforcing the COVID-19 vaccination policy.
FASOC, pars 4, 11.
3 December 2021
Plaintiff by letter questions validity of 12 November 2021 direction.
FASOC, par 5 (particular (b)).
13 December 2021
Defendant responds to plaintiff's letter of 3 December 2021, and reiterates 12 November 2021 direction.
FASOC, par 11.
1 January 2022
Date by which defendant commences excluding plaintiff from the workplace.
FASOC, pars 6, 11.
20 January 2022
Telephone meeting between plaintiff and defendant. Plaintiff questions validity of 12 November 2021 direction.
FASOC, pars 5 (particular (b)), 17.
25 January 2022
Date by which the defendant ceased wrongfully enforcing the COVID-19 vaccination policy.
FASOC, par 11.
27 January 2022
Plaintiff by letter questions validity of 12 November 2021 direction.
FASOC, pars 5 (particular (b)), 17.
31 January 2022
By letter, defendant (wrongfully) terminates plaintiff's employment.
FASOC, par 7.
The FASOC pleads three discrete claims arising out of these events:
(a)a claim for breach of contract;
(b)a claim in negligence; and
(c)a claim for negligent misstatement.
Process of analysis of the FASOC
In order to determine whether the plaintiff's pleaded claims are liable to be struck out in whole or part, or are otherwise exposed to summary judgment, I adopt the following process, by reference to each of the pleaded categories of claim:
(a)whether the claim as pleaded is intelligible;[7]
(b)whether the claim as pleaded on its face (and on the face of any documents upon which it relies)[8] discloses a reasonable cause of action known to the law; and
(c)whether the claim, though being intelligible and disclosing cause of action on its face, is nonetheless liable to be struck out for some other reason.
[7] I consider this in view of the defendant's submission that the FASOC is so deficient that the defendant should be excused from having to grapple with it: defendant's outline of submissions filed 17 June 2024, par 5.
[8] In taking this approach, I have regard to LexisNexis, Civil Procedure Western Australia, vol 1 (at Service 200) [20.19.5] (Red Book), specifically those cases indicating that it is appropriate, even on a strike-out application under O 20 r 19(1)(a), to have regard to the documents referred to in the pleading, and to strike out a pleading which is not manifestly consistent with the document upon which it relies. See also Mineral Resources [35] (Hill J).
In applying the third step of this process, aside from considering any arguable legal bar to the claim (eg issue estoppel), I also have regard to relevant provisions of O 20 of the RSC, including (where appropriate) whether O 20 r 19(1)(c) is engaged (ie whether the pleading 'may prejudice, embarrass or delay the fair trial of the action').
I am mindful that the defendant's application did not expressly invoke O 20 r 19(1)(c) of the RSC. However, various complaints made by the defendant in its submissions did go to the clarity and comprehensibility of the FASOC. I consider these complaints best directed to O 20 r 19(1)(c), and I have accordingly proceeded on the basis that the defendant relies on O 20 r 19(1) generally.[9]
[9] Ultimately nothing turns on my consideration of O 20 r 19(1)(c), as in the end result, I have not ordered any part of the FASOC to be struck out based on that subrule.
My approach in applying O 20 r 19(1) of the RSC is to do so in a pragmatic way, rather than demand an ideal of pleading perfection. If I am satisfied that the 'gist' of an arguable case is apparent, and reasonably capable of being pleaded to by the defendant, that is enough.
I now turn to consider each of the three pleaded claims.
The plaintiff's breach of contract pleading
Distilling the plaintiff's pleaded breach of contract claim
The relevant terms of the contract
The plaintiff pleads that the parties were parties to an employment contract, the relevant terms of which were as follows:
(a)an express clause (cl 2.1) that required the plaintiff to comply with lawful directions given to her by the defendant;[10] and
(b)a term that obliged the defendant in exercising any discretionary contractual power (including to give directions) to act in good faith and fairly (Good Faith Obligation).[11]
Vaccination direction
[10] FASOC, par 3.
[11] FASOC, par 5.
The plaintiff further pleads that 'the defendant committed an anticipatory breach of the contract' in giving a direction to the following effect:
(a)the plaintiff's role with the defendant was such that the plaintiff was required to have a COVID-19 vaccination in order to continue working from 1 January 2022; and
(b)if the plaintiff did not have that vaccination, the plaintiff may or would be excluded from the workplace from 1 January 2022.
(vaccination direction).[12]
[12] FASOC, par 4.
The plaintiff asserts that the vaccination direction was an 'anticipatory breach' of contract on the following grounds:
(a)the defendant had misread the State government's mandatory COVID-19 vaccination policy, which in fact did not relevantly apply to the plaintiff and by extension there was no legal requirement for the plaintiff to be vaccinated;[13] and
(b)to the extent that the defendant wished to rely on its contractual power to give directions to support the validity of the vaccination direction, it could not do so because the giving of the vaccination direction was contrary to the Good Faith Obligation in that:
(i)contrary to the tenor of the vaccination direction, there was no legal requirement for the plaintiff to be vaccinated;
(ii)the defendant refused to disclose to the plaintiff the 'professional advice' which the defendant says it relied on in giving the direction; and
(iii)the defendant maintained the vaccination direction despite it being questioned by the plaintiff.[14]
[13] FASOC, par 4.
[14] FASOC, par 4.
Pausing here, it seems to me that the plaintiff's use of the phrase 'anticipatory breach' is reflective of the fact that the vaccination direction foreshadowed a future event, namely 'exclusion' from the workplace if she had not been vaccinated by 1 January 2022. That is when the subject matter of the direction would be enforced.
Upon a fair reading of the pleading as a whole, it is apparent that the plaintiff is saying that such enforcement, occurring subsequent to the vaccination direction, would be an actual breach in and of itself. Put another way, the vaccination direction 'anticipates' a future event (namely its enforcement by way of excluding the plaintiff from the workplace).
Accordingly, I do not read the pleading as invoking the technical legal concept of 'anticipatory breach' that emerges from cases such as Foran v Wight.[15]
Actual breach by workplace exclusion
[15] Foran v Wight (1989) 168 CLR 385.
Further, the plaintiff asserts that the defendant did in fact exclude the plaintiff from the workplace from 1 January 2022, and its conduct in doing so breached the contract.[16]
[16] FASOC, par 6.
The nature of the breach pleaded is that the workplace exclusion was not authorised by the contract, because:
(a)the plaintiff was ready, willing and able to perform her duties at all material times;[17]
(b)the vaccination direction which had formed the basis of the exclusion was unlawful, it being given in breach of the Good Faith Obligation;[18] and
(c)there was no other basis in the contract or law justifying the exclusion.[19]
Actual breach by termination
[17] FASOC, par 6.1.
[18] This emerging from FASOC, pars 4 - 5.
[19] FASOC, par 6.2 (particular (a)).
The plaintiff then asserts a further breach of contract on the part of the defendant that occurred when the defendant terminated the plaintiff's employment contract on 31 January 2022, such termination being 'without any lawful grounds and in contravention of the employment contract's terms'.[20]
Consequential loss and damage
[20] FASOC, par 7.
The plaintiff pleads that, as a result of the defendant's breaches, being:
(a)the workplace exclusion; and
(b)her wrongful termination,
the plaintiff incurred loss and damage, namely:
(a)financial losses including loss of immediate income and loss of future earning capacity;
(b)emotional distress (psychological injury); and
(c)damage to professional reputation.[21]
Does the plaintiff claim psychiatric injury or mere emotional distress?
[21] FASOC, par 8.1. Note that, for the reasons given below, I consider that the plaintiff's emotional distress claim is in substance a claim for psychological injury rather than 'mere' emotional distress.
Conscious of the legal distinction between 'mere' emotional distress and psychiatric harm (or injury),[22] a threshold issue arises as to the nature of the plaintiff's emotional distress claim.
[22] See Elisha v Vision Australia Ltd [2024] HCA 50 [66] (Elisha).
While at one point the FASOC expresses the claim as being one for 'emotional distress',[23] I do not think that this phrase is to be read narrowly (as a lawyer versed in the law might).
[23] FASOC, par 8.
On a fair reading of the pleading as a whole, I apprehend the plaintiff's claim extends beyond 'mere' emotional distress and ventures into the field of psychiatric harm or injury. In this regard I note that:
(a)the particulars to par 8 of the FASOC refer to 'long-term emotional … harm' which in my view plainly goes beyond transitional distress associated with the breach; and
(b)outside of the breach of contract pleading, the FASOC refers to the plaintiff having suffered 'significant psychological harm'.[24]
[24] FASOC, par 9.1.
I am reinforced in my view that the plaintiff's emotional distress claim is in substance one for psychiatric injury by the fact that the plaintiff, in her written supplementary submissions:
(a)did not seek to distinguish her claim from the case of Elisha on the basis that she was claiming mere emotional distress, as opposed to psychiatric injury which was the subject of that decision; and
(b)did not attempt to argue that her emotional distress was sufficiently mild or transient so as to exempt her claim from the operation of workers' compensation legislation (on the basis that mere distress is not a relevant injury to which the legislation applies).[25]
Relief sought
[25] See plaintiff's supplementary submissions filed 18 November 2024, pars 15, 21 ‑ 22.
For her losses, the plaintiff claims the sum of $380,000 plus an apology.[26]
[26] FASOC, par 8.1.
The particulars given in the FASOC clarify that the $380,000 is based on income that the plaintiff would have earned but for being 'wrongfully excluded and terminated', and the apology is in respect of the emotional distress and damage to reputation.[27]
Breach of contract pleading is intelligible
[27] FASOC, par 8.1 (particulars (a) and (b)).
Having reached this point, I am satisfied that pars 3 - 8 of the FASOC are intelligible.
That being the case, I do not accept the defendant's submissions to the effect that the quality of the pleading is so deficient that the defendant should be excused from having to grapple with it.[28]
[28] Defendant's outline of submissions filed 17 June 2024, par 5.
I have recounted above my understanding of the basis of the plaintiff's case for breach of contract. In simple terms it is as follows:
(a)the defendant excluded the plaintiff from the workplace from 1 January 2022, such exclusion being given on the basis of the plaintiff's failure to comply with the vaccination direction;
(b)the defendant's exclusion of the plaintiff from the workplace was a breach of the employment contract because it was underpinned by the vaccination direction compelling the plaintiff to be vaccinated in order to continue working, which vaccination direction was itself beyond the scope of the defendant's contractual power to give directions;
(c)the defendant further breached the employment contract with the plaintiff in terminating the plaintiff's employment, such termination again being underpinned by the unlawful vaccination direction; and
(d)the plaintiff suffered loss and damage by reason of the workplace exclusion and termination breaches, namely a loss of income, loss of earning capacity, distress (amounting to psychological harm) and reputational damage.
To be clear, the pleading alleges two separate contractual wrongs were committed by the defendant:
(a)the workplace exclusion breach which preceded termination; and
(b)the termination of the contract.[29]
[29] There is no allegation that the act of giving the 12 November 2021 direction (though pleaded in substance as a breach) itself gave rise to monetary loss.
It is necessary to make this clarification because the plaintiff asserts (in her supplementary submissions) that her contractual claim is not concerned with the termination of employment; rather only with events which preceded termination.[30] I reject that assertion, since it is directly contrary to the plain terms of the FASOC, particularly pars 7.1 and 8.1.
Whether the breach of contract pleading discloses an arguable cause of action
[30] See plaintiff's supplementary submissions, pars 6, 14, 16 - 20.
I now turn to consider whether the plaintiff's pleaded breach of contract claim discloses a cause of action known to the law. If it does not, it will be liable to be struck out under O 20 r 19(1)(a) of the RSC.
Whether it is arguable that the defendant breached the employment contract in enforcing a workplace exclusion
Whether it is arguable that the defendant was subject to the Good Faith Obligation
The plaintiff's pleading goes beyond simply contending that there was no contractual power for the defendant to exclude the plaintiff from the workplace. Rather, the plaintiff contends that the vaccination direction which led to the workplace exclusion was given in breach of the Good Faith Obligation.
Thus, the invoking of a breach of the Good Faith Obligation is in aid of the plaintiff's case that the workplace exclusion was unlawful. Absent that breach being pleaded, arguably the plaintiff's case would not disclose a cause of action at all since it could be said that the defendant was entitled to direct the plaintiff's exclusion under the defendant's general contractual powers to give directions.
In that regard, cl 2.1 of the contract required the plaintiff to comply with all directions given to her by the defendant. To similar effect, cl 17 stated that the defendant's policies and procedures, while not contractual, were to be treated as directions with which the plaintiff must comply.
The plaintiff is in substance saying that these contractual powers cannot be relied upon here since they are subject to good faith limits which the defendant exceeded.
The basis for the Good Faith Obligation is expressly stated in the FASOC to be based on the principles established in Burger King Corporation v Hungry Jack's Pty Ltd.[31]
[31] Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558 (Burger King).
Burger King concerned a clause in a franchise agreement which was conditional upon a party obtaining 'operational, financial and legal approval' of the other party, which such approval was 'in the sole discretion of the other party' having regard to an extensive number of considerations. The court found that the franchisor's power to grant or withhold approval, though expressed as a 'sole discretion', had to be subject to some constraints, otherwise the entirety of the contractual bargain would be undermined. The court was satisfied that there was an implied obligation in the agreement to act reasonably and in good faith in exercising the discretion of whether to approve or not. The implication was one of law, rather than fact.[32]
[32] Burger King[159] - [186].
Plainly, this case is not 'on all fours' with Burger King. Some obvious differences are as follows:
(a)Burger King was a commercial franchise agreement; whereas here is an employment contract; and
(b)the discretion to be exercised in this case is different (namely a power to give a direction to an employee) to Burger King (a discretion to withhold approval).
I am also mindful that since Burger King was decided there has been a considerable amount of case law relevant to the extent to which good faith ought to be implied in contracts generally or specific species of contracts.
It suffices to note some relatively recent examples arising from workplace disputes.
In XY v WA Country Health Service[33] Pritchard J was called upon to consider whether and to what extent an employment contract[34] carried with it an implied obligation of good faith, in a context where an interlocutory injunction was sought against a hospital's (defendant's) decision to impose a suspension on a doctor (the plaintiff).
[33] XY v WA Country Health Service [2016] WASC 202 (XY).
[34] Or at least a contract akin to an employment contract - the contract under consideration in that case was a medical services agreement between a doctor and a hospital.
The plaintiff argued, amongst other things, that there was an implied term in the contract that the defendant hospital would act reasonably, alternatively in good faith, in directing a suspension of the plaintiff.[35] Although her Honour did not directly address the good faith aspect of the argument, her Honour did consider that the law in the area was 'evolving' and it remained unclear whether the plaintiff would succeed in establishing that the direction to suspend was one which was fettered by an obligation to act reasonably.[36] Plainly her Honour considered the plaintiff's case was arguable.
[35] XY [76].
[36] XY [82].
In Pettit v Evolution Mining Ltd [No 2],[37] McCann DCJ considered that the High Court's decision in Commonwealth Bank of Australia v Barker[38] precluded terms being implied by law that would import mutual obligations of trust and confidence, good faith and fair dealing between parties to an employment contract.[39] In his Honour's view, prior decisions of other courts tending to suggest otherwise were taken to be overruled.[40]
[37] Pettit v Evolution Mining Ltd [No 2] [2017] WADC 68 (Pettit).
[38] Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169; (2014) 312 ALR 356; (2014) 88 ALJR 814; (2014) 244 IR 425; (2014) 66 AILR 102-240 (Barker).
[39] Pettit [41] - [49].
[40] Pettit [46].
By contrast, in Harvey Industries Group Pty Ltd v Jones[41] Derrick DCJ (as his Honour then was) considered that, notwithstanding the High Court's decision in Barker, it remained an open question as to whether a good faith term is implied by law into employment contracts (at least outside of the context of a termination).[42]
[41] Harvey Industries Group Pty Ltd v Jones [2017] WADC 74 (Jones).
[42] Jones [105] - [106].
In Scapin v The University of Notre Dame Australia[43] Barker J declined to summarily dismiss the applicant's breach of contract claim based on an alleged breach of an implied duty of good faith. His Honour stated:
27Counsel for the respondents in oral submissions at the hearing of the summary judgment application accepted there was a 'slim argument' that the good faith implication might be open.
28In my view, while [the applicant] at trial may struggle to distinguish relevant authorities which suggest this cause of action is unsustainable, and a good faith term is not to be implied in law or fact into an employment contract, I am not satisfied I should condemn this claim to summary judgment at this stage of the proceeding. It should be finally determined at trial in light of other evidence.
[43] Scapin v The University of Notre Dame Australia [2018] FCA 906 (Scapin).
In Harden v Willis Australia Group Services Pty Ltd[44] Sackar J found that there is an implied duty in employment contracts to act in good faith, which the employer in that case breached when it directed its employee to tell a lie to a client of the employer's business.[45]
[44] Harden v Willis Australia Group Services Pty Ltd; Willis Australia Group Services Pty Ltd v Harden [2021] NSWSC 939 (Harden).
[45] Harden [430] - [435], [511].
In Smith v Ventia Pty Ltd[46] the parties had entered an employment contract in which the defendant employer had an express right to terminate the plaintiff's employment. The defendant exercised that right and terminated the plaintiff's employment.
[46] Smith v Ventia Pty Ltd [2023] NSWSC 517 (Fagan J) (Ventia).
The plaintiff contended that the contract was subject to the following implied terms, which the defendant had breached:
(a)first, an implied obligation in effect of good faith, requiring reasonable and honest conduct, which obligation was limited in the sense that it did not apply to or fetter the defendant's right to terminate;[47] and
(b)second, an implied obligation that the defendant's right to terminate the plaintiff's employment would be exercised honestly and reasonably, not capriciously or arbitrarily, and consistently with the contract's purposes (being a 'Reasonable Exercise of Discretion' implied term).[48]
[47] Ventia [12] - [13].
[48] Ventia [45].
Fagan J (without citing Harden) in essence decided as follows:
(a)as to the alleged good faith duty applying pre-termination, it took the plaintiff nowhere, since even if such a duty existed and was breached by the defendant employer, it could not have been causative of any loss to the plaintiff because, on the facts of Ventia even if the defendant had (in the lead up to termination) breached the good faith duty, that breach could not be causative of any loss to the plaintiff post-termination; rather the plaintiff's post-termination losses were caused by the defendant employer's exercise of its express contractual right to terminate the plaintiff's employment;[49]
(b)given that finding, it was unnecessary to determine whether the alleged good faith duty was to be implied into the parties' contract, either in fact or by operation of law;[50]
(c)as to the alleged 'Reasonable Exercise of Discretion' term said to fetter the defendant's express termination right, that term could not be implied as a matter of fact as it failed to meet the applicable tests for such implication;[51] and
(d)nor did such a term stand to be implied by law, the current state of the law being that there is no implied qualification to the express right of termination on notice.[52]
[49] Ventia [19] - [21], [27], [28], [43].
[50] Ventia [44].
[51] Ventia [47] - [48].
[52] Ventia [49], citing Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2007] NSWSC 104 [150] (Rothman J) (Russell); Bartlett v Australia & New Zealand Banking Group Ltd [2016] NSWCA 30; (2016) 92 NSWLR 639 [87] (Macfarlan & Meagher JJA agreeing) (Bartlett).
In Daynes v I-MED Central Queensland Pty Ltd[53] Cavanagh J was confronted by a case where the plaintiff employee sued the defendant employer on two alternative bases, one of which was that the defendant's power to terminate the plaintiff's employment was subject to an implied obligation of good faith, which the defendant breached in terminating the plaintiff in a manner which was arbitrary, unreasonable or capricious.
[53] Daynes v I-MED Central Queensland Pty Ltd [2024] NSWSC 1064 (Daynes).
Cavanagh J:
(a)referred to Harden as being a case where good faith was implied into an employment contract, but observed that this 'does not appear to have been taken up by a higher authority';[54]
(b)recognised authority to the effect that a contractual termination power which is subject to a requirement that the employer form a particular opinion may be subject to an obligation to act reasonably in forming that opinion;[55] and
(c)ultimately made no findings of law on such matters, on the basis that even if there was a good faith or reasonableness obligation, the defendant employer had not breached it on the facts.[56]
[54] Daynes [227].
[55] Daynes [228] - [229].
[56] Daynes [230].
Aside from these authorities in the employment context, I also note the unanimous judgment of the Court of Appeal in Scanlan v 2-4 McCabe Pty Ltd.[57] That case concerned an application for pre-action discovery, specifically an appeal against the learned master's refusal to accept that the appellant had an arguable case against the respondent on the basis that the respondent's ability to terminate an off-the-plan sale contract for a strata lot was subject to limits of good faith and reasonableness.
[57] Scanlan v 2-4 McCabe Pty Ltd [2023] WASCA 135 (Scanlan).
Under cl 2.1 of the parties' contract the respondent could terminate if the respondent (in its 'absolute discretion') considered that there had been insufficient pre-sales of the proposed strata lots during a given period (cl 2.1(a)) or an insufficient projection for the sale of the lots (cl 2.1(b)).
The Court of Appeal in Scanlan upheld the appeal against the learned master's decision. In doing so, the joint judgment acknowledged the appellant's position to the effect that limitations of good faith and reasonableness could arise to fetter a termination power on three alternative grounds:
(a)as a matter of contractual construction;
(b)by implication as a matter of fact; or
(c)by implication as a matter of law.
The joint judgment confined itself to consideration of the factual implication basis.[58]
[58] On the basis that, having regard to the authorities, 'a process of implication as a matter of fact provides an appropriate framework in which to evaluate whether to find conceptions of reasonableness and good faith as limitations on contractual powers and discretions': see Scanlan [79] - [82]. The court expressly did not preclude a finding that the duty could arise based on the alternative grounds, including by way of law. See Scanlan [82].
The joint judgment then proceeded to analyse whether there was a term implied in fact that fettered the respondent's termination power. In doing so, the court applied the criteria established in BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings[59] namely:[60]
1.the term must be reasonable and equitable;
2.the term must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;
3.the term must be so obvious that 'it goes without saying';
4.the term must be capable of clear expression; and
5.the term must not contradict any express term of the contract.
[59] BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266, 283 (BP Refinery (Westernport)).
[60] Scanlan [83].
The joint judgment concluded that these criteria were at least arguably satisfied by the appellant's proposed implied term.[61]
[61] Scanlan [84].
Further, the implied duty to act in good faith and reasonably would (at least arguably) be breached if the defendant terminated the sale contract for reasons extraneous to the respondent's ability to achieve pre-sales (eg in order to take opportunistic advantage of a rising market).[62]
[62] Scanlan [88] - [89].
Based on the authorities, I consider that:
(a)the law in the area of implied good faith obligations in contracts, including employment contracts, remains unsettled; and
(b)it is reasonably arguable that, at least during the currency of an employment relationship (ie pre-termination), an employer is subject to an implied duty to act in good faith in the giving of directions, and this duty can arise as a matter of construction, alternatively a matter of factual implication, alternatively an implication by operation of law.
A more difficult question arises as to whether a good faith obligation can fetter an otherwise unqualified right to terminate. The question does not arise in the context of the plaintiff's workplace exclusion case but is considered further below in the context of the plaintiff's termination case.
At any rate, in the context of the plaintiff's workplace exclusion breach case, I conclude that the plaintiff's pleading does disclose a reasonably arguable case to the effect that, in giving and enforcing the workplace exclusion direction, the defendant was subject to the Good Faith Obligation.
To be clear, I only construe the FASOC as incorporating an allegation that the Good Faith Obligation arises by implication of law, rather than being implied by fact. I say this because:
(a)in referring to Burger King, it is apparent that the plaintiff is reliant on a term being implied by law rather than fact; and
(b)at any rate, there is an insufficient pleading of material facts in the FASOC to disclose an arguable case for the implication of such a term as a matter of fact, having regard to the usual criteria that must be satisfied for such an implication.[63]
Whether it is arguable that the defendant breached the Good Faith Obligation
[63] Being those BP Refinery (Westernport) criteria identified and applied in Scanlan.
Turning to consider the content of a contractual duty to act in good faith, the authorities indicate the following:
(a)a duty of good faith does not require 'the interests of a contracting party to be subordinated to those of the other'[64] nor does it import fiduciary obligations;[65]
(b)a duty of good faith imports 'an obligation to act honestly and with a fidelity to the bargain; an obligation not to act dishonestly and not to act to undermine the bargain entered or the substance of the contractual benefit bargained for; and an obligation to act reasonably and with fair dealing having regard to the interests of the parties (which will, inevitably, at times conflict) and to the provisions, aims and purposes of the contract, objectively ascertained';[66] and
(c)the content of the duty is fact-sensitive in that the 'actual standard of fair dealing or reasonableness that is to be expected in any case will vary depending on the nature of the contract or relationship and interests of the parties'.[67]
[64] Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199; (2016) 333 ALR 569 [289] (Paciocco), cited in Harden [29].
[65] Harden [30] applying Paciocco [292] - [293].
[66] Paciocco [288], cited in Harden [28].
[67] Harden [30] applying Paciocco [290].
In this case, I consider it is arguable that the defendant breached the Good Faith Obligation in directing the plaintiff's workplace exclusion based on her vaccination status because (at least on the plaintiff's pleaded case):
(a)the direction wrongly asserted a legal foundation for its making which in fact did not exist;[68] and
(b)the defendant persisted in its position of requiring the plaintiff's vaccination (and related workplace exclusion) without addressing the plaintiff's legitimate questioning of the legality and necessity of the direction.[69]
[68] FASOC, par 4.
[69] FASOC, par 5.
It is at least arguable that such conduct on the part of the defendant operated to undermine a core component of the contractual bargain between them, namely that the plaintiff would be permitted to work for the defendant and thereby earn an income without being unduly or capriciously obstructed from doing so by the defendant.
Conclusion
Having regard to the above, I conclude as follows:
(a)it is arguable that the defendant was subject to the Good Faith Obligation when issuing directions to the plaintiff, including in connection with the enforcement of a workplace policy; and
(b)it is arguable that the defendant breached the Good Faith Obligation in enforcing the workplace exclusion and, by extension, the workplace exclusion was implemented in breach of the contract.
I emphasise that I am only classifying these matters as arguable. It is not necessary nor useful for me to offer any characterisation of the strength of the plaintiff's claim beyond that.
Whether it is arguable that the defendant breached the contract in terminating the plaintiff
As I have noted, the plaintiff pleads that the termination of her employment was 'without any lawful grounds and in contravention of the employment contract's terms'.
The defendant's stated basis for terminating the plaintiff's employment
Before revisiting the plaintiff's pleading, it is useful to understand the context in which her employment was terminated; including to ensure that the plaintiff's pleading is consistent with the documents it references.
The defendant's letter of termination dated 31 January 2022[70] relevantly:
(a)references 'a refusal to comply with the mandatory COVID-19 vaccination requirements';
(b)reiterates that the defendant considers that the plaintiff's role is one in respect of which vaccination is mandatory;
(c)alleges that the plaintiff's conduct indicates that she is not ready, willing or able to work; and
(d)indicates that the plaintiff's employment is terminated, effective from the date of the letter, but that the plaintiff will be paid two weeks' wages 'in lieu of notice'.
[70] Plaintiff's affidavit filed 29 July 2024, Attachment 14. The letter is expressly referenced in the FASOC, par 7.1.
I now turn to consider the employment contract provisions relating to termination.[71]
[71] The contract is found in the plaintiff's affidavit filed 29 July 2024, Attachment 1.
Clause 15.1 of the contract provides that '[i]n order to terminate [the plaintiff's] employment for any reason other than summary dismissal or redundancy [the defendant] will give [the plaintiff] the applicable period of notice …'. A table then appears indicating that an employee who has been employed for more than one year, but not more than three years, is entitled to two weeks' notice.
Clause 15.1 goes on to provide that '[a]s an alternative to requiring [the plaintiff] to work during the relevant notice period, [the defendant] may decide to pay [the plaintiff] in lieu of the entire notice period or require [the plaintiff] to work part of the notice period and pay [the plaintiff] for part of the notice period in lieu of notice'.
I note that:
(a)cl 15.1 only applies where an employee is terminated for a reason other than summary dismissal or redundancy; and
(b)cl 15.1 entitles the defendant (at its option) to bypass the minimum notice period provided that the defendant pays out in lieu of notice.
Clause 15.3 provides that the defendant 'may terminate [the plaintiff's] employment without notice at any time in the following indicative (but not exhaustive) circumstances …'. Various circumstances are outlined including 'fundamental or serious breach of our Policies, Procedures or Code of Conduct as varied from time to time'.
It is apparent that the defendant has purported to terminate the plaintiff's contract pursuant to cl 15.1 rather than cl 15.3. I say this because:
(a)although the termination letter outlines conduct on the part of the plaintiff of which the defendant disapproves, the defendant does not assert in the letter a right to summary dismissal; and
(b)the letter provides for the plaintiff to be paid two weeks' pay in lieu of notice, and this would not apply if the termination was a summary dismissal pursuant to cl 15.3.
That the termination was made pursuant to cl 15.1 is significant, since that clause purports to give the defendant a right to terminate an employee for any reason other than summary dismissal or redundancy.
Whether the plaintiff relies on a term akin to the Good Faith Obligation in the context of termination
I note that the FASOC does not expressly invoke obligations of good faith when it deals with the defendant's exercise of the contractual termination right.
If the FASOC, in alleging breach by reason of termination, was read strictly as being confined to a bare allegation that the termination was not authorised by the contract, the pleaded case would be liable to be struck out.
This is because cl 15.1 expressly gives the defendant the right to terminate, without express qualification or limits. That being so, how could it be said that the plaintiff's termination was in breach of the contract's terms?
However, I have proceeded on the basis of a broader construction of the pleading, under which the plaintiff contends the defendant's termination rights were subject to an implied good faith fetter, namely the same Good Faith Obligation relied on earlier by the plaintiff.
I consider that this construction of the pleading is the preferable one, particularly bearing in mind that the pleading expressly alleges that the defendant was subject to a 'good faith and fair dealing obligation' in the context of a 'discretionary power'.[72]
[72] FASOC, par 5.1 (particular (a)).
While that allegation was raised in the context of the workplace exclusion breach (and the vaccination direction it was based on), it is nonetheless expressed in general terms and it would be artificial to read the pleading (in the absence of express words) as excluding the use of the discretionary power to terminate from the scope of the same obligation.
The workplace exclusion and termination were discretionary acts of the defendant, and formed part of a continuum of conduct which began with the making of the impugned vaccination direction.
Whether it is arguable that the defendant's right to terminate is subject to a good faith obligation
I identified above that it is arguable that, at least during the currency of an employment contract, it is arguable that there is an implied duty of good faith imposed on an employer in exercising its rights under the contract.
The more difficult question is whether it remains open to argue such a term also operates to fetter an employer's right to terminate.
At least some of the recent authorities appear to explicitly reject such a proposition.[73] When taking this approach:
(a)in Rogan-Gardiner, Hall J relied upon Russell;[74]
(b)in Jones, Derrick DCJ relied on Russell and Rogan-Gardiner; and
(c)in Ventia, Fagan J relied upon Russell and Bartlett.[75]
[73] Rogan-Gardiner v Woolworths Ltd [No 2] [2010] WASC 290 [116], [125] - [126] (Rogan‑Gardiner); Jones [105] - [106]; Ventia [49] - [50].
[74] Russell [150] (Rothman J). Note that an appeal was dismissed: Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217.
[75] Bartlett [87] (Macfarlan & Meagher JJA agreeing at [107]).
Accordingly, Russell and Bartlett warrant closer attention on this point.
In Russell Rothman J concluded a duty of good faith (implied by law) could not apply to a general termination right in an employment contract. Rothman J stated:[76]
By its nature, an act terminating the contract of employment is inconsistent with the fulfilment of the contract of employment, its continuation, and the necessity to make it efficacious. Almost by definition, the implied duty, not to act to destroy the relationship of trust and confidence, will not interfere with the right of a party to a contract of employment to terminate the contract. It may be that the implied duty of good faith can operate at the point of termination, but it cannot operate in circumstances where the termination is, as a matter of fact and as a matter of law, without cause.
[76] Russell [141].
I observe the following about this passage:
1.Rothman J's finding was obiter, since it was not strictly necessary for Rothman J to make a finding in that regard, the plaintiff having run his case on the basis that the relevant breaches occurred pre-termination.[77]
2.Rothman J drew a distinction between, on the one hand, an implied duty of an employer not to destroy trust and confidence, and on the other hand, an implied duty of good faith.
3.While his Honour indicated that the former could not logically operate to fetter a termination right, his Honour expressly acknowledged that a duty of good faith 'can operate at the point of termination', at least other than where the termination was without cause 'as a matter of fact and as a matter of law'.
4.I interpret his Honour to be saying that where termination is based on (ie motivated by) a specific reason, it is possible that the legitimacy of that reason may be measured against compliance with a duty of good faith.
[77] Russell [142].
So, on my reading of Russell, it does not close the door to this plaintiff to argue that the defendant's termination rights are subject to an implied duty of good faith. To the extent that other authorities may suggest otherwise (Jones being an example), there nevertheless remains a platform to mount an argument that there is at least some scope for the duty of good faith to condition an employer's termination right.
Turning to Bartlett, Macfarlan JA (Meagher JA agreeing) concluded that there was no implied duty to act reasonably in exercising an express right to terminate employment 'for any reason' on four months' notice being given. Macfarlan JA took the view that an obligation to act reasonably in exercising a right to terminate employment 'for any reason' could not be implied, because:
(a)the obligation was a restriction that was inconsistent with the existence of an express right to terminate 'for any reason'; and
(b)was not otherwise justified by the authorities to which Macfarlan JA had had regard.[78]
[78] Bartlett [86] - [87] (Macfarlan JA), [107] (Meagher JA).
However, it is notable that the issue arose in Bartlett only in post‑hearing written submissions, and in circumstances where the parties' prior oral and written submissions had been directed elsewhere.
I also note that Simpson JA in Bartlett declined to join in ruling against the alleged duty to act reasonably when terminating, on the basis that its existence had not been the subject of full argument and that it would be wrong to reject the argument in the absence of such argument.[79]
[79] Bartlett [133] (Simpson JA).
I am also mindful of Scapin, where Barker J declined to summarily dismiss a claim based on a general implied duty of an employer to act in good faith, including when exercising rights, and which duty was not apparently limited to the pre-termination phase.
Furthermore, I note that in other contexts courts have been prepared to recognise general powers, including powers to bring an end to a contract, as being subject to implied restrictions.[80] Moreover, such recognition is consistent with Rothman J's acceptance in Russell of the possibility that a power to terminate may be subject to a good faith obligation in at least some circumstances.
[80] For example, see Gray t/as Clarence Valley Plumbing Services v Ware Building Pty Ltd [2013] NSWCA 271 [50] (Ward JA, Meagher & Leeming JJA agreeing). See also 'the well documented Australian experience of controlling the operation of general rescission clauses by preventing their use "for improper and extraneous purposes" …' referenced in Burger King [151], citing Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234, 268 (Priestley JA); Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd [1972] HCA 36; (1972) 128 CLR 529, 548; and Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13; (1973) 130 CLR 575, 587.
Ultimately, I conclude the plaintiff has an arguable case that the defendant's employment rights in cl 15.1 are subject to an implied duty of good faith. While cases such as Ventia and Jones appear to be considerable hurdles to the plaintiff succeeding on the basis of the existence of such a term, I am not persuaded that such a term is unarguable.
Whether it is arguable that the defendant breached the Good Faith Obligation in terminating the plaintiff's employment
I consider that it is at least arguable that the defendant breached the Good Faith Obligation in terminating the plaintiff's employment, for similar reasons to why such a breach was arguable in the context of the workplace exclusion.
It is apparent from the defendant's termination letter that the termination right was exercised for essentially the same reason as the workplace exclusion, being a mistaken (and unyielding) assumption or assertion that the plaintiff was required to be vaccinated in order to be permitted to work.
It is at least arguable that:
(a)the termination power was subject to the Good Faith Obligation which in turn required the defendant to engage with the plaintiff's legitimate querying of the validity of its approach; and
(b)if the defendant had complied with the Good Faith Obligation, the defendant would not have dismissed the plaintiff (on the basis that genuine engagement with the plaintiff's questioning of the defendant's position would have led to the defendant discovering the error of its ways).
I again emphasise that I make no comment on the strength of this case.
Conclusion
I conclude that it is arguable that the defendant breached the contract in terminating the plaintiff's employment, specifically an implied duty of good faith that conditioned the power to terminate.
Whether the claims for damages for loss of earnings are maintainable
I have observed above at [46] that the plaintiff pleads that as a result of the defendant's breaches (relating to workplace exclusion and termination) she suffered loss and damage, including loss of income and earning capacity.
In my view, it is arguable in principle that such financial losses are recoverable, on the basis that a wrongfully dismissed plaintiff is entitled to recover the value of the loss of entitlements that the plaintiff would have received but for the wrongful termination.[81]
[81] See Daynes [235] - [239].
In the specific context of the defendant's applications, it is not necessary to determine whether the plaintiff's asserted quantification of her lost financial entitlements is appropriate. Subject to considerations of issue estoppel (discussed below), the quantification of the plaintiff's damages (in the event she succeeds on a breach of contract claim) is a matter to be determined at trial.
However, it is necessary to touch upon some specific points raised by the defendant relevant to the plaintiff's damages claim arising out of the alleged contractual breaches.
Whether the workplace exclusion damages claim is maintainable in circumstances where the plaintiff took leave from 4 - 30 January 2022
In attacking the workplace exclusion aspect of the plaintiff's claim, the defendant says the plaintiff was in fact on leave between 4 January 2022 and 30 January 2022.[82]
[82] Defendant's outline of submissions filed 17 June 2024, par 24 (relying on Ming‑Lan Chiu v Liebherr‑Australia Pty Ltd [2022] FWC 1842 [23]) (Ming-Lan Chiu). For completeness, in my view no finding was made by Deputy President Beaumont that the plaintiff was on annual leave during this time. The reference to the plaintiff being on leave was made in the context of Deputy President Beaumont recounting the plaintiff's submissions and is not couched in terms of a finding of fact. At any rate, even if there was such a finding of fact, I am not satisfied that the finding was critical or essential to any other finding of Deputy President Beaumont. Accordingly, no question of issue estoppel arises on that particular point of fact.
At the outset I query whether I can have regard to this factual matter in determining whether a reasonable cause of action is disclosed, since evidence is not admissible on that question.[83]
[83] RSC O 20 r 19(2).
At any rate, even if the plaintiff was on annual leave from 4 ‑ 30 January 2022 (as appears to be accepted by the plaintiff),[84] it does not strike me that this would be fatal to a claim based on a breach of contract by the workplace exclusion.
[84] See plaintiff's affidavit filed 29 July 2024, pars 2.4.3 - 2.4.7; also, plaintiff's outline of submissions filed 20 September 2024, page 25.
In her affidavit, the plaintiff contends that she was in effect forced to take such leave as an 'emergency measure' after consulting with the defendant's junior human resources staff and in a context where she was uncertain as to what position the defendant's senior staff would ultimately take as to her exclusion.[85]
[85] See plaintiff's affidavit filed 29 July 2024, pars 2.4.3 - 2.4.7; also, plaintiff's outline of submissions filed 20 September 2024, page 25.
It is open on the plaintiff's factual contentions to argue that the 'forced' taking of leave was akin to an act of mitigation to preserve the status quo (including ongoing receipt of income while the exclusion remained in force), and that she is entitled to damages reflecting the loss of leave entitlements that she thereby took in response to the defendant's (alleged) breach.
On ordinary principles the plaintiff would be entitled to be put into the position she would have been in had the defendant complied with the contract. On her pleaded case, had the defendant complied with the contract she never would have been subject to a threat of exclusion, and she would not have taken annual leave in January 2022.
It strikes me that that is a triable issue whether the 'forced' taking of leave is claimable as damages.
Whether the wrongful termination damages claim is maintainable in view of the least burdensome performance principle
In attacking the plaintiff's claim for damages for breach of contract consequential upon wrongful termination, the defendant submits in effect as follows:
(a)even if the plaintiff establishes a wrongful termination, damages stand to be assessed by reference to the income that the plaintiff would have earned under the contract from the date of dismissal to the date the contract would have ended (had there been no breach); and
(b)in determining the date the contract would have ended, the court is to assume that the defendant would have exercised any power it had to bring the contract to an end in the way most beneficial to itself (ie at the earliest opportunity), this being the 'least burdensome performance' principle.[86]
[86] Defendant's outline of submissions filed 17 June 2024, par 30.
In support of that contention, the defendant relies on Bostik (Australia) Pty Ltd v Gorgevski (No 1)[87] and Martinez as trustee for Martinez HWL Practice Trust as representative of the partners trading as HWL Ebsworth Lawyers v Griffiths as trustee for the Griffiths HWL Practice Trust.[88]
[87] Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20, 32.
[88] Martinez as trustee for Martinez HWL Practice Trust as representative of the partners trading as HWL Ebsworth Lawyers v Griffiths as trustee for the Griffiths HWL Practice Trust [2019] NSWCA 310 [31] (Meagher JA & Bell ACJ agreeing at [1], Barrett AJA agreeing at [66]).
In addition to those authorities, I have also been assisted by having reference to a detailed analysis of the least burdensome performance principle in Haley v Laing O'Rourke Australia Management Services Pty Ltd (No 8).[89]
[89] Haley v Laing O'Rourke Australia Management Services Pty Ltd (No 8) [2024] FedCFamC2G 779 (Haley).
In Haley, paying particular regard to the authorities of TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd,[90] Willis Australia Group Services Pty Ltd v Mitchell‑Innes,[91] and Bartlett, Judge Manousaridis observed:
23One approach where the employer could have terminated the employment contract lawfully by giving notice has been to assess damages on the assumption that the employer would have so lawfully terminated the contract of employment (assumed lawful termination approach). The basis of that approach is what has been referred to as the 'least burdensome performance principle', and sometimes as the 'Mihalis Angelos principle'. …
…
28Although approved in Australia, the assumed lawful termination approach does not represent the approach Australian courts have taken to the assessment of damages for wrongful termination of a contract (including the wrongful termination of a contract of employment) where the party in breach has the right to terminate the contract by notice; and that is because courts in Australia have applied the 'least burdensome performance principle', not as an assumption that must be made when assessing damages for breach of contract, but as a principle on the basis of which an inference may be drawn from the term of the contract which provides for the right to terminate the contract, but which nevertheless is subject to evidence which may give rise to competing inferences. …
…
46Given the approach in TCN Channel 9, Willis, and Bartlett, I will proceed on the basis that the question whether, but for the employer’s wrongful termination of the employment contract, the employer would have lawfully terminated the employment contract by giving notice, is an issue that is to be determined by the application of the civil standard of proof. I will also proceed on the basis, however, that if that issue is determined adversely to the employer, the period for which the contract of employment will have remained or will remain on foot is to be assessed by reference to the probabilities of the events relevant to the determination of that question occurring.
(citations omitted)
[90] TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130.
[91] Willis Australia Group Services Pty Ltd v Mitchell-Innes [2015] NSWCA 381.
Having regard to these authorities, it seems to me that the application of the least burdensome principle to this case is hardly ripe for pre‑trial determination. Evidently the application of the principle is going to turn on the particular facts of each case.
Here, it is arguable that:
(a)the defendant breached an implied good faith obligation in terminating the plaintiff's employment, thereby rendering the termination wrongful; and
(b)but for the defendant's breach (ie had the defendant complied with the duty of good faith), the plaintiff's employment would not have been terminated, particularly in circumstances where it appears that, but for her vaccination status and refusal to be vaccinated, her employer had no cause for complaint against her (nor any reason to rid the defendant of her services).
Whether the claim for relief in respect of psychological injury is maintainable
The plaintiff also seeks to recover damages for emotional distress (amounting to psychological injury) consequential upon the defendant's contractual breaches.
Elisha v Vision Australia Ltd
Relevant to this claim, the High Court recently delivered judgment in Elisha.
I extract the following from the joint judgment in that case (insofar as relevant to a breach of contract case):
(a)consistent with the High Court's decision in Baltic Shipping Co v Dillon[92] damages are not recoverable for mental or emotional distress consequential upon a contractual breach (even if such distress would have been understood by the parties to have been likely), unless either:
[92] Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344 (Baltic Shipping).
(i)express provision is made in the contract to the contrary; or
(ii)the duty that was breached had the object to provide enjoyment, relaxation or freedom from molestation;[93]
[93] Elisha [49] (Gageler CJ, Gordon, Edelman, Gleeson & Beech-Jones JJ).
(b)in contrast, damages for psychiatric injury are available for breach of contract, with no exception applicable for employment contracts;[94]
(c)there is no general exclusion of liability for psychiatric injury where an employer breaches a contractual duty concerned with the manner of dismissal[95] and the decision of the House of Lords in Addis v Gramophone Company Ltd[96] did not hold otherwise;
(d)in any event, Addis should be approached with caution as 'the case was decided more than a century ago in a different social context and has been overtaken substantially by more recent decisions in the United Kingdom and Australia';[97]
(e)the United Kingdom case law post-Addis regarding an implied duty of trust and confidence 'cannot be transplanted to Australia', where the law has headed in a different direction, including as in Bartlett which rejected a generalised implied duty of trust and confidence in employment contracts;[98]
(f)in Australia (and in contrast to the United Kingdom), 'the scope of the contractual duty falls to be considered by reference to the usual considerations of the nature of the liability that, in light of the parties' agreement, the parties might fairly be regarded as having been willing to accept';[99]
(g)there is no basis to assume that psychiatric harm falls beyond the liability that parties to an employment contract might have been willing to accept where there is a breach of an express term regarding the manner of dismissal;[100] and
(h)where an employer breaches a contractual duty concerned with the manner of dismissal, liability for psychiatric injury is fact‑sensitive and not necessarily going to be considered as too remote to be recoverable[101] as demonstrated on the facts of Elisha.[102]
Is Elisha v Vision Australia Ltd distinguishable on the grounds that it was concerned only with a manner of dismissal scenario?
[94] Elisha [51], [59].
[95] Elisha [2].
[96] Addis v Gramophone Company Ltd [1909] AC 488 (Addis); see also Elisha [51].
[97] Elisha [51], [54] - [56].
[98] Elisha [57]. It is apparent from the joint judgment that the United Kingdom case law that is not applicable in Australia includes Johnson v Unisys Ltd [2001] UKHL 13; [2001] 2 All ER 801; [2001] 2 WLR 1076; [2001] ICR 480; [2001] IRLR 279; [2001] Emp LR 469 and Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58; [2012] 2 AC 22 (Edwards).
[99] Elisha [58].
[100] Elisha [59].
[101] Elisha [3].
[102] Relevantly set out in Elisha [65] - [73].
The plaintiff sought to distinguish the facts of Elisha from the facts of her case, specifically on the basis that her psychological harm was not consequential upon wrongful dismissal (as was the case in Elisha), but rather on breaches that pre-dated the termination.[103]
[103] See plaintiff's supplementary submissions filed 18 November 2024, par 6.
However, consistent with my conclusion above at [56] - [57], the FASOC plainly does assert, at least in part, a claim for damages consequential upon wrongful dismissal.
Implications of Elisha v Vision Australia Ltd
It seems to me that there are statements of principle applicable to the plaintiff's case in any event.
Relevant to the defendant's applications, I consider the following flows from Elisha:
(a)in principle, damages for psychiatric harm may be available to this plaintiff for breach of a contractual duty, including a contractual duty regarding manner of dismissal; and
(b)whether such damages are in fact recoverable will turn on:
(i)a close examination of the nature of the contractual duty breached, and whether the parties might fairly be regarded as having been willing to accept a liability for psychiatric harm for the breach; and
(ii)whether the losses claimed are too remote having regard to the usual principles regarding remoteness of damage.
It cannot be said in my view that the plaintiff's claim for psychiatric injury consequential upon the defendant's alleged contractual breaches (both before termination and during the process of termination) are unarguable.
Moreover, it seems to me that the resolution of the issues identified in [153(b)] above are matters which ought to be left to trial, based on fully ventilated facts and submissions.
Whether the claim for relief in respect of reputational harm is maintainable
The plaintiff also seeks to recover damages for reputational harm consequential upon the defendant's contractual breaches.
While Elisha did not involve a claim for damage to reputation associated with an employer's breaches, the joint judgment did disapprove of the application of United Kingdom authority holding that 'damages for loss of reputation and inability to secure alternative employment could not be recovered for a breach, in relation to the manner of dismissal, of an express term of an employment contract'.[104]
[104] Elisha [57], referring to Edwards.
Based on Elisha, whether or not damages were recoverable for loss of reputation for breaches of a term of an employment contract would be resolved in the same way as a claim for damages for psychiatric injury.
I also note the decision of the Court of Appeal in Lee. In that case, it was held that it was wrong to strike out a claim for 'personal injury to credit and reputation' consequential upon the alleged breach of a contractual duty of care in a client‑lawyer agreement. The retainer involved the lawyer acting for the client in a defamation claim, which the client lost. The client was claiming that he suffered reputational harm as a result of his claim being dismissed.
The Court of Appeal concluded that the claim was an arguable one that should be left for trial and ought not have been struck out on a summary basis.[105]
[105] Lee [4]. Mr Lee's claim was pleaded both in contract and tort, and the Court of Appeal confined its reasons to the contractual claim (Lee [40]). However, the court stated at [40] 'If the claim in contract is not reasonably arguable that must inevitably be the position for the claim in tort. Indeed, McGregor on Damages suggests there is limited scope in tort to recover non-pecuniary loss by social discredit outside of the tort of defamation'.
While Lee was decided before Elisha, in my view (respectfully) the analysis of Addis by the Court of Appeal in Lee has been vindicated by the High Court.[106]
[106] In Lee the Court of Appeal preferred an interpretation of Addis that did not lay down a general rule excluding damages for loss of reputation for contractual breach. Rather, the question of whether damages were recoverable stood to be considered by reference to general principles of contract law (Lee [60]). This appears to be in line with Elisha.
On the other hand, I note that in Lee the court considered that it was arguable that a claim for reputational harm arising from a breach of contract was closely aligned with a claim for emotional distress arising from breach and to be treated in a similar way, namely by reference to the special principles arising out of the High Court's decision in Baltic Shipping.
If a Baltic Shipping approach did apply to a claim for reputational harm, this would:
(a)eschew a conventional analysis of remoteness of damage; and
(b)entail an analysis of the object of the particular contractual term that was breached, and whether the object was to guard against the very loss that ensued (that is, whether the object was to protect or enhance reputation).[107]
[107] Lee [77], [97] - [98].
On the facts of Lee, it did not matter whether or not the Baltic Shipping approach was taken - either way the client's case against the lawyer was arguable.[108]
[108] Lee [99] - [102].
The court did however remark as follows:
103We are not presently inclined to offer an opinion as to which of the two positions is correct as a matter of law. The question is difficult. An answer proffered at this stage could be no more than obiter dicta. And, in any case, while in some cases the court might decide to determine a difficult question of law in the context of a strike-out application, it is generally appropriate to leave the question for trial. That is all the more so in the present appeal where, in many respects, the parties' respective submissions did not address the merits of the competing possibilities in a meaningful way.
The existence of that provision indicates to me that the scheme of WCIMA 2023 is that misconduct will not of itself mean that any resultant injury to a worker is excluded as being 'from employment' - hence the need for s 20. If misconduct of a party was sufficient to render any resultant injury as being not from employment, there would be no need for s 20.
Secondly, I do not consider it would promote the purposes and objects of WCIMA 2023 if an employer's misconduct - even serious misconduct - could operate to exclude the worker from claiming compensation for that injury.
I do not see a good reason to read in a 'serious misconduct' exclusion which, aside from creating uncertainty, would inevitably result in injured workers being denied access to compensation merely because of the wrongful conduct of their employers.
To be clear, I treat any allegation that the defendant was acting outside its authority as employer in the same way. I see no good reason why a worker ought to be denied access to workers' compensation merely because the injury that the worker sustained was due to the worker's employer doing something outside the scope of the employer's lawful authority (or in breach of an employment contract).
Indeed, such an exclusion would not sit well with s 6(2) of WCIMA 2023, which expressly provides that if a worker suffers an injury by accident when acting under the employer's instruction, that injury will be an injury from employment.
There is no warrant to read into that provision a requirement that the employer's instructions must be within the scope of the employer's lawful authority.
I accept that there may be instances where an employer's misconduct (causing injury to a worker) is so beyond the scope of the employment relationship that the injury thereby occasioned to the worker is not an injury within the meaning of s 6 of WCIMA 2023.
To take an extreme example, if a sole trader employer coincidentally encountered a worker at a local pub and assaulted that worker following an argument that was unrelated to any workplace matter, it seems to me that any injury the worker sustained would not be an injury 'from employment'.
However, there is nothing in the FASOC to indicate that the defendant's alleged misconduct was so disconnected from the employment relationship as to justify a finding that any harm the plaintiff sustained was not 'from employment'.
Accordingly, I am satisfied that the plaintiff's negligence claim does involve an injury within the meaning of s 6 of WCIMA 2023.
I now turn to consider whether s 7 of WCIMA 2023 operates to exclude the plaintiff's injury from WCIMA 2023.
As set out above, the substance of s 7 is that, other than where administrative action is unreasonable or harsh on the employer's part, psychological or psychiatric disorders that result predominantly from administrative action are deemed to be outside the definition of injury that otherwise applies under s 6 of WCIMA 2023.
'Administrative action' is defined by s 7(1) of WCIMA 2023 to include various actions, namely:
(a)performance appraisals, and anything done in connection with such appraisals;
(b)suspension action, and anything done in connection with such action;
(c)disciplinary action, and anything done in connection with such action; and
(d)any action in connection with the worker's demotion, dismissal or retrenchment, or the worker's failure to obtain a benefit, or to retain any benefit, in connection with the worker's employment.
Given the width of this definition, and its inclusive nature, it is at least arguable that the plaintiff's allegations of the defendant's conduct in this case would be captured by the phrase 'administrative action'.
Proceeding on the basis that the conduct complained of is arguably 'administrative action', I also need to consider whether or not it is also arguable that it is 'administrative action that is unreasonable and harsh on the part of the employer'. If the defendant's action was of an unreasonable and harsh character, s 7 would not operate to exclude the plaintiff's injury from the application of WCIMA 2023.
Although not touched upon by either party in their submissions,[178] I perceive there is an arguable issue as to whether there is a relevant issue estoppel arising out of the FWC Decision, specifically out of the finding that the plaintiff was unfairly dismissed.
[178] The defendant did submit that the plaintiff was bound by the compensation awarded by the FWC (defendant's supplementary submissions filed 28 October 2024, par 28(a)), but did not expressly submit that there was an issue estoppel specifically based on the finding that the plaintiff's dismissal was unfair.
Under s 385 of the FWA, in order to make a finding that the plaintiff was unfairly dismissed, the FWC was required to be satisfied that (amongst other things) her dismissal 'was harsh, unjust or unreasonable'. Plainly the FWC was so satisfied in this case.
It is at least arguable that the FWC Decision operates to constrain either party from contending otherwise, and further that this is the same issue to be considered under s 7 of WCIMA 2023 in considering whether administrative action is 'harsh and unreasonable'.
However, the issue is not black and white for at least the following reasons:
(a)the issue that the FWC had to decide was whether the dismissal was unfair, not specifically whether any administrative action taken in the lead up to the dismissal was unfair; and
(b)under s 385 of the FWA it is sufficient if the dismissal was any one of harsh, unjust or unreasonable, whereas in the context of s 7 of WCIMA 2023 the issue is whether the administrative action was harsh and unreasonable.
I am not prepared to conclude on an interlocutory basis in the context of the defendant's applications that there is a true identity of issues between the FWC Decision and these proceedings in this particular regard; it is arguable either way.
By extension, it is also arguable that there remains a live issue to be determined in these proceedings regarding whether the defendant's administrative action was harsh and unreasonable within the meaning of s 7 of WCIMA 2023.
If it is ultimately found that the defendant's conduct was not harsh and unreasonable, s 7 of WCIMA 2023 may well operate to exclude the plaintiff's injury from the scope of WCIMA 2023.
I cannot say definitively at this point of the proceedings which way the issue will be resolved. This is all the more so given WCIMA 2023 is a new statute which is yet to be considered in any detail by the courts of this State.
I therefore conclude that it remains arguable that the plaintiff's negligence claim does not involve an 'injury' within the meaning of WCIMA 2023.
Given that the operation of the new common law provisions depends on the existence of such an 'injury', that conclusion is a sufficient basis to decline to strike out (or summarily dismiss) the plaintiff's claim on the basis of the operation of the new common law provisions.
I pause to observe that in supplementary submissions,[179] the defendant contended that, while it may be arguable (in view of s 7 of WCIMA 2023) the plaintiff could pursue a common law claim against the defendant for psychiatric injury due to administrative action that was not harsh and unreasonable, the question of a s 7 exclusion does not arise because the plaintiff does not plead that the defendant's administrative action was harsh and unreasonable (sic - plead that the administrative action was not unreasonable and harsh).[180]
[179] Defendant's supplementary submissions filed 28 October 2024, pars 27 - 28.
[180] The correct position under s 7 of WCIMA 2023 is that if the administrative action was harsh and unreasonable, then a psychiatric disorder resulting therefrom is still capable of being an injury captured by WCIMA 2023. My reading of s 7 of WCIMA 2023 is it will operate to exclude a worker's psychiatric disorder resulting from administrative action from being an 'injury' (to which the Act applies), subject to the proviso that the administrative action must not have been harsh and unreasonable on the part of the employer. The flipside is that where the administrative action is harsh and unreasonable, s 7 will not operate to exclude the psychiatric disorder from 'injury', and the worker will be able to take advantage of the compensation entitlements of WCIMA 2023, subject to its constraints on pursuing common law claims.
That submission is misplaced - it is not necessary for the plaintiff to plead the operation of any part of s 7 of WCIMA 2023. Rather, it will be for the defendant, if it contends that the plaintiff's claim is not maintainable by operation of WCIMA 2023, to plead accordingly.
What is telling from the submission is that the defendant itself appears to accept that it is arguable that the s 7 exclusion may apply in this case.
At any rate, even if I am wrong in concluding that the s 7 exclusion arguably applies, I still consider that it is arguable that any injury that the plaintiff has is not an injury for which compensation 'has been paid or is payable' within the meaning of s 415(b) of WCIMA 2023.
It is not in issue that the plaintiff has made no claim for workers' compensation against the defendant and has not received any such compensation for the harm the subject of the pleaded negligence claim.
Plainly, therefore, the plaintiff has not suffered an injury for which compensation 'has been paid'. But has she suffered an injury for which compensation 'is payable'?
Section 17 WCIMA 2023 provides as follows:
17.Employer liable for compensation
(1)An employer is liable for compensation if a worker suffers an injury from employment with the employer.
(2)If an employer's liability to pay compensation has been accepted (or is taken to have been accepted) or has been determined by an arbitrator, the employer must pay compensation to the worker.
…
I consider that it is arguable that:
(a)it is apparent from s 17 of WCIMA 2023 that the mere fact that a worker suffers an injury from employment with the employer does not render compensation 'payable' in respect of that injury (it only renders the employer 'liable for compensation');
(b)rather, compensation is not 'payable' for an injury unless and until the employer is determined to be liable to pay such compensation, or the employer accepts that it is liable (or is deemed to have accepted such liability);
(c)the drafter, in crafting s 415(b) of WCIMA 2023, must have had in mind this clear dichotomy between, on the one hand, an employer's liability to pay compensation for an injury and, on the other hand, whether such compensation is actually 'payable' for that injury;
(d)by extension, unless and until the relevant conditions of s 17(b) of WCIMA 2023 are satisfied, compensation is not 'payable' within the meaning of s 415(b) of WCIMA 2023; and
(e)on the facts of this case, there is no suggestion that the relevant conditions of s 17(b) have been satisfied.
I therefore conclude that it is reasonably arguable that the second condition necessary to attract the operation of the new common law provisions has not been satisfied.
Condition #5: no proceedings validly commenced before 1 July 2024
In case I am wrong in my conclusion on the second condition, I shall nevertheless consider whether the remaining condition (the fifth condition) for the application of the new common law provisions has been satisfied to the requisite degree.
The fifth condition to be satisfied is that the plaintiff had not validly commenced proceedings before the commencement of WCIMA 2023 (1 July 2024).
As developed in supplementary submissions, the defendant contended as follows:
(a)'validly commenced' is not defined in WCIMA 2023 but ought to be interpreted as meaning 'commenced after an election has been validly exercised'; and
(b)it being common ground that this plaintiff never made an election under WCIMA 1981, these proceedings were not 'validly commenced' before 1 July 2024.
While I am strongly inclined to accept the defendant's submissions in this regard, I am ultimately not prepared to find it is beyond argument that the plaintiff failed to validly commence proceedings before 1 July 2024.
The reality is that WCIMA 2023 is in its infancy. The transitional provisions are complex and intricate and warrant careful consideration following full argument.
The court ought to be circumspect in shutting out plaintiffs from bringing claims forward, particularly based on a finding of the meaning of a phrase ('validly commenced') in new legislation that is yet to be judicially considered (so far as I am aware).
Is the plaintiff's negligence claim barred in any event by the Workers' Compensation and Injury Management Act 1981?
Given my conclusions on the second and fifth conditions, I find that it is at least arguable that the new common law provisions do not apply to the plaintiff's pleaded negligence claim.
It might be thought that the necessary consequence is that the claim remains to be governed by the former common law provisions and barred by the operation of those provisions in any event.[181]
[181] I note that the defendant's original submissions were put on the basis that the former common law provisions applied and were to the effect that the plaintiff's claim was liable to be struck out in circumstances where the relevant election had not been made under WCIMA 1981: see defendant's outline of submissions filed 17 June 2024, pars 39 - 42. Amongst other authorities, the defendant pointed to Armet v CFC Consolidated Pty Ltd [2019] WASCA 165. In the defendant's supplementary outline of submissions filed 28 October 2024, par 16, the defendant pivoted to contend that the new common law provisions applied, but still made a submission to the effect that the plaintiff was bound (and barred) by either of the new common law provisions or the former common law provisions.
However, I do not consider that, if it was found that the new common law provisions did not apply to the plaintiff's pleaded negligence claim, it necessarily follows that the former common law provisions apply in their place.
Rather, the question of the application of the former common law provisions would turn on the basis on which it was found that the new common law provisions did not apply.
This can be illustrated by example.
I have identified above that at least one arguable basis for excluding the operation of the new common law provisions is that the plaintiff's psychiatric harm is excluded from classification as an injury under WCIMA 2023 by virtue of the operation of s 7 of WCIMA 2023.
If such a finding was made, it is at least arguable that the former common law provisions would not apply either, on the basis that the former common law provisions are now repealed, and the transitional provisions do not operate to render those provisions applicable to this particular claim.
Punitive and exemplary damages exclusion
It should also not be forgotten that even if the new common law provisions did apply to the plaintiff's pleaded negligence claim, it would not operate to preclude a claim by her for punitive or exemplary damages.[182]
[182] Section 416(c) of WCIMA 2023, indicating that pt 7 div 2 of that Act does not apply to an award of exemplary or punitive damages.
The FASOC, in pleading out the negligence claim, does not expressly use the phrases 'punitive damages' or 'exemplary damages'.
Rather, the FASOC asserts a claim for 'aggravated damages'.[183] Strictly speaking, aggravated damages are compensatory in character,[184] and arguably such damages fall outside of being 'exemplary or punitive damages' as referred to in WCIMA 2023.[185]
[183] FASOC, par 13.1.
[184] AA v Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle [2024] NSWSC 1183 [313].
[185] As to the character of exemplary damages, see TheBishop of the Roman Catholic Diocese of Wagga Wagga, Mark Edwards v TJ (a pseudonym) [2024] VSCA 262 [237] - [241].
Ultimately, given my conclusions on the second and fifth conditions noted above, it is not necessary for me to address whether the FASOC is to be read as appropriately pleading out a claim to punitive or exemplary damages.
Conclusions on plaintiff's negligence pleading
For the foregoing reasons, I conclude that the plaintiff's negligence pleading is liable to be struck out in part only, namely par 13 of the FASOC, which is liable to be struck out pursuant to O 20 r 19(1)(d) of the RSC on the basis that the plaintiff is subject to an established issue estoppel.
Implications for any repleading of par 13
For the reasons given later in these reasons, the plaintiff should have leave to replead par 13 of the FASOC.
In repleading that paragraph to account for the issue estoppel, the plaintiff will need to remain mindful of the matters I have identified at [214] - [215] above.
That is to say, in view of Ventia, I do not consider it is open on the presently pleaded facts for the plaintiff to contend that loss of income she sustained after the point of termination is attributable to any pre‑termination wrongful conduct on the part of the defendant.
The plaintiff's negligent misstatement pleading
Distilling the plaintiff's negligent misstatement pleading
The plaintiff's negligent misstatement claim, as I apprehend it, is as follows.
Duty of care
The plaintiff pleads that the defendant owed her 'a duty of care to ensure that all information provided about workplace health and safety policies, specifically concerning the COVID-19 vaccination direction, was accurate, appropriately disclosed and legally substantiated …'.[186]
Breach of duty
[186] FASOC, par 15.1.
The plaintiff pleads that the defendant breached this duty by 'negligently misrepresenting that mandatory COVID-19 vaccination was applicable to the plaintiff's role, wrongfully citing "professional advice" as the legal basis for the direction given'.[187]
Foreseeable harm
[187] FASOC, par 16.1.
The plaintiff pleads that it was a foreseeable consequence of such negligence that the plaintiff may suffer 'significant distress and economic harm', citing the plaintiff's repeated raising of concerns with the defendant, and the defendant's failure to engage with those concerns.[188]
Damages
[188] FASOC, par 17.1 and particulars thereto.
The plaintiff goes on to plead in substance as follows:
(a)the plaintiff carefully considered the defendant's direction to her;
(b)the plaintiff had significant reservations about the validity of the direction (in effect requiring her to vaccinate);
(c)the plaintiff chose to 'reject the direction', and her decision to do so 'underscores her reasonable reliance on the defendant's direction';
(d)the plaintiff did not comply with the direction; and
(e)as a direct result of the plaintiff's non-compliance with the direction, the plaintiff was excluded from the workplace and ultimately terminated.[189]
[189] FASOC, par 18.1 and the particulars given in par 18.1(a).
The plaintiff then pleads that she suffered 'extensive financial, professional, and emotional losses due to the defendant's negligent misrepresentation', for which she seeks an apology and $220,000 damages, which sum incorporates:
(a)compensation for 'lost income and deeper repercussions that have disrupted the plaintiff's career and eroded her professional identity';
(b)aggravated damages for the 'emotional distress and disrespect to the plaintiff's rights'; and
(c)punitive damages to 'deter similar future misconduct and emphasise the seriousness of the defendant's actions.[190]
Negligent misstatement pleading is intelligible (with one qualification)
[190] FASOC, particulars to par 19.
The plaintiff's negligent misstatement claim is intelligible, with one qualification.
Specifically, I do not understand how the plaintiff asserts in par 18.1 of the FASOC that she has relied on the defendant's direction to vaccinate her, given her unequivocal position (restated in the very same paragraph) is that she rejected the direction and did not comply with it.
Had the plaintiff undergone a vaccination following the direction, I can readily see how she could contend she relied on the direction to get that vaccination; but that is plainly not the case advanced here.
There is a logical inconsistency within par 8.1 which in my view is sufficient on its own to warrant striking out of that paragraph. However, for the reasons given below, the problems with the negligent misstatement case do not end there.
Whether the negligent misstatement pleading discloses an arguable cause of action
In order to establish a negligent misstatement case, the plaintiff must establish a relevant duty of care in respect of the impugned statement, that the duty has been breached, and that the breach of the duty has caused her loss.[191]
[191] A useful summary of the relevant principles is contained in Meredith v Commonwealth of Australia (No 2) [2013] ACTSC 221 [383] - [390] (Refshauge J) (Meredith). For a more recent decision addressing when a duty of care arises in a negligent misstatement case, see Girgis v Poliwka [No 6] [2019] WASC 230 [888] - [889] (Vaughan J, as his Honour then was). Typically, a negligent misstatement case is brought by a plaintiff who has suffered pure economic loss. That is not the case here, but it matters not since, on any view, causation (between the impugned conduct and loss) remains an essential element for the plaintiff to establish.
Ultimately, I do not find it necessary to consider the question of duty or breach in any detail since I have formed the view that the plaintiff's case must fail on the basis that she will be unable to establish an essential element of such a claim, namely that the alleged misstatement caused her loss.
In a negligent misstatement case, causation of loss is generally established by proof that the plaintiff relied on the truth of the impugned representation to the plaintiff's detriment.[192] The plaintiff accepts this.[193]
[192] Meredith [387]. See also Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88 (Anchorage). In Anchorage[375] - [384], the New South Wales Court of Appeal upheld the trial judge's findings that causation had not been made out by the appellants in a case based on statutory misleading and deceptive conduct alternatively negligent misstatement. The appellants failed to make out causation because there was no evidence led at trial that the appellants had actually relied on the truth of the impugned statements. It was not enough for the appellants to simply assert that, but for the impugned representations being made, the appellants would have not suffered any loss.
[193] Plaintiff's affidavit filed 29 July 2024, Part 3, par 3.1.5, page 40.
Here, this would entail the plaintiff being able to establish she relied not merely on the fact of the giving of the defendant's representation (to the effect that she was required by law to vaccinate), but that she actually relied on the truth of that representation.
The difficulty for the plaintiff is that she unequivocally disclaims any such belief. On the contrary, she pleads in effect that she was not persuaded by the truth of the representation, and she did not comply with it on that basis. The plaintiff's affidavit is to similar effect.[194]
[194] Plaintiff's affidavit filed 29 July 2024, Part 3, pars 3.1.5 - 3.1.5.1.2, page 40.
The losses that the plaintiff complains of (workplace exclusion followed by termination) do not flow from the misleading character of the defendant's representation; rather those losses flow from the plaintiff's refusal to comply with the defendant's direction, and the defendant's reaction to that refusal.
Even assuming that the plaintiff can establish a relevant duty of care and breach (in the context of a negligent misstatement case), I cannot see how she will be able to establish causation.
This is a sufficient basis for the striking out of the entirety of the plaintiff's pleaded negligent misstatement claim.
Having formed that view, it is not necessary for me to consider further the validity of the plea.
Conclusions on plaintiff's negligent misstatement pleading
For the foregoing reasons, I conclude that pars 4 ‑ 19 of the FASOC ought to be struck out pursuant to O 20 r 19(1)(a) of the RSC. No reasonable cause of action is disclosed.
Whether the plaintiff should have leave to replead those aspects of her pleading which have been struck out
Recap on what parts of the FASOC are being struck out
Based on the foregoing, I have found that the following parts of the FASOC are liable to be struck out:
(a)par 8 of the breach of contract pleading (based on issue estoppel, engaging O 20 r 19(1)(d) of the RSC);
(b)par 13 of the negligence pleading (based on issue estoppel, engaging O 20 r 19(1)(d) of the RSC);
(c)pars 14 - 19, being the entirety of the negligent misstatement pleading (based on a failure to disclose a reasonable cause of action, engaging O 20 r 19(1)(a) of the RSC); and
(d)par 20 (this summary paragraph being infected with the defective paragraphs that precede it and which are being struck out).
Plaintiff ought to have opportunity to replead
The defendant submitted that the plaintiff should be denied a further opportunity to replead.[195]
[195] Defendant's outline of submissions filed 17 June 2024, pars 3 - 5, 53 - 54. The defendant invoked Pigozzo v Mineral Resources Ltd [2022] FCA 1166 [32].
However, I consider that the plaintiff ought to be given a further opportunity to replead for the following reasons.
First, at least with respect to the contractual and negligence claims, the aspects of the FASOC being struck out are remediable.
I have not granted a wholesale strike out of the kind that the defendant was advocating in its submissions. While important parts of the FASOC are going to be struck out, the grounds on which I have done so are limited in scope.
The plaintiff, with careful consideration of these reasons, ought to be able to replead and in doing so rectify the defects found to exist.
Second, this is not a case of a party inexcusably failing to put up a defensible pleading despite being given every reasonable opportunity to do so.
As is evident from these reasons, the plaintiff's claim throws up a myriad of complex legal issues which the plaintiff is required to navigate.
Given the intersection of this case with issue estoppels, new and complex workers' compensation legislation, and an evolving common law, the task of pleading out a claim like the plaintiff's is difficult.
Third, I am satisfied that the plaintiff has been doing the best she can to address the complaints raised against her by the defendant, and address the defects identified in the decision of Registrar Jeyamohan.
This is not a case that falls into that rare category of cases where it is justified to 'bring the hammer down' on a plaintiff who is hopelessly flailing from one incomprehensible pleading to the next.
In all of the circumstances, it is not appropriate in the interests of justice to deny the plaintiff an opportunity to replead.
The one qualification to this is with respect to the pleaded negligent misstatement claim. I have found above in effect that the plaintiff would never be able to establish causation on that claim, given her clear position that she did not rely on the truth of what the defendant was representing to her.
Given that finding, I see no utility in granting the plaintiff leave to replead that claim.
The defendant's application for summary judgment
I return to the defendant's application for summary judgment pursuant to O 16 r 1 of the RSC.
In view of the findings I have made, I am not persuaded that it is appropriate to grant summary judgment in respect of the plaintiff's breach of contract and negligence claims.
As to the negligent misstatement claim, given I have struck out the relevant portions of that claim (and denied leave to replead) I do not see that a grant of summary judgment in respect of that claim is necessary.
Orders to be made
Orders should follow on the defendant's applications to the effect that:
(a)the defendant's application for summary judgment is dismissed;
(b)par 8 and pars 13 - 20 of the FASOC be struck out;
(c)otherwise, the defendant's application to strike out the FASOC be dismissed; and
(d)the plaintiff have leave to replead the FASOC, such leave being limited to the repleading of material facts the subject of pars 8 and 13 of the FASOC only.
I shall hear from the parties as to the precise orders to be made, including as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DP
Associate
20 FEBRUARY 2025
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