HIGH COURT OF AUSTRALIA
GAGELER CJ,
GORDON, EDELMAN, STEWARD, GLEESON, JAGOT AND BEECH‑JONES JJADAM ELISHA APPELLANT
AND
VISION AUSTRALIA LIMITED RESPONDENT
Elisha v Vision Australia Limited
[2024] HCA 50
Date of Hearing: 16 October 2024
Date of Judgment: 11 December 2024M22/2024
ORDER
1.Appeal allowed with costs.
2.Set aside orders 2 to 6 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 28 November 2023 and, in their place, order that the appeal be dismissed with costs.
On appeal from the Supreme Court of Victoria
Representation
P D Herzfeld SC with E Makowski and S D D Puttick for the appellant (instructed by Arnold Thomas & Becker Lawyers)
P M O'Grady KC and S E Gladman SC with L R Howard for the respondent (instructed by IDP Lawyers)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
This appeal concerns the availability of damages for psychiatric injury to an employee in circumstances where the employee was dismissed following a disciplinary hearing that was described by the primary judge as a "sham". The issues concern damages for breach of a contractual term concerning the conduct of the disciplinary hearing and for the tort of negligence. In relation to breach of contract, the questions that arise are: (i) whether the particular contract of employment incorporated the employer's disciplinary policies as terms of the contract; (ii) whether liability for psychiatric injury caused by the employer's breach of that contract is beyond the scope of the employer's contractual duty concerned with the manner of dismissal; and (iii) whether liability for psychiatric injury was too remote in the circumstances of the particular contract.
The answers to each of those questions are: (i) the particular contract did incorporate the employer's disciplinary policies as terms of the contract; (ii) subject to the particular terms and context of any particular contract, liability for psychiatric injury is not beyond the scope of a contractual duty concerned with the manner of dismissal; and (iii) liability for psychiatric injury was not too remote, particularly in the serious (and unchallenged on this appeal) circumstances of breach that were found by the primary judge.
For the reasons below, the appeal should be allowed and orders should be made restoring the primary judge's orders for damages for the psychiatric injury suffered by the employee. It is unnecessary to consider the further issue raised on this appeal concerning the liability of an employer for psychiatric injury of an employee based on the tort of negligence.
Background facts and procedural history
From 2006, the appellant, Mr Elisha, was employed by the respondent, Vision Australia Limited ("Vision Australia"), as an adaptive technology consultant. Mr Elisha's employment with Vision Australia was governed by a written employment contract signed on 27 September 2006. That contract was referred to on appeal as the "2006 Contract". Mr Elisha's employment duties involved setting up or assisting with software and…
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- Case
- [2024] HCA 50
- Decision Date
CaseChat Overview and Summary
The High Court's reasoning focused on the incorporation of the disciplinary procedure into the employment contract. The court held that the 2006 Contract, which stipulated that employment conditions would be in accordance with Vision Australia's Policies and Procedures and that breach of these could result in disciplinary action, incorporated the 2015 Disciplinary Procedure. The court applied the principle that the meaning of contractual terms is determined by what a reasonable person would understand them to mean, considering the text and the common intention of the parties. The court found that Vision Australia's contention that the disciplinary procedure was not a term of the contract was without merit.
The High Court allowed the appeal, setting aside the orders of the Court of Appeal and restoring the primary judge's orders for damages for the psychiatric injury suffered by Mr Elisha. The court found that the employer's breach of contract in failing to follow its own disciplinary procedure in dismissing Mr Elisha led to his psychiatric injury, and that such damages were not precluded by the rule in *Addis v Gramophone Company Ltd* nor were they too remote. The court deemed it unnecessary to consider the further issue of the employer's liability in tort for psychiatric injury based on negligence.
Orders
Orders of the court
1. Appeal allowed with costs.
2. Set aside orders 2 to 6 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 28 November 2023 and, in their place, order that the appeal be dismissed with costs.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Established by: GAGELER CJ, GORDON, EDELMAN, GLEESON AND BEECH-JONES JJ
Vision Australia initially relied upon three grounds of contention, which, at the hearing before this Court, were reduced only to a contention that the 2015 Disciplinary Procedure was not a term of the 2006 Contract. Vision Australia abandoned a contention that any duty of care in tort to provide a safe system of work was not engaged because the risk of recognised psychiatric injury was not foreseeable, or that any such duty had not been breached. The incorporation of the 2015 Disciplinary Procedure It is necessary to begin with the contention that the 2015 Disciplinary Procedure was not incorporated as a term of the 2006 Contract. There was no dispute as to the principles to be applied in determining whether the 2006 Contract had incorporated terms by reference. There was no challenge in this Court to the conclusion of the Court of Appeal that neither the Community Employment, Training and Support Services Award 1999 ("the 1999 Award") nor the Vision EA was incorporated by the term of the 2006 Contract which provided that Mr Elisha's engagement was governed by the 1999 Award.[23] The issue concerning the subject matter of the terms incorporated was confined in this Court to whether the Court of Appeal was correct to conclude that the "Other Conditions" clause of the 2006 Contract had incorporated the 2015 Disciplinary Procedure. The issue concerned only the interpretation of the terms of the 2006 Contract and whether those terms gave contractual effect to the 2015 Disciplinary Procedure.[23]Vision Australia Ltd v Elisha (2023) 328 IR 299 at 322-323 [92]-[96].The meaning of the terms of the 2006 Contract The 2006 Contract by which Vision Australia employed Mr Elisha took the form of a letter of offer executed by Vision Australia which included, on the last page, provision for acceptance by Mr Elisha. The letter relevantly provided:"Conditions of EmploymentYour engagement will be governed by the terms of this letter and the [1999 Award]....Other ConditionsIn addition, Employment Conditions will be in accordance with regulatory requirements and Vision Australia Policies and Procedures. Breach of the Policies and Procedures may result in disciplinary action." The acceptance on the last page of the letter was as follows:"ACCEPTANCE:This contract may be amended from time to time by mutual agreement between the parties.I have read and fully understand the terms and conditions of employment detailed in this contract. I agree to comply with these terms and conditions of employment and all other Company Policies and Procedures.I certify that the details in my application/curriculum vitae are true and correct; and that I have no knowledge of any fact or circumstance, which may prevent fulfilment of the terms of this contract." The meaning of the terms of the 2006 Contract, like any other contractual term, "is to be determined by what a reasonable person would have understood [the terms] to mean".[24] This requires consideration of the common intention of the parties by reference to the object and text of the provision as well as the surrounding circumstances.[25] The common intention of the parties is "to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement".[26][24]Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40]. [25]Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 462 [22].[26]Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40].