Elisha v Vision Australia Limited

The appeal concerned Elisha (the appellant) and Vision Australia Limited (the respondent). The dispute arose from the termination of Mr Elisha's employment following an incident during work-related travel. Mr Elisha alleged he suffered a major depressive disorder as a result of the manner of his dismissal, which he contended breached his employment contract. The High Court of Australia was required to determine whether Vision Australia was liable for damages for psychiatric injury caused by the employer's breach of contract, specifically concerning the manner of dismissal, and whether the rule in *Addis v Gramophone Company Ltd* precluded such recovery. The court also considered whether the damage was too remote and whether Vision Australia's disciplinary procedure was incorporated as a term of Mr Elisha's employment contract.

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.