Karzi v Toll Pty Ltd

[2024] NSWCA 120

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Karzi v Toll Pty Ltd [2024] NSWCA 120

Hearing dates:

3 May 2024

Decision date:

22 May 2024

Before:

Leeming JA at [1];
Adamson JA at [9];
Basten AJA at [162]

Decision:

(1)   Dismiss the appeal.

(2)   Order the appellant to pay the respondent’s costs of the appeal.

Catchwords:

NEGLIGENCE — duty of care — foreseeability — whether primary judge erred in finding risk of psychiatric harm to employee was not reasonably foreseeable — where employee was verbally harassed by co-workers — where employee made complaint to employer and employer took reasonable precautions to address risk of psychiatric harm — where employee did not indicate to employer that psychiatric harm was being suffered

NEGLIGENCE — causation — where employee suffered “transient” psychiatric injury — whether certificate of whole person impairment issued by the Workers Compensation Commission was evidence of the permanence of the psychiatric injury for the purpose of ascertaining causation

APPEALS — from finding of fact — improper admission of evidence — whether primary judge erred in admitting evidence of witness who was not disclosed in respondent’s pre-filing statement — where disclosure was required by s 315 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) — where appellant’s pre-filing statement did not comply with s 315

CIVIL PROCEDURE — pleadings — whether primary judge erred in failing to address appellant’s case on vicarious liability — where vicarious liability was not pleaded — where vicarious liability was raised in cross-examination and oral submissions at first instance — purpose and function of pleadings

Legislation Cited:

Civil Liability Act 2002 (NSW), s 32

Civil Procedure Act 2005 (NSW), Pt 6

Uniform Civil Procedure Rules 2005 (NSW), r 51.36

Workers Compensation Act 1987 (NSW), ss 150, 151H

Workplace Injury Management and Workers Compensation Act 1998 (NSW), ss 315, 318, 326

Cases Cited:

Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11

Bersee v State of Victoria (2022) 70 VR 260; [2022] VSCA 231

CCIG Investments Pty Ltd v Schokman [2023] HCA 21; (2023) 97 ALJR 551

Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70

Gower v State of New South Wales [2018] NSWCA 132

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Koehler v Cerebos (Australia) Pty Limited (2005) 222 CLR 44; [2005] HCA 15

Kozarov v State of Victoria (2022) 273 CLR 115; [2022] HCA 12

Kubovic v HMS Management Pty Ltd [2015] NSWCA 315

McLean v Tedman (1984) 155 CLR 306; [1984] HCA 60

Nationwide News v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377

Stevens v DP World Melbourne Ltd [2022] VSCA 285

Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62

Watson v Foxman (1995) 49 NSWLR 315

Wilkinson v Perisher Blue Pty Ltd [2012] NSWCA 250

Category:

Principal judgment

Parties:

Mohd Younas Karzi (Appellant)
Toll Pty Ltd (Respondent)

Representation:

Counsel:
G J Parker SC / J de Greenlaw (Appellant)
M McCulloch SC / F Doak (Respondent)

Solicitors:
Gerard Malouf & Partners (Appellant)
Colin Biggers & Paisley Lawyers (Respondent)

File Number(s):

2023/292793

 Decision under appeal 

Court or tribunal:

District Court

Jurisdiction:

Civil

Date of Decision:

22 August 2023

Before:

Olsson SC DCJ

File Number(s):

2019/261712

HEADNOTE

[This headnote is not to be read as part of the judgment]

Mohd Younas Karzi (the appellant) was employed by Toll Pty Ltd (the respondent) at their depot in Erskineville. On several occasions between September 2014 and January 2015 one of the respondent’s employees, Joseph Johnpulle, made offensive and racist remarks to the appellant. The appellant reported the matter to more senior employees of the respondent and, following an investigation of Mr Johnpulle’s conduct by the respondent, Mr Johnpulle was dismissed.

In response to Mr Johnpulle’s dismissal, members of the Transport Workers’ Union (TWU) protested about the appellant’s presence at the Erskineville depot. As a result he was transferred to the respondent’s Mascot depot. Later that year, in 2015, the appellant’s visa application was refused and the appellant injured his lower back, both of which prevented him continuing to work for the respondent.

The appellant brought proceedings in the District Court against the respondent for damages in negligence for psychiatric injury. Olsson SC DCJ (the primary judge) dismissed the appellant’s claim, finding that while the respondent owed the appellant a duty of care to protect him from the risk of psychiatric injury caused by its employees, the risk of harm was not reasonably foreseeable, the respondent did not breach its duty of care and, even if liability was established, the appellant was not entitled to damages as he was not entitled to work in Australia and his earning capacity was substantially reduced as a result of his back injury.

The appellant appealed. In addition to challenging a number of the primary judge’s factual findings, the key issues on appeal were whether the primary judge erred in:

1. finding the risk of psychiatric harm was not reasonably foreseeable;

2. finding the respondent had not breached its duty of care to the appellant;

3. failing to address the appellant’s case on vicarious liability;

4. finding the appellant’s psychiatric injury was transient; and

5. admitting the evidence of Maxine Prince, a witness who was not referred to in the respondent’s pre-filing defence.

The Court (Adamson JA, Leeming JA and Basten AJA agreeing, Leeming JA and Basten AJA giving separate reasons) held, dismissing the appeal:

Challenges to primary judge’s findings of fact

1. The primary judge was correct to prefer the evidence of the respondent, which included well-documented evidence of its investigations, to that of the appellant having regard to her Honour’s credibility findings against the appellant: at [1] (Leeming JA); [58], [69], [74], [82] (Adamson JA).

Reasonable foreseeability of psychiatric harm per Adamson JA

1. There was nothing in the nature and extent of the appellant’s work itself which gave rise to a risk of psychiatric harm. Whether the respondent ought to have foreseen that the appellant would suffer psychiatric harm depended on whether the appellant gave any indication to this effect: at [102], [104]-[106].

   Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62; Koehler v Cerebos (Australia) Pty Limited (2005) 222 CLR 44; [2005] HCA 15, applied.

   Kozarov v State of Victoria (2022) 273 CLR 115; [2022] HCA 12; Stevens v DP World Melbourne Ltd [2022] VSCA 285, considered.

2. The primary judge was correct to find, in circumstances where the appellant did not complain, or exhibit any signs, of psychological harm, that it was not reasonably foreseeable from the respondent’s point of view that there was a risk of psychological harm: at [112].

Reasonable foreseeability of psychiatric harm per Basten AJA

1. While the appeal should be dismissed solely on the ground that no breach of duty of care was established, inconsistencies in the primary judge’s findings suggest there was substance to the appellant’s submission that the respondent was put on notice that he was at risk of psychiatric injury. It should have been inferred that the respondent took the steps that it did (relocating the appellant and taking disciplinary action against Mr Johnpulle) to avoid a risk of harm of which its officers were self-evidently aware: at [169]-[172].

Breach of duty

1. By dismissing Mr Johnpulle and referring the issue with the TWU to mediation the respondent did all that it reasonably could to resolve the issue. No breach was made out: at [1] (Leeming JA); [117] (Adamson JA); [173]-[175] (Basten AJA).

Vicarious liability

1. In circumstances where the issue of vicarious liability was not pleaded by the appellant in the Court below, the appellant’s criticism of the primary judge for not ruling on the issue is unwarranted: at [7] (Leeming JA); [130]-[134] (Adamson JA); [176]-[178] (Basten AJA).

   Dare v Pulham (1982) 148 CLR 658 at 664 (Murphy, Wilson, Brennan, Deane and Dawson JJ); [1982] HCA 70, applied.

Transience of psychiatric injury

1. Section 326 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) is not conclusive evidence that a psychiatric injury in respect of which a Workers Compensation Commission certificate is issued is permanent for the purpose of determining causation in negligence. The primary judge was entitled to find the appellant’s psychiatric injury was transient: at [1] (Leeming JA); [139] (Adamson JA).

Evidence of Ms Prince

1. No error was established in the primary judge’s admission of this evidence. The respondent’s omission of Ms Prince from its pre-filing defence was a direct consequence of the appellant’s failure to allege negligence in relation to his transfer to Mascot on his pre-filing statement: at [1] (Leeming JA); [143]-[144], [156]-[158] (Adamson JA).

JUDGMENT

1. LEEMING JA: I agree with Adamson JA that this appeal must be dismissed with costs. As Basten AJA explains, the conclusion that Toll was not itself in breach of duty is a sufficient answer to the entirety of the claim made by Mr Karzi against it directly, and I agree, for the reasons given by each of Adamson JA and Basten AJA, that the challenges to that conclusion and to the factual findings which lead to that conclusion fail. I also agree with Adamson JA, for the reasons her Honour gives, that there was no error in admitting the evidence of Ms Prince, and that nothing turns on the failure by the primary judge to quantify damages, contrary to the ordinary practice. It is not necessary to express a view concerning the challenges to the findings of foreseeability and causation.

2. I wish to add two points by way of elaboration, and I shall do so without repeating the background contained in Adamson JA’s reasons. The first relates to what, in substance, was a threshold submission advanced on behalf of the appellant concerning the duty owed by an employer to an employee. Mr Karzi’s submission drew upon what had been said in Stevens v DP World Melbourne Ltd [2022] VSCA 285. The critical paragraphs of that appeal, which, like the present, concerned breach by an employer of its duty of care owed to employees in respect of their incurring psychiatric injury, were at [58]-[59]:

His Honour’s judgment was delivered prior to the High Court’s decision in Kozarov and this Court’s decision in Bersee. As Kozarov and Bersee explain, in a case where the risk of psychiatric injury from the performance of work is acknowledged by the parties, evident signs of distress or vulnerability on the part of a particular employee are not a precondition that must be satisfied before psychiatric injury can be found to be reasonably foreseeable.

In the present case, what was critical was not whether the plaintiff exhibited evident signs of distress or vulnerability, but rather whether the defendant took reasonable care to avoid an acknowledged reasonably foreseeable risk of psychiatric injury being caused by the plaintiff’s treatment by fellow workers in the workplace. It follows that, to the extent that the judge rejected the plaintiff’s claim on the basis that the plaintiff did not manifest evident signs of distress or vulnerability, his Honour erred. (Footnote omitted.)

3. Drawing upon the words “is acknowledged by the parties” in [58] and “an acknowledged reasonably foreseeable risk of psychiatric injury” in [59], Mr Karzi submitted that in the present appeal, there was an acknowledgement of such risk of psychiatric injury, in the form of the formal policies in place in the workplaces. I do not accept that submission. It is an example of reading the reasons for judgment literally and out of context. Nothing in Stevens denies that “the fundamental question” is “whether at some point of time during [the] employment the risk of that type of injury should have been foreseen by the defendant”: see at [54]. The reference in Stevens to “an acknowledged reasonably foreseeable risk” was a reference not to the existence of documents concerning workplace conduct but to the four years of serious and widespread bullying, known to management, which had occurred in what was euphemistically described as a “robust workplace environment which was not for the faint-hearted”.

4. Were there any doubt about this, it is confirmed by what was said in Bersee v State of Victoria (2022) 70 VR 260; [2022] VSCA 231, where the Court said at [87]:

Kozarov reinforces the point that questions of foreseeability, which are relevant to the existence and scope of a duty of care, breach of duty, or remoteness of damage, are fact and context specific. In some cases, psychiatric injury will be a reasonably foreseeable consequence of the performance of work and in others it will not be. In Koehler, the High Court referred to what an employer might reasonably assume about the ability to perform the work safely, and in Kozarov the Court concluded that the assumption was irrelevant in the face of the incontrovertible evidence as to risk. (Footnote omitted.)

5. The Court went on to say (at [88]-[90]):

Kozarov makes plain that evident signs of distress or vulnerability on the part of a plaintiff are not a precondition that must be satisfied before psychiatric injury can be found to be reasonably foreseeable and are not a legal criterion for liability. Rather, they provide a means by which reasonable foreseeability may be established on the facts, and in some cases, the absence of them may mean that the employer would have no reason to suspect that psychiatric injury is on the cards for the particular employee or class of employees.

In Kozarov, the Court did not hold that an actionable duty of care exists to a specific individual before there is any reasonable foreseeability of injury of the kind that eventuated to the particular employee concerned (as the applicant submitted before us). Rather, the Court said that, in the particular workplace in question, sufficient evidence of that foreseeability existed from the outset of the employment of any lawyer in the sexual offences unit such that, without more, the actionable duty to take reasonable care to avoid psychiatric injury of the kind that eventuated to the plaintiff arose. Beyond the nature of the work and the Vicarious Trauma Policy, no additional evidence was required to prove the requisite foreseeability and, in turn, give rise to the duty to the plaintiff.

6. As Adamson JA has emphasised, these issues are quintessentially factual and turn on the evidence on the particular case.

7. Secondly, I agree with what each of Adamson JA and Basten AJA has said concerning vicarious liability, and would add the following. Submissions were made in relation to an unpleaded allegation of vicarious liability, either for the intentional tortious conduct of Mr Johnpulle or the negligent conduct of Mr Fath in not reporting to the manager the complaints made by Mr Karzi. The former has the advantage, at least, that it had been made to the primary judge in closing address, where the response had been that it was not pleaded and outside the scope of the issues. A complaint was made in this Court that her Honour should have ruled whether the issue was within or outside the scope of the pleadings. I do not agree. It was plainly outside the scope of the pleadings, and required particularisation of the name of the employee and the conduct said to give rise to tortious liability for which Toll was vicariously liable. That is an end of that ground. It is therefore strictly unnecessary to address the more substantial and ambitious submission advanced on behalf of Mr Karzi that because communication between employees was an essential aspect of the workplace, when in communication an employee vilified or denigrated or insulted or bullied another, that was conduct which arose out of the performance of their duties as employees for which accordingly the employer was vicariously liable. That submission was encapsulated in the following exchange:

PARKER: … I submit in this case there can be really no doubt that Toll would have been vicariously liable for the actions of Johnpulle and the members of the union. These two men had to work together. They had to communicate with each other. It may be that Toll did not authorise or encourage Johnpulle to harass or vilify Mr Karzi, but the action was so intimately connected with his employment –

ADAMSON JA: Making a gratuitous racist remark against another employee, why is that intimately connected with the business of Toll?

PARKER: The opportunity is because of the employment, they have to work together, and talking is an authorised activity. They’ve got to communicate with each other. I wanted to find the reference I had in mind in this case.

LEEMING JA: I’m just trying to think of a workplace where employees would not be authorised to talk to each other.

PARKER: Exactly.

8. But despite its not being necessary in order to resolve the appeal, it is best to indicate here and now that the submission cannot be accepted. One consequence would be that there would be vicarious liability in every workplace where employees communicate with one another – which is to say, the overwhelming majority of all workplaces. True it is that the law of vicarious liability can scarcely be regarded as well settled. However, it is not the case that, for the particular class of tortious conduct arising from oral or verbal communications between employees, an employer is inevitably vicariously liable in every case.

9. ADAMSON JA: Mohd Younas Karzi (the appellant) appeals against the judgment of Olsson SC DCJ (the primary judge) in the District Court (the Court below) in favour of Toll Pty Ltd (the respondent) following proceedings in which the appellant claimed damages in negligence from the respondent. The grounds of appeal include challenges to the primary judge’s findings on duty, breach and damages. In these circumstances, it is necessary to summarise the findings made by the primary judge and the evidence, where relevant, before turning to the grounds of appeal.

10. The appellant was employed by the respondent and alleged that he sustained psychiatric injury as a result of the respondent’s negligence. The appellant submitted that the respondent owed him a duty of care to protect him from the risk of psychiatric injury caused by the conduct of other employees, that it breached that duty by failing to take reasonable precautions to prevent other employees from mistreating him and that his psychiatric injury was a consequence of that breach.

11. The primary judge rejected the appellant’s claim and found that:

1. the respondent owed a duty of care to its employees ([170]);

2. the risk of harm that an employee might suffer depression and anxiety (or other psychiatric condition) was not reasonably foreseeable ([171]-[172], [178]);

3. the respondent was not in breach of the duty of care which it owed to the appellant ([196]); and

4. even if liability had otherwise been established, the appellant had no entitlement to damages for either past or future economic loss as his visa had been cancelled, he was not entitled to work in Australia, his back had been injured and his income earning capacity was substantially reduced as a result of that injury ([203]-[204]).

12. The notice of appeal appears to contain 18 separate grounds. However, the appellant confirmed that there are only 7 grounds: 1, 2, 3 (of which paragraphs 4-9 are particulars), 10, 11, 12 and 13 (of which paragraphs 14-18 are particulars).

The factual background

13. The appellant was born in Afghanistan in April 1982. In 1995, he and his family went to Pakistan as refugees. In about 1999, he migrated with his family to Canada. He became a Canadian citizen in about 2003. In 2010, he met Hasna Tania Fath on the internet and married her in January 2012 in Canada. Ms Fath is an Australian citizen. She was previously married to Elmoustafa Fath, whom she had also sponsored to come to Australia and with whom she had two children.

13. In October 2012, the appellant was granted a subclass 976 visa by the Department of Immigration and Border Protection (the Department) and entered Australia where he lived with Ms Fath and her two children. In February 2013, Ms Fath sponsored the appellant for a partner visa. Pending the determination of his application (which was ultimately refused in August 2015 as Ms Fath had, by then, withdrawn her sponsorship of him), he was permitted to work in Australia.

14. In 2013, the respondent employed the appellant as a dock-hand at its Erskineville depot where he worked on the afternoon shift processing ingoing and outgoing freight for international and domestic transport. In January 2014, the appellant became a member of the Transport Workers’ Union (TWU).

The September 2014 interchange

16. In about September 2014, another employee, Joseph Johnpulle, made comments to the appellant about Al Qaeda destroying the Twin Towers in New York on 11 September 2001. The appellant found the comments “most offensive and unwelcome” and asked him not to talk to him about it. Mr Johnpulle said, “okay, I’m just telling you”.

The early November 2014 interchange which was reported to Mr Fath

17. In early November 2014, Mr Johnpulle made similar comments to the appellant and showed him a video posted by the Taliban which showed what the primary judge described as “particularly abhorrent material”. The appellant decided to report the matter to James Hewlett, the Operations Manager of Imports. As Mr Hewlett was not available, the appellant complained about Mr Johnpulle to Mr Fath (the appellant’s wife’s ex-husband), who happened to be his team leader. Neither Mr Fath nor Mr Johnpulle gave evidence but the primary judge relied on the terms of the letter of dismissal sent to Mr Johnpulle on 9 February 2015 (see below), which her Honour considered to be “factually correct”.

The interchange on 19 or 20 November 2014 which was not reported to Mr Fath

18. Mr Johnpulle made similar comments to the appellant on 19 or 20 November 2014 but, according to the letter of dismissal, the appellant did not report those comments to Mr Fath on that occasion.

The interchange on 7 January 2015 which was reported to Mr Hewlett

19. Notwithstanding his assurances to Mr Fath, Mr Johnpulle made further comments of a similar nature to the appellant on 7 January 2015, in circumstances where the appellant felt that Mr Johnpulle was so physically proximate as to be “in his face”. On the same day, the appellant reported what had occurred to Mr Hewlett.

20. The appellant’s evidence was that, when he reported the matter to Mr Hewlett, he was “crying and upset”. Mr Hewlett recalled that the appellant was “calm” about it. The primary judge said:

“34   Mr Hewlett gave evidence that 7 January was the first time Mr Karzi spoke to him about the matter. He was told that Mr Johnpulle ‘verbally attacked’ and made ‘some racial remarks’ to Mr Karzi.

35    Contrary to Mr Karzi’s evidence that he was demonstrably upset during the course of the conversation, Mr Hewlett remarked that he was calm about it.

36    Mr Hewlett was firm in his evidence that at all times Mr Karzi appeared to be concerned but not upset or distressed. He specifically denied that Mr Karzi was crying.

37    With respect to Mr Karzi’s demeanour, I note that a file note was in evidence by a person named Philip James dated 7 January at 5pm. It referred to the various comments said to have been made by Mr Johnpulle and continued:

‘Younis has advised he will not tolerate such conversation again & wants this dealt with immediately by Toll.

Younas has advised he will be seeking TWU & legal advice as apparently this is not the first time he has been spoken to by Joseph like this.

He appeared very upset’.

38    Mr James did not give evidence; the time and date indicated that the email was prepared at or shortly after the meeting with Mr Hewlett, but there was no elucidation as to what he meant by “very upset”.

39    Mr Karzi did not ask for, or take, any time off, nor did he voice any other concerns to Mr Hewlett, nevertheless, as part of the usual procedure, he told Mr Karzi about the Employee Assistance Programme (EAP) and noted that there were signs around the premises which advised its contact details. He also gave him the details of a Chaplaincy service which Mr Karzi could approach.”

21. Mr Hewlett spoke to both the appellant and Mr Johnpulle and asked them to put their positions in writing (the appellant’s statement bearing the date 12 January 2015 but signed and dated 11 March 2015 formed part of his evidence in chief). Mr Hewlett subsequently consulted the respondent’s Head of Human Resources, Emila Cvetkovic, and the respondent’s acting manager for New South Wales, Joshua Peacock. The respondent investigated Mr Johnpulle’s conduct.

The show cause letter to Mr Johnpulle dated 16 January 2015

22. On 16 January 2015, the respondent wrote a show cause letter to Mr Johnpulle detailing the appellant’s complaint and asking Mr Johnpulle to provide a written response as to why his employment ought not be terminated (the terms of this letter is referred to in detail below) (the show cause letter). Later in January 2015, delegates of the TWU asked the appellant to withdraw his complaint against Mr Johnpulle but he refused to do so.

The dismissal of Mr Johnpulle by letter dated 9 February 2015

23. As a result of the investigation, Mr Johnpulle’s employment was terminated. His letter of dismissal dated 9 February 2015 reiterated the allegations from the show cause letter and was relied on by the primary judge as a contemporaneous document which was reliable (the dismissal letter).

24. Mr Johnpulle’s challenge to his dismissal in the Fair Work Commission (FWC) failed although he was subsequently reinstated (after the appellant had stopped work due to his back injury).

The TWU protest on 17 February 2015

25. On 17 February 2015, members of the TWU protested about the appellant’s presence at the Erskineville depot, claiming that he was a risk to their health and safety. Mr Hewlett and Mr Peacock gave evidence that the TWU was prohibited from taking industrial action in response to the dismissal of one of its members and, therefore, the TWU chose to characterise its protest in a way which, by emphasising the appellant’s behaviour, appeared to be legitimate. As the respondent could not order the TWU not to take action, it referred the matter to FWC for resolution.

The appellant’s first transfer to the Mascot depot

26. In mid-February 2015, with a view to defusing the conflict, Mr Peacock told the appellant that he would be transferred to the Mascot depot (the closest depot to Erskineville), which was run by a company related to the respondent. A position was created for the appellant for that purpose. Mr McCulloch SC, who appeared with Mr Doak for the respondent, accepted that the respondent’s commercial interest in the smooth operations of its Erskineville depot were advanced by this transfer.

27. The primary judge noted the conflict between the appellant’s evidence that he was very upset and broke down at the news of his transfer and the evidence of Mr Peacock and Ms Cvetkovic, which was that the appellant did not complain and that his attitude was “stoic”. Mr Peacock told the appellant that the respondent was there to support all of its employees, whether permanent or casual. His impression was that the appellant was “quite pleased and happy that he was being heard and that [the respondent was] following due process”. Her Honour accepted Ms Cvetkovic’s evidence that if the appellant had shown any distress, she would have provided him with support.

The appellant’s first return to the Erskineville depot

28. The appellant worked at the Mascot depot until about 16 March 2015, following which he was transferred back to the Erskineville depot to work in Freight Solutions. The TWU reiterated its complaints about the appellant.

The appellant’s transfer to the Mascot depot

29. As a result of the TWU’s ongoing complaints, the appellant was moved back to the Mascot depot where he worked until April 2015.

The appellant’s second return to the Erskineville depot

30. The respondent agreed with the TWU that the dispute concerning the appellant would be mediated by Mr Harrison, a former member of the NSW Industrial Relations Commission. Pursuant to the mediated agreement, the appellant resumed work as a permanent employee (he had previously been casual) at the Erskineville depot in Freight Solutions.

31. There was a conflict in the evidence about the appellant’s response to his move to Freight Solutions at the Erskineville depot. The appellant said that he was very unhappy and depressed and had to work alone in a “small cage” which was “no bigger than a dining room” where he had no contact with anyone else and no access to communal facilities. He said that he found working there “dehumanizing” and “humiliating”. The primary judge was not satisfied that the appellant’s version of the conditions or the workplace was accurate, finding that it was “considerably embellished”.

32. The appellant’s evidence was contradicted by that of Maxine Prince, the supervisor of Freight Solutions at the Erskineville depot from at least January 2015. She described an outside area of about 150m x 150m (“half a football field”) which was surrounded by a cyclone fence to secure bonded and sensitive goods and goods which could not yet be delivered, which was adjacent to an office area. At any one time, of the eight employees on shift in the unit, four would be in the outside area and four would be in the office. There was a toilet in the outside area as well as in an adjacent building. Ms Prince observed that the appellant was a good worker who got on with his colleagues and showed no indication that he was struggling with issues to do with his mental health. He did not complain to her or seek to be transferred out of the unit. Nor did he seek time off or take sick leave.

Ms Fath’s withdrawal of sponsorship

33. In July 2015, Ms Fath withdrew her visa sponsorship of the appellant, as a result of which the Department required him to show cause why his application for a partner visa (which was still pending) ought not be refused. His application was refused on 25 August 2015. The appellant sought a review of the refusal in the Administrative Appeals Tribunal (AAT) and also applied for permanent residency. The appellant argued that Ms Fath withdrew her sponsorship of him because of the psychiatric injury he had sustained and, thus, his damages should be assessed on the basis that, but for the psychiatric injury, the sponsorship would have continued and he would have become a permanent resident. This matter is relevant only to the assessment of damages which, in light of my conclusion on liability, does not arise.

34. From April 2015, the appellant continued to work in Freight Solutions at the Erskineville depot without complaint or time off until he injured his lower back on 9 November 2015 and stopped work. At the time of the proceedings before the primary judge, he had not resumed work.

35. On 21 November 2015 the appellant lodged a workers compensation claim in respect of psychiatric injury.

36. On 3 March 2016, the AAT affirmed the Department’s refusal of the appellant’s applications for a partner visa and permanent residency, with the consequence that he could no longer legally work in Australia.

The primary judge’s findings about the appellant’s evidence

37. The primary judge addressed the inconsistencies in the appellant’s evidence. She noted that the appellant denied that he knew that Ms Fath had been married to his supervisor, Mr Fath, although he referred to their son in his visa applications and would often give Mr Fath a lift home.

38. The primary judge found:

“94   There was nothing in [the applicant’s] conduct which either expressly or impliedly indicated that he was suffering mental stress in late 2014 – early 2015: he followed the dispute resolution process; he did not advance a further complaint of any sort between November 2014 and February 2015; he did not attend a medical practitioner (or if he did, there was no evidence about it); he did not seek, nor take, time off work.

95    He made no further complaint. He did not consult a medical practitioner (other than one visit to his general practitioner on 19 February 2015) until his back injury.”

39. The primary judge also recounted the inconsistent history given by the appellant to various doctors as well as the contents of his statement dated 11 March 2015 (which was not provided to the respondent until 21 December 2015) in which he expressed a desire to claim $5 million from the TWU “for damages they caused to [his] life and [his] family”. The statement contained various passages which indicated that the respondent’s supervisory staff were supportive of the appellant and had sought to assist him. For example, Mr Peacock had driven the appellant to the Mascot depot in a company vehicle and, on arrival, Mr Hewlett instructed “Andy” to look after him because he is “very reliable and a good man”.

40. The primary judge was satisfied that the respondent “responded immediately, courteously and thoughtfully to the complaint” and said, “[i]t is difficult to see what other measures [the respondent] could have taken”. Her Honour found that the appellant had suffered a psychiatric injury but that it had been sustained after the abuse by Mr Johnpulle and the appellant blamed the TWU, not the respondent, for his depression and anxiety.

41. The primary judge noted that the appellant told his treating psychologist, Ingrid Peters, that he was concerned that “getting better psychologically may damage his legal and work cover arrangement” (the appellant was being supported by workers compensation payments which became even more important after 3 March 2016 when he could no longer legally work in Australia). The primary judge noted that Ms Peters said, when reviewing the results of three psychometric assessments which the appellant had undertaken, that the results were in such an “extreme range so as to suggest considerable distortion”, which rendered the results invalid. Dr Jonathan Phillips, psychiatrist, expressed a similar view.

The primary judge’s legal analysis of the plaintiff’s claim

42. The respondent accepted that, as the appellant’s employer, it owed him a duty of care. The risk of harm was the risk of psychological injury caused by the actions of the respondent’s other employees.

43. The primary judge was not satisfied that, when the appellant reported Mr Johnpulle’s comments to Mr Fath on a single occasion in early November 2014, the respondent ought to have known that the issue was other than interpersonal or that there was a risk of psychiatric harm to the appellant.

44. Her Honour said:

“146    The plaintiff reported Mr Johnpulle’s comments to the leading-hand, Mr Fath in late 2014. He said he felt ‘stressed’ and unhappy.

147    There is no evidence to corroborate that assertion but that is not to say that the plaintiff ought to be disbelieved.

148    The objective evidence is supportive of the matter being relatively minor. Mr Karzi continued working without taking any time off.

149    As Chief Justice Spigelman said in Naidu (at 39), “there is no scope for extending the doctrine of constructive knowledge so as to encompass all the employees of a company. To do so would be, in substance, to impose a duty on all organisations to establish elaborate systems of inquiry and investigation which are truly burdensome.”

150    That statement has considerable force in the context of a leading hand in a transport depot of a multinational company.

151    In my assessment, at that stage, the issue was interpersonal and not sufficient to establish that the defendant knew or ought to have known that there was risk of psychiatric harm to the plaintiff and I so find.”

(Emphasis in original.)

45. As to the complaint to Mr Hewlett on 7 January 2015, the primary judge found that the evidence did not support a finding that there was, at that time, a reasonably foreseeable risk of psychiatric harm.

46. As to the effect on the appellant of the TWU’s protest on 17 February 2015, the primary judge accepted the evidence of Mr Peacock and Ms Cvetkovic that the appellant was calm when he learned that he was to be transferred to the Mascot depot. Although the primary judge found that the appellant developed “a psychiatric injury of a transient nature following the activities of the TWU and its delegates”, her Honour found that the risk of psychiatric injury to the appellant was not reasonably foreseeable by the respondent at this time. The primary judge was not satisfied that this transient psychiatric injury was the cause of his breakdown at the end of 2015.

47. The primary judge was not satisfied that the respondent ought to have been aware that the appellant was at risk of injury while working at Freight Solutions.

48. Thus, although the primary judge accepted that the respondent owed the appellant a duty of care with respect to the risk that he might suffer depression and anxiety (or other psychiatric conditions) as a result of the actions of its other employees, the risk was not reasonably foreseeable.

49. As to the reasonable precautions taken by the respondent (had the primary judge found that the risk of harm was reasonably foreseeable), her Honour said at [174]:

“I find that the defendant had, in place, a policy concerning grievance resolution and that it followed its own policy. It followed it swiftly, fully and robustly:

(a)    it took swift action against Mr Johnpulle when it became apparent that he would not honour his undertakings to Mr Fath and the plaintiff that he would desist in his conduct;

(b)    it took immediate action to refer the Union’s grievances to the Fair Work Commission;

(c)    it removed Mr Karzi from a place in which he could have been at risk (that is, the Erskineville premises) and created a position for him at another site;

(d)    it returned him to those premises but with full (as against part-time) employment in a secure, but not caged, area. I find that no cage was built to accommodate him and he was not isolated from other employees.”

50. Further, the primary judge found that the respondent took appropriate steps to render assistance to the appellant, by following its own internal policy and not because the appellant showed signs of psychiatric problems. Her Honour referred to the disciplining of Mr Johnpulle and the assistance provided to the appellant. In addition, the primary judge pointed to the appellant’s lack of any complaint during the period from February 2015 until November 2015 and the fact that the respondent’s employees commended him on his work ethic. Her Honour also referred to the steps the respondent took to change the appellant’s work location to protect him, to promote him to full-time work, to investigate the appellant’s complaint and take immediate action to ameliorate its effects and to ensure that it would not recur, including by referring the TWU’s conduct to the FWC.

The primary judge’s findings on damages

51. The primary judge found, at [197], that the medical evidence largely supported the conclusion that the appellant suffers from a psychiatric injury and is incapacitated for work. Her Honour also said, at [198], that “[t]here was evidence that the [appellant’s] psychiatric condition was caused, in part by the effects of the back injury and the stress of his immigration status.”

52. The primary judge was not satisfied that the appellant was entitled to damages other than for his back injury, which was the subject of a separate claim for workers compensation. Her Honour noted that the appellant neither took time off nor sought medical assistance between February 2015 and November 2015 and “therefore suffered no loss”. The primary judge said that the evidence which had been adduced covering the period from 3 March 2016 when the appellant’s visa was cancelled did not enable her to assess any damages.

Consideration

Challenges to findings of fact

53. The appellant has filed a statement pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 51.36(2), which identifies the challenges made to the primary judge’s findings of fact. It is convenient to address these, in chronological order (rather than the order in which they appear in the statement) before turning to the grounds affected by those challenges.

The primary judge’s failure to make an express finding as to the number of times the appellant complained to Mr Fath in November 2014 about Mr Johnpulle’s conduct

54. The appellant submitted that the primary judge did not make an express finding as to how many times he reported Mr Johnpulle’s conduct to Mr Fath, although her Honour found that he had complained to Mr Fath in November 2014 but not in September or December 2014. The appellant submitted that the show cause letter and the dismissal letter supported the appellant’s contention that he complained to Mr Fath twice in November 2014 and that the primary judge ought to have made such a finding on that basis.

55. The show cause letter and the dismissal letter are in relevantly similar terms. Each contains four allegations as follows:

1. Mr Johnpulle engaged in verbal conduct towards the appellant contrary to the respondent’s Code of Practice – Workplace Behaviours (the code) on 7 January 2015;

2. Mr Johnpulle engaged in verbal conduct towards the appellant on about 24 or 25 September 2014 contrary to the code (which was not said to be the subject of complaint);

3. Mr Johnpulle engaged in verbal conduct towards the appellant contrary to the code in early November 2014 which included the following particulars, c and d of which concern the appellant’s complaint to Mr Fath:

“Particulars to Allegation 3:

a. On an occasion when Younas was outside the Bond area, releasing the bond, you approached Younas and said to him words to the effect ‘Younas, it's good what the Taliban did to America. Look what they are doing to the Afghan people’,

b. You walked away from Younas after he said to you ‘Joe, I have said to you before that I don't want to talk about this kind of thing. It has nothing to do with me. I am here to do my job.’

c. After Younas complained to the leading hand, Mostafa Fath, about your comments to him, Mostafa said to you words to the effect ‘I don't want you to talk to Younas about the war or anything like that. We are here to do the job, not to talk. Rubbish’. In response, you said to Mostafa words to the effect ‘OK, I was just joking with him’.

d. When Mostafa responded to you ‘No, he doesn't like to hear or talk about this rubbish’ you said words to the effect ‘OK, I won't say it again.’”

4. Mr Johnpulle engaged in verbal conduct towards the appellant contrary to the code on about 19 or 20 November 2014. The particulars to the fourth allegation do not include any reference to the appellant having complained to Mr Fath on that occasion but merely said:

“Particulars to Allegation 4:

a. At approximately 3:10pm while Younas was doing the customs scanning and you were scanning the satchels for him, you said to Younas words to the effect ‘Oh Younas, last night I watched a video. The Taliban was killing someone’.

b. When Younas reminded you that you had said you would not make such comments again, you said words to the effect ‘OK, sorry.’”

56. In support of his submission that the appellant had complained to Mr Fath at least twice in November 2014, Mr Parker SC, who appeared with Mr de Greenlaw on behalf of the appellant, relied on his cross-examination of Mr Hewlett (who was not approached by the appellant until 7 January 2015) as follows:

“Q. … In Mr Karzi's case, he spoke on at least two occasions with Mr - his leading hand, Mr Fath; is that right?

A. Correct.

Q. And you - in your investigation, you've confirmed that to be so; yes?

A. That's correct. Yeah.

Q. And he did that in 2014; is that right?

A. I - yes, the date - the - the dates, yes, it was--

Q. You've got the dates.

A. Correct.

Q. But in any event, it was before your investigation, which commenced no earlier than 7 January 2015?

A. Yeah. Yes.

Q. Were you informed by Mr Fath that he had spoken to Johnpulle?

A. No.

Q. Did you confirm with Mr Fath that he'd spoken to Johnpulle?

A. Later through the investigation, yes.”

57. Mr Parker could not point to any of the respondent’s documents which supported two complaints having been made to Mr Fath in November 2014. Indeed, the show cause letter and the dismissal letter indicate that only one complaint was made and it was made in early November 2014 and not on either 19 or 20 November 2014. I do not regard Mr Parker’s cross-examination of Mr Hewlett as sufficiently precise to amount to evidence that two complaints had been made. The first question (reproduced above) was, in substance, asking Mr Hewlett whether he was aware that the appellant’s “case” was that he had complained twice to Mr Fath, with which Mr Hewlett agreed. While Mr Hewlett apparently agreed that he “confirmed that to be so”, his answer to the second question is consistent with his having confirmed that the appellant complained to Mr Fath, rather than that he complained to Mr Fath twice.

58. The investigation conducted by Mr Hewlett was well-documented. Its results were set out in the show cause letter and the dismissal letter, both of which were contemporaneous documents. The primary judge was entitled, and, in my view, correct, to prefer those documents to the appellant’s evidence and the vague “concessions” made by Mr Hewlett in cross-examination, particularly in circumstances where Mr Hewlett’s attention was not drawn to any of the relevant documents: see Watson v Foxman (1995) 49 NSWLR 315 at 318-319 (McLelland CJ in Eq).

The primary judge’s finding that Mr Fath was not a person authorised to receive the appellant’s complaint

59. The appellant challenged the primary judge’s alleged finding that Mr Fath was not a person authorised to receive his complaint. In support of this submission, Mr Parker relied on paragraphs [149]-[150] extracted above.

60. Mr Parker submitted that her Honour ought to have accepted Mr Hewlett’s evidence that Mr Fath, as the appellant’s team leader and leading hand, was authorised to receive his complaint and required to act on it by escalating it to his supervisor. Mr Parker relied on his cross-examination of Mr Hewlett as follows:

“Q. And you established, did you not, that although Mr [Johnpulle] had indicated that he would respond and desist from the conduct that he was engaged in, in relation to Mr Karzi, he did not do so; correct?

A. That's correct.

Q. He didn't respond to the undertaking he'd given to Mr Fath?

A. That's correct.

Q. Now, under the Code, Mr Fath should have escalated the complaint to a higher level, shouldn't he?

A. That's right.

Q. When he didn't get a local response that was adequate, it should have been escalated, what, to you?

A. To myself or the other operations manager.

Q. Or another … supervisor?

A. Correct. Yeah.

Q. And that would have generated an investigation and more senior operatives responding to the behaviour?

A. Yes.

Q. Correct? And you agree with me, do you not, that one of the advantages of escalating it up the chain promptly like that is so it can be, as it were, nipped in the bud at an early point of time?

A. Yes.

Q. That's right? And that opportunity was lost, because Mr Fath, the leading hand, didn't escalate the complaint up the chain of command at an earlier point of time; correct?

A. Yeah. Yeah. Yes.

Q. And, indeed, Mr Fath never escalated it?

A. No.

Q. And that's contrary to the grievance policy, isn't it?

A. Yes.”

(Emphasis added.)

61. Mr Parker also relied on the respondent’s “Workplace Behaviours Standard” which included the Grievance Resolution policy (the Standard). He submitted that Mr Johnpulle’s behaviour towards the appellant was “inappropriate behaviour” within the meaning of the Standard and that Mr Fath should have reported it to Mr Hewlett in November 2014. He submitted that this finding was erroneous as the respondent had a “clearly articulated published policy prohibiting bullying, harassment and racial vilification” which was “mandatory” and that, under the policy, Mr Fath was the appropriate person to whom such a complaint ought to have been made. He submitted that it was not open to Mr Fath to refrain from acting on the information as he was obliged by the policy to “escalate” that complaint by reporting it to Mr Hewlett.

62. The Standard, which was effective from 1 March 2013, relevantly provided:

“What you must do

Ensure you treat others with dignity, courtesy and respect, and do not discriminate or harass another colleague, customer, supplier, contractor or anyone else that you interact with in your work at Toll.

Employees who witness or experience behaviour that is unacceptable in the work environment should raise their concerns directly with the person. Matters resolved at this level will enable the issue to be resolved without the need for higher authority intervention and therefore a normal working relationship may be continued.

Alternatively, raise them with a manager, your Human Resource Representative or contact officer and encourage others to do the same.

If an employee tells you about a matter and has done nothing to resolve it and/or wants to keep it confidential, tell them that you have a responsibility to act, Toll takes these matters seriously and you will be informing your manager or HR Representative.”

…

Harassment (including sexual/racial harassment)

Harassment occurs when uninvited or unwelcome behaviour causes someone or a group of people to feel intimidated, insulted or humiliated. It can occur in a single incident or a series of incidents. Harassment may also be experienced by someone witnessing behaviour not directed to them e.g. overhearing an unacceptable joke.

Each person perceives things differently as their values and experiences are unique to them. They therefore, may react differently to how someone might expect them to react.

…

Racial harassment

Racial harassment is another form of harassment. It describes any unwelcome conduct in relation to a person's colour, race, nationality, social or ethnic origin or extraction. It can range from relatively minor abuse to physical violence. It can be discriminatory remarks, behaviours or practices which show racial intolerance against a colleague.

…

Experiencing unacceptable behaviour

If an employee believes that they have been discriminated against, bullied or harassed, sexually harassed, vilified or victimised, or if they have witnessed any of these events, Toll strongly encourages the employee to do something about it. Ignoring this behaviour might be interpreted by the other person as consent or acceptance.

Do not respond to unacceptable behaviour with more unacceptable behaviour.

If an employee is angry and upset because of unfair treatment, Toll encourages them to take some time to follow the correct process or seek help from their manager, human resources or another support person.”

63. The Standard also provided for “Grievance Resolution” and listed four stages of the resolution process: first, “personal resolution”; second, “Manager Assistance” (the employee discusses concerns with their manager); third, “HR in consultation with the Manager/Next Up Manager”; and fourth, “Formal Grievance Resolution” (which is initiated by a formal complaint).

64. The premise of Mr Parker’s submissions is flawed in that it is based on the erroneous proposition (which was also the subject of the first finding challenged) that the appellant had reported Mr Johnpulle’s conduct twice to Mr Fath, rather than, as the primary judge found, only once. Mr Fath was not called and it was accepted that no Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inference was available as there was a letter from a medical practitioner as to his unavailability. While it is understandable, in these circumstances, that Mr Parker felt that he had to put these propositions to Mr Hewlett, there was a degree of unfairness in Mr Parker’s not drawing Mr Hewlett’s attention to the terms of any document, most particularly the show cause letter or the dismissal letter (which were produced by Mr Hewlett and on which the primary judge relied in finding that there had only been one report to Mr Fath).

65. Mr Fath’s conduct was consistent with stage 2 of the Standard in that he had been approached by the appellant who asked for assistance in dealing with the issue (which the appellant had tried to resolve by stage 1, personal resolution). The Standard did not require Mr Fath to report the matter to Mr Hewlett when he had only received one complaint and obtained an assurance from Mr Johnpulle that he would not repeat his conduct.

66. Contrary to Mr Parker’s submission, the primary judge did not find that Mr Fath was not authorised to receive the appellant’s (informal) complaint about Mr Johnpulle. Such a finding is not expressly stated in her Honour’s reasons and, indeed, it is implicit in the primary judge’s reasons that Mr Fath, as the appellant’s leading hand and immediate supervisor, was authorised to receive it. According to the grievance procedure, it was appropriate for the appellant to raise the matter with Mr Johnpulle himself and then, when the issue did not resolve, to raise it with Mr Fath. As there was only one complaint to Mr Fath and Mr Fath was not told of the further conduct on 19 or 20 November 2014, it was not necessary for Mr Fath to escalate it by informing Mr Hewlett. This challenge has not been made out as the finding alleged was not made.

The primary judge’s finding that Mr Johnpulle’s comments in 2014 were interpersonal and not sufficient to establish that there was a risk of psychiatric harm to the appellant

67. The primary judge found that in late 2014 the appellant reported Mr Johnpulle’s comments to Mr Fath and told him that the comments made him feel “stressed” and unhappy. Her Honour found that the objective evidence supported the conclusion that the matter was “relatively minor” as the appellant had continued working without taking time off and that “the issue was interpersonal and not sufficient to establish that the defendant knew or ought to have known that there was risk of psychiatric harm to the plaintiff and I so find.” (Emphasis in original).

68. Mr Parker submitted that it was apparent from the show cause letter and the dismissal letter that Mr Johnpulle’s comments were “abhorrent and offensive” and that, although expert evidence was not necessary, Professor Tennant gave opinion evidence that such conduct comprising bullying and harassment on racial grounds could lead to psychological injury.

69. The question whether Mr Johnpulle’s comments to the appellant gave rise to a risk of psychiatric harm to him needs to be answered by reference to the appellant himself since the comments themselves were not necessarily such as to pose a risk of psychiatric harm, as distinct from causing offence. The objective facts were that the appellant had complained once to Mr Fath (in early November 2014, see above) and that he was continuing to work to his usual standard, without further complaint or time off notwithstanding that he can be assumed to have had subsequent contact with Mr Johnpulle. In the absence of further complaint, it was reasonable for Mr Fath to assume that the matter had been resolved by his approach to Mr Johnpulle in early November 2014 following the complaint, that there had been no recurrence and the comments were “interpersonal” in that they required no further intervention on behalf of the respondent. The challenge to this finding has not been made out.

The primary judge’s finding that, on 7 January 2015, the appellant appeared to be concerned but not upset or distressed

70. The appellant submitted that the primary judge’s finding that the appellant was not demonstrably upset during the course of his conversation with Mr Hewlett on 7 January 2015 was erroneous and that the primary judge ought not to have accepted Mr Hewlett’s oral evidence that the appellant appeared to be concerned but not upset or distressed. He submitted that the primary judge’s findings were “influenced if not entirely based on the finding that [the email extracted at [37] of the primary judge’s reasons – see above] was not authored by Mr Hewlett.” The appellant submitted that the primary judge ought to have found that Mr Hewlett was the author of the note, that it represented an accurate record of the meeting and the appellant’s emotional state, which was very upset.

71. Mr McCulloch accepted that the email extracted at [37] of the primary judge’s reasons had been created by Mr Hewlett and comprised a contemporaneous note of their meeting on 7 January 2015. However, he submitted that this concession was not inconsistent with the primary judge’s finding that the appellant appeared to be “calm” and “concerned but not upset or distressed”.

72. Mr Hewlett, when asked how the appellant appeared to him when he approached him on 7 January 2015, said:

“He just needed to make a complaint. He was quite calculated in what had been said and he seemed to recall what had been said so I asked him to make that clear by putting it in writing.”

73. Mr Hewlett clarified in his evidence that by “calculated”, he meant “calm”.

74. Although the primary judge was, in light of Mr McCulloch’s concession, wrong to find that the email (which served as a file note) was not Mr Hewlett’s, the reference in the email to the appellant being “very upset” ought, in light of Mr Hewlett’s evidence, be read as meaning aggrieved, rather than emotionally distressed or labile. When read in that way, the primary judge’s finding that the appellant was concerned but not upset or distressed accorded with Mr Hewlett’s oral evidence and with the gist of the email. Although the appellant’s evidence was to the contrary (that he was crying), the primary judge was entitled to reject that evidence, having regard to her Honour’s credibility findings against the appellant. This challenge has not been made out.

The primary judge’s finding that the appellant had claimed that the “cage was constructed for him”

75. Mr Parker submitted that the primary judge was in error in finding that the appellant had claimed that the “cage was constructed for him” because the appellant had not said that. The finding challenged was at [61], in the context of the following paragraphs:

“61   He was very unhappy and depressed about the move to Freight Solutions, notwithstanding that he had been made a full-time employee (rather than a casual). He said that a small ‘cage’ had been constructed for him and that he had to work in it alone, and have no contact with other employees.

62    Notwithstanding, he did not make any complaint or comment to the defendant that he was struggling with his work and could not perform that role.

63    He said that he was confined to working in a “cage”, “no bigger than a dining room” and isolated from other workers.

…

179   …

(d)   There was no complaint about the alleged ‘cage’. Ms Prince’s evidence was persuasive and logical. I find that the description given by the plaintiff of his workplace at Freight Solutions was grossly exaggerated: the cage was not built for him; it was not a small area; he was not isolated from other workers; he was not denied the opportunity to talk to other workers; he was not prevented from leaving it; he could go outside, he could go to the office area and to an occupational room on the floor above it.”

(Emphasis added.)

76. The appellant’s statement that the cage was constructed for him appears most clearly from the report of Colleen Hirst, who had been the appellant’s treating psychologist since 6 March 2017. In 2020, Ms Hirst was asked by the appellant’s solicitors to prepare a report for the purposes of the litigation and her clinical notes and reports concerning the appellant were tendered by Mr Parker at first instance (they formed part of Exhibit G).

77. In her report dated 8 May 2020, Ms Hirst recorded the following history which had been given to her by the appellant concerning his transfer from the Erskineville depot to the Mascot depot and back again:

“Mr Karzi stated that the big boss of Toll said ‘Your life is in danger. We will move you to a different location. He stated he was taken, as a matter of urgency on the same day, from the depot in Erskineville to the depot in Mascot, for his own safety and protection. Mr Karzi stated he moved from Toll in Erskineville to Toll in Mascot. He worked in Mascot for approximately 1 month. The General Manager then said he could go back to his old job.

Mr Karzi stated that when he went back to Toll in Erskineville, the union went on strike again. The next day his boss told him to go back to Toll in Mascot.

In 3 weeks time Mr Karzi came back to Erskineville. They had constructed a cage for Mr Karzi to work in. This cage was made from some sort of wire meshing. He was made to work in this cage. He felt publicly humiliated. He was not allowed to leave the cage and he was not allowed to talk to anyone.

The cage had a separate way to go to the offices and to the toilet. He was not allowed to go to the warehouse. Mr Karzi stated he was made to work in this cage for 6 months. He stated the experience was humiliating and he felt like he was being publicly punished.

Mr Karzi stated that while he was working in this cage, he also injured his back from Lifting a heavy box. He stated he heard a ‘crack’ in his back and went to hospital by ambulance. He stated that an MRI showed he had damaged his back. This was on the 9^th November 2015. This is when he stopped working.”

(Emphasis added.)

78. The report of Ms Hirst was admitted without restriction. Accordingly, it was open to the primary judge to find that the appellant had told Ms Hirst that the respondent had constructed a cage for him to work in while he was working in Freight Solutions at the Erskineville depot.

79. Further, in the appellant’s statement dated 15 July 2022, which formed part of his evidence in chief, he made reference to being allocated a “cage” which had “separate pathways to the offices and the toilet, thereby denying [him] any interaction with anyone else on the site”. It is necessarily implied in this evidence that the cage was bespoke and had been constructed for him.

80. The appellant also tendered at first instance a report of Sharon Todd, ergonomist, dated 15 June 2020. Ms Todd recorded the following history:

“Professional Isolation

68.   After this period, the Plaintiff was returned to the Erskineville site, however he was then bullied and professionally isolated, both by the management of Toll and the other workers.

69.   The Plaintiff was placed in a caged area and advised he had to work from this cage. He was told by his Employer that he was not allowed to talk to anybody and not allowed to enter the factory or use the toilet in the factory. The Plaintiff had to go to the bathroom outside and for a period of six months.

70.   The Plaintiff was directed to work in this caged area within the factory performing his work tasks. Other employees could walk past the cage, sneer or stare at the Plaintiff working in the cage, and cause industrial action if the Plaintiff so much as put his foot out of the cage during work hours.

71.   The subject cage was described as a 3m x 3m small area with no CCTV footage. The Plaintiff could open the cage door to retrieve parcels from ULD cages, however he was not allowed to put his foot outside the door during work hours. This continued until approximately November 2015.”

(Emphasis added.)

81. It is apparent from the evidence of Ms Prince that there was a secure area for certain items which was referred to as the “cage” which was surrounded by a cyclone fence which Ms Prince described as being as large as half a football field.

82. Having regard to the evidence, and in particular the appellant’s history to Ms Hirst which is recorded in a report tendered on his behalf, the challenge to the primary judge’s finding that the plaintiff had said that the cage was built for him fails.

The primary judge’s finding that the respondent’s response to the risk that the appellant might suffer psychological harm was adequate

83. Mr Parker argued that this finding (at [109]) was contrary to the evidence of Professor Tennant, whom the primary judge accepted as follows:

“108   Professor Christopher Tennant, psychiatrist, provided an expert report in which he opined that unless the employer is standing ready or someone in authority is standing ready to prevent an interaction occurring, it can never be prevented: it is the employer’s response which is critical.

109   I am satisfied that the defendant responded immediately, courteously and thoughtfully to the complaint. It is difficult to see what other measures Toll could have taken.”

84. Mr Parker relied on Professor Tennant’s evidence that early intervention was essential to minimise the consequence of bullying. He submitted that Mr Fath delayed intervention by not reporting to Mr Hewlett the inappropriate conduct, which the appellant had reported to him in November 2014. He also submitted that the primary judge was in error in failing to act on the evidence that the appellant should have been permanently removed from the Erskineville depot. These aspects of the challenge will be addressed in turn.

Alleged delay in intervention

85. Mr Parker’s submission that Mr Fath had caused a delay in the respondent intervening on the appellant’s behalf was based on the proposition that he had received more than one complaint in November 2014 and that Mr Fath ought to have referred the matter to Mr Hewlett in November 2014 when he became aware of the recurrence of the conduct. As both these premises are erroneous for the reasons given above, there was no relevant delay in intervention.

The return to the Erskineville depot

86. I have set out above the disparity between the appellant’s description of Freight Solutions and that given by other witnesses and her Honour’s preference for that of other witnesses.

87. Mr Parker relied on passages from his cross-examination, including the following exchanges with Mr Hewlett:

“Q. When he came back to work at Erskineville, he worked in this freight area?

A. Freight solutions.

Q. Special area.

A. Yes.

Q. The workforce and he were kept away from each other - the general workforce; is that right?

A. He worked--

Q. He was isolated?

A. He wasn't isolated. He was in a separate area.

Q. He was in a separate area--

A. Yeah.

Q. --but he was isolated from his previous colleagues and fellow employees; is that right?

A. He was in a different area, yeah.

…

Q. As we've discussed, doubtless with the best motives from Toll?

A. Yes.”

88. The evidence established, as the primary judge found, that the appellant came back to work at the Erskineville depot and worked with different colleagues than those with whom he worked when his leading hand was Mr Fath and he had the interchanges with Mr Johnpulle. As referred to above, this solution was the result of a mediated agreement between the respondent and the TWU. The appellant made no complaint about returning to the Erskineville depot and continued to work consistently and well until his back injury in November 2015.

89. The appellant has failed to make out his challenge to the primary judge’s factual finding that the respondent’s response was adequate.

The primary judge’s finding that the psychiatric injury was transient in nature and not causative of the breakdown

90. This finding will be addressed in the context of ground 11.

The finding that the appellant was not entitled to damages because he did not have a valid visa until March 2016

91. As this finding is related to ground 13, it will be considered with ground 13.

Grounds 1 and 2: alleged errors concerning duty and foreseeability of risk

92. Grounds 1 and 2, which can be addressed together, are as follows:

“1   The Primary Judge erred in failing to find the Respondent as the employer owed the Appellant a duty to exercise reasonable care to avoid a foreseeable risk of psychiatric injury caused by the conduct of the Respondent's employees:

(a)    Mr Johnpulle,

(b)    Individual members of the Union (employees of the Defendant),

(c)    Protesting members of the Union (employees of the Defendant),

(d)    Mr Peacock bringing the Appellant back to Erskineville too early, or at all, and

(e)    The placement, said to be discriminatory, of the Appellant in the Freight Solutions area.

2   The Primary Judge erred in finding that the risk of psychiatric harm was not reasonably foreseeable to the Respondent (J[165] [172]).

Particulars

(a)    Her Honour erred relying on Koehler v Cerebos (Australia) Ltd [2005] HCA 15 to inform herself on foreseeability instead of, and without reference to, the Appellant's articulated submissions referencing Kozarov v State of Victoria (2022) HCA 12.

(b)    Her Honour erred in finding that the Appellant's complaints to his Leading Hand, Mr Fath were of a minor interpersonal matter insufficient to establish that the Respondent knew or ought to have known that there was a risk of psychiatric harm. J[151].

(c)    Her Honour erred in finding that the report to Mr Hewlett on the 7th January 2015 did not support a finding that the Respondent knew or ought to have known of a foreseeable risk of psychiatric harm to the Appellant (J[157]).

(d)    Her Honour erred in finding that the Appellant was required to report to the respondent that he was suffering workplace stress, adverse psychological symptoms or that he felt intimidated by the activities of the Union members at the workplace J[160][161].

(e)    It was not necessary for Mr Karzi to complain about the Union activity or the Freight Solutions (J[179(c)] both of which were obvious and apparent to the Respondent.

(f)    The finding at J[153] that at the 7 January meeting with Mr Hewlett Mr Karzi merely appeared 'concerned' is wrong.

(g)    The Appellant complained about the Union activity in the statement dated 11 March 2015.”

Ground 1

93. It is difficult to appreciate the gravamen of ground 1 from its terms in circumstances where the primary judge found that the respondent owed the appellant a duty of care as alleged. For this reason, ground 1 has not been made out, having regard to the primary judge’s finding at [170].

94. I note for completeness that the appellant, relying on McLean v Tedman (1984) 155 CLR 306 at 311-312; [1984] HCA 60, submitted that the duty owed by the respondent to the appellant was non-delegable. So much may be accepted since the respondent was the appellant’s employer and therefore their relationship fell into a well-established category of non-delegable duties. However, the significance of the duty being non-delegable is not raised by ground 1.

Ground 2

95. As to ground 2, the primary judge, in effect, found that, having regard to the reasonable precautions taken by the respondent, it was not reasonably foreseeable that there was a risk of psychiatric harm, in light of the appellant’s presentation (as a willing, competent employee, who was not exhibiting psychiatric illness or taking time off or not managing at work).

Particular (a) of ground 2: failure to refer to Kozarov v State of Victoria

96. In his submissions (and in particular (a) to ground 2 in the notice of appeal), the appellant was critical of the primary judge for referring to the statements of principle in Koehler v Cerebos (Australia) Pty Limited (2005) 222 CLR 44; [2005] HCA 15 (Koehler) but not referring to what the High Court said in Kozarov v State of Victoria (2022) 273 CLR 115; [2022] HCA 12 (Kozarov). Mr Parker also relied heavily on the decision of the Victorian Court of Appeal in Stevens v DP World Melbourne Ltd [2022] VSCA 285 (Stevens) (to which the primary judge was not referred), which he contended ought be followed by this Court.

97. In Koehler, the plaintiff (who was the appellant) was employed for 24 hours a week as a sales representative to negotiate sales of her employer’s products to independent supermarkets. She informed her employer that she could not visit all the stores stipulated within her weekly hours and made suggestions as to how the task could be performed within the time. The employer did not adopt her suggestions. Ultimately, the plaintiff suffered from a psycho-physical disorder which resulted in “pain amplification”. The High Court dismissed her appeal. It held that the employer’s duty of care to avoid psychiatric injury depended on the nature and extent of the employee’s work and the indications given by the employee to the employer. It held that where there is no reason to suspect that, by performing duties under a contract of employment, the employee is at risk of psychiatric injury, the employer’s employment requirements cannot amount to a breach of the duty of care to avoid causing psychiatric injury.

98. In Kozarov, the appellant (K) worked in the Specialist Sexual Offences Unit (SSOU) of the Victorian Office of Public Prosecutions (OPP). Before K’s employment commenced, the SSOU had adopted a Vicarious Trauma Policy for the protection of the psychiatric health of its employees. K exhibited the signs of vicarious trauma and post-traumatic stress disorder (PTSD) such that, by the end of August 2011, a reasonable employer would have been aware of the heightened risk to K’s psychological health and taken reasonable steps to ameliorate the risk, including by rotating K out of the SSOU, thereby avoiding the exacerbation of K’s PTSD. On this basis, the State of Victoria was liable for damages in negligence to K.

99. In Stevens, the appellant, Mr Stevens, was employed as a safety representative. He made about 300 safety reports each year, which compared with an average of 5-10 made by others in similar positions. His diligence resulted in his being subjected to substantial bullying and harassment, both by co-workers and his supervisors. Mr Stevens was unsuccessful in his claim at first instance as the first instance judge was not satisfied that he had exhibited signs of distress during the period of bullying and harassment. The Court of Appeal allowed the appeal, finding at [59]:

“In the present case, what was critical was not whether the plaintiff exhibited evident signs of distress or vulnerability, but rather whether the defendant took reasonable care to avoid an acknowledged reasonably foreseeable risk of psychiatric injury being caused by the plaintiff’s treatment by fellow workers in the workplace. It follows that, to the extent that the judge rejected the plaintiff’s claim on the basis that the plaintiff did not manifest evident signs of distress or vulnerability, his Honour erred.”

100. Mr Parker submitted that because the respondent had a harassment and bullying policy which recognised the risk of harm of such conduct, it can be taken to have “acknowledged reasonably foreseeable risk of psychiatric injury” from such conduct and that the same result as in Stevens ought follow.

101. The correct approach to the relevance of authority in this area was set out in Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62 by Gleeson CJ and Kirby J (in dissent as to the result but not as to the applicable principles), who said, of present relevance:

“2   The issue of breach of duty in an action framed in negligence is one of fact, although its resolution involves the application of normative standards. The central question concerns the reasonableness of the defendant's behaviour. It is understandable that, in a search for consistency, comparisons with similar cases will be made. However, as Lord Steyn said in Jolley v Sutton London Borough Council, decided cases in this area are fact-sensitive, and it is a sterile exercise, involving a misuse of precedent, to seek the solution to one case in decisions on the facts in other cases.

3   The proper use of precedent is to identify the legal principles to apply to facts as found. Decided cases may give guidance in identifying the issues to be resolved, and the correct legal approach to the resolution of those issues. …”

(Footnotes omitted)

102. These three cases, Koehler, Kozarov and Stevens illustrate how fact-specific torts cases are and how the principles operate in different factual situations. They highlight why the High Court in Koehler held that the nature and extent of the employee’s work were significant when addressing whether the employer had been negligent when an employee suffers from work-related psychiatric injury. In Kozarov, the nature of the tasks required to be performed by K carried with them the risk of psychiatric injury such as was suffered by K because they exposed her to the significant trauma of others. However, in Koehler, the risk posed by the plaintiff’s employment arose because the plaintiff adjudged that the task was too demanding for her working hours. In the former case, the employer’s duty of care requires it to be alert to potential harm, whether the employee shows signs of harm. In the latter case, the employer will not be alerted to the risk of harm unless the employee indicates that harm is being suffered, or is likely to be suffered.

103. In Stevens, the conduct was perpetrated not only by fellow workers but also by Mr Stevens’ supervisors and management and had reached a significant level. Thus, irrespective of whether Mr Stevens exhibited signs of distress, the conduct was such as to make psychiatric injury reasonably foreseeable and call for the employer to intervene to take steps to prevent such harm. The lengthy history of serious and widespread bullying in Stevens puts it in an entirely separate category from the present case.

104. In the present case, the potential for psychiatric harm arose from the comments of Mr Johnpulle and the reaction of the TWU to the appellant’s complaint. When the appellant raised his concerns with the respondent, it took immediate steps to protect him (by reprimanding Mr Johnpulle, by separating the appellant from Mr Johnpulle by creating a position for him at the Mascot depot, by referring the matter to the FWC for resolution and by employing him in a permanent position in Freight Solutions). It may be that, had the appellant’s reaction to these incidents been as described in his own evidence, the respondent would have been alerted to the potential for psychiatric harm.

105. However, the respondent’s conduct is to be adjudged by the facts as found by the primary judge, who had the benefit of seeing and hearing the witnesses give evidence. No error has been shown in the primary judge’s findings regarding the appellant’s credit (whose evidence was redolent with inconsistencies and exaggeration) or her Honour’s preference for the evidence of Mr Peacock, Ms Cvetkovic and Mr Hewlett as well as the objective evidence (that the appellant did not take any time off, appeared to enjoy working for the respondent and made no further complaints until he sustained the back injury on 9 November 2015) and the contemporaneous documents. Thus, the respondent’s conduct is to be assessed by reference to these findings: that the plaintiff was “upset” by the remarks of Mr Johnpulle but satisfied by the way the respondent dealt with them and content to continue with his employment with the respondent, in an industrious, reliable and consistent way, both at the Erskineville depot (including in Freight Solutions) and the Mascot depot.

106. In these circumstances, the primary judge was correct to regard Koehler, rather than Kozarov, as providing guidance since there was nothing in the nature and extent of the work of itself which gave rise to a risk of psychiatric harm. Whether the respondent ought to have foreseen that that the actions of Mr Johnpulle or the TWU gave rise to a risk that the appellant would suffer psychiatric harm depended, as the primary judge found, on whether the appellant gave any indication that his response to these matters carried with it a risk of psychiatric harm to which the respondent was obliged to respond. The primary judge’s reasons were sufficient to address the appellant’s case. Her Honour was not required to recite all of the authorities referred to by the appellant as part of her obligation to give reasons for her decision.

Ground 12: alleged error in admitting the evidence of Ms Prince

140. In ground 12, the appellant alleged:

“The Primary Judge erred when she admitted into evidence, over objection and contrary to s318(1)(d) of the [1998 Act], the evidence of Ms Maxine Prince when:

(a) The Respondent did not disclose her name or particulars of the evidence of Ms Prince contrary to s. 318(1)(d),

(b)    Her Honour provided no reasons why she admitted the evidence,

(c)    The primary judge placed extensive and impermissible reliance on Ms Prince’s evidence J[66]-[77], [123], [167]-[169], [179( d)-(g)], [193].”

141. In order to address ground 12, it is necessary to set out some background as to how the issue arose at first instance.

142. As required by s 315 of the 1998 Act, the appellant served a pre-filing statement, which included a proposed statement of claim (which accorded with the statement of claim which was actually filed). However, he did not file a statement of evidence on which he proposed to rely in support of his claim as required by s 315(1). Following provision of extensive particulars by the appellant, the respondent filed its pre-filing defence which responded to the appellant’s statement of claim. The purpose of s 315 is to ensure substantial disclosure of the positions of the parties so that prospects of settlement can be fully explored before the proceedings are commenced: Wilkinson v Perisher Blue Pty Ltd [2012] NSWCA 250 at [11] (Hoeben JA, Campbell and Barrett JJA agreeing).

143. The proposed statement of claim (and the filed statement of claim) alleged that the appellant had sustained a psychiatric or psychological injury on or by 17 February 2015. No allegation of negligence was made which related to the appellant’s transfer to the Mascot depot on that date or his return to the Erskineville depot to work in Freight Solutions.

144. For this reason, the respondent did not in its pre-filing defence refer to the evidence of Ms Prince since, on the appellant’s then case, such evidence was not relevant.

145. The hearing before the primary judge commenced on 25 July 2022. In his opening, Mr Parker referred to Mr Peacock, in the context of his having directed the appellant to return to Mascot depot where he was working four hours a day from mid-March 2015 to mid-April 2015. According to the appellant, he broke down as a result of this exchange. Mr Peacock was not referred to in the appellant’s pre-filing statement. When the primary judge raised this matter, Mr Parker said that he understood that Mr Peacock was to be called and could “respond to it one way or another”.

146. Mr Parker also sought to rely on the appellant’s statement dated 15 July 2022, which included a complaint about his transfer to the Mascot depot and his return to the Erskineville depot to work in Freight Solutions. Mr Doak objected the appellant’s statement on the basis of s 318 of the 1998 Act as follows:

“The reason I raise those two matters your Honour is because there are a number of witnesses for the defendant, lay witnesses. However, whether they are called or not largely depends on whether the plaintiff's evidence is by way of a statement and what your Honour's ruling about various matters are. If I'm successful in objecting to some parts of it, that will cut the list down quite considerably I expect. I just don't know at this stage.”

147. The respondent objected to parts of the statement on the basis of s 318(1)(d) of the 1998 Act, which relevantly provides that, for the purposes of court proceedings on a claim for work injury damages, “a party to the proceedings is not entitled to have any report or other evidence admitted in the proceedings on the party’s behalf if the report or other evidence was not disclosed by the party in a pre-filing statement or defence served under this Division, except with leave of the court.” Section 318(2) provides as follows:

“(2)    The court is not to grant leave under this section unless satisfied that—

(a)     the material concerned was not reasonably available to the party when the pre-filing statement or defence was served, and

(b)     the failure to grant leave would substantially prejudice the party’s case.”

148. On 4 August 2023, the primary judge gave an ex tempore judgment, admitting certain portions of the appellant’s statement dated 15 July 2022. Her Honour said in part, at page 3:

“Objections are taken to certain paragraphs which refer to the plaintiff’s conversations with officers of the defendant, the nature of which relates to his treatment in the workplace. The nature of those complaints was clearly adverted to in the pre-filing statement documents, and in the answers to the further and better particulars, which were extensive. As the witnesses referred to therein are to be called, the evidence should be allowed.”

(Emphasis added)

149. It is plain from the primary judge’s reasons that the appellant’s statement of 15 July 2023 was admitted on the basis that the respondent would be permitted to call the witnesses to whom the plaintiff had allegedly made complaints.

150. When the appellant was called to give evidence, he was cross-examined by Mr Doak about what, if anything, he had said to Ms Prince when he was working in Freight Solutions. The appellant said that he approached her and told her that he was struggling with his life and wanted to end his life.

151. Just before Mr Peacock was called to give evidence, Mr Parker objected on the basis that he had not been nominated in the respondent’s pre-filing defence dated 14 June 2019 and that he had received no particulars of the evidence to be adduced from Mr Peacock. The primary judge accepted Mr Doak’s submission that the respondent ought not be precluded from adducing evidence from Mr Peacock in response to the appellant’s evidence, particularly as the appellant’s statement had not been included in his pre-filing material.

152. On 5 August 2022, Mr Doak announced that he proposed to call Ms Prince. Mr Parker said:

“Your Honour, I raise the same objection in relation to this witness as I have previously, namely under s 318 on the basis that the particulars of this evidence has not been disclosed.”

153. His objection was noted (and implicitly overruled, in accordance with the ruling in relation to Mr Peacock’s evidence) and Ms Prince was called to give evidence.

154. The lengthy narrative of what occurred in the proceedings at first instance indicates that because no statement of the appellant was contained in the appellant’s pre-filing statement, the respondent did not include in its pre-filing defence a reference to Ms Prince or a summary of the evidence which she ultimately gave. Thus, the respondent’s “omission” was a direct result of the appellant’s non-compliance with s 315 of the 1998 Act. As the appellant was permitted to give evidence which implicated Mr Peacock and Ms Prince, procedural fairness required that the respondent be permitted to call them to give evidence in response (as her Honour recognised in her reasons for granting leave to the appellant to rely on the statement).

155. Although the primary judge found that the matters raised in the appellant’s statement of 15 July 2023 had been the subject of particulars, the statement of claim alleged that the injury was suffered by 17 February 2015. In these circumstances, it could be said that the “material concerned” was not reasonably available to the respondent when its pre-filing defence dated 14 June 2019 was filed since it had no reason to obtain details of the evidence Ms Prince would give if the respondent had known that the appellant would rely on events subsequent to 17 February 2015 as constituting acts of negligence. Accordingly, the primary judge would appear to have been satisfied of s 318(2)(a) of the 1998 Act in accordance with the practical approach endorsed by this Court in in Gower v State of New South Wales [2018] NSWCA 132 at [132] (White JA) and Kubovic v HMS Management Pty Ltd [2015] NSWCA 315 at [105] (McColl JA, Ward JA and myself agreeing).

156. Further, the primary judge was plainly satisfied that failure to grant leave to the respondent to rely on Mr Peacock’s and Ms Prince’s evidence would “substantially prejudice” the respondent’s case (as required by s 318(2)(b) of the 1998 Act) since, without their evidence, the respondent could not controvert the plaintiff’s evidence about his demeanour and the complaints he said that he made to them.

157. It was not necessary for the primary judge to give a separate judgment for her ruling since it was apparent that her Honour accepted Mr Doak’s submission to this effect and her Honour had already said when granting leave in relation to the appellant’s statement that leave was granted because the respondent would be calling those witnesses (and implicitly there would be no prejudice arising in those circumstances). Accordingly, it is not necessary to address the circumstances in which reasons are required to be given for evidentiary rulings, since, in my view, her Honour’s reasons are sufficiently plain from the transcript, when read with her reasons for the grant of leave given ex tempore on 4 August 2023.

158. In these circumstances, no error has been established in the primary judge’s admission of Ms Prince’s evidence. Once the evidence was admitted, her Honour was entitled to accept it and make findings and draw inferences on the basis of it. Ground 12 has not been made out.

Ground 13: alleged error in failing to quantify damages

159. Ground 13 alleges:

“Having concluded that the medical evidence supported a conclusion that the Appellant suffered a psychiatric injury and was incapacitated for work, the Primary Judge was in error to failing to assess any damages, on a contingent basis.”

160. It is not necessary to address this ground as I am not satisfied that any of the other grounds have been made out. Accordingly, there is no basis to disturb the primary judge’s judgment for the respondent.

Proposed orders

161. For the reasons given above, I propose the following orders:

1. Dismiss the appeal.

2. Order the appellant to pay the respondent’s costs of the appeal.

162. BASTEN AJA: I agree that this appeal should be dismissed with costs. That conclusion, however, may be justified on the narrow ground that no breach of the conceded duty of care was established.

163. Mr Karzi’s claim for damages was based on the liability of his employer (the respondent) for bullying and harassment (and consequential workplace events) which occurred in its workplaces between approximately September 2014 and April 2015.

164. The claim depended on common law principles as modified by Pt 5 of the Workers Compensation Act 1987 (NSW). For present purposes, the modifications of the common law were limited to the requirement that Mr Karzi have suffered a degree of permanent impairment resulting from his injury assessed at 15% of whole person impairment: s 151H. Prior to the proceedings, he had obtained a medical assessment certificate establishing permanent impairment at 20% of whole person impairment. The duty of care was not limited in accordance with s 32 of the Civil Liability Act 2002 (NSW) to circumstances where the defendant ought to have foreseen that a person “of normal fortitude” might suffer a recognised psychiatric illness.

Assessing causation

165. Because there was no dispute as to the extent of his injury, nor that the injury was suffered otherwise than in the course of his employment, limited attention was given in the trial judgment to the nature of the injury, nor its development. As a result, aspects of the judge’s reasoning were confusing. For example, the judge found that Mr Karzi developed “a psychiatric injury of a transient nature following the activities of the TWU and its delegates”: at [158]. In that context the judge reasoned that Mr Karzi had “continued to work well and without complaint after February 2015 until the physical injury in November” and “had no treatment for his mental health between February and November”.

166. This finding did not sit easily with the accepted existence of a significant workplace injury involving a recognized psychiatric illness. Nor was it appropriate to ascribe the causal element to activities of the union delegates as if that necessarily broke the causal link between the bullying and the injury. Where bullying or harassment by one co-worker results in action being taken by the employer to protect the victim, thereby triggering further bullying or harassment by other co-workers, there is no break in the causal chain between the initial unlawful activity and the consequent injury. The bullying by Mr Johnpulle was clearly a material contribution to the consequent psychiatric injury.

167. Further, care must be taken in downplaying a psychiatric injury because a person does not seek immediate medical attention, or take time off work or otherwise make a complaint. Careful attention should be paid to the medical evidence before such inferences are drawn. Further, the fact that a worker’s complaint leads to disciplinary action against a co-worker, which in turn triggers action adverse to the victim by other co-workers and union delegates, may well discourage the victim from complaining again. Similarly, stoicism in continuing working does not necessarily belie a psychiatric injury.

168. Finally, the trial judge accepted that, in November 2014, the conduct complained of was “interpersonal”: at [151]. If that adjective was intended to distinguish it from workplace activities which fell within an employee’s duties, and thus diminish its relevance, it was misplaced. Bullying is inherently interpersonal, but no less damaging for that reason.

Indications of risk of harm

169. Secondly, on the appeal Mr Karzi challenged the acceptance by the trial judge of evidence that, in the course of his contact with supervisory staff, he did not demonstrate distress or serious discomfort, thereby not putting them on notice that he was at risk of a psychiatric injury. There was substance to this challenge. As the respondent accepted, there was a contemporaneous note by a senior officer, Mr Hewlett, that when he spoke with Mr Karzi on 7 January 2015 Mr Karzi “appeared very upset”. The trial judge dismissed that evidence on the basis that “there was no elucidation as to what he meant by ‘very upset’”: at [38]. However, whatever the phrase meant, it was not consistent with Mr Hewlett’s evidence that Mr Karzi was “calm” at the meeting and was not demonstrably upset: at [35].

170. There were other inconsistencies in the findings. In addressing steps taken by the company to relocate Mr Karzi to another site, both the respondent’s acting State Manager (Mr Peacock) and its Head of Human Resources for the Region (Ms Cvetkovic) stated that Mr Karzi did not complain about the move and that his attitude was “stoic”. Mr Peacock also stated that the situation was “serious and we were trying to help”. Implicit in the acceptance of that evidence are two further inferences, namely that senior management at Toll had knowledge of both a “serious” situation, which warranted the steps being taken to protect Mr Karzi, and, by describing his attitude as “stoic”, that he was suffering from the bullying. Observations in the judgment which tended to downplay the seriousness of the situation as known and understood by Toll were inconsistent with acceptance of the evidence its own senior officers and also with the objective circumstances as to the steps taken by the company in response. For example, the dismissal of the bully, who was a permanent employee, in order to protect the victim, a casual employee, was, predictably, likely to create a risk of industrial action which could disrupt the activities of the company, as in fact occurred. It should have been inferred that such steps would not have been taken unless the officers well-appreciated the risks to Mr Karzi’s health.

171. Three findings by the trial judge, that (i) Mr Karzi’s evidence that “he felt intimidated by the union” but did not “report it” (said to have “no probative value” at [161]), (ii) Mr Peacock had described Mr Karzi’s attitude as “stoic” and Ms Cvetkovic had described him as being calm, and (iii) his general practitioner, whom he saw two days later on 19 February 2015 “did not record any history of the plaintiff crying or feeling at the meeting two days earlier”, led the judge to a comfortable satisfaction that “the risk of psychiatric injury to Mr Karzi was not reasonably foreseeable” at that time: at [165]. Turning to the events of April 2015, the judge stated that the evidence “simply does not support a finding that the defendant ought to have been aware that the plaintiff was at risk of injury while working at Freight Solutions”: at [169].

172. Again, these findings are baffling: the transfers (and the disciplinary action against Mr Johnpulle) had only been taken, at some cost or potential cost to the respondent, to avoid a risk of harm of which the respondent’s relevant officers were self-evidently aware.

No breach of duty

173. The actions in fact taken by Toll were summarised by the judge in the following terms:

“187   It acted immediately upon receiving the complaint in January and clearly took it very seriously.

188   It sought (and achieved) resolution of the Union’s involvement.

189   It investigated the complaint promptly and fully and took immediate action on its findings.

190   It created a position for him at another site in an attempt to protect him from the Union’s activities. The actions of the defendant in removing the plaintiff to Mascot in the face of the union protest were accepted by both Ms Todd and Professor Tennant as an appropriate response.

191   It promoted him to full time work.

192   All of the above are completely at odds with plaintiff’s own argument that the defendant failed to implement and enforce its own policy.”

174. Ultimately, this was the dispositive reason, not the findings which denied the foreseeability of a risk of harm or the absence of a material causal connection between the bullying and harassment and the recognised psychiatric illness, which were insupportable.

175. In this situation, the outcome of the appeal turned upon the appellant’s attempts to demonstrate that the respondent either had or should have had knowledge requiring action at a date earlier than that accepted by the trial judge or that, even on the findings of the trial judge, the employer failed to act with reasonable expedition. These challenges failed for the reasons given by Adamson JA.

Vicarious liability

176. There was a separate issue raised on the appeal as to whether the employer should have been held vicariously liable for the conduct of its employees. As explained by Adamson JA, there were procedural reasons for dismissing this challenge given the manner in which it was raised, without being pleaded. However, the problems lie deeper than the failure to plead.

177. Ground 10 referred to vicarious liability “for the conduct of Mr Johnpulle, Mr Fath and other employees”. No mention was made of senior supervisory staff, including Mr Peacock and Mr Hewlett. It is unlikely that they were intended to fall within the category of “other employees”. In fact, the trial either ran upon an implicit assumption that the respondent was vicariously liable for their conduct or that, though not articulated in these terms, they were persons sufficiently senior in the hierarchy for their acts or omissions to be those of the company itself: see Nationwide News Pty Ltd v Naidu (supra at [118*]). Mr Johnpulle was the source of the bullying and harassment: to the extent that Mr Karzi suffered injury from his activities, the claim must have been one for a direct or intentional tort, not negligence, but only negligence was pleaded. A similar inference would be drawn with respect to other co-workers who engaged in harassment of Mr Karzi in response to his complaints about Mr Johnpulle.

178. To the extent that Mr Karzi’s immediate supervisor, Mr Fath, was said to have been negligent in failing to make an earlier report of Mr Johnpulle’s misconduct, the claim would have required further analysis of Mr Fath’s position in the industrial hierarchy at the company’s workplace. But it would also have depended upon a factual finding with respect to an earlier complaint, which the trial judge did not accept and in respect of which the challenge on the appeal has been unsuccessful. It need not be pursued further, although it may be observed that Mr Fath could not have been treated as a personification of the respondent, so that the respondent could only have been vicariously liable for his conduct.

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Decision last updated: 22 May 2024