Koehler v Cerebos (Australia) Ltd

[2004] HCATrans 272

[2004] HCATrans 272

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P4 of 2004

B e t w e e n -

NUHA JAMIL KOEHLER

Applicant

and

CEREBOS (AUSTRALIA) LIMITED

Respondent

Application for special leave to appeal

GUMMOW J
KIRBY J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 AUGUST 2004, AT 9.39 AM

Copyright in the High Court of Australia

MS A.G. BRADDOCK, SC:   May it please your Honours, with my learned friend, MR N.J. MULLANY, I appear for the applicant.  (instructed by Marks & Sands)

MR D.R. CLYNE:   If it please the Court, I appear for the respondent.  (instructed by Dibbs Barker Gosling)

MS BRADDOCK:   Your Honours, this case involves a decision of the Court of Appeal in Western Australia which we say ‑ ‑ ‑

KIRBY J:   Is it the Court of Appeal yet?  It is the Full Court, is it not?

MS BRADDOCK:   It is a Full Court, yes, your Honour.

KIRBY J:   There has been muttering about a Court of Appeal over there but not yet come to fruit.

MS BRADDOCK:   Your Honour, that is correct, although we do refer to it as the Court of Appeal colloquially in any event.  What has occurred in the decision of the Full Court is that features which come from the dicta in the Hatton v Sutherland Case from her Honour Lady Justice Hale have been effectively elevated by his Honour Justice Hasluck to preconditions of liability in psychiatric cases.  We say that this has a tendency and will have a profound ‑ ‑ ‑

KIRBY J:   Could I just ask a more fundamental question.  My understanding of the law of damages – and I may be wrong – is that it is not for a plaintiff to show the exact foreseeability of the course of a condition.  It is enough that it is shown that it is foreseeable that an injury will result in some disability.  Whether that is linked is then proved by medical evidence.  Some conditions, eggshell skulls and so on, go on to all sorts of consequences, and you cannot expect that every aspect of a medical aetiology will be known and demonstrated to every person in society.  Is that a wrong principle?

MS BRADDOCK:   No, that is absolutely correct, your Honour, and that is a principle upon which the learned Commissioner at first instance acted, as can be seen in the application book at page 62, paragraph 168 of the reasons for his judgment.  He states:

It is on the facts found and the medical and industry opinion accepted by the court that it is necessary to consider the first question I have identified, whether a reasonable person in the defendant’s position would have foreseen that a failure on its part to take the steps which I have defined involved a risk of injury to the plaintiff, being injury of the nature of mental illness or other form of psychological injury of more than a transient form –

It does not have to identify what particular damage will ensue.  That is the basis upon which at first instance, the reasons disclose, the Commissioner acted.

In the Full Court, however, effectively their Honours came to a conclusion that if there was not specific complaint of the type of injury that is likely to ensue or evidence of pre‑existing condition or information that the plaintiff was susceptible or overt external signs of distress or specific symptoms or absences from work, then effectively what the Full Court judgment is saying in a psychological/psychiatric case is that you cannot have a finding that it was reasonably foreseeable.  That is effectively the strength, I would suggest, of that judgment and that certainly is how, with respect, it will be read by those concerned ‑ ‑ ‑

GUMMOW J:   Where is the critical passage in the Full Court judgment that you ‑ ‑ ‑

MS BRADDOCK:   Commencing on page 107 in the application book at the bottom of the page, paragraph 73 of his Honour Justice Hasluck’s reasons.  It starts there.

KIRBY J:   The difficulty of Justice Hasluck’s hypothesis is that most employers, most citizens, have no knowledge of the progression of the particular mental conditions or even perhaps physical conditions.  Therefore, to, as it were, interpose a requirement of knowledge of how a condition is going to unravel is really to impose too heavy a test of foreseeability, it seems at least arguably.

MS BRADDOCK:   In effect, yes, your Honour.  It is effectively requiring the employee plaintiff to diagnose themselves the likelihood of a condition.

KIRBY J:   The plaintiff may not have sufficient ‑ ‑ ‑

MS BRADDOCK:   May not have any idea.  There are other obstacles.  The plaintiff may not have any idea.  The plaintiff may be of a shy disposition or a non‑English speaking background, unlikely to speak up in those regards.  Moreover, as emerges in some of the cases – and Barber is one in point, your Honours – the particular professional standing of certain individuals makes them loath to complain that they are finding things a bit much or too much or too difficult.

GUMMOW J:   Paragraph 73 is dealing with an evidentiary matter.  Maybe his Honour is turning it into a substantive defect in the case.

MS BRADDOCK:   That is what we say, your Honour.  In the third sentence of the paragraph:

However, she did not make any specific complaint prior to ceasing work . . . that any form of physical or psychological injury was likely ‑ ‑ ‑

GUMMOW J:   Then he comes to 75, you see.  He says:

Against this background –

which is an elliptical expression really –

I consider that the crucial finding . . . is flawed.

MS BRADDOCK:   Then, your Honour, the following sentence.

GUMMOW J:   Yes.

MS BRADDOCK:   That is the essence of the matter.  His reasons, with respect, at that point are also flawed because he goes on to say:

To my mind, in the absence of external signs of distress or potential injury a reasonable person in the position of the appellant could not have foreseen that the respondent was exposed to a risk of injury as a consequence of her duties as a merchandiser.

The whole point in this particular case was that she was not simply doing the duties of a merchandiser.  She was doing those duties plus effectively her pre‑existing job, which was that of a salesperson in a restricted period of time.  It is rather like, your Honours, if my learned junior were to be asked to conduct five‑day trials in three days a week for a period of four or five months.  Whether he would complain or not we do not know, but whether he would be able to think straight at the end of it is another matter.

GUMMOW J:   He would probably enjoy it.

MS BRADDOCK:   It is the compression and the change in the nature of the employment that seems perhaps to have slipped through in this judgment.  The judgment also refers at paragraph 76 to:

the employer is entitled to assume that there will be a normal reaction to the conduct in question.

That of course begs the question of what that conduct is.  If it were simply the normal duties of a normal occupation, one would probably not be here to take issue with that proposition, but the whole essence of this particular situation was that there was nothing normal about what the employee was being required to do.

GUMMOW J:   If we took this on, even if we decided it ultimately in your favour, there would be outstanding other issues, would there not?

MS BRADDOCK:   Unfortunately, yes, your Honours, that is the case.  The judgment in the court below dealt only with the first three grounds of appeal completely and expressed a tentative view on ground 4.  They did not go through, as it were, to the end of the task.

GUMMOW J:   What is the juridical nature of what is said at paragraph 82?  Is that a ruling on it?  It could be embarrassing if it has to go back eventually.

MS BRADDOCK:   It is, your Honour, and it is something of a mystery what the nature of those comments might be.

KIRBY J:   Was the case conducted in the Full Court on the basis that this was a knockout point and therefore that that is all that the court needed to deal with, or did the judges sever this matter and deal with it?

MS BRADDOCK:   It was not severed and all matters were argued to some extent.

KIRBY J:   All issues were argued, were they?

MS BRADDOCK:   Right through to the damages and issues to some extent, your Honour, yes.

KIRBY J:   As Justice Gummow says, it is now a little awkward because a view has been expressed.

GUMMOW J:   …..your problem.

KIRBY J:   This depends on your getting up.

MS BRADDOCK:   Indeed, yes, your Honour.  The issue upon which we appear here is the important issue to the development of the law in this area.

GUMMOW J:   I think we will call on your opponent at this stage.

MS BRADDOCK:   May it please the Court.

GUMMOW J:   Yes, Mr Clyne.

MR CLYNE:   Thank you, your Honours.  In my submission, this is not a case that requires or deserves special leave because his Honour Justice Hasluck has correctly applied the law.  Can I take the Court to paragraphs 70 and 71 of his judgment which appear at page 107.  In paragraph 70 he deals with what the ground of appeal was and the fundamental issue of law, which is:

whether a reasonable person in the position of the appellant could have foreseen that the Respondent was exposed to a risk of injury in the nature of a psychiatric illness arising from her workplace stress.

His Honour then applies the correct test in the following paragraph.  Can I say that is a test taken directly from the judgment of your Honours Justice Gummow and Justice Kirby in Tame v New South Wales at paragraphs 199 to 201.  It is simply a proper issue of foreseeability.  As he there says in the second sentence:

The question is not whether a reasonable person in the position of the appellant could have foreseen that a person of normal fortitude was exposed to a risk of injury of the kind complained of.  The issue was ‑ ‑ ‑

GUMMOW J:   What is the significance of paragraph 73 leading to 75?

MR CLYNE:   That is where he has turned to look at those evidentiary facts, as your Honour has noted, in terms of the issue of reasonable foreseeability.  His Honour has posed the correct test.  He is simply looking at the guidelines, as the Chief Justice said in Tame, of the matters that go to whether or not there are evidentiary matters that the court looks at in terms of foreseeability.  The correct legal test ‑ ‑ ‑

KIRBY J:   The problem of the postulate that Justice Hasluck has put up is that the worker and the ordinary individual may have no idea how this condition is going to develop, but damage has occurred and the working out of the consequences is in the hands of the future knowledge of experts.  Then to cut it off, it is a bit like the eggshell skull.  It is not absolutely foreseeable that a particular person is going to have a vulnerability, but if you damage that person, then you cannot say, “I’m not responsible because they were particularly vulnerable”.  Is it not analogous?

MR CLYNE:   With respect, no.

KIRBY J:   Why?

MR CLYNE:   That is simply going to cause and effect without looking at the foreseeability issue from the perspective of a defendant of the employer.

KIRBY J:   Yes, but as I understood the arguments about the eggshell skull, it is, “Why should I be liable when there’s no way I could have foreseen that this was a person who was particularly vulnerable because he or she had a very thin cranium”.

MR CLYNE:   With respect, that does not go to the issue of breach.  The breach of duty is what has been looked at and been missed in this case.  That is what the Commissioner did.  He simply said this person was injured, they were working too hard.  He omitted to look at the issue of foreseeability.  That is exactly what Justice Hasluck is saying needs to be done in this case.  You must look at this from the perspective of an employer with all of the information that they then had.  That is the proper test.  That is the approach your Honours have set forth in Tame.

KIRBY J:   Read the passage in Tame if you would.  Do you have that?

MR CLYNE:   In Tame at 384, paragraph 200:

Analysis by the courts may assist in assessing the reasonable foreseeability of the relevant risk.  The criterion is one of reasonable foreseeability.  Liability is imposed for consequences which the defendant, judged by the standard of the reasonable person, ought to have foreseen . . . However, because the criterion is an objective one, what is postulated is a general (and contemporary) standard of susceptibility.  It is in that context that references in judgments of this Court to hypothetical “ordinary” of “reasonable” standards of susceptibility to psychiatric harm are to be understood.

Your Honours then went on to do away with the concept of normal fortitude and to replace it with the standard applicable in all cases of foreseeability.  That is the law.  Justice Hasluck has applied that rationale to the effect that he has mentioned these other matters.  They are simply raised in the context of looking at factors when assessing reasonable foreseeability.  So there is no novel point in this case.  He has applied the law that your Honours have already set forth.

Can I also say the other reason why leave ought not be granted is the one that your Honours have touched on already.  There are a number of other grounds going to liability, not just ground 4, but grounds 5 and 6, that were raised in the court below.

KIRBY J:   Yes, we know that but that is not the applicant’s fault.  In the criminal field this Court has said repeatedly courts of appeal have to deal with all the issues just in case this problem arises.  I do not know whether it has ever been said in the civil field, but perhaps it ought to be said because otherwise we get into this situation that it has to go back.  It is not the applicant’s fault.

MR CLYNE:   The problem is that grounds 5 and 6 deal with challenges to the evidentiary findings of the Commissioner, so they are crucial if this matter is to go back.

GUMMOW J:   Yes, I know.

MR CLYNE:   In any event, your Honours, my simple point is that the Full Court has properly addressed a law that your Honours have already described in detail.  There is no novel point in this case and it is not deserving of special leave.

KIRBY J:   In a way, that passage from the reasons of Justice Gummow and myself rather helps plaintiffs with psychological injury because it is sort of trying to give the hiatus to the old “pull your socks up” principle, which was the way that our law approached these disabilities for more than a century.

MR CLYNE:   It certainly made it easier for plaintiffs by getting rid of the “normal fortitude” test, but the law is clear.  There is nothing that is raised in this case ‑ ‑ ‑

KIRBY J:   The law is clear but it is then to be applied by the decision‑maker and the decision‑maker thought – did the Commissioner use a wrong test in expounding whether he thought it was foreseeable?

MR CLYNE:   The basis upon which we attack the Commissioner’s judgment was that he had failed to look at the issue of breach insofar as reasonable foreseeability was concerned.

KIRBY J:   I suppose you say that the foreseeability comes in as an aspect of the reasonableness, that you cannot burden people with things that they cannot foresee, and therefore, if negligence is by the reasonableness standard, that it still is relevant that there must be some aspect of foreseeability.  Was there not expert evidence that said if you put a person in a job and you concertina their life and press them to do a lot of work in fewer days, that that is going to put them under stress?

MR CLYNE:   In my view, there was no evidence that went to that effect.  The effect was from some psychiatrists that that was the cause of the stress but not that it was foreseeable.  That was what was critically missing.

KIRBY J:   Why is it not foreseeable?  If you put an ordinary working person under extra stress and tell them essentially, “You’ve got to get your work done in three days, not five days”?

MR CLYNE:   The critical factor here was that there was absolutely no sign of it at all.  This woman was wanting more work, not less.  She was happy, vibrant, personable until she left work.  We are only talking about somebody working three days a week, four days off, eight‑hour shifts, not 13 days underground, for example, as many workers in this country do.  This lady had a very easy job, with the greatest of respect, travelling around shops.

GUMMOW J:   Mr Clyne, it seems to me at the moment that a question is really, if this is a visitation case, as it may be, where did the Commissioner at first instance go off the rails at pages 62 and 63 of the application book?  He seems to have applied the principles correctly and Justice Hasluck does not seem to have attacked the evidentiary underpinning of what has been said at paragraphs 168 and following.

MR CLYNE:   It is the point.  It does not come out directly because the Commissioner does not touch on it.  But a reading of the judgment as a whole, your Honours will find that he did not look at the question of reasonable foreseeability.  He simply applied the general test from Wyong v Shirt, said “This lady’s been injured” and did not find any factors that dealt with the issue of foreseeability or why it would be foreseeable in a case such as this, and that is where he went ‑ ‑ ‑

KIRBY J:   In fairness to Justice Hasluck, he did refer to Fox v Percy and some of the other cases but the key that opens the door to appellate review is still error.  You still have to show a mistake on the part of the primary judge.  You cannot just say, “We’re going to go through all this again and we’re going to decide this on the facts for ourselves because there’s no credibility or other impediment to our doing so”.  You still have to show error.

MR CLYNE:   It was simply that he had not touched on any evidence, we say, any factual basis for coming to a conclusion that this injury was a foreseeable one.  He looked at the end result, he looked at the fact that there was a duty of care, and did not then fill in the middle dealing with the facts relating to breach of that duty, and that is where he fell into error.  That is why Justice Hasluck has dealt with it in the manner that he has.

KIRBY J:   I may have the wrong principle in my brain, but back to my earliest days as a young barrister I thought you do not have to prove how the condition is going to work out; you only have to prove that damage is done and is foreseeable.  Then the working out of it is a matter of expert evidence and what happens.  It is unreasonable to expect a plaintiff to prove how it is going to progress.  Is that a wrong principle?

MR CLYNE:   What has to be foreseeable is that the circumstances in this case were such as to make it likely that the plaintiff could have suffered some form of psychiatric illness.  There was no evidence, we say, that went to that issue.

KIRBY J:   That is very much a matter for the assessment of the primary decision‑maker.

MR CLYNE:   Yes, if he assesses that properly.  Equally in this case, because there were no credibility findings challenged, it was also a matter that the Full Court ‑ ‑ ‑

KIRBY J:   But you still have to show error.  Where does Justice Hasluck say that the Commissioner made a mistake in his approach to ‑ ‑ ‑

MR CLYNE:   He does not say anything other than ‑ ‑ ‑

KIRBY J:   Did it come down to his Honour’s view of the totality of the evidence being different from that of the Commissioner without expressing an error in the approach or estimation of the Commissioner?

MR CLYNE:   It is in paragraph 75 that your Honours have already looked at on page 108, where he says:

Against this background, I consider that the crucial finding made by the learned Commissioner is flawed.  To my mind, in the absence of external signs of distress or potential injury a reasonable person in the position of the appellant could not have foreseen that the respondent was exposed to a risk of injury as a consequence of her duties as a merchandiser.  The presence of complaints about the workload may have suggested to a reasonable employer that remedial action was required in order to avert an industrial dispute but on the evidence in this case the nature of the complaints was not enough to alert a reasonable employer to the possibility of injury.

GUMMOW J:   Mr Clyne, can we just go back to the Commissioner.  At 168 he poses a question.  I think you said he jumped to answer.  Does he not answer it, as Justice Heydon reminds me, at paragraph 171 at line 30 on page 63:  “On the evidence, I am of the opinion”?

MR CLYNE:   He does pose that general proposition but he does not say why.  There is no evidence.  This lady showed no signs of any distress.  What then does a reasonable employer do?  Many people work long hours in hard and difficult jobs.  You do not expect them to then simply leave work and have psychiatric illness.  We all know people.  Many of us work hard.

KIRBY J:   But this was a case of restructuring of the employment, was it not, and concentration of the work, so it is alleged, that had formerly been done in a full week into three days?

MR CLYNE:   But it is equally a lady who during the time ‑ ‑ ‑

KIRBY J:   They lost a big contract and then they had to restructure.

MR CLYNE:   The defendant had lost a big contract.  She was last on, first off, but with the probability that in a couple of months she would go back on to full time.  The nature of her complaints were that she wanted more hours, not less hours, that she wanted to go back on to full time.  It was the type of work that she loved and enjoyed.  So those were the sorts of requests she was making, yes.  She didn’t want to do some of the stores that she was visiting; she was told to prioritise, that is, “Don’t go to them all the time”.  But she still wanted more work, not less.  She was only working eight‑hour days three days a week.  As I say, those people working underground 13 days straight, 12‑hour shifts, would be appalled to think that this could be the type of case ‑ ‑ ‑

KIRBY J:   You are beginning to stray into the “pull your socks up” theory about mental – not everybody is the same, not everybody is as tough.  That is why the Court said in Tame that the old approach was inappropriate today.

MR CLYNE:   I accept that, your Honour, but it does become a factor when one is assessing reasonable foreseeability.  That foreseeability must reside in the employer.  She was only working three days a week eight hours a day.  Do you then expect that she is going to suffer a psychiatric illness?  That is why it is one of the factors that is relevant for that issue.  You must stand in the shoes of the employer when you are looking at the issue of reasonable foreseeability.  Those are my submissions.

KIRBY J:   Was there any complaint at all by your client to the employer?  The suggestion is that far from there being a complaint, she was saying, “Give me more”.

MS BRADDOCK:   Your Honours, there was a litany of complaints in fact from the day she commenced work in the new capacity on 29 April 1996.  She complained that it was too much to be done in the time available.  She wrote long memoranda suggesting how things might be reorganised.  She requested assistance or she requested longer time, longer hours, longer paid hours, in which to do the work.  So my learned friend is correct in a sense when he says ‑ ‑ ‑

GUMMOW J:   Paragraph 162 of the Commissioner’s reasons shows he was on to it.

MS BRADDOCK:   Yes, your Honour, and 155.  There were a great series of complaints.  Effectively she was not of the shy and retiring disposition but her requests were not for more work in the sense my learned friend characterises it but for more hours in which to do the work required.  She took her responsibilities seriously, she was a diligent employee, and for that she is to be damned in a sense.  That aspect of the matter led to the learned Commissioner’s comment about the attitude and behaviour of the employer being callous.

GUMMOW J:   We do not need to hear you any further.  There will be a grant of leave in this matter.  It looks like an appropriate candidate for the Perth sittings, which are the week starting 25 October, I think.  It will be a one-day case, I would think.

KIRBY J:   If counsel could get some assistance, including from overseas texts and so on, on the point that I have been recurring in, because it is a very practical problem in running a damages case as to how far you have to prove what is going to happen in a medical condition and especially a psychiatric condition.  Justice Linden in Canada I think has written on this and it would be good if the Court were assisted with that type of material, I think.

AT 10.06 AM THE MATTER WAS CONCLUDED