Larner v George Weston Foods Ltd - [2014] VSCA 62

SUPREME COURT OF VICTORIA
COURT OF APPEAL

S APCI 2012 0101

DAVID LARNER	Appellant
	v
GEORGE WESTON FOODS LTD	Respondent

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JUDGES	REDLICH, TATE and SANTAMARIA JJA
WHERE HELD	MELBOURNE
DATE OF HEARING	24 October 2013
DATE OF JUDGMENT	9 April 2014
MEDIUM NEUTRAL CITATION	[2014] VSCA 62
JUDGMENT APPEALED FROM	Larner v George Weston Foods Ltd (Unreported, County Court of Victoria, Judge Coish, 10 May 2012)

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NEGLIGENCE – Psychiatric injury suffered by employee – Whether employer breached duty of care – Whether warning signs to employer that employee was at risk of psychological collapse – Employer entitled to assume employee capable of performing contract in absence of warning signs – Operation of contract not qualified by hindsight – Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44 applied.

CONTRACT – Contract of employment – Alleged breach of express and implied terms – Whether statements were promissory – Oscar Chess Ltd v Williams [1957] 1 WLR 370 and Upper HunterCounty District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 referred to – Whether psychiatric injury and disorder flowed naturally from any breach or should have been within the contemplation of the employer – Remoteness – Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145 and Baltic Shipping Company v Dillon (1993) 176 CLR 344 applied.

EVIDENCE – Whether trial judge erred in preferring the evidence of some witnesses to that of others – Whether finding by the judge about lack of reliability and gross exaggeration was inconsistent with facts incontrovertibly established, glaringly improbable, or was contrary to compelling inferences in the case – Fox v Percy (2003) 214 CLR 118 and TAC v Cuthbertson [2013] VSCA 29 referred to – Rule in Jones v Dunkel (1959) 101 CLR 298 – Whether trial judge erred in accepting explanation for failure to call witnesses and refusing to draw adverse inferences.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr A G Uren QC with Mr A D B Ingram	Slater & Gordon
For the Respondent	Mr J Noonan SC with Ms M Norton	Herbert Geer

REDLICH JA
TATE JA
SANTAMARIA JA:

TABLE OF CONTENTS

Introduction ....................................................................................................... 2

Employment as GWF Logistics Manager....................................................... 3

(1)        Short-term contract with GWF .................................................... 3

(2)        Approach to take on permanent role.............................................. 5

(3)        Contractual negotiations ............................................................... 7

(4)        Larner’s qualifications for the role ................................................ 11

(5)        Permanent position as Logistics Manager (Vic/SA)... 12

(6)        Psychological breakdown ……………………………………….. 16

(a)       Hours of work ………………………………………… 16

(b)      The absence of a 2IC ………………………….............. 18

(c)       The South Australian operations ……………………. 21

             (d)      The disarray of the Victorian business ……………… 21

             (e)       Complaints about psychological distress …………... 22

             (f)       Psychological collapse ………………………………... 24

             (g)      Meetings following psychological collapse ………… 25

The disposition by the trial judge..................................................................... 27

Grounds of Appeal………….......................................................... ................... 33

(1)        Rejection of Amendment to Statement of Claim…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] VSCA 62
Decision Date: 9 April 2014

CaseChat Overview and Summary

In Larner v George Weston Foods Ltd, the case was brought by the plaintiff against the defendant employer, George Weston Foods Ltd, in relation to psychiatric injury suffered by the plaintiff, an employee, following an incident at work. The dispute was heard in the Supreme Court of Victoria. The plaintiff alleged that the employer had breached its duty of care by failing to provide a safe working environment, which led to the plaintiff's psychological collapse. The employer argued that there were no warning signs indicating the plaintiff was at risk and that it was entitled to assume the employee was capable of performing their contract.

The legal issues the court needed to decide included whether the employer had breached its duty of care, whether there were warning signs that should have alerted the employer to the plaintiff's risk of psychological collapse, and whether the employer could be held liable for psychiatric injury that flowed from any breach of contract. The court had to consider the nature of the employer's duty, the foreseeability of the injury, and the operation of the contract. The court applied principles from cases such as Koehler v Cerebos (Australia) Ltd and Hadley v Baxendale to determine if the psychiatric injury and disorder were a natural consequence of the breach or should have been within the contemplation of the employer.

The court found that the employer had not breached its duty of care. It was determined that the employer was entitled to assume the employee was capable of performing their contract unless there were specific warning signs indicating otherwise. The court also held that the operation of the contract could not be qualified by hindsight. The trial judge's assessment of witness credibility and reliability was upheld, and no error was found in the acceptance of explanations for the failure to call witnesses. Consequently, the court dismissed the plaintiff's claim.

Orders