Mannall v State of New South Wales

[2001] NSWCA 327

CITATION:	Mannall v State of New South Wales [2001] NSWCA 327
FILE NUMBER(S):	CA 40011/00
HEARING DATE(S):	7 September 2001
JUDGMENT DATE:	20 September 2001
PARTIES :	Marilyn Esther Mannall State of New South Wales
JUDGMENT OF:	Heydon JA at 1; Ipp AJA at 2; Sperling J at 3

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	19/98
LOWER COURT JUDICIAL OFFICER :	Puckeridge DCJ

COUNSEL:	Mr B Toomey QC with Mr J Sainty for the Appellant Mr P Deakin QC with Mr M J Wynyard for the Respondent
SOLICITORS:	Walsh & Blair for the Appellant Gillis Delaney Brown for the Respondent
CATCHWORDS:	Negligence - psychological injury allegedly caused by stress at work - no unsettled question of principle - ND
LEGISLATION CITED:	Supreme Court Act 1970, s75A Supreme Court Rules 1970, Pt51 r23
CASES CITED:	Gillespie v The Commonwealth (1991) 105 FLR 196 Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 State of New South Wales v Seedsman [2000] NSWCA 119 Wyong Shire Council v Shirt (1980) 146 CLR 40
DECISION:	(1) Appeal allowed; (2) Respondent to pay the appellant's costs of the appeal; (3) Order a new trial.

- 18 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

Heydon JA
Ipp AJA
Sperling J

Thursday, 20 September 2001

40011/00 Mannall v State Of New South Wales

Judgment

: I agree with Sperling J.

: I agree with Sperling J.

: The plaintiff, Ms Mannall, sued her employer, the State of New South Wales, in the District Court, claiming damages for personal injury. The trial judge found a verdict for the defendant. The plaintiff has appealed.

Common Ground

4 The following facts were not and are not now in dispute.

5 The plaintiff was born on 30 July 1946. She is a married woman with children.

6 The plaintiff was first employed by the NSW Government in 1981. That was in the Department of Agriculture at Yanco. In 1983, she transferred to the Housing Commission of NSW at Leeton as a clerical officer class 1/2. The Commission was later absorbed into the Department of Housing.

7 In December 1986, the plaintiff was promoted to the position of district officer 3/4.

8 In April-May 1994, there was a departmental restructuring. On 2 May 1994, the plaintiff was appointed clerk grade 7/8 at the department’s Wagga Wagga office. This was a substantial promotion. The plaintiff had some 15 employees under her. She reported to the area manager Mr Ranjit (Mike) Singh, also stationed at Wagga Wagga. He reported to Mr David Reith, regional director Western Regions, who was stationed at the department’s regional head office at Orange.

9 Up to that time the position to which the plaintiff was appointed was occupied by Mr David Royle, although the position was then differently styled. The plaintiff obtained the position in competition with Mr Royle, who had understandably expected to be re-appointed to his previous post. He was aggrieved. An appeal by him was unsuccessful in August 1994. The situation was exacerbated by the plaintiff being placed in the room previously occupied by Mr Royle and by Mr Royle being retained in the Wagga Wagga office, in at a grade inferior to that of the plaintiff as second in charge of another team.

10 On 15 December 1995, the plaintiff ceased work. Her general practitioner certified that she was suffering from work related stress. She attended work for only spasmodically after that. Ultimately, a diagnosis was made of anxiety depressive disorder, a psychiatric illness, attributable to the stress of events at work. The plaintiff ceased work altogether on 19 February 1996.

The Claim

11 The plaintiff’s case may be sufficiently summarised for the present purpose as follows.

12 The plaintiff alleged that, during the period May 1994 to December 1995, she was the subject of “victimisation, harassment, humiliation and abuse” and that the defendant, in breach of its duty at common law and in breach of contractual obligation, failed to prevent that conduct, with the result that she contracted the psychological illness of anxiety depressive disorder and suffered consequential loss.

The Evidence

13 The plaintiff’s evidence as to the course of events between May 1994 and December 1995 included the following elements.

14 She was treated as an outsider and in a denigratory way by Mr Singh from the start. Soon after her appointment, she was to go to Orange for a meeting. She was not offered transport as others were. Mr Singh told her she would have to make her own way there. During that conversation Mr Singh said she must have been well tutored for the interview for the position – he had been on the committee – because she could not otherwise have answered the questions she was asked.

15 Ultimately, she arranged to travel to Orange in a departmental car, on that occasion, with Mr Singh and others. In the car, Mr Singh continued to quiz her about being tutored for the interview and being given the answers to questions she was asked. Mr Singh and another departmental employee in the car kept nudging each other and whispering in conjunction with that.

16 When they arrived at Orange, Mr Singh introduced the others to the Minister, who was there, but not her. She was ignored.

17 Mr Royle took documents which she regarded as departmental property and which she needed for her own work. She complained to Mr Singh. He took no action and was unsupportive.

18 The first meeting of team leaders with Mr Singh after her appointment was delayed to await the arrival of a person from another team. Mr Singh advised the plaintiff to go to her office for the time being and he would let her know. She did. When she went back to the meeting to see what was happening, she found that it had been in progress for 20 minutes without Mr Singh notifying her.

19 At the meeting, Mr Singh repeatedly asked her if she understood what he was saying. He did not ask others that. This was demeaning and, by implication, intentionally so.

20 Mr A Lowe, another team leader, who had control of the room at the Leeton office which she had previously occupied, denied her access to the office to collect her personal effects. He was a friend of Mr Royle. She complained to Mr Singh who declined to do anything about it.

21 In June 1994, she told Mr Singh she was sick and tired of being accused of things she had not done, of not getting support, particularly from Mr Royle’s team (which apparently had a support role in relation to other teams). Mr Singh did nothing in response to that.

22 In September 1994, she again raised with Mr Singh her need for better support from others on the staff, including Mr Royle’s team. The plaintiff asked Mr Singh to change her support officer in Mr Royle’s team. The incumbent had told the plaintiff she could not support the plaintiff, at Mr Royle’s direction. Mr Singh did nothing about that.

23 In December 1994, Mr Singh appointed a Ms H Mercer to her team without reference to her. That was not usual. She said she did not want her on her team. Mr Singh said it was too late. Ms Mercer’s performance was not satisfactory. She informed Mr Singh. He did nothing about the situation.

24 In February 1995, one of her team was assigned elsewhere without reference to her. That was not normal practice. She complained to Mr Singh who said, “I don’t want any big fucking issue out of it”. Ultimately, Mr Singh agreed to another officer going, as suggested by the plaintiff.

25 There was a meeting of team leaders with Mr Singh on 29 May 1995. In response to a request by the plaintiff for funds to cover a particular matter, Mr Singh replied “Haven’t you been listening? I told you there’s just $3000 left in the budget and you only had $700 and yours is spent”.

26 At that meeting, she had also asked if she could have grade 2/4 officers from her own team relieve as team leader when she was on leave rather than having to bring in a grade 5/6 officer. Mr Singh refused, saying she had to “stop playing favourites”. He went on in the same vein. He spoke in a rude and abrupt tone.

27 Following that meeting, the plaintiff wrote to Mr Singh, on 31 May 1995, as follows:

As you may be aware, I left the office in the afternoon on 29 May 1995 in a highly emotional state.
The reason for my departure was directly attributed to the demeaning, belittling and impersonal manner in which you spoke to me at the Team Leader’s Meeting yesterday.
I am particularly concerned at the attitude displayed by you in front of my peers. You will undoubtedly recall that there have been many other instances in the past where similar occurrences have taken place. Quite frankly I am no longer prepared to put up with the harassment and insensitive manner in which I have been treated since taking up the position of Team Leader.
The purpose of this minute is to advise you that I have sought assistance through the Public Service Association to out an end to ongoing harassment and humility [ sic , for “humiliation”] which I have been subject to by you and a number of other members of staff.
Please be assured that I have no wish to work in a hostile environment. For that reason I sincerely hope that you and I can resolve the issue at hand without it leaving the Region. I have forwarded a copy to the Regional Director.

28 Mr Reith wrote to Mr Singh on 1 June 1995 as follows:

The attached letter from the Team Leader, Wagga Wagga was received by me yesterday.
I have been aware for some time of the insidious destabilisation of the Wagga Wagga team by the former Operations Manager and/or his supporters since Mrs Mannall was appointed Team Leader. I believed that the issue was largely resolved during Mr Miller’s period of relief in Wagga Wagga some months ago.
You will also recall we discussed my perception of extreme disharmony in the Wagga Wagga office last week. I am receiving reports of staff in the Area Office being totally disaffected by having insufficient work to keep tem occupied at the same time as I receive comments regarding the lack of Area Office support to the Client Service team
I view with extreme concern the allegation that you are a participant in the hostility which I know Mrs Mannall had endured fairly stoically for a protracted period. You were a member of the Selection Committee who appointed her, and as Area Manager you have a responsibility for her training, development, support and performance. The focus on client service and the empowerment of client service teams should ensure leadership is one of your prime priorities.
I perceive at the present time some serious structural and cultural problems. Your assertion that allegations of staff disharmony were “groundless and obtuse” does not accord with my observations over a lengthy period of time.
I insist that you give what I see to be a serious allegation and a serious situation a more considered review. Your formal response to both the allegations and my observations is requested as a matter of urgency, along with any proposed solution should you ultimately accept that problems exist.

29 No restriction was placed on the use of these documents when admitted into evidence. They stand as evidence – not conclusive evidence, of course – not only of the fact of the communications, but also as evidence of the facts stated in them. The plaintiff’s letter was, accordingly, evidence that the plaintiff was put into a highly emotional state by what had occurred at the meeting, that Mr Singh had spoken to her in a demeaning, belittling and impersonal manner in front of others “yesterday” (which could be reference to a conversation on 31 May or, more likely, a reference to the meeting on 29 May), that there had been many other similar occurrences, that there was harassment and “humility” (sic, for “humiliation”) by Mr Singh and others, and that the environment was hostile.

30 Mr Reith’s letter was evidence that the plaintiff’s assertions were brought to Mr Singh’s attention and that he was directed to do as Mr Reith’s letter stated. It was also evidence that there had been destabilising conduct by Mr Royle and his supporters directed against the plaintiff’s team, that Mr Singh has previously been told of Mr Reith’s view about that, and that Mr Singh had previously participated in hostile conduct towards the plaintiff.

31 Mr Singh replied on 1 June 1995, denying the allegations. His oral evidence was in similar vein. Mr Reith later withdrew his assertions against Mr Singh in those respects or some of them, but the correspondence stood, nonetheless, as evidence of the matters I have mentioned.

32 At that time, Mr Reith told the plaintiff to have a meeting with Mr Singh and sort it out. That occurred a few days later. Mr Singh apologised. The plaintiff accepted the apology and they shook hands. However, the belittling of herself at meetings and conferences continued.

33 In 10 September 1995, while at a conference in Orange, the plaintiff was asked to attend a meeting with Mr Reith and Mr Singh, to do with a letter written by another department officer and a complaint that had apparently been made against him to do with, it seems, obscene phone calls. The plaintiff was apparently challenged with having been involved in the complaint. In any event, she became upset at Mr Reith’s stern attitude over the matter and turned her head away in an attempt to conceal her emotions. Mr Reith said, “Don’t pull that female stunt on me”. She became distraught as a result. She was so upset that she was unable to go to dinner and said so.

34 At the same conference, she was shunned by others from the Wagga Wagga office. She was not invited to lunch and was excluded from morning and afternoon teas except by the personnel from Orange.

35 On 12 September 1995, at the same conference, the plaintiff was querying another officer as to why her team had been overlooked for a fencing allocation. The position was rectified but the plaintiff insisted on knowing how the situation had come about. Mr Singh said, “There you are, you’ve got your $30,000. Aren’t you happy?”. She persisted. Mr Singh said, “Don’t you fucking understand?” She became distressed. Mr Royle and another officer turned their backs on her. She left for the ladies’ room. Mr Singh called after her, “Don’t fucking walk away from me when I’m talking to you.” She felt humiliated.

36 On 13 September 1995, the next day, Mr Reith telephoned the plaintiff. He said he was worried about her and about her health. The implication was that Mr Reith was worried about the plaintiff’s mental health. The plaintiff told him she did not know how much more she could take.

37 On 8 December 1995, Mr Singh called a meeting of her team. He said if they could not work together they could all just resign. He threw down a bundle of resignation forms and left. This produced disharmony in the team on the part of some who believed they had been falsely accused of doing something wrong. Mr Singh had placed the plaintiff in the invidious position of having to support his unfortunate conduct.

38 On 13 December 1995, she was away from the office. When she returned on 14 December, she found that a meeting of members of her team had been held in her absence. Mr Singh handed her a memorandum signed by most of those in attendance. The document was very critical of the plaintiff. It would be fair to describe it as mutinous. Instead of treating it as such, Mr Singh said he would call a meeting to discuss the team’s concerns. He told the plaintiff not to discuss the document with the staff in the meantime, in particular not with Mr McKee who was the author of the document. The plaintiff said that when she got home she was very distressed, hysterical and distraught. She arranged for another officer to be on call instead of herself, because she felt she was not in a fit state to function if she had to.

39 Later in her evidence, the plaintiff said it was Mr McKee who gave her the document, but that the conversation with Mr Singh about the document had occurred, as she said, that morning.

40 It was on the next day, 15 December, that the plaintiff saw Dr Roche, and was certified unfit for work until 8 January 1996. As recorded earlier, she attended work spasmodically after that and ceased work altogether on 19 February 1996.

41 Before the final episode in December 1995, the plaintiff said, she felt stressed and had other symptoms. Her left eye was twitching, she had pins and needles on the left side of her face, she had difficulty thinking and pronouncing words, and she was subject to shortness of breath.

42 A statement by Mr R P Hallinan, dated 13 May 1996, was admitted into evidence without objection or qualification. It stands as evidence of its contents including hearsay content. Mr Hallinan was manager Corporate Services at the regional office in Orange. He said he became aware of the plaintiff’s concerns “probably 12 months ago”. That would have been about May 1995. She complained of Mr Royle undermining her to staff. Following Mr Reith’s letter to Mr Singh at that time, the plaintiff had made many calls to Mr Hallinan’s office seeking advice because she felt she could not go to Mr Singh. In November 1995, Mr Hallinan visited the Wagga Wagga office and formed the view that “the problems were becoming very serious”. Mr Hallinan said he spoke to Mr Reith about the situation. Mr Reith had said they should give Mr Singh every opportunity of resolving the matter and that Mr Hallinan should telephone him, which Mr Hallinan did. What was said in that conversation is not recorded by Mr Hallinan in his statement.

43 Mr Hallinan’s statement covers a number of the incidents referred to by the plaintiff in her evidence. He concluded the statement by saying

I have no doubt that we as an organisation have contributed to Marilyn’s state of mind. I just think the whole situation down there has been poorly managed and the situation has been let run to the point where she is probably over the edge at the present moment. I say that because the problem probably started about two years ago and it has never been resolved.

44 The plaintiff was challenged in cross-examination concerning much of the history she recounted. Mr Singh and Mr Royle gave evidence. They denied much of what the plaintiff alleged. However, it was open to the trial judge to accept the plaintiff’s account of events. As will appear, he made some findings in that regard, the implications of which remain to be considered.

The Breen report

45 Mr A Breen is a consultant and apparently an expert in human resources management. He was retained by the department to advise on the situation at the Wagga Wagga branch. He carried out an investigation between 22 and 24 January 1996. His report of 1 February 1996 was admitted into evidence without qualification.

46 Mr Breen said of Mr Singh:

Mr Singh has an open and easy-going management style and it is in his nature to ensure that he is seen by all staff as their friend. This approach is unsound under ideal conditions and fails abysmally during times of conflict. There is reason to believe that during the period of change immediately following implementation of the restructure (especially during and subsequent to Mr Royle’s unsuccessful appeals against the appointment of Ms Mannall), Mr Singh failed to recognise the symptoms of discord between these officers. Additionally, in not gauging the strength of feeling held for Mr Royle by other Area Office staff, Mr Singh also appears to have been oblivious to what were initially petty incidents and issues which both irritated and frustrated Ms Mannall in achieving in her goals [ sic ] as Team Leader. As a consequence, however unwittingly, Mr Singh’s actions (or inactivity) were perceived by Ms Mannall as unsupportive of her and those issues which he could have readily resolved at the time have now assumed far more serious proportions.

47 Mr Breen’s recommendations included the following:

THAT Ms Mannall be retained in the position of Team Leader, Wagga Wagga Client Service Team for the immediate short- to medium-term future.
THAT arrangements be made as soon as practicable for Ms Mannall to attend an intensive leadership / people management skills training program – preferably together with all Client Service Team Leaders within the Region.
THAT all members of the Wagga Wagga Client Service Team be counselled in the strongest terms with regard to workplace ethics, code of conduct, demeanour and behaviour towards clients, contractors, management and each other.
THAT the Regional Director counsel Mr Singh with regard to his role in the evolution of the current crisis with the objective of identifying strategies to re-establish Ms Mannall’s confidence and status as Team Leader.
THAT the Regional Director and Mr Singh utilise the Department’s Performance Management Program to identify any shortcomings in Mr Singh’s management style with a view to developing an agreed plan of action for improvement.
THAT the Area Manager, Mr Singh be counselled in the strongest terms with regard to his management responsibilities for implementation of the Department’s Code of Conduct and enforcement of the highest standards of behaviour.

48 By January 1996, as events turned out, the plaintiff was already too ill to continue work and has remained incapacitated.

49 It is the plaintiff’s case that the defendant was in breach of its duty in failing to take such action as was recommended by Mr Breen much earlier and that, being recommended by an expert in personnel management, such action would have been likely to be effective in rectifying the work situation as the plaintiff contends it to have been and, accordingly, in avoiding the consequential stress and ultimately the psychological injury which she suffered.

The judgment

50 In a reserved judgment delivered on 17 December 1999, the trial judge summarised some of the plaintiff’s evidence concerning the course of events. Speaking of the situation as at September 1995, his Honour said (at Judgment 6):

I accept the evidence of Mr Singh that he made efforts to heal the rift between himself and the plaintiff. I consider that he became exasperated and frustrated at his failure to heal the rift. The plaintiff’s feeling of hostility towards herself, however, continued to grow.

51 His Honour went on to review that evidence in relation to events in December 1995 and later documentation including the Breen report. His Honour then said (at Judgment 11-12):

The plaintiff submits that the department, through the inactivity of Mr Singh, permitted the situation to deteriorate to a point where the plaintiff could no longer carry on and was psychologically traumatised and injured. But management style is not an issue which can be determined by this Court. The issue, according to the pleadings, is whether or not the defendant was in breach of a duty of care which it owed in the circumstances, to ensure that reasonable steps were taken to prevent the victimisation, harassment and humiliation and abuse of the plaintiff.
There is, however, no evidence before the Court as to the appropriate standards that ought to be adopted in a regional office situation such as Wagga Wagga office, to prevent victimisation, harassment, humiliation and abuse. I can conceive a situation where inadequate staff and support are provided when and where needed, and foreseeable injury results from a failure to provide same. But that is not the circumstance in the instant case.
. . . . .
Whilst courtesy is always desirable in the workplace, I do not know that a court of law in determining issues between individuals can demand that of the individuals concerned. I know of no authority which states that fellow workers have to like one another. On the evidence before this Court, I am not satisfied that the plaintiff was in fact victimised, harassed, humiliated or abused by fellow workers.

(I have emphasised sections of this passage for later reference.)

52 His Honour then made some findings of fact interspersed with other observations (Judgment 12 – 14):

I have no doubt that she perceived that she was victimised, harassed and humiliated, but having observed Mr Singh in the witness box, I accept his denial that he did not victimise, harass or abuse the plaintiff. Certain swearing, which occurred in the presence of the plaintiff, was, I consider, an act of exasperation on his part, and his exasperation was as to the situation which had arisen between him and the plaintiff, and was not directed against the plaintiff personally.
Mr Singh’s actions in endeavouring to solve the problem may not have been the best management option, but I accept that he tried as best as he could, and accept his own assessment that his efforts just did not work. I do not consider that a court in determining whether or not there has been a breach of a duty of care can determine that question by setting a standard as to the best management option. I also accept that Mr Royal [ sic , for “Royle”], whilst unhappy with the situation, did not victimise, harass, humiliate or abuse the plaintiff.
I do not consider that there has been any breach of any duty of care in the circumstances , nor do I consider that there has been victimisation, harassment, humiliation or abuse as claimed. I accept that there was hostility towards the plaintiff by Mr Royal [ sic , for “Royle”] and others, but such hostility as expressed towards the plaintiff I consider is and was a matter for an industrial tribunal. I do not consider that the hostility as so expressed towards the plaintiff, expressed itself in specific acts of such a nature that a court could determine those acts as triable issues.
As to the claim that the defendant was in breach of a contract of employment in subjecting the plaintiff to levels of stress which might cause psychological injury, I find that the levels of stress experienced by the plaintiff were levels of stress associated with her appointment to the position of team leader at the Wagga Wagga regional office, and that the defendant was not in breach of any contract of employment as alleged. Stress was associated with the job and the evidence before me does not satisfy me that fellow employees intentionally subjected the plaintiff to stress by way of victimisation, harassment, humiliation or abuse.

(Again, I have emphasised parts of this passage for later attention.)

53 His Honour did not find it necessary to make comprehensive findings as to the true course of events in any detail. The reason for that is apparent to me. I will come to that. It is sufficient to note, at this stage, that his Honour did not reject the plaintiff’s account of events and accepted at least the general thrust of it. That is clear from his Honour’s finding (Judgment 13) that there was hostility towards the plaintiff in Mr Royle’s conduct and that of others.

54 It is also clear that his Honour rejected the allegation that such conduct amounted to victimisation, harassment or abuse. I think what his Honour meant by that was that nothing was done with malice, that is, with the intention of causing the plaintiff distress or harm.

55 That, however, left for consideration by his Honour whether what was alleged by the plaintiff to have been done or omitted was actionable in law. It is apparent from the passages I have emphasised that his Honour did not think it was.

56 In so directing himself, his Honour did not have the advantage of the decision of this court in State of New South Wales v Seedsman [2000] NSWCA 119, delivered on 12 May 2000, some six months after his Honour gave judgment in the present case.

57 In Seedsman, a female police officer contracted a psychological illness as a result of intensive exposure to crimes committed against children over a period of several years. The plaintiff recovered. The appeal was unsuccessful.

58 The trial judge in Seedsman referred to what was said by Mason J in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-8:

A risk of injury which is quite unlikely to occur, such as that which happened in Bolton v Stone [1951] AC 850, may nevertheless be plainly foreseeable. Consequently, when we speak of a risk of injury as being ‘foreseeable’ we are not making any statement as to the probability or improbability of its occurrence, save that we are implicitly asserting that the risk is not one that is far-fetched or fanciful. Although it is true to say that in many cases the greater the degree of probability of the occurrence of the risk the more readily it will be perceived to be a risk, it certainly does not follow that a risk which is unlikely to occur is not foreseeable.
In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position.
The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors.

59 The trial judge then referred to what was said by Miles CJ in Gillespie v The Commonwealth (1991) 105 FLR 196 at 202:

In the present case it is not necessary to consider foreseeability with respect to the existence of a duty of care, because the relationship of employer and employee itself gives rise to that duty of care. Foreseeability for present purposes is to be considered only insofar as the degree of remoteness of the harm sustained by the plaintiff set the parameters of the steps that a reasonable person in the position of the defendant would have taken to reduce the risk to the extent that any ‘unnecessary’ risk was eliminated. In practical terms this means that the plaintiff must show that the defendant unreasonably failed to take such steps as would reduce the risk to what was a reasonable, that is a sociably acceptable, level. It may be that this takes the court into an area of value judgment of which the inscrutability of a jury verdict may provide a more appropriate means of expression. Where a judge constitutes the tribunal of fact, reasons must be given for this decision, a decision which is non-juridical and in the nature of a value judgment. Others may reject those reasons, and an appeal court may substitute its own value judgment: Warren v Coombes (1979) 142 CLR 531.

60 On appeal, Spigelman CJ, with whom Mason P and Meagher JA agreed, did not doubt the applicability of those authorities to a case of psychological injury resulting from workplace stress. The primary focus of the appellant’s submissions in Seedsman was foreseeability. The court cited as relevant the following passage from the judgment of Windeyer J in Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383, at 402:

Liability for nervous shock depends on foreseeability of nervous shock. That, not some other form of harm, must have been a foreseeable result of the conduct complained of. The particular pathological condition which the shock produced need not have been foreseeable. It is enough that it is a ‘recognizable psychiatric illness'.

Seedsman was not a case of mental shock suffered by a third party but the principle is the same. Liability for psychological injury depends on the foreseeability of injury by psychological injury.

61 The foreseeability of psychological injury was challenged in Seedsman. It was argued that there was no evidence of foreseeability. As to that, Spigelman CJ said, at [32]:

It is not correct to say that evidence is required in all such cases. In making a decision on foreseeability, evidence of surveys or expert evidence is not always required. Commonsense has a role to play in this, as in other areas of judicial decision making.

62 He went on to say, at [34], [35]:

[34] A similar proposition is appropriate in the present case with respect to the relationship between exposure to stressful situations and consequences of an adverse character on a person's mental well being.
[35] As Barwick CJ said in Mount Isa Mines supra at 389-390, with respect to the facts in that case:
“... an employer could and ought to foresee that the sight of a burning or recently burnt human might mentally disturb an employee whose proximity to the injured fellow employee ought to be foreseen. So much I think is within the ordinary experience of people who work with electrical current, particularly electrical current at a high voltage. No special medical or psychiatric knowledge is required in my opinion to foresee the possibility of injury by way of mental disturbance in such circumstances.”

63 It was held that there was evidence of foreseeability in Seedsman, in any event.

64 The decision in Seedsman made clear that a claim for psychological injury resulting from workplace stress is justiciable, and that the same principles apply as in relation to liability for work-related injuries generally. It is apparent from what I have emphasised in the passages quoted from the judgment in the present case that the trial judge in the present case held otherwise. That was an error. On the authority of Seedsman, his Honour, in effect, disqualified himself from deciding the case according to law.

Intervention

65 Error does not mandate that the appeal should be allowed. It would not be allowed if this court were of the opinion that, on the evidence at trial, the plaintiff could not have succeeded on the application of correct legal principles.

66 As was decided in Gillespie, without disapproval by this court in Seedsman, a duty of care at common law is established by the relationship of employer and employee. Breach of duty involves, first, the foreseeability of psychological injury. The test for foreseeability promulgated in Shirt is undemanding. It was open to the trial judge to find the facts asserted by the plaintiff. There is no finding to the contrary except insofar as the plaintiff asserted that the conduct in question was malicious.

67 It may be that it was open to the trial judge to find, on the bare narrative of events given by the plaintiff and notwithstanding other evidence to the contrary, that psychological injury was foreseeable in this case. But there was other evidence. First, there was Mr Reith’s observation, in September 1995, that he was worried about the plaintiff’s health, which could be construed to mean her mental health. (I have said I would so construe that evidence myself.) That was evidence that psychological injury was foreseen, a fortiori foreseeable.

68 Secondly, there is a report in evidence by Dr Metcalf in which he said:

There is nothing to suggest that Mrs Mannall suffered any psychological illness before taking up her post in May 1994, nor that she had any abnormal susceptibility to psychological illness.
The persisting stresses to which Mrs Mannall was subjected over a period of more than eighteen months were such as would, in my opinion, foreseeably have caused psychological injury to a person of normal psychological fortitude.

This opinion can only have been based on the history of events given to him by the plaintiff. That is recorded in an earlier report, also in evidence. The history there is brief but it is not materially different, in substance, from the plaintiff’s account. In any event, there was no objection to the report, which contains the opinion, on grounds of relevance and Dr Metcalf was not required for cross-examination. It was open to the trial judge to accept Dr Metcalf’s opinion concerning foreseeability.

69 So there was evidence of foreseeability.

70 Was there then evidence on which it could be found that the defendant unreasonably failed to implement a reasonably practicable means of avoiding foreseeable risk? Evidence that there was such a reasonably practicable means is to be found in the Breen report. The fact that an expert recommended what he did is evidence that the recommendations were likely to be effective. The reasonable practicability of implementing the recommended action at an earlier time is self-evident.

71 There was expert evidence that the employment situation caused or materially contributed to the plaintiff’s injury, and the association appears to have been common ground anyway, as I have said.

72 Redetermination on the record is not practicable in this case. It would involve the making of findings which turn on credit and reliability , assessments which this court is unable to make without seeing and hearing the witnesses.

73 The alternative is to order a new trial if there is power to do so. Section 75A of the Supreme Court Act 1970 provides, relevantly, that this court may give any judgment or make any order which the nature of the case requires. That power is qualified, however, by Pt51 r23 which provides that a new trial may not be ordered on the ground of error of law unless a substantial wrong or miscarriage of justice has thereby been occasioned.

74 As to that, there was evidence on which his Honour could have found a verdict for the plaintiff based on breach of duty at common law. That could have been done consistently with such findings as his Honour made on the facts. There was, accordingly, a miscarriage of justice because, but for the error which I have identified, it is possible that the plaintiff might have succeeded at the trial. It is, therefore, open to this court to order a new trial. A new trial is the appropriate remedy.

Result and orders

75 I would allow the appeal with costs and order a new trial.

76 I add that nothing in this judgment should be construed as an indication of what the result should have been on the evidence adduced at the trial, let alone what it should be on a retrial. No such indication is intended either way.

77 The orders I propose are:

(1) Appeal allowed;
(2) Respondent to pay the appellant’s costs of the appeal;
(3) Order a new trial.

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