McKenzie v Curtain Raiser Pty Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	McKenzie v Curtain Raiser Pty Ltd [2022] NSWPIC 9
APPLICANT:	Glenn McKenzie
RESPONDENT:	Curtain Raiser Pty Ltd
MEMBER:	Catherine McDonald
DATE OF DECISION:	10 January 2022
CATCHWORDS:	WORKERS COMPENSATION - Psychological injury as a result of events over two days; analysis of factual evidence; Nguyen v Cosmopolitan Homes and Attorney General’s Department v K applied; Held - award for the applicant.
DETERMINATIONS MADE:	1. The respondent is to pay the applicant weekly compensation pursuant to s 37 of the Workers Compensation Act 1987 from 28 August 2020 to 11 August 2021. 2. The respondent is to pay the applicant’s s 60 expenses. 3. I remit the matter to the President for referral to a Medical Assessor to assess the applicant’s permanent impairment as a result of a psychological injury deemed to have been suffered on 13 February 2019. 4. The material to be sent to the Medical Assessor is: (a) Application to Resolve a Dispute and attached documents; (b) Reply; (c) the applicant’s Applications to Admit Late Documents dated 25 August 2021 and 14 October 2021, and (d) the respondent’s Application to Admit Late Documents dated 27 September 2021.

STATEMENT OF REASONS

BACKGROUND

Glenn McKenzie and his partner, Michael Farthing, were employed by Curtain Raiser Pty Ltd (Curtain Raiser) trading as the Out of the Ordinary Outback Group to work at its hospitality sites at Broken Hill. Each of them claims that they suffered a psychological injury on 13 February 2019 though only Mr McKenzie’s injury is the subject of this decision. Mr McKenzie alleges that he was “exposed to a pattern of behaviour, events and working conditions … which caused him to suffer a psychological/psychiatric injury being a disease of gradual process … or in the alternative to suffer an aggravation, acceleration or deterioration of a disease…”
Mr McKenzie claims weekly compensation from 28 August 2020 to 11 August 2021, medical expenses and permanent impairment compensation.
Despite the payment of some compensation, Curtain Raiser denies that Mr McKenzie suffered an injury to which employment was a substantial contributing factor. Curtain Raiser denies that Mr McKenzie is incapacitated. In its decision notices, Curtain Raiser relied on the defence in s 11A of the Workers Compensation Act 1987 (the 1987 Act) but it did not make submissions on that defence.

PROCEDURE BEFORE THE COMMISSION

At a telephone conference on 5 August 2021, I granted leave to issue directions for production to Mr McKenzie’s treating doctors. The parties agreed that, subject to agreement that Mr McKenzie’s salary was $80,000, his pre-injury average weekly earnings were $1,538.45.
Mr McKenzie agreed to comply with a notice for production for financial records, subject to agreement that access to the documents was limited to Curtain Raiser’s legal representatives and insurer.
I noted at the telephone conference that documents purporting to be statements made by Curtain Raiser’s witnesses were answers to a series of questions. I was told that Mr McKenzie’s statement had not been served before the Application to Resolve a Dispute (ARD) was filed and that further evidence may be relied on. A statement from Mr Farthing was also foreshadowed.
The matter was listed for conciliation conference and arbitration hearing on 30 September 2021 when Mr Carney of counsel appeared for Mr McKenzie and Mr Grant of counsel appeared for Curtain Raiser. Curtain Raiser had served further statements on 27 September 2021 and Mr McKenzie sought to respond to them. The parties agreed that Mr McKenzie would serve further statements within 14 days and that written submissions would be provided. The submissions were served in accordance with the timetable, subject to an adjustment agreed between the parties.
By the time of the conciliation conference, it was agreed that pre-injury average weekly earnings were as set out above.
The parties did discuss resolution of the matter at the conciliation conference. I am satisfied that they understand the nature of the application and the legal implications of any assertion made in the information supplied. I used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties had sufficient opportunity to explore settlement and that they were unable to reach an agreed resolution of the dispute.

EVIDENCE

The following documents were in evidence before the Commission and considered in making this determination:

(e) ARD and attached documents;
(f) Reply;

(g) Mr McKenzie’s Applications to Admit Late Documents dated 25 August 2021 and 14 October 2021, and

(h) Curtain Raiser’s Application to Admit Late Documents dated 27 September 2021.

It was implicit in the orders made on 30 September that Mr McKenzie’s statement dated 14 October 2021 would be admitted in the proceedings and no objection was taken to its admission in Curtain Raiser’s submissions.

Emails

Much of the communication between Mr Scott Smith of Curtain Raiser and Mr McKenzie was in writing. I have set out the emails and text messages first and at some length because they are referred to in the statements of the witnesses and because the contemporaneous documents provide the best description of the events.
On 26 October 2018 Mr McKenzie and Mr Farthing sent a resume to [email protected] in response to an advertisement. I understand ootoo to be an abbreviation of Out of the Ordinary Outback, which is Curtain Raiser’s trading name. The resume referred to the men as relief property managers and the application said that, having sold their property on the Sunshine Coast, they were travelling around Australia in their caravan with their dogs. They were then relief managers at Alice Springs Tourist Park until 18 November.
On 14 January 2019, Mr Smith sent a text message to Mr McKenzie, noting that he and Mr Farthing had applied for a job as caravan park managers. He said he was interested to talk to them because “I may have another interesting role trying to grow our group and run a tour company.”
After further text messages, which refer to telephone conversations, Mr Smith offered “both of” Mr McKenzie and Mr Farthing “the general management role at Out of the Ordinary Outback based in Broken Hill” in an email dated 17 January 2019. He said that the job was to “help build the brand and the group into a financially successful tourism and hospitality business” and would “cover a lot of facets” including:

“Financial control and operational knowledge of the group, working with the owners and the finance team
Marketing the property and group working with our marketing team to deliver a quality product
Look after and grow group bookings and events including conference and weddings
Helping shape run and grow Tristate Safaris a big job I hardly know where to start but a huge opportunity especially with the overseas market
HR helping manage the growing staff and ensuring we have well trained and motivated teams
Helping build the quality of the product and promoting with trade shows and hosting media etc
This is the tip of the iceberg but not one for the faint hearted…”

The offer included $80,000 salary, accommodation in Broken Hill, a car for work purposes and a phone. Mr Smith asked that Mr McKenzie and Mr Farthing stay at four properties at his expense as a secret shopper on the way to Broken Hill. He ended the email:

“If you spend 1 night at each place before you start it will give you an understanding of the places distance etc and standards this will give you a great footing before ending up in Broken Hill If you could do this and put it all on your credit card then I can reimburse you as an expense
Let me know your thoughts on the above and what dates work so I can start to work on the dates to meet you out at Broken hill so we can get you settled in and talk about jobs roles and vision for the group.”

Mr McKenzie emailed back seeking to clarify if the salary as $80,000 combined or each. Mr Smith responded:

“I expect to pay you more than this but this is what the business can pay now to get it on its feet and running.”

The offer was accepted straight away and Mr McKenzie said that they would confirm their departure date from Victoria that evening.
On 18 January 2019 in a text message, Mr Scott said:
“Guys excited to have you on board your biggest and most rewarding challenge yet. Really enjoy your down time as we will need you 100% I want to build the best unique outback product in Australia bar none. Really need 100% attention to the task do not underestimate the job Any way thanks guys I have put all of me and risked everything to build this now I need to make it work.
Look forward to seeing you after your drive. Scott”
Mr McKenzie texted back and said they were “looking at” arriving in Broken Hill on 8 February. He said that the “Owner here is back earlier which has given us some more time to do the trip around.”
On 4 February, Mr Smith asked Mr McKenzie to phone him “to discuss new team at COBAR need your advise.” On the following day he asked Mr McKenzie and Mr Farthing to join “wiki camps to review sites.”
On 7 February Mr McKenzie texted:
“Hi Scott. We have arrived to Broken Hill. Parked up at the resort for the night and currently having dinner and a beer. Well..what a big contrast to White Cliffs! Quick question ... do staff here in Broken Hill know we are arriving?”
Mr Smith replied:

“Yes some of them Cindy the operations person knows your coming and will look after you I would say she is on tonight.
What are your first impressions of the venue”

Mr McKenzie wrote:

“It is beautiful. Plenty of work here to go too. Coming along nicely. Met Cindy .. she seems like an absolute asset to the company. Extremely friendly and welcoming which was great. Talk to you tomorrow at some stage we'll settle into the house and get our heads around town over the weekend before getting into things on Monday!”

On Monday 11 February 2-19 at 2:04pm Mr Smith texted:

“Can you call me please we need to set the tempo and expectations correctly need training for Michael on tri state and need to focus on recruitment. Please call ASAP”

And at 3:57pm
“Can you go out tonight and do close so that you are getting some site specific training. Can you be there at 630 pm that way I can let Cindy knock off earlier than normal”

Mr McKenzie replied that they had planned to be onsite the following evening and Mr Smith said:

“I feel more comfortable if you went tonight I feel it is too rushed. I know you will have questions and want to make sure we are 100% right for the customers”

When Mr McKenzie replied that it “will need to be tomorrow” Mr Smith said:

“I am worried about Cash up and balancing
Limited time to train
No knowledge of keys, power water, safes floats kegs
Who will you call to help as the phone is playing up Warrawong
as there is a Telstra outage. If the power goes out what will you do the generator ?
Lyndon does not know the practicality of running a venue and has no knowledge of the operational aspect of the business
I will ask again to go tonight with such limited time to train”

On the morning of Tuesday 12 February, Mr McKenzie emailed employment documents for processing saying that employment commenced on 3 February and “we trust you will fast track payment for last week’s wages to be paid this week together with the reimbursement of expenses.” He then emailed receipts to Mr Smith and others for “reimbursement to be paid this week” and said that he trusted “you will attend to this payment with urgency.” Payment was made that day, having been approved by Mr Smith at 11.54am.
At 10.52 on the morning of 12 February Mr Smith sent a long email in which he said:

“Hello guys I should have been out there to meet with you but with the new young bub it was just too hard. What I want to go through is the roles that you will be performing for the organisation and the timing of those roles and expectations on my behalf
1. I do believe the approach you came in with was not the best you did not make me feel comfortable and my request for handover of some sort was refused no reason given. I am surprised at your level of experience and professionalism that my need was not catered to. This will be the first and the last time I have to know if l ask for something to be done no real reason was given just No. I am setting my expectation levels and this is important I can rely on you to do whatever I ask as long as it is within scope and legal this is the job you have taken on if this is not the case then it will not work”

Mr Smith set out two “very distinct and … not really overlapping roles”. Mr McKenzie was to have the title of general manager of the group and Mr Smith said:
“Your role is to take the time to learn. the business and the people we have in the business and then with consultation with me put forward management decision of which we then execute. The time that was taken to change the existing plans was ill conceived and with not enough consultation with the 2 most important people in this spare Cindy and myself. You need to understand. That we want to empower you to run the organisation but you need to understand the business first how can you make these decisions with limited site knowledge as stated in my text you had not thought about all of the other thing such as infrastructure and contacts that is required to make the place work so please talk to me or Cindy first so we can get it right.”

Mr Smith said that recruitment for the property at Warrawong needed to be addressed that day. He asked Mr McKenzie to attend a function at Warrawong on 14 and 15 February and “[n]ext day I will get you to help strip the rooms and lend a hand with whatever is needed to get the place ready to sell we are really short of staff.” Mr Smith asked that he go to White Cliffs after Warrawong to check on the progress of painting by the caretakers and “work out what is needed.”
Mr Smith said that Mr Farthing’s role was “Tristate safari manger and groups (VERY
OPERATIONAL BASED ACTUALLY IT IS ONLY YOU TO START WITH).” He said:
“This job is very much hands on working with Janine to get the new rezdi system set up working with the myself on setting the tours and running all operational. aspects of Tri state safaris. This is office based but you will also need to get potentially your drivers license for buses and 4Wd so that we are flexible enough to be able to take people on tour s if something comes up at the last minute. The position will also require administration involved with the vehicle safety and you will need to get a coach managers licence for the group…”

Mr Smith asked for a phone hook up that afternoon.
At 1.55pm Mr McKenzie sent an email to Mr Smith:
“Letting you know that we have both left the office today feeling unwell due to the stress and communicative demands and changes to our jobs already being put on us by yourself and your company.
We have received the appropriate workplace advice and have an appointment to speak with a GP tommorow.”
At 2.03pm Mr Smith wrote:

“Disappointed this has not worked out but the cultural fit was not right. You obviously have resigned as you both have left the office to go home. I will take this as a resignation
Can you drop back the keys to my house and the Phone that you have and obviously leave the house in a decent state. I will need to get the place carpet cleaned if the dog has been in the house
I am not sure what you are saying below none of this makes sense with the total communication I have been having with you along the way and I was just spelling out operationally what was required as the email clearly states
I am not angry so if you want to call me to discuss that would be great
I hope all works out on your travelling adventure”

At 2.07pm Mr McKenzie sent an email saying “This is not a resignation. It was letting you know we have left the office unwell.”

At 2.21pm on 12 February Mr Smith texted:
“Hello Glen can you please vacate my house please and drop the key at the Argent motel please. I thank you in advance also can you return the phone please”
Mr McKenzie responded:
“Why are you asking us to vacate? I will repeat again. We have left the office due to feeling unwell and stress caused by yourself. We have an appointment with a GP tomorrow. You are now causing us even more stress.”
At 16.29 Mr Smith emailed:

“We have acknowledged that you are absent from your duties to due to not being fit for work ie personal leave. Could you please give an approximate date as to when you believe you could return to work.
Additionally
Due to not having any accrued personal leave, we are also notifying you that this absence of personal leave will be unpaid.”

At 17.02 Mr Smith wrote:

“Hello Glen and Michael
As discussed the house at Pell st was a temporary solution as it is for sale and I have buyer coming through who is fussy and wants to house unoccupied. I do not and did not allow dogs inside and this will need to be cleaned as I have notice that 2 dogs have been in the house without permission. As per previous discussions about accommodation options the unit at the tourist lodge is available now and ready to move in
I will give you 7 days notice that I require you to move to the managers unit at the Tourist Lodge in Argent st Broken Hill however No pets are allowed inside the complex due to health reasons however they can be locked up outside
I will need the place ready for inspections so require from todays date 7 days to vacate
Depending on what the potential buyer asks we may have to paint the property and thus it will not be habitable in this time”

Mr McKenzie sent an email to Mr Smith on 14 February, informing him that he and Mr Farthing had been certified unfit. He emailed Certificates of Capacity later that day.
Mr Smith emailed:

“Can you drop the phone back to the Argent Motel as we need to use the phone till you return to work.
Please send through your Drs certificate please
As stated in the previous email you have not accrued any sick leave so this is is time off at your own expense
I have also now seen some bills that are not work related such as alcohol and fuel bought prior to coming to Cobar these expenses will need to be covered by yourself as they are not covered by Curtin raiser
I will work out what these expenses are so they can be recalculated
Do you have an expectation of how long you will be away from your positions as we need momentum now before season starts”

On 15 February Mr Smith emailed at 15.36:

“I hope you are feeling better and we look forward to you making a speedy recovery. We were unsure how many sets of keys were floating around for the house at Pell st so we have taken the liberty to get a lock smith in to change the locks to ensure your safety. I have a new set of keys with Cindy at the resort if you would like to come and collect them. One thing I need to go through is the rental agreement as you know I was providing accommodation as part of this structure however I require a bond of $1200 to cover 1 months rent in case there is any damage or the place needs carpeting cleaning etc.
If you would like to sign the rental document and pay the $1200 I can reissue the keys to you for the property. This paper work had not been signed due to the quickness of which you both became ill
I hope you are relaxing as per your Doctors instructions and that within 14 days you will be ready to perform your duties”

At 19.13 that evening, Mr Smith emailed again:

“I am just following up on the phone I asked you to return. Can you please give me an update as I have not seen it come back
This is the third time I have asked for it to be returned to the Argent motel. Please advise when you will return it
Can you please advise when you think you will be both returning to your positions at Out of the Ordinary Outback

Also for your safety we have installed safety cameras at the Pell st house to ensure that the place
is safe from theft
Please advise on the phones return”

On 28 February Mr Smith emailed Mr McKenzie and said:

“We have requested on numerous occasions to receive back our phone and
keys that you have while you are convalescing as we require them for work purposes
Can you advise when you will be returning them”

On 14 March 2019 Mr Smith sent another email to Mr McKenzie:

“Hello guys work cover is trying to contact you can you please answer your phone
I have asked for the mobile phone back and the only set of keys we have to one of our tour vehicle
If I do not receive the keys back within 7 days I will be forced to get new keys cut and the locks changed on the vehicle
I will be seeking costs for exercise and damages for loss of income due to lost tours and income which we have suffered causing me financial and personal stress
I am sure your recover is coming along nicely and I really look forward to seeing you in person back at work”

Statements

In his statement dated Mr McKenzie said that he and Mr Farthing commenced employment with Curtain Raiser on 3 February 2019. He said they had been working as relief property managers for about two years.
He said that both men were employed as general managers of the Out of the Outback Group in Broken Hill. Mr Smith contacted them by text message on 14 January 2019 and after a couple of telephone conversations, they were offered the job on 17 January by email. He summarised the contents of the emails sent on that date and set out above.
Mr McKenzie said they arrived in Broken Hill on 7 February and stayed overnight in their caravan at Broken Hill Outback Resort “which we understood would be the main property we would be operating.” On the following day they met Cindy Caldwell and understood she was “acting as Operations Manager and we would be taking over her role.” Ms Caldwell gave them the keys to a property in Pell Street, Broken Hill which they understood to be the house included in the employment package. Mr McKenzie said that on Saturday 9 February they spoke to both Ms Caldwell and Mr Smith about the lack of a fence at the property to secure their dogs. He said they had told Mr Smith about the dogs before accepting the role. Over the weekend they drove to Curtain Raiser’s property at Ivanhoe, met the managers and introduced themselves.
On Monday 11 February they went to the office and met Janine Gowenlock who was tasked to train them and familiarise them with the business. He said:
“I recall that we were quite a busy day on the Monday, Scott was on the phone to us a lot. We were mostly familiarising ourselves with all of the staff in Broken Hill and what their roles were. We understood that Cindy was responsible for almost everything and that she was integral to all aspects of the Group. We needed to understand what the other employees’ responsibilities were so that we could try to free up some of Cindy’s time and improve efficiency in all aspects of the Group.
I noticed that things were happening really rapidly. It was sprung on us that there was a group of tourism leaders that were due to arrive in Warrawong the following day. The property at Warrawong had no management and it was being looked after by a young backpacker. We wanted to be able to set the company in the best light possible and appreciated that having a group of tourism leaders visit was a big deal for the business. We discussed the best way to manage the situation with Scott, Janine, and the IT Manager, Lyndon.”

Mr McKenzie said that “all of us” agreed that Ms Caldwell should meet the group at Warrawong because it made sense to send the person with the most knowledge of the business at the time. He said:

“Scott had recently opened a brand new pub at the Broken Hill Outback Resort, which Cindy was managing. She was required to do all of the cash handling and closing down each night.”

Mr McKenzie said that he and Mr Farthing were experienced relief managers so “it would not have been an issue for us to look after the pub for a day or so” with assistance from Lyndon the IT manager. Lyndon’s surname is not revealed in any of the evidence. At Ms Gowenlock’s suggestion, they drove to the resort to tell Ms Caldwell
“as she might be more receptive if we spoke face to face. Scott and Lyndon agreed and Janine had already warned us that Cindy might have trouble letting go of her responsibilities and accepting the changes we would be making. We drove to the Resort during our lunch break to speak with Cindy and then we returned to town. We grabbed a quick bite to eat for lunch at a café across the road from the office, and then we returned to the office and continued training with Janine.”
Mr McKenzie said that in the afternoon, Mr Smith’s communication became quite erratic and that the day in the office had been chaotic. He said it seemed that Ms Gowenlock had “sprung” on Mr Smith that they did not have appropriately licensed drivers for their tour vehicles. There appeared to be no staff for the Tri State Safaris business and no receptionist in the office – only Lyndon the IT manager worked there. He said he was surprised to receive Mr Smith’s text at 3:57 because it had been agreed that he and Mr Farthing were not required to go to the Resort (20 minutes out of town) again that evening.
On Tuesday 12 February, the men asked for their employment documents which had not been given to them the previous day and provided their receipts because they were told “it was the pay cycle”. Mr Mc Kenzie said:
“That morning we noticed that Scott was on the phone to Janine quite a bit. Scott then sent me an email at 10:52am outlining what his expectations were from each of us in our separate roles; however the roles and responsibilities that he described were not at all what we had agreed to when we accepted the employment offer. I immediately felt as though we had been tricked into moving to Broken Hill because Scott had completely changed the nature of our employment. Scott called us several times that morning and he was very volatile and abusive. I questioned his email because the titles were not what we had agreed to and the roles were completely different. He would always speak to Janine first and then speak to us. He said words to the effect of ‘if you don’t want to fucking do this and fuck off’ and ‘this is the way it’s going to be’. I felt intimidated and scared as Scott was very hostile and aggressive on the phone. I also felt panicked by the situation as Scott’s communication with us had suddenly turned abusive.
After receiving Scott’s email and speaking with him several times throughout the morning, Michael and I both felt so stressed and overwhelmed that we left the office early and made an appointment with a GP. I informed Janine that we were unwell, we did not tell her why we were so concerned but we just needed to get out of there. I sent an email to Scott to let him know that we were unwell and had left the office at 1:55pm.”

Mr McKenzie summarised the text messages and emails. He said that the communication with Mr Smith was confusing and stressful. By 15 February 2019 the men had moved their caravan to a caravan park which was not one of Curtain Raiser’s properties because they did not feel safe in the house. Mr McKenzie said he was experiencing panic attacks and feeling anxious and felt they should leave Broken Hill because he was worried that Mr Smith “was watching our every move.” He said that the manager’s residence at the Resort had been “trashed” and there were two “range rovers” in the staff parking area though only one had a number plate. He saw the “ex-manager” driving one with the number plate from the other vehicle and said that he was scared and “these things that I had noticed started to play on my mind.”
Mr McKenzie described his medical treatment. He said he and Mr Farthing left Broken Hill and travelled to a friend who has a property in the Macedon Ranges, where they had been staying before they went to Broken Hill. The property is known as Mount William Olive Grove. Mr McKenzie saw Dr H Rafi at Marong on two occasions but was not comfortable with him. In April 2019 he saw Dr K Walters at Sunbury who was not willing to assist. He felt helpless and housebound and was confined to the caravan. He did not feel capable of going out to see a doctor until April 2020 when he saw Dr Mazhar at Kilmore whom Mr Farthing had been consulting.
Mr McKenzie said that he attended a harvesting event at the olive farm to observe. He was also asked by the owner of the farm to continue as caretaker at the Farmhouse which was listed on Airbnb. His role was to make sure the key was in the key box when guests were due to arrive and to assist the guests with any issues during their stay. Over time he felt that the owner was expecting more from him and “it became too much”. He was unable to continue helping with the guests and left the property in February 2020.
Mr McKenzie said that he was never contacted by an investigator on behalf of Curtain Raiser to provide a statement.
Mr McKenzie responded to the first batch of statements on which Curtain Raiser relied. In particular and in response to Mr Smith’s statement he said, among other things, that the men never had a set of keys to any of Curtain Raiser’s vehicles. He also confirmed that the men had spoken to Mr Smith frequently from the time they left Victoria and that he was aware they had two dogs. He denied that they took a long lunch on 12 February.
One of the issues about which they spoke to Mr Smith en route to Broken Hill was the management of a hotel at Cobar. The issue was to be discussed again on 11 February. Mr Smith had hired a couple to manage the business with the intention that one become the licensee. Mr Smith sought to terminate that person’s employment because he was unsuitable to be the licensee with facial tattoos. Mr Smith asked Mr McKenzie to terminate his employment, which he was reluctant to do without legal advice.
In his statement dated 14 October 2021, Mr McKenzie said that they never resided in the manager’s residence at Broken Hill Resort and that the apartment they inspected was filthy. He said they parked their van at the Resort on arrival and then stayed in the house in Pell Street.

Mr Farthing

Mr Farthing prepared a statement dated 4 August 2021. He confirmed that he had an accepted claim in respect of the events on which Mr McKenzie relies. His evidence about the management of the claim is not relevant to the issues I am required to determine.
Mr Farthing also said he understood that the men had been employed as joint general managers. On the way to Broken Hill he observed that extensive repairs were required to the underground hotel at White Cliffs, which they discussed with Mr Smith, as well as the employment of the management couple at Cobar. He said that Mr Smith seemed to agree that legal advice was required before dismissing the proposed licensee.
When they arrived in Broken Hill they met Ms Caldwell at Broken Hill Resort. The current manager was finishing up and a new couple was starting in about a week. On the following day they went to the house at Pell Street. He said they had discussed whether there would be room for their caravan and a fence for the dogs. He said that Mr Smith agreed the dogs could stay inside.
Mr Farthing said that they arrived at the office at about 8.00am on 11 February and he bought coffee for themselves and Ms Gowenlock while they waited for the computers to be set up. They were on and off the phone to Mr Smith while undergoing training with Ms Gowenlock. He said that Mr Smith’s “attitude was really mixed”, especially in relation to the maintenance issues which had already been discussed. He said they were confused by the conversation which appeared aggressive and erratic.
After it was decided that Ms Caldwell should attend to the group booking at Warrawong, Mr Farthing said they received a phone call from Mr Smith saying that he was not sure that Ms Caldwell could attend the group booking and that he wanted the men to go to the Resort and close up, working until late that evening. They explained that they had started at 8.00am and that the dogs were in the house. Mr Smith seemed to agree but later demanded that they go and close the hotel that night.
On the following day they were given pay and tax documents to complete. A few hours later they received an email from Mr Smith with a clear change of employment. When they contacted him to discuss the changes, Mr Smith became aggressive and swore. The discussion was overwhelming and they told Ms Gowenlock that they had to leave the office immediately. The level of aggression made them feel that Mr Smith was not a safe person to work for. Mr Farthing said that the aggression and harassment continued and twice people entered the property when they were out.

Ms Caldwell

The first transcript of a conversation in the reply is a conversation between Cindy Caldwell and an investigator on 6 September 2019. Ms Caldwell said that she was hired as the procurement manager for the Curtain Raiser businesses in 2017 but was acting as operations manager. She anticipated handing over to Mr McKenzie.
Ms Caldwell met Mr McKenzie at Broken Hill Outback Resort which is 13 km west of Broken Hill when the men arrived in their caravan. They checked in but she was unaware until after they had some drinks and food that they were going to be the new operations managers.
Ms Caldwell said that as operations managers are on a salary, Mr McKenzie would not have set hours and that a minimum of eight would be expected and he would take days off when he was able to. He would be expected to manage his own hours.
Ms Caldwell was not present during the induction which took place at the office of Tristate Safaris in Broken Hill. She said that when she met Mr McKenzie he was very sure of himself and he was not interested in learning how things were done or why they were done that way.
On the second day of induction, Mr McKenzie went to see Ms Caldwell at the Resort and asked her to go to Warrawong on the following day to help with a group which was coming in. She said he spoke sternly. She asked who would run the Resort and he said he would do it. When she offered to show him the safe codes and procedures he said he would teach himself because he had walked into places before without a handover. Ms Caldwell called “the owner” who asked Mr McKenzie to attend training but he refused. She said that Mr McKenzie stormed out and Mr Farthing stayed back and asked if she was OK. After they left, Mr McKenzie and Mr Farthing were unable to be contacted.
Ms Caldwell said that Mr McKenzie left with a new iPhone and the keys to the Pell Street property.
Ms Caldwell provided a second statement dated 12 August 2021 in which she adopted the transcript of the previous interview as correct. The second document consists of short answers to a series of questions. She said in this statement that the men had been employed to fill two separate roles – Mr McKenzie as general manager and Mr Farthing with Tristate Safaris.
Ms Caldwell said that she was unaware the men had dogs until they told her that the fences at the Pell Street property were not high enough for their dogs. She invited them to use spare fencing material from the back of the Resort to make the fences higher. She was not asked, and did not say, when that conversation took place. She was asked about Mr Smith’s knowledge about the dogs and added her comment about her own knowledge.
Ms Caldwell said that it was intended that the first few days would be a combined induction before the men had individual inductions. She named the three drivers that Tristate Safaris had to drive the tour bus. Ms Caldwell said she was unaware of the answers to many of the questions asked of her. She said that she needed to show Mr McKenzie the end of day procedures at the Resort because she was the only person who knew how to do it. Ms Caldwell said that Mr McKenzie told her that Lyndon was going to train them but she told them that Lyndon has never done it. She said that there are two electronic systems at the Resort – one for accommodation and one for food and beverage. She said that she had not been involved in the induction.
When Mr McKenzie and Mr Farthing were unable to be contacted, Ms Caldwell was asked to change the locks on the Pell Street house. She understood they had moved to a caravan park.

Ms Gowenlock

Ms Gowenlock is the Marketing and Groups Manager for Curtain Raiser. In the unsigned transcript of a phone conversation on 6 September 2019 she said that she was part of the induction process because she knew everything about the business, having worked there for five years. She said:
“I gave him part of the induction, which is the role that would - so there was two of them. They're both partners, and so they were employed to be the general managers of the business, and that's why part of their role was to understand the groups and marketing and the tourist side of the business, so that's where I came in, to train them and, sort of, give them an induction on that side. Plus also, meet and greet them from a marketing perspective and give them the overall picture and, you know, marketing collateral and all the different brochures and what we do for each property.”

Ms Gowenlock said that Mr McKenzie seemed quite excited to be involved in the business but that the men did not take the induction seriously and her impression is that they were on a holiday. She said that Mr McKenzie’s job would be to manage the managers of each property and to take on the operational side of the business. Mr Farthing was to take on the tourist and groups side of the business.
Ms Gowenlock said that she only had two days to provide training in all of the policies and procedures but was concerned when the men arrived late on the Monday morning and then suggested she join them for coffee. She said they did not appear interested in the training. They went to lunch for one and a half hours and then went to the resort. Ms Gowenlock stayed at the office until 6.00pm, printing off employment forms for the following day.
On the Tuesday, Ms Gowenlock said the men arrived at about 9.00am and appeared reluctant to be there. They filled in the employment forms and prepared their reimbursement claim then “stormed off” for morning tea after receiving an email from Mr Smith. Ms Gowenlock then began to prepare for a tour group and expected to show the men the process but as she was leaving the office they returned and said:
"Look, we've decided, yep, we - we're just – we don't want to do this, and, you know, it's - we're too good for this, and we need to just get our charging cable out of the office."
Ms Gowenlock said she was shocked when they stormed out.
Ms Gowenlock signed a statement dated 11 August 2021 in which she adopted the transcript of the telephone interview. She was asked the same questions as Ms Caldwell and said she did not have knowledge of most of the issues so the statement adds little. She said:
“I don't understand how Glen and Michael could claim they were stressed, when it was evident, they were having a good time and appeared to be on vacation. They showed no interest in participating in the induction during the brief time they spent in the office with me on training before simply walking out. All I witnessed were coffee breaks, long lunches, time spent photocopying receipts for claiming, filling out employment forms, and then talking about their extensive work history and life experiences.”

Mr Smith

Mr Smith’s first statement is dated 13 September 2019. He said that he has owned Curtain Raiser since 2011 but did not explain what the company does or how long it had owned the premises in western New South Wales. He said he advertised on Seek for managers at a caravan park in Warrawong in November or December 2018 and Mr McKenzie and Mr Farthing applied. Mr Smith retained their resume.

He did not describe in the statement the process by which they were hired nor the position they were asked to fill.
Mr Smith said he asked the men to drive to the properties at Cobar, Wilcannia, White Cliffs and Ivanhoe and paid for their accommodation, food, alcohol and petrol, as well as some sightseeing tours he “did not know about”. He said that the men refused to undertake training on the first night and that he needed them to learn the system before Ms Caldwell left, as Mr McKenzie was to take on her role.
Mr Smith said that the men came with a caravan and he didn’t know they had dogs until they moved into his house in Pell Street. He was providing accommodation as part of their package. He said they lived there for three or four days and left “dog hair everywhere” and the lights and air-conditioning on. He said they took a phone and a set of vehicle keys.
Mr Smith confirmed that he did not know Mr McKenzie and Mr Farthing before firing them and did not meet them because he works from the company’s office in Roseville. His plan was to hire them to oversee the company’s eight properties in Broken Hill and surrounds and that Ms Caldwell and Ms Gowenlock went to Broken Hill to meet them. Mr Smith sent an email on 12 February specifically describing their roles and thought that is when the men “walked out.”
Mr Smith provided two further statements. The first is dated 12 August 2021 and is prepared as the response to a series of questions. His answers to the questions are limited. He said that the roles offered were “GM of Group and Tristate Manager” and that “my email” defined the expected roles. In this statement he said that he had not agreed to pay for alcoholic drinks on the trip to Broken Hill. He said that he had not offered to fence the accommodation because he did not know the men had two large dogs.
Mr Smith said that a joint induction had been arranged which the men refused to participate in. When asked if the proposed roles differed from the email of 12 February he said that “there’s always going to be a split role but we needed to determine which of them have the best skill set for each of the roles.” He denied being hostile toward the men on 12 February and said that he was frustrated that they refused to do what he asked. He denied that he was a volatile aggressive person and said that he did not swear. He said that when the men walked out he assumed that they had resigned.
When asked about a message telling them they had seven days to vacate the house, he said that was possibly correct and that he was in the process of getting the house painted, he needed it empty and had another property lined up for them if they were still working for him. Mr Smith said that the manager’s residence at Broken Hill resort has been trashed but repeated his earlier evidence about dog hair through the property which appears to refer to the property in Pell Street. Mr Smith said he had the locks changed on the property because there had also been previous tenants so he did not know what keys were “out there”.
Mr Smith prepared a further statement as a result of a telephone interview on 20 September 2021. The statement was prepared in response to Mr Farthing’s statement but, like the others, is comprised of short answers to a series of questions. Mr Smith denied that he said the accommodation provided would be fenced and have room for a caravan and he repeated that he was unaware of the dogs. He attached photographs said to show damage caused by the dogs and “a huge covered area to house the mobile home.”
Mr Smith denied that he was on and off the phone with Mr McKenzie and Mr Farthing on the morning of 11 February. He said that he was becoming alarmed at their attitude and had grave concerns. Mr Smith denied that there was a second day of training on 12 February. He denied that he swore at the men on the phone but said he made it clear that they were to do as instructed. He said it was not possible that after one and a half days and one email that they could be injured.
Based on the frequency of communication on the afternoon of 12 February, I accept that there was likely to have been frequent telephone communication on 11 February as Mr McKenzie said.
In response to the statement that people entered the property when the men were out, Mr Smith said that the house was for sale and that a buyer had come through in that period.

Medical evidence

Dr R Palakolanu prepared a medical certificate dated 13 February 2019 in which said that Mr McKenzie suffered “severe stress work conflict related” and that he would be unfit for two weeks. The treatment recommended was “relaxation techniques and no medication was prescribed.”
There are two medical certificates from Dr H Rafi of Marong, Victoria in the Reply but they relate to Mr Farthing. The certificates are dated 27 February 2019 and 13 March 2019.
Mr McKenzie saw Dr M Mazhar of Kilmore Medical Centre in a telehealth consultation on 24 April 2020. Mc McKenzie gave a history of bullying at work and said that he had not seen a general practitioner or psychologist. On 27 April, Dr Mazhar noted that Mr McKenzie’s partner had been his patient since last year. Dr Mazhar and Mr McKenzie met for the first time on 4 May 2020 and Mr McKenzie said that he had been to Dr Hadi Rafi last year and was upset that he had not been treated well. Dr Mazhar recorded that Mr McKenzie had spoken to the case manager at iCare who “want backdated certs”.
Dr Mazhar continued to see Mr McKenzie regularly. In March 2021, Dr Mazhar noted that he refused to take antidepressants.
Mr McKenzie was referred to Ross Johnson, a psychologist, whom he saw for the first time on 1 May 2020. Mr Johnson’s notes appear in the file but there is no report. The notes record Mr McKenzie’s concern about his safety.
Curtain Raiser’s insurer asked Mr McKenzie to attend an examination by Dr T Ahmed, psychiatrist, which took place by telephone on 3 July 2020. The letter of instructions does not appear in the file and the material to which Dr Ahmed referred included the first factual investigation report.
Dr Ahmed recorded that Mr McKenzie said that his role was to oversee various aspects of the business. He said that Curtain Raiser was “wanting us to be the front gay guys” and they were given inappropriate tasks like going to facilities undercover and being asked to change bed linen which was insulting to someone of his experience. Dr Ahmed said that Mr McKenzie told him that he was a very high achiever “that everybody aspires to become.” Mr McKenzie gave examples of other inappropriate conduct including “being asked to terminate a guy even before orientation.” He said that he and his partner felt unsafe and he received emails and texts that he found threatening. They quickly left New South Wales because they felt under threat and overwhelmed with anxiety.
Dr Ahmed said:
“He and his partner felt increasingly unsafe. He said he would receive text messages and emails that he found threatening. When asked about examples, he said he was told that they may not be a good cultural fit. When I suggested this may not be consistent with bullying, he said he disagreed.”
With respect to his examination, Dr Ahmed said that Mr McKenzie said there was “a condensed amount of exposure to bullying.” Dr Ahmed was asked:
“Do you consider the worker has been angered, upset, or had a mere emotional response to the events in the workplace rather than a sustaining or aggravating a psychiatric disorder/ psychological injury?”

He answered:

“The claimant is consumed by anger and resentment at what he sees as mistreatment from his prior role. The nature of the mistreatment appears to be being given duties below what he deemed was appropriate. This is at odds with the grandiose self-image.”

Dr Ahmed did consider that Mr McKenzie satisfied the criteria for a diagnosis of adjustment disorder with mixed anxiety and depressed mood which had reached chronic levels. However, he said it was “highly unlikely that the primary contributor was anything unreasonable in his employment.” Dr Ahmed considered that Mr McKenzie could work 15 to 20 hours per week.
Mr McKenzie’s solicitors qualified Dr G Smith, psychiatrist, who reported on 9 March 2021 after a consultation by videoconference. Dr Smith reviewed many of the documents which form part of the Commission’s file. He obtained the history that after Mr McKenzie and Mr Farthing arrived in Broken Hill, Mr Smith became demanding and threatening. They found alarming issues at the properties and noted that many operational issues did not make sense. They felt anxious and fearful and saw a general practitioner who provided a certificate. After leaving Broken Hill, Mr McKenzie saw two doctors who “didn’t want to help.” Throughout 2019 and in early 2020 he barely left his caravan due to his symptoms. In April 2020, he saw Dr Mazhar and was referred to Mr Johnson. He was prescribed medication which he ceased after a time. Dr Smith noted that Mr McKenzie was anxious that his former employer not know his address.
Dr Smith diagnosed “persistent depressive disorder, with anxious distress, with intermittent major depressive episodes, with current major depressive episode.” He considered that employment with Curtain Raiser was the main contributing factor to that condition and that Mr McKenzie was totally unfit for work.

Documentary evidence

On 20 February 2019, Mr Martin, solicitor, of R D Martin and Co in Brisbane wrote to Mr Smith and stated that he had unilaterally sought to change the terms of Mr McKenzie and Mr Farthing’s employment when they arrived in Broken Hill, causing them significant stress in addition to an “already stressful move.” Mr Martin said that he had provided advice and spoken to Fair Work Australia. He said that his clients had incurred expense in moving to Broken Hill and “have little prospect of securing equivalent employment within the next six months.” Mr Martin said that he had provided advice about proceedings regarding breach of their employment conditions and made an offer to settle all claims for $100,000.
A desktop investigation report by Ms K Modlock of LKA Group dated 22 June 2020 contains screenshots from the social media pages of Mount William Olive Grove. An Instagram post dated 15 January 2019 refers to “our caretakers Glenn & Michael.” On 13 June 2019 a post about the harvest thanked a number of people including “Michael and Glenn for making the long processing days streamlined and fun.” In October 2019 a guest house at the property opened and in December 2019, two reviews referred to “Glenn and Michael” as hosts.
The remainder of the report dealt with Mr McKenzie’s own Facebook and Instagram accounts, which are marked private, and a previous business.
An email from the factual investigator to Curtin Raiser’s solicitor provided the mobile phone number on which the investigator had attempted to contact Mr McKenzie. It is the same phone number that appears in the ARD.

Dispute notices

Curtain Raiser’s insurer issued a notice under s 78 of the 1998 Act on 4 August 2020. It alleged that Mr McKenzie had not provided a statement in response to several attempts by its factual investigator and said that the only allegations against Curtain Raiser were those in the medical certificates and in the history provided to Dr Ahmed. It said that Mr McKenzie’s allegations were not corroborated by Mr Smith, Ms Caldwell or Ms Gowenlock which were that they attempted to provide training and induction and that no reason was given why Mr McKenzie did not participate. The insurer said that Mr Smith’s email dated 12 February 2019 was reasonable and professional and not threatening but on 13 February Mr McKenzie left the premises and did not return.
The insurer relied on Dr Ahmed’s statement that it was unlikely that the primary contribute to the injury was anything unreasonable in the employment and that employment was not a substantial contributing factor to the injury. The insurer said that the history provided to Dr Ahmed and the treating doctors had no factual basis and denied that Mr McKenzie suffered an injury. It gave notice that payments would cease.
The subsequent decision notices dated 31 August 2020 and 6 April 2021 did not raise any new issues. The latter notice denied liability for a permanent impairment claim.
In the alternative and in all three of its decision notices, the insurer relied on s 11A of the 1987 Act, relying on performance appraisal and/or discipline. Mr Grants’ submissions do not deal with s 11A at all and the issue therefore does not need to be considered.
A list of payments shows that Mr McKenzie was paid compensation from 13 February 2019 until 21 August 2020.

SUBMISSIONS

Mr McKenzie

Mr Carney of counsel prepared concise submissions on behalf of Mr McKenzie. He summarised the facts, noting that some of them were contested by Curtain Raiser.
Mr Carney said that Mr McKenzie’s case was that he and Mr Farthing were employed as joint general managers of the group of companies but that the employment was later changed by Mr Smith. He said that the men were asked to be “secret shoppers” at the premises outside Broken Hill and it was agreed their expenses would be paid, which suggests that the employment started before 11 February. They told Mr Smith that they had dogs. Both parties agreed that the house in Pell Street was unsuitable for dogs.
He said that on the next day Mr Smith sent an email changing the job descriptions for both men. Mr Carney said that Curtain Raiser’s evidence supports the contention that the roles were changed. There is also no dispute, he said, that Mr Smith interpreted the men leaving work and providing medical certificates as a resignation. Mr Smith also agreed that people had entered the property in Pell Street without the knowledge of Mr McKenzie and Mr Farthing so that there was a genuine apprehension that they were being observed. There is no evidence that the men were told that the house was for sale.
Mr Carney said that there is evidence that the events described by Mr McKenzie did occur and that as a result he suffered injury, referring to Attorney General’s Department v K[1]. It was Mr McKenzie’s perception that Mr Smith was being aggressive and menacing, referring to State Transit Authority v Chemler[2]
[1] [2010] NSWWCCPD 76.
[2] [2007] NSWCA 249.

Mr Carney said that Mr McKenzie’s case is supported by Dr Mazhar, his psychologist Mr Johnson and Dr Smith. The gap in treatment between April 2019 and April 2020 is supported by Mr McKenzie’s statement and the notes of Dr Mazhar which indicate that he was unable to obtain treatment due to his psychiatric symptoms and inability to find a doctor. Mr Carney noted that Dr Ahmed supported a psychiatric injury with a formal diagnosis.
He said the claim for incapacity is supported by the certificates and the report of Dr G Smith.

Curtain Raiser

Mr Grant prepared detailed submissions, commenting on many of the factual elements of the statements. In brief, he agreed that Mr McKenzie was employed from 3 February and said he arrived in Broken Hill shortly before 11 February. Mr Grant said he ceased work after less than 12 hours at the premises and left Broken Hill by 15 February. Mr Grant noted that Curtain Raiser denied that Mr McKenzie suffered injury or that employment was a substantial contributing factor to the injury. It denies that he is incapacitated and that he is entitled to medical expenses or permanent impairment compensation.
In setting out the chronology of events, Mr Grant began with the application dated 26 October 2018 which stated that the men were travelling with their dogs. He summarised the emails and text messages set out above.
Mr Grant said that the evidence established that the period of time in which any offending behaviour on the part of Curtain Raiser could have occurred was one and a half hours and to allege that Mr McKenzie was exposed to a pattern of behaviour was without foundation. The other evidence which referred to a pattern of conduct did not disclose the basis for the opinion, such as Dr Palakolanu’s medical certificate. Mr Grant said there was no credible evidence that the house had been broken into and that it appears the locks were changed after the men left Broken Hill. Mr Grant pointed out inconsistencies between the facts and the evidence in Dr Mazhar’s notes and those of Mr Johnson – the latter particularly with respect of to the allegation that the number plates on a Range Rover had been changed. Mr Grant said the complaint was not credible, if for no other reason that the company did not own a Range Rover.
In identifying the individual statements set out in Dr Ahmed’s report, Mr Grant said, among other things, that the suggestion that there was illegal money laundering though automatic teller machines was bizarre and that an analysis of the text messages and emails received does not support the allegation that they were threatening. When commenting on Mr McKenzie’s statement, Mr Grant said that the emails are what would be expected from a managing director to an employee and that the emails after 12 February were sympathetic.
Mr Grant referred to the evidence which he said refuted the statements of Mr McKenzie and Mr Farthing. He said that the evidence did not support several conversations with Mr Smith on the morning of 12 February and that it is more likely than not that they received the email at 10:52 and left the office straight afterwards, noting that Mr McKenzie had sought fast tracking of money due to them at 11:07. Mr Grant said the email was “businesslike but not unpleasant”.
Mr Grant made detailed submissions about the support for the facts in the statements of Mr Smith, Ms Gowenlock and Ms Caldwell in the other statements and the text messages and emails. He relied on Ms Gowenlock’s statement about what the men said when they returned to the office on 12 February and the fact an email was sent at 11:07 about wages. Apart from the evidence about what was said when they left, Mr Grant said that Ms Gowenlock’s evidence was not contradicted by Mr McKenzie and Mr Farthing.
With respect to the medical evidence, Mr Grant submitted that it was extraordinary that Dr Mazhar was prepared to supply Mr McKenzie with backdated certificates and that his opinion was flawed because Mr McKenzie’s account was flawed. He said there is no explanation why there was no treatment for 12 months. Mr Grant submitted that the opinions of Drs Ahmed and Smith are flawed because of the unsubstantiated allegations that the claim is based on.
With respect to injury, Mr Grant said:
“The claim the Applicant makes is unusual to say the least because it is alleged that two experienced individuals were both so affected by events that on any view occurred within hours rather than days or weeks and are said to have been caused by a person that they had never met and that they have both been left psychiatrically injured as a result to the extent that they are both totally incapacitated for work. That is to say that both the Applicant and his support person where [sic] injured in the same way.”

Mr Grant said that the confrontational activities could only have happened on the morning of 12 February if they happened at all. He said that the communication on the Monday afternoon was all by text message, the tone of which showed it was unlikely that anything occurred which caused stress. He said that the email on the following day seeking urgent reimbursement suggested that the men were not intending to stay long in the job, as was the subsequent email requesting reimbursement of wages and expenses be fast tracked. Mr Grant suggested that there may be a number of reasons why they might have wanted to leave.
With respect to Mr McKenzie’s reliance on Attorney General’s Department v K, Mr Grant said that Curtain Raiser denied that events on which Mr McKenzie relies happened. He said if Mr McKenzie had been injured, he would have sought medical attention sooner. In the absence of a credible reason, Mr Grant said I would find that there was no injury, that Mr McKenzie recovered before April 2020.

As to incapacity, Mr Grant said that I would not accept that Mr McKenzie was incapacitated because the medical practitioners were dependent on his history, which was flawed. He noted that Dr Ahmed considered that Mr McKenzie could work 15 to 20 hours per week. Mr Grant said that by the time Mr McKenzie arrived at the Olive Farm, he was capable of more activity than he was prepared to admit to. There is no medical support for incapacity after 9 November 2020 (based on the medical certificate dated 12 October 2020) except for the report of Dr Smith.

Reply submissions

In reply, Mr Carney noted that the letter from R D Martin and Co said that the demand was made because of the unilateral change of employment conditions and significant stress. Those complaints were consistent with the complaints made in these proceedings.
Mr Carney said that Mr McKenzie had explained why he did not seek treatment. There was a diagnosis and no alternative explanation was offered for his condition.
With respect to the termination of the male employee in Cobar, Mr Carney noted that the instruction to terminate was not denied by Curtain Raiser. Whether or not it was carried out was immaterial.
Mr Carney quoted the email from Mr Smith sent straight after Mr McKenzie told him that the men had ceased work. Mr Smith’s interpretation of them leaving as a resignation and the text message asking them to vacate the house could not, Mr Carney said, be seen as sympathetic. He said that the events on which Mr McKenzie relied did occur and the complaints were clear, consistent and unambiguous.

FINDINGS AND REASONS

Evidence

The date of injury pleaded is 13 February 2019 and Mr McKenzie relies on “a pattern of behaviour, events and working conditions in the course of his employment.” This case is unusual because Mr McKenzie says that he suffered a psychological injury in a very short time frame. That does not, of itself, prevent a finding of injury because it is possible to conceive of one interaction so significant as to cause a psychological injury.
Another unusual aspect of the case is that Mr Farthing suffered injury at the same time. Mr Farthing’s evidence is relevant but my task is only to determine if Mr McKenzie suffered an injury.
Because I am required to determine a series of factual issues, I note the standard of proof in Commission proceedings. The standard of proof on the balance of probabilities which applies in the Commission was described by the Court of Appeal in Nguyen v Cosmopolitan Homes[3] McDougall J, with whom the other members of the Court agreed, said[4]:
[3] [2008] NSWCA 246.
[4] At [55].
“(1)    A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist;

(2)     Where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact’s existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied;
(3)     Where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and

(4)     A rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue.”

The most useful evidence is found in the text messages and emails. They are contemporaneous and they convey what was actually said by Mr McKenzie and Mr Smith at the time it was said.
To determine the claim, I need to decide whether I accept the evidence of Mr McKenzie, supported by Mr Farthing or the Curtain Raiser witnesses.

It must be said that the standard of Curtain Raiser’s statements is generally poor. In particular, the first statements from Ms Caldwell and Ms Gowenlock were transcripts of telephone interviews which were never put into statement form. The second statements were answers to a series of questions in which they acknowledged that the transcripts were correct. They were both asked all of the same questions and each of them answered many questions by saying that they did not know or by setting out what was subsequently told to them. The way in which the statements were prepared means that none of Curtain Raiser’s witnesses are speaking in their own voice. The only evidence in any of those witnesses’ own words are Mr Smith’s texts and emails.
All of the statements were taken by telephone, except for Mr Smith’s first statement. It is remarkably short for a statement that is so crucial to the resolution of the issues. I accept that the statements in the 2021 report were taken during the pandemic but that does not provide an explanation for their brevity.
Because of the issues likely to arise, the investigation warranted a greater level of care and attention to detail. The terse statements in Curtain Raiser’s statements make it difficult to accept the evidence.
Mr Grant said that a series of factual issues were supported by both Ms Caldwell and Ms Gowenlock. In fact, each event is described by one or the other and there is no evidence that they were in the same place at the same time over the relevant period and only one of them had knowledge of the relevant event. Mr Smith was not in Broken Hill at all over that period.

The investigators did not obtain a statement from Mr McKenzie. He said he was not contacted. The report dated 30 September 2019 states that they contacted him several times but does not provide details of the number of attempts. It does not say whether the contact was by phone call or text message. An email dated 27 September 2021 informed Curtain Raiser’s solicitor that the phone number used was that in the ARD. Many people are reluctant to accept phone calls from an unfamiliar number. A text message or email might have alerted Mr McKenzie to the request for a statement. I was not taken to a terse email dated 28 August 2019 in Curtain Raiser’s evidence[5] but, there is no explanation of it – or evidence that it was sent. I am not prepared to draw a conclusion that Mr McKenzie was unwilling to speak to the investigator.
[5] Application to Admit Late Documents dated page 42.
Curtain Raiser’s evidence does not describe how long the company had owned the businesses or how they had been run before Mr McKenzie and Mr Farthing were employed. There are references in Mr Smith’s emails to building the business and getting it up and running as though at least some of the aspects of it were new. He said he had owned Curtain Raiser since 2011 but did not say how long the company had owned the businesses operated from Broken Hill. There were new aspects to some of the businesses – such as the pubs on the properties at Cobar and Broken Hill Outback Resort and possibly Tri-State Safaris. Others were not open all year, such as the underground hotel at White Cliffs. The evidence suggests that most of the businesses were short staffed and that staff had recently left.
The breadth of the general management role offered and the references to building and developing in the email dated 17 January 2019 do not suggest that Mr McKenzie and Mr Farthing were merely replacing staff who had left.
There is no dispute on the evidence that the only person in the office in Broken Hill was Lyndon, the IT manager. Ms Caldwell was at Broken Hill Outback Resort and Ms Gowenlock lived in Mildura. Mr Smith was based in Sydney. There is no evidence about other staff in Broken Hill. That suggests that the business was remarkably short staffed.
There are a number of factual matters about which the evidence of Mr McKenzie and Mr Farthing differs from Curtain Raiser’s evidence and which require resolution. The resolution of those issues is important because the evidence of Mr McKenzie and Mr Farthing conveys that events unfolded with a sense of urgency and, to some extent, chaos. That is also conveyed by the text messages and emails.
There are a number of small discrepancies between the evidence of Mr McKenzie and Mr Farthing but those differences show that they have not discussed the contents of the statements. The small differences which would be expected to result from slightly different recollections of past events give credence to their statements.
The tenor of Mr McKenzie’s evidence is that the men were asked to do things that were not within the scope of the employment they had accepted. He said that Mr Smith’s communication became erratic and abusive and that he felt confused, stressed and unsafe.

The dogs

In October 2018, Mr McKenzie and Mr Farthing applied for a job managing the caravan park at Warrawong, which I understand to be Curtain Raiser’s property at Wilcannia. In that application, they specifically mentioned their dogs. There is no evidence about the fate of that application at that time but it was that email and resume that Mr Smith used to contact them on 14 January 2019 by text message.
Only three days elapsed between Mr Smith’s text message and offer of employment and only four weeks from that text message until Mr McKenzie suffered injury. A number of telephone conversations clearly took place over that period but they are described in only general terms. None of the telephone calls are described in direct speech.
It is difficult to accept that the dogs would not have been mentioned in those conversations. After 8 February Mr McKenzie and Mr Farthing were travelling by caravan and the dogs were probably never far from them. They had been clearly mentioned in the application in October which Mr Smith had reread before offering employment.
Mr McKenzie said that the conversation took place on 9 February. Ms Caldwell said that she offered fencing material from the back of the resort to make the fences at the Pell Street property higher. Her evidence does not disclose when that occurred. I accept that it took place on 9 February.
I am satisfied that Curtain Raiser was likely to have been aware of the dogs before Mr McKenzie and Mr Farthing arrived in Broken Hill and certainly from the time of their arrival.

The accommodation

There is a disagreement about whether the property in Pell Street was suitable accommodation. Mr Smith said there was a large covered area for the caravan and that he was unaware of the dogs.
There is no evidence that Mr Smith told the men that the accommodation in Pell Street was temporary until after they had ceased work. It seems unlikely that Ms Caldwell would have offered fencing material if it was intended they would only stay for a short period.
In his first statement, Mr Smith said that he “was going to have them live there until we sorted out where best to place them.” There is no evidence that he told the men that.
There is no dispute that someone entered the house when Mr McKenzie and Mr Farthing were not there. Mr Smith said at 17.02 on 12 February that was likely to happen because the house was for sale. There is no evidence that he told the men that was the case before they moved in.

The roles

The question of the roles that Mr McKenzie and Mr Farthing accepted is important. Mr McKenzie said that the communication on 12 February was overwhelming and that was the reason for ceasing work. The most significant communication that morning was the email from Mr Smith setting out his expectations which clearly set out separate roles for the first time.
The list of tasks in Mr Smith’s email dated 17 January 2019 included Tri-State Safaris as part of that, but not as a separate role. There was a reference to talking about “jobs, roles and vision” but it is not clear from that email that the men were expected to take on different roles.
Ms Gowenlock said that they were employed to be general managers jointly. Her understanding is important because she was asked to train them. She later said that the roles were to be different.
The first contemporaneous reference to Mr Farthing being trained for Tristate Safaris was in a text message sent at about 2.00pm on 11 February, after the men arrived in Broken Hill. It is likely to have been received after they had been to see Ms Caldwell at Broken Hill resort. She said that occurred on the second day of induction but that is inconsistent with the evidence of other witnesses.
The request that Ms Caldwell go to Warrawong on “the following day” is consistent with Mr Smith’s request that Mr McKenzie and Mr Farthing return to the resort that evening to learn the closing procedures. The issue appears not to have been discussed earlier before Mr McKenzie went to speak to Ms Caldwell and the late notice confirms the air of disorganisation and chaos that surrounds all of the events.
The formal allocation of separate roles occurred in an email dated 12 February. Mr Smith said in his second statement that the role was always intended to be split but it was necessary to determine who had the better skill set for each role. Like much of his evidence, there is no explanation of that bald statement. In his second statement he said “we had discussed who was best to do this role.” Again there is no explanation and no detail of who was involved in the conversation.

The email correspondence from Mr Smith on the afternoon of 12 February and the following days is important because it reveals a number of different positions and apparent changes of mind, adding to the air of disorganisation. The references to the accommodation offered illustrate that. Immediately after being told that the men had made a medical appointment, he asked them to vacate his house. Three hours later he told them that there was a prospective buyer and asked them to move to the residence at the Tourist Lodge in Argent Street. Two days later he invited them to move back to the house in Pell Street, subject to entering into a rental agreement. He told them that cameras had been installed.
Mr Smith’s statements were prepared after the events and are less persuasive than the contemporaneous evidence.
The letter from R D Martin and Company dated 20 February was sent soon after the men left Broken Hill. Mr Grant said that it was inconsistent with a psychological injury. I do not accept that submission. The letter refers to a change in employment, which is consistent with the evidence of Mr McKenzie and says that the change caused significant stress. The lack of a claim for compensation in respect of a psychological injury is not necessarily inconsistent with Mr McKenzie’s case. The letter is short and there are many possible explanations for not seeking compensation at that time. It confirms that the men considered that the employment they were now asked to undertake was not what they had applied for.
I accept that the employment which Mr McKenzie and Mr Farthing accepted was as joint general managers of Out of the Ordinary properties and that Mr Smith’s email set out a change in the arrangement they understood they had entered into.

Payment of expenses

Though Mr Smith said that the employment did not commence until the men arrived in Broken Hill, Mr Grant accepted in submissions that it had commenced on 3 February 2019. The visits to other premises occurred in the course of their employment.
There is no instruction in Mr Smith’s texts that the men were asked to pay for their own alcohol on their visit to the properties outside Broken Hill as “secret shoppers”. The email asked them to “put it all on your credit card” and promised reimbursement. In his first statement, he said that he had paid for their expenses including alcohol. The tone of that evidence is that he accepted it was part of the agreement. In his first statement Mr Smith said that he had paid for sightseeing tours that he did not know about. No details were provided to explain what he meant.
Mr Grant said that the urgency with which the expense claims were lodged suggests that Mr McKenzie and Mr Farthing were not serious about staying in Broken Hill. However Mr McKenzie’s evidence that the expenses were lodged to meet the relevant pay run is not contradicted. I accept that was the reason for the request for urgency in Mr McKenzie’s email.
The expenses were approved by Mr Smith in an email on 12 February and paid. The complaint that payment for alcohol was not part of the agreement was made for the first time late that afternoon, after Mr Smith had sent a series of other emails.

Communication with Mr Smith

There is a distinct difference in the tone of Mr Smith’s text and emails before and after Mr McKenzie commenced the induction on 11 February, though a sense of urgency is evident in both. Mr McKenzie’s evidence that he was asked to go to Broken Hill Outback Resort and ask Ms Caldwell to go to Warrawong the following day is not refuted. Ms Caldwell said that she rang “the owner” after they left. That is consistent with the request that the men go back that evening to observe the closing procedures and the text message in which Mr Smith said “who will you call to help as the phone is playing up at Warrawong”. There is no evidence about why the request was not made earlier or why the detailed implications of Ms Caldwell going to Warrawong were not discussed.

On the following day Mr Smith sent an email saying that no reason was provided for not going to the resort on the previous evening. Mr McKenzie said that he told Mr Smith that the dogs had been inside the house all day and that they had worked since 8.00am.
The email from Mr Smith begins by rebuking Mr McKenzie and Mr Farthing for their attitude to the role. He said that he was setting out his expectations and made it clear that he expected that they would in future do anything he asked “that was within scope and legal”. He said that they needed to take time to understand the business then, somewhat inconsistently, listed a series of urgent tasks including recruitment which needed to be done on that day. He asked Mr McKenzie to go to Warrawong on the Thursday of that week then go on to White Cliffs. He set out his expectations of Mr Farthing which were also different from the original communications.
Mr McKenzie alerted Mr Smith that the men were feeling unwell due to their stress in response to changes in the roles offered. Ms Gowenlock’s evidence about collecting their charging cable and leaving abruptly is consistent with that.
Within a very short time, Mr Smith emailed back, accepting their resignation and asking for the return of the house keys and phone. Mr McKenzie responded that they had not resigned and communications continued throughout the afternoon. By that afternoon, Mr Smith told them that the house was a temporary solution and for sale. He then gave them seven days to leave the premises and to move to the manager’s unit at other premises where dogs were not permitted inside.
The communication from Mr Smith over the course of the afternoon of 12 February was frequent and inconsistent. Within a very short time of the men leaving the office he had purported to accept their resignation and asked them to leave the accommodation provided.
However, two days later, and after receiving medical certificates certifying the men unfit for two weeks, Mr Smith assumed in his correspondence that the men would be returning to work and on the following day wished them a speedy recovery. He then told them he had changed the locks to the Pell Street property and proposed a rental agreement. He sent another email that evening asking for the return of the phone and asking when they would return to work.
That correspondence could not be said to be reasonable, containing as it did a number of changes of position and firm demands. Mr McKenzie said he felt scared and that the things he had noticed started to play on his mind. He saw a doctor and was asked to return for review but left Broken Hill before the proposed review date.

Mr Grant said that there was no evidence that Mr Smith threatened to sue the men because they had the key to one of his vehicles. That submission is incorrect. The threat is clearly set out in the email dated 14 March 2019.
There remains a dispute about whether number plates were changed from one vehicle to another. It cannot be resolved merely by accepting Curtain Raiser’s evidence that they had Nissan Patrols rather than the Range Rovers described to by Mr McKenzie. Both are large four wheel drive vehicles and one may look much like another. It is the one dispute in the proceedings which cannot be resolved by reference to the contemporaneous evidence. Mr McKenzie also said that he was scared and things played on his mind.

Injury

Roche DP considered authorities in Attorney General’s Department v K[6] and said that the following principles can be drawn from them:
[6] [2010] NSWWCCPD 76; (2010) 8 DDCR 120.

“(a)    employers take their employees as they find them. There is an ‘egg-shell psyche’ principle which is the equivalent of the ‘egg-shell skull’ principle (Spigelman CJ in Chemler at [40]);

(b)     a perception of real events, which are not external events, can satisfy the test of injury arising out of or in the course of employment (Spigelman CJ in Chemler at [54]);

(c)     if events which actually occurred in the workplace were perceived as creating an offensive or hostile working environment, and a psychological injury followed, it is open to the Commission to conclude that causation is established (Basten JA in Chemler at [69]);

(d)     so long as the events within the workplace were real, rather than imaginary, it does not matter that they affected the worker’s psyche because of a flawed perception of events because of a disordered mind (President Hall in Sheridan);

(e)     there is no requirement at law that the worker’s perception of the events must
have been one that passed some qualitative test based on an ‘objective measure of reasonableness’ (Von Doussa J in Wiegand at [31]), and

(f)      it is not necessary that the worker’s reaction to the events must have been ‘rational, reasonable and proportionate’ before compensation can be recovered.”

The events on which Mr McKenzie relies are real events. I prefer the evidence of Mr McKenzie and Mr Farthing that they understood they were employed as joint general managers and that the email on 12 February was the first time it was stated that their roles would be different.
The events occurred over a period of two days and in particular, over most of the day on 12 February. I consider that the email communication during that afternoon was part of the causation of an injury deemed to have been suffered on 13 February 2019. I do not accept M Grant’s submission that a period of only one and a half hours was relevant.
The totality of the emails which Mr Smith sent on 12 February, read with Mr McKenzie’s evidence, create an impression of volatility. Whether or not Mr Smith swore at Mr McKenzie on the telephone, I am satisfied that his telephone communication was similarly unsettling. Mr McKenzie’s statement conveys an ongoing sense of fear resulting from those interactions.
There is no dispute that the remainder of the events occurred, even though the witnesses see them differently. The medical evidence supports a finding that those events caused Mr McKenzie to suffer a psychological injury.
On 13 February 2019 Dr Palakolanu certified Mr McKenzie unfit for work as a result of the events leading up to that date. He then saw Dr Rani in Victoria but the certificates provided do not appear in the file (those from Dr Rani in the Reply relate to Mr Farthing). Mr McKenzie saw another general practitioner who was unable to help him. There is then a gap in the medical evidence until Mr McKenzie began to see Dr Mazhar and Mr Johnson in 2020. The gap is explained by Mr McKenzie and his reason is accepted by his treating practitioners and Dr Smith. Importantly there is no reference in the medical evidence to any other possible cause for his condition.
Mr Grant said that I would not accept Mr Mazhar’s opinion because his notes did not accurately reflect the facts. Dr Mazhar’s notes were not prepared for medico-legal purposes and should be read in light of the comments by Basten JA in Mason v Demasi[7]. His Honour said:
[7] [2009] NSWCA 227 at [2].

“First, the trial judge was invited to discount the appellant’s oral testimony on the basis of accounts given to various health professionals, which appeared inconsistent either with each other, or with her oral testimony, or both. The difficulties attending this kind of exercise should be well-understood; as explained in Container Terminals Australia Ltd v Huseyin [2008] NSWCA 320 at [8], such apparent inconsistencies may, and often should, be approached with caution for the following reasons, amongst others:
(a) the health professional who took the history has not been cross-examined about:

(i) the circumstances of the consultation;
(ii) the manner in which the history was obtained;
(iii) the period of time devoted to that exercise, and
(iv) the accuracy of the recording;

(b) the fact that the history was probably taken in furtherance of a purpose which differed from the forensic exercise in the course of which it was being deployed in the proceedings;
(c) the record did not identify any questions which may have elucidated replies
(d) the record is likely to be a summary prepared by the health professional, rather than a verbatim recording, and
(e) a range of factors, including fluency in English, the professional’s knowledge of the background circumstances of the incident and the patient’s understanding of the purpose of the questioning, which will each affect the content of the history.”

The factual discrepancies do not persuade me that Dr Mazhar’s opinion should be disregarded. The spelling errors in the notes confirm they were taken quickly.
Dr Ahmed examined Mr McKenzie by telephone in March 2020. He did set out the information he received in a very general way and he was provided with the factual investigation. Dr Ahmed also said that he told Mr McKenzie that it was unlikely the conduct to which he was exposed amounted to bullying. That was not a matter for him to determine, particularly when he relied primarily on Curtain Raiser’s evidence. The history of the condition that Dr Ahmed obtained is consistent with Mr McKenzie’s evidence – that he was overwhelmed with anxiety and rarely left his caravan.
Dr Ahmed provided short answers to a series of questions. The first question was presented in leading form. The form of the question was in appropriate because it invited Dr Ahmed to say that Mr McKenzie was angry or upset rather than suffering an injury. He was given a copy of Curtain Raiser’s evidence and relied on it to say that employment was not a substantial contributing factor to the injury based on his opinion that it was “highly unlikely… that the primary contributor was anything unreasonable in his employment.” He was asked if the injury was predominantly caused by reasonable action with respect to “performance and warnings” and agreed that it did. That question was also framed so as to suggest the answer.
The assumptions relied on by an expert must represent a “fair climate” for the opinion expressed. In Paric v John Holland (Constructions) Pty Ltd Samuels JA said[8]:

“I have myself looked at the evidence and looked at the hypothetical facts and while I would agree that in some respects the material put does differ in terms from what was proved, all in all I would regard it as open to the tribunal of fact to consider that it was a fair foundation and remains a reasonable support for the opinions which were sought and given…
It is a question of whether the hypothetical material put to the expert witnesses represents a fair climate for the opinions they expressed. I do not think there is any requirement that the matter put is precisely consonant with the material provided; and certainly it cannot be contended that there was no evidence upon which the opinions could be based.
Discrepancies may be fatal; in some cases even slight discrepancies may be fatal; in other cases even broad departures are not likely to affect the force of the expert opinion. Moreover, it is for the tribunal of fact to assess this factual basis. In the present case it seems to me that there was a fair climate in which the expert views could properly flourish, and certainly it was open to the learned judge to come to that conclusion.”

[8] [1984] 2 NSWLR 509, 510.

The High Court dismissed an appeal from that decision.[9]
[9] [1985] HCA 58; (1985) 62 ALR 85.
I do not consider that the material put to Dr Ahmed provided a fair climate in which to express his opinion. He was given limited material and asked leading questions. He was not asked for a further opinion as Curtain Raiser’s insurer obtained further information. His report is not probative of the issues with respect to injury.
Mr McKenzie’s solicitors qualified Dr Smith. He was given a more complete history than Dr Ahmed and he took a more detailed history in the course of his examination. His opinion is that Mr McKenzie developed anxiety and depression in the context of abusive and threatening behaviour by his employer. He considered the fact that Mr McKenzie did not receive treatment for a year and accepted that he barely left his caravan due to impaired functioning.
I prefer Dr Smith’s opinion to that of Dr Ahmed. I am satisfied that Mr McKenzie suffered a psychological injury as a result of his interactions with Mr Smith on behalf of Curtain Raiser in the days leading up to 13 February 2019.

Incapacity

Dr Smith’s evidence supports a finding that Mr McKenzie is totally incapacitated for work.
Dr Mazhar has continued to certify Mr McKenzie totally unfit. Dr Mazhar’s notes can only describe Mr McKenzie’s condition at the time of his consultations. They do not provide any assistance in determining the question of injury but they do support a finding that he remains incapitated for work.
Curtain Raiser’s case is that Mr McKenzie worked on the Olive Farm from the time he left Broken Hill until early 2020. It relies on references in reviews on social media in support of that contention.
Mr McKenzie said that the men returned to the property after leaving Broken Hill and stayed in their caravan. In June 2019 they attended an event in the olive press room and for a period Mr McKenzie managed the Airbnb bookings at the property for which he was paid. A letter from his solicitors dated 25 August 2021 confirms he was paid for that work.
Curtain Raiser’s investigation report contains photographs taken by Mr McKenzie and posted by the proprietor to Instagram on 15 January 2019. Mr McKenzie said that they were looking after the property at that time and left the area to go to Broken Hill in early February. It does not prove that they worked from 15 February as Curtain Raiser alleged.
The men were thanked in an Instagram post on 13 June 2019 for helping to make the harvest fun. Without more, I am not persuaded that they did any more than was set out in Mr McKenzie’s statement.
Another post shows that the farmhouse at the property was available for bookings from 18 November 2019 and two reviews refer to Mr McKenzie and Mr Farthing. That is also consistent with Mr McKenzie’s evidence. He said that he was unable to continue working at the property, particularly when the demands on him were increased. That is supported by Dr Smith’s evidence.
The evidence of Dr Smith that Mr McKenzie has no current work capacity. Mr McKenzie claimed compensation from 28 August 2020 to 11 August 2021, the latter date being the end of the second entitlement period. Dr Smith’s opinion is supported by Dr Mazhar and Mr Johnson in the period before the date of his report.

Even if I was to accept that Mr McKenzie had some current work capacity, Curtain Raiser did not rely on evidence or make submissions about the amount that Mr McKenzie could earn or what suitable employment might be. Dr Ahmed considered that he was able to work 15 to 20 hours per week but there is no evidence which would permit me to make findings in respect of the matters set out in the definition of suitable employment in s 32 A of the 1987 Act.
I find that Mr McKenzie has had no current work capacity for the period in which compensation is claimed. There is no evidence that his capacity has changed since 11 August 2021.

The parties agree that pre-injury average weekly earnings were $1,538.45. Eighty per cent of that amount is $1,230.77. I order Curtain Raiser to pay Mr McKenzie weekly compensation of $1,230.77 from 28 August 2020 to 11 August 2011.
I order Curtain Raiser to pay Mr McKenzie’s s 60 expenses.
I remit the matter to the President for referral to a Medical Assessor to assess Mr McKenzie’s permanent impairment.

[2022] NSWPIC 9

10 January 2022