O'Donovan v Western Australian Alcohol and Drug Authority

[2014] HCATrans 134

[2014] HCATrans 134

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth   No P4 of 2014

B e t w e e n -

ANNE O’DONOVAN

Applicant

and

WESTERN AUSTRALIAN ALCOHOL AND DRUG AUTHORITY

Respondent

Application for special leave to appeal

GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO PERTH

ON FRIDAY, 20 JUNE 2014, AT 12.37 PM

Copyright in the High Court of Australia

MR A.S. MORRISON, QC:   Your Honours, I appear with my learned friend, MR N.F. MORRISSEY, for the applicant.  (instructed by Bradford & Co)

MR D.R. CLYNE:   May it please the Court, I appear for the respondent.  (instructed by Jarman McKenna)

GAGELER J:   Yes, thank you.

MR MORRISON:   Your Honours, the applicant had in her favour findings, which remain unchallenged, that have seen more than a coincidence that after she complained to her manager that her rosters were unilaterally changed, and a finding by the trial judge that she had been unfairly treated and there had been a breach of the conditions of her employment without proper consultation.  She also had the benefit of findings that she told the human resources manager, that her health was being affected and she felt, in her words, “very, very stressed”, and that she was required to comply with an unlawful and inappropriate rostering of work.  She said in writing to her employer she felt victimised, intimidated and bullied.  Her evidence was accepted at first instance.

GAGELER J:   As to how she felt?

MR MORRISON:   As to how she felt, but as to what she had said in that regard.

GAGELER J:   Yes.

MR MORRISON:   So that she had communicated those issues and those concerns about the stress, about unlawful and inappropriate rostering, about victimised, intimidated and bullied.  The trial judge accepted all of that and found a breach.  The trial judge then went on to find causation.  He found that as a consequence she suffered major depressive disorder with severe melancholia, chronic and treatment resistant, which was a consequence of her employment.  Accordingly, causation in this case was never in issue.

KEANE J:   Well, no, there is no question about the link between employment and her problem, but it is another thing altogether to identify some relevant breach of an obligation that caused it.

MR MORRISON:   Yes.  Well, breach in that sense, but could I address that directly, your Honour, in a moment?  The trial judge found that management took reasonable steps to respond to her complaints, but on his findings they did actually nothing specifically related to her complaints at all, he found no step which was peculiar to her, and his Honour was merely referring to a general improvement of the management structure for all employees, which was a reference to sending managers away on what was rather unfortunately called a “bullying course”.

The Court of Appeal, though the matter was raised in ground 5, did not deal specifically with that issue of whether or not any action should have been taken, but there is a good reason for that.  If you do not get past foreseeability then there is nothing to respond to, and foreseeability was for that reason the focus in the Court of Appeal, because it was really the ground upon which the applicant failed.

GAGELER J:   How do you deal with what appears on one view to be the critical finding of fact on the point of foreseeability that one sees at page 109 of the application book about line 40 quoted in the Court of Appeal, but quoting from the trial judge?

MR MORRISON:   Yes.  Can I deal with it in this way?  The Western Australian Court of Appeal thought the trial judge was entitled to find that psychiatric injury was not reasonably foreseeable, notwithstanding the evidence that we have just referred to a moment ago in relation to improper and inappropriate treatment, complaint about that treatment and disclosure of being very, very stressed, and of being intimidated, victimised and bullied.  Now, the Court of Appeal said that the information that we have just referred to did not convey any reason for the employer to suspect the possibility of future psychiatric injury.

The test applied, we say, by the Court of Appeal has the effect of requiring a worker to demonstrate symptoms of illness before it will be found that the necessary level of foreseeability is there and, in practice, this means the illness has to be developed before it is a foreseeable consequence.  Now, there is supposed in this context to be a high duty of care to employees, and that is referred to in Koehler v Cerebos, and I will come back to that and the proposition that I was just referred to a moment ago, and also in Czatyrko v Edith Cowan University, there is nothing novel in that, because the element of control which an employer has over an employee’s work environment provides good reason for imposing a high duty of care.  But, we say, why is it not foreseeable that if an employer mistreats an employee, psychiatric injury may occur.

Now, in this case, there was no evidence of the employer taking any meaningful steps in relation to this employee to avoid the consequences of its own actions and the trial judge’s findings establish that the applicant was faced with circumstances in which she was quite powerless.  In those circumstances, the purported application of what was said in Koehler in respect of the objective foreseeability test, we say, is a misunderstanding and misapplication of what this Court said in Koehler.  Can I take you in that context to Koehler at paragraph 41?  There, this Court said:

The conclusion that the employer had no reason to suspect that the appellant was at risk of psychiatric injury is the reason upon which the Full Court’s conclusion hinged.  Here [in Koehler] there was no indication (explicit or implicit) of any particular vulnerability of the appellant.  As noted earlier, she made many complaints to her superiors but none of them suggested (either expressly or impliedly) that her attempts to perform the duties required of her were putting, or would put, her health at risk.  She did not suggest at any time that she was vulnerable to psychiatric injury or that the work was putting her at risk of such an injury. 

In the present case, she said her health was being affected and his Honour accepted that.  She said she was very, very stressed.  His Honour accepted that.  She said, in writing, that she felt victimised, intimidated and bullied and his Honour accepted that she had put that in writing.  So we say that Koehler was a clear case of nonfeasance, if one wishes to draw that distinction, whereas we are dealing with a case of misfeasance.  The application of Koehler as a basis for suggesting a lack of foreseeability is simply misplaced in circumstances where there was positive evidence of complaint and acceptance of that evidence by the trial judge.

GAGELER J:   Is it a correct finding of fact or, at least, as I do not understand it – as I understand your case it is not challenged as a finding that there was no material available to the defendant that should have alerted it to a specific risk of psychological or psychiatric injury.

MR MORRISON:   No, that is squarely challenged, because that forms part of foreseeability.  We say, as we said in the Court of Appeal – because the Court of Appeal dealt really only with foreseeability, it was the only thing that was debated there.  We said that the material that was before the employer was material which put this case in a totally different class from Koehler.  For Koehler, which was a case where there was no indicia that this particular employee was going to be stressed more than other employees, has no relationship to a case where the employer has both positively mistreated an employee, and has unlawfully rostered her off when it should not have, and has been told that her health is affected by the employee, and has been told she is very, very stressed.  She has complained specifically in relation to her mistreatment.

That put it in a different category, and the application both by the trial judge and the Court of Appeal of Koehler, we say, is simply a misunderstanding or misreading of what this Court had said in relation to a case where, in Koehler, there was no indicia of the sort there are in this case.  Can we add to that that, just by very brief reference to a Victorian case, that of Justice Dixon in Swan v Monash Law Book Co‑operative, there foreseeability in a bullying case was accepted on significantly slighter evidence than here, and similarly, in Wolters v University of the Sunshine Coast, the Queensland Court of Appeal, also in a bullying case, had no difficulty in finding foreseeability.  We say in this case ‑ ‑ ‑

KEANE J:   That is a case where there is bullying in the sense that other employees are subjecting the plaintiff to mistreatment and the negligence lies in failing to take steps, the absence of which gives rise to a foreseeable risk of injury.  How do you make – how do you fit that analysis to this case?  I mean, your client makes complaints about the work that she was required to do, or the ‑ ‑ ‑

MR MORRISON:   She complained about her treatment, a very different matter.

KEANE J:   Well, treatment in the sense of the tasks she was required to do?

MR MORRISON:   No, she was complaining about being very, very stressed by the way in which she was being treated in relation to her complaints about management issues. 

KEANE J:   Okay.  So it is her complaints about the way the enterprise is being managed?

MR MORRISON:   No, her complaints were about the way she and other employees were being treated by management.

KEANE J:   In the sense that they were abused?

MR MORRISON:   In the sense that when she complained to management, her rosters were unilaterally changed to her significant disadvantage.  When she complained to management, she found herself stood down and it was subsequently realised that that was a breach of the conditions of her employment.

KEANE J:   So to address this foreseeable risk, it would have been addressed by reversing the management decisions?  Is that what would have had to happen?

MR MORRISON:   In significant measure, the positive adverse decisions made by management were seen by the trial judge as being causative in that sense of the depressive disorder.

KEANE J:   So to alleviate what is said to be the foreseeable risk, management would have had to reverse its decisions to accommodate your client’s preferences in terms of the roster.

MR MORRISON:   It was a specific management decision contrary to their usual practice which, in a sense, singled her out in relation to the roster and the standing down from employment was wholly unnecessary because the manager had misunderstood what was required.  So these were not things which were part of a general management system, rather they were directed at someone who may have been perceived to be making a nuisance of herself in relation to complaints.  That was the genesis of the issue between her and management.  But that is why she then speaks to the human resources manager and says, my health is affected, I am feeling very, very stressed, what I am being asked to do is unfair and is, in one respect, unlawful.  She then writes and says I am being victimised, intimidated and bullied because I have taken up the cudgel on behalf of other employees.

KEANE J:   Well, as to that, there is the finding at the top of page 109 in paragraph 51 where the trial judge found:

Nothing in her letter was capable of being interpreted, expressly or impliedly, that she was suffering ill‑health or harmful levels of stress.

That is the finding that stands, as I understand it, unchallenged.

MR MORRISON:   Well, no, because what was the subject, both of challenge in the Court of Appeal and here, is the significance of the findings the trial judge did make in respect of her saying she was very, very stressed, she was intimidated, victimised, bullied, and her health was affected.  Those were findings he accepted, and he found her to be a witness of truth.  That being the case, there was a basis upon which the Court of Appeal should then have considered on an objective test whether that material made psychiatric injury foreseeable, unlike Koehler where in Koehler the only question was whether generally stressful work for all employees ought to be foreseen as likely to have that potential effect.  In this particular case they were particular factors.

GAGELER J:   Can we just go to the last sentence in paragraph – it is at page 109, line 42, this is the trial judge speaking:

I am satisfied that there were no signs, express or implied, of the possibility of psychiatric injury.

Now, do you accept that as a finding of fact, do you challenge that finding of fact or, if ‑ ‑ ‑ 

MR MORRISON:   It was challenged squarely in the Court of Appeal and it is challenged here.  It is a conclusion rather than anything else, but it is a conclusion based, we say, upon a misreading of what this Court said in Koehler.  In the passage we took your Honours to that was a case – Koehler was clearly a case where there was a lack of such evidence.  In this case there was significant evidence accepted by his Honour at first instance which meant that it invalidated that comment and, we say, that is absolutely fundamental.

GAGELER J:   Well, the difficulty is your notice of appeal does not disclose any challenge to any finding of fact, and yet it seems to be at the core of your case that pivotal findings of fact by the trial judge are to be challenged.

MR MORRISON:   Well, we would respectfully say that the appeal relates to foreseeability.  Foreseeability necessarily depends upon the factual findings.  We are content to rely upon his Honour’s findings as to what happened, rather than his conclusion which says that none of that changes the situation from Koehler.  That is a matter of conclusion or opinion.  It is not a factual finding we need challenge because we are content with the trial judge’s findings as to what happened and what she said and what was done to her.  Those factual issues are not a problem.

KEANE J:   But it is one thing to say that she was making it clear she was unhappy and was feeling unwell.  That can stand with the finding that, nevertheless, there were no signs, express or implied, of the possibility of psychiatric injury.

MR MORRISON:   But how can ‑ ‑ ‑

KEANE J:   Because these are matters of degree.  When workers complain that they are feeling stressed and it is affecting their health, that may or may not convey that they are at real risk of psychiatric injury.  The trial judge did not accept that it went as far as you needed to go and, in fact, he found against you on that point, and you did not succeed on appeal in having that finding upset.

MR MORRISON:   We would respectfully say that that conclusion, which was the subject of challenge on appeal, is the very matter which goes to the heart of foreseeability here and if you do not accept that where the trial judge has accepted injustice in rostering, mistreatment, unfair treatment, breach of conditions of employment, as being something which takes it outside the range of Koehler where there were no ‑ expressly no indicia, and she has in addition to that put them on notice her health was being affected and she is very, very stressed, in those circumstances the use by the first

instance judge and their Honours in the Court of Appeal of Koehler as a basis for saying it is not foreseeable, is simply wrong.  Koehler was very clearly distinguishable.

True it is that it is inevitably a matter of degree to some extent, but this was a case where the extent of mistreatment of the employee, her response to the employer put her case in a very different category from Koehler and one which ought to have been recognised.  If this case stands on the Court of Appeal judgment, it put Western Australian law in a quite different situation from the way in which these matters are being clearly treated in Victoria and Queensland, and we would say displays a misunderstanding or a misreading of what this Court said in Koehler.  Koehler was a very different case, and that is fundamental to what we are saying.  We do not need to alter the findings of fact.  We do need to alter his Honour’s conclusion on the facts he found.  That is where we say he fell into error and we say the Court of Appeal repeated that error.  May it please the Court.

GAGELER J:   Yes, thank you very much, Mr Morrison.  Mr Clyne, we will not need to hear from you.

We are not persuaded that the applicant’s prospects of success on appeal are sufficient to warrant the grant of special leave.  Special leave to appeal is refused with costs.

The Court will now adjourn till 3.30 pm Eastern Standard Time.

AT 12.59 PM THE MATTER WAS CONCLUDED