Rich & Anor v CGU Insurance Ltd, Wilkie v Gordian Runoff Ltd & Anor

The High Court of Australia considered appeals from decisions of the Supreme Court of Victoria in two separate proceedings, *Rich & Anor v CGU Insurance Ltd* and *Wilkie v Gordian Runoff Ltd & Anor*. Both cases concerned the interpretation of section 40(3) of the *Wrongs Act 1958* (Vic), which provides that a person who suffers damage as a result of the death of another person is entitled to recover damages from any person whose breach of duty of care caused the death. The primary dispute in *Rich* involved a claim by the widow and daughter of a deceased worker against the worker's employer and its insurer, while *Wilkie* concerned a claim by the widow of a deceased man against the driver of a vehicle that collided with the deceased's vehicle.

The central legal issue before the High Court was whether section 40(3) of the *Wrongs Act 1958* (Vic) created a cause of action for nervous shock in favour of dependants who had not witnessed the death or its immediate aftermath, but who suffered psychiatric injury as a result of being informed of the death. The court was required to determine the scope of the duty of care owed by a wrongdoer to dependants in such circumstances, and whether the foreseeability of psychiatric injury was a sufficient basis for establishing liability under the section.

The High Court, by majority, held that section 40(3) did not create a new cause of action for nervous shock, but rather extended the existing cause of action for wrongful death to permit dependants to recover damages for psychiatric injury. The majority reasoned that the common law principles governing nervous shock claims, including the requirement of foreseeability of psychiatric injury, remained applicable. They found that the relevant wrongdoer owed a duty of care to the dependants if it was reasonably foreseeable that their conduct could cause psychiatric injury to a dependant of the deceased. The court affirmed that the test for foreseeability was objective and did not require the wrongdoer to have foreseen the precise manner in which the injury occurred.

The appeals were dismissed. The High Court affirmed the decisions of the Supreme Court of Victoria, finding that the dependants in both cases had established a valid cause of action for nervous shock under section 40(3) of the *Wrongs Act 1958* (Vic).