State of NSW v Jeffery & Anor

[2000] NSWCA 171

Reported Decision: (2000) Aust Torts Reports 81-580

New South Wales

Court of Appeal

CITATION:	State of New South Wales v Garry Donald Jeffery & Ors [2000] NSWCA 171 revised - 1/09/2000
FILE NUMBER(S):	CA 041004/98; DC 945/96
HEARING DATE(S):	11/07/2000
JUDGMENT DATE:	1 September 2000
PARTIES :	State of New South Wales v Garry Donald Jeffery & Ors
JUDGMENT OF:	Spigelman CJ at 1; Sheller JA at 2; Foster AJA at 3

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	945/96
LOWER COURT JUDICIAL OFFICER :	Robison DCJ

COUNSEL:	M. Finnane QC / V. Hartstein - Appellant M. Cranich SC / B. Ingram - 1st Respondent P. Neil SC - 2nd Respondent
SOLICITORS:	L.V. Knight - Crown Solicitor - Appellant Taylor & Scott - 1st Respondent Nevill & Edwards - 2nd Respondent
CATCHWORDS:	Liability for psychiatric injury - Negligence - Assessment of damages.
LEGISLATION CITED:	Crown Proceedings Act 1988
CASES CITED:	Deatons Pty Ltd v Flew (1949) 79 CLR 370 Prior v State of New South Wales (CA unreported 23 October 1998) Lloyd v Grace Smith & Co [1912] AC 716 Uxbridge Permanent Building Society v Pickard [1939] 2 KB 248 Tiger Nominees Pty Ltd v State Pollution Control Commission (1992) 25 NSWLR 715 at 721 Canadian Pacific Railway Co v Lockhart [1942] AC 591 Commonwealth of Australia v Connell (1986) 5 NSWLR 218 at 221 Mt Isa Mines Ltd v Pusey (1971) 125 CLR 383
DECISION:	1. The appeal be dismissed with costs; 2. The cross-appeal be dismissed with no order as to costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 41004/98
DC 945/96

SPIGELMAN CJ
SHELLER JA
FOSTER AJA

Friday, 1 September, 2000

STATE OF NEW SOUTH WALES v Garry Donald JEFFERY & ANOR

JUDGMENT

1 SPIGELMAN CJ: I agree with Foster AJA.

2 SHELLER JA: I agree with Foster AJA.

3 FOSTER AJA: This is an appeal from a decision of Judge Robison given in the District Court of New South Wales on 13 November, 1998. The plaintiff, Barry Donald Jeffery ("Mr Jeffery" or "The plaintiff") had originally sued the State of New South Wales ("the State") which had then joined the Police and Community Youth Clubs NSW Limited ("PCYC"). After the proceedings had commenced before his Honour, leave was granted to the plaintiff to join the PCYC as a second defendant. His Honour found in favour of the plaintiff against the State but dismissed his claim against the PCYC. He also dismissed the State's cross-claim against the PCYC. By this appeal the State seeks the setting aside of the verdict and judgment of the plaintiff against it. It also seeks the setting aside of the verdict and judgment of the PCYC against it on its cross-claim. In the event of the verdict of the plaintiff being upheld it seeks to recover against the PCYC the full amount of that verdict.

4 It will be necessary to consider the causes of action brought by Mr Jeffery against the State and the PCYC. Before doing so, however, I find it convenient to set out, by way of background, certain facts.

5 Background

The plaintiff was born on 24 June, 1958. At the time of the trial he was thirty-nine years old, married with five dependent children. He and his wife had separated some seven years before but, apparently maintained contact. He provided financial support for his wife and children. He had left school at third form level and had had, thereafter, mostly labouring jobs. In approximately 1990 he had found employment as a project officer with the PCYC at its Blacktown office. After working there for eight to ten months he applied for a transfer to a position in the head office of the organisation as a result of Senior Sergeant Buchanan, with whom he was acquainted, having made him aware that such a position was coming up. His application was successful and he commenced working in a special projects unit at the head office in Parramatta, about November 1991.

6 The PCYC consisted, in effect, of a federation of fifty-three clubs throughout the State of New South Wales operating within a company structure. The unit in the Parramatta office was staffed by two police and three civilians. The two police officers were Sergeant Spiteri and Senior Constable Gerrie. The other civilian staff were Michael Hardy and Judy Taylor. Judy Taylor played no part in the proceedings. Michael Hardy was a witness.

7 It appears that the unit which the plaintiff joined at the head office was a fairly specialised one. It did not undertake all of the activities of an ordinary PCYC but was more involved in fund raising and public relations work for the police, in relation to youth activities and crime prevention. The plaintiff took part in the public relations work and also in the fund raising. This involved him in travelling outside the office, holding interviews with persons and organisations who might assist with funds, and also undertaking general public relations work on behalf of the police. He was very happy in this employment and, so the evidence establishes, had a pleasant outgoing personality which was suited to the work. Unfortunately, however, problems developed with Sergeant Spiteri. Sergeant Spiteri told him when he arrived at the unit that he, Sergeant Spiteri was "the boss". Indeed, this was so, in as much as the Sergeant was in charge of the group of five. However, he commenced to assert his authority over the plaintiff in a hostile and harassing way. The evidence establishes that he, in fact, made the plaintiff's life a misery. He regularly found fault with the plaintiff's work where it was inappropriate to do so. He engaged in vulgar abuse of the plaintiff. He made threatening remarks to him, frequently asserting that he would have the plaintiff sacked, so that he and his family would "end up in the gutter." He also made disparaging and humiliating remarks publicly about the plaintiff's relationship with his wife.

8 The evidence clearly establishes that the Sergeant's bullying tactics had an adverse psychological effect upon the plaintiff. From being a happy outgoing person he became stressed and anxious.

9 A great deal of the harassment of the plaintiff by Sergeant Spiteri occurred in the work environment, when other staff members were not present. There was, however, one significant occasion when Mr Hardy, who was a retired police officer, was a witness. Sergeant Spiteri was, apparently, irritated by some perceived transgression of the plaintiff of a minor nature and subjected him to a long drawn out tirade of personal abuse. Mr Hardy was concerned about the Sergeant's behaviour and the effect it was having upon the plaintiff. He advised the plaintiff to complain. The plaintiff refused to do so because he was afraid of the Sergeant. He also told Mr Hardy that if Mr Hardy made a complaint on his behalf he, the plaintiff, would refuse to back him up. He said that he would deny that the incident had, in fact, occurred.

10 So far as the making of complaints was concerned, there was an established system within the police force, which would have been an appropriate avenue for formal complaint about the Sergeant's conduct. There was, however, no established mechanism for the making of complaints to the PCYC, which was the plaintiff's employer. It was also the employer of Mr Hardy. Complaints could be made to senior officials of the PCYC but there was no established policy or mechanism in place to facilitate the making and processing of such complaints. A number of other significant incidents of harassment were referred to in the evidence and accepted by his Honour. I shall not refer to them. They were not contested. Sergeant Spiteri was not called as a witness.

11 In January 1994 the plaintiff attended Dr Kazmierczak, his general practitioner, because of symptoms which could be related to the stressful conditions of his work. In February of that year he finally made a complaint about Sergeant Spiteri's conduct to Senior Sergeant Buchanan, who was the police zone commander for the area, and whom he knew and trusted. In that month he had been hospitalised in Wellington hospital because of a reaction to stress occasioned by the Sergeant's conduct. It appears that Sergeant Spiteri was questioned about his conduct. His reaction was to speak privately to the plaintiff in a threatening manner.

12 The plaintiff's complaint was, however, taken up by the police. He was further interviewed by officers connected with the Internal Affairs Division of the Police Force. It appears that there was an investigation conducted into the conduct of Sergeant Spiteri, not only in relation to the plaintiff's complaints but also in relation to other matters. Sergeant Spiteri left the Parramatta office in April 1994 and did not, thereafter, return. However, after his departure, various incidents occurred which the plaintiff attributed to ongoing hostility on the part of the Sergeant. He received anonymous threatening phone calls; a brick was thrown at his house; his car was deliberately damaged. Although he could not prove that the Sergeant or persons acting on his behalf were responsible for these incidents, they added to his psychological problems.

13 Even though the Sergeant had been removed from the plaintiff's workplace, the psychological problems that had commenced while he was there continued to interfere with the plaintiff's ordinary enjoyment of life and his ability to do his work. The medical evidence indicates that he had numerous attendances at his local practitioner for anxiety related problems, for which he received appropriate medication. He was referred to a psychiatrist, Dr Roland, who treated him regularly but who died in 1996. His treatment was undertaken, thereafter, by another psychiatrist, Dr Chaudhary.

14 The plaintiff has had a history of difficulty with work because of his psychological problems. He lost his job with the PCYC, because of recurrent lengthy absences. He has had a patchy and unsatisfactory employment record since.

15 I turn now to consider the cases presented at trial and his Honour's decision.

16 The case at trial

The plaintiff sued the State, as first defendant, pursuant to the Crown Proceedings Act 1988. He sued the PCYC as second defendant. His claim against the two defendants was stated in his amended statement of claim as follows:-

"3. At all material times, the First Defendant conducted and had the care, control and management of the Police Service in the State of New South Wales.
4. At all material times, the Plaintiff was employed by the Federation of Police Youth Clubs and carried out his duties under the care and control of the First Defendant itself, its servants or agents and/or the Second Defendant, itself, its servants or agents.
5. At all material times between November 1990 and on or about April 1994, whilst carrying out his duties under the care and control of the First Defendant itself, its servants or agents, and or the Second Defendant itself, its servants or agents the Plaintiff was subjected to psychological and/or verbal harassment and abuse by the First Defendant itself, its servants or agents and or the Second Defendant itself, its servants, or agents, thereby causing the Plaintiff to suffer.
6. The Plaintiff's pain and suffering, injuries, loss and damage was caused by the negligence of the First Defendant itself, its servants or agents and/or the negligence of the Second Defendant itself, its servants or agents."

17 Because of the way in which the case developed at trial and on appeal, it is also necessary to set out the particulars of negligence as alleged in the statement of claim. These are as follows:-

" PARTICULARS OF NEGLIGENCE OF THE FIRST DEFENDANT
(a) Permitting the Plaintiff to be psychologically and/or verbally harassed and abused.
(b) Failure to act on suspicions and/or complaints to prevent the above said harassment and/or abuse.
(c) Failure to take any or any adequate precautions to prevent the servants or agents of the Defendant from continuing to carry out the above said harassment and abuse.
(d) Failure to remove the relevant servants or agents of the Defendant from employment with the New South Wales Police Service.
(e) Failure to respond adequately or at all to complaints concerning the above said harassment and abuse.
(f) Failure to supervise or adequately supervise the work of the Plaintiff.
(g) Failure to supervise or adequately supervise the relevant servants or agents of the Defendant.
(h) Failure to prevent a working environment in which psychological and/or verbal harassment and abuse existed.
(i) Permitting a working environment to exist in which psychological and/or verbal harassment and abuse existed.
(j) Res ipsa loquitur.
PARTICULARS OF NEGLIGENCE OF THE SECOND DEFENDANT
(a) Permitting the Plaintiff to be psychologically and/or verbally harassed and abused.
(b) Failure to act on suspicions and/or complaints to prevent the above said harassment and/or abuse.
(c) Failure to take any or any adequate precautions to prevent the servants or agents of the Defendant from continuing to carry out the above said harassment and abuse.
(d) Failure to remove the relevant servants or agents of the Defendant from employment with the New South Wales Police Service.
(e) Failure to respond adequately or at all to complaints concerning the above said harassment and abuse.
(f) Failure to supervise or adequately supervise the work of the Plaintiff.
(g) Failure to supervise or adequately supervise the relevant servants or agents of the Defendant.
(h) Failure to prevent a working environment in which psychological and/or verbal harassment and abuse existed.
(i) Permitting a working environment to exist in which psychological and/or verbal harassment and abuse existed.
(j) Res ipsa loquitur.
(k) Failure to devise, institute and maintain a safe system of work.
(l) Failure to devise, institute and maintain a policy for the promotion(prevention?) of psychological and/or verbal abuse and harassment of employees."

18 Res ipsa loquitur was not relied upon in the trial or on appeal. The plaintiff also relied upon the following further claim:-

"Further or in the alternative, the Plaintiff's pain and suffering, injuries, loss and damage were caused by the isolated acts of negligence of servant or agents of the First Defendant and/or Second Defendant itself, its servants or agents, namely Sergeant Edward Spiteri."

19 It is to be observed that the allegations of negligence and the particulars are couched in wide terms. The care and control of the plaintiff in the performance of his duties for the PCYC are placed alternatively with the Police Service or the PCYC, his employer. Also, the verbal harassment and abuse of the plaintiff by Sergeant Spiteri is said to have occurred whilst the Sergeant was the servant or agent of the Police Service or, alternatively, as the servant and agent of the PCYC. Moreover, there is clearly considerable overlap in the pleaded particulars of negligence of each defendant.

20 It is clear that there is an assertion of vicarious liability for negligent acts of Sergeant Spiteri towards the plaintiff, such liability being in either the State (via the Police Service) or the PCYC. Also, it would appear, that the claim against the PCYC was based upon its duty of care to the plaintiff, as his employer.

21 His Honour, in a detailed judgment, found that, at all relevant times, Sergeant Spiteri was acting as a police officer in his control and supervision of the plaintiff. His Honour reached this conclusion after a consideration of the evidence bearing upon the way in which the day to day activities of the unit were conducted during the period 1991 to 1994. It is clear that he preferred this evidence to documentary evidence tendered on behalf of the State bearing upon the roles of the police officers involved in the work of the PCYC.

22 In this regard, reliance was placed by the State upon a document, Exhibit 5, which was a "Statement of Agreement" between the Commissioner of Police and the Federation of Police-Citizens' Youth Club on the duties and responsibilities owed by the Police and Citizens in the conduct of the affairs of the Federation. Part of this agreement read as follows:-

"It is further agreed that participation by Police in the affairs and activities of the Federation will be by way of appointment of such Police to the Federation. Upon such appointment Police will be assigned as Managers and Assistant Managers of individual Clubs or to specific duties within the Federation.
It is further agreed that in respect to the duties and activities of the Federation those Police appointed to the Federation will be responsible to the Council of Management of the Federation. Such responsibility will be through the Federation President, Secretary and other appropriate company officers.
It is further agreed that in respect to the duties of Police Officers appointed to the Federation in their roles as Constables of Police no restrictions will be placed or attempted to be placed by the Federation upon the exercise of their powers as such Constables while they are attached to the Federation. This clause relates to powers conferred by both common law and State law.
It is further agreed that in respect to the duties of Police Officers appointed to the Federation in their roles as members of the Police Force they will remain responsible to the Commissioner in accordance with the normal chain of command."

23 Another very lengthy document, Exhibit 10, was tendered. This was a "Report of the NSW Ministerial Inquiry into Police and Community Youth Clubs in New South Wales" produced in late 1997 by a firm of private consultants. His Honour appears to have received no assistance from this document. It has been adverted to in the appeal but it is not clear what reliance can be placed upon it in relation to the issues between the parties in the period 1991 to 1994. His Honour attributed no weight to it in his deliberations. In this, I consider that he was correct.

24 So far as the first document is concerned, it appears that it was entered into at a time before the PCYC was incorporated, the agreement being with the unincorporated Federation. His Honour was of the view that, whatever the original intention conveyed by the terms of the agreement, that intention had been significantly departed from before the period of the plaintiff's employment by the PCYC. His Honour formed the view, on the oral evidence in the case, that the operation of the unit in which the plaintiff was employed, was, for practical purposes, a police operation, although the plaintiff's actual employer was the PCYC. That company paid his salary and was his employer under the plaintiff's contract of employment. However, the day to day control and supervision of the plaintiff's work in the unit was conducted by the Police Service, through Sergeant Spiteri who was in control of the unit. In his judgment, his Honour made a number of findings to this effect.

25 In this regard his Honour placed considerable reliance upon the evidence of Acting Inspector Crook who was very familiar with the running of the PCYC in the relevant period. His Honour summarised his evidence in this regard, stating

"He says both police and civilians worked for the Club but the day to day workings were run effectively by the police who take a pro-active role in the Club. The civilian component, on his evidence, is to conduct administration within the organisation."

26 The police involved in the Club were paid by the Police Service and could be rostered on for general duties in other areas. His Honour also accepted the Inspector's evidence to the effect that the Police Service between 1991 and 1994 supervised the management of the Club through a superintendent appointed by the Commissioner of Police. The police officers involved in PCYC wore their ordinary uniforms while doing their work both inside and outside the Club premises. So far as complaints were concerned against such a police officer, they were dealt with through "appropriate police channels". They were "not referred to the civilian, or lay side of the organisation" which did not have "power or authority to deal with complaints regarding the conduct of police officers."

27 Elsewhere in his judgment, his Honour referred to "the very clear evidence before me, that for all intents and purposes insofar as the plaintiff's workplace environment was concerned that was run by the police."

28 His Honour found against the State in respect of the injury occasioned to the plaintiff by Sergeant Spiteri's conduct. He did so with reference to three of the particulars of negligence set out above, which he found to have been established. He made findings as follows:-

"The plaintiff's position insofar as the particulars of negligence are concerned against the first defendant in my view falls within firstly, particular (b). That is, the failure to act on suspicions and or complaints to prevent the harassment and or abuse. I remind myself of the evidence of Sergeant Gerrie, he then a senior constable and the observations that he made at that time. I remind myself that this was a closely knit work place. I draw a comfortable inference that certain actions undertaken by Sergeant Spiteri were not simply observed by the plaintiff but by others. At the very least that amounts to a suspicion. The plaintiff, in my view, should succeed against the first defendant in relation to (b) and also in relation to (g) and (h) of the particulars of negligence, a failure to supervise or adequately supervise the relevant servants or agents of the defendant, in this case Sergeant Spiteri. I also find there was a failure to prevent a working environment in which psychological and or verbal harassment and abuse existed. These were no "pranks" as such. This was a concerted course of conduct undertaken by a person, a police officer in the service of the State against this plaintiff. I consider that the plaintiff should succeed against the first defendant for those reasons."

29 Despite the fact that the plaintiff was employed by the PCYC and that, consequently, that defendant had a non-delegable duty of care towards him, his Honour found that there had been no breach of that duty. He found that, so far as the PCYC was concerned it was "a unique situation". As far as it was concerned "there was no foreseeability". It had "no day to day control of the area in which the plaintiff worked." He said:-

"The plaintiff, became, in effect, a servant of the police. This is a rather exceptional case. The plaintiff came under the care and control of the police officers who were superior to him."

In another passage he said:-

"This is a unique case involving this plaintiff in his particular environment which was controlled by the police, he being a servant of the police.. in this particular case."

30 It is not entirely clear whether his Honour was of the view that these findings absolved the PCYC from its employer's duty to the plaintiff to provide him with a reasonably safe working environment. However, even if the continuance of this duty was contemplated in the unique situation found by his Honour, it is clear that his Honour was of the view that the plaintiff also failed against the PCYC on the issue of causation. He found that, even if the PCYC had had in place a policy and a structure for dealing with harassment in the workplace, the plaintiff would not have availed himself of it. This was made clear by his reaction, referred to above, to Mr Hardy's suggestion that he should report the matter of Sergeant's Spiteri's behaviour. Had the PCYC fulfilled its duty to him by providing him with a viable means of complaint to it, he would not, on the evidence, have utilised it.

31 Consequent upon his findings, the trial judge held the State liable to the plaintiff but found a verdict in favour of the PCYC on the plaintiff's claim against it. The cross-claims were decided accordingly.

32 The Appeal

The State appealed against his Honour's decision. The notice of appeal contained a number of grounds. However in argument before the Court these were distilled into four main propositions. Mr Finnane QC, dealing with the tortious conduct of Sergeant Spiteri said:-

"The first submission I make is that we are not responsible for his duties within the organisation, unless he is actually executing the office of a constable, and he is not executing the office of a constable when he is working as an administrator.
Secondly, if the Police Service is responsible, it is not responsible for anything that he does outside the course of his employment. Thirdly, what occurred, his acts and the consequences were not foreseeable. Fourthly, the employer was the organisation which had the duty to set up the system. It is not the Police Service."

33 The first submission related to the purported allocation of roles in the agreement referred to above. I am satisfied that his Honour was entitled to ignore the terms of this document, in the face of the evidence from, particularly, Acting Inspector Crook, as to the way in which the day to day activities in the unit, occurred. The evidence established that the Sergeant acted, in all respects, as a police officer in charge of a police operation and not as an administrator in the employ of PCYC. As such, he exerted authority and control over Mr Jeffery in his work inside and outside the head office premises. He was responsible to the Police Service and at all stages amenable to its discipline. No control was exercised over him by the PCYC. The first submission, in my opinion, fails.

34 The second submission involves the question of vicarious liability. The trial judge, in finding against the State, did not find it necessary to resort to this doctrine. However, it clearly arose as on issue in the pleadings and it has been accepted as a live question in the appeal. Although, in his dealings with Mr Jeffery, the Sergeant was acting as a police officer with the result that, at common law, the State could not be vicariously liable for his actions, the situation had been changed by legislation, the Law Reform Vicarious Liability Act, 1983, of which s. 8(1) provides:-

"Notwithstanding any law to the contrary, the Crown is vicariously liable in respect of the tort committed by a person in the service of the Crown in the performance or purported performance by the person of a function (including an independent function) where the performance or purported performance of the function:
(a) is in the course of his service with the Crown or is an incident of his service (whether or not it was a term of his appointment to the service of the Crown that he perform the function); or
(b) is directed to or is incidental to the carrying on of any business, enterprise, undertaking or activity of the Crown."

35 There was no dispute that Sergeant Spiteri was relevantly "a person in the service of the Crown" and that his conduct towards Mr Jeffery was tortious. It was submitted, however, that the sergeant's threatening and abusive acts were not committed in the performance or purported performance of a function in the course of his service with the Crown, and, thus, the State could not be vicariously liable for them and their consequences under this section.

36 In support of this submission reliance was placed upon Deatons Pty Ltd v Flew (1949) 79 CLR 370, the case in which a hotel proprietor was held not to be vicariously liable for the action of a barmaid in throwing beer and a glass at the plaintiff. This case and later cases in the same area were considered by the Court in Prior v State of New South Wales (CA unreported 23 October 1998) in which Sheller JA (Handley JA agreeing) said of it:-

"That case illustrated the difficulty in which a plaintiff may be placed if the plaintiff's case against the employer goes no further than demonstrate an unprovoked and unjustified assault by the employee, for, as Dixon J said at 380, the assault "might have proceeded from private spite on the part of the [employee] or from some other cause quite unconnected with the [employee's] occupation or employment." For that reason, in that case, the Full Court of the Supreme Court set aside the verdict: ((1949) 49 SR (NSW) 210). However, Jordan CJ had thought (see 222) that there might be a reasonable inference that the barmaid's action was an instinctive act of self defence against an assault upon her while she was doing what she was employed to do and that on that basis it would be open to the jury to find that the employer was liable. This suggestion the High Court rejected. Dixon J at 381 observed that the barmaid did not throw the beer or the glass in the course of maintaining discipline or restoring order." His Honour continued:
"The general and somewhat indefinite position was relied upon that the barmaid was there to deal with customers and with situations and this was the manner in which she dealt with the plaintiff and the situation which he caused. It is not a case of a negligent or improper act, due to error or ill judgment, but done in the supposed furtherance of the master's interests. Nor is it one of those wrongful acts done for the servant's own benefit for which the master is liable when they are acts to which the ostensible performance of his master's work gives occasion or which are committed under cover of the authority the servant is held out as possessing or of the position in which he is placed as a representative of his master (see Lloyd v Grace Smith & Co [1912] AC 716; Uxbridge Permanent Building Society v Pickard [1939] 2 KB 248".
At 381-2 Dixon J said that in truth the act of the barmaid was:
"an act of passion and resentment done neither in furtherance of the master's interests nor under his express or implied authority nor as an incident to or in consequence of anything the barmaid was employed to do. It was a spontaneous act of retributive justice. The occasion for administering it and the form it took may have arisen from the fact that she was a barmaid but retribution was not within the course of employment as a barmaid."
In Tiger Nominees Pty Ltd v State Pollution Control Commission (1992) 25 NSWLR 715 at 721 Gleeson CJ, with whom Mahoney JA and Campbell J agreed, adopted as the relevant distinction for determining whether responsibility for a tortious act, or in that case vicarious criminal responsibility, attached to an employer, the distinction "between a mode, albeit improper, of doing that which the employee is employed to do and conduct which is outside the scope of the employee's employment; compare Canadian Pacific Railway Co v Lockhart [1942] AC 591 and Deatons v Flew". In Commonwealth of Australia v Connell (1986) 5 NSWLR 218 at 221 Glass JA, with whose judgment Samuels and Priestley JJA agreed, said:
"I would conclude that conduct by an apprentice sailor is within the scope of his service or duty or authority if it is authorised expressly or impliedly or is incidental to what he is authorised to do even though it may be performed in an unauthorised way. If, however, it is not authorised expressly or impliedly and is not so connected with authorised conduct as to be an improper mode of performing it, it is an independent unauthorised act and is outside the scope of his service."

37 In my opinion the Sergeant's conduct in the present case was no more than an unauthorised mode of performing an authorised role, that of directing and supervising Mr Jeffery in the performance of his work. It was not a series of independent unauthorised acts outside the scope of his service.

38 The State must be vicariously liable for those acts. In my opinion this submission also fails.

39 I should add that liability for Sergeant Spiteri's conduct carries with it liability to compensate Mr Jeffery for injury and loss which should reasonably have been foreseen by the sergeant as a consequence of that conduct. The type of abuse to which the sergeant subjected the plaintiff would, in my view, clearly carry with it the possibility of psychological injury. Such harm was well within the area of foreseeable risk (Mt. Isa Mines Limited v Pusey (1971) 125 CLR 383).

40 The third submission is that the Police Service (and hence the State) could not reasonably have foreseen that Sergeant Spiteri, its employee, would behave in such a way to Mr Jeffery as to cause him psychological injury. It was contended that there was nothing in the evidence to indicate that those responsible for appointing the Sergeant to his position in the unit should have been aware that he might behave in the way that he did towards the plaintiff or that there was anything which might reasonably produce suspicion that the Sergeant was in fact behaving in such a way. There was, indeed, no evidence pointing to any prior knowledge on the part of any relevant superior officers in the Police Service that the Sergeant had previously behaved in such a way or given any indication that he might do so. However, his Honour, as already indicated, found the Police Service liable for failing to act on suspicions as to the Sergeant's conduct and in failing to supervise the Sergeant and in failing to prevent a working environment in which psychological and/or verbal harassment and abuse existed.

41 It is clear that his Honour based these findings upon inference that the Police Service must necessarily have been aware of the sergeant's behaviour towards the plaintiff, irrespective of any prior knowledge that he might be prone to behave in such a way. The sergeant was in charge of the unit and the other police officer, Sergeant Gerrie was second in charge. There existed an established system of complaints within the Police Service, whereby behaviour of the type engaged in by Sergeant Spiteri should have been reported. The evidence indicated that such behaviour would have been regarded as quite unacceptable. Sergeant Gerrie was witness to at least two significant occasions of harassment, one of a particularly cruel kind, by the Sergeant of Mr Jeffery. He denied being a witness to any other incidents. In this regard, it would appear, that his Honour formed the view that there would have been more than the two incidents observed by Sergeant Gerrie, although he denied that this was so. It must be noted, of course, that the plaintiff's case did not focus upon any allegedly negligent failure, for which the Police Service would be vicariously liable, of Sergeant Gerrie to fulfil his duty to report Sergeant Spiteri's conduct. That was not a case sought to be made. His Honour, however, seems to have drawn a broad inference that there would have been sufficient awareness of what was going on in the unit, reasonably to raise suspicions in superior officers that a situation existed, which would warrant investigation and subsequent correction. Extensive submissions both written and oral have been presented to the Court on this topic. In view of my opinion that the State is clearly vicariously liable for the sergeant's conduct, I do not find it strictly necessary to reach a decision in respect of this part of his Honour's judgment. I am, however, of the view that this area of decision involved so many questions of fact dependent upon his Honour's view of the reliability of witnesses, that it would not be proper to interfere with the decision that he has reached. Accordingly, in my view, this submission should also be rejected.

42 The State's final submission is that it was the duty of the PCYC to set up and maintain a safe system of work for the plaintiff and that it was in breach of that duty; the consequence being either that the State owed no duty to the plaintiff or that the PCYC was in breach of its own duty and, consequently, should be required to contribute to the plaintiff's award of damages.

43 The first of these contentions would, it seems, require a finding that Sergeant Spiteri was not, relevantly, employed by the Police Service in his activities in the unit, but was pro hac vice employed by the PCYC. I am satisfied that this submission cannot be maintained upon the evidence. At all times the Sergeant was acting in his employment as a policeman by the Police Service.

44 The second contention overlapped with the PCYC's submission that, in the circumstances, it had no duty of care towards the plaintiff or that, if it did, no breach of that duty was established. In this context, of course, Mr Jeffery also asserts that the PCYC had a relevant duty of care to him and, in the circumstances, had breached that duty. It is convenient to consider these contentions together.

45 Although statements made by his Honour in his judgment, which have been referred to already, might carry the suggestion that his Honour made a finding that Mr Jeffery, pro hac vice, was an employee of the Police Service in the performance of his duties in the unit, I am satisfied that a reading of the whole of his Honour's judgment indicates that, although he found that the Sergeant had the supervision and control of the plaintiff's work in the unit, the plaintiff nevertheless remained an employee of the PCYC and subject to its overall care and control. His contract of employment was with the PCYC and he was paid by that organisation.

46 I am satisfied, therefore, that the State (through the Police Service) did not owe to the plaintiff an employer's duty of care, although it was liable, vicariously, for the Sergeant's negligent behaviour towards the plaintiff. The plaintiff, in the circumstances, continued to be owed the employer's non-delegable duty of care by the PCYC, whilst performing his role in the unit.

47 His Honour accepted the existence of this duty of care but held that no breach had been established. He found this to be so in the "unique" situation that prevailed in the unit and its operation.

48 It was a small unit of a specialised kind. Both the officer-in-charge and the second in command were police officers. The plaintiff and the other civilian member, Mr Hardy, were at the same level of seniority. The overall command of the PCYC was vested in a police superintendent who wore "two hats" and who, it would appear, was remote from the day to day operations of the unit. Other senior members of the PCYC, who were civilians, were not involved, in any way, in the operations of the unit and were located in offices at a distance from it. In all these circumstances, it, obviously, became a significant question in the case as to what was required of the PCYC to discharge its obligation to the plaintiff to supply him with a reasonably safe working environment. When this question achieved some focus in the case it became an issue as to whether the PCYC should have provided the plaintiff with an independent mechanism or structure which he could utilise for the purpose of making complaints as to untoward behaviour towards him in the workplace.

49 This question had to be considered in the context that the unit was predominantly a police oriented and controlled operation and that there was, in existence, a fully established procedure within the Police Service for the making of such complaints. Furthermore, Mr Jeffery ultimately utilised this very procedure. It is clear that he was, at all times, aware of its existence, as was Mr Hardy who had, himself, been a police officer. Moreover, it was the appropriate mechanism to utilise for making complaints against the police. The civilian administration of the PCYC had no power to discipline a police officer such as Sergeant Spiteri.

50 There was, therefore, a significant question whether, in the circumstances of the existence of the formal police apparatus of complaint, there was an obligation imposed upon the PCYC to set up, for the benefit of civilians employed in the unit, a corresponding mechanism.

51 As I read his judgment, his Honour did not find it necessary to decide this question because he was satisfied that even if such a procedure had been set up, the plaintiff, during the period in which Sergeant Spiteri remained in the unit, would not have utilised it.

52 The evidence in this area was sparse. There was no evidence as to the nature of the complaint mechanism which might have been put in place in fulfilment of the duty of care of the PCYC to the plaintiff. In these circumstances a question necessarily arose as to whether the plaintiff had discharged an onus of proof. Was it a matter of common knowledge that anti-harassment policies and corresponding complaint mechanisms existed and could be utilised, or was it necessary that evidence be given, on behalf of the plaintiff, that such systems existed and that an appropriate mechanism could have been instituted by the PCYC which would have been of assistance to the plaintiff? This question was not, as I understand it, decided by his Honour. He found it unnecessary to do so.

53 Was his Honour in error? I have come to the conclusion that he was not. If such a complaint system were in existence during the period when Sergeant Spiteri was harassing the plaintiff, it would only have availed him if he had had recourse to it. He did not avail himself of the existing police procedures in the relevant period. Would he have sought help from a PCYC civilian mechanism if it were in place? He gave no evidence that he would have done so. It is submitted by the appellant, that the very existence of such a complaint mechanism would have encouraged him to use it to his advantage. His Honour was not prepared to draw this inference. He declined to do so in circumstances where the evidence established that the plaintiff had point blank refused to permit Mr Hardy to make a complaint on his behalf, saying that he would deny that there was any cause for complaint, should Mr Hardy make it. He was not prepared to make a complaint himself because he was in fear of the Sergeant.

54 I am not prepared to find that his Honour was in error in reaching this conclusion. He had, of course, the usual advantage of seeing and hearing the witnesses involved. He was quite entitled, in my view, on the probabilities, to find that the plaintiff would not have made a complaint even if the PCYC had put in place a complaint mechanism.

55 In these circumstances, in my opinion, the appellant's appeal against each respondent should be dismissed with costs.

56 There remains for consideration the cross-appeal brought by the plaintiff on the question of damages. It is submitted that these were inadequate.

57 It is necessary to refer briefly to a factual issue which was the subject of some discussion in the appeal. Reference has already been made to the fact that, after the departure of Sergeant Spiteri, there were some incidents which occasioned the plaintiff considerable concern. His Honour made no finding that Sergeant Spiteri was responsible for these incidents. They had a marked effect upon the plaintiff's emotional condition. It was submitted, accordingly, on behalf of the appellant, that this aspect of Mr Jeffery's injuries could not be the responsibility of the appellant. However, his Honour was satisfied, on the medical evidence, that the Sergeant's behaviour prior to his departure had had a deleterious effect upon the ability of Mr Jeffery to cope emotionally with incidents of such a kind, with the result that their effect upon him was causally connected with the Sergeant's prior tortious behaviour. I can see no error in this approach.

58 It was submitted on behalf of Mr Jeffery that his Honour's award of damages was manifestly inadequate, in relation to the amount allowed for general damages and for future economic loss.

59 This was an unusual case and, quite obviously, presented difficulties in the assessment of damages. Evaluation of the plaintiff and his general motivation was a significant factor in determining the extent of any ongoing psychological damage resulting from the workplace harassment. His Honour obviously sought assistance from the medical reports and oral testimony of the doctors who had treated and examined the plaintiff for the purpose of the litigation. It is clear that his Honour formed the view that the plaintiff was well motivated and had a positive outlook on his problems. Although he was having difficulties with employment, his Honour formed the view that these were not insuperable and that the plaintiff's comparatively young age and his desire to overcome his problems would stand him in good stead. It was a matter for the trial judge to form as clear a view as possible, in an unusual and somewhat confusing case, of what the plaintiff's past pain and suffering had been and of what the future held.

60 It is possible that the figure of $35,000 given for general damages, together with an allowance for interest is somewhat low. However, I am not able to say that it is so low as to indicate a wholly erroneous estimate of this aspect of the plaintiff's damages.

61 As to future economic loss, it is clear that his Honour has approached this aspect of the assessment on the basis of providing what has been called a "cushion" or "buffer" for the plaintiff. He has not accepted submissions that the plaintiff's future earning capacity has been permanently damaged. Again, it is possible that the amount allowed is a fairly low estimate. However, his Honour, in his lengthy judgment has exposed his thinking in relation to the medical evidence and his view of the plaintiff's prospects. I cannot detect any error in his approach. In the circumstances, I am satisfied that it was within the ambit of a proper exercise of judicial discretion for his Honour to choose such a "buffer" figure. It could have been higher, but I am not persuaded that an appellable error has been demonstrated.

62 Accordingly, in my opinion, his Honour's award of damages should not be disturbed.

63 I would propose the following orders:-

1. The appeal be dismissed with costs.
2. The cross-appeal be dismissed with no order as to costs.
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