State of Victoria v Stichling
[2014] VSC 62
•3 March 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW & APPEALS LIST
No. S CI 2013 03191
| STATE OF VICTORIA | Appellant |
| V | |
| SHERRIE STICHLING | Respondent |
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JUDGE: | RUSH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 December 2013 | |
DATE OF JUDGMENT: | 3 March 2014 | |
CASE MAY BE CITED AS: | State of Victoria v Stichling | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 62 | |
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APPEAL FROM DECISION OF MAGISTRATES’ COURT – Compensation claim for mental injury by employee - Rejection of claim by employer – Whether reasonable management action taken in a reasonable manner – Delay by employer in communicating disciplinary outcome - Magistrates’ Court awarded compensation to employee – Error of law – Finding not open on evidence – Appeal allowed – Matter remitted for rehearing – Section 82(2A) Accident Compensation Act 1985.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Dr T.J.F. McEvoy with Mr R. Kumar | Minter Ellison |
| For the Respondent | Mr R. Gorton QC with Mr J. Ferwerda | Maurice Blackburn |
HIS HONOUR:
Introduction
The appellant appeals orders of the Magistrates’ Court, Latrobe Valley Civil Division, made on 13 May 2013. The appeal is brought pursuant to s 109 of the Magistrates Court Act 1989 on a question of law.
The respondent at the Magistrates’ Court hearing contended that a disciplinary process conducted by the appellant extended over an unreasonable period of time and, as a consequence, she suffered a mental injury for which she was entitled to compensation. The appellant contended there was no entitlement to compensation, as any injury was caused by management action taken on reasonable grounds and in a reasonable manner. The Magistrate found there was an unexplained delay of 11 weeks in the disciplinary process, that the appellant’s management action had not been conducted in a reasonable manner, and the delay had contributed to the respondent’s injury. The Magistrate determined the respondent was therefore entitled to weekly payments of compensation and medical expenses under the Accident Compensation Act 1985 (“the Act”).
The appellant contends the Magistrate made findings that were not capable of being found on the evidence.[1]
[1]Notice of Appeal Ground 1(a), (b).
Some background is necessary for an understanding of the issues on appeal.
Background and facts, Magistrates’ Court hearing
The respondent was employed by the appellant as a disability support worker. In the course of her employment, on 14 February 2010, there was an incident involving a person suffering from a disability in the care of the respondent and other employees of the appellant. This person was left on a roadside in Pakenham by himself to find his own way back to a community residential facility in Moe. The Magistrate found the incident was serious, and that the safety and welfare of this person was placed in jeopardy as a consequence of the actions of the respondent and other employees of the appellant involved in the incident.[2] The respondent was suspended with pay from her employment with effect from 18 February 2010 pending review and investigation.
[2]Reasons [20].
Upon the completion of the review, investigation and disciplinary process, on 4 October 2010, a workers injury claim form was submitted to the appellant by the respondent. The respondent claimed she suffered from depression, and that the circumstances of her suffering this injury were that:
“I was stood down for seven and a half months, I was witness to an incident whilst on duty, after seven and a half months I have been diagnosed with severe depression with an adjustment disorder.”
The claim was rejected by the appellant on 4 November 2010. The appellant contended the respondent suffered from a mental injury of a type which did not attract an entitlement under the Act. The reasons for the rejection by the appellant were, in part:
“The legislation states that any mental injury caused by the reasonable management actions of an employer to discipline or performance manage a worker are not grounds for compensation”.
The respondent contested the rejection of her claim and, on 25 September 2012, issued proceedings in the Magistrates’ Court claiming compensation for depression as a worker under the Act. She alleged her injury was caused as a consequence of the physical and mental stress of her employment, particularly on the day of the work incident, 14 February 2010. In its defence, the appellant admitted the respondent’s diagnosis of adjustment disorder with anxiety and that the injury arose out of or in the course of employment, but denied the respondent suffered the injury in the circumstances claimed:
“The injury was caused wholly or predominantly by management action taken on reasonable grounds and in a reasonable manner by or on behalf of the plaintiff’s employer”.
The appellant’s denial of liability was based upon s 82(2A) of the Act:
“(2A) There is no entitlement to compensation in respect of an injury to a worker if the injury is a mental injury caused wholly or predominantly by any one or more of the following—
(a)management action taken on reasonable grounds and in a reasonable manner by or on behalf of the worker's employer; or
(b)a decision of the worker's employer, on reasonable grounds, to take, or not to take any management action; or
(c)any expectation by the worker that any management action would, or would not, be taken or a decision made to take, or not to take, any management action;
…”
Thus, if the appellant demonstrated that its actions were reasonable, then the respondent had no entitlement to compensation.
The issue was the reasonableness of the appellant’s management action as the employer of the respondent. It was not contested by the respondent that the appellant had reasonable grounds for conducting the investigation and subsequent disciplinary proceedings, nor that this process was “management action” within the meaning of s 82(10) of the Act. The respondent alleged that the investigation and disciplinary proceedings were not undertaken in “a reasonable manner” on the basis that it took seven and a half months for the investigation and disciplinary process to be completed.
A code of conduct for managing an allegation of serious misconduct against an employee of the appellant is contained in the appellant’s Management Performance and Conduct in Disability Services Policy (“the Policy”). The Policy sets out a ten step procedure for the management of an allegation of serious misconduct by an employee.
In considering the procedures in the Policy, the Magistrate stated:
“In my opinion, the only delay in the process that can be questioned is that which relates to the delay between the disciplinary hearing and notification of the determination - in particular, it recommends that the hearing officer provide a written determination within ten days of the hearing. In this case, there was a delay of 11 weeks. No evidence was presented to the Court as to why it took so long.”[3]
The Magistrate concluded on this aspect:
“Whilst I do not consider that strict compliance with the policy and timeframes set out in it is required when considering whether the management action was conducted in a ‘reasonable manner’, a delay of 11 weeks between the hearing and notification of outcome was excessive and unreasonable in the circumstances. I accept Mrs Stichling’s evidence that it contributed to a worsening of her mental condition. This delay, in the absence of a satisfactory explanation for it, results in a finding that the management action was not taken in a ‘reasonable manner’. Mrs Stichling was entitled to be informed of the outcome of the disciplinary determination in a timely and efficient manner when considering the determination could have had serious repercussions for her”.[4]
[3]Reasons [22].
[4]Reasons [23].
Analysis
It is the above reasoning of the Magistrate that the appellant submits was not open on the evidence and consequently it is contended that the Magistrate erred in law. On the other hand, the respondent contends that there existed evidence upon which the Magistrate was entitled to find that 11 weeks from the date of hearing to communication of the disciplinary outcome demonstrated “management action” that was not taken in “a reasonable manner”. The respondent submits, the question is one of fact and cannot be the subject of an appeal.
As stated, the Policy provides for a ten step procedure to manage an allegation of serious misconduct. Each stage is explained in the Policy, with a timeframe recommended for the completion of each stage. The process commences with an initial assessment of the allegation and a recommendation as to its management within three days of receipt of the allegation (step one), to a review of the allegation (step five), to a hearing if required (step seven), to a disciplinary outcome hearing and finalisation of the process (steps nine and ten).
The Magistrate, in his reasons, found the only delay that could be questioned in the process was the delay between the disciplinary hearing on 29 June 2010 and notification of the ‘determination’ on 17 September 2010.[5] It is here that that the misconception on the part of the Magistrate arose. The Magistrate found that the hearing officer, in accordance with the Policy, was required to provide a written determination within ten days of the disciplinary hearing on 29 June 2010 and “in this case there was a delay of 11 weeks”.[6]
[5]Reasons [22].
[6]Reasons [22].
The Policy does not set a timeframe of days in relation to the production of the determination by the hearing officer after the disciplinary hearing. Rather the Policy states the written determination should be provided “as soon as practicable” after such hearing. In fact, the only reference to “ten days” in the Policy is the recommended timeframe of ten business days for the completion of step ten, that is, to provide a written determination of the disciplinary outcome (penalty) within ten business days of the disciplinary outcome hearing (conducted after the disciplinary hearing). In this regard, Senior Counsel for the respondent, Mr Gorton QC, agreed the Magistrate had “elided two steps in the process and got them wrong”.[7]
[7]Step 8 produced the hearing findings and step 9 conduct of the disciplinary outcome hearing.
It is convenient to address first a submission made on behalf of the respondent. Mr Gorton submitted that whilst the Magistrate may have been mistaken as to timing and steps in the Policy, the Magistrate, in finding the appellant’s management action was not conducted in a reasonable manner, was considering the 11 week delay between the disciplinary hearing of 29 June 2010 and provision of the results of the disciplinary outcome hearing to the respondent on or about 17 September 2010. It was contended that the appellant, who bears the onus of proving the management action was conducted in a reasonable manner, did not provide any proper evidence to explain this delay and thus the Magistrate’s finding that the delay of 11 weeks was excessive, unreasonable and unexplained was available on the evidence.[8]
[8]Reasons [23].
Dr McEvoy contended on behalf of the appellant that there was evidence of a number of steps taken over the 11 week period that demonstrated it was not open to the Magistrate to find that there was an unexplained delay in the disciplinary process on the part of the employer between 29 June 2010 and 16 September 2010. He contended the steps included:
(a)The provision of notes of the disciplinary hearing of 29 June 2010 that were “to be sent to the hearing officer” on 14 July 2010. As I understood the submission, the hearing notes would assist the hearing officer in preparing the written determination.
(b)That the allegation of serious misconduct was found to be proved on or about 13 August 2010.
(c)That the respondent provided submissions as to the penalty to be imposed on or about 20 August 2010, and the appellant provided submissions on or about 3 September 2010.
(d)The disciplinary outcome, a final warning to the respondent, is dated 16 September 2010, and was provided to the respondent by letter on 17 September 2010.
The Magistrate, in his reasons, did not refer to or give consideration to the evidence relied upon by the appellant as set out above. The evidence, the appellant contends, explains the delay and should have been considered by the Magistrate.
In my opinion, the Magistrate was in error to conclude that “no evidence was presented to the court as to why it took so long”[9] for the appellant to provide notification of the disciplinary outcome after the disciplinary hearing. There was evidence of various procedures and steps which should have been considered by the Magistrate. In the absence of consideration of that evidence, the Magistrate’s further finding that the delay was “excessive and unreasonable” cannot be sustained.
[9]Reasons [22].
The failure of the Magistrate to take into account a significant body of evidence which supported a finding of reasonable steps is an error of law.
Before turning to the outcome of this appeal, it is necessary to also address a submission made on behalf of the respondent concerning the evidence not considered by the Magistrate.
Mr Gorton contended that the Magistrate did not have to accept all the evidence that was before him, or accept any of the evidence relied upon by the appellant in this appeal said to explain the 11 week delay. In this submission, Mr Gorton contended that it was open to the Magistrate “to not be persuaded by evidence as to what is put before him as to times and so on, it is not a question of law as to whether he was wrong”.
This submission cannot be accepted. The Magistrate did not consider evidence that was put to him as to times and steps that potentially explained the 11 weeks between 29 June and 16 September 2010. The Magistrate may, or may not be persuaded by that evidence, that was a question of fact to be decided by the Magistrate. However, the Magistrate was not entitled to find that no evidence was presented to the court to explain that delay.
It is not for me to determine the quality of the evidence led by the appellant to explain the delay. On one view, it might be thought that this evidence, which relies in part on the answers of the respondent to leading questions in cross-examination, and in part on a chronology that does not refer to important steps relied upon by the appellant to explain the delay, shows a failure by the appellant to adduce the best evidence of the steps and dates it relies upon to explain the 11 week period.[10] These are matters that should have been assessed and considered by the Magistrate. As stated above, the Magistrate may not be persuaded by such evidence adduced at the hearing, he may reject it or may accept it all or in part. However, the existence of such evidence demonstrates the Magistrate’s finding that “no evidence was presented to the court as to why it took so long” is “a finding that simply was not open [to him]”.[11]
[10]The appellant did not tender at the hearing the finding of the hearing officer as to serious misconduct (hearing 29 June 2010) which would have provided best evidence of the date of production of the finding. This disciplinary finding was an attachment to the disciplinary outcome determination (penalty) of the hearing officer which was tendered, but without the attachment. The failure to tender the attachment was unexplained.
[11]S v Crimes Compensation Tribunal [1998] 1 VR 83, Phillips JA at 90.
In the circumstances, I propose to make the following orders:
(a)The appeal is allowed.
(b)The orders made by the Magistrate on 13 May 2013 be set aside.
(c)Remit the proceeding for rehearing to the Magistrates’ Court of Victoria differently constituted.
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