Stewart v Victorian WorkCover Authority

IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
WORK COVER DIVISION

Case No. N11703361

Adam Stewart	Plaintiff
v
Victorian WorkCover Authority	Defendant

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MAGISTRATE:	Magistrate M A Hoare
WHERE HELD:	Melbourne
DATE OF HEARING:	23-24, 28-29 April 2025 and final submissions filed on 30 May 2025
DATE OF DECISION:	04 August 2025 (revised 26 August 2025)
CASE MAY BE CITED AS:	Stewart v Victorian WorkCover Authority
MEDIUM NEUTRAL CITATION:	[2025] VMC 14

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WORKERS’ COMPENSATION – Mental injury claim by WorkSafe inspector following claimed exposure to trauma – Significant contributing factor’ – ‘Management action’ – Reduction of weekly earnings where employment terminated on grounds of misconduct - Workplace Injury Rehabilitation & Compensation Act 2013 (Vic), ss 39(1), 40(1), 40(3), 185(1), sch 1, cl 25.

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APPEARANCES:	COUNSEL	SOLICITORS
For the Plaintiff	Ms S Bailey	Arnold Thomas Becker
For the Defendant	Mr A Middleton	Lander & Rogers

HER HONOUR:

INTRODUCTION

Mr Adam Stewart (Stewart) brings a claim for mental injury arising out of or in the course of employment as a workplace field inspector with the employer, WorkSafe Victoria (the employer). He alleges injury due to exposure to trauma performing his duties. He relied also upon: lack of return-to-work support; bullying and harassment; lack of support for vicarious trauma throughout the course of employment and, in particular, on or about 5 October 2021.
Three separate claims were lodged by Stewart, the first of which was accepted. He seeks to set aside the notices of decision dated: 10 March 2022, 29 March 2022 and 2 August 2023.
Injury, causation and capacity were in issue. The employer relied on various defences under the Workplace Injury, Rehabilitation, and Compensation Act 2013 (the Act) including that the alleged injury was non-compensable under s 40(1) of the Act and that he ceased work for reasons unrelated to incapacity (and thus weekly payments were reduced to $nil).[1]
[1] Stewart’s entitlement to compensation for mental injury is governed by the Act prior to enactment of the WorkCover Scheme Modernisation Act 2024.
Stewart’s credit came under heavy attack, the employer submitting his evidence was dishonest, misleading and wholly unreliable regarding disputed matters. It was said that his evidence was embellished and exaggerated regarding the claimed exposure to trauma.
Stewart’s treating psychologist and psychiatrist were cross-examined as was Dr Epstein, medico-legal examiner. The employer called various employees to give lay evidence.
Before turning to the evidence on contentious matters, it is useful to set out chronologically the background and factual matters relevant to the dispute based on contemporaneous documents and records.

BACKGROUND

Now aged 39 years, Stewart is married with two children.
After leaving school around the age of 15 years and working in casual roles, he acquired a fish and chip shop leasehold aged about 18 years in 2005 with his parents’ financial support. Later that year, the business ran into trouble financially and Stewart had two episodes of mental illness with psychiatric admissions (at Frankston Hospital). First, in August 2005, he was admitted following a suicide attempt in the context of onset of depression with recorded auditory hallucinations; and, second, in November 2005, he was again admitted involuntarily with recorded psychotic features and hallucinatory features.
By around November 2005, he was working in a full-time sales role in a Telstra call-centre for a period.
By around May 2006, he was discharged from Peninsula Health out-patient care (Frankson Hospital).
By late 2008, he had ceased taking anti-psychotic medication (olanzapine).
In February 2009, a Young Street Medical & Dental Centre clinical note records a long discussion regarding stress and schizophrenia.
In December 2009, after being sacked from a liquor store manager role for missing a shift, he saw a GP, Dr Sendecki, who recorded ‘deteriorating schizophrenia’ and referred him to Peninsula Health psychiatric services. He attended emergency the same day reporting stress and auditory hallucinations in the context of homelessness.
On 13 January 2010, in the Young Street Medical & Dental Centre clinical notes, an attendance note records: “schizophrenia, currently not treated, ceased himself 18 months ago”.
From early 2010 he moved interstate where he did a truck driver training program with a view to obtaining ‘fly in-fly out’ (FIFO) work in mines in Western Australia (WA) and the Northern Territory (NT).
From about 2012, he worked on a FIFO basis interstate. During this time, he obtained a diploma in occupational health & safety (OHS) and performed safety and emergency services work. He then studied part-time for about two years towards a graduate certificate in OHS via Edith Cowan University in WA (which he did not ultimately complete).
In 2014, whilst interstate, there was an episode of depressive symptoms in March for which he was treated twice at Palmerston Medical Clinic and prescribed Pristiq. Also in that year, in July, a history was reported at that clinic of a black out episode in Bali after consuming ‘12 beers’.
Stewart had married in November 2012 and his first child was born in December 2016. Before the birth, he and his wife moved back to Melbourne and from around then, he was self-employed with a small lawn-mowing business.

The Employment

On 18 May 2017, Stewart underwent a pre-placement medical assessment with Sonic Health Plus for the employer. This was based on a three-page signed questionnaire (the Sonic questionnaire) completed by the doctor during the assessment based on Stewart’s responses.
On 4 July 2017, he commenced full employment with the employer as a workplace field inspector (the employment). His duties included a large amount of time ‘in the field’ attending workplaces in response to incidents or reports of unsafe workplaces or work practices.
As part of his remuneration arrangement and with the employer’s agreement he exercised an option to use his ‘Tool of Trade Worksafe’ work vehicle for personal and domestic use (the work vehicle) for a fortnightly consideration which was deducted from his salary.
On 1 February 2019, in the course of his employment, he inspected a worksite in the aftermath of a fatality (the February fatality inspection). He completed an entry report. Others attending for the employer were Sandra Fisher and Thinh Tran.
From about July 2019, he was having regular counselling via the employer’s employee assistance program (EAP).
On 27 September 2019, in the course of his employment, he responded to a call out to a workplace following a fatality (the September fatality inspection). This was at a domestic dwelling in the Dromana area where contractors including the deceased were performing carpentry work. He completed an entry report which noted another inspector, David Steer, was also in attendance for the employer.
A week or so after the September fatality inspection, he took a period of approved paternity leave following the birth of his second child.
On 9 December 2019, in the course of his employment, he inspected a worksite where a worker had become trapped in a machine and sustained facial and head injuries including a suspected skull fracture (the December 2019 bread factory inspection). Emergency services were in attendance and the injured person was transported to hospital before Stewart arrived. He completed an entry report which recorded another inspector, Steven Anderton, was in attendance for the employer.
In December 2019, over the Christmas holiday period, he became very unwell mentally and was involuntarily admitted to hospital. He resumed work after the Christmas break.
On 24 February 2020, he reported to the employer verbally that he was struggling mentally and, with his manager’s assistance, lodged a claim for compensation form (the first claim) and ceased work from the next day. This was due to ‘work trauma’ and recorded having ‘first noticed’ the injury/condition in February/March 2020.
From around February 2020, he was under the care of Dr McIver, who remains his current treating psychiatrist.
By notice dated 4 March 2020, the first claim was accepted for weekly payments and medical and like expenses (MLE) and he then remained off work completely until early 2021 under certificates of incapacity.
On 31 March 2020, he came under the care of Mr Martin Sharman, his current treating psychologist (having been referred by Dr McIver).
In around November 2020, whilst still off work, Stewart had an apparent seizure type event whilst attending a friend’s birthday party. This occurred whilst cutting up pork and after having 10 standard drinks.
As follow up to that event, Peninsula Health neurology registrars reported to his GP clinic on 15 January 2021 and again on 15 March 2021 respectively. They opined as to an acute symptomatic seizure, secondary to excessive alcohol intake. Investigations including brain scans were reported as normal. Both reports refer to the need to obtain VicRoads clearance and the inadvisability of driving after a seizure event.
On 11 January 2021, he returned to work (RTW) on certificates for modified duties being administrative work only and restricted hours (two days per week).
That was still the situation regarding RTW at the time stage that the motor vehicle accident occurred.

Motor Vehicle Accident

On 14 May 2021, Stewart’s work vehicle was heavily damaged and written off as a result of a single-vehicle accident in the Arthurs Seat area (the MVA). At the time of the MVA, Stewart was off duty. There were no known witnesses and he was apparently located by police some distance away from the scene of the MVA. No physical injuries were sustained by Stewart nor was there any evidence of injury observed at hospital on examination. At some point, police conveyed him to Frankston Hospital where he was admitted.
Pausing here, the circumstances of, and surrounding, the MVA were key matters of controversy in the case. A central focus of the employer’s attack on Stewart’s credit involved the MVA and surrounding circumstances including his reporting of it to the employer and the contents of the hospital progress notes.
The day after the MVA, hospital progress note recorded variously inter alia:
·     ‘Presenting intoxicated, paranoid delusional | [patient] required sedation and restraints’;
·     ‘Presenting problem: … Currently on Effexor 300 mg (increased 1 week ago) … …admitting in heavy alcohol use but … trying to reduce … but binge drank last night… he admits he blacks out at times when drinking but remembers the activitys [sic] of last night, he is adamant that he wasn’t involved in a car crash…’
·     ‘[Patient] denies crashing car, denies alcohol or drug use. But has later admitted to Drinking at a bar tonight and smells strongly of alcohol | [Patient] states car was query stolen after being left in Mornington‘
·     ‘Presenting complaint: ... Police... after welfare check was initiated by patients aunty | Patient allegedly crashed his car with suicidal intent after [patient] allegedly spoke with auntie over the phone expressing [suicidal intent] and stating he will crash his car | Highway Patrol found car with significant damage and [patient] later found not with his car by police | Patient denies all of the above …’
·     ‘denies suicidal ideation | states has full recollection of last nights events | denies any illicit substance use’.
·      ‘? Had an MVA, intentional … car found with significant damage by Vicpol. ? Suicidal intent’… [patient] maintained and denied all claims of this. [Patient] also does not show any physical injury of a large road trauma such as head injury, wounds or seatbelt injury’.
On 17 May 2021, Stewart phoned his team leader, Natalie Heriot, and reported that: the work vehicle had been extensively damaged in the MVA; he was in hospital; and he could not have been driving as he sustained no injuries.
He was discharged by Peninsula Health into the care of his sister and continued to work on modified duties.

Employer’s management action and the MVA

It was not in doubt that the ‘management action’ relied upon by the employer for the purpose of the s 40(1) defence referred to actions taken by the employer related to the MVA, namely: the investigation and the 17 August letter; the 5 October meeting and ‘show cause’ letter; and his dismissal from employment.
On 17 August 2021, the employer gave Stewart a ‘notification of allegations’ letter related to the MVA (the 17 August letter). The allegations were: engaging in unacceptable behaviour namely driving the work vehicle when it lost control and driving the work vehicle when under the influence of alcohol and drugs; engaging in unacceptable behaviour in his dealings with police including making misrepresentations and acting in an aggressive manner; and misleading the employer about the circumstances of the MVA (the allegations).
The 17 August letter (authored by Kevin Hayes, a regional director of operations and emergency management) informed Stewart the allegations would be formally investigated and he was invited to participate in an interview with the appointed investigator. The letter advised that if allegations were substantiated, he may be in breach of the employer’s Operational Motor Vehicle Policy and Code of Conduct which may result in disciplinary action. He was also informed that EAP was available.
Also in 17 August letter he was informed, under the heading ‘Alternative Duties’, of restrictions on his duties as follows: ‘No driving in relation to your work, including the Tool of Trade vehicle or any other vehicle; No working as, or exercising of powers as Appointed Officer/WSV Inspector; No communication with external (outside WorkSafe) stakeholders unless explicitly directed by me; Any communication with other members of WorkSafe to be discussed with me prior to engagement.’
Stewart’s response to the 17 August letter was to deny all allegations and to maintain he had no memory of the MVA. As for the circumstances of the day of the MVA, he contended these arose in the context of a medication-related dissociative episode being an adverse reaction to altered dosage of Venlafaxine (also known as Effexor).
Pausing here, a typewritten document was tendered into evidence by the plaintiff which was addressed to ‘Dear …’; and was undated, incomplete and unsigned. It referred to annexures which were seemingly not included. Stewart gave unchallenged evidence that this incomplete document was probably his written response sent to the employer. No other version was produced by either party.
On 5 October 2021, Stewart attended a meeting with the employer (the 5 October meeting) at which he was handed a ‘show cause’ letter. The letter informed him that, following the investigation, all allegations were substantiated. It concluded that he had engaged in serious misconduct. He was suspended on full pay and reminded of the availability of EAP. It was proposed to terminate his employment subject to any response received by 13 October 2025. He provided no written response.
Stewart subsequently provided a medical certificate indicating he was unfit for any duties from 12 October 2021.

Post-employment

He did not resume after the 5 October meeting and his employment was terminated further to the ‘show cause’ letter.
Stewart completed a second claim for compensation form on 10 February 2022 with an injury date of 5 October 2021 (the second claim). The second claim alleged a mental health condition caused by ‘acute stress, bullying/harassment associated with an unjustifiable workplace investigation process, exacerbation of PTSD symptoms’. In response to ‘what task/s were you doing when you were injured?’ he answered: ‘data entry, misled re return to preinjury duties, alternative duties as part of a RTW process associated with a prior PTSD inj 08190045904’.
By notice dated 10 March 2022, the second claim was rejected for weekly payments and MLE on the grounds the claimed injury was caused by a mental injury of a type which does not create an entitlement to compensation under the Act upon s 40(1).
By notice dated 29 March 2022, with respect to the first claim, he was informed weekly payments would be reduced to the amount of $nil dollars under s 185(1) of the Act. That was on the grounds of having ceased work for reasons unrelated to his incapacity arising from the accepted psychological injury. The notice also stated that he had ceased work ‘due to a further injury resulting from management actions for which [he had] submitted a further claim’.
On 5 July 2023, he completed a claim for compensation form alleging psychiatric injury sustained from ‘repeated exposure to trauma whilst undertaking workplace investigations’ over the course of employment (the third claim).
By notice dated 2 August 2023, the third claim was rejected on grounds he had not sustained a new injury arising out of or in the course of his employment.
Certification of incapacity for work has continued to date and he has not returned to any form of work since that time.
MLE have continued to be paid by the employer under the first claim.
Stewart has had multiple psychiatric in-patient admissions at the Melbourne Clinic including: in around February/March 2022 (of 2-3 weeks); again, in around June 2022; and then in March 2023.

DISPUTED MATTERS

Before turning to the further evidence, it is useful to identify contentious matters central to injury and causation. They were:
a.The nature and extent of exposure to alleged trauma in the course of the employment and factual circumstances of incidents relied upon by Stewart including: the February fatality inspection; the September fatality inspection; and the December 2019 bread factory inspection;
b.The MVA and surrounding circumstances;
c.The employer’s management action related to the MVA.
I turn first to the work duties generally.

General nature of work duties

The majority of Stewart’s duties involved inspecting workplaces and preparing entry reports following adverse incidents across southern metropolitan Melbourne usually after significant injuries or, more rarely, fatalities.
By the time the inspection occurred, the injured person had generally been conveyed from the site to hospital or for medical care.
Once at the workplace, tasks of an inspector involved: speaking with co-workers and/or family members of the injured (or deceased) worker as appropriate or necessary; viewing the incident scene; from time to time, taking photos; and/or obtaining and viewing any available CCTV footage for the inspection or other reports. Thereafter, entry reports and other reports would be prepared and submitted for further action by the employer’s investigators.

February 2019 fatality inspection

Stewart had not carried out an inspection involving a fatality prior to the February fatality inspection.
When he attended the worksite, the injured person’s body was still on site in the cool-room, following a fall of some 10 metres to his death. The body was covered by a blanket. He could not recall whether he took photographs. The deceased’s adult son (who worked with the deceased) was also in attendance. Police were in attendance.
Under cross-examination, Stewart agreed there were no observable physical injuries to the deceased person other than the fact that he was dead. Under cross-examination when Counsel put to him: ‘There were no signs of any physical injury to the body?’ he responded: ‘He was deceased’.
Senior WorkSafe investigator, Thin Tran, also attended the worksite and he gave evidence Stewart had been involved in taking photographs. This necessitated removing the blanket covering the deceased. There was a significant amount of blood on and around the deceased’s head and ear and on the floor. He also said Stewart was present during onsite conversations with family members who were upset.

WorkSafe inspector, Natalie Heriot, also attended the the February fatality inspection and completed an entry report. She confirmed the deceased was in the cool-room and covered. Stewart had gone into the cool-room several times even though she told him this was not necessary and was the job of the investigators. When she asked Stewart whether he had seen a deceased person before, he said his grandmother. Under cross-examination, she agreed she asked him that because it was understood seeing a deceased person could be traumatic.

September 2019 fatality inspection

Later the same year, Stewart attended the September fatality inspection after hours and whilst on call. Ordinarily, the protocol was for inspectors to be informed as to the names of persons involved, but that time he was not. Once onsite, he realised he knew the deceased person and another of the co-workers present. The deceased was a ‘poker buddy’ whom he had last seen and played poker with a couple of weeks before. The other worker was also someone he played poker with. He nevertheless went into ‘inspector mode’ and carried out his duties.
The deceased person had died without observable cause whilst seated in his car out the front of the house after vomiting and complaining to co-workers of feeling unwell. By the time Stewart arrived, the deceased was on the ground covered with a jacket and later a blanket. Police were in attendance.
According to Stewart, the deceased’s girlfriend was in attendance and ‘wailing’ although he agreed, under cross-examination, that his entry report made no mention of knowing the deceased nor of a girlfriend being present.
Senior WorkSafe investigator, David Steer, who also attended the worksite and gave evidence he had no recall of the deceased’s girlfriend being present, rather, he recollected the site boss saying the deceased was a single man estranged from family. Stewart never mentioned knowing the deceased and if he had, Mr Steer would have told him not to remain at the scene.

December 2019 bread factory inspection

By the time Stewart arrived at the worksite (a bread-recycling factory), the injured person had already been taken to hospital. What stood out for him was the injured person being a quite young woman who he understood from police had sustained a facial degloving injury. He thought this would have a big impact on her life and the employer had seemingly showed a degree of callousness or lack of concern.
Under cross-examination, Stewart denied deliberately embellishing the nature of the injured person’s injury by use of the term ‘facial de-gloving’ to make it seem more traumatic.
WorkSafe investigator, Steven Anderton, also attended the worksite and said Stewart had arrived before him and police were leaving as he got there. He could not recall specifics of the injuries other than being to the head. Stewart did not appear emotional.
Under cross-examination Mr Anderton agreed he had no basis to challenge Stewart’s contemporaneous reporting in the entry report that he was informed by police that the CFA had rescued the injured worker from the machine, that she was transported to the Alfred with significant facial injuries and suspected skull fracture.
As for the nature of an entry report, Mr Anderton said an entry report was only a summary, not a verbatim report. If an inspector got a description of a degloving, that is what is what would be put into entry report by some. Some inspectors provide broad information only.

Other inspections

Stewart recalled a workplace inspection at Frankston Shopping Centre involving a worker having fallen heavily from a tall ladder. The injured worker had been transported from the scene for treatment before Stewart arrived. However, he had to view CCTV footage multiple times.
Another incident involved an inspection of a storage facility worksite after an employee had a steel frame fall on his head. Stewart had to view the CCTV footage showing what he described as a ‘very significant injury’.
That was the evidence regarding the work duties.

Circumstances of and surrounding the MVA

Stewart gave evidence of having no recall of the MVA nor of events surrounding it.
His last memory of the day was driving to a service station near his home to buy milk. His next memory was of being in hospital. He had no memory of various circumstances referred to in the hospital progress notes, such as: being in a bar or pub; drinking alcohol or using illicit drugs; calling his aunt or having conversations with her or other family members on the day of the MVA.
Under extended cross-examination, he could not explain many apparent inconsistencies and contradictions contained in the progress notes. He could not explain why, if he had no memory whatsoever of the MVA or surrounding circumstances, he apparently told hospital staff he had ‘full recollection of last night’s events’ and that he had been home. He could not explain why, if he remembered nothing, hospital staff recorded him being adamant he had not been driving nor that the MVA was deliberate in the context of having expressed suicidal ideation; nor that had he been drinking. He also could not explain why the progress notes would record him at one point apparently admitting to binge drinking that night.
As for how he might have formed a belief the work vehicle was stolen prior to the MVA as reported to the employer, that was because of his own lack of memory of being involved in a collision and his lack of any physical injuries whatsoever such as a seatbelt injury.
His explanation for his lack of recall was that around that time of the MVA, there were changes to the dosage of venlafaxine and he believed he had a dissociative episode related to this.
He was eventually discharged into the care of his sister and did not return to live with his wife and children. This was due to his wife’s concerns about his mental state.

The employer’s management action related to the MVA

Stewart first learned of the investigation when he received the 17 August letter. The allegations were distressing because he wanted to get to the bottom of things.
Under cross-examination, he denied his driver’s licence was ever cancelled by VicRoads after the seizure event in November 2020 nor was he notified or informed he was not to drive.

Natalie Heriot, his team leader at the time of his RTW in early 2021, gave evidence that she asked him if he had medical clearance to drive after the November 2020 seizure event. His response was that he had not been told not to drive and anyway it was not a seizure.
WorkSafe’s fleet and travel manager between 2020 and 2021, Fiona Kilburn, gave evidence confirming the personal use arrangement of the work vehicle was approved and accorded with WorkSafe policy. I found her evidence to be of little assistance to the Court. She was very vague regarding reporting requirements such as on conditions being imposed on licences.
Under cross-examination, Stewart agreed that as a consequence of the show cause letter: he was suspended on full pay; he did not take a support person to the 5 October meeting although he was offered that option; and he made no formal response in writing.

Overview of medical evidence

Prior to a detailed analysis and evaluation of the evidence on injury, capacity and causation, it is useful to set out an overview of the medical evidence that was before the Court.
Dr David Young, former treating psychologist, provided counselling seven times in 2019 under the employer’s EAP. He wrote on 10 October 2019 to a Dr Jayatilaka opining as to a diagnosis of post-traumatic stress disorder (PTSD) in the context of a high level of distress and a decline in psychological state. It was considered psychiatric management with a medication review would be appropriate.
Dr McIver, treating psychiatrist, provided ten reports between 2 June 2020 and 13 March 2025. He has treated Stewart regularly over this period and up until the hearing. He opined from the time of initially treating Stewart that the diagnosis included PTSD (with reduced capacity for pre-injury duties). Identified ‘triggers’ for him included vomit and certain smells including pork and also bread.
Mr Sharman, treating psychologist, provided six reports (one undated) between 21 April 2020 and 13 March 2023. He has treated Stewart very regularly (fortnightly then monthly) since around February 2020. Diagnosis was opined to be PTSD with dissociative features, major depressive disorder (MDD) and Substance (ETOH) Misuse (In Remission).
Dr Liyeng Cheng, treating GP of Seaford Beach Family Clinic provided brief reports dated 8 and 17 February 2023 regarding treatment needs and otherwise held opinions consistent with Dr McIver regarding diagnosis, causation and capacity.
Dr Michael Epstein, medico-legal psychiatrist, examined Stewart on two occasions, in June 2023 and July 2024, at the request of Stewart’s lawyers. He prepared three reports in total dated: 13 June 2023, 12 July 2024 and 12 February 2025. He opined that the diagnosis was chronic severe PTSD and MDD with passive suicidal ideation. He noted there was a period of drinking to excess, but Stewart reported not having done so since 14 May 2021.
Dr Timothy Entwisle, medico-legal psychiatrist, examined Stewart twice at the request of the employer’s lawyers in May 2023 and March 2024 and provided three reports dated: 24 May 2023, 2 November 2023 and 4 April 2024. The diagnosis was initially opined to be PTSD, major depressive illness and alcohol abuse currently in remission, however he ultimately altered his opinion with respect to PTSD (a matter to which I will return later in these reasons).
Other medical reports related to past history were tendered into evidence by the employer.
Dr Levien, a treating psychiatrist, provided background referral letters dated 27 April 2006 and 26 May 2006.
Dr Haputhantrige, a treating psychiatrist, provided a report dated 5 August 2019 to a GP in which he opined as to various diagnoses including: major depressive episodes and PTSD with a differential diagnosis of bipolar effective disorder type II. He also noted alcohol use disorder (which appeared to be in remission for 9 months) and past illicit drug use (including heroin and ice), the last time two years ago.
Dr Korbel, a treating psychiatrist, reported on 19 May 2020 to Dr McIver regarding treatment recommendations based on his impression of significant PTSD and depressive symptoms.
Dr Raspovic, psychologist and clinical registrar, provided a detailed psychometric report dated 14 December 2021. Based upon testing, interviews and assessment at the Melbourne Clinic, it was opined that a ‘synthesis’ of the material suggested the following diagnoses: MDD and PTSD.
Additionally, as indicated in the previously in the background matters, bundles of clinical notes of GP clinics and the Peninsula Health progress notes were tendered into evidence.

ANALYSIS

The legal and evidentiary onus of proof rested with Stewart to establish compensable injury, capacity and causation. Otherwise, the employer had the onus with respect its defences including the s 40(1) ‘management action’ defence.
Counsel for the employer referred to Krygsman-Yeats v State of Victoria[2] and the well-established principles applying to reasonableness and management action.
[2] [2011] VMC 54, Magistrate Garnett
Otherwise, written submissions of both Counsel were largely confined to the facts of the case.
Certainly, there was no dispute regarding the law applicable which is well-established.
As for the approach to be adopted where a worker has lodged more than one claim for the same injury, I am guided by the following helpful analysis of Forbes J in Rennie v State of Victoria:
Where two claims for the same injury arising from different aspects of the work duties are both before the Court, it does not compel an analysis that one claim must be considered as an aggravation of the other. Rather the claims may well identify two or more ways in which a single injury arises out of or occurs in the course of employment ensuring the court has jurisdiction to determine all aspects of compensability. The nature of any injury would no doubt be the subject of lay evidence and medical opinion[3].
[3]Rennie v State of Victoria [2023] VSC 762 at [48], Forbes J
Her Honour also said:
Compensability requires a worker to establish an injury that arises out of or occurs in the course of employment. For particular injuries, more is required, for example certain provisions in s 40(3) which address a pre-existing injury or disease. There may be more than one way that employment is a cause of injury within the definition of s 39. Classically an injury may arise because of the combination of a single incident and the nature of the work tasks more generally. Proof of an injury may be established by reference to different aspects of employment. This is not equated with any concept of separate causes of action for the purpose of s 39 of the Act[4].
[4]Ibid at [52]

The issues therefore for the Court’s determination were:

Nature and diagnosis of injury;
Whether injury arose out of or in the course of the employment, in particular exposure to trauma, or if injury was an aggravation or exacerbation of underlying or pre-existing injury, whether employment was a significant contributing factor to such injury;
Whether the mental injury was caused wholly and predominantly by management action taken on reasonable grounds and in a reasonable manner;
Whether there is current work capacity or, if no current work capacity, whether such incapacity continues and is likely to continue for the foreseeable future;
Whether incapacity results from or is materially contributed to by the employment; and
Whether by reason of s 185(1)(e) of the Act, he was not entitled to an increase in weekly payments (reduced to $nil by notice dated 29 March 2022 on the grounds he ceased work for reasons unrelated to incapacity).

Credit of the plaintiff

It is incontrovertible that in a case of this kind, an assessment of the plaintiff’s reliability and credibility is critical to a determination of the facts.[5] Medical opinions are of either no or, at best, limited probative value if the history upon which the opinion is based is flawed.[6]
[5]Johns v Oaktech Pty Ltd [2020] VSCA 10, [70] (Beach, Kaye JJA and Croucher AJA).
[6] Petrovic v Victorian WorkCover Authority[2018] VSCA 243, [74] (Beach, Kaye and Niall JJA); Popal v Transport Accident Commission [2023] VSCA 222 at [60] per Beach JA, J Forrest and Tsalamandris AJJA (Popal).
As stated at the outset, the Court was urged by Counsel for the employer to find that Stewart was not a truthful witness and that his evidence needed to be viewed in that light. That submission was made on four main bases:
a)    His denial in the Sonic questionnaire of any prior mental health issues as well as misleading histories to doctors about those issues.
b)    His account regarding any trauma exposure in the employment was deliberately embellished and exaggerated.
c)    His evidence was frequently evasive and self-serving, relying on poor recollection when it suited his case, yet having seemingly good recall on matters that assisted.
d)    His obfuscation regarding the MVA circumstances was deliberate and calculated to misrepresent matters to protect and advance his own interests.
Under cross-examination, Stewart conceded readily that the Sonic questionnaire contained false answers as follows: the denials of previous anxiety, depression or other mental health issues; his disclosing of hospitalisation for an appendectomy but omitting the psychiatric admissions; the denial of prior worker’s compensation claims; and the denials of prior drug use and smoking and of prior sleep problems.
Certainly, the false answers in the Sonic questionnaire raise a valid concern as to Stewart’s credit, yet that questionnaire must nevertheless be considered in context.
Firstly, whilst the lack of frankness was not commendable, Stewart was then a 31-year-old father of a child under one, with a dependent spouse. I infer he was motivated to ‘put his best foot forward’ and maximise prospects of obtaining the role with the employer.
Secondly, and more importantly, it is necessary that the responses regarding his mental health history nevertheless be examined and weighed in the context of the evidence overall[7].
[7]Pulling v Yarra Ranges Shire Council [2018] VSC 248 at [50]
Under cross-examination, it was put to Stewart that he, in fact, had had a very significant history of prior mental health issues including a suicide attempt, psychiatric in-patient admissions, and alcohol and drug abuse. Stewart conceded that was the situation, adding that the history was confined to his ‘younger years’.
In my view, the weight of evidence overall supports Stewart’s perspective in that regard.
Save for two GP attendances for depressive symptoms (for which he was prescribed an anti-depressant briefly) occurring about three years before the Sonic questionnaire and an alcohol-related ‘black-out’ on holiday in 2014, the unchallenged evidence was that Stewart had not been mentally unwell since the episode of some 7 or 8 years prior.
Pausing, that episode (in December 2009/January 2010) which comprised two GP attendances and a referral back to Peninsula Health was apparently triggered by homelessness and a job loss. There is no evidence of follow up, of ongoing treatment or symptoms. The unchallenged evidence was Stewart had not been admitted for mental health in-patient care for over 11 years since his discharge from Peninsula Health in 2005 nor been prescribed anti-psychotic medication since 2008 (a period of about 9 years).
As for historic references to ‘schizophrenia’ by GPs in clinical notes, I will return to the issue of pre-existing or underlying mental condition later in my reasons regarding nature and diagnosis of injury.
Nevertheless, Stewart’s apparent willingness to either not disclose or downplay prior mental health issues went beyond the Sonic questionnaire. When examined by Dr Entwisle for the employer in May 2023, he denied any previous history of psychiatric illness. Perhaps even more ‘surprising’ was that his past mental health history was apparently not provided to the treating mental health clinicians (Dr McIver and Mr Sharman) by him. That was Dr Epstein’s observation in his report of 13 June 2023.
Another example of an apparent willingness to mislead related to prior drug use. He denied any drug use other than cannabis and alcohol when questioned by Dr Epstein; yet, as stated, Dr Haputhantrige had a past history of drug use that included heroin and ice and the progress notes after the MVA referred to cannabis use in the recent past.
I accept the employer’s submission that the plaintiff’s credit is impugned by these matters, yet it is necessary that some further observations be made.
Firstly, to my mind, some aspects of the employer’s attack on Stewart’s credibility were either over-stated or unfounded. Much was made of his apparent mis-information to, for example Dr Epstein, of the fiscal arrangement relating to the work vehicle, yet nothing turned on that. The situation - however described - involved fortnightly salary deductions by which he paid indirectly for the costs of personal use of the work vehicle (such as fuel and insurance). There was also a significant emphasis on historic matters such as the black out while on holiday in Bali or an assault in Queensland years before.
Secondly, it is true that Stewart was a vague historian, yet under pressure of protracted cross-examination, overall he impressed me as genuine in his efforts to cooperate. I did not form the impression that he was attempting to mislead the Court or misrepresent matters in a deliberate sense by being defensive or argumentative. For example, when it was put to him in cross-examination that ‘in actual fact – apart from two deaths – you did not witness any injuries or any of the injured’, he agreed readily saying: ‘no they would have gone to hospital’.

Stewart also gave evidence against interest. An important example concerned the February fatality inspection. He said he could not recall if he took photographs and there was no visible traumatic injury to the deceased person (other than death). Yet Mr Tran, a witness for the employer, said there was a significant amount of blood on and around the deceased and also that Stewart did take photographs which necessitated removing the blanket covering the body.
Thirdly, the Court was assisted by the fact that Stewart’s lawyers had ensured that, prior to hearing, complete histories were put to the key medical witnesses relied upon by the plaintiff: namely Dr McIver, Mr Sharman and Dr Epstein who all provided supplementary reports and opinions.[8] Further, the opinions of all three were tested and challenged during rigorous cross-examination regarding the prior mental health history and other contentious matters.
[8]See, e.g., letter to Mr Sharman dated 17 August 2023.
Fourthly, on the question of credit, it is appropriate to give careful consideration to the opinions of Dr McIver and Mr Sharmon both of whom had clinical relationships over five plus years with Stewart. Of course, caution is required as it is not uncommon for long-term treating health practitioners to take up the guise of patient advocates.
I accept the submission of Counsel for the employer that appeared to be the situation with Mr Sharman who gave evidence he had never found Stewart to be ‘anything other than frank and honest’. In this regard, I note advocatory comments made regarding the MVA investigation, for example, in his 9 May 2022 report such as: ‘I am wondering where others draw their certainty from other than prejudice’; and it ‘beggars belief that a respected social institution like WorkSafe feels this is an adequate response to an employee’s wellbeing OR an appropriate use of independent mental health professionals’.
Dr McIver impressed me as a more objective and considered witness whose evidence was quite matter of fact and I consider his opinion to be persuasive. Under cross-examination regarding Stewart’s honesty (given instances of him not being truthful such as those referred to previously), Dr McIver said this: ‘I have met people [in my practice] who have pulled the wool over my eyes, but I have become as result reasonably astute’ and that he believed the plaintiff.
Next, on Stewart’s credit, a key area of attack related the contents of Peninsula Health progress notes and the weight placed by Counsel for the employer on the content of the hospital progress notes recorded the day after the MVA. That occurred in cross-examination of Stewart and the medical witnesses and in submissions.[9]
[9]Defendant Submissions at [52.iii[, [59]; Defendant Reply at [3], [16].
Previously in these reasons, I set out the main apparent contradictions and inconsistencies recorded in the progress notes as to the factual circumstances of and surrounding the MVA.
It is a well-established principle that whilst often probative, care must be exercised in the use of a patient’s medical records as evidence in a civil trial. This is particularly so where the maker of the record is not called to give evidence. Such records maybe probative but are compiled for the purpose of the clinical evaluation of a patient’s condition and not for selective forensic cross‑examination at a trial.[10] Such records usually contain a selective summary in the doctor’s own words of what the patient tells the doctor and cannot be treated as a verbatim transcript of the entire medical attendance. The records may be inaccurate through miscommunication or misleading through omission.[11]
[10]Popal at [87].
[11] Philippiadis v Transport Accident Commission [2016] VSCA 1 at [105] –[106], Redlich and Kyrou JJA and Ginnane AJA.
As a matter of context in assessing accuracy and weight as to what Stewart might have said to health practitioners, the progress notes also included the following observations: (emphasis added):
a.Smells strongly of alcohol | An observation of mild confusion at times [FADCB 225];
b.‘Police State [patient] crashed his car into a tree …’); [FADCB225]
c.‘… now moderately sedated unable to remain awake |Ongoing 1:1 Nursing Care until 4 points restraints removed (3 currently in situ) [FADCB223]
d.‘[Past history]: PTSD, Depression, ETOH Abuse, Previous non organic psychosis’; [FADCB223]
e.‘alert and oriented … awake and chatting… states has full recollection of last nights events [FADBC219]
Considering these observations including confusion, sedation and being so agitated as to require restraint, it is plainly problematic to rely upon notes of what Stewart in particular apparently said during this admission as akin to verbatim transcript.
Given the whole of the notes regarding Stewart’s state of mind during that period, it seems to me that the record of conversations must be approached with caution and weighed accordingly.
Moreover, hospital staff have apparently relied upon information given by the police when other evidence pointed to him having been found not with the vehicle and there being no witnesses.
Pausing, no one from Peninsula Health was called and there was no evidence regarding the basis for any supposition or deduction apparently formed by police or others. Whilst it is true neither the aunt nor the wife were called to give evidence, it was not suggested either of these persons were or could have been witnesses to the MVA. All that ether might have said (based on the progress notes being accurate) was that: he had left home driving the work vehicle earlier that day; he had been at a bar; he was going to have a drink; he had expressed suicidal ideation.
Counsel for the employer made this submission:[12]
The evidence of the Plaintiff’s wife and aunt recorded in the clinical records of the Frankston Hospital [at DCB 239 and 240] clearly demonstrates that the evidence given by the Plaintiff to hospital staff … is untruthful and in the Defendant's submission, a knowingly deliberate attempt to avoid potential problems relating to police prosecution and work repercussions (emphasis added).
[12] DS at [59].
That submission is seemingly contrary to the principles stated in Popal and Philippiadis. Summaries of conversations with Stewart, the aunt and wife and with police, contained in the progress notes are far from verbatim transcript; rather they are summarised versions of conversations noted by busy hospital staff whose focus was trying to establish the basis of Stewart’s presentation and treat him appropriately.
In conclusion, therefore as to credit, I am accept there grounds to exercise caution in accepting Stewart’s evidence about contentious matters without corroboration either of other witnesses or of contemporaneous documents. However, also for the reasons stated, I do not find Stewart was a deliberately untruthful or dishonest witness as urged by the employer.
Having arrived at that conclusion and based on the whole of the evidence, therefore, I find that Stewart’s exposure to potential trauma in the course of performing his duties as directed by the employer comprised:
a.A fatality (the February fatality inspection) in which the deceased person had blood on and around the head and the body was viewed and photographed by Stewart based on Mr Tran’s evidence. Ms Heriot gave evidence that it was ‘understood’ seeing a deceased person could be traumatic and that he was in and out of the cool-room multiple times.
b.A fatality in which the deceased person was unexpectedly known to Stewart as an acquaintance or ‘buddy’ (whilst not specifically corroborated by Mr Steer he did not challenge that and indeed noted that not all details are included in entry reports).
c.A serious face or head injury to a young female person who had to be rescued by CFA and transported to the Alfred; Mr Anderton agreed he had no basis to challenge Stewart’s contemporaneous reporting in the entry report that he was informed by police that the CFA had rescued the injured worker from the machine, that she was transported to the Alfred with facial injuries and suspected skull fracture.
d.Having to view of CCTV footage of adverse incidents;
e.According to numerous other entry reports were tendered into evidence, at least 25 inspections were attended by Stewart between 12 February 2018 and 28 January 2020 following reports of persons being injured. From reports it was apparent the injured person was not on the scene by the time Stewart attended and injuries were of various types including falls, lacerations and so on; yet statements were taken based on interviews and photographs were taken.

Nature and diagnosis of mental injury

As set out previously, the consensus of medical opinion, including of all three psychiatrists in the case was that the primary diagnoses were PTSD and MDD. Indeed that was also the opinion of other treating psychiatrists including Dr Haputhantrige who assessed Stewart in mid 2019 and Dr Korbel, a treating psychiatrist, who reported in May 2020. Moreover, that was also the finding of Dr Raspovic, psychologist and Melbourne Clinic registrar, based on detailed psychometric testing and evaluation in December 2021.
Pausing, as stated, Dr Entwisle ultimately resiled from his opinion (regarding PTSD) a matter to which I will return.
Notwithstanding almost total unanimity of medical opinion regarding diagnosis, Counsel for the employer challenged vigorously the validity of the diagnosis of PTSD under ‘Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition’ (DSM-5). The criteria for PTSD[13] under criterion A (relevant to this matter and emphasis added) includes:

Exposure to actual or threatened death, serious injury … in one (or more) of the following ways:
1. Directly experiencing the traumatic event(s).
2. Witnessing, in person, the event(s) as it occurred to others.
3. Learning that the traumatic event(s) occurred to close family member or close friend. In cases of actual of threatened death of a family member of friend, the event(s) must have been violent of accidental.
[13] Ibid at [309.81 F43.10], p143.
4. Experiencing repeated or extreme exposure to aversive details of the traumatic event(s) (e.g. first responders collecting human remains; police officers repeatedly exposed to details of child abuse).

In cross-examination, it was put to the medical witnesses that a diagnosis of PTSD could not be sustained. That was because Stewart’s claimed circumstances were said to fall outside all of the categories (1) to (4) of criterion A. Namely, he did not directly experience or witness the events (as injuries and deaths had already occurred); the persons known to him at the September fatality inspection were not family nor close friends; and there was no repeated or extreme exposure.
Yet despite heavy pressure in cross-examination, medical witnesses Dr McIver, Dr Epstein and Mr Sharman did not resile from their respective opinions regarding the diagnosis of PTSD and the relationship to the employment.
Dr Epstein, a most experienced medico-legal psychiatrist with substantial familiarity with the operation of DSM-5, rejected that proposition. He maintained that exposure to ‘actual … death’ in the sense of being in the presence of a dead body in the February inspection fatality and repeated in the September fatality incident was sufficient for criterion A to be met.
When it was put to him in cross-examination that the deceased persons in the two inspections had no observable physical injuries, Dr Epstein said this: ‘Except that they were dead’. (Moreover, as I have found, that was not the evidence).
Dr Epstein provided a supplementary opinion dated 12 February 2025 in response to a request for opinion regarding a bundle of about 25 entry reports prepared by Stewart for inspections carried out between 12 February 2017 and 28 January 2018. As stated, the entry reports[14] concerned lacerations and crush-type injuries of varying seriousness as well as falls. It was opined that the information reinforced his opinion as expressed in his previous reports and he saw no reason to change that opinion.
[14]APCB [94] – [209].
Dr Epstein also referred to the ‘Cautionary Statement’ contained within DSM-5 regarding its use and the need to exercise caution in forensic settings and observed that ‘quibbling’ about diagnosis was unhelpful.
Ultimately, Dr Epstein maintained his opinion because, as he said under cross-examination, Stewart ‘either saw or saw the aftermath of these incidents and in that sense was in an equivalent situation to a first responder’.
Under cross-examination, Dr McIver also opined that the fourth category of Criterion A for PTSD covered ‘everything he has done as a WorkSafe inspector’ and the trauma was the ‘repeated exposure to aversive details’ such as that experienced by first responders.
Moreover, both Dr McIver and Mr Sharman gave persuasive evidence that irrespective of the nature of acquaintanceship - ‘no matter how passingly’ as Dr McIver put it – with the persons in the September fatality inspection, it the unexpectedness of knowing the person that was an added trauma. As Mr Sharman said, and I accept, people are sometimes very attached to acquaintances according to the context in which they are known and the activity of playing of cards and poker (which was how Stewart knew the persons in the September fatality) was something in life to which Stewart was very attached.
Additionally, Dr Epstein said that viewing work-related CCTV can be very traumatic as the Criterion A specifically makes clear.
As stated previously, Dr Entwisle, alone of the doctors, after being provided with entry reports and accounts of Mr Steer, Mr Tran, Sandra Raguso and Natalie Heriot, concluded ultimately that the circumstances of those incidents did not fit the criteria for a diagnosis of PTSD as defined by DSM-V.
Pausing here, regarding PTSD criteria such as experiencing flashbacks, it was contended that Stewart had fabricated such flashbacks and falsified recollections (such as the presence of the deceased person’s ‘wailing’ partner and mother at the September fatality inspection). This was done deliberately to enhance his narrative regarding the traumatic nature of the inspection. Those apparent recollections were lies as they were neither corroborated in his own entry report nor by Mr Steer who gave a contradictory account. Relatedly, so-called flashbacks were ‘made up’ as they were not reflective of any of the actual inspections. One example was a recurring flashback of a drowning child in a lake. Another example was Dr Epstein’s history that following the December head injury inspection he began to see his sister's face on the injured female worker which he himself found ‘confusing as he had never seen the woman’.
Dr McIver explained this saying it was likely the unconscious mind re-interpreting work-related matters and also flashbacks were not necessarily ‘cinematic’ in a nature (as Mr Shaman put it). Dr Epstein gave similar evidence.
For these reasons, I prefer and adopt the very compelling opinions of Dr Epstein and Dr McIver and conclude that the nature and diagnosis of Stewart’s mental health conditions were primarily: PTSD and MDD and substance use disorder (alcohol) in remission.
Finally, according to Dr McIver, whose opinion as stated I found highly persuasive, I conclude that Stewart’s PTSD was severe with dissociation. Dr McIver noted clinical evidence (in his report of 6 May 2022) of dissociative episodes occurring well before the MVA and indeed since first being seen by Dr McIver and observed as a presenting symptom during reviews.

Whether injury arose out of or in the course of the employment, in particular exposure to trauma, or if injury was an aggravation or exacerbation of underlying or pre-existing injury, whether employment was a significant contributing factor to such injury

On any view, as a very young man, Stewart had substantial mental health challenges from around December 2005 until probably 2008 when he ceased taking anti-psychotic medication. Thereafter, there were very sporadic mental health episodes. In around December 2009, he was referred to out-patient services and saw a GP in January 2010 in the context of losing his job and reported homelessness. In March 2014, when aged 28 years, there was an episode of depressive symptoms requiring GP treatment and medication. A couple of months later, while on holiday in Bali, there was an adverse event after excessive alcohol consumption.
Following his marriage in 2012 and the birth of his first child in 2016, the weight of evidence is supportive of a conclusion that Stewart was mentally well and on a steady path in life with significant study commitments and continuous FIFO employment until the self-employment with the lawn-mowing rounds. That was the position when Stewart commenced working for the employer, namely he was well from a mental health perspective and had been for some years. He was not taking medication nor seeking any medical treatment for mental health nor had he done so (aside from the episode of depressive symptoms in mid-2014) for many years.
In sharp contrast, the evidence was that from mid-2019 he required psychiatric and psychologic support and by the end of 2019 he had deteriorated to the point of requiring inpatient psychiatric care.
Essentially based on my findings of fact regarding the work duties and for the reasons stated under this and the previous heading, I conclude that Stewart’s mental injury arose out of or in the course of his employment as a result of multiple exposures to trauma in carrying out his inspection duties. I also accept and adopt the opinion of both Dr McIver and Dr Epstein that ‘without doubt’ the PTSD was cumulative.
Yet the evidence was incontrovertible that Stewart had past or pre-existing or underlying mental health issues. Thus, in order to succeed in his claim, Stewart had to establish that employment was a significant contributing factor to the recurrence, aggravation, acceleration, exacerbation or deterioration of any such pre-existing or underlying mental condition.[15]
[15] Ss. 3, 40(3), clause 25 of sched.1
The task of assessing whether employment is a significant contributing factor requires consideration of the cl 25 factors. The task is involves resolution of an essentially factual enquiry, the question being one of degree, requiring evaluation.[16]
[16]St Mary’s School v Askwith 2011 [VSCA] 90 at [13], Warren, CJ, Ashley JA & Kyrou AJA
I turn now to the evidence regarding prior mental health and about which the medical witnesses who gave viva voce evidence were cross-examined extensively. The focus of cross-examination was two-fold: the extent of contribution of previous mental health issues and the nature of any underlying condition or diagnosis.
As Dr Entwisle opined based on past medical records, Stewart was a somewhat vulnerable man with a negative view of himself and perception of others. That view was expanded upon in his second report dated 24 May 2023 in which he emphasised his vulnerability. He opined further that Stewart’s pre-existing psychiatric illness and compromised personality functioning were significant contributing factors to his current presentation, along with his work-related experiences. Those factors must be considered under paragraphs (d) and (e) of cl. 25.
Yet both Dr McIver and Mr Sharman, based on their clinical familiarity with him and knowledge and expertise, rejected the proposition that Stewart had underlying schizophrenia simply based upon references by a GP in clinical notes in 2009 and 2010 or based on a past psychotic episode. Mr Sharman said in his experience it would be very unwise to diagnose schizophrenia based on one psychotic event.
More broadly, Dr McIver, upon review of full Peninsula Health records, ruled out persuasively an underlying, enduring psychotic disorder; instead, the prior mental condition was at worse a reactive depressive disorder with psychotic features from which he had quickly recovered (after the 2005 admissions).

Dr Haputhantrige, the treating psychiatrist in 2019, alone raised a differential diagnosis of bipolar affective disorder type 11, a view not shared by any other psychiatrist.
As for the factors in cl 25, especially (d) and the probable development of the injury occurring if that employment had not taken place, Dr McIver concluded that the episodes of 2005, 2009 and 2010 had no contribution to current state. Similarly, in his initial report of 13 June 2023, Dr Epstein could see ‘no clear connection’ between the apparent psychotic illness in 2005 and 2009 and the current situation. The symptoms complained of in 2023 were ‘quite different’ from those he experienced then.
I accept and adopt the evidence of Dr McIver and Dr Epstein in that regard for the reasons stated being the compelling nature of their evidence and being consistent with my findings regarding Stewart’s mental status as at the time of commencement of the employment.
I now turn to the cl 25 factors being (f) lifestyle of the worker and (g) activities outside the workplace and the evidence regarding drug (particularly cannabis) and alcohol use. For example, the reference in the Peninsula health progress notes on the day after the MVA of apparently having recently stopped marijuana.
It was submitted that cannabis use would ‘clearly’ affect his mental capacity to perform his work duties. Yet there was no evidence of any impact with respect to his work prior to the occurrence of the MVA. Moreover, under cross-examination, Dr McIver, the treating psychiatric clinician, rejected specifically the proposition that alcohol and drug could be a contributor to his mental health presentation in a ‘major’ sense.
For these reasons, I conclude on the balance of probabilities that Stewart’s employment was a significant contributing factor to a recurrence, aggravation and acceleration of any pre-existing mental condition such as a depressive disorder.

Whether the mental injury was non-compensable having been caused wholly and predominantly by management action taken on reasonable grounds and in a reasonable manner

To reiterate, the ‘management action’ for the purpose of the s 40(1) defence comprised the actions taken by the employer related to the MVA, namely: the investigation and the 17 August letter; the 5 October meeting and ‘show cause’ letter in which the allegations were said to be substantiated; and termination of employment for serious misconduct
Again, to recap briefly, the key allegations were of driving and losing control of the work vehicle at the time of the MVA when under the influence of alcohol and drugs; and of misleading the employer about the MVA and circumstances. As a consequence of the MVA, in addition to the investigation being instigated, Stewart was banned from driving in relation to work or exercising inspector duties plus other restrictions on communication with external stakeholders and fellow employees.
Whether taken on reasonable grounds
Based on the apparent circumstances of and surrounding the MVA, I am satisfied that the employer, particularly as a regulator of workplace safety, had reasonable grounds in undertaking the investigation of the MVA. On any view, it was a major collision of a work vehicle that occurred in circumstances that were perplexing but of justifiable concern including some evidence of alcohol use (smelling of alcohol). For the same reasons, the matters alleged comprise reasonable grounds to impose restrictions on Stewart such as from driving whilst the investigation was under way.
Next, it seems to me that the finding in the ‘show cause’ letter that some allegations were ‘substantiated’ was probably on reasonable grounds, namely: he likely was drinking on the day of the MVA and (although no irrefutable evidence such as any eye-witness account) he likely was driving at the time of the MVA. Also, he probably did mis-represent what occurred in his reporting to the employer although to my mind (given my other findings) not necessarily deliberately but having regard to the substantial confusion surrounding the events as the progress notes make clear.
However, I have also concluded that the employer has not discharged the burden of proof to establish that it acted on reasonable grounds in proceeding to termination of employment for serious misconduct.
Importantly, the show cause letter stated as follows: ‘Clause 62.3(d) of the Enterprise Agreement requires [the employer] to consider any mitigating circumstances put forward by the employee where termination is recommended as the appropriate disciplinary outcome’.
I have concluded, on the weight of evidence, that there were multiple mitigating circumstances regarding and surrounding the MVA.
First, at the time of the MVA, he was on certificates for modified duties and being treated and medicated for a work-related psychiatric condition for which the employer had accepted liability.
Second, his rambling, voluble, obviously incomplete written response to the 17 August letter was plainly that of a markedly unwell person. It contained ‘cut and paste’ definitions of ‘adverse reaction’ and ‘dissociative episode’ and select extracts from the hospital progress notes of the day after the MVA and missing annexures.
He then apparently failed to respond at all (by way of a written response himself) to the show cause letter although I find that medical evidence was provided.
Thirdly, in a ‘to whom it may concern letter’ dated 23 August 2021 (five days after the 17 August letter) and - thus I infer was provided to the employer during the investigation - Dr McIver said this:
At that time Mr Stewart was being taken off a relatively high dose of medication (venlafaxine). As stated in my report to VicRoads at the time, Mr Stewart experienced an unusual adverse response either to the medication or the withdrawal of it (or both). This reaction involved, among other symptoms, an atypical dissociative state. This was also in the context of severe Post Traumatic Stress Disorder which can also involve dissociative episodes, and some use of alcohol. The combination at the time resulted in Mr Stewart having little or no memory of the events and during such states, would have had no conscious control over his actions. Mr Stewarthad previously been withdrawn from this medication with a similar effect at the time. That he has not to my knowledge been charged by the Police and has been re-issued with his Drivers Licence suggests that these organisations understand the situation was not malevolent, purposeful, or likely to recur. Now that Mr Stewart is no longer taking this or any similar medication, not using alcohol, and is progressing well with the treatment of his Post Traumatic Stress Disorder, the likelihood of any recurrence is extremely low.
Fourthly, in a report dated 8 October 2021 - which I again infer was provided after the show cause letter - Dr McIver repeated those views, indeed opining as his psychiatrist it was open to conclude he was genuinely not responsible for his actions.
Pausing, that opinion was maintained by Dr McIver under pressure of cross-examination. As for whether it was credible that Stewart would have a complete lack of recall of events of the day of the MVA, Dr McIver gave a persuasive explanation about this. He said that if a patient experiences a dissociative episode, then memory is affected. Moreover, he had had clinically observed Stewart having a dissociative episode and of afterwards having no memory of what occurred during it.
For completeness, the Court heard that that opinion of Dr McIver (shared by Mr Sharman who also provided letters to the employer as noted previously) was also held by Dr Epstein. He opined that it was more probable than not that Stewart had a dissociative episode at the time of the MVA and there was ‘probably a combination’ of both his underlying mental health issues and withdrawal from medication. He opined that the dissociative episodes were as a result of his work-related injuries and he likely had a further dissociative episode in the context of withdrawing from medication.
In summary, therefore, there were compelling mitigating circumstances including a persuasive medical explanation for the MVA circumstances, for Stewart’s lack of recollection and for the apparent mis-information or lack of adequate information provided to the employer afterwards. That included the provision of his psychiatrist’s view that it was open to conclude he was genuinely not responsible for his actions by reason of a dissociative episode related to his PTSD condition or a medication alteration for that condition or both.
Notwithstanding those matters, there was scant (if any) evidence before the Court of the employer having undertaken consideration of highly relevant mitigating circumstances of which I find it was aware.
For these reasons, I have concluded that the employer has failed to discharge the burden of proof to establish that management action was taken on reasonable grounds in proceeding beyond the show cause letter, in apparently failing to consider adequately or at all mitigating circumstances and the action of in concluding Stewart had engaged in serious misconduct and in ultimately terminating his employment.

Whether taken in a reasonable manner

Alternatively, if the management action of proceeding to act on the ‘show cause’ letter and termination of employment was on reasonable grounds, I conclude that it was unreasonable to do so apparently without properly or fairly considering the mitigating circumstances which provide a medical explanation for the substantiated allegations.
In arriving at this conclusion, I have had regard to the requirement that the action and manner in which it is taken should be assessed at the time taken without the benefit of hindsight, taking into account the attributes and circumstances including the emotional state of the worker[17].
[17]Krygsman-Yeates at [35]
For completeness, It was said that it was unreasonable to only inform Stewart of the investigation in the 17 August letter some 12 weeks after the MVA. Having already found aspects of the management action were not taken on unreasonable grounds, it is unnecessary to also examine that matter in detail. However, although there was no explanation about this by the employer, I infer on the evidence and am satisfied that the MVA circumstances were sufficiently complex and indeed perplexing such that time was required to arrive at the point of making the allegations.

Wholly and predominantly

As I have concluded management action relied upon was not taken on reasonable grounds or otherwise was taken in a reasonable matter, the employer’s defence fails.
For completeness, even had I accepted on the evidence that the management action was taken on reasonable grounds and in a reasonable manner, the employer needed to establish that such management action reasonably taken was the cause which must exceed the other or all other causes combined in power and influence.[18]
[18]Pulling v Yarra Ranges Shire Council [2018] VSC 248 at [79], Bell J.
Dr McIver opined in his 6 May 2022 report that Stewart had been recovering to the point of return to work, but the failure of Work Safe to follow the return plan was a major set-back to his mental health. His view was subsequent actions by the employer related to the MVA were detrimental to both mental health and RTW. He also stated in his report of 14 March 2023 that ‘[w]ithout question’ the diagnosis has been caused by the employment and ‘perpetuated by the management of his injury claim’.
Dr Entwisle opined that matters ‘in regard to serious misconduct’ have complicated and clouded the clinical picture, and it is the latter which appear to be significantly contributory to his failure to progress.
I am of the view based on the evidence including the evidence of Dr McIver that the management action was a cause of Stewart’s mental condition by the time he ceased work.
However, overwhelmingly, having regard to the whole of the evidence regarding the impact of exposure to trauma in the course of the employment and in accordance with my previous findings, I have concluded that the management action was not the cause which exceeded the other or all others in power and influence.

Whether, Stewart has been, and continues to be, incapacitated for work

Stewart remained off work on weekly payments under the accepted first claim until his partial RTW in January 2021. He was then working about 2 days a week of modified duties up until the restrictions placed upon him after the MVA such as no driving.
Under cross-examination, Stewart agreed that in around April 2021, he had discussed a return to usual duties, however that did not happen. At the time, whilst evidence was limited, performance of inspector duties may have been partially impacted by pandemic lockdowns. In any event, he had continued to have symptoms and appeared to struggle even with the modified work duties.
Dr Epstein opined that as a result of the work-related injury, his capacity for coping became damaged and this situation has continued.
Dr McIver in his final report of 13 March 2005 in which the diagnosis was PTSD, work related. Severe, with dissociation and resultant MDD concluded there was total incapacity for employment which was likely to continue for the foreseeable future.
Indeed, medical opinion, including of Dr Entwisle, was unanimous that Stewart had no capacity for employment at any point since ceasing work in October 2021. There was no contrary evidence of capacity for either pre-injury or suitable employment. Despite a variety of treatments there was no evidence that his mental state has improved over the last four years nor that he could attend work on a regular or consistent basis. Stewart had applied for no jobs since October 2021 and felt he could not.
I am of the view that the weight of evidence overwhelmingly supports the conclusion that was that Stewart has no current work capacity and that such incapacity is likely to continue indefinitely.

Whether such incapacity results from or is materially contributed to by the employment

For reasons already stated, the evidence was also overwhelming that Stewart’s incapacity for work resulted from, or was materially contributed to by his compensable injury pursuant to s 160 of the Act.
Medical opinion including that of Dr Entwisle was unanimous that Stewart’s incapacity remains materially contributed to by the claimed injuries suffered with the employer.

Whether by reason of s 185(1)(e) of the Act he was not entitled to an increase in weekly payments (reduced to $nil) under the first claim on the grounds he ceased work for reasons unrelated to incapacity.

I have concluded on the weight of evidence particularly the medical evidence and opinions of Dr McIver and Dr Epstein that the events of 14 May 2021 including the MVA leading to the unreasonable management action occurred only by reason of his accepted work-related injury.
I have found the employer’s finding of serious misconduct, and the dismissal was management action taken on unreasonable grounds. To the extent there was any contribution to incapacity by the unreasonable management action that was probably transitory, and Stewart would not have been able to continue working in any event because of his ongoing substantive injury (as opposed to any aggravation).
For reasons stated and my findings regarding the management action, the evidence does not support a conclusion that Stewart ceased work for reasons unrelated to incapacity.
I conclude that weekly payments were reduced unlawfully with respect of the first claim.

CONCLUSION

My conclusions are as follows:
a.Stewart’s mental injury arose out of or in the course of his employment as a result of multiple exposures to trauma in carrying out his inspection duties.
b.The employment has been a significant contributing factor to a recurrence, aggravation and acceleration of any pre-existing or underlying mental condition.
c.The employer’s defence that injury was caused wholly and predominantly by management action taken on reasonable grounds and in a reasonable manner is not supported by the weight of evidence and must fail.
d.Stewart has had no current work capacity since 5 October 2021, continues to have no current work capacity and such incapacity is likely to continue indefinitely and the incapacity results from or is materially contributed to by the employment
e.He is entitled to an increase in weekly payments from the date of the reduction (when reduced to $nil by the notice dated 10 March 2022 which I set aside}.
f.He requires a continuation of appropriate and adequate medical and like treatment in accordance with the Act.
I will hear from parties regarding the form of final orders.

Magistrate M A Hoare
04 August 2025

Revision note 26/08/2025: numbering revised to correct error in number sequence from paragraph 35.

[2025] VMC 14

04 August 2025 (revised 26 August 2025)