Xu v Warrumbungle Shire Council

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Xu v Warrumbungle Shire Council [2025] NSWPIC 364
APPLICANT:	Jing Xu
RESPONDENT:	Warrumbungle Shire Council
MEMBER:	Parnel McAdam
DATE OF DECISION:	30 July 2025
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; psychological injury; injury and section 11A in dispute; perception of real events; State Transit Authority of NSW v Fritzi Chemler, and Attorney General’s Department v K applied; Baker v Southern Metropolitan Cemeteries Trust discussed; applicant moved from Melbourne to regional NSW; interpersonal and cultural issues between applicant and manager; real events occurred; applicant perceived them in a particular way; Held – applicant suffered an injury; section 11A defence not made out; matter remitted to President for referral for medical assessment.
DETERMINATIONS MADE:	The Commission determines: 1. The applicant suffered an injury in the course of her employment with the respondent, to which employment was the main contributing factor. 2. The applicant’s injury was not wholly or predominantly caused by reasonable action of the employer with respect to discipline or performance appraisal. 3. The matter is remitted to the President for referral to a Medical Assessor pursuant to s 321 of the Workplace Injury Management and Workers Compensation Act 1998 for assessment as follows: Date of injury: 25 August 2019 (deemed) Body systems/parts: psychological/psychiatric Method of assessment: whole person impairment 4. The documents to be referred to the Medical Assessor are: (a) Application to Resolve a Dispute and attached documents, excluding the report of Dr Duke dated 30 January 2020; (b) the Reply and attached documents; (c) the respondent’s Application to Lodge Additional Documents dated 7 May 2025, excluding the report of Dr Modem, and (d) the applicant’s Application to Lodge Additional Documents dated 13 May 2025. 5. The applicant’s claim for weekly compensation benefits is stood over until the outcome of the medical assessment. A brief statement is attached setting out the Commission’s reasons for the determination.

STATEMENT OF REASONS

BACKGROUND

Ms Xu was employed by the respondent as a water project engineer. The role was located in Coolah, in central western NSW. Ms Xu came to the role after working in Melbourne. She was offered an attractive contract to relocate to Coolah.
Ms Xu was born in China but came to Australia in 2006. She has multiple qualifications including dual master’s degrees in project management and environmental engineering. She had worked in water engineering previously.
Ms Xu commenced employment with the respondent on 13 May 2019. Almost immediately, she reported issues with her employment, mostly connected to her direct manager, Ms Cornelia Wiebels. She attended a local general practitioner shortly after the commencement of her employment. She continued to work although with increasing difficulty. A number of interpersonal conflicts occurred between Ms Xu and her supervisor, which led to a complaint and then a formal grievance being made. A probationary review meeting was held around that time, with a more formal letter being prepared by Ms Xu’s manager and sent on 31 July 2019.
Ms Xu left Coolah on 23 August 2019, returning to Melbourne. She has not worked since that time. She was paid workers compensation benefits for a period, including under voluntary payments following earlier proceedings in the Commission.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:
(a) injury pursuant to s 4 of the Workers Compensation Act 1987 (the 1987 Act), and
(b) the defence of reasonable action of employer with respect to discipline and performance appraisal pursuant to s 11A of the 1987 Act.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
The matter proceeded to conciliation/arbitration on 13 May 2025. The applicant was represented by Mr Stockley of counsel, instructed by Carrol & O’Dea Lawyers. The respondent was represented by Mr Perry of counsel, instructed by Moray & Agnew Lawyers. The parties were unable to resolve the dispute at that stage. Due to the period of time that had elapsed, I issued a direction calling for written submissions, first from the respondent, then the applicant, then the respondent in response to the injury issue.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    Application to Resolve a Dispute and attached documents, excluding the report of Dr Duke dated 30 January 2020;
(b)    the Reply and attached documents;
(c)    the respondent’s Application to Lodge Additional Documents dated 7 May 2025, excluding the report of Dr Modem, and
(d)    the applicant’s Application to Lodge Additional Documents dated 13 May 2025.

The applicant’s statements

The applicant provides four statements in this case, as well as an undated and unsigned diary or timeline of events. I have treated the unsigned document only as an aide memoire as it has not been signed.
Ms Xu’s first signed statement is dated 29 April 2020. It sets out the context of work events, dating from 23 May 2019. The statement refers to “my supervisor” throughout, but it is clear that this is Ms Wiebels. The statement sets out some of Ms Xu’s issues with Ms Wiebels, including role expectations of a project engineer (as opposed to a project manager). Also described is the probation review meeting that occurred on 25 July 2019.
A second statement is dated 30 November 2021. It refers to a previous statement dated 21 September 2019 which I do not have before me (but may be the diary/chronology). This statement largely concerns the applicant’s symptoms following injury.
The applicant’s third statement is dated 6 September 2022. It addresses issues previously canvassed, with some further detail. Symptomatology is recorded.
A fourth statement is provided dated 3 February 2025. The statement concerns Ms Xu’s child, conceived through IVF, as well as Ms Xu’s living arrangements with her parents.

The respondent’s statements

I would note, generally in respect of these statements that there are a large number of them and they are extensive. I have read them in detail and will refer to parts of them below. They tend to confirm the position that Ms Xu and Ms Wiebels were vastly different personalities and had difficulties from the outset. These statements were obtained in September 2019 and are signed 23 or 24 September.
The respondent, through an investigation, obtained a series of statements from other workers, including Ms Xu’s manager, Ms Wiebels. Ms Wiebels was employed by the respondent as Manager – Warrumbungle Water and based in the Coolah office. She was Ms Xu’s manager at the time of her alleged injury, and was involved in her recruitment. Ms Wiebels commences the factual component of her statement by criticising Ms Xu for not being ready for her first day of work.
Ms Wiebels sets out general issues she had with Ms Xu’s performance, and how she took feedback in the workplace. She describes Ms Xu as being late and purposefully coming through a side door when she arrived. Ms Wiebels admits to altering Ms Xu’s timesheets. Specific incidents are described from Ms Wiebel’s point of view. The circumstances of Ms Xu’s grievance are set out. Ms Wiebels describes herself as “direct when I speak to staff”.
Ms Carol Nasmith provides a statement. She was employed as Acting Property Officer when Ms Xu was employed at the respondent. She describes seeing Ms Xu as crying from time to time, explaining that she did not know how to do certain tasks. She describes Ms Xu telling her that Ms Wiebels was rude to her. She told Ms Xu to write things down. She describes never seeing any behaviour that she would describe as bullying or harassing.
There is a statement from Ms Lisa Grammer, who was employed as Supervisor Finance at the Coolah office. She describes Ms Xu coming to her on the first week crying telling her she had been given too much work and not being shown how to do things. Ms Grammer describes how she helped Ms Xu with administrative tasks. She describes an interaction involving horse riding lessons which escalated to Ms Grammer raising her voice and swearing at the applicant. She describes everyone in the office trying to help Ms Xu.
Mr Bailey provides a statement. He was employed by the respondent as General Manager, but did not normally work at the Coolah office. He describes an interaction with Ms Xu on 30 May 2019 where Ms Xu describes feeling under pressure from Ms Wiebels, and felt that Ms Wiebels was bullying her. He describes a meeting that occurred on 30 July 2019, where the applicant spoke to him about bullying and harassment (at the hands of Ms Wiebels). The history following that meeting, including the complaint made by Ms Xu and the outcome of that complaint is set out.
There is a statement from Ms Melissa Chapple who is employed by the respondent as a Workplace Health & Safety Officer and Return to Work Coordinator. She describes a car trip with Ms Xu, where the applicant disclosed that she was finding it difficult to get along with Ms Wiebels. She describes an interaction, in public, where Ms Xu said “You are as cranky and strict as my Supervisor Cornelia”. She then describes the actions taken at the meeting that occurred, with Mr Bailey, and the actions she took following the lodgement of the workers compensation claim.
There is a statement from Ms Christine Kennedy, employed by the respondent as Manager – Organisation Development. She describes the recruitment process with Ms Xu. She describes Ms Xu as a person who wanted multiple opinions and would look for an answer that would confirm her interpretation. Ms Kennedy describes attending the meeting between the applicant and Ms Wiebels on 25 July 2019, which was a probation performance meeting. She was involved in the investigation of allegations made by Ms Xu, which she describes as “generic allegations without any specific examples”. She felt that Ms Xu was not able to perform her duties, and interpreted Ms Wiebel’s attempts to get her to perform as bullying.
Ms Jacinta Green provides a statement. She is a casual that worked with Ms Xu whilst she was covering for another staff member. She describes Ms Xu as “overwhelmed with the work”. She describes an early “miscommunication” between the applicant and Ms Wiebels, involving a time sheet. There is detail of a weekend farm stay in August, where Ms Xu obtained a flat tyre.
Further statements were obtained in June of 2020, as part of a factual investigation. Mr Gordon’s role was Supervisor – Reticulation. He provides a statement in response to a statement made by Ms Xu. He recollects speaking to Ms Xu and providing her with information, but “it was not made clear how important the information requested by the claimant was”, and he “did not have time to do the work for her”.
Ms Chapple provides an updated statement that rejects a specific component of the applicant’s additional statement, concerning an allegation that Ms Chapple had heard Ms Wiebels abusing Ms Xu.
Ms Wiebels also provides an updated statement. The statement largely reiterates her previous statement, responding to sections of Ms Xu’s statement, and explaining why she disagrees with it.
Further statements were obtained in June 2023. Ms Nesmith clarifies the comments and timeline she provided earlier. Ms Maree Thompson, who works in Payroll, provides a statement for the first time, that comments on her brief interactions with Ms Xu and her general impression of Ms Wiebels.
Ms Chapple provides yet another statement. This clarifies some comments around Ms Wiebel’s husband. Ms Wiebels also provides a further statement.

The medicolegal opinions

The applicant relies on the reports of Dr Khan. The first is dated 16 January 2022. He takes a history of employment with the council. Ms Xu reported her workplace as “toxic” and that Ms Wiebels started to “treat her like a slave”. There are other aspects of the applicant’s history that are consistent with what she has stated occurred, but are disputed by other parties as to whether they occurred, or how they were perceived.
Dr Khan diagnoses persistent depressive disorder and generalised anxiety disorder. He opines that employment was the substantial contributing factor to her injury, as:
“she was subjected to protracted workplace psychological stressors whereby he [sic] was targeted, bullied, harassed, isolated, excluded, unsupported, ignored and dismissed by her colleagues as well as management.”
He opines that she had not suffered an aggravation of a pre-existing condition. He considered the report of Dr Ventura dated 1 July 2020. He disagrees with Dr Ventura’s diagnosis of delusional disorder. He explains that although the applicant presented with paranoid thoughts, these are congruent with protracted workplace psychological trauma. She had no previous psychotic symptoms, therefore it is improbable that she would present with those symptoms at the age of 38.
Dr Khan provides a supplementary report dated 25 November 2024. He repeats the history he took previously. He opines:
“Ms Xu’s employment as a water project engineer with Warrumbungle Shire Council was the main contributing factor to her psychiatric/psychological injury. In summary, she was subjected to protracted workplace stressors whereby she felt targetted, bullied, harassed, isolated, excluded, unsupported, ignored and dismissed by her colleagues as well as management. These experiences, as detailed in the ‘History of Presentation’ section of this report, caused her mental state to gradually deteriorate and led her to develop the psychiatric/psychological conditions of persistent depressive disorder and generalised anxiety disorder.
Ms Xu has not suffered an aggravation of a pre-existing condition.”
The respondent relies on two reports from Dr Ventura. The first is dated 1 July 2020. He takes the following history of the onset of difficulties with Ms Wiebels:
“Ms Xu told me that she had problems with her supervisor Cornelia from the very beginning. She attributes this to different personality style. She said that Cornelia was very forthright whilst Ms Xu is very reserved. She told me however that the situation deteriorated and Cornelia was constantly rude and disrespectful towards her. When asked to give specific examples of this she told me that she was asked to do tasks which were not engineering tasks and not specifically in her job description. She told me for example, that she was asked to mail a number of letters and go to the Post Office. She told me that Cornelia was not supportive and at times raised the voice at her. She told me that she made an angry face. Ms Xu alleges that Cornelia only wanted to be greeted in a certain way and did not accept her own softer greetings.”
His opinion is:
“In conclusion it is my opinion that her constitutional disorder namely Delusional Disorder has caused the difficulties in interacting with others and perceiving her employer’s actions as negative. I found no evidence that she has a mental illness which has been caused by employment.”
Dr Ventura provides that should injury be found to have occurred, that it was caused by reasonable action of the employer with respect to discipline or performance appraisal.
Dr Ventura provides a further report date 8 April 2022. He sets out the progress since the last assessment. In this report, the diagnosis of delusional disorder has changed to schizophrenia as she has revealed the presence of auditory hallucinations. He opines that both diagnoses are constitutional illnesses, and that her experience of bullying and harassment was part of a psychotic illness. He does opine that her schizophrenia is complicated by a major depressive disorder. In contrast to the previous opinion, Dr Ventura opines:
“I have no evidence to consider that the injury or disorder was wholly predominantly caused by actions taken or proposed to be taken by the employer with respect to discipline or performance appraisal.”
He disagrees with the opinion of Dr Khan, saying he “fails to recognise the psychotic illness”. This is particularly in respect of a plot to have her tyres slashed in order to steal her phone. He also criticises Dr Khan saying he “appears not to be aware of the diagnostic criteria for delusional disorder”.
The respondent also relies on the report of Thomas O’Neill, a clinical psychologist, dated 13 January 2023. In mental state examination, the following is specifically recorded:
“Ms Xu denied any psychotic symptoms such as hallucinations, persecution, ideas of reference, delusions of control, influence, or passivity. She denied any religious delusions, nihilistic delusions, fantastic delusions, delusions of jealousy, or grandiosity. I did not observe any specific psychotic aspects to her presentation. She was very adamant from the very beginning that she has never been psychotic and was not currently.”
There is a long discussion about potential diagnoses. Mr O’Neill recognises the difficulty in providing “an accurate diagnosis if there is one”. The possibility of a depressive disorder is flagged, as well as difficulties clarifying the present of a delusional disorder or schizophrenia. He states:
“It was not possible to be conclusive on this assessment that there is actually a psychiatric disorder that was related to work present.”

Treating and clinical records

There is a large volume of treating material that is relevant to the dispute. Dr Xu is Ms Xu’s treating psychiatrist. He first saw Ms Xu on 30 January 2020, via referral from the general practitioner. He takes a history of “extraordinary personal difficult with Cornelia Wiebels from the very beginning”. He then sets out an extensive history of the conflicts. He diagnoses post-traumatic stress disorder and major depressive disorder with psychotic features, with a differential diagnosis of delusional disorder. He states, however, that “her paranoid believes were reality based and related to her work experience in Coolah, for example, Ms Jacinta Grey apparently is working in her job after Selina left”.
In a report dated 7 October 2022, the diagnosis post-traumatic stress disorder, psychosis as a result of post traumatic stress disorder and major depression. He disagrees with the diagnosis of schizophrenia:
“I agree that Ms Xu did have psychosis, i.e paranoid ideation. However she did not show other symptoms of schizophrenia. She was not totally delusional, her paranoid ideation are reality based and non- bizarre.”
He also comments on whether it is entirely constitutional:
“Further, even the schizophrenia is the correct diagnosis. It is not entirely "constitutional", it is combination of genetics and environment factors according to all the text books. Ms Xu had no prior symptoms. Her mental illness arose from this work place. One can reasonable concludes that the work place injury is an important contributory factor.”
He disagrees with the causation aspect of s 11A.
Mr Kimpton, the applicant’s treating psychologist, provides a report dated 16 December 2019. He provides a primary diagnosis of adjustment disorder with mixed anxiety and depressed mood, with secondary post-traumatic stress response.
Her treating general practitioner, Dr Chiang, provides a report dated 9 February 2020. He provides a working diagnosis of work-related anxiety/stress with post-traumatic stress disorder. He opines that “employment is definitely the major, if not the sole contributing factor for her predicament”.

There are other clinical records from the general practitioner’s office that I do not intend to set out in detail here.

SUBMISSIONS

Pursuant to the direction issued on 13 May 2025, the parties provided written submissions. I will briefly summarise those submissions here and refer to them in greater detail below. Per the direction, and as agreed between the parties the respondent provided submissions first, followed by the applicant, and then the respondent in response.

Respondent’s submissions

The respondent points out at the commencement of submissions, and repeatedly throughout, that the applicant is claiming a case under s 4(b)(i) of the 1987 Act and not 4(b)(ii), that is the contraction of a disease, where employment was the main contributing factor to the contraction of that disease (as opposed to an aggravation case).
The respondent submits that Dr Khan has not considered the possibility that some or all of the alleged actions did not actually occur, and were not real events. The respondent also notes that Dr Khan was not provided with any of the statements of Ms Xu’s work colleagues. The respondent then sets out a table comparing the evidence of the worker with the evidence given in the other statements provided.
The respondent specifically refers to the evidence of Ms Green in respect of the farm visit that occurred on 9 August 2019, where the applicant perceived that she was going through her phone and deliberately sabotaged her car. In those circumstances, as well as the evidence of other witnesses, Dr Khan’s evidence was based on false assumptions, and is thus of no probative value. This is in contrast to the evidence of Dr Ventura, who addressed the key question without being hampered by a lack of evidence.
The respondent also submits that the diagnosis of Dr Ventura would be preferred to that of Dr Khan. Similar factual submissions are repeated, with the respondent submitting that the opinions of Dr Khan and Dr Xu were not made in a “fair climate”. The respondent refers to the relevant case law on point.
The respondent then makes submissions on s 11A, submitting that Dr Ventura has carefully expressed her opinion on s 11A. The respondent submits that injury (if found) has resulted predominantly from actions in respect of discipline or performance appraisal, in respect of the applicant’s unsatisfactory work performance and approach to her work. The respondent submits that the evidence shows the actions of Ms Wiebels and other staff were reasonable in the circumstances. The respondent submits that the evidence of the respondent’s other employees should be prefer to the inherently unreliable evidence of the applicant. The test of reasonableness is an objective test, and does not factor in whether Ms Xu thought the actions were unreasonable.

Applicant’s submissions

The applicant submits that the diagnosis of schizophrenia stands alone across the balance of the medical evidence, both treating and qualified.
The applicant refers to the treating notes of Dr Haghshenas, who records a first attendance with psychological symptoms on 31 May 2019. The examination appeared thorough and there is no record of hallucination. A diagnosis was made of adjustment disorder. By the next appointment, the applicant had booked to see a psychologist.
The applicant submits that it is not necessary to rely only on her account to place the medical attendance in context. Ms Kenney was of the view that the applicant, from the outset, felt overwhelmed with her new job, and there was a communication problem between her and her manager. This is similarly observed by Ms Green. The applicant told Ms Chapple that she was shy and not confident, in contrast with Ms Wiebels. There is support for this perception in the statement of Ms Thompson. These factual observations are not dependent on the applicant’s account, but establish objective evidence for the occurrence of real events in the workplace.
The applicant then criticises Dr Ventura’s assessment. Some of the material post dated her reports, but she makes no comment on what she was provided, and took no history of the applicant’s first attendance. The circumstances of that attendance were in no sense suggestive of delusional aetiology. The applicant submits that it is curious that the doctor concluded that the injury was in no way related to employment, but was prepared to maintain that in the alternative, it was wholly or predominantly caused by reasonable actions of the employer.
The applicant acknowledges that she bears the onus of proof. In this respect, the most potent evidence is found in the treating medical opinions. Prima facie, the treating general practitioner establishes the onset of psychological symptoms related to work. The applicant was then treated by Dr Chiang in Melbourne, from 30 August 2019. He didn’t offer a new diagnosis but referred her to a consultant psychiatrist. The applicant makes submissions about the prescriptions provided for medicating Ms Xu being consistent with the treatment of depressive symptoms.
Dr Xu makes it clear that even if schizophrenia is the correct diagnosis, it is not entirely constitutional. He has clinical advantages over Drs Ventura and Khan. The applicant nevertheless relies on the opinion of Dr Khan who had access to the opinions of the treating practitioners and supports a diagnosis. Both the objective factual matrix and medical opinions support a finding that the applicant suffered a psychological injury, being a depressive condition resulting from her perception of real events in the workplace.
In respect of the s 11A defence, the applicant submits it fails on two bases. The first is that the applicant relies on a series of events having a cumulative effect, being challenges of work duties, the applicant’s view that she was asked to do work outside of her duties, and the response of her supervisor. The second problem is that the respondent’s case is not directed to s 11A and Dr Ventura’s answer is compliant and unhelpful. The applicant submits that the respondent has failed to adduce medical evidence in the manner contemplated by DP Snell in Hamad v Q Catering Limited [2017] NSWWCCPD 6 (Hamad).

Respondent in response

The respondent submits that AV v AW [2020] NSWWCCPD 9 places an onus on the applicant to bring evidence to satisfy the Commission that employment was the main contributing factor to the disease condition. The respondent’s case is that she has failed to bring the evidence. No expert has undertaken the required exercise of identifying the work and non work-related factors that may have brought about the applicant’s illness.
The respondent submits that the initial diagnosis of 31 May 2019 of an adjustment disorder is not mentioned elsewhere and should be dismissed. Dr Xu did not address s 4(b)(ii) of the 1987 Act and did not address the lay evidence.
Dr Khan did not state that the applicant perceived she had been targeted, but simply accepted that each of the eight “actions” had taken place. He paid no attention to whether the actions took place, which in large part may be understandable, since Dr Khan was not provided with any of that evidence. The shortcomings of the applicant’s evidence are not addressed in submissions.
In response to submissions about s 11A, the respondent submits that Dr Ventura was clearly invited to answer the question “in the alternative”, and there is nothing improper or inconsistent in that approach. Experts are often asked to make assumptions and entitled to express alternative opinions based on assumptions.

FINDINGS AND REASONS

There are two issues in this case – injury and s 11A. Accordingly, I must first determine the injury issue before considering the respondent’s defence under s 11A. There is consistent medical opinion that Ms Xu suffers psychological symptoms. There is a large variance in diagnosis and differing opinions as to the cause of Ms Xu’s psychological symptoms.

Injury

As the respondent points out, the applicant’s case on injury is solely pursuant to s 4(b)(i) of the 1987 Act, that is a disease injury, “a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease”. The respondent was at pains to note that this is in contrast to the aggravation, acceleration, exacerbation or deterioration of a disease.
This is the case in part due to the nature of the competing diagnoses for Ms Xu’s psychological condition, as well as an earlier (albeit minimal) history of psychological issues.
In determining whether the applicant has suffered a psychological injury to which employment was the main contributing factor, there are a series of factual issues that must be determined (more so than in many cases). This is not purely a difference of medical opinion on a causal question, but rather a factual dispute as to whether many of the incidents, alleged to have occurred by Ms Xu, actually occurred.
That factual dispute is relevant for the overarching concept of the “perception of real events”, as set out in State Transit Authority of NSW v Fritzi Chemler [2007] NSWCA 249 and Attorney General’s Department v K [2010] NSWWCCPD 76 (AG v K). DP Roche provided a useful summary of the relevant issues at [52] of that case:
“(a) employers take their employees as they find them. There is an ‘egg-shell psyche’ principle which is the equivalent of the ‘egg-shell skull’ principle (Spigelman CJ in Chemler at [40]);
(b) a perception of real events, which are not external events, can satisfy the test of injury arising out of or in the course of employment (Spigelman CJ in Chemler at [54]);
(c) if events which actually occurred in the workplace were perceived as creating an offensive or hostile working environment, and a psychological injury followed, it is open to the Commission to conclude that causation is established (Basten JA in Chemler at [69]);
(d) so long as the events within the workplace were real, rather than imaginary, it does not matter that they affected the worker’s psyche because of a flawed perception of events because of a disordered mind (President Hall in Sheridan);
(e) there is no requirement at law that the worker’s perception of the events must have been one that passed some qualitative test based on an ‘objective measure of reasonableness’ (Von Doussa J in Wiegand at [31]), and
(f) it is not necessary that the worker’s reaction to the events must have been ‘rational, reasonable and proportionate’ before compensation can be recovered.”
The applicant does not need to prove that every event complained of occurred, or exactly as alleged by her (in contrast with other witnesses, who may have witnessed the events occurring in a different way). She must prove that an environment existed that caused her work injury (Baker v Southern Metropolitan Cemeteries Trust [2015] NSWWCCPD 56 at [114]):
“In a case where, as here, it is alleged that a hostile work environment resulted from numerous events over a long period, the claim does not fail because one or two of the alleged events may not have occurred, or may not have occurred exactly as alleged. In such a case, an Arbitrator must assess whether, considering the evidence overall, the worker perceived that a hostile work environment existed. The Arbitrator failed to undertake that exercise.”
The respondent makes much of the applicant’s pleading of her case and how Dr Khan expresses his opinion. The applicant’s injury description, in the Application, appears as follows:
“The Applicant was the subject of repeated overbearing and aggressive comments directed to her from her manager and, additionally, she was required to undertake duties beyond the scope of her classification as project manager with insufficient resources and training to undertake such duties.”
The respondent describes Dr Khan’s opinion as being based on eight “actions”, which did not in fact occur or were factually false:
“she was subjected to protracted workplace stressors whereby she felt targetted, bullied, harassed, isolated, excluded, unsupported, ignored and dismissed by her colleagues as well as management”
Whilst the applicant must prove her case and that case must be determined on the material before me, the totality of the evidence must be considered. That extends beyond the totality of the report of Dr Khan, but to all of the material available before me. The applicant relies on the medicolegal opinion of Dr Khan, but also presents extensive treating evidence to support her case.
On the other hand, there is a clear factual dispute as to whether certain events occurred. The respondent has presented an almost overwhelming amount of factual evidence through the over 100 pages of statements, from eight different work colleagues of Ms Xu, who often had very little actual interaction with her. I do not need to be satisfied that every single fact alleged by Ms Xu occurred. I must be satisfied on the balance of probabilities that she suffered an injury. She does not need to prove that she was bullied or harassed.
Having considered the factual material, as well as the contemporaneous medical material, I make the following factual findings.
Ms Xu commenced with the respondent on 13 May 2019. She came to a regional NSW role from Melbourne, with no exposure to the area, no support systems in place, and in a team that, from my consideration of the various statements, had a fairly established presence. Many of the employees had been there for a considerable period.
Ms Xu’s supervisor was Ms Wiebels. There is a clear, and I believe can be undisputed, significant personality difference between the two individuals. The first impression of Ms Xu, from other staff members, was that she was friendly (see statement of Ms Nasmith), but potentially immature or had a different attitude towards office life (Ms Grammer). Ms Chapple records that Ms Xu told her she was a “shy and not a strong and confident person”. This was said to be in contrast with Ms Wiebels, who Ms Xu described as “a very strong personality”. Ms Chapple also notes that Ms Wiebels had not previously employed anyone in Ms Xu’s position. It may be that her expectations of who filled that role were different to the reality brought by the applicant. Ms Wiebels says as much in her statement of 30 June 2020, when she describes Ms Xu affecting her twice:
“Firstly, by her appointment not actually helping in reducing workload due to her inability to following instruction and she was incapable of doing the role despite her qualifications. Then secondly the mental stress that this has caused me following her accusations.”
On the other hand, there is consistent evidence of Ms Wiebels being quite forthright and direct in how she treated other staff. Ms Chapple describes her as being “straight up with people”. Ms Green states she told Ms Xu that she and Ms Wiebels “have very different personalities and I think you need to work out how to communicate with people different to yourself”. Ms Thompson describes Ms Wiebels as “abrupt in her tone” and acknowledges the cultural differences between the two:
“My response to Selina on these occasions was to explain that I felt there were certain cultural differences affecting the relationship between them. In this regard, I explained to her that Cornelia was German by background and that in my experience, she could come across as abrupt in her tone on some occasions without meaning to be this way.”
This give support to the conclusion that there were occasions where there were real events, communications or discussions, where Ms Xu misunderstood the tone of Ms Wiebels. That is, a perception of real events, rather than the events not actually occurring (which I would accept takes the matter outside of the realms of AG v K).
Next there is a clear and consistent history of Ms Xu crying, in the workplace, very early on in her employment with the respondent. This is recorded in the statements of Ms Nasmith, Ms Grammer (in the first week “crying and blubbering and told me that she was given too much work”), Ms Chapple (more on a hearsay basis), and Ms Thompson (although she refers to Ms Xu colloquially “crying on her shoulder” over the telephone). Surprisingly, Ms Wiebels makes no mention of observing any incidents of Ms Xu crying in the office.
It is unusual that a worker would be crying and feeling overwhelmed within such a short period of starting a new role. That does, in my view, lend some credence to the applicant’s case.
The first major issue, repeated in multiple sources, occurred on 23 May 2019. This is when Ms Xu started keeping track of the incidents that occurred. This is 10 days after Ms Xu started employment. Ms Xu describes making a mistake in her timesheet. This is confirmed by Ms Wiebels in her statement of 30 June 2020. There was an error, Ms Wiebels made corrections, and then Ms Xu wasn’t happy with how the worksheet looked, so she wanted to have a new version signed. Ms Wiebels “repeated my instruction to her to sign the corrected time sheet, scan and email it to the payroll officer”. This occurred on the tenth day of the applicant’s employment, whilst she was no doubt finding her feet, in a regional town, unfamiliar with the policies and procedures of her new employer, and wanting to make a reasonable first impression.
Once again, this is an action that occurred. It may be that there was a misunderstanding between the applicant and Ms Wiebels, or that Ms Xu took it in a way that was not intended. This interaction fits within the “perception of real events” per AG v K.
Ms Xu then felt as though she was unsupported and that she was subject to “aggressive behaviour” nearly every day. She describes Ms Wiebel’s door as being “always shut” which again is confirmed by Ms Wiebels. It is readily understandable that a closed office door is not inviting of interruptions. This is a real event that has potentially been misinterpreted.
Ms Xu raises an issue about questions regarding her qualifications. Ms Wiebels confirms that she asked “HR to confirm the qualifications the claimant had from her personnel file”. Ms Wiebels goes on to state that she was not aware the applicant went to Melbourne to get the information. That is not the relevant question or complaint of the applicant. It is, consistent with how her case is pleaded, that she was unsupported by her manager. This went as far as her manager questioning her qualifications for the role in which she was employed.
There is a history given of a trip to Dubbo. Ms Wiebels confirms the trip took place, but does not recall telling Ms Xu to eat when she gets home. She does acknowledge that if she asked Ms Xu to work through lunch, she would have offered her to leave early. This supports the applicant’s assertion that she worked through lunch on that occasion. I accept on the balance of probabilities that this occurred. Perhaps with a different employee this would not have been an issue at all. But Ms Xu’s perception of this event is that it was part of the pattern employed by Ms Wiebels towards her, in a bullying and harassing way.
The applicant asserts that Ms Wiebels “picked out every little thing”. It is difficult to determine precisely what this means. However, in response Ms Wiebels states that “it’s different to the claimant not being able to accept that she has made errors or being unable to follow through with instructions”. Whilst I accept that there is a difference between excessive nit-picking and underperformance, that does not exclude that these issues could have occurred. Again, these were real events that Ms Xu misperceived.
There are issues that occurred whilst Ms Wiebels was on holidays. At that time Ms Xu was around three weeks into a new role. Tasks were assigned to Ms Xu whilst Ms Wiebels was on leave, including attending a meeting. Whilst Ms Wiebels “would not have anticipated this as a difficult task that would have caused any stress”, she had been employed by the respondent for a period of time whilst the applicant had been there for three weeks. The General Manager, who interacted with Ms Xu whilst Ms Wiebels was on leave, indicated that “he had the impression that the claimant did not have sufficient understanding of what she was doing”. This may very well have been the case. There seems to have been a misunderstanding, from the start, about the applicant’s role and expectations therein.

There was an issue around a water project plan, that involved supervisors providing information to Ms Xu. Ms Wiebels was on leave whilst Ms Xu was supposed to be working on this plan. The task was not completed on her return from leave. Ms Wiebels does not deny that Ms Xu contacted the relevant supervisors, but that “there was no written correspondence between Selina and the Supervisors until the day before I was returning from leave”. Again, this is a real event that occurred. Ms Wiebels clearly had a different expectation around how tasks would be completed. Ms Xu explains what her conversations with the supervisors revealed. It is not incomprehensible that she would have been ignored.
There is a difference of opinion around the responsibility of a Water Project Engineer. Ms Xu felt that there were duties she was asked to complete outside of her position description, including project management and administrative tasks. Ms Xu felt that there were areas beyond her knowledge and qualifications. This is a real event – a difference of opinion about responsibilities. I do not need to determine what was and was not within scope of a certain role. Ms Xu perceived one thing. Ms Wiebels perceived something different. This is expressly within the concept of a “perception of real events”.
There are two reported events involving miscommunications that both Ms Xu and Ms Wiebels have perceived vastly differently. There were discussions about a report and about saying “bye”. Again, having reviewed the two accounts across multiple statements, theses incidents occurred, it is just that Ms Xu perceived them in a certain way. After these events Ms Xu went as far as to inquire as to whether she could install a camera in her office.
Ms Xu then took some sick leave. Ms Wiebels acknowledges contacting her whilst she was sick (probably with justification, at least from her perspective, as she needed to know what was happening with certain work). It cannot be said that this was not a real event.
A major incident occurred on 25 July 2019, which was a probation period review following Ms Xu’s first three months of employment. This incident clearly occurred and there is documentary evidence of it. This forms one part of a series of events that had transpired from very early in the period of the applicant’s employment. An official letter was sent on 31 July 2019. I found this letter curious. It came directly from Ms Wiebels, and reads as a laundry list of issues Ms Wiebels had with the applicant. Is not headed as an official warning. It certainly does not read as minutes of the probationary review meeting. There is nothing positive in the correspondence about Ms Xu’s performance (but perhaps, given all that had occurred as set out above, Ms Wiebels had nothing positive to say). It does not indicate whether Ms Xu was on track to pass her probation, although I think it would be difficult to infer that from the document.
Soon after the probationary review meeting (and before the letter was sent on 31 July 2019) Ms Xu had a conversation wishing to make a complaint or lodge a grievance about Ms Wiebels. That grievance was particularised in correspondence on 6 August 2019. There are very general allegations made by Ms Xu, but Ms Xu did attach the document headed “My diary”, which is also in evidence before me. I accept that there are no specifics provided in the grievance document, including specific events that occurred, although more detailed allegations are provided under the “My diary” document.
A formal response was provided to the grievance on 16 August 2019. The outcome was to reject all allegations made by Ms Xu as being unsubstantiated and that Ms Wiebels had taken reasonable management action in a reasonable manner. No doubt the author (Mr Bailey) was entitled to reach that conclusion. It may not have been the conclusion someone else reached, including someone external to the organisation. I do, again, find it curious that the document then makes specific allegations about Ms Xu’s conduct, suggesting that she had breached a clause of the respondent’s workplace behaviour policy. It's not clear why these issues were raised in that correspondence, that was purportedly an outcome of a grievance raised by Ms Xu.
Ms Xu worked for one further week. There was an issue regarding the finalisation of invoices in relation to a project that had apparently commenced prior to Ms Xu starting. There was clearly some confusion about authorisation levels and the like. Ms Xu initially declined to approve the invoice (for reasons that may or not have been true), but, according to Ms Wiebels, eventually completed the task. Ms Wiebels acknowledges requesting information again after Ms Xu had responded to an earlier request. It is entirely conceivable that Ms Xu, who had in fact responded to a request from her supervisor, felt that this conduct was in the nature of bullying or harassment.
The applicant has given histories of what other staff members told her to do about Ms Wiebels. The history of what occurred in those conversations is, at times, strongly disputed. There were comments that Ms Xu allegedly made about Ms Wiebel’s husband, that other staff encouraged Ms Xu to report Ms Wiebels, and that there were other complaints made about her. It appears that consistently those conversations took place but the content of those conversations differs as to what, exactly was said, or what was intended. There are multiple possible explanations for those inconsistencies here, including the vagaries of memory over time, the perception of Ms Xu, and those things were fictions, made up by the applicant. I think on the balance of probabilities they probably fall into a mix of the first two. I have no reason to suspect that the applicant has made up entire conversations. Based on her history of misunderstandings in communication, it is more likely that Ms Xu misunderstood what her colleagues were suggesting.
The major discrepancy here lies in a weekend getaway that Ms Xu took at Ms Green’s house. Ms Green states that it would not be unexpected that Ms Xu would be overwhelmed in her first few weeks of work, and that she took it upon herself to give her support. Ms Xu then attended Ms Green’s farm, on the weekend on 9 August 2019. She had two phones. Ms Green took photos for Ms Xu, who would then upload them to We Chat. Ms Xu had a flat tyre, which Ms Green’s husband changed for her. There was a potential of a missing phone.
Ms Xu ultimately discovered that there was a piece of metal stuck in her tyre. The respondent describes this as the “flat tyre sabotage conspiracy”. Again, this is a real event. This was close to Ms Xu ceasing employment with the respondent. She had reported psychological symptoms to her doctor. She perceived something that was no doubt innocuous as part of a bigger issue she had with her employer. The event occurred; Ms Xu perceived it to be something different to what it was.
Ms Xu first saw a local general practitioner on 31 May 2019. Dr Haghshenas records:
“CC: mental health stress

recent work

issues with work colleague

could not sleep last few nights

distressed

crying”
The diagnosis at that time was stress and adjustment disorder. By 11 July 2019, when Ms Xu next saw Dr Haghshenas, he records “lots of issues at work” and that Ms Xu had booked a psychologist. On 24 July 2019, Ms Xu was clearly concerned about her “HR review at work tomorrow”, was “teary and anxious”. Importantly, in respect of the diagnostic dispute, her thought form was normal, content normal, and no delusions. She had no hallucinations, and her perception was normal. She had a good insight into the situation. This is critical, contemporaneous evidence that runs counter to the narrative that Ms Xu was delusional. It supports her assertions that real events were occurring, that she perceived as being in the nature of bullying and harassment.
Ms Xu then went to see Dr Chiang in Melbourne, as she had left Coolah. She first saw him on 25 August 2019. He records that she had “been subjected to bullying by her superior”. At that time she exhibited signs of anxiety, and a diagnosis of “W/C anxiety/stress with ?PTSD”. On 30 August 2019, Ms Xu exhibited signs “of quite marked anxiety”. By 4 September 2019, she had “W/C mental trauma with severe depression and Post-traumatic Stress Disorder”. The records continue in a similar vein.
There is a dispute about diagnosis. It is necessary to find a psychological injury occurred. There are differential diagnoses postulated for that injury. The applicant’s early clinical and treating evidence provides a diagnosis of an adjustment disorder, moving into a depression. There is a consistent rejection of a diagnosis of post traumatic stress disorder.
Dr Khan diagnosed a persistent depressive disorder and generalised anxiety disorder. Dr Ventura diagnosed a delusional disorder initially, and then schizophrenia. He states she has a history of delusions and hallucinations. The only history of hallucinations is recorded in the supplementary report of Dr Ventura. It is not repeated elsewhere and explicitly denied in the clinical notes.
Dr Khan goes to lengths to explain why he disagrees with the diagnosis of delusional disorder. He acknowledges that she presented with paranoid thoughts but “these cognitions are congruent with the protracted workplace psychological trauma she had to endure”. There is a place-based component to this as well, as Ms Xu was living remotely, in a small rural town, with no support. Others around her had been there for many years. She had a different cultural background.
I acknowledge that Dr Khan did not have the voluminous witness statements, which I have considered and referred to above. This does reduce the weight that can be given to his opinion. On the other hand, as the applicant submits, Dr Ventura provides a diagnosis without any apparent consideration of the clinical material, which shows from very early on in the employment relationship significant symptoms of anxiety. The diagnosis of a delusional disorder is inconsistent with those clinical records.
I prefer the opinion of Dr Khan. The statements of Ms Xu’s colleagues corroborate that she was in an environment where she perceived she was being targeted. She had various communication difficulties. She was not adequately supported from very early on in her employment. The respondent may have preferred an applicant that was better able to “hit the ground running” in the role, but they chose Ms Xu.
Much was made in the respondent’s submissions of the difference between s 4(b)(i) and (ii) in terms of the case brought by the applicant. I do not think those submissions amount to much. Ms Xu had an earlier attendance of a mental health nature in 2016. Her doctor provides an opinion that she has contracted a disease of a psychological nature in the course of her employment. I accept that opinion.
There are no other factors that can be identified as contributing to the work injury. I am satisfied that Ms Xu was exposed to real events in the workplace, and she perceived those events in a certain way, that caused her a psychological injury, being the contraction of a disease. Her employment was the main contributing factor to that injury.

Section 11A

The respondent also relies upon the defence in s 11A of the 1987 Act as an alternative, should injury be found. That relevantly provides:
“(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
The respondent relies on actions in respect of discipline and performance appraisal. This is, in part, reliant on the opinion of Dr Ventura who, after being asked an extensive question (of close to a page) about the section opines:
“I conclude that should it be accepted that the worker has suffered a definable psychiatric disorder to which her employment was the main contributing factor, such psychiatric injury was wholly predominantly caused by action taken or proposed to be taken by the employer with respect to discipline and/or performance appraisal.”
I would first note that there is no explanation for that conclusion. Dr Ventura has not explained what actions or proposed actions he has relied on or accepted as occurring that support that opinion. I would also note that in his supplementary report, when asked a similar (albeit much shorter question), Dr Ventura provides the following opinion:
“I have no evidence to consider that the injury or disorder was wholly predominantly caused by actions taken or proposed to be taken by the employer with respect to discipline or performance appraisal.”
It is difficult to reconcile these two opinions. The first appears to be almost a rote opinion, as if it was an expectation, based on the question asked, that he would answer in the affirmative. The second opinion states that he has “no evidence” to reach the conclusion in question. It could be posited that, perhaps at least in respect of the supplementary report, he has considered some evidence in reaching his conclusion. Again, it is not clear what that evidence is.
I have endeavoured to outline, in detail above, the events that were causative of Ms Xu’s psychological injury. Whilst the consideration of the statutory tests in s 4 and s 11A must, of necessity, be undertaken separately, the factual underpinnings to reach conclusions in respect of those sections often overlap.
It is true that from an early point Ms Wiebels was not happy with Ms Xu’s performance. That does not make her actions in respect of discipline or performance appraisal. The principles in respect of s 11A(1) of the 1987 Act, in respect of discipline, were discussed in Northern NSW Local Health Network v Heggie [2013] NSWCA 255:
“The following propositions are consistent both with the statutory language and the authorities that have construed s 11A(1) of the WC Act:
(i) A broad view is to be taken of the expression "action with respect to discipline". It is capable of extending to the entire process involved in disciplinary action, including the course of an investigation.
(ii) Nonetheless, for s 11A(1) to apply, the psychological injury must be wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer.
(iii) An employer bears the burden of proving that the action with respect to discipline was reasonable.
(iv) The test of reasonableness is objective. It is not enough that the employer believed in good faith that the action with respect to discipline that caused psychological injury was reasonable. Nor is it necessarily enough that the employer believed that it was compelled to act as it did in the interests of discipline.
(v) Where the psychological injury sustained by the worker is wholly or predominantly caused by action with respect to discipline taken by the employer, it is the reasonableness of that action that must be assessed. Thus, for example, if an employee is suspended on full pay and suspension causes the relevant psychological injury, it is the reasonableness of the suspension that must be assessed, not the reasonableness of other disciplinary action taken by the employer that is not causally related to the psychological injury.
(vi) The assessment of reasonableness should take into account the rights of the employee, but the extent to which these rights are to be given weight in a particular case depends on the circumstances.
(vii) If an Arbitrator does not apply a wrong test, his or her decision that an action with respect to discipline is or is not reasonable is one of fact.”
I accept that there are some actions, taken by the respondent, that potentially fall within this concept of discipline. I do not accept that the injury was “wholly or predominantly caused” by those actions.
Ms Xu was clearly overwhelmed from very early on in her employment. She was crying in the office on multiple occasions. She had significant difficulties communicating with her supervisor. She was in a new town. Ms Wiebels found her “incapable of doing the role despite her qualifications”. In this context, Ms Wiebels was critical of her ability to perform simple tasks such as filling in a timesheet, which she made her complete multiple times. Ms Xu is not alone in finding Ms Wiebels’ tone confronting. Ms Thompson describes it as “abrupt”. Others may have been better positioned to cope with her general demeanour and expectations.
Ms Xu felt unsupported. Ms Wiebels confirms her door was shut due to outside factors. That is hardly an action in respect of discipline, but it was an action that affected Ms Xu and contributed to her psychological injury. She then raised questions about Ms Xu’s qualifications. Again, this was not part of a formal investigation, this was all in the context of Ms Wiebels having doubts about Ms Xu’s capacity for the role. It is understandable that this has contributed to, and form part of the events that have caused Ms Xu’s psychological injury.
Part of the interactions between the two employees did involve some discipline. It is of course open to an employer to provide feedback. I am not satisfied, however, that that was the whole or predominant cause of the injury. The workplace environment, that Ms Xu felt was “toxic”, as well as the ongoing interpersonal issues she had with Ms Wiebels, her feelings of a lack of support, and her perceptions of real events that occurred are all predominant causes, more significant than any disciplinary measures taken.
The other category relied upon is performance appraisal. There was, during the course of Ms Xu’s employment, some incidents of performance appraisal. The most notable of these is the probation review meeting that occurred on 25 July 2019, and the letter that was sent after that meeting. By that stage Ms Xu had seen her doctor on three occasions, the most recent the day before the meeting. She had been provided with a psychiatric diagnosis. She continued to work after that meeting and letter (in contrast to circumstances often seen where a worker will first attend a general practitioner immediately after performance appraisals are given) for almost one month. The issues with Ms Wiebels did not cease or change following those events.
The only other action taken in the period is the grievance lodged by Ms Xu and the outcome of that. In my view that constitutes neither performance appraisal nor discipline. In any event, the outcome of that procedure, as I have said, was curious.
I am not satisfied that the applicant’s injury was wholly or predominantly caused by actions of the employer in respect of performance appraisal.
In circumstances where I am not satisfied that the applicant’s injury has been wholly or predominantly caused by actions of the employer with respect to one of the categories in s 11A, it is not necessary to consider whether the employer’s actions were reasonable in the circumstances. I would find that difficult to accept, given the issues I have outlined above.

SUMMARY

I have made a finding of injury in favour of the applicant and rejected the respondent’s defence pursuant to s 11A. As indicated to the parties and acknowledged in the submissions, the appropriate course is to refer the matter for an assessment of permanent impairment. The outstanding issue of weekly compensation payments will be deferred, following that assessment of impairment. I would hope that following the outcome of the medical assessment, the parties are able to reach an agreement on the issues of that nature.

[2025] NSWPIC 364

30 July 2025