Court of Appeal (WA)|2003-12-18|Before: Malcolm CJ

Cerebos (Australia) Ltd v Koehler [2003] WASCA 322 (18 December 2003)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : CEREBOS (AUSTRALIA) LTD -v- KOEHLER [2003] WASCA 322

BETWEEN : CEREBOS (AUSTRALIA) LTD (ACN 004 304 803)

Negligence - Employer's liability - Whether unsafe system of work - Principles relevant to claim for psychiatric injury - Claim by retail merchandiser - Findings at trial that excessive work load caused a major depressive illness - Absence of warning signs - Whether a reasonable employer could have foreseen a risk of injury - Whether employer entitled to assume there will be a normal reaction to the conduct complained of - Employer held not liable

Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301

Black v Motor Vehicle Insurance Trust [1986] WAR 32

Bresatz v Przibilla [1962] HCA 54; (1962) 108 CLR 541

Gamser v Nominal Defendant [1977] HCA 7; (1977) 136 CLR 145

Gillespie v Commonwealth of Australia (1993) Aust Torts Rep 81-217

Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2003) Aust Torts Rep 81-681

Kember v Thackrah [2000] WASCA 198

Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638

Mannall v New South Wales (2001) NSWCA 327

March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506

Miller v The Royal Derwent Hospital Board of Management & Anor (1992) Aust Tort Rep 81-175

Morris v Zanki (1997) 18 WAR 260

Newman v Nugent (1992) 12 WAR 119

Parker v Hill [2000] WASCA 272

Plant Fisheries Pty Ltd v La Rosa [1968] HCA 62; (1968) 119 CLR 118

Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121

Sinnott v F J Trousers Pty Ltd [2000] VSC 124

State of New South Wales v Lepore (2003) Aust Torts Rep 81-684

State of New South Wales v Seedsman [2000] NSWCA 119

State Rail Authority v Earthline Construction Pty Ltd [1999] HCA 3; (1999) 73 ALJR 306

Sullivan v Moody (2001) 75 ALJR 1570

Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327

Walker v Northumberland County Council [1994] EWHC QB 2; (1995) 1 All ER 737

Wodrow v Commonwealth of Australia (1993) Aust Torts Rep 81-260

Woods v Multi-Sport Holdings Pty Ltd [2002] HCA 9; (2002) 76 ALJR 483

Wylie v South Metropolitan College of TAFE [2003] WASCA 34

1 MALCOLM CJ: In my opinion, this appeal should be allowed for the reasons to be published by Hasluck J. There is nothing which I would wish to add.

2 MCKECHNIE J: For the reasons given by Hasluck J, I would allow this appeal.

3 HASLUCK J: The appellant, Cerebos (Australia) Limited, has appealed against the decision of Commissioner Greaves given on 5 June 2002 in the District Court in which he awarded the respondent, Nuha Jamil Koehler, $856,742.81 by way of damages for psychiatric injury occurring in the workplace. The injury was found to be consequent upon workplace conditions.

4 The grounds of appeal raise issues concerning liability and further issues concerning the assessment of damages.

5 The respondent was born on 23 August 1954 in Baghdad, Iraq where she lived until the age of 18. Her husband had been raised in Australia and it seems that in 1989 the family moved to Western Australia where the respondent obtained employment with various retail businesses for short periods. In November 1994, she obtained a full-time position with the appellant as a sales representative. She said in evidence at the trial that at the time she took up the position her health was excellent and she had never suffered from serious illness, depression or psychological disorders.

6 The role of the respondent was to negotiate sales of the appellant's products to independent supermarkets. After the products were delivered to the supermarkets, a merchandiser employed by the company would set up the display of the relevant goods in the supermarket where necessary. In effect, each sales representative was supported by a merchandiser who was involved in moving and lifting products as required.

7 In early 1996, the appellant company lost an important franchise to handle the products of Tetley Tea in Australia. In March 1996, Mr Chris Budd, the State Manager of the appellant, called the respondent to a meeting at his office with two senior members of his staff, namely, Mr Paul Kerr and Mr John Douglas. The respondent was handed a letter dated 26 March 1996 enclosing a termination cheque for $4,975.95 and was informed that as a consequence of the loss of the Tetley Tea account

there was to be a reduction in the national sales workforce. The letter set out the details of the respondent's redundancy package and termination pay.

8 However, according to the respondent, the three men then offered her the position of a merchandiser upon the basis that there were prospects of her being able to resume her full-time position as a sales representative in about six months time when sales turnover increased. This persuaded the respondent to accept the offer. On 29 April 1996 she began part-time employment as a merchandiser.

9 The respondent said in evidence that on her first day in the new position it struck her that the territory she was expected to cover in the northern metropolitan areas of Perth was too large. She complained to Mr Radford (the accounts executive) after the first week and subsequently to Mr De Coster (a field supervisor), Mr Allan (the accounts manager) and to the State Manager, Mr Budd. She protested about the size of the area, the number of stores and the time available over three days as a part-time merchandiser to service the area. These complaints were reflected in a lengthy memorandum to Mr Budd dated 20 May 1996. The respondent said that there were two ways to solve the problem, namely, to reduce the number of supermarkets to be covered and to work on a fourth day. She wrote a memorandum dated 28 May 1996 to Mr Allan to similar effect.

10 The respondent said in evidence that her territory and workload were not reduced as a result of her complaints. She said that she complained to Mr Budd in person on three occasions with the last occasion being in September. She referred to an entry in her diary dated 19 September 1996 which speaks of seeing Mr Budd about her workload. The respondent said in evidence that the reason why she continued in her part-time position when there was no response to her complaints was the prospect that at the end of six months she would be able to resume full-time work in her former position as a sales representative. She was referred also to a diary entry for 2 October 1996. In that entry she recorded that she was involved in heavy lifting and displays and could not take it any longer. She gave evidence that at that time she thought all her aches and pains were coming from the physical part of her job.

11 On 2 October 1996 the respondent concluded that she was unable to go on working. She consulted Dr Neil Hendry on that day. It seems that the initial consultations focused on the plaintiff's physical symptoms. According to Dr Hendry, it then became clear that there were significant stress-related issues leading to depression.

12 Dr Hendry referred the respondent to the rheumatologist, Dr John Hayes, who first saw the respondent on 23 October 1996. In his report of 31 October 1996, Dr Hayes recorded the history which the respondent gave him (which was similar to that which the respondent gave in evidence) and expressed the opinion that the respondent most likely had a work related "fibromyalgia syndrome".

13 This condition was the subject of considerable debate in rheumatological literature. I will return to these issues in due course. However, in essence, as appears from a report written by Dr Hayes dated 11 December 1996, he was of the view that the alleged pressure of the respondent's work appeared to be the precipitating factor in the onset of the respondent's symptoms. He said that fibromyalgia syndrome was thought to be a psycho-physical disorder resulting in pain amplification in certain people predisposed to developing this type of condition. He went on to say that the patient's psychological makeup in the first place is of significant importance in the development of the condition.

14 In January 1997 Dr Hayes formed the opinion that the respondent needed psychiatric help because many features of her anxiety and depression were clouding her clinical picture. He referred her to Professor Peter Burvill. In his report dated 3 April 1997 Professor Burvill said that the respondent complained of excessive tiredness, and widespread pain, involving areas as diverse as her neck, across her chest, her back, shoulders and down both arms and into her groin. Psychiatrically, her symptoms included increasing depression, marked insomnia, poor concentration, short term memory loss, marked lack of confidence, withdrawal from contact with people, loss of interest and ability to do her housework, not wanting to drive a car and continued feelings of anxiousness and tenseness.

15 Professor Burvill recorded similar symptoms when he saw her again on 13 March 1997. He said that he made a diagnosis of a moderately severe major depressive illness, associated with marked agitation and anxiety symptoms. He noted that there was no past history of psychiatric illness.

16 In the meantime, as I have indicated, the respondent had left her place of employment. The report of Ms Gisela Loader, Rehabilitation Consultant, dated 29 October 1996 addressed to the workers compensation insurer recorded this summary of the position:

"Nuha reports that she has experienced severe tiredness and pain in the shoulders, arms, neck, back, groin and feet following work for some months. The symptoms settled on her days off but recurred on returning to work. She noticed the first difficulties about one month after her employment situation and duties had changed at the beginning of May 1996. She reported her difficulties to management on several occasion (sic) from about July, requesting that her work load be rearranged. However this was not possible and she was asked to prioritise, which she found difficult to accomplish while maintaining high standards. The symptoms increased to the point where she felt she was not able to continue to work and consulted her GP Dr Hendry on 2/10/96 and referred to and seen by Dr John Hayes on 23/10/96. She has not returned to work so far."

17 The respondent said in the course of her evidence-in-chief at the trial that 2 October 1996 was the day on which she was not able to continue working (AB 481). She was referred to an entry in Mr Budd's diary on 4 October 1996 to the effect that he had received a doctor's notification of the respondent's arm, shoulders, back and feet pain which was said to be "the first I knew of Nuha's injury, as such". It seems that on 29 October he had a meeting with Gisela Loader from Commonwealth Rehabilitation Services about the matter.

18 In the course of her evidence-in-chief, the respondent referred to the complaints she had made after taking up the part-time position of merchandiser. Her evidence includes this passage (at AB 489C):

"All right. Was there any occasion in which your territory of workload was reduced as a result of your protest?---Never. In fact, it was the other way. They kept giving me their jobs on top of mine.

All right. I think we got to the point of looking at these diaries when you were explaining to us how you had raised your complaints with various members of the staff?---Yes.

I think we had got as far as asking you about meetings that you had with Mr Budd about your complaints?---Yes.

How many meetings did you have with him?---From memory, three.

What did you tell Mr Budd?---We already discussed the first two but we haven't discussed the third one.

Yes?---The third one was in September and I asked him if he knew any more about when would I be put back to full-time employment because in those 5 months the company was acquiring a lot more products and acquisitions, just like Paul Kerr said to me all along, back in March, so seeing that we had grown so much in products and of course that means a lot more work all the time, I thought I will ask when do they expect that I would go back to full-time, being as 4 months had already passed. He said he wasn't in a position to offer me anything on that. Nothing definite to tell me about that decision."

19 At a later stage in her evidence-in-chief, the respondent summed up her reasons for remaining in the position of merchandiser, notwithstanding her dissatisfaction. Her evidence about that matter included a passage to this effect (AB 503C):

"How did it come about that you persevered when there was no response to your various complaints and comments?---I thought I will put up with it until near 6 months and then go back to full-time because Paul Kerr had promised me that - he said that they're going to have more requisitions and more products and I was out there selling all these new ones and I can see the workload is getting more and more because the company's doing more and more requisitions so I thought, well, I'll stick it out because then after 6 months I'll have my old job back and then Bianca will work for me again."

20 In the course of her evidence-in-chief she also made some observations about the facts and matters bearing upon her inability to continue working in the part-time merchandiser position after 2 October 1996. Her evidence included a passage to this effect (AB 508C):

"Would you explain to his Honour what your general health condition has been since October 1996?---Just so different. I'm nothing to what I used to be. It's affected me 100 per cent and affected my family. You want me to go into detail?

Have you been able to work?---No, of course not.

What is it that has prevented you from working?---My brain doesn't operate the way it used to. I make a lot of mistakes. You want me to list to you all the things - or why I can't?"

21 In due course the respondent commenced legal proceedings. Her amended statement of claim asserts that she was employed by the appellant firstly as a sales representative and later as a sales representative and merchandiser. It was a term and/or an implied term of the contract of employment and/or it was the duty of the appellant to take all reasonable precautions for the safety of the respondent, not to expose the respondent to risk of damage or injury, stress or disease of which the appellant knew or ought to have known; to provide for the respondent a proper and safe place to work; to provide for the respondent a proper and safe system of work which provided for realistic demands and to enforce that system.

22 The claim goes on to allege that during 1996 the respondent was required to take on the duel role of merchandiser and sales representative for an area from Quinns Rock to Fremantle servicing 50 of the appellant's customers. During 1996 she was required to service the customers and to merchandise the products in 24 hours rather than in the 50 hours per week that had been allowed to her as a full-time sales representative. After June 1996 she became stressed and anxious and reported her problems to her immediate superior. She requested assistance and more realistic targets with regard to sales and servicing.

23 It is alleged in par 5 of the claim that in September/October 1996 she developed symptoms of complex fibromyalgia syndrome and a stress and anxiety disorder which developed into a major depressive illness "the psychiatric disorder". The development of her injuries and illness were said to be caused and/or contributed to by the negligence and/or breach of statutory duty and/or breach of contract of the appellant. Particulars of the appellant's alleged negligence include allegations that the appellant failed to properly train and supervise the appellant in the performance of her duties and failed to heed the concerns of the respondent regarding assistance, health and safety.

24 Particulars of the breach of statutory duty include reference of an alleged breach of s 19(1) of the Occupational Health, Safety and Welfare Act 1984 in that the appellant failed to provide and maintain a workplace and a system of work such that the respondent was not exposed to the hazard of fibromyalgia syndrome and psychiatric disorder.

25 I note in passing that the particulars of negligence and related particulars do not contain an allegation that at the time of taking up the position as merchandiser the respondent was susceptible to injuries of the kind subsequently complained of or that at any time prior to ceasing work she informed her superiors that there was a risk of such injuries occurring because of the demands being made upon her. The claim does not contain a plea that she was absent from work on various occasions during the period in question due to ill-health or stress and there was no evidence given at the trial to this effect.

26 The amended statement of claim goes on to set out particulars of the respondent's injuries and symptoms and particulars of treatment. As a result of her injuries the respondent is said to have suffered residual disabilities and loss of enjoyment of life and to require assistance with household tasks. The claim includes particulars of these matters and particulars of future loss of earnings and earning capacity.

27 By its amended defence and counterclaim, the appellant denied that the respondent was employed as a sales representative and merchandiser and asserted that she was employed as a merchandiser only. The employment contract was said to be subject to implied terms that the respondent would exercise reasonable care and skill for her own safety and, or alternatively, that she would not pursue any claim for a breach of contract in circumstances where the appellant was in breach of the employment contract by reason of the respondent having failed to exercise reasonable care in the performance of her duties.

28 The appellant joined issue with the respondent as to the allegations in the claim concerning liability and said further that the respondent was negligent in that she demanded the appellant allocate additional work and responsibility to her, imposed the role of a sales representative upon herself, and failed to take any or any adequate care for her own health by reason of such matters. The appellant counterclaimed for loss allegedly arising from breaches of the implied terms of the contract of employment relied upon by the appellant.

29 At trial, the respondent's case was supported not only by the opinions of Dr Hendry, Dr Hayes and Professor Burvill but also by the evidence given by other expert witnesses including Dr Skerritt who practises as a consulting psychiatrist at the Specialist Medical Centre, Joondalup Health Campus. Dr Skerritt said that his views coincided entirely with the view of Professor Burvill. He noted that two other experts called by the respondent, namely, Dr Tannebaum and Dr Ding, were essentially of the same opinion. He differed in many respects with the opinion of a psychiatrist called by the appellant, Dr Mustac, to the effect that the respondent was suffering from a fictitious disorder and was exaggerating her complaints because she believed she had been unfairly treated.

30 Dr Skerritt said in the course of providing an overview of his conclusions that (AB 211A):

"I was given a history which she gave in a complicated manner at the time of the first consultation of certain events to do with her occupation. It appeared to me that the stresses associated with those had provoked a very frank and obvious psychiatric disorder which nevertheless had physical implications, so from the beginning she complained of various aches and pains and a number of symptoms of psychiatric illness and a more psychological nature. It seemed to me that they represented diagnoses in the area of major depressive disorder and panic disorder with agoraphobia. There was a physical diagnosis of fibromyalgia which had been made very commonly. It's my view that the symptoms that are classified as fibromyalgia are really a part of an anxiety disorder, but nevertheless they represent considerable discomfort to the person in the way of aches and pains and fatigue and weakness. The symptoms of that illness seem to be fairly similar when I reviewed her quite recently."

31 At a later stage in his evidence-in-chief, he was asked to summarise his views about the relationship between the respondent's working conditions and her disability. He said this (AB 214C):

"I think the summary would be very similar to the one that I just gave that I think it was in the performance of the second part of her employment with the combination of unaccustomed physical activity and the frustration that she had in being able to deliver her work at the level that she had previously been accustomed are the main factors that generated the complicated combination of symptoms."

32 The learned Commissioner accepted that there was an onus upon the respondent to establish the existence of a relevant duty of care, a breach of that duty and the necessary causal relationship between any such breach and the injuries suffered by her. In considering the nature of the duty of care and whether a breach of such duty had occurred, his Honour took account of the views expressed in Council of the Shire of Wyong v Shirt & Ors [1980] HCA 12; (1980) 146 CLR 40 where Mason J said at 47:

"In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard response to be ascribed to the reasonable man placed in the defendant's position."

33 The learned Commissioner found that from 29 April 1996 the appellant allocated 50 stores to the respondent. He found that the respondent told Mr Radford on 29 April 1996 that she could not manage this allocation of 50 stores in 24 hours a week. He found that the appellant did not appoint a sales representative for the respondent's area after that date and expected the respondent to carry out the duties of a sales representative and merchandiser in that area between 29 April 1996 and 2 October 1996. He found that the respondent complained to Mr Radford, Mr De Coster, Mr Allan and Mr Budd as to the extent of the workload and the shortness of time for all the duties that she was asked to do.

34 He made various findings with respect to the medical evidence as follows (AB 76):

"I find upon the evidence of the plaintiff, Dr Neil Hendry, Dr John Hayes, Professor Burvill, Dr Skerritt, Dr Ding and Dr Dennis Tannenbaum that in and after October 1996 the plaintiff developed complex fibromyalgia syndrome and a major depressive illness. While Professor Burvill was of the opinion each condition should be seen as a separate condition in its own right with a common aetiology, I accept the evidence of Dr Skerrit that the distinction is one of classification only. I find on the evidence that in and after October 1996 the plaintiff developed these conditions which became manifest first in muscle pain and anxiety and then in severe depression which is now chronic, but under control with high dosages of anti-depressant medication. I do not accept the evidence of Mr Bell the plaintiff is suffering from a condition for which nobody can find a pathological cause. Dr Peter Connaughton deferred to psychiatric opinion. I found the evidence of Dr Zeklo Mustac lacked the careful analysis of Professor Burvill and Dr Skerritt and the more objective judgment which he claimed to bring to the case."

On the evidence of Dr Skerritt, I find the plaintiff's symptoms of illness were and are entirely attributable to her conditions of employment between April and October 1996.

These findings are sufficient to establish the allegation in par 5 of the statement of claim that in September/October 1996 the plaintiff developed symptoms of complex fibromyalgia syndrome and a stress and anxiety disorder which developed into a major depressive illness."

35 It was against this background that the learned Commissioner proceeded to a finding that the respondent's workload between 29 April 1996 and 2 October 1996 was excessive. This finding brought him to the first of various questions inherent in the reasoning of Mason J in the Wyong case, namely, whether a reasonable person in the appellant's position would have foreseen that a failure on its part to reduce the workload involved a risk of injury to the respondent, being injury of the nature of mental illness or other form of psychological injury of more than a transient form and in the nature of an illness.

36 The learned Commissioner concluded that with the knowledge of the industry and the particular workload of the respondent, the appellant required no particular expertise to appreciate and foresee that if it did not review its operation and the respondent's workload, that involved a risk of injury to the respondent of the kind which ensued. It mattered not that some might view the risk as unlikely. In the learned Commissioner's opinion the risk was not farfetched or fanciful and he concluded it was a real and therefore foreseeable risk which the appellant as an employer should have foreseen.

37 Having answered the first question in the affirmative, the learned Commissioner turned to the question of what a reasonable person would have done by way of response to the risk in question having regard to the magnitude of the risk, the degree of probability of its occurrence and the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the appellant may have had. He concluded that a reasonable person faced with the respondent's complaints would have investigated the complaints, evaluated the respondent's workload and considered whether, and if so what, changes to the system of work were necessary in the circumstances then revealed. It was open to the appellant to increase the respondent's hours or provide her with assistance.

38 The learned Commissioner was of the view that it is very likely intervention of the nature outlined would have minimised or prevented the injuries. The findings to this point were said to be sufficient to rebut the defence of contributory negligence and to dispose of the counterclaim that the respondent had failed to exercise reasonable care in the performance of her duties.

39 The learned Commissioner concluded this part of his judgment as follows (AB 86):

"I find, therefore, the defendant failed in its duty to ensure that all reasonable steps were taken to provide a safe system of working for the plaintiff between 29 April 1996 and 2 October 1996. I find the negligence of the defendant caused the plaintiff's complex fibromyalgia syndrome and psychiatric illness of common aetiology. It is not necessary to consider the alternative alleged breach of statutory duty of the defendant. The test for causation is that in March v E & M H Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 at 514. I turn, therefore, to the assessment of damages."

40 I pause to observe that the findings made by the learned Commissioner do not include any finding to the effect that prior to 29 April 1996 the respondent was in a state of ill-health or susceptible to depression or any stress related condition. There was no finding to the effect that at that time or in the months that followed the respondent thought of herself as being at risk of suffering a stress related injury or that she communicated concerns of that kind to her superiors.

41 I noted in earlier discussion that the respondent's pleaded case contained an allegation in general terms (at par 6(c) and (d) of the statement of claim) that the appellant failed to attend with the respondent on her round of duties to ascertain whether adjustments could be made to assist her health and safety and failed to heed the concerns of the respondent regarding assistance, health and safety. However, the evidence bearing upon the issue raised by this plea was comparatively scant and there appear to be no specific findings that prior to 2 October 1996 the respondent articulated or informed the appellant as her employer of a specific concern as to her health and safety. As I have indicated in earlier discussion, it seems that, notwithstanding her dissatisfaction as to the size of her workload, as late as her final meeting with the State Manager, Mr Budd, on or about 19 September 1996, she was hopeful that a full-time position could be found for her as a sales representative pursuant to the representation allegedly made at the time of her employment as a merchandiser. This suggests that the risk of being unable to continue at work because of concerns about health and safety issues had not been communicated to her superiors.

42 I note also that there are no findings to the effect that in the period 29 April to 2 October 1996 she was subject to absences from work due to ill-health or that her superiors had other reasons to suspect that she was susceptible to injury. The lack of any such findings is probably due to the fact that issues of this kind were not reflected in the statement of claim and were not supported by the evidence at trial.

43 Before turning to the grounds of appeal, it will be useful to look at the legal principles bearing upon a claim for damages arising out of an alleged work related injury.

44 The relationship of employer and employee requires the employer to take reasonable care to avoid unnecessary risks of injury to an employee: Hamilton v Nuroof (WA) Pty Ltd [1956] HCA 42; (1956) 96 CLR 18. The employer's duty includes the provision of a safe system and safe place of work and is non-delegable: Kondis v State Transport Authority of New South Wales [1984] HCA 61; (1984) 154 CLR 672. Emotional distress resulting in some disorder of the mind which is caused by a breach of duty can give rise to a liability for damages on the part of an employer: Mt Isa Mines Ltd v Pusey [1970] HCA 60; (1971) 125 CLR 383.

45 In Tame v New South Wales [2002] HCA 35 at par 140 Gummow and Kirby JJ observed that the duty to take reasonable care to avoid injury to the employee is governed by the same rules and has the same content, irrespective of the kind of injury or damage that can reasonably be foreseen. It is a duty to take reasonable care to eliminate all risks of injury that can be reasonably foreseen and avoided - whether they are risks to the employee's psyche, person or property.

46 In the present case, having regard to these authorities, the appellant accepted that it owed a duty to take reasonable care to avoid exposing the respondent to an unnecessary risk of injury, including psychiatric injury. This meant, having regard to the reasoning of Mason J in Wyong (supra), that the appellate court was concerned essentially with the question of whether there had been a breach of the duty of care. This led to the further question of whether a reasonable person in the appellant's position would have foreseen that the conduct complained of involved a risk of injury to the respondent.

47 This brings me to various previously decided cases dealing with the issue of foreseeability in circumstances where there has been an alleged breach of duty in cases involving psychiatric injury.

48 In Crombie v Uniting Church and Australia Property Trust (WA) (1997) 17 WAR 291 the Full Court took account of the reasoning of Mason J in Wyong (supra) and held that the existence of a foreseeable risk of injury does not of itself demonstrate a breach of a duty of care. The magnitude of the risk and its degree of probability also needs to be considered, along with other relevant factors, in order to determine the response of a reasonable person to the foreseeable risk. Accordingly, although an employer is obliged to provide, maintain and enforce a safe system of work, the employer's duty does not extend to guarding against every conceivable risk however remote or fanciful. The employer is only required to take reasonable care for the safety of employees, which does not mean that the employer must safeguard employees completely from all perils.

49 In that case, accepting the Judge's finding that the risk of stress-related injury to the appellant was reasonably foreseeable, the magnitude and probability of the risk did not require the respondent employer to have done anything further than it did. The appellant employee's complaints about lack of managerial support were in the most general terms, and the appellant had performed his job well in a largely unchanged work environment, without displaying abnormal behaviour.

50 In Tame v New South Wales (supra) the High Court held that a reasonable person in the position of the police officer concerned would not have foreseen that carelessly completing the traffic collision report in question involved a risk of inflicting a recognisable psychiatric illness to the appellant. It was therefore not reasonably foreseeable that a person would suffer such injury regarding a clerical error that was admitted and rectified. The claimant's reaction was extreme, the risk thereby fanciful and not one the law of negligence required a reasonable person to avoid.

51 It was held by the majority that a plaintiff whose personal idiosyncrasies suggest that they deviate from the nominal "normal fortitude" is not precluded from bringing an action in nervous shock. The notional standard of normal fortitude is the application of a hypothetical standard that assists the assessment of reasonable foreseeability of harm, not an independent pre-condition or bar to recovery. The statement that a plaintiff cannot recover for "pure" psychiatric damage unless a person of "normal fortitude" would suffer psychiatric damage by the negligent act or omission should not be accepted.

52 McHugh J observed at par 109 that once the notion of reasonableness regains its rightful place at the forefront of the negligence enquiry, it must follow that a defendant is entitled to act on the basis that there will be a normal reaction to his or her conduct. The position is different if the defendant knows that the plaintiff is in a special position. But otherwise the defendant should not be penalised for abnormal reactions to his or her conduct. He went on to observe that what is reasonable is to be judged by reference to the community's general knowledge of the effect of stressors on ordinary persons of normal fortitude. It is for the tribunal fact to determine whether the defendant ought to have reasonably foreseen that his or her conduct might cause a person of normal fortitude to suffer psychiatric injury.

53 Issues of this kind were recently considered by the Court of Appeal in Hatton v Sutherland [2002] EWCA Civ 76; [2002] 2 All ER 1. In that case, in each of four conjoined appeals, the defendant employer appealed against a finding of liability for an employee's psychiatric illness caused by stress at work. Two of the claimants were teachers in public sector comprehensive schools; the third was an administrative assistant at a local authority training centre; while the fourth was a raw material operative in a factory. In the first two appeals, the claimants had not told their employers that their health was suffering due to overwork.

54 The Court of Appeal held that there were no specific control mechanisms applying to claims for psychiatric (or physical) illness or injury arising from the stress of doing the work that the employee was required to do. The ordinary principles of employer's liability applied. The threshold question was whether the particular kind of harm - an injury to health which was attributable to stress at work - to the particular employee was reasonably foreseeable. Foreseeability depended upon what the employer knew or ought reasonably to have known about the individual employee. Because of the nature of mental disorder, it was harder to foresee than physical injury, but might be easier to foresee in a known individual than in the population at large. An employer was usually entitled to assume that the employee could withstand the normal pressures of his job unless he knew of some particular problem or vulnerability.

"The threshold question is whether this kind of harm to this particular employee was reasonably foreseeable. The question is not whether psychiatric injury is foreseeable in a person of 'ordinary fortitude'."

56 His Lordship went on to observe that the test is whether a harmful reaction to the pressures of the workplace is reasonably foreseeable in the individual employee concerned. Such a reaction will have two components being an injury to health which is attributable to stress at work. The answer to the foreseeability question will depend upon the inter-relationship between the particular characteristics of the employee concerned and the particular demands which the employer casts upon him. These include the nature and extent of the work being done by the employee. Employers should be more alert to picking up signs from an employee who is being overworked in an intellectually or emotionally demanding job than from an employee whose workload is no more than normal for the job or whose job is not particularly demanding for him or her. It will be easier to conclude that harm is foreseeable if the employer is putting pressure upon the individual employee which is in all the circumstances of the case unreasonable. Signs from the employee himself will be important.

57 He said further (at par 28) that harm to health may sometimes be foreseeable without an express warning. Factors to take into account would be frequent or prolonged absences from work which are uncharacteristic for the person concerned; these could be for physical or psychological complaints; but there must also be good reason to think that the underlying cause is occupational stress rather than other factors; this could arise from the nature of the employee's work or from complaints made about it by the employee or from warnings given by the employee or others around him. However, unless he knows of some particular problem or vulnerability, an employer is usually entitled to assume that his employee is up to the normal pressures of the job.

58 I pause to note that in reviewing these recent decisions, counsel for the appellant in the present case referred to a discernable difference between the Court of Appeal's approach to their issues and the position in Australia. He suggested, having regard to the decision of the Court of Appeal in Hatton v Sutherland (supra), that in England the employer is entitled to assume that the employee is a person of normal fortitude with the result that the reasonable foresight of the employer is to be evaluated by reference to the effect that the conduct in question would have on a person of normal fortitude. On the other hand, in Australia, recent decisions, including principally Tame v New South Wales (supra) suggest that the "normal fortitude" approach, as a means of limiting liability, has been displaced. The central enquiry is whether, in all the circumstances, the risk of the plaintiff sustaining a recognisable psychiatric illness was reasonably foreseeable, in the sense that the risk was not far fetched or fanciful. The normal fortitude approach must not be allowed to distract attention from this enquiry. See Gummow and Kirby JJ in Tame v New South Wales (supra) at par 201.

59 In evaluating the submissions made by counsel for the appellant, I incline to the view that the supposed difference of opinion in the two jurisdictions is not of any real significance in the circumstances of the present case. To my mind, as indicated by Gummow and Kirby JJ, the central enquiry is whether the risk of the plaintiff sustaining a recognisable psychiatric illness was reasonably foreseeable. That will necessarily require that consideration be given to facts and matters that might alert the employer to the presence of a risk of injury, unless the employee is known to be in a special position or susceptible to injury. In the absence of specific complaint by the employee or fellow employees, or other signs of prospective injury such as absences from work or unusual conduct, for the reasons indicated by the Court of Appeal in Hatton (supra) and by McHugh J in Tame v New South Wales (supra), the employer is entitled to assume that there will be a normal reaction to the conduct in question.

60 Put shortly, in Tame v New South Wales (supra) the High Court reviewed certain restrictions previously recognised in regard to claims for psychiatric damage and held that the common law of Australia does not limit liability for damages for psychiatric injury to cases where the injury is caused by sudden shock, or to cases where a plaintiff has directly perceived a distressing phenomenon or its immediate aftermath. It recognised also that a claim for breach of duty can be enforced by a person who is susceptible to injury. However, it accepted that the test for normal fortitude can be used to assist the assessment of reasonable foreseeability of harm.

61 For present purposes, then, I consider that the test of whether the employer failed to exercise reasonable care to avoid exposing the respondent to an unnecessary risk of injury is whether the disorder complained of was foreseeable with respect to the respondent rather than whether it was foreseeable with respect to a person of normal fortitude. However, as I have indicated, that will necessarily lead to an examination of the Judge's findings and related evidence with a view to determining whether the appellant was alerted to the risk of an injury occurring of the kind complained of. It is in that context that the employer is entitled to take account of factors of the kind described by Hales LJ in Hatton (supra) and to weigh up whether the conduct would be injurious with respect to a person of normal fortitude.

62 An appellate court is obliged to conduct a review of the trial and, in cases where the trial was conducted before a Judge sitting alone, of that Judge's reasons. Appellate courts are not excused from the task of weighing conflicting evidence and drawing their own inferences and conclusions, though they should always bear in mind that they have neither seen nor heard the witnesses, and should make due allowance in this respect.

63 In Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551 a majority of the High Court reiterated the rule that in general an appellate court is in as good a position as the trial Judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial Judge.

64 A series of cases were then decided in which the High Court referred to the need for an appellate court to respect the advantages of trial Judges, especially where their decisions might be affected by their impression about the credibility of witnesses. The relevant decisions included Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 at 179 and Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479.

65 However, as Gleeson CJ, Gummow and Kirby JJ observed in the recently decided case of Fox v Percy [2003] HCA 22 at pars 26 to 28 these cases did not constitute a departure from established doctrine. They were simply a reminder of the limits under which appellate Judges typically operate when compared with trial Judges. The established doctrine did not, and could not, derogate from the obligation of courts of appeal, in accordance with the relevant legislation, to perform the appellate function as established by Parliament; that is, such courts must conduct the appeal by way of rehearing. If, making proper allowance for the advantages of the trial Judge, they conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial Judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.

66 In the circumstances of the present case, there is no need for me to explore the role of an appellate court at greater length. In the end, the appeal in the present case appears to turn upon the application of legal principles concerning the concept of foreseeability to certain features of the claim which were either overlooked or not given sufficient weight by the learned Commissioner. The decided cases indicate that in circumstances of this kind it is open to an appellate court to review the conclusions arrived at by the trial Judge.

67 It will now be convenient to turn to the various grounds of appeal. However, before doing so, I must briefly reflect upon the learned Commissioner's finding as to the nature of the respondent's injury.

68 I noted in earlier discussion that the learned Commissioner accepted the evidence of Dr Skerritt that the distinction between complex fibromyalgia syndrome and the respondent's depressive illness was one of classification only. I proceed from the premise that the respondent was found to be suffering from a psychiatric illness or disorder, albeit a disorder that was accompanied by certain physical ailments of the kind she described in her evidence.

69 I am therefore of the view that the respondent's claim concerned an injury in the nature of a psychiatric illness arising from stress at the workplace. It follows that the legal principles and decided cases I referred to in earlier discussion are applicable to the claim in question.

70 The first ground of appeal is that the learned Commissioner failed to determine either properly or at all the fundamental issue of whether a reasonable person in the position of the appellant could have foreseen that the Respondent was exposed to a risk of injury in the nature of a psychiatric illness arising from her workplace stress.

71 It follows from my review of the legal principles that, in my view, the first ground of appeal poses the issue correctly. The question is not whether a reasonable person in the position of the appellant could have foreseen that a person of normal fortitude was exposed to a risk of injury of the kind complained of. The issue was whether a reasonable person in the position of the appellant could have foreseen that this particular employee was exposed to a risk of injury in the nature of a psychiatric illness arising from her workplace stress.

72 In earlier discussion I referred to a crucial finding made by the learned Commissioner in regard to this issue, namely, that with the knowledge of the industry and the particular workload of the respondent, the appellant required no particular expertise to appreciate and foresee that if it did not review its operation and the respondent's workload there was a risk of injury to the respondent of the kind which ensued. The Commissioner was of the opinion that the risk was not far fetched or fanciful and should therefore be characterised as a real and foreseeable risk. Thus, in the absence of any evidence that the appellant employer identified the risk and took steps to remove or ameliorate the hazard by investigating the respondent's complaints and by reviewing the system of work, the appellant must be held to be in breach of its duty to provide a safe system of work.

73 However, it will be apparent from earlier discussion that a finding in these general terms does not appear to reflect the realities of the situation or conform to the evidence. There was evidence that the respondent complained about the size of her workload both verbally and in writing. However, she did not make any specific complaint prior to ceasing work on 2 October 1996 that any form of physical or psychological injury was likely to occur. It is significant that she herself, notwithstanding her dissatisfaction with her situation at work, as late as September 1996, harboured the belief that she was capable of resuming her full-time position as a sales representative if the representation allegedly made to her in that regard was honoured. It is significant also that when the respondent attended on Dr Hendry on 2 October 1996 he considered that her problem was a matter of physical ailments only.

74 I note in passing, as appears from the report of Dr Stephenson dated 10 March 1997 (at AB 2069), that when Dr Stevenson asked her if she had any aches and pains prior to 2 October 1996 she informed him that prior to that date she was perfectly well. She had no aches and pains and "came down with this thing in one day". The learned Commissioner's findings and related evidence do not in any way suggest that prior to 2 October 1996 she had informed her employer that she was susceptible to psychiatric illness or felt that she was likely to succumb to a stress-related illness. I have noted in earlier discussion that there was no finding or evidence to the effect that she had been absent from work on occasions due to stress or in unusual circumstances.

75 Against this background, I consider that the crucial finding made by the learned Commissioner is flawed. To my mind, in the absence of external signs of distress or potential injury a reasonable person in the position of the appellant could not have foreseen that the respondent was exposed to a risk of injury as a consequence of her duties as a merchandiser. The presence of complaints about the workload may have suggested to a reasonable employer that remedial action was required in order to avert an industrial dispute but on the evidence in this case the nature of the complaints was not enough to alert a reasonable employer to the possibility of injury.

76 The decided cases establish that the question of reasonable foresight must be evaluated by reference to the circumstances of the particular employee. Nonetheless, if there are no specific symptoms of ill health or potential injury sufficient to prompt an employer to take remedial action, the decided cases indicate that the employer is entitled to assume that there will be a normal reaction to the conduct in question. There was no evidence that the respondent had any known psychiatric vulnerability and she herself and the various experts seemed to accept that she had no past history of psychiatric illness. Accordingly, I consider that the first ground of appeal is made out and the appeal should be allowed on this ground.

77 The second ground of appeal raises a plea in the alternative. The appellant contends that the Commissioner was wrong in law and in fact in finding that the appellant should have foreseen there was a risk of injury in the nature of mental illness or the form of psychological injury of more than a transient form and in the nature of the illness when the evidence was that:

(a) there was no change at all in the respondent's demeanour, personality or behaviour prior to the alleged onset of the alleged illness;

(b) that the development of these symptoms required a person in the respondent's position to have personality traits which predisposed them to such an illness and that it would be impossible for any lay person and difficult even for a medical practitioner to identify those traits;

(c) no complaint from the respondent as to any form of physical or psychological injury was made at any time prior to the onset of the injury or illness to the appellant, the respondent's medical practitioners or any other person.

78 It follows from my observations concerning the first ground of appeal that in my view the appeal should succeed on this ground also.

79 The third ground of appeal is that the Commissioner was wrong in law and in fact in concluding that the risk of injury of the type that occurred was not far fetched or fanciful in that there was no evidence at all to show a foreseeable risk of injury to health from the respondent's alleged occupational stress. The respondent worked three 8 hour days per week and ordinarily had the remaining four days off per week, over a period of five months, and was performing sales and merchandising of grocery items in general stores in the Perth metropolitan area. In the absence of any evidence indicating known psychiatric vulnerability (and there was none) there was thereby no basis for finding a foreseeable risk of psychiatric injury.

80 It follows from my observations concerning the first ground of appeal that I consider that the appeal should succeed on this ground also.

81 The fourth ground of appeal is that the Commissioner was wrong in law and in fact in finding that the appellant was negligent and in breach of the duty of care which it owed to the respondent in that having found that the appellant told the respondent to prioritise her calls (which evidence the respondent denied) should thereby have found that in so doing the appellant's actions were a sufficient response to the respondent's complaints given the nature of the respondent's employment duties, the part time hours she worked and the low risk of foreseeable injury in the circumstances.

82 In the light of the conclusions I have come to concerning the first three grounds of appeal, I do not find it necessary to deal with this ground of appeal, save to say, that, in my view, if the respondent's injury was foreseeable, then it would not be a sufficient response simply to require that the respondent prioritise her calls. The appellant would be required to take more determined action to avert the risk of injury. However, for the reasons I have given, it is not necessary to pursue this issue. For similar reasons, I am of the view that it is not necessary to pursue the issues raised by the fifth and sixth grounds of appeal.

83 This brings me to the question of damages. Various issues were raised by the seventh to thirteenth grounds of appeal concerning the award of damages, and these matters were fully argued at the hearing in conjunction with the question of liability. However, having regard to the fact that the appeal will be allowed, and the judgment previously granted in favour of the appellant set aside, it will not be necessary to rule upon these issues.

84 I consider that the appeal should be allowed upon the grounds reflected in grounds 1 to 3 of the appeal. For the reasons I have given, I do not consider that it is necessary to rule upon the issues as to damages raised by the seventh to thirteenth grounds of appeal.

Health, Safety and Welfare Act 1984

Cerebos (Australia) Ltd v Koehler [2003] WASCA 322

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Judgment (131 paragraphs)

Cerebos (Australia) Ltd v Koehler [2003] WASCA 322 (18 December 2003)

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Legislation Cited (1)

Cases Cited (23)