Mackinnon v BlueScope Steel

Court of Appeal (NSW)|2009-10-02|Before: Ipp JA, Macfarlan JA, Hoeben J, Patten AJ, MacFarlan JA

Appeal Outcome: Special leave dismissed with costs by the High Court, 2 October 2009 s123/2009

CITATION: Mackinnon v BlueScope Steel (AIS) Pty Ltd & Ors [2009] NSWCA 94

JUDGMENT OF: Ipp JA at 1; Macfarlan JA at 2; Hoeben J at 3

CATCHWORDS: TORTS - negligence - employment relationship - doctor diagnosed with psychiatric condition following attendance at leadership course - was development of psychiatric condition reasonably foreseeable - correct test of foreseeability for psychiatric injury - relevance of "normal fortitude" test - breach of duty - whether evidence of breach properly considered - failure by employer to observe course care protocol - causation - failure to properly analyse expert evidence - failure to provide adequate reasons - insufficient findings of fact to enable choice of law question to be resolved - costs.

LEGISLATION CITED: Accident Compensation Act 1985 (Vic)

Koehler v Cerebos (Australia) Limited [2005] HCA 15; (2005) 222 CLR 44 at [33] Papadopoulos v New South Wales Insurance Ministerial Corporation [1999] NSWCA 116 at [17] CASES CITED: Thompson v Hill; Clarke v Fowler (1995) 38 NSWLR 714 Wiki v Atlantis Relocations (NSW) Pty Ltd [2004] NSWCA 174; (2004) 60 NSWLR 127 Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48

Dr Angus Mackinnon by his tutor Nantia Mackinnon - Appellant BlueScope Steel (AIS) Pty Ltd - First Respondent/Cross-Appellant PARTIES: Dr Angus Mackinnon by his tutor Nantia Mackinnon - First Cross Respondent Dalmau & Associates Pty Ltd - Second Cross Respondent Draft One Communications Pty Limited - Third Cross Respondent McKenzie & Associates Pty Limited - Fourth Cross Respondent

FILE NUMBER(S): CA 40533/2007; 40838/2007; 40839/2007

B Toomey QC/E Romaniuk - Appellant/First Cross Respondent M Joseph SC/Ms V Heath - Cross-Appellant/First Respondent COUNSEL: PE Blacket SC - Appellant/Third Cross Respondent D Davies SC/PJ Gow - Appellant/Fourth Cross Respondent

Keddies Lawyers - Appellant/First Cross Respondent SOLICITORS: Sparke Helmore Lawyers - Cross-Appellant/First Respondent Henry Davis York - Third Cross Respondent Kennedys Lawyers - Fourth Cross Respondent

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT MEDIUM NEUTRAL CITATION: [2007] NSWSC 774

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40533/2007 40838/2007 40839/2007

IPP JA MACFARLAN JA HOEBEN J

Dr Angus MACKINNON by his tutor Nantia MACKINNON v BLUESCOPE STEEL LIMITED formerly known as BHP STEEL (AIS) PTY LIMITED and Ors DRAFT ONE COMMUNICATIONS PTY LIMITED v BLUESCOPE STEEL LIMITED formerly known as BHP (AIS) PTY LIMITED MCKENZIE & ASSOCIATES PTY LIMITED v BLUESCOPE STEEL LIMITED JUDGMENT 1 IPP JA: I agree with Hoeben J. 2 MACFARLAN JA: I agree with Hoeben J. 3 HOEBEN J: Nature of appeal The proceedings appealed from were heard in the Common Law Division of the Supreme Court over 94 days, commencing 22 May 2006 and concluding on 20 April 2007. His Honour delivered judgment on 20 July 2007. The appellant claimed damages for psychiatric injury from his employer, the first respondent. It was the appellant's case that he developed his psychiatric condition as a result of attending an eight day leadership course in September/October 1996. The appellant was unsuccessful and judgment was entered in favour of the first respondent. 4 The appellant brought proceedings against a second defendant, Dalmau & Associates Pty Limited (Dalmau). Dalmau did not appear when the matter was called on for hearing and took no part in the trial. In final submissions at trial, senior counsel for the appellant indicated that the appellant no longer sought any relief from Dalmau. 5 The first respondent cross-claimed against Draft One Communications Pty Limited (Draft One), McKenzie & Associates Pty Limited (McKenzie) and Dalmau as the entities which conducted the leadership course. As a result of the first respondent's success in the proceedings brought by the appellant, the cross-claims against Draft One, McKenzie and Dalmau were dismissed. His Honour ordered that the appellant pay the first respondent's costs on a party-party basis and that the first respondent pay fifty percent of the costs of Draft One and McKenzie. He declined to order that either the appellant or the first respondent pay those costs on an indemnity basis. 6 The appellant complains that his Honour erred in his findings as to breach of duty. He submits that there was ample evidence on which a finding of breach of duty could have been made which was not properly considered by his Honour. The appellant seeks a rehearing. 7 Draft One and McKenzie seek leave to appeal from his Honour's costs orders and assert that the first respondent should have been ordered to pay the whole of their costs. Draft One also seeks leave to appeal from his Honour's refusal to award costs to it on an indemnity basis. 8 The first respondent cross-appeals against the appellant on the basis that his Honour should have awarded costs against him on an indemnity basis. It also cross-appeals against Draft One, McKenzie and Dalmau asserting that his Honour should have decided the cross-claims on their merits. That part of the cross-appeal is essentially defensive in nature to cover the eventuality that the appeal succeeds. The first respondent relies upon a Notice of Contention in respect of his Honour's findings as to causation.

Factual Background 9 Although his Honour's findings on a number of issues were not clear, the appeal proceeded on the basis of the following facts. 10 The appellant was born on 9 August 1961. He was the second oldest of five siblings. The family had strong connections to the medical profession. His father was a general practitioner and his mother was a registered nurse. His paternal grandfather, his uncle and his brother, Duncan, were medical practitioners. His cousin, Angus, was a medical practitioner although at the time of trial was not entitled to practise. 11 The appellant had a normal and happy childhood with loving and caring parents. He completed his secondary schooling at the Sydney Church of England Grammar School in 1979. His mark was insufficient to enable him to enrol in a faculty of medicine in Australia so he obtained admission to the College of Surgeons in Dublin. He graduated from that institution in June 1986. His accommodation and tuition costs were met by his parents. 12 After graduation he returned to Australia and worked as a medical practitioner in various locations, including Townsville and Royal North Shore Hospital. In May 1988 while at Royal North Shore Hospital he became registered as a medical practitioner in NSW and has remained registered ever since although at the time of trial he was not entitled to practise. 13 He thereafter worked as a medical officer at Ryde Women's Hospital, Mona Vale District Hospital and Hastings District Hospital. Between 1990 and 1994 he successfully completed a training course conducted by the Royal Australian College of General Practitioners. As part of that course he worked at medical practices in the metropolitan area of Sydney and in several country towns. 14 He met his wife, Nantia, in 1988 and they were married on 26 November 1989 when he was 28 and she was 25. They have two children aged 3 and 6. 15 By January 1993 the appellant had developed an interest in occupational health. He was employed as a medical officer with Mount Isa Mines Limited at Mount Isa. In September 1993 while he was still working at Mount Isa, his wife was diagnosed with breast cancer. Because of the limited medical services available there, he and his wife returned to Sydney. The appellant's reaction to his wife's illness was quite severe. On 24 December 1993 Dr Gertler, a psychiatrist, diagnosed the appellant as suffering from a "depressive [condition] reactive to wife's illness" and certified him as totally disabled from 20 September 1993 until 20 March 1994. 16 His wife's treatment was successful and there has been no recurrence of the cancer. In August 1994 the appellant commenced employment with the Illawarra Occupational Health Service. That was a privately owned organisation, which conducted clinical and rehabilitation services. It employed three medical practitioners. The appellant performed his duties appropriately while in this employment. During this time the appellant was undertaking a graduate diploma in health services management and had commenced a course with Monash University for a Graduate Diploma in Family Medicine. 17 In May 1995 the appellant applied for an advertised position with the first respondent for a doctor in its Health and Occupational Safety Department at Port Kembla. The appellant was successful in this application and commenced employment with the first respondent in June 1995. His immediate superior was Dr Darling who in turn reported to a Mr Harmon. 18 The appellant and Dr Darling appear to have worked reasonably well together during 1995. From the end of 1995 their relationship deteriorated. In view of his Honour's finding as to the unreliability of the appellant's evidence (Red 352 [68] and [69]), the parties accepted the description of the relationship given by Dr Darling and by Mr Harmon. 19 The genesis of the breakdown in the relationship between the two men appears to have been a difference in their approach to the job. Doctor Darling wished the rehabilitation process to be completed as soon as possible so that injured employees could return to work. The appellant's focus was directed more towards their treatment, rather than their return to work. 20 There also seems to have been a significant difference in the personalities of the two men. Doctor Darling came across as having a strong and forceful personality. The appellant, on the other hand, was described by Mr Harmon as "a very academic, intelligent, caring sort of character and at the same time very inexperienced and naive" (Red 392Q). 21 In early 1996 Dr Darling was concerned that return to work outcomes were not being achieved quickly enough in relation to employees treated by the appellant. He thought that the appellant was spending excessive time treating individual patients when such treatment was not consistent with their injuries and did not assist with getting those employees back to work. The first respondent's line managers were complaining to him about the appellant. 22 At that time the appellant was complaining to Dr Darling that he had an excessive workload. This seems to have been due to the time which the appellant spent with individual employees rather than because the numbers of cases allocated to him was excessive. 23 Doctor Darling described some of his difficulties with the appellant in the following terms: "A. It was that and I - about early 1996, I - you know, I started to observe some behaviours where we started to get circuitous arguments, we started to - I started to sort of get the - or I started to make an observation, make observations, that Angus wanted to be trained in something this week and then something else two or three weeks after. He would read an article and want me to send him off for training in a variety of things. So I started - we started - I started at that stage to make some observations that we weren't getting a clear focus on getting outcomes. We were starting to sort of see problems become bigger and bigger and more and more issues brought into the concept of treatment." (Red 425Q)" 24 Because of these difficulties, by about April 1996 tension had developed between the appellant and Dr Darling. In order to assist the appellant in performing his work, in May or June 1996 Dr Darling set up a support team comprising a psychologist, Mr Harvey, a rehabilitation co-ordinator, Ms Delaney and a nurse, Ms Ford. The objective of this support team was to assist the appellant in managing his workload. 25 By August 1996 Dr Darling had become so concerned with the appellant's work performance that he discussed with Mr Harmon the possibility of removing him from his role of treating patients. It was at this time that Dr Darling observed some changes in the appellant's behaviour. There were the circuitous arguments, to which reference has already been made. These included discussions where the appellant perceived an ethical conflict between being an employee of the company and trying to provide appropriate treatment for employees. On occasions the appellant would start to develop a range of systems for how the medical centre should work but then would want to change those systems a week or two later. This led to the creation of a large number of draft pro forma documents, none of which was used. There were increasing verbal confrontations between the two men. 26 Doctor Darling detected some rapidity of speech on the part of the appellant. He noticed that the appellant's affect would vary between being very quiet and being very argumentative. The appellant continued to complain to Dr Darling about being over worked. Doctor Darling discussed the problems which he was having with the appellant with the psychologist Mr Harvey. 27 At the time of the trial both Mr Harvey and Dr Darling continued to be employees of the first respondent. Doctor Darling gave evidence but Mr Harvey did not. 28 By September 1996 the appellant was not satisfactorily performing his duties for the first respondent. Doctor Darling was frustrated by his refusal or inability to meet what he regarded as the reasonable requirements of the job. In that regard his Honour found that while the appellant's workload was reasonable, he genuinely believed that it was unduly onerous. 29 In August 1996 Dr Darling invited the appellant to attend a leadership course at Kilmore in Victoria. This was a leadership course for employees of the first respondent. The course was to last eight days commencing on the evening of Thursday 26 September and concluding on the afternoon of Friday 4 October 1996. The appellant made some inquiries about the course and was told by Mr Harvey that being selected for the course indicated that he was highly regarded by the first respondent. The appellant said that everything he heard about the course was positive. 30 In the three to four months before the commencement of the leadership course the appellant had been taking Duromine - one tablet per day - as an appetite suppressant. He ceased taking it while on the course. While Duromine can have side effects producing agitation and nervousness, his Honour was not prepared to conclude that it had any effect on the appellant's performance while participating in the course. 31 The appellant received letters and documents relating to the course from the first respondent. He completed a personal particulars form and returned it to Dr Darling's office. That form invited him to indicate any particular concerns or issues which he wished to raise before the commencement of the course. On that form the appellant stated that he did not want any discussion about his wife's illness and that he was "going from a dominant submissive position with my boss, Chris Darling, to a dominant assertive position". 32 The appellant travelled to Melbourne three days before the commencement of the course to meet other doctors working for the first respondent in occupational health and safety. Two of those doctors gave evidence to the effect that he appeared normal, behaved appropriately and actively participated in social activities at that time. 33 While the appellant was in Melbourne, about two days before the course was due to commence, he received a telephone call from Mr Tim Dalmau. Mr Dalmau was a psychologist who had designed the leadership course and had the title of Senior Process Consultant in the course documentation. He was not an employee of the first respondent. The plaintiff's evidence in chief as to this conversation was as follows: "Q. Did he tell you why he was ringing you? A. Yes. He said he was having a hard time finding me and he was ringing me concerning the letter that I'd filled in - the page that I'd filled in - and he went on to ask me a couple of questions. Q. What did he ask you? A. He said "I see you've written about not wanting to discuss breast cancer in the course" and I said "No I don't want to discuss it on the course" and he said "How is your wife now?" and I said "She's fine, no problems". Q. Was there anything else that was raised with you by him? A. Yes he said that "I see you've written your going from a dominant submissive to a dominant assertive position with your boss. That must be really hard" and I said "It wasn't that difficult". I, you know, I'm forgetting. I'm just having a loss of memory. I remember I haven't forgotten totally but I have just forgotten for the moment the rest. Q. Do you recall anything other than that being said to you by Mr Dalmau? A. No." (Red 440-[250]) 34 Under cross-examination as to the telephone conversation with Mr Dalmau, the appellant gave this evidence: "Q. Did he ask you about your work situation? A. Yes. Q. Did you tell him that Dr Darling always previously asked you about your wife's cancer? A. No. Q. Even though that was the reason - one of the reasons - why you didn't want this topic raised - because of Dr Darling's behaviour, and you knew Dr Darling was going to be on the course. You made no effort to tell Dalmau that the reason why you didn't want this topic raised - at least one of the reasons why you didn't want it raised - was because Dr Darling had caused a lot of stress to you by raising it previously? A. He caused me irritation. Q. But you never told Mr Dalmau that at all did you? A. You would have to read out. I said to him. Q. You didn't tell him anything about . A. I said we were having a situation. Q. You never said to Mr Dalmau that Dr Darling had made mention of your wife's breast cancer previously? A. True. Q. Because it never happened? A. It happened. Ask my wife. Q. Other than out of a concern for her? A. I don't think so. Q. Were you already confused when you were speaking to Mr Dalmau as to what was reality and what was not? A. I don't think so. Q. You possibly were? A. No I may have been having some beers at the time. Q. Beers? A. I went out to a party with the three doctors from BHP and we had dinner and some drinks and I'm not sure if that was the last day, the first day or the second day. Q. Where did the call with Dalmau occur? A. In my hotel room. Q. So you think you might have been affected by alcohol? A. No not necessarily no. Q. In any event did you tell Mr Dalmau that you were redefining the relationship with your boss right? A. Yes. Q. And did you tell him that he is unhappy about it, that is Dr Darling is unhappy about it? A. Yes. Q. Did you tell Mr Dalmau that "if Chris Darling doesn't like it, he will have to lump it"? A. True." (Red 441 [251]) 35 At the time of this conversation with the appellant Mr Dalmau was in the United States. Following the conversation, he sent an email to Ms Colleen Durant, a senior employee in the Human Resources Division of the first respondent, who was the Senior Course Director of the leadership course. The email was in the following terms: "Hi Colleen, I tried to call you today but no luck. Hope you got the message. I spoke today with this person who is scheduled for the next SLC starting in a couple of days. I am concerned about him going into the program. Without going into too many details he has a very sick wife and seems under some quite severe work stress. I advised him to think carefully about going on the program and suggested he might think of deferring. I "offered" him the opportunity of possibly doing it at a later stage when things might be more settled in his life. Hope this is OK. He seems determined to go on the program and says he is looking forward to sorting some things out with his boss. Not sure what to do more than this. These things are BHP's call and if you want to talk some more please get in touch. Should be contactable on my mobile tomorrow. Regards Tim." (Red 442 [252]) 36 That email came into the possession of the appellant's legal advisers approximately four days before the commencement of the trial. It was accompanied by a letter dated 18 May 2006 from the solicitors for the first respondent. Relevantly the covering letter said: "We enclose copy of an email forwarded by Tim Dalmau to Colleen Durant dated 25 September 1996 at 9.25pm. This document was provided to us in recent days by Mr Dalmau and we consider arguably comes within the scope of the previous subpoena issued upon our client. Accordingly we provide a copy of the email to you." (Blue 001.00306) 37 At the time of trial Ms Durant was no longer an employee of the first respondent. She was in the United States. She did not give evidence. There was no evidence that she or anyone else on behalf of the first respondent did anything in response to the email from Mr Dalmau. There was no issue that the email had been received by Ms Durant. Doctor Darling and Mr Harmon gave evidence that Ms Durant did not contact them about the appellant in the days leading up to the commencement of the leadership course. Mr Dalmau did not give evidence. 38 Included in the documents sent to participants in the leadership course was a document under the BHP logo headed: " Caretaking Procedures for Steel Leadership Program ". That document, which was referred to in submissions as the caretaking protocol, relevantly provided: " Introduction The purpose of these procedures and mechanisms is to provide the maximum active care and protection to participants before, during and after their participation in the Course. The program has outcomes at a number of levels: intrapersonal, interpersonal, team and organisation. It is an arduous and very satisfying program. During the course participants can expect to be given the opportunity to explore and confront unresolved issues in all of these levels. In so doing they are likely to feel uncomfortable at times as they face up to questions, issues, feelings, beliefs and attitudes they may have which they discover are either inappropriate or ineffective. The caretaking system is designed to identify in advance (as much as this can be done) people for whom the program may be inappropriate at this stage in their lives. It is designed to provide the highest possible level of active care to each individual participant during the course and, finally, it aims to provide post-course follow up and checking. Pre-Course 1) Prior to the course commencing each participant is asked to complete a Personal Details form. 2) Participants send this information to Ruth Berghan via fax or snail-mail. … 5) With any program, if there is some information from their Personal Details Form which Ruth decides is a possible indicator of problems she first notifies Tim Dalmau as Senior Process Consultant alone in order to keep and protect to the maximum confidentiality guarantees. 6) If the person in his judgment needs follow up then either the Senior Course Director (Colleen Durant) of a particular program or the Program Executive (Bob Shaw) would be told about the person if Tim deems the information poses a problem of some sort or another, either to be clarified or resolved. 7) Much of what she brings to Tim's attention he deems to not require follow up. 8) The Program Administrator for the Steel Leadership programs (Tanya Brown) may come across information (either formally or informally) or may notice something unusual in her contacts with participants prior to a given program. 9) She brings this to the attention of the Senior Course Director and the Senior Process Consultant who discuss it together and make a decision about whether it requires follow-up. 10) The Senior Course Director or Senior Process Consultant then contacts the person about the problem. 11) Whether or not it is the Senior Course Director depends on the nature of the possible problem identified. If it is a career, company or role related problem (eg too much recent travel) then the Senior Course Director would do it. If there are indications of deeper or more personal issues then the Senior Process Consultant usually contacts the person. 12) If the telephone call to the individual throws up any severe question about their suitability for the program then Tim contacts the Senior Course Director and Program Executive for guidance and follow-up. … 16) The venue is required to supply the Course Director with 24-hour contact details for medical, dental, psychiatric, physiotherapeutic and chiropractic resources close by. In recent times it has become important to make sure the contact information covers full 24-hour access. … During Course 18) … 22) The Course Director as part of his/her role checks on the emotional and health conditions of participants outside formal sessions. … 25) If there are indications from any source that an individual participant may be suffering unnecessary stress or confusion then one of the staff are designated to approach the person concerned and check them out. More often than not this falls to the Course Director, unless symptoms indicate otherwise. 26) Each participant is teamed up from day one with a walk-talk partner with whom they are required to debrief each day in the evening. 27) The walk-talks are told they have an extra responsibility to look out for their partner and bring to the attention of the staff any concerns they may have. 28) The aim with these system elements is to monitor each person and intervene early if there are signs the person may need some help. 29) If an individual participant displays any unusual or bizarre behaviour (eg hallucinations, verbal confusion, leaving venue at unscheduled times, failure to attend sessions, sleep deprivation, dramatic eating pattern changes, etc) then the staff immediately interview that person and make an assessment of their suitability to continue on the course. … 40) If it is the judgment of the staff that the person's continued presence in the program represents a risk either to themselves or to other participants then they will bring this to the attention of the participant concerned and suggest they might consider the option of withdrawing from the program. 41) If the person leaves the program and returns home or to some form of institutional care then the person should be accompanied by either staff persons or fellow participants as appropriate. There should be at least two such companions for the person concerned. … 45) Any Process Consultant or any Course Director who actually leaves the program for the care of an individual under stress or another form of emergency or on short notice is reminded by their colleagues that they should go through some process to reassimilate themselves to the external world also. Post-Course 46) … 51) If there is indication of a person in stress or confusion then the Course Director and Process Consultant will determine together the best method of providing support." 39 The participants in the course travelled from Melbourne to the conference centre by bus. Twenty-six men and women were participating of whom a number were employed in the Port Kembla Occupational Health and Safety Unit of the first respondent. These included Dr Darling, Mr Harvey, Ms Delaney, Ms Cooper, Mr Keyte, Ms Ford, Mr Hammond and Mr Harmon. The conference centre was located in an isolated rural area. There were rooms for the course sessions, a communal dining room, recreational rooms and residential accommodation. The business sessions of the course were held from 8am until 5pm or later. The first respondent had conducted or sponsored seventeen such courses previously. 40 The Course Director was Mr Phil Boas, a registered psychologist. He had previous experience with leadership courses of this kind. He provided his services through Draft One. He was assisted by Ms McKenzie, a registered psychiatric nurse. She provided her services through McKenzie. The final member of the course directing staff was Ms Shand. She was an employee of the first respondent and at that time was undertaking a course in psychology. None of these persons gave evidence. 41 Relations between the appellant and Dr Darling were still strained when the course commenced. On the bus taking the participants to the course venue, Dr Darling observed that the appellant was pale and agitated. Doctor Darling gave evidence of a conversation which he had with Mr Boas on the first evening of the course: "I said 'I have been told that Angus was abused as a child and that Angus sees me as the father figure and I think you should be aware of this' and Mr Boas' response was along the lines 'Well, anybody with half a brain could see he has got some problems, so thank you'". (Black 5108.6)

It was common ground that it was Mr Harvey who passed that information onto Dr Darling. 42 Evidence as to what occurred on the leadership course was given by the appellant, Dr Darling, Mr Harmon, Ms Ford, Mr Keyte, Mr Hammond and Mr Blackman. They were all participants in the course. All of them, except for Mr Blackman, were connected in varying degrees to the occupational health unit at Port Kembla. Mr Blackman at the time of the course was an information and technology manager employed by the first respondent in Melbourne. He became the appellant's walk-talk partner for the duration of the course. 43 Not surprisingly after ten years, the recollections of these persons differed considerably and conflicted as to detail. There was considerable variation as to the sequence of events and the dates on which events occurred. 44 Not long after the conclusion of the course, one of the directing staff, Ms Shand, prepared a report for the first respondent. Because of its contemporaneous nature and despite the circumstances in which it was created and its self-exculpatory tone, his Honour regarded it as providing the best evidence of the sequence of events. Ms Shand's report reads as follows: " Incident Report - Angus Mackinnon This is a record of events concerning Angus, starting from 27 September (Day 1 of SGLP 18). Angus was part of the OH&S group and it soon emerged (without anyone stating it explicitly in the group) that there were some relationship problems between Chris Darling and Angus, and that Chris believed that Angus was the cause of the problems in the group. Chris made reference to this in a MRG session without mentioning Angus' name. The following morning, before the start of the program, Chris, Neil Harvey, Tod Harmon and Angus met, and attempted to resolve some of the issues. The exchange was apparently quite heated, but concluded to the satisfaction of the parties involved. This was discussed during the MRG, and the OH&S group expressed their support for Angus.

Sculpting of the group on Wednesday morning - Chris was asked to sculpt the group and put Angus way out of the OH&S group. When asked how he felt about this, Angus burst into tears and expressed his dismay at being left out, and felt he should have been in the group. Other members of the OH&S group said they shared this view.

During the week Angus talked openly and intelligently about his feelings, about his observations of the group and its members. Angus appeared to be OK during the guest speakers' session on Thursday, and interacted well with the Leadership guest speaker on Tuesday. However, on Thursday he came in the staff room and spoke to Liz, Phil, Col and me about how he was concerned about using his skills and how he might unintentionally damage people. He mentioned this again to me on Thursday evening, saying that he was aware that Phil had programmed some things in him but he was frightened of damaging people.

Friday morning, Angus was unresponsive, lying on the floor during the MRG. When we checked with walk-talks that their partner was OK to return home and to work, Angus' W-T (Bruce Blackman) said he wasn't sure. Angus was vague and unsure. When his photo sheet was returned to him he took his photo and turned it face down on the sheet. He said nothing and looked pale and shaky.

Angus came up to me and thanked me for everything during the week before he left for the airport." (Red 492 at [378]) 45 His Honour sought to reconcile the oral evidence and that statement as follows: "384 I am satisfied that there was a meeting between the Plaintiff and Dr Darling in the presence of Mr Harmon and Mr Harvey during which Mr Harmon sought to effect a reconciliation or rapprochement between the Plaintiff and Dr Darling but which ended somewhat inconclusively. I am satisfied that there was a human sculpture, probably on day 6, in which Dr Darling placed members of his team in a way which upset the Plaintiff, and I am satisfied that at some point in the course Dr Darling pointed at the Plaintiff, in the presence of others, and said words to the effect, "You're the cause of all my problems". I am satisfied that at times during the course the Plaintiff presented as pale, nervous and anxious. I am satisfied that by the last day of the course his presentation was such that he was obviously mentally ill and this was observed by Mr Harmon, Dr Darling and Mr Harvey, who between them ensured that the Plaintiff arrived safely home where he could receive proper treatment." (Red 384) 46 Upon the appellant's return to Sydney his speech and behaviour were irrational. Within a few days a psychiatrist, Dr Klug, arranged for the appellant to be admitted to the Eversham Clinic where he remained from October 11 to October 31. He was re-admitted to the Eversham Clinic on 7 December 1997 and remained there until 13 December. 47 Between April and August 1997 the appellant attempted to resume work with the first respondent but this was unsuccessful. He has not worked for the first respondent since August 1997 and formally resigned in March 1998. Between then and the date of trial despite some attempts to return to work, the appellant has been unemployed and unemployable. 48 From October 1996 the appellant continued to consult Dr Klug on a weekly or fortnightly basis. There have been periods of hospitalisation. He undertook further studies and acquired a graduate diploma in Health Services Management and a degree of Master of Health Service Management at the University of Technology in Sydney. At the time of trial he was studying at the University of NSW for the degree of Master of Health Informatics. Despite these qualifications, it was accepted that the appellant would be unable to be employed as a medical manager in a hospital. 49 At the time of trial the appellant led an essentially sedentary existence focused mainly on his home, although from time to time he drove one of his children to child care. He studied and performed limited household duties. He was taking anti-psychotic and anti-depressive medication, i.e. Abilify - 30 mgs; Endep - 200 mgs; and Seroquel - 200 mgs.

Findings by Trial Judge Breach of Duty 50 On this issue his Honour understood the appellant to be submitting that the first respondent breached its duty as his employer by allowing him to attend the course or alternatively, by not removing him from the course when it should have been obvious that the course was having an adverse effect on his mental health. 51 On the first breach of duty issue, his Honour set out his analysis and conclusions as follows:

"264 It should be stated that, in my opinion, the Plaintiff was in no way compelled to attend the course. It was not part of the duties of his employment and, in my view, there was no evidence that a reluctance to attend would have imperiled his employment, either in law, or as a matter of fact. Indeed, it seems clear on the evidence that it was not uncommon for invitees to decline to attend for one reason or another. However, the invitation to attend was accompanied by statements to the effect that he had been identified as a "mover and shaker" within BHP and other encouragement and this may well have led him to believe that it would be helpful to his career if he accepted the invitation. In my view, there is an important distinction to be made when considering the question of breach of duty and, as it seems to me, the references in the Plaintiff's submissions to a decision to "send" him on the course overstate the effect of the evidence. In my view the Plaintiff's case against BHP could on the evidence go no higher than the contention that it was a breach of duty of care to invite him to attend the course; to permit him to attend; and to allow him to remain at the course until its conclusion.

265 In Koehler, the High Court pointed out that to focus an enquiry as to negligence only upon breach of duty invites error because it may fail to take fundamental aspects of the relationship between the parties into account. That proposition seems to me to have less force in this case, in view of my finding that the Plaintiff was not directed to attend the course and could have declined without detriment to his career.

266 Once the superimposition of contractual obligation is put to one side, the issue, in my opinion, following Koehler is whether the Plaintiff has shown that it was reasonably foreseeable to BHP that his attendance at, and completion of, the course would cause psychiatric injury.

267 This question needs, in the context of the case, to be considered in two parts, the first confined to the period up to the commencement of the course and the second to the period of the course itself. There was no expert or other evidence to the effect that the leadership course could foreseeably cause psychiatric injury to a person of normal fortitude, nor would I infer that from the evidence that was adduced in relation to the course. The question of foreseeability thus requires concentration upon the presentation of and signs given by this particular plaintiff, the emphasis being on presentation as it appears possible, with the benefit of hindsight, that by September 1996 he was in fact in the prodrome stage of a psychiatric disorder.

268 It was argued by the Plaintiff that the decision (to select and invite) him to the course constituted a breach of BHP's duty because it knew that he, at the time, was in a "compromised or compensated psychological state" and it also knew that the course involved the confrontation or challenging of participants in a way likely to expose the Plaintiff to risk of psychiatric injury.

269 Although the selection of the Plaintiff for the course was actually made by Mr Harmon, it seems to me that the question of whether the selection was a breach of BHP's duty must primarily be viewed from the perspective of his immediate superior, Dr Darling and, indeed, that is how the Plaintiff's submissions were focussed.

270 In this case, as I have found, the Plaintiff's workload was not excessive in fact. He was coping with it, although not to the satisfaction of Dr Darling, as the year 1996 progressed. There was friction with Dr Darling, which he might reasonably, in my view, have regarded as simple intransigence by a subordinate in implementing the new system which he introduced and which it was his responsibility to resolve.

271 It is true, as Mr Marshall pointed out, that Dr Darling was aware of tension between himself and the Plaintiff which he had taken steps to address; that he had observed the Plaintiff pale and agitated; and that the Plaintiff complained of overwork. In my opinion, however, there is a large gap between those indications or signs which, in any event for the most part, do not seem to have been apparent to others until about August 1996, and a finding that Dr Darling, and therefore BHP, should have concluded that the Plaintiff was at risk of psychiatric injury by attending the Leadership Course. Although BHP knew that the course would be arduous and stressful, it also knew that it was to be conducted by experienced professionals in the field and that elaborate procedures were in place to safeguard participants from harm. Moreover, signs identified in Hatton, such as express warnings by the Plaintiff and frequent or prolonged absences were entirely absent in this case.

272 Furthermore, and in my opinion, very importantly, the Plaintiff himself was a medical practitioner trained and experienced in occupational health. Rather than decline the invitation to attend the course, according to all the evidence, he welcomed the opportunity to attend and looked forward to it, inter alia, as a means of resolving his friction with Dr Darling.

273 Also relevant is that the Plaintiff's presentation to his closest work colleagues, according to the evidence, was as a hardworking, competent and conscientious doctor albeit under a degree of stress; his presentation to his family was of a man enjoying his career and looking forward to the opportunity to advance it; and that Dr Darling, himself, who had experience with mentally disturbed people and whose evidence I accept, did not regard the Plaintiff as mentally ill or at risk of psychiatric illness by attending the course. He may, possibly, have thought differently if he had been aware of the Plaintiff's psychiatric reaction to his wife's illness 3 years earlier, or that he was taking Duromine, but that is entirely a matter of speculation.

274 The Plaintiff also relied on the telephone conversation with Mr Dalmau as providing the contrary indication, which BHP should have acted upon. However, there is no reason, in my view to doubt that his email to Ms Durant accurately reflects the conversation. Significantly, when Mr Dalmau suggested that the Plaintiff defer attending the course to another time, the Plaintiff insisted that he was determined to go in order to work out with Dr Darling the difficulties which had arisen between them. Mr Dalmau's email did not, in my opinion, provide a reasonable basis for BHP to withdraw its invitation and exclude the Plaintiff from the course, particularly as he was, at the time, actually in Melbourne preparing to attend it within the next day or so.

275 I observe that the email from Mr Dalmau indicates to me that there was an adequate screening process in place although, of course, its effectiveness, necessarily, largely depended upon the adequacy of the information disclosed by the participants. By failing to disclose his psychiatric reaction to his wife's illness and, perhaps, that he was taking Duromine, the Plaintiff himself undermined the screening process which he now claims was inadequate.

276 In my opinion, prior to the Plaintiff attending the leadership course, it was not established that psychiatric injury was reasonably foreseeable to BHP as a consequence of the Plaintiff's attendance." (Red 455-458) 52 His Honour dealt with the second part of the appellant's submission as to breach of duty, i.e. the failure to terminate his participation in the course as follows: "388 The question whether the Plaintiff should, in effect, have been ordered home by BHP during the course creates some difficulty. The breach of duty alleged somewhat differs in character from the alleged breach considered earlier, in that upon this aspect of the case, the Plaintiff's contention, as I understand it, is that his mental disorder during the course was patently manifest, as was the impact upon him of some of the events occurring during it, such as Dr Darling's accusation and his remote placement by Dr Darling in the human sculpture.

389 It followed, so it was contended, that (at some undefined stage) his continued attendance should have been prevented by BHP. Given the nature of the course and the absence of any expert evidence, I would not have regarded the two incidents mentioned above as intrinsically significant. Uninformed by expert evidence, they strike me as the sort of events very likely to arise in a leadership course involving senior executives of a large company. Stressful and upsetting, perhaps, but hardly likely, in my opinion, to be productive of psychiatric disorder in an adult holding a senior and responsible position.

390 Nor, in my opinion, was it proved that before the last day the Plaintiff displayed anything which might reasonably have been regarded as the onset of mental illness to those with whom he was in contact. He certainly exhibited signs of stress and anxiety but, on the other hand, there was ample evidence that during the course, in business sessions and in social intercourse, he contributed normally and sensibly.

391 Moreover, there were only about 26 participants, and I think it impossible to escape the conclusion that the course was conducted in such a generally caring atmosphere that florid symptoms of mental illness or signs that the course was responsible for an emerging psychiatric illness would have been detected early and appropriate measures taken as occurred on the last day, when undoubtedly the Plaintiff manifested a mental disorder.

392 The Plaintiff's description of himself as a "flagellant" might well have been perceived as a manifestation of what seems to have been a well-developed sense of humour and the plotting of his emotions at, or below, the neutral line seems to have been more or less the same as Mr Blackman. I do not regard these matters as particularly significant. Again, it is, I think, relevant to bear in mind that he was a doctor, experienced in occupational health matters. If he had concerns about the impact of the course on his health, he had the ready means of saying so to the course leaders. He also had the option of leaving, as one participant did, and one or two others, including himself, considered.

393 Another aspect worthy of mention is that although I do not think the cause to do so, reasonably arose in this case, the effective termination of the Plaintiff's place at the course would not have been something lightly undertaken. It obviously had the potential to impact adversely upon his career.

394 In the result, I do not regard the fact that BHP allowed the Plaintiff to complete the course as constituting a breach of its duty of care towards him. Although it was pleaded, in effect, that following the course BHP failed to provide appropriate assistance, such an allegation, in my opinion, could not be maintained as there was no evidence to support it." (Red 495-496)

Causation 53 There was a live issue at trial as to the correct diagnosis of the appellant's mental illness. The appellant submitted that he suffered from a mood disorder of major depression with psychotic episodes. The first respondent submitted that by the end of the course he was displaying florid symptoms of schizophrenia, a psychotic disorder from which he still suffered. 54 The significance of the diagnosis was this. A mood disorder can be caused by and aggravated by external events and pressures. According to the first respondent's medical experts, however, schizophrenia was a constitutional condition which was not caused by external pressures. According to that theory the fact that the appellant had displayed florid symptoms of schizophrenia on the course, was co-incidental. It followed that if schizophrenia was the correct diagnosis the leadership course could not have caused the appellant's condition. 55 Doctors Peter Klug, Phillip Morris and Jonathan Phillips supported the mood disorder diagnosis and Professor Nicholas Keks and Dr Rod Milton supported schizophrenia. Each doctor produced lengthy and detailed expert reports supporting the particular diagnosis for which he contended. In addition, each doctor gave evidence at trial and was cross-examined. The evidence of those medical experts occupied 32 hearing days. 56 His Honour replicated lengthy extracts from the reports of each doctor which set out that doctor's opinion and part of his reasoning process. In the case of Dr Phillips, his Honour commented: "427 In a report dated 3 August 2005, he reviewed in some detail the history he relied upon, which immediately creates a difficulty in that much of the history, particularly that concerning his claim to have been overworked; the alleged unprofessional management techniques of Dr Darling; and some aspects of the leadership course, were not proved and, indeed, in my opinion, established to be false. However, upon the history he took, Dr Phillips said …" (Red 523). 57 Having set out some of the expert evidence in that way, his Honour observed that he found the presentation of Professor Keks as a witness to be "extremely impressive". His Honour then commented on the whole of the medical evidence as follows: "444 As I understand the evidence, Professor Keks' comments are largely uncontroversial in so far as they relate to the aetiology of schizophrenia and I would accept them.

445 Professor Keks furnished reasons for his disagreement with those psychiatrists who had formed a different opinion to his diagnosis of schizophrenia. It is, I think, unnecessary for me to refer in any detail to this critique. He also provided two further reports, 29 May 2006 and 8 September 2006, in which he commented on reports by Dr Klug, Dr Morris, Dr Phillips and Dr Bruce Westmore. Again it is unnecessary to deal with these comments in any detail. It suffices to say that Professor Keks maintained his opinion that the Plaintiff is, and has been since October 1996, schizophrenic.

446 Each of the psychiatrists to whose reports I have referred gave oral evidence and were closely and skilfully cross-examined. It is fair to say that those called by the Plaintiff, Drs Klug, Morris and Phillips maintained their position that the Plaintiff's mental illness was, and is, a mood disorder with psychotic features, while those called by BHP, Dr Milton and Professor Keks, maintained that the Plaintiff is schizophrenic.

447 All of the doctors have impressive qualifications and experience and I do not doubt the honesty of the opinions expressed. Each said he had read and understood the expert code of conduct and had complied with it, although Dr Klug, quite rightly, drew attention to the tension between his role as treating psychiatrist for 10 years and his duty to the court to give objective and dispassionate evidence. I do not mean to be critical when I say that he did not always, in my opinion, manage to separate entirely his relationship with his patient from his duty to the court.

448 The evidence of Dr Morris was also, I think, undermined on occasions when he seemed to adopt the role of advocate rather than expert.

449 The intrinsic difficulty involved in seeking to prefer one or other of the competing diagnoses is compounded by the problem of relating them to reliable histories or, in other words, factual substrata established by the evidence.

450 Although I do not propose to analyse the oral evidence and cross-examination of the doctors, the following extracts illustrate the difficulty. The first I take from the cross-examination of Dr Phillips by Mr Joseph. …" (Red 552-553) 58 His Honour set out brief extracts from the cross-examination of Dr Milton and Dr Phillips to demonstrate that they were at issue on the question of diagnosis. His Honour's conclusions on causation were as follows: "452 Many of the reports, in my opinion, magnified the difficulties the Plaintiff had with Dr Darling well beyond the level of reality. Some, in my view, used emotive language, unsupported by the evidence, in relation to the course. Furthermore they referred, contrary to the evidence, to a lack of professionalism in its conduct and to an inadequacy of systems in place for the welfare of participants; they failed to acknowledge adequately the possible significance of the Plaintiff's consumption of Duromine at about the time of the course and his very serious reaction to his wife's illness; and they referred to childhood difficulties with his father and an excessive workload at BHP, which again, in my opinion, were not supported by the evidence.

453 On any view of the matter, the correct diagnosis of the Plaintiff's mental illness was plainly a matter of difficulty upon which very highly qualified and experienced psychiatrists could legitimately differ. In the circumstances, I do not think it appropriate for me to state my preference as the correct diagnosis. Rather, I think I should say that I am not satisfied, on the probabilities, that the Plaintiff has discharged the onus of proving the diagnosis for which he contends. (Red 558) … 459 As the Plaintiff, in my opinion, has failed to prove the psychiatric disorder for which he contends, it follows as a consequence of my acceptance of Professor Keks' opinion as to the aetiology of schizophrenia that he has also failed to prove any causal connection between the Leadership Course and the mental illness from which he suffers." (Red 560)

Submissions and Consideration Breach of Duty 59 The appellant submitted that his Honour's conclusion as to whether he was compelled or invited to attend the course was irrelevant to the question of breach of duty. I agree and I did not understand the first respondent to make any submission to the contrary. 60 The appellant submitted that his Honour's statement of the foreseeability test (Red 456 [266]) was wrong. The test postulated by his Honour was "The issue … is whether the plaintiff has shown that it was reasonably foreseeable to BHP that his attendance at, and completion of, would cause psychiatric injury". The appellant submitted that the error was compounded at Red 456 [267] where his Honour said: "There was no expert or other evidence to the effect that the leadership course could foreseeably cause psychiatric injury to a person of normal fortitude …" 61 The appellant submitted that the correct statement of principle was set out in Koehler v Cerebos (Australia) Limited [2005] HCA 15, (2005) 222 CLR 44 at [33] as follows: "[33] In Tame v New South Wales the Court held that "normal fortitude" was not a precondition to liability for negligently inflicting psychiatric injury. That concept is not now to be re-introduced into the field of liability as between employer and employee. The central inquiry remains whether, in all the circumstances, the risk of a plaintiff (in this case the appellant) sustaining a recognisable psychiatric illness was reasonably foreseeable, in the sense that the risk was not far-fetched or fanciful." 62 The appellant submitted that the errors in his Honour's approach were the imposition of a "more probable than not" test and the reintroduction of the concept of "normal fortitude". The correct test was the "undemanding" test set out in Koehler which involved a reasonable foreseeability of risk with foreseeability being used in the sense of "not far-fetched or fanciful". 63 The test formulated by his Honour was clearly wrong and contrary to the statement of principle in Koehler. I did not understand the first respondent to submit the contrary. It follows that in determining whether evidence was available to establish breach of duty, this Court has to apply the Koehler test of foreseeability. It was on this issue that the main contest in the appeal took place. 64 The appellant was prepared to accept in general terms the findings of his Honour (Red 456-457 [268] - [270]). The appellant took issue with his Honour's qualification at [269] that "The question of whether the selection was a breach of BHP's duty must primarily be viewed from the perspective of his immediate superior, Dr Darling …". The appellant submitted that this qualification was contrary to the proper assignment of responsibility in employment cases. He submitted that the responsibility for taking reasonable care for his safety did not start and finish with Dr Darling but lay with the first respondent generally. It had the responsibility for implementing the system for screening people and the caretaking protocol. He submitted that Dr Darling had no part to play in the proper working of the protocol. 65 The appellant accepted that his problems with Dr Darling and the observations made of him by Dr Darling and others in the months leading up to the commencement of the course were not sufficient of themselves to have placed the first respondent on notice that the risk of him developing a recognisable psychiatric illness was reasonably foreseeable. They were considerations, however, to which the first respondent should have had regard when taken with other information which was available to it. 66 The appellant submitted that the other information comprised the contents of the care protocol itself and the email communication between Mr Dalmau and Ms Durant. 67 The appellant submitted that it was obvious from the contents of the care protocol that the risk of a participant on the course developing a recognisable psychiatric illness was reasonably foreseeable. The appellant developed his argument on this issue as follows. 68 There was no need for expert evidence to either establish or confirm that such a risk was foreseeable. The caretaking protocol had been prepared by experts in the psychological field. The fact that it identified in terms such a risk must be conclusive on the issue of foreseeability. The appellant relied on the introduction and the very detailed provisions in the protocol to identify persons for whom the course might be inappropriate. He relied upon the need for there to be medical and psychiatric assistance available on a 24 hour basis and on paragraphs 25-29, 40-41, 45 and 51 in which there was an implicit assumption that the course could bring about stress, confusion and displays of unusual or bizarre behaviour such as hallucinations and verbal confusion. 69 In relation to the email from Mr Dalmau to Ms Durant, the appellant made the following submissions. His Honour had failed to appreciate the significance of the email. It was part of the screening process referred to in the introduction to the protocol and explained at paragraphs 1, 2, 5, 6, 11 and 12. What had happened was that Ms Berghan had been sufficiently concerned by the contents of the appellant's personal details form that she had referred it to Mr Dalmau as the senior process consultant. Mr Dalmau was sufficiently concerned about the contents of the form that he telephoned the appellant and tried to dissuade him from attending the course at that time. When the appellant declined and re-affirmed his determination to "sort some things out with his boss", Mr Dalmau's concerns were not allayed so that he emailed Ms Durant in accordance with paragraph 12 of the protocol. 70 The terms of the email made clear that Mr Dalmau had serious concerns about the advisability of the appellant attending the course. Since he had been unsuccessful in dissuading the appellant from attending, he sought advice from Ms Durant and the possible intervention of the first respondent. 71 The absence of any reply or follow-up to the email was an inadequate response to the foreseeable risk of injury in terms of the test enunciated in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48. 72 The first respondent made two answers to these submissions. The first was that the appellant should not be allowed to make these submissions since the trial was not run in this way and at trial the appellant did not use this evidence in this way. Secondly, the respondent submitted that a proper analysis of the protocol and of the email did not support the submission. 73 In support of the first proposition, the first respondent took the Court to the written and oral submissions of the appellant at trial. It has to be said that far from demonstrating that these submissions were not made at trial, the submissions to which the Court was taken showed that these arguments had been raised in terms similar to those now put before this Court. The following examples from the written submissions and oral submissions at trial make this clear. 74 In the written submissions (paras 50 - 52) his Honour was taken to the email which was described as part of the screening process for the course. Under the heading "What BlueScope knew about the course" his Honour was taken to the same paragraphs of the caretaking protocol to which this Court was taken. At paragraph 59 this submission was made: "59. All these unmistakably illustrate a knowledge on the part of BlueScope that there was a real possibility, not far fetched or fanciful, that a participant such as the Plaintiff, may suffer a psychological reaction in response to participation on the Course." 75 The appellant's written submissions on this issue concluded as follows: "65. This document then proceeds (at page 15 to 16) to identify the procedure for the screening of prospective participants. This was applied in this instance and threw up the Plaintiff as a person for whom the Course was not appropriate. Whatever be the criticism of this screening process, it was sufficiently effective in identifying the Plaintiff as an unsuitable participant. 66. Notwithstanding Dalmau's telephone call with the Plaintiff and his subsequent recommendation to BlueScope in the email (Exhibit D) BlueScope did not withdraw the Plaintiff from the Course and persevered in their decision to send him on the Course. 67. BlueScope thus knew that the Course was or could be psychologically and emotionally demanding and nonetheless ignored Dalmau's advice with the inevitable consequences to the Plaintiff in that he decompensated further and ultimately became psychotic. This development was a direct and obvious consequence of the negligent act and/or breach of contract by BlueScope. 68. There can be no doubt that BlueScope was in breach of both its duty of care and its contract of employment with the Plaintiff by sending him on the Course, or not withdrawing him from the Course when Dalmau raised the question of the Plaintiff's suitability with BlueScope." 76 In the appellant's oral submissions at trial, the following was said: "Where do we draw the line with the Dalmau email? Well, clearly Ms Durant was a senior person within the defendant's organisation at that time … It must have been alarming one would think with the clarity that hindsight brings that this email pops on her desk. What did she do? Well, she wasn't called obviously by the defendant. She's in Sydney. To have done nothing bespeaks negligence. To have drawn it to Dr Darling's attention and Dr Darling does nothing equally bespeaks negligence on the part of the defendant. It also bespeaks negligence in not drawing it to the attention of Mr Baos and Ms McKenzie. …" (Black 6881.10) "Another aspect of the defendant's knowledge about the course comes from the documents now widely referred to as Exhibit C (the caretaking protocol) I do not want to take your Honour through some of these documents. …" (Black 6882.15) "I was taking your Honour through Exhibit C as to what was on the course and what the plaintiff was to experience … what are we to glean from that? We are to glean - or we are to infer that there is some concern for physical and emotional health. That may well be properly founded because, when we come to the medical evidence and I'll take your Honour to do that shortly - there is a real concern for emotional health and wellbeing." (Black 6884.18) 77 Thereafter at 6885 to 6889 senior counsel for the appellant at trial took his Honour to the same paragraphs in the care protocol to which this Court was taken and made submissions in almost identical terms. The submissions at trial in respect of paragraph 25 of the protocol provide a good illustration: "The other point that needs to be made here is, these are recognitions on the part of the defendant that the course is capable of producing stress and confusion in people who are suited or suitable for the course. Lord knows what it would do to those who are not suited to it. 29, if an individual participant displays any unusual or bizarre behaviour, hallucination, verbal confusion; these are all matters which allow your Honour comfortably to come to the conclusion that the defendant knew what this course was capable of doing." (Black 6888.55-6889.6) 78 It is difficult to imagine a closer correlation between submissions made at trial and those made to an appellate court than as demonstrated by these examples. The submissions as to foreseeability and breach of duty in this Court were made to the trial judge, both orally and in written form. No basis has been established by the first respondent for why this Court should not have due regard to these submissions by the appellant. The submissions to the contrary by the first respondent lack substance and must fail. 79 In relation to the merits of the appellant's submissions as to breach, the first respondent took as a preliminary point that it was not open to the appellant to submit that the first respondent made no reply or follow-up to the Delmau email. It accepted that there was no evidence of any response. It submitted, however, that this was not sufficient to allow an inference that there had in fact been no response to the email. It submitted that the correct position as a matter of evidence was that there may have been a response but there was simply no evidence of it. 80 I do not accept that submission. It does not have regard to the circumstances in which the email was sent. 81 The email was sent as part of the screening process which itself formed part of a caretaking protocol which was designed to protect the health of persons participating in the leadership course. In accordance with that screening process, if a person were identified as unsuitable for the course Mr Dalmau was required to contact the senior course director for guidance and follow up. 82 The email represents that contact. It identified serious concerns with the suitability of the appellant to attend the course. Mr Dalmau, not being a member of the first respondent's organisation, was not in a position to prevent the appellant attending the course. Accordingly, in its terms the email sought guidance and follow up from Ms Durant as the senior course director and representative of the first respondent. It invited further contact from her if she required more information. 83 In such circumstances when there was no issue that the email was sent and received, and where some response was clearly called for, in that the health of an employee was potentially involved, the absence of any evidence of a reply or an explanation enables this Court to infer (and would have enabled the trial judge had he turned his mind to it) that there was in fact no response by the first respondent or anyone on its behalf to the email. 84 This preliminary submission by the first respondent is rejected. 85 The first respondent submitted that the appellant's submissions had placed too much weight on the care protocol. It submitted that a rational reading of the document did not have the effect sought to be given to it by the appellant. The protocol was not concerned solely with stress and mental illness but also with physical illness which might occur during the course. It did nothing more than set out a common sense regime for looking after the health of attendees on the course. 86 The first respondent submitted that the appellant's submissions ignored the fact that he was a qualified medical practitioner with some knowledge of psychiatric matters and that he had read all the documents pertaining to the course, including the care protocol. Being aware of that material, he was very keen to attend the course. In those circumstances, and given the appellant's medical qualifications, the first respondent was entitled to give considerable weight to his strong desire to attend the course. 87 The first respondent submitted that the appellant's submissions in relation to the care protocol and the email relied very much upon the "prism of hindsight". It submitted that when one looked at that material from the point of view of what the first respondent and Dr Darling knew before the course commenced, there was nothing unreasonable in it allowing the appellant to attend the course. 88 The first respondent submitted that the appellant's submissions gave too much weight to the email. It submitted that when one looked at the terminology used by Mr Dalmau, it was comparatively mild and merely expressed "concern". There was no strong recommendation that the appellant not attend the course. The first respondent submitted that in its terms the email did not mention anything about ill health and Mr Dalmau seemed satisfied that he had done all that he considered necessary to deal with the issues raised by the appellant in his personal details form. It submitted that there was nothing in the email which threw up "any severe question" such as was envisaged by paragraph 12 of the protocol. 89 These submissions by the first respondent should be rejected for the following reasons. 90 His Honour found against the appellant on the basis that he had failed to establish that psychiatric injury to himself was reasonably foreseeable by the first respondent as a consequence of his attendance on the course (Red 458 at [276]). His Honour's finding on this issue was fundamentally flawed. 91 Firstly, the test which his Honour applied to establish foreseeability was wrong (see [60] to [63] hereof). Secondly, in finding that "there was no expert or other evidence to the effect that the leadership course could foreseeably cause psychiatric injury" his Honour ignored without explanation the terms of the care protocol and the submissions made on behalf of the appellant in relation to it. For the reasons put forward on behalf of the appellant, both at trial and before this Court, the care protocol constituted evidence to that effect (see [68] hereof). 92 The emphasis in the protocol on the need to observe signs of "unnecessary stress or confusion" and displays of "any unusual or bizarre behaviour (eg hallucinations, verbal confusion, leaving venue at unscheduled times, failure to attend sessions, sleep deprivation, dramatic eating pattern changes etc)" made it clear that psychiatric illness was recognised as a foreseeable consequence for persons attending the course. To similar effect was the requirement for a walk-talk partner to "look out for their partner and bring to the attention of staff any concerns they may have" and for staff to "monitor each person and interview early if there are signs the person may need some help". (Protocol paragraphs 25-29.) 93 Thirdly, his Honour misunderstood and failed to have regard to the appellant's submissions in respect of the email from Mr Dalmau. His Honour's errors in that regard were twofold. He failed to appreciate the part which the email played in the care protocol and he failed to appreciate the significance of its contents. 94 The email represented the penultimate step in the multi-tiered screening process envisaged by the care protocol. The first tier was the identification by Ms Berghan of possible indicators of problems in the personal details form of a participant and the communication of that fact to Mr Dalmau (Protocol para 5). 95 The second tier was an examination of the personal details form by Mr Dalmau. As the protocol made clear, this usually disposed of most matters brought to his attention by Mr Berghan (Protocol paras 6 and 7). 96 The third tier involved either consultation with the senior course director or the program executive (Protocol para 6) and/or direct contact between Mr Dalmau and the participant who had completed the personal details form (Protocol paras 10 and 11). 97 The fourth tier of the screening system came into operation if the telephone call between Mr Dalmau and the participant "throws up any severe question about their suitability for the program". In that circumstance Mr Dalmau was to contact the senior course director for guidance and follow up (Protocol para 12). 98 The final tier was the provision by the course director of guidance and follow up in response to the contact by Mr Dalmau. It was that final step in the screening process which did not take place. 99 The significance of understanding the part played by the email in the screening process is that in this case all levels of the process had been activated. The email from Mr Dalmau to Ms Durant was part of the final phase of the screening process and indicated that, in the opinion of Mr Dalmau, a severe question had been thrown up about the appellant's suitability for the course. It was common ground that the appellant was the only participant on the course in respect of whom Mr Dalmau contacted Ms Durant. In other words, the appellant was the only person identified by the screening process as unsuitable for the course. 100 Because his Honour failed to understand the part played by the email in the screening process, he also failed to appreciate the significance of its content (Red 458 [274] - [275]). The screening process broke down not because the appellant failed to provide adequate information in his personal details form, but because the first respondent through Ms Durant did not respond to the serious concerns expressed by Mr Dalmau in the email. 101 The contents of the email need to be considered against the background of the part it played in the screening process and also against the background of Mr Dalmau not being part of the first respondent's organisation. It is also not without significance that Mr Dalmau was in the United States when he spoke to the appellant and when he sent the email. The email was sent because he had been unsuccessful in contacting Ms Durant by telephone. Mr Dalmau clearly regarded the matter as important. 102 In the email Mr Dalmau stated in terms that he was "concerned" about the appellant going into the course. He identified two bases for that concern - that the appellant had a very sick wife and that he was under "some quite severe work stress". Mr Dalmau suggested to the appellant that he think carefully about going on the program and as an alternative, deferring his attendance on the course. The appellant rejected that advice and stated he was looking forward to "sorting some things out with his boss". I infer that this comment by the appellant was also a source of concern to Mr Dalmau. 103 Another important feature of the email is its deferential tone. When dealing with employees of the first respondent, it is clear that Mr Dalmau could only make recommendations. The decision-making power lay with the first respondent through Ms Durant. I read the concluding paragraph quite differently to what was submitted by the first respondent. I do not read it as indicating a satisfactory outcome as a result of the conversation between Mr Dalmau and the appellant. On the contrary, Mr Dalmau appears to be indicating that he had failed to dissuade the appellant from attending the course and was seeking in terms of the protocol, guidance and follow up from Ms Durant. 104 I have concluded that there was a substantial body of evidence before his Honour which indicated that psychiatric injury was a foreseeable consequence of the appellant attending the leadership course. His Honour did not properly consider that evidence and that, together with the application of the wrong test, led to error. 105 Because of his Honour's conclusion on foreseeability, he did not consider what if anything was the appropriate response by the first respondent to the foreseeable risk. His Honour did not ask the question mandated by Shirt as to what a reasonable employer would do by way of response to that risk. He did not consider 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 first respondent might have. There was no attempt to carry out the Shirt balancing exercise. 106 The closest his Honour came to dealing with that issue was at Red 458 [274] where his Honour said: "Mr Dalmau's email did not in my opinion provide a reasonable basis for BHP to withdraw its invitation and exclude the plaintiff from the course."

The only basis disclosed for that conclusion was that the appellant was at the time already in Melbourne preparing to attend the course and that the appellant had indicated his determination to attend the course so that he could work out his differences with Dr Darling. 107 Those factors provide an inadequate basis for such a far-reaching conclusion. The presence of the appellant in Melbourne was with all due respect to his Honour, a minor consideration when balanced against the appellant's mental health. As is clear from Mr Dalmau's concern and his report of the conversation with the appellant, the appellant was not the appropriate person to make the final decision as to whether he should attend the course. This was a decision for those who were familiar with the sort of pressures likely to be engendered by the course and who had been alerted by the course designer, Mr Dalmau, that in his opinion the appellant was unsuitable to attend it. 108 Given that the appellant is not seeking findings from this Court but a retrial, it is not appropriate for the Court to make findings on this issue. What is clear, however, given the circumstances in which the email was sent, is that some response on the part of the first respondent was called for. 109 It is not necessary to analyse the second breach question, i.e. whether the appellant should have been withdrawn from the course before its conclusion. Subject to the question of causation, the errors already identified in his Honour's reasoning as to foreseeable risk and as to what was an appropriate response to that risk, are sufficient to require a retrial. Had such an analysis been necessary, however, it would have been difficult if not impossible to carry out because of the paucity of findings as to what happened on the course (see [45] hereof).

Causation 110 The appellant submitted that in reality his Honour had made no finding as to causation. He submitted that if he were successful on the breach of duty question, the matter would have to be dealt with by way of retrial since it was not possible for this Court to arrive at a reasoned conclusion on causation. This was because the evidence on this issue included not only expert medical reports and scientific articles, but also 32 days of oral evidence from the five doctors. 111 The appellant submitted that, to the extent that his Honour had made findings as to causation, those findings were not supported by adequate reasons. The appellant submitted that since the causation issue involved differences between medical experts which were capable of being resolved rationally by examination and analysis, his Honour should have engaged in that process. The appellant submitted that in the light of the enormous amount of evidence on this issue, his Honour's failure to carry out such a rational analysis meant that a retrial on this issue would have to take place. 112 The first respondent did not try to support his Honour's approach or his conclusion as to causation. By way of contention it put its case on causation in this way. It submitted that there was evidence that the appellant was already suffering from symptoms of mental illness when the course commenced. If that were so, the course could not have caused the illness. It followed that the most logical explanation for the appellant's mental illness was schizophrenia, which occurred independently of stress-related factors. 113 A difficulty with the first respondent's Notice of Contention is that his Honour made no findings as to the development of the appellant's illness during the course. There was no finding that the appellant was suffering from a mental illness from the beginning of the course or at any point during the course except at the end when the symptoms were florid and obvious. 114 Another difficulty with the first respondent's contention is that there was a substantial body of evidence to the effect that the appellant was not suffering from mental illness when the course commenced. This comprised the evidence of the doctors in the employ of the first respondent with whom the appellant had socialised in the three days he was in Melbourne leading up to the course. There was also the evidence of the course participants, such as Mr Blackman, as to the appellant's normal presentation at the beginning of the course. 115 In the absence of any findings by his Honour to resolve this factual issue, i.e. when did the appellant first experience symptoms of mental illness, there is no factual basis to support the first respondent's contention. Accordingly, the first respondent's Notice of Contention fails. 116 His Honour's treatment of the causation issue is so inadequate that even if this Court were prepared to make its own findings on breach of duty, the matter would have to go back for a retrial in any event. This is most regrettable given the substantial amount of court time which was taken up on the question of causation (i.e. 32 hearing days for the oral evidence of the doctors alone). 117 General comments to the effect that on some occasions Doctors Klug and Morris lost their objectivity are unhelpful. Unless his Honour indicated clearly where their objectivity was lost and in relation to what issues, the reasoning behind his Honour's observation remains unknown (Red 553 [447] - [448]). Equally unhelpful is the observation that it was difficult to assess the validity of the competing diagnoses because of differences in the histories upon which they were based. Unless his Honour identified the reports and the histories to which he was referring, and unless his Honour made clear findings of fact against which those histories could be evaluated, there is no utility in the observation (Red 553 [449]). 118 The same criticism applies to Red 558 [452] where his Honour said: "Many of the reports in my opinion magnify the difficulties the plaintiff had with Dr Darling well beyond the level of reality. Some in my view used emotive language unsupported by the evidence in relation to the course. Furthermore they referred contrary to the evidence to a lack of professionalism in its conduct and to an adequacy of symptoms in place for the welfare of participants; …"

When the reports referred to are not identified and clear findings have not been made as to what happened on the course, observations of this kind do not advance the decision making process. 119 The obligation of judges when confronted with conflicts in expert evidence was restated in Wiki v Atlantis Relocations (NSW) Pty Ltd [2004] NSWCA 174, (2004) 60 NSWLR 127. There Ipp JA, with whom Bryson JA and Stein AJA agreed, said: "56 A miscarriage of justice can arise where what is and is not disclosed in a judge's reasons is a breach of the principle that justice must not only be done but must be seen to be done: Beale v Government Insurance Office of NSW (1997) (1997) 48 NSWLR 430 at 431, per Mason P. 57 As McHugh JA explained in Soulemezis v Dudley (Holdings) Pty Ltd (1987 ) 10 NSWLR 247 at 279, one of the purposes served by a judicial decision is that: "... [I]t enables the parties to see the extent to which their arguments have been understood and accepted as well as the basis of the judge's decision". Accordingly, as McHugh JA said (at 278-279): "... [A] judicial decision must be a reasoned decision arrived at by finding the relevant facts and then applying the relevant rules or principles. A decision which is made arbitrarily can not be a judicial decision; for the hallmark of a judicial decision is the quality of rationality ...". … 62 In Moylan Sheller JA (with whom Beazley JA and Giles JA agreed) referred to and adopted much of the reasoning of Henry LJ in Flannery . His Honour quoted the following remarks of Henry LJ (reported in Flannery at 381-382; 377-378)) with approval: "It is not a useful task to attempt to make absolute rules as to the requirement for the judge to give reasons. This is because issues are so infinitely various. For instance, when the court, in a case without documents depending on eye-witness accounts is faced with two irreconcilable accounts, there may be little to say other than that the witnesses for one side were more credible ... But with expert evidence, it should usually be possible to be more explicit in giving reasons: See Bingham LJ in Eckersley v Binnie (1988) 18 Con LR 1, 77-78: 'In resolving conflicts of expert evidence, the judge remains the judge; he is not obliged to accept evidence simply because it comes from an illustrious source; he can take account of demonstrated partisanship and lack of objectivity. But, save where an expert is guilty of a deliberate attempt to mislead (as happens only very rarely), a coherent reasoned opinion expressed by a suitably qualified expert should be the subject of a coherent reasoned rebuttal, unless it can be discounted for other good reasons ...' And: "… [w]here the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other …" … 64 In Mistral International Pty Ltd v Polstead Pty Ltd [2002] NSWCA 321, in a judgment with which both Meagher JA and Beazley JA agreed, Sheller JA again referred to Flannery and Eckersley with approval and applied what had been said in those cases. In Archibald v Byron Shire Council (2003) 129 LGERA 311 Sheller JA (with whom Beazley JA agreed) adopted the same approach. His Honour said (at 323 [54]): "Where a dispute, such as this one, involves something in the nature of an intellectual exchange with reasons and analysis advanced on either side, the parties are entitled to have the judge enter into the issues canvassed before the court and to an explanation by the judge as to why the judge prefers one case over the other. This is particularly so where there is disputed expert evidence. In the present case, the parties were entitled to be told if Dr Button's estimates were to be accepted, on what basis they were to be accepted, in preference to those of Mr Loomes and Mr Thompson. This had to be done if the court was properly to perform the duty of stating with certainty the extent to which the respondent was entitled to rely upon continued use." See also Papadopoulos v New South Wales Insurance Ministerial Corporation [1999] NSWCA 116 at [17]." 120 Had his Honour engaged in the intellectual analysis required of him, it would have been clear that his comment at Red 552 [444] that "Professor Keks' comments are largely uncontroversial insofar as they relate to the aetiology of schizophrenia …" was incorrect. There was another equally reputable school of thought to the effect that stress and environmental factors could play an important role in the development of schizophrenia and its prognosis. Professor Keks was extensively cross-examined to that effect. Black 5725.15 provides an example: "A. I don't rely on this chapter to make my conclusion about the evidence. What I say in my report is I cite the chapter because the evidence is being reviewed. That's what I say. I don't say I accept the conclusion. Bebbington is one of the strongest supporters of the stress direction because you have to understand that there is a group of researchers who are looking to demonstrate stress effect, including McGorry and Phillips, and possibly less Mason, and the chapter on the whole is slanted towards finding any conceivable evidence for a stress effect." 121 A proper reading of the evidence of Professor Keks still gave to the appellant a case on causation, albeit one which would produce significantly lower damages. Professor Keks talked in terms of acceleration of the florid stage of the illness and said that the illness would have developed in any event irrespective of the stress engendered by the leadership course. He did not specify when, absent the stress of the course, it would have developed. Opinions of that kind, coupled with appropriate findings as to when symptoms in fact developed, might have established causation as a matter of law even on the medical case put forward by the first respondent. 122 The inevitable conclusion is that his Honour erred in his treatment of causation. As already indicated, that taken with his Honour's errors in respect of breach of duty, makes a retrial inevitable. That conclusion, however, is subject to the "choice of law" submission by the first respondent.

Choice of law 123 Although this issue was argued before his Honour, he did not deal with it in his judgment. The first respondent submitted that this Court should consider the issue since if its choice of law argument were successful, there would be no need to consider the merits of the appeal. The appellant's claim would fail in limine. The Court was referred to the written submissions made to his Honour when it was sought to argue this issue as a preliminary point and at trial. 124 The first respondent's submission is based on s 135A Accident Compensation Act 1985 (Vic) (the Victorian Act) as it was at the time when the appellant suffered his injury. Section 135A relevantly provided: "135A(1) A worker who is, or the dependants of a worker who are or may be, entitled to compensation in respect of an injury arising out of or in the course of, or due to the nature of, employment before 12 November 1997 - (a) shall not, in proceedings in respect of the injury, recover any damages for non-pecuniary loss except- (i) in accordance with the Transport Accident Act 1986 and subsections (11)(b), (12) and (18)(b) of this section; or (ii) in proceedings of a kind referred to in section 135(1)(c) and in accordance with sub-sections (11)(b), (12) and (18)(b) of this section; or (iii) if sub-paragraphs (1) and (ii) do not apply, as permitted by and in accordance with this section; and (b) shall not, in proceedings in respect of the injury recover any damages for pecuniary loss except - (i) in proceedings of a kind referred to in a paragraph of section 135(1) and in accordance with subsections (11)(a), (12) and (18)(a) of this section; or (ii) if subparagraph (i) does not apply, as permitted by and in accordance with this section. (2) A worker may recover damages in respect of an injury arising out of, or in the course of, or due to the nature of, employment - (a) if employment of that nature was a significant contributing factor, and the injury is a serious injury and arose on or after 1 December 1992; or (b) if the injury is a serious injury and arose before that date but the incapacity arising from the injury did not become known until that date or a later date. (2A) Subject to subsection (2D), a worker may not bring proceedings in accordance with this section unless a determination of the degree of impairment of the worker has been made under subsection (3). (2B) Subject to subsection (2C), the Authority or self-insurer must make a determination under subsection (3) within 120 days of receiving a written application for a determination from the worker. … (3) If the Authority or self-insurer determines that the degree of impairment of the worker as a result of the injury would, if assessed in accordance with section 91 be 30 per centum or more, the injury is deemed to be a serious injury within the meaning of this section. (3A) A decision by the Authority or self-insurer that a worker has a serious injury for the purposes of section 93B is not to be taken to be a determination for the purposes of subsection (3) unless the decision specifically states that it is to be taken to be a determination for the purposes of subsection (3). (4) If the authority or self-insurer has determined in accordance with subsection (3) that the degree of impairment of a worker is less than 30 per centum, the person may not bring proceedings for the recovery of damages in respect of the injury unless - (a) the Authority or self-insurer - (i) is satisfied that the injury is a serious injury; and; (ii) issues to the worker a certificate in writing consenting to the bringing of the proceedings; or (b) a court, on the application of the worker made within 30 days after the determination was made or, with the consent of the Authority under subsection (6A), after that period, gives leave to bring the proceedings. …" 125 The first respondent submitted that the requirements of s 135A(1) were satisfied in relation to the appellant. This was because the appellant was a "worker" who was "entitled to compensation" and he had suffered his injury in Victoria. This meant that the appellant had to comply with the requirements of s 135A before he could bring proceedings for damages regardless of whether those proceedings were brought in New South Wales (Thompson v Hill; Clarke v Fowler (1995) 38 NSWLR 714). The first respondent submitted that since it was common ground that no determination of the degree of impairment had been made pursuant to s 135A(2)(a) and no application had been made pursuant to s 135A(2)(b), section 135A operated as an absolute bar to these proceedings. 126 The appellant made a number of responses to this submission. They can be summarised as follows: "(a) The proper law relevant to the determination of the appellant's claim against the first respondent was the law of New South Wales not Victoria. If that submission was accepted, there was no need to go to the other submissions. (b) If the law of Victoria applied and the appellant was not a worker within the meaning of the Victorian Act, section 135A has no application. (c) In the event that the appellant was a worker within the meaning of the Victorian Act, the provisions of s 135A had no application since at all times relevant to the claim the appellant was in receipt of payments under the Workers Compensation Act 1987 (NSW) ("the NSW Act") and was therefore not "entitled to compensation" as required by s 135A(1) of the Victorian Act. (d) In the event that s 135A of the Victorian Act applied, the scheme provided under s 135A relating to pre-trial procedures operated solely between the Authority or the self-insurer on the one hand and the worker on the other. That scheme could have no application here because the first respondent accepted a claim by the plaintiff under the NSW Act and at no time was the Authority an insurer of the first respondent. There was no evidence that the first respondent was a self-insurer under the Victorian Act. (e) In the event that a determination was made that any part of the appellant's claim was barred by reason of s 135A of the Victorian Act such determination could not preclude the appellant litigating the tortious conduct and injury occasioned to the appellant by the first respondent in New South Wales. (f) In the event that s 135A was held to be a bar to the appellant's claim (or part thereof) the appellant would argue at trial that the first respondent was estopped from relying upon the provision." 127 It is not possible, nor is it appropriate for this Court to resolve this issue. 128 The issue would only arise for decision if the appellant succeeded in establishing liability, i.e. breach of duty and causation. Findings as to what breach or breaches occurred and the extent to which those breaches caused the appellant's disability are necessary before the first respondent's submission on this issue can be properly articulated. 129 Breach of duty has not been decided by this Court. What the Court has found is that there was a body of evidence which if properly considered by the trial judge could have enabled a verdict to be found for the appellant. Whether the court on a retrial would make such a finding will not be known until that trial is completed. 130 The same problem arises from the appellant's standpoint when making out its responses to the first respondent's submission. Findings as to breach of duty and causation would have an important part to play in identifying the proper law of the tort. In addition, there would need to be evidence and findings about other matters relevant to whether New South Wales or Victoria was the lex loci delicti. It will be the factual findings which determine the basis for the cause of action and ultimately the choice of law. Crucial findings in that regard have not been made and will not be made until the re-trial. 131 Similar considerations arise in relation to the other matters raised by the appellant in answer to the first respondent's submissions, e.g. was the appellant a worker under the Victorian Act and what was the position of the first respondent as a self-insurer under the Victorian Act? Many of the same "connecting factors" which would be relevant to determining the lex loci delicti would also be relevant to the determination of whether the appellant was a worker under the Victorian Act. 132 It follows that this issue cannot be resolved in this appeal. The issue will only arise if the appellant establishes his cause of action. In that eventuality, the factual questions which will need to be determined in order to decide this issue would only be capable of identification when the basis for the finding of liability in favour of the appellant is known.

Applications for Leave to Appeal and Cross-appeal 133 Costs were separately argued before his Honour following the handing down of the principal judgment. In that hearing it was accepted that the appellant was impecunious and would in all probability be unable to pay any costs orders made against him. Since they had been represented throughout the trial, it was important for Draft One and McKenzie to obtain costs orders against the first respondent in respect of the cross-claims which it had brought against them. 134 His Honour found that Draft One and McKenzie were entitled to a costs order against the first respondent but only as to fifty percent of their costs. His Honour limited the costs order in this way because he was not satisfied that Draft One and McKenzie needed separate representation at the trial. He concluded that there was never a realistic prospect of a conflict of interest arising between them. In those circumstances, his Honour concluded that the first respondent should only be responsible for one set of costs. The submissions of Draft One and McKenzie in this Court were directed primarily at identifying error in his Honour's approach, both on a factual and legal basis. 135 At the conclusion of the appeal, the Court invited submissions from the first respondent, Draft One and McKenzie as to what should happen to the applications for leave to appeal and to the cross-appeal in the eventuality (which has now occurred) that the appellant's appeal was successful. 136 Draft One and McKenzie still wished to proceed with their applications for leave to appeal. They made the following submissions:

(i) The trial judge's decision as to the costs of the cross-claim, particularly at Red 577J-O, was so clearly erroneous that it should not be allowed to stand. His Honour's decision on this issue did not depend upon any of the findings in the principal judgment.

(ii) Any new trial was likely to focus on the issues emphasised by the appellant in this appeal, i.e. the decision by the first respondent to send the appellant on the leadership course. That was not a matter which raised for consideration any conduct on the part of Draft One or McKenzie.

(iii) There was a reasonable prospect that on a retrial the second part of the appellant's case, i.e. what happened at the leadership course, would not be pursued with the result that neither Draft One nor McKenzie would be involved.

(iv) Even if Draft One and McKenzie were not involved in any retrial, it would still be necessary for their costs from the first trial to be dealt with. It would be preferable for this to be done in these proceedings when this Court was already familiar with the issues.

(v) Even if Draft One and McKenzie were directly involved in the retrial, this Court should correct the trial judge's error concerning their costs of the first trial because the second trial judge may feel bound (in the event that they were again successful in the retrial) to follow any uncorrected approach of the first trial judge. 137 The first respondent submitted that it would not be appropriate for this Court to decide the applications for leave to appeal by Draft One and McKenzie. It submitted that the event upon which the cross-claims were dismissed and upon which the orders for the costs of the cross-claims was predicated was the failure at trial of the appellant's case against it. If the appeal were upheld, there was no "event" to underpin the costs orders which his Honour made, those orders cannot stand and must be vacated. 138 The first respondent submitted that if this Court determined the applications for leave by Draft One and McKenzie, it would be engaging in the determination of a hypothetical question. This is because it would be speculative whether the same factors that might have been relevant to the exercise of the trial judge's discretion on costs would still be relevant, significant or even engaged after a retrial. 139 The first respondent submitted that on a retrial it is usual for the second trial judge to determine the costs of the retrial. If the appellant again failed on a retrial, Draft One and McKenzie would have an opportunity to adduce evidence to that court and to specifically refer the second trial judge to the matters to which they referred this Court. 140 The first respondent submitted that it was not in issue that Draft One and McKenzie were entitled to separate representation at the first trial. What was in issue was the extent to which it was reasonable to make the first respondent and the appellant pay for it. Depending upon how the retrial is run, there might be further evidence on this issue. 141 Finally the first respondent submitted that the resolution of that part of its cross-appeal and the application for leave to appeal by Draft One, which challenged the failure by the trial judge to award in their favour indemnity costs, would depend upon the outcome of the retrial. A consideration of the various offers of compromise and Calderbank offers made in the trial would be influenced by the outcome of the retrial. Those matters cannot be determined in advance of the retrial. 142 The first respondent's submissions on this issue should be accepted. Until the results of the retrial are known, including specific factual findings, it is not possible for this Court to decide these costs questions. The Court would, as the first respondent submitted, inevitably be engaging in a speculative or hypothetical exercise which might be invalidated by the results of the retrial. It follows that the applications for leave to appeal by Draft One and McKenzie will have to be dismissed, as will that part of the first respondent's cross-appeal challenging his Honour's failure to award indemnity costs in its favour.

Further conduct of the matter 143 It is most regrettable that a trial which occupied so much court time will have to be reheard. It is, however, unlikely that the retrial will last anywhere near as long as the original trial. Because of the concessions made by the appellant in submissions at trial and in submissions before this Court, much of the evidence called in the first trial is either irrelevant or uncontroversial. The evidence which is uncontroversial can be dealt with by tendering the transcript. 144 Given its history, I would anticipate that this matter will be closely case managed by a judge of the Common Law Division so as to identify with precision those matters which are truly in issue and in relation to which oral evidence will need to be adduced. Such case management will undoubtedly identify other ways by which the length of the retrial will be significantly reduced. By way of illustration, I would anticipate that the medical evidence which occupied 32 hearing days, could be concluded within 5 days if the evidence were given concurrently. 145 It will of course be necessary for factual findings to be made on a retrial of how the appellant's condition developed to enable the causation question to be decided. This may also require more detailed findings as to the appellant's state of health before and during the leadership course. 146 I should stress that in making these observations, I am not seeking to be prescriptive or to constrain the way in which the retrial is to be conducted. The observations are made only to assist the judge hearing the new trial.

Costs 147 The first respondent wishes to reserve its rights to make submissions as to the costs of the appeal when the result of the appeal and its basis are known. Given the complexity of the appeal and the difficulties in managing such a substantial amount of evidence, this is a reasonable request by the first respondent and I am prepared to accede to it.

Orders 148 The orders which I propose are as follows:

(3) Judgment for the first respondent and Dalmau in the court below be set aside.

(4) The order for the dismissal of the first, fifth and sixth cross-claims be set aside.

(5) The costs orders of Patten AJ made 7 November 2007 be set aside.

(6) Direct that a new trial be held in respect of the principal proceedings and the first, fifth and sixth cross-claims.

(7) The application for leave to appeal in matter No 40838/2007 be dismissed.

(8) The application for leave to appeal in matter No 40839/2007 be dismissed.

(9) The costs of the first trial, including the first, fifth and sixth cross-claims, be determined by the trial judge in the new trial.

(10) The matter be listed for directions concerning the costs of this appeal, the first respondent's cross-appeal and the applications for leave to appeal by Draft One and McKenzie. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

(2003) 129 LGERA 311

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