STATE OF NEW SOUTH WALES v MANNALL

Court of Appeal (NSW)|2005-05-31|Before: Mason P, Giles JA, Tobias JA

CITATION: STATE OF NEW SOUTH WALES v MANNALL [2005] NSWCA 367

JUDGMENT OF: Mason P at 1; Giles JA at 171; Tobias JA at 172

CATCHWORDS: NEGLIGENCE - workplace negligence - employer's duty of care - psychiatric injury - appointment as Team Leader - victimisation, harassment, humiliation, abuse by co-workers - actions and inaction of supervisor - vicarious liability of employer - foreseeability of risk of injury - preventative measures - enquiry - reliability of plaintiff's testimony - foreseeability of injury - reasonably practicable means - causation - EVIDENCE - business record - s69(3)(a) Evidence Act - discretion under s135. (ND)

ASIC v Rich [2005] NSWSC 417 Australian Securities and Investments Commission v Rich [2005] NSWCA 152 Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 Czatyrko v Edith Cowan University [2005] HCA 14, 214 ALR 349, 79 ALJR 839 Koehler v Cerebos (Aust) Ltd [2005] HCA 15, 214 ALR 355 Mannall v State of New South Wales [2001] NSWCA 327 CASES CITED: New South Wales v Seedsman [2000] NSWCA 119, 217 ALR 583 O'Leary v Oolong Aboriginal Corp Inc [2004] NSWCA 7, Aust Torts Reports s81-747 Ringrow Pty Ltd v BP Australia Ltd (2003) 130 FCR 569 State of New South Wales v Heins [2005] NSWCA 258 Tame v New South Wales (2002) 211 CLR 317 Vozza v Tooth & Co Ltd (1964) 112 CLR 316 Whisprun Pty Ltd v Dixon [2003] HCA 48, 200 ALR 447

PARTIES: STATE OF NEW SOUTH WALES v Marilyn MANNALL

Appellant: P Deakin QC/ J Wynyard COUNSEL: Respondent: B Toomey QC/ J Sainty

Appellant: Gillis Delaney Brown SOLICITORS: Respondent: Walsh & Blair, Wagga Wagga

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40511/ 2004

MASON P GILES JA TOBIAS JA

STATE OF NEW SOUTH WALES v Marilyn MANNALL JUDGMENT

Overview 2 Following a trial in the District Court spanning 4 weeks in mid 2003 the respondent recovered a verdict of $339,722 for psychiatric injury stemming from workplace negligence. Judge McLoughlin gave lengthy reasons in a judgment delivered on 13 May 2004. 3 The respondent had alleged that, following her appointment in May 1994 to the position of Team Leader, Clerk, Grade 7/8 Wagga Wagga within the Department of Housing, she was subjected to victimisation, harassment, humiliation and abuse in the workplace causing her to suffer psychiatric injury. It was further alleged that the risk of injury was or should have been recognised by her employer, with steps being taken to prevent or ameliorate the situation that triggered it. 4 According to the opening portion of the appellant's written submissions, the only issues arising for consideration in this appeal are liability issues, namely: (a) whether the trial judge was correct in finding the appellant negligent in the circumstances; and (b) whether the trial judge was correct in concluding that, as a matter of causation, any breach of duty on the part of the appellant was causative of the respondent's injuries. 5 This is a fair summary. There are however many grounds of appeal still pressed and they need to be addressed in terms after I deal with the substance of the issues agitated. 6 The fact that some of the respondent's difficulties stemmed from personal interactions that are part and parcel of life means that a court must be cautious before pointing any finger at the appellant or those for whose acts the appellant is legally responsible and equally cautious before finding that level of fault capable of generating a conclusion of negligence. This, in a sense, is to re-state the central issues of negligence and causation. The onus of proof rested upon the respondent. 7 It is appropriate to remind oneself that the duty found to have been breached is that described by the High Court very recently in the following terms (Czatyrko v Edith Cowan University [2005] HCA 14, 214 ALR 349, 79 ALJR 839 at [12]): An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. If there is a real risk of injury to an employee in the performance of a task in a workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards. The employer must take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work.

8 The appellant correctly draws attention to the remarks of Windeyer J endorsed by his Honour's fellow justices in Vozza v Tooth & Co Ltd (1964) 112 CLR 316 and frequently repeated since (see eg Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 at 308). Windeyer J said (at 319): For a plaintiff to succeed it must appear, by direct evidence or by reasonable inference from the evidence, that the defendant unreasonably failed to take measures or adopt means reasonably open to him in all of the circumstances, which would have protected the plaintiff from the dangers of his task without unduly impeding its accomplishment. 9 Several factors contributed to the unhappiness that festered and grew within the respondent's team over the year and a half she was its leader. Only some of them were capable of being laid at the employer's door. The trial judge acquitted the previous team leader Mr Royle of any significant contribution to the continuing unrest, while recognising that the disruptive conduct of some members was influenced by misguided loyalty to Mr Royle. 10 Some team members did not get on with the respondent and had problems with her management style. There were several causes for this, as found by the judge. There were personality differences such as might be expected in any work environment. Some of the team were lazy and unmotivated and/or resented being called to account by their new leader. One of the respondent's tasks was to carry through a restructuring process in the delivery of services at Wagga Wagga, and there were team members (most notably Mr McKee) who were not happy with what this involved. The trial judge also recognised that the respondent's limited experience, lack of management training and personality traits may have contributed to disharmony within the team. So too, it was held, did the manner in which these matters were handled by senior management, most notably Mr Singh, who was the respondent's immediate superior and the person for whose negligence the appellant was found liable. 11 Resolution of the complex issues was not assisted by the time that elapsed between December 1995 when the respondent left work due to her illness and May 2003 when the trial took place. (This was a second trial, ordered by this Court in September 2001 because of matters that are no longer relevant. The first trial had taken place in 1999.) 12 The primary judge was acutely aware of the difficulty in relying upon the uncorroborated evidence of the respondent. His Honour found that she was an honest witness. But he also recognised that the nature of her complaint and of the illness putatively arising required a cautious and sceptical approach to the respondent's evidence. The appellant was given the benefit of the doubt on some of the claims advanced and some were rejected in more positive terms. 13 It will be seen that the judge reasoned to his conclusions mainly by reference to the chronology of events and the testimony of observers apart from the respondent. One category within the latter group were three persons from within the Department and one who was commissioned by the Department who played roles in investigating the issues as they were unfolding or immediately after the respondent left work, ie in early 1996. These were Mr Reith, Mr Phillips, Ms Stinton and Mr Breen (the outside consultant). Judge McLoughlin found support from the nearly contemporaneous observations and assessments of these relatively disinterested observers. He did not view their evidence uncritically. Nevertheless, he considered that their seniority and experience, the roles they adopted at the behest of the appellant, and their closeness to the events provided them with a considerable advantage. Their conclusions were generally supportive of the respondent's case as later propounded in the District Court and this Court. 14 The judge found that the respondent was a person of "normal fortitude" (Red 81, 125) to use the stylised and conclusory concept that has continuing, though attenuated, relevance in light of Tame v New South Wales (2002) 211 CLR 317. His Honour's reasoning in this regard betrays no legal or factual error. Mr Singh said in evidence that the respondent's team was the most productive and efficient of the three teams under his control at the relevant time (Red 99). This was also the assessment of Mr Philips, the Acting Manager of Corporate Services of the Department of Housing, Western Region (Red 54). 15 Between late 1994 and the end of 1995 matters deteriorated in the workplace to the extent that the respondent went off work on about 15 December 1995, taking formal leave of absence in February 1996. Thereafter, with the exception of one or two days partial work, she never returned to work. She retired in August 1996, certified unable to discharge the duties of her office due to anxiety depressive disorder (Blue 306).

Earlier proceedings and proceedings below 16 The statement of claim was filed in February 1998. 17 There was a trial before Puckeridge DCJ in mid 1999. A verdict for the defendant was overturned and in 2001 a new trial was ordered by this Court (see Mannall v State of New South Wales [2001] NSWCA 327). 18 The trial before Judge McLoughlin took place in Wagga Wagga over four weeks in May 2003 with written and oral submissions being provided in July 2003. The transcript of the first trial was put into evidence. Naturally it was supplemented. Some witnesses (including Mr Reith) were called for the first time at the second trial. Others were cross-examined afresh. The trial judge had a distinct advantage over this Court in relation to his capacity to assess the credibility and reliability of the key witnesses, ie the respondent (plaintiff) and Mr Singh. That advantage extended to his Honour's assessment of the impact of the respondent's illness upon her capacity to be an objective and accurate historian of the events that generated the illness. The judge was also enabled to form a judgment about the personality of Mr Singh in so far as it reflected on the responses that he made or ought to have made to the crisis as it unfolded. His Honour said as much in the judgment (Red 102).

The facts in detail 19 The respondent, who was born in 1946, commenced employment in 1982 in what was then the Housing Commission, a body that later became the Department of Housing. Between 1982 and 1994 she progressed through various positions at the Leeton office. 20 She applied for and was on 2 May 1994 appointed to one of three positions as team leader in Wagga Wagga. Her team was involved with Client Services. Wagga Wagga was the location of a section that had responsibility for much of the southwest of the State. 21 The selection committee that interviewed the respondent and unanimously recommended her appointment consisted of Mr Alan Reith, the Regional Director, Western Region; Mr Ranjit (Mike) Singh, the Area Manager, who became the respondent's immediate supervisor; and two other officers. 22 The team leader positions were vacant in consequence of a management restructuring. Mr David Royle had occupied the position roughly equivalent to that sought by the respondent, and he was then above her in the hierarchy. But the restructuring displaced him. When he failed to get his "old job" in competition with the respondent, he found that she had effectively leapfrogged him within the establishment. 23 Mr Royle, who was surprised and disappointed, appealed to the Government and Related Employees Appeal Tribunal (GREAT), but his appeal was dismissed in August 1994. This confirmed the respondent's appointment. Mr Royle was transferred to an administrative position at a lower grade. He moved to an office on the floor above where the respondent and most of his old team worked. 24 The respondent's Client Services Team was one of three teams based in Wagga Wagga. It was involved in dealing face to face with persons using or enquiring about public housing. Those based in Wagga Wagga worked from the ground floor of an office building. There were approximately ten team members stationed there and five in Cootamundra. 25 The respondent reported to the Area Manager, Mr Singh, who was also stationed at Wagga Wagga, occupying an office on the first floor of the building. Mr Singh reported to Mr Reith who was stationed at Orange. 26 The respondent embarked on her new duties with enthusiasm. She had been encouraged by her superiors to attack a work-place culture that had itself contributed to the restructuring. It appeared to management that several team members were more concerned with their own affairs than those of the Department's needy clients. 27 The respondent encountered and/or perceived resistance to change, coupled with difficulties in obtaining the co-operation and loyalty of her team. Such matters are necessarily hard to prove and I am not suggesting that "fault" was evenly distributed throughout the team or that the respondent's own management style was beyond reproach. She had received no management training before embarking on her new duties. 28 Later in these reasons I document instances of the dysfunctionality in the team that continued, indeed worsened, over the year and half of the respondent's effective tenure. The problems were real and serious. Findings to that effect are not in dispute. They were clearly recognised by those who investigated the crisis in early 1996. Mr Reith and Mr Singh acknowledged them as well. In this Court, the appellant conceded the dysfuntionality of the team (CA Tr p148). 29 One team member, Mr McKee, was a particular thorn in the flesh. He was the focus of continuing opposition and disruption. Particular instances of rudeness, obstruction and refusal to accept proper direction to cease non-appropriate work practices are well documented. Mr McKee was described by the judge as "a destabilising influence throughout the period June to December 1995" (Red 51). He played the lead role in organising the meeting of December 1995 that was the event that broke the respondent's spirit and her health. 30 The respondent always perceived that much of the trouble was fermented by the displaced Mr Royle or members of the team who had continuing loyalty to their old boss. This was a significant aspect of the problem as she reported it over the years to Mr Singh, later to her treating psychiatrists and later still in her evidence. But, in so far as the respondent pressed a claim that the State was vicariously liable for the active misconduct of Mr Royle, such a claim failed for want of proof. These findings did not, however, go so far as rejecting a Royle factor as part of the explanation of the disruptive conduct of the team and the unco-operative conduct of Mr Singh. 31 Whatever their genesis, the respondent's problems in managing her team were genuine, continuing, known to her superiors and capable of substantial amelioration. The respondent obtained favourable findings on each front. 32 The verdict for the respondent was based on the conduct of Mr Singh in not supporting the respondent in her attempts to deal with an increasingly stressful work environment. As indicated below, Mr Singh was found to have breached his duty of care as the respondent's superior by what he did and failed to do in the period May - December 1995. 33 It was the respondent's case that she was treated in a demeaning and denigrating manner by Mr Singh from the outset in mid 1994. It was also her case that she had to deal with staff, some members more than others, who were unhappy and unwilling to implement the "client service" based reforms that had led to the restructure. She had to deal with a day-to-day undercurrent of reluctant cooperation and at times open hostility. 34 Those who appointed the respondent knew that she was succeeding Mr Royle who had been her supervisor for the past eight years. It was known that Mr Royle was surprised and disappointed at being passed over. It was also known, indeed intended, that the respondent would be seeking to confront negative aspects of the "old culture" in the relevant section of the Department. 35 In the first trial, the respondent gave detailed evidence of slights and of perceived lack of cooperation from Mr Singh during the first year at Wagga Wagga. These included instances where she raised complaints about the conduct of Mr Royle and of another team leader who was a friend of Mr Royle. There was an occasion when Mr Singh was rude to her in the presence of Mrs Mercer. These events occurred in late 1994. Judge McLoughlin accepted that the respondent had complained to Mr Singh that she needed more support from him than she had been getting; and held that this indicated that Mr Singh was aware from late 1994 of staff disharmony. It was found also that Mr Singh had been rude to the respondent during this period (Red 72). Other instances of lack of support and use of inappropriate language were also established. Mr Singh's conduct towards the respondent during this earlier period was described by his Honour as "destabilising" (Red 72). 36 It is however the period between May and December 1995 that is critical. This was the time during which the respondent's health deteriorated, culminating in the crisis of mid December 1995. This is also the period within which the respondent was found to have manifested sufficient signs of disturbance to have put Mr Singh in a position where he knew or ought to have known that her health was at risk. 37 The milestones were as follows. 38 On 29 May 1995 there was a meeting of regional team leaders at Wagga Wagga. Mr Singh spoke rudely and abruptly to the respondent in the presence of other team leaders. 39 On 31 May 1995 the respondent wrote to Mr Singh, forwarding a copy of her letter to Mr Reith and to the EEO (equal employment opportunity) unit. The letter stated: Dear Mike, As you may be aware, I left the office in the afternoon on 29 May 1995 in a highly emotional state. The reason for my departure was directly attributed to the demeaning, belittling and impersonal manner in which you spoke to me at the Team Leader's Meeting yesterday. I am particularly concerned at the attitude displayed by you in front of my peers. You will undoubtedly recall that there have been many other instances in the past where similar occurrences have taken place. Quite frankly I am no longer prepared to put up with the harassment and insensitive manner in which I have been treated since taking up the position as Team Leader. The purpose of this minute is to advise you that I have sought assistance through the Public Service Association to put an end to ongoing harassment and humility [sic] which I have been subjected to by you and a number of other members of staff. Please be assured that I have no wish to work in a hostile environment. For that reason I sincerely hope that you and I can resolve the issue at hand without it leaving the Region. I have forwarded a copy to the Regional Director.

40 Mr Reith wrote to Mr Singh the next day as follows: STAFF COMPLAINT The attached letter from the Team Leader, Wagga Wagga was received by me yesterday. I have been aware for some time of the insidious destabilisation of the Wagga Wagga team by the former Operations Manager and/or his supporters since Mrs Mannall was appointed Team Leader. I believed that the issue was largely resolved during Mr Miller's period of relief in Wagga Wagga some months ago. You will also recall we discussed my perception of extreme disharmony in the Wagga Wagga office last week. I am receiving reports of staff in the Area Office being totally disaffected by having insufficient work to keep them occupied, at the same time as I receive comments regarding the lack of Area Office support to the Client Services team. I view with extreme concern the allegation that you are a participant in the hostility which I know Mrs Mannall has endured fairly stoically for a protracted period. You were a member of the Selection Committee who appointed her, and as Area Manager you have a responsibility for her training, development, support and performance. The focus on client service and the empowerment of client service teams should ensure leadership is one of your prime priorities. I perceive at the present time some serious structural and cultural problems. Your assertion that allegation of staff disharmony were "groundless and obtuse" does not accord with my observations over a lengthy period of time. I insist that you give what I see to be a serious allegation and a serious situation a more considered review. Your formal response to both the allegations and my observations is requested as a matter of urgency, along with any proposed solution should you ultimately accept that problems exist.

41 This letter is eloquent testimony to the problems that the respondent was encountering, the fact that they were generally known and had already been discussed between the two men, and the force with which Mr Reith spelt out Mr Singh's responsibilities to attend to the matter at hand. 42 Mr Reith retired in early 1996. Significant health problems developed thereafter. He was not called as a witness at the 1999 trial and the evidence he gave at the 2003 trial was provided by video-link, because he was too unwell to travel from Orange to Wagga Wagga. In his evidence, he displayed considerable and understandable lack of recollection as to events that had occurred eight years previously. 43 In this Court, the appellant argued that Mr Reith had "retracted completely" the primary evidence consisting of letters and reports from him in 1995-96 that generally corroborated the respondent's case. This overstates the effect of his evidence. Some of it involved lack of recall (eg Black 1468). There was nothing surprising about this, given that Mr Reith was giving evidence in 2003. He was long retired and had been very sick. Mr Reith undoubtedly sought to disavow the force of the language he had used in his letter of 1 June 1995 although, to some degree, he also sought to claim that he then had no personal knowledge of the matters about which he wrote. Mr Reith's conduct was itself on the line. The trial judge had the advantage of seeing Mr Reith give evidence. He has not been shown to have erred in his conclusion (Red 123) that Mr Reith was aware that the respondent had complained to him that she did not know how much more she could stand when he enquired of her health in September 1995. 44 Judge McLoughlin found that Mr Singh's response to the firm instructions from his superior was inadequate having regard to what he knew and ought to have known about the situation. 45 Mr Singh's initial response was a letter of 1 June 1995 in the following terms: I refer to your minute of June 1, 1995 concerning the Team Leader, Wagga Wagga. Let me say at the outset both myself and staff in the Southern Area have embraced the principles and philosophies of the "NEW" Department of Housing in a most welcoming manner despite the difficulties associated with a major restructure. My support and encouragement of the Team Leader, Wagga Wagga since May 2, 1994 has in my opinion been exemplary. I have recognised personality clashes from time to time. In these cases I have endeavoured to restore staff harmony in a fair, objective and amicable way to ensure a professional work environment is maintained. The penultimate paragraph of your minute indicated you have misread my fax of today - I referred to the reaction by the Team Leader concerned being "groundless and obtuse" not the serious issue of alleged staff disharmony. I find your comments most distressing to say the least. To make judgements about one party only - that is the participants of an alleged conspiracy - is somewhat premature. We would probably benefit from an impartial arbiter in what now is a very serious matter indeed. I was always my intention to provide you with a considered report regarding this matter. Given I have been implicated in the alleged conspiracy your advice as to whether I should also seek PSA, EEO and/or Legal advising would be appreciated. 46 A first observation about the Singh letter is its effective denial that a problem existed. Much of Mr Singh's testimony was along similar lines. He also denied that he had seen the respondent in "a highly emotional state", as she had averred in her letter (see Black 1335). As indicated below, the trial judge made findings contrary to Mr Singh both as regards the respondent's visible reaction on 29 May 1995 and the reality and visibility of the workplace disharmony that Mr Singh had disputed in his letter. 47 A second observation about the Singh letter concerns the significant admission that "we would probably benefit from an impartial arbiter in what now is a very serious matter indeed". This is relevant both as to the seriousness of the problem and as to an appropriate matter to address it. It will be seen that Mr Singh never followed through in the manner indicated. 48 Thirdly, the promised "considered report" never eventuated. 49 A couple of days later Mr Singh told the respondent that he did not realise that he had upset her. He said "Mate, can we be friends?". They shook hands. The respondent said that she agreed to let bygones be bygones and to try a fresh start (OT 41). This exchange appropriately addressed the hurt stemming from rudeness at the staff meeting. It did not touch the management issues that the respondent and Mr Reith had flagged. The respondent needed more than Mr Singh's professed friendship. That need increased as the year went on. 50 There was an incident in late July 1995 when the respondent told Mr McKee that she thought his conduct was inappropriate and time wasting. He and two other staff members were standing around talking about the touch football team and holding up sweaters in full view of the counter where clients were (Black 103). A couple of days later Mr McKee accused the respondent of acting like "a little Hitler" in the office. He offered her some Amway tapes that would help her manage better (Black 77). (Mr McKee's promotion of Amway products during office time had been a cause of concern to the respondent.) The respondent reported this to Mr Singh who promptly called a meeting between Mr McKee and the respondent. Mr Singh told Mr McKee: "Don't worry, none of this will be documented matey, nothing will be on your file. This is an informal meeting just to discuss these issues and the concerns". McKee apologised and promised the respondent his full support (Black 78, 1348). There the matter was allowed to rest, despite later complaints by the respondent to Mr Singh about McKee's continuing disruptive and confrontational behaviour (Black 78-81). 51 On 7 August 1995 the respondent wrote to Mr Reith expressing gratitude for his support, help and assistance "in assisting me cope with the numerous problems I have encountered following my appointment to the position of Team Leader Wagga". The letter continued: Due to a number of recent family crises, namely the death of my mother-in-law and the serious industrial accident suffered by my youngest son, I have not as yet finalised in writing details of some of the forms of harassment and humiliation that I had been subjected to prior to your intervention after I finally brought these matters to your attention. I will however endeavour to provide you with this information in the near future. Once again I wish to thank you for the full commitment shown by yourself to clients and staff alike, and look forward to speaking with you in person at the next available opportunity.

52 The letter is as much a plea for continuing assistance as an expression of gratitude for the past. It also corroborates the respondent's testimony about the difficulty she felt in looking to Mr Singh for encouragement or support. Undoubtedly she tended to put on a brave face when dealing with him. This in itself did not authorise Mr Singh to adopt a policy of non-intervention, a proposition occasionally flirted with in the submissions of senior counsel for the appellant. I emphasise the words "in itself" and I am not suggesting that the reasonableness of Mr Singh's response is to be judged without consideration of what he actually knew or ought to have known about the office problems and how the respondent was coping with them. 53 On 18 August 1995 the respondent provided Mr Reith with a list of ten incidents of "harassment, humiliation and degradation to which [she had] been subjected to by various personnel at Wagga Wagga office" (Blue 451). Some involved public rudeness on Mr Singh's part, some were complaints about the conduct of Mr Royle or members of the respondent's team. Early in the letter the respondent stated: Whilst the Area Manager, Mr Mike Singh, was not a party to all of these incidents he had been made aware of most and, through blatant indifference by his inaction he has condoned the actions of others in their endeavours to make my job as Team Leader as difficult as possible. 54 The letter referred to feelings of belittlement and humiliation. The respondent indicated in no uncertain terms that she was not prepared to continue tolerating (from Mr Singh) "this kind of harassment and treatment in the future" (Blue 456). 55 Nothing of substance was done by either of the respondent's superiors to address the underlying problem apart from the temporary removal of Mrs Mercer. 56 There were two incidents at a managers' conference in Orange on 10-12 September 1995. The first related to a letter of complaint made by an officer at Leeton against another departmental officer, Mr Christian. The respondent was asked to meet with Mr Reith and Mr Singh and was challenged with having instigated that complaint. She had not instigated it, but had a copy of the letter which she was persuaded to rip up. Mr Christian was brought in to offer an apology. Becoming distressed and "a little bit emotional" at Mr Reith's terse attitude over the matter, the respondent turned her head away in an attempt to conceal her emotions. Mr Reith said "don't pull that female stunt on me" whereupon she became (in her words) "very emotional, distraught, almost to the point of collapsing". She was so upset that she was unable to go to dinner with Mr Singh and other officers as previously arranged. This incident is indicative that Mr Singh was on notice about her psychological fragility. 57 Later at the same conference the respondent was querying another officer why her team had been overlooked in an allocation of funds required to provide fencing for clients. The matter had been an oversight and it was promptly rectified, but the respondent insisted on knowing how the situation had come about. Mr Singh said: "There you are, you've got your $30,000. Aren't you happy?" As she persisted, Mr Singh told her "Don't you fucking understand?" She became distressed and as she left to go to the ladies room Mr Singh called after her "Don't fucking walk away from me when I'm talking to you". The respondent felt humiliated. 58 There was conflicting evidence about these events. Judge McLoughlin found that they had occurred substantially as claimed by the respondent (Red 123). 59 The next day, 13 September 1995, Mr Reith telephoned the respondent. He told her that he was very worried about her and about her health. In the context, this was an expression of concern about her mental health. The respondent told him that she did not know how much more she could take. Mr Reith had no recollection about this matter (Black 1468), but the respondent's evidence (at OT 50, Black 94-5) was accepted by Judge McLoughlin (Red 52). 60 Judge McLoughlin also found that there was communication between Mr Reith and Mr Singh about the matter (Red 52). The finding was challenged before us, but it was well open. Mr Reith was in daily contact with Mr Singh. He said he discussed the respondent's complaints with Mr Singh each time they were received (Black 1459). Such a communication would have been consistent with the proper performance of the senior officer's duties and with the stance he had adopted in June. 61 The trial judge found that the "descending chaos" of the office (Red 51) continued and worsened in the last quarter of 1995. This in turn provoked conduct from the respondent that those hostile to her viewed as evidence of her unfitness to manage and that those who supported her (including her medical advisers who entered the scene in 1996) viewed as symptomatic of the emerging illness. 62 The judge's conclusions about the seriously dysfunctional workplace and its visible impact upon the respondent were well open, quite apart from the respondent's own evidence. Support for them may be found in several places:

(a) Ms Hayward, a psychologist involved with Commonwealth Rehabilitation Service recorded that Mr Reith told her in a telephone call on 22 January 1996 that (Blue 478): He understands the pressures on Marilyn in the Wagga office and his version of events corroborates Marilyn's very closely. He spoke at length about the politics of the Area/Wagga office and understands the stand-off that has occurred between Marilyn and her Supervisor…. He realises that Marilyn has been unsupported by her Supervisor but he believes that his visit last week has resulted in a suitable chastening of her Supervisor and of his decision to be more supportive of Marilyn.

(b) As indicated below, on 7 or 8 December 1995 the respondent approached Mr Singh about continuing workplace harassment. She was accompanied and supported by two team members Ms Stinton and Ms. Armstrong. Ms Stinton could not be located to give evidence, but a detailed memorandum that she addressed to Mr Reith on 15 January 1996 was admitted as a business record (Supp Blue 1). The Stinton memorandum documents the subtle and not so subtle climate of obstruction and harassment from the team members particularly opposed to the respondent. There were failures to accord common courtesies or provide assistance when things were busy. There was much "back stabbing" and "constant whispering" when the team leader's back was turned. Things got particularly bad when Mrs Mercer returned to work on the ground floor on 4 December 1995. In Ms Stinton's assessment, it was evident that there was a severe problem "the more serious being the obvious conspiracy against the Team Leader, Mrs Marilyn Mannall, by Glen Mills, Heather Mercer, Karleen Boughton and Scott McKee" . According to her, all personnel in the office with three named exceptions had at some time or another made vindictive remarks against the respondent.

(c) Ms Armstrong gave evidence for the respondent. She was an officer in the team at the relevant period. Her evidence corroborated the respondent's emotional decline in late 1995 (Black 420-1). She described Mr McKee's attitude as having "become very cheeky, he sort of tended to disobey any of her requests for things to be done" (Black 421). This evidence was accepted (Red 107).

(d) Other members of the team who were not in the respondent's camp also attested to its continuing disfunctionality and the signs of the respondent's worsening condition. For example, Mr Garland described her mental state as "agitated, getting slightly paranoid, probably - well possibly depressed" . He thought that the other team members would "have to be blind if they didn't see what I saw" (Black 533). According to Ms Brilley, in the weeks prior to 13 December the respondent "was becoming very withdrawn and was not talking to a lot of the staff members… she was emotional … she would often be seen crying" (Black 579).

(e) Mr McKee himself described the disharmony within the team as becoming unbearable by December 1995 (Black 873).

(f) Ms Neville-Ross agreed that there was open dissatisfaction among team members that was openly expressed (Black 1130).

(g) I have touched on only part of the evidence of team members in this regard. Further details are set out in the respondent's written submissions (Orange 74-81). The material is particularly relevant to the issues of causation and the likelihood of Mr Singh being aware of the warning signs of mental collapse.

(h) Additional evidence covering the last quarter of 1995 was gathered in the course of the department's response to the crisis in early 1996. Details of the reports of Mr Hallinan and Mr Breen are set out later in these reasons. They were generally corroborative of the respondent's case. 63 The appellant put into evidence a report from Moreys, an insurance investigator. It records various enquiries and interviews, many of them referable to the Royle allegations that were ultimately rejected. The report also clearly documents the knowledge of Messrs Reith and Singh as to the "significant discord" within the office. Included are observations apparently direct from Mr Singh's mouth that: … it became a regular occurrence for the worker to go to him with complaints about staff, most of which he regarded as petty. Singh believed the complaints were such that the worker, in her position, should have been capable of resolving the matters without resorting to bringing them to him. … Singh indicated to us that he became 'sick and tired' of the worker's complaints. By the time the worker went off work, however, it seems it could be said that matters were out of hand.

64 The report cited (with apparent endorsement) a comment by Mr Hallinan to the effect that "We as an organisation have contributed to Marilyn's state of mind. I just think the whole situation down there (Wagga) has been poorly managed." The investigator further recorded that: The previous Regional Director, Allan Reith, voiced similar views to us, although he was not prepared to include such in his statement. The present Acting Regional Director at the Wagga office was quite critical of the insured, as far as the way the matter had been handled. He apparently believed much more could have been done by his predecessor, and he was also concerned that there was little documentation in relation to the matter.

65 This report obviously carried weight with the trial judge, not surprisingly. 66 The respondent was in regular contact with Mr Singh. She did not suggest in evidence that she told him she was finding it increasingly difficult to cope during the latter months of 1995. Nor did she seek any medical assistance during this period. The appellant seeks to make much of these matters in light of some observations in the recent decision of Koehler v Cerebos (Aust) Ltd [2005] HCA 15, 214 ALR 355. The respondent's broad answer is that Mr Singh and his attitude were the problem rather than the solution (a point taken by the respondent from as early as January 1996 during grievance procedures). The respondent also points to the strong body of evidence that points to the early signs of the psychiatric illness that was diagnosed after the end of 1995 and Mr Singh's awareness of them. 67 This evidence received careful attention in the reasons for judgment. The judge closely considered the motivation and credibility of the various witnesses. His key findings are summarised below. 68 Matters came to a crisis in December 1995. On 7 or 8 December 1995 the respondent and two members of her team, Ms Armstrong and Ms Stinton went to Mr Singh. Ms Armstrong was the grievance officer in the team. According to the respondent, the discussion related to the problems that Ms Stinton was having from certain staff in the team and the harassment she was suffering (Black 116-7). 69 In Ms Stinton's words, "all hell broke loose" on 4 December 1995 when Mrs Mercer returned to work. "The DAILY whispering, back stabbing of Mrs Mannall, Ms Armstrong and myself has (sic) become too much to bear." There was an incident on 6 December when Mrs Boughton was exceptionally rude to Ms Stinton in front of other personnel. There was another incident involving Mrs Mercer on 6 December. Ms Stinton complained to the respondent who investigated and told the culprits to cease harassing Ms Stinton. Ms Stinton complained to an outside grievance officer because she did not want the internal grievance officer, Ms Armstrong to become involved. 70 It was in these circumstances that Mr Singh interviewed the three women. He advised them that he would call a meeting the next day and place three named persons (Boughton, Mercer and Mills) on notice. He said that he would remove Mrs Mercer and Mr Mills from the team the following day. Most of those things did not eventuate. 71 On 8 December 1995 Mr Singh convened a meeting of the team, including the respondent. He exhorted everyone to work together. With a dramatic flourish he threw resignation forms on the table and invited the team members (not including the respondent) to resign if they could not get along with each other. In evidence he described this as a "tactic" for dramatic effect that he had worked out in advance with Mr Reith. Mr Singh said that he thought it was an opportune time, given what people had said to him earlier "to just, sort of just lay the law down, so to speak [with the purpose of getting people to] focus on … their work performance" (Black 1352). He had a general recollection that he told the staff that he wanted them to focus on "our core business" and that they needed to continue providing a professional service to tenants and applicants for housing assistance. 72 There is no evidence that Mr Singh took the opportunity to affirm publicly the obviously beleaguered team leader. 73 Ms Stinton had a "flexi-day" on 8 December 1995. Accordingly, the slender hearsay account of that day's events in her memorandum carries little weight. What she could prove and what she regarded as significant were the fact that Mr Mills and Mrs Mercer were not removed from the team as Mr Singh had previously indicated, nor were "the offending personnel" interviewed individually (Suppl Blue 3). Her memorandum also shows the leading role played by Mr McKee in calling a meeting on 13 December 1995 at a time when the respondent and her supporters, including Ms Armstrong, were known to be absent. 74 Mr Singh decided to take an agnostic position as to who was at fault in the matters that had prompted Ms Stinton to raise her grievance. Neutrality is not itself a point of criticism. It does however illustrate Mr Singh's management style. There is much evidence that he was anxious at all times to remain "mates" with everyone concerned. Several witnesses considered that this attitude was taken to a fault, a conclusion with which the trial judge agreed. 75 The trial judge held that Mr Singh's passivity in responding to an emerging crisis of which he was aware or ought to have been aware was the nub of the case against the appellant giving rise to the award of damages. That conclusion itself is challenged on several fronts. I have however paused in the chronological narrative to emphasise that, on one view of the case, what happened thereafter is critical to the respondent's defence of the judgment. The matter cuts both ways. On the one hand it becomes easier from this point onwards for the respondent to identify matters attributable to Mr Singh as regards her "nervous breakdown". On the other hand, the question whether Mr Singh was negligent in his response to Mr McKee's proposal to hold a team meeting effectively behind the respondent's back is more delicately nuanced. So delicate, the appellant submits, that it is not possible to find negligence as distinct from (at most) an error of judgment on the supervisor's part. 76 On 13 December 1995, at Mr McKee's instigation and with Mr Singh's concurrence, the whole of the team met behind the respondent's back when she was in Sydney. Mr McKee was not the second in charge or the grievance officer within the team. The respondent first learnt of the meeting the next day when Ms Stinton told her about it. 77 Mr McKee had earlier told Ms Stinton that she was not invited to the meeting as she was "not part of the team". He also told her that the respondent was "not invited, anyway she will be in Sydney". 78 A torrent of grievances directed at the respondent emerged at the meeting and were documented by Mr McKee who prepared and settled a record later that day in consultation with some of his colleagues. The Minute is addressed to Mr Singh for his "consideration and action". It provided: It was decided to hold a team meeting without the Team Leader to discuss some ongoing issues and concerns within the team. This was done with the view to also finding some solutions to the matters raised on Friday 8 December 1995 and other matters. The issues raised are outlined below with possible solutions offered where it was felt appropriate. It was felt some of the issues discussed may require management input to solve and therefore no solution was offered. 1. Flexi time/hours The team felt it would be sufficient to notify the 5/6 [this would be someone other than the respondent] of any intention to leave early subject to sufficient staff available to maintain service 2. Counter roster Postpone implementation until the office refurbishments are completed 3. Team lacking professionalism? We would appreciate clarification on this issue 4. Differences of opinion between team members Make the other party or parties aware of the issue if necessary and set about solving immediately to quash any disharmony 5. Technical relief The technical staff were not consulted as to the need to provide relief in N De La Rue's absence. It is appreciated that there are budgetary constraints, but as yet there has been no significant attempt to relieve the technical staff of even some of their duties utilising existing staff despite concerns being expressed 6. Higher duties An opportunity should be extended to all staff in relation to relieving in higher positions. This would allow greater involvement in all team areas and enhance career paths 7. Inappropriate behaviour by Team Leader * It has been brought to the attention of a number of team members that the Team Leader has openly criticized members to her team to at least one contractor and Department clients. * On more than one occasion confidential conversations have taken place between team members and the Team Leader which have not remained so ie feedback has confirmed a breach of confidentiality. * It seems that many team members have experienced being used as sounding boards for the Team Leader's criticisms of other team members, especially whilst travelling in a car. * It is felt that many issues arising within the team could and should be solved by the Team Leader and need not involve the Area Manager or other parties. * As there are staff within this office capable of carrying out relief at the 2/4 level it is felt that any relief should be at the Clerical Officer 1/2 level. * It seems that there are unrealistic restrictions placed on any conversations other than work related issues during working hours. * The Team Leader seems overly concerned with the performance of other teams in comparison to her own. * The Team Leader's manner with her staff has at times been abrupt with apparently little consideration for the officer's feelings. * The Team Leader has at times taken it upon herself to become involved in issues with clients including making decisions without the Client Service Officer's knowledge. This has led to the team and the CSO appearing unprofessional in its dealings with clients. * The Team Leader, on many occasions has vacated the office during core time without informing any team member of her movements. * The Team Leader does not always accept responsibility for decisions she has made regarding clients ie in one case, the Team Leader approved a rehousing and then said that it should not have been approved, appearing to imply that the CSO was at fault. * The Team Leader takes a work car without consulting the 'car roster board' sometimes leaving an officer inconvenienced. Whilst it is appreciated that these matters may not be solved overnight, the suggestion is put forth that a team meeting be conducted with the Area Manager on Wednesday 20 December 1995 at 9.30am. This could be the first steps toward solving the abovementioned matters and restore professionalism to the whole team. Should alternative action be proposed, notification in writing would be appreciated. For your consideration and action Distribution: Michael Singh - Area Manager [Thence followed the names of the team members excluding the respondent]. 79 The Minute contained provisions for signature and comment by 10 persons, presumably the permanent establishment at Wagga Wagga. Most of the proposed signatories signed, indicating their concurrence with the Minute. Ms Armstrong wrote on it that she was not prepared to sign because some of the items were a form of personal attack that should not have occurred in this manner (Blue 305). 80 Some items appear to be responsive to particular and probably genuine concerns that Mr Singh must have signalled on 8 December. But the bulk of the memorandum addresses the topic of "inappropriate behaviour by Team Leader". 81 At the end of the day, this case is to be decided without resolving the rights and wrongs of the matters of complaint raised at the meeting. It must also be recognised that discussion of staff grievances is not in itself a basis for any finding of negligence against the appellant. 82 The meeting and the Minute documenting it constituted a strong vote of no confidence in the respondent. It would have made life very difficult for anyone but the most self-absorbed of managers. The respondent's claim for damages proceeds on the back of medical evidence diagnosing psychiatric illness stemming from the respondent's reaction to the events of the succeeding few days. The outcome of the meeting was a devastating rebuff to the respondent's self-esteem and her mental health. The events surrounding that meeting were viewed by the respondent and her medical advisers as back-breaking, not suggesting thereby that the event itself was a "straw". 83 Mr McKee presented the Minute to Mr Singh on 14 December. When, later that day, the respondent asked Mr McKee for a copy of it she was directed to Mr Singh. She had previously been directed by Mr Singh not to interfere while the document was being finalised and signed. He handed her the Minute after it was completed, telling her that the meeting had occurred with his approval, but not otherwise counselling her (Black 121-2). 84 Mr Singh's handling of the situation before and after the event was particularly insensitive, according to the evidence. Whether it betokened negligence is another matter, to be addressed later. It suffices for the present to observe that there was a body of material supporting the conclusion that Mr Singh ought not to have allowed the meeting to have been called behind the respondent's back, at Mr McKee's behest, with his blessing and without any measures in place to have regard to the respondent's interests. Much of this came from the employer's own officers who analysed the situation in the immediate aftermath. 85 The next day the respondent consulted her general practitioner, Dr Roche. According to the recorded history, she made no reference to the meeting. However the history and symptoms as presented included continued lack of support from her supervisor (Blue 308). Dr Roche diagnosed "stress-related disorder, secondary to work". 86 The respondent never returned to fulltime work. The initial period of her absence may have coincided with Christmas leave. On 5 January 1996 Dr Roche certified her fit to return on light duties. She appears to have returned in some capacity between then and 28 February 1996 when she went on extended leave of absence. She first consulted Dr Whitaker, a psychiatrist on 14 February 1996, giving a history generally consistent with her case at trial (Blue 314-7). Dr Whitaker diagnosed an adjustment disorder, mild anxiety and depression related to work stresses. 87 Attempts were made in January-February 1996 to address what had become a very serious situation. On 31 January 1996 the respondent lodged a formal grievance notification against Mr Singh. There was a grievance meeting attended by the respondent and Mr Singh before Mr Ray Hallinan. There were later grievance meetings involving Mr McKee. 88 These procedures resulted in a statement from Mr Hallinan expressing conclusions as to the genesis of the problem (Blue 422) that was put into evidence by the appellant. In fact, it corroborated the respondent's case in several respects, based as it was (in part) on Mr Hallinan's own observation of the situation in late 1995. 89 Mr Hallinan was the Manager, Corporate Services for the Western Region of the Department. His duties included grievance handling and dispute resolution involving staff matters. He first became aware of the respondent's perceived lack of support from Mr Singh in about mid-1995. Details of her then expressed concerns relating to Mr Royle and Mr Singh are set out in the statement (Blue 442-3). According to Mr Hallinan, one difficulty was that: … we were telling her to document these matters whilst Mike on the other hand was advising her against documenting them. 90 Mr Hallinan was at a meeting at Wagga during the week of 25 November 1995. Various matters were recounted by the respondent, Ms Armstrong and Ms Stinton. Mr Hallinan stated: As far as I was concerned, there were obvious problems there. I was of the view after I came back from there that the problems were becoming very serious. I spoke to the Regional Director about this on my return. Alan's advice was that Mike Singh was the Area Manager and we should give him every opportunity of resolving the matter and he advised me to ring him and tell him what was happening. This I did. He said he was fairly concerned about some of the matters that were being said and he agreed to meet with Linda Stinton. I believe he met with Linda Stinton and Helen Armstrong. I can't recall getting any feedback from Mike on this.

91 The Hallinan statement then documents his investigation of the meeting of 13 December 1995 and its aftermath. Mr Hallinan was involved in formal grievance procedures involving Mr McKee in January 1996. He also had access to the report prepared by the outside consultant, Mr Breen, in which there were findings critical of Mr Singh but not of the respondent (Blue 425E-J). Mr Hallinan's conclusion was: I have no doubt that we as an organisation have contributed to Marilyn's state of mind. I just think the whole situation down there has been poorly managed and the situation has been let run to the point where she is probably over the edge at the present moment. I say that because the problem probably started about two years ago and it has never been resolved. 92 The Department also commissioned an enquiry from Mr Breen who provided Mr Reith with a confidential report on 1 February 1996. Its admission into evidence over the objection of the appellant is the subject of Ground 13 in the notice of appeal, a ground that I reject for reasons stated later. The detailed report documents the erosion of the respondent's control of her team over the previous six months. The respondent's complaints against Mr Singh and others are recorded and evaluated. It is clear that Mr Singh was interviewed at the time and that he disputed most of the allegations. 93 The Breen Report shows a team in prolonged crisis whose leader had sought but failed to obtain assistance to which she believed she was entitled from higher management. Mr Breen's recommendations included the following (Blue 447): Mr Singh has an open and easy-going management style and it is in his nature that he is seen by all staff as their friend. This approach is unsound under ideal conditions and fails abysmally during time of conflict. There is reason to believe that during the period of change immediately following implementation of the restructure (especially during and subsequent to Mr Royle's unsuccessful appeal against the appointment of Ms Mannall), Mr Singh failed to recognise the symptoms of discord between these officers. Additionally, in not gauging the strength of feeling held for Mr Royle by other Area Office staff, Mr Singh also appears to have been oblivious to what were initially petty incidents and issues which both irritated and frustrated Ms Mannall in achieving in her goals as Team Leader. As a consequence, however unwittingly, Mr Singh's actions (or inactivity) were perceived by Ms Mannall as unsupportive of her and those issues which he could have readily resolved at the time have now assumed far more serious proportions. Key findings on liability 94 The reasons of the trial judge are discursive, repetitive and uncorrected. When quoting from the judgment I have amended obvious typographical errors. 95 Parts of the respondent's pleaded case were not established or were rejected by the trial judge. These included some of the more extreme allegations of harassment and victimisation; some of the allegations against Mr McKee; and the allegations against Mr Royle, in so far as they were pressed as an independent basis of the appellant's vicarious liability (Red 66-7). 96 At the end of the day, liability turned upon the conclusion that the State was vicariously liable for the negligent acts and omissions of Mr Singh during the period May to December 1995. Mr Singh's conduct materially contributed to the respondent's mental breakdown that was diagnosed from her reaction to the events in mid December 1995. 97 The judgment is replete with conclusory findings as to Mr Singh's negligence (see Red 49, 65, 83, 100, 103-5, 108-9, 114-15, 121, 124-9, 130-1, 132-3). 98 For example, at Red 49, 50 the judge held: When one looks at the evidence Mr Singh had in fact done little apart from meet with the plaintiff post-June 1995, shake hands hoping that everything else would go away. He convened the meeting on 8 December when he had thrown the resignation forms on the desk, but beyond that had done nothing to relieve the office tensions or deal with obvious escalating health problems of the plaintiff, health problems which he himself recognised, although not conceding in his evidence… Mr Singh was far more concerned about himself than concerned with the proper execution of his function to ensure that the psychiatric health of the staff was properly attended to and a proper and safe work environment provided.

[The appellant is correct to point out that the last sentence implies that the duty was an absolute one, as distinct from one of reasonable care. This however was clearly a slip, because the correct standard is stated many other times elsewhere in the reasons and because there are particular findings addressing the unreasonableness of Mr Singh's conduct as a whole.] 99 At Red 65 the judge held that Mr Singh: … was inactive and non-supportive and made no real attempt to resolve festering issues from at least May 1995 and probably for the whole of the period of the plaintiff's employment at Wagga Wagga. Mr Singh's omissions, inactivity, failure to respond and failure to detect the problems are the significant cause of the deterioration of Mrs Mannall's psychiatric health in the six months to December 1995. Allowing the meeting of 13 December 1995 to take place in Mrs Mannall's absence was, as Dr Metcalf stated, 'the last straw'.

100 At Red 104 the judge said: I do not accept that Mr Singh could not have tried any more. There was much [more] he could have done than that which ultimately occurred in early 1996 when counsellors were brought in, when arbitrators or mediators and a full assessment of the difficulties in the office properly examined [sic]. This should have occurred shortly after June of 1995, or at least by September…..

101 At Red 118 the judge held: It is clear that no impartial arbiter was appointed and Mr Singh took no steps to monitor the team to assess the plaintiff's progress from that time, notwithstanding his view that it was a very serious matter. He also never gave the considered report to Mr Reith which he said he was going to do. … It is clear that Mr Singh did nothing about [the disharmony] nor did he attempt to monitor the plaintiff's emotional state of which the plaintiff had complained. This emotional state I find was fairly obvious in September, obvious to the team from well before that and would have been well known to Mr Singh by observation, or at least by enquiry that he should reasonably have made.

102 At Red 125 the judge held that: … before the meeting of 13 December there was foreseeability within the defendant through Mr Singh and Mr Reith of the plaintiff's deteriorating health with further risk of psychiatric and psychological injury. This could have been prevented by the steps to which I have referred. In my view the plaintiff's psychological and psychiatric injury was foreseeable, it was preventable and the failure by Mr Singh to take the steps to which I have referred to, to eliminate the risk showed a want of reasonable care for the plaintiff's safety. 103 Finally, (at Red 130-2) the judge held: Mr Deakin of Queens Counsel submits on behalf of the defendant that the defendant had taken all reasonable steps open to it to deal with the plaintiff's perceptions and complaints. I do not accept this proposition. The reason being that the plaintiff complained regularly to Mr Reith, Mr Reith believing there was little means of communication between she and Mr Singh. Mr Singh was aware of that belief in the plaintiff. It may be that there was some degree of exaggeration or perceptions in her complaints that matters were worse than what she complained about. Notwithstanding, there was a basis of her complaints to staff discontent; a basis for belief that there was some comments being made in relation to her; some basis for coming to the view that notwithstanding a good end result for the implementation of the new work program for the defendant, there was continuing bickering and dissent with vocal attacks upon her and that Mr Singh did not deal with and allow these matters to fester in the manner to which I have referred. This was the failure to deal with the plaintiff's complaints by Mr Singh and Mr Reith. Mr Reith left it to Mr Singh, and I am not quite certain that this was appropriate in the circumstances of what Mr Reith knew without really taking further steps to ensure that the matters were implemented by way of arbitration, the use of protocols, mediation, investigation, counsellors or the introduction of other independent personnel as ultimately occurred. Mr Singh did nothing. Mr Reith said he would leave it to Mr Singh and Mr Singh stood mute until 8 December when his reaction was a gross over-reaction and a failure then to adequately deal, which by then had become a major problem. For those reasons I do not accept the submission that the defendant was reasonable in its conduct. The plaintiff's psychological and psychiatric condition was recognisable, at least by mid 1995 and probably earlier. The failure to recognise it, the failure to implement proper alternative systems to deal with the plaintiff's problem caused her problem to manifest and then allowing the meeting to take place on 13 December brought the effect of that meeting being superimposed upon the plaintiff's then psychological condition, resulting in the significant psychological and psychiatric disorder which I have found. 104 These conclusions rest upon specific key findings that I would summarise as follows:

There was significant and disruptive disharmony and disloyalty within the Client Services Team. It continued and worsened in the period May to December 1995. It was known to Mr Singh (Red 51, 64, 84, 123).

Throughout this period Mr Singh knew of the seriousness of these problems and of the increasing stress upon the respondent caused by (and perhaps in turn contributing to) the disharmony. The respondent had complained frequently to Mr Singh, both directly and via Mr Reith. Mr Reith had directed that these matters should be addressed (Red 70, 72, 82, 84, 118, 124).

Mr Singh was actually aware that the respondent was reluctant to raise her concerns with him (Red 73, 98, 130-1). He knew that the respondent had preferred to share her concerns with his superior, Mr Reith. This attitude of the respondent stemmed in part from her feeling belittled and humiliated by his outburst in September 1995 (Red 98, 124).

Mr Singh knew from September 1995 of the actual deterioration in the respondent's mental health (Red 51-2, 101, 108, 131-2). Alternatively, he ought to have known of it (Red 51, 124, 132). These findings rested on (a) Mr Singh's admission when he told Ms Armstrong at the meeting of late December 1995 that the respondent had been (mentally) sick for a long time (Black 428, 433); (b) discussion with Mr Reith in September 1995 after the respondent had told Mr Reith that she did not know how much more she could take; and (c) the visibility of the respondent's distress as attested to by many of the team members (see above).

In light of this conclusion about notice, it is hardly surprising that there were findings that the risks to mental health were foreseeable. Findings to this effect were made in the earlier appeal in this case (see the reasons of Sperling J at [67]-[69]). I shall return to the issue of foreseeability.

Strictly speaking, Mr Singh's motives were irrelevant to the issue of negligence. It would not matter whether his conduct (if negligent) was the product of hostility towards the respondent, inadequate training, laziness or a personality unwilling to confront issues proactively when required. The judgment does however express some views on this topic. Despite Mr Reith's stern directive of 1 June 1995 and the relaying to Mr Singh of the gist of the September conversation in which the respondent told Mr Reith that she did not know how much more she could take, Mr Singh showed indifference to the respondent's plight and continued to adopt an unreasonably passive managerial role. He was actually hoping the problems would go away (Red 64-5, 70, 72, 103, 108, 118, 119, 131). Mr Singh's evidence that he had investigated the respondent's complaint, sat down and worked through it was rejected (Red 119). He was found to have been aware of the need to do more to assist the respondent's admitted stress, yet nothing effective was done for 6 months (Red 100-2). His written duties included playing a proactive role in grievance resolution (Red 84, Blue 673).

Mr Singh had access to formal and informal mechanisms that could have been used and, it was held, should have been used. He was the respondent's direct supervisor and located one floor above her at the Wagga Wagga office. He had been forcefully reminded about his line-management authority to act in the particular matter on several occasions by Mr Reith. He exercised this authority (inadequately) when, for example, he called the meeting on 8 December in which the resignation forms were thrown down in front of the staff members. In addition, there were more formal mechanisms such as those that were adopted in early 1996 involving Mr Hallinan and Mr Breen (Red 84-5). Mr Singh knew that the problem was getting beyond his capacity and of the need for an impartial arbiter as from June 1995 (Red 84, 102).

The medical crisis would have been avoided had these available mechanisms been resorted to by Mr Singh (Red 125, 132-3).

There were important findings about the meeting of 13 December. It was organised by Mr McKee, who planned it to take place without notice to the respondent, while she was away from Wagga Wagga, and with a major purpose of discussing and documenting the team's grievances with a view to passing them to Mr Singh. Mr Singh's conduct in condoning the meeting being called behind the respondent's back, knowing it had been arranged by Mr McKee principally to be an attack on the respondent arising from the meeting of 8 December 1995, knowing that the respondent in the way that he did was in a worsening psychiatric state at the time, allowing it to proceed in the way that it did, and handling its aftermath with the respondent were conduct that was unreasonable in the sense betokening the finding of negligence. Mr Singh should have told the respondent that the meeting had been called, or attended himself or arranged a mediation at that stage (Red 74, 77, 85, 86, 101, 107, 113).

Grounds of appeal 105 The amended Notice of Appeal contains 23 grounds, all but one of which were pressed at the hearing. They may be conveniently grouped as follows:

(D) Late leave to amend (ground 22) and vicarious liability for Mr McKee's actions (grounds 10 and 23)

(E) Evidentiary and related matters (grounds 13, 15 and 16)

(A) Respondent's credibility (grounds 1 and 21) 106 Ground 1 complains that the judge erred in concluding that the appellant was negligent after his Honour had concluded that the respondent's evidence could not be accepted. 107 The ground proceeds on a false premise and is quite untenable. 108 As indicated, substantial portions of the case for the plaintiff at trial were not accepted by the primary judge. These included the allegations directed at Mr Royle's conduct, particularly in the early stages. At par 3.2 of its written submissions the appellant has collected several passages in the judgment to the effect that some of the respondent's assertions were exaggerated, involved over-reaction, or were otherwise not made out to his Honour's satisfaction. But it misrepresents the judge's reasons to suggest that his Honour found the respondent to be a wholly unreliable witness or a patient whose medical histories were so much at variance with the truth as to destroy the value of expert opinions based upon them. 109 A fair reading of the judgment as a whole shows that the judge accepted the reliability of the respondent's testimony in large part, this view stemming from his assessment of the respondent as a witness and from the substantial corroboration provided by the testimony of fellow employees and those engaged by the appellant to investigate the situation in early 1996. There are specific findings generally favourable to the respondent's reliability at Red 121H and 123C. In addition, many of the key findings accepting the respondent's case proceed, in part, upon implicit acceptance of the respondent's testimony. 110 It was well open to his Honour to conclude, as he did, that the respondent had established the primary facts upon which the key findings of negligence were based. My reasons will be apparent from the earlier portions of this judgment. 111 The trial judge was not bound to accept or reject the case in total or the testimony of the respondent in total. Indeed, the carefully qualified acceptance of the critical allegations against Mr Singh tends to strengthen one's confidence that the key findings were soundly based. 112 This qualified acceptance of the respondent's reliability was carried over into the analysis of the medical opinions, contrary to the thrust of Ground 21 (see Red 128M, 133T, 134B). The allowances made by his Honour for degrees of exaggeration or jumping at shadows was part and parcel of a commonplace personal injuries claim. It was well open to the judge to accept the evidence of Drs Metcalfe, Roche and Whitaker in light of the principles discussed in Australian Securities and Investments Commission v Rich [2005] NSWCA 152. There are differences in emphasis in the various diagnoses, but nothing turns on this because there was no dispute about psychiatric illness being the reason for the respondent giving up her employment. Damages are not in issue. (B) Foreseeability issues (grounds 2, 3 and 4) 113 Grounds 2, 3 and 4 contend that the judge erred in concluding that the employer ought reasonably to have foreseen that a possible consequence of its conduct was that the respondent would suffer a recognised psychiatric illness. The precise role of the foreseeability issue was at times confused given that the legal duty of care invoked in the present case is not itself in dispute (see generally New South Wales v Seedsman [2000] NSWCA 119, 217 ALR 583, Koehler v Cerebos (Aust) Ltd [2005] HCA 15, 214 ALR 355). 114 It is a question of fact, not expert evidence, whether a defendant ought to have reasonably foreseen that his or her conduct might cause a person of normal fortitude to suffer psychiatric injury (Tame v New South Wales (2002) 211 CLR 317 at 358[115], 386[203], 437[360]). Here there was a finding in the present case that Mr Singh was actually aware of the risk. 115 The appellant cites O'Leary v Oolong Aboriginal Corp Inc [2004] NSWCA 7, Aust Torts Reports s81-747, with particular reference to the distinction drawn by the Chief Justice (at [15]) between stress and a recognised psychiatric illness. It is submitted that this distinction was overlooked by the trial judge and that the most that Mr Singh should have foreseen was that the respondent was being subjected to stress which is an inevitable concomitant of everyday life, particularly the life of a work supervisor. This submission must be rejected in light of the findings about the matters of which Mr Singh was on actual notice. 116 There were times when the respondent kept up a reasonable façade at work as she struggled to cope. It is also true that Mr Singh's capacity to detect stressors likely to result in psychiatric injury is not to be measured as if he were a medical specialist. But Singh was a manager who knew from June 1995 onwards that the respondent needed and was entitled to expect his assistance and cooperation. His evidence to the effect that he did not observe the respondent's deterioration in the latter months of 1995 was rejected. Instead, there were the positive findings summarised above. There was plenty of evidence that the respondent was not giving the appearance of coping with the situation at the critical time (see respondent's submissions at 25.2.2).

(C) Mr Singh's negligence (grounds 5-9, 11, 12 and 17) 117 As indicated, there were several findings that Mr Singh was negligently passive in his response to an unfolding crisis. 118 The appellant challenges these conclusions on several fronts. 119 First, it is submitted that Mr Singh had no reason to foresee that the respondent needed support and assistance from him. I have already indicated that this was properly rejected on the facts. 120 Secondly, the appellant points to instances where Mr Singh exercised authority to provide informal mediation. Undoubtedly this happened at several points. These include the intervention to remove Mrs Mercer for a period, arranging for a meeting between the respondent and Mr Christian leading to the latter tendering an apology that the respondent accepted, a similar type of incident involving Mr McKee, and the meeting on 8 December 1995 when Mr Singh flung the resignation papers on the table. Other evidence is documented in a written submission entitled "List of action taken by Mr Singh" that was handed up by way of submission. Some of the material there documented represents Mr Singh's perception and version of events, contrary to the rejection of his testimony on those matters. Nevertheless, there were a number of situations where he intervened, as acknowledged by the respondent and/or found by the primary judge (eg Red 49, 100, 101). This was, of course, his duty, as the officer to whom the respondent reported or (in some instances) the person whose conduct had created the situation. 121 The submission, however, fails to engage and/or challenge the many findings properly based on the evidence to the effect that Mr Singh's responses were tardy, unreasonably inadequate and sometimes entirely lacking. An example of the last phenomenon is the handling of the meeting of 13 December 1995 and its immediate aftermath. The appellant does not answer the respondent's case by pointing to areas that were Mr Singh's longsuits. 122 The appellant contends that the breach findings overlooked the constraints on the supervisor stemming from the duty to deal fairly with other members in the team (even those at fault) and the restricted choices stemming from the geographical location of the particular work place. Matters such as this cannot be overlooked in the negligence calculus, at least if they are raised for consideration. It is far from clear whether they were raised in this form at trial. But in any event the findings of negligence did not overlook the practicalities (see further as to causation, below). Mr Breen had these constraints firmly in view (cf Blue 442), while nevertheless finding himself able to reach a conclusion quite adverse to Mr Singh in a key recommendation (Blue 447). 123 I have been alert to satisfy myself that the primary judge made due allowance for the dilemmas facing Mr Singh as a manager confronted with a situation of conflict in which many of the actors regarded the respondent herself as the problem needing to be addressed. It has also been necessary to caution against the fallacy of finding responsibility based on the respondent's sense of hurt at the loss of support of her own staff and the manner in which they had gone about exercising legitimate rights to discuss problems in the office. But there was substantial evidence justifying the trial judge, who saw most of the key witnesses, in concluding that Mr Singh's responses over a considerable period of time were inadequate, not up to the standard expected for a manager in his position, and (most significantly) negligent according to the law's standards of reasonableness judged in the light of the Shirt calculus. 124 The primary judge did not err in basing his conclusions upon mere hindsight. Nor did he overlook the need to be satisfied that proven shortcomings were both unreasonable and causative of compensable loss. 125 It would be wrong to conclude that only one form of management style is reasonable, or that an easy-going approach that bends over backwards to keep all parties happy is necessarily inappropriate. But Mr Singh was a manager with specific duties to be proactive. The evidence also showed that standards of positive intervention were required in response to particular situations. Regrettably, the primary judge was satisfied that Mr Singh's conduct fell unreasonably short of what was expected of a manager in his position. 126 A conclusion of negligence in the present case does not suffer from the fallacy exposed in Koehler, where the primary judge in that case was found to have failed to give due regard to the particular contractual arrangements when finding negligence on the employer's part. That was a case where a reasonable person in the position of the employer would not have foreseen the risk of psychiatric injury to the employee. In the present case there was the evidence of actual notice of the foreseeability of mental breakdown; and there was much more than a psychiatric breakdown stemming from the inevitable parameters of the contract of employment. Merely because the respondent took on the role of leader of this particular team did not exclude the employer's general duty of care, nor did it exempt the employer (through its manager) from having any responsibility for the mental wellbeing of the employee as the pressures (expected and unexpected) of this particular job visibly began to take their toll. Tortious liability for psychiatric injury stemming from "workplace stress" will doubtless raise many difficult legal and factual issues, including issues of justiciability (cf State of New South Wales v Heins [2005] NSWCA 258 at [24]). One thing is however clear, namely that entry into a contract of employment does not in itself absolve the employer from the tortious duty to exercise reasonable care to prevent such injury. 127 One variant of the submissions on breach is the appellant's criticism of the frequent references in the judgment below to "undercurrents" or "underlying currents". Ground 17 contends that the judge erred in relying upon an "undercurrent" that was not established on the evidence as a basis for finding negligence. This misreads the thrust of the reasoning. Some of the passages complained of deal with the portion of the respondent's case that was rejected, ie that involving alleged undermining by Mr Royle. In other places (eg Red 68, 96, 134), the point being made was that workplace conduct of the nature involved was subtle or difficult to recall in detail. This did not mean that it was a figment of imagination. Nor do the passing references to "undercurrents" show that the judge reasoned from surmise as distinct from evidence. There was more than enough specific evidence from many sources to show that it was dangerous and ultimately negligent for Mr Singh not to have properly addressed the problem. 128 Grounds 8 and 9 place reliance upon the mechanisms available to the respondent to deal with the problems confronting her at the workplace. Doubtless she had access to formal grievance procedures (belatedly resorted to); she attended a stress management course; and she spoke to Mr Reith and Mr Hallinan about her perceived problems with Mr Royle and Mr Singh. These matters might have relevance if some defence of contributory negligence were pressed. But they are no answer to the case that was made out with reference to Mr Singh's role. 129 The appellant submitted that there was in effect procedural unfairness in the judge adverting to Mr Singh's failure to invoke formal procedures for dispute resolution, such as mediation. In my view, this was within the scope of the case litigated (cf Black 1516-8). The primary fact that such mechanisms were available, yet not invoked until it was too late, was never an issue. Nor was it contended that Mr Singh could not have drawn on such resources if, as the respondent's manager, he felt unable to deal with the problem as it presented itself. 130 The key findings of breach made with reference to the conduct and inaction of Mr Singh have not been disturbed on appeal.

(D) Late leave to amend (ground 22) and vicarious liability for Mr McKee's actions (grounds 10 and 23) 131 These grounds contend that it was not open for the judge to find the appellant vicariously responsible for Mr McKee's actions in calling the meeting of 13 December 1995. Ground 22 takes a procedural objection that challenges the leave to amend the pleading, very late in the trial, to add this particular of negligence. Grounds 10 and 23 contend as a matter of substance both that Mr McKee did no wrong to the respondent and that the appellant could not be vicariously liable for his actions in any event. 132 It is unnecessary to dwell on these grounds. No part of the expanded case went anywhere beyond certain findings concerning Mr McKee. 133 Some of them were completely bald statements (at J126) that: I find that Mr McKee arranged that meeting [of 13 December] deliberately to undermine the plaintiff.

and: I find the defendant was vicariously liable for the approved conduct of Mr McKee in calling the meeting. 134 Such exiguous statements would be a cause for concern if they indicated that the judgment rested upon a conclusion that the appellant was vicariously liable for the conduct of Mr McKee. But that is not the burden of the second finding, the critical part of which is the word "approved". The passage as a whole (which it is unnecessary to set out) bases its conclusion upon vicarious liability for the conduct of Mr Singh. It was Mr Singh who approved the calling of the meeting, knowing of Mr McKee's motivation, and failed to deal appropriately with it and its immediate aftermath, so far as concerned the welfare of the respondent. (See also Red 129-30.) 135 There are, however, findings based upon vicarious liability for Mr McKee at Red 130: I accept that the defendant is vicariously liable for harm caused by Mr Singh and Mr McKee, but I do not accept that the conduct of the other co-workers, which is particularised within the correspondence, amounts to the breach of the employer's duty causative of the plaintiff's psychiatric injury. In relation to the attack upon Mr McKee by Mr Toomey of Queens' Counsel for the plaintiff, there is a strong basis for such an attack, however, I am not of the view that Mr McKee's conduct between June and before the meeting of 13 December was causative of anything but aggravation of the plaintiff's then condition. I also do not accept that Mr McKee's conduct up until the arranging of the meeting of 13 December, would amount to a breach of duty for which the employer would be vicariously liable or would be a breach of the employer's duty to the plaintiff. 136 This reasoning cannot be sustained. Mr McKee may have been the respondent's neighbour in the New Testament sense, but it is hard to see that he had any legal responsibility for her mental welfare. It would in any event be wrong to conclude that there was anything wrong in itself about "the team" meeting to consider grievances. 137 Since, however, the judgment rests firmly and independently on vicarious liability with respect to Mr Singh's negligence, including his negligence referable to the December meeting, success on this ground takes the appellant nowhere.

(E) Evidentiary and related matters (grounds 13, 15 and 16) 138 Ground 13 contends that the trial judge erred in accepting into evidence and/or relying upon the Breen Report of 1 February 1996. 139 The Breen Report was commissioned by Mr Reith in January 1996 and provided on 1 February 1996. Mr Breen was a former Regional Director of the Department and was then in private practice as a management consultant. He had been commissioned to investigate, evaluate and report on a wide spectrum of issues relating to the management of the Wagga Wagga Area Office (Blue 429). His report deals with the Department's duties to its employees, summarises information gathered from interviews with key players and expresses both opinions about what ought to have been done and recommendations for the future. 140 The relevance of the Report and its function as a business record are not in dispute. However, objection was taken in reliance upon s69(3)(a) of the Evidence Act which precludes the admission of representations in a business record if the representations were "prepared or obtained for the purpose of the conducting, or for or in contemplation of, or in connection with, an Australian or overseas proceeding". 141 In his reasons explaining the decision to admit the document, the trial judge acknowledged that the Report addressed a complaint made by the respondent relating to her treatment by co-workers. It was held that s69(3)(a) was not engaged because the Report was brought into existence for the purpose of the Department conducting its affairs in proper order, and ensuring that complaints or matters that the Department thought should be investigated and dealt with were in fact investigated and dealt with (Black 51). 142 A submission that the Report should be excluded pursuant to s135 of the Evidence Act was rejected. Its contents might well be prejudicial to the interests of the Department, but not unfairly so, particularly since Mr Breen was a person retained by the Department because of his experience. 143 The nub of the objection, repeated on appeal, was that it was unfair to the appellant to deprive it of the opportunity to cross-examine an important witness by introducing his evidence in this manner. This, however, is an objection to the weight, not the admissibility, of the Report and it does not point to error in the exercise of the discretion under s135. 144 It is true that some of the primary information relied upon by Mr Breen was not established independently at trial and/or was disputed by Mr Singh. Once again, this offered no ground for a blanket objection. Most of the information relied upon was established independently. In any event, it was first-hand hearsay admissible through the medium of the business record. Mr Breen's evaluation of the situation stemmed from his own experience and the expertise that was, to a degree, acknowledged when he was first commissioned to investigate. The trial judge was entitled to conclude that it was highly likely that the hearing time would be reduced by admitting the document, leaving it to the defendant to call any of the witnesses referred to in the Report. I would add that it was on the cards that many of those witnesses would be called in any event. 145 The appellant did not dispute the proposition that a statement of opinion in a document may be an asserted fact for the purposes of s69 (Ringrow Pty Ltd v BP Australia Ltd (2003) 130 FCR 569, ASIC v Rich [2005] NSWSC 417 at [205]ff). 146 In this Court the appellant pressed the s69(3)(a) objection on the basis that the respondent's intention to institute workers compensation proceedings was known prior to the Report being requested in January 1996. The appellant points to no evidence supporting this, beyond the lodgement of a compensation claim by the respondent on 8 January 1996 (Blue 548). Nothing links this fact to Mr Breen's activities or his motivation for carrying out his brief. The submission fails to meet the point, because s69(3)(a) requires the representations themselves to have been prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, a proceeding. 147 This ground of appeal also complains about the use made by the trial judge of the information and opinions contained in the Report. Such complaint goes beyond admissibility and is in any event without substance. Mr Breen was well placed to investigate the matter and he did so while the trail was warm. Mr Reith said that he appointed Breen because he was "a former Regional Director and a high-ranking and highly qualified public servant" (Black 1473). 148 Mr Breen set out in some detail the primary facts as he ascertained them and the sources from which he gathered that information. Much of the primary data was corroborated by the testimony of other witnesses. 149 The appellant makes particular complaint about a passage in the judgment in which his Honour said: When Mr Breen either actually or implicitly makes findings of which there is no evidence before me, I accept that as being his opinion and I accept that he had facts before him to logically support such findings. I find that all matters and inquiries of and by Mr Breen that support his findings were matters that were open to be found by the defendant, via Mr Singh and Mr Reith and other officers, and for them to attend to at a much earlier point in time than Mr Breen's inquiry.

The field covered by the first sentence is not clearly identified and there is ambiguity as to the extent to which the trial judge intended those remarks to serve as a qualification on his acceptance of the information and conclusions in the Breen Report. However, since the Report was properly admitted into evidence, it was available to the trial judge as a source of relevant information, including information as to Mr Breen's expert and informed opinion. His Honour undoubtedly drew support from it, but it did not stand alone. 150 Unlike the situation discussed in Whisprun Pty Ltd v Dixon [2003] HCA 48, 200 ALR 447, the Breen report as a whole was tendered as a business record. The plaintiff at trial clearly flagged her intention to rely upon it both as a record of matters investigated and as containing the opinion of Mr Breen on a matter of relevance that lay within his sphere of expertise. In admitting the document as a business record, the judge observed that this in itself did not foreclose the examination or cross-examination of Mr Breen (Black 47). 151 Ground 15 contends that the judge erred "to the extent he relied upon the documentary evidence of Ms Stinton". This ground was barely pressed, but not withdrawn as (in my opinion) it should have been. It is the role of counsel to assist the Court consistent with the duty to the client. In a factual case of labyrinthine complexity, the Court is entitled to expect the separation of wheat from chaff. This ground was always doomed to fail. 152 The written submission speaks of Ms Stinton's report as being "arguably admissible". This comment is entirely misplaced when it is recognised that the report was tendered by the appellant on the basis of an express agreement not to use its admission as a ground of appeal (Black 1045). 153 Ms Stinton was not called as a witness. The nub of the complaint is that the trial judge referred to her statement at various places in the judgment. But when one turns to the particular passages, it emerges that little weight was given to Ms Stinton's observations, either because they were irrelevant (cf Red 86) or because they went to what became a non-issue (ie the dysfunctionality of the team: see CA Tr p148). One of Ms Stinton's statements was given to Mr Breen whose report indicated that he treated it as credible, particularly since it was corroborated by other members of the team whom he interviewed (see Red 58-9, 63-4). Ms Stinton's remarks were directed at the behaviour of the disruptive members of the respondent's team, including Mr McKee and Mrs Mercer. There was a huge volume of evidence to similar effect. The primary judge did not err in regarding Ms Stinton's near-contemporaneous statement as material upon which some reliance could be placed.

(F) Causation (grounds 18 - 21) 154 There is no dispute that the respondent suffered a recognisable psychiatric illness, that this brought her employment to an end, and that the damages were properly quantified (assuming liability is established). There is, however, a continuing dispute as to causation in the sense that the appellant denies that the tortious conduct found against the State caused or materially contributed to the respondent's illness. 155 Ground 18 complains that the judge erred in failing to deal adequately with the causation issues. It is also contended that none of the matters identified as negligent omissions would have avoided the respondent's psychiatric injury (Ground 19). In particular, the judge is said to have erred in finding that the matters put in train in January 1996 would have prevented the injury if they had occurred in June or September 1995 (Ground 20). 156 The dispute resolution procedures that were put into place in January 1996 proved to be ineffective, so far as restoring the situation or rescuing the respondent's health. I include the uncompleted grievance mechanisms invoked by the respondent against Mr McKee and Mr Singh. 157 It has never been suggested that some chain of causation was broken in January 1996. Regrettably, and for several reasons, the situation could not be recovered. The events of January do however have a triple significance. In the first place they provided an opportunity for significant evidence to be gathered and recorded, while the trail was fresh. Secondly, the things that were done at this time are examples of appropriate and effective responses that might have prevented the damage had they been set in train at the instigation of the respondent's superiors before it was too late. Thirdly, the statement of Mr Hallinan and the report of Mr Breen contain analyses of the information garnered that were regarded by the trial judge as persuasive corroboration for the views he was forming. 158 Since going off work the respondent was paid workers compensation and medical expenses by the appellant's workers compensation insurer. The trial judge regarded this as an admission of partial incapacity. His Honour found that the respondent suffered "significant psychological and psychiatric injury by December [1995]" (Red 69). On 22 August 1996 she was retired by "Health Quest" on medical grounds. The Retirement Certificate noted that she was suffering from an Anxiety Depressive Disorder. 159 There was some difference of opinion between the medical experts as to the label or precise nature of the psychiatric illness involved. In my view this is of no moment in light of the issues remaining for decision. 160 The causation question was necessarily hypothetical and factually complex. It required evaluation of the probable impact of things that were not done, an evaluation that notionally had to exclude the stressors that could not be laid at the door of the appellant as tortfeasor. 161 The trial judge addressed causation at some length (Red 125-130). He found that the respondent was a person "of reasonable fortitude prior to commencement of the employment". The breaking down of the respondent's mental well-being and health between May and December 1995 was next adverted to. This was in the context of the earlier findings as to the things that Mr Singh had done unreasonably and (more significantly) the things that he had unreasonably failed to do. The fact that these were matters that ought not to have been allowed to occur was stated expressly (Red 126-8). 162 His Honour cautioned himself against viewing the matter through the overly-sensitive eyes of the respondent herself, as recorded in the histories she gave to some of the doctors (Red 128). Some matters in the respondent's perception were put aside, either because they involved exaggeration or could not be shown to stem from events for which the appellant bore tortious responsibility (see Red 129). 163 With these adjustments, the judgment moved towards its resolution in favour of the respondent, resting that squarely upon the findings of negligence against Mr Singh that were restated emphatically at Red 131-3. 164 In my opinion causation was clearly established. I agree with the reasoning of the primary judge. 165 In the earlier appeal Sperling J (with whom Heydon JA and Ipp JA agreed) said (at [70]): Was there then evidence on which it could be found that the defendant unreasonably failed to implement a reasonably practicable means of avoiding foreseeable risk? Evidence that there was such a reasonably practicable means is to be found in the Breen report. The fact that an expert recommended what he did is evidence that the recommendations were likely to be effective. The reasonable practicability of implementing the recommended action at an earlier time is self-evident.

I agree. 166 The appellant wishes to focus on the meeting of 13 December 1995 as the critical event. In one sense it was. Standing alone it did not involve tortious conduct on the part of the employer or anyone for whose conduct the employer was relevantly vicariously liable. Everyone who attended the meeting was below the respondent in the hierarchy and none of them had any relevant duty of care with respect to the respondent's mental well-being. 167 But the meeting did not stand alone. The critical findings were made with respect to the conduct of Mr Singh who had not been at the meeting. It was what he had done and failed to do in the period of May 1995 to a couple of days after the meeting that were found to be the causally significant events. 168 Like the trial judge, I have been at pains to segregate the causative impact of the negligent conduct (as found) from the other circumstances that were part of the respondent's condition and may even have contributed to her breakdown. What remains is a clear conviction that Mr Singh's negligence materially contributed to the mental breakdown and the damage that ensued. This is sufficient to ground tortious liability. 169 The damning conclusions of the Morey report and Mr Hallinan's evaluation above were also generally corroborative of the respondent's case on both breach and causation. 170 The appeal should be dismissed with costs. 171 GILES JA: I agree with Mason P. 172 TOBIAS JA: I agree with Mason P. **********

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At a glance

Court

Decision date

Before

Source

Judgment (54 paragraphs)

Parties

Cases Cited (13)