Breach
183 The Appellant submitted that even if there was a relevant duty of care - to avoid the risk of psychiatric injury from the conduct of a disciplinary process, or to provide a safe system of discipline - there was no breach of this duty.
184 As indicated above, his Honour identified five separate matters that constituted a breach of the duty in the present case. His Honour did not differentiate between any of those matters when he came to discuss the issue of causation and damage. His Honour treated the breaches as having a cumulative effect. It will be necessary to consider each of the matters. Difficulties would arise if the Court were to uphold the appeal with respect to some of the matters but not with respect to others.
185 His Honour recognised that there may be contractual, common law or statutory obligations (and no doubt rights) that could be legitimately carried out in such a manner as to have similar adverse effects on an employee. Certain kinds of conduct would not constitute breach of the relevant duty by reason of compliance with an applicable standard of care. His Honour identified the standard of care in the most general terms. First, as "a proper or reasonable system". Secondly, as a system "carried out … in accordance with the rights of the employer to regulate its activities in accordance with contract, common law or statute".
186 The Appellant made submissions with respect to each of the five matters identified by his Honour as constituting a breach of the duty.
187 The first was the reference in the Director-General's memorandum of 18 February 1997 that "there will be full protection against legal action". The Appellant submitted that this could only constitute a breach if it was a negligent misstatement, in reliance upon which the Respondent suffered damage. It submitted that a fair reading of the statement must lead to the conclusion that it referred only to protection against legal action brought by the person who was the subject of any complaint. In any event, even if it could be read more broadly to encompass something in the nature of an amnesty for a person coming forward with information in response to the memorandum, it does not follow that it was a negligent misstatement simply on the basis that it was not adhered to.
188 The second matter to which his Honour referred as a breach was the assurance given to the Respondent that he was not the subject of an investigation. The Appellant submitted that this statement was completely true at the time it was made. It was only in the course of the investigation that information became known that called into question his own conduct.
189 The third matter identified by his Honour was the failure to accept a recommendation to the effect that some form of further investigation be conducted prior to laying a charge. The Appellant submitted that it is not negligent to make a decision of this character. It is entirely within the appropriate discretion of the decision-maker.
190 The fourth matter identified by his Honour was the finding that the Respondent had been denied procedural fairness. It will be necessary to consider the submissions in this regard in detail below. The Appellant submitted that there was no denial of procedural fairness, specifically that there was no obligation to choose the "inquiry route" rather than the "explanation route".
191 The fifth matter identified by the trial judge concerned the circumstances in which a decision was made to act upon the withdrawn resignation. The position as to whether or not such conduct was permissible at all is the subject of a separate ground of appeal. The Appellant submitted that, even if it be the case that the Appellant could not act in this way, there was some basis for believing that acceptance of a resignation was not required, and even if, as a matter of law, that proved to be erroneous, it could not constitute negligence.
192 The classic statement of the assessment of breach is that of Mason J in Wyong Shire Council v Shirt (1979) 146 CLR 40 at 47-48 where his Honour said:
"In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal o fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position.
The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors."
193 These considerations have often been assessed in frequently recurring classes of cases and do not require express consideration in such cases. However, the need to balance these various considerations must be carefully borne in mind in a case, such as the present, where the Court is asked to determine a standard of care in a novel area.
194 In the context of statutory authority the "reasonable person" has been referred to as a "reasonable authority". (See e.g. Crimmins, supra, at [34] per Gaudron J and [90] per McHugh J.) For the present case I find it convenient to refer to a "reasonable investigator".
195 As is frequently the case, many of the factors that are pertinent to determining whether or not a duty of care should be imposed at all, also arise at the level of breach in terms of determining a standard of conduct. The matters I have considered in terms of incompatibility are also pertinent to the issue of breach.
196 Graham DCJ was well aware of the principles outlined by Mason J. However, in his judgment his Honour focused on the issue of incompatibility, to which Mason J referred, in terms of "other conflicting responsibilities". His Honour did not expressly consider issues of "the magnitude of the risk and the degree of the probability of its occurrence", nor issues of "expense, difficulty and inconvenience". These are matters that require consideration.
197 The determination of an appropriate standard of conduct with respect to avoiding a risk of psychiatric injury gives rise to the full range of considerations that have led the courts to proceed cautiously with respect to such injury. (See Morgan v Tame supra at [3].) These are matters that are likely to be reviewed in the cases presently reserved in the High Court. For present purposes it is sufficient to note that a standard of care in this field has to be determined in a context where linkages between conduct and injury are less transparent, inherently more contestable and more difficult to assess by forensic processes, than is the case with most forms of physical injury. The factors of "magnitude of risk" and "degree of probability" of the risk materialising, and "expense, difficulty and inconvenience", become particularly difficult to assess.
198 A standard of care must be determined in advance of an incident occurring. One of the great weaknesses of the tort of negligence, in its practical operation, is the propensity to determine a standard of care with the full advantage of hindsight in a particular case. Where the courts have determined a standard on the basis of experience obtained from hearing numerous cases of a particular character over a long period of time, this hindsight bias will tend to work itself out over time. In a case, such as the present, where a novel category of duty is under consideration, particular care must be taken to eliminate hindsight bias.
199 The courts do have experience about the effects of stress on persons, albeit not as extensive as the experience about cases of physical injury. It can readily be accepted that the process of laying disciplinary charges, the conduct of a hearing into those charges, and a finding that the charges are made out, will impose stress on the person whose conduct is being investigated. It can also be accepted that stress of that character may, depending on a wide variety of factors, not all of which are within the control of, or reasonably foreseeable by, a defendant, result in mental trauma.
200 The experience of the courts is not yet such as to enable a court to assess the degree of risk involved with any confidence. Nor is it such as to lead to a clear judgment as to the expense and difficulty of implementing measures that have reasonable prospects of protecting against the risk coming home. The position would of course be different if there was any evidence of known special vulnerability on the part of the person, the subject of the investigation. That is not the case here.
201 There is no particular evidence on these issues in the present proceedings. The body of experience on which the courts can draw is limited. In my opinion, the most that it is open for the Court to decide in the present case - on the assumption that there is a duty of care - is that there is a risk of the requisite character but that there is no sound basis for assessing the probability of the risk. The risk is foreseeable in the sense that it is not "far-fetched or fanciful", however, there is no proper basis on which the court can find, in favour of the Respondent, that this element in the balancing exercise is entitled to significant weight.
202 The second matter is the issue of "expense, difficulty and inconvenience". Again there is a tendency, when assessing matters of this character in hindsight, to focus only on the specific events that have happened and to identify a minor adjustment which would have avoided the injury in the specific case before the court. This form of hindsight bias must be avoided. The determination of a standard of care for purposes of assessing what a reasonable investigator would have done in the circumstances, must be made in advance of the specific incident under consideration, rather than in light of the particular facts of the case. The standard of care must be formulated ex-ante not ex-post.
203 A decision-maker will need to take precautions against a much wider range of risks than those which happen to have come home. (See, for example, the analysis of Bryson J in Waverley Council v Lodge [2001] NSWCA 439 at [29]-[37].) It is necessary for a court to assess "expense, difficulty and inconvenience" for all risks of a similar kind arising in similar circumstances. It is not appropriate to concentrate on the specific risk that came home in the particular circumstances of the case. The foresight required of a reasonable person cannot be confined by the pellucidity of hindsight.
204 The standard of care which his Honour applied would have the result that in all cases of disciplinary proceedings against teachers, not just in the particular case before the Court, the Appellant should, as a general rule, conduct much more detailed investigations prior to the laying of the charges and, also, as a general rule, conduct much more elaborate processes of inquiry, than that which occurred in the present case. This would cause additional expense and delay of a magnitude that the Court cannot judge on the materials before it. In this respect the evidentiary onus was on the Appellant. Nevertheless, it is a material consideration to place in the balance when determining the standard of care. In this regard the incompatibility of duties, that I have discussed above in relation to duty is also pertinent to breach.
205 I will treat each of the five matters found by his Honour to have constituted a breach of the standard of care separately. However, it is also necessary to assess their effect cumulatively, as his Honour did.
206 The first matter concerned the statement about "full protection against legal action". His Honour found that the Respondent misunderstood this statement to constitute some kind of amnesty applicable to persons who responded to the Director-General's memorandum. Whether that be a reasonable interpretation or not, I do not agree that the fact that the statement was open to such an interpretation constitutes a breach of the standard of care. The finding of breach appears to be based on the proposition that a reasonable investigator would not make statements capable of misinterpretation. In my opinion that is altogether too high a standard. In any event if there was a representation of this character at all, there was no suggestion of any kind that it was incapable of being withdrawn.
207 The second matter to which his Honour referred - the express statement that the Respondent was not the subject of an investigation - is of the same character as the first. Again, there was no suggestion that this statement could not be withdrawn. It was. The Respondent was given full notice of the subsequent process by charge and an opportunity to make submissions.
208 In the case of the second statement, it is relevant that it accurately reflected the state of mind of the person making it, as at the time it was made. A reasonable investigator would not, indeed could not, have acted differently.
209 The thrust of the Respondent's position with respect to the first two matters is that he was lulled into a sense of security which, in the event, proved to be false. No doubt this can lead to disappointment. There is no reason to believe that such disappointment carries with it any material risk of psychiatric injury. In this respect the "far-fetched and fanciful" test is, in my opinion, satisfied. The injury was not reasonably foreseeable. Furthermore, bearing in mind the conflict of responsibilities for those responsible for maintaining discipline - as elaborated in my discussion of conflicting duties under the heading of "Duty" above - a standard of care should not be determined which does not allow for the possibility that a reasonable investigator may change his or her mind during the course of an investigation.
210 In my opinion, the first two findings of breach were erroneous, whether considered in their own right or as an element entitled to weight in a cumulative finding.
211 The third matter concerned the decision to reject a recommendation that some form of further investigation be conducted before charging. There seems little doubt that the act of laying the charge itself had a significant effect in the present case. In my opinion, it would be reasonably foreseeable - on the "far-fetched and fanciful" approach - that this step could lead to mental trauma on the part of the person against whom the charges remain. However, reasonable foreseeability is not enough, whether at the level of duty or at the level of breach.
212 For the reasons indicated above, it is particularly difficult in the circumstances of this case to make an assessment of the magnitude of the risk of mental trauma arising from the act of charging. There is no reason to give this factor significant weight. Nor can it be set aside.
213 The element of expense and difficulty - understood as that required in the full range of analogous disciplinary proceedings, rather than for the specific case - is of comparatively little weight. The reason for this is that the matters subject to the investigation prior to charge would be required to be compiled in any event for the purposes of an investigation after charge. There does not seem to be any significant prospect of waste or duplication. Accordingly, the decision to conduct an investigation prior to charge would not lead to any significant additional expense.
214 In my opinion the determinative factor here is that of "conflicting responsibilities", to use the terminology of Mason J in Shirt's case. This involves the aspects of incompatibility I have already discussed. A number of additional matters should be noted.
215 Regulation 14 empowers the laying of the charge "[i]f it appears to a disciplinary authority that a member of staff may have committed a breach of discipline". The present is a case where it was reasonably open for a disciplinary authority to form the requisite opinion, without further investigation at that time. Although the power to lay charges is expressed in discretionary terms, the decision-maker has a responsibility for the proper administration of the education system to proceed when he or she thinks it is appropriate to do so.
216 In the present case, there were certain aspects of the conduct on the part of the Respondent that were matters that could reasonably be of concern. I refer in particular to the fact that the Respondent identified some complainants by name to the teacher about whom complaint had been made. This act was, understandably, in breach of the protocols for handling matters of this character that existed in the Department. In these circumstances, it was not, in my opinion, appropriate to conclude that the breach of the duty of care outweighed the conflicting responsibilities to the education system.
217 In my opinion, the conduct constituted by the rejection of further investigation before charge was not a breach of the standard, separately, or of significant weight in the cumulative assessment.
218 The fourth breach identified by his Honour was the denial of procedural fairness.
219 The obligation to accord procedural fairness is not capable of statement in a form that identifies a standard of care for purposes of assessing conduct and determining whether or not the standard is breached. Procedural fairness is a principle rather than a standard or rule.
220 It has been said on many occasions that the doctrine of natural justice or procedural fairness, however it is expressed, does not constitute a fixed body of rules. The particular requirements of procedural fairness depend on all of the circumstances of the case, including the nature of the inquiry and the subject matter being dealt with, the statutory framework and the expectations as to conduct that have arisen in the particular context or the particular case. (See e.g. Russell v Duke or Norfolk (1949) 1 All ER 109 esp at 118; R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553; Kioa v West (1985) 159 CLR 550 at 584-585, 594, 612-616.)
221 As I have said above, it is not appropriate to state the standard in public law terms of procedural fairness. The issue is what would a reasonable investigator, mindful of the risk of mental trauma, have done by way of conducting the inquiry.
222 I have outlined his Honour's relevant findings in pars [28] to [37] above. The thrust of those findings is not that the failure to give a more elaborate hearing, of itself, had any impact on the Respondent. It is that a more elaborate hearing, and an opportunity to comment on certain matters, may have led to a different outcome. His Honour's conclusion was based, in large measure, on his own observation of the Respondent as a witness. This Court is slow to interfere with findings of that kind.
223 I have a great deal of difficulty identifying an appropriate standard of care for an investigation of this kind. It is by no means clear to me that a reasonable investigator would have done or not done all the various things that his Honour identified as constituting a denial of procedural fairness. Nothing would suggest that the "inquiry route" rather than the "explanation route" must be chosen. As emphasised in Hill v Green, supra, there were many options for a more elaborate hearing, short of a full "inquiry" under Regulation 15(2)(b).
224 It is of particular significance to note that the range of disputation was very limited. The basic facts were common ground. The factors that his Honour believed justified an oral hearing concerned the "motivation and intention" or the "attitude and intentions" of the Respondent (see pars [28] and [33] above), that the Respondent was not given an opportunity to fully understand the case against him [35] and, accordingly, that the investigator was not adequately informed of all the relevant facts. (See pars [29]-[34] and [37] above.)
225 In assessing the significance of a more elaborate hearing, from the point of view of the conduct of what a reasonable investigator would have done, it is material to consider the whole of the circumstances in which the investigator found himself. The particulars of the charge referred to ten separate particulars concerning allegations of improper conduct of a sexual nature against four female students. In a number of respects the complaint was a failure to report the allegations. In other respects the complaint was the fact that the allegedly offending teacher had been told about the allegations and, in some cases, had been told the name of the student making the allegation. Most of the particulars stated expressly: "This was a failure to follow Departmental policy".
226 The Respondent was supplied with a Departmental document setting out the case against him with respect to each particular in the charge. It attached the various departmental documents establishing procedures for handling allegations of child sexual assault.
227 After having been notified that the prescribed officer proposed to proceed by the explanation route rather than the inquiry route, the solicitors for the Respondent made a submission suggesting that a full inquiry was required. The submission was to the effect that there would be a denial of procedural fairness if that option was not pursued. It was rejected. No steps were taken to challenge that decision.
228 The Respondent by his solicitors made a detailed submission with respect to each charge. The submissions made express reference to the various published policies of the Department and addressed each of the particulars of charge, explaining the Respondent's conduct and noting, for example, that copies of relevant policies were not, in some cases, available at his school. Many of the submissions, it appears, were accepted because certain particulars were not upheld. However, some particulars were found proven. Submissions were invited on penalty.
229 In the submissions on penalty, the Respondent's solicitors identified the adverse finding in terms of a failure to carry out the Departmental procedures and submitted that that was a very different thing from negligence. They noted that particular weight was given to the effects of the disclosure to the teacher concerned of the name of the complainants. The submission was made that this would not have endangered the particular girls.
230 It is clear that significant questions of judgment were involved in determining whether or not a more elaborate hearing process was required. The prescribed officer could see that the range of factual disputation was in a very narrow compass, that the Respondent was legally represented and that detailed submissions on fact and law had been made at each relevant stage of the inquiry process.
231 As indicated above, in my opinion his Honour erred in expressing his conclusions in public law concepts. Even if it be the case that there was a denial of natural justice for administrative law purposes, a matter which need not be determined, the focus in this case must be whether or not a more elaborate oral hearing process should have been chosen by a reasonable investigator mindful of the risk of mental trauma from an adverse finding. That is quite a different standard. It is not one applied by his Honour. Nor is it a matter upon which this Court was addressed in any detail. The submissions in this Court proceeded on the assumption that the public law test applied by his Honour was an appropriate one for determining breach of a duty of care.
232 In the absence of proper submissions in this regard I do not find it appropriate to determine this question. It is not necessary to do so in view of the conclusion I have come to above with respect to duty. Even if I were wrong in that regard it would not be necessary to do so by reason of my conclusions on the issue of causation below. If this were the only particular of breach that were made out, his Honour's finding of negligence would, in any event, need to be set aside.
233 The fifth matter was the acceptance of the withdrawn resignation. I will deal with the legal issues more fully below in relation to the contract case. Again, I find it difficult to articulate a relevant standard of care. What was involved was a legal error as to whether the resignation remained open for acceptance. As the Privy Council said in Rowling v Takaro Properties, supra at 502 quoted above, such an error is most unlikely to be a breach of a duty of care. The case put by the Appellant to this Court, that I reject below, was reasonably arguable. I do not believe such an error can be a breach of duty.
234 On the one hand, there was a basis for believing that the common law rule that a resignation could not be withdrawn was applicable. On the other hand, the Appellant did not seek to contradict the Respondent's case that the common law had been modified in practice with respect to the Teaching Service.
235 This aspect of breach should be determined by giving significant weight to foreseeability of risk and the low probability of the risk materialising. Putting aside questions of causation, the idea that to accept a withdrawn resignation, rather than to direct a resignation, would result in psychiatric damage strikes me as far-fetched and fanciful or of such low probability, that a reasonable decision-maker would not take the risk into consideration.
236 This fifth matter, whether alone or in combination with other matters, did not constitute a breach of the duty I have assumed to exist.
237 The end result is that his Honour's findings of breach should be rejected, save in one respect which it is not appropriate to decide.