Zhang v Wealth for Life Institute [2025] VCC 1794

(a) join further parties to the proceeding, namely Peluso and Paul;

(b) plead the tort of assault against Peluso and Paul; and

(c) plead breach of contract by the first defendant.

1. The trial was adjourned by her Honour Judge Myers.
2. In due course, the plaintiff served a copy of a proposed amended writ and statement of claim on the first defendant, which did not consent to the proposed amendments. The parties ultimately awaited the decision of the High Court in Elisha v Vision Australia Limited[1] given that the outcome of the case had implications for this proceeding. After the High Court handed down its judgement in Elisha, the plaintiff sought to proceed with the proposed amendments to the statement of claim.
3. The plaintiff issued a summons on 1 August 2025, and in support of the application to amend the statement of claim, the plaintiff relied on an affidavit of Sachini Carvalho sworn on 8 May 2025 and two affidavits sworn on 1 August 2025. The first defendant relied on an affidavit of Geraldine Carney affirmed 2 June 2025.
4. As previously mentioned, on 4 August 2025, Judicial Registrar Lynch granted leave for the plaintiff to file an amended statement of claim joining Peluso as the second defendant and Paul as the third defendant to the proceeding.
5. On 8 August 2025, the plaintiff served an amended writ and statement of claim on the defendant.
6. The first defendant seeks a review of the orders made by Judicial Registrar Lynch on 4 August 2025 and objected to a number of the proposed pleadings. It seeks the following orders:

(a) The plaintiff file and serve a second further amended writ removing the second and third defendants as parties to the proceeding;

(b) The plaintiff serve a proposed further amended statement of claim on the first defendant; and

(c) The proceeding be listed for further directions.

1. The review came before me on 28 August 2025. In accordance with r84.03(3) of the Rules, it proceeded as a de novo hearing.
2. Pursuant to r84.03(6)(b) of the Rules, in conducting the review I may:

(a) confirm, set aside, or vary the order of the Court constituted by the Judicial Registrar; or

(b) make such further or other order as may be necessary or as the case requires.

1. I consider the order of the Court constituted by the Judicial Registrar was correct in relation to the joinder of Peluso and Paul and I confirm the orders. I uphold the first defendant's objections to the proposed Statement of Claim, and therefore the relevant paragraphs will need to be repleaded. I also strike out the claim for exemplary damages. I set out my reasons below.

1. The plaintiff sought to make the following relevant amendments to the Statement of Claim:

"1A. The second defendant ("Peluso") is a natural person capable of being sued pursuant to the laws of the State of Victoria and was at all relevant times employed by the First Defendant as chief executive officer pursuant to one or many contract/s of employment ("the Peluso employment agreement") which encapsulate the terms of his employment with the First Defendant as they were from time to time. > > PARTICULARS OF THE PELUSO EMPLOYMENT AGREEMENT > > The Peluso employment agreement is partly in writing and partly implied. In so far as the terms of the agreement were to be implied at any given time, they were to be implied by the conduct of the parties to the agreement, by the operation of law and in particular so to give business efficacy to the agreement." > > 1B. The third defendant ("Paul") is a natural person capable of being sued pursuant to the laws of the State of Victoria and was at all relevant times employed by the First Defendant as a manager pursuant to one or many contract/s of employment ("the Paul employment agreement") which encapsulate the terms of his employment with the First Defendant as they were from time to time. > > PARTICULARS OF THE PAUL EMPLOYMENT AGREEMENT > > The Paul employment agreement is partly in writing and partly implied. In so far as the terms of the agreement were to be implied at any given time, they were to be implied by the conduct of the parties to the agreement, by the operation of law and in particular so to give business efficacy to the agreement."

2A. The Plaintiff was at all material times employed by the First Defendant pursuant to a contract of employment ("the employment agreement").

PARTICULARS OF THE EMPLOYMENT AGREEMENT

(i) The Employment Agreement was made in the State of Victoria and the terms of the same were partly in writing and partly to be implied.

(ii) In so far as the terms of the employment agreement were in writing, they were:

1. Between 11 August 2014 and 21 August 2016, the contract of employment dated 15 August 2014 ("the first contract"); and
2. On and from 22 August 2016, the contract of employment dated 16 August 2016 ("the second contract").

(iii) In so far as the terms of the agreement were to be implied at any given time, they were implied by the conduct of the parties to the agreement, by the operation of law and in particular so to give business efficacy to the agreement."

2B. Further and in the alternative, there were express and/or implied terms of the first employment agreement and the second employment agreement which at all relevant times were to the effect that the First Defendant would:

(a) provide a safe system of work, a safe place of work and appropriate supervision relevant to the Plaintiff's work and of employees of the First Defendant.

(b) Pursuant to clauses 12.4(j) of the first contract and the second contract and/or otherwise, that the parties would comply with the policies, procedures and guidelines of the First Defendant including but not limited to:

1. The Prospects of Indian Descent Policy (October 2015);

2. The Employee Communication Policy (March 2017);

3. The Occupational Health and Safety Policy (March 2017);

4. The Occupational Rehabilitation Policy (March 2017);

5. The Procedure for the Resolution of Occupational Health and Safety Issues Policy (March 2017);

6. The Workers Compensation Policy (March 2017);

7. The Anti-Discrimination and Equal Opportunity Policy (March 2017);

8. The No Bullying Policy (March 2017);

9. The Incident Investigation Procedure Policy (March 2017);

10. Communication to the CEO Policy (7 May 2017);

11. The Code of Honour and OH&S Policy (May 2017);

12. The We Are In It Together Policy (12 June 2018);

13. The Discrimination Policy (August 2018);

14. The Pay Attention and Not the Cost Policy (28 October 2018);

15. The Rental Guarantee Claims Policy (1 August 2019); and

16. The Bullying Policy (November 2019).

1. During the said period, the plaintiff was subjected to repeated harassing, demeaning, humiliating and/or otherwise inappropriate behaviour by Peluso and/or Paul of the following character:

1. The plaintiff was deliberately and inappropriately touched the plaintiff (sic) on her buttock/hip area by pinching, the said conduct constituting an assault against the Plaintiff ("the Peluso assault").

1. On or about 1 July 2019 approached (sic) the plaintiff's desk in an angry manner and said aggressively and in a sexually charged manner, 'If I am going to make these 7 calls, I will fuck you' and gave her the 'rude finger.', the said conduct causing the Plaintiff offense and an apprehension of harm constituting an assault by Paul against the Plaintiff ("the Paul assault")."

1. At all material times between 2014 and 2019 the First defendant was made aware of harassing, assaulting, interpersonal conflict, and/or bullying behaviors (sic) by Peluso and/or Paul towards the plaintiff.

PARTICULARS > > There was behaviour from Peluso (sic) was directed towards the plaintiff and often in front of other employees and was aggressive such as yelling and shouting, using mockery of the plaintiff's Chinese accent and threatening her with being 'sent back to China' or if she didn't comply that she wouldn't have a 'job here.' By reason of its nature it was known to the First defendant. > > In or about March or April 2017 the plaintiff spoke to a work colleague L about being touched on the hip/buttocks by Peluso, namely the incident constituting the Peluso assault. L [2] reported this to Kayla Smith. > > On 12 April 2017, the Plaintiff lodged an incident report with the First Defendant in respect of the Peluso assault, which was on the said date signed by the Plaintiff and accepted and signed by Smith. A copy of the said document has been discovered by the First Defendant in this proceeding and is available to it.

10A. At around 11:00am on 15 March 2017, L was physically and sexually assaulted by Peluso in the First Defendant's boardroom at 71 Palmerston Crescent, South Melbourne ("the L assault").

10B. On 5 April 2017, L lodged an incident report with the First Defendant in respect of the L assault, the said report recording "physical/sexual assault" by Peluso, in respect of which:

(a) A mediation was held between L and Peluso;

(b) Peluso apologised to L; and

(c) Peluso was required to undertake OH+S training.

10C. In such circumstances as L had been physically/sexually assaulted by Peluso and/or complained to the First Defendant about being physically/sexually assaulted by Peluso:

(a) Peluso engaged in a course of conduct being a tendency, consistent with the L assault, to assault employees of the First Defendant; and

(b) The First Defendant engaged in a course of conduct being a tendency, consistent with inadequately investigating and/or acting upon complaints of assaults by employees of the First Defendant upon other employees of the First Defendant, including assaults perpetrated by Peluso and Paul."

1. The First defendant is and was at all material times vicariously liable for the bullying the conduct aforesaid by Peluso and/or Paul, in particular such conduct as pleaded at paragraphs 9 to 10C above.

1. Further and/or in the alternative, the injury was caused by the Peluso assault.
2. Further and/or in the alternative, the injury was caused by the Paul assault.
3. Further and/or in the alternative, the injury was caused by the First Defendant's breaches of the employment agreement and in particular the express and/or implied terms referred to at 2B above.
4. Further and/or in the alternative, the injury was caused by the First Defendant's breach of the employment agreement in so far as it took adverse action against the Plaintiff's employment, including:

(i) In October 2019, the First Defendant withdrew its sponsorship of the Plaintiff's 457 visa application by withdrawing support for the nomination refusal review application.

(ii) On 19 August 2019, 20 March 2020 and 8 May 2020, the First Defendant issued three spurious show cause notices respectively bearing even date, which constituted adverse action by Peluso and the First Defendant against the Plaintiff's employment.

(iii) In May and June 2020, the First Defendant took action against the Plaintiff to effectively demote the Plaintiff by informing the WorkCover agent that her pre-injury employment position was not available to the Plaintiff and that any return to work would be as a receptionist or telemarketer.

(iv) The First Defendant constructively dismissed the Plaintiff.

PARTICULARS OF CONSTRUCTIVE DISMISSAL

1. On 12 August 2020, the First Defendant wrote to the Plaintiff's solicitor sating ""if Ms. Zhang wishes to cease her employment with Wealth for Life as stated on page 7 of your letter, then we accept Ms Zhang's resignation effective immediately. Ms. Zhang's annual leave will be paid out within the next schedule pay day".
2. The Plaintiff did not reply to the aforementioned communication.
3. On 16 August 2020:

(1) the Plaintiff's photo was removed from its company website; and

(2) The Plaintiff received a payslip for the period 3 August 2019 o (sic) 16 August 2020 along with a statement indicating that her annual leave had been paid out.

1. On or before 1 September 2020, the Plaintiff's access to the company payslip system, Xerox, was removed.

1. Further and/or in the alternative, the injury was caused by Peluso and/or Paul's respective breaches of their contracts of employment with the First Defendant including policies and procedures of the First Defendant in respect of which they were contractually obliged to comply, and in respect of which the First Defendant was capable of taking action against each of them pursuant to the terms of each said contract of employment.
2. Further and/or in the alternative, the injury was caused by the First Defendant's failure to adequately address the reasonably foreseeable risks of harm to the Plaintiff caused by:

(a) The Peluso assault;

(b) The Paul assault;

(c) The Plaintiff's complaints in respect of the bullying behaviour and otherwise as set out at paragraph 10 above;

(d) Peluso and/or Pauls respective breach/es of their contracts of employment with the First Defendant;

(e) The First Defendant's actions following the Plaintiff's complaints about Peluso and Paul, or further or in the alternative, upon having found following an investigation that Peluso and/ Paul had breached the terms of their contract/s of employment, including:

1. its failure to reprimand or adequately reprimand Peluso and Paul;
2. failing to take adequate steps eliminate risks of harm to the Plaintiff.

(f) The First Defendant's actions following the Plaintiff's lodgement of a WorkCover claim on 23 August 2019, in particular:

1. Its failure to comply with its return-to-work obligations pursuant to Part 4 of Division 8 of the Workplace Injury Rehabilitation and Compensation Act 2013 ("the Act");
2. Its failure to consult or adequately consult with the Plaintiff about ways in which the First Defendant could ensure the Plaintiff's safe return to work;
3. Victimising or reprising or otherwise unfairly acting against the Plaintiff's employment by altering the nature of her role;
4. Withdrawing sponsorship for the Plaintiffs 457 Visa, which was before that time sponsored by the First Defendant;
5. Constructively dismissing the Plaintiff (or similar) by terminating the Plaintiff's employment.

PARTICULARS OF NEGLIGENCE AND/OR BREACH OF DUTY

(n) Failing to adequately investigate and act on the Plaintiff's complaint in respect of the Peluso assault.

(o) Failing to adequately investigate and act on L's complaint in respect of an assault perpetrated against her by Peluso, namely in respect of the L assault.

(p) Failing to adequately reprimand Paul and Peluso for their respective breaches contract of employment with the First Defendant, which included but was not limited to his assault, bullying and/or harassment of the Plaintiff and/or the L assault.

(q) Failing to adequately enforce the contractual and/or disciplinary measures the First Defendant had at its disposal having found that Paul had breached the terms of his contract of employment in his conduct towards the Plaintiff characterised by the Paul assault.

(r) Failing to take such disciplinary measures against Peluso and Paul which were adequate to eliminate the risk of psychiatric harm caused to the Plaintiff by their respective actions.

(s) Failing to summarily terminate Peluso's and/or Paul's employment in the circumstances.

(t) Failing to alter Peluso and/or Paul's employment such that they would not be able to have any further contact with the Plaintiff at work following the Plaintiff's complaints in respect of the bullying behaviour and/or otherwise as identified at paragraph 10 above.

(u) Failing to reprimand Peluso for his conduct relevant to the Peluso assault in a manner that made it clear to the Plaintiff's co-workers (including Paul) that the sexual assault and/or harassment in the workplace was forbidden so to discourage future conduct of a similar nature by workers in the workplace.

(v) Failing to make or make adequate arrangements for the Plaintiff to return to work in a suitable position having regard to her restrictions and incapacity after the lodgment of her WorkCover claim in August 2019.

(w) Failing to ask the Plaintiff whether an apology by Paul in respect of the assault was enough.

(x) Failing to consult with the Plaintiff about how the First Defendant might be able to reduce the risk of harm caused to her by the bullying behaviours, the Peluso assault and/or the Paul assault.

(y) Rather than altering Paul's employment after the Paul assault, causing further harm to the Plaintiff by permitting Paul to continue to interact with the Plaintiff in the workplace.

(z) Failing to comply with its obligation to provide employment, plan and consult in respect of the Plaintiff's return to work in accordance with Part 4, Division 8 of the Act after the Plaintiff made her claim for compensation in August 2019.

(aa) Taking adverse action against the Plaintiff's employment, including by constructively dismissing her and/or withdrawing its sponsorship of her 457 visa application.

(a) The joinder of Peluso and Paul to the proceeding should not be permitted as:

(i) The plaintiff's claims against Peluso and Paul are based entirely on allegations of fact and law that form part of her existing claim against the defendant.

(ii) The defendant conceded that it will be vicariously liable for any torts including intentional torts that Peluso or Paul are found to have committed against the plaintiff.

(iii) The joinder would serve no forensic purpose, but would likely increase the length, complexity and costs of the proceeding.

(iv) The joinder is contrary to r9.06(b) of the Rules as neither Peluso or Paul are persons who ought to be joined as a party or whose presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely adjudicated upon. It would not be just or convenient to determine questions in relation to Peluso or Paul and joinder would not affect the relief she may be entitled to.

(v) Joinder would not further the overarching purpose of the Civil Procedure Act 2010.

(vi) Refusal of the joinder would be consistent with the decisions of Parrish J in Kane v Port Phillip City Council[3] and Dowling J in Moore v Barwon Health.[4]

1. The first defendant submitted that the amended statement of claim is embarrassing in its present form and it objected to the following pleadings:

(a) The "first employment agreement" and "second employment agreement" are not defined in the pleading.

(b) It contains a rolled-up reference to express and/or implied terms and the plaintiff does not make clear whether any particular term is alleged to be an express term or an implied term and if implied, whether the implication is said to arise as a matter of law or fact.

(c) The reference to "and/or otherwise" contained in sub-paragraph (b) is unintelligible and defective having regard to the manner in which the plaintiff pleads a case for breach of contract.

(d) Although the plaintiff recites the first defendant's 16 policies, no further details in respect of the relevancy of the policies are given.

(e) The plaintiff pleads at paragraph 10A an alleged course of conduct including physical and sexual assaults allegedly perpetrated by Peluso against L ('L assault'). These allegations are not adequately particularised, nor are the specific acts of Peluso that are said to constitute the assaults identified.

(f) The plaintiff then seeks to plead tendency at paragraph 10C that:

(i) Peluso engaged in a course of conduct being a tendency consistent with the L assault, to assault employees of the first defendant.

(ii) The first defendant engaged in a course of conduct, being a tendency consistent with inadequately investigating and/or acting upon complaints of assault by employees of the first defendant upon other employees including those perpetrated by Peluso and Paul.

(g) The plaintiff had not particularised the alleged course of conduct, including the assaults allegedly perpetrated by Peluso, nor does the plaintiff allege that the first defendant undertook any investigation or that the investigation into the L assault was inadequate.

(h) The allegation that the first defendant is vicariously liable for the conduct of Peluso and Paul is defective in law because the first defendant is only vicariously liable for tortious acts committed by Peluso and Paul, and not their conduct in a broader sense. The plaintiff has not alleged that the bullying behaviour particularised at paragraph 9 amounts to torts, save for the two assaults, that Peluso and Paul would themselves be liable to the plaintiff.

(i) Paragraph 19 is embarrassing insofar as the alleged breaches of the first defendant of the term of the employment agreement are not particularised.

(j) Paragraph 20 is embarrassing insofar that the pleadings do not set out how the adverse action against the plaintiff constituted a breach of the employment agreement.

(k) Paragraph 21 is embarrassing as there are no particulars of the alleged breaches of contract by Peluso and Paul insofar as the terms that were allegedly breached nor are the facts that allegedly gave rise to those breaches identified.

1. Lastly, the first defendant submitted that the claim for exemplary damages is not maintainable as a matter of law. The plaintiff is entitled to compensation under the Act in respect of an injury arising out of or in the course of her employment and therefore recovery of damages in respect of that injury is governed by Division 2 or Part 7.

1. It was submitted on behalf of the plaintiff that Judicial Registrar Lynch was correct in granting the plaintiff leave to amend the writ and statement of claim and that he correctly applied the relevant principles.
2. The plaintiff submitted that the joinder of Peluso and Paul ought to be upheld as:

(a) The question of whether the intentional tort gives rise to injury which invokes the operation of the Act is a question of fact which cannot be determined until all relevant evidence has been called at trial.[5]

(b) The plaintiff submitted that it is irrelevant that the defendant conceded the issue of compensability and vicarious liability as the concession had been provided for the purpose of this application but is contrary to what is pleaded in the defence. It does not displace the proper application of legal principles to the evidence to be adduced at trial.

(c) Peluso and Paul's alleged conduct are assaults, thus intentional torts, and are liable to fall outside the scope of the defendant's interests or ostensible pursuit of its business or apparent execution of its authority that it held out Paul and Peluso as having. I was referred to the decision of Martin v Bailey[6] wherein the Court discussed a number of decisions involving assaults in the workplace, and in particular the dissenting judgment of Robson AJA, who made reference to earlier decisions of Deatons Pty Ltd v Flew[7] and Lloyd v Grace Smith & Co[8] before quoting from the judgment of Gummow and Hayne JJ in New South Wales v Lepore.[9]

1. It was also submitted that the first defendant is incorrect to submit that the allegations in paragraphs 2B, 10A, 10C, 12, 19, 20 and 21 are embarrassing, as they have a proper basis, and the first defendant is capable of producing a defence in response to each of the paragraphs.
2. The plaintiff would have a right to claim aggravated and exemplary damages, if after the hearing of all the evidence, the plaintiff could not establish a basis at law, that she suffered a 'compensable injury' in respect of either of the assaults.
3. Section 340 of the Act does not preclude a claim for exemplary or aggravated damages against a third-party intentional tortfeasor. Coloca v BP Australia Ltd[10] held that the law in Victoria, prior to the Accident Compensation Act 1985 (Vic) ("the ACA"), permitted the award of exemplary damages in actions for personal injury caused by negligence, if the plaintiff proved that the defendant had acted in contumelious disregard to the plaintiff's rights. It was the conduct of the wrongdoer that had to satisfy the criteria for an award of exemplary damages and that was not dependent on the nature of the tort. The distinction was of relevance to the present case as the ACA and the Act are directed towards tortious liability of employers that do not extend to trespass or intentional wrongdoing by third parties.

1. In Banque Commerciale SA v Akhil Holdings Ltd Mason CJ and Gaudron J (with whom Brennan J agreed) said:[11]

"The function of pleadings is to state with sufficient clarity the case that must be met... In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities."

2. In Gunns Limited v Marr, Bongiorno J observed:[12]

"Not only must the pleading inform the defendants of the case they must meet now, but it must clearly set out the facts which the plaintiffs must assert to make good their claim with sufficient particularity to enable any eventual trial to be conducted fairly to all parties. Vague allegations on very significant matters may conceal claims which are merely speculative. If this be not the case, the plaintiffs must put their allegations clearly."

3. It is clear from those 'principles', that the primary function of pleadings is one of fairness; for the defendant must know the case it has to meet.
4. Consistent with those principles I find as follows:

(a) The plaintiff has failed to define "first employment agreement" or "second employment agreement" and must do so. In so far as she has pleaded that there are implied terms of the two employment agreements (which are not defined), she has failed to set out the basis for the implication and whether the implication is through fact or implied by operation of law. Paragraph 2B(b) contains a recitation of the first defendant's policies, procedures and guidelines. The relevance of this is not clear and the pleading itself gives no insight into the materiality of these policies, procedures and guidelines to the cause of action(s) pleaded. To the extent that they may be said to form part of the background factual matrix, they are unnecessary and are not material to making out the cause of action. In addition, it is not clear from the pleading what terms (whether express or implied) are said to give rise to the duty to provide a safe system of work, a safe place of work or appropriate supervision of the plaintiff's work.

(b) I accept the first defendant's submissions that the allegations are not adequately pleaded or particularised in paragraph 10A and 10C. The pleading is embarrassing. The specific acts of Peluso at paragraph 10A which are said to constitute the L assault are not set out. It is not apparent whether the course of conduct allegedly directed against the plaintiff is of a similar nature as that involved in the L assault. At paragraph 10C(a), the plaintiff alleges that Peluso engaged in a course of conduct, being a tendency consistent with the L assault, to assault employees of the first defendant. In my view, it is not clear what that the course of conduct is. The allegation is of a physical/sexual assault against L but the allegation in respect of Peluso's conduct against the plaintiff is of "deliberate and inappropriate touching of the buttocks/hip said to constitute an assault". The plaintiff makes no allegation of sexual assault against Peluso. In addition, the plaintiff alleges she spoke to a work colleague about the Peluso assault in about March or April 2017 and reported the assault on 12 April 2017, in particulars appended to paragraph 10. The L assault allegedly took place on 15 March 2017. It is not clear from the pleadings whether the alleged Peluso assault on the plaintiff took place before the L assault. As Gageler J said in Hughes v The Queen, tendency is no "more sophisticated than: he did it before; he has a propensity to do this sort of thing; the likelihood is that he did it again on the occasion in issue."[13] Based on the current pleading, it is not possible to determine whether it is open to the plaintiff to allege tendency.

(c) Paragraph 10C(c) is also deficient as the plaintiff is seeking to rely on tendency on the basis of unstated facts. The plaintiff purports to plead that the first defendant has a tendency to inadequately investigate and/or act upon complaints of assaults upon other employees of the first defendant, including assaults by Peluso and Paul. The plaintiff does not plead that there was any investigation into the L assault, nor that if there was such an investigation, that it was inadequate. She does not plead that there were any complaints of assaults upon employees other than L; or whether such complaints were acted upon or investigated by the first defendant, or if there were such complaints, that the first defendant's response was inadequate. Neither does the plaintiff allege that Peluso perpetrated assaults on other employees of the first defendant (other than on L) or that Paul perpetrated other assaults. The expression 'material facts' is not synonymous with providing all the circumstances. Material facts are only those needed to establish the essential elements of the cause of action.[14] The plaintiff has clearly not pleaded the material facts.

(d) These paragraphs need to be repleaded.

(e) Although extensive particulars in respect of both Peluso and Paul's conduct are alleged at paragraphs 9 as the High Court in Bird v DP[15] stated, true vicarious liability is not the liability, but the acts of the agent that are attributed to the principal. Other than perhaps the assaults alleged in paragraph 9(h) and 9(c) respectively, those acts of Peluso and Paul said to be attributable to the first defendant giving rise to the vicarious liability, are not identified in paragraph 12. This pleading therefore cannot stand and must be repleaded.

(f) Paragraph 19 is deficient. It does not plead what constitutes the first defendant's breach of the employment agreement. Insofar as the pleading refers to breaches of the express or implied terms referred to in paragraph 2B, given the deficiencies in paragraph 2B, this is nonsensical.

(g) At paragraph 20, the plaintiff does not outline how "the adverse action" taken by the first defendant, constitutes a breach of the employment agreement. This pleading is embarrassing.

(h) Paragraph 21 is simply not particularised. It does not specify what the respective breaches of Peluso and Paul were of their respective contracts of employment, what policies and procedures they were contractually obliged to comply with or what is meant by breaches of policy and procedures "in respect of which the first defendant was capable of taking action against them pursuant to the terms of each said contract".

1. I will strike out paragraphs 2B, 10A, 10C, 12, 19, 20 and 21 of the Amended Statement of Claim, and I grant the plaintiff leave to replead same.

"At any stage of a proceeding the Court may order that -

(a) Any person who is not a proper or necessary party, whether or not that person was one originally, cease to be party;

(b) Any of the following persons be added as a party -

(i) A person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon; or

(ii) A person between whom and any party to the proceeding there may exist a question arising out of or relating to or connected with any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding;

(c) A person to whom paragraph (b) applies be substituted for one to whom paragraph (a) applies."

1. Judicial Registrar Lynch identified the appropriate test to determine whether Peluso and Paul ought to be joined as parties. He observed the underlying aim of Rule 9.06 and made reference to the following applicable principles as articulated in Charan v National News by J Forrest J:[16]

"I have identified the following factors as being relevant to the consideration of an amendment to a pleading: > > (a) whether there will be a substantial delay caused by the amendment; > > (b) the extent of any wasted costs; > > (c) whether there is an irreparable element of unfair prejudice caused by the amendment; > > (d) concerns of case management arising from the stage in the proceeding when the amendment is sought; > > (e) whether the grant of the amendment will lessen public confidence in the judicial system; and > > (f) whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought."

"I am afraid it is trite, each case turns on its own circumstances and that at the end of the day the primary question must be, what do the interests of justice dictate? In reaching any determination one does not look solely at the question of injustice for the party seeking the amendment, but also to any consequential effects upon his or her opponents, and perhaps not equally as important, but no doubt relevant, the court in the management of its business."

3. Having considered the parties' submissions I consider that Peluso and Paul should be parties to the proceeding as their presence is necessary to ensure all questions are effectually and completely determined and adjudicated upon. There is force in the plaintiff's submission that the evidence may ultimately establish that Peluso and Paul were acting outside the scope of their employment, and their conduct was not related to employment or done with the employer's seal of approval. If the alleged assaults fall outside the scope of the employer's interests or the ostensible pursuit of the employer's business, then that may not give rise to a vicarious liability, notwithstanding the first defendant's intention to accept vicarious liability for any intentional torts committed by Peluso and Paul.
4. This is consistent with the reasoning of Gummow and Hayne JJ in New South Wales v Lepore:[18]

".... in Deatons, the barmaid who threw the glass did so in retaliation for a blow and an insult, not in self-defence and not in any way in the supposed furtherance of the employer's interests (whether in keeping order in the bar or otherwise). Nor, unlike Lloyd was it a case where the act done was one to which the ostensible performance of the employer's work gave occasion, or which was committed under cover of the authority the employee was held out as possessing, or of the position in which the employee was placed as representative of the employer.

For present purposes, it is enough to conclude that when an employer is alleged to be vicariously liable for the intentional tort of an employee, recovery against the employer on that basis should not be extended beyond the two kinds of case identified by Dixon J in Deatons Pty Ltd v Flew. First, where the conduct of which complaint was made is done in the intended pursuit of the employer's interests or in the intended performance of the contract of employment, or, secondly where the conduct of which complaint is made was done in the ostensibly pursuit of the employer's business or the apparent execution of the authority which the employer held out the employee as having."

1. Moreover, the first defendant acknowledged that Peluso and Paul may not have common interests in relation to every issue in the proceeding and may choose to take a different position on certain issues because they would be personally liable. In addition, they may take different positions in relation to different facts in the proceeding from the position of the first defendant and there may be a divergence in approach. I accept that their interests in the litigation are different particularly as their conduct may give rise to a personal liability and this is the very reason that makes it necessary for them to be joined as parties. If their conduct, on the evidence is capable of establishing that it falls outside their intended pursuit of the first defendant's interests or in the intended performance of their employment contracts or where the conduct was done outside ostensible pursuit of the employer's business or apparent authority, then they may be personally liable to the plaintiff. Moreover, the allegations against them could give rise to criminal sanctions. The conduct is distinguishable to that in Kane and Moore.
2. In order for all questions to be tried and in the interests of justice, Peluso and Paul should be parties to the proceeding. They are more than mere potential witnesses. The amendments will not cause substantial delay or wasted costs as the action has yet to be re-fixed for hearing. Nor will there be irreparable unfair prejudice caused by the amendment. The plaintiff has provided an adequate explanation for making the amendment at this stage of the proceeding. The joinder is in conformity with r9.06(b) of the Rules.
3. Although Peluso and Paul are joined as defendants, I make the observation that the plaintiff has not alleged that the assaults at paragraphs 9 and 10 amount to an intentional tort for which they are liable to the plaintiff, nor do the amended pleadings allege a breach of duty on the part of Peluso or Paul.

1. The plaintiff's submission that she may have a right to claim aggravated and exemplary damages, if after the hearing of all the evidence, she does not establish a basis at law that she suffered 'compensable injury' in respect of either of the assaults, conflates the issue of scope or course of duty on the part of tortfeasors with the issue of compensability. Martin v Bailey[19] concerned an action brought by Bailey against Martin seeking damages for three sperate assaults. Two assaults occurred whilst Bailey was performing his duties as a manager of a farm. Martin argued that any injuries suffered by Bailey arose out or in the course of employment and the action was governed by s134AB of the ACA. The majority confirmed that s134AB was a "serious injury gateway" and Maxwell P, who was in the majority, said after considering a number of authorities:[20]

"As already noted, the prohibition on common law proceedings is the reflex of the entitlement to compensation under the Act. Without exception, the decisions under consideration are concerned with the scope of the entitlement, not with the scope of the prohibition. That is, the court or tribunal has been concerned with the question whether the worker (or in the case of death, his/her dependants) can successfully bring the circumstances of the injury or death within the entitlement provisions for workers compensation. The decisions are directly on point nonetheless. > > It would appear from these authorities that two factors are of critical importance ins determining whether the worker's injury has the requisite connection with the employment. The first is whether the altercation has its origin in an employment-related matter or in a personal or private matter. The second is whether, at the time the injury (or death) occurred, the worker was performing the duties of his/her employment. The following general propositions can be derived from the authorities:

2. If the altercation had its origin in an employment-related matter, the injury is likely to be regarded as having arisen 'out of the employment'.
3. If the altercation had its origin in a private quarrel or a personal grievance, then the injury is unlikely to be compensable unless the worker was carrying out the duties of his/her employment when injured, and was not the aggressor."
4. Here, the plaintiff alleges at paragraph 2 that she was employed by the first defendant as a Quality Assurance Manager and at all material times, acting in the course of and scope of those duties. Save for stating that "all material times" is not defined, the first defendant admits paragraph 2. Thus, the plaintiff's injuries appear to have the requisite connection with employment, consequently her entitlement to damages is governed by s340C of the Act and is restricted. Whilst Peluso and Paul's behaviour may fall outside their employment, that does not determine the question of compensability vis the plaintiff.
5. The plaintiff's claim for exemplary damages is not maintainable at law. Her entitlement to recover damages is governed by Division 2 Part 7 of the Act. Any award of damages awarded to the plaintiff must be in conformity of this Act. The plaintiff cited Coloca in support of her submission, but the cause of action, which was the subject of that case, predated the introduction of the ACA which imposed restrictions on the recovery of damages for claims in negligence.
6. The first defendant relied on the decision of Aksentijevic v Victoria Racing Club Ltd[21] where Justice Kaye held that s134AB(22) of the ACA clearly precluded an award of exemplary damages. Section 134AB(22) of the ACA was re-enacted as s340C of the Act which restricts the recovery of damages to pecuniary loss damages, damages for pain and suffering and at sub- paragraph (c) provides a court must not award in respect of an injury, damages of any other kind, other than damages in the nature of interest. The reasoning in Coloca does not apply here given the restrictions on common law damages imposed by the Act.
7. The first defendant conceded that a claim for aggravated damages was maintainable.
8. Consistent with the decision in Aksentijevic, I find that the claim for exemplary damages is not maintainable.

1. I invite the parties to submit draft orders consistent with my decision.

[1] [2024] HCA 50 ('Elisha')

[2] Given the pleadings seek to assert that a co-employee was a victim of physical/sexual assault, it is appropriate that I refer to this individual by the letter "L" as I was not informed whether the individual is aware of the pleadings or whether they consent to being identified.

[3] [2013] VCC 1243 ('Kane')

[4] [2024] FCA 1387 ('Moore')

[5] See Kaye JA in Tsirigakis v Mallett [2025] VSCA 134 [118]-[137]

[6] [2009] VSCA 263; (2009) 26 VR 270

[7] [1949] HCA 60; (1949) 79 CLR 370

[9] [2003] HCA 4; (2003) 212 CLR 511, 591, 592 [231]-[233]

[10] [1992] VicRp 74; [1992] 2 VR 441 ('Coloca')

[11] (1990) 169 CLR 279 at [18]

[12] [2005] VSC 251 at [57]

[13] [2017] HCA 20 at [70]

[14] Wheelahan & Anor v City of Casey & Ors (No 12) [2013] VSC 316

[15] [2024] HCA 41; (2024) 98 ALJR 1349

[16] [2017] VSC 66 at [17] ('Charan')

[18] [2003] HCA 4; (2003) 212 CLR 511 at [233], [239]

[19] [2009] VSCA 263

[20] Martin v Bailey [2009] VSCA 263 at [21]- [22]

[21] [2011] VSC 541 at [4] ('Aksentijevic')