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Mental harm and corporate knowledge February 21, 2017

Optus Administration Pty Limited v Glenn Wright by his tutor James Stuart Wright [2017] NSWCA 21

  1. This provision requires a different approach from that arising under general law principles. Where there is a pre-existing relationship, as with a contractual relationship of employment, the general law imposes a single comprehensive duty and not separate duties to protect against physical harm and to protect against psychiatric injury. [31] The same principle applies as between medical practitioner and patient, the law imposing a “single comprehensive duty” in relation to the provision of professional advice and treatment. [32] 
  2. A general law principle is, however, subject to statutory variation. One effect of s 32 of the Civil Liability Act is to require a particular and separate inquiry into the existence of a duty of care with respect to mental harm. The section imposes a qualification on the test of reasonable foreseeability by specifying three elements that the defendant ought to have foreseen, namely, (a) that “a person of normal fortitude” might (b) “in the circumstances of the case” suffer (c) “a recognised psychiatric illness”, if reasonable care were not taken.
  3. The trial judge dealt with the question of duty by first positing the existence of a “general” duty of care owed by Optus to the plaintiff, and then considering the effect of s 32. Under the heading “Content of the duty owed”, the judge stated: [33] 

“Subject to the two following points, Optus owed Mr Wright a duty to take reasonable care in establishing, maintaining and enforcing a safe system of work in the sense of safeguarding him from unreasonable risks in the methods by which the work was to be undertaken, extending to taking reasonable care to protect him from the criminal acts of others in the workplace. In the specific circumstances which arose on 15 March 2001 that duty involved the exercise of reasonable care in devising and instituting a system for managing the aberrant behaviour of George so as to safeguard Mr Wright, and other persons on the premises to perform work, from any foreseeable, not insignificant risk that George may assault him.”

  1. The two qualifications referred to in the opening words of this passage were (a) that “while duties of care may vary in content or scope, they are all to be discharged by the exercise of reasonable care”; [34] and (b) the application of Pt 3 of the Civil Liability Act. [35] It is the second matter, to which the trial judge then turned, which requires attention here.
  2. Although such a two stage process was not necessarily erroneous, it had the potential to miscarry. Thus, while it was no doubt true, as the trial judge held, that Optus owed a general duty of care to the plaintiff, even though not an employee of Optus, that conclusion was of limited relevance. That conclusion was reached by applying principles from Modbury Triangle Shopping Centre Pty Ltd v Anzil. [36] The trial judge referred to the following statement of Gleeson CJ in Modbury Triangle: [37] 

“Leaving aside contractual obligations, there are circumstances where the relationship between two parties may mean that one has a duty to take reasonable care to protect the other from the criminal behaviour of third parties, random and unpredictable as such behaviour may be. Such relationships may include those between employer and employee, school and pupil, or bailor and bailee.”

  1. The trial judge also referred to a passage from the judgment of Hayne J in Modbury Triangle: [38] 

“Some emphasis was given in oral argument to the proposition that an employer may owe an employee a duty to take reasonable care to prevent the employee being robbed. If that is so, however, it is because the employer can prevent the employee going in harm’s way. The employer has the capacity to control the situation by controlling the employee and the system of work that is followed. The duty which the employer breaks in such a case is not a duty to control the conduct of others. It is a duty to provide a safe system of work and ensure that reasonable care is taken.

In those cases where a duty to control the conduct of a third party has been held to exist, the party who owed the duty has had power to assert control over that third party.”

  1. Consideration of a “general” duty may have been significant if the conclusion were that no such duty was owed; s 32 is stated in the negative and could be seen as imposing a conditional qualification on a broader category of circumstances where a duty might be owed. However, the question which s 32(1) requires to be addressed focuses upon “the circumstances of the case”. The trial judge was undoubtedly alert to that factor and, in reaching a final conclusion on the question of duty, did indeed focus upon the circumstances of the case; however, by reference to the general duty, the trial judge identified two further aspects of the duty, stating: [39] 

“Moreover, Optus’ duty was personal or non-delegable, and in those circumstances Mr Williams’ acts and omissions may be attributed to it without necessary reliance on the doctrine of vicarious liability: TNT v Christie at [47].”

  1. It is necessary to consider both parts of this statement and the reliance upon the judgment of Mason P in TNT Australia Pty Ltd v Christie. [40] In Christieat [46], Mason P set out a lengthy extract from his own judgment in Lepore v State of New South Wales. [41] In Lepore Mason P stated:

“[32]   Where the non-delegable duty is one of care (and most reported cases deal with this situation) the duty is expressed as requiring the defendant to ensure that reasonable care is taken …. [42] 

[43]   … However, the concept extends to negligence by employees, because it may be invoked where the fault is, or might be, that of an employee whether or not acting in the course of employment. Many of the hospital cases are in this category, because there is uncertainty whether the personal fault lay with an employee (eg a nurse) or an independent contractor (eg a visiting specialist surgeon).”

  1. Following the reference to Lepore, Mason P concluded in Christie at [47]:

“The authorities cited in par [32] of this extract demonstrate that, in the realm of negligence, (a) a non-delegable duty of care will (like a duty based on vicarious liability) be imposed on categories of persons regardless of personal fault on their part in the circumstances giving rise to the plaintiff’s injury; but (b) the plaintiff must prove that damage was caused by lack of reasonable care on the part of someone (not necessarily the defendant) within the scope of the relevant duty of care.”

  1. Although Mason P dismissed the reasoning in NSW v Lepore in the High Court as not affecting his approach in this Court, [43] subsequent authority casts doubt on the justification for continued use of the term “non-delegable”. [44] Importantly for present purposes, as explained by Gleeson CJ in NSW v Lepore in the High Court, the purpose and effect of characterising a duty of care as either “non-delegable” or “personal” is “not always entirely clear”. [45] The Chief Justice stated: [46] 

“In the context of employment, for example, a duty to take reasonable care for the safety of workers cannot be discharged by delegation; but delegation does not transform it into a duty to keep workers free from all harm. A duty to see that reasonable care is taken for the safety of workers is different from a duty to preserve them from harm.”

  1. Two points arise from this discussion which are critical in the present case. First, as the reference to the acts and omissions of Mr Williams indicated, the judge found liability in Optus based on the conduct of its employee. As there was no question of Mr Williams acting outside the scope of his employment, or having any immunity from liability, it is difficult to be sure what purpose was served in distinguishing the “personal or non-delegable” duty of Optus from its vicarious liability. Indeed, it follows from the passage in Christie at [47] and the reasoning of Gleeson CJ in NSW v Lepore that there must have been “damage caused by lack of reasonable care” by some person, in this case Mr Williams; there is no duty to keep workers free from all harm. It will be necessary to return to that issue in due course.
  2. Secondly, as to foreseeability, after referring to the elements of s 32 and the need to determine the question of duty by reference to “the circumstances of the case”, the judge noted the following submission by Optus: [47] 

“Optus relied very substantially on what might be regarded as the generally innocuous nature of call-centre work, the unlikelihood of violence occurring between clerical workers, the lack of knowledge, actual or constructive on the part of Optus of the character of George and the unpredictability of the conduct he in fact engaged in.”

  1. Accepting that foreseeability must be decided as a matter of foresight and not hindsight, and “without knowledge of the precise circumstances in which the harm was inflicted, and as though it had not occurred”, [48] the trial judge continued: [49] 

“Having said that, the approach urged by Optus is flawed in my judgment because it fails to focus upon the circumstances of the events which unfolded on the roof, all of which were within the direct knowledge of Optus. Moreover, the pre-existing relationship between Optus and Mr Wright itself gave rise to a duty of care; it was analogous to the employment relationship which is an established category of duty covering mental harm, where such harm is reasonably foreseeable: Mt Isa Mines Ltd v Pusey. [50] Assuming that it was foreseeable in the circumstances pertaining on the roof that George may assault Mr Wright when he was brought to him, a question I will consider in detail when dealing with breach, I am satisfied that the defendant ought to have foreseen that a person of normal fortitude might suffer a recognised psychiatric illness if reasonable care were not taken. In arriving at this conclusion I have taken into account the evidence of Ms Hedges of her observations of Mr Wright following George’s attack.”

  1. There are two basic problems with this reasoning which may result from a combination of the issues identified above. The first is the finding as to a general duty before applying the terms of s 32, which require attention to “the circumstances of the case”. The second is the characterisation of the general duty as personal or non-delegable. The result was an attribution of knowledge to Optus arising from the combined knowledge of its various employees. However, until that knowledge was combined (and attributed to Optus) a duty of care was not established. That is clear from the following passage in the reasoning of the trial judge, albeit occurring in the discussion of breach, rather than the existence of the duty: [51] 

“Accurate identification of the risk requires the adoption of the appropriate level of abstraction to the circumstances of the case. The risk here is not an assessment of the risk of injury to an employee from the criminal acts of third parties on the premises. Rather, the risk is the risk of George inflicting personal injury, including mental harm on Mr Wright in the circumstances actually known to Optus through its employees on 15 March 2001 before Mr Wright was requested to attend the roof to speak to George. It would amount to the adoption of a level of abstraction all too general in nature to pose the question ‘what is the chance of one call centre trainee assaulting another’, stripped of the circumstances actually occurring on 15 March 2001 before the assault took place.”

  1. There is an important elision in the reasoning at this point. If the liability of Optus were truly vicarious (whether described as vicarious or as resulting from a non-delegable duty) then there must have been negligence on the part of its employee. What the employee ought or ought not to have done may well depend upon the circumstances of which he or she was, or ought to have been, aware. The negligent conduct of the employee may then be attributed to Optus. However, that is not what happened here. [52] On the other hand, if Optus itself had a duty to act in a certain way, that must depend upon the reasonable foreseeability of the circumstances which arose on the morning of 15 March 2001 on level 4 of its building, at some earlier point in time. That level of foresight is not to be identified by attributing to it knowledge (which it did not actually have) which arose in the course of the events giving rise to the alleged breach of duty. Nor is there authority for the proposition that knowledge in different employees (operating below the level of senior management) can be accumulated and attributed to the company.
  2. The issue of attribution of knowledge was not explicitly addressed in the judgment below. However, attribution of conduct was addressed. That discussion occurred in the following context: [53] 

“I am conscious that no case is advanced against Optus in terms of vicarious liability for the negligence of Mr Williams. That is to say, such a case has not been pleaded and that point is taken by Counsel for Optus. The breach question must be considered from the standpoint of a reasonable person in the position of Optus. … As Mr Williams appears to have been reporting to Ms Taylor his conduct arguably cannot be attributed directly to Optus: Tesco Supermarkets Ltd v Nattrass. [54] Even so, in taking the steps he took to manage the situation, he was acting within the scope of his employment and with the authority of his superiors who had left the management of the situation to him. He was Optus’ man on the ground for dealing with this matter.”

  1. After noting the discussion of principles of attribution by Spigelman CJ in Director General, Department of Education and Training v MT, [55] the judge continued: [56] 

“Spigelman CJ made reference to Hollis v Vabu Pty Ltd. [57] This passage refers to the concept of an employer’s enterprise creating a risk that produces a tortious act for which the employer must bear responsibility.” [58] 

  1. None of this authority supports the proposition that an aggregation of knowledge of various employees is to be attributed to the corporate employer for the purpose of demonstrating negligence on its part. The suggestion that Mr Williams was Optus’ “man on the ground” does not demonstrate that, for this purpose his knowledge was that of the company: rather, his knowledge was directly relevant to establishing negligence on his part for which the company might be vicariously liable. This was the basis of liability eschewed by the plaintiff. (The reason for not asserting liability on that basis may have been because Mr Williams did not have sufficient knowledge to support a finding that he was negligent.)
  2. The reliance on an aggregation of knowledge was confirmed when the trial judge set out, in dealing with the question of breach, a list of relevant elements of knowledge, commencing: [59] 

“Turning to s 5B(1)(a) [of the Civil Liability Act] Optus knew, or ought to have known, through the actual knowledge possessed by its employees, relevantly Ms Hedges and Mr Williams ….”

(c)   application of s 32

  1. Section 32 states that there is no duty of care not to cause mental harm, unless the composite criterion specified in that provision is satisfied. Because it is necessary to assess whether a person of normal fortitude would suffer a recognised psychiatric illness “in the circumstances of the case”, it may be necessary to specify the critical event with a degree of precision. For example, a course of conduct involving bullying or abuse directed at an individual employee may satisfy the criterion, whereas an individual instance of abuse in an otherwise harmonious workplace may not. Further, it is implicit in the expression of the criterion that the circumstances which might lead a person of normal fortitude to suffer a psychiatric illness must themselves be reasonably foreseeable. Before turning to the circumstances of the present case, reference should be made to the further provision as to what is encompassed by the phrase “the circumstances of the case”, identified in s 32(2).
  2. Part 3 also requires that, in a case of pure mental harm, a distinction be drawn between the harm which arises in connection with a third person (the victim) being killed, injured or put in peril by the act or omission of the defendant (s 30(1)) and the situation where mental harm arises from an act or omission of the defendant directed against the plaintiff. Section 30 imposes limits on recovery in circumstances where the mental harm results from mental or nervous shock suffered by the plaintiff, caused by harm or threat of harm to the victim. That was not this case: the respondent suffered pure mental harm as a result of an attack by a third party and, as he submitted, the negligent conduct of Optus, which either put him in the way of the attack, or failed to prevent him being subjected to the attack. It follows that s 30 has no application in this case. The critical provision is s 32 which applies to both pure mental harm and consequential mental harm and to harm caused directly to the plaintiff and harm caused to a third party victim which indirectly affects the plaintiff.
  3. The terms of Part 3 generally and s 32 in particular were addressed by the High Court in Wicks v State Rail Authority (NSW). [60] However, the plaintiffs in that case were police officers who had attended a train crash and undertaken rescue operations; their claims for damages for mental harm arose in connection with others being killed or injured. The defendant was the operator of the rail service. With respect to s 32, the Court noted that the provision operated as a necessary condition for a finding that the defendant owed a duty of care, without setting out other circumstances which might be relevant to the existence of such a duty. [61] While s 32(1) required that the negative condition be assessed according to “the circumstances of the case”, the High Court further noted that the circumstances identified in s 32(2) were matters to be taken into account and not themselves necessary conditions of the existence of a duty. [62] 
  4. In the present case, the matters set out in s 32(2)(b) and (c) appear to relate only to cases where there has been harm to a third party victim; the matters set out in pars (a) and (d) are relevant to the assessment in this case. It was common ground that any assessment of the harm suffered by the respondent required consideration of the pre-existing relationship between him and Optus, in accordance with par (d).
  5. With respect to par (a), the Court in Wicks explained the term “sudden shock” as referring “to an event or a cause.” [63] As it is not disputed that the respondent suffered mental harm as a result of the attack on him by Mr George, it does not matter whether or not the attack can properly be described as a “sudden shock” though the description may be available. The fact of the attack is undoubtedly a central circumstance of the case which must be taken into account in determining the existence of a duty. The elements of sudden shock and direct perception, contained in pars (a) and (b) of s 32(2) have at times been used as control devices limiting the availability of recovery for mental harm. Both applied in cases involving a third party victim. Their role as necessary requirements of liability was rejected by the High Court in Annetts v Australian Stations Pty Ltd, heard with Tame. [64] They add nothing to the analysis of the circumstances of the present case.
  6. The requirement that a reasonable person ought to have foreseen that a person of normal fortitude (that is mental or emotional fortitude), might suffer a psychiatric illness if reasonable care were not taken is an important factor to be considered. That is because different circumstances will give rise to different possible levels of mental harm in persons of normal fortitude: the nature of the possible consequences of the defendant’s actions will therefore be important.
  7. This exercise was not undertaken in considering the question of duty; it was, however, addressed in considering breach. Thus the trial judge stated: [65] 

“Accurate identification of the risk requires the adoption of the appropriate level of abstraction to the circumstances of the case. The risk here is not an assessment of the risk of injury to an employee from the criminal acts of third parties on the premises. Rather, the risk is the risk of George inflicting personal injury, including mental harm on Mr Wright in the circumstances actually known to Optus through its employees on 15 March 2001 before Mr Wright was requested to attend the roof to speak to George. It would amount to the adoption of a level of abstraction all too general in nature to pose the question ‘what is the chance of one call centre trainee assaulting another’, stripped of the circumstances actually occurring on 15 March 2001 before the assault took place.”

  1. With respect, that assessment may have been relevant to any question of negligence on the part of an employee, such as Mr Williams; it could only be relevant to the direct duty owed by Optus if it ought reasonably to have foreseen those particular circumstances. Although the judge identified, early in his analysis, a duty which required “establishing, maintaining and enforcing a safe system of work”, [66] the passage last quoted is consistent with a finding that no duty which satisfied s 32 arose in the circumstances of the case, or perhaps, as the latter passage came under the heading “Did Optus breach the duty owed”, to the extent that there was a duty, it was not breached.
  2. Furthermore, it would not have been sufficient to ask “what is the chance of one call-centre trainee assaulting another”, but rather it would be necessary to ask “was it reasonably foreseeable that one call-centre trainee might assault another in a manner which, although it caused no physical injury, might nevertheless be so serious as to lead to a psychiatric illness in a person of normal fortitude?”
  3. In this context, the trial judge referred to the evidence of a number of experts, including a psychiatrist, Dr Roberts, called by Optus, concluding: [67] 

“I can certainly accept that Optus in March 2001 was a large trading company having a national business and employing, whether directly, as independent contractors, or otherwise, large numbers of people. Such an employer, as opposed to a small business, might be expected to have greater access to expert consultants in devising its systems of work. However that may be, the situation that developed relating to George’s aberrant behaviour was, to say the least, on the evidence, unusual. It called for a relatively immediate response; it had to be dealt with ‘now’. That is how Mr Williams, who seemed to be in charge, perceived it. It is apparent that he consulted others within the company. It seems unrealistic to suggest, or expect, that he should, or would, have gone back to his desk to thumb through some manual to work out how to manage the situation. However one analyses the case otherwise, that contention, in my judgment, falls short of the standard of reasonableness.”

  1. That is an indication that, duty aside, there was no negligence on the part of Optus, based on the foreseeability of the actual events which occurred. Indeed, liability based on such general foreseeability, which might have required the development of procedures and protocols to address the risks, was expressly rejected: [68] 

“Section 5B applies to cases where the negligence is said to consist in the failure to take precautions against a risk of harm…. It is also important to focus on the suggested precautions given that the plaintiff carries the onus of proof. In the case at hand, they are:

(a)   adopting a policy for dealing with potential violence in the workplace that was made known to all staff and available to them in training manuals;

(b)   removing George from the premises; it was said either by way of security or police involvement; and finally

(c)   not putting Mr Wright in harms way by exposing him to George’s aberrant behaviour on the roof.

I have already rejected the idea that adoption of a policy of a publication of a training manual is reasonable and I will not deal with it further. I will deal with the remaining two options when I consider s 5B(1)(c).”

  1. The trial judge then referred to the various matters actually known to Ms Hedges and Mr Williams, including that Mr George “had absented himself from his training room where he was supposed to be; taken himself to the roof where he was not supposed to be at that time; was behaving in an aberrant manner, pacing and acting, in lay terms, as though he was psychotic or on drugs…”. [69] 
  2. It appears that an assumption was made about what Ms Hedges may have meant when describing Mr George as possibly “psychotic” or on drugs and as treating Ms Hedges as someone who knew or ought to have known that Mr George was dangerous, in circumstances where no such proposition was put to Mr Dee or Mr Williams, who spoke to Mr George before the incident and gave evidence. On this basis, finding that reasonable care required a combination of (b) and (c) above, the trial judge concluded: [70] 

“That is to say, George should have been removed from the premises, and until that was done no one, and especially not Mr Wright, the person for whom he had been asking, the only person in whom he expressed an interest, should have been permitted to go near him whilst he remained in a place of possible danger on the roof.”

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