Dear Colleagues;

The High Court of Australia has handed down a decision today, Kozarov v Victoria [2022] HCA 12 (13 Apr 2022) https://eresources.hcourt.gov.au/downloadPdf/2022/HCA/12 dealing with a claim in negligence for psychological harm caused by workplace decisions. The court overturns the decision of the Victorian Court of Appeal and reinstates a verdict in favour of the plaintiff from the trial judge.

The facts are that Ms Kozarov worked as a prosecutor in a branch of the DPP dealing with serious sexual offences involving children. She was (like her colleagues) regularly exposed to horrific and graphic matters. She expressed concerns about the impact on her mental health during the course of 2011, and this came to a head in an incident in August 2011 involving a clash with a supervisor. Following that incident she suffered the effects of PTSD and was later dismissed. The trial judge found that the employer, the State of Victoria, had a duty of care which it had breached by not putting in place measures to help her cope, and in particular that in August 2011 she should have been offered a chance to rotate to another area, which the judge said she would have accepted. Victoria disputed this, saying she was so committed to work in the area she would not have accepted even a temporary rotation. The CA agreed with the State on that issue and found that causation of harm had not been established.

There is a full 7-member bench in the High Court- I presume this is because one of the issues identified at an early stage was whether the previous decision in Koehler v Cerebos (Australia) Ltd [2005] HCA 15; (2005) 222 CLR 44 should be over-turned. By way of brief background, Koehler was a somewhat similar case where the employee lost at the High Court- but the nature of the employment was quite different, as Ms Koehler was a travelling sales representative rather than an officer involved with child abuse matters. (It should be noted that many think that Koehler was a pretty tough decision in any case.)

Here there are four separate judgments which all agree in the outcome but with slightly different emphases: Kiefel CJ and Keane J (KK); Gageler and Gleeson JJ (GG); Gordon and Steward JJ (GS); and Edelman J.

Without spelling out all the nuances, I make some brief comments on the different approaches.

KK are the only members of the court who deal in detail with Koehler. They say that this prior case was primarily about “the extent to which reasonable care for the mental health of an employee may require the employer to be alert for signs that, by reason of the exigencies of the employee's work, the employee is at risk of mental illness”- [2]. But here there was no debate that Victoria did indeed need to be concerned about employee mental health (the work itself creating a clear risk), and indeed the DPP had a policy for these matters (which on the evidence was not complied with). So Koehler can be distinguished as in that case it was not clear that the employer was “on notice” of the risks.

As they say at [6], “the circumstances of a particular type of employment may be such that the work to be performed by the employee is inherently and obviously dangerous” to mental health, and this was such a case. There was an undoubted duty here, and indeed there seems to have been earlier breach.

They do note however that it was not a strong “warning sign” of serious problems that the plaintiff had, along with other colleagues, signed a letter complaining of overwork and its possible effect on mental health- see [14]:

 

A demand by employees for a reduction in their workload may or may not be a reasonable demand as a matter of industrial relations; but, of itself and however intemperate the terms in which such a demand might be made, it would not, in general, reasonably be understood by the employer as an indication that the employees are suffering, collectively or individually, impairments to their mental health. The contrary view would make the robust bargaining that is a familiar feature of industrial relations in Australia an occasion of peril for all concerned. 

 

Still, here there was a breach when other events were considered. As they generally agree with GG they do not comment on other issues.

GG provide a detailed overview of the facts. They note that two major issues of fact that needed to be resolved were the “notice” issue (was the State on notice of possible problems) and the “rotation” issue (would the plaintiff have accepted a rotation if offered.) They say at [49] that there is an accepted policy that the HCA will not overturn “concurrent findings of fact in the absence of special reasons such as plain injustice or clear error”. There were concurrent findings of the trial judge and the VSCA that there was notice, and they say no clear error in that finding. But on the “rotation” issue they revisit this (since the CA disagreed with the trial judge) and conclude that the CA was wrong, and restore the judge’s finding in favour of the plaintiff- see [59]-[61].

GS note that causation was the key issue here- at [65]. It had been generally accepted that there was a breach and the “rotation” issue was about the counterfactual of what would have happened if the proper offer had been made. (They reject Victoria’s notice of contention challenging the finding of “notice”.) After a brief review of duty and breach, they note at [92[ that: “Contrary to what the Court of Appeal found, Ms Kozarov would have co-operated and her exposure to trauma would have been reduced.”

Edelman J generally agrees with GG, but has some interesting comments on how duty of care in the workplace should be approached. These two paragraphs in particular raise some fascinating questions:

 

100 At a high level of generality, the duties that arise in the law of torts fall into two categories: (i) those that arise by "a voluntary undertaking independent of contract"58 based upon "an assumption of responsibility"59; and (ii) those that are imposed, independently of any undertaking, by a statutory or common law rule. 

101 An employer's duty of care to prevent psychiatric injury to an employee can arise in either or both categories. If the duty arises by an undertaking based on an assumption of responsibility, express or implied, then neither the existence nor the content of the duty can "be considered without taking account of the obligations which the parties owe one another under the contract of employment"60. The "affinity between tort and contract here is strong"61. The contract might define the entirety of the undertaking or it might shape the content of the undertaking. The undertaking can be more or less extensive than the duty not to cause psychiatric injury that is separately imposed by law. 

 

Here he said that the duty being discussed was an “imposed” one, not an “assumed” one. That is, it was not relevant to dig into the contract between the State and Ms Kozarov. (The focus on the contract had been one of the issues in Koehler, which after this case may now be distinguished on this point in future.) The rest of the analysis proceeds in an orthodox way to comment on breach (and the “calculus” of breach) and causation, seen here as “but for”- see [106]. All these had been established.

 

Regards

Neil