Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Miskovic v Stryke Corporation Pty Ltd t/as KSS Security [2011] NSWCA 369 Hearing dates: 30/08/2011 Decision date: 30 November 2011 Before: Giles JA at 1, Macfarlan JA at 6, Handley AJA at 7 Decision: Appeal dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: NEGLIGENCE - employer and employee - psychiatric injury from performance of work - not foreseeable - employer not liable APPEAL & NEW TRIAL - errors by trial Judge - not material - no substantial wrong or miscarriage Legislation Cited: Civil Liability Act 2002, ss 5C and 5D Workers Compensation Act 1987, s 9A Cases Cited: Davis v Langdon (1911) 11 SR(NSW) 149 March v E&MH Stramare Pty Ltd (1991) 171 CLR 506 Koehler v Cerebos (Aust) Ltd (2005) 222 CLR 44 McAllister v Richmond Brewing Co (NSW) Pty Ltd (1942) 42 SR (NSW) 187 Seaton v Burnand [1900] AC 135 Category: Principal judgment Parties: (A) - Zoran Miskovic (1st R) - Stryke Corporation Pty Ltd t/as KSS Security (2nd R) - Workers Compensation Nominal Insurer Representation: (A) - D E Baran (Rs 1&2) - L King SC (A) - NSW Compensation Lawyers (1st R) - Makinson & D'Apice (2nd R) - Turks Legal File Number(s): CA 08/289632 Decision under appeal Citation: [2010] NSWSC 128 Date of Decision: 2010-04-19 00:00:00 Before: Rothman J File Number(s): SC 20511/2008 HEADNOTE The appellant sustained psychiatric injury as a result of working for the respondent as a security guard patrolling business premises in North Sydney at night. The trial Judge dismissed his action for damages against the respondent as employer because the psychiatric injury had not been foreseen and was not foreseeable applying Koehler v Cerebos (Aust) Ltd (2005) 222 CLR 44. The appellant had been trapped in a lift in a customer's premises for some 3 1/2 hours without being able to communicate with his base. He had panicked and experienced great distress. The system which was later adopted for regular calls from base would have reduced the time he was trapped. The trial Judge found that the respondent had been negligent is not having that system but this was not a cause of the psychiatric injury because it had already been suffered. The improved system would not have prevented the appellant being trapped or made a difference to the outcome. The respondent's negligence was therefore not a "substantial contributing cause" of the psychiatric injury. The appellant sought a new trial on the ground the Judge had misdirected himself by referring to ss 5C and 5D of the Civil Liability Act 2002 and to "substantial cause" and "substantial contributing factor" and not the common law test of material contribution as required by March v E&MH Stramare Pty Ltd (1991) 171 CLR 506, 514. HELD: Dismissing the appeal: (1) Although the Civil Liability Act did not apply to actions against employers the Judge's reference to it were not material: (2) His finding that the lift incident and the breach of the respondent's duty had not caused or substantially contributed to the appellant's psychiatric injury should not be disturbed; (3) There had been no substantial wrong or miscarriage within UCPR Pt 51 r 23(1). Judgment 1GILES JA : Subject to what follows, for the reasons given by Handley AJA the appeal should be dismissed. 2The only breach of duty found against the respondent was its failure to have a system of regular safety calls to check on an officer's welfare and whereabouts. No basis has been made out for deficiency in the trial judge's reasons for his findings in those respects or the findings themselves. 3The breach of duty, however, was irrelevant to the psychiatric injury, first because his Honour found that the psychiatric injury for which the appellant claimed damages had "already been precipitated" (although unknown to the respondent) prior to the lift incident material to the breach of duty; and secondly because his Honour found that the system, if in place, would not have "ameliorated" any contribution made by that incident to the appellant's psychiatric condition: that is, that his condition would have developed as it did in any event. 4As Handley AJA points out, any error in referring to s 5C or 5D of the Civil Liability Act 2005 is immaterial. I would prefer not to join in what his Honour says concerning the judge's references to "substantial cause" and similar phrases, but for the reasons in the preceding paragraph any error in that respect is also not material. 5I agree with the orders proposed by Handley AJA. 6MACFARLAN JA : Subject to the observations of Giles JA (with which I agree), I agree with Handley AJA. 7HANDLEY AJA : This is an appeal by the plaintiff from judgment for the defendant entered by Rothman J in an industrial injury case. 8The plaintiff suffered what used to be called a nervous breakdown during his employment which was exacerbated by an incident at work when he was trapped in a lift for some hours on the night 7/8 April 2001. He had some time off before returning to work but continued to have difficulties and finally left his job sometime in June 2001. 9The plaintiff's psychiatric illness was diagnosed as a Major Depressive and Obsessive Compulsive Disorder. He is unable to work and has not done so since he left the defendant's employment. 10He sued his employer for damages alleging that his psychiatric illness was caused by his work and the employer was in breach of its duty to provide a safe system. The case attracted the principles in Koehler v Cerebos (Aust) Ltd [2005] HCA 15; 222 CLR 44. Rothman J held that the employer had not been aware of the plaintiff's difficulties and his psychiatric illness had not been caused by any breach of its duty: [2010] NSWSC 128. 11In May or June 1999, at the age of 19, the plaintiff commenced working for the defendant as a security guard. He was then a fit young man who had been trained in martial arts. He attended an external training course for two weeks to obtain his licence and had two weeks on the job training with a number of security guards employed by the defendant. 12He was allocated an area in the North Sydney business district that he had to patrol during the night. He did this on foot because he did not have a driver's licence. He initially worked 5 nights a week from 7:30 p.m. to 3:30 a.m. 13In November 1999 the plaintiff's shift was extended to 4:30 a.m. In July 2000 it was extended for another hour. In October 2000 his roster was altered to 10 nights on and 4 nights off. In December 2000 four more buildings were added to his roster, and in March 2001 his shifts were extended to 11 1/2 hours from 6 p.m. to 5:30 a.m. The Judge found that these increases occurred with the plaintiff's consent, because he requested "as many hours of work as possible" [18]. 14The plaintiff gave evidence that he had to walk very fast or run to complete his rounds and could not take a break. He said he became very stressed when he got behind with his work. The Judge did not accept this evidence but found that, apart from special occasions such as the events of 7/8 April 2001 "there is no evidence that [the plaintiff] ever failed to complete the work assigned to him" [26]. He also found [26], [43] the plaintiff "acting reasonably could have comfortably finished the work in each shift and still had breaks". 15The plaintiff gave evidence that break and enter incidents in buildings on his rounds increased after March 2001 [33] and that in June there were two to three alarm responses a week [24]. The Judge rejected this evidence [33]. 16On the night of 7/8 April 2001 the plaintiff found himself trapped in a lift at 56 Berry St. The emergency telephone in the lift was out of order and his two-way radio would not work, possibly because the lift was below ground level. The plaintiff panicked [34]-[35]. He said he was stuck in the lift for 8 1/2 to 9 hours [35]-[36], [48]. The Judge accepted other evidence and found that he had been trapped for 3 1/2 hours [48]. 17The plaintiff developed symptoms of his psychiatric illness during March 2001 [77]. He had difficulty sleeping, had stomach cramps and was very nervous at work. His symptoms were aggravated when he was required to deal with break and enters [30]. 18The plaintiff reported for duty the night after the incident in the lift on 7/8 April, but left early. He was not feeling well, was nervous, had stomach cramps and felt frightened. He reported to his supervisor who told him to take five days' leave and have a rest. On his return to work he continued to be frightened, sweated a lot and was shaking and shivering. He could not finish his roster. 19The Judge found that the plaintiff's evidence was unreliable [40]-[43], and where there was any conflict in the evidence he accepted that given by the witnesses for the defendant. 20He concluded in [73] (see also [48]): "... there were not, prior to 9 April 2001, any outward signs of Mr Mr Miskovic's psychiatric injury, or his predisposition thereto. Nor was there anything inherent in the work, the workload or the system of work that gives rise to, or would render foreseeable, any risk of sustaining psychiatric illness. The Court concludes that a reasonable person in the position of [the defendant] would not have foreseen the risk of sustaining a recognizable psychiatric illness to [the plaintiff] or anyone else ...". 21The joint report of the medical experts concluded that the plaintiff's condition had a constitutional component (red 42 O), that his employment was a substantial contributing factor in causing his psychiatric condition (red 41 U, 42 G, 43 E, 43 Q), and "but for" the work injury he would not have developed his psychiatric illness (red 42 X). 22The report which answered a Schedule of Questions (red 41 G) was tendered by senior counsel for the plaintiff and admitted without objection (black 140). Unsurprisingly in these circumstances the Judge found [65] that the plaintiff's employment was a substantial cause of his psychiatric injury and a substantial contributing factor to his mental condition. 23The plaintiff's case at trial that remains relevant on appeal is that he was unreasonably overworked and this precipitated his psychiatric injury [68]. This case failed because the Judge found [26], [43] that the plaintiff acting reasonably could have comfortably finished his shift and still have breaks. 24The Judge also found [75] that the defendant's system of work did not deal with the risk that persons with criminal intent might wait for a security guard to obtain access to the premises, or might accost a guard inside, or that a guard might become trapped in the lift or behind a self-closing door. After the incident in the lift on the night 7/8 April 2001 the defendant's system was changed to include a regular safety call to each security officer to check on his welfare and whereabouts. 25The Judge said that this was not evidence that the previous system was negligent "for which principle now see s 5C of the Civil Liability Act 2002" (the Act) but it was evidence of "a simple, inexpensive means of checking on the safety of personnel" and he concluded [76] that the defendant had been negligent in not having that system in place before 7 April. 26He held however that this negligence had not caused the plaintiff's psychiatric injury which had been "precipitated" by March. He said that the negligence "was not a necessary condition of the occurrence of the harm" and referred [77] to s 5D(1)(a) of the Act. 27He continued [78]: "It is necessary to deal more fully with the factual causation issue. Even if the test on causation were not defined by the ... Act there would be a want of causal connection." 28The Judge said [79] "the expert medical evidence does not suggest that the lift incident was the cause of his disability", and [80] that "the psychiatric illness was manifest well before 7 April 2001. If the lift incident was 'the last straw' it was not, on the evidence, a substantial contributing factor." 29An additional reason, for finding that causation had not been established was that [83]: "... the existence of a safe system involving security or welfare calls to [the plaintiff] at regular intervals would not have prevented [him] from being trapped in the lift. It would ... have shortened the period during which [he] was in the lift, but it would not have eliminated it ... Given his sense of panic and the perception that of the lift had been sabotaged, a lesser period (no matter how short) in the lift would not, it seems, have ameliorated the injury. " 30The appeal must be determined in accordance with the principles in Koehler v Cerebos ( Aust ) Ltd (above). The plurality said at [20], [22], [27], [35], [41]: "... this case may be decided ... at the level of breach of duty, on the basis that the risk of psychiatric injury to the appellant was not reasonably foreseeable ... What is important is that questions of the content of the duty of care, and what satisfaction of that duty may require, are not to be examined without considering the other obligations which exist between the parties ... There are two reasons why the Full Court was right to reach the conclusion it did. First, the appellant agreed to perform the duties which were a cause of her injury. Secondly, the employer had no reason to suspect that the appellant was at risk of psychiatric injury ... The duty which an employer owes is owed to each employee. The relevant duty of care is engaged if psychiatric injury to the particular employee is reasonably foreseeable ... that invites attention to the nature and extent of the work being done by the particular employee and signs given by the employee concerned ... Here there was no indication (explicit or implicit) of any particular vulnerability of the appellant." 31The Judge applied these principles, and error in their formulation or application was not alleged. Nor did the plaintiff challenge the primary findings. Instead counsel relied on the Judge's references to the Act, which did not apply because of the exclusion for industrial claims in s 3B(1)(f). It was submitted that these errors entitled the plaintiff to a new trial. 32The first of the references was in [76] where the Judge said that the change of system after the incident on 7/8 April "does not render the previous system negligent: for which principle now see ss 5C of the ... Act." The principle referred to in s 5C(c) is not new. In this State it dates from Davis v Langdon (1911) 11 SR(NSW) 149. Any error in saying "now see s 5C" was not material for two reasons. The previous law was the same, and the Judge found negligence. 33The second reference was in [77] where the Judge said: "The negligence was not a necessary condition of the occurrence of the harm: s 5D(1)(a) ... and see also Adeels Palace Pty Ltd v Moubarak [2009] HCA 48, 239 CLR 420 at [45] etc." 34Moubarak was decided on s 5D(1)(a) and the Court said at [44]: "It is not necessary to examine whether or to what extent the approach to causation described in March v Stramare might lead to a conclusion about factual causation different from the conclusion that should be reached by applying s 5D(1)." 35The Judge found [77], independently of s 5D(1)(a), that the negligence in question "did not cause the injury" because it had already been suffered. He added [78]: "Even if the test on causation were not defined by the ... Act there would be a want of causal connection." 36The judge found [80] that the incident on 7/8 April "was not ... a substantial contributing factor", and [82] that "the contribution of the incident to the injury would not have been substantial." 37Section 5D(1)(a) provides: "(1) A determination that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the occurrence of the harm (factual causation) ...". 38This replicates the preliminary "but for" test at common law which, as Mason CJ said in March v E&MH Stramare Pty Ltd [1991] HCA 12; 171 CLR 506, 515-6: "... applied as a negative criterion of causation, [it] has an important role to play in the resolution of the question." See also per Deane J at 522. The qualifications that may be required at common law for the "but for" test of causation can have no application where the Judge found that the plaintiff suffered his psychiatric injury before the incident of 7/8 April. An event cannot be the cause of something that occurred before. 39Moreover for two reasons given by the Judge any error in this respect was immaterial. The Judge considered causation under the general law [78] and found that it had not been established. He also found [83] that the new system would not have prevented the plaintiff being trapped in the lift and any reduction in the time he was there would have made no difference. 40A third reason was formulated by Giles JA during argument [T 20], namely that the negligence found "goes nowhere in the absence of the employer having reason to suspect that the plaintiff was at risk of psychiatric injury." 41The final submission of counsel for the plaintiff was that the Judge's references to "substantial cause" in [65], "the cause" [79], "a substantial contributing factor" [80], and "not ... substantial" [82] showed that he was applying the requirement in s 9A of the Workers Compensation Act 1987. 42The common law test of causation, in a case such as this, as Mason CJ said in March v Stramare (above) at p 514 is satisfied if the plaintiff's injury was "caused or materially contributed to by the defendant's wrongful conduct." 43In my judgment there is no appreciable difference between a material contribution and a substantial one and if there is the error did not occasion a substantial wrong or miscarriage within UCPR Pt 51 r 23(1). 44There is another reason for refusing to order a new trial on this ground. The source of the references complained of was not s 9A of the 1987 Act but the Schedule of Questions submitted to the psychiatrists and their joint report (red 41-44). 45The source of the questions is not disclosed but the Court can safely infer that they were settled by the legal advisers, and almost certainly by senior counsel. Questions 2(b), (c), 3(a), (b), 4(a), (b) and (c) asked the experts to comment on the factors which caused or contributed to the plaintiff's psychiatric condition. The questions do not mention a material contribution but otherwise they invoked the common law test of causation. 46The experts answered question 2(c) which asked "To what extent did the plaintiff's employment contribute to his condition" by saying that it "contributed significantly". They answered question 3(a) by saying his work was "a substantial factor" and question 3(b) by saying that it was "a substantial contributing factor". 47Counsel for the plaintiff tendered the report, and it was admitted without objection. All parties invited the Judge to act on the report and treat the answers as material. 48In these circumstances the Court should apply the principles developed in civil jury trials. If counsel had agreed on the questions to be submitted to the jury the unsuccessful party could not obtain a new trial for the purpose of submitting other questions to another jury: Seaton v Burnand [1900] AC 135, at 143 per Lord Halsbury LC, and at 144-5 per Lord Morris; McAllister v Richmond Brewing Co (NSW) Pty Ltd (1942) 42 SR (NSW) 187, 197 per Davidson J. 49In this case the questions were agreed and the answers were treated as relevant. The Judge acted on the report and adopted its language. This provides no basis for a new trial. In my judgment the appeal fails and should be dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 November 2011