INSIGHTS: When is a duty of care owed in mental harm claims?

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

Facts: Glenn Wright (the ‘plaintiff’) claimed damages for psychological injury as a result of an attempt by Nathaniel George to murder him by throwing him from a roof balcony. The plaintiff sued Optus as the occupier of the premises at which the attempted murder occurred, and the entity responsible for conducting the training course on which he was engaged at the time he suffered injury.

Both the plaintiff and Mr George were attending a training course for prospective call centre staff at Optus’ premises. The plaintiff was placed in the training course by a labour hire company, IPA Personnel. Mr George was placed in the training course by a different labour hire company, Drake Personnel. The course was conducted by an Optus employee, Ms Hedges, on the ground floor. The plaintiff and Mr George were unknown to each other before the training course commenced on 12 March 2001. After the course commenced, Mr George formed the desire to kill someone, and on the evening of 14 March 2001, he randomly settled on the plaintiff as his intended victim.

At about 9:30 am on 15 March 2001, Mr George, having left the training course on the ground floor, was found in an unauthorised place on the roof balcony on the fourth floor of Optus’ premises. Ms Hedges reported the incident to her superior, Mr Williams, who was also employed by Optus. Mr Williams went with Mr Dee, another employee of Optus, to the roof balcony and observed Mr George to be unresponsive, appearing to be in a trance-like state, and repeatedly asking for ‘Glenn’ while pacing up and down the roof balcony near a waist-high railing.

The plaintiff reluctantly complied with a request from Mr Williams (communicated via Ms Hedges) to provide his assistance. The plaintiff left the ground floor to attend the roof balcony. Mr Williams asked the plaintiff whether he had supplied drugs to Mr George, to which the plaintiff answered, ‘no’. Mr Williams then left the balcony in order to report to Optus senior management, who instructed Mr Williams to make arrangements for Mr George to be removed from the premises by Drake Personnel.

Whilst Mr Williams was gone, the plaintiff approached Mr George while Mr Dee and Ms Hedges observed from around 15 metres away. After encouraging the plaintiff to go close to the balcony railing, Mr George attempted to lift the plaintiff off his feet and throw him from the balcony, while also punching and hitting him. Mr Dee intervened and restrained Mr George, allowing the plaintiff to escape.

As a result of the incident, Mr Wright sustained minor, non-compensable, physical injuries. He developed chronic severe post-traumatic stress disorder.

Decision at first instance

The primary judge, Campbell J, found:

The relationship between Optus and the plaintiff was analogous to that of employer and employee, even though the plaintiff and Mr George were both employed by labour hire companies that had supplied their services to Optus.

Optus’ duty of care to the plaintiff extended to taking reasonable care to protect him from the criminal acts of others in the workplace.

In relation to the requirement in s 32 of the Civil Liability Act 2002 (NSW) (‘CLA’) that the prospect of a person of normal fortitude suffering pure mental harm must be reasonably foreseeable, it was reasonably foreseeable that Mr George may assault the plaintiff when he was brought to him, and that a person of normal fortitude might suffer a recognised psychiatric illness if reasonable care was not taken.

The relevant risk of harm was the risk that Mr George might inflict personal injury on the plaintiff, including mental harm, in the circumstances actually known to Optus employees, in particular Mr Williams and Ms Hedges, before the plaintiff was asked to attend the level four balcony.

The risk was not insignificant, and a reasonable person in Optus’ position would not have put the plaintiff in harm’s way by exposing him to Mr George’s aberrant behaviour. In that regard, a reasonable person in the position of Optus would:

• Not have permitted the plaintiff to go near Mr George on the roof;
• Have called the police to remove Mr George from the premises, if he did not comply with directions given to him by Drake representatives.

Damages were awarded in favour of the plaintiff in the sum of $3,922,116.09.

Issues on appeal

1. Whether Optus owed any relevant duty of care to the plaintiff not to cause him mental harm. In particular, whether the foreseeability requirement in s 32 of the CLA was satisfied – that Optus ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care was not taken;
2. Whether Optus breached any duty that it owed to the plaintiff;
3. Whether the reasonable response to the risk of harm to the plaintiff was to remove Mr George from the premises and not to allow other workers to approach him before his removal;
4. Whether Optus was vicariously liable for the conduct of Mr Williams or Ms Hedges.

There was also a challenge by Optus in relation to the amount of damages awarded to the plaintiff. That challenge is not considered in this article, as the majority of the Court of Appeal did not determine it (as they found Optus was not liable).

Decision by majority – Basten JA (Hoeben JA agreeing)

Section 32 of the CLA provides:

32  Mental harm—duty of care

(1)  A person (the defendant) does not owe a duty of care to another person (the plaintiff) to take care not to cause the plaintiff mental harm unless the defendant ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken.

(2)  For the purposes of the application of this section in respect of pure mental harm, the circumstances of the case include the following:

(a)  whether or not the mental harm was suffered as the result of a sudden shock,

(b)  whether the plaintiff witnessed, at the scene, a person being killed, injured or put in peril,

(c)  the nature of the relationship between the plaintiff and any person killed, injured or put in peril,

(d)  whether or not there was a pre-existing relationship between the plaintiff and the defendant.

(3)  For the purposes of the application of this section in respect of consequential mental harm, the circumstances of the case include the personal injury suffered by the plaintiff.

(4)  This section does not require the court to disregard what the defendant knew or ought to have known about the fortitude of the plaintiff.

On the issue of whether Optus owed the plaintiff a duty of care, Basten JA firstly took issue with the way in which the primary judge considered general principles prior to considering s 32 of the CLA. In applying general principles, Campbell J applied principles espoused in Modbury Triangle Shopping Centre Pty Ltd v Anzil ([2000] HCA 61) (Modbury). In doing so, Campbell characterised the general duty owed as personal or non-delegable. The result was an attribution of knowledge to Optus arising from the combined knowledge of its various employees.

Basten JA found that this approach was erroneous, and that there was no authority for 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. Rather, the knowledge of the employees was directly relevant in establishing negligence on the employees’ part for which the company might be vicariously liable (ibid at [52] and [72]). Accordingly, his Honour was of the view that the primary judge had impermissibly aggregated the knowledge of various employees and then attributed that knowledge to the corporate employer (Optus) for the purpose of demonstrating negligence on Optus’ part.

In Basten JA’s view, the plaintiff did not establish that Optus owed him a duty of care with respect to mental harm satisfying the requirements of s 32 of the CLA. His Honour found that the critical step in determining the scope or content of any duty owed by Optus to the plaintiff required identification of the risk of particular events which might give rise to mental harm. In a case where the mental harm resulted from an attack by a third party upon the plaintiff, his Honour considered that it was important to identify with care the nature of the conduct which Optus should have foreseen. In Basten JA’s view (with Hoeben J agreeing), it was only an assault intended to put the plaintiff’s life in peril, i.e. an attempt to kill or violently assault him (ibid at [97]), which Optus ought to have foreseen might cause a person of normal fortitude to suffer a psychiatric illness.

Accordingly, the majority formulated the risk of harm more narrowly than the primary judge.

His Honour (and Hoeben J) found that the evidence did not establish that the risk of harm was foreseeable, notwithstanding it was accepted that Mr George appeared to be on drugs, was unresponsive, vacant, in a trance like state, completely incoherent, pacing on the roof balcony, and psychotic (although it was in issue whether Ms Hedge used that term when speaking with the plaintiff) (ibid at [23]).

On the issue of Optus’ breach of duty on the basis of vicarious liability, Basten JA found that the evidence established that all three Optus employees acted responsibly and reasonably (ibid at [89]), thus the plaintiff did not establish breach of duty on the employees’ part. His Honour was of the view that to conclude that no person should have been permitted to approach Mr George (in circumstances where Ms Hedges, three other young women and two men had spoken with him or been near him with no apparent threat to them) or, finally, that the one person he had asked to speak to should not have been allowed to speak to him, bore the hallmarks of impermissible hindsight reasoning (ibid at [96]).

Dissenting decision – Gleeson JA

Gleeson JA was of the view that when Mr George was found, unauthorised, on the roof and refusing to obey reasonable instructions and directions from persons Optus had placed over him, Optus had the power to control the movement of other persons in the training course on the ground floor, including the plaintiff, and to keep those persons from being exposed to the unfolding situation on the roof. His Honour determined that Optus owed the plaintiff duty to take reasonable care to avoid exposing him to unnecessary risk of injury by persons on its premises apparently affected by drugs and behaving in an aberrant manner (ibid at [244]). In doing so, Gleeson JA found that the risk of harm was the risk that a person behaving aberrantly may inflict personal injury on the plaintiff in proximity to the edge of the roof (ibid at [251]). Thus, his Honour’s formulation of the risk of injury (or harm) was significantly broader than the majority.

As to breach, Gleeson JA determined that it was reasonably foreseeable that a person found on a roof, unauthorised, behaving as though severely affected by drugs, and disobeying instructions and directions from his workplace supervisors, might harm himself or others who came in proximity to him at or near the balcony edge (ibid at [260]). In light of that finding, his Honour agreed with the trial judge as to the first precaution Optus ought to have taken, namely, that it ought not to have permitted the plaintiff to go near Mr George on the roof.

On the issue of vicarious liability, Gleeson JA appears to have agreed (ibid at [280]) with the majority that there is no authority for the proposition that an aggregation of knowledge of various employees can be attributed to the corporate employer for the purpose of demonstrating negligence on its part. His Honour found that whilst the plaintiff had not specifically pleaded vicarious liability due to the negligence of Mr Williams, given the way in which the case had been run, it was appropriate to find that Optus was vicariously liable for Mr Williams’ negligence.

Implications

1. There is no authority for 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. Rather, the knowledge of the employees is relevant in establishing vicarious liability. Vicariously liability involves a consideration of whether there has been a breach of duty resting upon the employee.
2. The appropriate, and early, formulation of the risk of harm is critical in matters to be assessed under the CLA (including matters involving s 32). As noted by Hoeben JA (ibid at [100]), it is important to identify with some precision the nature of the conduct which the defendant should have foreseen. Doing so is, however, not always an easy task, as this case shows.
3. The assessment of whether there has been a breach of duty is to be addressed prospectively. The court will be acutely aware of any attempts to argue breach of duty by using impermissible hindsight reasoning.
4. The case also serves as a reminder that Modbury does not stand for the proposition that no duty of care can be owed by an occupier to an entrant in relation to the criminal conduct of third parties. A central element in determining whether a duty of care is owed in such circumstances is whether the occupier had a capacity to assert control over third parties.

Appeal to the High Court

We understand the plaintiff has applied to the High Court for special leave to appeal. We also understand that the appeal will be focused on the proper identification of the risk of harm, and foreseeability.

In our view, it is quite arguable that the majority of the Court of Appeal formulated the risk of harm too narrowly. On that basis there must be some prospect of the appeal succeeding.

Written by: Robert Crittenden, Principal & Lachlan Heather, Senior Associate. This article was first published in Lexis Nexis Australian Civil Liability journal, issue 14, number 4, June 2017.