High Court revisits Duty of Care in relation to Nervous Shock

by Jodi Norton

Gifford -v- Strang Patrick Stevedoring Pty Limited (2003) HCA 33

On 18 June 2003 the High Court delivered a judgment in three appeals which were heard together arising out of claims for damages for negligently inflicted psychiatric injury brought by the children of a man who was killed in an accident at work.

The appeals addressed the following questions:

1. Whether the man’s employer owed a common law duty of care to the man’s children to guard against the risk of psychiatric injury to the children after learning of the death of their father in a workplace accident;

2. If so, whether that duty was negated by section 4(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1944;

3. Whether section 151P of the Workers Compensation Act 1987 provides a separate and independent cause of action for nervous shock; and

4. Whether section 151P displaces the operation of section 4.

FACTS

The late Barry Gifford was employed by Strang Patrick Stevedoring Pty Ltd (“Strang”) as a Wharf Labourer. On 14 June 1990, he was crushed to death in a workplace accident when a large forklift vehicle reversed over him. At that time, the worker’s children were aged 14, 17 and 19.

Whilst the children resided with their mother following the separation of their parents in 1984, they maintained a close relationship with their father.

The children did not witness the accident although were informed of the tragedy later the same day. They were discouraged from seeing the deceased’s body due to the horrific nature of the injury. Strang admitted that its negligence caused the fatality.

The three children of the deceased sued Strang seeking damages in negligence for psychiatric injury in the form of nervous shock which they allegedly suffered upon learning of their father’s death.

THE DECISION AT FIRST INSTANCE

The claims brought by the children were dismissed by Naughton DCJ as a result of his interpretation of s4(1) of the Law Reform (Miscellaneous Provisions) Act 1944 which provides:

“1. The liability of any person in respect of injury caused after the commencement of this Act by an act, neglect or default by which any other person is killed, injured or put in peril, shall extend to include liability for injury arising wholly or in part from mental or nervous shock sustained by:

(a) a parent or the husband or wife of the person so killed, injured or put in peril; or

(b) any other member of the family of the person so killed, injured or put in peril where such person was killed, injured or put in peril within the sight or hearing of such member of the family”.

Naughton DCJ held that Strang had no liability since the children’s father had not been killed, injured or put in peril within their sight or hearing as required by subsection 1(b).

Naughton DCJ held that section 4 displaced the common law by substituting a statutory test. The children were unable to satisfy that test. Accordingly, the question of whether or not the children had suffered a recognisable psychiatric illness consequent upon being informed of their father’s death was not determined at trial.

THE COURT OF APPEAL

The children appealed to the New South Wales Court of Appeal.

Handley and Hodgson JJA, Ipp AJA held that:

  • Naughton DCJ erred in finding that section 4 covered the field in respect of claims for damages for nervous shock;


  • Section 4 does not negate the rights of the persons identified in the section to bring common law actions for nervous shock suffered as the result of harm or peril to a relative; and


  • Section 151P does not act as a separate and independent cause of action for nervous shock. That section provides:

    • No damages for psychological or psychiatric injury are to be awarded in respect of an injury except in favour of:
    (a) the injured worker; or
    (b) a parent, spouse, brother, sister or child of the injured or deceased person who, as a consequence of the injury to the injured person or the death of the deceased person, has suffered a demonstrable psychological or psychiatric illness and not merely a normal emotional or cultural grief reaction.

    Section 151P does not displace the operation of section 4 since it envisages the existence of a duty of care on the part of the employer to take reasonable care to avoid causing psychiatric injury to the persons referred to in the section. However, the Court of Appeal ultimately reached the same conclusion as Naughton DCJ and dismissed the appeal because the children had merely been told about the incident and did not directly perceive either the event that resulted in the death of their father or its aftermath. Strang was therefore held not to owe the children a duty of care at common law.

    SUBSEQUENT DEVELOPMENT

    The High Court subsequently delivered a joint judgment in Tame v. New South Wales (2002) 76 ALJR 1348 (“Tame”) and Annetts v. Australian Stations Pty Limited (2002) 191 ALR 449 (“Annetts”).

    In Tame and Annetts, the High Court held that direct perception of an incident or its aftermath is not, in all cases, a necessary aspect of a claim for damages for a negligently inflicted psychiatric injury.

    THE HIGH COURT

    In view of the decision in Tame and Annetts, the High Court determined that it would be necessary to reconsider the claims of the children.

    The essential issue for consideration by the Court was whether an employer’s duty to tak e reasonable care for the safety of an employee during the course of employment includes a separate duty to the employee’s children to protect them from suffering nervous shock by reason of a breach of the duty owed to the employee.

    In a unanimous decision, the High Court overturned the decision of the Court of Appeal and held that Strang owed a duty of care to the children.

    The interpretation of section 4 by the Court of Appeal was upheld.

    The High Court found that:

  • It does not necessarily follow from Tame and Annetts that reasonable foreseeability of mental harm is the only precondition for the existence of a duty of care;


  • The importance of the relationship between parent and child satisfies the requisite degree of proximity;


  • Strang had direct control over the deceased’s conditions of work, a significant degree of control over the risk of harm to the deceased, and therefore control over the risk of consequent psychiatric harm to the children;


  • The children had no way of protecting themselves against the risk of psychiatric harm;


  • The duty of care was, at most, co-extensive with the tortious and express or implied contractual duties it owed the deceased directly as his employer; and


  • The pre-existing relationships between the three parties (employer, employee and children), together with reasonable foresight of the particular harm suffered, required the conclusion that a duty of care was owed by Strang to the children.


  • The High Court set aside the orders of Naughton DCJ and remitted the matter back to the District Court for determination of the issue of whether or not the children actually sustained a recognisable psychiatric injury upon being told of their father’s death.

    COMMENT

    The decision of the High Court has significant ramifications for employers and their insurers. In clear terms, the High Court has held that a separate duty exists for employers to contemplate the risk of psychiatric injury to an employee’s children and to therefore take reasonable care to guard against injury. It found that children, as a class of people, form a category who might be expected to be at real risk of the kind of injury in question.

    It may well be that the duty is even wider in view of the comments made by McHugh J that, in a claim for nervous shock at common law, an employer owes a duty of care “to all those with whom the victim has or had a close and loving relationship”. He stated:

    “It is the closeness and affection of the relationship - rather than the legal status of the relationship - which is relevant in determining whether a duty is owed to the person suffering psychiatric harm. The relationship between two friends who have lived together for many years may be closer and more loving than that of two siblings......In a claim for nervous shock at common law, the reasonable foresight of the defendant extends to all those with whom the victim has or had a close and loving relationship”.

    While the judgment comes as a surprise to many, the result was not unexpected by those familiar with the suggestion in Coates v GIO of New South Wales (1995) 36 NSWLR 1 that the position might one day arise where being advised by mobile phone of an accident would represent sufficient connection to a death to give rise to a valid nervous shock claim - comments made by Kirby P, as he then was.


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