Ward v Allianz Australia Services Pty Ltd [2019] NSWDC 293

The recent judgment in the matter of Ward v Allianz Australia Services Pty Ltd [2019] NSWDC 293 highlights a new trend and potential vulnerability for employers in the sphere of work injury damages, and confirms an employer can be found liable for an intentional tort, despite not being liable at negligence.

The facts:

Mr Ward alleged he was suffering from a range of psychiatric conditions including PTSD and depression. He claimed that his condition was materially caused by the bullying and harassment he experienced at the hands of his manager (Mr Smith) when he was employed by Allianz between 2003 and 2004. He alleged he was subjected to both verbal and physical abuse by Mr Smith.

Mr Ward lodged a claim for psychiatric injury. His claim in a statutory context was accepted and he suffered 22% WPI. He thereafter ace notice of intention to claim work injury damages.

The claim:

The thrust of the claim levelled against Allianz was:

1. That Allianz was liable for the intentional infliction of harm on Mr Ward by Mr Smith (the intentional tort) and/ or
2. That Allianz was liable for in negligence on two bases:
   1. firstly, on the basis that, in perpetrating the abuse on Mr Ward, Mr Smith failed to take reasonable care for Mr Ward’s safety; and secondly,
   2. that Allianz failed to take reasonable care for Mr Ward’s safety and well-being.

It was not disputed that the alleged bullying conduct of Mr Smith against Mr Ward occurred. Allianz defended the claim on the basis that:

1. the physical component of Mr Smith’s behaviour towards the plaintiff had no connection to Mr Smith’s role as manager.
2. it did not know that at the time that the plaintiff had been bullied, or that that conduct had had any impact on the plaintiff’s health.
3. that the plaintiff’s condition, and his subsequent inability to perform work, were caused by factors other than the bullying.

The outcome:

Intentional Tort: in order to succeed in the in the intentional tort, Mr Ward had to establish that  Mr Smith’s intentional conduct was calculated to cause him physical harm, being a psychiatric or psychological injury. His Honour Judge J Smith SC  was satisfied that as a result of Mr Smith’s stated purpose at Allianz and his conduct towards a number of managers, that such illness was a calculated outcome in the sense that Mr Smith was recklessly indifferent as to whether or not it occurred. His Honour also found that Allianz was liable for Mr Smith’s deliberate conduct.

Negligence: The Court found that  subject to only one matter, there were no signs given by the plaintiff of any impact, let alone the possibility of psychiatric damage, that might be caused by the conduct of Mr Smith during neither the 14 months that Mr Smith was there nor the remaining six years of his employment after Mr Smith’s departure.

In the absence of notice or a finding that Mr Smith was the defendant for the purpose of notice, I conclude that his conduct was not, itself, a breach of the defendant’s duty of care to the plaintiff. As such, Mr Wards claim in negligence failed.

Mr Ward was ultimately awarded damages in the amount of $1,394,421.91 together with interest and costs.

The upshot:

You may be asking yourself what the difference is between an intentional tort and negligence? Generally speaking, an intentional tort is when a person acts deliberately, while negligence is when a person (or entity) fails to act carefully. In short, the intent is the key difference.

The outcome of the decision in Ward is that it is likely Plaintiff’s will plead, at least in the alternative, an intentional tort a well as the usual allegations of negligence in bullying and harassment work injury damages cases, and this is something Employers will need to mindful of and plead to specifically in their defences. It is clearly not enough to submit that a bullying staff member was acting in a fashion that the employer did not sanction: it was enough in Ward that Mr Smith’s overall objective was authorised by his employer, even if his methods of achieving that objective were not.

Clear direction ought to be given to managers about not just what they do, but the manner in which they do it, in order to look to overcome this kind of issue in the future.

In the meantime we expect to see a rise in the pleading of intentional torts in such cases, which could operate to give rise to a greater liability to pay damages.

The material contained in this publication is in the nature of general comment only, and neither purports nor is intended to be advice on any particular matter. No reader should act on the basis of any matter contained in this publication without considering, and if necessary, taking appropriate professional advice upon their own particular circumstances.