Worker awarded $1,394,421.91 damages following a successful common law damages claim of intentional tort (intentional act) as a result of suffering a psychiatric condition including PTSD and depression that developed as a result of bullying and harassment by a manager. Ward v Allianz Australia Services Pty Ltd [2019] NSWDC 293 (5 July 2019)
Facts
Mr Ward started working for Allianz immediately after school and never worked anywhere else. By 2003 he was an accounts manager. At that time a new State Manager, Mr Smith, was appointed by Allianz to managed about 100 employees including Mr Ward.
Mr Smith was an aggressive manager. On many occasions he yelled at Mr Ward, telling him he was hopeless at his job, berating him for some aspect of his work and telling him that the brokers all thought he was a poor performer. Mr Ward was also subjected to physical abuse including being slapped hard with an open hand across the back of the head and being shoulder charged by Mr Smith on numerous occasions. The bullying occurred for about 14 months from early 2003 to April 2004.
As a result, Mr Ward avoided being in the office and worked from home except for monthly meetings. When he attended on those days, Mr Smith would call him into his office and yell at him and abuse him.
In January 2004, another employee complained about Mr Smith and eventually left. As a result, Mr Ward was interviewed by someone from human resources. Mr Ward confirmed that the employee had been bullied and advised he’d also been physically and verbally assaulted by Mr Smith.
In April 2004 Mr Smith was removed as State Manager and given a national role. After Mr Smith left, Mr Ward experienced a number of ailments over a significant period of time and took sick leave at various times for Crohn’s disease, ulcers, scoliosis and a viral illness. Mr Ward’s workload increased, and he found he had to do more overtime in order to keep on top of it. He complained about the workload once to a supervisor. His supervisor in August 2010 noticed he was struggling with his work and by late November and December 2010 he was starting to get calls from underwriters for reports that were not completed. Mr Ward went on leave in December 2010 and never returned.
The proceedings
Mr Ward lodged a claim for workers compensation in respect of his psychiatric illness. On 19 April 2017 the Workers Compensation Commission determined he had suffered a primary psychological injury to which his employment was a substantial contributing factor. An Approved Medical Specialist determined his whole person impairment was 22%. Mr Ward then sought, and was granted, leave to bring proceedings for damages against Allianz in the District Court.
Allianz’s liability for intentional harm by Mr Smith
To establish an intentional tort, Mr Ward had to prove on the balance of probabilities that Mr Smith’s intentional conduct was calculated to cause him physical harm, being a psychiatric or psychological injury. The Judge was satisfied that as a result of Mr Smith’s purpose at Allianz and 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 he caused harm.
Mr Ward then had to established Allianz was responsible for Mr Smith’s deliberate conduct. Allianz argued they could not be held liable for the physical aspects of Mr Smith’s abuse of Mr Ward because they did not authorise it. The Judge did not agree noting Mr Smith’s conduct was intimately connected with his task because it was done in the apparent execution of the authority which Allianz had given him as State Manager. The Judge determined Allianz was liable for the injuries suffered by Mr Ward as a consequence of Mr Smith’s deliberate conduct.
Allianz liability in negligence
Mr Ward pleaded his negligence claim on two bases:
- That, in perpetrating the abuse, Mr Smith failed to take reasonable care for his safety;
- That Allianz failed to take reasonable care for his safety and well-being.
The Judge found Allianz appeared to have a system in place to deal with the potential consequences of bullying and that it took steps to put an end to that conduct. Also, Mr Ward gave no indication at all that he was suffering from psychological harm, meaning that harm was not reasonably foreseeable once Mr Smith was removed. The Judge noted it may have been different if Mr Ward showed any signs of mental illness at work, but he did not.
The Judge could not conclude Mr Smith’s conduct as an agent for Allianz was a breach of Allianz’s duty of care to Mr Ward, as Allianz had no prior notice of Mr Smith’s conduct. Secondly, Allianz did take reasonable care for Mr Ward’s safety and well-being by removing Mr Smith from his position. The Judge determined a claim in negligence would fail.
Damages
As Mr Ward successfully pleaded his case for intentional tort, the Judge found Allianz liable to pay Mr Ward damages totalling $1,394,421.91 for economic loss as follows:
| Past economic loss | $559,427.30 |
| Superannuation on past earnings | $62,935.57 |
| Past lost leave loading | $7,509.75 |
| Damage to future economic capacity | $668,941.50 |
| Superannuation on future earnings | $86,627.92 |
| Future leave loading | $8,979.87 |
The Judge further directed Allianz to pay Mr Ward’s legal costs and interest.
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