Federal Court of Australia

Leggett v Hawkesbury Race Club Limited (No 1) [2021] FCA 1298

File number(s): NSD 1554 of 2019
Judgment of: RARES J
Date of judgment: 18 October 2021
Catchwords: ESTOPPEL – issue estoppel – prior adjudication in arbitration in Workers’ Compensation Commission – where applicant brought subsequent common law damages claim – whether reasons of arbitrator were admissible in later proceedings to prove issue estoppel – Held: respondent estopped from denying findings of arbitrator – reasons of arbitrator admissible.
Legislation: Workers’ Compensation Act 1987 (NSW)
Cases cited: Blair v Curran (1939) 62 CLR 464

Feltham v St Vincent’s Hospital (1993) 9 NSWCCR 547

Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259

Division: Fair Work Division
Registry: New South Wales
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 23
Date of hearing: 18 October 2021
Counsel for the Applicant: Mr M. Best and Mr G. Fredericks
Solicitor for the Applicant: Gilberts Legal
Counsel for the Respondent: Mr L. King SC and Mr I. Latham
Solicitor for the Respondent: The Workplace – Employment Lawyers

ORDERS

NSD 1554 of 2019
BETWEEN: VIVIENNE LEGGETT

Applicant

AND: HAWKESBURY RACE CLUB LIMITED

Respondent

order made by: RARES J
DATE OF ORDER: 18 OCTOBER 2021

THE COURT RULES THAT:

  1. The statement of reasons of the arbitrator for the certificate of determination made on 7 December 2017 in the Workers’ Compensation Commission at pages 804 to 829 of the court book be admitted into evidence as part of exhibit A.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

RARES J:

  • The parties have engaged in an extensive argument on the voir dire on the admissibility of the reasons of a senior arbitrator of the Workers’ Compensation Commission for his determination of the applicant’s, Vivienne Leggett’s, workers’ compensation claim against the respondent, Hawkesbury Race Club The parties are in dispute as to whether issue estoppels arise from the relevant findings of the arbitrator.  The former chief executive officer of the Club, Greg Rudolph, who was the second respondent, settled Ms Leggett’s claim against him on 15 October 2021 before the trial began today.  By consent, I dismissed the proceeding against him with no orders as to costs.

The issue

  • The arbitrator determined that Ms Leggett sustained a psychological injury arising out, or in the course, of her employment from May 2016 to 10 October 2016. That part of his determination is not in issue.
  • Ms Leggett seeks to rely upon two further determinations by the arbitrator, namely, that, first, her employment was the main contributing factor to her injury and, secondly, Mr Rudolph had subjected her to bullying and harassment in the course of her employment with the Club between May and 10 October 2016. The Club argued that the arbitrator’s reasons are not admissible for the purposes of establishing those facts.

Background

  • Importantly, Ms Leggett seeks to rely on the arbitrator’s findings at [143]–[144], [161]–[162], and [170] of his reasons, namely:
  1. On review of the applicant’s evidence and the evidence as a whole. I am satisfied that the events raised by the applicant did in fact occur and were not imaginary. She had issues with the management style of Mr Rudolph from the time that he became the CEO in May 2016.  The applicant viewed her interactions with him as bullying and harassment and I have no reason to doubt the veracity of her evidence or her perception of these real events.
  2. Therefore, I am comfortably satisfied on the balance of probabilities that the applicant was exposed to bullying and harassment during the course of her employment with the respondent prior to 10 October 2016. The next question to consider is whether the applicant sustained an injury in terms of s 4 of the 1987 Act.

  1. In summary, the medical opinions of Drs Parsonage and Jovanova support a primary psychological injury arising from the applicant’s dealings with Mr Rudolph since he became the CEO in May 2016. Dr Tran’s opinion carries less weight in the absence of a report from him. Dr Smith also accepts that the applicant developed a Major Depressive Disorder due to the events on 9 October 2016 and on 10 October 2016.
  2. Whilst I agree that the incidents on 9 October 2016 and 10 October 2016 no doubt contributed to the applicant’s psychological condition, having regard to the totality of the medical evidence, the emails and the applicant’s statement, coupled with the histories that she provided to the various doctors, the common sense evaluation of the causal chain supports the contention that the applicant sustained an injury arising out of or in the course of her employment as a result of her dealings with Mr Rudolph from May 2016 to 10 October 2016 (deemed).

  1. 170. Bearing in mind the statutory requirements of s 4(b)(i) of the 1987 Act and the principles set out in Kooragang, I am satisfied that the applicant sustained a psychological injury arising out of or in the course of her employment prior to 10 October 2016 (deemed) . Most, if not all, of the events complained of by the applicant were the whole and predominant cause of her injury. Further, her employment was the main contributing factor to the contracting of the psychological condition or disease.

(emphasis added)

  • The expression “(deemed)” in [162] meant that the injury was a disease that s 15(1)(a)(i) of the Workers’ Compensation Act 1987 (NSW) deemed Mrs Leggett to have suffered on 10 October 2016, when she ceased working, being the time of her incapacity.

The parties’ submissions

  • The Club’s defence, first, denied that any actual bullying, in fact, had occurred, secondly, denied the occurrence of numerous incidents on which Ms Leggett relied, and thirdly, asserted that those incidents that the Club accepted had occurred could not be found objectively as bullying or harassing.
  • As the Club pointed out, the arbitrator set out in [140] a summary of the law applicable for the purposes of determining a claim that a worker has sustained a psychological injury under the Workers’ Compensation Act. Such a determination requires a finding that, for the purposes of that Act, a worker’s perception of real events at work caused him or her to suffer a psychological injury that arose out of or in the course of his or her employment.
  • The Club argued that all that the arbitrator decided in [143] and [144] was that some of the facts on which Ms Leggett relied, to which his finding at [143] ambiguously referred, entitled her to form a perception that she had been exposed to bullying and harassment during the five-month period in 2016.
  • Ms Leggett, on the other hand, argued that in [144] the arbitrator went further. She contended that, there, the arbitrator additionally found that what Mr Rudolph did, being the subject of his findings in [143] concerning the events that had occurred (including the objective evidence in emails in evidence), amounted to actual bullying or harassment during the course of Ms Leggett’s employment.

Consideration

  • In Blair v Curran (1939) 62 CLR 464 at 531–533, Dixon J explained how an issue estoppel arises. He said that a judicial determination directly involving an issue of fact or law disposes of that issue once for all so that it cannot afterwards be raised by the same parties or their privies.  However, the estoppel covers only those matters which the prior judgment necessarily established as the legal foundation or justification for its conclusion:

The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.

Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded.  In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established.  Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived.  But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order.

In the phraseology of Lord Shaw, “a fact fundamental to the decision arrived at” in the former proceedings and “the legal quality of the fact” must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation [1926] AC 155).

(emphasis added)

  • As his Honour noted (62 CLR at 533), when seeking to apply those concepts, it is difficult distinguish what is fundamental or cardinal to the prior decision, judgment, decree or order, or necessarily involved as its legal justification or foundation, from other matters, that, although raised and decided as material considerations in the circumstances, are nonetheless not, in point of law, the essential foundation or groundwork of the judgment, decree or order.
  • In Feltham v St Vincent’s Hospital (1993) 9 NSWCCR 547 at 570F–571H, Sheller JA, with whom Kirby P (at 549E) and Priestley JA (at 555D) agreed on this issue, applied Blair 62 CLR at 531–533 to the facts there in issue. There, the commissioner in a workers’ compensation proceeding had found that the plaintiff had suffered two separate injuries, one to her wrist, the other to her neck and spine, in the one occurrence when her hand became caught in a compactus that she was trying to move.  The commissioner found that after the occurrence the plaintiff was, initially, totally incapacitated and, later, partially incapacitated.  The employer disputed liability for negligence in the plaintiff’s common law proceeding.  Sheller JA (at 570F–G) found that the commissioner’s findings both as to the wrist and neck injuries “were essential elements in the finding of incapacity”.  He held that those findings estopped the employer from contending that the occurrence had not caused the injury to the plaintiff’s neck and spine.
  • Here, the arbitrator’s reasons here were detailed, but they were not judicial reasons. His reasons were those of an administrative decision-maker.  They should not be “construed minutely and finely with an eye keenly attuned to the perception of error” or with “unhappy phrasing”: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ.  The arbitrator reviewed the evidence, including emails and statements by witnesses, and then considered the submissions of the parties.  In particular, he noted the submissions of Ms Leggett’s lawyer that argued in support of a finding that real events had occurred and Ms Leggett’s perception of those events, and how they affected her, should be determinative.
  • At the commencement of his reasoning on the bullying and harassment issue, the arbitrator identified (at [112]) that the first question for decision was whether, as a matter of fact, the events that Ms Leggett alleged had occurred and, if so, whether those events amounted to bullying and harassment. He added that, next, “one needs to consider whether these events caused or contributed to her psychological injury”.  The arbitrator proceeded to make findings of fact, which substantively accepted Ms Leggett’s account of various instances of Mr Rudolph’s conduct toward her, based on both her and his evidence.  In the course of making those findings, the arbitrator found that Ms Leggett would have been able to and, in fact, did, perceive Mr Rudolph’s conduct in a way that would cause her distress or offence.  He noted that, in most instances, Mr Rudolph had sought to refute her allegations.  The arbitrator reviewed both Mr Rudolph’s evidence and other evidence relied on by the Club.  Relevantly, the arbitrator found:
  1. In the rest of Mr Rudolph’s emails in evidence, he asked a series of questions. The manner in which he asked the questions in some of the emails is of concern, particularly the email sent on 20 September 2016. His reference to the words “If as you say” seems to connote independence regarding new contracts and sponsorships and she had to seek permission. This is consistent with the allegations that she raised in the document in the Reply.
  2. The applicant’s version of the telephone conversation is supported by the contents of the email that she sent on the date of the incident on 9 October 2016. She complained about being directed to return from the barriers when he had encouraged her to do so on the previous race day. She stated that he was rude and that she did not have the opportunity to explain that she would be back in time before he hung up on her. Therefore, there is contemporaneous evidence to support her description of the events on 9 October 2016. She questioned the tone of Mr Rudolph’s voice and why he had spoken so harshly to her. Of course, the authoritative nature of his discussion with the applicant was confirmed by Ms Porteous.
  3. In her email, the applicant stated that this event had compounded many other situations in which she had felt down trodden, excluded and questioned unreasonably when carrying out her duties. Therefore, the issues were not confined to the incident on 9 October 2016. Rather than discuss the issue via email, Mr Rudolph requested that the applicant attend a meeting to discuss her work performance without giving any indication as to what needed to be discussed.
  4. Therefore, whilst Mr Rudolph has denied many of the applicant’s allegations, he has conceded that some of the events did in fact occur and the emails also provide contemporaneous evidence of certain events in support of the applicant’s allegations.

(emphasis added)

  • The “document in the Reply” to which the arbitrator referred in [136] was a statement that Ms Leggett had made of complaints about Mr Rudolph’s conduct that the Club annexed to its Reply in the arbitration, together with his evidence in response.
  • In his findings of fact at [143], the arbitrator accepted Ms Leggett’s evidence that the incidents he had discussed earlier in his reasons (at [112]–[139]) had occurred as she had asserted. That is why he found in [143] that the events she relied on, and which Mr Rudolph and the Club denied had occurred, in fact, and were not imaginary.
  • I am of opinion that the arbitrator’s findings at [144] necessarily entailed, having regard to his findings in [143], that not only did the events occur as Ms Leggett described, where they were not otherwise objectively verifiable from documents, but the events also had “the legal quality of the fact” that the way in which Mr Rudolph interacted with her was as she described: Blair62 CLR at 532 citing Hoystead [1926] AC 155.  The finding in [143] is, as the Club argued, a finding that, first, the objective facts occurred and secondly, Ms Leggett perceived those facts and the interactions she had with Mr Rudolph concerning them to be bullying and harassment.
  • Thus, the arbitrator’s finding, that there was no reason to doubt the veracity of Ms Leggett’s evidence or her perception of those events, created an issue estoppel as to both the occurrence of those events that the arbitrator found at [112]–[139] and his findings as to her perception of what Mr Rudolph did. However, the arbitrator did not decide in [143] that, either, those facts were causative of Ms Leggett’s psychological condition or amounted objectively to bullying or harassment.
  • That raises the question as to how [144] in the arbitrator’s reasons can be understood. The Club argued that it was, in effect, a summary by the arbitrator of the conclusion he had come to in [143] based on the application of the law to the facts but was, in effect, unhappily expressed.  That was because, the Club contended, [144] either omitted a finding that Ms Leggett perceived that she had been exposed to bullying and harassment based on actual facts, so as to give rise to the injury or, alternatively, amounted to no more than a finding that, because she had that perception based on real events, her condition satisfied the statutory definition of an injury, without amounting to an objective finding by the arbitrator that Mr Rudolph’s conduct was bullying and harassment.
  • I reject the Club’s argument. The real issues between the parties throughout the Workers Compensation Commission proceeding, including the arbitration, were, first, whether the disputed events alleged had occurred at all and, if so, secondly, whether Mr Rudolph’s conduct amounted to bullying and harassment.  In my opinion, the arbitrator’s finding in [144] is of an ultimate fact that went beyond his findings in [143].  This is because the finding in [144] did not amount to a mere restatement of previous findings but addressed the question of fact that the arbitrator had set out at [112].  The finding of actual bullying and harassment in [144] was bound on the facts that the arbitrator had already found in evaluating the events.  The characterisation that the arbitrator arrived at in [144] went one step further than his findings in [143], that, first, the events that Ms Leggett described had in fact occurred, contrary to Mr Rudolph’s and the Club’s case, and secondly, she perceived those interactions as amounting to bullying and harassment.  The arbitrator made a further essential finding in [144] that, not only did Ms Leggett perceive Mr Rudolph’s conduct as bullying and harassment, but, in fact, it did amount objectively to him bullying and harassing her.
  • In my opinion, it follows that the Club is estopped in this proceeding from denying that Mr Rudolph bullied and harassed Ms Leggett in the respects that the arbitrator found in his reasons at [112] to [144].
  • The second finding which is in issue is whether that bullying and harassment occurred in the course of Ms Leggett’s employment with the Club between May and 10 October 2016. In my opinion, that is the ineluctable consequence of the arbitrator’s finding in [144], and is reflected in his findings in [162] and [170] that Ms Leggett sustained her psychological injury as an injury arising out, or in the course, of her employment up to 10 October 2016 as a consequence of the events of which she complained.  He found that those events were the whole and predominant cause of her injury.  Accordingly, the Club is estopped from denying those matters.

Conclusion

  • For these reasons, the whole of the arbitrator’s statement of reasons for the certificate of determination made on 7 December 2017 will be admitted into evidence.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rares.

Associate:

Dated:        26 October 2021