Latest case updates for self-insurers – September 2025

Spotless Facility Services v VWA [2025] VSCA 50

The Court of Appeal in Victoria has ruled that a trial judge erred in its findings on causation by mistakenly concluding that the absence of systematic and proactive inspections of a school’s dining hall was a probable cause of the worker falling heavily and injuring themselves.

Background

Brett McGinnes, property manager at Geelong Grammar School, was injured in the course of his employment after slipping in the school’s main dining hall on a liquid he alleged was soup. Mr McGinnes sustained a cervical spine injury as a result of the fall.

Spotless Facility Services (the applicant) held both a catering contract and a cleaning contract with the school. Both contracts contained a ‘Statement of Service Requirements’, which included a requirement for the applicant to conduct ‘continuous spot cleaning and minor maintenance’.

At trial, the applicant was found liable to indemnify the Victorian WorkCover Authority (the respondent) for the compensation paid to Mr McGinnes. The trial judge found that the applicant was negligent in failing to actively monitor and inspect the dining hall floor for spills during the two-and-a-half-hour lunch service period. Although the cleaning contract was considered to not impose a duty of continuous observation on the applicant, it was held that a reasonable inspection regime would inevitably involve movement to observe all areas.

On the question of causation, the court considered the fact that the incident occurred 90 minutes into a two-and-a-half-hour lunch service without any periodic inspection. This lapse in time formed the basis for the finding that the applicant’s negligence was a probable cause of Mr McGinnes’ injury. 

Findings

However, on appeal, there was doubt cast about whether a proactive inspection regime would have detected the soup spillage in time to prevent the incident. The Court of Appeal challenged the trial judge’s assumption that there was an equal probability of a spillage occurring during the two-and-a-half-hour period. Alternatively, the evidence demonstrated that there was increased probability of the soup being split between 12.45 pm and 1.00 pm. This was typically the ‘peak period’ for lunch service and attracted the biggest crowds. 

The Court of Appeal held that while it can be reasonably assumed that a hypothetical inspection would have occurred at some stage between 12.30 pm and 1.00 pm, it was speculative to suggest that the spillage would have been present at the time of such an inspection.

Even if there were roaming inspections of the dining hall floor, the court held there was insurmountable difficulty in the respondent establishing, on the balance of probabilities, that the spillage would have been detected by the applicant in time to prevent the incident.

Key takeaways

This appeal decision serves as a timely reminder of the strict requirements of establishing causation in cases of negligence. Causation is nuanced and requires particular regard for the specific facts and evidence on hand. The burden of satisfying the test for causation lies with the worker in such cases.

Taylor v Savoir-Faire Interior Linings (Ruling) [2025] VCC 51

The County Court in Victoria has rejected an application for the amendment of a statement of claim on the basis that the changes threatened to extend beyond the scope of a serious injury certificate as granted. 

Background

On 19 July 2022, the plaintiff, Richard Taylor, made a serious injury application for injuries to his left foot which he alleged occurred on 18 May 2018 during the course of his employment with the defendant as a plasterer (first application). Mr Taylor’s supporting affidavit also referred to a right shoulder injury alleged to have been sustained in an earlier incident occurring on 7 May 2018. 

On 18 January 2023, Mr Taylor made a further serious injury application for injuries including the right shoulder injury he allegedly sustained on 7 May 2018 (second application). Other injuries forming part of the second application included injuries to his upper right arm, upper left extremity, complex regional pain syndrome, anxiety and depression.

Mr Taylor was only granted a serious injury certificate for the injuries claimed in the second application, and withdrew the first application for injuries to his left foot.

The key issue arose when Mr Taylor attempted to effectively ‘double dip’ by issuing a statement of claim seeking damages for the injuries alleged to have been sustained on both 7 May 2018 and 18 May 2018. Significantly, a serious injury certificate was only obtained for the right shoulder injury arising from the incident on 7 May 2018. 

The defendant objected to the proposed statement of claim on the grounds that it sought to expand the cause of action beyond the circumstances relevant to the right shoulder injury for which the serious injury certificate was granted. Mr Taylor failed to obtain a serious injury certificate for injuries to the left foot. The defendant argued that this prevented allegations being made about any independent breaches of duty associated with the left foot injury.

Conversely, Mr Taylor submitted that it was not necessary to seek leave separately for the left foot injury given that he had alleged there was a causal connection between the initial right shoulder injury (occurring on 7 May 2018) and the subsequent left foot injury (occurring on 18 May 2018). In essence, Mr Taylor argued that both injuries arose from the same cause of action, namely the defendant’s negligence.

Findings

The court ultimately found in the defendant’s favour. It was held that Mr Taylor could only rely on the circumstances of his employment that were related to the serious injury certificate granted for the injuries sustained on 7 May 2018. Her Honour Judge Tsikaris emphasised that the injuries occurred in distinct circumstances and were not treated as part of a continuum of injury for the purposes of the serious injury applications. Mr Taylor was therefore limited to pleading causes of action in negligence that specifically related to the right shoulder injury sustained on 7 May 2018.

Key takeaways

This case offers a useful reminder of the requirement for injured workers to comply with the serious injury processes set out in Division 2 of Part 7 of the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic). In short, workers are confined to the scope and contents of what is granted in their serious injury certificate when filing a writ to recover common law damages. 

Singh v SecureCorp [2025] VMC 2

The plaintiff, Gurmeet Singh, was employed as a part-time security guard for Securecorp (the defendant). One of his regular assignments was at the Melbourne Cricket Ground (MCG).

On 12 June 2023, Mr Singh filed a claim for compensation alleging that on 28 May 2023, he slipped while walking from the MCG carpark to his shift. He claimed that he sustained physical injuries to his left leg and knee, as well as a psychological condition.

The court found that Mr Singh’s injuries were not sustained in the course of his employment with the defendant and, as such, they were not compensable under the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) (WIRC Act).

Background

Mr Singh would arrive to his MCG shifts either by car or public transport. As a matter of practice, the defendant sent employees an email before their shifts advising which gates were open for the Yarra Park carpark near the stadium. The defendant did not own the carpark, and their employees paid the same fee as the public. The defendant did not reimburse parking fees. 

On arrival to the MCG, security staff were required to complete four prerequisite steps before commencing their shifts at their allocated area for the day. The first step was a sign on process.

On 28 May 2023, Mr Singh was scheduled to work at the players’ changerooms. His coworker drove them in that day and parked at Gate 7. There were various routes to reach the sign on location at Gate 1A from the Gate 7 carpark, including walking through the grasslands or using surrounding pathways. Mr Singh walked through the grasslands, slipped and was injured. He argued that his injuries were sustained in the course of employment.

Principles

To be compensable, the activity leading to Mr Singh’s injury (walking through the grasslands), needed to be in the course of his employment, or deemed to be in the course of employment if he was travelling for the purpose of his employment, not just commuting. 

The court needed to consider whether there was a nexus between Mr Singh’s activity and the work he was employed to perform, and whether the activity was incidental to his work or service.

Findings

The court found that walking through the carpark did not have the relevant nexus, was not incidental, and could not be deemed to be in the course of employment. 

The court distinguished from a variety of similar cases raised by Mr Singh on small factual differences. The court’s reasoning included that:

• Mr Singh was not directed or required to drive in or park at Yarra Park;
• the Yarra Park grasslands and carpark were public;
• the defendant’s employees paid public fees for parking;
• Mr Singh had alternative walking routes to the one he chose to get to Gate 1A; and
• the injury occurred before the sign on process and did not occur at a designated work location (his shift was at the player changerooms). 

The court determined that Mr Singh was simply travelling to work and the injuries were not compensable.

Key takeaways

The decision highlights that a range of factors need to be considered when assessing whether an injury that occurred outside the ordinary workplace on the way to work is compensable. These include the employer’s control over the incident’s location, any directions or encouragements given by the employer to their employees to travel or act in a certain way, and the availability of other routes to work or ways of completing the relevant activity. As is usually the case, these decisions turn on their facts.

Al-Banaa v VWA [2025] VCC 759

A 21-year-old apprentice plumber, Mr Al-Banaa, applied for a serious injury certificate under the Workplace Rehabilitation and Compensation Act 2013 (Vic) seeking both pain and suffering and loss of earnings damages for a back injury.

Injuries and work

On 14 June 2018, Mr Al-Banaa was jackhammering and felt severe pain in his spine and groin. He saw his treating doctor, had a scan done, and returned to work a few days later. On 21 June 2018, Mr Al-Banaa was jackhammering again and felt further pain. He then received diagnoses of multiple lower back injuries. He underwent multiple treatments including surgeries and physiotherapy.

After nearly two years out of work, he completed his apprenticeship and began subcontracting plumbing work. During this time, he still experienced intermittent pain, and the physical demands of his plumbing work exacerbated his condition. To help manage his back injury, he eventually started subcontracting plumbing work on his own to have more control over his jobs, but it earned him less money.

Claim for loss of earning capacity

Mr Al-Banaa argued that but for his injury, he would have worked as a plumber on a commercial construction site and would be earning $135,304 per annum. In the alternative, he argued that he would have opened his own plumbing business and earn at least $120,000 per annum. The evidentiary burden was on Mr Al-Banaa to establish these arguments on the balance of probabilities. The court noted that this was particularly difficult as Mr Al-Banaa was under 26 years old when injured.

The court rejected the first argument mainly because it was raised only in Mr Al-Banaa’s third affidavit after he became aware of the earning potential of working as a plumber on a commercial site. While his Honour noted that the court could take a broad brush approach, there were also too many variables in the $135,304 projection without sufficient supplementary clarification.

For the second argument, the court found that there was insufficient detail provided about how Mr Al-Banaa would have forged a business that had the earning potential of $120,000. The court referred to how his affidavits did not talk about the hourly and daily rates he would charge for workers, what he would pay them, what money he could expect from certain jobs, and how he could utilise subcontractors. This argument was also unsuccessful and Mr Al-Banaa’s application for loss of earning capacity was dismissed. He, however, persuaded his Honour of the seriousness of the injury from a pain and suffering perspective.

Key takeaways

The main takeaway from the case, particularly regarding workers under 26 years of age, is to ensure that a defence against a loss of earning capacity claim is alive to any deficiencies in evidence underpinning projections of future earning capacity. Vague or inconsistent affidavits will undermine a worker’s case. While the court anticipates difficulty with workers under 26 in establishing their loss, some evidentiary foundation is required.
 

Casey Marley Duncan v Utilities Management Pty Ltd [2025] SAET 25 

An apprentice, Casey Marley Duncan, who failed to disclose a prior neck injury and drug use during pre-employment screening has had his psychiatric injury claim rejected, with the South Australian Employment Tribunal (Tribunal) finding the employer acted reasonably in terminating his employment. 

Background 

• Mr Duncan was employed as an apprentice linesman with SA Power Networks, owned by Utilities Management Pty Ltd (the respondent).
• On 23 August 2023, Mr Duncan’s employment was terminated, shortly before the end of his three-month probation period.
• As part of the recruitment process, Mr Duncan was required to submit to a pre-employment medical examination but failed to disclose that he had recently sustained a neck injury and had undergone surgery the year before. After making the discovery and following a formal investigation, Utilities Management terminated Mr Duncan’s employment.
• There was also evidence that Mr Duncan had been using testosterone for body building and was consuming illicit drugs – details he failed to disclose to the independent psychiatrists who examined him.
• Mr Duncan alleged that his termination caused him to suffer a psychiatric injury and made a claim for compensation under the Return to Work Act 2014 (SA) (Act).
• Utilities Management rejected the claim, and the matter proceeded to trial before Deputy President Judge Gilchrist of the Tribunal to decide whether Mr Duncan’s claim was compensable under section 7 of the Act.

Tribunal’s findings 

At trial, Mr Duncan contended that his psychiatric injury stemmed from the manner of his termination, causing him to become incapacitated for work. He argued that Utilities Management did not properly consider his age, limited work experience or his recovery from his neck injury. He also said his drug use only began after the dismissal, as a result of his declining mental health.

Utilities Management argued that Mr Duncan's psychiatric symptoms were due to his drug use, not his termination. They submitted that Mr Duncan’s termination was based on concerns regarding his honesty and integrity. Utilities Management alleged that Mr Duncan’s injury was not compensable as it resulted from reasonable action taken in a reasonable manner regarding his termination under section 7(4) of the Act.

The Tribunal did not find Mr Duncan to be a truthful or credible witness and accepted that his use of testosterone likely began before his employment ended. The expert evidence suggested that anxiety and depression were side effects of testosterone use. The Tribunal also found that the mental health symptoms Mr Duncan experienced, which led the psychiatrists to make their psychiatric diagnoses, were linked to his drug use, rather than the dismissal. 

The Tribunal went on to find that even if Mr Duncan was able to demonstrate that his termination was the significant contributing cause of his injury, Utilities Management’s decision to terminate his employment and the manner in which it was conducted were reasonable. Section 7(4) of the Act provides a complete defence to the claim. While there were some procedural issues in the termination process, the Tribunal confirmed that the test remains one of reasonableness and is ‘not counsel of perfection’. 

Key takeaways 

This case reiterates that minor procedural flaws in the dismissal process won’t necessarily prevent an employer from relying on section 7(4) of the Act. As long as the decision to terminate the employment, and the way it was carried out, were reasonable in the circumstances, compensation for psychiatric injury can be excluded.

It also highlights the importance of a worker’s credibility in psychiatric claims. If a worker has failed to disclose information to an expert that is relevant to their assessment, the weight and reliability of those expert opinions can be significantly undermined.

Oz Shut Pty Ltd v Alison Hilton [2025] WADC 10

The Western Australian District Court recently confirmed that workers injured during a deviation from a work journey for a personal errand may still be entitled to compensation. The decision provides useful guidance on when such an injury will be compensable.

Background

• The respondent, Alison Hilton, worked for Oz Shut as a sales consultant.
• On the day of the incident, she drove from Middle Swan to Halls Head to attend a sales appointment.
• Before the appointment, Ms Hilton stopped at a shopping centre, used the toilet and then went into a Kmart store and purchased a dress for work.
• As she was exiting Kmart, she tripped and injured her left knee, right ankle and right knee. 

WorkCover WA proceedings

Ms Hilton lodged a workers’ compensation claim and her employer, Oz Shut, denied liability on the basis that her injury did not arise out of or in the course of her employment.

At arbitration, the arbitrator found that Ms Hilton was injured during a work journey as defined in section 9(1) of the Workers’ Compensation and Injury Management Act 2023 (WA) (Act) and that there was no substantial interruption of deviation from the work journey for the purposes of section 9(2) of the Act, which required that:

• there be a substantial interruption or deviation from Ms Hilton’s work journey; and
• the substantial interruption or deviation was unconnected with Ms Hilton’s employment.

District Court proceedings

Oz Shut appealed the arbitrator’s decision to the District Court, with the key issue being whether there was a substantial interruption or a deviation that was unconnected with Ms Hilton’s employment.

The court applied the ordinary meaning of substantial ('of real significance, weighty, important') and found that the trip was not a substantial interruption or deviation given that it was negligible in time, being only 15 minutes. 

The court further found that the interruption or deviation was connected to the employment, and in doing so, the court found that employees were permitted to engage in personal activities during downtime, so long as they remained on call and contactable. In addition, given Ms Hilton was required to be professionally attired for work purposes, the court was not persuaded that buying a dress for work was unconnected to her employment.

Oz Shut’s appeal was dismissed.

Key takeaways

This case reinforces that an injury sustained while performing personal errands during a work journey may be compensable. Every case will be decided on its facts, and the surrounding employment context is essential in determining whether a section 9(2) defence arises. 

When assessing whether an injury occurs within the course of employment, it is important to consider the whole of the employment relationship including what has been authorised by the employer, whether the journey occurred during work hours, and the activity the worker was engaged in at the time of injury. 

Lauren Vercoe v Local Government Association Workers Compensation Scheme [2024] SAET 91

An employee who tripped over a pet gate while taking a coffee break at home has successfully claimed compensation, with the South Australian Employment Tribunal (Tribunal) finding her injury occurred during an authorised break and that her employment was a significant contributing cause. 

Background 

• The applicant, Lauren Vercoe, was employed by the City of Charles Sturt Council as an asset programmer with approval to work from home following the COVID-19 pandemic.
• On 19 September 2022, while working from home, Ms Vercoe was taking a coffee break when she tripped over a metal pet fence that she had temporarily set up to keep her colleague’s puppy that she was dog-sitting away from her pet rabbit (the accident).
• Ms Vercoe sustained injuries to her right shoulder and right knee and made a claim for workers compensation.
• The claim was rejected by the Local Government Association Workers Compensation Scheme (respondent).
• The matter proceeded to trial in March 2024 to determine:
  • whether the Accident occurred during an authorised break under section 7(5)(b) of the Return-to-Work Act 2014 (SA) (Act); and
  • whether her employment was a significant contributing cause of the injuries under section 7(2)(a) of the Act. 

Findings

Section 7(5)(b) of the Act extends the definition of employment to attendance at a worker’s place of employment during an authorised break.

The Tribunal accepted Ms Vercoe’s evidence that she tripped over the pet fence while on a coffee break and noted that the respondent explicitly encouraged employees to take such breaks while working from home.

The Tribunal cited the High Court’s decision of Hatzimanolis v ANI Corporation (1992) 173 CLR 473, where it was found that the court’s approach must be informed by an understanding of contemporary practices of workers and employers, and the contemporary understanding of what is incidental to employment.

The Tribunal found that contemporary practices included working from home and therefore that extended to her place of employment. It was held that Ms Vercoe’s injuries arose during an authorised break from work. 

The respondent argued that Ms Vercoe had created a unique hazard and that the accident would not have occurred if she didn’t put up the pet fence herself. However, the Tribunal found that an employer does not need to know about a hazard for an injury to be deemed an employment-related cause of an injury. It also noted the fact that although Ms Vercoe had control over her work from home set up, it did not remove the connection to her employment.

The Tribunal ultimately held that Ms Vercoe’s injuries occurred during an authorised break and that her employment was a significant contributing cause.

Key takeaways 

As a result of the COVID-19 pandemic, flexible working arrangements are here to stay. Employers need to grapple with the unexpected risks of employees working from home.

This case highlights the risks employers face in permitting employees to work in locations outside the office. Even if an employer has no knowledge of an employee’s working environment and potential surrounding hazards, they still may be held liable for the injuries sustained by an employee (noting workers compensation is a ‘no fault’ scheme).

With the increase in flexible working arrangements, employers should consider implementing more comprehensive work from home policies and reviews and encourage employees to report potential hazards in their home workspaces. As this case shows, those steps may not be enough to avoid liability where the injury is still linked to employment.

The decision of Auxiliary Deputy President Magistrate Carrel was appealed to the Full Bench of the SAET in April 2025 and the Full Bench reserved their judgment. The question of whether the legal principles will remain from this decision are still to be seen.

Return to Work Corporation of South Australia v Sweeney [2025] SASCA 50

The Return to Work Corporation of South Australia (ReturnToWorkSA) appealed to the Court of Appeal against a decision of the Full Bench of the South Australian Employment Court (Full Bench). The appeal raised two key issues:

• whether the primary judge had made an error of law in failing to find that a medical examiner had not adhered to the requirements of section 22 of the Return to Work Act 2014 (SA) (Act) and chapter 9 of the Impairment Assessment Guidelines (Guidelines) when assessing the respondent’s, Julie Sweeney, noise-induced hearing loss (NIHL); and
• whether the primary judge failed to correctly construe section 106(7) of the Act when finding that Ms Sweeney was not entitled to the costs of the proceedings.

Background and primary findings

• Ms Sweeney made a claim for compensation for non-economic loss relating to NIHL after working in a noisy workplace for 15 years.
• Dr Hains, an ENT specialist, assessed Ms Sweeney’s work-related NIHL at 4% whole person impairment (WPI).
• As this was below the 5% threshold required under section 58(2) of the Act, ReturnToWorkSA determined Ms Sweeney was not entitlement to compensation.
• Before trial, the solicitors for ReturnToWorkSA sent Ms Sweeney’s solicitors a Calderbank letter, inviting Ms Sweeney to discontinue the dispute, with an offer to pay reasonable legal costs up to a specified date.
• The matter proceeded to trial in March 2023.
• The primary judge held:
  • Dr Hains could use the ’risk tables’ in the Australian/New Zealand Standard for Occupational Noise Management (AS/NZS 1269.4:2014) (Australian/New Zealand Standard) for the assessment of the work-related NIHL, under section 22 of the Act and chapter 9 of the Guidelines; and
  • Ms Sweeney was denied costs, because she failed to improve the offer made by ReturnToWorkSA before the trial.
• Ms Sweeney successfully appealed to the Full Bench where errors of law were identified in the primary judge’s findings. 

Court of Appeal’s findings
The Court of Appeal allowed the appeal and reinstated the primary judge’s original decision.
On the first issue, the court found that the Full Bench had erred in finding that it was not open to the primary judge to accept Dr Hains’ use of the ‘risk tables’ from the Australian/New Zealand Standard when assessing Ms Sweeney’s non-work-related hearing loss. The Court confirmed that medical assessors are not strictly required to apply the NAL Report method under chapter 9 of the Guidelines where an alternative method is supported by clinical judgment. As a result, Dr Hains’ assessment of 4% WPI was upheld, and Ms Sweeney remained ineligible for lump sum compensation for NIHL.

On the second issue, the court held that the Full Bench had also erred in finding that the primary judge had misconstrued section 106(7) of the Act. It found that an offer of legal costs – even without a monetary amount – could constitute a valid offer of compromise under the Calderbank principles. ReturnToWorkSA’s offer to pay Ms Sweeney’s legal costs up to a specific date was a sufficient trigger to section 16(7), meaning Ms Sweeney was not entitled to recover her legal costs. 

Key takeaways 
The Court of Appeal’s decision highlights that strict application of the Guidelines by a permanent impairment assessor is not required where there is a justifiable decision on the part of the assessor when using their medical judgement. 

It also emphasises the benefits of cost protection measures, particularly before a matter proceeds to trial. 
 

Guandalini v the Workers Compensation Regulator (2025) QIRC 171

Vice President O’Connor of the Queensland Industrial Relations Commission has recently considered the complex matrix of issues in psychiatric statutory claims under the Workers Compensation & Rehabilitation Act 2003 (Qld) (WCR Act) where there is multifactorial causation, particularly the entanglement of work and non-work-related stressors.

Background

The Appellant, Anthony Carlo Guandalini, brought an application for statutory compensation for a psychiatric injury said to have arisen over a period of time and allegedly caused as a consequence of:

• the employer’s handling of an investigation into complaints of bullying made by a colleague allied to Mr Guandalini against a coworker; and
• the employer’s handling of complaints made by friends of the accused coworker against MrGuandalini.

During the course of evidence, it transpired that during the relevant period:

• MrGuandalini  was going through an acrimonious divorce. MrGuandalini made a number of suicide threats, which culminated in his voluntary admission to a private clinic ; and
• there was also a breakdown of a friendship group at work, which resulted in MrGuandalini and one worker making accusations against a coworker, with retaliatory accusations being made by the other half of the (former) friendship group against MrGuandalini and his ally.

Findings

Both WorkCover Queensland and the Regulator rejected the application for compensation on the basis that MrGuandalini failed to satisfy section 32(1) of the WCR Act, that Mr Guandalini’s psychiatric injury arose in the course of employment and that employment was a significant contributing factor.

The Commission noted that there were a number of complex, and at times competing, issues to be taken into consideration in seeking to unpick the various causes of the psychiatric condition and its potential link to employment:

• As noted by the Queensland Court of Appeal in Newberry v Suncorp Metway Insurance Ltd (2006) 1 Qd r 519, it must be established that employment significantly contributed to the psychiatric injury. This requires pointing to the particular exigencies of employment which significantly contributed, not merely the psychiatric injury arose at work.

• The Commission then considered the frequently cited test from President de Jersey of the Industrial Court in Croning v Workers Compensation Board of Queensland (1997) 156 QGIG 100. Employment must be the ‘real effective cause’ of the psychiatric injury, and not merely the background or setting in which the injury occurred. This requires looking at what the worker actually did in their employment, and not merely the fact of being employed.

• However, in the later decision of Q-Comp v Foote (No. 2) (2008) ICQ 42, President Hall of the Industrial Court also noted that the fact that a worker had a fragile psychological makeup, or eggshell psyche, did not preclude them from receiving workers compensation. The employer took the worker with all their faults, including emotional vulnerabilities performing ordinary work duties.

The medical evidence indicated that Mr Guandalini had a complex matrix of personal issues that were negatively impacting his mental health. Unfortunately, the treating psychiatrist was very global in his analysis of the condition and tended to merge all the various stressors together, focusing on treatment rather than conducting a forensic analysis of causation for the purposes of the WCR Act. 

As such, the Commission noted that it was impossible to clearly separate out the various contributing factors to the psychiatric condition. The Commission was left with a ‘chicken or the egg’ quandary whether divorce stressors contributed to the falling out between colleagues at the work or vice versa.

As MrGuandalini bore the onus of proof in establishing that his employment was a significant contributing cause of his psychiatric condition, and given the failure of the medical evidence to adequately answer this question, the Commission was obliged to reject MrGuandalini’s application on the basis that he had failed to prove the he had suffered an ‘injury’ under section 32(1) of the WCR Act. 

Although not necessary to determine, the Commission also considered whether the section 32(5) exclusion of reasonable management action taken in a reasonable way applied to also defeat the application. The Commission noted that the two events complained of by Mr Guandalini constituted ‘management action’. 

The Commission then produced a useful compendium of decisions in considering what constituted ‘reasonable’:

• the Commission applied an objective test of the external bystander to look at the reality of the employer’s conduct. Mr Guandalini’s perception of the action was not relevant;
• ‘reasonable’ did not mean perfect. The management action did not have to be without blemish;
• the Commission looked at the management action that was taken, rather than hypothesise as to alternative action that could have been taken to make the process better;
• reasonable did not equate to industrial fairness, although consideration of fairness would be relevant in assessing the reasonableness of the conduct; and
• there might be failings, deficiencies and flaws in the management action and the manner in which it was performed. However, it would still be reasonable because the process was based on sound principles, was not conducted in an arbitrary manner, did not involve any unfairness and did not produce an unfair result.

On the facts of MrGuandalini’s allegations, the employer had received complaints of bullying from both sides, and appointed independent management to investigate and assess the grievances, had given all parties, including Mr Guandalini, the opportunity to make submissions about the grievance and had communicated its conclusions to the various parties, including Mr Guandalini. While Mr Guandalini was unhappy with the outcomes, it did not follow that the process was unreasonable.

On that basis, MrGuandalini would also have failed because of the exclusion for reasonable management action taken in a reasonable way under section 32(5) of the WCR Act.

Key takeaways 

This case provides a timely reminder that the onus is on the worker to prove that employment was a significant contributing factor and if there are a number of factors contributing to the workers diagnosis, it’s up to the worker to unscramble the egg to be successful. Psychiatric claims are inherently complex in disentangling causation. This case serves as a reminder of the need to go beyond the treating doctor’s diagnosis. The case is not novel but outlines how decision makers view what is considered ‘reasonable’ in terms of the reasonable management action defence. 

State of New South Wales v Culhana [2025] NSWCA 157 (17 July 2025)

Background

The worker, Craig Stockwell, suffered a psychological injury, in the form of post-traumatic stress disorder (PTSD), following exposure to a series of traumatic events during the course of his employment with New South Wales Police. Following the cessation of his employment, Mr Stockwell was diagnosed with gastroesophageal reflux disease, Barrett’s oesophagus and adenocarcinoma. The adenocarcinoma was the immediate cause of his death on 27 November 2022. 

Mr Stockwell’s de facto partner, Danielle Culhana, sought death benefits under section 25(1) of the Workers Compensation Act 1987 (NSW) (1987 Act). This section provides payment of compensation for dependants following the death of a worker ‘if death results from an injury’.

Whilst Mr Stockwell’s PTSD was accepted as a work injury, liability for death benefits was disputed on the basis Mr Stockwell’s adenocarcinoma, and ensuing death, did not result from the work injury. 

Ms Culhana commenced proceedings in the Personal Injury Commission (PIC). On review of the evidence, the Member was satisfied that Mr Stockwell’s PTSD materially contributed to his adenocarcinoma and therefore his death. 

The State of NSW appealed this decision to a Presidential Member of the PIC to challenge the Member’s evidentiary findings under section 352(1) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (1998 Act). The Acting Deputy President ‘dismissed the appeal on the basis that findings at first instance were open and it was insufficient that he would have drawn a different inference.’.

The State of NSW sought leave to appeal the decision of the Presidential Member to the Supreme Court of New South Wales on two grounds:

1. ‘the Acting Deputy President erred in law in applying an erroneous standard of review for an appeal under s 352(5) of the 1998 Act; and

2. the Acting Deputy President had erred in law in failing to conclude that the test for causation applied by the member for the purposes of s 25 of the Workers Compensation Act was erroneous’. 

Findings

In allowing the appeal on the first ground, the court was required to consider the history of section 352 of the 1998 Act and the proper construction of this provision in light of its ordinary meaning, legislative purpose and existing authority. 

The court acknowledged that before the 2011 amendments of section 352(5) of the 1998 Act, this provision expansively characterised the right of appeal as a review by way of hearing de novo or new hearing; together with largely unlimited discretion conferred on the Presidential member, including the power to make a new decision. The court reiterated that the intention of the 2011 amendments was to clarify that appeals are limited to being conducted by way of rehearing, not a fresh or new hearing . 

However, the court held that a perpetuation of erroneous statutory interpretation by members of the PIC in subsequent decisions, particularly the decision of Raulston v Toll Pty Ltd [2011] NSWWCCPD 25, had resulted in ‘an unduly narrow test’ being applied to ‘challenges to findings of fact, to the disadvantage of all appellants (who may be workers, or employers and their insurers)’ . 

The court rejected this narrow view of the appellate function. To this effect, it is no longer sufficient for a Presidential member of the PIC to dismiss an appeal on the basis that certain findings were open to the member at first instance and therefore should not be interfered with on appeal. To do so would be a denial of the purpose of the appellate process.

The court held that future appeals under section 352 of the 1998 Act should apply the correct approach as adopted in Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 and Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 [91]. That is, if on review of the evidence before the member, a Presidential member ‘would reach a different conclusion on a question of fact, her or she should not shrink from giving effect to it’ .

Key takeaways
This case sets the relevant standard for the scope of the statutory right to appeal and the appellate process.