In a long decision dealing also with claims of discrimination and for breach of contract, Sklavos v Australasian College of Dermatologists  FCA 179 at ff also deals with a novel claim in negligence.
The alleged duty
The applicant argued that by reason of his status as a trainee of the College, the College owed him a duty to exercise reasonable care and skill to avoid recognised psychiatric injury when considering, formulating, invoking, making, or publicising allegations of breaches of professional behaviour, when reporting such alleged behaviour to external regulatory bodies or hospitals, or when imposing sanctions in respect of such alleged behaviour (the alleged duty of care). He contended that, in breach of this alleged duty of care, the College engaged in certain ‘clinic list conduct’.
Existence of a novel duty
On the potential existence of such a duty, at  the court noted that if the relationship between the parties is not one that falls within a recognised duty of care (such as school and pupil, employer and employee, doctor and patient etc) it is necessary to focus on the “salient features” of the relationship to identify if the relationship attracts a duty of care.
At  it was noted that while the salient features of the relationship between the College and a trainee might support the existence of a duty of care as alleged, issues of compatibility and coherence with the important public functions which the College performs in the Australian medical training system also arise.
Given the lack of detailed submissions on the duty issue, the court at  assumed the existence of such a duty, though with some reluctance given the remarks at :
In Sullivan v Moody  HCA 59; (2001) 207 CLR 562 at , the High Court refused to recognise a novel duty on the basis that doing so would have placed the respondents in that case under two “irreconcilable” duties, interfering with the “proper and effective discharge” of the statutory scheme in issue. In a strict sense, the alleged duty of care in this case is not “irreconcilable” with the College’s duties under the HI Act, as it remains able to certify the competency of dermatologists admitted as Fellows of the College. However, as acknowledged in Paige (see -, -), recognising a duty to prevent psychiatric injury in connection with a disciplinary procedure is likely to produce a significant “chilling effect”, discouraging the College’s investigation of allegations of misconduct and inhibiting the proper exercise of corrective measures, and potentially rendering the training process less “efficient and effective”. As the College’s functions under the HI Act have a broader protective purpose, ensuring that only appropriately qualified and medically responsible dermatologists are permitted to treat the general public, the “chilling effect” which the alleged duty of care may produce would divert the College’s attention from this overwhelmingly important consideration. This tends to demonstrate an unacceptable degree of inconsistency between the alleged duty of care and the College’s functions, a conclusion which undermines any recognition of the alleged duty of care.
Normal fortitude hurdle
The court went on to note at [410 that disciplinary matters are inherently stressful for those involved. A person of normal fortitude under disciplinary investigation will inevitably feel highly anxious. This context therefore creates a real and foreseeable risk of psychiatric harm to a person of normal fortitude if reasonable care is not taken in the process. Section 32 thus does not preclude recognition of the alleged (and for this purpose, assumed) duty of care.
No breach of duty
Ultimately the court concluded at  that the evidence does not support any conclusion of a breach of the assumed duty of care.
The evidence did not support an inference that Dr Sklavos’s recognised psychiatric injury was caused by the clinic list conduct. At  – :
At best for Dr Sklavos there is an “evidentiary gap” which might suggest that this is a case where “the cumulative operation of factors in the occurrence of the total harm in circumstances in which the contribution of each factor to that harm is unascertainable”.
These matters would indicate that the requirements of s 5D(1)(a) of the Civil Liability Act are not satisfied in this case. If this is so then, had I found the College in breach of the assumed duty of care owed to Dr Sklavos (which I do not), it would have been necessary to consider the operation of s 5D(2), another issue not dealt with by the parties. Given this, I will say only that I doubt that any conclusion that the College should be held responsible for Dr Sklavos having developed a specific phobia about the College assessing his competence to be a dermatologist would be reasonably open.
Then addressing ‘scope of liability’ at :
Similarly, s 5D(1)(b) of the Civil Liability Act, the scope of liability issue, also remained largely unexplored. There are real questions in this matter, if negligence had been found, as to why it might be appropriate for the scope of the College’s liability to extend to Dr Sklavos having developed his specific phobia. Dr Sklavos knew he was highly anxious about the College before he took up the offer of a training position. He knew he would be subjected to ongoing assessment and that, if there was any suggestion of misconduct by him, the College inevitably would commence a disciplinary investigation. He had a peculiar vulnerability to the development of an anxiety disorder of which he and the College were unaware. His personality traits, over which the College had no control, made him likely to perceive any interaction with the College about his performance as hostile and threatening. The College is performing a valuable public service. There is a public interest in the College being able to assess competency of trainees without fear of being held liable for psychiatric injury which might result from the ordinary application of assessment and investigation processes. All of these matters, and probably more, would have to be taken into account under s 5D(1)(b).