Mr Smith was a former army commander who brought his army management style to Allianz in 2003 and 2004 when it was dealing with the fallout of HIH Insurance's collapse. When he started in the position, the court heard, Mr Smith brought all the account executives into the boardroom and declared that a new era had started.
He said the account executives were to blame and that he had been "brought in to kick [them] in the head".
"It seems that this was more than just a figure of speech," Judge Justin Smith said. "It was the managers’ fault that the business was suffering and he saw his role as sorting them out or having them fired. He did this by means of constant and ongoing belittling and intimidation, both verbal and physical."
In uncontested evidence backed up by other employees, the court was told Mr Smith would yell at Mr Ward, say he was hopeless at his job and tell others he was a poor performer. On one occasion and without warning, Mr Smith slapped Mr Ward across the back of the head while he was sitting at his cubicle.
The slap was so hard that Mr Ward's head nearly hit the keyboard of his computer. On another occasion, Mr Smith hit Mr Ward on the shoulder as he was walking past. But Mr Smith's favored form of physical harassment, the court found, was to shoulder charge.
Eventually, a bullied account manager complained about Mr Smith's conduct and human resources interviewed Mr Ward as part of an investigation into his claims. Mr Ward told HR that not only was he aware of the bullying but that he also had been physically and verbally assaulted. As soon as he said that, the court heard, the HR manager closed her notebook and ended the meeting.
Abuse 'intimately connected' to task - Three months after the complaint, Allianz removed Mr Smith as state manager and gave him a national role. The man would later leave the insurer to work at a brokering firm.
Mr Ward would go on to experience Crohn's disease, ulcers, scoliosis and a viral illness. He started struggling with work in 2010 and eventually took leave in December that year and did not return. His doctor concluded he was suffering severe post-traumatic stress disorder, which manifested physically, and was caused by the "systematic physical and psychological abuse" by his former manager. He was later declared indefinitely unfit for work and diagnosed with a major depressive order.
Allianz conceded Mr Smith's conduct caused Mr Ward's condition "to some extent" but claimed it was not liable for the physical abuse as it did not authorize it.
But Judge Smith held that Mr Smith's physical abuse was part of his attempts to improve the business. "It was intimately connected with Mr Smith’s task because it was done in the apparent execution of the authority which Allianz had given him as state manager."
The judge found Allianz was liable for Mr Smith's conduct and that Mr Ward's illness was a "calculated outcome" as Mr Smith was recklessly indifferent to whether it occurred. Shine Lawyers, which represented Mr Ward, said the damages totalling $1.39 million for loss of earnings were "life changing" for its client.
"He battled for six years unaware that he was suffering from a traumatic psychiatric injury until he was diagnosed in 2010, and his employers denied it from the start.”
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