Canberra-based bus driver Vasko Petrovski was transporting trainee officers around the Blue Mountains for Exercise Stretton in February 2008, while working for contractor Serco Sodexo Defence Services.

The nighttime training operation was designed to, among other things, equip the group with ''fear-management techniques''.

The operation involved confronting the cadets with a gruesome, realistic crash scene, complete with fake blood, meat cut-offs, rescue dolls, and casualty simulation kits.

The problem was, the bus driver was unaware of what he was heading into.

As Mr Petrovski approached the area, he was suddenly stopped by a young woman, who pleaded for help.

He saw that she was on the ground with an injured leg.

Mr Petrovski then looked over to see a mini-bus on its side.

The scene became horrifying for the Macedonian-born driver, who had served in the Regular Yugoslav Army in the 1970s.

He saw a soldier who appeared to be dead with part of his brain on the ground, and noticed ''a lot of blood''.

The person sitting in the front of the bus was hunched over the horn, with an eye hanging out.

He saw two more dead bodies lying on the ground, and another person with their tongue lolling out of their mouth. Mr Petrovski's first thought was that someone had slaughtered the soldiers with a machine gun, and that the killer was still at the scene.

''He thought that there had been a massacre,'' ACT Supreme Court Justice Anthony Besanko wrote in a judgment published on Friday.

The driver panicked, and began trying to help the casualties, until one of the officers pulled him back and told him it was only a training exercise.

Mr Petrovski, who was visibly shaking and had a changing temperature, was taken to a bus to calm down.

He was eventually brought back to the caravan park where he was staying in Lithgow, and later returned to Canberra.

But the shock of the ''massacre'' stayed with him.

He claimed he developed mental illness because of the nervous shock he suffered, and sued the Australian Defence Force and Serco Sodexo Defence Services in the ACT Supreme Court.

But the ADF defended its actions, saying it had fully briefed him and other drivers on what they were about to see.

A sergeant gave evidence that the driver had even asked whether they were having a barbeque, after they purchased two full boxes of offal and six litre bottles of tomato sauce.

The sergeant claimed he told Mr Petrovski that the meat and sauce was going to be used to simulate the crash scene.

The officer said the plaintiff had helped unload the casualty simulation kits, tomato sauce and boxes of offal, and said all of the drivers were told to be careful of the soldiers lying on the ground.

Justice Besanko found a number of ''unsatisfactory'' aspects to Mr Petrovski's evidence, including his obfuscation when questioned over possible gambling problems.

ADF records of the operation noted that a driver suffered a stress reaction during the simulation.

Justice Besanko found in the driver's favour, saying his evidence, the ADF records, and his reactions were consistent with his claim he suffered a shock reaction.

''The simulated accident scene must have looked particularly graphic and arresting at night,'' he wrote.

''The plaintiff was genuinely shocked by what he saw. I think that it is more probable than not that he was not given an adequate and proper warning of what to expect and I so find.''

He was awarded damages of $35,000 for non-economic loss, $193,912 for past economic loss, $170,187 for future economic loss, and $57,123 for out-of-pocket expenses.

The exact orders of the ACT Supreme Court will be finalised at a later date.