On 2 August 2023 the High Court of Australia allowed an appeal by CCIG Investments Pty Ltd (‘the employer’) and set aside the orders of the Supreme Court of Queensland in a personal injury claim by Mr Schokman (‘the injured employee’). The case concerns liability attribution, or the law of when one person has to pay for someone else doing something wrong. Specifically when an employer is liable for personal injury caused by an employee to someone else.
The Facts
The injured employee was required to live in shared accommodation with Mr Hewitt (‘the tortfeasor’), a fellow employee, at Daydream Island Resort and Spa. This was a requirement of their employment contracts. The injured employee was the more senior staff member of the two.
In the early hours of 7 November 2016, the injured employee was asleep in bed, the tortfeasor had been out drinking and was intoxicated and urinated on the injured employee. The result was a psychiatric injury for the injured employee.
Queensland Supreme Court Trial
At trial, the injured employee alleged that the employer was negligent in not preventing the injury and was vicariously liable for the actions of the tortfeasor in urinating on the injured employee. The injured employee was unsuccessful.
Queensland Court of Appeal
The injured employee appealed regarding vicarious liability but not regarding direct negligence. He was successful on vicarious liability in the appeal.
High Court of Australia
The employer appealed and the majority decision in the High Court of Australia of Kiefel CJ, Gageler, Gordon and Jagot JJ allowed the appeal and said at [46]: ‘Nothing in the present case points to the drunken act in question being authorised by, being in any way required by, or being incidental to, the employment. In truth, it had no real connection to it.’
The majority stated at [12]: ‘For an employer to be held liable for the tort of an employee the common law requires that the tortious act of the employee be committed in the course or scope of the employment.’ At [16]: ‘an employer should not be held liable for acts totally unconnected with the employment.’ At [17]: ‘Because the law strives for coherence, the courts commonly look to decided cases for guidance as to when vicarious liability may be said to arise. Such an approach was said in Prince Alfred College to be orthodox and one which should be followed.’ At 25: ‘Here, it might be thought that without more the drunken act of urinating on another employee whilst they were asleep was not connected to anything the employee was employed to do.’
The majority pointed out that in Deatons Pty Ltd v Flew (1949) 79 CLR 370 at 379-381, an employer was not vicariously liable for a bar maid throwing a glass at a customer when the customer asked to speak to the licensee. The majority at [26]: ‘Her actions were “quite unconnected” with her employment. They were not done under the employer’s express or implied authority, or an incident of or consequence of anything she was employed to do.’ The majority at [32] approved of the view by Diplock LJ in Morris v C W Martin & Sons Ltd, ‘that for an act to be said to be in the course of employment something more is necessary than that the employment has merely created the opportunity for the wrongful act to take place.’ Another example where it was found there was no vicariously liability was when an internal auditor employed by a company unlawfully copied data and uploaded it to a publicly accessible website in order to cause harm to the company. Employees whose data was disclosed brought claims based on vicarious liability. In that case in his decision in Various Claimants v Wm Morrison Supermarkets Plc [2020] AC 989 at 1016 [25], Lord Reid PSC said that the mere fact that his employment provided the internal auditor with an opportunity to commit the wrongful act was not sufficient to warrant the imposition of liability.
Regarding the case of a school employee who allegedly sexually abused students in his care, the majority at [34] thought that ‘Features of the employment such as authority, power, trust, control and the ability to achieve intimacy should be considered. Clearly a role embodying features of this kind may point to a strong connection between the employment and the wrongful act. The employment may be seen to provide more than a mere opportunity for the act to take place; it may provide the very occasion for it.’
At [36] the majority found that ‘[the tortfeasor] was not assigned any special role concerning [the injured employee] and no part of what Mr Hewett was employed to do was required to be done in the accommodation.’
What is the Test for Employer Vicarious Liability?
It would appear then that to found vicarious liability, the employer will have needed to have both:
- created the opportunity for the tort to be committed; and
- authorised work duties that are sufficiently connected to the tort that the employer should be liable.
In working out whether the employer should be liable, considering whether there was vicarious liability in other cases, the factors that resulted in there being vicarious liability in those cases compared to the case you are considering, and whether it ‘feels right’ that the employer should be liable due to a connection between the tort and the authorised work duties, seems to be as close as we can estimate what the test is. In Schockman, the employer was running a business that required its staff live in shared accommodation. That did create a risk but urinating on a fellow employee was so far from any authorised work duty, or even incorrect way or performing a work duty, that there simply was no vicarious liability.
However, it is hard to see how an internal auditor employee who is tasked with disclosing employee data to an external auditor, and who then leaks the data without authority, does not make their employer vicariously liability, but a school staff member who sexually abuses students could make the school liable. Surely by giving the internal employee access to the data and authority to give it to one person, then giving it to another person without authorisation in a way that causes damage to someone else, ought to be a basis for vicarious liability, if creating the ‘occasion’ for children to be abused by a school staff member could result in vicarious liability. How else could it be possible for a school to be vicariously liable for a staff member sexually abusing students – obviously without authority, but in circumstances where the school created the opportunity and the risk. Even if the school staff member was authorised to have some degree of physical contact with students, for example holding their hands, giving them a hug etc, it is hard to see how more serious levels of sexual abuse could be any more connected to the employment than the internal auditor who leaked confidential data on purpose. Therefore, we think there has to be a ‘feels right’ aspect to the test and legal certainty in a novel case will be difficult until it has been decided by the Court. The politics of the case are probably relevant too and in a child abuse case the Court may be more inclined to stretch the connection between the authorised employment and the abuse so at to result in vicarious liability. It will be helpful if there are already Court decisions about cases similar to the case you are considering. There will be vicarious liability if the tort was committed in a way by the tortfeasor to that was an incorrect way of carrying out an authorised work duty. So for example, if the internal auditor, due to ‘fat fingers’ sent confidential data to the wrong recipient by mistake when typing an email address, there would surely be vicarious liability.
In Schokman, the urinating on a fellowing employee was surely a criminal assault but that did not seem to have been alleged or considered – perhaps because the injured person thought that introducing a criminal element would make it harder to win.
CCIG Investments Pty Ltd v Schokman [2023] HCA 21