The decision of Edelman and Steward JJ in CCIG Investments Pty Ltd v Schockman [2023] HCA 21 explains the three areas of law described as “vicarious liability” and how they operate to make someone liable for acts or omissions they did not personally commit.
Vicarious liability describing attributed acts
A defendants express, implied, apparent authorisation or ratification of wrongful acts will result in vicarious liability. For example an employee of a defendant’s conveyancing business used his position to defraud a client obtaining a conveyance of the client’s properties. This was not expressly or impliedly authorised by the defendant employer, but there was apparent or ostensible authority for the dishonest employee’s actions and the employer was therefore vicariously liable. The employer had held out the employee as its representative and the fraud was committed under cover of that authority. This type of vicarious liability imposes liability for the acts of the wrongdoer on the principal.
Vicarious liability describing attributed acts
This liability arises for a defendant where the defendant’s employee commits wrongful acts or omissions in the course of their employment. The test for liability requires identification of the powers and duties of employment and consideration of the sufficiency or closeness of the connection between the employee’s wrongful act (whether authorised or not) and those powers and duties of employment. This type of vicarious liability imposes the wrongdoers liability on the principal for policy reasons.
An example is an employee who was directed to cook a meal for fellow employees, but not to do so in a hut in a field, but in a homestead a mile away. The employee, contrary to a direct order from his employer, cooked the meal in the hut, started a fire that spread to the plaintiff’s land and caused damage. Even though the employee disobeyed an express order not to cook in the hut and did so anyway, that wrongful act was still in the course of the employees employment and so the employer was vicariously liable. The cooking was authorised, it was just done in the wrong location. This was a sufficient connection between the work duties and the wrongful act.
Vicarious liability describing a non-delegable duty
A non-delegable duty is a duty to ensure that reasonable care is taken. It is owed by employers to employees and by other types of defendants where the relationship between the defendant and the injured person is one involving care, supervision or control of the person or property of another. Schools also owe non-delegable duties to their students. It does not matter that the wrongdoing was unauthorised. It has not been definitively decided whether vicarious liability for a deliberate unauthorised breach of a non-delegable duty by someone else will result in liability for the defendant because of that non-delegable duty of care, but it probably does.