High Court clarifies the scope of employers’ vicarious liability

Parisa Hart

CCIG Investments Pty Ltd v Schokman [2023] HCA 21

The High Court has unanimously allowed an appeal from a judgment of the Court of Appeal of the Supreme Court of Queensland, holding that an employer was not vicariously liable for a tortious act committed by one employee upon another which occurred in shared staff accommodation in which the employer had required the employees to live.

Factual background

In 2016, the respondent, Mr Schokman, commenced employment with the appellant at the Daydream Island Resort in Queensland as a restaurant supervisor. The appellant required him to live on the island in furnished, shared accommodation.

Mr Schokman shared his room with Mr Hewett, another employee. In the early morning of 7 November 2016, Mr Hewett returned to the shared accommodation intoxicated. Around 3:30 am, Mr Schokman was awoken by Mr Hewett urinating on him, causing Mr Stockman to inhale and choke on the urine. As a result of the incident Mr Schokman suffered a cataplectic attack, that is, a sudden and ordinarily brief loss of voluntary muscle tone triggered by emotional distress.

Mr Schokman brought proceedings against the appellant on the two following bases:

1. that it had breached its duty of care owed to him as an employee, and

2. it was vicariously liable for Mr Hewett`s negligent act as its employee.

Decisions below

The trial judge accepted that the requirement to share accommodation provided the occasion for Mr Hewett’s wrongful act. However, his Honour dismissed the claim because there was no nexus between the employment enterprise and the wrong so as to justify the imposition of vicarious liability on the employer for the wrong. Mr Hewett`s bizarre actions were not committed in the course of his employment with the appellant and, therefore, it was not a fair allocation of the consequences of the risk to impose vicarious liability on the appellant for Mr Hewett’s ‘drunken misadventure’.

The Court of Appeal allowed the respondent’s appeal. The Court found that the circumstances of this case were similar to those in Bugge v Brown (1919) 26 CLR 110. Their Honours held that the requisite connection between Mr Hewett’s tortious act and his employment arose from the terms of his employment contract obliging him to share the room.

Appeal to the High Court

The High Court unanimously allowed the appeal, delivering three judgments, one by Kiefel CJ, Gageler, Gordon and Jagot JJ, a second by Edelman and Steward JJ and a third by Gleeson J.

Kiefel CJ, Gageler, Gordon and Jagot JJ pointed out that the attribution of vicarious liability reflects the policy of law but is controlled by the requirement that the employee`s tortious act be committed in the course of his/her employment (at [13]). The question whether the wrongful act was committed in the scope of employment ‘depends on the circumstances of the particular case’ and identification of what the employee was employed to do and ‘held out’ as being employed to do (at [15]).

The respondent sought to draw an analogy between the circumstances of the shared accommodation with those in Prince Alfred College Inc v ADC (2016) 258 CLR 134 involving the sexual abuse of a child in a school. He contended that his compulsory housing with Mr Hewett made him vulnerable because he was required to sleep in a setting which was intimate. However, in Prince Alfred College the enquiry was whether the abuser’s role as a housemaster placed him in such a position of power and intimacy that the performance of his role could be said to give the occasion for his wrongful acts such that they could be said to have been committed in the course or scope of the employment. That was not the case here where Mr Hewett was not assigned any special role concerning the respondent and no part of what Mr Hewett was employed to do was required to be done in the accommodation (at [36]).

Their Honours pointed to the fact that Mr Hewett was not assigned any special role concerning the respondent and no part of Mr Hewett’s employment powers or duties was required to be done in shared accommodation (at [36]). The circumstance of shared accommodation only created physical proximity between Mr Hewett and the respondent and provided the opportunity for Hewett’s drunken actions to affect the plaintiff. However, the provision of the mere opportunity for the act to occur was an insufficient connection to Mr Hewett’s employment for the purposes of establishing vicarious liability for that act (at [37]).

Their Honours also dismissed the analogy with Bugge v Brown and held that Isaacs J, who delivered the principal reasons in that case, did not say any connection between the employee’s tortious act and his or her employment was sufficient to establish the employer’s vicarious liability. In properly adopting the language in Bugge v Brown, an employer is not liable for acts committed by employees as a ‘stranger’ and that includes acts ‘so remote from [their] duty as to be altogether outside of, and unconnected with [their] employment’ (at [25]).

Edelman and Steward JJ stated that the characterisation of Mr Hewett`s tortious act was important. The first step was to identify Mr Hewett’s powers or duties of employment and then to characterise his wrongful act at a general level to determine whether that act was sufficiently connected with his powers or duties of employment. Their Honours held that the characterisation of Mr Hewett’s wrongful act was the ‘act of urination’ which was not sufficiently connected with any authorised powers or duties of his employment (at [85]). Their Honours further stated that Mr Hewett did not perform the wrongful act ‘at a time and place where his employer was permitted to be present or to monitor him’ and it was committed during his leisure time (at [87]). Accordingly, the employer was not vicariously liable for that act.

Gleeson J stated that the relevant provisions of Mr Hewett’s employment contract did not concern the work that Mr Hewett was engaged to do or the manner in which Mr Hewett was required to do that work. Rather, the provisions concerned Mr Hewett’s accommodation ‘when he was not working’ and imposed an obligation on him to ‘abide by the conditions associated with living on Daydream Island as detailed in the staff village regulations’ when occupying the room. Therefore, the terms of the contract did not serve to connect Mr Hewett’s tortious conduct to the work that he was employed to do (at [100]).

Ultimately the High Court held that the appellant was not liable for Mr Hewett`s actions because there was no connection between his wrongful act and powers and what he was employed to do to establish vicarious liability. Kiefel CJ, Gageler, Gordon & and Jagot JJ stated further that the drunken act of Mr Hewett was not authorised or in any way required by or incidental to his employment (at [25] and [33]). BN

Parisa Hart

Nigel Bowen Chambers