Vicarious liability – whether in the course of employment – not straightforward

Schokman v CCIG Investments Pty Ltd [2022] QCA 38

I refer to my earlier post and the trial decision by Crow J to dismiss the plaintiff’s claim.

I refer you to the summary of the facts and that Crow J found the appellant’s co-worker’s actions were not committed in the course of his employment and hence, vicarious liability did not attach to the unsavoury conduct:

[28] ” I do not consider it a fair allocation of the consequence of the risk to impose vicarious liability upon the defendant employer for the drunken misadventure of Mr Hewett in respect of his toileting.”

[138] “In the present case I conclude that there is not a connection or nexus between the employment enterprise and the wrong committed by Mr Hewett that could justify the imposition of vicarious liability on the defendant for Mr Hewett’s wrong. I do not consider it a fair allocation of the consequence of the risk to impose vicarious liability upon the defendant employer for the drunken misadventure of Mr Hewett in respect of his toileting. Whilst I accept the occasion for the tort arose out of the requirement of shared accommodation, I do not consider that of itself, or coupled with the risks as discussed above inherent in sharing accommodation leads to a conclusion that it is fair that the defendant be held vicariously liable for Mr Hewett’s wrong. In this case, there is no history of MrHewett becoming intoxicated or having an intoxication related incident that would put the defendant on notice that Mr Hewett more than any other person may have engaged in the bizarre conduct which forms the urination event.

McMurdo JA (Mullins and Fraser JJA agreeing)

The Court followed Prince Alfred College Inc v ADC (2016) 258 CLR 134; [2016] HCA 37 and referred to the joint judgment of French CJ, Kiefel, Bell, Keane and Nettle JJ, wherein vicarious liability was considered:

[34] I will discuss first the joint judgment of French CJ, Kiefel, Bell, Keane and Nettle JJ. Their Honours commenced their discussion of vicarious liability as follows:[16]

“[39] Vicarious liability is imposed despite the employer not itself being at fault. Common law courts have struggled to identify a coherent basis for identifying the circumstances in which an employer should be held vicariously liable for negligent acts of an employee, let alone for intentional, criminal acts. There have been concerns about imposing an undue burden on employers who are not themselves at fault, and on their business enterprises. On the other hand, the circumstances of some cases have caused judges to exclaim that it would be “shocking” if the defendant employer were not held liable for the act of the employee. No doubt largely because of these tensions vicarious liability has been regarded as an unstable principle, one for which a “fully satisfactory rationale for the imposition of vicarious liability” has been “slow to appear in the case law”.

[40] Vicarious liability has not to date been regarded as a form of absolute liability, although policy choices, and the questions posed for the determination of vicarious liability, can lead in that direction. The traditional method of the common law of confining liability, in order to reflect some balance between competing interests, is the requirement that the employee’s wrongful act be committed in the course or scope of employment. At the least this provides an objective, rational basis for liability and for its parameters.”

(Footnotes omitted.)

They continued:[17]

“[41] Difficulties, however, often attend an inquiry as to whether an act can be said to be in the course or scope of employment. It is to some extent conclusionary and offers little guidance as to how to approach novel cases. It has the added disadvantage that it may be confused with its use in statutes, where it has a different operation. In statutes providing compensation for injury suffered by employees it operates as a limit upon a right to compensation; in the common law it is an essential requirement for vicarious liability. But it has not yet been suggested that it should be rejected. It remains a touchstone for liability.

[42] Long ago, Sir John Salmond proposed tests for determining whether an act was in the course of employment. They were whether the act (a) is authorised by the employer; or (b) is an unauthorised mode of doing some other act authorised by the employer. He went on further to explain that an employer would also be liable for unauthorised acts provided that they are “so connected” with authorised acts that they may be regarded as modes, although improper modes, of doing them.”

(Footnotes omitted.)

In considering whether the unauthorised conduct was “so connected” to the authorised mode of employment, so it may be considered as part of the course of employment, albeit an improper mode, the Court found the conduct was analogous to Bugge v Brown (1919) 26 CLR 110:

[40] In Bugge v Brown,[33] the defendant’s employee on a grazing property was negligent in lighting a fire which spread and destroyed property on an adjoining farm. The employee had been provided by his employer with the food for his lunch and was instructed to cook it at a different place from where he lit the fire. By a majority (Isaacs and Higgins JJ, Gavan Duffy J dissenting), the employer was held to be vicariously liable for the employee’s negligence. Isaacs J discussed the content of the condition for vicarious liability that the employee must have acted “in the course of his employment”. He said:[34]

“That phrase and various corresponding phrases, such as “scope of employment” (Citizens’ Life Assurance Co v Brown,Lancashire and Yorkshire Railway Co v Highley) and “sphere of employment” (Plumb’s Case) and other similar phrases, are used to indicate the just limits of a master’s responsibility for the wrongdoing of his servant. We have seen that the narrow view of “limits of authority” whether actual or implied, or even where a definite prohibition against doing the act complained of exists, or where even the law itself forbids the act, does not determine the question of liability to answer for the wrong; for the act complained of may nevertheless be within the course of the employment. But the law recognizes that it is equally unjust to make the master responsible for every act which the servant chooses to do. The limit of the rule — expressed in the widest form by the phrase “the course of the employment” or “the sphere of the employment” — is when the servant so acts as to be in effect a stranger in relation to his employer with respect to the act he has committed, so that the act is in law the unauthorized act of a stranger (Turberville v StampeCheshire v BaileyBlack v Christchurch Finance Co). This is the root of the matter.

The act of the servant complained of is regarded as outside the relation, and as that of a stranger: (a) if he did not assume to act within the scope of his employment (Hutchins v London County Council; Highley’s CaseLimpus’s Case); or (b) if what he did was a thing so remote from his duty as to be altogether outside of, and unconnected with, his employment (Barnes v Nunnery Colliery CoBlack v Christchurch Finance CoHarding’s CaseWeighill’s Case).”

(Citations Omitted.)

Accordingly, the Court allowed the appeal:

[42]  The present case is analogous to Bugge v Brown, although the act in this case occurred in the course of the provision of shelter, rather than sustenance, to the employee. It was a term of Hewett’s employment that he reside in the staff accommodation on the island, and more particularly in the room assigned to him. Whilst he remained employed at the resort, he was required to live there, and once he ceased to be employed at the resort, he was required to leave. The terms of his employment required him to take reasonable care that his acts did not adversely affect the health and safety of other persons. That was an obligation which governed his occupation of this room. He was not occupying the room as a stranger, but instead as an employee, pursuant to and under the obligations of his employment contract. There was in this case the requisite connection between his employment and the employee’s actions. The respondent should have been held to be vicariously liable for his negligence and the loss which it caused.

David Cormack

Brisbane Barrister and Mediator

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