By Edward Cope, Associate and David Slatyer, Partner

In the joint majority judgment of Chief Justice Gageler, Justices Gordon, Edelman, Steward and Beech-Jones, their Honours asserted employment as a necessary precursor to a finding of vicarious liability, thus excluding the potential for liability to be imposed upon institutions with relationships “akin to employment”.

Background

In 2020, the respondent (“DP”) commenced proceedings against the Roman Catholic Diocese of Ballarat, through current Bishop Paul Bird, seeking damages for psychological injuries caused by Father Bryan Coffey (now deceased) who had sexually abused DP, at the age of five, on two separate occasions in 1971.

At first instance, the Victorian Supreme Court found the Diocese vicariously liable for the assaults committed by Coffey, despite finding that no bona fide relationship of employment or agency existed between Coffey and the Diocese. In doing so, the primary judge undertook a “holistic and broad inquiry into the circumstances” surrounding the relationship between the Diocese and Coffey; the role of an assistant parish priest; Coffey’s role within the Port Fairy Catholic community; the opportunity provided to Coffey to abuse his power and authority; the circumstances of the assaults; and Coffey’s relationship with DP and his family. Upon considering the “totality of the relationship”, the primary judge held such was “akin to employment” and thus subject to the imposition of a progressive doctrine of vicarious liability.

The Victorian Court of Appeal supported the primary judge’s finding, unanimously dismissing the Diocese’s appeal. The Diocese was granted special leave to appeal to the High Court.

High Court Appeal

In its determination, the High Court considered three primary questions:

• whether, absent a relationship of employment between a wrongdoer and a defendant, vicarious liability should attach to criminal conduct of the perpetrator;
• if the relationship between Coffey and the Diocese was one which gave rise to a relationship of vicarious liability, whether the Diocese was liable for Coffey’s conduct;
• whether this Court should consider DP’s notice of contention that the Diocese is liable for breach of a non-delegable duty owed to DP.

With respect to the scope of vicarious liability, the High Court unanimously answered the first question with “no”. It reiterated that the position in Australia is that “an employer may be vicariously liable for the acts of its employees, but there is no such liability for the acts of those who are not in an employment relationship” like independent contractors or those in a relationship ‘akin to employment’. In justifying such rejection of an expansion of the doctrine of vicarious liability, the Court cited two primary reasons: (i) the unintended consequences resulting from Courts in the United Kingdom and Canada attributing vicarious liability where there were relationships “akin to employment” between defendant institutions and perpetrators of historical abuse; and (ii) the likelihood that revision would further complicate the already fraught distinction between employees and independent contractors. Accordingly, the Court reasserted the rule in CCIG Investments Pty Ltd v Schokman and a long line of prior High Court authority that for vicarious liability to be found there must be a relationship of employment and “the wrongful acts must be committed in the course or scope of the employment”.

Given the absence of an employment relationship between Coffey and the Diocese, the second question regarding the liability of the Diocese was answered in the negative; the appeal was consequently allowed.

The Court also noted there could be no finding of agency – a doctrine often confused with “true” vicarious liability – in this case because the unlawful acts “were not done with the Diocese’s, or the then Bishop’s, express, implied or apparent authorisation”.

With respect to the third question, the Court declined to answer whether the Diocese could be held liable for breach of a non-delegable duty, which would have required the Court to overturn its previous decision of NSW v Lepore (2003) 212 CLR 511 that a non-delegable duty cannot arise for an action based upon intentional wrongs by delegates.  The Court refused to address this issue because DP had not pleaded a breach of a non-delegable duty, or the scope of that duty, in the Statement of Claim, and the issue had not been subject to evidential or factual scrutiny at trial.

Nevertheless, the Court did provide useful obiter comments on non-delegable duties, finding that a non-delegable duty “arises where the nature of the relationship between the defendant and the other person to whom the duty is owed is one where the defendant has assumed particular responsibility to ensure that care is taken, rather than merely to take reasonable care” and “where the defendant has “undertaken the care, supervision or control of the person or property of another or is so placed in relation to that person or [their] property as to assume a particular responsibility for [their] or its safety, in circumstances where the person affected might reasonably expect that due care will be exercised.”

Of note also, in a separate High Court decision delivered the same day, Willmott v State of Queensland, relating to abuse perpetrated on Ms Willmott when she was a State Ward, Edelman J stated at [112], contrary to Lepore:

“The non-delegable duty can be breached by a defendant’s or a third party’s intentional wrongdoing, although one formal view would require that breach of the non-delegable duty be pleaded as, or formally based upon, a failure by the defendant or the third party to take reasonable care rather than their intentional act of wrongdoing. On that formal view, the abuses alleged by Ms Willmot would be a failure by the alleged perpetrators of the abuse to take reasonable care, with the effect that there would be a breach of the State of Queensland’s duty, irrespective of whether the State of Queensland itself took all due care; it did not ensure that care was taken.”

Implications

In the words of Gleeson J in the minority, the High Court’s decision to reject expansion of the doctrine of vicarious liability in Bird v DP might be seen by many practitioners as “a missed opportunity for the Australian common law to develop in accordance with changed social conditions and in tandem with developments in other common law jurisdiction”.  Nevertheless, the decision provides long-awaited clarification on the scope of vicarious liability and the extent to which it applies to relationships beyond employment. Put simply, in the absence of an employment relationship, vicarious liability will not be imposed upon institutions for the conduct of its members.

The decision will be welcomed by both defendant institutions and insurers.  Though arguments of “agency” and breaches of “non-delegable duties” may now be more prevalent and refined.