The High Court affirms vicarious liability is limited to employment relationships

Bird v DP (a pseudonym) [2024] HCA 41

In a watershed judgment, the High Court has rejected the expansion of the doctrine of vicarious liability in Australia to relationships outside of employment.

In a majority decision, the plurality quashed the suggestion that vicarious liability can attach for the acts of those who are not in an employment relationship (i.e. the acts of independent contractors or those in a relationship "akin to employment").

Crucially, the High Court emphasised that it is wrong to infer that fault or risk - such as control - ought give rise to vicarious liability, as the doctrine is concerned with attribution of liability, not fault.

Background

In 2020, the plaintiff commenced proceedings against the Roman Catholic Diocese of Ballarat¹ in the Supreme Court of Victoria claiming damages for psychological injuries he says he sustained as a result of sexual abuse committed by Father Bryan Coffey, a Catholic priest from St Patrick's (a church within the Diocese).

The plaintiff's claim alleged that the abuse was committed by Coffey on two separate occasions at his parents' home in Port Fairy in 1971, and was formulated:

• in primary negligence, on the basis that the Diocese failed to exercise effective authority, supervision and control of Coffey; and
• in vicarious liability as against the Diocese for Coffey's intentional torts.

First instance decision (VSC per Forrest J)

At first instance, Justice Forrest found for the plaintiff in vicarious liability, notwithstanding the determination that Coffey was not an employee of the Diocese and that the acts did not occur in the course of an agency relationship.

In reaching this decision, the primary judge:

• rejected the Diocese's proposition that prior Australian² and overseas (Canadian and UK decisions³) jurisprudence confined vicarious liability to relationships of employment; and
• reasoned that the correct approach for assessing the application of vicarious liability was to look to the "totality of the relationship". Indicia such as a person's power, control and authority over the plaintiff, and whether they were placed into that position by the entity to which vicarious liability is said to attach (in this case, the Diocese), were relevant to affirming the existence of vicarious liability, independent of any strict relationship of employment.

In furtherance of this formula, the primary judge found that the Diocese was vicariously liable for Coffey's abuse, noting that the Diocese had appointed Coffey as a priest, had ultimate authority over the parameters of his appointment, and Coffey's role was carried out as an extension of the Diocese's work and functions. The result being that Coffey had special power and authority over parishioners, including the plaintiff's family, such that his role gave him an inherent opportunity to commit the abuse by virtue of the position which the Diocese placed him in, despite the absence of an employment relationship.

The plaintiff's claim in primary negligence failed as Justice Forrest did not accept that the risk of harm was foreseeable to the Diocese.

Court of Appeal decision (Beach, Niall and Kaye JJA)

The Diocese appealed to the Victorian Supreme Court, which in turn dismissed the appeal in general concurrence with the primary judge's decision.

The majority decision of the High Court

Further to the Diocese's subsequent appeal to the High Court, a majority judgment delivered by Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ overturned the decision of the Victorian Court of Appeal and dismissed the plaintiff's proceeding on the basis that it was not open to hold the Diocese vicariously liable for Coffey's acts in the absence of an employment relationship.

To contextualise its finding, the majority examined the concept of vicarious liability and reinforced the clear limitations on the use of agency and secondary liability based on attribution of liability (the latter of which represents vicarious liability in its true or proper sense) to advance an argument seeking to attribute liability for the individual acts of a perpetrator (in this case, to the Diocese). To summarise, the High Court highlighted, with reference to existing case law:

• the law of agency did not permit an argument that Coffey was a true agent of the Diocese for the purposes of the abuse committed, as his acts were not done with the Diocese's express, implied or apparent authorisation and at no time were they ratified by the Diocese; and
• as to vicarious liability in the strict sense, the relationship of employment is a necessary precursor to a finding of vicarious liability.

As to the seminal question of whether it ought to expand the boundaries of vicarious liability beyond a relationship of employment to one that is "akin to employment"⁴ (aligning with the reasons of the primary judge and the Victorian Supreme Court), the majority answered in the negative as "[t]here is no solid foundation for expansion of the doctrine or for its bounds to be drawn" (at [48]). The majority outlined that appealing to policy considerations or the approach taken in Canada and the UK (which were predicated on a different set of propositions) are not a determinative basis for developing the principle in Australia.

Whilst the majority recognised the "harshness" of its decision, the High Court emphasised the uncertainty and indeterminacy that such an expansion would render, with reference to:

• the issues that this expansion has generated in the UK, noting the "criticism" aroused by the cases of Cox v Minister of Justice⁵ (where a prison service was found liable for injuries caused to a prison catering manager by the negligence of a prisoner) and Armes v Nottinghamshire County Council⁶ (where a local council was found liable for physical and sexual assaults allegedly carried out by two foster parents) which has seen "minds...differ" (at [62]);
• the issue that its expansion does not "fit within the body of accepted rules and principles" of vicarious liability as, for example, it would likely generate difficulty distinguishing employees from independent contractors more broadly.

Conclusion

The majority decision makes it clear that according to the current law in Australia, a strict relationship of employment is required to enliven the doctrine of vicarious liability, thereby nullifying attempts by abuse survivors to hold religious institutions liable for the acts of its unemployed clergy. More broadly, it extinguishes many additional novel vicarious liability arguments, such as liability for foster care agencies and statutory authorities for the acts of foster parents, and for the acts of volunteers for sporting organisations. The decision will have wide ranging implications for the formulation of claims in vicarious liability in this space.

Given the majority's observation that the effect of its decision was "harsh" and that "[r]eformulation of the law of vicarious liability is properly the province of the legislature" (at [67]), the High Court's decision may well presage legislative change in Australia. On a further note, the majority decided not to consider the plaintiff's additional argument - that the Diocese owed a non-delegable duty of care to the plaintiff - on a procedural technicality insofar as it was not pleaded at first instance or argued on appeal to the Victorian Supreme Court. In light of this, the majority decision may have been different had the High Court decided to reconsider its earlier decision in Lepore, which found that a non-delegable duty cannot arise for an action based upon intentional wrongs by delegates. It is likely that such an argument may be advanced at a future time.

¹ We note that as the Diocese was an unincorporated association, the plaintiff instituted proceedings against the Diocese through the current Bishop of Ballarat, Paul Bird, who was the nominated defendant for the purpose of the proceeding, pursuant to s 7 of the Legal Identity of Defendants (Organisational Child Abuse) Act 2018 (Vic).

² Hollis v Vabu Pty Ltd (2001) 207 CLR 21 (Hollis); Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 (Sweeney); Prince Alfred College Inc v ADC (2016) 258 CLR 134.

³ Bazley v Curry [1991] 2 SCR 534; Various Claimants v Catholic Child Welfare Society [2013] 2 AC 1.

⁴ To essentially overrule Hollis and Sweeney.

⁵ [2016] AC 660.

⁶ [2018] AC 355.