Vicarious liability explored: Insights from CCIG Investments Pty Ltd v Schokman

CCIG Investments Pty Ltd v Schokman [2023] HCA 21

The High Court has unanimously held that an employer was not vicariously liable for an employee who urinated on a colleague while he was in a state of semi-consciousness whilst intoxicated in shared accommodation provided by the employer.

In doing so, the High Court has provided a number of key takeaways which are instructive in terms of reconciling the test to be applied where vicarious liability is alleged. The judgment draws a careful distinction between circumstances where the employment may provide the very occasion for the relevant act to occur (Prince Alfred College Inc v ADC [2016] HCA 37) and those where the acts committed are so remote as to be altogether outside of, and unconnected with, employment.

Key findings

• It is too simplistic to say that an employer will be held liable for the wrongful act of an employee if the act is committed in the course or scope of employment. Establishing whether a tortious act has occurred during the course or scope of employment depends on the circumstances of each case, informed by reference to previously decided cases.
• The attribution of vicarious liability reflects the policy of the law which posits that it would be unjust to make the employer responsible for every act of the employee. Whilst an employer can be vicariously liable for unauthorised, intentional or criminal acts of an employee, there are limits on its application. Relevantly, the policy of the law presupposes that an employer should not be held liable for acts totally unconnected with the employment.
• The enquiry as to the connection between the wrongful act and the employment is apposite in terms of reconciling whether it occurred during the course or scope of employment. The range of acts to be considered fall on a wide spectrum, however the High Court has reinforced that the common law distinguishes between:
  • the acts of a "stranger" (which includes circumstances where an employee does something so far removed from their duty as to be altogether outside of the scope of their employment such that the only connection is that the employment provided the mere occasion for the act¹); and
  • the acts of an employee who, because of the special nature of their role (such as an employee who is placed in a particular position of authority, power and trust in relation to a vulnerable category of potential victims, such as a school boarding master with responsibility for boarding students), gives occasion for the wrongful act and is therefore regarded as ostensibly being within the scope of their employment².

Background

Mr Schokman and Mr Hewett were both employed by CCIG as hospitality workers on Daydream Island. Part of their employment contracts required them to share accommodation.

In the early hours of 7 November 2016 (outside of work hours), Mr Hewett returned to the shared accommodation intoxicated after drinking at the staff bar. While Mr Schokman was asleep, he was woken by Mr Hewett urinating on his face. As a result of the incident, Mr Schokman suffered an exacerbation of his pre-existing sleep disorder and cataplexy (brief loss of voluntary muscle tone triggered by emotional stress) and brought a claim against his employer.

Mr Schokman claimed CCIG was vicariously liable for the negligent act of Mr Hewett.

Trial judge decision

The trial judge (Crow J) did not accept that the actions of Mr Hewett were committed in the course of his employment with CCIG, finding that there was an insufficient connection between the employment and the wrongful act. His Honour acknowledged that the circumstances arose out of the requirement to share accommodation but did not consider it fair to impose vicarious liability on CCIG for the conduct.

Court of Appeal decision

The Queensland Court of Appeal (per McMurdo JA with Fraser and Mullins JJA agreeing) allowed Mr Schokman's appeal on the issue of vicarious liability, finding that there was a requisite connection between the employment and Mr Hewett's actions because of the contractual requirement to share accommodation (attempting to draw an analogy with Bugge v Brown³ (1919) 26 CLR 110).

The High Court

In a unanimous judgment, the High Court held that CCIG was not liable for the actions of Mr Hewett.

The High Court confirmed that a finding of vicarious liability requires the tortious act of the employee to be committed in the course or scope of employment and that making this determination will depend on the facts of each case. An employer will not be liable if the act was unconnected to the employment. On this point, their Honours found "… without more the drunken act of urinating on another employee whilst they are asleep was not connected to anything the employee was required to do⁴".

The High Court clarified that for an act to be considered in the course of employment, it is insufficient to simply establish that employment created the opportunity for the wrongful act to take place. Their Honours distinguished this from cases where an employee is placed in a "special position" by virtue of their employment such that it provides the very occasion for the impugned conduct.

In the present case, Mr Hewett was not given a special role and no part of what he was employed to do was required in the accommodation. At most, the shared accommodation created a physical proximity to Mr Schokman, which was insufficient to establish vicarious liability.

Conclusion

This decision provides welcome guidance on the appropriate test to be applied to attribute vicarious liability to the wrongful act of an employee.

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¹ See Deatons Pty Ltd v Flew [1949] HCA 60 where a bartender was found not to have acted within the scope of her employment when she assaulted a customer with a glass when he asked to speak to the licensee.

² See Prince Alfred College [2016] HCA 37 where the relevant enquiry was directed to whether the role of a housemaster (in the context of allegations of sexual abuse of a child that took place in a school) was imbued with features of employment such as authority, power, trust, control and the ability to achieve intimacy such that the role could be said to have provided the very occasion for abuse.

³ Where the employee, who worked on a grazing property, was working in a paddock cutting thistles when he caused an open fire consequent upon cooking his midday meal. Isaacs J held it to be beyond question that the cooking of the meal was intimately connected with the performance of the day's task as the act of cooking the meal was authorised by his employer.

⁴ [25].