Vicarious liability not extended in shared staff accommodation incident

In brief - the High Court has allowed an appeal from a judgment of the Court of Appeal of the Supreme Court of Queensland, holding that vicarious liability did not extend to the circumstances. 

The appeal case of CCIG Investments Pty Limited v Schokman [2023] HCA 21 concerned whether an employer was liable for a tortious act committed by one employee against another in circumstances where the act occurred in shared staff accommodation in which the employees were required to live. The High Court found that the employer was not liable for the actions of their employee as the act in question was not considered to be in the course or scope of their employment.

Key takeaways

1. The test of vicarious liability applied in the seminal case of Prince Alfred College Inc v ADC [2016] HCA 37 (PAC) requiring a tortious act of the employee to be committed in the "course or scope of their employment" has been upheld and further clarified.
2. A finding of vicarious liability requires more than the employment providing the opportunity for the incident. 
3. The High Court focused on the identification of what an employee was employed to do and held out as being employed to do as being central to any inquiry about the "course of employment".
4. For an act to be said to be in the course of employment there must be regard to factors such as authority, power, trust, control and the ability to achieve intimacy with the victim.

Case background

In 2016, the respondent, Mr Schokman, commenced employment with the appellant at a resort in the Whitsunday Islands off the coast of Queensland. His employment required that he live on the island in furnished, shared accommodation. Mr Schokman shared his room with another employee, Mr Hewett. 

In the early morning of 7 November 2016, Mr Hewett returned to the shared accommodation in an intoxicated state from the staff bar. Around 3.30 am, Mr Schokman was woken in a distressed condition and unable to breathe and found Mr Hewett was urinating on his face. Mr Schokman suffered a cataplectic attack as a result of the incident. Mr Schokman brought proceedings against the appellant, relevantly claiming that the appellant was vicariously liable as an employer for the negligent act of Mr Hewett because that act was done in the course or scope of his employment.

Trial judge decision

The trial judge did not accept that the actions of Mr Hewett were committed in the course of his employment with the appellant. The trial judge found the relevant inquiry was whether there was a connection or nexus between the employment enterprise and the wrong that justified the imposition of vicarious liability on the employer for the wrong. His Honour accepted that the occasion arose out of the requirement of shared accommodation, but did not consider that the "drunken misadventure" was a fair allocation of the consequences of the risk arising to impose vicarious liability on the employer. There was no history of Mr Hewett becoming intoxicated and nothing which would have put the employer on notice that Mr Hewett may have engaged in what was considered bizarre conduct.

Court of Appeal

The Court of Appeal allowed Mr Schokman's appeal. Their Honours relied on the terms of Mr Hewett's employment to find the requisite connection between Mr Hewett's tortious act and his employment. The Court of Appeal noted that it was a term of Mr Hewett's employment that he reside in the staff accommodation and more particularly in the room assigned to him. It was found that Mr Hewett was occupying that room as an employee pursuant to, and under the obligations of, his employment contract, not as a stranger as referred to in Bugge v Brown [1919] HCA 5; 26 CLR 110 - cited in Schokman v CCIG Investments Pty Ltd (2022) 10 QR 310 at 326-327 [42]. The Court of Appeal found that there was the requisite connection between the employment and the employee's actions to find vicarious liability.

High Court Appeal

The High Court unanimously held that the appellant employer was not liable for the actions of Mr Hewett.

The Court noted that for an employer to be held vicariously liable for the tort of an employee the common law requires that the tortious act of the employee be committed within the course or scope of the employment. The Court referred to its decision inPAC and noted this was described as an essential requirement of the common law. The question of whether a wrongful act was committed in the course or scope of employment depends on the circumstances of the particular case, including identification of what the employee was actually employed to do, and held out as being employed to do. The majority decision (Keifel CJ, Gageler J, Gordon J and Jagot J) looked once more to PAC and whether any "special role" occasioned the incident. The Court concluded that "Nothing in the present case points to the drunken act in question being authorised, being in any way required by, or being incidental to, the employment. In truth it had no real connection to it."

Impact for institutions 

This judgment further clarifies the circumstances where an employer may be held vicariously liable for the actions of an employee. The Court will have regard to the role and scope of the employment. The Court noted that in certain circumstances, it will be necessary to have regard to any special role assigned to the employee, particularly when considering the sexual abuse of a child in a school or other institution.