The High Court refuses to extend vicarious liability

Article by Jennifer Holdstock

The High Court has delivered a blistering masterclass on the common law principle of vicarious liability, reminding litigators and employment lawyers that the two-pronged test is that:

1. there must be an employment relationship between the parties; and
2. the conduct giving rise to the claim must have occurred in the course or scope of that employment relationship.

In the High Court case of Bird v DP [2024] HCA 41, the majority of Gageler CJ, Gordon, Edelman, Steward, and Beech-Jones JJ refused to follow trends in the United Kingdom, Canada and parts of Asia that have extended the applicability of vicarious liability to relationships “akin to employment”.

The Court found at [29] that:

“…in the absence of an employment relationship, it was not open to hold the Diocese vicariously liable for the two assaults committed by Coffey against DP. Any other analysis that uses language that infers fault or risk – such as control- is inapposite in a claim of vicarious liability…..pointing to fault seeks to appeal to basic principles or ideas that inform so much of the law of tort but have no role to play in vicarious liability. Vicarious liability is concerned with attribution of liability, not fault.”

At [67] the Court commented:

“Abandoning the threshold requirement of a relationship of employment for the purposes of vicarious liability does not fit within the body of accepted rules and principles. The difficulties that have existed and presently exist with vicarious liability in Australia, and overseas, as well as the other matters that have been identified, do not provide a proper basis for the development of the common law by extension of the threshold more broadly, or to address the specific issue of whether a diocese or a bishop may be held vicariously liable for the unlawful actions of a priest who sexually abuses a child, on an incremental basis.  Reformulation of the law of vicarious liability is properly the province of the legislature.”

The Court emphasised that over the last quarter of a century, it has resisted attempts to expand the boundaries to include independent contractors, instead insisting that the relevant relationship and duty is between an employer and employee.

The Court stated that should there be any broadening of the scope of vicarious liability, it is up to the legislature to make such a change. The examples used by the Court include where governments legislated to extend the limitation of actions act deadlines for suing to allow victim survivors of institutional child sex abuse to commence claims later in their life, and the introduction of the Legal Identity of Defendants (Organisational Child Abuse) Act 2018 to allow entities established through trust structures to be sued in court

Justice Gleeson delivered separate reasons but agreed with the majority that the appeal should be allowed. In a detailed analysis, Justice Gleeson found at [94] that a religious organisation that forms part of the Catholic Church can be held vicariously liable for the tort of a person engaged in pursuit of the purposes of the organisation whose legal relationship with the organisation is based upon canon law instead of a contract of employment.  However, she went on to find that the second limb of the test could not be satisfied, because it could not be said that the acts of the perpetrator occurred in the course of the employment, or in this case, in the course of his duties for the Diocese.

Facts

At first instance, J Forrest J in the Supreme Court of Victoria[1] found that assistant priest in the parish of Port Fairy, Father Coffey had assaulted the plaintiff on two occasions.  The Court found that the Diocese of Ballarat had not breached its duty of care because it was not reasonably foreseeable that Father Coffey would cause harm to a child parishioner.

While the Court found that Father Coffey was not an employee, the Diocese of Ballarat was vicariously liable for his tortious acts because of the “totality of the relationship” between the Diocese and Father Coffey, and his relationship within the parish community, including the plaintiff and his parents.

On appeal, the Victorian Court of Appeal[2] (Beach, Niall and Kaye JJA) dismissed the Diocese’s appeal on the vicarious liability argument. The Court of Appeal found at [129-130] that the relationship between a diocese and priest (including an assistant priest) is “sui generis”, meaning unique, and by virtue of his role as an assistant priest appointed by the Diocese, Coffey was an emanation of the Diocese, making the Diocese vicariously liable for his tortious assaults on the victim.

The fallout

This case has ramifications for any claimant seeking to sue a company or incorporated association for the acts of anybody who is not an employee, including volunteers and people in independent contracting roles or otherwise associated with the company or body.

Unless an employment relationship can be established, there can be no claim of vicarious liability.

[1] DP (a pseudonym) v Bird [2021] VSC 850

[2] Bird v DP (a pseudonym) (2023) 69V R 408