Until fairly recently, most Australian lawyers would have agreed with the proposition that in order for an organisation to be liable for an individual’s torts, there would need to be a relationship of employment between the organisation and the individual. However, in the last couple of years, the Supreme Court of Victoria considered the position of Catholic priests (who are not employees of the Catholic Church) and held that the Catholic Church could be liable for the torts of priests notwithstanding the lack of an employment relationship.

The High Court has today overturned this line of authority and confirmed that an employment relationship is “necessary precursor” for vicarious liability. Although the decision arose in the context of a claim arising from child sexual abuse, the test for vicarious liability is relevant in every circumstance in which a plaintiff seeks to hold an organisation liable for the torts of an individual.

Bishop Bird v DP – the decisions below

A plaintiff whose name was anonymised as “DP” sued the Catholic Diocese of Ballarat seeking damages for sexual abuse which he alleged that he had suffered at the hands of an assistant priest in the Diocese nearly 50 years before the proceedings were commenced. DP alleged both direct negligence (that is, that the Diocese breached a duty of care which it owed to him by failing to detect that the assistant priest was a risk to children) and also vicarious liability of the Diocese for the torts of the assistant priest. At trial, DP’s direct negligence claim failed, but the vicarious liability claim succeeded, even though the assistant priest was not an employee of the Diocese. The Court of Appeal of the Supreme Court of Victoria upheld the finding of vicarious liability, finding that although the assistant priest was not an employee of the Diocese, he was a “representative” and an “emanation” of the Diocese, which was sufficient to engage vicarious liability.

Bishop Bird v DP – the High Court

The High Court, by a 6-1 majority, found that vicarious liability could not arise in the absence of an employment relationship. The High Court said that:

“the relationship of employment has always been a necessary precursor in this country to a finding of vicarious liability and it has always been necessary that the wrongful acts must be committed in the course or scope of the employment. There is no solid foundation for expansion of the doctrine or for its bounds to be redrawn”.

Gleeson J dissented on the question of vicarious liability, but would in any event have upheld the appeal, because her Honour held that the alleged abuse was not in the scope of the assistant priest’s employment, which (in accordance with the passage above) is the second stage of any vicarious liability inquiry.

The High Court did acknowledge one circumstance in which vicarious liability could arise in the absence of an employment relationship, which is the existence of an agency relationship.  However, this exception requires that:

• the agent be engaged by the principal for the purpose of creating legal relationships between the principal and third parties; and
• the agent be acting within the scope of the agent’s express or implied authority, or in a manner which is later ratified by the principal.

Given the very limited circumstances in which a principal would ordinarily wish to authorise an agent to commit torts, this exception is probably of limited relevance in most cases.  It certainly will not avail plaintiffs in historical child sexual abuse cases, or in cases where an employee’s conduct, although connected with employment, is not authorised by the employer.

Lessons from the case

Although initial media comment on the case has predictably focused on the effect of the decision on child sexual abuse cases, the implications are much wider (and the case is just as important to employment lawyers as it to those who bring or defend institutional abuse cases).  The decision does not change the law in relation to direct liability (for example, the circumstances in which an organisation might be liable for negligent failure to supervise a volunteer, or to properly investigate complaints made against a volunteer).  However, as the High Court said in the decision:

“vicarious liability is a form of strict liability, whereby a defendant is held liable for the wrongs of another, despite the defendant being free of fault.”

Being free of fault is not enough if the tortfeasor is an employee, and indeed, it is not now always enough in New South Wales even if the tortfeasor is not an employee.  As we reported at the time, the Civil Liability Act 2002 (NSW) was amended in 2018 to make organisations liable (in respect of child sexual abuse only, not all tortious conduct) of people who were “akin to employees”.  Importantly, however, the 2018 amendments are prospective, not retrospective – that is, liability of organisations for persons akin to employees in New South Wales only arises if the tort was committed after these changes were enacted in 2018.

Today’s High Court decision removes considerable uncertainty in relation to historical claims against volunteers, but it also serves as a reminder that the distinction between employees (to whom vicarious liability attaches) and independent contractors (to whom it does not) continues to be an essential consideration for any organisation which engages people to perform work of any kind.

For more on our employment law and dispute resolution capabilities, contact Leonard Lozina or Angus Macinnis

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