Does vicarious liability exist in the absence of an employer/employee relationship?

On November 13, 2024, the High Court unanimously overturned the decision of the appellate court to find that vicarious liability could not exist in the absence of an employer/employee relationship.

The claim in a nutshell

The Plaintiff alleged that in 1971, on two occasions at the family home, he was assaulted and sexually abused by Father Bryan Coffey (now deceased) ("Coffey"). At first instance, the Diocese, through the current Bishop of Ballarat, Paul Bird, was found to be vicariously liable for the assaults, notwithstanding a finding that Coffey was not an employee of the Diocese and that no agency relationship existed. The Diocese appealed the decision and the Court of Appeal unanimously dismissed the appeal. The Diocese was later granted special leave to appeal to the High Court.

The appeal before the High Court raised three issues:

1. whether vicarious liability should be extended to a relationship 'akin to employment';
2. if vicarious liability existed, was the Diocese liable for Coffey's conduct?; and
3. whether the Court should consider the Plaintiff's notice of contention that the Diocese is liable for breach for a non-delegable duty owed to the Plaintiff.

The High Court answered 'No' to all three issues.

The foundations of the Diocese's case

The Diocese relied on the following arguments:

• vicarious liability at law is confined to a relationship of employment
• there was no direct liability owed to Plaintiff
• the Diocese could not have known of the risk Coffey posed prior to, or during 1971; the risk was not foreseeable.

The High Court's assessment

• The joint judgment of Gageler CJ, Gordon, Edelman, Seward, and Beech-Jones JJ (with Gleeson J dissenting) revealed:
• The Court rejected the notion to expand the boundaries of vicarious liability beyond a relationship of employment to one that is "akin to employment".

The Court did not accept an overarching theory based on "enterprise risk" beyond any employment relationship, finding:

"a 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 of scope of the employment. There is no solid foundation for expansion of the doctrine or for its bounds to be redrawn" (CCIG Investments Pty Ltd v Schokman (2023) 97 ALJR 551 at 555 [13], 565 [64]; 410 ALR 479 at 482-483,
495).

• Over the last 25 years, the Court has repeatedly refused to extend the doctrine to include independent contractors or policy considerations as the only basis for developing the principle. The High Court noted that doing so would introduce too much uncertainty, as seen in the jurisdictions of the United Kingdom and Canada.
• The Court further noted that any such fundamental changes to the law in relation to vicarious liability sit with the legislature rather than the judiciary.

It is worth, however, considering the separate judgment of Gleeson J. Whilst Her Honour agreed with the orders proposed by the majority, she offered a different view as to that conclusion. In Her Honour's view, the Diocese was not vicariously liable on the basis that the torts were not committed in the course of Coffey's performance of his role as assistant parish priest. Her Honour also lamented that "This case was a missed opportunity for the Australian Common law to develop in accordance with changed social conditions and in tandem with developments in other common law jurisdictions".

How will this case impact the claim landscape moving forward?

This High Court decision provides clarity and confirms that an employer/employee relationship has to exist in order for the issue of vicarious liability to come into contention. Organisations that hire/contract staff in a relationship that is "akin to employment" i.e. independent contractors, volunteers etc. will not give rise to vicarious liability.

This High Court decision provides relief and a reminder to organisations that work with or rely on volunteers and independent contracts will not be vicariously liable for torts that those non-employees commit – though the question of whether or not the organisation is directly liable is entirely separate and will turn on the facts.