Luke Geary, Partner, Hudson Digby, Senior Associate and Sara Taylor, Lawyer, at Mills Oakley unravels the scope of an employer’s responsibility and shares their insight on navigating the intricacies of vicarious liability in light of recent legal precedents. 
The High Court has ruled on the scope of vicarious liability for wrongful acts in its recent decision of the High Court in CCIG Investments Pty Ltd v Schokman[1] handed down on 2 August 2023. This decision considered the reasoning in other prominent cases which had previously come before the High Court including Prince Alfred College Incorporated v ADC[2] (Prince Alfred College) and Bugge v Brown[3].
These proceedings concerned two employees, Mr Schokman and Mr Hewett, who worked on a resort in the Whitsunday Islands. Due to the remote nature of the resort, it was a requirement of their employment that they lived in furnished accommodation provided by the employer, which they shared. One night, after getting intoxicated, Mr Hewett returned to their accommodation, where Mr Schokman was sleeping, and urinated on Mr Schokman, who, in his distress, suffered a cataplectic attack. Mr Schokman brought an action in vicarious liability against the employer for the conduct of Mr Hewett. Overturning the Queensland Court of Appeal’s earlier ruling in favour of the Plaintiff, the High Court held that the employer was not vicariously liable for Mr Hewett’s negligent acts.
The similarity between the circumstances in Prince Alfred College and the present case was a primary consideration of the majority judgment in formulating their decision. In Prince Alfred College, the High Court confirmed that an employer can be vicariously liable for the intentional torts (and even criminal conduct) committed by its employee, where it provided the employee the ‘opportunity’ and the ‘occasion’ to complete the relevant conduct. In doing so, the High Court considered that the employee’s position had to put the employee in a special role vis-à-vis the victim – one which placed the employee in a position of authority, power, trust and control over the victim, with the ability to achieve a level of intimacy which facilitated the wrongful act.
In the present case, Mr Schokman argued that Mr Hewett’s employment placed him in such a position vis-à-vis Mr Schokman. Mr Schokman advanced that a part of Mr Hewett’s role (and indeed Mr Schokman’s role), was that he was required to reside in the housing he shared with Mr Schokman. Mr Schokman contended that aspect of the role – the intimate setting of sleeping in shared accommodation – made Mr Schokman vulnerable to Mr Hewett’s wrongful act and, applying the test as formulated in Prince Alfred College, meant that their employer ought to be vicariously liable for Mr Hewett’s conduct. The High Court indicated that Mr Schokman’s position, in part, concerned his vulnerability to Mr Hewett, by reason of his own employment, not Mr Hewett’s employment. That enquiry is relevant to the question of negligence (which was not an issue before the Court), not vicarious liability.[4] Ultimately, the High Court did not accept that (following Prince Alfred College) gave Mr Hewett the ‘opportunity’ and ‘occasion for his conduct, and instead held that “The most that could be said to arise from the circumstance of shared accommodation was that it created physical proximity between the two men”.[5]
The High Court highlighted a distinction between whether the employment provides the mere opportunity for the wrongful act to take place or whether it in fact provides the very occasion for it. It is not sufficient that the wrongful act would not have occurred ‘but for’ the employment, there must be a connection between the wrongful act, and kinds of responsibilities which are encompassed within the scope and course of employee’s employment. In Mr Schokman’s circumstances, Mr Hewett’s wrongful acts, were not authorised or incidental to his employment, and ultimately had no real connection to it.
Whereas the Supreme Court of the United Kingdom is often quoted as declaring ‘vicarious liability is on the move’, the decision in CCIG Investments Pty Ltd v Schokman demonstrates this is a High Court which has not been afraid to adopt a narrower approach than lower courts on questions concerning employment and vicarious liability.[6] Ultimately, it is a reminder that vicarious liability, outside of the usual, clear-cut cases, can pose difficulties for even the most seasoned practitioners. It is an area which will benefit from further clarification from the High Court as to the kinds of matters that will satisfy its test as set out in Prince Alfred College as cases like CCIG Investments Pty Ltd v Schokman continue to arise.
Luke regularly acts for ASX200 listed companies, impact financiers, non-profits and religious institutions nationally. Luke also acts for individuals in high profile, social justice issues cases.
Luke has particular expertise assisting institutions in responding to claims of child sexual abuse under a restorative justice framework and in accordance with best practice principles identified by the Royal Commission into Institutional Responses to Child Sexual Abuse. In other instances, Luke acts on behalf of survivors in certain cases against government agencies and other institutions.
Additionally, Luke has been recognised as one of Australia’s leading lawyers representing victims of human trafficking and labour exploitation. Luke is a recognised expert in modern slavery law and assists large organisations in their compliance with this new regulatory regime.
Luke is often called upon by NFPs / charities at times of crisis to assist them to manage governance, operational and reputational issues which have arisen and which are critical to their survival, typically in Royal Commissions, Coronial Inquests and other major public Inquiries.
Luke is the founder and former managing partner of the unique social enterprise law firms ‘Salvos Legal’ and ‘Salvos Legal Humanitarian’, which are wholly owned by The Salvation Army. You may connect with Luke via LinkedIn
Hudson is a Senior Associate in the NFPs, Human Rights and Social Impact Team. From a background in commercial litigation, Hudson now works with not-for-profits and charities in jurisdictions around the country to provide astute advice and find favourable outcomes in disputes and regulatory compliance issues. Connect with Hudson via LinkedIn
Sara has been a lawyer in the NFPs, Human Rights and Social Impact Team at Mills Oakley since early 2022. As part of her practice, Sara regularly acts for not-for-profits, charities and individuals including survivors of historical child sexual abuse, in civil claims surrounding institutional abuse. Connect with Sara via LinkedIn
[1] [2023] HCA 21.
[2] [2016] HCA 37.
[3] (1919) 26 CLR 110.
[4] [2023] HCA 21, [9].
[5] [2023] HCA 21, [37].
[6] While the High Court decisions of CFMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 concerned the classification of employees or independent contractors for the purpose of calculating employee benefits, it limits the scope of the ‘multi-factor test’ adopted following the High Court’s decision of Hollis v Vabu [2001] HCA 44, itself concerning vicarious liability
