CCIG Investments Pty Ltd v Schokman (HCA 2023)

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Key Takeaways

• The High Court of Australia (HCA) held that the drunken actions of an employee (accidental urination on the plaintiff) were not sufficiently or closely connected with any of his duties of employment.
• The employer held not vicariously liable, even if the incident occurred at the employer’s on-site resort shared accommodation, and it was required that the employees stay in specific rooms in that accommodation (QLD Court of Appeal decision overturned).
• The specific tortious action committed by the employee must always be sufficiently connected to the employment to allow a finding of vicarious liability.

Brief Facts

The plaintiff and another employee, Mr Hewitt, were employed by CCIG Investments Pty Ltd (the employer), which ran a resort based in the Whitsundays off the coast of Queensland. As part of their employment both were required to live on-site at the resort. They shared a room.

One night, after both men had been drinking during their time off, Mr Hewett, having returned home later than the plaintiff, accidentally urinated on the plaintiff’s face while he was sleeping. Mr Hewitt was so intoxicated that he had mistaken the plaintiff for the toilet (there was insufficient evidence to find the act was intentional). As a result of the alarming act, the plaintiff suffered a cataplectic attack, a condition which caused a sudden onset of muscle weakness brought about by a heightened emotional state. The plaintiff sued his employer for damages, alleging (amongst other things) that it was vicariously liable for Mr Hewitt’s actions.

The HCA’s judgment on vicarious liability

The Justices of the HCA, in three separate but unanimous judgments, held that the actions of Hewitt did not fall within the scope of an employer’s vicarious liability.

It was noted by all Justices that the applicable law in Australia regarding vicarious liability has been unclear, though this case, and the relatively recent cases of New South Wales v Lepore (‘Lepore’) and Prince Alfred College Inc v ADC (CLR 2016) (‘Prince Alfred College’) have sought to settle the extent and circumstances in which an employer can be held liable for their employee’s actions.

The Courts have previously determined that so long as the employee’s action is not so ‘distinctly remote and disconnected from his employment’, the doctrine of vicarious liability will be enlivened. But an employer is not held vicariously liable if the employee is engaged solely in their own interests or on a ‘frolic of their own’ (see Bugge v Brown (CLR 1919)).

More recently, in response to institutional sexual abuse cases, the Court has extended an employer’s liability to include actions, even criminal actions, which were only possible by virtue of the special position the employee occupied. Prince Alfred College and Lepore were cases involving sexual assault of pupils by their teachers, which found these unauthorised criminal acts nevertheless fit within the scope of the employer’s vicarious liability because the special position granted to the employee rendered them particularly able to undertake the tortious actions.

Justices Kiefel, Gageler, Gordon and Jagot, in their joint judgment distinguished the circumstances of this case from the Prince Alfred College case. They found that though Mr Hewitt’s employment, and specifically the necessity of living in close proximity to the plaintiff, provided the opportunity for the negligent act to take place, the incident itself was not due to any special position of authority granted to Mr Hewitt by the employer.

The circumstances were further distinguished from Bugge v Brown, as ultimately nothing pointed to Hewitt’s drunken act being authorised, required, incidental to, or connected at all with his employment.

The Court unanimously found that the circumstances of Mr Hewitt’s act of urination was not sufficiently or closely connected with any of his duties of employment to find the employer liable for this actions.

Implications

This case serves as a good reminder of the importance in vicarious liability matters to focus on the specific tortious actions in question, and whether there is a real and sufficient connection to employment.

Even if the terms of employment may have provided for the opportunity for actions to occur, the connection to the employment must always be demonstrated for vicarious liability to apply.

If the tortious actions are considered a frolic of their own, a significant deviation from the employer’s business for personal reasons, or bear no connection to the nature of the employee’s role, vicarious liability will not apply to make the employer liable.