Landmark High Court ruling on vicarious liability - abuse law

On 13 November 2024, the High Court of Australia delivered the much-anticipated decision in Bird v DP (a pseudonym) [2024] HCA 41, which has reaffirmed important principles about the operation of vicarious liability in Australia.

Traditionally in Australia, the concept of vicarious liability has involved a well-established two-stage test, before the liability for wrongdoing by one person (A) will be attributed to another (B):

• first, whether A was employed by B; and
• secondly, whether the relevant wrongdoing took place in the course or scope of A’s employment with B.

With the recent rise in claims against institutions for historic sexual abuse, judicial attention has focused on whether this test should capture other “employment like” relationships, such as those between members of the clergy and religious institutions. This is the proposition which the Court had occasion to consider, and ultimately, refused to accept in the long-awaited decision of Bird v DP.

Facts

Proceedings were instituted by DP, who was sexually abused by a Catholic priest (Fr Coffey) when he was five years old. The abuse took place on two occasions, within DP’s family home, while Fr Coffey was visiting the family. Because the Roman Catholic Diocese of Ballarat (the Diocese) is an unincorporated association, it was sued via its nominated defendant, the current Bishop, Paul Bird. DP alleged that the Diocese was vicariously and directly liable in negligence for the harm he sustained as a result of the abuse.

In the Supreme Court of Victoria, DP was successful on vicarious liability but failed to establish direct liability through negligence. The Court was not satisfied that there was actual wrongdoing by the Diocese, but rather that it should bear the legal wrongdoing of Fr Coffey.

In coming to that conclusion, the primary judge accepted that Fr Coffey was not employed by the Diocese, and did not make a finding that Fr Coffey was the Diocese’s agent. Instead, the primary judge looked at the nature of the relationship between Fr Coffey and the Diocese, finding that the Diocese exercised a significant amount of control over Fr Coffey’s role as a parish priest, and describing him as a “servant”, “emanation” and “representative” of the Diocese. The primary judge concluded that the relationship was capable of giving rise to vicarious liability.

The primary judge also concluded the assaults were conduct that fell within Fr Coffey’s role to the extent that the Diocese should be vicariously liable for them, because his role provided the opportunity for the abuse as well as the occasion for intimacy with DP. This was on the basis that Fr Coffey’s role as a priest included pastoral visits to parishioners and allowed him to have power over and intimacy with DP.

The Diocese appealed to the Victorian Court of Appeal, but was unsuccessful. The Court of Appeal rejected the Diocese’s argument that there could be no vicarious liability without an employment relationship. The Court of Appeal agreed with the primary judge’s characterisation of Fr Coffey as a “servant” of the Diocese, and that the Diocese exercised control over him, such that it should be vicariously liable for his conduct.

Appeal

There were three issues which the High Court was asked to consider on appeal:

• first, whether, under the common law of Australia, absent a relationship of employment between a wrongdoer and a defendant, vicarious liability applies – or should be extended – to a relationship which is not one of employment, a relationship sometimes described as “akin to employment”;
• secondly, if the relationship between Coffey and the Diocese was one which gave rise to a relationship of vicarious liability, whether the Diocese was liable for Coffey's conduct; and
• whether the Court should consider a Notice of Contention filed by DP that the Diocese is directly liable for breach of a non-delegable duty.

Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ gave joint reasons upholding the appeal and dismissing DP’s claim against the Diocese. Justice Jagot agreed in separate reasons, and Justice Gleeson agreed with the orders proposed by the majority but dissented in relation to the reasoning of the majority.

Vicarious liability

Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ commenced their reasoning on this issue by setting out in clear terms exactly what vicarious liability is under Australian law.

Their Honours first differentiated vicarious liability from liability which may arise in the context of “agency”. While the Court acknowledged the similarity with vicarious liability, they differentiated this as a type of primary responsibility where the acts of one person are attributed to another who authorised or ratified them, rather than the mere attribution of liability for those acts. Their Honours commented that although DP alleged that Fr Coffey was an agent of the Diocese, that could not have been the case, as the abuse could not be said to have been authorised by the Diocese.

Their Honours also distinguished the second area of law in which the term “vicarious liability” has been (inaccurately) used, namely the non-delegable duty of care (discussed below).

Their Honours clarified that vicarious liability involves the attribution of liability for acts, and not the acts themselves, to another. This is a type of strict liability, where the defendant will be liable for the wrongs of another even if it is free of fault. Their Honours confirmed that for this type of liability to arise, there has traditionally been a requirement of an employment relationship between the wrongdoer and the defendant. As such, their Honours considered whether this should be broadened to include relationships “akin to employment” such as the one between Fr Coffey and the Diocese.

While their Honours acknowledged that it was difficult to articulate a theory as to what made employment a necessary factor of the vicarious liability equation, they were certain that it was and had always been considered necessary, and that there was no solid foundation upon which that boundary should be redefined.

While other countries such as the United Kingdom and Canada had made that leap, that those countries were proceeding on fundamentally different understandings of vicarious liability than that accepted in Australia, and so the development of precedent by them was not found to be applicable to Australia. Furthermore, since redefining the concept of vicarious liability, recent cases in the United Kingdom and Canada highlighted the difficulties which such a course could invite, by creating uncertainty about when vicarious liability would attach.

Their Honours accepted that the relationship between Fr Coffey and the Diocese had some similarities to an employment relationship, and as such, that it may seem harsh to insist on a threshold of actual employment. This was held to be a necessary consequence of maintaining a clear and stable principle of vicarious liability, and to avoid uncertainty and indeterminacy moving forward. To the extent that an expansion of the principle might be seen as desirable in light of recent statutory efforts within Australia to remove barriers for victims of child sexual abuse seeking compensation from institutions, their Honours concluded that this was an issue for the legislature to determine, rather than the Court.

Justice Jagot agreed with the findings of the majority in separate reasons. Her Honour considered that the primary judge and Court of Appeal had incorrectly used precedent to reason that vicarious liability should attach to the Dicoese for Fr Coffey’s conduct.

Her Honour confirmed that when considering vicarious liability, it is essential to determine if the wrongdoer is an employee or an independent contractor as a first step. What the lower courts had done was use precedent for determining that question to create a new class of legal actor outside of those categories. They had also conflated the first and second test of vicarious liability, by considering whether the abuse was part of Fr Coffey’s role with the Diocese to consider whether there was a relationship capable of giving rise to vicarious liability.

Her Honour also agreed with the majority that there was no basis to extend the concept of vicarious liability in the manner that the lower courts had done, noting that there was no indication parliament had intended to do so by instituting legislation to make it easier to sue for child abuse, and also relying on cautionary tales from other jurisdictions in which it has now been said that the principle of vicarious liability has been widened too far.

Justice Gleeson dissented on the issue of the widening of vicarious liability and found that the relationship between Fr Coffey and the Diocese attracted vicarious liability. However Her Honour ultimately found the abuse did not occur within the course of that relationship.

Her Honour noted that law reform (such as the removal of limitation periods) had been implemented around Australia to enable victims of child abuse to bring claims against institutions. Her Honour said that without the broadening of vicarious liability to encompass employment-like relationships such as the one between Fr Coffey and the Diocese, that purpose would be significantly diminished. As such, her Honour considered this case a missed opportunity for the development of the law.

In effect, Justice Gleeson's view was that the expansion of the principle would be modest, and would support the concept that vicarious liability will apply to a defendant for the acts of those who support the defendant’s enterprise. Her Honour also saw the distinction between employees and contractors for the purpose of vicarious liability as a distraction from the reality that there are situations where the tortfeasor is neither, and the Court should look at the nature of the relationship to see if it is akin to employment.

Despite that finding, Justice Gleeson was not satisfied that the abuse fell within Fr Coffey’s role as a priest, such that vicarious liability would attach even if it was broadened to encompass the employment-like relationship. The mere fact that Fr Coffey’s role placed him in a position of trust was not enough; Justice Gleeson found that his role did not justify him spending time alone with DP, nor the power or authority to insist on doing so. In short, his role gave him the opportunity to harm DP, but not the occasion to do so in the relevant sense.

Non delegable duty

The issue of non-delegable duty was raised by DP as a Notice of Contention. Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ examined this issue as part of their broader reasoning. Their Honours held that a breach of a non-delegable duty is a type of direct, rather than vicarious liability. It involves a situation where a defendant has assumed particular responsibility to ensure that care is taken, rather than merely to take reasonable care. Their Honours refused to consider this issue in the context of the case, as it was not argued before the lower courts and as such, the Diocese was not in a position to meet it.

Justice Jagot also agreed with the majority that the point was raised too late, but her Honour also said that the non-delegable duty which had been raised (namely, that the Diocese had a duty to “protect” DP from a risk of harm associated with Fr Coffey having unsupervised access to him) was incoherent and indeterminate, raising more questions than it answered. Justice Gleeson also declined to determine the question of non-delegable duty given the late stage at which it was raised.

Implications

This judgment has brought much needed clarity to the doctrine of vicarious liability in Australia. The High Court has clearly stated that there must be a true employment relationship for vicarious liability in the proper sense to arise, and that this is a question of fact and not degree.

Given the significant increase in claims for sexual abuse of children (which are usually framed in both direct and vicarious liability), this clarification will be welcome to institutions who have historically operated outside of the traditional employment sphere.

In assessing liability in actions against those institutions there will need to be a greater focus on negligence principles, including foreseeability of risk, in the particular circumstances of each case. Issues surrounding the existence of a non-delegable duty of care in the religious context, and the application of that duty of care to deliberate wrongdoing of perpetrators remains for further judicial consideration.