High Court finds that tortious actions in shared accommodation merely a piddle in the large puddle of vicarious liability

Limelight Articles

Limelight 09/23

High Court finds that tortious actions in shared accommodation merely a piddle in the large puddle of vicarious liability

Authors, Joe Parisi , Madeline Coats

What do the Whitsunday Islands, intoxication, shared accommodation and urination have in common?

In the recent decision of CCIG Investments Pty Ltd v Schokman [2023] HCA 21, the High Court found that an employer, who provided accommodation for employees on Daydream Island, was not vicariously liable for the negligent act of an employee who urinated on a co-worker.

Background

Mr Schokman was employed as a Food and Beverage Supervisor at Daydream Island Resort and Spa in the Whitsunday Islands (resort). The employment contract signed by Mr Schokman required him to live on the island in shared accommodation provided by his employer and at a cost of $70 per week.

Mr Schokman lived in the shared accommodation with another employee, Mr Hewett.

In the early hours of 7 November 2016, Mr Hewett returned to the shared accommodation in an intoxicated state after drinking at the staff bar. At 3:00am Mr Schokman was woken by the sounds of Mr Hewett vomiting. Around 3.30am Mr Schokman was woken again; however, this time he was unable to breathe as Mr Hewett was standing over him urinating on him and into his mouth.

As a result of the incident, Mr Schokman suffered a cataplectic attack – a sudden and brief onset of muscle precipitated by intense emotional stress.

Mr Schokman alleged the incident aggravated his pre-existing medical conditions of narcolepsy and cataplexy.

Mr Schokman brought proceedings in Queensland against the resort, as his employer, claiming that the resort breached its duty of care andthat it was vicariously liable for the negligent acts of its employee, Mr Hewett, because the acts were done in the course or scope of his employment.

First instance decision

The trial judge accepted that Mr Hewett had intended to urinate in the toilet but, due to his level of intoxication, that he urinated on Mr Schonkman by mistake.

The trial judge also dismissed the claim and concluded that the resort was not liable for Mr Hewett’s drunken debacle as there had been no history of intoxication or anything else that would suggest his behaviour to be common, and that Mr Hewett’s actions were not committed in the course of his employment.

Mr Schonkman appealed.

Appeal

The Queensland Supreme Court of Appeal allowed Mr Schokman’s appeal on the grounds that the resort had contractually required staff to live in shared accommodation and that there was a requisite connection between the employment and the actions of Mr Hewett.

As a result, the resort was held vicariously liable for Mr Hewett’s actions and damages were awarded in the amount of $431,738.88.

Vicarious liability

For an employer to be held liable for the tort of an employee, the law requires that the act of the employee be committed in the course or scope of the employment.

This rule of law reflects that, when an employee is acting in the course of their employment, it is fair to make an employer legally responsible for an injury caused to another employee or person.

This avoids a situation where an injured person may have to bear their own loss or sue the individual employee, who is unlikely to have any insurance.

The question of whether a negligent act was committed in the course of employment depends on the circumstances of each case. However, it is determined by identifying what the employee was actually employed to do for the employer.

The issue of whether an employee is acting in the course of their employment is not determined by whether the negligent act was “authorised” by the employer. An “unauthorised” act, even a criminal act, can be committed in the course of employment.

However, the law also recognises that it would be unfair to make an employer liable for every act which the employee chooses to do – especially when they are on a “frolic” of their own.

The resort appealed to the High Court.

High Court decision

The High Court unanimously allowed the employer’s appeal and dismissed Mr Schokman’s claim.

The High Court held that the employer was not liable for the actions of Mr Hewett as the drunken act of Mr Hewett did not occur in the course or scope of his employment. In this regard, the High Court noted that, at the time of the incident, Mr Hewett was “at leisure” and not at his place of work. He was not carrying out his duties of employment.

The High Court concluded that the drunken act of urinating on Mr Schokman was not authorised by the employer and was not, in any way, required by or incidental to the employment: “in truth, it had no real connection to it”.

It was said the most that the shared accommodation created was “the opportunity for Mr Hewett’s drunken actions to affect Mr Schokman”.

Justices Edelman and Steward (who wrote a separate judgment) emphasised that the employer’s power to monitor its employees did not extend to actions during their leisure time or in personal living quarters.

Implications

The decision of the High Court provides important guidance in relation to the limits of an employer’s vicarious liability – especially in relation to cases where an employee is required to live in shared accommodation provided by the employer.

The decision makes it clear that, for an employer to be held vicariously liable, there must be a connection between the wrongful act and the employment, rather than employment merely presenting as the opportunity for the action.

Joe Parisi Principal, Adelaide Direct: +61 8 8215 7006 jparisi@gclegal.com.au

This publication constitutes a summary of the information of the subject matter covered. This information is not intended to be nor should it be relied upon as legal or any other type of professional advice. For further information in relation to this subject matter please contact the author.