Drunk bunk decision junked: High Court clarifies the scope of vicarious liability

07 August 2023

Can an employer be found vicariously liable for a tort committed by an employee during their time off? The High Court of Australia has used a bizarre incident to provide clarity.

In issue

  • Whether an employer could be found vicariously liable for an employee’s tortious conduct in drunkenly urinating on another employee at the employees’ shared (and employer-provided) accommodation.

The background

The plaintiff took up employment at Daydream Island Resort (which was run by the defendant) as a food and beverage supervisor. He was provided with accommodation on the island. After a while, another employee, H, moved in and shared the accommodation with the plaintiff. One evening, H, while apparently inebriated, urinated on the plaintiff while he was asleep. Unfortunately, the incident led to severe consequences for the plaintiff, badly exacerbating pre-existing conditions of narcolepsy and cataplexy and leading to a psychiatric injury.

The decisions at trial and on appeal

Please see our earlier case note for a summary of the decisions of Crow J (at first instance) and the Queensland Court of Appeal. In summary, Crow J considered that the defendant had discharged its duty of care to the plaintiff as his employer (this decision was not appealed). His Honour also considered that the doctrine of vicarious liability (under which an employer can be held liable for the tortious conduct of its employee) did not apply as the tort was not sufficiently connected with H’s employment. The plaintiff appealed this decision to the Court of Appeal.

The Court of Appeal saw the matter differently to Crow J, concluding that the employer was vicariously liable. McMurdo JA, who wrote the leading judgment, drew an analogy with the unusual circumstances in Bugge v Brown (1919) 26 CLR 110, where a cattle station worker’s employer was found vicariously liable for damage caused in a bushfire which had been caused by an ill-fated attempt by the worker to cook his employer-provided lunch in a paddock. In starting the fire, the worker disregarded an instruction from his employer to cook the food in an old homestead.

The issues on appeal

The key issue on appeal was whether the doctrine of vicarious liability applied.

The decision on appeal

Kiefel CJ and Gageler, Gordon and Jagot JJ wrote the plurality judgment, allowing the defendant’s appeal (with the result that the plaintiff’s claim failed). Their Honours confirmed that an employee’s tort must be committed in the course or scope of employment for vicarious liability to attach to it. While it is desirable for plaintiffs to be able to recover compensation from employers, who generally have better capacity to pay for the tort, it would also be unjust for an employer to be held vicariously liable for every act of their workforce.

The plurality analysed a series of decided cases on vicarious liability. As a result of that analysis, they concluded that the mere act of drunkenly urinating on a sleeping co-worker would not be within the course or scope of employment. The plaintiff argued that sharing accommodation with H rendered him vulnerable because it created a degree of intimacy between the two workers. The plurality did not accept this, stating that the accommodation merely provided an opportunity for the tort (which was insufficient for vicarious liability to attach).

The High Court considered that the circumstances of this case were not truly analogous to Bugge v Brown, contrary to the decision of the Court of Appeal. Bugge v Brown was different because, among other things, the food formed part of the worker’s remuneration, the lunch was to be consumed 'in the line of [his] employment' and he had been authorised by his employer to cook it. By comparison, in the present circumstances, the tortious urination was not authorised, required by or incidental to H’s employment with the defendant. There was no connection between the employment and the tort, and the employer was not vicariously liable.

Edelman and Steward JJ wrote a separate judgment concurring with the plurality. Their Honours embarked on an in-depth analysis of the history and doctrinal bases of vicarious liability. Edelman and Steward JJ concluded that the relevant act of H (urination) was not performed at a time and place where he could be monitored by the defendant. The employer had no real capacity to control H, who was on his leisure time. As such, vicarious liability did not attach.

Gleeson J also wrote a separate judgment concurring with the orders made. In her Honour’s view, the defendant’s employment of H did not create a legally relevant 'opportunity' or 'occasion' for the commission of the tort.

Implications for you

The High Court did not overhaul the doctrine of vicarious liability and decided this appeal using settled legal principles. Nevertheless, the case provides useful clarification on the limits of vicarious liability. The Queensland Court of Appeal’s decision had led to some concern that employers could be found vicariously liable even where the connection between employment and the tortious act was a tenuous one. The High Court’s decision should put these concerns to rest.

CCIG Investments Pty Ltd v Schokman [2023] HCA 21

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