Vicarious liability in the absence of employment – shifting standards in historical institutional matters

In a noteworthy institutional claim, the NSW Court of Appeal held that the Diocese of Maitland-Newcastle was vicariously liable for the assaults of a non–employee priest in 1969, on a Grade Eight student, and allowed an award which included aggravated damages as against the Diocese.

In issue

In this recent decision of the New South Wales Supreme Court, Acting Justice Schmidt was asked to decide on a number of thorny issues in the institutional space, being:

1. the admissibility of tendency evidence pursuant to section 97 of the Evidence Act 1995 (NSW),
2. whether vicarious liability could attach to a non-employee, being a priest of the Maitland-Newcastle Diocese,
3. whether imperfection in evidence, or the degree of imperfection required in evidence, could lead to rejection, and
4. the availability of non-economic loss damages, namely aggravated and exemplary damages, against a non-individual tortfeasor.

The background

The plaintiff (AA) alleged he was physically and sexually assaulted by a parish priest, Father P, at St Patrick’s Catholic Church Wallsend in 1969. The plaintiff alleged the abuse occurred while he was a student in 2^nd form (now Grade Eight) at Wallsend High School, and in Father P’s residence at the Wingham Presbytery where he lived alone.

It was not in issue that Father P invited the plaintiff and his friend, Mr P, to the residence, but the Diocese otherwise denied the abuse occurred. The Diocese further denied any vicarious liability on the basis that Father P was not an employee and, on its case, it did not place him in a position akin to employment or in any position of power, control or authority over the plaintiff.

Father P had died some years prior to the action being brought.

The plaintiff sought damages for resulting economic and other loss.

The decision at trial

The court accepted the plaintiff’s allegations on the balance of probabilities. The court referred to the recent High Court judgment of GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32 in acknowledging that the legislature has permitted historical actions to proceed, despite the impact of the passage of time on the memories of those still able to give evidence. The court also referred to SR v Trustees of the De La Salle Brothers [2023] NSWSC 66 and noted it was not necessary, in matters of historical sexual abuse, to make findings as to every particular act alleged or its precise circumstances.

In coming to this conclusion, the court was not willing to reject the evidence of the plaintiff, nor the competing evidence of Mr P. The court identified various inconsistencies in the evidence of the two parties, but considered these were outweighed by the consistencies. The court identified some concerns with Mr P’s evidence, namely how it fared in light of an adverse report against Father P in the Newcastle Herald in 2015, which contained a criticism of Father P by her Honour Justice Syme and included that he had denied offering alcohol to boys at the Wingham Presbytery.

In considering the admissibility of the tendency evidence the court was satisfied that the evidence of repeated sexual assaults on the plaintiff, and of Father P’s interest in other teenagers (Mr M and BB), helped establish the notified tendencies which, in turn, made it more likely that the assaults AA remembered occurred.

In the circumstances the court ultimately found the Diocese had breached its duty of care to the plaintiff, and that it was vicariously liable for the assaults of Father P.

Significantly the finding of vicarious liability was largely premised on the recent Victorian Supreme Court decision of Bird v DP [2023] VSCA 66, which has been appealed to the High Court and whose judgment remains pending. Acting Justice Schmidt was not willing to await this judgment, having regard to the plaintiff’s ailing health, and because he agreed with the law propounded in the Victorian Supreme Court Judgment.

The court considered the special role which the Diocese placed Father P in i.e. inter alia allowing him to live alone at the presbytery and to determine who he invited there and when, gave him the authority, power, trust, control and ability to achieve intimacy with the plaintiff. In the court’s view this may have been greater power and authority than had Father P been an employee of the Diocese.

In making out its finding of negligence, the court again gave significant weight to the living arrangements that the Diocese had provided for Father P. Further, although the court found there was not at the time a widespread appreciation in the community of the risk priests posed, the risk was known to bishops and other senior members of the church. In that context the court found the Diocese had taken no steps to identify priests who actually posed a risk, or to deal with the risk of priests abusing a child, and that a reasonable person in the Diocese’s position would have taken ‘relatively simple steps’ within its power to reduce the risks. The plaintiff also relied on, and the court noted a complaint made by Mr M to Father Doran in 1966 of inappropriate fondling by Father P, but that there was no evidence that Father Doran notified anyone else of this or other complaints at any time.

Having regard to its findings, the court awarded the plaintiff $260,000 in a combined sum for aggravated and general damages, but declined to award exemplary damages. In reaching its decision regarding damages the court considered exemplary damages would have been available had the complaint from Mr M to Father Doran actually been conveyed to the Diocese prior to the assault on the plaintiff.

With respect to economic loss, the court deferred this determination to the parties. Interestingly, the plaintiff had not adduced any evidence in support of this claim and the court noted a lack of precision in his calculation in this regard.

Implications for you

The most significant takeaway from this case is the finding of vicarious liability of an institution for the actions of a priest in the absence of a relationship of employment. Similar institutions or organisations should be mindful of the benefits or allowances given to those who are connected to the organisation but not an employee.

An ancillary takeaway is the methodology applied by the court in deciding whether to accept, or reject, the plaintiff’s evidence, and the regard paid to recent decisions considering the limitation period. The death of an alleged perpetrator will not be a fundamental impediment to a plaintiff’s action in such claims.

It is also of note that the court found that, although the events occurred over four decades ago, the Diocese was on notice of the risk of sexual abuse by priests.