this product is unavailable for purchase using a firm account, please log in with a personal account to make this purchase.

Supreme Court judgments

Every Issue

Cite as: September 2012 86 (09) LIJ, p.63

Vicarious liability of employers

Blake v J R Perry Nominees Pty Ltd [2012] VSCA 122 (unreported, 14 June 2012, S APCI 2010 0091, Neave and Harper JJA and Robson AJA)

The appellant/plaintiff was severely injured when a fellow employee without warning struck the appellant hard to the back of the knees causing him to fall. Was the respondent employer vicariously liable for the injuries sustained by the appellant?

Harper JA, with whom Robson AJA agreed, sought to identify the policy underlying vicarious liability of employers for the torts of their employees. His Honour said:

“An examination of the issues to which this litigation gives rise comes back in the end to an examination of the policy which underpins the doctrine of vicarious liability. The foundation of that policy lies with the proposition that employers choose to take on employees, knowing that there will be consequences. Some of these will be beneficial. That at least will be the expectation, because otherwise the choice to take on staff would not be made.

But as every employer, actual or prospective, knows, there are two sides to the coin. For one thing, employees must be paid. For another, the employer must in general assume the risk that, in carrying out duties and functions which are relevantly connected with his or her employment, the employee will cause injury or damage. If the employer has authorised the wrongful act, the employer will be directly liable. The difficulty arises when the harm is caused by the employee’s unauthorised acts.

If, in the particular case, the law imposes upon the employer the risk that unauthorised acts of the employee might cause compensable harm to others, it will be on the basis that vicarious liability is in justice the price, or part of the price, to be paid in exchange for the benefits to the employer which the employees’ employment was designed to promote”. [41]-[43]

There must be some connection between the wrongful act and the wrongdoer’s employment. Reference was made to the decision of the High Court in New South Wales v Lepore (2003) 212 CLR 511 where the High Court considered the question of vicarious liability for sexual assault by an employee. In that case, in four judgments, the Court set out different tests for determining liability. Before considering these, his Honour considered other authorities both in Australia and overseas, including the speech of Lord Steyn in Lister v Hensley Hall Ltd [2002] 1 AC 215, where his Lordship (at 230 [28]) asked whether the torts “were so closely connected with [the] employment that it would be fair and just to hold the employers vicariously liable”.

Harper JA noted that Gleeson CJ and Kirby J favoured variations of the “close connection” test of Lord Steyn. Gaudon J had relied on estoppel:

“The only principled basis upon which vicarious liability can be imposed for the deliberate criminal acts of another, in my view, is that the person against whom liability is asserted is estopped from asserting that the person whose acts are in question was not acting as his or her servant, agent or representative when the acts occurred. And on that basis, vicarious liability is not necessarily limited to the acts of an employee, but might properly extend to those of an independent contractor or other person who, although as a strict matter of law, is acting as principal, might reasonably be thought to be acting as the servant, agent or representative of the person against whom liability is asserted”. 212 CLR [130]

Gummow and Hayne JJ had referred to two elements that:

“. . . are important for present purposes. First, vicarious liability may exist if the wrongful act is done in intended pursuit of the employer’s interests or in intended performance of the contract of employment. Secondly, vicarious liability may be imposed where the wrongful act is done in ostensible pursuit of the employer’s business or in the apparent execution of authority which the employer holds out the employee as having.

What unites those elements is the identification of what the employee is actually employed to do or is held out by the employer as being employed to do. It is the identification of what the employee was actually employed to do and held out as being employed to do that is central to any inquiry about course of employment. Sometimes light may be shed on that central question by looking at a subsidiary question of who stood to benefit from the employee’s conduct. But that inquiry must not be permitted to divert attention from the more basic question we have identified.” 212 CLR [231]

Harper JA said that on none of the tests referred to could it be said that the respondent was vicariously liable for the tort of its employee. It had been argued for the appellant that the tort had resulted from the boredom of the employee tortfeasor which was a result of his employment. Assuming that boredom was a factor, however, the appellant was still confronted with the obstacle that the state of mind or motive of the tortfeasor is irrelevant to the question of vicarious liability. [78]

His Honour expressed the view that the following view of Professor Paula Gilliker (“Making the right connection: Vicarious liability and institutional responsibility”, (2009) 17 Torts Law Journal 35, 53-54 ) was worthy of consideration:

“that vicarious liability should be imposed for intentional torts only where the employee is engaged to perform duties of a protective or fiduciary nature which safeguard the interests of the employer or others . . . Vicarious liability for intentional torts should therefore only arise where the employee is entrusted with a protective or fiduciary discretion, that is, where the employee is entrusted to protect the employer’s property, customers, employees, or specific individuals for which the employer has taken responsibility. If this requirement is satisfied, then the courts should examine whether the act in question was undertaken in the purported exercise of these duties. Put simply, the new test will provide a more structured approach to the question of vicarious liability for intentional torts by focusing on the protective discretion given to the employee”. [79]

Neave JA dissented. Her Honour was of the view, on the facts, that the tortious act of the employee occurred in the course of his employment or was at least sufficiently incidental to the performance of his duty as to fall within its scope.[34]

The appeal was dismissed.

Incidentally, the rule in Lister v Romford Ice and Cold Storage Co Ltd [1956] AC 555 continues as law in Victoria so as to impose an obligation on the wrongdoing employee to indemnify his or her employer or provide contribution where the employer is vicariously liable to another employee or third party for damages caused by the tort of the wrongdoer.



PROFESSOR GREG REINHARDT is executive director of the Australasian Institute of Judicial Administration and a member of the Faculty of Law at Monash University, ph 9600 1311, email Gregory.Reinhardt@monash.edu. The numbers in square brackets in the text refer to the paragraph numbers in the judgment. The full version of this judgment can be found at www.austlii.edu.au.

Comments




Leave message



 
 Security code
 
LIV Social
Footer