If a person working in a business does something unlawful, the question arises whether the business is liable for those actions. Last week, the High Court looked at this question in determining whether a diocese was vicariously liable for the conduct of a priest (Bird v DP [2024]). The priest had caused psychological injury following sexual assaults committed on a parishioner’s child.

3 ways liability might be attributed to the diocese

The Court looked at three ways that liability might be attributed to the diocese:

1. The priest might be an agent of the diocese. This would arise if the actions of the priest were authorised by the diocese or, once committed, were ratified by the diocese. Given there was no evidence that the diocese had authorised or ratified the assaults, the actions of the priest could not be said to be the actions of the diocese under an agency relationship.
2. Liability may be imposed on a person or organisation for breach of a non-delegable duty. A non-delegable or personal duty of care is a duty to ensure that reasonable care is taken, or to ensure that the duty is carried out. An example is the duty an employer usually owes to employees to provide a safe system of work. The employer cannot hand over that responsibility to someone else, e.g. a health and safety manager. Even it does delegate health and safety functions to a specialist manager, the legal responsibility for discharging that duty remains with the employer. If not fulfilled, the employer is directly liable. In this case, the Court found there was insufficient basis to conclude the diocese had assumed a special responsibility or higher duty to ensure that reasonable care was taken for the safety of a parishioner’s child.
3. The third route considered for attributing liability to the diocese for the conduct of the priest was vicarious liability. In Australia, an employer is vicariously liable for the wrongful acts of its employees if those acts are committed in the course or scope of the employment, or are closely connected to the employee's duties. This includes authorised acts and unauthorised acts that are so connected with authorised acts that they can be seen as a way of performing the authorised acts. Once it is established that a wrongdoing employee committed the acts within the scope of their employment, their employer is strictly liable, even if there was no fault on the part of the employer. The majority of the High Court confirmed that an employment relationship is a necessary precursor to a finding of vicarious liability. Given the diocese did not employ the priest, vicarious liability did not arise. The High Court highlighted that this is different to the approach that has been taken in the United Kingdom and Canada, and that these international approaches do not reflect Australian law.

Key effect of this decision

The effect of this decision is to confirm that a person or organisation can only be found to be vicariously liable for the wrongful acts of someone working in their business or organisation if:

• that person is an employee; and
• their acts are committed in the course or scope of the employment.

Vicarious liability does not arise for a business (in Australia at least) for the actions of a volunteer or independent contractor working in that business. That is not to say that the wrongful actions of a volunteer or contractor might not be attributed to the business because the person is their agent and the business authorised or ratified the person’s wrongful acts, or the business purported to delegate a non-delegable duty to that person, which was then breached.

This ruling only applies to common law liability. Many statutes attribute primary liability to businesses for the actions of contractors, volunteers or agents. Examples are anti-discrimination, privacy, and work health and safety legislation.