CCIG Investments Pty Ltd v Stockman  HCA 21: What the majority says about vicarious liability
On 2 August 2023, the High Court of Australia allowed an appeal from a judgment of the Court of Appeal of the Supreme Court of Queensland. The appeal was in relation to whether an employer was vicariously liable for a tort committed by their employee against another employee in the circumstances where the employees were required to live together in a shared accommodation pursuant to their employment contracts. This article explores the majority’s reasoning in the CIG Investments Pty Ltd v Stockman  HCA 21 case.
Mr Schokman (the respondent) was an employee of CCIG Investments Pty Ltd (the appellant) at a resort in the Whitsunday Islands off the coast of Queensland. Pursuant to his employment contract, he was required to live in a furnished but shared accommodation due to the remote geographic location of the island. Mr Schokman shared his room with another employee, Mr Hewett.
In the early morning of 7 November 2016, Mr Hewett, whilst in an intoxicated state, returned to the shared accommodation and unknowingly urinated on Mr Schokman whilst he was sleeping. This caused Mr Schokman to wake up in a distressed condition and unable to breathe. As a result of Mr Hewett’s action, Mr Schokman suffered a post-traumatic disorder and a cataplectic attack (that is, a sudden and ordinarily brief loss of voluntary muscle tone triggered by emotional stress).
In the first instance, Mr Schokman brought a proceeding in the Supreme Court of Queensland against the appellant both in direct negligence and vicarious liability. The claim in direct negligence failed as the elements of “reasonable foreseeability” were not satisfied. As to vicarious liability, Mr Schokman alleged that Mr Hewett’s urination was done ‘in the course of his employment’, which is the well-established bedrock principle for vicarious liability. However, the trial judge found in favour of the appellant as he did not consider that, in all fairness, it was just to impose vicariously liability upon the appellant for the negligent act of Mr Hewett; that said, he acknowledged that Mr Hewett’s act was carried out in the course of his employment by reason of his employer’s requirement of shared accommodation.
Mr Schokman then appealed the trial judge’s decision only for the claim for vicarious liability and the Court of Appeal allowed his appeal, finding that there was a requisite connection between Mr Hewett’s tortious act and his employment which was the requirement of shared accommodation under the employment contract. In doing so, the Court of Appeal found that the circumstances of this case were similar to another High Court case of Bugge v Brown where the employer was found vicariously liable for the acts of the employee by reference to the terms of his employment. The Court of Appeal essentially did not take consideration of the fairness element which the trial judge did when applying the principle of vicarious liability.
The High Court unanimously determined that the appeal should be dismissed, therefore finding in favour of the appellant. However, there are three different reasons provided by the judges.
Kiefel CJ, Gageler, Gordon and Jagot JJ (‘the majority’)’s reason
The majority, whilst conceding that the attribution of vicarious liability reflects the policy of the law, stated that it is also the policy of the law that the just limits of that liability ought to be marked out by the principle that the tortious act be committed “in the course or scope of employment”, in order to attribute the act to the employer. The majority essentially rejected other jurisdictions’ vicarious liability principles such as the enterprise risk theory in Canada and the “fairness and justness” notion in the United Kingdom. It is of note that this is not something novel as such was previously pointed out in Prince Alfred College .
The majority helpfully clarified that whether an act was committed in course or scope of employment is not determined by reference to whether the tortious employee’s act can be said to have been authorised by the employer. That is, intentional tort including even criminal act could be deemed as having occurred in the course or scope of employment, thus rendering an employer vicariously liable for its employees’ tortious acts. In doing so, the majority endorsed the test of sufficient connection, as suggested in previous cases such as Bugge v Brown and reconciled that test with the “special role/position” test (by looking at various features such as authority, power, trust and control) as suggested in Prince Alfred College by stating that is basically under the umbrella of the test of sufficient connection. The majority further said that if an employee’s tortious act was “utterly unconnected” with anything the employee was employed to do it would be outside of the realm of the employment.
Interestingly, Mr Schokman sought to draw an analogy between the circumstances in his case and Prince Alfred College by stating that his employer’s requirement of the shared accommodation rendered him vulnerable by having to share the room with another employee. However, the majority rejected that analogy and stated that Mr Schokman misconstrued and misapplied the test in Prince Alfred College. The majority explained that unlike in that case where the court found that the sexual abuser’s role as a housemaster was special, here there was no special role assigned to Mr Hewett. The majority elaborated that the only connection between the tortious act here with Mr Hewett’s employment here was the physical proximity between him and the respondent which arose from the requirement of the shared accommodation. That is, the shared accommodation requirement merely provided the opportunity, instead of creating the occasion, for the tort.
The majority’s decision confirms that the principle of vicarious liability involving the scope of employment is uniform across different domains, including the institutional abuse space. The test espoused by Prince Alfred College for vicarious lability remains to be relevant.
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 (1919) 26 CLR 110, https://jade.io/j/?a=outline&id=62800
 (2016) 258 CLR 134, https://eresources.hcourt.gov.au/showCase/2016/HCA/37