Vicarious liability update – the shocking case of Schokman

The High Court has held that an employer was not vicariously liable for its employee's actions in urinating on a co-worker in their shared accommodation.

The Court's decision, CCIG Investments Pty Ltd (ABN 57 602 889 145) v Schokman [2023] HCA 21 delivered on 2 August 2023, provides employers and insurers with a useful example of circumstances which fall beyond the scope of an employer's responsibility for employee misbehaviour.

Background

Mr Schokman was employed by CCIG at a restaurant on Daydream Island in the Whitsundays.  He was required under his employment contract to live on the island in shared accommodation.

Mr Schokman shared his room with another employee who worked in the restaurant, Mr Hewett.  Mr Schokman held the superior position as a supervisor while Mr Hewett was a team leader.

On the night of 6 November 2016, Mr Hewett had been drinking at the bar before returning to the shared accommodation, where he complained to Mr Schokman about work matters.  Mr Schokman said he did not wish to discuss such issues at home and Mr Hewett left the unit, taking some drinks with him.

Early the next morning, Mr Hewett returned to the unit heavily intoxicated.  Mr Schokman awoke in a distressed state to find Mr Hewett urinating on him, causing a cataplectic attack, an episode involving sudden loss of voluntary muscle tone triggered by emotional distress.  It was accepted that Mr Hewett's actions were unintentional due to his level of intoxication.

Mr Schokman brought a proceeding in the Queensland Supreme Court seeking to recover damages from the employer for the injuries he suffered as a result of the incident.  

Decisions below

At trial, one aspect of Mr Schokman's claim was that the employer was vicariously liable for the negligent acts of Mr Hewett.  

That claim failed with the trial judge finding the actions of Mr Hewett were not committed in the course of his employment.  

However, Mr Schokman brought an appeal in the Court of Appeal, which was allowed.  Their Honours relied on the fact Mr Hewett was obliged to occupy the room under his employment contract to find the necessary connection between his actions and his employment, finding he was not a "stranger" to his employment at the time.  

High Court appeal

CCIG appealed the Court of Appeal's decision to the High Court which allowed the appeal unanimously.

The High Court held an employee's wrongful act must be done in the course or scope of employment in order for liability to attach to the employer.  

Their Honours held that, while an unauthorised, intentional or even criminal act may be committed in the course of employment, an employer is not responsible for every act an employee chooses to do.  As such, an act done when an employee is on a "frolic of their own" will not attract liability.

Nothing in the present case pointed to the drunken actions of Mr Hewett being authorised, required by or incidental to his employment.  Their Honours found that, in truth, those actions had no real connection to employment.

Their Honours referred to a decision of Bugge v Brown, where it was held the act of an employee may be regarded as that of a stranger when they do something so remote from their duty as to be altogether outside of, and unconnected with, their employment.  

Their Honours held the functional, geographical and temporal aspects of the course of employment were absent in the present case.  

Mr Schokman sought to draw similarities to another High Court decision of Prince Alfred College where a college was found vicariously liable for sexual abuse perpetrated by a teacher.  

However, Their Honours held that, unlike in Prince Alfred, there was no position of power and intimacy in the present case and Mr Hewett was not assigned any special role concerning Mr Schokman.  At most, the shared accommodation created physical proximity between the two men.

Learnings

While the facts of this case are unique, the High Court's decision provides employers and insurers with a useful example of circumstances which fall beyond the scope of an employer's responsibility for employee misbehaviour.  

The decision provides a measure of clarity in a complex area of law as it relates to common law liability.  Ultimately, where an employee's actions are as remote from their actual employment as those of Mr Hewett were, employers should not bear responsibility.  

Finally it should be noted that this decision does not directly impact the vicarious liability of employers or persons conducting a business or undertaking (PCBUs) that arises under specific statutory schemes such as work health and safety (WHS) laws and the recently extended prohibitions of sexual harassment. Those duties of employers and PCBUs remain in place.

This article was written by our team at TG Legal + Technology.

Authors

Bruce Crosthwaite | Principal Lawyer | +61 3 9641 8618 | bcrosthwaite@tglegaltech.com.au

Scott Newlan | Special Counsel | +61 3 8080 3771 | snewlan@tglegaltech.com.au

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