New guidance on vicarious liability for intentional torts

I’m getting to the High Court’s judgment in Prince Alfred College Inc v ADC later than I would like. However, because it is an important decision, it is still worth some discussion.

In ADC, the respondent claimed damages in respect of sexual abuse perpetrated by an employee of the appellant school. At trial, Vanstone J held that the proceedings were brought out of time and that no extension of the limitation period prescribed by the Limitation of Actions Act 1936 (SA) should be granted. In any event, her Honour held, the respondent had not established that the appellant was negligent in its hiring or supervision of the employee or that it was vicariously liable for any tort committed by the employee. An appeal by the respondent to the Full Court was upheld. By special leave, the appellant appealed to the High Court on both the liability and limitation issues.

The High Court held that the Full Court was wrong to grant an extension of the limitation period; it therefore upheld the appellant’s appeal. Notwithstanding that this made it unnecessary to deal with the merits of the respondent’s claim, French CJ, Kiefel, Bell, Keane and Nettle JJ gave extensive consideration to the law of vicarious liability for intentional wrongdoing. Of particular note, their Honours observed that:

[T]he role given to the employee and the nature of the employee’s responsibilities may justify the conclusion that the employment not only provided an opportunity but also was the occasion for the commission of the wrongful act. By way of example, it may be sufficient to hold an employer vicariously liable for a criminal act committed by an employee where, in the commission of that act, the employee used or took advantage of the position in which the employment placed the employee vis-à-vis the victim.

Consequently, in cases of this kind, the relevant approach is to consider any special role that the employer has assigned to the employee and the position in which the employee is thereby placed vis-à-vis the victim. In determining whether the apparent performance of such a role may be said to give the “occasion” for the wrongful act, particular features may be taken into account. They include authority, power, trust, control and the ability to achieve intimacy with the victim. The latter feature may be especially important. Where, in such circumstances, the employee takes advantage of his or her position with respect to the victim, that may suffice to determine that the wrongful act should be regarded as committed in the course or scope of employment and as such render the employer vicariously liable.

The majority did not wholly adopt the ‘enterprise risk theory’ of vicarious liability, pursuant to which the Supreme Court of Canada has held that ‘employers may justly be held liable where the act falls within the ambit of the risk that the employer’s enterprise creates or exacerbates’ and the House of Lords has held that ‘[i]f the employer’s objectives cannot be achieved without a serious risk of the employee committing the kind of wrong which he has in fact committed, the employer ought to be liable.’ Nevertheless, as Gageler and Gordon JJ noted, the approach adopted by the majority does ‘draw heavily’ on the enterprise risk theory of vicarious liability. That approach suggests that where it is sought to attribute to an employer vicarious liability for a trespass to the person or a proprietary tort, it will be necessary to examine the extent to which the tortfeasor’s role within the employer’s organisation clothed him or her with power to affect the person or the proprietary interests of the plaintiff. If an employee’s position within an organisation places him or her in a position of authority over another, abuse of that authority is likely to result in vicarious liability.

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