CCIG Investments Pty Ltd v Schokman

Case [2023] HCA 21

HIGH COURT OF AUSTRALIA

KIEFEL CJ,
GAGELER, GORDON, EDELMAN, STEWARD, GLEESON AND JAGOT JJ

CCIG INVESTMENTS PTY LTD  APPELLANT

AND

AARON SHANE SCHOKMAN  RESPONDENT

CCIG Investments Pty Ltd v Schokman

[2023] HCA 21

Date of Hearing: 9 March 2023
Date of Judgment: 2 August 2023

B43/2022

ORDER

1. Appeal allowed with costs.

2. The orders of the Court of Appeal of the Supreme Court of Queensland made on 18 March 2022 and 5 April 2022 be set aside and, in lieu thereof, order that the appeal to that Court be dismissed with costs.

On appeal from the Supreme Court of Queensland

Representation

B W Walker SC with J O McClymont for the appellant (instructed by Cooper Grace Ward Lawyers)

G W Diehm KC with R J Lynch and J P D Trost for the respondent (instructed by Shine Lawyers)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

CCIG Investments Pty Ltd v Schokman

Torts – Negligence – Vicarious liability – Where appellant employer of respondent – Where appellant required respondent to live in shared accommodation with another employee under terms of employment contract – Where other employee negligently urinated on respondent while he was sleeping causing cataplectic attack – Whether other employee's wrongful act in course or scope of employment – Whether appellant vicariously liable for negligent act of other employee.

Words and phrases – "agency", "course or scope of employment", "employee", "employer", "frolic", "modes of doing authorised acts", "negligent act", "non-delegable duty", "occasion", "opportunity", "sufficiently or closely connected", "sufficiently strong connection", "tort", "unauthorised act", "vicarious liability", "wrongful act".

  1. KIEFEL CJ, GAGELER, GORDON AND JAGOT JJ.   In late 2016 the respondent, Mr Schokman, commenced employment with the appellant at Daydream Island Resort and Spa as a food and beverage supervisor. The island is part of the Whitsunday Islands, which are situated off the coast of Queensland. His employment contract contained a clause which stated "[a]s your position requires you to live on the island, furnished shared accommodation located at Daydream Island Resort and Spa will be made available to you while you are engaged in this position at a cost of $70 per week".

  2. The contract also referred to a tenancy agreement and a number of other documents, such as an employee handbook, policies, practices and procedures, and Staff Village Regulations. Other than the contract itself, none of these documents were put into evidence, although the trial judge, Crow J, accepted that they had existed. It would seem that many documents were lost as a result of a cyclone which later affected the island.

  3. Initially Mr Schokman was provided with a room to himself, but shortly thereafter a new worker, Mr Hewett, moved in and shared the accommodation with Mr Schokman. Mr Hewett's contract of employment was not in evidence. The case was conducted on the basis that Mr Hewett's contract of employment, so far as it related to accommodation, was in the same terms…

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AGLC
CCIG Investments Pty Ltd v Schokman [2023] HCA 21
Case
[2023] HCA 21
Decision Date

CaseChat Overview and Summary

The High Court of Australia heard an appeal from the Court of Appeal of the Supreme Court of Queensland concerning a claim for vicarious liability. The appellant, CCIG Investments Pty Ltd, was the employer of the respondent, Mr Schokman. The dispute arose from a tortious act committed by another employee, Mr Hewett, who negligently urinated on Mr Schokman while he was sleeping, causing him to suffer a cataplectic attack. This incident occurred in shared accommodation that Mr Hewett was required to occupy as a term of his employment with the appellant.

The central legal issue before the High Court was whether Mr Hewett's wrongful act was committed in the course or scope of his employment, thereby rendering his employer, CCIG Investments Pty Ltd, vicariously liable for the resulting injury to Mr Schokman. This required the Court to consider the connection between Mr Hewett's employment and his tortious conduct, and whether that connection was sufficiently close to justify imposing vicarious liability on the employer.

The High Court allowed the appeal, setting aside the orders of the Court of Appeal. The Court reasoned that for vicarious liability to arise, the employee's tortious act must be committed in the course or scope of employment. While the trial judge had found no sufficient connection, the Court of Appeal had considered the situation analogous to *Bugge v Brown*, finding the requisite connection because Mr Hewett was occupying the accommodation as an employee pursuant to his contract. However, the High Court ultimately determined that Mr Hewett's drunken misadventure with respect to his toileting, even in the context of required shared accommodation, was not sufficiently connected to his employment to establish vicarious liability. The Court concluded that the employer was not vicariously liable for the employee's negligent act.

Orders

Orders of the court

1. Appeal allowed with costs.

2. The orders of the Court of Appeal of the Supreme Court of Queensland made on 18 March 2022 and 5 April 2022 be set aside and, in lieu thereof, order that the appeal to that Court be dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

KIEFEL CJ, GAGELER, GORDON AND JAGOT JJ EDELMAN AND STEWARD JJ GLEESON J
The claim for vicarious liability was the subject of an appeal to the Court of Appeal, and is the subject of this appeal. In some respects, however, the argument for Mr Schokman reflects a case of a duty of care owed by his employer to him. This may be seen especially in its focus on the position in which Mr Schokman was placed by the employment, rather than attention being directed to the position of Mr Hewett, and the connection between Mr Hewett's employment and his tortious act as relevant to vicarious liability.The judgments below The trial judge did not accept that the actions of Mr Hewett were committed in the course of his employment with the appellant[1]. His Honour considered that the relevant enquiry was as to whether there was a connection or nexus between the employment enterprise and the wrong that justified the imposition of vicarious liability on the employer for the wrong. Whilst his Honour accepted that the occasion for the tort committed by Mr Hewett arose out of the requirement of shared accommodation, his Honour did not consider that it was a fair allocation of the consequences of the risk arising to impose vicarious liability on the employer for the drunken misadventure of Mr Hewett with respect to his toileting. There was no history of Mr Hewett becoming intoxicated and nothing which would have put the employer on notice that Mr Hewett may have engaged in what was bizarre conduct[2].[1]Schokman v CCIG Investments Pty Ltd [2021] QSC 120 at [136]-[138].[2]Schokman v CCIG Investments Pty Ltd [2021] QSC 120 at [138]. The Court of Appeal allowed Mr Schokman's appeal[3]. McMurdo JA (Fraser and Mullins JJA agreeing) considered that the circumstances of this case were analogous to those in Bugge v Brown[4], where the employer had been held vicariously liable for the acts of the employee by reference to the terms of his employment. It was a term of Mr Hewett's employment that he reside in the staff accommodation and more particularly in the room assigned to him. He was occupying that room as an employee pursuant to, and under the obligations of, his employment contract, not as a stranger as referred to in Bugge v Brown[5]. It followed that there was the requisite connection between the employment and the employee's actions[6].[3]Schokman v CCIG Investments Pty Ltd (2022) 10 QR 310.[4](1919) 26 CLR 110, cited in Schokman v CCIG Investments Pty Ltd (2022) 10 QR 310 at 326-327 [42].[5](1919) 26 CLR 110 at 119.[6]Schokman v CCIG Investments Pty Ltd (2022) 10 QR 310 at 327 [42].In the course or scope of employment For an employer to be held liable for the tort of an employee the common law requires that the tortious act of the employee be committed in the course or scope of the employment. In Prince Alfred College Inc v ADC[7] this was described as an essential requirement of the common law. In Bugge v Brown[8], Isaacs J referred to it as a rule of the law. The necessity for it, as providing the parameters or outer limits of vicarious liability, has never been doubted[9]. The principle upon which the rule is based is that it is just to make the employer, whose business the employee is carrying out, responsible for injury caused to another by the employee in the course of so acting, rather than to require that the other, innocent, party bear their loss[10] or have only the remedy of suing the individual employee.[7](2016) 258 CLR 134 at 148-149 [40]-[41].[8](1919) 26 CLR 110 at 117.[9]Bugge v Brown (1919) 26 CLR 110 at 118; New South Wales v Lepore (2003) 212 CLR 511 at 589 [223]; Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161 at 173 [33]; Prince Alfred College Inc v ADC (2016) 258 CLR 134 at 148 [40].[10]Bugge v Brown (1919) 26 CLR 110 at 117.

Ratio Decidendi

Legal Principle Established

Established by: KIEFEL CJ, GAGELER, GORDON AND JAGOT JJ, EDELMAN AND STEWARD JJ, GLEESON J

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