CCIG Investments Pty Ltd v Schokman
[2023] HCATrans 24
[2023] HCATrans 024
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Brisbane No B43 of 2022
B e t w e e n -
CCIG INVESTMENTS PTY LTD
(ABN 57 602 889 145)Appellant
and
AARON SHANE SCHOKMAN
Respondent
KIEFEL CJ
GAGELER J
GORDON J
EDELMAN J
STEWARD J
GLEESON J
JAGOT J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 9 MARCH 2023, AT 10.00 AM
Copyright in the High Court of Australia
MR B.W. WALKER, SC: May it please the Court, I appear with my learned friend, MS J.O. McCLYMONT, for the appellant. (instructed by Cooper Grace Ward Lawyers)
MR G.W. DIEHM, KC: May it please the Court, I appear with my learned friends, MR R.J. LYNCH and MR J.P.D. TROST, for the respondent. (instructed by Shine Lawyers)
KIEFEL CJ: Yes, Mr Walker.
MR WALKER: May it please the Court. Your Honours will find in the appellant’s further materials book starting at page 4 a letter of appointment. It is on the letterhead of my client. It is addressed to Mr Schokman but, as we have noted in our outline, it was treated as being a form which the parties were content for the courts below to regard as the same form containing the terms of the appointment of Mr Hewett.
KIEFEL CJ: Is this letter where we find what Justice McMurdo was referring to at paragraph [42], the requirement that – this is Mr Schokman, but I assume it is the same with Mr Hewett.
MR WALKER: It is.
KIEFEL CJ: That they:
take reasonable care that his acts did not adversely affect the health and safety of other persons.
Does that appear in here?
MR WALKER: It does. Can I take you straight there, and then I will go to other aspects of this document.
KIEFEL CJ: Thank you.
MR WALKER: At page 8 of the book under the heading “Workplace Health & Safety” and following an acknowledgement and agreement that:
a safe and secure workplace is important –
there are what appear to be covenants, and it is item (b) to which his Honour was referring. His Honour was also referring in that paragraph [42] at page 70 of the book to what appears on page 6 of the appellant’s further materials under the heading “Company Housing and Meals”, the opening words of which are, and I quote:
As your position requires you to live on the island –
unquote. I will come back to that in just a moment.
EDELMAN J: Which page was that?
MR WALKER: That is page 6 of the further materials, third page of the letter under the heading “Company Housing and Meals”, the opening words.
GORDON J: Do you propose to come back to that page? Could I just ask a question of fact? I could not quite ‑ ‑ ‑
MR WALKER: Of course, your Honour.
GORDON J: The third paragraph under that says:
A Tenancy Agreement including a property condition report between Daydream Island Resort and Spa and yourself will be provided –
Is that the same as CCIG Investments?
MR WALKER: I cannot tell you that.
GORDON J: I see. It is just that in your outline you said that you were the one providing the accommodation. I just want to make sure that is right, as a matter of fact. Does it matter?
MR WALKER: Everything indicates that that is right and that the description “Daydream Island Resort and Spa” is what I might call an enterprise colloquially or by its trading name. There is nothing to suggest that it is different from CCIG Investments Proprietary Limited.
GORDON J: Thank you.
MR WALKER: But, if I may say so, Daydream Island was ravaged by Cyclone Debbie, and apparently that is the explanation for the striking paucity of documents. However, in that regard, I need to point out that, as I understand the record, this document, dated 14 October 2016, which is available and was available below, refers, for example, to at least one attachment, but it does not seem to have been produced on discovery with an attachment, and there seems to have been either no or such exiguous exploration of that in the courts below that I cannot assist the court as to whether any of the courts below should have inferred there was or was not such an attachment.
In other words, the materials upon which Mr Hewett’s terms of employment, and other matters regulating the relation with his employer, seems to be confined to what can be inferred from this letter of appointment that the courts below treated as providing an understanding of Mr Hewett’s terms, not just Mr Schokman’s terms. And, as to a tenancy agreement, the likelihood of it existing seems overwhelming. The content is obscure.
GORDON J: I think I might have answered my own question. I think the opening words of that – a letter of appointment defined CCIG Investments as that spa and resort.
MR WALKER: Yes. And then it is also a place, of course. The reference that you asked me about is to a place.
GORDON J: Correct.
MR WALKER: Your Honours, the terms of the letter of appointment, for example, described Mr Schokman – Mr Hewett was a subordinate to Mr Schokman but working in what is called the food and beverage department, to give your Honours an idea of the way in which the workforce obviously was deployed for different parts of the resort activities.
The letter then proceeds to say that terms and conditions of employment are detailed below – I will come to material ones – and refers to an employee handbook which is among those things which either went with the cyclone or otherwise is not available. In particular, there is a reference to all relevant resort policies and procedures you are required to comply with. There is nothing in the record concerning that, and, in any event, those are matters to which the company can, from time to time, unilaterally impose changes.
Your Honours see that there is a reference to another possible attachment under the heading “Job Assignment”. There is no evidence as to whether there ever was one, let alone for Mr Hewett. On the other hand, there was no dispute between the parties about the fact that the duties referred to during the letter – one assumes congruent with the job description, if any was ever attached – concerns what I will call food and beverage catering service. After a standard and significant reference to the common law position of the obligation:
to comply with all lawful and reasonable directions –
that you see in that first paragraph under “Job Assignment”, there is then a reference to “Hours of Work”, which are described as 38 hours per week as “ordinary”. I will not dwell on what follows, but it would appear to be a flexibility massively in favour of the employer. It does not have any relevance to the controversy of this case because there is no suggestion that any of the events in question occurred during any such so‑called extra hours.
Under remuneration, we draw to attention – perhaps differently from Bugge v Brown – there is no food and board included by way of remuneration. In fact, as I shall show it is in the opposite direction. Your Honours ‑ ‑ ‑
GLEESON J: Although there is no evidence that the $70 per week is a – other than a nominal payment for the accommodation.
MR WALKER: There is no evidence one way or the other, your Honour. As you have seen for the respondent’s further materials, it is not exactly palatial accommodation. There is nothing to suggest what, if any, market exists for such work accommodation. It was charged at $70 a week. My point is the provision of the room is not part remuneration and the material did not entitle or enable any of the courts below to make any finding concerning, in effect, some discount forming part of a remuneration.
There is a discount referred to, however; last line under the heading “Remuneration”. I am not able from the record to tell your Honours what that means – and I am sorry, I do not know what the capital C imports. It may be that it has to do with purchases from retail outlets. We know that there certainly is a very keen price – a very low price charged for food, to which I will come.
Over the page, your Honours will see that the uniform is one for which the worker pays a $100 deposit, which might be the subject of deductions – that is one that might not be returned in full, depending upon wear and tear. Under the heading “Company Housing and Meals, the opening words are important:
As your position requires you to live on the island, furnished shared accommodation . . . will be made available . . . at a cost of $70.00 per week. You will be required to supply your own bed linen –
et cetera. There is a key deposit, which is paid first week, and then there is – tantalisingly, but frustratingly – a reference to so‑called conditions associated with:
living on Daydream Island as detailed in the staff village regulations.
There is nothing that either survived the cyclone or was available to be discovered in relation to that. Then there is the reference which is, obviously, significant to our argument to a so‑called “tenancy agreement”, which was, apparently, insufficiently familiar, a form concerning tenancy agreements as to have a condition report; a condition report that, obviously, is the kind of yardstick and agreed statement of fact by which, as between a reversioner and a lessee, there can be, if necessary, any adjustment at the end of a term with respect to the need for maintenance or repair. The agreement, which is required to be executed, your Honours would infer as either a precondition of the employment coming into effect or as one of the first obligations of the employment, is said to cover what ‑ ‑ ‑
STEWARD J: Can I ask you about that, Mr Walker?
MR WALKER: Yes, your Honour.
STEWARD J: The way the first paragraph reads is that you are given the opportunity to rent what I take to be reasonably cheap accommodation as compared to other accommodation that is being offered at the resort. But, technically, it would have been open, I assume, for a worker to say, I would rather stay at the presidential suite at the resort, or whatever it might be.
MR WALKER: Yes.
STEWARD J: It might have been someone’s – the son of a rich man seeking work experience and he does not want to bunk in with the others.
MR WALKER: If down and out in Daydream Island as opposed to Paris and London did not appeal to someone sufficiently but they wanted the experience of working in the kitchens, then, I suppose, that is right. But there does not seem to be a stipulation that somebody with the capacity and willingness to not share, for example, or to have better facilities for ablutions, it is not as if it is forbidden.
STEWARD J: Yes, I see.
MR WALKER: On the other hand, we know, simply from looking at this document at the top of page 5, that this is not a particularly highly‑paid position.
STEWARD J: No, no.
MR WALKER: Now, your Honours, with respect to the basic terms and conditions, we do not have the tenancy agreement. By inference, the next paragraph, however, is stipulating something which is either by way of emphasis or reminder of an important term in the tenancy agreement or, in any event, a stipulation that governs as between the parties as a matter of contract, and it significantly uses the expression:
you must give up vacant possession –
that is, upon cessation of employment. We submit that those are words which would naturally lead to the notion that the position preceding cessation of employment is that possession of the premises is with the tenant; that is, the person holding under a tenancy agreement, with a key. In other words, apart from the shared resident – fellow resident – the ordinary incident of a tenancy whereby you may exclude others would appear to follow.
GLEESON J: Well, the shared roommate is – the roommate is quite an important feature of the relationship, is it not?
MR WALKER: It is right at the heart of the matter, your Honour, yes, absolutely. Your Honours see – and this is just a straw in the wind – the second‑last paragraph on that page contemplates, as a matter of caution on the part of the resort, that there might be deliberate wrongful conduct within the accommodation and regulates that matter by saying that it will be paid for. That page ends with the very low charge for meals. Your Honours should be cautious about drawing inferences about the extent of any true discount or subsidy though; there is no material to enable that to be done. On any view of it, it is cheap.
Your Honours, we can go – I do not think there is anything I want to take you to on that page 7, but on page 8, as your Honours have already seen, there are some significant matters considered critical in the Court of Appeal. Before we get to those, at the top of the page there is again a tantalising reference to “Policies, Practices and Procedures” using this time the rather open‑ended expression:
any written policy, practice or procedure . . . as applicable from time to time.
On the other hand, they do not form part of the contract of employment. So, in the upshot, it would not appear that the gaps in the record, by reason of the cyclone or otherwise, matter with respect to policies, practices and procedures.
We then come to the source of the critical reasoning of Justice McMurdo. As the Chief Justice has noted, it is contained in paragraph [42] on page 70 of the core book, if I could just take you there. Your Honours have already seen, we think, the source of the third sentence in that paragraph; that is:
Whilst he remained employed at the resort, he was required to live there, and once he ceased to be employed at the resort, he was required to leave.
That is a paraphrase, perhaps not quite precise, of the words to which I have drawn attention about being required to live on the island, and the words about delivering vacant possession of the provided accommodation upon cessation of employment. The next sentence is at the heart of the decision against us. Indeed, it would appear to be the whole of the, what I might call, analogical reasons given by his Honour for reaching the conclusion the court did. Quote:
The terms of his employment required him to take reasonable care that his acts did not adversely affect the health and safety of other persons. That was an obligation which governed his occupation of this room. He was not occupying the room as a stranger –
that is a term of art in this area to which I will come back:
but instead as an employee, pursuant to and under the obligations of his employment contract.
And then finding what is called the requisite connection and vicarious liability.
GLEESON J: On any view of it, the employer placed the roommates in a relationship of proximity ‑ ‑ ‑
MR WALKER: On any view of it.
GLEESON J: ‑ ‑ ‑ for the purpose of the use of the room.
MR WALKER: Yes. In exactly the same way as co‑workers are placed in proximity on a shared factory floor, or machine, or kitchen. Yes. Physical proximity, which will normally include proximity within the meaning of Lord Atkin’s dictum. Your Honours, we submit that the words taken from the stipulation under the heading “Workplace Health & Safety”, namely taking:
reasonable care that your acts or omissions do not adversely affect the health and safety of other persons –
Particularly the generality of “other persons” most implausibly applies outside the workplace. Outside the workplace is really the rest of the world. Certainly, the rest of the vicinity, which would not be limited to the island, let alone to curtilage of the resort, for example. And that implausible reading is, of course, rapidly rejected by understanding that – not only by the heading, but by the opening and explanatory acknowledgement of the agreement about a “safe and secure workplace” that (b) refers to taking reasonable care of the workplace. In other words, a stock‑standard stipulation by an employer who, after all, has its own duty of care concerning safe systems of work to stipulate for care between not only co‑workers but in this case co-workers, guests, and invitees.
When one sees the other terms – (a), (c), (d) and (e) – it is tolerably plain that these are words concerning the regulation of conduct in the workplace, the workplace, of course, being quite a diffused set of premises; that is, a resort on an island. The proposition that these are terms concerning workplace gels very satisfyingly with the notion of work hours as well, to which the stipulations next turn:
under no circumstances attend work having consumed alcohol –
for example, and yet we know there is a staff bar to which resort can and, in this case, was made out of hours. There is a distinction between your hours of work and the hours which are yours for your own leisure. Again, there is a prohibition on consuming alcohol “while at work”.
Those opening words, one assumes, cannot be taken literally because that would require only lifetime teetotallers to be employed, which one may safely say would neither be expected at a resort or plausibly interpreted as the effect of that stipulation with respect to a population that is not required to be teetotal. Interestingly and irrelevantly, there is an exception in case there is a prescribed requirement to drink or take drugs, but that goes nowhere in this case.
Your Honours, at the foot of that page there is another straw in the wind. There is a reference in coyly general terms to a number of practices to monitor its offices; that is its premises and employees. It has never been suggested that that is an expression that would include the private accommodation, of which vacant possession has to be given up at the end of employment. So, that is what the documentary evidence available for the factual conclusions drawn by Justice McMurdo in his Honour’s paragraph [42] amounts to. If I can then come to the framing of the argument in light of the law ‑ ‑ ‑
GLEESON J: Mr Walker, before you do, was there any workers’ compensation claim in respect of this incident?
MR WALKER: There was.
GLEESON J: And was the claim resolved on the basis that the injury was sustained in the course of employment?
MR WALKER: I want to make sure I get the phrase right, so I will answer that, I hope, more precisely, but may I make it very clear – and perhaps echoing what, among others, Sir Isaac Isaacs has said about such statutes in relation to the common law in this area – great care should be taken with respect to what I might call extending phrases or connective phrases for the purposes of workers’ compensation provision and the position of vicarious liability by an employer.
EDELMAN J: That has been said for a century, but over that century the phrases and the law have moved closer and closer together.
MR WALKER: That, if one may say so, may be simply a conventional demonstration that values that inform the common law – and that, from time to time, inform legislated welfare programs – not surprisingly, have a very broad common base.
KIEFEL CJ: I think it was pointed out in Prince Alfred College that the workers’ compensation scheme – statutory scheme – the phrase “in the course or scope of employment” has a different purpose. It operates as a limit on compensation, whereas here it is an essential requisite of liability itself.
MR WALKER: It is an entry into liability, yes, your Honour. These observations about workers’ compensation provisions – as is notorious, from time to time and place to place – they have been amended – one cannot always say “improved” – not least because it involves a viewpoint – but in particular, attention has been paid over the decades to the associations, relations and phases in a work day, or sometimes a work week, which ought to be regarded as falling within what is politically called “course of employment” for the purposes of allocating welfare provisions.
Famously, there are journeys – famously, there are breaks. But there can be more than that and it is for those reasons that one would search in vain, we submit, for a unicorn of a case which is itself purely a matter of statutory interpretation under workers’ compensation that would cast any light on our case.
KIEFEL CJ: Mr Walker, just in relation to the conduct of this litigation, the plaintiff here brought a claim for breach of duty of care under the Workers’ Compensation and Rehabilitation Act, but that claim was separate from, and distinct from the claim for vicarious liability based on the negligence of Mr Hewett.
MR WALKER: Yes. Yes, that is right.
KIEFEL CJ: And no one has argued that the statute in any way is relevant to the common law question here of vicarious liability.
MR WALKER: That is exactly right.
KIEFEL CJ: And it has not been dealt with by either the primary judge or the Court of Appeal.
MR WALKER: That is exactly right. On my study of the record, it plays absolutely no part at any point in the presentation of the case at trial or in the Court of Appeal and, for that matter, the respondent’s argument here – and there is of course absolutely no criticism by us in that regard – that is both orthodox and proper – there is what might be called fleeting or superficial verbal similarity between common law tests for a sufficient nexus for vicarious liability, and various defined terms for the connective phrase by which a limit is imposed upon expenditure on the welfare scheme of workers’ compensation.
Both as matter of authority and as basic principle concerning the formulation of the common law, one can see why there should be a determination not to have the common law, as it were, adapt itself with an eye to statute, which, of course, might not only be State or Territorial statutes – the Australian common law does not develop because of either reformers or reactionaries in State Parliaments from time to time.
Your Honours – excuse me just a moment. I am sorry, your Honour, Justice Gleeson, I have not got that answer yet, but I am hoping I will.
GLEESON J: Thank you.
MR WALKER: In terms of the proper approach in a case of vicarious liability, it is worth noting that the history of this case shows that vicarious liability is brought to this Court as very much a fallback position. The principal fight at trial was what is sometimes called direct liability, that is, breach of a duty of care by us as employer. That failed, it is no longer in play.
But it focuses, of course, on the need properly to analyse in order properly to carry out the factual characterisation ultimately necessary, the wrongful act of Mr Hewett, for which we, not a tort visa, not a wrongdoer, will be held vicariously liable because, in this case, we are the employer of Mr Hewett.
And, contrary to the way in which Justice McMurdo in particular, talked about the obligation concerning taking reasonable care for others governing his occupation of the room – it not being suggested that there is any vicarious liability to be sheeted home to us by reason of any contractual breach by Mr Hewett – one asks about the wrongful act for which, ex hypothesi, he was liable to Mr Schokman, whether that wrongful act was and such as to fit within the formulae from Prince Alfred to which I will come in a moment.
GLEESON J: Is there anything about this wrongful act that means that it should not just be regarded as an act of negligence in the use of the room?
MR WALKER: Your Honour is asking about the incontinent urination in the middle of the night as being ‑ ‑ ‑
GLEESON J: The injury that was inflicted.
MR WALKER: The injury was inflicted, the hypothesis of this case, which is not in question in this Court, is that it was by negligence that that happened.
GLEESON J: Yes. I think the Court of Appeal simply put it as negligence in the use of the room.
MR WALKER: Yes.
GLEESON J: So, one can imagine a raft of different acts of negligence by a careless roommate.
MR WALKER: Well, if they have kettles, for example ‑ ‑ ‑
GLEESON J: They could burn.
MR WALKER: ‑ ‑ ‑ a lack of reasonable care with scalding water, for example, would be a very common example.
GLEESON J: Exactly. So, I mean the facts of this case are unsavoury but is there any reason why we need to dwell on those?
MR WALKER: No, no, no.
GLEESON J: Or should we just consider this as an ordinary act of negligence?
MR WALKER: No, no, I am not suggesting they are unsavoury. They are obviously, in human terms, disgusting, but maybe for biological and social reasons. We are proceeding on the basis that you have got to identify the wrongful act of Mr Hewett in order then to ask the questions and answer them with respect to the non-wrongdoer employer. We can discard certain levels of “generality” at the outset, and that is a reference, of course, to the admonition of Chief Justice Gleeson in the passage from New South Wales v Lepore to which we have given a reference in footnote 2 in our outline. A correct level of generality has to be selected ‑ ‑ ‑
GORDON J: It is about generality of the act itself?
MR WALKER: Yes. So, it is not, obviously, occupation of the room – co‑occupation of the room, shared occupation of the room. That is not a wrongful act. Neither is it the carrying out of ablutions, in general terms. Nor is it, more particularly, excretion. What it is, is the negligent excretion, not in the facilities provided but, obviously, by a most unfortunate mishap – no doubt contributed to by intoxication, on his co‑occupant who had, even more unfortunately, a predisposition that led to the serious damage. Now, once one asks about the negligent misaimed urination, then that is the matter about which the questions that this Court suggests needs to be answered in order to make out vicarious liability, need to respond to. Not to the notion, generally, of co‑occupation of the room. That is the wrongful act.
Now, as your Honours have seen in our proposition 2, we start with pointing out the private – private for the reasons I have already tried to explain – the private shared accommodation is not a workplace, and it is private in the sense that it is what is occupied during hours when you are not at work. You do not go there for sleep while you are on duty. And, as we put in propositions 2 and 3, the indicia of those shared premises being somehow within any kind of control of the employer, apart from the stipulations for paying for any damage or paying a bill for cleaning, et cetera, are entirely lacking.
GLEESON J: Well, we do not know what was in the staff village regulations.
MR WALKER: I am so sorry, your Honour?
GLEESON J: We do not know what was in the staff village regulations.
MR WALKER: Absolutely. And with respect to sheeting home vicarious liability to us, obviously the plaintiff bears the burden of showing any such indicia between employer and the employees who shared accommodation. In particular, there is sufficient detail in the letter of appointment concerning care for the premises and vacant possession being given up at termination, et cetera, to indicate that something may turn on the agreed licence or permission on the part of the occupants for their supervisors to come in, either without notice or upon reasonable notice, for example, which might be a form of control, I suppose. But there is nothing of that in this case. In other words, nothing to detract from what would be the ordinary reasonable social expectation that went, I am off work, I am allowed to enjoy the premises for which I pay $70 per week in what might be called an ordinary, adult, autonomous fashion.
EDELMAN J: So, what, Mr Walker, do you say is the right level of generality in this case? Is it that the wrongful act was – to pick up on Justice Gleeson’s point – negligence in the course of the use of shared accommodation or is it negligence in the act of urination in the course of shared accommodation that was provided separately from a remunerated part of the employment, or is it something in between?
MR WALKER: No, it is the second of those – there is no in‑between. You would not have a pleadable cause of action by simply asserting negligence in shared occupation. That is a most uneasy hovering level of generality which is not apt for the fact‑rich case‑specific analysis which this Court has said in Prince Alfred College is currently the way to proceed in such cases. It is for those reasons that it is the negligently misaimed urination – no other aspect of it. It is not negligent to urinate. It is not negligent to urinate within your residence – at least this kind of residence – it is the misaiming – misplaced.
GORDON J: Sorry, I do not quite understand that. Is that answer to be had added to it what was put to you by Justice Edelman, in the course of share accommodation provided by the employer?
MR WALKER: In fact, no.
GORDON J: Because your answer then was just limited to the first way in which Justice Edelman put it to you.
MR WALKER: In our submission, it is a furphy that it is in shared accommodation – that is, if it were outside the front door of the accommodation, the same injury would have occurred and it would have occurred – and I am now using loaded words – because of the opportunity for it to occur provided by them both being, as stipulated, on the island where they worked. It would not make any difference whatever except, perhaps, to render the possibility of control by the employer through a strolling supervisor, the more evident.
EDELMAN J: Would that mean, then, that in Bugge v Brown the proper characterisation of the wrongful act is carelessly lighting a fire on the land of another?
MR WALKER: No.
EDELMAN J: Or carelessly lighting fire in order to cook meat? It seems that, if your submission is right, that all one needs is to characterise those facts necessary to constitute a cause of action – then in Bugge v Brown it would not be necessary to include details of the fact that it was done during the day – that it was done during a lunch period while work was ongoing, and so on.
GLEESON J: It has to be within the context of the relationship of proximity – whatever that is.
MR WALKER: Proximity as between Mr Hewett and Mr Schokman is probably assumed but certainly to be taken as established in this case. Proximity as between us and both Mr Schokman and Mr Hewett may be taken as a standing reality, but immaterial to this dispute. All that matters is that there is the relation between, in this case, for vicarious liability, employer and employee. Vicarious liability does not require that but it is the paradigm case for it. But it is not a proximity between employer and employee for the purposes of the law of negligence.
GLEESON J: No, but we are talking about the act, the act for which the employer is vicariously liable, and that is an act of negligence. Surely, that has to be a breach of a duty of care owed by Mr Hewett to Mr Schokman.
MR WALKER: Well, yes, absolutely. But there is – to use the expression, I am not sure whether it is outdated or not now – but there is proximity between the two men in the legal sense, as well as in other senses, and the legal sense is largely because in other senses, which gives to the foundational tort of negligence for which Mr Hewett is liable. The question is whether we are vicariously liable, though we are not wrongdoers, for his wrongdoing.
STEWARD J: Is the nub of your case, Mr Walker, really that once the act of wrongdoing takes place on privately‑leased accommodation for domestic purposes, the connection with employment is just insufficient?
MR WALKER: Not as a rule but certainly as a highly likely conclusion after one has examined all the facts and circumstances of the case.
STEWARD J: I mean, and for that purpose it would not matter whether the landlord was a separate company.
MR WALKER: No.
STEWARD J: Whether the co‑inhabitant was another employee or not.
MR WALKER: No, that is right.
STEWARD J: It is happening in your home.
MR WALKER: Yes, that is our point, that is why I use the expression “private accommodation”. It is private as against the employer. There is no indication here that the employer is allowed to burst in and say, what are you reading, what are you drinking, what are you talking about? The privacy of these people in their off‑hours is, in our submission, a very important concern of the common law.
GLEESON J: But that is not the problem, the problem is that the employer tells you who you have share a room with.
MR WALKER: Understandably, the notion that, as it were, vicarious liability comes about because a person accepts a position which he knows will involve shared accommodation, and many remote workplaces will include what are still sometimes called barracks; that is falling out of fashion, no doubt for human relations purposes. But as your Honours know, there are forms of accommodation which, whether or not it means you sleep in the same cubic space, you very often share other parts of the facilities which provide residential accommodation, whether it be crib rooms, storerooms or, in particular, bathroom facilities.
STEWARD J: It is also reasonably common for mining companies to offer employees in remote location whole houses ‑ ‑ ‑
MR WALKER: Quite so.
STEWARD J: ‑ ‑ ‑ to lease while they are posted at – you know, up in the Pilbara.
MR WALKER: And if it is either stipulated or agreed privately that that is shared – that is, there is more than one person, particularly given shift work, et cetera – in our submission, that gives rise to no special concern by way of being a circumstance that would, prima facie, expose an employer in such a case to vicarious liability for private mishaps, personal mishaps, between the occupants of that residential space.
What Justice Gleeson has raised with me is, we entirely accept with respect, something we have to confront and answer. That is that – again, I am using loaded terms – the opportunity for a co‑occupier carelessly to misaim urination arising because of, I will call it, stipulated shared accommodation, it follows that – and without anything intervening – vicarious liability follows. And your Honours know from my use of the word “opportunity”, which is not a neutral term in this discourse, that I am adopting the jargon – if your Honours will forgive that expression – that distinguishes between opportunity and occasion. A distinction that would not appear, really, to be viable as a matter of ordinary English, but in this area of jurisprudence it currently is.
KIEFEL CJ: You are relying on what is being said by the – in the English cases, I think, starting with Morris v CW Martin that something more than opportunity is necessary for vicarious liability and ‑ ‑ ‑
MR WALKER: Yes.
KIEFEL CJ: ‑ ‑ ‑ that has been consistently held, including being confirmed in Prince Alfred College.
MR WALKER: Exactly. That is why I am using the expressions.
KIEFEL CJ: Yes.
MR WALKER: They are terms of art. They are designed – perhaps they are conclusions, rather than ways of reaching the conclusion.
KIEFEL CJ: The contrast to liability which might arise where the employment gives occasion; how would you put the rather old‑fashioned terminology of “gives occasion” in modern terms to distinguish that from “opportunity”?
MR WALKER: Yes. What the cases show is that giving occasion has performed its really useful function in making what I will call a socially satisfying outcome to a tort enquiry vicarious liability for a tort, where the wrongdoer’s actions are not only not authorised, they may have been expressly prohibited, and they may even be criminal. But nonetheless, the nature of the circumstances – the tripartite relation between plaintiff, wrongdoer, and the wrongdoers employer, from whom vicarious liability is sought – reveals that the crime or prohibited conduct, either prohibited by employment contract or by regulation, has come about in the course of purported performance of duties.
I say “purported” because the weary reputation is necessary. Of course, nobody is ever saying that it is in the course of a housemaster’s duties to sexually interfere with children. But there may be, as cases here, and in England, and in Canada show, there may be vicarious liability in such a case where it is not the mere opportunity of offending for which the employer might be regarded as socially responsible, but the employer has put a person into a position – I am going to come to the language this Court uses in Prince Alfred College in a moment – where there are features of the employer’s conduct in so doing which are then described by the Court as doing more than providing a mere opportunity, but being the occasion for the wrong for which the punitive vicarious liability is sought.
GLEESON J: Mr Walker, does that dichotomy not find its genesis in the case of an intentional wrongdoing where you have that obvious difficulty of working out how you sheet home responsibility for an intentional wrongdoing onto the employer? But here we are dealing just with negligence. Why are we not just looking at what was the scope of the employment?
MR WALKER: The first part of your Honour’s question, it really is very obscure as to whether an intentional tort by which I mean not negligence – negligence, obviously, are voluntary acts or omissions, but they are not intentional in the sense of intending wrong.
GLEESON J: I think Prince Alfred talked about intentional criminal ‑ ‑ ‑
MR WALKER: Quite, exactly. As it happens in this case, unexplored is whether what happened was intentional in that sense, but that is not before the Court; it is a negligence case. We do not accept that the handy dichotomy opportunity/occasion springs only from seeking to deal with intentional torts in that sense, which of course includes and significantly applies with crime. It is certainly true that as the case law accreted more and more examples where that would be a fair description of the reasoning appear, but in this Court, we are still told that there is not what I might call a taxonomy of cases which involve different rules. In our submission, the vice with saying that the wrongful act has a sufficient connection with the stipulated co‑residence is that co‑residence – that is, being physically present in the early hours in the same confined space – is classically, in our submission, simply an opportunity for something to happen.
Mr Hewett is not in any sense directed to do anything which would involve an occasion for negligence, let alone intention, with respect to misaimed urination, or at least it is not sensible to say so unless by stipulating for, (a), accommodation and, (b), shared accommodation, it is to be understood that the employer is stipulating for what I will call ordinary life and all its biological processes, which would be absurd. Employers do not have to stipulate for cleaning of teeth, using the bathroom, tidying up things upon which your companion might trip of you do not tidy up, for example. You do not stipulate for that. That is just ordinary, autonomous adult life of people living in shared accommodation.
KIEFEL CJ: Mr Walker, can you apply the reference to give occasion to the facts in Bugge v Brown?
MR WALKER: Yes.
KIEFEL CJ: In the sense that it was a term of – it was part of the remuneration that he would have a cooked meal.
MR WALKER: But being fed – and those things incidental to that – was part of the remuneration. One cannot say the shared accommodation is part of the remuneration in this case; t is a stipulation that you live on the island. It was an occasion in the sense that he was sent out to cut thistles, and Sir Isaac Isaacs’ extremely detailed case stated, so to speak, makes it clear that there were reasons in the interests of the employer for there to be an alfresco meal rather than going back to the derelict ‑ ‑ ‑
GAGELER J: It is probably not the terminology they used, Mr Walker.
MR WALKER: Sir Samuel might have, but probably not Sir Isaac. But the notion of it being done out in the open rather than going back to the chimney place is, in our submission, very much in accordance with the idea that this is not just mere opportunity, this was the occasion, because he was out there to do work ‑ ‑ ‑
KIEFEL CJ: Where he was told to cook his meal.
MR WALKER: And told to cook his meal, et cetera.
KIEFEL CJ: The fact that it was unauthorised because he was told to cook at the homestead and not outside did not – the employer did not escape liability on that basis.
MR WALKER: Exactly. And I am in danger of slipping into terminology which was simple when taught at law school but now we know is inadequate, such as simply a wrongful mode of doing that which you were employed to do. But – and actually – Bugge v Brown is a pretty good example of why those plain ordinary ways of explaining why, notwithstanding it was either prohibited or negligent, nonetheless, it is something for which the employer should answer because it was in the course of.
EDELMAN J: It was happening on the equivalent of the factory floor.
MR WALKER: Exactly. It was in the workplace; that is the whole point. We make a lot of, unashamedly, the distinction that we say is important from a social and liberty point of view between such a case and the privacy of accommodation for out of hours – the notion that your employer has some role in relation to how well you sleep, for example.
I need not tell your Honour – it might come as a surprise to all of your Honours – but shared accommodation can produce real conflict between people by reason, for example, of snoring. It is just fatuous to suppose that an employer bears responsibility for what might happen as a result of private conflict between two sharers of a small space when one of them snores, whether that amounts to blows or whatever else. In our submission, the accidents that can happen between people sharing a space in which they both sleep and ablute plainly on the other side of the line, as we have suggested in our outline, from the stipulated going out into a paddock, the stipulated preparing a meal, but the non-stipulated recourse to and ultimate carelessness of the tending of a fire.
GORDON J: Can I put it in these terms. Does that mean then if one looks at your argument in terms of elements, we have the identification of the wrongful act which is really directed at showing that the act does not occur in the workplace?
MR WALKER: Or has no connection with the business of the employer.
GORDON J: Or is not sufficiently incidental to the workplace?
MR WALKER: That is right.
GORDON J: I have never quite understood, and I declare this the rationale for vicarious liability given its inability at many times to try and understand it. Is another way of really seeking to meet the case brought by Mr Schokman is to, in effect, say, listen, it is really looking through the eyes of a non‑delegable duty; you were obliged to provide us with an offer and allocate accommodation which was safe. In other words it is, in a sense, looking at it, in effect, trying to bring into elements of vicarious liability these sort of non‑delegable duty‑type aspects.
MR WALKER: Which are appropriate only to, with respect, the direct liability case which was exhaustively attempted and completely failed. So, it would be wrong to depart from the robustness of the intellectual frame for vicarious liability that starts with the notion that the, in this case, employer is not the wrongdoer but is going to be held or not held liable, notwithstanding not the wrongdoer.
EDELMAN J: Well, that will mean that the non-delegable case is not before us. There may very well have been something to be said for the case had it been put in terms that you require us to live in accommodation together on the island, you are not merely undertaking a responsibility for our safety during work hours, but a responsibility for us at the outside working hours.
MR WALKER: Quite so. That is a direct liability case. I shrink from suggesting that Rylands v Fletcher would have a go with dangerous cohabitants of a room, but the point is ‑ ‑ ‑
GORDON J: That is why I put to you about offering and allocating the shared accommodation, because it would take into account personal circumstances known to the person who is offering and allocating.
MR WALKER: And, as you know, that was a very important point of contention in the failed case below concerning direct liability. And there are findings of fact which explains why it did not even go to the Court of Appeal concerning knowledge of predisposition, et cetera, et cetera, and also resource of response.
So, we entirely accept that what I am going to call shared accommodation cases stipulated as part of employment will, from case to case, give rise, no doubt, to anxious consideration by those advising the plaintiff as to whether there is only vicarious liability on the part of an employer for a co‑worker’s out‑of‑hours dangerous conduct, or whether there is – including for reasons that Justice Edelman has sketched – rather a direct liability, no vicarious element to it at all, coming from what might be called a sponsorship or stewardship function with respect not only to the physical state of the premises, for which there is obvious direct liability, but also for what might be called social conduct within them.
One can easily imagine – and I am sorry to say, from professional experience – that knowledge of dangerous conduct out of hours in company accommodation undoubtedly can be gained by an employer in certain cases – ought to be gained by an employer – in both such cases giving rise to a position of foreseeability where the undoubted general duty would then have, as within its scope or content, the obligation to do something consistent with reasonable care to control such activities.
EDELMAN J: There may be – and it is not this case, but there may be very significant questions as to whether knowledge of any form of dangerous activity would be required for direct liability in terms of non‑delegable duties. If there is an assumption of responsibility for provision of a safe workplace, including safe provision of accommodation, no knowledge may be required at all.
MR WALKER: Quite so. It may be that it is the nature of the exercise that will impose responsibility for such matters as is part of the scope or content of what I will call the general duty. That is not this case.
EDELMAN J: But we have to proceed in this case on the assumption, given the way it was argued and decided in the Court of Appeal, that the employer did not owe any duty to ensure the safety of the two men in the accommodation.
MR WALKER: Could I modify that, but only slightly. Obviously enough, the employer, given proximity with employees, owes a duty of care and with respect to the premises in which they are to share accommodation. Thus, for example, reasonable care to ensure that the ceiling which is sagging is not going to fall, et cetera, et cetera.
There will be – there is, of course, no duty of care, cognizant of a law, to instruct people to be careful where they urinate any more than there is a duty of law, cognizant of a law, to check sagging ceilings. There is a duty of care – the scope or content of which will extend according to circumstances and from time to time, and always under the standard of reasonableness – to doing certain things, but all of which are aimed at sufficient solicitude for the, in this case, physical health and safety of the employees.
EDELMAN J: I should clarify. I was not talking about a premise that the employer does not owe a duty to take care. I was talking about a premise that the employer does not owe a duty to ensure that care will be taken.
MR WALKER: I see, yes.
EDELMAN J: And that as a premise of the way the case was run below seems to me, at the moment, to be the starting point for a consideration of vicarious liability.
MR WALKER: Can I suggest that, fundamentally, there is an utter divergence, that is, the discourses are alien to each other, which would impose as a duty on an employer what I will call a tutelage or monitoring requirement with respect to the dangerous conduct of one employee vis‑à‑vis another and vicarious liability of the employer for that same dangerous conduct. They are discourses that cannot engage because the one is proposing wrongdoing by an employer for failure to do something requisite, and the other is posited on and exists only because of the employer not being a wrongdoer.
To allow the one to bleed into the other would be to introduce, contrary to authority and, we submit, basic principle, a notion of what might be called blameworthy conduct on the part of the employer as either requisite or sufficient to make out vicarious liability. If it is blameworthy sufficiently then we are not talking vicarious liability, we are talking about breach of a duty directly owed by the employer.
If the employer is not a wrongdoer, as a vicarious liability claim must have it, then blameworthy are simply extraneous social judgments that you were not more interfering in your employee’s private time, for example, and such blame being social, moral, not legal, of course in ordinary life is mostly informed to a degree that renders it not very important by hindsight. If you have done this, then my son would not have been injured, you are to blame, but very often in such cases the law says that there was no pre‑existing duty, the scope or content of which has been breached so as to bring about that event.
So, for those reasons, in our submission, cleaving, as one must, to the non‑wrongdoer status of the employer in a vicarious liability claim and therefore eschewing elements that might have informed a quite different direct liability case, one simply asks in a case such as the present whether it suffices to say that the stipulation for shared accommodation can possibly be said to provide an occasion the same way as the stipulated activities in Bugge v Brown did as opposed to what the authorities suggest is a handy linguistic contrast as providing simply the opportunity, that is, it meant that the man was there on that occasion, intoxicated and misjudging where he was.
That is an opportunity. In causal terms, there is no doubt about it, shared accommodation is a sine qua non among several sine qua nons, but that, with respect, has never been an adequate basis for vicarious liability, and particularly in the area of conduct of the wrongdoer, the co‑employee wrongdoer, which is not contributing to the enterprise of the employer, it is not – no one sensibly, that is, non‑fatuously says that it is part of your duty as an employee to sleep, eat, drink and excrete. You do not stipulate for people to be operating human beings, physically operating human beings – unless you are an airline pilot, which is different.
KIEFEL CJ: When you say no part of employment – not incidental in any way to the employment not having that connection – you seem to be reflecting the language of Deatons v Flew – if one puts aside the intentional element and the assault there, because the employer was held liable for a negligent act.
MR WALKER: Sometimes one wishes that – I do not mean this entirely seriously – but the facts in Deatons v Flew were as detailed and extensively canvassed in the reasons for judgment as for in Bugge v Brown they are because you cannot help but look for more detail concerning the expectation of the unfortunate barmaid and what actually happened in the moments leading up to the assault. There was a jury and inscrutable findings, concerning those details.
KIEFEL CJ: So, you say it is probably because of the lack of detail and not quite as reliable.
MR WALKER: Yes.
KIEFEL CJ: Or it does not offer sufficient – in relation to connectedness.
MR WALKER: At the level of what I will call “principles” that I say – use that word very charily – at the level of principle concerning connectedness, Deatons v Flew is prominent in the handful of cases in this Court to which the Court of Appeal should have paid, in our submission, a different regard – given different weight. So, there is Bugge v Brown, obviously, which took up and expanded, perhaps, or, at least elaborated the notion of “stranger” which has been, we submit, misunderstood in the Court of Appeal.
It is not a matter of an employee becoming a stranger to an employer – sorry, the other way around – employer being a stranger to an employee – far from it. It is a question as to whether the conduct of the employee defined at the appropriate level of generality or specificity, whether that conduct is of such a kind – I am going to use the word “remote” from the enterprise of the employer as to render the employee a stranger to the employer in carrying it out.
An example that occurs to us is this: there are other forms of shared facilities not in terms of workplace with which your Honours are very familiar, and they are car parks – whether in offices or factories. I am not aware of any case in which there has been earnest debate about the vicarious liability of an employer for the wrong committed by one employee against another – let me assume, causing personal injury – in the car park which is stipulated to be where they must come. If the location is a remote one, it is either impliedly stipulated or maybe expressly specially stipulated that in order to be at work, you have got to park your cars, et cetera.
Now, one can say that is because the care with which one manoeuvres a motor vehicle that brought you to work from wherever you had been beforehand has insufficient connection with the enterprise, is beyond the control of the employer and, as I would add, is simply part of the autonomous adult – I do stress adult; I am not talking about children here – the autonomous adult conduct among themselves of co‑employees. But if you tweak those facts just slightly and propose what would equally be a case where the opportunity for the wrong to be committed is provided by the employment and, in this case, the stipulated shared car parking.
KIEFEL CJ: It was just providing the place where it occurs.
MR WALKER: Exactly, and the slight tweak of the facts, so that you no longer have co‑employees within the car park, but now you have one of the employees leaving the car park in his or her motor car and outside the car park, either on the footpath or some other curtilage or on the way to a public road, striking a pedestrian who is not a co‑worker, just a person.
Now, there is no doubt about it that the concentration of motor cars that have to go from a car park to a public road in the ordinary course, utterly expected by the employer – there is no doubt that the opportunity for that accident to occur is by reason of the employer deliberately – you can add epithets here to conjure up some form of blameworthiness – deliberately concentrates cars which will intentionally be released in rather large numbers, concentrated ways from time to time, given shift end, et cetera, et cetera, et cetera.
In our submission, in the absence of a direct duty of care – and one can easily see how an employer running a car park will have a duty of care to pedestrians who may be affected by the egress of vehicles – that is easy to imagine – but once you turn your mind against any wrongdoing by the employer in such a case and ask, well, how, for vicarious liability’s terms, do these facts yield an analysis in favour of the plaintiff? In our submission, at every turn it falls comfortably – not close, but comfortably away from occasion and well and truly within the territory of mere opportunity.
Your Honours, I have already dealt with our proposition 4. I have said everything I wanted to say in elaboration of proposition 5, particularly in answer to some of your Honours’ questions. Could I briefly remind you of the upshot, if I can call it that, of the plurality reasons in Prince Alfred College 258 CLR 134 at 159, paragraphs 80 and 81.
Now, it is to be recalled, of course, that these are not words which in some Justinian sense is codifying the law. That would be alien to the common law technique of which this case is an example. And it is to be recalled, in particular, that the putative liability in Prince Alfred College arose from those cases which are to be found in all the common law jurisdictions that this court has considered, where an employer places a person, the wrongdoer in all these cases, a criminal wrongdoer, in a position of power, sometimes it is said intimacy, over people who are vulnerable to that and these are abstractions to describe the humanly compelling circumstance of an adult preying on children.
Now, the same will be true of adults preying on prisoners, or adults preying on disabled persons, for example. In other words, there is, in the relation between the wrongdoer and the victim, as the person is often called, there is that disproportion of capacity which renders the one liable to profound breaches of trust on the part of the other, particularly if that wrongdoing is expressed in terms of offence.
The cases are remarkable in the jurisprudence because they map the course by which, or they are waymarks on the course by which, moving away from mere course or scope, moving away from mere unauthorised mode, there is the acceptance that course or scope can still be satisfied, notwithstanding the conduct in question is diametrically opposed to everything that the employer stands for, whether the employer is a prison authority, a hospital authority, a residential college for children, et cetera, et cetera. And it is for those reasons, in our submission, that one needs to remember, when coming to these words to which I am about to come, that I am using them in a case that has nothing in common with those cases, the paradigm of which is the adult put in a position, special role, in which he or she can prey upon children.
KIEFEL CJ: Well, I think even Justice McMurdo said this is not such a case.
MR WALKER: Absolutely. And that makes it all the more important to understand that mere shared accommodation can only be an opportunity. We did not put Mr Hewett there on the basis that he would, as it were, need to look after Mr Schokman. Mr Schokman was his superior, if that matters. In our submission, this case ought never be confused with the occasion cases, which are the housemaster and children cases, for example. Your Honours, is that a convenient time?
KIEFEL CJ: Yes, it is. Thank you, Mr Walker. The Court will adjourn for 15 minutes.
AT 11.18 AM SHORT ADJOURNEMENT
UPON RESUMING AT 11.33 AM:
KIEFEL CJ: Yes, Mr Walker.
MR WALKER: Could I return to the detail further to answer Justice Gleeson’s question. In the core appeal book at page 56 you will see part of the order at first instance where there is the reference to the WorkCover refund. I am instructed that that is a reference to the fact that administratively the plaintiff had been granted the benefit that came from application in his favour of the statutory test in section 32(1) of the Workers’ Compensation and Rehabilitation Act 2003 which in familiar form uses expressions which happen to include “in the course of employment”, as well as, of course, other provisions. But there is no judicial finding about any of that and, there is, as our friends and we show by common cause in this regard, no one has ever pressed the notion that the statutory question informs the common law question.
Your Honours, on reflection, I can note that as to propositions 5, 7, 8, 9 and 10, we have, I think now, in the course of answering some of your Honours’ questions, or trying to, added by way of elaboration to those propositions. Could I simply pick up, apropos proposition 6, what we submit can usefully be understood following this Court’s dealing with the matter in Prince Alfred College. As your Honours scarcely need me to tell you, the actual framing and outcome in Prince Alfred College itself means that it cannot supply the full measure of what the plurality looked forward to in paragraph 46, page 150 of 258 CLR, where there is commended:
the orthodox route of considering whether the approach taken in decided cases furnishes a solution to further cases as they arise. This has the advantage of consistency in what might, at some time in the future, develop into principle.
Hence my guarded use of that word “principle” today. And, importantly:
the advantage of being likely to identify factors which point toward liability and by that means provide explanation and guidance for future litigation.
As is clear about Prince Alfred College itself, though, there was no landing point because of the errors made with respect to the consideration of such matters in light of the fatal problem of limitations. So, we do not know how facts in Prince Alfred College would be decided, and so with that caution one pays regard to what the Court said concerning the so‑called relevant approach, taking ‑ ‑ ‑
KIEFEL CJ: As a description of the common law method, though, in this area of tort ‑ ‑ ‑
MR WALKER: Yes.
KIEFEL CJ: ‑ ‑ ‑ it seems to be similar, if not identical, to that subsequently stated by Lord Reed in Various Claimants v WM Morrison.
MR WALKER: Yes.
KIEFEL CJ: Using the – it is by way of explanation of what “fairly and properly” meant in Mohamud’s Case.
MR WALKER: Yes.
KIEFEL CJ: There, the Supreme Court gave guidance by saying judges should identify from decided cases, factors or principles. It seems to a similar approach.
MR WALKER: Yes, to all of that. What one can say about Lord Reed’s explanation – as it is described – vindication, perhaps, of Lord Toulson’s language – it is certainly has had the effect, from the vantage point of the common law of Australia, of giving weight, further weight, to the commentary upon Mohamud which is found in the plurality reasons in Prince Alfred College. So, there is a dissociation by this Court from one way to read some of the language of Lord Toulson but now we know that in the United Kingdom Supreme Court, it was either mistaken or inappropriate so to read those words. That can be left as a dispute for the academics.
As a matter of satisfying course of common law precedent for this country, such divergence as may have been signalled by the language considered by this Court from Mohamud has been dispelled and, in particular, one sees, with respect, the significance in particular, in the later William Morrison Supermarkets Case – which is [2020] AC. The force in what this Court plurality said at the end of paragraph 83 in Prince Alfred College, page 160 CLR:
a test of vicarious liability –
and this is what was then described as:
designedly different” from the approach in Mohamud.
Then it goes on:
This is because such a test of vicarious liability, requiring no more than sufficiency of connection – unconstrained by the outer limits –
Then we return to the phrase which, in our submission, ought to be the foundation of all the reasoning of individual cases:
of the course or scope of employment – is likely to result in the imposition of vicarious liability for wrongful acts for which employment provides no more than an opportunity.
Now, it is negatively framed and it is by reference to what might now be an extinct controversy with respect to Mohamud but it is evergreen with respect to what it pronounces as a matter of principle or a proper approach to the evolution of a principle, and it means that there still has to be an acceptable manner of referring the course or scope of employment before a person who is a defendant against whom vicarious liability is claimed only because they are an employer – it is in that guise that they are sued – before such a person is held liable.
Once the limit was broken from Sir John Salmond’s tentative first attempt to crystallise an appropriate formula so as to travel beyond what the law of agency might have imported as a satisfying reason for imposing liability, so once one went beyond the limits of authority, then, of course, there needed to be an appropriate consideration of why, as a matter of the policy of the law – principle, if you like – this person should be liable and that person should not – notwithstanding neither is a wrongdoer and in each case the harm has been caused by a wrongdoing employee.
Now, plainly enough, if an employee is doing simply what he or she was paid to do in a stipulated mode of performance, that is entirely satisfying and in accordance with what might be called notions of agency, that the employer be vicariously liable.
EDELMAN J: But that is for the employee’s act, not for the employee’s liability.
MR WALKER: Exactly. So, those are easy cases. But vicarious liability, which does occupy that area in some cases, obviously has grown, at what might be called the intellectual edge of matters, has grown as tests are raised to the sufficiency of statements of principle. Tests, in particular, that this Court performed with respect to out-and-out crime, at reaching a conclusion that the common law world generally has reached, namely that crime does not remove the wrongdoing from that for which an employer may be vicariously liable. Hence the significance of the description of the so-called relevant approach in paragraphs 80 and 81, applying to what are called:
cases of the kind here in question –
Or:
cases of this kind –
They are not cases of the kind that our present proceedings raise, for the reasons I have put just before the break, namely that it is far too strained and contrary to common sense and the ordinary experience of living to regard the assignment of two employees to shared accommodation as the assignment to one of them of a special role with respect to the other, when it is absurd because it must be exactly equal and mutual.
They are each assigned to a special role. We would rather indicate that they are either therefore, in the eyes of the law, all of them vulnerable to anything that happens in such a way as to bring about vicarious liability for the employer, or rather, in accordance with common sense, they are simply autonomous adults behaving exactly as they would if they were lodgers in a boarding house unconnected with the employer, or members of a shared household in a residence in the suburbs.
EDELMAN J: Is that the effect of that submission that it actually does not matter, perhaps in any case, whether the act is intentional or negligent, or whether it is criminal and tortious or just tortious, provided that the characterisation of the act is one that is in the course of the relationship of the employment?
MR WALKER: I do not think one can possibly say that after the extreme, bordering on bizarre facts in the William Morrison Supermarkets 2020 case where the Court was faced with, in my words, the spectacle of the company sabotaged – sabotaged – by wicked criminal conduct of a person who had, of course, abused trust in terms of confidentiality, then having insult added to injury by being held liable to others, including, understandably, employees, suffering from that act of sabotage. And that is a case which is surely dominated by consideration of what it meant that this wicked person was at home hatching plots, not at work doing anything which could even be possibly described as unauthorised mode, for example.
And so, I cannot possibly say that intentionality does not matter, because that happens to be a very striking case of where it is probably the driving feature, using the word “feature” in the way this Court suggests one should look for them in decided cases. Now, we do not have that here. There is intentionality, but only in the weakest sense of intentionality, and that is the whole problem with intoxicated conduct, of course.
KIEFEL CJ: Is not the 2020 case of WM Morrison – is not its focus really on the closeness of connection with acts that are authorised?
MR WALKER: Yes, very much. But the intentionality, that is, the at‑home plotting and carrying out a planned act of sabotage ‑ ‑ ‑
KIEFEL CJ: Disassociated or disconnected it, is what you are saying?
MR WALKER: Yes.
KIEFEL CJ: Accepted, that was the disconnect.
MR WALKER: Yes. That is right. In all of these cases no one gets anywhere unless there is a connection that can be traced causally. So, all the cases have some kind of causal connection, and, usually, more than merely temporal. That is, not just unmeaningful coincidence.
KIEFEL CJ: But it is another thing to say that something is completely disconnected.
MR WALKER: Absolutely.
KIEFEL CJ: So, degrees of connection might not be useful, but the disconnection – which is really what Bugge v Brown was talking about.
MR WALKER: Yes. And, in our submission, that does not mean that there is vicarious liability there unless there can be something called disconnection accomplished. That is a final term of characterisation of a state of affairs which will always – in every case – display some connection. That is, hence, mere opportunity. A mere opportunity is a connectedness. It is an inadequate connectedness for the purposes of vicarious liability. That is the importance of paragraph 83, which is a discussion of Mohamud by this Court.
GLEESON J: Again, that seems to be much more appropriate when you are looking at the case of criminal wrongdoing, which is clearly not for the benefit of the employer. Here, when you are thinking about the scope of employment, a necessary – I suppose what I am wanting to suggest to you is that the idea of scope of employment is really another way of talking about enterprise.
MR WALKER: I would ‑ ‑ ‑
GLEESON J: And in this case the point is that the employer needed to provide accommodation for staff and chose to provide it in a way which stipulated who would sleep together.
MR WALKER: But nothing in that stipulation has anything to do with intoxicated incontinence. Nothing to do with at all.
GLEESON J: Well, it does. You do not know whether you are going to be the person who gets to sleep with the drunk.
MR WALKER: Your Honour, that is verging into the dangerous territory of blameworthy conduct. I am not checking the temperance of employees, which was no part of the direct liability case as it happens to have been mounted, unsuccessfully in this case, and has never been part of the argument. And, in our submission, the notion of warranting the fitness of housemates when they are autonomous adults entitled to spend their time as they see fit, out of hours, is soundly to be rejected as having any reasonable element concerning an employer’s responsibility.
The same would be said of people who insist upon engaging with calisthenics at odd hours in closed spaces, which, quite apart from the well‑known danger it has to the person performing them, can obviously also hurt others, particularly in close proximity, the notion that an employer is liable in such a case is, in our submission, so unreasonable as to answer the rather less robustly‑expressed last sentence of paragraph 83 in Prince Alfred.
May it please your Honours.
KIEFEL CJ: Thank you, Mr Walker. Yes, Mr Diehm.
MR DIEHM: Thank you, your Honours.With respect to the issues concerning the arrangements that were created by the employer’s stipulation about living on the island and the submissions that have been made by our learned friends this morning, there are a couple of key points that we should make before proceeding on with the balance of our submissions, because they are somewhat critical in an understanding of those issues.
The first of them concerns matters that arose from a question that Justice Steward asked of our learned friend about whether it was an option for an employee in a position of Mr Hewett to in fact live elsewhere on the island at his own cost, perhaps in what would otherwise be a holiday suite available for a guest of the resort.
There was in fact no evidence that that was an option. In the course of the trial concerning the primary liability of the employer, there was a case put by the respondent to say that he had made various complaints about the requirement to share the accommodation with Mr Hewett and that the employer ought to have acted in response to those and caused different arrangements for accommodation, more particularly for the respondent to live in his own accommodation. That case was rejected. There is no part of the appellant’s case at trial to say that it was an option, if that is what the respondent wished to do, for him to find his own accommodation on the island at his own cost.
Now, all of those matters are dealt with in the judgment of the trial judge. They were not traversed again in the appeal because those matters were not in issue on the appeal. But, more tellingly than even those circumstances, is that in the pleadings – which are not in the book before the Court, but we can make the relevant pages available if the Court pleases – in paragraph 3 of the second further amended statement of claim, there was an allegation that it was a condition of the employment that the plaintiff live on Daydream Island in accommodation shared with another employee. And that allegation was admitted in paragraph 2 of the corresponding defence.
That is the way the Court of Appeal dealt with it. It did not deal with it as Justice Steward fairly raised, in terms of the way in which that clause that Mr Walker took your Honours to raised the spectre of, that is to say that whilst it was a requirement to live on the island, it was the option for the employee to fulfil that requirement by ‑ ‑ ‑
KIEFEL CJ: Mr Diehm, whichever words one uses, the tenor of what you are saying is that we should approach the matter on the basis as the Court of Appeal did, that there was a mutual understanding that that is how things would be.
MR DIEHM: Yes, it was the requirement that he live in the accommodation that was provided by the employer, with no other option. Now, otherwise, with respect to the submissions that have been made concerning the nature of that accommodation, described by our learned friends as being private accommodation, in our submission, the Court should not accept that that is the proper characterisation of the accommodation, as it was provided to Mr Hewett as well as to Mr Schokman, and in support of that there are several findings of the trial judge that bear upon those matters that were dealt with in the primary liability case but which are relevant to the issues that are sought to be agitated now.
If we can take your Honours to page 17 of the core appeal book, and the findings of the trial judge that are there, your Honours may see from page 16 that there is a heading “Findings of Fact on Liability” and his Honour Justice Crow then set out certain facts that were contended for by the respondent that he accepted and adopted. In paragraph 8, his Honour, having acknowledged that the respondent occupied a few days earlier this particular unit, and then on 1 November Mr Hewett moved into it, and that that movement of Mr Hewett in to share the accommodation was in circumstances where Hewett was not known to the respondent and, in (d), the respondent:
was not consulted about Hewett moving into the accommodation.
On page 36 of the core appeal book, in paragraph [110], there were the findings of the trial judge concerning the matter I mentioned a few moments ago about the allegations that the respondent had made complaints about his co‑occupation with Mr Hewett and asked for that co‑occupation to be brought to an end. His Honour noted there the limited nature of what he accepted as having been the complaints made by the respondent, being that he thought that Mr Hewett was a “bit odd” and he had “a concern” about him being a subordinate to him and that making it “inappropriate” for them to share the same room.
The finding of the trial judge about it being a “bit odd” related to the evidence that his Honour was satisfied established that the complaint concerned an event that Mr Hewett had been discovered by the respondent to have folded his laundry and left it on his bed, which he made an objection to, to the employer.
The point of the drawing of this reference is to say that, consistent with this being something imposed upon the respondent, this – unlike private accommodation arrangements that people may make – was something that in the response of the employer, the respondent simply had to accept. The response of the employer, which his Honour regarded as having been reasonable, was to say that there was no other alternative accommodation available, as things presently were, and that the matter would be looked into, and that if an opportunity arose at a later time, then a change could be made.
If the respondent was living in a situation – and Mr Hewett, for that matter, were living in a situation as they would in a private accommodation arrangement, they, of course, would not have to suffer the imposition of such matters upon them. They would not have to live with people whom they did not wish to live with. But they each had to because that was a requirement of their employer and they did not have any freedom with respect to it.
The final matter in terms of the factual reference is relevant to this. We should draw your Honours’ attention to it – from the trial judge’s decision, it comes from pages 13 to 14 of the core appeal book. At the foot of page 13, paragraph [35], in the final sentence on that page, his Honour referred to:
Page 5 of the contract of employment –
that is before the Court that your Honours have been taken to that speaks about drug and alcohol testing. Over the page, on page 14, there is a reference to Ms Anthony – who was a supervisor called by the appellant, who was employed by the appellant – explaining about alcohol consumption being monitored at the staff village:
limited hours for the opening of the staff bar –
The staff bar being staffed by Responsible Service-qualified people; and then, in the final sentence:
In addition –
her evidence was:
room checks were made.
So, again, when our learned friends submit that the state of things was this was private accommodation that was for these individuals to enjoy to themselves, that is, with respect, wrong for two reasons. One, because, as we have shown, each of them had to live with the person the employer said they had to live with, and secondly, because the employer exercised rights of dominion over it, as it were, with respect to inspection, that would not be consistent with what would ordinarily be the case in a lease.
Our learned friends perhaps shied away from going so far as to say that there was a right of exclusive possession attached to this occupation, but it is our submission that it is plain it was not, even though the contract of employment spoke about a requirement to give up possession if employment was terminated, within a 24‑hour time period.
The fact of the matter is that, if a person has to share accommodation with another person not of their choosing, they can hardly be said to have exclusive possession. Even when the contract spoke about them giving up possession, it could not have been in the ordinary sense because all they would be giving up would be the use that they were making of the room itself, together with another person.
EDELMAN J: Is your submission, then, that really all that Mr Schokman had was a licence that could be presumably terminated according to the agreement of the parties?
MR DIEHM: Yes, and with one further factor: consistent with the evidence of that supervisor, the person might be moved about from month to month, from room to room, so the licence was temporal in that sense with respect to any individual room – was as far as it went.
STEWARD J: How can we draw that inference when the letter of appointment refers to a tenancy agreement and the giving up of vacant possession?
MR DIEHM: Well, of course, we have the difficulty of not having the tenancy agreement.
STEWARD J: I understand that, but the onus is on you.
MR DIEHM: Quite so. Of course, if the respondent has adduced enough evidence to show the connection with employment – if I use that expression for now, it being in the course of employment – to argue that some further facts might have shown that it was not, reflects a shifting burden and one that was not taken up by the appellant. It is our submission that ‑ ‑ ‑
STEWARD J: Well, leave aside the onus just for the moment. The letter of appointment talks about a tenancy agreement and vacant possession being given up.
MR DIEHM: Yes. The reference to the movement is a reference based on evidence that was given, and it has certainly adopted ‑ ‑ ‑
STEWARD J: And the room checks might have been with the consent of those who have explicit possession. How would we know?
MR DIEHM: Well, because – to answer that question, firstly we say there was no right of exclusive possession, and there cannot be where you have to share a room with somebody else.
GLEESON J: You cannot give up vacant possession if your roommate stays.
MR DIEHM: Quite so. So all the indicia are against there being exclusive possession. It may be said that, for the reasons that your Honour is articulating with me, Justice Steward, that there was, in fact, a licence that for its duration, however long that turned out to be, that it was for the particular room to which you were assigned, and the evidence that I point to may only, as your Honour has identified, say that that licence could only be varied as to which room it was, with the consent of the parties. Perhaps that is so.
STEWARD J: Did any of the judges below make a finding that it was a licence?
MR DIEHM: No, nor did they make a finding that it was exclusive possession.
EDELMAN J: Well, Mr Diehm, I think the term “exclusive possession”, or at least the term “possession”, in the sense that Mr Walker used it, was being used in a technical sense in land law, that two people can both exclusively possess under – you can have co‑tenants and they both have a right of exclusive possession.
MR DIEHM: Yes, I take that point, your Honour. Now, with respect to the balance of the argument, what our submission is, is that in a circumstance where an employer says to its employee, as it did to Mr Hewett, you are required as part of your employment to live on the very island where your workplace is, where you perform your duties, and that is where you are to stay while so ever you are an employee, our submission is that that becomes the starting point for saying that whilst the person is in that accommodation, they are acting – or, sorry, they are within the course of their employment.
Now, we do not submit that that then is a complete answer to the question, because, as Chief Justice Gleeson observed in a passage we have noted in our outline, a person may be at their place of work and yet not be acting in the course of employment, or a person may be away from their place of work and yet be acting in the course of employment. The question becomes whether, in a circumstance where this man was where his employer required him to be for the purposes of his employment, he was then engaged at the time of the tort in an act that made him a stranger to his employer, to adopt the terminology used in Bugge v Brown.
That raises the question, as our learned friend identified, of the level of generality at which one must identify the act in terms of what Chief Justice Gleeson referred to in Lepore in paragraph 51 of the reasons that his Honour gave. We differ from our learned friends in that we submit that the act which must be focused upon here, on the facts of this case, is the act of urination. It is not the act of negligent urination which, as we understand our learned friend’s submission, is the contention on behalf of the appellant. We say that because the negligent characterisation of the urination is not the act itself. It is just that. It is the characterisation of the actual act.
In what his Honour said, dealing in a slightly different context, of course, at page 78 of the bundle of authorities, paragraph 51, his Honour said regarding the Salmond test:
the answer to a question whether certain conduct is an improper mode of performing an authorised act may depend upon the level of generality at which the authorised act is identified.
Given that his Honour is speaking there of improper modes of performing an authorised act, he is not speaking of the first class of case on the Salmond test, being whether the act was itself simply an authorised act, but rather whether it is an act that is being negligibly performed and, in our submission, it distorts in the very sorts of concerning ways that Chief Justice Gleeson identified in that passage, the question and, in turn, the answer to look at whether the act being performed negligently is the act that was authorised by the employer because, quite commonly, it is not a question as to whether or not the employer authorised the act to be performed negligently, but rather what was the act which as it turned out was performed negligently.
EDELMAN J: Does that mean it would not have mattered whether it was negligent or intentional, in the sense of malicious?
MR DIEHM: To establish vicarious liability? It would, because if it was an intentional act, then it may become an act so strange to the employment, to take it outside the course of employment, unless the respondent or the injured person could in those circumstances bring himself within the kind of reasoning that was developed in the plurality reasons in Prince Alfred College. So, as was the case in the Various Claimants Case in 2020, the motivation of the person – if there was a motivation, as opposed to the circumstances here – but an ill motive on the part of the person can be relevant to a determination as to whether or not an act is within the course of employment.
KIEFEL CJ: But the act must be viewed objectively, surely.
MR DIEHM: To understand what the act is, yes.
KIEFEL CJ: Because your – the question of vicarious liability is not answered by reference to whether or not the employee’s act was unintentional or intentional, it is whether it was negligent.
MR DIEHM: But there is ‑ ‑ ‑
KIEFEL CJ: And then does – however one qualifies it beyond that surely does not really assist answering the question of whether the employer should be held liable. I mean, in Deatons v Flew, as Chief Justice Gleeson explained, you could view it on either way. It was either an act of personal retribution or a gratuitous unprovoked act. But the point was it was so far removed from what she was employed to do that the employer could not be liable.
MR DIEHM: We accept, your Honour, that on certain facts different states of mind may not make a difference.
KIEFEL CJ: It may intrude, I think that is what Mr Walker was saying, intention may in some rare cases – and maybe Various Claimants can be explained on that base, although Lord Reed seems to be talking about connectedness, but perhaps that was what disconnected it in that case.
MR DIEHM: And Lord Reed in the Various Claimants Case spoke about connectedness as answering the question as to whether or not something was in the course of employment.
KIEFEL CJ: Well, it often does, but sometimes it does not. And Prince Alfred, I think, made the point that it was not of particular assistance there.
MR DIEHM: Yes, but with respect ‑ ‑ ‑
KIEFEL CJ: In that particular class of cases that it was really talking about.
MR DIEHM: But, of course, in Various Claimants the test being spoken of now by the United Kingdom Supreme Court is phrased differently, intended for different emphasis. And in the language that is adopted by Lord Reed in Various Claimants, the test as it is articulated is one that is directed to answering the question as to whether or not something was in the course of employment. Can I take your Honours to ‑ ‑ ‑
KIEFEL CJ: Well, that has always been the case. I mean, that test has never been doubted. That is essential.
MR DIEHM: Yes. The way in which it was expressed by Lord Steyn in Lister originally, and indeed then later in Mohamud, seemed to invoke a test that was described rather as if there was a sufficient connection with employment that it was “fair and just” to impose vicarious liability, whereas the articulation of the test by Lord Reed ‑ ‑ ‑
KIEFEL CJ: Well, his Honour had to explain what “fair and just” meant there.
MR DIEHM: Yes
KIEFEL CJ: And his Honour’s explanation of what Lord Toulson meant was “fair and just” according to what decided cases had really told you about the matter.
MR DIEHM: Quite so. And added, then ‑ ‑ ‑
KIEFEL CJ: We must accept Lord Reed’s explanation.
MR DIEHM: We must, and I do not suggest otherwise. But it seems, in my respectful submission, that the way in which that test is now being articulated, says what is now described as, I think, fair and proper – was the language used by Lord Reed, fair and proper, not to decide to impose vicarious liability but fair and proper to find that it was in the course of employment. That may have the same practical result, but that seems to be what the test is directed to.
GAGELER J: Mr Diehm, if we go back to the Lister kind of case, Mr Walker is telling us, well, there, those cases of particular vulnerability were concerned with children and the particular possibility of abuse or misconduct in relation to children in that kind of case – put that to one side.
But really, what you seem to be saying is, well, there is a special vulnerability in the circumstances of this case that comes from the fact that the plaintiff was required to bunk down with the defendant’s employee. And that created the possibility of some sort of abuse or misconduct in that otherwise domestic setting. My question is, if we are trying to find some guidance from the cases, what can we find about the circumstance of the vulnerability of the plaintiff to abuse or misconduct by the defendant’s employee? Can we draw any principles out of the cases that might applicable here?
MR DIEHM: We can. In our submission, in Prince Alfred College, the plurality judgment spoke, as your Honours are no doubt entirely familiar with, of a number of factors that might be indicative of there being a relationship between the tortfeasor and the plaintiff that could bear upon a conclusion that something was ultimately in the course of employment despite the Samin test itself not being necessarily engaged.
The Court included amongst those as power, control and trust as being those sorts of factors. We do not suggest that in this case there was any element of power or control – I should have said power, control, trust and intimacy, I think, were the four factors identified by the Court. We say two of those ‑ ‑ ‑
GORDON J: “Ability to achieve intimacy”.
MR DIEHM: Yes, I am sorry, that is – I ought to have expressed it that way. Now, here, the relationship that is created is one where these two people are in very close proximity. Now, that is certainly the creation of an opportunity but it is a factor that also starts to lend some weight to an occasion because where the two employees may be residing in much more spacious accommodation, indeed, even with barriers such as doors between them when they are asleep, the closeness, the intimacy, as we use it in that sense, that might exist in terms of their cohabitation would be diminished. Here, they are very proximate to each other, increasing the way in which these circumstances might facilitate this event as occurring.
The critical one, though, is the question of vulnerability, and that is because the expectation is that these two employees are going to sleep there, and, of course, when a person is asleep they are particularly vulnerable to the actions of others present in the room, and vulnerable in the sense that their ability to protect themselves is obviously virtually non‑existent.
GAGELER J: Mr Diehm, just to tell you what is playing on my mind, we are concerned here with an act that was rather bizarre ‑ ‑ ‑
MR DIEHM: Yes.
GAGELER J: But if we were concerned with almost the same scenario but the act was a sexual assault, perhaps one would think about the factors affecting liability slightly differently.
MR DIEHM: Yes. One may do so, and of course what was said by the plurality in Prince Alfred College about those sorts of factors was not any more than what was said by Lord Salmond in prescribing his test to some sort of statutory test for determining whether or not something is in the course of employment.
They are but examples, but they are examples intended to indicate the sorts of features that could mean that a relationship between two people is one – the relationship having been created by the employer is one that means that this was not just the opportunity for the tort to be committed, that is, that the two people happened to be at the same place at the same time, but rather that there were features of the relationship as created by the employer that were essential – as it were – for the tort to be able to occur. That is the point, in our submission, about what is established by the approach of the plurality in Prince Alfred College.
KIEFEL CJ: Apart from putting them in the same place, what conditional features are they?
MR DIEHM: Because they were told to be in the same place as their place where they would sleep. So, that meant that the respondent here had a vulnerability that he would not have had but for the arrangements required by the employer to be in place.
KIEFEL CJ: It sounds like a duty to make sure that everyone has their own individual accommodation.
MR DIEHM: Well, of course, we are not speaking about a duty at all.
KIEFEL CJ: No, we are not, that is the point.
MR DIEHM: The question is, as was identified in Prince Alfred College, about whether or not there are features of the relationship that means – that were used to commit the tort, it means that the tort was committed in the course of employment.
GORDON J: We put this to Mr Walker and he is right to say you do not merge the three categories: agency, non‑delegable duties and vicarious liability.
MR DIEHM: We accept that.
GORDON J: But it seems to me that the argument you are putting to us is very much like a non‑delegable duty, that is, there is a duty upon the employer to make sure that the shared accommodation that is both offered and in effect allocated is safe. It is in effect a duty imposed as to be met. Is that not the way you are putting it?
MR DIEHM: It is not, with respect, the way we are putting it. We put it on the basis of saying – and I should take back a step to particularly emphasise this point – in answering these question I have been responding to a question from Justice Gageler, and I have been adopting an alternative argument that we have been putting, that is to say, that if one gets to the Prince Alfred College stage of analysis, this is how we say that that can fit with what is said here.
If we do – our primary argument is that we do not, we do not need to, because in the conventional way, with respect to most vicarious liability cases outside of the intentional criminal acts, one does not need to do that. One can go back to the decided cases and look at features of them to say that this is in the course of employment.
GORDON J: I think that is what Justice Gageler asked you, and what are the factors drawn from the cases that you say you rely upon and you call the traditional route?
MR DIEHM: All right, thank you. I appreciate that I may well have misapprehended the direction in which those questions were going, so I will answer that in this way: we say that this case is materially indistinguishable from Bugge v Brown. Our learned in friend in his submissions, referred to the cooking – the use of the fire in Bugge v Brown as something happening on the factory floor, to use that analogy.
Our submission is that that is not a sound analogy. In fact, the fire that was lit, in contradiction to the instructions that were given to the employee, was one that was lit some shorter distance away from where the work was being performed, albeit closer to where the work was being performed than the old homestead. It was, in effect, a fire that was lit in the lunchroom, if one wishes to continue the analogy with the factory floor. It was a break. It was a break between the time when the employee was expected to be performing his duties. It was a break that was, one, contemplated by his employment, and indeed the employer of course gave him instructions about the fire, where to light it, gave him the food to cook.
Ordinarily, those workers – including Mr Winter – lit a fire at lunch to boil a billy but on this particular day, because of the absence of the cook, they also had to cook meat and that was the task that he was attending to. So, the lighting of the fire on a break was an ordinary thing for them to be doing. It was necessary, of course, that they light a fire at some place remote from the base of the workstation because that was what their work required. It required them to be away from the homestead where the employer himself was based and to accommodate that circumstance by making a fire to cook chops and to boil a billy during the course of the break.
So, that is analogous, in our submission, with what we are dealing with here. We have employees who are on a break between their duties that they have to perform. The employer provides the place for them to go to when they are on that break. True it is, as our learned friend has submitted, that there is no instruction given to the employees as there was in Bugge v Brown about the lighting of the fire and where to light the fire – here, where to go to urinate. But one should have thought that no express instruction was required and that in the ordinary common sense, the provision of a toilet within the accommodation that the employer provided was as good as an implied instruction that this is where you go to urinate.
So, in that respect, all of those features are in common. That is the analogy that we draw from Bugge v Brown and it is our submission that that is what the Court of Appeal has done as well. To say that just because the employees here – or Hewett, here – is not performing his duties of a barman at the time at which this event occurs, does not make him a stranger to his employment – as Justice Isaacs said – because his employer expected him to be where he was for the purposes of his employment. Undoubtedly, like Mr Brown expected of Mr Winter in Bugge v Brown, the employer here expected his employee – or its employee – to have to use the bathroom from time to time and that the employee would do that.
So, my apologies for the roundabout way of getting back to Justice Gageler’s question. That is the analogy that we say comes out most strongly from that authority and that that is sound enough and, with respect, despite the unusual nature of the facts in this case, a rather conventional analysis of the question of scope of employment and vicarious liability.
If your Honours would bear with me for a moment. I should, just to make good those submissions, take your Honours to a couple of the things said by Justice Isaacs in Bugge v Brown that illustrate those points. In particular, if I can take your Honours, starting at page 12 of the bundle of authorities ‑ ‑ ‑
STEWARD J: Could you give a Commonwealth Law Report page?
MR DIEHM: Yes. It is page 117. Sorry, I should have said 116.
STEWARD J: Thank you.
MR DIEHM: There his Honour said, about two‑thirds of the way down the page, that the:
responsibility . . . does not depend merely on the question of authority, express or implied.
And some well‑established propositions about the liability of the act going beyond, potentially going:
beyond any authority actually given by him.
Then, if we may go to page 14, at the top of the page. That is page 118, I am sorry, Justice Steward.
STEWARD J: Thank you.
MR DIEHM: At the top of the page, his Honour referred to the scope of employment test – the “course of employment” test and other phrases – and there used the expression we are familiar with about the employee acting:
so . . . as to be in effect a stranger in relation to his employer –
A theme which he picks up in the further analysis, and explains about halfway down the page that expression as having at its core the idea that liability must cease:
where the relation –
that is, “master and servant” itself:
ceases to exist.”
So that is the test that is being posited as to how to answer this question, a difficult question as it is, as has been acknowledged several times by this Court. His Honour then goes on to say in that paragraph numbered (8) that:
The act of the servant complained of is regarded as outside the relation, and as that of a stranger –
if firstly:
he did not assume to act within the scope of his employment –
or, perhaps importantly here:
if what he did was a thing so remote from his duty as to be altogether outside of, and unconnected with, his employment –
And that is a passage that was cited and quoted indeed by Justice McMurdo in the critical part of the judgment. In that respect, we go back to the factual premise here that we have an employee, Hewett, living in accommodation that his employer said that he has to live in with his co‑worker at the time that he commits this act, being an act that it was inevitable, that is, once we can focus on it of being the simple act of urination, not a negligent act of urination.
KIEFEL CJ: Does that mean the employer is responsible for every act of Mr Hewett’s that injures the plaintiff in this case because it occurs at a place where he is required to be?
MR DIEHM: No, because, as Chief Justice Gleeson said in Lepore, and as cases such as Deatons v Flew demonstrate – I mean, there the employee was at the place of work where her employer required her to be. She was attending to things that her employer required her to attend to.
KIEFEL CJ: Well, where do you draw the line? How does one draw the line?
MR DIEHM: Yes, I am sorry, your Honour. You draw the line – difficult as it may be, but it is always a question of fact – at a place where it is said that what the employee did, to say as Justice Isaacs here said:
was a thing so remote from his duty as to be altogether outside of, and unconnected with, his employment.
KIEFEL CJ: His Honour is speaking of the act in question, the act which Mr Hewett did had to be so outside the employment.
MR DIEHM: Yes, that is so. That is what ‑ ‑ ‑
KIEFEL CJ: Why would we not take that view?
MR DIEHM: Because this was an act that was necessarily incidental to his employment.
KIEFEL CJ: It is incidental to life, that does not mean it is incidental to employment.
MR DIEHM: Yes, but what makes incidental to the course of employment here is that the employer has required him to be in this accommodation, together with his fellow employee. And to make good that proposition, one may say that if a worker negligently leaves a tool in a place where it may cause injury to a fellow worker if they come along and make contact with that tool, then there can be not only liability for the worker but there can be liability for the employer for vicarious liability. One could easily posit that that same worker could have, at home, left a tool sitting on a workbench that would still, if a person came along and suffer injury, result in that employee occurring liability, but it would not, obviously, result in the employer incurring liability because it is not in the course of employment.
Here, what makes the commission of his act in the course of employment is the fact that he is in this accommodation sharing it with his fellow worker just as if he was leaving the exposed tool on a workbench in a factory floor, as opposed to his own home. So that is how that connection is made.
EDELMAN J: Mr Diehm, can I just ask you about this paragraph (b) of the test of Justice Isaacs that you rely on. Is the notion of being outside the relation if something is so remote from the duty that it is unconnected with employment just the flipside or perhaps a looser version of the flipside of the Canadian test which asks whether something is within the concept if it is closely connected with employment? Both of them seem to employ this notion of connectedness to the employment.
MR DIEHM: Yes, I take your Honour’s point, and it does seem that that is a fair observation, with respect, that it seems the flipside of that. It is done so without any question of a value judgment being imposed on that as well.
EDELMAN J: Was there any doubt that it was cast on the Canadian approach in Prince Alfred in the joint judgment?
MR DIEHM: There is doubt about it, but I do not think so much about challenging with respect to that kind of formulation, in my recollection.
GORDON J: In Lister, their Honours identified that the close connection had really, they think, could be seen to be what they have described as the germ of it having come from Salmond’s test itself, and they identified a passage that had been overlooked and explained that there it was put in terms that a master is liable even for acts which are not authorised, provided they are so connected with acts he has authorised, that they might rightly be regarded as modes or improper modes of doing the thing.
If you look at it in that vein, and there is a much closer requirement for the connection between authorised and unauthorised acts – because one is looking to see how the act itself is somehow connected with what the person is doing in their employment – it does not quite work here, does it, because your act is the act of urination, and so it is a level of generality which does not tie it to employment or the authorised acts which are necessary for the employment.
MR DIEHM: With respect, your Honour, that would be so if one read authorised acts as being a reference as one would in an agency case to a question about what is authorised, but the authorities are against doing that. And where Lord Salmond used that expression – what the authorities developed over a long time and, indeed, it was the subject of observation by Justice Isaacs even in Bugge, that one is looking at the scope of employment as being something broader than just a precise identification of the things that I am employed to do, but rather, to try and characterise the employment and my role.
GORDON J: That is right. He is saying, I can look at unauthorised acts, I can look at it so long as the things that are done – the acts that you rely upon – are somehow connected with employment.
MR DIEHM: Yes, quite so. Our submission is that when human beings are employed to do work – as must be done – all of the things that human beings will inevitably do – or which might be said are so natural as to be expected that they would be done by an employee whilst they are engaged in their employment – are caught by the concept of “the course of employment”. That is what is, in our submission, captured by references of – perhaps apart from other things – but captured by references to things being “incidental to” employment.
And so it is in Bugge v Brown because – to take up what the Chief Justice raised with me before – as much as it is something that people do – that is, to urinate, whether they are at work or not at work – so it is that people eat when they are at work or not at work.
KIEFEL CJ: Yes, but in Bugge v Brown, it was part of his remuneration. It was not only authorised, it was part of his remuneration to cook his midday – the luncheon meal. What was not authorised was for him to do it out in the open. But the employer was held liable for that even as an unauthorised act because of its connectedness with the work. It was – I think Justice Isaacs said – in effect, the same act, cooking the lunch.
MR DIEHM: Yes.
KIEFEL CJ: That was the basis for liability.
MR DIEHM: In Bugge v Brown I referred a few moments ago to the circumstance of the employees, whilst they had to cook the meat on this day because the cook was not available, ordinarily made a fire to cook – to boil a billy, and so the lighting of fires by them was not only something done because of the need to cook the meat. But if I may take up your Honour’s point by going to a few passages in Justice Isaacs’ judgment, firstly at page 127 of the Commonwealth Law Report, there is a passage starting about halfway down the page there, that says:
After working that paddock east and west . . . on what the Chief Justice calls “a warm summer’s day,” the men were probably fairly tired and hungry.
Skipping over what Winter probably did as an expedient, it then says:
The act of cooking the meal was not the single purpose of the defendant’s authority to cook, it was not even the main purpose, it was in itself a subsidiary or incidental purpose –
But this:
main purpose was practically impossible without the subsidiary purpose.
And over the page:
Hungry and tired men are none the worse for an earlier meal and more rest in the interval between the morning and the afternoon hours of labour. And the employer gets the benefit of this also. The meal at the old chimney was no “excursus” of the servant; it was not “a frolic of his own.” It was something purporting to be done in the line of the servant’s employment. And it was no so remote from the employment as directed –
Now, whilst here a modest rent was paid for this accommodation, that, in our submission, is not a reason to divorce it from what was a total package that this employer put forward as part of the contract of employment. The scope of employment was that you will do your work on the appointed hours and then in between you will use this accommodation so that you can fulfil the purposes that I require you to fulfil. That is, all of that is an incident of the employment. All of that is, in our submission, within the scope of employment. The idea that employees need to take breaks during the course of their working day to use the toilet is something that is obviously for their benefit and, as the Chief Justice has identified with me, something that they would ordinarily do in their own time.
But, it is also something that they need to attend to, to allow them to be able to perform their work – just like these men needed to have a rest and eat some chops and drink a cup of tea, an employee needs to go and use a bathroom, otherwise they are not going to be in a position to be able to fulfil their duties to their employer as part of the contract of employment.
One can think of a whole variety of other bodily functions that they must attend to, of course, in the course of their work that, in our submission, are equally attracted there – so that the employee who careless coughed over another employee that might have triggered an illness or caused a disease, if that happened by two workers standing next to each other on the factory floor, there could not be any doubt, in our submission, that that would, by analogy, be something that would be regarded as having happened in the course of employment, and so this is here.
The same example could be said if an accident of this kind had happened between two employees standing at a urinal in the toilets provided in a factory. There is, in our submission, such an obvious connection between the work and activity of this kind as incidental – though not the actual acts that the person is authorised to perform, but they are incidental to those acts, in our submission. Indeed, one would have thought that if the employees were to abstain from it, that they would end up either physically injured themselves or in all sorts of other problematic situations. Consistent with that, employers, of course, invariably provide toilet facilities for their employees, as was done here.
Your Honours, those are our submissions.
KIEFEL CJ: Yes, thank you, Mr Diehm. Do you have anything in reply, Mr Walker?
MR WALKER: May it please your Honours. The fact that accommodation is shared does not relevantly mean it is not private, it is not private in the sense that it was separated between the two persons sharing it, but it is, of course, vis-à-vis the rest of the world, including their employer and its other employees, private. That is the whole point.
In terms of the characterisation of the proper level of generality of the act in question, the way our learned friend has put it at the beginning and end of his address is that one concentrates on the act of urination. I will not go back to it, we have said, seeking to insist in‑chief that it is actually the act of negligent, misaimed urination. But the act of urination, says our learned friend, is in the course of employment. Now, that is intuitively and colloquially an odd proposition in the same way as all the other ways in which the exercise of bodily functions of one person may harm another person cannot be regarded as being in the course of employment.
My learned friend ends with, in our submission, an evocative example: a factory floor, which it may be assumed is not in breach of any regulations, because otherwise there is direct liability, a factory floor which it may be assumed is not being conducted in breach of this duty of care owed by an employer to all workers, for again that would be a direct liability case.
My learned friend simply says that because what I will call respiration, that is inhalation, exhalation, including exhalation in the form of coughs or sneezes, that because that occurs on the factory floor, there could not be any question that there is vicarious liability by the employer for what is, I gather, ex hypothesi, a negligent cough. Most coughing is not negligent, it is involuntary. Non-guarding, proximity, et cetera, et cetera, may turn that involuntary conduct into negligent conduct. That is the hypothesis upon which my friend puts forward that homely, topical, and, in our submission, evocative example. It is not sensible to say that workers breathing – or for that matter sneezing or coughing, as irregularities in respiration – is “in the course of employment”. It is certainly not part of their duty. It would be laboured to the point of ludicrousness to propose that it is part of your job to keep breathing.
EDELMAN J: That may be the very question that we have to deal with, which is whether or not a negligent cough or negligent urination at the urinal on the factory floor that causes injury is within this concept of the “course of employment”, which raises a very big question of, well, why vicarious liability imposed in the first place?
MR WALKER: Yes. I agree with all of that.
EDELMAN J: If the answer to that is because the costs of the enterprise need to be borne together with the benefits of the enterprise, then why would there not be vicarious liability in those examples that Mr Diehm ended with?
MR WALKER: With respect, that is why – and this is certainly not the vehicle – bearing in mind the way in which the case was decided below, has been argued here, and the law appears in Prince Albert College, to consider what I will call an enterprise risk policy underlying and therefore providing the lineaments of the rule that emerges for the assignment of vicarious liability or not. We entirely accept the largeness of the issues that Justice Edelman has identified. We completely reject that this is a case in which that can be ventured upon.
If there is a public health case then, of course, it will be tangled up with, undoubtedly, direct liability and probably breach of statutory duty, and so it may be easy enough for me to imagine a case at the Bar table but quite difficult to see that only vicarious liability will make it through to this Court. It is for those reasons, in our submission, that those large matters of significant policy of the common law do not arise in this case and should not inform an outcome.
JAGOT J: Mr Walker, would your submissions be the same – leave aside direct liability. Say the misaimed urination was on the floor of the bathroom, the other person then comes in and slips and injures themselves.
MR WALKER: I was going to actually use a more savoury example of wet soap left on the floor.
JAGOT J: Well, I was getting it closer to the facts of this case, but that is not such a shocking thing that – wet soap, whatever it be. Your case on vicarious liability would be exactly the same.
MR WALKER: Absolutely.
JAGOT J: Yes.
MR WALKER: The very notion that – again, leaving aside direct liability, the rather bathetic spectacle of an employer being on notice that someone leaves wet soap on the floor – I mean, one cannot imagine, but leave aside that direct liability of an employer, all they know is that they are apparently an autonomous adult and they are going to be bunking down, as Justice Gageler puts it, with somebody in shared accommodation.
The notion that there is course of employment and sufficient connectedness to bring within it extended understanding of that with respect to careless use of a bar of soap or, for that matter, careless spilling of liquid soap, so that somebody slips and hits their head very dangerously is, in our submission, both intuitively and within the legal principles in question, outside the course of employment or, more to the point, is not shown by the plaintiff to be within the course of the employment even with the extensions that the principles show have to be considered.
GAGELER J: Mr Walker, if it were a case where the act was a sexual assault, the analysis would be exactly the same?
MR WALKER: Yes, just as it would be the same with poisoning; so, forcing some dangerous substance on somebody, be it an illicit drug or otherwise. And one can say in a case of people – all you know in this case, that Mr Schokman was superior to Mr Hewett. You know nothing else because it was thoroughly ploughed, but unsuccessfully from Mr Schokman’s point of view, other matters including our client’s knowledge and the need for precautions by our client in either selection of a roommate or anything else.
So, in terms of a vulnerability analysis, we say this. First, in principle, to use the language of the cases, that arises from other kinds of case – the housemaster, the children, et cetera. The vulnerability that my learned friend addressed on in the close of his address – the vulnerability is a vulnerability that is exactly similar for each of them, and that is not what is meant by putting someone in a position which provides an occasion rather than a mere opportunity in the cases that are dealt with; in particular, adults preying on children.
That is why the notion of having shared accommodation as part of the expected milieu of employment, to which one may resort out of hours for your private purposes and personal activities, and where you are going to sleep with, in the sense of in the same space as someone else, does not say anything concerning the vulnerability of one rather than the other. It does not say anything about who is going to go to sleep first, or whether their patterns of sleep are such that they will, by and large, be both unconscious of the same time; therefore, presumably, not vulnerable at all to each other.
None of that, in our submission, in a case of what might be called equals as roommates involves any sound legal policy in looking to what can be taken from cases of placing a person in a position of power over vulnerable persons. There are, of course, matters on work premises in relation to what might be called very mundane parts of everyday life, where it does not follow that, simply because negligence occurs in what might be called a workplace or related premises, whereby one co‑employee’s negligence caused harm to another – it does not follow that in every case, simply because it is at a workplace, that the employer will be vicariously liable; if it did, then there has been a lot of labour wasted in the cases.
And, if I can venture tentatively, some examples apropos the way in which my friend has put it – if in a crib room, a bunk room – so, unquestionably, part of what might be called workplace premises, where people are either directed or given the opportunity to have a meal during a break – it does not matter whether it is paid for or not by the employer. If, in such a space – and without any prior knowledge of this as being a form of conduct engaged in – some bad person – employee – seeing the plaintiff about to sit down, pulls the chair out from underneath and causes a terrible back injury, then the notion that that being in the course of employment really reduces down to, simply, during hours during which both persons were present at the same place, which itself has an evident connection with the workplace.
That, in our submission, does not answer any of the principled approaches that the judges can be shown in the decided cases to be reaching for. One would not have needed to go through the factual analysis in Bugge v Brown. It is simply suffice it to say that it happened during, as it were, work hours by reason of something that was expected to be done during work hours. There had to be the connection, particularly once the lack of authority for the particular motive carrying out the act was established.
In particular, with respect to matters such as sexual assault, then one will with, for vicarious liability, always have to start with the notion that the case before the Court, on such facts, does not involve direct liability. And there is lurking behind the position on what might be called the merits to urge reasonableness of an outcome by our learned friends, the idea that there really should have been single-room accommodation for those who wished it, presumably lockable against careless or malevolent co‑employees. That is a direct liability case that has nothing to do with a vicarious liability case.
We respectfully accept that, to use Justice Edelman’s expression, there is a kind of flipside relation, though it is probably not perfect, between the positive Canadian description of a sufficient connectedness and an Australia reversal of that, a la Sir Isaac Isaacs, so as to look for what is called the stranger quality of the employee with respect to the act in question, stranger to the employer . . . . . Sir Isaac Isaacs’ careful exposition, that is obviously not a phrase or approach that his Honour used with any particular feeling about onus. Because . . . . . the plaintiff onus to show a sufficient connection rather than a defendant employer’s onus to establish such remoteness, et cetera, et cetera.
So, why it is not probably a complete, perfectly good flipside, a defendant need only have a plaintiff just fail, that is, fail to show sufficient connectedness. It is not for a defendant to show such remoteness, et cetera, et cetera. Certainly, if the defendant does do so, which they will prudently attempt, no doubt, but without assuming an onus, then they will be the more assured of the happy outcome that the plaintiff will fail.
I should say that with respect to the way in which – the related matter that your Honour Justice Gordon raised with my friend, and going back to Sir John Salmond’s third possibility, which can be seen to be a very important source of the “so connected” notion, in our submission, the law has moved on from requiring the sufficiency of that connection to be seen through the prism of the capacity to regard what was done as an improper mode of doing an authorised act.
That will no doubt suffice in some cases, but may not be necessary, not least because one revolts at the notion of sexual crimes being ever seen as a mode of doing anything if the employment in question is to look after children. It cannot be seen as a mode. And yet, was the occasion provided? Well, yes, time and time again the courts have, with respect, properly held so, so as to render an employer liable.
So, paragraphs 42, 66 and 67 of the plurality approach in Prince Alfred College, in our submission, support the notion that the connection that has to be shown by the plaintiff has to be something which is still tied in the extended sense to course of employment. That is the importance of what we said in‑chief concerning paragraph 83, of course.
In relation to connection with employment, we would submit that if there is something that a decision in this case in our favour could add to an understanding of the way in which the law should be applied in cases where it might be sensible to look to the facts of this case, is to ensure that the phrase “connected with employment”, or “in the course of employment” continues to have a real connection with the duties or conduct required or envisaged by the employment.
Otherwise, if one simply looks at the abstract noun “employment”, which is a status or relation, you are in constant danger of simply finding that it is no coincidence that this was done by a co‑employee, it had to be a co‑employee to cause this particular injury, because that is what brought them to this place, and together in what might be called proximity, and that,
of course, is, we would submit, a paradigm example of a case which is a mere opportunity – and the courts to date have been at pains to say mere opportunity will not be enough.
Mere opportunity may turn out, if the law were to swerve considerably, to be quite beside the point if one had a full‑blooded, what I call a Posnerian enterprise risk approach to this, then who cares about opportunity being a mere opportunity. In fact, you would embrace the fact. You would say the opportunity for this to happen was because of the conduct, and one would add, with a nod to Chicago, with a view to profit of the enterprise. Now, in our submission, those are so far alien elements, even if they might be seen to be subterranean, some of the judicial writing about this.
We do not have those elements and for those reasons there ought to be a continued concern, having identified the act, the wrongful act of the wrongdoer, which is employed by the employee, which is said to have caused the plaintiff harm. One then asks whether that, assuming it be unauthorised, one then asks whether that has such a connection with the employment, meaning, with that which is called for by the employment by way of duties on behalf of the employee in the ordinary case, as to make the conduct, albeit unauthorised, one that ought to be regarded as being in the course of employment so as to render the employer vicariously liable.
The facts in this case, in our submission, very strongly provide negative answers to an approach framed in that fashion. As a matter of principle, in our submission, this Court can and should add the desirable care for explicit consideration as a relevant feature of what the duties of the role call for. That is why, in our submission, it is far too strained to be acceptable to see careful acts of urination as being called for by this relation of employment.
May it please the Court.
KIEFEL CJ: The Court reserves its decision in this matter and adjourns to 9.45 am tomorrow.
AT 1.05 PM THE MATTER WAS ADJOURNED
Key Legal Topics
Areas of Law
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Civil Procedure
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Employment Law
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Negligence & Tort
Legal Concepts
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Appeal
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Duty of Care
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Negligence
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Standing
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Vicarious Liability
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