Update: abuse committed by employees of an organisation

In the recent case of Prince Alfred College Incorporated v ADC [2016] HCA 37, the High Court has confirmed that Australian employers can be held vicariously liable for acts of child sexual abuse committed by their employees.

Vicarious liability is the legal term used to describe when a third party can be held legally responsible for the acts or omissions of another person over whom they exercise control, such as an employer over an employee.

The decision will benefit many survivors of child abuse who might be thinking about whether to bring a compensation claim for the harm they have suffered..

Background

In 1962, the claimant (‘ADC’) was a 12 year old boarder at a school called the Prince Alfred College Inc (‘the school’). Dean Bain was employed by the school as a housemaster. Bain sexually abused ADC at night while settling him down in the dormitory. He also abused ADC at his private home located away from school premises. Prior to these occasions, Bain had been convicted of gross indecency and suspected of abusing students at a previous school.

In 2007, the housemaster was convicted of offences against ADC and two other boarders.

In December 2008, ADC sued the school in the Supreme Court of South Australia. He said the school was responsible for the abuse for three reasons. Firstly, it breached its non-delegable duty of care, which is a type of legal duty schools usually owe to its students. Secondly, it was negligent and breached its duty of care. And thirdly, even if the school was not itself at fault, it was vicariously liable for the wrongful acts of its employee. ADC also asked for an extension of time to sue under the Limitation of Actions Act 1936 (SA), as he sued the school outside the time period allowed by the law.

The judge in the Supreme Court dismissed ADC’s claims on the basis that the available evidence did not establish that the school was responsible for the abuse. She also decided that an extension of time should need by given.

ADC appealed this decision to the Full Court of the South Australian Supreme Court. The Full Court allowed the appeal. It found that the school was vicariously liable for Bain’s actions. It also held that an extension of time should be granted. Only Gary J actually found the school in breach of the duty of care it owed to ADC.

The school then appealed this decision to the High Court.

The High Court’s decision

The High Court unanimously allowed the school’s appeal in two judgments. The majority of the Justices of the High Court allowed the appeal on the basis that ADC should not have been given an extension of time.

The majority of the Justices considered whether the school could be held vicariously liable for Bain’s actions, as this was considered critical to whether a fair hearing could take place and therefore whether an extension of time should be granted.

Negligence

ADC argued that the school should have been found responsible for the abuse because of its negligence, as decided by Gray J. However, the majority found that Gray J’s decision was not based on any evidence and was purely speculative.

ADC also argued that the case of New South Wales v Lepore (2003) 212 CLR 511 was wrongly decided, insofar as it held that a school’s non-delegable duty of care does not extend to the protecting its students from the criminal acts of an employee. On this point, the majority found that ADC’s arguments did not address the issues required to invoke the High Court’s authority to reconsider Lepore; instead, the arguments merely addressed arguments which were rejected by the High Court in Lepore.

The Majority did not therefore consider these bases of liability further.

Vicarious liability

The majority reviewed past cases dealing with vicarious liability and child sexual abuse in the United Kingdom, Australia and Canada, including its decision in Lepore. However, it did not examine any child sexual abuse cases after 2005.

The majority then set out the “relevant approach” to take in cases such as ADC’s. Their Honours said (at [80]-[81]) that the relevant approach is to consider any special role that the employer has assigned to the employee and the position in which the employee is thereby placed vis-à-vis the victim. In determining whether the apparent performance of such a role may be said to give the “occasion” for the wrongful act, particular features may be taken into account. They include authority, power, trust, control and the ability to achieve intimacy with the victim.

As relevant to Bain’s employment in this case, their Honours noted (at [84]):

In the present case, the appropriate enquiry is whether Bain’s role as housemaster placed him in a position of power and intimacy vis-à-vis the respondent, such that Bain’s apparent performance of his role as housemaster gave the occasion for the wrongful acts, and that because he misused or took advantage of his position, the wrongful acts could be regarded as having been committed in the course or scope of his employment. The relevant approach requires a careful examination of the role that the PAC actually assigned to housemasters and the position in which Bain was thereby placed vis-à-vis the respondent and the other children.

The High Court found that evidence relating to Bain’s role at the school was critical. Since much of that evidence had been lost with the passage of time, a real question was raised as to whether the school could be given a fair hearing on whether they could be held responsible. In these circumstances, it held that an extension of time should not be given to ADC.

Reflections

One important theme that emerges in the majority’s reasoning is consideration of the concept of authority and what the employee’s position conveys to the victim. This is no doubt draw to some extent from Christine Beuermann’s article, which many Justices referred to in the transcript of proceedings.

French CJ certainly made this point (at [1160] of the transcript) about the importance of the child’s perspective when looking at the employee’s authority. The point is noted again by the majority in its decision (at [56]) where they commented:

In Lloyd v Grace, Smith & Co the position of the clerk, from the client’s perspective, was indistinguishable from that of a partner of the firm. Because of what the clerk’s position conveyed to the client, the clerk was able to secure the client’s trust and confidence so that she unhesitatingly complied with his requests with respect to the deeds and the documents.

They make similar comments at [50]. This might be seen as a step toward acknowledging the reality of the incidence of child sexual abuse. For a child is not to know the limits of an employee’s authority. In fact, it is that very authority that often enables an employee to push and redefine the limits of their authority over a child.

The impact of this decision on the inherent power of Courts and recently removed time limitation periods for civil claims involving child sexual abuse will also need to be considered.

Unfortunately, this case did not consider the potential application of vicarious liability to employment-like relationships, such as volunteers and ministers of religion.