In this article, we explore the case of Schokman v CCIG Investments Pty Ltd  QSC 120 and Schokman v CCIG Investments Pty Ltd  QCA 38 where the Court considered in detail the concept of vicarious liability.
What is vicarious liability in personal injury law?
Vicarious liability is where an employer may be held legally responsible for the actions of employees (and others) for harm caused in the workplace. The employer need not have specifically or directly caused the harm themselves.
In April 2021, the Supreme Court in Rockhampton considered a highly unusual workers' compensation claim. Mr Schokman, the plaintiff, was a 25 year old restaurant supervisor at Daydream Island Resort. A condition of his employment was to share accommodation at the resort with his co-worker and subordinate, Mr Hewett.
Mr Schokman had underlying conditions of narcolepsy (a sleep disorder) and cataplexy (a sudden and brief loss of voluntary muscle tone triggered by emotional stress) which was well controlled by medication prior to the incident.
In the early hours of 7 November 2016, Mr Schokman awoke choking due to Mr Hewett urinating on his face, and in his mouth. He immediately suffered an attack of cataplexy; as well as insomnia, post-traumatic stress disorder, anxiety and depression later arising from the incident.
In defending the claim, the employer submitted Mr Hewett was so intoxicated he did not know where he was when the urination event occurred Indeed, the Court determined the incident occurred because Mr Hewett was 'in a state of semi consciousness precipitated by his level of intoxication'.
Mr Schokman claimed his employer was negligent, breached the duty of care owed to him, and was vicariously liable for the conduct of its employee, Mr Hewett.
Supreme Court determines employer did not breach its duty of care
The Supreme Court accepted Mr Schokman sustained injury and that Mr Hewett committed a serious assault on Mr Schokman.
However, the Court rejected that the employer was vicariously liable for the conduct of a drunk employee because the incident did not occur in the course of employment. The Court held the risk that Mr Schokman would have a confrontation with a co-worker or roommate was foreseeable however, the urination event was not foreseeable for the employer to prevent or respond to the risk.
The Court determined there was no history of Mr Hewett becoming intoxicated or having an intoxication-related incident that would put the employer on notice that Mr Hewett may have engaged in bizarre conduct like the urination event.
Mr Schokman appealed the decision of the Supreme Court, to the Queensland Court of Appeal.
Court of Appeal found employer was vicariously liable
In March 2022, the Queensland Court of Appeal overturned the decision at first instance, finding in favour of Mr Schokman. The Court of Appeal determined that:
- It was a term of Mr Schokman's and Mr Hewett's employment that they reside in the staff accommodation on the island and a room be assigned to them to share;
- Whilst Mr Schokman and Mr Hewett remained employed at the resort, they were required to live there and once they ceased employment, they were required to leave;
- Mr Hewett was not occupying the room as a stranger to Mr Schokman, but instead as a co-worker and an employee pursuant to his employment contract;
- The terms of Mr Hewett's employment required him to take reasonable care so that his acts did not adversely affect the health and safety of other persons.
The Court of Appeal found Mr Hewett's conduct was not an act 'entirely outside the relation of master and servant and therefore regarded as the act of a stranger', and that there was sufficient connection between Mr Hewett's employment and the event due to the provision of shared accommodation by the employer.
The Court of Appeal accepted Mr Schokman's argument that the employer was vicariously liable for the wrongful conduct of its intoxicated employee.
Appeal to the High Court
On 16 September 2022, the High Court of Australia heard the employer's application for special leave to appeal the Queensland Court of Appeal's decision.
The employer submitted that - acts in which an employer can be held vicariously liable must bear a sensible relation to the activities for which the employee is employed to do within the scope of employment.
Mr Schokman's representatives submitted that as a requirement of practicality of employment, the provision of shared accommodation was a contractual requisite provided by the employer. Therefore, matters incidental to employment, such as cooking a meal, or maintaining personal hygiene, are connected to employment.
The general obligation to take reasonable care that the employees' acts did not adversely affect the health and safety of other persons whilst on the island was an obligation which governed the occupation of the shared accommodation.
The High Court granted the application for special leave.
Get help from a worker's compensation lawyer
Hall Payne Lawyers welcomes the High Court's consideration of the issue of vicarious liability in the context this case.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.