Bird v DP, Vicarious Liability and the Impact for Volunteer Organisations

“If a teacher employed by a school authority sexually abuses a pupil, is the school authority liable in damages to the pupil? No one suggests that the answer is “No, never”.  In Australia, at least until recently, an answer “Yes, always” would also have been surprising”¹.

That is how Gleeson CJ opened his judgment on 3 ‘abuse appeals’ heard together by the High Court in 2003. In this note, I examine the recent decision of the Victorian Court of Appeal in Bird v DP² (DP) and whether Australian law does now answer the question of whether school authorities, churches and not-for-profit groups are liable for criminal abuse perpetrated by their employees and volunteer representatives: “Yes, always“.

What did DP decide?

DP is the latest in a long line of Australian cases looking at the potential liability of schools, churches and not-for-profit organisations for the criminal abuse of minors.

At trial in the DP litigation, the Diocese of Ballarat was found vicariously liable for historic acts of criminal abuse perpetrated by an assistant priest in circumstances where the Diocese itself was not found negligent. In a clearly written unanimous decision, the Victorian Court of Appeal rejected the Diocese’s appeal.

The DP judgment is important from a legal perspective in two ways. Specifically, DP is clear appellate authority that:

1. Vicarious liability for criminal abuse can be found outside of an employee/employer relationship in circumstances where the perpetrator is an “emanation of the principal”³.
2. Where the perpetrator is an “emanation of the principal” such that vicarious liability can arise at law, the principal’s vicarious liability will extend to torts (including intentional torts) committed by the perpetrator where the relationship between the principal, perpetrator and victim is such that the principal has effectively presented the perpetrator with the “opportunity and the occasion for the commission of the tortious conduct“⁴.

DP presents a unanimous appeal judgment, with a clear ratio setting out how similar cases should be decided. It presents an important potential vehicle for the High Court to unequivocally define the scope of the relevant law – by either affirming the above two-step approach to liability or clearly applying an alternative.

Vicarious liability

It is fair to say that Australian Courts have struggled with the legal theory around ‘abuse cases’. In the Lepore litigation⁵, the seven High Court Judges gave 6 separate judgments, with competing theories of liability: non-delegable duty of care and vicarious liability.

In the years since the Lepore litigation, Australian law has focussed on vicarious liability as the appropriate jurisprudential doctrine. The trial and appellate decisions in the DP litigation continue down this ‘vicarious liability path’.  Whilst in legal theory this is not “yes, always” to liability, in practice, the decisions show an increasingly expanding pathway to the liability of principals.

Vicarious liability for a perpetrator who is not an employee

Many of the Australian cases on vicarious liability have concerned employee/employer relationships. DP is the first clear Australian appellate Court authority finding vicarious liability for criminal abuse in the absence of an employee/employer relationship between the perpetrator and the principal.

Six weeks before Forrest J gave the trial judgment in the DP litigation, another Victorian Supreme Court Judge (O’Meara J) held, after considering the current Australian legal authorities, that⁶ “the presence of a relationship of employer and employee is a necessary intermediate step or foundation [to establishment of vicarious liability of a principal] …vicarious liability for the criminal acts of another [cannot be] imposed, merely by searching for what might in general terms be described as being a ‘special role’ to be discerned by reference to a multifactorial analysis untethered to any distinct, assigned or formal relationship between the parties“⁷. Forrest J at trial in DP considered the reasoning in this case, but rejected the notion that the presence of a relationship of employer and employee is a necessary precondition to vicarious liability. Forrest J’s reasoning was followed by another Victorian Supreme Court Judge (Keogh J) 3 months later⁸. Keogh J sought to differentiate the first case on the basis that it concerned a volunteer within a school who was never held out as a representative of the school⁹ – to use the language from DP: the volunteer was not an “emanation” of the school. It was into this ‘inferno’ that the Victorian Court of Appeal stepped when it heard the appeal in DP.

To understand the Court of Appeal’s reasoning in DP, it is necessary to look at two earlier decisions.

• ABCD v Bird¹⁰ (ABCD) – a 2020 NSW trial decision. The trial judgment was considered in the three Victorian cases referred to above, specifically Schmidt AJ’s observation that even if the perpetrator had not been found to be an employee, in the circumstances, Her Honour would still have found the childcare centre principal vicariously liable for the consequences of the perpetrator’s criminal abuse, “applying the test in Prince Alfred College Incorporated v ADC“¹¹ (Prince Alfred College). The ABCD case was legally complex and on appeal, the NSW Court of Appeal did not deal in any detail with whether Australian law would find a principal vicariously liable outside of the “well-established [employee/employer] basis”. However, it was Schmidt AJ’s observation that vicarious liability can exist at law in the absence of an employer/employee relationship which the trial and appellate Courts picked up and applied in the DP litigation. In DP, the Court of Appeal then looked to a 1931 High Court decision to find a jurisprudential basis for its reasoning¹² that vicarious liability can exist outside an employee/employer relationship when the perpetrator is an “emanation” of the principal.
• Prince Alfred College – a 2016 High Court decision which looked at the vicarious liability of a boarding school for the criminal abuse of an employed boarding master. The Court held 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“¹³. This reasoning provided the foundation for the Court of Appeal’s ‘second step’ in DP: that is, that the relevant relationship between the principal and the perpetrator must provide the “opportunity [and] occasion” for the commission of the wrongdoing. The Court in Prince Alfred College did not give examples of what would constitute providing “occasion” and Gaudron and Gageler JJ observed that “the Court cannot and does not mark out the exact boundaries of any principle of vicarious liability in this case.¹⁴ ” However, the decision does create a jurisprudential basis for the second step in the reasoning in DP.

The 2-step test in DP

With that antecedence, we now have a well-reasoned unanimous appellate judgment in DP which provides a 2-step test for vicarious liability:

1. Is the perpetrator an “emanation of the principal“¹⁵? That is – a representative by which and through which the principal acts. In DP, this test was satisfied by an assistance priest who ‘wore the collar’ and attended to pastoral duties in the community.
2. Has the principal given the perpetrator a role vis-à-vis the victim such that the principal has effectively presented the perpetrator with the “opportunity and the occasion for the commission of the tortious conduct“¹⁶? Again, in DP, this was satisfied by the Diocese placing the assistant priest perpetrator in a role where he would be welcomed and trusted by victims and their families.

In many situations, the same facts will be determinative of both questions under this 2-step test. However, the Court was clear that both ‘tests’ must be satisfied as a precondition to vicarious liability.

What does this mean for volunteer and similar organisations

The decision in DP does not mean that the answer to the question at the start of this note is “yes, always”. However, the decision and the trial and appellate Courts’ reasoning in DP show that Australian law is a long way from “no, never”. In this regard, the law is in step with society’s expectations as enunciated in the recent Royal Commission¹⁷.

Australian law has been clear for some years that an employee/employer relationship can exist where a position is unpaid and that employers can be vicariously liable for the torts of their employees. DP adds an additional ‘layer’ of potential civil liability where there is no employee/employer relationship. Viewed in this way, it is not radical law.

As a matter of practical reality, in many cases, volunteer organisations will necessarily set up their volunteers as “emanations” of the organisation and will place them in positions where they have “opportunity and occasion” to commit wrongful acts. Working with children checks, rules against being alone with children and other vulnerable clients/care recipients have clear roles to play in both minimising the risk of criminal abuse occurring and minimising the related legal risks under the 2-step test in DP.

The decided cases show that with the best intention at organisational level, harm can occur, and organisations can have civil liability in situations of criminal abuse. It is critical that volunteer and similar organisations actively consider holding current and effective insurance for their potential vicarious liability for criminal abuses by volunteers and other non-employees. As it now stands, Australian law will not provide an absolute, unequivocal defence against liability for the consequences of criminal abuse simply because the perpetrator is not your employee.

This article was written by Andrew Gray, Partner.

¹NSW v Lepore; Rich v State of Qld; Samin v State of Qld [2003] HC 4 at [1]
²[2023] VSCA 66
³DP at, particularly, [104] and [109]
⁴This is how the question was put on appeal in DP – see the judgment at [58], with the crux of the Court’s reasoning at [153]-[164].
⁵Per endnote ‘i’
⁶PCB v Geelong College [2021] VSC 633
⁷Ibid at [303]
⁸O’Connor v Comensoli [2022] VSC 313
⁹Ibid at [334]
¹⁰Plaintiff A and B v Bird; Plaintiff C v Bird; Plaintiff D v Bird [2020] NSWSC 1379 (9 October 2020). On appeal: Clancy v Plaintiffs A, B, C and D; Bird v Plaintiffs A, B, C and D [2022] NSWCA 119
¹¹[2016] HCA 37.
¹²Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Cooperative Assurance Company of Australia Ltd [1931] HCA 53 – where the High Court found an insurance company vicariously liable for defamatory statements made by an insurance agent, notwithstanding that the agent was not an employee.
¹³Prince Alfred College at [81]
¹⁴Ibid at [131]
¹⁵DP at, particularly, [104] and [109]
¹⁶This is how the question was put on appeal in DP – see the judgment at [58], with the crux of the Court’s reasoning at [153]-[164]
¹⁷The Royal Commission into Institutional Responses to Child Sexual Abuse