It Wasn’t Me!

If one of your employees engage in unlawful conduct, is your business liable for those actions? An employer’s liability for an employee’s actions is referred to as ‘vicarious liability’. However, whether this also applies to independent contractor relationships has been uncertain.

The High Court case, Bird v DP [2024], has provided us with more answers, establishing a strict criterion to be considered when determining whether a business is liable for their worker’s unlawful actions.

The court rejected the notion of expanding the principle of vicarious liability to extend beyond this employment relationship; such as to extend to the acts of independent contractors. Ultimately, the Court quashed this suggestion and highlighted that vicarious liability is concerned with attribution of liability, not fault, and therefore it is wrong to infer risk or fault. As such, the Court held that a Diocese is not vicariously liable for the wrongful actions of its priests due to the absence of an employment relationship.

 Key Facts

The respondent (DP) commenced proceedings in the Supreme Court of Victoria against the Catholic Diocese of Ballarat (‘Diocese’), alleging he was assaulted and sexually abused in 1971. The DP claimed that the Diocese should be considered vicariously liable for the assaults committed by the assistant priest, Father Bryan Coffey (Coffey), arguing that they were not exercising reasonable care to control and supervise Coffey and are therefore liable for negligence. The respondent sought to claim damages for the psychological injuries that were sustained as a result of this abuse and assault inflicted by Coffey. With this context, two key questions arose-

1. Can an employer be vicariously liable for an employee’s conduct?
2. Does the doctrine of vicarious liability extend to include negligence?

Ultimately, the Victorian Supreme Court ruled that the Diocese was vicariously liable for the priest’s abuse of DP, despite the absence of a typical employee/employer adjacent relationship between a Diocese and parish priests. DP’s negligence claim was unsuccessful as there was not enough sufficient evidence to support that in 1971 the Diocese knew or should have known that Coffey was posing a risk of harm.

What is Vicarious Liability?

The doctrine of vicarious liability refers to an employer being held legally responsible for the wrongful actions of their employees. In this case, the High Court reaffirmed the clear limitations on the use of agency and secondary liability based on attribution of liability. In Australia, an employer is vicariously liable for the wrongful acts of its employees if those acts are committed in the course of the scope of the employment or are closely tied with the employee’s duties.

In the Court’s decision, the judges examined three ways the Diocese could be held liable for the priest’s conduct.

1. Firstly, it must be considered whether the subject is an employee or an agent of a person or organisation. If the priest was considered to have had their actions ‘authorised’ by the Dioceses, the actions could fall under an agency relationship. However, as there was no evidence that the Diocese had authorised these assaults, these actions could not be attributed to an agency relationship. Therefore, the Diocese could not be held liable under this agency relationship.
2. Secondly, liability can be found where a person or organisation has breached a non-delegable duty; that is, a duty to ensure that reasonable care is taken, or to ensure that the duty is carried out. This legal responsibility remains with the employer, and if not met, the employer is directly liable. In the case of Bird v DP, the Court found that there were insufficient grounds to conclude the Diocese had taken on a special responsibility/duty to ensure that reasonable care was taken for the safety of a parishioner’s child.
3. Finally, as forementioned, attributing liability can stem from vicarious liability. The majority of the High Court in this case asserted that an employment relationship is a fundamental factor to find vicarious liability. Provided that the Diocese did not employ the priest, vicarious liability did not arise.

 Clergy and employment-based rights

Clergy are generally not employees at common law. The Court accepted that, despite:

• appointment by the church;
• performance of defined duties;
• being integrated into the organisation’s functions;

a priest appointed under canon law does not have an employment relationship with the Diocese. This reinforces the long‑standing position that clergy occupy a sui generis, ecclesiastical office, rather than a contractual employment relationship.

Although the ruling in AA v. The Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle [2026] established that priests and clergy are treated as employees. This only applies for historical abuse claims where the employer may be found to be vicariously liable.

The Court still rejected the argument that the relationship could be treated as:

• “akin to employment”, or
• sufficiently analogous to justify applying employment‑based doctrines.

Instead, it held that extending employment concepts beyond actual employment would create uncertainty and is a matter for Parliament, not the courts.

Key impact on the employer / employee relationship

This landmark decision asserts that:

• Clergy, even when closely controlled and integral to a religious organisation, are not employees unless a true contract of employment exists, and the courts will not extend employment‑based doctrines to cover them in respect of employment law disputes.
• A person or organisation can be attributable to being vicariously liable for the wrongful acts of someone working in their business or organisation if that person is an employee; and their acts are committed in the course or scope of the employment.