The widening scope of vicarious liability in sexual abuse claims and beyond
Trigger warning: This article contains details about sexual abuse of children which may be upsetting for some readers. Reader discretion is advised.
The NSW Supreme Court found that a company operating a childcare centre was vicariously liable for injuries suffered by two children and their mothers following historical sexual abuse committed by a non-paid worker at the childcare centre.
Whether a company operating a childcare centre and its 99% shareholder/sole director were vicariously liable for injuries suffered by two children who attended the centre together with their mothers following acts of historical sexual abuse committed by a non-paid worker.
Little Pigeon Pty Ltd (Little Pigeon) owned the Footprints childcare centre which B and D (the pseudonyms for the plaintiffs) attended between 2008 and late 2010. Ms Clancy was the 99% shareholder and sole director of Little Pigeon. Mr Bird was Ms Clancy’s father, a 1% shareholder in Little Pigeon, and undertook an extensive amount of unpaid work at the centre.
Mr Bird was charged in 2010 with sexual offences involving B and another child (although not D), and both B and D made disclosures about Mr Bird. After he was charged, Mr Bird gave a recorded police interview in which he made numerous admissions about touching children at the centre which included kissing; massaging on the neck, shoulders and back; touching them on the skin under their clothes and inadvertent genital contact. Ultimately, no charges were pursued against Mr Bird.
B and D claimed that Mr Bird was liable for assault in respect to a number of sexual acts committed against them. B and D also claimed that Little Pigeon and Ms Clancy were both vicariously liable for Mr Bird’s assaults on them as well as being liable (in their own right) in negligence.
A and C (B and D’s mothers respectively) claimed that Little Pigeon and Ms Clancy were liable in negligence for causing them mental harm (post-traumatic stress disorder and chronic adjustment disorder) as well as breach of contract on account of the failure to ensure their children were safe while under the centre’s control and supervision.
The NSW Supreme Court (Schmidt AJ) found in the plaintiffs’ favour in respect of all causes of action. Damages totalled $2,427,263, apportioned between the plaintiffs.
A large part of the judgment concerned the court’s reasons for its finding that the alleged assaults in fact occurred. This finding turned on the admissibility of certain admissions made by Mr Bird together with evidence led by the plaintiffs to establish that Mr Bird had a tendency for inappropriate sexual conduct with children in his care.
One of the key issues in dispute was whether Little Pigeon and Ms Clancy were vicariously liable for the assaults committed by Mr Bird. The court answered this question in the plaintiffs’ favour for the following reasons.
Firstly, the court found that Mr Bird was an employee of Little Pigeon and therefore the general rule applied, being that an employer is vicariously liable for the tortious acts of its employee (Hollis v Vabu Pty Ltd (2001) 207 CLR 21). While Mr Bird was not paid for his work, the court was influenced by the following factors:
- Mr Bird was extensively integrated into Little Pigeon’s business, working at the centre for over 12 hours a day Monday to Friday as well as maintenance work on the weekend
- Mr Bird performed a variety of activities, some of which were required to be performed by an employee under the Children and Young Persons (Care and Protection) Act 1998 (NSW) and Children Services Regulation 2004 (NSW)
- the type of work Mr Bird performed in relation to the children was the type of work which others were also employed to perform
- Little Pigeon and Ms Clancy were able to control Mr Bird’s work and Mr Bird was presented to parents, children and other staff as an emanation of Little Pigeon, wearing the same uniform as the other employees and attending some staff meetings
- the supervision of Mr Bird was no different to other employees even though the Children Services Regulation 2004 (NSW) required volunteers to be accompanied
- Little Pigeon had a considerable ability to control Mr Bird’s activities and given the vulnerable children for whom Little Pigeon worked for, vicarious liability would serve an important deterrent effect.
Secondly, even if Mr Bird was not an employee of Little Pigeon, vicarious liability was established pursuant to the principles in Prince Alfred College Incorporated v ADC (2016) 258 CLR 134 and a line of English authorities that supported vicarious liability going beyond the strict relationship of employment when new situations require it; even extending to unpaid volunteers in some situations. The court was persuaded that Mr Bird carried on activities at the centre as an integral part of Little Pigeon for its benefit (rather than for his own benefit) and as a result, vicarious liability ought to apply.
Finally, the court found that Mr Bird’s actions were committed in the course of his employment given that the role he was assigned by Little Pigeon provided him unsupervised close contact with children, which in turn allowed him to achieve intimacy with his young victims. Pursuant to Prince Alfred College, vicarious liability will apply where the employment provides the opportunity and occasion for the relevant acts.
Implications for you
The court’s decision demonstrates the increasingly wide breadth of vicarious liability, particularly in cases such as sexual abuse where a strong public policy influences a departure from the traditional categories of relationship attracting vicarious liability.
The court’s decision reinforces the potential for an unpaid worker or even a volunteer to be classed as an employee in circumstances where the worker effectively exercises the same functions as other paid workers.
The expanding ambit of vicarious liability has been anticipated, given the developments in the area in other Commonwealth jurisdictions, notably England and Wales. However so far as insurers are concerned, it means an increased risk profile for a number of different insureds, particularly in relation to sexual abuse claims.