CCIG Investments Pty Ltd v Schokman [2023] HCA 21

HIGH COURT OF AUSTRALIA

KIEFEL CJ,

GAGELER, GORDON, EDELMAN, STEWARD, GLEESON AND JAGOT JJ

CCIG INVESTMENTS PTY LTD APPELLANT

AND

AARON SHANE SCHOKMAN RESPONDENT

CCIG Investments Pty Ltd v Schokman

[2023] HCA 21

Date of Hearing: 9 March 2023

Date of Judgment: 2 August 2023

B43/2022

ORDER

1. Appeal allowed with costs.

2. The orders of the Court of Appeal of the Supreme Court of Queensland made on 18 March 2022 and 5 April 2022 be set aside and, in lieu thereof, order that the appeal to that Court be dismissed with costs.

On appeal from the Supreme Court of Queensland

Representation

B W Walker SC with J O McClymont for the appellant (instructed by Cooper Grace Ward Lawyers)

G W Diehm KC with R J Lynch and J P D Trost for the respondent (instructed by Shine Lawyers)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

CCIG Investments Pty Ltd v Schokman

Torts – Negligence – Vicarious liability – Where appellant employer of respondent – Where appellant required respondent to live in shared accommodation with another employee under terms of employment contract – Where other employee negligently urinated on respondent while he was sleeping causing cataplectic attack – Whether other employee's wrongful act in course or scope of employment – Whether appellant vicariously liable for negligent act of other employee.

Words and phrases – "agency", "course or scope of employment", "employee", "employer", "frolic", "modes of doing authorised acts", "negligent act", "non-delegable duty", "occasion", "opportunity", "sufficiently or closely connected", "sufficiently strong connection", "tort", "unauthorised act", "vicarious liability", "wrongful act".

1. KIEFEL CJ, GAGELER, GORDON AND JAGOT JJ. In late 2016 the respondent, Mr Schokman, commenced employment with the appellant at Daydream Island Resort and Spa as a food and beverage supervisor. The island is part of the Whitsunday Islands, which are situated off the coast of Queensland. His employment contract contained a clause which stated "[a]s your position requires you to live on the island, furnished shared accommodation located at Daydream Island Resort and Spa will be made available to you while you are engaged in this position at a cost of $70 per week". 2. The contract also referred to a tenancy agreement and a number of other documents, such as an employee handbook, policies, practices and procedures, and Staff Village Regulations. Other than the contract itself, none of these documents were put into evidence, although the trial judge, Crow J, accepted that they had existed. It would seem that many documents were lost as a result of a cyclone which later affected the island. 3. Initially Mr Schokman was provided with a room to himself, but shortly thereafter a new worker, Mr Hewett, moved in and shared the accommodation with Mr Schokman. Mr Hewett's contract of employment was not in evidence. The case was conducted on the basis that Mr Hewett's contract of employment, so far as it related to accommodation, was in the same terms as Mr Schokman's contract. Both men worked at a restaurant within the resort. Mr Schokman held the superior position as supervisor; Mr Hewett was a team leader. 4. In the late evening of 6 November 2016, Mr Schokman spent some time at the staff bar. Mr Hewett came to the bar after finishing work at the restaurant. Mr Schokman observed Mr Hewett have a few drinks, but Mr Hewett did not seem overly intoxicated. Mr Schokman left the bar at approximately 1:00 am and returned to his room. Mr Hewett followed shortly afterwards. Mr Hewett was visibly upset and began complaining about his work environment and told Mr Schokman that he had issues with the management team. Mr Schokman said that he did not wish to discuss work issues at home and that they could talk about them at work the following day. Mr Hewett said that he would let Mr Schokman get some sleep and he left the unit, taking some drinks with him. 5. Mr Hewett returned at about 3:00 am. Mr Schokman heard him vomiting in the bathroom and then walking around whilst hiccupping. Mr Schokman went back to sleep. He was woken about 30 minutes later in a distressed condition and unable to breathe. Mr Hewett was standing over Mr Schokman's bed with his shorts pulled down and his penis exposed. He was urinating on Mr Schokman, who was inhaling the urine and choking. Mr Schokman yelled at Mr Hewett, who continued urinating on him for a short period of time and then stepped away. Mr Hewett went into the bathroom, and then came out and apologised to Mr Schokman. When Mr Schokman attempted to leave the room, Mr Hewett stood in front of him and apologised again. 6. Mr Schokman suffered a cataplectic attack as a result of the incident. The trial judge described such an attack as a sudden and ordinarily brief loss of voluntary muscle tone which is triggered by emotional stress. A medical expert explained that cataplexy is a condition most commonly associated with narcolepsy. Mr Schokman had a history of these conditions, but prior to the incident had been functioning well with the assistance of medication. 7. The trial judge accepted that, at the time of the incident, Mr Hewett was in a state of semi‑consciousness which was precipitated by his level of intoxication. The likelihood was that Mr Hewett intended to urinate into the toilet but, due to his state of intoxication and the late hour, he urinated on Mr Schokman by mistake. His Honour considered that the evidence was insufficient for a finding that the act of Mr Hewett was committed intentionally. 8. Mr Schokman brought proceedings against the appellant. He claimed damages on two alternative bases. In the first place, he claimed damages based on a breach of the appellant's duty of care owed to him as an employee. The alternative claim was that the appellant was vicariously liable as employer for the negligent act of its employee, Mr Hewett. Both claims failed. 9. The claim for vicarious liability was the subject of an appeal to the Court of Appeal, and is the subject of this appeal. In some respects, however, the argument for Mr Schokman reflects a case of a duty of care owed by his employer to him. This may be seen especially in its focus on the position in which Mr Schokman was placed by the employment, rather than attention being directed to the position of Mr Hewett, and the connection between Mr Hewett's employment and his tortious act as relevant to vicarious liability.