Sprod bnf v Public Relations Oriented Security Pty Limited [2007] NSWCA 319 (9 November 2007)

Last Updated: 12 November 2007

NEW SOUTH WALES COURT OF APPEAL

CITATION: Sprod bnf v Public Relations Oriented Security Pty Limited [2007] NSWCA 319
This decision has been amended. Please see the end of the judgment for a list of the amendments.

FILE NUMBER(S):
40297/06

HEARING DATE(S): 30/10/07

JUDGMENT DATE: 9 November 2007

PARTIES:
Gregory Sprod by his next friend Jennifer Sprod (Appellant)
Public Relations Oriented Security Pty Limited (Respondent)

JUDGMENT OF: Ipp JA Tobias JA Hislop J

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 20455/02

LOWER COURT JUDICIAL OFFICER: Cooper AJ

LOWER COURT DATE OF DECISION: 01/11/05

LOWER COURT MEDIUM NEUTRAL CITATION:
[2005] NSWSC 1074

COUNSEL:
D Campbell SC/A Hourigan (Appellant)
G Watson SC (Respondent)

SOLICITORS:
Beston Macken McManis (Appellant)
Shearman Lawyers (Respondent)

CATCHWORDS:
TORTS – negligence – vicarious liability – owner of club – security guards employed by respondent club owner assaulted the appellant in a laneway – unauthorised acts of assault – proximity to authorised acts – whether the unauthorised acts of the security guards were so closely connected with acts which, by virtue of their employment, they were authorised to carry out, or whether they were mere independent acts motivated primarily by personal animosity and vindictiveness, such that they were to be regarded as improper modes of discharging their duties as security guards – interests of employer – whether the unauthorised acts were done in the supposed furtherance of the respondent’s interests. D

LEGISLATION CITED:
Suitors’ Fund Act 1951 (NSW)

CASES CITED:
Bazley v Curry 1999 Can LII 692 (SCC); [1999] 2 SCR 534
Bugge v Brown [1919] HCA 5; (1919) 26 CLR 110
Canadian Pacific Railway Company v Lockhart [1942] AC 591
Deatons Pty Limited v Flew [1949] HCA 60; (1949) 79 CLR 370
Dyer v Munday [1895] 1 QB 742
Flew v Deatons Pty Limited (1949) 49 SR (NSW) 219; 66 WN (NSW) 98
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Hollis v Vabu Pty Limited [2001] HCA 44; (2001) 207 CLR 21
Sandstone DMC Pty Limited v Trajkovski [2006] NSWCA 205
Sprod v Public Relations Oriented Security Pty Ltd [2005] NSWSC 1074
Starks v RSM Security Pty Limited [2004] NSWCA 297; (2004) Aust Torts Reports 81-768
State of New South Wales v Lepore [2003] HCA 4; (2003) 212 CLR 511
Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531
Zorom Enterprises Pty Limited v Zabow [2007] NSWCA 106

DECISION:
(1) The Appeal is upheld. (2) The judgment of Cooper AJ is set aside. (3) The matter is remitted to the Supreme Court for resolution of the outstanding issues. (4) The respondent is to pay the appellant's costs of the trial and the appeal. (5) The respondent is to have a certificate under the Suitors' Fund Act 1951 (NSW) if otherwise qualified.


JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40297/06

SC 20455/02

IPP JA

TOBIAS JA

HISLOP J

Friday 9 November 2007

GREGORY SPROD by his next friend JENNIFER SPROD v PUBLIC RELATIONS ORIENTED SECURITY PTY LIMITED

Judgment

1 IPP JA: In recent times there have been several cases where a patron of a club, hotel or similar establishment is assaulted by security guards or bouncers and seeks to hold the security firm that employed the bouncers vicariously responsible for his injury. This is another such case.

2 In Zorom Enterprises Pty Limited v Zabow [2007] NSWCA 106, Basten JA said (at [21]):

“The underlying principle is not in doubt: an employer will be liable for the act of its employee ‘only if the act is shown to come within the scope of the servant’s authority either as being an act which he was employed actually to perform or as being an act which was incidental to his employment’: Deatons Pty Limited v Flew [1949] HCA 60; (1949) 79 CLR 370 at 378 (Latham CJ). However, the precise application of that principle, so stated, can give rise to difficulties.”

This case exemplifies the difficulties.

3 The unchallenged findings by the trial judge, Cooper AJ (see Sprod v Public Relations Oriented Security Pty Ltd [2005] NSWSC 1074), are that, shortly before about 1.30 am on Saturday, 22 December 2001, two security guards, employed by the respondent, assaulted the appellant. The guards were Gerald Hoskins, a supervisor employed by the respondent, and one Freddy Loau. While the assault was being committed two other security guards employed by the respondent stood watch.

4 At about 1.30 am that morning, the appellant was found lying unconscious with his head in a pool of blood in a dark private lane. The judge found that the appellant’s injuries were consistent with having been brutally assaulted around the head. The appellant was hospitalised for almost four months and was left with permanent brain damage.

5 Cooper AJ found that the security guards were not acting in the course of their employment when they assaulted the appellant. He found that the act of assault was “independent” of the employment and the respondent was not vicariously liable for what had occurred. The appellant appeals against this finding.

6 There is little dispute about the primary facts. They need to be set out in detail as the precise inferences to be drawn depend on the entire picture revealed by the evidence.

7 It is first necessary to describe the scene where the assault occurred.

8 Prior to the assault the appellant had been in a pizza shop known as “Dave’s Midnight Pizza”. He had been making a pest of himself in the pizza shop by drunken, aggressive, insulting and generally objectionable behaviour. Mr Schoer, the owner of the shop, called the security guards for help. The security guards arrived and removed the appellant from the shop. This was a part of a chain of events that led to the assault.

9 Mr David Schoer was the owner and operator of Dave’s Midnight Pizza and had been since August 1997. Apart from Mondays, his shop was open from about 5.30 pm and on Friday nights it remained open past midnight until between 4.30 and 5.30 am the following Saturday.

10 Dave’s Midnight Pizza fronts on to the Great Western Highway which runs from east to west. The private lane where the appellant was assaulted runs from north to south into the Great Western Highway and is 56 metres to the east of the shop. Queen Street intersects with the highway to the east of Dave’s Midnight Pizza and Princess Mary Street intersects with the highway to the west. Queen Street is 32 metres to the east of the lane and 88 metres to the east of the pizza shop. The distance from Princess Mary Street to Queen Street along the highway is about 280 metres. An hotel, known as “The Wagon Wheel Hotel”, was then situated on the western side of Princess Mary Street. Between this hotel and Dave’s Midnight Pizza is the St Marys Band Club and its associated car parks. The Club and the car parks are to the west of Dave’s Midnight Pizza. There is an entry to the St Marys Band Club about 100 metres to the west of Dave’s Midnight Pizza. A police station is situated at or near the intersection between the Great Western Highway and Queen Street.

11 Over the years there had been a number of violent incidents in the pizza shop. Mr Schoer testified that he had been assaulted about five times. On one occasion, he had a pot plant thrown at his head that had almost knocked him unconscious. He said that from time to time there were fights in the shop or at the front of the shop. He had windows kicked in and smashed. There were incidents where people chased after each other with chairs. Generally, he had had “a lot of trouble”.

12 The problems Mr Schoer had experienced led him to make a security arrangement with the management of St Marys Band Club. It was agreed that, in return for Mr Schoer providing the staff of the Club, including the security staff, with a discount rate on pizzas and drinks, the Club would arrange for security guards employed by the respondent and retained by the Club to come to Dave’s Midnight Pizza to help Mr Schoer when necessary.

13 Thus, when Mr Schoer wished to obtain security assistance he would call the manager or receptionist at the St Marys Band Club and they would send the security staff along the Great Western Highway to his pizza shop.

14 Mr Schoer explained that many patrons of the St Marys Band Club would arrive at the pizza shop after 4.00 am when the Club closed. Every Friday night, the Club would send the bouncers to stand in front of the pizza shop to make sure that there was no trouble. Cooper AJ found that part of the duties of the respondent’s security guards was to perform security services at Dave’s Midnight Pizza as and when requested by Mr Schoer. There is no appeal from this finding.

15 At about 6.30 pm on Friday, 21 December 2001, the appellant and his brother arrived at the Wagon Wheel Hotel. The appellant’s brother left the appellant at the hotel at about 10.30 or 11.00 pm and did not see him again that night.

16 At some time after midnight, the appellant came into Dave’s Midnight Pizza with one or two others. The appellant was very drunk, generally abusive, and made extremely rude remarks to female patrons. In addition, he slapped one of the patrons. The others with him were also causing trouble.

17 In consequence, Mr Schoer made two phone calls to the St Marys Band Club seeking assistance from the security staff. In response, Messrs Hoskins and Loau arrived. More or less at the same time, Joanna Synnerdahl, who had arrived at the pizza shop with friends at about 1.00 am, received unwelcome and aggressive attention from the appellant; so much so that she called the police on her mobile telephone.

18 One of the security guards asked Ms Synnerdahl what was happening. She told him that she had called the police and that the guards should hold the appellant outside.

19 A number of witnesses testified as to what they observed after the security guards arrived. What follows is based principally on the evidence of Mr Peter Gregory, one of Ms Synnerdahl’s friends. His evidence is important as Cooper AJ said (at [112]) that he found Mr Gregory “to be a most impressive witness” whose “evidence was not challenged”.

20 Mr Gregory said that when he first went into the pizza shop he saw the appellant “standing there yelling abuse at the girls”. The “girls” included Ms Synnerdahl. The security guards from the St Marys Band Club grabbed the appellant “at the front” and one swung his elbow at him but missed. On the fourth try, the guard struck the appellant on the side of the face.

21 The guards then dragged the appellant outside. There were two involved at this stage, apparently Messrs Hoskins and Loau.

22 Mr Gregory’s evidence-in-chief as to what then occurred differed to a degree to his evidence in cross examination.

23 In chief, he said that the two guards “were pushing and shoving and wrestling with [the appellant]” while the appellant was saying “leave me alone, leave me alone”. He said that the guards then “proceeded to walk him up towards the laneway”. At about this time, other guards arrived from the St Marys Band Club and also walked towards the laneway, behind the two guards taking the appellant. Mr Gregory saw the two guards walk the appellant into the laneway. The other guards, according to Mr Gregory, “were just standing looking up and down the street like keeping watch”. After a short time, he saw the two guards walk out of the laneway and return towards the St Marys Band Club. As they walked past him one said, “[h]e won’t be causing any trouble tonight, he just got his head kicked in”. At this stage, the other guards were walking about ten feet away behind the two in question.

24 In cross-examination, Mr Gregory said that when he walked into the shop the appellant stood and faced him with his fist clenched and in a stance like a boxer. He had removed his shirt and looked as if he wanted to fight with clenched fists. He seemed “out of control”. The appellant had been a boxer who had won a trophy which he described as an “Australia versus New Zealand, like title fight”.

25 The guards came in and “grabbed [the appellant] front-on”. They held his arms together and one “swung at his head”. While that was occurring the appellant was swearing, abusing and insulting the guards. The guards’ attempts to restrain him increased his wild and bad behaviour.

26 Mr Gregory was cross-examined about a statement that he had made to the police within hours of the events occurring. Mr Gregory agreed that his statement was truthful and accurate. In the statement, he said that just after the guards had taken the appellant outside the pizza shop:

“They stopped and let go of the [appellant]. He was still very aggressive towards the bouncers and they were yelling at him to go away. This exchange went on for about 20 minutes.”

He then saw the guards take the appellant into the laneway.

27 According to Mr Gregory, while the appellant was still being “very aggressive towards the bouncers” outside the pizza shop, he was standing “very aggressively towards the bouncers” with clenched fists. The guards were yelling to him to “[g]o home” and “[j]ust go, just go”.

28 According to Mr Schoer, when the bouncers arrived they requested the appellant and his friends to leave. They refused to leave and the bouncers physically removed them. He said that, outside the shop, the appellant and a friend “were attacking the bouncers”. They “were pushing and shoving and throwing their elbows at the bouncers ... as if to antagonise them, to invite them to fight”. They were “making gestures, you know, come on, fight”. The appellant was “trying to antagonise [the bouncers] to come after him”.

29 Even after the guards had walked the appellant and his friend up the Great Western Highway, “probably 8 or 10 metres” from the front door of the pizza shop, the two men, according to Mr Schoer, “were still egging the bouncers on, you know, like antagonising them, you know and inviting them to, you know, fight them”.

30 Ms Synnerdahl testified that after the guards returned to the pizza shop (about 10 minutes after they left with the appellant) she heard one of them say, “Don’t worry about it, we just kicked his head in”. Subsequently, she walked along the Great Western Highway to the entrance of the laneway. She saw the appellant in the laneway in a foetal position with his head in a pool of blood.

31 The respondent called no evidence at the trial. Transcripts of records of interviews conducted by the police with Freddy Loau and Gerald Hoskins were tendered in evidence. Broadly speaking, they denied any assault or wrongdoing on their part. Cooper AJ did not accept their denials (see at [118]).

32 At trial, the appellant rested his case on two alternative causes of action. The first was based on the personal negligence of the respondent. The alternative cause of action was based on the vicarious liability of the respondent for the assault committed by its employees.

33 The negligence alleged, in essence, was that the respondent had failed properly to train and supervise its employees and to take reasonable steps to prevent them from assaulting other persons. This cause of action was rejected by his Honour. He held (at [124]) that each of the security guards concerned held an appropriate licence, “and had been given training that they were to use force only as a last resort and when force was used it must not be more than what was reasonable in the circumstances”. He held (at [124]) that the employees concerned “were properly trained and supervised”. His Honour held that the respondent had taken reasonable care to ensure that employees did not assault or ill treat other persons. He found (at [127]) that “the injuries to the [appellant] here were caused by employees disobeying the instructions which they had been given.”

34 Cooper AJ summarised (at [141]) the assault case of the appellant as follows:

“The activity of the security guards in removing the plaintiff from the shop was something which was within the course of their employment. In addition they were entitled to use reasonable force to see that he did not go back into the shop and cause further problems. Their conduct in escorting him up the roadway and into the laneway was part of their employment which required them to subdue him. In the course of subduing him within the laneway they were doing what they were employed to do but they used a wrong method of so doing. Consequently the assault upon the plaintiff was done in the course of employment.”

35 The respondent’s answer was that the conduct of its employees in taking the appellant into the laneway and then assaulting him was a criminal act in no way connected with what they were employed to do.

36 Cooper AJ observed (at [144]):

“It would have been within the course of the employment of the security guards to have taken [the appellant] outside and to have held him there pending the arrival of police. It would also have been in the course of their employment if they had escorted him, using no more force than was reasonable [sic] necessary up to the police station which was near the corner of Queen Street and Great Western Highway.”

37 His Honour concluded (at [145]) that it was not in the course of the security guards employment “to turn left into that lane with him and there to inflict upon him a brutal and vicious assault”. His Honour observed (at [145]):

“That brutal and vicious assault was not for the purpose of subduing him. It was so severe and unnecessary that it was motivated by the blood lust of the security officers involved. I would therefore hold that the assault upon the [appellant] by the security guards was not done in the course of their employment but was an independent ‘frolic of their own’.”

38 On appeal, Mr Campbell SC, who together with Mr Hourigan appeared for the appellant, broadly speaking, advanced the following propositions:

(a) The trial judge erred, as a matter of law, in regarding unauthorised acts by the security guards as being incapable of fixing their employer, the respondent, with vicarious liability.

(b) Alternatively, his Honour failed to bear in mind the possibility that an employer may be liable for unauthorised acts if they are so connected with authorised acts that they may be regarded as modes, although improper modes, of doing them (State of New South Wales v Lepore [2003] HCA 4; (2003) 212 CLR 511 at 536, [42] per Gleeson CJ).

(c) His Honour should have inferred from the evidence that the reason for the assault was not personal vindictiveness on the part of the security guards, but a desire to demonstrate to the appellant that, if he caused trouble, “this is what is going to happen to you” and to warn him not to return to the pizza shop as “this is the sort of thing that happens to troublemakers”.

(d) While the assault was unlawful and disgraceful, it was not “a brutal and vicious assault”.

(e) His Honour did not attribute sufficient weight to the fact that the assault was committed under cover of the authority security guards were held out as possessing or of the position in which they were placed as representatives of their employer (Deatons Pty Limited v Flew [1949] HCA 60; (1949) 79 CLR 370 at 381 per Dixon J).

39 The appellant’s case based on vicarious liability for assault involves holding the respondent liable for unlawful and criminal acts by its employees who disobeyed the instructions the respondent had given them. This is not an area of the law characterised by clarity of principle.

40 Any discussion of the relevant principles must commence with Deatons. The case concerned a barmaid who threw beer from a glass, and then the glass, at a patron of a hotel.

41 Latham CJ said (at 378):

“An employer is liable for the act of his servant only if the act is shown to come within the scope of the servant’s authority either as being an act which he was employed actually to perform or as being an act which was incidental to his employment ... In the present case it is not suggested that the barmaid was employed to throw beer in customers’ faces, but it is contended that the throwing of the beer was incidental to her employment as a barmaid in that she was placed in the bar to deal with customers and to answer such questions as customers might naturally ask.”

The Chief Justice said, at 379, however:

“Upon the plaintiff’s evidence the throwing of the beer was a gratuitous, unprovoked act which had nothing at all to do with the performance of the duties of the barmaid. Upon the evidence given for the defendant the act was an act of personal resentment and was not in any way performed as on behalf of the employer. It was not done even in the supposed furtherance of the interests of the employer. In doing what she did the barmaid was, as Isaacs J said in Bugge v Brown [1919] HCA 5; (1919) 26 CLR 110 at 118 acting so ‘as to be in effect a stranger in relation to [her] employer with respect to the act [she] has committed, so that the act is in law the unauthorised act of a stranger’. In my opinion the act of the barmaid was not expressly authorised, it was not so connected with any authorised act as to be a mode of doing it, but was an independent personal act which was not connected with or incidental in any manner to the work which the barmaid was employed to perform. Accordingly ... the defendant ... was ... entitled to a verdict.”

42 Dixon J said (at 381 to 382):

“It is not a case of a negligent or improper act, due to error or ill judgment, but done in the supposed furtherance of the master’s interests. Nor is it one of those wrongful acts done for the servant’s own benefit for which the master is liable when they are acts to which the ostensible performance of his master’s work gives occasion or which are committed under cover of the authority the servant is held out as possessing or of the position in which he is placed as a representative of his master ...

The truth is that it was an act of passion and resentment done neither in furtherance of the master’s interests nor under his express or implied authority nor as an incident to or in consequence of anything the barmaid was employed to do. It was a spontaneous act of retributive justice.”

43 McTiernan J said (at 382):

“The responsibility of the appellant for the consequences of the assault depends upon the question whether the barmaid assaulted the plaintiff in the course of fulfilling any duty which the appellant entrusted to her. The assault could not possibly be a manner of fulfilling any duty which the jury was entitled to find that the appellant entrusted to the barmaid.”

44 Williams J said (at 384) that the Court could not do better than rely (as did Jordan CJ in the Full Court of the Supreme Court of New South Wales (Flew v Deatons Pty Limited (1949) 49 SR (NSW) 219; 66 WN (NSW) 98) on the statement of the law in a passage from Salmond’s Law of Torts (London: Sweet & Maxwell, 9th ed, 1936) at page 495, cited with approval by the Privy Council in Canadian Pacific Railway Company v Lockhart [1942] AC 591 at 599, namely:

“... [b]ut a master, as opposed to the employer of an independent contractor, is liable even for acts which he has not authorised, provided they are so connected with acts that he has authorised that they may be regarded as modes – although improper modes – of doing them. In other words, a master is responsible not merely for what he authorises his servant to do, but also for the way in which he does it. On the other hand, if the unauthorised and wrongful act of the servant is not so connected with the authorised act as to be a mode of doing it, but is an independent act, the master is not responsible: for in such a case the servant is not acting in the course of his employment, but has gone outside of it.”

His Honour quoted (at 385) Lord Esher MR’s remarks in Dyer v Munday [1895] 1 QB 742 at 746:

“[I]f, in the course of carrying out his employment, the servant commits an excess beyond the scope of his authority, the master is liable.”

45 Webb J said (at 388):

“The authorities make it clear that the appellant company would have been civilly liable for the consequences of any exercise by the barmaid of her express or implied authority as barmaid, even if she had employed an improper mode of exercising it, and even had committed a crime in so doing.”

46 In Lepore, Gleeson CJ referred to the formulation of the test in Salmond’s Law of Torts (in the first edition published in 1907 (at page 83) and in later editions) which Williams J approved in Deatons and observed (at 539, [51]) that the test serves well in many cases, but it has its limitations. Gleeson CJ noted (at 537, [47]) that there are many examples of cases where an act of intentional, criminal wrongdoing, solely for the benefit of the employee, has been found to be in the course of employment. His Honour warned (at 539, [51]) against pitching the level of generality at which it is proper to describe the nature of an employee’s duties so high as to pre-empt the issue. Significantly, his Honour said (at 540, [54]):

“Where acts of physical violence are concerned, the nature and seriousness of the criminal act may be relevant to a judgment as to whether it is to be regarded as a personal, independent act of the perpetrator, or whether it is within the scope of employment. A security guard at business premises who removes a person with unnecessary force may be acting in the course of employment. On the other hand ... extreme and unnecessary violence, perhaps combined with other factors, such as personal animosity towards the victim, might lead to a conclusion that what is involved is an act of pure personal vindictiveness.”

47 Gaudron J said (at 557, [117]):

“[A]s a general rule it is a misuse of language to speak of deliberate criminal acts as acts committed in the course of employment, unless that phrase imports only a temporal connection between the criminal act and the employment in question.”

Her Honour said (at 561, [130]):

“The only principled basis upon which vicarious liability can be imposed for the deliberate criminal acts of another, in my view, is that the person against whom liability is asserted is estopped from asserting that the person whose acts are in question was not acting as his or her servant, agent or representative when the acts occurred.”

Gaudron J (at 561, [131]) expressed the relevant test for estoppel in these circumstances as “whether the person in question has acted in such a way that a person in the position of the person seeking the benefit of the estoppel would reasonably assume the existence of a particular state of affairs. In the case of vicarious liability, the relevant state of affairs is simply that the person whose acts or omissions are in question was acting as the servant, agent or representative of the person against whom liability is asserted.”

48 Gummow and Hayne JJ said (at 592, [232]):

“It is the identification of what the employee was actually employed to do and held out as being employed to do that is central to any inquiry about course of employment.”

Their Honours (at 592, [233]) observed that in Deatons, the barmaid threw the glass in retaliation for a blow and an insult, not in self-defence and not in any way in the supposed furtherance of the employer’s interests. They observed that Deatons was not a case “where the act done was one to which the ostensible performance of the employer’s work gave occasion, or which was committed under cover of the authority the employee was held out as possessing, or of the position in which the employee was placed as representative of the employer”. Their Honours observed (at 592, [234]) that cases of excessive punishment by a teacher may fall within the category of an act to which the ostensible performance of the employer’s work gave occasion. Their Honours included in this category “many cases where a store detective wrongfully arrests and detains a person or in that process assaults them”.

49 Gummow and Hayne JJ said (at 594, [239]):

“For present purposes, it is enough to conclude that when an employer is alleged to be vicariously liable for the intentional tort of an employee, recovery against the employer on that basis should not be extended beyond the two kinds of case identified by Dixon J in Deatons: first, where the conduct of which complaint is made was done in the intended pursuit of the employer’s interests or in the intended performance of the contract of employment or, secondly, where the conduct of which complaint is made was done in the ostensible pursuit of the employer’s business or the apparent execution of the authority which the employer held out the employee as having.”

50 Kirby J (at 614, [307]) described Salmond’s formulation of the principle as “[t]he starting point” in the inquiry. He observed that vicarious liability may extend to intentional wrongdoing of an employee. His Honour (following Salmond) was of the opinion that an employer may be liable for unauthorised acts provided they are so connected with acts which the employer has authorised, that they might rightly be regarded as modes – although improper modes – of doing them. His Honour acknowledged (at 619, [320]) that the determination of the connection would involve value judgments and policy choices and amounted to a question of fact and degree.

51 Callinan J rested his decision on the proposition that “deliberate criminal conduct is not properly to be regarded as connected with an employee’s employment: it is the antithesis of a proper performance of the duties of an employee” (at 626, [345]). This proposition is contrary to a majority of opinions expressed in Lepore and Deatons, and can therefore be put to one side.

52 One thing seems to be clear according to the weight of authority. There are circumstances under which an employer may become vicariously liable for unauthorised acts of an employee, even when those acts are criminal and even when the employer has expressly instructed the employee not to perform acts of that kind.

53 It is not possible to discern a generally accepted jurisprudential theory that underlies the imposition of liability on an employer in this situation. Liability without fault is an unusual phenomenon when its source is not legislation but the common law. Explanations based on estoppel or ostensible authority seek in some way to attribute the vicarious liability of employers for criminal acts of employees committed contrary to their instructions to conduct of the employers themselves. It is difficult, however, to comprehend how a criminal act could ordinarily fall within the ambit of ostensible authority, and estoppel seems quite out of place in this context (for example, how are the elements of reliance and detriment satisfied?). The explanation that liability is incurred when acts are done in the intended pursuit of the employer’s interests or in the ostensible pursuit of the employer’s business means that the employer may be entirely at the mercy of the employee. On this basis, no matter what instructions the employer may give the employee, the employer may be liable if the employee disobeys those instructions and commits a criminal act in the subjective belief that by doing so the employer’s interests will be advanced. In the end, the only explanation that is satisfactory is that of policy, and judicial policy at that.

54 It is not easy to trace a certain and secure path through the dicta. The safest course is to attempt to apply all of them to the facts of the particular case. The answers that this course produces will assist in resolving the issue, particularly if the answers, or a substantial majority of them, are the same.

55 An example of this approach is Sandstone DMC Pty Limited v Trajkovski [2006] NSWCA 205, another case involving the alleged vicarious liability of an employer for damages incurred when a security guard it employed punched and kicked a patron after removing him from a night club.

56 While the appellant accepts the primary facts found by Cooper AJ, he challenges the inferences his Honour drew from them. This appeal falls to be determined by the appropriate inferences to be drawn. Hence, the statement by Gibbs ACJ, Jacobs and Murphy JJ in Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 (at 551) applies, namely:

“[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it.”

These remarks were reaffirmed in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 127, [25] per Gleeson CJ, Gummow and Kirby JJ.

57 In submitting that Cooper AJ assumed that, as a matter of law, the unauthorised (and criminal) assault was incapable of falling within the scope of the security guards’ employment, Mr Campbell relied on the following passage from his Honour’s reasons (at [157]):

“It is not necessary to quote from those cases here. Suffice to say that having considered them I am comfortably satisfied that the conduct of the security guards in so severely assaulting the plaintiff was far outside of their scope of employment. Their scope of employment ended by either restraining the plaintiff, using reasonable force, until the arrival of the police or taking him to the police station, again using reasonable force, or encouraging him, as they say they did in their records of interview, to go away.”

58 Mr Campbell relied particularly on the second sentence of the quoted passage. He also referred to [158] of his Honour’s reasons which was in the following terms:

“The conduct of taking him into the lane and viciously assaulting him about the head is not connected with any authorised method of doing their job. It was clearly an independent act. The only connection between the scope of their employment and the assault is that it put them in the location and afforded them the opportunity to carry out their independent act.”

59 Mr Watson SC, who appeared for the respondent, submitted that statements in question by his Honour were merely findings of fact that did not reflect his Honour’s view of the law. In my opinion, this submission must be accepted.

60 His Honour made several references to authority to the effect that an employer may be liable for unauthorised acts if those acts may be regarded as improper modes of carrying out authorised acts. It is apparent from those references that his Honour did bear in mind and consider this principle of law. I do not accept Mr Campbell’s submission to the contrary.

61 In Lepore (at 617, [316]), Kirby J quoted a statement by the Supreme Court of Canada in Bazley v Curry 1999 Can LII 692 (SCC); [1999] 2 SCR 534 (at 548 to 549, [22]) as follows:

“[W]here the employee’s conduct is closely tied to a risk that the employer’s enterprise has placed in the community, the employer may justly be held vicariously liable for the employee’s wrong.”

62 Kirby J observed (at 617, [317]) that this passage was cited with apparent approval by the High Court in the joint reasons of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ in Hollis v Vabu Pty Limited [2001] HCA 44; (2001) 207 CLR 21 (at 40, [42]). The joint reasons in that case (at 40, [42]) state:

“In general, under contemporary Australian conditions, the conduct by the defendant of an enterprise in which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of that enterprise.”

63 I do not accept that it is a characteristic of the conduct of the provision of security services that security guards assault patrons unlawfully and criminally. I recognise that this is not necessarily an infrequent occurrence, but that does not mean that it is a “characteristic of the conduct of that enterprise”.

64 This proposition to which Kirby J referred (relating to the risks inherent in the employer’s enterprise) did not form part of the reasoning of any other members of the Court in Lepore. The provision of security services is a business that provides an important social benefit to the community and it is difficult to understand why, on policy grounds, employers in this industry should be singled out, as a matter of law, as being more susceptible to vicarious liability for unauthorised and criminal acts than other employers. There were hints of an argument to this effect in the submissions advanced by Mr Campbell. For the reasons I have given, I respectfully decline to uphold that argument.

65 In the context of this case an extremely important finding by Cooper AJ was that the assault “was not for the purpose of subduing” the appellant but was “motivated by the blood lust of the security officers involved” (at [145]). It was for this reason that his Honour held that the assault was an independent act of the security guards and not an act done in the course of their employment.

66 Mr Campbell submitted that it was inappropriate to describe the assault as “brutal and vicious”. I do not accept this submission. The appellant’s further amended statement of claim alleged: “[the appellant] was savagely assaulted”. A report by Dr Lawson dated 18 November 2003 tendered in evidence states:

“He sustained severe closed head injury with cerebral contusion. There was gross swelling of his head and face but no facial or head fractures. There was pain of his jaw but apparently no major dental damage. There was general bruising of his body ...”

When being transported to hospital, the appellant’s Glasgow Coma Score fell to three, which signifies a severe head injury (see the report of Dr Gilandas, a psychologist, tendered in evidence). In fact, the appellant sustained a serious brain injury.

67 As Gleeson CJ pointed out in Lepore (at 540, [54]) the nature and seriousness of the criminal act may be relevant to a judgment as to whether it is to be regarded as an independent act or an act within the scope of employment. The nature of the injuries supports the inference drawn by the judge (that is, of a brutal and vicious assault).

68 In Starks v RSM Security Pty Limited [2004] NSWCA 297; (2004) Aust Torts Reports 81-768, Beazley JA (with whom Sheller JA and Grove J agreed) said (at 65,992, [23]):

“[A]n employer would be less likely to be held vicariously liable if, in addition to unnecessary violence there were other factors such as personal animosity. In such a case, a conclusion might more readily be drawn that an attack was an independent act directed against the victim even though the employee was carrying out duties at the time.”

69 The police records of interview do not reveal any personal animosity on the part of the security guards. In the light of his Honour’s findings, however, it would be dangerous to place any material reliance on what the guards there said.

70 I have mentioned that the security guards did not give evidence. There was no evidence, therefore, from them as to any personal animosity on their part. Nevertheless, the conduct of the appellant towards the security guards before the assault took place was certainly capable of giving rise to personal animosity.

71 I accept that it was open to his Honour to infer from the appellant’s prior conduct and the nature of his injuries that there was personal animosity, but my duty in deciding what inference should be drawn, as laid down by Warren v Coombes and confirmed by Fox v Percy, is to give respect and weight to the conclusion of the judge but to come to my own conclusion and give effect to it.

72 There are three other matters that bear on the issue whether the security guards assaulted the appellant because of personal animosity and whether the assault is to be regarded as a personal, independent act of the guards. His Honour does not appear to have considered these three matters in holding that the assault was “motivated by the bloodlust of the security officers involved” (at [145]) and was “an act of passion” (at [148]), such that their conduct was “not connected with any authorised method of doing their job” and was “clearly an independent act” (at [158]).

73 Firstly, after the guards had taken the appellant out of Dave’s Midnight Pizza they spent several minutes (up to 20 according to Mr Gregory) with him in the Great Western Highway about 50 metres east of the pizza shop and close to the entry to the laneway. During this period, the appellant was behaving aggressively and insultingly to the guards, but they do not appear to have demonstrated any unusual anger. They merely kept “yelling at him to go away” and to “go home” and “just go, just go”. Apart from the blow that was struck early on inside the pizza shop, there was no evidence that, until they took the appellant into the laneway, the guards struck or even threatened the appellant at any time during the altercation outside the shop and while they were in the Great Western Highway.

74 Secondly, there is the evidence of Mr Gregory that, after the guards returned to the pizza shop, having assaulted the appellant, one of them said that the appellant would not be causing any trouble that night as “he just got his head kicked in”. As I have mentioned, Ms Synnerdahl gave similar evidence, namely, that when the guards returned, one told her that she should not worry as “we just kicked his head in”. The admissibility of this evidence against the respondent may be arguable, but no objection was taken to it either at trial or on appeal (notwithstanding that, during argument on appeal, the Court referred to a possible contention to this effect).

75 Thirdly, there is the conduct of the two guards who, while standing in the Great Western Highway, kept watch on what was happening in the laneway.

76 The fact that the guards did not strike or even aim any blow at the appellant or threaten him after they left the pizza shop and before they entered the laneway, despite intense provocation from him, suggests that at that stage they had not lost their tempers and were in control of their feelings.

77 The evidence of Mr Gregory and Ms Synnerdahl as to what the guards said after the assault tends to prove that the guards assaulted the appellant in order to prevent him from causing any further trouble at the pizza shop, from threatening Ms Synnerdahl, and from returning to the pizza shop. That his intention was to return could be inferred from his refusal to leave when the guards yelled at him to “go away” and to “go home”.

78 The fact that the four guards acted in concert as they did (two guards taking the appellant into the dark laneway while two remained in the Great Western Highway keeping guard) is indicative of a planned and deliberate course of conduct and not a spontaneous act triggered by personal animosity and pure personal vindictiveness.

79 In my view, these three matters outweigh the violence of the assault. There may well have been an element of personal animosity and personal vindictiveness, but, in my view, the three matters indicate that this element was not the dominant cause of the assault. In my opinion, the dominant cause of the assault was a desire on the part of the guards to do their duty by ensuring that the appellant would not again make a pest of himself at the shop, would not return to the shop, and would not again molest the customers, particularly Ms Synnerdahl (who was told “not to worry” by one of the guards after the assault had occurred).

80 In the light of the conclusion to which I have come concerning the reasons for the assault, I am of the opinion that the assault was “incidental” to the employment of the guards in the sense that this word was used by Latham CJ in Deatons (at 378). The assault was not a gratuitous unprovoked act. It had a great deal to do with the performance of the guards’ duties. And, to use the expression adopted by Latham CJ in Deatons (at 379), it was an act “performed as on behalf of the employer” and “in the supposed furtherance of the interests of the employer”. The guards were not acting as “strangers” in relation to their employer with respect to the assault (in the sense that this phraseology was used in Bugge v Brown (at 118)). The guards, in the course of carrying out their employment, committed “an excess beyond the scope of [their] authority (see Dyer v Munday (at 746)).

81 In my opinion, to paraphrase Dixon J in Deatons (at 381), the assault was an improper act due to ill judgment but done in the supposed furtherance of the master’s (the respondent’s) interests. The assault was an act to which the ostensible performance of the employer’s work gave occasion and the assault was committed in furtherance of the employer’s interests.

82 The guards assaulted the appellant “in the course of fulfilling [their duty] which the [respondent] entrusted to [them]” (to use the words employed by McTiernan J in Deatons at 382).

83 In my opinion, the conduct of the guards was so connected with acts that the respondent authorised them to perform that they may be regarded as modes – although highly improper modes – of doing them (and, thus, falls within the test formulated by Salmond, approved by Williams J in Deatons (at 384), and by Gleeson CJ and Kirby J – subject to qualification – in Lepore (at 539, [51] and at 614, [307], respectively)).

84 The remarks I have made explain why I consider the requirements laid down by Gleeson CJ in Lepore for liability by an employer for unauthorised criminal wrongdoing by an employee are satisfied. The same applies to the reasons expressed by Gaudron J in that case. The assault was committed in the intended pursuit of the respondent’s interests or in the ostensible pursuit of its business, and so satisfied the requirements of Gummow and Hayne JJ in Lepore (at 594, [239]). The connection between the unauthorised acts of the guards and the acts which their employer, the respondent, authorised, was sufficiently close, according to the criteria laid down by Kirby J in Lepore, to extend vicarious liability to the respondent for the intentional wrongdoing of its employees.

85 Accordingly, I am of the opinion that the appeal should succeed.

86 The respondent pleaded other defences that were unnecessary for the judge to deal with, in the light of the conclusion to which he came. Those defences were not raised in argument before this Court and it is not clear whether they remain alive. The issue of damages is outstanding. Accordingly, the matter should be remitted to the Supreme Court so that the remaining issues can be resolved.

87 I propose the following orders:

(a) The appeal is upheld.

(b) The judgment of Cooper AJ is set aside.

(c) The matter is remitted to the Supreme Court for resolution of the outstanding issues.

(d) The respondent is to pay the appellant’s costs of the trial and the appeal.

(e) The respondent is to have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise qualified.

88 TOBIAS JA: I agree with Ipp JA.

89 HISLOP J: I agree with Ipp JA.

**********
AMENDMENTS:


12/11/2007 - Para [41] 3rd line of quotation: the word "was" deleted and "or as" inserted. - Paragraph(s) Para [41]


LAST UPDATED: 12 November 2007