Vicarious liability
14"[V]icarious liability derived originally from mediaeval notions of headship of a household, including wives and servants; their status in law was absorbed into that of the master": Hollis at [33]; Sweeney at [20]. The "general rule" has long been that an employer is not liable for a tort committed by an independent contractor. The language of "general rule" is that of Jordan CJ in Torette House Pty Ltd v Berkman (1939) 39 SR (NSW) 156 at 165, of Mason J in Stoneman v Lyons (1975) 133 CLR 550 at 574, of Brennan J in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 575 and of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ in Hollis at [32]. McHugh J has suggested a substantial reformulation of that general rule, so that it extends to the tortious acts of independent contractors who are "agents" carrying out tasks for the benefit, and as representatives, of their principals (in Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 at 366-367, and in Hollis at [73]-[74], [93]), but that has never commanded the assent of a majority of the High Court (Sweeney at [27]) and its adoption is not a matter for this Court. Notwithstanding that parts of Ms Day's argument resembled McHugh J's proposed reformulation in those cases, until the High Court otherwise determines, the distinction between independent contractors and employees is a "basic proposition" and a "central conception" of the law relating to vicarious liability, which is "too deeply rooted to be pulled out": Sweeney at [12] and [33].
15The nature of that "general rule" and "central conception" is reflected in three qualifications to it. First, the labels "employer" and "employee" and "principal" and "independent contractor" are merely that. The classification does not of itself determine the legal conclusion that there is or is not vicarious liability, or, as the joint judgment in Hollis put it at [36], those terms "do not necessarily display their legal content purely by virtue of their semantic meaning". To do so would be, to use Windeyer J's words in Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 at 458, "to invert the order of inquiry" and to "allow linguistics to determine legal rights". The real question is whether the "fundamental concerns underlying the doctrine of vicarious liability", one of which is control, are established: Hollis at [45]. The second, which is a corollary of the first, is that a conclusion that a person is an "employee" or "independent contractor" for a particular purpose (such as payroll tax, or superannuation, or employment law) cannot determine whether the relationship is such as to engage the rules of vicarious liability (the different outcome in Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537 illustrates as much). The third is that there are exceptions to the "general rule", which reflect the fundamental concerns underlying the doctrine. One is where an independent contractor is expressly authorised to commit the tortious conduct. Another is exemplified by Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-operative Assurance Company of Australia Ltd (1931) 46 CLR 41 (CML) where it was held that a principal was liable for the slanders uttered by an independent contractor, Mr Ridley, with authority on behalf of his principal to solicit proposals for insurance and collect deposits, even where the principal had expressly forbidden disparaging statements of the very nature made by him. Relevantly for the purposes of resolving this appeal, it is clear that the decision in CML is to be understood as was explained in Sweeney at [14]-[19].
16On the unchallenged facts as found in the present case, Checkmate was Mr James' employer, and was vicariously liable for his tortious conduct because it was incidental to his employment. It is clear that that conduct was not expressly authorised by the Hotel or Ms Elliott-Cosmos, a test which is much harder to satisfy than the approach based on "course of employment" which applies to the tortious conduct of employees. The primary judge found that the Ms Elliott-Cosmos and Ms May were not on the spot, and that all that was authorised was Ms Day's removal. Those findings were amply open on the evidence, which included testimony that the security guards were able to turn out patrons without recourse to the Hotel's management.
17Nor was Mr James acting as the agent of the Hotel or Ms Elliott-Cosmos in the requisite sense, so as to create vicarious liability. It is true that he was an "agent" within the meaning of s 77, and thus authorised by s 77(2) to withdraw the otherwise general permission extended to the public and by s 77(5) to use reasonable force to turn her out. But it does not follow that he was an "agent" in the sense used in CML. Dixon J made it clear in CML that Mr Ridley was liable, although he was an independent contractor, only because he was a "true agent" for the purpose of soliciting insurance proposals and taking deposits: at 50. That was why Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ insisted in Sweeney at [22] that the conclusion in CML:
"depends directly upon the identification of the independent contractor as the principal's agent (properly so called) and the recognition that the conduct of which complaint is made was conduct undertaken in the course of, and for the purpose of, executing that agency." (emphasis added)
18Mr James undoubtedly exceeded the statutory power conferred upon him by s 77. But even if he were an "agent" within the meaning of that section, it does not follow that he was a "true agent", to use Dixon J's language in CML, or an agent "properly so called", to use the language in Sweeney above - that is to say, a person with authority to bind his principal. It is always dangerous unthinkingly to translate words deployed in one context to another. It is particularly dangerous where the word used to describe the person in both contexts is "agent", for, as Lord Herschell said, "[n]o word is more commonly and constantly abused than the word 'agent'": Kennedy v De Trafford [1897] AC 180 at 188. That is precisely the force of the High Court's criticism of loose language of agency in Sweeney at [13], [19] and [29].
19It is clear on the evidence that Mr James was not the Hotel's agent in the conventional legal sense, namely, of being authorised to bind it. He had no such authority. Indeed, it was clear that he represented Checkmate. He was wearing Checkmate's uniform, which prominently displayed its mark. It was a condition of the hotelier's licence that security guards be "uniformed", which is to say, identified as not being hotel employees.
20It was submitted that the licensee might be directly liable via s 91 (no attempt was made to rely on s 7 of the Law Reform (Vicarious Liability) Act 1983, which would have required pleading and proof of the elements identified in Zorom Enterprises at [30]). But s 91 does not achieve the result of creating vicarious liability on the part of the Hotel or its licensee. A similar argument was rejected in Starks v RSM Security Pty Ltd [2004] NSWCA 351; (2004) Aust Torts Reports 81-763, whose facts were materially identical to those in the present appeal: a patron at licensed premises was assaulted by a security guard whose employer had contracted with the hotel to supply security services. In Starks an attempt was made to rely upon s 103, the predecessor section to s 77, which authorised: "A licensee or the employee of a licensee" to "turn out or cause to be turned out" persons who were intoxicated, violent, quarrelsome or disorderly. Beazley JA, with the agreement of Sheller and Grove JJA, said this (at [41]):
"In this case, the appellant seeks to invoke the principles of vicarious liability as against the hotel by relying upon the statutory deeming of the employer [of the security guard] as an employee [of the hotel]. In my opinion, the Act does not have that effect. Part 6 of the Act deals with licensed premises. Section 103, which appears in Part 6 not only aids the licensee in the performance of its obligations in the control of licensed premises, it authorises action that might otherwise be unlawful such as the forceful ejection of an intoxicated person from the premises. The section has nothing to say, in my opinion, about the liability the hotel may have when a security guard, not directly employed by it, uses excessive force in carrying out a task otherwise authorised by s 103. If the hotel is to be liable, it must be under the principles of the general law. On the facts here, I have found that there is no such liability."
21In my opinion, the same reasoning applies to s 91. The antecedent of s 91 was s 101, also found in Part 6. Those sections are directed to answering the question who is obliged to comply with the elaborate regulatory regime established by the Act. Neither the Act nor its 1982 predecessor directly created tortious liability for breach of those sections; instead the regime is drafted on the basis that it is for the common law to supply any privately enforceable rights sounding in damages. That is exactly what Ms Day succeeded in obtaining when she obtained judgment against the employer of Mr James for committing an assault and battery not authorised by s 77. Much clearer language than is found in s 91 would be required in order to create a statutory vicarious liability on the part of the Hotel or Ms Elliott-Cosmos. Examples may be found in s 8 of the Law Reform (Vicarious Liability) Act, and s 410B of the Navigation Act 1912 (Cth) considered further below.
22In her written submissions (but not in oral address), Ms Day asserted vicarious liability based on an estoppel in accordance with what Gaudron J had said in New South Wales v Lepore [2003] HCA 4; (2003) 212 CLR 511 at [131]. This was correctly rejected by the primary judge, who appreciated that it was inconsistent with what had been said in Sweeney. Similarly, reliance was placed in writing (but not orally) on what was described as the "special circumstances" basis in Quarman v Burnett (1840) 6 M & W 499; 151 ER 509; this was rightly rejected by the primary judge for the same reason.