Lawyers immediately warned the case could have “far-reaching” consequences for abuse survivors and called for legislative change to ensure institutions were held to account.
Last year, Victoria’s highest court delivered an unprecedented ruling that the church was vicariously responsible for the abuse of a five-year-old child, known as DP, by assistant priest Father Bryan Coffey.
Vicarious liability is typically used to hold employers responsible for the wrongful or negligent actions of their employees during the course of their employment – regardless of whether the employer was at fault.
The 2023 ruling was significant because Coffey, as an assistant parish priest, was not directly employed by the church.
The Victorian court said that despite the lack of a formal employment arrangement, the church was vicariously liable for Coffey’s actions because he was a “servant of the diocese” whose role gave him the “power and intimacy” to access and abuse children.
The Victorian court of appeal said the diocese was “all-powerful in the management of clergy within a diocese” and that the activities of an assistant parish priest were under the “direct control” of the priest, who reported to the bishop.
“In a real and relevant sense, Coffey was the servant of the diocese, notwithstanding that he was not, in a strict legal sense, an employee of it,” the court ruled.
The decision was expected to pave the way for countless survivors to seek greater compensation for their abuse.
But the Catholic church on Wednesday successfully appealed the ruling in the high court.
In a summary of its judgment, the high court said that expanding vicarious liability beyond the employer-employee relationship would create “uncertainty and indeterminacy”.
“A majority of the high court held that the principles of vicarious liability are confined to employment relationships, holding that the high court has repeatedly refused to extend the boundaries of the doctrine of vicarious liability to include independent contractors, or by reference to policy considerations,” the summary stated.
“Expanding the doctrine to accommodate relationships that are ‘akin to employment’ would produce uncertainty and indeterminacy. As the priest was not an employee, there could be no finding of vicarious liability on the part of the diocese.”
Wednesday’s decision prompted calls for law reform.
The lawyers for DP, Ken Cush and Associates, said their client was “disappointed that the compensation for the sexual abuse of Coffey has been taken away by the law in Australia being unable to find the Bishop vicariously liable”.
“He hopes the Australian parliament will swiftly fix the law to help others,” the firm said.
DP said the case had been a “hard journey” but thanked the court for its consideration and his legal team for their advocacy.
Other firms raised concerns about the consequences of Wednesday’s ruling for survivors.
Maurice Blackburn principal lawyer John Rule, who specialises in abuse cases, said it put Australia at odds with similar jurisdictions such as the UK and Canada which allowed institutions to be held vicariously liable for abuse that occurred on their watch.
“The church has known about its priests abusing children for centuries and did nothing to stop it,” Rule said.
“Unfortunately, this decision means that in some cases the church will be able to again evade responsibility for the scourge of child abuse in its ranks.”
Ross Koffel, executive chairman at Koffels Solicitors and Barristers, said the decision was a “catastrophic blow” to the victims of abuse by religious clergy and volunteers at other institutions.
He said the NSW government had already changed the law to hold organisations vicariously liable. But those laws were not retrospective, he said, something that could be changed with a “simple amendment”.
Jason Parkinson, principal at Porters Lawyers, said state government needed to urgently consider reforms to make clear that “a priest or anyone in a religious capacity is the equivalent of an employee for the purposes of vicarious liability”.
“It’s up to each state government to urgently pass that legislation,” he said. “Otherwise we’re going to have despondent people taking their own lives. There’s no doubt about that.”
The high court delivered two separate rulings on Wednesday relating to another legal argument commonly used by the church – the use of permanent stays to halt abuse compensation claims.
Permanent stays are granted in cases where a court rules no fair trial is possible, including due to the passage of time and the death of key witnesses.
In two separate cases, the high court rejected the use of stays by the Queensland government and the Salvation Army to block survivors’ claims for compensation.
The Salvation Army had sought to permanently stay – or halt – a compensation claim brought by an abuse survivor known as RC, who alleged abuse at a residential home in 1959 and 1960. He alleged he reported the abuse and that the Salvation Army had a duty of care to protect him from harm.
The Salvation Army applied for a permanent stay because of the death of the alleged perpetrator and other witnesses. It argued the deaths meant it was unable to mount a fair defence to the claim.
Guardian Australia revealed last year that this argument was being adopted regularly in historical abuse cases, causing profound harm to survivors, who face enormous barriers delaying their ability to come forward.
The high court overturned the decision granting the Salvation Army a permanent stay on Wednesday.
It also partially overturned a decision to grant the Queensland government a permanent stay for an abuse case brought by a former resident of a state dormitory in the 1950s.