Date: Mon, 2 Jul 2007 02:39

From: Neil Foster

Subject: Vicarious Liability for theft by carer for disabled person

Dear Colleagues

Very interesting decision of the Full Court of the Supreme Court of South Australia in Ffrench v Sestili; Sestili v Triton Underwriting Insurance Agency P/L [2007] SASC 241. Ms Sestili ran a personal carer's service for disabled persons; Ms Ffrench was unable to care for herself, and a Ms Brown was engaged by Sestili to look after her. Having been given access to Ms Ffrench's ATM card for shopping, Ms Brown managed to steal some $35,000 over some months (by taking it in chunks out of ATMs). Was Sestili as the employer of Brown vicariously liable for the theft (conversion, effectively)? Debelle J gives a very careful and I think well-reasoned judgement, applying the High Court decision in Lepore, to find that she was in fact vicariously liable.

There is an interesting issue about the precise circumstances of the thefts and whether all the money that was taken was sufficiently "closely connected" with the employment - about $7,000 was from an account which was meant to be for day-to-day expenses and to which Brown had been given clear access; the balance came from another account as to which it was unclear how she had found out the password, but in the end Debelle J ruled that the circumstances of her employment, which gave her control over personal and confidential papers, etc, were sufficiently connected to this account to make the employer vicariously liable for this as well.

Also an interesting side-issue as to whether Sestili could claim under her insurance policy, which covered "loss of tangible property". The insurance company tried to claim this was just conversion of intangible property (the money in the account) and hence not covered. But Debelle J ruled (again, correctly I think) that once the notes had been taken from the ATM (which was how all the thefts had occurred) then they were tangible property which upon misappropriation by Brown were "lost".

Regards
Neil F

Neil Foster
Newcastle Law School
Faculty of Business & Law
University of Newcastle
Callaghan NSW 2308
AUSTRALIA
ph 02 4921 7430
fax 02 4921 6931

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