Employer found liable on vicarious liability for Employee’s misconduct

Our client, a management corporation for a serviced apartment in town, engaged the Defendant to provide property management services.

As part of this arrangement, the Defendant assigned one of its staff members to serve as the building manager in the management office.

However, the building manager misappropriated funds from the management office without the knowledge or consent of the management corporation.

As a result, the management corporation has initiated legal action against the Defendant, alleging breach of contract and, alternatively, vicarious liability.

Our client has also filed a lawsuit against the building manager for the misappropriation of funds.

We argued that the Defendant failed to properly manage the accounts and lacked adequate supervision over the building manager.

Alternatively, we claimed the Defendant is liable since it authorized the building manager to handle the accounts, thus creating the risk.

The Defendant countered, arguing the building manager acted independently and was not authorized to misappropriate funds.

The Court agreed with our submissions, finding that the Defendant failed to properly manage the accounts and did not exercise adequate supervision over the building manager.

The Court also acknowledged that the Defendant, by authorizing the building manager to handle the accounts, created a risk for which it should be held responsible on the basis of vicarious liability.

Consequently, the Court ordered the Defendant to compensate our client for the losses incurred due to the misappropriation of funds.