THE Court of Appeal has ruled by a majority of two to one that the trustees of the Portsmouth Roman Catholic Diocesan Trust could, in law, be vicariously liable for the alleged actions of the late Fr Wilfred Baldwin, a parish priest in the diocese. The ruling was given on a preliminary issue that arose in an action brought by a claimant identified only as JGE, now 48 years old.

In May 1970, when she was six and a half, JGE was placed in a children's home run by the nuns of a convent that was subject to the control of the English Province of Our Lady of Charity. She remained there for two years, before being returned to her mother. She alleges that, while she was there, she was beaten by the nun in charge of the home. She claims damages from the Sisters of Charity.

She also alleges that the trust "operated and/or managed and/or were responsible for" a church in the diocese; that "at all material times" Fr Baldwin was "in the service of" the trustees and "subject to their direction and control"; that he was regularly invited or permitted by the nuns to visit the children's home; and that he did so in the course of his duties as a priest for the trust.

JGE alleges that she was sexually abused and assaulted by Fr Baldwin, and that he raped her many times, including the day of her first communion, when she says he raped her in the robing room at the church after conducting the service.

She alleges that Fr Baldwin's acts were committed in the course of, or were closely connected with, his employment or duties, so that the Trust was vicariously liable for his acts, and for the injury and damage that she suffered as a result.

The Trust denies that it ever managed, operated, or was responsible for the church. It also denies that Fr Baldwin was at the material time the parish priest at the church, and says that he did not assume that office until about September 1972, some months after JGE had left the children's home.

The issue for the court was whether the relationship between the priest and the church was such that the principle of vicarious liability might apply if the acts of the priest were within the scope of that relationship. There was broad agreement between the expert witnesses who gave evidence on the canon law.

Because the law of England and Wales does not recognise the Roman Catholic Church as a legal entity in its own right, but sees it as an unincorporated association with no legal personality, the diocese usually establishes a charitable trust to own and manage property and conduct its financial affairs. The Portsmouth Trust is such a charity.

In canon law, the position of parish priest is an ecclesiastical office that is, of its nature, perpetual, and to which successive individuals are appointed. Subject to the oversight of the bishop and any diocesan law and regulations, the responsibility for running the parish rests on the parish priest.

He is not a delegate of the bishop, and does not receive instructions from him on how to run the parish. The bishop exercises oversight through periodic visitation of the parish, which should be at least once every five years.

The day-to-day responsibilities of the parish priest are to reside in the parochial house, celebrate services, minister to the sick, and "watch with diligence lest anything contrary to faith and morals is passed in his parish, especially in public and private schools".

The presiding judge, Lord Justice Ward, said that he had found it a difficult case, but concluded that "the time has come emphatically to announce that the law of vicarious liability has moved beyond the confines of a contract of service." The test was whether the relationship of the bishop and Fr Baldwin was so close in character to one of employer and employee that it was "just and fair" to hold the employer vicariously liable.

The priest exercised his ministry in co-operation with his bishop, Lord Justice Ward said, rather than as one who was subject to the bishop's control, as would be the case in an ordinary employment relationship. Moreover, as prescribed by canon law, priests were bound by a special obligation to show reverence and obedience to their own Ordinary.

Abusing a young girl was a gross breach of ecclesiastical law, and, if it came to the bishop's knowledge, he would be bound to dismiss the priest from his office, even if he could not deprive him of the sacrament of holy orders. "Although it might never have crossed his mind to contemplate the unthinkable," Lord Justice Ward said, the bishop could have told Fr Baldwin: "Go out and care for your parishioners, but on no account are you ever to sexually abuse any one of them."

Although the priest decided for himself how he ran his parish, he operated within a pre-existing framework of rights and obligations set out in the Code of Canon Law. Nevertheless, he was ultimately subject to the sanctions and control of the bishop, and residual control still vested in the bishop.

There was little difference, Lord Justice Ward said, between the bishop's control over the priest, and a health trust's control over a surgeon. Neither was told how to do his job, but both could be told how not to do it.

He said that there was an organisation called the Roman Catholic Church, with the Pope in the head office. It had regional offices, with their appointed bishops; and local branches - the parishes - with their appointed priests. That looked like a business, and operated like a business, he said. Its objective was to spread the word of God, and the priest had a central part to play in that.

The position of the parish priest was integrated into the organisational structure of the Church's enterprise, and was part of that organisation, Lord Justice Ward said, "not only accessory to it". The conclusion was that Fr Baldwin was more like an employee than an independent contractor. He was in a relationship with the bishop which was so akin to employer and employee as to make it just and fair to impose vicarious liability.

Lord Justice Tomlinson disagreed with Lord Justice Ward. He ruled that the trust could not be vicariously liable. He said that it was contrived and unconvincing to say that Fr Baldwin, in ministering to the children in the home, was carrying out the purposes for which the bishop had appointed him as parish priest.

The third member of the court, Lord Justice Davis, ruled that the trust was vicariously liable, and said that the important fact was that JGE was resident at the home as a parishioner, and Fr Baldwin's understood responsibilities as parish priest were designed to extend to ministering to those parishioners resident in the home.

The court refused permission to appeal to the Supreme Court, because it might be preferable to wait until the case had been fully fought on the factual issues.