Ballarat's Catholic diocese has been found not liable for the sexual abuse of a young boy by one of its priests.
The High Court on Wednesday overturned on appeal a previous ruling by Victoria's Supreme Court that the diocese was liable.
The court found the relevant legislation did not provide a basis for imposing vicarious liability because the priest was not an employee of the church.
The diocese and its current bishop, Paul Bird, were sued by a man who said he was sexually assaulted by Father Bryan Coffey at his parents' home in Port Fairy in 1971 when he was five years old.
Coffey received a three-year suspended sentence in 1999 after being convicted of charges including indecent assaults of males and females under 16 and false imprisonment.
The man, known as DP in court documents, didn't tell anyone except for his partner about the assault until 2018.
He made a claim for more than $1.5 million for loss of earnings as a result of the assaults, a figure described by Justice Jack Forrest as "bold".