Unable to breath, Aaron Schokman woke up and discovered his work colleague Sean Hewett standing over him.
They had earlier been drinking at the staff bar at a Whitsunday Islands resort off the Queensland coast.
Mr Schokman had gone to bed in their shared employee accommodation on Daydream Island but roommate Mr Hewett continued drinking.
Mr Schokman woke up "in complete distress" about 30 minutes after his colleague's 3am return.
Mr Hewett was standing over Mr Schokman's bed with his pants down.
"He was urinating on Mr Schokman who was inhaling the urine and choking," a High Court judgment said.
Mr Hewett, in a state of semi-consciousness, kept peeing on his roommate for a short period despite Mr Schokman yelling at him.
Mr Hewett later repeatedly apologised to his work colleague.
Mr Schokman took resort owners CCIG Investments Pty Ltd to court after suffering a cataplectic attack - sudden, brief muscle weakness triggered by distress - as a result of the November 2016 incident.
Queensland's Court of Appeal in March 2022 overturned a Supreme Court trial judge's decision and found the resort owners were "vicariously liable" as an employer, ordering a $431,738 payout to Mr Schokman.
However, the High Court allowed an appeal and on Wednesday ordered that the March 2022 ruling be set aside.
"The High Court held that the appellant (CCIG Investments Pty Ltd) was not liable for the actions of Mr Hewett," a judgment summary said.
The Court of Appeal in March 2022 overturned the Supreme Court judge's decision, relying on Mr Hewett's terms of employment to find the resort owners liable for the "tortious act".
Under the employee contract, Mr Hewett was required to live at the resort's staff accommodation.
"As Mr Hewett was obliged to occupy the room as an employee under his employment contract, not as a stranger, it followed that there was the requisite connection between his employment and his actions," the High Court summary said of the 2022 decision.
But the court found Mr Hewett's "wrongful act" was not done in the course or scope of employment.
"Nothing in the present case pointed to the drunken act of Mr Hewett being authorised, being in any way required by, or being incidental to, his employment," the judgment summary said.
"In truth, it had no real connection to it."
