Victims of clerical sexual abuse will find it easier to bring compensation claims against the Catholic church after a judge ruled it can be held responsible for the wrongdoings of its priests.

In a test case heard at the high court, Mr Justice Macduff gave a decision in favour of a woman, known as JGE, who claims she was sexually assaulted by a Portsmouth priest at a children's home in Hampshire.

The judge said although there had been no formal contract between the church and the priest, the late Father Baldwin, there were "crucial features" that should be recognised.

He said: "He [Baldwin] was provided with the premises, the pulpit and the clerical robes. He was directed into the community with that full authority and was given free rein to act as a representative of the church. He had been trained and ordained for the purpose. He had immense power handed to him by the defendants [the trustees of the Roman Catholic diocesan trust]. It was they who appointed him to the position of trust, which (if the allegations be proved) he so abused."

It is the first time a court has ruled that the relationship between a Catholic priest and his bishop is akin to an employment relationship. It sets a precedent for similar cases, by providing further guidance for such trials in the future, while also putting the church in uncharted territory. The church has been granted extended leave to appeal the decision.

Lord Faulks QC, on behalf of the defendants, said the church was not seeking to evade responsibility for paedophile priests. "My clients take sexual abuse extremely seriously and are very concerned to eradicate and investigate it," he said. "This case has been brought as a point of law that has never been decided."

JGE told the Guardian she was pleased with the judgment but angry about the church getting leave to appeal. She said: "I'm fuming. I've had no support from the church whatsoever. Nobody has contacted me. They are ignoring victims. It feels like being on a rack, turning the screws tighter and tighter, over hot coals."

A victory for the the church would have meant it could avoid paying any compensation to victims of clerical sexual abuse.