Published on 18/05/2007

Vicarious Liability

One person is held liable for a tort committed by another person.
Always Strict Liability

Categories of Vicarious Liability:

• Employer and servants
• Employer and Independent contractors
• Principal and agent

Vicarious liability makes D (usually the master/employer) liable for the torts of another (usually his or her servant/employee) although the master is without any blame or fault.

Justification for Vicarious Liability of Employers

• Desirability of providing a solvent defendant
• Servant being generally unlikely to be worth suing
• Capacity of master to absorb the cost of liability as part of the cost of the enterprise
• Justness of the conclusion that profit-making enterprises should be made to compensate for losses inflicted by the enterprise on third parties, where those losses are caused by persons within the enterprise
• Deterrent to encourage employers to institute proper safety standards within the enterprise

Who is a Servant?

A servant is one who is under a contract of service to another, an independent contractor is under a contract for services.

The contractor is paid for the job by results rather than for time spent, receives a fee or commission, the servant receives wages. The contractor is usually employed on a casual basis, the servant on a permanent basis.

The contractor usually specifies his/her work schedule and supplies his/her own tools.

The master may select the servant for the task.

Stevens v Brodribb Sawmilling (1986) - confirmed the existence of two tests to distinguish the servant from the independent contractors. The control test and the integration into the enterprise; the control test having priority.

Integration Test – whether the employee is ‘part and parcel’ of the organisation: Stevenson v Macdonald [1952]

The Control Test – used to determine the type of relationship involved, therefore establishing whether vicarious liability will apply.

Mason J in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) pointed out that the control test was based on the right to control the activities of the employee.

The court looks more to the practice of the parties rather than the contract itself.

If the Master controls what the employee does and how it is done, then the employee is a servant. The relationship will give rise to Vicarious Liability.

Zuijs v Wirth Bros: The case of the trapeze artist

What is essential is whether there is lawful authority to command or give directives if there is scope for it: Stevens v Brodribb Sawmilling Co Pty Ltd (1986)

WHO IS A SERVANT? THE CONTROL TEST

If the Master controls what the employee does and how it is done, then the employee is a servant. The relationship will give rise to Vicarious Liability.

Zuijs v Wirths Bros Circus - Held by the High Court to be a worker because of an application of the control test.

The Facts: Zuijs was a acrobat for the circus and was injured during his employment. The Issue: Was Zuijs an employee or independent contractor under a control test?
The Decision: The factors that were taken into consideration were the obligation of the acrobat to dress as directed, attend rehearsals and participate in the grand parade. Otherwise there was little opportunity for the acrobat to be controlled in doing his work and the work was highly skilled

The finding meant that the worker received compensation for and injury he received.

Stevens & Gray v Brodribb Sawmill - Plantiff were held to be an independent contractor due to the implementation of the control test.

The Facts: Stevens and Gray were engaged by the sawmill, as bulldozer and truck drivers. Each owned there own vehicle and worked in the bush loading and transporting logs for the sawmill. They serviced and supply fuel for their own vehicles and were paid on the basis of the volume of logs transported. The Sawmill did not deduct tax form their payments. One was injured and claimed compensation as employee.
Held: Courts held that they were not employees but rather independent contractors due to the control test, as the degree of control was minimal. Also, the matters regarding the following were taken into consideration for the control test:

§ P had their won equipment.
§ Set own working hours
§ Paid by volume of workload
§ No guarantee of work
§ No tax deduction from pay.
§ Grey had delegated work

In the Course of Employment

Commonwealth v Connell (1986): The defendant is liable only if the servant committed the tort in the course of his or her employment.

The question asked is: Was the employee doing what he or she was employed to do?

Century Insurance Co Ltd v Northern Ireland Transport Board [1942] shows that a breach of an express prohibition by the servant will not place the servant automatically outside the course of employment.

Limpus v London General Omnibus Co (1862) - racing a bus against another bus in the course of its service operations contrary to the master’s instructions has been held to be within the course of employment.

Ilkiw v Samuels [1963] - Diplock J stated that it was a prohibition on the mode of carrying out the job; that is, a prohibition against conduct ‘within the sphere of employment’. Employer was therefore liable for the negligence of the servant in entrusting the driving of a truck to an unqualified driver.

• ‘Frolic’ of servant’s own

Actions of the employee were not ‘reasonably incidental’ to their duties. Hilton v Thomas Burton [1961]: workers finished work early and had an accident on their way to a café.

• Temporal limits of employment

Period of employment begins from the moment the servant starts work. Ruddiman & Co v Smith (1889): leaving on of taps in a washroom by a servant who had completed his working day was found to be in the course of employment.

• Assault by servant

An excessive mode of performing his or her duty to the employer. Deatons Pty Ltd v Flew (1949): barmaid who flung a glass towards a customer was a private act of retaliatory self-defence. Her actions were not connected with, or within the scope of, her duties of maintaining the bar.

Deatons v. Flew (1949)

The Facts: Here a barmaid who had been verbally and physically assaulted by a drunken customer threw a glass of beer in his face. The glass slipped and blinded the customer in one eye. The customer sued the hotel owner for damages.
The Decision: The High Court held that the barmaid was the agent of the hotel owner only for the purpose of serving customers but not for the purpose of defending herself against assault and accordingly the hotel owner was not liable.

• Dishonesty by servant

Must be some nexus between the dishonest act of the servant and the circumstances of the employment for the employer to be liable. Morris v Martin & Sons Ltd [1966]: employer liable as the stole was stolen by the servant in the course of employment. The servant’s duty being to clean the stole.

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Employer and Independent Contractors

The independent contractor is regarded as the principal, therefore the employer not liable for works carried out by the contractor.

Circumstances where an employer may be liable for an independent contractor:

• Employer has authorised the contractor to commit the tort;
• Employer negligent in the choice of the contractor;
• Employer negligent in the instructions given to the contractor; and
• Employer may have committed through the contractor a tort of strict liability.

The courts have chosen to rationalise the liability of an employer on the basis of the employer’s breach through the contractor of a non-delegable duty of care binding the employer: Burnie Port Authority v General Jones Pty Ltd (1994)

Non-delegable duty of care

Vicarious liability arises in circumstances “when the law holds one person responsible for the misconduct of another, although he is himself free from blameworthiness or fault” (Fleming J, Law of Torts (9th edition) at 409)

Non-delegable duty arises in circumstances where a person cannot be excused from liability even if reasonable care is exercised in entrusting responsibility to another person.

Civil Liability Act:
5Q Liability based on non-delegable duty

• The extent of liability in tort of a person ("the defendant") for breach of a non-delegable duty to ensure that reasonable care is taken by a person in the carrying out of any work or task delegated or otherwise entrusted to the person by the defendant is to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work or task.

• This section applies to an action in tort whether or not it is an action in negligence, despite anything to the contrary in section 5A.

Non-delegable duty of care arises in protective relationships such as:

• Master and servant;
• School authority and principal;
• Hospital and patient;
• Occupier and lawful visitor or contractual entrant;
• Rylands v Fletcher situations and
• Bailees and sub-bailees.

Employer is not liable for collateral or casual negligence of contractor in carrying out work.

Ellis v Wallsend District Hospital (1989) – hospital not liable for the negligence of the servant as he had been privately consulted by the patient and the hospital had merely lent its facilities and support staff to carry out the operation.

Albrighton v Royal Prince Alfred Hospital (1980) – hospital was liable as the patient went directly to the hospital for advice and treatment.

Principal and agent

Generally, vicarious liability does not apply to the principal and agent relationship.

It can however, become be established where the principal appoints an agent to represent him or her in dealings with third parties.

The test used is narrower than that of the course of employment. Only arises in relation to acts done with reference to carrying out their authority. Arises in relation to statements or representations made by the agent.

Burnie Port Authority v General Jones Pty Ltd (1994)

P suffered damage when a large quantity of its frozen vegetables was ruined by a fire which destroyed D’s building where the vegetables were stored. At the time of the fire, D’s building was being extended with the construction of further cold storage facilities. That building work had introduced hazardous substances to the site. Welding works on the site then ignited the substances, causing the blaze. The Supreme Court of Tasmania found D’s liability lay in accordance with the Rylands v Fletcher rule. On appeal by D:

HELD, dismissing the appeal: D, having allowed its independent contractor to introduce dangerous substances to the site, owed a non-delegable duty of care to P to ensure that its contractor took reasonable steps to prevent the occurrence of a fire. The breach of that duty of care attracted liability under the ordinary principle of negligence. “The rule in Rylands v Fletcher, with all its difficulties, uncertainties, qualifications and expectations, should now be seen, for the purposes of the common law of this country, as absorbed by the principles of ordinary negligence. Under those principles, a person who takes advantage of his or her control of premises to introduce a dangerous substance, to carry on a dangerous activity, or to allow another to do one of those things, owes a duty of reasonable care to avoid a reasonably foreseeable risk of injury or damage to the person or property of another”.

Rylnds v Fletcher (1968)

D arranged for the construction of a water reservoir on its land for use in connection with its mill operation. Underneath the close of the land on which they proposed to construct the reservoir there was certain old and disused mining shafts and passages. The weight of the water in the reservoir broke through those shafts, passed down the passages and into the workings under nearby land owned by P and flooded P’s mine, causing considerable damage.

The judgment of the Court of the Exchequer Chamber delivered by Blackburn J: “We think that the true rule of law is that the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by shewing that the escape was owing to the plaintiff’s default; or perhaps that the escape was the consequence of vis major; or the act of God…”

HELD, (on appeal to the House of Lords): Their Lordships expressly approved the judgment of the Exchequer Chamber. Lord Cains went on to state: “…on the other hand if the defendants, not stopping at the natural use of their close, had desired to use it for any purpose which I may term a non-natural condition was not in or upon it, for the purpose of introducing water either above or below ground in quantities and in a manner not the result of any work or operation on or under the land…and if in consequence of any imperfection in the mode of their doing so, the water came to escape and to pass of into the close of the plaintiff, then it appears to me that which the defendants were doing they were doing at their own peril…”.