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…”.