Torts 70311 Vicarious Liability and Non-Delegable Duties PDF

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Session 12: Vicarious Liability and Non-Delegable DutiesIntroduction ● In tort law, it is possible for persons to be held liable for damage even where they themselves are not at fault ○ Vicarious liability ■ Holds an individual liable for the wrongdoing of another ■ Strict liability because a defend...

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Session 12: Vicarious Liability and Non-Delegable Duties

Introduction ● In tort law, it is possible for persons to be held liable for damage even where they themselves are not at fault ○ Vicarious liability ■ Holds an individual liable for the wrongdoing of another ■ Strict liability because a defendant is held directly liable for another’s tortious conduct ○ Non-delegable duty of care ■ Where a defendant is not able to delegate a duty to take care of somebody else ■ The breach of duty is owed by the defendant and the defendant is personally liable for the breach (ot liable for someone else’s breach but that a duty of care is taken)

Vicarious Liability ● Exists at common law and in legislation ● Legislation in all Austraian states and territories imposes vicarious liability on the partners of a firm who are made jointly and severally liable for damage caused by another partner in the ordinary course of business at the firm ● Two principal areas where vicarious liability is imposed ○ Between an employer and an employee ○ Between a principal and agent ● For vicarious liability to arise, there must be ○ A relationship of employment or agency b etween the defendant and the wrongdoer ○ The tort must occur during the course of the employment or agency relationship ● S 3C of the Civil Liability Act ○ “Any provision of this act that excludes or limits the civil liability of a person for a tort also operates to exclude or limit the vicarious liability of another person for that tort” ● Employee and employer ○ Hollis v Vabu ■ Vicarious liability allows a plaintiff access to a defendant with the capacity to pay damages and it renders an employer liable for the acts of an employee carried out during the course of their employment so it ensures that persons in control of workplaces modify or correct tortious behaviour ○ Both employee and employer may be jointly and severally liable- depending on the legislative regime which operates to either include or exclude liability (confirmed in NSW v Ibbett)

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Two main elements ■ There must be an employment relationship ■ The negligent conduct must occur during the course of employment Must be a relationship of employment ■ Relationship is up to court to determine ■ Important distinction between the relationship of employer and employee and that between an ‘employer’ and an independent contractor (used to encompass relationships that are not employment relationships but rather involving contractual arrangements with sub-contractors or consultants) ■ If an independent contractor commits a tort, the other contracting party will not be vicariously liable ■ Control test was used previously (where employer had a sufficient degree of control) but workplace becomes more sophisticated, there is less scope for control ● Courts developed a more flexible approach using ‘scope for control’ by the employer as one of several indicators of an employment relationship ○ Scope for control by employer ○ The description of the position in any written or verbal contract ○ The right to suspend or dismiss ○ The right to dictate the place of work, hours of work ○ Whether tools are supplied and maintained by the employer (to establish employer from independent contractor) ○ The right to the exclusive services of the person engaged ○ Whether work may be freely sub-contracted to someone else ○ Mode of remuneration ○ What forms of tax/ super are paid and by whom are they paid ■ No single test to determine whether an employment relationship existsStevens v Sawmilling Co Pty Ltd ● Court rejected control test and took into account various factors to characterise the relationship ■ Hollis v Vabu ● HC applied ‘various indicia’ approach, but ultimately did ot impose a general test to termine an employment relationship but rather took an approach that integrated various indicia as follows ○ The nature of engagement documents and work practices ○ That the couriers were ‘amanations of Vabu ○ That Vabu exercised considerable control over the couriers, giving them little independence in the conduct of their work

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That Vabu superintended the finances and the leave arrangements of couriers ○ That the couriers were not running their own business, nor were they freelancers ○ The capital investment by the couriers in their equipment was not significant ○ He couriers were not providing skilled labour ■ Hollis approach was applied by the HC in Sweeney v Boylan Nominees Pty Ltd with a different outcome ● HC held that Boylan Nominees were no vicariously liable for the sub-standard maintenance work performed by a refrigeration mechanic retained by Boylan because he was an independent contractor rather than an employee ● HC followed Vabu and found that the mechanic who had ‘fixed’ the door was an independent contractor and not the employee of Boyland as he conducted his own business and supplied his own tools and invoiced Boyland for each separate repair job ● HC found Boylan liable for grounds of agency, applying Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia Ltd- where the HC had found a principal liable for their ‘representatives’- to the relationship between Boyland and the independent contractor ○ Found that the independent contractor was advancing the economic interests of the principal and thus constituted the principal’s representative Akin to employment relationships ■ Essential question is not ‘does an employment relationship exist?’ but ‘who should bear the risk of any loss?’ ■ Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis ● Left open the question of ‘whether a priest in the Roman Catholic Church who is appointed to a parish is an employee… in a relationship apt to generate vicarious liability in his superior?’ During the course of employment ■ The question as to whether the act of an employee is within the course, scope or sphere of employment is often difficult to determine ■ Prince Alfred College Incorporated v ADC ● HC recognised ‘that the identification of a general principle for vicarious liability has… eluded the common law for a long time’ ● Recognised that there is no general basis for the imposition of vicarious liability and refers to the methodology to be used ■ Century Insurance v Northern Ireland Road Transport Board // Phoenix Society Inc v Cavanagh ● Both cases to do with accidents caused by employees while on

the job The employers in these cases were liable because the employee’s acts were within the course of their employment. The employee in each case was employed to perform the task which resulted in damage ● To be within the course of employment and thus render an employer vicariously liable, the act of the employee must be a task that is part of their employment even though they might be carrying out the authorised task in an unauthorised way ■ If an employee’s act is outside the scope of employment then the employer will not be held vicariously liable, so where the tortious conduct of the employee is not sufficiently connected to the work the employee is employed to do, the employer will escape liability ● GO BACK AND DO THIS ● Passion and resentment ● Unconnected acts ● Employer prohibitions ● Limits of employer authorisation ● Criminal acts of employees Criminal acts by employees and the ‘relevant approach’ to vicarious liability ■ In several common law jurisdictions, vicarious liability has been imposed in cases of criminal child sexual abuse- school authorities have been held to be vicariously liable for the acts of their employees who cmmitted sexual assaults upon students ■ In Australia, the scope of employment has presented considerable difficulty for plaintiffs in claims against schools and other institutions with respect to vicarious liability for sexual assault ■ NSW v Lepore ● HC allowed an appeal by a school authority deciding that a school authority may be vicariously liable for sexual assault by a teacher on the basis of it being within the course of employment ■ Withyman v NSW ● Court rejected vicarious liability arising from a consensual sexual relationship between a teacher and a 17 year old student with an intellectual impairment ■ Erlich v Leifer ● Hedl that the sexual abuse of a pupil was a misuse of a psoition of power and intimacy by the headmistress in a closed and highly unusual school environment, where the headmistress had unique authority in the education of girls in their religious beliefs, lifestyle and everyday behaviour ■ Australian approach requires a court to consider any special role of the employee and whether it provides the occasion for wrongdoing because ●

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of the employee’s authority, power, trust, control and the ability to achieve intimacy with the victim ○ The indemnity principle ■ While an employer will be vicariously liable for acts of its employees which occur during the course of their employment, they may be able to recoup their loss through the indemnity principle ■ At common law, a term is implied into contracts of employment that an employee will exercise all reasonable care and skill during the course of employment ■ A negligent employee will breach this term- as a result, the employer who has been vicariously liable for the tort of an employee may seek an indemnity from the employee to make good the loss ■ In NSW, NT and SA, the employer’s right of indemnity has been removed by legislation and, instead, it ensures that the employer will indemnify the employee against liability ■ Further, if the compensation has been paid by the employer’s insurer, they may also seek to recoup their loss from the employer ■ Lister v Romford Ice & Cold Storage Co Ltd ● Court held that the son was liable to indemnify the employer and consequently the insurers. This right of insurers to enforce the employer's right of indemnity has been abolished by the Insurance Contracts Act 1984 (Cth), although the right remains where the employee’s act was one of serious or wilful misconduct Principal and agent ○ A principal is vicariously liable for torts committed by their agent ○ An agency relationship is a contractual agreement whereby the principal gives the agent authority to act or enter into agreements on behalf of the principal ○ An agency relationship is a contractual agreement whereby the principal gives the agent authority to act or enter into agreements on behalf of the principal ○ An agency may be for one specific transaction, such as buying or selling a house, or for more general ongoing purposes, such as an authority given on a continuing basis to manage business affairs ○ The concept of agency is vague but embodies the notion that when a person does something at the request and for the benefit of another person, they are acting as their agent ○ Sweeney v Boylan ■ HC held that vicarious liability for the acts of an agent “depends directly upon the identification of the independent contractor as the princiapl’s agent… and the recognition that the conduct of which complaint is made was conduct undertaken in the course of, and for the purpose of executing that agency ■ HC refused to extend vicarious liability based on agency where there was no legal agency in existence but rather a lesser arrangement whereby an independent contractor performed some services on behalf of another

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company Vicarious liability will apply where there is a relationship of principal and agent and when there is a sufficiently close connection between the principal’s business and the agent’s actions When an agent acts within the course of an agency, they are legally acting with the authority of the principal and so it follows that the principal should be vicariously liable for an agent’s act Vicarious liability may be imposed based on agency in the following additional two circumstances: ■ When the owner of a motor vehicle allows another person to drive it ■ When the principal holds out the agent as having authority to perform the act Car owner and car driver ■ Soblusky v Egan ● HC established that at common law, the owner of a car will be vicariously liable for the negligent acts or omissions of the driver of the vehicle- where that person is driving with the owner’s permission ● Court applied the principle that the owner of a car is liable for the negligent driving of that car by another by way of agency, if two elements are possible ○ A request by the owner that the driver use the vehicle ○ An interest by the owner in the purpose for which the vehicle is being driven ● Soblusky had purchased his interest in the car from Behrendorff Principals holds out agent ■ Where the principal holds the agent out to a third party as having authority to act, the principal may be liable for tortious acts committed by the agent ■ For vicarious liability to operate in this situation, the element of the principal holding out the authority of the agency must be present ● This is a narrower test than the ‘course of employment’ ● The principal will only be liable for the agent’s conduct for acts done with reference to carrying out that authority ■ Colonial Mutual Life Assurance Society v Producers and Citizens Cooperation Assurance Co of Australia ● A vicarious liability was imposed upon an insurance company which left to its agent the choice of conversation and argument to be used in soliciting business ● Court held that the agent was not acting independently in obtaining proposals and receiving premiums but was the rep of the company with respect to those actions ● The defendant had effectively authorised or held the agent out as being their rep and as being able to make defamatory statements

Non-delegable Duty ● Kondis v StateTransport Authority ○ A non-delegable duty of care is not simply a duty to take reasonable care- if it were a duty to take reasonable care, it could be delegated to a carefully selected and suitably qualified contractor- rather, a non-delegable duty of care is a duty to see that care is taken ○ Breach of a non-delegable duty of care is not a form of strict liability because it involves a personal duty by the defendant to ensure that care is taken ○ As the duty is personal and non-delegable, a court will not consider that a duty of care has been discharged by the defendant entrusting another person to perform that duty ○ Tasks may be delegated ut, if a non-delegable duty is not performed or performed negligently, then it is no defence to say that the duty was delegated to an appropriately qualified contractor or another person ● A non-delegable duty renders an employer, or other person owing an identified nondelegable duty of care, liable in situations where negligence is caused by an independent contractor even though vicarious liability will not apply ● A non-delegable duty may be viewed as an exception to the rule that an employer is not vicariously liable for the torts of independent contractors ● Because a non-delegable duty of care concerns liability in the tort of negligence, the HC held in NSW v Lepore that the non-delegable duty of care owed by a school to its pupils should not be extended to encompass liability for intentional conduct of an employee ● Civil Liability Legislation and non-delegable duty ○ Civil liability legislation in NSW and VIC requires that a breach of non-delegable duty be determined as if it were vicarious liability ○ The extent to which these provisions may alter the common law as to nondelegable duty of care remains to be seen, though to date the case law does not suggest any alteration of substance ● Common law non-delegable duties ○ Concepts of control and vulnerability are relevant to determine when and if a new non-delegable duty should be recognised ○ Kondis v StateTransport Authority ■ “The element in the relationship between the parties which generates a special responsibility or duty to see that care is taken may be found in one or more of several circumstances. Special duty arises because the person on whom it is imposed has undertaken the care, supervision or control of the person or property of another or is so placed in relation to that person or his property as to assume a particular responsibility for their safety, in circumstances where the person affected might reasonably expect that due care will be exercised ○ HC has recognised the existence of a non-delegable duty of care in several defined situations ● Hospital and Patient

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A hospital owes a non-delegable duty of care to its public patients In a hospital setting, where professional relationships are often difficult to characterise as employer-employee and where many medical specialists are independent contractor’s the hospital’s duty to public patients has been characterised as non-delegable ○ Ellis v Wallsend ■ A hospital is liable to its public patients for all those who provide services in its name, regardless of whether they are hospital employees or independent contractors ■ Court drew a distinction between a private patient who chooses and consults a specialist privately and a public patient who approaches the hospital for treatment and who is referred to a visiting specialist by the hospital School Authority and Pupil ○ Commonwealth v Introvigne ■ Established that a school authority owes a non-delegable duty to its pupils ■ However NSW v Lepore held that a school authority was not liable for the torts of teachers who sexually assaulted students at school ■ Courts held that schools were not liable for the breach of their nondelegable duties ■ The deliberate and intentional nature of the tortious acts by the teachers did not involve a failure to take reasonable care and the HC held that only a failure to take reasonable care will constitute a breach of non-delegable duty ■ The non-delegable duty of care owed by a school to its pupils can be breached where the school contracts with outside providers of swimming lessons, school camps and the like and those contractors fail to take reasonable care for the safety of the school’s pupils Occupier creating danger to neighbouring land users ○ Burnie Port Authority v General Jones ■ HC held that a dangerous use of land which damages a neighbour’s property will be subject to a non-delegable duty ■ Court recognised the relationship was one where the defendant had control of the premises while the relationship was one where the defendant was vulnerable to the defendant’s action- the relationship was the decisive factor in the imposition of the non-delegable duty of care Employer and employee ○ Kondis v State Transport ■ The employer has the exclusive responsibility for the safety of the applicane, the premises and the system of work to which he subjects his employees ad the judgement in relation to those matters. The consequences is that in these relevant respects the employee’s safety is in the hand of the employer; it is his responsibility. The employee can

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reasonably expect therefore that reasonable care and skill will be taken. In the ase of the employer there is no unfairness in imposing on him a non-delegable duty; it is reasonable that he should bear liability for the negligence of his independent contractors in devising a safe system of work. If he requires his employee to work according to an unsafe system he should bear the consequences No non-delegable duty between road authority and road users ○ Leichhardt Municipal Council v Montgomery ■ HC held that the council, a road authority, did not owe a non-delegable duty of care to road users ■ Court held that road authorities do not owe a non-delegable duty of care to a road user ■ There is a non-delegable existing duty where there is a special relationship of control and vulnerability ■ Generfally HC rejected the view that the non-delegable duty is an independent tort

Civil Liability Legislation: Vicarious Liability and Non-delegable Duty ● S 5Q of the Civil Liability Act 2002 (NSW) ○ Liability based on non-delegable duty ● Legislation is based on recommendation 43 of the IPP Report which states ‘liability for breach of a non-delegable duty shall be treated as equivalent in all ...