Ipsofactoj.com: International Cases [2003] Part 4 Case 10 [CFA]


COURT OF FINAL APPEAL, HKSAR

Coram

Ming An Insurance Co (HK) Ltd

- vs -

The Ritz-Carlton Ltd

MR JUSTICE BOKHARY PJ

MR JUSTICE CHAN PJ

MR JUSTICE LITTON NPJ

MR JUSTICE MORTIMER NPJ

LORD COOKE OF THORNDON NPJ

4 DECEMBER 2002


Judgment

Mr Justice Bokhary PJ

INTRODUCTION

  1. This case takes us to the core of the doctrine of vicarious liability. It concerns the true test of when an employer is vicariously liable for his employee's tort committed during an unauthorised course of conduct. The circumstances of the case are as follow.

  2. Sometime between 9.30 and 10.00 on the night of 9 March 1998, a Mercedes Benz saloon car was travelling along Queensway in the direction of Wanchai. Suddenly the car went out of control, mounted the pavement and struck two pedestrians. They were seriously injured. The car was being driven by Mr Lo Sin Tak. He was a doorman of a nearby hotel, The Ritz-Carlton. But the car did not belong to his employer, The Ritz-Carlton Ltd, which operated the hotel. Rather it was a limousine belonging to Parklane Limousines Services Ltd. Limousines and their chauffeurs were hired from this limousine service company by the hotel company. This was done by the hotel company in order to provide a chauffeur-driven limousine service for its hotel guests.

  3. It is not in dispute that Mr Lo sometimes drove these limousines in the course of his employment with the hotel company. These limousines were parked in the hotel forecourt. If it was in the way of other vehicles, the limousine had to be moved. And if its chauffeur happened to be off-duty at the time, the limousine would be moved by an hotel employee acting as what has been called a "car jockey". Moving a limousine sometimes involved driving it out of the forecourt and along a number of roads before returning it to the forecourt. Sometimes this involved using a scavenger lane and simply driving around the block. If the scavenger lane was blocked, a longer route would be taken. The longer route included driving along Queensway in the direction of Wanchai. Driving along that road in that direction happens to be what Mr Lo was doing when the accident happened.

  4. Mr Lo sometimes acted as a "car jockey". But the courts below concurrently found as a fact that he was not acting as a "car jockey" at the time of the accident. It appears that the hotel staff, or some of them, did not much care for the food served at the hotel canteen. Moreover the canteen closed early in the evening. So there developed a practice whereby, when time was available, hotel staff would leave the hotel premises to collect food bought from elsewhere and bring such food back to the hotel for themselves and their colleagues.

  5. Hotel staff sometimes collected food while out on an errand for the hotel. At other times they left the hotel for the specific purpose of collecting food. On some occasions they did this by taxi. On other occasions they did this by limousine, having succeeded in persuading the chauffeur to drive them to collect food. But there is no evidence that prior to the incident giving rise to the present case, any member of the hotel's staff had ever driven a limousine to collect food.

  6. As to what happened on the night of the accident, the courts concurrently found the following facts. A bellboy was going out to collect food. The chauffeur of the limousine later involved in the accident had gone off-duty, leaving the keys with Mr Lo. The limousine was parked in the hotel forecourt. Mr Lo drove the bellboy in the limousine to collect food. That is what he was doing when the accident happened.

  7. It is no longer in dispute that Mr Lo is liable to the injured pedestrians in the tort of negligence. The only question is whether his employer, the hotel company, is vicariously liable to them for his negligent driving.

  8. At the trial, Mr Lo took no interest in the proceedings. In those circumstances, The Ming An Insurance Co. (HK) Ltd was, on its own application, joined as a defendant. This was because Ming An is the "insurer concerned" under the Motor Insurers Bureau ("MIB") scheme. If the hotel company is not vicariously liable, its own insurers would not be responsible to satisfy the injured pedestrians' judgments against the apparently impecunious Mr Lo, who would then be an uninsured driver. And Ming An, as the insurer concerned, would then have to shoulder that responsibility. The fact that the contest is between two insurers is irrelevant in itself. But the fact that the injured pedestrians' judgments will not be empty whichever way the appeal is decided could be seen as having the advantage of eliminating any fear on anyone's part that a hard case might make bad law.

  9. Seagroatt J held that the hotel company is not vicariously liable. So he entered judgment for the injured pedestrians against Mr Lo but not against the hotel company. The Court of Appeal (Rogers VP and Woo and Le Pichon JJA) upheld his decision. As I have explained, Ming An would have to satisfy the injured pedestrians' judgments against Mr Lo if, as the courts below concluded, the hotel company is not vicariously liable. By leave of the Court of Appeal, Ming An appeals to us against that conclusion.

    REASONING OF THE COURTS BELOW

  10. In holding that Mr Lo "was acting outside the scope of his employment", Seagroatt J gave this reason: "He had no authority to drive off one of the hired courtesy cars in the existing circumstances". The Court of Appeal upheld Seagroatt J's decision, taking the view that driving a limousine for any purpose other than as a "car jockey" was beyond the scope of Mr Lo's employment.

    THE PURPOSE OF THE JOURNEY

  11. Ming An submits that the hotel company would be vicariously liable for Mr Lo's negligent driving even if the purpose of the journey was to collect food. But Ming An submits that, in any event, Seagroatt J was not entitled to find that the journey had been made for that purpose. This is because, Ming An submits, there were gaps in the evidence and a number of matters which were material to the question of the journey's purpose but on which Seagroatt J had omitted to make findings of fact. Be that as it may, the finding that the journey had been made for the purpose of collecting food is a concurrent finding of the courts below. As explained in Sky Heart Ltd v Lee Hysan Co. Ltd (1997-98) 1 HKCFAR 318 at pp 333F-338B, this Court will not review concurrent findings of fact save in very special circumstances.

  12. The concurrent finding which Ming An attacks is not a finding reached in the absence of evidence. There was evidence that the limousine was not blocking any vehicle. That, coupled with the bellboy's presence in the limousine, suggested that Mr Lo was not driving as a "car jockey" on this occasion. And that in turn left a viable basis for inferring, in all the circumstances, that the journey had probably been made for the purpose of collecting food. After Mr Michael Thomas SC for Ming An had outlined his argument on this part of the appeal, we indicated at the hearing that the appeal had to proceed on the footing that the collection of food had been the journey's purpose. And the appeal then proceeded accordingly.

    TEST FOR VICARIOUS LIABILITY

  13. The doctrine of vicarious liability, by which employers are in certain circumstances held liable for torts committed by their employees, was developed by the judges for the purpose of providing the victims of tort with recourse against persons who have the means to satisfy awards and on whom it would be just to fix liability to do so. This purpose is the doctrine's raison d'Ítre. But what about the doctrine's content? This brings us to the test for determining when employers are liable for torts committed by their employees.

  14. For a long time, the English courts applied ? and the Hong Kong courts following suit likewise applied ? the test commonly called the Salmond test. This is the test first formulated in Salmond: The Law of Torts, 1st ed. (1907) at p.83 and still to be found in Salmond & Heuston on the Law of Torts, 21st ed. (1996) at p.443. The Salmond test operates thus. Employers are liable for torts committed by their employees in the course of their employment. And an employee's tort is deemed to have been committed in the course of his employment if it is either

    1. something authorised by his employer or

    2. an unauthorised mode of doing something authorised by his employer.

  15. The "unauthorised mode" limb of the Salmond test can give rise to difficulty. And in Lister v Hesley Hall Ltd [2002] 1 AC 215 the House of Lords adopted a new test. Under this new test, the question is whether the employee's tort was so closely connected with his employment that it would be fair and just to hold his employer vicariously liable. Lister's case was one in which the warden of a boarding house attached to a school had sexually abused pupils residing in the boarding house. At p.230C Lord Steyn said:

    The question is whether the warden's torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable.

    At p.237G Lord Clyde spoke of "a sufficient connection between the acts of abuse which [the warden] committed and the work which he had been employed to do". Lord Hutton (as one sees at p.238B) simply agreed with Lord Steyn's speech. At p.245G Lord Millett said: "What is critical is that attention should be directed to the closeness of the connection between the employee's duties and his wrongdoing and not to verbal formulae". That makes a majority for the "close connection" test.

  16. By speaking of a majority formed by Lords Steyn, Clyde, Hutton and Millett, I am not implying that Lord Hobhouse of Woodborough, who reached the same result, did so for reasons irreconcilable with the "close connection" test. Lord Hobhouse of Woodborough proceeded (as one sees at p.242A-B) on the basis that "the fundamental criterion .... is the comparison of the duties respectively owed by the servant to the plaintiff and to his employers". But he concluded his speech (as one sees at p.243B) by allowing the appeals for not only the reasons which he gave but also those given by Lord Steyn. This does not suggest to me that Lord Hobhouse of Woodborough felt unable to reconcile his fundamental criterion with the "close connection" test.

  17. The "close connection" test is in substance the test pioneered by the Supreme Court of Canada in Bazley v Curry (1999) 174 DLR (4th) 45 and Jacobi v Griffiths (1999) 174 DLR (4th) 71. The application of the Salmond test by the English Court of Appeal in Trotman v North Yorkshire County Council [1999] LGR 584 led to what I respectfully regard as an unsatisfactory result. And Trotman's case was not favoured by the Supreme Court of Canada in Bazley and Jacobi's cases, and was overruled by the House of Lords in Lister's case. But I am disposed to believe that in at least most of the past cases the application of the "close connection" criterion would not have led to results different from the ones reached by applying the "mode" criterion of the Salmond test. Indeed, I notice that the learned editor of Winfield & Jolowicz on Tort, 16th ed. (2002) takes the view (as one sees at p.720, para. 20.14) that the description in Lister's case of the "unauthorised mode" limb of the Salmond test as simplistic is harsh. And he suggests (ibid.) that the facts of Lister's case could be accommodated "within the traditional test as it had been applied to matters like fraud and theft".

  18. Nevertheless I do not find the "unauthorised mode" limb of the Salmond test easy to understand unless one has the benefit of Sir John Salmond's explanation cited by Lord Steyn in Lister's case at pp 223H-224A. This explanation, with the emphasis supplied by Lord Steyn, is that "a master ... is liable even for acts which he has not authorised, provided they are so connected with acts which he has authorised, that they may rightly be regarded as modes ? although improper modes ? of doing them". With such emphasis, this explanation is, as Lord Steyn observed at p.224B, the "germ" of the "close connection" test.

  19. By " close connection" is meant a connection between the employee's unauthorised tortious act and his employment which is so close as to make it fair and just to hold his employer vicariously liable. I consider close connection to be an intellectually satisfying and practical criterion for vicarious liability. It imposes vicarious liability when, but only when, it would be fair and just to do so. And it provides a workable concept, namely a sufficiently close connection, for determining in each case whether doing so would be fair and just. The case before us is of negligent driving by an employee. Bazley, Jacobi and Lister's cases, on the other hand, involved employees who betrayed the trust reposed in them by their employers. The employees in those cases sexually abused children at institutions which their employers operated. Trotman's case was similar, involving the sexual abuse of a pupil by a deputy headmaster during a school trip abroad. Does this mean that close connection is a criterion suitable only to cases like Trotman, Bazley, Jacobi and Lister's cases?

  20. In answering this question, I begin by noting that the basic test for vicarious liability has never varied according to whether the employee's tort involved mere inadvertence or something worse.

  21. Secondly, I note that the cases discussed in the speeches in Lister's case are by no means confined to cases of intentional wrongdoing. Certainly cases of vicarious liability for fraud (Lloyd v Grace, Smith & Co. [1912] AC 716), theft (Morris v CW Martin & Sons Ltd [1966] 1 QB 716) and misfeasance in public office (Racz v Home Office [1994] 2 AC 45) are discussed. But so are cases of vicarious liability for negligence such as Canadian Pacific Railway Co. v Lockhart [1942] AC 591, Ilkiw v Samuels [1963] 1 WLR 991, Williams v A&W Hemphill Ltd 1966 SC(HL) 31 and Rose v Plenty [1976] 1 WLR 141.

  22. Thirdly, it is nowhere stated in the speeches in Lister's case that different tests for vicarious liability are to be applied depending on whether mere inadvertence or intentional wrongdoing is involved. To the contrary, Lord Clyde said this at pp 236G-237A:

    Cases which concern sexual harassment or sexual abuse committed by an employee should be approached in the same way as any other case where questions of vicarious liability arises. I can see no reason for putting them into any special category of their own.

    [Emphasis supplied]

    It is also of significance that in adopting the "close connection" test in Lister's case, Lord Steyn was influenced not only by Bazley and Jacobi's cases but also by (as one sees at pp 226E-227D) what Scarman LJ (later Lord Scarman) said in a negligence case, namely Rose's case. And earlier in his speech Lord Steyn had said (at p.225E) that although William's case was one of negligence, the reasoning behind Lord Pearce's analysis of the position there threw light on the problem under consideration in Lister's case.

  23. Fourthly, there is this point. Until the House of Lords decided Lloyd's case in 1912, it was thought that there could be no vicarious liability unless the employee acted, or at least intended to act, for the employer's benefit. As Lord Wilberforce observed when delivering the Privy Council's advice in Kooragang Investment Pty Ltd v Richardson & Wrench Ltd [1982] AC 462 at p.472G: "it took the decision of the House of Lords in [Lloyd's case] to dispel the suggestion that there was no liability of the employer for frauds or wrongs committed for the benefit of the employee". This makes it unlikely that Sir John Salmond had betrayal of trust by employees in mind when he explained in 1907 that the alternative limb of his test covered unauthorised acts "so connected" with authorised acts as to be modes ? although improper modes ? of doing them. Yet it is in this explanation that Lord Steyn found the seed from which the "close connection" test has grown. So it would be odd if the "close connection" criterion were now confined to cases which Sir John Salmond is unlikely to have had in mind when he planted that seed. The intentional wrongdoing cases did the most to expose the limitations of the Salmond test, and they were the ones which inspired a new test. But that does not mean that the inadvertence cases should be denied the benefit of this new insight.

  24. Fifthly and finally, the "close connection" criterion impresses me as inherently just and fair for all cases of tort committed by an employee while engaged in an act not authorised by his employer. It would be odd if the employer ever escaped vicarious liability even though there was ? or were ever fixed with vicarious liability even though there was not ? so close a connection between the employee's tort and his employment as to make it fair and just to hold the employer vicariously liable. The concept is a simple one which ought not to be complicated by reading other requirements into it as a matter of law. Delivering the judgment of the Supreme Court of Canada in Bazley's case, McLachlin J (now the Chief Justice of Canada) laid down a number of principles which the courts should be guided by in determining whether an employer is vicariously liable for an employee's unauthorised, intentional wrong in cases where precedent is inconclusive. The first of these principles is that the courts should openly confront the question of whether liability should lie against the employer, rather than obscuring the decision beneath semantic discussions of 'scope of employment' and 'mode of conduct'." The "close connection" test confronts that question in that way. There is no conclusive precedent to the contrary. And inadvertence cases, just as much as intentional wrongdoing cases, must not be obscured beneath semantics.

  25. For all the foregoing reasons, I regard close connection as the basic criterion for vicarious liability in regard to all torts committed by an employee during an unauthorised course of conduct, whether intentional wrongdoing or mere inadventence is involved. This is not to say that this criterion is to be treated like a statutory formula. Its application is always to be undertaken in context. I dare say that the requisite connection will prove in practice to be more readily found in certain types of case than in others. But the basic criterion having been applied, the disposal of each case will always turn ultimately on its own facts and the particular considerations which they raise. This is saying no more than what Lord Eldon LC famously intervened to observe in the course of the argument in Gee v Pritchard (1818) 2 Swans. 402 at p.414; 36 ER 670 at p.674, namely that doctrines ought to lay down "fixed principles" while "taking care that they are to be applied according to the circumstances of each case".

    APPLYING THE "CLOSE CONNECTION" CRITERION

  26. Seagroatt J's decision was given before, but the Court of Appeal's decision was given after, the House of Lords decided Lister's case. The Court of Appeal accepted that the present case was covered by Lister's case. And it took the view that Seagroatt J had in effect applied the "close connection" test. But one sees from Seagroatt J's judgment that he, having concluded that Mr Lo "had no authority to drive off one of the courtesy cars in the existing circumstances", felt that it was therefore "unnecessary to consider the law in detail". Nor, it would seem, did he feel it necessary to consider any other facts in detail or, indeed, at all. He seems to have focused exclusively on the question of authority. In his own judgment, Rogers VP, with whom the other members of the Court of Appeal agreed, said that the "use of the car to drive a bellboy to buy food was equally outside the acts which [Mr Lo] had been employed to do, as if he took the car for a joy-ride to the New Territories". This leaves out of account the practice of collecting food from outside the hotel, which is what Ming An relies on for its argument on close connection. The issue of close connection is therefore at large, and it becomes this Court's duty to apply the "close connection" criterion to the material circumstances of this case.

  27. Nowadays the concept of employment is not a narrow one, and it must be viewed broadly when applying the "close connection" criterion. As Lord Clyde said in Lister's case at p.234D, "in considering the scope of the employment a broad approach should be adopted". In regard to vicarious liability, the nature of the employment is not to be ascertained merely by attempting to tabulate the employee's duties. It is necessary to stand back to see how the employer's activities were actually carried out and how that exposed the public to the risk of tortious harm caused by the employee.

  28. On this occasion a "car jockey" was driving a limousine for the purpose of collecting food. And it would appear that "car-jockeys" were not authorised to drive limousines for that purpose. But the fact remains that, albeit for a different purpose, "car jockeys" routinely drove limousines in the course of their employment ? even, as it happens, along the route where the accident occurred. And it is also a fact that, albeit while driven by their chauffeurs rather than "car jockeys", limousines were sometimes used for the purpose of collecting food.

  29. Precisely how the practice of collecting food was operated is unknown to the Court. I doubt that it was entirely clear to the hotel company's staff. My impression is that it was an evolving practice which had a grey area. But the practice existed. And the important thing is that collecting food was a purpose not only of the hotel's staff but also of the hotel company itself. For it was obviously in the business interests of the hotel company that its staff be adequately fed despite the inadequacy of its canteen. Indeed ? although I do not consider it necessary to come to a conclusion on it ? the hotel company may well have been under a duty to provide its staff with a reasonable opportunity to obtain acceptable sustenance. However that may be, I think that under the then prevailing practice, collecting food was properly to be regarded as incidental to the employment of the hotel staff involved. All things considered, I am satisfied that Mr Lo's tort was so closely connected with his employment that it would be fair and just to hold the hotel company vicariously liable.

  30. In addition to the facts which I have just mentioned, there are other facts relied upon by Ming An. These include the fact that Mr Lo was in uniform during the journey in question, the fact that the accident happened during his working hours and the fact that he had set out from his place of employment. I do not consider these additional facts as important as the other facts which I have mentioned. But if it were necessary, these additional facts, too, could be deployed in support of the conclusion that Mr Lo's tort was so closely connected with his employment that it would be fair and just to hold the hotel company vicariously liable. Their tendency is towards that conclusion.

    RESULT

  31. In the result, what Seagroatt J ordered in favour of the injured pedestrians will stand. In addition, I would allow this appeal to order that what Seagroatt J ordered in favour of the injured pedestrians will be ordered against the hotel company too. The order for legal aid taxation of the injured pedestrians' own costs will stand. I would award Ming An costs against the hotel company here and in the courts below.

    Mr Justice Chan PJ

  32. I agree with the judgment of Mr Justice Bokhary PJ.

    Mr Justice Litton NPJ

  33. I agree with Mr Justice Bokhary PJ's judgment.

  34. The application of the close connection test in Lister v Hesley Hall Ltd [2002] 1 AC 215 to the facts of a particular case is a matter of degree. As this Court is differing from the unanimous judgment of the Court of Appeal on such a matter, I will add a few words of my own.

  35. As stated in Winfield and Jolowicz on Tort 16th ed. (2002) at para.20.9 the underlying idea is that the injury done by the servant must involve a risk sufficiently inherent in or characteristic of the employer's business that it is just to make the employer bear the loss.

  36. Here the servant Mr Lo Sin Tak was employed as a doorman at the hotel. The expression "doorman" is not self-explanatory and the scope of his everyday work has not been clearly defined in the material before the court. There is no suggestion in the evidence, or in the findings of the courts below, that it was confined to the moving of cars to and from the hotel forecourt. The nature of his work was wider and more ambiguous. The evidence indicates that from time to time "hotel staff" would have gone out in a limousine - driven by one of Parklane Limousine Service's drivers - to get food for a "night snack", not only for himself but also for the "forecourt staff". This might well have included Mr Lo. When this happened, the baggage master Mr Wilson Leung Tat-kei, who had some authority over Mr Lo, would, as likely as not, have shared in the food. Hence, there grew up the practice, impliedly authorized, of collecting food from outside the hotel. This, as Mr Justice Bokhary PJ has explained in his judgment, was a purpose not only of the hotel's staff but of the hotel as well, for it was obviously in the interests of the hotel that the "forecourt staff" should be adequately fed during the night shift. Then there is this fact, that Mr Lo had, quite legitimately, access to the keys for the limousines left on the forecourt : They might even have been left in his actual custody. The course of his work as a doorman was such that he was required to drive the limousines from time to time, to make space in the forecourt, so no questions would have been raised when he drove a limousine out of the forecourt onto the public roads : which he regularly did : an act necessarily involving some risk to other road users. Once this point is reached, the closeness between the Mr Lo's work as a doorman and his reckless driving which caused the injuries to the pedestrians becomes apparent.

  37. The trial judge found that he was "in a hurry to complete his journey" and if he had been on a "legitimate journey" there would not have been the need for the "extreme haste" as described by the independent witness. This was in effect a finding by the trial judge that, at the time of the accident, he was engaged upon an "illegitimate" act : and the only such act consistent with the evidence was that found expressly by the Court of Appeal : that Mr Lo was driving the limousine, accompanied by the bell-boy Mr Kwok Sze-lun as his passenger, on his way to get food for a night-snack. Assuming that this was a prohibited act - as it undoubtedly was, since he was only authorized to drive the limousine for the purpose of parking - does this take the case outside the ambit of the principles set out in Lister's case? The answer to this question lies in the court's approach : Does the court take a broad approach to the nature of the employment or is the court's focus essentially upon the employees' duties at the time of the tortious act? This is a question of law.

  38. As Mr Michael Thomas SC, counsel for The Ming An Insurance Co. (HK) Ltd submitted, this branch of the law has been in a state of evolution for some time, and the tendency has been toward more liberal protection of innocent third parties : see Lord Wilberforce in Kooragang Investment Pty Ltd v Richardson & Wrench Ltd [1982] AC 462 at 471 H and in particular at 472 A where Lord Wilberforce said:

    At the same time recognition has been given by the law to the movement which has taken place from a relationship - akin to that of slavery - in which all actions of the servant were dictated by the master, to one in which the servant claimed and was given some liberty of action.

  39. In answering the question "does the prohibition limit the sphere of employment or does it only deal with conduct within the sphere of employment" under the old Salmond test, Diplock LJ (as he then was) said in Ilkiw v Samuels [1963] 1 WLR 991 at 1004 that the matter must be looked at broadly; the court should not "dissect the servant's task into its component activities". It can be said that the twin cases in the Supreme Court of Canada, Bazley v Curry (1999) 174 DLR (4th) 45 and Jacobi v Griffiths (1999) 174 DLR (4th) 71, and Lister's case itself, have pushed this broad approach even wider.

  40. Looked at in this light, it can be seen that Rogers VP in the present case took a somewhat narrow approach when he said:

    .... [Mr Lo's] employment gave him the opportunity to obtain the keys and make use of the car for his own private purposes. The use of the car to drive a bell-boy to buy food was equally outside the acts which he had been employed to do, as if he took the car for a joy-ride in the New Territories.

    Likewise Woo JA when he said:

    [Mr Lo] was employed and certainly authorised to drive the Parklane cars to avoid obstruction, and apart from that limited purpose, he was not allowed to drive those cars at all. He might be permitted to go outside the hotel to buy food, but that was not a duty within his employment. At the material time, he was not driving for the hotel's business or purposes or performing any part of his duties towards the hotel or towards the hotel guests that the hotel had entrusted upon him to perform.

  41. This, in the light of the two Canadian cases and Lister's case, is taking too narrow a view of the nature of Mr Lo's employment.

  42. That having been said, I confess to having considerable sympathy for the Court of Appeal's views in the present case, for if one focused simply upon Mr Lo's duties at the time of the accident, it is difficult to conclude that he was, in using the limousine to get food, acting in discharge of those duties. In the course of counsel's arguments during the hearing I found my mind wavering several times on this vital point. This case, in my judgment, lies at the borderline of cases where the law imposes vicarious liability on the employer. It may well be right, as Mr Bleach SC, counsel for the hotel has argued, that the close connection test is not new but rather a development of the old Salmond test, since the "germ" of the close connection test, as Lord Steyn observed at 224B in Lister's case, is to be found in the Salmond test itself: that "a master ... is liable even for acts which he has not authorized, provided they are so connected with acts which he has authorized, that they may rightly be regarded as modes - although improper modes - of doing them". Hence, in seeking an answer to the question "Is the servant's wrongful act so closely connected with his employment that it would be fair and just to hold the employer vicariously liable?" it must be remembered that the issue is not free standing, and matters such as the servant's duties at the time when the tort occurred, whether he was acting in the interests of the employer or solely for himself, et cetera, are still relevant. And, casting one's eyes a little wider, the court should also have regard to the business activities of the employer broadly speaking and ask if the risk which gave rise to the damage (here the servant's reckless driving of someone else's limousine) was created by those activities : If they were, that was a risk which the employer could have insured against. Balancing these various factors I have, in the end, come firmly to the view that this appeal should be allowed. I concur in the orders proposed by Mr Justice Bokhary PJ.

    Mr Justice Mortimer NPJ

  43. I also would allow this appeal for the reasons given by Mr Justice Bokhary PJ. I add a few observations on my own approach, particularly as we differ from the Court of Appeal.

  44. The submissions of counsel have focused upon Lister v Hesley Hall Ltd (HL(E)) [2002] 1 AC 215. This important decision was not available to Mr Justice Seagroatt at first instance but had been reported before the proceedings in the Court of Appeal. The House of Lords articulated for the first time the "close connection" test for examining the circumstances in which an employer ought to be held vicariously liable for his employee's unauthorized tortious acts.

  45. I agree with Mr Justice Bokhary PJ's summary of the test. In order to satisfy the test a plaintiff must show that the employee's tortious act was so closely connected with his employment that it is just and fair to hold the employer vicariously liable.

  46. In reaching their conclusions in Lister's case Lord Steyn (with whom Lord Hutton agreed) and Lord Millett acknowledge the assistance they derive from the judgments of the Canadian Supreme Court in Bazley v Curry 174 DLR (4th) 45 and Jacobi v Griffiths 174 DLR (4th) 71 in which the test was enunciated. It is to be noted however that each member of the Committee reaches his conclusion that the close connection test is correct by "employing the traditional methodology of English law", as Lord Steyn puts it at p.230 C. Each finds its origin in the passage in Sir John Salmond (Salmond, Law of Torts, 1st ed (1907)) at pp.83-84:

    But a master, as opposed to the employer of an independent contractor, is liable even for acts which he has not authorized, provided they are so connected with acts which he has authorized, that they may rightly be regarded as modes - although improper modes - of doing them.

    He then supports and develops the test by tracing the authorities up to the present day.

  47. The test is particularly apt in cases such as Lister where the employee has committed tortious acts which are also serious criminal acts, but it is of general application. As a guide to its application, however, Lord Steyn warns of the necessity to avoid "the pitfalls of terminology". Lord Millett is of like view at p.245G:

    But the precise terminology is not critical. The Salmond test, in either formulation, is not a statutory definition of the circumstances which give rise to liability, but a guide to the principled application of the law to diverse factual situations. What is critical is that attention should be directed to the closeness of the connection between the employee's duties and his wrongdoing and not to verbal formulae.

  48. With these caveats in mind it is useful to note how Lord Steyn applies the test at 230 B-D:

    Employing the traditional methodology of English law, I am satisfied that in the case of the appeals under consideration the evidence showed that the employers entrusted the care of the children in Axeholme House to the warden. The question is whether the warden's torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable. On the facts of the case the answer is yes. After all, the sexual abuse was inextricably interwoven with the carrying out by the warden of his duties in Axeholme House.

    Lord Hobhouse notes at 241 F:

    Whether or not some act comes within the scope of the servant's employment depends upon an identification of what duty the servant was employed by his employer to perform.

    So previous authority is not overruled. Their Lordships explain and develop the common law in this field. The consequence is that nearly all previously reported cases would be decided the same way. Among the few exceptions is perhaps Crook v Derbyshire Stone Ltd [1956] 1 WLR 432 but, for my part, I doubt whether this case was correctly decided.

  49. I mention the traditional approach of their Lordships in Lister with the passage in Lord Steyn's speech where he refers to the two Canadian Supreme Court decisions at 230B in mind:

    Wherever such problems are considered in future in the common law world these judgments will be the starting point.

    This should not be taken as an invitation to judges and counsel to dwell upon the examination of policy in those cases. This cannot have been the intention. It is a reference to the high value of these judgments in advancing thought on the underlying policy and jurisprudence of vicarious liability. This is not in doubt and will be the subject of much valuable academic comment and analysis in the future. Lister's case and the judgments in the instant appeal are appropriate starting points in this jurisdiction.

  50. Even in the detailed consideration undertaken in Lister's case Lord Steyn at 230B finds it "unnecessary to express views on the full range of policy considerations examined in those decisions". Lord Clyde is more specific at 237B:

    The careful and comprehensive discussion of the problem by McLachlin J was presented in the context of policy considerations, but the essence of the decision seems to me to lie in the recognition of the existence of a sufficient connection between the acts of the employee and the employment. This in turn was explored by reference to various factors by reference to which the strength of the connection can be established .... These two decisions seem to be consistent with the traditional approach recognized in this country.

    Lord Hobhouse (who agreed with the reasons of Lord Steyn) takes an even more positive view which I think appropriate. He approaches Bazley's case in this way at 242 B-D:

    The second limb of the classic Salmond test is a convenient rule of thumb which provides the answer in very many cases but does not represent the fundamental criterion which is the comparison of the duties respectively owed by the servant to the plaintiff and to his employer. Similarly, I do not believe that it is appropriate to follow the lead given by the Supreme Court of Canada in Bazley v Curry 174 DLR (4th) 45. The judgments contain a useful and impressive discussion of the social and economic reasons for having a principle of vicarious liability as part of the law of tort which extends to embrace acts of child abuse. But an exposition of the policy reasons for a rule (or even a description) is not the same as defining the criteria for its application. Legal rules have to have a greater degree of clarity and definition than is provided by simply explaining the reasons for the existence of the rule and the social need for it, instructive though that may be. In English law that clarity is provided by the application of the criterion to which I have referred derived from the English authorities.

  51. I turn to the instant case. The application of the "close connection" test involves a consideration of two matters. The first is whether it is established that at the time of the negligent driving Mr Lo was acting within the scope of his employment (however this concept is expressed). The second is whether his negligent driving was so closely connected with his employment as to be "fair and just" to hold his employer, the Hotel, vicariously liable.

  52. The real issue for our consideration is whether it is shown that he was acting within the scope of his employment when driving the car at the time of the accident. If so, the close connection between his employment and the negligent driving is so obvious that it is clearly fair and just to hold the hotel vicariously liable.

  53. But the decision whether Mr Lo was acting within the scope of his employment when he was driving the car is not easy. This is demonstrated by the division of judicial opinion upon the facts which were found. However the speeches in Lister's case and the authorities cited therein are of great assistance. First, the "pitfalls of terminology" must be avoided. Particular descriptions applied to Mr Lo's employment or duties may not be helpful but Diplock LJ's judgment in Ilkiw v Samuels [1963] 1 WLR 991 at 1004 (approved by each of their Lordships in Lister) provides valuable guidance:

    .... the matter must be looked at broadly, not dissecting the servant's task into its component activities - such as driving, loading, sheeting and the like - by asking : what was the job on which he was engaged for his employer? and answering that question as a jury would.

  54. Lord Clyde expresses a similar view at p.234D:

    .... in considering the scope of the employment a broad approach should be adopted,

  55. As a doorman, Mr Lo was required to act as a "car-jockey". At times, this involved taking the limousine which he was driving at the time of the accident along the same route. At the relevant time the keys of limousine were in his custody and he could decide when it was necessary for the vehicle to be moved and driven.

  56. When he moved the car to drive it on the occasion of the accident it was not causing an obstruction. There was no necessity to move it but he drove it taking a bell-boy on an errand to collect food. There is no evidence that a bell-boy had been driven for this purpose by a "car-jockey" before, but there was a practice of staff going out to collect food driven by the chauffeurs of the limousines when they were on duty. The practice of going out for food was known to the management. It was not disapproved and undoubtedly was, in part, for the employer's benefit.

  57. It remains a matter of degree. It was Mr Lo's duty to drive the limousine along the route taken when it was necessary to move it. He had the keys and it was his duty to move and drive the vehicle when it was necessary to do so. It was not "necessary" for him to move the car on this occasion but he was driving along the same route with the bell-boy to collect food : an activity known to the employer and not disapproved. Relevant, but not decisive, the collection of food was in the employer's interest. The combination of circumstances was new but the activity was the same, he was in uniform and it was within his working hours. The inherent risk that he would drive the vehicle in these circumstances is apparent. (See Lord Millett's consideration of the facts in Lister at 250D.)

  58. Answering Diplock LJ's question as a jury would and considering the matter broadly, the driving was part of the job on which Mr Lo was engaged for his employer. On these special facts I would hold that Mr Lo was acting within his authority and within the scope of his employment when he drove negligently. The vicarious liability of the Hotel is established.

    Lord Cooke of Thorndon NPJ

  59. I agree with the judgment of Mr Justice Bokhary PJ.

    Mr Justice Bokhary PJ

  60. The Court is unanimous. What Seagroatt J ordered in favour of the injured pedestrians will stand. In addition, the appeal is allowed to order that what Seagroatt J ordered in favour of the injured pedestrians will be ordered against the hotel company too. The order for legal aid taxation of the injured pedestrians' own costs will stand. Ming An is awarded costs against the hotel company here and in the courts below.


Cases

Sky Heart Ltd v Lee Hysan Co. Ltd (1997-98) 1 HKCFAR 318; Lister v Hesley Hall Ltd [2002] 1 AC 215; Bazley v Curry (1999) 174 DLR (4th) 45; Jacobi v Griffiths (1999) 174 DLR (4th) 71; Trotman v North Yorkshire County Council [1999] LGR 584; Lloyd v Grace, Smith & Co. [1912] AC 716; Morris v CW Martin & Sons Ltd [1966] 1 QB 716; Racz v Home Office [1994] 2 AC 45; Canadian Pacific Railway Co. v Lockhart [1942] AC 591; Ilkiw v Samuels [1963] 1 WLR 991; Williams v A & W Hemphill Ltd 1966 SC(HL) 31; Rose v Plenty [1976] 1 WLR 141; Kooragang Investment Pty Ltd v Richardson & Wrench Ltd [1982] AC 462; Gee v Pritchard (1818) 2 Swans. 402; Crook v Derbyshire Stone Ltd [1956] 1 WLR 432 

Authors and other references

Salmond: The Law of Torts, 1st ed. (1907)

Salmond & Heuston on the Law of Torts, 21st ed. (1996) 

Winfield and Jolowicz on Tort 16th ed. (2002) 

Representations

Mr Michael Thomas SC & Mr Godfrey Lam for the appellant, Ming An (instructed by Messrs Ip Kwan & Co.)

Mr John Bleach SC, Mr Mohan Bhawarney and Ms Roxanne Ismail for the respondent, the hotel company (instructed by Messrs Fairbairn, Catley, Low & Kong)


all rights reserved