COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NEWCASTLE UPON TYNE COUNTY COURT
HH JUDGE WALTON
Strand, London, WC2A 2LL
B e f o r e :
THE RT HON LORD JUSTICE RIX
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Lord Justice May:
The Mersey Docks case
(a) the burden of showing that responsibility does not remain with the general employer is on the general employer and is a heavy one (Lord Simon at 10, Lord MacMillan at 13, Lord Uthwatt at 21).
(b) by whom is the negligent employee engaged? Who pays him? Who has power to dismiss him (Lord Simon at 10)? In the present case the answer to these questions is the general employer – the third defendants.
(c) who has the immediate direction and control of the relevant work (Lord Simon at 10, Lord Porter at 16)? Who is entitled to tell the employee the way in which he is to do the work upon which he is engaged (Lord Porter at 16, Lord Uthwatt at 23)? "The proper test is whether or not the hirer had authority to control the manner of execution of the act in question. Given the existence of that authority its exercise or non-exercise on the occasion of the doing the act is irrelevant" (Lord Uthwatt at 23).
(d) the inquiry should concentrate on the relevant negligent act, and then ask whose responsibility it was to prevent it. (Lord Simon at 10,11). In the Mersey Docks case, the stevedores had no responsibility for the way in which the crane driver drove his crane, and it was this which caused the accident (Lord Simon at 12, Lord MacMillan at 13, Lord Simonds at 18). The ultimate question may be, not what specific orders or whether any specific orders were given, but who is entitled to give the orders as to how the work should be done (Lord Porter at 17).
(e) a transfer of services can only be effected with the employee's consent (Lord Porter at 15, Lord Uthwatt at 21).
(f) responsibility should lie with the master in whose act some degree of fault, though remote, may be found (Lord Simonds at 18).
(1) consent by the employee to a transfer of his employment is an important, perhaps necessary, factor, absent in this case. The judge correctly found that Mr Hall did not have a transfer of employment in mind. Mr Hall regarded himself as entitled to decide who should be sent to work on the site. Darren Strang did not consider that his employment was transferred. His services were often provided for short periods. It was unreal to suggest that he was bounced in and out of temporary employments.
(2) the second defendants did not have control over the manner in which Darren Strang carried out his work, it being a necessary precondition of the transfer of employment that the temporary employer should have entire and absolute control. Darren worked principally under the control and supervision of Mr Megson, who was in effect his immediate boss. He had been sent by Mr Megson to obtain the fittings.
(1) the most important question is who had the right to control Darren Strang's method of working at the particular time. That is a question of fact and inference. On the facts of this case, where there was no question of the employee being in charge of complicated machinery - as of the crane in the Mersey Docks case. You do not need exceptional circumstances. You simply have to look at the facts and answer the question as to control.
(2) the contract was for the provision of labour only.
(3) Mr Megson and Darren Strang worked under the supervision of Mr Horsley. Workmen were not allowed to work in the roof void except under his supervision. He was in charge of all work in the roof void. He told the workman what to do.
(4) the third defendants had no say in the manner in which Darren Strang was used once he was on the site.
(5) the charge made by the third defendants to the second defendants did not include for supervision. Darren Strang was basically a labourer.
(6) Mr Horsley gave introductory instruction to temporary workmen about methods of working, including safety. The temporary workmen did the same job as the second defendants own workmen. Their tasks were basically simple.
(7) Mr Horsley was the person who obtained and signed the relevant permit to work. He was the person who was responsible for site safety.
(8) Mr Horsley was as a matter of fact in charge of the relevant workmen, including Mr Megson and Darren Strang. He was supervising them when the accident happened.
The judge's decision
"While Mr Horsley did instruct Mr Strang to perform tasks from time to time, Strang was under the immediate control of his fitter and there is no instance in evidence of Mr Horsley giving an instruction as to the manner the fitter or the fitter's mate should work. Yes, he told them what required doing, but he himself worked at another location and left Mr Megson and Mr Strang to get on with the task of fitting the ducting sections together. When he went over to see them it was to see how they were doing and to lend a hand if necessary."
The judge held that Mr Horsley was not in entire and absolute control of Darren Strang. He concluded that Darren's employment was not transferred. He also accepted that Mr Horsley was not himself negligent. Of this he said at page 10:
"It was not put to him that he was careless in failing to supervise Strang to an appropriate standard, and had that been done I have no doubt he would have repeated what, in effect, he had already said, that Mr Strang had been sent on a straightforward task, that he had not shown any inclination to take a route through the ductwork and that he, Horsley, had no reason to anticipate he would do that in circumstances where it was not really necessary."
The parties' initial cases
The possibility of dual vicarious liability
"The temporary employer can then no doubt tell the labourer how he is to do the job. The labourer becomes so much part of the organisation to which he is seconded that the temporary employer is responsible for him and to him." (page 444)
Lord Denning then applied the principles to the facts and said:
"These results are achieved in law by holding that Clegg became for the time being the temporary servant for Le Grands. There is no harm in thus describing him so long as it is remembered that it is a device designed to cast liability on the temporary employer. The real basis of the liability is, however, simply this: if a temporary employer has the right to control the manner in which a labourer does his work, so as to be able to tell him the right way or the wrong way to do it, then he should be responsible when he does it in the wrong way as well as the right way. The right of control carries with it the burden of responsibility."
Is there authority binding this court?
"He is the servant of one or the other, but not the servant of one and the other; the law does not recognise a several liability in two principals who are unconnected."
One reason for this was that to allow two principals to be severally liable would tend to a multiplicity of actions, an objection which modern procedure does not find unduly troublesome. Professor Atiyah points out that at this time the courts were generally reluctant ever to admit that two parties might both be liable for the same damage in tort, unless they were joint participants in the tort. Things have moved on since then. It was accepted before us that technically these remarks of Littledale J were dicta, not part of the ratio, and the point does not feature in any other recorded judgment in the case.
"For some purposes, no doubt, the man was the servant of the defendants. Probably, if he had let the crane get out of order by his neglect, and in consequence anyone was injured thereby, the defendants might be liable; but the accident in this case did not happen from that cause, but from the manner of working the crane. The man was bound to work the crane according to the orders and under the entire and absolute control of Jones & Co."
Bowen LJ said at page 634 that the court only had to consider in whose employment the man was at the time the acts complained of were done, in the sense that by the employer is meant the person who has a right at the moment to control the doing of the act. The question was whether the defendants had parted with the power of controlling the operation on which the man was engaged.
"It has also been argued that Wand was the servant both of Jones and Co. and the defendants. In one sense, he was; he was the general servant of the defendants, and at a particular moment he was the servant of Jones and Co.; he was the servant of both at the same moment, but not with regard to the same acts of service. As to the mode of working the crane he was under the sole control of Jones and Co., and he was therefore not the servant of the defendants as regards that working of the crane, whatever he might be as regards other matters. The defendants are clearly not liable for the negligence of Wand, both on principle and on authority, and I think this appeal should be dismissed."
Lindley LJ is reported as saying at the end of his judgment:
"As to the alleged joint responsibility of the defendants and Jones and Co., I think the answer may be found in the words of Littledale J in Laugher v Pointer (5 B & C 558)."
Lindley LJ then cites the passage to which I have referred earlier in this judgment.
(a) the passages relied on did not find their way into the Official Reports. Whoever edited them out – perhaps the judges themselves – cannot have regarded them as necessary to the decision, nor worth reporting.
(b) the passage in Lord Esher's Law Times judgment did not refer to nor adopt Littledale J's dicta, but decided the point argued on the facts.
(c) the passage in Lindley LJ's Law Times judgment decided a subsidiary issue not necessary to the court's decision.
(d) Donovan v Laing scarcely survived the critical examination of it in the Mersey Docks case.
"My Lords, nothing that has been said on behalf of Hall Russell persuades me that the rationale of the line of authority to which I have referred was wrong or that there is any exception to the general application of section 15 of the Act of 1913 to damage suffered by a ship under pilotage. Subject only to what I have to say in the context of Hall Russell's second submission, the pilot is to be considered for all purposes the servant of the owner. I would only add that if Hall Russell's argument were correct there would follow the curious result that the doctrine of respondent superior would apply to two different masters in respect of two different claims of damage arising out of a single act of negligence. It is a well recognised principle, exemplified in cases involving crane drivers, that a servant in the general employment of A may, for a particular purpose, be treated as in the pro hac vice employment of B. However, there is no principle which permits a servant to be in the de jure employment of two separate masters at one and the same time."
This passage, at first blush, might be read as an authoritative restatement of Littledale J's dicta. But it has to be read in the context of the argument which it was addressing. That is to be found at page 755H as follows:
"Hall Russell advanced two reasons for their contention that they had relevantly averred vicarious responsibility on the part of [the pilotage authority] for the negligence of the pilot. In the first place it was said that although earlier authorities had appeared to impose liability on a shipowner for the negligence of a voluntary pilot on the basis of a master and servant relationship this rationale was no longer correct. The true position was that the shipowner owned a non-delegable duty to third parties to have his ship navigated carefully and that he could not discharge that duty by delegating it to an independent contractor in the shape of a pilot. When section 15(1) was looked at against that background there was nothing in it which altered the common law position obtaining between the ship-owner and pilot which remained that of employer and independent contractor. It followed that quoad the ship-owner the pilot remained the servant of [the pilotage authority]."
Thus it was argued that the shipowner would be liable to third parties for the pilot's negligence, but that the pilot's general employer could still be liable to the shipowner for the same negligence of the same pilot. The pilot would be the employee of the shipowner in the first instance, but the employee of the general employer in the second. That is not the present case, which is concerned with a single original liability, not two. Nor is it concerned exclusively with Darren Strang's de jure employment, rather than who had the right to control, and theoretically prevent, his relevant negligent act.
"If [the inspector] had interfered when the accident happened by directing the driver of the cart what to do, the case would be different, but he did no more than point out the streets to be watered."
"The rule to be derived from Mersey Docks and [McDonald v The Commonwealth  46 SR(NSW) 129] is not that two persons cannot be vicariously liable for the same damage or that an employee cannot be the servant of two masters, but that two employers of the same servant who negligently causes damage will not both be liable for the damage if one rather than the other has what Jordan C.J. called "the relevant control"."
See also Deutz Australia Pty Limited v Skilled Engineering Limited  VSC 194, a decision of Ashby J in the Supreme Court of Victoria, at paragraph 105. Ashby J observed at paragraph 106 that Brennan J had dissented in Oceanic Crest in the result. But he did not consider that that in any way diminished his analysis of the ratio of the cases to which he referred.
"It has been settled law since Laugher v Pointer and Reedie v London and North Western Railway Co. [4 Ex. 244 at 257] that law does not recognise a several liability in two principals who are unconnected; if they are jointly liable you may sue either, but you cannot have two separately liable. This doctrine is one of general application, irrespective of the nature of the employment."
"The only question over which there is any dispute is the question of control. Control itself is to some extent the justification for imposing liability, for if the master can control the servant as to the manner in which he shall do his work and the servant does it in such a way as to cause damage then it is natural to think that the master should be responsible.
I can find no case in Canada or England which would indicate that both the general employer and the particular employer or hirer can be liable for the negligence of the same servant arising out of a single occurrence. It must be one or the other. In the present case we are dealing with control in the operation of this tractor-trailer on the highway."
There is thus an explicit reassertion of Littledale J's dicta, but without reference to them and without explanation.
Conclusion on liability
"… any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise)."
The relevant vicarious liability is liability to the claimants. If each of the second and third defendants are vicariously liable to the claimants, they are each severally liable in respect of the same damage, so that, in my judgment, contribution is available to each of them under the section. This does not affect the antecedent question whether each may be vicariously liable by virtue of their dual control. But it does afford a fair distribution of the liability between each of them.
Lord Justice Rix :
"The ordinary mode of using a crane for loading a ship is well known…How far the crane is to be swung, and how much the chain is lowered, depends on what part of the ship the goods are to be placed in, and every act in connection with the working of the crane must be done according to the orders of those who are directing the loading…For some purposes, no doubt, the man was the servant of the defendants. Probably, if he had let the crane get out of order by his neglect, and in consequence anyone was injured thereby, the defendants might be liable; but the accident in this case did not happen from that cause, but from the manner of working the crane. The man was bound to work the crane according to the orders and under the entire and absolute control of Jones & Co."
"We have only to consider in whose employment the man was at the time when the acts complained of were done, in this sense, that by the employer is meant the person who has a right at the moment to control the doing of the act."
"Much of the difficulty which surrounds the subject arises out of the nineteenth century conception that a servant of a general employer may be transferred to a temporary employer so as to become for the time being the servant of the temporary employer. That conception is a very useful device to put liability on the shoulders of the one who should properly bear it, but it does not affect the contract of service itself. No contract of service can be transferred from one employer to another without the servant's consent…The supposed transfer is nothing more than a device – a very convenient and just device, mark you – to put liability on the temporary employer; and even this device has in recent years been very much restricted in its operation. It only applies when the servant is transferred so completely that the temporary employer has the right to dictate, not only what the servant is to do, but also how he is to do it: see Mersey Docks…The labourer becomes so much part of the orgnization to which he is seconded that the temporary employer is responsible for him and to him.
Applying these principles to the facts found by the arbitrator, I have myself no doubt that if a third person had been injured by the negligence of Clegg [the employee] in the course of his work, then Le Grands [the temporary employer] and not Eastwoods [the general employer] would have been liable to the third person…These results are achieved in law by holding that [the employee] became for the time being the temporary servant of Le Grands. There is no harm in thus describing him so long as it is remembered that it is a device designed to cast liability on the temporary employer. The real basis of the liability is, however, simply this: if a temporary employer has the right to control the manner in which a labourer does his work, so as to be able to tell him the right way to do it, then he should be responsible when he does it in the wrong way as well as in the right way. The right of control carries with it the burden of responsibility…"
"There is a clearly marked distinction between the transfer of a servant on the one hand and the transfer of only his services on the other…It is true, as Denning L.J. has pointed out, that for some purposes Le Grands undoubtedly assumed the obligations and liabilities of a master in relation to Clegg; for example they would have been answerable to a third party who was injured as a result of Clegg's negligence while working for them. This consideration does not, however, in my opinion affect the real issue in this case, which is whether Clegg at the time of his death was a person under a contract of service with Le Grands…"
"I would only add that if Hall Russell's argument were correct there would follow the curious result that the doctrine of respondeat superior would apply to two different masters in respect of damage arising out of a single act of negligence. It is a well recognised principle, exemplified in cases involving crane drivers, that a servant in the general employment of A may, for a particular purpose, be treated as in the pro hac vice employment of B. However, there is no principle which permits a servant to be in the de jure employment of two separate masters at one and the same time."
"1(1) …any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
2(1)…the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question."