England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM DARLINGTON COUNTY COURT.

		Royal Courts of Justice Strand London WC2A 2LL
		14 July 1998

LADY JUSTICE BUTLER-SLOSS:

1. The North Yorkshire County Council, (the Council) appeals to this Court from the decision of H.H. Judge Spittle in the Darlington County Court on the 12th August 1997 on a preliminary issue. The Council is the defendant in an action by the plaintiff, ST, suing by his mother in respect of allegations of sexual assaults on him by a Michael Stevens, deputy headmaster of the special school in which the plaintiff was a pupil, and an employee of the Council. The judge held that, on the facts pleaded by the plaintiff, the Council was capable of being vicariously liable for the assaults by the deputy headmaster.
2. The plaintiff, who is now 23, was born on the 3rd July 1974. He sustained a head injury as a child and thereafter suffered from epilepsy and mental handicap. He attended a special school in North Yorkshire, run by the Council from 1990. In May 1991, the school arranged a school trip to Spain which the plaintiff, aged 16, joined with eight other pupils and five members of staff, including the deputy headmaster. The plaintiff required nocturnal supervision since he suffered from fits and it was arranged that he would share a room with the deputy headmaster. Two months after his return to England, the plaintiff alleged that the deputy headmaster had sexually assaulted him in the bedroom during the school trip. A police investigation took place and on the 11th September 1992 the deputy headmaster was tried, convicted and sentenced to a term of imprisonment for seven counts of indecent assaults upon teenage boys, not involving the plaintiff.
3. The plaintiff alleged in the Particulars of Claim that the Council, through its employees, arranged the school trip to Spain and the plaintiff was in the sole control of the school staff; that he shared a bedroom with the deputy headmaster who indecently assaulted him on several nights during the holiday. The details of the abuse alleged was not pleaded but appears to be masturbation of the plaintiff by the deputy headmaster to the point of ejaculation. Paragraph 4 of the Particulars of Claim states:-

"The Defendants are vicariously responsible for the indecent assaults by Stevens upon the plaintiff by reason of the fact that such occurred whilst Stevens was so acting whilst carrying out his supervisory role as a school master in charge of the plaintiff and responsible for his care."

4. From the pleadings and the medical reports the effect of these assaults upon this vulnerable young man appears to have been very severe and also to have had a seriously adverse effect upon his mother. Since the acts took place in Spain, no application has been made to the Criminal Injuries Compensation Board. The deputy headmaster has not been sued and there is no allegation of negligence made against the Council. The claim is made on the sole basis of the vicarious liability of the Council for the acts of trespass by its employee. The Council denies the claim but for the purpose of the preliminary issue both before the judge and before this Court the allegations have been assumed to be correct.
5. The judge correctly directed himself as to the principles to be applied on vicarious liability. He relied upon the decision of the EAT in Bracebridge v Darby [1990] IRLR 3, (see infra), and held:-

"In this case the Deputy Head was not acting solely as a teacher but on this occasion was effectively in loco parentis in respect of the Plaintiff.

His responsibility was to care for and supervise the Plaintiff so as to ensure his health, safety and welfare.

That, if the allegations be true, he did not do in that he took upon himself to harm the boy by sexually assaulting him.

I am satisfied applying the general principles as set out in paragraph 5.21 of Clerk & Lindsell that the acts of the Deputy head were so connected with his authorised responsibilities that they can be regarded as modes, albeit improper modes, of performing his authorised duties."

I am satisfied that the Deputy Headmaster was vested with a discretion in the supervision of the Plaintiff and his acts were a wrongful exercise of that discretion."

6. The classic test for vicarious liability is to be found in Salmond on Torts, (now Salmond and Heuston, 21st Edition). The statement in the 9th edition at page 95 was expressly approved by the Privy Council in Canadian Pacific Railway Company v Lockhart [1942] AC 591 in the speech of Lord Thankerton at page 599:-

"It is clear that the master is responsible for acts actually authorised by him: for liability would exist in this case, even if the relation between the parties was merely one of agency, and not one of service at all. 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. In other words, a master is responsible not merely for what he authorizes his servant to do,but also for the way in which he does it......On the other hand, if the unauthorized and wrongful act of the servant is not so connected with the authorized act as to be a mode of doing it, but is an independent act, the master is not responsible: for in such a case, the servant is not acting in the course of his employment but has gone outside of it."

7. Mr Hawksworth QC on behalf of the plaintiff submitted to us and the judge found that the deputy headmaster owed a higher duty of care than usual in the circumstances of this case and the duty was that of a responsible parent and not solely as a teacher. That finding is irrelevant to the case against the Council, since the issue is whether the acts of sexual misconduct by the deputy headmaster were within or outside the scope of his employment. There is no criticism of the employment of the deputy headmaster by the Council and the pleaded case is solely a question of vicarious liability.
8. Salmond and Heuston, (21st ed at page 443) points out that the principle is easy to state but difficult to apply. The acts complained of in the present appeal were sexual assaults. The line of decisions which is, in my view, the most relevant to consider involved assaults by employees. Assaults which took place in carrying out an authorised act in an unauthorised manner include Dyer v Munday [1895] 1 QBD 742, where the manager of a furniture business went to the house and removed a piece of furniture on which there were unpaid hire purchase instalments. In doing so he assaulted the plaintiff who successfully sued his employers who were held liable for his acts. Lord Esher MR said at page 746:-

"The liability of the master does not rest merely on the question of authority, because the authority given is generally to do the master`s business rightly; but the law says that if, in course of carrying out his employment, the servant commits an excess beyond the scope of his authority, the master is liable."

9. In Poland v John Parr and Sons [1927] 1 KBD 236, a carter in the employment of the defendants reasonably believed that a boy walking beside his waggon with his hand on a bag of sugar was stealing some of it. He gave the boy a blow which caused the child to fall and be run over. This Court held that the carter had implied authority to make reasonable efforts to protect his employers` property and the violence was not so excessive so as to take his act outside the scope of his authority and the employers were held liable. In Vasey v Surrey Free Inns plc, (CA Transcript 5th May 1995), employees of the defendants` nightclub, two employed as doormen, pursued a group of young men, who had kicked in the door of the nightclub, into a public car park nearby and seriously assaulted the young man who had vandalised the door. Stuart-Smith LJ said at page 8 of the transcript:-

"In my judgment, all the evidence here, such as it is, shows that the conduct of the assailants was a reaction to the damage to the door. There is no evidence that it related to some private quarrel or incident which occurred subsequently to and unrelated to the performance of the employee`s duty......

The evidence of the plaintiff to which I have referred, makes it plain that they wished to teach a lesson to the person who had caused that damage. That was the sole purpose of the attack. It was, of course, an unlawful and unauthorised manner of carrying out the duty to which I have referred, but I have no doubt that such is what it was. They were not pursuing their own purpose."

10. On the other hand, liability was not established in Warren v Henlys Ltd [1948] 2 All E R 935, where a petrol pump attendant used violent language to a customer who tried to drive away without paying for his petrol. After paying the customer called the police and threatened to report the attendant to his employers. At that point the attendant assaulted the customer and injured him. Hilbery J held that the employers were not liable for the assault which was an act of personal vengeance and not done in the course of his employment. A decision which usefully illustrates acts falling on each side of the line is Daniels v Whetstone Entertainments [1962] 2 Lloyds Rep 1. A steward at a dance hall, employed to keep order, assaulted a customer inside the hall in the mistaken belief that he had previously been himself assaulted by the customer. Later outside the dance hall the steward in a rage made an unprovoked attack and injured the customer who was not intending to re-enter. The first assault was held to be within the scope of the steward`s employment, but the second assault was an act of private retaliation and outside that scope.
11. A number of cases demonstrate that the opportunity to act in the manner complained of does not of itself render the employer liable. In Heasmans v Clarity Cleaning Co Ltd [1987] IRLR 286, the defendants` employee, who was employed to clean the plaintiff`s telephones, ran up a large bill by using the telephone. Purchas LJ said at page 288:-

"... before the master can be held to be vicariously liable for the acts of the servant there must be established some nexus other than mere opportunity between the tortious or criminal act of the servant and the circumstances of his employment."

In Irving v Post Office [1987] IRLR 289, a postman wrote a racially offensive message on the back of an envelope addressed to neighbours which was held to be an unauthorised act of personal malevolence. Fox LJ said at page 291:-

"That was not the performance of any duty for which he was employed. His employment provided the opportunity for his misconduct, but the misconduct formed no part of the performance of his duties and was in no way directed to the performance of those duties.......

Save that it was done in working hours, it was unrelated to his duties."

In Makanjuola v Commissioner of Police for the Metropolis [1990] Admin L R 215, Henry J held that the demand for sexual favours by an off-duty policeman who gained entry through the misuse of his warrant card, as a result of which the female occupier submitted to a serious sexual assault, was not made in the course of his employment. Henry J said at page 252:-

"It was a demand for the negation rather than for the performance of police functions.......It was not any sort of exercise of a police officer`s discretion but a clear case of a private independent action, Mr McCarthy acting on a squalid adventure of his own."

12. The EAT decision in Bracebridge (supra) appears to have come to the opposite conclusion. Bracebridge was a case of sexual discrimination contrary to the Sex Discrimination Act 1975 section 6(2)(b). On appeal by the employers, the EAT, (Wood J, President), held that the industrial tribunal had correctly concluded that the acts perpetrated by the employees who were the chargehand and works manager were acts committed in the course of their employment since they were engaged in exercising, or in the course of exercising, a disciplinary and supervisory function.
13. In Jones v Tower Boot Co Ltd [1997] 2 All E R 406, a case of racial discrimination, Bracebridge was cited both to the EAT and to this Court. Waite LJ in his judgment at page 414 set out the competing arguments of counsel as to the applicability of the common law approach in vicarious liability to the statutory framework governing discrimination in the employment field. By section 32(1) of the Race Relations Act 1976 all actions by a person in the course of employment are attributed to the employer "whether or not ... done with the employer`s knowledge or approval." Mr Allen for the employee, had argued that under the Race Relations Act there was a greater range of remedies available than at common law and that there was a total absence from the concept of vicarious liability in tort of any provision corresponding to the reasonable steps defence under section 32(3). Waite LJ said at page 414:-

"I am persuaded that Mr Allen`s submission is to be preferred, and that there is here no sufficient similarity between the two contexts to justify, on a linguistic construction, the reading of the phrase `course of employment` as subject to the gloss imposed on it in the common law context of vicarious liability."

At page 416 he said in his conclusion:-

"It would be particularly wrong to allow racial harassment on the scale that was suffered by the complainant in this case at the hands of his workmates-treatment that was wounding both emotionally and physically-to slip through the net of employer responsibility by applying to it a common law principle evolved in another area of the law to deal with vicarious responsibility for wrongdoing of a wholly different kind. To do so would seriously undermine the statutory scheme of the Discrimination Acts and flout the purposes which they were passed to achieve."

14. Lord Johnston in a judgment in the EAT in Caledonia Motor Group Ltd v Reid (7 November 1996, transcript) explained Bracebridge as being decided in the context of section 6(2)(b) of the Sex Discrimination Act and not in the context of vicarious liability. In my judgment the principles governing industrial tribunals within the statutory framework of sexual and racial discrimination differ markedly from the common law principles of vicarious liability. Bracebridge is not therefore an authority upon which the plaintiff can rely in support of his claim in this case. The decision in Jones v Tower Boot Co Ltd was not however cited to Judge Spittle.
15. There is however another line of cases upon which Mr Hawksworth relies - the bailment cases. The House of Lords in Lloyd v Grace, Smith & Co [1912] AC 716 dispelled the suggestion in earlier decisions that, in order to establish a master`s liability for the fraud of his servant, it was necessary to establish that it was committed for his benefit. In Morris v Martin & Sons Ltd (supra) the plaintiff sent her mink stole to the furrier to be cleaned. He sent it on, with the consent of the plaintiff to the defendants, where it was stolen by one of their employees. This Court held that the defendants, as sub-bailees for reward, owed the plaintiff the duties of a bailee to take reasonable care of the fur. The defendants were not, therefore, protected by the exemption from liability clause and the plaintiff was able to sue them direct. Lord Denning MR traced the history of liability of the master for the dishonesty or fraud of his servant. At page 725 he said:-

"If you go through the cases on this difficult subject, you will find that, in the ultimate analysis, they depend on the nature of the duty owed by the master towards the person whose goods have been lost or damaged. If the master is under a duty to use due care to keep goods safely and protect them from theft and depredation, he cannot get rid of his responsibility by delegating his duty to another. If he entrusts that duty to his servant, he is answerable for the way in which the servant conducts himself therein. No matter whether the servant be negligent, fraudulent, or dishonest, the master is liable. But not when he is under no such duty."

The Master of the Rolls concluded at page 728:-

"From all these instances we may deduce the general proposition that when a principal has in his charge the goods or belongings of another in such circumstances that he is under a duty to take all reasonable precautions to protect them from theft or depredation, then if he entrusts that duty to a servant or agent, he is answerable for the manner in which that servant or agent carries out his duty."

16. Mr Hawksworth argued that the conduct of the deputy headmaster was a perverted form of his duty of care towards the child, a flagrant breach of duty in a flagrant way and the Council was answerable for his conduct. I do not find it easy to reconcile Morris v Martin with the other decisions to which I have referred. I gain some assistance, however, from the judgment of Nourse LJ in Heasmans v Clarity Cleaning Co Ltd (supra) and of Henry J in Makanjuola (supra) in which the principles of Morris v Martin was sought to be applied. Nourse LJ encapsulated the Salmond test at page 289:-

"A master is not liable for a tort committed by his servant unless it is committed in the course of the servant`s employment. An act is not done in the course of the servant`s employment if it is one done which is not authorised by the master. But if an authorised act is done in an unauthorised manner it is done in the course of the employment.

In the present case Bonsu was, broadly speaking, authorised to clean the telephones. He was not authorised to use them. The unauthorised use of a telephone cannot properly be regarded as the cleaning of it in an unauthorised manner. It is another and entirely separate act. But it was suggested that the giving of access to the premises and to their contents to Clarity, and through them to Bonsu, in some way amounted to a bailment of the contents or the equivalent. Reliance was placed on the decision of this court in Morris v Martin & Sons Ltd. That is an impossible view of this case. Although Bonsu was no doubt required to clean the telephones carefully, he was required to handle them for that purpose only. He was neither required nor authorised to take custody of them. He would, for example, have been under no duty to prevent a third party from using them."

17. Henry J in Makanjuola at page 253 referred to the cases where employers have been held vicariously liable for the dishonest performance of their servants which, he said, fell into two categories: those holding the servant out as having the authority which enabled him to commit the tort; second the cases of bailment. He referred to Morris v Martin and said:-

"In such cases the servant has authority to take care of the goods, and is doing fraudulently what he is employed to do honestly. Even though the pretext for the threat was the information extracted from the plaintiff by Mr McCarthy in the purported performance of his police functions, blackmail,in my judgment, cannot sensibly be regarded simply as a wrongful and unauthorised mode of exercising the police discretion whether to arrest, report, warn or take no further action on the information received. It was not an exercise of that discretion at all, but an adventure of his own."

Whether the bailment for reward cases are to be seen as a category of their own or, as Henry J suggested, the reverse side of honest care of the goods of the employer, from both judgments, it is clear that Morris v Martin has not been applied beyond the bailment line of cases.

18. Having looked at some of the relevant decisions on each side of the line, it is useful to stand back and ask:- applying general principles, in which category in the Salmond test would one expect these facts to fall? A deputy headmaster of a special school, charged with the responsibility of caring for a handicapped teenager on a foreign holiday, sexually assaults him. Is that in principle an improper mode of carrying out an authorised act on behalf of his employer, the Council, or an independent act outside the course of his employment? His position of caring for the plaintiff by sharing a bedroom with him gave him the opportunity to carry out the sexual assaults. But availing himself of that opportunity seems to me to be far removed from an unauthorised mode of carrying out a teacher`s duties on behalf of his employer. Rather it is a negation of the duty of the Council to look after children for whom it was responsible. Acts of physical assault may not be so easy to categorise, since they may range, for instance, from a brutal and unprovoked assault by a teacher to forceful attempts to defend another pupil or the teacher himself. But in the field of serious sexual misconduct, I find it difficult to visualise circumstances in which an act of the teacher can be an unauthorised mode of carrying out an authorised act, although I would not wish to close the door on the possibility.
19. In my judgment the judge was wrong in principle to find the Council capable of being liable for the sexual assaults committed by its employee on the plaintiff. In coming to that conclusion, I am very much aware of the serious consequences to the plaintiff and to his mother from the events in Spain and I am very sorry that they will be unable to receive financial redress for the results of those acts. It is a very sad case but, on the basis of the case set out in the pleadings which is the only issue before this Court, the blame for these events cannot be laid at the door of the Council.

I would allow the appeal.

LORD JUSTICE THORPE:

I agree.

LORD JUSTICE CHADWICK: I agree that this appeal should be allowed. But, in the circumstances that we are differing from the Judge below in a matter of such moment to the plaintiff, I think it right to put my reasons for that conclusion in my own words.

The task which the Judge set himself, as appears from the order which he made on 12 August 1997, was to decide as a preliminary issue whether, if the facts pleaded in paragraphs 1, 2 and 3 in the particulars of claim were established, the defendant Council had a case to answer in response the plaintiff's claim that the Council was vicariously liable for the actions of its employee, Michael Stevens. The facts pleaded were these:

20. At all material times the Defendants operated a school for mentally handicapped children . . . whereat the Plaintiff attended from about May 1990.
21. The Defendants' servants or agents who were the staff at the school organised a holiday trip to Spain which took place on 28th May to 4th June 1991 and the Plaintiff, with other pupils, went on the trip and was totally within the control, and subject to the care, of the Defendants' said servants or agents, the staff at the said school.
22. Whilst on the holiday in Spain the Plaintiff shared a bedroom with the Deputy Headmaster of the said school, the Defendants' servant or agent one Michael Charles Stevens, and on several nights during the holiday the Plaintiff was indecently assaulted by the said Stevens.

It was on the basis of those allegations of fact that the plea was advanced, in paragraph 4 of the particulars of claim, that the Council was vicariously liable for the indecent assaults:

23. . . . by reason of the fact that such occurred whilst Stevens was so acting whilst carrying out his supervisory role as a school master in charge of the Plaintiff and responsible for his care.

It is essential to keep in mind that it is not alleged that the Council itself was in breach of any duty which it may have owed to the plaintiff. The only basis of the claim advanced against the Council is vicarious liability for the acts of its employee.

I am satisfied that the claim cannot succeed on that basis. I find it impossible to hold that the commission of acts of indecent assault can be regarded as a mode - albeit, an improper and unauthorised mode - of doing what, on the case advanced, the deputy headmaster was employed by the Council to do. In the circumstances alleged, Michael Stevens was employed to supervise the plaintiff's welfare while on the holiday in Spain. The commission by him of acts of indecent assault on a pupil in his charge cannot be regarded as a way of doing that. Rather, it must be regarded as an independent act of self indulgence or self gratification. It is that element which distinguishes the facts alleged in this case from those in Poland v John Parr and Sons [1927] 1 KB 236, Rose v Plenty [1976] 1 WLR 1411 and Vasey v Surrey Free Inns Plc (unreported, Court of Appeal, 5 May 1995) -to which we were referred in argument. It is not sufficient to found vicarious liability in the employer that the employment provided the opportunity for the employee to commit the act if the act itself was outside the scope of the employment - see Heasmans v Charity Cleaning Co Ltd [1987] IRLR 286.

The Judge relied on the decision of the Employment Appeal Tribunal in Bracebridge Engineering Ltd v Darby [1990] IRLR 3. The question in that appeal was whether the acts of the appellant's employees were done in the course of their employment for the purposes of section 41 of the Sex Discrimination Act 1975. The Tribunal applied the common law test and concluded that they were. In its subsequent decision in Tower Boot Co Ltd v Jones [1995] IRLR 529, to which the Judge does not seem to have been referred, the Tribunal observed that Bracebridge stretched that test to the limit. I agree. I agree, also, that decisions on the words "in the course of his employment" in section 41 of the Sex Discrimination Act 1975 and section 32(1) of the Race Relations Act 1976 are of no assistance in determining the scope of employment for the purposes of the common law principle of vicarious liability - for the reason given by Lord Justice Waite in Jones v Tower Boot Co Ltd [1997] 2 All ER 406, at page 416c-d.

The plaintiff sought to rely on the decision of this Court in Morris v C W Martin & Sons Ltd [1966] 1 QB 716. The defendants in that case, who were sub-bailees for reward of a fur stole, were held liable to the plaintiff, the owner of the fur, in circumstances where it was stolen by one of their employees whose duty it was to clean it. Lord Denning, Master of the Rolls, identified the conceptual difficulty of treating the employee's theft as an act done in the course of that which he was employed to do. After describing the cases as "baffling" - see at page 724B - he went on to explain the position in these words, at page 725C-D:

If you go through the cases on this difficult subject, you will find that, in the ultimate analysis, they depend on the nature of the duty owed by the master towards the person whose goods have been lost or damaged. If the master is under a duty to use care to keep goods safely and protect them from theft and depredation, he cannot get rid of his responsibility by delegating his duty to another. If he entrusts that duty to a servant, he is answerable for the way in which the servant conducts himself therein. No matter whether the servant be negligent, fraudulent, or dishonest, the master is liable. But not when he is under no such duty.

Lord Justice Diplock agreed, at page 731D, that:

The important question for our determination is whether the defendants were in breach of any common law duty owed by them to the plaintiff.

He held that the existence of the common law relationship of bailor and bailee for reward gave rise to common law duties; including the duty owed by the bailee not to convert the goods. The servant was the person to whom the defendants had entrusted the performance of the duty which the common law placed upon them as bailees. The servant's theft put the defendants in breach of their own duty not to convert the fur. In those circumstances the defendants could not escape responsibility for the servant's act. As Lord Justice Diplock pointed out, at page 735E-F, it had been decided by the House of Lords in Lloyd v Grace Smith & Co [1912] AC 716:

Whether the act of the servant be honest or dishonest, the ground of the master's liability is: "he [the master] has put the agent in his place to do that class of acts and he must be answerable for the manner in which that agent has conducted himself in doing the business which it was the act of his master to place him in."

Lord Justice Salmon took the same view. He explained the basis for his conclusion at page 740F-741A:

"I am anxious, however, to make it plain that the conclusion which I have reached depends upon Morrissey being the servant through whom the defendants chose to discharge their duty to take reasonable care of the plaintiff's fur. . . . A bailee for reward is not answerable for a theft by any of his servants but only for a theft by such of them as are deputed by him to discharge some part of his duty of taking reasonable care.

The distinction between the line of cases of which Lloyd v Grace Smith & Co [1912] AC 716 and Morris v C W Martin & Sons Ltd [1966] 1 QB 716 provide examples and what Lord Justice Diplock described, in Morris, as "the frolicsome coachman line of authority" is that, in the former, the master owes his own duty to the person harmed; in the latter the master owes no duty of his own - see the observations of Lord Denning, Master of the Rolls, in Morris at page 725A-B. Where the master owes his own duty to the person harmed, he cannot escape responsibility by delegating the performance of that duty to the servant. Where the master owes no duty of his own, he is vicariously liable for the servant's act only where the servant can be said to be doing, albeit badly or in an unauthorised manner, that which he is employed to do. The use of the phrase "acts done in the scope or course of his employment" - described as "that infelicitous but time-honoured phrase" by Lord Justice Diplock (ibid, at page 737B) - to explain the master's liability in both classes of case blurs that distinction and may lead to confusion.

There is no allegation in the particulars of claim that the Council itself owed to the plaintiff a duty to ensure that he was free from harm during the Spanish holiday. No doubt there were thought to be good reasons for pleading the case without alleging any duty owed by the Council itself. I express no view on whether such an allegation could be made good. This Court must decide this appeal on the basis that the preliminary issue is defined by the allegations which were before the Judge. It would not be safe to proceed on the basis that the case might have been put in some other way which the plaintiff has not chosen to plead.

Order: Appeal allowed; action dismissed; no order as to costs in relation to the action in the court below; no order as to costs save legal aid taxation; order below set aside; the costs of the appeal to be paid by the Legal Aid Board under Section 18 of the Legal Aid Act; legal aid taxation of the respondent's costs in relation to the appeal. (This order does not form part of the approved judgment)