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Cite as: [2009] PNLR 12, [2009] QB 725, [2009] Bus LR 696, [2008] EWCA Civ 1257, [2009] 3 WLR 324, 122 Con LR 1, [2009] BLR 1

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		Neutral Citation Number: [2008] EWCA Civ 1257
		Case No: A1/2008/0422

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QBD, TECHNOLOGY AND CONSTRUCTION COURT
MR JUSTICE RAMSEY
[2008] EWHC 6 (TCC)

Royal Courts of Justice
Strand, London, WC2A 2LL

12/11/2008

B e f o r e :

THE PRESIDENT OF THE QUEEN'S BENCH DIVISION
LORD JUSTICE RIMER
and
LORD JUSTICE STANLEY BURNTON
____________________

Between:

	Biffa Waste Services Limited Biffa Leicester Limited	Claimants/Respondents
	- and -
	Maschinenfabrik Ernst Hese GMBH	First Defendant
	-and-
	Outokumpu Wenmac AB	Second Defendant/Appellant
	-and-
	Vanguard Industrial Ltd t/a Pickfords Vanguard	Third Party
	-and-
	Hese Umwelt GmBH	Fourth Party

____________________

Mr David Allen QC (instructed by Ince & Co) for the Appellant
Mr Ben Patten (instructed by Herbert Smith LLP) for the Respondents
Hearing dates : 29, 30 October 2008
____________________

HTML VERSION OF JUDGMENT
____________________

Introduction

This is the judgment of the Court, written by Lord Justice Stanley Burnton.

This is an appeal against the order of Ramsey J, sitting in the Technology and Construction Court, made following his judgment given on 11 January 2008, by which he gave judgment for the Claimants against the Second Defendant for damages to be assessed. The appeal concerns the application of two exceptional bases of liability in negligence, namely the vicarious liability for the negligence of an employee of an independent contractor who becomes the defendant's borrowed employee (described in the authorities as its employee pro hac vice (for an occasion)), and the rule that a defendant is liable for the negligence of his independent contractor where the activities of the independent contractor are ultra hazardous. These bases of liability were applied in this case in the context of construction contracts. They are exceptional because the normal rule is that a defendant is vicariously liable in negligence only for the acts of his officers or employees, and is not liable for the acts of the employees of his independent contractor. Ramsey J held that the Second Defendant, to which we shall refer as OT, was liable to the Claimants on both bases. OT contends that it should not have been held liable on either basis.

The facts in summary

There is no challenge to the primary facts found by the judge, and we can take them almost verbatim from his admirably clear judgment.

This case arises from a fire which occurred on 27 June 2004 at a waste recycling plant in Leicester ("the Plant") which was under construction at the time. The fire broke out in part of the plant known as the Ball Mill. It resulted from welding carried out in the Ball Mill by employees of Vanguard Industrial Ltd, which traded as Pickfords Vanguard and is referred to as "Pickfords". A spark from the welding ignited combustible material in the Ball Mill.

On 2 May 2003, Biffa Leicester Limited ("Biffa Leicester") had entered into a PFI contract with Leicester City Council ("LCC") for the collection, recycling and disposal of Leicester's domestic waste. The PFI contract necessitated the construction of the recycling plant which was located at Bursom ("the Plant"). A key part of the Plant was the Ball Mill. The Ball Mill is, in essence, a large rotating drum which contains steel balls with a total weight of some 50 tonnes.

The operation of the balls is intended to break down the waste into smaller material which can then be separated. Organic material is used for anaerobic digestion and composting at a plant at Wanlip which generates electricity from methane. Paper and plastics are used as a fuel for cement kilns, such fuel being known as "floc". Inert material is disposed of in landfill.

Biffa Leicester entered into a back-to-back contract on 2 May 2003 ("the Works Agreement") with an associated company Biffa Waste Services Limited ("Biffa Waste"), by which Biffa Waste effectively undertook to Biffa Leicester to discharge Biffa Leicester's obligations in respect of the construction of the plant.

Biffa Waste then engaged a German company, Maschinenfabrik Ernst Hese GMBH ("MEH"), to design and build the relevant plant under a contract known as the "Design and Build Deed", also dated 2 May 2003. It contemplated that MEH would sub-contract the supply of the Ball Mill to a Swedish company, Outokumpu Wenmec AB ("OT"). MEH also entered into a warranty dated 2 May 2003 in favour of Biffa Leicester ("the Direct Agreement").

MEH, in turn, sub-contracted the work to the Fourth Party, an associated company, Hese Umwelt GMBH ("HU"). As main contractors on the site, HU were generally responsible for safety. Mr Manfred Brix was employed by them to act as the "Richtmeister" or Senior Supervisor. He was permanently on site to oversee the construction of the Plant.

On about 12 June 2003, HU entered into a contract with OT to design, supply and install the Ball Mill at the recycling plant. OT employed 4 designers in Oslo and about 4 sales managers in Norway. It designed the Ball Mill, and sub-contracted its manufacture and installation. At no material time were any of its employees on the site of the Plant; indeed, none of them was in this country.

The Ball Mill first ran in March 2004. On 2 April 2004 a Certificate of Practical Completion was issued by Biffa Waste to MEH relating to both Bursom and Wanlip. The Ball Mill was then ready for commissioning tests. Early tests indicated that modifications had to be made to the Ball Mill to increase throughput. These modifications included work to the fixing arrangements to the grates in the Ball Mill by replacing lifter bars with clamping bars.

After some of the modifications had been carried out, further works ("The Welding and Grinding Works") were necessary to repair and protect fastening bolts to clamping bars to the grate. This work was performed by personnel from Pickfords in the last week of June 2004, and in particular on 26 and 27 June. During the course of a tea break on 27 June 2004 a fire broke out, causing substantial damage to the Ball Mill and to other parts of the Plant.

Biffa Waste and Biffa Leicester, to whom we shall refer to as "Biffa", (it being unnecessary for the purposes of this appeal to distinguish between them) brought these proceedings against MEH and OT to recover losses suffered as a result of the delay to the operation of the plant caused by the fire. The reinstatement costs have been recovered from an insurance policy taken out by LCC under the PFI Contract which covered the loss. Pickfords took no part in the proceedings. HU admitted liability to indemnify MEH in respect of any liability to Biffa. Both Pickfords and HU are insolvent.

The Welding and Grinding Works

During warm commissioning of the plant at Bursom it had became apparent that the Ball Mill was not achieving the required throughput of material. At a meeting between HU and OT in Gelsenkirchen, Germany on 27 April 2004 modifications were agreed in an attempt to increase the throughput. These modifications included modifications to alter the "lifters" on the grates.

On 30 April 2004 Mr Nygren of OT sent Mr Groeble of HU an email attaching two drawings of the new lifter bars which showed the proposal for the existing bars to be removed and new clamping bars to be substituted. The new clamping bars were to be recessed into a rebate in the face of the gate. The bolts which had fixed the existing lifter bars protruded some 70 to 90 mm above the face of the grate and the drawing showed that these bolt heads were to be cut off. The bolts were then to be welded to the underside of the clamping bar. Later on 30 April 2004 Mr Nygren also sent an email attaching an alternative design.

On 30 April 2004 Mr Nygren also contacted Mr Colin Shore of Pickfords asking whether he could supply the clamping bars shown on the drawing. Pickfords had already been working on the site for some months as sub-contractors to HU.

On 3 May 2004 Mr Groeble of HU said that he accepted Mr Nygren's original proposal of 30 April 2004, rather than the alternative and in his email to Mr Nygren of OT said: "As you are aware, the responsibility of this rebuilding stays in your hand because you are the ball mill experts and suppliers."

Mr Groeble then prepared a document with the title "Method Statement for works inside of the Ball Mill" dated 3 May 2004 which set out the scope of the works, contained a Risk Assessment for works inside the Ball Mill and a "Briefing Confirmation" to which we shall refer below. It identified the known hazards of those works as sparks, heat and smoke, and it listed the relevant equipment on site. Section 4 was the risk assessment for those works. It stated:

"4 Risk Assessment for works inside of the ball mill

4.1 Grinding and Disc Cutting

Hazard: Fire starting as a result of grinding operations. Flying debris and sparks. Electric shock.

Risk: Medium

At risk: All site personnel and visitors

Action: The work area will be kept free from flammable or combustible materials including oil and greases. An adequate number of appropriate fire extinguishers will be sited adjacent to all hot work areas. Fire extinguishers will be checked prior to the commencement of grinding operations, to ensure they are full and the seal is intact. The ball mill will be vented by the exhaust air system. Only trained competent personnel will change grinding discs. The working place will be monitored 1 hour after finish after hot works. Operators will be provided and will wear Personnel Protective Equipment i.e., protection and dust mask, protective gloves etc.

4.2 Welding

Hazard: Fire starting as a result of welding. Flying sparks. Electric shock. Smoke.

Risk: Medium

At risk: All site personnel and visitors

Action: The work areas will be kept free from flammable or combustible materials including oils and greases. An adequate number of appropriate fire extinguishers/water hoses will be sited adjacent to all hot work areas. The underground of the ball mill will be kept wet. The ball mill will be vented by the exhaust air system. The working place will be monitored 1 hour after finish of hot works. Operators will be provided and will wear Personnel Protective Equipment i.e. protection and dust mask, protective gloves etc."

On 4 May 2004 Mr Chris Jones of Pickfords sent Mr Nygren prices for carrying out the supply of the clamping bars and for machining the grates in Pickfords' machining shops. He added, "Who will be paying for the engineers over the next two weekend periods?"

Mr Nygren responded to Mr Jones on 5 May 2004 to say: "Regarding engineers we [intend] to send men from Sweden but in case we need additional man power we allow us to turn to you and are ready to pay in such a case."

On 5 May 2004 Mr Nygren also wrote to Mr Groeble enclosing revised drawings and stating:

"This is to confirm that we are prepared to do the rebuilding of the mill discharge grate according to the discussions at Gelsenkirchen April 27th and information exchanged up to now.

Pickford Vanguard has confirmed possibility to manufacture lifter plates and has also confirmed discussions with Hese and is prepared to do the machining of the grates during coming weekends. Kristian is prepared to go to Leicester and additional men are coming from Sweden. If even more men are necessary we will use the men Pickford has prepared for this job."

When the grates were being dismantled and machined between 7 and 9 May 2004 cracks and defects were discovered in the grate sections. Mr Groeble wrote to Mr Nygren several times. On 28 May 2004 Mr Nygren responded:

"We have noticed what has happened with the grate plate on the grate in the mill in Leicester.

A set of plates made in Hardox will be manufactured urgently most probably by Pickford in England. Attached drawing is sent to Pickfords to get their opinion and possibilities of an urgent manufacturing.

We are talking to Swedish manufacturer in case Pickford will have problem."

The necessary changes to the clamping bar arrangements were, it seems, carried out in May 2004. On 1 June 2004 Mr. Groeble wrote to Mr Nygren and reported concerns about the fixing of the bolts to the clamping bars. He said this:

"Fixing bolt of the grate: We are afraid that the present solution is not sufficient. We think that the wearing of the fixing bolts caused by the balls during running the mill is that high, that the surface of the bolts will become worn very soon. Due to that the screw connection will loosen and will cause much more trouble.

From our point of view there are some possibilities to solve this problem. E.g. to create a hard facing on top of the bolts, or to countersink the bolts in some way."

On 18 June 2004 Mr Groeble wrote to Mr Nygren listing concerns about the removal of the tool container which OT had on site. He said:

"But the most serious thing in connection with the tool container are the screws of the grate which come loose in very short time. It can not be acceptable that our staff has to retighten the screws after every day (and for this work they are using the tools which are in the container). So you have to find a solution for this big, time-consuming problem!"

Over the weekend of 19/20 June 2004 it seems that some welding was carried out as a repair to the bolt heads on the clamping bar. It would appear that this was carried out by Pickfords at the request of HU.

There were various concerns about the Ball Mill and this led to a meeting being held between representatives of OT and HU at Gelsenkirchen on Monday 21 June 2004. Under item 2 of the Protocol document produced after that meeting, the following was noted under Further Actions:

"Screws for fastening the grate come loose constantly.

A new bolt protection for example in the form of a "square washer" (executed as a "hat") will be manufactured and welded on top of the bolt from the inside of the mill. Attention, suitable weld rods and welding machines (400V) are required. This washers will be made out of Hardox. Outokumpu will probably order the washers and the welding from Pickfords Vanguard and will send in addition to that a supervisor to Bursom site. At the same time the nuts will be changed into loc-nuts.

…

New Grate Segments

The five new grates segments are on the way to Leicester and will be changed against the cracked ones at the same time.

All works to be carried out in agreement with Manni Brix."

The action for that item was noted as being carried out by OT and it was stated "work to be carried out at the weekend starting 3 July 2004". However a note was added, "Please check if it will be possible to start this step one week earlier, 26^th, 27^th, 28^th, June 2004 perhaps with a Member of Metso, Rugby".

On 23 June 2004 Mr Nygren sent a fax to Colin Shore at Pickfords saying:

"We need before end of this week 84 plates/washers according to item 3 on drawing 11805314 Rev 2. Design of plates can be discussed.

Please advise soonest your possibility to provide help."

The drawing attached to that fax showed a square "washer" with a round hole in the centre which was to be welded over the bolt heads on the clamping bar.

By 23 June 2004 the repair carried out on 19/20 June 2004 was reported to be ineffective. Mr Groeble wrote to Mr. Nygren on that day to say:

"As you have been informed already by phone, the repair welding of the fastening screws at the inside of the mill shows such great wearing already after one production day, that we are afraid that more screws will become loose and cause big damages at the bearing of the mill. Manni Brix [of HU] said, that from his point of view he has to stop the mill latest on Friday because of the damage risk! You see, the situation is very serious and needs to be solved at once! It is unconditionally necessary to realise the repair of this defect as soon as possible, latest of the complete grate without any more disturbances. For the repair it is also necessary that you send one or two men for supervising and performing the necessary tasks."

Mr Groeble then continued to press for action. In an email on 24 June 2004 he said:

"Again some more screws became loose and it looks like there has been no repair during the last weekend, every welding seam is worn out again! Now at that situation it is urgently unconditionally necessary to have a responsible person from your company at site this weekend to decide what to do and to supervise the actions! Our men at site can't continue their work, because they are busy with the mill."

On 25 June 2004 Mr Groeble informed Mr Nygren:

"and again the plant came to some standstills due to loose screws at the grate. Yesterday three screws were loose, this morning two and later again three. You see, we have to interrupt the production regularly just to retighten the screws. I do hope that after this "repair" weekend this problem is solved."

In the meantime on 24 June 2004 Mr Nygren received an e-mail from Robert Preston at Pickfords. He quoted for the following:

"To manufacture 84 washer plates from Hardox steel 110 mm square complete with 60 mm holes our cost is £12.00 each giving total of £1008.00

To provide 2x welding sets (hired) complete with 100 metres cabling with 6x boxes welding rods including delivery and collection is

Welders £240.00 each set	Total £480.00
Cabling £12.00 each set	Total £24.00
Rods £72.00 per box (manganese cobalt all positional)	Total £432.00
Delivery and collection	Total £300.00

To provide 2x welders over weekend Sat 26^th+Sun 27^th our cost £960.00."

The work to be carried out by the welders had evidently been discussed by Mr Preston and Mr Nygren. Mr Preston asked for acceptance by fax and on 24 June 2004 Mr Nygren copied and pasted the email into another document which he then faxed to Pickfords. He said, "This fax is to confirm that costs are accepted by us."

Pickfords' email of 24 June 2004 and Mr Nygren's fax of that date, together with any relevant conversation, formed the relevant contract between OT and Pickfords in relation to Pickfords involvement in work to the Ball Mill for OT over the weekend of 26/27 June 2004.

On the email from Mr Preston, Mr Nygren made a manuscript note making reference to Mr Ek and Mr Isaksson who were also contacted on that day. They were employees of Millteam, who had an agreement with OT under which they provided labour and equipment to erect and install equipment supplied by OT. They had previously supplied labour and equipment to erect the Ball Mill at Bursom. Mr Nygren made arrangements for Mr Ek and Mr Isaksson to attend site on that weekend.

Pickfords in fact provided four employees, rather than the two required by their agreement with OT. On Saturday 26 June 2004 Mr Brix completed the briefing confirmation on the last page of the Method Statement for works inside the Ball Mill. He signed a confirmation that he had fully briefed Pickfords' senior foreman, Mr Askwith, on the contents of the method statement and the attached risk assessments. Mr Askwith signed a confirmation that he had been fully briefed and understood the requirements specified in the documents. The document continued:

"If for any reason during the course of undertaking this work activity, they cannot adhere to the contents of either the risk assessment or the method statement, they have been instructed to contact their Foreman or Site Supervisor, who will then stop the work activity. The Foreman or Site Supervisor will discuss the problem with the Contracts Engineer of the relevant Manager at the Branch then, if necessary, will produce alternative documentation prior to work re-commencing."

The document identified the three other Pickfords employees engaged in the works, namely Gary Deehan, Neil Deehan and Mr Ibbotson, and Mr Askwith signed a confirmation that he had fully briefed "all relevant parties involved in, or affected by, this work activity on the contents of the method statement and the attached risk assessment". Two of those four must have been provided by an agreement between HU and Pickfords, and HU paid for them. OT paid only the sum agreed by them in the exchange between them and Pickfords on 24 June 2004.

It is common ground that welding and grinding work on the site could not be carried out unless and until Mr Brix of HU issued a Hot Work Permit to those carrying out the work. We have a copy of the Hot Work Permit issued by Mr Brix to Mr Askwith for the welding and grinding work in the Ball Mill. It is dated 27 June 2004, and was valid from 7.30 am to 5.00 pm. Under the heading "Precautions" it stated that a fire watch was required, no welding screens were required, flammable substances/materials were to be removed and flammable substances/materials were to be protected. It also stated that combustible floors were to be protected by wetting down and covering with damp sand or sheets of non-combustible material. Mr Askwith signed the acceptance, confirming that he had read the permit and understood the contents and would comply with its conditions. We assume that a similar permit had been issued the previous day. Mr Brix had authority to stop the work at any time on safety grounds.

When Mr Ek and Mr Isaksson arrived on the site on 26 June 2004, they found that Pickfords had already begun work.

Mr Brix was present on site on 27 June 2004 and was involved in the operations being carried out in the Ball Mill on that day.

The cause of the fire

The judge's findings are set out in paragraphs 84 and 85 of his judgment, and are not challenged:

"84. I consider that the failures of the various personnel which amounted to a lack of skill and care and which caused or materially contributed to the fire were as follows:

(1) The method statement prepared by Mr Groeble of HU and used by Mr Brix of HU was inadequate in identifying the risk of fire on the trommel side of the grating. Had the risk been properly identified adequate precautions could have been taken to avoid the fire.

(2) The Hot Work Permit used by Mr Brix of HU did not properly identify the hazard posed by the presence of combustible material on the trommel side of the grating. Had it done so then proper precautions could have been taken to avoid the fire.

(3) Mr Askwith of Pickfords failed to ensure that a continuous watch was kept in the period of either 15 minutes or 1 hour after the hot work had ceased in the Ball Mill. Either period would have ensured that the smouldering fire was discovered and readily extinguished.

(4) Mr Askwith and Mr Gary Deehan of Pickfords should have been aware of the risks of ignition of combustible material on the trommel side of the grating. Had they properly dealt with or mitigated those risks by preventing sparks from reaching the material, the fire would not have occurred.

(5) Mr Askwith and Mr Gary Deehan of Pickfords failed to ensure that the welding area was properly wetted down after welding. There is very little evidence of any wetting down between the period of 9:30am and 10:00am. Had the area been properly wetted the fire would not have occurred.

85. I therefore conclude that the fire was caused or materially contributed to by the negligence of personnel of HU and Pickfords, as set out above."

Vicarious liability for a borrowed employee

As already mentioned, despite his finding in paragraph 85 of his judgment the judge concluded that OT were liable for the negligence of Pickfords, on the basis that the Pickfords' welders had become OT's employees when carrying out the welding in the Ball Mill. It was not suggested at the trial that OT was negligent in having selected Pickfords as their welding contractor for the work. Having reviewed the authorities, the judge said:

"242. From those authorities, I derive the following principles relevant to this case:

(1) The focus of the enquiry is control over the negligent act. The relevant enquiry is to ascertain which party has authority to control the manner in which the employee carries out the work which was performed negligently.

(2) It is control over the manner in which the employee carries out the work not control over what work the employee carries out. Liability attaches to the party who was entitled to give orders as to how the work should or should not be done.

(3) An employee may be given delegated authority as to the manner in which he carries out the work and in such a case it is the party which gave that authority which will be liable if the work is carried out negligently."

The judge set out his reasons for finding that OT were vicariously liable for the negligence of Pickfords as follows:

"248. I have come to the conclusion that in this case the Pickfords employees were not acting as independent contractors but were acting in a role which imposed vicarious liability on OT for their negligence.

249. The work which was being carried out on the weekend of 26/27 June 2004 had been discussed between HU and OT at the meeting at Gelsenkirchen on 21 June 2004. The work was to be carried out by Pickfords but OT was to provide supervision. On 23 June 2004 Mr Groeble requested OT to provide one or two men for supervising and performing the necessary work. By 24 June 2004 Mr Groeble said that it was necessary to have a responsible person to decide what to do and supervise the actions. This clearly shows that OT were to supervise the work being carried out on the weekend of 26/27 June 2004.

250. OT organised the work which they had designed and which they were carrying out under their contract with HU by engaging Millteam and Pickfords.

251. The arrangement with Millteam was that they would provide labour to work for OT in carrying out the installation and maintenance of milling plant. Millteam were to be paid at hourly rates for any labour they supplied. There was also a provision for Millteam to provide equipment but this had to be the subject of a separate agreement. The personnel supplied under this arrangement for the weekend of 26/27 June 2004 both describe themselves as steel erectors.

252. The agreement with Pickfords similarly was an agreement for Pickfords to provide welders, provide welding equipment and manufacture the "top hat" washers.

253. In setting up those arrangements and sending Mr Isaksson and Mr Ek from Millteam, Mr Nygren was evidently wanting Millteam to be involved in carrying out the operations on 26/27 June 2004. The evidence indicates that there was uncertainty as to what Millteam went to do. Mr Nygren says in his witness statement that Millteam were to go fit the washer plates, essentially with supervision being provided by Mr Brix. In his evidence he cast a wider responsibility on Millteam in terms of supervision and instruction of Pickfords. Mr Isaksson says he was asked to see if he could come up with any ideas for curing the problems of breaking bolts and find a way of protecting them. Mr Ek says the instructions were not very clear but were to help out with some problems which had been found.

254. It is highly unlikely that Mr Nygren would engage two Millteam steel erectors to go to fit the washer plates. Given what was said at the meeting in Gelsenkirchen and in the subsequent e-mails from Mr Groeble, the much more likely explanation was that which Mr Nygren gave in his oral evidence that Mr Isaksson and Mr Ek were being sent on site to supervise the work on behalf of OT. As I have found, in carrying out that supervision they were involved in matters of health and safety, in the supply of tools from the cabin and in checking fire precautions, all of which is entirely consistent with their role as supervisors, with the entitlement to instruct Pickfords both how to do the work and as to what work had to be done.

255. This indicates that OT through Millteam had the right to control Pickfords' operations. It demonstrates that OT was entitled to control the manner in which Pickfords carried out their work, particularly in terms of taking precautions to avoid fire.

256. Reliance is placed by OT on the role of Mr Brix of HU. However, the role of HU in the process has to be seen in its proper contractual context on this construction project. HU were effectively the main contractor and therefore had overall responsibility for all work which was carried out on site. In that role they had responsibilities, for example, in issuing hot work permits and preventing poor performance by sub-contractors. In carrying out such control in relation to Pickfords in respect of the work being carried out on 26/27 June 2004, they could not impose control over Pickfords in relation to the work being carried out unless OT was entitled to exercise that control over Pickfords. I therefore consider that control exercised by HU on 26/27 June 2004 if anything, reinforces the fact that Pickfords were to be controlled in terms of the health and safety aspects by OT. The fact that OT permitted HU to exercise the relevant control over Pickfords does not therefore show that OT did not have the entitlement to exercise that control.

257. As a result, I do not find that the matters relied upon by OT lead to the conclusion for which they contend. In particular:

(1) Pickfords would need directions to know what to do and how to do it. The only party who could give those directions would be OT. OT chose to engage Millteam and to use HU site staff to carry out that role on their behalf. It was however OT who was entitled to exercise that control and the fact that it was not done adequately does not reduce the entitlement to control.

(2) The fact that OT did not have a presence on site does not answer the question of who was entitled to control the operations. The fact OT did not do so does not affect the existence of an entitlement to do so.

(3) The involvement of HU as a main contractor in dealing with matters of safety does not detract from the fact that it was OT who was entitled to control Pickfords. Indeed it shows that Pickfords was not free to perform the work in their own way and reinforces the fact that OT was entitled to control Pickford' operations.

(4) The fact that Pickfords supplied specialist welders and equipment and that the welders had a degree of autonomy as to how they made the welds or ground the bolt heads does not affect the question of OT's control. The relevant authority given to Pickfords' personnel who were provided to OT on a labour only basis, came from OT.

(5) The fact that Pickfords personnel carried out the safety precautions which proved inadequate does not show who was entitled to control the operations.

258. Accordingly, I find that OT was vicariously liable for the negligence of the Pickfords' personnel which caused or contributed to the fire."

On behalf of OT, Mr Allen QC made a number of criticisms of these passages in the judgment. He submitted that the judge failed to take account of the high burden of proof required for a finding that an employee has been transferred from his normal employer to another party; that he took insufficient account of the fact that the Pickfords employees were skilled welders; that he failed to take account of the fact that there were four Pickfords employees involved, yet OT had contracted only for two; that he did not take account of the fact that Millteam were themselves independent contractors, so that their conduct cannot be attributed to OT; that he focused excessively on supervision as against control, and did not analyse the terms of the contract between Pickfords and OT or address issues such as who was entitled to employ and to dismiss the employees in question; that his conclusion that OT controlled or were entitled to control Pickfords' employees was inconsistent with the fact that OT had no presence on site; and that it was HU, through Mr Brix, which was dealing with safety on site.

Mr Patten, for Biffa, submitted that the judge was entitled to reach his conclusions, having regard to the actual supervision exercised by Millteam's personnel, from which it is to be inferred that OT was entitled to control Pickfords' employees.

The authorities on vicarious liability for borrowed employees

The leading authority is the decision of the House of Lords in Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool) Ltd [1947] AC 1. We can take the facts from the headnote, itself derived from the speeches of Viscount Simon and Lord Macmillan:

"The appellant Board owned a number of mobile cranes, each driven by a skilled workman engaged and paid by them, for the purpose of letting out the apparatus so driven to applicants who had undertaken to load or unload cargo at Liverpool Docks. This was a regular branch of their business. The conditions on which these cranes were supplied were printed and headed: "Regulations and rates applying to the fixed and mobile cranes on land, available for general use on the dock estate at Liverpool and Birkenhead." They were incorporated in the contract of hiring. By reg. 6: "Applicants for the use of cranes must provide all necessary slings, chains, and labour for preparing the article to be lifted, and for unshackling the same. They must also take all risks in connexion with the matter. The board do not provide any labour in connexion with the cranes except the services of the crane driver for power cranes. The drivers so provided shall be the servants of the applicants." As regarded "portable cranes," the stipulated rates varied according as they were provided "with board's driver" or "without board's driver." The respondent company were master stevedores who had hired from the appellant board the use of a portable travelling crane, together with its driver. … The Board hired out a mobile crane, along with its operator, to a firm of stevedores. The crane operator injured a third party whilst the crane was on hire to the stevedores."

The question was whether the stevedores were vicariously liable for the crane operator's negligence; the House of Lords concluded that they were not. Lord Macmillan said at 13:

"The stevedores were entitled to tell him where to go, what parcels to lift and where to take them, that is to say, they could direct him as to what they wanted him to do; but they had no authority to tell him how he was to handle the crane in doing his work. In driving the crane, which was the appellant board's property confided to his charge, he was acting as the servant of the appellant board, not as the servant of the stevedores. It was not in consequence of any order of the stevedores that he negligently ran down the plaintiff; it was in consequence of his negligence in driving the crane, that is to say, in performing the work which he was employed by the appellant board to do."

Lord Simon said at 10:

"Mr. Pritchard (counsel for the Board) placed much reliance upon the language of reg. 6. But when the plaintiff has proved injury caused by the negligence of Newall, and the question arises who is answerable as "superior" for such negligence, this question is not to be determined by any agreement between the owner and the hirer of the crane, but depends on all the circumstances of the case. Even if there were an agreement between the appellant board and the respondent company that in the event of the appellant board being held liable for negligent driving of the crane while it is under hire to the latter, the latter will indemnify the appellant board, this would not in the least affect the right of the plaintiff to recover damages from the appellant board as long as the appellant board is properly to be regarded as the crane driver's employer. It is not disputed that the burden of proof rests on the general or permanent employer - in this case the appellant board - to shift the prima facie responsibility for the negligence of servants engaged and paid by such employer so that this burden in a particular case may come to rest on the hirer who for the time being has the advantage of the service rendered. And, in my opinion, this burden is a heavy one and can only be discharged in quite exceptional circumstances."

And at 12:

"I would prefer to make the test turn on where the authority lies to direct, or to delegate to, the workman, the manner in which the vehicle is driven. … In the ordinary case the general employers exercise this authority by delegating to their workman discretion in method of driving."

Lord Porter said at 17:

"Many factors have a bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind. The expressions used in any individual case must always be considered in regard to the subject matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time, is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged. If someone other than his general employer is authorized to do this he will, as a rule, be the person liable for the employee's negligence. But it is not enough that the task to be performed should be under his control, he must also control the method of performing it."

Lord Uthwatt said at 23:

"The proper test is whether or not the hirer had authority to control the manner of execution of the act in question."

In our view, the facts of the Mersey Docks and Harbour Board case were considerably stronger than the present. The contract between the Board and the stevedores expressly provided that the crane driver was to be the employee of the latter. Nonetheless, the driver remained the employee of the Board. This was because regulation 6 of the contractual conditions was not conclusive, just as a provision in what is described as an agreement for a licence that it does not create a tenancy is not conclusive if, having regard to the terms of the contract, construed having regard to all the circumstances, it confers exclusive possession on the grantee.

All of the members of the House of Lords referred to the authority to control the crane driver. That authority is conferred by the contract of employment. It is only if the agreement between the general employer and the hirer is to be taken, in all the circumstances as conferring on the hirer the power to control the manner of execution of the work that a transfer of vicarious liability can occur. Indeed, in our judgment no such transfer can take place without the consent of the employee, although of course that may be inferred: see the decision of the House of Lords in Nokes v Doncaster Amalgamated Colliery [1940] AC 1014. As Bridge J observed in Smith and another v Blandford Gee Cementation Co Ltd [1970] 3 AER 154 at 160 in relation to a finding by a tribunal that a contract of services had been transferred:

"To my mind, it runs counter to a fundamental principle that a man's contractual position, particularly in such a vital matter as the identity of the master whom he is to serve, shall be crucially affected by an agreement between two other parties, the terms of which are never communicated to him."

However, in Denham v Midland Employers' Mutual Assurance Ltd [1955] 2 QB 437, Denning LJ at p.443 said:

"Much of the difficulty which surrounds this 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: and this consent is not to be raised by operation of law but only by the real consent in fact of the man, express or implied: see Nokes v. Doncaster Amalgamated Collieries Ld. In none of the transfer cases which have been cited to us had the consent of the man been sought or obtained. The general employer has simply told him to go and do some particular work for the temporary employer and he has gone. The supposed transfer, when it takes place, is nothing more than a device - a very convenient and just device, mark you - to put liability on to 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 and Harbour Board v. Coggins &; Griffith (Liverpool) Ld. Such a transfer rarely takes place, if ever, when a man is lent with a machine, such as a crane or a lorry: nor when a skilled man is lent so as to exercise his skill for the temporary employer. In such case the parties do not contemplate that the temporary employer shall tell the man how to manipulate his machine or to exercise his skill. But a transfer does sometimes take place in the case when an unskilled man is lent to help with labouring work: see Garrard v. A. E. Southey & Co. [1952] 2 QB 174. 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 organization to which he is seconded that the temporary employer is responsible for him and to him."

These remarks were obiter, and the judgment of Romer LJ in that case was more conventional, and repays study. Birkett LJ agreed with both the judgment of Denning LJ and that of Romer LJ, despite the difference. However, in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151, [2006] QB 510 the Court of Appeal, consisting of May and Rix LJJ, followed the dictum of Denning LJ and held that both the employer of the negligent employee and the contractor who had contracted with the employer for the supply of that employee on a labour-only basis were vicariously liable for the damage caused by the negligence of the employee. May LJ held that the focus of the court's inquiry must be the relevant negligent act. He said:

"16. In my view, Denham's case, applying the principles in the Mersey Docks case, relevantly states and illustrates those elements of principles most relevant to the present appeal. To look for a transfer of a contract of employment is, in a case such as this, no more than a distracting device; in the present case a misleading one. Darren Strang's employment was not transferred. The inquiry should concentrate on the relevant negligent act and then ask whose responsibility it was to prevent it. Who was entitled, and perhaps theoretically obliged, to give orders as to how the work should or should not be done? In my view, 'entire and absolute control' is not, at least since the Mersey Docks case, a necessary precondition of vicarious liability."

Rix LJ put the matter somewhat differently. He said:

"79. However, I am a little sceptical that the doctrine of dual vicarious liability is to be wholly equated with the question of control. I can see that, where the assumption is that liability has to fall wholly and solely on the one side or the other, then a test of sole right of control has force to it. Even the Mersey Docks case, however, does not make the control test wholly determinative. Once, however, a doctrine of dual responsibility becomes possible, I am less clear that either the existence of sole right of control or the existence of something less than entire and absolute control necessarily either excludes or respectively invokes the doctrine. Even in the establishment of a formal employer/employee relationship, the right of control has not retained the critical significance it once did. I would prefer to say that I anticipate that subsequent cases may, in various factual circumstances, refine the circumstances in which dual vicarious liability may be imposed. I would hazard, however, the view that what one is looking for is a situation where the employee in question, at any rate for relevant purposes, is so much a part of the work, business or organisation of both employers that it is just to make both employers answer for his negligence. What has to be recalled is that the vicarious liability in question is one which involves no fault on the part of the employer. It is a doctrine designed for the sake of the claimant imposing a liability incurred without fault because the employer is treated by the law as picking up the burden of an organisational or business relationship which he has undertaken for his own benefit.

80. One is looking therefore for practical and structural considerations. Is the employee, in context, still recognisable as the employee of his general employer and, in addition, to be treated as though he was the employee of the temporary employer as well? Thus in the Mersey Docks case situation, it is tempting to think that liability will not be shared: the employee is used, for a limited time, in his general employer's own sphere of operations, operating his general employer's crane, exercising his own discretion as a crane driver. Even if the right of control were to some extent shared, as in practice it is almost bound to be, one would hesitate to say that it is a case for dual vicarious liability. One could contrast the situation where the employee is contracted out labour: he is selected and possibly trained by his general employer, hired out by that employer as an integral part of his business, but employed at the temporary employer's site or his customer's site, using the temporary employer's equipment, and subject to the temporary employer's directions. In such a situation, responsibility is likely to be shared. A third situation, where an employee is seconded for a substantial period of time to the temporary employer, to perform a role embedded in that employer's organisation, is likely to result in the sole responsibility of that employer."

Finally under this head, there is the decision of the Court of Appeal in Hawley v Luminar Leisure Ltd [2006] EWCA Civ 18. The claimant had been seriously injured as a result of an assault by a doorman employed by a company, ASE, that had gone into liquidation after the incident who worked at a club belonging to Luminar. He had worked at the club for about two years at the date of the incident, and wore a Luminar uniform. The trial judge found the following:

"In my judgment having regard both to the contractual documentation, the regulatory documentation and the written and oral evidence of Mrs O'Brien, Mr Pullman and Mr Beckford as to what happened in practice, it is plain that Luminar sought to have, and did exercise detailed control not only over what the door stewards were to do in supplying services but how they were to do it. It is plain that the manager of the club was the person to whom door staff looked and to whose wishes they deferred both in terms of where they should be stationed but also on detailed matters of who should be admitted and what should be done about customers who were proving troublesome. They acknowledged as much in their job description for which they had to sign and in terms of the code of conduct which made it clear that it was the Luminar code that they were operating. In practice, the only freedom which ASE had, and the only role which the head doorman had independent of the detailed control of the club management, was to nominate who should work on a particular night, and who should replace somebody who did not turn up. Where so required, however, ASE had no option but to accept Luminar's decision that a particular steward should not work at the club either on a particular occasion or permanently and comply with it instantly and without any reason being given. Mr Pullman saw everybody working at the club as operating as a team. Mr Beckford acknowledged that, from the point of view of the public, the door staff were equally part of the Luminar staff as were the bar staff. Mrs O'Brien regarded them all as a team regardless of whether they were door staff supplied by ASE or bar staff supplied by Luminar. The arrangements between Luminar and ASE concerning who was to be the employer of stewards and who should bear, and insure against, the risk of liability to third parties by reason of the conduct of the door stewards, cannot override the clear factual position which vested control over how the door stewards did their job in Luminar club management.

It therefore follows, in my judgment, that the control that Luminar had over ASE's employees was such as to make them temporary deemed employees of Luminar for the purposes of vicarious liability."

The Court of Appeal upheld the judge's decision, finding it unnecessary in the circumstances to decide whether the correct test for vicarious liability was that formulated in Viasystems by May LJ or that by Rix LJ.

Vicarious liability for borrowed employees: discussion

In our judgment, Biffa did not, and could not, establish vicarious liability under this head. Pickfords' men were skilled welders. They used their own welding equipment, their own gas cylinders and their own weld rods. They had their own foreman on site to supervise them, apart from Mr Brix. There could be no question of OT exercising control over the manner in which they welded. Nor can it be said that they became part of the business or undertaking of OT: their work for OT was to be very temporary, over one weekend. The precautions to be taken when welding should have been known to the welders, as the judge found, and if we focus on the findings of negligence made by the judge in paragraph 84 of his judgment, as indicated by May LJ in Viacom, (1) and (2) were the responsibility of HU; and (3) was a failure to comply with the Method Statement and the Hot Work Permit issued by HU, as were (4) and (5). Safety precautions generally were the responsibility of HU, and it was Mr Brix who by issuing the Hot Work Permit decided whether the work would be carried out, whether it was safe for it to be carried out, and when it was to be carried out. He had the power to stop the work if safety so required. It was too the responsibility of Pickfords' foreman to ensure that the requirements of the Method Statement and Hot Work Permit were complied with. There was nothing in the exchange between Pickfords and OT of 24 June 2004 to indicate that OT were to have control over Pickfords' employees, and no basis to infer that that was agreed orally.

In our judgment, the judge erred in focusing on the fact that Millteam could exercise supervision over Pickfords' employees. Supervision is not control. An architect or a clerk of the works may supervise the work of a contractor's employees, but he does not exercise control for the purposes of vicarious liability. In paragraph 254 of his judgment, which we have set out above, the judge referred to the supervision in which Mr Isaksson and Mr Ek were involved. But the right to supervise does not, without more, carry with it the entitlement to instruct how to do the work, particularly where the employees are not unskilled labourers but skilled welders. It is true that Mr Nygren accepted that if the Millteam personnel had considered that the Pickfords men were doing something unsafe, he would have expected them to say so and that Pickfords' men would heed what they said. But that in the context did not indicate a right to control: one would expect any worker to heed a warning of lack of safety, irrespective of its source. In any event, Millteam were themselves independent contractors.

Similarly, in paragraph 257, also set out above, the judge referred to the need of Pickfords to know what to do and how to do it. However, any contractor who employs a sub-contractor will identify what work is to be carried out by the subcontractor. In fact, on 26 June 2004, Pickfords' men started work before the Millteam men arrived, which is inconsistent with the former needing to be told by the latter what they should do. The judge did not explain the basis for his finding that Pickfords needed directions as to how to do their work, and in our judgment there was no basis for that finding. The entitlement of OT to control Pickfords' men had to be established, rather than assumed, and it was not. In paragraph 257(4) the judge referred to the authority given by OT to Pickfords. However, that authority was no more than a contract for the provision of the services of Pickfords' men, and could not of itself authorise an assumption of the right of control over them.

This is not a case, such as Luminar, or as Rix LJ described in Viasystems, in which to all intents and purposes the employee is integrated into the business undertaking of the person sought to be made vicariously liable. It was not argued before the judge that more than one party could be vicariously liable for the negligence of Pickfords' employees. The decision in Viasystems turned at least in part on the presence of both defendants' employees when the negligent act took place. Here, in so far as there was a presence, it was of Millteam's employees, not OT's.

We accept OT's submission that the judge failed to take sufficiently into account that, as Lord Simon said in Mersey Docks and Harbour Board, the burden on a party seeking to show a transfer or assumption of liability to or by the hirer of an employee is a heavy one. This does not mean that the burden of proving the relevant facts is any different from that in any other civil trial. It emphasises that exceptional facts are required for a contractor to be vicariously liable for the negligence of his sub-contractor. Those facts were not present in this case.

Lastly, what to our mind is decisive is the fact that Pickfords supplied not the two welders contracted for by OT, but four. This is a factor that the judge did not address. We can see no basis on which it could be said that OT was vicariously liable for employees for whose work they did not contract. There was no evidence, and certainly no finding, that OT knew that four men were to be supplied. We ask, rhetorically, which of the four were OT entitled to control, and for which of the four were they liable? What basis is there for distinguishing between the vicarious liability for two of them and the vicarious liability for the other two? Our answer is: none.

For these reasons, we would reverse the judge's finding that OT was vicariously liable for the negligence of Pickfords' personnel on the basis that it had temporarily become OT's employer.

Liability for ultra hazardous acts

In discussion of the principle applied by Ramsey J under this head, expressions such as "ultra-hazardous" or "extra-hazardous" and "inherently dangerous" have been used, but we apprehend that there is no difference of substance between them, and we shall use them indiscriminately.

In paragraphs 259 to 288 of his judgment, Ramsey J considered, under the heading "Non-delegable duties in tort", the liability of OT to Biffa on the basis that the work carried out by Pickfords was extra-hazardous. Biffa relied on the judgment of the Court of Appeal in Honeywill v. Larkin [1934] 1 KB 191, a much-criticised decision which however is binding on this court as it was on him. The Judge derived the following principle from that and other authorities:

"267. In my judgment, the principle relevant to this case, to be derived from Honeywill is that a person who employs an independent contractor will be liable for the negligence of that independent contractor where the independent contractor is engaged to carry out "extra-hazardous or dangerous operations". Such operations are those which, in their very nature, involve in the eyes of the law special danger to others and include removing support from adjoining houses, doing dangerous work on the highway, or creating fire or explosion. Such operations are inherently dangerous although if carefully and skilfully performed they will cause no harm. The employer is under a non-delegable duty to see that all reasonable precautions are observed, otherwise he will be responsible for the consequences. The employer is liable even if he has stipulated that all reasonable precautions should be taken by the independent contractor, together with an indemnity."

In paragraph 268 of his judgment the Judge set out OT's submissions as to why that principle was inapplicable in the instant case:

"268. OT submits that the principle should not be applied in this case for the following reasons:

(1) The concept of extra-hazardous acts and the decision in Honeywill has been severely criticised and it is submitted that the case should be limited to its particular facts, which are very different from this case. OT relies on the decisions cited by Professor Atiyah in Vicarious Liability in the Law of Torts at p.372, Bottomley v. Todmorden Cricket Club [2003] EWCA Civ 1575 and Stevens v. Broadribb Sawmilling Co Pty Ltd 160 CLR 16.

(2) In Honeywill the tortfeasor was not carrying out work for the benefit of the building owner but was carrying out work for Honeywill which was not of any benefit to the building owner. Here, Pickfords were carrying out work for the benefit of the Claimant building owners.

(3) In the Scottish case of MTM Construction Limited v. William Reid Engineering Limited [1998] SLT 211 the court found that an intermediate contractor was not liable in tort for the acts of an independent contractor. Where there was a contractual chain, it was held that it was only the ultimate employer and the party who carried out the works who had liability for the negligent performance of works which are extra-hazardous and inherently dangerous resulting in loss to a third party.

(4) Welding on a building site is not an ultra-hazardous activity.

(5) That there cannot be strict liability on OT where the Claimants had run the risk of damage from the dangerous thing or where the works were carried out for the benefit of the Claimants. In such circumstances, it must be shown that OT were negligent."

The judge considered whether the activity carried out by Pickfords had been ultra-hazardous. He said:

"272. Clearly, the decision in Honeywill is binding on me. However, I observe that the concept of what is a "hazardous" or "extra-hazardous" activity is a difficult one to apply to cases which come before the Technology and Construction Court. Many activities in the construction industry are potentially hazardous. The classification of hazards and the use of risk assessments are more consistent with an approach where, as Mason J said (in Stevens v. Broadribb), the creation of greater danger imposes a higher duty of care than an uncertain divide between levels of hazard which impose liability on the person who employs competent independent contractors and those which do not."

Nonetheless, he held:

"284. The carrying out of the Welding and Grinding Works with the consequent sparks and hot metal in a location where there is combustible material is, in my judgment, an inherently dangerous operation.

…

286. In this case, the work being carried out by Pickfords was extra-hazardous. The Welding and Grinding Works were being carried out within the Ball Mill which had been operating and where there was inevitably combustible waste. The sparks and welding operations were inherently dangerous in such circumstances. I consider that OT's duties in tort in relation to such operations were non-delegable and that OT is therefore liable for the acts of Pickfords even if (contrary to the finding above) Pickfords would otherwise be independent contractors."

Before us, Mr Allen submitted that each of his submissions summarised by the judge in paragraph 268 of his judgment should have been upheld. Mr Patten submitted that they should be rejected for the reasons given by the judge.

It is convenient to address first the finding of the judge that the activities of Pickfords were ultra-hazardous. For that purpose, it is necessary to consider the principle applied in Honeywill.

The principle in Honeywill

The decision in Honeywill has indeed been the subject of substantial criticism. The plaintiffs had wanted to take photographs of the inside of a cinema in which they had carried out acoustic work. They employed the defendants to take the photographs. The photographer, an employee of the defendant, used a chemical flashlight which "involved the ignition of a certain amount of magnesium powder in a metal tray or holder held above the lens. That powder on being ignited flared up and developed an intense heat, and hence was dangerous if brought near fabrics or other inflammable material, so that not only must precautions be taken against draughts, but there must be no inflammable material too close when the flash is fired." Through the negligence of the photographer, the magnesium powder was ignited close to a curtain, which caught fire, and damage was done to the cinema. The cinema company threatened to sue the plaintiffs for the cost of the repairs. Having taken advice, the plaintiffs paid the cinema company, and then brought proceedings against the employers of the photographer to recover the payment. The defendants contended that the plaintiffs had been under no legal liability to pay the cinema company, and that they were therefore not liable. Given that the fire had been caused by the negligence of the defendants' employee, it is understandable that their case was not sympathetically received. At first instance, Bennett J held that "the work to be done by the defendants for the plaintiffs was not necessarily attended with risk, and that it was work which, as a general rule, would seem to be of quite a harmless nature", and he gave judgment for the defendants. The Court of Appeal allowed the plaintiffs' appeal. The judgment of the court was given by Slesser LJ, who said, at [1934] 1 KB 200:

"To take the photograph in the cinema with a flashlight was, on the evidence stated above, a dangerous operation in its intrinsic nature, involving the creation of fire and explosion on another person's premises, that is in the cinema, the property of the cinema company. The appellants, in procuring this work to be performed by their contractors, the respondents, assumed an obligation to the cinema company which was, as we think, absolute, but which was at least an obligation to use reasonable precautions, to see that no damage resulted to the cinema company from these dangerous operations: that obligation they could not delegate by employing the respondents as independent contractors, but they were liable in this regard for the respondents' acts. For the damage actually caused the appellants were accordingly liable in law to the cinema company, and are entitled to claim and recover from the respondents damages for their breach of contract, or negligence in performing their contract to take the photographs.

The learned judge has found for the respondents because he has held (founding himself on the words of Lord Watson in Dalton v. Angus (1881) 6 App Cas 740, 831 that the work to be done by the respondents for the appellants "was not necessarily attended with risk. It was work which, as a general rule, would seem to be of quite a harmless nature." But, with respect, he is ignoring the special rules which apply to extra-hazardous or dangerous operations. Even of these it may be predicated that if carefully and skilfully performed, no harm will follow: as instances of such operations may be given those of removing support from adjoining houses, doing dangerous work on the highway, or creating fire or explosion: hence it may be said, in one sense, that such operations are not necessarily attended with risk. But the rule of liability for independent contractors' acts attaches to these operations, because they are inherently dangerous, and hence are done at the principal employer's peril."

There are a number of difficulties with this judgment, not least of which is the reversal of the trial judge's finding of fact that flash photography was of a quite harmless nature. In our judgment, caution is required when considering cases such as Dalton v Angus that were relied upon by the Court of Appeal in Honeywill (and also by Ramsey J in the present case). Dalton v Angus was a case of property damage caused by withdrawal of support by a neighbouring building. The headnote accurately summarises the basis of the decision of the House of Lords:

"Held, that the Plaintiffs had acquired a right of support for their factory by the twenty years' enjoyment, and could sue the owners of the adjoining house and the contractor for the injury."

It was thus a case of liability in private nuisance, of interference with an easement, rather than the tort of negligence. See similarly Hughes v Percival (1883) 8 App Cas 443. Cases of escape of fire (such as Black v The Christchurch Finance Company [1894] AC 48, in which the defendant was liable although there was no finding of negligence on the part of his contractor) are similarly to be explained. Holliday v. National Telephone Company [1899] 2 QB 392, on which Slesser LJ relied, was a case of injury caused by dangerous activity on the highway. The Earl of Halsbury LC held that the defendants were liable on two grounds: that the work causing the injury was a joint operation of the defendants and their independent contractor, and that:

"There was here an interference with a public highway, which would have been unlawful but for the fact that it was authorized by the proper authority. The telephone company so authorized to interfere with a public highway are, in my opinion, bound, whether they do the work themselves or by a contractor, to take care that the public lawfully using the highway are protected against any act of negligence by a person acting for them in the execution of the works."

The authority to which he referred was the statutory duty of the local authority: counsel for the plaintiff had cited Hardaker v Idle District Council [1896] 1 QB 335 for the proposition that a statutory duty of the kind engaged was non-delegable. Thus it was a case of a statutory non-delegable duty, as to which see Clerk & Lindsell on Torts, 19^th edition, at paragraph 6-54. Smith LJ, in his judgment cited by Slesser LJ, similarly restricted his judgment to activities on the highway, and his judgment is so treated in Charlesworth & Percy on Negligence, 11^th edition, at paragraph 2-377. In Salsbury v Woodland [1970] 1 QB 325 Widgery LJ said, at 338:

"The second class of case (of vicarious liability for the acts of an independent contractor), which is relevant for consideration, concerns dangers created in a highway. There are a number of cases on this branch of the law, a good example of which is Holliday v. National Telephone Co. [1899] 2 QB 392. These, on analysis, will all be found to be cases where work was being done in a highway and was work of a character which would have been a nuisance unless authorised by statute. It will be found in all these cases that the statutory powers under which the employer commissioned the work were statutory powers which left upon the employer a duty to see that due care was taken in the carrying out of the work, for the protection of those who passed on the highway. In accordance with principle, an employer subject to such a direct and personal duty cannot excuse himself, if things go wrong, merely because the direct cause of the injury was the act of the independent contractor."

See to similar effect Harman LJ at 345 and Sachs LJ at 348. In our judgment, therefore, Holliday v. National Telephone Co. was not authority for the extension of liability for the acts of an independent contractor made by the Court of Appeal in Honeywill.

Brooke v Bool [1928] 2 KB 578, which was approved and followed in Honeywill, was a case of joint enterprise. The defendant, the owner of a shop, and a lodger together entered the shop to investigate a suspected escape of gas. Both carried naked lights. An explosion occurred when the lodger examined a pipe. Clearly, both were negligent, and the defendant would have been liable on conventional grounds without recourse to any doctrine of liability for ultra-hazardous acts. It too therefore does not support the decision in Honeywill.

Criticism of the decision in Honeywill has focused on the uncertain nature of the principle stated by the Court of Appeal. Much in life is "inherently dangerous", even crossing the road, unless precautions are taken. That is particularly true of work on a construction site. What principled basis is there, therefore, for distinguishing between operations that are not inherently dangerous and those that are? We would respectfully echo the wise words of Lord Macmillan in Read v J Lyons & Co Ltd [1947] AC 156. Commenting on the suggested distinction between activities dangerous in themselves and those that are not, he said, at 172:

"In truth it is a matter of degree. Every activity in which man engages is fraught with some possible element of danger to others. Experience shows that even from acts apparently innocuous injury to others may result. The more dangerous the act the greater is the care that must be taken in performing it. This relates itself to the principle in the modern law of torts that liability exists only for consequences which a reasonable man would have foreseen. One who engages in obviously dangerous operations must be taken to know that if he does not take special precautions injury to others may very well result. In my opinion it would be impracticable to frame a legal classification of things as things dangerous and things not dangerous, attaching absolute liability in the case of the former but not in the case of the latter. In a progressive world things which at one time were reckoned highly dangerous come to be regarded as reasonably safe. The first experimental flights of aviators were certainly dangerous but we are now assured that travel by air is little if at all more dangerous than a railway journey."

It is noteworthy that the activity considered by the House of Lords in Read v J Lyons & Co Ltd was the manufacture of explosives: one of the instances given by Sachs LJ in Salsbury v Woodland (in which the felling of a tree near the highway was held not to attract liability on the part of the employer of an independent contractor) of ultra-hazardous activity was precisely that.

As we have seen, Ramsey J himself was troubled by the distinction he was required to make. Professor Atiyah, in his seminal work Vicarious Liability in the Law of Torts, at page 371, said of the decisions imposing vicarious liability on a person who employs an independent contractor to do work that is inherently dangerous that they "have produced some quite preposterous distinctions arising out of the difficulty of saying what is an inherently dangerous operation". We respectfully agree. Like Professor Atiyah, we find it difficult to reconcile the principle in Honeywill with the decision of the House of Lords in Read v J Lyons & Co Ltd [1947] AC 156 rejecting the contention that special rules of absolute liability apply to extra-hazardous acts. In addition, it is in our judgment irrational to exclude from consideration, as Slesser LJ did, precautionary measures. It is ultra-hazardous to drive on a public road without keeping a lookout; it is not an ultra-hazardous activity if a sensible lookout is maintained. As Widgery LJ said in Salsbury v Woodland [1970] 1 QB 325, 337 of the principle applied in that case by the trial judge of imposing liability on the employer of an independent contractor where the act he ordered to be done contained a risk of injury to others:

"Taken literally, it would mean that the fare who hired a taxicab to drive him down the Strand would be responsible for negligence of the driver en route because the negligence would be negligence in the very thing which the contractor had been employed to do."

To put it differently, the precaution of keeping a lookout is an intrinsic part of the activity of driving. It would be even more irrational to take into account factors increasing the hazard (such as the proximity of combustible material to a place where arc welding is carried out) without taking into account the known measures that can and should be taken to reduce or remove that hazard.

In Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1, the High Court of Australia held that the doctrine has no place in Australian law. In Bottomley v. Todmorden Cricket Club [2003] EWCA Civ 1575, Brooke LJ, with whom Waller and Clarke LJJ agreed, said that Honeywill was binding on the Court of Appeal "although it may well be that the House of Lords today would prefer to avoid subtle distinctions between what is and is not "extra-hazardous" and would follow Mason J (in Stevens v Brodribb)".

As Mr Allen accepts, this court is not free to make as robust a decision as that of the High Court of Australia, but in our judgment the doctrine enunciated in Honeywill is so unsatisfactory that its application should be kept as narrow as possible. It should be applied only to activities that are exceptionally dangerous whatever precautions are taken.

The application of the principle in this case

Mr Allen did not challenge the judge's finding that arc welding in the vicinity of combustible organic material is ultra-hazardous. But, as mentioned above, he contended that what OT had authorised was simply welding, and it was entitled to assume that appropriate precautions had been taken to ensure that the activity was not ultra-hazardous.

Mr Patten emphasised that OT, as the designers of the Ball Mill, must have been aware that, having undergone commissioning tests, there would be organic, and therefore combustible, material inside. They would also have known that it could not be removed from the trommel side of the grating. However, he had to accept that the judge made no finding to the effect that OT either knew or ought to have known of those facts. He also has the difficulty that the Risk Assessment described the risk as medium. It is correct, as Mr Patten pointed out, that the Risk Assessment was found by the judge to have been negligently prepared. However, it stated that the work area was to be kept free from flammable or combustible material; and if that could not be done, the work should have been stopped, as stated in the Briefing Confirmation, and the work method reconsidered. The Risk Assessment similarly required the underground of the Ball Mill to be kept wet; but it was not; and it required the working place to be monitored for one hour after the finish of the hot works: but it was not.

We think it necessary to revert again to the judgment of Slesser LJ in Honeywill. In our judgment, the inherently dangerous activity that led to the liability of the defendant was the use of magnesium flash photography in the cinema: "To take the photograph in the cinema with a flashlight … was a dangerous operation in its intrinsic nature, involving the creation of fire and explosion on another person's premises." Slesser LJ did not identify the dangerous operations as the use of flash photography in the vicinity of curtains or other inflammable material. Similarly in the present case, on the basis of Honeywill the activity to be assessed is welding per se, in the Ball Mill, not welding in the vicinity of unwetted combustible material. Mr Patten rightly concedes that welding as such is not ultra-hazardous. The error of the judge, understandable given the unsatisfactory principle involved, was to take into account in assessing the dangerousness of the welding the factors which were not OT's responsibility rendering it hazardous while leaving out of account the factors that would and should have rendered it safe. It follows that OT should not have been held vicariously liable for the damage caused by its having been carried out without the proper precautions identified by the judge.

With respect to the judge, this conclusion is consonant with common sense. It was curious, to say the least, that OT in Sweden should be liable without negligence on its part for welding work in England carried out by skilled welders employed by an independent subcontractor on a site in which another company, HU, was generally responsible for safety.

In these circumstances it is unnecessary for us to consider Mr Allen's other submissions under this head.

Conclusion

For the reasons set out above, we allow this appeal and dismiss Biffa's claim against OT.

At the beginning of this judgment we described the bases of liability in question in this appeal as exceptional. Indeed, in our judgment, the principle in Honeywill is anomalous. It is important that it is understood that its application is truly exceptional.