TSE NGAN HEUNG v. THE RITZ-CARLTON LTD. AND OTHERS

CACV 353/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 353 OF 2001

(ON APPEAL FROM HCPI 565 OF 1999, HCPI 570 OF 2000,
HCPI 658 OF 2000)

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HCPI 565/1999

(consolidated pursuant to Order of Mr Justice Seagroatt dated 21st July 2000)

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J U D G M E N T

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Hon Rogers VP:

1. This is an appeal from a judgment of Seagroatt J given on 18 January 2001. The point at issue on this appeal is whether the 1st defendant is vicariously liable for the negligent driving of the 2nd defendant, Lo Sin Tak. As explained in the judgment below, the dispute is, in effect, a dispute between two insurance companies as to which will ultimately bear the damages which will be awarded.

2. The plaintiffs in the cases are two persons who were pedestrians in the evening of 9 March 1998 in the vicinity of Queensway. They were struck by a car driven by the 2nd defendant. Their injuries were serious. It is not disputed that the 2nd defendant was wholly responsible for the damage. The point taken on this appeal is that the judge wrongly came to the conclusion that the 1st defendant was not vicariously liable for the negligent driving of the 2nd defendant. It is said that since the date of the hearing there has been a fundamental change in the law relating to vicarious liability of employers for the negligence of their employees.

The facts relating to this case

3. There was no real challenge to the findings of fact by the judge. Counsel for the appellant sought to encapsulate the facts in a way that in some respects glossed over the findings. In other respects the citations of the evidence which counsel gave did not appear to support the way the propositions were put forward.

4. The 2nd defendant was employed by the 1st defendant as a doorman. As such he would also have to act as a car jockey. As part of his duties, he would have to move cars parked in the hotel forecourt both when hotel guests required their cars to be parked and also if parked cars constituted an obstruction. The 2nd defendant was under the supervision of the baggage master of the hotel. On the night in question that was Mr Wilson Leung Tat-kei.

5. The hotel provided limousine services for its guests by having on permanent hire cars from Parklane Limousines Services Limited. Only one driver would be assigned to and responsible for driving a particular car. The drivers worked in shifts. When the driver went off duty he would park his car in the hotel forecourt and leave it there. The drivers would leave their keys with the hotel, normally apparently with the hotel reception, so that, if necessary, the car could be moved whilst the driver was not on duty. Nobody other than the assigned driver would drive a Parklane car. Hence, although a car jockey might have to move a car if it was an obstruction or, possibly, if more space was needed, none of the hotel staff would use the car either for hotel purposes or for their own purposes. Moreover, the Parklane drivers were not under the control or direction of the hotel staff.

6. The hotel staff also worked in shifts. Whilst on duty they might, if time were available, be allowed to make use of the staff canteen. The evidence before the judge showed that this arrangement had drawbacks. Generally speaking, the food was not considered particularly appetising and the canteen closed early in the evening. After the canteen had closed regular meals could not be obtained. As can be imagined, staff would often wish to supplement their food with food obtained outside.

7. Mr Leung gave evidence, which the judge accepted, as to how this could be done. If time were available, staff, such as bellboys, were given permission to leave the premises to obtain food. This would then be brought back and, apparently, shared amongst the staff. The staff leaving the premises might collect the food when they were out of the hotel on an errand or other hotel business. If one of the Parklane drivers was prepared to take one of the hotel staff to fetch food, that could be permitted. Otherwise the hotel staff would only be permitted to go by taxi to fetch food. On no occasion would a bellboy, or anybody else, be permitted to go in a car belonging to a hotel guest being driven by a car jockey to fetch food. Nor would a car jockey be permitted to drive a Parklane car to fetch food, whether with another hotel employee or not.

The night in question

8. Mr Chung Tung Shing was the driver of Mercedes-Benz FF2282. He finished work at about 7 p.m.. He parked his car in the No. 1 space outside the hotel. In that space the car did not cause any obstruction. He gave the car keys to the 2nd defendant. He saw the 2nd defendant put the keys in the drawer of the valet parking counter, as usual. At some time between 7 p.m. and 9 p.m. the car had been moved to parking space No. 4. There was no apparent need to move the car from parking space No. 4 and it was not causing an obstruction. Nevertheless the security video shows that it was moved again. The 2nd defendant drove the car a few feet from its parked position. The car stopped for a few seconds, somebody, who the judge identified as Kwok Sze Lun, a bellboy, got in and the car drove off. It was a wet evening. The car was driven recklessly. The 2nd defendant lost control and the plaintiffs were severely injured. Mr Wilson Leung's evidence was that he had not given permission either to the 2nd defendant to take the car or to Mr Kwok to leave the premises. The judge specifically stated in his judgment that he was satisfied that Mr Leung had told the truth in his evidence. The judge had himself questioned Mr Leung and observed him closely.

The appeal

9. In a late amendment to the Notice of Appeal, the appellant had sought to raise a point as to the use which had been made of the witness statements of the 2nd defendant who had not given evidence. On the opening of the appeal, counsel for the appellant indicated that the new point was not to be pursued after all.

10. The point argued on the appeal was that the law as to vicarious liability had been fundamentally changed as a result of the decision of the House of Lords in Lister and others v Hesley Hall Ltd [2001] 2 WLR 1311. It was said that the judge had applied the old law and that if the law as expounded in the Lister case were applied, the hotel would be held vicariously liable for the negligent driving of the 2nd defendant.

The Lister case

11. The Lister case concerned the liability of the owners and managers of a school for sexual abuse committed by the warden of a boarding house of that school. The warden had clearly committed acts which were not merely tortious but criminal and well contrary to the instructions and intention of the owners and managers of the school. Nevertheless, the question which the House of Lords had to determine was whether Hesley Hall Ltd was vicariously responsible for those acts committed by the warden.

12. Their Lordships took as the starting point the exposition of the law of vicarious liability in Salmond, Law of Torts 1st Edition 1907, as repeated in Salmond and Heuston on the Law of Torts, 21st Edition. The statement which was described as being the classic statement of the concept was:

"A master is not responsible for a wrongful act done by his servant unless it is done in the course of his employment. It is deemed to be so done if it is either (1) a wrongful act authorised by the master, or (2) a wrongful and unauthorised mode of doing some act authorised by the master."

The text also contains the following:

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

13. The speeches in the House analysed many of the cases on vicarious liability. In particular Lloyd v Grace, Smith & Co [1912] AC 716 and Morris v C W Martin & Sons Ltd [1966] 1 QB 716. Lord Steyn pointed out at page 1319 that the Salmond formulation was crucially dependent on identifying what specific act the employee was engaged upon. In this respect he derived considerable help from the quotation from Diplock LJ's judgment in Ilkiw v Samuels [1963] 1 WLR 991 at 1004 which was cited by Scarman LJ in Rose v Plenty [1976] 1 WLR 141 at 147-148.

14. The same passage from Diplock LJ's judgment in Ilkiw v Samuels was also cited by Lord Clyde at page 1327. He did so in the context of saying that in considering the scope of the employment a broad approach should be adopted.

15. Lord Hobhouse at page 1332 spoke in terms of employers being liable for an employee's tortious act or omission because the employer had entrusted the performance of the employers' duty to the particular employee. He concluded at page 1334A-B after a review of the cases saying:

"All these cases illustrate the general proposition that, where the defendant has assumed a relationship to the plaintiff which carries with it a specific duty towards the plaintiff, the defendant is vicariously liable in tort if his servant, to whom the performance of that duty has been entrusted, breaches that duty."

Lord Millett, again, also referred to the judgment of Diplock LJ. He pointed out, as did the other judges, that the mere fact that the employment gave an opportunity to the servant to commit a wrong was not enough to make the employer liable. He, too, also considered the importance of analysing the task upon which the employee was engaged at the time the tort was committed and the duties which he was engaged to perform broadly defined. He pointed out that an employer would normally be liable if the risk was one which experience had shown was inherent to the nature of the business being conducted.

16. When their Lordships referred to the requirement that attention had to be concentrated upon the closeness of the connection between the act of the employee and the duties for which he was engaged, it was in the context of a proper analysis of the two.

The judgment below

17. When dealing with the question of law of vicarious liability the judge below referred to the line of cases from Canadian Pacific Railway Co v Lockhart [1942] AC 591 and Harvey v O'Dell [1958] 2 QB 78 and in particular of the approach of the judicial committee of the Privy Council which was cited by McNair J in the latter case:

"... 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."

18. This was, again, taken from Salmond on Torts. This time the 9th Edition. The passage cited follows the passages referred in paragraph 12 above.

19. I can see no grounds for criticising the judge in this approach. In considering, as he clearly did, the connection between the unauthorised and wrongful act and the scope of the 2nd defendant's employment, the judge clearly performed precisely the task which the House of Lords considered he should.

20. The 2nd defendant was not employed to drive Parklane cars. He would only be authorised to move them in special circumstances. Either he would be instructed by Mr Wilson Leung to do so or it would be a matter of necessity because the Parklane car would have been causing an obstruction. On the relevant occasion he had not been told to move the car. There was no cause for him to move the car as it was not causing an obstruction. The only explanation for his driving the car was that he had obtained the keys from the valet parking desk. He had not been authorised to drive the car. He took a bellboy out to buy some food on a wet night. As such, his employment gave him the opportunity to obtain the keys and make use of the car for his own private purposes. The use of the car to drive a bellboy to buy food was equally outside the acts which he had been employed to do, as if he took the car for a joy-ride to the New Territories. In my view, this appeal should be dismissed with costs.

Prompt and due attention to the proper preposition of skeleton arguments

21. Before concluding I should state that although skeleton arguments were filed well prior to the hearing, the day before the hearing there was produced a document entitled "Notes of appellant's legal argument". When it came to the oral argument it became quite clear that this document was essentially a substitution for the earlier skeleton argument. As it turned out, the manner in which the facts had been set out on pages 7 and 8 of these Notes was disputed. It was not until the mid-morning adjournment that hand written notes as to what were said to be the relevant portions of the transcript were available.

22. This manner of producing skeleton arguments is of no assistance in reaching a proper and speedy resolution of the dispute. Appeals are conducted on the basis that the court's and the parties' attention is drawn to the relevant points prior to the hearing. In that way, attention can be given to those points so that the argument can become focused. Late substitution of skeleton arguments is simply counter-productive.

Hon Woo JA:

23. I agree with the Vice-President.

24. The only close connection between the negligent driving of the 2nd defendant and his employment by the hotel that Mr Griffiths SC, for the appellant, was able to point out are that the 2nd defendant had the opportunity to drive the Parklane car on the night in question and that he, with Kwok Sze Lun, was obtaining food for themselves and their colleagues, which Mr Griffiths described as being for the benefit and purposes of the hotel.

25. The important evidence accepted by the trial judge is that the 2nd defendant was never authorised or permitted to get food for the hotel staff by driving any of the Parklane cars. Though the 2nd defendant was authorised to drive the Parklane cars only when they caused obstruction in the hotel forecourt, and that was for the business and benefit of the hotel, in my view, there was insufficiently close connection between the 2nd defendant's employment and his driving the Parklane car at the material time, causing the accident. He was employed and certainly authorised to drive the Parklane cars to avoid obstruction, and apart from that limited purpose, he was not allowed to drive those cars at all. He might be permitted to go outside the hotel to buy food, but that was not a duty within his employment. At the material time, he was not driving for the hotel's business or purposes or performing any part of his duties towards the hotel or towards the hotel guests that the hotel had entrusted upon him to perform. It would stretch the law of vicarious liability as expounded in Lister v Hestley Hall to an unacceptable extent to say that the 2nd defendant's driving of the Parklane car to get food, which was expressly not allowed, as being within the general scope of his employment, however broadly one views that scope. In the circumstances, I am also of the view that the appeal must be dismissed.

Hon Le Pichon JA:

26. I agree with both judgments.