Michael Dawson v Michael Aronis - [2005] SADC 165

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
MICHAEL DAWSON v MICHAEL ARONIS
Reasons of His Honour Judge Muecke
15 December 2005
MAGISTRATES - APPEALS FROM AND CONTROL OVER MAGISTRATES - SOUTH AUSTRALIA
Driver of defendant's taxi-cab solely responsible for damage to plaintiff's vehicle - taxi-cab being driven by driver under a Shift Lease Agreement with the defendant - Held: driver the agent of the defendant when he caused damage to plaintiff's vehicle and, accordingly, defendant liable to plaintiff for this damage.
Passenger Transport Act (1994) s.3(a) s.58 , referred to.

MICHAEL DAWSON v MICHAEL ARONIS
[2005] SADC 165

This is an application to review a minor civil decision.
On 24 September 2003 an accident occurred at the junction of Wakefield Street and Gawler Place Adelaide. The driver of Michael Dawson’s (“the plaintiff”) motor vehicle was turning right from Wakefield Street into Gawler Place. Other vehicles travelling in a northerly direction along Gawler Place had come to a halt and the driver of the plaintiff’s vehicle could not fully complete her turn. She was virtually stationary at the time that a vehicle that was facing east on the northern side of Wakefield Street was reversed and collided with the driver’s door and front right panel of the plaintiff’s vehicle causing it damage. The vehicle that was reversed along Wakefield Street was owned by Michael Aronis (“the defendant”).
The defendant’s vehicle was a taxi and at the time of the accident it was being driven by Mohammed Ahmed.
By a claim filed in the Magistrates Court of South Australia on 13 December 2004 the plaintiff sued the defendant for the cost of repairs to his vehicle. He sued the defendant on the basis that Mr Ahmed was driving the defendant’s vehicle whilst in his employ, or alternatively, when he was the agent of the defendant. The plaintiff alleged that in those circumstances the defendant was vicariously liable to him for Mr Ahmed’s negligent driving that caused the plaintiff to suffer loss and damage as a result of the accident. It was alleged that the defendant was liable to him on the basis that Mr Ahmed was either the defendant’s employee, or his agent, when the accident occurred.
By a Defence filed on 31 December 2004 the defendant denied that Mr Ahmed was his employee or his agent and he denied that he was responsible for any damage caused in the accident in which Mr Ahmed was involved. The defendant alleged that Mr Ahmed “drove the taxi under a shift lease agreement which says that the driver is responsible for damages caused by his negligent driving in any accident”.
The action was heard as a minor civil action in the Magistrates Court on 12 May 2005. The learned Special Magistrate who heard the trial delivered her judgment later. She made certain findings and came to certain conclusions which I summarise as follows:
1.The accident was cause solely by the negligence of Mr Ahmed.
2.The sum of $4,878.65 claimed by the plaintiff for the repair of his vehicle was fair and reasonable.
3.That Mr Ahmed was neither an employee nor an agent of the defendant when the accident occurred and, accordingly, the defendant was not liable for the damage to the plaintiff’s car.
In view of the third conclusion the learned Special Magistrate dismissed the plaintiff’s claim. (She awarded the defendant costs in the sum of $50.00 for his attendance at the trial.)
By Application filed in this court on 7 September 2005 the plaintiff applied to review this decision. I considered the application as a complaint about the Magistrate’s conclusion that no relationship of agency existed between the defendant and Mr Ahmed. I did not take the plaintiff’s application to complain about the conclusion that Mr Ahmed was not an employee of the defendant. (I have no doubt that the learned Special Magistrate correctly decided that Mr Ahmed was not the defendant’s employee at the time of the accident.)
The defendant did not seek to have reviewed the findings of the learned Special Magistrate that are referred to in items 1 and 2 in paragraph … above. Accordingly, it was not in issue upon the hearing of the application that Mr Ahmed was solely responsible for the accident and that the sum claimed by the plaintiff was fair and reasonable.
The application to review the decision of the learned Special Magistrate was heard by me on 1 November 2005. Mr R Peters, on behalf of RAA Insurance, appeared for the plaintiff and Mr T Kavanagh, of counsel, appeared for the defendant. They both directed their submissions to the question whether Mr Ahmed was the agent of the defendant when the accident occurred on 24 September 2003.
I have referred to the defendant’s allegation in his Defence that Mr Ahmed was driving his taxi under a Shift Lease Agreement which he alleged “says that the driver is responsible for damages caused by his negligent driving in any accident”. A copy of the Shift Lease Agreement was tendered before the learned Special Magistrate by the defendant. The defendant also tendered a blank copy of such an agreement. Those two exhibits had been returned to the parties after judgment in the Magistrates Court and were not before me. The learned Special Magistrate did, however, refer to a number of what she considered to be the relevant provisions of the agreement. In the agreement the defendant is apparently referred to the “Licensed Operator” whilst Mr Ahmed is referred to as the “Shift Lessee”.
Clause 1 of the agreement defines the meaning of certain words, including “taxi‑cab”. That is defined to mean:
the taxi-cab described in Item 3 of the Schedule or such other taxi-cab as the Licensed Operator may from time to time make available for the purposes of this Agreement, together with all equipment belonging to it.
Other provisions of the agreement provide that the defendant as Licensed Operator warrants that he is the holder of a taxi‑cab license issued by the Metropolitan Taxi‑Cab Board; that Mr Ahmed, as Shift Lessee, undertakes to hire the taxi‑cab from the Licensed Operator for certain shifts to commence each day at 6.00 am and end at 6.00 pm; that the Shift Lessee will pay the Licensed Operator a rental fee for that shift in the amount prescribed for that shift in the Schedule; that the Licensed Operator will pay for all oil, maintenance, registration and license expenses in respect of the taxi‑cab; that the Licensed Operator reserves a “right to nominate from which oil and other commodities are to be purchased”; and that the Shift Lessee is liable for the fuel used during each shift and must ensure that at the conclusion of each shift the taxi‑cab has a full tank of petrol.
By Clause 7 of the agreement the Shift Lessee undertakes at all times during each shift not to drive the taxi‑cab, or allow it to be driven, in circumstances that would deprive the Licensed Operator owner of any current insurance on it, and to permit the Licensed Operator to have access to the taxi‑cab for the purposes of inspecting and testing its condition and for that purpose to return the taxi‑cab, whenever so required by the Licensed Operator, to a garage or depot nominated by him.
By Clause 8 the Licensed Operator is required to undertake to comply with all government regulations in relation to safety measures applicable to the taxi‑cab and the Shift Lessee is not obliged to hire a taxi‑cab that does not meet those regulations.
Clause 9 of the agreement sets out the procedures to be followed by the Shift Lessee in the event of an accident. Clause 9.4 requires the Shift Lessee to indemnify the Licensed Operator in respect of any and all claims for property damage, repair costs and/or loss of use which the Licensed Operator may suffer or become liable to pay where the loss or damage results solely from negligent acts and omissions by the Shift Lessee.
Clause 11 of the agreement provides that nothing in it is intended or is to be construed so as to create a relationship of partners or of employer and employee between the parties or to confer upon the Shift Lessee any interest, proprietary or otherwise, in the taxi‑cab.
The learned Special Magistrate referred to all of these and other provisions of the agreement in her judgment. She also referred to section 58 of the Passenger Transport Act, 1994 (“the Act”) and to previous decisions in the Magistrates Court in which other magistrates had considered the same issue she had to decide and which arises on this application to review. She also a considered High Court authority on the question of agency. She noted what she considered to be a limited degree of control that the defendant had over his driver. She referred to the fact that the same fixed fee was payable by the Shift Lessee to the Licensed Operator regardless of the hours worked by the Shift Lessee.
The learned Special Magistrate concluded that the defendant had established that no agency relationship existed between he and Mr Ahmed.
I have come to a different conclusion to that ultimately reached by the learned Special Magistrate. I have concluded that the provisions of the Act and the terms of the Shift Lease Agreement between Mr Ahmed and the defendant are together such as to support a finding that at the time of the accident Mr Ahmed was the defendant’s agent and that the defendant has not proved that Mr Ahmed was not acting in the course of such agency when the accident occurred on 24 September 2003 whereby the plaintiff’s vehicle was damaged.
The Act is expressed to be an Act to reform public transport services within South Australia, and for other purposes. The objects of the Act are to benefit the public of South Australia through the creation of a passenger transport network that is focused on serving the customer, providing certain things and achieving certain other matters as set out in section 3(a) of the Act.
The Act’s objects are also to provide a system of accreditation for the operators of passenger transport services, the drivers of public passenger vehicles, and the providers of centralised booking services within the passenger transport industry. That is said to be provided in order to encourage and facilitate the observance of industry standards for passenger transport within South Australia. The objects of the Act are also to require the licensing of taxi‑cabs and to provide for a new approach to the provision of transport services by the public sector.
Passenger transport services is defined as meaning (amongst other things) a service consisting of the carriage of passengers for a fare or consideration by a motor vehicle.
The defendant conceded that he, as a taxi operator, came within the definition of operating a “passenger transport service”.
His taxi‑cab that Mr Ahmed was driving at the time of the accident was, presumably, a “public passenger vehicle” as it was a vehicle used to provide a passenger transport service.
The Act also provides a system of accreditation of operators. Section 27 of the Act sets out detailed provisions for the accreditation of operators who operate a passenger transport service. The Act provides, in section 28, that a person must not drive a public passenger vehicle for the purposes of a passenger transport system unless the person holds an appropriate accreditation under the Act. The section provides that the purpose of accreditation was to attest that drivers are considered to be of good repute and are in all other respects fit and proper persons to be drivers of a public passenger vehicle to which the accreditation relates.
The Act provides disciplinary powers for persons who are or have been accredited under the Act. The Act makes (in Part 6) detailed provisions applicable to taxis and with which an operator of a passenger transport service (the defendant in this case) must comply.
Section 58 of the Act is headed “Liability of operators for acts or omissions of employees or agents”. The section reads:
For the purposes of this Act, an act or omission of an employee or agent of a person who operates a passenger transport service will be taken to be an act or omission of that operator unless he or she proves that the employee or agent was not acting in the course of employment or agency.
This section was referred to before the learned Special Magistrate and before me. I consider that this section has some important features. First, it does not appear that the legislature contemplated that an operator of a passenger transport service would, for the purposes of the Act, operate such a service by someone other than a person who is his or her employee or his or her agent. Secondly, any act or omission of the employee or agent of the operator of a passenger transport service will be taken to be an act or omission of the operator unless certain circumstances are proved by the operator. The prima facie position will obtain unless the operator proves that his employee or agent was not acting in the course of employment or agency. This, of course, can only arise if the act or omission was an act or omission of the operator’s employee or agent. It is only then that the issue whether the employee or agent was acting outside the course of his employment or agency with the operator will arise.
There is a considerable volume of case law as to what might constitute circumstances whereby an employee or agent will not be acting in the course of employment or agency. It is unnecessary for me to consider those authorities because if Mr Ahmed was the defendant’s agent when he was driving the defendant’s taxi‑cab on the day of the subject accident there is no doubt that the accident occurred whilst he was acting in the course of such agency.
Mr Ahmed was driving the defendant’s taxi‑cab as a taxi‑cab pursuant to the agreement. He was reversing along Wakefield Street in order to pick up a fare on the other side of Gawler Place. He was not, for example, taking his children to school or driving the taxi‑cab to West lakes to go to the football. It has not been suggested, nor could it be suggested, that in reversing to pick up a fare Mr Ahmed was acting other than in the course of his agency for the defendant, assuming he was driving the taxi‑cab that day as the defendant’s agent.
I consider that the structure and objects of the Act and the particular provisions of the Act to which I have referred (including section 58) constitute strong indicia of an agency relationship between the defendant and Mr Ahmed at the time of the subject accident.
I also consider that the terms of the agreement between Mr Ahmed and the defendant are further strong indicia of a relationship of agency between them.
Importantly, the defendant had to provide to Mr Ahmed a taxi‑cab for shifts to commence at 6.00 am and 6.00 pm each day; the defendant had to pay for all oil and other commodities (except fuel), maintenance, registration and license expenses in respect of the taxi‑cab provided; the defendant was entitled to nominate from where oil and other commodities were to be purchased by Mr Ahmed; Mr Ahmed had to ensure that he would not drive the taxi‑cab or allow it to be driven in circumstances that would deprive the defendant of any insurance on it; Mr Ahmed had to permit the defendant to have access to the taxi‑cab for the purposes of inspecting and testing its condition; the defendant had to undertake to comply with all government regulations in relation to safety measures applicable to the taxi‑cab and Mr Ahmed was not obliged to hire a taxi‑cab that did not meet those regulations.
Clause 9.4 of the agreement requires Mr Ahmed to indemnify the defendant in respect of any or all claims for property damage, repair costs, and/or loss of use which the defendant may suffer or become liable to pay where the loss or damage results solely from negligent acts or omissions by Mr Ahmed. In my view, that clause contemplates the very circumstances of this case. It envisages that the defendant will be liable to the plaintiff for property damage suffered to his vehicle in the subject accident and it provides that in those circumstances Mr Ahmed will indemnify the defendant for what the defendant is liable to pay to the plaintiff for damage to the plaintiff’s vehicle.
Furthermore, I do not consider that the omission in Clause 11 of the agreement to any reference to agency is an oversight. I consider that the parties intended by that clause to provide specifically that the agreement was not intended to be construed so as to create a relationship of partners, or of employer and employee between them. My view is that the fact that they did not, by clause 11, seek to preclude the creation of a relationship of agency meant that the parties contemplated an agency relationship between them. The fact that it was made in the context of the Act supports that construction.
Furthermore, I consider that when Mr Ahmed was driving the defendant’s vehicle he was subject to control by the defendant in a number of ways. I agree with Mr Peters that under the Act the defendant, as operator, has to exert considerable control over his driver just to comply with the provisions of the Act. I also consider that the provisions of the agreement to which I have referred evidence control by the defendant over Mr Ahmed in important ways. That is also evidence that an agency relationship existed between the parties to the agreement.
For these reasons I have concluded that when Mr Ahmed was driving the defendant’s taxi‑cab on the day of the subject accident he was doing so as agent of the defendant and when doing so he was acting in the course of that agency.
I allow the Application for Review and set aside the Orders of the learned Special Magistrate.
I order that the defendant pay the plaintiff the sum of $4,878.65.
I shall hear the parties as to any other orders on this application.