Sweeney v Boylan Nominees Pty Ltd

[2006] HCATrans 078

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S451 of 2005

B e t w e e n -
MARIA SWEENEY
Appellant
and
BOYLAN NOMINEES PTY LIMITED T/AS QUIRKS REFRIGERATION
Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 3 MARCH 2006, AT 10.03 AM

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR M.J. WARD, for the appellant. (instructed by McLachlan Chilton)

MR J.E. MACONACHIE, QC: If your Honours please, I appear with my learned friend, MR N.E. CHEN, for the respondent. (instructed by Holman Webb)

GLEESON CJ: Yes, Mr Jackson.

MR JACKSON: Your Honours, may I say something very shortly about the facts before turning to our argument. The facts are not essentially controversial, although the conclusions to be derived from them are in issue. The circumstances are set out in our written submissions in paragraphs 7 to 17 and I wish to mention three aspects of them. First, at paragraph 8 in those submissions we refer to the fact that the refrigeration unit had been installed at the premises by the respondent which had a responsibility to service and maintain the unit. That responsibility, your Honours, arose from a contract to which the respondent was a party.

The contract was not with the occupier of the service station but with Australian Co‑operative Foods Limited. It can be seen at page 85 of the appeal book. As your Honours can see between lines 10 and 20, the respondent was both the lessor and supplier under that arrangement and the lessee was Australian Co‑operative Foods Limited. By clause 1 of that agreement, Australian Co‑operative Foods could lease goods from the respondent on the terms set out in the second schedule, which is at page 87 of the volume.

One of the terms of schedule 2, a pro forma lease, was that the respondent undertook to service and maintain the leased goods in a proper and workmanlike manner – your Honours will see that referred to in clause 9 at page 89 and may I refer to two parts of clause 9. The first is 9(a) and your Honours will see in the first four lines of clause 9(a) an agreement by the supplier, which is the respondent:

to service and maintain the goods in a proper and workmanlike manner, and to replace such part or parts of the goods which may require replacement due to the normal operation of the goods.

Then there is some elaboration upon the nature of the obligation in the remainder of that paragraph. Then, your Honours, in clause 9(b):

In the event that the Supplier is unable to service or maintain the goods to the standard and quality required by this Lease then the Lessee may, at its option, contract with a third-party to maintain and service the goods.

GLEESON CJ: What is the relationship between Australian Co-operative Foods Limited and the service station proprietor?

MR JACKSON: Your Honour, it did not appear clearly, and I am going to take your Honours to an observation of the primary judge in that regard in just a moment, but it seems to have been that the refrigeration unit was supplied by Australian Co-operative Foods Limited to the service station so that it could be there in order that presumably goods of Australian Co‑operative Foods, which seem to have been milk and perhaps milk products, would be available to be purchased by persons there. No doubt there were some persons coming into the service station and no doubt there was some arrangement as to relative remuneration for that but it does not appear in detail.

May I take your Honours to what was said by the primary judge at page 143, line 18 going to where his Honour commences a discussion of it. Mr Duckworth was formerly the operations manager of the present respondent and the refrigeration unit was one purchased by the respondent and it could be leased, at line 30, and he refers to the lease to which I have taken your Honours. Then he refers to some clauses of the lease and particularly 9(a) and 9(b) on page 144, commencing about line 33.

GLEESON CJ: I presume that Patels were the occupiers of the service station?

MR JACKSON: Yes. It goes on, your Honours, to about line 25 on page 145 and one sees that there.

GLEESON CJ: There were three defendants in these proceedings originally.

MR JACKSON: Yes, there were originally.

GLEESON CJ: Do we know why the defendants did not include Mr Comninos or his company?

MR JACKSON: It did not appear, your Honour. Mr Comninos did not give evidence; he was not called by anyone at the hearing. It may well have been there was no certainty about whether it was Comninos or Cool Runnings, his little company, or what it was who was involved in the matter and that is one of the difficulties that I will be referring to later.

GLEESON CJ: I suppose as far as the plaintiff was concerned, all she knew was she was dealing with the Patels.

MR JACKSON: Yes, your Honour, a little more than that because she went into the service station, she was dealing with whoever was the occupier of it, who were the Patels, and one sees the next day – I will come to this in just a moment if I may – the Patels saying that they had informed the refrigeration company of what had taken place.

The second feature I wanted to mention, your Honours, is this, that the documentation, in our submission, made it clear that the person who carried out the work, Mr Comninos, did so in the name of and as representing the respondent. May I in that regard take your Honours first of all to our written submissions in paragraph 16(h). The point that we are seeking to make there which – this is one of the particulars – is set out at the commencement of paragraph 16, the criteria identified by the trial judge supporting the findings that he made were, and then (h), provision of a service report by Mr Comninos on the occasions of his attendance and of that exhibit F was an example. Exhibit F is at page 95. Could I take your Honours to a couple of passages in it? Your Honours will see at about line 10 the name “Quirk’s.Refrigeration A Division of Boylan Nominees”. Your Honours will see about line 24 the heading “SERVICE REPORT Repaired door” and so on. A little further down the page at about line 36 there is a reference to the date, the time arrived and the time departed. Then, of the three paragraphs that follow that:

2. I/We hereby instruct your mechanic to work overtime –

and so on. Your Honours will see the reference to the words “your mechanic”. Your Honours will see there is a provision for rectification in 3 and then, immediately following 3:

Terms: Cash on completion of work.

That may have been inappropriate because the obligation seems to have been an obligation to do it, I suspect, without particular payment by the occupier. He then says:

Our mechanic is authorised to collect the amount due.

You then see a provision at the bottom of the page for the mechanic’s signature.

GLEESON CJ: Is that Mr Comninos’s signature?

MR JACKSON: Yes. So this is the document that Mr Comninos in the name of, you will see at the top, the respondent gives to persons on occasions when he rather than an employee is chosen to do the work and as the evidence demonstrated he was chosen on occasions when the other full‑time employees were otherwise engaged.

KIRBY J: Did the evidence reveal how he got the Quirks Refrigeration dockets?

MR JACKSON: Your Honour, in the passages - he has given a book of them, your Honour.

KIRBY J: I see. Well, one would infer that, but there was no elaboration of how he happened to get them.

MR JACKSON: Well, your Honour, it is dealt with the in passages of the judge’s judgment to which we have referred at the end of subparagraph (h) that I referred to earlier in our written submissions. Could I perhaps take your Honours to those. Page 148, line 45 – put shortly, your Honour, if I can say this, in some evidence of Mr Duckworth at the bottom of page 71 and the answer you will see in the last three lines:

He would have a service book which had a carbonised copy there, one for the customer and one to bring back at the completion, yes.

Exhibit F is an extract from the book to which he is referring. Your Honours, could I then say that one sees also exhibit D which is at page 96, and exhibit D was the claim form put in by the respondent in respect of this incident. Your Honours will see, if one goes to page 97, item b) about line 15:

Who caused the injury or damage?
Door of refrigeration unit on site . . .
Cabinet owned by Quirks (Boylan Nominees).

Then about line 25, letter b), they say they say they were notified before the accident:

Who notified you . . .
From service station.

What details were given?
Door not closing properly, so mechanic retightened screw which had come loose. We visited the site at 2.00 pm approximately . . .
We tightened the door screws, refer accident details -

Then if one goes over, your Honours, to page 100 in question 22:

Describe the property and the damage.
We are advised that we received a call to fix a loose door and our mechanic went to the service station where he tightened the door screws and demonstrated to the manager that the door was working correctly ‑ this is apparently on video . . .
after we previously fixed it.

KIRBY J: Now, who is the signature at line 25 on page 100? Is that an officer of the respondent?

MR JACKSON: Officer of the respondent.

KIRBY J: He certainly writes nicely. One rarely sees such clear writing. He deserves congratulations. I think his name was McTiernan.

GLEESON CJ: I do not. I think it is “McTernan” ‑ ‑ ‑

MR JACKSON: McTernan, I think, your Honour.

GLEESON CJ: ‑ ‑ ‑ but perhaps his writing is not clear.

MR JACKSON: Your Honours, the third thing I wanted to say about the documents is that if one goes to page 101, Mr Patel, with a degree of civility one does not so often find, notes to Mrs Sweeney – this is the day after the accident – that:

I have informed the refrigeration company of the incident -

It is obvious, your Honours, that he is dealing with the refrigeration company, namely the respondent.

That is an indication, we would submit, of the correctness of the view expressed by the primary judge at page 159, about lines 22 to 45. He says particularly at about line 29:

I ask myself – and to some extent this is a somewhat speculative observation – I wonder who the first defendant –

that is the Patels, to put it shortly –

thought it was dealing with when Mr Comninos attended the premises? It would seem to me when one considers the customer’s acceptance of the work, given the customer’s signature on this form –

that was the form exhibit F –

that that customer more likely than not would have thought that he or she was dealing with the second defendant. There is nothing to indicate that Mr Comninos created any invoices on his own behalf which were then supplied and paid by the first defendant.

I perhaps should have mentioned when speaking of exhibit F that the other signature on it was that of the service station.

GLEESON CJ: On the other hand, the plaintiff would not have had the faintest idea who was responsible for fixing the refrigerator.

MR JACKSON: No, that is so, your Honour. Perhaps if I come to this a little later, but what one sees in a case of this kind is that the plaintiff is injured, a refrigerator door in commercial premises falls on her, the occupier of the premises says, “We just had this fixed”, and you say, “Who fixed it?” They say, “Boylan Nominees”. So Boylan Nominees are the people who have done it; they are the people to whom, in the ordinary course of events, one would expect a person injured to be able to say, “Well, Boylan Nominees did the job; they didn’t do it properly”. Your Honours, I am putting that of course in very simple and somewhat emotive language perhaps but that, in our submission, is the way in which the case in the end should be resolved.

I will come to the law in a moment if I may. May I say one further thing about the facts before I do. We submit the facts of this case are of a relatively simple but increasingly frequent kind where a supplier of goods or a person who repairs goods or maintains goods has taken on, either over time or on a particular occasion, an obligation to repair or maintain goods and to do so in a proper and workmanlike manner and where the goods are located in premises where they will be used by members of the public or maybe in a household, they may be used by members of a household, they may be used by visitors to the household, all persons who are likely to be injured if the supplier does not perform its obligation.

The supplier is called on to perform the obligation. If it does not do so satisfactorily and a plaintiff is injured, your Honours, in our submission, why would the supplier not be liable if there is negligence in carrying out the work? The only answer that the respondent’s case would give to that is that the person who turned up to do the work was not the person who had undertaken to do the work but someone who was a subcontractor to that person.

GLEESON CJ: Would Cool Refrigeration Pty Limited, if that is the right name, also have been liable for Mr Comninos’ negligence?

MR JACKSON: Or Mr Comninos; one or the other.

GLEESON CJ: I deliberately referred to the company. I know that Mr Comninos would have been liable. In a sense the question is: who is vicariously responsible for Mr Comninos’ negligence? Is it Boylan Nominees Pty Limited or Cool Refrigeration Pty Limited or both?

MR JACKSON: Your Honour, it would be likely to be both, if I can just add a qualification to that, on the assumption that it was Cool Running, or whatever the name of it was, his company, that was doing it. I would say there is perhaps an element of doubt about whether he was an employee of that company as distinct from just being a director.

GLEESON CJ: To test that principle, let me just assume – what is the name of the company again?

MR JACKSON: I think it is Cool Running.

GLEESON CJ: Let me assume that Mr Comninos was an employee of Cool Running Pty Limited and that was known. In those circumstances, could the plaintiff have sued Boylan Nominees Pty Limited and Mr Comninos’ employer, Cool Runnings Pty Ltd?

MR JACKSON: Yes, your Honour. Yes, that is our submission, and Mr Comninos himself. Your Honours, could I turn then to the ‑ ‑ ‑

KIRBY J: Is there pre‑action discovery in the District Court?

MR JACKSON: Your Honour has me there, I am afraid.

KIRBY J: Would that have revealed these internal arrangements?

MR JACKSON: I am sorry, I just cannot give your Honour an answer to that immediately. I will have to check that.

KIRBY J: Because, as the Chief Justice said, the plaintiff would ordinarily be quite unaware of any such arrangements. All she would know was the door came off the fridge and the person who seemed to be in charge of the fridge said it was the refrigeration company and the refrigeration company was the respondent.

MR JACKSON: Yes.

KIRBY J: Presumably the respondent could join Mr Comninos if it asserted that it was Mr Comninos and not the respondent and thereby tender the issue for trial of a right over against the respondent or if the respondent was liable then that would allow the plaintiff to join the respondent.

MR JACKSON: Yes. Your Honour, a practical matter, in the circumstances – I appreciate what your Honour says ‑ ‑ ‑

KIRBY J: When I said respondent I meant Cool.

MR JACKSON: I understand, your Honour. Could I say that is so, undoubtedly, as a matter of pure legality. What often as a practical matter, however, may reduce the number of circumstances in which that would happen would be that one would expect an insurance policy up the chain, say one held by Boylan, to be one that covered servants and contractors performing its work. It does not always happen, of course, but that is not uncommon. So there would be not much point in one insurer joining the person down the chain.

KIRBY J: What did the defence say? Did the defence clearly raise that Boylan was saying that there was an independent contracting?

MR JACKSON: You will find that, your Honours, at page 5. You will see that it is not immensely forthcoming. I do not think I need to say more about it, really. I do not suggest the matter was not properly raised or anything of that kind, but it was not raised in the course of the case but that it was not immensely forthcoming. Your Honours, could I say this – and perhaps if I could describe what I am going to say by way of brevity as the representative basis. What I am seeking to say is this – and I will endeavour to put it in a slightly more exact form in just a moment.

We would submit that there is a body of authority in this Court which supports the notion that a principal is liable where a tort is committed by a person who has been appointed by the principal to represent that principal in transactions with others and the tort occurs in performing that task. Your Honours, that is putting it in a general way. What we would adopt is the statement in the joint judgment in this Court in Hollis v Vabu Pty Limited (2001) 207 CLR 21 at 40 in paragraph 42.

Your Honours will see the first sentence of that paragraph, the joint judgment expressed the view that:

In general, under contemporary Australian conditions, the conduct by the defendant of an enterprise in which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of that enterprise.

May I pause to say that what I am going to seek to do is to go to the cases that support that proposition, both before and, to a degree, after that decision. I also wanted, if I may, to refer to decisions – I do not intend to do so at length – which cover a somewhat analogous area, and that is the question of the non-delegable, to put it shortly, liability of a principal in some circumstances where there has been an undertaking to do work. To put it shortly, to see the relationship between the concept to which I am about to refer; that is, the representative basis on the one hand, and the fact that some overlapping or perhaps analogy is to be found in the kinds of notions referred to in Kondis v State Transport Authority and a little later cases following that.

So, your Honours, may I come then to the representative basis in a little more detail. I am referring in dealing with this basis to the line of cases based on Colonial Mutual Life Assurance Company and may I go to that case, your Honours. It is Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co‑operative Assurance Co of Australia Ltd (1931) 46 CLR 41.

In that case, your Honours, the appellant, Colonial Mutual, was held liable for the tort of slander. The statements constituting the slanders were to the effect that another insurance company, a competitor, was in an insolvent condition. The statements were made to potential assured. They were made by one Ridley, a former “agent, representative or employee” - I am using the words of the statement of facts and from one of the judgments - of the slandered company. He had then become an “agent” of the other company, but his relationship was that of a contractor to it, not an employee.

GLEESON CJ: Was this a case where the agency was an agency to bring about a contract?

MR JACKSON: Yes, it was, but the cause of action in question was not contractual, of course, it was ‑ ‑ ‑

GLEESON CJ: No, I understand that, but the kind of agency relationship that existed was of a very orthodox kind.

MR JACKSON: Quite, your Honour, but the point I am going to seek to make about it was the fact that the agency was one to effect a contract does not make the case different in principle, in our submission, from one where the agency is to perform the contract, or to perform an obligation.

GLEESON CJ: No, I just had in mind that there are some commentators who pointed out that the word “agent” is a pretty loose concept, but here it had a very strict application.

MR JACKSON: That is right, your Honour, yes. In the decision Justices Evatt and McTiernan dissented – I will come to them in just a moment – but it does seem apparent, in our submission, that at least Justice McTiernan’s dissent may not have been or was not as to the principle. May I go first to Chief Justice Gavan Duffy and Justice Starke at page 46. About halfway down page 46, your Honours will see that:

It was said that the defendant reserved to itself no power of controlling or directing Ridley in the execution of the work he was employed to do or of dismissing him for disobedience of orders: in short, that Ridley was an agent of the defendant in the nature of an independent contractor, and not the servant of the defendant whose tort in the course of his employment the defendant would be responsible.

Your Honours will see that there is some discussion of that but then, about seven or eight lines from the bottom of the page, after the reference to Citizens’ Life Assurance Co v Brown, it is said:

But if it does not, still we apprehend that one is liable for another’s tortious act “if he expressly directs him to do it or if he employs that other person as his agent and the act complained of is within the scope of the agent’s authority.” It is not necessary that the particular act should have been authorized: it is enough that the agent should have been put in a position to do the class of acts complained of.

Then your Honours will see at the top of the next page on the fourth line:

The class of acts which Ridley was employed to do necessarily involved the use of arguments and statements for the purpose of persuading the public to effect policies of insurance with the defendant, and in pursuing that purpose he was authorized to speak, and in fact spoke, with the voice of the defendant.
Your Honours, if I could refer to a couple of matters. One is that, going back to page 46, a relatively broad view of control, if I could just interpolate, was taken and you will see particularly at about point 7 on that page it is said:

Nothing in the agreement or the position of the parties denied the right of the plaintiff to control and direct Ridley when, where and whom he should canvass.

At that point the Court is, I think, dealing with the question whether he was an employee or contractor but at the same time – and, your Honours, I mention this for a reason I will come to later – it is clear that in that case their Honours treated control as something which involved an ability to control and direct when, where and whom he should canvass rather like the present case where Boylan was perfectly entitled to tell Mr Comninos where he should be and what job he had to do. It may not have been able to tell him exactly when to put the screw in but was entitled to tell him those things. That is the first thing, your Honours, and that is rather in passing.

The second thing is at page 47, about point 2 or 3 on the page, your Honours will see the reference in the passage I read a moment ago, the words “and in pursuing that purpose he was authorized to speak, and in fact spoke”, et cetera, so that what their Honours are saying, in our submission, is that one looks at the purpose for which he was retained, if I could use the term neutrally. The purpose was to act on behalf of the principal and at the time when the tort was committed he was, in fact, doing that very thing, pursuing that purpose.

Your Honours, in our submission, that is no different relevantly from the position here. The negligence occurred while doing the thing that he went out as Boylan to do. Justice Rich, your Honours will see at page 47, agreed with Justice Dixon and Justice Dixon’s reasons, if I can go to page 48, about point 4 on the page – your Honours will see in the paragraph commencing “Little evidence” that halfway through the paragraph he said:

In my opinion, the liability of a master for the torts committed by his servant in the course of his employment is not imposed upon the appellant by the agency agreement, but I do not think it follows that the appellant receives no responsibility for the defamation published by the “agent” in the course of his attempts to obtain proposals.

So his Honour is thereafter working on the assumption that he is not an employee. Your Honours will see on the same page at about point 6 he goes on to delineate the position where one person, an independent contractor, acts as the representative of another. Your Honours, the passage is one which commences with the expression, new paragraph, “In most cases”. He sets out the general test but then that has some qualifications. If I could go to the second sentence of that paragraph, he says:

The work . . . is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal.

That is, your Honours, distinguishing between, in a sense, the two cases: one where the liability of the principal is attracted because the independent contractor is acting as representative; the other where it is not. He goes on to say, your Honours, in the last four lines on page 48:

But a difficulty arises when the function entrusted is that of a representing the person who requests its performance in a transaction with others, so that the very service to be performed consists in standing in his place and assuming to act in his right and not in an independent capacity.

Your Honours, that is, with respect, this case. Your Honours, at the top of page 49 ‑ ‑ ‑

HAYNE J: You say it is this case. That may describe the relationship between the Patels, Boylan and Comninos. Do you not then have to take a further step to translate or to transfer that analysis over to the injured plaintiff?

MR JACKSON: Your Honour, yes, of course, but may I say that one is looking to see in the first place what is the transaction, let us say, in relation to which there is the representation. In that regard, what you have is a situation where as between, to put it loosely, the company that was the lessee and Boylan was a contractual relationship; however, there is no contractual relationship between Boylan and the Patels. So far as the position is concerned, however, there is an obligation undertaken by Boylans to maintain the refrigeration units.

The purposes of maintaining the refrigeration units are, perhaps, manifold. One relates to efficiency, of course, of their operation but the other relates to maintaining them in a way so that they do not cause injury to any of the persons who might use them. Your Honours, it is really in identifying what is the transaction, the transaction is to perform those things and whilst the individual who is injured may or may not know of the existence of the company Boylan, yet one sees that the transaction that they engage in is one which does have consequences, or potentially dangerous consequences, to an occupier, a member of the occupier’s family, occupier’s employees and persons who come into the premises.

So it is right to say of course one needs to demonstrate something that has an application to the plaintiff, but what does have an application to the plaintiff, your Honours, is that in looking at the transaction, for example, one sees its nature. I think that is a rather long answer to what your Honour was putting to me.

Could I say at page 49 the Judge discusses the ambit of the authority of Ridley and then at page 50, about point 3 on the page, his Honour goes on to say:

If the view be right which I have already expressed, that the “agent” represented the Company in soliciting proposals so that he was acting in right of the Company with its authority, it follows that the Company in confiding to his judgment, within the limits of relevance and of reasonableness, the choice of inducements and arguments, authorized him on its behalf to address to prospective proponents such observations as appeared to him appropriate . . . I do not think it is any extension of principle to hold the Company liable for the slanders which he thought proper to include in his apparatus of persuasion.

The wrong committed arose from the mistaken or erroneous manner in which the actual authority committed to him was exercised when acting as a true agent representing his principal in dealing with third persons.

I do not think . . . If what he does is done as the representative of his principal, it cannot matter, apart from questions of estoppel and of apparent as opposed to real authority, whether the injury which it inflicts is a wrong to one rather than another person.

I think that last sentence goes a little to what your Honour was putting to me. The very nature of the task on which they were engaged was one which if not carried out satisfactorily had the potentiality of injury to a number of classes of persons.

Justice Evatt’s dissent involved a quite lengthy setting out of the facts but he dissented on the basis first that the authority was in fact limited. You will see that at page 68, about point 6 on the page. It is the first new paragraph on that page. He then went on to say that his authority was limited and it really followed from that that the slanders were spoken in the course of his own business. That appears about point 4 on page 69 through to about point 3 on page 70. Finally, your Honours, Justice McTiernan appears to have decided the case on the basis ‑ ‑ ‑

KIRBY J: Justice Evatt’s view seemed to have turned on some of the matters that were debated in the Lepore Case because his Honour says at 69:

I have reached the conclusion that the appellant is not liable for the three slanders published by Ridley, even on the assumption that Ridley’s relation to the appellant was that of servant to master.

So it was, as it were, the view that even on servant/master vicarious liability, the master is not liable for deliberate torts done by the servant who has walked out of the scope of his authority.

MR JACKSON: Yes. That is why I am seeking to say that that seems to be the core basis of the decision, that the authority was in fact not as wide as the other Justice assumed.

KIRBY J: So Justice Evatt was not really focusing on the issue that is before us. He did not come to that issue because of the view that he took that deliberate torts by the servant do not catch the master.

MR JACKSON: Yes. I do not think it is possible to say that he passed on the issue really.

GLEESON CJ: In what year was Deatons v Flew decided?

MR JACKSON: Your Honours, it is 79 CLR . I could not give you the year just offhand.

GLEESON CJ: I was just wondering, if you had to identify the difference in principle between the conduct of the insurance canvasser and the conduct of the barmaid, what was the difference in principle?

MR JACKSON: The difference, your Honour, would seem to be two things, I think. One is to say that what she was doing was – I am using a common but perhaps inexact expression – a kind of frolic of her own, as it were. It was something that she was not authorised to do in the course of her employment. That is one thing. I suppose the other, and it is in a sense the same thing. It was because she was doing something off her own bat that it was something in which she was not representing the employer ‑ ‑ ‑

GLEESON CJ: Justice Evatt seems to have decided this case on much the same principle as Deatons v Flew was decided.

MR JACKSON: Yes. Your Honours, what I was going to say about Justice McTiernan was that he appears to have taken the view that there was
no relevant authority. That appears at about point 8 on page 71, the sentence commencing, “In my view”. One notes that after that in the passage commencing at about point 9 on the page, and going through to the remainder of his judgment, he does refer to the term “representative”. You will see that first on page 71, about point 9. He says:

There is nothing in the agreement which leads me to the conclusion that the criticism of any other company was a function pertaining to the canvasser Ridley, as the representative of the appellant.

Then one sees in the first new paragraph on page 72, at about a third of the way through that paragraph he says:

My conception of his authority leads me to the conclusion that he spoke as Ridley, not as Ridley the representative of the appellant -

and then the last sentence in his Honour’s reasons. May I refer your Honours to a number of decisions in which the principle has been referred to and if I could put it this way, and does not appear to have been the subject of an adverse criticism or not been adopted. First of all, in Kondis v State Transport Authority (1984) 154 CLR 672 at 691 Justice Brennan adopted the statement that one sees in Justice Dixon’s reasons and your Honours will see that that passage contains the two aspects to it. This is four lines from the bottom of page 691:

and not as something which the person obtaining the benefit does by his representative standing in his place –

et cetera, and then the last sentence of that passage at the top of page 692. Justice Brennan referred to the same passage, and I do not think I need to take your Honours to it, in Burnie Port Authority v General Jones Pty Ltd (1994)179 CLR 520 at 574. May I go over, however, to Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313. In that case your Honours will see at page 329, first, Justice Brennan at the top of the next page once again referring to the same passage. Then, your Honours, one sees at page 366 Justice McHugh under the heading “Liability for the act of an independent contractor” referring again to that passage.

GUMMOW J: Now, do you rely upon what Justice McHugh says in the last paragraph on 366?

MR JACKSON: It is a question of what part, your Honour, really. What we would say about it is that we do not need to and do not go as far as saying that on every occasion that an independent contractor is engaged that the principal is liable for the torts, put shortly, of the independent contractor. What we do say is that there is a qualification to that, or the principle is different in circumstances where the independent contractor is doing work for the principal in relation to other people.

KIRBY J: I thought that is what Justice McHugh ultimately came down to. It is not enough that it is an independent contractor doing work; it has to be an independent contractor acting as an agent representing the principal as part of its organisation.

MR JACKSON: Yes. Your Honour, that is the principle for which we contend, I think.

GUMMOW J: Acting as an agent? You said “for” a minute ago.

MR JACKSON: Yes, well, your Honour, I am endeavouring to avoid carrying the baggage of agency, as it were.

GUMMOW J: Yes, I am sure.

MR JACKSON: I do so recognising that the principal function of agency is to bind principals contractually. Why so, your Honours? In some respects the work of an independent contractor acting as representative of a principal can have contractual effect. If the independent contractor is there to obtain contracts, as in the CML Case, then that can have that effect. But there can also be a situation where the work of the independent contractor can be performance of a contract that the principal has entered into. One sees that that would be the position in this case if the work had been properly performed. So that, in that sense, acting as agent for the principal, the principal would have performed the contract, so one cannot leave “agency” entirely out of it, your Honour.

However, what is being done is to act as, in effect, the principal. Now, your Honour, one does not need to call that necessarily “agency”. It is a convenient perhaps non‑technical description of it, but what one really is talking about is a situation where the principal puts the independent contractor in the principal’s place in its dealings with other people to carry out those dealings.

Now, your Honours, sometimes it will be agency, perhaps sometimes not, but as so often happens – and I do not mean to say this in a facetious way or just to pick up words – it does depend on why one is asking the question really sometimes. So, your Honour, if I could answer the question at the start of that, your Honour, I do not think we need to go as far as the last paragraph on page 366, and I do not think we do. When I say I do not think, we do not, your Honour.

To put it shortly, your Honours, if I can add one thing, the principal puts the independent contractor in the principal’s place for a relevant purpose. I know I am describing the situation, but that is as good a way of describing it, in our submission, as any other. Your Honours, could I say too that in Scott v Davis (2000) 204 CLR 333, your Honour the Chief Justice referred to the representative basis at page 342, commencing at paragraph 19, where your Honour said:

There may be cases in which the driver of a motor vehicle is to be regarded as the representative of an owner or bailee who has no immediate control over the vehicle, in circumstances which make the owner or bailee liable on the same principle as was applied to an independent contractor in Colonial Mutual Life –

So your Honour referred to it and said, at the top of the next page in the second line:

He was not a representative or delegate of the respondent.

Justice McHugh, of course, took a broad view on this issue. Your Honours will see it referred to his reasons commencing page 346, in the second sentence in paragraph 34:

The principal is also liable for the wrongful acts of a person who is acting on the principal’s behalf as a representative and not as an independent principal and within the scope of the authority conferred by the principal.

KIRBY J: Justice McHugh was dissenting in that case. Was the dissent on the basis of that point in paragraph 34 or was it different?

MR JACKSON: If I could put it this way, your Honour, his Honour took a broad view of the principle – that is the first thing – but his dissent seems to have been something that one sees ultimately ‑ ‑ ‑

GUMMOW J: Paragraph 110, is it, on page 370?

MR JACKSON: Yes, your Honour. Your Honours will see that he set out the principle – that is the ultimate conclusion, I think, to which he came as to the principle in paragraph 110. Your Honours will see that there. He said:

When these two conditions exist, the delegate stands in the shoes of the principal and is within the principle of this Court’s decision in CML.

But went on to say in paragraph 120…..I think, paragraphs 111 through to 121, but if one goes to paragraph 121 he said “that principle must also apply to planes and boats” and the conclusion at paragraph 118 that:

Mr Bradford’s flying was done on behalf of and in discharge of the undertaking of the respondent and within the scope of his authority.

Your Honours, the broader view that his Honour took seems to have led him to that conclusion, I think it is right to say, but what I would seek to say is that not everything that his Honour said was foreign to the CML Case or to the principle for which we contend.

KIRBY J: He cites the CML Case.

GUMMOW J: But do you rely on paragraph 110?

MR JACKSON: Yes, we do, your Honour. Could I say in relation to it, however, you will see that his Honour does appear to have relied on the decision in Soblusky. That seems to be not satisfactory now. You will see that he then says there are two conditions:

First . . . it must be owed to a third person and. . . it must be one which the principal has undertaken to a third person to perform.

Your Honours, that we would accept. The second thing he goes on to say is that:

by reason of the principal’s ownership or possession of a chattel or otherwise, the agent must be under the general control of the principal and not an independent functionary.

Your Honours, that is simply a statement of alternatives in a way, but the point we would adopt in relation to it is what his Honour said about what is involved in control in relevant circumstances. Your Honours will see that through the remainder of that paragraph and the view that he takes of the question of control is that it does not have to extend to every detail of the manner in which the task or duty is carried out. I think your Honour the Chief Justice took a similar view in that case at paragraph 34, page 198, on the question of control. I am sorry. That is the wrong paragraph number, but may I come back to that? Your Honours, may I chase up that reference, I am sorry?

Your Honour Justice Gummow referred to this issue at page 408, paragraph 227, referring there to the potential difficulties in the use of the word “agency”, and then at paragraph 231, page 410, referring to Professor Fleming having said CML was:

an exceptional case where an “agent” was not subject to controlled employment yet the principal incurred vicarious liability.

Your Honour then paraphrased that case, and referred also, your Honours, at page 412, paragraph 238 – and I think it is right to say that your Honour was not necessarily adopting the whole of this passage that is quoted, but could I just say in relation to that passage that in the last line on page 412:

For the rules of agency to come into play the representation of one person by another must be meant to affect the principal’s legal position though, of course, this does not mean that the legal purpose intended to be achieved by the use of an agent need be a complex one . . .
Secondly, for an agency relationship to arise, one person must intend to act on behalf of another. This is a question of fact. But, it is submitted, such an intention is not, in itself, enough; the purpose of the relationship must be for the agent to enter into a contract on behalf of its principal (or to dispose of his principal’s property).

GLEESON CJ: Just come back to that last sentence in the first paragraph of that quote. If a father sends his son to a nearby shop to buy him a newspaper and the son negligently damages some property of the newsagent, is the father vicariously liable for the son’s negligence?

MR JACKSON: Well, probably not, your Honour. That would be a question that would tend to be on the ambit of authority issue.

GLEESON CJ: Vicarious liability originated in children, spouses and servants, but I do not know what happened to the children and spouses on the way.

MR JACKSON: Well, your Honour, it is difficult to answer with a given answer that would cover every case, but if one had a situation where on the way the child saw a small dog, decided to play with it and then got a stick and beat it and caused the dog an injury or killed it, then the liability of the father, if any, would not, in our submission, be one that was vicarious; it would be for not taking proper care of the child, as it were, if anything. So far as going to the newsagents, it depends a little on what happened at the newsagent, but if one saw the child perhaps playing there and damaged the glass case or something of that kind while waiting for the paper, then it may well be vicarious.

Your Honour, it does depend on what one defines as being the ambit of the authority, but in the main one would think that if the child is simply going to buy a paper, the authority is not to do much more than that except perhaps the unspoken authority to spend the change on buying a Mars bar or something. But, your Honours, having said that, there is not an authority to damage and those things would tend to be incidental and fall within the other category of there not being perhaps sufficient control of the child.

GUMMOW J: That quote was set out to lead to paragraph 239, I think.

MR JACKSON: I am sorry, your Honour, I just did not quite catch the paragraph your Honour said.

GUMMOW J: The extract from what Professor Markesinis said at paragraph 238 is a prelude to the conclusion of 239 on page 413. These concepts of agency and vicarious liability all get tangled up.

MR JACKSON: Your Honour, I accept that. Your Honours, could I also ‑ ‑ ‑

GUMMOW J: In part, that flows from a misunderstanding of the 19^thcentury cases which are discussed in some detail at paragraphs 180 and following.

MR JACKSON: I hope your Honour will not ask me in detail about trespass or case.

GUMMOW J: Well, that is what the common law comes out of.

MR JACKSON: Well, your Honour, true. Your Honours, could I just say, however, one further thing about the quotations from paragraph 238 and the observation of paragraph 239. The passage at paragraph 238 is, in a sense, talking about agency to enter into a contract. In our submission, the performance of agency to perform an existing contract would not give rise to particularly different considerations if one were talking in that area. Your Honour, at paragraph 253, your Honour Justice Gummow referred to the economic considerations underlying vicarious liability and I simply wish to refer to your Honour’s observation there.

GLEESON CJ: I presume there is no suggestion that if Mr Comninos had negligently run over the plaintiff in the forecourt of the service station, the respondent would have been liable for his negligence?

MR JACKSON: No.

GLEESON CJ: It is the fact that he was acting as the respondent’s representative in fixing the refrigerator door that makes the difference?

MR JACKSON: Yes, your Honour, to perform the task it had undertaken to do. Could I say also that at page 422 your Honour Justice Gummow in paragraphs 268 to 270 referred to the fact:

that the activities of an agent with authority to bring about a contractual or other legal relationship . . . may have legal consequences in tort for which the principal is responsible.

You will see that particularly referred to in paragraph 270. Your Honours, so too, in our submission, may the activities of a person with authority to perform a contract on behalf of the principal. Your Honour Justice Hayne referred to CML at page 436, paragraph 301, in footnote (579) but it is in a sense very much in passing, if I may say so, with respect. Justice Callinan at page 458, paragraph 354, treated CML as depending on the commercial relationship between CML and Ridley.

Your Honours, that takes one to Hollis v Vabu Pty Ltd (2001) 207 CLR 21. In that case the negligent bicycle courier was engaged by Vabu. The facts your Honours will see set out in paragraphs 3 to 6 on page 26. At page 36 in paragraph 32 the joint reasons refer to the:

general rule, that an employer is vicariously liable for the tortious acts of an employee but that a principal is not liable for the tortious acts of an independent contractor.

One will see then referred to at paragraphs 39 and 40 the notion of “a representative”. Your Honours will see in paragraph 39 the joint judgment said in CML:

Dixon J explained the dichotomy between the relationships of employer and employee, and principal and independent contractor, in a passage which has frequently been referred to in this Court.

Your Honours will see the passage quoted, then in paragraph 40 it is said:

This statement merits close attention . . . However, Dixon J fixed upon the absence of representation and of identification with the alleged employer as indicative of a relationship of principal and independent contractor.

Your Honours will see then the reference a little further down to Justice McHugh in Northern Sandblasting. Then at the top of page 40 is the passage to which I referred earlier, the first sentence in paragraph 42.

If I could pause at that point, your Honours, if one sought to apply the observations that are contained in paragraph 42 to this case, it is clear that Boylan conducted an enterprise. Mr Comninos was identified as representing that enterprise in the sense that he came in response to a call to Boylan, he used Boylan’s documentation. As the proprietor’s letter to the appellant the day afterwards indicates, he appears to have been identified in fact as Boylan’s man. Also, the injury might fairly be said to be characteristic of the conduct of the enterprise. It is the very thing really. If the refrigerator door is not fixed properly, it will fall off - and they tend to be fairly heavy – and hit someone somewhere, on the head in this case.

Your Honours, those observations, in our submissions, are ones which would apply to the present case. If one goes to Justice McHugh’s reasons at page 47 at paragraph 65 your Honours will see in the last few ‑ ‑ ‑

KIRBY J: Is it fair to say that basically he accepted the earlier decision of the Court of Appeal on the classification of the employer relationship and said, therefore, you could not fit it into that category, therefore, if the plaintiff was to recover there had to be a different category of law?

MR JACKSON: Yes. He has him as an agent but really neither employee nor independent contractor. Your Honour will see that in the last four lines of paragraph 65.

KIRBY J: However one categorises it it is a type of hybrid relationship of which there are many now, and we are going to see more, I would suspect. It is not the old‑fashioned employer/employee, but it is not completely divorced from the principal’s enterprise.

MR JACKSON: Yes.

KIRBY J: Justice McHugh, I think, on the special leave application on this case said that the enterprise notion has resonances of Lord Denning’s earlier proposition about the organisation test.

MR JACKSON: Your Honour, except for the Sir Julian Sullivan’s sheaf of papers, longitudinally folded and auriferously endorsed, I would not like to get involved in the question of whether the Court would be liable in respect of any activity of the security officers in their box downstairs.

KIRBY J: The organisation test has had some success in hospitals and other such enterprises.

MR JACKSON: Yes, it has, your Honour, and could I say that it is a question, I suppose, whether approaches of that kind and the particular species in which that has been done are species of a larger genus. In our submission, they are. I am going to come to that in a little while, if I may, or whether they are individual cases. They tend, in a sense, to have a somewhat different basis in the sense that – sometimes overlapping but perhaps somewhat different in the sense that they are cases where whilst someone is – individuals may be taken as representing the hospital, for example, the basis for doing it is that there has been some undertaking to perform a service. That is why there are similarities with this, but, your Honour, perhaps I may come to that in just a moment.

KIRBY J: I mentioned the hospital cases because there the surgeon is exercising often in the case as an honorary capacity and was a very experienced person who could not be directed as to how he or she did the operation and the law drew back from saying that the hospital was not responsible. I realise you do not want to take any bold, great leaps, you just want to hug the coast and take a tiny little step away further than Hollis, maybe not even much beyond Hollis.

MR JACKSON: Your Honour, whether we go beyond the territorial sea or not we would like to end up in the harbour, so that is what – we do not go quite as narrowly as that. What we do say is that what we are putting is not heterodox and has been referred to in a decision of this Court a long time ago. It maybe it has not been used as much as should have been but it has been around for a long time and has been followed on a number of occasions.

KIRBY J: It is curious that the CML principle was not really used very much in the jurisprudence of this Court and maybe that is because notions of the vicarious liability of who was an employee filled the gap for most cases but ‑ ‑ ‑

MR JACKSON: Your Honour, also there are factual reasons behind it, no doubt, and they would largely be that most people were employees.

KIRBY J: In a sense, it is the changing relationships of recent decades that has presented the problem which we had to face in Hollis and now have to face in this case.

MR JACKSON: Yes, your Honour, but many people who are contractors now were employees. There are many more small companies running things, many more people acting independently. If I could just return for a moment to Hollis v Vabu, your Honours will see that Justice McHugh at paragraphs 73 to 74 on page 50 went on to apply CML. He discussed at page 58, in the paragraphs that go through from about paragraph 94 to paragraph 100, that principle, but may I refer particularly to what was said in paragraph 100.

GUMMOW J: An agent to do what, in paragraph 74 on page 51? The individual who committed the slander in CML was, Sir Owen Dixon said, a true agent and part of his agency was to induce people to sign up and the Chief Justice said this man, by mistake, I think, went too far but, nevertheless, it was within the scope of his agency because it was to be expected that insurance solicitors would be enthusiastic. He had become over‑enthusiastic and slandered competitors.

MR JACKSON: Yes. Your Honour, even for that period, if one looks at Justice Evatt’s reasons where the facts are set out in some detail, it was enthusiastically enthusiastic, but the position, of course, is this. In speaking of ‑ ‑ ‑

GUMMOW J: I just do not, at the moment, understand how CML supports the broad proposition in 74 on page 51 of Hollis. It is not a question of finding an appropriate vehicle. That assumes there is a vehicle out there and it is going to turn up.

MR JACKSON: Your Honour, can I say in relation to it, his Honour is there referring to an agency principle in CML. What he seems to be saying in saying that is that that is a short name for the representation principle or doctrine to which I sought to refer earlier. No doubt, in many cases, and indeed in CML, the case was one where what you had was a person who was acting within the ambit of the person’s authority, as it was found, to make statements with a view to inducing people to enter into contracts.

There is not, we would submit, a relevant difference between inducing people to enter into contracts and acting on behalf of a principal and, on the other hand, acting on behalf of the principal performing the principal’s contractual obligations or performing the principal’s obligations, in this case contractual. In performing the principal’s obligation, they have to be performed by someone. The principal is a company, it has to do it by someone, and it is an area where, in the nature of things, torts may be committed and torts may be committed because of the negligence of the person carrying it out.

Now, in those circumstances, your Honours, we would submit that there is no difference that should be drawn between the case of a person performing it as a contractor and a person performing it as an employee. It is in that circumstance that one can use the term “agent”, but using it perhaps loosely, but it is the person who on behalf of the principal is performing the principal’s contractual obligation. The obligation need not be contractual. It might be one that is simply undertaken for no fee at all, without there being a contract. It might simply be an undertaking to do something.

Your Honours, if I could just go back to paragraph 100 for a moment in that case at page 60. His Honour there expressed the view that:

Finally, the application of the principle is not confined to harm done to a third party in the course of dealing with that party. As I said in Scott v Davis, it would be “illogical and anomalous to hold a principal liable for the intentional torts of an agent, such as fraud, while acting as a representative in the course of dealing with a third party but not liable for the careless conduct of an agent occurring in the course of carrying out a task for the principal as his or her representative”.

Then there is a passage quoted from CML to which I have taken your Honours earlier. Your Honours, that goes back, I think, to what I was trying to submit earlier and that is the ambit of the nature of the obligation that was undertaken or the transaction, to use the expression earlier used.

Might I come then, your Honours, to New South Wales v Lepore (2003) 212 CLR 54 and the two related cases reported with it. Your Honours, the issue there involved whether a school authority was under a liability to pupils who had been abused sexually and intentionally by teachers, and it was held that they were not under the liability, to put it shortly. But the dicta in the case, in our submission, support the view that a principal was liable for the negligence of an independent contractor in circumstances such as the present one. I do not mean to convey they are decisive on the issue, but I do submit there is some support to be there found.

Could I go to Justice Gaudron at page 561 in paragraphs 130 and 131. Your Honours will see that the way in which her Honour put it was to say that:

The only principled basis upon which vicarious liability can be imposed for the deliberate criminal acts of another, in my view, is that the person against whom liability is asserted is estopped from asserting that the person whose acts are in question was not acting as his or her –

your Honours will see the expression –

servant, agent or representative when the acts occurred.

Your Honours will see that referred to again through the remainder of that paragraph. Then again, your Honours, the term “servant, agent or representative” is used in paragraph 131.

Your Honours Justice Gummow and Justice Hayne at page 581, paragraph 197 – this is about two-thirds of the way through the paragraph – repeated the passage earlier quoted from Hollis v Vabu, the one saying “under contemporary Australian conditions”, et cetera, and then went on to say, “Or as McLachlin J put it in Bazley v Curry”, and your Honours will see the observation there made following the quotation there set out.

KIRBY J: Where is their Honours’ reference to the contemporary Australian conditions?

MR JACKSON: It is page 581, it is part of paragraph 197, about a third of the way down the page. You will see, “In Hollis, it was said that”, and it follows there. At page 590 in paragraph 229, speaking about what is comprehended by “class of acts”, your Honours referred to the statements made by Chief Justice Gavan Duffy and Justice Starke in the CML Case, and what was done in Deatons in the next paragraph. Then in paragraph 231, “The answer given by Dixon J, in Deatons”, and your Honours will see in particular part of that quotation about halfway down:

or which are committed under cover of the authority the servant is held out as possessing or of the position in which he is placed as a representative of his master.

He is speaking about a servant there of course. At paragraph 233 your Honours again referred to – again speaking about employees:

Nor, unlike Lloyd, was it a case where the act done was one to which the ostensible performance of the employer’s work gave occasion, or which was committed under cover of the authority the employee was held out as possessing, or of the position in which the employee was placed as representative of the employer.

If one goes to the conclusion at paragraph 239, your Honours again speaking of employees, your Honours speak of two occasions when an employer – your Honours say:

when an employer is alleged to be vicariously liable . . . recovery . . . should not be extended beyond the two kinds of case identified by Dixon J in Deatons –

and your Honours will see those two there set out.

GUMMOW J: Colonial Mutual answered those criteria.

MR JACKSON: Colonial Mutual, one would see if one goes to the first of those criteria, you will see:

the conduct . . . was done in the intended pursuit of the employer’s interests –

and that would be so. One is dealing of course here with a person who is a contractor –

secondly, where the conduct of which complaint is made was done in the ostensible pursuit of the employer’s business or the apparent execution of the authority which the employer held out the employee as having.

That may be one phrase expressed in a double way but, whether it be one or two, that would be satisfied, in our submission. I was going to say that there is no reason, in our submission, why a different conclusion should apply in the case of an independent contractor.

Now, your Honours, could I just say something about the question of control before moving on a little. Your Honours, much reliance was placed by the Court of Appeal on the question of absence of control. You will see that, for example, in the appeal book at page 198, paragraph 34, absence of the ability to control and the question of specific instructions, and also page 204, paragraph 54.

Now, your Honours, what we would submit is that it is surely correct in modern conditions to say that control need not extend to every detail of the matter. I referred your Honours to what was said in Scott v Davis by his Honour Justice McHugh at page 370, paragraph 110. May I endeavour to give your Honours the reference I was seeking earlier, your Honour the Chief Justice – I am sorry, I still do not have it. May I come back to that, your Honours?1

Your Honours, the next matter I wanted to mention was that there is, in our submission, some overlap between the representative formulation, if I can put it that way, and the ambit of the concept of a personal duty which was referred to by Justice Mason in Kondis and adopted in General Jones. Now, your Honours, in Kondis v State Transport Authority (1984) 154 CLR 672, Justice Mason at page 687, after a discussion of a number of cases, your Honours will see at the top of the page said:

However, when we look to the classes of case in which the existence of a non‑delegable duty has been recognized, it appears that there is some element in the relationship between the parties that makes it appropriate to impose on the defendant a duty to ensure that reasonable care and skill is taken for the safety of the persons to whom the duty is owed.

Your Honours will see in the next paragraph he said:

The element in the relationship between the parties which generates a special responsibility or duty to see that care is taken may be found in one or more of several circumstances.

Your Honours will see that he refers to various instances and then at about point 6 on the page says:

In these situations the special duty arises because the person on whom it is imposed has undertaken the care, supervision or control of the person or property of another or is so placed in relation to that person or his property as to assume a particular responsibility for his or its safety, in circumstances where the person affected might reasonably expect that due care will be exercised.

Your Honours, no doubt that passage is in terms referring to the injury or damage to the person or the person’s property but, in our submission, there is no reason why it would not refer to injury to persons who might be expected to be injured if reasonable care was not taken, for example, family, friends or customers.

GUMMOW J: The problem with this passage in Kondis is that it is historically descriptive but it is not normatively predictive. It does not say what the special reasons are. It is a number of species without a genus.

MR JACKSON: Your Honour will see the manner in which it is stated. In these situations a special duty arises because the person on whom it is imposed has undertaken the care, supervision or control of the person or property of another. Your Honours, that is generally – whether historically correct or historically incorrect, in a sense, it does ‑ ‑ ‑

GUMMOW J: There would have been plenty of cases of that description where the plaintiff failed, I imagine.

MR JACKSON: Your Honours, it is one of those things. Perhaps enough attention has not been paid to it, with respect, because this passage is one, of course, that is not just one where the formulation is by Justice Mason alone. It was referred to by Justices Wilson and Dawson, first of all, in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 44. About halfway down the page their Honours said:

An effort was made to do so by Mason J in Kondis –

where it was said that – and your Honours will see the quotation of, in a sense I say, with respect, is the genus and then some identification of the species in the following parts of that paragraph.

GLEESON CJ: These are described by Justice Mason as “special duties”. On the top of 687 in Kondis he says:

“the law has, for various reasons imposed a special duty on persons in certain situations to take particular precautions –

Is it your submission that the law has imposed a special duty on refrigerator repairers to take particular precautions for the safety of people who open refrigerator doors?

MR JACKSON: No, your Honour, I am not quite saying that. What I am saying is that what his Honour said about special duties was, first of all, to identify a number of circumstances in which a special duty arose. Some of them are quite ordinary cases. One of them, the Victorian case to which he refers immediately before making the general statement, was where a landlord had undertaken to provide a new or repair a roof and during the course of that there was some damage to the property of the tenant below.

GLEESON CJ: What is so special about the duty?

MR JACKSON: Your Honour, the special aspect describes really only the fact that the landlord is not personally negligent.

GLEESON CJ: Is he treating these cases as exceptional?

MR JACKSON: In one sense, your Honour. Exceptional not in a dramatic sense but exceptions to a rather more general principle that the principal would not otherwise be personally responsible to see that the work was carried out in circumstances where there was negligence of an independent contractor. It would not be liable for that negligence. Your Honour, special does not mean exceptional in the declamatory sense.

KIRBY J: You seem to be steering the ship into rather rocky, bumpy seas, Mr Jackson. I thought that it was not part of your case that the respondent was liable in the Kondis category, that it was not liable personally, whatever was the relationship with Mr Comninos.

MR JACKSON: Your Honour, what I am seeking to do is really just to say that the argument we are putting forward based fundamentally on the representative basis is one which is not something that stands out entirely on its own in terms of imposing liability. One can see that there is some factual overlap between the type of concept dealt with in Kondis. Your Honours, what I wanted to say about it was that one can see that concepts of the nature of Kondis may be not the most usual thing, but they are not exceptional because, for example, five Justices in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at pages 550 to 551 adopted what Justice Mason had said. Your Honours will see that at the bottom of page 550:

In most, though conceivably not all, of such categories of case, the common “element in the relationship between the parties which generates [the] special responsibility or duty to see that care is taken” is that “the person on whom [the duty] is imposed has undertaken the care, supervision or control of the person or property of another or is so placed ‑ ‑ ‑

GLEESON CJ: That passage really makes the point that what is special about the duty is that it is not a duty to take care. It is a duty to see that care is taken.

MR JACKSON: Yes it is, your Honour, and what has later happened in relation to the duty is that there were some suggestions that because there was a duty on the principal, whatever its precise nature might be, that that meant that whatever was the subject matter of the undertaking had to be performed as distinct from a requirement that there be reasonable care to ensure it was performed, for example. All I wanted to say about this was that that notion in Kondis was referred to in General Jones. It has been referred to in a number of decisions, not always with great enthusiasm and has not been overruled, but may I give your Honours the references to that and leave it at that.

I refer your Honours to Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 and may I simply refer your Honours to Chief Justice Brennan, page 332; Justice Dawson, pages 344 to 345; Justice Toohey at pages 350 to 351; Justice McHugh at page 368 and your Honour Justice Kirby at pages 396 and 397 and to the discussion in New South Wales v Lepore 212 CLR 511 at page 533, paragraph 35, your Honour, the Chief Justice; page 551, paragraph 100, Justice Gaudron and page 507, paragraph 140, Justice McHugh.

Could I say that your Honours Justices Gummow and Hayne entered on a discussion of the issue at page 595, paragraph 246 and at paragraph 247 referred to:

the need for considerable caution in developing any new species of this genus of liability.

Your Honours, having discussed the decisions in the court at paragraphs 254 to 256, went on to say at paragraph 259, at the end of the paragraph:

In each of these cases (and in other cases where non-delegable duties have been imposed) there is the common thread, identified in Burnie Port Authority, of an undertaking of care, supervision or control of another.

KIRBY J: Is the general thing that the common law is trying to do here – I know Justice Callinan has expressed disagreement with this but – to find a pocket of which it is proper and fair and just to make responsible and can it be said against the propositions that you are urging that the reason for sticking to the old law is that it can be assumed that Mr Comninos or his company will be insured or will have resources and that they are the people who plaintiffs should sue, not, as it were, sue others who might also have resources and insurance but who are not the more correct defendant responsible for the case. Is that the policy that the law is trying to get at here?

MR JACKSON: Your Honour, the way in which your Honour puts it to me involves, as I suspect is inevitable in discussions of this topic, some assumptions as to policy in the first place. Could we say, your Honours, that it is not always just a question of a pocket. The law of tort serves a number of purposes. One of them is that there should be an deterrent effect. Another is that there should be an ability to recover from persons who should properly - and I appreciate that involves a value judgment – be held to be liable and, of course, the identification of some one or more persons who may be able to pay is a matter of practical importance.

Your Honours, there is no reason, in our submission, why, if you have a number of possible persons who may be sued the number should be reduced or why persons, for example, those who undertake to do work, who represent that the work is being done by them, should not be liable for the torts committed in the course of doing that work.

Now, there are some other matters to which I want to refer in that regard and may I do so now. Your Honours, we would submit there are sound reasons for maintaining the CML approach and treating it as applicable to this case. They are, if I could endeavour to summarise them, first there has been a significant movement away from classical or historical employer/employee situations. Many tasks which in the past would have been carried out by employees are carried out by contractors. This case demonstrates it. The work was done by employees unless they happened to be engaged on something else and to maintain a difference between the liability of the principal, on the one hand, and on the other is, in our submission, difficult.

KIRBY J: Can I just ask on that point what you just have said may not be controversial and it does seem to be my experience with a number of cases and it is also reflected in provisions of the Workplace Relations Act (Cth) - I am not sure about the State Industrial Relations Act but could you either now or in a note provide the Court with any material on which we can properly take judicial notice of these developments? The statutory source would be an appropriate basis but there may be something more.

MR JACKSON: Your Honour, I think there is a reference to the Workplace Injury Management and Workers Compensation Act at page 205, paragraph 59 in the Court of Appeal’s judgment. It is the provision that deals with cases where a contractor may be treated for the purposes of that Act as a worker. It was held not to be applicable in this case. I will endeavour to give your Honours perhaps something a little fuller.

KIRBY J: I was thinking more in the general field of industrial relations. You can see there is a whole part of the federal Act about workplace contracts and so on. That does seem to be a trend of the industrial relations law. It would be helpful to have some reference to that if it is available. We may be hearing a bit more about it later on.

MR JACKSON: Yes. I am not sure which way that trend might have gone with the recent legislation, your Honour, but ‑ ‑ ‑

GLEESON CJ: I thought a little earlier you disclaimed any suggestion that we should alter the law to obliterate any distinction in this area between employees and independent contractors.

MR JACKSON: I did, your Honour, yes. I am not seeking to resile from that. I prefaced what I said a moment ago by saying that there were sound reasons for maintaining the CML approach and treating it as applicable to this case and I was seeking to go on to explain why that was so. I do not suggest that the CML Case covers every case. What I do suggest is that it is more likely to cover more cases with the changes in arrangements for performance of work.

The second aspect I wanted to mention specifically was the importance of representation. Here a person undertakes to carry out work. That person or party sends, so far as anyone is concerned, its representative to do that work. The representative carries out the work and uses the respondent’s invoices. Why should someone injured by negligence in carrying out that work have to ferret out the fact that Boylan in this case had on this occasion engaged someone else to do the work, someone else I mean other than one of its employees.

In the case of an injured party, as in our position, they have to ask the employer, “What happened to the door?”, and they would say, “It was repaired but it couldn’t have been done properly”. You would say, “Who repaired it?” They would say, “Boylan”. Why should the fact that the mechanic turned up in his own vehicle and happened to be, as he was described, the man in black in the video and was not wearing whatever T‑shirt or shirt that Boylan provided as his livery, matter?

To take the most simple example that must happen hundreds of times in Australia every day, if an ordinary household appliance breaks down, one rings the person who supplies it or the person who is the agent in loose terms for that type of appliance and says, “Can you fix it up?” One has called the company. The person who turns up may or may not be an employee but is one to look - and one gets an invoice from that company. Is one to look at what happens to be written on the side of the vehicle if the vehicle is still there?

KIRBY J: You did answer a question earlier about whether it was necessary for the representation to extend to the plaintiff. Do I take it that the representation to the plaintiff was the provision of the letter from the Patels to the plaintiff? Did the plaintiff get the copy at any stage of the invoice or any other matter that linked the refrigerator repairer to the respondent?

MR JACKSON: I think I might have misled your Honour a little. The letter was sent after the event happened.

KIRBY J: The Patels’ letter?

MR JACKSON: Yes.

KIRBY J: Well, it expressed sympathy for the event.

MR JACKSON: Yes. The point I was making about it was that the people to whom the service was supplied – leave aside the contractual aspects of it – but the service was provided to the occupiers of the service station. Now, Mr Comninos was representing Boylan in providing that service at and to the proprietors of the service station.

KIRBY J: The comment was made that the plaintiff would not have known what the relationship was, but do you accept or not accept that Mr Comninos has to represent as well to the Patels, but also to your client, that he is acting for the respondents?

MR JACKSON: No, your Honour, I am not suggesting that at all, or accepting the second of those things at all. What I am suggesting is that in the course of representing Boylan and in a way in which he was identified as representing Boylan to the Patels that he acted negligently. Now, his negligent conduct was in breach of a duty that was owed to the Patels and other persons who might be injured by his negligent conduct.

Now, it does not matter that the representation is not made directly to the person injured. Your Honour, that comes from Justice Dixon in the case and also in a passage, I think, at paragraph 100 of Justice McHugh in – I think it may Scott v Davis, but one of the cases to which I referred earlier. Your Honours, those are our submissions, subject to the matter I mentioned before.

GLEESON CJ: Thank you, Mr Jackson. Yes, Mr Maconachie.

MR MACONACHIE: Thank you, your Honour. Your Honour the Chief Justice ‑ ‑ ‑

KIRBY J: I should have asked Mr Jackson, have there been any developments in the United Kingdom or Canada or other countries of the common law, in New Zealand, that we ought to be looking at in this area, reconfiguring the content of responsibility of one person for another?

MR JACKSON: Your Honour, the position still seems to be – if I can deal with Canada, one has Bazley v Curry to which reference was made in Lepore. The guiding principle of vicarious liability there appears to be a sufficiently close connection between the employer’s enterprise and the tortious conduct. If the employer’s enterprise has created the risk that produced the tortious act, the employer must bear responsibility for it. It is the enterprise risk – Justice McLachlin. Another formulation of the concept of enterprise risk is furtherance of the employer’s aims and, your Honours, that seems to remain the position in Canada.

In the United Kingdom the position seems still to be similar to the approach taken in Canada, adopting the principle of sufficiently close connection to give rise to vicarious liability. Your Honour, in New Zealand – it may well be because of the scheme for compensation – I think nothing really of consequence.

KIRBY J: Which is the United Kingdom case?

MR JACKSON: Your Honour, I do not really think things have changed significantly since the decision that was discussed in Lepore.

GLEESON CJ: Lister, I think it was.

MR JACKSON: Yes, I am sorry, Lister. There has been an application of it in the Court of Appeal. Perhaps I can give your Honours a reference to that but I do not think there has been ‑ ‑ ‑

GUMMOW J: We did not follow Lister.

MR JACKSON: I understand that, your Honour.

GLEESON CJ: Thank you, Mr Jackson.

MR JACKSON: But your Honour was asking me about the position there.

KIRBY J: Well, we normally try to take into account what happens in other jurisdictions. We recently looked at the French and German laws. I do not know what they do in these cases. But, anyway, if you find anything else that is of assistance, I would be grateful for a note. I do not think all wisdom lies in Australia or in High Court cases on matters of this principle.

GLEESON CJ: Yes, Mr Maconachie.

MR MACONACHIE: Thank you, your Honour. Your Honour, the Chief Justice, put to Mr Jackson during the course of his argument, is it Cool Runnings or Boylan who is vicariously liable for Mr Comninos’s default.

GLEESON CJ: He says both.

MR MACONACHIE: He said both. He did not say on what basis it should be both. He did not seek to identify whether or not Mr Comninos should be seen to be an employee pro hac vice of Boylan and, if so, on what basis. He did not attempt to assert that Boylan was vicariously liable for any tort by the company, Cool Runnings, and, if so, on what basis. That, your Honour, we would submit, is a good starting point to look at what is, in essence, the point of discussion here: three different kinds of strict liability. Non‑delegable duties of care, special duties of care, give them whatever badge you might like, but duties of care which impose upon one person a duty to ensure that reasonable care is taken for the safety of another person.

The second area of discourse is vicarious liability. That is where one person is said to be responsible in law for the wrongs of another – not for the acts but for the wrongs of another. Your Honours might remember that in Long’s Case there was a difference of opinion between the Judges of this Court about whether vicarious liability involved the personalising of the act to he who is to be vicariously liable or was it a true vicarious liability, did your personalise the wrong, the liability. I cannot immediately remember the case but this Court held the latter.

GUMMOW J: Darling Island.

MR MACONACHIE: That is where the debate arose, your Honour. It was resolved in favour of the vicarious liability, that is, imposition of the liability not imposition of the act theory, at a later point in time. I will find the reference. I have forgotten it for the moment.

The third point is agency, strictly so‑called. We submit that one looks at these three areas of discourse this way. The non‑delegable duty or the special duty of care is a species of strict liability as is vicarious liability but they have a fundamental difference and I will come to the law of agency or the CML form of agency in a moment. A non‑delegable duty of care involves a personal obligation to the victim which crystallises in liability no matter who is negligent or otherwise wrongful and there is consequent harm.

Vicarious liability involves a circumstance where there is no personal obligation owed to the victim but there is a relationship between the defendant and the tortfeasor which gives rise to the vicarious liability. We submit that when so understood and when the relational interests that give rise to these two species of the genus, strict liability, the only category of vicarious liability is that of employer and employee. Liability for the acts of independent contractors only proceeds from principles of non‑delegability.

All of the cases to which my learned friend has referred where there has been any suggestion of liability for the acts of an independent contractor proceed from the notion that there is a personal obligation, as was discussed by Justice Mason in Kondis and your Honours have been taken to that passage, the hospital cases, the teacher/pupil cases, the land support cases.

KIRBY J: But it is suggested that we are now in a different social condition. The contemporary situation in Australia has moved from traditional employment in some cases to this sort of hybrid where you give a form. I mean, you gave the form to the respondent – the respondent’s form and ‑ ‑ ‑

MR MACONACHIE: Yes, your Honour, deliciously ambiguous.

KIRBY J: You referred to Mr Comninos as “our mechanic” and he was authorised to receive what presumably you are now telling us is your money.

MR MACONACHIE: He did not receive it, your Honour.

KIRBY J: I am not talking about this particular case, but your form said he is authorised to receive the money.

MR MACONACHIE: Indeed, your Honour. Where he may be an agent for the ‑ ‑ ‑

KIRBY J: He went along and the person who deals with him, the plaintiff, who is injured by the fridge door coming off because of his negligence, has no idea about your relationship with him and is given your form and in those circumstances ‑ which is not uncommon, I am not blaming your client. It is quite a common thing. Also, you apparently had insurance that covered him so that when one looks at all this the question is, in this new hybrid situation does the law just go on blindly applying its old rule or does it consider, especially in the light of the CML case, that this requires some reconfiguration of the principle?

MR MACONACHIE: Three things to be said about that, your Honour. First, the plaintiff never ever saw the document.

KIRBY J: I did not hear that.

MR MACONACHIE: The plaintiff had no representation made to her by anybody about the relationship between ‑ ‑ ‑

KIRBY J: She had Mr Patel’s letter post‑injury saying we have been in touch with our refrigeration company.

MR MACONACHIE: That is hardly a representation by Boylan or Mr Comninos to the plaintiff.

KIRBY J: Yes, but you then put on your defence ‑ ‑ ‑

MR MACONACHIE: It cannot be an admission, your Honour.

KIRBY J: ‑ ‑ ‑ and you did not say it was not us, it was Mr Comninos.

MR MACONACHIE: That is a point, your Honour, that I have not come here to defend. It has never been raised in the District Court, never been raised in the Supreme Court.

KIRBY J: It is trial by ambush which is I thought something we had grown beyond.

MR MACONACHIE: Perhaps this is appeal by ambush, your Honour. The point has never been raised before.

KIRBY J: It is on the face of the record.

MR MACONACHIE: Indeed, but it has never been raised before, your Honour. I will deal with it in a moment, if I may, but the second thing I would want to say about it is that there is not only the possibility but there is evidence to establish that Mr Comninos or his company, Cool Runnings, were insured. So in terms of this lost distribution philosophy which has been in decay since 1984 ‑ ‑ ‑

GUMMOW J: Where do we find that insurance point you just mentioned?

MR MACONACHIE: It is referred to in our submission, on page 5, paragraph 14, your Honour. There is evidence that Comninos had his own public liability insurance and that is at appeal book 146, lines 45 to 50:

They also viewed his public liability insurance and the workers compensation insurance arrangement for him.

That is Boylan, when they determined to do business with him, and I put it that way because there was no formal contract, as it were, no written contract between them, they sought to ensure that he was certificated and they viewed his public liability insurance and workers compensation insurance arrangements.

KIRBY J: Where is that in the evidence?

MR MACONACHIE: At appeal book 60, at the top of the page, your Honour. Perhaps it starts a little earlier than that, page 59, in the evidence of Mr Duckworth, line 44 or thereabouts:

Q.       And you also said a contractor’s licence, now what was the contractor’s licence?
A.       It’s a plastic card issued by the Department –
Q.       Did it have a name, the licence?
A.       Yes, it was in the name of Nick Comninos or Comninos.
Q.       Did you view anything else, or documents, at or around that time of Mr Comninos?
A.       Yes, I introduced a procedure where they had to provide us with their current public liability and also their worker’s comp.
Q.       Did you view that as well?
A.       I did.

KIRBY J: What page is all that?

MR MACONACHIE: Appeal book 59, commencing at line 40, that is this Court’s numeration, and concluding at 60, line 15.

KIRBY J: Right.

MR MACONACHIE: The third thing to be said about what your Honour Justice Kirby put to me we answered by reference to Trigwell’s Case which is in our written submission.

KIRBY J: Just before you come to that, at least one matter relevant to that is the point that Mr Jackson made that it is not unusual in cases that a couple of defendants are liable and that they all have insurance, that is not unusual. The fact that Mr Comninos had insurance is not conclusive of the point. I agree it is a fact of it, it is relevant.

MR MACONACHIE: I was merely responding to a proposition your Honour put to me that we had insurance to cover him. In fact, he had insurance to cover him, whoever he was, be it the company or Comninos.

KIRBY J: Traditionally, we do not decide these cases by insurance. We look at the liability of the ‑ ‑ ‑

MR MACONACHIE: I understand that, your Honour, I was merely responding to the proposition your Honour put to me, “Why shouldn’t we have this new world order?” and one of the matters that your Honour put to me was ‑ ‑ ‑

KIRBY J: It is hardly a new world order.

MR MACONACHIE: It is, your Honour, it will upset 166 years of settled law since Quarman v Burnett.

KIRBY J: Yes, but the common law responds to new circumstances and hybrid relationships are not only common now and unknown to people who are injured but they are becoming more common because everybody is being encouraged to get into their own little companies, partly for tax reasons and partly because that is what industrial relations is moving towards, apparently.

MR MACONACHIE: But that is anecdotal, your Honour. It is, your Honour.

KIRBY J: We go to supermarkets and we live in the real world, Mr Maconachie, even though you might not want it.

MR MACONACHIE: Indeed, you do, your Honour, but as Justice Mason said in Trigwell’s Case, this Court does not have the skills, does not have the facilities, does not have the time to be able to look at these sorts of matters in the same way as your Honour did when your Honour was on the Law Reform Commission.

KIRBY J: Yes, but we did look at it in the case of Brodie and in Hollis v Vabu there is a passage at the end of the joint reasons which says that it is not appropriate to simply leave all these things to Parliament. We know Parliament does not do them.

MR MACONACHIE: Well, what Parliament did after this Court’s decision in Brodie ‑ ‑ ‑

KIRBY J: It is too busy with other things.

MR MACONACHIE: ‑ ‑ ‑ was to change the law to reinstate the principles as they were.

GUMMOW J: It did not reinstate it, Mr Maconachie.

MR MACONACHIE: Well, your Honour, to certainly make a significant change from what was decided in Brodie.

GUMMOW J: And a significant change from what the mess was before.

MR MACONACHIE: I will accept that, your Honour.

GUMMOW J: Yes.

MR MACONACHIE: But my point is no more than this, your Honour ‑ ‑ ‑

KIRBY J: Justice Mason did not do what Trigwell says in a strict way when he concurred in the decision in Mabo, so it is a matter of each case.

MR MACONACHIE: Of course it is.

GLEESON CJ: I thought you said in your written submissions that this is an area in which Parliament has intervened to quite a significant extent recently.

MR MACONACHIE: It has, in the sense that in the Law Reform (Vicarious Liability) Act 1983 it dealt specifically in 1983 with that situation not unfamiliar to this Court in which an independent function was imposed upon somebody by either the common law or by statute. Mining deputies used to be under the Coal Mines Regulation Act, section 54 of which provided a number of general rules, the coal mine operator employed the mining deputy, but the mining deputy had imposed upon him, pursuant to the general rules in section 54, a number of functions which were personal to him, and if he failed to carry out his functions properly, the employer was not vicariously liable for him.

GLEESON CJ: Well, let us take a particular aspect of that legislation, section 6.

MR MACONACHIE: Yes.

GLEESON CJ: Is the purpose of section 6 of that Act of 1983 to produce the consequence or to retain the consequence that the Crown is not vicariously responsible for the tortious conduct of police officers?

MR MACONACHIE: That is a large question. The purpose of section 6, I believe – and I have not looked at it specifically for this case, your Honour – but the purpose of section 6 was to place the police officer – I think I am right in saying this – in a category, that is, a person in the service of the Crown, which would permit the Crown to be sued as well as the police officer, pursuant to what is now the Crown Proceedings Act that used to have another longer and more complicated name.

Later – and it does not appear in the short reprint that I have because this is as at 1992 – some time after 1992 there was in fact inserted into this Act Part 4 sections 9 to 9G which provides for police tort claims, and one is required to sue not the police officer but the State, unless the State at an early stage in the proceedings denies that it is vicariously liable for the defaults of the police officer, be it negligence, be it an intentional tort, as they are so‑called, but sometimes wrongly, that is, malicious prosecution, false imprisonment, misfeasance in public office, and the like.

There is a complex of circumstances in which the Parliament since 1983 and quite recently has looked at the question of vicarious liability for those who have independent functions and has said, “We’ll change the law in this respect”. My point in the written submission is that since Quarman v Burnett the general rule has been you are not liable for the torts of an independent contractor. That rule, a fundamental rule which pervades commercial life in this country, has not been addressed by Parliament and this Court, as we say in the submission, should take note of the Parliament’s inactivity in that regard.

GUMMOW J: New South Wales has enacted ‑ ‑ ‑

MR MACONACHIE: New South Wales, your Honour, and ‑ ‑ ‑

GUMMOW J: Was section 7 of this 1983 Act designed to overcome a particular decision, do you know?

MR MACONACHIE: Allow me just to look at that for a moment, your Honour. That is really the operative section in the Act. That is the section which is intended to defeat the plea, as it were, “Not my responsibility. That is an independent function imposed upon a servant of mine, an employee of mine, by the law, by the Parliament.” The mining deputy is the best example of ‑ ‑ ‑

GUMMOW J: Another example is the pilot.

MR MACONACHIE: The pilot, yes, your Honour. The pilot who is engaged by the ‑ ‑ ‑

GUMMOW J: By the port authority.

MR MACONACHIE: ‑ ‑ ‑ port authority and he is there as an independent functionary. The Parliament has looked at some significant areas of the interrelationship between independent functionaries on the one hand and the people they serve on the other and have said “Well, this is how we intend to change the law”, but they have done nothing about the Quarman v Burnett rule which, as we say in our written submissions, is of long standing and underpins a very large number of commercial transactions in all sorts of ways: insurance arrangements, loss allocation ‑ ‑ ‑

KIRBY J: In this case the insurance arrangements were apparently at least sufficiently unclear to motivate your client to get a policy that covered people in the position of Mr Comninos.

MR MACONACHIE: We can hardly be criticised for being careful, your Honour ‑ ‑ ‑

KIRBY J: It is prudent of you.

MR MACONACHIE: ‑ ‑ ‑ because one never knows when the law is going to be changed retrospectively by judicial decree.

KIRBY J: It may be that that was a very prudent decision.

MR MACONACHIE: But, your Honour, that is what happens if something like Quarman v Burnett is interfered with or overturned. There is liability imposed on people in ways that they may not be insured for and with the Limitation Act providing for personal injuries extensions they can go back many years. I stood in the Court of Appeal just two days ago arguing about the proper construction of regulation 73 of the Construction Safety Act. It has been repealed for five years and the Court of Appeal has been debating whether or not the Barwick view in Buckman v Flanagan or the Mason/Jacobs view is the correct one.

KIRBY J: That is a mystery that awaits us.

MR MACONACHIE: Your Honours refused special leave in Maggiotto, but you may get to look at it again.Your Honours, identification as a representative is at the heart of this case. Of course CML represents the law, but that is the third category of strict liability, as it were, that I wanted to deal with. What Sir Owen Dixon said in that case and what the other two in the majority said in that case is unexceptional. They treated Mr Ridley as a true agent. Your Honours have been taken to it; I am not going to take you there again. He spoke with the voice of the company ‑ ‑ ‑

KIRBY J: There were three others in the majority, were there not?

MR MACONACHIE: Chief Justice Gavin Duffy, Justice Starke and ‑ ‑ ‑

KIRBY J: Justice Rich agreed with Justice Dixon.

MR MACONACHIE: ‑ ‑ ‑ Justice Dixon I think were the three in the majority and then Justices Evatt and McTiernan were in the minority. I am sorry, Justice Rich agreed in terms with Sir Owen Dixon.

KIRBY J: Justice Dixon.

MR MACONACHIE: I am sorry, I apologise for that, your Honour. But the essence of that case – and you have already been taken to it by my learned friend – is that Ridley spoke as the voice of, as the Chief Justice and Justice Starke said, the defendant.

KIRBY J: Why did not Mr Comninos act as the voice of your client? He had his dockets, he went along, he fixed the fridge and he did it under this arrangement with your client.

MR MACONACHIE: Yes, your Honour.

KIRBY J: Why is he not in the same position?

MR MACONACHIE: He did it as a classical independent contractor as the contractual arrangements between him and the controller of the refrigerator permitted ‑ ‑ ‑

KIRBY J: Why did you give him that form with your letterhead on it and call him “our mechanic”.

MR MACONACHIE: I have a finding of fact from the Court of Appeal that it was ambiguous and therefore not sufficient to identify him in the relevant and necessarily close sense with Boylan.

KIRBY J: “He is our mechanic.”

MR MACONACHIE: Indeed, your Honour. I have a finding of fact – I can only say it this way. I have a finding of fact by the fact‑finding tribunal, the Court of Appeal.

KIRBY J: Yes, but they disturbed the primary judge and we are being asked to restore the primary judge.

MR MACONACHIE: Indeed, your Honour, and there is no proper basis for so doing it on that finding. The Court of Appeal looked at all of the evidence, including the identification of Mr Comninos in terms of his livery, in terms of his truck, in terms of how he introduced himself. He was there on behalf of, not as, Boylan. It was a purely ‑ ‑ ‑

KIRBY J: On behalf of is going a long way down the road.

MR MACONACHIE: He could have said, I suppose, “I am here to fix” ‑ ‑ ‑

KIRBY J: He could have said, “I am Mr Comninos of Cool. Haven’t you ever heard of Cool? Cool is famous.”

MR MACONACHIE: “I am here to fix the fridge. I want you to understand that I am here as an independent contractor and not as the true agent of” – I mean, your Honour, it is the real world.

KIRBY J: Indeed it is and the real world is of a hybrid relationship of this kind.

MR MACONACHIE: I would submit not, your Honour. The hybrid relationship that was identified in Hollis was entirely different from that which ‑ ‑ ‑

KIRBY J: Not entirely; it was different. The facts were different but it is not entirely different.

MR MACONACHIE: Entirely different, with respect to your Honour. There was a term in the contract to the effect that the person who was wearing the livery of Vabu Pty Limited had to bear in mind that he was the emanation of the company, that he was advertising the company. He was, for all the world to see, the way he was dressed up and the work that he did, he was the company. That is what Sir Owen Dixon was asserting in CML when he spoke of Mr Ridley as a true agent.

GLEESON CJ: How does this distinction between employees and independent contractors operate in practice in relation to building work where the engagement of subcontractors is a phenomenon that has been very well known for a very long time?

MR MACONACHIE: I am sorry, I was not sure ‑ ‑ ‑

GLEESON CJ: If somebody is injured as a result of the negligence of somebody on a building site, how, in practice, does this distinction between employees and independent contractors operate in a context where, as I say, for a long, long time a lot of work around the site may be being done by subcontractors?

MR MACONACHIE: I have done a number of those cases over the years, your Honour, and I have never heard of the CML construct being intruded into it. It becomes a question of employment on the one hand, independent contractor on the other, who was in charge of what work. It just depends on its own facts. Each case depends on its own facts. There are any number of cases brought by persons claiming to be employees having suffered harm and not being on the books as employees, where they have a company of their own and a truck of their own but it is dressed up in the livery of Boral Pipes, or whatever, their wife is a director, they are a director and they are dealt with as though they are independent contractors, not employees, but they are different in kind because there is no third party involved.

To answer more directly your Honour’s question, the way in which this Court dealt with the complex arrangements in Stevens v Brodribb is the answer. There the question of employment or not was looked at. There the question of non‑delegable duty was looked at. There the question of co‑ordination of activities and a personal duty of care was looked at. It is in that environment that the kind of cases that your Honour is asking me about are decided and, of course, various statutory counts that might arise under the old Construction Safety Act or, more controversially, under the more recent occupation, health and safety legislation.

KIRBY J: As Justice Gummow pointed out, we state the common law for the whole of the Commonwealth. That Act, whilst definitely relevant, is just an Act of the State of New South Wales.

MR MACONACHIE: Yes, your Honour, but it is the State ‑ ‑ ‑

KIRBY J: It has to be taken into account. It does show that a Parliament has addressed one aspect of the issue of vicarious liability but hardly this aspect.

MR MACONACHIE: No, but it is in the State in which the events occurred and in which what your Honour has referred to as this hybrid in this case was in place.

KIRBY J: It does not deal with the whole issue that is now before us.

MR MACONACHIE: No. In any event, your Honour, what is at the heart of this case is the reach of the construct of representative, true agent in the CML Case. It was an entirely different case from this case. It was a case in which a person was authorised to enter into contractual relationships with third parties and it was in the course of attempting to do that that the defamatory words were spoken. There seem to have been quite a number of those sorts of cases between 1900 and certainly up to and including CML. It must have been interesting times indeed. This case is far away from that.

There are two passages in Atiyah’s book on vicarious liability I would want to take your Honours to to try and make that point. Can I take your Honours to chapter 9 and to page 100. There Professor Atiyah is speaking about vicarious liability for agents and considering whether or not there is a general principle. He starts with the proposition that the law is in something of a doubtful state. At page 100 at about point 6 he says:

In tort, on the other hand, if there is any true vicarious liability for agents, it is a liability of exactly the same nature as liability for servants, i.e., it depends on the mere imposition of responsibility by the law on one person for the act of another.

In fact, this Court has determined that it is a liability for the wrong rather than the act that gives rise to the wrong. Further down the page:

If, then, the agent figures at all in the law of vicarious liability the term “agent” must be used in a very wide sense . . . In this sense it is probably true to say that all servants are agents, and the question then becomes: Is there any general principle of vicarious liability for agents who are not servants?

He gives a number of concrete examples: the innkeeper who calls in a policeman and:

a passenger disembarking from a ship gets a porter (who is a free‑lance, not employed by anyone) to carry his bags and the porter drops one on somebody’s head, is the passenger liable?

It was held no. It is difficult to see how it might be. There is an identification there, one might argue, of the porter with the passenger as he walks along beside him carrying the bags.

If a car owner, seated in his stationary car –

that is Morgans v Launchbury and Soblusky and Scott v Davis and I do not want to say anything more about that. At page 101 he says:

Among writers, at least three different main theories can be discerned. First, there are those who assert that the law recognises a general principle of vicarious liability for the torts of an agent . . . Then there are those, comprising the majority of English writers who deny the relevance for the law of tort of the category of agents altogether . . . all agents are either servants or independent contractors for the purposes of the law relating to vicarious liability. Therefore there is no such doctrine as liability for agents as such.

Then he goes on to explain what the difficulties of that second theory are and says at about point 5 on the page:

The third main theory is that, while there is no general principle of liability for agents, there are certain exceptional cases, in particular where one person delegates to another the function of representing him in the course of a transaction of a consensual (but not necessarily contractual) nature. This is the view taken in Flemings Law of Torts –

I think he was referring to the 3rd edition.

GUMMOW J: Is this the non‑delegable duty area?

MR MACONACHIE: Well, no, I think it is the CML area, your Honour. That is as I understand it. He says:

and is not dissimilar to the line taken by the Restatement –

he is talking here about vicarious liability as such, your Honour, not non‑delegable duty of care which proceeds on the basis that there is a relationship not between the wrongdoer and the person liable, but between the person liable and the victim –

which denies a general principle of liability for the physical acts of agents but imposes liability for non‑physical torts in fairly general terms, in particular for deceit and defamation.

It is the CML Case.

GLEESON CJ: How does this author treat CML?

MR MACONACHIE: He does that, your Honour, in chapter 9 at page 108. He refers to Colonial Mutual Life Assurance Society and extracts the passage that we have been looking at with some care today. Just before he does so he says:

There was some discussion in that case as to whether R was a servant or an independent contractor but the majority held that even if he was not a servant the defendants were liable.

He then sets out the relevant passage.

Here, therefore, the High Court, although denying the existence of any general liability for agents, affirms such liability where the agent is representing the principal in transactions with others. The reasoning is not, however, entirely easy to follow, for despite the express denial of any general rule the logic of the reasoning would seem to require such a general principle wherever the independent contractor is acting as the principal’s “representative – which would seem to mean the same thing as agent.

HAYNE J: That displays, does it not, a slide that is made between two radically different ways in which “representation” and “representative” are relevantly used.

MR MACONACHIE: Yes, your Honour.

HAYNE J: In CML, Ridley represented CML in the sense that, as agent, he sought to make contracts between third parties and CML. His representation was of that kind. By contrast, it seems to me that your case seems to boil down to saying that Boylans and/or Comninos, it matters not which, may have represented to the Patels, but not to any third party, first, that Comninos was doing what he did for the Boylans and, second, may even have gone so far as to represent that Comninos was doing it as an employee of Boylans. That, I think, is the height of the case against you but there is a distinction between the representation identified last and the sense in which “representation”, “represented” and other cognate words are used in CML where it is to act as agent for the making of contracts between CML and third parties.

MR MACONACHIE: Indeed.

HAYNE J: That slide seems to be made, if I may say so with great respect, by Professor Atiyah.

MR MACONACHIE: I would adopt that, your Honour, but perhaps with this qualification that it is not so much as a slide as not having as sharp a focus on that which needs to be considered as perhaps the discussion in this case gives one. But the distinction that we seek to make between the representative case or cases, CML and this case, is not just that in CML contractual relationships were being created whereas here, obligations were being discharged, but in CML, Ridley stood there as the emanation of, the manifestation of, the personification of CML, not only by reason of what he said and any pieces of paper he might have had but by reason of what he was doing, that is, asking people to come into a contractual relationship with the person for whom he stood there as agent, whereas here, this was nothing more than a commercial relationship between Comninos on the one hand and/or his company – we do not know which because that was not investigated and that may be, and we say is, critical to know how it is that he or his company represents anyone.

HAYNE J: The sense in which Justice Dixon in CML was using the word “representation” at page 50 in the expression “involve no representation” may perhaps better be understood if particular regard is paid to the next sentence or two where his Honour says:

the “agent” represented the Company in soliciting proposals so that he was acting in right of the Company with its authority –

and it is in that sense that his Honour used the expression “involve no representation” in contrast with services done for the advantage of a person who requests them.

MR MACONACHIE: Indeed. I hope, your Honour, that notion is conveyed in paragraph 16 of our written submission. Whilst you have ‑ ‑ ‑

KIRBY J: Mr Comninos turned up at the Patel’s service station. He stood there and represented himself as the emanation of your client. He had forms that you had supplied him to back that up and he thereby was permitted to touch their fridge, which otherwise he would have no business doing. He was entering into a contract with the Patels and he was authorised to take their money for you.

MR MACONACHIE: Not entering into a contract, your Honour. He was discharging an obligation that had already been contracted for both ‑ ‑ ‑

KIRBY J: With you.

MR MACONACHIE: With Boylan.

KIRBY J: Yes, that is you. That is the respondent.

MR MACONACHIE: He was discharging that obligation, but not creating one.

KIRBY J: He was discharging the obligation that was effected by contract with you.

MR MACONACHIE: Commonly done, your Honour, commonly done and has been for 166 years, at least by independent contractors, with the principal protected, if that is the right word by a rule so deeply rooted in the law that as – I think it was Sir Victor Windeyer spoke of there are some concepts that go deep, too deep, to be uprooted by judicial revision.

GLEESON CJ: This may not touch the outcome of the case – I do not think it does – but in fact it was a little more complicated than that. He was discharging Boylan’s obligation to Associated Foods or whatever its name was.

MR MACONACHIE: That is one way of analysing it, your Honour.

GLEESON CJ: As a result of some contract of which we are not aware the Patels had the right to call upon Associated Foods to fix the refrigerator door.

MR MACONACHIE: Yes, your Honour.

GLEESON CJ: So there was a chain of contractual relationships involved actually?

MR MACONACHIE: Indeed, there is, and Mr Patel was not called to give evidence. He was not cross‑examined about his understanding to try to draw from a letter sent as an act of courtesy and sympathy that he understood something about Mr Comninos as being the emanation of the ‑ ‑ ‑

KIRBY J: The respondent.

MR MACONACHIE: ‑ ‑ ‑ respondent is to go too far, and just before lunch could I ‑ ‑ ‑

GLEESON CJ: We were actually shown the contract pursuant to which Boylans sent somebody to fix the door and that was not the contract with Mr Patel.

MR MACONACHIE: No. Your Honour, just before we conclude for lunch could I take your Honours to page 104 of Professor Atiyah’s book at chapter 9. It does not answer Justice Kirby’s concern about changing circumstances but there is a ‑ ‑ ‑

KIRBY J: He does deal with that a little bit in the very last lament of that chapter, which is a very helpful chapter, which…..reading where he says this is all very, very difficult and it is not very satisfactory.

MR MACONACHIE: Quite, your Honour.

KIRBY J: That is usually the case where the courts try to do better.

MR MACONACHIE: If they can. If they are in a situation ‑ ‑ ‑

GLEESON CJ: We fixed it all up in Northern Sandblasting. Is that a convenient time?

MR MACONACHIE: It is, your Honour.

GLEESON CJ: We will adjourn until 2.00.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.01 PM:

GLEESON CJ: Yes, Mr Maconachie.

MR MACONACHIE: Mr Jackson took your Honours to Northern Sandblasting v Harris 188 CLR 313, particularly at 336 in the judgment of Justice McHugh. I only want to use it as a signpost, as it were, to remind your Honours of a submission that my learned friend made. Justice Gummow, I think it was, asked Mr Jackson whether or not he adopted that last paragraph on page 366 and I think my learned friend said “Well, which part of it?” and there was some discussion between Justice Gummow and Mr Jackson which, according to my recollection and note, had Mr Jackson put this submission, that Boylan would not be liable for that which was done every time an independent contractor did things for Boylan, but if an independent contractor was doing work for Boylan as the principal for other people then there would be vicarious liability.

In response to that submission can I ask your Honours to go to page 104 of Professor Atiyah’s book? This was the passage I was going to take you to just before lunch. There the learned author deals with the authorities against general liability for agents and refers to Quarman v Burnett and extracts a passage from Mr Baron Parke who said:

“No other person than the master of such a servant can be liable on the simple ground that the servant is the servant of another; consequently a third person entering into a contract with the master, which does not raise the relation of master and servant at all, is not thereby rendered liable; and to make such a person liable recourse must be had to a different and more extended principle, namely that a person is liable not only for the acts of his own servants, but for any injury which arises by the act of another person, in carrying into execution that which that other person has contracted to do for his benefit. That however is too large a position.”

Professor Atiyah then goes on to say:

At first sight, the concluding part of this passage seems to be strongly against any general liability for agents, but it is to be remembered that in this case the coachman was employed under an ordinary contract of service by the jobmaster who was undoubtedly liable for his negligence. Moreover, to deny liability for torts committed by a contractor doing work for the benefit of another is not quite the same thing as to deny liability for torts committed by an agent –

and he is there speaking, in my submission, about true agency –

in doing work on behalf of another.

He there refers to Bush v Steinman at note 20 where Chief Justice Eyre is said to have said:

“The general proposition that a person shall be answerable for any injury which arises in carrying into execution that which he has employed another to do, seems to be too large and loose.”

That was right 200 years ago. It is right now, in our respectful submission.

KIRBY J: Yes, but at 334 and 335, which is the passage that Justice McHugh refers to – he refers to 333 to 336 which is in chapter 8, I think – Professor Atiyah referring to the changes in relationships of small‑time contractors says:

It could well be that this aspect of the matter will assume greater practical importance in the near future . . . If this kind of arrangement becomes at all common, and if the courts are satisfied by the terms of the contracts in question that they are truly contracts for the employment of independent contractors, it will not be surprising if the courts come under pressure to extend the doctrine of vicarious liability for contractors still further.

The question here is whether, to the extent that the case that Justice McHugh keeps referring to, the CML Case, gives a basis for extending liability, it applies in a case such as the present and in cases analogous to it. There are hidden away in the pages of the Commonwealth Law Reports all sorts of treasures but sometimes they get overlooked, but Justice McHugh never forgot the CML Case and he kept referring to it over many years and now it is presented to us and we have to consider whether, as Professor Atiyah is suggesting, new circumstances attract that principle.

GLEESON CJ: Mr Maconachie, did the evidence show who Mr Patel contacted to complain about this door?

MR MACONACHIE: We were discussing that over lunch, your Honour. Let me see if Mr Chen has been up to his task. We do not think so, your Honour.

GLEESON CJ: The reason I asked the question is this. There has been some reference to new circumstances, but so far as Australian Co‑operative Foods Limited was concerned, I should have thought that Mr Comninos or his company was a common or garden subcontractor. So far as Mr Patel and Ms Sweeney are concerned, it may be that they would not have had the faintest idea who Australian Co-operative Foods Limited was going to send along to fix this door. I assume that as between Australian Co‑operative Foods Limited and Mr Patel there was some contractual obligation on Australian Foods to keep the unit in good repair.

MR MACONACHIE: The evidence does not disclose.

GLEESON CJ: But at least as far as Australian Co-operative Foods Limited was concerned, what was the difference between the position of Mr Comninos or his company and any subcontractor?

MR MACONACHIE: We do not know, but one can speculate, as the trial judge did, as we have referred to in our written submission, about just what might have been in the mind of Mr Patel or Ms Sweeney in terms of who Mr Comninos was. The Australian firm, Dairy Farmers ‑ ‑ ‑

GLEESON CJ: In terms of the application of principle established by this case to other cases, what is the difference between what went on here and any case of subcontracting?

MR MACONACHIE: Nothing, we would submit.

KIRBY J: Except that you give your form and you supply that and you call him your mechanic and you authorise him to receive your money. It is not the ordinary case of a subcontractor, otherwise we would not be here. It is a case that is not as strong as Hollis v Vabu, but that is not the way things happen in the common law. It is an endeavour to push the principle a little bit further or to reconfigure the principles, as Professor Atiyah says.

MR MACONACHIE: It become a question of fact as to what that which Justice Kirby has referred to does in terms of characterising Comninos or his company – we do not know who – in terms of a relationship with Boylan. The trial judge said at page 159, line 21:

Further, in order to promote that relationship, the second defendant [Boylan] provided documents such as those revealed in Ex F, clearly indicating that his work was done to further the undertakings of the second defendant and indeed effectively publishing the name of the second defendant on the documents created for that purpose.

He then says, relevantly and importantly:

I ask myself – and to some extent this is a somewhat speculative observation – I wonder who the first defendant thought it was dealing with –

He, in a very tentative and speculative way, comes to the point of saying the customer more likely than not would have thought that he or she was dealing with the second defendant.

KIRBY J: Especially when he hands the document on page 95, “Quirks REFRIGERATION A Division of Boylan Nominees Pty Ltd”, signed by Mr Comninos.

MR MACONACHIE: The Court of Appeal exercising its section 75A functions came to a different factual conclusion.

KIRBY J: We are considering the attack on that decision.

MR MACONACHIE: Indeed, your Honour, and, in my respectful submission, the decision which they came to they were entitled to come to. The trial judge’s finding does not have elements of, dare I say it ‑ ‑ ‑

KIRBY J: Be careful now.

MR MACONACHIE: I will not, but it is not an Abalos protected, if I can use that shorthand, finding. The Court of Appeal has done its job ‑ ‑ ‑

KIRBY J: “Fox v Percy protected” is a better expression.

MR MACONACHIE: ‑ ‑ ‑ and that is the factual finding that we come here, in our respectful submission, to look at the principle about. At page 333 of Atiyah ‑ ‑ ‑

HAYNE J: Just before you go on, the proposition under discussion is one which turns upon attributing legal significance to the uncommunicated beliefs or impressions of the Patels to the determination of the liability of Boylan to Ms Sweeney.

MR MACONACHIE: Indeed, your Honour. At 333 and 334 Professor Atiyah does propound an argument in favour of a different order, but I would invite your Honours to read the introduction at page 333 where the learned professor speaks of:

a good deal of disagreement among writers as to whether this form of liability is ever justifiable on policy grounds.

He sets out in very short form reasons that are opposed to those that he expands on later.

KIRBY J: You are not suggesting we should abolish the law of vicarious liability?

MR MACONACHIE: Mr Baty thought it should be in 1916 but he might have been as out of step as would, I respectfully submit, any attempt to drive a coach and four through Quarman v Burnett, if I can put it that way, because that is what it would amount to, your Honour, in our submission.

KIRBY J: The question of policy seems to me to be whether or not, as Professor Atiyah suggests, that there is a need to configure the law or whether with the change in independent contractors, and the fact that their numbers are increasing and their variety is increasing and that normally they will have their own insurance, that is a reason for sticking with the present principle, at least until Parliament decides to do another thing. That is a legitimate question of policy and debate and I can see that issue but I do not think we can pretend that there is not a question here ‑ ‑ ‑

MR MACONACHIE: I am not suggesting otherwise.

KIRBY J: ‑ ‑ ‑ and the fact that it has kept coming up, and Justice McHugh was foremost in signalling it, is the reason why special leave was granted in this case.

MR MACONACHIE: Indeed, your Honour.

KIRBY J: It is a question do you take another little step from Hollis or do you just say “Well, we are not going to do that and we stick with Hollis as far as she goes”?

MR MACONACHIE: Yes, indeed. I refer to the analysis of the relationships which inform the three kinds of vehicle, if I can call it that, which is the subject of debate and I do not want to say anything more than that other than to say Hollis is as far as you can take it if you analyse it in terms of the relationships that I spoke of when I first got to my feet.

GUMMOW J: Mr Maconachie, you have to meet Mr Jackson’s point, which is not an attack on Baron Parke. He naturally trimmed it somewhat more narrowly. He spoke of the Comninos people as being performers of the contract in the place of, or substitution for. Remember that? What do you say about that?

MR MACONACHIE: It is a factual question, your Honour, and the factual question was resolved, in our respectful submission, by the Court of Appeal by finding that Mr Comninos or his company – and I repeat, we do not know who it was that was in the relevant relationship with Boylan. That was never explored, whether it was the company or whether it was Mr Comninos, which makes this an entirely unsuitable vehicle to examine what is an important question.

Secondly, whoever it was, the Court of Appeal found that he was an independent contractor with his own business. He was at arm’s length, as it were, to Mr Boylan. He did other work for other people. All these references to the facts are in our written submission. He worked for other people. There was no livery involved. He had his own trade name displayed on his van. He was so far away from the Hollis v Vabu construct, so far away from the CML construct. As a matter of fact, it was no more than somebody who had a contractual obligation to discharge. He did not have enough of his own economic resources to do and did that which is done every day of the week and has been for years: he got somebody else, not part of his enterprise, to go and do it for him.

GLEESON CJ: That is why I had some difficulty with your proposition that there is something wrong with the suitability of this case as a vehicle. I would have thought it was an excellent vehicle for testing Mr Jackson’s proposition because of the sheer ordinariness of the case.

MR MACONACHIE: If your Honour pleases, I accept that,0 but in terms of ‑ ‑ ‑

HAYNE J: Indeed, there can be no problem, can there, unless the person who has been negligent has performed the task giving rise to the negligence for the advantage of another person who is either the employer or the person who engages that negligent party as an independent contractor. The problem cannot arise unless ‑ ‑ ‑

MR MACONACHIE: Indeed, your Honour, I accept that.

HAYNE J: Therefore, the question is one of characterising the relationship between the person for whose benefit the work is done and the negligent party.

MR MACONACHIE: Everybody who enters into a contract by and large intends to get some benefit out of it. This idea of for whose benefit is it done is really just putting a badge of meaningless reference upon ‑ ‑ ‑

HAYNE J: It is putting a badge on the facts which is common to both cases and thus advantage, unless you say that regardless of the relationship between the two gaining of benefit is sufficient reason to attribute vicarious responsibility, the moment you reject that and subdivide the class, simply pointing to the fact of benefit takes you nowhere.

MR MACONACHIE: Indeed, I accept that, your Honour. In that vein can I refer to something that fell from the Chief Justice’s lips during his discussion of the matter with Mr Jackson. My note is that your Honour said the fact that he was acting as the defendant’s representative makes all the difference. The context in which it was said I do not immediately recall. To use the words “the defendant’s representative” is really to decide the issue, not to analyse it.

GLEESON CJ: It depends what you mean by “representative”.

MR MACONACHIE: Of course. That is my very point.

GLEESON CJ: But I would have thought a perfectly and completely accurate description of either Mr Comninos or his company was that he was Boylan’s subcontractor.

MR MACONACHIE: Yes, “representative” in this area of discourse has been restricted to the very narrow true agency sense in which it was used in CML and that is not this case. The only other matter that I wanted to refer to was Justice Kirby’s reference to the organisation test and what Lord Denning had to say about it in Denham’s Case, I assume your Honour was referring to, years ago, and how that has informed the hospital cases and the like, and indeed it has, but that has always been in the context of duties of care which are personal and special and not in the sense of relationships whereby the wrong done is attributed to the defendant. It is an area of discourse in which the duty is owed by the hospital, for example, to the victim. I refer again to what I said in the first few sentences when I spoke earlier. The organisation test which has been out of favour for a long time and was – in Brodribb’s Case this Court opted for a multifactorial test for employment which remains the law.

KIRBY J: Maybe one of the factors is, is it part of or connected intimately with the defendant’s organisation or enterprise?

MR MACONACHIE: It is a factor, your Honour, but, because of the way in which the matter was dealt with in Brodribb in particular, not nearly as important as questions of control and command and responsibility for organisation, not just, is it part of the whole.

KIRBY J: Control is in the modern age where people are sitting at computers and doing high tech work. It is a factory notion, it is not a modern notion of employment, or at least of all employment. It is hard to import it into every aspect of employment today as a universal test.

MR MACONACHIE: But control in the sense of Zuijs v Wirth’s Circus and Humberstone v Northern Timber Mills is a feature of all relationships of employment. It can be a factor in but not a decisive factor in other relationships as well. One has to stand back and look at the relationship between he who is sought to be visited with liability and he who has committed the wrong but also the relationship of both of those persons to the victim and other players in the field as well.

KIRBY J: I thought the Court had said recently about the imperfection of the control test as a universal test for all forms of employment.

MR MACONACHIE: It has not since Brodribb, anyway, been a universal test. Brodribb stipulated for a multifactorial test of which the central element of control was an important, if not the most important, one. The whole of the relationship between the parties has to be examined but control in its various forms is a central and important feature but not necessarily a determinative one. This was just what the Americans would call a boilerplate independent contractor arrangement which, in our respectful submission, falls neatly and squarely within the Quarman v Burnett category is a hundred miles away from Mr Ridley and CML. They are our submissions, if your Honours please.

GLEESON CJ: Thank you, Mr Maconachie.

KIRBY J: In a rational system of litigation one would like to think since the great reforms of the 1970s that where a person says, “You’ve got the wrong defendant. You don’t know because you are just the person who had a door fall on you, but there is the correct defendant. He is either liable in negligence or not. He is an independent contractor and he has his own insurance. Go and sue them, not us.”

MR MACONACHIE: Yes. I am reminded, your Honour, thank you, of a discussion I had with Mr Jackson at lunchtime and just before you came on. Of course your Honour is referring to the sort of notions that Justice Heydon, when in the Court of Appeal, dealt with in Nolan and Marsden’s Transport. It is agreed between the parties – and if I do not put it correctly Mr Jackson will correct me – that by the time the matter came on for hearing in the District Court it was well known to the plaintiff that

the defendant would contend that Mr Comninos was an independent contractor, so there can be no question of trial by ambush.

KIRBY J: Of course, you are then down the track and the litigation is on foot. Depending on when the communication is made, costs have been incurred.

MR MACONACHIE: Indeed, your Honour, but at the time this matter was litigated in the District Court before Judge Robison there was no surprise in terms of what the defendant would contend was the relationship between itself, Boylan, and Mr Comninos and/or his company. I do not want to say any more than that because that is, as I understand it, the concession that Mr Jackson very kindly and properly is prepared to make. They are our submissions.

GLEESON CJ: Thank you. Yes, Mr Jackson.

MR JACKSON: Your Honours asked was there any evidence concerning who notified them. Your Honours will see it referred to in the public liability claim document at page 97, between lines 25 and 30. They were notified at 11.40. “Who notified you?” “From Service Station”. Your Honours will see then, a few pages further over, on page 100, about line 9:

We are advised that we received a call to fix a loose door, and our mechanic went to the Service Station where he tightened the door screws, and demonstrated to the manager that the door was working correctly – this is apparently on video . . . we previously fixed it.

That was the evidence, your Honours, that the ‑ ‑ ‑

GLEESON CJ: I had in the back of my mind there was some previous trouble with this door, was there not, or some previous trouble with this machine?

MR JACKSON: I think your Honour may have in mind what happened on this day. Your Honour, I have in the back of my own mind something that your Honour said, but I do know that the two were connected. Your Honours, that is the first thing. There is a piece of evidence about what the practice was at page 74 when Mr Duckworth was asked at about line 30:

Q. Was there a procedure for service men to identify themselves to customers when they attended prior to undertaking a job?
A. A contractor or an employee?

Then the next answer he dealt with both. He said:

A. Well, an employee would be wearing a Quirks’ shirt, a contractor would announce himself to whoever the proprietor was and say ‘I’m here to fix your Dairy Farmers’ or whoever’s fridge on behalf of Quirks Refrigeration.

GLEESON CJ: Mr Maconachie has probably got a Quirks’ shirt.

MR JACKSON: I would not be surprised, your Honour. It would add to a very large collection, I am sure; a large collection, it is suggested, in a number of ways. Could I just refer also, your Honours, to page 75, about line 18. In a passage that goes on from there, they did not only attend on request and records were kept of this in relation to particular machines. Then if I could go to page 76, your Honours, about line 40, there is a reference to the lease document and then at the bottom of that page:

Q. On some occasions you would use the Quirks servicemen and on other occasions contracted service men?

Your Honours will see then, if one goes to page 77, about line 12:

Q.       The proposition that I put to you is an accurate one, that in terms of maintenance [and] servicing you would make the decision on a periodic basis as to whether you would use the Quirks service men or a contracted service men?
A.       It would depend on work load was what would determine that.
Q.       So if the Quirks service men were able to handle the workload they would do it?
A.       Correct.
Q.       And if you were particularly busy you would bring in the contracted service men?
A.       Correct.
Your Honours, could I mention one matter. I was, if I may say so, scratching around this morning looking for a reference to some observations of your Honour the Chief Justice in Scott v Davis 204 CLR 333 about control. I was quite wrong. It was, in fact, Justice McHugh and the relevant passage is at page 358, paragraph 71.

GLEESON CJ: Thank you.

MR JACKSON: I refer your Honours to it without reading it out. What is demonstrated, correctly, in our submission, is that one is no longer speaking about detailed control or control of the detail.

KIRBY J: I thought there had been something since then – but it may be something I have written myself – about how, in the modern age with forms of employment being as they are and developing with hi-tech technology, the notion that the employer goes around, in fact, or even seeking to exercise control in the factory sense is really a bit unreal.

MR JACKSON: Yes. I am sorry, I cannot give your Honour a reference to that but I think your Honour may be right. Your Honours, can I come to Quarman v Burnett, 166 years old this year. It is said about it that it has stood for 166 years, my learned friend said on a number of occasions, and to implement CML would bring about a new world order, disturb commercial arrangements – although quite why and how seriously did not appear – it would bring insurance companies and, I suppose, reinsurers to their knees and so on.

Your Honours, what that leaves out of account is that when statements have been made in this Court about the nature of vicarious liability and what the test is in respect of vicarious liability they have been made in the language of Justice Dixon in CML and in language which refers specifically to a carve out of representational cases. I referred your Honours to a number of passages earlier. One was from Kondis, then Burnie Port Authority and NorthernSandblasting and the particular passage has been treated as a principal or a classical statement of the nature of vicarious liability. Always one sees in the passage quoted, in the main text of it and in the last sentence, the reference to the exception in the case of representational matters.

So, your Honours, it is not right, in our submission, to treat the proposition we are advancing as one which is either novel or heterodox. True it is that it might have greater application or more frequent application these days than in the past, and we have referred to that, I think, in paragraph 33 of our written submissions.

GLEESON CJ: I am just not quite sure why that is. I would have thought that the proposition for which you contend, if it is correct, would apply to ordinary subcontractors, and there is nothing new about them.

MR JACKSON: No, your Honour, I accept that but the number of occasions on which subcontractors rather than employees has increased, but that is the point I am trying to make, your Honour.

KIRBY J: What do you say about the suggestion that there is a distinction in what Justice Dixon wrote about being a representative in the general sense and making a representation?

MR JACKSON: Yes, that is what I am about to come to now, your Honour, and that is, I think, a kind of elision to which Justice Hayne referred. Your Honours, I need to go, in dealing with that, to the case itself. May I do that?

Could I go to CML 46 CLR 41 at 48. One sees at about point 6 on the page that what is being spoken about is not just representational statements. What is spoken about is:

In most cases in which a tort is committed in the course of the performance of work for the benefit of another person . . . has not directly authorized the doing of the act which amounts to a tort.

If I could just pause there, your Honours, the statement does not appear to be limited as to the type of tort and, in particular, does not appear to be limited to the kinds of tort in which something that is said is an element or forms part of the factual basis for it. If one looks through the references in that paragraph, which is the statement of the principal test, as it were, looks through to the use of the words “by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance”, “representative” is there used, in our submission, as meaning something done by a representative standing in his place. One sees the use of the words “and, therefore”. Also it does not turn on representation made by the representative but turns on the person being a representative. In the last four lines of page 48 to the first word on page 49, what is spoken of is:

the very service to be performed consists in standing in his place and assuming to act in his right and not in an independent capacity.

Your Honours, if one notes also at page 49 the reference to Dr Baty, if one notes the reference to the author or that name, one sees that in the quotation from his observations one sees a reference to “commit wrongs or to be negligent”. So it is covering a wide range of torts. When one comes to page 50, about point 4, to the expression “involve no representation” at the end of the first paragraph, what your Honours will see is that Justice Dixon, in our submission, is referring to representation in the sense used earlier. That is a person standing in the shoes of another. Your Honours, one sees that he says that and there is nothing to really change the meaning of the term.

The fact, of course, that the particular case involves statements made by a representative does not mean that he is speaking of representation in relation to those statements as distinct from the sense in which he has used it throughout the earlier part of that discussion, because then one sees, your Honours, if one goes to the next paragraph, the application of that notion to the particular facts and one sees even in the second line of that paragraph “the ‘agent’ represented the Company in soliciting proposals”. So, your Honours, one speaks of representation being used in the sense referred to earlier.

GLEESON CJ: Mr Jackson, if a vendor of real estate employs a real estate agent to sell the vendor’s house and the real estate agent makes representations negligently on the faith of which somebody acts and suffers damage, what are the principles that determine whether the vendor is liable for the damages?

MR JACKSON: Well, leaving aside any question of trade practices or equivalent legislation, your Honour, the situation would be that one would look to see, I suppose, two things. One would be, assuming there would be no specific authorisation – one leaves that aside – it then would become a question of identifying what is the authority that ordinarily would be the authority of a person in that position.

GLEESON CJ: What is the difference between that and the CML Case?

MR JACKSON: Well, probably none, your Honour, probably none relevantly.

GLEESON CJ: If you look at the top of page 49, the agent had authority to obtain proposals for insurance contracts and the agent was engaged as an advocate to advocate the making of proposals to the insurance company. The liability of the insurance company in those circumstances, like the liability of the vendor in the example that I gave you, is based on orthodox principles which turn upon the nature of the agency, is it not?

MR JACKSON: Well, yes, they do, your Honour, and to say they turn on the nature of the agency really is perhaps a very brief way ‑ ‑ ‑

GLEESON CJ: Well, it is what Sir Owen Dixon called true agency.

MR JACKSON: Yes, your Honour is right. I was going to say two things in response to that. The first is that what your Honour put to me is perhaps no more than an abbreviated way of saying what Justice Dixon said in the passages to which I have referred, but also if one looks at what was said by Chief Justice Gavan Duffy and Justice Starke at the bottom of page 46, they seem to be saying exactly that.

So that, your Honours, that is why it is not, if I can use the expression again, novel or heterodox to say that if you get someone to go along and do something for you and you authorise them to do it and they go to do it for you, or they go as you in doing it, that you are liable for any negligence in carrying out that that causes damage to other people – of foreseeable damage, of course. Could I invite your Honours in that regard to go back, for the last time to the Colonial Mutual Case and to Justice Dixon in the second‑last paragraph on page 50, the one commencing “I do not think”. Your Honours will see the reference to the position of strangers and the injury being done to one person rather than another and speaking in the context of breaches of duty.

The last matter I wanted to deal with was a question your Honour the Chief Justice raised about building sites. In the case of building sites there will be, of course, cases where the head contractor is liable for conduct of the negligent subcontractor. That will normally arise by reason of the existence of a duty similar to that of an employer to provide and maintain a safe system of co‑ordinated work, to put it shortly, referred to in both Kondis and Stevens v Brodribb, but there will not be many cases where the independent contractor on the building site will, if I could use the words of CML, be regarded, as Justice Dixon said at page 48, as acting as a representative. The subcontractor will be, on his own behalf, doing his own task, not acting as a representative of the contractor dealing with other people.

Ordinarily speaking, of course, in those cases, you would have a situation where you have for the principal, the head contractor. It may be an architect, it may be some person interposed, but the dealings would be between the principal and the contractor and the subcontractor is acting on his own behalf to the head contractor. It may be a distinction that is finely drawn in some cases but that is the essence of the distinction that is drawn.

Your Honours, there are a couple of matters, I think, in relation to which we said we would endeavour to put something in. May we have seven days to do that?

GLEESON CJ: Thank you, Mr Jackson. We will reserve our decision in this matter and we will adjourn until Tuesday, 7 March at 10.15 am.

AT 2.45 PM THE MATTER WAS ADJOURNED

[2006] HCATrans 78

Key Legal Topics

Areas of Law

Civil Procedure

Negligence & Tort

Legal Concepts

Appeal

Causation

Damages

Duty of Care

Negligence

Reliance