HOLLIS v VABU PTY LTD (T/A CRISIS COURIERS)
Judges: Gleeson CJGaudron J
McHugh J
Gummow J
Kirby J
Hayne J
Callinan J
Court:
Full High Court
MEDIA NEUTRAL CITATION:
[2001] HCA 44
Callinan J
104. The respondent, Vabu Pty Ltd, conducted a business of delivering and collecting parcels and documents in Sydney, as ``Crisis Couriers''. Some of the deliveries and collections were made by couriers on bicycles. The respondent regarded these couriers as independent contractors for whose negligence it was not liable. When they began their work the couriers were handed three documents, one of which was referable, in part at least, to couriers on bicycles and contained the following paragraphs:
``THESE POINTS ARE TO BE ADHERED TO AND UNDERSTOOD .
1. DRIVERS TERMINATING CONTRACTS OF CARRIAGE WILL HAVE THEIR LAST WEEKS PAY HELD AGAINST ANY OVERCHARGES OR UNPAID CASH JOBS ETC FOR SIX (6) WEEKS FROM THE FIRST FRIDAY AFTER PAY WEEK ENDS.
2. THIS COMPANY DOES NOT PAY HOSPITAL BILLS FOR ANY COURIER INVOLVED IN AN ACCIDENT. ANY DRIVER OR RIDER WHO SUSTAINS AN INJURY SHOULD REPORT IN WRITING TO THE MANAGER ALL DETAILS REGARDING THE ACCIDENT AND ANY INJURIES SUSTAINED AS A RESULT.
3. A uniform with the company's logos attached must be worn at all times whilst working for this company.
4. Signs (at least 2) are to be worn on your vehicle at all times whilst working for this company. They are not to be altered .
5. Drivers must be neat and tidy at all times. Scruffy hair and dirty and ripped apparel will not be tolerated. It is your responsibility when leaving the company to return all clothing washed or dry cleaned.
6. Loss or damage to goods in transit is the responsibility of the sub- contractor.
7. Marine and public liability insurance is $7.65 per week. Please note that any claim is subject to $1000 excess.
8. All equipment and uniforms issued by the company shall remain its property and shall be returned in full on termination of driver's last contract of carriage. Any losses or damage to equipment will be at the driver's cost.
9. Swearing or foul language on the radio will not be tolerated.
10. Push bikers are required to wear helmets whilst working.
11. Your vehicle should be clean and roadworthy. This company will in future request drivers to update their vehicle if it considers that vehicle not to be in a presentable state for our clients.''
105. Training provided by the respondent to couriers was rudimentary and consisted of supervision over one to two days by an experienced courier. Couriers, after engagement by the respondent, worked generally in accordance with the arrangements set out in the document I have quoted. In addition to a uniform the respondent supplied each courier with a two-way radio. Couriers provided and maintained their own bicycles and other articles necessary for their work, such as directories, ropes, blankets and tarpaulins.
[144]
ATC 4531
106. The respondent effected insurance, the premium for which was funded by deductions from the couriers' remuneration, against liability to pay compensation for personal injury or property damage caused by an occurrence in connexion with the respondent's business. By an extension of the policy in force at the material time the definition of the insured was expanded to include ``sub- contractors in respect of work done on behalf of Crisis Couriers''. There were no contracts between couriers and the people to whom and from whom they delivered and collected parcels and documents.
107. On 22 December 1994 the appellant was struck while walking on a footpath at Ultimo in Sydney by a courier on a bicycle wearing the livery of Crisis Couriers. In riding a bicycle on the footpath the courier infringed s 11(1)(b) of the General Traffic Regulations (NSW) which were then in force. The appellant suffered personal injuries. The identity of the courier could not be established. The appellant brought proceedings against the respondent in negligence (and upon other bases) in the District Court of New South Wales. The appellant's action was tried by Wright ADCJ. The appellant contended that the respondent was liable for the cyclist's negligence on one of three bases: that the cyclist was the respondent's servant or agent; that at common law the respondent was estopped from denying liability for its cyclist courier's negligence; and that the respondent was in breach of ss 52 and 55A of the Trade Practices Act 1974 (Cth) by misrepresenting to the public that its courier service carried insurance of utility to injured members of the public. Well before the conclusion of the trial but after the appellant had closed his case he indicated that he would seek to join the respondent's insurer as a party. In foreshadowing that course, counsel for the appellant made this submission:
``I've just been talking to my friend and just raising with him a couple of the issues that are concerning me at the moment about this hearing. It would seem very straight forward. The relationship for the moment as my understanding of the case is that the courier and the company are not an employer/employee relationship . They may or may not be principal and agent. If they're principal and agent then it would seem the plaintiff must succeed. If they are not principal and agent it would seem the plaintiff would fail. There is another possibility which has occurred to me this morning and that is - actually prior to this talking with Mr Lidden and that is that the insurer itself ought [ to] be brought in as a defendant. If that is right that the insurer ought to be defendant. The question would be ought the insurer be brought in now before the matter goes any further or whether the matter ought to finish and can the insurer then be sued after that. And that's the position I'm in at the moment your Honour. It's a late time to consider it I appreciate that but best considered late than never I would think.''
(emphasis added)
108. His Honour found against the appellant, and in view of the submission that I have quoted, not surprisingly held that the courier was not an employee of the respondent or its agent, on the basis, essentially, that he was bound to do so, because, relevantly, on very similar facts the Court of Appeal of New South Wales in litigation between the respondent and the Federal Commissioner of Taxation
[145]
109. The appellant's appeal to the Court of Appeal (Sheller and Giles JJA, Davies AJA dissenting) was dismissed.
[146]
``There was not and could not be any finding that Vabu directly authorised the offending courier to drive his bicycle in an illegal or negligent manner. The trial Judge said that in his view there was no basis to find that Vabu had expressly or impliedly authorised the commission by the courier who collided with Mr Hollis of his tortious act or acts in that regard. His Honour did find that there was a requirement on the
ATC 4532
couriers as part of their contractual terms of engagement with Vabu to do their work under conditions of urgency, which would require speedy riding as required from time to time, and that the couriers were under pressure to work to deadlines or within time constraints required by Vabu. But the case is not one of the class exemplified by Brennan J in Kondis [148]when his Honour said: Kondis v State Transport Authority at 68,107; (1984) Aust Torts Reports ¶ 80-311 at 692. (1984) 154 CLR 672 `If I prevail upon the driver of a taxi to drive dangerously, I cannot escape liability for the consequences by pointing to the general employment of the driver by the owner of the taxi.'
In the present case Vabu can point to the fact that the courier owned the bicycle and used it as an independent contractor.
In my opinion, while no doubt the couriers were agents of Vabu at least to perform the business of fast delivery by bicycle of parcels and documents in the inner city area, Vabu was not vicariously responsible for a tort occasioned by the performance of that function which Vabu had not directly authorised.''
110. Sheller JA then dealt with the submission that the respondent owed a non- delegable duty of care to the appellant:
[149]
``Vabu engaged the couriers as independent contractors to carry by bicycle, parcels and documents on its behalf and in fulfilment of engagements it had with third parties. As I have said there is nothing inherently dangerous to other users of public streets in such an activity. If anything the activity is less inherently dangerous to other street users than using motor vehicles or motor bicycles to carry parcels and documents. In either case the activity carries no inherent risk of injury unless it is negligently performed. [150]
The fact that Vabu conducts such a business gives rise to no general duty of care to other street users and creates no special relationship between Vabu and such users. Northern Sandblasting Pty Ltd v Harris at 64,251-64,252; (1997) Aust Torts Reports ¶ 81-435 at 333. (1996-1997) 188 CLR 313 To the extent to which parcels and documents are carried on a particular vehicle or a particular bicycle, the driver or rider owes the ordinary duty of care to other users of public streets. If that driver or rider is an employee of Vabu, Vabu is vicariously responsible for any breach by the driver or rider of that duty. If the driver or rider is an independent contractor, the application of the principles enunciated by Dixon J in Colonial Mutual Life Assurance Society Limited v Producers and Citizens Co- operative Assurance Co of Australia Limited [151]
means that Vabu is not vicariously liable for such a breach. On no basis, in my opinion, on the facts of this case, can there be set up some general duty of care owed by Vabu to other users of public streets derived from the way in which the parcels and documents are carried. Even less can such duty be elevated to one described as a non-delegable duty.'' at 48. (1931) 46 CLR 41
111. In reaching a different conclusion Davies AJA was impressed by a transcript of proceedings before a Parliamentary Joint Standing Committee upon road safety which took evidence about collisions between courier cyclists and others, and which found its way into evidence in this case.
[152]
The appeal to this Court
112. The appellant appeals to this Court on the following grounds:
- That the Court of Appeal was in error:
- (a) When it found that the respondent was not vicariously liable for torts committed during the course of work being performed at its request, and on its behalf by bicycle couriers retained by it.
- (b) When it failed to find that within the neighbourhood of the respondent's delivery area, it owed a duty of care to pedestrians, because of the inherent risk of injury to them created by its system of
ATC 4533
work, including its system of remunerating couriers retained by it. - (c) When it failed to find that the respondent owed a general duty of care to pedestrians lawfully using footpaths and roads within the respondent's delivery area.
- (d) When it failed to find that the respondent was subject to a duty to devise a system of work which would ensure that the bicycle couriers whom it employed to deliver and pick up articles would do so safely.
113. The appellant also seeks to argue that notwithstanding the concurrent findings of fact at first instance, and by the majority in the Court of Appeal on the basis of his concession there,
[154]
114. In substance, what the appellant sought was to create a new category of vicarious liability of which the predominant characteristic would be the financial imbalance between the contracting parties for the services provided. In argument, he placed heavy reliance on the disparity in bargaining power between the respondent and its couriers, and other assumed economic relationships and consequences. The appellant contended that to treat the relationship between the courier and the respondent as an arm's length relationship between independent contractors was to elevate form above substance. One submission was put in these terms:
``The economic advantages accruing to an employer by avoiding statutory provisions governing employment, (such as Long Service Leave, and Superannuation etc) and the Federal Government's push for individualised, rather than industry wide awards, will lead to increasing variation in the terms and conditions under which persons are engaged. But the classification of an agreement as one creating a relationship of employment, or of independent contract, whilst highly relevant, should not be the sole determinant of the issue of whether a vicarious duty of care is owed by one party to the agreement in respect of the tortious conduct of the other.''
The principal submission of the appellant focussed upon the extent of the respondent's control over its couriers but still referred to matters of economics:
``Where, as in this case, the form of the agreement is dictated by one party, and the economic power of one party so preponderates that it can dictate the financial provisions of the agreement, and the subservient party is wholly engaged in the business of the dominant party, performing tasks of a type normally performed by a servant, and there is no evidence that the subservient party was, at the relevant time, in fact carrying on any truly independent business, or had any real opportunity to do so, and where the subservient party is required by the dominant party to wear its uniform, so that the dominant party is effectively holding the subservient party out to the world as its servant, the relationship is really one of servitude, and where, in the course of carrying out a task for the dominant party, the subservient party commits a tort, and his tortious conduct can be regarded as an improper mode of carrying out an authorised act, vicarious liability should be imposed on the dominant party, however the contractual relationship between the parties may be categorised.''
ATC 4534
115. It was also submitted by the appellant that the imposition of liability upon the respondent would provide an efficient means of passing on losses to insurers, and the fixing of higher prices for goods and services by the ``respondent's enterprise'', a legal personality better able to assess the risks, and pay the insurance necessary to cover them.
116. This last submission reflects assumptions about the equitable distribution of losses and economic efficiencies often made by authors of textbooks, and, on occasion, judges, and others, of the kind discussed in
Scott v Davis
[156]
117. There are further difficulties about these sorts of assumptions. They are only assumptions. They may, I suspect, have been made without access to all of the relevant information, and not always after rigorous scrutiny by people adequately qualified to process and evaluate that information. Take this case. No doubt there are attractions in imposing an effectively unqualified liability upon the respondent for its courier's negligence. The respondent can, indeed has, insured against it. An injured plaintiff would have recourse, indirectly at least, to the insurer if he could sheet home liability to the respondent. And, as the appellant submits, the respondent may be able to pass on the cost of any increased premiums to its customers. The theory is that the insurer and the respondent would then have a financial incentive to ensure that any couriers are properly trained and safety standards rigidly enforced. I say ``theory'' because there is no material before the Court, and I suspect, detailed and reliable material available anyway, to demonstrate a sufficient correlation between increases in insurance premiums and improvements in safety regimes in the somewhat unusual sorts of circumstances with which this case is concerned. In this case the respondent was relevantly insured, albeit at the expense of the couriers. It may therefore be an equally valid assumption that couriers have an incentive themselves to be careful, and that in any event their remuneration is fixed at a sum sufficient to enable them to meet the cost of the premiums paid on their behalf by the respondent. One likely consequence, as Davies AJA in the Court of Appeal suggested of different arrangements, might be slower and fewer deliveries by couriers for the same daily remuneration. Who is to say, however, whether the same remuneration could then be paid? And there may be other consequences of economic significance. It might be to the overall economic advantage of the community that couriers operate as independent contractors efficiently, quickly and competitively, that they continue to provide a service that in the past large, centralised organisations were unable or unwilling to provide, or provided less efficiently. It might also be in the interests of the community, the respondent, its customers and the couriers that the last have a direct financial incentive to deliver articles quickly under the present arrangements. The imposition of liability upon the respondent for their courier's negligence and the changes which that might bring to the relationship between them might lead to the creation, in both form and substance, of a relationship of employer and employee, a relationship that neither may want. It should not be too readily assumed that all, or indeed most, couriers would wish for it. The provider of a bicycle and his or her services may wish to retain his or her freedom to work or not to work and a measure of independence just as keenly as a computer programmer whose resources are a computer, learning, experience and skills. The modesty of the means of doing the work, a bicycle and other minor equipment, and the relatively unskilled capacity to ride it are not to be denigrated on those accounts. Opportunities to do remunerative and useful work for unskilled people may shrink as the cost of directly employing people increases. To impose upon the respondent and couriers the rigidities of a contract of service might perhaps be to destroy an avenue of work for people who might find it difficult to gain remunerative employment otherwise. How to strike the right balance, where the public interest truly lies, what is the most efficient way of dealing with the rights and obligations of the parties, and to what extent economic efficiency should influence legal principles are not questions which I can, or, in my opinion, the Court, should seek to answer here.
118. One thing is clear, however. Although Parliament has looked at some of the matters upon which the appellant relies,
[158]
ATC 4535
compensation, it has not chosen to intervene by legislation to create a liability of the kind for which the appellant contends. The questions that I have posed are ones for Parliament rather than the courts. In short, in my respectful opinion, the existence of the Parliamentary committee and its inquiries upon which Davies AJA relied for his conclusions, provide reason for judicial restraint rather than intervention by the courts.119. The appellant's submission puts heavy emphasis upon the disparity in bargaining power between the respondent and its couriers. Indeed, the submission suggests that it should be a decisive factor, and is indicative of both a capacity and actuality of control by the financially stronger party over the other. But disparity in this respect cannot of itself provide reason to hold the former liable for the negligence of the latter in carrying out a contract for services. Otherwise, the courts might be required, as a matter of course, to assess the respective wealths of contracting parties, in the course of and as an aid to, deciding upon whom liability should be imposed. Where then would the line be drawn: would it follow that a listed corporation with a large market capitalisation should be held liable for the negligence of a small private company with which it has contracted for services because, taken with other matters, the former happens to be much richer than the latter and insists upon very strict contractual arrangements for performance and quality control between it and its contractors?
120. The remaining question is whether there is any basis within any of the established categories of non-delegable duties for holding that the respondent should be responsible for the courier's negligence.
121. The appellant contended that the respondent was engaged in an activity that was hazardous to pedestrians. Sheller JA in the Court of Appeal said that this was to distort the nature of the respondent's business: that the hazard to pedestrians, of which the unfortunate appellant's accident was an example, derived not from the nature of the respondent's business but from the manner in which the courier chose to perform the contract with the respondent, by riding his bicycle illegally on the footpath. To the extent that what the courier did was unlawful, it was not an unlawful act that the respondent employed him to do.
[159]
``But there is no general rule that if a person employs an independent contractor to do an inherently lawful act, he incurs liability for injury to others occasioned by the methods incidentally employed by the contractor in the course of its performance (these not being methods necessarily involved in the doing of the act and necessarily injurious), by reason only of the fact that the act is `dangerous', `hazardous', or `extra hazardous'.''
122. The statement of Jordan CJ was approved by this Court in
Stevens v Brodribb Sawmilling Co Pty Limited
.
[161]
123. Furthermore, as Sheller JA pointed out, the conduct of the respondent's business gave rise to no general duty of care to pedestrians and created no relationship of a special kind between the appellant and the respondent.
Orders
124. I would dismiss the appeal with costs.
ORDER
1. Appeal allowed with costs.
2. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales of 5 November 1999. In place thereof order that the appeal to that Court be allowed with costs, the verdict and orders of the District Court of New South Wales be set aside and that judgment be entered for the appellant in the sum of $176,313.00 with costs.
Footnotes
[144][145]
[146]
[147]
[148]
[149]
[150]
[151]
[152]
[153]
[154]
[155]
[156]
[157]
[158]
[159]
[160]
[161]
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