HOLLIS v VABU PTY LTD (T/A CRISIS COURIERS)

Judges:
Gleeson CJ
Gaudron J
McHugh J
Gummow J
Kirby J
Hayne J
Callinan J

Court:
Full High Court

MEDIA NEUTRAL CITATION: [2001] HCA 44

Judgment date: 9 August 2001

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Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ

This appeal involves issues respecting the nature of the relationship of employment and the scope of the doctrine of vicarious liability. The appellant, Mr Hollis, appeals against the decision of the New South Wales Court of Appeal (Sheller and Giles JJA; Davies AJA dissenting). ^[1] Hollis v Vabu Pty Ltd (t/a Crisis Couriers) (1999) Aust Torts Reports ¶ 81-535 . That Court dismissed his appeal from the decision at trial in the District Court (Wright ADCJ) returning a verdict for the defendant, the present respondent (``Vabu''), in the action by Mr Hollis for damages for personal injury.

The facts

2. Vabu at all material times conducted in the Sydney area and under the business name ``Crisis Couriers'' a business of delivering parcels and documents. In December 1994, it had about 25 to 30 persons as bicycle couriers, and a number of others as motorcycle and motor vehicle couriers. Mr Hollis was a courier, but not a bicycle courier, with a firm styled ``Team Couriers''. On 22 December 1994, Mr

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Hollis was leaving a building in Ultimo where he had attended to pick up a parcel. He had taken two steps on the footpath when he was struck by a cyclist and knocked to the ground. The cyclist went over the handlebars and landed in front of Mr Hollis. The cyclist stood up, said ``Sorry mate'' and left the scene pushing his bicycle; he ignored Mr Hollis' calls. The cyclist remains unidentified. However, he was wearing a green jacket, on the front and back of which, in gold lettering, there appeared the words ``Crisis Couriers''. Mr Hollis suffered personal injury in the accident, principally to his knee. This required surgery, caused a period of unfitness for work and has resulted in a 25 per cent permanent deficit in the knee.

The decision at first instance

3. The trial judge found that the cyclist was a bicycle courier employed by Vabu; that he was on Vabu's business at the time of the accident; and that he was wearing a uniform issued to him by Vabu but had no other obvious means of personal identification on him. His Honour also made the further important findings that Vabu had known for some time prior to the accident that a significant number of couriers disobeyed traffic rules and posed a danger to pedestrians; that means of personal identification for each courier were available; and that Vabu at various times had been party to schemes which involved to some extent effective means of personal identification but that these fell into disuse partly by reason of Vabu's failure to compel its riders to adopt such means. He held that the accident was caused by the bicycle courier's negligent - and illegal ^[2] Section 11(1)(b) of the General Traffic Regulations (NSW) provided that ``the rider of a ... bicycle ... shall not ... ride the ... bicycle upon any such footpath unless the ... bicycle is ridden directly across the footpath, as slowly as practicable, to or from a gateway or entrance and adequate precautions are taken to avoid collision with any person or thing upon the footpath or upon any portion of any public street adjacent to the footpath''. Nothing for present purposes turns on the illegality. - riding and that no defence of contributory negligence was made out. His Honour assessed the quantum of Mr Hollis' damages at $176,313.

4. The trial judge found that Vabu set the rates of remuneration of its bicycle couriers and that there was no scope for negotiation of those rates between the parties and that Vabu allocated the work, with no scope for bidding for individual jobs by the riders. The evidence was that work was allocated to the couriers by a radio operator at Vabu's base who was known as the fleet controller. Couriers would call in each morning with their call signs and indicate readiness for work. The fleet controller would allocate jobs for the couriers. In doing so, the fleet controller would take into account various matters including the time at which couriers had first called in on that day and their location.

5. His Honour also made findings that Vabu assumed all responsibility as to the direction, training (if any), discipline and attire of its bicycle couriers; that Vabu provided its bicycle couriers with numerous items of equipment, which remained Vabu's property and which included the only means of communication between Vabu and its bicycle couriers; that the bicycle couriers were required to wear Vabu's livery at all times, partly due to Vabu's desire to advertise its services; and that requirements such as insurance and deductions from pay therefor were imposed by Vabu on the bicycle couriers without opportunity for negotiation.

6. The trial judge observed that the ``bicycle couriers were pretty much in a `take it or leave it' situation and this is highlighted and exemplified by the fact that the rates for the courier jobs had not been altered for some years''. He also found that provisions for an insurance excess of $500 to $1,000 which bicycle couriers were required to pay provided a substantial disincentive for them to report accidents.

7. However, notwithstanding these findings, the trial judge entered a verdict for Vabu. Mr Hollis had put his case on three grounds. The first was that Vabu was vicariously liable for the negligence of its bicycle couriers as servants or agents. The trial judge held that this failed because ``the bicycle couriers who worked for [ Vabu] were not its servants or agents'' but were independent contractors, with the result that Vabu was not liable for their negligent acts. His Honour also considered that, although a courier might in some circumstances be considered the ``agent'' of Vabu, there was ``sufficient'' evidence to show that the bicycle courier was not ``the employee or agent of'' Vabu.

8. The trial judge considered that he was constrained by the decision of the New South Wales Court of Appeal (Meagher, Sheller and Beazley JJA) in Vabu Pty Limited v FC of T ^[3] 96 ATC 4898 ; (1996) 33 ATR 537 . (``the taxation decision'') to conclude that the bicycle couriers were independent contractors and not the employees of Vabu. His Honour considered that the same conclusion was open on the evidence in this case, which was substantially similar to that earlier decided by the Court of Appeal in the taxation decision. That evidence included findings of fact that the bicycle couriers were required to provide their own bicycles and that two-thirds to three-

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quarters of them would have owned more than one bicycle; that the bicycle couriers had to bear the expense of providing and maintaining those vehicles; and that the bicycle couriers were required to provide their own equipment, other than a radio and uniforms.

9. The second ground asserted by Mr Hollis was a ``common law estoppel'' that Vabu had warranted to its couriers and to the public that it had effected policies of public liability insurance in respect of members of the public injured by its bicycle couriers. The trial judge found that Mr Hollis had not proved that Vabu had warranted to members of the public that bicycle couriers were covered in respect of public liability insurance as alleged.

10. The third ground was that Vabu had contravened s 52 of the Trade Practices Act 1974 (Cth) (``the Trade Practices Act'') in representing to members of the public that they were protected by public liability insurance in respect of injuries caused by the negligence of Vabu's bicycle couriers. Mr Hollis also pleaded a breach of s 55A of that statute on the footing that Vabu had misled the public that the nature of Vabu's business was a courier service insured in respect of injury to members of the public. The trial judge also rejected this claim on the basis that Vabu had made no representation or warranty to the public.

11. The points in the second and third grounds respecting the existence of insurance policies seem to have reflected the failure of an application by Mr Hollis to join CIC Insurance Ltd (``CIC'') as a defendant to the proceedings pursuant to s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). That section was considered in Bailey v New South Wales Medical Defence Union Ltd . ^[4] (1995) 13 ACLC 1698 ; (1995) 184 CLR 399 . It relevantly provides:

``(1) If any person (hereinafter... referred to as the insured) has... entered into a contract of insurance by which the person is indemnified against liability to pay any damages or compensation, the amount of the person's liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability.''

12. This application was opposed by Vabu and was dismissed by the trial judge on the ground that Mr Hollis had failed to adduce evidence that the bicycle courier in question had ``entered into a contract of insurance''.

The taxation decision

13. Given the importance attached to it in the present litigation, it is appropriate here to say something further respecting the taxation decision. That litigation concerned the issue whether Vabu was an ``employer'' in respect of all of its couriers, within the meaning of the Superannuation Guarantee (Administration) Act 1992 (Cth) (``the Superannuation Act''). Section 12(1) of the Superannuation Act states that, `` [ s]ubject to this section, in this Act, `employee' and `employer' have their ordinary meaning'' but that sub-ss (2)-(11) ``(a) expand the meaning of those terms; and (b) make particular provision to avoid doubt as to the status of certain persons''. In particular, s 12(3) states:

``If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.''

14. The Superannuation Act required an employer to provide a prescribed minimum level of superannuation to all employees. If the employer failed to make such a contribution, or the contribution was below the prescribed level, the shortfall was collected by way of a charge levied on the employer. The Superannuation Act required an employer who had such a shortfall for any given year to lodge a superannuation guarantee statement in respect of that year. Thus, the characterisation of Vabu as employer had the consequence of exposing it to liability for the specified payments prescribed in the legislation.

15. It appears that the taxation proceedings were initiated as a result of a determination made under the auspices of the Industrial Arbitration Act 1940 (NSW) to the effect that Vabu was an employer in respect of all of its couriers. In the Supreme Court (Ireland J), ^[5] 95 ATC 4218 ; (1995) 30 ATR 303 . Vabu sought a declaration that it was not an employer within the meaning of the Superannuation Act and therefore was not obliged to lodge a superannuation guarantee statement for the year in question. Ireland J declined to grant this relief because he decided that at common law the relationship between

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Vabu and all of its couriers was properly to be characterised as one of employment.

16. It is important to note that the couriers retained by Vabu and whose classification was at stake in the taxation decision included those who might be termed motor vehicle and motorcycle couriers as well as bicycle couriers. Before Ireland J, evidence was adduced from three couriers as to the method and manner in which they operated as couriers for Vabu. In each case the witnesses had purchased their own transportation, being light commercial or alternatively domestic-type motor vehicles. No evidence was led from any of the bicycle couriers. However, Ireland J appears to have reached a decision applicable indifferently to all the couriers.

17. The evidence before Ireland J included three documents entitled ``Crisis Couriers Work Conditions'', ``General Rules for All Drivers (Document 590)'' and ``General Rules for All Drivers (Document 792)'', which employed terms such as ``whilst working for this company'' and ``termination of employment''. Documents with the same titles are in evidence in this case and we will return to consider their significance.

18. Ireland J noted of the evidence as to work practices that: ^[6] 95 ATC 4218 at 4221; (1995) 30 ATR 303 at 305-306.

`` [ w]hile this is not an exhaustive list it does cumulatively lend weight to the proposition that it is not just the act of delivery but also the way in which the delivery is executed which is specified by the company. The company provides sales people who are responsible for finding customers and so the sole responsibility of the operative is delivery, a factor reflected in the payment regime which operates on the basis of an initial flagfall rate plus a rate per kilometre, variable according to the weight of the package.''

Significantly, Ireland J referred to the importance of work practices, saying: ^[7] 95 ATC 4218 at 4223; (1995) 30 ATR 303 at 308.

``... it is a system of work which [ Vabu] is providing. In the present case it is [ Vabu] which presents its image through uniforms and signage and then imposes its work practices. It is the extent to which those work practices are imposed by the company upon the daily routine of the couriers that is in part determinative of an employer/ employee relationship. It is distinguished... from the company providing a system and then permitting a fully discretionary use of that system by the courier.''

He continued by referring to the general rules in the application document and concluded that: ^[8] 95 ATC 4218 at 4224; (1995) 30 ATR 303 at 310.

``... the minutia of detail therein is indicative of something more than an independent contractor. While many of the rules are statements of common sense (such as carrying radios in a plastic bag while it is raining) others cross this line into the realm of control.''

What the rules demonstrated was the reach of Vabu, with: ^[9] 95 ATC 4218 at 4225; (1995) 30 ATR 303 at 310.

``... a significant degree of constraint on the discretion and flexibility of the courier by the company in undertaking his/her task. In particular, the notion of flexibility, which forms a significant part of the underlying rationale of the relationship of principal and independent contractor, cannot be said to feature with any prominence in the relationship presently under consideration.''

Ireland J concluded that there was a common law relationship of employment between Vabu and all of its couriers.

19. The Court of Appeal allowed Vabu's appeal. Meagher JA observed that the decision of this Court in Stevens v Brodribb Sawmilling Co Pty Ltd ^[10] (1986) Aust Torts Reports ¶ 80-000 ; (1985-1986) 160 CLR 16 . meant that `` [ t]he old test of `control' is now superseded by something more flexible''. <sup>[11]</sup> 96 ATC 4898 at 4900; (1996) 33 ATR 537 at 538. His Honour accepted that the cumulative effect of the conditions of work ``certainly gives [ Vabu] a deal of control over its courier'' but said that ``a person may supervise others without becoming their employer'' and that several considerations supported the conclusion that the couriers were not employees. <sup>[12]</sup> 96 ATC 4898 at 4900; (1996) 33 ATR 537 at 538. One consideration was that the couriers supplied their own vehicles and had to bear the expense of providing for and maintaining those vehicles, making payments for repairs and insurance, which were ``very considerable''. Other considerations were the couriers had to provide themselves with their own street directories, telephone books, ropes, blankets and tarpaulins; and that the couriers received no wage or salary. Meagher JA continued: ^[13] 96 ATC 4898 at 4900; (1996) 33 ATR 537 at 539.

``... Normally, if they were true employees, one would expect a certain sum to be paid each day, week or month. The company's

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documents provide for no such thing. They are paid a prescribed rate for the number of successful deliveries they make. It is not, I think, fanciful to say that each courier conducts his own operation, permitting himself for his own economic advantage to be supervised by the company. If this were not so, why would the documents anticipate that the courier may use a business name or corporate name if he so wishes? A company does not usually have employee corporations.''

He concluded that, `` [ a]lthough this part of the case is hardly without difficulty'', the couriers would be classified at common law as independent contractors. ^[14] 96 ATC 4898 at 4900; (1996) 33 ATR 537 at 539.

20. Sheller JA agreed that the matters referred to by Meagher JA indicated that ``there was not between [ Vabu] and the couriers it engaged a common law relationship of employer and employee''. <sup>[15]</sup> 96 ATC 4898 at 4903; (1996) 33 ATR 537 at 542. His Honour also concluded that the relationship between the couriers and Vabu did not answer the description in s 12(3) of the Superannuation Act of one ``wholly or principally for the labour of'' a person. Beazley JA agreed with both judgments. Of course, no issue respecting s 12(3) arises in the litigation instituted by Mr Hollis out of which this appeal arises.

21. In the Court of Appeal in the present case, Sheller JA noted that the parties accepted that the way in which the bicycle couriers carried out their work was as described by the Court of Appeal in the taxation decision. ^[16] (1999) Aust Torts Reports ¶ 81-535 at 66,563. His Honour also recorded a concession by Mr Hollis that, in light of the taxation decision, ``the [ bicycle] couriers were not employees of Vabu but independent contractors''. ^[17] (1999) Aust Torts Reports ¶ 81-535 at 66,566. In the present case, both the trial judge and Sheller JA therefore proceeded on the footing that, by virtue of the taxation decision, the bicycle couriers were independent contractors.

22. It is significant to note that one of the considerations mentioned by Meagher JA in the taxation decision as indicating that the couriers were independent contractors was that they bore the ``very considerable'' expense of providing, maintaining and insuring their own vehicles. It is apparent that Meagher JA was there concerned with expense in relation to motor vehicles and motorcycles. The purchase and maintenance of a bicycle could hardly be termed a ``very considerable'' expense. It may be that, in the taxation decision, a case that was, as his Honour put it, ``hardly without difficulty'', a different result might properly have been reached respecting Vabu's bicycle couriers from that which obtained respecting its other couriers. However, it is unnecessary to express any conclusion on this matter. It is sufficient to say that this case concerns liability arising from the activity of a bicycle courier, not a motor vehicle or motorbike courier. For the reasons that follow, the relationship between Vabu and its bicycle couriers in the present case is properly to be characterised as one of employment.

The evidence in the present litigation

23. In the present case, the trial judge appears to have felt constrained by the result in the taxation decision to characterise the relationship between the bicycle couriers and Vabu as one of principal and independent contractor and, as a result, dealt somewhat imprecisely with the terms of those contracts. However, the trial judge accepted evidence of Vabu's fleet administrator that couriers starting work with Vabu were given a modicum of instruction and filled out ``employment forms''. These seemed to have consisted of a three page document. The first page, on a Crisis Couriers letterhead, was headed ``CONTRACT FOR SERVICE'' and contained spaces for recording personal details. The second page was an inventory sheet headed ``RADIO EQUIPMENT & UNIFORMS'' and contained checkboxes for this equipment under the headings ``OUT'' and ``BACK''. At the bottom was a space for the interviewer's comments and a declaration, with space underneath for a signature and date, that read:

``I HAVE READ, UNDERSTOOD AND AGREE TO WORK UNDER THE CONDITIONS AS SET DOWN BY THE ABOVE COMPANY PER DOCUMENT 792.''

The third page was headed ``THESE POINTS ARE TO BE ADHERED TO AND UNDERSTOOD'' and contained 11 points that roughly summarised the content of Document 792. It included the following terms:

``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.

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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.

...

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.

...

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.''

24. It would thus appear that the contractual relationship between Vabu and its bicycle couriers, upon whom, as Ireland J correctly observed in the taxation decision, Vabu imposed its work practices, was partly oral and partly in writing, as evidenced by the third page of the employment form and Documents 590 and 792. Document 590 was produced in May 1990, while Document 792 was produced in July 1992. The latter appeared to supersede the former but both were given to new drivers after July 1992. Some important aspects of the contract, such as the rate of remuneration for deliveries, were not recorded in the written documents. Further, although Documents 590 and 792 both referred to annual and sick leave, Vabu's fleet administrator gave evidence that no payments of annual leave or sick leave were given, and no superannuation deductions were made by Vabu in respect of bicycle couriers in 1994. It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing ``the totality of the relationship'' between the parties; it is this which is to be considered. ^[18] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) Aust Torts Reports ¶ 80-000 at 67,448; (1985-1986) 160 CLR 16 at 29 .

The present litigation - the decision of the Court of Appeal

25. The second and third grounds of Mr Hollis' claim (``common law estoppel'' and the Trade Practices Act issues) were expressly abandoned before the Court of Appeal. ^[19] (1999) Aust Torts Reports ¶ 81-535 at 66,565. Sheller JA (with whom Giles JA agreed) dismissed Mr Hollis' appeal in respect of the refusal of the application to join CIC as a defendant. Submissions for Mr Hollis in respect of the first ground were put on two heads. It was submitted that Vabu was vicariously liable for the negligence of the bicycle courier as its servant or agent; and, secondly, that Vabu was directly liable to Mr Hollis by way of a non- delegable duty of care owed to him as the user of a public thoroughfare. ^[20] (1999) Aust Torts Reports ¶ 81-535 at 66,566.

26. As previously mentioned, Sheller JA addressed the vicarious liability issue on the footing that the bicycle couriers were independent contractors. His Honour rejected the claims that Vabu was vicariously liable for the acts of its bicycle couriers. He rejected Mr Hollis' submission that the activity in which the bicycle couriers were engaged on behalf of Vabu was ``itself a hazardous one or dangerous because of [ Vabu's] emphasis on speedy delivery and the recognition that a significant number of couriers disobeyed traffic rules and posed a danger to pedestrians''. <sup>[21]</sup> (1999) Aust Torts Reports ¶ 81-535 at 66,566. He also held that `` [ t]here 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'', ^[22] (1999) Aust Torts Reports ¶ 81-535 at 66,568. thus (it was said) invoking an ``agency'' exception to the usual rule of non-liability of a principal. This matter was discussed recently in Scott v Davis . <sup>[23]</sup> (2000) Aust Torts Reports ¶ 81-573 at 64,023 [ 168]; (2000) 74 ALJR 1410 at 1440 [ 168]; 175 ALR 217 at 258. See also Burnie Port Authority v General Jones Pty Ltd (1994) Aust Torts Reports ¶ 81-264 at 61,130; (1992-1994) 179 CLR 520 at 575 . Morley v Gaisford (1795) 2 H Bl 441 [ 126 ER 639] and Chandler v Broughton (1832) 1 C & M 29 [ 149 ER 301] are authority for the proposition that a master was directly liable for the trespasses of his servant where the acts comprising it were done ``at [ the master's] command''.

27. Sheller JA also rejected the claim based upon a non-delegable duty of care. After correctly noting that `` [ i]n order that there be a non-delegable duty of care there must first be a

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duty of care'', ^[24] (1999) Aust Torts Reports ¶ 81-535 at 66,568. See Kondis v State Transport Authority (1984) Aust Torts Reports ¶ 80-311 at 68,102-68,103; (1984) 154 CLR 672 at 684-685 ; Jones v Bartlett & Anor (2000) Aust Torts Reports ¶ 81-582 at 64,245 [ 217]; (2000) 75 ALJR 1 at 36 [ 217]; 176 ALR 137 at 184 . he considered that submissions for Mr Hollis had elided the step of finding a duty with that of determining its delegability. His Honour said that `` [ a]lthough it was never stated with this precision I understand [ Mr Hollis'] submission to be that the business conducted by Vabu was so hazardous to other users of public streets in the vicinity, that such conduct gave rise to a duty to such users to ensure that reasonable care and skill was taken for their safety''. ^[25] (1999) Aust Torts Reports ¶ 81-535 at 66,569. He held that the business conducted by Vabu was not inherently dangerous to other street users, and that as a result no special relationship importing a non- delegable duty of care existed between Vabu and those street users. ^[26] (1999) Aust Torts Reports ¶ 81-535 at 66,570.

28. Davies AJA dissented on this issue. Referring in particular to the transcript of evidence given before the Parliamentary Joint Standing Committee Upon Road Safety (Staysafe), ^[27] (1999) Aust Torts Reports ¶ 81-535 at 66,571. he held that Vabu did owe a duty of care to street users due to the nature of its business. This was because: ^[28] (1999) Aust Torts Reports ¶ 81-535 at 66,574.

`` [ t]he nature of [ Vabu's] business required couriers to use the streets and footpaths for the delivery of parcels. The couriers were obliged to accept and perform work in respect of which time limits for delivery had been imposed by [ Vabu]. It could be reasonably foreseen that, unless reasonable care was taken, pedestrians in the city would be likely to suffer injury to their person or property. It was known that the couriers `posed danger to pedestrians'. And it was known that pedestrians were vulnerable because of the difficulty of identifying and recovering damages from the couriers.''

Davies AJA concluded that this duty was non-delegable, so that engagement of an independent contractor to undertake the business of Vabu was not sufficient to avoid liability. ^[29] (1999) Aust Torts Reports ¶ 81-535 at 66,576. Although Vabu did not directly authorise the doing of the precise act of negligence complained of, he held that `` [ i]t was inevitable, as a result of the way in which the business of [ Vabu] was structured, that people going about their ordinary business in the streets of Sydney would be injured''. ^[30] (1999) Aust Torts Reports ¶ 81-535 at 66,576.

The grounds of appeal open in this Court

29. The special leave application to this Court was drawn and argued in terms of ``vicarious liability''. One ground of grant of special leave was whether the Court of Appeal was in error in finding that Vabu ``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''. This was not limited to a relationship of principal and independent contractor. Vicarious liability may also flow (and indeed more usually flows) from a relationship of employment. In written submissions on the appeal, counsel for Mr Hollis submitted that this vicarious liability also arose from a relationship of employer and employee. Counsel for Vabu contended that, given the concession in the Court of Appeal, it was no longer open to the appellant to challenge the finding that the bicycle courier was an independent contractor.

30. Nevertheless, this Court heard full oral argument on this matter, and we would treat the employee/independent contractor issue as open in this Court.

31. The concession in the Court of Appeal was one as to a proposition (more accurately, a conclusion) of law alone, and not as to the facts on which that proposition rested. ^[31] Bowes v Chaleyer (1923) 32 CLR 159 at 172 . In Zuijs v Wirth Brothers Pty Ltd , ^[32] (1955) 93 CLR 561 at 563, 568-569. the same concession had been made in the New South Wales Supreme Court but was held not to stand in the way of this Court hearing argument and, indeed, holding to the contrary on appeal. Moreover, it has not been demonstrated that any substantial prejudice would result to Vabu in allowing Mr Hollis now to argue this point. All the facts necessary for determination of the question were adduced and proved at trial and no new fact is sought to be or needs to be raised. ^[33] Sydney Harbour Trust Commissioners v Wailes (1908) 5 CLR 879 at 889 ; George Hudson Ltd v Australian Timber Workers' Union (1923) 32 CLR 413 at 426 ; Adams v Chas S Watson Pty Ltd (1938) 60 CLR 545 at 548 ; O'Brien v Komesaroff (1982) 150 CLR 310 at 319 ; Coulton v Holcombe (1986) 162 CLR 1 at 7-8 ; Crampton v The Queen (2000) 75 ALJR 133 at 136 [ 13], 142 [ 50], 153 [ 111]; 176 ALR 369 at 372, 381, 396 ; Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 314 [ 12]; 176 ALR 693 at 696 . Further, one might have thought that, as a practical matter, there would have been considerable obstacles in the path of any challenge to the finding of a relationship of principal and independent contractor at trial or in the Court of Appeal because it would have been contrary to the prior holding of the Court of Appeal in the taxation decision.

Vicarious liability

32. In Northern Sandblasting Pty Ltd v Harris , ^[34] (1997) Aust Torts Reports ¶ 81-435 at 64,270; (1996-1997) 188 CLR 313 at 366-367. See also at Aust Torts Reports 64,283; CLR 392 per Kirby J. McHugh J referred to the force of arguments which would justify the imposition of liability on employers for the acts of independent contractors. It has long been accepted, as a general rule, ^[35] See the observations of Brennan J in Burnie Port Authority v General Jones Pty Ltd (1994) Aust Torts Reports ¶ 81-264 at 61,130; (1992-1994) 179 CLR 520 at 575 . 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. ^[36] Northern Sandblasting Pty Ltd v Harris (1997) Aust Torts Reports ¶ 81-435 at 64,250, 64,270; (1997) 188 CLR 313 at 329-330, 366 . That general rule was not challenged in this

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appeal. This fact and the availability of a full answer to the appeal within current doctrine makes this an unsuitable case in which to explore the larger question reserved by McHugh J and Kirby J in Northern Sandblasting . The foundation case for the present authorities is considered to have been Quarman v Burnett . ^[37] (1840) 6 M & W 499 [ 151 ER 509] . In that case, Parke B, speaking for the Court of Exchequer in banc, settled the difference of opinion in Laugher v Pointer ^[38] (1826) 5 B & C 547 [ 108 ER 204] . in favour of the views of Lord Tenterden and Littledale J. ^[39] As Abbott CJ, Lord Tenterden had been the trial judge who entered a nonsuit and he then sat on the application for a new trial.

33. The tokens - ``employer'', ``employee'', ``principal'' and ``independent contractor'' - which provide the currency in this field of discourse have survived for a very long time and have been adapted to very different social conditions. As was pointed out in Scott v Davis , ^[40] (2000) Aust Torts Reports ¶ 81-573 at 64,034 [ 230]; (2000) 74 ALJR 1410 at 1452 [ 230]; 175 ALR 217 at 275. vicarious liability derived originally from mediaeval notions of headship of a household, including wives and servants; their status in law was absorbed into that of the master. ^[41] Holmes, ``Agency'', (1891) 4 Harvard Law Review 345 at 364; Wigmore, ``Responsibility for Tortious Acts: Its History'', (1894) 7 Harvard Law Review 315 (Pt 1), 383 (Pt 2).

34. The nature of employment relationships has changed greatly since the age of feudal status. This particularly is true over the course of the last century, in which not only the character of employment but also the common law of negligence developed apace. In Darling Island Stevedoring and Lighterage Co Ltd v Long , ^[42] (1957) 97 CLR 36 at 56-57. Fullagar J expressed the view, surely correctly, that the modern doctrine respecting the liability of an employer for the torts of an employee was adopted not by way of an exercise in analytical jurisprudence but as a matter of policy.

35. A fully satisfactory rationale for the imposition of vicarious liability in the employment relationship has been slow to appear in the case law. Dean Prosser and Professor Keeton observe: ^[43] Prosser and Keeton on the Law of Torts , 5th ed (1984), § 69 at 500.

``A multitude of very ingenious reasons have been offered for the vicarious liability of a master: he has a more or less fictitious `control' over the behavior of the servant; he has `set the whole thing in motion,' and is therefore responsible for what has happened; he has selected the servant and trusted him, and so should suffer for his wrongs, rather than an innocent stranger who has had no opportunity to protect himself; it is a great concession that any man should be permitted to employ another at all, and there should be a corresponding responsibility as the price to be paid for it - or, more frankly and cynically, `In hard fact, the [ real] reason for [ ] employers' liability is [ ...] the damages are taken from a deep pocket.''' ^[44] Baty, Vicarious Liability , (1916) at 154.

(footnote omitted)

Each of these particular reasons is persuasive to some degree but, given the diversity of conduct involved, probably none can be accepted, by itself, as completely satisfactory for all cases. ^[45] The imperfections of the various rationales are discussed in Note, ``An Efficiency Analysis of Vicarious Liability Under the Law of Agency'', (1981) 91 Yale Law Journal 168 at 169-173; Flannigan, ``Enterprise Control: The Servant-Independent Contractor Distinction'', (1987) 37 University of Toronto Law Journal 25 at 26-37; Davis, ``Vicarious Liability, Judgment Proofing, and Non-Profits'', (2000) 50 University of Toronto Law Journal 407 at 409-412.

36. Two further points should be made. The first is that it is one thing to appreciate the considerations which in modern times support the doctrine of vicarious liability; it is another to select particular terms which provide the criterion of liability in a given case. Secondly, examination is required of the content of those terms. That content will reflect, from the facts of case to case, the particular force given to the considerations supporting the doctrine of vicarious liability. Terms such as ``employee'' and ``independent contractor'', and the dichotomy which is seen as existing between them, do not necessarily display their legal content purely by virtue of their semantic meaning.

37. Observations by Windeyer J in Brooks v Burns Philp Trustee Co Ltd ^[46] (1969) 121 CLR 432 . are in point here. His Honour was dealing with the different ways in which the terms ``void'' and ``unenforceable'' had been used with respect to illegality and said: ^[47] (1969) 121 CLR 432 at 458.

``The words used do not matter if the actual legal result they are used to express be not in doubt or debate. But it has always seemed to me likely to lead to error, in matters such as this, to adopt first one of the familiar legal adjectives... and then having given an act a label, to deduce from that its results in law. That is to invert the order of inquiry, and by so doing to beg the question, and allow linguistics to determine legal rights.''

38. Earlier, in Bugge v Brown , ^[48] (1919) 26 CLR 110 at 117-118. Isaacs J said that the phrases ``the course of his employment'', ``scope of employment'' and ``sphere of employment'' are used ``to indicate the just limits of a master's responsibility for the wrongdoing of his servant'', and that this is why ``the law recognizes that it is equally unjust to make the master responsible for every act which the servant chooses to do''.

39. In Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-

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operative Assurance Co of Australia Ltd , ^[49] (1931) 46 CLR 41 . 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. ^[50] Kondis v State Transport Authority (1984) Aust Torts Reports ¶ 80-311 at 68,106-68,107; (1984) 154 CLR 672 at 691-692 ; Burnie Port Authority v General Jones Pty Ltd (1994) Aust Torts Reports ¶ 81-264 at 61,129; (1992-1994) 179 CLR 520 at 574 ; Northern Sandblasting Pty Ltd v Harris (1997) Aust Torts Reports ¶ 81-435 at 64,250, 64,270; (1996-1997) 188 CLR 313 at 329-330, 366 . His Honour explained that, in the case of an independent contractor: ^[51] (1931) 46 CLR 41 at 48.

`` [ t]he work, although done at [ the principal's] request and for his benefit, 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.''

40. This statement merits close attention. It indicates that employees and independent contractors perform work for the benefit of their employers and principals respectively. Thus, by itself, the circumstance that the business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is an employee. 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. These notions later were expressed positively by Windeyer J in Marshall v Whittaker's Building Supply Co . ^[52] (1963) 109 CLR 210 at 217. His Honour said that the distinction between an employee and an independent contractor is ``rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own''. In Northern Sandblasting , McHugh J said: ^[53] (1997) Aust Torts Reports ¶ 81-435 at 64,270; (1996-1997) 188 CLR 313 at 366.

``... The rationale for excluding liability for independent contractors is that the work which the contractor has agreed to do is not done as the representative of the employer.''

41. In Bazley v Curry , ^[54] [ 1999] 2 SCR 534 at 552-555. the Supreme Court of Canada saw two fundamental or major concerns as underlying the imposition of vicarious liability. The first is the provision of a just and practical remedy for the harm suffered as a result of the wrongs committed in the course of the conduct of the defendant's enterprise. The second is the deterrence of future harm, ^[55] A matter discussed in 1934 by Seavey in his essay, ``Speculations as to `Respondeat Superior''', (1934) Harvard Legal Essays 433 at 448. by the incentive given to employers to reduce the risk of accident, even where there has been no negligence in the legal sense in the particular case giving rise to the claim.

42. 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. In delivering the judgment of the Supreme Court of Canada in Bazley v Curry , McLachlin J said of such cases that ``the employer's enterprise [ has] created the risk that produced the tortious act'' and the employer must bear responsibility for it. <sup>[56]</sup> [ 1999] 2 SCR 534 at 548. McLachlin J termed this risk ``enterprise risk'' and said that ``where the employee's conduct is closely tied to a risk that the employer's enterprise has placed in the community, the employer may justly be held vicariously liable for the employee's wrong''. ^[57] [ 1999] 2 SCR 534 at 548-549. Earlier, in Ira S Bushey & Sons , Inc v United States , Judge Friendly had said that the doctrine of respondeat superior rests: ^[58] 398 F 2d 167 at 171 (1968); cf Dobbs, The Law of Torts , (2001), vol 2, § § 334, 338.

``in a deeply rooted sentiment that a business enterprise cannot justly disclaim responsibility for accidents which may fairly be said to be characteristic of its activities.''

``Control''

43. These notions also influence the meaning to be given today to ``control'' as a discrimen between employees and independent contractors. In Stevens v Brodribb Sawmilling Co Pty Ltd , <sup>[59]</sup> (1986) Aust Torts Reports ¶ 80-000 ; (1985-1986) 160 CLR 16 . the Court was adjusting the notion of ``control'' to circumstances of contemporary life and, in doing so, continued the developments in Zuijs v Wirth Brothers Pty Ltd ^[60] (1955) 93 CLR 561 . and Humberstone v Northern Timber Mills . ^[61] (1949) 79 CLR 389 . In Humberstone , ^[62] (1949) 79 CLR 389 at 404. Dixon J observed that the regulation of industrial conditions and other statutes had made more difficult of application the classic test, whether the contract placed the supposed employee subject to the command of the employer. Moreover, as has been pointed out: ^[63] Glass, McHugh and Douglas, The Liability of Employers in damages for personal injury , 2nd ed (1979) at 72-73.

``The control test was the product of a predominantly agricultural society. It was first devised in an age untroubled by the complexities of a modern industrial society placing its accent on the division of functions and extreme specialisation. At the time when the courts first formulated the distinction between employees and

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independent contractors by reference to the test of control, an employer could be expected to know as much about the job as his employee. Moreover, the employer would usually work with the employee and the test of control and supervision was then a real one to distinguish between the employee and the independent contractor. With the invention and growth of the limited liability company and the great advances of science and technology, the conditions which gave rise to the control test largely disappeared. Moreover, with the advent into industry of professional men and other occupations performing services which by their nature could not be subject to supervision, the distinction between employees and independent contractors often seemed a vague one.''

44. It was against that background that in Brodribb ^[64] (1986) Aust Torts Reports ¶ 80-000 at 67,448; (1985-1986) 160 CLR 16 at 29. Mason J said that, whilst these criticisms might readily be acknowledged:

``... the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, `so far as there is scope for it', even if it be `only in incidental or collateral matters': Zuijs v Wirth Brothers Pty Ltd . ^[65] (1955) 93 CLR 561 at 571.

Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered.''

45. So it is that, in the present case, guidance for the outcome is provided by various matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability. These include, but are not confined to, what now is considered ``control''.

The facts of this case

46. The matters of policy which Callinan J mentions in his reasons might be significant in evidentiary circumstances which differed from those of this case, and which might disclose a different relationship between the parties in respect of whom vicarious liability is postulated. However, considerations respecting economic independence and freedom of contract are not, with respect, determinative of the legal character of the relationship between the bicycle courier and Vabu as disclosed by the evidence.

47. In classifying the bicycle couriers as independent contractors, the Court of Appeal fell into error in making too much of the circumstances that the bicycle couriers owned their own bicycles, bore the expenses of running them and supplied many of their own accessories. Viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations. A different conclusion might, for example, be appropriate where the investment in capital equipment was more significant, and greater skill and training were required to operate it. The case does not deal with situations of that character. The concern here is with the bicycle couriers engaged on Vabu's business. A consideration of the nature of their engagement, as evidenced by the documents to which reference has been made and by the work practices imposed by Vabu, indicates that they were employees.

48. First, these couriers were not providing skilled labour or labour which required special qualifications. A bicycle courier is unable to make an independent career as a free-lancer or to generate any ``goodwill'' as a bicycle courier. The notion that the couriers somehow were running their own enterprise is intuitively unsound, and denied by the facts disclosed in the record.

49. Secondly, the evidence shows that the couriers had little control over the manner of performing their work. They were required to be at work by 9.00 am ^[66] Vabu's fleet administrator gave evidence that, in 1994, the starting time was 8.00 am. and were assigned in a work roster according to the order in which they signed on. If they signed on after this time, they would not necessarily work on their normal ``channel''. Couriers were not able to refuse work. It was stated in Document 590 that ``ANY DRIVER WHO DOES SO WILL NO LONGER WORK FOR THIS FIRM.'' The evidence does not disclose whether the couriers were able to delegate any of their tasks or whether they could have worked for another courier operator in addition to Vabu during the day. It may be thought unlikely that the couriers would have been permitted by Vabu to engage in either activity.

50. Thirdly, the facts show that couriers were presented to the public and to those using the courier service as emanations of Vabu. They were to wear uniforms bearing Vabu's logo. Vabu stated in Document 792 that ``DRIVERS

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SHOULD ALWAYS BE AWARE THAT THEY ARE A DIRECT REPRESENTATION OF THE COMPANY. THEIR ATTITUDE AND APPEARANCE CAN ONLY BE SEEN AS A DIRECT REFLECTION OF OUR ORGANISATION.'' Certain attire (``thongs, singlets, swim shorts, torn jeans and other unclean or torn attire'') was not permitted. Further, Vabu required that all couriers ``should be clean shaven unless that person is bearded''.

51. The question of the significance of livery in cases where the issue is whether the individual wearing it is an employee or an independent contractor is not a new one. In Quarman v Burnett itself, Parke B said that the wearing by the coachman, with the consent of the defendants, of their livery was a ``matter of evidence only of the man being their servant, which the fact at once answers''. ^[67] (1840) 6 M & W 499 at 509 [ 151 ER 509 at 513]. Here, there is rather more to the facts.

52. Couriers were required to wear Vabu livery partly from Vabu's wish to advertise its business. Mr Hollis was unable to identify the cyclist who struck him down other than by the Vabu livery. Vabu knew that a significant number of its couriers rode in a dangerous manner but had failed to compel its couriers to adopt an effective means of personal identification. Rather, the effect of Vabu's system of business was to encourage pedestrians to identify the couriers ``as a part of [ Vabu's] own working staff''; the phrase is that of Dean Prosser and Professor Keeton, ^[68] Prosser and Keeton on the Law of Torts , 5th ed (1984), § 70 at 501. See also Dobbs, The Law of Torts , (2001), vol 2, § 338. used by them as a guide to classification of a person as an employee.

53. Fourthly, there is the matter of deterrence. Reference has been made to the findings of fact in this case respecting the knowledge of Vabu as to the dangers to pedestrians presented by its bicycle couriers and the failure to adopt effective means for the personal identification of those couriers by the public. One of the major policy considerations said by the Supreme Court of Canada in Bazley v Curry ^[69] [ 1999] 2 SCR 534 . to support vicarious liability was deterrence of future harm. McLachlin J said: ^[70] [ 1999] 2 SCR 534 at 554-555.

``Fixing the employer with responsibility for the employee's wrongful act, even where the employer is not negligent, may have a deterrent effect. Employers are often in a position to reduce accidents and intentional wrongs by efficient organization and supervision. Failure to take such measures may not suffice to establish a case of tortious negligence directly against the employer....

Beyond the narrow band of employer conduct that attracts direct liability in negligence lies a vast area where imaginative and efficient administration and supervision can reduce the risk that the employer has introduced into the community. Holding the employer vicariously liable for the wrongs of its employee may encourage the employer to take such steps, and hence, reduce the risk of future harm. A related consideration raised by Fleming is that by holding the employer liable, `the law furnishes an incentive to discipline servants guilty of wrongdoing' ^[71] Fleming, The Law of Torts , 9th ed (1998) at 410. .''

54. Fifthly, Vabu superintended the couriers' finances: Vabu produced pay summaries and couriers were required to dispute errors by 6.00 pm Friday of the same week. ``Unjustified or unsubstantiated'' claims for additional charges, such as due to waiting time, wrong address or excess weight, could result in total deduction of that particular job payment. There was no scope for the couriers to bargain for the rate of their remuneration. Evidence in chief was given by Vabu's fleet administrator that the rate of remuneration to the bicycle couriers had remained unchanged between 1994 and 1998. Vabu was authorised to hold for six weeks the last week's pay of a courier against any overcharges, unpaid cash jobs or outstanding insurance claims. Final cheques would not be processed until all of Vabu's property had been returned. Failure to return Vabu's equipment, including the uniforms, or the return of damaged equipment or unwashed uniforms resulted in replacement or washing costs being deducted from this amount. Vabu undertook the provision of insurance for the couriers and deducted the amounts from their wages and, as discussed above, passed on an excess to all bicycle couriers and did not pay medical or hospital costs. <sup>[72]</sup> In Document 792, Vabu informed its couriers that `` [ t]his company does not pay hospital or medical bills for any courier involved in an accident''. The method of payment, per delivery and not per time period engaged, is a natural means to remunerate employees whose sole duty is to perform deliveries, not least for ease of calculation and to provide an incentive more efficiently to make deliveries.

55. Moreover, Vabu stipulated in Document 590 that `` [ n]o annual leave will be considered for the period November to Christmas Eve, nor for the week prior to Easter. Leave requests will

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be considered in accordance with other applications and should be submitted to the manager in writing at least 14 days prior.'' This suggests that their engagement by Vabu left the couriers with limited scope for the pursuit of any real business enterprise on their own account.

56. Sixthly, the situation in respect of tools and equipment also favours, if anything, a finding that the bicycle couriers were employees. Apart from providing bicycles and being responsible for the cost of repairs, couriers were required to bear the cost of replacing or repairing any equipment of Vabu that was lost or damaged, including radios and uniforms. Although a more beneficent employer might have provided bicycles for its employees and undertaken the cost of their repairs, there is nothing contrary to a relationship of employment in the fact that employees were here required to do so. This is all the more so because the capital outlay was relatively small and because bicycles are not tools that are inherently capable of use only for courier work but provide a means of personal transport or even a means of recreation out of work time. The fact that the couriers were responsible for their own bicycles reflects only that they were in a situation of employment more favourable than not to the employer; it does not indicate the existence of a relationship of independent contractor and principal.

57. Finally, and as a corollary to the second point mentioned above, this is not a case where there was only the right to exercise control in incidental or collateral matters. Rather, there was considerable scope for the actual exercise of control. ^[73] Stevens v Brodribb Sawmilling Co Pty Ltd (1986) Aust Torts Reports ¶ 80-000 at 67,448; (1985-1986) 160 CLR 16 at 29 . Vabu's whole business consisted of the delivery of documents and parcels by means of couriers. Vabu retained control of the allocation and direction of the various deliveries. The couriers had little latitude. Their work was allocated by Vabu's fleet controller. They were to deliver goods in the manner in which Vabu directed. In this way, Vabu's business involved the marshalling and direction of the labour of the couriers, whose efforts comprised the very essence of the public manifestation of Vabu's business. It was not the case that the couriers supplemented or performed part of the work undertaken by Vabu or aided from time to time; rather, as the two documents relating to work practices suggest, to its customers they were Vabu and effectively performed all of Vabu's operations in the outside world. It would be unrealistic to describe the couriers other than as employees.

58. It should be observed that this conclusion is different from a decision of the Court of Appeal of New Zealand upon somewhat similar facts in TNT Worldwide Express (NZ) Ltd v Cunningham . ^[74] [ 1993] 3 NZLR 681 . There, an ``owner-driver'' vehicle courier employed under a standard form contract was held to be an independent contractor. One term of the contract stated that ``THE relationship between the Contractors and the Company is and shall be for all purposes that of independent Contractor and neither this Agreement nor anything herein contained or implied shall constitute the relationship of employer and employee between the parties''. ^[75] [ 1993] 3 NZLR 681 at 692. Although such terms are not of themselves determinative, as parties cannot deem the relationship between themselves to be something it is not, ^[76] See R v Foster ; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 at 150-151 ; Adam v Newbigging (1888) 13 App Cas 308 at 315 ; Ex parte Delhasse; In re Megevand (1878) 7 Ch D 511 at 526, 528, 532 . See also TNT Worldwide Express (NZ) Ltd v Cunningham [ 1993] 3 NZLR 681 at 699 : ``The proper classification of a contractual relationship must be determined by the rights and obligations which the contract creates, and not by the label the parties put on it.'' this term was held to summarise the relationship between the parties accurately. Casey J pointed out that the contract contained terms which suggested that ``each party was genuinely trading off benefits under one relationship for perceived advantages under the other''. ^[77] [ 1993] 3 NZLR 681 at 695. Thus, for example, although the courier company controlled the appearance of the courier's vehicle, the courier was given control of his own chosen area of territory, was responsible for employing relief drivers, and ``could certainly profit from sound management and performance of his task. Indeed, it seems obvious that this was the principal attraction of the arrangement''. <sup>[78]</sup> [ 1993] 3 NZLR 681 at 697. The courier was required to hold a continuous goods service licence under the Transport Act 1962 (NZ), was assured a guaranteed minimum payment per month and was subject to a 12 month restraint of trade clause from the date of termination of the agreement. <sup>[79]</sup> [ 1993] 3 NZLR 681 at 684, 690-691, 700. As a result, by reason of the terms in the contract, the courier ``accepted only that degree of control and supervision necessary for the efficient and profitable conduct of the business he was running on his own account as an independent contractor''. ^[80] [ 1993] 3 NZLR 681 at 698. This is unlike the present case where, as discussed above, the bicycle couriers could not be said to have been conducting any business of their own.

59. Reliance was placed on the fact that the New South Wales Parliament had considered the question of change to the law in relation to liability for collisions between courier cyclists

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and others but had not enacted any legislation on the subject. It was submitted that, in these circumstances, this Court should defer to that legislative inactivity. It is one thing to say, as was discussed in Esso Australia Resources Ltd v FC of T , ^[81] 2000 ATC 4043 at 4046-4048 [ 19]- [ 28], 4060 [ 97]; (1999) 201 CLR 49 at 60-63 [ 19]- [ 28], 86 [ 97]. that the common law may develop by analogy to the enacted law. It is another proposition that the common law should stand still because the legislature has not moved. Nevertheless, this proposition might have some attraction if this Court were contemplating the reformulation of basic doctrine, for example to reclassify the liability of Vabu, as an independent contractor, in relation to Mr Hollis. However, no such reformulation is proposed. This decision applies existing principle in a way that is informed by a recognition of the fundamental purposes of vicarious liability and the operation of that principle in the context of one of the many particular relationships that has developed in contemporary Australian society.

60. In these circumstances, there is no reason for this Court to decline to exercise an essential attribute of judicial authority, namely the application of principle to the proved facts. The legislature may enact some larger or different reform. Nothing said in these reasons could prevent it from doing so. But, in the circumstances of this litigation, statutory change is not necessary; merely the application of common law doctrine to the facts. There is no occasion for deference by the judicial branch of government to the legislative branch. ^[82] cf Peters, ``Assessing the New Judicial Minimalism'', (2000) 100 Columbia Law Review 1454 at 1507-1510.

Conclusion

61. The relationship between Vabu and the bicycle courier who struck down Mr Hollis was that of employer and employee. Vabu thus was vicariously liable for the consequences of the courier's negligent performance of his work.

62. It is unnecessary in the light of the above to address the submissions as to non- delegability of the duty of care.

63. The appeal should be allowed with costs. The orders of the Court of Appeal of 5 November 1999 should be set aside. In lieu thereof the appeal to that Court should be allowed with costs, the verdict and orders of the District Court set aside and judgment entered for Mr Hollis in the sum of $176,313.00.