17 Since the relationship has been described as principal and contractor in the Federal Court decision it is appropriate that the court consider whether such a relationship of creates vicarious liability.
18 The general rule is that a principal is not liable for the negligent conduct of his independent contractor. There are two exceptions: where the independent contractor is under the control and direction of the principal in the actual execution of the work and where the principal engages the independent contractor to carry out a non delegable duty which the contractor fails to do.
19 In relation to the first exception the requisite level of control that might give rise to vicarious liability for the principal for the conduct of the independent contractor has been considered in a number of cases. In Steven v Brodribb Sawmilling Co Pty Ltd (1986) 160CLR 16 a sawmiller had general supervision over the operation of sniggers and truckers, however, it did not have control over the method over which sniggers and truckers carried out their work. The sniggers and truckers supplied their own equipment, set their own hours and were paid according to the volume of timber delivered. The High Court held that the sawmiller was not liable for the negligent conduct of a snigger in that case.
20 The critical factor in establishing vicarious liability on a principal for the conduct of an independent contractor is the existence of actual and direct control of the manner in which work is carried out rather than a general supervisory control. Applying this principle to the case of a taxi operator and driver it is clear that while there are restrictions upon where the taxi may be used, the operator has little direct control of the manner in which the taxi is used during the shift.
21 The second exception is based on the existence of a non-delegable duty. In Kondis v State Transport Authority (1984) 154 CLR 652 Mason J identified the circumstances in which the law imposed a non delegable duty of care. The rationale for the non-delegable duty is explained by Mason J as being based on the existence of a "special responsibility" to undertake the care of another person. No such "special relationship" exists between taxi operators who engage drivers and other road users.
22 The plaintiff seeks to establish a relationship of principal and agent between Abov Service Co Pty Ltd and Mr Joyce.
23 In Soblusky v Egan [1960] HCA 9 the High Court held that a bailee under a hire purchase agreement was vicariously liable for the negligence of the driver. The Court considered it to be a relevant factor that the bailee was present in the vehicle and had authority to assert control over the vehicle and it was immaterial that the bailee had fallen asleep. The Court considered that the delegation of management of the vehicle to another person as his agent did not detract from the principal's authority to assert control.
24 The more recent authority on principal and agency is the High Court decision of Scott v Davis (2000) HCA 52. The facts of that case were that Mr Davis was the owner and occupier of a property with a runway and light aeroplane. Mr Davis arranged for a pilot to take Travis Scott for a flight in an aeroplane. The plane crashed and Travis Scott was seriously injured. An action was brought against Mr and Mrs Davis on the basis that they were vicariously liable for the negligence of the pilot. The High Court held that Davis was not vicariously liable for the negligence of the pilot who was not his employee and was not subject to his direct control.
25 It is relevant to note that Scott v Davis involved a non commercial arrangement. Differing opinions were expressed by their Honours on the principles that relate to vicarious liability arising from negligent use of modes of transport.
26 Gleeson CJ noted the historical distinction between different forms of transport and rejected the contention raised in Launchbury v Morgans [1972] UKHL5 that vicarious liability could be established on the basis that the aeroplane was being used at Mr Davis' request and for his purpose although there was no direct control. Gleeson CJ states at 19:
"In Launchbury v Morgans Lord Wilberforce spoke of the use of a chattel, such as driving of a car, "under delegation of a task or duty". 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 Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd".
27 His Honour indicated that in the factual circumstances of Scott v Davis the principle of vicarious liability did not apply given that the flight took place in the context of a social gathering and the absence of any commercial arrangement between Mr Davis and the pilot.
28 Gummow J at 250 referred to the decision of the Court of Appeal of South Australia in the proceedings where Doyle CJ and Nyland J observed that modern decisions such as those outlined Soblusky appear to be confined to the use of motor vehicles where:
"the underlying principle appears to be that if an owner requests another to use the owner's chattel, and the other agrees, and the task is one in which the owner has an interest, the owner will be responsible for damage caused by the negligence of the person using the chattel".
29 Gummow J agreed that if such a principle were to be applied generally to chattels it would have the potential of unsettling the law. In Launchbury v Morgans Lord Wilberforce criticised the contention that vicarious liability should depend only upon identification of an "interest or concern" of the owner in the journey being undertaken by the driver as being too vague particularly in the absence of a commercial arrangement. Although the High Court did not overrule the decision in Soblusky, Gummow J, Hayne J and Callinan J limited the operation of the principles in Soblusky to the vicarious liability of the owner of a motor vehicle.
30 Callinan J at paragraph 357 considered the conditions that must be satisfied to establish liability of an owner of a motor car for the acts of a driver was the need for there to be an appointment, engagement or request that is made not merely in a social or domestic context. Secondly there must be the reality of an actual power of control. Furthermore, in a non commercial context, an owner not actually personally using or managing the car is unlikely to satisfy the requirement of having effective control.
31 McHugh J gave a dissenting judgment holding the owner liable on the basis that he had delegated to the pilot a task which the owner had agreed to perform and the pilot was not acting independently from the owner and the pilot was therefore the agent of the owner.
32 McHugh J referred to Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46CLR 41 where the High Court held that a principal may be liable for the tortious act of an agent even though the agent was not an employee. The critical finding in that decision was that the independent contractor represented the Company and was acting within the scope of authority. Although this decision related to an action in defamation McHugh J considered that there was no reason in principle that it should not apply generally to tortious acts.
33 McHugh J expressed the opinion at [34] that the authorities justify a conclusion that:
"a principal is also liable for the wrongful acts of an agent where the agent is performing a task which the principal has agreed to perform a duty which the principal is obliged to perform and the principal has delegated that task or duty to the agent, provided that the agent is not an independent contractor. The principal is also liable or the wrongful acts of a person who is acting on the principal's behalf as a representative and not as an independent principal".
34 Although the opinion of McHugh J was not followed by other judges in the circumstances of this case, it appears open at least, that such an approach would be accepted if the circumstances of the case related to a commercial arrangement.
35 The apparent difficulties in discerning the clear boundaries of vicarious liability are due, at least in part, to the changing nature of the labour force. Increasingly, work that was traditionally done by employees is now done by independent contractors. A number of judicial comments note that the common law has struggled to keep pace with these changes.
36 There is little doubt that had Mr Joyce been an employee of Abov Service Co Pty Ltd then Abov Service Co Pty Ltd would have been vicariously liable on a master/servant agency basis.
37 The nature of the relationship between Mr Joyce and Abov Service Co Pty Ltd bears strong similarities to the relationship between courier company and courier considered in Hollis v Vabu Pty Ltd (t/as Crisis Couriers) (2001) 181 ALR 263. Indeed, there are some additional factors present in this case that add weight to the argument that Mr Joyce, if not an employee, was a representative of Abov Service Co Pty Ltd. Mr Joyce was provided a motor vehicle which was owned and maintained by Abov Service Co Pty Ltd. Abov Service Co Pty Ltd was responsible for the running costs of the vehicle. Those factors were not present in the case of Hollis.
38 Mr Joyce could hardly be said to be involved in his own independent enterprise. He did not operate a separate business or own any tools of trade. He could be required to wear a uniform which was provided by Abov Service Co Pty Ltd. He worked 97 shifts for Abov Service Co Pty Ltd over a period of less than six months. The pay-in amounts were determined by Abov Service Co Pty Ltd rather than the taxi driver offering a service as an independent contractor.
39 Abov Services Co Pty Ltd does not have a mere interest or concern in Mr Joyce carrying out his duties. It is the primary function of Abov Service's operations and essential for its continuing business and commercial profit. The Court is of the view that these factors would satisfy the conditions referred to by Cullinan J in Davis v Scott. There is also no doubt that in view of the reasoning of McHugh J that he would readily find that there was an agency relationship on same the basis that he did in Scott v Davis.
40 This Court considers itself constrained by the decision of the Federal Court that arrangements of this type are not an employer/employee relationship and makes no finding on this point. However, the Court is satisfied from the significant level of general control that Abov Services Co Pty Ltd retained in determining the scope of work done by Mr Joyce and the manner in which it was carried out that Mr Joyce represented Abov Service Co Pty Ltd while undertaking these duties and that he was operating within the scope of his agency at the time of the collision. The service of Mr Joyce was retained for the commercial benefit of Abov Services. Accordingly, the Court finds that Abov Service Co Pty Ltd is vicariously liable for the negligent conduct of its agent.
41 The Court will enter a verdict and judgment in favour of the Plaintiff against the first Defendant together with costs and interest.