Non-Delegable Duty, Vicarious Liability and Agency: Moving Towards Convergence?
Judges have consistently insisted that vicarious liability and non-delegable duty are separate and distinct concepts and should remain so. Yet, judging from recent judicial developments, the two appear to be moving ever closer to each other. Further, there is the related doctrine or tool of agency. Perhaps some convergence of doctrines is on the horizon.
Apex Courts in Singapore and elsewhere have recently been grappling with what may be termed derivative tort liability. The scenario is simple and commonplace — when a person wants something to be done, he can either do it himself or get another person to do it for him. When he does it himself and negligently, he is liable under the tort of negligence to a third party who is harmed as a result. Where the act is done for him by another person and that other commits a tort, the legal position is far from clear or simple. There are several complications.
The starting point, under the common law, is that a duty of care is delegable.1 Some have argued that, strictly speaking, all duties of care are non-delegable: see Denning LJ in Cassidy v Ministry of Health  2 KB 343, at 363; Peel and Goudkamp, Winfield and Jolowicz on Tort, at para 21–044; J Morgan, “Liability for Independent Contractors in Contract and Tort” (2015) 74(1) Cambridge LJ 109 at 118. When a Defendant delegates a task to another person, he is not liable even if the appointee performs the task negligently, so long as the former had exercised care in the appointment or selection.
There are two reasons for the law taking this stance. The first is that tort law, in general, is fault-based; the Defendant is liable for his own carelessness, not that of others.2 See eg Chao JA in MCST 3322 v Tiong Aik at , citing Woodland v STA  AC 537 at 5. The passage from Tiong Aik was subsequently cited by Menon CJ in Ng Huat Seng v Munib Mohammad Madni  SGCA 58 at . For a brief historical analysis of fault-based liability, see M Lunney, D Nolan and K Oliphant, Tort Law: Text and Materials (Oxford University Press, 6th Ed, 2017) at pp 7–8. The second is that, often, the duty (to ensure that care is taken) is one which the Defendant cannot fulfil.3Leichhardt Municipal Council v Montgomery  230 CLR 22 at , cited with approval in Tiong Aik at , which was in turned endorsed in Ng Huat Seng at .
However, there are several exceptions to this general principle of non-liability on account of delegability of duty: vicarious liability, non-delegable duty and agency. We shall look at each of these in turn. Thereafter, we consider how recent judicial developments in these apparently disparate branches of law appear to point towards a convergence in the law.
It is trite law that an employer is vicariously liable for a tort committed by its employee in the course of employment. Vicarious liability, judges have repeatedly reminded, is a ‘true exception’ to this general principle of delegable duty.4 See eg Lord Sumption JSC in Woodland at , and endorsed in MCST 3322 v Tiong Aik  4 SLR 521 at , cited in Ng Huat Seng and another v Munib Mohammad Madni and another  2 SLR 1074 at . See also Lord Reid JSC in Armes v Nottinghamshire County Council  UKSC 60 at .
A host of reasons or justifications has been given for making the employer liable — the employer’s control over the employee,5Hutchinson v York, Newcastle and Berwick Railway  5 Exch 343, at 350. the employer’s greater ability to pay for or insure against the loss,6 G. Williams, ‘Vicarious Liability and the Master’s Indemnity’ (1957) 20 MLR 220. the argument of benefit and burden,7Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd  1 QB 510 at . and the argument of risk creation.8Bazley v Curry  2 SCR 534 at .
So, while the general principle is that a person is not liable for a tort committed by another person, the law does not accord the same latitude to employers as regards torts committed by their employees. In contrast, where the act is done by an independent contractor, the appointer is not liable and the general principle (or defence) of delegable duty applies.
However, the concept of vicarious liability has its restraints or controls. In the first place, the Court has to decide if the tortfeasor was indeed an employee. To this end, various tests were crafted — the control test, the integration test and the economic reality test — and the Courts eventually adopted a multi-factorial approach.
Secondly, and more importantly, the Courts utilised and expanded upon the idea of course of employment, initially being pre-occupied with the distinction between an unauthorised act and an unauthorised mode of an authorised act — the employer is liable for the latter but not the former.9Limpus v London General Omnibus (1862) 1 H and C 526; 158 ER 993 cfConway and Wimpey and Co  2 KB 266. There were other tools such as benefit to employer and excessiveness of conduct, especially when challenged with scenarios of intentional torts (such as theft and sexual abuse) by employees. Eventually, in Lister v Hesley Hall,10Lister v Hesley Hall  1 AC 215. the House of Lords embraced the close connection test — was there a sufficiently close connection between the employee’s tort and the scope of his work?
The close connection test found favour with Courts and was applied to both intentional torts and negligence.11 Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and another and another appeal  3 SLR 540, at–. With this test, vicarious liability appeared to reach a level of refinement and sophistication that vindicated the doctrine.
Then came two important cases — Various Claimants v Catholic Child Welfare Society and others12  3 WLR 1319. (also known as the Christian Brothers case) and Cox v Ministry of Justice (Cox).13  2 WLR 806.Christian Brothers was about sexual and physical abuse at a reformatory school for boys. The school was run by a Roman Catholic order called the Institute of the Brothers of the Christian Schools and the individual tortfeasors were ‘brothers’ who were bound to the Order by a lifelong vow of chastity, poverty and obedience. These brothers were taken care of by the organisation, and given a small salary. In Cox, the Defendant, a prison staff, was injured by the negligence of a prisoner who worked in the prison kitchen for nominal wages.
The Courts in both cases held that the tortfeasors were ‘akin to employees’ and applied vicarious liability to find the Defendants liable. The tortfeasors were not strictly employees but they performed their tasks as part of the organisation. In these cases, the close connection test shifted its focus from the connection between the tort and the employee’s scope of work to the connection between the Defendant-tortfeasor relationship and the tortious act.
As regards the factors to decide if vicarious liability should be imposed, Lord Phillips remarked in Christian Brothers, (Phillips factors):14 At .
There is no difficulty in identifying a number of policy reasons that usually make it fair, just and reasonable to impose vicarious liability on the employer when these criteria are satisfied:
- The employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability;
- The tort will have been committed as a result of activity being taken by the employee on behalf of the employer;
- The employee’s activity is likely to be part of the business activity of the employer;
- The employer… will have created the risk of the tort committed by the employee; and
- The employee will… have been under the control of the employer.
In Cox and later in Armes v Nottinghamshire CC (Armes),15  UKSC 60 Lord Reed JSC, referred to and endorsed the Phillips factors and remarked that factors two to four were the ‘principal justifications’16Armes at . of vicarious liability. Lord Phillips’ analysis, he thought, wove together several related ideas so as to develop a ‘modern theory’ of vicarious liability. In Cox, Lord Reed provided a reformulation for the test for relationships other than employment (Reed modifications):17 At , cited with approval in Armes at .
“… [W]here harm is wrongfully done by an individual who carries on activities as an integral part of the business activities carried on by the Defendant and for [the Defendant’s] benefit… and where the commission of the wrongful act is a risk created by the Defendant….” [Emphasis added]
A further extension or expansion of vicarious liability occurred in the recent case of Armes. There, the local authority which was in charge of a fostering programme was sued by child victims for acts of abuse (physical and sexual) by the foster parents on both the grounds of vicarious liability and non-delegable duty. The High Court as well as the Court of Appeal held that the authority was not liable on either basis.
On appeal, the UKSC decided by a 4–1 majority (Lord Hughes dissenting), that the authority was liable on the basis of vicarious liability but not on the basis of non-delegable duty. Lord Reed JSC, who delivered the majority judgment, reiterated the views he expressed in Cox on the subject of vicarious liability.
The Armes decision is significant, radical and controversial. It is significant as it confirms the changing jurisprudence and framework of vicarious liability — essentially the Phillips factors and the Reed modifications. It is radical in that the tortfeasors in the Armes case — the foster parents — cannot by a reasonable stretch of definition be considered as being part of the organisation of the local authority. It is controversial in that if parliamentary intention is the reason why there is no non-delegable duty, then likewise there should not be vicarious liability.
Vicarious Liability — Where or What is it Now?
Indeed, as Lord Phillips remarked in Christian Brothers,18 At . the law on vicarious liability is “on the move”. So, where has it moved to? And where is it going?
So far as quasi-employees are concerned, it seems likely that the English approach will be followed in other jurisdictions. In Singapore, Christian Brothers and Cox were recently cited with approval by Menon CJ in Ng Huat Seng v Munib Mohammad Madni.19  SGCA 58.
The extent to which vicarious liability is to be applied to situations of non-employees is less clear. Would Courts in other jurisdiction apply vicarious liability to hold local authorities liable for torts committed by foster parents in the Armes-type scenario? Can vicarious liability apply to other cases/instances of non-employees? For example, can a tenant be liable for a tort committed by his lodger as regards a task delegated to him? And, presumably, the Morgans v Launchbury20Morgans v Launchbury  1 AC 127 scenario (car owner who delegated task to driver may be vicariously liable for tort of the driver) can be accommodated within the new framework.
Dare one venture to ask a further question: can vicarious liability be used to hold a Defendant liable for a tort committed by an independent contractor? This was in fact an argument advanced by the Plaintiff’s counsel in the Singapore Court of Appeal decision in Ng Huat Seng and which earned the following rebuff from Menon CJ:21 At . To do so, said the learned judge, ‘would be antithetical to the doctrine’s very foundations’.
“Indeed, we do not see how vicarious liability, the normative foundation of which rests on the theory that it is fair, just and reasonable to hold a Defendant liable on the ground that the tortfeasor is in fact engaged in the Defendant’s enterprise, could possibly extend to tortious acts committed by an independent contractor, who, by definition, is engaged in his own enterprise.”
The Chief Justice there emphasised that vicarious liability should not be applied where the tortfeasor’s activity is ‘entirely attributable to the conduct of a recognisably independent business of his own or of a third party’.
Similarly, one might wonder if vicarious liability may be applied to a Defendant who outsourced to an independent contractor, as in the Woodland v Swimming Teachers Association (Woodland)22  3 WLR 1227. scenario. Indeed, if integral function, Defendant’s benefit and risk creation are the primary justifications for imposing vicarious liability, as Lord Reed said they are, what prevents the further expansion of the doctrine’s ambit and its application to the outsourcing scenario? It has even been boldly argued by a prominent academic that the recent developments in vicarious liability is threatening to reduce the rationale of vicarious liability to a “mere redistribution exercise”.23 P Giliker, “A Revolution in Vicarious Liability: Lister, the Catholic Child Welfare Society Case and Beyond” in Revolution and Evolution in Private Law (S Worthington, A Robertson, G.Virgo Ed) (Hart Publishing, 2018).As such, it remains to be seen where the path of vicarious liability leads us.
As mentioned above, a Defendant does not have vicarious liability for a tort committed by an independent contractor. However, he may be liable if he had been negligent in the selection of the independent contractor.24MCST 2297 v Seasons Park Ltd  2 SLR(R) 613 at . Also, he may be liable if he is considered to have breached a non-delegable duty. But non-delegable duty should remain exceptional.25 Lord Sumption in Woodland v STA  3 WLR 1227 at .
Non-Delegable Duty after Woodland
Until the UKSC decision in Woodland, there was no unifying (or general) framework for non-delegable duty, although there were several recognised categories of such liability, including ultra-hazardous activities, employee safety, the rule in Rylands v Fletcher, breach of statutory duty, and removal of neighbour’s right of support to land.
In Woodland, the Claimant, a student, was injured while attending swimming classes. Although swimming was part of the school curriculum, it was conducted not by the school directly, but through an independent contractor. One of the Defendants was the school and the Claimant submitted that the school owed her a non-delegable duty. Reversing the decisions of the trial judge as well as the Court of Appeal, the UKSC unanimously allowed the appeal.
Lord Sumption JSC, who delivered the judgment, crafted a framework of five defining features for the imposition of non-delegable duty:26 At .
- The claimant is especially vulnerable or dependent on the protection of the Defendant against the risk of injury;
- There is an antecedent relationship between the claimant and the Defendant which places the claimant in the custody, care or charge of the Defendant, and the Defendant had assumed a positive duty to protect the claimant;
- The claimant has no control over the performance of the obligations;
- The Defendant has delegated an integral part of the positive duty; and
- The third party has been negligent in performing that function.
Lord Sumption cautioned against imposing unreasonable financial burdens on those providing critical public services and said that a non-delegable duty should be imputed to schools only so far as it would be fair, just and reasonable to do so. Applying the law to the case at hand, the Court found that the school owed the student a non-delegable duty.
One should also note the following trenchant comment of Baroness Hale (as she then was):27 At .
It is particularly worth remembering that for the most part public authorities would have been vicariously liable to the claimants who were harmed in this way until the advent of outsourcing of essential aspects of their functions.
The Singapore Court of Appeal decision of MCST 3322 v Tiong Aik28  SGCA 40. is an important one on the subject of non-delegable duty. The case involved a suit by the management corporation of a condominium against the Developer, the Main Contractor, the Architect and the M and E Engineer of a condominium project for defects (incomplete fibre optic cabling, leaves in swimming pool and foul smell). Both the High Court and the Court of Appeal held that the independent contractor defence availed.
Chao Hick Tin JA, who delivered the judgment of the Court, accepted29 At . the Woodland framework as a good starting point for the development of non-delegable duties in Singapore and declared that a claimant must show that his case either falls within the established categories of non-delegable duty or possess all of the five Woodland features. In addition to satisfying Woodland, the Court has to decide if it is fair and reasonable to impose a non-delegable duty.30 At . Applying the law to the case at hand, the Court held that there was no non-delegable duty owed.
The fairness of the actual decision in Tiong Aik is open to question and has been commented upon elsewhere.31 Low and Mah, Non-delegable Duty after Tiong Aik, Singapore Law Gazette, November 2017, 23. Suffice it to say that the legal position appears not to mesh with the reality and the legitimate expectations of purchasers of property.
Ng Huat Seng
The Tiong Aik decision was quickly followed by the SCA decision in Ng Huat Seng v Munib Mohammad Madni (Ng Huat Seng).32  SGCA 58. The Ng Huat Seng decision was recently cited and discussed by Zeslene Mao AR in the High Court in Eng Yuen Yee v Grandfort Builders  SGHCR 1. The Ng Huat Seng case involves the demolition of a house, resulting in damage to an adjoining house. The Defendant house owner engaged a contractor to demolish his existing house and to build a new one. In the course of demolition, debris damaged the adjoining wall as well as part of the property of the claimant. The claimant, fearing the contractor may not be financially sound, decided to sue the Defendant house owner as well.
The claim against the Defendant house owner failed in the District Court, in the High Court and in the Court of Appeal. All three Courts were of the view that there was no vicarious liability for the tort committed by an independent contractor and that, on the facts of the case, there was no non-delegable duty.
As regards non-delegable duty, Menon CJ reiterated much of what was said by Chao JA in Tiong Aik. He found that the case did not come within any of the established categories; in particular, he did not think that demolition and rebuilding of a house constituted an ultra-hazardous activity.33 He also added comments about the two approaches as regards ultra-hazardous activities — the broader Honeywill approach of activities which are inherently or intrinsically dangerous and the narrower Biffa Waste idea of activities which are ‘exceptionally dangerous whatever precautions are taken’. Menon CJ expressed a preference for the Biffa Waste approach, although he phrased the concept somewhat differently as activities which are exceptionally dangerous ‘despite the exercise of reasonable care’ (at ). See further Low Kee Yang, Vicarious Liability, Non-delegable Duty and the Ng Huat Seng Decision, Singapore Law Gazette, December 2017 at 24-25.
The actual result in the Ng Huat Seng decision is even more controversial than in the Tiong Aik decision. Considering the tort law objectives of corrective justice and distributive justice (not to mention deterrence), it is difficult to see why the claimant, as an innocent house owner, is unable to claim against the Defendant house owner.34 See Low Kee Yang, ibid at 25–26.
Non-Delegable Duty and Vicarious Liability Compared
The origins of non-delegable duties differ starkly from that of vicarious liability. The doctrine of non-delegable duties stems from the law of nuisance and the duties that a landowner owed to his neighbour.35 Lord Phillips of Worth Matravers, “Vicarious Liability on the Move” (2015) 45 Hong Kong L J 29 at 39. The historical roots of vicarious liability are disputed,36 See eg T Baty, Vicarious Liability: A Short History of the Liability of Employers, Principals, Partners, Associations and Trade-Union Members, with a Chapter on the Laws of Scotland and Foreign States (Oxford University Press, 1916). but a prominent academic suggests that it arose from analogies drawn from Roman law:
“… it originated when a servant was a slave, whom the master was obliged to keep in order as he was his cattle, and it is then manifest why it should be otherwise if he employed an independent contractor; for the latter corresponds to a free man in ancient Rome, who had a separate legal existence, and was, therefore, responsible in propria persona”.37 O W Holmes Jr, “The Arrangements of the Law – Privity”, (1872) 7 American Law Review 46 at 62. This was further quoted in Sweeney v Boylan Nominees Pty Limited  HCA 19, at  cf D J Ibbetson, A historical Introduction to the Law of Obligations (Oxford University Press, 1999), pp. 181–2.
In any case, the law has developed, and it is generally accepted that the development of vicarious liability in its modern form is something of a “historical accident”,38 S Deakin, “Organisational Torts: Vicarious Liability versus Non-delegable Duty” (2018) 77(1) Cambridge LJ 15, at 17. See also, T Baty, Vicarious Liability: A Short History of the Liability of Employers, Principals, Partners, Associations and Trade-Union Members, with a Chapter on the Laws of Scotland and Foreign States (Oxford University Press, 1916) at p 7. shrouded in its high degree of “mysteriousness”.39 Harold J Laski, “The Basis of Vicarious Liability” (1916) Yale LJ 26(2) 105, at 107–108. Furthermore, the doctrine of non-delegable duties appears to have developed without any clear principles.40 G Williams, “Liability for Independent Contractors” (1956) Cambridge LJ 180 at 181. Perhaps then, an insistence of any principled modern-day distinction between non-delegable duties and vicarious liability due to its different historical origins is unfounded.
On the grounds of theoretical differences, judges have always maintained that vicarious liability and non-delegable duty are very separate and different doctrines or concepts.41 See eg MCST 3322 v Mer Vue Developments Pte Ltd and others  2 SLR 793, at . For non-delegable duties, the conventional analysis is that the principal is liable because of some personal duties owed to the victim.42 Peel and Goudkamp, Winfield and Jolowicz on Tort, at para 21–044. Lord Sumption in Woodland reminds us that there appears to be no “single theory to explain when or why non-delegable exists”,43 Lord Sumption in Woodland v STA  3 WLR 1227, at . but previous cases can be broadly put into two categories:
- Where the principal is liable to the victim due to the ultra-hazardous nature of the work; or
- When there is a personal positive duty to protect the class of victims against risk due to an antecedent relationship between the Defendant and the victim.44Ibid, at –.
Essentially, the doctrine of non-delegable duties generally focuses on the personal duty owed by the Defendant to the claimant,45 See eg Peel and Goudkamp, Winfield and Jolowicz on Tort, at para 21–004; Ng Huat Seng and another v Munib Mohammad Madni and another  2 SLR 1074, at . whereas vicarious liability focuses on the connection between the Defendant–tortfeasor relationship and the tortious act.
Furthermore, it has frequently been highlighted that the liability for non-delegable duty is primary — the employer is held to account on the basis of personal fault (the duty can be delegated; the responsibility cannot) — while vicarious liability is secondary; the employer is held to account on the basis that his employee has committed a tort.46Ng Huat Seng and another v Munib Mohammad Madni and another  2 SLR 1074, at .
The truth is that the two are similar and overlap substantially and one wonders if some cases decided on the basis of vicarious liability could not or, even, should not have been decided on the basis of non-delegable duty and vice-versa. For example, does Armes not look more like a non-delegable duty case and would the Woodland requirements not have been satisfied? Conversely, would Lord Phillips’ five features for vicarious liability not have been satisfied on the facts of Woodland? Lord Phillips noted extrajudicially that even the landmark case on vicarious liability of Lister v Hesley Hall could have been decided within the doctrine of non-delegable duty, as alluded to in Lord Hobhouse’s reasoning.47 Lord Phillips of Worth Matravers, “Vicarious Liability on the Move” (2015) 45 HKLJ 29 at 42. This delineation between these two doctrines has its fair share of critics,48 See eg G. Williams, “Liability for Independent Contractors”  CLJ 180. including the Australian Ipp Report of 2002 which argued that non-delegable duty is simply a technique for imposing vicarious liability.49 DA Ipp (Chairman), “Review of the Law of Negligence Report: Final Report” (Commonwealth of Australia, 2002) cf Robert Stevens, “Non-Delegable Duties and Vicarious Liability” in Emerging Issues in Tort Law (Jason Neyers, Erika Chamberlain and Stephen Pitel eds) (Hart Publishing, 2007) ch 13, at p 331. Indeed, the delineation between the two concepts is starting to look rather fragile.
Doctrinally speaking, the differences may still appear stark. The difference between these two doctrines have been described as “two routes round the triangle” which needs to be kept separate.50 JA Weir, A Casebook on Tort (Sweet and Maxwell, 10th Ed, 2004) at p 292. Indeed, an explanation of how a similar judgement can be arrived through a different doctrine may not be convincing to support the argument that both doctrines are doctrinally similar. This is, however, not the crux of the argument. What is important is whether such a distinction is even necessary and desirable, if justice can be effectively administered without requiring such confusing delineations. As a prominent academic argued, “the route we take round the triangle has little importance beyond preserving the doctrinal decencies”.51 Jonathan Morgan, “Liability for independent contractors in Contract and Tort: Duties to ensure that care is taken” (2015) 74(1) Cambridge LJ 109, at 122.
Tort law has several main objectives52 See eg G. Chan, The Law of Torts in Singapore (Academy Publishing, 2nd Ed, 2016), at pp 9–24. (victim compensation, corrective justice, distributive justice, deterrence, etc) which manifest in similar ways in both doctrines. It is not even the case that there exists only two (or three, including agency) sacrosanct ways of obtaining these goals in a principled manner — a quick comparison with other jurisdictions show functionally similar, yet formally dissimilar ways in obtaining practical and principled justice in like situations.53 P Giliker, “Vicarious Liability or Liability for the Acts of Others in Tort: A Comparative Perspective” (2011) 2 JETL 31. By adopting this macroscopic view of the law and the interaction with its broad objectives, it becomes apparent that the two doctrines are not that dissimilar after all. Doctrinal clarity and neatness are of great importance, but not when one loses sight of the forest for the trees.
These realities have been enunciated in various judgments. In Bazley v Curry,54Bazley v Curry  2 SCR 534. the Court held that the first and foremost concern at the heart of vicarious liability is to “provide a just and practical remedy for the harm”.55Ibid, at . In Cox v Ministry of Justice (CA),56Cox v Ministry of Justice  3 WLR 1036 Beatson LJ held that resorting to non-delegable duties and agency derives from “frustration at the limits of vicarious liability rather than any considered conceptual development of these doctrines”.57Ibid, at , quoting P Giliker, Vicarious Liability in Tort: A Comparative Perspective (Cambridge University Press, 2010), at p 144. Baroness Hale (as she then was) held in Woodland that the use of non-delegable duties was to “get round what was then perceived to be another problem with the law of vicarious liability”.58 Baroness Hale in Woodland v Swimming Teachers Association  AC 537, at . Furthermore, we have seen the Courts appearing to stretch these doctrines beyond their traditional paradigms to achieve these broad objectives (eg, Armes).59 See eg P Morgan, “Recasting Vicarious Liability” (2012) 71(3) Cambridge LJ 615. Against this backdrop, it is not unreasonable to suggest that these doctrines are on a course of convergence.60 See eg Aaron Yoong, “Challenges in the Evolution of the Doctrine of Non-delegable duty” (2017) 25 Tort L Rev 1, at 24, where the author suggests that, since the “prohibition” in vicarious liability have been “all but neutered”, there might be a convincing case for an integration of both doctrines.
In analysing derivative tort liability, judges have seldom referred to or resorted to the concept of agency. But leading texts on tort law appear more sanguine as to the applicability and utility of agency. Charlesworth and Percy on Negligence assert confidently:61Charlesworth and Percy on Negligence (C. Walton gen ed) (Sweet and Maxwell, 12th Ed, 2010), at para 3–161.
“[A] person who either authorises or procures another to commit a tort is equally responsible for the commission of that wrong, every bit as much as if he had committed it himself. In this way, if the principal gives the agent express or implied authority to commit some tortious act, the former will be held liable even though he may be the employer of an independent contractor.” [Emphasis added]
Similarly, Bowstead and Reynolds on Agency states:62 Peter Watts and F.M.B. Reynolds, Bowstead and Reynolds on Agency (Sweet and Maxwell, 21st Ed, 2018) at para 8-177.
“A principal is liable for the loss or injury caused by the tort of his agent, whether or not his servant, and if not his servant whether or not he is called an independent contractor… (a) if the wrong was specifically instigated, authorised or ratified by the principal.” [Emphasis added]
Clearly, agency provides an alternative basis for analysing and deciding derivative tort liability.
The classic legal definition of “agent” is one authorised to create contractual relations with third parties on behalf of the principal.63Ong Han Ling and another v American International Assurance Co Ltd and others  SGHC 327 at . However, the terminology of “principal/agent” has been used interchangeably with “master/servant”64 Peter Watts and F.M.B. Reynolds, Bowstead and Reynolds on Agency (Sweet and Maxwell, 21st Ed, 2018) at para 8–176. See also Tan Cheng-Han, “Authority, Vicarious Liability and Misrepresentation” (2012) SJLS 92 at p 95. in tort, which is not based on the strict legal definition of agency.65 Examples include that of cases where the owner of a vehicle gets a friend to drive it for him/her. See eg Clerk and Lindsell on Torts (M Jones Gen Ed) (Sweet and Maxwell, 22nd Ed, 2018) at para 6–84. See also Lord Wilberforce in Morgans v Launchbury  1 AC at 135, that: Some have noted that the resort to agency in tort is “uncertain and unpredictable”, and seems a “conclusion rather than a characteristic which triggers vicarious liability”.66 P Morgan, “Recasting Vicarious Liability” (2012) 71(3) Cambridge LJ 615 at 628. It was said in Ong Han Ling v AIA (Ong Han Ling),67  SGHC 327. that “the concept of an agent, as it has been used in case law, is more amorphous.”68Ong Han Ling and another v American International Assurance Co Ltd and others  SGHC 327 at .
In the recent Singapore decision Ong Han Ling, the High Court considered the liability of an insurance company for a fraud committed by one of its insurance agents. The claim proceeded on several alternative grounds, including vicarious liability and agency.
Belinda Ang J acknowledged that it was possible for a principal to be held liable for the agent’s tort on the application of agency principles but gave several cautions69 See paragraphs 207–214. – that authority analysis70 The Armagas approach, the learned judge noted at  — that an employer’s liability for an employee’s fraud is determined using agency principles was rejected by SCA in Skandinaviska v Asia Pacific Breweries  SGCA 22. is ‘not simply another way in which vicarious liability can be determined’, that concepts in vicarious liability are not easily transposed into the agency context and that ‘the principles of agency were not developed for tort law’.71 At .
The Salmond Test, Vicarious Liability and Agency
The previous position of the law on vicarious liability relies on the Salmond test in determining whether a tortious act was done in the course of employment, which appears to draw inspiration from agency principles. It provides that the master is not responsible for a wrongful act one by his servant unless it is either:
- a wrongful act authorised by the master (Salmond (a)), or
- a wrongful and unauthorised mode of doing some act authorised by the master (Salmond (b))72 J. W. Salmond, The Law of Torts (London: Stevens and Haynes, 1907) at 83.
However, there are two pertinent issues with the Salmond test. First, in Salmond (a) situations, the master should already be primarily liable based on agency principles. There is therefore no need to resort to vicarious liability.73 J. Steele, Tort Law: Text, Cases, and Materials (Oxford University Press, 4th Ed, 2017) at p 590. Second, this test might not deliver principled justice.74 Lord Steyn in Lister v Hesley Hall  1 AC at . The case of Lister v Hesley Hall, which developed the law from the Salmond test to the “close connection” test illustrates this — one would be hard-pressed to be able to accommodate Lister within the Salmond test as the Courts would have to rationalise sexual abuse as modes of doing authorised acts.
The Salmond test was eventually discarded in favour of the Lister close connection test. However, Armagas Ltd v Mundogas SA (The Ocean Frost) (Armagas)75  1 AC 717 which pre-dates Lister, continued to exert considerable influence and uncertainty as it used agency principles to determine the “course of employment” of an employee in the tort of deceit.76 It is noted that although the Salmond test was quoted by Stephenson LJ at 763 in the Court of Appeal, it was not explicitly quoted in the House of Lords judgement. In Armagas, the Defendant’s Vice-President (M) accepted a bribe by a broker to represent that he had specific authority to enter into a charterparty on behalf of the Defendant. This was done while the Plaintiff’s officers were aware that M had no general authority to do so.
In the House of Lords, Lord Keith (which whom the other Law Lords agreed) first drew a distinction between intentional torts and other torts.77Armagas Ltd v Mundogas SA (The Ocean Frost) (Armagas)  1 AC 717, at 779–780. Subsequently, the Court found that the Defendant was not vicariously liable because M had no actual authority, and the Defendant had not made any representation that M was authorised to enter into the charterparty.78Ibid, at 783. This judgment appears to intertwine ‘course of employment’ and ‘actual/apparent authority’ in vicarious liability.79 See M Lunney, D Nolan and K Oliphant, Tort Law: Text and Materials (Oxford University Press, 6th Ed, 2017) at pp 869–870.
While it is arguable that this is still relevant in English law as far as deceit is concerned,80 P Giliker, Vicarious Liability in Tort: A Comparative Perspective (Cambridge University Press, 2010), pp 175–181. See also, S Deakin, A Johnston and B Markesinis, Markesinis and Deakin’s Tort Law (Oxford University Press, 7th Ed, 2012), at pp 576-577. See also Frederick and Ors v Positive Solutions  EWCA Civ 431, at , where the Court refused to make any judicial pronouncements regarding the relevance of agency principles in deceit.Ong Han Ling clarified the law as held in Skandinaviska v Asia Pacific Breweries as one which had unified the test for “course of employment” – even when determining an employer’s liability for an employee’s fraud, the close connection test should be applied:
“…this development (the shift towards the close connection test in Skandinaviska) allows us to cleanly separate a principal’s primary liability on agency principles and an employer’s secondary or vicarious liability on the close connection test”. 81Ong Han Ling and another v American International Assurance Co Ltd and others  SGHC 327 at .
As such, it appears that the law of vicarious liability has diverged from the law of agency in Singapore.
Vicarious liability, in certain ways, appears to be wider than agency. Lord Nicolls in Dubai Aluminium v Salaam82Dubai Aluminium Co Ltd v Salaam  2 AC 366. explained how liability for agents should not be “strictly confined to acts done with the employer’s authority” because employees may occasionally be careless, exceed their authority or even defy express instructions but the victim should still be entitled to a remedy against the employer.83Ibid, at . Again, the case of Lister shows how vicarious liability can justifiably produce fair results, while a rationalisation in the law of agency might not be so. On the other hand, agency is sometimes wider than vicarious liability as there is no need to distinguish between employees and non-employees.84Rohini d/o Balasubramaniam v Yeow Khim Whye Kelvin and another  SGHC 149 at .
The concept of agency in tort has been described as both “narrower and wider than that of vicarious liability”.85 M. Lunney, D. Nolan and K. Oliphant, Tort Law: Text and Materials (Oxford University Press, 6th Ed, 2017) at p 869. It is true that both can be used to produce similar results,86