Page1

Law Quarterly Review

2018

Case Comment

Taking two bites at the cherry: vicarious liability and non-

delegable duty

David Tan

Subject: Negligence . Other related subjects: Construction law.

Keywords: Contracting out; Delegation; Duty of care; Independent contractors;

Singapore; Vicarious liability

Cases:

Ng Huat Seng v Munib Mohammad Madni [2017] SGCA 58 (CA (Sing))

Various Claimants v Institute of the Brothers of the Christian Schools [2012] UKSC 56;
[2013] 2 A.C. 1 (SC)

Woodland v Swimming Teachers Association [2013] UKSC 66; [2014] A.C. 537 (SC)

Spandeck Engineering (S) Pte Ltd v Defence Science and Technology Agency [2007]
SCGA 37 (CA (Sing))

*L.Q.R. 193  Increasingly, when an independent contractor commits a tort, the

claimant can attempt to exact compensation from a third-party defendant on the basis of
vicarious liability by arguing that the tortfeasor was in a relationship akin to
employment, or on the basis of a personal non-delegable duty owed to the tortfeasor.

A non-delegable duty is a curious creature of the law of negligence, created out of a

need to fill the lacuna in vicarious liability, rendering third parties liable for the
carelessness of others, and imposing on the defendant a duty that extended beyond just
being careful, to procuring and ensuring the careful performance of work delegated to
others. It is frequently invoked to prevent an employer from circumventing the principle
of vicarious liability by outsourcing functions to independent contractors. Its tortured
conception was well-chronicled by the UKSC in Woodland v Swimming Teachers
Association [2013] UKSC 66; [2014] A.C. 537, and the test articulated by Lord Sumption
was applied in a unanimous judgment of the Singapore Court of Appeal in Management
Corporation Strata Title Plan No 3322 v Tiong Aik Construction Pte Ltd [2016] 4 S.L.R
521. Essentially the principle of non-delegable duty operates hand-in-hand with vicarious
liability, albeit on different theoretical foundations, to fasten liability on an employer for
the tortious acts of employees or independent contractors. The expanding scope of
vicarious liability to meet the changes in the structure of work organisations of modern
industry has seen a concerted movement away from the traditional justifications of
effective compensation and deterrence towards the enterprise risk argument as the
primary policy consideration in decisions such as Armes v Nottinghamshire CC [2017]
UKSC 60; [2017] 3 W.L.R. 1000; Cox v Ministry of Justice [2016] UKSC 10; [2016] A.C.
    Page2

660; Various Claimants v Catholic Child Welfare Society [2012] UKSC 56; [2013] 2 A.C.
1; JGE v English Province of Our Lady of Charity and Trustees of the Portsmouth Roman
Catholic Diocesan Trust [2012] EWCA Civ 938; [2013] Q.B. 722.

In September 2017, in a rare five-member full bench decision of the Singapore Court of
Appeal in Ng Huat Seng v Munib Mohammad Madni [2017] SGCA 58, the unanimous
judgment delivered by Sundaresh Menon C.J. considered the recent English judicial
pronouncements on the law of vicarious liability and non-delegable duties, and affirmed
the application of CCWS and Woodland in Singapore law. In the last decade, for
negligence cases, the highest appellate court in Singapore has sat on only two occasions
as a five-member bench: one dealing with the application of the Montgomery test for
medical negligence in Singapore (Hii Chii Kok v Ooi Peng Jin London Lucien [2017] 2
S.L.R. 492) and the other on the recognition of loss of genetic affinity as recoverable
damage (ACB v Thomson Medical Pte Ltd [2017] SGCA 20). This decision is significant
on two counts: the application of recent English law on both vicarious liability and non-
delegable duties.

In Ng Huat Seng, the parties own neighbouring properties were located along a slope.
The appellants’ house was the lower property: the ground level of their house was 2
metres lower than the ground level of the respondents’ house, which lay further up the
slope. The properties were separated by a boundary wall between *L.Q.R. 194  the two
plots. The respondents purchased their property in 2010 intending to demolish the
existing house there and build another in its place. They appointed Esthetix Design as
the main contractor on a turnkey basis to carry out the required demolition, design and
reconstruction works. The main contractor was responsible for engaging other
subcontractors and applying for necessary approvals to complete the works. On 5
September 2011, while demolition works were taking place on the respondents’
property, some debris from the respondents’ property fell on the boundary wall and
damaged it. Some of the debris also ricocheted off the boundary wall and caused
damage to the appellants’ property, including damage to windowpanes and air-
conditioning condensing units. In 2012, the appellants commenced proceedings in
negligence, and argued inter alia that the respondents were vicariously liable for the
negligence of Esthetix, and alternatively, if the independent contractor defence applied,
the demolition works were ultra-hazardous activities and respondents therefore owed a
personal non-delegable duty to ensure that reasonable care was taken in the
performance of the demolition works.

When examining whether vicarious liability should be imposed on party A for the acts of
party B, courts follow a two-stage inquiry. Stage 1 involves an evaluation of the
relationship between A and B—whether they were in an actual or deemed employer-
employee relationship. Stage 2 considers whether the tortious act of B was within the
scope of employment, and it is widely accepted that a "close connection" test may be
applied. On the Stage 1 issue, Menon C.J. held that:

"while we accept that the Christian Brothers case and Cox recognise that the doctrine of
vicarious liability can be applied outside the strict confines of an employment
relationship, it becomes evident …that their essential contribution was to fine-tune the
existing framework underlying the doctrine so as to accommodate the more diverse
range of relationships which might be encountered in today’s context" ([2017] SGCA 58
    Page3

at [63]).

It was noted that at its core, these relationships must be sufficiently close relationships
"akin to employment", and possess the same fundamental qualities as those which
inhere in employer-employee relationships. The court emphasised that these cases do
not suggest that "vicarious liability can be imposed on a defendant for the lapses
committed by a person who was engaged as an independent contractor" (at [64]). It
simply would not be fair, just and reasonable to hold a defendant liable for the acts by
an independent contractor, who, by definition, is not furthering the defendant’s
enterprise, but engaged in his or her own enterprise.

According to Lord Phillips in Catholic Child Welfare Society, it would be "fair, just and
reasonable" to impose vicarious liability if the relevant criteria were satisfied at Stages 1
and 2, and that:

"Where the criteria are satisfied the policy reasons for imposing vicarious liability should
apply …[but] the policy reasons are not the same as the criteria. One cannot, however,
consider the one without the other and the two sometimes overlap" ([2013] 2 A.C. 1 at
[34]).

Lord Phillips had focused on the finding of a "strong causative link" in establishing a
close connection and had cautioned that the creation of risk was not enough, of *L.Q.R.
195  itself, to give rise to vicarious liability. Menon C.J. concurred, and emphasised that
in addition to the special relationship between the tortfeasor and the defendant:

"the defendant must in some way have created or significantly enhanced, by virtue of
that relationship, the very risk that in fact materialised in order to be held vicariously
liable for the tortfeasor’s wrongful acts" ([2017] SGCA 58 at [66]).

On the facts of Ng Huat Seng, Esthetix Design was clearly an independent contractor
and could not be brought within the ambit of vicarious liability. The court concluded that
an independent contractor relationship will generally exclude the application of the
doctrine and that the defendant must, pursuant to its relationship with the tortfeasor,
either have created or significantly increased the risk of harm that ensued. This
enterprise risk approach to vicarious liability in Ng Huat Seng was earlier articulated by
the Singapore Court of Appeal in Skandinaviska Enskilda Banken AB (Publ), Singapore
Branch v Asia Pacific Breweries (S) Pte Ltd [2011] 3 S.L.R. 540. This "Skandinaviska risk
paradigm"—that the person who runs an enterprise, and who obtains a benefit from
appointing other individuals to conduct activities connected to the enterprise, should
bear the external risks that emanate from this enterprise—was argued to be applicable
to both Stages 1 and 2, and it finds support in the bulk of case law despite courts
generally being reluctant to refer more explicitly to risks for fear of slipping into the
domain of law and economics (see Tan (2015) 27 S.Ac.L.J. 822 at 841–842). The
majority in Armes did refer to this enterprise risk rationale as "the most influential idea
in modern times" when finding a local authority vicariously liable for physical and sexual
abuse committed by foster parents on the children placed in their care by the local
authority ([2017] 3 W.L.R. 1000 at [67]). The High Court of Australia, however, remains
cautious about following the developments in the UK and Canada (see Prince Alfred
College Incorporated v ADC [2016] HCA 37 at [45]–[46], [58] and [130]–[131]).
    Page4

In contrast, the non-delegable duty issue was more complicated and problematic. The
court in Ng Huat Seng observed that a cardinal rule in the tort of negligence was that a
person would generally be held liable only for their own carelessness, and not for the
carelessness of others; however there were two "derogations" from the fault-based
principle: vicarious liability and non-delegable duty. Menon C.J. noted that the doctrine
of non-delegable duties imposed on a defendant a duty that "extend[ed] beyond being
careful, to procuring the careful performance of work delegated to others" ([2017] SGCA
58 at [80], citing Woodland v Swimming Teachers Association [2014] A.C. 537 at [5]).
In contrast to vicarious liability, which imposes secondary liability on a party based on its
relationship with the tortfeasor, a party subject to a non-delegable duty would be held
personally liable in tort even if they had non-negligently delegated the performance of
certain tasks to an independent contractor who had then been negligent in performing
those tasks. The court affirmed its earlier decision in Tiong Aik which applied a two-stage
test for determining whether a non-delegable duty would arise on a given set of facts,
i.e., the claimant would have to satisfy the threshold requirement in the first stage that:
(a) either their case fell within one of the established or recognised categories of non-
delegable duties; or (b) it possessed all of the five defining *L.Q.R. 196  features
outlined by Lord Sumption in Woodland. Then at the second stage, the court would
additionally take into account the fairness and reasonableness of imposing a non-
delegable duty of care on the defendant in the particular circumstances of the case, as
well as the relevant policy considerations in the local context of Singapore. Menon C.J.
emphasised that non-delegable duties should remain "exceptional" because:

"in many instances, it would be unrealistic or even impossible for the duty-bearer to fulfil
the non-delegable duty in question, and this could lead to very artificial outcomes"
([2017] SGCA at [85]).

Noting that there are two contrasting judicial approaches to the ambit of the doctrine of
ultra-hazardous acts in Honeywill and Stein Ltd v Larkin Brothers (London’s Commercial
Photographers) Ltd [1934] 1 K.B. 191 and Biffa Waste Services Ltd v Maschinenfabrik
Ernst Hese GmbH [2008] EWCA Civ 1257; [2009] Q.B. 725, the court thought it was not
necessary to come to a firm conclusion as to whether it should be recognised as part of
Singapore law. Nevertheless, Menon C.J. acknowledged that the doctrine of ultra-
hazardous acts imposes an extremely stringent duty on the duty-bearer, and cautioned
that:

"it should only be applied in very limited circumstances, namely, where an activity poses
a material risk of causing exceptionally serious harm to others even if it is carried out
with reasonable care" (at [96]).

It is the persistence of such a risk despite the exercise of reasonable care which makes
it fair, just and reasonable to hold the defendant personally liable for any negligence in
the performance of the activity even if the negligent conduct was on the part of an
independent contractor engaged by the defendant. Applying these principles to the facts
of Ng Huat Seng, the court held it was evident that the demolition works in this case
could not reasonably be said to be ultra-hazardous.

The court then observed that in the established categories of non-delegable duty, such
as hospitals with regard to patients under their care and schools in respect of their
    Page5

pupils’ physical safety:

"one common thread which might be said to run through these categories is a
relationship between the defendant and the claimant under which the claimant has a
‘special dependence’ on or ‘particular vulnerability’ in relation to the defendant";

and the duty arises by virtue of the defendant "undertaking or assuming some form of
responsibility to the claimant" (both at [100]). On the facts of the present case, the
respondents could not be said to fall into these categories, and none of the five defining
Woodland features were present to impute to the respondents a positive duty to protect
the appellants from harm arising from the demolition works.

The simple question of "Who, then, in law, is my neighbour?" has confounded courts,
academics and lawyers for years (Donoghue v Stevenson [1932] A.C. 562 at 580). In
the Commonwealth common law jurisdictions, the highest appellate courts have
struggled with defining a clear test that will determine when one is a neighbour who
owes a duty of care to another. It has been 10 years since the Singapore Court of Appeal
handed down *L.Q.R. 197  Spandeck Engineering (S) Pte Ltd v Defence Science &
Technology Agency [2007] 4 S.L.R.(R) 100. Spandeck undoubtedly broke new ground by
unifying inconsistent case law into a single, universal test "to determine the imposition of
a duty of care in all claims arising out of negligence, irrespective of the type of the
damages claimed" (see at [71]). The test requires a satisfaction of a threshold
requirement of factual foreseeability of damage followed by a two-stage inquiry of
proximity and public policy considerations. The Singapore Court of Appeal has since
adhered to its bold claim of universality, applying the Spandeck test to physical injury,
psychiatric harm and pure economic loss scenarios. In Anwar Patrick Adrian v Ng Chong
& Hue LLC [2014] SGCA 34, the court accepted that five factors—assumption of
responsibility, reliance, control, vulnerability and knowledge—could be relevant to
proximity considerations in finding a duty of care. These proximity factors are similar to
the Woodland features pertinent to determining whether a non-delegable duty should be
imposed. In fact, the two-stage Tiong Aik framework resembles the Spandeck test.
Unfortunately in Ng Huat Seng, and the earlier decision of Tiong Aik, the court neither
referred to Spandeck as a universal test for all claims arising out of negligence nor
attempted to discuss how a non-delegable duty is connected, if at all, to a normal duty
of care. It has been suggested that a non-delegable duty in Singapore could be imposed
when all five proximity factors were present and that positive policy considerations
marshalled in favour of such an imposition (Tan and Goh (2013) 25 S.Ac.L.J. 510).

Finally, the issue of breach of a non-delegable duty remains unclear. Can a defendant
ever discharge a non-delegable duty even when harm ensues? The court in Ng Huat
Seng, in relation to the doctrine of ultra-hazardous activities, commented that "the basis
for liability remains negligence", and if the principal takes reasonable care to ensure that
the party performing the activity does so in a non-negligent manner and the latter does
indeed perform the activity non-negligently, but some harm nonetheless ensues, there
will be no liability on the basis of negligence on the part of the party performing the
activity, nor will there be liability for breach of a non-delegable duty on the principal’s
part ([2017] SGCA 58 at [107]). However, generally in a non-delegable duty context,
the defendant is said to have assumed responsibility for the exercise of due care by
anyone to whom performance has been delegated. In Armes, the majority noted that a
    Page6

non-delegable duty imports "a higher standard of care than an ordinary duty of care"
([2017] 3 W.L.R. 1000 at [31]). In Woodland, Lord Sumption recognised that non-
delegable duties of care are inconsistent with the fault-based principles on which the law
of negligence is based, and that "the main problem about this area of the law is to
prevent the exception from eating up the rule" ([2014] A.C. 537 at [22]). His Lordship
cautioned that the principle is not one of an "open-ended liability" and courts should be
sensitive about imposing unreasonable financial burdens on those providing critical
public services, and that a non-delegable duty should be imputed to schools only so far
as it would be fair, just and reasonable to do so (at [25]). Baroness Hale echoed this
concern, noting that the courts have not considered both bases of liability in previous
cases concerning harm suffered by school pupils and that they are conceptually quite
different (at [33]). Notwithstanding, it appears that a non-delegable duty would have
been breached by a defendant regardless of the precautions taken if the tortfeasor was
ultimately negligent because the duty *L.Q.R. 198  was to ensure that whoever
performed the duty he owed to the claimant did so without fault.

In Ng Huat Seng, the court did not venture into a discussion of whether this strict
liability approach to both vicarious liability and non-delegable duties—that the defendant
would be liable for the acts of a tortfeasor without the need for the claimant to prove
fault on the part of a defendant—was desirable, fair, just or reasonable. When one
accepts that an educational authority or school owes a non-delegable duty for the pupils’
physical safety as an established category, does the age of the pupil—and
correspondingly the degree of control and vulnerability—make a difference? Is it fair,
just and reasonable to hold a university or secondary school to the high standard of care
commensurate with a non-delegable duty in the same manner we would readily accept
for children in primary schools and kindergartens? To what extent should a school assign
its academic educators to supervise competently appointed swimming instructors, rugby
coaches and gymnastic teachers—who might be independent contractors possessing the
requisite special skills for the specific functions?

Perhaps many of us believe that if an enterprise faces both the prospects of vicarious
liability and non-delegable duty, it will be incentivised to locate and discipline potentially
errant actors, and even be able to reduce tort costs through screening measures,
training programs and closer monitoring. It would not be able to hide behind legal
concepts like "control", "independent contractors" or "in the course of employment" if it
has indeed introduced risks into the community. Nonetheless, in the context of physical
safety in educational institutions, sexual abuse in religious establishments and
organisational liability in a healthcare system, we need to ensure that these twin legal
principles operating in tandem ultimately strike an appropriate balance between public
concern over protection of the young and the vulnerable and the just imposition of a
financial burden on indispensable enterprises which confer significant benefits on society.

David Tan

National University of Singapore

L.Q.R. 2018, 134(Apr), 193-198

© 2018 Sweet & Maxwell and its Contributors

    Page7