LLAW2017 Respondent's Bundle

IN THE
LEGAL RESEARCH AND WRITING COURT OF FINAL APPEAL

––––––––––
BETWEEN
Northampton Recruitment Ltd Appellant
and
Clive Bellman Respondent

(a protected party by his litigation friend Susan Thomas)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
INDEX OF THE RESPONDENT’s BUNDLE
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(For Hearing before the Legal Research and Writing Court of Final Appeal
on 22nd April 2024 at 6:30 p.m.)
No. Page No.
1 Skeleton Submission of the Respondent 2–7
Hong Kong Materials
2 Ming An Insurance Co (HK) Ltd v. Ritz-Carlton Ltd [2002] HKLRD 844 8–27
3 Yeung Mei Hoi v. Tam Cheuk Shing & Anor [2015] 2 HKLRD 483 28–39
English Materials
4 Staton v National Coal Board [1957] 2 All ER 667 40–45
5 Lister & Ors v Hesley Hall Ltd [2002] 1 AC 215 46–81
6 Mohamud v. W M Morrison Supermarkets PLC [2016] AC 677 82–101
7 Nancollas v Insurance Officer [1985] 1 All ER 833 102–109
8 Dubai Aluminium Co. Ltd v Salaam [2002] 3 WLR 1913 110–154
Various Claimants (FC) v Catholic Child Welfare Society and others 155–181
9
[2012] UKSC 56
1
IN THE
LEGAL RESEARCH AND WRITING COURT OF FINAL APPEAL
––––––––––
BETWEEN
Northampton Recruitment Ltd Appellant
and
Clive Bellman Respondent

(a protected party by his litigation friend Susan Thomas)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
SKELETON ARGUMENT OF THE RESPONDENT
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
(For Hearing before the Legal Research and Writing Court of Final Appeal
on 22nd April 2024 at 6:30 p.m.)
[R#1] = List of Authorities of the Respondent, Tab 1
INTRODUCTION
1. This is an appeal against the decision of the Court of Appeal (“CA”) ruling that
Northampton Recruitment Ltd (“NR”) was vicariously liable for the assault committed by
its managing director, Mr Major (“Major”) towards its sales manager, Clive Bellman
(“Bellman”).
2. It is submitted that the appeal should be dismissed.
FACTS AND PROCEDURAL BACKGROUND
3. Major organised a Christmas party on behalf of NR. After the party, Major proceeded to
bring some of the guests and employees to a hotel for drinks.
4. In the drinking session, work-related discussions came up. Bellman mentioned an

appointment of a new employee and annoyed Major. Major summoned the remaining
employees and lectured them on his managerial authority. Upon a challenge by Bellman
2
regarding the employment, Major physically assaulted Bellman and Bellman suffered
severe injuries.
5. The High Court of Justice held that NR was not vicariously liable as Major had acted
outside the scope of his employment when he assaulted Bellman. CA found the contrary as
it found that Major’s remit was wide and held the sufficient connection between wrongful
conduct and the employment exist.
GROUNDS OF APPEAL
6. The proper legal test for determining vicarious liability in Hong Kong is the close
connection test (“the test”) established in Ming An Insurance Co (HK) Ltd v. Ritz-Carlton
Ltd [2002] HKLRD 844 [25] [R#2]. The test considers two matters in this case: (i) whether
it is established at the time of the incident that Major was acting within the scope of his
employment and (ii) whether there is a sufficiently close connection between the Major’s
actions and his employment to make it fair and just to hold NR vicariously liable.
Ground 1: Major was not acting within his functions or field of activities as managing director
at the relevant time.
(i) Major was responsible for the arrangement on the day of the incident.
7. Major took up his managerial responsibilities to arrange and fund the party. Subsequently
in the drinking session, Major arranged taxis to hotels and the drinks provided were to be
paid and orchestrated by Major on behalf of NR.
8. As affirmed in CA in the judgement [26], the drinking session was not just an impromptu
drinks party between work colleagues which might happen on any night of the week after
work, but on the same evening as the work event. This indicates that Major was not
participating merely as a fellow reveller or guest of the events, but as a representative of
NR and host.
(ii) Major was performing his ordinary duty as a managing director.
3
9. An employee is in the course of employment if he is carrying out his ordinary duties or
doing something reasonably incidental to that duty, as ruled in Staton v National Coal
Board [1957] 2 All ER 667 [672C] [R#4]. The assault occurred during a lecture regarding
NR’s business by Major, when he asserted his authority over his subordinate. It falls within
the scope of his employment while the time and location may not be decisive factors, as
ruled in Lister & Ors v Hesley Hall Ltd [2002] 1 AC 215 [44] [R#5].
10. In determining the nature of Major’s job, the Court shall consider the reference to Mohamud
v. W M Morrison Supermarkets PLC [2016] AC 677 [44] [R#6] as suggested in CA. The
question is what functions or “field of activities” have been entrusted by the employer to
the employee.
11. It is necessary to adopt a broad perspective of the employment in Ming An [39]. What Major
was authorised to do was not specified, but “the court should not dissect the servant’s task
into component activities”, it is unreasonable to not put Major under the responsibility of
facilitating effective communication within NR. It should be broadly defined that Major’s
job includes managing his subordinates in facilitating the whole company’s operation.
Hence, the nature of Major’s job shall incorporate communication with his subordinates
and the management of the employees.
12. It has to be then considered whether the act of Major reacting to his subordinate’s discontent
on his managerial decision is authorised by NR. It is noted in Nancollas v Insurance Officer
[1985] 1 All ER 833 [835 b–d] [R#7] that the foundation of the employment relationship
is no longer so much based on orders and instructions as on requests and information and
contractual rights.
13. The nature of an employee’s job determines the range of conduct that can be assigned by
the employer. Hence, it shall be considered whether Major had the authority to listen,
persuade or convince his subordinates’ challenges on his own managerial decisions.
Despite the flat management structure and how small-scale NR is, there is still a clear
hierarchy of status within the company, judging not only by their difference in title, but
also by Major’s ability to summon in all the employees of the company and give them a
lecture. When the tortious act occurred, Major was acting within his fields of activities as
managing director.
4
(iii) Major was acting in the interest of NR.
14. Additionally, it was accepted in Mohamud [9] that the test should be extended to a point
that covers employees acting as a representative of the employer at the time the tort was
committed. If an employee performs a duty for a different purpose or in an unfavourable
manner, but it is in the employer’s interest, it is considered to be within the scope of their
employment (Ming An [36–42]). The lecture regarding NR’s business was not personal,
and therefore Major was acting within his functions or field of activities as managing
director at the relevant time.
15. Bellman’s challenge to Major’s lecture relating to managerial decisions may be

unsatisfactory to the latter, that the assault could be said to be disciplinary, arising from the
need for employees’ obedience to the authority in a workplace.
16. It was further ruled in Dubai Aluminium Co. Ltd v Salaam [2002] 3 WLR 1913 [121] [R#8]
that vicarious liability is not necessarily defeated if the employee acted for his own benefit.
Ground 2: There was insufficient connection between the position in which Major was
employed and his wrongful conduct.
17. With reference to Yeung Mei Hoi v. Tam Cheuk Shing & Anor [2015] 2 HKLRD 483 [5.1–
5.6] [R#3], it is submitted that the act of Major misusing his authority as the managing
director could be a sufficiently close connection to his employment.
(i) Major oversaw all aspects of NR’s undertaking.
18. It is not disputed that Major was the directing mind of NR and was authorised to act on
behalf of NR with a wide remit. Major could control his own methods of work, assign
responsibilities and supervise the employees. While he had responsibility for all
management decisions including the maintenance of discipline, he would have seen the
maintenance of his managerial authority as a central part of his role.
5
19. In general, Major did not have set hours and had authority to control his own methods of
work. It is recognised that much of what Major did during the average working day was
directly or indirectly connected to NR.
(ii) Major’s conduct in the lecture was relevant to his employment.
20. In addition to the nature of the employment aforementioned in ground 1, the nature of a
drinking session quickly shifted its focus to discussions about NR’s business amongst the
employees. The closed conversation remained heavily work-related.
21. The fact that Major summoned his employees for a lecture was consistent with his role as
the managing director. It demonstrates that he purportedly used his position and managerial
authority. The prolonged discussion about NR’s business addressed by Major and the
challenge by Bellman was related to another employee’s competence in NR. Beyond the
challenge, Major defended himself that he ‘make the decisions in this company’ and ‘it’s
my business’.
22. In the entire period, there was no change in relationship between Major and Bellman, with
the former’s position of seniority and supervisory role persisted. Major misused the position
entrusted to him with the use of physical violence and injured Bellman, and thus NR should
be held liable under the principle of social justice stated in Mohamud [45].
23. Maintaining managerial authority is an essential part of his role. The powers delegated to
him by the nature of his employment indicated that his assault at the event was consequent
to his employment.
24. In addition, it is evident that the drinking session arranged by Major and authorised by NR
as it made the payment. With reference to Various Claimants (FC) v Catholic Child Welfare
Society and others [2012] UKSC 56 [62–77] [R#9], the course of employment and the
increase of risk of the assault is sufficient to pass the close connection test.
25. The Court shall find a close connection between the assault and Major’s employment, that
NR should be deemed vicariously liable.
6
CONCLUSION
26. It is submitted that the Court should dismiss the appeal on both grounds.
Dated this 8th day of April 2024.
CHEN TSZ YIU

LEUNG HO LUN
WONG TIN LOK
Counsels for the Respondent
7
[2003] 1 HKC Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd 225
A MING AN INSURANCE CO (HK) LTD v RITZ-CARLTON LTD

COURT OF FINAL APPEAL
FINAL APPEAL (CIVIL) NO 4 OF 2002
BOKHARY AND CHAN PJJ, LITTON, MORTIMER AND LORD COOKE OF
THORNDON NPJJ
B 17-18 OCTOBER, 4 DECEMBER 2002
Tort – Vicarious liability – Employer’s liability for unauthorised act of

employee – Driver of hotel limousine found liable in negligence for injuring
two pedestrians but his employer held not to be vicariously liable – Whether
unauthorised act of driver in driving limousine at the material time so
C
‘closely connected’ with his employment that it was fair and just to hold
employer liable
Employment – Vicarious liability – Employer’s liability for unauthorised act

of employee – Driver of hotel limousine found liable in negligence for
D injuring two pedestrians but his employer held not to be vicariously liable –
Whether unauthorised act of driver in driving limousine at the material time
so ‘closely connected’ with his employment that it was fair and just to hold
employer liable
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On the evening of 9 March 1998, a doorman employed by a hotel operated by
the respondent seriously injured two pedestrians when he lost control of the
limousine he was driving along Queensway in the direction of Wanchai. The
limousine was hired by the hotel from a limousine services company in order to
H provide chauffeur-driven services to its hotel guests. In the absence of the
chauffeur the doorman was required by the hotel on occasion to move the
limousine and this sometimes involved driving it along Queensway. The
forecourt staff of the hotel developed a practice of buying food elsewhere. One of
their number would then go to collect it, sometimes persuading a limousine
chauffeur to drive him to the location and back. On the night of the accident a
I bell-boy was going out to collect food for the hotel’s forecourt staff and as the
limousine’s chauffeur had gone off-duty and left the keys with the doorman, the
doorman drove the bell-boy in the limousine to collect the food which use was
8
226 Hong Kong Cases [2003] 1 HKC
held to be an unauthorised purpose. It was on their way from the hotel forecourt A
to collect the food that the accident occurred. At first instance and before the
Court of Appeal (see Tse Ngan Heung & Anor v Ritz-Carlton Ltd & Ors [2002] 1
HKC 146) the hotel was held not to be vicariously liable for the doorman’s
negligence on the grounds that the doorman, in driving the limousine to collect
food, had been acting beyond the scope of his employment. The appellant as the
‘insurer concerned’ under the Motor Insurers Scheme appealed on one point B
only, relying on the new test of ‘close connection’ for vicarious liability in Lister
v Hesley Hall Ltd [2002] 1 AC 215 and argued that the practice of the employees
concerned in collecting food from outside the hotel had a sufficiently close
connection in the business of the hotel such that in the case of the doorman’s tort,
it was also closely connected with his employment that it would be fair and just C
to hold the respondent vicariously liable.
Held, allowing the appeal unanimously:

per Bokhary PJ (Chan PJ, Litton, Mortimer and Lord Cooke of Thorndon
NPJJ agreeing):
(1) The Salmond test for vicarious liability was that employers were liable for D
the torts committed by their employees in the course of their employment. An
employee’s tort was deemed to have been committed in the course of his
employment if it was either (a) something authorised by his employer or (b) an
unauthorised mode of doing something authorised by his employer. Under the
‘unauthorised mode’ limb of the test the question to be asked was whether the E
employee’s unauthorised tortious act was so closely connected with his
employment that it would be fair and just to hold his employer vicariously liable.
In determining whether or not there was a ‘close connection’ the court must
openly confront the question of whether liability should lie against the employer,
rather than obscuring the decision beneath semantic discussions of ‘scope of
employment’ and ‘mode of conduct’. Lister v Hesley Hall Ltd [2002] 1 AC 215 F
applied. Bazley v Curry (1999) 174 DLR (4th) 45 and Jacobi v Griffiths (1999)
174 DLR (4th) 71 considered. Trotman v North Yorkshire County Council [1999]
LGR 584 criticised (at 232B-235D).
(2) The ‘close connection’ test in Lister v Hesley Hall was a basic criterion
for determining vicarious liability in respect of all torts committed by an
employee during an unauthorised course of conduct whether intentional G
wrongdoing or mere inadvertence was involved. Its application should always be
undertaken in the context of the particular case. Gee v Pritchard (1818) 2 Swans
402, 36 ER 670 and Lister v Hesley Hall Ltd [2002] 1 AC 215 applied. Lloyd v
Grace, Smith & Co [1912] AC 716, Canadian Pacific Railway Co v Lockhart
[1942] AC 591, Ilkiw v Samuels [1963] 1 WLR 991, Williams v A & W Hemphill H
Ltd 1966 SC (HL) 31, Morris v CW Martin & Sons Ltd [1966] 1 QB 716,
Kooragang Investment Pty Ltd v Richardson & Wrench Ltd [1982] AC 462, Rose
v Plenty [1976] 1 WLR 141 and Racz v Home Office [1994] 2 AC 45 considered
(at 235E-G).
(3) The concept of employment was not a narrow one and must be viewed
broadly when applying the ‘close connection’ criterion. In regard to vicarious I
liability, the nature of the employment was not to be ascertained merely by
attempting to tabulate the employee’s duties. It was necessary to stand back and
9
[2003] 1 HKC Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd 227
A see how the employer’s activities were actually carried out and how they exposed
the public to the risk of tortious harm caused by the employee. The practice of
collecting food from outside was not only a purpose of the hotel’s staff but of the
hotel itself for it was obviously in the interests of the hotel that its staff were
adequately fed. Under the then prevailing practice, collecting food was properly
to be regarded as incidental to the employment of the hotel staff involved and
B therefore, all things considered, the doorman’s tort was so closely connected with
his employment that it was fair and just to hold the respondent vicariously liable.
Lister v Hesley Hall Ltd [2002] 1 AC 215 applied (at 236C-I).
per Litton NPJ:
(4) The application of the ‘close connection’ test to the facts of a particular
C case was a matter of degree. The underlying idea was that the injury done by the
servant must involve a risk sufficiently inherent in or characteristic of the
employer’s business that it was just to make the employer bear the loss. In this
case the evidence did not suggest that the doorman’s duties were confined to
moving limousines to and from the forecourt. The nature of his work was wider
and more ambiguous suggesting that he had an implied authority to use the
D limousine to collect food. Since his duties required him to drive the limousine on
public roads, necessarily entailing some risk to other road users, then the
closeness between the doorman’s employment and his reckless driving which
caused the injuries to the pedestrians became apparent. Lister v Hesley Hall Ltd
[2002] 1 AC 215 applied (at 237E-238C).
E (5) Assuming that the doorman’s use of the limousine to collect food was
unauthorised it was a question of law whether or not his act was within the scope
of his employment or not. In determining this question the court should take a
broad approach to the nature of employment and not focus upon the employee’s
duties at the time of the tortious act. The Court of Appeal in only considering the
fact that the doorman was engaged in an unauthorised act and concluding
F therefore that he was acting outside the scope of his employment took too narrow
a view of the nature of his employment. As Lord Steyn observed at 224B in
Lister’s case (by reference to a passage from Salmond (1907)) that ‘a master … is
liable even for acts which he has not authorised, provided that they are so
connected with acts which he has authorised, that they may be regarded as modes
— although improper modes — of doing them’. Therefore, the unauthorised act
G must be considered in the context of his employment as a whole and take into
account such factors as his duties at the time when the tort occurred and whether
he was acting only in his own interests or in the interests of his employer. More
generally, if the employer’s business activities were of such a nature that they
gave rise to the risk of the tortious act that caused the damage that was an
insurable risk and an act for which it was fair and just to hold the employer
H vicariously liable. Ilkiw v Samuels [1963] 1 WLR 991 at 1004, Kooragang
Investment Pty Ltd v Richardson & Wrench Ltd [1982] AC 462, Bazley v Curry
(1999) 174 DLR (4th) 45, Jacobi v Griffiths (1999) 174 DLR (4th) 71 and Lister
v Hesley Hall Ltd [2002] 1 AC 215 applied (at 238D-240A).
per Mortimer NPJ:
I (6) In determining whether or not the doorman was acting within the scope of
his employment the matter must be looked at broadly and not dissecting the
employee’s task into its component activities. This question should be answered
10
as a jury would if the matter was put to them. The doorman was employed by the A
hotel to move the limousine when necessary. He had custody of the keys at the
relevant time and could decide when it was necessary to move the limousine. On
the occasion of the accident it was not necessary to move the limousine but he
used it to collect food — an activity known to the hotel and not disapproved.
Considering the matter broadly, the driving was part of the job on which the
doorman was engaged and on these special facts, the doorman was acting within B
his authority and within the scope of his employment. The vicarious liability of
the hotel was established. Dicta of Diplock LJ in Ilkiw v Samuels [1963] 1 WLR
991 at 1004, Bazley v Curry (1999) 174 DLR (4th) 45 and Jacobi v Griffiths
(1999) 174 DLR (4th) 71 and Lister v Hesley Hall Ltd [2002] 1 AC 215 applied.
Crook v Derbyshire Stone Ltd [1956] 1 WLR 432 criticised (at 242F-243G).
C
Cases referred to
Bazley v Curry (1999) 174 DLR (4th) 45, [1999] 2 SCR 534 (Can SC)
Canadian Pacific Railway Co v Lockhart [1942] AC 591, [1942] 2 All ER 464
(PC)
Crook v Derbyshire Stone Ltd [1956] 2 All ER 447, [1956] 1 WLR 432 (Derby D
Assizes)
Gee v Pritchard (1818) 2 Swans 402, 36 ER 670
Ilkiw v Samuels [1963] 2 All ER 879, [1963] 1 WLR 991 (CA)
Jacobi v Griffiths (1999) 174 DLR (4th) 71 (Can SC)
Kooragang Investment Pty Ltd v Richardson & Wrench Ltd [1982] AC 462, E
[1981] 3 All ER 65, [1981] 3 WLR 493 (PC)
Lister v Hesley Hall Ltd [2002] 1 AC 215, [2001] 2 All ER 769, [2001] Fam
Law 595 (HL)
Lloyd v Grace, Smith & Co [1912] AC 716, [1911-13] All ER Rep 51 (HL)
Morris v CW Martin & Sons Ltd [1966] 1 QB 716, [1965] 2 All ER 725, F
[1965] 3 WLR 276 (CA)
Racz v Home Office [1994] 2 AC 45, [1994] 1 All ER 97, [1994] 2 WLR 23
(HL)
Rose v Plenty [1976] 1 All ER 97, [1976] 1 WLR 141, [1976] IRLR 60 (CA)
Sky Heart Ltd v Lee Hysan Estate Co Ltd [1999] 1 HKC 18, (1997-98) 1
G
HKCFAR 318 (CFA)
Trotman v North Yorkshire County Council [1999] LGR 584, [1999] IRLR 98
(CA)
Williams v A & W Hemphill Ltd 1966 SC (HL) 31
Other sources referred to H

Salmond Law of Torts (1st Ed, 1907) pp 83-84
Salmond & Heuston Law of Torts (21st Ed, 1996) p 443
Winfield & Jolowicz Tort (16th Ed, 2002) paras 20.9, 20.14
[Editorial note: see Halsbury’s Laws of Hong Kong Vol 25 Tort (2000 Ed) I
[380.026]-[380.045] generally on vicarious liability, particularly [380.033]
prohibited acts of employees.]
11
[2003] 1 HKC Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (Bokhary PJ) 229
A Final Appeal
At first instance and before the Court of Appeal the driver of a hotel limousine
was found liable in negligence for injuring two pedestrians but his employer was
held not to be vicariously liable (see Tse Ngan Heung & Anor v Ritz-Carlton Ltd
& Ors [2002] 1 HKC 146 for the decision of the Court of Appeal). The driver’s
insurance company was joined as a defendant on its own application and with
B
leave of the Court of Appeal, now appealed to the Court of Final Appeal with
respect to vicarious liability. The facts appear sufficiently in the following
judgment.
Michael Thomas SC and Godfrey Lam (Ip Kwan & Co) for the appellant
C (Ming An).
John Bleach SC, Mohan Bhawarney and Roxanne Ismail (Fairbairn, Catley,
Low & Kong) for the respondent (the hotel company).
Bokhary PJ: Introduction

D
1. This case takes us to the core of the doctrine of vicarious liability. It
concerns the true test of when an employer is vicariously liable for his
employee’s tort committed during an unauthorised course of conduct. The
circumstances of the case are as follow.
E 2. Sometime between 9:30 and 10:00 on the night of 9 March 1998, a
Mercedes Benz saloon car was travelling along Queensway in the
direction of Wanchai. Suddenly the car went out of control, mounted the
pavement and struck two pedestrians. They were seriously injured. The
car was being driven by Mr Lo Sin Tak. He was a doorman of a nearby
hotel, The Ritz-Carlton. But the car did not belong to his employer, The
F
Ritz-Carlton Ltd, which operated the hotel. Rather it was a limousine
belonging to Parklane Limousines Services Ltd. Limousines and their
chauffeurs were hired from this limousine service company by the hotel
company. This was done by the hotel company in order to provide a
chauffeur-driven limousine service for its hotel guests.
G 3. It is not in dispute that Mr Lo sometimes drove these limousines in
the course of his employment with the hotel company. These limousines
were parked in the hotel forecourt. If it was in the way of other vehicles,
the limousine had to be moved. And if its chauffeur happened to be off-
duty at the time, the limousine would be moved by an hotel employee
H acting as what has been called a ‘car jockey’. Moving a limousine
sometimes involved driving it out of the forecourt and along a number of
roads before returning it to the forecourt. Sometimes this involved using a
scavenger lane and simply driving around the block. If the scavenger lane
was blocked, a longer route would be taken. The longer route included
I driving along Queensway in the direction of Wanchai. Driving along that
road in that direction happens to be what Mr Lo was doing when the
accident happened.
12
4. Mr Lo sometimes acted as a ‘car jockey’. But the courts below A

concurrently found as a fact that he was not acting as a ‘car jockey’ at the
time of the accident [see Tse Ngan Heung & Anor v Ritz-Carlton Ltd &
Ors [2002] 1 HKC 146 (CA)]. It appears that the hotel staff, or some of
them, did not much care for the food served at the hotel canteen.
Moreover the canteen closed early in the evening. So there developed a B
practice whereby, when time was available, hotel staff would leave the
hotel premises to collect food bought from elsewhere and bring such food
back to the hotel for themselves and their colleagues.
5. Hotel staff sometimes collected food while out on an errand for the
hotel. At other times they left the hotel for the specific purpose of C
collecting food. On some occasions they did this by taxi. On other
occasions they did this by limousine, having succeeded in persuading the
chauffeur to drive them to collect food. But there is no evidence that prior
to the incident giving rise to the present case, any member of the hotel’s
staff had ever driven a limousine to collect food.
D
6. As to what happened on the night of the accident, the courts
concurrently found the following facts. A bellboy was going out to collect
food. The chauffeur of the limousine later involved in the accident had
gone off-duty, leaving the keys with Mr Lo. The limousine was parked in
the hotel forecourt. Mr Lo drove the bellboy in the limousine to collect
food. That is what he was doing when the accident happened. E
7. It is no longer in dispute that Mr Lo is liable to the injured
pedestrians in the tort of negligence. The only question is whether his
employer, the hotel company, is vicariously liable to them for his
negligent driving.
F
8. At the trial, Mr Lo took no interest in the proceedings. In those
circumstances, The Ming An Insurance Co (HK) Ltd was, on its own
application, joined as a defendant. This was because Ming An is the
‘insurer concerned’ under the Motor Insurers Bureau (MIB) scheme. If
the hotel company is not vicariously liable, its own insurers would not be
responsible to satisfy the injured pedestrians’ judgments against the G
apparently impecunious Mr Lo, who would then be an uninsured driver.
And Ming An, as the insurer concerned, would then have to shoulder that
responsibility. The fact that the contest is between two insurers is
irrelevant in itself. But the fact that the injured pedestrians’ judgments
will not be empty whichever way the appeal is decided could be seen as H
having the advantage of eliminating any fear on anyone’s part that a hard
case might make bad law.
9. Seagroatt J held that the hotel company is not vicariously liable. So
he entered judgment for the injured pedestrians against Mr Lo but not
against the hotel company. The Court of Appeal (Rogers VP and Woo and I
Le Pichon JJA) upheld his decision [see [2002] 1 HKC 146]. As I have
explained, Ming An would have to satisfy the injured pedestrians’
13
A judgments against Mr Lo if, as the courts below concluded, the hotel

company is not vicariously liable. By leave of the Court of Appeal, Ming
An appeals to us against that conclusion.
Reasoning of the courts below

B 10. In holding that Mr Lo ‘was acting outside the scope of his
employment’, Seagroatt J gave this reason: ‘He had no authority to drive
off one of the hired courtesy cars in the existing circumstances’. The
Court of Appeal upheld Seagroatt J’s decision, taking the view that
driving a limousine for any purpose other than as a ‘car jockey’ was
C beyond the scope of Mr Lo’s employment.
The purpose of the journey

11. Ming An submits that the hotel company would be vicariously liable
for Mr Lo’s negligent driving even if the purpose of the journey was to
D
collect food. But Ming An submits that, in any event, Seagroatt J was not
entitled to find that the journey had been made for that purpose. This is
because, Ming An submits, there were gaps in the evidence and a number
of matters which were material to the question of the journey’s purpose
but on which Seagroatt J had omitted to make findings of fact. Be that as
E it may, the finding that the journey had been made for the purpose of
collecting food is a concurrent finding of the courts below. As explained
in Sky Heart Ltd v Lee Hysan Estate Co Ltd [1999] 1 HKC 18 at 33H-
38B, (1997-1998) 1 HKCFAR 318 at 333F-338B, this Court will not
review concurrent findings of fact save in very special circumstances.
F 12. The concurrent finding which Ming An attacks is not a finding
reached in the absence of evidence. There was evidence that the limousine
was not blocking any vehicle. That, coupled with the bellboy’s presence
in the limousine, suggested that Mr Lo was not driving as a ‘car jockey’
on this occasion. And that in turn left a viable basis for inferring, in all the
G circumstances, that the journey had probably been made for the purpose
of collecting food. After Mr Michael Thomas SC for Ming An had
outlined his argument on this part of the appeal, we indicated at the
hearing that the appeal had to proceed on the footing that the collection of
food had been the journey’s purpose. And the appeal then proceeded
H
accordingly.
Test for vicarious liability

13. The doctrine of vicarious liability, by which employers are in certain
circumstances held liable for torts committed by their employees, was
I developed by the judges for the purpose of providing the victims of tort
with recourse against persons who have the means to satisfy awards and
on whom it would be just to fix liability to do so. This purpose is the
14
doctrine’s raison d’être. But what about the doctrine’s content? This A
brings us to the test for determining when employers are liable for torts
committed by their employees.
14. For a long time, the English courts applied — and the Hong Kong
courts following suit likewise applied — the test commonly called the
Salmond test. This is the test first formulated in Salmond: The Law of B
Torts (1st Ed, 1907) at p 83 and still to be found in Salmond & Heuston
on the Law of Torts (21st Ed, 1996) at p 443. The Salmond test operates
thus. Employers are liable for torts committed by their employees in the
course of their employment. And an employee’s tort is deemed to have
been committed in the course of his employment if it is either (a) C
something authorised by his employer or (b) an unauthorised mode of
doing something authorised by his employer.
15. The ‘unauthorised mode’ limb of the Salmond test can give rise to
difficulty. And in Lister v Hesley Hall Ltd [2002] 1 AC 215 the House of
Lords adopted a new test. Under this new test, the question is whether the D
employee’s tort was so closely connected with his employment that it
would be fair and just to hold his employer vicariously liable. Lister’s
case was one in which the warden of a boarding house attached to a
school had sexually abused pupils residing in the boarding house. At
p 230C Lord Steyn said: ‘The question is whether the warden’s torts were
E
so closely connected with his employment that it would be fair and just to
hold the employers vicariously liable’. At p 237G Lord Clyde spoke of ‘a
sufficient connection between the acts of abuse which [the warden]
committed and the work which he had been employed to do’. Lord
Hutton (as one sees at p 238B) simply agreed with Lord Steyn’s speech.
At p 245G Lord Millett said: ‘What is critical is that attention should be F
directed to the closeness of the connection between the employee’s duties
and his wrongdoing and not to verbal formulae’. That makes a majority
for the ‘close connection’ test.
16. By speaking of a majority formed by Lords Steyn, Clyde, Hutton
and Millett, I am not implying that Lord Hobhouse of Woodborough, who G
reached the same result, did so for reasons irreconcilable with the ‘close
connection’ test. Lord Hobhouse of Woodborough proceeded (as one sees
at p 242A-B) on the basis that ‘the fundamental criterion … is the
comparison of the duties respectively owed by the servant to the plaintiff
and to his employers’. But he concluded his speech (as one sees at H
p 243B) by allowing the appeals for not only the reasons which he gave
but also those given by Lord Steyn. This does not suggest to me that Lord
Hobhouse of Woodborough felt unable to reconcile his fundamental
criterion with the ‘close connection’ test.
17. The ‘close connection’ test is in substance the test pioneered by the I
Supreme Court of Canada in Bazley v Curry (1999) 174 DLR (4th) 45 and
Jacobi v Griffiths (1999) 174 DLR (4th) 71. The application of the
15
A Salmond test by the English Court of Appeal in Trotman v North Yorkshire

County Council [1999] LGR 584 led to what I respectfully regard as an
unsatisfactory result. And Trotman’s case was not favoured by the
Supreme Court of Canada in Bazley and Jacobi’s cases, and was
overruled by the House of Lords in Lister’s case. But I am disposed to
B believe that in at least most of the past cases the application of the ‘close
connection’ criterion would not have led to results different from the ones
reached by applying the ‘mode’ criterion of the Salmond test. Indeed, I
notice that the learned editor of Winfield & Jolowicz on Tort (16th Ed,
2002) takes the view (as one sees at p 720 para 20.14) that the description
C
in Lister’s case of the ‘unauthorised mode’ limb of the Salmond test as
simplistic is harsh. And he suggests (ibid) that the facts of Lister’s case
could be accommodated ‘within the traditional test as it had been applied
to matters like fraud and theft’.
18. Nevertheless I do not find the ‘unauthorised mode’ limb of the
Salmond test easy to understand unless one has the benefit of Sir John
D
Salmond’s explanation cited by Lord Steyn in Lister’s case at pp 223H-
224A. This explanation, with the emphasis supplied by Lord Steyn, is that
‘a master … is liable even for acts which he has not authorised, provided
they are so connected with acts which he has authorised, that they may
rightly be regarded as modes — although improper modes — of doing
E them’. With such emphasis, this explanation is, as Lord Steyn observed at
p 224B, the ‘germ’ of the ‘close connection’ test.
19. By ‘close connection’ is meant a connection between the
employee’s unauthorised tortious act and his employment which is so
close as to make it fair and just to hold his employer vicariously liable. I
F consider close connection to be an intellectually satisfying and practical
criterion for vicarious liability. It imposes vicarious liability when, but
only when, it would be fair and just to do so. And it provides a workable
concept, namely a sufficiently close connection, for determining in each
case whether doing so would be fair and just. The case before us is of
G negligent driving by an employee. Bazley, Jacobi and Lister’s cases, on
the other hand, involved employees who betrayed the trust reposed in
them by their employers. The employees in those cases sexually abused
children at institutions which their employers operated. Trotman’s case
was similar, involving the sexual abuse of a pupil by a deputy headmaster
H during a school trip abroad. Does this mean that close connection is a
criterion suitable only to cases like Trotman, Bazley, Jacobi and Lister’s
cases?
20. In answering this question, I begin by noting that the basic test for
vicarious liability has never varied according to whether the employee’s
I tort involved mere inadvertence or something worse.
21. Secondly, I note that the cases discussed in the speeches in Lister’s
case are by no means confined to cases of intentional wrongdoing.
16
Certainly cases of vicarious liability for fraud (Lloyd v Grace, Smith & A
Co [1912] AC 716), theft (Morris v CW Martin & Sons Ltd [1966] 1 QB
716) and misfeasance in public office (Racz v Home Office [1994] 2 AC
45) are discussed. But so are cases of vicarious liability for negligence
such as Canadian Pacific Railway Co v Lockhart [1942] AC 591, Ilkiw v
Samuels [1963] 1 WLR 991, Williams v A & W Hemphill Ltd 1966 SC B
(HL) 31and Rose v Plenty [1976] 1 WLR 141.
22. Thirdly, it is nowhere stated in the speeches in Lister’s case that
different tests for vicarious liability are to be applied depending on
whether mere inadvertence or intentional wrongdoing is involved. To the
contrary, Lord Clyde said this at pp 236G-237A: C
Cases which concern sexual harassment or sexual abuse committed by an
employee should be approached in the same way as any other case where
questions of vicarious liability arises. I can see no reason for putting them into
any special category of their own. (Emphasis supplied)
D
It is also of significance that in adopting the ‘close connection’ test in
Lister’s case, Lord Steyn was influenced not only by Bazley and Jacobi’s
cases but also by (as one sees at pp 226E-227D) what Scarman LJ (later
Lord Scarman) said in a negligence case, namely Rose’s case. And earlier
in his speech Lord Steyn had said (at p 225E) that although William’s case E
was one of negligence, the reasoning behind Lord Pearce’s analysis of the
position there threw light on the problem under consideration in Lister’s
case.
23. Fourthly, there is this point. Until the House of Lords decided
Lloyd’s case in 1912, it was thought that there could be no vicarious F
liability unless the employee acted, or at least intended to act, for the
employer’s benefit. As Lord Wilberforce observed when delivering the
Privy Council’s advice in Kooragang Investment Pty Ltd v Richardson &
Wrench Ltd [1982] AC 462 at 472G: ‘it took the decision of the House of
Lords in [Lloyd’s case] to dispel the suggestion that there was no liability
of the employer for frauds or wrongs committed for the benefit of the G
employee’. This makes it unlikely that Sir John Salmond had betrayal of
trust by employees in mind when he explained in 1907 that the alternative
limb of his test covered unauthorised acts ‘so connected’ with authorised
acts as to be modes — although improper modes — of doing them. Yet it
is in this explanation that Lord Steyn found the seed from which the H
‘close connection’ test has grown. So it would be odd if the ‘close
connection’ criterion were now confined to cases which Sir John Salmond
is unlikely to have had in mind when he planted that seed. The intentional
wrongdoing cases did the most to expose the limitations of the Salmond
test, and they were the ones which inspired a new test. But that does not I
mean that the inadvertence cases should be denied the benefit of this new
insight.
17
A 24. Fifthly and finally, the ‘close connection’ criterion impresses me as

inherently just and fair for all cases of tort committed by an employee
while engaged in an act not authorised by his employer. It would be odd if
the employer ever escaped vicarious liability even though there was — or
were ever fixed with vicarious liability even though there was not — so
B close a connection between the employee’s tort and his employment as to
make it fair and just to hold the employer vicariously liable. The concept
is a simple one which ought not to be complicated by reading other
requirements into it as a matter of law. Delivering the judgment of the
Supreme Court of Canada in Bazley’s case, McLachlin J (now the Chief
C
Justice of Canada) laid down a number of principles which the courts
should be guided by in determining whether an employer is vicariously
liable for an employee’s unauthorised, intentional wrong in cases where
precedent is inconclusive. The first of these principles is that the courts
should openly confront the question of whether liability should lie against
the employer, rather than obscuring the decision beneath semantic
D discussions of ‘scope of employment’ and ‘mode of conduct’. The ‘close
connection’ test confronts that question in that way. There is no
conclusive precedent to the contrary. And inadvertence cases, just as
much as intentional wrongdoing cases, must not be obscured beneath
semantics.
E 25. For all the foregoing reasons, I regard close connection as the basic
criterion for vicarious liability in regard to all torts committed by an
employee during an unauthorised course of conduct, whether intentional
wrongdoing or mere inadvertence is involved. This is not to say that this
criterion is to be treated like a statutory formula. Its application is always
F to be undertaken in context. I dare say that the requisite connection will
prove in practice to be more readily found in certain types of case than in
others. But the basic criterion having been applied, the disposal of each
case will always turn ultimately on its own facts and the particular
considerations which they raise. This is saying no more than what Lord
G Eldon LC famously intervened to observe in the course of the argument in
Gee v Pritchard (1818) 2 Swans 402 at 414; 36 ER 670 at 674, namely
that doctrines ought to lay down ‘fixed principles’ while ‘taking care that
they are to be applied according to the circumstances of each case’.
Applying the ‘close connection’ criterion

H
26. Seagroatt J’s decision was given before, but the Court of Appeal’s
decision was given after, the House of Lords decided Lister’s case. The
Court of Appeal accepted that the present case was covered by Lister’s
case. And it took the view that Seagroatt J had in effect applied the ‘close
I connection’ test. But one sees from Seagroatt J’s judgment that he, having
concluded that Mr Lo ‘had no authority to drive off one of the courtesy
cars in the existing circumstances’, felt that it was therefore ‘unnecessary
18
to consider the law in detail’. Nor, it would seem, did he feel it necessary A
to consider any other facts in detail or, indeed, at all. He seems to have
focused exclusively on the question of authority. In his own judgment,
Rogers VP, with whom the other members of the Court of Appeal agreed,
said that the ‘use of the car to drive a bellboy to buy food was equally
outside the acts which [Mr Lo] had been employed to do, as if he took the B
car for a joy-ride to the New Territories’ [see p 152B supra]. This leaves
out of account the practice of collecting food from outside the hotel,
which is what Ming An relies on for its argument on close connection.
The issue of close connection is therefore at large, and it becomes this
Court’s duty to apply the ‘close connection’ criterion to the material C
circumstances of this case.
27. Nowadays the concept of employment is not a narrow one, and it
must be viewed broadly when applying the ‘close connection’ criterion.
As Lord Clyde said in Lister’s case at p 234D, ‘in considering the scope
of the employment a broad approach should be adopted’. In regard to D
vicarious liability, the nature of the employment is not to be ascertained
merely by attempting to tabulate the employee’s duties. It is necessary to
stand back to see how the employer’s activities were actually carried out
and how that exposed the public to the risk of tortious harm caused by the
employee.
E
28. On this occasion a ‘car jockey’ was driving a limousine for the
purpose of collecting food. And it would appear that ‘car-jockeys’ were
not authorised to drive limousines for that purpose. But the fact remains
that, albeit for a different purpose, ‘car jockeys’ routinely drove
limousines in the course of their employment — even, as it happens,
along the route where the accident occurred. And it is also a fact that, F
albeit while driven by their chauffeurs rather than ‘car jockeys’,
limousines were sometimes used for the purpose of collecting food.
29. Precisely how the practice of collecting food was operated is
unknown to the Court. I doubt that it was entirely clear to the hotel
company’s staff. My impression is that it was an evolving practice which G
had a grey area. But the practice existed. And the important thing is that
collecting food was a purpose not only of the hotel’s staff but also of the
hotel company itself. For it was obviously in the business interests of the
hotel company that its staff be adequately fed despite the inadequacy of
its canteen. Indeed — although I do not consider it necessary to come to a H
conclusion on it — the hotel company may well have been under a duty to
provide its staff with a reasonable opportunity to obtain acceptable
sustenance. However that may be, I think that under the then prevailing
practice, collecting food was properly to be regarded as incidental to the
employment of the hotel staff involved. All things considered, I am I
satisfied that Mr Lo’s tort was so closely connected with his employment
that it would be fair and just to hold the hotel company vicariously liable.
19
[2003] 1 HKC Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (Litton NPJ) 237
A 30. In addition to the facts which I have just mentioned, there are other
facts relied upon by Ming An. These include the fact that Mr Lo was in
uniform during the journey in question, the fact that the accident
happened during his working hours and the fact that he had set out from
his place of employment. I do not consider these additional facts as
B important as the other facts which I have mentioned. But if it were
necessary, these additional facts, too, could be deployed in support of the
conclusion that Mr Lo’s tort was so closely connected with his
employment that it would be fair and just to hold the hotel company
vicariously liable. Their tendency is towards that conclusion.
C
Result
31. In the result, what Seagroatt J ordered in favour of the injured
pedestrians will stand. In addition, I would allow this appeal to order that
what Seagroatt J ordered in favour of the injured pedestrians will be
D ordered against the hotel company too. The order for legal aid taxation of
the injured pedestrians’ own costs will stand. I would award Ming An
costs against the hotel company here and in the courts below.
Chan PJ: 32. I agree with the judgment of Mr Justice Bokhary PJ.
E
Litton NPJ: 33. I agree with Mr Justice Bokhary PJ’s judgment.
34. The application of the close connection test in Lister v Hesley Hall
Ltd [2002] 1 AC 215 to the facts of a particular case is a matter of degree.
As this Court is differing from the unanimous judgment of the Court of
F
Appeal [see [2002] 1 HKC 146] on such a matter, I will add a few words
of my own.
35. As stated in Winfield and Jolowicz on Tort (16th Ed, 2002) at
para 20.9 the underlying idea is that the injury done by the servant must
involve a risk sufficiently inherent in or characteristic of the employer’s
business that it is just to make the employer bear the loss.
G 36. Here the servant Mr Lo Sin Tak was employed as a doorman at the
hotel. The expression ‘doorman’ is not self-explanatory and the scope of
his everyday work has not been clearly defined in the material before the
court. There is no suggestion in the evidence, or in the findings of the
courts below, that it was confined to the moving of cars to and from the
H hotel forecourt. The nature of his work was wider and more ambiguous.
The evidence indicates that from time to time ‘hotel staff’ would have
gone out in a limousine — driven by one of Parklane Limousine Service’s
drivers — to get food for a ‘night snack’, not only for himself but also for
the ‘forecourt staff’. This might well have included Mr Lo. When this
I happened, the baggage master Mr Wilson Leung Tat Kei, who had some
authority over Mr Lo, would, as likely as not, have shared in the food.
Hence, there grew up the practice, impliedly authorized, of collecting
20
food from outside the hotel. This, as Mr Justice Bokhary PJ has explained A
in his judgment, was a purpose not only of the hotel’s staff but of the hotel
as well, for it was obviously in the interests of the hotel that the ‘forecourt
staff’ should be adequately fed during the night shift. Then there is this
fact, that Mr Lo had, quite legitimately, access to the keys for the
limousines left on the forecourt: They might even have been left in his B
actual custody. The course of his work as a doorman was such that he was
required to drive the limousines from time to time, to make space in the
forecourt, so no questions would have been raised when he drove a
limousine out of the forecourt onto the public roads: which he regularly
did: an act necessarily involving some risk to other road users. Once this C
point is reached, the closeness between the Mr Lo’s work as a doorman
and his reckless driving which caused the injuries to the pedestrians
becomes apparent.
37. The trial judge found that he was ‘in a hurry to complete his
journey’ and if he had been on a ‘legitimate journey’ there would not have
been the need for the ‘extreme haste’ as described by the independent D
witness. This was in effect a finding by the trial judge that, at the time of
the accident, he was engaged upon an ‘illegitimate’ act: and the only such
act consistent with the evidence was that found expressly by the Court of
Appeal: that Mr Lo was driving the limousine, accompanied by the bell-
boy Mr Kwok Sze Lun as his passenger, on his way to get food for a E
night-snack. Assuming that this was a prohibited act — as it undoubtedly
was, since he was only authorized to drive the limousine for the purpose
of parking — does this take the case outside the ambit of the principles set
out in Lister’s case? The answer to this question lies in the court’s
approach: Does the court take a broad approach to the nature of the F
employment or is the court’s focus essentially upon the employees’ duties
at the time of the tortious act? This is a question of law.
38. As Mr Michael Thomas SC, counsel for The Ming An Insurance Co
(HK) Ltd submitted, this branch of the law has been in a state of evolution
for some time, and the tendency has been toward more liberal protection G
of innocent third parties: see Lord Wilberforce in Kooragang Investment
Pty Ltd v Richardson & Wrench Ltd [1982] AC 462 at 471H and in
particular at 472A where Lord Wilberforce said:
At the same time recognition has been given by the law to the movement
which has taken place from a relationship — akin to that of slavery — in H
which all actions of the servant were dictated by the master, to one in which
the servant claimed and was given some liberty of action.
39. In answering the question ‘does the prohibition limit the sphere of
employment or does it only deal with conduct within the sphere of
employment’ under the old Salmond test, Diplock LJ (as he then was) I
said in Ilkiw v Samuels [1963] 1 WLR 991 at 1004 that the matter must be
looked at broadly; the court should not ‘dissect the servant’s task into its
21
[2003] 1 HKC Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (Litton NPJ) 239
A component activities’. It can be said that the twin cases in the Supreme
Court of Canada, Bazley v Curry (1999) 174 DLR (4th) 45 and Jacobi v
Griffiths (1999) 174 DLR (4th) 71, and Lister’s case itself, have pushed
this broad approach even wider.
40. Looked at in this light, it can be seen that Rogers VP in the present
B case took a somewhat narrow approach when he said: ‘… [Mr Lo’s]
employment gave him the opportunity to obtain the keys and make use of
the car for his own private purposes. The use of the car to drive a bell-boy
to buy food was equally outside the acts which he had been employed to
do, as if he took the car for a joy-ride in the New Territories’ [at 152B
C supra]. Likewise Woo JA [at 152I-153B] when he said:
[Mr Lo] was employed and certainly authorised to drive the Parklane cars to
avoid obstruction, and apart from that limited purpose, he was not allowed to
drive those cars at all. He might be permitted to go outside the hotel to buy
food, but that was not a duty within his employment. At the material time, he
D was not driving for the hotel’s business or purposes or performing any part of
his duties towards the hotel or towards the hotel guests that the hotel had
entrusted upon him to perform.
41. This, in the light of the two Canadian cases and Lister’s case, is taking
too narrow a view of the nature of Mr Lo’s employment.
E 42. That having been said, I confess to having considerable sympathy
for the Court of Appeal’s views in the present case, for if one focused
simply upon Mr Lo’s duties at the time of the accident, it is difficult to
conclude that he was, in using the limousine to get food, acting in
discharge of those duties. In the course of counsel’s arguments during the
F hearing I found my mind wavering several times on this vital point. This
case, in my judgment, lies at the borderline of cases where the law
imposes vicarious liability on the employer. It may well be right, as
Mr Bleach SC, counsel for the hotel has argued, that the close connection
test is not new but rather a development of the old Salmond test, since the
‘germ’ of the close connection test, as Lord Steyn observed at 224B in
G Lister’s case, is to be found in the Salmond test itself: that ‘a master … is
liable even for acts which he has not authorized, provided they are so
connected with acts which he has authorized, that they may rightly be
regarded as modes — although improper modes — of doing them’.
Hence, in seeking an answer to the question ‘Is the servant’s wrongful act
H so closely connected with his employment that it would be fair and just to
hold the employer vicariously liable?’ it must be remembered that the
issue is not free standing, and matters such as the servant’s duties at the
time when the tort occurred, whether he was acting in the interests of the
employer or solely for himself, et cetera, are still relevant. And, casting
I one’s eyes a little wider, the court should also have regard to the business
activities of the employer broadly speaking and ask if the risk which gave
rise to the damage (here the servant’s reckless driving of someone else’s
22
limousine) was created by those activities: If they were, that was a risk A
which the employer could have insured against. Balancing these various
factors I have, in the end, come firmly to the view that this appeal should
be allowed. I concur in the orders proposed by Mr Justice Bokhary PJ.
Mortimer NPJ: 43. I also would allow this appeal for the reasons given B
by Mr Justice Bokhary PJ. I add a few observations on my own approach,
particularly as we differ from the Court of Appeal.
44. The submissions of counsel have focused upon Lister v Hesley Hall
Ltd [2002] 1 AC 215 (HL(E)). This important decision was not available
to Mr Justice Seagroatt at first instance but had been reported before the C
proceedings in the Court of Appeal. The House of Lords articulated for
the first time the ‘close connection’ test for examining the circumstances
in which an employer ought to be held vicariously liable for his
employee’s unauthorised tortious acts.
45. I agree with Mr Justice Bokhary PJ’s summary of the test. In order
to satisfy the test a plaintiff must show that the employee’s tortious act D
was so closely connected with his employment that it is just and fair to
hold the employer vicariously liable.
46. In reaching their conclusions in Lister’s case Lord Steyn (with
whom Lord Hutton agreed) and Lord Millett acknowledge the assistance
they derive from the judgments of the Canadian Supreme Court in Bazley E
v Curry (1999) 174 DLR (4th) 45 and Jacobi v Griffiths (1999) 174 DLR
(4th) 71 in which the test was enunciated. It is to be noted however that
each member of the Committee reaches his conclusion that the close
connection test is correct by ‘employing the traditional methodology of
English law’, as Lord Steyn puts it at p 230C. Each finds its origin in the F
passage in Sir John Salmond (Salmond, Law of Torts (1st Ed, 1907)) at
pp 83-84:
But a master, as opposed to the employer of an independent contractor, is
liable even for acts which he has not authorized, provided they are so
connected with acts which he has authorized, that they may rightly be G
regarded as modes — although improper modes — of doing them.
He then supports and develops the test by tracing the authorities up to the
present day.
47. The test is particularly apt in cases such as Lister where the
employee has committed tortious acts which are also serious criminal H
acts, but it is of general application. As a guide to its application, however,
Lord Steyn warns of the necessity to avoid ‘the pitfalls of terminology’.
Lord Millett is of like view at p 245G:
But the precise terminology is not critical. The Salmond test, in either
formulation, is not a statutory definition of the circumstances which give rise I
to liability, but a guide to the principled application of the law to diverse
factual situations. What is critical is that attention should be directed to the
23
[2003] 1 HKC Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (Mortimer NPJ) 241
A closeness of the connection between the employee’s duties and his

wrongdoing and not to verbal formulae.
48. With these caveats in mind it is useful to note how Lord Steyn applies
the test at 230B-D:
B Employing the traditional methodology of English law, I am satisfied that in
the case of the appeals under consideration the evidence showed that the
employers entrusted the care of the children in Axeholme House to the
warden. The question is whether the warden’s torts were so closely connected
with his employment that it would be fair and just to hold the employers
vicariously liable. On the facts of the case the answer is yes. After all, the
C sexual abuse was inextricably interwoven with the carrying out by the warden
of his duties in Axeholme House.
Lord Hobhouse notes at 241F:
Whether or not some act comes within the scope of the servant’s employment
depends upon an identification of what duty the servant was employed by his
D employer to perform.
So previous authority is not overruled. Their Lordships explain and
develop the common law in this field. The consequence is that nearly all
previously reported cases would be decided the same way. Among the few
E exceptions is perhaps Crook v Derbyshire Stone Ltd [1956] 1 WLR 432
but, for my part, I doubt whether this case was correctly decided.
49. I mention the traditional approach of their Lordships in Lister with
the passage in Lord Steyn’s speech where he refers to the two Canadian
Supreme Court decisions at 230B in mind:
F Wherever such problems are considered in future in the common law world
these judgments will be the starting point.
This should not be taken as an invitation to judges and counsel to dwell
upon the examination of policy in those cases. This cannot have been the
intention. It is a reference to the high value of these judgments in
G advancing thought on the underlying policy and jurisprudence of
vicarious liability. This is not in doubt and will be the subject of much
valuable academic comment and analysis in the future. Lister’s case and
the judgments in the instant appeal are appropriate starting points in this
jurisdiction.
H 50. Even in the detailed consideration undertaken in Lister’s case Lord
Steyn at 230B finds it ‘unnecessary to express views on the full range of
policy considerations examined in those decisions’. Lord Clyde is more
specific at 237B:
The careful and comprehensive discussion of the problem by McLachlin J was
I presented in the context of policy considerations, but the essence of the
decision seems to me to lie in the recognition of the existence of a sufficient
connection between the acts of the employee and the employment. This in turn
24
was explored by reference to various factors by reference to which the A

strength of the connection can be established. … These two decisions seem to
be consistent with the traditional approach recognized in this country.
Lord Hobhouse (who agreed with the reasons of Lord Steyn) takes an
even more positive view which I think appropriate. He approaches
Bazley’s case in this way at 242B-D: B
The second limb of the classic Salmond test is a convenient rule of thumb
which provides the answer in very many cases but does not represent the
fundamental criterion which is the comparison of the duties respectively owed
by the servant to the plaintiff and to his employer. Similarly, I do not believe
that it is appropriate to follow the lead given by the Supreme Court of Canada C
in Bazley v. Curry 174 DLR (4th) 45. The judgments contain a useful and
impressive discussion of the social and economic reasons for having a
principle of vicarious liability as part of the law of tort which extends to
embrace acts of child abuse. But an exposition of the policy reasons for a rule
(or even a description) is not the same as defining the criteria for its
application. Legal rules have to have a greater degree of clarity and definition D
than is provided by simply explaining the reasons for the existence of the rule
and the social need for it, instructive though that may be. In English law that
clarity is provided by the application of the criterion to which I have referred
derived from the English authorities.
51. I turn to the instant case. The application of the ‘close connection’ test E
involves a consideration of two matters. The first is whether it is
established that at the time of the negligent driving Mr Lo was acting
within the scope of his employment (however this concept is expressed).
The second is whether his negligent driving was so closely connected
with his employment as to be ‘fair and just’ to hold his employer, the F
hotel, vicariously liable.
52. The real issue for our consideration is whether it is shown that he
was acting within the scope of his employment when driving the car at the
time of the accident. If so, the close connection between his employment
and the negligent driving is so obvious that it is clearly fair and just to G
hold the hotel vicariously liable.
53. But the decision whether Mr Lo was acting within the scope of his
employment when he was driving the car is not easy. This is demonstrated
by the division of judicial opinion upon the facts which were found.
However the speeches in Lister’s case and the authorities cited therein are H
of great assistance. First, the ‘pitfalls of terminology’ must be avoided.
Particular descriptions applied to Mr Lo’s employment or duties may not
be helpful but Diplock LJ’s judgment in Ilkiw v Samuels [1963] 1 WLR
991 at 1004 (approved by each of their Lordships in Lister) provides
valuable guidance:
I
… the matter must be looked at broadly, not dissecting the servant’s task into
its component activities — such as driving, loading, sheeting and the like —
25
A by asking: what was the job on which he was engaged for his employer? and
answering that question as a jury would.
54. Lord Clyde expresses a similar view at p 234D:
… in considering the scope of the employment a broad approach should be
B adopted.
55. As a doorman, Mr Lo was required to act as a ‘car-jockey’. At times,
this involved taking the limousine which he was driving at the time of the
accident along the same route. At the relevant time the keys of limousine
were in his custody and he could decide when it was necessary for the
C vehicle to be moved and driven.
56. When he moved the car to drive it on the occasion of the accident it
was not causing an obstruction. There was no necessity to move it but he
drove it taking a bell-boy on an errand to collect food. There is no
evidence that a bell-boy had been driven for this purpose by a ‘car-jockey’
D before, but there was a practice of staff going out to collect food driven by
the chauffeurs of the limousines when they were on duty. The practice of
going out for food was known to the management. It was not disapproved
and undoubtedly was, in part, for the employer’s benefit.
57. It remains a matter of degree. It was Mr Lo’s duty to drive the
E limousine along the route taken when it was necessary to move it. He had
the keys and it was his duty to move and drive the vehicle when it was
necessary to do so. It was not ‘necessary’ for him to move the car on this
occasion but he was driving along the same route with the bell-boy to
collect food: an activity known to the employer and not disapproved.
Relevant, but not decisive, the collection of food was in the employer’s
F interest. The combination of circumstances was new but the activity was
the same, he was in uniform and it was within his working hours. The
inherent risk that he would drive the vehicle in these circumstances is
apparent. (See Lord Millett’s consideration of the facts in Lister at 250D.)
58. Answering Diplock LJ’s question as a jury would and considering
G the matter broadly, the driving was part of the job on which Mr Lo was
engaged for his employer. On these special facts I would hold that Mr Lo
was acting within his authority and within the scope of his employment
when he drove negligently. The vicarious liability of the hotel is
established.
H
Lord Cooke of Thorndon NPJ: 59. I agree with the judgment of
Mr Justice Bokhary PJ.
Bokhary PJ: 60. The Court is unanimous. What Seagroatt J ordered in

I favour of the injured pedestrians will stand. In addition, the appeal is
allowed to order that what Seagroatt J ordered in favour of the injured
pedestrians will be ordered against the hotel company too. The order for
26
legal aid taxation of the injured pedestrians’ own costs will stand. Ming A
An is awarded costs against the hotel company here and in the courts
below.
Reported by Francis Haddon-Cave

B
27
[2015] 2 HKLRD 483
Yeung Mei Hoi

and
Tam Cheuk Shing
————
(Court of Appeal)
(Civil Appeal No 136 of 2014)
————
Cheung, Yuen and Chu JJA

11 February, 11 March 2015
Tort — vicarious liability — employer’s liability — unauthorised tortious

act by employee — assault on supervisor by subordinate while on duty —
“close connection” test applied — employer vicariously liable
Employment law — vicarious liability — whether employer liable for
employee’s tort — “close connection” test applied
侵權 — 轉承責任 — 僱主責任 — 僱員未經授權的侵權行為 — 下級職員
於當值時襲擊上級主管 — 「緊密關連」的測驗適用 — 僱主承擔轉承責
任
僱傭法 — 轉承責任 — 僱主就僱員的侵權是否有責任 — 「緊密關連」
的測驗適用
D1, a security guard, and his supervisor, P, were employed by D2,
the management company of a residential estate. After P questioned
D1 about his failure to promptly report the location of a taxi that
had entered the estate carrying a suspected drunken passenger and
also about his failure to wear his uniform properly and when P then
tried to take D1’s photograph to report the matter to D2, D1
punched and struck P on the head with a walkie-talkie. In P’s
personal injuries claim against Ds, judgment was entered against
D1, but his claim against D2 was dismissed. The Deputy Judge held
that D2 was not vicariously liable for D1’s assault, because it could
not fairly be said that he had assaulted P in the course of executing
his duties as a security guard. P appealed.
Held, allowing the appeal and giving judgment against D2, that:
(1) The focus of the close connection test was on the scope of
employment of the employee who committed the unauthorised
act. D1 was on duty when he suddenly lost his temper and
assaulted P. At that moment, D1’s scope of employment
required him to be subject to P’s supervision and discipline;
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483 2015/5/11—6:13
484 HONG KONG LAW REPORTS & DIGEST [2015] 2 HKLRD 483
and D1’s unauthorised assault was closely connected to his

employment (Ming An Insurance Co (HK) Ltd v Ritz-Carlton
Ltd (2002) 5 HKCFAR 569 applied). (See para.6.1.)
(2) D2 managed and provided security guards for the estate. D2’s
system of supervision and discipline of the guards carried a
risk that the subordinate might react in an unauthorised way
towards the supervising officer. It was fair and just to hold
D2 vicariously liable because this risk could be insured against
by D2 (Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd
(2002) 5 HKCFAR 569, Various Claimants v Catholic Child
Welfare Society [2013] 2 AC 1 applied). (See para.6.2.)
(3) The argument that D1’s conduct was an act of insubordination
for which D2 should not be vicariously liable was rejected.
The term “insubordination” was too general for the contextual
consideration of whether there was a close connection between
the employment and the unauthorised act (Cheung Chak Fui
v Sun Hing Organization Plastic Management Ltd (unrep.,
HCPI 91/2008, [2011] HKEC 1299) distinguished). (See
paras.6.3–6.4.)
Appeal
This was an appeal by the plaintiff-employee against the dismissal
of his claim for damages for personal injuries against the second
defendant-employer by Deputy Judge Simon Leung in the District
Court (see [2014] HKEC 954). The facts are set out in the judgment.
Mr Ashok Sakhrani, instructed by WK To & Co and assigned by
the Director of Legal Aid, for the plaintiff.
The 1st defendant was not represented and did not appear.
Mr Wong Chi Kwong, instructed by Woo, Kwan, Lee & Lo, for
the 2nd defendant.
Cases cited in the judgment

Bazley v Curry (1999) 174 DLR (4th) 45
Bernard v Attorney General of Jamaica [2004] UKPC 47, [2005]
IRLR 398
Brown v Robinson [2004] UKPC 56
Cheung Chak Fui v Sun Hing Organization Plastic Management
Ltd (unrep., HCPI 91/2008, [2011] HKEC 1299)
Deatons Pty Ltd v Flew (1949) 79 CLR 370
Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48, [2003] 2 AC
366, [2002] 3 WLR 1913, [2003] 1 All ER 97, [2003] 1 Lloyd’s
Rep 65
Fennelly v Connex South Eastern Ltd [2001] IRLR 390
Jacobi v Griffiths (1999) 174 DLR (4th) 71
29
483 2015/5/11—6:13
Yeung Mei Hoi v Tam Cheuk Shing
[2015] 2 HKLRD 483 Cheung JA 485
Ling Man Kuen v Chow Chan Ming (unrep., DCPI 1445/2005,

[2006] HKEC 1566)
Lister v Hesley Hall Ltd [2001] UKHL 22, [2002] 1 AC 215, [2001]
2 WLR 1311, [2001] 2 All ER 769, 2001] ICR 665
Maga v Archbishop of Birmingham [2010] EWCA Civ 256, [2010]
1 WLR 1441, [2010] PTSR 1618
Majrowski v Guy’s and St Thomas’s NHS Trust [2006] UKHL 34,
[2007] 1 AC 224, [2006] 3 WLR 125, [2006] 4 All ER 395,
[2006] ICR 1199
Mattis v Pollock (trading as Flamingos Nightclub) [2003] EWCA
Civ 887, [2003] 1 WLR 2158, [2004] 4 All ER 85, [2003] ICR
13
Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (2002) 5
HKCFAR 569, [2002] 3 HKLRD 844, [2003] 1 HKC 225
Various Claimants v Catholic Child Welfare Society [2012] UKSC
56, [2013] 2 AC 1, [2012] 3 WLR 1319, [2013] 1 All ER 670,
[2013] IRLR 219
Warren v Henlys Ltd [1948] 2 All ER 935, [1948] WN 449
Cheung JA
Background
1.1 The plaintiff was assaulted by his co-worker, the 1st
defendant, in the course of their employment with the 2nd
defendant. The plaintiff sustained injuries and sought damages against
them. The 1st defendant did not contest the claim. Judgment on
liability was entered against him. The 2nd defendant disputed the
claim. Deputy High Court Judge Simon Leung assessed damages
against the 1st defendant in the sum of $600,275 with credit being
given to the employee’s compensation paid to the plaintiff in the
sum of $307,767.10. The Judge, however, dismissed the plaintiff ’s
claim against the 2nd defendant. The plaintiff now appeals against
the dismissal of his claim.
1.2 The 2nd defendant managed a residential estate known as
Palm Springs in the New Territories (the Estate). The plaintiff and
the 1st defendant were the 2nd defendant’s employees and were
assigned to work at the Estate. The 1st defendant was a security
guard and a subordinate of the plaintiff who was a customer service
supervisor.
1.3 In the early morning of 27 August 2006 a taxi with a
suspected drunken passenger on board entered the Estate without
properly passing the guard at the main gate. After the plaintiff
learned about this, he used his walkie-talkie to ask the other security
guards on duty to locate the whereabouts of the taxi. Minutes later,
the 1st defendant reported his sighting of the taxi from his position.
30
483 2015/5/11—6:13
1.4 The plaintiff proceeded to the security post where the 1st
defendant was stationed. The plaintiff took the view that it should
not have taken so long for the taxi to travel from the main gate to
the location reported by the 1st defendant and that the 1st defendant
had failed to report to him promptly. The plaintiff enquired with
the 1st defendant about the matter. The 1st defendant was not happy
with the enquiry and reacted rudely with some swearing. At that
point, the plaintiff also discovered that the 1st defendant was not
properly dressed in his uniform. The plaintiff took that as a breach
of the 1st defendant’s duty and decided to take a photograph of the
1st defendant with his camera in order to report the matter to the
employer. The 1st defendant then became agitated. He tried to
snatch the plaintiff ’s camera, hit him with his fist and used the
plaintiff ’s walkie-talkie to strike the plaintiff ’s head. As a result the
plaintiff sustained head injuries.
The Judge’s finding

2.1 The issue in this appeal is whether the 2nd defendant should
be held vicariously liable for the assault committed by the 1st
defendant on the plaintiff.
2.2 The Judge held that the 2nd defendant was not vicariously
liable because it cannot fairly be said that the 1st defendant carried
out the assault in the course of execution of his duties as a security
guard. It was the plaintiff who was supervising and enforcing
discipline on the 1st defendant at that time. In the course of that,
the 1st defendant’s outburst and act of violence towards his superior
was not at all expected in the discharge of his own duties as a
security guard and subordinate. The outburst and act of personal
spite by the 1st defendant against the plaintiff took the 1st defendant
out of the scope of the acts that could be interpreted as acts inherent
in the nature or characteristics of the 2nd defendant’s business carried
out by the 1st defendant. Nor could they be interpreted as acts
advancing the interest or purpose of the 2nd defendant. The Judge
held that it is unjust, if not absurd, to attach vicarious liability on
the part of the 2nd defendant for such act of the 1st defendant
against the plaintiff.
2.3 To complete the picture the Judge also rejected the
plaintiff ’s claim against the 2nd defendant on the basis that the 2nd
defendant was in breach of its duty as an employer or its general
duty of care towards him or in breach of statutory duties. These are
not pursued in this appeal.
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483 2015/5/11—6:13
Vicarious liability
1) The close connection test

3.1 The Court of Final Appeal in Ming An Insurance Co (HK)
Ltd v Ritz-Carlton Ltd (2002) 5 HKCFAR 569 departed from the
previous test for an employer’s vicarious liability and adopted the
“close connection test”. The previous test which was known as the
“Salmond test” was that an employee’s tort is deemed to have been
committed in the course of his employment if it is either (a)
something authorised by his employer or (b) an unauthorised mode
of doing something authorised by his employer [14]. The “close
connection test” as formulated by Bokhary PJ is that a connection
between the employee’s unauthorised tortious act and his
employment is so close as to make it fair and just to hold his
employer vicariously liable [19]. Close connection is the basic
criterion for vicarious liability in regard to all torts committed by
an employee during an unauthorised course of conduct, whether
intentional wrongdoing or mere inadvertence is involved. The
application of this test is always to be undertaken in context [25].
3.2 In that case the doorman of a hotel drove a limousine hired
by the hotel and injured two pedestrians. Part of the doorman’s
duties included acting as a “car jockey”. This involved moving cars,
and sometimes limousines in the absence of the chauffeurs, that
caused an obstruction in the hotel forecourt. The accident happened
when the doorman drove a bellboy to collect food for the employees
of the hotel. The hotel’s liability was established because although
car jockeys were not authorised to drive limousines for the purpose
of collecting food, the fact remained that car jockeys routinely drove
limousines during the course of their employment along the route
where the accident happened, albeit for a different purpose, and
that limousines were sometimes used for the purpose of collecting
food, although they were driven by a chauffeur. Further, the practice
of collecting food existed, and it was not only for the purpose of
the hotel’s employees, but also of the hotel, for it was obviously in
their interests that employees be adequately fed. Under the then
prevailing practice, collecting food was properly regarded as
incidental to the employment of the employee involved. Hence,
the “close connection” criterion was satisfied.
3.3 The Court of Final Appeal adopted the “close connection
test” from the English House of Lords decision of Lister v Hesley
Hall Ltd [2002] 1 AC 215 which in turn adopted the test from the
Supreme Court of Canada decisions of Bazley v Curry (1999) 174
DLR (4th) 45 and Jacobi v Griffiths (1999) 174 DLR (4th) 71 which
involved sexual abuse of children respectively in residential care
facilities for the treatment of emotionally troubled children and a
youth club.
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483 2015/5/11—6:13
3.4 In Lister the claimants were residents in a boarding house

attached to a school owned and managed by the defendants. The
warden of the boarding house employed by them, without their
knowledge, systematically sexually abused the claimants. The
claimants claimed damages against the defendants for the personal
injuries involved. It was held that having regard to the circumstances
of the warden’s employment, including the close contact with the
pupils and the inherent risks that it involved, there was a sufficient
connection between the work that he had been employed to do
and the acts of abuse that he had committed for those acts to be
regarded as having been committed within the scope of his
employment and the defendants should be held vicariously liable
for them.
3.5 More recently in Various Claimants v Catholic Child
Welfare Society [2013] 2 AC 1 at [35], Lord Phillips of Worth
Matravers identified policy reasons that usually make it fair, just and
reasonable to impose vicarious liability on the employer when five
criteria are met:
i) 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;
ii) the tort will have been committed as a result of activity
being taken by the employee on behalf of the employer;
iii) the employee’s activity is likely to be part of the business
activity of the employer;
iv) the employer, by employing the employee to carry on the
activity will have created the risk of the tort committed by
the employee;
v) the employee will, to a greater or lesser degree, have been
under the control of the employer.
3.6 In that case the defendants were respectively a lay Roman

Catholic order (the Institute) with lay brother teachers and the
Roman Catholic Diocese (the Diocese). The Diocese entrusted the
Institute to nominate a brother to act as headmaster and appointed
other brothers to teach in a residential school for boys. The lay
brother teachers of the Institute physically and sexually abused the
students in the school. The Diocese was held responsible for the
abuse. The issue for the Supreme Court’s determination was whether
the Institute should share joint vicarious liability. It held that the
relationship between the Institute and the brothers had enabled the
Institute to place the brothers in teaching positions and, in particular,
in the position of headmaster, who was the person largely responsible
for the running of the school; that there was thus a very close
connection between the relationship between the brothers and the
33
483 2015/5/11—6:13
Institute and the employment of the brothers as teachers in the

school; that the placement of brother teachers in a residential school
for vulnerable boys who were virtually prisoners, in the precincts
of which the brothers also resided, greatly enhanced the risk of
abuse by them if they had a propensity for such misconduct; and
that, accordingly, it was fair, just and reasonable for the Institute to
share with the diocesan bodies vicarious liability for the abuse
committed by the brothers.
2) Relevance of risk
4.1 One matter which calls for discussion is the relevance of
risk under the close connection test. Litton NPJ in Ming An
Insurance discussed the implication of risk:
[35] As stated in Winfield & Jolowicz on Tort (16th ed., 2002)

at para.20-9 the underlying idea is that the injury done
by the servant must involve a risk sufficiently inherent in
or characteristic of the employer’s business that it is just
to make the employer bear the loss.
4.2 Then at [42], he stated that:

… Hence, in seeking an answer to the question ‘Is the servant’s
wrongful act so closely connected with his employment that it
would be fair and just to hold the employer vicariously liable?’ it
must be remembered that the issue is not free standing, and matters
such as the servant’s duties at the time when the tort occurred,
whether he was acting in the interests of the employer or solely
for himself, et cetera, are still relevant. And, casting one’s eyes a little
wider, the court should also have regard to the business activities
of the employer broadly speaking and ask if the risk which gave
rise to the damage (here the servant’s reckless driving of someone
else’s limousine) was created by those activities: If they were, that
was a risk which the employer could have insured against.
4.3 Lord Phillips in Catholic Welfare Society highlighted this
point:
[74] It is not easy to deduce from the Lister case [2002] 1 AC

215 the precise criteria that will give rise to vicarious
liability for sexual abuse. The test of “close connection”
approved by all tells one nothing about the nature of the
connection. Lord Clyde and Lord Hobhouse found it
significant that the tortfeasor’s employment involved
exercising care for the victim. Only Lord Millett expressly
endorsed the importance that the Canadian decisions
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483 2015/5/11—6:13
attached to the creation of risk. This has, however, been

identified as of significance in most of the cases that have
followed.
4.4 He then reviewed cases such as Dubai Aluminium Co Ltd

v Salaam [2003] 2 AC 366, Bernard v Attorney General of Jamaica
[2004] UKPC 47, Brown v Robinson [2004] UKPC 56 (14
December 2004), PC, Majrowski v Guy's and St Thomas's NHS
Trust [2007] 1 AC 224 and Maga v Archbishop of Birmingham
[2010] EWCA Civ 256; [2010] 1 WLR 1441; [2010] PTSR 1618,
CA which considered the element of risk. He stated that the precise
criteria for imposing vicarious liability for sexual abuse are still in
the course of refinement by judicial decision but he concluded that
risk is indeed a criterion in the close connection test:
[86] Starting with the Canadian authorities a common theme

can be traced through most of the cases to which I have
referred. Vicarious liability is imposed where a defendant,
whose relationship with the abuser put it in a position to
use the abuser to carry on its business or to further its
own interests, has done so in a manner which has created
or significantly enhanced the risk that the victim or
victims would suffer the relevant abuse. The essential
closeness of connection between the relationship between
the defendant and the tortfeasor and the acts of abuse thus
involves a strong causative link.
[87] These are the criteria that establish the necessary ‘close
connection’ between relationship and abuse. I do not
think that it is right to say that creation of risk is simply
a policy consideration and not one of the criteria.
Creation of risk is not enough, of itself, to give rise to
vicarious liability for abuse but it is always likely to be an
important element in the facts that give rise to such
liability.
3) Examples of assault by employees

5.1 In Lister, Lord Millett at [80], held that employers have
long been held vicariously liable in appropriate circumstances for
assaults committed by their employees and he went on to explain
some cases in which the employer was held not liable for assaults
committed by the employees. The cases referred to such as Warren
v Henlys Ltd [1948] 2 All ER 935 and Deatons Pty Ltd v Flew
(1949) 79 CLR 370 are rather old cases. As Litton NPJ in Ming An
Insurance observed at [38], this branch of the law has been in a
state of evolution for some time, and the tendency has been toward
35
483 2015/5/11—6:13
more liberal protection of innocent third parties. He further held

that:
[39] In answering the question ‘does the prohibition limit the

sphere of employment or does it only deal with conduct
within the sphere of employment’ under the old Salmond
test, Diplock LJ (as he then was) said in Ilkiw v Samuels
[1963] 1 WLR 991 at p.1004 that the matter must be
looked at broadly; the court should not ‘dissect the
servant’s task into its component activities’. It can be said
that the twin cases in the Supreme Court of Canada,
Bazley v Curry (1999) 174 DLR (4th) 45 and Jacobi v
Griffiths (1999) 174 DLR (4th) 71, and Lister v Hesley Hall
Ltd [2002] 1 AC 215 itself, have pushed this broad
approach even wider.
5.2 The modern cases illustrated the trend. An example is

Fennelly v Connex South Eastern Ltd [2001] IRLR 390, English
Court of Appeal, judgment dated 11 December 2000. A ticket
inspector at a railway station assaulted a passenger who was suspected
by him to have passed the gate without producing the ticket. The
inspector blocked the passenger and demanded the ticket. There
were exchanges between the two but the passenger eventually
produced the ticket and walked on but was pulled back by the
inspector and was assaulted. The trial judge held the employer of
the inspector was not vicariously liable for the assault. He held that
until the assault the inspector’s acts were authorised, however, after
the passenger had walked on the employer had no interest in what
the inspector did next. He was not by then carrying out any task
which they authorised or wanted him to do. He was doing nothing
that he was authorised to do. He was not going about his employer’s
business but his own.
5.3 The decision was reversed on appeal. Buxton LJ held at
[17] that the judge had adopted too narrow an approach on the
concept of authorisation and a broader approach is required. He
held that:
Absent Mr Sparrow’s [ie the inspector’s] status as a ticket inspector
he would have had no right at all to call after Mr Fennelly [the
passenger] and to block him in this way or otherwise to impede
his progress.
5.4 He continued:
[18] Against that background I consider it artificial to say that

just because Mr Fennelly [ie the passenger] was walking
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on, what happened next — immediately next — was

divorced from what Mr Sparrow [ie the inspector] was
employed to do. The necklock sprang directly out of the
altercation. The altercation was being conducted by Mr Sparrow
on behalf of his employer, dealing as he thought appropriate with
a passenger who was not reacting as the employer would have
wished; it would not have occurred without Mr Sparrow’s power
to inspect tickets when he was on his employers’ premises. It is
difficult to say in any realistic terms that this was not all one
incident. That is underlined by the finding that the judge
made about what Mr Sparrow said when he was actually
putting Mr Fennelly into the necklock. When he said,
as the judge found and as I have already indicated, words
to the effect of ‘I have had enough of this’, he was
referring back to the aggravation and obstruction that Mr
Fennelly had caused him when he was looking at his
ticket. In my judgment therefore there are strong reasons
in this case for thinking that the judge looked at the
matter, as was said at one point of the argument, in too
nice a way, and thus described the incident in an artificial
way. (Emphasis added.)
5.5 See further: Mattis v Pollock (trading as Flamingos

Nightclub) [2003] 1 WLR 2158 and Ling Man Kuen v Chow Chan
Ming (unrep., DCPI 1445/2005, [2006] HKEC 1566) (21st August
2006).
5.6 Mr Wong, counsel for the 2nd defendant, on the other
hand referred to Cheung Chak Fui v Sun Hing Organization Plastic
Management Ltd (unrep., HCPI 91/2008, [2011] HKEC 1299) (30
September 2011). The plaintiff, a supervisor of a factory, was
assaulted by a co-worker. The plaintiff sought damages for personal
injury against the employer. The plaintiff had previously reprimanded
the co-worker about his job performance and his relationship as a
married man with a female colleague. The co-worker had made
repeated violent threats to the supervisor. The supervisor reported
these matters to the employer. One day the co-worker went to the
supervisor’s office and assaulted him. Thomas Au J held that the
employer having been made aware of the threats was negligent in
not taking reasonable measures to prevent the assault from
happening. However, he held that the employer was not vicariously
liable for the assault because the close connection test had not been
satisfied.
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483 2015/5/11—6:13
Consideration of this case

6.1 While recognising the limit imposed on appellate courts to
interfere with findings of fact by a trial judge, my view is that the
Judge in the present case has, contrary to the close connection test,
adopted too narrow an approach on the scope of employment. On
the plaintiff ’s part, he obviously was acting within the scope of his
employment when he confronted the 1st defendant about his
performance and his uniform. As the Judge found, the plaintiff was
supervising and enforcing discipline on the 1st defendant. However,
the focus on the close connection test is on the scope of employment
of the employee who carried out the unauthorised act. In this case
the 1st defendant was on duty when he suddenly lost his temper
and assaulted the plaintiff. Specifically at that moment of time his
scope of employment required him to be subject to the supervision
and discipline of the plaintiff which became an issue because the
1st defendant had failed to report promptly the location of the taxi
and properly wear his uniform. This caused the plaintiff to make
inquiries with him and to take his photograph for the purpose of
reporting the matter to the employer. In my view the 1st defendant’s
unauthorised act of assault during this moment was closely connected
with his employment.
6.2 Further the 2nd defendant manages the Estate and provides
security service in the form of security guards. The system of
supervision and discipline of these guards by a superior officer that
has been put in place by the 2nd defendant carries with it a risk that
the subordinate may react in an unauthorised way in the course of
being subject to the supervision and discipline by his superior officer.
In his finding the Judge referred to “act of personal spite” by the
1st defendant. In my view there is no evidence to support this
finding when the Judge rejected the plaintiff ’s evidence that the 1st
defendant had previously threatened him with violence. In my view
it is fair and just to hold the employer vicariously liable because this
risk can be insured against by the employer.
6.3 Mr Wong submitted that in essence what the 1st defendant
had done was an act of insubordination. He asked rhetorically why
should an employer be held vicariously liable for an act of
insubordination by his employee. In my view this begs the issue
that this Court is required to address. In the first place the term
“insubordination” is emotive. But more critically it is too general
a description when one is required to carry out a contextual
consideration to see whether there is a close connection between
the employment and the unauthorised act. In the present case the
outburst by the 1st defendant was part of the incident wholly
connected to his employment and therefore satisfies the close
connection test.
38
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6.4 As to the case of Cheung Chak Fui, it is again important

to emphasise that whether a close connection exists is very much a
contextual consideration. Unlike the present case, the decision is
based on the particular fact that the assault occurred at a time when
the parties were not engaged in work related discussions.
Conclusion
7. I would allow the appeal, set aside the judgment below and
enter judgment for the plaintiff against the 2nd defendant for the
sums as assessed together with the interest ordered by the Judge.
Costs
8. The plaintiff is to have the costs of the appeal and below.
His own costs are to be taxed in accordance with Legal Aid
Regulations.
Yuen JA
9. I agree with the judgment of Cheung JA.
Chu JA
10. I agree with the judgment of Cheung JA and the orders
set out in [7] and [8] above.
Reported by Shin Su Wen
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677
[2016] AC Mohamud v Wm Morrison Supermarkets plc (SC(E))
(SC(E))
A Supreme Court
Mohamud v Wm Morrison Supermarkets plc

[2016] UKSC 11
2015 Oct 12, 13; Lord Neuberger of Abbotsbury PSC,
B 2016 March 2 Baroness Hale of Richmond DPSC,
Lord Dyson MR, Lord Reed, Lord Toulson JJSC
Vicarious liability Employment Course of employment Petrol station

attendant following motorist back to his car and physically assaulting him
Whether appropriate test of employers liability su–ciently close connection
between employees position and his wrongful act Whether employer
C vicariously liable for assault
The claimant, having stopped at the petrol station at one of the defendants
supermarkets, went into the sales kiosk and asked the defendants employee if it was
possible to print o› some documents which the claimant had stored on a USB stick.
The employee refused the request in an o›ensive manner, and in the exchange of
words which followed he used racist, abusive and violent language towards the
claimant and ordered him to leave. He then followed the claimant as he walked back
D
to his car and, having told him never to return, subjected him to a serious physical
attack. The claimant brought an action in the county court for damages for assault
and battery against the defendant on the ground that it was vicariously liable for the
assault. The judge made a nding that the employee had assaulted the claimant but,
dismissing the claim, held that the defendant was not vicariously liable for that
assault since the employees actions had been purely for reasons of his own and
E
beyond the scope of his employment, so that there was an insu–ciently close
connection between the assault and the employment. The Court of Appeal dismissed
an appeal by the claimant.
On appeal by the claimant, contending that the test of vicarious liability should
be broadened so as to turn, in the case of a tort committed by an employee, on
whether a reasonable observer would have considered the employee to be acting in
the capacity of a representative of the employer at the time of committing the tort
F Held, (1) that, on a claim that an employer was vicariously liable for a tort
committed by one of its employees, the established test, which was to inquire as to the
nature of the employees job and then to ask whether there was su–cient connection
between that job and the employees wrongful conduct to make it right, as a matter of
social justice, for the employer to be held liable, remained good without need of
further renement, albeit that it was imprecise and required the court to make an
evaluative judgment in each case having regard to the circumstances (post,
G paras 44—46, 50, 53—54).
Lister v Hesley Hall Ltd [2002] 1 AC 215, HL(E) and Dubai Aluminium Co Ltd v
Salaam [2003] 2 AC 366, HL(E) applied.
Warren v Henlys Ltd [1948] 2 All ER 935, Keppel Bus Co Ltd v Ahmad [1974]
1 WLR 1082, PC and Various Claimants v Catholic Child Welfare Society [2013]
2 AC 1, SC(E) considered.
(2) Allowing the appeal, that, applying that test, since the job of the defendants
H employee had been to attend to customers and to respond to their inquiries, and since
there had been an unbroken sequence of events between his response to the
claimants initial inquiry and his following him onto the forecourt and ordering him
never to return, which he had reinforced by violence, the employees conduct, albeit a
gross abuse of his position, had been in connection with the job which the defendant
had entrusted to him; and that, accordingly, there was su–cient connection between
' 2016 The Incorporated Council of Law Reporting for England and Wales
82
678
Mohamud v Wm Morrison Supermarkets plc (SC(E))
(SC(E)) [2016] AC
the employees job and his wrongful conduct to hold the defendant vicariously liable A
for the assault on the claimant (post, paras 47, 57).
Decision of the Court of Appeal [2014] EWCA Civ 116; [2014] ICR D19; [2014]
2 All ER 990 reversed.
The following cases are referred to in the judgments:

Barwick v English Joint Stock Bank (1867) LR 2 Ex 259
Bazley v Curry [1999] 2 SCR 534 B
Bernard v Attorney General of Jamaica [2004] UKPC 47; [2005] IRLR 398, PC
Boson v Sandford (1691) 2 Salk 440
Brown v Robinson [2004] UKPC 56, PC
Central Motors (Glasgow) Ltd v Cessnock Garage and Motor Co 1925 SC 796, Ct of
Sess
Cox v Ministry of Justice [2016] UKSC 10; [2016] AC 660; [2016] 2 WLR 806,
SC(E) C
Deatons Pty Ltd v Flew (1949) 79 CLR 370
Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366; [2002]
3 WLR 1913; [2003] 1 All ER 97, HL(E)
Hern v Nichols (1708) 1 Salk 289
Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317, HL(Sc)
Ilkiw v Samuels [1963] 1 WLR 991; [1963] 2 All ER 879, CA
Keppel Bus Co Ltd v Ahmad [1974] 1 WLR 1082; [1974] 2 All ER 700; [1974] RTR D
504, PC
Lister v Hesley Hall Ltd [2001] UKHL 22; [2002] 1 AC 215; [2001] 2 WLR 1311;
[2001] ICR 665; [2001] 2 All ER 769, HL(E)
Lloyd v Grace, Smith & Co [1912] AC 716, HL(E)
Mackay v Commercial Bank of New Brunswick (1874) LR 5 PC 394, PC
Majrowski v Guys and St Thomass NHS Trust [2006] UKHL 34; [2007] 1 AC 224;
[2006] 3 WLR 125; [2006] ICR 1199; [2006] 4 All ER 395, HL(E) E
Middleton v Fowler (1698) 1 Salk 282
Pettersson v Royal Oak Hotel Ltd [1948] NZLR 136
Rose v Plenty [1976] 1 WLR 141; [1975] ICR 430; [1976] 1 All ER 97, CA
Turberville v Stampe (1698) 1 Ld Raym 264; Comb 459
Various Claimants v Catholic Child Welfare Society [2012] UKSC 56; [2013] 2 AC 1;
[2012] 3 WLR 1319; [2013] 1 All ER 670, SC(E)
Warren v Henlys Ltd [1948] 2 All ER 935
F
Waylands (Sir Robert) Case (1707) 3 Salk 234
The following additional cases were cited in argument:

Fennelly v Connex South Eastern Ltd [2001] IRLR 390, CA
Graham v Commercial Bodyworks Ltd [2015] EWCA Civ 47; [2015] ICR 665,
CA
Gravil v Carroll [2008] EWCA Civ 689; [2008] ICR 1222, CA G
Mattis v Pollock (trading as Flamingos Nightclub) [2003] EWCA Civ 887; [2003]
1 WLR 2158; [2003] ICR 1335; [2004] 4 All ER 85, CA
Vaickuviene v J Sainsbury plc [2013] CSIH 67; 2014 SC 147, Ct of Sess
Weddall v Barchester Healthcare Ltd; Wallbank v Wallbank Fox Designs Ltd [2012]
EWCA Civ 25; [2012] IRLR 307, CA
Wilson v Exel UK Ltd (trading as Exel) [2010] CSIH 35; 2010 SLT 671, Ct of
Sess H
APPEAL from the Court of Appeal
On 7 November 2012 Mr Recorder Avtar Khangure QC, sitting in the
Birmingham County Court, dismissed a claim for damages by the claimant,
Ahmed Mohamud, against the defendant, Wm Morrison Supermarkets plc,
83
679
(SC(E))
Argument
A for alleged assault and battery committed on him by one of the defendants
employees, a sales assistant, holding that the employee had assaulted the
claimant but that the defendant was not vicariously liable for that assault.
The claimant appealed. On 13 February 2014 the Court of Appeal (Arden,
Treacy and Christopher Clarke LJJ) dismissed the appeal [2014] EWCA Civ
116; [2014] 2 All ER 990.
On 24 July 2014 the Supreme Court (Lord Kerr of Tonaghmore, Lord
B
Wilson and Lord Hodge JJSC) granted the claimant permission to appeal.
On 12 November 2014, following the claimants death on 9 August
2014 from an illness unrelated to the assault, the Supreme Court allowed
the substitution of AM Mohamud, brother of the deceased, as claimant,
whereupon he appealed. The sole issue for the court, as stated in the
parties agreed statement of facts and issues, was whether the defendant, a
C retail business, should be vicariously liable for the assault committed by its
sales assistant against a customer in the circumstances found by the
recorder.
The facts are stated in the judgment of Lord Toulson JSC.
Joel Donovan QC and Adam Ohringer (instructed by Bar Pro Bono Unit)
for the claimant.
D
The traditional test for vicarious liability for employee torts is whether
the employees wrongful conduct falls within the course and scope of the
employment in that it is either an act authorised by the employer or is so
connected with acts that the employer has authorised that it can be rightly
regarded as an (albeit improper) mode of doing what has been authorised:
see Salmond on Torts, 1st ed (1907), pp 83—84.
E The second part of that test has been developed by the courts to
emphasise that the imposition of vicarious liability is justied in pursuit of
fair compensation for the victims of torts, having regard to the fact that an
employer created certain risks through the activities of its agents. The
fundamental question is now whether the wrongful act was so closely
connected with the miscreants employment that it would be fair and just to
hold the employer vicariously liable: see Bazley v Curry [1999] 2 SCR 534,
F
paras 26, 29—36, 41 and Lister v Hesley Hall Ltd [2002] 1 AC 215, paras 27,
28. This requires the court to make an evaluative judgment in each case (see
Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366, para 26) which has
resulted in arbitrary distinctions, founding liability in one set of
circumstances but not another: see Weddall v Barchester Healthcare Ltd;
Wallbank v Wallbank Fox Designs Ltd [2012] IRLR 307; Gravil v Carroll
G [2008] ICR 1222; Vaickuviene v J Sainsbury plc 2014 SC 147 and Graham v
Commercial Bodyworks Ltd [2015] ICR 665.
The Court of Appeals decision is manifestly unjust and highlights the
need for the law to develop further: see Various Claimants v Catholic
Child Welfare Society [2013] 2 AC 1, para 19. The law must take proper
account of the social shift towards an extended concept of corporate
responsibility. Organisations must take responsibility for the acts of their
H
representatives. Just as religious orders are legally accountable for the
sexual misconduct of their brethren and football clubs liable for the actions
of their players on the eld of play, so a retailer ought to be liable for
violence inicted by its sales assistants in interactions with customers.
The test should therefore be rened by asking whether an authorised
84
680
(SC(E)) [2016] AC
Argument
representative of the principal has committed a wrong in circumstances A

where the reasonable observer would consider the wrongdoer (leaving
aside the heinousness of his behaviour) to be acting in a representative
capacity. Under that test, an employer would only be vicariously liable for
the actions of those whom it allowed to act as its representatives while they
were acting in that capacity. It would be responsible for the unlawful acts
of the human embodiment of the corporation. A close connection will B
always exist between the employees role as a representative of the
corporation and any act whether lawful or not committed while he is
acting in that capacity, but the quality of that connection to the scope of
the employees duties will often be less than that previously held to be the
necessary foundation for liability.
The question in the instant case would therefore be: can the miscreant
fairly be viewed as acting as his employers representative at the time of his C
misconduct? The answer is yes and so vicarious liability should result.
Where a lawful visitor to premises is subjected to an unprovoked assault by
the occupiers employee, justice requires that the economic risk of that
assault should ordinarily be carried by the occupier, not the victim.
Alternatively, vicarious liability can be founded on the basis that
occupiers of land assume a specic duty to their visitors. If that duty is D
breached by an employer, liability arises whether or not the discharge of the
duty has been entrusted to an employee: see Listers case [2002] 1 AC 215,
paras 55, 60. Here, the defendant owed a duty of care as occupier to the
claimant to take reasonable care for his safety whilst on the premises. That
duty of care fell to be discharged in part by the employee who assaulted the
claimant. That employee having failed to discharge that duty on behalf of
the defendant in breach of his contract of employment, indeed having E
outed it, his employer should be vicariously liable.
Benjamin Browne QC, Roger Harris and Isabel Barter (instructed by
Gordons LLP, Bradford) for the defendant.
The assault on the claimant by the defendants employee was not
su–ciently connected to the duties which he was engaged to perform so as to
fall within the close connection test. F
The close connection test rst formulated by the House of Lords in Lister
v Hesley Hall Ltd [2002] 1 AC 215 has been approved by the House of Lords
(Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366 and Majrowski v
Guys and St Thomass NHS Trust [2007] 1 AC 224), the Privy Council
(Bernard v Attorney General of Jamaica [2005] IRLR 398 and Brown v
Robinson [2004] UKPC 56) and the Supreme Court: see Various Claimants v G
Catholic Child Welfare Society [2013] 2 AC 1. It is therefore well
established and should not be expanded.
The test, however, is subject to the proviso that a wrong which is only
coincidentally linked to the activity of the employer and the duties of the
employee cannot justify the imposition of vicarious liability on the
employer: see Bazley v Curry [1999] 2 SCR 534, paras 31, 36. The fact that
H
the employment provided the employee with the opportunity to commit the
tort will not su–ce: see Vaickuviene v J Sainsbury plc 2014 SC 147; Wilson v
Exel UK Ltd (trading as Exel) 2010 SLT 671 and Graham v Commercial
Bodyworks Ltd [2015] ICR 665 (cf cases where the employee is engaged to
restrain customers or to interfere with the progress of the public: see Mattis v
85
681
(SC(E))
Argument
A Pollock (trading as Flamingos Nightclub) [2003] 1 WLR 2158 and Fennelly

v Connex South Eastern Ltd [2001] IRLR 390). An employer will therefore
not be liable for random attacks committed by employees when the nature of
the business did not materially enhance the risk of the tort occurring. Some
real connection is necessary between what the employer was asking the
employee to do and the tortious act.
The test thus strikes a reasonable balance between the interests of
B
claimants and the interests of employers. It is both clear and reasonable. By
contrast, the claimants proposed new test is uncertain and lacks the body of
cases on the existing test to guide practitioners.
The assault did not arise here because of any factor inherent in the nature
of the defendants enterprise. It was not a case where any power was
conferred on the tortfeasor in relation to his victim, nor was there was any
C special vulnerability of the claimant to bring into play a relationship of trust
and authority. The case should properly be categorised as an incidental or
random attack: see the Bazley case [1999] 2 SCR 534, para 42.
Donovan QC in reply.
Whatever test the court adopts, it must take a broad view of what acts of
an employee fall within their employment by asking whether the act in
D question is within the eld of activities assigned to the employee: see
Central Motors (Glasgow) Ltd v Cessnock Garage and Motor Co 1925 SC
796, 802. This employees eld of activities embraced customer interaction
in close proximity and as such forged the necessary link between the
employment and the assault.
The court took time for consideration.

E
2 March 2016. The following judgments were handed down.
LORD TOULSON JSC (with whom LORD NEUBERGER OF

ABBOTSBURY PSC, BARONESS HALE OF RICHMOND DPSC, LORD
DYSON MR and LORD REED JSC agreed)
F
1 Vicarious liability in tort requires, rst, a relationship between the
defendant and the wrongdoer and, secondly, a connection between that
relationship and the wrongdoers act or default, such as to make it just that
the defendant should be held legally responsible to the claimant for the
consequences of the wrongdoers conduct. In this case the wrongdoer was
employed by the defendant, and so there is no issue about the rst
G requirement. The issue in the appeal is whether there was su–cient
connection between the wrongdoers employment and his conduct towards
the claimant to make the defendant legally responsible. By contrast, Cox v
Ministry of Justice [2016] AC 660, which was heard by the same division of
the court at the same time, is concerned with the rst requirement. The
judgments are separate because the claims and issues are separate, but they
are intended to be complementary to each other in their legal analysis. In
H
preparing this judgment I have had the benet of Lord Reed JSCs judgment
in Cox v Ministry of Justice, and I agree fully with his reasoning and
conclusion.
2 The question in this appeal concerns an employers vicarious liability
in tort for an assault carried out by an employee. It is a subject which has
86
682
(SC(E)) [2016] AC
Lord Toulson JSC
troubled the courts on numerous occasions and the case law is not entirely A
consistent. In addressing the issues which it raises, it will be necessary to
examine how the law in this area has developed, what stage it has reached
and whether it is in need of signicant change.
Facts
3 In this case the victim was a customer. I will call him the claimant B
although he sadly died from an illness unrelated to his claim before his
appeal was heard by this court. The respondent company is a well known
operator of a chain of supermarkets. It has premises in Small Heath,
Birmingham, which include a petrol station. The petrol station has a kiosk
with the usual display of goods and a counter where customers pay for their
purchases. One of the companys employees was Mr Amjid Khan. His job
C
was to see that the petrol pumps and the kiosk were kept in good running
order and to serve customers.
4 The claimant was of Somali origin. On the morning of 15 March
2008 he was on his way to take part with other members of his community
in an event in London. While he was at the petrol station he decided to
inquire whether it would be possible to print some documents from a USB
stick which he was carrying. D
5 The trial judge, Mr Recorder Khangure QC, accepted in full the
claimants account of what followed. The claimant went into the kiosk and
explained to the sta› what he wanted. There were two or three sta› present.
Mr Khan, who was behind the counter, replied by saying We dont do such
shit. The claimant protested at being spoken to in that manner. Using foul,
racist and threatening language, Mr Khan ordered the claimant to leave.
E
The claimant walked out of the kiosk and returned to his car by the air
pump. He was followed by Mr Khan. The claimant got into his car and
switched on the engine, but before he could drive o› Mr Khan opened the
front passenger door and told him in threatening words never to come back.
The claimant told Mr Khan to get out of the car and shut the passenger door.
Instead, Mr Khan punched the claimant on his left temple, causing him pain
and shock. The claimant switched o› the engine and got out in order to F
walk round and close the passenger door. At this point Mr Khan again
punched him in the head, knocked him to the oor and subjected him to a
serious attack, involving punches and kicks, while the claimant lay curled up
on the petrol station forecourt, trying to protect his head from the blows. In
carrying out the attack Mr Khan ignored instructions from his supervisor,
who came on the scene at some stage and tried to stop Mr Khan from G
behaving as he did. The judge concluded that the reasons for Mr Khans
behaviour were a matter of speculation. The claimant himself had said and
done nothing which could be considered abusive or aggressive.
The trial judges decision

6 In a detailed and impressive judgment, the judge reviewed the
H
principal authorities. He expressed great sympathy for the claimant but
concluded that the company was not vicariously liable for Mr Khans
unprovoked assault. His principal reason was that although Mr Khans job
involved some interaction with customers and members of the public who
attended the kiosk, it involved nothing more than serving and helping them.
87
683
(SC(E))
Lord Toulson JSC
A There was not a su–ciently close connection between what he was employed
to do and his tortious conduct for his employer to be held vicariously liable,
applying the close connection test laid down in Lister v Hesley Hall Ltd
[2002] 1 AC 215 and followed in later cases including Dubai Aluminium Co
Ltd v Salaam [2003] 2 AC 366. A further reason given by the judge was that
Mr Khan made a positive decision to come out from behind the counter and
follow the claimant out of the kiosk in contravention of instructions given to
B
him.
The Court of Appeals decision

7 The Court of Appeal (Arden, Treacy and Christopher Clarke LJJ)
[2014] ICR D19 upheld the judges decision that the claim against the
company failed the close connection test. The main points made in the
C
judgments were that Mr Khans duties were circumscribed. He was not
given duties involving a clear possibility of confrontation or placed in a
situation where an outbreak of violence was likely. The fact that his
employment involved interaction with customers was not enough to make
his employers liable for his use of violence towards the claimant.
8 Christopher Clarke LJ added that if the question had been simply
D whether it would be fair and just for the company to be required to
compensate the claimant for his injuries from the assault, there would be
strong grounds for saying that it should. The assault arose out of an
interchange which began when the claimant asked to be supplied with a
service which he thought the company could provide. Mr Khan, whose job
it was to deal with such a request, followed up his refusal with an apparently
motiveless attack on the customer, who was in no way at fault. The
E
customer was entitled to expect a polite response. Instead he was struck on
the head and kicked when on the ground. In those circumstances it could be
said that the employer could fairly be expected to bear the cost of
compensation, rather than that the victim should be left without any civil
remedy except against an assailant who was unlikely to be able to pay full
compensation. However, he concluded that this was not the legal test, and
F that the fact that Mr Khans job involved interaction with the public did not
provide the degree of connection between his employment and the assault
which was necessary for the employer to be held vicariously liable.
Christopher Clarke LJ said that he was attracted for a time by the
proposition that the assault could be looked at as a perverse execution of
Mr Khans duty to engage with customers, but he considered that such an
G
approach parted company with reality.
Grounds of appeal
9 In this court the claimants primary argument was that the time has
come for a new test of vicarious liability. In place of the close connection
test the courts should apply a broader test of representative capacity. In
the case of a tort committed by an employee, the decisive question should be
H
whether a reasonable observer would consider the employee to be acting in
the capacity of a representative of the employer at the time of committing the
tort. A company should be liable for the acts of its human embodiment. In
the present case, Mr Khan was the companys employed representative in
dealing with a customer. What mattered was not just the closeness of the
88
684
(SC(E)) [2016] AC
Lord Toulson JSC
connection between his duties to his employer and his tortious conduct, but A
the setting which the employer had created. The employer created the
setting by putting the employee into contact and close physical proximity
with the claimant. Alternatively, it was argued that the claimant should in
any event have succeeded because he was a lawful visitor to the premises and
Mr Khan was acting within the eld of activities assigned to him in dealing
with the claimant.
B
Origins and development of vicarious liability

10 The development of the doctrine of vicarious liability can be traced
to a number of factors; in part to legal theories, of which there have been
several; in part to changes in the structure and size of economic and other
(e g charitable) enterprises; and in part to changes in social attitudes and the
courts sense of justice and fairness, particularly when faced with new C
problems such a cases of sexual abuse of children by people in a position of
authority.
11 According to Holdsworths A History of English Law (1908) vol 3,
pp 383—387 in medieval times the general principle was that a master was
only liable at civil law for misdeeds of his servants if done by his command
and consent. It would be against all reason, said counsel in the reign of D
Henry IV, to impute blame or default to a man, when he has none in him,
for the carelessness of his servants cannot be said to be his act (YB 2 Hy IV
Pasch pl 5). But there were some exceptions, which today would be classed
as instances of non-delegable duty. Liability for damage by re was an
example. The law imposed on house holders a duty to keep their res from
damaging their neighbours. If a re was caused by a servant or guest, and it
damaged a neighbours house, the owner was liable. He could escape E
liability only by showing that the re originated from the act of a stranger
(YB 2 Hy IV Pasch pl 6).
12 The 17th century was a century of expansion of commerce and
industry, and vicarious liability began to be broadened. Sir John Holt CJ
was particularly inuential in this development. In Boson v Sandford (1691)
2 Salk 440 a shipper of goods sued the ship owner for damage caused by the F
negligence of the master. Eyre J held that there was no di›erence between a
land carrier and a water carrier, and therefore the owners were under a
special liability as carriers for the acts of their servants; but Holt CJ rested his
judgment on the broad principle that whoever employs another is
answerable for him, and undertakes for his care to all that make use of him.
(The action failed on a technical pleading point).
13 In Turberville v Stampe (1698) 1 Ld Raym 264, the plainti› G
complained that the defendants servant lit a re on heath land which
destroyed the heath growing on the plainti›s land. The majority of the
judges held that the plainti› had a cause of action under the medieval rule
about liability for re; but Holt CJ doubted whether that rule applied to res
other than in houses, and he based liability (according to the report in Comb)
on the broader ground that if my servant doth anything prejudicial to
H
another, it shall bind me, when it may be presumed that he acts by my
authority, being about my business.
14 Holt CJ did not conne this principle to cases of negligence. In Hern
v Nichols (1708) 1 Salk 289, the plainti› brought an action on the case for
deceit, alleging that he bought several parcels of silk under a fraudulent
89
685
(SC(E))
Lord Toulson JSC
A representation by the defendants factor that it was another kind of silk. The
factor was operating overseas and there was no evidence of deceit on the
part of the defendant personally. Holt CJ held that the defendant was
nevertheless liable for seeing somebody must be a loser by this deceit, it is
more reason that he that employs and puts a trust and condence in the
deceiver should be a loser, than a stranger.
15 Holt CJ gave the same explanation for the development of the
B
principle in Sir Robert Waylands Case (1707) 3 Salk 234:
the master at his peril ought to take care what servant he employs;
and it is more reasonable that he should su›er for the cheats of his servant
than strangers and tradesmen.
16 Holt CJ also held that for the master to be liable the servants act had
C to be within the area of the authority given to him: Middleton v Fowler
(1698) 1 Salk 282.
17 Holdsworth noted that the rst case in which the modern principle
can begin to be seen was the admiralty case of Boson v Sandford 2 Salk 440,
and he considered it not unlikely that necessities arising from the demands of
the commercial world, and the inuence of Roman law on the admiralty
courts, led to the introduction of ideas which then permeated to the common
D
law courts: A History of English Law, vol 8, p 476. He also observed that
this was only one of the inuences and that a number of reasons were put
forward to explain the basis of vicarious liability. These he summarised as
follows, at p 477:
It was sometimes put on the ground that the master by implication
undertakes to answer for his servants tortwhich is clearly not true.
E
Sometimes it was put on the ground that the servant had an implied
authority so to actwhich again is clearly not true. Sometimes it was
grounded on the ction that the wrong of the servant is the wrong of the
master, from which the conclusion was drawn that the master must be
liable because no man shall be allowed to make any advantage of his own
wrong and sometimes on the ground that the master who chooses a
F careless servant is liable for making a careless choice. Blackstone gives all
these reasons for this principle. In addition, he deals with the totally
di›erent case where a master has actually authorised the commission of a
tort; and cites most of the mediaeval cases of vicarious liability with the
special reasons for each of them. It is not surprising that he should take
refuge in the maxim qui facit per alium facit per se or that others should
have used in a similar way the maxim respondeat superior. His
G
treatment of the matter illustrates the confusion of the authorities; and it
is noteworthy that he does not allude to the true reason for the rulethe
reason of public policywhich Holt CJ, gave in Hern v Nichols and in
Waylands Case.
18 In Barwick v English Joint Stock Bank (1867) LR 2 Ex 259, 265
Willes J described it as settled since Holt CJs time that a principal is
H
answerable for the act of an agent in the course of his business, but it was
argued in that case (despite the decision in Hern v Nichols 1 Salk 289) that a
principal was not liable for a fraudulent act of his agent. Willes J rejected
that argument, holding that no sensible distinction can be drawn between
the case of fraud and the case of any other wrong. He cited authorities in
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which the doctrine had been applied, for example, in cases of direct trespass A
to goods and false imprisonment, and he observed, at p 266:
In all these cases it may be said, as it was said here, that the master has
not authorised the act. It is true, he has not authorised the particular act,
but he has put the agent in his place to do that class of acts, and he must be
answerable for the manner in which the agent has conducted himself in
doing the business which it was the act of his master to place him in. B
19 His judgment gave rise to di–culties of a di›erent kind because it

included the following statement, at p 265:
The general rule is, that the master is answerable for every such
wrong of the servant or agent as is committed in the course of the service
and for the masters benet, though no express command or privity of the
C
master be proved. (Emphasis added.)
20 The words in italics were used in later cases to support the argument
that in order to establish vicarious liability it was necessary to show that the
employees misdeed was committed for the employers benet. This
argument was rejected by the House of Lords in the landmark case of Lloyd
v Grace, Smith & Co [1912] AC 716. A solicitors clerk, who was entrusted
D
by the defendant rm with managing its conveyancing department,
defrauded the plainti›, who had come to the rm for advice about two
properties left to her by her late husband. He advised her to sell and
procured her signature on documents conveying the properties to himself,
which he disposed of for his own benet. It was held that the rm was liable
for his fraud. Lord Macnaghten, who gave the leading judgment (with
which Lord Loreburn LC and Lord Atkinson agreed), and Lord Halsbury E
both referred with approval to the general principle enunciated by Holt CJ:
pp 726—727 and 732.
21 Lord Macnaghten, at pp 735—736, also endorsed Lord Blackburns
interpretation of Barwicks case in Houldsworth v City of Glasgow Bank
(1880) 5 App Cas 317, 339, namely that the substantial point decided in that
case was that an innocent principal was civilly responsible for the fraud of
F
his authorised agent, acting within his authority, to the same extent as if it
was his own fraud.
22 Lord Macnaghten recognised the di–culty of trying to give a precise
meaning to the expression within his authority. He referred, at
pp 732—734, to the discussion of the subject by Sir Montague Smith in
Mackay v Commercial Bank of New Brunswick (1874) LR 5 PC 394, 410,
who observed that, since it may be generally assumed that, in mercantile G
transactions, principals do not authorise their agents to act fraudulently,
frauds are beyond the agents authority in the narrowest sense of which the
expression admits; but that so narrow a sense would be opposed to justice
and so a wider construction had been put on the words, and that it was
di–cult to dene how far it went. Lord Macnaghten, at p 736, agreed that
what is meant by the expressions acting within his authority, acting in the
H
course of his employment and acting within the scope of his agency (as
applied to an agent) is not easy to dene, but he said that, whichever
expression is used, it must be construed liberally.
23 Lord Macnaghten noted that it was within the scope of the clerks
employment to advise clients regarding the best way to sell property and the
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A execution of any necessary documents. He concluded that the clerk was

therefore acting within the scope of his employment. Lord Macnaghten also
made the broader point that it would be unjust if the rm were not held
liable. The clerk was its accredited representative: p 738. It was right that
the loss from his fraud should be su›ered by the person who placed him in
that position rather than the client who dealt with him as the rms
representative.
B
24 Although taking properties from the plainti› was far removed from
what the wrongdoer was employed to do, the justice of the decision is
obvious. The wrongdoer was trusted both by his rm and by its client. They
were each innocent, but one of them had to bear the loss, and it was right
that it should be the employer on the principle stated by Holt CJ in Hern v
Nichols 1 Salk 289. The rm employed the wrongdoer and placed him in a
C position to deal with the claimant; he abused that position and took
advantage of her. It was fairer that the rm should su›er for the cheating by
their employee than the client who was cheated.
25 In 1907 Salmond published the rst edition of his textbook on the
law of torts, Salmond on Torts. He dened a wrongful act by a servant in
the course of his employment as either (a) a wrongful act authorised by the
master or (b) a wrongful and unauthorised mode of doing some act
D
authorised by the master, with the amplication that a master is liable for
acts which he has not authorised if they are so connected with acts which he
has authorised, that they may rightly be regarded as modesalthough
improper modesof doing them: pp 83—84.
26 Salmonds formula, repeated in later editions, was cited and applied
in many cases, sometimes by stretching it articially; but, even with
E stretching, it was not universally satisfactory. The di–culties in its
application were particularly evident in cases of injury to persons or
property caused by an employees deliberate act of misconduct.
27 In Pettersson v Royal Oak Hotel Ltd [1948] NZLR 136 a barman
refused to serve a drunken customer with more alcohol. As the customer
was on his way out of the premises, he threw a glass at the barman which
broke in pieces at his feet. The barman picked up a piece of the broken glass
F
and threw it back at the departing customer, but missed him and injured the
eye of another customer, who sued for damages. The trial judge found that
the barman threw the piece of glass not in order to expedite the departure
of the troublesome customer, but as an expression of his personal
resentment at the glass being thrown at him. He found for the claimant and
his judgment was upheld by the Court of Appeal.
G 28 The Salmond formula was cited in argument. The Court of Appeal
held that the barmans act was an improper mode of doing his job of keeping
order in the bar and avoiding altercations, although at the time the customer
was leaving. The justice of the result is obvious. The claimant was struck in
the eye by a piece of glass thrown by the barman who was on duty, and there
would be something wrong with the law if he was not entitled to
compensation from the company which employed the barman. A barman
H
needs to be capable of acting with restraint under provocation, for the safety
of other customers, and if the proprietor engaged someone who was
incapable of doing so and who injured an innocent customer, it would be
wrong for the customer to be left with his only remedy against the barman.
But to rationalise the result by describing the barmans loss of temper and act
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of retaliation as a mode, but improper mode, of keeping order and avoiding A

altercation is an unnatural use of words.
29 Deatons Pty Ltd v Flew (1949) 79 CLR 370 had similarities to
Petterssons case but was decided di›erently. According to the jurys verdict,
the claimant was the victim of an unprovoked attack by a barmaid on duty
in a hotel when he asked her for the manager. She threw a glass of beer over
him and then threw the glass in his face, causing him the loss of sight in one
B
eye. The High Court of Australia held that there was no basis for nding
that the barmaid was acting in the course of her employment. They rejected
the argument that her conduct was incidental to her employment in that it
was a method, though an improper method, of responding to an inquiry
from a customer. They also rejected the argument, which had succeeded in
Petterssons case, that her conduct was an improper mode of keeping order.
Dixon J gave two reasons: rst, that she did not throw the glass in the course C
of keeping discipline, and secondly, that she was not in charge of the bar, but
was working under the supervision of another woman.
30 I agree that it was tortuous and articial to describe the barmaids
conduct as a mode of performing what she employed to do, but that does not
make the result just. In a broader sense it occurred in the course of her
employment. She was employed by the hotel proprietor to serve customers.
D
She was approached in that capacity by a customer, and ordinary members
of the public would surely expect the company who employed her to serve
customers to have some responsibility for her conduct towards them. And it
surely cannot be right that the measure of the companys responsibility
should depend on whether she was the head barmaid or an assistant. The
customer would have no knowledge what were the exact limits of her
responsibilities. E
31 In Warren v Henlys Ltd [1948] 2 All ER 935 a customer at a petrol
station had an angry confrontation with the petrol station attendant, who
wrongly suspected him of trying to make o› without payment. The
customer became enraged at the manner in which he was spoken to by the
attendant. After paying for the petrol, the customer saw a passing police car
and drove o› after it. He complained to the police o–cer about the
F
attendants conduct and persuaded the o–cer to return with him to the
petrol station. The o–cer listened to both men and indicated that he did not
think that it was a police matter, whereupon the customer said that he would
report the attendant to his employer. The o–cer was on the point of leaving,
when the attendant punched the customer in the face, knocking him to the
ground.
32 Hilbery J held that the assault was not committed in the course of the G
attendants employment, applying the Salmond formula. By the time that
the assault happened the customers business with the petrol station had
ended, the petrol had been paid for and the customer had left the premises.
When he returned with the police o–cer it was for the purpose of making a
personal complaint about the attendant. The attendant reacted violently to
being told that the customer was going to report him to his employer, but
H
there was no basis for holding the employer vicariously liable for that
behaviour. The judge was right to dismiss the customers claim against the
petrol company. At the time of the incident the relationship between the
plainti› and the attendant had changed from that of customer and
representative of the petrol company to that of a person making a complaint
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A to the police and the subject of the complaint. In Lister v Hesley Hall Ltd
[2002] 1 AC 215, para 80 Lord Millett commented that the better view may
be that the employer was not liable because it was no part of the duties of the
pump attendant to keep order, but there is no suggestion in the report of the
case that there was any other employee in practical charge of the forecourt
and cash desk area. If the attendant had punched the customer because he
B
believed, rightly or wrongly, that the customer was leaving without
payment, I would regard such conduct as occurring within the course of his
employment.
33 In Keppel Bus Co Ltd v Ahmad [1974] 1 WLR 1082 the plainti› was
travelling in a bus when the conductor treated an elderly lady passenger in a
high-handed and rude fashion. The plainti› remonstrated with him. An
altercation followed in which each tried to hit the other. They were
C separated by the passengers, but the conductor struck the plainti› in the eye
with his ticket punch, causing loss of sight in the eye. The trial judge and the
Singapore Court of Appeal held that the bus company was vicariously liable,
but the Privy Council decided otherwise.
34 The Board applied the Salmond formula. It held that the
conductors conduct could not be described as a wrong mode of performing
D the work which he was expressly or impliedly authorised to do. He could
not be described as maintaining order in the bus; if anyone was keeping
order in the bus, it was the passengers. The Board rejected the argument that
his job could be described as managing the bus and that his conduct arose
out of his power and duty to do so. The case illustrates again the
awkwardness of the Salmond formula when applied to such situations.
Looked at more broadly, the bus company selected the conductor for
E employment and put him in charge of the passenger area of the bus. He
abused the position of authority which his employment gave him. Because
he was throwing his weight around as the conductor, the plainti› objected.
Because the conductor objected to what he appeared to regard as
interference with the exercise of his authority, he struck the plainti› in the
face. (The trial judge summarised it by saying that He was in e›ect telling
F the plainti› by his act not to interfere with him in his due performance of his
duties: p 1084.) In such circumstances it was just that the passenger should
be able to look to the company for compensation.
35 In two noteworthy cases the court took a broader approach to the
question of scope of employment. Their signicance is enhanced by the fact
that they were cited with approval in Lister v Hesley Hall Ltd.
36 In Central Motors (Glasgow) Ltd v Cessnock Garage and Motor Co
G 1925 SC 796, 802, Lord Cullen said:
The question is not to be answered merely by applying the test
whether the act in itself is one which the servant was employed or ordered
or forbidden to do. The employer has to shoulder responsibility on a
wider basis; and he may, and often does, become responsible to third
parties for acts which he has expressly or impliedly forbidden the servant
H
to do . . . It remains necessary to the masters responsibility that the
servants act be one done within the sphere of his service or the scope of
his employment, but it may have this character although it consists in
doing something which is the very opposite of what the servant has been
intended or ordered to do, and which he does for his own private ends.
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An honest master does not employ or authorise his servant to commit A

crimes of dishonesty towards third parties; but nevertheless he may incur
liability for a crime of dishonesty committed by the servant if it was
committed by him within the eld of activities which the employment
assigned to him, and that although the crime was committed by the
servant solely in pursuance of his own private advantage.
The expression within the eld of activities assigned to the employee is B
helpful. It conjures a wider range of conduct than acts done in furtherance
of his employment.
37 In Rose v Plenty [1976] 1 WLR 141 a milk roundsman paid a 13-
year-old boy to help him collect and deliver milk bottles, in disregard of his
employers rule prohibiting children from being carried on milk oats. The
boy was injured when he fell o› a milk oat as a result of the employees
C
negligent driving. The trial judge dismissed the boys claim against the
employer on the ground that the employee was acting outside the scope of
his employment and that the boy was a trespasser on the oat, but his
decision was reversed by a majority of the Court of Appeal.
38 Lord Denning MR dealt with the matter briey, holding that in
taking the boy on the milk oat the employee was still acting within the
sphere of his employment. Scarman LJ considered the point at greater D
length, at pp 147—148:
In words which have frequently been quoted both in the courts and in
the universities, Salmond on Torts, 16th ed (1973), p 462, refers to the
basis of vicarious liability for accidental damage as being one of public
policy. That view is supported by quotations (dated no doubt, but still
full of life) of a dictum of Lord Brougham and of another, 100 years or E
more earlier, of Sir John Holt. That it is socially convenient and rough
justice to make an employer liable for the torts of his servant in the cases
to which the principle applies, was recognised in Limpus v London
General Omnibus Co (1862) 1 H & C 526; see the judgment of Willes J at
p 539. I think it important to realise that the principle of vicarious
liability is one of public policy. It is not a principle which derives from a
F
critical or rened consideration of other concepts in the common law, for
example, the concept of trespass or indeed the concept of agency. No
doubt in particular cases it may be relevant to consider whether a
particular plainti› was or was not a trespasser. Similarly, when, as I shall
indicate, it is important that one should determine the course of
employment of the servant, the law of agency may have some marginal
relevance. But basically, as I understand it, the employer is made G
vicariously liable for the tort of his employee not because the plainti› is
an invitee, nor because of the authority possessed by the servant, but
because it is a case in which the employer, having put matters into
motion, should be liable if the motion that he has originated leads to
damage to another. What is the approach which the cases identify as the
correct approach in order to determine this question of public policy?
H
First, . . . one looks to see whether the servant has committed a tort upon
the plainti› . . . The next question . . . is whether the employer should
shoulder the liability for compensating the person injured by the tort . . .
it does appear to me to be clear, since the decision of Limpus v London
General Omnibus Co 1 H & C 526, that that question has to be answered
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A by directing attention to what the servant was employed to do when he

committed the tort that has caused damage to the plainti›. The servant
was, of course, employed at the time of the accident to do a whole number
of operations. He was certainly not employed to give the boy a lift, and if
one connes ones analysis of the facts to the incident of injury to the
plainti›, then no doubt one would say that carrying the boy on the
oatgiving him a liftwas not in the course of the servants
B
employment. But in Ilkiw v Samuels [1963] 1 WLR 991 Diplock LJ
indicated that the proper approach to the nature of the servants
employment is a broad one. He says, at p 1004: As each of these nouns
implieshe is referring to the nouns used to describe course of
employment, sphere, scope and so forththe matter must be looked at
broadly, not dissecting the servants task into its component
C activitiessuch as driving, loading, sheeting and the likeby asking:
what was the job on which he was engaged for his employer? and
answering that question as a jury would.
Lister v Hesley Hall Ltd

39 In Lister v Hesley Hall Ltd [2002] 1 AC 215 the House of Lords was
D faced with the problem of the application of the doctrine of vicarious
liability to the warden of a school boarding house who sexually abused the
children in his care. The Salmond formula was stretched to breaking point.
Even on its most elastic interpretation, the sexual abuse of the children could
not be described as a mode, albeit an improper mode, of caring for them.
Drawing on Scarman LJs approach, Lord Steyn (with whom Lord Hutton
and Lord Hobhouse of Woodborough agreed) spoke of the pitfalls of
E terminology and said that it was not necessary to ask whether the acts of
sexual abuse were modes of doing authorised acts. He posed the broad
question whether the wardens torts was so closely connected with his
employment that it would be just to hold the employers liable. He
concluded that the employers were vicariously liable because they
undertook the care of the children through the warden and he abused them.
F
There was therefore a close connection between his employment and his
tortious acts. To similar e›ect, Lord Clyde said that the warden had a
general duty to look after the children, and the fact that he abused them did
not sever the connection with his employment; his acts had to be seen in the
context that he was entrusted with responsibility for their care, and it was
right that his employers should be liable for the way in which he behaved
towards them as warden of the house.
G 40 In adopting the approach which he did, Lord Steyn referred to the
judgment of McLachlin J in Bazley v Curry [1999] 2 SCR 534. McLachlin J
summarised the public policy justication for imposing vicarious liability, at
para 31, in a similar fashion to Holt CJ and Scarman LJ:
The employer puts in the community an enterprise which carries with
it certain risks. When those risks materialise and cause injury to a
H member of the public despite the employers reasonable e›orts, it is fair
that the person or organisation that creates the enterprise and hence the
risk should bear the loss.
Compare Scarman LJs statement that the employer, having put matters
into motion, should be liable if the motion that he has originated leads to
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damage to another. This thinking has been prominent in cases since Lister A
as the social underpinning of the doctrine of vicarious liability, but the court
is not required in each case to conduct a retrospective assessment of the
degree to which the employee would have been considered to present a risk.
As Immanuel Kant wrote: Out of the crooked timber of humanity, no
straight thing was ever made. The risk of an employee misusing his
position is one of lifes unavoidable facts.
B
41 In Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366, the House
of Lords applied the Lister approach to vicarious liability in a case of
commercial fraud. Lord Nicholls of Birkenhead (with whom Lord Slynn
and Lord Hutton agreed) said:
22. . . . it is a fact of life, and therefore to be expected by those who
carry on businesses, that sometimes their agents may exceed the bounds
C
of their authority or even defy express instructions. It is fair to allocate
risk of losses thus arising to the businesses rather than leave those
wronged with the sole remedy, of doubtful value, against the individual
employee who committed the wrong. To this end, the law has given the
concept of ordinary course of employment an extended scope.
23. If, then, authority is not the touchstone, what is? . . . Perhaps the
best general answer is that the wrongful conduct must be so closely D
connected with acts the partner or employee was authorised to do that,
for the purpose of the liability of the rm or the employer to third parties,
the wrongful conduct may fairly and properly be regarded as done by the
partner while acting in the ordinary course of the rms business or the
employees employment . . . (Original emphasis.)
25. This close connection test focuses attention in the right
E
direction. But it a›ords no guidance on the type or degree of connection
which will normally be regarded as su–ciently close to prompt the legal
conclusion that the risk of the wrongful act occurring, and any loss
owing from the wrongful act, should fall on the rm or employer rather
than the third party who was wronged . . .
26. This lack of precision is inevitable, given the innite range of
circumstances where the issue arises. The crucial feature or features, F
either producing or negativing vicarious liability, vary widely from one
case or type of case to the next. Essentially the court makes an evaluative
judgment in each case, having regard to all the circumstances and,
importantly, having regard also to the assistance provided by previous
court decisions.
42 The close connection test adumbrated in Lister and Dubai G
Aluminium has been followed in a line of later cases including several at the
highest level: Bernard v Attorney General of Jamaica [2005] IRLR 398;
Brown v Robinson [2004] UKPC 56; Majrowski v Guys and St Thomass
NHS Trust [2007] 1 AC 224 and Various Claimants v Catholic Child
Welfare Society [2013] 2 AC 1 (the Christian Brothers case).
43 In the Christian Brothers case Lord Phillips of Worth
H
Matravers PSC said, at para 74, that it is not easy to deduce from Lister the
precise criteria that will give rise to vicarious liability for sexual abuse (or, he
might have added, other abuse), and that the test of close connection tells
one nothing about the nature of the connection. However, in Lister the
court was mindful of the risk of over-concentration on a particular form of
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A terminology, and there is a similar risk in attempting to over-rene, or lay

down a list of criteria for determining, what precisely amounts to a
su–ciently close connection to make it just for the employer to be held
vicariously liable. Simplication of the essence is more desirable.
The present law

B 44 In the simplest terms, the court has to consider two matters. The rst
question is what functions or eld of activities have been entrusted by the
employer to the employee, or, in everyday language, what was the nature of
his job. As has been emphasised in several cases, this question must be
addressed broadly; see in particular the passage in Diplock LJs judgment in
Ilkiw v Samuels [1963] 1 WLR 991, 1004 included in the citation from Rose
v Plenty [1976] 1 WLR 141, 147—148 (at para 38 above) and cited also in
C
Lister v Hesley Hall Ltd [2002] 1 AC 215 by Lord Steyn, at para 20, Lord
Clyde, at para 42, Lord Hobhouse, at para 58 and Lord Millett, at para 78.
45 Secondly, the court must decide whether there was su–cient
connection between the position in which he was employed and his
wrongful conduct to make it right for the employer to be held liable under
the principle of social justice which goes back to Holt CJ. To try to measure
D the closeness of connection, as it were, on a scale of 1 to 10, would be a
forlorn exercise and, what is more, it would miss the point. The cases in
which the necessary connection has been found for Holt CJs principle to be
applied are cases in which the employee used or misused the position
entrusted to him in a way which injured the third party. Lloyd v Grace,
Smith & Co [1912] AC 716, Pettersson v Royal Oak Hotel Ltd [1948]
NZLR 136 and Lister v Hesley Hall Ltd were all cases in which the
E
employee misused his position in a way which injured the claimant, and that
is the reason why it was just that the employer who selected him and put him
in that position should be held responsible. By contrast, in Warren v Henlys
Ltd [1948] 2 All ER 935 any misbehaviour by the petrol pump attendant,
qua petrol pump attendant, was past history by the time that he assaulted the
claimant. The claimant had in the meantime left the scene, and the context
F in which the assault occurred was that he had returned with the police o–cer
to pursue a complaint against the attendant.
46 Contrary to the primary submission advanced on the claimants
behalf, I am not persuaded that there is anything wrong with the Lister
approach as such. It has been a–rmed many times and I do not see that the
law would now be improved by a change of vocabulary. Indeed, the more
G
the argument developed, the less clear it became whether the claimant was
advocating a di›erent approach as a matter of substance and, if so, what the
di›erence of substance was.
The present case

47 In the present case it was Mr Khans job to attend to customers and
to respond to their inquiries. His conduct in answering the claimants
H
request in a foul-mouthed way and ordering him to leave was inexcusable
but within the eld of activities assigned to him. What happened
thereafter was an unbroken sequence of events. It was argued by the
respondent and accepted by the judge that there ceased to be any signicant
connection between Mr Khans employment and his behaviour towards the
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claimant when he came out from behind the counter and followed the A
claimant onto the forecourt. I disagree for two reasons. First, I do not
consider that it is right to regard him as having metaphorically taken o› his
uniform the moment he stepped from behind the counter. He was following
up on what he had said to the claimant. It was a seamless episode. Secondly,
when Mr Khan followed the claimant back to his car and opened the front
passenger door, he again told the claimant in threatening words that he was
B
never to come back to petrol station. This was not something personal
between them; it was an order to keep away from his employers premises,
which he reinforced by violence. In giving such an order he was purporting
to act about his employers business. It was a gross abuse of his position, but
it was in connection with the business in which he was employed to serve
customers. His employers entrusted him with that position and it is just that
as between them and the claimant, they should be held responsible for their C
employees abuse of it.
48 Mr Khans motive is irrelevant. It looks obvious that he was
motivated by personal racism rather than a desire to benet his employers
business, but that is neither here nor there.
49 I would allow the appeal.
D
LORD DYSON MR
50 As Lord Toulson JSC has explained, the test for holding an employer
vicariously liable for the tort of his employee has troubled the courts for
many years. The close connection test (whether the employees tort is so
closely connected with his employment that it would be just to hold the
employer liable) was rst articulated in this jurisdiction by the House of
Lords in Lister v Hesley Hall Ltd [2002] 1 AC 215. It has been subsequently E
followed in many cases, including several at the highest level: see para 42
above. As Lord Nicholls of Birkenhead said in Dubai Aluminium Co Ltd v
Salaam [2003] 2 AC 366, para 26, the test is imprecise, but that is inevitable
given the innite range of circumstances where the issue of vicarious liability
arises. The court, he said, has to make an evaluative judgment in each case,
having regard to all the circumstances and to the assistance provided by
F
previous court decisions on the facts of other cases.
51 The appellant in his application for permission to appeal in the
present case argued that this court should reformulate the close connection
test. In his written case, he submitted that it should be rened or replaced
altogether in order to reect modern views of justice; to advance the
doctrines underlying policy considerations [underlying vicarious liability];
and to set clearer and less arbitrary boundaries. G
52 Accordingly, he submitted that the test for vicarious liability should
be whether the employee (described as an authorised representative of the
employer) commits the tort in circumstances where the reasonable observer
would consider the employee to be acting in that representative capacity.
53 The close connection test has now been repeatedly applied by our
courts for some 13 years. In my view, it should only be abrogated or rened
H
if a demonstrably better test can be devised. Far from being demonstrably
better, the proposed new test is hopelessly vague. What does representative
capacity mean in this context? And by what criteria is the court to
determine the circumstances in which the reasonable observer would
consider the employee to be acting in a representative capacity? I do not see
99
695
(SC(E))
Lord Dyson MR
A how this test is more precise than the close connection test or how it better
reects modern views of justice. The attraction of the close connection test is
that it is rmly rooted in justice. It asks whether the employees tort is so
closely connected with his employment as to make it just to hold the
employer liable.
54 It is true that the test is imprecise. But this is an area of the law in
which, as Lord Nicholls said, imprecision is inevitable. To search for
B
certainty and precision in vicarious liability is to undertake a quest for a
chimaera. Many aspects of the law of torts are inherently imprecise. For
example, the imprecise concepts of fairness, justice and reasonableness are
central to the law of negligence. The test for the existence of a duty of care is
whether it is fair, just and reasonable to impose such a duty. The test for
remoteness of loss is one of reasonable foreseeability. Questions such as
C whether to impose a duty of care and whether loss is recoverable are not
always easy to answer because they are imprecise. But these tests are now
well established in our law. To adopt the words of Lord Nicholls, the court
has to make an evaluative judgment in each case having regard to all the
circumstances and having regard to the assistance provided by previous
decisions on the facts of other cases.
55 In Various Claimants v Catholic Child Welfare Society [2013] 2 AC 1,
D
para 19 Lord Phillips of Worth Matravers PSC said: the law of vicarious
liability is on the move. It is true that there have been developments in the
law as to the type of relationship that has to exist between an individual and a
defendant for vicarious liability to be imposed on the defendant in respect of a
tort committed by that individual. These developments have been a response
to changes in the legal relationships between enterprises and members of
E their workforces and the increasing complexity and sophistication of the
organisation of enterprises in the modern world. A good example is provided
by the facts of Various Claimants v Catholic Child Welfare Society itself.
56 But there is no need for the law governing the circumstances in
which an employer should be held vicariously liable for a tort committed by
his employee to be on the move. There have been no changes in societal
conditions which require such a development. The changes in the case law
F
relating to the denition of the circumstances in which an employer is
vicariously liable for the tort of his employee have not been made in response
to changing social conditions. Rather they have been prompted by the aim
of producing a fairer and more workable test. Unsurprisingly, this basic aim
has remained constant. The Salmond test dened a wrongful act by a
servant in the course of his employment as either (a) a wrongful act
G authorised by the master or (b) a wrongful and unauthorised mode of doing
some act authorised by the master: Salmond, Law of Torts, 1st ed (1907),
p 83; and Salmond & Heuston on the Law of Torts, 21st ed (1996), p 443.
As Lord Steyn said in Lister v Hesley Hall Ltd [2002] 1 AC 215, para 20, this
was simply a practical test serving as a dividing line between cases where it
is or is not just to impose vicarious liability (emphasis added). The
importance of Lister (and the Canadian case of Bazley v Curry [1999] 2 SCR
H
534 whose reasoning it adopted) is that it recognised the di–culty created by
the second limb of the Salmond test. This was not e›ective for determining
the circumstances in which it was just to hold an employer vicariously liable
for committing an act not authorised by the employer. The close connection
test was introduced in order to remedy this shortcoming. This improvement
100
696
(SC(E)) [2016] AC
Lord Dyson MR
was achieved by the simple expedient of explicitly incorporating the concept A

of justice into the close connection test. The new test was, therefore, by
denition more e›ective than the Salmond test for determining the
circumstances in which it is just to hold an employer vicariously liable for
the unauthorised acts of his employee. It is di–cult to see how the close
connection test might be further rened. It is su–cient to say that no
satisfactory renement of the test has been suggested in the present case.
B
57 As regards the facts of the present case, I agree with the analysis of
Lord Toulson JSC and the reasons he gives at paras 47—48 for holding that
the defendant is liable for the assault committed by Mr Khan.
58 For these reasons as well as those given by Lord Toulson JSC,
I would allow this appeal.
Appeal allowed. C
COLIN BERESFORD, Barrister
101
102
103
104
105
106
107
108
109
366
Dubai Aluminium Co Ltd v Salaam (HL(E)) [2003] 2 AC
House of Lords A
Dubai Aluminium Co Ltd v Salaam and others

[2002] UKHL 48
2002 June 24, 25, 26, 27; Lord Slynn of Hadley, Lord Nicholls of Birkenhead,
Dec 5 Lord Hutton, Lord Hobhouse of Woodborough B
and Lord Millett
Partnership Ñ Liability of Þrm Ñ Wrongful act or omission Ñ Partner knowingly

assisting in dishonest scheme Ñ Claim against Þrm settled by other partners Ñ
Whether liability for wrongful acts or omissions conÞned to tortious acts Ñ
Whether partner acting in ordinary course of ÞrmÕs business Ñ Whether Þrm
vicariously liable Ñ Partnership Act 1890 (53 & 54 Vict c 39), s 10 C
Damages Ñ Contribution Ñ Assessment Ñ PlaintiÕs claim for damages for fraud
settled by defendants Ñ Contribution proceedings Ñ Whether personal
innocence of vicariously liable defendant to be taken into account Ñ Whether
undisgorged proÞts of culpable defendants to be taken into account Ñ Civil
Liability (Contribution) Act 1978 (c 47), ss 1(1), 2(1)
In settlement of the plaintiÕs claim to recover commission and other payments to

wrongdoers as a result of a fraudulent scheme involving sham contracts, the plainti D
received US$18m from each of the Þrst defendant, S, and one of the third parties, T,
and $10m from the third and fourth defendants, two Þrms of solicitors. The latter
payment was made in settlement of the claim against the ÞrmsÕ partners other than A,
the second defendant, who was SÕs solicitor, and in release of the claim against A.
The co-partners of A were personally innocent of any wrongdoing, and A himself had
not beneÞted from the fraud apart from relatively modest sums paid to his Þrms by
way of fees. S and T had each beneÞted to the extent of about $20.3m and E
$16.5m respectively from the fraud. In contribution proceedings to determine the
apportionment of the partiesÕ liabilities to the plainti the judge assumed, pursuant
to section 1(4) of the Civil Liability (Contribution) Act 19781, that the factual basis
of the claim against A of dishonesty and knowing assistance in the fraudulent scheme
could be established. That included the drafting of the agreements, involvement in
the schemeÕs administration and other parts of a solicitorÕs business for S and giving
direct advice and assistance to other wrongdoers who were not his or the ÞrmsÕ F
clients. The judge held that section 10 of the Partnership Act 18902 was wide enough
to cover the ÞrmsÕ liability to the plainti for the alleged wrongful acts of knowing
assistance by A, and further that AÕs acts were in the ordinary course of the ÞrmÕs
business. He concluded therefore that in respect of their payment to the plainti the
Þrms were entitled to a full indemnity from S and T in the proportion 75% and 25%
respectively and that S and T should be jointly and severally liable to the Þrms up to
$7.5m. S and T appealed. The Court of Appeal held that ÔÔany wrongful act or G
omissionÕÕ in section 10 of the 1890 Act was wide enough to encompass all wrongful
acts or omissions, but allowed the appeal on the grounds that, since the ÞrmsÕ
partners had not authorised A to act as he did on their behalf and it was not in the
ordinary course of the business of a solicitorsÕ Þrm to plan, draft and sign sham
agreements giving eect to a scheme known to be dishonest, the Þrms were not
vicariously liable for AÕs acts and were therefore not entitled to claim contribution in
respect of the sum paid to the plainti. H
On appeal by the Þrms of solicitors and on cross-appeal by S and TÑ
1
Civil Liability (Contribution) Act 1978, s 1(4): see post, para 93.
S 2(1): see post, para 145.
2
Partnership Act 1890, s 10: see post, para 8.
110
367
[2003] 2 AC Dubai Aluminium Co Ltd v Salaam (HL(E))
A Held, allowing the appeal and dismissing the cross-appeal, (1) that ÔÔany wrongful
actÕÕ within the meaning of section 10 of the 1890 Act was not conÞned to common
law torts but could include the equitable wrong of dishonest participation in a breach
of trust; that one partnerÕs wrongful act, although not authorised by his co-partners,
could nevertheless be said to have been done ÔÔin the ordinary course of the business of
the ÞrmÕÕ if, for the purpose of the ÞrmÕs liability to third parties, it could fairly and
properly be regarded as done by the partner while acting in the ordinary course of the
B ÞrmÕs business; that whether it could be so regarded was for the court to evaluate as a
question of law based on an assessment of the primary facts; that drafting agreements
for a proper purpose would be within the ordinary course of the business of a
solicitorsÕ Þrm and, on the assumed factual basis that A was acting in his capacity as a
partner, his assistance in the fraudulent scheme by drafting the necessary agreements
was so closely connected with the acts which he was authorised to do that for the
purpose of the ÞrmÕs liability he could fairly and properly be regarded as having acted
C
in the ordinary course of the ÞrmÕs business; that that assistance coupled with the
dishonesty was su±cient to give rise to equitable liability on AÕs part; and that,
accordingly, the defendant Þrms were vicariously liable for AÕs conduct ( post,
paras 10, 22Ð26, 34Ð36, 39, 65, 66, 68, 103, 112, 116Ð119, 122Ð131, 144).
Brydges v BranÞll (1842) 12 Sim 369, Hamlyn v John Houston & Co [1903] 1 KB
81, CA and Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982]
AC 462, PC considered.
Mara v Browne [1896] 1 Ch 199, CA explained.
D
In re BellÕs Indenture [1980] 1 WLR 1217 overruled in part.
(2) That, since the Þrms were vicariously liable for AÕs assumed wrongdoing, they
stood in the shoes of A so that the personal innocence of his co-partners was not a
relevant matter to be taken into account for the purposes of assessing liability to the
plainti or in the contribution proceedings; that in terms of gravity of fault or
potency of causal contribution S, T and A were equally liable for the plaintiÕs loss
and therefore there should be a substantial measure of equality between them in the
E distribution of the burden of liability; that in order to achieve that equality the court
was entitled to have regard to the extent to which some parties to the fraud but not
others remained in possession of considerable sums of misappropriated moneys
which were proceeds of the fraud, even after the plaintiÕs claims had been met; and
that, accordingly, it was just and equitable that in accordance with their respective
responsibilities for the damage to the plainti, S and T should bring into the
assessment sums they had retained from the fraud, that the Þrms should be entitled to
F a contribution of 100% from them, and that S and T should each bear the risk of the
otherÕs insolvency by being jointly and severally liable for the contribution ( post,
paras 49, 53, 58Ð64, 65, 66, 75Ð79, 154Ð160, 163, 164, 166Ð169).
Decision of the Court of Appeal [2001] QB 113; [2000] 3 WLR 910, CA reversed.
The following cases are referred to in the opinions of their Lordships:

Ashworth v Stanwix (1861) 3 E & E 701
G Attorney General v Stannyforth (1721) Bunb 97
Barnes v Addy (1874) LR 9 Ch App 244
Barwick v English Joint Stock Bank (1867) LR 2 Ex 259
Bass Brewers Ltd v Appleby [1997] 2 BCLC 700, CA
Bazley v Curry (1999) 174 DLR (4th) 45
BellÕs Indenture, In re [1980] 1 WLR 1217; [1980] 3 All ER 425
Brydges v BranÞll (1842) 12 Sim 369
H Bugge v Brown (1919) 26 CLR 110
Clarkson v Davies [1923] AC 100, PC
Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707; [1999] 2 All ER 457
Credit Lyonnais Bank Nederland NV (now known as Generale Bank Nederland NV)
v Export Credits Guarantee Department [2000] 1 AC 486; [1999] 2 WLR 540;
[1999] 1 All ER 929, HL(E)
111
368
Fisher v CHT Ltd (No 2) [1966] 2 QB 475; [1966] 2 WLR 391; [1966] 1 All ER 88, A
CA
Fryer, In re (1857) 3 K & J 317
Hamlyn v John Houston & Co [1903] 1 KB 81, CA
John v Dodwell & Co Ltd [1918] AC 563, PC
K v P (J, Third Party) [1993] Ch 140; [1992] 3 WLR 1015; [1993] 1 All ER 521
Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982] AC 462; [1981]
3 WLR 493; [1981] 3 All ER 65, PC B
[2001] 2 All ER 769, HL(E)
Lloyd v Grace Smith & Co [1912] AC 716, HL(E)
Mara v Browne [1896] 1 Ch 199, CA
Meekins v Henson [1964] 1 QB 472; [1962] 3 WLR 299; [1962] 1 All ER 899
Morris v C W Martin & Sons Ltd [1966] 1 QB 716; [1965] 3 WLR 276; [1965] 2 All
ER 725, CA C
Navarro v Moregrand Ltd [1951] 2 TLR 674, CA
Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400, CA
Photo Production Ltd v Securicor Transport Ltd [1980] AC 827; [1980] 2 WLR 283;
[1980] 1 All ER 556, HL(E)
Plumb v Cobden Flour Mills Co Ltd [1914] AC 62, HL(E)
Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378; [1995] 3 WLR 64; [1995]
3 All ER 97, PC
D
Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555; [1968]
2 All ER 1073
St Aubyn v Smart (1868) LR 3 Ch App 646
Taylor v Davies [1920] AC 636, HL(E)
United Bank of Kuwait Ltd v Hammoud [1988] 1 WLR 1051; [1988] 3 All ER 418, CA
The following additional cases were cited in argument:

E
Agip (Africa) Ltd v Jackson [1990] Ch 265; [1989] 3 WLR 1367; [1992] 4 All ER 385
Armagas Ltd v Mundogas SA [1986] AC 717; [1986] 2 WLR 1063; [1986] 2 All
ER 385, HL(E)
Royal Brompton Hospital NHS Trust v Hammond [2002] UKHL 14; [2002] 1 WLR
1397; [2002] 2 All ER 801; [2002] 1 All ER (Comm) 897, HL(E)
APPEAL and CROSS-APPEAL from the Court of Appeal

F
This was an appeal, pursuant to leave of the House of Lords (Lord
Bingham of Cornhill, Lord Homann and Lord Hope of Craighead) granted
on 6 December 2000, by the third and fourth defendants, two Þrms of
solicitors, Amhurst Brown Martin & Nicholson and Amhurst Brown
Colombotti, and a cross-appeal by the Þrst defendant, Hany Mohamed
Salaam and the third third party, Mahdi Mohamed Al Tajir, from a decision
on 7 April 2000 of the Court of Appeal (Evans and Aldous LJJ, G
Turner J dissenting) allowing the appeal of Mr Salaam and Mr Al Tajir from
a decision of Rix J on 17 July1998 in contribution proceedings following the
settlement of a claim by the plainti, Dubai Aluminium Co Ltd against
Mr Salaam, Anthony Francesco Lorenzo Amhurst, the two Þrms of
solicitors, Nillett Development Incorporated, and Japan Metal Sales
Corporation, and as third parties, Ian David Livingstone, Glencore H
International AG and Mr Al Tajir.
The facts are stated in the opinions of their Lordships.
Jonathan Sumption QC and Philip Brook Smith QC for the defendant

Þrms of solicitors. Whether on the facts of this case the Þrms are liable turns
112
369
A on section 10 of the Partnership Act 1890. The Þrst question which arises is:
Does the principle of vicarious liability for a partnerÕs wrongs have any
application to liability as a constructive trustee on the basis of knowing
assistance? The only possible answer to that question is ÔÔYesÕÕ.
The liability of a person as a constructive trustee is fault-based. It is an
accessory liability arising out of dishonesty: see Royal Brunei Airlines Sdn
Bhd v Tan [1995] 2 AC 378, 384, 392, 397. ÔÔ Any wrongful act or
B
omissionÕÕ is not a synonym for ÔÔtortiousÕÕ. ÔÔWrongfulÕÕ refers to any
conduct involving legal fault which leads to a breach of duty, including a
duty to be honest which is owed to everyone with whom the Þrms deal.
Dishonest conduct directed to the appropriation of anotherÕs property is a
ÔÔwrongful act or omissionÕÕ within the section.
Sections 11 and 13 of the 1890 Act are concerned with the liability of a
C constructive trustee only in cases of knowing receipt but that does not mean
that section 10 cannot include liability as a constructive trustee in cases of
knowing assistance. Knowing receipt is receipt-based and not fault-based.
Sections 11 and 13 are necessary because the liability of a constructive
trustee on the basis of knowing receipt is not necessarily based on wrongful
conduct on his part. It is essentially an equitable remedy, restitutionary in
nature, which gives eect to the proprietary right of the beneÞciary.
D
Apart from the 1890 Act there is no juridical basis for the contention that
a partnership cannot incur vicarious liability for knowing assistance on
ordinary principles of law in the same way as it can vicariously incur any
other kind of liability. Section 10, like most of the 1890 Act, was intended to
be declaratory of the law and does not displace ordinary principles of law
save in so far as they conßict with an express provision of the Act: see
E section 46. Section 10 reßects the mutual agency of partners and the concept
of vicarious liability which ßows from agency.
The next question is: If there was vicarious liability, were the acts alleged
against the Þrm on the basis of Mr AmhurstÕs conduct done by him in the
ordinary course of its business? It is accepted that he was not authorised to
engage in dishonest acts. The real issue therefore is whether vicarious
liability can extend to unauthorised acts. The eect of Lloyd v Grace Smith
F
& Co [1912] AC 716 is that a principal is vicariously liable for the act of
his agent if it was done within the course of his employment in the sense
that it was the kind of act which he was employed to do. That is so
notwithstanding that it was done in a defective, unauthorised or even a
dishonest way to which the principal was not privy. The emphasis is on the
class of acts rather than on the particular act, so that what matters for the
G purpose of vicarious liability is not whether Mr Amhurst was authorised to
do the particular act but whether he was actually authorised to do that class
of acts. If he was authorised to do the act honestly, he acted within the
course of his ÞrmÕs business in doing it dishonestly. His acts were a breach of
his obligation not merely to his clients but also to his partners in the conduct
of the partnership business. [Reference was made to Plumb v Cobden Flour
Mills Ltd [1914] AC 62 and Lister v Hesley Hall Ltd [2002] 1 AC 215.]
H
Reliance on ostensible authority does not arise in most cases of vicarious
liability, and it is never relevant when the act was the very thing that caused
the loss. Mr Amhurst was not employed to draft sham agreements.
[Reference was made to Kooragang Investments Pty Ltd v Richardson &
Wrench Ltd [1982] AC 462; Armagas Ltd v Mundogas SA [1986] AC 717;
113
370
Hamlyn v John Houston & Co [1903] 1 KB 81; Mara v Browne [1896] 1 Ch A

199; In re BellÕs Indenture [1980] 1 WLR 1217 and Agip (Africa) Ltd v
Jackson [1990] Ch 265.]
Once it is accepted that the dishonest act of a partner is legally capable of
being within the course of a partnershipÕs business, it is a question of fact
whether it is. The issue is whether the drafting of the agreements was a
su±cient act to give rise to the presumption of knowing assistance. The
B
Court of AppealÕs reasoning proceeded on a misunderstanding of Credit
Lyonnais Bank Nederland NV (now known as Generale Bank Nederland
NV) v Export Credits Guarantee Department [2000] 1 AC 486. The act of
using his professional skills to draft agreements and carry out administrative
steps to deceive were acts Mr Amhurst did in carrying on his business. The
dishonest act of assisting in a theft is itself a breach of duty and is therefore
wrongful for the purposes of section 10. C
On the basis that Mr AmhurstÕs partners were liable for the same damage
as the other defendants, their respective contributions fall to be determined
in accordance with section 2 of the Civil Liability (Contribution) Act 1978.
The apportionment of liability is properly a matter for evidence, and the
question of what is just and equitable, though not strictly a matter of
discretion, is nevertheless a matter of judgment and informed impression on
D
which the function of an appellate court is necessarily limited. Therefore the
decision of the trial judge should stand unless it is clearly wrong.
Section 2(1) of the 1978 Act requires the court to award contribution
according to an assessment of the ÔÔresponsibilityÕÕ of those liable for the
damage. The facts which are relevant to a personÕs responsibility for the
damage are not necessarily the same facts which make him liable for
the damage to the claimant. The degree of responsibility for anotherÕs loss E
depends mainly on gravity of fault and the potency of its causal contribution
to the loss. On the assumed facts Mr AmhurstÕs partners are liable for the
damage but are not responsible for it. They are answerable purely by virtue
of being his partners and not by virtue of their own conduct. Moreover, they
received nothing.
By comparison Mr Salaam and Mr Al Tajir were liable by virtue of their
F
own dishonesty and received very large sums. Their responsibility wholly
corresponded to their liability. Apart from the receipts, the same was true,
on the assumed facts, of Mr Amhurst personally. If the only person liable
had been Mr Amhurst the partners could have got indemniÞed against him
personally. The distinction between personal and vicarious liability is not
marginal or irrelevant. It is fundamental to any ÔÔjust and equitableÕÕ
assessment of their relative responsibilities. G
The receipts of the participants in the fraudulent scheme are relevant
because where money has been fraudulently abstracted from the claimant,
the more a participant has taken, the greater is his responsibility for the loss.
It goes directly both to the degree of fault and the causative potency of his
acts. The object of contribution proceedings is to require a person to
contribute to the loss in a just and equitable manner and that must take into
H
account how the proceeds ended up with the wrongdoers.
The order will not properly reßect the partiesÕ relative responsibilities if
two of them are equally responsible and are ordered to contribute equally
but the proceeds have all ended up in the hands of one party who is then left
with a large undisgorged proÞt whereas the other party is out of pocket. If
114
371
A making a joint and several order gives eect to section 2 of the 1978 Act
there is no reason why the judge should not make it. [Reference was made to
K v P (J, Third Party) [1993] Ch 140.]
Ali Malek QC and Sara Cockerill for Mr Al Tajir. The statutory intention
is that partners should not be vicariously liable for all claims against their co-
partners. If section 10 of the Partnership Act 1890 has the meaning
B contended for by the Þrms, then sections 11 and 13 are redundant.
[Reference was made to Lister v Hesley Hall Ltd [2002] 1 AC 215; Lloyd v
Grace Smith & Co [1912] AC 716; Morris v C W Martin & Sons Ltd [1966]
1 QB 716; Kooragang Investments Pty Ltd v Richardson & Wrench Ltd
[1982] AC 462 and Armagas Ltd v Mundogas SA [1986] AC 717.] On the
pleaded case the real issue under section 10 is whether Mr Amhurst when
C
committing the alleged wrongful acts was acting in the ordinary course of
the business of the Þrm. The only acts which can be relied on as being
capable of being in the ordinary course of the ÞrmÕs business were the
drafting of the agreements and the routine administrative business of
Mr SalaamÕs companies. However, the agreements were sham agreements
and not ordinary eective contracts intended to regulate the rights of the
parties, and Mr SalaamÕs companies were no more than money-laundering
D vehicles and recipients for his share of the proceeds of fraud. Therefore
neither the drafting nor any knowing assistance in money laundering came
within the ordinary and proper work of the Þrms. Mr AmhurstÕs wrongful
acts cannot be characterised as so closely connected with the business which
he was authorised as a solicitor to do that it is proper that vicarious liability
should result. Nor were the wrongful acts calculated to achieve some proper
E objective of the Þrms.
As to contribution, it is erroneous to say that liability under section 1 of
the 1978 Act and responsibility under section 2 are completely distinct.
Section 1 uses ÔÔliableÕÕ as a trigger to come within the provisions of section 2.
Section 2 uses ÔÔresponsibleÕÕ to denote the exercise the court must carry out.
That exercise is not a general moral inquiry separate from the question of
liability. The ÔÔinnocent partnersÕÕ argument is inconsistent with the
F rationale for vicarious liability. The co-partners, having chosen to be in
partnership with someone who acted dishonestly, should collectively bear
responsibility. They stand in Mr AmhurstÕs shoes and no distinction should
be made between them. The words ÔÔjust and equitableÕÕ in section 2 must be
considered in their context. The court must do what it regards as justice
between the parties on the basis of their respective responsibility for the
G damage. In the context of the 1978 Act responsibility means both
blameworthiness and causative potency. Receipts should not enter into
the overall question of responsibility. In a dishonest assistance case the
disgorgement of proceeds is irrelevant to apportionment between the
parties as opposed to an apportionment involving the victim. A partyÕs
blameworthiness is unaected by his receipts. Nor are receipts necessarily
relevant to causative potency, although it could indicate a greater role in the
H
fraud and therefore a greater responsibility for the damage.
The judge erred in taking account of how well the parties behaved
subsequently to the commencement of the plaintiÕs attempt to recoup its
loss. A partyÕs unwillingness to acknowledge his misdeed does not change
the character of the act which gave rise to the damage or the causative
115
372
potency for the damage. Therefore a partyÕs post-liability conduct cannot be A

relevant to the question which falls to the court to determine under
section 2(1) of the 1978 Act.
The judgeÕs receipts-based approach led to an apportionment which was
wrong. Had the judge followed the correct approach to the 1978 Act he
would have ordered equal apportionment which is right. Where all the
parties were dishonest the court should be slow to depart from the principle
B
of equality between the wrongdoers. That is also consistent with the general
rule in equity that as between themselves trustees who are liable to make
good a breach of trust should bear the burden equally.
The judge was also wrong to make a joint and several order for
contribution against Mr Al Tajir. It is implicit in the nature of the exercise
which the court performs in apportioning liability that the duty to contribute
is always several. There is no suggestion in any of the authorities that the C
liability to contribute can be joint.
Mark Simpson and Spike Charlwood for Mr Salaam. The submissions
made on behalf of Mr Al Tajir in regard to the Partnership Act 1890 and the
issues relating to contribution under the 1978 Act and the submissions of the
Þrms of solicitors in regard to joint and several liability are adopted.
As to apportionment, if Mr Salaam is held liable to make any D
contribution to Mr AmhurstÕs co-partners he should then be entitled to
recover that contribution or part of it from Mr Amhurst. The judge was
wrong in principle to say Mr Salaam could recover nothing against
Mr Amhurst. As a matter of construction of the 1978 Act Mr SalaamÕs
receipts are irrelevant to his claim against Mr Amhurst, or are only one
factor to be taken into account. Since claims for knowing receipt fall outside
E
the 1978 Act the only relevant liability of Mr AmhurstÕs partners is for
dishonest assistance. The judge gave too much weight to the receipts-based
argument. Receipts are irrelevant to responsibility and blameworthiness.
Section 1(4) of the 1978 Act works in favour of a person who has settled a
claim.
If undisgorged receipts can be taken account of under the 1978 Act, that
can only happen on the ÔÔjust and equitableÕÕ basis. On the facts of this case it F
is not just and equitable to allow Mr Amhurst to escape liability. [Reference
was made to Royal Brompton Hospital NHS Trust v Hammond [2002]
1 WLR 1397.]
Deterrence must be one purpose of making an order which hurts.
Moreover, the public have a right to know that those who are in positions of
trust such as solicitors and accountants are trustworthy. Punitive liability is
G
the only way of achieving deterrence and public conÞdence.
Liability as between Mr Al Tajir and Mr Salaam should be joint and
several.
George Leggatt QC for Mr Amhurst. Mr SalaamÕs claim for contribution
against Mr Amhurst is misconceived. The 1978 Act does not permit a
payment of contribution in respect of another payment of contribution such
H
as Mr Salaam seeks. Even if he were entitled to such contribution, it would
not be appropriate to make that order since the payment of contribution in
respect of which contribution is claimed by Mr Salaam is a payment to
Mr AmhurstÕs own partners. Once it is accepted that the risks shared by
partners include the risk of intentional wrongdoing by one of their number
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Lord Nicholls of Birkenhead
A when acting in the ordinary course of the ÞrmÕs business, there can be no
justiÞcation for treating claims under the 1978 Act any dierently from any
other third party claims arising out of such wrongdoing or assumed
wrongdoing. The submissions of Mr Salaam would be a reason for declining
to order him to pay contribution to the partners or for reducing the amount
of such contribution, but not for requiring Mr Salaam to pay them
B
contribution and then recovering it from Mr Amhurst.
The issue is not whether Mr Amhurst should be punished by way of
payment of a contribution for his assumed wrongdoing. It is whether
Mr Amhurst, who received nothing, should be ordered to pay contribution
to Mr Salaam, who received, and will in any event retain, a substantial sum
from the proceeds of the fraud, thereby further enriching Mr Salaam.
C Sumption QC replied.
Their Lordships took time for consideration.
5 December. LORD NICHOLLS OF BIRKENHEAD

1 My Lords, these proceedings arise out of an elaborate fraud by which
the plainti, Dubai Aluminium Co Ltd, was induced to pay out US$50m
D between September 1987 and March 1993 under a bogus consultancy
agreement with Marc Rich & Co AG. The proceeds were shared out among
the principal participants in the fraud under several equally bogus sub-
agreements. Mr Hany Mohamed Salaam and His Excellency Mahdi
Mohamed Al Tajir were found by the trial judge, Rix J, to have been
dishonest participants in the scheme, together with Dubai AluminiumÕs chief
executive, Mr Ian Livingstone. They beneÞted either directly or through
E
companies controlled by them: to the extent of about $20.3m in the case of
Mr Salaam, $16.5m in the case of Mr Al Tajir and $6.3m in the case of
Mr Livingstone.
2 Mr Salaam was a client of two successive Þrms of solicitors, Amhurst
Brown Martin & Nicholson and Amhurst Brown Colombotti. Nothing
turns on the distinction between these two Þrms, and it will be convenient to
F refer to them simply as ÔÔthe Amhurst ÞrmÕÕ. Mr SalaamÕs aairs were dealt
with mainly by Mr Amhurst, the senior partner in the Amhurst Þrm. Dubai
Aluminium claimed that Mr Amhurst dishonestly assisted in the fraud. He
did not beneÞt from the fraud, apart from comparatively modest amounts
paid to his Þrm by way of fees. In addition to suing Mr Amhurst Dubai
Aluminium sued the Amhurst Þrm, on the basis that the Þrm was vicariously
G liable in respect of some of Mr AmhurstÕs activities.
3 It has always been common ground that Mr AmhurstÕs partners were
personally innocent of any dishonesty. It is also right to note at the outset
that, for a reason which will appear, the case has proceeded on the
assumption that Mr Amhurst was guilty of dishonesty as alleged. He has
always denied this allegation. This issue has never been tried, and there has
never been any Þnding by a court that he acted dishonestly in any respect.
H 4 At various stages in the course of the trial all the defendants settled
with Dubai Aluminium on agreeing to make substantial payments. The
claims against Mr Amhurst and the Amhurst Þrm were settled on payment
by the Amhurst Þrm of $10m. These settlements left outstanding and
unresolved contribution claims brought by some of the defendants against
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each other and against third parties. So the contribution claims had to be A
decided by the judge, Rix J. The eect of the judgeÕs decision was that the
Amhurst Þrm, in respect of its payment of $10m, received contribution
amounting to a full indemnity from Mr Salaam and Mr Al Tajir. More
precisely, Rix J gave judgment in favour of the Amhurst Þrm for $7,781,093
jointly and severally against Mr Salaam and Mr Al Tajir, and in the further
amount of $2,651,253 against Mr Salaam. B
5 Mr Salaam and Mr Al Tajir appealed to the Court of Appeal. The
Court of Appeal, comprising Evans and Aldous LJJ and Turner J, allowed
the appeal. The court held that the Amhurst Þrm was not vicariously liable
for Mr AmhurstÕs allegedly wrongful acts. So there was no basis on which it
could obtain contribution from Mr Salaam or Mr Al Tajir in respect of its
payment to Dubai Aluminium. The Amhurst Þrm then brought this further
appeal to your LordshipsÕ House, seeking restoration of the order of Rix J. C
6 These bare essentials will su±ce as an introduction to the points of
law of general importance raised by the contribution claims. The factual
history of this matter, which is not without a degree of complexity, is more
fully summarised by my noble and learned friend, Lord Millett. The judgeÕs
Þndings are reported [1999] 1 LloydÕs Rep 415 and the conclusions of the
Court of Appeal [2001] 1 QB 113. D
Section 10 of the Partnership Act 1890: ÔÔany wrongful actÕÕ

7 The contribution claim made by the Amhurst Þrm in respect of its
payment of $10m to Dubai Aluminium is based on the Civil Liability
(Contribution) Act 1978. Section 1(1) of this Act (ÔÔthe Contribution ActÕÕ)
provides that any person ÔÔliableÕÕ in respect of any damage suered by E
another person may recover contribution from any other person liable in
respect of the same damage. On the judgeÕs Þndings Mr Salaam and Mr Al
Tajir were liable in respect of Dubai AluminiumÕs loss. That is clear. In
order to found a contribution claim the Amhurst Þrm had to show it, too,
was ÔÔliableÕÕ in respect of the loss suered by Dubai Aluminium. The
Amhurst Þrm claimed it satisÞed this prerequisite because, pursuant to
section 10 of the Partnership Act 1890, it was liable for Mr AmhurstÕs F
alleged wrongdoing. Thus, so it claimed, the case falls squarely within the
scope of section 1(1) of the Contribution Act.
8 This was denied by Mr Al Tajir and Mr Salaam. They contended that
the Amhurst Þrm is not entitled to make any contribution claim against
them. Their case is that the Amhurst Þrm was not vicariously responsible for
Mr AmhurstÕs alleged misconduct, on two grounds. The Þrst ground is that G
the cause of action asserted by Dubai Aluminium does not fall within the
scope of section 10 of the 1890 Act. This raises a question of interpretation
of the statute. Section 10 provides:
ÔÔWhere, by any wrongful act or omission of any partner acting in the
ordinary course of the business of the Þrm, or with the authority of his co-
partners, loss or injury is caused to any person not being a partner in the H
Þrm, or any penalty is incurred, the Þrm is liable therefor to the same
extent as the partner so acting or omitting to act.ÕÕ
9 The case advanced by Mr Al Tajir and Mr Salaam runs as follows.
The claim made by Dubai Aluminium against Mr Amhurst is not that he
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A committed a common law tort such as deceit or negligence. The claim is that
he committed the equitable wrong of dishonest participation in a breach of
trust or Þduciary duty. Mr Amhurst dishonestly procured or assisted
Mr Livingstone in the breach of the Þduciary duties he owed to Dubai
Aluminium. Although fault-based, this species of equitable wrong is not a
ÔÔwrongful act or omissionÕÕ within the meaning of section 10. Section 10
B
being inapplicable, the Amhurst Þrm was not liable for the acts of
Mr Amhurst of which Dubai Aluminium complained.
10 This argument was rejected by Rix J and the majority of the Court of
Appeal. I agree with them. There is nothing in the language of section 10 to
suggest that the phrase ÔÔany wrongful act or omissionÕÕ is intended to be
conÞned to common law torts. On the contrary, the reference to incurring a
penalty points away from such a narrow interpretation of the phrase. The
C liability of co-partners for penalties incurred, for instance, for breach of
revenue laws was well established when the 1890 Act was passed: see
Lindley on Partnership, 6th ed (1893), p 160, and Attorney General v
Stannyforth (1721) Bunb 97.
11 In addition to the language the statutory context points in the same
direction. Section 10 applies only to the conduct of a partner acting in the
D ordinary course of the ÞrmÕs business or with the authority of his co-
partners. It would be remarkable if a Þrm were liable for fraudulent
misrepresentations made by a partner so acting, but not liable for dishonest
participation by a partner in conduct directed at the misappropriation of
anotherÕs property. In both cases the liability of the wrongdoing partner
arises from dishonesty. In terms of the ÞrmÕs liability there can be no
rational basis for distinguishing one case from the other. Both fall naturally
E within the description of a ÔÔwrongful actÕÕ.
12 In 1874 Lord Selborne LCÕs famous statement in Barnes v Addy
(1874) LR 9 Ch App 244, 251Ð252, made plain that a stranger to a trust
could be liable in equity for assisting in a breach of trust, even though he
received no trust property. On the interpretation of section 10 advanced for
Mr Al Tajir and Mr Salaam, a Þrm could never be vicariously liable for such
F conduct by one of their partners. I can see nothing to commend this
interpretation of the statute.
Section 10 of the Partnership Act 1890: ÔÔacting in the ordinary course of the
business of the ÞrmÕÕ
13 The second ground on which Mr Al Tajir and Mr Salaam contended
G that the Amhurst Þrm was not liable for Mr AmhurstÕs alleged acts is that
these acts were not done by him while acting in the ordinary course of the
business of the Þrm. I say ÔÔalleged actsÕÕ, because Dubai AluminiumÕs claims
against Mr Amhurst and the Þrm were settled before the trial judge made
his Þndings of fact. Whether Dubai AluminiumÕs allegations against
Mr Amhurst were well founded was never decided.
14 The Contribution Act makes provision for what should happen in
H
such a case. Where a defendant compromises a plaintiÕs claim in good
faith, the defendant is entitled to claim contribution under the Act without
regard to whether he was liable for the damage in question but on the
assumption that the factual basis of the claim alleged against him could
be established: section 1(4). Thus the Amhurst ÞrmÕs ability to seek
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376
contribution from others in respect of the payments it made to settle Dubai A

AluminiumÕs claims depends upon whether the Þrm would have been liable
to Dubai Aluminium on the assumption that the factual basis of Dubai
AluminiumÕs claim against the Þrm could have been established.
15 The relevant facts alleged by Dubai Aluminium against the Amhurst
Þrm as the basis of its vicarious liability are that the consultancy agreement
between Dubai Aluminium and Marc Rich & Co and the sub-agreements
B
were drafted by Mr Amhurst. This is said to have been done by way of
dishonest assistance to Mr Livingstone to act in breach of the Þduciary
duties he owed to Dubai Aluminium.
16 Mr Sumption submitted that whether an act is done in the ordinary
course of a ÞrmÕs business is a question of fact. Here the allegation in the
amended points of claim is that the agreements were drafted by Mr Amhurst
ÔÔin his capacity as a partnerÕÕ in the Amhurst Þrm. This, counsel submitted, C
is an allegation of fact. For the purposes of the Amhurst ÞrmÕs contribution
claim this allegation is assumed to be well founded, pursuant to section 1(4)
of the Contribution Act. That is the end of the matter.
17 I do not think the issue of vicarious liability is quite so
straightforward when, as here, the act in question was not authorised. In
order to identify the crucial issue it is necessary Þrst to be clear on what is
D
meant in this context by ÔÔacting in the ordinary course of businessÕÕ.
18 Partnership is the relationship which subsists between persons
carrying on a business in common with a view of proÞt: section 1 of the
Partnership Act 1890. Partnership is rooted in agreement, express or tacit,
between the partners. So is the conduct of the partnership business. Clearly,
the nature and scope of a business carried on by partners are questions of
fact. Similarly, what the ordinary course of the business comprises, in the E
sense of what is the normal manner in which the business is carried on, is
also a question of fact. So also is the scope of a partnerÕs authority.
19 Vicarious liability is concerned with the responsibility of the Þrm to
other persons for wrongful acts done by a partner while acting in the
ordinary course of the partnership business or with the authority of his co-
partners. At Þrst sight this might seem something of a contradiction in
F
terms. Partners do not usually agree with each other to commit wrongful
acts. Partners are not normally authorised to engage in wrongful conduct.
Indeed, if vicarious liability of a Þrm for acts done by a partner acting in the
ordinary course of the business of the Þrm were conÞned to acts authorised
in every particular, the reach of vicarious liability would be short indeed.
Especially would this be so with dishonesty and other intentional
wrongdoing, as distinct from negligence. Similarly restricted would be the G
vicarious responsibility of employers for wrongful acts done by employees in
the course of their employment. Like considerations apply to vicarious
liability for employees.
20 Take the present case. The essence of the claim advanced by Dubai
Aluminium against Mr Amhurst is that he and Mr Salaam engaged in a
criminal conspiracy to defraud Dubai Aluminium. Mr Amhurst drafted the
H
consultancy agreement and other agreements in furtherance of this
conspiracy. Needless to say, Mr Amhurst had no authority from his partners
to conduct himself in this manner. Nor is there any question of conduct of
this nature being part of the ordinary course of the business of the Amhurst
Þrm. Mr Amhurst had authority to draft commercial agreements. He had
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A no authority to draft a commercial agreement for the dishonest purpose of

furthering a criminal conspiracy.
21 However, this latter fact does not of itself mean that the Þrm is
exempt from liability for his wrongful conduct. Whether an act or omission
was done in the ordinary course of a ÞrmÕs business cannot be decided
simply by considering whether the partner was authorised by his co-partners
to do the very act he did. The reason for this lies in the legal policy
B
underlying vicarious liability. The underlying legal policy is based on the
recognition that carrying on a business enterprise necessarily involves risks
to others. It involves the risk that others will be harmed by wrongful acts
committed by the agents through whom the business is carried on. When
those risks ripen into loss, it is just that the business should be responsible for
compensating the person who has been wronged.
C 22 This policy reason dictates that liability for agents should not be
strictly conÞned to acts done with the employerÕs authority. Negligence can
be expected to occur from time to time. Everyone makes mistakes at times.
Additionally, it is a fact of life, and therefore to be expected by those who
carry on businesses, that sometimes their agents may exceed the bounds of
their authority or even defy express instructions. It is fair to allocate risk of
losses thus arising to the businesses rather than leave those wronged with the
D
sole remedy, of doubtful value, against the individual employee who
committed the wrong. To this end, the law has given the concept of
ÔÔordinary course of employmentÕÕ an extended scope.
23 If, then, authority is not the touchstone, what is? Lord Denning MR
once said that on this question the cases are baÂing: see Morris v C W Martin
& Sons Ltd [1966] 1 QB 716, 724. Perhaps the best general answer is that
E the wrongful conduct must be so closely connected with acts the partner or
employee was authorised to do that, for the purpose of the liability of the
Þrm or the employer to third parties, the wrongful conduct may fairly and
properly be regarded as done by the partner while acting in the ordinary
course of the ÞrmÕs business or the employeeÕs employment. Lord Millett
said as much in Lister v Hesley Hall Ltd [2002] 1 AC 215, 245. So did Lord
Steyn, at pp 223Ð224 and 230. McLachlin J said, in Bazley v Curry (1999)
F
174 DLR (4th) 45, 62:
ÔÔthe policy purposes underlying the imposition of vicarious liability on
employers are served only where the wrong is so connected with the
employment that it can be said that the employer has introduced the risk
of the wrong (and is thereby fairly and usefully charged with its
management and minimisation).ÕÕ (Emphasis added.)
G
To the same eect is Professor AtiyahÕs monograph Vicarious Liability
(1967), p 171: ÔÔThe master ought to be liable for all those torts which can
fairly be regarded as reasonably incidental risks to the type of business he
carried on.ÕÕ (Emphasis added.)
24 In these formulations the phrases ÔÔmay fairly and properly be
regardedÕÕ, ÔÔcan be saidÕÕ and ÔÔcan fairly be regardedÕÕ betoken a value
H
judgment by the court. The conclusion is a conclusion of law, based on
primary facts, rather than a simple question of fact.
25 This ÔÔclose connectionÕÕ test focuses attention in the right direction.
But it aords no guidance on the type or degree of connection which will
normally be regarded as su±ciently close to prompt the legal conclusion that
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the risk of the wrongful act occurring, and any loss ßowing from the A
wrongful act, should fall on the Þrm or employer rather than the third party
who was wronged. It provides no clear assistance on when, to use Professor
FlemingÕs phraseology, an incident is to be regarded as su±ciently work-
related, as distinct from personal: see Fleming, The Law of Torts, 9th ed
(1998), p 427. Again, the well known dictum of Lord Dunedin in Plumb v
Cobden Flour Mills Co Ltd [1914] AC 62, 67, draws a distinction between
B
prohibitions which limit the sphere of employment and those which only
deal with conduct within the sphere of employment. This leaves open how
to recognise the one from the other.
26 This lack of precision is inevitable, given the inÞnite range of
circumstances where the issue arises. The crucial feature or features, either
producing or negativing vicarious liability, vary widely from one case or type
of case to the next. Essentially the court makes an evaluative judgment in C
each case, having regard to all the circumstances and, importantly, having
regard also to the assistance provided by previous court decisions. In this
Þeld the latter form of assistance is particularly valuable.
27 So I turn to authority, noting that the present appeal concerns
dishonest conduct. Historically the courts have been less ready to Þnd
vicarious liability in cases of employee dishonesty than in cases of
D
negligence. In turning to decisions concerned with dishonest conduct I leave
aside cases where a Þrm or employer undertakes a responsibility to a third
party and then entrusts the discharge of that responsibility to the dishonest
partner or agent. A leading example of this type of case is Morris v
C W Martin & Sons Ltd [1966] 1 QB 716, 736Ð737, per Lord Diplock,
where the defendantsÕ employee stole a fur delivered to the defendants for
cleaning. E
28 I also leave aside cases where the wronged party is defrauded by an
employee acting within the scope of his apparent authority. The classic
instance of this is Lloyd v Grace Smith & Co [1912] AC 716, where
Mrs Lloyd delivered the title deeds of her cottages at Ellesmere Port to the
solicitorsÕ fraudulent managing clerk. The critical feature in this type of case
is that the wronged person acted in reliance on the ostensible authority of the
F
employee.
29 I can put aside both those types of case because there is no question
in the present appeal of the Amhurst Þrm having undertaken any
responsibility to Dubai Aluminium. Nor is there any question of Dubai
Aluminium having dealt with Mr Amhurst in reliance on any apparent
authority he may have had. There is no question of the Þrm having ÔÔheld
outÕÕ Mr Amhurst to Dubai Aluminium as having authority to do what he is G
alleged to have done. Nor need I enter upon the debate whether either of
these two types of case is strictly to be regarded as vicarious liability at all.
30 I turn, then, to cases such as the present where there is no question of
reliance or ÔÔholding outÕÕ, or of the employer having assumed a direct
responsibility to the wronged person. Take a case where an employee does
an act of a type for which he is employed but, perhaps through a misplaced
H
excess of zeal, he does so dishonestly. He seeks to promote his employerÕs
interests, in the sphere in which he is employed, but using dishonest means.
Not surprisingly, the courts have held that in such a case the employer may
be liable to the injured third party just as much as in a case where the
employee acted negligently. Whether done negligently or dishonestly the
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A wrongful act comprised a wrongful and unauthorised mode of doing an act

authorised by the employer, in the oft repeated language of the ÔÔSalmondÕÕ
formulation: see Salmond, Law of Torts, 1st ed (1907), p 83. As Willes J said,
in Barwick v English Joint Stock Bank (1867) LR 2 Ex 259, 266:
ÔÔIt is true, [the master] has not authorized the particular act, but he has
put the agent in his place to do that class of acts, and he must be
B answerable for the manner in which the agent has conducted himself in
doing the business which it was the act of his master to place him in.ÕÕ
31 In Hamlyn v John Houston & Co [1903] 1 KB 81, 85, one aspect of
the business of the defendant Þrm of grain merchants was to obtain, by
lawful means, information about its competitorsÕ activities. Houston, a
partner in the Þrm, obtained conÞdential information on the plainti
C HamlynÕs business by bribing one of HamlynÕs employees. The Court of
Appeal held the Þrm was liable for the loss suered by Hamlyn. Sir Richard
Henn Collins MR said that if it was within the scope of HoustonÕs authority
to obtain the information by legitimate means, then for the purpose of
vicarious liability it was within the scope of his authority to obtain it by
illegitimate means and the Þrm was liable accordingly. Sir Richard Henn
D Collins MR rested his decision on the broad ÔÔriskÕÕ principle: the principal
having selected the agent, and being the person who will have the beneÞt of
his eorts if successful, it is not unjust he should bear the risk of the agent
ÔÔexceeding his authority in matters incidental to the doing of the acts the
performance of which has been delegated to himÕÕ.
32 The limits of this broad principle should be noted. A distinction is to
be drawn between cases such as Hamlyn v John Houston & Co [1903] 1 KB
E
81, where the employee was engaged, however misguidedly, in furthering his
employerÕs business, and cases where the employee is engaged solely in
pursuing his own interests: on a ÔÔfrolic of his ownÕÕ, in the language of the
time-honoured catch phrase. In the former type of case the employee, while
seeking to promote his employerÕs interests, does an act of a kind he is
authorised to do. Then it may well be appropriate to attribute responsibility
F for his act to the employer, even though the manner of performance was not
authorised or, indeed, was prohibited. The matter stands dierently when
the employee is engaged only in furthering his own interests, as distinct from
those of his employer. Then he ÔÔacts as to be in eect a stranger in relation
to his employer with respect to the act he has committedÕÕ: see Isaacs J in
Bugge v Brown (1919) 26 CLR 110, 118. Then the mere fact that the act
G was of a kind the employee was authorised to do will not, of itself, fasten
liability on the employer. In the absence of ÔÔholding outÕÕ and reliance, there
is no reason in principle why it should. Nor would this accord with
authority. To attribute vicarious liability to the employer in such a case of
dishonesty would be contrary to the familiar line of ÔÔdriverÕÕ cases, where an
employer has been held not liable for the negligent driving of an employee
who was employed as a driver but at the time of the accident was engaged in
H
driving his employerÕs vehicle on a frolic of his own.
33 In Kooragang Investments Pty Ltd v Richardson & Wrench Ltd
[1982] AC 462, 473Ð475, Lord Wilberforce drew this distinction with his
accustomed lucidity and authority. He rejected the broad proposition that
so long as the employee is doing acts of the same kind as those it is within his
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authority to do, the employer is liable and he is not entitled to show the A
employee had no authority to do them. Lord Wilberforce said:
ÔÔthe underlying principle remains that a servant, even while
performing acts of the class which he was authorised, or employed, to do,
may so clearly depart from the scope of his employment that his master
will not be liable for his wrongful acts.ÕÕ
B
In the Kooragang case the employee, authorised to carry out valuations,
negligently carried out a valuation without authority from his employers
and not on their behalf. In doing so he was not acting as an employee of the
defendant company. The company was not liable for his wrongful acts.
That was a case of negligence, but a similar approach is no less applicable in
cases of dishonesty.
34 With this illustrative guidance I turn to consider on which side of the C
line is the present case. In drafting the consultancy agreements was
Mr Amhurst acting solely on his own behalf? Or was he acting, although
misguidedly, on behalf of the Amhurst Þrm? Had the claims against
Mr Amhurst and the Þrm been tried to a conclusion the judge would have
made Þndings of fact on what Mr Amhurst did, how he conducted his
relevant business dealings with Mr Salaam and others, whether his conduct
D
was dishonest, and whether he was acting for the Þrm or solely in his own
interests. The court would have looked overall at all the circumstances. The
court, and this House, would then have been properly equipped with the
appropriate factual material with which to answer these questions. As it is,
the only relevant plea in the particulars of claim is the compendious
allegation that in doing what he did Mr Amhurst was acting in his capacity
as a partner. In so far as this allegation is an allegation of fact, it is assumed E
to be correct.
35 This is a factually meagre basis on which to decide a question of
vicarious responsibility for assumed dishonest conduct. But there is no other
factual material available. Perforce the House must do its best with this
material. Proceeding on this footing, in this context ÔÔacting in his capacity
as a partnerÕÕ can only mean that Mr Amhurst was acting for and on behalf
F
of the Þrm, as distinct from acting solely in his own interests or the interests
of others. He was seeking to promote the business of the Þrm.
36 On this assumed factual basis, I consider the Þrm is liable for
Mr AmhurstÕs dishonest assistance in the fraudulent scheme, the assistance
taking the form of drafting the necessary agreements. Drafting agreements
of this nature for a proper purpose would be within the ordinary course of
the ÞrmÕs business. Drafting these particular agreements is to be regarded as G
an act done within the ordinary course of the ÞrmÕs business even though
they were drafted for a dishonest purpose. These acts were so closely
connected with the acts Mr Amhurst was authorised to do that for the
purpose of the liability of the Amhurst Þrm they may fairly and properly be
regarded as done by him while acting in the ordinary course of the ÞrmÕs
business.
H
37 I add two points for completeness. In the course of presentation of
the oral arguments reference was made to evidential material which seems to
support this characterisation of Mr AmhurstÕs activities. For instance, it
appears that Mr Salaam was a client of the Þrm, and that a bill rendered to
him by the Þrm included a charge for drafting the consultancy agreements.
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A It would not be right to take into account matters such as these. They were
not pleaded, and they were not the subject of adjudication by the court.
38 Secondly, Mr Malek placed reliance on the wide range of facts
pleaded against Mr Amhurst personally. They are summarised in the
judgment of Rix J [1999] 1 LloydÕs Rep 415, 466. They appear to include his
giving advice and assistance to Mr Livingstone and Marc Rich & Co, who
B
were not his or the ÞrmÕs clients. Mr Malek submitted that all these acts
should be considered together. When so considered, it is apparent they
cannot be characterised as so closely connected to the acts Mr Amhurst was
authorised to do that they can properly be regarded as part of the ordinary
course of business of the Amhurst Þrm. I am unable to accept this
submission. The claims against Mr Amhurst and the Þrm having been
compromised, the ÞrmÕs entitlement to pursue a contribution claim against
C Mr Al Tajir and Mr Salaam must be determined on the basis only of the facts
pleaded against the Þrm.
39 A further point arises here. The additional facts pleaded against
Mr Amhurst unwittingly led the Court of Appeal astray. Evans LJ stated
that vicarious liability is not imposed ÔÔunless all of the acts or omissions
which make the servant personally liable as a tortfeasor took place within
D the course of his employmentÕÕ: see [2001] QB 113, 133. Aldous LJ was of
a similar view. I respectfully consider this proposition, as it stands, is
ambiguous. The ambiguity would be removed if the proposition were
amended to read that vicarious liability is not imposed unless all the acts or
omissions which are necessary to make the servant personally liable took
place within the course of his employment. That is the present case. That
was not the position in Credit Lyonnais Bank Nederland NV (now known as
E Generale Bank Nederland NV) v Export Credits Guarantee Department
[2000] 1 AC 486, the case relied upon by the Court of Appeal: see Lord
Woolf MR, at p 495. In the present case, drafting the consultancy agreement
and other agreements were acts of assistance by Mr Amhurst and, coupled
with dishonesty, they were su±cient in themselves to give rise to equitable
liability on his part. That assistance was given by Mr Amhurst while acting
F in the ordinary course of the ÞrmÕs business, as discussed above. The Þrm is
liable accordingly. It matters not, for the purpose of establishing vicarious
liability, that Mr Amhurst may have done other, additional acts while acting
outside the ordinary course of the ÞrmÕs business.
The case of Mara v Browne

G 40 I must also mention a passing dictum of Lord Herschell sitting in the
Court of Appeal in Mara v Browne [1896] 1 Ch 199, 208, to the eect that it
is not within the scope of the implied authority of a partner in a Þrm of
solicitors that he should so act to make himself a constructive trustee, and
thereby subject his partner to the same liability: see also A L Smith LJ, at
p 212, and Rigby LJ, at p 214.
41 These dicta do not assist the respondents in the present case. The
H
claim against Mr Amhurst is that he dishonestly procured or assisted
Mr Livingstone to commit a breach of the Þduciary duty he owed Dubai
Aluminium. Such misconduct by Mr Amhurst gives rise to a liability in
equity to make good resulting loss: see Royal Brunei Airlines Sdn Bhd v Tan
[1995] 2 AC 378, 392. The liability of a Þrms of solicitors in respect of acts
125
382
of a partner which render him liable in this way depends upon an application A
of the ordinary principles relating to vicarious liability. There is no special
rule of law applicable to this head of equitable liability.
42 I do not think Lord Herschell or the other members of the Court of
Appeal can be taken as suggesting otherwise. Their statements in Mara v
Browne should not be so read. In so far as Vinelott J did so read these
statements, or did so decide, in In re BellÕs Indenture [1980] 1 WLR 1217, B
1230, I respectfully consider he fell into error. The statements in Mara v
Browne were directed at a dierent question: whether acting as a trustee,
although not having been so appointed, can be regarded as conduct within
the scope of the business of a solicitor. Whether the views expressed by the
Court of Appeal on this question are still good law, having regard to later
developments in the principles relating to vicarious liability, is a matter
I prefer to leave for another occasion. C
Contribution and vicarious liability

43 On the footing that the Amhurst Þrm was liable to Dubai
Aluminium for the same damage as Mr Amhurst, Mr Al Tajir, Mr Salaam,
Mr Livingstone and Marc Rich & Co, their respective contributions fall to
be determined in accordance with section 2 of the Contribution Act. D
Section 2(1) provides that the amount of the contribution recoverable from
any person ÔÔshall be such as may be found by the court to be just and
equitable having regard to the extent of that personÕs responsibility for the
damageÕÕ. The contribution recoverable may amount to a complete
indemnity: section 2(2).
44 When directing that the Amhurst Þrm should recover from Mr Al E
Tajir and Mr Salaam contribution amounting to a complete indemnity, the
combination of two matters in particular weighed with the judge: see [1999]
1 LloydÕs Rep 415, 476. The Þrst was that the partners in the Amhurst Þrm,
as distinct from Mr Amhurst himself, were personally innocent of any
wrongdoing. This personal innocence of dishonesty was to be contrasted
with the dishonesty of Mr Salaam and Mr Al Tajir. Rix J considered it
would be unjust if a defendant who was vicariously liable for his employeeÕs F
fraud could not have his innocence of dishonesty count in his favour: see
[1999] 1 LloydÕs Rep 415, 472. In the Court of Appeal [2001] 1 QB 113
Evans LJ disagreed: see p 136.
45 I prefer the conclusion of Evans LJ. On the approach of Rix J an
employer is in a better position, vis--vis co-defendants, than the employee
for whose wrong the employer is vicariously liable. A co-defendant is worse G
placed to resist a contribution claim from an employer than he is from the
wrongdoing employee.
46 This cannot be right. It would mean that a co-defendantÕs liability to
make a contribution payment diers, according to whether contribution is
being sought by the employer or the employee. An employer could obtain
contribution from a co-defendant in circumstances where the wrongdoing
H
employee himself could not. If an employee was one of two wrongdoers
equally to blame, his ÔÔinnocentÕÕ employer could look to the other,
blameworthy wrongdoer for a contribution even though the employee could
not. Or take a more extreme case, where an employee is four-Þfths
responsible for an accident and a co-defendant one-Þfth. If the employerÕs
126
383
A blamelessness could be taken into account in contribution proceedings, the

co-defendant could Þnd himself saddled with responsibility for more than a
one-Þfth share of the damages. The personally ÔÔinnocentÕÕ employer,
vicariously responsible for the acts of the employee who bears most of the
responsibility for the accident, could recover contribution amounting to an
indemnity from the individual wrongdoer whose blameworthiness, as
B
between the two individual wrongdoers, is assessed at only one-Þfth.
47 Examples such as these point irresistibly to the conclusion that
vicarious liability involves the notion that, vis--vis third parties, the
employer, although personally blameless, stands in the shoes of the
wrongdoer employee. This is so, both for the purposes of liability to
the plainti claimant and for the purposes of contribution proceedings. In
both cases the employerÕs liability is vicarious, that is, substitutional, not
C personal. The employer is liable for the fault of another. This approach
accords with everyday practice. No contrary authority was cited to your
LordshipsÕ House on this point.
48 Rix J was minded to treat cases of dishonesty dierently from cases
of negligence. I can see no basis for drawing such a distinction. The
consequences of vicarious responsibility do not dier according to the
D nature of the wrong, with the employer being able to rely on his personal
blamelessness in a case of dishonesty but not in a case of negligence. Nor is
there anything unjust in this approach. An employer is only required to
assume vicarious liability for his employeeÕs dishonesty when the dishonest
act was so closely connected with acts the employee was authorised to do
that it may fairly and properly be regarded as done by the employee in the
course of his employment.
E 49 Accordingly, in my view the personal innocence of the partners in the
Amhurst Þrm was not a relevant matter to be taken into account by the judge
when deciding the contribution proceedings. The Amhurst Þrm, vicariously
liable for Mr AmhurstÕs assumed dishonest wrongdoing, stands in his shoes
for all relevant purposes. The judge therefore fell into error when taking the
personal innocence of Mr AmhurstÕs partners into account: see [1999]
F 1 LloydÕs Rep 415, 476. Having misdirected himself in this regard it thus
becomes necessary for this House to make its own assessment pursuant to
section 2 of the Contribution Act.
Contribution and proceeds of wrongdoing

50 The other major factor which weighed with the judge when deciding
G to direct that the Amhurst Þrm should be entitled to an indemnity was that
Mr Salaam and Mr Al Tajir had still not disgorged their full receipts from the
fraud. The judge considered it would not be just and equitable to require
one party to contribute in a way which would leave another party in
possession of his spoils: see [1999] 1 LloydÕs Rep 415, 475.
51 Mr Salaam and Mr Al Tajir submitted that this approach is
impermissible. Under section 2(1) of the Contribution Act the court is
H
required to assess the amount of contribution recoverable from a person
which is just and equitable ÔÔhaving regard to the extent of that personÕs
responsibility for the damageÕÕ. ÔÔResponsibilityÕÕ includes both
blameworthiness and causative potency. However elastically interpreted,
ÔÔresponsibilityÕÕ does not embrace receipts.
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384
52 I cannot accept this submission. It is based on a misconception of the A

essential nature of contribution proceedings. The object of contribution
proceedings under the Contribution Act is to ensure that each party
responsible for the damage makes an appropriate contribution to the cost of
compensating the plainti, regardless of where that cost has fallen in the Þrst
instance. The burden of liability is being redistributed. But, of necessity, the
extent to which it is just and equitable to redistribute this Þnancial burden B
cannot be decided without seeing where the burden already lies. The court
needs to have regard to the known or likely Þnancial consequences of orders
already made and to the likely Þnancial consequences of any contribution
order the court may make. For example, if one of three defendants equally
responsible is insolvent, the court will have regard to this fact when directing
contribution between the two solvent defendants. The court will do so, even
C
though insolvency has nothing to do with responsibility. An instance of this
everyday situation can be found in Fisher v C H T Ltd (No 2) [1966] 2 QB
475, 481, per Lord Denning MR.
53 In the present case a just and equitable distribution of the Þnancial
burden requires the court to take into account the net contributions each
party made to the cost of compensating Dubai Aluminium. Regard should
be had to the amounts payable by each party under the compromises and to D
the amounts of Dubai AluminiumÕs money each still has in hand. As
Mr Sumption submitted, a contribution order will not properly reßect the
partiesÕ relative responsibilities if, for instance, two parties are equally
responsible and are ordered to contribute equally, but the proceeds have all
ended up in the hands of one of them so that he is left with a large
undisgorged balance whereas the other is out of pocket. E
54 Rix J considered this was obvious. So did Ferris J, in K v P [1993]
Ch 140, 149. I agree with them.
The contribution claims: overall assessment

55 Mr Salaam was the largest beneÞciary of the scheme, keeping about
41% of the receipts ($20.3m). Next to him was Mr Al Tajir, at 33% F
($16.5m), and then Mr Livingstone, at 13% ($6.3 m). Marc Rich & Co
retained nothing, and Mr Amhurst received nothing. Under the respective
compromise agreements, Mr Salaam, Mr Al Tajir and Mr Livingstone each
contributed about 23% to the principal sum claimed by Dubai Aluminium,
and the Amhurst Þrm about 13%.
56 This means that, in round Þgures, the net Þnancial position of G
Mr Salaam and Mr Al Tajir was as follows. Taking 31 December 1997 as
the date for the purpose of making comparisons, Mr SalaamÕs receipts, with
interest, amounted to $30.2m. The value of his settlement payment was
$17m. So he still retained net receipts of some $13m. Mr Al TajirÕs receipts,
with interest, amounted to $24.5m. The value of his settlement payment
was $16.9m. Thus his retained net receipts amounted to some $7.5m. The
position of the Amhurst Þrm was that it had made a settlement payment of H
$10m. No one pursued a contribution claim against Mr Livingstone or
Marc Rich & Co.
57 As matters have developed, the extant contribution claims are
twofold. The Amhurst Þrm seeks contribution from Mr Salaam and Mr Al
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385
A Tajir. Mr Salaam seeks contribution from Mr Amhurst in the event he is

held liable to make a contribution to the Amhurst Þrm.
58 I have no doubt that the appropriate order is an order in the terms
directed by Rix J. The starting point is the judgeÕs Þnding that in terms of the
promotion, organisation and operation of the scheme there was little to
choose between the Þve principal parties: Mr Salaam, Mr Al Tajir,
B
Mr Livingstone, Marc Rich & Co and Mr Amhurst. The only exception was
that Mr AmhurstÕs (assumed) responsibility was a little less than the others
but not very much. Thus, there is little to choose between Mr Salaam, Mr Al
Tajir and Mr Amhurst in terms of gravity of fault or potency of causal
contribution to the loss.
59 This suggests that a just and equitable distribution of the burden of
liability calls for a substantial measure of equality between the three of them.
C In this regard an unusual, and notable, feature of this case is the extent to
which some parties to the fraud, but not others, remain in possession of
substantial amounts of misappropriated money even after the plaintiÕs
claims have been met. Taken together Mr Salaam and Mr Al Tajir are still
net recipients to the extent of over $20m. If equality of burden is the goal,
the Amhurst Þrm ought not to be left out of pocket in respect of its $10m
D settlement payment. The Þrm should not be out of pocket so long as
Mr Salaam and Mr Al Tajir retain a surplus in hand. Unlike Mr Salaam and
Mr Al Tajir, neither the Amhurst Þrm nor Mr Amhurst received any money
from the fraud.
60 Mr Simpson submitted it was a ÔÔgreater evilÕÕ that Mr Amhurst, an
assumedly dishonest solicitor, should escape scot-free than that Mr Salaam
should retain some of the money. I do not agree. The Contribution Act casts
E
upon the court the task of adjudicating upon a just and equitable
distribution of the burden of liability between all manner of wrongdoers. In
the present case equality of burden among thieves can hardly be thought an
exceptional approach.
61 By the same token, I can see no occasion for the court to direct that
Mr Amhurst personally should make a contribution payment to Mr Salaam.
F I reiterate that in these contribution proceedings the Amhurst Þrm is
standing in the shoes of Mr Amhurst. The factors which make it right for the
Amhurst Þrm to succeed against Mr Salaam equally make it right that
Mr SalaamÕs claim against Mr Amhurst should fail.
62 The judge split the contribution payments between Mr Salaam and
Mr Al Tajir as follows. He considered that, in round Þgures, Mr Salaam
G should pay $7.5m to the Amhurst Þrm and Mr Al Tajir should pay $2.5m.
This would leave them with almost equal undisgorged receipts. Mr Salaam
would be left with $5.5m and Mr Al Tajir $5m. The judge considered that,
to the extent of these undisgorged receipts, they should each bear the risk of
the otherÕs insolvency. To achieve this result he directed that each should be
jointly liable with the other, but in the case of Mr Al Tajir up to a maximum
of an additional $5m: see [1999] 1 LloydÕs Rep 415, 477.
H 63 I can see nothing wrong with this reasoning or this result, once it is
accepted, as I have accepted, that Mr Al Tajir and Mr Salaam should
indemnify the Amhurst Þrm in respect of its settlement payment of $10m. In
the ordinary way, orders for contribution payments are made severally
against the persons concerned. But there is no reason in principle why the
2 AC 2003Ñ13
129
386
court should not make provision for what is to occur in the event of A
insolvency. That is the purpose and eect of the judgeÕs order.
64 I would allow the appeal of the Amhurst Þrm, set aside the order of
the Court of Appeal, and restore the order of Rix J. The appeals of Mr Al
Tajir and Mr Salaam should be dismissed.
LORD SLYNN OF HADLEY

65 My Lords, I have had the advantage of reading in draft the speech of B
my noble and learned friend, Lord Nicholls of Birkenhead. For the reasons
he has given, I would allow the appeal of the Amhurst Þrm, set aside the
order of the Court of Appeal, and restore the order of Rix J. I would dismiss
the cross-appeals of Mr Al Tajir and Mr Salaam.
LORD HUTTON C
66 My Lords, I have had the advantage of reading in draft the speeches
of my noble and learned friends, Lord Nicholls of Birkenhead and Lord
Millett. I agree with them, and for the reasons which they give I would allow
the appeal of the Amhurst Þrm, set aside the order of the Court of Appeal
and restore the order of Rix J, and dismiss the appeals of Mr Al Tajir and
Mr Salaam.
D
LORD HOBHOUSE OF WOODBOROUGH
67 My Lords, the present appeals all concern claims to contribution
under the Civil Liability (Contribution) Act 1978. The questions which they
raise derive from certain complicating factors present in this case. These are
the treatment of settlements, the relevance of liability which is vicarious
only, the treatment of multi-party cases, the ability to obtain a contribution
E
from another wrongdoer, the equitable sharing of the loss.
68 Upon the separate question arising on section 10 of the Partnership
Act 1890, I do not wish to add anything to what is said in your LordshipsÕ
opinions.
Settlements
69 Section 1(1) of the 1978 Act requires the person claiming a F
contribution to prove that he was a ÔÔperson liable in respect ofÕÕ the damage
suered by the injured party. But subsection (4) qualiÞes this where the
person claiming the contribution has made a bona Þde settlement or
compromise of the claim against him, in which case all he need prove is that
he would have been liable ÔÔassuming that the factual basis of the claim
against him could be establishedÕÕ. This raises the question: how is the G
factual basis of the claim against him to be identiÞed? The answer to this
question must obviously depend upon the circumstances. The claim may
have been settled or compromised without the commencement of legal
proceedings or it may only be settled later after the exchange of pleadings or
during the trial. Some proceedings may be governed by strict procedural
rules; others may allow a party to inform the other of the factual basis of his
H
claim with greater informality. Pleadings may be dispensed with. In the
Commercial Court factual allegations can be particularised informally in a
number of ways.
70 In the present case the factual allegations in the pleading were more
than su±cient to lay the factual basis for a liability of the partnership under
130
387
Lord Hobhouse of Woodborough
A section 10 of the Partnership Act 1890 in the tort of deceit. So, once it is
appreciated that it is a case of the vicarious liability of the partnership for the
tort committed by one of the partners in the course of the partnership
business no further problem arises under this head. But I would not wish it
to be thought that material other than pleadings may never have to be
looked at. The variety of circumstances to which I have already referred
B
demonstrates this. Further, if the state of the pleadings is to be decisive, a
defendant wishing to compromise a case may have to insist that the claimant
Þrst amend his pleading so as to make express the basis of claim which
justiÞes the settlement, even though neither would be taken by surprise nor
able later to resist appropriate amendments. The purpose of subsection (4) is
to facilitate bona Þde settlements without prejudicing the rights of the
paying party to claim a contribution from another. Of course the factual
C basis for the claim has to be identiÞed in order to enable the remainder of
section 1 to be applied but it would be mistaken to introduce inappropriate
formalities into the criterion required by the subsection.
Multi-party cases
71 In a simple case, say, injury to a passenger arising from a collision
D between two cars, both to blame, no problem arises. The court apportions
the liability between the two drivers. But where, as in the present case, there
has been a conspiracy to defraud involving a number of individuals,
complications can arise. Only some of them may be before the court; some
may be beyond the practical reach of the law; some may be insolvent; the
routes by which liability has arisen may dier.
72 Section 2 of the statute requires the court to order contribution in an
E
amount which is ÔÔjust and equitable having regard to the extent of that
personÕs responsibility for the damage in questionÕÕ, the ÔÔpersonÕÕ being the
person being ordered to contribute and the ÔÔdamage in questionÕÕ being the
damage suered by the victim for which the persons claiming and paying
contribution were both liable. The concept of what is just and equitable
corresponds to the restitutionary principles applied elsewhere in the law,
F for example, contributions between sureties or between insurers. The right
to a contribution arises from the fact that one person has borne a
disproportionate burden which it is just that another should share (or even
bear in full, section 2(3)). Likewise responsibility includes both the degree
of fault and the causative relevance of that fault. The power given to the
court is principled but not otherwise restricted. It is this power which the
G
court must use to solve any problems and arrive at a just and equitable
outcome.
Vicarious liability
73 A possible problem is the distinction between actual and vicarious
liability. There may be actual tortfeasors who have each committed a tort
which has contributed to the causing of the victimÕs damage. But there may
H
be behind them one or more employers or principals who are also liable in
respect of the same damage but their liability is vicarious: they are only
liable because of their servant or agentÕs fault. Is it just and equitable to
distinguish between the actual fault of the former and the vicarious liability
of the latter?
131
388
74 As between the servant and his employer (or agent and his principal), A
clearly it is prima facie just and equitable to make a distinction. But it will
not necessarily be as simple as that. The relationship between them will
normally be contractual and include express or implied terms to the beneÞt
of one or other party which have a decisive impact. For instance, there may
be terms concerning the provision of insurance cover. The apportionment,
as between them, will have to take such factors into account. B
75 As between the employer (or principal) and another tortfeasor, the
answer is normally more simple. The vicariously liable employer has in law
the same responsibility as his employee: the law attributes the responsibility
of the employee to the employer. The only qualiÞcation is if, as is alleged
against Mr Amhust in the present case, the employeeÕs tortious acts
included acts committed both within and without the scope of his
employment, or if the employer has also been to some degree personally to C
blame, in which case the assessment of the employerÕs responsibility will
have to be adjusted accordingly. But as against other tortfeasors, the
employer cannot escape his legal responsibility for his employeeÕs tort
committed within the scope of his employment. The justice of attributing
responsibility for the acts of an employee or agent to his employer or
principal is equally cogent when considering apportionment as between D
tortfeasors and any other conclusion would lead to absurd and unjust
results. The employer of a negligent lorry driver would be able to transfer
to, say, another car driver the whole of its third party liability
notwithstanding that as between the employer and the car driver, say in
respect of damage to the car, the car driver would be able to hold the
employer liable for the fault of his lorry driver.
E
BeneÞt
76 The fraud involved stealing money from Dubal. Neither
Mr Amhurst nor the partnership received any of the stolen money. But the
two parties from which the partnership is claiming the contribution did
receive large sums and have succeeded in retaining a substantial part of
them. Mr Salaam and Mr Al Tajir are still net beneÞciaries from the fraud. F
Their argument is that such advantageous retentions should be disregarded,
that such enrichment should not be taken into account. There are two main
answers to this argument. The 1978 Act is an application of the principle
that there should be restitutionary remedies for unjust enrichment at the
expense of another. To allow Mr Salaam and Mr Al Tajir to retain these
gains and resist a claim by the partnership for a contribution to the net loss G
of $10m which, by reason of its liability to Dubal, the partnership has
incurred would be to allow them to be unjustly enriched at the expense of the
partnership. Secondly, the reason why Dubal still had an unrecovered loss
after settling with Mr Salaam and Mr Al Tajir is that Mr Salaam and
Mr Al Tajir have wrongfully not returned to Dubal the full sums taken.
Accordingly the responsibility of Mr Salaam and Mr Al Tajir for DubalÕs
H
loss must take into account this wrongful and continuing retention.
77 The judge was right to hold that it was just and equitable and in
accordance with their respective responsibilities for the damage to Dubal
that Mr Salaam and Mr Al Tajir should bring into the assessment the sums
which they had retained and that the partnership should be entitled to obtain
132
389
A a 100% contribution from them, pro rata. The same logic applies to the
cross-claim for a contribution against Mr Amhurst personally. It is true that
should Mr Amhurst hereafter be proved to have been fraudulent, he would
not be free from legal responsibility. But focusing on the question of arriving
at a just and equitable distribution of the burden of the liability to Dubal,
neither Mr Salaam nor Mr Al Tajir will, even after a 100% contribution to
the partnership, be out of pocket and it follows that they can have no basis
B
for claiming a contribution from Mr Amhurst.
Insolvency
78 This is the Þnal point. The judgeÕs order took account of the fact that
Mr Al Tajir might be insolvent. How should this be reßected in the order to
be made in favour of the partnership? The judgeÕs solution was the right
C one. It is just and equitable that if the partnership is unable to recover from
Mr Al Tajir his share of the contribution, the partnership should be able to
recover it from Mr Salaam. Mr Salaam will still be in pocket even if he has
to contribute the full $10m. The inability of a person claiming a
contribution from another tortfeasor to recover from a third is relevant as
between the claimant and the respondent to the making of a contribution
D order and its amount. Here the availability of a recovery from Mr Al Tajir
would go to reduce the order to be made against Mr Salaam. But if it is not
possible to recover from Mr Al Tajir, there is no basis for making that
reduction in favour of Mr Salaam.
Conclusion
E 79 For these reasons and those given by your Lordships I agree with the
orders proposed.
LORD MILLETT
(1) The issues
80 My Lords, the issues with which your Lordships are concerned arise
F in the course of contribution proceedings following the settlement of a major
action in the Commercial Court. The action was brought to recover the
proceeds of a substantial fraud. The defendants included not only dishonest
participants in the scheme who had beneÞted personally from the fraud but
also innocent parties who had not but were alleged to be vicariously liable
for the dishonest activities of others. Those who contributed to the
G settlement included the innocent as well as the guilty. The terms of
settlement left some of the guilty parties with undisgorged proÞts.
81 Three main issues fall to be considered: (i) whether, and if so in what
circumstances, a Þrm and its innocent partners may be vicariously liable for
a partnerÕs dishonest assistance in a breach of trust; (ii) whether such
partners may rely upon their personal innocence of wrongdoing to obtain an
indemnity or contribution from the principal wrongdoers, or are to be
H
treated as standing in the shoes of the partner for whose dishonest acts they
are vicariously liable; (iii) whether the amount of any undisgorged proÞts in
the hands of the principal wrongdoers may be taken into account in
considering the ultimate incidence of liability among those who have
contributed to the victimÕs recoveries.
133
390
Lord Millett
(2) The scheme A

82 The action was concerned with a fraudulent scheme to extract
money from the plainti, Dubai Aluminium Co Ltd (ÔÔDubalÕÕ), which
operates an aluminium smelter in Dubai. As a result of the scheme Dubal
was induced to pay out some $50m over a six-year period under a bogus
consultancy agreement with Marc Rich & Co AG (ÔÔRichcoÕÕ). Virtually the
whole of the proceeds were passed on by Richco and shared out among the B
principal participants in the fraud under equally bogus subsidiary
agreements. The trial judge (Rix J) found that the consultancy agreement
was a sham device for abstracting money from Dubal. A remarkable feature
of the case is that none of the parties to any of the agreements contended that
they were genuine.
83 The principals behind the scheme were DubalÕs chief executive,
C
Mr Ian Livingstone, acting in concert with Mr Hany Mohammed Salaam
and His Excellency Mahdi Mohammed Al Tajir. Mr Salaam is an
international businessman; Mr Al Tajir, who had had previous business
dealings with Mr Salaam, was at one time a close conÞdant of the Ruler of
Dubai and wielded considerable inßuence in the region. The three of them
together with Mr SalaamÕs brother Mr Saad Salaam divided the spoils
between them or companies which they controlled as follows: D
Mr Salaam: $20.3m (40.5%)
Mr Al Tajir: $16.5m (32.9%)
Mr Livingstone: $6.3m (12.5%)
Mr Saad Salaam: $6m (12%)
Only a minimal sum was retained by Richco. Of the sums taken by the three
main participants, Mr Salaam and his companies received 47%, Mr Al Tajir
E
38%, and Mr Livingstone 15%.
(3) The proceedings

84 Dubal brought proceedings against Mr Salaam and two of his
companies, and joined as defendants Mr Anthony Amhurst, a London
solicitor, and the two successive Þrms of solicitors of which he was senior
partner at the relevant time. Nothing turns on the distinction between the F
two Þrms, and I shall refer to them indiscriminately as ÔÔAmhurstsÕÕ.
Mr Salaam was a client of Amhursts, and Mr Amhurst was the partner who
dealt with his aairs. Mr Salaam and Mr Al Tajir are the respondents to the
present appeal. They are also cross-appellants. The appellants are the
partners of Amhursts other than Mr Amhurst. With Mr Amhurst they are
also respondents to the cross-appeals. G
85 Dubal claimed that Mr Livingstone, in breach of his Þduciary duty
and with the dishonest assistance of Mr Salaam, Mr Al Tajir and Richco,
had misappropriated its funds; and that Mr Amhurst had dishonestly played
a signiÞcant role in the fraud. It alleged that he was responsible for the
drafting of the consultancy agreement and subsidiary agreements and for
the administration of the scheme; and that he gave instructions to Richco for
H
the payment of moneys due to the principal participants. Dubal accepted
that Mr Amhurst did not beneÞt personally from the fraud, although his Þrm
received relatively modest fees for the work done; but it was DubalÕs case
that his participation in the scheme was dishonest. This was vigorously
denied by Mr Amhurst. For reasons which will become clear, the case has
134
391
Lord Millett
A been conducted on the assumption that he was dishonest; but it must be said
at the outset that this has never been established. It is common ground that
his partners were personally innocent of any wrongdoing, but Dubal sought
to make them vicariously liable for his acts under section 10 of the
Partnership Act 1890.
86 Dubal did not join Mr Al Tajir as a defendant, although at trial it
B
contended, and the judge found, that he was a dishonest participant in the
scheme. The judgeÕs Þnding in this regard was unsuccessfully challenged by
Mr Al Tajir on appeal. Dubal did not join Mr Livingstone or Richco either,
having previously settled its claims against them.
87 Dubal claimed that Mr Salaam and Mr Amhurst were liable for
knowing receipt as well as dishonest assistance, though it did not pursue its
case for knowing receipt against Mr Amhurst at the trial. But its case in
C knowing receipt, like that in dishonest assistance, was founded on the
allegations of dishonesty, and was thus also fault-based. Dishonest receipt
gives rise to concurrent liability, since the claim can be based on the
defendantÕs dishonesty, treating the receipt itself as incidental, being merely
the particular form taken by the defendantÕs participation in the breach of
Þduciary duty; but it can also be based simply on the receipt, treating it as a
D restitutionary claim independent of any wrongdoing: see John v Dodwell &
Co Ltd [1918] AC 563.
88 Amhursts brought third party proceedings against Mr Salaam,
Mr Al Tajir, Mr Livingstone and Richco, for contribution under the Civil
Liability (Contribution) Act 1978 in respect of any sum for which they might
be held liable to Dubal. They did not claim contribution or indemnity from
Mr Amhurst himself. Mr Salaam brought similar contribution proceedings
E against Mr Al Tajir as well as against Mr Amhurst and Amhursts, while
Mr Al Tajir made a contingent claim to contribution from Mr Amhurst
(though not from Amhursts) in case he might be found liable to make a
contribution to Amhursts.
89 During the course of the trial Mr Amhurst and Amhursts settled with
Dubal by making a payment of $10m. Mr Amhurst made no contribution to
F this sum, which was paid by or on behalf of Amhursts alone, but it was
expressly paid on terms that the claims and allegations against Mr Amhurst
were withdrawn.
90 At the end of the Þrst part of the trial which was concerned with
liability and before proceeding to hear the various claims for contribution,
the judge with the consent of the parties published what he called his
ÔÔunreasoned ÞndingsÕÕ. After the conclusion of the second part of the trial
G
and at the request of the parties the judge deferred giving Þnal judgment in
order to allow negotiations for settlement to proceed. During the
adjournment Mr Salaam settled DubalÕs claim against him and his
companies and Mr Al Tajir settled its claim against him in each case at a sum
which the judge assessed at approximately $17m. The judge then proceeded
to hear further submissions on the contribution issues in the light of his
H unreasoned Þndings before giving Þnal judgment: [1999] 1 LloydÕs Rep 415.
(4) The decisions below

91 The action having settled, the judge had only to deal with the
outstanding claims for contribution. Amhursts did not pursue their claims
135
392
Lord Millett
against Richco, since it was a term of their settlement with Dubal that this A
should be withdrawn, or against Mr Livingstone. They claimed
contribution or indemnity from Mr Salaam and Mr Al Tajir in respect of
the $10m which they had paid to settle DubalÕs claim. Mr Amhurst faced
a claim from Mr Salaam and a contingent claim from Mr Al Tajir.
Mr Al Tajir faced claims for contribution from Amhursts and Mr Salaam
and made a contingent claim against Mr Amhurst. B
92 Mr Salaam and Mr Al Tajir contended that they were not liable to
contribute any part of the sum which Amhursts had paid to settle the action;
but if they were then either Mr Amhurst or Amhursts should be required to
make some contribution for the part which Mr Amhurst had played in the
scheme.
93 Any liability to contribute to AmhurstsÕ settlement with Dubal is
statutory and arises under the 1978 Act. So far as material, section 1 of that C
Act provides as follows:
ÔÔ1. Entitlement to contribution. (1) Subject to the following
provisions of this section, any person liable in respect of any damage
suered by another person may recover contribution from any other
person liable in respect of the same damage (whether jointly with him or
D
otherwise).
ÔÔ(2) A person shall be entitled to recover contribution by virtue of
subsection (1) above notwithstanding that he has ceased to be liable in
respect of the damage in question since the time when the damage
occurred, provided that he was so liable immediately before he made or
was ordered or agreed to make the payment in respect of which the
contribution is sought . . . E
ÔÔ(4) A person who has made or agreed to make any payment in bona
Þde settlement or compromise of any claim made against him in respect of
any damage (including a payment into court which has been accepted)
shall be entitled to recover contribution in accordance with this section
without regard to whether or not he himself is or ever was liable in respect
of the damage, provided, however, that he would have been liable F
assuming that the factual basis of the claim against him could be
established.ÕÕ
94 It was not disputed that the payment of $10m was made by
Amhursts ÔÔin bona Þde settlement or compromiseÕÕ of the claims made
against them by Dubal, or that the claims made against Mr Amhurst were
withdrawn as part of the settlement. The question, therefore, was whether, G
immediately before making the payment and assuming that the factual basis
of DubalÕs claim against Amhursts could be established, they would have
been ÔÔliable in respect of the damageÕÕ suered by Dubal. Such liability
could only be vicarious.
95 Section 10 of the Partnership Act 1890 provides for the vicarious
liability of partners. It is in the following terms: H
ÔÔ10. Liability of the Þrm for wrongs. Where, by any wrongful act or
omission of any partner acting in the ordinary course of the business of
the Þrm, or with the authority of his co-partners, loss or injury is caused
to any person not being a partner in the Þrm, or any penalty is incurred,
136
393
Lord Millett
A the Þrm is liable therefor to the same extent as the partner so acting or
omitting to act.ÕÕ
96 Mr Salaam and Mr Al Tajir contended that Amhursts were not liable
for Mr AmhurstÕs participation in the fraud. According to them Amhursts
had no need to settle the action and were not entitled to contribution in
respect of the $10m they paid. Their primary argument was that this was a
B matter of law. Section 10 of the Partnership Act 1890, they said, is limited to
torts or other wrongs actionable at common law, and does not cover
wrongdoing formerly cognisable only by the courts of equity in the exercise
of their exclusive jurisdiction. This argument was rejected by the judge and
the majority of the Court of Appeal (Evans and Aldous LJJ, Turner J
dissenting on this point). It has been revived before your Lordships.
C
97 In the alternative Mr Salaam and Mr Al Tajir submitted that
AmhurstÕs claim failed on the facts. They were not vicariously liable for
Mr AmhurstÕs wrongdoing because, they said, he was not acting in the
ordinary course of AmhurstsÕ business as section 10 of the Partnership Act
1890 requires. The judge rejected this submission, but it was unanimously
accepted by the Court of Appeal.
98 As the claims against Mr Amhurst and Amhursts had been settled,
D Amhursts relied upon the assumption provided for by Section 1(4) of the
1978 Act that the factual basis of the claims against them could be
established. The factual basis of DubalÕs claim was (i) that Mr Amhurst
dishonestly assisted Mr Livingstone to act in breach of his Þduciary duties to
Dubal; (ii) that he did so dishonestly; and (iii) that he did so ÔÔin his capacity
as a partner in [Amhursts]ÕÕ. By common consent these words have been
E taken to mean (as they were obviously intended to mean) ÔÔin the ordinary
course of AmhurstsÕ businessÕÕ. As against Amhursts, Dubal pleaded that, in
his capacity as a partner, he drafted the relevant agreements or gave
instructions for them to be drafted and carried out or gave instructions for
the carrying out of certain administrative acts in relation to the distribution
of the proceeds of the fraud. These activities lay at the heart of the fraud;
they were fundamental to the operation of the scheme. The judge held that
F Mr Amhurst, who ÔÔmust be treated as having dishonestly assisted the
schemeÕÕ, had done so ÔÔin his role as a solicitorÕÕ (i e in the ordinary course of
AmhurstsÕ business). In that role, he said, ÔÔhe had played (i e must be
assumed to have played) an important and substantial and not merely
peripheral or incidental role in the schemeÕÕ. Accordingly he held that, on
the assumed facts, Amhursts were vicariously liable for Mr AmhurstÕs
G wrongdoing and were in principle entitled to contribution from Mr Salaam
and Mr Al Tajir. He then proceeded to consider the principles on which the
contributions of the various parties should be assessed.
99 As the Court of Appeal observed, however, what Dubal alleged
Mr Amhurst did in his capacity as a partner in Amhursts represented only
part of the contribution which he made to the fraud: [2001] QB 113. As
against him personally, Dubal alleged that he acted not only as a solicitor but
H
also as a director of Mr SalaamÕs companies. Although receiving his
instructions from Mr Salaam, he gave direct advice and assistance to other
wrongdoers, speciÞcally Mr Livingstone and Richco, who were not clients of
his or his Þrm. Indeed, he was so closely involved with Mr Livingstone in the
negotiations that, in the judgeÕs words, he ÔÔappeared to be part of the Dubal
137
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Lord Millett
teamÕÕ. He told Richco that it was required to concur in the scheme if it was A
to do business in Dubai or with Dubal, and gave Richco to understand that it
was not expected to provide any services pursuant to the consultancy
agreement. He dealt only with other parties to the dishonest scheme and all
his work was done in the context of the scheme.
100 This persuaded the Court of Appeal to reverse the judgeÕs decision.
Evans LJ said [2001] QB 113, 133: ÔÔVicarious liability is not imposed unless B
all of the acts or omissions which make the servant personally liable as a
tortfeasor took place within the course of his employment.ÕÕ He claimed to
derive this proposition from the decision of this House in Credit Lyonnais
Bank Nederland NV v Export Credits Guarantee Department [2000] 1 AC
486. Since much of Mr AmhurstÕs conduct on which Dubal relied took place
outside the ordinary course of their business, he held that Amhursts were not
C
vicariously liable for his wrongdoing.
101 Aldous LJ based himself on the same proposition. He
acknowledged that advising on and drafting legal agreements fell squarely
within the ordinary course of business of a Þrm of solicitors, and that
Amhursts would have been liable if this had been the full extent of
Mr AmhurstÕs assumed participation in the scheme. But it was not. In the
Þrst place, much of Mr AmhurstÕs part in the scheme took place outside the D
course of AmhurstsÕ business. In the second place, the judge had found that
Mr Amhurst had ÔÔdishonestly assisted Mr Livingstone to act in breach of his
Þduciary duties by conceiving, planning and assisting in giving eect to the
schemeÕÕ, and Dubal had alleged that all the relevant agreements ÔÔwere sham
agreements and were known to Mr Amhurst to be soÕÕ. Aldous LJ [2001]
QB 113, 142, concluded with the proposition that: E
ÔÔIt is not and never has been part of the business of a Þrm of solicitors
to plan, draft and sign sham agreements giving eect to a scheme known
to be dishonest which he had helped to plan. Such actions could not have
been carried out in the ordinary course of the business carried on by
[Amhursts]ÕÕ.
F
102 The Court of Appeal accordingly held that Amhursts were not
liable to Dubal in respect of Mr AmhurstÕs participation in the scheme, and
were accordingly not entitled to contribution. They dismissed the
contribution proceedings without having to consider the basis upon which
the judge dealt with them.
(5) The scope of section 10 of the Partnership Act 1890 G
103 Like the judge and the Court of Appeal, I too reject the argument
that section 10 of the Partnership Act 1890 is conÞned to torts or other
common law wrongs. There is nothing to be said for such a limitation. The
section is in the widest terms. It applies whenever injury is caused to a non-
partner, or any penalty is incurred, ÔÔby any wrongful act or omission of any
partnerÕÕ. The section is concerned only with fault-based liability, but there H
is nothing in its wording to indicate that the liability must arise at common
law. On the contrary, the reference to penalties shows that the liability may
be statutory. As my noble and learned friend, Lord Nicholls of Birkenhead,
has observed, the liability of co-partners to penalties for breach of the
138
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Lord Millett
A revenue laws was well established by 1890 when the Partnership Act was
passed.
104 Moreover, the vicarious liability of partners for equitable
wrongdoing was certainly known to the Court of Chancery at least as early
as 1842: see Brydges v BranÞll (1842) 12 Sim 369. The facts of that case
bear a striking similarity to those of the present. The tenant for life of settled
land embarked on an elaborate fraud to lay his hands on capital moneys.
B
The scheme required a private Act of Parliament to be obtained to enable the
estate to be sold under the direction of the court and the proceeds paid into
court and invested in other land; a Þctitious sale of the tenant for lifeÕs own
lands to an associate of his; the application of the money in court in the
purchase of the land from the associate at an excessive price; and the
deliberate deception of the court to obtain an order under which part of
C the money in court was paid out to the tenant for life. He employed a Þrm of
solicitors to act for him in obtaining the Act and the orders of the court and
in every other proceeding under the Act. The partner who acted in the
transactions (one Brooks) was privy to all the circumstances of the
transactions, but neither of his partners was aware that there was any fraud
or irregularity in them. Despite holding that their moral characters were
unaected by the transactions, Sir Lancelot Shadwell V-C held them jointly
D
and severally liable with Brooks to make good the loss to the trust estate.
105 In that case Brooks dealt with the money by taking it out of court
and paying it over to the tenant for life, much as Mr Amhurst is alleged to
have acted in the present case, but this was not the ground on which the
innocent partners were held liable. In dealing with the money Brooks was
acting in a purely ministerial capacity under a power of attorney from the
E tenant for life, and he duly accounted to his principal. The money was not
received in any sense by the Þrm or by Brooks on its behalf; the power of
attorney was given to Brooks alone and not jointly with his partners, as in St
Aubyn v Smart (1868) LR 3 Ch App 646. He was guilty of dishonest
assistance, not of knowing or even dishonest receipt, and the only basis on
which his partners could have been liable was that they were vicariously
liable for his wrongdoing.
F
106 Vicarious liability of partners for tort seems to have entered English
law at much the same time. It was certainly established by the middle of the
19th century: see Ashworth v Stanwix (1861) 3 E & E 701, where the Court
of QueenÕs Bench treated it as settled law that innocent partners were
vicariously liable for the torts of their co-partner. At all events it was
considered to be su±ciently well established to be incorporated in the
G Partnership Act when this was enacted to codify the law of partnership.
Section 10 assimilated the vicarious liability of partners to that of employers
and adopted the same criterion: that the wrongful act or omission must have
been performed in the ordinary course of the business of the party sought to
be made vicariously liable. In Meekins v Henson [1964] 1 QB 472, 477
Winn J observed that section 10 of the Partnership Act 1890 produced ÔÔa
necessary equation of a partnership Þrm with employers for this purposeÕÕ.
H
The necessity of such an equation is self-evident: it would be absurd if a
professional Þrm were vicariously liable for the acts of an employee but
would not be liable if the same acts had been committed by a partner.
107 Vicarious liability is a loss distribution device based on grounds of
social and economic policy. Its rationale limits the employerÕs liability to
139
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Lord Millett
conduct occurring in the course of the employeeÕs employment. ÔÔThe master A

ought to be liable for all those torts which can fairly be regarded as
reasonably incidental risks to the type of business he carries onÕÕ: see Atiyah,
Vicarious Liability (1967), p 171; Lister v Hesley Hall Ltd [2002] 1 AC 215.
The American Law Institute, Restatement of the Law, Agency, 2d (1958),
section 229 is to the same eect: ÔÔthe ultimate question is whether or not it is
just that the loss resulting from the servantÕs acts should be considered as one
B
of the normal risks to be borne by the business in which the servant is
employed.ÕÕ Since this is the underlying rationale of the doctrine there is no
rational ground for restricting the liability to torts, or for excluding liability
in equity, particularly when equitable liability often has its counterpart at
common law. Why should a Þrm be vicariously liable if a partner procures
or induces a breach of contract but not if he procures or participates in a
breach of trust or Þduciary duty? If the risk of wrongdoing is one which can C
fairly be said to be reasonably incidental to the employerÕs business, why
should it matter that the liability arises in equity and not at common law or
by statute?
108 The vicarious liability of an employer for his employeesÕ torts,
however, was still in course of development in 1890, and the circumstances
in which he could be liable for his employeeÕs intentional and dishonest
D
wrongdoing was still problematic. It was not settled until the decision of
your LordshipÕs House in Lloyd v Grace Smith & Co [1912] AC 716: see in
particular p 732, where Lord Macnaghten traced the development of the
doctrine in relation to fraudulent and criminal wrongdoing. Wisely, and no
doubt deliberately, section 10 was drafted in the widest terms to embrace
every kind of wrong capable of causing damage to non-partners, so that
there was no danger that the vicarious liability of partners (unlike that of E
employers) might be ossiÞed by the terms of the statute and fail to keep step
with future developments.
109 Mr Salaam and Mr Al Tajir supported their submissions by an
elaborate analysis of the structure of the Partnership Act 1890, which they
said showed that section 10 is conÞned to common law wrongs. Section 9,
they said, is concerned with the liability of the Þrm for breach of contract,
F
section 10 with its liability in tort, and sections 11 and 13 with liability in
equity. Liability arising out of a breach of trust, they argued, is dealt with by
sections 11 and 13 and not section 10; liability as a constructive trustee is
dealt with by section 13, and the basic rule is non-liability. They went so far
as to submit that, if section 10 applies to liability in equity, then sections 11
and 13 are redundant.
110 In my opinion this analysis is faulty. Section 9 is not concerned G
with the liability of the Þrm at all but with the liability of the individual
partners. It provides that every partner in a Þrm is liable jointly with the
other partners for all debts and obligations of the Þrm incurred while he was
a partner. Section 12 makes every partner jointly and severally liable for loss
for which the Þrm was liable under sections 10 and 11 while he was a
partner in the Þrm. Where section 10 makes the Þrm vicariously liable for
H
loss caused by a partnerÕs wrongdoing, therefore, section 12 makes the
liability the joint and several liability of the individual partners. Sections 11
and 13 are not concerned with wrongdoing or with vicarious liability but
with the original liability of the Þrm to account for receipts. I explained the
dierence between the two sections in Bass Brewers Ltd v Appleby [1997]
140
397
Lord Millett
A 2 BCLC 700, 711. Section 11 deals with money which is properly received
by the Þrm in the ordinary course of its business and is afterwards
misappropriated by one of the partners. The Þrm is not vicariously liable for
the misappropriation; it is liable to account for the money it received, and
cannot plead the partnerÕs wrongdoing as an excuse for its failure to do so.
Section 13 deals with money which is misappropriated by a trustee who
happens to be a partner and who in breach of trust or Þduciary duty
B
afterwards pays it to his Þrm or otherwise improperly employs it in the
partnership business. The innocent partners are not vicariously liable for the
misappropriation, which will have occurred outside the ordinary course of
the ÞrmÕs business. But they are liable to restore the money if the
requirements of the general law of knowing receipt are satisÞed.
111 Thus the structure of the Partnership Act 1890 provides no support
C for argument advanced by Mr Salaam and Mr Al Tajir. The critical
distinction between section 10 on the one hand and sections 11 and 13 on
the other is not between liability at common law and liability in equity, but
between vicarious liability for wrongdoing and original liability for receipts.
The Þrm (section 10) and its innocent partners (section 112) are vicariously
liable for a partnerÕs conduct provided that three conditions are satisÞed:
(i) his conduct must be wrongful, that is to say it must give rise to fault-based
D
liability and not, for example, merely receipt-based liability in unjust
enrichment; (ii) it must cause damage to the claimant; and (iii) it must be
carried out in the ordinary course of the ÞrmÕs business. The Þrst two
conditions are plainly satisÞed in the present case, and I can turn to the third.
(6) In the ordinary course of the business of the Þrm

E A question of law or fact?
112 If the actions of the party primarily liable are legally capable of
being performed within the course of his employment or the ordinary course
of his ÞrmÕs business, the question whether they were so performed is a
question of fact, not of law. Such a question was formerly left to the jury. It
is not, of course, a question of primary fact, but a factual conclusion based
F on an assessment of the primary facts. This may involve questions of fact
and degree, and in borderline cases the decision may properly go either way.
Unless, however, the conclusion of the tribunal of fact is not legally capable
of being derived from the primary facts or is contradicted by them, then its
determination must be respected.
113 The question in the present case, therefore, is whether those
G
activities of Mr Amhurst which I have previously described and which form
the factual basis of DubalÕs claim against Amhursts, are legally capable of
being performed by a solicitor acting in the ordinary course of his ÞrmÕs
business.
The Court of AppealÕs approach

114 The main reason why Evans and Aldous LJJ reversed the Þnding of
H
the trial judge was that they considered that it was a condition of vicarious
liability that all the wrongful acts for which the partner was responsible
must have been committed by him in the course of his ÞrmÕs business. This
proposition cannot be derived from the Credit Lyonnais Bank case [2000]
1 AC 486, and is not the law. The claim in that case was in respect of the tort
141
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Lord Millett
of deceit. The di±culty was that the acts of the employee which were A
performed within the course of his employment were not in themselves
tortious, while the representation which was tortious was not made by the
employee in the course of his employment. Indeed, it was not made by an
employee of the defendants at all. The question was whether it is su±cient
to make the employer vicariously liable for the acts of his employee if his acts
do not amount to a tort but do so only when taken with other acts which
B
were not performed in the course of his employment. The House concluded
that, before there can be vicarious liability, all the features of the wrong
which are necessary to make the employee liable must have occurred in the
course of the employment: see per Lord Woolf MR, at p 495. The claim
failed because the employeeÕs conduct, taken by itself, was not su±cient to
constitute a tort. An essential element in the cause of action, viz the
representation, was not made by the employee in the course of his C
employment.
115 The present case is quite dierent. It was su±cient to make
Mr Amhurst personally liable for his dishonest participation in the scheme
that he drafted the agreements by which it was carried out in the knowledge
of the purpose to which they were to be put and that he caused his Þrm to
manage the corporate vehicles through which the proceeds of the fraud were
D
distributed. The factual basis of DubalÕs claim against Amhursts was that
these acts were performed by Mr Amhurst in the ordinary course of
AmhurstsÕ business. It does not follow from the fact that Mr Amhurst did
other things as well, some of which may not have been performed in the
ordinary course of AmhurstsÕ business, that Amhursts are not vicariously
liable for those acts which were.
116 In agreement with my noble and learned friend, Lord Nicholls, E
I would hold that, where the claim against the Þrm has been settled, its claim
to contribution must be determined solely by reference to the facts pleaded
against the Þrm itself. This is not a technical rule of pleading. It is because
the factual basis of the claim against the Þrm has not been established by
evidence but by force of the statutory assumption that the factual basis of the
claim could be established; and this can be found only in the case pleaded
F
against the Þrm. It cannot be found in the case pleaded against the partner
personally.
117 Mr Salaam and Mr Al Tajir complain that this is unfair. Had the
case proceeded to judgment, the character of Mr AmhurstÕs conduct would
have been evaluated by reference to all the evidence as it emerged at the trial;
and when his conduct was considered as a whole it might have become
apparent that he was not acting in the ordinary course of his ÞrmÕs business G
but was, in the time-honoured phrase, ÔÔengaged in a frolic of his ownÕÕ.
Why, they ask, should they be prejudiced by the fact that Amhursts chose to
settle the claim against them instead of defending it, perhaps successfully?
118 Of course, there is another side to this particular coin. If the case
had not been settled, Dubal could have relied on whatever evidence was
given at the trial to show that Mr Amhurst was acting in the ordinary course
H
of his ÞrmÕs business. This, Amhursts said, would have shown that
Mr Salaam was a client of the Þrm, that Mr Amhurst drafted the agreements
on his instructions, that the administrative acts which he carried out in
relation to the distribution of the money consisted of handling invoices
addressed to the Þrm and writing instructions on the ÞrmÕs headed
142
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Lord Millett
A notepaper, and that the Þrm charged fees for all these services. None of this
would have had to be pleaded.
119 But the short answer to the complaint that Mr Salaam and
Mr Al Tajir have been prejudiced by the settlement of the claim against
Amhursts, which they were powerless to prevent, is that there is nothing
unfair to them in assuming that Mr Amhurst was acting in the course of the
B
ÞrmÕs business. As I shall explain later, defendants who, if found liable, may
become involved in proceedings for contribution are not concerned with the
question whether a third party is or is not also vicariously liable to the
plainti. It is nothing to do with them and does not aect their position.
Dishonest conduct
120 There remains for consideration the observation of Aldous LJ
C
[2001] QB 113, 142 that ÔÔit is not and never has been part of the business of
a Þrm of solicitors to . . . draft sham agreements giving eect to a scheme
known to be dishonest which he had helped to planÕÕ. But it is equally not
and never has been part of the business of a Þrm of solicitors to assist in
obtaining an Act of Parliament and orders of the court in order to defraud
the beneÞciaries of a settled estate, yet Sir Lancelot Shadwell V-C in Brydges
D v BranÞll 12 Sim 369, regarded these acts as the acts of the Þrm itself. It is
not and never has been part of the business of a Þrm of solicitors to defraud
its client by obtaining her instructions to sell her property and inducing her
to execute conveyances in favour of one of its employees so that he could
pocket the proceeds. Yet the Þrm was held vicariously liable for the fraud of
its employee in these circumstances in Lloyd v Grace Smith & Co [1912]
E
AC 716. It is not and never has been part of the business of a residential
school to commit sexual assaults upon boys in its care. Yet in Lister v Hesley
Hall Ltd [2002] 1 AC 215 the owners of the school were held to be
vicariously liable for assaults carried out by its warden.
121 In that case I observed that it was no answer to a claim against the
employer to say that the employee was guilty of intentional wrongdoing, or
that his act was not merely tortious but criminal, or that he was acting
F exclusively for his own beneÞt, or that he was acting contrary to express
instructions, or that his conduct was the very negation of his employerÕs
duty. Vicarious liability for tortious and even criminal acts had been
established well before the end of the 19th century. Lloyd v Grace Smith &
Co [1912] AC 716, which Lord Steyn described as a breakthrough, Þnally
established that vicarious liability is not necessarily defeated if the employee
G acted for his own beneÞt. The consequence, he said, at p 224, was that ÔÔan
intense focus on the connection between the nature of the employment and
the tort of the employee became necessaryÕÕ.
122 The vicarious liability of an employer does not depend upon the
employeeÕs authority to do the particular act which constitutes the wrong. It
is su±cient if the employee is authorised to do acts of the kind in question:
see Navarro v Moregrand Ltd [1951] 2 TLR 674, 680, per Denning LJ. This
H
is equally true of partners, though it is perhaps less obvious in their case,
since the relation between partners is essentially one of agency. An employer
may authorise his employee to drive, but he does not authorise him to drive
negligently. A Þrm of solicitors may authorise a partner to draft agreements
for a client, but it does not authorise him to draft sham agreements. Lord
143
400
Lord Millett
Lindley wrote ÔÔit is obvious that it does not follow from the circumstance A
that such tort or fraud was not authorised, that therefore the principal is not
legally responsible for itÕÕ cited in Lindley & Banks on Partnership, 17th ed
(1995), pp 332Ð333.
123 In Lister v Hesley Hall Ltd [2002] 1 AC 215 several of your
Lordships observed that the traditional Salmond test for determining
whether an employeeÕs act was in the course of his employment is not
B
happily expressed when applied to the case of intentional or fraudulent
wrongdoing. Sexually assaulting a boy is not an improper mode of looking
after him. It is an independent act in itself, not an improper mode of doing
something else. To say that a solicitor drafted an agreement negligently is to
describe the way in which he drafted it; it is to accuse him of having done an
authorised act in a wrongful and unauthorised way. But to say that he
drafted an agreement dishonestly, or that he drafted a sham agreement, does C
not describe either the way in which he drafted it or the nature of the
document. Rather it describes the purpose for which he intended it to be
used.
124 But these dierences are immaterial. If regard is paid to the
closeness of the connection between the employeeÕs wrongdoing and the
class of acts which he was employed to perform, or to the underlying
D
rationale of vicarious liability, there is no relevant distinction to be made
between performing an act in an improper manner and performing it for an
improper purpose or by an improper means. In Hamlyn v John Houston &
Co [1903] 1 KB 81 a partner obtained conÞdential information of a
competitorÕs business by means of a bribe. Sir Richard Henn Collins MR
said that if it was within the scope of his authority to obtain the information
by legitimate means, then for the purpose of vicarious liability it was within E
the scope of his authority to obtain it by illegitimate means. In the Court of
Appeal Evans LJ distinguished this case on the ground that the corrupt
employee who received the bribe could have believed that the party who
oered it to him had his ÞrmÕs authority to do so. But it does not matter
what he thought. The action was not brought in respect of a reliance-based
tort, nor was it brought by the employee. It was brought by his employer
F
who did not rely on the partnerÕs authority and had no relevant dealings
with the defendant Þrm at all.
125 In that case the partner who was personally liable acted for the
beneÞt of the Þrm. It would not necessarily have made a dierence had he
acted for his own beneÞt; but taken with other circumstances it might
conceivably have done so. The question whether the employee was acting in
the course of his employment or was ÔÔengaged on a frolic of his ownÕÕ is not G
necessarily determined by the fact that he was merely doing work of a kind
he was employed to do. Even in such a case the employee may step outside
the limits of his employment. The road accident deviation cases are
examples of this.
126 Kooragang Investments Pty Ltd v Richardson & Wrench Ltd
[1982] AC 462 is another example. A valuer in the defendantsÕ employ gave
H
negligent valuations to former clients of theirs. He was doing work of a kind
which he was employed to do. But the defendants were not liable. The
valuer was moonlighting. He was acting, not as an employee of the
defendants, but as an employee or associate of the former clients to whom he
gave the valuations and on their instructions. He carried out the valuations
144
401
Lord Millett
A at the premises of the former clients and using their sta. The defendants
received no payment for the valuations and the director responsible knew
nothing of them. The only connection between the valuations and the
defendants was that the valuations were made on the defendantsÕ stationery.
As Lord Wilberforce said, at p 475: ÔÔA clearer case of departure from the
course or scope of [the valuerÕs] employment cannot be imagined: it was
total.ÕÕ
B
127 Unless the use by the valuer of the defendantsÕ stationery in that
case was enough to tip the scale, which it clearly was not, it merely
amounted to a false representation that he was giving the valuations on their
behalf. Since the representation was made by the valuer himself and not by
the defendants or with their authority, it did not render them liable for
holding him out as having their authority to act on their behalf.
C 128 Such a case serves as a reminder that even the Salmond test is only
thatÑa test. It is not a conclusive deÞnition of the circumstances in which
vicarious liability arises. Even if it is satisÞed, the facts, taken as a whole,
may nevertheless show that the employee was not acting in the course of his
employment. But the mere fact that he was acting dishonestly or for his own
beneÞt is seldom likely to be su±cient.
129 An employer has been held to be vicariously liable for the
D
intentional wrongdoing of his employee in a wide variety of dierent
circumstances. In some of the cases the employer has undertaken a duty
towards the plainti and then delegated the performance of that duty to his
employee: see Morris v C W Martin & Sons Ltd [1966] 1 QB 716; Photo
Production Ltd v Securicor Transport Ltd [1980] AC 827; Lister v Hesley
Hall Ltd [2002] 1 AC 215. The decisive factor in Lloyd v Grace Smith & Co
E [1912] AC 716 was that the employee who committed the fraud for his own
beneÞt was the person to whom his employer invited the client to entrust her
aairs. In all those cases the plainti was a client or customer of the
employer. But that is not essential. It was not the case in Hamlyn v John
Houston & Co [1903] 1 KB 81. The decisive feature in that case was that, in
paying the bribe, the partner was merely using an improper means of
obtaining information for his Þrm which it was his job to obtain. But the
F
circumstances in which an employer may be vicariously liable for his
employeeÕs intentional misconduct are not closed. All depends on the
closeness of the connection between the duties which, in broad terms, the
employee was engaged to perform and his wrongdoing.
130 In the present case the principal participants in the fraud needed a
solicitor to draw the agreements which were to be the instrument of carrying
G out their scheme. They instructed Mr Amhurst, a partner in Amhursts; and
he is to be assumed to have carried out his instructions ÔÔin his role as a
solicitor in the ÞrmÕÕ, that is to say he was not moonlighting but acting in the
course of the ÞrmÕs business. Drawing such agreements honestly and for a
proper purpose would plainly be in the ordinary course of the ÞrmÕs
business. By drawing them dishonestly for an improper purpose and for his
own beneÞt or the beneÞt of his confederates, the court might, on an overall
H
assessment of the evidence at trial, have concluded that Mr Amhurst had
su±ciently departed from the ordinary course of the ÞrmÕs business to defeat
DubalÕs claim against Amhursts. He would have been engaged ÔÔon a frolic
of his ownÕÕ and not ÔÔacting in his role as a partner in the ÞrmÕÕ. But such a
conclusion would not have been inevitable; deliberate and dishonest conduct
145
402
Lord Millett
committed by a partner for his own sole beneÞt is legally capable of being in A
the ordinary course of the business of his Þrm.
131 Accordingly, and subject only to the Court of AppealÕs decision in
Mara v Browne [1896] 1 Ch 199, with which I shall deal in the next section,
the conclusion that Mr Amhurst was acting in the ordinary course of the
ÞrmÕs business would have been legally open to the trial judge had the case
proceeded to trial. The case having settled, and this being the factual basis of B
the claim against Amhursts, the judge was entitled and bound to proceed on
the assumption that it would have been established.
Liability as a constructive trustee: Mara v Browne

132 Mr Salaam and Mr Al Tajir submitted that, as a matter of law, it is
no part of the business of a solicitor to constitute himself a constructive
C
trustee. For this proposition they cited Mara v Browne [1896] 1 Ch 199,
208, where Lord Herschell said that: ÔÔit is not within the scope of the
implied authority of a partner in . . . [a solicitorÕs] business that he should so
act as to make himself a constructive trustee, and thereby subject his partner
to the same liability.ÕÕ Rigby LJ spoke in similar terms, at p 214; and
A L Smith LJ, at p 212, though he used the more speciÞc expression ÔÔtrustee
de son tortÕÕ and not ÔÔconstructive trusteeÕÕ. D
133 These observations were obiter, since the Court of Appeal
dismissed the claim against the partner personally responsible, so that there
could be no question of vicarious liability. But they certainly represented the
general understanding at that time. Although implicit, the reasoning would
have been well understood in 1896. The courts distinguished between the
acts of a solicitor when acting as solicitor to the trustees and acts done by E
him as an express trustee. The former were within the scope of the ordinary
business of a solicitor; the latter were not: see In re Fryer (1857) 3 K & J 317.
If so, it was equally no part of such a business for him to constitute himself
ÔÔa constructive trusteeÕÕ in the sense in which the Court of Appeal were using
that term.
134 For my part, I do not think that these cases can be disposed of by
saying that the scope of a solicitorÕs practice has changed since 1896. No F
doubt it has, but not in the requisite direction. The 19th century was the
heyday of the family solicitor. Conveyancing and private client business
formed the bulk of his work. He could expect to be appointed an executor
and trustee of his clientsÕ wills and settlements. This is much less common
today. SolicitorsÕ work has become more commercial. Private client
business forms a far smaller part of their work than it did; many large Þrms G
undertake none at all. Trusteeship too has become more professional.
Clients no longer look to their trustees to be philosophers, guides and
friends. They expect them to be professional fund-managers and even,
sometimes, businessmen. It is part of a solicitorÕs business to advise whether
trust money may lawfully be invested in an overseas hedge fund or used to
pay a discretionary beneÞciaryÕs school fees. It is still not part of his business
H
to make the decision whether to do so or not. If it was not part of the
ordinary business of a solicitor to act as an express trustee in 1857, I do not
see how it can be part of it today.
135 But every statement in a judgment must be understood in the
context in which it is made, and this is particularly the case if it employs
146
403
Lord Millett
A expressions such as ÔÔconstructive trustÕÕ or ÔÔconstructive trusteeÕÕ, for they

have more than one meaning, and meanings have changed over time. Mara
v Browne [1896] 1 Ch 199 cannot be understood unless the sense in which
Lord Herschell and Rigby LJ were using the expression ÔÔconstructive
trusteeÕÕ is appreciated.
136 The case concerned a marriage settlement. The Þrst defendant,
B
whom I shall call HB, was a solicitor. He advised the persons who were
acting as trustees, though not yet formally appointed as such. He suggested
a series of investments for the trust funds. They were not proper investments
for trustees to make. The money was to be lent on building property of a
speculative character and the margin was unsatisfactory. The investments
were made and the money was lost. Lord Herschell considered that, if the
claimants had charged HB with negligence as a solicitor and brought the
C action in time, they might well have succeeded, in which case both HB and
his partner would have been liable. But any such action was barred by the
Statute of Limitations. Accordingly the claimants alleged that HB had
intermeddled with the trust and was liable as a trustee de son tort. They
alleged that he had laid out the trust moneys at a time when there were no
trustees, and therefore must be taken to have acted as a principal in the
D matter and not as a mere agent for the trustees. Such a claim was not statute-
barred. The judge agreed with this analysis and held that both HB and his
partner were liable.
137 The Court of Appeal took a dierent view of the facts. They held
that it was not correct to say that at the relevant dates there were no trustees.
But even if there had been none HB would not have been liable. He did not
intend or purport to act as a trustee, and no one supposed that he was so
E
acting. He purported to act throughout only as solicitor to the trustees and
was understood by all concerned to be acting as such.
138 This summary is su±cient to show what Lord Herschell and
Rigby LJ meant by ÔÔconstructive trusteeÕÕ. They meant ÔÔtrustee de son tortÕÕ;
that is to say, a person who, though not appointed to be a trustee,
nevertheless takes it upon himself to act as such and to discharge the duties
F of a trustee on behalf of others. In Taylor v Davies [1920] AC 636, 651,
Viscount Cave described such persons as follows:
ÔÔthough not originally trustees, [they] had taken upon themselves the
custody and administration of property on behalf of others; and though
sometimes referred to as constructive trustees, they were, in fact, actual
trustees, though not so named.ÕÕ
G
Substituting dog Latin for bastard French, we would do better today to
describe such persons as de facto trustees. In their relations with the
beneÞciaries they are treated in every respect as if they had been duly
appointed. They are true trustees and are fully subject to Þduciary
obligations. Their liability is strict; it does not depend on dishonesty. Like
express trustees they could not plead the Limitation Acts as a defence to a
H claim for breach of trust. Indeed, for the purposes of the relevant provision
(section 25(3) of the Supreme Court of Judicature Act 1873 (36 & 37 Vict
c 66)), which distinguished between property held on express trusts and
other trusts, they were treated by the courts as express trustees. That is why
the action in Mara v Browne was not statute-barred.
147
404
Lord Millett
139 In the same case, however, Viscount Cave identiÞed a very dierent A
kind of ÔÔconstructive trusteeÕÕ, at p 651:
ÔÔBut the position . . . of a constructive trustee in the usual sense of the
wordsÑthat is to say, of a person who, though he had taken possession in
his own right, was liable to be declared a trustee in a court of equityÑwas
widely dierent . . .ÕÕ
B
Taylor v Davies was not a case of fraud but it was followed and applied in
Clarkson v Davies [1923] AC 100, which was. In the latter case the Lord
Justice Clerk (Scott Dickson) explained, at p 110, that the distinction was
between a trust which arose before the occurrence of the transaction
impeached and a claim which arose only by reason of that transaction. In
the former case the defendant is treated as a trustee even though not
expressly appointed as such; in the latter case he is a stranger to the trust at C
the time of the transaction.
140 Referring to these cases in Paragon Finance plc v DB Thakerar &
Co [1999] 1 All ER 400, 408Ð409 in the Court of Appeal, I drew attention to
the fact, which was becoming increasingly overlooked, that the expressions
ÔÔconstructive trustÕÕ and ÔÔconstructive trusteeÕÕ were used by equity lawyers
to describe two entirely dierent situations. One was the situation which the
D
claimants unsuccessfully contended had arisen in Mara v Browne. The other
is the situation which arose in present case.
141 Unlike HB in Mara v Browne [1896] 1 Ch 199, Mr Amhurst did
not assume the position of a trustee on behalf of others. He never had title to
the trust funds or claimed the right to deal with them on behalf of those
properly entitled to them. He acted throughout on his own or his
confederatesÕ behalf. The claim against him is simply that he participated in E
a fraud. Equity gives relief against fraud by making any person su±ciently
implicated in the fraud accountable in equity. In such a case he is
traditionally (and I have suggested unfortunately) described as a
ÔÔconstructive trusteeÕÕ and is said to be ÔÔliable to account as a constructive
trusteeÕÕ. But he is not in fact a trustee at all, even though he may be liable to
account as if he were. He never claims to assume the position of trustee on
F
behalf of others, and he may be liable without ever receiving or handling the
trust property. If he receives the trust property at all he receives it adversely
to the claimant and by an unlawful transaction which is impugned by the
claimant. He is not a Þduciary or subject to Þduciary obligations; and he
could plead the Limitation Acts as a defence to the claim.
142 In this second class of case the expressions ÔÔconstructive trustÕÕ and
ÔÔconstructive trusteeÕÕ create a trap. As the court recently observed in G
Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707, 731 this ÔÔtype of
constructive trust is merely the creation by the court . . . to meet the
wrongdoing alleged: there is no real trust and usually no chance of a
proprietary remedyÕÕ. The expressions are ÔÔnothing more than a formula for
equitable reliefÕÕ: Selangor United Rubber Estates Ltd v Cradock (No 3)
[1968] 1 WLR 1555, 1582, per Ungoed-Thomas J. I think that we should
H
now discard the words ÔÔaccountable as constructive trusteeÕÕ in this context
and substitute the words ÔÔaccountable in equityÕÕ.
143 The distinction between the two kinds of constructive trustee is of
critical importance in the present context. If, as I think, it is still not within
the ordinary scope of a solicitorÕs practice to act as a trustee of an express
148
405
Lord Millett
A trust, it is obviously not within the scope of such a practice voluntarily to

assume the obligations of a trustee and so incur liability as a de facto trustee
or a constructive trustee of the Þrst kind. But given that a solicitor may be
guilty of deliberate and dishonest conduct while acting within the ordinary
scope of his practice, there is no conceivable reason why his Þrm should not
thereby incur vicarious liability for loss caused by the conduct which
constituted him a constructive trustee of the second kind. Unfortunately
B
Vinelott J applied Mara v Browne in In re BellÕs Indenture [1980] 1 WLR
1217, a case of dishonest assistance like the present, and held that the Þrm
was not vicariously liable. The decision is inconsistent with Brydges v
BranÞll 12 Sim 369. In my opinion it was wrongly decided and we should
overrule it.
C Conclusion
144 I would allow AmhurstsÕ appeal and uphold the judgeÕs conclusion
that Amhursts are entitled to claim a contribution towards the $10m they
paid in settlement of DubalÕs claim.
(7) Apportionment of liability

D The statutory provisions
145 So far as material section 2 of the 1978 Act provides as follows:
ÔÔ2. Assessment of contribution. (1) Subject to subsection (3) below, in
any proceedings for contribution under section 1 above the amount of the
contribution recoverable from any person shall be such as may be found
by the court to be just and equitable having regard to the extent of that
E
personÕs responsibility for the damage in question.
ÔÔ(2) Subject to subsection (3) below, the court shall have power in any
such proceedings to exempt any person from liability to make
contribution, or to direct that the contribution to be recovered from any
person shall amount to a complete indemnity.ÕÕ
F The judgeÕs approach

146 In considering the relative responsibility of the various parties to
the proceedings for contribution, the judge had regard to their respective
moral blameworthiness and ÔÔthe causative potencyÕÕ of their respective
actions.
147 The judge found that in terms of the promotion, organisation and
G operation of the scheme there was little to choose between the Þve principal
parties. He regarded Mr Livingstone, Mr Al Tajir and Mr Salaam as in eect
partners, each of whom brought something indispensable to the scheme.
Richco was not an originator, but was a necessary part of the scheme.
Mr Amhurst was not a principal, nor an originator, but in his own way he
was a necessary part of the setting up of the scheme and by his presence he
lent a colourable respectability to it. The judge said of Mr Amhurst that he
H
regarded his responsibility in the promotion, organisation and operation of
the scheme as being ÔÔa little less than that of the others, but not by muchÕÕ.
148 Taking these and other factors into account, including the partiesÕ
gross receipts, i e, the amounts originally obtained by the parties from the
scheme (see paragraph 83 above) and their subsequent conduct, the judge
149
406
Lord Millett
reached the interim conclusion that a fair allocation between the Þve A
principal parties would be:
Mr Salaam 36%
Mr Al Tajir 29%
Mr Livingstone 15%
Richco 10%
Mr Amhurst 10%
B
He then considered three further matters. First, not everyone was claiming
contribution or facing contribution claims. Secondly, there were the
settlements already made. And thirdly there were the partiesÕ net receipts,
i e their respective Þnancial positions taking into account the amount
retained by them after repaying the sums needed to settle the action. Taking
these factors into account he ordered that Mr Salaam and Mr Al Tajir should
give Amhursts a complete indemnity in respect of the $10m they had paid to C
settle the action.
149 In reaching this conclusion the judge was inßuenced by two
principal considerations. First, Amhursts (unlike Mr Amhurst) were
personally innocent of any wrongdoing. This was to be contrasted with the
dishonesty of Mr Salaam and Mr Al Tajir. The judge accepted that in terms
of causative potency those vicariously liable probably had to stand in the
D
shoes of the wrongdoer, but he said that it did not follow that they must
necessarily do so in terms of blameworthiness. That might be so in the case
of negligence, but dishonesty was dierent. It would, he said, be unjust if the
defendant who was vicariously liable for his employeeÕs fraud could not
have his personal innocence of dishonesty count in his favour. He was
answerable to the claimant for the fault of his employee, but he was entitled
to invoke his own innocence of dishonesty when making or resisting a claim E
for contribution. In the Court of Appeal Evans LJ disagreed.
150 The judge did not, however, regard AmhurstsÕ personal innocence
by itself as entitling them to a full indemnity, nor did he say what
contribution he would have ordered on this basis if it had stood alone. There
was no need for him to do so, because any conclusion in this regard would be
outweighed by the second matter which inßuenced him, viz, the partiesÕ net
F
receipts. The judge considered that it would not be ÔÔjust and equitableÕÕ (to
quote the words of the subsection) to require one party to contribute in a
way which would leave another party in possession of his spoils.
151 In round Þgures and with interest to the end of 1997, Mr Salaam
had received some $30m from the scheme and Mr Al Tajir $24.5m. The
judge assessed the contributions which they had each made under their
respective settlements on the same basis at approximately $17m. Amhursts G
had received nothing and contributed $10m. As at that date, therefore,
Mr Salaam could contribute a further $13m and Mr Al Tajir a further $7.5m
before either of them exhausted his net receipts. Since their undisgorged
receipts substantially exceeded the amount of AmhurstsÕ claim for
contribution, the judge allowed the claim in full.
152 The remaining question was how their liability to indemnify
H
Amhursts should be split between them. The judge thought that a fair
allocation would be that Mr Salaam should pay $7.5m and Mr Al Tajir
$2.5m. This would still leave Mr Salaam with $5.5m of his receipts inclusive
of interest and Mr Al Tajir with $5m. In order to protect Amhursts against
the risk of either Mr Salaam or Mr Al Tajir becoming insolvent while the
150
407
Lord Millett
A other was still in possession of undisgorged receipts, the judge ordered that
Mr Salaam and Mr Al Tajir should be jointly and severally liable to the
extent of $5m and that Mr Salaam should alone be liable for the balance.
Apportionment of responsibility and vicarious liability

153 Section 2(1) of the 1978 Act requires the court to have regard to the
B partiesÕ responsibility for the damage. Amhursts submit that the judgeÕs
conclusion that they should receive a full indemnity from Mr Salaam and
Mr Al Tajir sits comfortably with this requirement. On the assumed facts,
Amhursts are liable for the damage but they were not responsible for it.
They are answerable for Mr AmhurstÕs wrongdoing, not their own. Yet the
judge would not have awarded Amhursts a full indemnity on this basis; were
it not for the fact that Mr Salaam and Mr Al Tajir had undisgorged receipts
C
from the fraud, he would have left Amhursts to bear some reduced but
unidentiÞed part of the liability.
154 Something seems to have gone wrong. In my opinion, it was the
judgeÕs whole approach to the nature of AmhurstsÕ liability. He recognised
that vicarious liability does not depend upon fault, and took account of
AmhurstsÕ innocence of wrongdoing accordingly. But the feature of
D vicarious liability which is relevant to the apportionment of liability is not
that the party concerned is liable without personal fault but that he is
answerable for the fault of another.
155 The judge treated Amhursts as independently liable to Dubal, as if
they had personally committed a legal wrong, albeit innocently. But that is
not the nature of vicarious liability. It is, as I have said, a loss allocation
E
device. The employer is not a wrongdoer; he is not liable in respect of his
own conduct. He is answerable for his employeeÕs wrongdoing, and his
liability is coextensive with that of his employee. He is personally innocent,
but he is liable because his employee is guilty.
156 It follows that in any contribution proceedings he must be treated
as standing in his employeeÕs shoes; the amount of his contribution should
reßect his employeeÕs share of responsibility for the damage, not his own.
F This can best be demonstrated by considering a commonplace situation
without the complicating features of dishonesty and undisgorged receipts.
Let it be supposed that proceedings are brought for negligence against two
defendants, A and B. Judgment for damages is entered against both. They
are jointly and severally liable. The claimant recovers damages from
A alone, and A brings contribution proceedings against B. If the court Þnds
G that A and B were equally to blame, then other things being equal it will
order B to contribute 50% of the sum which A has paid. This achieves the
object of the 1978 Act, which is to avoid the injustice which would arise if
the liability to meet the judgment depended on the whim of the claimant. He
would consider only his own interests, and would proceed to enforce the
judgment against whichever defendant had the deepest pocket or the most
easily realisable assets. This is fair to the claimant but not to the defendants.
H
Justice requires that the ultimate incidence of meeting the claim should be
adjusted so that it is borne by defendants in whatever proportions are just
and equitable as between them.
157 But suppose that B had been an employee acting in the course of his
employment. A, having met the judgment in full, can bring contribution
151
408
Lord Millett
proceedings against both B and his employer. They are both parties ÔÔliable A
in respect of the same damageÕÕ. But it would make no sense if the
availability of another source of contribution had the result of increasing the
amount of the contribution which A obtained. It does nothing to reduce his
share of responsibility for what happened. He was 50% to blame, and
should bear 50% of the cost of meeting the judgment. This has nothing to do
with the fact that BÕs employer is relatively blameless when compared with B
A. It is because BÕs liability is vicarious. He is answerable for BÕs
wrongdoing, and any payment by him discharges BÕs liability pro tanto. It
follows that B and his employer between them should bear 50% of the cost of
meeting the judgment, and A should continue to bear his own 50% whether
he recovers a contribution from B or his employer or both.
158 Now suppose that A had also been an employee acting in the course
C
of his employment, and that his employer has met the judgment in full and
been indemniÞed by A. A now claims contribution from B and his employer.
The position is the same. AÕs employer has dropped out of the picture. A is
entitled to 50% contribution, whether he recovers it from B or his employer.
It does not matter that A bore his share of the cost of meeting the judgment
by indemnifying his employer instead of discharging it directly.
159 But why should it matter whether AÕs employer has obtained an D
indemnity from A? If he has not, then he will be the party claiming
contribution. But this should not aect the amount of the contribution
which he obtains. Both employers suered judgment because they were
answerable for their employeeÕs negligence, and both employees are liable to
indemnify their employers whether their employers choose to enforce the
liability or not. As between A and his employer on the one hand and B and E
his employer on the other, the cost of meeting the judgment should be shared
equally.
160 These considerations show that the correct approach is to consider
the relative responsibility of the parties personally liable and apportion
liability between them accordingly, whether contribution is ordered in
favour of or against the employee or his employer or both. As between F
themselves, the employer and his employee are, of course, independent
actors with rights and obligations inter se; but as between them and the other
parties ÔÔliable for the same damageÕÕ, they are to be identiÞed with each
other. This would certainly accord with commercial reality especially when,
as is often likely to be the case, the contribution proceedings are brought for
the beneÞt of insurers.
G
161 This is why I said earlier that defendants to an action who, if found
liable, may Þnd themselves bringing or resisting proceedings for
contribution are not concerned with the question whether another party is
or is not also vicariously liable for the same damage. The question may
aect the identity of the party who brings or defends the claim for
contribution but it should not aect the amount of the contribution which is
ordered. Its relevance in the present case is due to the way in which H
Amhursts structured their settlement and the contribution proceedings. Had
the settlement been dierently expressed, and had Mr Amhurst been joined
as an alternative claimant for contribution, Mr Salaam and Mr Al Tajir
would not have been able to marshall the arguments they have advanced.
152
409
Lord Millett
A Taking account of net receipts

162 Mr Salaam and Mr Al Tajir argued that the judge was wrong to
take their undisgorged receipts into account. They said that these had
nothing to do with their responsibility for the damage suered by Dubal,
which was the only matter to which section 2(1) directs the court to have
regard.
B 163 I cannot accept that submission. In a case like the present, the
defendantsÕ gains match the plaintiÕs loss. The more a defendant has taken,
the more the plainti has lost, and the greater is the degree of the defendantÕs
responsibility for the loss. His gross receipts are directly relevant to the
degree of his responsibility. But it would obviously be unfair not to give him
credit for what he has repaid; it would also be wrong, for the amount repaid
goes to reduce the plaintiÕs loss and correspondingly to reduce the
C
defendantÕs responsibility.
164 But in any case the statutory jurisdiction is to order contribution in
an amount which the court Þnds is ÔÔjust and equitableÕÕ. I do not read the
words which follow as limiting words. Where the wrongdoing has produced
not only a loss to the plainti but a proÞt to the defendants, it is obviously
just and equitable to direct that any contributions required to allocate the
D cost of meeting the claim fairly among those responsible should be paid Þrst
out of their retained proÞts. It is increasingly recognised today that the ends
of justice sometimes go beyond compensating a plainti for his loss and may
extend to stripping a defendant of his proÞts.
Other matters
E 165 This is su±cient to dispose of the cross-appeals, since if Amhursts
are entitled to a contribution from Mr Salaam and Mr Al Tajir then neither
of them can be entitled to claim contribution whether from Amhursts or
from Mr Amhurst. However, two matters were canvassed in the course of
argument with which I should deal brießy.
166 Amhursts argued that Mr Al TajirÕs claim did not fall within the
scope of the 1978 Act at all. It was not a contribution to DubalÕs loss, but to
F his own contribution to the loss suered by Amhursts. There could, it was
said, be no contribution in respect of a contribution. I cannot accept this
argument. AmhurstsÕ payment of $10m was made in respect of the damage
suered by Dubal, and it follows that any payment which Mr Al Tajir may
be ordered to pay to Amhursts is an indirect contribution in respect of the
same damage.
G 167 Finally it was submitted by Mr Al Tajir (though not by Mr Salaam)
that there was no proper basis for the joint and several order which the judge
made. I cannot accept this submission either. His order was designed to
ensure that Mr Salaam and Mr Al Tajir should each bear the risk of the
otherÕs insolvency, but only to the extent of their own undisgorged receipts.
I can see nothing unfair in that. Nor do I see it wrong in principle.
A defendant who is insolvent or who has no money simply passes out of the
H
picture. The plainti may well not proceed against him at all; but whether
he does or not the whole of the liability of meeting the judgment falls to be
apportioned between the other defendants, as otherwise the deÞciency
arising from the insolvency is borne by whichever defendant happens to
satisfy the judgment, a result which it is the purpose of the 1978 Act to
153
410
Lord Millett
avoid: see Fisher v CHT Ltd (No 2) [1966] 2 QB 475. If the impact of a A
known insolvency can be taken into account in the assessment of
contributions, it is di±cult to see why the prospect of a possible future
insolvency should not be reßected in the order; and there is academic
authority for the proposition that it may be: see Glanville Williams, Joint
Torts and Contributory Negligence (1951), pp 170Ð172. The author
formulated a complex form of order for this purpose. The trial judge in the
B
present case found a simpler and more elegant way to achieve the same
result.
Conclusion in respect of contributions

168 The judge fell into error in the way in which he approached the
nature of AmhurstsÕ liability and their innocence of wrongdoing. But
(although the judgeÕs language is not entirely clear), I do not think that his C
error contributed to the result, which was ultimately based on the partiesÕ
net receipts. If he had adopted the correct approach the outcome logically
would have been the same. In these circumstances I do not think that we are
obliged to set his decision aside and re-examine the question for ourselves.
If, however, we must re-examine the matter for ourselves, then I too would
uphold the judgeÕs conclusion. D
(8) Disposal of the case

169 I would allow AmhurstsÕ appeal, set aside the order of the Court of
Appeal, and restore the order of the trial judge. I would dismiss the cross-
appeals.
Appeal allowed with costs. E

Cross-appeals dismissed with costs.
Solicitors: Barlow Lyde & Gilbert; Pinsent Curtis Biddle; Reid Minty;
CMS Cameron McKenna.
SH
F
154
The Law Reports
A
Appeal Cases
Volume 2
B
Supreme Court
C
Various Claimants v Catholic Child Welfare Society and others
[2012] UKSC 56
2012 July 23, 24; Baroness Hale of Richmond, Lord Kerr of
Nov 21 Tonaghmore, Lord Wilson, Lord Carnwath JJSC,
D Lord Phillips of Worth Matravers
Vicarious liability Relationship akin to employment Religious teaching order

Brother members of order taking vows of chastity, poverty and obedience and
living communal life School management board employing brothers as
teachers at residential school Brothers living communally on school premises
Physical and sexual abuse of boys by brothers alleged to have taken place
School management board vicariously liable as employer Whether
E
relationship between brothers and order akin to employment Whether close
connection between relationship between brothers and order and employment of
brothers as teachers at school Whether order jointly vicariously liable for
abuse
The institute was a lay Roman Catholic order. Its mission was to provide a
Christian education to children. Its members took vows of chastity, poverty and
F obedience and lived a communal life together as brothers, following a strict code of
conduct and obeying the orders of their superiors. They renounced any salaries
payable for their teaching work which were instead paid to a charitable trust for the
benet of the institute, which was itself an unincorporated association. In return the
institute met all the brothers material needs. The diocesan bodies responsible under
statute for managing a Roman Catholic boys residential school left it to the institute
to nominate a brother to act as headmaster and appoint other brothers to teach there.
G The brother teachers lived communally within the school grounds. In the 1990s
evidence emerged of serious sexual and physical abuse of boys by brother teachers
spanning more than three decades. Almost 200 former pupils brought claims for
damages against various representatives of the diocese and the institute. On a
preliminary issue the judge determined that the defendants with vicarious liability for
any abuse which could be established were the two diocesan bodies which had been
responsible under statute for management of the school during the relevant period
H and had employed the brother teachers. The Court of Appeal upheld his decision.
The diocesan bodies appealed on the grounds that the institute should share joint
vicarious liability for the acts of its brother members.
On the appeal
Held, (1) that where two defendants were potentially vicariously liable for the act
of a tortfeasor it was necessary to give independent consideration to the relationship
155
2
Various Claimants v Catholic Child Welfare Society (SC(E))
(SC(E)) [2013] 2 AC
of the tortfeasor with each defendant in order to decide whether that defendant was A
vicariously liable; and that the test for liability was not whether both defendants had
exercised control over the tortfeasor but whether the tortfeasor had been so much a
part of the work, business or organisation of both defendants that it was fair to make
both answer for his acts (post, paras 43, 45).
Dicta of Rix LJ in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd
[2006] QB 510, para 79, CA approved.
Mersey Docks and Harbour Board v Coggins & Gri–th (Liverpool) Ltd [1947] B
AC 1, HL(E) distinguished.
(2) That in the context of vicarious liability the relationship between the teaching
brothers and the institute had many of the elements, and all the essential elements, of
the relationship between employer and employees; that in so far as the relationship
di›ered from normal employment those di›erences rendered the relationship closer
than that of an employer and its employees in that the business and mission of the
institute was the common business and mission of every brother who was a member C
of it; and that, consequently, the relationship between the brothers and the institute
was one which was capable of giving rise to vicarious liability (post, paras 56—61,
88—90).
(3) That vicarious liability for child sexual abuse was imposed where a defendant,
whose relationship with the abuser put it in a position to use the abuser to carry on its
business or to further its own interests, had done so in a manner which created or
signicantly enhanced the risk that the victims would su›er the relevant abuse; that D
the question was whether the essential closeness of connection between the
relationship between the defendant and the tortfeasor and the acts of abuse involved
a strong causative link; and that creation of risk, although not enough of itself to give
rise to vicarious liability for abuse, was always likely to be an important element in
the facts which gave rise to such liability (post, paras 86—87).
(4) Allowing the appeal, that the relationship between the institute and the
brothers had enabled the institute to place the brothers in teaching positions and, in E
particular, in the position of headmaster, who was the person largely responsible for
the running of the school; that there was thus a very close connection between the
relationship between the brothers and the institute and the employment of the
brothers as teachers in the school; that the placement of brother teachers in a
residential school for vulnerable boys who were virtually prisoners, in the precincts
of which the brothers also resided, greatly enhanced the risk of abuse by them if they
had a propensity for such misconduct; and that, accordingly, it was fair, just and F
reasonable for the institute to share with the diocesan bodies vicarious liability for
the abuse committed by the brothers (post, paras 88, 91—94).
Decision of the Court of Appeal [2010] EWCA Civ 1106 reversed.
The following cases are referred to in the judgment of Lord Phillips of Worth
Matravers:
Bazley v Curry (1999) 174 DLR (4th) 45 G
Bernard v Attorney General of Jamaica [2004] UKPC 47; [2005] IRLR 398, PC
Bi›a Waste Services Ltd v Maschinenfabrik Ernst Hese GmbH [2008] EWCA Civ
1257; [2009] QB 725; [2009] 3 WLR 324; [2009] Bus LR 696, CA
Blackwater v Plint 2005 SCC 58; [2005] 3 SCR 3; 258 DLR (4th) 275
Brinks Global Services Inc v Igrox Ltd [2010] EWCA Civ 1207; [2011] IRLR 343,
CA
Brown v Robinson [2004] UKPC 56, PC H
Doe (John) v Bennett 2004 SCC 17; [2004] 1 SCR 436
Donovan v Laing Wharton & Down Construction Syndicate Ltd [1893] 1 QB 629,
CA
Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366; [2002]
3 WLR 1913; [2003] 1 All ER 97, HL(E)
156
3
[2013] 2 AC Various Claimants v Catholic Child Welfare Society (SC(E))
(SC(E))
A E v English Province of Our Lady of Charity [2011] EWHC 2871 (QB); [2013] QB
722; [2012] 2 WLR 709; [2012] PTSR 633; [2012] 1 All ER 723; [2012] EWCA
Civ 938; [2013] QB 722; [2013] 2 WLR 958; [2013] PTSR 565; [2012] 4 All ER
1152, CA
Hawley v Luminar Leisure Ltd [2006] EWCA Civ 18; [2006] Lloyds Rep IR 307;
[2006] PIQR P211, CA
Heatons Transport (St Helens) Ltd v Transport and General Workers Union
B [1973] AC 15; [1972] 3 WLR 431; [1972] ICR 308; [1972] 3 All ER 101,
HL(E)
Jacobi v Gri–ths (1999) 174 DLR (4th) 71
[2001] ICR 665; [2001] 2 All ER 769, HL(E)
McE v De La Salle Brothers [2007] CSIH 27; 2007 SC 556, Ct of Sess
Maga v Archbishop of Birmingham [2010] EWCA Civ 256; [2010] 1 WLR 1441;
C [2010] PTSR 1618, CA
Majrowski v Guys and St Thomass NHS Trust [2006] UKHL 34; [2007] 1 AC 224;
[2006] 3 WLR 125; [2006] ICR 1199; [2006] 4 All ER 395, HL(E)
Mersey Docks and Harbour Board v Coggins & Gri–th (Liverpool) Ltd [1947] AC
1; [1946] 2 All ER 345, HL(E)
Morris v CW Martin & Sons Ltd [1966] 1 QB 716; [1965] 3 WLR 276; [1965] 2 All
ER 725, CA
D New South Wales v Lepore [2003] HCA 4; 212 CLR 511
Thomas v National Union of Mineworkers (South Wales Area) [1986] Ch 20; [1985]
2 WLR 1081; [1985] ICR 886; [1985] 2 All ER 1
Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ
1151; [2006] QB 510; [2006] 2 WLR 428; [2006] ICR 327; [2005] 4 All ER
1181, CA
E The following additional cases were cited in argument:

Launchbury v Morgans [1973] AC 127; [1972] 2 WLR 1217; [1972] 2 All ER 606,
HL(E)
N v Chief Constable of Merseyside Police [2006] EWHC 3041 (QB); [2006] Po LR
160
APPEAL from the Court of Appeal

F
Some 170 claimants issued proceedings against 34 di›erent defendants
alleging that they had been sexually and/or physically abused at a boarding
school, St Williams, Market Weighton, Yorkshire, on various occasions
between 1958 and 1992. The actions were all combined under a group
litigation order made on 5 September 2006. With the exception of the
former headmaster of the school, James Carragher, who had been convicted
G on numerous counts of sexual abuse and sentenced to a term of
imprisonment, none of the defendants was alleged to have personally
committed any acts of abuse. They all fell into one of two categories. Those
in the rst category were all connected with the Roman Catholic Diocese of
Middlesbrough and had been responsible at certain times for the
management of the school (the Middlesbrough defendants). Those in
the second category were representatives of a lay Catholic teaching order,
H
the Institute of the Brothers of the Christian Schools (De La Salle) (the
institute) which at all material times had a community of brothers living at
St Williams, many of whom worked as teachers at the school. Most of
the alleged abusers, including James Carragher, had been members of the
institute.
157
4
(SC(E)) [2013] 2 AC
Argument
On the trial of preliminary issues Judge Hawkesworth QC, sitting as a A

judge of the Queens Bench Division at Dewsbury District Registry, in a
judgment handed down on 3 November 2009, determined, inter alia, that
only two of the Middlesbrough defendants, the Catholic Child Welfare
Society (Diocese of Middlesbrough) and the Middlesbrough Diocesan
Rescue Society, as the organisations responsible for managing the school,
were liable to the defendants for the alleged abuse at the school.
The claimants and the two societies appealed. On 26 October 2010, the B
Court of Appeal (Pill, Hughes and Tomlinson LJJ) [2010] EWCA Civ 1106
dismissed the appeals.
On 9 February 2011 the Supreme Court (Baroness Hale of Richmond,
Lord Kerr of Tonaghmore and Lord Dyson JJSC) granted the two societies
permission to appeal, pursuant to which they appealed. The sole issue on the
appeal was whether the institute was responsible in law for the alleged acts C
of sexual and physical abuse of children at St Williams committed by its
members.
The facts are stated in the judgment of Lord Phillips of Worth Matravers.
George Leggatt QC and Nicholas Fewtrell (instructed by Hill

Dickinson LLP, Liverpool) for the two societies.
In deciding whether the institute is vicariously responsible for the D
wrongful acts of its members there are two stages to the inquiry. The rst is
to determine whether the relationship between the abusers and other
members of the institute was one which is capable of giving rise to vicarious
liability. If the answer is yes, the second stage is to determine whether there
was a su–cient connection between the acts alleged and that relationship to
give rise to vicarious liability.
E
Vicarious liability has never been limited to relationships governed by
contracts of employment. It can arise in relationships not governed by a
contract at all. It is no longer appropriate in seeking to resolve the issue to
see if the relationship comes within a list of categories. What are required
are principled criteria which can apply to any situation: see Heatons
Transport (St Helens) Ltd v Transport and General Workers Union [1973]
AC 15; Launchbury v Morgans [1973] AC 127; Kahn-Freund Servants and F
Independent Contractors (1951) 14 MLR 504. The appropriate test to be
applied in the present case is one of the two tests applied in Viasystems
(Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] QB 510: either
the control test applied by May LJ (see also Hawley v Luminar Leisure Ltd
[2006] Lloyds Rep IR 307) or the integration test applied by Rix LJ. The
control test, in its modern form, looks at who had the de facto ability to
prevent the tort. The integration test says that the more integrated into an G
organisation an individual is the fairer it is that the organisation should
bear the risk of his wrongdoing. If the tortfeasor was furthering the
interests of the organisation then the organisation should be vicariously
liable. Both of those tests found favour in E v English Province of Our
Lady of Charity [2013] QB 722 and on both tests the position of the
brother members pass the test for vicarious liability on the part of the
H
institute.
The points which should be noted about the institute are that: its purpose
is to give a Christian education to children, especially the poor; it demands
total obedience to superiors and regulates every aspect of the brothers lives;
it is organised in a way which is designed to promote its distinct group
158
5
(SC(E))
Argument
A identity and its separateness from the rest of the world; the relationship
between the brothers is a communal one in which they share everything.
There is a quite exceptional level of control exercised by the institute over
its members. The whole of a brothers life is under the control of his
superiors. The institute decides who serves where. The closest secular
comparator would be the Army. There can be few situations where a
person could be more integrated into an institution than the brothers are to
B
the institute.
The courts below gave too much attention to the statutory structure for
control of the school and the powers of the school managers under that
structure. The structure of the institute provided just as much, if not more,
control over its members than the school managers did. The fact that the
brothers had a contract with the managers does not displace the parallel
C control exerted by the institute over their lives. They were at the school to
further the mission of the institute and doing its work of giving a Christian
education to poor children. They did not cease to be doing its work because
they had a contract of employment with the managers. On each of the tests
to be applied the relationship between the institute and its members is
su–cient to establish vicarious liability in conjunction with the managers. It
would be unjust to throw the whole liability on to the managers.
D If the institute can in principle be held liable there is a su–cient
connection between the torts and the work the brothers were authorised to
do by the institute. The appropriate test is the one applied in Lister v Hesley
Hall Ltd [2002] 1 AC 215. The Court of Appeal erred in its interpretation of
that case by giving too much weight to the reasoning of Lord Hobhouse of
Woodborough, which is inconsistent with principle because, in focusing on
E the relationship between the defendant and the claimant, it confuses
vicarious and personal liability. Furthermore, none of the other members of
the Appellate Committee endorsed the approach favoured by Lord
Hobhouse and, a year later, in Dubai Aluminium Co Ltd v Salaam [2003]
2 AC 366, the House of Lords unequivocally rejected that approach.
The facts disclose strong connections between what the institute required
and empowered the brothers sent to the school to do and their wrongful acts.
F Those connections are considerably closer than the connections which
justied the imposition of vicarious liability in Maga v Archbishop of
Birmingham [2010] 1 WLR 1441. They are su–cient to make it fair and just
to hold the institute vicariously responsible in law for such acts of abuse by
the brothers as may be proved.
Lord Faulks QC and Alastair Hammerton (instructed by Wedlake
G Bell LLP) for the institute.
Until Lister v Hesley Hall Ltd [2002] 1 AC 215 there would have been no
vicarious liability on the part of an employer for abuse by an employee. That
decision now establishes that there will be vicarious liability even for
deliberate criminal acts provided there is a su–ciently close connection
between the nature of the employment and the abuse (the close connection
test). However, the House of Lords did not speak entirely with one voice in
H
the Lister case. It contains no single close connection test and later
courts appear to have applied Lord Steyns formulation, at para 28, as
restated by Lord Nicholls of Birkenhead in Dubai Aluminium Co Ltd v
Salaam [2003] 2 AC 366, para 23. Vicarious liability still requires some
form of control over the activities of the torfeasor. The societies case would
159
6
(SC(E)) [2013] 2 AC
Argument
involve a considerable advance in the law from that position. It is not A

accepted that Lord Hobhouse of Woodboroughs approach in Lister v
Hesley Hall Ltd [2002] 1 AC 215 has been overtaken by subsequent events.
It is accepted that vicarious liability is not conned to employment
relationships and can exist in other types of relationships, such as
unincorporated associations. Nevertheless, as the Court of Appeal
recognised in the present case, there is a qualitative di›erence in the
B
relationship between members of an unincorporated association and an
employers relationship with its employee. The former does not
automatically give rise to vicarious liability otherwise the employment
relationship would lose its signicance.
A central feature of the societies appeal is their reliance upon the Court of
Appeals reasoning in Maga v Archbishop of Birmingham [2010] 1 WLR
1441, which apparently modied the Lister close connection test and C
introduced in e›ect a status-based material increase in risk approach. It is
important to emphasise that employment was not an issue as it had been
conceded for the purposes of that case only. In so far as the Maga case
elevates risk from merely being one factor to consider in the Lister close
connection test to being an alternative, it represents an extension of the law.
If the Maga approach were to be applied to other areas of employment, it
D
would raise the possibility of an extension of employers liability. So, for
example, o›-duty police o–cers, who retain their status and their statutory
powers, would necessarily x their chief constables with liability: see N v
Chief Constable of Merseyside Police [2006] Po LR 160. The Maga case is
thus inconsistent with the approach of earlier authority.
The concept of risk in the present context is di–cult. A factor lying
behind much of the societies case is that the very fact of sending a brother to E
the school in some way increases the risk of abuse. However, as the Lister
case [2002] 1 AC 215 indicates, opportunity is not enough. The idea of
increasing the risk of abuse becomes meaningless if it is being asserted that
the mere fact of sending a brother to the school, or indeed any teacher or
social worker, increased the risk of abuse. The concept of increasing the risk
may be appropriate when considering a breach of duty in negligence, in that,
F
if an employer fails to check whether an employee has, say a history of
sexual abuse, it can be said that by employing him he thereby increases the
risk of abuse and is thereby at fault. However, the doctrine of vicarious
liability is based on the absence of fault and it is inappropriate to introduce
risk in the way suggested by the societies. Increasing the risk is a concept
more appropriate to causation in clinical negligence personal injury cases
where proving causation may be di–cult, because of scientic uncertainty. G
The approach of the Canadian Supreme Court in John Doe v Bennett
[2004] 1 SCR 436 might not appear to support the institutes case but it has
not found favour elsewhere: see New South Wales v Lepore (2003) 212 CLR
511. Consequently, in the present case the argument does not even get to the
second stage of the test for vicarious liability. There is not the relevant
relationship to give rise to liability.
H
The law does not generally recognise the possibility of more than one
person being vicariously liable: see Mersey Docks and Harbour Board v
Coggins & Gri–th (Liverpool) Ltd [1947] AC 1. However where two
potential defendants are exercising close control as in Viasystems (Tyneside)
Ltd v Thermal Transfer (Northern) Ltd [2006] QB 510 as to how work
160
7
(SC(E))
Argument
A should be done or not done, dual vicarious liability might be legally possible
although unusual. The law has for the most part leant against the conclusion
that there can be two employers. Whilst it is now considered theoretically
possible for there to be two employers, that will be the exception: see
Hawley v Luminar Leisure Ltd [2006] Lloyds Rep IR 307. Indeed the
concept of joint vicarious liability was recently narrowed: see Bi›a Waste
Services Ltd v Maschinenfabrik Ernst Hese GmbH [2009] QB 725. The sort
B of facts where it is appropriate are a long way from the facts of the present
case.
Leggatt QC in reply.
Control is not essential to vicarious liability. There is also the alternative
purpose or agency test. The crucial issue is who if anyone could have
prevented the tortious behaviour. Mersey Docks and Harbour Board v
C Coggins & Gri–th (Liverpool) Ltd [1947] AC 1; Bi›a Waste Services Ltd v
Maschinenfabrik Ernst Hese GmbH [2009] QB 725 and N v Chief
Constable of Merseyside Police [2006] Po LR 160 can be distinguished. The
important factor in the present case is the relationship between the brothers
and the institute. When considering the reasoning in Maga v Archbishop of
Birmingham [2010] 1 WLR 1441 it is helpful to look at Bazley v Curry
D
(1999) 174 DLR (4th) 45 and the other considerations relied upon by Lord
Neuberger of Abbotsbury MR.
Patricia Leonard (instructed by Jordans Solicitors, Wakeeld) with a
watching brief for the claimants.
The court took time for consideration.
E 21 November 2012. LORD PHILLIPS OF WORTH MATRAVERS
(with whom BARONESS HALE OF RICHMOND, LORD KERR OF
TONAGHMORE, LORD WILSON and LORD CARNWATH JJSC agreed)
handed down the following judgment.
Introduction
F 1 In 1680, in the city of Rheims, Jean-Baptiste De La Salle founded an
institute known as the Brothers of the Christian Schools (the institute).
The members of the institute are lay brothers of the Catholic Church. They
are now to be found in many countries, including the United Kingdom.
Their rules, approved by Papal Bull in 1724, provided that they should
make it their chief care to teach children, especially poor children, those
things which pertain to a good and Christian life. That has remained the
G mission of the institute and the mission and apostolate of each brother.
This appeal is concerned with the legal implications of acts of physical and
sexual abuse committed, or alleged to have been committed, by brothers
who were, or should have been, pursuing that mission at a residential
institution at Market Weighton for boys in need of care called St Williams.
2 The institute is, in civil law, an unincorporated association of its
members. It has, however, corporate features, including a hierarchy of
H
authority. Steps have been taken on behalf of the institute to create legal
bodies that are capable of owning property and entering into legal relations
in pursuance of the institutes mission. Some of these are reected in the
identity of the individual defendants who have been described collectively as
the De La Salle defendants. Expert evidence was given as to the nature
161
8
(SC(E)) [2013] 2 AC
Lord Phillips of Worth Matravers
and status of the institute as a matter of canon law. These matters have not A
been explored before this court. The preliminary issue with which this court
is concerned is: whether the institute is responsible in law for the alleged
acts of sexual and physical abuse of children at St Williams committed by its
members.
3 This appeal requires this court to review the application of the
principles of vicarious liability in the context of sexual abuse of children.
B
Unhappily this is today not an unusual context and it is one in which
vicarious liability has received recent consideration not merely by other
courts in the United Kingdom, but at the highest level in Canada and
Australia.
4 The claims in this group action are brought by 170 men in respect of
abuse to which they allege that they were subjected at St Williams between
1958 and 1992. The claims are brought against two groups of defendants. C
The rst group consists of the Middlesbrough defendants. They took over
the management of the school in 1973 and inherited, under statute, the
liabilities of the managers of the school before that date. They, or those they
represent, concluded contracts of employment with the brother teachers.
They were held at rst instance to be vicariously liable for acts of abuse by
those teachers and no longer challenge that liability. By this appeal they
seek, however, to challenge the judges nding, conrmed by the Court of D
Appeal, that the second group of defendants, the De La Salle defendants,
were not also vicariously liable for the acts of abuse committed by members
of the institute. The claimants are content to look to the Middlesbrough
defendants for their relief and anxious not to risk liability in respect of the
costs of the appeal to this court. Accordingly they have played no part in the
appeal. E
5 This case is almost a carbon copy of McE v De La Salle Brothers
2007 SC 556, in which a similar preliminary issue was tried. In that case a
single pursuer claimed damages in respect of physical abuse to which he had
been subjected by Brother Benedict, a De La Salle brother, while at a school
in Scotland. The claim was however a test case as there were pending some
150 additional cases where abuse was alleged at the hands of brothers at that
school. The Court of Session held that there was no basis upon which the F
allegation of vicarious liability on the part of the institute could succeed and
the claim was accordingly dismissed.
The facts
6 No signicant challenge has been made in respect of the facts found
by the judge of rst instance, Judge Hawkesworth QC, sitting as a judge of G
the High Court and these have formed the basis of the statement of agreed
facts and issues.
The institute
7 The head of the institute is the superior general in Rome, elected by
the general chapter of the brothers, which is itself made up of elected
H
representatives of all brothers. For the purposes of administration the
institute is divided into districts called provinces, each headed by a
provincial. At di›erent times there has been a London province, an
English province and a Great Britain province. Within a province the
brothers live in communities, each headed by a director.
162
9
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A 8 The brothers are bound together by lifelong vows of chastity, poverty

and obedience and by detailed and very strict rules of conduct (the rule).
The rule has its origin in the rules approved by the Pope in 1724, but these
were amended from time to time. During the period to which this action
relates the relevant rules were the Common Rules of 1947. The vow of
obedience carries the obligation to obey the superiors of the institute,
including the provincial and the director of the community. Each brother
B
undertakes to go wherever I may be sent and to do whatever I may be
assigned by the [institute] or its superior.
9 The rule is highly particular and governs all aspects of the life and
conduct of a brother including such matters as the taking of communal
meals and other required communal activities. It contains provisions
governing how the children taught are to be treated, including a chapter on
C correction or punishment which prohibits touching a child or corporal
punishment. One chapter deals with chastity and this includes a provision
that: They shall not touch their pupils through playfulness or familiarity,
and they shall never touch them on the face. There is a requirement to
advertise to each other any faults of which they are conscious and extreme
reserve is required, for example in speaking to women. Pursuant to the vow
of poverty, any brother who is employed to teach by an outside body has to
D hand over all his earnings to the institute. In England this duty is performed
by entering into a deed of covenant to pay the earnings to a charitable trust.
The pleadings disclose that there is a 1947 trust relating to property held in
connection with rst the London province and subsequently the Great
Britain province, and a 1953 trust relating to property held in connection
with the England province. Judge Hawkesworth, at paras 30 and 31,
E recorded that Brother Thomas gave evidence that the DLS trust had
substantial funds derived from the sale of its properties and from the
covenanted funds of the brothers employed in education at St Williams and
elsewhere. The institute provides the brothers with the wherewithal to
live and looks after them after their retirement.
10 The institute owns schools, presumably through its charitable trusts.
Where it does so the teaching is provided by a community of brothers who
F will usually live within the school. The director of the community almost
always acts as the headmaster of the school. However the institute never
owned St Williams.
St Williams
11 In paras 25—34 of the leading judgment in the Court of Appeal
G [2010] EWCA Civ 1106 Hughes LJ has set out the history of St Williams, as
found by Judge Hawkesworth. It was founded in or about 1865 by a group
of Catholic benefactors who placed the school in the ownership of a
charitable trust. It was managed by a group of local people as a reformatory
school for boys. They entrusted the running of the school to a religious
congregation called the Rosminians. They did not prove satisfactory and, in
1912 the managers replaced them with the institute, under a formal
H
agreement made with the superior general of the institute. This agreement
e›ectively delegated the running of the school to the institute. Thereafter,
up to 1933, the school was entirely sta›ed by brothers of the institute. These
were members of a community whose bedrooms and refectory were within
the school grounds. Most of the brothers in the community worked in the
163
10
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school, but there were some who did not. The director of the community A
was almost always the headmaster of the school.
12 In 1933 the regime changed pursuant to provisions of the Children
and Young Persons Act 1933. St Williams became an approved school, for
the detention of boys up to the age of 17 who had been convicted of
custodial o›ences. Under the 1933 Act, and the Approved School Rules
1933 made under it, the sta› became the direct statutory responsibility of
B
the managers. All teaching sta› had to be employed by them under written
contracts and the headmaster was made responsible to the managers for the
e–cient conduct of the school. The managers at this time, as described by
the judge, at para 25, were a self-perpetuating group of like-minded people,
linked by their Catholic faith, who would be appointed subject to the
bishops approval. From this time the managers began to employ lay
teachers in addition to the brothers and the proportion of brother teachers to C
lay teachers uctuated but generally diminished. In 1954 there were ve
brother teachers and ve lay teachers.
13 The regime changed again in 1973 when the provisions of the
Children and Young Persons Act 1969 took e›ect. St Williams then became
an assisted community home for children in the care of the local authority.
Under section 42 of the 1969 Act the responsibility for managing
D
St Williams was vested in the voluntary organisation responsible for
its management, equipment and maintenance or the responsible
organisation. The Middlesbrough Diocesan Rescue Society (MDRS)
undertook this role, replacing the previous managers. The MDRS was an
unincorporated association consisting of the Catholic bishop of the diocese,
as president, and priests appointed by him. On 28 July 1982 the Catholic
Child Welfare Society (Diocese of Middlesbrough), an incorporated E
charitable company, replaced the MDRS as the responsible organisation.
14 After 1973 the proportion of brother teachers to lay sta› diminished
further. After 1976 there were never more than two brother teachers and
for much of the time there was only one, while there were as many as a
dozen lay teachers. Some of these lived on the site in premises apart from
those of the dwindling community of brothers. Other lay teachers lived in
F
the town.
15 At all times the managers chose to leave it to the institute, in the form
of the relevant provincial, to designate a brother to act as headmaster of the
school. In 1976 the headmaster, Brother Reginald, retired. With the
agreement of the MDRS the provincial replaced him with Brother James,
who had been a brother teacher and housemaster at St Williams since 1968.
Brother James is now Mr Carragher, having been expelled from the institute. G
This expulsion followed his dismissal in disgrace from the post of
headmaster in 1990 because it had been discovered that he had been guilty of
systematic sexual abuse of the boys in his care. In 1993 Mr Carragher
pleaded guilty to a number of o›ences of sexual abuse and was sentenced to
seven years imprisonment. In 2004, after a ten-week trial, he was found
guilty of 21 counts of serious sexual o›ences against boys, spanning a period
H
of some 20 years, and sentenced to 14 years imprisonment. Some of the
claimants allege that they were abused by Mr Carragher. Others allege
abuse by other brothers. Of the 150 claimants on whose behalf particulars
have been given, 146 allege that they were abused by members of the
institute.
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11
(SC(E))
A 16 After the dismissal of Mr Carragher the number of boys at the school

dwindled. The institute disengaged from the school and it nally closed in
1994.
Control
17 The undertaking by each brother to go wherever he might be sent
B meant that the institute controlled where it was that the brothers taught.
The institute could not, of course, control whether schools owned by third
parties engaged brothers as teachers. It could, however, control whether a
brother worked in a school that was prepared to engage him. Because the
managers of St Williams were always keen to have a brother as headmaster
of the school, the institute in e›ect determined who the headmaster of the
school should be. Thus in 1963 the provincial informed the managers of the
C school that Brother Dominic would replace Brother Vincent as headmaster
and this was accepted. In 1965, by decision of the superior general in Rome
responsibility for St Williams was transferred from the English province to
the London province. This resulted in the three brothers, including the
headmaster and the deputy headmaster, resigning and being replaced by
other brothers. The managers, with a degree of reluctance, accepted this.
18 It is an agreed fact that If a brother was sent to a school managed by
D
a third party, the institutes control over his life remained complete. He
remained bound by his vows, and every year the provincial made an annual
visit of inspection of the community and the brothers living in it, which
embraced their role within the school.
An overview of the issues

E 19 The law of vicarious liability is on the move. On 12 July 2012,
shortly before the hearing of the appeal in this case, the Court of Appeal
handed down its judgments in E v English Province of Our Lady of Charity
[2013] QB 722. That case was concerned with the preliminary issue of
whether the diocesan trust could be vicariously liable for acts of sexual abuse
committed by a parish priest in the diocese. The court held, by a majority,
F that he could. Before us Mr Leggatt, for the Middlesbrough defendants,
suggested that the court would no doubt wish to read the judgments in full.
He was right to do so. The hearing of that case before the Court of Appeal
lasted but a day, but the impressive leading judgment of Ward LJ evidences
consideration of case law and academic writings that goes far beyond the
material to which counsel can have had time to refer in that short hearing.
At paras 20 and 21 of his judgment, Ward LJ traces the origin of vicarious
G liability back to the middle ages, but rightly identies that the law upon
which he and I cut our teeth rendered the employer, D2, liable for the
tortious act of the employee, D1, provided that the act in question was
committed in the course of the employees employment. Thus, in a case
about vicarious liability, the focus was on two stages: (1) was there a true
relationship of employer/employee between D2 and D1? (2) was D1 acting
in the course of his employment when he committed the tortious act?
H
20 Since Ward LJ and I cut our teeth the courts have developed the law
of vicarious liability by establishing the following propositions. (i) It is
possible for an unincorporated association to be vicariously liable for the
tortious acts of one or more of its members: Heatons Transport (St Helens)
Ltd v Transport and General Workers Union [1973] AC 15, 99; Thomas v
165
12
(SC(E)) [2013] 2 AC
National Union of Mineworkers (South Wales Area) [1986] Ch 20, 66—67; A

Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366. (ii) D2 may be
vicariously liable for the tortious act of D1 even though the act in question
constitutes a violation of the duty owed to D2 by D1 and even if the act in
question is a criminal o›ence: Morris v CW Martin & Sons Ltd [1966] 1 QB
716; Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366; Brinks Global
Services Inc v Igrox Ltd [2011] IRLR 343. (iii) Vicarious liability can even
B
extend to liability for a criminal act of sexual assault: Lister v Hesley Hall
Ltd [2002] 1 AC 215. (iv) It is possible for two di›erent defendants, D2 and
D3, each to be vicariously liable for the single tortious act of D1: Viasystems
(Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] QB 510.
21 None of these developments of the law of vicarious liability has been
challenged by Lord Faulks, who has represented the institute. I consider that
he was right not to challenge them, for they represent sound and logical C
incremental developments of the law. They have, however, made it more
di–cult to identify the criteria that must be demonstrated to establish
vicarious liability than it was 50 years ago. At para 37 of his judgment in
this case, Hughes LJ rightly observed that the test requires a synthesis of two
stages: (i) The rst stage is to consider the relationship of D1 and D2 to see
whether it is one that is capable of giving rise to vicarious liability.
D
(ii) Hughes LJ identied the second stage as requiring examination of the
connection between D2 and the act or omission of D1. This is not entirely
correct. What is critical at the second stage is the connection that links the
relationship between D1 and D2 and the act or omission of D1, hence the
synthesis of the two stages.
22 Both stages are in issue in the present case. There is an issue as to
whether the relationship between the institute and the brothers teaching at E
St Williams was one that was capable of giving rise to vicarious liability.
There is also an issue as to whether the acts, or alleged acts, of sexual abuse
were connected to that relationship in such a way as to give rise to vicarious
liability.
23 It is the institutes case that the relationship of the individual
brothers to the institute, considered as a body, is insu–ciently close to give
F
rise, of itself, to vicarious liability on the part of the institute for sexual abuse
by brother teachers. Only a body managing a school and employing a
brother in that school as a teacher, will have a su–ciently close relationship
to that brother teacher to be vicariously liable for his wrongdoing. That is
why the Middlesbrough defendants are liable and the De La Salle defendants
are not, as held by the courts below.
24 It is the Middlesbrough defendants case, as developed by G
Mr Leggatt, that the courts below have failed to give e›ect to the principles
properly to be derived from the relevant authorities, particularly those
dealing with vicarious liability for sexual abuse. The necessary closeness of
connection between the relationship between the institute and the brothers
and the abuses committed by the brothers is provided by the fact that the
institute sent the brothers to St Williams to further the purpose of the
H
institute, clothed with the status of members of the institute, and thereby
signicantly increased the risk that brothers would sexually abuse the
children with whom they were in close physical proximity. This is indeed a
synthesis of stage 1the relationship of the brothers with the institute and
stage 2the connection between that relationship and the acts of abuse.
166
13
(SC(E))
A A closer view of the issues

25 I turn then to the central issue that divides the parties. Is the
relationship between the individual brothers who taught at the school and
the institute such as to give rise to vicarious liability on the part of the
institute for acts of sexual abuse committed in the school? The institute
accepts that the relationship between the brother teachers and the
B Middlesbrough defendants has given rise to vicarious liability on the part of
the latter, but contends that this is because the Middlesbrough defendants
entered into contracts of employment with the brothers and managed and
controlled both them and the school. The institute contends that the
relationship between the brothers and the institute lacks these critical
features. The institute further contends that it cannot be held to be
vicariously liable in addition to the Middlesbrough defendants unless the
C criteria for dual liability laid down by the Court of Appeal in the Viasystems
case [2006] QB 510 are demonstrated. It contends that these criteria are not
demonstrated. Hughes LJ reached a similar conclusion. His judgment
focused largely on the extent to which the brothers were under the control of
the institute, and he concluded that this was insu–cient to give rise to
vicarious liability.
26 The Middlesbrough defendants rely on the recent decisions on
D
vicarious liability for sexual abuse as demonstrating that the relationship of
employer/employee is not an essential prerequisite. They submit that the
closeness of the relationship between brothers and the institute, the fact that
the brothers were sent out to further the object of the institute, namely to
teach boys, and the fact that this created a risk of sexual abuse of the boys by
the brothers, su–ced to render the institute vicariously liable for the abuse
E committed by the brothers.
The nature of the institute

27 Before considering stage 1 of the test for vicarious liability I must
address the problem of the institute. Hughes LJ held, and Lord Faulks now
accepts, that it is possible for vicarious liability to arise out of the
F relationship between one member of an unincorporated association and the
other members, at least where the former acts on behalf of the others. He
held, however, at para 57, that there was not a su–ciently close connection
between the brothers of the institute scattered all over the world and the
torts committed by the brother teachers at St Williams to give rise to
vicarious liability. This raises the question of whether it is right to treat the
De La Salle defendants as being simply an unincorporated band of brothers
G scattered around the world.
28 A similar problem perplexed Ward LJ in Es case [2013] QB 722.
The issue in that case was whether there was vicarious liability for sexual
abuse committed by a Roman Catholic priest. He observed, at para 5, that
there had been other occasions on which the church had been called on to
answer for the acts of its clergy and that Es case was the rst occasion on
which the church had challenged the allegation that it was the employer of
H
its clergy. The issue had always before been simply whether the acts of abuse
had been committed in the course of that employment.
29 The defendants against whom the claim was brought were the
Trustees of the Portsmouth Roman Catholic Diocesan Trust. Ward LJ
observed, at para 8, that because English law did not recognise the Catholic
167
14
(SC(E)) [2013] 2 AC
Church as a legal entity in its own right but saw it as an unincorporated A

association with no legal personality, the diocese usually established a
charitable trust to enable it to own and manage property and otherwise
conduct its nancial a›airs in accordance with domestic law. At para 18,
Ward LJ remarked that there had been understandable confusion as to
whom to sue and that the case had proceeded e›ectively against the bishop,
though it was the trustees who would be covered by the relevant insurance
B
should liability be established. He added that intuitively one would think
that, as a priest is always said to be a servant of God, the Roman Catholic
Church itself would be the responsible defendant, but the Roman Catholic
Church could not be a party as it had no legal personality. In those
circumstances Ward LJ treated the bishop as being the person whose
vicarious liability was in issue.
30 There are parallels between this aspect of Es case and the present C
case. The choice of defendants suggests that the claimants may well have
been in doubt as to whom they should sue, as they have adopted something
of a scatter gun approach. Of the 35 defendants on the pleadings, the action
has proceeded against 13. Of these I select as a typical De La Salle defendant
the tenth defendant, Patrick Joseph Campbell:
sued on his own behalf and as a former trustee of the 1947 trust and D
as representing all persons (other than any other party to the claim) who
were at any time relevant to the claimants claims: (i) members of the
order (ii) members of the English province or the Great Britain province
(iii) responsible for the supervision management or direction of brothers
carrying on the work of the England province or the Great Britain
province, or (iv) trustees of the 1947 trust before 14 July 1992.
E
31 I can appreciate Hughes LJs di–culty in accepting that a De La Salle
brother in Australia could be vicariously liable for the sexual assault by a
brother at St Williams. Indeed, there is something paradoxical in the
concept of an attempt to hold vicariously liable a world wide association of
religious brothers, all of whom have taken vows of poverty and so have no
resources of their own. So far as individual defendants are outside the
F
jurisdiction this might also have given rise to an interesting question of
conict of laws. This is, however, a long way from the realities of these
proceedings and Lord Faulks has not taken any point on the nature of the
institute.
32 It is open to the claimants on the pleadings to seek to establish
vicarious liability on the part of an unincorporated association made up at
the relevant times of the brothers world wide, or of members of the London G
province, or of the England province, or of the Great Britain province. At
the end of the day what is likely to matter will be access to the funds held by
the trusts, or to insurance e›ected by the trustees. Whether one looks at the
picture world wide, or within Great Britain, the salient features are the same.
The institute is not a contemplative order. The reason for its creation and
existence is to carry on an activity, namely giving a Christian education to
H
boys. To perform that activity it owns and manages schools in which its
brothers teach, and it sends its brothers out to teach in schools managed by
other bodies. The institute is, for administrative purposes divided into
provinces, each administered by its provincial. To carry out its activities it
has formed trusts that have recognised legal personality. The trusts are
168
15
(SC(E))
A funded in part from the earnings of those brothers who receive payment for
teaching. The trust funds are used to meet the needs of the brothers and the
nancial requirements of the teaching mission.
33 It seems to me more realistic to view the brothers of the province
from time to time responsible for the area in which Market Weighton lies as
members of the relevant unincorporated association rather than the order as
a whole, but I doubt if it makes any di›erence in principle. Because of the
B
manner in which the institute carried on its a›airs it is appropriate to
approach this case as if the institute were a corporate body existing to
perform the function of providing a Christian education to boys, able to own
property and, in fact, possessing substantial assets.
Stage 1: the essential elements of the relationship

C 34 Vicarious liability is a longstanding and vitally important part of the
common law of tort. A glance at the table of cases in Clerk & Lindsell on
Torts, 20th ed (2010), shows that in the majority of modern cases the
defendant is not an individual but a corporate entity. In most of them
vicarious liability is likely to be the basis upon which the defendant was
sued. The policy objective underlying vicarious liability is to ensure, in so far
as it is fair, just and reasonable, that liability for tortious wrong is borne by a
D
defendant with the means to compensate the victim. Such defendants can
usually be expected to insure against the risk of such liability, so that this risk
is more widely spread. It is for the court to identify the policy reasons why it
is fair, just and reasonable to impose vicarious liability and to lay down the
criteria that must be shown to be satised in order to establish vicarious
liability. Where the criteria are satised the policy reasons for imposing the
E liability should apply. As Lord Hobhouse of Woodborough pointed out in
the Lister case [2002] 1 AC 215, para 60, the policy reasons are not the same
as the criteria. One cannot, however, consider the one without the other and
the two sometimes overlap.
35 The relationship that gives rise to vicarious liability is in the vast
majority of cases that of employer and employee under a contract of
employment. The employer will be vicariously liable when the employee
F commits a tort in the course of his employment. There is no di–culty 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 satised: (i) 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; (ii) the tort will have been committed as a result of activity
G being taken by the employee on behalf of the employer; (iii) the employees
activity is likely to be part of the business activity of the employer; (iv) the
employer, by employing the employee to carry on the activity will have
created the risk of the tort committed by the employee; (v) the employee will,
to a greater or lesser degree, have been under the control of the employer.
The signicance of control

H
36 In days gone by, when the relationship of employer and employee
was correctly portrayed by the phrase master and servant, the employer
was often entitled to direct not merely what the employee should do but the
manner in which he should do it. Indeed, this right was taken as the test for
di›erentiating between a contract of employment and a contract for the
169
16
(SC(E)) [2013] 2 AC
services of an independent contractor. Today it is not realistic to look for a A

right to direct how an employee should perform his duties as a necessary
element in the relationship between employer and employee. Many
employees apply a skill or expertise that is not susceptible to direction by
anyone else in the company that employs them. Thus the signicance of
control today is that the employer can direct what the employee does, not
how he does it.
B
Control and the transfer of vicarious liability
37 There is one area of the law of vicarious liability where control has
been of critical importance. I must explore it because it is relevant on the
facts of this case. It has long been recognised that there are circumstances in
which vicarious liability for the tortious act of a workman can be transferred
from his employer to a third person who is using the employees services C
under a contract, or other arrangement, with his employer: see Donovan v
Laing Wharton & Down Construction Syndicate Ltd [1893] 1 QB 629. The
circumstances in which such a transfer could take place were considered by
the House of Lords in Mersey Docks and Harbour Board v Coggins &
Gri–th (Liverpool) Ltd [1947] AC 1. Their Lordships imposed a test that
was so stringent as to render a transfer of vicarious liability almost D
impossible in practice. It may well be that that was their intention. The
negligence in question was that of the driver of a crane, which had been
hired, together with the services of the driver, by the drivers employer to a
rm of stevedores.
38 Viscount Simon, at pp 10 and 11, said that a heavy burden of proof
lay on the general or permanent employer to shift responsibility for the
negligence of servants engaged and paid by such employer to the hirer for the E
time being who had the benet of the services rendered. This could only be
achieved where the hirer enjoyed the right to control the way in which the
act involving negligence was done. The inquiry should concentrate on the
relevant negligent act and then ask whose responsibility it was to prevent it.
Lord Macmillan, at p 14, Lord Porter, at p 17 and Lord Uthwatt, at
pp 22—23, applied the same test. F
39 The Mersey Docks case remained the leading case in this area of the
law at the time of the decision in the Viasystems case [2006] QB 510 where,
unusually for a case of such importance, only two members of the Court of
Appeal sat on the appeal. Modern construction enterprises often involve a
chain of contractors and subcontractors working together to a common end,
and such a situation can lead to a dispute between them as to who is
vicariously liable for the negligence of a workman employed on the project. G
That was the position in the Viasystems case. The claimants engaged the
rst defendants to install air conditioning in their factory. The rst
defendants subcontracted ducting work to the second defendants. The
second defendants contracted with the third defendants to provide tters
and tters mates on a labour only basis. They were working under the
supervision of a self-employed tter contracted to the second defendants.
H
One of the tters mates in a moment of folly crawled through a section of
ducting and negligently fractured the re protection lter system, ooding
the factory. At rst instance the third defendants were held vicariously liable
for the damage caused and the second defendants held not to be vicariously
liable.
170
17
(SC(E))
A 40 The Court of Appeal raised the question of whether it was possible in

law to have dual vicarious liability and, after considering the authorities,
decided that, although for 180 years courts had always proceeded on the
basis that only one defendant could be vicariously liable for a tortious act,
there was no case that bound the court so to nd. Academic writers
favoured the possibility of dual vicarious liability and, on the facts of the
case, this was the principled solution.
B
41 At para 16, May LJ, applying the Mersey Docks case [1947] AC 1,
held that the inquiry should concentrate on the relevant negligent act and
then ask whose responsibility it was to prevent it. Who was entitled, and
perhaps theoretically obliged, to give orders as to how the work should or
should not be done? The answer on the facts of the case was both the second
and the third defendants. There was dual control and thus there should be
C dual vicarious liability.
42 Rix LJ reached the same conclusion, but his reasoning was not the
same. At para 55, he commented that the basis of vicarious liability was,
generally speaking, that those who set in motion and prot from the
activities of their employees should compensate those who are injured by
such activities, even when performed negligently. Liability was extended to
the employer on the practical assumption that because he could spread the
D
risk through pricing and insurance, he was better organised and able to bear
the risk and was, at the same time, encouraged to control the risk.
43 Dealing with the test of control, Rix LJ observed, at paras 59 and 64,
that the right to control the method of doing work had long been an
important and sometimes critical test of the master/servant relationship.
The courts had, however, imperceptibly moved from using the test of control
E as determinative of the relationship of employer and employee to using it as
the test of vicarious liability of a defendant. At para 79, he questioned
whether the doctrine of vicarious liability was to be equated with control.
Vicarious liability was a doctrine designed for the sake of the claimant,
imposing a liability incurred without fault because the employer was treated
at law as picking up the burden of an organisational or business relationship
which he had undertaken for his own benet. Accordingly, what one was
F
looking for was:
a situation where the employee in question, at any rate for relevant
purposes, is so much a part of the work, business or organisation of both
employers that it is just to make both employers answer for his
negligence.
G 44 The brothers who taught at the school were not contractually
employed by the institute; they were contractually employed by or on behalf
of the Middlesbrough defendants. By this appeal the Middlesbrough
defendants seek to establish dual vicarious liability. The question arises of
whether the approach of May LJ or that of Rix LJ should be applied in
determining whether the institute is also vicariously liable for the brothers
torts.
H
45 The test that May LJ applied was that applied in the Mersey Docks
case [1947] AC 1. I do not consider that there is any justication for
applying this stringent test when considering whether there is dual vicarious
liability. Where two defendants are potentially vicariously liable for the act
of a tortfeasor it is necessary to give independent consideration to the
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relationship of the tortfeasor with each defendant in order to decide whether A

that defendant is vicariously liable. In considering that question in relation
to each defendant the approach of Rix LJ is to be preferred to that of
May LJ.
46 Two subsequent decisions of the Court of Appeal, Hawley v
Luminar Leisure Ltd [2006] Lloyds Rep IR 307 and Bi›a Waste Services
Ltd v Maschinenfabrik Ernst Hese GmbH [2009] QB 775 applied the test of
B
control when holding only one of two defendants to be vicariously liable. It
is arguable that the facts of each case could have supported a nding of dual
vicarious liability.
47 At para 35 above, I have identied those incidents of the relationship
between employer and employee that make it fair, just and reasonable to
impose vicarious liability on a defendant. Where the defendant and the
tortfeasor are not bound by a contract of employment, but their relationship C
has the same incidents, that relationship can properly give rise to vicarious
liability on the ground that it is akin to that between an employer and an
employee. That was the approach adopted by the Court of Appeal in Es
case [2013] QB 722.
48 Es case was specically concerned with stage 1 of the test of
vicarious liability. The claimant alleged that when, as a young girl, she was
D
resident in a childrens home run by the rst defendants, an order of nuns,
she was sexually abused by a visiting Roman Catholic priest who had been
appointed by the second defendant trust, which stood in the place of, and
could be equated with, the diocesan bishop. A preliminary issue was
ordered as to whether the relationship between the priest and the trust was
one that was capable of giving rise to vicarious liability. Although this issue
was restricted to the stage 1 test MacDu› J at rst instance [2013] QB 722; E
[2012] 2 WLR 709 held that it could not be considered in isolation from
stage 2, as the test of vicarious liability involved a synthesis of the two stages.
In a lucid and bold judgment he held that the relationship could give rise to
vicarious liability. There was no contract of employment between the trust
and the priest. As the headnote summarised the evidence, there were no
terms, conditions, wages or right of dismissal except through the church in
F
Rome and e›ectively no control over a priest once appointed since, although
he was subject to canon law and owed the bishop obedience, he was free to
conduct his ministry as he saw t without interference from the bishop,
whose role was advisory not supervisory. But, at pp 733—734, paras 35 and
36, MacDu› J queried the relevance of these matters when the question was
whether, in justice, the trust should be responsible for the tortious acts of
the man appointed and authorised by it to act on its behalf. The crucial G
features were that the priest was appointed in order to do the work of the
church with the full authority to full that role, being provided with
the premises, the pulpit and the clerical robes. He was directed into the
community and given free rein to act as representative of the church. He had
been trained and ordained for that purpose and his position of trust gave him
great power.
H
49 In the Court of Appeal [2013] QB 722 Ward LJ essentially adopted
the reasoning of MacDu› J. He did so, however, on the footing that what
MacDu› J had identied as the crucial features created a relationship
between the priest and the bishop that was akin to employment. When
considering vicarious liability it was not appropriate to apply tests of
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19
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A employment laid down by the courts when dealing with unfair dismissal, or
taxation, or discrimination. Nor was control any longer to be treated as the
critical touchstone of employment, albeit that it was an important
consideration. The question of control should not be approached merely by
inquiring whether an employer could tell the workman how to do his
work, but in terms of whether the workman was under the management of
B
and accountable to an employer. It was necessary to identify whether the
workman was working on behalf of an enterprise or on his own behalf and,
if the former, how central the workmans activities were to the enterprise
and whether these activities were integrated into the organisational structure
of the enterprise. In applying these criteria Ward LJ acknowledged the
assistance that he had derived from an article by Professor Richard Kidner,
Vicarious liability: for whom should the employer be liable? (1995)
C 15 LS 47.
50 Ward LJ concluded that the relationship of the bishop and the priest
was so close in character to one of employer/employee that it was just and
fair to hold the employer vicariously liable: para 73. He was accountable
to the bishop in as much as he owed him reverence and obedience and could
be dismissed from his o–ce by him in the event of gross breach of his duties
D under Canon law. His activities in ministering to the souls of the faithful
were central to the objectives of the organisationthe Roman Catholic
Church, which in its organisational structure looked like a business. He was
part and parcel of that organisation and wholly integrated in it. In his work
he behaved more as if he was an employee than someone in business on his
own account: paras 73—79.
51 Davis LJ delivered a concurring judgment. He also concluded that
E
the relationship between the bishop and the priest was su–ciently akin to
employment to be capable of giving rise to vicarious liability. The bishop
had a degree of control over the priest. The priests activity of visiting the
residential home where the claimant lived was carried out in furtherance of
the bishops aims and purposes, namely perpetuating the works of Christ in
the diocese.
F 52 Tomlinson LJ dissented. He agreed with the passage in Lord
Milletts speech in the Lister case [2002] 1 AC 215 that I have quoted, at
para 71, below, but held that it could not be transposed so as to treat a priest
as carrying on his work for the benet of the bishop.
53 In Es case the claimant is also seeking to establish vicarious liability
on the part of the charity which ran the home in which the abuse is alleged to
G have taken place. The Court of Appeal did not consider that the possibility
of dual vicarious liability a›ected the test to be applied.
54 In summary, in Es case [2013] QB 722 MacDu› J found the bishop
vicariously liable for the acts of the priest notwithstanding that the
relationship between them was signicantly di›erent from a contract of
employment: p 733, para 35. In the Court of Appeal [2013] QB 722, Ward
and Davis LJJ found it possible to describe the relationship between the
H bishop and the priest as being akin to employment. Ward LJ achieved this
by treating the ministry of the Roman Catholic Church as a business carried
on by the bishop, by nding that the priest carried on that business under a
degree of control by the bishop and by nding that the priest was part and
parcel of the organisation of the business and integrated into it.
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55 Ward and Davis LJJ distinguished the decision of the Court of A

Appeal in the present case. Ward LJ did so implicitly and Davis LJ for
reasons that I do not nd persuasive. The truth is that the case for nding
vicarious liability is much stronger in the present case than it was in Es case.
56 In the context of vicarious liability the relationship between the
teaching brothers and the institute had many of the elements, and all the
essential elements, of the relationship between employer and employees.
B
(i) The institute was subdivided into a hierarchical structure and conducted
its activities as if it were a corporate body. (ii) The teaching activity of the
brothers was undertaken because the provincial directed the brothers to
undertake it. True it is that the brothers entered into contracts of
employment with the Middlesbrough defendants, but they did so because
the provincial required them to do so. (iii) The teaching activity undertaken
by the brothers was in furtherance of the objective, or mission, of the C
institute. (iv) The manner in which the brother teachers were obliged to
conduct themselves as teachers was dictated by the institutes rules.
57 The relationship between the teacher brothers and the institute
di›ered from that of the relationship between employer and employee in
that: (i) The brothers were bound to the institute not by contract, but by
their vows. (ii) Far from the institute paying the brothers, the brothers
entered into deeds under which they were obliged to transfer all their D
earnings to the institute. The institute catered for their needs from these
funds.
58 Neither of these di›erences is material. Indeed they rendered the
relationship between the brothers and the institute closer than that of an
employer and its employees.
59 Hughes LJ held [2010] EWCA Civ 1106 at [54] that the brothers no E
more acted on behalf of the institute than any member of a professional
organisation who accepts employment with that status is acting on behalf of
the organisation when he does his job. I do not agree with this analysis.
The business of the institute was not to train teachers or to confer status on
them. It was to provide Christian teaching for boys. All members of the
institute were united in that objective. The relationship between individual
teacher brothers and the institute was directed to achieving that objective. F
60 For these reasons I consider that the relationship between the
teaching brothers and the institute was su–ciently akin to that of employer
and employees to satisfy stage 1 of the test of vicarious liability.
61 There is a simpler analysis that leads to the conclusion that stage 1
was satised. Provided that a brother was acting for the common purpose of
the brothers as an unincorporated association, the relationship between G
them would be su–cient to satisfy stage 1, just as in the case of the action of
a member of a partnership. Had one of the brothers injured a pedestrian
when negligently driving a vehicle owned by the institute in order to collect
groceries for the community few would question that the institute was
vicariously liable for his tort.
Stage 2: The connection between the brothers acts of abuse and the H
relationship between the brothers and the institute
62 Where an employee commits a tortious act the employer will be
vicariously liable if the act was done in the course of the employment of
the employee. This plainly covers the situation where the employee does
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21
(SC(E))
A something that he is employed to do in a manner that is negligent. In that

situation the necessary connection between his relationship with his
employer and his tortious act will be established. Stage 2 of the test will be
satised. The same is true where the relationship between the defendant and
the tortfeasor is akin to that of an employer and employee. Where the
tortfeasor does something that he is required or requested to do pursuant to
his relationship with the defendant in a manner that is negligent, stage 2 of
B
the test is likely to be satised. But sexual abuse can never be a negligent way
of performing such a requirement. In what circumstances, then, can an act
of sexual abuse give rise to vicarious liability?
Vicarious liability for sexual abuse

63 The extension of statutory periods of limitation coupled with the
C identication of the serious psychiatric injury that is often caused by child
abuse has led to something of a proliferation of claims by adults for personal
injury caused by sexual abuse in their childhood. Unhappily in quite a
number of cases the abuse was perpetrated by a priest or a member of a
religious order. Such cases can raise problems both at stage 1 and at stage 2
of the analysis. Although the law in this area is developing, there are some
priests who do not serve under contracts of employment and the question
D
then arises of whether the priest has a relationship with any body that can
give rise to vicarious liability on the part of the body. If there is such a body,
the second question is whether there is a connection between the priests
relationship with that body and the sexual abuse committed by the priest
that can make that body vicariously liable for the priests actions. Es case
[2013] QB 722 was such a case, albeit that the preliminary issue focused on
E stage 1. In dealing with stage 2 I propose to start with two Canadian cases
on sexual abuse, where the tortfeasors were lay employees, so that no issue
arose in relation to stage 1. These cases have had a signicant inuence on
the English jurisprudence.
64 Bazley v Curry (1999) 174 DLR (4th) 45 was one of two decisions
involving child abuse given by the Supreme Court of Canada on the same
day. A not-for-prot organisation, D2, ran two residential care facilities for
F the treatment of emotionally troubled children. They unwittingly employed
a paedophile, D1, who sexually abused one of the children in the home. The
court, in a judgment delivered by McLachlin J, held D2 vicariously liable for
the abuse. The issue related to stage 2. Could acts of sexual abuse properly
be the subject of vicarious liability and, if so, on what basis? The court held
that this question should be directly addressed in the light of considerations
G
of policy. Two particular principles of policy were identied. The rst was
that where an employer puts into the community an enterprise carrying with
it certain risks and those risks materialise and cause injury it is fair that,
having created the enterprise and the risk, the employer should bear the loss.
The second was that holding the employer vicariously liable might have a
deterrent e›ect, causing employers to exercise a greater degree of care in
relation to the appointment and supervision of employees. So far as the legal
H test of liability was concerned, para 42 of the judgment summarised the
position as follows:
there must be a strong connection between what the employer was
asking the employee to do (the risk created by the employers enterprise)
and the wrongful act. It must be possible to say that the employer
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22
(SC(E)) [2013] 2 AC
signicantly increased the risk of the harm by putting the employee in his A
or her position and requiring him to perform the assigned tasks.
65 Markesinis & Deakins Tort Law, 6th ed (2007), describe this as the
enterprise risk approach. The court had no di–culty in nding that the
test was satised in Bazley v Curry, for D1s duties under his employment by
D2 included bathing the children and putting them to bed, In Jacobi v
Gri–ths (1999) 174 DLR (4th) 71, the other decision reached on the same B
day, the court applied the same test but, by a majority, reached a di›erent
conclusion on the facts. In that case D1 was employed by D2 to run a youth
club. D1 sexually abused two children whom he had met in the club, but the
abuse did not take place on the clubs premises or in connection with club
activities. The majority held that there was not the strong connection
between D1s employment at the club and his acts of abuse that was
necessary to give rise to vicarious liability. C
66 The Canadian Supreme Court returned to the theme in John Doe v
Bennett [2004] 1 SCR 436, a case whose facts are closer to those with which
we are concerned, and even closer to those of Es case [2013] QB 722. On
this occasion the court was presided over by McLachlin CJ, who gave the
judgment of the court. A Roman Catholic priest had sexually assaulted boys
in his parishes. The relevant issue was whether the diocesan episcopal D
corporation sole, which was equated with the bishop, was vicariously liable.
The priest was not employed by the corporation sole or the bishop. The
court held, however, at para 27, that the relationship between a bishop and a
priest in a diocese was akin to an employment relationship, inasmuch as
the priest took a vow of obedience to the bishop, the bishop exercised
extensive control over the priest, including the power of assignment, the
power to remove the priest from his post and the power to discipline him. At E
para 17, the court stated that the justication for vicarious liability was that
as the person responsible for the activity or enterprise in question, the
employer or principal should be held responsible for loss to third parties that
result from the activity or enterprise. At para 20, the court put forward a
variation on this theme: Vicarious liability is based on the rationale that a
person who puts a risky enterprise into the community may fairly be held F
responsible when those risks emerge and cause loss or injury to members of
the public (my emphasis). Applying Bazley v Curry 174 DLR (4th) 45, the
court held, at para 27, that the necessary connection between the employer-
created or enhanced risk and the wrong complained of was established.
The bishop provided the priest with the opportunity to abuse his power, this
opportunity being incidental to the functions of a parish priest. The priests
wrongful acts were strongly related to the psychological intimacy inherent in G
his role as priest. Finally, in his remote parishes the status of a priest carried
with it immense power. The court declined, on the ground of inadequacy of
the record, to consider whether the Roman Catholic Church itself was
vicariously liable for the priests wrongdoing.
67 In conclusion of this review of the Canadian authorities it is of
interest to note that 11 days after the English Court of Appeal held in the
H
Viasystems case [2006] QB 510 that it was possible in law to have dual
vicarious liability for a single tortious act, McLachlin CJ, giving the
judgment of the Supreme Court, reached the same conclusion in Blackwater
v Plint (2005) 258 DLR (4th) 275. Applying the test in Bazley v Curry
174 DLR (4th) 45, the court held both the Government of Canada and the
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23
(SC(E))
A United Church of Canada vicariously liable for sexual assaults committed by

a dormitory supervisor in a school which they jointly managed and
controlled.
68 In Lister v Hesley Hall Ltd [2002] 1 AC 215 the House of Lords,
reversing previous authority, held the owners and managers of a school
vicariously liable for sexual assaults committed by the warden of a boarding
B
house, employed by them. Although the result was unanimous the reasoning
of the House was not identical. Lord Steyn, at para 27, referred to Bazley v
Curry 174 DLR (4th) 45 and Jacobi v Gri–ths 174 DLR (4th) 71 as
luminous and illuminating judgments which would henceforth be the
starting point for consideration of similar cases. He held, however, that it
was not necessary to express views on the full range of policy considerations
examined in those decisions. At para 10, he stated that those cases
C enunciated a principle of close connection and, at para 28, he said that the
question was whether the wardens torts were so closely connected with his
employment that it would be fair and just to hold the employers vicariously
liable. He gave an a–rmative answer to that question, observing that the
sexual abuse was inextricably interwoven with the carrying out by the
warden of his duties at the school.
D 69 Lord Clyde also referred with approval to the Canadian decisions.
He held, at para 48, that their essence lay in the recognition of a su–cient
connection between the acts of the employee and the employment. At
para 50, he found that connection in the fact that the wardens position
brought him into close contact with the boys and the fact that the defendants
had delegated to the warden the general duty to look after and care for the
boys.
E
70 Lord Hutton agreed with the speech of Lord Steyn.
71 Lord Millett began his judgment with a review of academic writings
about the nature of vicarious liability. These identied the underlying policy
that an employer ought to be liable for those torts which could fairly be
regarded as reasonably incidental risks to the type of business carried on.
Lord Millett commented, at para 65, that the relevant passages:
F
are not to be read as conning the doctrine to cases where the
employer is carrying on business for prot. They are based on the more
general idea that a person who employs another for his own ends
inevitably creates a risk that the employee will commit a legal wrong. If
the employers objectives cannot be achieved without a serious risk of the
employee committing the kind of wrong which he has in fact committed,
G the employer ought to be liable. The fact that his employment gave the
employee the opportunity to commit the wrong is not enough to make the
employer liable. He is liable only if the risk is one which experience
shows is inherent in the nature of the business.
72 At para 70, he also stated that it was critical that attention should be
directed to the closeness of the connection between the employees duties
H and his wrongdoing and, in that context, referred with approval to the
Canadian decisions. As to the test of closeness, Lord Millett placed
importance on the employees act being an abnegation of a specic duty
imposed upon him by his employment. At para 83, referring again to the
Canadian decisions, he said:
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24
(SC(E)) [2013] 2 AC
Experience shows that in the case of boarding schools, prisons, A

nursing homes, old peoples homes, geriatric wards, and other residential
homes for the young or vulnerable, there is an inherent risk that indecent
assaults on the residents will be committed by those placed in authority
over them, particularly if they are in close proximity to them and
occupying a position of trust.
This suggests an endorsement of the Canadian Supreme Courts approach to B
treating the creation of risk as a basis for the imposition of vicarious liability
in cases of abuse.
73 Lord Hobhouse agreed with Lord Steyn: para 63, At para 55, he, like
Lord Millett, singled out schools, prisons and hospitals as being places
where vicarious liability was likely to be incurred, but in doing so he treated
vicarious liability as being based on an assumption of a duty of care by the C
employer the performance of which is then entrusted to the employee. At
para 60, he drew a distinction between the reasons of policy that justied
vicarious liability and the legal criteria that gave rise to this. He expressed
the view that creation of risk fell into the former rather than the latter
category.
74 It is not easy to deduce from the Lister case [2002] 1 AC 215 the
precise criteria that will give rise to vicarious liability for sexual abuse. The D
test of close connection approved by all tells one nothing about the nature
of the connection. Lord Clyde and Lord Hobhouse found it signicant that
the tortfeasors employment involved exercising care for the victim. Only
Lord Millett expressly endorsed the importance that the Canadian decisions
attached to the creation of risk. This has, however, been identied as of
signicance in most of the cases that have followed. E
75 The reasoning in the Lister case was applied by the House of Lords
in a commercial context. In Dubai Aluminium Co Ltd v Salaam [2003] 2 AC
366 the relevant issue was whether dishonest conduct by a solicitor could
involve the rm in liability under section 10 of the Partnership Act 1890 (53
& 54 Vict c 39) as having been carried on in the ordinary course of the
business of the rm. Giving the leading speech Lord Nicholls of
Birkenhead held that it was necessary to apply the legal policy underlying F
vicarious liability, which he stated, at para 21:
is based on the recognition that carrying on a business enterprise
necessarily involves risks to others. It involves the risk that others will be
harmed by wrongful acts committed by the agents through whom the
business is carried on. When those risks ripen into loss, it is just that the
business should be responsible for compensating the person who has been G
wronged.
This has strong echoes of the enterprise risk approach of the Canadian
Supreme Court and, indeed, Lord Nicholls went on, at para 23, to cite with
approval from the judgment of McLachlin CJ in Bazley v Curry
174 DLR (4th) 45.
H
76 When considering the stage 2 test of the ordinary course of
employment he suggested, at para 23, that the wrongful conduct must be so
closely connected with the acts the employee was authorised to do that the
wrongful conduct might fairly and properly be regarded as done in the
ordinary course of employment.
178
25
(SC(E))
A 77 The authorities on vicarious liability for unauthorised wrongful acts

were reviewed by Lord Steyn when giving the advice of the Board in Bernard
v Attorney General for Jamaica [2005] IRLR 398. He endorsed the close
connection test, observing, at para 23, that the principle of vicarious
liability was not innitely extendable. At para 18, he held that a relevant
factor was the risks to others created by an employer who entrusts duties,
tasks and functions to an employee. He added that this strand in the
B
reasoning in the Lister case [2002] 1 AC 215 was best expressed in the
passage from the speech of Lord Millett that I have quoted at para 72 above.
78 In Brown v Robinson [2004] UKPC 56, a di›erently constituted
Board of the Privy Council, at para 11 of the advice delivered by Lord
Carswell, endorsed the view expressed by Lord Hobhouse in the Lister case
[2002] 1 AC 215 that risk, while it might be a strong policy consideration,
C was not a criterion of vicarious liability.
79 In Majrowski v Guys and St Thomass NHS Trust [2007] 1 AC
224 Lord Nicholls, with whom Baroness Hale of Richmond, Lord Carswell
and Lord Brown of Eaton-under-Heywood agreed, again stressed the
importance of the creation or augmentation of risk in relation to the doctrine
of vicarious liability.
80 Maga v Archbishop of Birmingham [2010] 1 WLR 1441 is a case
D that bears a factual resemblance to Es case [2013] QB 722. The di›erence
is that employment was conceded. A claim was brought against the
Birmingham Archdiocese of the Roman Catholic Church in respect of sexual
abuse that had been committed by a priest, employed by the archdiocese,
upon the claimant when a boy. The claimant was not a Catholic and the
grooming that preceded the sexual abuse occurred in the course of youth
E work carried on by the priest for the benet of Catholics and non-Catholics
alike. None the less the Court of Appeal unanimously held that vicarious
liability was established. Giving the leading judgment Lord Neuberger of
Abbotsbury MR applied the close connection test, identifying a number of
factors that led to the test being satised. He further held that the material
increase of risk test applied in the Canadian cases was also satised.
81 Longmore LJ, concurring, also applied the close connection test,
F observing, at para 86, that McLachlin Js exposition of the law in Bazley v
Curry 174 DLR (4th) 45, including the material increase in risk test, was
highly relevant to the position of the priest.
82 For completion I should add that the High Court of Australia, when
considering whether a school authority could be vicariously liable for sexual
assault committed on a pupil by a teacher, has shown a bewildering variety
G of analysis: New South Wales v Lepore (2003) 212 CLR 511. Only
Gleeson CJ and Kirby J were prepared to consider following the approach of
the Canadian and English decisions.
Discussion
83 Sexual abuse of children is now recognised as a widespread evil and
the Criminal Records Bureau was established under Part V of the Police Act
H
1997 to reduce the risk of this by enabling screening of those seeking
positions involving greater contact with young people and vulnerable adults.
In the Lister case [2002] 1 AC 215, para 48, Lord Clyde said that cases of
sexual abuse by an employee should be approached in the same way as other
cases in the context of vicarious liability. None the less the courts have been
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26
(SC(E)) [2013] 2 AC
tailoring this area of the law by emphasising the importance of criteria that A
are particularly relevant to this form of wrong. In this way the courts have
succeeded in developing the law of vicarious liability so as to ensure that a
remedy for the harm caused by abuse is provided by those that should fairly
bear that liability.
84 Where those who have abused children have been members of a
particular church or religious order and have committed the abuse in the
B
course of carrying out activities in that capacity claimants have had di–culty
in establishing the conventional relationship of employer/employee. What
has weighed with the courts has been the fact that the relationship has
facilitated the commission of the abuse by placing the abusers in a position
where they enjoyed both physical proximity to their victims and the
inuence of authority over them both as teachers and as men of God.
85 The precise criteria for imposing vicarious liability for sexual abuse C
are still in the course of renement by judicial decision. Sexual abuse of
children may be facilitated in a number of di›erent circumstances. There is
currently concern at the possibility that widespread sexual abuse of children
may have occurred within the entertainment industry. This case is not
concerned with that scenario. It is concerned with the liability of bodies that
have, in pursuance of their own interests, caused their employees or persons
in a relationship similar to that of employees, to have access to children in D
circumstances where abuse has been facilitated.
86 Starting with the Canadian authorities a common theme can be
traced through most of the cases to which I have referred. Vicarious liability
is imposed where a defendant, whose relationship with the abuser put it in a
position to use the abuser to carry on its business or to further its own
interests, has done so in a manner which has created or signicantly E
enhanced the risk that the victim or victims would su›er the relevant abuse.
The essential closeness of connection between the relationship between the
defendant and the tortfeasor and the acts of abuse thus involves a strong
causative link.
87 These are the criteria that establish the necessary close connection
between relationship and abuse. I do not think that it is right to say that
creation of risk is simply a policy consideration and not one of the criteria. F
Creation of risk is not enough, of itself, to give rise to vicarious liability for
abuse but it is always likely to be an important element in the facts that give
rise to such liability.
This case
88 In this case both the necessary relationship between the brothers and G
the institute and the close connection between that relationship and the
abuse committed at the school have been made out.
89 The relationship between the brothers and the institute was much
closer to that of employment than the relationship between the priest and the
bishop in Es case [2013] QB 722. The institute was subdivided into a
hierarchical structure and conducted its activities as if it were a corporate
H
body. The brothers were subject to the directions as to their employment
and the general supervision of the provincial, their superior within that
hierarchical structure. But the relationship was not simply one akin to that
of employer and employee. The business and mission of the institute was the
common business and mission of every brother who was a member of it.
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27
(SC(E))
A 90 That business was the provision of a Christian education to boys. It

was to achieve that mission that the brothers joined and remained members
of the institute.
91 The relationship between the institute and the brothers enabled the
institute to place the brothers in teaching positions and, in particular, in the
position of headmaster at St Williams. The standing that the brothers
enjoyed as members of the institute led the managers of that school to
B comply with the decisions of the institute as to who should ll that key
position. It is particularly signicant that the institute provided the
headmasters, for the running of the school was largely carried out by
the headmasters. The brother headmaster was almost always the director of
the institutes community, living on the school premises. There was thus a
very close connection between the relationship between the brothers and the
C institute and the employment of the brothers as teachers in the school.
92 Living cloistered on the school premises were vulnerable boys. They
were triply vulnerable. They were vulnerable because they were children in
a school; they were vulnerable because they were virtually prisoners in the
school; and they were vulnerable because their personal histories made it
even less likely that if they attempted to disclose what was happening to
them they would be believed. The brother teachers were placed in the school
D to care for the educational and religious needs of these pupils. Abusing the
boys in their care was diametrically opposed to those objectives but,
paradoxically, that very fact was one of the factors that provided the
necessary close connection between the abuse and the relationship between
the brothers and the institute that gives rise to vicarious liability on the part
of the latter.
93 There was a very close connection between the brother teachers
E
employment in the school and the sexual abuse that they committed, or must
for present purposes be assumed to have committed. There was no Criminal
Records Bureau at the time, but the risk of sexual abuse was recognised, as
demonstrated by the prohibition on touching the children in the chapter in
the rule dealing with chastity. No doubt the status of a brother was treated
by the managers as an assurance that children could safely be entrusted to his
F care. The placement of brother teachers in St Williams, a residential school
in the precincts of which they also resided, greatly enhanced the risk of abuse
by them if they had a propensity for such misconduct.
94 This is not a borderline case. It is one where it is fair, just and
reasonable, by reason of the satisfaction of the relevant criteria, for the
institute to share with the Middlesbrough defendants vicarious liability for
the abuse committed by the brothers. I would allow this appeal.
G
Appeal allowed.
MS B L SCULLY, Barrister
181

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IN THE

LEGAL RESEARCH AND WRITING COURT OF FINAL APPEAL

Northampton Recruitment Ltd Appellant

Clive Bellman Respondent

Northampton Recruitment Ltd Appellant

Clive Bellman Respondent

[R#1] = List of Authorities of the Respondent, Tab 1

2. It is submitted that the appeal should be dismissed.

FACTS AND PROCEDURAL BACKGROUND

4. In the drinking session, work-related discussions came up. Bellman mentioned an

(ii) Major was performing his ordinary duty as a managing director.

15. Bellman’s challenge to Major’s lecture relating to managerial decisions may be

(i) Major oversaw all aspects of NR’s undertaking.

(ii) Major’s conduct in the lecture was relevant to his employment.

Dated this 8th day of April 2024.

CHEN TSZ YIU

Counsels for the Respondent

A MING AN INSURANCE CO (HK) LTD v RITZ-CARLTON LTD

Tort – Vicarious liability – Employer’s liability for unauthorised act of

Employment – Vicarious liability – Employer’s liability for unauthorised act

Held, allowing the appeal unanimously:

Other sources referred to H

Bokhary PJ: Introduction

4. Mr Lo sometimes acted as a ‘car jockey’. But the courts below A

A judgments against Mr Lo if, as the courts below concluded, the hotel

Reasoning of the courts below

The purpose of the journey

Test for vicarious liability

A Salmond test by the English Court of Appeal in Trotman v North Yorkshire

A 24. Fifthly and finally, the ‘close connection’ criterion impresses me as

Applying the ‘close connection’ criterion

A closeness of the connection between the employee’s duties and his

was explored by reference to various factors by reference to which the A

Bokhary PJ: 60. The Court is unanimous. What Seagroatt J ordered in

Reported by Francis Haddon-Cave

Yeung Mei Hoi

Cheung, Yuen and Chu JJA

Tort — vicarious liability — employer’s liability — unauthorised tortious

and D1’s unauthorised assault was closely connected to his

Cases cited in the judgment

Ling Man Kuen v Chow Chan Ming (unrep., DCPI 1445/2005,

The Judge’s finding

1) The close connection test

3.4 In Lister the claimants were residents in a boarding house

i) the employer is more likely to have the means to

3.6 In that case the defendants were respectively a lay Roman

Institute and the employment of the brothers as teachers in the

[35] As stated in Winfield & Jolowicz on Tort (16th ed., 2002)

4.2 Then at [42], he stated that:

[74] It is not easy to deduce from the Lister case [2002] 1 AC

attached to the creation of risk. This has, however, been

4.4 He then reviewed cases such as Dubai Aluminium Co Ltd

[86] Starting with the Canadian authorities a common theme

3) Examples of assault by employees

more liberal protection of innocent third parties. He further held

[39] In answering the question ‘does the prohibition limit the

5.2 The modern cases illustrated the trend. An example is

[18] Against that background I consider it artificial to say that

on, what happened next — immediately next — was

5.5 See further: Mattis v Pollock (trading as Flamingos

Consideration of this case

6.4 As to the case of Cheung Chak Fui, it is again important

Reported by Shin Su Wen

Mohamud v Wm Morrison Supermarkets plc

LLAW2017 Respondent's Bundle

LLAW2017 Respondent's Bundle

In settlement of the plaintiÕs claim to recover commission and other payments to