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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Thompson v The Renwick Group Plc [2014] EWCA Civ 635 (13 May 2014) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2014/635.html Cite as: [2014] 2 BCLC 97, [2014] EWCA Civ 635 |
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ON APPEAL FROM MANCHESTER COUNTY COURT
His Honour Judge Platts
2YL19601
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE TOMLINSON
and
LORD JUSTICE UNDERHILL
____________________
David Thompson |
Respondent |
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- and - |
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The Renwick Group plc |
Appellant |
____________________
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Robert Weir QC and Simon Plaut (instructed by Bond Dickinson LLP) for the Appellant
Hearing date : 2 April 2014
____________________
Crown Copyright ©
Lord Justice Tomlinson :
Introduction
The Facts
"15. The most obvious way this happened was that a senior manager from the Renwick Group's headquarters in Exeter was sent up to run the former Arthur Wood depot. He worked alongside Mr Wood for quite sometime and then he took over completely. I cannot recollect his name although I think it may have been double barrelled. [Subsequently Mr Thompson identified this person as Mr Rushton.]
16. I remember at this time being very pleased because I was provided with a new heavy goods vehicle to drive which was fully painted up in the Renwick Freight livery, which was yellow with a green beaver painted on the side. I even remember the make and registration number of the vehicle. It was an ERF lorry with the registration number WHD132R and I remember going to collect it from Brighouse in Yorkshire.
17. We were very much part of the Renwick Group then. If for example I took a delivery down to the Proctor and Gamble Factory in London when I had unloaded I would phone the depot and be told if there was a load for me to collect and return to Manchester with as obviously that would be preferable to the wagon returning to Manchester empty. There almost always would be something for me to go and collect often from what had been the other William Nuttall depot which was at East India Dock in London, which also became part of the Renwick Group. I would also often refuel the lorry at East India Dock.
18. I remember another incident when I had taken the Renwick liveried lorry down to Southampton and some colleagues were also there and we got caught in an unexpected docker's strike. Renwick Group, from their head quarters in Exeter as I recollect, arranged very kindly for a taxi to take me and my colleagues back to our homes over the weekend so that we could return and collect our lorries when the strike had ended.
19. I also remember that all the documentation we used, for example pick up notes were all changed so that they had the Renwick name on them.
20. I also remember that Renwick lorries from other depots would use what used to be the Arthur Wood yard and as stated, on many occasions I would attend other Renwick sites, typically in the South of England, to collect loads and bring them back up North.
. . .
22. I continued to work with asbestos, largely by virtue of doing overtime labouring work at the weekends as described above, throughout the period of time we were being absorbed into the Renwick Group."
Discussion
"In my judgment, the fact that a director of a company has been nominated to that office by a shareholder does not, of itself, impose any duty on the director owed to his nominator. The director may owe duties to his nominator if he is an employee or officer of the nominator, or by reason of a formal or informal agreement with his nominator, but such duties do not arise out of his nomination, but out of a separate agreement or office. Such duties cannot however, detract from his duty to the company of which he is a director when he is acting as such . ."
Also in point are three terse citations from the speech of Lord Lowry giving the advice of the Privy Council in Kuwait Asia Bank v National Mutual Life Nominees Ltd [1991] 1 AC 187. At page 217G Lord Lowry said this:-
"Two general principles may first be stated.
(1) A director does not by reason only of his position as director owe any duty to creditors or to trustees for creditors of the company.
(2) A shareholder does not by reason only of his position as shareholder owe any duty to anybody."
At 221F:-
"The liability of a shareholder would be unlimited if he were accountable to a creditor for the exercise of his power to appoint a director and for the conduct of the director so appointed. It is in the interests of the shareholder to see that directors are wise and that the actions of the company are not foolish; but this concern of the shareholder stems from self-interest and not from duty."
Finally at 223C:-
"An employer who is also a shareholder who nominates a director owes no duty to the company unless the employer interferes with the affairs of the company. A duty does not arise because the employee may be dismissed from his employment by the employer or from his directorship by the shareholder or because the employer does not provide sufficient time or facilities to enable the director to carry out his duties. It will be in the interests of the employer to see that the director discharges his duty to the company but this again stems from self-interest and not from duty on the part of the employer."
"74. I accept Mr Stuart-Smith's submission that Cape was not responsible for the actual implementation of health and safety measures at Cape Products. However, as Mr Weir points out, the problem in the present case was not due to non-compliance with recognised extraction procedures. It was due to dust in the atmosphere in the part of the Cowley Works in which Mr Chandler worked and which was not used for asbestos production. There is no evidence that what went wrong here was that Cape Products failed to maintain some dust extraction machines in the asbestos factory and in any event it is difficult to see how such machines could have avoided the escape of dust given the open sides of the factory. As the judge observed, the problem was systemic.
75. The configuration of the asbestos factory dated back to the time when Cape introduced its Pluto board manufacturing business into the Cowley Works. By installing its business there, it must have implicitly undertaken a duty of care to ensure that its business was carried on without risk to the employees in the other business of Cape Products carried on at the Cowley Works. In due course, it required Cape to purchase this business. Nonetheless, despite the sale, it maintained a certain level of control over the asbestos business carried on at Uxbridge. Products were for instance to be manufactured in accordance with its product specification. Product development, with a group chief chemist, was carried out in the Central Laboratory at Barking. Cape moreover had superior knowledge about the asbestos business. It was in a substantial way of business and its resources far exceeded those of Cape Products. Dr Smither was doing research into the link between asbestos dust and asbestosis and related diseases. He was also (if this label makes any difference) the group medical adviser of Cape.
76. Added to those factors was the role played by Dr Smither. Whether or not he was formally appointed group medical adviser in the relevant period, it is clear that he was engaged on research, based on empirical research done at Cape and its asbestos-producing subsidiaries, about the relationship between asbestos production and asbestosis. . . .
77. Cape concedes that the system of work at Cape Products was defective. The judge inevitably found as a fact -and there is no appeal from this – that Cape was fully aware of the "systemic failure" which resulted from the escape of dust from a factory with no sides. Cape therefore knew that the Uxbridge asbestos business was carried on in a way which risked the health and safety of others at Uxbridge, most particularly the employees engaged in the brick making business.
78. Given Cape's state of knowledge about the Cowley Works, and its superior knowledge about the nature and management of asbestos risks, I have no doubt that in this case it is appropriate to find that Cape assumed a duty of care either to advise Cape Products on what steps it had to take in the light of knowledge then available to provide those employees with a safe system of work or to ensure that those steps were taken. The scope of the duty can be defined in either way. Whichever way it is formulated, the injury to Mr Chandler was the result. As the judge held, working on past performance and viewing the matter realistically, Cape could, and did on other matters, give Cape Products instructions as to how it was to operate with which, so far as we know, it duly complied.
79. In these circumstances, there was, in my judgment, a direct duty of care owed by Cape to the employees of Cape Products. There was an omission to advise on precautionary measures even though it was doing research and that research had not established (nor could it establish) that the asbestosis and related diseases were not caused by asbestos dust. Moreover, while I have reached my conclusion in my own words and following my own route, it turns out that, in all essential respects, my reasoning follows the analysis of the judge in paragraphs 61 and 72 to 75 of his judgment."
"In summary, this case demonstrates that in appropriate circumstances the law may impose on a parent company responsibility for the health and safety of its subsidiary's employees. Those circumstances include a situation where, as in the present case, (1) the businesses of the parent and subsidiary are in a relevant respect the same; (2) the parent has, or ought to have, superior knowledge on some relevant aspect of health and safety in the particular industry; (3) the subsidiary's system of work is unsafe as the parent company knew, or ought to have known; and (4) the parent knew or ought to have foreseen that the subsidiary or its employees would rely on its using that superior knowledge for the employees' protection. For the purposes of (4) it is not necessary to show that the parent is in the practice of intervening in the health and safety policies of the subsidiary. The court will look at the relationship between the companies more widely. The court may find that element (4) is established where the evidence shows that the parent has a practice of intervening in the trading operations of the subsidiary, for example production and funding issues."
"The factors set out in (1)-(4), however, do not exhaust the possibilities and the case merely illustrates the way in which the requirements of Caparo v Dickman may be satisfied between the parent company, and the employee of a subsidiary."
"12. What happened in relation to his employment after David Hall Limited came under the umbrella, as he put it, of Renwicks in the way that I have indicated? Well as I have said, Mr Rushton came in to manage the business. There is no evidence as to who Mr Rushton was employed by whilst he was working at Woods depot. The claimant's evidence is as already set out in paragraph 15 of his witness statement. In his evidence to me he said this, 'I was told he had come up to look at the operation and put in better ways of working than we were used to.' Certainly it seems to me that Mr Rushton's role was to, first of all, work alongside Mr Wood and then gradually take over so, and in the words of the claimant, 'he became in complete control.'
13. The second change was that the claimant was given a new vehicle, a tractor unit with the Renwick livery clearly on it. It was an R registration so, as I understand it, it was a 1976 newly registered vehicle. It is not clear and there is no evidence as to who owned the vehicle, whether it was David Hall Limited or Renwick or on what basis it was bought. There is absolutely no evidence about that. However, it is an indication that Arthur Wood was now being run as part of The Renwick Group.
14. The documents that were used by the claimant, the delivery notes and collection notes, all became Renwick documents. There was increased collaboration, I accept, with other companies which were also operating under the Renwick umbrella, those to which I have made reference, Nuttalls and Renwicks in particular. I accept the evidence that lorries would thereafter collect from other company's yards, made deliveries for them in order to keep the vehicles as full as possible during their journeys.
15. I also accept that there was an incident where a taxi was arranged to take the claimant and other colleagues from Southampton back to Manchester after their work had been interrupted by a dock strike in Southampton. The evidence from the claimant is that that taxi was arranged by Renwicks in Exeter. He cannot give any more detail about that but I do accept that it is an indication of the way in which Renwicks were becoming or had become involved not only in the ownership of Arthur Wood Company but also in the day to day running and control, in particular in relation to the work of the claimant. Finally, as I have already indicated in passing, in 1978 the claimant tells me that the company, and I read from that Renwicks, consolidated the sites of Nuttalls, David Hall & Company and Arthur Woods to one site in Bury, a consolidation which led him to accept redundancy. On balance I accept again that that was done by or on behalf of the Renwick Group plc, the defendants."
(1) The paperwork, about which the judge made findings at paragraph 14;
(2) The taxi, about which the judge made findings at paragraph 14;
(3) The livery of Mr Thompson's new lorry, about which the judge made findings at paragraph 13;
(4) The extent to which the businesses of the subsidiaries appear to have been merged, about which the judge made findings at paragraph 14, so that if for example there was a load which needed to be carried by David Hall & Sons Ltd and another load for Nuttalls, which it was convenient to be picked up by the same lorry as performed the first delivery, Mr Thompson might find himself carrying both a Hall load and a Nuttalls' load on his lorry on the same day;
(5) The extent to which this co-operation extended in 1978 when the hub of operations of all three companies moved to Bury, with all subsidiaries operating from one depot, about which the judge made findings at paragraph 15.
Lord Justice Underhill :
Lord Justice Rimer :