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Cite as: [1942] UKHL 2, [1942] AC 509

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JISCBAILII_CASE_TORT

    Die Mercurii, 4° Martii, 1942

    Parliamentary Archives,
    HL/PO/JU/4/3/970

    Lord
    Chancellor

    Lord
    Wright

    Lord
    Romer

    Lord
    Porter

    THE CENTURY INSURANCE COMPANY, LIMITED

    v.
    NORTHERN IRELAND ROAD TRANSPORT BOARD

    The Lord Chancellor

    MY LORDS,

    In this Appeal I should be well content to adopt the unanimous
    judgments delivered in the Court of Appeal in Northern Ireland,
    which appear to me to provide a conclusive answer to the argument
    for the Appellants. The material facts giving rise to the litigation
    are conveniently set out in the judgment of Lord Chief Justice
    Andrews. They may be summarised as follows:—

    The Respondents were insured by the Appellant Company against
    liability to third parties arising from damage to property caused by
    the use by them of a petrol tanker belonging to the Respondents.
    On August 2nd, 1937, this tanker, which was being driven by their
    employee, one Davison, had taken on board a consignment of 300
    gallons of petrol at the Larne Depot of Holmes, Mullin and Dunn,
    Ltd., for delivery into the storage tank of one Catherwood, a garage
    proprietor, of Belfast. Davison drove the tanker to Belfast, backed
    it into Catherwood's garage, inserted the nozzle of the delivery
    hosepipe into the manhole of Catherwood's tank and turned on the
    stopcock at the side of the tanker. While the petrol was flowing
    from the tanker into the tank, Davison lighted a cigarette and threw
    away the lighted match. The match ignited some material on the
    floor of the garage and a fire was caused forthwith where the nozzle
    of the delivery hose was discharging into the tank. Catherwood
    seized a fire extinguisher and started to play it on the fire which
    appeared at the manhole, at the same time shouting to Davison to
    turn off the stopcock. Davison did not do so, or attempt to do so,
    but started up the tanker and drove it out of the garage until the
    fore wheels had about reached the water channel in the street.
    Davison then stopped the tanker and jumped down to the ground.
    The fire, although extinguished at the manhole by Catherwood,
    pursued the trailing hose and the escaping petrol, and Davison had
    barely reached the ground when a very violent explosion occurred.
    The explosion destroyed the tanker, the motor car of Catherwood
    which was parked in the street, and also damaged several houses
    which were the property of other parties. The claims in respect of
    the motor and houses were settled for £1,001 16s. 7d., which was
    paid by the Appellants without prejudice to their ultimate rights.

    One of the grounds on which the Appellants resisted the claim of
    the Respondents under the policy was that, in view of the terms of
    an Agreement of October nth, 1934, between the Respondents or
    their predecessors and Messrs. Holmes, Mullin and Dunn, Ltd., the
    liability for the damage did not rest upon the Respondents at all.
    By Clause I of this Agreement the Respondents, when requested to
    do so by Holmes and Co., were bound to deliver petroleum spirit
    which Holmes and Co. had for disposal to any destination within
    Northern Ireland. The delivery was to be by tank lorries at an
    agreed scale of freights. The lorries were to be loaded at the instal-
    lation of Holmes and Co. at Larne, and the Respondents were to
    keep sufficient tank lorries at Larne to transport all the spirit which
    might be given to them for delivery. The Respondents were to keep
    the spirit, while in transit, insured against fire and spillage and were
    to dress all their employees engaged in such delivery in such
    uniforms as Holmes and Co. might direct. The Respondents under-
    took to effect all necessary insurances under the Workmen's Com-
    pensation Acts and to be accountable to Holmes and Co. for the
    product entrusted to them for delivery. The Clause of the Agree-
    ment mainly relied upon by the Appellants as establishing that, at
    the time of the accident, Davison was the servant, not of the


    2 [2]

    Respondents, but of Holmes and Co., is Clause 9. It provided that
    all the employees of the Respondents engaged in or about such
    delivery should accept and obey the orders of Holmes and Co.
    regarding such delivery, the payments of accounts and all matters
    incidental thereto, and that the Respondents should dismiss any
    employee disregarding or failing to obey such orders. There
    followed the proviso that nothing contained in the Clause should be
    taken as implying that such employees were in any way the
    employees of Holmes and Co.

    The dispute as to whether, in these circumstances, the Appellants
    were liable under the policy was referred to the arbitration of Mr.
    Lowry, K.C., and the learned arbitrator stated his award in the form
    of a Special Case. Of the questions formulated in the Special Case,
    only two are now in issue, viz.:

    1. Was Davison at the time of the accident acting as the
      servant of the Respondents or of Holmes and Co. ?

    2. Was the admittedly careless act of Davison in lighting
      a cigarette and throwing the match on the floor of the garage
      an act done in the course of his employment as such servant,
      for the consequences of which his master was responsible ?

    The learned arbitrator himself, subject to the Special Case,
    answered the first question by saying that Davison was at the time
    of the accident acting as the servant of the Respondents and the
    second question in the affirmative. Mr. Justice Brown, before
    whom the Special Case came, was of a different opinion as regards
    the first question, and held that Davison was at the relevant moment
    the servant of Holmes and Co. He agreed with the arbitrator
    as to the answer to the second question. The Court of Appeal in
    Northern Ireland (Andrews L.C.J., Babington L.J., and Murphy
    L.J.) unanimously reversed Brown J. on the first question and
    affirmed the answers arrived at by the arbitrator. As I have
    already indicated, I think that the conclusion reached by the Court
    of Appeal was right. In view of the full and careful argument
    presented to this House by Mr. Macaskie, I add the following
    observations.

    Before this House, the Appellants limited themselves to arguing
    the two questions set out above.

    As to the first question, no one disputes the proposition that
    a man may be in the general employment of X. and yet at the
    relevant moment, as the result of arrangements made between X.
    and a third party, may be the servant of the third party so as to
    make the third party and not X. responsible for his negligence.
    And I agree that the test to be applied is the test formulated by
    Bowen L.J. in Donovan v. Laing, etc., Syndicate [1893] 1 Q.B. 629,
    at p. 633, viz., " in whose employment the man was at the time
    " when the acts complained of were done, in this sense, that by
    " the employer is meant the person who has a right at the moment
    " to control the doing of the act." If it were true that the effect
    of the written agreement under which the Board's petrol tanker
    was to carry and deliver Holmes & Co.'s petroleum spirit to its
    destination was to lend the vehicle and its driver to Holmes & Co.,
    it might well be that while making delivery at the garage Davison
    was not acting as the servant of the Respondents but as the servant
    of Holmes & Co. Bowen L.J., in Moore v. Palmer, 2 T.L.R. 781,
    at p. 782, emphasised that "the great test was this, whether the
    " servant was transferred, or only the use and benefit of his work."
    But, as Lord Chief Justice Andrews observes, the provisions of
    the agreement point irresistibly to the conclusion that the Agree-
    ment was one of carriage and delivery to be performed by the
    predecessors of the Respondents with their own servants: it was
    not a contract for the hiring out of lorries and men, or of

    [3] 3

    lending them to Holmes & Co. to enable them to effect delivery.
    Clause 9 of the Agreement does not, in my opinion, run counter
    to this view. The provision that the Transport Co.'s employees
    shall accept and obey the orders of Holmes & Co. regarding
    delivery means that they shall carry out delivery orders, not that
    at some moment of the transit and delivery (Mr. Macaskie prefers
    to fix the moment no later than the time when they take on their
    load of spirit at Lame) they became servants of Holmes & Co.
    In truth, the position of the Respondents under the contract is
    not that of people who lend vehicles and drivers for the hirers to
    direct, but of independent contractors who undertake by the use
    of their own vehicles and by the activities of their own servants
    to produce the results, i.e., the deliveries, as ordered by Holmes
    & Co. The decision of the Court of Appeal, overruling Brown J.
    on this matter, cannot be successfully impeached.

    On the second question, every judge who has had to consider
    the matter in Northern Ireland agrees with the learned Arbitrator
    in holding that Davison's careless act which caused the conflagra-
    tion and explosion was an act done in the course of his employ-
    ment. Admittedly he was serving his master when he put the
    nozzle into the tank and turned on the tap. Admittedly he would
    be serving his master when he turned off the tap and withdrew
    the nozzle from the tank. In the interval, spirit was flowing from
    the tanker to the tank, and this was the very delivery which the
    Respondents were required under their contract to effect. Davison's
    duty was to watch over the delivery of the spirit into the tank, to
    see that it did not overflow, and to turn off the tap when the proper
    quantity had passed from the tanker. In circumstances like these,
    " they also serve who only stand and wait." He was presumably
    close to the apparatus, and his negligence in starting smoking and
    in throwing away a lighted match at that moment is plainly negli-
    gence in the discharge of the duties upon which he was employed
    by the Respondents. This conclusion is reached on principle and
    on the evidence, and does not depend upon finding a decided
    case which closely resembles the present facts. But the decision
    of the English Court of Appeal twenty years ago in Jefferson v.
    Derbyshire Farmers, Ltd. [1921] 2 K.B. 281, provides a very close
    parallel. As for the majority decision, nearly 60 years before
    that, of the Exchequer Chamber in Williams v. Jones, 3 H. & C.
    602, it may be possible to draw distinctions, as the court in
    Jefferson's case sought to do. But this House is free to review the
    earlier decision, and for my part I prefer the view expressed in that
    case by the minority, which consisted of Blackburn J. and Mellor J.
    The second question must also be answered adversely to the
    Appellants.

    I move that the Appeal be dismissed with costs.

    The Lord Chancellor :

    My Lords, I am authorised by my noble and learned friend
    Lord Romer, who is not able to be present this morning, to say
    that he concurs in this Opinion.

    Lord
    Chancellor

    Lord
    Wright

    Lord
    Romer

    Lord
    Porter

    [4]
    CENTURY INSURANCE COMPANY, LIMITED

    v.
    NORTHERN IRELAND ROAD TRANSPORT BOARD


    Lord Wright


    MY LORDS,

    The main issue in this case is whether the Respondents were
    liable for the rash and careless act of their lorry driver Davison
    in striking a match to light his cigarette, and throwing it on
    the floor of the garage, while he was engaged in the process of
    transferring from the tank lorry a consignment of petrol into the
    underground tank at Catherwood's garage at Belfast. The
    Respondents' case is that they were liable, and on this they based
    their claim to recover under the policy of insurance issued to them
    by the Appellants, Section II of which deals with Liability to
    Third Parties. There was a separate claim not here material
    by the Respondents for the destruction of their lorry. The
    questions in debate in regard to the third party liability
    were (1) whether at the material time Davison was the servant of
    the Respondents or of Holmes Mullin and Dunn, Ltd., with whom
    the Respondents had a running contract lor the carriage and
    delivery of petrol in their tank lorries; (2) whether, if Davison was
    the servant of the Respondents, his act in lighting his cigarette
    was in the circumstances an act of negligence in the course of his
    employment in the Respondents' service, involving the liability of
    the Respondents to compensate the various parties whose property
    was injured by the explosion which resulted from Davison's rash
    act, including Catherwood, whose garage was damaged and whose
    car was destroyed, and the owners of adjoining premises affected
    by the accident. I am only referring to the claims under Section II
    of the policy.

    The dispute came in the first instance before a learned Arbitrator,
    who stated his award in the form of a Special Case for the opinion
    of the Court. His own decision on both points was in favour of
    the Respondents. The question thus is whether the arbitrator was,
    on the facts stated in the award, wrong in law in so deciding. His
    award was set aside by Brown J. on the ground that Davison was
    the servant of Holmes Mullin and Dunn, Ltd., at the material
    time, so that the Respondents were not liable for his act.
    The Judge agreed that, if he was then the servant of the
    Respondents, his act in lighting his cigarette was in the circum-
    stances an act done in the course of his employment. The judg-
    ment of Brown J. was unanimously reversed by the Court of
    Appeal, who upheld the arbitrator's award. The Appellant com-
    pany appeals.

    My noble and learned friend the Lord Chancellor has stated
    the facts. I agree with his reasoning and conclusions, and I may
    add with the judgments of the Lord Chief Justice and the Lords
    Justices. I should be content simply to express my concur-
    rence with the Lord Chief Justice's convincing judgment. I add a
    few words merely on the two questions of law.

    First of all comes the question in whose employment Davison
    was. This problem and its decision have produced a good many
    reported cases in the books. In McCartan v. Belfast Harbour
    Commissioners,
    1911, 2 I.R. 143, this House emphatically stated
    that it is a question of fact how the maxim respondent superior is
    to be applied in any particular case of this character. The problem
    is to determine who is the " superior " in the particular instance.
    Lord Dunedin said categorically that the facts of one case can

    [5] 2

    never rule another case and are only useful so far as similarity of
    facts (for identity, the word so often used, is really a convenient
    misnomer) are a help and guide to decision. But all
    the same, it has been sought to find some general idea, or
    perhaps mere catchword, which may serve as a clue to solve the
    problem, and for this purpose the idea or the word " control"
    has been introduced. Thus Lord Dunedin in Bain v. Central
    Vermont Railway Co.,
    1921, 2 A.C. 412 at p. 416 quotes the
    following language of Bowen L.J. in Donovan v. Laing Syndi-
    cate,
    1893, 1 Q.B. 629, at p. 639. " We have only to consider in
    " whose employment the man was at the time when the acts com-
    " plained of were done, in this sense, that by the employer is meant
    " the person who has a right at the moment to control the doing
    " of the act". If that were a complete statement of what Bowen
    L.J. said, I should be driven to question whether it was not too
    vague and indeterminate to afford any useful guidance. But Bowen
    L.J. did not stop there. Indeed Lord Dunedin merely gives the
    quotation as the first sentence of what Bowen L.J. said. The Lord
    Chief Justice in the present case quotes the remainder of the pass-
    age and this indicates that the word " control" needs explana-
    tion and gives some notion of what is necessary before one
    man's servant becomes pro hac vice the servant of another man.
    It seems to be assumed in all these cases, no doubt rightly, that the
    man acquiesces in the temporary change of master, though that
    may have consequences to him in regard to wages, workmen's
    compensation, common employment and the like. Bowen L.J.
    completes his statement thus: " There are two ways in which
    " a contractor may employ his men and his machines. He may
    " contract to do the work and, the end being prescribed, the means
    " of arriving at it may be left to him. Or he may contract in a
    " different manner, and, not doing the work himself, may place his
    " servants and plant under the control of another—that is, he may
    " lend them—and in that case he does not retain control over the
    " work". It was held on the facts of that case, that the latter
    description applied. In his judgment in Moore v. Palmer, 2
    T.L.R. 781, Bowen L.J. states a more concise criterion: "The
    " test is this, whether the servant was transferred or only
    " the use and benefit of his work". Control is not here
    taken as the test. There are many transactions and relation-
    ships in which a person's servant is controlled by another
    person in the sense that he is required to obey the latter's
    directions. Such was the case of Quarman v. Burnett, 6 M. &
    W. 499. Its authority has never been questioned. The Defendants
    there were sued for the negligent driving of a coachman employed
    by a jobmaster, who had contracted with the Defendants, who were
    two ladies, to send horses and a driver for their coach. It is
    clear that the ladies were intended to direct the times when and the
    places to and from which they took their drives. That was cer-
    tainly a measure of control, but what, it was held, was there
    transferred was the use and benefit of the coachman's work.
    The coachman did not become the servant of the Defendants.
    Instances of this sort are common. In McCartan's case (supra)
    the use and benefit of the Harbour Company's crane and its driver
    were transferred. The driver of necessity had to obey the direc-
    tions as to lowering and hoisting given by those conducting
    the operation, but it was held that there was no transfer of
    employment. Another illustration is afforded by Cameron v.
    Nystrom,
    1893 AC 308. The question there was whether steve-
    dores could plead the defence of common employment against
    a servant of the shipowner whose vessel they were dis-
    charging. The Plaintiff had been injured by the negligence
    of one of the shipowner's servants. It was held that there
    was no common employment because the negligent employee
    had not become the shipowner's servant. No doubt he had

    3 [6]

    in many respects to obey the directions of the shipowners. Lord
    Herschell, however, thus summed up the position: 'There was
    " no express agreement with regard to the extent to which the
    " master and mate should have control over them [sc. the steve-
    " dore's servants]. That control is only to be implied from the
    " circumstances in which they were employed. The relation of
    " stevedore to shipowner is a well-known relation, involving no
    " doubt the right of the master of the vessel to control the order in
    " which the cargo should be discharged, and various other incidents
    " of the discharge, but in no way putting the servants of the steve-
    " dores so completely under the control and at the disposition of
    " the master as to make them the servants of the shipowner, who
    " neither pays them, nor selects them, nor could discharge them, nor
    " stand in any other relation to them than this, that they are the
    " servants of a contractor employed on behalf of the ship to do a
    " particular work ". Lord Herschell there emphasises that it is the
    extent of control which is material to be considered. But he also
    stresses the other elements which make up the relationship of
    master and servant and which have to be considered before it
    can be held that there has been a transfer of the man's service from
    his general employer to the other who is said to be his temporary
    employer. It is, I think, clear that the presumption is all against
    there being such a transfer. Most cases can be explained on
    the basis of there being an understanding that the man is to obey
    the directions of the person with whom the employer has a contract,
    so far as is necessary or convenient for the purpose of carrying
    out the contract. Where that is the position the man who receives
    directions from the other person does not receive them as a servant
    of that person, but receives them as servant of his employer.
    Where the contract is a running contract, for the rendering of
    certain services over a period of time, the places where, and the
    times at which, the services are to be performed, being left to
    the discretion (subject to any contractual limitations) of the other
    contracting party, there must be someone who is to receive the
    directions as to performance from the other party, and they are
    given to the employer, whether he receives them personally or by a
    clerk or by the servant who is actually sent to do the work. That I
    think is the position here. The contract is of a character very com-
    mon between the owner of lorries or other vehicles and one who
    wants to hire them for the conveyance of his goods. In principle
    the facts here are indistinguishable from those in Quarman v.
    Burnett (supra). Davison was subject to the control of Holmes
    Mullin and Dunn, Ltd., only so far as was necessary to enable
    the Respondents to carry out their contract. In doing so he
    remained the Respondents' servant. They paid him and alone
    could dismiss him. Even in acting on the directions of Holmes
    Mullin and Dunn, Ltd., he was bound to have regard to para-
    mount directions given by the Respondents and was to safeguard
    their paramount interests. This appears from the course of busi-
    ness followed, and is confirmed by the agreement dated the 11th
    October, 1934, made between Holmes Mullin and Dunn, Ltd.,
    and the Respondents' predecessor in title, in whose shoes it is
    admitted that the Respondents stand. It is a contract which
    was intended to remain in force and has remained in force
    over a period of years, and provided for the carriage of
    petrol or like products to any destination within Northern
    Ireland at the request of Holmes" Mullin and Dunn, Ltd. Clause
    9 provides that the employees of the Respondents or their
    predecessors engaged in the delivery should accept the orders of
    Holmes Mullin and Dunn, Ltd., " regarding such delivery, the pay-
    " ment of accounts and all matters incidental thereto ". These are
    just the matters in respect of which, for the convenient performance
    of the contract, the lorrymen employed would naturally be required
    to obey the wishes of those for whom the petrol was being carried.

    [7] 4

    I do not find anything in the rest of the agreement to lead to any
    other conclusion. It is not, however, necessary to make any nice
    examination of its terms. A question of this sort must be decided
    on the broad effect of the contract. I do not attach any decisive
    effect to the proviso to Clause 9 that nothing in the agreement is to
    be construed to mean that the Respondents' employees are to be
    taken as employees of Holmes Mullin and Dunn, Ltd., because it
    could not bind third parties. I think on the whole the agreement
    goes to support the view that the parties did not contemplate that
    what the agreement stipulated should involve any transference of
    servants, as contrasted with transference of service.

    Each case of this character must be decided on its particular facts.

    I therefore do not think it necessary to refer to any other of the
    cases which have been cited. In the great majority the conclusion
    has been against the servants being transferred from the general
    employer. Nor do I consider the cases where a man has been held
    to have become the servant of someone who was not otherwise his
    employer, by voluntarily doing work for him.

    On the other question, namely, whether Davison's negligence
    was in the course of his employment, all the decisions below have
    been against the Appellants. I agree with them and need add little.

    The act of a workman in lighting his pipe or cigarette is an act
    done for his own comfort and convenience and, at least generally
    speaking, not for his employer's benefit. But that last condition
    is no longer essential to fix liability on the employer (Lloyd v.
    Grace Smith and Co.,
    1912 AC 716). Nor is such an act prima facie
    negligent. It is in itself both innocent and harmless. The negli-
    gence is to be found by considering the time when and the circum-
    stances under which the match is struck and thrown down. The
    duty of the workman to his employer is so to conduct himself in
    doing his work as not negligently to cause damage either to the
    employer himself or his property or to third persons or their
    property, and thus to impose the same liability on the employer as
    if he had been doing the work himself and committed the negligent
    act. This may seem too obvious as a matter of common sense to
    require either argument or authority. I think what plausibility the
    contrary argument might seem to possess results from treating the
    act of lighting the cigarette, in abstraction from the circumstances,
    as a separate act. This was the line taken by the majority judg-
    ment in Williams v. Jones, 3 H. & C. 602. But Mellor and Blackburn
    JJ. dissented, rightly as I think. I agree also with the decision of
    the Court of Appeal in Jefferson v. Derbyshire Farmers, Ltd, 1921,

    2 K.B. 281, which is in substance on the facts indistinguishable
    from the present case.

    In my judgment the appeal should be dismissed.

    Lord Porter

    My Lords, I agree with the speeches just delivered by the noble
    and learned Lords who have preceded me, and would dismiss the
    appeal.

    (18432) Wt. 8142—33 20 3/42 D.L. G. 338


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