(back to preceding text)

    69. In a passage which is unfortunately less often cited, however, Sir John Salmond (Salmond on Torts, 1st ed) continued his exposition as follows, 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 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 them."

This could, I think, usefully be elided to impose vicarious liability where the unauthorised acts of the employee are so connected with acts which the employer has authorised that they may properly be regarded as being within the scope of his employment. Such a formulation would have the advantage of dispensing with the awkward reference to "improper modes" of carrying out the employee's duties; and by focussing attention on the connection between the employee's duties and his wrongdoing it would accord with the underlying rationale of the doctrine and be applicable without straining the language to accommodate cases of intentional wrongdoing.

    70. But the precise terminology is not critical. The Salmond test, in either formulation, is not a statutory definition of the circumstances which give rise 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 closeness of the connection between the employee's duties and his wrongdoing and not to verbal formulae. This is the principle on which the Supreme Court of Canada recently decided the important cases of Bazley v Curry 174 DLR(4th) 45 and Jacobi v Griffiths 174 DLR(4th) 71 which provide many helpful insights into this branch of the law and from which I have derived much assistance.

    71. Cases of intentional wrongdoing have always proved troublesome. At one time it was thought that the employer could not be held vicariously liable for his employee's deliberate wrongdoing. This view was not maintained, but even as late as the beginning of the 20th century it was regarded as axiomatic that an employer could not be vicariously liable for his employee's dishonest acts unless they were committed for the benefit of his employer: see Cheshire v Bailey [1905] 1 KB 237 where the defendant was held not responsible for the theft of his customer's goods by his employee because the theft was outside the scope of his employment. As Salmon LJ explained in Morris v C W Martin & Sons Ltd [1966] 1 QB 716, 738-739, this view derived from a misunderstanding of what Willes J. had said in Barwick v English Joint Stock Bank (1867) LR 2 Exch 259, 265. Observing that no sensible distinction could be drawn between the case of fraud and any other wrong, he had stated that the general rule was 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 master's benefit, though no express command or privity of the master be proved" (my emphasis).

But this was very different, as Lord Macnaghten pointed out in Lloyd v Grace, Smith & Co [1912] AC 716, 732, from saying that a master cannot be liable for the fraud of his servant unless carried out for his benefit or with his privity. This may be a sufficient condition of liability, but it is not a necessary one.

    72. The heresy was not exposed until Lloyd v Grace, Smith & Co, and despite this has proved remarkably resilient. It took another 50 years until Morris v C W Martin & Sons Ltd [1966] 1 QB 716 for it to be recognised that Cheshire v Bailey [1905] 1 KB 237 was no longer good law; and regrettable traces of it appear in Trotman v North Yorkshire County Council [1999] LGR 584. If the employer is to be absolved from liability in that case (or this) it cannot be because the acts complained of were "independent acts of self-indulgence or self-gratification."

    73. In Lloyd v Grace, Smith & Co [1912] AC 716 a solicitor's managing clerk defrauded a client of the firm by obtaining her instructions to realise her property. He induced her to hand over the title deeds and to execute conveyances in his favour which he did not read over or explain to her. They enabled him to sell the property and pocket the proceeds. The firm was held liable for the fraud even though it was committed for the clerk's own benefit. In the course of argument before your Lordships in the present case it was accepted that the firm would not have been liable if the clerk had stolen the contents of his client's handbag. That is true, for the clerk would merely have been taking advantage of an opportunity which his employment gave him. But there was a much closer connection between the clerk's duties and his wrongdoing than that. The firm's liability arose from the fact that throughout the transaction the fraudulent clerk acted as the representative of the firm, and he received the custody of the documents of title with the consent of the client given because he was acting in that capacity.

    74. In the same year Laski (in "The Basis of Vicarious Liability" (1916) 26 Yale Law Journal 105, 130) had observed that there was no valid a priori reason why the doctrine of vicarious liability should cease to operate at that border where tort becomes crime. In England this had already been established: see Dyer v Munday [1895] 1 QB 742. Once this limitation on the operation of the doctrine is rejected, it is impossible to maintain the fiction that it is based on any kind of implied authority. An excessively literal application of the Salmond test must also be discarded. Stealing a client's property cannot sensibly be described as an unauthorised mode of dealing with it on her behalf. It is, as Butler-Sloss LJ put it in Trotman v North Yorkshire County Council [1999] LGR 584, 591, the negation of the employer's duty. Yet the employer may be liable nonetheless.

    75. In Morris v C W Martin & Sons Ltd [1966] 1 QB 716 a firm of cleaners was held vicariously liable to a customer whose fur was stolen by one of its employees. The firm was a sub-bailee for reward, but the decision was not based on the firm's own failure to take care of the fur and deliver it upon termination of the bailment. It was held vicariously liable for the conversion of the fur by its employee. Diplock LJ said, at p. 737, that he based his decision:

"on the ground that the fur was stolen by the very servant whom the defendants as bailees for reward had employed to take care of it and clean it" (my emphasis).

Salmon LJ too, at p 740, was anxious to make it plain that the conclusion which he had reached depended on the fact that the thief was

"the servant through whom the defendants chose to discharge their duty to take reasonable care of the plaintiff's fur."

He added, at pp 740-741, that

"A bailee for reward is not answerable for a theft by any of his servants but only for a theft by such of them as are deputed by him to discharge some part of his duty of taking reasonable care. A theft by any servant who is not employed to do anything in relation to the goods bailed is entirely outside the scope of his employment and cannot make the master liable."

The employee's position gave him the opportunity to steal the fur, but as Diplock LJ was at pains to make clear, at p. 737, this was not enough to make his employer liable. What brought the theft within the scope of his employment and made the firm liable was that in the course of its business the firm had entrusted him with the care of the fur, and he stole it while it was in his custody as an employee of the firm.

    76. As my noble and learned friend Lord Steyn has observed, Morris v Martin has consistently been held to be an authority on vicarious liability generally and not confined to cases of bailment. The case was expressly approved by the Privy Council in Port Swettenham Authority v T W Wu & Co (M) Sdn Bhd [1979] AC 580, 591, not altogether surprisingly as the opinion of the Board was delivered by Lord Salmon. That was another case of bailment. But in Photo Production Ltd v Securicor Transport Ltd [1980] AC 827, where a patrolman employed by a security firm deliberately set fire to the premises he was employed to protect, neither Lord Wilberforce nor Lord Salmon saw any difficulty in holding the employer vicariously liable on the principle stated in Morris v Martin. That was not a case of bailment. Yet the patrolman was said (per Salmon LJ, at p 852) to be "indubitably acting in the course of his employment."

    77. Just as an employer may be vicariously liable for deliberate and criminal conduct on the part of his employee, so he may be vicariously liable for acts of the employee which he has expressly forbidden him to do. In Ilkiw v Samuels [1963] 1 WLR 991 a lorry driver was under strict instructions from his employers not to allow anyone else to drive the lorry. He allowed a third party, who was incompetent, to drive it without making any inquiry into his competence to do so. The employers were held vicariously liable for the resulting accident. Diplock LJ explained, at p. 1004, that some prohibitions limited the sphere of employment and others only dealt with conduct within the sphere of employment. In order to determine into which category a particular prohibition fell it was necessary to determine what would have been the sphere, scope, or course (nouns which he considered to amount to the same thing) if the prohibition had not been imposed. In a passage which is of some importance in the present case, he added:

"As each of these nouns implies, 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 - by asking: what was the job on which he was engaged for his employer? and answering that question as a jury would."

He reasoned that the job which the driver was engaged to perform was to collect a load of sugar and transport it to its destination, using for that purpose his employers' lorry, of which he was put in charge. He was expressly forbidden to permit anyone else to drive the lorry in the course of performing this job. That was not a prohibition which limited the scope of his employment, but one which dealt with his conduct within the sphere of his employment.

    78. The case was followed in Rose v Plenty [1976] 1 WLR 141 where despite strict instructions not to do so a milk roundsman employed a boy to help him deliver milk and let him accompany him on his float. The employer was held liable for injuries sustained by the boy when he fell off the float as a result of the roundsman's negligent driving. Scarman LJ agreed that the roundsman was certainly not employed to give the boy a lift, and that if one confined one's analysis of the facts to the incident which caused injury to the boy, then it could be said that carrying the boy on the float was not in the course of his employment. But quoting with approval, at pp 147-148 the passage cited above from the judgment of Diplock LJ in Ilkiw v Samuels [1963] 1 WLR 991, 1004 he adopted a broad approach to the nature of the roundsman's employment. His job was to deliver milk, collect empties, and obtain payment. Disregarding his instructions he enlisted the boy's assistance in carrying out his job. If one asked: why was the boy on the float? the answer was that it was because he was assisting the roundsman to do his job.

    79. So it is no answer 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 exclusively for his own benefit, or that he was acting contrary to express instructions, or that his conduct was the very negation of his employer's duty. The cases show that where an employer undertakes the care of a client's property and entrusts the task to an employee who steals the property, the employer is vicariously liable. This is not only in accordance with principle but with the underlying rationale if Atiyah has correctly identified it. Experience shows that the risk of theft by an employee is inherent in a business which involves entrusting the custody of a customer's property to employees. But the theft must be committed by the very employee to whom the custody of the property is entrusted. He does more than make the most of an opportunity presented by the fact of his employment. He takes advantage of the position in which the employer has placed him to enable the purposes of the employer's business to be achieved. If the boys in the present case had been sacks of potatoes and the defendant, having been engaged to take care of them, had entrusted their care to one of its employees, it would have been vicariously liable for any criminal damage done to them by the employee in question, though not by any other employee. Given that the employer's liability does not arise from the law of bailment, it is not immediately apparent that it should make any difference that the victims were boys, that the wrongdoing took the form of sexual abuse, and that it was committed for the personal gratification of the employee.

    80. Employers have long been held vicariously liable in appropriate circumstances for assaults committed by their employees. Clearly an employer is liable where he has placed the employee in a situation where he may be expected on occasions to have to resort to personal violence: see Dyer v Munday [1895] 1 QB 742, where the employer was held vicariously liable for a criminal assault committed by his employee while attempting to repossess his employer's property. Equally clearly the employer is not liable for an assault by his employee on a customer merely because it was the result of a quarrel arising out of his employment: see Warren v Henlys Ltd [1948] 2 All ER 935, where a petrol pump attendant assaulted a customer as a result of a dispute over payment. The case was decided partly on the ground that the customer had paid for the petrol and was driving away when he was assaulted, and partly on the ground that he was assaulted because he had threatened to report the attendant to his employer. The reasoning has been criticised, and 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. Attention must be concentrated on the closeness of the connection between the act of the employee and the duties he is engaged to perform broadly defined.

    81. In Deatons Pty Ltd v Flew (1949) 79 CLR 370 the owner of a hotel was held not to be vicariously liable for an unprovoked assault by a barmaid who threw a glass of beer into a customer's face. The ground of decision was that the barmaid was not in charge of the bar - the publican was close at hand - and she did not throw the glass in the course of maintaining discipline or restoring order. In the words of Dixon J, at pp 381-382 it was:

"an act of passion and resentment done neither in furtherance of the master's interests nor under his express or implied authority nor as an incident to or in consequence of anything the barmaid was employed to do. It was a spontaneous act of retributive justice. The occasion for administering it and the form it took may have arisen from the fact that she was a barmaid but retribution was not within the course of her employment as a barmaid" (my emphasis).

In other words, the barmaid's employment gave her the opportunity to wreak some personal vengeance of her own, but that was all; and it was not enough to make her employer liable. Had she been in charge of the bar and authorised to maintain order, the result might well have been different. It would not, in my opinion, have been enough in itself to exclude the employer's liability that she had been paying off a private score of her own. If so, then there is no a priori reason why an employer should not be vicariously liable for a sexual assault committed by his employee, though naturally such conduct will not normally be within the scope of his employment.

    82. In the present case the warden's duties provided him with the opportunity to commit indecent assaults on the boys for his own sexual gratification, but that in itself is not enough to make the school liable. The same would be true of the groundsman or the school porter. But there was far more to it than that. The school was responsible for the care and welfare of the boys. It entrusted that responsibility to the warden. He was employed to discharge the school's responsibility to the boys. For this purpose the school entrusted them to his care. He did not merely take advantage of the opportunity which employment at a residential school gave him. He abused the special position in which the school had placed him to enable it to discharge its own responsibilities, with the result that the assaults were committed by the very employee to whom the school had entrusted the care of the boys. It is not necessary to conduct the detailed dissection of the warden's duties of the kind on which the Supreme Court of Canada embarked in Bazley and Jacobi. I would hold the school liable.

    83. I would regard this as in accordance not only with ordinary principle deducible from the authorities but with the underlying rationale of vicarious liability. Experience shows that in the case of boarding schools, prisons, nursing homes, old people's 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.

    84. I would hold the school vicariously liable for the warden's intentional assaults, not (as was suggested in argument) for his failure to perform his duty to take care of the boys. That is an artificial approach based on a misreading of Morris v Martin. The cleaners were vicariously liable for their employee's conversion of the fur, not for his negligence in failing to look after it. Similarly in Photo Production v Securicor Transport Ltd the security firm was vicariously liable for the patrolman's arson, not for his negligence. The law is mature enough to hold an employer vicariously liable for deliberate, criminal wrongdoing on the part of an employee without indulging in sophistry of this kind. I would also not base liability on the warden's failure to report his own wrongdoing to his employer, an approach which I regard as both artificial and unrealistic. Even if such a duty did exist, on which I prefer to express no opinion, I am inclined to think that it would be a duty owed exclusively to the employer and not a duty for breach of which the employer could be vicariously liable. The same reasoning would not, of course, necessarily apply to the duty to report the wrongdoing of fellow employees, but it is not necessary to decide this.