Hollis v Vabu Pty Ltd

• Jurisdiction: Australia Federal only
• Judge: Gleeson CJ,Gaudron,Gummow,Kirby,Hayne JJ,McHugh J,Callinan J
• Judgment Date: 09 August 2001
• Neutral Citation: 2001-0809 HCA C,[2001] HCA 44
• Court: High Court
• Docket Number: S149/2000
• Date: 09 August 2001

[2001] HCA 44

HIGH COURT OF AUSTRALIA

Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ

S149/2000

Gary John Hollis

Appellant

and

Vabu Pty Limited trading as Crisis Couriers

Respondent

Representation:

G B Hall QC with S Norton for the appellant (instructed by Brydens Law Office)

D F Jackson QC with W S Reynolds and J J Ryan for the respondent (instructed by Henry Davis York)

Hollis v Vabu Pty Ltd t/as Crisis Couriers

Negligence — Vicarious liability — Employee or independent contractor — Control — Bicycle courier negligently injured plaintiff — Bicycle courier wearing defendant's uniform but otherwise unidentified — Whether defendant vicariously liable for courier's negligence — Whether relationship between bicycle courier and defendant one of employment or independent contract — Whether bicycle courier is agent carrying out activity as principal's authorised representative dealing with third party.

Employer and employee — Independent contractor — Bicycle courier and courier company — Whether bicycle courier's relationship is that of employment or independent contract.

Words and phrases — ‘agent’, ‘employee’, ‘independent contractor’, ‘vicarious liability’.

ORDER

1. Appeal allowed with costs.

2. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales of 5 November 1999. In place thereof order that the appeal to that Court be allowed with costs, the verdict and orders of the District Court of New South Wales be set aside and that judgment be entered for the appellant in the sum of $176,313.00 with costs.

1 Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ. This appeal involves issues respecting the nature of the relationship of employment and the scope of the doctrine of vicarious liability. The appellant, Mr Hollis, appeals against the decision of the New South Wales Court of Appeal (Sheller and Giles JJA; Davies AJA dissenting) 1. That Court dismissed his appeal from the decision at trial in the District Court (Wright ADCJ) returning a verdict for the defendant, the present respondent (‘Vabu’), in the action by Mr Hollis for damages for personal injury.

The facts

2 Vabu at all material times conducted in the Sydney area and under the business name ‘Crisis Couriers’ a business of delivering parcels and documents. In December 1994, it had about 25 to 30 persons as bicycle couriers, and a number of others as motorcycle and motor vehicle couriers. Mr Hollis was a courier, but not a bicycle courier, with a firm styled ‘Team Couriers’. On 22 December 1994, Mr Hollis was leaving a building in Ultimo where he had attended to pick up a parcel. He had taken two steps on the footpath when he was struck by a cyclist and knocked to the ground. The cyclist went over the handlebars and landed in front of Mr Hollis. The cyclist stood up, said ‘Sorry mate’ and left the scene pushing his bicycle; he ignored Mr Hollis' calls. The cyclist remains unidentified. However, he was wearing a green jacket, on the front and back of which, in gold lettering, there appeared the words ‘Crisis Couriers’. Mr Hollis suffered personal injury in the accident, principally to his knee. This required surgery, caused a period of unfitness for work and has resulted in a 25 per cent permanent deficit in the knee.

The decision at first instance

3 The trial judge found that the cyclist was a bicycle courier employed by Vabu; that he was on Vabu's business at the time of the accident; and that he was wearing a uniform issued to him by Vabu but had no other obvious means of personal identification on him. His Honour also made the further important findings that Vabu had known for some time prior to the accident that a significant number of couriers disobeyed traffic rules and posed a danger to pedestrians; that means of personal identification for each courier were available; and that Vabu at various times had been party to schemes which involved to some extent effective means of personal identification but that these fell into

disuse partly by reason of Vabu's failure to compel its riders to adopt such means. He held that the accident was caused by the bicycle courier's negligent — and illegal 2 – riding and that no defence of contributory negligence was made out. His Honour assessed the quantum of Mr Hollis' damages at $176,313.

4 The trial judge found that Vabu set the rates of remuneration of its bicycle couriers and that there was no scope for negotiation of those rates between the parties and that Vabu allocated the work, with no scope for bidding for individual jobs by the riders. The evidence was that work was allocated to the couriers by a radio operator at Vabu's base who was known as the fleet controller. Couriers would call in each morning with their call signs and indicate readiness for work. The fleet controller would allocate jobs for the couriers. In doing so, the fleet controller would take into account various matters including the time at which couriers had first called in on that day and their location.

5 His Honour also made findings that Vabu assumed all responsibility as to the direction, training (if any), discipline and attire of its bicycle couriers; that Vabu provided its bicycle couriers with numerous items of equipment, which remained Vabu's property and which included the only means of communication between Vabu and its bicycle couriers; that the bicycle couriers were required to wear Vabu's livery at all times, partly due to Vabu's desire to advertise its services; and that requirements such as insurance and deductions from pay therefor were imposed by Vabu on the bicycle couriers without opportunity for negotiation.

6 The trial judge observed that the ‘bicycle couriers were pretty much in a “take it or leave it” situation and this is highlighted and exemplified by the fact that the rates for the courier jobs had not been altered for some years’. He also found that provisions for an insurance excess of $500 to $1,000 which bicycle couriers were required to pay provided a substantial disincentive for them to report accidents.

7 However, notwithstanding these findings, the trial judge entered a verdict for Vabu. Mr Hollis had put his case on three grounds. The first was that Vabu was vicariously liable for the negligence of its bicycle couriers as servants or agents. The trial judge held that this failed because ‘the bicycle couriers who worked for [Vabu] were not its servants or agents’ but were independent contractors, with the result that Vabu was not liable for their negligent acts. His Honour also considered that, although a courier might in some circumstances be considered the ‘agent’ of Vabu, there was ‘sufficient’ evidence to show that the bicycle courier was not ‘the employee or agent of’ Vabu.

8 The trial judge considered that he was constrained by the decision of the New South Wales Court of Appeal (Meagher, Sheller and Beazley JJA) in Vabu Pty Ltd v Federal Commissioner of Taxation3 (‘the taxation decision’) to conclude that the bicycle couriers were independent contractors and not the employees of Vabu. His Honour considered that the same conclusion was open on the evidence in this case, which was substantially similar to that earlier decided by the Court of Appeal in the taxation decision. That evidence included findings of fact that the bicycle couriers were required to provide their own bicycles and that two-thirds to three-quarters of them would have owned more than one bicycle; that the bicycle couriers had to bear the expense of providing and maintaining those vehicles; and that the bicycle couriers were required to provide their own equipment, other than a radio and uniforms.

9 The second ground asserted by Mr Hollis was a ‘common law estoppel’ that Vabu had warranted to its couriers and to the public that it had effected policies of public liability insurance in respect of members of the public injured by its bicycle couriers. The trial judge found that Mr Hollis had not proved that Vabu had warranted to members of the public that bicycle couriers were covered in respect of public liability insurance as alleged.

10 The third ground was that Vabu had contravened s 52 of the Trade Practices Act 1974 (Cth) (‘the Trade Practices Act’) in representing to members of the public that they were protected by public liability insurance in respect of injuries caused by the negligence of Vabu's bicycle couriers. Mr Hollis also pleaded a breach of s 55A of that statute on the footing that Vabu had misled the public that the nature of Vabu's business was a courier service insured in respect of injury to members of the public. The trial judge also rejected this claim on the basis that Vabu had made no representation or warranty to the public.

11 The points in the second and third grounds respecting the existence of insurance policies seem to have reflected the failure of an application by Mr Hollis to join CIC Insurance Ltd (‘CIC’) as a defendant to the proceedings pursuant to s 6 of the Law Reform ( Miscellaneous Provisions) Act 1946 (NSW). That section was considered in Bailey v New South Wales Medical Defence Union Ltd4. It relevantly provides:

‘(1) If any person (hereinafter … referred to as the insured) has … entered into a contract of insurance by which the person is indemnified against liability to pay any damages or compensation, the amount of the person's liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability.’

12 This application was opposed by Vabu and was dismissed by the trial judge on the ground that Mr Hollis had failed to adduce evidence that the bicycle courier in question had...