MUNSHI MOHAMMAD FAIZ V INTERPRO CONSTRUCTION PTE LTD [2021] SGHC 26: DUAL VICARIOUS LIABILITY FOR A SINGLE TORTFEASOR
The High Court recently held that multiple defendants could be vicariously liable for the negligence of a single tortfeasor. Applying the general test in Ng Huat Seng v Munib Mohammad Madni [2017] 2 SLR 1074 (“Ng Huat Seng”), a sub-contractor (“1D”) was found to be vicariously liable for the negligence of another sub-contractor’s (“3D”) employee at the worksite of the construction project (“Project”).
Vicarious liability is the principle in law whereby one party is held responsible for the unlawful acts of a third party. This principle usually arises in the context of an employer-employee relationship, where the employer can be held liable for the negligent acts of the employee.
Facts. Munshi Mohammad Faiz v Interpro Construction Pte Ltd [2021] SGHC 26 concerned an industrial accident where the plaintiff (engaged by 1D) was injured by an excavator operated by one Sujan (engaged by 3D) (at [1]).
The relationship between the parties. 1D was engaged by the main contractor (“2D”) to carry out general construction works, including certain excavation works ([2]).
3D was engaged by 2D to supply an excavator and a trained and qualified excavator for excavation works at the Project’s worksite ([4]).
The plaintiff was a construction worker employed by 1D. 1D also appointed one Santhosh as the foreman and site safety supervisor for the Project (at [3]). 3D supplied the excavator and the excavator operator, its employee Sujan (at [4]).
Relevantly, Sujan was to work under the directions of 1D at the worksite (at [4]).
The banksman system. A “banksman system” was put in place by 1D where a person on the ground (the “banksman”) would direct the movement of an excavator by giving signals to the person operating it (at [5]).
Summary of the accident. Santhosh had instructed the plaintiff to direct Sujan to stop the excavator. The plaintiff did so, and Sujan brought the excavator to a stop. Santhosh inspected the excavated pit, and then instructed the plaintiff to fetch a spade to remove the remaining earth in the pit. The plaintiff walked near the excavator on his way to fetching the spade when the excavator operated by Sujan moved and collided into him. The plaintiff suffered various personal injuries including a spinal fracture (at [6]).
The findings. The High Court accepted the District Judge’s finding that: (at [10])
Sujan was negligent as a reasonably competent excavator operator would not move the excavator unless the banksman gave a signal; and
Santhosh was not negligent for instructing the plaintiff to retrieve the spade only after instructing the plaintiff to direct Sujan to stop operating the excavator.
However, the High Court differed in its holding on vicarious liability for Sujan’s negligence. There were 2 key issues: (at [15])
Whether it was permissible as a matter of law to hold multiple defendants vicariously liable for the negligence of a single primary tortfeasor (“dual VL”); and if so,
Which defendants ought to be held vicariously liable for Sujan’s negligence.
The law on vicarious liability. In relation to a single defendant’s vicarious liability for the negligence of a primary tortfeasor, the general two-stage test to be applied was set out by the Court of Appeal in Ng Huat Seng: (at [40])
First, there exists a sufficiently close relationship between the primary tortfeasor and defendant so that it was fair, just and reasonable for vicarious liability to be imposed.
Second, there exists a sufficient connection between this relationship and the commission of the tort; in particular, it is important whether the relationship created or significantly enhanced the risk of the tort being committed.
The Court of Appeal also accepted the policy factors that would usually make it fair, just and reasonable for vicarious liability to be imposed as set out in the UK Supreme Court’s decision of Various Claimants v Catholic Child Welfare Society [2012] 3 WLR 1319 would help to guide the court in determining when to impose vicarious liability (at [41]).
Dual vicarious liability. The High Court observed that the imposition of dual VL had not been expressly decided by the Court of Appeal in Singapore (at [54]).
However, dual VL was recognised by the English and Canadian Courts, and the principle was accepted by the Singapore High Court in Chen Qiangshi v Hong Fei CDY Construction Pte Ltd [2014] SGHC 177, albeit obiter (at [59] – [63] and [66]).
Looking at first principles and the underlying rationales for imposing vicarious liability, the High Court accepted that dual VL ought to be permissible in law (at [64] – [65]).
The High Court adopted Rix LJ’s view in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2006] QB 510 that dual VL provided a coherent solution to the problem of the borrowed employee (at [69]). If both the general employer and temporary employer satisfied the general test in Ng Huat Seng, both could be vicariously liable for the acts of the employee.
Application: 2D. The High Court found that 2D was not vicariously liable.
There was no sufficiently close relationship: 2D had no control over Sujan, having “no say in training or selecting the excavator operator to be deployed, what the excavator operator was supposed to do on-site or how the excavator operator was to operate the excavator” (at [70]).
Application: 1D. The High Court found 1D vicariously liable.
There existed a sufficiently close relationship: 1D had control of the Project’s worksite (at [71]). Importantly, 1D also had control over Sujan’s operation of the excavator during the excavation works by way of the banksman system put in place and managed by Santhosh (at [72]). In addition, while 1D did not hire Sujan, the “excavation works were undertaken as part of the 1D’s construction business” (at [73]).
There existed a sufficient connection between the relationship and the commission of the tort: 1D’s use of Sujan as an excavator operator had put Sujan in a position where he might negligently injure others with the excavator (at [74]). Therefore, 1D was vicariously liable for Sujan’s negligence.
Application: 3D. The High Court found 3D vicariously liable.
There existed a sufficiently close relationship: 3D’s relationship with Sujan was sufficiently close to satisfy the first stage of the test. As Sujan’s general employer, 3D was “responsible for training and selecting excavator operators for assignment. To that extent, it had control over how its operators (including Sujan) actually operated their excavators when undertaking excavation works.” (at [75]) In addition, “Sujan’s negligence resulted from his operation of the excavator – this was an activity undertaken for the 3D’s purposes as part of its business contract with 2D. The 3D profited from this arrangement and ought to bear the attendant risks that it had created.” (at [77])
There existed a sufficient connection between the relationship and the commission of the tort: The second stage of the test was also satisfied because the risk of accident was created by 3D’s employment, training, and subsequent selection of Sujan to operate the excavator (at [78]).
Therefore, both 1D and 3D were vicariously liable for Sujan’s negligence.
Significance. Munshi Mohammad Faiz v Interpro Construction Pte Ltd [2021] SGHC 26 makes it clear that a sub-contractor may, depending on the facts of the case, be held vicariously liable for the negligent acts of another sub-contractor’s employees.
In particular, readers should note that 1D was held liable for the negligent acts of 3D’s employee, Sujan; this was even though 1D’s own employee, Santhosh, was not negligent.
While the issue of whether vicarious liability will arise is a fact-centric exercise, a key factor is “control”: if you have control over how another sub-contractor’s employee works, you may potentially be held vicariously liable for that other sub-contractor’s employee’s negligent act. This is particularly so if you have control over how that employee is working.
This issue of “control” is not unfamiliar. Readers may recall the “independent contractor” defence, where employees can argue that they are not vicariously liable for the negligence of an independent contractor: in that test, the issue of the extent of control exercised by the employer is an important (albeit not the sole) factor.
Therefore, contractors should take heed, and ensure that they have in place robust site safety management measures (to prevent such incidents from arising) and appropriate risk management measures (e.g., taking up appropriate insurance, etc.) for as Munshi Mohammad Faiz v Interpro Construction Pte Ltd [2021] SGHC 26 shows, even if your employee was not negligent, you may still be held liable for the negligence of another employer’s employee.
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