View source for Brink's Global Services v Igrox

DMC/SandT/11/07

'''English Court of Appeal'''

'''Brink’s Global Services Inc & Ors v. Igrox Ltd & Anor'''
'''Court of Appeal: Longmore, Moore-Bick and Wilson LJJ.: [2010] EWCA Civ 1208: 27 October 2010'''

Jeffrey Terry, instructed by DWF LLP, for the appellant, Brinks

Tim Marland, instructed by Waltons & Morse LLP, for the respondent, Igrox

'''CARRIAGE OF GOODS: THEFT FROM CONTAINER BY EMPLOYEE OF FUMIGATION COMPANY: WHETHER COMPANY VICARIOUSLY LIABLE: CLOSE CONNECTION BETWEEN THEFT AND PURPOSE OF EMPLOYMENT'''

'''Summary'''

'''In the circumstances of this case, there was a sufficiently close connection between the theft by an employee of silver bars from a container awaiting fumigation and the purpose of his employment to make it fair and just that his employer, a company providing fumigation services, should be held vicariously liable for his actions. Theft by an employee from the very container which he was instructed to fumigate was a risk reasonably incidental to the purpose for which he was employed.'''

This note is based on a note of the case prepared by Christopher Chatfield of the London firm of solicitors, Waltons & Morse LLP [http://www.waltonsandmorse.com] who acted for the respondent contractors. The note first appeared on the firm’s website in October 2010

'''Background'''

This case involved the theft of silver from a container stored at Thamesport in the UK pending shipment to India. Brinks had contracted to carry the silver from London to India. Prior to shipment from Thamesport, Brinks had to arrange for the wooden pallets upon which the silver bars were packed to be fumigated. Brinks sub-contracted the fumigation to Igrox. The Igrox employees failed to carry out fumigation (claiming to have run out of fumigant). Thereafter, one of the Igrox employees returned to the container and stole a considerable quantity of the silver.

At first instance, the case raised questions concerning Brinks' title to sue. This was resolved in favour of Brinks. The Judge was also asked to consider the question of vicarious liability - when will an employer be liable for a tort committed by an employee. The Judge found that the Igrox employee took a decision not to fumigate the container and that this was part of his nefarious plot to steal the silver. The Judge decided that this plot was hatched during the course of his employment and, as a consequence, the employers were liable for their employee's conversion of the goods.

Igrox appealed the decision claiming that the Judge was wrong on the law concerning vicarious liability. Igrox also appealed on the facts claiming that the Judge had overlooked certain evidence and had no basis upon which to find that a nefarious plot had been hatched when the employee decided not to fumigate the container.

'''Judgment'''

The leading Judgment was handed down by Lord Justice Moore-Bick. Igrox’s appeal was dismissed.

Dealing firstly with Igrox's appeal on the facts, the Court of Appeal accepted that the evidence was inconsistent with the first instance Judge's finding of a plot hatched at the time that the Igrox employee failed to fumigate the container in question. 

Igrox went on to argue that, this being the case, there was insufficient connection between the theft by the Igrox employee and his employment. Igrox claimed that the employment merely gave the thief the opportunity to steal the goods. However, this theft did not occur within the course of the employment. Igrox relied upon the case of Heasmans v Clarity Cleaning Co Ltd [1987] I.C.R. 949. In that case, the Defendant was appointed to clean the Claimant's offices and office equipment. This included telephones. One of the employees of the Defendant used the telephones for personal purposes. These personal purposes included the making of a considerable number of long distance phone calls. As a result, the Claimant received a substantial telephone bill. The Claimant presented a claim to the Defendant for the losses suffered, claiming that the Defendant was vicariously liable for the wrongful actions of the employee in question. 

The Court of Appeal in the Heasmans decision considered this to fall outside the scope of vicarious liability. It held that the employers were not vicariously liable for the actions of the employee, on the grounds that the employment merely gave the employee the opportunity to use the telephones improperly. The Court of Appeal found that, whilst the employee was employed to clean the telephones, that employment did not extend to the use of the telephones. Consequently, the Court of Appeal found there to be insufficient connection between the employment and the tort. 

 
At the time of the Heasmans decision, the recognised test for deciding whether an employee's act or omission would be within the scope of the employment depended on the question whether the act or omission was authorised by the employer or could be regarded as an unauthorised way of carrying out an authorised act. Thus, in the Heasmans case, the Court of Appeal held that the unauthorised use of a telephone could not be regarded as the cleaning of it in an unauthorised manner.

Brinks, on the other hand, relied on a series of more recent cases which applied a more flexible approach to the question of vicarious liability. These cases follow the decision of the House of Lords in Lister v Hesley Hall Ltd [2001] UKHL 22, [2002] 1A.C.215. 

In the Lister case, the House of Lords had to consider whether the warden of a residential school was acting within the course of his employment (for the purposes of vicarious liability) when he carried out a series of acts of sexual abuse upon children residing at the school. Clearly, such acts were neither an authorised action nor an unauthorised method of performing an authorised action. Rather, the House of Lords looked at the connection between the employment and the acts committed. They considered that the warden's acts were so closely connected with his employment that it would be "fair and just to hold the employers vicariously liable". This test was later applied by the House of Lords in Dubai Aluminium Co Ltd v Salaam [2002] UKHL48, [2003] 2AC366 and a series of later cases. These included, for example, Gravil v Carroll [2008] EWCA Civ 689, [2008] I.C.R. 1222 where the defendant semi-professional rugby team was found vicariously liable when one of its team punched a member of the opposition. Similarly, in Mattis v Pollock [2003] EWCA Civ 887; [2003] 1 WLR 2158 a doorman, having been in a fight with several patrons of the nightclub by whom he was employed, left the premises, obtained a knife and stabbed another patron of that nightclub. The Court there found that the nightclub was vicariously liable as there was sufficient connection between the employment (the bouncer in question was expected to exercise a degree of aggression in his post) and the tort committed.

Igrox submitted that, for an employer to be liable for the deliberate wrongdoing of its employees, the employer must have assumed some form of duty over the subject matter of the wrongful act or omission (such as a bailee, a guardian etc). The Court of Appeal disagreed with this submission. The test applied in Lister and the later authorities is to be of general application.

The Court of Appeal considered that all the circumstances have to be taken into account to establish whether there is sufficient connection. Lord Justice Moore-Bick said "while all the circumstances have to be taken into account, the authorities support the view that when making that evaluation it is appropriate to consider whether the wrongful act can fairly be regarded as a risk reasonably incidental to the purpose for which the wrongdoer was employed". 

When applying that test to the facts in the present case, the Court of Appeal considered that the employee in question was employed to fumigate the container and its contents and he was, therefore, instructed to deal with them. He was authorised to enter a secure compound where the container was stored and he was allowed to enter the container and thus have access to its contents. No-one other than Igrox or its employees was allowed access to the container in the twenty four hours or so during which the fumigation process took place. Igrox was, in a broad sense, responsible for the container's contents during the fumigation process and it delegated that responsibility to its employees (including the thief). 

Lord Justice Moore-Bick concluded:- 

"Theft by an employee from the very container which he is instructed to fumigate is in my view a risk reasonably incidental to the purpose for which he is employed". 

Lord Justice Longmoore reviewed the test and stated:-
 
"That is a difficult test to apply with any legal certainty but the cases show that a very important element is that the employer puts the employee in a position he does as part of the employer's business. That may be in the course of an assumption of responsibility to the Claimant…or it may be by merely clothing the employee with the indicia of the employer's business for the purposes of carrying out that business. The Claimant in the present case would succeed on either of the above bases because Igrox as fumigators did not only assume a responsibility in relation to the goods both to their contracting party (Thamesport) and to the goods-owner. They also clothed [the thief] with the outward appearance of being their employee (by e.g. giving him a uniform and allowing him to take the necessary equipment to breach the seals of the container) so that no-one would be suspicious if he was seen alone near the container".

Both Lord Justice Moore-Bick and Lord Justice Longmoore considered the Heasmans decision. They did not consider that the case was inconsistent with their finding against Igrox. However, both considered that Heasmans applied an old test which had now been superseded. Both Lord Justices questioned whether Heasmans would be decided the same way today. 

'''Comment'''

Brinks v Igrox clarifies the position and reinforces the appropriate test. It also acts as a warning which can be found throughout the recent authorities on vicarious liability. It is dangerous to place too much reliance on the facts of previous authorities. The recent decisions on vicarious liability make it clear that the courts must adopt a flexible interpretation of the test without being rigidly bound by previous decisions. 

In conclusion, it is important to consider the connection between the employment and the wrong committed, in order to decide whether, in all the circumstances, it is fair and reasonable to hold the employer vicariously liable for the acts and omissions of its employee.