House of Lords - Lister and Others (AP) v Hesley Hall Limited

House of Lords

Session 2000-01
Publications on the Internet
Judgments

Judgments - Lister and Others (AP) v Hesley Hall Limited

HOUSE OF LORDS

Lord Steyn Lord Clyde Lord Hutton Lord Hobhouse of Woodborough Lord Millett

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE
LISTER AND OTHERS (AP)

(APPELLANTS)

v.

HESLEY HALL LIMITED

(RESPONDENTS)

ON 3 MAY 2001

[2001] UKHL 22

LORD STEYN

My Lords,

I. The question

    1. The central question before the House is whether as a matter of legal principle the employers of the warden of a school boarding house, who sexually abused boys in his care, may depending on the particular circumstances be vicariously liable for the torts of their employee.

II. The sexual abuse

    2. In 1979 Axeholme House, a boarding annex of Wilsic Hall School, Wadsworth, Doncaster, was opened. Between 1979 and 1982 the appellants were resident at Axeholme House. At that time the appellants were aged between 12 and 15 years. The school and boarding annex were owned and managed by Hesley Hall Ltd as a commercial enterprise. In the main children with emotional and behavioural difficulties were sent to the school by local authorities. Axeholme House is situated about two miles from the school.

    3. The aim was that Axeholme House would provide care to enable the boys to adjust to normal living. It usually accommodated about 18 boys. The company employed Mr and Mrs Grain as warden and housekeeper to take care of the boys. The employers accept that at the material time they were aware of the opportunities of sexual abuse which may present themselves in a boarding school environment.

    4. The warden was responsible for the day to day running of Axeholme House and for maintaining discipline. He lived there with his wife, who was disabled. On most days he and his wife were the only members of staff on the premises. He supervised the boys when they were not at school. His duties included making sure the boys went to bed at night, got up in the morning and got to and from school. He administered pocket money, organised weekend leave and evening activities, and supervised other staff. Axeholme House was intended to be a home for the boys and not an extension of the school environment.

    5. The employers accept that, unbeknown to them, the warden systematically sexually abused the appellants in Axeholme House. The sexual abuse took the form of mutual masturbation, oral sex and sometimes buggery. The sexual abuse was preceded by "grooming" being conduct on the part of the warden to establish control over the appellants. It involved unwarranted gifts, trips alone with the boys, undeserved leniency, allowing the watching of violent and X-rated videos, and so forth. What may initially have been regarded as signs of a relaxed approach to discipline gradually developed into blatant sexual abuse. Neither of the appellants made any complaint at the time. In 1982 the warden and his wife left the employ of the respondents. In the early 1990s a police investigation led to criminal charges in the Crown Court. Grain was sentenced to seven years' imprisonment for multiple offences involving sexual abuse.

    6. In 1997 the appellants brought claims for personal injury against the employers.

III. The decision at first instance

    7. The trial took place in January 1999. It is necessary to describe the shape of the case. There were then three claimants. Their claims were advanced on two separate grounds. First, it was alleged that the employers were negligent in their care, selection and control of the warden. Secondly, the plaintiffs alleged that the employers were vicariously liable for the torts committed by the warden. The case was heard before Judge Walker in the Dewsbury County Court. The evidence was adduced by witness statements and oral evidence. The judge was asked to give judgment on liability only.

    8. On 25 February 1999 the judge gave judgment. He dismissed the claim in negligence against the employers. That left the claim based on vicarious liability to be considered. This claim appeared to be ruled out by the Salmond test (Salmond, Law of Torts, 9th ed (1936), p 95; Salmond and Heuston, Law of Torts, 21st ed (1996), p 443) as interpreted and applied by the Court of Appeal in Trotman v North Yorkshire County Council [1999] LGR 584. The following passage in the judgment of Butler-Sloss LJ, at p 591, reveals the perceived difficulty:

"18. Having looked at some of the relevant decisions on each side of the line, it is useful to stand back and ask: applying general principles, in which category in the Salmond test would one expect these facts to fall? A deputy headmaster of a special school, charged with the responsibility of caring for a handicapped teenager on a foreign holiday, sexually assaults him. Is that in principle an improper mode of carrying out an authorised act on behalf of his employer, the council, or an independent act outside the course of his employment? His position of caring for the plaintiff by sharing a bedroom with him gave him the opportunity to carry out the sexual assaults. But availing himself of that opportunity seems to me to be far removed from an unauthorised mode of carrying out a teacher's duties on behalf of his employer. Rather it is a negation of the duty of the council to look after children for whom it was responsible. Acts of physical assault may not be so easy to categorise, since they may range, for instance, from a brutal and unprovoked assault by a teacher to forceful attempts to defend another pupil or the teacher himself. But in the field of serious sexual misconduct, I find it difficult to visualise circumstances in which an act of the teacher can be an unauthorised mode of carrying out an authorised act, although I would not wish to close the door on the possibility."

Thorpe LJ agreed with this judgment and Chadwick LJ expressed himself in materially similar terms. Not surprisingly, the judge felt compelled to conclude that the employers could not be held vicariously liable for the torts of the warden. On the other hand, the judge held that the employers were vicariously liable for the warden's failure to report to his employers his intentions (before the acts of sexual abuse) and the harmful consequences to the children (after acts of abuse). The judge explained his reasoning as follows:

"1. The defendant admits it had a duty of care towards the plaintiffs.

2. That duty of care was to take all reasonable steps to safeguard the plaintiffs (and other pupils) in its physical, moral and educational development whilst at the school.

3. In carrying out that duty of care the defendant a limited company necessarily had to appoint a hierarchy of responsible agents . . .

4. Mr Grain in particular was responsible for the boys while at Axeholme House . . .

5. He had a duty to report to the defendant . . . any harm which he perceived had come or might come to any of the boys in his care with a view to the defendant carrying out further its duty of care in taking remedial or preventative steps.

6. Failure by Mr Grain to report harm to the boys would unquestionably be a failure to carry out a duty which he owed generally and specifically to each boy in his care.

7. The consequences of a report of abuse upon a boy would (I find) undoubtedly have resulted in the removal from the scene by the defendant of the source of the harm by the dismissal of Mr Grain and the report of the incident to the police.

8. The defendant is therefore vicariously liable for Mr Grain's failure to report the acts of abuse."

The judge entered judgment for the plaintiffs against the employers on liability, and ordered that damages be assessed. The judge gave leave to appeal to the Court of Appeal.

IV. The Court of Appeal decision

    9. The employers appealed to the Court of Appeal. The plaintiffs did not cross-appeal the judge's decision that the employers were not negligent. The only remaining issue was therefore whether the employers were vicariously liable. But, like the judge, the Court of Appeal was bound by the previous Court of Appeal decision in Trotman v North Yorkshire County Council [1999] LGR 584. In this situation counsel for the plaintiffs found it difficult to argue that the employers were vicariously liable for the sexual acts of the warden. Instead counsel for the plaintiffs defended the judgment in favour of his clients on the basis of the warden's failure to report his own conduct. By judgments delivered on 7 October 1999, The Times, 13 October 1999 the Court of Appeal dismissed this argument The reasoning of the Court of Appeal is encapsulated in the following sentence in the judgment of Waller LJ:

"The simple point in this case is that if wrongful conduct is outside the course of employment, a failure to prevent or report that wrong conduct cannot be within the scope of employment so as to make the employer vicariously liable for that failure when the employer was not vicariously liable for the wrongful conduct itself."

The Court of Appeal accordingly allowed the appeal. In due course the House of Lords granted leave to appeal. The appeal proceeded at the instance of two appellants only.

V. The issues before the House

    10. Since the decision in the Court of Appeal the law reports of two landmark decisions in the Canadian Supreme Court, which deal with vicarious liability of employers for sexual abuse of children, have become available: Bazley v Curry (1999) (1999) 174 DLR(4th) 45; Jacobi v Griffiths (1999) 174 DLR(4th) 71. Enunciating a principle of "close connection" the Supreme Court unanimously held liability established in Bazley's case and by a 4 to 3 majority came to the opposite conclusion in Jacobi's case. The Supreme Court judgments examine in detail the circumstances in which, though an employer is not "at fault," it may still be "fair" that that it should bear responsibility for the tortious conduct of its employees. These decisions have been described as "a genuine advance on the unauthorised conduct/unauthorised mode distinction": Peter Cane, "Vicarious Liability for Sexual Abuse" (2000) 116 LQR 21, 24. Counsel for the appellants invited your Lordships to apply the test developed in Bazley's case and in Jacobi's case and to conclude that the employers are vicariously liable for the sexual torts of their employee.

    11. In another sense the approach to the appeals before the House differs from that adopted in the Court of Appeal. The House is not bound to follow the decision in Trotman v North Yorkshire County Council [1999] LGR 584. On the contrary, quite apart from the high persuasive value of the two Canadian decisions, the first task of the House is to consider whether the decision in Trotman v North Yorkshire County Council, when examined from a perspective of legal principle, correctly states the position. On the principal point the present appeals therefore in reality challenge the law as stated by the Court of Appeal in Trotman v North Yorkshire County Council rather than in the cases under consideration.

    12. Only if the arguments of the appellants, which seek an overruling of Trotman v North Yorkshire County Council, fail will it become necessary to consider whether vicarious liability may nevertheless be based on the warden's failure to report his sexual intentions and misdeeds.

VI. The perspective of principle.

    13. It is right to acknowledge at once that Trotman v North Yorkshire County Council is a carefully considered and reasoned decision. The leading judgment was given by Butler-Sloss LJ whose views are entitled to great weight. Nevertheless, our allegiance must be to legal principle. That is the subject to which I now turn.

    14. Vicarious liability is legal responsibility imposed on an employer, although he is himself free from blame, for a tort committed by his employee in the course of his employment. Fleming observed that this formula represented "a compromise between two conflicting policies: on the one end, the social interest in furnishing an innocent tort victim with recourse against a financially responsible defendant; on the other, a hesitation to foist any undue burden on business enterprise": The Law of Torts, 9th ed (1998), pp 409-410.

    15. For nearly a century English judges have adopted Salmond's statement of the applicable test as correct. Salmond said that a wrongful act is deemed to be done by a "servant" in the course of his employment if "it is either (a) a wrongful act authorised by the master, or (b) a wrongful and unauthorised mode of doing some act authorised by the master": Salmond on Torts, 1st ed (1907), p 83; and Salmond and Heuston on Torts, 21st ed (1996), p 443. Situation (a) causes no problems. The difficulty arises in respect of cases under (b). Salmond did, however, offer an explanation which has sometimes been overlooked. He said (Salmond on Torts, 1st ed, pp 83-84) that "a master . . . 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" (my emphasis): see the citation of Salmond with approval in Canadian Pacific Railway Co v Lockhart [1942] AC 591, 599 (Salmond on Torts, 9th ed, p 95) and in Racz v Home Office [1994] 2 AC 45, 53 (Salmond and Heuston, Laws of Tort, 19th ed (1987), pp 521-522; 20th ed (1992), p 457). Salmond's explanation is the germ of the close connection test adumbrated by the Canadian Supreme Court in Bazley v Curry, 174 DLR(4th) 45 and Jacobi v Griffiths, 174 DLR(4th) 71.

    16. It is not necessary to embark on a detailed examination of the development of the modern principle of vicarious liability. But it is necessary to face up to the way in which the law of vicarious liability sometimes may embrace intentional wrongdoing by an employee. If one mechanically applies Salmond's test, the result might at first glance be thought to be that a bank is not liable to a customer where a bank employee defrauds a customer by giving him only half the foreign exchange which he paid for, the employee pocketing the difference. A preoccupation with conceptualistic reasoning may lead to the absurd conclusion that there can only be vicarious liability if the bank carries on business in defrauding its customers. Ideas divorced from reality have never held much attraction for judges steeped in the tradition that their task is to deliver principled but practical justice. How the courts set the law on a sensible course is a matter to which I now turn.

    17. It is easy to accept the idea that where an employee acts for the benefit of his employer, or intends to do so, that is strong evidence that he was acting in the course of his employment. But until the decision of the House of Lords in Lloyd v Grace, Smith & Co [1912] AC 716 it was thought that vicarious liability could only be established if such requirements were satisfied. This was an overly restrictive view and hardly in tune with the needs of society. In Lloyd v Grace, Smith & Co it was laid to rest by the House of Lords. A firm of solicitors were held liable for the dishonesty of their managing clerk who persuaded a client to transfer property to him and then disposed of it for his own advantage. The decisive factor was that the client had been invited by the firm to deal with their managing clerk. This decision was a breakthrough: it finally established that vicarious liability is not necessarily defeated if the employee acted for his own benefit. On the other hand, an intense focus on the connection between the nature of the employment and the tort of the employee became necessary.

    18. A good illustration of the correct approach is provided by Williams v A & W Hemphill Ltd 1966 SC(HL) 31. Contrary to the instructions of his employers a driver of a lorry deviated substantially from his route. On the detour an accident occurred owing to the fault of the driver. The question arose whether the employers of the lorry driver were vicariously liable. In a speech assented to by all the members of the House Lord Pearson analysed the position as follows, at p 46:

"Had the driver in the present case been driving a lorry which was empty or contained nothing of real importance, I think that so substantial a deviation might well have constituted a frolic of his own. The presence of passengers, however, whom the servant is charged qua servant to drive to their ultimate destination makes it impossible (at all events, provided that they are not all parties to the plans for deviation) to say that the deviation is entirely for the servant's purposes. Their presence and transport is a dominant purpose of the authorised journey, and, although they are transported deviously, continues to play an essential part. It was said in argument that there must be some limits to that contention and that one could not hold that, if the driver had gone to Inverness, he would still be acting on his master's business. No doubt there are such limits to the argument as common sense may set on the facts of each case. But when there are passengers whom the servants on his master's behalf has taken aboard for transport to Glasgow, their transport and safety does not cease at a certain stage of the journey to be the master's business, or part of his enterprise, merely because the servant has for his own purposes chosen some route which is contrary to his instructions.

The more dominant are the current obligations of the master's business in connection with the lorry, the less weight is to be attached to disobedient navigational extravagances of the servant.

In weighing up, therefore, the question of degree, whether the admittedly substantial deviation of the vehicle with its passengers and baggage was such as to make the lorry's progress a frolic of the servant unconnected with or in substitution for the master's business, the presence of the passengers is a decisive factor against regarding it as a mere frolic of the servant. In the present case the defenders remained liable, in spite of the deviation, for their driver's negligence."

This was vicarious liability in the context of negligence. Nevertheless, the reasoning throws light on the problem under consideration.

    19. The classic example of vicarious liability for intentional wrong doing is Morris v C W Martin & Sons Ltd [1966] 1 QB 716 A woman wanted her mink stole cleaned. With her permission it was delivered to the defendants for cleaning. An employee took charge of the fur and stole it. At first instance the judge held that the defendants were not liable because the theft was not committed in the course of employment. The Court of Appeal reversed the judge's decision and held the defendants liable. It is possible to read the case narrowly simply as a bailment case, the wrong being failure to re-deliver. But two of the judgments are authority for the proposition that the employee converted the fur in the course of his employment. Diplock LJ observed, at pp 736-737:

"If the principle laid down in Lloyd v Grace, Smith & Co [1912] AC 716 is applied to the facts of the present case, the defendants cannot in my view escape liability for the conversion of the plaintiff's fur by their servant Morrissey. They accepted the fur as bailees for reward in order to clean it. They put Morrissey as their agent in their place to clean the fur and to take charge of it while doing so. The manner in which he conducted himself in doing that work was to convert it. What he was doing, albeit dishonestly, he was doing in the scope or course of his employment in the technical sense of that infelicitous but time-honoured phrase. The defendants as his masters are responsible for his tortious act."

Salmon LJ held, at p 738, that "the defendants are liable for what amounted to negligence and conversion by their servant in the course of his employment". The deciding factor was that the employee had been given custody of the fur. Morris's case has consistently been regarded as high authority on the principles of vicarious liability. Atiyah, Vicarious Liability in the Law of Torts , (1967), p 271 described it as "a striking and valuable extension of the law of vicarious liability". Palmer, Bailment, 2nd ed (1991), pp 424-425 treats Morris's case as an authority on vicarious liability beyond bailment. He states that "if a television repairman steals a television set he is called in to repair, his employers would be liable, for the loss occurred whilst he was performing one of the class of acts in respect of which their duty lay". And that does not involve bailment. Moreover, in Port Swettenham Authority v T W Wu & Co (M) Sdn Bhd [1979] AC 580 the Privy Council expressly approved Morris's case in respect of vicarious liability as explained by Diplock and Salmon LLJ.

    20. Our law no longer struggles with the concept of vicarious liability for intentional wrongdoing. Thus the decision of the House of Lords in Racz v Home Office [1994] 2 AC 45 is authority for the proposition that the Home Office may be vicariously liable for acts of police officers which amounted to misfeasance in public office - and hence for liability in tort involving bad faith. It remains, however, to consider how vicarious liability for intentional wrongdoing fits in with Salmond's formulation. The answer is that it does not cope ideally with such cases. It must, however, be remembered that the great tort writer did not attempt to enunciate precise propositions of law on vicarious liability. At most he propounded a broad test which deems as within the course of employment "a wrongful and unauthorised mode of doing some act authorised by the master". And he emphasised the connection between the authorised acts and the "improper modes" of doing them. In reality it is simply a practical test serving as a dividing line between cases where it is or is not just to impose vicarious liability. The usefulness of the Salmond formulation is, however, crucially dependent on focussing on the right act of the employee. This point was explored in Rose v Plenty [1976] 1 WLR 141. The Court of Appeal held that a milkman who deliberately disobeyed his employers' order not to allow children to help on his rounds did not go beyond his course of employment in allowing a child to help him. The analysis in this decision shows how the pitfalls of terminology must be avoided. Scarman LJ said, at pp 147-148:

"The servant was, of course, employed at the time of the accident to do a whole number of operations. He was certainly not employed to give the boy a lift, and if one confines one's analysis of the facts to the incident of injury to the plaintiff, then no doubt one would say that carrying the boy on the float - giving him a lift - was not in the course of the servant's employment. But in Ilkiw v Samuels [1983] 1 WLR 991 Diplock LJ indicated that the proper approach to the nature of the servant's employment is a broad one. He says, at p 1004:

'As each of these nouns implies' - he is referring to the nouns used to describe course of employment, sphere, scope and so forth - '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.'

Applying those words to the employment of this servant, I think it is clear from the evidence that he was employed as a roundsman to drive his float round his round and to deliver milk, to collect empties and to obtain payment. That was his job. . . He chose to disregard the prohibition and to enlist the assistance of the plaintiff. As a matter of common sense, that does seem to me to be a mode, albeit a prohibited mode, of doing the job with which he was entrusted. Why was the plaintiff being carried on the float when the accident occurred? Because it was necessary to take him from point to point so that he could assist in delivering milk, collecting empties and, on occasions obtaining payment."

If this approach to the nature of employment is adopted, it is not necessary to ask the simplistic question whether in the cases under consideration the acts of sexual abuse were modes of doing authorised acts. It becomes possible to consider the question of vicarious liability on the basis that the employer undertook to care for the boys through the services of the warden and that there is a very close connection between the torts of the warden and his employment. After all, they were committed in the time and on the premises of the employers while the warden was also busy caring for the children.

VII. The correctness of Trotman v North Yorkshire County Council

    21. It is now opportune to take a closer look at the Court of Appeal decision in Trotman v North Yorkshire County Council [1999] LGR 584. The appeal was from a decision on a preliminary issue arising on the pleadings. The pleaded facts were as follows, at p 592:

"(1) At all material times the defendants operated a school for mentally handicapped children . . . whereat the plaintiff attended from about May 1990.
(2)
The defendants' servants or agents who were the staff at the school organised a holiday trip to Spain which took place on 28 May to 4 June 1991 and the plaintiff, with other pupils, went on the trip and was totally within the control, and subject to the care, of the defendants' said servants or agents, the staff at the said school.
(3)
Whilst on the holiday in Spain the plaintiff shared a bedroom with the deputy headmaster of the said school, the defendants' servant or agent, one MS, and on several nights during the holiday the plaintiff was indecently assaulted by the said MS."

Accordingly, it was alleged, the council was vicariously responsible because the indecent assaults were committed by MS "whilst carrying out his supervisory role as a schoolmaster in charge of the plaintiff and responsible for his care". No breach of duty by the council was alleged. Chadwick LJ further observed, at p 594:

"There is no allegation in the particulars of claim that the council itself owed to the plaintiff a duty to ensure that he was free from harm during the Spanish holiday. No doubt there were thought to be good reasons for pleading the case without alleging any duty owed by the council itself. I express no view on whether such an allegation could be made good. This court must decide this appeal on the basis that the preliminary issue is defined by the allegations which were before the judge. It would not be safe to proceed on the basis that the case might have been put in some other way which the plaintiff has not chosen to plead."

Butler-Sloss LJ may have been influenced by similar considerations for at the end of her judgment she observed, at p 592: "on the basis of the case set out in the pleadings which is the only issue before this court, the blame for these events cannot be laid at the door of the council". This was a rather restricted and technical view of the dispute. It would not have been overly bold to say that, although the council was not itself in breach of any duty, it had undertaken to exercise reasonable care of the children on the Spanish holiday through the deputy headmaster. That would not have been the end of the matter but it would have facilitated a more realistic appraisal of the issue.

continue