Hwa Aik Engineering Pte Ltd v Munshi Mohammad Faiz and another

[1] This is an application by a co-defendant for leave to appeal to the Appellate Division of the High Court against a decision of the General Division of the High Court given in respect of a personal injuries claim. On 9 March 2021, we dismissed the application. Our reasons are stated below but we start with the background to the application.

[2] The plaintiff in the suit (DC/S 265/2017) was Munshi Mohammad Faiz (the first respondent in this application). He was injured by an excavator operated by Sujan Abdur Razzak Sikder (“Sujan”) while he was working at a construction project at 22 Grove Crescent, Singapore. He commenced action in the District Court against three defendants.

(a) Interpro Construction Pte Ltd – the second respondent in the present application – was the first defendant (“D1”). D1 was the sub-contractor engaged by the main contractor to carry out general construction work including certain excavation work. The plaintiff was employed by D1.

(b) K P Builder Pte Ltd was the second defendant (“D2”). D2 was the main contractor who had engaged D1 as a sub-contractor. The two companies shared a common director. D2 was not a party in the present application.

(c) Hwa Aik Engineering Pte Ltd – the applicant in the present application – was the third defendant (“D3”). D2 had engaged D3 to supply an excavator and a trained and qualified excavator operator. Pursuant to this arrangement, D3 provided an excavator and Sujan as the excavator operator. D3 was the employer of Sujan who was to work under the directions of D1 at the worksite.

[3] On 31 May 2016, the plaintiff was injured by the excavator operated by Sujan when the excavator moved and collided into the plaintiff. It is not necessary for present purposes to elaborate on the details as to how the accident occurred. Suffice it to say that the excavator was not supposed to be moving at the material time. There was some argument about the liability of one Panchanathan Santhosh Kumar (“PSK”) who was appointed by D1 as a foreman and site safety supervisor for the project. However, as there was no finding of liability on the part of PSK, we need not elaborate further on his conduct.

[4] On 16 April 2020, the District Court found only D1 and D2 liable to the plaintiff and no contributory negligence on the plaintiff’s part. D3 was not liable. The plaintiff appealed to the General Division of the High Court as did D1 and D2.

[6] On 10 February 2021, D3 filed the present application by way of an originating summons for leave to appeal in respect of issues arising from the decision of the Judge. At the outset we observe that the application was poorly drafted. Firstly, the originating summons states that the application is made pursuant to “s 29(1)(a)” read with para 2 of the Fifth Schedule of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“SCJA”). However, “s 29(1)(a)” of the SCJA does not exist. If D3 was intending to refer to s 29(a) of the SCJA, that provision deals with a situation where no appeal can be brought. The correct provision is s 29A(1)(b), read with para 2 of the Fifth Schedule of the SCJA. Secondly, there was no explicit mention in the originating summons that it was an application for leave to appeal.

[7] The application was supported by written submissions for D3. The plaintiff and D2 were named as respondents in the application but no written submission was filed by either of them, even though the Registrar of the Supreme Court had notified the solicitors for each of these parties to file written submissions within 7 days after service of the relevant documents on them.

[8] The three grounds for granting leave to appeal are well established: there must be (a) a prima facie case of error of law; (b) a question of general principle decided for the first time; or (c) a question of importance upon which further argument and a decision of a higher tribunal would be to the public advantage: see Lee Kuan Yew v Tang Liang Hong and another [1997] 2 SLR(R) 862 at [16]; IW v IX [2006] 1 SLR(R) 135 at [20].

[9] In D3’s written submissions, D3 sought leave to appeal on the basis that each of the following issues it raised was an issue of public importance upon which further argument and a decision of a higher tribunal would be to the public advantage.

(a) What is the applicable test upon which the court should impose joint and dual vicarious liability in the situation involving the lending of an employee?

(b) On the facts of the present case, is the test for vicarious liability as set out in Ng Huat Seng and another v Munib Mohammad Madni and another [2017] 2 SLR 1074 (“Ng Huat Seng”), and/or the tests per Rix and/or May LJJ in Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2006] QB 510 (“Viasystems”) satisfied such that [D3] should be vicariously liable for the acts of Sujan?

(c) If the court finds that both [D3] and [D1] are vicariously liable for the acts of Sujan, is the court empowered to apportion liability between the respective defendants even if they have not made claims for contribution against each other under ss 15 and 16 of the Civil Law Act (Cap 43, 1999 Rev Ed) (the “CLA”)?

[10] The first two issues overlapped and could be considered together as one issue. They pertained to the question of dual vicarious liability for the conduct of the same worker where the employer had supplied its employee to another party to work under the instructions of that other party. The employer may be referred to as the lending or general or permanent employer and the other party may be referred to as the borrowing or temporary employer even though, strictly speaking, it is not an employer of the worker. For present purposes, we refer to the former as “the permanent employer” and the latter as “the temporary employer”. We refer to the first issue as the “Dual Vicarious Liability issue”.

[11] The next issue set out in D3’s written submissions was whether the court was empowered to apportion liability between co-defendants where none of them had made a formal claim for contribution against the other under ss 15 and 16 of the CLA. We will refer to this as “the Contribution issue”.

[12] It was important to bear in mind that D3 was not asserting that dual vicarious liability is impermissible in law. Indeed, all the defendants apparently accepted that this was permissible. D3 was focusing on the question as to when such liability would arise and, more specifically, when such liability would arise in the situation mentioned above, ie, where a permanent employer has sent a worker to a temporary employer to work under the instructions of the temporary employer. D3 argued that the lending of workers was an increasingly common practice due to the COVID-19 pandemic and hence the decision of a higher tribunal would be to the public advantage. We accepted that, even before the COVID-19 pandemic, it was not uncommon for a permanent employer to send its employee to a temporary employer to work on the instructions of the temporary employer. However, we found D3’s arguments to be confusing. As we elaborate below, it was not clear whether D3 was arguing that the test for vicarious liability was the same in various cases but that the Judge had erred in applying the test or that the tests in Singapore and in the United Kingdom were different and there should be clarity on the test.

[13] As mentioned above at [9], D3 had framed its issue as what the applicable test should be and then whether, on the facts, the test for vicarious liability as set out in Ng Huat Seng “and/or” the tests per Rix LJ “and/or” the test of May LJ in Viasystems was satisfied such that D3 should be vicariously liable for Sujan’s action. This suggested that D3 was proceeding on the premise that there were different tests between the test in Ng Huat Seng and/or the test of Rix LJ and/or the test of May LJ in Viasystems.

[14] Yet para 19 of D3’s written submissions referred to the Judge’s assessment of dual vicarious liability on “the two-stage test as set out in Ng Huat Seng and Viasystems.” At para 24 of its written submissions, it argued that “[b]oth Ng Huat Seng and Viasystems require the Court to consider the relationships which had created or significantly enhanced the risk of the tort being committed”. The two paragraphs suggested that D3 was proceeding on the premise that the test in Ng Huat Seng and the test in Viasystems were the same and that, where the permanent employer was concerned, the test took into account the relationship between the permanent employer and the employee and not so much the extent of control that the permanent employer had over the actions of the employee. However, the other parts of its submissions emphasised that it had no control over Sujan’s work at the site.

[15] If D3 was proceeding on the premise that the test was the same and took into account the relationship between the permanent employer and the employee, but D3 was dissatisfied with the application of the test to the facts, then that would not merit an application for leave to appeal to a higher tribunal. It appeared from the thrust of D3’s submissions that that was, in truth, the substance of its concern, although it couched its concern on a wider plane by suggesting that the Judge’s decision would render a permanent employer always vicariously liable even where it does not have actual control over the actions of the employee. D3 appeared to be seeking a general decision whereby a permanent employer would never be vicariously liable in such a situation.

[16] If D3 was arguing that the tests or inquiries in Singapore and in the United Kingdom are different, it is not the case that the inquiries are different.

[17] Viasystems was discussed by Lord Phillips in Various Claimants v Catholic Child Welfare Society and others [2012] 3 WLR 1319 (“Christian Brothers”). He noted that, in Viasystems, May LJ had suggested that the inquiry should focus on who, as between the permanent and the temporary employer, was entitled, and perhaps theoretically obliged, to give orders to the employee. However, Rix LJ had focused on the relationship between the employee and the permanent and temporary employers. Christian Brothers preferred the approach of Rix LJ (see Christian Brothers at [41]–[45]).

[19] Furthermore, it seemed to us that the cases establish that it would be wrong to take a rigid approach (see, for example, the observation at [62] of Ng Huat Seng, which referred to such an observation from Lord Phillips, although that was in the context of clarifying that vicarious liability is not limited to an employment situation). In the present case, D3 accepted that it was Sujan’s employer.

[20] We add that neither of the judgments in Viasystems suggested that a permanent employer would never be liable in a similar situation as that facing D3. For example, although D3 sought to distinguish Viasystems by suggesting that there was a representative from the permanent employer on site, that was not the basis of the decision of either May LJ or Rix LJ.

[21] From D3’s point of view, it seemed unfair that a permanent employer should be liable at all for the negligence of a worker where the permanent employer itself was not guilty of any negligent conduct. For example, D3 mentioned that its employment, training and selection of Sujan did not bear any nexus with the operative negligent act in question and there was no suggestion that Sujan was not qualified to operate the excavator or that D3 had made a wrong choice in selecting Sujan for the work.

[22] All that can be said, at present, is that the absence of direct control by the permanent employer does not mean that the permanent employer is exempt from vicarious liability. A permanent employer may not be directly negligent itself. The question is whether it should be vicariously liable for the action of its employee where it has no direct control over that employee’s conduct at the time of the accident. The fault in question is not that of the permanent employer but of the employee. Nevertheless, the permanent employer may be vicariously liable to the injured party because of policy reasons, some of which have been mentioned in Viasystems, Christian Brothers and Ng Huat Seng. That is the very purpose of the doctrine of vicarious liability – to impose liability on an employer for an employee’s tort, even though the employer was not directly at fault for the tort (see, eg, Viasystems at [18]). Therefore, D3’s submission that it did not have control over Sujan’s actions on the day of the accident not only missed the point but also did not raise any novel issue of public importance.

[23] If employers like D3 still consider the legal position to be unfair, there are options available to them.

(a) First, they may seek a contractual indemnity from the temporary employer for the conduct of the employee. The value of that indemnity would depend on the scope of the indemnity and the financial strength of the temporary employer.

(b) Second, they may seek insurance cover for vicarious liability for the actions of the employee in such a situation. The scope of such a cover would have to be carefully framed.

[24] Accordingly, we concluded that leave to appeal should not be granted for the Dual Vicarious Liability issue. The appropriate inquiry has been set out in Ng Huat Seng. The mere application of that inquiry to a given factual scenario, which is the situation in this case, does not satisfy any of the grounds to grant leave to appeal.

[26] As the Judge stressed at [82] of its written judgment, none of the defendants appeared to appreciate the distinction between (a) the defendants’ liability vis-à-vis the plaintiff; and (b) the apportionment of liability as between the defendants only. The defendants had focused on their liability vis-à-vis the plaintiff. D3’s argument for 15% liability was made in that context only.

[31] We add an observation. We accept that it may not be uncommon for a possible tortfeasor to overlook making a formal claim for contribution from another tortfeasor. However, such a situation often arises because of the omission of the solicitor concerned who should know better than to launch a defence without considering a formal claim for contribution against another tortfeasor. Each such solicitor should be immediately aware of the possible need to seek contribution from another co-defendant under ss 15 and 16 of the CLA where there is possibly more than one tortfeasor, and then consider taking the step to file a formal claim for contribution.