Chan Yau Yik v. Lung Kwong Hung, Thoms and Another

CACV000007/1982

Tort - negligence - vicarious liability - driver of public light bus paying fixed charge for use of vehicle and keeping all fares received - driver having right to decide if, when and where he "plied for hire" - no delegation of task of driving by owner to driver - owner not liable.

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Coram: Sir Alan Huggins, V.-P., Yang & Barker, JJ. A

Date of hearing: 18 March 1982

Date of handing down judgment: 25 March 1982

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JUDGMENT

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Sir Alan Huggins, V.-P. :

1. Public light buses are an established part of the Hong long scene. There are many of them and from time to time they are involved in accidents. Not unnaturally some owners have sought to devise means of avoiding liability for damage caused by the negligence of the drivers. The important question in the present case is whether the appellant Owner has successfully avoided liability for damage caused to the Plaintiff by the undoubted negligence of the Driver of his bus. The trial judge held that he had not. The Appellant contends that the judge, having come to the right conclusion as to the law which ought to be applied, has applied it wrongly to the primary facts which he had found.

2. The Owner engaged a company to manage his bus. The learned judge observed that liability was not to be evaded by the interposition of any number of managers between the Owner and the Driver, and that the test must be:

"If the owner himself had made the arrangements directly with the driver instead of through an intermediary would he have been liable for the driver's negligence? "

That was clearly right.

3. There was no evidence as to the full terms of the arrangement between the Owner and the company but the managing director of the company gave evidence that it "hired out" buses to drivers who wished to use them.  The Owner paid the insurance premiums and paid the company $200 a month as a "management fee." Out of this the company provided "spare" tyres - by which, I suspect, vas meant replacement tyres - and a cleaning service. In fulfilment of this arrangement the company advertised in the "employment column" of newspapers in the following terms:

"Our company employs experienced public light bus drivers. We invite experienced public light bus drivers to come to our company and register themselves and we will hire out public light buses to them. "

It will be seen at once that the advertisement was misleading in that it refers first to employment and then to hiring out. The respondent Driver was apparently one of those who answered the advertisment. What contract was in fact made with him is necessarily to be ascertained from the evidence. Neither the Owner nor the company paid anything to the Driver, but the Driver paid to the company, for the account of the Owner, an agreed sum for each shift during which the bus was available for his use. It was entirely up go the Driver, if, when and where he plied for hire (assuming that to be a correct term for the act of soliciting passengers for carriage in a bus) and clearly his liability to pay the agreed amounts to the Owner was not dependent upon his having received them by way of fares. In that respect (inter alia) the case is distinguishable from Powles v. Hider (1856) 6 El. &B1. 207. The bus was apparently available for the use of the Driver at all times, but he was entitled to give three days' notice of his intention not go drive and, if he did so, a substitute driver would be found. The Driver put all his takings into his own pocket, but, in addition to the fixed sum payable to the company for each shift, the Driver had to pay for fuel and to make good any damage. The managing director said that the Driver is told to keep public light bus in good repair , but it is not clear to me whether that required him to effect routine maintenance since he said further: when public light bus has to be tested it is driven by staff of garage to which we send it for repair before hand."

4. The judge found it unnecessary to decide whether the Driver was the servant of the Owner, because he rightly concluded that the question which he had to decide was :

"Did the 1st defendant owner delegate a task to the 2nd defendant driver to do something for his (the lst defendant's) benefit? "

However, he went on :

"Undoubtedly the 1st defendant did delegate the task of driving his 'bus to the 2nd defendant, albeit through the Hong Kong public Light Bus Trading Co., Ltd., who "found" the 2nd defendant for him. Was the driving of the 'bus for the 1st defendants benefit? I think that I may safely assume that no one purchases and licences a public light bus for any other purpose than that it shall ply for hire with a view to his enrichment. And whether such enrichment takes the form of hiring charges or some other form seems to me to be altogether immaterial."

With great respect I think that in this passage the judge abandoned the question which he had properly posed for himself and reverted to the "interest or benefit" test which was rejected by the House of lords in Morgans v. Launchbury 1973 A. C. 127. The Owner did not delegate the task of driving his bus at all and the driving of it did not (at least directly) benefit him in any way. It is doubtless fair to assume that no one purchases and licenses a public light bus for any other purpose than that it shall be used to ply for hire, and it is also fair to assume that a person who does purchase and license such a vehicle expects to be enriched as a result, but it is not to be assumed that he will ply for hire himself or that his enrichment will result from the plying for hire rather than from a hiring to someone else for the purpose of plying for hire. In the present case it mattered not to the Owner whether the Driver plied for hire, provided that he paid the hire charges. The Driver was engaged solely upon his own business and any enrichment resulting from that business was his and his alone.

5. In Lam Chun lan v. Lo King-shing 1980 Victoria District Court Civil Action No. 5483 (reported only at 12 H. K. L. J. 85) another judge in a somewhat similar case inferred an agency from what he described as a request by the owner of the public light bus and the fact that the owner's name and address appeared on the door of the vehicle. Although there was no evidence of this before the judge in the present case, the name and address of the Owner no doubt also appeared in a conspicuous place inside the public light bus, since that was required by reg. 137c(b) of the Road Traffic (Construction and Use) Regulations.  Whatever evidence of a request there may have been in that case there was certainly none here: the fact that the Owner, through the management company, advertised in the manner indicated could not constitute a request by him that any person who hired a vehicle as a result of the advertisement should drive as the agent of the Owner. The presence of the Owner's name and address pursuant to the regulations equally could not have any bearing on the relationship between the Owner and the Driver. If it be thought that the person whose name and address is thus marked on a vehicle should always be vicariously liable for the negligence of the driver of that vehicle, regardless of the legal relationship between them, it must be for the Legislature so to enact, for that would be a sweeping change in the law.

6. We were referred to a decision of mine in the District Court, Jor Sau Tong Medicine Co. v. Lo Yiu [1960] H. K. C. L. R. 141, where the evidence bore a superficial resemblance to the evidence here and where I held that the owner of the van was liable for the negligence of the driver. Unfortunately the headnote stated, inaccurately, that I had found that "the 1st Defendant was a bailee of the van under a contract of hire and was the agent of the 2nd Defendant". That would have been a contradiction. A reading of the judgment shows that in truth I disbelieved the evidence that the 1st Defendant was a bailee under a contract of hire. I gave reasons for my disbelief and my conclusion was apparently not challenged on appeal. Here the judge made primary findings which should inevitably have led hint to the conclusion that the Driver was a bailee under a contract of hire, and yet the judge found him to be an agent. It is this inconsistent finding of which the Owner complains and which forms the crux of the appeal.

7. Mr. Lee on behalf of the Plaintiff sought to argue that some kind of statutory agency arose by virtue of the tents of reg. 5 of the Road Traffic (Public Services Vehicles) Regulations in that there was a personal duty imposed by the public light bus licence on the licensee to provide an efficient public light bus service. This contention was not open on the pleadings, was not argued before the District Judge and notice of it was not given to the Appellant by cross notice or otherwise. We declined to allow it to be taken before us.

8. It is to be observed that the Driver as well as the Plaintiff was made a respondent to this appeal, although no relief was sought against him. He did not appear at the hearing.

9. For the reasons given I would allow the appeal and enter judgment for the Appellant, the 1st Defendant in the action.

Yang, J. A. :

10. I agree.

Barker, J. A. :

11. I agree.

25th March 1982.

Representation:

Miss M, Yuen (Fairbairn & Kwok) for Appellant.

S. Lee (Rowdget W. Young & Co.) for 1st Respondent.

2nd Respondent not appearing.