Jerry Chen v. Whirlpool (Hong Kong) Ltd

HCPI 787/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.787 OF 2001

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BETWEEN

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Before : Hon Suffiad J in Court

Dates of Hearing : 15 – 17, 20 – 22, 27 and 30 September 2004

Date of Judgment : 4 February 2005

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J U D G M E N T

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1.The plaintiff brings this claim against the defendant, as the employer of the plaintiff, for damages for negligence, breach of employer’s duty and breach of employment contract arising from a traffic accident in which the plaintiff sustained personal injuries.  The accident happened on 13 October 1998 in Beijing when the plaintiff was being driven by car, in the course of his employment, to attend a sales conference.

2.In the trial, and therefore this judgment, I am only concerned with the issue of liability since there was an earlier order for split trial.

3.It is necessary to be appraised of the background to this matter which is not in dispute.

Background

4.Whirlpool is a well-known manufacturer of home appliances including air conditioners and microwave ovens etc., under various brand names including the name Whirlpool.

5.The defendant is and was at all material times a limited company incorporated in Hong Kong, and forms part of the Whirlpool group of companies.  Its offices in Hong Kong is situated at 16^th floor, Paliburg Plaza, Yee Wo Street, Causeway Bay, Hong Kong.

6.The Whirlpool group is headed by Whirlpool Corporation USA, the ultimate parent company of the group worldwide and which is based in Benton Harbour, USA.  Whirlpool Overseas Holding Corporation, a wholly owned subsidiary of Whirlpool Corporation USA, holds 99% of the shares in the defendant.

7.Whirlpool Narcissus (Shanghai) Co. Ltd (hereinafter referred to as “Whirlpool Narcissus”) is a joint venture between the Whirlpool group and a PRC company by the name of Shanghai Narcissus.  Whirlpool Narcissus has its offices in Shanghai as well as a branch office in Beijing.  Whirlpool Narcissus is a PRC company and as such it is a totally different and a separate legal entity from the defendant.

8.At all material times Whirlpool Narcissus was headed by Hank Orme until March 1999.

9.Whirlpool Asia is an administrative unit of the Whirlpool group, but not a legal entity in itself.  It was headed by Robert Hall from June 1996 until about June 1998 and oversaw the operation of all subsidiaries within the Whirlpool group in Asia including the defendant and Whirlpool Narcissus.  Initially the office of Whirlpool Asia was in Singapore.  In December 1996, the offices of Whirlpool Asia was relocated to Hong Kong and, as a matter of convenience, was housed together with the offices of the defendant, but on different floors of the same building.  After June 1998, because of internal re-organization, the role of Whirlpool Asia in overseeing operations in Asia was taken over by Whirlpool Europe, headed by Jeff Fettig.

10.By a written contract of employment dated 10 December 1997, the defendant employed the plaintiff as a Commercial Director.  It was expressly stated in that contract of employment that the plaintiff would be “based in Shanghai” and “with responsibilities to Whirlpool Narcissus (Shanghai) Co. Ltd.”

11.Under that contract of employment, the plaintiff started work on 1 January 1998 and has at all times carried out his work at Whirlpool Narcissus and was based in Shanghai.

The accident

12.On 13 October 1998, the plaintiff was being driven by car from Beijing Airport to a resort on the outskirts of Beijing to attend a sales conference organised by the commercial department of Whirlpool Narcissus when the car in which he was travelling was involved in an accident as a result of which the plaintiff suffered personal injuries.

13.At the time of the accident, the car in which the plaintiff was travelling, was driven by Zheng Guo Bin (“Zheng”) who was employed by Whirlpool Narcissus as a technical administration representative in the service section of the commercial department and who was stationed at the Beijing branch office of Whirlpool Narcissus.

14.There is no dispute that the accident (and therefore the injuries suffered by the plaintiff as a result of such accident) was caused by the negligent driving of Zheng.

15.The plaintiff’s pleaded case as to the occurrence of the accident was that Zheng overtook vehicles in front of him at a high speed and by driving onto the opposite lane resulting in a head on collision with another vehicle coming in the opposite direction.

16.The accident, as described in a Form 2 and also from Zheng’s own statement (although Zheng was not called as a witness) which was relied on by the plaintiff, states that due to roadworks, two lanes of the opposite carriageway were closed to traffic and that traffic coming from the opposite direction was diverted onto the outer lane of the two lanes of the carriageway on which the plaintiff’s car was travelling.  As it was dark and raining, Zheng failed to see the warning signboard some 50 meters before the diversion.  When Zheng was overtaking vehicles by driving on the outer lane (where oncoming traffic had been diverted) he collided with an oncoming vehicle so diverted.

17.In so far as negligence is concerned, it is clear from both these versions that Zheng must have been negligent in the driving of the car carrying the plaintiff.

The plaintiff’s claim

18.On the very simple and straightforward facts referred to by way of background above, the plaintiff brings this claim against the defendant, which claim is framed as follows :

(a)	The plaintiff’s primary case is that the plaintiff is the employee of the defendant and that the contract of employment provides that the defendant is under a duty to provide the plaintiff with a car and driver.  That duty to provide a car and driver was delegated by the defendant to Whirlpool Narcissus generally and who in turn sub-delegated it to Zheng on the specific occasion when the accident happened.  Since it is not in dispute that the accident was caused by Zheng’s negligent driving, therefore the defendant is vicariously liable to the plaintiff for the negligence of Zheng’s driving, Zheng being the agent of the defendant in driving the plaintiff to the sales conference.
(b)	The alternative case run by the plaintiff, if he fails on his primary case, is that the defendant (and for that matter also Whirlpool Narcissus) were negligent in that they should not have allowed Zheng, who was neither an experienced driver nor a professional driver, to have driven the plaintiff to the resort outside Beijing.  By doing so the defendant had failed to take care of the reasonable safety of the plaintiff and was therefore in breach of its duty to the plaintiff as employer.

19.In so far as the alternative case of the plaintiff is concerned, counsel for the plaintiff opened his case on the footing that there is involved a factual dispute between the parties.  It was thought by counsel for the plaintiff that the defendant disputes the fact that it was the plaintiff’s employer.  In actual fact the defendant does not dispute that.  That has been made quite clear by counsel for the defendant in his closing submission that the defendant accepts that it was the employer of the plaintiff.

20.What is disputed by the defendant is that while the defendant accepted that it was the general employer of the plaintiff, it is the defendant’s case that the services of the plaintiff had been so completely transferred to Whirlpool Narcissus by the defendant that it was Whirlpool Narcissus which had full control of the plaintiff in the work that the plaintiff was doing for Whirlpool Narcissus and therefore Whirlpool Narcissus was the employer pro hac vice of the plaintiff.  It is therefore the defendant’s case that the defendant did not owe any duty of care towards the plaintiff as the general employer but that it was Whirlpool Narcissus which owed such duty to the plaintiff as the employer pro hac vice.

21.A great deal of evidence as well as submission had been made relating to the employment of the plaintiff when there was in fact no dispute that the defendant remained the general employer of the plaintiff throughout.

22.Indeed the plaintiff went as far as to raise estoppel in an attempt to show that the defendant cannot now deny that it was the employer of the plaintiff, having settled the plaintiff’s employees’ compensation claim arising from this accident.

23.All that evidence relating to the question of employment of the plaintiff becomes quite insignificant, if not irrelevant, in the light of the clear statement by counsel for the defendant that the defendant does not dispute being the employer of the plaintiff.

24.Accordingly in this judgment, I shall deal with those factual dispute relating to the services of the plaintiff and the issue of control in relation to the transfer of the plaintiff’s services to Whirlpool Narcissus by the defendant.  It will not be necessary for me to deal with the evidence relating to the employment of the plaintiff by the defendant which is not in dispute, nor for that matter the estoppel issue.

Factual dispute of the parties

25.In so far as the factual disputes between the parties goes, the plaintiff’s case can be summarised as follows.

26.Whirlpool Narcissus, being a joint venture project of the Whirlpool group in China, was experiencing problems in its business in China which were not fully understood by the Whirlpool group.

27.The defendant was the head office of Whirpool Asia and the plaintiff was head hunted by the defendant to be a commercial director and sent to Shanghai to work for Whirlpool Narcissus with a view to investigating and identifying the problems that Whirlpool Narcissus was facing.  In this respect the plaintiff was specifically told to report directly to the defendant and also to Benton Harbour.  The plaintiff was further told that his investigation and his reports would be of importance to the Whirlpool head office concerning its decision whether to remain in China and would be directly relevant to the defendant’s exposure in Hong Kong.

28.The plaintiff carried out these duties and having discovered the underlying causes of the problems reported not only to Hall, but also to Fettig and Ralph Hake both verbally and in quarterly reports.

29.It was the contents of the plaintiff’s reports that persuaded the Whirpool group to remain in China and also led to the ousting of Orme from Whirlpool by its head office.

30.Moreover, the duties of the plaintiff as commercial director of Whirlpool Narcissus covered the distribution of Whirlpool products which the defendant imported into China.

31.As against this, the defendant’s case on the disputed facts can be summarized as follows.

32.The problems which Whirlpool was experiencing in its joint venture in China had already been recognized by Whirlpool after an investigation had been carried out in 1997.  One major problem identified by that investigation was in respect of sales with the difficulties flowing directly from the fact that within Whirlpool Narcissus, sales was run by an appointee of the joint venture partner in the PRC and it was appreciated that such a problem could only be solved if Whirlpool could gain effective control of Whirlpool Narcissus and appoint its own man to run sales.

33.As a result the executive committee of Whirlpool Corporation USA decided in 1997 to terminate two of the four joint ventures in China and to concentrate in the long term on Whirlpool Narcissus and Shunde (another joint venture of the Whirlpool group in the PRC) who were dealing in washing machines and microwave ovens respectively.

34.The plaintiff was head hunted by Whirlpool Narcissus and it was thought that with his background being Chinese but specifically Shanghainese, he fitted the criteria of what was required to enable him to deal with the problem already identified.

35.The defendant was in no way involved in the decision to hire a commercial director for Whirlpool Narcissus and it was never intended that the plaintiff should do any work whatsoever for the defendant.  The defendant played no part in interviewing or deciding on the plaintiff’s employment.  That was entirely a Whirlpool Narcissus matter for Orme to decide subject to the approval of Hall as head of Whirlpool Asia.

36.The fact that the contract of employment of the plaintiff was entered into with the defendant was due to a number of reasons.  Firstly, the time when that contract was entered into with the plaintiff, the Whirlpool group was in the process of, but had not yet gained control of Whirlpool Narcissus.  Secondly, the plaintiff himself did not wish to be employed by a PRC company.  Thirdly, the plaintiff was engaged as an expatriate staff of Whirlpool with his loyalties to Whirlpool albeit that he was engaged to work for the joint venture in China being Whirlpool Narcissus.

37.The plaintiff had no “macro” duties but was hired specifically and for the single purpose of heading up Whirlpool Narcissus’ sales or commercial department and was expected to and did follow the normal reporting procedure.  The plaintiff was never asked to and never did report to the defendant, but instead he reported to Orme as the General Manager of Whirlpool Narcissus who in turn reported to Hall as head of Whirlpool Asia.  Hall reported to the executive committee of Whirlpool Corporation USA at its head office.

38.The plaintiff prepared monthly and quarterly reports which are normally required from all heads of department and in so doing the plaintiff was only doing what was required of him as head of the commercial department of Whirlpool Narcissus.

39.The defendant and Whirlpool Narcissus are entirely separate companies and entirely unconnected in terms of their respective businesses.  Whirlpool Narcissus was never involved in the distribution of products imported into China by the defendant.

40.The plaintiff never did any work for the defendant and at no time was he in any way subject to any control or supervision by the defendant.

41.Moreover, the normal reporting done by the plaintiff had no impact whatsoever on any decision making process in the head office at Benton Harbour as the decision to long term commitment to carry on business in China had already been made before the plaintiff was engaged. 

42.The plaintiff was never required to and did not report to Hall or Hake or Fettig in the sense contended for by the plaintiff.

Assessment of the evidence and finding of fact

43.The case of the plaintiff as summarized above came from the evidence of the plaintiff.  That of the defendant came from the evidence of Hall, Orme and Fettig.

44.I did not find the plaintiff to be an untruthful witness in the sense that he was deliberately telling lies or untruths with a view to mislead.  However, it became clear from all the evidence and from the cross examination of the plaintiff that he was labouring under a number of misapprehensions when giving his evidence.  Moreover, the plaintiff, no doubt due to such misapprehensions, quite wrongly overestimated his own importance in respect of the work that he was asked to carry out in Whirlpool Narcissus.

45.Firstly, the plaintiff was under the misapprehension that the defendant was the head office of Whirlpool Asia.

46.Secondly, he was also under the misapprehension that Hall was synonymous with the defendant.

47.Thirdly, he laboured under the misapprehension that the reports prepared by him found its way to Hall either directly or through Orme and that therefore he was reporting to Hall, and therefore to the defendant.

48.The plaintiff had quite wrongly assumed, without any actual knowledge, that his reports were being relied on by the head office in Benton Harbour to guide them in making a decision whether or not to continue Whirlpool’s commitment in China.

49.The plaintiff had also quite wrongly assumed, again without any actual knowledge, that it was as a result of his reports that Orme was replaced as head of Whirlpool Narcissus by Fettig and was asked to leave the Whirlpool group.

50.Lastly, the plaintiff had also quite wrongly assumed that stocks left behind by Greater China Inc., and which was later disposed of by Whirlpool Narcissus were stocks imported into China by the defendant.

51.The combined effect of all the misapprehension by the plaintiff is such that it made the totality of the plaintiff’s evidence relating to the disputed factual issues between the parties quite unreliable.

52.On the other hand, I found that Orme, Hall and Fettig were not only truthful witnesses but that the evidence they gave were matters upon which they had actual knowledge themselves and that their evidence were reliable in that much if not all of it could be supported from other sources such as the 1997 Annual Report.

53.Accordingly, I have no hesitation in accepting the evidence of the defendant’s witnesses where they differ from that of the plaintiff.

54.I therefore make the following findings of fact :

(1)	the plaintiff was head hunted by Whirlpool Narcissus through Orme to work for Whirlpool Narcissus;
(2)	the contract of employment of the plaintiff was entered into with the defendant albeit that the defendant had no part to play in either the interviewing or the engagement of the plaintiff;
(3)	the plaintiff had no “macro” duties of any nature and his reporting was in no way different to the reporting that was required of all heads of departments in the Whirlpool group;
(4)	the plaintiff never did any work for the defendant and was never asked to;
(5)	the plaintiff was never asked to and never made any report to the defendant;
(6)	apart from being within the Whirlpool group, the respective businesses of  Whirlpool Narcissus and the defendant were quite separate business and the defendant had no control or authority over Whirlpool Narcissus nor any responsibility for it; and
(7)	at all times the defendant, apart from being the employer of the plaintiff, did not have any control or supervision over the work that the plaintiff did for Whirlpool Narcissus.

The plaintiff’s primary case

55.The primary case of the plaintiff is not dependent on any of the disputed facts between the parties and therefore not dependent on the findings of fact made by me in the earlier part of this judgment.

56.It was also submitted by counsel for the plaintiff that the plaintiff’s primary case is not dependent on any negligence of the defendant, but that it is based on vicarious liability for the admitted negligence of Zheng’s driving.  The crux of the argument put forward by the plaintiff in his primary case is that the defendant is vicariously liable for the negligence of Zheng, being the agent of the defendant.

57.The plaintiff seeks to establish that Zheng was driving as the agent of the defendant in the following ways.

58.Firstly it was submitted that under the employment contract, the defendant was under the obligation to provide a car and driver to the plaintiff.  However, when the plaintiff was posted to Shanghai to work for Whirlpool Narcissus, that contractual obligation was passed on by the defendant to Whirlpool Narcissus to perform.  It was performed by Whirlpool Narcissus in that a company car and a full time driver was provided to the plaintiff for his travel within Shanghai.  On the occasion of the accident however, when the plaintiff was to attend the sales conference organized by Whirlpool Narcissus which was to be held at a resort outside Beijing, Whirlpool Narcissus had hired a hire car and had arranged for Zheng (being an employee of Whirlpool Narcissus based in the Beijing branch) to drive the plaintiff to the resort where the sales conference was to be held.  It follows therefore that Zheng being sub-delegated the task to drive the plaintiff became the agent of the defendant when driving the plaintiff at the time of the accident even though Zheng was not an employee of the defendant.

59.Secondly, it was submitted by the plaintiff that the defendant was, as the employer of the plaintiff, under a duty to take all reasonable care to ensure the safety of the plaintiff.  That duty was a non-delegable duty.  Despite that, the defendant had seen fit to delegate such duty to Whirlpool Narcissus who in turn sub-delegated it to Zheng to drive the plaintiff to the resort outside Beijing to attend the sales conference.  In doing so, the defendant made itself liable to the plaintiff for the negligence of Zheng in carrying out such duty delegated to it by the defendant.

60.Thirdly, the plaintiff seeks to rely upon the authority of a line of cases relating to loan of chattel, usually a car, where the driver being the agent need not necessarily be the servant or employee of the car owner but could be any person driving on the authority and for the purpose of the owner.  This line of cases includes Launchbury v. Morgans [1973] AC 127 and also Hewitt v. Bonvin [1940] 1 KB 188.  The plaintiff relies on these authorities to show that Zheng was driving as the agent of the defendant although Zheng was not an employee of the defendant.

61.Counsel for the plaintiff relies on the oft quoted words in the judgment of du Parc LJ in Hewitt v. Bonvin at pages 194-195 where he said :

“The driver of a car may not be the owner’s servant, and the owner will be nevertheless liable for his negligent driving if it be proved that at the material time he had authority, express or implied, to drive on the owner’s behalf.  Such liability depends not on ownership, but on the delegation of a task or duty.”

and also the words in the judgment of Lord Pearson from the case of Launchbury v. Morgans where he said at page 140 :

“If the car is being driven by a servant of the owner in the course of the employment or by an agent of the owner in the course of the agency, the owner is responsible for negligence in the driving.  The making of the journey is a delegated duty or task undertaken by the servant or agent in pursuance of an order or instruction or request from the owner and for the purposes of the owner.  For the creation of the agency relationship it is not necessary that there should be a legally binding contract of agency, but it is necessary that there should be an instruction or request from the owner and an undertaking of the duty or task by the agent.”

62.On these principles, the plaintiff submits that on his primary case, the issue of liability should be governed simply by the maxim “respondeat superior” and that the defendant, being the employer, should be vicariously liable for the negligent driving of Zheng, irrespective of any negligence on the part of the defendant or even that of Whirlpool Narcissus.

The alternative cases of the plaintiff

63.Although, in his opening counsel for the plaintiff had put forward one alternative case, when it came to final submission, the alternative case for the plaintiff was enlarged to three alternative cases.  I shall therefore deal with all three alternative cases put forward by counsel for the plaintiff in his final submission.

64.The first alternative case of the plaintiff is put on the footing that the defendant is now estopped from alleging that the plaintiff was loaned or transferred to Whirlpool Narcissus by reason of the fact that the plaintiff says that in the employee’s compensation proceedings the defendant, by settling the employee’s compensation claim, has admitted that the accident, arose out of and in the course of the plaintiff’s employment with the defendant.

65.The second alternative case of the plaintiff is that the defendant has failed to discharge the high burden upon it for the court to come to the finding that the plaintiff was so completely loaned or transferred to Whirlpool Narcissus by the defendant such that liability should attach to the temporary rather than the permanent employer.

66.The third alternative case for the plaintiff is that even if the court comes to the finding that the plaintiff was so completely loaned or transferred to Whirlpool Narcissus, the defendant is nevertheless liable for the accident to the plaintiff, because the defendant, as the employer of the plaintiff, is not entitle to delegate its duty of care towards the plaintiff being its employee to Whirlpool Narcissus but is still liable for the negligence whether of Zheng or of Whirlpool Narcissus who was performing the terms of the contract between the plaintiff and the defendant.

67.In this respect, it was submitted by the plaintiff that the duty owed by the defendant to the plaintiff to provide the plaintiff with a car and driver was a non-delegable duty on the part of the defendant.  It follows, therefore, that if the defendant chose to delegate that duty to Whirlpool Narcissus (who in turn sub-delegated the driving to Zheng) then in those circumstances, the defendant becomes liable as principal for the negligence of either Zheng or Whirlpool Narcissus.

68.It was also submitted by the plaintiff that Whirlpool Narcissus was itself negligent in the discharge of that duty by failing to provide a professional driver to the plaintiff but instead instructed Zheng, who had only held a driving license for some two years at the time of the accident, and who was not a professional driver, to drive the plaintiff to the sales conference.  In so submitting, it was also submitted by the plaintiff that it was implied in the contractual term that a “driver” meant a professional driver.  On that basis, it was said that Whirlpool Narcissus was in breach of that contractual term when carrying it out in the way that it did.

Decision on liability

69.I shall deal with the primary case of the plaintiff first, which is based or agency and vicarious liability. 

70.On the question of agency, namely whether Zheng was the agent of the defendant when driving the plaintiff to this sales conference, it is accepted that there is nothing to show that the defendant had requested or instructed Zheng to drive the plaintiff.  Indeed there is not the slightest evidence that the defendant even knew of the sales conference taking place.  There is no dispute that at the material time Zheng drove the plaintiff on the instructions of Whirlpool Narcissus.  On this point of agency therefore, the plaintiff bases its argument on the fact that the defendant had delegated to Whirlpool Narcissus the duty to provide a car and driver to the plaintiff.  In turn, Whirlpool Narcissus instructed Zheng to drive the plaintiff to the sales conference.  On such facts, the plaintiff says that Zheng thereby became the agent of the defendant when driving the plaintiff to the sales conference when the accident happened.

71.In my view “control” is an important element in establishing agency and vicarious liability in the law of tort.  The evidence in the present case, while it may show control over Zheng by Whirlpool Narcissus (Zheng being its employee), what it does not show is that the defendant had any form of control over either Whirlpool Narcissus or Zheng.  Therefore one important element to establishing agency and therefore vicarious liability is already missing in the plaintiff’s case.

72.Putting aside the elements of “control” for the time being, the highest the plaintiff can pitch his case, based on vicarious liability is that the driving of the plaintiff by the Zheng was impliedly authorised by the defendant and was so intimately representative of the defendant that the defendant could not be divorced from the act.

73.However in the case of Wong Wai Hing [2001] 1 HKLRD 736, in his judgment, Rogers VP affirmed that there is no general principle of liability for the tortuous acts of agents and that liability is only imposed in special circumstances.  The test seems to be whether the agent acted in a truly independent way or whether his actions are so intimately representative of the principal that the principal cannot be divorced from them and therefore becomes liable for those acts.

74.This view is reflected also by the words of Le Pichon JA in the same case at page 770 where she said :

“The principle of law that can be distilled from that case [Colonial Mutual] is that a principal may be liable for the torts of his agent where the agent was not acting in an independent capacity but in a representative one standing in the place of his principal and the very service to be performed consisted in standing in the principal’s place.  The liability is therefore personal rather than vicarious.  The function entrusted is that of representing the person who requests its performance, not merely in a transaction with others but is an activity where others can be seen to be so closely affected.  That which gives rise to liability must be done for and on behalf of another, which is not the same as saying simply that it is for his benefit or at his request.”

75.In the present case, it is quite unreal to say that Zheng was acting in a representative capacity of the defendant when he drove the plaintiff to the sales conference for the simple reason that the defendant was under no obligation or duty to drive the plaintiff (as opposed to providing a car and driver).  The defendant was only under a contractual duty in the employment contract to provide the plaintiff with a car and driver.

76.If the argument of the plaintiff is correct on this point, it would effectively mean that any employer who is under a duty to provide transportation for its employee when travelling on the business of the employer would be liable for the negligence of taxi drivers or commercial airline pilots who were driving or piloting the vessel carrying that employee.

77.Turning now to deal with the point of non-delegable duty argued by the plaintiff in its primary case, I accept at once that there is always a duty upon an employer to take reasonable care for the safety of his employees in the course of their employment.  This duty is personal to the employer and as such non-delegable.  However, it is important in the present case to look at the scope of that non-delegable duty of the employer in order to determine whether the defendant, as the employer of the plaintiff, was in breach of the non-delegable duty.

78.In so far as the scope of that duty is concerned, the employer’s duty to take reasonable care of the safety of its employees have for long been conveniently subdivided into five separate heads (which may at times overlap).  The five heads are : (i) to provide a safe place of work, including a safe means of access; (ii) to employ competent employees and supervision; (iii) to provide and maintain adequate plant and appliances; (iv) to provide a safe system of work; and (v) other cases.  (See Chapter 10, Charlesworth and Percy on Negligence, 10^th edn.)

79.It is clear from the facts of this case that the accident in the present case does not fall into any of the first four categories above, for although, the plaintiff was in the course of his employment at the time of this accident, he was being transported to the sales conference by car and not actually carrying out his work as such.  The only other category left is the “other cases” category.  This “other cases” category was intended to be a catch-all where the facts of a particular case may not conveniently come within any of the first four heads.  But even so it is clear from the authorities and from paragraph 10-80 of Charlesworth and Percy on Negligence, 10^th edn that such duty on the employer is sometimes expressed as “so as to carry on his operations as not to subject those employed by him to unnecessary risk” (Smith v. Baker [1981] AC 325 at 362) which indicates that such duty is connected with the employer’s operations.

80.The accident in the present case arose not from the defendant’s operations (nor even that of Whirlpool Narcissus, but from the manner of driving of Zheng).  In that sense, there is no breach of the non-delegable duty to take reasonable care of the safety of the plaintiff at work.

81.Even if transporting the plaintiff does come within the operations of the defendant or that of Whirlpool Narcissus, the question whether the defendant or Whirlpool Narcissus was negligent in engaging Zheng to drive the plaintiff will be dealt with when I deal with the alternative cases of the plaintiff.

82.It must be borne in mind that the contractual duty to provide a car and driver must be kept distinct and separate from the duty to take reasonable care of the safety of the plaintiff as an employee.  These two duties cannot be muddled.  In my view they are two separate and distinct duties and quite different from each other.  A breach of the contractual duty to provide a car and driver does not necessarily result in a breach of the duty to take reasonable care of the safety of the plaintiff as an employee.

83.If for instance, an employer fails to provide any car or driver for use by the employee, the employer may be in breach of the contractual duty to provide a car and driver.  In those circumstances it does not follow that the employer must also be in breach of his duty to take reasonable care for the safety of the employee.  That breach would only result in the employee not having a car or driver to use at his disposal.

84.On the other hand, if the employer, pursuant to the contractual term to provide a car and driver, provided an employee with the use of a defective company car which resulted in injury to the employee, then the employer may be in breach of both the contractual term as well as his duty to take reasonable care for the safety of the plaintiff.

85.Once this distinction is appreciated, I cannot see how the contractual term to provide a car and driver is a non-delegable duty of the defendant employer.  On the other hand, the duty to take reasonable care for the safety of the employee will always remain a non-delegable duty of the employer.

86.In the present case, what was delegated by the defendant to Whirlpool Narcissus was the contractual term to provide a car and driver.  The defendant was under no duty to drive the plaintiff itself.  Whirlpool Narcissus had carried out that contractual term by providing a car and driver to the plaintiff for his use within Shanghai.  The arrangements made by Whirlpool Narcissus in instructing Zheng to drive the plaintiff during his business travel in Beijing does not make Zheng the agent of the defendant since Zheng was neither the employee of the defendant (and therefore not under the defendant’s control) and also because the defendant was under no duty to drive the plaintiff but only to provide him with a car and driver.

87.As for the argument of the plaintiff based on that line of cases involving loan of a chattel which includes cases such as Launchbury v. Morgans and Hewitt v. Bonvin, those decisions cannot assist the plaintiff in the present case for the simple reason that in that line of cases, the liability of the principal was based either on the principal being the owner of the car or having some form of control or rights over the car which was the chattel loaned.  In the present case, the car used to carry the plaintiff to the sales conference was a hired car, hired by Whirlpool Narcissus and has no connection with the defendant whatsoever.  There is therefore an insufficient nexus to connect the defendant in this case to the car used in the journey at the material time.  For this reason alone, I am of the view that those decisions in that line of cases can have no application here, nor for that matter the maxim “respondent superior”.

88.For these reasons, I come to the conclusion that the defendant is not vicariously liable to the plaintiff for the negligent driving of Zheng in the primary case put forward by the plaintiff.

89.I turn now to deal with the alternative cases put forward by the plaintiff.

90.The first alternative case of the plaintiff is on the estoppel point.  The estoppel is pleaded in paragraphs 2 and 3 of the Amended Reply.  The estoppel pleaded is that because the parties had settled the plaintiff’s claim for employee’s compensation in DCEC No.344 of 2000 for $2,294,015.75 by way of a Consent Summons filed on 21 May 2001 and that an order in the terms of that Consent Summons was made by Judge Carlson on 22 May 2001, the defendant is estopped from denying that : (i) it was the employer of the plaintiff at the time of the accident; (ii) the accident arose out of and in the course of the employment of the plaintiff with the defendant, and (iii) the defendant owed to the plaintiff those duties pleaded in the Amended Statement of Claim as the employer of the plaintiff.

91.It was stated at the outset of this judgment that the defendant has, throughout the trial accepted that it was the employer (albeit the general employer) of the plaintiff and does not deny that.

92.In so far as the plaintiff, in his final submission, now seek to argue that the defendant is estopped from alleging that the plaintiff has been loaned or transferred to Whirlpool Narcissus, that is not the estoppel pleaded by the plaintiff.

93.Quite apart from the failure to plead that, the settlement of the employee’s compensation claim by the parties can have no bearing on and does not affect the question whether or not the plaintiff has been loaned or transferred to Whirlpool Narcissus at the material time of this accident since the defendant remained at all times the general employer of the plaintiff.

94.In the circumstances, in so far as the question of the defendant being the employer of the plaintiff, that has never been denied by the defendant.

95.As for the question of the loan or transfer of the plaintiff to Whirlpool Narcissus is concerned, no estoppel can arise from the settlement of the plaintiff’s employee’s compensation claim by the defendant.  Moreover, that is not the estoppel pleaded by the plaintiff in the first place.

96.As to the second alternative case for the plaintiff, this is in fact the factual dispute between the parties as to whether the plaintiff’s services was so completely transferred to Whirlpool Narcissus by the defendant that Whirlpool Narcissus’s control over the plaintiff was to such an extent that it became responsible for the safety of the plaintiff instead of the defendant although the defendant remained the general employer as opposed to Whirlpool Narcissus being the employer pro hac vice.

97.On the facts as found by me above, I have no hesitation in coming to the conclusion that this was not simply a case of loaning of transferring one of its employees to Whirlpool Narcissus.  It is clear from all the evidence in this case that from the very outset, a commercial director was to be head hunted by Whirlpool Narcissus to work for Whirlpool Narcissus.  The defendant only came into the picture as the employer of the plaintiff for those reasons given by the defendant and which I have accepted in making my findings of facts above.  I therefore come to the further conclusion that in this present case, although the defendant remained at all times the general employer of the plaintiff, in actual fact, the services of the plaintiff was so completely transferred to Whirlpool Narcissus, that even the duty of care owed by an employer to its employee was also transferred to Whirlpool Narcissus in the case of this plaintiff.  It is difficult to visualize a case where the transfer of the services of an employee can be more complete than the facts of the present case.

98.I turn now to deal with the third alternative case of the plaintiff which is based on there being a non-delegable duty of the defendant, as employer, to provide a car and driver under the terms of the contract of employment.  It was further argued on behalf of the plaintiff that there should be implied into the contractual term to provide a car and driver for the plaintiff that the driver provided should be a professional driver.  Since Zheng was not a professional driver, it was submitted that Whirlpool Narcissus, and therefore the defendant (it having delegated such duty to Whirlpool Narcissus) was in breach of that term in the contract of employment.

99.In my view, it would be proper to imply into the contractual term to provide the plaintiff with a car and driver, that the driver provided should be a reasonably competent driver.  I do not accept that a professional driver should be implied into that contractual term of the contract of employment.

100.The evidence in the present case, which is accepted by the plaintiff, is that when in Shanghai the plaintiff was indeed provided with a car and driver by Whirlpool Narcissus and which was at his disposal seven days a week.  It was only when the plaintiff travelled outside Shanghai that special transport arrangements had to be made for him.  Indeed, it is the plaintiff’s own evidence that sometimes even when he travelled to the outskirts of Shanghai he did so by taxi.

101.Therefore, even if the contractual term to provide the plaintiff with a car and driver can be extended to cover travel arrangements of the plaintiff outside of Shanghai, in the present case, the evidence is to the effect that Zheng had held a valid driving licence in the PRC for some two years before the accident and during this period, he had never been involved in a traffic accident.  There is also evidence that Zheng had always been the person chosen to drive executives of Whirlpool Narcissus when they were on business in Beijing.  The fact alone that Zheng holds a valid driving license in the PRC, in my view, makes him a reasonably competent driver.  Given all the other circumstances, I do not accept the plaintiff’s contention that the defendant, or for that matter, Whirlpool Narcissus, was in breach of the contractual term to provide the plaintiff with a car and driver.

102.As to whether this contractual term to provide a car and driver for the plaintiff imposes a non-delegable duty on the defendant, this has already been dealt with by me in this judgment.

103.For all the reasons given above, I have come to the conclusion that the plaintiff has failed to prove negligence or any breach of employer’s duty on the part of the defendant, whether in his primary case or in any of his alternative cases such as to make the defendant liable to the plaintiff in respect of this accident.

104.Accordingly, the plaintiff’s claim against the defendant is dismissed with costs (order nisi) to the defendant, to be taxed if not agreed.  The plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.

Mr Michael Ozorio, SC leading Mr M.C. Chiu, instructed by Messrs Christine M. Koo & Ip, for the Plaintiff

Mr John Bleach, SC leading Mr Stewart Wong, instructed by Messrs Clyde & Co., for the Defendant