In Yeung Mei Hoi v Tam Cheuk Shing & Anor  4 HKC 1, the Court of Appeal considered whether an employee's tortious act and his employment were so closely connected such that it was fair and just to hold the employer vicariously liable for his actions. The first defendant and plaintiff worked as security guards in a residential estate managed by the second defendant. The first defendant assaulted the plaintiff, his supervisor, after being accused of not fulfilling his duties. The first defendant did not contest the case, and judgment on liability was entered against him. The second defendant, being the employer, disputed the claim.
At trial, the judge considered that the employer was not vicariously liable because it could not fairly be said that the first defendant carried out the assault in the course of executing his duties.
On appeal by the plaintiff, it was held that the trial judge had applied the close connection test too narrowly. That test holds that an employer will be held to be vicariously liable where the connection between the employee's unauthorized tortuous act and his or her employment is so close to make it fair and just to hold the employer vicariously liable. The Court of Appeal referred to Various Claimants v Catholic Child Welfare Society  2 AC 1, which set out five criteria to be met that indicate that it is fair, just, and reasonable to impose vicarious liability on the employer. That case highlighted that the close connection criterion must involve a risk sufficiently inherent in or characteristic of the employer's business.
In the circumstances, since the second defendant had put a system of supervision and discipline in place, the plaintiff should have made enquiries when a subordinate was not performing his or her job duties. As such, there was an inherent risk that the subordinate might react in an unauthorized way, such as swearing and assault as in the first defendant's case. Since the risk could have been insured against by the second defendant, the second defendant was vicariously liable for the plaintiff's injury suffered during the course of employment.