Lloyd v Ryan Borg (by his Tutor NSW Trustee and Guardian) [2013] NSWSC 245

Background

This case concerned a young child who suffered serious injury when an unregistered ‘bush basher’ Nissan Patrol owned by Mr Lloyd, lacking seat belts and a roof, overturned and rolled on a steep dirt track on Mr Lloyd’s 140 acre property. The driver of the vehicle was Ms Sogueco, who was a friend of Ms Shipard, Mr Lloyd’s de facto wife. Ms Shipard had been given general permission by Mr Lloyd to use the vehicle and allow others to drive it though Mr Lloyd was not present on the property on the relevant day nor was he aware that his wife had invited guests. The issue before the court was whether any liability could be imposed on Mr Lloyd in those circumstances.

The trial judge in first instance had determined that Mr Lloyd was liable through agency for the acts of his wife in allowing an inexperienced driver like Ms Sogueco, to drive such a vehicle over treacherous terrain. The Court of Appeal said that decision was made in error.

The Law

With regards to whether the wife was an agent of the owner, Gleeson JA quoted the following passage from the Law of Torts in Australia, 4th ed (2007) to illustrate that ‘agent’ can have two distinct meanings in the law of tort:

“First, an agent may be a person who is authorised to enter contracts on behalf of another… In the law of tort the term ‘agent’ has at times been given a wider meaning: it is used to indicate that one person acts with the authority of another (the principal). An agent in this sense may be a servant or an independent contractor or neither. Indeed, there may be no contract at all between principal and agent, but just authorisation by one party to act on behalf of another.”

With this in mind, he made the following statement in relation to the facts:

“In my view, the primary judge erred in failing to distinguish between these different meanings when concluding that Ms Shipard had ostensible authority from Mr Lloyd to use the vehicle on his property. This is because the findings by the primary judge (at [10] and [22]), that Ms Shipard could drive the vehicle on the property without seeking the permission of any person, including Mr Lloyd, that she had control of the vehicle whilst it was on the property, and on that day of the incident, she could say who would drive it and would not drive it, did not involve any notion of ostensible authority.”

Gleeson JA opined that for the owner in this case to be vicariously liable, he must come within the principle of Soblulsky v Egan [1960] HCA 9, which held:

“the owner or bailee being in possession of the vehicle and with full legal authority to direct what is done with it appoints another to do the manual work of managing it and to do this on his behalf in circumstances where he can always assert his power of control. Thus it means in point of law that he is driving by his agent. It appears quite immaterial that Soblusky went to sleep. That means no more than a complete delegation to his agent during his unconsciousness. The principle of the cases cited is simply that the management of the vehicle is done by the hands of another and is in fact and law subject to direction and control.”

His Honour then points to Scott v Davis in an effort to demonstrate the narrow focus and application of this principle. Scott v Davis concerned an injured passenger on a joy flight, who claimed that the owner of the aeroplane was liable for the pilot’s negligence. The passenger was ultimately unsuccessful. Gleeson JA commented firstly that whilst Soblusky was doubted and criticised by the High Court, it was not expressly overturned and therefore remained binding although probably confined to motor vehicles. Gleeson JA then stated the following propositions emerging from Scott v Davis:

  1. to describe a person as the agent of another, in the context of attributing the fault of the driver to the owner of the vehicle, is to express a conclusion that vicarious liability exists, rather than to state a reason for such conclusion. Hence you needed to dig further into the question of what was meant by ‘agent’. A request made by an owner in a merely domestic or social context would not be sufficient;
  2. the phrase in Soblusky v Egan, “subject to direction and control”, cannot be taken to include a reference to a right which is not, in practice capable of being exercised. Instead there is need for a real and continuing power of, and capacity for, effective intervention by the owner to direct or control the driver. It is insufficient for an owner to be able to determine how and where the vehicle would be used;
  3. the use of the word “always” meant there is a need for control of considerable content- a real and continuing power of, and capacity for, effective intervention by the owner to direct or control the driver; (v) the Soblusky principle should not be extended beyond motor vehicles;
  4. there must be an appointment, engagement or request by the owner of the driver coupled with the reality of an actual power of control, the exercise of which is or is likely to be effective;
  5. the law of the UK that it is sufficient to ground vicarious liability if the owner has a right to control of the vehicle and if the driver is using the vehicle at the owner’s request and for the owners purposes, does not represent the law in Australia; and
  6. there may be cases in which the driver of a vehicle is to be regarded as the representative or delegate of the owner with the owner having no immediate control over the vehicle.

Ultimately the court concluded that:

  1. the domestic context in which Ms Shipard was permitted by Mr Lloyd to use the vehicle involved no appointment, engagement or request by Mr Lloyd;
  2. the driver was not using the vehicle at Mr Lloyd’s request;
  3. nor was Mr Lloyd in a position to effectively assert a power to direct or control the manner in which the vehicle was driven; and
  4. at all relevant times Mr Shipard was in control of the vehicle.

As such there was no finding of vicarious liability on Mr Lloyd’s part.

Implications

This decision confirms that there is a very narrow set of circumstances in which an owner can be held liable for the consequences of someone-else negligently driving, or negligently allowing to be driven, their vehicle. To achieve such an outcome the would-be plaintiff would need to show:

  1. An actual power in the owner to exercise control over the driver of considerable content - a real and continuing power of, and capacity for, effective intervention by the owner to direct or control the driver;
  2. A motor-vehicle context; and
  3. Some term of actual appointment, engagement or request by the owner of the driver. Without the above, the remedy will be against the driver only, not the owner.