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2012 MarsdenLR 68

COURT OF APPEAL, PUTRAJAYA
LIM GIM SEAH – Appellant
Versus
LOKMAN TALIB & ORS – Respondent
[Civil Appeal No: K-04-248-2008]



Control over a work site is crucial in determining vicarious liability; an employer is not liable for an independent contractor's negligence unless exceptional duty of care is established.

Headnote:(A) Negligence - Vicarious liability - Control of work site - In the case of an accident at a construction site, liability for negligence is attributed to the party in control of the site. The 3rd respondent was not found negligent as the 2nd respondent was the independent contractor in control. The court reasoned that the 1st respondent was an employee of the 2nd respondent, thereby eliminating vicarious liability of the 3rd respondent. (Paras 4, 13, 15, 20)

(B) Exceptions to general rule - Duty of care - The court reiterated that an employer can be held liable for negligence even when delegating work to an independent contractor, particularly in 'extra-hazardous acts' or work on a highway which creates imminent risks. However, the court distinguished this case from relevant precedents, asserting that the circumstances did not establish a direct duty of care owed by the 3rd respondent to the appellant. (Paras 16-19)

Facts of the case:
The appellant suffered injury after falling into a hole at a construction site managed by Time Telecommunications Sdn Bhd and executed by the 2nd respondent. The 1st respondent was supervisor for the 2nd respondent. The Sessions court found negligence apportioned as 70% to the 2nd respondent and 30% to the appellant. The appellant’s appeal was dismissed by the High court. (Paras 1-4)

Findings of Court:
The control of the work site rested with the 2nd respondent, and no evidence supported vicarious liability against the 3rd respondent. The judgments of the Sessions and High courts were upheld. (Paras 13-15, 20)

Issues: Whether the control of the site implies shared liability between the 2nd and 3rd respondents for the negligence attributed to the 2nd respondent, and whether the 3rd respondent was strictly liable for the negligence of the 2nd respondent. (Paras 5-6)

Ratio Decidendi: The court concluded that mere supervisory capacity does not establish control sufficient for vicarious liability. The law maintains a clear distinction between employer liability and that of an independent contractor unless exceptional circumstances exist, which were not evidenced here. (Paras 13-15)

Result: Appeal dismissed, with costs awarded. (Para 20)

Table of Content
1. establishment of contractual relationships and responsibilities. (Para 1 , 2 , 3)
2. negligence findings by the sessions court. (Para 4)
3. arguments regarding control and vicarious liability. (Para 5 , 6 , 8 , 9)
4. legal standards for establishing control and liability in torts. (Para 10 , 11 , 12)
5. judicial reasoning on vicarious liability and control. (Para 13)

[1] From the evidence before the court it appears that Time Telecommunications Sdn Bhd awarded a contract to undertake the construction of manholes, laying of ducts and other related works to the 3rd respondent ('the project'). The 3rd respondent awarded that part of the project involving the installation of fibre optic cables below the highway to the 2nd respondent ('the works'). The works undertaken by the 2nd respondent included undertaking the works along Jalan Kanchut in Alor Setar (the site). The terms of the contract between the 2nd and 3rd respondents can be found from pp 5 to 354 of the 3rd respondent's Core Bundle of Documents Volume 1.

[2] According to the unchallenged evidence of Encik Ghazali bin Mohamad Noor (SP 3), JKR is responsible for the maintainance of the site. It is his evidence that a permit had been granted to Time Telecommunications Sdn Bhd to undertake the said project commencing July 1995 (see p 472 of the 3rd respondent's Core Bundle Volume 2). It is therefore reasonable to conclude that the owner of the site is JKR, the employer of the project is Time Telecommunications Sdn Bhd, the 3rd respondent is the contractor and the 2nd respondent the sub-contractor in respect of the works being conducted at the site.

[3] On 13th June 1995 at about 2. 30 am the plaintiff was riding motorcycle No. KT 2268 along Jalan Kanchut in Alor Setar and in the direction of Anak Bukit in Alor Setar when he fell into a hole in the site and as a result of which he was injured. According to the investigating officer, the workers at the site when he visited the site shortly after the accident were employees of the 2nd respondent and he interviewed the 1st respondent in his capacity as the supervisor of the 2nd respondent (see the evidence of SP 2 at p 465 of Core Bundle). It is the appellant's pleaded case that the 1st respondent was the servant/agent of either the 2nd or 3rd respondent when acting as the supervisor of the project. Hence, the inclusion of the 3rd respondent as a defendant in this suit. However, it is not in dispute that the Superintending Officer ('SO') under the contract between the 2nd and 3rd respondents was one Encik Shamsul Anuar bin Mohd Don (SD1) an employee of the 3rd respondent.

[4] On the conclusion of the trial the learned Sessions court Judge held the 1st and 2nd respondents to be 70% negligent and the appellant to be 30% contributory negligent for the accident. The learned Sessions court Judge did not find any negligence on the part of the 3rd respondent. The appeal by the appellant against the whole of the said decision of the learned Sessions court Judge was dismissed by the High court on 24th January 2008.

Issues

[5] The two issues raised in this appeal are first, whether the 2nd respondent's 70% negligence should be equally borne by the 3rd respondent. Secondly, whether the 3rd respondent is strictly liable for the negligence of the 2nd respondent under the principles of law pronounced by the English court of Appeal in the case of Holliday v. National Telephone Company [1899] 2 QB 392.

[6] On the first issue counsel for the appellant submitted that, in law, liability for negligence for works undertaken in the highway is imputed to the person 'in control' of the work site and not determined by any categorisation of whether that person is a contractor or sub-contractor. Counsel for the appellant then contended that to the extent the 3rd respondent was 'in control' of the site, the learned Sessions court Judge ought to have made a finding that the 3rd respondent was contributory negligent together with the 2nd respondent

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