Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Lloyd v Ryan Borg by his Tutor NSW Trustee and Guardian [2013] NSWCA 245
• Hearing dates: 5 July 2013
• Decision date: 01 August 2013
• Before: Barrett JA at [1]; Gleeson JA at [9]; Leeming JA at [77]

Decision

(1) Grant leave to appeal.

(2) Direct the applicant to file a notice of appeal in the form of the draft notice of appeal within 14 days.

(3) Appeal allowed.

(4) Set aside the orders of Judge McLoughlin made on 26 July 2012.

(5) In lieu thereof, order:

(a) judgment for the defendant against the plaintiff;

(b) the plaintiff pay the costs of the defendant.

(6) The respondent pay the applicant's costs on appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: TORTS - negligence - liability for others' negligence - other persons - Soblusky v Egan (1960) 103 CLR 216 - Scott v Davis (2000) 204 CLR 333 - social occasion - where owner of vehicle not present - where owner of vehicle not aware of its use - whether applicant vicariously liable for the acts of his de facto wife
• Legislation Cited: Motor Accidents Compensation Act 1999 Motor Accidents Compensation Amendment Act 2006; Motor Vehicles Insurance Act 1936 (Qld)
• Cases Cited: Behrendorff v Soblusky (1957) 98 CLR 619; Brodie v Singleton Shire Council [2001] HCA 29; 206 CLR 512; Brown v Holloway (1909) 10 CLR 89; Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41; Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59; 200 CLR 1; Gutman v McFall [2004] NSWCA 378; 61 NSWLR 599; Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21; International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co [1958] HCA 16; 100 CLR 644; Maric v Nominal Defendant [2013] NSWCA 190; Morgans v Launchbury [1973] AC 127; Moynihan v Moynihan [1975] IR 192; O'Keeffe v Hickey [2008] IESC 72; [2009] 2 IR 302; Ormrod v Crosville Motor Services Ltd [1953] 1 WLR 1120; PGA v R [2012] HCA 21; (2012) 245 CLR 355; Scott v Davis [2000] HCA 52; 204 CLR 333; Soblusky v Egan [1960] HCA 9; 103 CLR 215; State of New South Wales v Paige [2002] NSWCA 235; 60 NSWLR 371; Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; 226 CLR 161
• Texts Cited: B M E McMahon and W Binchy Law of Torts, 3rd ed (2000); Bowstead and Reynolds On Agency, 19th ed (2010) Sweet & Maxwell; Clerk & Lindsell on Torts, 20th ed (2010) Sweet & Maxwell; F M B Reynolds, "Casual Delegation" (2001) 117 Law Quarterly Review 180; L Moses and B Edgeworth, "Taking it Personally: Ebb and Flow in the Torrens System's In Personam Exception to Indefeasibility" (2013) 35 Sydney Law Review 107; Trindade, Cane and Lunney, The Law of Torts in Australia, 4th ed (2007) Oxford University Press
• Category: Principal judgment
• Parties: Roger Lloyd (Applicant); Ryan Borg by his Tutor NSW Trustee and Guardian (Respondent)
• Representation: Counsel: P Morris SC (Applicant); M Cranitch SC / H Wall (Respondent); Solicitors: Moray & Agnew (Applicant); Carroll & O'Dea (Respondent)
• File Number(s): 2012/260491
• Publication restriction: No

Decision under appeal

• Jurisdiction: 9101
• Citation: Ryan Borg by Tutor NSW Trustee and Guardian Borg v Roger Lloyd
• Date of Decision: 2012-07-26 00:00:00
• Before: McLoughlin DCJ
• File Number(s): 2008/318428

Judgment

1 BARRETT JA: The central question in this case is whether the applicant, Mr Lloyd, is vicariously liable for the alleged tort of his de facto wife, Ms Shipard, in the form of breach of a duty of care in negligence owed by her to passengers in the unregistered motor vehicle not to allow that vehicle to be driven by an inexperienced driver.

2 For the reasons stated by Gleeson JA (as well as the supplementary reasons of Leeming JA), that question should be answered in the negative, leave to appeal should be granted, the appeal should be allowed with costs and the action should be dismissed with costs. I add the following brief observations of my own.

3 Much time was spent in argument on cases concerning the liability of a motor vehicle's owner for the negligence of its driver in the course of driving. That, of course, is not this case. The question here goes to the liability of the vehicle's owner for the alleged negligence of the custodian of the vehicle in permitting a third party to drive it.

4 When attempts are made to fix a vehicle owner with liability for the negligence of a driver, resort has been had to a number of conceptual bases of attribution: was the driver driving with the owner's consent and on the owner's business or for the owner's purposes (Ormrod v Crosville Motor Services Ltd [1953] 1 WLR 1120); was the driver subject to direction and control of the owner (Soblusky v Egan [1960] HCA 9; (1960) 103 CLR 215); was the driver driving at the request of the owner to which the driver had acceded (Morgans v Launchbury [1973] AC 127)?

5 In Scott v Davis [2000] HCA 52; (2000) 204 CLR 333, members of the High Court undertook a rigorous review of notions of vicarious liability which, of course, are most often associated with the relationship of employer and employee. A strong theme in that case was that one person should not be fixed with vicarious liability for the tortious conduct of another unless the relationship between them is one entailing advancement of some economic or like interest of the person sought to be made vicariously liable: Gummow J at [253], Hayne J at [309], Callinan J at [357].

6 In the present case, Mr Lloyd, in the context of an exclusively domestic relationship and in a purely domestic setting, conceded to Ms Shipard the general and unsupervised use of his motor vehicle as a means of transport within the rural property owned by him and occupied by both of them as their home. The arrangement was of a commonplace kind for the shared use of domestic articles by members of a family living together. The vehicle was part of the accoutrements of the home in the same way as other potentially dangerous articles such as the carving knife in the kitchen and the lawnmower in the shed. Mr Lloyd had conferred on Ms Shipard not only the right to use the motor vehicle but also the right to allow other persons to drive it. No economic or other tangible interest of Mr Lloyd was involved in Ms Shipard's exercise of either such right. Mr Lloyd's supposed interest in having visitors inspect and admire his rural estate is not of any relevant kind. No aspect of the circumstances warranted any implication of responsibility of Mr Lloyd for decisions made and things done by Ms Shipard in exercising the rights in respect of the vehicle gratuitously conceded by him to her.

7 It is not meaningful to regard a case of the present kind as turning upon some overriding power of remote control imputed to the head of the household and impliedly delegated to the alleged tortfeasor, as in "the case of the negligently managed teapot" referred to by Gleeson CJ in Scott v Davis (at [8]). This is a reference to the majority decision of the Supreme Court of Ireland in Moynihan v Moynihan [1975] IR 192 - a case subsequently criticised in various quarters. In that court's later decision in O'Keeffe v Hickey [2008] IESC 72; [2009] 2 IR 302, Hardiman J approved the following statement in Law of Torts by B M E McMahon and W Binchy, 3rd ed (2000) at 1094:

"The decision [in Moynihan v Moynihan] is important because it clearly indicates that the control concept is used, not as a justification for vicarious liability, but rather as a test to determine the persons for whose actions liability will be imposed on the defendant. In other words, if the control element is high then even in the absence of other features the subordinate may be considered a de facto employee and provided the 'controlled person's' acts relate to the 'controller's' business the latter will be vicariously liable for injury caused to third persons by such acts."

8 Resort to an imputed status of "de facto employee" and the reference to a business, coupled with a discounting of the "control concept" as a foundation or justification in its own right, emphasise the significance of the defendant's economic interests and the advancement of those interests as determinants of vicarious liability.

9 GLEESON JA: This application for leave to appeal concerns the liability in the law of tort of an owner of an unregistered motor vehicle for the acts of a second person who has permission to use the vehicle, in allowing a third person to drive the vehicle on the owner's property during which an accident occurred causing personal injury to an occupant of the vehicle.

10 The applicant for leave to appeal and defendant in the proceedings below is Mr Roger Lloyd. He is the owner of a 140 acre property situated at Colo Heights. He is also the owner of an unregistered and uninsured Nissan Patrol manual four-wheel drive vehicle. Mr Lloyd's de facto wife, Ms Shipard, lived with him at the Colo Heights property. Ms Shipard was described in the judgment below as Mr Lloyd's wife and this description is also adopted in these reasons.

11 Proceedings were brought against Mr Lloyd by Ryan Borg (by his tutor) in the District Court seeking damages for the negligence of Mr Lloyd by his alleged agent, Ms Shipard, who had allowed another person, Ms Maria Sogueco, to drive the vehicle when the respondent was an occupant of the vehicle with his mother. The issues of liability and quantum were severed. The primary judge (McLoughlin DCJ) determined the issue of liability in favour of the respondent/plaintiff in the court below, Ryan Borg. This Court is dealing concurrently with the application for leave to appeal and the appeal from the decision on liability.

12 The essential issue is whether Mr Lloyd, as owner of the motor vehicle, is vicariously liable for the alleged negligent conduct of his wife in allowing a third party, Ms Sogueco, said to be an inexperienced driver who had not been driving in Australia for very long, to take charge of driving the vehicle over difficult terrain on Mr Lloyd's property knowing there was a real risk of harm to Ryan Borg, an occupant of the vehicle at the time.

13 For the reasons which follow, in my view, the primary judge erred in concluding that Mr Lloyd is vicariously liable for the acts of his wife which were said to have been negligent and caused personal injury to Ryan Borg. The present case does not come within the principle of vicarious liability accepted and applied by the High Court in Soblusky v Egan (1960) 103 CLR 215, as clarified in Scott v Davis [2000] HCA 52; (2000) 204 CLR 333.

14 In the circumstances, leave to appeal should be granted and the appeal allowed. The orders below should be set aside and in lieu thereof, judgment should be entered for the applicant against the respondent and the respondent should pay the applicant's costs at first instance and on appeal.

Circumstances of the accident

15 The respondent, Ryan Borg, was a child aged three years at the time of the accident when he and his mother, Mrs Nanette Borg, were passengers in the vehicle. He suffered a serious injury when the vehicle, which lacked seat belts and roof, overturned and rolled on a steep dirt track on the applicant's property.

16 The accident occurred on 11 August 2005 in the following circumstances. Ms Shipard had invited a number of people, including the respondent's mother and Ms Sogueco, to the property. After lunch, Ms Shipard invited Ms Sogueco to drive the vehicle with Ms Shipard as passenger on flat land which surrounded the house on the property. The respondent and his mother then joined Ms Shipard and the driver, Ms Sogueco, in the vehicle. There was a dispute at trial as to whether the respondent's mother knew in advance the destination intended by Ms Shipard, being a camping area accessible only by a steep, rough and winding trail.

17 The police report summarised the circumstance of the accident as follows:

"Sogueco was the driver, Nanette and Ryan Borg were seated in the front and Shipard was standing in the back holding onto the roll bars.

They then drove down a dirt track on the property which has a number of hair pin turns and a steep decline. The road is suitable for four wheel drive vehicles only.

Whilst negotiating a left hair pin turn, the vehicle's front nearside tyre went into a large hole and rolled onto its roof...".

18 There was a dispute at trial as to whether Ms Sogueco indicated she was having any difficulty in managing the vehicle before the accident. It was the plaintiff's case that his mother could see Ms Sogueco getting nervous and that she heard Ms Sogueco complaining that she did not know what to do and was having difficulty managing the gears of the manual vehicle. It was also the respondent's case that his mother complained to Ms Shipard that she wanted the vehicle stopped and that she wanted to get off the vehicle.

Nature of the claim

19 The amended statement of claim in the District Court pleaded an entitlement to damages based on a cause of action in negligence asserting that "the injuries occasioned to the plaintiff were caused by negligence on behalf of [Mr Lloyd] through his servant and agent".

20 The particulars of negligence did not claim that the driver, Ms Sogueco, was negligent in the management of the vehicle. Rather, it was claimed that Mr Lloyd through his agent, Ms Shipard, was negligent in allowing an inexperienced driver to drive the vehicle down a steep trail on a dirt track on the property, and should not have given permission for the use of the vehicle in the circumstances.

21 The other particulars of negligence relied upon by the respondent were that the applicant by his agent allowed the respondent to ride in a vehicle that did not have a closed top and seat belts; and failed to advise the respondent of the nature of the terrain on which they were being driven; that Ms Shipard refused to drive the vehicle and insisted that Ms Sogueco drive the vehicle; and the applicant failed to obtain the permission of Mr Wilson to use the vehicle, if he was the owner of the vehicle. These may be ignored, as the primary judge was not satisfied that they had been established (Judgment [29], [30] and [31]).

Findings of the primary judge

22 The primary judge made the following factual findings:

(1) the applicant was the owner of the property;

(2) the vehicle remained permanently on the property and was used solely for the purposes of driving around the rugged, sloping terrain on the four-wheel drive tracks;

(3) both the applicant and the wife drove the vehicle whenever they wished and used the vehicle from time to time to show visitors around the back part of the property or as a means of conveyance should they wish to access the back blocks of the property;

(4) at the relevant time, the wife had control of the vehicle in the sense that she could say who could and could not drive the vehicle;

(5) the wife assessed the capacity of the third party, Ms Sogueco, to drive the vehicle based upon her management on the flat terrain and whilst the vehicle had been driven in first gear;

(6) the downwards slope upon which the vehicle was driven was "a rugged, sloping, four-wheel drive track with falling and twisting terrain...", over which it would take a person with experience to drive the vehicle safely;

(7) the third party did demonstrate some signs of nervousness and the respondent's mother did make some comment concerning being scared but this appearance of nervousness and these comments were not made necessarily before the commencement of the descent.

23 The primary judge concluded (at [15] and [23]) that the accident occurred because of a total lack of driving skill of Ms Sogueco in manoeuvring the vehicle down the track and in her jumping from the vehicle rather than endeavouring to keep the vehicle under control just before it rolled over.

24 There was a dispute at trial as to ownership of the vehicle. The primary judge rejected the evidence of the applicant that ownership of the vehicle had passed to a neighbour, Mr Wilson, in exchange for work performed on the vehicle. The primary judge held (at [8] and [31]) that the applicant was the owner of the vehicle at the relevant time.

25 On the day of the incident, the applicant was not present on the property and there was no evidence that he was aware of activities taking place on the property, in particular that he was aware that Ms Shipard had invited guests to the property. The primary judge found (at [24]) that the applicant did not know that Ms Sogueco was going to drive the vehicle on that day.

26 The primary judge held (at [28]) that the applicant was liable for the negligence of his agent, Ms Shipard. This was in allowing an inexperienced driver to drive the vehicle on difficult terrain knowing there was a real risk of harm to the plaintiff, and that the applicant through his agent, Ms Shipard, should not have given permission to use the vehicle in the circumstances. Although the primary judge did not expressly use the words "vicarious liability", this conclusion was implicit in paragraphs [27] and [28] of the Judgment.

Issues on appeal

27 The applicant's draft notice of appeal raised three grounds of appeal which may be grouped as follows:

(1) Whether the primary judge erred in finding the applicant vicariously liable for the neglect by Ms Shipard in allowing the third party to drive the vehicle (Grounds 1 and 3).

(2) Whether the primary judge erred in finding that it would take a person with experience to drive the vehicle safely, and that it was negligent for Ms Shipard to allow Ms Sogueco to drive the vehicle (Ground 2).

Submissions

28 Although the applicant's written submissions were directed to both issues, his oral submissions were limited to the first issue of vicarious liability.

29 The applicant submitted that the respondent's case as pleaded and conducted below did not concern any assertion of negligence by the driver of the vehicle, but was solely reliant upon the contention that the conduct of Ms Shipard in allowing a third party to drive the vehicle on difficult terrain was negligent, and that Mr Lloyd was liable for her conduct.

30 The applicant noted that at the trial, the respondent had referred to Soblusky v Egan as being simply "an illustrative case rather than anything else", and that the plaintiff's case was that Ms Shipard was exercising ostensible authority on behalf of the owner in allowing and permitting the vehicle to be used (White 123, lines 30-34).

31 The applicant submitted that the primary judge erred in describing Ms Shipard's permission to use the vehicle in terms of ostensible authority, and in using that as the basis for a finding that Mr Lloyd was vicariously liable as owner of the vehicle for the negligence of Ms Shipard, in allowing an inexperienced third party to drive the vehicle.

32 The applicant made a formal submission that Soblusky v Egan was incorrectly decided, but went on to contend that the principle in that case was a narrow one, and was inapplicable to the circumstances of the present case. This was for two reasons. First, the plaintiff's case did not concern any negligence of the driver, and secondly, the driver of the vehicle was not subject to the direction or control of the applicant.

33 The respondent contended that if the person in charge of the vehicle, with the authority of the owner, negligently allows that vehicle to get out of control whilst driven by a third party, the owner can be made liable within the principle of Soblusky v Egan. Applied to the present case, the respondent submitted that Mr Lloyd was liable for the tort of Ms Shipard, being a breach by Ms Shipard of a duty of care owed by her to passengers of the vehicle, in allowing an inexperienced person to drive the vehicle knowing there was a real risk of harm to the plaintiff.

34 The respondent further submitted that it was no answer for the applicant to say that the vehicle was not under his control at the time of the incident because he was not present and did not know what was going on. It was submitted that the applicant could have withdrawn Ms Shipard's authority by simply withdrawing the key, or giving some kind of direction to her not to allow inexperienced persons to drive the vehicle.

35 In reply, the applicant submitted that no case was pleaded or run below to the effect that it was negligent of Mr Lloyd not to give Ms Shipard some kind of direction not to allow an inexperienced person to drive the vehicle over the property. This submission must be accepted. Such a claim would have involved a form of primary liability attaching to Mr Lloyd. The respondent's submission that Mr Lloyd could have given some kind of direction to Ms Shipard not to allow inexperienced persons to drive the vehicle, must be taken to be directed to Mr Lloyd's power to control the vehicle in the context of the agency claim which was the respondent's case as pleaded and run below.

Grounds 1 and 3 - Vicarious liability

36 As stated in Gutman v McFall [2004] NSWCA 378; (2004) 61 NSWLR 599 at 602 [21] per Giles JA (Mason P and McColl JA agreeing), liability in the law of tort is generally fault based, arising from the intentional or negligent conduct of a defendant causing loss or damage to the plaintiff. Vicarious liability however makes a defendant liable although not at fault, the fault being that of the defendant's servant, agent or perhaps independent contractor. The basis for vicarious liability is to be found in either statute or the common law.

37 The present case does not involve liability for the conduct of a servant or independent contractor. The liability of Mr Lloyd is said to arise because he is legally liable for the negligent conduct of his agent, Ms Shipard.

38 Agency is a word used in the law to connote an authority or capacity in one person to create legal relations between a person occupying the position of principal and third parties: see International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co [1958] HCA 16; (1958) 100 CLR 644 at 652.

39 Difficulties however arise with the use of the term "agent" which has two distinct meanings in the law of tort. Thus, Trindade, Cane and Lunney said, in The Law of Torts in Australia, 4th ed (2007) Oxford University Press at 781:

"First, an agent may be a person who is authorised (by a contract of agency) to enter contracts on behalf of another, who is called the 'principal'. 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."

40 Those authors go on to observe (at 782) that:

"There [are] a number of reasons why adopting a broad notion of agency as a means of imposing strict liability on a person who merely authorises or requests another to perform a task on that persons behalf is problematic. Apart from contractual agency, the circumstances in which one person is held to be the agent of another for the purposes of imposing vicarious liability on the other are open ended. Indeed, in one of the leading cases where such a relationship was held to exist it was freely admitted that the agency relationship was a statement of conclusion: once it is thought that, on the facts, one person should be held liable for the torts of another, an agency relationship is deemed to exist between the parties. Such an 'agency' bears no relationship to a contractual agent and risks confusing accepted principles of law relating to such agents." (citations omitted).

41 The distinct meanings given to the use of the term "agent" in a contractual relationship and the law of tort, need to be kept steadily in mind when dealing with a claim of vicarious liability. In my view, the primary judge erred in failing to distinguish between these different meanings when concluding (at [22]) 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 the day of the incident, she could say who would drive it and would not drive it, did not involve any notion of ostensible authority.

42 The notion of ostensible authority or apparent authority is sufficiently described in Bowstead and Reynolds On Agency, 19th ed (2010) Sweet & Maxwell at [3-004] in the following terms:

"Under this doctrine, where a principal represents, or is regarded by the law as manifesting, that another has authority, he may be bound as against a third party by the acts of that other person within the authority which that person appears to have, though he had not in fact given that person such authority or had limited the authority by instructions not made known to the third party. 'Ostensible or apparent authority is the authority of an agent as it appears to others'." citing Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 at 583 per Lord Denning MR.

43 Reference by the primary judge to the notion of ostensible authority was both an error and an unfortunate distraction. It diverted attention from the proper question which was whether the present case comes within the Soblusky v Egan principle.

Soblusky v Egan

44 In Soblusky v Egan, the High Court held that Soblusky, the "owner" of a car, was liable for the negligence of the driver. This negligence occurred whilst Soblusky, a passenger in the car, was asleep. Soblusky was in fact no more than the bailee of a car, which had originally been obtained under a hire purchase agreement by another person, Behrendorff. Soblusky had assumed liability under the hire purchase agreement, but was not in law the hire purchaser of the car because the transfer was not recorded in writing, as required by the legislation. Behrendorff remained the statutory principal (that is, the registered owner). Soblusky had asked Lewis to drive him and others to a meeting when the car crashed and Egan was injured.

45 The joint judgment (Dixon CJ, Kitto and Windeyer JJ) expressed the principle in the following terms at 231:

"It means that 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 meant 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. This therefore must be regarded as an obvious case."

46 It will be observed that the Soblusky v Egan principle was ascribed to agency. The twin factors leading to this conclusion were that there was authority for another to drive the vehicle and, by reason of ownership or possession as bailee, the right to direct or control his driving.

47 The High Court described Soblusky v Egan as an obvious case. No doubt this was because the owner was present in the vehicle, although asleep at the time of the accident, and was, at least notionally, always in a position to direct or control the driver.

48 Difficulties, however, arise if an owner is not present in the vehicle at the time of the accident. Questions then arise as to whether the owner or bailee of the vehicle must notionally be in control, or is it sufficient that the owner has an interest in the performance of what is being done with the vehicle by another, or even some lesser connection with it: see F M B Reynolds, "Casual Delegation" (2001) 117 Law Quarterly Review 180.

49 As noted in Gutman v McFall (at 603 [27]), the cases in England have taken a rather different course from Soblusky v Egan, although still founded on agency. The leading English case is Morgans v Launchbury [1973] AC 127. There the House of Lords held that the owner was not liable for the negligence of the driver of the car, because the car was not being used for the owner's purposes at the time of the accident.

50 The essentials of liability under the English cases are that the owner must retain both a right to control of the vehicle and must have an interest in the purpose for which it is being used. The right to control was strictly construed in earlier cases, but is now understood in a much more attenuated sense. An owner may be liable notwithstanding he or she was not present in the vehicle at the time of the accident: see Parker v Miller (1926) 42 TLR 408. See also Clerk & Lindsell on Torts, 20th ed (2010) Sweet & Maxwell at [6-75]-[6-77].

51 By contrast, the Soblusky v Egan principle has a much narrower focus and application in Australia, as is apparent from Scott v Davis.

Scott v Davis

52 Scott v Davis concerned an attempt to extend the Soblusky v Egan principle to a case which involved an injured passenger on a joy flight, who claimed that the owner of the aeroplane was liable for the pilot's negligence. This was in circumstances where the owner was not present during the joy flight. At first instance, the owner of the aeroplane was held to be vicariously liable for the negligence of the pilot. The trial judge considered that the owner had "general control" over the aeroplane, even though the owner was not present in the aeroplane and there was no radio contact between it and the ground. In the Full Court of South Australia, the owner's appeal was upheld. The appeal to the High Court was dismissed by Gleeson CJ and Gummow J, Hayne J and Callinan J, who held that the owner was not vicariously liable for the pilot's negligence. McHugh J dissented. The reasons were extensive, and the reasoning of the members of the majority differed.

53 In Scott v Davis no party sought to have Soblusky v Egan overruled. The question which arose was whether Soblusky v Egan revealed a principle of vicarious responsibility for the acts of an "agent" which should be applied to the owners of aircraft.

54 The primary reason for dismissing the appeal given by Gummow J and Hayne J, and as an alternative reason given by Callinan J, was that the Soblusky v Egan principle should be confined to motor vehicles. This determination is to be taken as what the case stands as authority for: see Gutman v McFall per Giles JA at 609 [54]. The view of Gleeson CJ (at 339 [7]-[10]) that the principle was not confined to motor vehicles, did not find favour with the other members of the majority. However, Scott v Davis does provides significant elucidation of what is required by way of "control", to establish liability of an owner of a vehicle for the acts of its driver.

55 Although the principle in Soblusky v Egan was doubted, and trenchantly criticised by Gummow J in particular in Scott v Davis, it remains binding authority on this Court until the High Court decides otherwise. It continues to have a field of operation in respect of motor vehicles involving claims for personal injury or property damage where the injured party is unable to rely upon the legislative scheme which imposes liability on the registered owner of a motor vehicle.

56 The judgments of the High Court in Scott v Davis were reviewed in detail by Giles JA in Gutman v McFall at 603 [27]-610 [56]. That case involved an unsuccessful attempt to extend the Soblusky v Egan principle to a claim by a scuba diver injured by the propeller of a dingy driven by a hirer of the dingy. It is unnecessary for the disposition of the present appeal to undertake a further review of the judgments in Scott v Davis. It is sufficient to note the following propositions which emerge from the case.

57 First, as noted by Gleeson CJ at 339 [4], 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 a conclusion. Hence it is necessary to be more particular as to what is meant by the question-begging label "agent" (see also Gummow J at 423 [268]).

58 Secondly, the reference in Soblusky v Egan to the right to direct and control the driver's course of action cannot be taken to include a reference to a right which is not, in practice, capable of being exercised (see Gleeson CJ at 341 [14]). It is not sufficient that the owner retained a "general control" because he could determine the use to which the vehicle would be put and where it would be used (see Gummow J at 420 [258]). Unless the owner's power of control over the driver is given considerable content, any notion of "control" is so attenuated that it probably leaves it as meaning no more than ownership (see Gummow J at 420 [258]).

59 Thirdly, the use of the word "always" in Soblusky v Egan (at 231) is significant and important as it implies the need for a real and continuing power of, and capacity for, effective intervention by the owner to direct or control the driver (per Callinan J at 459 [357]).

60 Fourthly, the principle in Soblusky v Egan is a narrow one, which should not be extended beyond motor vehicles. See Gummow J at 419 [216], Hayne J at 440 [311] and Callinan J at 459 [357].

61 Fifthly, Callinan J (at 459 [357]) provided a helpful statement of the minimum conditions necessary to establish liability of an owner of a motor vehicle for the acts of its driver when used or operated in a non-commercial context. First, there must be an appointment, engagement or request by the owner of the driver. Secondly, there must be the reality of an actual power of control, the exercise of which is or is likely to be effective.

62 As to the first condition, Callinan J (at 459 [357]) considered that a request made by an owner in a merely domestic or social context would not be sufficient. A similar concern in relation to introducing notions of "agency" and "control" in the performance of social activities was expressed by Gummow J at 423 [272] and Hayne J at 437 [302].

63 Sixthly, the wider view of vicarious liability applied in England 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 owner's purposes, does not represent the law in Australia (see Gleeson CJ at 342 [17]-[18], Gummow J at [152], Hayne J at [277] and Callinan J at [337]; compare McHugh J at 370 [108] in dissent).

64 The reasons for not accepting a wider principle as applied in England are summarised by Gleeson CJ at [18]. Most importantly those reasons include that there are many circumstances in which the owner or bailee of a vehicle may request or permit another person to use it or operate it, which do not yield readily to classification according to whether a "purpose" of the owner or bailee is being served. Furthermore, in a social setting, assigning purposes can be artificial and contrived and is not a principled basis for attributing vicarious liability.

65 Seventhly, Gleeson CJ at 342 [19] suggested that there may be cases in which the driver of a vehicle is to be regarded as the representative or delegate of an owner or bailee who has no immediate control of the vehicle, in circumstances which make the owner or bailee liable on the same principle as was applied to an independent contractor in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41. This suggestion was not commented upon by the other members of the Court and is strictly obiter. Furthermore, this type of reasoning was not available in Scott v Davis itself, because all that the pilot did was to render, on a social occasion, a voluntary service at the request of the owner of the aeroplane. The pilot was not a representative or delegate of the owner (see Gleeson CJ at 342 [19]).

Application to present case

66 Applying the Soblusky v Egan principle (as clarified in Scott v Davis) to the present case, leads to the conclusion that the applicant is not vicariously liable for the acts of Ms Shipard in allowing an inexperienced driver to take charge of the vehicle on difficult terrain. My reasons are as follows.

67 First, having regard to the domestic context in which Ms Shipard was permitted by the applicant to use the vehicle, in no sense was there any appointment, engagement or request by the applicant of Ms Shipard to use the vehicle on what was no more than a social occasion to convey Ryan Borg and his mother over the applicant's property.

68 Secondly, the driver of the vehicle, Ms Sogueco, was not using it at the request of the applicant on the day of the incident.

69 Thirdly, the applicant was not in a position to effectively assert a power to direct or control the manner in which either Ms Shipard drove the vehicle, or permitted a third party to drive the vehicle, on the day of the incident. The applicant was absent from the property, and as found by the primary judge did not know that Ms Sogueco was going to drive the vehicle on that day.

70 Fourthly, the facts of the present case are one step removed from those in Scott v Davis where, even if the Soblusky v Egan principle had applied, the owner would not have been liable for the negligence of the pilot flying the aeroplane. In Scott v Davis, the owner of the aeroplane had requested another to fly it but was not on board when it was flown negligently, and there was no radio contact between it and the ground. Management of the aeroplane was not in fact subject to the owner's direction and control. In the present case, Mr Lloyd, the owner of the vehicle, had not even requested that either Ms Shipard or Ms Sogueco use or drive the vehicle to convey passengers, including Ryan Borg, on the day of the incident.

71 Fifthly, the present case is properly viewed as one in which in a domestic context, the vehicle was being used by Ms Shipard with the general permission of the applicant as owner, but at all relevant times Ms Shipard was in control of the vehicle. In no sense was Ms Shipard, let alone the driver, Ms Sogueco, a representative or delegate of the owner which might have attracted vicarious liability upon the line of reasoning suggested by Gleeson CJ in Scott v Davis at 342 [19]. Furthermore, no such case was pleaded or run by the respondent below.

72 It follows, in my view, that grounds 1 and 3 of the draft notice of appeal should be upheld.

Ground 2

73 The issue raised by ground 2 is whether the primary judge erred in finding that it would take a person with experience to drive the vehicle safely, and that it was negligent for Ms Shipard to allow Ms Sogueco to drive the vehicle.

74 As noted above, no oral submissions were advanced in support of this ground on the hearing of the appeal. In my view, this ground is without foundation. No error has been established in the primary judge's factual findings. It is sufficient to refer to the following matters:

(1) It may be inferred from the evidence concerning the test drive by Ms Sogueco on the flat land near the house on the property, that she had not previously driven the vehicle which was a manual four-wheel drive.

(2) There was evidence supporting the finding by the primary judge that Ms Sogueco was inexperienced in driving the vehicle, as she had demonstrated some signs of nervousness and difficulty in using the gears before the commencement of the descent down the track where the accident occurred.

(3) This finding concerning Ms Sogueco's inexperience, was also supported by the inference to be drawn from the primary judge's finding that Ms Nanette Borg expressed concern whilst in the vehicle that she was scared. There was evidence that Mrs Borg had asked Ms Shipard to stop the car as she wanted to get out of the vehicle (White 63, Tcpt lines 40-50).

(4) There was photographic evidence of the scene of the accident which amply demonstrated the nature of the difficult terrain on which the vehicle was driven.

(5) There was also evidence in the Police Report (tab 4, Plaintiff's Tender Bundle at trial) of a second accident concerning an ambulance vehicle, which also experienced difficulty and rolled on the dirt track on the property on the same day after the accident involving Ryan Borg occurred.

75 In my view, ground 2 of the draft notice of appeal is not made out.

Conclusions

76 I propose the following orders:

(1) Grant leave to appeal.

(2) Direct the applicant to file a notice of appeal in the form of the draft notice of appeal within 14 days.

(3) Appeal allowed.

(4) Set aside the orders of Judge McLoughlin made on 26 July 2012.

(5) In lieu thereof, order:

(a) judgment for the defendant against the plaintiff;

(b) the plaintiff pay the costs of the defendant.

(6) The respondent pay the applicant's costs on appeal.

77 LEEMING JA: I agree with the orders proposed by Gleeson JA, and with his Honour's reasons for them. I also agree with Barrett JA's observations relating to the domestic relationship and setting in which these proceedings arise. There are in my opinion the following additional reasons why the appeal must be allowed.

78 Soblusky v Egan (1960) 103 CLR 215 binds this Court, regardless of the disapproval expressed in Scott v Davis [2000] HCA 52; (2000) 204 CLR 333 (which is echoed in Bowstead and Reynolds On Agency, 19th ed (2010) Sweet & Maxwell at [8-187]), notably, its lack of adequate foundation in authority. The position remains as stated by Giles JA in Gutman v McFall [2004] NSWCA 378; (2004) 61 NSWLR 599 at [57].

79 To the extent that there is a principle deriving from Soblusky, it turns upon control. That is plain from the statement "in circumstances where he can always assert his power of control" in the joint reasons at 231. It is also plain from what was said in Scott v Davis at [16] by Gleeson CJ ("not in a position to assert a power of control"), at [244] by Gummow J ("criterion of liability which ... required retained control ..."), at [311] by Hayne J ("I do not consider that the management of the aircraft was in fact subject to [the owner's] direction and control") and at [356]-[357] by Callinan J ("need for a real and continuing power of, and capacity for effective intervention"). Each of those statements was made in the context of analysing Soblusky. More generally, Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at [45] holds that control is one of the matters (although not the only matter) which is expressive of the fundamental concerns underlying the doctrine of vicarious liability, while the importance of control is confirmed by the joint judgment in Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161 at [26] and [32].

80 There was nothing like control in the present case on the part of Mr Lloyd. Counsel for the respondent asserted that some measure of control could have been exercised by the appellant, by forbidding Ms Shipard to drive the vehicle with guests or to permit it being driven by them. That falls far short of the control required by Soblusky and Scott v Davis. In truth, the appellant's submission recalls the notion that the husband should be liable for the tortious conduct of his wife, something which did not survive the married women's property legislation: see Brown v Holloway (1909) 10 CLR 89 and PGA v R [2012] HCA 21; (2012) 245 CLR 355 at [31].

81 That said, in many respects the facts in Soblusky resembled those in this appeal. It will be recalled that Mr Behrendorff was the registered owner of the ill-fated Ford V8 sedan, which he had exchanged for Mr Soblusky's Pontiac panel van. Mr Soblusky was in possession, but never became legal owner, of the sedan, and of course was held to be vicariously liable when Mr Lewis who was driving it ran off the road.

82 Ms Shipard, like Mr Soblusky, did not own but was merely in possession of the Nissan Patrol. Ms Shipard, like Mr Soblusky, was present in the vehicle as it was being driven, and the primary judge found that Ms Shipard, like Mr Soblusky, had control of the vehicle and could say who could and could not drive it. If a case had been advanced that Ms Shipard was vicariously liable for the negligence of Ms Sogueco, it is difficult to see how an Australian court other than the High Court could fail to enter judgment against her.

83 But of course the appellant's attack was not directed to establishing liability on the part of Ms Shipard, who was in possession of the vehicle, but instead upon its owner Mr Lloyd, whose position in some respects resembled that of Mr Behrendorff. Neither man had anything to do with the accident that the vehicles each owned had suffered.

84 And indeed Mr Behendorff was liable: Behrendorff v Soblusky (1957) 98 CLR 619. He was liable because s 3 of the Motor Vehicles Insurance Act 1936 (Qld) provided that for the purpose of every claim for accidental bodily injury caused by a motor vehicle, every person other than the owner who at any time was in charge of such vehicle, whether or not with the owner's authority, was deemed to be the owner's agent and acting within the scope of his authority. The deemed statutory agency had the consequence that Mr Behendorff's insurance policy responded to the claim.

85 So too here, if Mr Lloyd's vehicle had been insured, the insurance policy mandated by the modern New South Wales counterpart (Motor Accidents Compensation Act 1999, s 10) would have responded if the driver had been at fault. And, although uninsured, if it had been driven on a public road, once again statute would render the Nominal Defendant liable if the driver was at fault: Motor Accidents Compensation Act 1999, s 33 and see Maric v Nominal Defendant [2013] NSWCA 190. And had the accident occurred after the Motor Accidents Compensation Amendment Act 2006 inserted new Division 2 of Part 1.2 "No fault recovery by children", it would not have been necessary for the appellant to establish fault. (That legislation only operates prospectively: see Schedule 5, Part 5, cl 19.)

86 But it was not contended that any statute rendered Mr Lloyd liable. None of the circumstances referred to in the previous paragraph obtained. It was lawful for Mr Lloyd to own an unregistered and uninsured vehicle, without seat belts or roof, and it was lawful for it to be driven on his own land. Thus, the appellant could only succeed against Mr Lloyd at common law. But in my opinion there is no reason to strain the principles of common law in this area which has long been dominated by statute, to make Mr Lloyd liable in addition to Ms Shipard (and perhaps also Ms Sogueco).

87 It is plain from Scott v Davis that Soblusky is not to be given an expansive application. Moreover, considerations of coherence are, in my opinion, fatal to the appellant in this appeal. They are doubly fatal, because the principle for which the appellant contends cannot be reconciled with common law, nor can it be reconciled with statute.

88 If Mr Lloyd as owner were vicariously liable for the negligence in this case, he would also be liable if he had lent his car to an independent contractor. But it is clear from Sweeney that the general rule by which a person is not liable for the negligence of an independent contractor - even one using chattels made available to him - is part of Australian law, a point made by Gleeson CJ in Scott v Davis at [18]. Further, the present appeal illustrates how unreal it would be to impute notions of control and agency in a domestic setting, something which Gleeson CJ described as "artificial and contrived" at [18], and which Gummow J said "would be liable to chill ordinary social and familial intercourse" at [272]; see also per Hayne J at [309]-[310] and Callinan J at [347].

89 Moreover, as Hayne J said in Scott v Davis at [309], "legislation providing for compulsory third party insurance and schemes for no fault liability have long since overtaken the common law in relation to such personal injury claims". The facts of this appeal present a gap in the legislative scheme. But the existence of such a gap provides no reason to alter the common law so as to plug it. To the contrary, legislation is recent and detailed and nuanced, and is predicated upon the common law in its present form. The legislative scheme gives all victims of motor accidents a solvent defendant where an accident occurs on a public road and there is fault, and (since 2007) gives victims who are children a solvent defendant even where there is no fault, but otherwise the legislative scheme leaves a gap. A detailed legislative scheme which in terms contemplates gaps tells against the expansion of liability for which the appellant contends. It is not necessary for there to be a direct inconsistency between statute and the proposed rule of the common law for considerations of coherence to be engaged: Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59; (1999) 200 CLR 1 at [293]-[296] (Hayne J); State of New South Wales v Paige [2002] NSWCA 235; (2002) 60 NSWLR 371 at [93] (Spigelman CJ).

90 Gleeson CJ addressed these concerns in Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at [31]-[32]:

"Legislation and the common law are not separate and independent sources of law; the one the concern of parliaments, and the other the concern of courts. They exist in a symbiotic relationship.

In its practical operation, much of the law affecting the users of public roads involves a complex interplay of legislation and common law principles. For example, statutory schemes of third party insurance proceed upon the basis of the vicarious liability of owners of vehicles arising from a deemed agency, sometimes in surprising circumstances, such as where the driver of a vehicle has stolen it."

That symbiotic relationship between legislation and the common law leaves it to the courts to seek to achieve a coherent synthesis of the two, or, as it has recently been put (albeit in a different context), "to fit these two systems into a coherent and interlocking whole": L Moses and B Edgeworth, "Taking it Personally: Ebb and Flow in the Torrens System's In Personam Exception to Indefeasibility" (2013) 35 Sydney Law Review 107 at 111. But, as the previous two paragraphs show, the proposition of law for which the appellant contends would collide both with the existing body of judge-made law and also with statute.

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Decision last updated: 01 August 2013