Century Insurance Co v Northern Ireland Road Transport Board

An employee remains the servant of the general employer unless the service itself, rather than merely the use and benefit of the employee’s work, has been transferred. A contractual power to direct where, when or how an agreed service is performed does not by itself establish such a transfer.

An employer may be vicariously liable for negligence arising from an employee’s personal act when that act is considered in the circumstances of the assigned work. The act need not benefit the employer. Lighting and discarding a match while supervising the delivery of petrol was negligence committed in the course of employment.

A transport board’s driver delivered petrol from its tanker into a garage storage tank. While the petrol was flowing, he lit a cigarette and discarded the match. The resulting fire and explosion damaged the tanker and third-party property.

The board claimed under its liability insurance. An arbitrator found that the driver remained the board’s servant and had acted in the course of his employment. Brown J reversed the first finding, but the Court of Appeal in Northern Ireland unanimously restored the award.

The insurer appealed on two questions: whether the driver had temporarily become the petrol supplier’s servant, and whether his careless use of the match occurred in the course of his employment.

1. Appeal dismissed unanimously with costs. The Lord Chancellor delivered the principal speech. Lord Wright gave concurring reasons, Lord Romer concurred in the Lord Chancellor’s opinion, and Lord Porter agreed with the preceding speeches.
2. Per the Lord Chancellor and Lord Wright, a servant in the general employment of one person may become the servant of another for a particular purpose. The relevant inquiry is whether the service of the employee was transferred, rather than merely the use and benefit of the employee’s work. A right to give directions is relevant but requires examination in context. The court should consider the broad effect of the contractual relationship, including the extent of control and such matters as payment, selection and dismissal.
3. Per Lord Wright, the presumption is against a transfer of service. Directions which are necessary or convenient for performing a contract ordinarily reach the worker in the worker’s capacity as servant of the general employer. Each case nevertheless depends upon its particular facts.
4. Applying those principles, the agreement was a contract by which the board undertook carriage and delivery through its own vehicles and servants. It was not a hiring or lending of the tanker and driver to the petrol supplier. The supplier’s authority to give delivery instructions did not transfer the driver’s employment. The board paid him, alone could dismiss him, and retained paramount authority over his conduct. He therefore remained the board’s servant.
5. Per the Lord Chancellor and Lord Wright, the driver’s negligence occurred in the course of employment. He was required to supervise the flow of petrol, prevent overflow and close the stopcock when delivery was complete. His smoking was for personal comfort and did not itself benefit the employer, but employer benefit was not essential. The negligent act had to be assessed at the time and in the hazardous circumstances in which it occurred, rather than treated in abstraction from the assigned work.
6. The House agreed with Jefferson v Derbyshire Farmers, Ltd [1921] 2 KB 281, preferred the dissenting reasoning of Blackburn J and Mellor J in Williams v Jones 3 H & C 602, and rejected the latter case’s majority approach of isolating the personal act from its circumstances.

1. House of Lords: Dismissed the insurer’s appeal unanimously and affirmed the Court of Appeal’s restoration of the arbitrator’s award.
2. Court of Appeal in Northern Ireland: Andrews LCJ, Babington LJ and Murphy LJ unanimously reversed Brown J on the identity of the driver’s employer and affirmed the arbitrator’s answers to both questions.
3. Brown J: Held that the driver was the petrol supplier’s servant at the material time, but agreed that, if he were the board’s servant, the negligent act occurred in the course of employment.
4. Arbitration: The arbitrator stated a special case and found that the driver remained the board’s servant and acted in the course of his employment.