Brumder v Motornet Service & Repairs Ltd

The Court of Appeal held that a sole director and shareholder who had entirely neglected his responsibilities for health and safety could not recover from his company for personal injuries caused by the company’s breach of the absolute maintenance duty in regulation 5(1) of the Provision and Use of Work Equipment Regulations 1998. The court applied the Ginty/Boyle principle: where the claimant’s own wrongful omission is the immediate and co‑extensive cause of the company’s breach, the company has a defence to a claim by that claimant. The director’s failure to exercise reasonable care, skill and diligence (now encapsulated in section 174 of the Companies Act 2006) meant he was the author of the company’s non‑compliance and the respondent company was entitled to the defence; there was therefore no occasion to apportion damages under the Law Reform (Contributory Negligence) Act 1945.

Background and facts: The appellant, sole director and shareholder of Motornet Service and Repairs Ltd, suffered the amputation of a finger when a raised hydraulic ramp failed because of a compressor fault. He sued the company and its insurer for damages. At first instance the county court judge found the company in breach of regulation 5(1) of the Provision and Use of Work Equipment Regulations 1998 and held that the compressor defect caused the accident but concluded the claimant was 100% contributorily negligent and dismissed the claim.

Procedural posture: The claimant appealed to the Court of Appeal. The respondents filed a respondent’s notice arguing, in the alternative, that (i) the company had no primary liability or (ii) the company’s breach was wholly caused by the claimant’s own failings so that the claim should be dismissed.

Issues framed by the court:

• Whether the Ginty/Boyle defence (that an employer may defend a claim under an absolute statutory duty where the claimant’s own wrongful act alone caused the employer’s breach) applied where the injured party was the company’s sole director through whom the company acted;
• Whether the claimant’s conduct entitled the company to succeed on that defence so that apportionment under the 1945 Act did not arise; and
• Whether piercing the corporate veil or other policy considerations prevented the company from relying on that defence.

Reasoning and decision: The court accepted that regulation 5(1) imposes an absolute continuing obligation. It concluded that where the only person through whom the company can act is the claimant director and that director has wholly abrogated his responsibilities for health and safety, the director’s omissions amount to personal wrongdoing (a breach of the duty of reasonable care, skill and diligence now in section 174 of the Companies Act 2006) which makes him the immediate and co‑extensive cause of the company’s breach. On that basis the company may rely on the Ginty/Boyle defence and the claim must be dismissed; there was therefore no need to consider apportionment under the 1945 Act. The court rejected the view that this amounted to impermissible piercing of the corporate veil and noted no policy reason prevented the company from invoking the defence.

Appeal dismissed. The Court of Appeal held that the company was entitled to rely on the Ginty/Boyle defence because the claimant, as sole director and the only person by whom the company could act, had wholly abrogated his health and safety duties and thus was the immediate and co‑extensive cause of the company’s breach; accordingly the claim failed and apportionment under the 1945 Act need not be considered.

On appeal from Brighton County Court (His Honour Judge Levey). The county court judge's order dated 12 June 2012 dismissed the claimant's personal injury claim on the basis of a finding of 100% contributory negligence; appeal heard in the Court of Appeal resulting in judgment [2013] EWCA Civ 195.