Hawley v Luminar Leisure Plc
| Jurisdiction | England & Wales |
| Judge | Lady Justice Hallett |
| Judgment Date | 24 January 2006 |
| Neutral Citation | [2006] EWCA Civ 18 |
| Docket Number | Case No: B3/2005/0237 & B3/2005/0222 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 January 2006 |
[2006] EWCA Civ 18
Lord Justice Latham
Lord Justice Neuberger
Lady Justice Hallett Dbe
Case No: B3/2005/0237 & B3/2005/0222
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
MR. JUSTICE WILKIE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr John Foy QC and Daniel Lawson (instructed by Messrs Thompsons) for the Respondent/Claimant
Mr Derek Sweeting QC (instructed by Messrs Davies Lavery) for the 1 st Defendants/Appellants
Mr Jeremy Stuart-Smith QC and Mr Alex Glassbrook (instructed by Messrs Reynolds Porter Chamberlain) for the 3 rd Defendant/Appellant
Lady Justice Hallett
This is the judgment of the court to which all members have contributed. There are before us 2 appeals one brought by Luminar Leisure Ltd ("Luminar") and the other brought by David Preston Mann on behalf of Faraday Underwriting Ltd ("the Insurers") against the decision of Wilkie J. delivered on 10 th January 2005.
Background
Luminar own and operate a number of clubs throughout the UK. They contracted with ASE Security Services Ltd ("ASE") for "the provision of security services" at the Chicago Rock Café in Southend on Sea. ASE have gone into liquidation and have no assets. However, they do have the benefit of a public liability insurance policy with the Insurers described as a "Combined Liability Insurance for the Security Industry".
The relevant contract between Luminar and ASE as far as these appeals are concerned is dated November 1996. That contract ("the agreement") provided for the supply of doormen or stewards now known as "door supervisors". One of the doormen was a man called Jeffery Warren. He worked at the Rock Café from 1998.
In February 1998 he applied for registration under a Door Supervision Registration Scheme operated by Southend Borough Council ("the Council") . The Council discovered that he had previously been registered with Basildon Borough Council but his registration had been revoked. Southend satisfied itself that there was no bar to his being registered with them and informed Mr Warren that he could proceed with his application provided he attended the necessary training course provided by them. Mr Warren failed to pursue his registration but led ASE to believe he was registered and sported an identification badge to prove it.
In the early hours of the 18 th August 2000 there was an incident outside the club. Three doormen including Mr Warren went to deal with it. He approached the claimant Mr Hawley who was standing nearby. Despite Mr Hawley's attempt to show he wanted no trouble Mr Warren punched him so hard to the face that he fell to the ground. Mr Hawley suffered a fractured nose and jaw from the punch and a fractured skull from the fall. He required major surgery and sadly, despite the best efforts of the doctors, he has suffered permanent and serious brain damage. In the course of the police investigation into the incident it became apparent that Mr Warren had been using either a forged identification badge or one belonging to another.
On 30th April 2001 Mr Warren was convicted by a jury of causing grievous bodily harm to the Claimant contrary to section 20 of the Offences Against the Person Act 1861. Apart from a spent conviction on his record this is the only conviction to have come to light.
The Claimant sued Luminar and ASE on the basis that they were "each responsible" for Mr Warren's tortious and deliberate act. He sued ASE as Mr Warren's employer in master and servant terms and Luminar on the basis they were his "temporary deemed employer" in accordance with the principles laid down in the well known case of Mersey Docks Harbour Board v Coggins and Griffith [1947] AC 1. In essence, the Claimant alleged that both Luminar and ASE negligently failed to train and or supervise Mr Warren properly, failed to check that Mr Warren was properly registered with the local authority, and failed to carry out a proper investigation into whether he was a suitable person to be employed as a doorman.
Because ASE had gone into liquidation in 2002 they played no part in the litigation. In default of their serving a Defence, Master Foster entered judgment against them on 12 th June 2003. He ordered that ASE should pay the Claimant "an amount which the court will decide and costs". ASE's insurance policy ("the policy") covered inter alia: legal liability for damages and reasonable costs and expenses arising from "accidental bodily injury to any person". The Insurers declined to indemnify ASE. The Claimant sought a declaration, therefore, that he could recover under the terms of the policy; hence Mr Mann's arrival on the scene as the Third Defendant.
At trial, it was conceded that Mr Warren was acting in the course of his employment and the issues narrowed to the extent that Wilkie J. had to rule upon just two, namely:
i) whether Mr Warren was a "temporary deemed employee" of Luminar so as to fix them with vicarious liability for his tortious act against the claimant and
ii) whether the liability attaching to ASE by reason of the default judgment was to be regarded as a liability for "accidental bodily injury" within the meaning of the policy.
At that time all parties operated on the basis that only one of the Defendants could be held vicariously liable for Mr Warren's act. Wilkie J. held that Luminar were vicariously liable. He found on the facts that they had sufficient control over ASE's employees so as to make them "temporary deemed employees" of Luminar, at least for present purposes. He gave judgment against them. He also found that Mr Hawley's bodily injury was "accidental" within the meaning of the policy, notwithstanding his finding that Mr Warren deliberately punched the claimant intending to do him serious harm. Accordingly, he granted a declaration that the Insurers were liable to indemnify ASE for any damages and costs awarded to the Claimant against ASE and to pay the Claimant pursuant to section 1 (1) of the Third Parties (Rights Against Insurers) Act 1930 any such damages and costs as assessed.
In relation to Luminar's claim against ASE for a contribution pursuant to the Civil Liability (Contribution) Act 1978 he assessed ASE's contribution at nil.
Invited at the eleventh hour by Mr Jeremy Stuart-Smith QC, on behalf of the Insurers, to consider setting aside the default judgment against ASE he declined to do so.
Summary of Submissions on behalf of Luminar
On behalf of Luminar, Mr Derek Sweeting QC sought to overturn the judges finding that they were vicariously liable as a "temporary deemed employer". He submitted that the judge applied the correct test following Mersey Docks but failed to apply it appropriately to the facts of this case. Mr Sweeting's primary submission was that ASE alone should be held liable for the acts of Mr Warren.
He argued that the general employer must establish quite exceptional circumstances to transfer control from them to a "temporary deemed employer", which on the facts of this case did not exist. Luminar and ASE were independent commercial organisations. Luminar are recognised as a "conscientious contributor to the establishment of high standards concerning security". ASE were engaged as a "specialist independent contractor" to provide trained and licensed door staff. ASE remained Mr Warren's general employer throughout. Luminar's manager may have given precise instructions to ASE's employees coming on to their premises as to when and where their work was to be carried out, but this is by no means unusual. Even if the court concluded that Luminar controlled the task ASE had to perform by telling ASE's employees where they should stand, which customers should be admitted and which rejected, this does not mean that Luminar also controlled the method by which ASE's employees carried out their work. This, he submitted, is the test as laid down in Mersey Docks (see the speech of Lord Porter at page 12) . It was not open to the judge, therefore, to find on the facts of this case that ASE had discharged the heavy burden upon them to show that Luminar should be held vicariously liable for the acts of ASE's employee.
In the alternative, given the recent judgment in Viasystems (Tyneside) Limited v Thermal Transfers (Northern) Limited [2005] EWCA Civ 1151 handed down on 10 th October 2005, Mr Sweeting submitted this court should find, as it is empowered to do, that both Luminar and ASE were vicariously liable for Mr Warren's behaviour. He sought permission to amend his appeal notice to this effect; an application we grant.
Mr Sweeting also attacked the judge's finding of a nil contribution against ASE under the Civil Liability Act 1978. Having persuaded Wilkie J, in the face of opposition from Mr Stuart Smith, to embark upon an assessment, he took exception to the result. He argued that ASE breached their warranty to Luminar that their employees were suitable people to act as doormen. They failed to check Warren's credentials. Had they done so, they would have found he was dishonest, unregistered and, therefore, unsuitable. They would not have employed him and he would not have been in a position to assault the claimant. Their negligence was, therefore, an effective cause of the damage suffered. Mr Sweeting argued that the finding of nil contribution could not stand alongside the default judgment. If it...
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