Reid v Rush & Tompkins Group Plc

JurisdictionEngland & Wales
JudgeLORD JUSTICE RALPH GIBSON,LORD JUSTICE NEILL,LORD JUSTICE MAY
Judgment Date22 March 1989
Judgment citation (vLex)[1989] EWCA Civ J0322-7
Docket Number89/0317
CourtCourt of Appeal (Civil Division)
Date22 March 1989

[1989] EWCA Civ J0322-7

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(Sir Douglas Frank, Q.C., sitting as a deputy Judge of the High Court)

Royal Courts of Justice

Before:

Lord Justice May

Lord Justice Neill

and

Lord Justice Ralph Gibson

89/0317

Between:
Frederick Joseph Reid
Appellant (Plaintiff)
and
Rush and Tompkins Group PLC
Respondents (Defendants)

MR. COLIN SMITH, Q.C. and MR. DAVID RADFORD (instructed by Messrs Cawthorn Billins Sharpe) appeared on behalf of the Appellant/Plaintiff.

MR. WALTER AYLEN, Q.C. and MR. RICHARD DAVIES (instructed by Messrs Mackrell Turner Garrett) appeared on behalf of the Respondents/Defendants.

LORD JUSTICE RALPH GIBSON
1

This is an appeal by the plaintiff from an order striking out his statement of claim and dismissing his action on the ground that he had pleaded no reasonable cause of action. Leave to appeal was given by the judge.

2

The plaintiff on 26th January 1984 suffered severe injuries while driving the defendants' Landrover vehicle on a road in Ethiopia in the course of his employment by the defendants as a quarry foreman on the Armati Diversion Project. His injuries were caused by a collision between the Landrover and a lorry which was being driven along the road in the opposite direction by some person whose identity is not known. The defendants were in no way responsible for the happening of the accident of which the sole cause was the negligence of the lorry driver. The plaintiff has alleged that the defendants were in breach of their duty of care as employers in failing either to insure the plaintiff so as to provide suitable benefits to him in the event of his being injured, as a result of the negligence of a third party, in such a traffic accident or to advise the plaintiff to obtain such insurance cover for himself. His case is that if he had been so advised he would have obtained personal accident cover.

3

The plaintiff issued his writ on 24th October 1986 and served a statement of claim on 31st March 1987. The plaintiff amended his statement of claim after his action was dismissed by order of Master Creightmore on 16th November 1987. He amended it again by leave of this court. The changes and reinstatements do not matter. The allegations as they are now before this court are as follows:

(i) The defendants were experienced in employing persons upon work overseas in "developing" countries and knew or ought to have known of the working and living conditions of their employees in those countries; and in particular the defendants were, or should have been, aware that there was no system of compulsory third party motor insurance in Ethiopia or any scheme similar to that effected by the M.I.B. and accordingly that should their employee be injured in Ethiopia in a road traffic accident in the course of his employment caused by the fault of an unidentified and/or uninsured third party and/or by one otherwise against whom proper compensation would not in practice be obtainable he would not be able to obtain compensation. That inability constituted a special risk to those required to work in Ethiopia.

(ii) He was on 14th October 1983 offered employment as quarry foreman for a term of 12 months, to be extended by mutual agreement, at an annual salary of £15,000 upon the terms set out in a letter and in certain standard conditions of overseas employment. Those terms included provisions for kit allowance, accommodation, holidays and travel. In addition (paragraph 8 of the letter) the plaintiff became a member of the defendants' Group Retirement Benefit Scheme; he was offered a choice of joining the defendants' Group BUPA (Medical Expenses Scheme; and (paragraph 6 of the standard conditions) the defendants agreed to be responsible for any medical treatment reasonably necessary for the plaintiff in Ethiopia. He accepted that offer by letter of 17th October 1983.

(iii) The plaintiff started work in Ethiopia on about 22nd November 1983. The accident occurred on 26th January 1984 and on a bush road some 11 kilometres from his place of work in Fincha. The plaintiff was 31. The injuries were to both legs. The plaintiff still required two crutches in order to walk in 1987. He has been unable to return to work.

(iv) The plaintiff has not received any damages in compensation and will not be able to recover any such damages. If the plaintiff had been advised of the special risk, he would have obtained a personal accident insurance cover and because of the defendants' failure to advise him he had not obtained such cover.

4

The appeal came before Sir Douglas Frank, sitting Deputy High Court Judge, on 25th April 1988. He dismissed appeal. In giving judgment, he acknowledged that in field of tort "the door is not necessarily shut" but, his view, it was plain and obvious that the plaintiff's case could not succeed. Firstly, he found it a fair analogy compare this case with the position of people working this country in the 1920s and 1930s before the enactment compulsory third party insurance by the Road Traffic Acts 1930 and 1934. There were in those years many road accidents but he regarded it as significant that no case was cited in which a servant had recovered damages against his master for failing to protect him against the consequences of being injured by an uninsured and impecunious driver. Secondly, there was no authority for the proposition that an employer is liable for economic loss caused by the wrongful act of a third party.

5

The Plaintiff's Grounds of Claim

6

The statement of claim as amended in this court asserts the plaintiff's right to damages upon various grounds. The first implied term alleged was that the defendants would take out appropriate insurance cover for the benefit of the plaintiff "indemnifying him against the risk of death or injury occasioned by the fault of a third party resulting from a road traffic accident in Ethiopia whilst the plaintiff was driving the defendants' Landrover in the course of his employment". Appropriate insurance would be, it was said, either to provide such sum as the plaintiff would recover in respect of his injuries, taking into account any contributory negligence, in proceedings in this country on the assumption that the accident had occurred in England, or, in the alternative, to provide a substantial tariff of benefits appropriate to the degree of injury sustained by the plaintiff and the loss occasioned to him or his dependants. The second and alternative implied term was that, prior to the plaintiff's departure for Ethiopia, the defendants would give to the plaintiff all necessary advice relating to working conditions there, including any special risks such as that mentioned above, and would advise the plaintiff accordingly that he should himself obtain the appropriate insurance cover described above.

7

Next the source and the scope of the duties said to be owed by the defendants in tort were stated: firstly, under the duty owed by the defendants as employers of the plaintiff, "to take all reasonable steps which were necessary, in the light of any special risks arising from his working in Ethiopia, properly to protect the economic welfare of the plaintiff whilst he was acting in the course of his employment", and, therefore, in particular either to provide the appropriate insurance cover or to inform the plaintiff of the special risk and advise the plaintiff himself to obtain that cover. Secondly, the relationship of the plaintiff and the defendants was alleged to be such as to give rise to a duty of care within the principle of Hedley Byrne & Co. Ltd. v. Heller and Partners Ltd. [1964] A.C.465 in that the defendants, by employing the plaintiff to work for them in Ethiopia, "undertook, by necessary implication, to advise the plaintiff as to any special risks incidental to such employment and the plaintiff, by necessary implication, relied upon the defendants to furnish him with such advice" and, accordingly, the defendants should have informed the plaintiff of the special risk and advised him to obtain the appropriate insurance cover.

8

It seems clear that the statement of claim has throughout included the implied assertions, firstly, that the plaintiff was not aware of the special risk to him of suffering personal injury and consequential loss in the course of his employment in Ethiopia for which, because of the state of the law and of the absence of any scheme similar to those contained in the M.I.B. agreements, he would be unable to recover compensation; and, secondly, that the defendants knew or ought to have known that in probability the plaintiff knew or ought to have known that in probability the plaintiff was unaware of that special risk. No point was raised on these matters in argument. I think that the implied assertions should have been made expressly but this court must, I think, proceed upon the basis that they are contained in the statement of claim.

9

In his submissions for the plaintiff in this court, Mr. Smith did not seek to argue separately for the existence of an implied contractual term that the defendants would provide insurance cover or advise the plaintiff to obtain it but, of course, he still put the plaintiff's case in contract in so far as the ordinary duty of a master to his servant is based both in contract and in tort: see Matthews v. Kuwait Bechtel Corporation [1959] 2 Q.B. 57; and, as I understood his submissions, he was not conceding any defect in his reliance upon an implied assumption of responsibility under Hedley Byrne. He was merely acknowledging that, if the court was not persuaded of an arguable case of implied assumption of responsibility, he was...

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2 books & journal articles
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