COURT OF APPEAL
DATE: 29 MARCH 1971
APALOO, ANIN AND ARCHER JJA
CASES REFERRED TO
(1) Barnard v. Sully (1931) 47 OT.L.R. 557.
(2) Aboaku v. Tetteh [1962] 2 G.L.R, 165, S.C.
(3) Wheatley v. Patrick (1837) 2 M. &W. 650; 150 E.R. 917.
(4) Britt v. Galmoye (1928) 44 T.L.R. 294; 72 S.J. 122.
NATURE OF PROCEEDINGS
APPEAL by the third defendants against a judgment of Djabanor J. in the High Court, Sekondi, on 20 April 1965, in which he awarded general and special damages (for the award of damages see (1965) C.C. 126) against the third defendants holding that they were vicariously liable for the negligence of their servant. The facts are fully set out in the judgment of Anin J.A.
COUNSEL
v. A. Franklin for the appellants.
No appearance by or on behalf of the respondents.
JUDGMENT OF ANIN J.A
The appellants (who were the third defendants at the trial) were the owners of a timber log production unit at Awaso. They let their entire production unit and business to the second defendant (who did not appeal) with an option to purchase under a hire-purchase agreement executed on 16 May 1961 (exhibit 1). Among the assets of the business let on hire to the second defendant was a lorry, No. AS 5117. On 7 January 1962 – during the currency of the said hire-purchase agreement-the said lorry was being driven by the first defendant (who did not appeal) when it
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collided with a passenger lorry on the highway. The respondent (an infant who was the first plaintiff at the trial), who was a passenger in the passenger lorry, sustained serious injuries, and through his father and next friend (the second plaintiff) he instituted this action against the defendants jointly and severally in the Sekondi High Court for damages “for injuries caused to him by the negligent driving of the first defendant, servant or agent of the second and or third defendant and in the course of his employment and/or agency while the first defendant was in charge of timber truck No. AS 5117 owned by the second and/or third defendant.”
The first defendant pleaded guilty at the criminal court to the offences of careless driving and negligently causing harm and was duly convicted and sentenced to fines totalling £G65. He did not contest this action, though served with process, and judgment was accordingly entered against him. In the result, the negligence of the driver was not disputed by the remaining defendants. The main dispute was the issue of vicarious liability, if any, of either the second or the third defendant, or both of them.
The learned trial judge held the appellants vicariously liable for the negligence of the first defendant and awarded damages against them. He summed up his ratio decidendi thus:
“To sum up, I would say that having once admitted ownership of the lorry, the company on whom the burden lay to prove that the driver was not its servant failed to so satisfy me – on account of insufficient evidence. All the company said was: We did not employ Ayaya. His name is not in our books – but the lorry he was driving is ours. He was carting our timber with it for us! Morrison said that: ‘Ayaya was already working for the company when he took over the running of the business for the company.’ But even if it was he who employed Ayaya – he did so as agent of and on behalf of the company. Ayaya was paid with their money and they were to have insured the lorry, so it would be in their interest that whoever drove it did so properly. For all this I find that the company is vicariously liable to the plaintiff for the injury caused to the first plaintiff by the negligence of their servant Ayaya.”
Form this judgment, the appellants have appealed to this court. On their behalf, learned counsel has canvassed with meticulous care and scrupulous fairness, two grounds of appeal, namely: (1) That the learned trial judge was wrong in deciding that vicarious liability for the negligence of the first defendant, Ayaya, attached to the appellants; and (2) that the amount of general damages awarded was excessive.
In support of his first ground of appeal, learned counsel for the company submitted that the learned trial judge erred in law and on the facts by his misapplication of such well-known authorities as Barnard v. Sully (1931) 47 T.L.R. 557 and Aboaku v. Tetteh [962] 2 G.L.R. 165, S.C.; and by holding that since the appellants were the owners of lorry No. AS 5117, the mere fact of the appellants’ ownership of the lorry is prima facie evidence that the lorry was at the material time been driven by either their servant or agent and concluding that the appellants are
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vicariously liable for the driver’s negligence. The true ratio of the decision in Barnard v. Sully (supra), is that the fact of ownership is some evidence fit to go to the jury that at the material time a vehicle was being driven by the owner or his servant; but this presumption is rebuttable. Certainly, where all the facts are known as to the relationship between the driver and the owner, and as to the purposes of the journey, there is no room for operating such a presumption. In this case, a contract of hire-purchase subsisted between the second defendant and the appellants. Under its terms, the second defendant qua hirer had possession of the lorry. (as indeed of all the assets listed in the first schedule of exhibit 1). As has been pointed out in Atiyah’s Vicarious Liability in the Law of Torts at p. 133:
“The real question is not, who is the owner, but who has the right of possession, and in some cases, perhaps, even possession pure and simple. Obviously, for example, a person who has possession of a vehicle under a hiring or hire-purchase agreement is the owner for this purpose [of being fixed with vicarious liability for his driver’s negligence].”
For example, in Wheatley v. Patrick (1837) 150 E.R. 917, where A. borrowed B.’s horse and chaise and requested C. to drive for him, and through C.’s negligent driving the horse and chaise were driven against and injured the plaintiff’s horse, it was held that A. but not B. was liable for C.’s negligence because at the material time A. had possession of the horse and chaise. Similarly, where the vehicle has been lent by the owner to another person for purposes in which the owner has no interest or concern, the borrower in possession of the vehicle is held liable for any negligence arising in the course of the journey: see Britt v. Galmoye (1928) 44 T.L.R. 294, where the owner was held not liable when he lent his private motor car to his servant to enable him to take his friends to the theatre after a day’s work.
In this connection, it is relevant to consider whether on the evidence the second defendant was in business on his own account as an independent contractor, or whether he was the servant of the appellants. The general rule of law is that the employer is not liable for the tort of an independent contractor employed to do particular work for him. If therefore the person employed to do particular work is not in the position of a servant, but is an independent contractor, the employer is not, as a rule, responsible for any tort committed by him in the course of his employment, or by the servants whom he may have engaged for the actual performance of the work; and any person injured thereby must look to the independent contractor for compensation: see Halsbury’s Laws of England (3rd ed.), Vol. 25, pp. 498-499, para. 960. The distinguishing test between an independent contractor and a servant is, of course, whether or not the employer retains the power, not only of directing what work is to be done, but also of controlling the manner of doing the work. If a person can be overlooked and directed in regard to the manner of doing the work, that
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person is not a contractor, and it makes no difference that his work is piecework: see Halsbury’s Laws of England (3rd ed.), Vol. 25 at p. 498.
On its true construction, exhibit 1 is a contract of hire-purchase between the second defendant and the appellants. It is a contract of bailment of the appellants’ log production unit and it confers on the hirer (the second defendant) an option of purchase. Clause (7) of exhibit 1 confers on the hirer the option of purchase of the unit in its entirety for the sum of £G500, exercisable within a fortnight, after four equal monthly instalments of £G2,500 shall have been paid by him to the appellants. The latter on its part, is duty bound to transfer to the hirer the ownership and license registrations of the vehicles and all other assets as and when the said monthly instalments and purchase money are paid: see section 8 of the second schedule. Exhibit 1 contained the usual statutory notice under section 12 (1) of the Hire-Purchase Act, 1958 (No. 55 of 1958), which was then in force, reserving the hirer’s right to terminate the agreement and restricting the owner’s right to recover goods except under a court order after the payment by the hirer of 75 per cent. of the total monthly instalments.
In my opinion, the learned trial judge correctly described exhibit 1 as a hire-purchase agreement; but, with respect, he erred when he inferred from the wording of clause (2) that “the second defendant was also a servant of [the appellants].” Clause (2) stipulates that “during the continuation of the hiring, the hirer shall devote his whole time and attention to the operation of the said unit as agent for and under the supervision and complete control of the [appellants].” Superficially, this clause would seem to vest control in the running of the entire production unit in the appellants; but, if one looks at the substance of the whole agreement and not at isolated passages, one is left in no doubt that it is a normal hire-purchase agreement to which has been added certain safeguards and financial provisions for the security of persons who were staking out so much money on an important business venture. Be that as it may, on the available evidence, the day-to-day or immediate operation of the production unit and business at Awaso was under the control and management of the second defendant and not of the appellants, who contented themselves with occasional visits to the bush by their inspector. Reserving for the moment the question of who originally employed the first defendant as the driver of the lorry, it is quite clear from the evidence that it was the second defendant and not the appellants who paid his wages, who controlled and directed, or at least had the right to control, his daily duties as a driver based at Awaso. During the currency of the hire-purchase agreement, it is clear that the first defendant was employed as part of the production unit and business at Awaso under the day-to-day control of the second defendant, and his work as a driver was being done as an integral part of the said business. In short, the relationship of master and servant subsisted, during the currency of the hire-purchase agreement between the first and second defendants and not between the first defendant and the appellants.
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Clause (3) of the said hire-purchase agreement undoubtedly settles the issue of whether or not the second defendant was, quoad the appellants, an independent contractor or a servant (as was held by the learned trial judge) because it stipulates that during the currency of the hiring, “the company [the appellants] will finance his [i.e. the hirer’s] operations to the extent of making such cash advances to cover the wages of all employees necessarily employed within the unit, all petrol and oil consumed in the unit’s operations and all freights and such other charges and expenses as shall be agreed.” These financial provisions are clearly fatal to any theory that the second defendant was the servant of the appellants because a servant normally receives a wage, bonus or salary from his employer but he is not financed by him in the way and to the extent provided for under the said clause (3). The clause clearly bespeaks of an independent timber contractor in business on his own account and who is being afforded credit facilities as and when required by him for the execution of his operation, for the payment of his employees, and for the payment of freight, transport and other incidental expenses necessarily incurred by him in his business enterprise. The second defendant was, as a matter of economic reality, independent of any control or interference from the appellants. He merely undertook to produce a specified result, employing his own means, utilising the assets in his possession and exploiting credit facilities to produce that result. He is to be distinguished, on the facts of this case, from a servant who acts under the direct control and supervision of his master and is bound to conform to all reasonable orders given him in the course of his work. In the circumstances, therefore, the appellants are not vicariously liable for the torts of the second defendant and it is my respectful conviction that the learned trial judge erred in holding otherwise.
Another reason stated by the learned trial judge in support of his conclusion that the appellants were vicariously liable for the admitted negligence of the first defendant was that Ayaya was originally employed by the appellants and that he either continued to be in the appellants’ employment for the duration of the hire-purchase agreement or else was transferred by his general employer (the appellants) to the special employer (the second defendant) upon the execution of the hire-purchase agreement and that the appellants as the general employer continued to be vicariously responsible for his tortious acts thereafter. The attitude of an appellate court to findings of fact made by a trial court is too well-known to need a restatement here. Suffice it to state that as a rule, an appellate court will not interfere with findings of fact by a trial court where there is evidence to support those findings. The presumption is in favour of the correctness of the facts as found by the trial judge. However, where upon the evidence on record, the balance of probabilities weighs heavily against the findings of fact made by a trial court, an appeal court has a duty to reverse those findings. More particularly, in the case of documentary evidence, the appellate court is in as good a position as the trial judge to decide what inferences should be drawn from such evidence; and it is entitled, if it thinks the trial judge drew the wrong inferences, to set his decision aside.
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In this case, the primary finding of fact made by the learned trial judge that Ayaya was originally employed by the appellants is, in my respectful opinion, unreasonable and unsupported by the evidence on the record. On this issue of fact, the trial court had to weigh the second defendant’s assertion against the appellants’ denial. While the second defendant maintained that Ayaya was originally employed by the appellant, the latter denied that fact. It is true that the second defendant in his evidence-in-chief on 7 April 1965, stated that it was the appellants who originally employed Ayaya. But it is significant that in an affidavit sworn to by the self-same second defendant for himself and on behalf of Ayaya on 29 April
1964 in support of a motion to set aside the final judgment which had been entered against the first and second defendants in this very suit, he deposed: “(1) That I am the second defendant herein and I swear this affidavit for and on behalf of myself and the first defendant herein who was in my employ at the time of the accretion of the right of this action.” In paragraphs (10) and (11) of the said affidavit the second defendant deposed to the fact that before the issue of the writ, the plaintiffs had agreed at an arbitration held at Mr. Donkoh’s house at Bibiani between himself and the plaintiffs to accept a compensation of £G250 in full settlement of their claim, and that he had been requested to provide, and he had in fact provided, customary drinks totalling one bottle of schnapps and 14s. 6d. for the arbitrators. Not only did the learned trial judge fail to disbelieve the second defendant in his sworn testimony in view of his earlier affidavit deposition to the contrary, but the learned trial judge actually held the view that there was no contradiction between the two pieces of evidence on the untenable ground that the second defendant was running the appellants’ business at the time of the accident. Here the learned judge made a wrong evaluation of the available evidence with respect to the issue of fact in question, that is, whether the second defendant employed Ayaya or not. It was clear that the second defendant had made two contradictory sworn statements about that issue within the space of a year. The learned judge merely side-stepped the issue and made an unrelated finding about who was running the appellants’ business at the time of the accident. It cannot, however, be gainsaid from the documentary evidence before this court that the second defendant stands discredited on that issue of who employed Ayaya in view of his two contradictory sworn statements. Furthermore, the second defendant told a number of obvious lies in the course of his evidence which should have convinced the trial judge that he was not worthy of credit. In the first place, he stated during cross-examination that he only discovered since 25 May 1964, that Ayaya was neither paid nor employed by him; whereas a year previously, to be precise on 29 June 1963, he had stated these allegations in paragraph (3) of his statement of defence. In the second place, in an affidavit sworn by him on 9 June 1964, in support of his application for a review in this suit, he deposed to the fact that he had only recently discovered the hire-purchase agreement and he had found from the said
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document that he was neither the owner of lorry No. AS 5117 nor the employer of Ayaya; but on any charitable view of the matter, it is clear that he had been in possession of the document at all material times since his said defence filed a year previously by counsel acting on his behalf contained copious extracts from the said agreement. Thirdly, to keep up his sham posture of innocence, he denied during cross-examination all knowledge of why the appellant should have provided him with credit facilities. Again, in one breath he denied having ever received a statement of account from the appellants or a letter dated 21 July 1962 (to which the said statement was attached); but when recalled the following day, he admitted his signature which certified his agreement with the said statement of account and which was accepted in evidence without objection and marked exhibit 3. His mendacity indeed knew no bounds: on oath he challenged the correctness of two clauses in exhibit 1 which he, a literate person, had signed. And yet these two clauses contained the vital provisions of the hire-purchase agreement, namely, the contractual monthly instalments and the option of purchase. It is obviously quite unreasonable and wrong to regard the second defendant as a witness of truth in the light of these manifold contradictions and prevarication’s on material issues.
Against this wholly unreliable and unsatisfactory sworn testimony of the second defendant, the trial court had before it all the relevant documents tendered by the appellants through their director. All of the wages and pay sheets, evidencing payment of all wages and salaries for the appellants’ labour force for the period before and during the hire-purchase agreement period, were tendered in evidence. In none of these pay sheets did the name of the first defendant occur. To me the reasonable inference is obvious. If Ayaya had been on the appellants’ labour strength during the period under consideration, his name would have appeared thereon, unless the record tendered was incomplete or had been forged. But there was not a scintilla of evidence adduced to challenge either the authenticity or completeness of the record. The learned trial judge, however, formed the view that the evidence produced on this issue by the company was not conclusive that the first defendant was not working for the company before the agreement. With respect, I fail to see how the appellants could have been more thorough considering the fact that the agreement was executed on 16 May 1961, and that the pay sheets produced went back to January 1961 and covered all subsequent months up to and including January 1962, the month of the accident. On another view of the matter, it is at least doubtful whether the learned trial judge correctly applied the maxim ei qui affirmat, non ei qui negat, incumbit probatio (the obligation of proving the facts in issue results from the principle that he who asserts a matter must prove it, but he who denies it need not disprove). It would appear to me that from the state of the pleadings, the burden was on the second defendant to prove his positive assertion that the first defendant was originally employed by the appellants, and that it was not for the latter to disprove the negative.
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The judgment of the trial court was completely silent about exhibit 3, a vital piece of documentary evidence, which the second defendant admitted signing. On the face of it, exhibit 3 evidences an ordinary business account and certainly not an account between a master and servant. It further lends weight to the construction already put on clause (4) (financial provisions) of the hire-purchase agreement that the transaction was in substance a contract between an independent timber contractor who was in business on his own account and the appellants who had divested themselves of the immediate control and possession of the entire production unit and business but were content to offer credit facilities and to secure themselves with a remote and occasional supervisory check from their Takoradi base. On the totality of the evidence, it is clear the second defendant failed to establish the existence of a master and servant relationship between the appellants and either the first or second defendants. In the circumstances, the trial court erred in imposing vicarious liability on the appellants for the negligence of the first defendant who was neither their servant nor agent.
For the above reasons, I would allow the appeal and set aside the judgment of the court below dated 20 April, 1965 with costs.
JUDGMENT OF APALOO J.A.
I agree.
JUDGMENT OF ARCHER J.A.
I also agree.
DECISION
Appeal allowed.
T.G.K.
