Can an employer be deemed liable for the torts committed by his independent contractors?

Hemraj & Co Sdn Bhd & Anor v Tenaga Nasional Bhd & Ors [2022] 7 CLJ 169

• The 1st Appellant (‘Hemraj & Co’), owned a bungalow and had appointed the 2nd Respondent contractor (‘R2’) to connect the bungalow’s sewerage system to a sewerage tank owned by Indah Water Konsortium Sdn Bhd (‘IWK’).

• To enable the connection to be made, a part of the public road in front of the bungalow had to be excavated.

• The excavation work was tasked to the 3rd Respondent (‘R3’), a licensed sewerage contractor while the 4^th Respondent (‘R4’) hired a backhoe operator and supervised the excavation.

• The excavation work was carried out without obtaining the pre-requisite approvals of the 1st Respondent (‘Tenaga National Berhad’), the local authority (‘DBKL’) and IWK.

• The works had damaged a 132KV underground cable belonging to TNB.

• TNB then sued the Hemraj & Co and its director (the 2nd Appellant) and thereafter obtained a judgment against Hemraj for RM3,110,445.09 plus administrative costs to replace the damaged cable.

• The High Court judge in his judgement held that Hemraj & Co was negligent in breaching its non-delegable duty of care by allowing the unauthorised excavation works to be carried out in a negligent manner by the contractors on a public road thereby damaging TNB’s underground cable.

• Hemraj & Co appealed to the Court of Appeal. Hemraj & Co contended that they should not have been held liable for the negligence of R2, R3 and R4 who were independent contractors employed by Hemraj & Co.

• The Court of Appeal held that the general principle is that an employer is not liable for any tort/negligence committed by his independent contractor.

• However, an employer may be liable for the tort/negligence committed by the independent contractor if the employer is deemed to have committed the tort himself.

• This is an exception to the general rule and the employer is liable where the duty is held to be a non-delegable duty.

• The Court of Appeal held that when Hemraj & Co engaged another contactor to do the works they had a positive duty to protect the underground cable and, a duty to the public who were users of electricity distributed/transmitted via the underground cable.

• That duty cannot be delegated to the contactors appointed.

• The Court also found that the Hemraj & Co was aware that the excavation works on a public road required permits from both DBKL and IWK.

• The Court also found that Hemraj & Co was aware that the excavation works were carried out without the requisite permits from DBKL, IWK and TNB.