Case Study: Hollis V Vabu

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CLAW1001: Commercial Transactions A

Case Analysis
Hollis v Vabu Pty Ltd [2001] HCA 44

Submitted by: Sindhuja Shankar
SID: 305 127 950
Table of Contents

Case Summary3
Critical Analysis4
Commercial Implications5
Legal Implications6
Appendix † Research Plan 8
The case Hollis v Vabu Pty Ltd[1] confirms the long held doctrine that employers are vicariously liable for the negligence of their employees during the course of their employment. In comparison to cases such as Humberstone v Northern Timber Mills[2] and Stevens v Brodribb Sawmilling Co Pty Ltd[3], which appear to contribute to the development of the application of common law to evolving social conditions, the Hollis v Vabu Pty Ltd case may be considered as taking a step back in affirming the traditional notion of ‘control’ when determining the nature of employment relationships. The following will critically analyse the ratio and the legal and commercial implications prevalent in this case.

Case Summary
Vabu Pty Ltd trading as “Crisis Couriers” conducted a business of delivering parcels and documents using bicycle, motorcycle and motor vehicle couriers. On 22nd December 1994, Mr. Hollis was struck on the footpath by a cyclist as he was leaving a building in Ultimo. The unidentified cyclist was wearing a green jacket on which was printed “Crisis Couriers”. The accident resulted in a 25% permanent deficit in Mr. Hollis’s knee, which required surgery and rendered him to be unfit for work for a period of time. Mr. Hollis sued Vabu Pty Ltd claiming that the company was vicariously liable for its employee’s negligence.

The High Court focused primarily on the nature of the employment relationship between Vabu Pty Ltd and its couriers. The issue centered on determining the distinction between employee and individual contractors, in order to identify if Vabu Pty Ltd is vicariously liable for its courier’s negligence.

Vicarious liability and negligence are significant issues in but will not be considered in this analysis.

As this case is an appeal decision, the ratio/rationes can come only from those legal issues that were in dispute[4]. The main legal principle the High Court applied in deciding this case is the common law concept of ‘control’ in distinguishing an employee from an individual contractor. Decision

The High Court used a holistic approach and ruled in favour of Hollis. In a majority judgment the High Court held that “viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations” hence could not be considered as independent contractors.

Critical Analysis
The critical analysis focuses on the definitions of employee and independent contractor and the common law concept of ‘control’ applied to the post-industrial era in determining whether an employer is vicariously liable.

“Employees are defined as workers employed under the contract of service while independent contractors are defined as workers employed under a contract for service”[5]. The Court of Appeal found that the couriers were independent contractors giving the main reason that the couriers were required to provided and maintain their own bicycle and equipments. The Court of Appeal in this case appears to give semantic importance to the definitions of employee and individual contractor. The High Court rectified the initial decision stating that the costs incurred by the bicycle couriers were not sufficiently significant to merit their definition as individual contractors.

This decision by the High Court is supported by the case Australian Air Express Pty Ltd v Langford[6] in which the courier was found to be an independent contractor as “ownership of an expensive item of equipment such as a truck is a...
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