Over the last few years our courts have increasingly handed down judgments dealing with employers’ vicarious liability for delicts committed by their employees during so-called “frolics of their own”. In these judgments the standard requirements for vicarious liability were regularly confirmed, with the exception that the requirement that the delict should have been committed within the course and scope of the employee’s employment underwent major development. In the constitutional court judgment of K v Minister of Safety and Security handed down in 2005 the so-called “standard test” was transformed: the second tier of the test which is applied to establish a sufficiently close link between the employee’s delict and the business activities of the employer was developed from a purely factual test to one incorporating mixed questions of fact and law in which public policy in terms of the constitution plays a major role. Following this judgment our courts increasingly began giving favourable judgments to plaintiffs who had suffered harm flowing from the actions of employees deviating from their normal duties to pursue their own objectives, against their employers (so-called “deviation” cases). This tendency presented itself not only where such actions were instituted against the state in its capacity as employer, but also against private institutions such as a security company, as in the recent judgment of the supreme court of appeal in the case of Stallion Security (Pty) Ltd v Van Staden in 2020. In Oudehoutkloof Boerdery (Pty) Ltd v Venter ((1649/2018) 2021 ZAECGHC 85 (16 September 2021)) the salient facts were that the defendant was the sole proprietor of JLC Cruisers, a business selling restored Toyota vehicles. The defendant’s son was his only employee, with wide-ranging tasks such as marketing, bookkeeping and the general running of affairs. The plaintiffs had previously deposited certain amounts into JLC Cruiser’s bank account following oral agreements for the sale to them of certain vehicles. Thereafter the defendant’s son made unauthorised withdrawals from the bank and misappropriated all the deposited funds for his own use. Shortly before this became known, he committed suicide. The plaintiffs then successfully instituted a delictual claim against the defendant based on the latter’s vicarious liability for the actions of his employee son committed while the latter was on a “frolic of his own”. It is pointed out that the court failed to consider two fundamental requirements for vicarious liability, viz that the employee should have committed a delict against the plaintiffs and that an employeremployee relationship should have existed between the defendant and the perpetrator. It is argued that although the son definitely committed wrongful acts of misappropriation of funds against his father’s (the defendant’s) sole proprietorship, such acts were in fact not delicts committed against the plaintiffs, in particular due to the absence of the delictual elements of wrongfulness, harm and causation. Furthermore, some doubt is expressed regarding the court’s finding that the son had been an employee and not, for example, an independent contractor. Furthermore, based on the assumption that I may be mistaken regarding the former conclusions, the court’s finding that the son had acted within the course and scope of his employment is criticised. It is then suggested that the plaintiffs should simply have instituted a contractual remedy affording them restitution of their deposits. On the assumption that my analysis that there was no delictual basis of the plaintiffs’ actions is erroneous, the final question posed is whether the availability of contractual claims does not exclude delictual remedies in a case such as the present. On the authority of judgments such as Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd, Trustees, Two Oceans Aquarium Trust v Kantey and Templer (Pty) Ltd and AB Ventures Ltd v Siemens Ltd the conclusion is drawn that the concurrence of contractual and Aquilian claims should result in the court’s rejection of the delictual claims. Finally, it is pointed out that an outcome such as that in the case under discussion could have a definite bearing in instances where someone in the defendant’s position had indemnity insurance cover. In such an instance the outcome would be advantageous to both the plaintiffs and the defendant: the latter’s damage would be covered, enabling him to restore the plaintiffs’ deposits. The only loser would be the defendant’s insurer. For this reason, this judgment should arouse the interest of South African insurance companies.
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Oct 24, 2024
Hui Sun + 3
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