Hemraj & Co Sdn Bhd v Tenaga Nasional Bhd [2023] 1 MLJ 785

Case: Hemraj & Co Sdn Bhd v Tenaga Nasional Bhd [2023] 1 MLJ 785

Court: Federal Court (Putrajaya)

Topic: Non-delegable Duty of Care

Facts 1.        It was an appeal against the decision of the Courts below that held the Appellant (referred to as the “First Defendant”) for negligence.

2.       The Second Defendant is the director of the First Defendant.

3.       The negligence was based on the violation of a non-delegable duty of care owed by the Respondent (referred to as the “Plaintiff”).

4.       In this case, parties will be referred to, as they were in the High Court.

5.       The Plaintiff, which is Tenaga Nasional Bhd (TNB), sought compensation for expenses related to urgent repairs and replacement of an underground cable.

6.    This cable was damaged during excavation work conducted by third-party contractors hired by the Defendants.

7.       The excavation was performed in front of a house owned by the Defendants, with the aim of connecting the house’s septic tank to the main public sewerage system.

8.       The Plaintiff argued that performing excavation work on a public road, where there could be various underground cables and pipes, posed inherent risks and was a hazardous activity.

9.       The Plaintiff’s claim was that because the Defendants had appointed these third parties as consultants and contractors for the excavation work, they held a non-delegable duty of care toward the Plaintiff.

10.     Consequently, the Plaintiff asserted that the Defendants were accountable for any negligence displayed by the appointed consultants/contractors.

11.      The High Court held that the First Defendant owed a non-delegable duty of care to the Plaintiff and therefore liable for the loss and expense incurred by the Plaintiff.

12.     The Court of Appeal thereafter affirmed the findings of the High Court.

13.     Aggrieved with the decision of the Courts below, the Appellant made an appeal to the Federal Court.

14.     To avoid the confusion of the reader, the Second Defendant will not be the party in the appeal before the Federal Court since the claim against the Second Defendant was dismissed in the High Court.

Issue 1.       Whether the First Defendant owed a non-delegable duty of care to the Plaintiff?
Ratios 1.       To determine the issue in the appeal, the law on the principle of a non-delegable duty of care promulgated that a defendant who delegates the performance of its integral duty to an independent contractor, will invariably be held liable for the negligence of the independent contractor.

2.      However, it was a challenging task for the Federal Court to apply the principle in the present case because there has not been a legally clear and all-encompassing structure established to implement this principle.

3.       Therefore, the Federal Court made a reference to the English Court of Appeal in Biffa Waste Services Ltd and another v Maschinenfabrik Ernst Hese GMBH and another [2008] EWHC 6 where it was ruled that  any acts which are ‘exceptionally dangerous whatever precautions are taken’ is the preferred approach as it alleviates the difficulties of distinguishing activities that are inherently dangerous and one which are not.

4.     The Federal Court was of the view the approach taken in the Biffa Waste case offers a practical and conclusive guideline for identifying what qualifies as an extremely hazardous act.

5.        In Woodland v Essex County Council [2013] UKSC 66, SC, Lord Sumption made a categorization of non-delegable duty of care where the first category refers to extraordinarily hazardous activities, regardless where the activity is carried out (“Category 1”) and second category refers to special relationship that exists between the principal and the victim such that the principal is not permitted to delegate his tortious liability to an independent contractor (“Category 2”).

6.       Nonetheless, the idea is to skip rigidly labeling things as extremely hazardous.   Instead, the Federal Court focus on assessing the activity and available safety measures.  If precautions can minimize the risk, the activity is not exceptionally hazardous and does not fit Category 1.   But if, even with precautions, there is still a significant risk, then it falls under exceptionally hazardous Category 1.

7.        As far as the present case is concerned, the Plaintiff’s task was connecting a sewage pipe from a house to the mains. The third-party contractors should have done a utility-mapping before digging to spot TNB’s underground cable.

8.       In the present case, the Federal Court found that the third-party contractors did not do this. However, the real question is whether the task (excavation and sewage connection) would still be extremely dangerous with the mapping.

9.       According to PW 4’s evidence, mapping the utilities would’ve shown where TNB’s cables were and eventually prevented any damage. This mapping would have avoided cable damage.  It means that if proper precautions were taken (utility mapping before digging), the excavation work wouldn’t be extremely dangerous.

10.       Considering the principles from Woodland and Biffa Waste, it was clear that the excavation work done by the Defendants was not extremely dangerous.

11.      Excavations are common, and even with reasonable care and mapping, there was no significant risk of serious harm. The fact that it was near a highway did not matter; the key is whether the work was exceptionally dangerous no matter the precautions.

12.        The Federal Court held that there was no evidence of a significant risk from the renovation work, even if done correctly. The excavation work done by homeowner’s contractors was usual and did not qualify as extremely dangerous. Thus, the homeowner did not owe a special duty to the Plaintiff, for the contractor’s negligence.

Decision 1.        The First Defendant did not owe a non-delegable duty of care to the Plaintiff.

2.       The appeal was allowed with costs.

Key Take Away 1.     The concept of non-delegable duty of care has some drawbacks. Holding blameless parties strictly liable might seem excessive.

2.     However, the principle on negligence fundamentally enforces a duty to prevent harm to others.  This principle also underlies non-delegable duty of care.  This duty, as seen in Woodland, is quite restricted in its scope.

3.     Importantly, the Federal Court acknowledges that non-delegable duty is a heavy responsibility. It should only apply when it’s fair, just, and reasonable based on specific situation.

4.     The Federal Court in the present case concluded that it’s not right to make homeowners responsible for routine construction tasks through a non-delegable duty.  This could unfairly make homeowners liable for contractor actions they can’t fully manage, causing unclear responsibilities.

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