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Local Authority not responsible for loss to third party when its employee had accident outside work time

Local Government
Ombudsmen Act 1975
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Ombudsmen Act 1975
Local Authority
Nadja Tollemache
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Motor vehicle accident with Board vehicle—reasonableness of decision not to compensate complainant for loss suffered as a result of the accident

On the evening of 4 December 1989 at approximately 7.5Opm the complainant was out driving her vehicle. The weather was fine, the light was good and the road was clear ahead. She had just passed an intersection and had slowed, signalled and driven to the white median line on the road in order to make a right hand turn. A Board vehicle behind her then attempted to overtake and collided with the driver’s side of the complainant’s car. The complainant took the full impact of the collision and sustained a deep gash to her skull, lacerations and bruising to her hands and right thigh. The other vehicle involved in the collision was a Board truck and the driver was a Board foreman. It was clear that the foreman had been drinking. He was subsequently convicted of driving while intoxicated, of careless driving and was also disqualified from driving for a period of time.

The complainant approached the Board seeking compensation for damage suffered as a result of the accident. The Board refused to accept any liability although it did provide the complainant with a rental car free of charge until the complainant’s insurance company had paid out and the complainant had bought another car. The complainant then asked the Ombudsman to investigate whether the Board had acted unreasonably by not compensating her for loss suffered as a result of the accident.

It was clear that the Board foreman had not been using the truck on a work related matter and had no authority from the Board to use the truck for private purposes. However, the Board’s normal practice was to allow those staff using Board trucks to drop off other staff members on their way home.

After work and prior to the collision, the foreman had picked up a passenger who was not a Board employee and attended a party. Both these actions were contrary to clear Board rules. The Board was not aware until after the collision that the foreman had been using the vehicle for his own private use on that evening.

The Board had strict rules about the use of its vehicles. The foreman would have been expected, after work, to take the vehicle home within a reasonably short period of time. If he had wanted to go out after work, he would have been expected to use his own private transport. The Board also had rules concerning the use of its vehicles and drinking and driving. From time to time these rules were reinforced by way of staff circulars distributed to staff with their pay advice slips. These rules were also covered in the Board’s employment information brochure which was issued to all new staff.

The foreman in question had been in the Board’s employ since June 1973 and would have received both the Board’s employment information brochure and its staff circulars. Also, in every Board vehicle there was a vehicle folder which clearly set out the above rules. In addition, the Board conducted in-house driver training programmes at which the subject of drinking and driving while in charge of a Board vehicle was discussed. It seemed clear that the Board had made every effort to warn its employees against using Board vehicles without permission and/or while drinking and driving. The foreman knew full well what the Board’s rules were. Nevertheless he broke them which in turn resulted in the collision with the complainants vehicle in December 1989.

The question in this case was whether the Board should be held responsible for its employee’s actions in these circumstances.

The Ombudsman examined the relevant New Zealand case law in similar situations. It appeared that where an employee (using a work vehicle) causes damage while acting within the scope of or during the course of his employment, an employer can be held to be vicariously liable for any damage suffered by an innocent third party. However, where an employee does acts which have not been authorised by his/her employer and which are done outside of the course of employment, the employer cannot be held liable for any damage caused by an employee to an innocent third party.

In this case it was clear that the Board gave no authority for private use of the vehicle. It was also clear that the foreman was not using the vehicle during work hours or for work purposes and that the employee had deliberately breached at least 2 of the Board’s rules by his actions on that particular evening.

The complainant submitted that even if the Board had no legal responsibility to compensate her for her loss, it had a moral responsibility to do so. The Ombudsman could not accept this argument. It seemed to the Ombudsman the next step would be to require the Board to compensate an innocent third party for loss suffered where a Board vehicle had been stolen by a thief who has an accident causing injury to an innocent third party. The fact that the Board is a local authority did not require it to carry a heavier burden of responsibility for its employees’ actions outside of work than any other organisation or private employer.

There was no doubt in this case that the complainant was the innocent victim. However, it was clear that the complainant’s remedy for redress was against the foreman personally and not the Board. The complaint was not sustained.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

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