MUNIB AKHTAR, J.--- This application filed by the plaintiff, seeks interim relief in the following circumstances. Learned counsel for the plaintiff submitted that the plaintiff held 3326 shares (of par value Rs.10/-) in M/s Brooke Bond Pakistan Ltd. ("BBPL"). These shares were in the plaintiff's possession at all material times. The plaintiffs husband also held some shares in BBPL. In 1997, this company merged with M/s Unilever Pakistan Ltd., the defendant No.l. In lieu of the shares held by the plaintiff in the former company, she became entitled to 773 shares (of par value 50/-) in the latter. The defendant No.2 acted as the Share Registrar for the defendant No.1, performing all the functions ordinarily entrusted to such Registrars by listed companies. As presently relevant it had, at all material times, custody of the share certificates that the shareholders of BPPL were entitled to in the defendant No.1 on account of the merger. These shareholders could obtain those shares on surrender of their shares in BPPL. Many, including the plaintiff's husband, did obtain the share certificates. Others however did not and the plaintiff was one such. She retained her share certificates in the erstwhile BBPL, and her shares (represented by the relevant certificates) in defendant No.1 continued to remain with the defendant No.2. There was of course nothing unusual in this.
2. Having become a shareholder of the defendant No.1, the plaintiff was entitled to participate in such dividends as were declared by it from time to time. She continued receiving the relevant dividend warrants, which were sent by the share registrar, the defendant No.2. Learned counsel submitted that the first such warrant was received on 17.11.1997 and the last on 22.10.2009. It appears that in May 2010 the defendant No.1 declared another dividend. In the normal course the plaintiff's husband received his, dividend warrant. However, the plaintiff did not. She made inquiries and was shocked to be informed (by the defendant No.2) that no dividend warrant had been sent to her because she no longer held any shares in the defendant No.
1. The plaintiff immediately wrote to the defendant No.2 (on 10.07.2010) stating that she had never disposed off her shares in the defendant No.
1. In reply, she was informed (on 15.07.2010) that that her entire shareholding had been placed in the CDC system through a market participant, M/s Continental Capital Management (Pvt.) Ltd.
("Continental Capital"). It appears that the shares were thereafter sold on the stock market and have, since then, effectively disappeared. Although the plaintiff thereafter deposited her share certificates in BBPL on the assurance, according to her, that she would be given replacement shares in the defendant No.1, this never came about.
3. Referring to the correspondence between the parties, learned counsel submitted that the defendant No.2 initiated inquiries at its own end, and by letter dated 06.05.2011 informed the plaintiff that it appeared that the plaintiff's shares (in the defendant No.1) had been "fraudulently" inducted into the CDC system. According to the defendant No.2's inquiry a fictitious sub-account on the CDC system had been opened in the plaintiff's name through Continental Capital and this account was fraudulently used to dispose off the plaintiff's shares. Learned counsel emphasized that the plaintiff's shares in the defendant No.1 could not be dealt with at all unless she first surrendered the shares held in BBPL and, as noted above, this had not been done till after the fraud had come to light. The plaintiff thereupon served legal notices on both defendants who, according to learned counsel, by their respective replies admitted that a fraud had been committed on the plaintiff by and through Continental Capital. However, learned counsel emphasized that such fraud could not have been possible without the connivance and collusion of the staff and employees of the two defendants, and they were therefore as much liable to the plaintiff. The shares could not have been misappropriated without the involvement of the defendants' employees.
4. Learned counsel submitted that the plaintiff was thereafter constrained to institute a criminal complaint under section 200, Cr.P.C. Against the officers of the defendants and Continental Capital.
The magistrate marked the matter to the concerned police station (PS Mithadar, Karachi) for inquiry. Learned counsel referred to the results of the inquiry in some detail and submitted that these clearly showed that the fraud and misappropriation had been perpetrated by the employees of the defendant No.2 acting in connivance with those of Continental Capital. Referring to the results of the inquiry learned counsel submitted that all the relevant facts stood admitted and established (certainly for purposes of the present application). There was theft of the plaintiff's shares from the offices and custody of the defendant No.2. The inquiry showed that it was a staff member of the defendant No.2 who acted in collusion with some employees of Continental Capital to give effect to the conspiracy whereby the plaintiff was deprived of her shares. In particular two persons, one Noman who was the employee of the defendant No.2 and one Imran, an employee of Continental Capital, were identified in the police inquiry as having played a central role in the whole affair. Learned counsel submitted that the defendant No.2 was vicariously liable for the acts of its employees, and the defendant No.1 was vicariously liable for the acts of its share registrar, the defendant No.2. This constituted the core of the plaintiffs case. Learned counsel submitted that the record clearly established that the plaintiff had made out a case for interim injunctive relief and prayed accordingly. I may note that the interim relief sought is for the defendants to deposit either 773 shares in the defendant No.1 with the Nazir of the Court or a sum of Rs.11,595,000/-, representing the market value of the shares. On 30.05.2013 (when the suit was instituted) an ad interim order was made to this effect. This order was challenged in appeal by the defendant No.1 (HCA 89/2013) and on 21.11.2013 was modified to the extent that it applied only in respect of the defendant No.2. As so modified, it continues to hold the field.
5. Learned counsel for the defendant No.2 opposed the application. The facts, as stated above, were not denied in any material respect. However, it was contended, and this was the central point made by learned counsel, that the defendant No.2 was not vicariously liable.. The said defendant's employee (the aforesaid Noman) was not acting in the course of his employment when he committed the theft/fraud in respect of the plaintiff's shares. Learned counsel also made certain submissions on other points. I intend no disrespect by not recording them but this is so because in my view the central issue --- and it is an important and interesting one --- that is raised by the present application is of vicarious liability. The other points taken are, with respect, without merit.
Insofar as the defendant No.2 is concerned the question is therefore whether this defendant is vicariously liable for the acts of its employee? To this, learned counsel submitted, the only answer could be in the negative. He prayed that the application be dismissed.
6. Learned counsel for the defendant No.1 submitted that this defendant had no liability for, or on account of, the acts of the defendant No.2 or any of its employees. Such liability, if at all, would arise only vicariously and by reason of the defendant No.2 acting as the share registrar of the defendant No.
1. Learned counsel submitted that there was no such liability. He prayed that the application be dismissed, either outright or at any rate insofar as the defendant No.1 was concerned. At the conclusion of the hearing, I had given permission for the filing of written submissions. Learned counsel for the plaintiff and the defendant No.2 did so, relying also on certain case law.
7. I have heard learned counsel as above, examined the record with their assistance and considered the case law relied upon. The material facts are not denied or disputed and, for purposes of the present application, can be regarded as established. These have been stated above and, to the extent required, are further set out below. As already noted, the question is of vicarious liability. Is the defendant No.2 vicariously liable for the acts of its employee and if so, is the defendant No.1 likewise so liable for the liability that would arise against the defendant No.2?
Obviously, the first part of the question is crucial for if there is no vicarious liability of the defendant No.2 there cannot be any of the defendant No.1. The analysis thus conveniently divides into two parts and I proceed accordingly.
8. The vicarious liability of an employer for the wrongful acts of his employees has many aspects but, as relevant for present purposes, depends on whether the wrongful act was within the course of the employment. What the courts have understood as constituting the course f employment has developed over the decades. The test most frequently opted is that which was advanced by Sir John Salmond in his well known treatise on the law of torts. In the most recent edition of that work, the wrongful act is in the course of employment: "If it is either (1) a wrongful act authorised by the master, or (2) a wrongful and unauthorised mode of doing some act authorised by the master. It is clear that the master is responsible for acts actually authorised by him: for liability would exist in this case, even if the relation between the parties was merely one of agency, and not one of service at all. But a master, as opposed to the employer of an independent contractor, is liable even for acts which he has not authorised, provided they are so connected with acts which he has authorised that they may rightly be regarded as modes although improper modes of doing them. In other words, a master is responsible not merely for what he authorizes his servant to do, but also for the way in which he does it. ... On the other hand, if the unauthorized and wrongful act of the servant is not so connected with the authorized act as to be a mode of doing it, but is an independent act, the master is not responsible: for in such a case the servant is not acting in the course of his employment, but has gone outside it." (Salmond and Heuston on the Law of Torts, 21st ed., 1996, pg.
443)
' The position in English law that has emerged more recently is stated as follows in the well known treatise Clerk and Lindsell on Torts (20th ed., 2010) where, after reproducing the foregoing passage from Salmond and Heuston, the learned editors state as follows (pp. 371-2; internal citations omitted): "6-29 Close connection test ... Adopting [the Salmond] test, the Courts historically sought to distinguish between those acts of an employee which constitute an improper mode of carrying out his duties and those acts which fall outside the scope of his employment. However, in the light of the leading case, Lister v Hesley Halt Ltd. [[2001] UKHL 22, [2001] 2 All ER 769] that test is now inadequate in cases involving an employee's intentional wrongdoing. There, the issue for the House of Lords was whether the employers of a warden of a school boarding house could be vicariously liable for the acts of sexual abuse perpetrated by that warden on boys in his care. Their Lordships held that the Salmond test was unhelpful in cases of intentional wrongdoing, particularly where the employee sets out to benefit himself. Instead, they looked to the close connection between the acts in question and the employment. As Lord Steyn put it, the test for whether an employee has acted in the course of his employment was whether the tort was "so closely connected with his employment that it would be fair and just to hold the employer vicariously liable". Applying this test to the facts of Lister it was held that, rather than the employment merely furnishing an opportunity to commit the sexual abuse, the connection between the employment and the torts was very strong. Lord Steyn noted that, "the reality was that the County Council were responsible for the care of the vulnerable children and employed the warden... To carry out that duty on its behalf. And the sexual abuse took place while the employee was engaged in duties at the very time and place demanded by his employment." Thus, he concluded, the sexual abuse was "inextricably interwoven with the carrying out by the warden of his duties". In a similar vein, the Court of Appeal held in Gravil v. Carroll [[20081 EWCA Civ 689] that a punch thrown by the defendant club's player in the melee that followed the final whistle in a professional rugby match, and which injured an opposition player, could be regarded as a sufficiently ordinary incident of a rugby match to engage the Defendant's vicarious liability.
' More broadly, Lister gives rise to considerable confusion. As Lord Nicholls accepted in the later case of Dubai Aluminium Co. Ltd. v. Salaam [[2002] UKHL, [2003] 1 All ER 97] where the test was again applied, the close connection test tells us nothing about what type or degree of connection is necessary in order to invoke the vicarious liability of the employer. As he put it: "this lack of precision is inevitable, given the infinite range of circumstances where the issue arises ... Essentially the Court makes an evaluative judgment in each case, having regard to all the circumstances and, importantly, having regard also to the assistance provided by previous Court decisions." A further confusion to which Lister gives rise is the way in which we are now to interpret certain earlier decisions --- such as those in Morris v. CW Martin & Sons Ltd. [[1965] 2 All ER 725] and Lloyd v.
Grace Smith & Co. [[1912] UKHL 1, [1912] AC 716J-- which were presented as though they involved vicarious liability when in fact they have been widely thought to turn upon the Defendant's breach of a non-delegable duty of care."
' At para 6-48 vicarious liability on account of theft by an employee is stated to arise in the following terms (internal citations omitted): "6-48 Employee's theft. It was formerly thought that an employer could not be liable for a theft committed by his employee on the ground that the act of stealing must necessarily be an act outside the course of his employment. However, theft by an employee, to whom the goods had been entrusted, has been interpreted to be an improper mode of performing what he was employed to do. This is the explanation of the decision of the Court of Appeal in Morris v. CW Martin & Sons Ltd. [supra] favoured by their Lordships in Lister v. Hesley Hall [supra]. However, it is possible to say of that case. - in which an employee stole a fur coat that had been entrusted to him - that he had simply converted it after it had been passed to him by his employer making it a case of him having converted the coat in the course of his employment. (It would therefore be different if the coat had not been entrusted to him by his employer.) His conversion of it amounted to the dishonest performance of that which he had been employed to do. It is submitted that, mindful of the interpretation of Morris adopted in Lister v. Hesley Hall, in cases of theft by an employee the first sensible question to ask is whether or not the stolen goods had been put in the custody of the employee by his employer. If they had, then the theft will have been committed by the employee in the course of his employment and, unless there is something in the contract of bailment to the contrary, the employer will be vicariously liable. If they were not, then the employer will not be vicariously liable for the theft, though he may be liable for a breach of a personal duty of care owed to the bailor. The decision of the Court of Appeal in Morris v. CW Martin & Sons Ltd. Was approved by the Privy Council in Port Swettenham Authority v. TW Wu 4 Co. [[1978] UKPC 13, [1978] 3 All ER 337] when the Privy Council finally laid to rest the heresy that an employer can never be vicariously liable. For a dishonest act on the part of his employee. Note, however, that the goods concerned must in some way have been entrusted to the employee for the employer to be liable.
The mere fact that the employment provided the opportunity for the theft will not be sufficient." (pp. 380-1)
9. Learned counsel for the plaintiff relied on Islamic Republic of Pakistan and others v. Abdul Wahid and others 2011 SCM R 1836. Three appeals, arising out of three suits, were disposed off together since the claims arose out of the same accident. The suits had been brought in this Court under the Fatal Accidents Act, 1885. The victims had all died in an incident at a railway crossing. The gates at the crossing had negligently not been closed by the Railway staff with the result that the victims crossed the railway lines at the same time as a locomotive was approaching. In the ensuing accident they lost their lives and the suits were brought by their legal heirs. The primary defense was of contributory negligence. The suits were decreed. The defendants appealed (by way of High Court Appeals) and the plaintiffs filed cross objections, being dissatisfied by the damages awarded. The appeals were dismissed and the cross objections allowed. The defendants appealed further to the Supreme Court. By means of the cited judgment, the appeals were dismissed. The issues requiring determination are set out at pg. 1842 and as presently relevant the question was whether the Pakistan Railways was vicariously liable for the negligence of its employees. As already noted, it had been found that the gates at the crossing had been left open negligently by the staff.
After a consideration of the case law, the Supreme Court held the Railways liable "keeping in view the principle that the employer in the matter of accidents of the nature involved herein is vicariously liable for the acts of omission, commission and negligence of his/its employees" (pg.
1846). In my respectful view, the cited decision is not of direct relevance for present purposes. The facts and circumstances before the Supreme Court clearly fell in the second part of SaLMond's test and were rather different from those at hand. Here, the wrongful act is the theft or misappropriation of the plaintiff's shares. The other case relied upon, Pakistan and others v. Haji Abdul Razzaque 2005 SCM R 587 is also, with respect, not directly relevant. The petition for leave to appeal before the Supreme Court also arose out of a suit filed in this Court under the Fatal Accidents Act. The incident was a road accident. The victim had been riding a motorcycle and was involved in a fatal accident with a truck driven by an employee of the Pakistan Air Force. The suit was dismissed but the High Court Appeal succeeded. The defendants petitioned the Supreme Court for leave to appeal, which was refused. It was observed as follows: "The fact that the truck belonged to petitioner No.1 and was functioning under the management and control of petitioners Nos.1 and 2 and that petitioner No.3 was in the employment of the aforesaid two petitioners, clearly tends to suggest that ordinarily they would be responsible for the act of their agent" (pg. 589). Again, with respect, the facts of the cited decision appear to fall squarely within the second part of Salmond's test.
10. Learned counsel for the 'defendant No.2 on the other hand relied on Armagas Ltd. v. Mundogas SA (The Ocean Frost) [1985] UKHL 11, [1986] 1 AC 717, [1986] 2 All ER 385 (HL) and Uxbridge Permanent Benefit Building Society v. Pickard [1939] 2 All ER 344 (CA). The facts in the first mentioned case were rather complicated and involved the employee's fraud by way of deceit. The appellants (plaintiffs) were induced to enter into what appeared to them to be a contract (a three year charterparty) with the respondents (defendants) on the basis of a representation that one Magelssen (M), a senior officer of the latter, had the necessary authority to do so. In fact, M had no such authority and an elaborate fraud had been perpetrated by him and one Johannesen. The contract was never known to the respondents. When the appellants sought to enforce it against the respondents they repudiated the same. The appellants contended that the respondents were vicariously liable for the acts of their employee and claimed damages for wrongful repudiation. The plea of vicarious liability was accepted in the High Court but rejected on appeal in the Court of Appeal and the latter decision was affirmed in the House of Lords. The decision of the House is stated as follows in the head note of the report in the Appeal Cases (pg. 718): "(1) that notwithstanding M. Having been appointed by the defendants as vice-president (transportation) and chartering manager, he was known not to have any general authority to enter into a three year charterparty and he could not, in the absence of any representation by the defendants as to his authority, reasonably be believed to have specific authority to notify the other contracting party that the defendants' consent had been obtained and thereafter to complete the agreement....
(2) That although an employer whose servant, having made a fraudulent representation which had caused loss to an innocent party contracting with him, could be liable to bear the loss by reason of having by words or conduct induced the innocent party' to believe that the servant was acting in the course of the employer's business, such circumstances did not exist where such belief, although present, had been brought about through misguided reliance on the servant himself, when the servant was not authorised to do what he was purporting to do, when what he was purporting to do was not within the class of acts that an employee in his position was usually authorised to do, and when the employer had done nothing to represent that he was authorised to do it; and that, accordingly, the defendants were not vicariously liable for M.'s deceit."
' As is apparent the facts of, and decision in, the cited case were far removed from those at hand.
What is in issue here is the theft and misappropriation of the plaintiff's shares and not any contract induced on the basis of a fraudulent misrepresentation by any employee of any of the defendants.
The second decision relied upon is also, with respect, of no direct relevance. The facts are more fully stated in the report of the High Court judgment appealed against (at [1938] 4 All ER 324, 325- 6). The plaintiff society advanced a sum of money to a fraudster, one Cox, on the basis of a mortgage created on the security of a forged deed. When the society sought to enforce the security it proved worthless and the sum was lost. The entire transaction had been handled on behalf of Cox by the managing clerk, one Conway, of the defendant solicitor. The solicitor himself was never involved in the transaction. In the High Court it was held that Conway was party to the fraud, though there was no such allegation against the solicitor himself. The defence was that the solicitor was not liable for his employee's fraud. This plea was rejected and the suit decreed. The appeal to the Court of Appeal failed, where the matter was put this way (pp. 347-348): "The initial approach to the building society was a thing which was within the scope, or, had it been a genuine approach, would have been within the actual authority, of Mr. Conway, and every step in the proceedings down to the delivery of the documents which took place, the answering of requisitions, the approving of the draft mortgage, the attendance at completion and the receiving, and giving of a receipt for, the money advanced, had they been taken within the course of a genuine transaction, would have been within the authority of Mr. Conway. When a person is put in that position, his actual authority and his ostensible authority are, in one sense, the same, because the ostensible authority of a solicitor's clerk put in such a position coincides with the actual authority which he is given. The ostensible authority, however, may go a little further, for the reason that it is not within his actual authority to commit a fraud. Nevertheless, it is within his ostensible authority to perform acts of the class I have mentioned. So long as he is acting within the scope of that class of act, his employer is bound, whether the clerk is acting for his own purposes or for those of his employer." (per Greene, MR)
' Again, it will be seen that the facts and circumstances of the cited decision were far removed from those at hand.
11. In my view, the close connection test more recently propounded and applied by the courts, as set out in the first passage from Clerk and Lindsell (supra), is more relevant for, and applicable to, the facts and circumstances of the present case. At the same time, the specific manner in which the test has been applied in theft cases has also to be kept in mind. In particular what was said by Lord Steyn in Lister v. Hesley Hall Ltd. (quoted supra) is to be read along with the statement in the second passage that the "goods concerned must in some way have been entrusted to the employee for the employer to be liable" and further that the "mere fact that the employment provided the opportunity for the theft will not be sufficient". However, it is also important to keep in mind that the facts have to be treated as .a whole. The various factors and elements must be weighed together and it is only then that the Court can make that "evaluative judgment" as is referred to in Dubai Aluminium Co. Ltd. v. Salaam (quoted supra). The authorities were reviewed recently in the Court of Appeal in Weddall v. Barchester Healthcare Ltd. [2012] EWCA Civ 25.
Although the facts did not involve theft by the employee (but rather an assault of one employee by another), the judgments provide a useful guide to the state of English law. The leading judgment was that of Pill, LI. Concurring, Aiken, LJ. Observed as follows (emphasis supplied): "63. In Bernard v. Attorney General of Jamaica [2004] UKPC 47 at [21], Lord Steyn described vicarious liability as a principle of "strict liability", with the consequence that the doctrine had to be kept within clear limits. The liability is strict in the sense that once it is proved that the actual tortfeasor would be liable to the victim and the court is satisfied that the doctrine of vicarious liability is applicable, then the person or legal entity said to be vicariously liable is fixed also with the liability, even though he or it was not personally involved with the tort at all. The rationale for the doctrine has been stated by Lord Millett in Lister v. Hesley Hall Ltd. [2002] 1 AC 215 at [65] to be that it is a "loss distribution device"; in other words, it is good policy that one person, whether a natural person or a legal entity, should be held responsible (on a strict liability basis) so that he or it should bear the financial consequences of the loss caused by the tort of another, even if the person or entity vicariously liable has not been involved in the tort at all. It has been said (Fleming The Law of Torts, 9th Ed (1998) p.410) that it is fair that those who employ others to advance their own economic interests should be placed under a corresponding liability for losses incurred in the course of that enterprise. In practice often the person whom the law holds vicariously liable is better able to bear the financial consequences precisely because he (or it) is the employer or the principal of an agent and, often, because the person or entity that is held vicariously liable has liability insurance, whereas the actual tortfeasor may not have the means adequately to compensate the victim.
64. The doctrine of vicarious liability is applicable in various circumstances such as a principal being liable for the tort of his agent and where a person has authorised or ratified the tort of another. But the most common circumstance in which the doctrine is invoked is where it is said that the employer is vicariously liable for the tort of his employee. Thus in each of these two appeals it is alleged that the corporate employer should be held vicariously liable for the tort of an employee and the torts in question are, in each case, intentional torts, i.e. Those of assault and battery against fellow employees.
65. It has long been accepted legal doctrine that an employer will not be vicariously liable for the tort of his or its employee, whether committed against a fellow employee or a non-employee, unless the tort was committed "in the course of the employee tortfeasor's employment". As Pill LJ has so clearly demonstrated in his analysis of the cases, courts have used various expressions and concepts to express the test of when a tort is or is not committed "in the course of the employee tortfeasor's employment". The most generalised test, adopted from previous authorities by Sir Anthony Clarke MR in Gravil v. Carroll [2008] EWCA Civ 689 at [21] is "whether the tort is so closely connected with the employment, that is what was authorised or expected of the employee, that it would be fair and just to hold the employer vicariously responsible". It would be unwise for this court to attempt to identify any one of the expressions or concepts that have been previously used by, this court or the House of Lords or the Privy Council as embodying the definitive test of when a tort was committed by the employee torfeasor in the course of his employment. The various different formulations have to be considered in the context of the particular facts of the case in hand."
' Moore-Bick LI, also concurring, said this (emphasis supplied): "59. As Pill Li has shown, the decisions in Lister v. Hesley Hall Ltd. [2001] UKHL 22, [2001] 1 A.C. 215 and Dubai Aluminium Co. Ltd. v. Salaam [2002] UKHL 48, [2003] 2 A.C. 366 introduced a more flexible principle governing the imposition of vicarious liability, which, in the case of wrongdoing by employees, turns on the closeness of the connection between the wrongful act and the employment. The principle is expressed in broad terms and since the factual circumstances of cases in which the imposition of vicarious liability falls to be considered differ widely, it is not surprising that one can find in the authorities different explanations of the factors which justify holding the defendant liable.
60. I have had the benefit of reading in draft the judgment of Aikens Li and agree with him that it would be unwise to treat any one of expressions or concepts that one finds in the authorities as providing the definitive test of whether an employee's wrongful act was committed in the course of his employment. Each case must be determined by reference to its own facts and the application of the broad and flexible test derived from Lister v. Hesley Hall. As Lord Nicholls recognised in Dubai Aluminium Co. Ltd. v. Salaam, that inevitably involves an element of value judgment, but one that has to be made within a defined context: see Sir Anthony Clarke M.R. In Gravil v. Carroll [2008] EWCA Civ 689 at paragraph 22."
Finally, reference must be made to Bernard v. Attorney General of Jamaica [2004] UKPC 47 where it was stated as follows: "21. Vicarious liability is a principle of strict liability. It is a liability for a tort committed by an employee not based on any fault of the employer. There may, of course, be cases of vicarious liability where employers were at fault. But it is not a requirement. This consideration underlines the need to keep the doctrine within clear limits.
23. As Lord Millett observed in Lister it is by itself "no answer to say that the employee was guilty of intentional wrongdoing, or that his act was not merely tortious but criminal, or that he was acting exclusively for his own benefit, or that he was acting contrary to express instructions, or that his conduct was the very negation of his employer's duty": para 79.... On the other hand, the Board is firmly of the view that the policy rationale on which vicarious liability is founded is not a vague notion of justice between man and man. It has clear limits. This perspective was well expressed in Bazley v. Curry (1999) 174 DLR (4th) [Supreme Court of Canada] where McLachlin J observed (at 62): "The policy purposes underlying the imposition of vicarious liability on employers are served only where the wrong is so connected with the employment that it can be said that the employer has introduced the risk of the wrong (and is thereby fairly and usefully charged with its management and minimization). The question is whether there is a connection or nexus between the employment enterprise and that wrong that justifies imposition of vicarious liability on the employer for the wrong, in terms of fair allocation of the consequences of the risk and/or deterrence."
' The principle of vicarious liability is not infinitely extendable ' In my view, the foregoing are the principles on the basis, and in the light, of which the present matter must be decided.
12. As noted above, the plaintiff filed a criminal complaint that was thoroughly investigated by the police. The material so emerging has been placed on the record. For understandable reasons the investigation focused on the role played by the employees of Continental Capital where a fictitious CDC sub-account was opened in the plaintiff's name, her shares put on the system and then disposed off. However, for present purposes, it is the role of the defendant No.2's employee, the aforementioned Noman, that is crucial. The vicarious liability, if at all any, of the defendant No.2 would arise on account of the wrongful acts of this person. The most detailed account available at present in the record of what Noman did appears from the statement made to the police by one Mr. Hussain Ahmed. This statement is also annexed to the written statement of the defendant No.2.
In material part, it was stated as follows: "In the subject case Imran S/o Muhammad Hanif ... An agent/employee of [Continental Capital] was directly involved and was the mastermind who enticed one of [defendant No.2's] staff Noman Skhir S/o Muhammad Sabir ... To play a part in carrying out the transaction. Noman was involved in handing over 773 physical shares of [the plaintiff] lying in the custody of [the defendant No.2] since long (as the shareholder had failed to take delivery of [the defendant No. l's] shares lying with [the defendant No.2]. Noman also arranged dispatch of verified transfer deeds of [the plaintiff] at an address different than [the plaintiff's] registered address, but falsified [the defendant No.2's] records to show that the dispatch was made to shareholder's registered address."
' Having considered the matter, in my view, the defendant No.2 must, at least on a prima facie basis, be held vicariously liable for the wrongful acts of Noman. While it is not fully clear from the record as presently available whether Noman had been entrusted with the share certificates or it was merely a case where Noman's "employment provided the opportunity for the theft", this has to be balanced against the fact that prima facie Noman apparently had a sufficient role in the defendant No.2 to have access to the share certificates and also to have the plaintiff's verified transfer deeds dispatched and for the record in relation thereto falsified. He also appears to have had a relatively free hand in dealing with Continental Capital, albeit through or with the latter's employees as had "enticed" him. Overall, it seems at least prima facie to be the case that Noman's wrongful acts "were so closely connected with his employment that it would be fair and just to hold the [defendant No.2] vicariously liable". This is the "evaluative judgment" that is required to be made while applying the relevant principles in the manner as explained, in particular, in Weddall v.
Barchester Healthcare Ltd. (supra), i.e., "in broad terms" and flexibly. I appreciate the caution advised by the Privy Council in Bernard v. Attorney General of Jamaica (supra). However, those observations are not attracted here. In my view the present facts and circumstances are sufficient to justify, at least prima facie and on the basis of the record as available, a conclusion that the defendant No. 2 is vicariously liable for Noman's wrongful act. I would, therefore, answer the first part of the question posed in para.7 above in the affirmative.
13. The first part having been so answered, it becomes necessary to consider the second part. Is the defendant No.1 vicariously liable for the liability that (vicariously) attaches to the defendant No.2?
At the relevant time the defendant No.1 was a listed company. Subsection (2) of section 204A of the Companies Ordinance, 1984 provides as follows: "Listed companies shall have an independent share registrar possessing such qualifications and performing such functions as may be specified by [SECP]" (emphasis supplied). The defendant No.2 appears to have acted for the defendant No.1 pursuant to this provision. The focus for present purposes must be on the requirement that the share registrar be "independent". The reason is that it is central to vicarious liability that the wrongful act be that of an employee acting within the course of the employment. The general rule is that an independent contractor cannot be such a person, and hence no vicarious liability can attach for his wrongful act to the person who employs him. Different tests have been propounded for determining when the relationship of employer and employee exists. The one that appears to have "best stood the test of time" (see Clyde & Co. v. Krista Bates Van Winkelhof [2013] 1 All ER 844 at [19]) and is widely applied (at least in English law) is that formulated by McKenna J in Ready Mixed Concrete (South East) Limited v. Minister of Pensions and National Insurance [1968] 1 All ER 433.
After reviewing the authorities, the learned Judge held that a contract of service (i.e., relationship of employer and employee) existed if the following three conditions were met: "(i) The servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service" (at pp. 439-440). Applying this test to the facts and circumstances of the present case, it is clear that no such relationship existed between the defendant Nos.l and 2 and that therefore, while acting as a share registrar, the latter must be regarded as an independent contractor. It follows that the defendant No.1 cannot be held vicariously liable for the acts for which the defendant No.2 has been held, prima facie, (vicariously) liable. Thus, the second part of the question posed in para 7 herein above must be answered in the negative. Since the matter was argued on the basis of vicarious liability, this answer is sufficient for present purposes. However, I would like to leave open for consideration in some future case the possibility of a defendant being liable in a similar fact-situation (i.e., of a company being liable towards its members for the wrongful or tortuous acts of its share registrar) on some other basis even where the latter's liability arises vicariously. One basis for such liability could be by way of a "non-delegable duty of care", the principles relating to which were recently considered by the UK Supreme Court in Woodland v.
Essex County Council [2013] UKSC 66, [2014] 1 All ER 483 (also reported at 2014 SCM R 258). However, since the matter was not presented or argued on such basis, the point must, as just noted, be left open.
14. The next point that requires consideration is whether the plaintiff is entitled to any interim relief at least against the defendant No 2, who para 4 above. The suit (as per the prayer clause in the plaint) is for recovery of 773 shares in the defendant No.2 or, in the alternative, for a money decree in the sum of Rs.11,595,000/- and, in addition, damages in the sum of Rs.5 million. Obviously, the exact shares as belonged to the plaintiff cannot be recovered (at least from the defendants) since they are long gone. The defendant No.1 was at the relevant time a listed company, and the specific relief of recovery must therefore be regarded as directed towards the plaintiff obtaining an order in relation to an equal number of shares in the said defendant. The alternative prayer for a money decree for the value of the shares (as computed by the plaintiff) is unexceptionable. At first sight the interim relief sought seems, in effect, to amount to attachment before judgment. In my view, no grounds have been disclosed for the grant of such interim relief. However, learned counsel for the plaintiff submitted that the relief sought was for an interim mandatory injunction, and that such relief could, and in the facts and circumstances of the case ought to, be granted. Learned counsel relied on certain case law in this regard, which must now be considered.
15. Learned counsel relied on Tahira Sultana and another v. Saleem Rajput and another 2010 YLR 1883 (SHC; SB). The interim mandatory injunction sought was in relation to immoveable property.
As is well settled, the rules apply rather differently in relation to such property as compared with goods, especially shares of a listed company that have a market value. The learned single Judge, while affirming the jurisdiction of the Court, did note that the relief, especially as an ad interim order, "is very rarely issued by the Court and the same is only done when there is imminent great danger to life or property can only for the purpose of restoring or maintaining a status quo"
(pg.1886). The injunction was refused. In my view, this case hardly assists the plaintiff. The next case is Merkura Sucden v. Rice Export Corporation of Pakistan Ltd. And others 1993 CLC 714 (SHC; SB).
Here, the property involved was goods, being rice for export that had been sold by the defendant No.1 to another party (AGA) that had then sold part of it on to the plaintiff. The sale between the defendant No.1 and AGA was on the basis of a "red clause" letter of credit, i.e., a letter of credit where the beneficiary (here the exporter, the defendant No. 1) is entitled to receive payment in advance of shipment. The said defendant had received. US$ 5 million by the time it purported to cancel the contract of sale. It was in such circumstances (and of course attendant additional facts as detailed in the judgment but not referred to specifically here) that the learned single Judge concluded (at pg. 721) that the plaintiff had a strong prima facie case and that the other ingredients for interim relief were also in its favor. The plaintiff prayed for an interim mandatory injunction directing the defendant No. 1 to deliver the rice to the former. However, such an injunction was refused (at pg. 722). It was observed, inter alia, that a "mandatory injunction can only be granted to restore the status quo on the date of the institution of the suit and not so as to bring about a new state of things" (ibid). Therefore, a prohibitory injunction in the normal terms was granted. Again, this case does not advance the plaintiff's cause. It is admittedly the position here that by the time the suit was instituted the shares had been long misappropriated and disposed off.
16. The next case is S.A. Abbasi v. Chairman, District Council Gulshan-e-lqbal Karachi PLD 1985 Kar.
400 (SB). The plaintiff's grievance was that the water supply to his poultry farm had been wrongfully disconnected and he sought a mandatory interim injunction for its restoration. The plaintiff was being supplied water for which he was making regular payments. However, he suddenly received a notice from the defendant Council that he did not have a poultry farm on his property but was using the water supplied for a fruit farm. The plaintiff denied the allegation and asked the Commissioner to intervene in the matter by having the farm inspected. An inspection was carried out and there was further correspondence but then, without any opportunity of hearing being given to the plaintiff, the water supply was disconnected. The learned single Judge observed (at pg. 405) that around 250 to 300 birds were found at the farm at the time of inspection, and that the contract under which water was being supplied did not, in fact, limit its use only for purposes of a poultry farm. The ingredients for interim relief were found to be in the plaintiff's favor. On the submission by counsel for the defendant that as the act complained of (i.e., disconnection of the water) had been completed by the time of the suit was instituted a mandatory injunction could not be granted, the learned Judge held that this objection had no merit "for the defendant has as stated at the bar without any controversion disconnected the supply of water by closing the valve and this action if reversed would not be such that it would require any special efforts or expenses" (pg. 406). A mandatory interim injunction was therefore, granted but subject to the condition that the restored water supply would be used only for the purpose as originally sanctioned, i.e., for a poultry farm. Again, the facts of this case were wholly different from those at hand. The last case cited was Pakistan Paper Corporation Ltd. v. National Trading Company Ltd. 1983 CLC 1695 (LHC; SB). The matter came before the Lahore High Court by way of two revisions, filed by each of the parties, assailing an order of a learned civil court at Lahore. It appears that the petitioner, the Pakistan Paper Corporation Ltd. (PPC) appointed the respondent (NTC) as its distributor (i.e., agent) for the supply of paper at Lahore for a period of three years. For some time the matter proceeded as per the contract but then the petitioner refused to honor further orders for the supply of paper. The contract was terminable on one month's notice by either side, but no such notice was given by the petitioner prior to stopping the supply of paper (i.e., effectively terminating the agreement). There being an arbitration clause in the agreement, the respondent filed an application under section 20 of the Arbitration Act, 1940 in the civil court. Along with this an application under section 41 was also filed for continuation of the supply of paper to the respondent and for restraining the petitioner from supplying paper to any person other than the respondent. The learned civil court granted the first part of the relief but refused the second. The petitioner, being aggrieved by the first part, filed a revision petition and the respondent, being aggrieved by the second part, did likewise. The Lahore High Court dismissed both revision petitions. For present purposes, it is the former that is relevant. The learned Judge observed as follows: "It has however to be seen as to whether with reference to the circumstances of the under consideration case, the injunction has been issued against PPC is in fact a mandatory injunction and was its issuance justified. PPC as per the terms of the distributorship agreement used to supply its products to NTC regularly. Through the impugned order, it has been directed by the learned Court below by way of temporary injunction not to stop supply of its products to NTC.
This means that through the impugned order status quo has been directed to be maintained and it does not amount to mandatory injunction" (pg. 1701). While this conclusion and determination was undoubtedly correct on the facts before the High Court, it does not in my view advance the plaintiff's case. The cited decision had features more akin and closer to S.A. Abbasi v. Chairman, District Council Gulshan e lqbal Karachi (supra). In both cases there was a continuing supply (of water and paper respectively) that was interrupted and the claimant was held entitled to a continuation (by way of recommencement) of the same. In the case from this Court, the rationale was that such recommencement required the merest act, the opening of a valve, and in the other that it was the status quo that was being restored. The situation at hand does not even approximate to such circumstances and the reliance on the cited decision is, with respect, inapt.
17. I would therefore conclude as follows. Prima facie the defendant No.2 appears to be vicariously liable for the wrongful acts of its employee but no such liability arises against the defendant No.1 vis-a-vis the defendant No.2. However, the plaintiff is not entitled to relief even against the defendant No.2 because it would amount to attachment before judgment and no case is made out for such relief. Even when considered from the perspective of relief by way of interim mandatory injunction, no case is made out since in the present case such relief would not restore or maintain the status quo at the time of the institution of the suit but rather establish a state of affairs that admittedly did not then exist, and had not existed for some years. Finally, I must make clear that the observations made in this decision, insofar as they relate directly to the facts and circumstances of the present suit, are tentative and will not affect the outcome at the trial.
18. The present application fails and is hereby dismissed. The interim order made earlier stands recalled and vacated.