Court of Appeal The majority of the
Court of Appeal,
Evans LJ and
Aldous LJ, held that the firm was not vicariously liable for the dishonest acts of Mr Salaam, and so was not entitled to a contribution from Mr Salaam for settling the claim by Dubai Aluminium.
Turner J dissented. Mr Salaam argued that wrongful acts that a partnership was vicariously liable for only extended to common law torts, not equitable wrongs like dishonest participation in a breach of trust.
Jonathan Sumption QC acted for the solicitors.
House of Lords The
House of Lords held that Amhurst's was entitled to a contribution (which amounted to indemnity) from Mr Salaam. The 1890 Act was not restricted to tortious wrongs, and Mr Amhurst's actions were in the ordinary course of the business (
Lister v Hesley Hall Ltd). So the firm was jointly liable for the damage, and
Rix J had been wrong to take account of the firm's innocence when assessing Mr Salaam's contribution for a settlement. Given that Mr Salaam still possessed the proceeds of fraud it was equitable for him to pay the surplus for the firm's $10m liability.
Lord Nicholls gave the first judgment and said the following on vicarious liability:
Lord Millett gave a concurring judgment. In
obiter dicta he said that the claim could be based on dishonesty, like for liability in assisting breach of trust. At the same time it could ‘be based simply on the receipt, treating it as a restitutionary claim independent of any wrongdoing.’
Lord Hobhouse gave a short concurring judgment.
Lord Slynn agreed with Lord Nicholls.
Lord Hutton agreed with Lord Nicholls and Lord Millett. ==See also==