The New South Wales Court of Appeal recently dismissed an appeal by a Plaintiff who suffered injuries to his hand while attempting to untangle the anchor chain of a boat which he had chartered from the Defendants.
The decision provides useful guidance for those involved in providing vessels for charter (and their insurers) regarding the following matters:
- the extent of their obligation to modify equipment in the absence of complaints or recommendations by repairers and taking into account existing precautions;
- the extent of their duty to provide warnings to prospective charterers; and
- the relevance of section 61 (implied guarantee of fitness for purpose) of the Australian Consumer Law (ACL) to injury claims involving chartered vessels.
Facts
The Plaintiff was a guitarist and one of the founding members of INXS. He and his wife arranged to charter the vessel ‘Omega’ to cruise around Pittwater over the 2015 Australia Day long weekend.
The Plaintiff suffered serious injuries to his left hand when it became entangled in the windlass mechanism for raising and lowering the anchor.
Prior to taking out Omega on 23 January 2015, the Plaintiff was given an induction about the vessel by a director of the charter agent, Mr Storaker.
On 24 January 2015 the Plaintiff attempted to anchor at Akuna Bay. He experienced difficulty operating the electric anchor mechanism because of the propensity of the chain to kink or bunch, tripping the electric motor’s circuit breakers and disconnecting the power source.
The Plaintiff contacted Mr Storaker and was told how to reset the circuit breaker and the Plaintiff did so.
The Plaintiff decided to raise the anchor and activated the power by stepping on the ‘up’ switch but continued to experience difficulties raising the anchor. While attempting to unkink the chain he placed his left hand on the chain and the power unexpectedly activated, causing his hand to be drawn into the cog or ‘gypsy’ which raised or lowered the anchor chain.
The Plaintiff commenced proceedings against Omega’s owners and the charter agent, alleging that:
- they had negligently failed to take precautions to prevent the anchor chain from kinking;
- they had negligently failed to warn him of the anchor chain’s propensity to kink; and
- there had been a breach of the guarantee of fitness for purpose implied by section 61 of the ACL.
The primary decision
The Plaintiff was unsuccessful at first instance in the Supreme Court and appealed to the Court of Appeal. The trial judge found that that motor had activated when the Plaintiff accidentally trod on the deck-mounted ‘up’ switch.
The appeal
With regard to the alleged failure to take reasonable precautions, the Court of Appeal found that:
- the installation of a chain stripper and extension of the spurling pipe would have been relatively inexpensive;
- Omega (and the anchor mechanism) had been routinely surveyed since 1992 and the winch had undergone a major overhaul in 2013. An insurance evaluation noted that the anchors were in good condition. The Defendants were entitled to rely upon the absence of any recommendation for modification from these persons;
- There was an express warning in Omega’s safety manual to keep clear of the windlass when releasing or retrieving the anchor chain;
- Although the propensity of the chain to kink created a risk that a charter might suffer injury while attempting to free the chain, provided the power was off, the risk was low, to the point of being insignificant;
- The Defendants had taken appropriate precautions by issuing a warning to hirers to keep hands clear of the windlass when it was in operation and safety covers on the deck switches for the motor; and
- Accordingly, the Court of Appeal upheld the trial judge’s findings with regard to the alleged failure to take reasonable precautions.
In relation to the alleged failure to warn the Plaintiff, the Court of Appeal held that it was not apparent that, even if warned of the propensity of the anchor chain to kink, the Plaintiff would not have proceeded with the charter.
In reaching this finding the Court noted that, in the charter contract the Plaintiff had described his experience in boats as “extensive” and that he had owned “many boats”. Accordingly, it was unlikely that such a person would have refused to accept the boat due to minor problems with the anchor system which could be resolved with care and minimal effort.
Although the Plaintiff had abandoned the allegation of a breach of the guarantee of fitness for purpose at trial, the Court of Appeal noted that even if it revisited the allegation, it would fail. The Court found that in over 20 years of chartering, there had been no complaints regarding the anchor and charterers were advised to use moorings wherever possible. Accordingly, any intermittent kinking of the anchor chain would not have prevented Omega being fit for the purpose of a leisure cruise.
Accordingly, the Plaintiff’s appeal was dismissed.
Commentary
The decision is relevant for all persons and entities involved in providing vessels for charter (and their insurers) as it highlights that:
- when surveyors or maintenance providers do not recommend modifications to address minor defects, reasonable reliance upon such advice can provide vessel owners and managers with a defence to liability claims;
- the presence of a minor defect is not fatal to the defence of a liability claim, especially if the risk arising from the defect is low and warnings are provided, and safety measures are in place;
- even if there is a failure to warn, a Plaintiff must demonstrate that had such a warning been given, they would not have proceeded with the charter. The Plaintiff’s level of experience (and what they represented to the owners) will be relevant to this issue; and
- a minor defect in a vessel (especially where there is a demonstrated history of the vessel being chartered without incident or complaint) will not automatically give rise to a finding that there has been a breach of the ACL’s implied guarantee of fitness for purpose.
This article was written by Anthony Highfield, Partner and James McIntyre, Special Counsel.
