Farriss v Axford (No 3)

1. [1]

   The first plaintiff, Timothy William Farriss, alleges that he sustained injuries to the fingers of his left hand in an accident on a boat on 24 January 2015. He says that the accident was caused by the negligence or failure to comply with guarantees under the Australian Consumer Law by the defendants.

2. [2]

   The first plaintiff and his wife, Mrs Bethany Farriss, are the directors of the second plaintiff, Montana Productions Pty Ltd (“Montana”), a company which receives income through the plaintiff’s creative endeavours.

3. [3]

   The first plaintiff is one of the founding members and lead guitarist in the band known as INXS. I will refer to the first plaintiff as the plaintiff for the purposes of this judgment.

4. [4]

   The first and second defendants were the owners of the boat, a Clipper 34 motor cruiser, which was known as Omega (“the boat”). The third defendant acted as the agent of the first and second defendants in hiring out the boat to persons such as the plaintiff.

5. [5]

   The proceedings were heard over 6 days during the period 30 August to 6 September 2021. Adrian Williams appeared with Samuel Blackman on behalf of the plaintiff. John Turnbull SC appeared with James Sleight on behalf of the defendants. The defendants were jointly represented and the issues were fought on their behalf jointly, albeit, if they are found liable, they might be found liable on different bases.

6. [6]

   There is no dispute that:

   1. (1)

      the plaintiff sustained an injury to his left hand as a result of an accident on the boat. He underwent surgery at Royal North Shore Hospital on 24 January 2015;

   2. (2)

      the plaintiff sustained injury when the fingers of his left hand became caught or jammed between the anchor chain and the gypsy of the boat; and

   3. (3)

      the disability from which the plaintiff suffers in his left hand is such that he could not perform in a band again and, in particular, not perform as part of INXS again.

7. [7]

   Other than that, most matters are in dispute.

8. [8]

   There is a significant dispute as to the circumstances of the accident and whether, irrespective of precisely how the accident occurred, there was any failure to take care on the part of the defendants.

9. [9]

   The matters for determination may be divided into the following issues:

   1. (1)

      how did the accident occur?

   2. (2)

      were the injuries sustained by the plaintiff caused by any failure to take care on the part of the defendants?

   3. (3)

      was the plaintiff guilty of contributory negligence?

   4. (4)

      does s 64 of the Competition and Consumer Act 2010 (Cth); Schedule 2 – Australian Consumer Law (“ACL”) apply?

   5. (5)

      what amount is the plaintiff entitled to for pain and suffering?

   6. (6)

      what amount is the plaintiff entitled to for economic loss?

Background

1. [10]

   The first defendant had owned the boat since purchasing it in April 1992. It operates under power rather than by sail. I include a photo of the boat:

2. [11]

   He made it available for charter through the third defendant, who acted as his agent in organising such charters. It was advertised on a website as being available for charter. There is no evidence of any earlier accidents or safety issues involving the boat, although the plaintiff maintains that the sort of problems that he experienced could not have been unique to him.

3. [12]

   On 23 January 2015, the plaintiff hired the boat through the third defendant for the purposes of cruising around Pittwater during the Australia Day long weekend. The only persons who would be on the boat were the plaintiff and Mrs Farriss.

4. [13]

   There is an issue as to the plaintiff’s experience. Having regard to the content of his evidentiary statements, he presented as a person with little experience in boats.

5. [14]

   The defendants put to the plaintiff that he had more experience than referred to in his evidentiary statement. Indeed, it turned out that he had owned a cruiser for a brief period. Further, he had hired boats previously.

6. [15]

   He liked fishing. He purchased his cruiser back in 1989 but he said that he used to have a skipper operate the boat for him. It may be no coincidence that the purchase of the boat and the use of a skipper was in the “heyday” of INXS.

7. [16]

   The fact that he may have hired a boat in the past from time-to-time and even owned a boat in the circumstances to which I have referred does not necessarily mean that he had extensive experience in operating a boat. Ownership of a boat for a period does not necessarily equate with expertise and familiarity with all aspects of its operation.

8. [17]

   I accept the plaintiff’s description of his experience level.

9. [18]

   Having said that, it does not seem to me that his level of experience is particularly critical to the outcome of this matter as, for the purposes of hiring the boat, it was not necessary that a person such as the plaintiff pass some test or demonstrate a certain level of experience.

10. [19]

    In any event, the plaintiff plainly felt experienced enough to operate the boat.

11. [20]

    During the short period prior to the plaintiff sustaining injury, he was attempting to drop the anchor and secure the boat in Akuna Bay.

12. [21]

    I include a photo of the anchor system, including the gypsy:

13. [22]

    During the process of “playing with” the anchor to ensure that it was correctly set, he observed that the chain was rusty and prone to kinking, possibly both as it came over the roller on the bowsprit and when the chain fed into the stowage bulkhead.

14. [23]

    At least on one occasion, the winch motor stopped even though he had his foot on the up button on the deck. He took his foot off the up button and pulled the chain up and over the gypsy with his left hand to unkink the chain. When he put his foot back on the button, there was no response. After trying to get the system to work without success, he contacted the third defendant and was told about the circuit breaker.

15. [24]

    Having reset the circuit breaker, he decided to raise the anchor and move the boat closer to the marina at Akuna Bay. He went to the area near the gypsy and placed his foot on the up button. The anchor winch worked and the chain started to come in. However, it kept kinking. He stopped the winch by taking his foot off the up button and manipulated the chain with his left hand forward to the gypsy so as to straighten it. Again, he placed his foot on the button and the motor again worked causing the chain to again be pulled forward over the gypsy.

16. [25]

    He may have done this a number of times, that is, he would take his foot off the up button and manually adjust the chain so that it would flow smoothly over the bowsprit, through the gypsy and down into the spurling pipe and the stowage area below.

17. [26]

    It is not in dispute that the plaintiff sustained injury to the fingers of his left hand when his hand was jammed between the anchor chain and the gypsy.

18. [27]

    The windlass raises and lowers the anchor chain. The gypsy is attached to the right side of the windlass. It grips the chain when being lowered and raised. The anchor chain rotates around the gypsy. The windlass and the gypsy are attached to a shaft which operates under power. The gypsy can be operated manually.

19. [28]

    The dispute between the parties is not whether the plaintiff sustained injury to his fingers as a result of his fingers being jammed in the gypsy but how that might have occurred.

20. [29]

    On the plaintiff’s case, as set out in the plaintiff’s opening submissions, his hand was pulled into the gypsy because the chain started moving unexpectedly without him pressing the foot button on the deck. In his opening submissions his Counsel explained that this occurred because whilst he was attempting to free some chain that had bunched between the deck and the anchor winch with his left hand, the chain spun or freewheeled out pulling the plaintiff’s left hand up into the gypsy.

21. [30]

    The plaintiff relied on an expert opinion from a Professor David Lyons, suggesting that this (that is the chain and hand being pulled up into the gypsy) was caused by the clutch disengaging and the gypsy freewheeling out. The plaintiff says that he did not disengage the clutch but his expert Professor Lyons says that the clutch disengaged due to wear from the continuous load placed on it due to the absence of an allegedly required chain stripper (which would have decreased the load on the gypsy). The plaintiff maintains that he did nothing which might have caused the chain to move unexpectedly. He says that the anchor system was not working properly; it was unsafe and defective; and could and should have been fixed or improved to guard against the risk of injury which eventuated. He should have been given proper instructions about the use and problems with the anchor chain.

22. [31]

    The defendants maintain that the system was working as it was intended and that the chain moved because the plaintiff must have trod on the up button on the deck. There was no danger to anyone trying to unkink the chain provided that no one pushed one of the switches whilst the person had a hold of the chain.

23. [32]

    There are only two switches which could be used to deliberately cause the chain to move backwards and through the gypsy, being the foot switch on the deck on the right-hand side of the gypsy and another switch at the helm. There is no suggestion that the switch at the helm was operated by anyone at the time.

How did the accident happen?

1. [33]

   The plaintiff’s version of events is set out in the Amended Statement of Claim filed on 28 August 2019. He then filed an evidentiary statement and later an affidavit which he expressly identified as being a clarification of his earlier statement. That affidavit was prompted by the service of a Notice to Admit Facts and ambulance records by the defendants the effect of which was to suggest that the plaintiff was the author of his own misfortune because he trod on the deck button/switch which caused the anchor chain to move.

2. [34]

   He gave oral evidence.

3. [35]

   In his first statement he described the event which led to his injury as follows (after describing the issues he was having with kinking and the circuit tripping):

4. [36]

   In his later affidavit he described the event as follows:

5. [37]

   There are some significant differences between his statement and his later affidavit. These were highlighted during cross-examination.

6. [38]

   The first difference relates to where the kinking occurred. In his statement he suggests that the kinking of the chain happened as it came over the bowsprit (being at the very front of the boat) whereas in his affidavit, he states that the kinking occurred as the chain was going into the deck, being after it had passed through the gypsy.

7. [39]

   During cross-examination he settled on the latter version, although he suggested that it was hard for him to remember, it being such a traumatic event and that it may be that it could have kinked anywhere.

8. [40]

   The second difference is where he was standing when his fingers were caught.

9. [41]

   There is nothing in his statement which might have revealed that at some point in the sequence of events he moved from where he was standing, adjusting the chain on the right side of the gypsy (looking forward) to the left side of the winch. Yet in his affidavit, he states that, after attempting to reactivate the up button (that is, it would not work) he moved to the left side and continued adjusting the chain from that side, specifically to avoid standing on the deck buttons which were positioned on the right side of the gypsy.

10. [42]

    At least according to his affidavit, he had been working on the chain and operating the deck buttons from the right side but at some point in the immediate period before the accident, he decided quite deliberately to move to the left side to avoid standing on either deck button.

11. [43]

    Of course, this is what the defendants say occurred, that is, he stood on the deck button. This was put directly to him in cross-examination. The plaintiff was adamant that this did not occur.

12. [44]

    Yet when asked why he had not simply closed the caps on the deck buttons if he was concerned about inadvertently standing on them he gave the following evidence:

13. [45]

    It is difficult to accept his explanation that closing the caps (which would have taken a second or two) was something that would have distracted him from his focus or concentration as he suggests.

14. [46]

    The third difference relates to the positioning of his hands. Again, he seemed uncertain and gave inconsistent evidence about his hands including whether his left hand was between the bow and the gypsy and was pulled into the gypsy or whether his hand was between the gypsy and the deck such that his hand was pulled upwards into the gypsy. His Counsel opened the case on the basis that this hand had been pulled into the gypsy from behind the gypsy, explaining that this must have happened because the gypsy freewheeled out. His expert based his opinion on that sequence of events.

15. [47]

    Indeed, in the plaintiff’s closing submissions he accepted that his evidence was confused on this issue. In his statement he said that his hand was pulled into the gypsy by the anchor chain moving inwards. In his affidavit he said that his hand was between the deck and the gypsy and pulled upwards (meaning the chain would be going out) and into the gypsy.

16. [48]

    In cross-examination he settled on the former version, although he ended up saying:

17. [49]

    He was cross-examined as follows, in particular, in reference to para [9] of his affidavit:

18. [50]

    He was also cross-examined on whether or not the motor was working at the time when the chain moved as follows:

19. [51]

    Again his acceptance of the proposition that the anchor must have been working was contrary to the case outlined on his behalf and the explanation given by Professor Lyons.

20. [52]

    Further, he seemed uncertain as to what problems he had actually been having. There appears to be no dispute that the circuit had tripped, perhaps on more than one occasion. It may be likely that this was caused by some kinking in the chain but it was put to him that he had really only identified one problem in the following exchange:

21. [53]

    It is understandable that the plaintiff expressed some uncertainty as to where it was kinking and might be vague about how many times the problem had arisen. It does not seem to me that any vagueness about the kinking and any earlier problems reflects adversely on his evidence.

22. [54]

    However, the differences between his written and oral evidence as to where he was standing and precisely what he was doing are more difficult to understand.

23. [55]

    The problem is that other than being adamant that he was standing on the left-hand side and away from the buttons, he accepted in cross-examination that aspects of what he said in his affidavit were incorrect.

24. [56]

    For example, the following exchange occurred as to where he placed his left hand:

25. [57]

    He was asked how the chain had grabbed his hand. He explained:

26. [58]

    He was then cross-examined about his positioning, that is, either on the left or right side of the gypsy. He disagreed that the closest side to reach the chain would have been from the right side. It was put to him that he stood on the left side where he would have to lean over the white box to access the chain. He said:

27. [59]

    Following further cross-examination as to the positioning of his hands and the chain, the following exchange occurred:

28. [60]

    The cross-examination of the plaintiff on the circumstances of the accident was extensive. I have provided a snapshot. Having said that, it is clear from the whole of the cross-examination that:

    1. (1)

       the plaintiff is adamant that he was standing on the left side of the windlass when the chain started to move unexpectedly;

    2. (2)

       the chain started to move inwards, that is, pulling the anchor up (contrary to what the plaintiff said in his affidavit and the plaintiff’s opening outline);

    3. (3)

       he had his left hand between the bowsprit and the gypsy and his hand was dragged into the gypsy from that position (also contrary to his affidavit and outline);

    4. (4)

       he did not do anything to cause the motor to suddenly start to operate and the chain to move;

    5. (5)

       there were errors or inaccuracies in his initial statement which must be taken to include the direction in which the chain moved and where his hands were and where the kinking was; and

    6. (6)

       he did not stand on either of the switches on the deck. He did not tell the ambulance officers that he did so.

29. [61]

    It is most difficult to understand why there were these errors or differences in his statement and affidavit. He put it down to the trauma of remembering the event and the length of time since the event. However, he also said that his memory deteriorated between the time of the affidavit (December 2020) and giving evidence in August 2021. It is difficult to accept that suggestion (that is, memory deterioration over 9 months) as a reason for the inconsistencies in his evidentiary statements.

Other evidence

1. [62]

   In support of his version of events, the plaintiff adduced evidence from Mrs Farriss, as well as from two other witnesses being John Thorogood and Daniel Littlepage.

2. [63]

   Both the first defendant, Mr Axford, and a director of the third defendant, Mr Niels Storaker, also gave evidence and their evidence is, at least to a certain extent, relevant in forming a view as to how the accident occurred.

3. [64]

   Mrs Farriss recalled the plaintiff going back and forward into the cabin complaining that the chain kept stopping or something wasn’t working. She recalled that he had to try and fix things a few times.

4. [65]

   She said that, at one point, he asked her to go upstairs and push the lever forward just to move the boat forward a little bit when he said to do so. However, the plaintiff was quite adamant that he did not ask her to do this.

5. [66]

   She could see the plaintiff going back and forward between the cabin and the anchor as she was on the flybridge. She remembers him being on the left side of the boat leaning forward with his right hand stretching towards the water with his hands on the chain trying to untwist the chain. His left hand was obscured by his back and his head.

6. [67]

   Suddenly, there was a sound and she heard him turn and say “It’s taken my finger”. She remembered seeing his body and feet on the left side of the winch when this happened. She said there was no way he could have had his feet in the area where the buttons were.

7. [68]

   In cross-examination, it was put to her that there might have been things that the plaintiff had told her since the accident that she remembered, rather than her having an independent recollection. She said “the memories of mine are burnt into my retina, basically, the – just the specific moments.”

8. [69]

   Ultimately, it was put to her that her recollection of the precise events all these years later might be mistaken but she disagreed saying:

9. [70]

   According to Mrs Farriss, she had not seen the plaintiff on the right side of the post and winch at any time while she was on the flybridge waiting for instructions from him to operate the lever to move the boat. Her recollection as to precisely where the plaintiff was standing and what he was doing in the seconds before his accident is consistent with the version the plaintiff proffers for the purposes of these proceedings except that:

   1. (1)

      her suggestion that she had not seen the plaintiff on the right side of the post and winch at all would be inconsistent with the plaintiff’s version; and

   2. (2)

      her statement that the plaintiff had asked her to go to the controls to move the boat forward is contrary to the evidence of the plaintiff who denied that he sent her up there in order for her to operate the boat. He specifically stated that he did not send her up to operate any controls and he was not relying on her to put the motor into gear and move forward if the boat started drifting. Mrs Farriss says she was up on the flybridge for that very reason hence providing an explanation as to why she happened to be up on the flybridge looking down at the plaintiff at the time. The plaintiff says that this is not so, albeit she may have been on the flybridge. It is impossible to reconcile this evidence.

The evidence of John Thorogood

1. [71]

   The plaintiff adduced evidence from John Thorogood, a boat owner who was also anchored in Akuna Bay at the time of the plaintiff’s accident.

2. [72]

   Mrs Farriss called out to him after the accident. He swam across to the Omega and climbed on board. He saw blood covering the gunnel (side of the boat). At the time, Mrs Farriss was on her mobile phone to emergency services. He understood that she had already tried to start the engine without success. He saw that Omega was moving a lot and swinging close to his boat.

3. [73]

   His partner, Ben, came across. He told Ben to drive the boat while he lifted the anchor. He says that he tried using the electric winch but he could not get it to engage. He could hear the winch motor turning but it wouldn’t engage with the gypsy to bring in the anchor chain.

4. [74]

   He called out to his partner who came down to help. They both tried to engage the winch’s clutch without success. They then started lifting the anchor manually. However, they were only able to lift it about three kinks. They took it in turns to manually operate the winch and drive the boat forward to remove the load on the chain. After about three turns each, he tried to engage the electric winch by tightening the clutch with the handle. Having done that, the electric winch engaged and lifted the anchor.

5. [75]

   Mr Thorogood was cross-examined. He agreed that what he meant when he said that the electric winch wouldn’t engage was that although he was pressing on the deck buttons and could hear the motor, the gypsy wasn’t going around. That is, the clutch was not engaging.

6. [76]

   He then used the handle as a lever to tighten the clutch. He said:

7. [77]

   The defendants suggest and the experts tended to agree that this means that once the gypsy was tightened, the clutch engaged and the system worked, raising an issue as to why it needed to be tightened at the time. It was put to the plaintiff that he must have disengaged the clutch at some time before the accident.

Daniel Littlepage

1. [78]

   The plaintiff also relied on a statement from Daniel Littlepage filed on 10 October 2018. Although he was required for cross-examination, he apparently did not or would not attend. After some further discussion and some objections Mr Turnbull withdrew the request for cross-examination. His evidence adds little to the evidence of Mr Thorogood.

Video of the inspection of the boat on 12 March 2015

1. [79]

   The solicitor for the plaintiff attended an inspection of the boat on 12 March 2015 in company with Mr Geoff Grosskretuz and Mr Mike Bird, a marine captain and marine surveyor. He took photos and videos during the inspection. Mr Axford was on the boat at the time. He demonstrated the way in which the anchor could be released and pulled up. During an attempt to pull up the anchor, the anchor chain kinked. Mr Axford is heard to be explaining that the chain was rusty because the boat had not been used since the accident, as if to explain why the kinking was taking place. This does seem to be somewhat of a coincidence.

The evidence of Mr Axford

1. [80]

   The defendants relied on a statement of John Axford dated 11 December 2019. Mr Axford provided background material and details of the service and maintenance of the boat as well as the operation of the anchor winch. He provided details of the circumstances surrounding the hire.

2. [81]

   He attended the boat on being informed of the accident. His evidence bears on the circumstances of the accident only in two respects being:

   1. (1)

      as far as he was concerned the anchor winch and electrical circuitry was working as it should have been prior to the hire; and

   2. (2)

      when he attended after the accident he looked at the winch and saw that the manual winch mechanism was jammed solely in the forward position and the anchor chain could not be moved. There was enormous tension in the system that had jammed the ratchet which made it very difficult to release the clutch. He managed to release the pressure but found there was no power to the winch. He checked the circuit breaker and found that it had tripped. He says that he reset the circuit breaker and the winch operated as normal.

3. [82]

   Mr Axford was cross-examined extensively on matters relating to negligence and the contract which I will come to later in this judgment. The video of him demonstrating the accident and observing that it had bunched or kinked was also played to him. It was put to him that he had used his fingers to reposition the chain whilst standing over the controls. He agreed but said his feet were well clear of the controls. Someone had said “Watch your fingers”. He was taken to his explanation as to why it was bunching being that it had not been out for a while and was a bit rusty. He agreed that it was obvious that it was bunching up. It was put to him that he had experienced that before the accident. He disagreed.

The evidence of Mr Storaker

1. [83]

   Mr Storaker’s evidence related mainly to the instructions he provided at the time of hire. He also confirmed the text messages relating to the circuit breaker tripping and providing instructions to the plaintiff as to how to reset it. He says that apart from the incident involving the plaintiff there have been no problems by hirers experiencing anchor winch difficulties on the boat.

2. [84]

   He says that the boat was hired out again on 2 February 2015 and there were no problems reported by the hirer at that time. He also says that there had been no difficulties or defects of any part of the anchor winch and any hirers since. He says the boat has been chartered about 200 times since the date of the accident.

The expert evidence

1. [85]

   Both parties relied on expert evidence. The plaintiff relied on reports of Professor David Lyons, a naval architect, dated 13 and 15 November 2018 and 16 December 2020. The defendants relied on an expert report from Dr Robert Casey, a mechanical engineer, dated 8 April 2019.

2. [86]

   The experts met and prepared a joint expert report dated 2 July 2021. The experts gave concurrent evidence and were questioned on behalf of the parties.

3. [87]

   The expert evidence was particularly relevant to two issues being:

   1. (1)

      understanding how the accident might have occurred; and

   2. (2)

      whether there were measures, that is modifications to the boat, which might have prevented the accident.

4. [88]

   Both experts provided helpful explanations as to the componentry and circuitry on the boat, particularly relating to the operation of the winch.

5. [89]

   I extract from the joint report dated 2 July 2021 a diagram showing the electrical circuitry:

6. [90]

   There was a difference of opinion between the experts on the slipping of the clutch and the operation of the circuit breaker. Dr Casey explained that the only way to trip the circuit breaker is if the current becomes excessive. The thing that trips the circuit breaker is the gypsy being prevented from rotating.

7. [91]

   However, in the end, both experts agreed that if the chain kinks and jams and prevents the gypsy from rotating, this will be accompanied by the tripping of the circuit breaker. It seems apparent that this must be what occurred when the circuit breaker tripped at some point before the accident.

8. [92]

   Thus, one explanation for the problems which the plaintiff was experiencing and his call to Mr Storaker was that the chain was kinking and not flowing smoothly into the deck below. This resulted in the gypsy not rotating properly, the current increasing and the circuit breaker tripping.

9. [93]

   As the experts explained, one way of stopping the kinking between the gypsy and the spurling pipe leading into the deck would have been to install a chain stripper. This is a tube that extends up between the spurling pipe towards the gypsy. It reduces the amount of free space between the gypsy and the point at which the gypsy shreds the chain down through the chain stripper. Professor Lyons explained that it assists in ensuring the clean passage of the chain from the point it departs the gypsy and travels downwards through the first of the two spurling pipes.

10. [94]

    As identified by Dr Casey, the next problem that can arise when drawing up the anchor is that the chain can fall off the gypsy altogether. As he explained, when the anchor is drawn up and over the bow roller at the front of the boat, there can be an issue with the shank. As the anchor has been pulled up, the shank sticks up in the air and it can lean to one side or another. If it leans to one side, it can flip the chain off the gypsy altogether. Dr Casey says that this can occur on all boats. It can also occur when chains are being let out as chains will often sway from side to side.

11. [95]

    The longer the distance between the shank of the anchor to the gypsy can increase the sway and the risk of the chain falling off the gypsy.

12. [96]

    As both experts explained, there are two switches that can be operated to bring the anchor up or allow it to go down. There is a switch at the helm which gives the operator at the helm the ability to interrupt anchor raising and lowering. There are then the deck switches which are buttons next to or to the right of the winch.

13. [97]

    As set out in the electrical circuitry plan above, there are two wires which go from the helm switch and the winch motor. There is a third wire travelling from the deck switch which switches back to the battery.

14. [98]

    In order for the winch motor to operate, that is, to cause the anchor chain to be pulled up, there needs to be electricity coming from the battery. Each of the start relay, the circuit breaker and the helm switch must be closed. Further, one of the black buttons on the deck must be closed. Those buttons are spring operated. A person needs to press down on the button to keep the connection closed. Once the pressure is taken off the button it will spring back and open up thereby preventing the current from flowing.

15. [99]

    Put simply, the winch motor does not operate unless someone is applying pressure to one of the two switches on the deck (assuming the switch at the helm remains closed).

16. [100]

    Further, the deck buttons work in a simple on/off way. Pressing the button slightly does not control the speed at which the chain might be pulled up and through the gypsy.

17. [101]

    There is no suggestion that anyone had touched the helm switch. Thus, according to the experts, if the circuity and motor is operating properly, the current could not flow and the winch motor would not operate such that there could be no power to enable the anchor to be pulled up unless a deck button was activated.

18. [102]

    That really leaves only two alternatives being either that there was some form of defect or malfunction in the componentry and the circuit or someone depressed the foot switch on the deck causing the circuit to close.

19. [103]

    Both Professor Lyons and Dr Casey carried out an inspection of the electrical circuitry and found no evidence of any electrical malfunction. Further, Dr Casey carried out an inspection of the clutch and found no evidence of damage to the clutch. As Dr Casey said, if the clutch was not operating properly, the gypsy would not rotate. Further, if the clutch is disengaged and the anchor is pushed over the front of the boat, then the anchor would just run out, there being nothing to prevent its flow. This is what Professor Lyons said happened having regard to his instructions that the accident happened when the plaintiff was letting the anchor out.

20. [104]

    In the end, the effect of the oral evidence from both Professor Lyons and Dr Casey was that because of the electrical circuitry the winch motor could only have commenced to operate and cause the anchor chain to be pulled through the gypsy if the deck switch was in the closed position. It could only be closed through someone depressing the button on the deck.

21. [105]

    During the joint evidence I asked Professor Lyons and Dr Casey to provide an explanation for what caused the chain to move, having regard to what I understood to be the plaintiff’s version of events in his oral evidence (that is, that he was on the left side of the gypsy and did not depress the deck button and his hand was pulled into the gypsy from in front of it rather than pulled into it from below it). They gave the following answers:

Conclusion as to circumstances of the accident

1. [106]

   The plaintiff’s attempt at “clarification” of his statement was in direct response to the suggestion that he had trod on the deck button immediately before the chain moved. His clarification must have been intended to make three things clear being:

   1. (1)

      immediately before his left hand was pulled into the gypsy he was holding onto the chain with his left hand at a point after the chain had gone over the gypsy, that is, between the point where it goes below the deck and the gypsy;

   2. (2)

      he was standing on the left side of the gypsy and thus there was no possibility that he could have activated the winch by standing on either the up or down buttons; and

   3. (3)

      as his left hand was between the deck and the winch, it must have been pulled into the winch by reason of the chain mechanism operating to lower the anchor.

2. [107]

   Whilst the plaintiff describes his affidavit as a clarification, at least in respect of the position of his left hand and the movement of the chain, it seems to me that it was rather more of a change than a clarification.

3. [108]

   True it is that the plaintiff did not identify precisely where he was standing immediately before his hand was caught in the winch in his first evidentiary statement but nor did he state that he had moved from the right side to the left side immediately before the accident.

4. [109]

   He specifically identifies in his affidavit why he felt it necessary to clarify his first statement. In para [34] he refers to a Notice to Admit Facts which had been served upon him by the defendants. The defendants asked the plaintiff to admit that the chain on the anchor winch commenced operating because the plaintiff pressed or stepped on one of the two foot switch pedals. In para [35] the plaintiff denies that allegation, maintaining that he was on the left side of the boat at the time.

5. [110]

   Further, in para [38], he refers to being shown documents produced under subpoena by the New South Wales Ambulance which had been served by the defendants. He refers to the case description in the ambulance notes as follows:

6. [111]

   In para [40] he denies that he was operating the winch at the time and says that it is not true that his foot accidentally touched the switch which operated the winch.

7. [112]

   It seems obvious that if he had been standing on the left side of the winch immediately prior to his accident then he could not have trod on either of the switches on the deck which are on the right side of the winch. He says he moved to the left side quite consciously to avoid the deck buttons.

8. [113]

   Perhaps as already highlighted there are a number of problems with the plaintiff’s evidence as to what he was doing in the moments before the accident. They include:

   1. (1)

      he has provided differing versions;

   2. (2)

      his attempt at clarification caused more problems than it solved as he admitted in oral evidence that aspects of the affidavit were simply wrong;

   3. (3)

      his suggestions of memory changes explaining the inconsistencies in his evidence is difficult to accept;

   4. (4)

      despite his denials it must have been easier to reach the chain from the right side of the winch. In a sense this was proved by the fact that even on his version he had been unkinking the chain from the right side up to the time immediately before the accident that he says he moved to the left; and

   5. (5)

      if, as he states, his concern was to avoid activating the deck buttons whilst he handled the chain, he could have closed the caps on the buttons. This would have been the obvious thing to do rather than move to a position which necessarily made it more difficult to adjust the chain manually. Even if he stood on a button with the cap on, it would not activate. His response to this suggestion was vague and difficult to accept.

9. [114]

   It may be that the assertion from the defendants (by way of service of their evidence and the Notice to Admit Facts) came as a surprise to him. He may have firmly believed that he was not standing on the right side and could not have therefore trod on the deck buttons.

10. [115]

    Yet it must also be said that his evidence goes one step further than merely saying that he did not believe that he was standing on the right side. On his evidence he made a decision to move to the left and reach over from the left side to avoid standing on the deck button. Again, it may be puzzling why he decided to do that at some stage, having seemingly been standing on the right side in the vicinity of the deck button and operating the deck button prior thereto.

11. [116]

    Having said that, he certainly received support from Mrs Farriss in terms of where he was standing at the time. She said that his positioning was burned into her brain, although she seemingly had no clear recollection of other parts in the sequence of events that led to the accident. Further, on her version, she was up on the flybridge waiting for instructions from the plaintiff to move the boat. The plaintiff specifically denied he ever would or did ask her to do that, which creates a doubt as to what she was doing on the flybridge.

12. [117]

    I am thus left with a version of events presented by the plaintiff and his wife which contains inconsistencies and changes. I would not necessarily give the account recorded in the ambulance notes much weight as neither ambulance officer was called and the plaintiff specifically denied that he told the ambulance officers that which is recorded. However, the notes are in evidence.

13. [118]

    Further, and most significantly, neither expert was able to offer an explanation as to how the power could have operated to cause the chain to move in the moments before the accident having regard to the plaintiff’s version of events, that is, if he did not tread on the up button. Professor Lyons had based his written opinion on the assumption that the chain was going out at the time of the accident. The plaintiff expressly disavowed this in cross-examination.

14. [119]

    There has been a thorough investigation and examination of all the possibilities by both experts. No-one suggested that there could be some explanation that both experts had not considered.

15. [120]

    For all these reasons, I consider that, at the very least, the plaintiff must be mistaken. The obvious explanation is that he trod on the up button and that caused the chain to move inwards, just as he had a hold of the chain with his left hand in front of the gypsy. His left hand must have been pulled into the gypsy with his fingers being jammed, so as to cause severe lacerations to his fingers. This happened because he trod on the up button rather than any defect in the electrical circuitry.

Was the accident caused by a failure of the defendants to take reasonable care?

1. [121]

   The plaintiff pursues causes of action both in negligence and pursuant to the ACL. The parties agree that, subject to my consideration of s 64 of the ACL, it is not necessary to consider the claims under the ACL.

2. [122]

   The defendants accept that they owed a duty of care to the plaintiff. All duties of care, no matter what their scope or origin, may be discharged by the exercise of reasonable care. [1] The first and second defendants were the owners of the boat. The third defendant hired the boat to the plaintiff on their behalf. The scope of the duties of care owed by the defendants may be different but it is not necessary to say anything further about this at this point.

3. [123]

   The question is whether they were in breach of any duty of care. The particulars of negligence (as set out in para [9] of the Amended Statement of Claim) are many and varied and are essentially identical against the first, second and third defendants, albeit that the scope of the third defendant’s duty of care could not be the same as the first and second defendants as owners of the boat.

4. [124]

   It is not necessary that I set out each of the many particulars of negligence contained in the Amended Statement of Claim but they may be summarised as follows:

   1. (1)

      a failure to instruct the plaintiff in the proper operation of the anchor system and the boat;

   2. (2)

      a failure to warn the plaintiff of the anchor’s propensity to fail and problems and defects with the anchor system;

   3. (3)

      failing to maintain a working anchor chain and gypsy;

   4. (4)

      failing to repair and replace defective parts such as the corroded anchor chain;

   5. (5)

      failing to redesign the anchor windlass system to use hand controls instead of foot controls;

   6. (6)

      failing to redesign and install components of the system including installing a chain stripper before and after the gypsy, said to be in accordance with the manufacturer’s guidelines, and installing a spurling pipe in compliance with manufacturer’s guidelines;

   7. (7)

      failing to place a guard over the windlass so that the fingers could not become trapped;

   8. (8)

      failing to provide proper signage;

   9. (9)

      failing to ensure that the vessel met survey and was seaworthy;

   10. (10)

       failing to ensure that the operator of the vessel had a proper and sufficient knowledge and understanding of the operation of the boat; and

   11. (11)

       failing to attend upon the vessel in person, so as to provide assistance to the operator, i.e. the plaintiff, before the accident.

5. [125]

   In his closing submissions the plaintiff emphasised that on his case, the windlass was not installed correctly and was idiosyncratic. There was misalignment coupled with a rusted chain. This rendered the chain more likely to jam and kink behind the gypsy. As it turned out the experts did not agree that any rust on the chain would have made any real difference to the propensity to kink or jam.

6. [126]

   The plaintiff says that one of the precautions which would have prevented the plaintiff’s accident was taken in August 2015. The plaintiff emphasises that having regard to the evidence of the first defendant, little experience was needed to hire the boat and particularly in those circumstances, the risk of an accident occurring involving the anchor chain was foreseeable and not insignificant.

7. [127]

   The plaintiff submits that the first defendant ought to have known of the problem with the anchor winch (being a propensity to jam) and taken steps to prevent a jam occurring. The plaintiff submits that the installation of a modified spurling pipe and chain stripper would have prevented the accident occurring.

8. [128]

   Other than that, the first defendant should have ensured that the third defendant was aware of the problem and instructed a hirer such as the plaintiff by way of appropriate induction and warning. It was up to the third defendant to understand the hidden dangers and idiosyncrasies of the boat and inform a hirer such as the plaintiff of these hidden dangers.

9. [129]

   Further, the plaintiff maintained that the third defendant breached its duty by failing to adequately respond to his request for assistance and ensure that the plaintiff knew how to adequately handle the situation.

10. [130]

    In the end, leaving aside the failure to attend allegation (which I reject as entirely unreasonable), the plaintiff’s case remained:

    1. (1)

       a failure to instruct, warn, inform, and induct as to the features of the boat including risks and dangers associated with the anchor system; and

    2. (2)

       a failure to repair, maintain, replace or redesign components of the system such that the risk which eventuated would not eventuate.

11. [131]

    Having said that, I reiterate that in circumstances in which the plaintiff ended up adopting a version of events different to that which he had opened on and which his expert had assumed, some of the particulars of negligence must necessarily fall away.

12. [132]

    As set out in their defences, the defendants rely on a number of statutory defences including ss 5G, 5L, 5M and 5N of the Civil Liability Act 2002 (NSW) (“CLA”).

13. [133]

    Further, the defendants relied on a contractual indemnity said to be contained in clause 11 of the charter contract.

14. [134]

    In the end, the defendants’ primary contention was that they were not negligent.

15. [135]

    The defendants withdrew reliance on the dangerous recreational activity provisions. Having regard to s 64 ACL, if the plaintiff is otherwise successful, the defendants would not be entitled to rely on the exclusion of liability contained in the contract.

Risk of harm

1. [136]

   In a negligence action, it is only by the correct identification of the risk that the Court can assess what a reasonable response to the risk would be. [2] This is given statutory force in the CLA.

2. [137]

   Only once the risk of harm has been properly identified can the Court consider whether the risk was foreseeable, not insignificant and whether a reasonable person would have taken the precautions suggested: see Uniting Church in Australia Property Trust (NSW) v Miller; Miller v Lithgow City Council; [3] Port Macquarie Hastings Council v Mooney. [4]

3. [138]

   In Coles Supermarkets Australia Pty Ltd v Bridge [5] , Leeming and Payne JJA observed “[w]hat is to be avoided is an unduly narrow formulation of risk of harm which then distorts the reasoning, because, for example, it obscures the true source of potential injury … or because it too narrowly focusses on the particular hazard which caused the injury … or because it fails to capture part of the plaintiff’s case...”.

4. [139]

   In Perisher Blue Pty Ltd v Nair-Smith [6] the Court held that it was generally unnecessary and undesirable to define the relevant risk with too much particularity but particularity can be called for in some circumstances, as without particularity, one cannot determine what, if any, reasonable precautions ought to have been taken, in order to avoid the risk.

5. [140]

   In para [7] of the Amended Statement of Claim the plaintiff identifies the risk of harm being that:

6. [141]

   At the commencement of the hearing the parties agreed that this was the correct formulation of the risk of harm.

7. [142]

   In their closing submissions, the defendants suggested that having regard to the actual evidence, the risk of harm was not correctly identified at the outset of the hearing.

8. [143]

   The defendants say that the risk of harm was that he might injure his hand by holding onto the chain and stepping on the deck button. The defendants say it is the stepping on the button that caused the materialisation of the harm. In a sense the different descriptions of the risk of harm merely identify the primary issue between the parties.

9. [144]

   On the plaintiff’s description of the risk of harm, categorisation must include the fact that on his case, the anchor chain was rusted and it kinked, jammed or bunched. The defendants include as the critical factor in assessing the risk of harm that the plaintiff trod on the deck button.

10. [145]

    In my view, the risk of harm should not be defined with too much particularity. As is often the case, it suits the defendants to identify the risk with as much particularity as possible. The plaintiff suggests a broader characterisation that must necessarily encompass a range of circumstances. One of the circumstances which the plaintiff’s broader description must necessarily include is the risk arising from inadvertence on the part of the plaintiff, such as by inadvertently operating the deck switch.

11. [146]

    At least on the plaintiff’s case, there may be a number of ways in which a person could hurt him/herself in the circumstances which arose, not all of which would involve the activation of the deck switch. I adopt the broader formulation.

Section 5B CLA

1. [147]

   Once the risk of harm has been identified, then the Court must apply s 5B of the CLA.

2. [148]

   Whilst the test of reasonable foreseeability is not a demanding one, [7] s 5B(1)(b) is intended to add a further requirement being that the risk be “not insignificant”. As has often been observed, that requires something more than the risk being foreseeable but not by very much. [8]

3. [149]

   As set out in s 5B(2) of the CLA in determining whether a reasonable person would have taken precautions against the risk of harm, the Court is to consider (amongst other relevant things):

4. [150]

   The plaintiff has identified many precautions which he says should have been taken by the defendants. In determining whether those precautions should have been taken, I am required to have regard to s 5B(2).

5. [151]

   The law of negligence requires more than the mere identification of precautions or preventative measures which could have been taken. Further, it is not merely a matter of identifying that a particular risk was foreseeable and not insignificant. It is necessary that I be satisfied that a reasonable person in each of the defendants’ position would have taken the precautions identified by the plaintiff.

6. [152]

   Further, I must have regard to the principles set out in s 5C of the CLA. Specifically, as set out in s 5C(b) the fact that a risk of harm could have been avoided by doing something in a different way does not, of itself, give rise to or affect liability for the way in which the thing was done; and as set out in s 5C(c) the subject taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.

7. [153]

   All these matters must be considered before the defendants could be found liable to the plaintiff. In particular, the fact that the first and second defendants modified the anchor system at some stage after the event, particularly through the addition of a chain shredder, does not of itself give rise to or affect liability in respect of the risk.

8. [154]

   The question of breach must be considered prospectively, that is, considering whether a reasonable person in the defendants’ position prior to the accident would have taken those precautions, not looking backwards having regard to the fact that the accident happened and assessing what might have been done to prevent the accident.

9. [155]

   Further, even assuming that the defendants should have taken some of the precautions identified by the plaintiff, any determination that the failure to take care caused the harm to the plaintiff must be on the basis set out in s 5D of the CLA. The plaintiff bears the onus of establishing that any failure was causally related to the accident. Establishing that the plaintiff should have been warned of certain things does not assist the plaintiff unless such a failure to warn caused the accident.

10. [156]

    In determining liability, I have regard to my factual findings which are essentially that:

    1. (1)

       the plaintiff had been experiencing problems with the anchor chain including kinking and jamming;

    2. (2)

       he had been attempting to sort out those problems which included resetting the circuit and checking that the system would operate by standing on the right side of the gypsy and placing his foot on the up deck button;

    3. (3)

       at some point he placed his left hand at a point close to but forward of the gypsy as part of the process of either attempting to reset, unkink or unjam the chain or ensure that it would run smoothly into the deck;

    4. (4)

       whilst his left hand was in a position close to and adjacent to the gypsy, he trod on the deck up button; and

    5. (5)

       when he trod on the button the power activated causing the chain to be pulled inwards with the plaintiff being unable to remove his hand from the chain, thereby causing his fingers to become jammed between the chain and the gypsy.

11. [157]

    For the purposes of considering the principles to which I have referred it is also necessary to make findings about the knowledge of the defendants as to the risk and the dangers associated with the boat and anchor system.

12. [158]

    Firstly, I have regard to what is shown in the video which includes the first defendant trying to manipulate the chain in the presence of experts. It is difficult to accept that the chain kinked on that occasion just because it had not been used for a while. I accept that the first defendant must have been aware of the potential for the chain to kink as it was being pulled in.

13. [159]

    I do not accept that the kinking that the plaintiff experienced is something unique to his operation of the anchor system.

14. [160]

    However it is also relevant that the first and second defendants had owned the boat for 23 years prior to the accident. There is no evidence of any earlier accidents, claims or real problems with the anchor system.

15. [161]

    Further, the third defendant had been acting as the charter agent for many years prior to the accident. Again, there is no evidence that they were aware of any problems caused by kinking. There is no evidence of any other hirers complaining or having the sort of difficulties the plaintiff was having.

16. [162]

    Mr Storaker said that the boat had been chartered 200 times since the accident without incident. It must have been hired many times prior to the accident. Of course, I must have regard to the fact that there was some alteration in the system when considering the significance of that number, irrespective of how many times it had been hired prior to the accident.

17. [163]

    In considering what the exercise of reasonable care is required in all the circumstances, it is also important to have regard to what McHugh J said in Dovuro Pty Ltd v Wilkins [9] as follows:

18. [164]

    I will now consider each of the particulars raised by the plaintiff.

Induction, instruction or warning

1. [165]

   The plaintiff submits that I should find that the first and second defendants knew or ought to have known about the idiosyncratic nature of the anchor winch, that is, it had a propensity to jam and ensure that the third defendant was aware of the problems and should have instructed the third defendant to provide adequate instructions to them.

2. [166]

   The plaintiff says that it was incumbent on the third defendant to understand any hidden dangers or any idiosyncrasies with the boat and that they failed to provide adequate instructions or induction.

3. [167]

   In his reports and the joint report, Professor Lyons says that, having regard to the plaintiff’s statement, the training and induction was not adequate. Professor Lyons says that this inadequacy contributed to the accident because there was no demonstration of the anchoring system at induction.

4. [168]

   In his statement, the plaintiff says that Mr Storaker showed him around the boat and showed him a number of things regarding the anchor. He pointed out the two deck buttons and showed him the lever for undoing the capstan but said words to the effect of “you probably won’t need it”.

5. [169]

   He says that Mr Storaker did not operate the anchor at the marina and he did not notice anything untoward about the anchor equipment. Mr Storaker did not provide instructions about what to do if the chain jammed or the operation and location of the circuit breakers.

6. [170]

   Mr Storaker says that he cannot recall with certainty whether he demonstrated how the anchor was deployed and retrieved. However, he says that he informed the plaintiff the anchor could only be operated when the main panel is turned on and that the pedals (buttons) have safety caps and were attached to a safety mechanism. There was an instruction and safety manual on the boat which included a section on the anchor system and included the following:

7. [171]

   The plaintiff and Mr Storaker had differing recollections as to what was said but whether Mr Storaker provided adequate instructions about the deck buttons or the helm switches or the caps on the buttons could not be causally relevant because the plaintiff obviously knew about the switches, the buttons and the caps by the time of the accident.

8. [172]

   Although I have not accepted what the plaintiff said in his affidavit, he says he moved to the left side of the boat immediately before the accident “as I did not want to accidentally activate the deck buttons as I attempted to free the chain.”

9. [173]

   He can hardly now claim that he did not know about the deck buttons, the caps on the buttons or the dangers associated with placing his hand on the chain near the gypsy whilst operating the anchor under power.

10. [174]

    Further, it may be that Mr Storaker did not inform the plaintiff about the circuit breaker or the propensity of the circuit to trip (if that be so) but, again, it must be that the plaintiff was aware of this immediately before his accident. This is because he called Mr Storaker and was informed of this. He had reset the circuit before the accident. He knew how to do it.

11. [175]

    I reject the claim that Mr Storaker should have attended at the boat. He was not requested to do so and his instructions were sufficient to inform the plaintiff how to reset the circuit breaker.

12. [176]

    Nor, as I said at the outset, does it seem to me that the level of the plaintiff’s experience is of significance. The anchor system operated under power. If it worked properly, it was only necessary to press the switch. There is no suggestion that the plaintiff did not know how to manoeuvre the boat as part of the dropping and pulling up of the anchor. It could not be suggested that the plaintiff should have been told not to use the anchor or that he was not sufficiently experienced to hire the boat if he was going to use the anchor. He was pointed to the safety manual by Mr Storaker. It was on the boat.

13. [177]

    Professor Lyons opines that the instruction and induction was inadequate but it is necessary to consider why it was inadequate and how that caused or contributed to the accident. That rather raises the question “What should the plaintiff have been told and what should Mr Storaker have demonstrated?”

14. [178]

    Perhaps Mr Storaker should have demonstrated how to lower and raise the anchor but there is no suggestion that the plaintiff did not know how to do this. Perhaps he should have provided instructions as to what to do should the anchor system not work as was intended but what should those instructions have been? It could hardly be suggested that the operator of the boat should not try and adjust the anchor manually. Persons adjust the anchor manually on many boats.

15. [179]

    The plaintiff says that I should reject the first defendant’s evidence about his knowledge of any earlier prior problems or indeed the propensity to kink or jam.

16. [180]

    As I have said, it does seem that the kinking or jamming during the demonstration in the video after the accident is too much of a coincidence, but even if the propensity to kink or jam was something that the defendants knew or should have known about, the question arises as to what the plaintiff should have been told about this propensity.

17. [181]

    Should he have been told not to adjust, manipulate or try and operate the anchor chain manually? This could not be so. It is a boat. It must be that if something happened with the power, the operator of the boat would need to adjust the chain manually. It might have been difficult to do but it could hardly be suggested that the operator of the boat should do nothing with the anchor chain.

18. [182]

    The plaintiff describes the anchor chain moving under power as an unguarded piece of moving machinery. Even if it could be so described, the customary warning would be to not put a hand on the chain near the gypsy whist it was operating under power.

19. [183]

    Whether or not the exercise of reasonable care required the plaintiff to be given such a warning, the plaintiff knew of the danger because on his case he moved away from the buttons which would have activated the power to avoid such a danger. On his case that was a deliberate decision. On his case he moved away from the deck buttons because of the very danger of which he says he should have been informed. Whilst I do not accept that he did move to the left, I could hardly find in his favour on the basis that he had no idea of the risk associated with depressing the button whilst he was handling the chain.

20. [184]

    Accordingly, prior to the accident happening, even if not on commencement of the hire, the plaintiff knew:

    1. (1)

       that the chain might kink and jam;

    2. (2)

       that the circuit might trip;

    3. (3)

       how to reset the circuit breaker;

    4. (4)

       that the winch should operate under power;

    5. (5)

       that he could adjust the gypsy;

    6. (6)

       if he trod on a deck button it would cause the chain to move,

    7. (7)

       that there was a danger in trying to adjust the chain manually whilst the power to the winch was on; and

    8. (8)

       that he should not stand on the button whilst trying to take a hold of the chain.

21. [185]

    It is not necessary that I make findings as to what a safe induction might have required or whether proper instructions from the third defendant should have included what may happen if the chain kinked because the plaintiff by his own words and conduct demonstrated what the real danger was and that he was aware of it. What was required was a warning or instruction not to attempt to manually adjust the chain whilst the power was activated but, even if the safety manual was not sufficient, the plaintiff knew that he should not be doing this prior to his accident. It could hardly be suggested that the plaintiff should have been told not to attempt to manually adjust the anchor with the power off.

22. [186]

    If it could be said that the exercise of reasonable care on the part of any of the defendants required them to provide a better demonstration of more specific warnings, the plaintiff would still not be entitled to succeed because such failures did not cause the accident.

23. [187]

    In my view, prior to the accident, the plaintiff was aware of the matters about which he says he should have been informed prior to the accident. Whether he became aware through that which he was told or through his own experience on the boat does not matter in the circumstances of this case. He cannot succeed on a failure to warn or instruct case if, despite such failures, he was so aware in the period prior to his accident.

24. [188]

    He must fail on causation on his failure to warn or instruct case.

Failure to maintain, repair, replace or redesign

1. [189]

   On the plaintiff’s case there were a number of problems with the anchor system.

2. [190]

   He says that the chain had a tendency to kink or chain and that the addition of inexpensive componentry would have prevented the accident occurring. He says that, even if there is a finding that he trod on the button, this was mere inadvertence and this could not defeat his claim in negligence which is in part based on deficiencies in the anchor system.

3. [191]

   I accept that the plaintiff was having problems with the anchor chain. It is likely that these problems were caused by the chain kinking as it was fed down from the gypsy into the spurling pipe leading into the deck. It may also be that there were problems as it came over the bowsprit due to a slight misalignment.

4. [192]

   As explained, in particular by Dr Casey, the kinking or jamming might cause the circuit to overload and the circuit breaker to trip. It is necessary to have the circuit breaker closed for the winch motor to operate. The circuit breaker trips when the current gets higher and higher and the motor stalls. This may happen when the chain jams.

5. [193]

   Plainly, the system is designed to operate such that, when the operator activates either the helm switch or the up deck button, the chain will be pulled into the boat through the gypsy and then down through the spurling pipe into the deck where it is stored.

6. [194]

   This should be a relatively smooth operation. This was not occurring around the time of the plaintiff’s accident. The plaintiff had been trying to solve the problem and he had even called Mr Storaker and received advice about the circuit breaker.

7. [195]

   He did not take hold of the chain with his left hand in the moments before the accident for no reason. He must have done so to manually adjust the chain.

8. [196]

   However, again as agreed to by the experts in cross-examination, it must be that in the moments before the accident the chain was not kinked at any point after the gypsy, because if it had been kinked, it would not have moved inwards pulling the plaintiff’s hand with it.

9. [197]

   In circumstances in which the plaintiff bears the onus of establishing breach and causation, uncertainty as to what actually happened does not assist the plaintiff. Further, the opinion of Professor Lyons as set out in his reports was based on his instructions that the plaintiff sustained injury as the chain was going out. His opinion as to any causally relevant deficiencies altered when asked to assume that the chain was coming in.

10. [198]

    Professor Lyons identifies a number of reasons why, in his view, the setup of the windlass on the boat was not safe for use by members of the public. He says that the windlass had not been installed in accordance with the majority of what he described as the Muir recommendations, including that:

    1. (1)

       the chain did not fall vertically through the existing spurling pipe such that the chain strikes the sharp forward edge of the pipe causing it to bounce and often kink and jam;

    2. (2)

       no chain pipe and chain stripper was fitted increasing the gap between the gypsy and rendering the chain prone to jamming;

    3. (3)

       recommendations in respect of the engagement of the chain were not adhered to with the result that one less chain was engaged increasing the risk of the chain jumping off the gypsy;

    4. (4)

       the distance between the windlass and the bow roller was shorter than ideal so as the shank of the anchor comes over the bow roller, the chain sways up and down and side to side encouraging the chain to come off the gypsy; and

    5. (5)

       there is no chain stopper installed to take the load off the windlass placing it under continuous load whilst at anchor.

11. [199]

    Professor Lyons says that all these factors taken individually or together may lead to the need to unjam the chain before or after the gypsy by hand. He says that an attempt to clear the chain is a very dangerous practice.

12. [200]

    On the other hand, Dr Casey suggests that the windlass is reasonably safe. It aligns with commonly used windlasses on boats except in the spurling pipe arrangement. It is not without risk but as are all windlasses. He says the windlass can jam and the chain can jump off the gypsy but that can happen for all windlasses.

13. [201]

    The experts gave evidence concurrently. As I understand the effect of their evidence and the concessions made is that not all of the five points raised by Professor Lyons in his report could be said to be causally relevant to this accident.

14. [202]

    For example, there was some focus on a chain stopper and the anchor swaying and the distance between the windlass and the bow roller but the effect of the oral evidence was that these matters would seem to have little to do with the accident.

15. [203]

    I understood the evidence about the chain stopper to be relevant as a means of taking the weight off the chain and the pressure of the windlass from holding the chain that hangs overboard. This would reduce the wear that was referred to by Professor Lyons in his original report as being relevant to the so-called freewheeling of the chain through the gypsy.

16. [204]

    However, Professor Lyons agreed that when he examined the gypsy mechanism in 2019, he did not see any damage to the clutch, there was nothing more than normal wear and tear and he did not observe anything that would suggest it could easily slip. Dr Casey dismantled and examined the windlass and could not see any damage to the shaft. He did not observe any undue wear or damage to the shaft at all or the clutch.

17. [205]

    Further, other matters that might have had some significance such as the rustiness of the chain were discarded by the experts during their oral evidence.

18. [206]

    Professor Lyons agreed that the rust on the chain would have no effect on the flexibility of the chain once the anchor is over the end of the bowsprit because of the weight of the chain and/or the anchor. Even at its highest, Professor Lyons merely suggested that if the chain was quite rusty that would have the effect of marginally reducing the flexibility of the chain link to link and further encourage the jamming. Whether or not the chain was quite rusty, very rusty, or rusty at all is causally irrelevant having regard to my findings as to the circumstances of the accident.

19. [207]

    On the other hand both experts accept that the circumstances in which the chain links could hit the edge of the spurling pipe made it more likely to jam. This meant that some form of manual action by the operator would be needed.

20. [208]

    I accept that both the chain stripper and additional spurling pipe could have been installed prior to the accident.

21. [209]

    The installation of this additional componentry would have reduced the risk of the chain kinking or jamming because the chain would have fed more smoothly from the gypsy into the deck below.

22. [210]

    As Dr Casey explained, the bunching occurs because, as the chain is pulled out of the gypsy by gravity, the angle that it falls does not quite neatly bring it into the centre of the spurling pipe hole.

23. [211]

    As it falls it is slightly offset to the spurling pipe, such that individual chain links could hit the side of the spurling pipe hole and bounce back up underneath the gypsy and they would jam. The addition of a chain stripper would act as a guide to the chain, such that it would guide the chain links down the middle of the spurling pipe, such that it would assist in preventing jamming.

24. [212]

    Dr Casey confirmed that with the changes implemented in August 2015 there was now no ability for a chain to hit a flat surface and bounce up or jam. Put simply, the chain simply travels down the middle of the chain pipe.

25. [213]

    Dr Casey also explained that another issue with the system may be that the chain can jump off the gypsy altogether, although this is a separate thing from the chain jumping, jamming and kinking. He explained that as the anchor is drawn up and over the bow roller at the front of the boat the shank is quite long. It sticks up in the air. When it sticks up in the air it can lean to one side or the other and if it leans to one side or the other it can flip the chain off the gypsy altogether.

26. [214]

    Dr Casey explained that this is a possibility on all boats. It has to do with the length of the shank on the anchor. I accept Dr Casey’s view that this is quite separate to the issue of the chain bunching up underneath the gypsy. I also accept his view that increasing the distance from the shank of the anchor to the gypsy would not necessarily make the situation better.

27. [215]

    Further the experts agreed that:

    1. (1)

       although the windlass mechanism might be considered an unguarded machine, a guard was not practical;

    2. (2)

       all unguarded machines such as the windlass system in place have a level of danger with it; and

    3. (3)

       the only way that a person could make sure that the danger was avoided was to keep their fingers or hair clear of the machine while it is operating electrically, coming or even just running out.

28. [216]

    Further, it must be that even if there was damage to the clutch, that would be irrelevant. Damage to the clutch would only be relevant if the chain was going out.

29. [217]

    In the end, it is clear that Professor Lyons had prepared his reports and indeed the joint report on incorrect assumptions. When presented with the alternative assumptions he tended to agree that most of the matters to which he had referred to in his reports were causally irrelevant. Indeed, of the five factors identified by Professor Lyons in his report (leading to his conclusion that he could not describe the windlass system as safe) only the second being the absence of a chain pipe and stripper could be said to be causally relevant.

30. [218]

    Further, there is no evidence that the boat was not properly maintained or serviced. The boat was purchased in 1992. The first defendant arranged a survey to ensure it was compliant with all necessary regulations. The boat was generally kept at the Princes Street Marina in Newport. The boat was used for charter for 23 years prior to the accident. The boat was most recently surveyed prior to the accident on 2 October 2014 and deemed to satisfy a Class 4E boat. It was not suggested to the first defendant that he had not properly serviced the boat or kept it in good repair.

31. [219]

    Between July 2012 and June 2015, he spent approximately $120,773 maintaining the boat. According to the first defendant, sometime after March 2015 he installed the chain stripper. He says this was installed around the same time as when the chain was replaced. He believes that the installation of the chain stripper took place following commentary at the time of the boat’s inspection by the legal representatives to the effect that some of these types of winches had chain strippers. He did not consider that a chain stripper was recommended by the manufacturer. There is no evidence that it was required by any standard or regulation.

32. [220]

    The Muir windlass system was installed in the boat at some time prior to the purchase by the defendants in 1992. It had remained in place since that time. There is no evidence that:

    1. (1)

       the system as designed and manufactured required the installation of a chain stripper; and

    2. (2)

       the installation of such a chain stripper was required by any standard or regulation.

33. [221]

    Further, the boat had been hired hundreds of times seemingly without any complaint or earlier accident involving the chain jamming or kinking.

34. [222]

    It may be that the whole system presented as an unguarded dangerous piece of machinery as that term might be generally described in factories, but this was a boat. Even the plaintiff’s expert, Professor Lyons, agreed that guarding the chain was impractical.

35. [223]

    Further, at least in my view, manually adjusting an anchor chain on a boat could hardly be said to be a generally dangerous activity. The activity is only dangerous when the operator is adjusting the chain manually whilst the power is on.

36. [224]

    As I have found, and as accepted by both experts, the plaintiff’s hand was pulled into the gypsy when the winch motor activated. It could only have activated because the plaintiff trod on the deck button. That which he was doing only became unsafe because he trod on the deck button.

37. [225]

    Further, in my view, although the burden of taking precautions to avoid the risk was not high, the likely seriousness of the harm was low.

38. [226]

    I am required to undertake an evaluative task of weighing up the relevant factors. [10]

39. [227]

    In all the circumstances I do not consider that the exercise of reasonable care required the first and second defendants to have installed a chain stripper or additional spurling pipe into the winch system prior to the accident.

40. [228]

    In my view, the suggestion that such additional componentry should have been installed is an example of approaching the matter with hindsight. The plaintiff has identified something that could have been done and was in fact done after the accident but the question of breach must be assessed prospectively, that is, looking at the situation before the accident, not with the knowledge that the accident had happened.

41. [229]

    On the plaintiff’s case the first and second defendants should have modified the winch system which had been on the boat for over 20 years, apparently without incident or complaint, so as to add a new component not ever recommended by any repairer or maintenance person or included by the manufacturer to avoid a risk which was on the evidence low and could only arise if the operator did what he or she was warned in the manual not to do, being to take a hold of the chain whilst it was operating under power.

42. [230]

    In my view a reasonable person in the first and second defendants’ position would not have taken that precaution. Manually pulling on an anchor chain may involve some risk but that is a risk faced by boat owners on a daily basis. This anchor system operated under power. Provided that the power was off there was no more danger in touching the anchor chain than in any other boat.

43. [231]

    Whilst the risk of harm was foreseeable and not insignificant, the probability that harm would occur if care (that is with the addition of a chain stripper or spurling pipe) was not taken was low.

44. [232]

    In my view the exercise of reasonable care on the part of the defendants did not require any of them to arrange for a new spurling pipe or chain stripper to be installed prior to the accident and of all the suggestions made in the Amended Statement of Claim and in the first report of Professor Lyons, it is only those two additional components which, by the end of the oral evidence, could be viewed as causally relevant.

The claim pursuant to the ACL

1. [233]

   In the Amended Statement of Claim the plaintiff alleges that the defendants:

   1. (1)

      guaranteed that the services provided by them would be rendered with due care and skill in accordance with s 60 of the ACL; and

   2. (2)

      guaranteed that the boat would be reasonably fit for the particular purpose made known to them pursuant to s 61 of the ACL.

2. [234]

   In their defence the defendants deny that they breached the guarantees contained within ss 60 or 61 of the ACL and further say that having regard to ss 5K, 5M and 5M of the CLA any such liability is excluded. Further, the defendants seek to rely on a contractual indemnity which they say is set out in clause 11 of the contract between the plaintiff and the first and second defendants.

3. [235]

   During closing submissions, Counsel for both parties agreed that I could deal with the claim under the ACL rather briefly. This is because in his closing submissions the plaintiff merely adopted and referred to his opening submissions on the claim under the consumer guarantees. In his opening submissions, the plaintiff said:

4. [236]

   The plaintiff made no additional submissions as to any basis on which the defendants might be liable under the ACL if I found that the defendants did not fail to take care. I thus assume that the plaintiff only pursued a claim under the ACL on the basis that the defendants might seek to rely on the purported indemnity contained in the hire contract.

5. [237]

   In their defence the defendants rely on the indemnity said to be contained in the hire contract but again at the conclusion of the hearing Mr Turnbull suggested that it would only be necessary for me to consider s 64 of the ACL. If I formed a particular view about the indemnity having regard to s 64 it would not be necessary to further consider the terms of the contract.

6. [238]

   Of course having regard to my findings as to negligence, the defendants do not need to rely on the exclusion of liability in any event.

7. [239]

   Having said that, for completeness, as set out in s 64 of the ACL a term of a contract is void to the extent that the term purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying, any liability of a person for a failure to comply with a guarantee that applies under the division to a supply of goods or services. Plainly, the exclusion of liability contained in the hire contract would be rendered void by virtue of s 64.

8. [240]

   Section 139A of the Competition and Consumer Act provides that a term of a contract for the supply of recreational services to a consumer by a person is not void under s 64 of the ACL only because the term excludes, restricts or modifies, or has the effect of excluding, restricting or modifying any liability of a person for a failure to comply with a guarantee under ss 60 or 61 of the ACL that applies.

9. [241]

   The effect of s 139A is to exclude from the operation of s 64 of the ACL such terms and contracts for the supply of recreational services that fall within the description of s 139A(3). As set out in s 139A(3), s 139A does not apply unless the exclusion, restriction or modification is limited to liability for death or physical or mental injury or the contraction or aggravation of a disease.

10. [242]

    The purported exclusion of liability that is said to be in the contract is not so limited. As such, s 64 applies.

11. [243]

    In the circumstances, having regard to the way the case was conducted and the submissions of the parties, it is thus not necessary to further consider the plaintiff’s contractual claim or claim under the ACL. Nor is it necessary to further consider whether the defendants could exclude any liability that it might otherwise have, having regard to s 64. On the plaintiff’s case he has no better remedy under the ACL than in negligence.

12. [244]

    It is not necessary for me to comment on the other statutory defences raised by the defendants as I have not accepted that the defendants failed to exercise reasonable care.

Damages

1. [245]

   The parties have agreed on damages other than non-economic loss and economic loss.

Non-economic loss

1. [246]

   The plaintiff is currently 64 years of age. As a result of the accident, he sustained injuries to his left index, middle and ring fingers, specifically being a laceration to the radial pulp of the index finger, laceration to the dorsal aspect of the phalange of the middle finger and a devascularisation of the ring finger and dislocation through the phalangeal joint.

2. [247]

   Following the accident, he was taken to the Royal North Shore Hospital where he underwent operative treatment. He had physiotherapy for a period of 12 months but developed hypersensitivity to the left ring finger and stiffness of the proximal interphalangeal joint of the left ring finger.

3. [248]

   He maintains that he suffers from a constant aching of the left ring finger around the proximal and phalangeal joint and hypersensitivity of the pulp of the left ring finger. Symptoms in his left hand are aggravated by carrying, lifting, cooking or chopping vegetables with the left hand.

4. [249]

   The stiffness in the left ring finger with altered sensation means that he is unable to play the guitar in any meaningful way. There is no dispute that his inability to play the guitar prevents him from performing and writing songs as he cannot create without playing the guitar. He says that he also has difficulties undertaking recreational activities such as golf and that his disability affects him in undertaking some of his farm work.

5. [250]

   As identified to a psychiatrist who examined him for the purpose of his case, Dr Christopher Canaris, he has lost his passion for existence and lost his career. He has been diagnosed with a chronic adjustment disorder with mixed anxiety and depressed mood.

6. [251]

   In the range of cases that come before this Court, the plaintiff’s injuries are not in the severe category. He has not lost the use of his hand and does not suffer from a significant psychiatric condition.

7. [252]

   Having said that, non-economic loss must be assessed having regard to the significance of the injury and disability to the plaintiff and its effects on the plaintiff. The injury has deprived the plaintiff of both his ability to earn an income as a guitarist and his ability to pursue his life-long passion, being playing the guitar.

8. [253]

   The plaintiff submits that he should be assessed at 45% of the most extreme case. The defendants suggest 23%.

9. [254]

   Damages are awarded for pain and suffering, consequent upon injury and disability. Whilst the level of pain that the plaintiff might experience on an ongoing basis may not be high (on a comparative basis), suffering takes many forms. Being deprived of his creative passion and occupational capacity at the age of 57 has had a significant impact on the plaintiff. I assess his non-economic loss at 33% which amounts to $229,000.

Economic loss

1. [255]

   The plaintiff says that, if not for his accident, he would have continued to derive an income performing with INXS on concert tours from time to time. This would have led to the generation of income, not only from the actual performances but from the increased sales following the performances. Further, the plaintiff says that he would have continued to create music and that there was further potential to derive income from the creation of new songs.

2. [256]

   There is no claim for loss of royalties from old songs which the plaintiff accepts he will continue to receive and would continue to receive, irrespective of his accident, but Montana makes a claim on the basis of loss of a potential increase in royalties consequent on touring. The plaintiff also claims that he has lost the ability to write new songs as he needs to play the guitar to do so.

3. [257]

   The plaintiff’s claim for loss of income is based on his assertion that INXS would have undertaken either two further large scale world tours or undertaken a number of (perhaps 5 to 6) smaller tours.

4. [258]

   The plaintiff points to the income that he has received from the performances of the band during the 2000s (that is, after the death of Michael Hutchence) as indicative of the level of income that he would have received but for the accident, albeit that his claim is based on the income he received in 2006/2007 rather than the much smaller income he received from touring in 2011/2012.

5. [259]

   In making these claims, the plaintiff acknowledges that:

   1. (1)

      the band was more successful prior to the death of Michael Hutchence;

   2. (2)

      his brother, Jon Farriss, had announced during the last concert tour in 2012 that the band would not be performing again;

   3. (3)

      it would have been necessary to engage a new lead singer as the band had dispensed with the services of the person who had been retained as lead singer as at 2012;

   4. (4)

      only a small number of the songs had been written by him solely; and

   5. (5)

      the band’s manager, Chris Murphy, had died.

6. [260]

   However, the plaintiff says that:

   1. (1)

      his brother’s statement in 2012 was not reflective of his thinking or the thinking of the band generally;

   2. (2)

      it is not uncommon for bands with the longevity and experience of INXS to announce retirement and reappear in the years following, particularly in these times;

   3. (3)

      part of the reason for his brother’s statement was that it was dispensing with the services of the lead singer but according to the plaintiff, at least at some point in the period between 2012 and 2015, he and the other members of the band were in negotiations with a very high profile well-known international singer to perform with the band on an ongoing basis;

   4. (4)

      the band had international recognition, particularly in places such as Germany and South America and, as has been demonstrated by other internationally known rock bands, the potential market was significant and lucrative; and

   5. (5)

      2017 would have been a particularly significant date for a comeback tour.

7. [261]

   So the plaintiff’s claim is that he has been deprived of significant income which he would have received from touring.

8. [262]

   Montana holds shares in the plaintiff’s publishing rights which receives income from live performances and rights to the master recordings of INXS and receives royalty income from the activities of INXS. The plaintiff and his wife are directors of that company.

9. [263]

   Montana claims damages for its loss of income based on additional royalties it would have received from increased interest in INXS songs generated from tours that would have been performed but for the accident. Montana generally received a 7.14% share of the total royalties payable.

10. [264]

    Montana claims that royalty income would have been significant, although it is impossible to quantify the precise loss. It claims the sum of $250,000 on account of loss of royalties.

11. [265]

    Further, Montana claims an additional buffer of $25,000 on account of the cost of replacement labour to undertake work at the farm that the plaintiff would have performed but for his accident.

12. [266]

    Montana accepts that there is limited evidence to quantify its claim and refers to the well-known statement in The Commonwealth of Australia v Amann Aviation Australia Pty Limited: [11]

13. [267]

    The plaintiff relies on an expert, Paul Gronsbell-Luntz (who is not only an expert accountant but a specialist in the music industry), on the potential to derive income from music platforms or streaming services and the resurgence in interest in older bands.

14. [268]

    According to Mr Gronsbell-Luntz, artists may enter into an agreement to receive a payment, for example, per million hits on Spotify. As an example, an artist may receive an agreed payment of $5,000 per one million hits. Mr Gronsbell-Luntz made reference to his research which suggested there had been 1.4 billion hits on Bohemian Rhapsody since the release of the movie and the sort of income which could be generated by a band such as Queen in those circumstances.

15. [269]

    He also gave examples of individual singers with one-off hits making a significant income from these streaming services. He also pointed to the return of old bands such as Aerosmith as an example of the public’s general interest in these older rock bands.

16. [270]

    The defendants’ position is rather different. The defendants say that:

    1. (1)

       I should accept the statement of Jon Farriss made in 2012 that the band would not be performing again;

    2. (2)

       I should draw a Jones v Dunkel [12] inference based on the failure of the plaintiff to call any other members of the band in his case;

    3. (3)

       the band’s income had been diminishing up to 2012 and had been non-existent between 2012 and 2015 (by that, the defendants mean from performing);

    4. (4)

       the prospects of the plaintiff creating a new song which would have generated a significant income were remote; and

    5. (5)

       the band could not compare itself with bands such as Queen or Aerosmith.

17. [271]

    Put simply, the defendants say that INXS would not have toured again and that in those circumstances, neither plaintiff is entitled to any allowance for losses arising from the inability to tour again.

Assessment

1. [272]

   I am required to assess the extent to which the plaintiff’s earning capacity has been diminished as a result of the tortious conduct of the defendants. [13] I must assess the extent to which any diminution of earning capacity may have been productive of financial loss. [14] In this regard the plaintiff’s claim is limited to earnings he would have received from INXS rather than generally as a performer.

2. [273]

   The amount that the plaintiff has earned in the past is not determinative of the amount that should be awarded on account of diminution of earning capacity either since the accident or into the future but past earnings may be a guide.

3. [274]

   In assessing damages for future loss of earning capacity, I must apply s 13 of the CLA.

4. [275]

   The key factual issue is whether I should accept that INXS would have toured again after the date of the accident. The plaintiff’s claim for economic loss is based on touring and not royalties. There is no claim that the plaintiff would have performed with any other band, albeit there was some evidence as to what other bands earned. Although the plaintiff invites me to find that INXS would have toured again, the claim is really akin to a claim for a loss of a chance that INXS would tour again and the loss of a chance that any tours would be lucrative.

5. [276]

   It is puzzling that the plaintiff did not call evidence from other members of INXS in his case. No explanation was offered as to why his brothers or Kirk Pengilly did not give evidence, particularly as Jon Farriss is the person who announced in 2012 that the band would not be touring again. Any doubt on the issue could have been resolved through evidence from other members of the band.

6. [277]

   Having said that, it is important to emphasise the limits of a Jones v Dunkel inference. The only inference I can draw is that evidence from other members of the band would not have made the plaintiff’s case any better. I do not draw an adverse inference or in some way make an inference contrary to the plaintiff’s evidence. The defendants could have called evidence if they wished to back up their assertions that INXS would never have toured again irrespective of the accident.

7. [278]

   Further, I am entitled to have regard to a number of matters which emerged from the evidence and indeed to matters of common knowledge in assessing whether I should accept the plaintiff’s evidence of his most likely circumstances but for the accident including:

   1. (1)

      the plaintiff was only 57 at the time of the accident. Bearing in mind the prevalence of old rockers getting back together and performing, it could hardly be said that he and any other members of the band were too old to perform;

   2. (2)

      INXS is one of Australia’s most famous bands. The band is recognised worldwide. However, it is also famous for the death of its lead singer. As the income generated from tours in the 2000s demonstrates, it has not had the same success with replacement lead singers and has not had the same touring success as a band such as Queen with Adam Lambert has achieved. Its touring income was significantly less in 2012 than it was in 2006;

   3. (3)

      yet, it is plain that songs live on and I accept the plaintiff’s evidence that, at least in some other countries, the interest in the band’s songs remains high and the importance of Mr Hutchence as the lead singer in some other countries may not be as significant; and

   4. (4)

      further, the potential to earn significant income from streaming platforms would surely be an incentive for any band to get out there and play (if the aim was to earn an income rather than just create and play as part of the creative passion).

8. [279]

   It is common ground that bands at all levels from the 1970s, 1980s and 1990s continue to perform, including globally recognised bands such as Queen and Aerosmith or Australian bands such as Midnight Oil and even less well known but aging Australian bands such as Elastique Mind Bladder.

9. [280]

   Of course, the idea that a band might announce their retirement and then reform and perform again is hardly novel. Indeed, some Australian musicians seem to specialise in retirement announcements.

10. [281]

    I accept the plaintiff’s evidence that INXS would have performed again but for his injury. He is one of the founding members and driving forces behind the band and its continuation even without Michael Hutchence. Drawing a Jones v Dunkel inference is not evidence to the contrary.

11. [282]

    Having said that, it then becomes necessary to assess what income the plaintiff might have derived from the band performing again. That necessarily involves assessing when and how often the band might have performed and what income the plaintiff might have derived from such performances. It is important to emphasise that the plaintiff limits his claim to the amount he received from touring in 2006 multiplied by the number of tours.

12. [283]

    The plaintiff claims that between the date of the accident in January 2015 and the date of the hearing, INXS would have toured on three occasions and that he would have derived income of $316,000 from each tour (being the amount he earned in 2006). He claims that in future INXS would have similarly undertaken three more tours and that he would have derived the same income from those tours. This claim appears to be based on the opinion of Mr Gronsbell-Luntz rather than any direct evidence from the plaintiff or anyone else. Mr Gronsbell-Luntz also says that tax should be assessed at 30%.

13. [284]

    As set out in the plaintiff’s closing submissions, he claims the total net sum of $1.2m, based on likely gross earnings equivalent to the sum receiving from touring in 2006 (being $316,000). This might be viewed as rather ambitious having regard to the amount he earned from touring in 2011 and 2012.

14. [285]

    The plaintiff relies on two reports of Mr Gronsbell-Luntz dated 30 August 2019 and 15 December 2020. The defendants rely on a report of Lance Kahler of Vincents dated 5 March 2020. The experts met in conclave and produced a joint report dated 6 July 2021. Both experts gave evidence.

15. [286]

    Although the experts produced a joint report, they did not agree on much.

16. [287]

    Mr Gronsbell-Luntz assesses the plaintiff’s economic loss between 24 January 2015 and 30 August 2021 at $564,060. Mr Kahler provided three alternative scenarios for that period and produced a range of net loss between $54,609 and $172,371. The reason for the significant difference is a difference on three issues being:

    1. (1)

       the number of tours that would have been conducted by INXS;

    2. (2)

       the amount of the loss of income per tour; and

    3. (3)

       the amount of tax that should be deducted from the assessed amount before tax loss is suffered by the plaintiff.

17. [288]

    Mr Kahler assumes that INXS would have only undertaken one tour. Mr Gronsbell-Luntz assumes three tours based on his knowledge of the success of other bands, popular in the 1970s and 1980s, such as Fleetwood Mac, the Rolling Stones, Pink Floyd, Queen and Guns N’ Roses, although that does not necessarily accord with the plaintiff’s evidence.

18. [289]

    Mr Kahler assumes that at best, INXS would have had a single comeback tour between 2017 and 2020 and a final farewell tour sometime after 2022. Mr Kahler’s opinion appears to pay little regard to the affidavit of the plaintiff dated 1 December 2020, in which he increases his predictions as to the number of tours. Of course, any prediction must now have regard to the consequences of the pandemic.

19. [290]

    On the other hand, Mr Gronsbell-Luntz seemingly considered the success of Queen as a comparator, particularly as Queen had been able to replace Freddie Mercury with Adam Lambert (although “replace” may not be the right word).

20. [291]

    Of course, there is a degree of speculation on the part of both experts.

21. [292]

    In his statement, the plaintiff addresses the comments of his brother at the last concert at RAC Arena in Perth on 11 November 2012. He acknowledges that the comment was widely reported at the time but says that the comment set up the band, from a marketing point of view, for future interest and comeback tours, just like other bands such as the Eagles, Duran Duran, Fleetwood Mac and Midnight Oil. It is of course a matter of public record that Midnight Oil is currently touring, suggesting that this will be their last tour.

22. [293]

    The plaintiff says that it would not be unusual for a band such as INXS to take two to three years off and then consider what they would do. He did not expect the concert on 11 November 2012 to be the last time he ever played. He thought 2017 would be a fantastic time for a comeback tour, as it would have been the 40th anniversary of the band, the 30th anniversary of the Kick album and the 20th anniversary of the death of Mr Hutchence.

23. [294]

    He says that if the band did not tour in 2017 he would have expected them to tour in 2019 and 2020. He says he would have expected such a tour to be a world tour. He says he would not have done a world concert tour for anything less than $1m gross. He says this would be a conservative estimate. He also says that the band would have done a further farewell tour some time in 2022. I assume he means $1m split between the band and others. Mr Gronsbell-Luntz says that the plaintiff’s share of net touring revenue is 1/5th.

24. [295]

    The plaintiff changed his predictions about touring between his statement and affidavit.

25. [296]

    In his affidavit he acknowledges that the number of the tours the band would have done would largely depend on public interest, but he says that it is equally possible that instead of two large stadium tours, they would have undertaken five to six tours in smaller, though still significant, venues.

26. [297]

    I am again uncertain as to the purported clarification but, having accepted that the band would have toured post-2012, I accept the plaintiff’s original evidence about touring in around 2017. There may have been one smaller tour as well.

27. [298]

    As the plaintiff says, a tour in 2017 would have coincided with a number of significant events in the band’s history and of course it would be five years post the last tour.

28. [299]

    Having said that, the plaintiff’s statement of the minimum amount he would have been guaranteed to do a tour seems somewhat ambitious.

29. [300]

    Both experts have relied on the income the plaintiff actually earned from tours with INXS during the 10 years prior to the accident. During that 10 years, INXS undertook a total of 4 tours comprising tours in 2006, 2007, 2011 and 2012.

30. [301]

    For the tours conducted in 2006 and 2007, the average income before tax per tour for the plaintiff was $316,172. For the tours conducted during 2011 and 2012, the plaintiff’s average income before tax was $93,980. The experts agree on these calculations and it is not necessary for me to comment further on how those figures are calculated.

31. [302]

    The plaintiff claims with a new lead singer he would have earned at least $316,000 per tour (that is the same as in 2006). The defendants point to the more recent figures (2012) as more likely.

32. [303]

    I accept the evidence of Mr Gronsbell-Luntz that there has been a resurgence in interest in the older rock bands and many bands are now touring. However, the band’s tours in 2011 and 2012 were not as successful as those in 2006 and 2007 (which followed a reality TV show and a search for a new lead singer on that TV show).

33. [304]

    Further, on the plaintiff’s case the band would not have been touring with the same singer that they had in 2011 and 2012. The plaintiff says that they were in negotiations with an internationally known singer but the name of that person was not revealed. The proposition that the band would have been able to tour again with an internationally known singer earning the same amount that it earned in 2006 and 2007 involves a degree of speculation. There is a chance that would have happened but it may not have.

34. [305]

    In the end, I accept that the band would probably have toured again and I accept that having regard to all those significant dates that it may have been likely that there would have been a major tour around 2017. It is at least possible that there also would have been a somewhat smaller tour having regard to the resurgence in interest. It is only necessary to turn on the radio or the television this year to understand that there appears to be a renewed interest in Australian bands which rose to international stardom many years ago.

35. [306]

    Of course, I am bound by the evidence in assessing what the plaintiff might have earned from any tours. It is not suggested by either expert that it would have been more than $316,000 (gross) per tour. That estimate is based on the touring income received within 8 to 9 years of Mr Hutchence’s death and at a time when the band was being heavily promoted through a reality TV series.

36. [307]

    There are perhaps two approaches to assessment of loss in a case such as this. Either I could assess loss based on the loss of a chance of the plaintiff earning the higher amount ($316,000) and then discount that sum to reflect the risk that such a tour would not have come off or I could assess based on a lesser figure (reflecting more of an averaging based on past tours).

37. [308]

    In my view, I should assess on the loss of a chance basis. There is a chance that a 2017 tour might have produced similar income to the most successful tour post the death of Michael Hutchence but I would discount by one third on the basis that it might not have been as successful.

38. [309]

    To a certain extent, what success the band might have achieved but for the plaintiff’s injuries is speculative but that is the nature of the industry in which the plaintiff was involved. I must not decline to assess damages merely because the task of doing so for a person in the creative industry is somewhat difficult.

39. [310]

    The approach I take is to allow for the resurgence as identified by the plaintiff’s expert and as must be common knowledge and have regard to the evidence of the plaintiff that the band was in negotiations with a new internationally known lead singer. I also allow for the fact that the Farriss brothers and Kirk Pengilly are well-known in their own right and that the band has such a well-known back category of songs, that it may be likely that a tour of the type referred by the plaintiff would have had greater resonance with the public than the 2011 and 2012 touring.

40. [311]

    The findings I thus make in assessing the plaintiff’s claim for past loss of income are thus that:

    1. (1)

       the band would have engaged in a large comeback tour and at least one other small tour between 2015 and 2021; and

    2. (2)

       the earnings from the large comeback tour would be closer to the earnings in 2006 and 2007 and the earnings from the smaller tour might be closer to the amounts earned in 2011 and 2012. I have regard to the possible uplift which might arise from a resurgence in interest, as well as the chance that whoever the new lead singer may have been, he or she may not have been popular (that is more the 2012 experience than the 2006 and 2007 experience).

41. [312]

    At its highest, the evidence is that the band would have embarked on one more farewell tour which is what the plaintiff says in his statement.

42. [313]

    I assess loss on the basis that:

    1. (1)

       for the large scale tour: $200,000;

    2. (2)

       the sum of $80,000 in respect of the small tour which is more reflective of the earnings made from the tours in 2011 and 2012; and

    3. (3)

       similarly for the large farewell tour in the future (which I expect would have taken place before 2025), I expect that there would have been the potential to earn the same amount that might have been earned in 2017. However, of course, many things might have happened in the intervening period, one being a pandemic. In the end, it seems to be that a 30% discount is again appropriate and there is no need to further discount on account of contingencies. That means I would allow $200,000 for the future.

43. [314]

    I emphasise that the plaintiff’s share of any profit from any touring that INXS might have undertaken was only ever approximately 1/5th of the net profit and in the future would only have ever been 1/5th of the net profit. The most that the plaintiff has ever earned from any tour since the death of Michael Hutchence was $316,000 gross and that was earned in 2006/2007 on the back of a television series and a large scale tour.

44. [315]

    These sums must be converted into after tax figures.

45. [316]

    There is an issue between the experts as to what rate of tax should be applied to these figures. Any award for loss of earning capacity must be on a net basis. Mr Gronsbell-Luntz says that as the plaintiff would have structured his affairs such that the income from touring would be received through a trust structure, then any compensation should be awarded on the basis of a more favourable tax rate.

46. [317]

    He suggests a figure of 30%.

47. [318]

    Mr Kahler refers to the fact that the plaintiff continued to receive income from other sources even when not touring in the period 2013-2015 and that the income he might have received from any tours but for the accident would need to be added to that income such that the more preferable tax rate for income received from a trust could not be applied to the allowance for loss of earning capacity.

48. [319]

    Unlike in cases such as Husher v Husher the plaintiff has both prior to and since the accident continued to receive an income from a number of sources. As such whilst he might have received income from touring through a trust, that was not the only income he would have received. It is artificial to simply assume the lowest tax rate in those circumstances.

49. [320]

    In my view, the award of damages should reflect the normal tax rates on the gross sums lost by the plaintiff:

    1. (1)

       For the large scale tour, this amounts to $137,000 net;

    2. (2)

       For the small scale tour, this amounts to $62,000 net; and

    3. (3)

       For the future tour, this amounts to $139,000 net.

50. [321]

    As such, converting the gross loss into a net loss leaves the sum of $199,000 for the past and $139,000 for the future.

51. [322]

    Finally the plaintiff claims a loss on account of his inability to write songs. I suppose that there was always a possibility that a creative person such as the plaintiff might have written a marketable song but, with respect to the plaintiff, I must have regard to the past and the evidence does not support this aspect of his claim. I acknowledge that he has written songs in the past but that was quite some time ago.

Cost of replacement labour

1. [323]

   Montana makes a claim for the cost of replacement labour on the plaintiff’s farm. According to the plaintiff he would visit the farm on a number of days over a fortnight and perform some work whilst he was there. As I understand the position, the farm has a manager and the regular work required would be undertaken through the manager and the other persons obtained by the manager. However, the plaintiff says he used to go there and do things whilst he was there and it would now be necessary for Montana to hire someone else to perform the work that he might have performed.

2. [324]

   The problem with this claim is that he does not adduce evidence of any amounts actually spent by Montana in replacement labour. For example, he does not produce invoices for farm workers that needed to do the work that he would have done. Further, it could not be said that he is restricted from undertaking any type of work on the farm.

3. [325]

   It is difficult to discern any direct loss suffered by Montana having regard to the company’s financial statements. It does not seem to me that I should award damages based on some generalised approximation of hours and value by the plaintiff. The plaintiff might have adduced specific evidence as to when the replacement labour was hired and at what cost. The plaintiff did not do so but he has thus not discharged his evidentiary onus on this issue.

Claim for loss of increased royalties

1. [326]

   Montana makes a claim on the basis that if not for the plaintiff’s accident, royalties would have increased over time having regard to a likely increase in interest in INXS generated by further touring. Again, it is important to emphasise that the claims for loss are all related to the proposition that INXS would have continued to tour and would have been successful in their tours. The plaintiff admits that it is not possible to be precise as to the increase in royalties but simply says an allowance of $250,000 should be made.

2. [327]

   I have regard to the evidence of Mr Gronsbell-Luntz as to how musicians now earn an income from streaming services and the potential increase in hits on songs which might derive from increased interest in publicity about a band. It is notable that there have been some TV shows about INXS in recent times. Again, I accept Mr Gronsbell-Luntz’s evidence about renewed interest in bands such as INXS but assessing damages is not supposed to be an exercise in speculation. Even awarding a lump sum buffer on the basis that precise calculation of weekly losses is not possible requires some foundation for the sum allowed.

3. [328]

   The difficulty in the plaintiff’s industry is that there is really no way of predicting how many hits on Spotify or other streaming services might be generated by an increased interest through touring. Yet it must be that a comeback tour such as that proposed by the plaintiff which might have taken place in 2017 would necessarily result in increased “sales” or “hits” (that is from the streaming services).

4. [329]

   Adopting a mid-range based on Mr Gronsbell-Luntz’s research a band or musician might receive $5,000 per 1 million hits. The plaintiff was only one member of the band and according to his own expert accountant he received 1/6th of recording royalties and a 10% share of publishing royalties.

5. [330]

   In his own evidentiary statement, the plaintiff says that he mostly received a 7.14% share of the publishing rights to most INXS songs.

6. [331]

   Even on the plaintiff’s estimate, a loss of $250,000 would equate to a loss of over $3.5 million in total. This is said to be the loss of additional royalties which would have been derived from the tours in 2017 and in the future.

7. [332]

   At $5,000 per million hits it would follow that I would have to find that but for the accident and as a direct result of the INXS touring at the times I have suggested there would have been an extra 700 million hits on Spotify or other services. This only needs to be said to be rejected. The only figure I have by comparison is Mr Gronsbell-Luntz’s reference to Queen following the release of Bohemian Rhapsody.

8. [333]

   Yet I am satisfied having regard to the evidence that there would have been some increase. Bearing in mind that Montana would have only received a portion of the income and that I am only awarding damages for the increase in royalties as a result of touring I allow the sum of $40,000.

9. [334]

   The only other amounts to be awarded are for past and future treatment and care. I was informed that the parties had agreed on the sum of $55,000.

10. [335]

    Should the first plaintiff have succeeded, damages would have been awarded as follows:

11. [336]

    Montana would have received the sum of $40,000.

Orders

1. [337]

   The plaintiff has not succeeded. I enter a judgment for the defendants.

2. [338]

   I order the plaintiffs to pay the defendants’ costs. I grant liberty to apply should any other costs order be sought.