Tasker v Munro

1. [1]

   HIS HONOUR: Jacob Tasker was catastrophically injured on 14 February 2017 when he dived or jumped from the houseboat Shiftin’ Sands that was then stationary on sand in shallow water on the Nambucca River estuary, near the V wall at South Beach at Nambucca Heads. The vessel was owned by Frank Munro. Mr Tasker alleges that the incident was caused by Mr Munro’s negligence in mooring the vessel in or near shallow water and failing to warn or instruct passengers not to dive overboard when it was in that location.

2. [2]

   The proceedings were commenced by statement of claim filed on 8 November 2018. Mr Munro’s defence was filed on 5 March 2019. It later emerged that Mr Munro is incapable of satisfying any judgment that Mr Tasker may obtain against him. Mr Munro’s relevant impecuniosity is not contested by the proposed second and third defendants who, by his amended notice of motion filed on 21 July 2020, Mr Tasker seeks leave to join pursuant to s 5(3) of the Civil Liability (Third Party Claims Against Insurers) Act 2017. Mr Munro submitted in this application to any order that the Court might make.

3. [3]

   The proposed second defendant is Insurance Australia Limited t/as NRMA Insurance. It opposes Mr Tasker’s application on three bases. First, Mr Munro’s case rests upon an assumed duty to warn of obvious risks, when there is no such duty. Secondly, there is no arguable case that the NRMA policy responds to Mr Tasker’s claim as the policy only covers incidents occurring at Mr Munro’s premises, whereas the incident occurred some distance away from it. Thirdly, and in any event, the policy contains an applicable exclusion for liability arising from the ownership or use of watercraft.

4. [4]

   The proposed third defendant is Liberty Mutual Insurance Company t/as Liberty International Underwriters. It opposes Mr Tasker’s application on two bases. First, the Liberty policy issued to Mr Munro provided cover for liability in respect of injury as a result of an “occurrence in connection with the insured’s business” when the event giving rise to Mr Tasker’s injuries was not the result of such an occurrence. Secondly, the Liberty policy does not cover liability “directly or indirectly caused by, arising out of or in any way connected with…the ownership, maintenance, operation, possession or use by or on behalf of the insured of any watercraft exceeding 10 metres in length”. Mr Munro’s vessel was longer than 10 metres.

The legislation

1. [5]

   The Civil Liability (Third Party Claims Against Insurers) Act provides relevantly as follows:

The NRMA policy

1. [6]

   It is common ground that at the time of the incident, Mr Munro held policy number HOM 524 898 988 comprised of the following documents:

2. [7]

   In the section of the policy headed “What you’re covered for”, the following descriptions appear:

3. [8]

   Except as an aid to the interpretation of these provisions, no other sections of the NRMA policy are relevant.

The Liberty policy

1. [9]

   It is also common ground that at the time of the incident, Mr Munro held a policy of insurance with Liberty International Underwriters that covered him trading as Munro Sandman for the defined business of “Sand Extraction – Sales/Distribution”. Under the section entitled “Exclusions”, the following appears:

2. [10]

   Clause 2.9 of the Schedule is relevantly as follows:

3. [11]

   No other provisions of the Liberty policy appear to be relevant.

Mr Tasker’s submissions

1. [12]

   The proposed second amended statement of claim alleges a breach of duty on the part of Mr Munro arising from the events that are said to have occurred while those who were later present on the vessel when Mr Tasker was injured had also earlier been present at Mr Munro’s home or at the site as defined in the policy. Mr Tasker contends, for example, that if Mr Munro failed at the site to warn those who were then about to board his vessel that they should not dive or jump from the vessel at any time, then such a failure gave rise to a liability on the part of Mr Munro that was covered by the NRMA policy. Mr Tasker submitted that such a case was “arguable”: see, for example, Ritchie v Advanced Plumbing and Drains Pty Ltd [2019] NSWSC 1028.

2. [13]

   I disagree. In my view, that contention confuses a possible Mr Munro’s breach of a duty owed to Mr Tasker with NRMA’s potential liability to indemnify him for what is alleged to have occurred as the result of that breach. NRMA is only obliged to indemnify Mr Munro if the incident, which Mr Tasker contends resulted from the breach, occurred in Mr Munro’s home or at the site as defined. It did not: it happened on the river some distance away where the boat from which Mr Tasker jumped was located. The territorial or physical limitation upon NRMA’s liability is not overcome by the fact, if it can be established, that Mr Munro allegedly committed an act of negligence at some earlier time within his home or at the site if the incident did not also occur there.

3. [14]

   Secondly, Mr Tasker argued that Mr Munro’s liability to Mr Tasker did not arise from his use or ownership of a watercraft. He somewhat unsurprisingly did not contend that Mr Munro’s substantial houseboat, from which Mr Tasker fatefully entered the water, and which had cruised along the Nambucca River to a point on the estuary where it stopped adjacent to or upon a sandbank, was not up until that time a watercraft. Rather, Mr Tasker contended that the vessel became something else when it came to a stop on the sandbank where it was located at the time of the incident. Mr Tasker suggested that the vessel at that time was a pontoon or what he described in written submissions as a “floating platform attached to land” or some other manifestation of a land-based structure that converted it, albeit temporarily, into something other than a watercraft. It was not, in such a configuration, what Mr Tasker described as a watercraft “in the classic sense”.

4. [15]

   In a different but related argument, Mr Tasker submitted that if the houseboat was a watercraft at the relevant time when he was injured, it was not being used as such by Mr Munro. He submitted that “use” must be related to the features of the houseboat as such, including navigation, racing [sic!], docking, and taking on cargo and passengers, said to be the classical features of marine craft.

5. [16]

   I do not agree with either of these submissions. To start with, the fact that the houseboat was stationary with part of its hull upon a sandbank does not convert it from a watercraft to something else. A houseboat that is being transported by road to a new mooring remains a watercraft notwithstanding that it is nowhere near water but is being pulled on a trailer behind a vehicle along a road. Such an example, of course, draws attention to the “using or owning” limitation in the exclusion clause in question. I do not consider that a houseboat that is stationary in the estuarine waters of the Nambucca River ceases to be a watercraft simply because part of its structure happens temporarily to be in contact with the riverbed.

6. [17]

   Nor does it seem to me to be the case that the houseboat was not being used as such at the time of the incident. Of its very nature, the use of a houseboat contemplates recreational activities in and upon the adjacent waterways. The fact that Mr Tasker is said to have jumped or dived from the vessel in an attempt to save or rescue a fellow passenger who was in the water at the time does not detract from that fact. For example, it can hardly be thought that if the houseboat had been diverted from its course while cruising along the river in order to rescue someone in distress it would for that reason then have ceased to be a watercraft.

7. [18]

   NRMA submitted more generally that Mr Tasker could not succeed in establishing any liability on the part of their putative insured inasmuch as the gravamen of the pleaded case against him was an allegation, howsoever formulated, of a failure to warn of an obvious risk. NRMA submitted that the substance of Mr Tasker’s case was that Mr Munro failed to warn him of the danger of diving into potentially shallow water, whether that advice was to be given generally or only in relation to emergencies or both.

8. [19]

   Section 5F(1) of the Civil Liability Act 2002 defines an “obvious risk” to a person who suffers harm as “a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person.” This includes “risks that are patent or a matter of common knowledge”: s 5F(2). A risk can be obvious “even though it has a low probability of occurring” or “is not prominent, conspicuous or physically observable”: s 5F(3), (4). In negligence proceedings, a person who suffers harm is presumed to have been aware of an obvious risk unless they prove otherwise: s 5G(1). Moreover, a defendant “does not owe a duty of care to another person…to warn of an obvious risk”: s 5H(1).

9. [20]

   The concept of an obvious risk was considered in Wyong Shire Council v Vairy (2004) Aust Torts Report 81-754; [2004] NSWCA 247:

10. [21]

    The application of this principle depends on the factual context: Laoulach v Ibrahim [2011] NSWCA 402 at [120]. In that case, a passenger on board a sports cruiser vessel dived from its bow while it was moored in Botany Bay off Brighton-Le-Sands, striking his head on the sandy bottom and suffering severe injury. The vessel was moored only 50 to 60 metres from the shoreline, so that the risk of injury from diving in was obvious. This was so even though the risk appeared to be low because the water was dark blue and thus seemed deep enough: at [119].

11. [22]

    In the present case, Mr Tasker’s draft evidentiary statement describes the location of the houseboat leading up to the incident:

12. [23]

    NRMA submitted that in those circumstances it is “clear beyond argument” that a reasonable person in Mr Tasker’s position, who knew the sand banks shifted from time to time and that part of the houseboat was resting directly on a sand bank, would have realised the houseboat was, or could very well be, in shallow water, a matter expressly pleaded by him, and that diving into the water therefore carried a risk of injury. NRMA contended that any such risk was accordingly “obvious” within the meaning of s 5F(1) of the Civil Liability Act, and under s 5H(1) of that Act, Mr Munro had no duty to warn of it. Mr Tasker’s case, the substance of which being that there was a duty to warn of the risk of diving into the water, is therefore untenable. NRMA submitted that, in the absence of negligence, there is no arguable claim, not simply a defence to an otherwise arguable claim: see Motorcycling Events Group Australia Pty Ltd v Kelly (2013) 86 NSWLR 55; [2013] NSWCA 361 at [24], [44] and [87]-[88].

13. [24]

    Mr Tasker pleads in paragraph 5 of his proposed second amended statement of claim that he sustained his severe injuries when he “dived from the vessel” and “struck his head on the river bed”. He alleges that Mr Munro failed “to take reasonable care to implement reasonable precautions prior to departure of the vessel…so as to prevent the risk of [Mr Tasker] diving from the vessel at the anchorage, at any time, to perform a rescue in shallow water”. Mr Tasker’s pleading defines that circumstance as “the risk”.

14. [25]

    Whichever way one construes that allegation, having regard to Mr Tasker’s description of what occurred, it inevitably distils to a contention that Mr Munro should have taken steps to warn Mr Tasker not to dive into water of unknown depth. In the absence of some idiosyncratic factors that qualify that allegation or modify the facts that are said to give rise to it, Mr Tasker’s claim is one that Mr Munro failed to warn him of an obvious risk. As such, Mr Tasker’s claim against Mr Munro is untenable and unarguable.

15. [26]

    Mr Tasker submitted that one of the bases for establishing Mr Munro’s liability was that he breached his duty as the result of acts or omissions that occurred on premises from which Mr Munro conducted his sand extraction business. These acts or omissions are said to have occurred immediately prior to Mr Tasker boarding the houseboat. In that sense, Mr Munro’s alleged acts or omissions were at least physically connected with the business of sand extraction which was the business insured by Liberty. In its simplest configuration, Mr Tasker’s contention is that the alleged breach of duty was “connected” to Mr Munro’s “insured business” because the breach occurred there and accordingly the Liberty policy responds to the incident said to have arisen as the result of that breach.

16. [27]

    Once again, there is a distinction to be drawn between the breach of duty said to give rise to the cause of action against Mr Munro and the question of whether or not the Liberty policy responds to the incident that caused Mr Tasker’s injuries. Even assuming for the purposes of the argument that the houseboat was used by Mr Munro as an advertising vehicle for his business, on the basis that it was called Shiftin’ Sands, there is no reference in the policy Schedule or any other documents to suggest or to indicate that any business trading under the name “Shiftin’ Sands” was also covered under the policy. The Schedule of Insurance issued by the broker indicates that the business covered by the policy was “Sand Extraction – Sales/Distributing” without any indication that a business trading under any other name was covered under the policy.

17. [28]

    Liberty submitted in any event that the incident that resulted in Mr Tasker’s injuries could not as a matter of fact have had any connection with Mr Munro’s business of sand extraction, even if it could be argued that the houseboat was utilised by him as part of that business. At the time of the incident in question, the vessel was being used for recreational purposes. It was a recreational vessel. Even if the vessel had been used to carry advertising for a business operated by Mr Munro or depreciated as a business asset, of which there was either no evidence or no evidence that was not in contest, it was not being used for the purpose of Mr Munro’s sand extraction business at the relevant time.

18. [29]

    However, for presently relevant purposes, the factual question of whether the houseboat was in fact being used for a purpose arguably connected with Mr Munro’s business cannot be finally determined. It is potentially at least arguable that it was.

19. [30]

    The more fundamental difficulty for Mr Tasker on this application is that the Liberty policy in my view decisively excludes liability “directly or indirectly caused by, arising out of or in any way connected with…the ownership, …operation, possession or use by or on behalf of [Mr Munro] of any watercraft exceeding 10 metres in length”. For reasons that have already been given, I do not accept that the houseboat was not relevantly a watercraft. Accordingly, even putting aside a liability arising from “operation…or use”, Mr Munro’s asserted liability unquestionably arises from the “ownership” or “possession” of the houseboat by him or on his behalf. Indeed, Mr Tasker pleads in terms that Mr Munro was the “owner, occupier and/or controller of” the houseboat in question and that Mr Tasker was an invitee on the vessel during its “ownership, occupation and control” by him.

Conclusion

1. [31]

   It follows in my opinion that leave to proceed against both proposed defendants should be refused. Mr Tasker has no arguable case against Mr Munro as it is based upon an allegation of a failure to warn of an obvious risk: Mr Munro had no duty to do so. In the case of the NRMA policy, I consider that Mr Tasker has no arguable case that the policy responds to his claim, and that the watercaft exclusion applies in any event. In the case of the Liberty policy, I am not in a position on an application such as this to determine whether the policy responds but the exclusion relating to a watercraft exceeding 10 metres in length clearly applies in any event.

2. [32]

   In the circumstances, the notice of motion filed on 21 July 2020 should be dismissed with costs.