On 26 October 2023, the NSW Supreme Court of Appeal delivered its judgment in the matter of Farriss v Axford  NSWCA 255. The proceedings involved a negligence claim brought by founding INXS band member Tim Farris for injuries suffered to his left hand when it became caught in the electric anchoring mechanism of a boat he had chartered on 24 January 2015.
Timothy William Farriss chartered a boat owned by John and Jill Axford, through Church Point Charters and Shipping Pty Ltd (Church Point Charters) for the purpose of cruising around Pittwater over the Australia Day long weekend. Prior to taking the boat out, Church Point Charters provided Mr Farriss with an induction covering the boat’s features, including the electric anchoring system.
Relevantly, it instructed Mr Farriss about the need to keep hands, fingers, hair and clothing clear of the windlass during operation.
Mr Farris moored the boat in Akuna Bay. He then decided to raise the anchor and move the boat closer to the marina. He activated the “up” switch but had difficulties raising the anchor because the anchor chain kinked. The evidence established that at the time Mr Farris chartered the boat, the anchor chain had a propensity to “kink” or “jam” as it travelled over the gypsy and down through the spurling pipe.
In the process of attempting to unkink the chain, Mr Farris placed his left hand on the chain. The power unexpectedly activated while Mr Farriss’ hand was on the chain. His hand was pulled into the gypsy, severing his left ring finger.
Mr Farris alleged that the Axfords and Church Point Charters were negligent for failing to take reasonable precautions including the installation of a chain stripper and extension of the spurling pipe, and for failing to warn him of the risks associated with the use of the anchor. He also alleged that the Axfords and Church Point Charters were in breach of the statutory guarantees in sections 60 and 61 of the Australian Consumer Law (ACL) which require that a service be reasonably fit for purpose.
Montana Productions Pty Ltd, a company owned by Mr Farriss and his wife, claimed damages for economic loss consequent upon Mr Farriss’ injuries.
Cavanagh J found that the injuries to Mr Farriss’ hand occurred when Mr Farriss accidentally stood on the deck-mounted “up” switch. While he accepted that the addition of a chain stripper and additional spurling pipe would have prevented the chain from kinking or jamming, he was not satisfied that the risk of harm, examined prospectively, was such to require the Axfords and Church Point Charters to take those precautions.
In reaching this conclusion he noted that the anchor had previously been used without incident.
Cavanagh J noted that there was no recommendation by the persons who serviced the boat that the additional components be installed. He also noted that Mr Farris had been made aware of the risks associated with the use of the anchor during the induction. It was found that while the risk of harm was foreseeable and not insignificant, the probability that harm would occur if precautions were not taken was low.
Cavanagh J did not make findings in respect to the ACL claim, as that part of the claim had been abandoned.
Cavanagh J assessed Mr Farriss’ damages to be $622,000 and Montana Productions’ to be $40,000.
Mr Farriss and Montana Productions (the appellants) appealed the decision of Cavanagh J. The 3 principal issues of the appeal were as follows:
1. Whether the Axfords and Church Point Charters (the respondents) had breached their duty of care by failing to take reasonable precautions, namely, the installation of a chain stripper and extension of the spurling pipe (first issue);
2. Whether the respondents breached their duty of care by failing to warn Mr Farriss of risks associated with use of the anchor prior to his departing on the boat (second issue); and
3. Whether the appellants should be permitted to revive an abandoned claim that the respondents breached the statutory guarantee owed to Mr Farriss under section 61(1) of the ACL (third issue).
The respondents issued a cross-appeal in relation to Cavanagh J’s notional assessment of damages, contending that it be reduced to $284,000 for Mr Farriss and no damages to Montana Productions.
The Court of Appeal dismissed the appeal and cross-appeal in their entirety and ordered the appellants to pay the respondents’ costs.
The Court of Appeal confirmed the decision of Cavanagh J: that the respondents had not breached their duty of care.
It found that provided contact with the chain was made while the power was off, the risk of harm was low, to the point of being insignificant. It found that the precautions that a reasonable person would have taken did not extend to the installation of an extension to the spurling pipe or a chain stripper.
The Court of Appeal rejected the appellants’ submissions that the absence of any prior incidents was of little probative value, observing that the submission overlooked evidence that the mechanism was subject to routine surveyance and inspection. The Court also found that the respondents were entitled to rely on the absence of any recommendation by any person who had inspected or serviced the boat for any adjustment to the anchor mechanism.
Additionally, the Court rejected the appellants’ submission that it was not possible for Mr Farriss to follow the warning to keep clear of the windlass because it was necessary for him to manually handle the anchor chain due to the defect.
The Court of Appeal said it was entirely possible for Mr Farriss to comply with that direction by only adjusting the anchor chain when the windlass was not in operation. It confirmed that the windlass was in operation at the time of the Incident because Mr Farriss had inadvertently stepped on the deck mounted switch.
The appellants submitted that Cavanagh J erred in failing to consider whether Mr Farriss was aware of the defect in the anchor chain at the time of the hire.
The Court of Appeal said the premise of the submission was that Mr Farriss would not have chartered the boat had he been aware of the propensity of the anchor to kink prior to the charter.
It found that the evidence did not support a conclusion that Mr Farriss, who presented himself as a person who was experienced with boats, would not have chartered the boat had he known about the defect, which could be resolved with care and minimal effort.
Accordingly, the Court of Appeal found that the respondents had not breached their duty of care by not warning Mr Farriss of risks associated with use of the anchor prior to his hiring of the boat.
The appellants’ counsel conceded that Cavanagh J would have properly understood the claim under section 61 of the ACL to have been abandoned. He submitted that the abandonment should not preclude him from agitating the point on appeal, particularly in circumstances where there was no prejudice to the respondents.
The Court of Appeal found that where counsel made a strategic decision at trial to abandon that claim, the appellants should not be permitted to reagitate that claim on appeal. In formulating this view, the Court noted the importance accorded to the finality of litigation. It also confirmed that a party is bound by the conduct of its case at first instance.
The Court also found that the absence of prejudice was not sufficient to outweigh the prejudice to the administration of justice in permitting the appellants to traverse the strategic decision that they made during the trial.
The Court held that even if the ACL claim was permitted to be reagitated on appeal, the fact that the anchor did not work precisely as intended did not mean the boat was not reasonably fit to be chartered. Accordingly, the ACL claim would have failed.
The decision in Farriss v Axford  NSWCA 255 is important for defendants and insurers as it confirms that the duty is to take reasonable precautions against the risk of harm, not to take every precaution. What is reasonable depends on the facts of each case.
The decision is also a reminder of the relevance of the principles in section 5C of the Civil Liability Act 2002, including the probability that harm would occur if care was not taken. This was a factor in the decision that the respondents did not fail to take reasonable precautions against the risk of harm.
The decision also demonstrates the relevance and utility of obtaining evidence of prior complaints or incidents (or lack thereof) and recommendations from maintenance or service technicians for adjustments or repairs required. This evidence was significant in determining the probability of the risk of harm occurring and the reasonableness of the precautions taken by the respondents.
Additionally, the decision reminds all litigating parties of the importance of considering strategic decisions made during the trial – and that a party is bound by the conduct of the case at first instance.
If you have a query relating to any of the information in this case note or would like to discuss a similar matter of your own, please don’t hesitate to get in touch with Insurance Principal Nicole Oglesby today.
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