Payne trading as Sussex Inlet Pontoons v Liccardy

Court of Appeal (NSW)|2023-02-09|Before: Brereton JA, Beech-Jones JA

Background

Except as stated, the following facts are either common ground or the subject of findings of fact that are not challenged on appeal.
Sometime during the morning of 25 January 2020, Mr Liccardy was one of a group of 10 young men who boarded the boat for a social outing at Sussex Inlet. The group had hired the boat from Mr Payne. Part of the hire arrangements include the provision by Mr Payne of a "suitably skilled master", which in this case was Mr Allred. [10]

The Primary Judgment

The relevant factual findings of the primary judge have already been summarised. Leaving aside the dismissal of the claim under the Australian Consumer Law, the balance of the primary judgement can be summarised in seven points. Only the findings in respect of contributory negligence and intoxication are the subject of complaint on appeal.
First, his Honour found that Mr Payne was vicariously liable for any of Mr Allred's "acts, neglects, and defaults" that led to Mr Liccardy's injury. [22]
Second, the primary judge found that Mr Payne and Mr Allred each owed Mr Liccardy a duty of care [23] and identified the relevant "risk of harm" as being that "if a person in the water came into contact with the moving propeller of a motorised vessel, injury from the propeller might occur". [24]
Third, his Honour rejected a defence contending that Mr Allred had voluntarily assumed the risk that eventuated. [25]
Fourth, the primary judge found that Mr Allred was negligent and that his negligence was causative of Mr Liccardy's injury. Although his Honour identified numerous "precautions" Mr Allred should have taken against the risk of harm (CL Act, s 5B(1)(c)), [26] one specific precaution was found to be causative of Mr Liccardy's injury, namely, Mr Allred's failure to "appropriately position… the vessel in juxtaposition to [Mr Liccardy] on the starboard side and then turn off the engine to de-activate the propeller". [27]
Fifth, his Honour addressed and rejected a contention that Mr Liccardy was contributorily negligent, [28] had assumed an "obvious risk" within the meaning of s 5F of the CL Act or was engaged in a dangerous recreational activity. [29]
Given the terms of s 50(3) of the CL Act, it is puzzling the primary judge addressed contributory negligence before the intoxication provisions. Leaving that aside, it suffices to note that the particulars of contributory negligence included voluntarily diving overboard, swimming near a propeller and swimming while intoxicated. [30] In this Court, Senior Counsel for Mr Payne, Mr Polin SC, eschewed any reliance on the suggestion that in diving overboard Mr Liccardy failed to take reasonable care for his own safety.
Sixth, and of most significance to this appeal, the primary judge then addressed and rejected so much of the defences that relied on s 50 of the CL Act. Section 50 provides: "50 No recovery where person intoxicated (1) This section applies when it is established that the person whose death, injury or damage is the subject of proceedings for the recovery of damages was at the time of the act or omission that caused the death, injury or damage intoxicated to the extent that the person's capacity to exercise reasonable care and skill was impaired. (2) A court is not to award damages in respect of liability to which this Part applies unless satisfied that the death, injury or damage to property (or some other injury or damage to property) is likely to have occurred even if the person had not been intoxicated. (3) If the court is satisfied that the death, injury or damage to property (or some other injury or damage to property) is likely to have occurred even if the person had not been intoxicated, it is to be presumed that the person was contributorily negligent unless the court is satisfied that the person's intoxication did not contribute in any way to the cause of the death, injury or damage. (4) When there is a presumption of contributory negligence, the court must assess damages on the basis that the damages to which the person would be entitled in the absence of contributory negligence are to be reduced on account of contributory negligence by 25% or a greater percentage determined by the court to be appropriate in the circumstances of the case. (5) This section does not apply in a case where the court is satisfied that the intoxication was not self-induced."
Section 48 of the CL Act provides that a "reference in this Part to a person being intoxicated is a reference to a person being under the influence of alcohol or a drug (whether or not taken for a medicinal purpose and whether or not lawfully taken)."
In addressing s 50, his Honour noted the evidence established that Mr Liccardy was "under the influence of alcohol and cocaine at the time of his injury". [31] His Honour then set out the statutory provisions and found as follows: "216. In my opinion, the plaintiff's injury could have occurred even if he was not intoxicated: s 50(2) of the CL Act. That is so because it was the second defendant's action in positioning the vessel near the plaintiff and leaving the engine and the propellor to operate in reverse which had the effect of disguising the water turbulence from the turning propellor that injured the plaintiff. 217. In my opinion, for the reasons identified in the preceding paragraph, the plaintiff's intoxication did not contribute to his injury: s 50(3) of the CL Act. 218. Whilst the pharmacological evidence of Dr Robertson raises the possibility of the plaintiff's impairment and the consumption of alcohol, in my opinion that evidence falls well short of establishing that the plaintiff was intoxicated to the extent that his capacity to exercise reasonable care and skill was impaired: s 50(1) of the CL Act. 219. That finding is supported by the fact that the plaintiff was able to successfully dive in the water and retrieve the hat without difficulty, and then swim to the vessel and climb aboard by using the ladder at the stern. Nothing in those events bespeaks any impairment due to intoxication on his part. On the evidence, it is not necessary to try to calculate the plaintiff's blood alcohol content using the different parameters adopted in the submissions of the parties. The fact he was injured by the rotating propeller was due to his unawareness the engine was engaged, which meant that the propeller was turning under power. Therefore, subsections (4) and (5) of s 50 of the CL Act do not apply in this case. Accordingly, I reject the claimed defence of intoxication." (emphasis added)
Seventh, the primary judge assessed Mr Liccardy's damages in the sum of $464,773.25. [32]

Challenge to Primary Findings of Fact

Mr Payne filed a statement pursuant to r 51.36(2) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") specifying the findings of the primary judge that are challenged. Two of the challenged findings concern his Honour's approach to intoxication, which will be addressed next. One of the other challenged findings is the finding that, before Mr Liccardy jumped from the vessel, he advised Mr Allred of his intention to do so. Mr Payne also challenges a related finding that it was "understandable" that Mr Tooth had said he could not recall hearing Mr Liccardy say anything to Mr Allred before diving into the water "given that the group was partying and playing loud music on board and having regard to the windy conditions that prevailed". [33]
At the hearing of the appeal, Mr Polin was ambivalent about whether these challenges was pressed. In any event, I do not consider they have any substance. Mr Liccardy gave evidence before the primary judge to the effect that he informed Mr Allred of his intention to dive into the water. Mr Allred did not give evidence, although a transcript of his evidence in a prosecution arising out the incident was tendered. In that transcript, he denied having any such conversation with Mr Liccardy or "anybody whatsoever". The other evidence given on the topic was from Mr Tooth and what could be discerned about the volume of the music on the boat from viewing the video recording. In his witness statement, Mr Tooth said he did not hear or see Mr Liccardy have a conversation with Mr Allred before the dive. He also said that he "could hear the music which was not too loud due to the wind … before [Mr Liccardy] exited the vessel … [but you] could clearly hear a conversation between people on the boat". [34] In his oral evidence before the primary judge, Mr Tooth said he was approximately three metres away from Mr Liccardy and did not hear him say anything to anyone, including Mr Allred, prior to jumping in the water.
The primary judge described Mr Liccardy as a "credible witness" and "accepted his evidence in its entirety." The primary judge also found Mr Tooth to be a credible witness but reasoned it was "understandable" that Mr Tooth did not hear the conversation because the group was partying, playing loud music and "having regard to the windy conditions that prevailed".
The primary judge had a distinct advantage over this Court in assessing the oral evidence of Mr Liccardy and Mr Tooth. There was nothing glaringly improbable, contrary to incontrovertible facts or compelling inferences in Mr Liccardy's evidence (Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479; [1993] HCA 78). In the case of Mr Tooth, the relevant part of his evidence that was discounted was his supposition that, if a conversation had occurred, he would have heard it. His Honour's approach did not involve a rejection of the credibility of Mr Tooth's evidence, but rather a non-acceptance of his surmise about whether he would have heard a conversation between Mr Liccardy and Mr Allred. I do not discern any error in his Honour's approach.
I would reject these challenges.
Mr Payne's statement under r 51.36(2) UCPR and written submissions also challenged the primary judge's finding that, as Mr Liccardy approached the stern of the boat, he could not hear its engine running and assumed that the motor had been switched off. However, in oral submissions Mr Polin did not press this challenge. To the contrary, he embraced this finding as suggesting Mr Liccardy was intoxicated at the time he was swimming towards the ladder at the stern of the boat. Mr Polin noted that in cross‑examination Mr Liccardy said he could not hear the engine but when asked, "[s]o far as you were concerned, the engine could be on or the engine could be off", he replied, "[i]t could have been, yes." Mr Polin noted the evidence was given when Mr Liccardy was sober and submitted that "because of his intoxication … he has assumed that that engine was off, and that's a mistake he made, because the engine was never off". This submission is addressed below.
At the hearing of the appeal, Mr Liccardy was granted leave to file and rely on a notice of contention in the following terms: "1 The Primary Judge should have found the Master of the vessel manoeuvred the vessel so that the First Respondent would have to re-join the vessel by steps provided beside the motor. 2 His Honour should have found the Master of the vessel was almost immediately aware of the fact of the First Respondent having entered the water."
Neither the written submissions filed on behalf of Mr Liccardy nor the oral submissions addressed the notice of contention. I cannot discern how either of the points raised in the notice of contention adds anything to the primary judge's substantive findings. The effect of the primary judge's findings was that Mr Allred was immediately aware that Mr Liccardy had jumped in the water because Mr Liccardy told him he would do that and that, due to a negligent manouevre by Mr Allred, Mr Liccardy had to swim around the propeller to climb the ladder on the stern of the boat.

Grounds of Appeal

Mr Payne's grounds of appeal are: "1. The primary judge erred in failing to find that the First Respondent had been guilty of contributory negligence. 2. The primary judge erred in rejecting the Appellant's defence in relation to intoxication under section 50 of the Civil Liability Act 2002."
In oral submissions, Mr Polin confirmed that, even if this Court did not conclude that s 50 of the CL Act was engaged, ground 1 was nevertheless pressed in respect of the failure of Mr Liccardy to approach the ladder from the outer side (i.e. starboard side) of the boat rather than the engine side. As I consider s 50 to be engaged, it is not necessary to consider this further.

Section 50 of the CL Act

Section 50 is set out above (at [22]). The first step in applying the provision is to determine whether the alleged wrongdoer has established that, at the time of the act or omission that caused the death, injury or damage, the relevant person was "intoxicated to the extent that the person's capacity to exercise reasonable care and skill was impaired". In Amanda's On the Edge Pty Ltd v Dries [2011] NSWCA 358 ("Amanda's on the Edge"), Allsop P (with whom Beazley and Giles JJA agreed) observed that whether a person is intoxicated to the relevant extent is dependent "on the circumstances and the subject or subjects in respect of which the reasonable care and skill may be impaired" (at [36]). Hence, the consumption of a small amount of alcohol may be sufficient to render a person intoxicated for the task of operating machinery, flying a plane or driving a car (ibid). In Amanda's On the Edge, a guest at a restaurant who walked through a garden bed and fell over an unguarded wall was not found to be relevantly intoxicated. The guest had drunk "five to six beers and one to two bourbons" during a wedding reception (at [34]). Allsop P characterised the care and skill required of the guest as being that which is necessary to "walk… over open ground to get to a destination" (at [36]).
If the alleged wrongdoer satisfies s 50(1), the party seeking damages must demonstrate that the death, injury or damage is likely to have occurred even if the relevant person had not been intoxicated (s 50(2)). If that onus is discharged, it is nevertheless presumed that the relevant person was contributorily negligent unless the party seeking damages also demonstrates that the person's intoxication did not contribute in any way to the cause of the death, injury or damage (s 50(3)).
It is something of an understatement to state that ss 50(2) and 50(3) are not easily reconciled. In Jackson v Lithgow City Council [2008] NSWCA 312; [2008] Aust Torts Reports 81-981 at [103], Allsop P (with whom Basten JA and Grove J agreed) adverted to the interaction between the two provisions as follows: "The relationship between sub-s 50(2) and (3) is not entirely clear, but can be seen to contrast or juxtapose the likelihood of the injury etc occurring to a non-intoxicated person and proving that intoxication played no part in the cause of the injury etc. It was expressed as follows in the Second Reading Speech of the then Premier in the Legislative Assembly on 23 October 2002: The bill will clamp down on plaintiffs who are injured while they are intoxicated. A defendant will not owe a plaintiff a higher standard of care simply because the plaintiff was intoxicated. Nor will personal injury damages be available for an intoxicated person unless the accident was likely to have occurred even if the person had not been intoxicated. If the accident is likely to have occurred anyway, the intoxicated person's damages will be reduced on a presumption of contributory negligence of 25 per cent, or more if appropriate, unless the person's intoxication played no part in the accident." (emphasis added)
In State of New South Wales v Ouhammi (2019) 101 NSWLR 160; [2019] NSWCA 225 ("Ouhammi"), the respondent was arrested while heavily intoxicated and placed in a holding cell. A police officer opened the door to the cell slightly and called to the respondent. The respondent rolled off a bench he was lying on and took a step towards the door. The police officer closed the door. The respondent's thumb was caught in the door and was partially severed. A majority of this Court held that the police officer was not negligent in closing the door (Basten and Simpson JJA; Brereton JA dissenting). However, each of Basten and Brereton JJA also addressed the application of s 50 of the CL Act.
Basten JA found that, if the test posed by s 50(2) was the "balance of probabilities standard", then the respondent had not discharged the onus and no award of damages could be made (at [40]). However, his Honour also found that, if "a lower standard should be applied", then "it is possible that s 50(2) was not engaged" and "any damages would need to be reduced by 25%" (at [41]).
Brereton JA referred to the above passage from the judgment of Allsop P in Jackson and added (at [126]): "It is plain from s 50(3) that the section contemplates circumstances in which the Court will on the one hand (for the purposes of s 50(3)) not be satisfied that the person's intoxication did not contribute in any way to the cause of the injury, yet will be satisfied (for the purposes of s 50(2)) that the injury (or some other injury) is likely to have occurred even if the person had not been intoxicated. In my view, s 50(2) contemplates a situation where the defendant's act or omission is a sufficient cause of the accident, independently of the plaintiff's intoxication, while s 50(3) catches the situation in which, although the defendant's act or omission was itself a sufficient cause of the accident, it is not established that the plaintiff's intoxication did not also contribute to it."
Brereton JA reached a different conclusion to Basten JA in relation to s 50(2) but accepted that a reduction of 25% was required by the operation of s 50(3) (at [127]−[128]).
Earlier in discussing the application of s 50 Brereton JA observed (at [123]): "Again, in one sense, it is clear that the injury would not have occurred if the respondent were not intoxicated, because but for his intoxication he would never have been arrested and would not have been in the police station, let alone in the dock. Again, however, that is not what the Act means: as s 50(1) makes clear, it directs attention to the act or omission that caused the injury, being the direct (or proximate) cause of the injury, and so is concerned with the effect of intoxication at the time of the act or omission that caused the injury, rather than antecedent intoxication which may have resulted in the plaintiff being in the circumstances in which the injury occurred. Here, the relevant act was the act of [the police officer] in closing the door." (citation omitted)
Although Basten JA reached a different conclusion in relation to the application of s 50, his Honour's approach was consistent with this statement in that his Honour did not conclude that s 50(2) was satisfied merely because, but for the respondent's intoxication, he would not have been in the prison cell in the first place. This aspect of Ouhammi is consistent with so much of the approach to causation at common law which treats a "factor which secures the presence of the plaintiff at the place where and at the time when he or she is injured [as] not causally connected with the injury, unless the risk of the accident occurring at that time [or place] was greater" (March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 at 516; [1991] HCA 12, per Mason CJ, citing Hart and Honoré, Causation in the Law, 2nd ed. (1985) at 122).
At the hearing of the appeal two issues concerning the proper construction of s 50(2) were adverted to but not fully explored.
The first is whether "likely" in s 50(2) means, on the one hand, more probable than not, or only a real or not remote chance, on the other (see Boughey v The Queen (1986) 161 CLR 10 at 21; [1986] HCA 29; Minister Administering the Crown Lands Act v Deerubbin Local Aboriginal Land Council (No 2) (2001) 50 NSWLR 665; [2001] NSWCA 28 at [51]−[52]; Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 27 ALR 367 at 380). I understand that it was this distinction that was adverted to by Basten JA in Ouhammi (see [47]). The adoption of a real chance test would serve to reduce the obvious tension between ss 50(2) and 50(3). It would also mean that s 50(4) might operate more consistently with s 5R of the CL Act and s 9 of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW) (the "Law Reform Act") in that a finding that it is more probable than not the injury would have occurred even if the injured person was not intoxicated would appear to preclude a reduction greater than 50% under s 50(4), whereas both s 5R of the CL Act and s 9 of the Law Reform Act contemplate the possibility of such a reduction. However, in the absence of proper argument, it is not appropriate to consider this further. Without deciding the issue, I will adopt the parties' assumption that the appropriate test is the balance of probabilities.
The second issue is whether a consideration of the counterfactual under which the relevant person is not intoxicated is undertaken by considering a reasonable person in the relevant person's circumstances with some of their characteristics, such as a disability, or is purely subjective. On the latter approach, someone who is prone to being reckless even when sober would be more likely to satsify s 50(2) rather than someone who is cautious when sober. Again, in the absence of proper argument, it is not appropriate to consider this further. Without deciding the issue, I will adopt the parties' assumption that the appropriate test is an objective one.
In the event that the party seeking damages satisfies the test in s 50(2) and demonstrates that the relevant person's intoxication did not contribute in any way to the cause of death, injury or damage (s 50(3)) then s 50 has no further role to play. In that event, any allegation of contributory negligence falls to be resolved by applying the balance of the provisions of the CL Act and s 9 of the Law Reform Act. If the party seeking damages satisfies s 50(2) but does not satisfy s 50(3), then it is assumed there is a reduction on account of contributory negligence of at least 25%, but that reduction may increase if it is "determined by the court to be appropriate in the circumstances of the case" (s 50(4)). It follows from these provisions that, in any case where there is an issue about intoxication and an allegation of contributory negiligence, the Court must first determine whether s 50 of the CL Act is engaged.

Subsection 50(1): Intoxication

In [218] of the primary judgment, his Honour found that Mr Liccardy was not intoxicated to the extent that his capacity to exercise reasonable care and skill was impaired. The basis for that finding is, or at least appears to be, set out in [219] of the primary judgment in that his Honour noted that Mr Liccardy "was able to successfully dive in the water and retrieve the hat without difficulty, and then swim to the vessel and climb aboard by using the ladder at the stern". In so reasoning, his Honour appears to have restricted the analysis to only considering the impairment of Mr Liccardy's physical functioning due to his consumption of alcohol and cocaine. The primary judge did not consider any impairment of his decision-making faculties. Hence, earlier in the judgment when separately addressing contributory negligence, his Honour noted that "[o]n the expert evidence … there is little room for doubt that the plaintiff's intake of alcohol, if not also cocaine, was influential in his judgment and in his instinctive or impulsive reaction to dive into the water to retrieve the hat (emphasis added)." [35] Depending on the activity engaged in, an impairment of "judgment" may be sufficient to satisfy s 50(1). In this case, his Honour erred in limiting his analysis to simply considering Mr Liccardy's physical capacity to swim.
In relation to the evidence of intoxication, his Honour found that Mr Liccardy "had consumed a meal at about 11.00am on [20 January 2020] … consumed his first can of full strength beer by about 11.30am" and "[b]y about 2.15pm he had consumed 4 cans of [full strength] beer, and he had partly consumed a fifth can, along with 2 lines of cocaine", with the "second line of cocaine [consumed] about 30 to 40 minutes before the accident". [36]
His Honour described the effect of the evidence concerning the effect of this consumption on Mr Liccardy as follows: [37] "The unchallenged expert evidence was that, having regard to the plaintiff's height, weight, body mass index and assumed alcohol intake, and having regard to the time of the accident, his blood alcohol content could have been in the range of between 0.05 to 0.11 grams of alcohol per 100ml of blood… The unchallenged expert evidence was that the plaintiff's ingestion of cocaine would not have impaired his co-ordination… and that a blood alcohol content at the lower end of the range identified above would not have impaired his co-ordination."
The "unchallenged expert evidence" referred to in this extract was a report from an expert pharmacologist and forensic toxicologist, Dr Michael Robertson. His report was tendered on behalf of Mr Payne. Dr Robertson was not cross‑examined. However, with respect to the primary judge, these passages do not reflect the effect of Dr Robertson's (unchallenged) evidence. Dr Robertson did not state that Mr Liccardy's blood alcohol reading "could have been in the range of between 0.5% and 0.11%" (emphasis added). Instead, Dr Robertson stated that, if Mr Liccardy had consumed full strength beer, then his "likely blood alcohol concentration at the time of the incident would have been approximately 0.11%" but if had he "only consumed light beer, [then his] estimated [blood alcohol concentration] at the time of the incident would have been approximately 0.05%". His Honour found that Mr Liccardy had consumed full strength beer and thus the relevant blood alcohol concentration level was 0.11%.
As for the effect of the blood alcohol concentration and cocaine consumption, Dr Robertson stated: "The effect of cocaine alone would likely result in improved mood, confidence, and risk-taking behaviour. It is therefore likely that Mr Liccardy had an impaired ability to exercise reasonable care; however, cocaine does not impair coordination, and as such would not necessarily have impaired Mr Liccardy's skill. …. When assuming Mr Liccardy had a blood alcohol concentration of 0.05% or more, it is likely that the consumption of alcohol has resulted in alcohol-related effects such as: mild euphoria, increased confidence and risk-taking behaviour, and an associated reduction in care and caution. If Mr Liccardy's [blood alcohol concentration] was closer to 0.11% it is likely that some amount of muscle incoordination was present, impairing his coordination and skill. The magnitude of impairment is uncertain. When combined, the effects of alcohol are enhanced by the presence of cocaine; therefore, the effect of alcohol and cocaine would likely result in improved mood, improved confidence, and risk-taking behaviour. It is therefore likely that Mr Liccardy had an impaired ability to exercise reasonable care; however, cocaine does not impair coordination, and depending on the [blood alcohol concentration] of Mr Liccardy, the combination may or may not have impaired coordination and skill."
In addressing whether s 50(1) of the CL Act was satisfied, this Court should act on the basis that these passages accurately describe the effect of the cocaine and full-strength beer consumed by Mr Liccardy, particularly on his "mood", "confidence", preparedness to engage in "risk-taking behaviour" and judgement generally. It follows from Amanda's On the Edge that, whether or not this meant s 50(1) was satisfied depends "on the circumstances and the subject or subjects in respect of which the reasonable care and skill may be impaired" (at [36]). In this Court, Mr Polin disclaimed any suggestion that s 50(1) was to be applied by reference to the time at which Mr Liccardy dived into the water. Instead, for the purposes of applying s 50(1), the relevant act of Mr Allred was those acts that effectively required Mr Liccardy to swim in or near the hazard zone and climb the stairs at the stern of the boat. It follows that whether Mr Liccardy was intoxicated for the purposes of s 50(1) is to be answered by reference to that time and that activity.
Senior Counsel for Mr Liccardy, Mr Sheldon SC, sought to introduce a causal test into s 50(1) such that it is not engaged if the proximate cause of Mr Liccardy's injury was Mr Allred's actions. I disagree. That is a form of analysis closer to that required by s 50(2). The present issue concerns Mr Liccardy's intoxication "at the time" of Mr Allred's acts. Further, the assessment concerns Mr Liccardy's "capacity" to exercise reasonable care and skill, not whether he did in fact exercise reasonable care and skill.
Mr Sheldon also submitted that Mr Liccardy's swimming was not materially different to the conduct of the restaurant guest walking through the garden in Amanda's On the Edge or the prisoner sitting in the cell in Ouhammi. I disagree. Swimming towards the stern of a boat with a propeller motor in order to climb a ladder requires the exercise of a reasonable level of judgment about one's own safety, including about matters such as the strength of any wind or current, the motion of the boat, the state of the engine and where to swim to avoid risk while still climbing on board. The unchallenged evidence established that Mr Liccardy's capacity to exercise reasonable care and skill in that context was impaired due to his drug and alcohol consumption. It follows that s50(1) was satisfied and s 50 was engaged.

Subsection 50(2) and (3): Likely to have occurred without intoxication

In [216] of the primary judgment, his Honour concluded that, because Mr Liccardy's injury "could have occurred even if he was not intoxicated", s 50(2) was satisfied. If the proper test under s 50(2) involves an assessment of whether it was more probable than not that the death, injury of damage would have occurred even if the relevant person was not intoxicated then his Honour erred in only addressing whether the injury "could" have occurred if Mr Liccardy was not intoxicated. If the proper test is whether there was a real and not remote chance that the death, injury or damage would have occurred if the relevant person was not intoxicated then the primary judge's reference to "could" might still be an error if that was meant to be a reference to only a bare possibility. However, even if the correct test is whether it is more probable than not that the death, injury or damage would have occurred if the relevant person was not intoxicated, then I consider that s 50(2) was satisfied.
Mr Polin accepted that the relevant inquiry under s 50(2) is not whether Mr Liccardy or a person in his circumstances would have jumped from the boat into the water if he was not intoxicated. Instead, he accepted that the inquiry required by s 50(2) involves considering someone who is not intoxicated swimming towards the stern of the boat to climb the ladder. On the primary judge's findings, the fact that Mr Liccardy had to swim from the port side of the boat towards a ladder on the starboard side of the boat was a consequence of Mr Allred's negligence. His Honour also found that Mr Liccardy could not hear the engine running nor see any turbulence because the engine was in reverse gear and had subsequently been "misled into believing that the propeller was disengaged, and was not operating under motive power when he entered the hazard zone". As noted, Mr Polin contended that Mr Liccardy's belief that the engine was not operating was affected by his intoxication and pointed to a concession made by Mr Liccardy in cross‑examination that he "could" have swum to the ladder by leaving a sufficient distance behind the engine as he passed behind the boat.
Even so, on balance I am satisfied that, if someone in Mr Liccardy's position was not intoxicated, they would still have passed near the engine and been struck by the propeller. The lack of turbulence would have given a swimmer confidence that the engine did not pose a danger. Further, in his evidence, Mr Liccardy said that his conclusion that the engine was turned off was also informed by the fact that he could not hear the engine over the music and that the boat was not moving ("[t]he boat was barely moving, so, I didn't think that the motor was going"). Otherwise, Mr Liccardy's concession in evidence that he could have swum to the ladder by leaving a sufficient distance behind the engine as he passed behind the boat was given with the benefit of hindsight. There is a difference between counterfactual reasoning and hindsight reasoning.
Based on the primary judge's findings of fact, I am satisfied it is more probable than not that Mr Liccardy's injury would have occurred even if he had not been intoxicated (s 50(2)). However, my level of confidence in this conclusion is not such that I can be satisfied that Mr Liccardy's intoxication did not contribute in any way to the cause of his injury as someone who was not intoxicated may well have swum further away from the motor.
Accordingly, Mr Liccardy has satisfied s 50(2) but not s 50(3).

Subsection 50(4): Reduction for Contributory Negligence

It follows that the damages awarded to Mr Liccardy must be reduced by 25% or a greater percentage if determined by the Court to be appropriate in the circumstances of the case. The relevant assessment is undertaken in the context of the above finding under s 50(2), Mr Liccardy's actions in being intoxicated and swimming too close to the engine, his belief the engine was off and the fact that it was Mr Allred's negligent act that required him to approach the ladder from the direction he did. In all of those circumstances, I consider a reduction of 30% to be appropriate.

Proposed Orders

It follows that I propose that the appeal be allowed and that orders be made providing for a reduction in the judgment sum by 30%. As interest will have accrued since the time of judgment, the parties should agree the appropriate orders or, if unable to do so, file proposed orders on the assumption that final orders will be entered on 19 May 2023. The proposed orders and the short submissions accompanying them should address costs. The costs order at first instance appears to reflect the effect of an offer of compromise which might be affected by the outcome of this appeal. The Court will deal with costs and the form of any final orders on the papers. Lastly, I note that the proposed orders should address the matter noted in [11].
Accordingly, I propose the following orders: (1) On or before 5 May 2023, each party file and serve agreed orders, or failing agreement, competing draft orders and submissions in support, including as to costs, which are not to exceed five pages.
BASTEN AJA: I agree with the orders proposed by Beech-Jones JA and, subject to what follows, with the reasons for those orders. The only qualification concerns the construction of s 50 of the Civil Liability Act 2002 (NSW), which is not determinative of this proceeding.
It has been said that the relationship between subs 50(2) and (3) is not entirely clear. [38] In particular, a question has been raised as to the test of likelihood contained in s 50(2).
There is a tendency to look for a degree of legal precision in language which is not readily amenable to such an approach. The risk in the search for synonyms or adverbs which may qualify the statutory language is that an approach which works in one case may not work in another. That is for two reasons.
First, Pt 6 of the Civil Liability Act deals with a factual circumstance, "intoxication", which has legal significance in a range of circumstances. The term "intoxicated" is defined to refer to a person being "under the influence of alcohol or a drug". In dealing with the possible effect of a person's intoxication on the duty and standard of care owed by another, the legislation refers to the person's "capacity to exercise reasonable care and skill [being] impaired as a result of being intoxicated": s 49(1)(a). Similarly, in relation to a claim by an intoxicated person there is a prohibition on recovery of damages where the person was "intoxicated to the extent that the person's capacity to exercise reasonable care and skill was impaired": s 50(1). These expressions relevantly give content to the phrase "under the influence of alcohol or a drug", which has otherwise been the subject of judicial consideration. [39]
Secondly, while it is clear that intoxication, or possible intoxication, may be relevant to questions of causation, it is not inherently an element of contributory negligence. So much is recognised by the possibility acknowledged in s 50(3) that the person's intoxication "did not contribute in any way to the cause of the … injury".
Bearing these considerations in mind, it is important not to limit the meaning of the statutory language. That is true with respect to each of the elements in s 50. First, although the heading "[n]o recovery where person intoxicated" might be relied upon in some circumstances (although not part of the Act [40] ), it clearly relates to subs (1), and not to the rest of the section.
Further, s 50(1) provides as follows: "(1) This section applies when it is established that the person whose death, injury or damage is the subject of proceedings for the recovery of damages was at the time of the act or omission that caused the death, injury or damage intoxicated to the extent that the person's capacity to exercise reasonable are and skill was impaired."
In Russell v Edwards [41] Ipp JA referred to the "ordinary meaning of the words in s 50(1), which require the determination of a single act or omission that 'caused the death, injury or damage'". [42] He then noted that there might well be separate acts causing injury, and that there would usually be acts of both the defendant and the injured plaintiff. He concluded that "[t]hese difficulties suggest that the legislature must have intended some other means of determining the single cause". [43] That led him to resort to insurance law to establish a single cause of loss by reliance on such concepts as "direct", "approximate" or "effective" cause.
In Russell, that analysis was at least available, because the "direct cause" of the injury was the plaintiff jumping into a shallow swimming pool. In other cases, including the present case, such an analysis is at best awkward. It is far from clear that the "ordinary meaning" of the statute requires departure from the terms of s 8(b) of the Interpretation Act 1987 (NSW), which provides that a reference to a word in the singular form includes a reference to the word in the plural form. While context may be relied upon to disapply s 8, in the present case, context strongly supports its application. The vast majority of cases involve an apportionment of responsibility between two parties. As explained in Podbrebersek v Australian Iron & Steel Pty Ltd: [44] "The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man … and of the relative importance of the acts of the parties in causing the damage …. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination." In an exercise primarily directed to apportioning responsibility, requiring a single act or omission as the cause of injury is an implausible reading of the provision.
Secondly, as with most statutes, general words can be constrained by purpose. Section 50(2) reads as follows: (2) A court is not to award damages in respect of liability to which this Part applies unless satisfied that the death, injury or damage to property (or some other injury or damage to property) is likely to have occurred even if the person had not been intoxicated.
In Wells v Council of the City of Orange (No 2), [45] Hoeben CJ at CL dismissed a defence relying upon s 50 with the following finding: "176 There is also a difficulty in relation to s 50(2). There were so many failures on the part of the plaintiff to take reasonable care for his own safety, apart from the ingestion of alcohol, that the strong likelihood is that the accident was likely to have occurred even if he had not consumed any alcohol."
That reasoning cannot be supported. Section 50(2) is a prohibition on an award of damages. It makes no sense to say that the prohibition is lifted if the plaintiff was so grossly at fault that intoxication made no difference. The preferrable construction starts with the finding of liability (that is negligence on the part of the defendant) and asks whether that negligence was likely to have caused the injury even if the plaintiff had not been intoxicated.
There has also been doubt raised as to the standard required by the term "likely to have occurred". There are three reasons not to adopt a standard of likelihood which engages a balancing of probabilities. The first is that subs (2), as has been noted, confers an immunity on the defendant. To impose on an injured party the burden of establishing a counterfactual situation at the level of probability in order to obtain any damages is a harsh outcome, not expressly supported by the statutory language. Subsection (2) provides a valuable defence to a negligent party, without reformulating it as creating an immunity "unless the plaintiff satisfies the court that it is more likely than not that the defendant's negligence would have led to the injury occurring", absent the plaintiff's intoxication.
Secondly, whilst it is true that the plaintiff must establish causation on the balance of probabilities, it is sufficient that the negligence materially contributes to the event. Subsection (2) engages with causation, but not so as to deny that principle.
Thirdly, as subs (3) demonstrates, there is no necessary relationship between intoxication and contributory negligence. Intoxication, as defined in s 50(1) can range from a minor level of impairment of capacity to exercise reasonable care and skill, up to a major impairment of that capacity. Section 50(2) does not take that range into account. Accordingly, it should not be taken to prohibit recovery where impairment is at the low end of the range.
Accepting that the term "likely" is not used in the strong sense of the balance of probabilities, it does not follow that some alternative meaning must be identified. In Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union, [46] Bowen CJ, in considering whether conduct was "likely to cause substantial loss" within the meaning of s 45D(1) of the Trade Practices Act 1974 (Cth) observed: "The circumstances to which s 45D may apply are so various that I hesitate to place a gloss on the section by preferring one meaning of 'likely' rather than another for the determination of this particular case. It is unnecessary to do so, because I have formed the view that whichever meaning is adopted the evidence leads me to the conclusion that the likelihood of substantial loss or damage has been established."
Evatt J agreed with the reasons of Bowen CJ. Deane J addressed the meaning of "likely" in the following terms: [47] "The word 'likely' can, in some contexts, mean 'probably' in a sense in which that word is commonly used by lawyers and laymen, that is to say more likely than not or more than a fifty per cent chance …. It can also, in an appropriate context, refer to a real or not remote chance or possibility regardless of whether it is less or more than fifty per cent."
Importantly, Deane J's alternative meaning did not identify something necessarily at a low level of likelihood, but rather a range from a low level to a probability.
While there is no reason to require that the likelihood of occurrence identified in s 50(2) is to be measured on the probabilities, following Bowen CJ, and given the wide variety of circumstances in which the provision could be invoked, there is merit in not assigning any gloss to the statutory term. It is, for example, common that negligent conduct will not result in harm to anyone. Section 50(2), however, is only engaged where negligence has in fact resulted in harm to the plaintiff. It would be arbitrary to apply it abstractly. Rather, it assumes that an injury has occurred and that the relevant causal connection has been established. In the present case, the trial judge said that the accident "could" have occurred even had the plaintiff not been intoxicated. While it may be said that that language is vague as to the state of the judge's satisfaction, it does not reveal error. Whether the injury was more likely than not to have occurred had the plaintiff not been intoxicated, that was not the test applied. Accordingly, the judge was correct to proceed to s 50(3).
The difficulty with subs (3) is that it moves from an assumption of impaired capacity to exercise reasonable care and skill for oneself, to a presumption of contributory negligence. However, it recognises the possibility that intoxication did not contribute in any way to the injury, in which case there is no presumption of contributory negligence. That is not, of course, to deny the possibility of a defence of contributory negligence being raised for other reasons.
Once the presumption is engaged, the degree of contributory negligence is quantified at a minimum level of 25%: s 50(4). At that stage, but only then, the court is required to return to Pt 1A Div 8 of the Civil Liability Act and, so far as still relevant, the general law principles identified in Podbrebersek, to determine whether that figure adequately reflects the proper apportionment of responsibility.

Endnotes

Below at [33]-[40].
Below at [56]-[63].
Below at [68].
(2019) 101 NSWLR 160; [2019] NSWCA 225 at [126] ("Ouhammi").
See below at [53].
Below at [84]-[86].
Below at [67].
Cf per Basten AJA, below at [92].
Liccardy v Daniel Payne t/as Sussex Inlet Pontoons Pty Ltd and Anor [2022] NSWDC 246; "Liccardy".
Liccardy at [4].
Liccardy at [18].
Liccardy at [21].
Liccardy at [20].
Liccardy at [23].
Liccardy at [25].
Liccardy at [19] and [126].
Liccardy at [44] and [92].
Liccardy at [22]. See Black 69.
Liccardy at [61].
Liccardy at [62].
Liccardy at [218].
Liccardy at [137].
Liccardy at [139]−[141].
Liccardy at [138].
Liccardy at [142]−[150].
Liccardy at [165].
Liccardy at [178].
Liccardy at [181]−[196].
Liccardy at [197]−[212].
Liccardy at [181].
Liccardy at [214].
Liccardy at [293].
Liccardy at [44].
Liccardy at [92]; Blue 8Q.
Liccardy at [189].
Liccardy at [13].
Liccardy at [14] to [15].
Jackson v Lithgow City Council [2008] NSWCA 312 at [103] (Allsop P, with whom Grove J and I agreed).
See Molloy v McDonald (1939) 56 WN (NSW) 159 (Bavin J); Government Insurance Office v Nowalinski (1985) 2 MVR 142 (Grove J).
See Interpretation Act 1987 (NSW), s 35(2).
(2006) 65 NSWLR 373; [2006] NSWCA 19.
Russell at [30].
Russell at [34].
(1985) 59 ALJR 492 at 494 (Gibb CJ, Mason, Wilson, Brennan and Deane JJ).
[2017] NSWSC 510.
(1979) 42 FLR 331; [1979] FCA 85 at 340.
Tillmanns Butcheries at 346. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 April 2023

Trade Practices Act 1974(Cth)

See Interpretation Act 1987(NSW)

Solicitors: James Tuite & Associates Lawyers (Appellant) Law Partners Personal Injury Lawyers (First Respondent) PJ Carey Solicitors (Second Respondent) File Number(s): 2022/225708 Decision under appeal Court or tribunal: District Court Jurisdiction: Civil Citation: [2022] NSWDC 246 Date of Decision: 05 July 2022 Before: Levy SC DCJ File Number(s): 2021/101380

HEADNOTE [This headnote is not to be read as part of the judgment] The first respondent, Adam Liccardy (Mr Liccardy), successfully sued the appellant and second respondent in negligence for damages arising out of a leg injury he suffered while boarding a "pontoon" style boat with a group of friends. The boat was hired from the appellant, Daniel Payne (trading as Sussex Inlet Pontoons), who engaged the second respondent, Derek Wayne Allred (Mr Allred), to be the master of the boat. At around 2:30pm on 25 January 2020, a hat belonging to one of the members of the group was "unexpectedly blown into the water by strong winds". Mr Liccardy dived into the water while the boat was moving to retrieve it. Mr Allred manoeuvred the boat and circled back to Mr Liccardy in such a way that to board the boat via the ladder at the stern, Mr Liccardy had to swim across the body of water adjacent to the stern where the propeller was located. As Mr Liccardy did so, he felt two knocks to his left leg caused by the rotating propellor and subsequently realised that he suffered two lacerations about 20mm apart. The primary judge found that by the time Mr Liccardy jumped in the water he had consumed 4 cans of full-strength beer, partly consumed a fifth can and consumed two lines of cocaine. The primary judge rejected the appellant's reliance on s 50(1) of the Civil Liability Act 2002 (NSW) (the CL Act). The primary judge was not satisfied that Mr Liccardy was intoxicated to the extent that his capacity to exercise reasonable care and skill was impaired within the meaning of s 50(1) of the CL Act. The principal issues on appeal were: (i) whether the primary judge erred in not being satisfied that Mr Liccardy was intoxicated to the extent that his capacity to exercise reasonable care and skill was impaired within the meaning of s 50(1) of the CL Act; (ii) whether the injuries to Mr Liccardy were likely to have occurred if he had not been intoxicated (CL Act, s 50(2)); (iii) whether Mr Liccardy's intoxication contributed in any way to the cause of his injuries (CL Act, s 50(3)); and (iv) whether Mr Liccardy's damages should be reduced on account of contributory negligence by a percentage greater than 25% (CL Act, s 50(4)). The Court (Beech-Jones JA and Basten AJA, Brereton JA dissenting in part) held, allowing the appeal: : In relation to issue (i)

For the purposes of s 50(1), the relevant act of Mr Allred was those acts that effectively required Mr Liccardy to swim in or near the hazard zone and climb the stairs at the stern of the boat. Swimming towards the stern of a boat with a propeller motor to climb a ladder requires the exercise of a reasonable level of judgment about one's own safety. The unchallenged expert evidence established that Mr Liccardy's capacity to exercise reasonable care and skill in that context was impaired. It follows that s 50(1) was satisfied and s 50 was engaged: per Beech-Jones JA at [61]−[63]; Brereton JA agreeing at [3]; Basten AJA agreeing at [72]. Jackson v Lithgow City Council [2008] NSWCA 312; [2008] Aust Torts Reports 81−981; State of New South Wales v Ouhammi (2019) 101 NSWLR 160; [2019] NSWCA 225; March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12, considered. Amanda's On the Edge Pty Ltd v Dires [2011] NSWCA 358, distinguished. In relation to issues (ii), (iii) and (iv)

(2019) 101 NSWLR 160

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