Smith v Perese & Ors

Admiralty Act 1988 (Cth) Civil Liability Act 2002 Civil Liability Amendment (Personal Responsibility) Act 2002 Fisheries Management Act 1994 Fisheries Management (Abalone Share Management Plan) Regulation Convention on Limitation of Liability for Maritime Claims 1976 International Convention Relating to the Arrest of Sea Going Ships 1952 LEGISLATION CITED : Jurisdiction of Courts (Maritime Conventions) Act 1989 (Ire) Law Reform (Miscellaneous Provisions) Act 1946 Limitation of Liability for Maritime Claims Act 1989 Navigation Act (NSW) 1901 Navigation Act (Cth) 1912 Navigation (Collisions) Regulations 1983 Partnership Act 1892 Shipping Registration Act 1987 (Cth) United Nations Convention on the Law of the Sea 1982

Booke v Bool (1928) 2 KB 578 J.A. & B.M. Bowden & Sons Pty Limited v Chief Commissioner of State Revenue [2001] NSWCA 125 Boylan Nominees Pty Limited v Sweeney [2005] NSWCA 8 Colonial Mutual Life Assurance Society Limited v Producers and Citizens Cooperative Assurance Co. of Australia Limited (1931) 46 CLR 41 Cribb v Korn (1911) 12 CLR 205 Dederer v Roads & Traffic Authority & Anor [2005] NSWSC 185 Hollis v Vabu Pty Limited (2001) 207 CLR 21 Lindley & Banks on Partnership, 17th ed. CASES CITED : Modbury Triangle Shopping Centre v Anzil (2000) 205 CLR 254 Noferi & Ors v Smithers [2002] NSWSC 508 Polpen Shipping Co. Limited v Commercial Union Assurance Co. Ltd (1943) KB 161 Salt Union Limited v Wood (1893) QB 370 Scott v Davis (2000) 204 CLR 333 Steedman v Scofield & Anor (1992) 2 Lloyds Law Reports 163 Stevens v Brodribb Sawmilling Company Pty Limited (1986) 160 CLR 16 Sutherland Shire Council v Heyman (1984-85) 157 CLR 424 The Union Steamship Co. of New Zealand Limited v The Commonwealth (1925) 36 CLR 130 The "Von Rocks" case (1998) 2 Lloyds Reports 198

James Alexander Smith (Plaintiff) Benjamin Richard Perese (1st Defendant) PARTIES : Richard Perese (2nd Defendant) Perese Abalone Diving Pty Limited, as Trustee of the Perese Family Trust (3rd Defendant) Denis Guy Renton (Cross Defendant)

D.T. Kennedy SC/S.M. Hill (Plaintiff) COUNSEL : A.J. Black (1st, 3rd Defendants) I.D. Roberts SC (2nd Defendant) M.J. Perry (Cross Defendant)

Hansons (Plaintiff) SOLICITORS : Fitzpatrick Teale (1st, 2nd, 3rd Defendants) Maurice Blackburn Cashman (Cross Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20403/04 JAMES ALEXANDER SMITH v BENJAMIN RICHARD PERESE & ORS

JUDGMENT 1 HIS HONOUR: James Alexander Smith is the plaintiff in proceedings against the first defendant, Benjamin Richard Perese, the second defendant, Richard Perese, and the third defendant, Perese Abalone Diving Pty Limited, as Trustee of the Perese Family Trust. The first defendant has joined Denis Guy Renton as a cross defendant, and the plaintiff's claim and the first defendant's cross claim have been heard together. 2 It is necessary at the outset to outline the nature of the plaintiff's claim. 3 The plaintiff was very seriously injured on 12 October 2001 when he was engaged in spearfishing. Spearfishing was a recreational activity enjoyed by the plaintiff and, on the day of the accident, he was spearfishing off Brush Island, an island near Kioloa on the south coast. 4 The plaintiff set out from Kioloa at about 8.30 am with the cross defendant, a regular fishing partner. Each of the two men had a son and the sons were good friends who joined their fathers on this particular outing. The party set out from Kioloa in a boat provided by the cross defendant. Neither son was engaged in the fishing activity but both the plaintiff and the cross defendant entered the water looking for lobster at a point which was known to them on the south-eastern tip of the island. Having been there for approximately five minutes, both fishermen returned to the boat and the boat was moved to a second area where again the plaintiff and the cross defendant entered the water. Whilst both men were in the water, the motor launch being driven by the first defendant proceeded over the plaintiff and he sustained injuries resulting in a below knee amputation. 5 The facts above outlined are not in dispute. However, matters of contention include wind and visibility conditions and the precise location at which the accident occurred. Whether or not the first defendant was negligent in the circumstances of the accident was very much in issue. 6 There is near the south-eastern corner of Brush Island a rocky outcrop and to the south of that outcrop there is a bombora. A channel runs between these two positions and I find that the first defendant took the boat he was driving through that channel. The plaintiff was struck when he was somewhere to the east of that channel. The earlier position at which he had entered the water was north-east of that channel. 7 It becomes necessary to review the evidence given by the plaintiff, his son, the cross defendant, the first defendant and Timothy Leather, a deckhand who was accompanying the first defendant. 8 According to the plaintiff, the place where the accident happened was a familiar fishing location for the cross defendant and himself. Indeed, the plaintiff's evidence was that it was generally a popular spot for fishing and diving, and this is not a matter of contention. I accept it to be the case. 9 The plaintiff described the morning as ideal. He said it was quite bright and the diving area was "flat and glassy". He said that, if anything, there was a very light wind from the north (T 32). 10 The plaintiff said that he entered the water the second time thirty to thirty-five metres from the shore and at a point twenty metres east of the bombora (T 40). He said that the cross defendant was the first to enter the water and he said he asked the boys who remained with the boat to take him in "a little bit closer". He said that by the time he entered the water, a westerly wind was starting. He described the wind as being from the north-west, and he said that here he was was in the lee of the wind (T 42). He described the sea as still being quite calm, and he said that there were no whitecaps. He said he had been in the water for probably ten minutes when the accident happened; he had dived once, and was proceeding on the surface "just finning and using his flippers" (T 43). 11 The plaintiff described the equipment he was wearing. It consisted of a snorkel and mask and a wetsuit. The snorkel was luminescent green. His flippers were black. He was using a Ronstan float attached to his speargun. I accept the evidence which the plaintiff gave that his float was an orange one and was exactly the same as the float which was tendered in evidence as Exhibit A. The tether, attached to the float at one end and to the speargun at the other end, was ten metres long. The plaintiff said that when the accident happened the cross defendant was east of him and closer into shore. He said the distance separating the two men was ten to fifteen metres (T 46). When he last looked up, he saw the boat he had left, and it was drifting away. He estimated it to be 150 feet away. He said that was a few minutes before the accident. 12 Mathew Smith gave evidence of accompanying his father out in the boat on 12 October 2001. He said that they left Kioloa ramp about 8.30 am and were out at the island within fifteen minutes. He gave evidence of the first drop. He said the weather was calm at that time but that the wind was gradually picking up. He described the location of the second drop as being forty metres off the island and, like his father, Mathew Smith said it was the cross defendant who left the boat first. He said there was no real change in the weather. The wind was coming from the north-west and he said there was very little swell. The day was clear and sunny (T 152). He said that he and his friend, Colin Renton, drifted in the boat to the south-east after their parents left it. He observed the other vessel approaching on the plane. He said that when the other vessel was seen by him the boat he was in was fifty or sixty metres away from his father and from the cross defendant. He said both men had their floats with them in the water. He identified the float, Exhibit P, as being like the float the cross defendant was using, except that the cross defendant's float was a yellow one. The witness said that when he first saw the vessel approaching on the plane, it was heading east-east-north-east. He heard yelling and screaming and he saw that vessel do "a 180 spin back around" (T 154). It is to be inferred that this was after the collision. 13 The cross defendant gave evidence of accompanying the plaintiff, and that his son and the plaintiff's son were with them. The boat they went out to the island in belonged to the cross defendant's stepfather. The cross defendant described the activity at the first spot, where he and the plaintiff went to a particular hole looking for crayfish. They then proceeded in the boat to the second spot and he said that the boat stopped at the south side of the rocky outcrop. He said he and the plaintiff entered the water sixty to seventy metres from shore. He said he started to swim to the shore to a position within twenty metres of the island. He said he checked the plaintiff's position two or three times after leaving the boat. He said the plaintiff was west of his position, fifteen to twenty metres away, and he said that just before the impact, he, the cross defendant, was twenty to thirty metres off shore. He heard the boat, looked up and saw it two or three metres away coming off the plane. That I infer to be after the impact. According to the cross defendant, the wind was coming from the north-west to the west. He said it remained relatively calm in the water, with very mild chop. He said the swell was less than half a metre. Coming out from Kioloa he proceeded directly from the wharf and he noticed no glare. He said he used his float in the water and so, too, did the plaintiff. The cross defendant said that the plaintiff had a white tether rope. He placed the accident as occurring at about 9.15 am. He said they entered the water for the second time at about nine o'clock and had been in the water for about ten or fifteen minutes. He said when he last looked, his stepfather's boat was approximately fifty to sixty metres away, and that would have been within five minutes of the accident. He described the floats that he and the plaintiff were wearing as each being highly visible on the water. 14 The first defendant said that he proceeded out towards Brush Island accompanied by his deckhand, Timothy Leather. He was heading for the eastern side of the island to dive for abalone, having left Kioloa boat ramp about 9.00 am. He said that when he left Kioloa, there was a wind blowing which he estimated to be a twenty knot westerly. The sky was clear. He said that he followed the shoreline north having left Kioloa and then turned to travel east to proceed along the southern side of the island. He said he reduced his speed from twenty knots to ten to fifteen knots as it was getting rougher (T 361). He said that both he and Mr Leather were looking straight out in front of the vessel. He said the further out they went the choppier the sea was getting. He was influenced to reduce his speed by both the chop and the glare. He said the glare was "quite bad, I was sort of facing straight into the sun" (T 362). He said he passed the south-western tip of the island about forty metres off shore. He passed between the rocky outcrop and the bombora, a distance of twenty metres from the rocky outcrop. Here he said the sea was choppy and glary. He continued to travel east another fifty metres and that was where the accident happened: "I was still heading in an easterly direction and heard a thump, looked around, and noticed that I must have run over a diver" (T 364). At no time prior to the accident did he see either diver or any float in the water. As he approached the scene of the accident, he did see the other boat (carrying Mathew Smith and Colin Renton). He first saw it when it was 400 metres distant and he said that at the point of the accident, it was well over 100 metres to the east of the plaintiff. 15 Timothy Leather said that they left the Kioloa boat ramp between 8.50 am and 9.00 am. He said it was blowing a gale with a wind of 30-40 knots. He said that during the journey he was facing the front and he said the sea was choppier further off shore, although it had been smooth before the vessel he was proceeding in turned to the east. He said that having turned, the vessel travelled east along the south side of Brush Island and he was on the port side looking east over the front. He said that the first defendant eased off from a speed of 20 knots when he reached the island. He said at that point it was "glary and real windy" (T 484). He said it was choppy as well. He said the vessel "cut through the bommie". He did not see the plaintiff or his buoy prior to the accident. He said that the vessel was proceeding at about 10 knots at impact. In the moment before the accident he described visibility in these terms (T 484): "It was glary, it was choppy, rough from the wind which westerlies do, visibility would have been wasn't too bad, like you could still see, but just the glare off the water reflects, takes a lot off the water's surface to make it hard to see a bubble." 16 He first saw the orange dive bubble when it was forty to fifty metres away, but this was after the accident. He became aware of the cross defendant's presence in the water after the accident when the cross defendant was yelling at them. He said that the cross defendant was at least five or ten metres east of the plaintiff at that point and a bit closer to shore. 17 I have reviewed in the broadest outline the evidence from those at the accident scene. That review discloses that there is really no issue but that the accident occurred after the first defendant had negotiated the channel described, but there is an issue as to the precise location of the plaintiff at the time he was injured. The first defendant said in the evidence I have reviewed that he had negotiated the channel about twenty metres from the outcrop and that he proceeded on fifty metres to the point of impact. The plaintiff said he left the boat thirty to thirty-five metres from the shore; his son said that his father entered the water forty metres off shore; and the cross defendant said that the entry was fifty to sixty metres off shore. I find myself unable to determine the precise location of the accident, but I accept that each swimmer had been in the water for about ten minutes or thereabouts, and that each man was heading towards the southern shoreline of the island. I am satisfied on the balance of probabilities that the accident happened somewhere within thirty metres of that shoreline and within fifty metres to the east of the imaginary centreline between the rocky outcrop of the island and the bombora. The location of those features is conveniently depicted in the aerial photograph (Exhibit 2(2D)). 18 I am also satisfied that a distance of approximately fifteen metres separated the plaintiff and the cross defendant at the time that the impact occurred. 19 I find further that both the plaintiff and the cross defendant were using floats tethered to their spearguns. I find that the plaintiff had an orange float and that the cross defendant had a yellow one, those floats being similar to Exhibit A and Exhibit P respectively (save as to the colour in the case of the "Picasso" float). 20 What were the weather conditions? 21 It is common ground that it was a fine, sunny morning. A certified extract from the official meteorological records was introduced into evidence as Exhibit S, and this records wind observations from Ulladulla on the morning in question. The content of the certificate is, of course, not challenged. The certificate content and the evidence that Captain Downes gave about it I consider affords the most reliable basis for determining what the sea conditions were like. 22 I have reviewed the evidence that the plaintiff and his son gave and that the cross defendant gave about the weather conditions. I have also reviewed the evidence that the first defendant and Mr Leather gave. I do not consider that the water was as calm as the plaintiff said nor as choppy as the first defendant said it was. I consider that it was probable that there was some chop, although not as much as the evidence of the first defendant and of Mr Leather would suggest. 23 Mr Leather said that by the time he and first defendant left Kioloa it was blowing a gale, "between thirty and forty knots" (T 482). His evidence to that effect is inconsistent with the content of Exhibit S and affects the reliability of his evidence as to the conditions encountered on the journey to the scene of the accident. The first defendant's estimate was that the wind was a twenty knot westerly when he left Kioloa, and this, of course, also was incorrect, although not to the same extent as Mr Leather's estimate. 24 I return to consider the certificate, Exhibit S. The certificate discloses that the wind strengthened and changed direction as the day progressed. At 7.00 am on 12 October 2001 the wind speed was two kilometres per hour, blowing from 210; at 8.00 am it was four kilometres per hour, blowing from 340 (that is, north-north-west); and at 8.57 am the wind speed was twenty-eight kilometres per hour, blowing from 250 (that is, west-south-west). I accept Captain Downes' evidence that the wind change at Brush Island would have been some fifteen minutes behind Ulladulla, and this makes the above recorded reading at 8.57 am a significant one. Once the wind was blowing from the west-south-west, as it was at 8.57 am, Captain Downes considered that the water off the south-east corner of Brush Island would have been affected by wind chop. His evidence (at T 289) was as follows: "Q. Captain Downs, if at a particular point in time in relation to Brush Island the wind was blowing from the west, you would expect the south eastern corner of the island to be exposed to the weather? A. To some extent, yes. Q. And depending on the strength of the wind you would expect, I'm sorry, the strength of the wind would affect the amount that the south eastern corner of the island was affected by the wind, is that correct? A. Yes. Q. If the wind was blowing at 15 knots from the west, that's about 37 kilometres an hour I think isn't it? A. 15, it's about - 15 knots you said? Q. I'm sorry 15 knots is less than that, 15 knots is about 28 kilometres an hour, isn't it? A. Exactly, yes. Q. You would expect that there would be a significant wind chop on the south eastern corner of Brush Island? A. There would be quite a bit, yes." 25 And, later (at T 292-293): "Q. So is the answer to my proposition that if the wind was blowing from the west at a point in time at a speed of anywhere between 15 and 20 knots, the expected sea conditions at the south eastern corner of Brush Island would be significantly different from the conditions shown in the video that you saw this morning? A. There is a certain amount of shelter to be seen, but I would expect the sea conditions to be much the same as in this force 4. Q. As shown in the photograph force 4 in the documents that you've just shown us? A. Yeah." 26 The reference to the photo in the above extract is a reference to a photo showing the effect of a Force 4 wind, being part of Exhibit 2 (1,3D). That photograph affords some visual assistance as to what effect a Force 4 wind would have upon open sea. 27 Captain Downes gave the following evidence as to the effect of a Force 4 wind on the visibility of a float (T 328-329): "Q. And would you think that a person, skilled person driving a craft would have any difficulty seeing that sort of a float if there was a force 4 situation? A. It might disappear for just momentarily behind the odd wave but basically it would be visible all the time, for almost all the time. Q. And I think you said in your evidence earlier today that you thought that the maximum distance that the boat should get away from where the divers were dropped off was 75 metres where they could still see the floats? A. Yeah. Q. And would it be the case that a person who was an experienced person on the water would have a greater capacity to pick things up as a result of his experience? A. You're talking about picking things up visually. Q. Visually yes, such as floats and divers? A. Should be no problem at all." 28 I accept the above evidence. 29 Allowing for the distance from Ulladulla to Brush Island, and finding as I do that the accident occurred about 9.15 am, the wind speed probably had just reached fifteen knots by that point of time, and the effect of the wind upon the sea is unlikely to have been as great as it would have been, say, thirty minutes later. The effect of the wind was probably between the effect of a Force 3 wind and a Force 4 wind. 30 Accepting as I do the content of the meteorological certificate and the evidence of Captain Downes as to its significance, I do not consider it likely that the sea was perfectly calm when this accident happened. Rather, I consider it more likely than not that there was chop building up. However, I do not accept that the chop was such as would afford an acceptable explanation for the failure of the first defendant and of Mr Leather to see the two floats before the accident happened. 31 Allowing for some chop, it would not have been such as to obscure vision of the floats continuously. 32 The other factor to be considered is the issue of glare. I have already referred to the first defendant's evidence as to his perception of the glare and its effect (para 14), and to the evidence of Mr Leather as to glare (para 15). The cross defendant gave evidence that he had no difficulty with glare as he proceeded to the island (T 754). His journey was earlier than that undertaken by the first defendant and the sun would have been lower for him; on the other hand, he did not follow precisely the same course as the first defendant. The cross defendant went straight out to the island from the boat ramp. 33 The second defendant gave evidence as to his experience in trying to find floats he had laid in the water off Brush Island on occasions when he was confronted by the sun at 40. His evidence was that he found it very difficult to see floats when travelling in an easterly direction (T 656), and he adopted the procedure in glary, choppy conditions of approaching any buoys he wanted to retrieve from the east, so that he had the sun behind him. I am not persuaded by the evidence of this witness that his son was confronted with such glare as would have prevented him from seeing the plaintiff's float and that of the cross defendant. 34 Captain Downes, who I assess to be a very experienced, objective and reliable expert, wrote in his report (Exhibit T): "With datum based on Brush Island at 0900 on the 12th October, 2001, this information may be summarised as follows:- 3.1 Sunrise was at 0522 and the sun's altitude at solar noon (1122) was approximately 61.1/2. At 0900 the sun's altitude would have been about 4348' and its bearing 06323'. Whilst Mr. Perese would have been heading up sun, there would have been little or no glare from the water." 35 A video was taken in October 2004 when Ronald Duncan, a charter operator with considerable diving experience, took his vessel to Brush Island. The journey started at 7.28 am (8.28 am daylight saving time). It has to be appreciated in viewing the video that the wind and tide conditions were different. Moreover, the camera was not always focussed directly ahead. It cannot be assumed that the vessel took the same path as the vessel which the first defendant was operating. However, the video captured glare from the sun to afford a visual appreciation of its possible impact. When Captain Downes was shown the video, he thought the glitter was greater than he would have expected. Nevertheless, having considered all the evidence that bears upon the point, I do not conclude that there was glare such as would have been likely to prevent a person keeping a proper lookout from seeing the floats which the plaintiff and the cross defendant were using. 36 Mr Duncan gave evidence that on the occasion the video was taken in October 2004 the floats were visible from at least 100 metres away at different times and on different angles (T 251). Earlier he said that one of the floats was seen fifty to sixty metres away at a particular point captured on the video (at about 8.50 am) (T 185-186). 37 There was a criticism of Mr Duncan to the effect that he was less than objective in his evidence, but I accept the evidence as to distances that he gave and which I have just recorded. 38 It is to be borne in mind that whatever the effect of the sun, it was not such as to have prevented the first defendant from negotiating the channel between the rocky outcrop and the bombora. The first defendant had available to him sunglasses which I am satisfied would have the effect of reducing the glare. The first defendant was unable to recall whether he had the sunglasses on when he passed the rocky outcrop but they were available for his assistance if the glare was troublesome. Doubtless, too, if the glare was so troublesome as to have prevented him from seeing if there were objects in the water, a change in direction would have been employed to address that difficulty. 39 The first defendant does not suggest that he found it necessary to change direction because of the glare. Whatever its effect and the effect of chop was, he says that he addressed this by reducing speed. 40 The first defendant had an obligation to keep a proper look out and to travel at an appropriate speed. That common law duty was also reflected in rr 5 and 6 of the Navigation (Collisions) Regulations 1983, to which Mr Kennedy referred. It is not suggested that those rules afford a basis for a statutory cause of action and they do not add relevantly to the common law duty owed by the first defendant. 41 The first defendant was aware that the area in which this accident occurred was one that was favoured by spearfishermen (T 418). It was his appreciation on the day in question that the general area was one where spearfishermen might be expected to be present (T 435). These were considerations relevant to what was required of the first defendant in the discharge of his duty of care. 42 The first defendant acknowledged in cross examination that it was incumbent upon him to keep a proper lookout, appreciating that he may find spearfishermen in the area (T 440). An explanation was sought as to why he did not see the spearfishermen in the water: "HIS HONOUR: Q. How do you explain the fact that you didn't see them at any stage before the collision? A. I'm not sure, I was just driving the boat keeping a lookout and I just didn't see them or didn't see any bubbles. Q. Whatever the chop there must have been a point before the collision surely when they would have been visible to you, could you account for how you didn't see? A. I just assume it was the glare and the chop. Q. But did that prevent you from seeing what was immediately in front of the vessel? I'm just having difficulty understanding, can you help me with that? A. I'm not sure, I didn't see so I don't really know, it was just the glare and the chop." 43 I find myself unable to accept that explanation. 44 The plaintiff's float and the cross defendant's float were quite large coloured objects. Mr Duncan described both floats as highly visible (T 268); so, too, did Captain Downes (T 280); and Mr Vanzino (T 545, 546). I accept, of course, as did Mr Duncan (T 217), that glare can disguise colour but the evidence satisfies me that had the first defendant been keeping a proper look out he would have seen the floats in time sufficient to have avoided the collision. I find that neither the first defendant nor Mr Leather was keeping a proper look out. 45 The video, Exhibit V, demonstrates how manoeuvrable the first defendant's vessel was and evidences its capacity to come quickly to a halt. The video showed the vessel coming to a halt within two boat lengths from a speed of ten to fifteen knots. The video also showed the vessel coming to a crash stop within half a boat length. 46 I find that had the first defendant seen the floats when he was twenty metres away, there would have been sufficient time for him to have avoided a collision if he was travelling at ten to fifteen knots. I find, further, that had he been keeping a proper look out he would have seen the plaintiff's float when he was no less than twenty metres away from it. 47 The more the water was affected by chop and glare the greater the need for caution in this area which the first defendant appreciated was used by spearfishermen. The first defendant was cross examined (T 442): "Q. And the slower you go the easier it is to pick up things in the water? A. Yes. Q. Therefore I suggest to you that if you'd have been going slower, that is some speed well below 10 to 15 knots, say 8 to 10 or 8, then it would have been much easier for you to observe the floats and the spear-fishermen that were in the water ahead of your boat, isn't that correct? A. Well maybe. Q. Maybe. You just a moment ago conceded that the slower the speed the easier it is to see and the higher the speed the more difficult it is to see, isn't that correct? A. Yeah, if you're going really fast it'd be hard to see I'd imagine. Q. So what you're saying is, if you were going really fast then it'd be hard to see in the conditions that you say prevailed? A. I assume so." 48 If, contrary to the finding I have made, the first defendant, whilst keeping a proper look out, was unable to see the floats from twenty metres away, then to proceed at ten to fifteen knots was to proceed too quickly. 49 I am satisfied for the above reasons that the first defendant was negligent and, having regard to his relationship with the third defendant, to which I shall presently refer more closely, I also find the third defendant to be vicariously liable for his negligence.

The issue of contributory negligence 50 Each of the defendants has pleaded contributory negligence. In essence, it is contended that the plaintiff failed to exercise reasonable care for his own safety in the following respects:

(i) in failing to have a dive flag attached to his float;

(ii) in failing to ensure that there was a dive flag on the boat;

(iii) in failing to remain in proximity to the boat. 51 Mr Black submitted that the boat from which the plaintiff and the cross defendant entered the water should have had a dive flag attached to it and that this was required by the Navigation (Collision) Regulations of 1983, and in particular to s 6. That section refers to "diving operations", not an activity defined. The section requires "a vessel engaged in diving operations" to exhibit "…… (b) by day, International Code flag 'A' or a rigid replica thereof…" 52 Captain Downes in his report expressed the belief that the boat was required to show such a flag, which provided a warning that there were divers in the water and alerted the skipper of an approaching boat to "reduce his speed right down and keep an eye open for floats" (T 303). Mr Black also drew attention to the statement of Mr Brown (Exhibit 13(1,3D) in which the author opined that he "would regard it as most unwise to engage in spearfishing in that general area without a diving flag, and without a vessel being anchored nearby with a diving flag on the vessel as well". 53 The plaintiff was not the owner of the boat. He was not in charge of it. It will be necessary to return to this regulation when considering the cross claim, but the regulation is not expressed in terms imposing an obligation upon a person in the position of the plaintiff to display a flag on that boat. 54 The plaintiff's evidence was that he had never belonged to any spearfishing association but that he was an experienced spearfisherman. He had seen blue and white flags being displayed in connection with scuba diving. I accept that it was the plaintiff's belief, as he asserted it to be (T 68), that the necessity to display a flag on a boat arose only for scuba diving operations. His belief was that, unlike spearfishermen, scuba divers move away from the boat with nothing around them. On the other hand, the plaintiff was always close to his float. In cross examination he was asked these questions and gave these answer (T 73-74): "Q. At the time of this accident did you know that boats from which spearfishermen were operating should display a diving flag? A. Not to my knowledge, again, I repeat the dive flag was for scuba. Q. Did you think as at the time of this accident that a boat from which spearfishermen were operating should as a matter of safety precaution show a dive flag? A. No because the boat was a means of transport to get to where we were going to save us having to walk or swim out to the island and at all times we actually spear fished and the boat was merely used as a transport we didn't keep it close with a flag on it because we didn't consider that we were diving from a boat. We considered it ourselves to be rock hopping. It was a luxury having a boat to get us where we were going. Q. May I take it from that answer that if you thought you were diving from the boat you thought that it should have a dive flag? A. No I wouldn't surmise that. Q. You wouldn't what? A. I wouldn't surmise that from what I've just said. Q. Is that what you thought that is that if you were diving from a boat, spear fishing from a boat, the boat should have a dive flag? A. If I was scuba diving. HIS HONOUR: Q. Spear fishing you're being asked? A. Yes, I know but I would consider having a flag would be relevant if I was scuba diving. I considered my float and my tether enough indication of what my activity was and that would have been enough indication for boat traffic that there is a diver in the area." 55 I accept the above answers of the plaintiff were truthful and expressed his belief. Nor do I consider it was unreasonable for the plaintiff to have considered his float indicated his position for boat traffic. 56 It is to be observed that the Waterways Safe Boating Handbook in its October 2000 and in its December 2001 editions contained advice in identical terms: " Diving activities The diver's flag must be shown when people are engaged in diving activities from a vessel. When you see this signal, slow down, keep well clear and keep a look out." 57 Beside that instruction is depicted (in both editions) a scuba diver with a tank on his back submerged below the vessel displaying the flag. 58 The plaintiff's belief was consistent with the instruction in those two editions of the handbook. 59 It was not until the 2002/2003 edition of the Safe Boating Handbook that the language of the instruction changed to read: " Diving activities The diver's flag must be shown when people are engaged in diving activities from a vessel. It is recommended that this flag be shown when diving/snorkelling from shore." 60 Beside that instruction the earlier depiction is reproduced. Hence, it was not until this third edition introduced into evidence that there was any reference to snorkelling, and even then the instruction as to snorkelling was directed only to snorkelling from the shore. 61 That being so, I am not persuaded that the plaintiff was negligent in entering the water knowing that there was no flag displayed on the boat from which he had entered the water. 62 The plaintiff's evidence was that he had never sustained injury associated with diving prior to this accident and that he had not encountered danger in his diving activity. He said it was his practice to dive with another person and he believed it to be safe to do what he was doing (T 48). I accept that evidence to be truthful. 63 I am not persuaded that the plaintiff was negligent in failing to remain in close proximity to the boat. 64 Was there a lack of care for his own safety in not having a flag on his float? 65 There was a considerable amount of evidence on the topic of flags on floats. There was no uniform practice. 66 The plaintiff's experience was that he had seen flags on floats only at a competition, and he thought it was a prerequisite imposed by a spearfishing club (T 70). Mr Duncan said it was more common for recreational divers not to display flags on floats than to do so (T 191). The first defendant said he had seen recreational divers with and without flags on their floats (T 350), but he said that in the year or two before the accident there were more people using flags than not using them. Mr Leather had seen buoys with flags on them and buoys without flags on them (T 480). Mr Vanzino said that the use of flags increased up until 2001, by which time he considered that more than half the number of spearfishermen carried a dive flag on their float. 67 There was no regulation requiring the plaintiff to have a dive flag on his float and, assessing the evidence in this case, I do not find that the plaintiff's failure to have a flag on his float constituted contributory negligence. 68 There was an issue as to whether or not the use of a dive flag was likely to render it more conspicuous. I do not propose to review in detail the evidence that bore upon this matter, but I do record that I am satisfied on the balance of probabilities that it would be easier to see a float with a diving flag attached than a float with no such flag. 69 However, accepting as I do the evidence of the plaintiff which I have reviewed above, I am not satisfied that the defence of contributory negligence has been established. I so conclude whether contributory negligence is to determined in accordance with the common law or by reference to s 5R of the Civil Liability Act 2002.

Defences under the Civil Liability Act 70 Each of the defendants has pleaded defences under Divs 4 and 5 of the Civil Liability Act 2002. 71 Divisions 4 and 5 of Pt 1A of the Civil Liability Act were introduced by the Civil Liability Amendment (Personal Responsibility) Act No. 92 of 2002. Schedule 1 cl 6 of that amending Act provided that the amendments introduced through those Divisions do not apply "in respect of proceedings commenced in a court before that commencement". 72 It is common ground that the proceedings against the first defendant were commenced on 22 November 2002, some two weeks before the commencement of Act No. 92 on 6 December 2002. Hence Divs 4 and 5 have no application to the proceedings on foot between the plaintiff and the first defendant. Those Divisions do, however, apply to the proceedings against the second defendant and the third defendant, who were joined as parties to this cause after 6 December 2002. 73 Each of the defendants has pleaded the voluntary assumption of risk by the plaintiff. It is submitted that the risk of the plaintiff being struck by a watercraft in circumstances where he was not displaying a dive flag, was not in the vicinity of a boat and was diving in an area where watercraft might be encountered was an obvious risk, and the plaintiff voluntarily consented to his exposure to that risk. 74 Where a risk of harm is an obvious risk, s 5G of the Civil Liability Act places the onus upon the plaintiff to prove on the balance of probabilities that he was not aware of that risk. The position is, of course, otherwise at common law, and it is the common law that applies as between the plaintiff and the first defendant. 75 The meaning of obvious risk for the purposes of Div 4 is addressed in s 5F. That section provides: "(1) For the purposes of this Division, an obvious risk to a person who suffers harm is a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person.

(2) Obvious risks include risks that are patent or a matter of common knowledge.

(3) A risk of something occurring can be an obvious risk even though it has a low probability of occurring.

(4) A risk can be an obvious risk even if the risk (or a condition or circumstance that gives rise to the risk) is not prominent, conspicuous or physically observable." 76 Section 5G provides: "(1) In determining liability for negligence, a person who suffers harm is presumed to have been aware of the risk of harm if it was an obvious risk, unless the person proves on the balance of probabilities that he or she was not aware of the risk.

(2) For the purposes of this section, a person is aware of a risk if the person is aware of the type or kind of risk, even if the person is not aware of the precise nature, extent or manner of occurrence of the risk." 77 Sections 5F and 5G were considered by Dunford J in Dederer v Roads & Traffic Authority & Anor [2005] NSWSC 185. His Honour said (at [86]): "'Obvious risk' is defined in s 5F(1) as 'a risk that, in the circumstances, would have been obvious to a reasonable person in the position of that person'. Section 5G speaks of the 'risk of harm' and the 'type or kind of risk even if the person is not aware of the precise nature, extent or manner or occurrence of the risk'. This provision makes it apparent to me that the 'risk' in 'obvious risk' is a reference to the risk of harm, i.e. the injury resulting from the danger and not a reference to the danger itself, although s 5G(2) makes it clear that the precise injury, in this paraplegia, does not need to be obvious. However, the obviousness of the risk must be judged by reference to 'a reasonable person in the position of (the plaintiff)'." 78 I have referred already to the plaintiff's evidence as to his perception as to the safety of what he was doing: he was fishing in company in an area with which he was familiar in what he perceived to be good conditions; he was using a float, which I am satisfied he believed to be conspicuous; he was fishing in an area commonly fished by spearfishermen; his companion was nearby with another conspicuous float; both men were in reasonable proximity to the shoreline of Brush Island. I am not persuaded that the risk which materialised was an obvious risk. I am, in any event, satisfied by the plaintiff's evidence that it was not a risk of which he was aware, and I conclude that it has not been established that he voluntarily consented to the exposure to that risk. 79 The second defendant and the third defendant also rely upon a defence under Div 5 of the statute. For reasons stated, consideration of Div 5 does not arise in the case of the first defendant. 80 Division 5 is directed at excluding liability to another person in respect of harm suffered by that other person in the course of a dangerous recreational activity. 81 Section 5L provides: "(1) A person ( the defendant ) is not liable in negligence for harm suffered by another person ( the plaintiff ) as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by the plaintiff. (2) This section applies whether or not the plaintiff was aware of the risk." 82 "Dangerous recreational activity" is defined in s 5K as meaning: "A recreational activity that involves a significant risk of physical harm." 83 "Obvious risk" has the same meaning as in Div 4. "Recreational activity" includes: "(a) any sport (whether or not the sport is an organised activity), and (b) any pursuit or activity engaged in for enjoyment, relaxation or leisure…" 84 Plainly, the activity in which the plaintiff was engaged when he was injured was a recreational activity under s 5K. This being so, s 5L would operate to exclude liability in either the second defendant or the third defendant if:

(i) the activity in which the plaintiff was engaged was a dangerous recreational activity; and

(ii) the plaintiff was injured as a result of the materialisation of an obvious risk of that activity. 85 Was what the plaintiff was doing a dangerous recreational activity? For this to be answered affirmatively would involve a finding that the activity was associated with a significant risk of physical harm. 86 In determining whether a recreational activity is dangerous, that really depends upon an assessment of all the circumstances in which that activity is undertaken. It does not seem to me that one could decide that to go spearfishing was always a dangerous activity or that it was never a dangerous activity. To fish alone in an area known to be infested with sharks where some other fisherman had been taken by a shark earlier that day would plainly involve the undertaking of a dangerous recreational activity. To go spearfishing in company in a netted area exclusively reserved for spearfishermen, with notices displayed prominently notifying that activity, would, equally obviously, not be a dangerous recreational activity. The need is to assess the particular circumstances in which the activity was being undertaken. 87 In his ten years of spearfishing the plaintiff had not previously suffered any injury. He was a person who enjoyed good health (T 137). He had only twice seen sharks and they each passed him by without showing any interest in him (T 48). 88 The plaintiff was swimming in approximately fifteen feet of water and he was swimming in company reasonably close to the shore. Each swimmer had a rope tethered to his gun and to each rope there was attached a coloured buoy. 89 It does not automatically follow because the plaintiff was injured that what he was doing at the time amounted to a dangerous recreational activity. I am not satisfied that the activity involved a "significant" risk of physical harm. Moreover, I do not find that the plaintiff was injured as a result of the materialisation of an obvious risk of the activity in which the plaintiff was engaged. 90 I conclude that s 5L is not enlivened in the circumstances of this case. 91 The first and third defendants pleaded reliance upon the provisions of s 5M of the Civil Liability Act. For reasons already stated, s 5M is not available to the first defendant. Section 5M is not enlivened without a risk warning being given to the plaintiff and there is no evidence that any risk warning was given. Indeed, Mr Black, in his comprehensive written submissions, abandoned reliance by the third defendant upon s 5M of the Act. 92 I conclude for the reasons stated that none of the defences raised has been established and, accordingly, I find the first and the third defendants liable to compensate the plaintiff in damages. 93 In order to establish liability in the second defendant, it is necessary for the plaintiff to prove against the second defendant vicarious liability for the first defendant's tort.

The liability of the second defendant 94 The liability of the second defendant has been asserted on a number of bases:

(ii) as the principal of the first defendant, with the latter being his agent;

Liability of second defendant as employer? 95 The control test remains an important indicator as to the nature of the relationship. In Stevens v Brodribb Sawmilling Company Pty Limited (1986) 160 CLR 16, Wilson and Dawson JJ said at 36: "In many, if not most, cases it is still appropriate to apply the control test in the first instance because it renders the surest guide to whether a person is contracting independently or serving as an employee." 96 The control test is not, of course, the only test in ascertaining whether a master-servant relationship exists. In Stevens Mason J said at 24: "But the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment… Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work, the provision of holidays, the deduction of income tax and the delegation of work by the putative employee." 97 In J.A. & B.M. Bowden & Sons Pty Limited v Chief Commissioner of State Revenue [2001] NSWCA 125, Ipp JA (at [14]) emphasised "the need to assess all the facts and have regard to the whole picture." 98 It seems to me that the various indicia identified in Stevens rule out the existence of a relationship of employer and employee between the second defendant and the first defendant. 99 The evidence does not support the submission that the first defendant was the employee of the second defendant. The first defendant did work as a deckhand for his father at a time when the second defendant was diving for abalone. However, the first defendant married in 1997 and the third defendant was set up as a trustee company when the first defendant consulted his accountant wanting to start his own business (T 464). The evidence of the first defendant was that he regarded himself as employed by the third defendant and the evidence satisfies me that this was legally the position. 100 Exhibits 4 and 10 (1,3D) bear upon the first defendant's status. Exhibit 4 (1,3D) includes the first defendant's amended assessment for the year ended 30 June 2002 and evidences his gross salary from which tax was withheld by the third defendant. Exhibit 10 (1,3D) contains the employment agreement between the first defendant and the third defendant, and evidences the third defendant's employment of the first defendant. 101 The third defendant employed the deckhand, Mr Leather (Exhibit 7 (1,3D)); the third defendant owned the equipment used in the fishing operation (Exhibit 6 (1,3D)); the third defendant paid workers' compensation premiums (Exhibits 6 and 7 (1,3D)); and it paid for the expenses of running the vessel used in the diving operation (Exhibit 6 (1,3D)). 102 I find that the first defendant owned the vessel used in the diving operations and which the first defendant was driving when it collided with the plaintiff. There was some difference in the evidence given by the first defendant and the evidence given by the second defendant about the vessel, which, at an earlier point of time, was owned by the second defendant. The first defendant did not say he paid his father for the vessel but that the transfer was in return for four tonnes of abalone he was not paid for. The second defendant said that the boat remained "on the books" of the partnership between himself and his wife until October 1998, but he said that the first defendant made all the payments, paid the licence fees and running costs, as well as paying the deckhands and running his own business (T 631). The hull itself had no value and the first defendant installed a new motor during 1998. The third defendant's evidence invited the conclusion that the transfer of the vessel was a gift from father to son. 103 The first defendant said that the vessel was transferred to him in 1998, and Exhibit 8(1,3D) records the transfer. Exhibit 10 (1,3D) includes the application submitted for the renewal of the fishing boat licence dated 2 October 2001. It identifies the master of the boat as being the first defendant. 104 I find on the balance of probabilities that ownership of the subject vessel passed from the second defendant prior to the issue of the receipt by NSW Fisheries (Exhibit 8(1,3D)) concerning notice of the "boat transfer" dated 16 January 1998. 105 The first defendant gave evidence which I accept that he determined where he would dive and he determined what deckhand would be employed (T 406). 106 The second defendant was cross examined about his relationship with the first defendant and about the possibility of his controlling the first defendant's actions. The second defendant was asked to assume that it came to his notice that the first defendant was behaving inappropriately in his control of the vessel. At T 694 the following questions and answers appear: "Q. Just assume that it did happen. If Waterways rang you up and said, 'Look, Richard, I'm very sorry to have to tell you this but your son's been out there catching abalone for your, on your behalf and he's speeding around at a rate of knots and he's driving recklessly, you know, could you have a word with him?'? A. No, it's nothing to do with me. Q. Nothing to do with you. You wouldn't take any steps in relation to that at all? A. I just don't see that arising. Q. Just assume that it did arise, Mr Perese, just want you to assume that it did arise. You would take some steps to stop that wouldn't you, because it would reflect on your good name in the industry? A. My, my son's his own person. I can't speak for his actions at the time." 107 It is clear from the evidence of both the first defendant and of the second defendant that neither regarded the first defendant as the second defendant's employee after the trustee company was set up. I am satisfied that the legal relationship between the first defendant and the second defendant as at the time of the plaintiff's accident was not that of master and servant.

Liability of second defendant as partner? 108 Nor do I find on the evidence that there was a partnership between the first defendant and the second defendant. 109 There was a share fishing agreement between the second defendant and the third defendant (see Exhibit 10 (1,3D). Clause 7 of that agreement records: "It is agreed that the rights hereby conferred shall rest in contract only." 110 It is characteristic of a partnership that the parties to it agree to share profits: Lindley & Banks on Partnership, 17th ed. at p 84, paras 5-24 and 5-10; and see s 1(1) of the Partnership Act 1892. The sharing of gross returns does not of itself create a partnership: see s 2(2) of the Partnership Act, but the sharing of profits of a business does afford prima facie evidence of partnership: s 2(3). 111 The arrangement between the defendants concerning the distribution of the proceeds of the abalone catch was one directed at the gross returns. The second defendant was not responsible for the payment of any part of the expenses of taking the catch. 112 Mr Roberts submitted that the first and third defendants were involved in carrying on a business which was separate from that of the second defendant, and I accept that submission. 113 Mr Roberts also drew attention to Cribb v Korn (1911) 12 CLR 205. That was a case involving consideration of a share farming agreement whereunder the landowner supplied his land and the fixtures on it whilst a working farmer was to physically carry out the farming operation using his own labour and equipment. An agreement to share the proceeds of the produce in agreed proportions did not constitute the arrangement of a partnership: see in particular the judgment of Barton J at 216. 114 Overall, I do not consider that the evidence in this case warrants the conclusion that there was an agreement amounting to a partnership as between the first and second defendants, or as between the second and the third defendants.

Liability of second defendant as a principal? 115 Mr Kennedy further submitted that there was a relationship between the first defendant and the second defendant by reason whereof the first defendant was acting as the second defendant's agent. He submitted that there was a true relationship of principal and agent, which carried with it vicarious responsibility in the second defendant for the first defendant's negligence. 116 This submission requires further consideration of the arrangement between the first and second defendants and the statutory scheme under which abalone fishing occurs. 117 At the time of the accident the second defendant was the holder of shares under the Fisheries Management Act (FM Act), 1994. He held seventy shares, which was the minimum shareholding permitted under para 5 of the Fisheries Management (Abalone Share Management Plan) Regulation (FMR). 118 Regulation 16 of the FMR prohibits a shareholder "or a nominated fisher for a shareholder" from taking abalone for sale in contravention of the shareholder's quota. The quota is, of course, governed by the shareholding. 119 At any one time a shareholder may have only one nominated fisher: reg 10 FMR. 120 As at the time of the accident the first defendant held a licence, a condition of which as "nominated fisher" was that he should not take abalone other than on behalf of the second defendant. Section 65 of the FM Act makes it an offence for a shareholder if he, or his nominee, contravenes the provision of a management plan for the fishery. 121 Regulation 35 identifies offences in respect of a shareholder which are share forfeiture offences. These include contravention of the quota provided for in cl 16 whether by the shareholder or his nominated fisher (if the shareholder has a record of contravening: cl 35). 122 The evidence establishes that there was a sharing of the catch, with forty percent to go to the first and third defendants and sixty percent to go to the second defendant. 123 The second defendant gave evidence that he could write a letter to the Director General informing that person that the first defendant was no longer his nominated fisher, and, indeed, it was the evidence of the second defendant that if it came to his notice that the first defendant committed an offence he would revoke his nomination (T 692). 124 There was evidence also that the catch was processed with Southern Ocean Seafoods (SOS), a company in which the second defendant was a shareholder. The procedure was, according to the first defendant, that he would take the catch to SOS who would process it and organise the sale of the abalone. The proceeds would be paid to the second defendant and then the first defendant would receive his forty percent. 125 Whilst the first defendant was the second defendant's nominated fisher, he did not dive only for the commercial benefit of his father. He caught fish which was part of another person's quota. This was done after that other person's quota was transferred to the second defendant. In the calendar year 2001 over 1000 kilograms was leased to the second defendant: see Exhibit 1 (2D). The second defendant's evidence was that he did not receive any financial benefit from this transaction, and I accept his evidence to that effect. Exhibit 3 (2D) shows that there was a due accounting for the proceeds as to the catch and those for whose benefit there had been quota leases. Exhibit 4 (2D) shows the total kilograms attracting payment for the 2001 year to be 6860 kilograms. It shows that 1089.6 kilograms was accounted for to the shareholders Tony Fry, Auslink Marine, and Carl Raphael. That quantity tallies with the Fisheries' record as to the quota leased to the second defendant for the relevant year (see Exhibit 1 (2D)). 126 The second defendant gave evidence to the effect he took on the leased quotas concerning the three entities named for the benefit of his son. The leased quotas were addressed after the second defendant's quota had been filled. I refer to the evidence given by the second defendant (T 810): "Q. So if you look at these documents, no one has been paid any money in respect of any quota that your son might have caught fish on, in the period right up until 25 October 2001? A. Yes, I wish my quota to be completed before he served the others. Q. Would you just agree with that proposition that I put to you that nothing had happened as far as anyone else until 25 October 2001? A. That's correct. Q. In relation to these arrangements, of course your son would have to arrange these matters with you and obtain your consent to these arrangements, would he not? A. No. Q. What, he'd just sort of put them on your quota, put them on your licence, without you knowing anything about it? A. No, I would fill out a quota transfer form, which would come via to me. I'd fill out part A, B, I'm sorry, and quota transfer E would fill out part A. Q. But Mr Perese, if quota had been transferred to you officially through the records via your son, so that he could catch abalone for these people that are mentioned in this document, Tony Fry and others, you'd have to be aware of it, would you not, that that arrangement was in place? A. The quota transfer? Q. No, the catching of the abalone on behalf of these other people? A. I have to be aware of it to fill out the quota. Q. So you're aware and he would come to you and tell you, so that you could fill out the documents? A. Yes. Q. And that relates both to quota that's been transferred to you and any quota that you might want to transfer to anyone else? A. Exactly. Q. And you'd have to consent to that course? A. Of course, some-- Q. So in that sort of sense, you consenting to that course, was providing a financial benefit to your son, allowing him to take additional quota in connection with his work? A. Yeah, he's my nominated diver, I look after my divers." 127 I accept the evidence that the second defendant gave to the effect that he only received a financial benefit in respect of his own quota and that he cooperated concerning the leased quotas of the other shareholders for the financial benefit of the first defendant. Hence I accept that the practical effect of his arrangement was that the first defendant was not only catching abalone for his father. 128 Mr Kennedy submitted, nevertheless, that having regard to the statutory scheme pursuant to which the first defendant caught abalone as the nominated fisher for his father, the first defendant was properly to be regarded as the agent of the second defendant and not as an independent contractor. Hence, he submitted, the second defendant was liable for the first defendant's tort, citing Booke v Bool (1928) 2 KB 578, and in particular the judgment of Salter J at 585. In that case the defendant had the right to control the lodger who conducted the examination by the naked light, and was liable to the explosion that ensued, by reason of permitting and inviting the lodger to do what he did. The defendant was also considered by Salter J to be liable on the basis that he and the lodger were engaged on a concerted purpose, and the act of the lodger was done pursuant to that purpose. The circumstances of Booke v Bool are far removed from the circumstances of the present case, and I do not consider that case of real assistance here. 129 Mr Kennedy next relied upon Hollis v Vabu Pty Limited (2001) 207 CLR 21. This case concerned a courier business conducted by a company. The company engaged individual couriers to deliver items and a person was injured by the negligent act of a courier in the course of operating a bicycle for the purposes of a delivery. The injured person sued the company and the Court of Appeal dismissed an appeal brought by the unsuccessful plaintiff. However, the decision of the Court of Appeal was reversed by the High Court. Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ upheld the appeal on the basis that the courier was an employee of the company and not an independent contractor. McHugh J upheld the appeal on the ground that liability was attracted because the courier was acting as the agent for the company within his authority as its representative in carrying out its contractual obligations for its benefit. 130 Mr Kennedy invited attention to the following passage in the joint judgment of the Chief Justice, Gaudron, Gummow, Kirby and Hayne JJ at [42]: "In general, under contemporary Australian conditions, the conduct by the defendant of an enterprise in which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of that enterprise." 131 Those remarks, of course, were made in the context of a case in which the unidentified courier was wearing a uniform indicating he had been engaged by the respondent company. 132 However, their Honours had earlier observed (at 36 [32]): "In Northern Sandblasting Pty Limited v Harris (1997) 188 CLR 313 at 366-367 McHugh J referred to the force of arguments which would justify the imposition of liability on employers for the acts of independent contractors. It has long been accepted, as a general rule, that an employer is vicariously liable for the tortious acts of an employee but that a principal is not liable for the tortious acts of an independent contractor. That general rule was not challenged in this appeal." 133 Mr Kennedy also referred to the judgment of McHugh J. At [94] of that judgment, McHugh J referred to Scott v Davis (2000) 204 CLR 333, and to his Honour's review of the authorities in that case. His Honour said in Scott v Davis (at 346 [34]): "a principal is also liable for the wrongful acts of an agent where the agent is performing a task which the principal has agreed to perform or a duty which the principal is obliged to perform and the principal has delegated that task or duty to the agent, provided that the agent is not an independent contractor. The principal is also liable for the wrongful acts of a person who is acting on the principal's behalf as a representative and not as an independent principal." 134 However, his Honour went on (at 59 [99]), after referring to the decision in Colonial Mutual Life Assurance Society Limited v Producers and Citizens Cooperative Assurance Co. of Australia Limited (1931) 46 CLR 41, to say: "[99] CML decides, therefore, that a principal is liable for the wrongful act of an agent causing damage to a third party when that act occurred while the agent was carrying out some activity as the principal's authorised representative in a dealing with a third party. This principle is not limited to any particular types of wrongful acts. There is no reason in precedent, principle or policy to suggest that it is not as applicable to tortious acts as it is to tortious statements. Further, CML clearly demonstrates that it is not necessary for the principal 'specifically' to 'instigate, authorise or ratify' the agent's wrongful act. In fact, the principal will be liable even when there is an express prohibition against the tortious conduct involved… [100] Finally, the application of the principle is not confined to harm done to a third party in the course of dealing with that party…" 135 McHugh J proceeded to conclude that the company was liable for the negligence of the courier performing for the company its duty to make deliveries on behalf of its clients. 136 Notwithstanding the submissions advanced by Mr Kennedy that I should find that the relevant relationship between the first and/or the third defendants and the second defendant was that of principal and agent, on my analysis of the facts, I conclude that the first and third defendants were catching abalone in the course of an independent business in the pursuit of which the first defendant was the employee of the third defendant. Vis a vis the second defendant, I consider that the first and third defendants were independent contractors. 137 This brings me to a consideration of the decision of the Court of Appeal in Boylan Nominees Pty Limited v Sweeney [2005] NSWCA 8. In this case the plaintiff was injured when attending the convenience store of a service station. A refrigeration door fell on her. B had supplied the refrigerator and was responsible for its maintenance and service. B was called upon to repair the door when it was not closing properly and engaged C to attend to the repair. C attended to the door and it fell on the plaintiff shortly after he had finished working on it. The plaintiff was successful in an action against B at first instance where the trial judge held that B was vicariously liable for C's negligence. However, B's appeal was upheld. It was determined on appeal that C was not an employee of B and that B was not vicariously liable for C's conduct. Giles JA and Brownie AJA agreed with the judgment of Ipp JA. Ipp JA considered the judgment of McHugh J in Vabu and the significance that McHugh J attributed to the direct representation of the company by the courier. Ipp JA remarked (at [77]) in Sweeney: "His Honour plainly considered the 'direct representation' of the couriers to be significant in determining that the courier in question was a representative, as were factors such as the physical identification of the couriers with the enterprise of Vabu, the fact that the courier was not acting 'as an independent functionary who ordinarily contracted with members of the public or a section of it', the fact that the courier was subject to Vabu's general direction and control as to what work had to be done and the manner in which the work had to be executed, and that, when Vabu allocated work, a courier could not refuse to do that work. All these factors, which his Honour took into account in determining that Vabu was vicariously liable for the courier, show that McHugh J had in mind that a 'representative' was much more than a mere agent." 138 Ipp JA went on: "78 It remains to consider whether the approach propounded by McHugh J is binding on this Court. 79 In Northern Sandblasting Pty Ltd v Harris McHugh J was alone in expressing the views that he did. In Scott v Davis his Honour was in dissent." 139 His Honour then considered the majority judgment in Hollis v Vabu: "80 In Hollis v Vabu Pty Ltd the majority commented on the remarks of Dixon J (at 48) in CML (relied on by McHugh J) and said (at 39 [40]): 'This statement merits close attention. It indicates that employees and independent contractors perform work for the benefit of their employers and principals respectively. Thus, by itself, the circumstance that the business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is an employee. However, Dixon J fixed upon the absence of representation and of identification with the alleged employer as indicative of a relationship of principal and independent contractor. These notions later were expressed positively by Windeyer J in Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210 (at 217). His Honour said that the distinction between an employee and an independent contractor is "rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carried on a trade or business of his own".' 81 These remarks suggest that the majority considered that the remarks of Dixon J in CML are to be understood as being relevant to whether a 'relationship of principal and independent contractor' exists; that is, whether, on the facts, there has been an 'absence of representation and of identification with the alleged employer'. The majority did not regard Dixon J's remarks as a basis for widening the presently recognised grounds on which a finding of vicarious liability could be made. Indeed, as I have noted, they expressly eschewed considering whether the law should be changed for the policy reasons expounded by McHugh J. 82 The majority referred to Quarman v Burnett 6 M & W 499 as '[t]he foundation case for the present authorities'. In recent years (and prior to Hollis v Vabu Pty Ltd ), Quarman v Burnett has been cited with approval by the High Court. For example, in Scott v Davis Gummow J said (at 406 [218]): 'The judgment of Parke B, delivering the judgment of the Court of Exchequer in Quarman , is treated in this Court as the classic authority that at common law a person generally is not liable for the negligence of an independent contractor ( Stevens v Brodribb Sawmilling Company Pty Ltd at 43; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 577; Northern Sandblasting Pty Ltd v Harris at 366)'. And Hayne J (at 430[292]) quoted the following passage from the judgment of Parke B: 'It is undoubtedly true, that there may be special circumstances which may render the hirer of job-horses and servants responsible for the neglect of a servant, though not liable by virtue of the general relation of master and servant. He may become so by his own conduct, as by taking the actual management of the horses, or ordering the servant to drive in a particular manner, which occasions the damage complained of, or to absent himself at one particular moment, and the like.' As Hayne J observed (at 431 [292]), Parke B rejected (at 514) the wider proposition that 'a person is liable not only for the acts of his own servant, but for any injury which arises by the act of another person, in carrying into execution that which that other person has contracted to do for his benefit'. 83 Moreover, in Hollis v Vabu Pty Ltd Callinan J said (at 70 [121]), that the case called for the application of the statement of Jordan CJ in Torett House Pty Ltd v Berkman (1939) 39 SR (NSW) 156 (at 170) (which, his Honour pointed out, was approved by the High Court in Stevens v Brodribb Sawmilling Company Pty Ltd (at 30, per Mason J; at 41, per Wilson and Dawson JJ), namely: 'But there is no general rule that if a person employs an independent contractor to do an inherently lawful act, he incurs liability for injury to others occasioned by the methods incidentally employed by the contractor in the course of its performance (these not being methods necessarily involved in the doing of the act and necessarily injurious), by reason only of the fact that the act is "dangerous", "hazardous", or "extra hazardous".'" 140 Following the above review, Ipp JA concluded: "84 In the circumstances, in my respectful opinion, the wider proposition in relation to vicarious responsibility propounded by McHugh J in Hollis v Vabu Pty Ltd , Scott v Davis and Northern Sandblasting Pty Ltd v Harris does not presently represent the law in Australia. In my respectful opinion, it should not be applied by this Court. 85 I would add that, in any event, when regard is had to the criteria that his Honour applied in Hollis v Vabu Pty Ltd in determining whether the courier was a "representative" of Vabu, the circumstances that I have set out above are such that, even on the basis of the wider approach, Mrs Sweeney's argument cannot be upheld (cf Starks v RSM Security Pty Ltd [2004] NSWCA 351). On the basis of the circumstances obtaining in the present case, Mr Comninos was a true independent contractor and a principal in the transaction. No vicarious liability can attach to Boylan for his conduct." 141 The High Court granted leave to appeal from the decision of the Court of Appeal in Sweeney, and the decision in that appeal is pending. However, the parties are entitled to have my decision in this case now, and in reaching it I am, of course, bound by the decision of the Court of Appeal in Sweeney. 142 Accordingly, the position remains as stated in the majority judgment in Hollis and in the judgment in the Court of Appeal in Sweeney. A principal is not liable for the tortious acts of an independent contractor. 143 I conclude therefore that the second defendant is not liable for the negligence of the first defendant in the circumstances in which the vessel he was controlling came into collision with the plaintiff, and the second defendant is therefore entitled to the entry of judgment in his favour.

Damages 144 The plaintiff has proved his entitlement to recover damages from the first and third defendants, but how are they to be assessed? 145 The parties reached agreement as to the appropriate award of damages in this matter in the event that the quantum of damages is not limited under the Limitation of Liability for Maritime Claims Act 1989 (the "Limitation Act"). The Limitation Act aside, it is agreed that the appropriate assessment of the plaintiff's damages is $1.8 million. 146 However, the defendants have pleaded reliance upon the Limitation Act and the Convention on Limitation of Liability for Maritime Claims 1976 (the "Convention"). The defendants have in their pleading applied to this Court for a determination of the limit of the defendants' liability in accordance with the provisions of the Limitation Act and of the Convention. 147 Sections 5 and 6 of the Limitation Act provide: "5. This Act does not apply in relation to a ship to the extent that a law of a State…makes provision giving effect to the Convention in relation to that ship. 6. Subject to this Act, the provisions of the Convention…have the force of law in Australia." 148 Section 9 of the Act provides: "(1) Where a claim is made…against a person in respect of any liability of the person that may be limited under the applied provisions, the person may apply: (a) where a claim has been made against the person in proceedings in the Supreme Court of a State or Territory - to that Court… to determine the limit of that liability under the applied provisions, and the Court may determine that limit." 149 It has not been contended that there is any provision in New South Wales such as would enliven s 5 as set out above, and the first and third defendants have made their application under s 9 in relation to the plaintiff's claim. 150 The Convention enables those persons identified in Article 1 to limit their liability. Relevantly, Article 1 paras 1 and 2 provide: "1. Shipowners…as hereinafter defined, may limit their liability in accordance with the rules of this Convention for claims set out in Article 2. 2. The term 'shipowner' shall mean the owner, charterer, manager and operator of a seagoing ship." 151 Article 2 identifies claims that are subject to limitation: "1. Subject to Articles 3 and 4 the following claims, whatever the basis of liability may be, shall be subject to limitation of liability: (a) claims in respect of loss of life or personal injury…occurring…in direct connexion with the operation of the ship…and consequential loss resulting therefrom…" 152 Chapter II addresses the calculation of the limits of liability. It is unnecessary for the purposes of this judgment for me to consider the provisions of Chapter II. I am asked to determine whether the Convention has application, and if it does to publish my judgment to that effect. Counsel are agreed that it is not possible to attempt an assessment of the limitation of damages in this case pursuant to the Convention until such time as this judgment is published. 153 It is to be observed from what is recorded above that the persons entitled to limit their liability under the Convention are, relevantly, "shipowners". "Shipowner" means "the owner, charterer, manager and operator of a seagoing ship". Hence it follows that "the ship" referred to in Article 2 para 1 must be a seagoing ship. 154 Captain Downes, when asked whether, from his experience, he would describe the craft that struck the plaintiff as a seagoing ship, said that he would not (T 283). My initial reaction would have been to reach a like conclusion. However, the issue has to be addressed by reference to statutory provisions and with due regard to relevant case law. 155 After reference to the dictionary definitions, I propose to consider the various statutes which bear upon the meaning of "ship" and "seagoing" and then to review a number of cases. 156 How do the dictionaries treat the words "ship" and "seagoing"? 157 The primary meaning given to the word "ship" in the Macquarie Dictionary is "any vessel intended or used for navigating the water, especially one of large size and not propelled by oars, paddles or the like. 158 The Oxford English Dictionary goes further in providing this primary meaning: "A large sea going vessel (as opposed to a boat); spec (in modern times) a vessel having a bowsprit and three masts, each of which consists of a lower, top and topgallant mast." 159 The Macquarie Dictionary defines "seagoing" to mean: "1. Designed or fit for going to sea as a vessel.

2. Going to sea; seafaring" 160 The Oxford English Dictionary defines "seagoing": "1. a. Going on the sea, applied to a vessel which makes distant journeys as opposed to a coasting, harbour or river vessel. b. Capable of being used or suitable for use on a sea-going vessel; carried or conducted by sea

3. Travelling by sea, seafaring." 161 I turn to consider various statutory definitions which tend to broaden the dictionary definitions. I add emphasis where considered appropriate. 162 The Navigation Act 1901 (New South Wales) defines "ship" in s 3 as meaning "every description of vessel used in navigation not propelled by oars". 163 The Admiralty Act 1988 (Commonwealth) defines "ship" in s 3: "'Ship' means a vessel of any kind used or constructed for use in navigation by water, however it is propelled or moved, and includes: (a) a barge, lighter or other floating vessel; (b) a hovercraft; (c) an off shore industry mobile unit within the meaning of the Navigation Act 1912 ; and (d) a vessel that is sunk or is strained and the remains of such a vessel; but does not include (e) a seaplane; (f) an inland waterways vessel; or (g) a vessel under construction that has not been launched…" 164 The Shipping Registration Act 1987 (Commonwealth) defines ship in s 3: "'Ship' means any kind of vessel capable of navigating the high seas and includes: (a) a barge, lighter or other floating vessel; (b) a structure that is able to float or be floated and is able to move or be moved as an entity from one place to another; and (c) an air cushioned vehicle, or other similar craft used wholly or primarily in navigation by water; but does not include a vessel, structure, vehicle or craft declared by the regulations not to be a ship for the purposes of this definition." 165 In s 6 of the Navigation Act (Commonwealth) 1912 the following definition is expressed: "'Ship' means any kind of vessel used in navigation by water however propelled or moved, and includes: (a) a barge, lighter or other floating vessel; (b) an air cushioned vehicle or other similar craft, used wholly or primarily in navigation by water; (c) an off shore industry mobile unit; but…does not include an off shore industry mobile unit that is not self propelled." 166 Whilst the above statutory definitions have within them points of distinction, the common element is that the definitions of "ship" are broad. Certain classes of objects are expressly included or excluded in the statutory definitions, but a common element of the various statutes is that a ship means "any kind of vessel" either capable of or used in navigation by water. The (NSW) Navigation Act requires that the vessel be used in navigation; the Admiralty Act requires that it be used or constructed for use in navigation; the (Commonwealth) Navigation Act requires that the vessel be used in navigation by water; the Shipping Registration Act requires that the vessel be capable of navigating the high seas. 167 The concept of navigation was considered in Polpen Shipping Co. Limited v Commercial Union Assurance Co. Ltd (1943) KB 161. In that case the words "ship or vessel" were held not to include a flying boat. Atkinson J, at p 167, said this: "I do not want to attempt a definition, but if I have to define 'ship or vessel' I should say that it was any hollow structure intended to be used in navigation, ie, intended to do its real work on the seas or other waters, and capable of free and ordered movement thereon from one place to another ". (Emphasis added) The judge went on to distinguish the qualities of a flying boat. 168 Adopting Atkinson J's criterion, the concept of use in navigation involves an ability for "free and ordered movement from one place to another." 169 In Steedman v Scofield and Anor (1992) 2 Lloyds Law Reports 163 the issue arose as to whether a jet ski was a boat or a vessel or a ship. It was held to be none of these. Considering the meaning of the word "boat", Sheen J said at p165: "To my mind the word 'boat' conveys the concept of a structure, whether it be made of wood, steel or fibreglass, which by reason of its concave shape provides buoyancy for the carriage of persons or goods. Thus a lifeboat differs from a liferaft in that the boat derives its buoyancy from its shape, whereas a raft obtains its buoyancy from some method of utilizing air receptacles. The jet ski cannot be boarded until it has reached a speed - …at which it is stable enough for a rider to pull himself aboard out of the water. A person can not sit in a jet ski which is stopped in the water as he can in a boat. The manufactures do not describe it as a boat, but as 'personal watercraft'. Giving the word 'boat' its ordinary and natural meaning, I do not think it encompasses a jet ski." 170 His Honour went on at pp 165-166 to consider whether a jet ski was a ship: "I now turn to consider whether a jet ski is 'any other description of vessel used in navigation', and, therefore, a 'ship' for the purposes of the Merchant Shipping Acts. To come within this definition the craft under consideration must be (a) a vessel and (b) used in navigation. As to (a) a vessel is usually a hollow receptacle for carrying goods or people. In common parlance 'vessel' is a word used to refer to craft larger than rowing boats and it includes every description of watercraft used or capable of being used as a means of transportation on water." 171 Having considered the decision in Polpen (supra), Sheen J continued: "In my judgment a jet ski is not a vessel. Nevertheless I go on to consider (b), what is meant by 'used in navigation'? Navigation is the nautical art or science of conducting a ship from one place to another. The navigator must be able (1) to determine the ship's position and (2) to determine the future course or courses to be steered to reach the intended destination. The word 'navigation' is also used to describe the action of navigating or ordered movement of ships on water. Hence 'navigable waters' means waters on which ships can be navigated. To my mind the phrase 'used in navigation' conveys the concept of transporting persons or property by water to an intended destination. A fishing vessel may go to sea and return to the harbour from which she sailed, but that vessel will nevertheless be navigated to her fishing grounds and back again. 'Navigation' is not synonymous with movement on water. Navigation is planned or ordered movement from one place to another. A jet ski is capable of movement on water at very high speed under its own power, but its purpose is not to go from one place to another. A person purchases a jet ski for the purposes of enjoying 'the thrills of waterskiing without the ties of a boat and towrope' and for the exhilaration of high speed movement over the surface of water. The heading of the craft at any particular moment is usually of no materiality. (I use the word 'heading' because it is more appropriate than the word 'course'. The word 'course' denotes a constant direction on the same heading.) Indeed part of the thrill of driving a jet ski appears to come from frequent alterations of heading at high speed. It may be possible to navigate a jet ski but in my judgment it is not 'a vessel used in navigation'." 172 The meaning of "ship" was considered in the Supreme Court of Ireland in The "Von Rocks" case (1998) 2 Lloyd's Reports 198. The issue in this case was whether a backhoe dredger was a ship for the purposes of the International Convention Relating to the Arrest of Sea Going Ships 1952, which was given effect to by the Jurisdiction of Courts (Maritime Conventions) Act 1989 (IRE). Under that Act, "ship" was defined to include "every description of vessel used in navigation", and "vessel" was defined to include "any ship or boat or any other description of vessel used in navigation". At first instance Barr J determined that the dredger was not a ship for the purposes of the statute and the Convention. However, that decision was reversed on appeal. 173 At first instance, Barr J said as to the meaning of "ship" (at 200): "Whether a craft is a ship or vessel for statute depends on the facts of each case. Most of the relevant judicial authorities are conveniently summarised in the following passage from Halsbury's Laws of England, Vol 43, 4th ed., para 91: '…Whether a craft comes within the foregoing meaning of a ship depends on the facts of each case: the statutory definitions are intended to enlarge the meaning of "ship". To be a ship, a vessel must be used in navigable waters, either inland or at sea and although she must be constructed for navigation, it is not necessary to the definition that she should be able to navigate under her own power. The presence of a rudder and the manning of the vessel by the crew are important as showing that a vessel is a ship, but the absence of either does not mean that a vessel is not a ship. The purpose for which a vessel has been and is being used is also material when considering whether she is used in navigation.'" 174 On appeal, Keane J stressed the importance of the particular statutory definition of vessel in The Von Rocks case. The definition contained the word "includes". Keane J pointed out, at p 206, that the use of this word "indicates that the definition is not intended to be exclusive or exhaustive". His Honour went on to make these observations as to the meaning of the word "ship" (at 207): "The preponderance of judicial opinion would support the view that, provided the craft was built to do something on water and, for the purpose of carrying out that work, was so designed and constructed as to be capable of traversing significant water surfaces and did in fact regularly so traverse them, it is capable of being classified as a 'ship', despite the absence of any form of self propulsion or steering mechanism such as a rudder…" 175 Article 2 of the Convention focuses attention on the expression "seagoing ship" because a shipowner who may limit liability may do so in relation to a "seagoing ship" (Article 1(2)). 176 In Salt Union Limited v Wood (1893) QB 370 the issue was whether a screw steamer of about 142 tons gross tonnage used exclusively for the carriage of salt on river waters to Liverpool was "a seagoing ship". It was determined by Lord Coleridge CJ and by Cave J that it was not, and that its capacity to go to sea was not to the point. Lord Coleridge said (at 374): "It is a simple proposition to hold that a seagoing ship means a ship that does go to sea… No doubt she could go to sea; but she does not go." 177 In The Union Steamship Co. of New Zealand Limited v The Commonwealth (1925) 36 CLR 130, the definition of Lord Coleridge was followed, Isaacs J stating (at 145) that seagoing "means simply that the ship does go to sea". 178 This brings me to a description of the vessel owned by the first defendant and to a consideration of its function. 179 The vessel in question is depicted in the various photographs contained in Exhibit C. The evidence discloses that the hull was commissioned in 1996 and the vessel was rigged out to be used as an abalone diving boat. It is then a custom-made boat, named a Sea Devil, and it is powered by a four stroke, 115 horsepower Yamaha motor. The vessel is fitted with a wave breaker windscreen towards its bow. Its use is for abalone fishing and the first defendant used it as a means of transport to the fishing area to be worked and he used as a working boat. The fittings include, towards the stern on the starboard side, a hose and reel. There is a compressor on the port side, and the vessel is hence equipped with the means of providing the first defendant with air when he is fishing for abalone. Whilst the first defendant is diving, his deckhand pays out the hose from its reel. The vessel also has an L-shaped bar erected on the starboard side with the horizontal arm extending towards the stern. That bar is three feet in height and is used in cleaning the abalone. When not in use, the vessel is removed from the water and towed from the launching site on a trailer. The evidence was that the vessel has been launched from "boat ramps up and down the coast" and has been used in diving operations between the Victorian boarder and as far north as Kiama (T 355). In the year prior to October 2001 it was used in the general Kioloa/Brush Island area twice per week. Abalone taken from the sea was stored in crates on the deck for transport to shore. The vessel is approximately five metres in length and, save for the windscreen described, is essentially an open vessel. There was no evidence as to its tonnage. 180 Its steering mechanism and construction were such as to make it highly manoeuvrable. 181 When one considers the various statutory definitions I have reviewed and the authorities to which I have referred, it seems to me that the first defendant's vessel has many of the fundamental characteristics of a ship: it is a highly manoeuvrable vessel used in navigation by water; it goes to sea, albeit that it would appear to operate in waters close to the coast; and it is used in ocean fishing for abalone. 182 Although there is no specific evidence to this effect, the vessel in question would not appear to be a vessel designed for use outside coastal waters, and it is questionable whether it would be considered capable of navigating the high seas for the purposes of the Shipping Registration Act. In expressing this view, I attribute to the term "high seas" the definition in Article 86 of the United Nations Convention on the Law of the Sea 1982: "All parts of the sea that are not included in the exclusive economic zone, in the territorial sea or in internal waters of a state." 183 Considering that definition, it is to be doubted that the first defendant's vessel would be used on the high seas. However, it is a vessel which is regularly used at sea and, prima facie, it seems to me that it satisfies the various fundamental statutory concepts relating to a ship. 184 It is, of course, small and it is equipped with no cabin. However, I do not consider its limited tonnage disqualifies it from being categorised as a ship. 185 The Limitation Act was passed to give effect to the Convention. It is of significance that by Article 15 of the Convention adopted, the opportunity was provided for a State Party to limit the operation of the Convention so as to exclude from its scope ships of less than 300 tonnes. Article 15(2) provides: "A State Party may regulate by specific provisions of national law the system of limitation of liability to be applied to ships which are: (a) according to the law of that State, ships intended for navigation on inland waterways; (b) ships of less than 300 tons." 186 There has been no relevant enactment to limit the application of the Convention so as to exclude ships of less than 300 tons. Hence the provisions of Article 15(2) suggest that, prima facie, in the absence of some enactment addressing the question, ships of less than 300 tons are within the scope of the Convention. 187 In Noferi & Ors v Smithers [2002] NSWSC 508, claims were made for personal injury arising out of an accident involving a motorboat. The plaintiffs were swimming between two islands in the complex known as Five Islands off Port Kembla when they were struck by a motorboat driven by the defendant. The defendant sought an order that his liability for damages was limited pursuant to the Limitation of Liability for Maritime Claims Act. The issue of the application of the Convention was resolved by agreement during the course of the hearing, and Newman AJ went on to assess damages upon the basis that liability was limited by the Convention. 188 After consideration of the statutes and the cases I have reviewed, and having considered the features of the first defendant's vessel and the use to which it has been put, I have decided that the vessel is properly to be regarded as a seagoing ship for the purposes of the Convention pleaded. Hence, the first defendant and the third defendant as the owner and the operator of the vessel have the protection of the Convention in the sense that it limits the extent of their exposure to damages payable to the plaintiff.

The cross claim 189 The first defendant claims contribution from the cross defendant pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. It is incumbent upon the first defendant to prove that the cross defendant would, if sued, had been liable to the plaintiff for the harm that the plaintiff suffered. 190 The case against the cross defendant is, of course, essentially based upon his omission to prevent harm occurring to the plaintiff. Mr Perry appropriately referred to the judgment of Brennan J, as he then was, in Sutherland Shire Council v Heyman (1984-85) 157 CLR 424 at 478 where his Honour drew attention to the distinction between an act affecting another person and an omission to prevent harm. His Honour said this (at 478): "If foreseeability of injury were the exhaustive criterion of a duty to act to prevent the occurrence of that injury, legal duty would be coterminous with moral obligation: see Smith and Burns, 'Donoghue v Stevenson - The Not So Golden Anniversary', Modern Law Review, vol. 46 (1983), p. 147). Lord Atkin's definition of the person who is in law my 'neighbour' is not so wide: it is a person who is affected 'by my act', not by my omission. The judgment of Lord Esher M.R. in Le Lievre v. Gould ([1893] 1 Q.B. 491), at p. 497 which Lord Atkin cites ([1932] A.C., at p.581) makes it clear that the general principle expresses a duty to take reasonable care to avoid doing what might cause injury to another, not a duty to act to prevent injury being done to another by that other, by a third person, or by circumstances for which nobody is responsible. I can be liable only for an injury that I cause to my neighbour. If I do nothing to cause it, I am not liable for the injury he suffers except in those cases where I am under a duty to act to prevent the injury occurring. Indeed, he is not in law my neighbour unless he is foreseeably 'affected' by my conduct. But he can be said to be 'affected' by my omission to act to prevent injury being done to him only if I am bound to act and do not do so. He cannot be said to be affected by my omission to act if I am not under a duty to him to act. Lord Atkin's 'neighbour' test involves us in hopeless circularity if my duty depends on foreseeability of injury being caused to my neighbour by my omission and a person becomes my neighbour only if I am under a duty to act to prevent that injury to him. Foreseeability of an injury that another is likely to suffer is insufficient to place me under a duty to him to act to prevent that injury. Some broader foundation than mere foreseeability must appear before a common law duty to act arises. There must also be either the undertaking of some task which leads another to rely on its being performed, or the ownership, occupation or use of land or chattels to found the duty…" 191 In Heyman Gibbs CJ stated the general rule (at 443): "…as a general rule, a failure to act is not negligent unless there is a duty to act. The duty may arise because of the conduct of the defendant himself or it may be created by statute…" 192 Mr Perry also cited Modbury Triangle Shopping Centre v Anzil (2000) 205 CLR 254 and in particular the judgment of Gleeson CJ at 265-266 where the Chief Justice referred to the dicta of Brennan J in Heyman. 193 How does the first defendant express his claim against the cross defendant? 194 It is contended that the cross defendant was negligent in the following respects:

(i) in failing to ensure that the boat was equipped with a diver's flag;

(ii) in failing to ensure that approaching craft were warned of the presence of the plaintiff and the cross defendant in the water by keeping the boat in proximity to the men in the water;

(iii) in failing to ensure that he and the plaintiff had flags on their floats. 195 It is not contended that the boat from which the plaintiff and the cross defendant entered the water was displaying a diver's flag or, indeed, that it was equipped with one, nor is it contended that either the plaintiff or the cross defendant had a flag on his float. Nor do I find that after the plaintiff and the cross defendant entered the water the boat remained in cross proximity. The plaintiff said that when he last saw the boat it had drifted some 150 feet away (T 47), and that was a few minutes before he was struck. The plaintiff's son said that the boat was fifty to sixty metres away from the plaintiff and the cross defendant when he first noticed the other vessel approaching (T 154). The cross defendant said that the boat was fifty to sixty metres away when the accident happened (T 757). The first defendant said that the cross defendant's boat was "well over 100 metres" east of the point of the accident at the time of the accident. The varying estimates are understandable but they make it difficult to make a precise finding as to how far the boat had drifted from where the plaintiff and the cross defendant were when the collision occurred. I find on the probabilities that the boat was somewhere between fifty and 100 metres away from the plaintiff when the plaintiff was struck. The location of the boat was not such as to alert the first defendant to the plaintiff being where he was in the water. 196 In considering the cross claim, it is important to have regard to the relationship between the plaintiff and the cross defendant and the experience that each of them had had in spearfishing. 197 Both men were about the same age, the plaintiff being a few months older than the cross defendant. The two men had met through their sons who were already friends. 198 The plaintiff had been snorkelling for ten years before the accident. He regularly went with his family to Kioloa and fished off Brush Island, which he regarded as a very good place to fish. He and his family regularly stayed in the area in the Easter and Christmas holidays, and sometimes stayed down in the area overnight at other times. He had been frequenting this area for six years approximately before the accident. Sometimes he entered the water from the mainland and swam across to the island, which he would then cross by foot before entering the water on the eastern side of the island. On other occasions he went out to the island in the cross defendant's boat. He said this happened at least fifteen to twenty times. 199 The plaintiff's family and the cross defendant's family shared their holidays together, staying in the same camping place. 200 The plaintiff had a boat licence twenty-three years ago, when he was required to sit for an exam. He did not have available to him in 2001 the Waterways handbook to which I made earlier reference. The plaintiff taught himself to spearfish. 201 The cross defendant started snorkelling at the age of fifteen. He belonged to the Bulli Police Boys' Club and he stayed there for ten to twelve years. He said he was taught scuba diving at the boys' club. Having been trained himself, he became a scuba diver instructor so that he could pass his knowledge on to other members of the club. This did not accredit him to teach diving outside the Police Boys' Club. He married in 1982 and stayed away from spearfishing for ten years, resuming it in 1990 approximately. By the time he met the plaintiff he had resumed his diving and used to go to Brush Island to spearfish. The cross defendant's evidence was that they dived together regularly, and that up to October 2001 they would have done so on average forty or fifty times per year. 202 Nothing turns on this, but until the day before the accident, the cross defendant had been using a hand spear rather than a hand gun. 203 The evidence reviewed establishes that both the plaintiff and the cross defendant were experienced amateur fishermen and that they were good friends who regularly fished together off Brush Island. I accept that both men were very familiar with the area where the accident happened. 204 The evidence would not support a finding that the cross defendant had a greater expertise or knowledge concerning spearfishing than the plaintiff. It emerged in cross examination of the cross defendant that in the time that he was fishing with the plaintiff until the holiday on which the accident happened that he was using a hand spear to which no float was attached and that he shared the use of the plaintiff's float with him. He said he would tow the float if the plaintiff was having a rest. 205 The cross defendant owned a number of boats prior to 2001 (T 759). He held a boat licence which he renewed as required. He received copies of the Waterways handbook from time to time, although not every time he had his licence renewed. He made it his practice to familiarise himself with the content of those documents. 206 The cross defendant gave evidence of the use of the boat with the plaintiff. He explained that sometimes they used it and sometimes they did not. The principal reason for taking the boat was that "it was easier" and they "didn't have to swim so far". He was asked this question and gave this answer (T 739): "Q. When you went diving with Mr Smith over these years leading up to 12 October 2001 was either of you in charge of the other or either of you controlling the other or what? A. No." 207 The plaintiff gave evidence that when the boat was used, it was directed away from the area of the bomboras after he and the cross defendant entered the water. He said that procedure was followed on the day of the accident and he would have been the one who directed the movement of the boat. I refer to the evidence at T 134: "Q. And you said in your evidence a little while ago that there was some practice on yours and Mr Renton's part that when you were skindiving out near this area where these bommies were that if you went in a craft they were directed away after you entered the water? A. That's correct. Q. And on this particular occasion do you recall who, if anyone, directed the craft away? A. It would have had to have been me if they were directed, because the boys understood that, the boys understood that the area we were in had underwater bommies. They'd dived before, so if they were directed it would obviously have been me, because I was the last one out of the boat, but like I tried to say earlier and I didn't mean to cross any legal boundaries here, but it was a common navigation thing that you just do not hang around bommies or rock area. Q. When you say you would probably have directed them away, would you have directed them away by asking them to use the motor to drive away or to just let themselves flow with the prevailing wind which was coming in from the nor-west? A. It was, again I'll use that term common practice, a navigational safety technique, that the boat was in neutral or turned off if there was people in the water and I believe that it would have been, I mean, the boys could possibly have drifted with the wind or they might have motored to a, away from the bomboras to make sure they were safe and then drifted. But I, I can't recall giving them directions to motor away or drift away. Q. And do you have any recollection of the motor being activated to take them away from the area? A. No, I haven't, no, can't honestly say. Q. And are you able to tell us who was, in fact, in charge of the vessel after you left it? A. It was, Colin was at the wheel, Colin Renton. Q. He was Mr Renton's son? A. That's correct." 208 Against the background of the knowledge and experience of the plaintiff and the cross defendant and the procedures they followed when spearfishing together, I turn to consider the evidence upon which the first defendant relies on the cross claim. 209 Mr Black referred at the outset to the evidence of Captain Downes (at T 315): "Q. If a boat intending to discharge spearfishermen into an area on the southeast corner of Brush Island, did in fact discharge those spearfishermen in that area, can I suggest to you that such a skipper should remain in close proximity to where they are diving? A. You're talking about the dive boat. Q. A boat that had discharged spearfishermen? A. Yes, yes, in the vicinity, as I said between 30 and 75 metres. Q. And in that situation that boat should display a dive flag? A. Should, yes." 210 Mr Brown gave evidence that the master of the boat should keep an eye on those fishermen that have entered the water and he should also keep an eye out for approaching craft (T 569). 211 Once the cross defendant entered the water followed by the plaintiff, it was the cross defendant's son who, in the plaintiff's perception at least, was in charge of the vessel (T 134). He was only sixteen years of age. He was not called to give evidence but there is no suggestion that the cross defendant had given his son any particular instructions. The plaintiff's evidence was he could not recall whether he gave them directions to motor away or to drift away, but it was certainly his intention that the boat would not remain where it was at the time the plaintiff entered the water. 212 The first defendant said, and I accept, that if, when he was approaching the channel between the rocky outcrop and the bombora, he had seen a boat in the near vicinity of the south eastern corner of the island, he would have given it a wide berth (T 372). Mr Leather gave evidence that on occasions that he had been with the first defendant, the first defendant had not passed through the channel when there were boats on the eastern side of the rocky outcrop (T 481-482). 213 Mr Black submitted that Mr Renton was aware that a dive flag if displayed would alert anyone approaching that there was a fisherman in the water, whether the flag was displayed on a float or a boat (T 787). Mr Black also drew attention to other concessions made by the cross defendant in cross examination: that if he had remained on board having discharged two spearfishermen, he would have kept an eye on the areas around to warn off any approaching vessel (T 793); and that the boys left on the vessel lacked the appreciation that he had of risks that might arise (T 795). 214 That the Renton boat did not remain near the plaintiff and cross defendant is to be regarded as a consequence of a decision jointly reached. For his part, the plaintiff described it as "a common navigation thing, that you just do not hang around bommies or rock area" (T 134), and that he was the one who probably directed the boys to leave. Consistently with the evidence of the plaintiff, the cross defendant said (T 744) (referring to himself and the plaintiff): "We have always considered that that particular spot around the rocky outcrop and those bombora areas was considered dangerous". He added (at T 745): "Q. In what way? A. Well the waves actually work off these submerged bomboras and it was a dangerous spot to have a boat. Q. Do you have a recollection now as to what the conditions were at the time? A. Yes. Q. Could you tell the court please what recollection you have? A. We drove up to near the rocky outcrop and there is a submersed bombora, at least one, submersed bombora east of that point and we could see that that bombora was quite capable of erupting a wave from it. HIS HONOUR: Q. Of what? A. A wave would erupt up off that bombora. PERRY: Q. What about generally in the area between the channel and the south eastern tip, what was the surface of the ocean like, do you recall or not? A. It was a calm day, but taking into consideration that it was considerably low tide, the submerged bomboras were fairly close to the surface and we considered them a dangerous place to be." 215 I referred earlier to the evidence of Captain Downes that it was for the skipper to ensure that the boat remained in the vicinity of the divers. Summarising his evidence (T 318), he thought that, if need be, the boat could have been parked somewhere on the other side of the rocks. Mr Vanzino gave evidence that he had moored near the south-eastern corner of the island (T 534). He said he used to anchor in the bay facing south, as I understand it, to the west of the channel. Mr Brown said he had moored his boat in the south-eastern corner of Brush Island, depending on the conditions (T 568-569). The first defendant said he had anchored a boat in the south-eastern corner of the island. He said he would have done so in most conditions without experiencing difficulty (T 371). 216 It is apparent from the evidence to which I have referred that there was a conflict as to the practicability of keeping the boat proximate to the men in the water. No doubt this could have been done by keeping the vessel under power. However, it seems to me that had the plaintiff brought proceedings against the cross defendant, he could hardly have complained in those proceedings that the vessel was not kept close to the divers when he and the cross defendant decided it ought not to be kept there and when he was the one who sent the boat away. 217 Having regard to the relationship between the plaintiff and the cross defendant, and having regard to the extent of the plaintiff's experience, I am not persuaded that the cross defendant was negligent in failing to ensure that he and the plaintiff had flags on their floats. Whether he had a flag on his float or not, was a matter that the plaintiff was well able to determine for himself. In my opinion, the cross defendant owed the plaintiff no duty to see that float flags were provided. The plaintiff and the cross defendant set the rules under which they were engaging in their joint activity of spearfishing. 218 Of course, the cross defendant had provided the boat for this outing and he was technically in control of it. Mr Black submitted that this circumstance enlivened the operation of reg 6 of the Navigation (Collision) Regulations made pursuant to the Navigation Act. Regulation 6 is headed "Diving operations" and provides in sub-para (1): "(1) Notwithstanding rule 27 of Schedule 1, a vessel engaged in diving operations shall exhibit the following: (a) from sunset to sunrise, and from sunrise to sunset in restricted visibility 3 all-round lights in a vertical line where they can best be seen - the highest and the lowest of these lights shall be red and the middle light shall be white, (b) by day, International Code flag 'A' or a rigid replica thereof…" 219 The expression "Diving operations" is not defined in the regulations. Mr Black submitted, on behalf of the first defendant, that the expression must embrace the operation in which the plaintiff and the cross defendant were engaged. Mr Perry has submitted to the contrary. 220 I referred earlier to evidence that the plaintiff gave when he was asked whether he considered that a boat from which a spearfisherman was operating should show a dive flag. The plaintiff gave a negative response to the question asked. He considered the boat was a means of transport to get to where they were going and to avoid the walking and swimming which would have been involved had the plaintiff and the cross defendant swum across from the mainland. He said, in part: "The boat was merely used as a transport. We didn't keep it close with a flag on it because we didn't consider we were diving from a boat. We considered ourselves to be rock hopping. It was a luxury having a boat to get us where we were going…" (T 73) 221 The cross defendant asserted that at the time of this accident he did not consider it was necessary to have a dive flag for spearfishing activities. He drew on the Waterways Safety Handbooks, to which I referred earlier (T 759-760). The cross defendant's evidence as to his state of knowledge was not altogether satisfactory, as later in cross examination he agreed at one point that as at October 2001 he was aware of the use of dive flags on boats being used to discharge spearfishermen (T 763). Later again (at T 765), he did not embrace the concession earlier made. 222 I entertain some doubt as to what is covered by the expression "Diving operations" for the purposes of reg 6. However, assuming, without deciding, that the activity in which the plaintiff and the cross defendant were engaged amounted to diving activities within the regulation, and that the cross defendant was in breach of the regulation, I am not satisfied that this would have availed the plaintiff had he chosen to sue the cross defendant. The position is that the plaintiff was party to a decision that the boat be sent away. He was party to a decision which had the effect that if there had been a dive flag displayed on the vessel, such display would have been unlikely to have alerted the first defendant to the position of the plaintiff in the water and to have avoided the collision. In so concluding, I am mindful of the opinion expressed by Captain Downes that once the boat was seventy-five metres away it was not in the immediate vicinity and would not have alerted the first defendant to the presence of divers in the water (see Exhibit T p 5 and T 321). 223 I am satisfied on the evidence that both the plaintiff and the cross defendant regarded the use of the boat only as a convenient means of transport to a place from which they could commence their spearfishing activity. I am equally satisfied that neither the plaintiff nor the cross defendant contemplated that once they entered the water the boat was to have any part to play for so long as they continued to spearfish. 224 For the above reasons, I conclude that had the plaintiff sued the cross defendant, the cross defendant would not have been liable in respect of the damage which the plaintiff suffered. Hence, I conclude that this cross claim must fail.

Formal orders 225 1. Verdict and judgment for the plaintiff against the first and the third defendants in a sum to be determined.

2. Determination that the liability of the first and the third defendants is limited under the Limitation Act and the Convention.

3. Verdict and judgment for the second defendant on the plaintiff's claim against him.

4. Verdict and judgment for the cross defendant on the first defendant's cross claim.

6. The matter is to be relisted by arrangement with my associate for the purpose of determining the damages to be awarded pursuant to the Limitation Act and the Convention, and also for the purposes of receiving submissions as to costs. **********

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