Deliberately using Google Keywords to falsely advertise it was a government Fair Work agency was a bad move for workplace relations advisor Employsure because it resulted in a hefty $3 million penalty.
The penalty order was made by the Federal Court of Australia in Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5 (a Full Court appeal) (Rares, Stewart and Abraham JJ, jointly agreeing).
This is an analysis is followed by marketing commentary from Michael Field.
If a person is injured while under the influence of drugs or alcohol, the Civil Liability Act 2002 (NSW) mandates a minimum reduction in damages by 25%. But the reduction applies only if the person’s capacity to exercise reasonable skill and care is impaired by intoxication. And when capacity is impaired, the Court determines the extent of the reduction by considering the circumstances.
The New South Wales Court of Appeal considered both impairment and reduction of damages awarded for an injury on a pleasure boat, which the plaintiff suffered whilst intoxicated, in the decision of Payne trading as Sussex Inlet Pontoons v Liccardy [2023] NSWCA 73 (Beech-Jones JA and Basten AJA agreeing, Brereton JA dissenting in part) (20 April 2023).
This is an analysis.
The Facts: a social outing on a boat
The Plaintiff, Liccardy, was one of a group of 10 friends who were participating in a pre-arranged social outing on the water at Sussex Inlet on the Australia Day holiday weekend in 2020. They hired a pontoon boat from Sussex Inlet Pontoons, driven by a “suitably skilled master” provided by the boat owner.
Liccardy had meal at about 11:00 am and started drinking. By about 2:15 pm, he had consumed 4 full strength cans of beer, and had partly consumed a fifth. He had also consumed 2 lines of cocaine. According to expert evidence, he had a blood alcohol concentration level of 0.11%. Yet, according to that same evidence, his co-ordination was not impaired.
Strong winds unexpectedly blew an Akubra hat into the water, belonging to a member of the group. Liccardy asked the master if he could dive into the water to retrieve the hat. The master opened a gate on the boat, Liccardy dived in and retrieved the hat. The master manoeuvred the vessel so that Liccardy could climb the ladder fixed to the stern to board. The propeller was also located on the stern.
As Liccardy swam across the body of water adjacent to the stern, he felt two knocks to his left leg caused by the rotating propeller blades and realised that he had suffered two lacerations about 20mm apart.
As a result of these injuries, the Court found that Liccardy: “underwent extensive and painful physiotherapy to regain strength in his leg. He was off work for about 3 months during his post-injury rehabilitation. [He] continues to experience knee pain on most days. He walks with a limp and his walking tolerance is limited.”
The trial/primary judge found that Sussex Inlet Pontoons owed a duty of care to Liccardy: “to take reasonable care to avoid foreseeable risk of injury” and that the duty “extended to providing a competent and qualified master for the vessel for the outing”. See section 5B Civil Liability Act 2002 (NSW). Further, the master had not used the “correct maritime safety manoeuvre [which] would have been to turn the vessel to starboard and then circle back whilst at all times keeping the plaintiff in the master’s line of sight and away from what was described in the evidence as the hazard zone constituted by the area of the vessel’s propellor.”
The trial/primary judge awarded a total of $464,773.25, for economic, non-economic and other damages. He found that Liccardy’s “intoxication did not contribute to his injury”, and damages were not to be reduced for contributory negligence.
The issues for the Court of Appeal
The Court of Appeal found that the duty of care was to take precautions against the “risk of harm” that “if a person in the water came into contact with the moving propeller of a motorised vessel, injury from the propeller might occur”.
The trial judge found that the master had breached the duty of care by not following maritime safety protocols, and that Sussex Inlet Pontoons liable vicariously. This finding of negligence was not challenged on appeal.
The issues on appeal were whether section 50 of the Civil Liability Act 2002 (NSW) applied, and if so, how it applied. That is, was Liccardy contributorily negligent, and if so, whether the fixed reduction of 25% should apply to the damages, or the damages be reduced by a greater amount.
Section 50 Civil Liability Act 2002 (NSW)
The Court of Appeal said that section 50 was enacted “partly in recognition of the experience that intoxication increases the risk of accidental injury, and with the intent that such persons should themselves bear the consequences of their self-induced intoxication … [to limit] the ability of intoxicated persons to recover damages”. [p 1 judgment]
In his second reading speech introducing the Civil Liability Act 2002 Premier Bob Carr said:
“The bill will clamp down on plaintiffs who are injured while they are intoxicated. A defendant will not owe a plaintiff a higher standard of care simply because the plaintiff was intoxicated. Nor will personal injury damages be available for an intoxicated person unless the accident was likely to have occurred even if the person had not been intoxicated. If the accident is likely to have occurred anyway, the intoxicated person’s damages will be reduced …” [p 45 judgment]
Section 50 of the Civil Liability Act 2002 is as follows:
- This section applies when … the person … was at the time … intoxicated to the extent that the person’s capacity to exercise reasonable care and skill was impaired.
- A court [must be satisfied] that the death, injury or damage to property … is likely to have occurred even if the person had not been intoxicated.
- If the court is satisfied that the death, injury or damage to property … is likely to have occurred even if the person had not been intoxicated, it is to be presumed that the person was contributorily negligent unless the court is satisfied that the person’s intoxication did not contribute in any way to the cause of the death, injury or damage.
- When there is a presumption of contributory negligence, … the damages … are to be reduced …by 25% or a greater percentage determined by the court …
“Intoxicated” is defined in section 48 of the Civil Liability Act 2002 (NSW) as “a reference to a person being under the influence of alcohol or a drug”.
The Court of Appeal’s consideration
The trial/primary judge found that section 50 did not apply because Liccardy’s physical capacity had not been impaired as required under section 50(1).
The Court of Appeal disagreed, because impairment applied to judgment, not just physical capacity such as co-ordination.
The test to be applied under section 50 was that Liccardy would be contributorily negligent if he was: “intoxicated to the extent that [his] capacity to exercise reasonable care and skill was impaired” due to drug and alcohol consumption at the relevant time under ss 50(1) which was when he was required “to swim in or near the hazard zone [where the propeller motor was located] and climb the stairs at the stern of the boat”. [p 61 judgment]
It was impaired because “Swimming towards the stern of a boat with a propeller motor in order to climb a ladder requires the exercise of a reasonable level of judgment about one’s own safety, including about matters such as the strength of any wind or current, the motion of the boat, the state of the engine and where to swim to avoid risk while still climbing on board.” [p 63 judgment]
The Court of Appeal then considered whether the accident was likely to have occurred without intoxication, as required under section 50(2), and whether intoxication contributed to the accident, as required under section 50(3).
Whether the test is: was there a “real and not remote chance” or was it “more probable than not” that the injuries occurred “if the relevant person was not intoxicated” Beech-Jones JA and Basten AJA said he would “still have passed near the engine and been struck by the propeller”.
They added that “Mr Liccardy’s intoxication [contributed] to the cause of his injury as someone who was not intoxicated may well have swum further away from the motor”. [p 64-68, judgment]
Brereton JA said that intoxication was not necessary to cause the injuries as the master’s “incorrect manoeuvring of the vessel and the failure to disengage the propeller” were enough on their own to cause the accident. [p 5, judgment]
Finally, the Court of Appeal considered whether the damages be reduced by the minimum amount of 25%, or by a greater amount, in accordance with section 50(4).
It said that [Given Mr Liccardy’s belief that] “the engine was off and the fact that it was Mr Allred’s negligent act that required him to approach the ladder from the direction he did … a reduction of 30% [for contributory negligence was] appropriate”.
As a result, the Court of Appeal upheld the appeal and ordered a reduction in the amount awarded by 30%.
Comment
Section 50 of the Civil Liability Act 2002 (NSW) does what the legislature intended. – it reduces the amount of damages for intoxication.
Not all instances of intoxication will result in a reduction of damages.
The circumstances will determine whether capacity is impaired by intoxication.
The Court of Appeal quoted with approval the case of Amanda’s On the Edge, where a guest who had drunk “five to six beers and one or two bourbons” during a wedding reception. They were injured when they “walked though a garden bed and fell over an unguarded wall” on the way to the carpark.
In that case, the Court found that the guest was not “relevantly intoxicated” because they exercised the degree of care and skill required, which was “that which is necessary to “walk … over open ground to get to a destination””. [p 43, judgment]
