Frost & Ors v Warner S195/2000 [2001] HCATrans 217 (29 May 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S195 of 2000

B e t w e e n -

SUSAN MARY FROST

First Appellant

MELISSA FROST by her next friend SUSAN MARY FROST

Second Appellant

DONALD MARTIN

Third Appellant

and

CAROLYN WARNER

Respondent

GLEESON CJ

GAUDRON J

GUMMOW J

KIRBY J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 29 MAY 2001, AT 10.15 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR G.R. KENNETT, for the appellants. (instructed by McDonald Johnson)

MR G.K. DOWNES, QC: If the Court pleases, I appear with my learned friend, MR S.J. MOTBEY, for the respondent. (instructed by Selby Anderson)

GLEESON CJ: Mr Jackson.

MR JACKSON: Thank you, your Honours. Your Honours, a question arises in relation to my learned friends notice of contention and our submissions we are happy to make in relation to that at a later point and may I proceed with the appeal as such and come to the notice of contention in due course.

Your Honours, as is apparent from the written submissions, the appeal is concerned with two issues of liability of the respondent, one personal, one vicarious. May I deal with them in that order, and in relation to them may I go very briefly to the underlying facts and they are these: that five young children died when the respondent's vessel sank in Port Stephens on a journey from Moffatts Oyster Barn to Soldiers Point Marina on 8 February 1990. They died when the vessel sank and they were stuck, caught, in a compartment or cabin at the bow. Considerable efforts to free them all failed and, as the primary judge found, the tragedy was caused by the overcrowding, far too many people and obviously far too many people, aboard the vessel.

I will come to the exact finding in a moment, your Honours, but may we say, by way of introduction, that was not a passing observation of the trial judge; it was a finding made after hearing oral evidence from at least three expert witnesses and arriving at a conclusion in relation to that evidence, and the conclusion was that the primary judge accepted the evidence of an entirely independent expert witness - when I say independent, he had not been engaged by any of the parties, but had been involved in the coronial inquiry, to Mr Bundschuh, and his evidence was to the effect that the vessel was grossly, dangerously and visibly overloaded.

Your Honours will see that in volume 2 at page 358. Commencing at about line 25, your Honours will see a reference to Mr Bundschuh's evidence and that goes through that page, to the bottom of the page. He referred to:

the purpose of his inquiry . . . reserve of stability was very poor. Probably the worst I have ever come across."

Then, your Honours, if one goes on the next page, page 359, through to about line 36 on that page. That evidence was accepted on page 360, about lines 19 to 20 and between lines 25 and 30 on page 360 and, in particular, could I refer your Honours back to page 359, about lines 15 to 18.

Now, your Honours, could I just add that it was not in dispute that there were, in fact, 49 people aboard the vessel - that is at page 349, about line 40 - and, your Honours, it was plain, in a context where the boat was, as his Honour found, visibly overloaded, that the respondent knew that the vessel was overloaded and, as the judge found, that was manifest, but, in addition, the respondent actually knew how many people were aboard. Your Honours will see that, first from her record of interview after the accident in volume 2 at page 332, lines 15 to 35, where the - an interview with Detective Coffee. Your Honours will see the passage from lines 15 to 35. She "thought forty three" and the highest number that had previously been on the vessel was about 20.

KIRBY J: This is 322, is it, or 332?

MR JACKSON: I am sorry, 332, your Honour. Now, your Honours will see she said she thought 43 and the number is actually 49, but there was evidence which allowed the judge to form the view that she may well have known that there were 49 because, your Honours, there was evidence not the subject of cross-examination from two of the appellants that when the party had been having lunch at the Oyster Barn one of the persons who was there had made a speech in which the person had referred to there being the 49 people aboard. Your Honours will see that referred to in volume 1 in the evidence of the appellant, Susan Frost, at the top of page 35 and your Honours will see down to line 15 the number was specifically mentioned. As I indicated earlier, your Honours, that was not the subject of cross-examination.

At page 65, the appellant, Donald Martin, lines 33 to 36 said the same thing. Again, it was not the subject of cross-examination. The respondent, however, was asked about this and that appears in the same volume at page 149 at a passage from line 30 to 45. Then, going on to page 150, about line 15, and the issue is dealt with further down page 150, line 33 through to 38, where she said she thought she "heard somebody at Moffatt's at the wharf I think 43".

Your Honours, she was aware that the vessel should not be overloaded - that is page 159, line 26 - it is a passage, your Honours, I should say, commences about line 26. She had had a licence herself since April 1985; the accident was in January 1990; and in the passage that goes through, your Honours, to page 160, about line 37, she said it was: "common knowledge, commonsense" that the vessel was not to be overloaded. Your Honours, the primary judge's finding at page 366 in volume 2, in relation to the negligence of the respondent, commences at about line 28 and goes through to the top of the next page.

Your Honours will see that he said that she was responsible - this is about line 29 - that "as registered controller" - that is an expression, your Honours, which is a short way of describing registration under the regulations, and I will come to those in just a moment:

as registered controller in the circumstances of this accident, she was, herself, negligent. I am satisfied as registered controller she owed a duty of care to the passengers on this vessel, on this day.

He said in the next paragraph:

She had experience, over a number of years. They invited a number of the people of board, not by any means all the people. She knew, or should have known how many people were on board. She should have known that the vessel was grossly and dangerously overloaded. She should have taken steps as registered controller to ensure that the vessel did not leave the dock with that number of persons on board.

Your Honours, the Court of Appeal expressed the view, which your Honours will see in the same volume at page 508, in three - I want to refer your Honours to three paragraphs which are at pages 508 and 509. They are paragraphs 42, 43 and 45. Now, your Honours will see that in paragraph 42, Justice Rolfe, whose reasons were those of the Court of Appeal, said:

In the light of Mr Warner's de facto control, the fact that Mrs Warner may have invited some people, "not by any means all", becomes irrelevant. The duty to decide how many people should be on board was Mr Warner's and, there was no evidence that Mrs Warner knew or ought to have known that the vessel was "grossly and dangerously overloaded". The fact that it was found that the vessel was so loaded does not prove that Mrs Warner either knew or ought to have known this was the situation.

It may be added that there was no evidence that the vessel behaved in any inappropriate way . . . until several minutes before the sinking. Thus, not only was Mrs Warner not exercising de facto control of the vessel, but there was no evidence that she had the knowledge or ought to have had the knowledge his Honour attributed to her in the passage set out -

The reference should be to paragraph 13 of the reasons. Could I just go back to those, your Honours? Paragraph 13 is page 495. The relevant part of it is page 495 and it is the last quotation in paragraph 13, halfway down the page, and that is the passage to which I adverted a moment ago. Your Honours, if I can go back then to page 508, his Honour said, at the last three lines on that page:

The vessel having been loaded, nothing untoward happened until several minutes before the sinking such as to put her on notice of any problem.

And then your Honours will see in paragraph 45, having referred to the case based on the control, the registration in relation to the vessel, his Honour goes on to say:

This, with respect, is where his Honour's finding of personal liability was flawed.

Your Honours will then see, halfway through the paragraph:

To make good the finding that she should not have allowed the vessel to sail with the number of people on board, the plaintiffs would have had to prove at the least that she knew, or ought to have known, that the vessel was overloaded, and that in that knowledge she could have done something to prevent the vessel from sailing. This they failed to do.

If I could just say, your Honours, in the passages to which I have referred, both from the primary judge's reasons and from the evidence - and could I interpolate to say, your Honours, and this is something I wish to mention in relation to the notice of contention, not all the evidence is here and not all the evidence was before the Court of Appeal because the issue sought to be raised by the notice of contention was not raised before the Court of Appeal.

KIRBY J: You mean not all of the transcript of the trial?

MR JACKSON: Indeed, your Honour, and not all the evidence - I mean that, your Honour, and I mean specifically in relation to the evidence of the expert witnesses, one of whom was preferred by the primary judge. All that you have is what the judge said about the expert witnesses where he accepted the evidence of one of them. Now, your Honours, I will come to the detail of it in a moment, but one just does not see the material that would be necessary to support setting aside those findings before the Court of Appeal and, your Honours, it is very difficult, with respect, to see how, on the material that was before the Court of Appeal and the passages to which I have referred your Honours, how the finding could be made that there was no evidence on which the judge could find that the vessel was not visibly overloaded; visibly in the sense that a person knowledgable in the area could see that and, of course - - -

KIRBY J: Was that point made during argument, that the material that was placed before the court put limitations on what they could decide?

MR JACKSON: Your Honour, in the Court of Appeal the position was, if I could put it shortly, that the issue that was raised there was the question of the existence of a duty. Now, your Honours, may I just take a moment to deal perhaps with this question now, and I will do so as briefly as I can. Your Honours will see the notice of appeal to the Court of Appeal in volume 2 at page 389. Your Honours will see there the two grounds set out, that is, liability "for the negligent acts of the husband", ground 1; negligence "as a result of her own acts or omissions", that is the grounds there stated. The submissions before the Court of Appeal, first in writing, can be seen at page 394 - - -

KIRBY J: Just pausing there, although it might be open to objection as to lacking specificity, the second ground at least would raise issues such as duty of care, standard of care, breach of duty and causation, would it not?

MR JACKSON: Your Honour, capable of doing so. I would not disagree with that.

KIRBY J: Yes.

MR JACKSON: But, your Honour, when one goes then to the index of material before the Court of Appeal - and, your Honour, I am sorry to have to go to this detail in the matter - which is at 392 and 393, none of the evidence of the expert witnesses is set out there. All that one has is the evidence of the people who were aboard the boat - - -

GLEESON CJ: Going back to the notice of appeal on page 389, presumably the forensic purpose of the notice of contention is to force the argument back onto ground 1. Presumably the point the notice of contention seeks to make is that if the speeding up of the vessel were the cause of the accident, that was something for which the husband was responsible, as a matter of fact I mean, and in which the respondent had no part to play and, therefore, her liability, if it existed, would be vicarious.

MR JACKSON: Yes. Your Honour, that argument, however, does not come to grips with the actual findings of the primary judge which would yet have to be set aside because it may well be that one is able to say there is one cause and there are two causes. That was one of two cases but the way the primary judge dealt with it in accepting the evidence of Mr Bundschuh, was to the effect that the overloading was a cause and whilst it may be that the immediate cause was perhaps for the vessel to go a bit faster than it should have, or to put it rather more abruptly, the fact that it was a grossly overloaded vessel was itself a factor in the event having occurred. So that, your Honours, there do not have to be - we only have to establish one causative event, a causative event.

CALLINAN J: Mr Jackson, which particular of negligence do you say was made out against the respondent? I am looking at pages 3 and 4?

MR JACKSON: Yes, I think it is the first one, your Honour.

CALLINAN J: Which is "Inviting and allowing to be present on the boat . . . an excessive amount of people".

MR JACKSON: Yes, your Honour, yes.

CALLINAN J: Is there a finding on that particular? I mean, do not worry with it now, but - - -

MR JACKSON: Your Honour, it is encapsulated, I think, in the passage to which I referred the Court earlier and that is the passage that the Full Court then said there was no evidence to support.

GUMMOW J: Well, the vice may be - the difficulty is in the word "allowing" in that particular.

MR JACKSON: In the particular, your Honour?

GUMMOW J: Yes, and in the finding at 366, line 45.

MR JACKSON: I am sorry, your Honour, I did not catch the second part of what your Honour said to me.

GUMMOW J: Page 366, line 45, "She should have taken steps . . . to ensure". What steps?

MR JACKSON: Well, your Honour, to say the boat is not to leave and that is the point I am going to come to in just a moment, if I may? Your Honours, could I stay with the notice of contention aspects for just a moment before going to that? I took your Honours to the notice of appeal. At pages 392 to 393 one sees the index to the Court of Appeal, none of the material from the expert witnesses was there. One sees at pages 394 to 398 the written submissions in the Court of Appeal and on behalf of the present respondent. The essence of them is contained in paragraph 17 at page 398.

Our submissions in response, your Honours, follow and could I refer particularly to page 404, paragraphs 18 and 19 which draw attention to the findings that have been made and the transcript on the hearing in the Court of Appeal contains two passages which are relevant. The first is at page 416 at about line 28 where Justice Handley - and this is elaborated upon a little later - said to my learned friend, "As I understand it you attack the premise, not the conclusion?", and that that was referring to the question of duty appears from page 429 at about line 23 in a passage which goes to the bottom of the page:

what we're really attacking is the finding upon the threshold point.

ROLFE AJA: Do you mean if you fail on that you accept negligence?

HANDLEY JA: You did answer me earlier by saying that you only challenged the premise not the conclusion.

Your Honours will see that goes to the bottom of the page. Your Honours, the only reference to those findings to which I referred earlier, is when my learned friend, at one point, in response to a question from Justice Rolfe flirted with the idea. That is at page 426 and your Honours will see at about line 26, the next sentence:Mr Motbey, now that you've overcome that shock . . . That if I may say so seems to me to beg the question why should she have known that? What was the evidence that indicated she should have known that?

MOTBEY: We say there wasn't any.

Your Honours, that is it.

GLEESON CJ: If I could go back to page 398, paragraph 17. Was the argument that whether the respondent was sought to be made personally responsible or vicariously responsible, either way, the factual premise on which such responsibility was based was her capacity to control the use of the vessel?

MR JACKSON: Yes, your Honour.

GLEESON CJ: And, the argument for the respondent, as I would understand it, is that, in fact, she had no capacity to control the use of the vessel and, therefore, the foundation for both personal and vicarious responsibility disappeared.

MR JACKSON: Yes, your Honour, I think that is the argument that is sought be advanced, yes. So, your Honours, if I could just say, our submission would be in relation to the notice of appeal that the issues sought to be raised by it about the cause of the accident should not now be allowed to be raised and not all the evidence is here or was before the Court of Appeal, for a start.

Your Honours, could I move, then, to the terms of the regulations, the Water Traffic Regulations. Now, under regulation 2(3) of those regulations your Honours will see that a reference in them :

to a person who has the control of the vessel is a reference to a person who has the right to decide the position, disposition and use of the vessel.

So that is a definition provision, of course. One then goes to Part III of the regulations and in particular to regulation 11, but your Honours will see - I suspect it will be page 12 of the copy that your Honours have. Your Honours, by regulation 11(2), "A person" - - -

GLEESON CJ: On page 17.

MR JACKSON: I am sorry, your Honour, yes:

A person who controls a registrable vessel may apply to the Board for registration of such vessel.

GUMMOW J: Now, what is there that makes requirement necessary and what penalty backs it up?

MR JACKSON: Your Honour, it comes about from regulation 11(13)(a).

If any registrable vessel is on any enclosed water -

I will take your Honours to the definition of that in a moment -

and is unregistered -

(i) the owner of such vessel shall be guilty of an offence against this regulation; and

(ii) the master -

is also. Your Honours, if it does not have the identification plate, there is a subregulation (b):

both the owner and the master of such vessel shall be guilty of an offence -

and "enclosed water", your Honour, is defined by regulation 2(1) to mean:

any port or any inland navigable water within the State of New South Wales.

GLEESON CJ: Now, is it common ground that the respondent's husband was the owner of this vessel?

MR JACKSON: Yes, your Honour, that was the effect of the evidence. Your Honours, "registrable vessel", I should say, is defined by the same definition provisions and there is no doubt this was a registrable vessel.

GUMMOW J: So, the existence of registration is, if one could put it this way, an answer to any alleged contravention of (13)(a)?

MR JACKSON: Yes, your Honour.

GUMMOW J: And an application to achieve that state of registration may be made by a person identified in regulation 11(2)?

MR JACKSON: Yes, 2(3), your Honour, yes.

GUMMOW J: Regulation 2(3), yes.

GLEESON CJ: And, presumably, the making of such an application is an admission of the fact referred to in regulation 2(3).

MR JACKSON: That is what we would submit, your Honour, yes. And also, regulation 11 makes no specific provision for any person other than a person who "controls" - if I could put that word in inverted commas - the vessel, to be able to apply for registration.

GUMMOW J: I am sorry, could you say that again, Mr Jackson?

MR JACKSON: I am sorry. What I was seeking to say was this: your Honours will see that regulation 11(2) uses the term "may" apply; the only person who is so qualified is a person who "controls", which is the defined term. But although the term "may" is used, no provision is made for any person other than a person who controls to apply.

GLEESON CJ: Was the application for registration in evidence?

MR JACKSON: Yes, it was, your Honour. I do not know about the application; the registration certificate was, and I will give your Honour reference in just a moment, if I may.

GLEESON CJ: Would you mind checking on whether the application for registration was in evidence?

MR JACKSON: Yes, your Honour. Your Honours, I was going to say then, one sees in regulation 11(3)(a) that the application for registration is to be "made in writing" to the Maritime Services Board, and for subregulation (4), "Upon the registration of a registrable vessel", the Board causes to be issued both a certificate and a plate. Under subregulation (5), the registration is effective for a year, but may be renewed annually. Subregulation (6) says the holder of the certificate shall, amongst other things - the plate has to be affixed - that is (a); (b), whenever so required, produce the certificate to the authorised persons; notify changes of address; and so on.

Your Honours will see subregulation (7): if the holder of the certificate ceases to control the vessel - again, the defined term - he shall forthwith:

supply to the Board the name and address of the person to whom control has been transferred -

and then, your Honour, paragraph (b): a person who acquires control is to, within three days, forward the identification plate to the Board, et cetera. Your Honours, could I then go to subregulation (9): the registered vessel may be inspected or tested at any reasonable time by an officer of the Board, and the holder of the certificate is to make the vessel available for the purposes of the inspection or test when called on to do so. The vessel can be cancelled for the reasons set out in subregulation (10)(a), including (iv): where the Board considers the vessel unsafe to persons or property.

GLEESON CJ: Presumably, one reason why these regulations fasten on the aspect of control rather than ownership is that the ownership of a vessel may be distanced from its practical control, because of charter arrangements or finance arrangements.

MR JACKSON: Yes. Your Honour, inevitably, one is talking about vessels that are being used in inland waters, but it may well be, as your Honour said, that, for example, a fleet of small vessels, ones that qualify as registrable vessels, may be ones that have a distant owner, in effect. One might well see that.

CALLINAN J: What about a mortgagee? I take it, it being an item of personal property, the legal title would be transferred to the mortgagee with a right of redemption. Would the mortgagee be a controller?

MR JACKSON: Your Honour, it depends a little on the immediacy of the right contemplated by regulation 2(3).

GUMMOW J: Right against whom?

MR JACKSON: Yes, your Honour, and that is an element of it, of course.

GUMMOW J: Yes.

MR JACKSON: But, your Honour, it may well be, if one took the case of the mortgagee then, as between the mortgagee and the person who is the mortgagor then, no doubt, the mortgagee would, assuming the terms of the mortgage permitted it, have the right to decide who would have the possession, disposition and use of it, but, in reality, the right to decide as between that person and other persons would be one that the mortgagee would have conferred on the mortgagor and, your Honour, it would be the mortgagor who relevantly, in those circumstances, would be the person having control, in our submission.

GLEESON CJ: Well presumably, many of the vessels that ply in that waterways would be the subject of leasing arrangements.

MR JACKSON: Yes.

GLEESON CJ: Straight leasing or hire purchase?

MR JACKSON: Your Honour, again, what I submitted a moment ago in relation to mortgagor and mortgagee, somewhat inexactly, would, no doubt, apply mutatis mutandis because the object of the arrangement would be to allow the lessee or hirer to be the person who possessed then the right to decide who was to have possession, disposition and use of the vessel.

GUMMOW J: We are talking about legal right, are we?

MR JACKSON: Yes, your Honour, yes.

GUMMOW J: So that there is some wrong committed otherwise.

MR JACKSON: I am sorry, your Honour.

GUMMOW J: There is a wrong committed. That is what backs up the right.

MR JACKSON: Yes, your Honour. One could have a situation, your Honour - - -

GUMMOW J: If some conversion is committed.

MR JACKSON: Yes. Well, your Honour, it may be that one could say, in fact, that person did not have the right. Perhaps it could be proved that they did not have the right. The certificate might not be conclusive against the world, but it certainly would operate as an admission by a person who knows that they are registered as such that they are the person having control, et cetera, of the vessel.

CALLINAN J: Mr Jackson, regulation 4 refers to a "master". Are there any other references in the regulations to "the master" of the vessel? Now, I ask that to contrast, perhaps, the position of the person identified as a master as the person in control of the management of the vessel by contrast with a possible meaning of controller, as the person having some sort of proprietary right.

MR JACKSON: Your Honour, "master" is used on a number of occasions. One sees it, for example, in regulation 5 as well, but perhaps not as frequently as one might expect. I do not think your Honours will find the term "master" very frequently. One sees it, for example, in regulation 10(3), saying both, if there is not "a silencing device", et cetera, then "the owner and the master" are "guilty of an offence".

GLEESON CJ: Though in regulation 7, if you use a water-skiing vessel in an unorthodox manner, it is the mater of the vessel who is guilty of the offence.

MR JACKSON: Yes. Your Honour, there is a number of occasions - one sees it also in 11, 13(a)(ii), a provision to which I referred earlier, saying the master is "guilty of an offence" if it is not registered.

GLEESON CJ: Is the expression "master" defined?

MR JACKSON: No, your Honour.

GUMMOW J: Well, were there any definitions in the Maritime Services Act 1900 that carried over?

MR JACKSON: Your Honour, I do not think so; none that assists the Court in relation to this case. In fact, the regulations are, for practical purposes, freestanding, your Honour. Your Honours, I was dealing with regulation 11. I was going to take your Honours to regulation 11(11), which creates an offence for a person:

who navigates a registered vessel, or who, having custody of the same, permits or suffers such vessel to be navigated, without the authority or consent of the holder of the certificate of registration for the vessel -

so that it makes it an offence to navigate or permit it to be navigated:

without the authority or consent of the holder of the certificate of registration -

Your Honours, I took your Honours to 11(13)(a), the requirement for registration, before. The term "navigate" in regulation 11(11) seems to refer, in our submission, to the person actually in charge of the movement of the vessel. I mention that because our learned friend's submissions seem to give a rather narrow meaning to the term in regulation 11(11), but your Honours will see that it is used in what we would submit is the fairly ordinary meaning in a number of regulations. Could I just give your Honours a reference to those? Regulation 3(1); 3(2); 4, a reference to safe and proper navigation; in regulation 14(5F) and in regulation 15(2) and (3).

GLEESON CJ: I am not sure I have understood the scheme of these regulations in so far as they require registration of a controller. Regulation 11(13) is in aid of that scheme, but what is the object of the scheme? Are there some responsibilities that attach to controllers?

MR JACKSON: Well, your Honour, first of all, there is the requirement for registration so that there can be someone identified as being a person who has a relationship to a particular vessel. Now, your Honour, that is putting it in very broad terms, of course. The second thing about it is that that produces the system of registration of the vessels and allows the identification of the vessel by both the plate on it and by the certificate, which is required to be produced under subregulation (6).

Then, your Honours, one sees that the registration of the vessel can be cancelled, which means, of course, that it is unlawful to use the vessel, if one of the things set out in subregulation (10) appears, and that is that the information was "untrue"; "any requirement" of the regulations of the Board "has not been complied with", and there are various other regulations that relate to vessels; if the vessel is noisy or "unsafe"; or "where the holder . . . ceases to, control the vessel". That is paragraph (v) of the same thing. Now, your Honour, I do not know that I can take it beyond that.

GLEESON CJ: But apart from having the responsibility of identifying yourself, if you are the controller, what other responsibilities attach to you as controller under these regulations?

MR JACKSON: Well, your Honour, one is, and one needs to infer this from regulation 11(11), that the person who is the holder of the certificate of registration is the person who has the authority to say who may use the vessel, what persons may use the vessel, and your Honours will see that it is an offence to do so without the authority or consent of the holder of the certificate. So that that means, your Honours, that people who are using vessels on inland waters are people who are the holders of the authority or consent of the person in relation to whom the vessel is registered.

Now, your Honours, if one took a situation where, say, there was a suggestion that a vessel was being used in inland waters to transfer a shipment of drugs, as sometimes happens; your Honours have seen some of those cases. Now, if the vessel is registered, and it has to have the number, I think, painted on it, your Honours, from subregulation (12), it is possible to identify the vessel, who is in control of the vessel. That person is someone to whom one can go immediately and say, "Who was operating the vessel at that time?". Your Honours, it is really a system in aid of not having, if I can put it that way, uncontrolled vessels going around the waterways.

GLEESON CJ: But it does not take the extra step that you find in relation to motor vehicles, of making the registered owner, or registered controller, responsible for the conduct of whoever happens to be navigating the vessel at any given time.

MR JACKSON: No, your Honour, it does not say that. I accept that. What one does have though, is a situation where - I am sorry, what it does bring about is a situation where it is possible to say that the probability is that in any circumstance the vessel is being operated by someone who is doing so with the authority and consent of that person.

GLEESON CJ: What is the significance, in your argument, of the fact that the respondent was physically present on this vessel on the day in question?

MR JACKSON: Because it gave her the opportunity, your Honour, to say, "The vessel is not to be used in this condition".

GLEESON CJ: So if, in fact, she had been away on holidays, simply not present on this occasion, what would the position then be?

MR JACKSON: Well, your Honour, unless we were able to establish vicarious liability, vicarious liability applying in every circumstance, then the position would be she would not be liable.

GLEESON CJ: That raises a question as to what is meant by "control", does it not? If the vicarious liability for which you contend depends, not merely on the kind of control that attracts the provisions of these regulations, but upon immediate physical presence and capacity to give directions, then it is a different kind of control that brings the liability.

MR JACKSON: Your Honour, it is a question different from what though, your Honour, because the control that is spoken of in the regulation is that referred to in regulation 2(3), which is a term covering a number of possibilities and what I mean by that is to say, it is a reference to a right to decide, really, things falling within three concepts, one being - - -

GLEESON CJ: But you would not lose that control if you went on an overseas holiday, would you?

MR JACKSON: You would not lose the right to decide the possession or disposition of the vessel. You would not lose the right to decide the use of it, your Honour, but in relation to the actual use of it the ability to exercise detailed power, of course, is unlikely to be actually present. But one does not lose the right, your Honour, of course.

Now, your Honours, the regulations, as we have submitted, do not, in terms, say that the person navigating the vessel is doing so with the authority and consent of the person registered in respect of the vessel but, in our submission, they do raise a very strong inference that that is so and the primary judge, in our submission, was quite right in saying, as he did in the passage to which I have taken your Honours already, that having nominated herself as controller, she had a responsibility to exercise the power which she had and that her husband was navigating the vessel with her authority and consent.

GLEESON CJ: I suppose one way of exercising control is always to say to somebody else, "I'll leave it up to you".

MR JACKSON: Your Honour, that is one way of exercising control but if one is talking about negligence in the manner of exercise of control, that may not be a sufficient satisfaction of the duty that would exist. But, your Honour, what we would submit also, in relation to that, is that if a person has a right to decide the use of the vessel and if that person is in a position where it should be obvious to that person that the vessel cannot be safely used, then, in our submission, the circumstances bring about a duty of the person to exercise the right to control which the person has. It is not a rescue case, your Honour.

Your Honours, could I move from that to - could I take your Honours, for a moment, to our outline of argument? What I wanted to go to, your Honours, was to paragraphs 28 and following, 28 to 32, dealing with the question of vicarious liability.

KIRBY J: This is a true alternative, this case, is it not?

MR JACKSON: Yes, it is, your Honour.

KIRBY J: Does it relate into, in any way, the common law case and the assertion of personal responsibility?

MR JACKSON: Well, your Honour, so far as the underlying facts, of course. What we would say about - - -

KIRBY J: I am just wondering whether the common law moulding to the statutory regime has anything to say in relation to personal liability by reference to the regulations.

MR JACKSON: Well, your Honour, one cannot say, of course, that the regulations, in terms, say, as was the case in relation to motor vehicle regulations, that there is a deemed agency on the part of the person who is actually navigating the vessel. But the regulations do speak in terms in, say, regulation 11(11), of there being authority and consent, or an assumption of authority and consent. What we would submit is, as we seek to submit in those paragraphs, 28 to 32 - your Honours, I will not read them out, but in paragraph 29, in particular, we would submit the evident purpose of the regulation was to ensure that you could answer questions of who is responsible by pointing to the holder of the certificate, so that a person who is navigating the vessel is doing so on behalf of the owner of the certificate.

Your Honours, this is a case where there is, we would submit, a clearly defined statutory nexus between the person navigating the vessel and the person who has the right to control the vessel. Your Honours, if one looks at Scott v Davis, this is a case where she was present and she had the ability to control, an ability not just given by some personal relationship, but given by virtue of the regulation.

GLEESON CJ: Mr Jackson, in your submission, is the fact that the husband was the owner of the vessel irrelevant?

MR JACKSON: Irrelevant, your Honour, yes.

GLEESON CJ: He was at the wheel of the vessel or at the controls of the vessel, not in his capacity as owner, but in his capacity as the person permitted to be there by the registered controller.

MR JACKSON: Yes, your Honour.

CALLINAN J: But he was both the master and the owner?

MR JACKSON: Yes, he was, your Honour, yes. I think it would be right to describe him as the master, yes.

KIRBY J: Did the evidence reveal why his wife was designated as the statutory officer?

MR JACKSON: Your Honour, there seems to have been an intention to place the vessel in the name of a company in which she had the principal shareholding. I think she had five, he had two, something of that kind, and she was then to be the registered controller but, for some reason, it did not actually go through. Your Honour, I am putting that inexactly because I do not think the evidence was - I think the position was, at the end of the day, it was accepted that the result had not been effectuated and he became the owner.

GUMMOW J: In a way the question is whether Mr Downes' client was ever in a correct position to apply the registration. It does not seem to be that she had any legal "right to decide the possession, disposition and use of the vessel". You have to say that, because by some mishap it was she who became the registered controller; all these legal consequences in tort flow from that statutory miscarriage.

MR JACKSON: Well, your Honour, the position was, she knew and he knew for quite some time that she held that position in relation to the vessel. It was not as if it was something that occurred without the knowledge of both the persons who were involved and it may well have been that the belief that they both held was one based on the assumption that the transactions that they had been contemplated had gone through. So, your Honour, it is perhaps with respect overstating it to describe it as mishap and if necessary I can give your Honours the references to places where she accepted that she had known that she knew well before the accident that she was the person who had the - - -

GUMMOW J: Yes, but is there any finding at any stage that, as a matter of general law, Mr Downes' client answered the description of a person who had "the right to decide the possession, disposition and use of the vessel" owned by her husband?

MR JACKSON: No, your Honour, there is not. The finding is, she was the owner, but, equally, the finding is - - -

GUMMOW J: He was the owner?

MR JACKSON: I am sorry, I said the wrong thing. The finding was that he was the owner, that was accepted, but that she was the person who, as between the two of them, was to be the registered controller.

GLEESON CJ: I am not sure what that means exactly. Was there a finding that there was a contractual or some other arrangement between Mr and Mrs Warner that produced the consequence that in law she had "the right to decide the possession, disposition and use of the vessel"?

MR JACKSON: Your Honour, may I check that, but I think the answer is as I said before that the position was that the - your Honour will see, perhaps I could go to page 493 in volume 2. I am referring to what was said in the Court of Appeal. Perhaps if I go to page 492 paragraph 6, about line 30. It was not contended by us in the Court of Appeal that the vessel was owned by the respondent, and it was conceded, as you will see from the bottom of the page, that that concession was not qualified, and as in paragraph 8 on page 493, your Honour will see that Justice Rolfe refers to the fact that "there was no evidence of . . . authorisation or consent", and that, I think, is correct, and I think there was no particular finding by the primary judge in relation to that issue. May I give your Honour a reference if there is one.

GLEESON CJ: This is a fairly central question is it not, Mr Jackson? I mean, I can understand an argument that says, the application for registration involved a certain admission or placed at least a tactical onus on whoever wanted to contend to the contrary, but there is an ultimate question, is there not, which has to be decided, which is whether, as a matter of fact and law, the respondent had "the right to decide the possession, disposition and use of the vessel" and the circumstance that the husband was the owner of the vessel is not obviously immaterial to that issue.

MR JACKSON: Your Honour, it is not. If one were looking to see an issue of who, in the abstract, as between the husband and wife, had rights in relation to the ownership, say, of the vessel, then the answer would be that the husband had those rights, but one is not speaking just about that. What one is speaking about is a situation where, by the operation of the statutory provision, meaning the regulation, there has to be someone who is, for the purpose of the regulations, a person who is selected as having the characteristics referred to in regulation 2(3).

GLEESON CJ: Let us suppose a family law dispute had arisen between Mr and Mrs Warner. As I understand it, you are content to accept that the outcome of that dispute might well have been a conclusion that it was Mr Warner who had "the right to decide the possession, disposition and use of the vessel".

MR JACKSON: As between the two of them, yes, your Honour, and in those circumstances, an order might well have been made to the effect that the necessary steps be taken to ensure that she was, in effect, deregistered as controller and that he was substituted for her.

GLEESON CJ: Then the question arises as to what are the consequences of these regulations in a circumstance such as the present where the wrong person has become registered as the controller of the vessel.

MR JACKSON: Your Honour, could I say two things in relation to that? Your Honour said "the wrong person", but if the situation is that both the person who is the owner and the person who is the registered controller are agreed that one of them, not being the owner, is to be the person who is to be registered for that purpose, then, as between the two of them, the situation would be that the entitlement to be registered and to have whatever rights might flow from that is held by the person who is the one who is registered.

Now, your Honour, that could easily occur in circumstances where, for example, one person who was the owner of the vessel lived overseas and said to some other person, who was not the owner, "You're the person who's to have control of the vessel for the purposes of the regulations", which would mean that if the overseas owner wanted to go on a holiday up the Hawkesbury or something on the vessel, they would be subject to the other person's - - -

GLEESON CJ: Let us suppose that, for reasons perhaps related to conduct of the kind that you described a little earlier, the owner of the vessel and the person who had "the right to decide the possession, disposition and use of the vessel", wished to conceal his identity and wished to conceal his right, so he entered into an arrangement with an associate that the associate would apply to become the registered controller of the vessel. What, if any, consequence would that have in relation to a person who was injured as a result of negligent navigation of the vessel by the owner?

MR JACKSON: Your Honour, first of all, it would not, so far as the owner is concerned, make any difference, because there would be a direct right to sue the owner of the vessel, assuming the owner was directing the navigation of the vessel. The next thing would be that it would have the consequence that the person who was registered as having control would also be liable. I am speaking for the moment about vicarious liability. If one is dealing with the case of personal liability, it would depend on the involvement in the event.

GLEESON CJ: Put personal liability to one side. Would the vicarious liability be upon the basis that the associate, contrary to the true fact, had "the right to decide the possession, disposition and use" of the vehicle?

MR JACKSON: Yes. Your Honour, when one says "contrary to the true fact", there are shades in these things - - -

GLEESON CJ: I was postulating a corrupt, perhaps even criminal, arrangement between the owner and an associate of the owner, under which it would be falsely represented to the authorities that it was the associate who had "the right to decide the possession, disposition and use of the vessel".

MR JACKSON: Your Honour, I suppose there are two possibilities, really. One is that one treats the thing as a sham in toto, in which a registration would have been, I suppose, falsely acquired, and could be expunged. But, your Honour, the other would be that the situation is one where, despite the fact that the bargain is itself corrupt, an element of it is that the person who is the owner and the person who has become registered have agreed to do that thing, with whatever consequences may follow from it.

If the result be that both would be liable, so be it, your Honour, but all that is being done is to identify the person who has the right to decide, and if a person who has the right to decide is a person whom the owner says has the right to decide, then that person has the right to decide until the owner withdraws their permission.

I was going to give your Honour a reference. I think it was at page 365 in the reasons of the primary judge. Your Honours will see, at about line 32, his Honour said:

The evidence of ownership comes from the Warners. I believe it establishes that Mr Warner purchased the vessel, he looked after the vessel, was basically in control of making all the relevant decisions.

Your Honours will see, then, the next two paragraphs.

GUMMOW J: The judge seems to be saying, at the bottom of 365, that somehow she held herself out.

MR JACKSON: Your Honour, by allowing herself to become the registered controller?

GUMMOW J: Yes.

MR JACKSON: Inevitably, there is a holding out, your Honour, the holding out that one says one is the person who is qualified to be registered.

GLEESON CJ: But there is a change of subject matter between the first and the second sentences of the paragraph beginning on the bottom of 365. The first sentence talks in terms of responsibility flying from the fact that she has allowed something to happen and the second sentence looks like a proposition of fact.

MR JACKSON: Well, your Honour, it is between a proposition of law and a proposition of fact. The paragraph ends with one of fact and starts off with one of law and he is speaking in the first sentence about responsibility and the second is in relation to control, and perhaps that is a question of fact, but, in any event, your Honour, what we would submit is that she does have a degree of control. This is not a case where her husband did not assent to her having this role.

GLEESON CJ: Do you mean she got a degree of control by the fact of registration.

MR JACKSON: Yes.

GAUDRON J: Or by her husband's assenting to her becoming registration. It perhaps does not matter.

MR JACKSON: Yes. Your Honour, by her becoming registered in circumstances where he knew of that fact. Your Honour, if I could put it this way, assume one had four people who were business people, professional people, workers, whatever one likes, who liked being on boats but none of them was any good on boats; they acquired a vessel but in relation to it they got a person who was experienced in boats and said, "This person is to be the person registered in respect of the boat. That is the person who knows something about it and that person is the one who will be registered".

There is no reason why they could not do that and there is no reason, in our submission, why in relation to them if, let us say, one of the four of the most minimal competence was in fact navigating the boat with aboard there being the person who was registered in respect of it, there is no reason why that person would not have the power to say, "Don't do it. You're going too fast" in circumstances where it would be dangerous to go so fast. Your Honour asked me about the application for the registration.

GLEESON CJ: Yes.

MR JACKSON: The document does not seem to be in the material before the Court. Some documents that were before the primary judge are between pages 310 and 320 in volume 2. I am not able to tell your Honour, now, whether before the primary judge the documents that were there included the application for registration but may we check that?

GLEESON CJ: A related question may be whether there is some kind of prescribed form of application.

MR JACKSON: Yes, your Honour. I think there is a form but whether it is a prescribed one is another question. Your Honours, those are our submissions.

GLEESON CJ: Yes, thank you, Mr Jackson. Yes, Mr Downes.

MR DOWNES: Your Honours, at the very heart of this case is the regulation and an analysis of what it provides, perhaps one might say the proper characterisation of the regulation. The significance of it can be seen in the way the appellant's written submissions were prepared and in particular I note, for example, what is said in paragraph 33 of the written submissions which show that not only in the way the appellants seek to run their appeal is the proper characterisation of the regulations central but, more particularly, it is subregulation (11) itself which is critical. What they say in paragraph 33(b) is that:

By applying for, obtaining and retaining the certification of registration Mrs Warner . . .

(b) acquired the degree of control over the vessel conferred by reg.11(11).

Now we take issue with that characterisation of the regulations and in aid of the submissions which we put about the effect of the regulations, there are a number of short propositions which, as we see it, are uncontrovertible in the sense that they are the mere description of what is the operation of the regulations, which inevitably lead to a result which is fatal to both arms of the appeal.

The propositions are as follows. One, regulation 11 does not, in terms, confer any rights of control. There is nothing there which purports to confer rights of control,. In that respect, of course, the regulations are to be distinguished, for example, from the scheme that one sees in, for example, Soblusky v Egan and still even today, in which there is some actual deeming of control or in which there is the conferring of control. No such right appears here.

Secondly, the regulations recognise that the holder of a certificate of registration may not, in fact, have control and that is because in subregulation (10) that my learned friend took your Honours to, there is provision for the cancellation of a registration where the holder of the certificate is not, in fact, the person in control. So our second proposition is that the regulation recognises that the holder of a certificate may not have control.

Thirdly, the regulation recognises that entitlement to control, far from coming from within the regulation, comes from outside the regulations, and that is because of the definition in regulation 2(3), to which my learned friends have taken your Honours and which is the definition which refers to the:

person who has the right to decide the possession, disposition and use of the vessel.

Nothing suggests that that right is in some way associated with the regulations themselves. It is a right which comes from the rights, per se, between the relevant parties.

CALLINAN J: Mr Downes, is there any provision for insurance, the statutory, compulsory - - -

MR DOWNES: No, there was no scheme. No, your Honour.

CALLINAN J: Not under these regulations, but under any other Act or regulations?

MR DOWNES: Not that I am aware of, your Honour.

GUMMOW J: These are not treated as notional motor vehicles under the other scheme?

MR DOWNES: No. Well, I do say, advisedly, not that I am aware of, your Honour.

GUMMOW J: All sorts of things - - -

MR DOWNES: I have not made an exhaustive inquiry and I am not in a position personally to know the situation in New South Wales in that regard, but I am not aware of any.

CALLINAN J: In some States, I know there is a similar statutory scheme with respect to boats.

MR DOWNES: Yes.

CALLINAN J: It might be relevant, might it not, that the extended concept of vicarious liability is usually tied up with quite an elaborate compulsory insurance scheme which does not exist here?

MR DOWNES: All I can say is, your Honour, that if there be such a scheme, it has never formed any part of any aspect of this case. I think the reality is there is - I mean, I can go this far, there is no compulsory insurance scheme in place.

GLEESON CJ: Do these regulations apply to ordinary sailing craft?

MR DOWNES: I think for a yacht it has to be of either a particular displacement, in other words, a large yacht or a particular length. I think so far as vessels is concerned, similar considerations - of motor vessels - apply but there is, of course, no issue but that this particular vessel, because it was a very large vessel, was a registrable vessel.

GLEESON CJ: No, I was just interested to know to how many varieties of vessel these regulations would apply.

MR DOWNES: Well, I think there is a speed provision so far as motor vessels are concerned. From memory, something like 9 knots, or something of that sort, vessels not capable of doing more than 9 knots do not need to be registered. So small sailing vessels with auxiliary motors that can only push them along at a few knots would not be required to be registrable.

GLEESON CJ: But those large sailing vessels that you see moored down near Rushcutters Bay, for example, most of them would be covered by this scheme, would they?

MR DOWNES: I suspect they would be, but I cannot go further than that, your Honour. I do know there is a provision in the regulations relating to length of sailing vessels. Your Honours, I think I had got to the fourth proposition which is, perhaps, associated with the third, that is, that nothing in the regulations either purports to or achieves the result of transferring ownership or any power of disposition from that which actually obtains.

GAUDRON J: What do you mean by that "which actually obtains"? You are assuming, are you not, in that proposition that legal ownership is the be-all and end-all, whereas one has to assume, surely, in this case, that apart from legal ownership there was some agreement between the husband and the wife.

MR DOWNES: Well, no such case has ever either been put - - -

GAUDRON J: Well, the alternative is sham and I should have thought if it was - a sham case was to be run, it was up to the husband and the wife to do so.

MR DOWNES: Your Honour, what I content myself with is what were the findings below and that particular passage that your Honours have just been referred to, which is one of a number of passages in the judgment of the trial judge relating not just to ownership, but to control itself.

GAUDRON J: Where do I find that?

MR DOWNES: The particular passage is at 365, line 32:

The evidence of ownership comes from the Warners. I believe it establishes that Mr Warner purchased this vessel, he looked after the vessel, was basically in control -

that is his Honour's word -

of making all the relevant decisions.

Now, that is only one of a number of similar findings. It may be convenient at this point to take your Honours to them.

GAUDRON J: But all that means, in effect, does it not, is that having reached some agreement, the wife was content to leave the decisions to her husband, does it not? She exercised her method of control by saying, "I will leave it to you".

MR DOWNES: But, your Honour, no agreement was ever - - -

GAUDRON J: Otherwise we are looking at a sham, are we not?

MR DOWNES: Well, if your Honour wishes to use that word to characterise the circumstance, then so be it, but there is no evidence of any agreement.

GAUDRON J: But there was no case made by you that it was a sham.

MR DOWNES: Well, with respect, your Honour, it was not necessary for my client to make such a case to achieve the result that presently is obtained.

GAUDRON J: Well, that is the question, is it not? That really is one of the questions in this appeal.

MR DOWNES: Well, the question, your Honour, as we would see it, is, "What was the factual position associated with the control of this vessel?".

GAUDRON J: No. One cannot ask that question in isolation from the legal position, can one?

MR DOWNES: No, I agree with that.

GAUDRON J: Indeed, I might have thought, unless one had notions rooted in the last century, that one might think in actual fact this wife did have some means of at least attempting to alter the situation, and when you add to that, the regulation, you have - - -

MR DOWNES: Well, your Honour, the thrust of the argument that I seek to put is associated with the positive findings of the judge as to who was in control, and I am entitled, I would respectfully submit, to rely upon - - -

GAUDRON J: Yes. But I do not understand what that means.

GLEESON CJ: And an alarm bell rings when somebody starts using words like "basically". People use words like "basically" usually because they are not prepared to put the proposition omitting those words.

MR DOWNES: Well, can I take your Honours to the other passages?

GLEESON CJ: Yes.

MR DOWNES: The first of them is at page 349 line 42:

The vessel was 36 feet in length and had a fly bridge. The person who was in control of the vessel was Dennis Warner.

GAUDRON J: Yes, but as it said, the person who had the right to control the vessel.

MR DOWNES: Page 357 line 44:

In my view the simple part of this case is the claim against Dennis Warner. The claim on behalf of each of the plaintiffs was that he allowed far too many people to travel on this vessel and once the vessel veered to the left, it was inevitable -

et cetera.

GLEESON CJ: But, Mr Downes, coming back to 349 line 42, that is a reference to the position on 8 January 1990 and I would have thought his Honour is clearly using the word "control" there in reference to the person who is directly in charge of the navigation of the vessel.

MR DOWNES: Yes, your Honour. Well, I simply seek to make good the proposition that he was the owner and, more than that, he was the person who made the decisions and, more than that, there was never any situation in which Mrs Warner gave him consent, authorised him to do anything at all. He always assumed the control to which his ownership primarily entitled him and with respect to which nothing in the evidence qualified.

GAUDRON J: But that may not be the question, Mr Downes. The question may be, "Was she in a position to do anything?", and from that the question may then be, "What was she in a position to do and did that impose a duty of care on her?".

MR DOWNES: But the way the case is being put, your Honours, if I can put it this way - and what I am primarily meeting is the case put against me - is, as I sought to point out at the outset, that it begins with an acceptance of the proposition that one has to show that she had some actual control that she could have exercised.

GAUDRON J: A right to control is perhaps what we are looking for. Not actual; a right to control in some way.

MR DOWNES: All right. Well, I mean in the sense that the person who was the object of her power might reject her approach.

GLEESON CJ: A problem, Mr Downes, is that there is an ambiguity in the concept of control. Let it be supposed - and I am not suggesting this is the case - that Mrs Warner did not know how to operate a vessel like this, but that, nevertheless, by agreement between herself and her husband, she was the person who had the right of the kind described in regulation 2(3). On that assumption, Mrs Warner would not have been able herself to seize the controls of the vessel from her husband and assume its navigation. She would not have had the physical or mechanical capacity to control the vessel, because she did not know how to operate it. But on that assumption, she would have had the right to say to her husband, "You may not leave the wharf. This vessel may not depart from the wharf until half these people get off." It is a right of the second kind that we are talking about, not a physical capacity of the former kind.

MR DOWNES: Yes, your Honour. There is no doubt about that. That is the case that is put against us and, as I understand the case that has been put against us - although I also recognise that I need to meet what your Honour has put to me - is that she did not have that right through some agreement or arrangement with the owner.

GUMMOW J: No. It is said she got it by registration.

MR DOWNES: She got that right because she, having been registered as the controller of the vessel, gained the right by virtue of the provisions of the regulations.

GAUDRON J: That was not what Mr Jackson answered to me, I think. The case, as I understood it was, that she got that right by reason of her registration with the knowledge of her husband, or I said with his assent. But one can properly make the inference, can one not, that the husband assented to her becoming the person who held the certificate?

MR DOWNES: Certainly the evidence is he is aware of that, yes.

GAUDRON J: Yes.

MR DOWNES: By the way, I understand from Mr Motbey that the actual application was not in evidence. So it is not reproduced, but in any event, not in evidence anyway.

GLEESON CJ: We do not know whether the owner of a vessel has to be a party to such an application.

MR DOWNES: We do not know the answer to that, I do not think, your Honour.

GLEESON CJ: What is the answer to the question, bearing in mind that Mr Warner was the owner, how did Mrs Warner come to be the registered controller?

MR DOWNES: That question is not, as I understand it, answered by the evidence. The fact is it is known that she was the registered holder. She knew, at any event, ex post facto - at the time of the relevant sailing she knew that she was the person who was the registered holder and so did he. That, I think, as I would understand it, is the totality of the evidence on that issue, other than the relevant findings that I was seeking to take your Honours to, of the trial judge which, in effect said, "The first proposition is, there was never any occasion where she gave some consent or authorisation to him to control the vessel. He merely continued, as he always had done, as the owner exercising his right as owner".

GLEESON CJ: But would she have had the right to say to him, if she had chosen to do so, "There are too many people on board this vessel. I don't care what you have done in the past and I don't care that you are the owner - I am the registered controller - this vessel is not to leave the wharf and if it leaves the wharf I am going to report it to the authorities".

MR DOWNES: Answer,f no, your Honour.

GUMMOW J: "And get off, myself" presumably.

MR DOWNES: The answer to that, we would submit, is "No". Your Honours, there were just a few more references - - -

CALLINAN J: Implicit in all of that is perhaps a proposition that it is no good being in a position to perhaps remonstrate with somebody unless the remonstration is likely to be effective which was a view that I took in Scott v Davis - I do not know whether anybody else did, but I think there are similar sorts of expressions in the reasons of Justice Gummow and Justice Hayne. I do not know if they went as far as I did.

MR DOWNES: Yes.

GAUDRON J: But could she not have said, "This boat is overloaded. I don't want you to leave the marina in this condition and if you do I am going to ring the water police and tell them that you are driving this boat without my permission and I am the registered controller".

MR DOWNES: There is no reason why she could not have done that but she has not conferred on her any right to stop, we would respectfully submit, the vessel sailing.

GAUDRON J: No, and there may be issues of - - -

MR DOWNES: An important proposition in my list of propositions that I was seeking to come to in a moment relates to regulation 11 which is at the heart of the case, at any event, raised in the written submissions of the appellant and what we seek to say about that, amongst other things, is that it does not create any offence so far as conduct of the controller is concerned. The offence is an offence of a third party. In truth, it is a property offence, we would respectfully submit, that overcomes problems associated with common law or even statutory theft. It simply says you have committed an offence if you use a registered vessel without consent.

GLEESON CJ: What is the penalty for that offence.

MR DOWNES: $1500.

GLEESON CJ: So, the effect of regulation 11(11) is that if Mrs Warner had, for the very first time, taken it upon herself to seek to exercise some rights and had said to her husband, "You may not leave the wharf with this many people on board this vessel", she could have made her remonstration effective to the extent of exposing him to a penalty?

MR DOWNES: Another proposition I am seeking to come to is that he would not have been exposed, we would respectfully submit, at least arguably, to a penalty in any event because, as the owner, he would have had a claim of right defence. The argument there is - recognised in this Court and I will give your Honours some references although they are not on our list of authorities but I will hand up a print of the relevant decision of the Supreme Court of Queensland, a Full Court of which Justice Gibbs was one of the members of the Bench - where an offence is an offence relating to property and subregulation (11) is an offence relating to property, the common law recognises a claim of right defence associated with ownership, for example. So he would be able to say, we would respectfully submit, if he was charged in these circumstances, "I haven't committed the offence, because I own the vessel".

GAUDRON J: Well, that might be an interesting defence in the context of these regulations, would it not?

MR DOWNES: Two propositions, I think, flow from that. One, that it highlights the fact that this is, we would respectfully submit, an offence so far as a third party is concerned, and highlights the fact that one is here dealing with an offence associated with property and not, for example - I mean, one cannot look at this case, and particularly the question of vicarious liability, without thinking about factories, shops and industries legislation, statutory duties associated with obligations, defence dangerous machinery but, of course, they are offences, one, associated with safety and, two, they are offences where the obligation is imposed not upon a third party but upon the occupier of the factory in that case. Here, the offence is created in a third party and it is not an offence associated with safety, but with property.

Could I just give your Honours, while I still have my fingers in the relevant pages, the remaining references in the judgment of the trial judge relating to control, and I appreciate that some of them relate to control in the sense of, or parts of some of them relate to the control in the sense of being the person navigating the vessel on the relevant day but I just wish to give your Honours the complete reference.

GUMMOW J: Well, that was the case. If you go to 364, line 35, that is one of the references, I suppose.

MR DOWNES: Yes, your Honour.

GUMMOW J: "On this day Mr Warner was the controller" as agent for his wife. I do not know what all that means. That seems to have been the case that was put anyway.

MR DOWNES: Can your Honour just - what line was your Honour referring to on - - -?

GUMMOW J: Page 364, the paragraph beginning line 34.

GLEESON CJ: That is an allegation, not a finding.

MR DOWNES: Yes, that is the allegation.

GUMMOW J: That is the allegation, yes.

MR DOWNES: Yes. There is a finding though on 364 at line 9:

Mr Warner was the skipper . . . . He had the responsibility, or at least a large amount of responsibility for ensuring the safety of all on board. He has a duty to ensure the vessel is not overloaded.

Again, at line 16 - - -

GLEESON CJ: Before you pass from that, is the word "skipper" the word in the regulations?

MR DOWNES: Not that I am aware of, no, your Honour.

GLEESON CJ: Is it a word that corresponds to master?

MR DOWNES: I guess, your Honour, it is not far from it. Can I just say this to your Honour, that "Master" is defined in the Act - - -

GUMMOW J: That is what I wondered.

MR DOWNES: But there is nothing that I know of in the regulations that - but there may be something in the Interpretation Act.

GUMMOW J: There is something in the Interpretation Act that says, if you find it in an Act defined, you take it over to the regulations unless otherwise shown.

MR DOWNES: Yes:

"Master" includes every person having lawfully, or de facto, the command, charge, or management of a vessel for the time being.

"Owner" is also defined there. Your Honour, I was at 364, line 16:

He allowed 49 people on board . . . He knew, or should have known -

et cetera. Then there is the paragraph at 365, 35, that I have already taken your Honours to, and there is some material, of course, on this in the judgment in the Court of Appeal. Can I just take your Honours, particularly on that, to pages 493 and 493A? Your Honours know, I think, that, unfortunately, there were three pages missing from the appeal book and I hope your Honours now have them. So it is 493 and 493A, which is the material collected by Mr Justice Rolfe relating to what one might call the relationship between the two and, in particular, I would take your Honours, on the issue of what agreement did or did not exist, to that on 493A:

Mr Young -

reading from the second line -

did not refer to any evidence and I have been unable to find any, which, contrary to the concession I have just recorded, showed that Mrs Warner had ever authorised or consented to Mr Warner's navigating the vessel. Her evidence at AB77 that Mr Warner was not her agent; that she had no power of which she was aware or right to dictate or control him as to how he should conduct the vessel on that or any other day; and that he was the only "boss of the vessel"; was not contradicted. In all these circumstances there was no evidence to support his Honour's finding, if his Honour meant to make a finding of fact as distinct from stating a consequence in law of Mrs Warner being "registered controller" -

Your Honours, I was giving your Honours the propositions that we say one gets from regulation 11 - - -

GUMMOW J: You have done four of them, I think.

MR DOWNES: Yes. The fourth was that it does not transfer ownership. The fifth is, and I think in answer to questions raised by your Honours, I have covered most of the others, but I just put them in order so that they are down - five is that the criminal sanction in subregulation (11) addresses use by a third party. Six, the criminality is associated with the third parties activity. That is proposition six. Proposition seven, the section addresses property interests, not safety interests, and in those circumstances a claim of right defence would be available.

Can I hand up to your Honours copies of the decision of the Supreme Court of Queensland that I referred to in Reg v Pollard? Your Honours, I do not know that I need to take your Honours in any detail to the case. The case supports the proposition, we would respectfully submit, that - - -

GLEESON CJ: What is the reference to this, Mr Downes?

MR DOWNES: It is the - I am sorry, your Honour - the (1961) QWN - it is with the notes - 13, your Honour.

GAUDRON J: Now, what is this - in the hypothesis we are talking about here, where the wife says, "You no longer have my permission to navigate this vessel. I propose now to ring the Water Police", now, what is this claim of right that the husband is asserting?

MR DOWNES: Well, he says to the sergeant when the police launch - - -

GAUDRON J: No, but in the face of her express withdrawal of permission. He must say, "You have got no right to do that", must he not?

MR DOWNES: No. But Mr Warner says, "That is of no moment. I own this vessel".

GAUDRON J: Yes, she says, "But under the regulation you have no right to navigate it without my permission".

MR DOWNES: He says, "I have my right as owner", which supervenes her control pursuant to the certificate, "and I am exercising that right as owner".

GAUDRON J: And she says, "We will see about that".

MR DOWNES: Well, all this, your Honours, I have no doubt.

GLEESON CJ: But suppose the true owner of the vessel - - -

MR DOWNES: It is the most forceful of the proponents that are going to succeed in this case and presumably the policeman, to pick up this illustration, would say, "Very well, sir, I will take down your name and address and" - - -

CALLINAN J: He may have said, "We don't do domestics", at this stage.

MR DOWNES: He may or may not issue a summons in due course after he has got some advice.

GLEESON CJ: Mr Downes, in relation to a large percentage of the vessels of this kind around inland waterways, the true owner would be a bank. Ownership does not determine the kind of right here in question, does it?

MR DOWNES: Well, yes, it does, because here - - -

GUMMOW J: No bank.

MR DOWNES: - - - there is no bank.

CALLINAN J: Well, ownership coupled with possession and control as master or skipper may be an entirely different matter.

MR DOWNES: When your Honour says the owner would be a bank, but the owner would be a bank subject to other rights, either as mortgagee or, alternatively, subject to a right to acquire the vessel pursuant to performance of returns of a hire purchase agreement or subject to a right to acquire the vessel, although the legal right at any event used not to be written into leases - I do not know whether that is still the position, but it was never effectively challenged - but subject to the probability of a sale of the vessel at the residual value at the end of the lease period. But here the ownership is untrammelled ownership, subject only to the issue that we are dealing with, namely, the registration.

GLEESON CJ: Well, what do we know, or what were the findings, if any, about how, notwithstanding Mr Warner's ownership, Mrs Warner came to be the registered controller?

MR DOWNES: Well, the finding is confined to the fact. The findings of the reality are all - if I can be forgiven for again using that description or something like it - of the kind that I have taken your Honours to, that he, habitually exercised the control. So, your Honours, that is, I think, the seventh proposition. The eighth proposition is that the regulation is not to be equated with a safety regulation of the kind that the Factories, Shops and Industries Act is concerned with, for reasons I gave earlier. The ninth and last proposition is that sub regulation (11) addresses use per se and not issues associated with manner of use. That may be just another way of saying that this is a regulation associated with property interests and not with safety interests.

The issue is, as I put, I think, a little while ago, thrown up by, in effect, saying that this section is concerned with offences not associated with manner of use. It is simply there, we would respectfully submit, at any event, at least in part, to avoid defences of the "I was only borrowing it" kind, which perhaps, do apply to vessels and which, depending upon the circumstances, can be a defence to simple common law or statutory theft.

Your Honours, those are the reasons which we say that the regulation and the fact of registration with the respondent as the holder of the certificate, do not assist my learned friend in either part of the case he seeks to make out. It may be that, as your Honour the Chief Justice, I think, suggested, there is an admission that can be inferred from the existence of registration but that admission is here, we would respectfully submit, answered very plainly and, as an admission, it is only a piece of evidence. When the evidence demonstrates that the admission is not representative of the fact, then the court will act on the fact.

GAUDRON J: You keep talking about the fact. Do we not need to talk about the legal right? I mean, undoubtedly, the evidence would tend to suggest that as a fact Mr Warner made all the decisions, treated the boat as his own. The question is whether he did that because his wife let him do it and acquiesced in that course or whether he did it because he had the right to do it. Is not that really the question? Whether he did it notwithstanding his wife's right to decide otherwise?

MR DOWNES: We would respectfully submit the question is whether the wife had a right and for the reasons that I have been putting, we would say no.

GAUDRON J: But she had a right to refuse permission, did she not, or refuse consent, at least that much?

MR DOWNES: We would say that wrongly characterises the position and that was what I was seeking to address in the latter propositions I put. We would say that the way you characterise this act is as follows. If somebody, without consent of the certificate holder, navigates within inland waters, he or she commits an offence.

GLEESON CJ: If, to use a, perhaps unnecessarily colourful expression, she had, as they say, "turned nasty on him" and had said, "From today you don't take that vessel out unless I have specifically agreed to your proposals", if you wanted to determine what the consequences of that would be, apart from, perhaps, an immediate difficulty of the kind that might arise under regulation 11, you would need to know, would you not, how it came about that she was the registered controller, notwithstanding that he was the owner?

MR DOWNES: Well, except this, your Honour. If what I have put to your Honour is correct, he could say, "I am the owner, and I rely on that as part of my defence." If he could not rely on that as part of his defence, then other issues might go only to questions of penalty.

GUMMOW J: No, what is being put to you is you would need to know -that this is in your favour, I suppose - more factual matters than you know here.

MR DOWNES: Put that way, yes, perhaps it is favourable. Can I just say this, your Honours. I meant to tell your Honours that the decision of the Queensland court has been referred to in this Court in a decision that is not on my list, but I will just give your Honours the reference, if I may: Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561.

CALLINAN J: The "Turkey" Case.

MR DOWNES: Yes. And there, the reason that the defence was not available was that the proper characterisation of the offence was that it was not an offence associated with land; the argument being that, because it was associated with ferae naturae, it was an offence associated with land.

CALLINAN J: Is that decision affected by Yanner v Eaton at all?

MR DOWNES: I think your Honour has the advantage of me there.

CALLINAN J: I just think it perhaps might be, I do not know.

GUMMOW J: It was discussed in Yanner v Eaton.

MR DOWNES: Your Honours, I was just going to take your Honours back, if I could, because it touches on some of the things your Honours have been putting to me, regulation 2(3) of the Water Regulations, to remind your Honours that what that does it to confer on - I am sorry, it defines here who is the person in control of a vessel, that person having subsequently conferred upon him or her the power to apply for registration. But the person who answers that description is someone who has "the right to decide the possession, disposition and use of the vessel".

Now, whatever arrangement there was, contrary to any evidentiary finding about it - there is just no evidentiary finding whatever, but whatever private arrangement there was between the Warners, indeed, if there was any private arrangement - my primary submission is that the evidence or the findings are to the contrary - it was not an arrangement which characterised her as controller. It is not an arrangement which gave her "the right to decide the possession, disposition and use of the vessel".

GLEESON CJ: Did not anybody ask Mr Warner why it was that the application for registration as controller was made by his wife?

MR DOWNES: Yes, there was some evidence about it, your Honour, but no findings.

GLEESON CJ: Perhaps you could - or your junior could - give us a reference to the evidence.

MR DOWNES: We can give your Honours the references, yes, your Honour.

GLEESON CJ: Thank you.

CALLINAN J: It would not have been contradicted, any evidence about that, I would have thought, because your clients would be the only people who would have known about it.

MR DOWNES: Yes. The evidence, in our written submissions, at paragraph 9 on page 3, was that - this is part of the evidence, but I will give your Honours the other evidence - she maintained that she was not initially aware that she was the holder of this certificate; she was aware of it on 8 January, 1990. Of course, she was also - on her evidence, had no knowledge of any obligations. Certainly, she was not aware of subregulation (11).

CALLINAN J: That would not have helped her if it did in fact impose any obligations on her, her ignorance.

MR DOWNES: No.

CALLINAN J: It would be irrelevant, would it not?

MR DOWNES: Now, your Honours, the background is in the existence of the certificate of registration and the effects that flow from that. The issues which then arise are issues of vicarious liability and direct liability. As we would see it, issues of - - -

KIRBY J: May I just interrupt just on that last point?

MR DOWNES: Yes, your Honour.

KIRBY J: Do not answer this if it is not in the evidence, but you mentioned earlier that you could say something to the Court about insurance. The thought that goes through one's mind, irrelevant though we are told it is, is that this might have some relevance in that area. Now, was that matter explored in any way in the evidence or not?

MR DOWNES: No, there is no evidence of the existence of any insurance.

KIRBY J: Well, it is legally, so we are told, irrelevant, although it is extremely practically important, often.

MR DOWNES: Yes.

GLEESON CJ: Its legal irrelevance would be demonstrated - - -

MR DOWNES: There was something said about it in the Court of Appeal, I think.

GLEESON CJ: Its legal irrelevance would be demonstrated if the insurance was with HIH.

MR DOWNES: Yes, your Honour.

CALLINAN J: The answer, I think, to the question you were asked before about why it was put in Mrs Warner's name as controller was she was controller - it may be at 179, is it?

MR DOWNES: My learned junior is telling me 219, your Honour.

CALLINAN J: Page 219.

MR DOWNES: Yes, and 179, too, your Honour. Unless your Honours want me to I will not read it out but your Honour sees "he filled out the registration form" - he, "didn't sign her name".

CALLINAN J: And he did not think it would involve some sort of legal responsibility. That is at page 220. But, again, that may not be relevant.

KIRBY J: It is a pretty unconvincing answer, is it not, for "convenience". There must have been something more to it than just convenience. Normally, unless there is not a reason - - -

MR DOWNES: Mr Jackson openned with the suggestion that it was associated with a proposal to transfer the ownership to a company that never took place.

GLEESON CJ: But am I right in thinking that a company could not be a registered controller; that a registered controller has to be an individual?

MR DOWNES: Well, we are not aware of anything that precludes a company from being the registered controller, your Honour - - -

GLEESON CJ: I see.

MR DOWNES: - - - in the same way as a company can be the registered owner of a vehicle. I was putting to your Honours that there are then two ways in which the position of registered holder is relied upon by my learned friends. One is in connection with a claim to succeed on the basis of vicarious liability and the other is to succeed on the basis of direct liability. The issue of control would seem to be relevant to both of those claims. It is obviously relevant to the claim of vicarious liability. One only has to look at Scott v Davis for a moment to see that. It is also relevant, of course, to the claim of direct liability, because if Mrs Warner was in no better position than any other passenger in the boat, if she had no control or claim to assert any control, then she would not have any duty, even if the relevant event were foreseeable.

Now, so far as the first is concerned, vicarious liability, no appeal was taken from the liability - from the judgment in favour of the plaintiffs against Mr Warner and so the issue, so far as the vicarious liability is concerned, would seem to be confined to issues of control. So, as we would see it, the issue of control is relevant to vicarious liability. The issue of control is also relevant to direct liability, but there there is also an issue of foreseeability as one of the potential bases upon which a case of direct liability might be founded.

Now, we deal, your Honours, in our written submissions with the matter, first of all, by introducing it by our own account of the facts, and then at paragraph 21 on page 6 under the heading "The Water Traffic Regulations" with the submissions that I have effectively already put to your Honours, and although they are differently put there, I will not take time going to anything there.

We then begin at heading E on page 9 and paragraph 31 to address the two issues, first of all, vicarious liability. We seek to make the point there that at any event, in the light of Scott v Davis, the only, we would respectfully submit, basis upon which this case in the claimed case in vicarious liability could succeed is if your Honours were to find that there arose out of the operation of the regulations in general and the subregulation (11), in particular, such a degree of control as to give rise to vicarious liability.

Now, we would respectfully submit, in the light of the reasoning of Scott v Davis, that I will not take your Honours to, however one characterises the control which one can spell out of the regulations, it is not such as will attract vicarious liability. This is not a case, as we have sought to point out, like Soblusky v Egan; it is not a case like Scott v Davis and one does not have the assistance here of any of the third party motor vehicle type provisions that are relevant in yet other situations.

Indeed, this is really the reverse of Scott v Davis, if you look at it that way, a situation in which the subordinate character, if I can so describe the person with the certificate, is sought to be vicariously liable for the predominant character, the owner and, in accordance, we would respectfully submit, with the findings, the controller of the vessel.

Your Honours, without reading them, we would simply rely upon a couple of other observations relating to vicarious liability that appear in our written submissions. Could we also point to the following factors in connection with the vicarious liability issue? One, the owner was navigating the vessel. Two, no question of vicarious liability could arise from ownership or from any request to navigate, on the facts of this case. Three, vicarious liability, we would submit, can only flow from the regulations. On no view of the regulation can a relevant agency arise, and I think I have already covered other points that I had a note of here.

GLEESON CJ: Mr Downes, I have been trying to think of analogous situations. A possibility that may be very imperfect is the licensee of registered premises under the Liquor Act and the relevant statute and regulations impose certain specific obligations on a licensee, such as to be there during certain hours and to exercise a certain kind of supervision. But is there any authority on the question of vicarious responsibility resulting from the fact of being a licensee?

MR DOWNES: I am not aware of any, but that is not something we have particularly looked at. What we have looked for is vicarious liability flowing from something like the regulations that one finds here and we were unable to find any useful analogy there. I mean, there are regulations, of course, conferring control and statutes conferring control which confer actual control without the need to engage in a process of inference, but those cases are not helpful here.

It really seems to us, if I might say so, that the appellants were right when they said it all comes down to what you get out of subregulation (11) and, your Honour, that can be characterised in the way my learned friend seeks to characterise it, or pursuant to the nine propositions I put to your Honours falls far short of something which would give rise to vicarious liability. Of course, what one has to do is, one, characterise the regulation and, two, ask whether it, when characterised, imposes or gives, one, any right and, two, if it does give a right, is it a high enough right to lead to vicarious liability. But I am sorry, your Honour, I have not really answered your Honour's question other than saying I am not aware of any particular case associated with a licence which might be, as your Honour says, a limited - - -

GLEESON CJ: No, I was only thinking - I really do not know where this leads - but there are a number of circumstances in life where, usually for the purpose of making clear the person who is answerable to statutory or public authorities, you have to nominate an individual.

KIRBY J: There was that case in this Court, Leask, I think it is, concerning the licensing of crane drivers and it was commonly thought in New South Wales, before the case came to this Court, that that gave rise to some liability in the crane driver. I do not think it touched on the question of vicarious liability but my recollection is this Court said something to the effect that it was merely, for a different purpose, partly revenue raising and partly for identifying who would control the crane, but it did not, itself, give rise to liability. I think it was about the 1950s, 60s, Leask.

MR DOWNES: The problem with those kind of cases, is that, to the extent to which we have looked at that kind of area, one does find a much more direct provision relating to the licensing of someone to operate the crane by virtue of the statute and the statute itself conferring the right. Here, one has the odd characteristic that someone who, in fact, has the power of disposition is in a position to apply - - -

GAUDRON J: Someone who "in fact", or who "in law"? You keep sliding into this.

MR DOWNES: Well, in law. Someone who, in law, then, has the power of disposition.

GAUDRON J: Very well, and how would that person exercise that right in law, in the circumstances of this case? Let us assume Mr Warner comes home and says, "I have decided to give the boat to my friend Joe Smith, up the road". How does he perfect the gift? He says, "I have given it to him, actually. I left it down at his mooring with a note saying `Joe, this is for you. Your boat is not very good any more, you can have this one'". What happens then?

MR DOWNES: Subject to the common law rules relating to gifts, if the gift was sufficiently perfected then the new owner, who would prove the gift by proving possession at his wharf, and the note or whatever it was, the oral statement - - -

GAUDRON J: He would have to go, would he not - at least to avoid the risk of prosecution, he would either have to go to Mrs Warner, would he not, and get her to take whatever steps were necessary for him to become the registered controller, or he would have to go to the department, would he not, and say, "She is no longer the registered controller, please cancel her certificate and give me one"?

MR DOWNES: Well, consistency with what I have already put to the Court, by virtue of his ownership he would be entitled to navigate the vessel or, at any event, would be entitled to raise a defence to a prosecution the moment he became the owner. He could, if he wanted to at that point of time, apply, and no doubt would, and say, "I am now the owner". I mean, in fact, one guesses that the mere assertion of ownership at the Maritime Services Board would probably be sufficient. I cannot speak for the regulatory enforcement that is involved, but perhaps they would say, "No, we've already got someone registered as the controller of this one, so you'll have to get his consent", but that is a matter of administrative implementation, not something associated with what one gets from the regulations themselves, we would submit.

GUMMOW J: Does regulation 11(10)(a) on page 14 of the regulations, page 19 up in the top corner, mean that this registration in the name of Mrs Warner was liable to cancellation at all times by a board?

MR DOWNES: Yes, we would so submit. Your Honour will recollect that one of the propositions I put by reference to this subsection (10) was that the regulations recognise that the person who actually is the holder of a certificate may not be the person with the power of disposition for the reason that the regulations recognise that such a person is liable to have the registration cancelled. Of course, the holder has an obligation if he disposes of the vessel under (7), which my learned friend referred to, to give notice.

GUMMOW J: And the acquirer has an obligation under (7)(b).

MR DOWNES: Yes, your Honour, but the obligation is not to become registered.

GUMMOW J: No, quite - to hand in the plate.

MR DOWNES: Presumably, if one is not going to navigate inland waters, it is hard to imagine that unless you were permanently at sea, you could avoid that, but in any event - - -

GUMMOW J: You might be going to lie it up to restore it, or goodness knows what.

MR DOWNES: Yes. Now, your Honours, I have covered vicarious liability; can I come now to personal liability. As we would see it, there are two elements relevant to this issue. One begins, I suppose, by looking at the pertinent relevant touchstones for the determination of a duty of care in tort and one has potentialities in proximity, reliance, vulnerability now, foreseeability always, and, what is unstated in many cases, control. The two relevant elements, as we would see it, in the present case is, one, control and two, foreseeability. I have really put the submissions that I would wish to put on control, but foreseeability is a different matter and, as your Honours will know, my learned friends are seeking in their appeal to challenge a finding made by the Court of Appeal relating to foreseeability, namely that foreseeability was not relevantly present.

A critical finding of Mr Justice Rolfe, justifying the kind of approach that I have just described, is the finding referred to by Mr Jackson on page 509 at about line 34:

To make good the finding that she should not have allowed the vessel to sail with the number of people on board, the plaintiffs would have had to prove at the least that she knew, or ought to have known, that the vessel was overloaded, and -

two -

that in that knowledge she could have done something to prevent thew vessel from sailing.

So the first proposition is foreseeability; the second proposition is control. Now, what the Court of Appeal held was that there was no basis for a finding that she knew that the vessel was overloaded and, in so doing, they may have, depending on how one looks at the trial judge, departed from a finding of the court below.

Now, this matter is first dealt with by my learned friends in their original written submissions in paragraph 41 - or this particular aspect is dealt with in paragraph 41. They say in paragraph41:

His Honour apparently -

this is referring to the trial judge -

formed a conclusion about what Mrs Warner did know, or should have known, at least in part from her answers in cross-examination conceding that: (a) she had held a boating licence . . . (b) she was aware of her status as registered controller; (c) she had frequently been out on that vessel and others; and (d) she had some awareness of the largest number of people that had previously been on the vessel.

Now, that was, at any event, in paragraph 41 of my learned friends' submissions, the totality of the material that supported the finding. We sought to challenge that in our written submissions and to challenge it by saying that one needs, perhaps, on this issue of foreseeability, to distinguish two potential objects of attention. It may be foreseeable that if a boat is overloaded, it might sink, but that is not the foreseeability that is required here. The foreseeability that is required here is foreseeability that this vessel was overloaded and, therefore, might sink. The reality is - - -

GAUDRON J: Is that right? I mean, one does not have to foresee the exact situation that eventuates, does one? One has only to foresee that something might occur which might injure somebody. Is that not right?

MR DOWNES: Yes, but foreseeability, for example, your Honour, that this vessel with two people in it, if overloaded, might sink is obviously not a matter at issue.

GAUDRON J: I am just wondering if the question is, "might sink". The way you put it, although not necessarily so, seems to imply a connection between the overloading and the sinking. Would it not be sufficient foreseeability to say if anything happens to this boat, with this number of people on, it may be that people cannot be gotten off in time to prevent a disaster? See, I would have thought the problem with overloading by passengers was the difficulty of getting them off the boat in the event that something happened.

MR DOWNES: But, your Honour, his Honour the trial judge addressed those kinds of issues.

GAUDRON J: Let me just put it like this - but I am talking about the notion of foreseeability. Let us assume that this boat had sunk because some much bigger vessel, which are well-known on inland waterways, had made a huge wave in close proximity or let us say that was the immediate cause of what happened. Would not foreseeability be satisfied on the basis that, "If something happens we will not be able to get these people off, or we may not be able to get these people off in time to prevent a disaster?"

MR DOWNES: But, your Honour, the answer I would put to that is this, that one comes to this Court with findings as to what the negligence was, so in terms of asking what the relevant duty of care was, one has to look at what the finding of negligence was. The finding, again and again - I mean, this is one of the matters that we seek to challenge in the notice of contention. But setting that aside for the moment, the finding of negligence was allowing the vessel to sail overloaded. So the question is, was it foreseeable, was it a matter of knowledge actual or to be imputed, that this vessel was overloaded? Now, the answer to that, we would respectfully submit, is that there was no such evidence and the Court of Appeal came to the correct conclusion - - -

GAUDRON J: She knew how many people, within 5 or 6, were on board.

MR DOWNES: Yes. But this vessel had nothing on it saying, "Safe loading capacity 49". At the relevant time - or 20, or whatever it might have been. There was no regulation - - -

GUMMOW J: Is there any finding as to what the safe maximum was?

MR DOWNES: No, I think not.

GAUDRON J: But the experts said it was physically - - -

MR DOWNES: And although a regime, I think, has now been introduced, perhaps in response to this tragedy, there was not, at that time, anything that required vessels to be checked, certified, for any particular number. It is not as though there was something which said this was a 35-person vessel, or a 40-person vessel, or a 45-person vessel. It was very big.

GAUDRON J: Well, in any event, this boat was not a ferry, even a small ferry, was it?

MR DOWNES: Not in the sense that it plied for trade.

GAUDRON J: No, but it was not even in that - - -

MR DOWNES: Well, I am sure there are ferries on Sydney Harbour smaller than this vessel but in fact it was not operating as a ferry with paying passengers, no.

GAUDRON J: No, but it was not set up to accommodate 50 people in seats, either, I presume?

MR DOWNES: No, but it was set up to accommodate a very large number of people up on the bridge which undoubtedly was a problem. I mean, the evidence pretty clearly is that if you had all the seats occupied up on the bridge, whatever number you had down below - indeed, perhaps the more you have down below suddenly becomes relevant but, I mean, as your Honour has - - -

GAUDRON J: Yes, well, one would think so.

MR DOWNES: It is all to do with the deviation from the vertical and when the ship gets to a point where the numbers on board rather than returning it to the horizontal continue it on its course. But, your Honours, there was, we would respectfully submit, no basis for a finding of knowledge or imputed knowledge that this vessel was overloaded and there is nothing, plainly, we would respectfully submit, in (a) to (d) in paragraph 14 of my learned friend's written submissions. That she had "a boating licence" says nothing on the topic; that she had the certificate of registration says nothing; that she had "frequently" been on the vessel because it had never, on the evidence, had any problem before with whatever numbers were on it - - -

CALLINAN J: The evidence at page 151 in cross-examination helps you, does it not, at about line 11 or 12:

nobody was crowded or uncomfortable. I was able to walk freely . . . without any problem whatsoever.

MR DOWNES: Yes.

GAUDRON J: And how many people were below deck?

MR DOWNES: I think there were six or so in the bridge. The bulk of the balance were either at the stern of the vessel or in the saloon, and I think the answer that I think your Honour is asking about is that the children, regrettably, a number of whom died - there is no question about the enormous tragedy of all of this - were up in the front of the vessel under the hatch cover that got some relevance. Of course, mind you, the fact that everyone on this boat thought it was entirely accepted for five children to be up in the part of the vessel from which it would be most difficult to escape only really supports the proposition that 49 people really did not think there was any problem here and there is no suggestion that Mrs Warner, apart from the fact that she had a boating licence - there were naval officers - or at least a retired one - one naval officer on this vessel.

We would respectfully submit that, however, in retrospect, it looks as though this was a dangerous thing to do, in prospect, there really was not a basis for finding it. Now, my learned friend sought to answer our submission, in effect, that 41 did not contain anything relating relevantly to foreseeability, in their submissions in reply and in paragraph 11 on page 4, and this is how they seek to return what they say was the judge's finding:

some people had had a concern about overcrowding -

and that is at 363.46, and:

the expert evidence of Mr Bundschuh . . . was that it would have been "visibly observable" that the vessel was overloaded -

Now, so far as those matters are concerned, first of all, with great respect, the concern about overcrowding is a throwaway line and here the absence of the evidence is not unimportant on this issue. Your Honours do not have in the appeal books access to the material which might be said to support that, but that alone could, we would respectfully submit, by no stretch of the imagination could relevantly show knowledge, and the fact that the expert said it was "visibly observable" is simply, we would respectfully submit, neither here nor there. This man had spent a lifetime - your Honours will have read how impressive he was in terms of the trial judge's findings - in issues associated with boating and, more importantly, practical boating safety, through employment as a public servant in, I think it may have been, the Maritime Services Board. Your Honours, I will not be much longer, but I guess something like 10 minutes.

GLEESON CJ: How long do you expect to be in reply, Mr Jackson?

MR JACKSON: Ten to 15 minutes, your Honour.

GLEESON CJ: We will adjourn now and resume at 2.00 pm.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.06 PM:

GLEESON CJ: Yes, Mr Downes.

MR DOWNES: Your Honour, the findings now relied upon that I was referring your Honours to just before the adjournment in support of the proposition relating to knowledge are findings at, first of all, page 363 of the appeal book in which the trial judge says at the bottom of the page, line 44:

There was evidence from a number of people that they did not feel the vessel was over crowded but others had a concern that it was crowded.

Now that, we would respectfully submit, is not a sufficient finding to ground knowledge that this vessel was dangerously overloaded. The other finding is at 359 that I refer to and that is the finding associated with the evidence of the expert, Mr Bundschuh, and that is at page 359 at line 25:

He agreed that this accident would not have occurred if the vessel had not been overloaded. He said it would have been visibly observable this vessel was overloaded -

but that must have been to the expert, indeed, very expert eye.

KIRBY J: Interpreting that is really a matter that would normally belong to the primary judge.

MR DOWNES: Yes.

KIRBY J: How can we interpret it if we do not have his evidence? It is impossible.

MR DOWNES: No, I think your Honours cannot. The difficulty is that what I would ask your Honours to say, as the Court of Appeal said, is that that finding does not go far enough to justify the ultimate finding.

KIRBY J: Well, every month or so you hear, in foreign countries, of vessels that are overcrowded and sink. They sink on the Nile, they sink on the Ganges, they sink everywhere. Now, presumably, we, by reason of our regulation and other means, have avoided that. Maybe it is because people are a bit more responsible. But I would have read that as a finding that it was self-evident that this was overloaded. Now, I may be wrong, but if you are going to dissuade me from that, I may have to have access to all the transcript of that particular witness.

MR DOWNES: The difficulty is, for example, there is not reproduced in the appeal books any of the evidence of Mr Bundschuh.

KIRBY J: I realise that but - - -

MR DOWNES: One knows, for example - I mean, to distinguish this case from the kind of case that your Honour is referring to, one has, for example, the evidence, I think it was at page 120, that Justice Callinan referred to, the evidence that it did not appear in any way crowded on board. There is other evidence that we have referred to - I have not taken your Honours to it - but in the factual statement in our written submissions where we refer to evidence, for example, that there was plenty of free board. The vessel was not loaded down in the water - - -

GAUDRON J: What do you mean "free board"?

MR DOWNES: That part of the hull of the vessel that is above the water line. In other words, it was not loaded down in any observable way. The exhausts were well clear of the water, and so forth.

CALLINAN J: It does not have a Plimsoll line like a cargo vessel.

MR DOWNES: No, it did not have a Plimsoll line. Another answer to your Honour Justice Kirby, as I mentioned obliquely earlier, there was no regime - there is now, I believe - in New South Wales associated with these regulations relating to the loading of vessels that were not ferry boats and other commercial vessels, prior to this accident.

MR DOWNES: Can I take your Honours then - because, particularly in the light of what your Honour has just said, it may be important to do this - to go to what his Honour actually said. I have taken your Honours to the two findings that are said to support his Honour's ultimate finding; the next thing is to go to what was his Honour's ultimate finding, and that is to be found at page 366. It is a passage that your Honours have been taken to before, but it is probably the critical passage in the trial judge's judgment, and what he says is in two paragraphs, starting at line 27:

In my view Mr Warner was negligent and Mrs Warner was responsible. I am further of the opinion that as registered controller in the circumstances of this accident she was, herself, negligent. I am satisfied as registered controller -

That is a passage that Mr Justice Rolfe returned to a number of times, saying that what motivated the finding relating to liability was her holding of the certificate of registration. "I am satisfied" - reading again:

as registered controller she owed a duty of care to the passengers on this vessel, on this day.

In our respectful submission, for reasons I will come to in elucidation of this, that is where his Honour stopped talking about duty of care. He was not talking about knowledge of overloading at the time he was dealing with duty of care. It was not approached at any event, by his Honour, on that basis. By some means, his Honour extracted a duty of care from the mere fact that the respondent was the registered controller. If that is so, then, with respect, his Honour must have erred in doing so, but that is what, as a matter of reasoning, in our respectful submission, his Honour did.

GLEESON CJ: Am I right in thinking that it would be consistent with the scheme of these regulations that a registered controller might never go near the vessel in its actual operations?

MR DOWNES: Yes.

GLEESON CJ: There is nothing in the regulations to impose any responsibility on the registered controller for the day-to-day safety of the operations?

MR DOWNES: The registered owner's responsibility - - -

GLEESON CJ: Registered controller.

MR DOWNES: The registered controller's, I am sorry, responsibility is associated with painting numbers on the side and screwing a plaque and, amongst other things, one has the vexed question, which is the issue that your Honours will have to decide in this case, relating to subregulation (11). I do not want to cover again a submission I have already put, so I will not say any more about that. But if I could go back to page 366, what we would respectfully submit his Honour is doing, departs from his "duty of care" paragraph, he is going to his "breach of duty" paragraph. He says:

He knew about boats. She had experience, over a number of years. They invited a number of the people on board, not by any means all the people. She knew, or should have known how many people were on board. She should have known that the vessel was grossly and dangerously overloaded. She should have taken steps - - -

KIRBY J: Just pause at that sentence, those words "She should have known that the vessel was grossly and dangerously" - - -

MR DOWNES: Yes, that is the finding that is relied upon.

KIRBY J: Now, do you say that, read in the context, that has to be "she, as registered controller, knows", because it is not there?

MR DOWNES: Yes, your Honour.

KIRBY J: As stated, it is just talking of Mrs Warner.

MR DOWNES: But the previous paragraph is the "duty of care" paragraph, "she owed a duty of care" line 34. This is the:

She should have taken steps as registered controller -

that is, breach paragraph.

KIRBY J: I am sorry, I interrupted you.

MR DOWNES: It is true that in that sentence your Honour took me to, another "should have" sentence, it says:

She should have known that the vessel was grossly and dangerously overloaded -

but that appears, we would respectfully submit, in the context of his Honour now addressing breach of duty. What she "should have", to use the phrase he repeats again and again, done. So we make two observations about this. First of all, we make the observation that this finding was, even if it is associated with duty of care, not warranted, and, secondly, that in any event, it deals with breach.

Now, all of this, your Honours, has to be seen in the context of what was the case put. Your Honours have been told this but if I can just remind your Honours that if your Honours go to page 3 in volume 1 of the appeal books, which is the pleading itself, or to page 497, if it is convenient, in the second volume your Honours have in front of you, there are two particulars. One is:

Inviting and allowing to be present on the boat during the relevant trip an excessive amount of people thereby resulting in the boat being dangerously overloaded.

That is the one that Mr Jackson said to your Honours was the one relied upon. Or, the second one is:

Failing to make any or any adequate enquiries from the second defendant or otherwise as to the safe amount of persons -

Mind you, the second one, as a particular, implies the absence of one of the matters which would lead to the first particular being sustainable because - - -

GLEESON CJ: Mr Downes, can I interrupt you to ask this question about the relationship of these two duties? It really involves drawing an analogy with motor vehicles. As I would understand it, there is a system of registration of owners of motor vehicles.

MR DOWNES: Yes, your Honour.

GLEESON CJ: If you own a motor vehicle you have to be registered. I do not understand anybody - - -

MR DOWNES: Yes. Well, I am not sure that - I take your Honour's point, but for a vehicle to be on a public road it had to be registered. To be registered it has to have someone registered, one says as owner, but it may not be the owner.

GLEESON CJ: I do not understand it ever to have been suggested that the fact that a person is the registered owner of a motor vehicle imposes upon that person a duty to take reasonable care for the safety of any passenger in the motor vehicle.

MR DOWNES: Yes, your Honour.

GLEESON CJ: Indeed, you would not need vicarious responsibility, perhaps, but the way in which owners of motor vehicles who are not themselves in or around or driving the vehicle at any particular time are ordinarily made responsible if there is personal injury to a passenger in the vehicle is by vicarious responsible for the conduct of the driver.

MR DOWNES: Yes, your Honour.

GLEESON CJ: Now, if a registered owner of a motor vehicle is not, by force of the registration, under a duty to take reasonable care for the safety of any person who is a passenger in the vehicle, that might lead to a question why the registered controller of a ship or a vessel is, by force of the registration alone, under a duty to take reasonable care for the safety of any passenger.

MR DOWNES: Yes, your Honour.

GLEESON CJ: You might then possibly seek to answer that question by adding an extra element, that is, presence on the particular occasion and direct capacity to exercise control, which gets you a little closer to Soblusky v Egan, but subject to that possibility, it would seem that registration, of itself, cannot bring about a duty to take reasonable care for any passenger in the vessel.

MR DOWNES: No, and to the extent to which the judge so found, we respectfully submit his Honour must have erred. What Mr Justice Rolfe says is, you have to have either - and for the moment I will call it control as opposed to being the registered controller, but one must have control plus foreseeability or, in this cage, knowledge and that those two might give rise to a duty of care, but as your Honour points out, that does not seem to have been the case in motor car cases and, of course, they are a much stronger case than this case because of the presence in all the motor car statutes of purposely built-in deeming provisions.

GLEESON CJ: But it depends again on what you mean by "control". There is an ambiguity in this concept of control. But, if I own a motor car and lend it to my wife for a week, I do not understand anybody to suggest that I am under a duty to take care to see that she drives it safely. If I am liable to a passenger who is injured while she is driving it, that will ordinarily be because I am vicariously responsible for her negligence, not because I am personally under a duty to take care for her passengers.

MR DOWNES: Yes, your Honour, that is true.

KIRBY J: But in a motor car case it does not have to be explored because of the statutory presumptions.

MR DOWNES: Yes.

KIRBY J: However, I could well imagine that if, for example, you gave your car to somebody who could not drive or who you knew was a poor driver or who was going blind or was in other ways incompetent, that you would be liable.

MR DOWNES: Yes. Well, in circumstances of ownership - and if one looks at Scott v Davis, for example, the case that was not made out, if in Scott v Davis the argument had been that the selection - the argument had been successfully maintained - it was unsuccessfully maintained, but the argument had been successfully maintained that it was negligent to permit this pilot to fly the plane - I mean, to pick a clear case, because he was obviously drunk - then such a case might be made out.

But one still has to come back to our initial submissions, my nine propositions, if I can put them that way - if I can refer to it that way, rather, that one has to find that there is a control which arises, not by ownership here, because one thing is clear, my client was not the owner, so one has to divine some power of control from the regulation and then say, in addition to that, there was knowledge, or deemed knowledge, that this vessel was dangerously overloaded. I was, in fact, addressing the second of those issues when your Honour asked me the question.

CALLINAN J: Mr Downes, could I draw your attention to this, and it may perhaps assist you, section 38 of the Act is the section which confers the power to make regulations and subsection 38(3)(g) is silent with respect to control. It provides that:

A regulation may -

. . .

(g) make both the owner and the master of any vessel liable for any breach of any such regulation committed from or in the use of such vessel;

It may be significant, perhaps, that there is no reference to controller.

MR DOWNES: Yes, your Honour. Well, I am indebted to your Honour for pointing that out and, relevantly, the word "master" would support the - I mean, it does not sound like someone who is unlawfully - - -

CALLINAN J: But it is odd. You would think that if "controller" were used in the regulations, in the sense of a person managing and operating, then you would expect the regulation making power to provide for the possibility of liability on the part of the controller, and it does not. Obviously, by so doing, it draws a clear distinction between owner and master, on the one hand, and controller, on the other.

MR DOWNES: Yes.

GUMMOW J: That is why offences such as subregulation (13) on page 15 are drafted the way they are. I mean, master, that runs throughout the whole of the regulations as you - - -

MR DOWNES: So I have taken your Honours to the passage in the judgment of the trial judge and what we say about it, and we now say - I will not read it to your Honours again because my learned friend read it right through to your Honours. In that context we say that what Justice Rolfe said on pages 508 and 509, including what he said about there being "no evidence that she had the knowledge or ought to have had the knowledge", his Honour attributed to her in line 36 on page 508, is unexceptionable. Now, can I just remind your Honours, as I draw to the end of my submissions, what is the context in which this arises.

CALLINAN J: Could I just ask you one other question? At common law, and perhaps in admiralty law, the master has a very important and significant role. I thought a master could override everybody, including the owner. The master is totally in control. If that is correct, is any of that notion imported into the Act and the regulations when there is a reference to "master"?

MR DOWNES: I am not sure how much I can assist your Honour on this. Undoubtedly maritime terms appear in the Act: "navigation", "master" and so forth, but the Act itself is concerned with specific matters not associated with the concepts of admiralty that your Honour is referring to. It may well.

CALLINAN J: It might colour in some way the learning of what the role of the master - - -

GLEESON CJ: I would have thought that learning is important in the definition of master - - -

MR DOWNES: That I what I was about to say, the definition of master is what may be guiding here.

GLEESON CJ: I cannot help wondering whether the concept of controller in the regulations fits in with the concept of master in this way that as the definition of master indicates the master is the person who is managing the vessel at a particular time. The controller is further removed. The controller is the person, for example, who can decide who can be the master.

MR DOWNES: Yes. I would not disagree with that, your Honour.

GLEESON CJ: I would have thought it is consistent with the concept of being a registered controller of a vessel that you never go anywhere near the vessel. You may not.

MR DOWNES: Yes, absolutely.

CALLINAN J: I just notice some other provisions in the Act - I have got the complete Act, now - that section 13YA makes the owner of the vessel liable for damage to the Board's property. It does not make a controller liable.

MR DOWNES: No.

CALLINAN J: I have not had a chance to look at other provisions, but that also rather suggests that the controller is not contemplated as being liable under the Act or the regulations.

MR DOWNES: Your Honours, I think it was the last of my propositions was that, addressing particular subregulation (11), it was concerned with - I have just forgotten the way I precisely put it - "use of the vessel" and not "manner of use of the vessel" which although perhaps not put in exactly the same way as your Honour the Chief Justice has just put it, associated with the master, had that idea behind it, namely, that it was a provision relating to who might use. As to manner of use, that was a manner for anyone who was authorised and who would then satisfy the definition of master.

GLEESON CJ: That does not necessarily provide the complete solution to the present problem, bearing in mind the nature of the problem. My present impression is that it would not be within the contemplation of the regulations that the registered controller would have the right to override the master and say, "Full astern" or "Full speed ahead" or "Go in that direction" or "More" at that particular location. That is the sort of decision you would expect the master to make, but what about a decision to embark on a voyage at all if the controller happens to be present and if, as a matter of fact, the controller knows or ought to know that the vessel is overloaded?

MR DOWNES: But if any decision is the master's decision, your Honour, it is the decision, sail or not sail, and consistently with what Justice Callinan is saying, that is the classic power of the master. The owner can send all the telexes in the world, but if the master thinks it is unsafe to put to sea, then that is the master's decision. Your Honour, one cannot - and perhaps this again also picks up some of the aspects underlying the notice of contention - really, one cannot divorce the number of persons on the vessel from the way it is navigated. No doubt if there had not been an increase in the speed of this vessel on its return journey, it would have returned to port in exactly the same way as it left and journeyed in the first place. So I know one does have this finding of the trial judge, that it was all caused by overloading, but that is one of the difficulties with it, your Honour.

GAUDRON J: But he did not have to find that it was all caused, did he? He only had to find a contributory cause, on ordinary principles. Is that not so?

MR DOWNES: Yes. Your Honours, I had - - -

CALLINAN J: But Mr Downes - I am sorry to go back to the Act again, but section 30F(1)(a):

Where the master is alleged to be guilty of an offence . . .

(a) the owner of the vessel, or the person having the control of the vessel -

is obliged to:

furnish a statement in writing -

giving particulars of who the master is. Again, the emphasis is upon the liability of the master. If you look at 30G, which applies to this vessel, the obligations in respect of accidents are imposed upon the master. It is referred to as "the master's vessel", "shall stop the master's vessel".

MR DOWNES: Yes, your Honour.

GLEESON CJ: That is like the provision in the Motor Traffic Act that requires the owner of a vehicle to answer a question who was driving a vehicle at any particular time.

MR DOWNES: Yes, your Honour.

CALLINAN J: The other sections of the Act, in addition to those that you have supplied us with, are obviously relevant to this question.

MR DOWNES: Yes, your Honour. I am sorry about that. Unfortunately, it has just developed somewhat as the matter has been argued.

GUMMOW J: There have always.....bits and pieces of legislation. It seems to be one of the greatest false economies of litigation I have ever encountered.

MR DOWNES: Your Honours, that proposition that your Honour Justice Callinan is now putting to me by reference to that part of the Act, though, does fit in with, and so does the whole of this scheme which your Honour is now drawing attention to, the proposition that section - - -

CALLINAN J: It is an entirely different scheme, it seems to me, from the motor vehicles insurance statutory schemes.

MR DOWNES: Absolutely.

CALLINAN J: It is entirely different.

MR DOWNES: But it fits in classically with the proposition that subregulation (11) addresses the conduct of a third party because the third party is the master. I mean, however odd it may seem, "master" is defined to include someone who, de facto, is managing a vessel. So the person who is committing an offence under subregulation (11) because he does not have the controller's authority, assuming a plain, clear-cut case, is, one would assume, the master and so the regulation falls within the regulation-making power in G, I think it was, that your Honour drew attention to.

GLEESON CJ: Well, when the trial judge referred to Mr Warner as "the skipper", did he mean he was the master?

MR DOWNES: That is the obvious conclusion, your Honour. I mean, "skipper" being, in ordinary parlance, a more colloquial expression for master.

CALLINAN J: I would have thought they were synonyms, myself.

MR DOWNES: Yes. Well, one is a bit more colloquial, that is all. Your Honours, I was going to try and just draw to an end by reminding your Honours where this particular part of the case - and for present purposes, I am now talking about the finding about knowledge - fits into the case. If, as we see it, on the vicarious liability case, your Honours find in favour of the appellant, well then, for present purposes, not a lot turns on the proposition we are now looking at but if your Honours uphold the submissions we have put on vicarious liability, one then needs to look at direct liability and, at the very least, before you have direct liability, there has to be, one, control, subject to what your Honour the Chief Justice was putting to me just after the Court adjourned, and, two, knowledge.

GAUDRON J: Control or capacity to control.

MR DOWNES: Capacity to control, your Honour. So, our submissions relating to control or capacity to control become relevant again. Assume, for the moment, your Honours find that there was a sufficient capacity to control which, in circumstances of knowledge or deemed knowledge, would give rise to a duty of care. The next question is, is there knowledge or deemed knowledge?

Now, on the state of the record at the moment, namely the judgment in the Court of Appeal, there is no deemed knowledge. In the Court of Appeal there is no relevant control either but there is a finding based in fact that there was no knowledge or deemed knowledge and it is that which Mr Jackson seeks now to challenge, asserts that it is already raised by the notice of appeal but says, "If it is not raised by the notice of appeal, I want leave to amend the notice of appeal and I make an application to that effect".

We, your Honours, say in answer to that, it is not raised by the notice of appeal, you should not be given leave to raise it and, perhaps more appositely in one sense than those first two propositions, if leave is granted and it is raised, the conclusion of Mr Justice Rolfe on those last couple of pages of his judgment, in any event, that I just took your Honours to, is correct. There was not a basis for here to find knowledge that this vessel was dangerously overloaded or deemed knowledge to that effect.

GLEESON CJ: Mr Downes, suppose that neither Mr Warner nor Mrs Warner had been present on this occasion, they had both been away on holidays, and suppose that the vessel on the particular occasion was in charge of a friend to whom the vessel had been loaned by the owner, Mr Warner - - -

MR DOWNES: Yes.

GLEESON CJ: - - -and the facts were otherwise all the same. Suppose the vessel was grossly overloaded, the fact that it was overloaded was observable and so forth. Who, if anybody, would have been vicariously responsible for the negligence of the friend, Mr Warner or Mrs Warner or neither?

MR DOWNES: Well the answer has got to be neither in the light of Scott v Davis, I would submit, your Honour, but in the case of Mr Warner, the argument would be the Scott v Davis argument, he was the owner. In the case of Mrs Warner, the argument has to be - and again, all roads really, in this case, I have to say, lead to a characterisation of what the Water Traffic Regulations achieve, and I have put the submission to your Honour as to why she would not be liable, and, in my submission, plainly she would not be liable, if not there, and nothing is added by her presence, respectfully, except on an issue of direct liability you can start asking, did she know, et cetera.

Your Honours, I have covered, I think, most of the points I wanted to raise on knowledge, but I have just got some propositions, bringing them together, and if I could just go through those: one, no one in fact foresaw it; two, there was at the time no regulation relating to safe numbers on vessels; three, nothing on the vessel indicated what were the safe numbers; four, that the vessel had sailed with numbers, in fact, in a safe fashion on previous occasions says nothing whatsoever about when the vessel, in terms of the numbers on board, became unsafe; five, the vessel was very large and was not crowded; six, the fact that the majority of people on board showed no concern and only a few showed some limited concern, goes a long way itself towards a conclusion that it was not foreseeable. That is all I want to say about that issue, and that leads me to the final issue, which is the notice of contention.

GLEESON CJ: It is put against you that we do not have before us, and the Court of Appeal did not have before it, all the evidentiary material relevant to that question. If that is right, it is a fairly powerful objection, is it not?

MR DOWNES: Well, there are two answers to that, your Honour, that the conclusion does not depend upon the evidence, it depends upon the findings made by the trial judge, and if the trial judge did not make the right finding, then the fact that the evidence is not before this Court to make the right finding is neither here nor there.

GLEESON CJ: But how do you know the trial judge did not make the right finding if you do not know what the evidence was?

MR DOWNES: Because I am attacking, your Honour, his finding per se, based on the internal reasoning.

GLEESON CJ: You mean his reasoning was self-evidently erroneous?

MR DOWNES: Yes, and the submissions are, in part, he was dealing with breach, not duty. The finding was not substantial enough to lead to a finding of knowledge anyway.

GLEESON CJ: But just a minute, a notice of contention does not support a new trial in a case like this, does it?

MR DOWNES: No.

GLEESON CJ: A notice of contention only avails you if you can demonstrate to us that the decision of the Court of Appeal ought to be upheld on a different ground.

MR DOWNES: Yes.

GLEESON CJ: Now, how can we decide that the decision of the Court of Appeal ought to be upheld on a different ground if we do not have the evidence on which your notice is based?

MR DOWNES: Well, your Honour, the notice of contention may have difficulties attached to it and I am not going to take any length of time developing it. If I could just explain to your Honour how it fits in. I started to put this submission a little while ago. If the Court of Appeal is right in saying that there was no knowledge, then on this ground, that is, the personal liability, whatever control there was, the appellant must fail. So it is only if the appellant is permitted to agitate the Court of Appeal's finding that there was no knowledge, that the notice of contention can even arise.

If your Honours look at our written submissions, your Honours will see we put it in there as something consequent upon the Court, one, allowing the appeal on this ground to proceed and, two, finding substance in the appeal and proceeding towards reinstating the judgment of the trial judge. In that event - and we have set out in writing what we say - we respectfully submit that one cannot ignore in this case, whether one has access to the transcript or not, the reality that this unfortunate accident must have been, and was, associated with the navigation of the vessel, something over which my client, on no view, could have had any say or foreknowledge, namely, the increase of the speed of the vessel at a time just prior to the accident occurring.

GAUDRON J: So be it. Let that be assumed. That does not defeat the causation argument, does it, because all that is necessary is that it be a contributing cause? Now, if the tragedy occurred as a result, one, of speeding and, two, the overcrowding, albeit that the overcrowding did no more than make it difficult for people to get off the boat in time, then causation is established against your client, is it not?

MR DOWNES: I see the force in what your Honour says. I mean, in a sense, what one says of this vessel is that it would not have foundered if its speed had not increased, but I guess I hear Mr Jackson and perhaps your Honour Justice Gaudron say, neither would it if it had had only three people on board. I think the proposition I seek to get out of this, really, your Honours, when one comes down to it, is that the two are inextricably woven together and, in those circumstances, the finding of the trial judge which says, one, there was knowledge of overloading and, two, knowledge that that overloading might lead to the vessel foundering or would lead, in appropriate circumstances, to the vessel foundering, is not sustained by the evidence. It is not sustained - - -

GAUDRON J: But does the knowledge have to go that far? You see, I was raising that with you earlier. Once you accept contributing cause, why does knowledge or foreseeability have to go beyond knowledge that in these circumstances a disaster is possible?

MR DOWNES: Yes, but in these circumstances has to be knowledge that this vessel is so overloaded that in the right circumstance it might sink.

GAUDRON J: No, not that in the right circumstances it might sink. I mean, you may have had exactly the same problem if there had been a fire on board which was, say, the result of the manufacturer, for example, or may have been the result of the proper failure to repair and maintain pursuant to a contract, but let us assume a fire for which neither your client nor her husband could be held to be responsible. The fact that it was overloaded so that people could not jump ship, if you like, in time would still be causative of any injuries that occurred.

MR DOWNES: Your Honour, I have this difficulty with that illustration, that, I mean, overloading may not be relevant at all to fire because fire is more associated with where people are rather than how many are on board, but - - -

GAUDRON J: Well, the question of the number of people who are on board may well be relevant to how quickly you can get them off.

MR DOWNES: Loading and speed are inextricably, we would submit, linked.

GAUDRON J: Different. There is no doubt that only 10 people were on the flybridge, was that not right?

MR DOWNES: Yes, your Honour.

GAUDRON J: So, there were 39 distributed between - what do you call the under the bridge?

MR DOWNES: There is no diagram of this vessel and I am not - - -

GAUDRON J: No.

MR DOWNES: But, if it is conventional, there would be a stern where people could gather in the open air, a saloon which is above decks and which would have very easy ingress and egress out onto the stern and then right up at the front of the vessel there would be an area which is where I believe that the children were. I do not know that anyone knows which of the two safest parts, which would be the saloon and the stern, were being occupied by people. Can I just conclude by reminding the Court on those matters that your Honour has been referring to that - I mean, I do adhere to the submission that before there could be a duty of care there has to be a finding of knowledge that this vessel was dangerously overloaded.

GAUDRON J: And there is.

MR DOWNES: And, I say that because that is the way the case was conducted. That is the way it was pleaded.

GAUDRON J: But there is a finding to that effect, is there not?

MR DOWNES: Well, I have put a submission - I will not repeat it - that there is not a relevant finding of that on duty of care. It is on breach and it is not sustained.

GAUDRON J: What difference does it make that it is on breach rather than on the existence of duty of care?

MR DOWNES: That shows that the judge misdirected himself, because he found that the duty of care arose merely from the existence of the status of registered controller.

GAUDRON J: I would have thought that submission would ordinarily be greeted with the response, "Why should the trial judge repeat himself? You may be right, but you must ultimately lose on that basis, because there is such a finding." There would be no difference in principle as to how the finding should be made.

MR DOWNES: Those are the submissions on those matters, and that leaves me only with a couple of matters to conclude with. I think the case your Honour Justice Kirby was referring to before lunch, relating to the crane driver, was Leask Timber and Hardware v Thorne [1961] HCA 73; (1961) 106 CLR 33. It is a different statutory system. It is the kind that one perhaps anticipated, but I do notice that in the judgment of Mr Justice Kitto at page 44, which seems to be a majority judgment in which other judges agreed, he does approach the matter in the way we have sought to approach this matter, that is, looking at the scope and purpose, the object, and so forth of the relevant regulations.

A case which may be of some assistance on the proposition that your Honour the Chief Justice raised, relating to the fraud, is a decision in the United Kingdom, Goodbarne v Buck [1940] 1 KB 771. It is a motor vehicle case. It has some parallels and may be of assistance in connection with this case, but for present purposes is a situation in which the registered ownership of the vehicle was in a name fraudulently to avoid problems with an insurer. In other words, the true owner would not have been insured because of a record. There it was held that, on the legislation there in place, no statutory duty of care arose.

Your Honours, the last matter is this. Your Honour Justice Gaudron said, for example, why could not the respondent have gone to the police after she had withdrawn authority unsuccessfully and, because the police would then follow the matter up, why does that not give her some control? Could we say two things about that. One, our submissions lead to the conclusion that she had no obligation to do so, and much as it has been said this afternoon, we would respectfully submit, assists that proposition. But, more importantly, anyone, on this occasion, could have gone to the police - - -

GAUDRON J: If she had withdrawn permission.

MR DOWNES: Yes, but there was no need for any withdrawal of any permission. Anyone could have gone to the police because an offence was committed on this basis on the assumption that one had an observably overloaded vessel, an offence was committed under regulation 3:

A person shall not navigate a vessel on any enclosed water recklessly or negligently -

et cetera -

or otherwise in any way that is dangerous to or likely to cause injury-

et cetera.

GAUDRON J: That is the Maritime Services Act?

MR DOWNES: No, it is the regulations themselves, your Honour.

GAUDRON J: Regulations.

MR DOWNES: So anyone could have gone to the police. There was no need to any revocation of authority; it would just be a matter of saying, an offence is being committed, this vessel is being navigated while dangerously overloaded. Those are our submissions.

GLEESON CJ: Thank you, Mr Downes.

CALLINAN J: Mr Downes, just one matter. I was actually reading from the 1997 reprint of the Maritime Services Act; I wonder if you and Mr Jackson could - - -

MR DOWNES: Could agree on the - - -

CALLINAN J: - - - and provide the Court with the Act and the regulations complete, as they were on the relevant date.

MR DOWNES: And provide copies, absolutely, your Honours. I think I can say this, your Honour, the regulations as they are attached to the Mr Jackson's written submissions, are the regulations in force at the relevant time. So I think that leaves the task of giving your Honours complete copies of the Act, as it was at the relevant time.

GLEESON CJ: Thank you, Mr Downes. Yes, Mr Jackson.

MR JACKSON: Your Honours, may I just say something about the actual findings of fact, some of which have been referred to by our learned friend, but some of which have not, in relation to the question of what caused the mishap. Your Honours, could I say one thing, however, before going to that, and it is this: that our learned friend used on a number of occasions the expression "a very large vessel". The vessel was only 36 feet long, which is really only a little more than half the length of a cricket pitch. In fact, it is about four feet longer than the Bench.

So, your Honours, to have a 36 foot vessel with 31 adults, 17 children and 1 baby aboard is, if I could put it this way, rather rub-a-dub-dub. Your Honours, the judge accepted the evidence of Mr Bundschuh that the vessel was visibly overloaded by a factor of more than two. Your Honours will see that at page 360 in volume 2, about line 19, where he said, on one of a number of occasions, that he preferred his evidence and he agreed with what he said. Your Honours will also see him accepting that evidence in a passage which goes from page 361, line 44, through to page 363, line 39. Your Honours will see that in that passage he sets out five reasons why he accepts his evidence and the fifth of them at page 362, line 36, is:

Fifthly, I was more impressed with his evidence. I believe he was correct.

Your Honours, the evidence to which he is there referring is the evidence which he has earlier set out at page 358 and that commences, relevantly, about line 33, where he discusses the inquiry that was carried out by him, and then it goes on to page 359, about line 37. Your Honours, may I indicate some matters arising from that passage. The first is at the top of page 359 where his evidence was, in relation to a "safe load":

One clear thing is that it was a lot less than 49 passengers.

Secondly, immediately following, he expressed a view about what was an appropriate load. He said:

probably eighteen with four of those allowed on the upper deck.

His Honour then went on, your Honours, to say, in the next paragraph, the end of it, "it would have been visibly observable", and, your Honours, in the circumstances, bearing in mind the finding that he later made in relation to the respondent, it seems apparent enough he was speaking about "observable" to someone who was looking to see it - that the vessel was overloaded. Then, your Honours, that is followed by the next line:

He said that having 49 people on board was an objective sign of danger. He said the load on the fly bridge was a major factor in the lack of reserve of stability. He said it was a grossly overloaded vessel and dangerously overloaded.

GLEESON CJ: Mr Jackson, this is presumably relevant to the case of actual liability as distinct from vicarious liability?

MR JACKSON: Yes, of course, your Honours. His Honour then went on to hold that if it had not been overloaded it would not have mattered. Your Honours, that appears at page 360 and your Honours will see, between lines 25 and 30 where his Honour said that he accepted:

that had it not been overloaded it would not have mattered; this sort of vessel can veer suddenly to port and not founder or capsize.

Your Honours, the finding that his Honour then made appears two pages on at page 362, at the bottom of that page, about line 40 where his Honour commenced to set out his actual findings. Your Honours will see the last paragraph on that page. The findings go on, I should say, to about line 34 on page 363 but your Honours will see, particularly, the paragraph commencing about line 19 on page 363 where his Honour said:

The vessel was grossly overloaded and dangerously overloaded.

He referred to the lack of stability. He said:

I am satisfied there were 10 people on the fly bridge with 39 people below. The safe number . . . was about 20, including about 4 on the fly bridge.

He went on again to say it:

was grossly overloaded. I am satisfied that if the vessel was not grossly overloaded, that the veer to the left, or port, would not have caused the vessel to founder.

Now, your Honours, our learned friend referred to the fact and, your Honours, it is difficult to respond fully because, again, one does not have the evidence of all the witnesses and some of the lay witnesses, as it were, who gave evidence, their evidence is not before the court, to the fact that the majority of people did not feel the vessel was overcrowded but your Honours will see at page 363, the last three lines on the page, that some people did have the concern that the vessel was crowded.

Now, your Honours, bearing in mind the evidence to which I referred earlier that the respondent knew how many people were on board and bearing in mind the evidence of the expert witness, whom his Honour accepted, the judge was entitled to say, in our submission, as he did at page 366 that - and your Honours have been to the passage a number of times - between lines 40 and 45:

She knew, or should have known how many people were on board. She should have known that the vessel was grossly and dangerously overloaded.

Now, your Honours, it was not only the evidence of Mr Bundschuh. As things happened, one of the boats close on the scene contained Mr Steber who was the principal of the firm that had built the boat and your Honours will have seen that at first instance his firm was sued by us and we have failed. But, your Honours, he gave evidence in the proceedings and your Honours will see that referred to at page 368. Your Honours will see the introductory part at page 368, about line 32 and then at the bottom of the page that the first of these cruisers was built in about 1977, they have manufactured a large number of them.

On page 369, the paragraph commencing at about line14 refers to the fact that there could be some modifications to them and particularly in relation to the flybridge. But, then, at about line 42 on page 369:

Mr Steber knew of no vessel of this size which had been loaded with 49 passengers, nor had he ever taken that possibility into account.

Your Honours will see that at the top of the page he was asked:

Did you ever have in mind that the vessel might have been called upon to carry 49 persons, including children?

A. No."

KIRBY J: But that, of course, is addressed to his opinion and his experience.

MR JACKSON: Of course, your Honour, but one has a situation, where a person who has been building the boats, at the time, for 13 years was asked, "Do you know of any vessel of this size which had been loaded with 49 passengers?", obviously saying and no doubt, in a sense in his own I interests, but the judge found in his favour on the question, that that is not the sort of thing one would contemplate that in a vessel of this size you would have 49 passengers.

KIRBY J: What do you say about that passage that Mr Downes latched on to on 366 where, dealing with the question of the duty of care, the primary judge said:

I am satisfied as registered controller she owed a duty of care - - -

MR JACKSON: Yes, your Honour. At about line 30 Your Honour will see the expression "in the circumstances of this accident" which immediately precedes what was said about duty, and your Honour will then see in the next paragraph that his Honour is there speaking about the facts of the case.

Your Honours, I have referred your Honours to the top of page 370 and your Honours will also see, if one goes to page 371 in the passage between lines 24 and 41, that his Honour goes on to deal with the question whether the overloading was a factor, and he takes the view that it is. Your Honours will see then, at the bottom of page 371, in a passage which goes through to page 372, about line 22:

that it was an abnormal event to have 49 passengers on this boat, not something that a manufacturer in 1985 would have expected.

And your Honours will then see, between lines 25 and 30:

assuming their location was one on the fly bridge and 48 people below -

the view was expressed -

that the vessel was unsafe -

Your Honours will then see at the bottom of page 372, the last paragraph, that his Honour goes on to express the view that even if there had only been one person on the fly bridge, the vessel would still have overturned and founded and sank.

Your Honours, in our submission, this was a case where there was a gross and obvious and a visible overloading and, your Honours, as we submit in our written submissions in paragraphs 39 and 40, the judge's finding in relation to the respondent involves, in our submission, declining to accept some of her evidence and, your Honours, the finding at page 366 is a finding which involves issues of fact.

GLEESON CJ: Mr Jackson, the case on vicarious liability, I presume, would be no different if Mrs Warner had been overseas at the time of this accident?

MR JACKSON: He would have to be, your Honour, yes.

GLEESON CJ: Then put that case to one side. As to the case on personal liability, there was on board a retired naval officer.

MR JACKSON: Yes, your Honour. I do not know whether he was an engineer or - - -

GLEESON CJ: No, but suppose the retired naval officer had said to himself, "This vessel is obviously and dangerously overloaded". That would have not resulted in any tortious responsibility on his part, would it?

MR JACKSON: No.

GLEESON CJ: He would have been entitled to just sit there and keep that thought to himself and perhaps take up a position near a life jacket.

MR JACKSON: Yes, your Honour. Somewhat nervously, yes.

GLEESON CJ: So that the fact that Mrs Warner either knew or should have known that the vessel was dangerously overloaded is beside the point unless she had a duty to take care for the safety of the passengers.

MR JACKSON: Yes.

GLEESON CJ: And relevantly to the facts of the present case, that would have to be a duty to exercise care in relation to the management of the vessel by the master on that occasion. It might be different if, for example, you had a vessel that had inadequate lifeboats or a vessel that was structurally unsound. I could understand a registered controller of a vessel perhaps having a duty not to allow the vessel to be in the charge of a notorious alcoholic, or something like that, but the content of any relevant duty in the present case would have to be related to a duty to exercise reasonable care in relation to the supervision of the management of the vessel by the master for the safety of passengers.

MR JACKSON: Well, your Honour, that is the point at which, with respect - that makes the duty a little too narrow because your Honour will appreciate that the word "controller" has been used, it being a defined term and it is, no doubt, a convenient way of describing things for brevity, but one is speaking about the concept as dealing with, really, the three elements in regulation 2(3), and that is "to decide the possession, disposition and use of the vessel".

Now, your Honour, the position, in our submission, is that, under the terms of the regulations, a vessel cannot be navigated, using that term to describe its actual use by way of navigation, without the authority or consent of the holder. Now, your Honour, if one had a situation where, as in a case like this, before the vessel leaves, at least the place where they were having lunch, if it should be apparent that the vessel is overloaded, then even if one puts it at the basis of taking reasonable care, as the judge said, she should have been aware the vessel was dangerously overloaded, then her duty was to prevent the vessel being used.

GLEESON CJ: Now did the duty arise from the fact of her right to control the use of the vessel, or did it arise from the fact of her registration as controller?

MR JACKSON: Your Honour, with respect, I am not certain in the end that that is doing more than describing the same thing in two ways.

GLEESON CJ: Well, it might be, because your opponents assert that she had no right of the former kind, despite the superficial appearance and the admission implicit in the application for registration.

MR JACKSON: Your Honour, there is not anything stated in the regulations which requires the person who is registered to be the owner. Your Honour will have seen, for example, that there is a reference in regulation 11(7)(a) and (b) to there being a cancellation of registration in certain circumstances. But one sees that the circumstance which brings about the right to have a registration cancelled or changed is not change in ownership, but change in a "control" in the defined sense. There is no reason at all why a person who, for the purposes of the regulations, is the person nominated as being the person who has control in the defined sense has to be the person who is the owner.

GLEESON CJ: But the argument against you, whether it is right or wrong, is that, as a matter of legal right, if she had said to Mr Warner, "Don't take that vessel on this journey with that number of passengers", he had the right to say to her, "Go and jump in the lake."

MR JACKSON: Your Honour, if he were to say that, that would leave out of account the fact that an offence would be committed under regulation 11(11), because of the fact that - - -

GLEESON CJ: Yes. Even so, it is a question of right. It is a question of whether or not, on the evidence, on the totality of the evidence - which includes the application for registration - I am sorry, which does not include the application for registration - the proper conclusion is that she had the right to control the use of the vessel, unless, of course, you answered my question by saying: her liability - her duty of care, arose from the fact of registration, as distinct from the right of control.

MR JACKSON: Your Honour, our submission would be that her right arose in the first place from a fact of registration and the system provided for by the regulations is one in which, absent the consent or authority of the person who is the registered controller, whoever that person might be, the person may not, even if that person be the owner, lawfully use the vessel. Of course, if that person falls out with the registered controller or wants to change, they can take the steps to have it changed and dismiss that person, as it were, but until that happens the regulation continues to apply. Your Honours, the ability to obtain a relatively rapid change of the registration facilitates that situation.

But, your Honour, the second thing is that - and I was about to take your Honours to some other parts of the evidence concerning what took place in relation to her becoming controller - it is clear that it was done with his consent and it was done with his consent and something where he chose to say to her, "At least, as between the two of us you are the person who is to have, in relation to the vessel, the powers of the registered controller."

Now, your Honours, there is no reason why, until that situation comes to an end, which can only come to an end ultimately by the change of the registration, that she is not to have those powers. Now, your Honours, that is the next aspect to which I wish to go. How did she become the registered controller? Your Honours have been taken to some of the evidence and may I just endeavour, very briefly, to put that in the context.

One starts, your Honours, with some evidence which was being adduced from Mr Warner at the trial, in volume 1 at page 173 about line 35 in relation to the acquisition of the vessel. Your Honours will see that if one goes to the bottom of that page there is a discussion about that, then at page 174 at the top of the page it was being paid by cheque and then your Honours will see at page 175 there is a discussion through the first two-thirds of the page about the various cheque numbers including some cheques coming from an account being drawn by a company there referred to as "Powella". Various spellings of it appear in various places.

The judge intervened, as you can see between lines 35 and 40 saying, in effect, what is all this about and my learned friend, Mr Motbey, stated the case for the respondent. Then at page 176, line 14, in the paragraph commencing there, that is:

that the title to the boat has never been in Mrs Warner -

in the respondent, and:

The probabilities are that the title to the boat has always or remained in Mr Warner although it does appear that he intended that the title should be with Powella. It does not appear that the intention was ever effectuated.

Your Honours will then see at page 177, commencing about line 14 and going to about line 23, they say:

it was bought by Mr Warner with his own money and bought on behalf of Powella.

And they say it may turn out that the intention was not effectuated. And, your Honours, one then sees the evidence recommencing at the top of page 178, where he said, in the first answer:

I intended it to be my own property, but the intention was that it would be held by the company Poealla.

GUMMOW J: Whereabouts is that, Mr Jackson?

MR JACKSON: That is at the top of page 178, your Honour, the first question and answer.

GUMMOW J: Thank you.

MR JACKSON: Then at page 179, your Honours will see the short version of his reason for using his wife's name. Your Honours have been taken to that already, I think, between lines 25 and 35. There was a reference in the preceding few paragraphs to the fact that he did not intend to make a gift of it. From there one goes to page 218. Your Honours have been taken to page 219; if I could just go to 218 first. Between lines 25 and 30 there is a reference - and there are other references to his wife having had a majority shareholding in Pawella, and then line 35:

The choice of Poealla as the vehicle to purchase the boat . . . was a deliberate one wasn't it?

A. It was.

Then one comes to page 219 and your Honours have been taken to some parts of it already. May I just indicate the more important ones, your Honours. Between lines 20 and 25, he filled out the original registration form and then about lines 29 and 30, each year after the purchase she had to sign her name on the form and about line 35, they had discussed the fact that she was registered as controller. A little further down the page, line 40:

Q. Carrying significant responsibilities for your wife as the registered controller?

A. I wouldn't have said they were significant but she had responsibilities.

At the bottom of the page he was asked:

Q. Well what did you think registration was?

A. Purely that. That there was a name required for the service of notices and to have a party in who's name the vessel would be registered.

Then, your Honours, about line 15 on page 220, he referred to the fact that he had been a Deputy Registrar of the Land Titles and said:

I was very familiar with property title and knew the consequences of registration -

He:

was also aware that registration of either a vessel or of a vehicle had nothing to do with ownership.

And then at the bottom of the page he was asked:

Q. Don't you think that whoever becomes registered in relation to a boat ought to know what that entails?

A. I would have thought there would be some third property -

"party" I think the word must be -

or injury compensation involved in that, it has with a vehicle.

Your Honours will see that goes down to page 221, about line 15. At page 249 in a passage that goes from about line 15 through to page 250, about line 18, he referred to the fact that one of the objects, in fact, was to keep all of his "assets at arm's length". That is at page 249, about line 37.

GAUDRON J: What does that mean? Is that further elaborate it?

MR JACKSON: I am sorry, your Honour, what - - -

GAUDRON J: "At arm's length". Is that - - -

MR JACKSON: What he seems to be suggesting - and you can see this, for example, between lines 18 and 22 - he wanted to keep the purchase:

isolated from the other companies that were involved in risk transactions.

They were involved in land development. Your Honours, one then sees at the top of page 250 in a passage that goes from the top to about line 15:

It was a family asset.

Then between lines 35 and 40, the only reason it was not included as an asset of the company was:

that it is an oversight on the part of the accountants.

Your Honours, finally, on this aspect, the respondent knew that it was in her name. That appears at page 147. Your Honours, that is between lines 15 and 25.

GLEESON CJ: Now, the trial judge's conclusion that Mr Warner was the owner of the vessel was presumably based upon the fact that he paid for it?

MR JACKSON: Yes, your Honour.

GLEESON CJ: He apparently paid for it with the intention that the company should be the owner of it.

MR JACKSON: Yes. Your Honour, when I say he paid for it, some of the cheques actually came from the company. But, your Honour, the issue is one that in a sense, I suppose, went away, at least in the Court of Appeal because our side in the Court of Appeal said it was accepted that he was the owner.

GLEESON CJ: On one possible point of view, that also may bring to an end the issue of vicarious liability because it would be a rather unusual situation that somebody is vicariously responsible for the negligence of a person who is both the owner and master of the vessel.

MR JACKSON: Well, that depends, your Honour, in the sense that one is not in a situation where the issue is purely one of owner and master. The regulations do provide for, possibly, a third person to have an involvement and that person to have, at the least, a power of veto in relation to what use is made of the vessel.

CALLINAN J: I suppose you say, in a sense, that the fact that she applied for the certificate involves an admission against interests that she was a controller, in a real sense.

MR JACKSON: Yes, your Honour, that she had the powers contemplated by control. Your Honour, although the factual finding in the end, or the factual assumption, was that he was the owner, when she was interviewed by Detective Coffee - and this is both discussed in the evidence and your Honours will see it set out in an exhibit; I will give your Honours a reference to it in a moment - she said, in effect, "I am the owner", but it is clear enough in the context she was speaking of treating herself as the registered owner. Your Honours will see that in volume 2 at page 325 and following. I will not go to the detail of it now. But, your Honour, what your Honour puts to me is right.

CALLINAN J: Well, you are better if she is the controller than you are if she is merely the owner.

MR JACKSON: Indeed, your Honour, yes, because what the regulations provide for is a situation where it is an offence for the vessel to be used contrary to her dictates, to put it shortly.

CALLINAN J: Well, is that right? I mean, I just wonder whether, if any registrable vessel is unregistered, it is the owner and the master who are guilty of an offence.

MR JACKSON: Your Honour, in those circumstances, there is ex hypothesi no controller. There only comes into being such a person, in a sense, by the registration.

CALLINAN J: Which really rather suggests that they are the people who are responsible for registration, because they are the obvious controllers.

MR JACKSON: I am sorry, your Honour, with respect, but that is one reason. Obviously, they are the people closest to the vessel. One owns it and one is a person sailing it. What is proscribed is sailing a vessel which is not registered, and they are the people involved. One of the objects, of course, is then to have a person who will be the controller, the nominated or registered controller. It is not a phrase appearing in the Act, but it is - - -

CALLINAN J: If the word "control" were not used, or "controller", and the word "nominee" was used, you would have a much weaker case.

MR JACKSON: It may well be, but could I just say, your Honour, in relation to it, that the expression "registered controller" is a term used for brevity. One keeps seeing it - - -

CALLINAN J: I mean, your stronger point is really the introductory words to subregulation (2), "A person who controls a registrable vessel", the use of the verb "controls".

MR JACKSON: I am sorry, your Honour. Your Honour was looking at regulation - - -

CALLINAN J: I was looking at regulation 11(3)(2), I am sorry - no, 11(2), I beg your pardon, 11(2).

MR JACKSON: Yes, your Honour, but, of course, "control" being necessarily the defined term and "control" meaning "the right to decide the possession, disposition and use", and when one comes then to regulation 11(11), the expression "use", I think, appears in that. Could I just go then to the question of - your Honour the Chief Justice, I think, asked a question about registrable vessels and sailing vessels. The definition of "registrable vessel" in the regulations defines some sailing vessels over a particular size as being registrable vessels.

Your Honours, I have referred already to my learned friend's submission about the ability to cancel registration. Could I invite your Honours, in that regard, to go as well to our submissions in reply and could we refer, particularly, in that regard, to paragraphs 4 and 5 of those submissions which deal, in a sense, with that issue? I will not take your Honours through the detail of our reply submissions. They deal with a number of matters referred to by our learned friends. May we invite your Honours to read them in due course. Could I say three further things? One is in relation to the provisions of the Act itself and your Honour Justice Callinan referred, I think, to section 13YA - - -

CALLINAN J: I was looking at the 1997 reprint, I have since discovered, Mr Jackson. I do not know whether the Act in force at the time was the same.

MR JACKSON: Your Honour, some of the provisions were, I think. Section 13YA, which is a provision dealing with damage to property - your Honour, that is a provision that has its origins, I think, in the Merchant Shipping Amendment Act or 1901, or something of that kind, but it was a provision which was designed to place an absolute liability, or a strict liability, I should say, on the owners of vessels whose vessels damage port installations in various parts of the world and it is the second part of it that then gives liability on the part of the person in charge of the vessel, the master of the vessel, if the master is actually negligent. Your Honours, it is a provision which has some historical background to it. It is, your Honours, I think, dealt with in one of these cases in this Court, but I just - - -

GUMMOW J: It is referred to in Scott v Davis.

MR JACKSON: Yes, the particular case eludes me for a moment. It is a provision that the Merchant Shipping Act provision has now gone with the Commonwealth legislation.

But your Honours will see in relation to the regulation-making provision that there are regulations in broad terms. Could I refer, for example, to sections 38(2)(f), 38(2)(fi), 38(3)(b) and 38(3)(h). There is, I think one of your Honours observed, a reference to the person in control of the vessel, though not in a defined sense, in section 34(1)(g). Your Honours, that is the first matter.

The second matter is in relation to our learned friend's notice of contention. Your Honours, we have, I think, in the course of the submissions I have made, really dealt with all the matters I wanted to say in relation to the notice of contention, except this, and that is, if one looks at it in summary, it is a curious situation if one is able to rely in the Court on a point which has not been dealt with at all in the Court of Appeal because the issue is one which was not raised in the Court of Appeal by an appellant in that court.

Now, your Honours, the last thing I wanted to say was that we had foreshadowed in our written submissions that if there was any doubt about our ability to raise one point we would seek leave to amend the notice of appeal. Could I give your Honours copies of a draft in that regard which sets out what we would seek?

GLEESON CJ: Thank you.

GUMMOW J: The case is Oceanic Crest [1986] HCA 34; 160 CLR 626, I think, Mr Jackson.

MR JACKSON: Thank you, your Honour. That is the amendment, your Honours, which is foreshadowed in our outline of argument in paragraph 22.

GLEESON CJ: Yes, thank you, Mr Jackson.

MR JACKSON: Those are our submissions.

GLEESON CJ: We will reserve our decision in this matter and we will adjourn.

AT 3.34 PM THE MATTER WAS ADJOURNED