A Queensland Court recently delivered a decision awarding a plaintiff significant boating compensation in regards to an on-board fire.
In early 2005, the plaintiff launched the plaintiff’s boat. Upon engaging the boat’s ignition, a fire broke out which severely damaged the boat, which led to the plaintiff’s consequential injury.
The defendants were partners in a business that provided maintenance, repair and modification of outboard marine engines and ancillary parts. In late 2004, upon their advice to the plaintiff, the defendants replaced the fuel lines of the boat and installed an electric fuel pump.
The plaintiff claimed that the fire on the boat and the plaintiff’s consequential injury were caused by a breach of contract by the defendants and a breach of a duty of care owed by them to exercise reasonable skill and care in the performance of the work, including the advice given to install an electric fuel pump
In coming to its decision, the Court considered a number of issues.
For the purposes of this case note, we will be focusing on the following two (2) key issues:
1. Was harm caused by a breach of duty of care and/or contract?
2. Should the awarded compensation be reduced where there was some evidence the plaintiff’s wages did not reduce since the date of injury?
Findings of the Court
Was harm caused by a breach of duty of care and/or contract?
Though it was not an express term of the contract, the defendant admitted that there was an implied term of the agreement for the defendant to act with reasonable skill and care and diligence in the performance of its services under the agreement.
The defendant also admitted they owed the plaintiff a duty of care to act with reasonable skill, care and diligence in the performance of their services.
The defendant therefore owed duties in both tort and contract to the plaintiff.
Significant expert evidence was heard by the Court, which persuaded the Court of the following matters (without limitation)
1. the most likely sources of the fire was a spark or arc of electricity emanating from the battery connections at the terminals; and
2. the installation of an electric fuel pump in the battery compartment of the boat materially increased the risk of a fuel leak (and therefore, the fire).
The Court held that by the defendant recommending and installing the non-marine grade electric pump, the defendant breached both the implied agreement term and their duty of care. Reasons for this included (without limitation):
1. No warnings were given to the plaintiff by the defendant of the risk of installing the non-marine grade electric pump;
2. The plaintiff did not have an understanding or acknowledgment of the risk;
3. Clamps installed by the defendant to secure the fuel line were not marine grade and subject to rust. This materially heightened the plaintiff’s exposure to risks; and
4. No regular inspections were recommended by the defendant to the plaintiff.
Expert medical evidence revealed that the plaintiff suffered personal injury, including severe and chronic post traumatic stress disorder, a moderately severe substance dependence and some spinal injury.
Therefore, the Court held that harm was caused by the defendant’s breach of duty of care and under the contract.
Should the awarded boating compensation be reduced where there was some evidence the plaintiff’s wages did not reduce since the date of injury?
The medical evidence heard by the Court supported the conclusion that the plaintiff sustained a significant permanent disability that affected not only the plaintiff’s enjoyment of life but adversely the plaintiff’s capacity to earn income.
The plaintiff had substantially reduced employment duties since the accident. However, notwithstanding this, the plaintiff’s wages was not necessarily reflective of the plaintiff’s reduced employment duties.
Fortunately for the plaintiff, the evidence in the matter led the Court to conclude that it was probable a substantial repayment would be made by the plaintiff to the plaintiff’s employer.
However, the Court did note that if the Court’s conclusion was that such a substantial repayment was unlikely, the Court’s assessment would have been less. This would be because the plaintiff’s incapacity for work was not actually productive of the economic loss the Court assessed.
Our Comments on the Decision
Every compensation claim needs to be considered in the context of its own specific circumstances.
However, we consider the following to be some important “take-home messages”:
1. Service providers need to be aware that in a contract for service (mechanical repairs, professional services, advice and recommendations) that a term of reasonable care, diligence and skill will likely to read into the contract even where there is no express term to that effect in writing
2. Plaintiffs will need to appreciate that they bear both the persuasive and evidentiary onuses of proof in theses cases. It is commendable that the plaintiff was meticulous in keeping records of dates and events which undoubtedly assisted the Judge’s assessment of the weight of the plaintiff’s oral evidence regarding the critical events giving rise to the contractor’s liability; and
3. Plaintiffs in senior positions such as directors of an organisation may demonstrate an entitlement to economic loss when in fact there is little or no evidence of material loss, provided they can establish that the organisation was in a position to offer better remuneration and that then failed to materialise following the event, or there is clear understanding between the senior officers of the organisation that the plaintiff would make arrangements to repay a certain amount.
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